Document:

Exhibit 4.2

 

AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT

 

THIS
AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT (this “Agreement”)  is made as of
the 24th day of December 2007, by and among REAL D, a California
corporation (the “Company”), each of the investors listed
on Exhibit A hereto (each an “Investor”
and collectively the “Investors”),  and Michael V. Lewis and
Joshua Greer (each a “Founder”,
and collectively the “Founders”,
and collectively with the Investors, the “Shareholders”).

 

RECITALS

 

WHEREAS, the Company and certain of the Investors (the “Series D
Holders”)  have entered into a Series D
Preferred Stock Purchase Agreement dated as of December 24, 2007 (the “Series D
Agreement”)  pursuant to which the
Company will issue and sell shares of the Series D Preferred Stock of the
Company to certain of such Investors (the “Series D Preferred Stock”,
and together with the Company’s Series A Preferred Stock, Series B
Preferred Stock and Series C Preferred Stock, the “Preferred Stock”);

 

WHEREAS, the other Investors (the “Prior Investors”)  are holders of
outstanding shares of the Company’s Preferred Stock, and such parties have also
been granted certain registration, information and other rights pursuant to an
Investors’ Rights Agreement dated March 7, 2007 by and among the Company,
the Founders and the Prior Investors (the “Prior Agreement”);  and

 

WHEREAS, to induce the Series D Holders to purchase the
shares of Series D Preferred Stock from the Company, and as a condition to
the Series D Holders’ acquisition of the Company’s capital stock, the
Company, the Founders and the Prior Investors now desire to enter into this
Agreement in order to amend, restate and replace their rights and obligations
under the Prior Agreement with the rights and obligations set forth in this
Agreement. Section 3.7
of the Prior Agreement provides that the Prior Agreement may be amended
by the written consent of the Company, the Founders and the Shareholders (other
than the Founders) holding a majority of the then-outstanding Registrable
Securities (other than the Founders’ shares).

 

AGREEMENT

 

NOW, THEREFORE, in consideration of the mutual premises and
covenants set forth herein, the Company, the Investors and the Founders hereby
agree as follows:

 

1.             Registration
Rights. The Company covenants and agrees as follows:

 

1.1          Definitions. For purposes
of this Agreement:

 

(a)          The term “1934 Act”
means the Securities Exchange Act of 1934, as amended.

 

(b)         The term “Act”
means the Securities Act of 1933, as amended.

 

 

(c)           The term “Affiliate”  means a Person that (a) directly, or
indirectly through one or more intermediaries, controls, is controlled by or is
under common control with a specified Person, or (b) is an officer,
director, general partner, trustee or manager of such Person, or of a Person
described in clause (a) of this sentence. A Person shall be “controlled
by”  another
Person if the other possesses, directly or indirectly, power either (1) to
vote 50% or more of the securities having ordinary voting power for the
election of directors of such Person, or (2) to direct or cause the
direction of the management and policies of such Person whether by contract or
otherwise.

 

(d)           The term “Charter”  means the Company’s Third Amended and
Restated Articles of Incorporation, as amended from time to time.

 

(e)           The term “Founders’
Shares”  means
the shares of Common Stock previously issued to the Founders.

 

(f)            The term “Form S-3”  means such form under the Act as in
effect on the date hereof or any registration form under the Act subsequently adopted
by the SEC which permits inclusion or incorporation of substantial information
by reference to other documents filed by the Company with the SEC, or any
successor form thereto.

 

(g)           The term “Holder”  means any person owning Registrable
Securities or any assignee thereof in accordance with Section 1.13  hereof.

 

(h)           The term “Person”  means an individual, a partnership, a
corporation, a limited liability company, an association, a joint stock
company, a trust, a joint venture, an unincorporated organization, or other
entity, or a governmental entity (or any department, agency or political
subdivision thereof).

 

(i)            The term “register,”  “registered”  and “registration”  refer to a registration effected by
preparing and filing a registration statement or similar document in compliance
with the Act, and the declaration or ordering of effectiveness of such
registration statement or document.

 

(j)            The term “Registrable
Securities”  means
(i) the Common Stock issuable or issued upon conversion of all of the
shares of the Series A Preferred Stock of the Company, the Series B
Preferred Stock, the Series C Preferred Stock and the Series D
Preferred Stock of the Company, now owned or hereinafter acquired by each
Investor and held by it or any successor or permitted assignee, (ii) the
Founders’ Shares and (iii) any Common Stock of the Company issued as (or
issuable upon the conversion or exercise of any warrant, right or other
security which is issued as) a dividend or other distribution with respect to,
or in exchange for or in replacement of the shares referenced in (i) or (ii) above,
excluding in all cases, however, any Registrable Securities that have been sold
by a Person in a transaction in which his or her rights under this Section 1  are not assigned or that have been sold
by a Person pursuant to a registration statement under the Act covering such
Registrable Securities that has been declared effective by the SEC or in an
open market transaction under Rule 144 of the Act.

 

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(k)           The term “Registrable
Series C Securities”
means shares of Common Stock issuable or issued upon conversion of
shares of Series C Preferred Stock (or any securities issued as a dividend
or other distribution with respect thereto, or in exchange or replacement
therefor).

 

(l)             The term “Registrable Series D Securities”
means shares of Common Stock issuable or issued upon conversion of
shares of Series D Preferred Stock (or any securities issued as a dividend
or other distribution with respect thereto, or in exchange or replacement
therefor).

 

(m)          The number of
shares of “Registrable Securities then outstanding”  shall be determined by the number of
shares of Common Stock outstanding which are, and the number of shares of
Common Stock issuable pursuant to then exercisable or convertible securities
which are, Registrable Securities.

 

(n)           The term “SEC”  means the Securities and Exchange
Commission.

 

(o)           The term “Shamrock”  means Shamrock Capital Growth Fund II,
L.P., and its Affiliates, successors and permitted assigns.

 

1.2          Request for
Registration.

 

(a)           If the Company
shall receive at any time after the six (6) month anniversary of the
effective date of the first registration statement for a public offering of
securities of the Company (other than a registration statement relating either
to the sale of securities to employees of the Company pursuant to a stock
option, stock purchase or similar plan or to an SEC Rule 145 transaction),
a written request from Shamrock (together with other Holders, if any, as
determined by Shamrock) that the Company file a registration statement under
the Act covering the registration of Registrable Securities having an
anticipated aggregate offering price, net of underwriting discounts and
commissions, in excess of $20,000,000, then the Company shall:

 

(i)            within ten (10) days
of the receipt thereof, give written notice of such request to all Holders; and

 

(ii)           as soon as practicable, use
reasonable best efforts to effect the registration under the Act of all
Registrable Securities which the Holders request to be registered, together
with all or such portion of the Registrable Securities of any Holder or Holders
joining in such request as are specified in a written request received by the
Company, within twenty (20) days of the mailing of such notice by the Company
in accordance with Section 3.5,  subject to the limitations of Section 1.2(b).

 

(b)           If the Holders
initiating the registration request under Section 1.2(a) (“Initiating
Holders”)  intend
to distribute the Registrable Securities covered by their request by means of
an underwriting, they shall so advise the Company as a part of their request
made pursuant to Section 1.2(a),
and the Company shall include such information in the written

 

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notice
referred to in Section 1.2(a).
The underwriter will be selected by the Company and shall be reasonably
acceptable to Shamrock. In such event, the right of any Holder to include his,
her or its Registrable Securities in such registration shall be conditioned
upon such Holder’s participation in such underwriting and the inclusion of such
Holder’s Registrable Securities in the underwriting (unless otherwise mutually
agreed by a majority in interest of the Initiating Holders and such Holder) to
the extent provided herein. All Holders proposing to distribute their
securities through such underwriting shall (together with the Company as
provided in Section 1.4(e))
enter into an underwriting agreement in customary form with the
underwriter or underwriters selected for such underwriting. Notwithstanding any
other provision of this Section 1.2,  if the
underwriter advises the Company in writing that marketing factors require a
limitation of the number of shares to be underwritten, then the Company shall
so advise all Holders of Registrable Securities which would otherwise be
underwritten pursuant hereto, and the number of shares of Registrable
Securities that may be included in the underwriting shall be allocated, first,
among all Holders of Registrable Series C Securities and Registrable Series D
Securities in proportion (as nearly as practicable) to the relative amount of
such shares held by each such Holder, and, thereafter, among all other Holders
in proportion (as nearly as practicable) to the relative amount of Registrable
Securities of the Company requested to be registered by each such Holder; provided, however,
that the number of shares of Registrable Series C Securities and
Registrable Series D Securities to be included in such underwriting shall
not be reduced unless all other securities (including Founders’ Shares) are
first entirely excluded from the underwriting. To facilitate the allocation of
shares in accordance with the above provisions, the Company or the underwriters
may round the number of shares allocated to a Holder to the nearest 100 shares.

 

(c)           Notwithstanding
the foregoing, if the Company shall furnish to Holders requesting a
registration statement pursuant to this Section 1.2,  a certificate
signed by the Chief Executive Officer of the Company stating that in the good
faith judgment of the Board of Directors of the Company, it would be seriously
detrimental to the Company and its shareholders for such registration statement
to be filed and it is therefore essential to defer the filing of such
registration statement, the Company shall have the right to defer taking action
with respect to such filing for a period of not more than 90 days after receipt
of the request of the Initiating Holders; provided, however,
that the Company may not utilize this right more than once in any twelve-month
period.

 

(d)           In addition, the Company
shall not be obligated to effect, or to take any action to effect, any
registration pursuant to this Section 1.2:

 

(i)            After the
Company has effected two (2) registrations requested by Shamrock pursuant
to Section 1.2(a) and such
registrations have been declared or ordered effective; provided, that if
any such request pursuant to this Section 1.2
is subsequently withdrawn in writing by Shamrock, it shall not be
counted against the limitation of requests set forth in this Section 1.2(d)(i);

 

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(ii)           If at the time
of the request to register Registrable Securities the Company gives notice
within 20 days of such request that it intends within ninety (90) days to file
a registration subject to Section 1.3
hereof; or

 

(iii)          During the
period commencing with the date of filing of, and ending on a date one hundred
eighty (180) days after the effective date of, a registration subject to Section 1.3  hereof;
provided, that the Company is actively employing in good faith reasonable best
efforts to cause such registration statement to become effective.

 

1.3          Company
Registration. If  (but without any obligation
to do so) the Company proposes to register (including for this purpose a
registration effected by the Company for shareholders other than the Holders)
any of its stock or other securities under the Act in connection with the
public offering of such securities solely for cash (other than a registration
relating solely to the sale of securities to participants in a Company stock
plan or a registration with respect to any corporate reorganization or other
transaction under Rule 145 of the Securities Act or a registration on any
form that does not include substantially the same information as would be
required to be included in a registration statement covering the sale of the
Registrable Securities or a registration in which the only Common Stock being
registered is Common Stock issuable upon conversion of debt securities which
are also being registered), the Company shall, at such time, promptly give each
Holder written notice of such registration. Upon the written request of each
Holder given within twenty (20) days after mailing of such notice by the
Company in accordance with Section 3.5,  the Company
shall, subject to the provisions of Section 1.8,  use its
reasonable best efforts to cause to be registered under the Act all of the
Registrable Securities that each such Holder has requested to be registered.

 

1.4          Obligations
of the Company. Whenever required under this Section 1  to effect the
registration of any Registrable Securities, the Company shall, as expeditiously
as reasonably possible:

 

(a)           Prepare and
file with the SEC a registration statement with respect to such Registrable
Securities and use its reasonable best efforts to cause such registration
statement to become effective, and, upon the request of the Holders (other than
Founders) holding a majority of the Registrable Securities (other than Founders’
Shares) and registered thereunder, keep such registration statement effective
for up to 180 days or, if earlier, until the Holder or Holders have completed
the distribution related thereto. Notwithstanding any other provision of this
Agreement, the Company may delay the filing or effectiveness of any
registration statement for a period of up to 30 days after the date of a
request for registration pursuant to Section 2 (a) if at the time of
such request the Board of the Company reasonably determines that such
registration and offering would interfere with any material transaction
involving the Company; provided, however, that the Company shall only be
entitled to invoke such right two (2) times during the duration of this
Agreement (and no more than one time during any twelve (12) month period);

 

(b)           Prepare and
file with the SEC such amendments and supplements to such registration
statement and the prospectus used in connection with such registration
statement as may be necessary to comply with the provisions of the Act with
respect to the

 

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disposition
of all securities covered by such registration statement for the period set
forth in Section 1.4(a) above;

 

(c)           Furnish to each
Holder such numbers of copies of a prospectus, including a preliminary
prospectus, in conformity with the requirements of the Act, and such other
documents as it may reasonably request from time to time in order to facilitate
the disposition of Registrable Securities owned by it;

 

(d)           Register and
qualify the securities covered by such registration statement under such other
securities or Blue Sky laws of such jurisdictions as shall be reasonably
requested by the Holders; provided, that the Company shall not
be required in connection therewith or as a condition thereto to qualify to do
business or to file a general consent to service of process in any such states
or jurisdictions, unless the Company is already required to qualify to do
business or subject to service in such jurisdiction and except as may be
required by the Act;

 

(e)           In the event of
any underwritten public offering, enter into and perform its obligations under
an underwriting agreement, in usual and customary form, with the managing underwriter
of such offering. Each Holder participating in such underwriting shall also
enter into and perform its obligations under such an agreement;

 

(f)            Notify each
Holder of Registrable Securities covered by such registration statement at any
time when a prospectus relating thereto is required to be delivered under the
Act of the happening of any event as a result of which the prospectus included
in such registration statement, as then in effect, includes an untrue statement
of a material fact or omits to state a material fact required to be stated
therein or necessary to make the statements therein not misleading in the light
of the circumstances then existing;

 

(g)           Cause all such
Registrable Securities registered pursuant hereunder to be listed on each
securities exchange on which similar securities issued by the Company are then
listed (if any);

 

(h)           Provide a
transfer agent and registrar for all Registrable Securities registered pursuant
hereunder and a CUSIP number for all such Registrable Securities, in each case
not later than the effective date of such registration;

 

(i)            Use its
reasonable best efforts to furnish, at the request of any Holder requesting
registration of Registrable Securities pursuant to this Section 1,  on the date
that such Registrable Securities are delivered to the underwriters for sale in
connection with a registration pursuant to this Section 1,
if such securities are being sold through underwriters, (i) an
opinion, dated as of such date, of the counsel representing the Company for the
purposes of such registration, in form and substance as is customarily given to
underwriters in an underwritten public offering, addressed to the underwriters,
and (ii) a letter dated as of such date, from the independent certified
public accountants of the Company, in form and substance as is customarily
given by independent certified public accountants to underwriters in an
underwritten public offering, addressed to the underwriters; and

 

6

 

(j)            The Company
will cause members of its senior management (including the President and/or
Chief Executive Officer and Chief Financial Officer) to participate on a
reasonable basis in presentations concerning the Company and its securities in
connection with the Company’s efforts to market the Registrable Securities
pursuant to Section 1.2
hereof, including, without limitation, participation in meetings with
potential investors and preparation of all materials for such investors.

 

1.5          Furnish
Information. It shall be a condition precedent to the obligations
of the Company to take any action pursuant to this Section 1  with respect to
Registrable Securities of any selling Holder  that such Holder shall
furnish to the Company such information regarding itself, the Registrable
Securities held by it, and the intended method of disposition of such
securities as shall be required to effect the registration of such Holder’s
Registrable Securities.

 

1.6          Expenses of
Demand Registration. All expenses (other than underwriting
discounts and commissions applicable to shares registered by the selling
Holders, which shall be borne pro rata by all selling Holders) in connection
with registrations, filings or qualifications of Registrable Securities
pursuant to Section 1.2,  including
(without limitation) all registration, filing and qualification fees, printers’
and accounting fees, and the fees and disbursements of one counsel for the
selling Holders selected by Shamrock (which fees and disbursements to counsel
shall not exceed $50,000) shall be borne by the Company; provided, however, that the
Company shall not be required to pay for any expenses of any registration
proceeding begun pursuant to Section 1.2
if the registration request is subsequently withdrawn at the request of
Shamrock (in which case all participating Holders shall bear such expenses pro
rata by such Holders (based on the number of shares requested to be registered
by them), unless Shamrock agrees to forfeit their right to one demand
registration pursuant to Section 1.2(a);  provided, however, that if at the
time of such withdrawal, Shamrock shall have learned of a material adverse
change in the condition or business of the Company from that known to Shamrock
at this time or the time of their request and have withdrawn the request
promptly following discovery or disclosure of such material adverse change (a “Permitted
Withdrawal”),  then the Holders shall not
be required to pay any such expenses and shall not be required to forfeit any
such demand registration right.

 

1.7          Expenses of
Company Registration. All expenses (other than underwriting
discounts and commissions applicable to shares registered by the selling
Holders, which shall be borne pro rata by all selling Holders) incurred in
connection with any registration, filing or qualification of Registrable
Securities pursuant to Section 1.3,
including (without limitation) all registration, filing and
qualification fees, printers and accounting fees and the fees and disbursements
of one counsel for the selling Holders selected by Shamrock (which fees and
disbursements to counsel shall not exceed $50,000) shall be borne by the
Company.

 

1.8          Underwriting
Requirements. In connection with any offering involving an
underwriting of shares of the Company’s capital stock, the Company shall not be
required under Section 1.3
to include any of the Holders’ securities in such underwriting unless
they accept the terms of the underwriting as agreed upon between the Company
and the underwriters

 

7

 

selected
by it. If any Holder disapproves of the terms of any such underwriting, such
Holder may elect to withdraw therefrom by written notice to the Company and the
underwriter, delivered at least fifteen (15) business days prior to the effective
date of the registration statement. If the total amount of securities,
including Registrable Securities, requested by shareholders to be included in
such offering exceeds the amount of securities sold other than by the Company
that the underwriters determine in their sole discretion is compatible with the
success of the offering, then the number of shares to be included in the
underwriting shall be allocated, first, to the Company; second, among all
Holders of Registrable Series C Securities and Registrable Series D
Securities in proportion (as nearly as practicable) to the relative amount of
such shares held by each such Holder; third, among the other Holders in
proportion (as nearly as practicable) to the relative amount of Registrable
Securities of the Company requested to be registered by each such Holder; and
fourth, to any other holder of registrable securities. To facilitate the
allocation of shares in accordance with the above provisions, the Company or
the underwriters may round the number of shares allocated to a Holder to the
nearest 100 shares.

 

1.9          Delay of
Registration. No Holder shall have any right to obtain or seek an injunction restraining or
otherwise delaying any such registration as the result of any controversy that
might arise with respect to the interpretation or implementation of this Section 1.

 

1.10        Indemnification.
In the event any Registrable Securities are included in a registration
statement under this Section 1.

 

(a)           To the extent
permitted by law, the Company will indemnify and hold harmless each Holder, its
partners, officers, directors and shareholders of each Holder, any underwriter
(as defined in the Act) for such Holder and each person, if any, who controls
such Holder or underwriter within the meaning of the Act or the 1934 Act
(collectively, the “Indemnified  Persons”),  against any
losses, claims, damages, or liabilities (joint or several) to which they may
become subject under the Act or the 1934 Act or other federal or state law,
insofar as such losses, claims, damages, or liabilities (or actions in respect
thereof) arise out of or are based upon any of the following statements,
omissions or violations (collectively, a “Violation”):  (i) any
untrue statement or alleged untrue statement of a material fact contained in
such registration statement, including any preliminary prospectus or final
prospectus contained therein or any amendments or supplements thereto, (ii) the
omission or alleged omission to state therein a material fact required to be
stated therein, or necessary to make the statements therein, not misleading, or
(iii) any violation or alleged violation by the Company of the Act, the
1934 Act, any state securities laws, or any rule or regulation promulgated
under the Act, the 1934 Act or any state securities laws, and the Company will
pay to each such Indemnified Person, as incurred, any legal or other expenses
reasonably incurred by them in connection with investigating or defending any
such loss, claim, damage, liability, or action; provided, however,
that the indemnity agreement contained in this Section 1.10(a) shall not apply to (1) amounts
paid in settlement of any such loss, claim, damage, liability, or action, if
such settlement is effected without the consent of the Company (which consent
shall not be unreasonably withheld, delayed or conditioned), (2) any such
loss, claim, damage, liability, or action to the extent that it arises out of
or is based upon a Violation which occurs in reliance upon and in conformity
with written information furnished by such Person under an instrument duly
executed by such Person

 

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expressly
for use in connection with such registration, or (3) any such loss, claim,
damage, liability, or action to the extent that it arises out of or is based
upon the use or delivery by such Holder, underwriter or controlling person of a
prospectus as of the time of such use or delivery, other than the most current
prospectus delivered to such Holder, underwriter or controlling person by the Company.

 

(b)           To the extent
permitted by law, each selling Holder will, if Registrable Securities held by
such Holder are included in the applicable registration, indemnify and hold
harmless the Company, each of its directors, each of its officers who has signed
the registration statement, each person, if any, who controls the Company
within the meaning of the Act, any underwriter, any other shareholder of the Company that is selling securities in such registration and any
controlling person of any such underwriter or such other shareholder, against
any losses, claims, damages, or liabilities joint or several) to which any of
the foregoing persons may become subject, under the Act, the 1934 Act or any
state securities laws, insofar as such losses, claims, damages, or liabilities
(or actions in respect thereto) arise out of or are based upon (i) any
Violation, in each case to the extent (and only to the extent) that such
Violation occurs in reliance upon and in conformity with written information
furnished by such Holder under an instrument duly executed by such Holder
expressly for use in connection with such registration, (ii) the use or
delivery by such Holder of a prospectus as of the time of such use or delivery,
other than the most current prospectus delivered to such Holder by the Company,
and each such Holder will pay any legal or other expenses reasonably incurred
by any such person intended to be indemnified pursuant to this Section 1.10(b),
in connection with investigating or defending any such loss, claim,
damage, liability, or action if it is judicially determined that there was such
violation; provided, however, that the indemnity agreement contained in this Section 1.10(b) shall not apply to amounts paid in
settlement of any such loss, claim, damage, liability or action if such
settlement is effected without the consent of the Holder, which consent shall
not be unreasonably withheld, delayed or conditioned; provided, that, in no
event shall any indemnity under this Section 1.10(b) exceed the net proceeds received by
such Holder from the offering (i.e., net of payment of all expenses incurred by
such Holder, as well as underwriting discounts and commissions paid by such
Holder), except in the case of fraud or intentional misrepresentation by such
Holder.

 

(c)           Promptly after
receipt by an indemnified party under this Section 1.10  of notice of the commencement of any
action (including any governmental action), such indemnified party will, if a
claim in respect thereof is to be made against any indemnifying party under
this Section 1.10,
deliver to the indemnifying party a written notice of the
commencement thereof, and the indemnifying party shall have the right to
participate in, and, to the extent the indemnifying party so desires, jointly
with any other indemnifying party similarly noticed, to assume the defense
thereof with counsel mutually and reasonably satisfactory to the indemnifying
parties; provided, however, that an
indemnified party (together with all other indemnified parties which may be
represented without conflict by one counsel) shall have the right to retain one
separate counsel, with the fees and expenses to be paid by the indemnifying
party, if representation of such indemnified party by the counsel retained by
the indemnifying party would be inappropriate due to actual or potential
differing interests between such indemnified party and any other party
represented by such counsel in such proceeding. The

 

9

 

failure
to deliver written notice to the indemnifying party within a reasonable time of
the commencement of any such action, if prejudicial to its ability to defend
such action, shall relieve such indemnifying party of any liability to the
indemnified party under this Section 1.10
to the extent of such prejudice, but the omission to so deliver written
notice to the indemnifying party will not relieve it of any liability that it
may have to any indemnified party otherwise than under this Section 1.10.

 

(d)           If the
indemnification provided for in this Section 1.10
is held by a court of competent jurisdiction to be unavailable to an
indemnified party with respect to any loss, liability, claim, damage, or
expense referred to therein, then the indemnifying party, in lieu of
indemnifying such indemnified party hereunder, shall contribute to the amount
paid or payable by such indemnified party as a result of such loss, liability,
claim, damage, or expense in such proportion as is appropriate to reflect the
relative fault of the indemnifying party on the one hand and of the indemnified
party on the other in connection with the statements or omissions that resulted
in such loss, liability, claim, damage, or expense, as well as any other
relevant equitable considerations. The relative fault of the indemnifying party
and of the indemnified party shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or
the omission to state a material fact relates to information supplied by the
indemnifying party or by the indemnified party and the parties’ relative
intent, knowledge, access to information, and opportunity to correct or prevent
such statement or omission; provided, that in no
event shall any contribution by a Holder hereunder (when combined with any
indemnification otherwise provided by such Holder under this Section 1.10)  exceed the net proceeds
received by such Holder from the offering (i.e., net of payment of all expenses
incurred by such Holder, as well as underwriting discounts and commissions paid
by such Holder), except in the case of fraud or intentional misrepresentation
by such Holder.

 

(e)           Notwithstanding
the foregoing, to the extent that the provisions on indemnification and
contribution contained in the underwriting agreement entered into in connection
with the underwritten public offering are in conflict with the foregoing
provisions, the provisions in the underwriting agreement shall control. No
indemnifying party, in the defense of any such claim or litigation, shall,
except with the consent of each indemnified party, consent to entry of any
judgment or enter into any settlement that does not include as an unconditional
term thereof the giving by the claimant or plaintiff to such indemnified party
of a release from all liability in respect to such claim or litigation.

 

(f)            The obligations of the
Company and Holders under this Section 1.10
shall survive the completion of any offering of Registrable Securities
in a registration statement under this Section 1,  and otherwise.

 

1.11        Reports
Under Securities Exchange Act of 1934. With a view to making
available to the Holders the benefits of Rule 144 promulgated under the
Act and any other rule or regulation of the SEC that may at any time
permit a Holder to sell securities of the Company to the public without
registration or pursuant to a registration on Form S-3, the Company agrees
to:

 

(a)           make and keep
public information available, as those terms are understood and defined in SEC Rule 144,
at all times beginning ninety (90) days after the

 

10

 

effective
date of the first registration statement filed by the Company for the offering
of its securities to the general public;

 

(b)           take such
action, including the voluntary registration of its Common Stock under Section 12
of the 1934 Act, as is necessary to enable the Holders to utilize Form S-3
for the sale of their Registrable Securities, such action to be taken as soon
as practicable after the end of the fiscal year in which the first registration
statement filed by the Company for the offering of its securities to the
general public is declared effective;

 

(c)           file with the
SEC in a timely manner all reports and other documents required of the Company
under the Act and the 1934 Act; and

 

(d)           furnish to any
Holder, so long as the Holder owns any Registrable Securities, forthwith upon
request (i) a written statement by the Company that it has complied with
the reporting requirements of SEC Rule 144 (at any time after ninety (90)
days after the effective date of the first registration statement filed by the
Company), the Act and the 1934 Act (at any time after it has become subject to
such reporting requirements), or that it qualifies as a registrant whose
securities may be resold pursuant to Form S-3 (at any time after it so
qualifies), (ii) a copy of the most recent or quarterly report of the
Company and such other reports and documents so filed by the Company, and (iii) such
other information as may be reasonably requested in availing any Holder of any rule or
regulation of the SEC which permits the selling of any such securities without
registration.

 

1.12        Form S-3
Registration. In case the Company shall receive from any Holder
or Holders (other than a Founder) a written request or requests that the
Company effect a registration on Form S-3 and any related qualification or
compliance with respect to all or a part of the Registrable Securities owned by
such Holder or Holders, the Company, will:

 

(a)           promptly give
written notice of the proposed registration, and any related qualification or
compliance, to all other Holders; and

 

(b)           as soon as
practicable, effect such registration and all such qualifications and
compliances as may be so requested and as would permit or facilitate the sale
and distribution of all or such portion of such Holder’s or Holders’
Registrable Securities as are specified in such request, together with all or
such portion of the Registrable Securities of any other Holder or Holders
joining in such request as are specified in a written request given within 15
days after receipt of such written notice from the Company; provided, however,
that the Company shall not be obligated to effect any such registration,
qualification or compliance, pursuant to this Section 1.12:  (1) if Form S-3
is not available for such offering by the Holders; (2) if the Holders,
together with the holders of any other securities of the Company entitled to
inclusion in such registration, propose to sell Registrable Securities and such
other securities (if any) at an aggregate price to the public (net of any
underwriters’ discounts or commissions) of less than $2,000,000; (3) if
the Company shall furnish to the Holders a certificate signed by the Chief
Executive Officer of the Company stating that, in the good faith judgment of
the Board of Directors of the Company, it would be seriously detrimental to the
Company and its shareholders for such Form S-3 Registration to be effected
at such time, in which event the Company shall

 

11

 

have
the right to defer the filing of the Form S-3 registration statement for a
period of not more than 90 days after receipt of the request of the Holder or
Holders under this Section 1.12;  provided,
however, that the Company shall not utilize this right more than once in any
twelve (12) month period; (4) if the Company has, within the twelve (12)
month period preceding the date of such request, already effected two
registrations on Form S-3 for the Holders pursuant to this Section 1.12;
or (5) in any particular jurisdiction in which the Company would
be required to qualify to do business or to execute a general consent to
service of process in effecting such registration, qualification or compliance.

 

(c)           Subject to the
foregoing, the Company shall file a registration statement covering the
Registrable Securities and other securities so requested to be registered as
soon as practicable after receipt of the request or requests of the Holders.
All expenses (other than underwriting discounts and commissions, if any,
applicable to shares sold by the selling Holders, which shall be borne pro rata
by all selling Holders) incurred in connection with registrations, filings or
qualifications of Registrable Securities pursuant to this Section 1.12,
including (without limitation), all registration, filing and
qualification fees, printer’s and accounting fees, and the reasonable fees and
disbursements of one counsel for the selling Holders selected by Shamrock (if
Shamrock is a selling Holder) or by such Holders (if Shamrock is not a selling
Holder) (which fees and disbursements to counsel shall not exceed $50,000)
shall be borne by the Company. Registrations effected pursuant to this Section 1.12
shall not be counted as demands for registration or registrations effected
pursuant to Section 1.2
or Section 1.3,  respectively.

 

1.13        Assignment
of Registration Rights. The rights to cause the Company to register
Registrable Securities pursuant to this Section 1
may be assigned (but only with all related obligations) by a Holder to
a transferee or assignee of such securities who (together with any Affiliates)
after such assignment or transfer, holds at least five hundred thousand
(500,000) shares of Registrable Securities (subject to appropriate adjustment
for future stock splits, stock dividends, combinations, recapitalizations, and
similar events); provided that (a) the Company is, within a
reasonable time after such transfer (in any event within 30 days after such
transfer), furnished with written notice of the name and address of such
transferee or assignee and the securities with respect to which such
registration rights are being assigned; (b) such transferee or assignee
agrees in writing to be bound by and subject to the terms and conditions of
this Agreement, including without limitation the provisions of Section 1.15  below; and (c) such
assignment shall be effective only if, immediately following such transfer, the
further disposition of such securities by the transferee or assignee is
restricted under the Act.

 

1.14        Limitations
on Subsequent Registration Rights. From and after the date of
this Agreement, the Company shall not, without the prior written consent of
Shamrock, enter into any agreement with any holder or prospective holder of any
securities of the Company which would allow such holder or prospective holder
to (a) include such securities in any registration filed under Section 1.2,
Section 1.3  or Section 1.12  hereof, unless
under the terms of such agreement, such holder or prospective holder may
include such securities in any such registration only to the extent that the
inclusion of his securities will not reduce the amount of the Registrable
Securities of the Holders which is included, or (b) make a demand
registration.

 

12

 

1.15                        “Market Stand-Off Agreement.”
Each Holder hereby agrees
that, during the period of duration specified by the underwriter of Common
Stock or other securities of the Company following the effective date of a
registration statement of the Company filed under the Act relating to a public
offering of the Company’s Common Stock, it shall not, to the extent requested
in writing by the Company and such underwriter, directly or indirectly sell,
offer to sell, contract to sell (including, without limitation, any short
sale), grant any option to purchase or otherwise transfer or dispose of (other
than to donees who agree to be similarly bound) any securities of the Company
held by it at any time during such period, except Common Stock included in such
registration; provided, however, that such market stand-off time period shall
not exceed 180 days in connection with the initial public offering and shall
not exceed 90 days in connection with any other such public offering. The
obligations described in this Section 1.15  shall
apply only if all officers, directors and holders of not less than one percent
(1%) of the fully-diluted capital stock of the Company enter into similar
agreements. Furthermore, if the restrictions under this Section 1.15  is
waived with respect to any party, then it is waived with respect to all parties

 

In
order to enforce the foregoing covenant, the Company may impose stop-transfer
instructions with respect to the Registrable Securities of each Holder (and the
shares or securities of every other person subject to the foregoing
restriction) until the end of such period.

 

Notwithstanding
the foregoing, the obligations described in this Section 1.15  shall not
apply to a registration relating solely to employee benefit plans on Form S-1
or Form S-8 or similar forms which may be promulgated in the future, or a
registration relating solely to a Commission Rule 145 transaction on Form S-4
or similar forms which may be promulgated in the future.

 

1.16                        Termination of Registration
Rights.

 

(a)                                  No Holder shall be entitled to exercise any
right provided for in this Section 1  after
5 years following the consummation of the sale of securities pursuant to a
registration statement filed by the Company under the Act in connection with
the initial firm commitment underwritten offering of its Common Stock to the
general public.

 

(b)                                 In addition, the right of any Holder to
request inclusion in any registration pursuant to this Agreement shall
terminate on (i) the closing of the first sale of securities of the
Company pursuant to a registration statement filed by the Company under the Act
if all shares of Registrable Securities held or entitled to be held upon
conversion by such Holder may then immediately be sold under Rule 144
during any 90-day period, or (ii) on such date after the closing of such
first sale of securities as all shares of Registrable Securities held or
entitled to be held upon conversion by such Holder may then immediately be sold
under Rule 144 during any 90-day period, if, in either case, the Company
is then subject to the provisions of the 1934 Act, and the Company’s Common
Stock is listed on a national exchange or Nasdaq.

 

2.                                      Covenants of the Company.

 

13

 

 

2.1                               Delivery of
Financial Statements. The Company shall deliver to each (a) Holder
(other than a Founder) who (together with any Affiliates) then holds at least
1,500,000 shares of Registrable Securities (subject to appropriate adjustment
for future stock splits, stock dividends, combinations, recapitalizations, and
similar events) (each, a “Significant Investor”):

 

(a)                                  as soon as
practicable, but in any event within 120 days after the end of each fiscal year
of the Company beginning with the fiscal year ending March 31, 2007, an
income statement for such fiscal year, a balance sheet of the Company and
statements of shareholder’s equity and cash flows, for and as of the end of
such year, including a comparison to the budget and prior year performance, and
a schedule as to the sources and applications of funds for such year, such
year-end financial reports to be in reasonable detail, prepared in accordance
with generally accepted accounting principles (“GAAP”), and
audited and certified by independent public accountants of nationally
recognized standing selected by the Company;

 

(b)                                 as soon as
practicable, but in any event within 45 days after the end of each fiscal
quarter beginning with the fiscal quarter ending June 30, 2007, an
unaudited income statement, an unaudited statements of shareholder’s equity and
cash flows, and an unaudited balance sheet for and as of the end of such
quarter, including a comparison to the budget and prior year performance for
the same periods and for the year to date period, prepared in accordance with
generally accepted accounting principles consistently applied, with the
exception that no notes need be attached to such statements and year-end audit
adjustments may not have been made, and attaching thereto a certificate of the
Chief Financial Officer of the Company as to the foregoing.

 

(c)                                  as soon as
practicable, but in any event thirty (30) days prior to the end of each fiscal
year, a budget for the next fiscal year, including balance sheets and sources
and applications of funds statements, revenue projections, profit and loss
projections, cash flow projections, and capital expenditures, all on a
quarterly basis, and, as soon as prepared, any other budgets or revised budgets
prepared by the Company.

 

In addition, the Company will allow each Significant Investor to visit
and inspect any of the properties of the Company and its subsidiaries (upon
reasonable advance notice) and will deliver or provide to each Significant
Investor, with reasonable promptness, any information and data, including
access to books, records, officers and accountants, with respect to the Company
and its subsidiaries as such Significant Investors may from time to time
reasonably request; provided, however, that the Company shall not be obligated
to provide any information that it considers in good faith to be a trade secret
or to contain confidential or classified information unless such Significant
Investor enters into a confidentiality agreement with the Company.

 

2.2                               Termination
of Covenants. The covenants set forth in Section 2.1(a)  and Section 2.1(b) and in Section 2.4
through Section 2.6  shall terminate and be of no further
force or effect when the sale of securities pursuant to a registration
statement filed by the Company under the Act in connection with the initial
firm commitment underwritten offering of its securities to the general public
is consummated, or when the Company first becomes subject to the periodic
reporting requirements of Sections 12(g) or 15(d) of the 1934 Act,
whichever event shall first occur.

 

14

 

2.3                               Reservation of Stock. The Company will at all times reserve and
keep available, solely for issuance and delivery upon the conversion of the
Preferred Stock, all Common Stock issuable from time to time upon such
conversion.

 

2.4                               Stock Vesting. Unless otherwise approved by the Company’s
Board of Directors (including the Series C Director, as such term is
defined in the Charter), all stock, stock options and other stock equivalents
issued after the date of this Agreement to employees, directors and consultants
and other service providers shall be subject to vesting as follows: (a) twenty-five
percent (25%) of such stock shall vest at the end of the first year following
the date of issuance, and (b) seventy-five percent (75%) of such stock
shall vest monthly over the remaining three (3) years. With respect to any
shares of stock purchased by any such person, the Company’s repurchase option
shall provide that, upon such person’s termination of employment or service
with the Company, with or without cause, the Company or its assignee (to the
extent permissible under applicable securities laws and other laws) shall have
the option to purchase at cost any unvested shares of stock then held by such
person. The Company shall retain a “right of first refusal” on employee
transfers until the Company’s initial public offering and shall have the right
to repurchase unvested shares at cost upon termination of employment of a
holder of restricted stock. The Company will cause each person now or hereafter
employed by it or by any subsidiary (or engaged by the Company or any
subsidiary as a consultant/independent contractor) with access to confidential
information and/or trade secrets to enter into a nondisclosure and proprietary
rights assignment agreement.

 

2.5                               Director’s Liability and
Indemnification. The Charter
and Bylaws shall provide (a) for elimination of the liability of directors
to the maximum permitted by law, and (b) for indemnification of directors
for acts on behalf of the Company to the maximum extent permitted by law. The
Company will maintain its director and officer’s liability insurance for the
indemnification of all of the directors on the Board of Directors. At the
request of each Series C Director (as defined in the Charter), the Company
shall execute and deliver to such director an indemnity agreement in
substantially the form of Exhibit H
attached to the Series C Preferred Stock Purchase Agreement dated as of February 22,
2007.

 

2.6                               Committees. The Board of Directors of the Company shall
appoint a Compensation Committee to consist of directors, the majority of whom
are not officers or employees of the Company, to approve compensation packages
for key managers of the Company, including the President, and shall appoint an
Audit Committee, and one of the Series C Directors (as such term is
defined in the Charter) shall be permitted to be a member of each such
committees as well as each other committee of the Board of Directors of the
Company.

 

2.7                               Director Expenses. All reasonable expenses incurred by the
directors of the Company in attending or otherwise participating in Board of
Director and committee meetings and performing duties requested by the Company
will be reimbursed by the Company.

 

2.8                               Successor Indemnification. If the Company or any of its successors or assignees
(i) consolidates or merges into any other person and is not the continuing
or surviving corporation or entity of such consolidation or merger, or (ii) transfers
or conveys all or substantially all of its properties and assets to any person,
then, and in each such case, to the

 

15

 

extent
necessary, proper provision shall be made so that the successors and assignees
of the Company assume the obligations of the Company with respect to
indemnification of members of the Board of Directors as in effect immediately
before such transaction, whether such obligations are contained in the
Company’s Bylaws, the Charter, or elsewhere, as the case may be.

 

2.9                               Monitoring Fee. The Company shall pay to Shamrock an annual monitoring
fee (“Annual
Monitoring Fee”) of
$350,000, payable semi-annually (and adjusted pro rata for any partial period)
in arrears, until the QIPO or a Deemed Liquidation (each as defined in the
Charter).

 

3.                                      Miscellaneous.

 

3.1                               Successors and Assigns. Except as otherwise provided herein, the
terms and conditions of this Agreement shall inure to the benefit of and be
binding upon the respective successors and assigns of the parties (including
transferees of any shares of Registrable Securities). Nothing in this
Agreement, express or implied, is intended to confer upon any party other than
the parties hereto or their respective successors and assigns any rights,
remedies, obligations, or liabilities under or by reason of this Agreement,
except as expressly provided in this Agreement (including Section 1.10,  which
is intended to provide benefits to third parties and is intended to be
enforceable against the Company by such third parties).

 

3.2                               Governing Law; Jurisdiction;
Service of Process. This
Agreement is to be construed in accordance with and governed by the internal
laws of the State of California without giving effect to the principles of
conflicts of law of such state. Any action or proceeding seeking to enforce any
provision of, or based on any right arising out of, this Agreement may be
brought against any of the parties in the courts of the State of California,
County of Los Angeles, or, if it has or can acquire jurisdiction, in the United
States District Court for the Southern District of California, and each of the
parties consents to the jurisdiction of such courts (and of the appropriate
appellate courts) in any such action or proceeding and waives any objection to
venue laid therein. Process in any action or proceedings referred to in the
preceding sentence may be served on a party to this Agreement at the address
for notices for such party set forth on the signature pages hereto.

 

3.3                               Counterparts; Facsimile
Signatures. This Agreement
may be executed in two or more counterparts, and by facsimile signatures, each
of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.

 

3.4                               Titles and Subtitles;
Interpretation. The titles
and subtitles used in this Agreement are used for convenience only and are not
to be considered in construing or interpreting this Agreement. The express
terms of this Agreement control and supersede any course of performance or
trade custom or usage inconsistent with any of its terms. Unless the express
context otherwise requires: (a) “or” is not exclusive; (b) words in
the singular include the plural, and words in the plural include the singular; (c) “herein,”
“hereof,” and other similar words refer to this Agreement as a whole and not to
any particular section, subsection, paragraph, clause, or other subdivision; (d) “including”
will be deemed to be followed by “, but

 

16

 

not
limited to,”; (e) the masculine, feminine, and neuter genders will each be
deemed to include the others; and (f) “shall,” “will,” or “agrees” are
mandatory, and “may” is permissive.

 

3.5                               Notices. Unless otherwise provided, any notice
required or permitted under this Agreement shall be given in writing and shall
be deemed effectively given (a) upon personal delivery to the party to be
notified, (b) upon receipt after deposit with an overnight delivery
service, (c) upon receipt after deposit with the United States Post
Office, by certified mail, return receipt request, postage prepaid, or (d) on
the day of transmission by facsimile (fax) to such party (with confirmation of
delivery) during regular business hours, with transmission confirmed within
three (3) days by notice delivered in accordance with any of subparagraphs
(a), (b) or (c) above, in each case addressed to the party to be
notified at the address and/or facsimile number indicated for such party on Exhibit A attached hereto or at such other address
and/or facsimile number as such party may designate by ten (10) days’
advanced written notice to the other parties, and in each case with copies to
such other party or parties indicated for such party on Exhibit A attached hereto, in the same manner as
described in this Section 3.5  for
such party.

 

3.6                               Expenses. If any action at law or in equity is
necessary to enforce or interpret the terms of this Agreement, the prevailing
party shall be entitled to reasonable attorneys’ fees, costs and necessary
disbursements in addition to any other relief to which such party may be entitled.

 

3.7                               Termination, Amendments and
Waivers. Any term, condition
or provision of this Agreement may be amended, and the observance thereof may
be waived (either generally or in a particular instance, and either
retroactively or prospectively), only with the written consent of (a) the
Company, (b) the Founders, and (c) the Holders (other than Founders)
of a majority of the then-outstanding Registrable Securities (other than
Founders’ Shares) so long as such majority includes Shamrock; provided, that
any amendment that expressly treats any Shareholder in a materially adverse
manner that is different than any other similarly situated Shareholder will
require the separate approval of such Shareholder. The Company shall give
prompt notice of any amendment or termination hereof or waiver hereunder to any
party to this Agreement that did not consent in writing to such amendment,
termination or waiver. Any amendment, termination or waiver effected in
accordance with this Section 3.7 shall be binding
upon each holder of any Registrable Securities then outstanding, each future
holder of all such Registrable Securities, and the Company, regardless of
whether any such party has consented thereto. No waivers of or exceptions to
any term, condition or provision of this Agreement, in any one or more
instances, shall be deemed to be or construed as a further or continuing waiver
of any such term, condition or provision.

 

3.8                               Severability. If one or more provisions of this Agreement
are held to be unenforceable under applicable law, such provision shall be
excluded from this Agreement, and the balance of the Agreement shall be
interpreted as if such provision were so excluded and shall be enforceable in
accordance with its terms.

 

3.9                               Aggregation of Stock. All shares of Preferred Stock held or
acquired by any Affiliates shall be aggregated together for the purpose of
determining the availability of any rights under this Agreement; provided, that
all such Affiliated Persons shall have a single

 

17

 

attorney-in-fact
for the purposes of exercising any rights, receiving notices or taking any
action under this Agreement.

 

3.10                        Entire Agreement. This Agreement (including the Exhibits
hereto, if any) and the documents referred to herein constitutes the full and
entire understanding and agreement among the parties with regard to the
subjects hereof and thereof, and supersedes in its entirety the Prior Agreement
and any other prior understandings, agreements or representations by or among the
parties hereto, written or oral, with regard to the subjects hereof and thereof.

 

3.11                        Further Assurances. Each party agrees to cooperate fully with
the other parties, to take such actions, to execute such further instruments,
documents and agreements, and to give such further written assurances, as may
be reasonably requested by any other party to evidence and reflect the
transactions described herein and contemplated hereby, and to carry into effect
the intents and purposes of this Agreement.

 

3.12                             Specific Performance. The Company recognizes and agrees that a
Shareholder shall not have an adequate remedy if the Company fails to comply
with the provisions of this Agreement, and that damages will not be readily
ascertainable, and the Company expressly agrees that, in the event of such
failure, any Shareholder shall be entitled to seek specific performance of the
Company’s obligations under this Agreement hereof, and the Company will not
oppose an application seeking such specific performance based on there being an
adequate remedy at law.

 

3.13                             Rights Cumulative. Each and all of the various rights, powers
and remedies of the parties hereto will be considered to be cumulative with and
in addition to any other rights, powers and remedies which such parties may
have at law or in equity in the event of the breach of any of the terms of this
Agreement. The exercise or partial exercise of any right, power or remedy will
neither constitute the exclusive election thereof nor the waiver of any other
right, power or remedy available to such party.

 

3.14                             Spousal Consent. Each Investor or Founder, to the extent such
party is married, shall deliver to the Company a Consent of Spouse in the form
of Exhibit B attached hereto duly executed by such
Shareholder’s spouse.

 

[REMAINDER OF THE PAGE INTENTIONALLY LEFT BLANK]

 

18

 

IN WITNESS WHEREOF,  the undersigned parties hereto have executed
this Agreement as of the date first written above.

 

	
  THE
  COMPANY:

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ Drew
  Skarupa

  	
   

  
	
   

  	
   

  
	
  Name:
  Drew Skarupa

  	
   

  
	
   

  	
   

  
	
  Title:
  Chief Financial Officer

  	
   

  
	
  Address:
  100 N. Crescent Drive, Suite 120

  Beverly Hills, CA 90210

  	
   

  
	
  Fax:
  (310) 385-4001

  	
   

  
	
  Phone:
  (310) 385-4000

  	
   

  
	
   

  	
   

  
	
  FOUNDERS:

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/
  Michael Lewis

  	
   

  
	
   

  	
   

  
	
  Michael Lewis

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ Joshua
  Greer

  	
   

  
	
   

  	
   

  
	
  Joshua Greer

  	
   

  

 

[Signature Page To Investor Rights Agreement]

 

 

IN WITNESS
WHEREOF,  the
undersigned parties hereto have executed this Agreement as of the date first
written above.

 

	
  INVESTORS:

  	
   

  
	
   

  	
   

  
	
  PEQUOT SCOUT FUND, L.P.

  	
   

  
	
   

  	
   

  
	
  By:

  	
  Pequot Capital Management, Inc.

  	
   

  
	
   

  	
  as Investment Manager

  	
   

  
	
   

  	
   

  
	
  /s/ Daniel Fishbane

  	
   

  
	
  Name:

  	
  Daniel Fishbane

  	
   

  
	
  Title:

  	
  Treasurer

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  PEQUOT MARINER MASTER FUND, L.P.

  	
   

  
	
   

  	
   

  
	
  By:

  	
  Pequot Capital Management, Inc.

  	
   

  
	
   

  	
  as Investment Advisor

  	
   

  
	
   

  	
   

  
	
  /s/ Daniel Fishbane

  	
   

  
	
  Name:

  	
  Daniel Fishbane

  	
   

  
	
  Title:

  	
  Treasurer

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  PEQUOT NAVIGATOR OFFSHORE FUND, INC.

  	
   

  
	
   

  	
   

  
	
  By:

  	
  Pequot Capital Management, Inc.

  	
   

  
	
   

  	
  as Investment Advisor

  	
   

  
	
   

  	
   

  
	
  /s/ Daniel Fishbane

  	
   

  
	
  Name:

  	
  Daniel Fishbane

  	
   

  
	
  Title:

  	
  Treasurer

  	
   

  

 

[Signature Page To Investor Rights Agreement]

 

 

PEQUOT
DIVERSIFIED MASTER FUND, LTD.

 

	
  By:

  	
  Pequot
  Capital Management, Inc.

  
	
   

  	
  as
  Investment Advisor

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/ Daniel Fishbane

  	
   

  
	
  Name:

  	
  Daniel Fishbane

  
	
  Title:

  	
  Treasurer

  
			

 

 

PEQUOT
ENDOWMENT FUND, L.P.

 

	
  By:

  	
  Pequot
  Capital Management, Inc.

  
	
   

  	
  as
  Investment Manager

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/ Daniel Fishbane

  	
   

  
	
  Name:

  	
  Daniel Fishbane

  
	
  Title:

  	
  Treasurer

  
			

 

 

PEQUOT
CORE GLOBAL OFFSHORE FUND, INC.

 

	
  By:

  	
  Pequot
  Capital Management, Inc.

  
	
   

  	
  as
  Investment Advisor

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/ Daniel Fishbane

  	
   

  
	
  Name:

  	
  Daniel Fishbane

  
	
  Title:

  	
  Treasurer

  
			

 

 

PEQUOT
CORE INVESTORS FUND, INC.

 

	
  By:

  	
  Pequot
  Capital Management, Inc.

  
	
   

  	
  as
  Investment Advisor

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/ Daniel Fishbane

  	
   

  
	
  Name:

  	
  Daniel Fishbane

  
	
  Title:

  	
  Treasurer

  
			

 

[Signature Page To Investor Rights Agreement]

 

 

PEQUOT
INSTITUTIONAL FUND, INC.

 

	
  By:

  	
  Pequot
  Capital Management, Inc.

  
	
   

  	
  as
  Investment Advisor

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/ Daniel Fishbane

  	
   

  
	
  Name:

  	
  Daniel Fishbane

  
	
  Title:

  	
  Treasurer

  
			

 

 

PEQUOT
DIVERSIFIED MASTER FUND, LTD.

 

	
  By:

  	
  Pequot
  Capital Management, Inc.

  
	
   

  	
  as
  Investment Advisor

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/ Daniel Fishbane

  	
   

  
	
  Name:

  	
  Daniel Fishbane

  
	
  Title:

  	
  Treasurer

  
			

 

[Signature
Page To Investor Rights Agreement]

 

 

IN WITNESS WHEREOF,  the undersigned parties hereto have
executed this Agreement as of the date first written above.

 

	
  INVESTORS:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  [FOR ENTITY INVESTOR USE

  	
   

  	
  [FOR INDIVIDUAL INVESTOR USE

  
	
  FOLLOWING SIGNATURE BLOCK:]

  	
   

  	
  FOLLOWING SIGNATURE BLOCK:]

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Entity
  Name:

  	
  Shamrock Capital Growth Fund II, L.P.

  	
   

  	
   

  
	
   

  	
  [Print Entity Name]

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Stephen D. Royer

  	
   

  	
  By:

  	
  Michael Lewis

  
	
  [Sign Here]

  	
   

  	
  [Sign Here]

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Name:

  	
  Stephen D. Royer

  	
   

  	
  Name:

  	
  /s/ Michael Lewis

  
	
  [Print Name]

  	
   

  	
  [Print Name]

  
	
   

  	
   

  	
   

  
	
  Title: 

  	
  Executive Vice President

  	
   

  	
   

  
	
  [Print Title]

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Address:

  	
  4444 Lakeside Dr.

  	
   

  	
  Address:

  	
   

  
	
       
  Burbank, CA 91505

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  E-mail Address:

  	
  sroyer@shamrock.com

  	
   

  	
  Email Address:

  	
   

  
											

 

[Signature Page To Investor Rights Agreement]

 

 

IN WITNESS
WHEREOF, the
undersigned parties hereto have executed this Agreement as of the date first
written above.

 

	
  INVESTORS:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  [FOR ENTITY INVESTOR USE

  	
   

  	
  [FOR INDIVIDUAL INVESTOR USE

  
	
  FOLLOWING SIGNATURE BLOCK:]

  	
   

  	
  FOLLOWING SIGNATURE BLOCK:]

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Entity
  Name:

  	
  Real Big LLC

  	
   

  	
   

  
	
   

  	
  [Print Entity Name]

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
  By:

  	
  /s/ Joshua Greer

  
	
  [Sign Here]

  	
   

  	
  [Sign Here]

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  	
  Name:

  	
  Michael Lewis

  
	
  [Print Name]

  	
   

  	
  [Print Name]

  
	
   

  	
   

  	
   

  
	
  Title: 

  	
  Member

  	
   

  	
   

  
	
  [Print Title]

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Address:

  	
   

  	
   

  	
  Address:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Email Address:

  	
   

  	
   

  	
  Email Address:

  	
   

  
													

 

[Signature
Page To Investor Rights Agreement]

 

 

IN WITNESS WHEREOF, the
undersigned parties hereto have executed this Agreement as of the date first
written above.

 

	
  INVESTORS:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  [FOR ENTITY INVESTOR USE

  	
   

  	
  [FOR INDIVIDUAL INVESTOR USE

  
	
  FOLLOWING SIGNATURE BLOCK:]

  	
   

  	
  FOLLOWING SIGNATURE BLOCK:]

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Entity
  Name:

  	
   

  	
   

  	
   

  
	
   

  	
  [Print Entity Name]

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
  By:

  	
  /s/ W. D. Budinger

  
	
  [Sign Here]

  	
   

  	
  [Sign Here]

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
  Name:

  	
   

  	
   

  	
  Name:

  	
  W. D. Budinger

  
	
  [Print Name]

  	
   

  	
  [Print Name]

  
	
   

  	
   

  	
   

  	
   

  
	
  Title: 

  	
   

  	
   

  	
   

  
	
  [Print Title]

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Address:

  	
   

  	
   

  	
  Address:

  	
  1507 Grinnell St. 

  
	
   

  	
   

  	
  Key West, FL 33040

  
	
   

  	
   

  	
   

  
	
  Email Address:

  	
   

  	
   

  	
  Email Address:

  	
  willbud8@hotmail.com

  
														

 

[Signature
Page To Investor Rights Agreement]

 

 

IN WITNESS WHEREOF, the
undersigned parties hereto have executed this Agreement as of the date first
written above.

 

	
  INVESTORS:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  [FOR ENTITY INVESTOR USE

  	
   

  	
  [FOR INDIVIDUAL INVESTOR USE

  
	
  FOLLOWING SIGNATURE BLOCK:]

  	
   

  	
  FOLLOWING SIGNATURE BLOCK:]

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Entity
  Name:

  	
   

  	
   

  	
   

  
	
   

  	
  [Print Entity Name]

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
  By:

  	
  /s/ Richard Huston

  
	
  [Sign Here]

  	
   

  	
  [Sign Here]

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
  Name:

  	
   

  	
   

  	
  Name:

  	
  Richard Huston

  
	
  [Print Name]

  	
   

  	
  [Print Name]

  
	
   

  	
   

  	
   

  
	
  Title: 

  	
   

  	
   

  	
   

  
	
  [Print Title]

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Address:

  	
   

  	
   

  	
  Address:

  	
  17 Greville Place

  
	
   

  	
   

  	
  London, NWGJJE

  
	
   

  	
   

  	
   

  
	
  Email Address:

  	
   

  	
   

  	
  Email Address:

  	
  rhuston@blueyonder.co.uk

  
													

 

[Signature
Page To Investor Rights Agreement]

 

 

IN WITNESS WHEREOF, the
undersigned parties hereto have executed this Agreement as of the date first
written above.

 

	
  INVESTORS:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  [FOR ENTITY INVESTOR USE

  	
   

  	
  [FOR INDIVIDUAL INVESTOR USE

  
	
  FOLLOWING SIGNATURE BLOCK:]

  	
   

  	
  FOLLOWING SIGNATURE BLOCK:]

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Entity
  Name:

  	
  Susan Budinger
  Loncki Separate Property Trust

  	
   

  	
   

  
	
   

  	
  [Print Entity Name]

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Susan Martin Budinger

  	
   

  	
  By:

  	
  /s/ Paul MacCaskill

  
	
  [Sign Here]

  	
   

  	
  [Sign Here]

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
  Name:

  	
  Susan Martin Budinger

  	
   

  	
  Name:

  	
  Paul MacCaskill

  
	
  [Print Name]

  	
   

  	
  [Print Name]

  
	
   

  	
   

  	
   

  
	
  Title: 

  	
  Trustee

  	
   

  	
   

  
	
  [Print Title]

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Address:

  	
  5225 E. Paradise Canyon
  Rd.

  	
   

  	
  Address:

  	
  10900 Wilshire Blvd., Suite 6

  
	
  Paradise
  Valley, AZ 85253

  	
   

  	
  La,
  Ca 90024

  
	
   

  	
   

  	
   

  
	
  Email Address:

  	
  sbudinger@rodelfoundations.org

  	
   

  	
  Email Address:

  	
  [ILLEGIBLE]

  
													

 

[Signature
Page To Investor Rights Agreement]

 

 

IN WITNESS WHEREOF, the
undersigned parties hereto have executed this Agreement as of the date first
written above.

 

	
  INVESTORS:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  [FOR ENTITY INVESTOR USE

  	
   

  	
  [FOR INDIVIDUAL INVESTOR USE

  
	
  FOLLOWING SIGNATURE BLOCK:]

  	
   

  	
  FOLLOWING SIGNATURE BLOCK:]

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Entity
  Name:

  	
  Perspectives
  LLC

  	
   

  	
   

  
	
   

  	
  [Print Entity Name]

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ David E. Richardson

  	
   

  	
  By:

  	
   

  
	
  [Sign Here]

  	
   

  	
  [Sign Here]

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
  Name:

  	
  David E. Richardson

  	
   

  	
  Name:

  	
   

  
	
  [Print Name]

  	
   

  	
  [Print Name]

  
	
   

  	
   

  	
   

  
	
  Title: 

  	
  Manager

  	
   

  	
   

  
	
  [Print Title]

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Address:

  	
  2905 Piedmont Rd. NE

  	
   

  	
  Address:

  	
   

  
	
  Atlanta, GA
  USA

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Email Address:

  	
  [ILLEGIBLE]

  	
   

  	
  Email Address:

  	
   

  
													

 

[Signature
Page To Investor Rights Agreement]

 

 

EXHIBIT A

 

SCHEDULE OF INVESTORS

 

Perspective
Investments, LLC 

2905
Piedmont Rd. N.E., Suite B 

Atlanta,
GA 30305

 

Richard
Huston 

17
Greville Place, 

London
NW6 5JE 

United Kingdom

 

William
D. Budinger 

504
Noah Lane,

Key
West, FL 33040

 

Hobbit
Investments, LLC 

1250
Red Butte Drive, 

Aspen,
Colorado 81611

 

The
Susan Budinger Loncki Separate Property Trust 

5225
East Paradise Canyon Road

Paradise
Valley, AZ 85253

 

Real
Big, LLC

19355
Highway 82 

Carbondale,
CO 81623

 

Attn:
Andrew Lane 

Paul Kagan

25849
Hatton Road 

Carmel,
California 93923

 

William
Charles Powers and Carolyn Clark Powers 

2012
The Strand

Manhattan
Beach, CA 90266

 

Paul
L. MacCaskill

10900
Wilshire Blvd, Suite 600, 

Los
Angeles, CA 90024

 

Shamrock
Capital Growth Fund II, L.P. 

4444
W. Lakeside Drive

Burbank,
CA 91505

 

 

Pequot
Scout Fund, L.P.

Pequot
Mariner Master Fund, L.P. 

Pequot
Navigator Offshore Fund, Inc. 

Pequot
Diversified Master Fund, Ltd. 

Pequot
Endowment Fund, L.P.

Pequot
Core Global Offshore Fund, Inc.

Pequot
Core Investors Fund, Inc 

Pequot
Institutional Fund, Inc.

Pequot
Diversified Master Fund, Ltd.

 

c/o
Pequot Capital Management, Inc. 

Attn:
Amber Tencic

500
Nyala Farm Road

Westport
Ct 06680

Phone:
203-429-2251

Fax:
203-557-5551

 

 

EXHIBIT B 

 

CONSENT OF SPOUSE

 

I acknowledge that I have read the foregoing Investor Rights Agreement
(the “Agreement”), by and among REAL D, a California corporation (the “Company”)
and the Investors identified on Exhibit A thereto, and that I know its
contents. I hereby appoint
                                       ,
my spouse, as my attorney-in-fact with respect to the exercise of any rights
under the Agreement and agree to be bound by the provisions of the Agreement
insofar as I may have any rights in the
Agreement or any shares of the Company under the community property laws of the
state of our residence or similar laws relating to marital property in effect
in the state of our residence as of the date of the signing of the Agreement or
thereafter. I further agree
that my spouse may join in any future amendment or modification of the Agreement without any
further signature, acknowledgment, agreement or consent on my part.

 

I am aware that by its provisions, I and my spouse agree to be bound by the share transfer, voting and other
restrictions set forth therein, and I agree that all such restrictions are
fully binding and conclusive on all ownership interest I now have or hereafter may acquire in the Company. I hereby agree that all such interests are subject to the provisions of
the Agreement and that I will take no
action at any time to hinder operation of, or violate, the Agreement.

 

I
further agree to perform any acts or execute any documents or instruments
necessary in the reasonable judgment of any party hereto to effectuate the
purposes or intent, or to complete the performance of the Agreement, and I will
take no action at any time to hinder operation of the Agreement. I represent
and acknowledge that I have been
advised to retain counsel in connection with this Agreement and either: (i) have
declined to consult with counsel, or (ii) have consulted independent
counsel with respect to the effects of this Agreement on my legal rights.
Having considered such legal advice or declined to consult with counsel, I freely, voluntarily and knowingly execute this Consent of Spouse which
may be attached to and made a part of the Agreement, and may be relied upon by
the Company and its Shareholders as an inducement to enter into the Agreement

 

 

	
  Dated:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  [Signature of Spouse]

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  [Printed Name of Spouse]Exhibit
10.1

 

REALD INC.

2004 AMENDED AND RESTATED STOCK INCENTIVE PLAN

(as amended and restated May 4, 2010)

 

SECTION 1.  PURPOSE

 

The purpose of the RealD
Inc. 2004 Amended and Restated Stock Incentive Plan is to attract, retain and
motivate employees, officers, directors, consultants, agents, advisors and
independent contractors of the Company and its Related Companies by providing
them the opportunity to acquire a proprietary interest in the Company and to
link their interests and efforts to the long-term interests of the Company’s
stockholders.

 

The 2004 Amended and
Restated Stock Incentive Plan was originally adopted by the board of directors
of Real D, a California corporation, on May 25, 2004.  On March 29, 2010, in connection with
the approval of the merger of Real D, a California corporation, with and into
RealD Inc., a Delaware corporation, wherein RealD Inc. was the surviving
corporation, the RealD Inc. stockholder also approved the assumption of the
2004 Amended and Restated Stock Incentive Plan. 
The 2004 Amended and Restated Stock Incentive Plan became effective for
RealD Inc. upon the effective date of the merger on April 8, 2010.  The Plan was last amended and restated by the
Board on May 4, 2010.

 

SECTION 2.  DEFINITIONS

 

Certain terms used in the
Plan have the meanings set forth in Appendix A.

 

SECTION 3.  ADMINISTRATION

 

3.1                               Administration of the Plan

 

The Plan shall be
administered by the Board. 
Notwithstanding the foregoing, the Board may delegate concurrent
responsibility for administering the Plan, including with respect to designated
classes of Eligible Persons, to a committee or committees (which term includes
subcommittees) consisting of one or more members of the Board, subject to such
limitations as the Board deems appropriate. 
If and so long as the Common Stock is registered under Section 12(b) or
12(g) of the Exchange Act, the Board shall consider in selecting the
members of any committee acting as Plan Administrator, with respect to any
persons subject to Section 16 of the Exchange Act, the provisions
regarding “non-employee directors” as contemplated by Rule 16b-3(b)(3) under
the Exchange Act, or any successor provision thereto.  Members of any committee shall serve for such
term as the Board may determine, subject to removal by the Board at any
time.  All references in the Plan to the “Plan Administrator” shall be, as
applicable, to the Board or any committee to whom the Board has delegated
authority to administer the Plan.

 

1

 

3.2                               Administration and Interpretation by Plan
Administrator

 

(a)                                  Except for the terms and conditions
explicitly set forth in the Plan, the Plan Administrator shall have full power
and exclusive authority, to the extent permitted by applicable law and subject
to such orders or resolutions not inconsistent with the provisions of the Plan
as may from time to time be adopted by the Board or a committee composed of
members of the Board, to (i) select the Eligible Persons to whom Awards
may from time to time be granted under the Plan; (ii) determine the type
or types of Award to be granted to each Participant under the Plan; (iii) determine
the number of shares of Common Stock to be covered by each Award granted under
the Plan; (iv) determine the terms and conditions of any Award granted
under the Plan; (v) approve the forms of agreements for use under the
Plan; (vi) determine whether, to what extent and under what circumstances
Awards may be settled in cash, shares of Common Stock or other property or
canceled or suspended; (vii) determine whether, to what extent and under
what circumstances cash, shares of Common Stock, other property and other
amounts payable with respect to an Award shall be deferred either automatically
or at the election of the Participant; (viii) interpret and administer the
Plan and any instrument evidencing an Award; (ix) establish such rules and
regulations as it shall deem appropriate for the proper administration of the
Plan; (x) delegate administrative duties to such of the Company’s employees
as it so determines; and (xi) make any other determination and take any other
action that the Plan Administrator deems necessary or desirable for
administration of the Plan.

 

(b)                                 Decisions of the Plan Administrator shall
be final, conclusive and binding on all persons, including the Company, any
Participant, any stockholder and any Eligible Person.  A majority of the members of the Plan
Administrator may determine its actions.

 

(c)                                  The effect on the vesting of an Award of
a Company-approved leave of absence or a Participant’s working less than
full-time shall be determined by the Company’s chief human resources officer or
other person performing that function or, with respect to directors or
executive officers, by the Board, and its determination shall be final.

 

SECTION 4.  SHARES SUBJECT TO THE PLAN

 

4.1                               Authorized Number of Shares

 

Subject to adjustment
from time to time as provided in Section 14.1, a maximum of Five Million
Two Hundred Seven Thousand Three Hundred Nineteen (5,207,319) shares of Common Stock
shall be available for issuance under the Plan. 
Shares issued under the Plan shall be drawn from authorized and unissued
shares.

 

4.2                               Share Usage

 

(a)                                  Shares of Common Stock covered by an
Award shall not be counted as used unless and until they are actually issued
and delivered to a Participant.  If any
Award lapses, expires, terminates or is canceled prior to the issuance of
shares thereunder or if shares of Common Stock are issued under the Plan to a
Participant and thereafter are forfeited to or otherwise reacquired by the
Company, the shares subject to such Awards and the forfeited or reacquired
shares shall again be available for issuance under the Plan.  Any shares of Common Stock (i) tendered
by a Participant or retained by the Company as full or partial payment to the
Company for the

 

2

 

purchase price of
an Award or to satisfy tax withholding obligations in connection with an Award
or (ii) covered by an Award that is settled in cash or in a manner such
that some or all of the shares covered by the Award are not issued shall be
available for Awards under the Plan.  The
number of shares of Common Stock available for issuance under the Plan shall
not be reduced to reflect any dividends or dividend equivalents that are
reinvested into additional shares of Common Stock or credited as additional
shares of Common Stock subject or paid with respect to an Award.

 

(b)                                 The Plan Administrator shall also,
without limitation, have the authority to grant Awards as an alternative to or
as the form of payment for grants or rights earned or due under other
compensation plans or arrangements of the Company.

 

(c)                                  Notwithstanding anything in the Plan to
the contrary, the Plan Administrator may grant Substitute Awards under the
Plan.  In the event that a written
agreement between the Company and an Acquired Entity pursuant to which a merger
or consolidation is completed is approved by the Board and that agreement sets
forth the terms and conditions of the substitution for or conversion or
assumption of outstanding awards of the Acquired Entity, those terms and
conditions shall be deemed to be the action of the Plan Administrator without
any further action by the Plan Administrator, except as may be required for
compliance with Rule 16b-3 under the Exchange Act, and the persons holding
such awards shall be deemed to be Participants.

 

(d)                                 Notwithstanding the foregoing, the
maximum number of shares that may be issued upon the exercise of Incentive
Stock Options shall equal the aggregate share number stated in Section 4.1,
subject to adjustment as provided in Section 14.1.

 

SECTION 5.  ELIGIBILITY

 

An Award may be granted
to any employee, officer or director of the Company or a Related Company whom
the Plan Administrator from time to time selects.  An Award may also be granted to any
consultant, agent, advisor or independent contractor for bona fide services
rendered to the Company or any Related Company that (a) are not in
connection with the offer and sale of the Company’s securities in a
capital-raising transaction and (b) do not directly or indirectly promote
or maintain a market for the Company’s securities.

 

SECTION 6.  AWARDS

 

6.1                               Form, Grant and Settlement of Awards

 

The Plan Administrator
shall have the authority, in its sole discretion, to determine the type or
types of Awards to be granted under the Plan. 
Such Awards may be granted either alone, in addition to or in tandem
with any other type of Award.  Any Award
settlement may be subject to such conditions, restrictions and contingencies as
the Plan Administrator shall determine.

 

6.2                               Evidence of Awards

 

Awards granted under the
Plan shall be evidenced by a written, including an electronic, agreement that
shall contain such terms, conditions, limitations and restrictions as the Plan
Administrator shall deem advisable and that are not inconsistent with the Plan.

 

3

 

6.3                               Deferrals

 

The Plan Administrator
may permit or require a Participant to defer receipt of the payment of any
Award.  If any such deferral election is
permitted or required, the Plan Administrator, in its sole discretion, shall
establish rules and procedures for such payment deferrals, which may
include the grant of additional Awards or provisions for the payment or
crediting of interest or dividend equivalents, including converting such
credits to deferred stock unit equivalents.

 

6.4                               Dividends and Distributions

 

Participants may, if the
Plan Administrator so determines, be credited with dividends paid with respect
to shares underlying an Award in a manner determined by the Plan Administrator
in its sole discretion.  The Plan
Administrator may apply any restrictions to the dividends or dividend
equivalents that the Plan Administrator deems appropriate.  The Plan Administrator, in its sole
discretion, may determine the form of payment of dividends or dividend
equivalents, including cash, shares of Common Stock, Restricted Stock or Stock
Units.

 

SECTION 7.  OPTIONS

 

7.1                               Grant of Options

 

The Plan Administrator
may grant Options designated as Incentive Stock Options or Nonqualified Stock
Options.

 

7.2                               Option Exercise Price

 

Except in the case of
Substitute Awards, the exercise price for shares purchased under an Option
shall be as established by the Plan Administrator, but shall not be less than (a) 85%
of the Fair Market Value of the Common Stock on the Grant Date with respect to
Nonqualified Stock Options, (b) the minimum exercise price required by Section 8.3
with respect to Incentive Stock Options, and (c) in the case of an Option
granted to a Participant who owns stock possessing more than 10% of the total
combined voting power of all classes of stock of the Company or its parent or
subsidiary companies, 110% of the Fair Market Value of the Common Stock on the
Grant Date.

 

7.3                               Term of Options

 

Subject to earlier
termination in accordance with the terms of the Plan and the instrument
evidencing the Option, the maximum term of an Option (the “Option
Term”) shall be as established for that Option by the Plan
Administrator or, if not so established, shall be ten years from the Grant
Date.  For Incentive Stock Options, the
Option Term shall be as specified in Section 8.4.

 

7.4                               Exercise of Options

 

The Plan Administrator
shall establish and set forth in each instrument that evidences an Option the
time at which, or the installments in which, the Option shall vest and become
exercisable, any of which provisions may be waived or modified by the Plan
Administrator at any time.  If

 

4

 

not so established in the
instrument evidencing the Option, the Option shall vest and become exercisable
according to the following schedule, which may be waived or modified by the
Plan Administrator at any time:

 

	
  Period of Participant’s
  Continuous

  Employment or Service With the

  Company or Its Related Companies

  From the Vesting Commencement Date

  	
   

  	
  Portion of Total Option That

  Is Vested and Exercisable

  
	
   

  	
   

  	
   

  
	
  After 1 year

  	
   

  	
  1/4th

  
	
   

  	
   

  	
   

  
	
  After each additional
  one-month period of continuous service completed thereafter

  	
   

  	
  An additional 1/48th

  
	
   

  	
   

  	
   

  
	
  After 4 years

  	
   

  	
  100%

  

 

To the extent an Option
has vested and become exercisable, the Option may be exercised in whole or from
time to time in part by delivery to the Company of a properly executed stock
option exercise agreement or notice, in a form and in accordance with
procedures established by the Plan Administrator, setting forth the number of
shares with respect to which the Option is being exercised, the restrictions
imposed on the shares purchased under such exercise agreement or notice, if
any, and such representations and agreements as may be required by the Plan
Administrator, accompanied by payment in full as described in Sections 7.5 and
12.  An Option may be exercised only for
whole shares and may not be exercised for less than a reasonable number of
shares at any one time, as determined by the Plan Administrator.

 

7.5                               Payment of Exercise Price

 

The exercise price for
shares purchased under an Option shall be paid in full to the Company by
delivery of consideration equal to the product of the Option exercise price and
the number of shares purchased. Such consideration must be paid before the
Company will issue the shares being purchased and must be in a form or a
combination of forms acceptable to the Plan Administrator for that purchase,
which forms may include:

 

(a)                                  cash;

 

(b)                                 check or wire transfer;

 

(c)                                  tendering (either actually or, if and so
long as the Common Stock is registered under Section 12(b) or 12(g) of
the Exchange Act, by attestation) shares of Common Stock that on the day prior
to the exercise date have a Fair Market Value equal to the aggregate exercise
price of the shares being purchased under the Option (such shares must have
been owned by the Participant for at least six months or any shorter period
necessary to avoid a charge to the Company’s earnings for financial reporting
purposes);

 

5

 

(d)                                 if and so long as the Common Stock is
registered under Section 12(b) or 12(g) of the Exchange Act, and
to the extent permitted by law, delivery of a properly executed exercise
agreement or notice, together with irrevocable instructions to a brokerage firm
designated or approved by the Company to deliver promptly to the Company the
aggregate amount proceeds to pay the Option exercise price and any withholding
tax obligations that may arise in connection with the exercise, all in
accordance with the regulations of the Federal Reserve Board; or

 

(e)                                  such other consideration as the Plan
Administrator may permit.

 

7.6                               Effect of Termination of Service

 

The Plan Administrator
shall establish and set forth in each instrument that evidences an Option
whether the Option shall continue to be exercisable, and the terms and
conditions of such exercise, after a Termination of Service, any of which
provisions may be waived or modified by the Plan Administrator at any
time.  If not so established in the
instrument evidencing the Option, the Option shall be exercisable according to
the following terms and conditions, which may be waived or modified by the Plan
Administrator at any time:

 

(a)                                  Any portion of an Option that is not
vested and exercisable on the date of a Participant’s Termination of Service
shall expire on such date.

 

(b)                                 Any portion of an Option that is vested and
exercisable on the date of a Participant’s Termination of Service shall expire
on the earliest to occur of:

 

(i)                                     if the Participant’s Termination of
Service occurs for reasons other than Cause, Retirement, Disability or death,
the date that is one year after such Termination of Service;

 

(ii)                                  if the Participant’s Termination of
Service occurs by reason of Retirement, Disability or death, the one-year
anniversary of such Termination of Service; and

 

(iii)                               the last day of the Option Term (the “Option Expiration Date”).

 

Notwithstanding the
foregoing, if a Participant dies after the Participant’s Termination of Service
but while an Option is otherwise exercisable, the portion of the Option that is
vested and exercisable on the date of such Termination of Service shall expire
upon the earlier to occur of (y) the Option Expiration Date and (z) the
one-year anniversary of the date of death, unless the Plan Administrator
determines otherwise.

 

Also notwithstanding the
foregoing, in case a Participant’s Termination of Service occurs for Cause, all
Options granted to the Participant shall automatically expire upon first
notification to the Participant of such termination, unless the Plan
Administrator determines otherwise.  If a
Participant’s employment or service relationship with the Company is suspended
pending an investigation of whether the Participant shall be terminated for
Cause, all the Participant’s rights under any Option shall likewise be
suspended during the period of investigation. 
If any facts that would constitute termination for Cause are discovered
after a Participant’s Termination of Service, any Option then held by the
Participant may be immediately terminated by the Plan Administrator, in its
sole discretion.

 

6

 

(c)                                  A Participant’s change in status from an
employee of the Company or a Related Company to a nonemployee director,
consultant, advisor or independent contractor of the Company or a Related
Company or a change in status from a nonemployee director, consultant, advisor
or independent contractor of the Company or a Related Company to an employee of
the Company or a Related Company shall not be considered a Termination of
Service for purposes of this Section 7.6.

 

SECTION 8.  INCENTIVE STOCK OPTION LIMITATIONS

 

Notwithstanding any other
provisions of the Plan, the terms and conditions of any Incentive Stock Options
shall in addition comply in all respects with Section 422 of the Code or
any successor provision and any applicable regulations thereunder, including,
to the extent required thereunder, the following:

 

8.1                               Dollar Limitation

 

To the extent the
aggregate Fair Market Value (determined as of the Grant Date) of Common Stock
with respect to which a Participant’s Incentive Stock Options become
exercisable for the first time during any calendar year (under the Plan and all
other stock option plans of the Company and its parent and subsidiary
corporations) exceeds $100,000, such portion in excess of $100,000 shall be
treated as a Nonqualified Stock Option. 
In the event the Participant holds two or more such Options that become
exercisable for the first time in the same calendar year, such limitation shall
be applied on the basis of the order in which such Options are granted.

 

8.2                               Eligible Employees

 

Individuals who are not
employees of the Company or one of its parent or subsidiary corporations may
not be granted Incentive Stock Options.

 

8.3                               Exercise Price

 

The exercise price of an
Incentive Stock Option shall be at least 100% of the Fair Market Value of the
Common Stock on the Grant Date and, in the case of an Incentive Stock Option
granted to a Participant who owns more than 10% of the total combined voting
power of all classes of the stock of the Company or of its parent or subsidiary
corporations (a “Ten Percent Stockholder”),
shall not be less than 110% of the Fair Market Value of the Common Stock on the
Grant Date.  The determination of more
than 10% ownership shall be made in accordance with Section 422 of the
Code.

 

8.4                               Option Term

 

Subject to earlier
termination in accordance with the terms of the Plan and the instrument
evidencing the Option, the Option Term of an Incentive Stock Option shall not
exceed ten years, and in the case of an Incentive Stock Option granted to a Ten
Percent Stockholder, shall not exceed five years.

 

7

 

8.5                               Exercisability

 

An Option designated as
an Incentive Stock Option shall cease to qualify for favorable tax treatment as
an Incentive Stock Option to the extent it is exercised (if permitted by the
terms of the Option) (a) more than three months after the date of a
Participant’s Termination of Service if termination was for reasons other than
death or Disability, (b) more than one year after the date of a Participant’s
Termination of Service if termination was by reason of Disability, or (c) after
the Participant has been on leave of absence for more than 90 days, unless the
Participant’s reemployment rights are guaranteed by statute or contract.

 

8.6                               Taxation of Incentive Stock Options

 

In order to obtain
certain tax benefits afforded to Incentive Stock Options under Section 422
of the Code, the Participant must hold the shares acquired upon the exercise of
an Incentive Stock Option for two years after the Grant Date and one year after
the date of exercise.  A Participant may
be subject to the alternative minimum tax at the time of exercise of an
Incentive Stock Option.  The Participant
shall give the Company prompt notice of any disposition of shares acquired on
the exercise of an Incentive Stock Option prior to the expiration of such
holding periods.

 

8.7                               Code Definitions

 

For the purposes of this Section 8,
“disability,” “parent corporation” and “subsidiary corporation” shall have the
meanings attributed to those terms for purposes of Section 422 of the
Code.

 

SECTION 9.  STOCK APPRECIATION RIGHTS

 

9.1                               Grant of Stock Appreciation Rights

 

The Plan Administrator
may grant Stock Appreciation Rights to Participants at any time on such terms
and conditions as the Plan Administrator shall determine in its sole
discretion. An SAR may be granted in tandem with an Option or alone (“freestanding”).  The grant price of a tandem SAR shall be
equal to the exercise price of the related Option. The grant price of a
freestanding SAR shall be determined in accordance with the procedure for
Options set forth in Section 7.2. 
An SAR may be exercised upon such terms and conditions and for the term
as the Plan Administrator determines in its sole discretion; provided, however,
that, subject to earlier termination in accordance with the terms of the Plan
and the instrument evidencing the SAR, the term of a freestanding SAR shall be
as established for that SAR by the Plan Administrator or, if not so
established, shall be ten years, and in the case of a tandem SAR, (a) the
term shall not exceed the term of the related Option and (b) the tandem
SAR may be exercised for all or part of the shares subject to the related
Option upon the surrender of the right to exercise the equivalent portion of the
related Option, except that the tandem SAR may be exercised only with respect
to the shares for which its related Option is then exercisable.

 

9.2                               Payment of SAR Amount

 

Upon the exercise of an
SAR, a Participant shall be entitled to receive payment from the Company in an
amount determined by multiplying: (a) the difference between the Fair
Market

 

8

 

Value of the Common Stock
for the date of exercise over the grant price of the SAR by (b) the number
of shares with respect to which the SAR is exercised.  At the discretion of the Plan Administrator
as set forth in the instrument evidencing the Award, the payment upon exercise
of an SAR may be in cash, in shares, in some combination thereof or in any
other manner approved by the Plan Administrator in its sole discretion.

 

SECTION 10.  STOCK AWARDS, RESTRICTED STOCK AND STOCK UNITS

 

10.1                        Grant of Stock Awards, Restricted Stock and Stock
Units

 

The Plan Administrator
may grant Stock Awards, Restricted Stock and Stock Units on such terms and
conditions and subject to such repurchase or forfeiture restrictions, if any,
which may be based on continuous service with the Company or a Related Company
or the achievement of any performance goals, as the Plan Administrator shall
determine in its sole discretion, which terms, conditions and restrictions
shall be set forth in the instrument evidencing the Award.

 

10.2                        Vesting of Restricted Stock and Stock Units

 

Upon the satisfaction of
any terms, conditions and restrictions prescribed with respect to Restricted
Stock or Stock Units, or upon a Participant’s release from any terms,
conditions and restrictions of Restricted Stock or Stock Units, as determined
by the Plan Administrator, and subject to the provisions of Section 12, (a) the
shares of Restricted Stock covered by each Award of Restricted Stock shall
become freely transferable by the Participant, and (b) Stock Units shall
be paid in shares of Common Stock or, if set forth in the instrument evidencing
the Award, in cash, or a combination of cash and shares of Common Stock.  Any fractional shares subject to such Awards
shall be paid to the Participant in cash.

 

10.3                        Waiver of Restrictions

 

Notwithstanding any other
provisions of the Plan, the Plan Administrator, in its sole discretion, may
waive the repurchase or forfeiture period and any other terms, conditions or
restrictions on any Restricted Stock or Stock Unit under such circumstances and
subject to such terms and conditions as the Plan Administrator shall deem appropriate.

 

10.4                        Minimum Purchase Price

 

The purchase price for
any shares of Common Stock that may be purchased under the Plan (“Stock Purchase Rights”) shall be at
least 85% of the Fair Market Value of the Common Stock at the time the
Participant is granted the Stock Purchase Right or at the time the purchase is
consummated.  Notwithstanding the
foregoing, to the extent required by applicable law, the purchase price shall
be at least 100% of the Fair Market Value of the Common Stock at the time the
Participant is granted the Stock Purchase Right or at the time the purchase is
consummated in the case of any person who owns stock possessing more than 10%
of the total combined voting power of all classes of stock of the Company or
its parent or subsidiary companies.

 

9

 

SECTION 11.  OTHER STOCK OR CASH-BASED AWARDS

 

Subject to the terms of
the Plan and such other terms and conditions as the Plan Administrator deems
appropriate, the Plan Administrator may grant other incentives payable in cash
or in shares of Common Stock under the Plan as it determines.

 

SECTION 12.  WITHHOLDING

 

The Company may require
the Participant to pay to the Company the amount of (a) any taxes that the
Company is required by applicable federal, state, local or foreign law to
withhold with respect to the grant, vesting or exercise of an Award (“tax withholding obligations”) and (b) any
amounts due from the Participant to the Company or to any Related Company (“other obligations”).  The Company shall not be required to issue
any shares of Common Stock or otherwise settle an Award under the Plan until
such tax withholding obligations and other obligations are satisfied.

 

The Plan Administrator
may permit or require a Participant to satisfy all or part of the Participant’s
tax withholding obligations and other obligations by (a) paying cash to
the Company, (b) having the Company withhold an amount from any cash
amounts otherwise due or to become due from the Company to the Participant, (c) having
the Company withhold a number of shares of Common Stock that would otherwise be
issued to the Participant (or become vested in the case of Restricted Stock)
having a Fair Market Value equal to the tax withholding obligations and other
obligations, or (d) surrendering a number of shares of Common Stock the
Participant already owns having a value equal to the tax withholding
obligations and other obligations.  The
value of the shares so withheld may not exceed the employer’s minimum required
tax withholding rate, and the value of the shares so surrendered may not exceed
such rate to the extent the Participant has owned the surrendered shares for
less than six months if such limitation is necessary to avoid a charge to the
Company for financial reporting purposes.

 

SECTION 13.  ASSIGNABILITY

 

No Award or interest in
an Award may be sold, assigned, pledged (as collateral for a loan or as
security for the performance of an obligation or for any other purpose) or
transferred by a Participant or made subject to attachment or similar
proceedings otherwise than by will or by the applicable laws of descent and
distribution, except to the extent the Participant designates one or more
beneficiaries on a Company-approved form who may exercise the Award or receive
payment under the Award after the Participant’s death.  During a Participant’s lifetime, an Award may
be exercised only by the Participant. Notwithstanding the foregoing and to the
extent permitted by Section 422 of the Code, the Plan Administrator, in
its sole discretion, may permit a Participant to assign or transfer an Award,
subject to such terms and conditions as the Plan Administrator shall specify.

 

SECTION 14.  ADJUSTMENTS

 

14.1                        Adjustment of Shares

 

In the event, at any time
or from time to time, a stock dividend, stock split, spin-off, combination or
exchange of shares, recapitalization, merger, consolidation, a statutory share
exchange, 

 

10

 

distribution to
stockholders other than a normal cash dividend, or other change in the Company’s
corporate or capital structure results in (a) the outstanding shares of
Common Stock, or any securities exchanged therefor or received in their place,
being exchanged for a different number or kind of securities of the Company or any
other company or (b) new, different or additional securities of the
Company or any other company being received by the holders of shares of Common
Stock, then the Plan Administrator shall make proportional adjustments in (i) the
maximum number and kind of securities available for issuance under the Plan; (ii) the
maximum number and kind of securities issuable as Incentive Stock Options as
set forth in Section 4.2(d); and (iii) the number and kind of
securities that are subject to any outstanding Award and the per share price of
such securities, without any change in the aggregate price to be paid therefor.

 

The determination by the
Plan Administrator as to the terms of any of the foregoing adjustments shall be
conclusive and binding.

 

Notwithstanding the
foregoing, the issuance by the Company of shares of stock of any class, or
securities convertible into shares of stock of any class, for cash or property,
or for labor or services rendered, either upon direct sale or upon the exercise
of rights or warrants to subscribe therefor, or upon conversion of shares or
obligations of the Company convertible into such shares or other securities,
shall not affect, and no adjustment by reason thereof shall be made with
respect to, outstanding Awards.  Also
notwithstanding the foregoing, a dissolution or liquidation of the Company or a
Company Transaction shall not be governed by this Section 14.1 but shall
be governed by Sections 14.2 and 14.3, respectively.

 

14.2                        Dissolution or Liquidation

 

To the extent not
previously exercised or settled, and unless otherwise determined by the Plan
Administrator in its sole discretion, Options, Stock Appreciation Rights and
Stock Units shall terminate immediately prior to the dissolution or liquidation
of the Company.  To the extent a vesting
condition, forfeiture provision or repurchase right applicable to an Award has
not been waived by the Plan Administrator, the Award shall be forfeited
immediately prior to the consummation of the dissolution or liquidation.

 

14.3                        Company Transaction

 

14.3.1              Effect
of a Company Transaction

 

Notwithstanding any other
provision of the Plan to the contrary, unless the Plan Administrator shall
determine otherwise at the time of grant with respect to a particular Award, in
the event of a Company Transaction that is not a Related Party Transaction, all
outstanding Awards shall become fully and immediately exercisable, and all
applicable deferral and restriction limitations and forfeiture provisions shall
lapse, immediately prior to the Company Transaction, and then terminate upon
effectiveness of the Company Transaction, unless such Awards are assumed,
converted or substituted for by the Successor Company.  Notwithstanding the foregoing, with respect
to Options or Stock Appreciation Rights, the Plan Administrator, in its sole
discretion, may instead provide that a Participant’s outstanding Options or
SARs shall terminate upon consummation of such Company Transaction and that
each such Participant shall receive, in exchange therefor, a cash payment equal
to the amount (if any) by which (a) the Acquisition 

 

11

 

Price multiplied by the
number of shares of Common Stock subject to such outstanding Options or SARs
(whether or not then exercisable) exceeds (b) the respective aggregate
exercise price for such Options or grant price for such SARs.

 

14.3.2              Assumption, Conversion or Substitution

 

For the purposes of this Section 14.3,
an Award shall be considered assumed, converted or substituted for if following
the Company Transaction, the option or right confers the right to purchase or
receive, for each share of Common Stock subject to the Award immediately prior
to the Company Transaction, the consideration (whether stock, cash, or other
securities or property) received in the Company Transaction by holders of
Common Stock for each share held at the effective time of the Company
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 Company
Transaction is not solely common stock of the Successor Company, the Plan
Administrator may, with the consent of the Successor Company, provide for the
consideration to be received upon the exercise or settlement of the Award, for
each share of Common Stock subject to the Award, to be solely common stock of
the Successor Company substantially equal in fair market value to the per share
consideration received by holders of Common Stock in the Company Transaction.
The determination of such substantial equality of value of consideration shall
be made by the Plan Administrator, and its determination shall be conclusive
and binding.

 

14.3.3              Acceleration Following a Company Transaction

 

If an Award is assumed,
converted or exchanged in a Company Transaction and does not otherwise
accelerate at that time, in the event that a Participant’ employment or service
relationship with the Successor Company should terminate (i) in connection
with the Company Transaction or (ii) subsequently within one year
following such Company Transaction, and such employment or service relationship
is not terminated by the Successor Company for Cause or by the Participant
voluntarily without Good Reason, then, any portion of the Participant’s Awards
that remain unvested or subject to forfeiture or other restrictions shall
immediately vest and become exercisable, and any forfeiture provisions or other
restrictions shall lapse effective upon such termination of employment or
Service Relationship.

 

14.4                        Further Adjustment of Awards

 

Subject to Sections 14.2
and 14.3, the Plan Administrator shall have the discretion, exercisable at any
time before a sale, merger, consolidation, a statutory share exchange, reorganization,
liquidation, dissolution or change in control of the Company, as defined by the
Plan Administrator, to take such further action as it determines to be
necessary or advisable with respect to Awards. 
Such authorized action may include (but shall not be limited to)
establishing, amending or waiving the type, terms, conditions or duration of,
or restrictions on, Awards so as to provide for earlier, later, extended or
additional time for exercise, lifting restrictions and other modifications, and
the Plan Administrator may take such actions with respect to all Participants,
to certain categories of Participants or only to individual Participants.  The Plan Administrator may take such action
before or after granting Awards to which the action relates and before or

 

12

 

after any public
announcement with respect to such sale, merger, consolidation, reorganization,
liquidation, dissolution or change in control that is the reason for such
action.

 

14.5                        No Limitations

 

The grant of Awards shall
in no way affect the Company’s right 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.

 

14.6                        Fractional Shares

 

In the event of any
adjustment in the number of shares covered by any Award, each such Award shall
cover only the number of full shares resulting from such adjustment.

 

SECTION 15.  FIRST REFUSAL AND REPURCHASE RIGHTS

 

15.1                        First Refusal Rights

 

Until the date on which
the initial registration of the Common Stock under Section 12(b) or
12(g) of the Exchange Act first becomes effective, the Company shall have
the right of first refusal with respect to any proposed sale or other
disposition by a Participant of any shares of Common Stock issued pursuant to
an Award.  Such right of first refusal
shall be exercisable in accordance with the terms and conditions established by
the Plan Administrator and set forth in the stock purchase agreement evidencing
the purchase of the shares.

 

15.2                        Repurchase Rights for Vested Shares

 

Until the date on which
the initial registration of the Common Stock under Section 12(b) or
12(g) of the Exchange Act first becomes effective, upon a Participant’s
Termination of Service, all vested shares of Common Stock issued pursuant to an
Award (whether issued before or after such Termination of Service) shall be
subject to repurchase by the Company, at the Company’s sole discretion, at the
Fair Market Value of such shares on the date of such repurchase.  Notwithstanding the foregoing, in the event
that (i) a Participant’s employment or service relationship with the
Company or a Related Company is terminated without Cause and (ii) Participant’s
vested shares constitute more than one percent (1%) of the Company’s total
outstanding shares of capital stock (calculated on a fully-diluted as-converted
basis), said shares shall not be subject to repurchase by the Company.  The terms and conditions upon which such
repurchase right shall be exercisable (including the period and procedure for
exercise) shall be established by the Plan Administrator and set forth in the
stock purchase agreement evidencing the purchase of the shares.

 

15.3                        Repurchase Rights for Unvested Shares

 

The Plan Administrator
may, in its sole discretion, authorize the issuance of unvested shares of
Common Stock pursuant to the exercise of a Nonqualified Stock Option.  Should the Participant cease to be employed
by or provide services to the Company or a Related Company, then all shares of
Common Stock issued upon exercise of an Option that are unvested at the time of
cessation of employment or service relationship shall be subject to repurchase
at the lesser of the

 

13

 

exercise price paid for
such shares and the Fair Market Value of the Common Stock at the time of
repurchase.  The terms and conditions
upon which such repurchase right shall be exercisable (including the period and
procedure for exercise) shall be established by the Plan Administrator and set
forth in the stock purchase agreement evidencing the purchase of the shares.

 

Except as otherwise
provided in the instrument evidencing the Award, in the event of a Company
Transaction, the Company’s repurchase rights shall automatically be assigned to
the Successor Company; provided, however, that such repurchase rights shall
automatically lapse if and to the same extent that the vesting schedule for
outstanding Options accelerates in connection with the Company Transaction.

 

The Plan Administrator
shall have the discretionary authority, exercisable either before or after a
Participant’s Termination of Service, to waive the Company’s outstanding
repurchase rights with respect to one or more shares purchased or purchasable
by the Participant under an Option and thereby accelerate the vesting of such
shares in whole or in part at any time.

 

15.4                        Repurchase Conditions

 

Notwithstanding the
foregoing, to the extent required by applicable law:

 

(a)                                  the Company’s repurchase right set forth
in Section 15.2 must be exercised for cash or cancellation of purchase
money indebtedness for the shares within 90 days of Termination of Service (or
in the case of securities issued pursuant to Awards after the date of
Termination of Service, within 90 days after the date of issuance), and
publicly traded; and

 

(b)                                 the Company’s repurchase right set forth
in Section 15.3 shall lapse at the rate of at least 20% of the shares per
year over five years from the date the Award is granted and the right to
repurchase shall be exercised for cash or cancellation of purchase money
indebtedness for the shares within 90 days of termination of employment (or in
the case of securities issued pursuant to Awards after the date of termination,
within 90 days after the date of issuance);

 

provided, however, that
the securities held by an officer, director or consultant of the Company or a
Related Company shall not be subject to these repurchase conditions.

 

15.5                        General

 

The Company may not
exercise its first refusal or repurchase rights under Section 15.1 or
15.2, respectively, earlier than six months and one day following the date the
shares were purchased by a Participant (or any shorter period determined by the
Company to be sufficient to avoid a charge to the Company’s earnings for
financial reporting purposes or required by applicable law).

 

The Company’s first
refusal and repurchase rights under this Section 15 are assignable by the
Company at any time.

 

SECTION 16.  MARKET STANDOFF

 

In the event of an
underwritten public offering by the Company of its equity securities pursuant
to an effective registration statement filed under the Securities Act,
including the Company’s

 

14

 

initial public offering,
no person may sell, make any short sale of, loan, hypothecate, pledge, grant
any option for the purchase of, or otherwise dispose of or transfer for value
or otherwise agree to engage in any of the foregoing transactions with respect
to any shares issued pursuant to an Award granted under the Plan without the
prior written consent of the Company or its underwriters.  Such limitations shall be in effect for such
period of time as may be requested by the Company or such underwriters;
provided, however, that in no event shall such period exceed 180 days following
the effective date of the registration statement.  The limitations of this Section 16 shall
in all events terminate two years after the effective date of the Company’s
initial public offering.

 

In the event of any stock
split, stock dividend, recapitalization, combination of shares, exchange of
shares or other change affecting the Company’s outstanding Common Stock
effected as a class without the Company’s receipt of consideration, any new,
substituted or additional securities distributed with respect to the purchased
shares shall be immediately subject to the provisions of this Section 16,
to the same extent the purchased shares are at such time covered by such
provisions.

 

In order to enforce the
limitations of this Section 16, the Company may impose stop-transfer
instructions with respect to the purchased shares until the end of the
applicable standoff period.

 

SECTION 17.  AMENDMENT AND TERMINATION

 

17.1                        Amendment, Suspension or Termination

 

The Board may amend,
suspend or terminate the Plan or any portion of the Plan at any time and in
such respects as it shall deem advisable; provided, however, that, to the
extent required by applicable law, regulation or stock exchange rule,
stockholder approval shall be required for any amendment to the Plan.  Subject to Section 17.3, the Board may
amend the terms of any outstanding Award, prospectively or retroactively.

 

17.2                        Term of the Plan

 

The Plan shall have no
fixed expiration date.  After the Plan is
terminated, no future Awards may be granted, but Awards previously granted
shall remain outstanding in accordance with their applicable terms and
conditions and the Plan’s terms and conditions. 
Notwithstanding the foregoing, no Incentive Stock Options may be granted
more than ten years after the Effective Date and no Award may be granted to a
resident of California more than ten years after the Effective Date.

 

17.3                        Consent of Participant

 

The amendment, suspension
or termination of the Plan or a portion thereof or the amendment of an
outstanding Award shall not, without the Participant’s consent, materially
adversely affect any rights under any Award theretofore granted to the
Participant under the Plan.  Any change
or adjustment to an outstanding Incentive Stock Option shall not, without the
consent of the Participant, be made in a manner so as to constitute a “modification”
that would cause such Incentive Stock Option to fail to continue to qualify as
an Incentive Stock Option.

 

15

 

Notwithstanding the
foregoing, any adjustments made pursuant to Sections 14.2 and 14.3 shall not be
subject to these restrictions.

 

SECTION 18.  GENERAL

 

18.1                        No Individual Rights

 

No individual or
Participant shall have any claim to be granted any Award under the Plan, and
the Company has no obligation for uniformity of treatment of Participants under
the Plan.

 

Furthermore, nothing in
the Plan or any Award granted under the Plan shall be deemed to constitute an
employment contract or confer or be deemed to confer on any Participant any
right to continue in the employ of, or to continue any other relationship with,
the Company or any Related Company or limit in any way the right of the Company
or any Related Company to terminate a Participant’s employment or other
relationship at any time, with or without cause.

 

18.2                        Issuance of Shares

 

Notwithstanding any other
provision of the Plan, the Company shall have no obligation to issue or deliver
any shares of Common Stock under the Plan or make any other distribution of
benefits under the Plan unless, in the opinion of the Company’s counsel, such
issuance, delivery or distribution would comply with all applicable laws
(including, without limitation, the requirements of the Securities Act or the
laws of any state or foreign jurisdiction) and the applicable requirements of
any securities exchange or similar entity.

 

The Company shall be
under no obligation to any Participant to register for offering or resale or to
qualify for exemption under the Securities Act, or to register or qualify under
the laws of any state or foreign jurisdiction, any shares of Common Stock,
security or interest in a security paid or issued under, or created by, the
Plan, or to continue in effect any such registrations or qualifications if
made.

 

As a condition to the exercise
of an Option or any other receipt of Common Stock pursuant to an Award under
the Plan, the Company may require (a) the Participant to represent and
warrant at the time of any such exercise or receipt that such shares are being
purchased or received only for the Participant’s own account and without any
present intention to sell or distribute such shares and (b) such other
action or agreement by the Participant as may from time to time be necessary to
comply with the federal, state and foreign securities laws. At the option of
the Company, a stop-transfer order against any such shares may be placed on the
official stock books and records of the Company, and a legend indicating that
such shares may not be pledged, sold or otherwise transferred, unless an
opinion of counsel is provided (concurred in by counsel for the Company)
stating that such transfer is not in violation of any applicable law or
regulation, may be stamped on stock certificates to ensure exemption from
registration.  The Plan Administrator may
also require the Participant to execute and deliver to the Company a purchase
agreement or such other agreement as may be in use by the Company at such time
that describes certain terms and conditions applicable to the shares.

 

To the extent the Plan or
any instrument evidencing an Award provides for issuance of stock certificates
to reflect the issuance of shares of Common Stock, the issuance may be effected
on a 

 

16

 

noncertificated basis, to
the extent not prohibited by applicable law or the applicable rules of any
stock exchange.

 

18.3                        Indemnification

 

To the maximum extent
permitted by law, each person who is or shall have been a member of the Board,
or a committee appointed by the Board to whom authority was delegated in
accordance with Section 3.1 shall be indemnified and held harmless by the
Company against and from any loss, cost, liability or expense that may be
imposed upon or reasonably incurred by such person in connection with or
resulting from any claim, action, suit or proceeding to which such person may
be a party or in which such person may be involved by reason of any action
taken or failure to act under the Plan and against and from any and all amounts
paid by such person in settlement thereof, with the Company’s approval, or paid
by such person in satisfaction of any judgment in any such claim, action, suit
or proceeding against such person; provided, however, that such person shall
give the Company an opportunity, at its own expense, to handle and defend the
same before such person undertakes to handle and defend it on such person’s own
behalf, unless such loss, cost, liability or expense is a result of such person’s
own willful misconduct or except as expressly provided by statute.

 

The foregoing right of
indemnification shall not be exclusive of any other rights of indemnification
to which such person may be entitled under the Company’s certificate of
incorporation or bylaws, as a matter of law, or otherwise, or of any power that
the Company may have to indemnify such person or hold such person harmless.

 

18.4                        Code Section 409A.

 

The Plan and Awards
granted hereunder are intended to comply with the requirements of Code Section 409A
and shall be interpreted in a manner consistent with such intention.  If upon a Participant’s “separation from
service” within the meaning of Code Section 409A, he/she is then a “specified
employee” (as defined in Code Section 409A), then solely to the extent
necessary to comply with Code Section 409A and avoid the imposition of
taxes under Code Section 409A, the Company shall defer payment of “nonqualified
deferred compensation” subject to Code Section 409A payable as a result of
and within six (6) months following such separation from service under
this Plan until the earlier of (i) the first business day of the seventh
month following the Participant’s separation from service, or (ii) ten (10) days
after the Company receives written confirmation of the Participant’s
death.  Any such delayed payments shall be
made without interest.

 

18.5                        No Rights as a Stockholder

 

Unless otherwise provided
by the Plan Administrator or in the instrument evidencing the Award or in a
written employment, services or other agreement, no Option, Stock Appreciation
Right or Stock Unit shall entitle the Participant to any cash dividend, voting
or other right of a stockholder unless and until the date of issuance under the
Plan of the shares that are the subject of such Award.

 

17

 

18.6                        Compliance With Laws and Regulations

 

In interpreting and
applying the provisions of the Plan, any Option granted as an Incentive Stock
Option pursuant to the Plan shall, to the extent permitted by law, be construed
as an “incentive stock option” within the meaning of Section 422 of the
Code.

 

18.7                        Participants in Other Countries or Jurisdictions

 

Without amending the
Plan, the Plan Administrator may grant Awards to eligible persons who are
foreign nationals on such terms and conditions different from those specified
in the Plan, which may, in the judgement of the Plan Administrator, be
necessary or desirable to foster and promote achievement of the purposes of the
Plan and shall have the authority to adopt such modifications, procedures, and
subplans and the like as may be necessary or desirable to comply with
provisions of the laws or regulations of other countries or jurisdictions in
which the Company or any Related Company may operate or have employees to
ensure the viability of the benefits from Awards granted to Participants
employed in such countries or jurisdictions, meet the requirements that permit
the Plan to operate in a qualified or tax efficient manner, comply with
applicable foreign laws or regulations and meet the objectives of the Plan.

 

18.8                        No Trust or Fund

 

The Plan is intended to
constitute an “unfunded” plan.  Nothing
contained herein shall require the Company to segregate any monies or other
property, or shares of Common Stock, or to create any trusts, or to make any
special deposits for any immediate or deferred amounts payable to any
Participant, and no Participant shall have any rights that are greater than
those of a general unsecured creditor of the Company.

 

18.9                        Successors

 

All obligations of the
Company under the Plan with respect to Awards shall be binding on any successor
to the Company, whether the existence of such successor is the result of a
direct or indirect purchase, merger, consolidation, or otherwise, of all or
substantially all the business and/or assets of the Company.

 

18.10                 Severability

 

If any provision of the
Plan or any Award is determined to be invalid, illegal or unenforceable in any
jurisdiction, or as to any person, or would disqualify the Plan or any Award
under any law deemed applicable by the Plan Administrator, such provision shall
be construed or deemed amended to conform to applicable laws, or, if it cannot
be so construed or deemed amended without, in the Plan Administrator’s
determination, materially altering the intent of the Plan or the Award, such
provision shall be stricken as to such jurisdiction, person or Award, and the
remainder of the Plan and any such Award shall remain in full force and effect.

 

18.11                 Choice of Law

 

The Plan, all Awards
granted thereunder and all determinations made and actions taken pursuant
hereto, to the extent not otherwise governed by the laws of the United States,
shall be governed by the laws of the State of California without giving effect
to principles of conflicts of law.

 

18

 

18.12                 Financial Reports

 

To the extent required by
applicable law, the Company shall provide annual financial statements of the
Company to each Participant. Such financial statements need not be audited and
need not be issued to employees whose duties within the Company assure them
access to equivalent information.

 

18.13                 Legal Requirements

 

The granting of Awards
and the issuance of shares of Common Stock under the Plan is subject to all
applicable laws, rules and regulations, and to such approvals by any
governmental agencies or national securities exchanges as may be required.

 

19

 

PLAN ADOPTION AND AMENDMENTS

ADJUSTMENTS SUMMARY PAGE

 

	
  Date of

  Board Action

  	
   

  	
  Action

  	
   

  	
  Section/Effect of

  Amendment

  	
   

  	
  Date of

  Stockholder

  Approval

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  May 25, 2004

  	
   

  	
  Initial Plan Adoption

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  June     ,
  2004

  	
   

  	
  Restated Plan Adoption

  	
   

  	
   

  	
   

  	
  June     ,
  2004

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  June 9, 2005

  	
   

  	
  Restated Plan Adoption

  	
   

  	
  Section 4 - Increase
  the number of shares reserved under the Plan

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Restated Plan Adoption

  	
   

  	
  Section 4 - Increase
  the number of shares reserved under the Plan

  	
   

  	
  January     ,
  2006

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  February 15, 2007

  	
   

  	
  Restated Plan Adoption

  	
   

  	
  Section 4 - Increase
  the number of shares reserved under the Plan

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  January 11, 2008

  	
   

  	
  Restated Plan Adoption

  	
   

  	
  Section 4 - Increase
  the number of shares reserved under the Plan

  	
   

  	
  January 11, 2008

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  June 10, 2009

  	
   

  	
  Restated Plan Adoption

  	
   

  	
  Section 4 - Increase
  the number of shares reserved under the Plan

  	
   

  	
  June 10, 2009

  

 

 

APPENDIX A

 

“Acquired
Entity” means any entity acquired by the Company or a Related
Company or with which the Company or a Related Company merges or combines.

 

“Acquisition
Price” means the fair market value of the securities, cash or
other property, or any combination thereof, receivable upon consummation of a
Company Transaction in respect of a share of Common Stock.

 

“Award”
means any Option, Stock Appreciation Right, Stock Award, Restricted Stock,
Stock Unit or cash-based award or other incentive payable in cash or in shares
of Common Stock, as may be designated by the Plan Administrator from time to
time.

 

“Board”
means the Board of Directors of the Company.

 

“Cause,”
unless otherwise defined in the instrument evidencing the Award or in a written
employment, services or other agreement between the Participant and the Company
or a Related Company, means dishonesty, fraud, serious willful misconduct,
unauthorized use or disclosure of confidential information or trade secrets, or
conviction or confession of a felony, in each case as determined by the Company’s
chief human resources officer or other person performing that function or, in
the case of directors and executive officers, the Board, each of whose
determination shall be conclusive and binding.

 

“Code”
means the Internal Revenue Code of 1986, as amended from time to time.

 

“Common
Stock” means the common stock, $0.0001 par value per share, of
the Company.

 

“Company”
means RealD Inc., a Delaware corporation.

 

“Company
Transaction,” unless otherwise defined in the instrument
evidencing the Award or in a written employment, services or other agreement
between the Participant and the Company or a Related Company, means
consummation of

 

(a)                                  a merger or consolidation of the Company
with or into any other company or other entity,

 

(b)                                 a statutory share exchange pursuant to
which the Company’s outstanding shares are acquired or a sale in one
transaction or a series of transactions undertaken with a common purpose of at
least 80% of the Company’s outstanding voting securities, or

 

(c)                                  a sale, lease, exchange or other transfer
in one transaction or a series of related transactions undertaken with a common
purpose of all or substantially all of the Company’s assets.

 

Where a series of
transactions undertaken with a common purpose is deemed to be a Company
Transaction, the date of such Company Transaction shall be the date on which
the last of such transactions is consummated.

 

 

“Disability,”
unless otherwise defined by the Plan Administrator or in the instrument evidencing
the Award or in a written employment, services or other agreement between the
Participant and the Company or a Related Company, means a mental or physical
impairment of the Participant that is expected to result in death or that has
lasted or is expected to last for a continuous period of 12 months or more and
that causes the Participant to be unable to perform his or her material duties
for the Company or a Related Company and to be engaged in any substantial
gainful activity, in each case as determined by the Company’s chief human
resources officer or other person performing that function or, in the case of
directors and executive officers, the Board, each of whose determination shall
be conclusive and binding.

 

“Effective
Date” means May 25, 2004.

 

“Eligible
Person” means any person eligible to receive an Award as set
forth in Section 5.

 

“Exchange
Act” means the Securities Exchange Act of 1934, as amended from
time to time.

 

“Fair
Market Value” means the per share fair market value of the
Common Stock as established in good faith by the Board or, if the Common Stock
is publicly traded, the average of the high and low trading prices for the
Common Stock on any given date during regular trading or, if not trading on
that date, such price on the last preceding date on which the Common Stock was
traded, unless determined otherwise by the Plan Administrator using such
methods or procedures as it may establish.

 

“Good
Reason,” unless otherwise defined in the instrument evidencing
the Award or in a written employment, services or other agreement between the
Participant and the Company or a Related Company, means the occurrence of any
of the following events or conditions and the failure of the Successor Company
to cure such event or condition within 30 days after receipt of written notice
from the Participant:

 

(a)                                  a change in the Participant’s status,
title, position or responsibilities (including reporting responsibilities)
that, in the Participant’s reasonable judgment, represents a substantial
reduction in the Participant’s status, title, position or responsibilities as
in effect immediately prior thereto; the assignment to the Participant of any
duties or responsibilities that, in the Participant’s reasonable judgment, are
materially inconsistent with the Participant’s status, title, position or
responsibilities; or the Participant’s removal from or any failure to reappoint
or reelect the Participant to any of such positions, except in connection with
the termination of the Participant’s employment for Cause, as a result of the
Participant’s Disability or death, or by the Participant other than for Good
Reason;

 

(b)                                 a reduction in the Participant’s annual
base salary;

 

(c)                                  the Successor Company’s requiring the
Participant (without the Participant’s consent) to be based at any place
outside a 50-mile radius of the Participant’s place of employment prior to the
Company Transaction, except for reasonably required travel on the Successor
Company’s business that is not materially greater than such travel requirements
prior to the Company Transaction;

 

 

(d)                                 the Successor Company’s failure to (i) continue
in effect any material compensation or benefit plan (or the substantial
equivalent thereof) in which the Participant were participating at the time of
a Company Transaction, including, but not limited to, the Plan, or (ii) provide
the Participant with compensation and benefits substantially equivalent (in
terms of benefit levels and/or reward opportunities) to those provided for
under each material employee benefit plan, program and practice as in effect
immediately prior to the Company Transaction;

 

(e)                                  any material breach by the Successor
Company of its obligations to the Participant under the Plan or any
substantially equivalent plan of the Successor Company; or

 

(f)                                    any purported termination of the
Participant’s employment or service relationship for Cause by the Successor
Company that is not in accordance with the definition of Cause under the Plan.

 

“Grant
Date” means the later of (a) the date on which the Plan Administrator
completes the corporate action authorizing the grant of an Award or such later
date specified by the Plan Administrator or (b) the date on which all
conditions precedent to an Award have been satisfied, provided that conditions
to the exercisability or vesting of Awards shall not defer the Grant Date.

 

“Incentive
Stock Option” means an Option granted with the intention that it
qualify as an “incentive stock option” as that term is defined for purposes of Section 422
of the Code or any successor provision.

 

“Nonqualified
Stock Option” means an Option other than an Incentive Stock
Option.

 

“Option”
means a right to purchase Common Stock granted under Section 7.

 

“Option
Expiration Date” has the meaning set forth in Section 7.6.

 

“Option
Term” means the maximum term of an Option as set forth in Section 7.3.

 

“Participant”
means any Eligible Person to whom an Award is granted.

 

“Plan”
means the RealD Inc. 2004 Amended and Restated Stock Incentive Plan as it may
be amended from time to time.

 

“Plan
Administrator” has the meaning set forth in Section 3.1.

 

“Related
Company” means any entity that, directly or indirectly, is in
control of, is controlled by or is under common control with the Company.

 

“Related
Party Transaction” means (a) a merger or consolidation of
the Company, or a statutory share exchange pursuant to which the Company’s
outstanding shares are acquired, in which the holders of the outstanding voting
securities of the Company immediately prior to the merger or consolidation hold
at least a majority of the outstanding voting securities of the Successor
Company immediately after the merger, consolidation or statutory share
exchange; (b) a sale, lease, exchange or other transfer of all or
substantially all of the Company’s assets to a majority-owned subsidiary
company; or (c) a transaction undertaken for the principal purpose of 

 

 

restructuring the capital
of the Company, including, but not limited to, reincorporating the Company in a
different jurisdiction, converting the Company to a limited liability company
or creating a holding company.

 

“Restricted
Stock” means an Award of shares of Common Stock granted under Section 10,
the rights of ownership of which may be subject to restrictions prescribed by
the Plan Administrator.

 

“Retirement,”
unless otherwise defined in the instrument evidencing the Award or in a written
employment, services or other agreement between the Participant and the Company
or a Related Company, means “retirement” as defined for purposes of the Plan by
the Plan Administrator or the Company’s chief human resources officer or other
person performing that function or, if not so defined, means Termination of
Service on or after the date the Participant reaches “normal retirement age,”
as that term is defined in Section 411(a)(8) of the Code.

 

“Securities
Act” means the Securities Act of 1933, as amended from time to
time.

 

“Stock
Appreciation Right” or “SAR” means
a right granted under Section 9.1 to receive the excess of the Fair Market
Value of a specified number of shares of Common Stock over the grant price.

 

“Stock
Award” means an Award of shares of Common Stock granted under Section 10,
the rights of ownership of which are not subject to restrictions prescribed by
the Plan Administrator.

 

“Stock
Unit” means an Award denominated in units of Common Stock
granted under Section 10.

 

“Substitute
Awards” means Awards granted or shares of Common Stock issued by
the Company in assumption of, or in substitution or exchange for, awards
previously granted by an Acquired Entity.

 

“Successor
Company” means the surviving company, the successor company, the
acquiring company or its parent, as applicable, in connection with a Company
Transaction.

 

“Termination
of Service” means a termination of employment or service
relationship with the Company or a Related Company for any reason, whether
voluntary or involuntary, including by reason of death, Disability or
Retirement.  Any question as to whether
and when there has been a Termination of Service for the purposes of an Award
and the cause of such Termination of Service shall be determined by the Company’s
chief human resources officer or other person performing that function or, with
respect to directors and executive officers, by the Board, and its
determination shall be conclusive and binding. 
Transfer of a Participant’s employment or service relationship between
the Company and any Related Company shall not be considered a Termination of
Service for purposes of an Award.  Unless
the Board determines otherwise, a Termination of Service shall be deemed to
occur if the Participant’s employment or service relationship is with an entity
that has ceased to be a Related Company.

 

“Vesting
Commencement Date” means the Grant Date or such other date
selected by the Plan Administrator as the date from which the Award begins to
vest.

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