Document:

Employee Stock Purchase Plan

 
EXHIBIT 4.01

 
NETOPIA, INC. 
EMPLOYEE STOCK PURCHASE PLAN 
(Amended and Restated as of December 6, 2002) 
 
I. PURPOSE 
 
This Netopia, Inc. Employee Stock Purchase Plan (the “Plan”) is intended to provide eligible employees of the Corporation and one or more of its Corporate Affiliates with the opportunity to acquire a proprietary
interest in the Corporation through participation in a plan designed to qualify as an employee stock purchase plan under Section 423 of the Code. 
 
II. DEFINITIONS 
 
For purposes of administration of the Plan, the following terms shall have the meanings indicated: 
 
Board means the Board of Directors of the
Corporation. 
 
Cash Compensation
means (i) the regular base salary paid to a Participant by one or more Participating Companies during such individual’s period of participation in the Plan; plus (ii) all of the following amounts to the extent paid in cash: overtime payments,
bonuses, commissions, profit-sharing distributions and other incentive-type payments. However, Cash Compensation shall not include any contributions (including Code Section 401(k) or Code Section 125 contributions) made on the Participant’s
behalf by the Corporation or any Corporate Affiliate to any deferred compensation plan or welfare benefit program now or hereafter established. 
 
Code means the Internal Revenue Code of 1986, as amended. 
 
Common Stock means shares of the Corporation’s common stock. 
 
Corporate Affiliate means any parent or
subsidiary corporation of the Corporation (as determined in accordance with Code Section 424), including any parent or subsidiary corporation which becomes such after the Effective Time. 
 
Corporation means Netopia, Inc., a Delaware corporation, and any corporate successor to all or
substantially all of the assets or voting stock of Netopia, Inc. which shall by appropriate action adopt the Plan. 
 
Effective Time means the time at which the Underwriting Agreement for the initial public offering of the Common Stock is
executed and finally priced. The initial Offering Period under the Plan shall start at the time of such execution and pricing of the Underwriting Agreement. Any Corporate Affiliate which becomes a Participating Corporation in the Plan after such
Effective Time shall designate a subsequent Effective Time with respect to its employee-Participants. 
 

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Eligible
Employee means any person who is regularly engaged for a period of more than twenty (20) hours per week for more than five (5) months per calendar year, in the rendition of personal services to the Corporation or any other Participating
Corporation as an employee for earnings considered wages under Section 3121(a) of the Code. 
 
Fair Market Value means, for the Effective Time at which the initial Offering Period under the Plan begins, the price per share at which the Common Stock is to be sold in the initial
public offering of the Common Stock pursuant to the Underwriting Agreement. For any subsequent date under the Plan on which the Common Stock is registered under Section 12(g) of the 1934 Act and traded on the open market, Fair Market Value means the
closing selling price per share of the Common Stock on such date, as officially quoted on the principal securities exchange on which the Common Stock is at the time traded or, if not traded on any securities exchange, the closing selling price per
share of the Common Stock on such date, as reported on the Nasdaq National Market. If there are no sales of the Common Stock on such day, then the closing selling price per share on the last preceding day for which such closing selling price is
quoted shall be determinative of Fair Market Value. 
 
1933 Act means the Securities Act of 1933, as amended. 
 
1934 Act means the Securities Exchange Act of 1934, as amended. 
 
Offering Period means a period of approximately twenty-four (24) months that commences on the first business day following
each Semi-Annual Purchase Date, during which a Participant may be granted a purchase right. 
 
Participant means any Eligible Employee of a Participating Corporation who is actively participating in the Plan. 
 
Participating Corporation means the Corporation and such Corporate Affiliate or Affiliates as
may be authorized from time to time by the Board to extend the benefits of the Plan to their Eligible Employees. The Participating Corporations in the Plan, as of the Effective Time, are listed in attached Schedule A. 
 
Plan Administrator shall have the meaning given
such term in Article III. 
 
Semi-Annual
Period of Participation means each semi-annual period for which the Participant actually participates in an Offering Period in effect under the Plan. There shall be a maximum of four (4) semi-annual periods of participation within each
Offering Period. The first such semi-annual period (which may actually be more or less than six (6) months for the initial Offering Period) shall extend from the Effective Time through the last business day in January 1997. Subsequent semi-annual
periods shall be measured from the first business day of February to the last business day of July in the same calendar year and from the first business day of August to the last business day of January in the succeeding calendar year. 
 

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Semi-Annual Purchase Date means the last business day of January and July each calendar year on which shares of Common Stock are automatically purchased for Participants under the Plan. The initial Semi-Annual Purchase
Date will be January 31, 1997. 
 
III.
ADMINISTRATION 
 
The Plan
Administrator shall have sole and exclusive authority to administer the Plan and shall consist of a committee (the “Plan Administrator”) of two (2) or more non-employee Board members appointed by the Board. The Plan Administrator shall
have full authority to interpret and construe any provision of the Plan and to adopt such rules and regulations for administering the Plan as it may deem necessary in order to comply with the requirements of Code Section 423. Decisions of the Plan
Administrator shall be final and binding on all parties who have an interest in the Plan. 
 
IV. OFFERING PERIODS 
 
A. Shares of Common Stock shall be offered for purchase under the Plan through a series of successive or overlapping Offering Periods until such time as (i) the maximum number of shares of Common Stock
available for issuance under the Plan shall have been purchased or (ii) the Plan shall have been sooner terminated in accordance with Subsection I of Article VII, Subsection A of Article IX or Subsection B of Article X. 
 
B. Each Offering Period shall have a maximum duration of
twenty-four (24) months. The duration of each Offering Period shall be designated by the Plan Administrator prior to the start date. However, the initial Offering Period shall run from the Effective Time to the last business day of July 1998. The
next Offering Period shall commence on the first business day of February 1997 and continue through the last business day of January 1999, and subsequent Offering Periods shall commence as designated by the Plan Administrator. 
 
C. The Participant shall be granted a separate purchase right
for each Offering Period in which he or she participates, and each Participant may participate in more than one (1) Offering Period at any one time. Accordingly, a Participant may continue to participate in one Offering Period and also enroll in
subsequent Offering Periods. The purchase right shall be granted on the date such individual first joins an Offering Period in effect under the Plan and shall be automatically exercised in successive semi-annual installments on the last business day
of January and July of each year. Accordingly, each purchase right may be exercised up to two (2) times each year it remains outstanding. In the event that the Fair Market Value of the Common Stock on the last trading day before the commencement of
the Offering Period for which the Participant is enrolled is higher than on the last trading day before the commencement of any subsequent Offering Period, the Participant shall automatically be re-enrolled for such subsequent Offering Period. In
addition, any other provision of the Plan notwithstanding, the Corporation (at its sole discretion) may determine prior to the commencement of any new Offering Period that all Participants shall be re-enrolled for such new Offering Period. When a
Participant reaches the end of an Offering Period but his or her participation is to continue, then such Participant shall automatically be re-enrolled for the Offering Period that commences immediately after the end of the prior Offering Period.

 

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D. No purchase
rights granted under the Plan shall be exercised, and no shares of Common Stock shall be issued hereunder, until such time as (i) the Plan shall have been approved by the stockholders of the Corporation and (ii) the Corporation shall have complied
with all applicable requirements of the 1933 Act (including the registration of the shares of Common Stock issuable under the Plan on a Form S-8 registration statement filed with the Securities and Exchange Commission), all applicable listing
requirements of any securities exchange on which the Common Stock is listed for trading and all other applicable requirements established by law or regulation. 
 
E. The Participant’s acquisition of Common Stock under the Plan on any Semi-Annual Purchase Date shall neither limit nor require the
Participant’s acquisition of Common Stock on any subsequent Semi-Annual Purchase Date, whether within the same or a different Offering Period. 
 
V. ELIGIBILITY AND PARTICIPATION 
 
A. Each Eligible Employee of a Participating Corporation shall be eligible to participate in the Plan in accordance with the following
provisions: 
 
– An individual who is an
Eligible Employee on the start date of any Offering Period under the Plan shall be eligible to commence participation in that Offering Period on such start date. 
 
– An individual who first becomes an Eligible Employee after the start date of any Offering Period under
the Plan may enter any subsequent Offering Period on which he/she remains an Eligible Employee. 
 
B. In order to participate in the Plan for a particular Offering Period, the Eligible Employee must complete the enrollment forms prescribed by the Plan Administrator (including a purchase agreement
and a payroll deduction authorization) and file such forms with the Plan Administrator (or its designate) on or before the start date for such Offering Period. 
 
C. The payroll deduction authorized by the Participant for purposes of acquiring shares of Common Stock under the Plan may be any multiple
of one percent (1%) of the Cash Compensation paid to the Participant during each Semi-Annual Period of Participation within the Offering Period, up to a maximum of fifteen percent (15%). However, if a Participant is participating in more than one
Offering Period at any one time, the maximum authorized payroll deduction under the Plan remains fifteen percent (15%). The deduction rate so authorized shall continue in effect for the remainder of the Offering Period, except to the extent such
rate is changed in accordance with the following guidelines: 
 
– The Participant may, at any time during a Semi-Annual Period of Participation, reduce his/her rate of payroll deduction to become effective as soon as possible after filing of the requisite reduction form with the Plan
Administrator. The Participant may 
 

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not, however, effect more than one (1) such reduction per Semi-Annual Period of
Participation. 
 
– The Participant may, prior
to the commencement of any new Semi-Annual Period of Participation within the Offering Period, increase the rate of his/her payroll deduction by filing the appropriate form with the Plan Administrator. The new rate (which may not exceed the fifteen
percent (15%) maximum) shall become effective as of the first day of the first Semi-Annual Period of Participation following the filing of such form. If the Participant is participating in more than one Offering Period and Participant elects to
increase his or her payroll deduction in any one Offering Period, the payroll deduction applicable to any other Offering Period shall be automatically reduced, such that the maximum payroll deduction for all concurrent Offering Periods remains
fifteen percent (15%). 
 
D. In no event may any
Participant’s payroll deductions for any one Semi-Annual Period of Participation exceed Ten Thousand Dollars ($10,000.00). 
 
E. Payroll deductions will automatically cease upon the termination of the Participant’s purchase right in accordance with the
applicable provisions of Section VII below. 
 
VI. STOCK SUBJECT TO PLAN 
 
A. The Common Stock purchasable by Participants under the Plan shall, solely in the discretion of the Plan Administrator, be made available from either authorized but unissued shares of Common Stock or from shares of Common Stock
reacquired by the Corporation, including shares of Common Stock purchased on the open market. The total number of shares which may be issued in the aggregate under the Plan shall not exceed Three Million (3,000,000) shares (subject to adjustment
under Section VI.B below). 
 
B. In the event any
change is made to the Corporation’s outstanding Common Stock by reason of any stock dividend, stock split, exchange or combination of shares, recapitalization or any other change affecting the Common Stock as a class without the
Corporation’s receipt of consideration, appropriate adjustments shall be made by the Plan Administrator to (i) the class and maximum number of securities issuable over the term of the Plan, (ii) the class and maximum number of securities
purchasable per Participant on any one (1) Semi-Annual Purchase Date and (iii) the class and number of securities and the price per share in effect under each purchase right at the time outstanding under the Plan. Such adjustments shall be designed
to preclude the dilution or enlargement of rights and benefits under the Plan. 
 
VII. PURCHASE RIGHTS 
 
Each Eligible Employee who participates in the Plan for a particular Offering Period shall have the right to purchase shares of Common Stock, in a series of successive semi-annual installments during
such Offering Period, upon the terms and conditions set forth below and shall execute a purchase agreement embodying such terms and conditions and such other provisions (not inconsistent with the Plan) as the Plan Administrator may deem advisable.

 

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A.
Purchase Price. Common Stock shall be purchasable on each Semi-Annual Purchase Date within the Offering Period at a purchase price equal to eighty-five percent (85%) of the lower of (i) the Fair Market Value per share of Common
Stock on the Participant’s commencement date into that Offering Period or (ii) the Fair Market Value per share on that Semi-Annual Purchase Date. 
 
B. Number of Purchasable Shares. The number of shares purchasable per Participant on each Semi-Annual Purchase Date during
the Offering Period shall be the number of whole shares obtained by dividing the amount collected from the Participant through payroll deductions during the Semi-Annual Period of Participation ending with that Semi-Annual Purchase Date (together
with any carryover deductions from the preceding Semi-Annual Period of Participation) by the purchase price in effect for the Semi-Annual Purchase Date (as determined in accordance with Subsection A above). However, the maximum number of shares of
Common Stock purchasable per Participant on any Semi-Annual Purchase Date shall not exceed Five Thousand (5,000) shares, subject to periodic adjustment under Section VI.B. 
 
Under no circumstances shall purchase rights be granted under the Plan to any Eligible Employee if such
individual would, immediately after the grant, own (within the meaning of Code Section 424(d)) or hold outstanding options or other rights to purchase, stock possessing five percent (5%) or more of the total combined voting power or value of all
classes of stock of the Corporation or any of its Corporate Affiliates. 
 
C. Payment. Payment for Common Stock purchased under the Plan shall be effected by means of the Participant’s authorized payroll deductions. Such deductions shall begin with the first pay day following the
Participant’s commencement into the Offering Period and shall (unless sooner terminated by the Participant) continue through the pay day ending with or immediately prior to the last day of the Offering Period. The amounts so collected shall be
credited to the Participant’s book account under the Plan, but no interest shall be paid on the outstanding balance credited to such account. The amounts collected from a Participant will not be held in any segregated account or trust fund and
may be commingled with the general assets of the Corporation and used for general corporate purposes. 
 
D. Termination of Purchase Right. The following provisions shall govern the termination of outstanding purchase rights:

 
– A Participant may, at any time prior to
the last five (5) business days of the next Semi-Annual Purchase Date, terminate his/her outstanding purchase right(s) under the Plan by filing the prescribed notification form with the Plan Administrator (or its designate). No further payroll
deductions shall be collected from the Participant with respect to the terminated purchase right, and any payroll deductions collected for the Semi-Annual Period of Participation in which such termination occurs shall, at the Participant’s
election, be immediately refunded or held for the purchase of shares on the Semi-Annual Purchase Date immediately following such termination. If no such election is made at the time such purchase right is terminated, then the payroll deductions
collected with respect to the terminated right shall be refunded as soon as possible. 
 

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– The
termination of such purchase right shall be irrevocable, and a Participant may not subsequently rejoin the Offering Period for which the terminated purchase right was granted. In order to resume participation in any subsequent Offering Period, such
individual must re-enroll in the Plan (by making a timely filing of a new stock purchase agreement and enrollment form) on or before the date he or she is first eligible to join the new Offering Period. 
 
– Should a Participant cease to remain an Eligible
Employee for any reason (including death, disability or change in status) while his/her purchase right(s) remains outstanding, then such purchase right(s) shall immediately terminate, and such individual (or the personal representative of the estate
of a deceased Participant) shall have the following election with respect to the payroll deductions made to date in the Semi-Annual Period of Participation in which such cessation of Eligible Employee status occurs: 
 
1) to withdraw all of those deductions, or 
 
2) to have such funds held for the purchase of shares at the
end of the Semi-Annual Period of Participation. 
 
If no such election is made within the thirty (30)-day period following such cessation of Eligible Employee status or (if earlier) prior to the last day of the Semi-Annual Period of Participation, then the collected payroll
deductions shall be refunded as soon as possible. In no event, however, may any payroll deductions be made on the Participant’s behalf following his/her cessation of Eligible Employee status. If a Participant’s ceases Eligible Employee
status more than three (3) months prior to the last day of the Semi-Annual Period of Participation and elects to have funds held for the purchase of shares on such last date, then the Participant shall be required to satisfy all income and
employment tax withholding requirements applicable to such purchase. 
 
E. Stock Purchase. Shares of Common Stock shall automatically be purchased on behalf of each Participant (other than Participants whose payroll deductions have previously been refunded in accordance with the
Termination of Purchase Right provisions in Subsection D above) on each Semi-Annual Purchase Date. The purchase shall be effected by applying each Participant’s payroll deductions for the Semi-Annual Period of Participation ending on such
Semi-Annual Purchase Date (together with any carryover deductions from the preceding Semi-Annual Period of Participation) to the purchase of whole shares of Common Stock (subject to the limitation on the maximum number of purchasable shares imposed
under Subsection B of this Article VII) at the purchase price in effect for that Semi-Annual Purchase Date. Any payroll deductions not applied to such purchase because they are not sufficient to purchase a whole share shall be held for the purchase
of Common Stock on the next Semi-Annual Purchase Date. However, any payroll deductions not applied to the purchase of Common Stock by reason of the limitation on the maximum number of shares purchasable by the Participant on the Semi-Annual Purchase
Date shall be promptly refunded to the Participant. 
 
F. Proration of Purchase Rights. Should the total number of shares of Common Stock which are to be purchased pursuant to outstanding purchase rights on any 
 

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particular date exceed the number of shares then available for issuance under the Plan, the Plan
Administrator shall make a pro-rata allocation of the available shares on a uniform and nondiscriminatory basis, and the payroll deductions of each Participant, to the extent in excess of the aggregate purchase price payable for the Common Stock
pro-rated to such individual, shall be refunded to such Participant. 
 
G. Rights as Stockholder. A Participant shall have no stockholder rights with respect to the shares subject to his/her outstanding purchase right until the shares are actually purchased on the
Participant’s behalf in accordance with the applicable provisions of the Plan. No adjustments shall be made for dividends, distributions or other rights for which the record date is prior to the date of such purchase. 
 
A Participant shall be entitled to receive, as soon as
practicable after each Semi-Annual Purchase Date, a stock certificate for the number of shares purchased on the Participant’s behalf. Such certificate may, upon the Participant’s request, be issued in the names of the Participant and
his/her spouse as community property or as joint tenants with right of survivorship. Alternatively, the Corporation may provide for the issuance of such certificate in “street name” for immediate deposit in a Corporation-designated
brokerage account established by the Participant. 
 
H. Assignability. No purchase right granted under the Plan shall be assignable or transferable by the Participant other than by will or by the laws of descent and distribution following the Participant’s death, and
during the Participant’s lifetime the purchase right shall be exercisable only by the Participant. 
 
I. Corporate Transaction. Should any of the following transactions (a “Corporate Transaction”) occur during the
Offering Period: 
 
(i) a merger or consolidation
in which securities possessing more than fifty percent (50%) of the total combined voting power of the Corporation’s outstanding securities are transferred to a person or persons different from the persons holding those securities immediately
prior to such transaction, or 
 
(ii) the sale,
transfer or other disposition of all or substantially all of the assets of the Corporation in complete liquidation or dissolution of the Corporation. 
 
then each outstanding purchase right shall automatically be exercised, immediately prior to the effective date of any Corporate Transaction, by applying
the payroll deductions of each Participant for the Semi-Annual Period of Participation in which such Corporate Transaction occurs to the purchase of whole shares of Common Stock at a purchase price per share equal to eighty-five percent (85%) of the
lower of (i) the Fair Market Value per share of Common Stock on the Participant’s commencement date into the offering period in which such Corporate Transaction occurs or (ii) the Fair Market Value per share of Common Stock immediately
prior to the effective date of such Corporate Transaction. However, the applicable limitation on the number of shares of Common Stock purchasable per Participant shall continue to apply to any such purchase. 
 

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The
Corporation shall use its best efforts to provide at least ten (10)-days prior written notice of the occurrence of any Corporate Transaction, and Participants shall, following the receipt of such notice, have the right to terminate their outstanding
purchase rights in accordance with the applicable provisions of this Article VII. 
 
VIII. ACCRUAL LIMITATIONS 
 
A. No Participant shall be entitled to accrue rights to acquire Common Stock pursuant to any purchase right outstanding under this Plan if and to the extent such accrual, when aggregated with (i)
rights to purchase Common Stock accrued under any other purchase right outstanding under this Plan and (ii) similar rights accrued under other employee stock purchase plans (within the meaning of Code Section 423) of the Corporation or its Corporate
Affiliates, would otherwise permit such Participant to purchase more than Twenty-Five Thousand Dollars ($25,000) worth of stock of the Corporation or any Corporate Affiliate (determined on the basis of the Fair Market Value of such stock on the date
or dates such rights are granted) for each calendar year such rights are at any time outstanding. 
 
B. For purposes of applying such accrual limitations, the right to acquire Common Stock pursuant to each purchase right outstanding under
the Plan shall accrue as follows: 
 
– The
right to acquire Common Stock under each such purchase right shall accrue in a series of successive semi-annual installments as and when the purchase right first becomes exercisable for each such installment on the last business day of each
Semi-Annual Period of Participation for which the right remains outstanding. 
 
– No right to acquire Common Stock under any outstanding purchase right shall accrue to the extent the Participant has already accrued in the same calendar year the right to acquire Common Stock
under one (1) or more other purchase rights at a rate equal to Twenty-Five Thousand Dollars ($25,000) worth of Common Stock (determined on the basis of the Fair Market Value on the date or dates of grant) for each calendar year during which one (1)
or more of those purchase rights were at any time outstanding. 
 
– If by reason of such accrual limitations, any purchase right of a Participant does not accrue for a particular Semi-Annual Period of Participation, then the payroll deductions which the Participant made during that Semi-Annual
Period of Participation with respect to such purchase right shall be promptly refunded. 
 
C. In the event there is any conflict between the provisions of this Article VIII and one (1) or more provisions of the Plan or any instrument issued thereunder, the provisions of this Article VIII
shall be controlling. 
 

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IX.
AMENDMENT AND TERMINATION 
 
A. The Board may
alter, amend, suspend or discontinue the Plan following the close of any Semi-Annual Period of Participation. However, the Board may not, without the approval of the Corporation’s stockholders: 
 
– materially increase the number of shares issuable under
the Plan or the maximum number of shares purchasable per Participant on any one (1) Semi-Annual Purchase Date, except that the Plan Administrator shall have the authority, exercisable without such stockholder approval, to effect adjustments to the
extent necessary to reflect changes in the Corporation’s capital structure pursuant to Subsection B of Article VI; or 
 
– alter the purchase price formula so as to reduce the purchase price payable for the shares purchasable under the Plan; or

 
– materially increase the benefits accruing
to Participants under the Plan or materially modify the requirements for eligibility to participate in the Plan. 
 
B. The Corporation shall have the right, exercisable in the sole discretion of the Plan Administrator, to terminate all outstanding
purchase rights under the Plan immediately following the close of any Semi-Annual Period of Participation. Should the Corporation elect to exercise such right, then the Plan shall terminate in its entirety. No further purchase rights shall
thereafter be granted or exercised, and no further payroll deductions shall thereafter be collected, under the Plan. 
 
X. GENERAL PROVISIONS 
 
A. The Plan was adopted by the Board on April 16, 1996 and approved by the stockholders on May 15, 1996. The Plan was subsequently amended
and restated on December 31, 1996 to increase the number of shares issuable thereunder by 200,000 shares and the amendment was approved by the stockholders on February 14, 1997 at the 1997 Annual Meeting. The Plan was subsequently amended and
restated on October 29, 1997 to increase the number of shares issuable thereunder by 100,000 shares, and the amendment was approved by the stockholders on February 18, 1998 at the 1998 Annual Meeting. The Plan was subsequently amended and restated
on October 27, 1998 to increase the number of shares issuable thereunder by 150,000 shares, and the amendment was approved by the stockholders at the 1999 Annual Meeting. The Plan was subsequently amended and restated on January 13, 2000 to increase
the number of shares issuable thereunder by 50,000 shares, and the amendment was approved by the stockholders at the 2000 Annual Meeting. The Plan was subsequently amended and restated on October 28, 2000 to increase the number of shares issuable
thereunder by 800,000 shares, and the amendment was approved by the stockholders at the 2001 Annual Meeting. The Plan was subsequently amended and restated on December 13, 2001 to increase the number of shares issuable thereunder by 650,000 shares,
and the amendment was approved by the stockholders at the 2002 Annual Meeting. The Plan was subsequently amended and restated on December 6, 2002 to increase the number of shares issuable thereunder by 750,000 shares, and the amendment was approved
by the stockholders at the 2003 Annual Meeting. No Purchase Rights shall be 
 

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exercised and no shares of
Common Stock shall be issued hereunder on the basis of the 750,000 share increase until the Corporation shall have complied with all applicable requirements of the 1933 Act (including the registration of the shares of Common Stock on a Form S-8
registration filed with the Securities and Exchange Commission), all applicable listing requirements of any stock exchange (or the Nasdaq National Market, if applicable) on which the Common Stock is listed for trading and all other applicable
requirements established by law or regulation. 
 
B. The Plan shall terminate upon the earlier of (i) the last business day in July 2006 or (ii) the date on which all shares available for issuance under the Plan shall have been sold pursuant to purchase rights exercised under the
Plan. 
 
C. All costs and expenses incurred in the
administration of the Plan shall be paid by the Corporation. 
 
D. Neither the action of the Corporation in establishing the Plan, nor any action taken under the Plan by the Board or the Plan Administrator, nor any provision of the Plan itself shall be construed so as to grant any person the
right to remain in the employ of the Corporation or any of its Corporate Affiliates for any period of specific duration, and such person’s employment may be terminated at any time, with or without cause. 
 
E. The provisions of the Plan shall be governed by the laws of
the State of California without resort to that State’s conflict-of-laws rules. 
 
 

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Schedule A

 
Corporations Participating in

Employee Stock Purchase Plan 
As of the Effective Time 
 
Netopia, Inc.2002 Equity Incentive Plan Stock Option Agreement

 
EXHIBIT 4.02

 
NETOPIA,
INC. 
 
2002
EQUITY INCENTIVE PLAN 
 
(AS ADOPTED EFFECTIVE JANUARY 30, 2002 AND AS AMENDED EFFECTIVE JANUARY 28, 2003)

 

 
TABLE OF
CONTENTS 
 

	 	  	 Page

	 ARTICLE 1. INTRODUCTION
	  	 1

	
	 ARTICLE 2. ADMINISTRATION
	  	 1

	 2.1 Committee Composition
	  	 1

	 2.2 Committee Responsibilities
	  	 1

	 2.3 Committee for Non-Officer Grants
	  	 1

	
	 ARTICLE 3. SHARES AVAILABLE FOR GRANTS
	  	 2

	 3.1 Basic Limitation
	  	 2

	 3.2 Annual Increase in Shares
	  	 2

	 3.3 Additional Shares
	  	 2

	 3.4 Dividend Equivalents
	  	 2

	
	 ARTICLE 4. ELIGIBILITY
	  	 2

	 4.1 Incentive Stock Options
	  	 2

	 4.2 Other Grants
	  	 3

	
	 ARTICLE 5. OPTIONS
	  	 3

	 5.1 Stock Option Agreement
	  	 3

	 5.2 Number of Shares
	  	 3

	 5.3 Exercise Price
	  	 3

	 5.4 Exercisability and Term
	  	 3

	 5.5 Modification or Assumption of Options
	  	 3

	 5.6 Buyout Provisions
	  	 4

	
	 ARTICLE 6. PAYMENT FOR OPTION SHARES
	  	 4

	 6.1 General Rule
	  	 4

	 6.2 Surrender of Stock
	  	 4

	 6.3 Exercise/Sale
	  	 4

	 6.4 Exercise/Pledge
	  	 4

	 6.5 Promissory Note
	  	 4

	 6.6 Other Forms of Payment
	  	 5

	
	 ARTICLE 7. STOCK APPRECIATION RIGHTS
	  	 5

	 7.1 SAR Agreement
	  	 5

	 7.2 Number of Shares
	  	 5

	 7.3 Exercise Price
	  	 5

	 7.4 Exercisability and Term
	  	 5

	 7.5 Exercise of SARs
	  	 5

	 7.6 Modification or Assumption of SARs
	  	 6

 

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	 ARTICLE 8. RESTRICTED SHARES
	  	 6

	 8.1 Restricted Stock Agreement
	  	 6

	 8.2 Payment for Awards
	  	 6

	 8.3 Vesting Conditions
	  	 6

	 8.4 Voting and Dividend Rights
	  	 6

	
	 ARTICLE 9. STOCK UNITS
	  	 6

	 9.1 Stock Unit Agreement
	  	 6

	 9.2 Payment for Awards
	  	 7

	 9.3 Vesting Conditions
	  	 7

	 9.4 Voting and Dividend Rights
	  	 7

	 9.5 Form and Time of Settlement of Stock Units
	  	 7

	 9.6 Death of Recipient
	  	 7

	 9.7 Creditors’ Rights
	  	 7

	
	 ARTICLE 10. CORPORATE TRANSACTION
	  	 8

	 10.1 Corporate Transaction
	  	 8

	 10.2 Award Termination
	  	 8

	
	 ARTICLE 11. AUTOMATIC OPTION GRANT PROGRAM
	  	 8

	 11.1 Option Terms
	  	 8

	 11.2 Corporate Transaction
	  	 9

	 11.3 Remaining Terms
	  	 10

	
	 ARTICLE 12. PROTECTION AGAINST DILUTION
	  	 10

	 12.1 Adjustments
	  	 10

	 12.2 Dissolution or Liquidation
	  	 11

	 12.3 Reorganizations
	  	 11

	
	 ARTICLE 13. DEFERRAL OF AWARDS
	  	 11

	
	 ARTICLE 14. AWARDS UNDER OTHER PLANS.
	  	 11

	
	 ARTICLE 15. PAYMENT OF DIRECTOR’S FEES IN SECURITIES
	  	 12

	 15.1 Effective Date
	  	 12

	 15.2 Elections to Receive Nonstatutory Options, Restricted Shares or Stock
Units
	  	 12

	 15.3 Number and Terms of Nonstatutory Options, Restricted Shares or Stock
Units
	  	 12

	
	 ARTICLE 16. LIMITATION ON RIGHTS
	  	 12

	 16.1 Retention Rights
	  	 12

	 16.2 Stockholders’ Rights
	  	 12

	 16.3 Regulatory Requirements
	  	 12

	
	 ARTICLE 17. WITHHOLDING TAXES
	  	 13

	 17.1 General
	  	 13

	 17.2 Share Withholding
	  	 13

 

ii 

	 ARTICLE 18. FUTURE OF THE PLAN
	  	 13

	 18.1 Term of the Plan
	  	 13

	 18.2 Amendment or Termination
	  	 13

	
	 ARTICLE 19. LIMITATION ON PAYMENTS
	  	 13

	 19.1 Scope of Limitation
	  	 13

	 19.2 Basic Rule
	  	 14

	 19.3 Reduction of Payments
	  	 14

	 19.4 Overpayments and Underpayments
	  	 14

	 19.5 Related Corporations
	  	 15

	
	 ARTICLE 20. DEFINITIONS
	  	 15

 

iii 

NETOPIA, INC. 
 
2002 EQUITY INCENTIVE
PLAN 
 
ARTICLE 1.
INTRODUCTION. 
 
The Board adopted the Plan
effective January 30, 2002. The purpose of the Plan is to promote the long-term success of the Company and the creation of stockholder value by (a) encouraging Employees, Outside Directors and Consultants to focus on critical long-range objectives,
(b) encouraging the attraction and retention of Employees, Outside Directors and Consultants with exceptional qualifications and (c) linking Employees, Outside Directors and Consultants directly to stockholder interests through increased stock
ownership. The Plan seeks to achieve this purpose by providing for Awards in the form of Restricted Shares, Stock Units, Options (which may constitute incentive stock options or nonstatutory stock options) or stock appreciation rights. 
 
The Plan shall be governed by, and construed in accordance
with, the laws of the State of Delaware (except their choice-of-law provisions). 
 
ARTICLE 2. ADMINISTRATION. 
 
2.1 Committee Composition. The Committee shall administer the Plan. The Committee shall consist exclusively of two or more directors of the Company, who shall be appointed by the Board.
In addition, the composition of the Committee shall satisfy: 
 
(a) Such requirements as the Securities and Exchange Commission may establish for administrators acting under plans intended to qualify for exemption under Rule 16b-3 (or its successor) under the Exchange Act; and 
 
(b) Such requirements as the Internal Revenue Service may
establish for outside directors acting under plans intended to qualify for exemption under section 162(m)(4)(C) of the Code. 
 
2.2 Committee Responsibilities. The Committee shall (a) select the Employees, Outside Directors and Consultants who are to
receive Awards under the Plan, (b) determine the type, number, vesting requirements and other features and conditions of such Awards, (c) interpret the Plan and (d) make all other decisions relating to the operation of the Plan. The Committee may
adopt such rules or guidelines as it deems appropriate to implement the Plan. The Committee’s determinations under the Plan shall be final and binding on all persons. 
 
2.3 Committee for Non-Officer Grants. The Board may also appoint a secondary committee of the
Board, which shall be composed of one or more directors of the Company who need not satisfy the requirements of Section 2.1. Such secondary committee may administer the Plan with respect to Employees and Consultants who are not considered officers

or directors of the Company under section 16 of the Exchange Act, may grant Awards under the Plan to such
Employees and Consultants and may determine all features and conditions of such Awards. Within the limitations of this Section 2.3, any reference in the Plan to the Committee shall include such secondary committee. 
 
ARTICLE 3. SHARES AVAILABLE FOR GRANTS. 
 
3.1 Basic Limitation. Shares of Common Stock
issued pursuant to the Plan may be authorized but unissued shares or treasury shares. The aggregate number of Options, SARs, Stock Units and Restricted Shares awarded under the Plan shall not exceed (a) 750,000 plus (b) the additional shares of
Common Stock described in Sections 3.2 and 3.3. The limitations of this Section 3.1 and Section 3.2 shall be subject to adjustment pursuant to Article 12. 
 
3.2 Annual Increase in Shares. As of the first trading day of each year, commencing with the
year 2003, the aggregate number of Options, SARs, Stock Units and Restricted Shares that may be awarded under the Plan shall automatically increase by a number equal to 4.75% of the total number of shares of Common Stock outstanding on December 31
of the preceding year, provided, however, that such increase shall in no event exceed 1,000,000 shares of Common Stock per year. 
 
3.3 Additional Shares. If Restricted Shares or shares of Common Stock issued upon the exercise of Options are forfeited,
then such shares of Common Stock shall again become available for Awards under the Plan. If Stock Units, Options or SARs are forfeited or terminate for any other reason before being exercised, then the corresponding shares of Common Stock shall
again become available for Awards under the Plan. If Stock Units are settled, then only the number of shares of Common Stock (if any) actually issued in settlement of such Stock Units shall reduce the number available under Section 3.1 and the
balance shall again become available for Awards under the Plan. If SARs are exercised, then only the number of shares of Common Stock (if any) actually issued in settlement of such SARs shall reduce the number available under Section 3.1 and the
balance shall again become available for Awards under the Plan. The foregoing notwithstanding, the aggregate number of shares of Common Stock that may be issued under the Plan upon the exercise of Incentive Options shall not be increased when
Restricted Shares or other shares of Common Stock are forfeited. 
 
3.4 Dividend Equivalents. Any dividend equivalents paid or credited under the Plan shall not be applied against the number of Restricted Shares, Stock Units, Options or SARs available for Awards, whether or not
such dividend equivalents are converted into Stock Units. 
 
ARTICLE 4. ELIGIBILITY. 
 
4.1 Incentive Stock Options. Only Employees who are common-law employees of the Company, a Parent or a Subsidiary shall be eligible for the grant of Incentive Options. In addition, an Employee who owns more than 10% of the
total combined voting power of all classes of outstanding stock of the Company or any of its Parents or Subsidiaries 
 

2 

shall not be eligible for the grant of an Incentive Option unless the requirements set forth in
section 422(c)(6) of the Code are satisfied. 
 
4.2 Other Grants. Only Employees, Outside Directors and Consultants shall be eligible for the grant of Restricted Shares, Stock Units, Nonstatutory Options or SARs. 
 
ARTICLE 5. OPTIONS. 
 
5.1 Stock Option Agreement. Each grant of an
Option under the Plan shall be evidenced by a Stock Option Agreement between the Optionee and the Company. Such Option shall be subject to all applicable terms of the Plan and may be subject to any other terms that are not inconsistent with the
Plan. The Stock Option Agreement shall specify whether the Option is an Incentive Option or a Nonstatutory Option. The provisions of the various Stock Option Agreements entered into under the Plan need not be identical. Options may be granted in
consideration of a reduction in the Optionee’s other compensation. A Stock Option Agreement may provide that a new Option will be granted automatically to the Optionee when he or she exercises a prior Option and pays the Exercise Price in the
form described in Section 6.2. 
 
5.2
Number of Shares. Each Stock Option Agreement shall specify the number of shares of Common Stock subject to the Option and shall provide for the adjustment of such number in accordance with Article 12. Options granted to any Optionee in
any two calendar year period beginning with the two-year period commencing January 1, 2002 shall not cover more than 750,000 shares of Common Stock. The limitations set forth in the preceding sentence shall be subject to adjustment in accordance
with Article 12. 
 
5.3 Exercise
Price. Each Stock Option Agreement shall specify the Exercise Price; provided that the Exercise Price under an Incentive Option shall in no event be less than 100% of the Fair Market Value of a share of Common Stock on the date of grant and the
Exercise Price under a Nonstatutory Option shall in no event be less than 85% of the Fair Market Value of a share of Common Stock on the date of grant. 
 
5.4 Exercisability and Term. Each Stock Option Agreement shall specify the date or event when all or any installment of the
Option is to become exercisable. The Stock Option Agreement shall also specify the term of the Option; provided that the term of an Incentive Option shall in no event exceed 10 years from the date of grant. A Stock Option Agreement may provide for
accelerated exercisability in the event of the Optionee’s death, disability or retirement or other events and may provide for expiration prior to the end of its term in the event of the termination of the Optionee’s Service. Options may be
awarded in combination with SARs, and such an Award may provide that the Options will not be exercisable unless the related SARs are forfeited. 
 
5.5 Modification or Assumption of Options. Within the limitations of the Plan, the Committee may modify, extend or assume
outstanding options or may accept the cancellation of outstanding options (whether granted by the Company or by another issuer) in return for the grant of new options for the same or a different number of shares and at the same or a different
exercise price. The foregoing notwithstanding, no modification of an Option shall, 
 

3 

without the consent of the Optionee, alter or impair his or her rights or obligations under such
Option. 
 
5.6 Buyout Provisions. The
Committee may at any time (a) offer to buy out for a payment in cash or cash equivalents an Option previously granted or (b) authorize an Optionee to elect to cash out an Option previously granted, in either case at such time and based upon such
terms and conditions as the Committee shall establish. 
 
ARTICLE 6. PAYMENT FOR OPTION SHARES. 
 
6.1 General Rule. The entire Exercise Price of shares of Common Stock issued upon exercise of Options shall be payable in cash or cash equivalents at the time when such shares of Common Stock are purchased, except as
follows: 
 
(a) In the case of an Incentive Option
granted under the Plan, payment shall be made only pursuant to the express provisions of the applicable Stock Option Agreement. The Stock Option Agreement may specify that payment may be made in any form(s) described in this Article 6. 
 
(b) In the case of a Nonstatutory Option, the Committee may
at any time accept payment in any form(s) described in this Article 6. 
 
6.2 Surrender of Stock. To the extent that this Section 6.2 is applicable, all or any part of the Exercise Price may be paid by surrendering, or attesting to the ownership of, shares of Common Stock that are
already owned by the Optionee. Such shares of Common Stock shall be valued at their Fair Market Value on the date when the new shares of Common Stock are purchased under the Plan. The Optionee shall not surrender, or attest to the ownership of,
shares of Common Stock in payment of the Exercise Price if such action would cause the Company to recognize compensation expense (or additional compensation expense) with respect to the Option for financial reporting purposes. 
 
6.3 Exercise/Sale. To the extent that this
Section 6.3 is applicable, all or any part of the Exercise Price and any withholding taxes may be paid by delivering (on a form prescribed by the Company) an irrevocable direction to a securities broker approved by the Company to sell all or part of
the shares of Common Stock being purchased under the Plan and to deliver all or part of the sales proceeds to the Company. 
 
6.4 Exercise/Pledge. To the extent that this Section 6.4 is applicable, all or any part of the Exercise Price and any
withholding taxes may be paid by delivering (on a form prescribed by the Company) an irrevocable direction to pledge all or part of the shares of Common Stock being purchased under the Plan to a securities broker or lender approved by the Company,
as security for a loan, and to deliver all or part of the loan proceeds to the Company. 
 
6.5 Promissory Note. To the extent that this Section 6.5 is applicable, all or any part of the Exercise Price and any withholding taxes may be paid by delivering (on a form prescribed by the
Company) a full-recourse promissory note. However, the par value of the shares of Common Stock being purchased under the Plan, if newly issued, shall be paid in cash or cash equivalents. 
 

4 

6.6 Other Forms of Payment. To the extent that this Section 6.6 is
applicable, all or any part of the Exercise Price and any withholding taxes may be paid in any other form that is consistent with applicable laws, regulations and rules. 
 
ARTICLE 7. STOCK APPRECIATION RIGHTS. 
 
7.1 SAR Agreement. Each grant of an SAR under the Plan shall be evidenced by an SAR Agreement
between the Optionee and the Company. Such SAR shall be subject to all applicable terms of the Plan and may be subject to any other terms that are not inconsistent with the Plan. The provisions of the various SAR Agreements entered into under the
Plan need not be identical. SARs may be granted in consideration of a reduction in the Optionee’s other compensation. 
 
7.2 Number of Shares. Each SAR Agreement shall specify the number of shares of Common Stock to which the SAR pertains and
shall provide for the adjustment of such number in accordance with Article 12. SARs granted to any Optionee in any two calendar year period beginning from January 1, 2002 shall in no event pertain to more than 750,000 shares of Common Stock. The
limitations set forth in the preceding sentence shall be subject to adjustment in accordance with Article 12. 
 
7.3 Exercise Price. Each SAR Agreement shall specify the Exercise Price. An SAR Agreement may specify an Exercise Price that
varies in accordance with a predetermined formula while the SAR is outstanding. 
 
7.4 Exercisability and Term. Each SAR Agreement shall specify when all or any installment of the SAR is to become exercisable. The SAR Agreement shall also specify the term of the SAR. An
SAR Agreement may provide for accelerated exercisability in the event of the Optionee’s death, disability or retirement or other events and may provide for expiration prior to the end of its term in the event of the termination of the
Optionee’s Service. SARs may be awarded in combination with Options, and such an Award may provide that the SARs will not be exercisable unless the related Options are forfeited. An SAR may be included in an Incentive Option only at the time of
grant but may be included in a Nonstatutory Option at the time of grant or thereafter. An SAR granted under the Plan may provide that it will be exercisable only in the event of a Corporate Transaction. 
 
7.5 Exercise of SARs. Upon exercise of an SAR,
the Optionee (or any person having the right to exercise the SAR after his or her death) shall receive from the Company (a) shares of Common Stock, (b) cash or (c) a combination of shares of Common Stock and cash, as the Committee shall determine.
The amount of cash and/or the Fair Market Value of shares of Common Stock received upon exercise of SARs shall, in the aggregate, be equal to the amount by which the Fair Market Value (on the date of surrender) of the shares of Common Stock subject
to the SARs exceeds the Exercise Price. If, on the date when an SAR expires, the Exercise Price under such SAR is less than the Fair Market Value on such date but any portion of such SAR has not been exercised or surrendered, then such SAR shall
automatically be deemed to be exercised as of such date with respect to such portion. 
 

5 

7.6 Modification or Assumption of SARs. Within the limitations of the Plan,
the Committee may modify, extend or assume outstanding SARs or may accept the cancellation of outstanding SARs (whether granted by the Company or by another issuer) in return for the grant of new SARs for the same or a different number of shares and
at the same or a different exercise price. The foregoing notwithstanding, no modification of an SAR shall, without the consent of the Optionee, alter or impair his or her rights or obligations under such SAR. 
 
ARTICLE 8. RESTRICTED SHARES. 
 
8.1 Restricted Stock Agreement. Each grant of
Restricted Shares under the Plan shall be evidenced by a Restricted Stock Agreement between the recipient and the Company. Such Restricted Shares shall be subject to all applicable terms of the Plan and may be subject to any other terms that are not
inconsistent with the Plan. The provisions of the various Restricted Stock Agreements entered into under the Plan need not be identical. 
 
8.2 Payment for Awards. Subject to the following sentence, Restricted Shares may be sold or awarded under the Plan for such
consideration as the Committee may determine, including (without limitation) cash, cash equivalents, full-recourse promissory notes, past services and future services. To the extent that an Award consists of newly issued Restricted Shares, the
consideration shall consist exclusively of cash, cash equivalents or past services rendered to the Company (or a Parent or Subsidiary) or, for the amount in excess of the par value of such newly issued Restricted Shares, full-recourse promissory
notes, as the Committee may determine. 
 
8.3
Vesting Conditions. Each Award of Restricted Shares may or may not be subject to vesting. Vesting shall occur, in full or in installments, upon satisfaction of the conditions specified in the Restricted Stock Agreement. A Restricted Stock
Agreement may provide for accelerated vesting in the event of the Participant’s death, disability or retirement or other events. 
 
8.4 Voting and Dividend Rights. The holders of Restricted Shares awarded under the Plan shall have the same voting, dividend
and other rights as the Company’s other stockholders. A Restricted Stock Agreement, however, may require that the holders of Restricted Shares invest any cash dividends received in additional Restricted Shares. Such additional Restricted Shares
shall be subject to the same conditions and restrictions as the Award with respect to which the dividends were paid. 
 
ARTICLE 9. STOCK UNITS. 
 
9.1 Stock Unit Agreement. Each grant of Stock Units under the Plan shall be evidenced by a Stock Unit Agreement between the
recipient and the Company. Such Stock Units shall be subject to all applicable terms of the Plan and may be subject to any other terms that are not inconsistent with the Plan. The provisions of the various Stock Unit Agreements entered into under
the Plan need not be identical. Stock Units may be granted in consideration of a reduction in the recipient’s other compensation. 
 

6 

9.2 Payment for Awards. To the extent that an Award is granted in the form
of Stock Units, no cash consideration shall be required of the Award recipients. 
 
9.3 Vesting Conditions. Each Award of Stock Units may or may not be subject to vesting. Vesting shall occur, in full or in installments, upon satisfaction of the conditions specified in
the Stock Unit Agreement. A Stock Unit Agreement may provide for accelerated vesting in the event of the Participant’s death, disability or retirement or other events. 
 
9.4 Voting and Dividend Rights. The holders of Stock Units shall have no voting rights. Prior
to settlement or forfeiture, any Stock Unit awarded under the Plan may, at the Committee’s discretion, carry with it a right to dividend equivalents. Such right entitles the holder to be credited with an amount equal to all cash dividends paid
on one share of Common Stock while the Stock Unit is outstanding. Dividend equivalents may be converted into additional Stock Units. Settlement of dividend equivalents may be made in the form of cash, in the form of shares of Common Stock, or in a
combination of both. Prior to distribution, any dividend equivalents that are not paid shall be subject to the same conditions and restrictions as the Stock Units to which they attach. 
 
9.5 Form and Time of Settlement of Stock Units. Settlement of vested Stock Units may be made in
the form of (a) cash, (b) shares of Common Stock or (c) any combination of both, as determined by the Committee. The actual number of Stock Units eligible for settlement may be larger or smaller than the number included in the original Award, based
on predetermined performance factors. Methods of converting Stock Units into cash may include (without limitation) a method based on the average Fair Market Value of shares of Common Stock over a series of trading days. Vested Stock Units may be
settled in a lump sum or in installments. The distribution may occur or commence when all vesting conditions applicable to the Stock Units have been satisfied or have lapsed, or it may be deferred to any later date. The amount of a deferred
distribution may be increased by an interest factor or by dividend equivalents. Until an Award of Stock Units is settled, the number of such Stock Units shall be subject to adjustment pursuant to Article 12. 
 
9.6 Death of Recipient. Any Stock Units Award
that becomes payable after the recipient’s death shall be distributed to the recipient’s beneficiary or beneficiaries. Each recipient of a Stock Units Award under the Plan shall designate one or more beneficiaries for this purpose by
filing the prescribed form with the Company. A beneficiary designation may be changed by filing the prescribed form with the Company at any time before the Award recipient’s death. If no beneficiary was designated or if no designated
beneficiary survives the Award recipient, then any Stock Units Award that becomes payable after the recipient’s death shall be distributed to the recipient’s estate. 
 
9.7 Creditors’ Rights. A holder of Stock Units shall have no rights other than those of a general
creditor of the Company. Stock Units represent an unfunded and unsecured obligation of the Company, subject to the terms and conditions of the applicable Stock Unit Agreement. 
 

7 

ARTICLE 10. CORPORATE TRANSACTION. 
 
10.1 Corporate Transaction. The Committee may
determine, at the time of granting an Option, SAR, Restricted Share, or Stock Unit or thereafter, that any such Award shall become exercisable as to all or part of the shares of Common Stock subject to such Award in the event that a Corporate
Transaction occurs with respect to the Company or in the event that the holder of such Award is no longer in Service after a Corporate Transaction. However, in the case of an Incentive Option, the acceleration of exercisability shall not occur
without the Optionee’s written consent, unless acceleration is provided for in the original Option Agreement. In addition, acceleration of exercisability may be required under Section 12.3. 
 
10.2 Award Termination. Any outstanding Award
not (i) accelerated in connection with a Corporate Transaction, (ii) assumed by the successor corporation (or parent thereof) or (iii) replaced with a comparable Award for shares of the capital stock of the successor corporation (or parent
thereof) shall vest in full immediately prior to the Corporate Transaction. Immediately following the consummation of the Corporate Transaction, all outstanding options, stock appreciation rights, and stock units shall terminate and cease to be
outstanding, except to the extent assumed by the successor corporation (or parent thereof). The determination of Award comparability shall be made by the Committee, and its determination shall be final, binding and conclusive. 
 
ARTICLE 11. AUTOMATIC OPTION GRANT PROGRAM.

 
11.1 Option Terms 
 
(a) Grant Dates. Each Outside Director who is first
elected or appointed as a non-employee Board member on or after the Automatic Option Grant Program Effective Date shall automatically be granted, on the date of such initial election or appointment, a Nonstatutory Option to purchase 50,000 shares of
Common Stock. Each Outside Director who is serving as a non–employee Board member on the date of each Annual Stockholders Meeting beginning with the first meeting occurring on or after the Automatic Option Grant Program Effective Date shall be
granted on the date of such meeting a Nonstatutory Option to purchase 15,000 shares of Common Stock. Each Outside Director who is serving as a member of the Audit Committee of the Board on the date of each Annual Stockholders Meeting beginning with
the first meeting occurring on or after the Automatic Option Grant Program Effective Date also shall be granted on the date of such meeting a Nonstatutory Option to purchase 5,000 shares of Common Stock. A non-employee Board member who has
previously been in the employ of the Corporation (or any Parent or Subsidiary) shall not be eligible to receive an initial option grant under the Automatic Option Grant Program, but shall be eligible for annual option grants at each Annual Meeting
of Stockholders following the Board member’s cessation of employment. A non-employee Board member shall not be granted an annual option if he or she received an initial option in that same calendar year. 
 
(b) Exercise Price. 
 
(i) The exercise price per share shall be equal to one
hundred percent (100%) of the Fair Market Value per share of Common Stock on the option grant date. 
 

8 

(ii) The exercise price shall be payable in one or more of the alternative forms
authorized under the Plan. Except to the extent the sale and remittance procedure specified thereunder is utilized, payment of the exercise price for the purchased shares must be made on the Exercise Date. 
 
(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. Each initial option granted shall become exercisable in a series of four (4) annual installments over the Optionee’s period of continued service as a Board member, with the first such
installment to become exercisable upon the Optionee’s completion of one (1) year of Board service measured from the option grant date. Each annual option shall become exercisable in full upon the Optionee’s completion of one (1) year of
Board service measured from the option grant date. 
 
(e) Effect of Termination of Board Service. The following provisions shall govern the exercise of any options held by the Optionee at the time the Optionee ceases to serve as a Board member: 
 
(i) The Optionee (or, in the event of Optionee’s death,
the Optionee’s designated beneficiary) shall have a twelve (12)-month period following the date of such cessation of Board service in which to exercise each such option. 
 
(ii) During the twelve (12)-month exercise period, the option may not be exercised in the aggregate for more
than the number of vested shares of Common Stock for which the option is exercisable at the time of the Optionee’s cessation of Board service. 
 
(iii) Should the Optionee cease to serve as a Board member by reason of death or Permanent Disability, then all shares at the time
subject to the option shall immediately vest and become exercisable so that such option may, during the twelve (12)-month exercise period following such cessation of Board service, be exercised for all or any portion of such shares as fully-vested
shares of Common Stock. 
 
(iv) In no event shall
the option remain exercisable after the expiration of the option term. Upon the expiration of the twelve (12)-month exercise period or (if earlier) upon the expiration of the option term, the option shall terminate and cease to be outstanding for
any vested shares for which the option has not been exercised. However, the option shall, immediately upon the Optionee’s cessation of Board service, terminate and cease to be outstanding to the extent it is not exercisable for vested shares on
the date of such cessation of Board service. 
 
11.2 Corporate Transaction 
 
(a) In the event of any Corporate Transaction, each outstanding Automatic Option Grant shall automatically become exercisable in full so that each such automatic option shall, immediately prior to the effective date of the Corporate
Transaction, become fully exercisable for all of the shares of Common Stock at the time subject to such 
 

9 

 
option and may be exercised
for all or any portion of such shares as fully-vested shares. Immediately following the consummation of the Corporate Transaction, each automatic option grant shall terminate and cease to be outstanding, except to the extent assumed by the successor
corporation (or parent thereof). 
 
(b) The grant
of options under the Automatic Option Grant Program 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. 
 
11.3 Remaining Terms 
 
The
remaining terms of each option granted under the Automatic Option Grant Program shall be the same as the terms in effect for option grants made under the Plan. 
 
ARTICLE 12. PROTECTION AGAINST DILUTION. 
 
12.1 Adjustments. In the event of a subdivision of the outstanding shares of Common Stock, a declaration of a dividend payable in
shares of Common Stock or a combination or consolidation of the outstanding shares of Common Stock (by reclassification or otherwise) into a lesser number of shares of Common Stock, corresponding adjustments shall automatically be made in each of
the following: 
 
(a) The number of Options, SARs,
Restricted Shares and Stock Units available for future Awards under Article 3; 
 
(b) The limitations set forth in Sections 5.2 and 7.2; 
 
(c) The number of shares of Common Stock covered by each outstanding Option and SAR and the number of shares of Common Stock to be
covered by each automatic Option to be granted under Article 11; 
 
(d) The Exercise Price under each outstanding Option and SAR; or 
 
(e) The number of Stock Units included in any prior Award that has not yet been settled. 
 
In the event of a declaration of an extraordinary dividend payable in a form other than shares of Common Stock in an amount that has a material effect on
the price of shares of Common Stock, a recapitalization, a spin-off or a similar occurrence, the Committee shall make such adjustments as it, in its sole discretion, deems appropriate in one or more of the foregoing. Except as provided in this
Article 12, a Participant shall have no rights by reason of any issuance by the Company of stock of any class or securities convertible into stock of any class, any subdivision or consolidation of shares of stock of any class, the payment of any
stock dividend or any other increase or decrease in the number of shares of stock of any class. 
 

10 

 
12.2
Dissolution or Liquidation. To the extent not previously exercised or settled, Options, SARs and Stock Units shall terminate immediately prior to the dissolution or liquidation of the Company. 
 
12.3 Reorganizations. In the event that the Company is
a party to a merger or other reorganization, outstanding Awards shall be subject to the agreement of merger or reorganization. Such agreement shall provide for (a) the continuation of the outstanding Awards by the Company, if the Company is a
surviving corporation, (b) the assumption of the outstanding Awards by the surviving corporation or its parent or subsidiary, (c) the substitution by the surviving corporation or its parent or subsidiary of its own awards for the outstanding Awards,
(d) full exercisability or vesting and accelerated expiration of the outstanding Awards or (e) settlement of the full value of the outstanding Awards in cash or cash equivalents followed by cancellation of such Awards. 
 
ARTICLE 13. DEFERRAL OF AWARDS. 
 
The Committee (in its sole discretion) may permit or require a
Participant to: 
 
(a) Have cash that otherwise
would be paid to such Participant as a result of the exercise of an SAR or the settlement of Stock Units credited to a deferred compensation account established for such Participant by the Committee as an entry on the Company’s books;

 
(b) Have shares of Common Stock that otherwise
would be delivered to such Participant as a result of the exercise of an Option or SAR converted into an equal number of Stock Units; or 
 
(c) Have shares of Common Stock that otherwise would be delivered to such Participant as a result of the exercise of an Option or SAR or
the settlement of Stock Units converted into amounts credited to a deferred compensation account established for such Participant by the Committee as an entry on the Company’s books. Such amounts shall be determined by reference to the Fair
Market Value of such shares of Common Stock as of the date when they otherwise would have been delivered to such Participant. 
 
A deferred compensation account established under this Article 13 may be credited with interest or other forms of investment return, as determined by the
Committee. A Participant for whom such an account is established shall have no rights other than those of a general creditor of the Company. Such an account shall represent an unfunded and unsecured obligation of the Company and shall be subject to
the terms and conditions of the applicable agreement between such Participant and the Company. If the deferral or conversion of Awards is permitted or required, the Committee (in its sole discretion) may establish rules, procedures and forms
pertaining to such Awards, including (without limitation) the settlement of deferred compensation accounts established under this Article 13. 
 
ARTICLE 14. AWARDS UNDER OTHER PLANS. 
 
The Company may grant awards under other plans or programs. Such awards may be settled in the form of shares of Common Stock issued under
this Plan. Such shares of 
 

11 

 
Common Stock shall be treated
for all purposes under the Plan like shares of Common Stock issued in settlement of Stock Units and shall, when issued, reduce the number of shares of Common Stock available under Article 3. 
 
ARTICLE 15. PAYMENT OF DIRECTOR’S FEES IN SECURITIES.

 
15.1 Effective Date. No provision of
this Article 15 shall be effective unless and until the Board has determined to implement such provision. 
 
15.2 Elections to Receive Nonstatutory Options, Restricted Shares or Stock Units. An Outside Director may elect to receive his or
her annual retainer payments and/or meeting fees from the Company in the form of cash, Nonstatutory Options, Restricted Shares or Stock Units, or a combination thereof, as determined by the Board. Such Nonstatutory Options, Restricted Shares and
Stock Units shall be issued under the Plan. An election under this Article 15 shall be filed with the Company on the prescribed form. 
 
15.3 Number and Terms of Nonstatutory Options, Restricted Shares or Stock Units. The number of Nonstatutory Options, Restricted
Shares or Stock Units to be granted to Outside Directors in lieu of annual retainers and meeting fees that would otherwise be paid in cash shall be calculated in a manner determined by the Board. The terms of such Nonstatutory Options, Restricted
Shares or Stock Units shall also be determined by the Board. 
 
ARTICLE 16. LIMITATION ON RIGHTS. 
 
16.1 Retention Rights. Neither the Plan nor any Award granted under the Plan shall be deemed to give any individual a right to remain an Employee, Outside Director or Consultant. The Company and its Parents, Subsidiaries and
Affiliates reserve the right to terminate the Service of any Employee, Outside Director or Consultant at any time, with or without cause, subject to applicable laws, the Company’s certificate of incorporation and by-laws and a written
employment agreement (if any). 
 
16.2
Stockholders’ Rights. A Participant shall have no dividend rights, voting rights or other rights as a stockholder with respect to any shares of Common Stock covered by his or her Award prior to the time when a stock certificate for
such shares of Common Stock is issued or, if applicable, the time when he or she becomes entitled to receive such shares of Common Stock by filing any required notice of exercise and paying any required Exercise Price. No adjustment shall be made
for cash dividends or other rights for which the record date is prior to such time, except as expressly provided in the Plan. 
 
16.3 Regulatory Requirements. Any other provision of the Plan notwithstanding, the obligation of the Company to issue shares of
Common Stock under the Plan shall be subject to all applicable laws, rules and regulations and such approval by any regulatory body as may be required. The Company reserves the right to restrict, in whole or in part, the delivery of shares of Common
Stock pursuant to any Award prior to the satisfaction of all legal requirements relating to the issuance of such shares of Common Stock, to their registration, qualification or listing or to an exemption from registration, qualification or listing.

 

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ARTICLE 17.
WITHHOLDING TAXES. 
 
17.1 General. To
the extent required by applicable federal, state, local or foreign law, a Participant or his or her successor shall make arrangements satisfactory to the Company for the satisfaction of any withholding tax obligations that arise in connection with
the Plan. The Company shall not be required to issue any shares of Common Stock or make any cash payment under the Plan until such obligations are satisfied. 
 
17.2 Share Withholding. To the extent that applicable law subjects a Participant to tax withholding obligations, the Committee may
permit such Participant to satisfy all or part of such obligations by having the Company withhold all or a portion of any shares of Common Stock that otherwise would be issued to him or her or by surrendering all or a portion of any shares of Common
Stock that he or she previously acquired. Such shares of Common Stock shall be valued at their Fair Market Value on the date when they are withheld or surrendered. 
 
ARTICLE 18. FUTURE OF THE PLAN. 
 
18.1 Term of the Plan. The Plan, as set forth herein, shall become effective on January 30, 2002. The
Plan shall remain in effect until it is terminated under Section 18.2, except that no Incentive Options shall be granted on or after the 10th anniversary of the later of (a) the date the Board adopted the Plan or (b) the date the Board adopted the most recent increase in the number of shares of Common Stock available under Article 3 that was approved by the
Company’s stockholders. 
 
18.2 Amendment
or Termination. The Board may, at any time and for any reason, amend or terminate the Plan. An amendment of the Plan shall be subject to the approval of the Company’s stockholders only to the extent required by applicable laws, regulations
or rules. No Awards shall be granted under the Plan after the termination thereof. The termination of the Plan, or any amendment thereof, shall not affect any Award previously granted under the Plan. 
 
ARTICLE 19. LIMITATION ON PAYMENTS. 
 
19.1 Scope of Limitation. This Article 19 shall apply
to an Award only if: 
 
(a) The independent
auditors most recently selected by the Board (the “Auditors”) determine that the after-tax value of such Award to the Participant, taking into account the effect of all federal, state and local income taxes, employment taxes and excise
taxes applicable to the Participant (including the excise tax under section 4999 of the Code), will be greater after the application of this Article 19 than it was before the application of this Article 19; or 
 
(b) The Committee, at the time of making an Award under the
Plan or at any time thereafter, specifies in writing that such Award shall be subject to this Article 19 (regardless of the after-tax value of such Award to the Participant). 
 

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If this Article 19 applies to
an Award, it shall supersede any contrary provision of the Plan or of any Award granted under the Plan. 
 
19.2 Basic Rule. In the event that the Auditors determine that any payment or transfer by the Company under the Plan to or for the
benefit of a Participant (a “Payment”) would be nondeductible by the Company for federal income tax purposes because of the provisions concerning “excess parachute payments” in section 280G of the Code, then the aggregate present
value of all Payments shall be reduced (but not below zero) to the Reduced Amount. For purposes of this Article 19, the “Reduced Amount” shall be the amount, expressed as a present value, which maximizes the aggregate present value of the
Payments without causing any Payment to be nondeductible by the Company because of section 280G of the Code. 
 
19.3 Reduction of Payments. If the Auditors determine that any Payment would be nondeductible by the Company because of section
280G of the Code, then the Company shall promptly give the Participant notice to that effect and a copy of the detailed calculation thereof and of the Reduced Amount, and the Participant may then elect, in his or her sole discretion, which and how
much of the Payments shall be eliminated or reduced (as long as after such election the aggregate present value of the Payments equals the Reduced Amount) and shall advise the Company in writing of his or her election within 10 days of receipt of
notice. If no such election is made by the Participant within such 10-day period, then the Company may elect which and how much of the Payments shall be eliminated or reduced (as long as after such election the aggregate present value of the
Payments equals the Reduced Amount) and shall notify the Participant promptly of such election. For purposes of this Article 19, present value shall be determined in accordance with section 280G(d)(4) of the Code. All determinations made by the
Auditors under this Article 19 shall be binding upon the Company and the Participant and shall be made within 60 days of the date when a Payment becomes payable or transferable. As promptly as practicable following such determination and the
elections hereunder, the Company shall pay or transfer to or for the benefit of the Participant such amounts as are then due to him or her under the Plan and shall promptly pay or transfer to or for the benefit of the Participant in the future such
amounts as become due to him or her under the Plan. 
 
19.4 Overpayments and Underpayments. As a result of uncertainty in the application of section 280G of the Code at the time of an initial determination by the Auditors hereunder, it is possible that Payments will have been made
by the Company which should not have been made (an “Overpayment”) or that additional Payments which will not have been made by the Company could have been made (an “Underpayment”), consistent in each case with the calculation of
the Reduced Amount hereunder. In the event that the Auditors, based upon the assertion of a deficiency by the Internal Revenue Service against the Company or the Participant that the Auditors believe has a high probability of success, determine that
an Overpayment has been made, such Overpayment shall be treated for all purposes as a loan to the Participant that he or she shall repay to the Company, together with interest at the applicable federal rate provided in section 7872(f)(2) of the
Code; provided, however, that no amount shall be payable by the Participant to the Company if and to the extent that such payment would not reduce the amount that is subject to taxation under section 4999 of the Code. In the event that the Auditors
determine that an Underpayment has occurred, such Underpayment shall promptly be paid or transferred by the Company to or for the benefit of the Participant, together with interest at the applicable federal rate provided in section 7872(f)(2) of the
Code. 
 

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19.5
Related Corporations. For purposes of this Article 19, the term “Company” shall include affiliated corporations to the extent determined by the Auditors in accordance with section 280G(d)(5) of the Code. 
 
ARTICLE 20. DEFINITIONS. 
 
20.1 “Affiliate” means any entity other than
a Subsidiary, if the Company and/or one or more Subsidiaries own not less than 50% of such entity. 
 
20.2 “Automatic Option Grant Program” means the automatic option grant program in effect under the Plan. 
 
20.3 “Automatic Option Grant Program Effective
Date” means the date the share reserve under the 1996 Stock Option Plan has been exhausted. 
 
20.4 “Award” means any award of an Option, an SAR, a Restricted Share or a Stock Unit under the Plan. 
 
20.5 “Board” means the Company’s Board
of Directors, as constituted from time to time. 
 
20.6 “Code” means the Internal Revenue Code of 1986, as amended. 
 
20.7 “Committee” means a committee of the Board, as described in Article 2. 
 
20.8 “Common Stock” means the common stock of
the Company. 
 
20.9 “Company”
means Netopia, Inc., a Delaware corporation. 
 
20.10 “Consultant” means a consultant or adviser who provides bona fide services to the Company, a Parent, a Subsidiary or an Affiliate as an independent contractor. Service as a Consultant shall be considered
employment for all purposes of the Plan, except as provided in Section 4.1. 
 
20.11 “Corporate Transaction” means: 
 
(a) The consummation of a merger or consolidation of the Company with or into another entity or any other corporate reorganization, if
persons who were not stockholders of the Company immediately prior to such merger, consolidation or other reorganization own immediately after such merger, consolidation or other reorganization 50% or more of the voting power of the outstanding
securities of each of (i) the continuing or surviving entity and (ii) any direct or indirect parent corporation of such continuing or surviving entity; 
 
(b) The sale, transfer or other disposition of all or substantially all of the Company’s assets; 
 
(c) A change in the composition of the Board, as a result of
which fewer than 50% of the incumbent directors are directors who either (i) had been directors of the 
 

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Company on the date 36 months prior to the date of the event that may constitute a Corporate Transaction
(the “original directors”) or (ii) were elected, or nominated for election, to the Board with the affirmative votes of at least a majority of the aggregate of the original directors who were still in office at the time of the election or
nomination and the directors whose election or nomination was previously so approved; or 
 
(d) Any transaction as a result of which any person is the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company
representing at least 50% of the total voting power represented by the Company’s then outstanding voting securities. For purposes of this Paragraph (d), the term “person” shall have the same meaning as when used in sections 13(d) and
14(d) of the Exchange Act but shall exclude (i) a trustee or other fiduciary holding securities under an employee benefit plan of the Company or of a Parent or Subsidiary and (ii) a corporation owned directly or indirectly by the stockholders of the
Company in substantially the same proportions as their ownership of the common stock of the Company. 
 
A transaction shall not constitute a Corporate Transaction if its sole purpose is to change the state of the Company’s incorporation or to create a holding company that will be owned in
substantially the same proportions by the persons who held the Company’s securities immediately before such transaction. 
 
20.12 “Employee” means a common-law employee of the Company, a Parent, a Subsidiary or an Affiliate. 
 
20.13 “Exchange Act” means the
Securities Exchange Act of 1934, as amended. 
 
20.14 “Exercise Date” means the date on which the Company shall have received written notice of the option exercise. 
 
20.15 “Exercise Price,” in the case of an Option, means the amount for which one Common Share may be purchased
upon exercise of such Option, as specified in the applicable Stock Option Agreement. “Exercise Price,” in the case of an SAR, means an amount, as specified in the applicable SAR Agreement, which is subtracted from the Fair Market Value of
one Common Share in determining the amount payable upon exercise of such SAR. 
 
20.16 “Fair Market Value” means the market price of a share of Common Stock, determined by the Committee in good faith on such basis as it deems appropriate. Whenever possible,
the determination of Fair Market Value by the Committee shall be based on the prices reported in The Wall Street Journal. Such determination shall be conclusive and binding on all persons. 
 
20.17 “Incentive Option” means an
incentive stock option described in section 422(b) of the Code. 
 
20.18 “Nonstatutory Option” means a stock option not described in sections 422 or 423 of the Code. 
 

16 

 
20.19
“Option” means an Incentive Option or Nonstatutory Option granted under the Plan and entitling the holder to purchase shares of Common Stock. 
 
20.20 “Option Shares” means the number of shares of Common Stock subject to the
option as specified in the Grant Notice. 
 
20.21 “Optionee” means an individual or estate who holds an Option or SAR. 
 
20.22 “Outside Director” means a member of the Board who is not an Employee. Service as an Outside Director shall
be considered employment for all purposes of the Plan, except as provided in Section 4.1. 
 
20.23 “Parent” means any corporation (other than the Company) in an unbroken chain of corporations ending with the Company, if each of the corporations other than the Company
owns stock possessing 50% or more of the total combined voting power of all classes of stock in one of the other corporations in such chain. A corporation that attains the status of a Parent on a date after the adoption of the Plan shall be
considered a Parent commencing as of such date. 
 
20.24 “Participant” means an individual or estate that holds an Award. 
 
20.25 “Permanent Disability or Permanently Disabled” means the inability of the Optionee to engage in any
substantial gainful activity by reason of any medically determinable physical or mental impairment expected to result in death or to be of continuous duration of twelve (12) months or more. 
 
20.26 “Plan” means this Netopia, Inc.
2002 Equity Incentive Plan, as amended from time to time. 
 
20.27 “Restricted Share” means a Common Share awarded under the Plan. 
 
20.28 “Restricted Stock Agreement” means the agreement between the Company and the recipient of a Restricted Share
that contains the terms, conditions and restrictions pertaining to such Restricted Share. 
 
20.29 “SAR” means a stock appreciation right granted under the Plan. 
 
20.30 “SAR Agreement” means the agreement between the Company and an Optionee that contains the terms, conditions
and restrictions pertaining to his or her SAR. 
 
20.31 “Service” means service as an Employee, Outside Director or Consultant. 
 
20.32 “Stock Option Agreement” means the agreement between the Company and an Optionee that contains the terms,
conditions and restrictions pertaining to his or her Option. 
 
20.33 “Stock Unit” means a bookkeeping entry representing the equivalent of one Common Share, as awarded under the Plan. 
 

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20.34
“Stock Unit Agreement” means the agreement between the Company and the recipient of a Stock Unit that contains the terms, conditions and restrictions pertaining to such Stock Unit. 
 
20.35 “Subsidiary” means any
corporation (other than the Company) in an unbroken chain of corporations beginning with the Company, if each of the corporations other than the last corporation in the unbroken chain owns stock possessing 50% or more of the total combined voting
power of all classes of stock in one of the other corporations in such chain. A corporation that attains the status of a Subsidiary on a date after the adoption of the Plan shall be considered a Subsidiary commencing as of such date. 
 

18

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