Document:

exv10w3

 

Exhibit 10.3

BROCADE SENIOR LEADERSHIP PLAN

Revised: February 9, 2005

PURPOSE

The Brocade Senior Leadership Plan is designed to link incentive compensation with Company
performance.

TIMING

Performance against Company objectives is measured on six-month cycles (Plan Periods), which run
concurrently with the first and second halves of Brocade’s fiscal year. Payout of earned cash
bonuses, if any, occurs on an annual basis.

ELIGIBILITY

Regular full-time and part-time Vice President (VP) level employees are eligible to participate in
the Senior Leadership Plan Program.

Participants must be regular (full-time or part-time) employees at the end of the fiscal year to be
eligible to receive a Senior Leadership Plan Payout.

PARTICIPANT PERFORMANCE

As each Plan Period begins, participants must complete a VP Performance Contract. Performance
contracts should be tied to company and departmental goals as outlined by the board of directors
(i.e., company priorities and initiatives). All goals must be tied to overall company objectives
and have defined measurements.

Before Performance Contracts are final, they are to be reviewed and approved by Finance, Human
Relations, and the Chief Executive Officer (CEO).

At the end of each Plan Period, actual performance against the plan’s financial metric goals is
determined by Finance and provided to the plan participants. Performance against goals is then
assessed by the Participant and then reviewed and assessed by the VP’s manager, in order to
determine each participant’s bonus payout for the period. The Compensation Committee reviews and
approves all Section 16 Officers’ performance and bonus payouts annually. The CEO reviews and
approves all other VP cash bonus payouts.

COMPANY PERFORMANCE & SENIOR LEADERSHIP PLAN FUNDING

Each Plan Period, Brocade will set a target Operating Margin for the
company to achieve during the Plan Period (Target OM).

 

 

At the end of each Plan Period, Brocade will fund the Senior Leadership Plan based on the actual
Operating Margin achieved by Brocade during the Plan Period (Actual OM) relative to the Target OM
(Actual Contribution).

The Actual OM will be communicated following the end of each Plan Period.

PARTICIPANT INCENTIVE TARGET

A Participant’s Incentive Target is determined by the Participant’s pay grade at the end of the
12-month Plan Period, unless otherwise indicated in writing by Brocade.

	 	 	 	 	 	 
	 	Participant Pay Grade
	 	 	Annual Incentive Target	 
	 	X
	 	 	75%	 
	 	A&B
	 	 	50%	 
	 	C&D
	 	 	40%	 
	 

SENIOR LEADERSHIP PLAN PAYOUTS

On an annual basis, the Compensation Committee reviews and approves Section 16 Officers’
performance and cash bonus payouts. The CEO reviews and approves all other VP cash bonuses. Program
payouts are made within eight (8) weeks following the conclusion of the 12-month Plan Period.
Payouts will be pro-rated for Participants who are hired or transferred into the Senior Leadership
Plan during any Plan Period.

For each Participant, the cash bonus payout is calculated based on the following formula (less
applicable taxes and deductions):

Bonus Payout = (Actual Funding) x (Individual VP Goal Points Earned for the year) x
(Annual Incentive Target) x (Annual Salary)

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	Participant
	 	 	Revenue
	 	 	Operating Margin
	 	 	Individual Goals
	 	 	Total	 
	 	CEO
	 	 	50%
	 	 	50%
	 	 	—
	 	 	100%	 
	 	VPs
	 	 	50%
	 	 	40%
	 	 	10%
	 	 	100%	 
	 

Bonuses will be calculated using the salary as of the last day of the Plan Period.

Departmental budgets are communicated at the beginning of each fiscal year and may be updated
quarterly throughout the year by the CEO and CFO. Adherence to the individual’s departmental budget
is a gate for the individual to qualify for the Senior Leadership Plan bonus. Failure to adhere to
the agreed upon budget disqualifies the individual from a bonus payout.

 

 

ADMINISTRATIVE PROCEDURES

Compensation Committee Approval

The Compensation Committee reserves the right to decrease or eliminate bonus otherwise indicated.

New Hires and Promotions

Participants new to the company or who are promoted into the Senior Leadership Plan must complete a
VP Performance Contract within 60 days of beginning in the new position.

Grade/Salary Factor

Payout will be based on the Participant’s salary and pay grade on the last day of the Plan Period.
Bonuses will be pro-rated if Participant received a cash bonus on another bonus program.

Terminations: Anyone who is not on the payroll as of the end of the fiscal year is not eligible to
receive a cash bonus payout.

Leaves of Absences, Disability or Death: In the event of the Participant death, disability time
off, or leave of absence, Payouts will be made on a pro-rated basis, based on the number of days
the Participant was actively working at Brocade. If the Participant is on a legally protected leave
of absence (e.g. Family Medical Leave or Military Leave), the Participant’s eligibility for
participation in Plan may be extended beyond the time above, in accordance with the laws governing
the legally protected leave. In the event of death, any cash bonus payments will be paid to the
Participant’s primary beneficiary as designated in the Participant’s Brocade life insurance plan
documentation, if any.

Performance Improvement Plan/Disciplinary Situations (Development Needed): If a Participant, at
anytime prior to the cash bonus payout 12-month Plan Period, is subject to a performance
improvement plan, discipline or demotion, Brocade may, in its sole discretion, reduce or eliminate
the Cash Payment that the Participant would otherwise have been eligible to receive. If, at the
time prior to the Payout for a 12-month Plan Period, it is determined that a Participant may be
subject to corrective action, discipline or demotion, then Brocade may withhold the entire Cash
Bonus Payout, or a portion thereof, until after a final decision on such corrective action has been
made. If a Participant is given a performance rating of Development Needed, the Participant will
not be eligible to receive a Payout. Only the VP of Human Resources or CEO may approve exceptions
to this policy.

Other Provisions: Participation in the Senior Leadership Plan does not constitute an agreement
(express or implied) between the Participant and Brocade that the Participant will be employed by
Brocade for any specific period of time, nor is there any agreement for continuing or long-term
employment. Terms and conditions regarding the Senior Leadership Plan and any participation
therein, including but not limited to Senior Leadership Plan eligibility, Senior Leadership Plan
funding, and performance and payout criteria and determinations, are subject to
change by Brocade at any time in its sole discretion. Brocade and its Board of Directors retain the
absolute right to interpret, revise, modify or terminate the Senior Leadership Plan at any time in
its sole discretion.

 

 

ADDENDUM TO BROCADE SENIOR LEADERSHIP PLAN

(DATED FEBRUARY 9, 2005)

Notwithstanding any terms to the contrary in the Brocade Senior Leadership Plan, the following
terms shall apply to the Bonus Payout under the Senior Leadership Plan for fiscal 2005:

	 	•	 	Participants must continue to be regular employees as of December 15, 2005 to
be eligible to receive a Senior Leadership Plan Payout for fiscal 2005. In addition, any
references to the end of the 12-month Plan Period or fiscal year for purposes of the Senior
Leadership Plan for fiscal 2005 (including without limitation, the subsections entitled
“Termination” and “Performance Improvement Plan/Disciplinary Situations (Development
Needed)”) shall be deemed to refer to December 15, 2005.
	 
	 	•	 	The Bonus Payout shall be calculated as follows:

Bonus Payout = (Individual CEO/VP Goal Points Earned for the year) x (Annual
Incentive Target) x (Annual Salary)

	 	•	 	Each participant shall also be eligible to receive an additional cash
bonus (the “Additional Bonus”) equal to the amount of such individual’s actual
Bonus Payout for fiscal 2005. The Additional Bonus for Mr. Jaworski shall be
equal to the actual Bonus Payout for fiscal 2005, multiplied by 1.67.exv10w1

 

Exhibit 10.1

THERION SOFTWARE CORPORATION

2004 STOCK PLAN

     1. Purposes of the Plan. The purposes of this 2004 Stock Plan are to attract and
retain the best available personnel for positions of substantial responsibility, to provide
additional incentive to Employees and Consultants and to promote the success of the Company’s
business. Options granted under the Plan may be Incentive Stock Options or Nonstatutory Stock
Options, as determined by the Administrator at the time of grant of an option and subject to the
applicable provisions of Section 422 of the Code and the regulations and interpretations
promulgated thereunder. Stock purchase rights may also be granted under the Plan.

     2. Definitions. As used herein, the following definitions shall apply:

          (a) “Administrator” means the Board or its Committee appointed pursuant to Section 4 of the
Plan.

          (b) “Affiliate” means an entity other than a Subsidiary (as defined below) which, together
with the Company, is under common control of a third person or entity.

          (c) “Applicable Laws” means the legal requirements relating to the administration of stock
option and restricted stock purchase plans under applicable U.S. state corporate laws, U.S. federal
and applicable state securities laws, the Code, any Stock Exchange rules or regulations and the
applicable laws of any other country or jurisdiction where Options or Stock Purchase Rights are
granted under the Plan, as such laws, rules, regulations and requirements shall be in place from
time to time.

          (d) “Board” means the Board of Directors of the Company.

          (e) “Cause” for termination of a Participant’s Continuous Service Status will exist if the
Participant is terminated by the Company for any of the following reasons:
(i) Participant’s willful failure substantially to perform his or her duties and responsibilities
to the Company or deliberate violation of a Company policy; (ii) Participant’s commission of any
act of fraud, embezzlement, dishonesty or any other willful misconduct that has caused or is
reasonably expected to result in material injury to the Company; (iii) unauthorized use or
disclosure by Participant of any proprietary information or trade secrets of the Company or any
other party to whom the Participant owes an obligation of nondisclosure as a result of his or her
relationship with the Company; or (iv) Participant’s willful breach of any of his or her
obligations under any written agreement or covenant with the Company. The determination as to
whether a Participant is being terminated for Cause shall be made in good faith by the Company and
shall be final and binding on the Participant. The foregoing definition does not in any way limit
the Company’s ability to terminate a Participant’s employment or consulting relationship at any
time as provided in Section 5(d) below, and the term “Company” will be interpreted to include any
Subsidiary, Parent or Affiliate, as appropriate.

 

 

          (f) “Change of Control” means a sale of all or substantially all of the
Company’s assets, or any merger, consolidation or other transaction of the Company with or into
another corporation, entity or person, other than a transaction in which the holders of at least a
majority of the voting securities of the Company outstanding immediately prior to such transaction
continue to hold (either by the voting securities remaining outstanding or by their being
converted into voting securities of the surviving entity) a majority of the total voting power
represented by the voting securities of the Company, or such surviving entity, outstanding
immediately after such transaction.

          (g) “Code” means the Internal Revenue Code of 1986, as amended.

          (h) “Committee” means one or more committees or subcommittees of the Board appointed by
the Board to administer the Plan in accordance with Section 4 below.

          (i) “Common Stock” means the Common Stock of the Company.

          (j) “Company” means Therion Software Corporation, a Delaware corporation.

          (k) “Consultant” means any person, including an advisor, who is engaged by the Company or
any Parent, Subsidiary or Affiliate to render services and is compensated for such services, and
any director of the Company whether compensated for such services or not.

          (l) “Continuous Service Status” means the absence of any interruption or
termination of service as an Employee or Consultant. Continuous Service Status as an Employee or
Consultant shall not be considered interrupted in the case of: (i) sick leave; (ii) military leave;
(iii) any other leave of absence approved by the Administrator, provided that such leave is for a
period of not more than ninety (90) days, unless reemployment upon the expiration of such leave is
guaranteed by contract or statute, or unless provided otherwise pursuant to Company policy adopted
from time to time; or (iv) in the case of transfers between locations of the Company or between the
Company, its Parents, Subsidiaries, Affiliates or their respective successors. A change in status
from an Employee to a Consultant or from a Consultant to an Employee will not constitute an
interruption of Continuous Service Status.

          (m) “Corporate Transaction” means a sale of all or substantially all of the
Company’s assets, or a merger, consolidation or other capital reorganization of the Company with or
into another corporation, entity or person, and includes a Change of Control.

          (n) “Director” means a member of the Board.

          (o) “Employee” means any person employed by the Company or any Parent, Subsidiary or
Affiliate, with the status of employment determined based upon such factors as are deemed
appropriate by the Administrator in its discretion, subject to any requirements of the Code or the
Applicable Laws. The payment by the Company of a director’s fee to a Director shall not be
sufficient to constitute “employment” of such Director by the Company.

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          (p) “Exchange Act” means the Securities Exchange Act of 1934, as amended.

          (q) “Executive Optionees” mean the President, Chief Executive Officer, Chief
Financial Officer, or any Vice President.

          (r) “Fair Market Value” means, as of any date, the fair market value of the
Common Stock, as determined by the Administrator in good faith on such basis as it deems
appropriate and applied consistently with respect to Participants. Whenever possible, the
determination of Fair Market Value shall be based upon the closing price for the Shares as
reported in the Wall Street Journal for the applicable date.

          (s) “Incentive Stock Option” means an Option intended to qualify as an incentive
stock option within the meaning of Section 422 of the Code, as designated in the applicable Option
Agreement.

          (t) “Involuntary Termination” means termination of a Participant’s Continuous
Service Status under the following circumstances: (i) termination without Cause by the Company or a
Subsidiary, Parent or Affiliate, as appropriate; or (ii) voluntary termination by the Participant
within one year following (A) a material reduction in the Participant’s job responsibilities,
provided that neither a mere change in title alone nor reassignment following a Change of Control
to a position that is substantially similar to the position held
prior to the Change of Control
shall constitute a material reduction in job responsibilities; (B) relocation by the Company or a
Subsidiary, Parent or Affiliate, as appropriate, of the Participant’s work site to a facility or
location more than 25 miles from the Participant’s principal work site for the Company at the time
of the Change of Control; or (C) a reduction, in Participant’s then-current base salary, provided
that an across-the-board reduction in the salary level of all other employees or consultants in
positions similar to the Participant’s by the same percentage amount as part of a general salary
level reduction shall not constitute such a salary reduction.

          (u) “Listed Security” means any security of the Company that is listed or approved for
listing on a national securities exchange or designated or approved for designation as a national
market system security on an interdealer quotation system by the National Association of Securities
Dealers, Inc.

          (v) “Named Executive” means any individual who, on the last day of the Company’s
fiscal year, is the chief executive officer of the Company (or is acting in such capacity) or among
the four most highly compensated officers of the Company (other than the chief executive officer).
Such officer status shall be determined pursuant to the executive compensation disclosure rules
under the Exchange Act.

          (w) “Nonstatutory Stock Option” means an Option not intended to qualify as an
Incentive Stock Option, as designated in the applicable Option Agreement.

          (x) “Option”
means a stock option granted pursuant to the Plan.

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          (y) “Option Agreement” means a written document, the form(s) of which shall be
approved from time to time by the Administrator, reflecting the terms of an Option granted under
the Plan and includes any documents attached to or incorporated into such Option Agreement,
including, but not limited to, a notice of stock option grant and a form of exercise notice.

          (z) “Option Exchange Program” means a program approved by the Administrator
whereby outstanding Options are exchanged for Options with a lower exercise price or are amended
to decrease the exercise price as a result of a decline in the Fair Market Value of the Common
Stock.

          (aa) “Optioned
Stock” means the Common Stock subject to an Option.

          (bb) “Optionee”
means an Employee or Consultant who receives an Option.

          (cc) “Parent” means a “parent corporation,”, whether now or hereafter existing, as
defined in Section 424(e) of the Code, or any successor provision.

          (dd) “Participant” means any holder of one or more Options or Stock Purchase Rights, or the
Shares issuable or issued upon exercise of such awards, under the Plan.

          (ee) “Plan” means this 2002 Stock Plan.

          (ff) “Reporting Person” means an officer, Director, or greater than ten percent
stockholder of the Company within the meaning of Rule 16a-2 under the Exchange Act, who is required
to file reports pursuant to Rule 16a-3 under the Exchange Act.

          (gg) “Restricted Stock” means Shares of Common Stock acquired pursuant to a grant of a
Stock Purchase Right under Section 11 below.

          (hh) “Restricted Stock Purchase Agreement” means a written document, the form(s) of
which shall be approved from time to time by the Administrator, reflecting the terms of a Stock
Purchase Right granted under the Plan and includes any documents attached to such agreement.

          (ii) “Rule 16b-3” means Rule 16b-3 promulgated under the Exchange Act, as amended from
time to time, or any successor provision.

          (jj) “Share” means a share of the Common Stock, as adjusted in accordance with Section 14
of the Plan.

          (kk) “Stock Exchange” means any stock exchange or consolidated stock price reporting system
on which prices for the Common Stock are quoted at any given time.

          (ll) “Stock Purchase Right” means the right to purchase Common Stock pursuant to
Section 11 below.

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          (mm) “Subsidiary” means a “subsidiary corporation,” whether now or hereafter existing, as
defined in Section 424(f) of the Code, or any successor provision.

          (nn) “Ten Percent Holder” means a person who owns stock representing more than ten
percent (10%) of the voting power of all classes of stock of the Company or any Parent or
Subsidiary.

     3. Stock Subject to the Plan. Subject to the provisions of Section 14 of the Plan, the
maximum aggregate number of Shares that may be sold under the Plan is 2,325,000 Shares of Common
Stock. The Shares may be authorized, but unissued, or reacquired
Common Stock. If an award should
expire or become unexercisable for any reason without having been exercised in full, or is
surrendered pursuant to an Option Exchange Program, the unpurchased Shares that were subject
thereto shall, unless the Plan shall have been terminated, become available for future grant under
the Plan. In addition, any Shares of Common Stock which are retained by the Company upon exercise
of an award in order to satisfy the exercise or purchase price for such award or any withholding
taxes due with respect to such exercise or purchase shall be treated as not issued and shall
continue to be available under the Plan. Shares issued under the Plan and later repurchased by the
Company pursuant to any repurchase right which the Company may have shall be available for future
grant under the Plan.

     4. Administration of the Plan.

          (a) General. The Plan shall be administered by the Board or a Committee, or a
combination thereof, as determined by the Board. The Plan may be administered by different
administrative bodies with respect to different classes of Participants and, if permitted by the
Applicable Laws, the Board may authorize one or more officers to make awards under the Plan.

          (b) Committee Composition. If a Committee has been appointed pursuant to this Section
4, such Committee shall continue to serve in its designated capacity until otherwise directed by
the Board. From time to time the Board may increase the size of any Committee and appoint
additional members thereof, remove members (with or without cause) and appoint new members in
substitution therefor, fill vacancies (however caused) and remove all members of a Committee and
thereafter directly administer the Plan, all to the extent permitted by the Applicable Laws and, in
the case of a Committee administering the Plan in accordance with the requirements of Rule 16b-3 or
Section 162(m) of the Code, to the extent permitted or required by such provisions.

          (c) Powers of the Administrator. Subject to the provisions of the Plan and in the case
of a Committee, the specific duties delegated by the Board to such Committee, the Administrator
shall have the authority, in its discretion:

               (i) to determine the Fair Market Value of the Common Stock, in accordance with Section
2(r) of the Plan, provided that such determination shall be applied consistently with
respect to Participants under the Plan;

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               (ii) to select the Employees and Consultants to whom Plan awards may from time to
time be granted;

               (iii) to determine whether and to what extent Plan awards are granted;

               (iv) to determine the number of Shares of Common Stock to be covered by each award
granted;

               (v) to approve the form(s) of agreement(s) used under the Plan;

               (vi) to determine the terms and conditions, not inconsistent with the terms of the Plan,
of any award granted hereunder, which terms and conditions include but are not limited to the
exercise or purchase price, the time or times when awards may be exercised (which may be based on
performance criteria), any vesting acceleration or waiver of forfeiture restrictions, any pro rata
adjustments to vesting as a result of a Participant’s transitioning from full- to part-time service
(or vice versa), and any restriction or limitation regarding any Option, Optioned Stock, Stock
Purchase Right or Restricted Stock, based in each case on such factors as the Administrator, in its
sole discretion, shall determine;

               (vii) to determine whether and under what circumstances an Option may be settled in cash
under Section 10(c) instead of Common Stock;

               (viii) to implement an Option Exchange Program on such terms and
conditions as the Administrator in its discretion deems appropriate, provided that no amendment
or adjustment to an Option that would materially and adversely affect the rights of any Optionee
shall be made without the prior written consent of the Optionee;

               (ix) to adjust the vesting of an Option held by an Employee or Consultant as a
result of a change in the terms or conditions under which such person is providing
services to the Company;

               (x) to construe and interpret the terms of the Plan and awards granted under the Plan,
which constructions, interpretations and decisions shall be final and binding on all Participants;
and

               (xi) in order to fulfill the purposes of the Plan and without amending the Plan, to modify
grants of Options or Stock Purchase Rights to Participants who are foreign nationals or employed
outside of the United States in order to recognize differences in local law, tax policies or
customs.

     5. Eligibility.

          (a) Recipients
of Grants. Nonstatutory Stock Options and Stock Purchase Rights
may be granted to Employees and Consultants. Incentive Stock Options may be granted only to
Employees, provided that Employees of Affiliates shall not be eligible to receive Incentive Stock
Options.

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          (b) Type of Option. Each Option shall be designated in the Option
Agreement as either an Incentive Stock Option or a Nonstatutory Stock
Option.

          (c) ISO
$100,000 Limitation. Notwithstanding any designation under Section 5(b), to
the extent that the aggregate Fair Market Value of Shares with respect to which Options designated
as Incentive Stock Options are exercisable for the first time by any Optionee during any calendar
year (under all plans of the Company or any Parent or Subsidiary) exceeds $100,000, such excess
Options shall be treated as Nonstatutory Stock Options. For purposes of this Section 5(c),
Incentive Stock Options shall be taken into account in the order in which they were granted, and
the Fair Market Value of the Shares subject to an Incentive Stock Option shall be determined as of
the date of the grant of such Option.

          (d) No Employment Rights. The Plan shall not confer upon any Participant any right
with respect to continuation of an employment or consulting relationship with the Company, nor
shall it interfere in any way with such Participant’s right or
the Company’s right to terminate
the employment or consulting relationship at any time for any reason.

     6. Term of Plan. The Plan shall become effective upon its adoption by the Board of
Directors. It shall continue in effect for a term of ten (10) years unless sooner terminated under
Section 16 of the Plan.

     7. Term of Option. The term of each Option shall be the term stated in the Option
Agreement; provided that the term shall be no more than ten years from the date of grant thereof or
such shorter term as may be provided in the Option Agreement and provided further that, in the case
of an Incentive Stock Option granted to a person who at the time of such grant is a Ten Percent
Holder, the term of the Option shall be five years from the date of grant thereof or such shorter
term as may be provided in the Option Agreement.

     8. [Reserved.]

     9. Option Exercise Price and Consideration.

          (a) Exercise Price. The per Share exercise price for the Shares to be issued
pursuant to exercise of an Option shall be such price as is determined by the Administrator
and set forth in the Option Agreement, but shall be subject to the following:

               (i) In
the case of an Incentive Stock Option

                    (A) granted to an Employee who at the time of grant is a Ten
Percent Holder, the per Share exercise price shall be no less than 110% of the Fair Market Value
per Share on the date of grant; or

                    (B) granted to any other Employee, the per Share exercise price shall be no less than 100% of
the Fair Market Value per Share on the date of grant.

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               (ii) In the case of a Nonstatutory Stock Option, the per share Exercise Price shall
be such price as determined by the Administrator provided that if such eligible person is, at the
time of the grant of such Option, a Named Executive of the Company, the per share Exercise Price
shall be no less than 100% of the Fair Market Value on the date of grant if such Option is
intended to qualify as performance-based compensation under Section 162(m) of the Code.

               (iii) Notwithstanding the foregoing, Options may be granted with a per Share exercise
price other than as required above pursuant to a merger or other corporate transaction.

          (b) Permissible
Consideration. The consideration to be paid for the Shares to be
issued upon exercise of an Option, including the method of payment, shall be determined by the
Administrator (and, in the case of an Incentive Stock Option, shall be determined at the time of
grant) and may consist entirely of (1) cash; (2) check; (3) delivery of Optionee’s promissory note,
bearing a commercial rate of interest at the time of exercise and having such recourse, interest,
security and redemption provisions as the Administrator determines to be appropriate (subject to
the provisions of Section 153 of the Delaware General Corporation Law); (4) cancellation of
indebtedness; (5) other Shares that have a Fair Market Value on the date of surrender equal to the
aggregate exercise price of the Shares as to which the Option is exercised, provided that in the
case of Shares acquired, directly or indirectly, from the Company, such Shares must have been owned
by the Optionee for more than six months on the date of surrender (or such other period as may be
required to avoid the Company’s incurring an adverse accounting charge); (6) delivery of a properly
executed exercise notice together with such other documentation as the Administrator and a
securities broker approved by the Company shall require to effect exercise of the Option and prompt
delivery to the Company of the sale or loan proceeds required to pay the exercise price and any
applicable withholding taxes; or (7) any combination of the foregoing methods of payment. In making
its determination as to the type of consideration to accept, the Administrator shall consider if
acceptance of such consideration may be reasonably expected to benefit the Company and the
Administrator may, in its sole discretion, refuse to accept a particular form of consideration at
the time of any Option exercise.

     10. Exercise
of Option.

          (a) General.

               (i) Exercisability. Any Option granted hereunder shall be exercisable at such
times and under such conditions as determined by the Administrator, consistent with the term of the
Plan and reflected in the Option Agreement, including vesting requirements and/or performance
criteria with respect to the Company and/or the Optionee.

               (ii) Leave
of Absence. The Administrator shall have the discretion to determine
whether and to what extent the vesting of Options shall be tolled during any unpaid leave of
absence; provided, however, that in the absence of such determination, vesting of Options shall be
tolled during any such unpaid leave (unless otherwise required by the

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Applicable Laws), In the event of military leave, vesting shall toll during any unpaid portion of
such leave, provided that, upon a Participant’s returning from military leave (under conditions
that would entitle him or her to protection upon such return under the Uniform Services Employment
and Reemployment Rights Act), he or she shall be given vesting credit with respect to Options to
the same extent as would have applied had the Participant continued to provide services to the
Company throughout the leave on the same terms as he or she was providing services immediately
prior to such leave.

   
            (iii) Minimum Exercise Requirements. An Option may not be
exercised for a fraction of a Share. The Administrator may require that an Option be exercised as
to a minimum number of Shares, provided that such requirement shall not prevent an Optionee from
exercising the full number of Shares as to which the Option is then exercisable.

               (iv) Procedures for and Results of Exercise. An Option shall be deemed exercised
when written notice of such exercise has been given to the Company in accordance with, the terms of
the Option by the person entitled to exercise the Option and the Company has received full payment
for the Shares with respect to which the Option is exercised. Full payment may, as authorized by
the Administrator, consist of any consideration and method of payment allowable under Section 9(b)
of the Plan, provided that the Administrator may, in its sole discretion, refuse to accept any form
of consideration at the time of any Option exercise.

     Exercise of an Option in any manner shall result in a decrease in the number of Shares that
thereafter may be available, both for purposes of the Plan and for sale under the Option, by the
number of Shares as to which the Option is exercised.

               (v) Rights as Stockholder. Until the issuance of the Shares (as
evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer
agent of the Company), no right to vote or receive dividends or any other rights as a stockholder
shall exist with respect to the Optioned Stock, notwithstanding the exercise of the Option. No
adjustment will be made for a dividend or other right for which the record date is prior to the
date the stock certificate is issued, except as provided in Section 14 of the Plan.

          (b) Termination of Employment or Consulting Relationship. Except as otherwise set
forth in this Section 10(b), the Administrator shall establish and set forth in the applicable
Option Agreement the terms and conditions upon which an Option shall remain exercisable, if at all,
following termination of an Optionee’s Continuous Service Status, which provisions may be waived or
modified by the Administrator at any time. Unless the Administrator otherwise provides in the
Option Agreement, to the extent that the Optionee is not vested in Optioned Stock at the date of
termination of his or her Continuous Service Status, or if the Optionee (or other person entitled
to exercise the Option) does not exercise the Option to the extent so entitled within the time
specified in the Option Agreement or below (as applicable), the Option shall terminate and the
Optioned Stock underlying the unexercised portion of the Option shall revert to the Plan. In no
event may any Option be exercised after the expiration of the Option term as set forth in the
Option Agreement (and subject to Section 7).

-9-

 

     The following provisions (1) shall apply to the extent an Option Agreement does not specify
the terms and conditions upon which an Option shall terminate upon termination of an Optionee’s
Continuous Service Status, and (2) establish the minimum post-termination exercise periods that
may be set forth in an Option Agreement:

               (i) Termination other than Upon Disability or Death or for Cause.
In the event of termination of an Optionee’s Continuous Service Status, such Optionee may exercise
an Option for three months following such termination to the extent the Optionee was vested in the
Optioned Stock as of the date of such termination. No termination shall be deemed to occur and
this Section 10(b)(i) shall not apply if (i) the Optionee is a Consultant who becomes an Employee,
or (ii) the Optionee is an Employee who becomes a Consultant.

               (ii) Disability of Optionee. In the event of termination of an
Optionee’s Continuous Service Status as a result of his or her disability (including a disability
within the meaning of Section 22(e)(3) of the Code), such Optionee may exercise an Option at any
time within twelve months following such termination to the extent the Optionee was vested in the
Optioned Stock as of the date of such termination.

               (iii) Death of Optionee. In the event of the death of an Optionee during the
period of Continuous Service Status since the date of grant of the Option, or within three months
following termination of Optionee’s Continuous Service Status, the Option may be exercised by
Optionee’s estate or by a person who acquired the right to exercise the Option by bequest or
inheritance at any time within twelve months following the date of death, but only to the extent
the Optionee was vested in the Optioned Stock as of the date of death or, if earlier, the date the
Optionee’s Continuous Service Status terminated.

               (iv) Termination for Cause. In the event of termination of an
Optionee’s Continuous Service Status for Cause, any Option (including any exercisable portion
thereof) held by such Optionee shall immediately terminate in its entirety upon first notification
to the Optionee of termination of the Optionee’s Continuous Service Status. If an Optionee’s
employment or consulting relationship with the Company is suspended pending an investigation of
whether the Optionee shall be terminated for Cause, all the Optionee’s rights under any Option
likewise shall be suspended during the investigation period and the Optionee shall have no right to
exercise any Option. This Section 10(b)(iv) shall apply with equal effect to vested Shares acquired
upon exercise of an Option granted on any date on which the Common Stock is not a Listed Security
to a person other than an officer, Director or Consultant, in that the Company shall have the right
to repurchase such Shares from the Participant upon the following terms: (A) the repurchase is made
within 90 days of termination of the Participant’s Continuous Service Status for Cause at the Fair
Market Value of the Shares as of the date of termination, (B) consideration for the repurchase
consists of cash or cancellation of purchase money indebtedness, and (C) the repurchase right
terminates upon the effective date of the Company’s initial public offering of its Common Stock.
With respect to vested Shares issued upon exercise of an Option granted to any officer, Director or
Consultant, the Company’s right to repurchase such Shares upon termination of the Participant’s
Continuous Service Status for Cause shall be made at the Participant’s original cost for the Shares
and shall be effected pursuant to such terms and

-10-

 

conditions, and at such time, as the Administrator shall determine. Nothing in this Section
10(b)(iv) shall in any way limit the Company’s right to purchase unvested Shares issued upon
exercise of an Option as set forth in the applicable Option Agreement.

          (c) Buyout Provisions. The Administrator may at any time offer to buy out for a
payment in cash or Shares an Option previously granted under the Plan based on such terms and
conditions as the Administrator shall establish and communicate to the Optionee at the time that
such offer is made.

     11. Stock Purchase Rights.

          (a) Rights to Purchase. When the Administrator determines that it will offer Stock
Purchase Rights under the Plan, it shall advise the offeree in writing of the terms, conditions and
restrictions related to the offer, including the number of Shares that such person shall be
entitled to purchase, the price to be paid, and the time within which such person must accept such
offer. The offer to purchase Shares subject to Stock Purchase Rights shall be accepted by execution
of a Restricted Stock Purchase Agreement in the form determined by the Administrator.

          (b) Repurchase Option.

               (i) General. Unless the Administrator determines otherwise, the Restricted Stock
Purchase Agreement shall grant the Company a repurchase option exercisable upon the voluntary or
involuntary termination of the purchaser’s employment with the Company for any reason (including
death or disability). The purchase price for Shares repurchased pursuant to the Restricted Stock
Purchase Agreement shall be the original purchase price paid by the purchaser and may be paid by
cancellation of any indebtedness of the purchaser to the Company. The repurchase option shall lapse
at such rate as the Administrator may determine.

               (ii) Leave of Absence. The Administrator shall have the discretion to determine
whether and to what extent the lapsing of Company repurchase rights shall be tolled during any
unpaid leave of absence; provided, however, that in the absence of such determination, such lapsing
shall be tolled during any such unpaid leave (unless otherwise required by the Applicable Laws). In
the event of military leave, the lapsing of Company repurchase rights shall toll during any unpaid
portion of such leave, provided that, upon a Participant’s returning from military leave (under
conditions that would entitle him or her to protection upon such return under the Uniform Services
Employment and Reemployment Rights Act), he or she shall be given “vesting” credit with respect to
Shares purchased pursuant to the Restricted Stock Purchase Agreement to the same extent as would
have applied had the Participant continued to provide services to the Company throughout the leave
on the same terms as he or she was providing services immediately prior to such leave.

               (iii) Termination for Cause. In the event of termination of a Participant’s
Continuous Service Status for Cause, the Company shall have the right to repurchase from the
Participant vested Shares issued upon exercise of a Stock Purchase Right at

-11-

 

the Participant’s original cost for the Shares. Such repurchase shall be effected pursuant to
such terms and conditions, and at such time, as the Administrator shall determine. Nothing in this
Section 1l(b)(ii) shall in any way limit the Company’s right to purchase unvested Shares as set
forth in the applicable Restricted Stock Purchase Agreement.

          (c) Other Provisions. The Restricted Stock Purchase Agreement shall contain such other
terms, provisions and conditions not inconsistent with the Plan as may be determined by the
Administrator in its sole discretion. In addition, the provisions of Restricted Stock Purchase
Agreements need not be the same with respect to each purchaser.

          (d) Rights as a Stockholder. Once the Stock Purchase Right is exercised, the purchaser
shall have the rights equivalent to those of a stockholder, and shall be a stockholder when his or
her purchase is entered upon the records of the duly authorized transfer agent of the Company. No
adjustment will be made for a dividend or other right for which the
record date is prior to the
date the Stock Purchase Right is exercised, except as provided in Section 14 of the Plan.

     12. Taxes.

          (a) As a condition of the exercise of an Option or Stock Purchase Right granted under the
Plan, the Participant (or in the case of the Participant’s death, the person exercising the Option
or Stock Purchase Right) shall make such arrangements as the Administrator may require for the
satisfaction of any applicable federal, state, local or foreign withholding tax obligations that
may arise in connection with the exercise of the Option or Stock Purchase Right and the issuance of
Shares. The Company shall not be required to issue any Shares under the Plan until such obligations
are satisfied. If the Administrator allows the withholding or surrender of Shares to satisfy a
Participant’s tax withholding obligations under this Section 12 (whether pursuant to Section 12(c),
(d) or (e), or otherwise), the Administrator shall not allow Shares to be withheld in an amount
that exceeds the minimum statutory withholding rates for federal and state tax purposes, including
payroll taxes.

          (b) In the case of an Employee and in the absence of any other arrangement, the Employee shall
be deemed to have directed the Company to withhold or collect from his or her compensation an
amount sufficient to satisfy such tax obligations from the next payroll payment otherwise payable
after the date of an exercise of the Option or Stock Purchase Right.

          (c) This Section 12(c) shall apply only after the date, if any, upon which the Common Stock
becomes a Listed Security. In the case of Participant other than an Employee (or in the case of an
Employee where the next payroll payment is not sufficient to satisfy such tax obligations, with
respect to any remaining tax obligations), in the absence of any other arrangement and to the
extent permitted under the Applicable Laws, the Participant shall be deemed to have elected to have
the Company withhold from the Shares to be issued upon exercise of the Option or Stock Purchase
Right that number of Shares having a Fair Market Value determined as of the applicable Tax Date (as
defined below) equal to the amount required to be withheld. For purposes of this Section 12, the
Fair Market Value of the Shares to be

-12-

 

withheld shall be determined on the date that the amount of tax to be withheld is
to be determined under the Applicable Laws (the “Tax Date”).

          (d) If permitted by the Administrator, in its discretion, a Participant may satisfy his or her
tax withholding obligations upon exercise of an Option or Stock Purchase Right by surrendering to
the Company Shares that have a Fair Market Value determined as of the applicable Tax Date equal to
the amount required to be withheld. In the case of shares previously acquired from the Company that
are surrendered under this Section 12(d), such Shares must have been owned by the Participant for
more than six (6) months on the date of surrender (or such other period of time as is required for
the Company to avoid adverse accounting charges).

          (e) Any election or deemed election by a Participant to have Shares withheld to satisfy tax
withholding obligations under Section 12(c) or (d) above shall be irrevocable as to the particular
Shares as to which the election is made and shall be subject to the consent or disapproval of the
Administrator. Any election by a Participant under Section 12(d) above must be made on or prior to
the applicable Tax Date.

          (f) In the event an election to have Shares withheld is made by a Participant and the Tax Date
is deferred under Section 83 of the Code because no election is filed under Section 83(b) of the
Code, the Participant shall receive the full number of Shares with respect to which the Option or
Stock Purchase Right is exercised but such Participant shall be unconditionally obligated to tender
back to the Company the proper number of Shares on the Tax Date.

     13. Non-Transferability of Options and Stock Purchase Rights.

          (a) General. Except as set forth in this Section 13, Options and Stock Purchase Rights
may not be sold, pledged, assigned, hypothecated, transferred or disposed of in any manner other
than by will or by the laws of descent or distribution. The designation of a beneficiary by an
Optionee will not constitute a transfer. An Option or Stock Purchase Right may be exercised, during
the lifetime of the holder of an Option or Stock Purchase Right, only by such holder or a
transferee permitted by this Section 13.

          (b) Limited Transferability Rights. Notwithstanding anything else in this Section 13,
prior to the date, if any, on which the Common Stock becomes a Listed Security, the Administrator
may in its discretion grant Nonstatutory Stock Options that may be transferred by instrument to an
inter vivos or testamentary trust in which the Options are to be passed to beneficiaries upon the
death of the trustor (settlor) or by gift to “Immediate Family” (as defined below), on such terms
and conditions as the Administrator deems appropriate. Following the date, if any, on which the
Common Stock becomes a Listed Security, the Administrator may in its discretion grant transferable
Nonstatutory Stock Options pursuant to Option Agreements specifying the manner in which such
Nonstatutory Stock Options are transferable. “Immediate
Family” means any child, stepchild,
grandchild, parent, stepparent, grandparent, spouse, sibling, mother-in-law, father-in-law,
son-in-law, daughter-in-law, brother-in-law, or sister-in-law, and shall include adoptive
relationships.

-13-

 

     14. Adjustments Upon Changes in Capitalization, Merger or Certain Other
Transactions.

          (a) Changes in Capitalization. Subject to any action required under Applicable Laws by
the stockholders of the Company, the number of Shares of Common Stock covered by each outstanding
award, and the number of Shares of Common Stock that have been authorized for issuance under the
Plan but as to which no awards have yet been granted or that have been returned to the Plan upon
cancellation or expiration of an award, as well as the price per Share of Common Stock covered by
each such outstanding award, shall be proportionately adjusted for any increase or decrease in the
number of issued Shares of Common Stock resulting from a stock split, reverse stock split, stock
dividend, combination, recapitalization or reclassification of the Common Stock, or any other
increase or decrease in the number of issued Shares of Common Stock effected without receipt of
consideration by the Company; provided, however, that conversion of any convertible securities of
the Company shall not be deemed to have been “effected without receipt of consideration.” Such
adjustment shall be made by the Administrator, whose determination in that respect shall be final,
binding and conclusive. Except as expressly provided herein, no issuance by the Company of shares
of stock of any class, or securities convertible into shares of stock of any class, shall affect,
and no adjustment by reason thereof shall be made with respect to, the number or price of Shares of
Common Stock subject to an award.

          (b) Dissolution or Liquidation. In the event of the dissolution or liquidation of the
Company, each Option and Stock Purchase Right will terminate immediately prior to the consummation
of such action, unless otherwise determined by the Administrator.

          (c) Corporate Transaction. In the event of a Corporate Transaction, each outstanding
Option or Stock Purchase Right shall be assumed or an equivalent option or right shall be
substituted by such successor corporation or a parent or subsidiary of such successor corporation
(the “Successor Corporation”), unless the Successor Corporation does not agree to assume the award
or to substitute an equivalent option or right, in which case such Option or Stock Purchase Right
shall terminate upon the consummation of the transaction.

          Notwithstanding the above, in the event of a Change of Control and irrespective of whether
outstanding awards are being assumed, substituted or terminated in connection with the transaction,
the vesting and exercisability of each outstanding Option shall accelerate such that the Options
shall become vested and exercisable to the extent of twenty-five percent (25%) of the Shares then
unvested, and any repurchase right of the Company with respect to shares issued upon exercise of an
Option or a Stock Purchase Right shall lapse as to twenty-five percent (25%) of the Shares subject
to such repurchase right prior to consummation of the Change of Control, in each case effective as
of immediately prior to consummation of the transaction. To the extent that an Option is not
exercised prior to consummation of a Corporate Transaction in which the Option is not being assumed
or substituted, such Option shall terminate upon such consummation and the Administrator shall
notify the Optionee or holder of such fact at least five (5) days prior to the date on which the
Option terminates.

-14-

 

          For purposes of this Section 14(c), an Option or a Stock Purchase Right shall be considered
assumed, without limitation, if, at the time of issuance of the stock or other consideration upon
a Corporate Transaction or a Change of Control, as the case may be, each holder of an Option or
Stock Purchase Right would be entitled to receive upon exercise of the award the same number and
kind of shares of stock or the same amount of property, cash or securities as such holder would
have been entitled to receive upon the occurrence of the transaction if the holder had been,
immediately prior to such transaction, the holder of the number of Shares of Common Stock covered
by the award at such time (after giving effect to any adjustments in the number of Shares covered
by the Option or Stock Purchase Right as provided for in this Section 14); provided that if such
consideration received in the transaction is not solely common stock of the Successor Corporation,
the Administrator may, with the consent of the Successor Corporation, provide for the
consideration to be received upon exercise of the award to be solely common stock of the Successor
Corporation equal to the Fair Market Value of the per Share consideration received by holders of
Common Stock in the transaction.

          (e) Certain Distributions. In the event of any distribution to the Company’s
stockholders of securities of any other entity or other assets (other than dividends payable in
cash or stock of the Company) without receipt of consideration by the Company, the Administrator
may, in its discretion, appropriately adjust the price per Share of Common Stock covered by each
outstanding Option or Stock Purchase Right to reflect the effect of such distribution.

     15. Time
of Granting Options and Stock Purchase Rights. The date of grant of an Option or
Stock Purchase Right shall, for all purposes, be the date on which the Administrator makes the
determination granting such Option or Stock Purchase Right, or such other date as is determined by
the Administrator, provided that in the case of any Incentive Stock Option, the grant date shall be
the later of the date on which the Administrator makes the determination granting such Incentive
Stock Option or the date of commencement of the Optionee’s employment relationship with the
Company. Notice of the determination shall be given to each Employee or Consultant to whom an
Option or Stock Purchase Right is so granted within a reasonable time after the date of such grant.

     16. Amendment and Termination of the Plan.

          (a) Authority to Amend or Terminate. The Board may at any time amend, alter, suspend
or discontinue the Plan, but no amendment, alteration, suspension or discontinuation (other than an
adjustment pursuant to Section 14 above) shall be made that would materially and adversely affect
the rights of any Optionee or holder of Stock Purchase Rights under any outstanding grant, without
his or her consent. In addition, to the extent necessary and desirable to comply with the
Applicable Laws, the Company shall obtain stockholder approval of any Plan amendment in such a
manner and to such a degree as required.

          (b) Effect of Amendment or Termination. Except as to amendments which the
Administrator has the authority under the Plan to make unilaterally, no amendment or termination of
the Plan shall materially and adversely affect Options or Stock Purchase Rights already granted,
unless mutually agreed otherwise between the Optionee or holder of the Stock

-15-

 

Purchase Rights and the Administrator, which agreement must be in writing and signed by the
Optionee or holder and the Company.

     17. Conditions Upon Issuance of Shares. Notwithstanding any other provision of the
Plan or any agreement entered into by the Company pursuant to the Plan, the Company shall not be
obligated, and shall have no liability for failure, to issue or deliver any Shares under the Plan
unless such issuance or delivery would comply with the Applicable Laws, with such compliance
determined by the Company in consultation with its legal counsel. As a condition to the exercise of
an Option or Stock Purchase Right, the Company may require the person exercising the award to
represent and warrant at the time of any such exercise that the Shares are being purchased only for
investment and without any present intention to sell or distribute such Shares if, in the opinion
of counsel for the Company, such a representation is required by law.

     18. Reservation of Shares. The Company, during the term of this Plan, will at all
times reserve and keep available such number of Shares as shall be sufficient to satisfy the
requirements of the Plan.

     19. Agreements. Options and Stock Purchase Rights shall be evidenced by Option
Agreements and Restricted Stock Purchase Agreements, respectively, in such form(s) as the
Administrator shall from time to time approve.

     20. Stockholder Approval. If required by the Applicable Laws, continuance of the Plan
shall be subject to approval by the stockholders of the Company within twelve (12) months before or
after the date the Plan is adopted. Such stockholder approval shall be obtained in the manner and
to the degree required under the Applicable Laws.

     21. Information and Documents to Optionees and Purchasers. Prior to the date, if any,
upon which the Common Stock becomes a Listed Security and if required by the Applicable Laws, the
Company shall provide financial statements at least annually to each Optionee and to each
individual who acquired Shares pursuant to the Plan, during the period such Optionee or purchaser
has one or more Options or Stock Purchase Rights outstanding, and in the case of an individual who
acquired Shares pursuant to the Plan, during the period such individual owns such Shares. The
Company shall not be required to provide such information if the issuance of Options or Stock
Purchase Rights under the Plan is limited to key employees whose duties in connection with the
Company assure their access to equivalent information.

     22. Awards Granted to California Residents. Options or Stock Purchase Rights granted
under the Plan on any date on which the Common Stock in not a Listed Security to persons resident
in California shall be subject to the provisions set forth in Attachment A hereto. To the
extent the provisions of the Plan conflict with the provisions set
forth on Attachment A, the
provisions on Attachment A shall govern the terms of such Options.

-16-

 

Attachment A

Provisions Applicable to Award Recipients 

Resident in California

     The following additional terms shall apply to (i) Options and Stock Purchase Rights granted on
any date the Common Stock is not a Listed Security, and (ii) any Shares issued upon exercise of
such awards on any date the Common Stock is not a Listed Security, which are granted or issued to
persons resident in California as of the date of grant or issuance, as applicable (each such
person, a “California recipient”):

     1. In the case of an Option, whether an Incentive Stock Option or a Nonqualified Stock Option,
that is granted to a California Recipient who, at the time of the grant of such Option, owns stock
representing more than 10% of the total combined voting power of all classes of stock of the
Company or any Parent or Subsidiary, the per Share exercise price shall be no less than 110% of the
Fair Market Value on the grant date.

     2. In the case of a Nonqualified Stock Option that is granted to any other California
Recipient, the per Share exercise price shall be no less than 85% of the Fair Market Value per
Share on the grant date.

     3. In the case of a Stock Purchase Right granted to a California Recipient, the purchase price
applicable to stock purchased under such Stock Award shall not be less than 85% of the Fair Market
Value of the Shares as of the Grant Date, or, in the case of a person owning stock representing
more than 10% of the total combined voting power of all classes of stock of the Company or any
Parent or Subsidiary, the price shall not be less than 100% of the Fair Market Value of the Shares
as of the grant date.

     4. With respect to an Option or Stock Purchase Right issued to any California Recipient who is
not an Officer, Director or Consultant, such Option or Stock Purchase Right shall become
exercisable, or any repurchase option in favor of the Company shall lapse, at the rate of at least
20% per year over five years from the grant date.

     5. The following rules shall apply to an Option issued to any California Recipient or to stock
issued to a California Recipient upon exercise of a Stock Purchase Right, in the event of
termination of the California Recipient’s employment or services with the Company:

          (a) If such termination was for reasons other than death or disability, the California
Recipient shall have at least 30 days after the date of such termination (but in no event later
than the expiration of the term of such Option established by the Plan Administrator as of the
grant date) to exercise such Option.

          (b) If such termination was on account of the death or disability of the California Recipient,
the holder of the Option may, but only within six months from the date of such termination (but in
no event later than the expiration date of the term of such Option established by the Plan
Administrator as of the grant date), exercise the Option to the extent the California Recipient was
otherwise entitled to exercise it at the date of such termination. To the extent that the
California Recipient was not entitled to exercise the Option at the date of

 

 

termination, or if the holder does not exercise such Option to the extent so entitled within
six months from the date of termination, the Option shall terminate and the Common Stock
underlying the unexercised portion of the Option shall revert to the Plan.

          (c) Section 10(b)(iv) of the Plan shall apply with equal effect to vested Shares acquired upon
exercise of an Option granted prior to the date, if any, upon which the Common Stock becomes a
Listed Security to a person other than an Officer, Director or Consultant, in that the Company
shall have the right to repurchase such Shares from the Participant upon the following terms: (A)
the repurchase is made within 90 days of termination of the Participant’s Continuous Service for
Cause at the Fair Market Value of the Shares as of the date of termination, (B) consideration for
the repurchase consists of cash or cancellation of purchase money indebtedness, and (C) the
repurchase right terminates upon the effective date of the Company’s initial public offering of its
Common Stock. With respect to vested Shares issued upon exercise of an Option granted to any
Officer, Director or Consultant, the Company’s right to repurchase such Shares upon termination of
the Participant’s Continuous Service for Cause shall be made at the Participant’s original cost for
the Shares and shall be effected pursuant to such terms and conditions, and at such time, as the
Administrator shall determine. Nothing in this Section 10(b)(iv) shall in any way limit the
Company’s right to purchase unvested Shares issued upon exercise
of an Option as set forth in the
applicable Option Agreement.

          (d) In the event of termination of a Participant’s Continuous Service Status for Cause, the
Company shall have the right to repurchase from the Participant vested Shares issued upon exercise
of a Stock Purchase Right granted on a date on which the Common Stock is not a Listed Security to
any person other than an Officer, Director or Consultant prior to the date, if any, upon which the
Common stock becomes a Listed Security upon the following terms: (A) the repurchase must be made
within 90 days of termination of the Participant’s Continuous Service for Cause at the Fair Market
Value of the Shares as of the date of termination, (B) consideration for the repurchase consists of
cash or cancellation of purchase money indebtedness, and (C) the repurchase right terminates upon
the effective date of the Company’s initial public offering of its Common Stock. With respect to
vested Shares issued upon exercise of a Stock Purchase Right granted to any officer, Director or
Consultant, the Company’s right to repurchase such Shares upon termination of such Participant’s
Continuous Service for Cause shall be made at the Participant’s original cost for the Shares and
shall be effected pursuant to such terms and conditions, and at such time, as the Administrator
shall determine.

     6. The Company shall provide financial statements at least annually to each California
Recipient during the period such person has one or more Options or Stock Awards outstanding, and in
the case of an individual who acquired Shares pursuant to the Plan, during the period such
individual owns such Shares. The Company shall not be required to provide such information if the
issuance of awards under the Plan is limited to key employees whose duties in connection with the
Company assure their access to equivalent information.

     7. Unless defined below or otherwise in this Attachment, Capitalized terms shall have the
meanings set forth in the Plan. For purposes of this Attachment, “Officer” means a
person who is an officer of the Company within the meaning of Section 16(a) of the Exchange
Act and the rules and regulations promulgated thereunder.

-2-

 

THERION SOFTWARE CORPORATION

2004 STOCK PLAN

NOTICE OF STOCK OPTION GRANT

«Optionee» (“Optionee”)

«OptioneeAddress»

     You have been granted an option to purchase Common Stock of Therion Software
Corporation (the “Company”) as follows:

	 	 	 	 	 
	 

	 	Board Approval Date:
	 	«BoardApprovalDate»
	 
	 	 	 	 
	 

	 	Date of Grant (Later of Board
Approval Date or Commencement
of Employment/Consulting):
	 	«GrantDate»
	 
	 	 	 	 
	 

	 	Exercise Price per Share:
	 	«ExercisePrice»
	 
	 	 	 	 
	 

	 	Total Number of Shares Granted:
	 	«NoOfShares»
	 
	 	 	 	 
	 

	 	Type of Option:
	 	«TypeofOption»
	 
	 	 	 	 
	 

	 	Expiration Date:
	 	«ExpirDate»
	 
	 	 	 	 
	 

	 	Vesting Commencement Date:
	 	«VestingCommenceDate»
	 
	 	 	 	 
	 

	 	Vesting/Exercise Schedule:
	 	So long as your employment or consulting
relationship with the Company continues, the Shares
underlying this Option shall vest and become
exercisable in accordance with the following schedule:
«Vesting». This Option may be exercised for up to
                     shares at any time after the Date of
Grant, all of which shall be subject to continued
vesting as provided in the Stock Option Agreement

 

 

	 	 	 	 	 
	 

	 	 	 	Termination Period: This Option may be
exercised for three months after termination of
employment or consulting relationship except as set out
in Section 5 of the Stock Option Agreement (but in no
event later than the Expiration Date). Optionee is
responsible for keeping track of these exercise periods
following termination for any reason of his or her
service relationship with the Company. The Company will
not provide further notice of such periods.
	 
	 	 	 	 
	 

	 	Transferability:
	 	This Option may not be transferred.

     By your signature and the signature of the Company’s representative below, you and the Company
agree that this option is granted under and governed by the terms and conditions of the Therion
Software Corporation 2004 Stock Plan and the Stock Option Agreement, both of which are attached and
made a part of this document.

     In addition, you agree and acknowledge that your rights to any Shares underlying the Option
will be earned only as you provide services to the Company over time, that the grant of the Option
is not as consideration for services you rendered to the Company prior to your Vesting Commencement
Date, and that nothing in this Notice or the attached documents confers upon you any right to
continue your employment or consulting relationship with the Company for any period of time, nor
does it interfere in any way with your right or the Company’s right to terminate that relationship
at any time, for any reason, with or without cause.

	 	 	 	 	 	 	 
	 	 	Therion Software Corporation	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

«Optionee»

	 	Name:
	 	 

	 	 
	 

	 	Title:
	 	 

	 	 
	 

	 	 	 	 

	 	 

-2-

 

THERION SOFTWARE CORPORATION

2004 STOCK PLAN

STOCK OPTION AGREEMENT

     1. Grant of Option. Therion Software Corporation, a Delaware corporation (the
“Company”), hereby grants to optionee (“Optionee”), an option (the “Option”) to purchase the total
number of shares of Common Stock (the “Shares”) set forth in the Notice of Stock Option Grant (the
“Notice”), at the exercise price per Share set forth in the Notice (the “Exercise Price”) subject
to the terms, definitions and provisions of the Therion Software Corporation 2004 Stock Plan (the
“Plan”) adopted by the Company, which is incorporated in this Agreement by reference. Unless
otherwise defined in this Agreement, the terms used in this Agreement shall have the meanings
defined in the Plan.

     2. Designation of Option. This Option is intended to be an Incentive Stock Option as
defined in Section 422 of the Code only to the extent so designated in the Notice, and to the
extent it is not so designated or to the extent the Option does not qualify as an Incentive Stock
Option, it is intended to be a Nonstatutory Stock Option.

     Notwithstanding the above, if designated as an Incentive Stock Option, in the event that the
Shares subject to this Option (and all other Incentive Stock Options granted to Optionee by the
Company or any Parent or Subsidiary, including under other plans of the Company) that first become
exercisable in any calendar year have an aggregate fair market value (determined for each Share as
of the date of grant of the option covering such Share) in excess of $100,000, the Shares in excess
of $100,000 shall be treated as subject to a Nonstatutory Stock Option, in accordance with Section
5(c) of the Plan.

     3. Exercise of Option. This Option shall be exercisable during its term in accordance
with the Vesting/Exercise Schedule set out in the Notice and with the provisions of Section 10 of
the Plan as follows:

          (a) Right
to Exercise.

               (i) This Option may not be exercised for a fraction of a share.

               (ii) In the event of Optionee’s death, disability or other termination of employment, the
exercisability of the Option is governed by Section 5 below, subject to the limitations contained
in this Section 3.

               (iii) In no event may this Option be exercised after the Expiration Date of the Option as
set forth in the Notice.

 

 

          (b) 
Method of Exercise.

               (i) This Option shall be exercisable by execution and delivery of the Exercise Notice and
Restricted Stock Purchase Agreement attached hereto as Exhibit A (the “Exercise Agreement”)
or of any other form of written notice approved for such purpose by the Company which shall state
Optionee’s election to exercise the Option, the number of Shares in respect of which the Option is
being exercised, and such other representations and agreements as to the holder’s investment intent
with respect to such Shares as may be required by the Company
pursuant to the provisions of the
Plan. Such written notice shall be signed by Optionee and shall be delivered to the Company by such
means as are determined by the Plan Administrator in its discretion to constitute adequate
delivery. The written notice shall be accompanied by payment of the Exercise Price. This Option
shall be deemed to be exercised upon receipt by the Company of such written notice accompanied by
the Exercise Price.

               (ii) As a condition to the exercise of this Option and as further set forth in Section 12
of the Plan, Optionee agrees to make adequate provision for federal, state or other tax withholding
obligations, if any, which arise upon the vesting or exercise of the Option, or disposition of
Shares, whether by withholding, direct payment to the Company, or otherwise.

               (iii) The Company is not obligated, and will have no liability for failure, to issue or
deliver any Shares upon exercise of the Option unless such issuance or delivery would comply with
the Applicable Laws, with such compliance determined by the Company in consultation with its legal
counsel. This Option may not be exercised until such time as the Plan has been approved by the
stockholders of the Company, or if the issuance of such Shares upon such exercise or the method of
payment of consideration for such shares would constitute a violation of any applicable federal or
state securities or other law or regulation, including any rule under Part 221 of Title 12 of the
Code of Federal Regulations as promulgated by the Federal Reserve Board. As a condition to the
exercise of this Option, the Company may require Optionee to make any representation and warranty
to the Company as may be required by the Applicable Laws. Assuming such compliance, for income tax
purposes the Shares shall be considered transferred to Optionee on the date on which the Option is
exercised with respect to such Shares.

     4. Method of Payment. Payment of the Exercise Price shall be by any of the
following, or a combination of the following, at the election of Optionee:

          (a) cash or check;

          (b) prior to the date, if any, upon which the Common Stock becomes a Listed Security, by
surrender of other shares of Common Stock of the Company that have an aggregate Fair Market Value
on the date of surrender equal to the Exercise Price of the Shares as to which the Option is being
exercised. In the case of shares acquired directly or indirectly from the Company, such shares must
have been owned by Optionee for more than six (6) months on the date of surrender (or such other
period of time as is necessary to avoid the Company’s incurring adverse accounting charges); or

-2-

 

          (c) following the date, if any, upon which the Common Stock is a Listed Security,
delivery of a properly executed exercise notice together with irrevocable instructions to a broker
approved by the Company to deliver promptly to the Company the amount of sale or loan proceeds
required to pay the exercise price.

     5. Termination of Relationship. Following the date of termination of Optionee’s
Continuous Service Status for any reason (the “Termination
Date”), Optionee may exercise the
Option only as set forth in the Notice and this Section 5. To the extent that Optionee is not
entitled to exercise this Option as of the Termination Date, or if Optionee does not exercise
this Option within the Termination Period set forth in the Notice or the termination periods set
forth below, the Option shall terminate in its entirety. In no event, may any Option be exercised
after the Expiration Date of the Option as set forth in the Notice.

          (a)
 Termination. In the event of termination of Optionee’s Continuous Service Status
other than as a result of Optionee’s disability or death or for Cause (as defined in the Plan),
Optionee may, to the extent otherwise so entitled at the date of such
termination (the “Termination
Date”), exercise this Option during the Termination Period set forth in the Notice.

          (b) Other Terminations. In connection with any termination other than a termination
covered by Section 5(a), Optionee may exercise the Option only as described below:

               (i) Termination upon Disability of Optionee. In the event of termination of
Optionee’s Continuous Service Status as a result of Optionee’s disability, Optionee may, but only
within twelve months from the Termination Date, exercise this Option to the extent Optionee was
entitled to exercise it as of such Termination Date.

               (ii) Death
of Optionee. In the event of the death of Optionee (a) during the term of this Option and while an Employee or Consultant of the Company and having been
in Continuous Service Status since the date of grant of the Option, or (b) within three months
after Optionee’s Termination Date, the Option may be exercised at any time within twelve months
following the date of death by Optionee’s estate or by a person who acquired the right to exercise
the Option by bequest or inheritance, but only to the extent Optionee was entitled to exercise the
Option as of the Termination Date.

               (iii) Termination for Cause. In the event Optionee’s Continuous Service Status is
terminated for Cause, the Option shall terminate immediately upon such termination for Cause as set
forth in Section 10(b)(iv) of the Plan. In the event Optionee’s employment or consulting
relationship with the Company is suspended pending investigation of whether such relationship shall
be terminated for Cause, all Optionee’s rights under the Option, including the right to exercise
the Option, shall be suspended during the investigation period, also as set forth in Section
10(b)(iv) of the Plan.

     6. Non-Transferability of Option. This Option may not be transferred in any
manner otherwise than by will or by the laws of descent or distribution and may be exercised

-3-

 

during the lifetime of Optionee only by him or her. The terms of this Option shall be
binding upon the executors, administrators, heirs, successors and
assigns of Optionee.

     7. Tax Consequences. Below is a brief summary as of the date of this Option
of certain of the federal tax consequences of exercise of this Option and disposition of the Shares
under the laws in effect as of the Date of Grant. THIS SUMMARY IS INCOMPLETE, AND THE TAX LAWS AND
REGULATIONS ARE SUBJECT TO CHANGE. OPTIONEE SHOULD CONSULT A TAX ADVISER BEFORE EXERCISING THIS
OPTION OR DISPOSING OF THE SHARES.

          (a) Incentive Stock Option.

               (i) Tax Treatment upon Exercise and Sale of Shares. If this Option qualifies as
an Incentive Stock Option, there will be no regular federal income tax liability upon the exercise
of the Option, although the excess, if any, of the fair market value of the Shares on the date of
exercise over the Exercise Price will be treated as an adjustment to the alternative minimum tax
for federal tax purposes and may subject Optionee to the alternative minimum tax in the year of
exercise. If Shares issued upon exercise of an Incentive Stock Option are held for at least one
year after exercise and are disposed of at least two years after the Option grant date, any gain
realized on disposition of the Shares will also be treated as long-term capital gain for federal
income tax purposes. If Shares issued upon exercise of an Incentive Stock Option are disposed of
within such one-year period or within two years after the Option grant date, any gain realized on
such disposition will be treated as compensation income (taxable at ordinary income rates) to the
extent of the difference between the Exercise Price and the lesser of (i) the fair market value of
the Shares on the date of exercise, or (ii) the sale price of the Shares.

               (ii) Notice of Disqualifying Dispositions. With respect to any Shares issued upon
exercise of an Incentive Stock Option, if Optionee sells or otherwise disposes of such Shares on or
before the later of (i) the date two years after the Option grant date, or (ii) the date one year
after the date of exercise, Optionee shall immediately notify the Company in writing of such
disposition. Optionee acknowledges and agrees that he or she may be subject to income tax
withholding by the Company on the compensation income recognized by Optionee from the early
disposition by payment in cash or out of the current earnings paid to Optionee.

          (b) Nonstatutory
Stock Option. If this Option does not qualify as an Incentive Stock
Option, there may be a regular federal (and state) income tax liability upon the exercise of the
Option. Optionee will be treated as having received compensation income (taxable at ordinary income
tax rates) equal to the excess, if any, of the fair market value of the Shares on the date of
exercise over the Exercise Price. If Optionee is an Employee, the Company will be required to
withhold from Optionee’s compensation or collect from Optionee and pay to the applicable taxing
authorities an amount equal to a percentage of this compensation income at the time of exercise. If
Shares issued upon exercise of a Nonstatutory Stock Option are held for at least one year, any gain
realized on disposition of the Shares will be treated as long-term capita! gain for federal income
tax purposes.

-4-

 

     8. Lock-Up Agreement. In connection with the initial public offering of the
Company’s securities and upon request of the Company or the underwriters managing any underwritten
offering of the Company’s securities, Optionee hereby agrees not to sell, make any short sale of,
loan, grant any option for the purchase of, or otherwise dispose of any securities of the Company
however and whenever acquired (other than those included in the
registration) without the prior
written consent of the Company or such underwriters, as the case may be, for such period of time
(not to exceed 180 days) from the effective date of such registration as may be requested by the
Company or such managing underwriters and to execute an agreement reflecting the foregoing as may
be requested by the underwriters at the time of the public offering.

     9. Effect of Agreement. Optionee acknowledges receipt of a copy of the Plan and
represents that he or she is familiar with the terms and provisions thereof (and has had an
opportunity to consult counsel regarding the Option terms), and hereby accepts this Option and
agrees to be bound by its contractual terms as set forth herein and in the Plan. Optionee hereby
agrees to accept as binding, conclusive and final all decisions and interpretations of the Plan
Administrator regarding any questions relating to the Option. In the event of a conflict between
the terms and provisions of the Plan and the terms and provisions of the Notice and this Agreement,
the Plan terms and provisions shall prevail. The Option, including the Plan, constitutes the entire
agreement between Optionee and the Company on the subject matter hereof and supersedes all
proposals, written or oral, and all other communications between the parties relating to such
subject matter.

-5-

 

EXHIBIT A 

THERION SOFTWARE CORPORATION

2004 STOCK PLAN

EXERCISE NOTICE AND RESTRICTED STOCK PURCHASE AGREEMENT

     This
Agreement (“Agreement”) is made as
of                                        ,
by and between
Therion Software Corporation, a Delaware corporation (the
“Company”), and                                        
(“Optionee” or “Purchaser”). To the extent any capitalized terms used in this Agreement are not
defined, they shall have the meaning ascribed to them in the 2004 Stock Plan.

     1. Exercise of Option. Subject to the terms and conditions hereof, Purchaser
hereby
elects to exercise his or her option to
purchase                     shares of the Common Stock (the
“Shares”) of the Company under and pursuant to the
Company’s 2004 Stock Plan (the “Plan”)
and the Notice of Stock Option Grant and Stock Option Agreement granted on                    
(the “Option Agreement”). The purchase price for the Shares shall be $                    per Share for a
total purchase price of $                    . The term “Shares” refers to the purchased Shares and all
securities received in replacement of the Shares or as stock dividends or splits, all securities
received in replacement of the Shares in a recapitalization, merger, reorganization, exchange or
the like, and all new, substituted or additional securities or other properties to which Purchaser
is entitled by reason of Purchaser’s ownership of the Shares.

     2. Time
and Place of Exercise. The purchase and sale of the Shares under this
Agreement shall occur at the principal office of the Company simultaneously with the execution and
delivery of this Agreement in accordance with the provisions of Section 3(b) of the Option
Agreement. On such date, the Company will deliver to Purchaser a certificate representing the
Shares to be purchased by Purchaser (which shall be issued in Purchaser’s name) against payment of
the exercise price therefor by Purchaser by (a) check made payable to the Company, (b) cancellation
of indebtedness of the Company to Purchaser, (c) delivery of shares of the Common Stock of the
Company in accordance with Section 4 of the Option Agreement, or (d) by a combination of the
foregoing.

     3. Limitations
on Transfer. In addition to any other limitation on transfer created by
applicable securities laws, Purchaser shall not assign, encumber or dispose of any interest in the
Shares except in compliance with the provisions below and applicable securities laws.

          (a) Right
of First Refusal. Before any Shares held by Purchaser or any transferee
of Purchaser (either being sometimes referred to herein as the “Holder”) may be sold or otherwise
transferred (including transfer by gift or operation of law), the Company or its assignee(s)
shall have a right of first refusal to purchase the Shares on the terms and conditions set forth in
this Section 3(a) (the “Right of First Refusal”).

 

 

               (i) Notice of Proposed Transfer. The Holder of the Shares shall deliver to the Company a
written notice (the “Notice”) stating: (i) the Holder’s bona fide intention to sell or otherwise
transfer such Shares; (ii) the name of each proposed purchaser
or other transferee (“Proposed
Transferee”); (iii) the number of Shares to be transferred to each Proposed Transferee; and (iv)
the terms and conditions of each proposed sale or transfer. The Holder shall offer the Shares at
the same price (the “Offered Price”) and upon the same terms (or terms as similar as reasonably
possible) to the Company or its assignee(s).

               (ii) Exercise of Right of First Refusal. At any time within thirty (30) days
after receipt of the Notice, the Company and/or its assignee(s) may, by giving written notice to
the Holder, elect to purchase all, but not less than all, of the Shares proposed to be transferred
to any one or more of the Proposed Transferees, at the purchase price determined in accordance with
subsection (iii) below.

               (iii) Purchase
Price. The purchase price (“Purchase Price”) for the Shares
purchased by the Company or its assignee(s) under this Section 3(a) shall be the Offered Price. If
the Offered Price includes consideration other than cash, the cash equivalent value of the non-cash
consideration shall be determined by the Board of Directors of the Company in good faith.

               (iv) Payment. Payment of the Purchase Price shall be made, at
the option of the Company or its assignee(s), in cash (by check), by cancellation of all or a portion
of any outstanding indebtedness, or by any combination thereof within 30 days after receipt of the
Notice or in the manner and at the times set forth in the Notice.

               (v) Holder’s Right to Transfer. If all of the Shares proposed in the Notice to be
transferred to a given Proposed Transferee are not purchased by the Company and/or its assignee(s)
as provided in this Section 3(a), then the Holder may sell or otherwise transfer such Shares to
that Proposed Transferee at the Offered Price or at a higher price, provided that such sale or
other transfer is consummated within 60 days after the date of the Notice and provided further that
any such sale or other transfer is effected in accordance with any applicable securities laws and
the Proposed Transferee agrees in writing that the provisions of this Section 3 shall continue to
apply to the Shares in the hands of such Proposed Transferee. If the Shares described in the Notice
are not transferred to the Proposed Transferee within such period, or if the Holder proposes to
change the price or other terms to make them more favorable to the Proposed Transferee, a new
Notice shall be given to the Company, and the Company and/or its assignees shall again be offered
the Right of First Refusal before any Shares held by the Holder may be sold or otherwise
transferred.

               (vi) Exception for Certain Family Transfers. Anything to the
contrary contained in this Section 3(a) notwithstanding, the transfer of any or all of the Shares
during Purchaser’s lifetime or on Purchaser’s death by will or intestacy to Purchaser’s Immediate
Family or a trust for the benefit of Purchaser’s Immediate Family shall be exempt from the
provisions of this Section 3(a). “Immediate Family” as used herein shall mean spouse,
lineal descendant or antecedent, father, mother, brother or sister. In such case, the transferee or
other

-2-

 

recipient shall receive and hold the Shares so transferred subject to the provisions of
this Section, and there shall be no further transfer of such Shares except in accordance with the
terms of this Section 3.

          (b) Involuntary Transfer.

               (i) Company’s Right to Purchase upon Involuntary Transfer. In
the event, at any lime after the date of this Agreement, of any transfer by operation of law or
other involuntary transfer (including death or divorce, but excluding a transfer to Immediate
Family as set forth in Section 3(a)(vi) above) of all or a portion of the Shares by the record
holder thereof, the Company shall have an option to purchase all of the Shares transferred at the
greater of the purchase price paid by Purchaser pursuant to this Agreement or the Fair Market Value
of the Shares on the date of transfer. Upon such a transfer, the person acquiring the Shares shall
promptly notify the Secretary of the Company of such transfer, The right to purchase such Shares
shall be provided to the Company for a period of thirty (30) days following receipt by the Company
of written notice by the person acquiring the Shares.

               (ii) Price for Involuntary Transfer. With respect to any stock to be transferred
pursuant to Section 3(b)(i), the price per Share shall be a price set by the Board of Directors of
the Company that will reflect the current value of the stock in terms of present earnings and
future prospects of the Company. The Company shall notify Purchaser or his or her executor of the
price so determined within thirty (30) days after receipt by it of written notice of the transfer
or proposed transfer of Shares. However, if the Purchaser does not agree with the valuation as
determined by the Board of Directors of the Company, the Purchaser shall be entitled to have the
valuation determined by an independent appraiser to be mutually agreed upon by the Company and the
Purchaser and whose fees shall be borne equally by the Company and the Purchaser.

          (c) Assignment. The right of the Company to purchase any part of the Shares may
be assigned in whole or in part to any shareholder or shareholders of the Company or other persons
or organizations.

          (e) Restrictions Binding on Transferees. All transferees of Shares or any interest
therein will receive and hold such Shares or interest subject to the provisions of this Agreement.
Any sale or transfer of the Company’s Shares shall be void unless the provisions of this Agreement
are satisfied.

          (f) Termination of Rights. The right of first refusal granted the Company by Section
3(a) above and the option to repurchase the Shares in the event of an involuntary transfer granted
the Company by Section 3(b) above shall terminate upon the first sale of Common Stock of the
Company to the general public pursuant to a registration statement filed with and declared
effective by the Securities and Exchange Commission under the Securities Act of 1933, as amended
(the “Securities Act”). Upon termination of the right of first refusal described in Section 3(a)
above, a new certificate or certificates representing the Shares not repurchased shall
be issued, on request, without the legend referred to in Section 5(a)(ii) herein and
delivered to Purchaser.

-3-

 

     4. Investment and Taxation Representations. In connection with the purchase of
the Shares, Purchaser represents to the Company the following;

          (a) Purchaser is aware of the Company’s business affairs and financial condition and has
acquired sufficient information about the Company to reach an informed and knowledgeable decision
to acquire the Shares. Purchaser is purchasing these securities for investment for his or her own
account only and not with a view to, or for resale in connection with, any “distribution” thereof
within the meaning of the Securities Act or under any applicable provision of state law. Purchaser
does not have any present intention to transfer the Shares to any
person or entity.

          (b) Purchaser understands that the Shares have not been registered under the Securities Act by
reason of a specific exemption therefrom, which exemption depends upon, among other things, the
bona fide nature of Purchaser’s investment intent as expressed
herein.

          (c) Purchaser further acknowledges and understands that the securities must be held
indefinitely unless they are subsequently registered under the Securities Act or an exemption from
such registration is available, Purchaser further acknowledges and understands that the Company is
under no obligation to register the securities. Purchaser understands that the certificate(s)
evidencing the securities will be imprinted with a legend which prohibits the transfer of the
securities unless they are registered or such registration is not required in the opinion of
counsel for the Company.

          (d) Purchaser is familiar with the provisions of Rules 144 and 701, each promulgated under the
Securities Act, which, in substance, permit limited public resale of “restricted securities”
acquired, directly or indirectly, from the issuer of the securities (or from an affiliate of such
issuer), in a non-public offering subject to the satisfaction of certain conditions. Purchaser
understands that the Company provides no assurances as to whether he or she will be able to resell
any or all of the Shares pursuant to Rule 144 or Rule 701, which rules require, among other things,
that the Company be subject to the reporting requirements of the Securities Exchange Act of 1934,
as amended, that resales of securities take place only after the holder of the Shares has held the
Shares for certain specified time periods, and under certain circumstances, that resales of
securities be limited in volume and take place only pursuant to brokered transactions.
Notwithstanding this paragraph (d), Purchaser acknowledges and agrees to the restrictions set forth
in paragraph (e) below.

          (e) Purchaser further understands that in the event all of the applicable requirements of Rule
144 or 701 are not satisfied, registration under the Securities Act, compliance with Regulation A,
or some other registration exemption will be required; and that, notwithstanding the fact that
Rules 144 and 701 are not exclusive, the Staff of the Securities and Exchange Commission has
expressed its opinion that persons proposing to sell private placement securities other than in a
registered offering and otherwise than pursuant to Rule 144 or 701 will

-4-

 

have a substantial burden of proof in establishing that an exemption from registration is
available for such offers or sales, and that such persons and their respective brokers who
participate in such transactions do so at their own risk.

          (f) Purchaser understands that Purchaser may suffer adverse tax consequences as a result
of Purchaser’s purchase or disposition of the Shares, Purchaser represents that Purchaser has
consulted any tax consultants Purchaser deems advisable in connection with the purchase or
disposition of the Shares and that Purchaser is not relying on the
Company for any tax advice.

     5. Restrictive Legends and Stop-Transfer Orders.

          (a) Legends. The certificate or certificates representing the Shares shall bear
the following legends (as well as any legends required by applicable state and federal corporate
and securities laws);

	 	(i)	 	THE SHARES REPRESENTED BY THIS
CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AND HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW
TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF. NO
SUCH SALE OR DISTRIBUTION MAY BE EFFECTED WITHOUT AN EFFECTIVE
REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL
FOR THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE
SECURITIES ACT OF 1933.
	 
	 	(ii)	 	THE SHARES REPRESENTED BY THIS
CERTIFICATE MAY BE TRANSFERRED ONLY IN ACCORDANCE WITH THE TERMS
OF AN AGREEMENT BETWEEN THE COMPANY AND THE STOCKHOLDER, A COPY
OF WHICH IS ON FILE WITH THE SECRETARY OF THE COMPANY.

          (b) Stop-Transfer Notices. Purchaser agrees that, in order to ensure compliance with
the restrictions referred to herein, the Company may issue appropriate “stop transfer” instructions
to its transfer agent, if any, and that, if the Company transfers its own securities, it may make
appropriate notations to the same effect in its own records.

          (c) Refusal to Transfer. The Company shall not be required (i) to transfer on its
books any Shares that have been sold or otherwise transferred in violation of any of the provisions
of this Agreement or (ii) to treat as owner of such Shares or to accord the right to vote or pay
dividends to any purchaser or other transferee to whom such Shares shall have been so transferred.

-5-

 

     6. No Employment Rights. Nothing in this Agreement shall affect in any manner
whatsoever the right or power of the Company, or a parent or subsidiary of the Company, to
terminate Purchaser’s employment or consulting relationship, for any reason, with or without cause.

     7. Lock-Up Agreement. In connection with the initial public offering of the Company’s
securities and upon request of the Company or the underwriters managing any underwritten offering
of the Company’s securities, Purchaser agrees not to sell, make any short sale of, loan, grant any
option for the purchase of, or otherwise dispose of any securities of the Company however or
whenever acquired (other than those included in the registration) without the prior written consent
of the Company or such underwriters, as the case may be, for such period of time (not to exceed 180
days) from the effective date of such registration as may be requested by the Company or such
managing underwriters and to execute an agreement reflecting the foregoing as may be requested by
the underwriters at the time of the public offering.

     8. Miscellaneous.

          (a) Governing Law. This Agreement and all acts and transactions pursuant
hereto and the rights and obligations of the parties hereto shall be governed, construed and
interpreted in accordance with the laws of the State of Washington, without giving effect to
principles of conflicts of law.

          (b) Entire Agreement; Enforcement of Rights. This Agreement sets forth the entire
agreement and understanding of the parties relating to the subject matter herein and merges all
prior discussions between them, No modification of or amendment to this Agreement, nor any waiver
of any rights under this Agreement, shall be effective unless in writing signed by the parties to
this Agreement. The failure by either party to enforce any rights under this Agreement shall not be
construed as a waiver of any rights of such party.

          (c) Severability. If one or more provisions of this Agreement are held to be
unenforceable under applicable law, the parties agree to renegotiate such provision in good faith.
In the event that the parties cannot reach a mutually agreeable and enforceable replacement for
such provision, then (i) such provision shall be excluded from this Agreement, (ii) the balance of
the Agreement shall be interpreted as if such provision were so excluded and (iii) the balance of
the Agreement shall be enforceable in accordance with its terms.

          (d) Construction. This Agreement is the result of negotiations between and has been
reviewed by each of the parties hereto and their respective counsel, if any; accordingly, this
Agreement shall be deemed to be the product of all of the parties hereto, and no ambiguity shall be
construed in favor of or against any one of the parties hereto.

          (e) Notices. Any notice required or permitted by this Agreement shall be in writing
and shall be deemed sufficient when delivered personally or sent by telegram or fax or forty-eight
(48) hours after being deposited in the U.S. mail, as certified or registered mail, with

-6-

 

postage prepaid, and addressed to the party to be notified at such party’s address as set
forth below or as subsequently modified by written notice.

          (f) Counterparts. This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original and all of which together shall
constitute one instrument.

          (g) Successors
and Assigns. The rights and benefits of this Agreement shall inure to
the benefit of, and be enforceable by the Company’s successors and assigns. The rights and
obligations of Purchaser under this Agreement may only be assigned with the prior written consent
of the Company.

[Signature Page Follows]

-7-

 

     The parties have executed this Exercise Notice and Restricted Stock Purchase Agreement
as of the date first set forth above.

	 	 	 	 	 	 	 
	 	 	COMPANY:	 	 
	 
	 	 	 	 	 	 
	 	 	THERION SOFTWARE CORPORATION	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	Name:
	 	 

	 	 
	 

	 	Title:
	 	 

	 	 
	 

	 	 	 	 

	 	 

	 	 	 	 	 	 	 
	 	 	PURCHASER:	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 
	 	 	(Signature)	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 
	 	 	(Printed Name)	 	 
	 
	 	 	 	 	 	 
	 

	 	Address:	 	 	 	 
	 

	 	 	 	 

	 	 
	 

	 	 	 	 
 

	 	 

I,                                         , spouse of Optionee, have read and hereby approve the foregoing
Agreement. In consideration of the Company’s granting my spouse the right to purchase the Shares as
set forth in the Agreement, I hereby agree to be irrevocably bound by the Agreement and further
agree that any community property or other such interest shall hereby by similarly bound by the
Agreement. I hereby appoint my spouse as my attorney-in-fact with respect to any amendment or
exercise of any rights under the Agreement.

	 	 	 	 	 
	 

	 	 

Spouse of Optionee
	 	 

-8-

 

RECEIPT

     Therion Software Corporation (the “Company”) hereby acknowledges receipt of (check
as applicable):

	 	 	 	 	 
	 

	 	                    
	 	A check in the amount of $                     
	 
	 	 	 	 
	 

	 	                    
	 	The cancellation of indebtedness in
the amount of $                     
	 
	 	 	 	 
	 

	 	                    
	 	Certificate No.
                    
representing
                     shares of the Company’s
	 
	 	 	 	 
	 

	 	 	 	Common Stock with a fair market
value of $                     

given by
                                        
as consideration for Certificate No.                     
for                     
shares of Common Stock of the Company.

	 	 	 	 	 	 	 
	Dated:                                         
	 	 	 	 	 	 
	 	 	Therion Software Corporation	 	 
	 
	 	 	 	 	 	 
	 

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Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00093-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00093-of-00352.parquet"}]]