Document:

1999 Stock Plan

 Exhibit 10.1 
  
 PALM, INC. 
  
 1999 STOCK PLAN 
 (As Amended through October 15, 2002) 
  
 1.    Purposes of the Plan.    The purposes of this 1999 Stock Plan are: 
  

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	to attract and retain the best available personnel for positions of substantial responsibility, 
 

  

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	to provide additional incentive to Employees, Directors and Consultants, and 
 

  

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	to promote the success of the Company’s business. 
 

  
 Options granted under the Plan will be Nonstatutory Stock Options. Stock Purchase Rights may also be granted under the Plan. 
  
 2.    Definitions.    As used herein, the following definitions shall apply: 

 
 (a)    “Administrator” means the Board or any of its Committees as shall
be administering the Plan, in accordance with Section 4 of the Plan. 
  
 (b)    “Applicable Laws” means the requirements relating to the administration of stock option plans under U. S. state corporate laws, U.S. federal and state securities laws, the Code, any stock
exchange or quotation system on which the Common Stock is listed or quoted and the applicable laws of any foreign country or jurisdiction where Options or Stock Purchase Rights are, or will be, granted under the Plan. 
  
 (c)    “Board” means the Board of Directors of the Company. 
  
 (d)    “Cause” shall mean (i) an act of personal dishonesty taken by the Optionee in
connection with his or her responsibilities as a Service Provider and intended to result in substantial personal enrichment of the Optionee, (ii) Optionee being convicted of a felony, (iii) a willful act by the Optionee which constitutes gross
misconduct and which is injurious to the Company, (iv) following delivery to the Optionee of a written demand for performance from the Company which describes the basis for the Company’s reasonable belief that the Optionee has not substantially
performed his duties, continued violations by the Optionee of the Optionee’s obligations to the Company which are demonstrably willful and deliberate on the Optionee’s part. 
  
 (e)    “Change of Control” means the occurrence of any of the following events: 
  
 (i)  Any “person” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act) becomes the
“beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing fifty percent (50%) or more of the total voting power represented by the Company’s then
outstanding voting securities who is not already such as of the Effective Date; or 

  
 (ii)  The consummation of the sale or disposition by
the Company of all or substantially all the Company’s assets; or 
  
 (iii)  The
consummation of a merger or consolidation of the Company with any other corporation, other than a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent
(either by remaining out-standing or by being converted into voting securities of the surviving entity or its parent) at least fifty percent (50%) of the total voting power represented by the voting securities of the Company or such surviving entity
or its parent outstanding immediately after such merger or consolidation; or 
  
 (iv)  A
change in the composition of the Board occurring within a two-year period, as a result of which fewer than a majority of the directors are Incumbent Directors. “Incumbent Directors” shall mean directors who either (A) are directors of the
Company as of the Effective Date, or (B) are elected, or nominated for election, to the Board with the affirmative votes of at least a majority of those directors whose election or nomination was not in connection with any transaction described in
subsections (i), (ii), or (iii) above, or in connection with an actual or threatened proxy contest relating to the election of directors to the Company. 
  
 Notwithstanding the foregoing, in no event shall either or both of the following events constitute a Change of Control: (i) the initial public offering
of the Company’s securities pursuant to a registration statement filed under Section 12 of the Exchange Act or (ii) the spin-off of the Company from 3Com pursuant to one or more transactions in which 3Com distributes eighty percent (80%) or
more of its securities ownership of the Company to the shareholders of 3Com. 
  
 (f)    “Code” means the Internal Revenue Code of 1986, as amended. 
  
 (g)    “Committee” means a committee of Directors appointed by the Board in accordance with Section 4 of the Plan. 
  
 (h)    “Common Stock” means the common stock of the Company. 
  
 (i)    “Company” means Palm, Inc., a Delaware corporation. 
  
 (j)    “Consultant” means any person, including an advisor, engaged by the Company or a Parent or Subsidiary to render
services to such entity. 
  
 (k)    “Director” means a member of
the Board. 
  
 (l)    “Disability” means total and permanent
disability as defined in Section 22(e)(3) of the Code. 
  
 (m)    “Effective Date” means the effective date of this Plan as determined in accordance with Section 7. 
  
 (n)    “Employee” means any person, including Officers and Directors, employed by the Company or any Parent or
Subsidiary of the Company. A Service Provider shall not cease to be an Employee in the case of (i) any leave of absence approved by the Company or (ii) transfers between locations of the Company or between the Company, its Parent, any Subsidiary, or
any successor. Neither service as a Director nor payment of a director’s fee by the Company shall be sufficient to constitute “employment” by the Company. 

 
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 (o)    “Exchange Act” means
the Securities Exchange Act of 1934, as amended. 
  
 (p)    “Fair Market
Value” means, as of any date, the value of Common Stock determined as follows: 
  
 (i)    If the Common Stock is listed on any established stock exchange or a national market system, including without limitation the Nasdaq National Market or The Nasdaq SmallCap Market of The Nasdaq Stock Market,
its Fair Market Value shall be the closing sales price for such stock (or the closing bid, if no sales were reported) as quoted on such exchange or system on the day of determination, as reported in The Wall Street Journal or such other
source as the Administrator deems reliable; 
  
 (ii)    If the Common Stock is
regularly quoted by a recognized securities dealer but selling prices are not reported, the Fair Market Value of a Share of Common Stock shall be the mean between the high bid and low asked prices for the Common Stock on the day of determination, as
reported in The Wall Street Journal or such other source as the Administrator deems reliable; 
  
 (iii)    In the absence of an established market for the Common Stock, the Fair Market Value shall be determined in good faith by the Administrator; or 
  
 (iv)    For purposes of Option grants made on the effective date of the Company’s initial public offering of Common Stock, the Fair
Market Value shall be the initial price to the public as set forth in the final prospectus included with the registration on Form S-1 filed with the Securities and Exchange Commission for such offering. 
  
 (q)    “Incentive Stock Option” means an Option intended to qualify as an incentive
stock option within the meaning of Section 422 of the Code and the regulations promulgated thereunder. 
  
 (r)    “Nonstatutory Stock Option” means an Option not intended to qualify as an Incentive Stock Option. 
  
 (s)    “Notice of Grant” means a written or electronic notice evidencing certain terms and conditions of an individual
Option or Stock Purchase Right grant. The Notice of Grant is part of the Option Agreement. 
  
 (t)    “Officer” means a person who is an officer of the Company within the meaning of Section 16 of the Exchange Act and the rules and regulations promulgated thereunder. 
  
 (u)    “Option” means a stock option granted pursuant to the Plan. 

 
 (v)    “Option Agreement” means an agreement between the Company and an
Optionee evidencing the terms and conditions of an individual Option grant. The Option Agreement is subject to the terms and conditions of the Plan. 

 
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 (w)    “Option Exchange
Program” means a program whereby outstanding Options are surrendered in exchange for Options with a lower exercise price. 
  
 (x)    “Optioned Stock” means the Common Stock subject to an Option or Stock Purchase Right. 
  
 (y)    “Optionee” means the holder of an outstanding Option or Stock Purchase Right granted under the Plan.

  
 (z)    “Parent” means a “parent corporation,”
whether now or hereafter existing, as defined in Section 424(e) of the Code. 
  
 (aa)    “Plan” means this 1999 Stock Plan. 
  
 (bb)    “Restricted Stock” means shares of Common Stock acquired pursuant to a grant of Stock Purchase Rights under Section 11 of the Plan. 
  

(cc)    “Restricted Stock Purchase Agreement” means a written agreement between the Company and the Optionee
evidencing the terms and restrictions applying to stock purchased under a Stock Purchase Right. The Restricted Stock Purchase Agreement is subject to the terms and conditions of the Plan and the Notice of Grant. 
  
 (dd)    “Rule 16b-3” means Rule 16b-3 of the Exchange Act or any successor to Rule
16b-3, as in effect when discretion is being exercised with respect to the Plan. 
  
 (ee)    “Section 16(b) “ means Section 16(b) of the Exchange Act. 
  
 (ff)    “Service Provider” means an Employee, Director or Consultant. In addition, an individual who receives an award under this Plan while an Employee, Director or Consultant, and who
ceases to be an Employee, Director or Consultant, but who remains an employee, director or consultant to 3Com shall be deemed Service Provider for purposes of this Plan. 
  
 (gg)    “Share” means a share of the Common Stock, as adjusted in accordance with Section 13 of the Plan. 

 
 (hh)    “Stock Purchase Right” means the right to purchase Common Stock
pursuant to Section 11 of the Plan, as evidenced by a Notice of Grant. 
  
 (ii)    “Subsidiary” means a “subsidiary corporation”, whether now or hereafter existing, as defined in Section 424(f) of the Code. 
  

(jj)    “3Com” means 3Com Corporation, a Delaware corporation. 

 
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 3.    Stock Subject to the
Plan.    Subject to the provisions of Section 13 of the Plan, the maximum aggregate number of Shares that may be optioned and sold under the Plan is 4,948,000* Shares, plus an annual increase to be added the first day of the
Company’s fiscal year equal to the lesser of (i) 5% of the outstanding shares of Common Stock on such date, or (ii) an amount determined by the Board. The Shares may be authorized, but unissued, or reacquired Common Stock. 

 
 If an Option or Stock Purchase Right expires or becomes unexercisable without having been exercised in full, or is surrendered
pursuant to an Option Exchange Program, the unpurchased Shares which were subject thereto shall become available for future grant or sale under the Plan (unless the Plan has terminated); provided, however, that Shares that have actually been
issued under the Plan, whether upon exercise of an Option or Right, shall not be returned to the Plan and shall not become available for future distribution under the Plan, except that if Shares of Restricted Stock are repurchased by the Company at
their original purchase price, such Shares shall become available for future grant under the Plan. 
  
 4.    Administration of the Plan. 
  
 (a)    Procedure. 
  
 (i)    Multiple Administrative Bodies.    Different Committees with respect to different groups of Service Providers may administer the Plan. 
  
 (ii)    Section 162(m).    To the extent that the Administrator determines
it to be desirable to qualify Options granted hereunder as “performance-based compensation” within the meaning of Section 162(m) of the Code, the Plan shall be administered by a Committee of two or more “outside directors” within
the meaning of Section 162(m) of the Code. 
  
 (iii)    Rule
16b-3.    To the extent desirable to qualify transactions hereunder as exempt under Rule 16b-3, the transactions contemplated hereunder shall be structured to satisfy the requirements for exemption under Rule 16b-3.

  
 (iv)    Other Administration.    Other than as
provided above, the Plan shall be administered by (A) the Board or (B) a Committee, which committee shall be constituted to satisfy Applicable Laws. 
  
 (b)    Powers of the Administrator.    Subject to the provisions of the Plan, and in the case of a Committee,
subject to the specific duties delegated by the Board to such Committee, the Administrator shall have the authority, in its discretion: 
  
 (i)    to determine the Fair Market Value; 
 
* This number includes the 20 million Shares initially reserved for issuance under the Plan, plus the Shares that have been added annually pursuant to this Section 3 since the first day of the Company’s 2001 fiscal
year through October 14, 2002, as adjusted for the 1-for-20 reverse stock split effected on October 15, 2002. 

 
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 (ii)    to select the Employees, Directors
and Consultants to whom Options and Stock Purchase Rights may be granted hereunder; 
  
 (iii)    to determine the number of shares of Common Stock to be covered by each Option and Stock Purchase Right granted hereunder; 
  
 (iv)    to approve forms of agreement for use under the Plan; 
  
 (v)    to determine the terms and conditions, not inconsistent with the terms of the Plan, of any Option or Stock Purchase Right granted
hereunder. Such terms and conditions include, but are not limited to, the exercise price, the time or times when Options or Stock Purchase Rights may be exercised (which may be based on performance criteria), any vesting acceleration or waiver of
forfeiture restrictions, and any restriction or limitation regarding any Option or Stock Purchase Right or the shares of Common Stock relating thereto, based in each case on such factors as the Administrator, in its sole discretion, shall determine;

  
 (vi)    to reduce the exercise price of any Option or Stock Purchase Right to
the then current Fair Market Value if the Fair Market Value of the Common Stock covered by such Option or Stock Purchase Right shall have declined since the date the Option or Stock Purchase Right was granted; 
  
 (vii)    to institute an Option Exchange Program; 
  
 (viii)    to construe and interpret the terms of the Plan and awards granted pursuant to the Plan;

  
 (ix)    to prescribe, amend and rescind rules and regulations relating to the
Plan, including rules and regulations relating to sub-plans established for the purpose of qualifying for preferred treatment under foreign laws; 
  
 (x)    to modify or amend each Option or Stock Purchase Right (subject to Section 15(c) of the Plan), including the discretionary authority to extend the post-termination
exercisability period of Options longer than is otherwise provided for in the Plan; 
  
 (xi)    to allow Optionees to satisfy withholding tax obligations by electing to have the Company withhold from the Shares to be issued upon exercise of an Option or Stock Purchase Right that number of Shares
having a Fair Market Value equal to (or less than) the minimum amount required to be withheld. The Fair Market Value of the Shares to be withheld shall be determined on the date that the amount of tax to be withheld is to be determined. All
elections by an Optionee to have Shares withheld for this purpose shall be made in such form and under such conditions as the Administrator may deem necessary or advisable; 
  
 (xii)    to authorize any person to execute on behalf of the Company any instrument required to effect the grant of an Option or Stock
Purchase Right previously granted by the Administrator; 
  
 (xiii)    to make all
other determinations deemed necessary or advisable for administering the Plan. 

 
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 (c)    Effect of Administrator’s
Decision.    The Administrator’s decisions, determinations and interpretations shall be final and binding on all Optionees and any other holders of Options or Stock Purchase Rights. 
  
 5.    Eligibility.    Nonstatutory Stock Options and Stock Purchase Rights may be granted
to Employees, Directors or Consultants. 
  
 6.    Limitations. 
  
 (a)    Neither the Plan nor any Option or Stock Purchase Right shall confer upon an Optionee any right
with respect to continuing the Optionee’s relationship as a Service Provider, nor shall they interfere in any way with the Optionee’s right or the Company’s or 3Com’s right, as applicable, to terminate such relationship at any
time, with or without cause. 
  
 (b)    The following limitations shall apply to
grants of Options: 
  
 (i)    No Service Provider shall be granted, in any fiscal
year of the Company, Options to purchase more than 150,000 Shares. 
  
 (ii)    In
connection with his or her initial service, a Service Provider may be granted Options to purchase up to an additional 300,000 Shares, which shall not count against the limit set forth in subsection (i) above. 
  
 (iii)    The foregoing limitations shall be adjusted proportionately in connection with any change in
the Company’s capitalization as described in Section 13. 
  
 (iv)    If an
Option is cancelled in the same fiscal year of the Company in which it was granted (other than in connection with a transaction described in Section 13), the cancelled Option will be counted against the limits set forth in subsections (i) and (ii)
above. For this purpose, if the exercise price of an Option is reduced, the transaction will be treated as a cancellation of the Option and the grant of a new Option. 
  
 7.    Term of Plan.    Subject to Section 19 of the Plan, the Plan shall become effective upon its adoption by the Board. It
shall continue in effect for a term of ten (10) years unless terminated earlier under Section 15 of the Plan. 
  
 8.    Term of Option.    The term of each Option shall be stated in the Option Agreement. 
  
 9.    Option Exercise Price and Consideration. 
  
 (a)    Exercise Price.    The per share exercise price for the Shares to be issued pursuant to the exercise of an Option shall be determined by the Administrator; provided,
however, that in the case of a Nonstatutory Stock Option intended to qualify as “performance-based compensation” within the meaning of Section 162(m) of the Code, the per Share exercise price shall be no less than 100% of the Fair Market
Value per Share on the date of grant. 
  
 (b)    Waiting Period and Exercise
Dates.    At the time an Option is granted, the Administrator shall fix the period within which the Option may be exercised and shall determine any conditions that must be satisfied before the Option may be exercised.

 
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 (c)    Form of
Consideration.    The Administrator shall determine the acceptable form of consideration for exercising an Option, including the method of payment. Such consideration may consist entirely of: 
  
 (i)    cash; 
  
 (ii)    check; 
  
 (iii)    promissory note; 
  
 (iv)    other Shares which (A) in the case of Shares acquired upon exercise of an option, have been owned by the Optionee for more than six months on the date of surrender, and (B) have a Fair Market Value on the
date of surrender equal to the aggregate exercise price of the Shares as to which said Option shall be exercised; 
  
 (v)    consideration received by the Company under a cashless exercise program implemented by the Company in connection with the Plan; 
  
 (vi)    a reduction in the amount of any Company liability to the Optionee, including any liability attributable to the Optionee’s
participation in any Company-sponsored deferred compensation program or arrangement; 
  
 (vii)    any combination of the foregoing methods of payment; or 
  
 (viii)    such other consideration and method of payment for the issuance of Shares to the extent permitted by Applicable Laws. 
  
 10.    Exercise of Option. 
  
 (a)    Procedure for Exercise; Rights as a Shareholder.    Any Option granted hereunder shall be exercisable according to the terms of the Plan and at
such times and under such conditions as determined by the Administrator and set forth in the Option Agreement. Unless the Administrator provides otherwise, vesting of Options granted hereunder shall be tolled during any unpaid leave of absence. An
Option may not be exercised for a fraction of a Share. 
  
 An Option shall be deemed exercised when
the Company receives: (i) written or electronic notice of exercise (in accordance with the Option Agreement) from the person entitled to exercise the Option, and (ii) full payment for the Shares with respect to which the Option is exercised. Full
payment may consist of any consideration and method of payment authorized by the Administrator and permitted by the Option Agreement and the Plan. Shares issued upon exercise of an Option shall be issued in the name of the Optionee or, if requested
by the Optionee, in the name of the Optionee and his or her spouse. Until the Shares are issued (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company), no right to vote or receive
dividends or any other rights as a shareholder shall exist with respect to the Optioned Stock, notwithstanding the exercise of the Option. The Company shall issue (or cause to be issued) such Shares promptly after the Option is exercised. No
adjustment will be made for a dividend or other right for which the record date is prior to the date the Shares are issued, except as provided in Section 13 of the Plan. 

 
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 Exercising an Option in any manner shall decrease the number of
Shares thereafter available, both for purposes of the Plan and for sale under the Option, by the number of Shares as to which the Option is exercised. 
  
 (b)    Termination of Relationship as a Service Provider.    If an Optionee ceases to be a Service Provider,
other than upon the Optionee’s death or Disability, the Optionee may exercise his or her Option within such period of time as is specified in the Option Agreement to the extent that the Option is vested on the date of termination (but in no
event later than the expiration of the term of such Option as set forth in the Option Agreement). In the absence of a specified time in the Option Agreement, the Option shall remain exercisable for three (3) months following the Optionee’s
termination. If, on the date of termination, the Optionee is not vested as to his or her entire Option, the Shares covered by the unvested portion of the Option shall revert to the Plan. If, after termination, the Optionee does not exercise his or
her Option within the time specified by the Administrator, the Option shall terminate, and the Shares covered by such Option shall revert to the Plan. 
  
 (c)    Disability of Optionee.    If an Optionee ceases to be a Service Provider as a result of the
Optionee’s Disability, the Optionee may exercise his or her Option within such period of time as is specified in the Option Agreement to the extent the Option is vested on the date of termination (but in no event later than the expiration of
the term of such Option as set forth in the Option Agreement). In the absence of a specified time in the Option Agreement, the Option shall remain exercisable for twelve (12) months following the Optionee’s termination. If, on the date of
termination, the Optionee is not vested as to his or her entire Option, the Shares covered by the unvested portion of the Option shall revert to the Plan. If, after termination, the Optionee does not exercise his or her Option within the time
specified herein, the Option shall terminate, and the Shares covered by such Option shall revert to the Plan. 
  
 (d)    Death of Optionee.    If an Optionee dies while a Service Provider, the Option may be exercised within such period of time as is specified in the Option Agreement (but in no event
later than the expiration of the term of such Option as set forth in the Notice of Grant) but only to the extent that the Option is vested on the date of death. In the absence of a specified time in the Option Agreement, the Option shall remain
exercisable for twelve (12) months following the Optionee’s death. The Option may be exercised by the Optionee’s designated beneficiary, provided such beneficiary has been designated prior to Optionee’s death in a form acceptable by
the Administrator. If no such beneficiary has been designated by the Optionee, then such Option may be exercised within the applicable time period by the personal representative of the Optionee’s estate or by the person or persons to whom the
Option is transferred pursuant to the Optionee’s will or in accordance with the laws of descent and distribution. If, at the time of death, the Optionee is not vested as to his or her entire Option, the Shares covered by the unvested portion of
the Option shall immediately revert to the Plan. If the Option is not so exercised within the time specified herein, the Option shall terminate, and the Shares covered by such Option shall revert to the Plan. 
  
 (e)    Buyout Provisions.    The Administrator may at any time offer to buy
out for a payment in cash or Shares an Option previously granted based on such terms and conditions as the Administrator shall establish and communicate to the Optionee at the time that such offer is made. 

 
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 11.    Stock Purchase Rights. 
  
 (a)    Rights to Purchase.    Stock Purchase Rights may be issued either
alone, in addition to, or in tandem with other awards granted under the Plan and/or cash awards made outside of the Plan; provided, however that in no event may Stock Purchase Rights be issued in any fiscal year of the Company for more than ten
percent (10%) of the total Shares available for issuance hereunder, in the aggregate, on the first day of such fiscal year. After the Administrator determines that it will offer Stock Purchase Rights under the Plan, it shall advise the offeree in
writing or electronically, by means of a Notice of Grant, of the terms, conditions and restrictions related to the offer, including the number of Shares that the offeree shall be entitled to purchase, the price to be paid, and the time within which
the offeree must accept such offer. The offer shall be accepted by execution of a Restricted Stock Purchase Agreement in the form determined by the Administrator. 
  
 (b)    Repurchase Option.    Unless the Administrator determines otherwise, the Restricted Stock Purchase
Agreement shall grant the Company a repurchase option exercisable upon the voluntary or involuntary termination of the purchaser’s service with the Company for any reason (including death or Disability). The purchase price for Shares
repurchased pursuant to the Restricted Stock Purchase Agreement shall be the original price paid by the purchaser and may be paid by cancellation of any indebtedness of the purchaser to the Company. The repurchase option shall lapse at a rate
determined by the Administrator. 
  
 (c)    Other
Provisions.    The Restricted Stock Purchase Agreement shall contain such other terms, provisions and conditions not inconsistent with the Plan as may be determined by the Administrator in its sole discretion. 

 
 (d)    Rights as a Shareholder.    Once the Stock Purchase Right
is exercised, the purchaser shall have the rights equivalent to those of a shareholder, and shall be a shareholder when his or her purchase is entered upon the records of the duly authorized transfer agent of the Company. No adjustment will be made
for a dividend or other right for which the record date is prior to the date the Stock Purchase Right is exercised, except as provided in Section 13 of the Plan. 
  
 12.    Transferability of Options and Stock Purchase Rights.    Unless determined otherwise by the Administrator, an Option or Stock Purchase Right may
not be sold, pledged, assigned, hypothecated, transferred, or disposed of in any manner other than by will or by the laws of descent or distribution and may be exercised, during the lifetime of the Optionee, only by the Optionee. If the
Administrator makes an Option or Stock Purchase Right transferable, such Option or Stock Purchase Right shall contain such additional terms and conditions as the Administrator deems appropriate. 
  

13.    Adjustments Upon Changes in Capitalization, Dissolution, Merger or Asset Sale. 
  

(a)    Changes in Capitalization.    Subject to any required action by the shareholders of the Company,
the number of shares of Common Stock which have been authorized for issuance under the Plan, including Shares as to which no Options or Stock Purchase Rights have yet been granted or which have been returned to the Plan upon cancellation or
expiration of an Option or Stock Purchase Right and the number of shares of Common Stock covered by each outstanding Option and Stock Purchase Right, as well as the price per share of Common Stock covered by each such outstanding Option or Stock
Purchase Right, shall be proportionately adjusted for any increase
 

 
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or decrease in the number of issued shares of Common Stock resulting from a stock split, reverse stock split, stock dividend, combination or reclassification of the Common Stock, or any other
increase or decrease in the number of issued shares of Common Stock effected without receipt of consideration by the Company; provided, however, that conversion of any convertible securities of the Company shall not be deemed to have been
“effected without receipt of consideration.” Such adjustment shall be made by the Board, whose determination in that respect shall be final, binding and conclusive. Except as expressly provided herein, no issuance by the Company of shares
of stock of any class, or securities convertible into shares of stock of any class, shall affect, and no adjustment by reason thereof shall be made with respect to, the number or price of shares of Common Stock subject to an Option or Stock Purchase
Right. 
  
 (b)    Dissolution or Liquidation.    In
the event of the proposed dissolution or liquidation of the Company, the Administrator shall notify each Optionee as soon as practicable prior to the effective date of such proposed transaction. The Administrator in its discretion may provide for an
Optionee to have the right to exercise his or her Option until ten (10) days prior to such transaction as to all of the Optioned Stock covered thereby, including Shares as to which the Option would not otherwise be exercisable. In addition, the
Administrator may provide that any Company repurchase option applicable to any Shares purchased upon exercise of an Option or Stock Purchase Right shall lapse as to all such Shares, provided the proposed dissolution or liquidation takes place at the
time and in the manner contemplated. To the extent it has not been previously exercised, an Option or Stock Purchase Right will terminate immediately prior to the consummation of such proposed action. 
  
 (c)    Merger or Asset Sale.    In the event of a merger of the Company
with or into another corporation, or the sale of substantially all of the assets of the Company, each outstanding Option and Stock Purchase Right shall be assumed or an equivalent option or right substituted by the successor corporation or a Parent
or Subsidiary of the successor corporation. In the event that the successor corporation refuses to assume or substitute for the Option or Stock Purchase Right, the Optionee shall fully vest in and have the right to exercise the Option or Stock
Purchase Right as to all of the Optioned Stock, including Shares as to which it would not otherwise be vested or exercisable. If an Option or Stock Purchase Right becomes fully vested and exercisable in lieu of assumption or substitution in the
event of a merger or sale of assets, the Administrator shall notify the Optionee in writing or electronically that the Option or Stock Purchase Right shall be fully vested and exercisable for a period of fifteen (15) days from the date of such
notice, and the Option or Stock Purchase Right shall terminate upon the expiration of such period. For the purposes of this paragraph, the Option or Stock Purchase Right shall be considered assumed if, following the merger or sale of assets, the
option or right confers the right to purchase or receive, for each Share of Optioned Stock subject to the Option or Stock Purchase Right immediately prior to the merger or sale of assets, the consideration (whether stock, cash, or other securities
or property) received in the merger or sale of assets by holders of Common Stock for each Share held on the effective date of the transaction (and if holders were offered a choice of consideration, the type of consideration chosen by the holders of
a majority of the outstanding Shares); provided, however, that if such consideration received in the merger or sale of assets is not solely common stock of the successor corporation or its Parent, the Administrator may, with the consent of the
successor corporation, provide for the consideration to be received upon the exercise of the Option or Stock Purchase Right, for each Share of Optioned Stock subject to the Option or Stock Purchase Right, to be solely common stock of the successor
corporation or its Parent equal in fair market value to the per share consideration received by holders of Common Stock in the merger or sale of assets. 

 
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 Notwithstanding the foregoing, if an Optionee’s status as a Service Provider
is terminated for reasons other than Cause within twelve (12) months following a Change of Control, then the vesting and exercisability of each of the Optionee’s outstanding Options and Stock Purchase Rights shall partially accelerate upon such
termination with respect to fifty percent (50%) of the then unvested Shares subject to or acquired under each such Option or Stock Purchase Right. 
  
 14.    Date of Grant.    The date of grant of an Option or Stock Purchase Right shall be, for all purposes, the date on which the Administrator makes the
determination granting such Option or Stock Purchase Right, or such other later date as is determined by the Administrator. Notice of the determination shall be provided to each Optionee within a reasonable time after the date of such grant.

  
 15.    Amendment and Termination of the Plan. 
  
 (a)    Amendment and Termination.    The Board may at any time amend,
alter, suspend or terminate the Plan. 
  
 (b)    Shareholder
Approval.    The Company shall obtain shareholder approval of any Plan amendment to the extent necessary and desirable to comply with Applicable Laws. 
  
 (c)    Effect of Amendment or Termination.    No amendment, alteration, suspension or termination of the Plan
shall impair the rights of any Optionee, unless mutually agreed otherwise between the Optionee and the Administrator, which agreement must be in writing and signed by the Optionee and the Company. Termination of the Plan shall not affect the
Administrator’s ability to exercise the powers granted to it hereunder with respect to Options granted under the Plan prior to the date of such termination. 
  
 16.    Conditions Upon Issuance of Shares. 
  
 (a)    Legal Compliance.    Shares shall not be issued pursuant to the exercise of an Option or Stock Purchase Right unless the exercise of such Option or Stock Purchase Right
and the issuance and delivery of such Shares shall comply with Applicable Laws and shall be further subject to the approval of counsel for the Company with respect to such compliance. 
  
 (b)    Investment Representations.    As a condition to the exercise of an Option or Stock Purchase Right,
the Company may require the person exercising such Option or Stock Purchase Right to represent and warrant at the time of any such exercise that the Shares are being purchased only for investment and without any present intention to sell or
distribute such Shares if, in the opinion of counsel for the Company, such a representation is required. 
  
 17.    Inability to Obtain Authority.    The inability of the Company to obtain authority from any regulatory body having jurisdiction, which authority is deemed by the Company’s
counsel to be necessary to the lawful issuance and sale of any Shares hereunder, shall relieve the Company of any liability in respect of the failure to issue or sell such Shares as to which such requisite authority shall not have been obtained.

 
 -12- 

  
 18.    Reservation of
Shares.    The Company, during the term of this Plan, will at all times reserve and keep available such number of Shares as shall be sufficient to satisfy the requirements of the Plan. 
  
 19.    Shareholder Approval.    The Plan shall be subject to approval by the shareholders
of the Company within twelve (12) months after the date the Plan is adopted. Such shareholder approval shall be obtained in the manner and to the degree required under Applicable Laws. 

 
 -13-1999 Employee Stock Purchase Plan

  
 Exhibit 10.3 
  
 PALM, INC. 
  
 1999 EMPLOYEE STOCK PURCHASE
PLAN 
  
 (As Amended and Restated Effective as of October 15, 2002) 
  
 The following constitute the provisions of the Palm, Inc. 1999 Employee Stock Purchase Plan, as amended and restated effective as of
October 15, 2002: 
  
 1.    Purpose.    The purpose of the Plan is to
provide Employees with an opportunity to purchase Common Stock through accumulated payroll deductions. It is the intention of the Company to have the Plan qualify as an “Employee Stock Purchase Plan” under Section 423 of the Code. The
provisions of the Plan, accordingly, shall be construed so as to extend and limit participation in a manner consistent with the requirements of that section of the Code. 
  
 2.    Definitions. 
  
 (a)    “Administrator” shall mean the Board or any committee thereof designated by the Board in accordance with Section 14. 
  
 (b)    “Board” shall mean the Board of Directors of the Company. 
  

(c)    “Code” shall mean the Internal Revenue Code of 1986, as amended. Any reference to a section of the Code
herein shall be a reference to any successor or amended section of the Code. 
  
 (d)    “Common Stock” shall mean the common stock of the Company. 
  
 (e)    “Company” shall mean Palm, Inc., a Delaware corporation. 
  
 (f)    “Compensation” shall mean an Employee’s base straight time gross earnings and commissions, but shall exclude payments for overtime, shift premium,
incentive compensation, incentive payments, bonuses and other compensation. 
  
 (g)    “Designated Subsidiary” shall mean any Subsidiary that has been designated by the Administrator from time to time in its sole discretion as eligible to participate in the Plan with respect
to its Employees. 
  
 (h)    “Employee” shall mean any
individual who is an employee of an Employer for tax purposes and is customarily employed for at least twenty (20) hours per week and more than five (5) months in any calendar year by the Employer. For purposes of the Plan, the employment
relationship shall be treated as continuing intact while the individual is on sick leave or other leave of absence approved by the Employer. Where the period of leave exceeds ninety (90) days and the individual’s right to reemployment is not
guaranteed either by statute or by contract, the employment relationship shall be deemed to have terminated on the 91st day of such leave. 

  
 (i)    “Employer” shall mean
any one or all of the Company and its Designated Subsidiaries. 
  
 (j)    “Enrollment Date” shall mean the first Trading Day of each Offering Period. 
  
 (k)    “Exercise Date” shall mean the last Trading Day of each Purchase Period. 
  
 (l)    “Fair Market Value” shall mean, as of any date, the value of Common Stock determined as follows: 

 
 (i)    If the Common Stock is listed on any established stock exchange or a national market
system, including without limitation the Nasdaq National Market or The Nasdaq SmallCap Market of The Nasdaq Stock Market, its Fair Market Value shall be the closing sales price for the Common Stock (or the closing bid, if no sales were reported) as
quoted on such exchange or system on the date of determination, as reported in The Wall Street Journal or such other source as the Administrator deems reliable; 
  
 (ii)    If the Common Stock is regularly quoted by a recognized securities dealer but selling prices are not reported, its Fair Market
Value shall be the mean of the closing bid and asked prices for the Common Stock on the date of determination, as reported in The Wall Street Journal or such other source as the Administrator deems reliable; 
  
 (iii)    In the absence of an established market for the Common Stock, the Fair Market Value thereof
shall be determined in good faith by the Administrator; or 
  
 (iv)    For
purposes of the Enrollment Date of the first Offering Period under the Plan, the Fair Market Value shall be the initial price to the public as set forth in the final prospectus included with the registration statement on Form S-1 filed with the
Securities and Exchange Commission for the initial public offering of the Company’s Common Stock (the “Registration Statement”). 
  
 (m)    “Offering Periods” shall mean the periods of approximately twenty-four (24) months during which an option granted pursuant to the Plan may be exercised,
commencing on the first Trading Day on or after April 1 and October 1 of each year and terminating on the last Trading Day in the periods ending twenty-four (24) months later; provided, however, that the first Offering Period under the Plan shall
commence with the first Trading Day on or after the date on which the Securities and Exchange Commission declares the Company’s Registration Statement effective and ending on the last Trading Day on or before March 31, 2002. Notwithstanding the
foregoing, if a new Offering Period is established in accordance with Section 25, the new Offering Period shall commence on the last Exercise Date of the immediately preceding Offering Period following the exercise of options on such Exercise
Date. The duration and timing of Offering Periods may be changed by the Administrator pursuant to Section 4. 
  
 (n)    “Parent” shall mean a “parent corporation,” whether now or hereafter existing, as defined in Section 424(e) of the Code. 
  
 (o)    “Plan” shall mean this 1999 Employee Stock Purchase Plan, as amended from time to time. 

 
 2 

  
 (p)    “Purchase Period”
shall mean the approximately six (6) month period commencing after one Exercise Date and ending with the next Exercise Date, except that the first Purchase Period of any Offering Period shall commence on the Enrollment Date and end with the next
Exercise Date. 
  
 (q)    “Purchase Price” shall mean
eighty-five percent (85%) of the Fair Market Value of a share of Common Stock on the Enrollment Date or on the Exercise Date, whichever is lower; provided however, that the Purchase Price may be adjusted by the Administrator pursuant to Section 20.

  
 (r)    “Reserves” shall mean the number of shares of Common
Stock covered by each option under the Plan which have not yet been exercised and the number of shares of Common Stock which have been authorized for issuance under the Plan but not yet placed under option. 
  
 (s)    “Subsidiary” shall mean a corporation, domestic or foreign, of which not less
than 50% of the voting shares are held by the Company or a Subsidiary, whether or not such corporation now exists or is hereafter organized or acquired by the Company or a Subsidiary. 
  
 (t)    “Trading Day” shall mean a day on which U.S. national stock exchanges and the Nasdaq System are open for
trading. 
  
 3.    Eligibility. 
  
 (a)    Any person who is an Employee as of the Enrollment Date of a given Offering Period shall be eligible to participate in such
Offering Period under the Plan, subject to the requirements of Section 5. 
  
 (b)    Any provisions of the Plan to the contrary notwithstanding, no Employee shall be granted an option under the Plan (i) to the extent that, immediately after the grant, such Employee (or any other person
whose stock would be attributed to such Employee pursuant to Section 424(d) of the Code) would own capital stock of the Company or any Parent or Subsidiary of the Company and/or hold outstanding options to purchase such stock possessing five percent
(5%) or more of the total combined voting power or value of all classes of the capital stock of the Company or any Parent or Subsidiary of the Company, or (ii) to the extent that his or her rights to purchase stock under all employee stock purchase
plans (as defined in Section 423 of the Code) of the Company or any Parent or Subsidiary of the Company accrues at a rate which exceeds twenty-five thousand dollars ($25,000) worth of stock (determined at the Fair Market Value of the stock at the
time such option is granted) for each calendar year in which such option is outstanding at any time. 
  
 4.    Offering Periods.    The Plan shall be implemented by consecutive, overlapping Offering Periods, with a new Offering Period commencing on the first Trading Day on or after April 1
and October 1 of each year, or on such other date as the Administrator shall determine, and continuing thereafter until terminated in accordance with Section 20; provided, however, that the first Offering Period under the Plan shall commence with
the first Trading Day on or after the date on which the Securities and Exchange Commission declares the Company’s Registration Statement effective and ending on the last Trading Day on or before March 31, 2002. The Administrator shall have the
power to change the duration of Offering Periods (including the commencement dates thereof) with respect to future offerings without shareholder approval if such change is announced at least five (5) days prior to the scheduled beginning of the
first Offering Period to be affected thereafter. 

 
 3 

  
 5.    Participation.    An
Employee who is eligible to participate in the Plan pursuant to Section 3 may become a participant in the Plan by (i) submitting to the Company’s Stock Administration Department (or its designee), on or before a date prescribed by the
Administrator prior to an applicable Enrollment Date, a properly completed subscription agreement authorizing payroll deductions in the form provided by the Administrator for such purpose, or (ii) following an electronic or other enrollment
procedure prescribed by the Administrator. 
  
 6.    Payroll Deductions. 

 
 (a)    At the time a participant enrolls in the Plan pursuant to Section 5, he or she shall
elect to have payroll deductions made on each payday during the Offering Period in an amount not exceeding ten percent (10%) of the Compensation which he or she receives on each such payday. However, if the percentage of a participant’s
Compensation deducted for purposes of this Plan and all other plans of the Company or any Parent or Subsidiary of the Company, that are intended to qualify as “employee stock purchase plans” under Section 423 of the Code exceeds ten
percent (10%), then the percentage of Compensation deducted for purposes of this Plan shall be reduced such that the participant’s percentage of Compensation deducted under all such plans that qualify under Section 423 of the Code does not
exceed ten percent (10%) of the Compensation which the participant receives on each pay day during the Offering Period. 
  
 (b)    Payroll deductions authorized by a participant shall commence on the first payday following the Enrollment Date and shall end on the last payday in the Offering Period to which such authorization
is applicable, unless sooner terminated by the participant as provided in Section 10. 
  
 (c)    All payroll deductions made for a participant shall be credited to his or her account under the Plan and shall be withheld in whole percentages only. A participant may not make any additional payments into
such account. 
  
 (d)    A participant may discontinue his or her participation
in the Plan as provided in Section 10, or may change the rate of his or her payroll deductions during the Offering Period by (i) properly completing and submitting to the Company’s Stock Administration Department (or its designee), on or before
a date prescribed by the Administrator prior to an applicable Exercise Date, a new subscription agreement authorizing the change in payroll deduction rate in the form provided by the Administrator for such purpose, or (ii) following an electronic or
other procedure prescribed by the Administrator. If a participant has not followed such procedures to change the rate of payroll deductions, the rate of his or her payroll deductions shall continue at the originally elected rate throughout the
Offering Period and future Offering Periods (unless terminated as provided in Section 10). The Administrator may, in its sole discretion, limit the nature and/or number of payroll deduction rate changes that may be made by participants during any
Offering Period. Any change in payroll deduction rate made pursuant to this Section 6(d) shall be effective as of the beginning of the calendar month immediately following the date on which the change is made by the participant. 

 
 4 

  
 (e)    Notwithstanding the foregoing, to the
extent necessary to comply with Section 423(b)(8) of the Code and Section 3(b), a participant’s payroll deductions may be decreased to zero percent (0%) at any time during a Purchase Period. Payroll deductions shall recommence at the rate
originally elected by the participant effective as of the beginning of the first Purchase Period which is scheduled to end in the following calendar year, unless terminated by the participant as provided in Section 10. 
  
 (f)    At the time the option is exercised, in whole or in part, or at the time some or all of the
Common Stock issued under the Plan is disposed of, the participant must make adequate provision for the Company’s federal, state, or other tax withholding obligations, if any, which arise upon the exercise of the option or the disposition of
the Common Stock. At any time, the Company may, but shall not be obligated to, withhold from the participant’s compensation the amount necessary for the Company to meet applicable withholding obligations, including any withholding required to
make available to the Company any tax deductions or benefits attributable to sale or early disposition of Common Stock by the participant. 
  
 7.    Grant of Option.    On the Enrollment Date of each Offering Period, each Employee participating in such Offering Period shall be granted an option to purchase on each
Exercise Date during such Offering Period (at the applicable Purchase Price) up to a number of shares of Common Stock determined by dividing such participant’s payroll deductions accumulated prior to such Exercise Date and retained in the
participant’s account as of the Exercise Date by the applicable Purchase Price; provided that in no event shall a participant be permitted to purchase during each Purchase Period more than 500 shares of Common Stock (subject to any adjustment
pursuant to Section 19), and provided further that such purchase shall be subject to the limitations set forth in Sections 3(b) and 13. The Administrator may, for future Offering Periods, increase or decrease, in its absolute discretion, the maximum
number of shares of Common Stock that an Employee may purchase during each Purchase Period of such Offering Period. Exercise of the option shall occur as provided in Section 8, unless the participant has withdrawn pursuant to Section 10. The option
shall expire on the last day of the Offering Period. 
  
 8.    Exercise of Option.

  
 (a)    Unless a participant withdraws from the Plan as provided in Section
10, his or her option for the purchase of shares of Common Stock shall be exercised automatically on the Exercise Date, and the maximum number of full shares subject to the option shall be purchased for such participant at the applicable Purchase
Price with the accumulated payroll deductions in his or her account. No fractional shares of Common Stock shall be purchased; any payroll deductions accumulated in a participant’s account which are not sufficient to purchase a full share shall
be retained in the participant’s account for the subsequent Purchase Period or Offering Period, subject to earlier withdrawal by the participant as provided in Section 10. Any other monies left over in a participant’s account after the
Exercise Date shall be returned to the participant. During a participant’s lifetime, a participant’s option to purchase shares hereunder is exercisable only by him or her. 

 
 5 

  
 (b)    If the Administrator determines that,
on a given Exercise Date, the number of shares of Common Stock with respect to which options are to be exercised may exceed (i) the number of shares of Common Stock that were available for sale under the Plan on the Enrollment Date of the applicable
Offering Period, or (ii) the number of shares of Common Stock available for sale under the Plan on such Exercise Date, the Administrator may in its sole discretion (x) provide that the Company shall make a pro rata allocation of the shares of Common
Stock available for purchase on such Enrollment Date or Exercise Date, as applicable, in as uniform a manner as shall be practicable and as it shall determine in its sole discretion to be equitable among all participants exercising options to
purchase Common Stock on such Exercise Date, and continue all Offering Periods then in effect, or (y) provide that the Company shall make a pro rata allocation of the shares of Common Stock available for purchase on such Enrollment Date or Exercise
Date, as applicable, in as uniform a manner as shall be practicable and as it shall determine in its sole discretion to be equitable among all participants exercising options to purchase Common Stock on such Exercise Date, and terminate any or all
Offering Periods then in effect pursuant to Section 20. The Company may make pro rata allocation of the shares of Common Stock available on the Enrollment Date of any applicable Offering Period pursuant to the preceding sentence, notwithstanding any
authorization of additional shares of Common Stock for issuance under the Plan by the Company’s shareholders subsequent to such Enrollment Date. 
  
 9.    Delivery.    As promptly as practicable after each Exercise Date on which a purchase of shares of Common Stock occurs, the Company shall arrange the
delivery to each participant, as appropriate, of a record of the shares purchased. The Administrator may permit or require that such shares be deposited directly with a broker designated by the Administrator or to a designated agent of the Company,
and the Administrator may utilize electronic or other automated methods of share transfer. No participant shall have any voting, dividend, or other shareholder rights with respect to shares of Common Stock subject to any option granted under the
Plan until such shares have been purchased and delivered to the participant as provided in this Section 9. 
  
 10.    Withdrawal. 
  
 (a)    Under
procedures established by the Administrator, a participant may withdraw all but not less than all the payroll deductions credited to his or her account and not yet used to exercise his or her option under the Plan by submitting to the Company’s
Stock Administration Department (or its designee) a notice of withdrawal in the form and manner prescribed by the Administrator for such purpose. Unless otherwise determined by the Administrator on a uniform and non-discriminatory basis, any
election to withdraw from an Offering Period will be effective only with respect to Exercise Dates that are at least five (5) business days after the properly completed election is received by the Company’s Stock Administration Department. All
of the participant’s payroll deductions credited to his or her account shall be paid to such participant as promptly as practicable after the effective date of his or her withdrawal and such participant’s option for the Offering Period
shall be automatically terminated, and no further payroll deductions for the purchase of shares shall be made for such Offering Period. Once a participant has withdrawn from an Offering Period, the participant may not re-enroll in the same Offering
Period. Moreover, payroll deductions shall not resume at the beginning of the succeeding Offering Period unless the participant re-enrolls in the Plan in accordance with the provisions of Section 5. 
  
 (b)    A participant’s withdrawal from an Offering Period shall not have any effect upon his or
her eligibility to participate in any similar plan which may hereafter be adopted by the Company or in succeeding Offering Periods which commence after the termination of the Offering Period from which the participant withdraws. 

 
 6 

  
 11.    Termination of
Employment.    Upon a participant’s ceasing to be an Employee for any reason, he or she shall be deemed to have elected to withdraw from the Plan and the payroll deductions credited to such participant’s account
during the Offering Period but not yet used to exercise the option shall be returned to such participant or, in the case of his or her death, to the person or persons entitled thereto under Section 15, and such participant’s option shall be
automatically terminated. The preceding sentence notwithstanding, a participant who receives payment in lieu of notice of termination of employment shall be treated as continuing to be an Employee for the participant’s customary number of hours
per week of employment during the period in which the participant is subject to such payment in lieu of notice; provided, however, that in no event shall the participant’s option be exercisable more than three (3) months after the date of his
or her termination of employment. 
  
 12.    Interest.    No interest
shall accrue on the payroll deductions of a participant in the Plan. 
  
 13.    Stock.

  
 (a)    Subject to adjustment upon changes in capitalization of the Company as
provided in Section 19, the maximum number of shares of Common Stock which shall be made available for sale under the Plan shall be 1,750,000* shares plus an annual increase to be added on the first day of the Company’s fiscal year equal to the
lesser of (i) 500,000 shares, (ii) 2% of the outstanding shares of Common Stock on such date, or (iii) a lesser amount determined by the Board. 
  
 (b)    Shares of Common Stock to be delivered to a participant under the Plan shall be registered in the name of the participant or in the name of the participant and his or her
spouse. 
  
 14.    Administration.    The Plan shall be administered
by the Board or a committee of members of the Board who shall be appointed from time to time by, and shall serve at the pleasure of, the Board. The Administrator shall have full and exclusive discretionary authority to construe, interpret and apply
the terms of the Plan, to determine eligibility and to adjudicate all disputed claims filed under the Plan. The Administrator, in its sole discretion and on such terms and conditions as it may provide, may delegate to one or more individuals all or
any part of its authority and powers under the Plan. Every finding, decision and determination made by the Administrator shall, to the full extent permitted by law, be final and binding upon all parties. 
  
 15.    Designation of Beneficiary. 
  
 (a)    A participant may designate a beneficiary who is to receive any shares of Common Stock and cash, if any, from the
participant’s account under the Plan in the event of such participant’s death subsequent to an Exercise Date on which the option is exercised but prior to delivery to such participant of such shares and cash. In addition, a participant may
designate a beneficiary who is to receive any cash from the participant’s account under the Plan in the event of such participant’s death prior to exercise of the option. If a participant is married and the designated beneficiary is not
the spouse, spousal consent shall be required for such designation to be effective. 
 
 

	*
	 
	This number includes the 5,000,000 Shares initially reserved for issuance under the Plan, plus the Shares that have been added annually pursuant to this Section
13(a) since the first day of the Company’s 2001 fiscal year through October 14, 2002, as adjusted for the 1-for-20 reverse stock split effected on October 15, 2002. 
 

 
 7 

  
 (b)    Such designation of beneficiary may be
changed by the participant at any time. In the event of the death of a participant and in the absence of a beneficiary validly designated under the Plan who is living at the time of such participant’s death, the Company shall deliver such
shares and/or cash to the executor or administrator of the estate of the participant, or if no such executor or administrator has been appointed (to the knowledge of the Company), the Company, in its discretion, may deliver such shares and/or cash
to the spouse or to any one or more dependents or relatives of the participant, or if no spouse, dependent or relative is known to the Company, then to such other person as the Company may designate. 
  
 (c)    All beneficiary designations under this Section 15 shall be made in such form and manner as the
Administrator may prescribe from time to time. 
  
 16.    Transferability.    Neither payroll deductions credited to a participant’s account nor any rights with regard to the exercise of an option or to receive shares under the Plan
may be assigned, transferred, pledged or otherwise disposed of in any way (other than by will, the laws of descent and distribution or as provided in Section 15) by the participant. Any such attempt at assignment, transfer, pledge or other
disposition shall be without effect, except that the Company may treat such act as an election to withdraw from an Offering Period in accordance with Section 10. 
  
 17.    Use of Funds.    All payroll deductions received or held by the Company under the Plan may be used by the Company for any corporate purpose, and
the Company shall not be obligated to segregate such payroll deductions. Until shares of Common Stock are issued under the Plan, a participant shall only have the rights of an unsecured creditor with respect to such shares. 
  
 18.    Reports.    Individual accounts shall be maintained for each participant in the
Plan. Statements of account shall be given to participating Employees at least annually, which statements shall set forth the amounts of payroll deductions, the Purchase Price, the number of shares of Common Stock purchased and the remaining cash
balance, if any. 
  
 19.    Adjustments Upon Changes in Capitalization, Dissolution,
Liquidation, Merger or Asset Sale. 
  
 (a)    Changes in
Capitalization.    Subject to any required action by the shareholders of the Company, the Reserves, the number of shares of Common Stock that may be added annually to the shares reserved under the Plan (pursuant to Section
13(a)(i)), the maximum number of shares of Common Stock each participant may purchase each Purchase Period (pursuant to Section 7), as well as the Purchase Price per share and the number of shares of Common Stock covered by each option under the
Plan which has not yet been exercised, shall be proportionately adjusted for any spin-off or increase or decrease in the number of issued shares of Common Stock resulting from a stock split, reverse stock split, stock dividend, combination or
reclassification of the Common Stock, or any other increase or decrease in the number of shares of Common Stock effected without receipt of consideration by the Company; provided, however, that conversion of any convertible securities of the Company
shall not be deemed to have been “effected without receipt of consideration.” Such adjustment shall be made by the Board, whose determination in that respect shall be final, binding and conclusive. Except as expressly provided herein, no
issuance by the Company of shares of stock of any class, or securities convertible into shares of stock of any class, shall affect, and no adjustment by reason thereof shall be made with respect to, the number or Purchase Price of shares of Common
Stock subject to an option. 

 
 8 

  
 (b)    Dissolution or
Liquidation.    In the event of the proposed dissolution or liquidation of the Company, the Offering Period then in progress shall be shortened by setting a new Exercise Date (the “New Exercise Date”), and shall
terminate immediately prior to the consummation of such proposed dissolution or liquidation, unless provided otherwise by the Board. The New Exercise Date shall be before the date of the Company’s proposed dissolution or liquidation. The Board
shall notify each participant in writing, at least ten (10) business days prior to the New Exercise Date, that the Exercise Date for the participant’s option has been changed to the New Exercise Date and that the participant’s option shall
be exercised automatically on the New Exercise Date, unless prior to such date the participant has withdrawn from the Offering Period as provided in Section 10. 
  
 (c)    Merger or Asset Sale.    In the event of a proposed sale of all or substantially all of the assets of
the Company, or the merger of the Company with or into another corporation, each outstanding option shall be assumed or an equivalent option substituted by the successor corporation or a Parent or Subsidiary of the successor corporation. In the
event that the successor corporation refuses to assume or substitute for the option, any Purchase Periods then in progress shall be shortened by setting a new Exercise Date (the “New Exercise Date”) and any Offering Periods then in
progress shall end on the New Exercise Date. The New Exercise Date shall be before the date of the Company’s proposed sale or merger. The Board shall notify each participant in writing, at least ten (10) business days prior to the New Exercise
Date, that the Exercise Date for the participant’s option has been changed to the New Exercise Date and that the participant’s option shall be exercised automatically on the New Exercise Date, unless prior to such date the participant has
withdrawn from the Offering Period as provided in Section 10. 
  
 20.    Amendment or
Termination. 
  
 (a)    The Board may at any time and for any reason
terminate or amend the Plan. Except as provided in Section 19, no such termination can affect options previously granted under the Plan, provided that an Offering Period may be terminated by the Board on any Exercise Date if the Board determines
that the termination of the Offering Period or the Plan is in the best interests of the Company and its shareholders. Except as provided in Section 19 and this Section 20, no amendment may make any change in any option theretofore granted which
adversely affects the rights of any participant. To the extent necessary to comply with Section 423 of the Code (or any successor rule or provision or any other applicable law, regulation or stock exchange rule), the Company shall obtain shareholder
approval in such a manner and to such a degree as required. 
  
 (b)    Without
shareholder consent and without regard to whether any participant rights may be considered to have been “adversely affected,” the Administrator shall be entitled to change the Offering Periods, limit the frequency and/or number of changes
in the amount withheld during an Offering Period, establish the exchange ratio applicable to amounts withheld in a currency other than U.S. dollars, permit payroll withholding in excess of the amount designated by a participant in order to adjust
for delays or mistakes in the Company’s processing of properly completed withholding elections, establish reasonable waiting and adjustment periods and/or accounting and crediting procedures to ensure that amounts applied toward the purchase of
Common Stock for each participant properly correspond with amounts withheld from the participant’s Compensation, and establish such other limitations or procedures as the Administrator determines in its sole discretion advisable which are
consistent with the Plan. 

 
 9 

  
 (c)    In the event the Board determines that
the ongoing operation of the Plan may result in unfavorable financial accounting consequences, the Board may, in its discretion and, to the extent necessary or desirable, modify or amend the Plan to reduce or eliminate such accounting consequence
including, but not limited to: 
  
 (i)    altering the Purchase Price for any
Offering Period including an Offering Period underway at the time of the change in Purchase Price; 
  
 (ii)    shortening any Offering Period so that Offering Period ends on a new Exercise Date, including an Offering Period underway at the time of the Board action; and 
  
 (iii)    allocating shares. 
  
 Such modifications or amendments shall not require stockholder approval or the consent of any Plan participants. 
  
 21.    Notices.    All notices or other communications by a participant to the Company under or in connection with the Plan shall be deemed to have been
duly given when received in the form specified by the Company at the location, or by the person, designated by the Company for the receipt thereof. 
  
 22.    Conditions Upon Issuance of Shares.    Shares of Common Stock shall not be issued with respect to an option under the Plan unless the exercise of
such option and the issuance and delivery of such shares pursuant thereto shall comply with all applicable provisions of law, domestic or foreign, including, without limitation, the Securities Act of 1933, as amended, the Securities Exchange Act of
1934, as amended, the rules and regulations promulgated thereunder, and the requirements of any stock exchange upon which the shares may then be listed, and shall be further subject to the approval of counsel for the Company with respect to such
compliance. 
  
 As a condition to the exercise of an option, the Company may require the person exercising such
option to represent and warrant at the time of any such exercise that the shares are being purchased only for investment and without any present intention to sell or distribute such shares if, in the opinion of counsel for the Company, such a
representation is required by any of the aforementioned applicable provisions of law. 
  
 23.    Term of Plan.    The Plan shall become effective upon the earlier to occur of its adoption by the Board or its approval by the shareholders of the Company. It shall continue in
effect for a term of ten (10) years unless sooner terminated under Section 20. 

 
 10 

  
 24.    No Enlargement of Employee
Rights.    Nothing contained in the Plan shall be deemed to give any Employee the right to be retained in the employ of any Employer or to interfere with the right of the Employer to discharge any Employee at any time.

  
 25.    Automatic Transfer to Low Price Offering Period.    To the
extent permitted by any applicable laws, regulations, or stock exchange rules if the Fair Market Value of the Common Stock on any Exercise Date in an Offering Period is lower than the Fair Market Value of the Common Stock on the Enrollment Date of
such Offering Period, then all participants in such Offering Period shall be automatically withdrawn from such Offering Period immediately after the exercise of their option on such Exercise Date and automatically re-enrolled in the immediately
following Offering Period. The new Offering Period shall commence on the last Exercise Date of the immediately preceding Offering Period after all options have been exercised on such Exercise Date. 

 
 11

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