Document:

2004 Employee Stock Purchase Plan

 EXHIBIT 10.16 
  

  
 CALLWAVE, INC. 
  
 2004 EMPLOYEE STOCK PURCHASE PLAN 
  

  
 APRIL 27, 2004

  
  

 CALLWAVE, INC. 
  
 2004 EMPLOYEE STOCK PURCHASE
PLAN 
  
 1. ESTABLISHMENT,
PURPOSE, AND TERM OF PLAN 
  
 1.1 ESTABLISHMENT. The CallWave, Inc. 2004 Employee Stock Purchase Plan (the
“Plan”) is hereby established effective as of the effective date of the initial registration by the Company of its Stock under Section 12 of the Securities Exchange Act of 1934, as amended (the
“Effective Date”). 
  
 1.2
PURPOSE. The purpose of the Plan is to advance the interests of the Company and its stockholders by providing an incentive to attract, retain and reward Eligible Employees of the Participating
Company Group and by motivating such persons to contribute to the growth and profitability of the Participating Company Group. The Plan provides such Eligible Employees with an opportunity to acquire a proprietary interest in the Company through the
purchase of Stock. The Company intends that the Plan qualify as an “employee stock purchase plan” under Section 423 of the Code (including any amendments or replacements of such section), and the Plan shall be so construed. 
  
 1.3 TERM OF
PLAN. The Plan shall continue in effect until its termination by the Board. 
  
 2. DEFINITIONS AND CONSTRUCTION 
  
 2.1 DEFINITIONS. Any term not expressly defined in the Plan but
defined for purposes of Section 423 of the Code shall have the same definition herein. Whenever used herein, the following terms shall have their respective meanings set forth below: 
  
 (a) “Board” means the Board of Directors of the Company. If one or more Committees have been
appointed by the Board to administer the Plan, “Board” also means each such Committee. 
  
 (b) “Code” means the Internal Revenue Code of 1986, as amended, and any applicable regulations promulgated thereunder.

  
 (c) “Committee” means the
Compensation Committee or other committee of the Board duly appointed to administer the Plan and having such powers as specified by the Board. Unless the powers of the Committee have been specifically limited, the Committee shall have all of the
powers of the Board granted herein, including, without limitation, the power to amend or terminate the Plan at any time, subject to the terms of the Plan and any applicable limitations imposed by law. 
  
 (d) “Company” means CallWave, Inc., a Delaware
corporation, or any successor corporation thereto. 
  
 (e)
“Compensation” means, with respect to any Offering Period, base wages or salary, overtime, bonuses, commissions, shift differentials, payments for paid time off, payments in lieu of notice, and compensation deferred under
any program or plan, including, without limitation, pursuant to Section 401(k) or Section 125 of the Code. Compensation shall be limited to amounts actually payable in cash or deferred during the Offering Period. Compensation shall not include
moving allowances, payments pursuant to a severance agreement, termination pay, relocation payments, sign-on bonuses, any amounts directly or indirectly paid pursuant to the Plan or any other stock purchase or stock option plan, or any other
compensation not included above. 
  
 (f)
“Effective Date” has the meaning ascribed thereto in Section 1.1, above. 
  

 (g) “Eligible Employee” means an Employee who meets the requirements set
forth in Section 5 for eligibility to participate in the Plan. 
  
 (h) “Employee” means a person treated as an employee of a Participating Company for purposes of Section 423 of the Code. A Participant shall be deemed to have ceased to be an Employee upon the sooner of an
actual termination of employment, or the corporation employing the Participant ceasing to be a Participating Company. For purposes of the Plan, an individual shall not be deemed to have ceased to be an Employee while on any military leave, sick
leave, or other bona fide leave of absence approved by the Company of ninety (90) days or less. If an individual’s leave of absence exceeds ninety (90) days, the individual shall be deemed to have ceased to be an Employee on the ninety-first
(91st) day of such leave unless the individual’s right to reemployment with the Participating Company Group is guaranteed either by statute or by contract. 
  

(i) “Fair Market Value” means, as of any date: 
  
 (i) If the Stock is then listed on a national or regional securities exchange or market system or is regularly
quoted by a recognized securities dealer, the closing sale price of a share of Stock (or the mean of the closing bid and asked prices if the Stock is so quoted instead) as quoted on the Nasdaq National Market, the Nasdaq SmallCap Market or such
other national or regional securities exchange or market system constituting the primary market for the Stock, or by such recognized securities dealer, as reported in The Wall Street Journal or such other source as the Company deems reliable.
If the relevant date does not fall on a day on which the Stock has traded on such securities exchange or market system or has been quoted by such securities dealer, the date on which the Fair Market Value is established shall be the last day on
which the Stock was so traded or quoted prior to the relevant date, or such other appropriate day as determined by the Board, in its discretion. 
  
 (ii) If, on the relevant date, the Stock is not then listed on a national or regional securities exchange or market system or regularly quoted by
a recognized securities dealer, the Fair Market Value of a share of Stock shall be as determined in good faith by the Board. 
  
 (iii) Notwithstanding the foregoing, the Fair Market Value of a share of Stock on the Effective Date shall be deemed to be the public offering
price set forth in the final prospectus filed with the Securities and Exchange Commission in connection with the Company’s initial public offering of the Stock. 
  
 (j) “Initial Offering Period” means the Offering Period commencing on the Effective Date of
the Plan, as established pursuant to Section 6. 
  
 (k)
“Initial Offering Period Cash Exercise Notice” means a written notice in such form as specified by the Company, which states a Participant’s election to exercise, as of the next Purchase Date, a Purchase Right
granted to such Participant with respect to the Initial Offering Period. 
  
 (l) “Offering” means an offering of Stock as provided in Section 6. 
  
 (m) “Offering Date” means, for any Offering, the first day of the Offering Period. 
  
 (n) “Offering Period” means an Offering Period
established in accordance with Section 6. 
  
 (o)
“Parent Corporation” means any present or future “parent corporation” of the Company, as defined in Section 424(e) of the Code. 
  
 (p) “Participant” means an Eligible Employee who has become a participant in an Offering
Period in accordance with Section 7 and remains a participant in accordance with the Plan. 
  

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 (q) “Participating Company” means the Company and any Parent Corporation
or Subsidiary Corporation designated by the Board as a corporation the Employees of which may, if Eligible Employees, participate in the Plan. The Board shall have the sole and absolute discretion to determine from time to time which Parent
Corporation or Subsidiary Corporations shall be Participating Companies. 
  
 (r) “Participating Company Group” means, at any point in time, the Company and all other corporations collectively which are then Participating Companies. 
  
 (s) “Purchase Date” means, for any Offering
Period, the last day of such Period, or, if so determined by the Board, the last day of each Purchase Period occurring within an Offering Period. 
  
 (t) “Purchase Period” means a Purchase Period established in accordance with Section 6. 
  
 (u) “Purchase Price” means the price at which
a share of Stock may be purchased under the Plan, as determined in accordance with Section 9. 
  
 (v) “Purchase Right” means an option granted to a Participant pursuant to the Plan to purchase shares of Stock as provided in
Section 8, which the Participant may or may not exercise during the Offering Period in which such option is outstanding. 
  
 (w) “Registration Date” means the effective date of the initial registration on Form S-8 of shares of Stock issuable
pursuant to the Plan. 
  
 (x)
“Stock” means the common stock of the Company, as adjusted from time to time in accordance with Section 4.2. 
  
 (y) “Subscription Agreement” means a written agreement in such form as may be specified by the Company from time to time,
stating an Employee’s election to participate in the Plan and authorizing payroll deductions under the Plan from the Employee’s Compensation. 
  
 (z) “Subscription Date” means the last business day prior to the Offering Date of an Offering Period or such earlier date
as the Company shall establish. 
  
 (aa)
“Subsidiary Corporation” means any present or future “subsidiary corporation” of the Company, as defined in Section 424(f) of the Code. 
  
 2.2 CONSTRUCTION. Captions and titles contained herein are for
convenience only and shall not affect the meaning or interpretation of any provision of the Plan. Except when otherwise indicated by the context, the singular shall include the plural and the plural shall include the singular. Use of the term
“or” is not intended to be exclusive, unless the context clearly requires otherwise. 
  
 3. ADMINISTRATION 
  
 3.1 ADMINISTRATION BY THE BOARD. The Plan shall be administered by the Board. All questions of interpretation of
the Plan, of any form of agreement or other document employed by the Company in the administration of the Plan, or of any Purchase Right shall be determined by the Board, and such determinations shall be final, binding and conclusive upon all
persons having an interest in the Plan or the Purchase Right, unless fraudulent or made in bad faith. Subject to the provisions of the Plan, the Board shall determine all of the relevant terms and conditions of Purchase Rights; provided,
however, that all Participants granted Purchase Rights pursuant to an Offering shall have the same rights and privileges within the meaning of Section 423(b)(5) of the Code. Any and all actions, decisions and determinations taken or made by the
Board in the exercise of its discretion pursuant to the Plan or any agreement thereunder (other than determining questions of interpretation pursuant to this sentence of this Section 3.1) shall be final, binding and conclusive upon all persons
having an interest therein. All expenses incurred in connection with the administration of the Plan shall be paid by the Company. 
  

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 3.2 AUTHORITY OF
OFFICERS. Any officer of the Company shall have the authority to act on behalf of the Company with respect to any matter, right, obligation, determination or election that is the responsibility of or
that is allocated to the Company herein, provided that the officer has apparent authority with respect to such matter, right, obligation, determination or election. 
  
 3.3 POLICIES AND PROCEDURES ESTABLISHED
BY THE COMPANY. Without regard to whether any Participant’s Purchase Right may be considered adversely affected, the Company may, from time to time, consistent with
the Plan and the requirements of Section 423 of the Code, establish, change or terminate such rules, guidelines, policies, procedures, limitations, or adjustments as deemed advisable by the Company, in its discretion, for the proper administration
of the Plan, including, without limitation, (a) a minimum payroll deduction amount required for participation in an Offering, (b) a limitation on the frequency or number of changes permitted in the rate of payroll deduction during an Offering, (c)
an exchange ratio applicable to amounts withheld in a currency other than United States dollars, (d) a payroll deduction greater than or less than the amount designated by a Participant in order to adjust for the Company’s delay or mistake in
processing a Subscription Agreement or in otherwise effecting a Participant’s election under the Plan or as advisable to comply with the requirements of Section 423 of the Code, and (e) determination of the date and manner by which the Fair
Market Value of a share of Stock is determined for purposes of administration of the Plan. All such actions by the Company shall be taken consistent with the requirement under Section 423(b)(5) of the Code that all Participants granted Purchase
Rights pursuant to an Offering shall have the same rights and privileges within the meaning of such section. 
  
 3.4 INDEMNIFICATION. In addition to such other rights of indemnification as they may have as
members of the Board or officers or employees of the Participating Company Group, members of the Board and any officers or employees of the Participating Company Group to whom authority to act for the Board or the Company is delegated shall be
indemnified by the Company against all reasonable expenses, including attorneys’ fees, actually and necessarily incurred in connection with the defense of any action, suit or proceeding, or in connection with any appeal therein, to which they
or any of them may be a party by reason of any action taken or failure to act under or in connection with the Plan, or any right granted hereunder, and against all amounts paid by them in settlement thereof (provided such settlement is approved by
independent legal counsel selected by the Company) or paid by them in satisfaction of a judgment in any such action, suit or proceeding, except in relation to matters as to which it shall be adjudged in such action, suit or proceeding that such
person is liable for gross negligence, bad faith or intentional misconduct in duties; provided, however, that within sixty (60) days after the institution of such action, suit or proceeding, such person shall offer to the Company, in writing,
the opportunity at its own expense to handle and defend the same. 
  
 4.
SHARES SUBJECT TO PLAN 
  
 4.1 MAXIMUM NUMBER OF SHARES ISSUABLE. Subject to adjustment as provided in Section 4.2, the
maximum aggregate number of shares of Stock that may be issued under the Plan shall (a) be two hundred thousand (200,000), increased on July 1, 2005 and each July 1 thereafter until and including July 1, 2014 (the “Annual
Increase”) by that number of shares so that the number of shares that may be issued under the Plan is equal to the smallest of (i) eighty-five hundredths percent (0.85%) of the number of shares of Stock issued and outstanding on the
immediately preceding June 30, (ii) two hundred thousand (200,000) shares, or (iii) such lesser number of shares determined by the Board, and (b) consist of authorized but unissued or reacquired shares of Stock, or any combination thereof. If an
outstanding Purchase Right for any reason expires or is terminated or canceled, the shares of Stock allocable to the unexercised portion of that Purchase Right shall again be available for issuance under the Plan. 
  
 4.2 ADJUSTMENTS FOR
CHANGES IN CAPITAL STRUCTURE. Subject to any required action by the stockholders of the Company, in the event of any change in the Stock effected without
receipt of consideration by the Company, whether through merger, consolidation, reorganization, reincorporation, recapitalization, reclassification, stock dividend, stock split, reverse stock split, split-up, split-off, spin-off, combination of
shares, exchange of shares, or similar change in the capital structure of the Company, or in the event of payment of a dividend or distribution to the stockholders of the Company in a form other than 
  

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 Stock (excepting normal cash dividends) that has a material effect on the Fair Market Value of shares of Stock,
appropriate adjustments shall be made in the number and class of shares subject to the Plan, the Annual Increase, the limit on the shares which may be purchased by any Participant during an Offering (as described in Sections 8.1 and 8.2), each
Purchase Right, and the Purchase Price in order to prevent dilution or enlargement of Participants’ rights under the Plan. For purposes of the foregoing, conversion of any convertible securities of the Company shall not be treated as
“effected without receipt of consideration by the Company.” Any fractional share resulting from an adjustment pursuant to this Section 4.2 shall be rounded down to the nearest whole number, and in no event may the Purchase Price be
decreased to an amount less than the par value, if any, of the Stock subject to the Purchase Right. The adjustments determined by the Board pursuant to this Section 4.2 shall be final, binding and conclusive. 
  
 5. ELIGIBILITY 
  
 5.1 EMPLOYEES ELIGIBLE
TO PARTICIPATE. Each Employee of a Participating Company is eligible to participate in the Plan and shall be deemed an Eligible Employee, except the following: 
  
 (a) Any Employee who is customarily employed by the Participating
Company for twenty (20) hours or less per week; or 
  
 (b)
Any Employee who is customarily employed by the Participating Company for not more than five (5) months in any calendar year. 
  
 5.2 EXCLUSION OF CERTAIN STOCKHOLDERS.
Notwithstanding any provision of the Plan to the contrary, no Employee shall be treated as an Eligible Employee and granted a Purchase Right under the Plan if, immediately after such grant, the Employee would own stock of the Company or of any
Parent Corporation or Subsidiary Corporation possessing five percent (5%) or more of the total combined voting power or value of all classes of stock of such corporation, as determined in accordance with Section 423(b)(3) of the Code. For purposes
of this Section 5.2, the attribution rules of Section 424(d) of the Code shall apply in determining the stock ownership of such Employee. 
  
 5.3 DETERMINATION BY COMPANY. The Company shall determine in good
faith and in the exercise of its discretion whether an individual has become or has ceased to be an Employee or an Eligible Employee and the effective date of such individual’s attainment or termination of such status, as the case may be. For
purposes of an individual’s participation in or other rights, if any, under the Plan as of the time of the Company’s determination, all such determinations by the Company shall be final, binding and conclusive. 
  
 6. OFFERINGS. The Plan initially shall be implemented on and
after the Effective Date by sequential Offerings of approximately six (6) months’ duration or such other duration as the Board shall determine (individually, an “Offering Period”); provided, however, subject to
the following sentence hereof, that the first Offering Period (the “Initial Offering Period”) shall commence on the Effective Date and end on the last day of the calendar month immediately preceding the six-month anniversary
of the Effective Date. Notwithstanding the foregoing, the Board may establish additional or alternative sequential or overlapping Offering Periods, a different duration for one or more Offering Periods or different commencing or ending dates for
such Offering Periods; provided, however, that no Offering Period may have a duration exceeding twenty-seven (27) months. If the Board shall so determine in its discretion, each Offering Period may consist of two (2) or more consecutive
purchase periods having such duration as the Board shall specify (individually, a “Purchase Period”), and the last day of each such Purchase Period shall be a Purchase Date. If the first or last day of an Offering Period or a
Purchase Period is not a day on which the principal exchange or quotation service on which the Company’s Common Stock is traded is open for trading, the Company shall specify the trading day that will be deemed the first or last day, as the
case may be, of the Offering Period or Purchase Period. 
  

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 7. PARTICIPATION IN THE PLAN. 
  
 7.1 COMMENCEMENT OF
PARTICIPATION. An Eligible Employee may become a Participant in an Offering Period by delivering a properly completed Subscription Agreement to the office designated by the Company not later than the close of
business for such office on the Subscription Date established by the Company for that Offering Period. An Eligible Employee who does not deliver a properly completed Subscription Agreement to the Company’s designated office on or before the
Subscription Date for an Offering Period shall not participate in the Plan for that Offering Period. An Employee who becomes an Eligible Employee after the Offering Date of an Offering Period shall not be eligible to participate in that Offering
Period but may participate in any subsequent Offering Period provided the Employee is still an Eligible Employee as of the Offering Date of such subsequent Offering Period. 
  
 7.2 CONTINUED PARTICIPATION. 
  
 (a) GENERALLY. A
Participant shall automatically participate in the next Offering Period commencing immediately after the Purchase Date of each Offering Period in which the Participant participates provided that the Participant remains an Eligible Employee on the
Offering Date of the new Offering Period and has neither (a) withdrawn from the Plan pursuant to Section 12.1 nor (b) terminated employment as provided in Section 13. A Participant who may automatically participate in a subsequent Offering Period,
as provided in this Section, is not required to deliver any additional Subscription Agreement for the subsequent Offering Period in order to continue participation in the Plan. However, a Participant may deliver a new Subscription Agreement for a
subsequent Offering Period in accordance with the procedures set forth in Section 7.1 if the Participant desires to change any of the elections contained in the Participant’s then effective Subscription Agreement. 
  
 (b) PARTICIPATION FOLLOWING
INITIAL OFFERING PERIOD. Notwithstanding Section 7.2(a), an Eligible Employee who was enrolled in the Initial Offering Period and who wishes to participate in an Offering
Period which begins after the Initial Offering Period shall deliver a Subscription Agreement in accordance with Section 7.1 no earlier than the Registration Date and no later than the Subscription Date for such Offering Period. 
  
 8. RIGHT TO PURCHASE SHARES

  
 8.1 GRANT OF
PURCHASE RIGHT. Except as otherwise provided below (including in this Section 8.1 and in Section 10.1, below), on the Offering Date of each Offering Period, each Participant in such
Offering Period shall be granted automatically a Purchase Right consisting of an option to purchase that number of whole shares of Stock determined by dividing Twelve Thousand Five Hundred Dollars ($12,500) by the Fair Market Value of a share of
Stock on such Offering Date. The Board may, in its discretion and prior to the Offering Date of any Offering Period, (a) change the method of, or any of the foregoing factors in, determining the number of shares of Stock subject to Purchase Rights
to be granted on such Offering Date or (b) specify a maximum aggregate number of shares that may be purchased by all Participants in an Offering or on any Purchase Date within an Offering Period. No Purchase Right shall be granted on an Offering
Date to any person who is not, on such Offering Date, an Eligible Employee. 
  
 8.2 PRO RATA ADJUSTMENT OF PURCHASE RIGHT. If the Board establishes an Offering
Period of any duration other than six months, then the dollar amount in Section 8.1 shall be determined by multiplying $2,083.33 by the number of months (rounded up to the nearest whole month) in the Offering Period and rounded down to the nearest
whole dollar. 
  
 8.3 CALENDAR
YEAR PURCHASE LIMITATION. Notwithstanding any provision of the Plan to the contrary, no Participant shall be granted a Purchase Right which permits his or her right to
purchase shares of Stock under the Plan to accrue at a rate which, when aggregated with such Participant’s rights to purchase shares under all other employee stock purchase plans of a Participating Company intended to meet the requirements of
Section 423 of the Code, exceeds Twenty-Five Thousand Dollars ($25,000) in Fair Market Value (or such other limit, if any, as may be imposed by the Code) for each calendar year in which such Purchase Right is outstanding at any time. For purposes of
the preceding sentence, the Fair 
  

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 Market Value of shares purchased during a given Offering Period shall be determined as of the Offering Date for such
Offering Period. The limitation described in this Section shall be applied in conformance with applicable regulations under Section 423(b)(8) of the Code. 
  
 9. PURCHASE PRICE. Subject to adjustment as provided below or in Section 22 and unless otherwise provided by
the Board, the Purchase Price at which each share of Stock may be acquired in an Offering Period upon the exercise of all or any portion of a Purchase Right shall be established by the Board; provided, however, that the Purchase Price on each
Purchase Date shall not be less than eighty-five percent (85%) of the lesser of (a) the Fair Market Value of a share of Stock on the Offering Date of the Offering Period or (b) the Fair Market Value of a share of Stock on the Purchase Date.
Notwithstanding the foregoing, in the event that (i) the stockholders of the Company approve an amendment to the Plan to increase the maximum aggregate number of shares of Stock issuable under the Plan in accordance with Section 4.1, (ii) all or any
portion of such additional shares of Stock (the “Additional Shares”) are to be issued pursuant to an Offering Period in progress at the time of such stockholder approval and (iii) the Fair Market value per share of Stock on
the date of such stockholder approval (the “Approval Date”) is greater than the Fair Market value per share of Stock on the Offering Date of such Offering Period, then, the Board may, in its
discretion and without the consent of any Participant, adjust the Purchase Price for such Offering Period to be an amount equal to not less than eighty-five percent (85%) of the lesser of (a) the Fair Market Value of a share of Stock on the Approval
Date or (b) the Fair Market Value of a share of Stock on the Purchase Date. 
  
 10. ACCUMULATION OF PURCHASE PRICE THROUGH PAYROLL DEDUCTIONS. Except as provided in Section 11.1(b) with respect to the
Initial Offering Period, shares of Stock acquired pursuant to the exercise of all or any portion of a Purchase Right may be paid for only by means of payroll deductions from the Participant’s Compensation accumulated during the Offering Period
for which such Purchase Right was granted, subject to the following: 
  
 10.1 AMOUNT OF PAYROLL DEDUCTIONS. Except as otherwise provided herein, the amount to be deducted under the Plan from a
Participant’s Compensation on each pay day during an Offering Period shall be determined by the Participant’s Subscription Agreement. The Subscription Agreement shall set forth the percentage of the Participant’s Compensation to be
deducted on each pay day during an Offering Period in whole percentages of not less than one percent (1%) (except as a result of an election pursuant to Section 10.3 to stop payroll deductions effective following the first pay day during an
Offering) or more than fifteen percent (15%). The Board may change the foregoing limits on payroll deductions effective as of any Offering Date. 
  
 10.2 COMMENCEMENT OF PAYROLL DEDUCTIONS. Payroll
deductions shall commence on the first pay day following the Offering Date and shall continue to the end of the Offering Period unless sooner altered or terminated as provided herein; provided, however, that with respect to the Initial
Offering Period, payroll deductions shall commence as soon as practicable following the Company’s receipt of the Participant’s Subscription Agreement (delivered no earlier than the Registration Date), if any. 
  
 10.3 ELECTION TO
CHANGE OR STOP PAYROLL DEDUCTIONS. During an Offering Period, a Participant may elect to increase or decrease the rate of or to stop
deductions from his or her Compensation by delivering to the Company’s designated office an amended Subscription Agreement authorizing such change on or before the “Change Notice Date.” The “Change Notice
Date” shall be a date prior to the beginning of the first pay period for which such election is to be effective as established by the Company from time to time and announced to the Participants. A Participant who elects,
effective following the first pay day of an Offering Period, to decrease the rate of his or her payroll deductions to zero percent (0%) shall nevertheless remain a Participant in the current Offering Period unless such Participant withdraws from the
Plan as provided in Section 12.1. 
  
 10.4
ADMINISTRATIVE SUSPENSION OF PAYROLL DEDUCTIONS. The Company may, in its sole discretion, suspend a Participant’s payroll
deductions under the Plan as the Company deems advisable to avoid accumulating payroll deductions in excess of the amount that could reasonably be anticipated to purchase the maximum number of shares of Stock permitted (a) under the
Participant’s Purchase Right or 
  

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 (b) during a calendar year under the limit set forth in Section 8.3. Unless the Participant has either withdrawn from the
Plan as provided in Section 12.1 or has ceased to be an Eligible Employee, payroll deductions shall be resumed at the rate specified in the Participant’s then effective Subscription Agreement either (i) at the beginning of the next Offering
Period if the reason for suspension was clause (a) in the preceding sentence or (ii) at the beginning of the next Offering Period having a first Purchase Date that falls within the subsequent calendar year if the reason for suspension was clause (b)
in the preceding sentence. 
  
 10.5
PARTICIPANT ACCOUNTS. Individual bookkeeping accounts shall be maintained for each Participant. All payroll deductions from a Participant’s Compensation (and other amounts
received from the Participant in the Initial Offering Period) shall be credited to such Participant’s Plan account and shall be deposited with the general funds of the Company. All such amounts received or held by the Company may be used by the
Company for any corporate purpose. 
  
 10.6
NO INTEREST PAID. Interest shall not be paid on sums deducted from a Participant’s Compensation pursuant to the Plan or otherwise credited to the
Participant’s Plan account. 
  
 11. EXERCISE
OF PURCHASE RIGHT 
  
 11.1 GENERALLY 
  
 (a) EXERCISE. Except as provided in Section 11.1(b), on each Purchase Date of an Offering Period, each Participant who has not withdrawn from the Plan and whose participation in the Offering has
not otherwise terminated before such Purchase Date shall automatically acquire pursuant to the exercise of the Participant’s Purchase Right the number of whole shares of Stock determined by dividing (a) the total amount of the
Participant’s payroll deductions accumulated in the Participant’s Plan account during the Offering Period and not previously applied toward the purchase of Stock by (b) the Purchase Price. However, in no event shall the number of shares
purchased by the Participant during an Offering Period exceed the number of shares subject to the Participant’s Purchase Right. No shares of Stock shall be purchased on a Purchase Date on behalf of a Participant whose participation in the
Offering or the Plan has terminated before such Purchase Date. 
  
 (b) PURCHASE IN INITIAL OFFERING PERIOD. Notwithstanding Section 11.1(a), on the Purchase Date of the Initial Offering
Period, each Participant who has not withdrawn from the Plan and whose participation in such Offering has not otherwise terminated before such Purchase Date shall automatically acquire pursuant to the exercise of the Participant’s Purchase
Right (i) a number of whole shares of Stock determined in accordance with Section 11.1(a) to the extent of the total amount of the Participant’s payroll deductions accumulated in the Participant’s Plan account during the Initial Offering
Period, if any, and not previously applied toward the purchase of Stock and (ii) such additional shares of Stock (not exceeding in the aggregate the Participant’s Purchase Right) as determined in accordance with an Initial Offering Period Cash
Exercise Notice delivered to the office designated by the Company no earlier than the Registration Date and not later than the close of business for such office on the business day immediately preceding the Purchase Date or such earlier date as the
Company shall establish, accompanied by payment in cash or by check of the Purchase Price for such additional shares. However, in no event shall the number of shares purchased by a Participant during the Initial Offering Period exceed the number of
shares subject to the Participant’s Purchase Right. In addition, if a Participant delivers a Subscription Agreement to the Company after the Registration Date, the Participant may not elect to exercise a Purchase Right pursuant to an Initial
Offering Period Cash Exercise Notice in an amount which, when aggregated with payroll deductions pursuant to such Subscription Agreement, exceeds fifteen percent (15%) of the Participant’s Compensation during the Initial Offering Period. The
Company shall refund to the Participant in accordance with Section 11.4 any excess Purchase Price payment received from the Participant. 
  
 11.2 PRO RATA ALLOCATION OF Shares. If the number of shares of Stock
which might be purchased by all Participants on a Purchase Date exceeds the number of shares of Stock available in the Plan as provided in Section 4.1 or the maximum aggregate number of shares of Stock that may be purchased on such Purchase Date
pursuant to a limit established by the Board pursuant to Section 8.1, the 
  

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 Company shall make a pro rata allocation of the shares available in as uniform a manner as practicable and as the Company
determines to be equitable. Any fractional share resulting from such pro rata allocation to any Participant shall be disregarded. 
  
 11.3 DELIVERY OF CERTIFICATES. As soon as practicable after each
Purchase Date, the Company shall arrange the delivery to each Participant of a certificate representing the shares acquired by the Participant on such Purchase Date; provided that the Company may deliver such shares to a broker designated by the
Company that will hold such shares for the benefit of the Participant. Shares to be delivered to a Participant under the Plan shall be registered in the name of the Participant, or, if requested by the Participant, in the name of the Participant and
his or her spouse, or, if applicable, in the names of the heirs of the Participant. 
  
 11.4 RETURN OF CASH BALANCE. Any cash balance remaining in a Participant’s Plan account following any
Purchase Date shall be refunded to the Participant as soon as practicable after such Purchase Date. However, if the cash balance to be returned to a Participant pursuant to the preceding sentence is less than the amount that would have been
necessary to purchase an additional whole share of Stock on such Purchase Date, the Company may retain the cash balance in the Participant’s Plan account to be applied toward the purchase of shares of Stock in the subsequent Offering Period.

  
 11.5 TAX
WITHHOLDING. At the time a Participant’s Purchase Right is exercised, in whole or in part, or at the time a Participant disposes of some or all of the shares of Stock he or she acquires under the
Plan, the Participant shall make adequate provision for the federal, state, local and foreign tax withholding obligations, if any, of the Participating Company Group which arise upon exercise of the Purchase Right or upon such disposition of shares,
respectively. The Participating Company Group may, but shall not be obligated to, withhold from the Participant’s compensation the amount necessary to meet such withholding obligations. 
  
 11.6 EXPIRATION OF
PURCHASE RIGHT. Any portion of a Participant’s Purchase Right remaining unexercised after the end of the Offering Period to which the Purchase Right relates shall expire immediately
upon the end of the Offering Period. 
  
 11.7
PROVISION OF REPORTS AND STOCKHOLDER INFORMATION TO PARTICIPANTS. Each Participant who
has exercised all or part of his or her Purchase Right shall receive, as soon as practicable after the Purchase Date, a report of such Participant’s Plan account setting forth the total amount credited to his or her Plan account prior to such
exercise, the number of shares of Stock purchased, the Purchase Price for such shares, the date of purchase and the cash balance, if any, remaining immediately after such purchase that is to be refunded or retained in the Participant’s Plan
account pursuant to Section 11.4. The report required by this Section may be delivered in such form and by such means, including by electronic transmission, as the Company may determine. In addition, each Participant shall be provided information
concerning the Company equivalent to that information provided generally to the Company’s common stockholders. 
  
 12. VOLUNTARY WITHDRAWAL FROM THE PLAN 
  
 12.1 WITHDRAWAL. A Participant
may withdraw from the Plan by signing and delivering to the Company’s designated office a written notice of withdrawal on a form provided by the Company for this purpose. Such withdrawal may be elected at any time prior to the end of an
Offering Period; provided, however, that if a Participant withdraws from the Plan after a Purchase Date, the withdrawal shall not affect shares of Stock acquired by the Participant on such Purchase Date. A Participant who voluntarily
withdraws from the Plan is prohibited from resuming participation in the Plan in the same Offering from which he or she withdrew, but may participate in any subsequent Offering by again satisfying the requirements of Sections 5 and 7.1. The Company
may impose, from time to time, a requirement that the notice of withdrawal from the Plan be on file with the Company’s designated office for a reasonable period prior to the effectiveness of the Participant’s withdrawal. 
  

 9 

 12.2 RETURN OF PAYROLL
DEDUCTIONS. Upon a Participant’s voluntary withdrawal from the Plan pursuant to Section 12.1, the Participant’s accumulated Plan account balance which has not been applied toward the purchase
of shares of Stock shall be refunded to the Participant as soon as practicable after the withdrawal, without the payment of any interest, and the Participant’s interest in the Plan and the Offering shall terminate. Such amounts to be refunded
in accordance with this Section may not be applied to any other Offering under the Plan. 
  
 13. TERMINATION OF EMPLOYMENT OR ELIGIBILITY. Upon a Participant’s ceasing, prior to a Purchase Date, to be an Employee of
the Participating Company Group for any reason, including retirement, disability or death, or upon the failure of a Participant to remain an Eligible Employee, the Participant’s participation in the Plan shall terminate immediately. In such
event, the Participant’s Plan account balance which has not been applied toward the purchase of shares shall, as soon as practicable, be returned to the Participant or, in the case of the Participant’s death, to the Participant’s
beneficiary designated in accordance with Section 20, if any, or legal representative, and all of the Participant’s rights under the Plan shall terminate. Interest shall not be paid on sums returned pursuant to this Section 13. A Participant
whose participation has been so terminated may again become eligible to participate in the Plan by satisfying the requirements of Sections 5 and 7.1. 
  
 14. CHANGE IN CONTROL 
  
 14.1 DEFINITIONS. 
  
 (a) An “Ownership Change Event” shall be deemed to have occurred
if any of the following occurs with respect to the Company: (i) the direct or indirect sale or exchange in a single or series of related transactions by the stockholders of the Company of more than fifty percent (50%) of the voting stock of the
Company; (ii) a merger or consolidation in which the Company is a party; (iii) the sale, exchange, or transfer of all or substantially all of the assets of the Company; or (iv) a liquidation or dissolution of the Company. 
  
 (b) A “Change in
Control” shall mean an Ownership Change Event or a series of related Ownership Change Events (collectively, the “Transaction”) wherein the stockholders of the Company
immediately before the Transaction do not retain immediately after the Transaction, in substantially the same proportions as their ownership of shares of the Company’s voting stock immediately before the Transaction, direct or indirect
beneficial ownership of more than fifty percent (50%) of the total combined voting power of the outstanding voting securities of the Company or, in the case of a Transaction described in Section 14.1(a)(ii), the surviving corporation, or a
Transaction described in Section 14.1(a)(iii), the corporation or other business entity to which the assets of the Company were transferred (the “Transferee”), as the case may be. For purposes of the preceding sentence,
indirect beneficial ownership shall include, without limitation, an interest resulting from ownership of the voting securities of one or more corporations or other business entities which own the Company or the Transferee, as the case may be, either
directly or through one or more subsidiary corporations or other business entities. The Board shall have the right to determine whether multiple sales or exchanges of the voting securities of the Company or multiple Ownership Change Events are
related, and its determination shall be final, binding and conclusive. 
  
 14.2 EFFECT OF CHANGE IN CONTROL ON PURCHASE RIGHTS. In the event of a Change
in Control, the surviving, continuing, successor, or purchasing corporation or parent thereof, as the case may be (the “Acquiring Corporation”), may, without the consent of any Participant, assume
the Company’s rights and obligations under the Plan. If the Acquiring Corporation elects not to assume the Company’s rights and obligations under the Plan, the Purchase Date of the then current Offering Period shall be accelerated to a
date before the date of the Change in Control specified by the Board, but the number of shares of Stock subject to outstanding Purchase Rights shall not be adjusted. All Purchase Rights which are neither assumed by the Acquiring Corporation in
connection with the Change in Control nor exercised as of the date of the Change in Control shall terminate and cease to be outstanding effective as of the date of the Change in Control. 
  

 10 

 15. NONTRANSERABILITY OF PURCHASE RIGHTS.
Neither payroll deductions or other amounts credited to a Participant’s Plan account nor a Participant’s Purchase Right may be assigned, transferred, pledged or otherwise disposed of in any manner other than as provided by the Plan or
by will or the laws of descent and distribution. (A beneficiary designation pursuant to Section 20 shall not be treated as a disposition for this purpose.) Any such attempted assignment, transfer, pledge or other disposition shall be without effect,
except that the Company may treat such act as an election to withdraw from the Plan as provided in Section 12.1. A Purchase Right shall be exercisable during the lifetime of the Participant only by the Participant. 
  
 16. COMPLIANCE WITH SECURITIES
LAW. The issuance of shares under the Plan shall be subject to compliance with all applicable requirements of federal, state and foreign law with respect to such securities. A Purchase Right may not be exercised if the issuance of
shares upon such exercise would constitute a violation of any applicable federal, state or foreign securities laws or other law or regulations or the requirements of any securities exchange or market system upon which the Stock may then be listed.
In addition, no Purchase Right may be exercised unless (a) a registration statement under the Securities Act of 1933, as amended, shall at the time of exercise of the Purchase Right be in effect with respect to the shares issuable upon exercise of
the Purchase Right, or (b) in the opinion of legal counsel to the Company, the shares issuable upon exercise of the Purchase Right may be issued in accordance with the terms of an applicable exemption from the registration requirements of said Act.
The inability of the Company to obtain from any regulatory body having jurisdiction the authority, if any, deemed by the Company’s legal counsel to be necessary to the lawful issuance and sale of any shares under the Plan shall relieve the
Company of any liability in respect of the failure to issue or sell such shares as to which such requisite authority shall not have been obtained. As a condition to the exercise of a Purchase Right, the Company may require the Participant to satisfy
any qualifications that may be necessary or appropriate, to evidence compliance with any applicable law or regulation, and to make any representation or warranty with respect thereto as may be requested by the Company. 
  
 17. RIGHTS AS A
STOCKHOLDER AND EMPLOYEE. A Participant shall have no rights as a stockholder by virtue of the Participant’s participation in the Plan until the date of the issuance of the shares
purchased pursuant to the exercise of the Participant’s Purchase Right (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company). No adjustment shall be made for dividends,
distributions or other rights for which the record date is prior to the date such shares are issued, except as provided in Section 4.2. Nothing herein shall confer upon a Participant any right to continue in the employ of the Participating Company
Group or interfere in any way with any right of the Participating Company Group to terminate the Participant’s employment at any time. 
  
 18. LEGENDS. The Company may at any time place legends or other identifying symbols referencing any applicable federal, state
or foreign securities law restrictions or any provision convenient in the administration of the Plan on some or all of the certificates representing shares of Stock issued under the Plan. The Participant shall, at the request of the Company,
promptly present to the Company any and all certificates representing shares acquired pursuant to a Purchase Right in the possession of the Participant in order to carry out the provisions of this Section. Unless otherwise specified by the Company,
legends placed on such certificates may include but shall not be limited to the following: 
  

	
	“THE SHARES EVIDENCED BY THIS CERTIFICATE WERE ISSUED BY THE CORPORATION
TO THE REGISTERED HOLDER UPON THE PURCHASE OF SHARES UNDER AN EMPLOYEE
STOCK PURCHASE PLAN AS DEFINED IN
SECTION 423 OF THE INTERNAL REVENUE
CODE OF 1986, AS AMENDED. THE TRANSFER AGENT FOR THE SHARES EVIDENCED
HEREBY SHALL NOTIFY THE CORPORATION IMMEDIATELY OF ANY TRANSFER OF THE
SHARES BY THE REGISTERED HOLDER HEREOF. THE REGISTERED HOLDER
SHALL
HOLD ALL SHARES PURCHASED UNDER THE PLAN IN THE REGISTERED HOLDER’S
NAME (AND NOT IN THE NAME OF ANY NOMINEE).”

  
 19.
NOTIFICATION OF DISPOSITION OF SHARES. The Company may require the Participant to give the Company prompt notice of any disposition of shares
acquired by exercise of a Purchase Right. The 
  

 11 

 Company may require that until such time as a Participant disposes of shares acquired upon exercise of a Purchase Right,
the Participant shall hold all such shares in the Participant’s name (or, if elected by the Participant, in the name of the Participant and his or her spouse but not in the name of any nominee) until the later of two years after the date of
grant of such Purchase Right or one year after the date of exercise of such Purchase Right. The Company may direct that the certificates evidencing shares acquired by exercise of a Purchase Right refer to such requirement to give prompt notice of
disposition. 
  
 20. DESIGNATION OF
BENEFICIARY 
  
 20.1
DESIGNATION PROCEDURE. Subject to local laws and procedures, a Participant may file a written designation of a beneficiary who is to receive (a) shares and cash, if any, from the Participant’s Plan
account if the Participant dies subsequent to a Purchase Date but prior to delivery to the Participant of such shares and cash or (b) cash, if any, from the Participant’s Plan account if the Participant dies prior to the exercise of the
Participant’s Purchase Right. If a married Participant designates a beneficiary other than the Participant’s spouse, the effectiveness of such designation may be subject to the consent of the Participant’s spouse. A Participant may
change his or her beneficiary designation at any time by written notice to the Company. 
  
 20.2 ABSENCE OF BENEFICIARY DESIGNATION. If a Participant dies without an effective designation pursuant to
Section 20.1 of a beneficiary who is living at the time of the Participant’s death, the Company shall deliver any shares or cash credited to the Participant’s Plan account to the Participant’s legal representative. 
  
 21. NOTICE. All notices or other communications
by a Participant to the Company under or in connection with the Plan shall be deemed to have been duly given when received in the form specified by the Company at the location, or by the person, designated by the Company for the receipt thereof.

  
 22. AMENDMENT OR
TERMINATION OF PLAN. The Board may at any time amend, suspend or terminate the Plan, except that (a) no such amendment, suspension or termination shall affect Purchase Rights previously
granted under the Plan unless expressly provided by the Board and (b) no such amendment, suspension or termination may adversely affect a Purchase Right previously granted under the Plan without the consent of the Participant, except to the extent
permitted by the Plan or as may be necessary to qualify the Plan as an employee stock purchase plan pursuant to Section 423 of the Code or to comply with any applicable law, regulation or rule. In addition, an amendment to the Plan must be approved
by the stockholders of the Company within twelve (12) months of the adoption of such amendment if such amendment would authorize the sale of more shares than are then authorized for issuance under the Plan or would change the definition of the
corporations that may be designated by the Board as Participating Companies. Notwithstanding the foregoing, in the event that the Board determines that continuation of the Plan or an Offering would result in unfavorable financial accounting
consequences to the Company as a result of a change after the Effective Date in the generally accepted accounting principles applicable to the Plan, the Board may, in its discretion and without the consent of any Participant, including with respect
to an Offering Period then in progress: (i) terminate the Plan or any Offering Period, (ii) accelerate the Purchase Date of any Offering Period, (iii) reduce the discount applicable in determining the Purchase Price of any Offering Period, (iv)
reduce the maximum number of shares of Stock that may be purchased in any Offering Period or (v) take any combination of the foregoing actions. 
  

 12 

 IN WITNESS WHEREOF, the Company has
adopted the foregoing Plan, effective as of the date set forth above. 
  

	
	 CALLWAVE, INC., a Delaware corporation
  
  
  
 By    /s/ David F. Hofstatter
         David F. Hofstatter, President

  

 132003 Cash Bonus Plan

 EXHIBIT 10.17 
  

  
 CALLWAVE, INC. 
  
 2003 CASH BONUS PLAN 
  

  
 SEPTEMBER 1, 2003 
  

  

 2003 CASH BONUS PLAN 
  
 THIS 2003 CASH BONUS
PLAN (the “Plan”) is made and adopted by CALLWAVE, INC., a California corporation (the “Company”), effective as of September 1,
2003, for the purpose of enabling the Company to reward certain key employees with cash bonus awards. 
  
 SECTION 1. DEFINITIONS. For purposes of this Plan, the term: 
  
 1.1 “AWARD” means a discretionary cash payment made by the Company to an Eligible Employee in accordance
with the terms of this Plan. 
  
 1.2
“CEO” means the Chief Executive Officer of the Company. 
  
 1.3 “CHANGE OF CONTROL TRANSACTION” means either (a) a sale of all or substantially all of the assets of the Company, or (b) any
transaction or series of related transactions involving either a sale of outstanding shares of the Company’s capital stock, or a merger, consolidation, or other similar reorganization transaction, in which those persons who were shareholders of
the Company immediately prior to the closing of that transaction own, immediately following that closing, less than fifty percent (50%) of the outstanding shares of the Company or the surviving or acquiring corporation, as the case may be.

  
 1.4 “COMPANY”
means CALLWAVE, Inc., a California corporation. 
  
 1.5 “ELIGIBLE EMPLOYEES” means those employees of the Company, other than the CEO, who commenced employment with the Company on or prior to June 30, 2003. In no event shall an
individual who first commences working for the Company after June 30, 2003, be eligible to receive an Award hereunder. 
  
 1.6 “LIQUIDITY EVENT” means either: 
  
 (a) IPO. An underwritten public offering of shares of the
Company’s capital stock pursuant to an effective registration statement filed under the Securities Act of 1933, as amended, pursuant to which the Company has (i) generated at least Ten Million Dollars ($10,000,000) of gross offering proceeds,
(ii) sold its shares in such offering at a price per share that is at least Five Dollars ($5.00) per share; or 
  
 (b) CHANGE OF CONTROL. The closing of a Change of Control Transaction.

  
 1.7 “PLAN” means this
2003 Cash Bonus Plan. 
  
 SECTION 2. PURPOSE. This Plan is intended to
reward certain Eligible Employees who have made significant contributions to the Company’s current success and whose continuing contributions to the Company will be important for the Company’s success. 
  
 SECTION 3. ADMINISTRATION. This Plan shall be administered by the CEO of the Company,
who subject to Section 3.2, below, shall have full and final authority to operate, manage and administer the Plan on behalf of the Company, provided that, no Award may be made hereunder to the CEO. 
  
 3.1 AUTHORITY TO
ADMINISTER. Subject to Section 3.2, below, the authority of the CEO to administer this Plan includes, but is not limited to, (a) the power to grant Awards conditionally or unconditionally; (b) the power to prescribe
the form or forms of the instruments evidencing Awards granted under the Plan; (c) the power to interpret the Plan; (d) the power to provide regulations for the operation of the 
  

 incentive features of the Plan; (e) the power to delegate responsibility for Plan operation, management and
administration on such terms, consistent with the Plan, as the CEO may establish; and (f) the power to delegate to other persons the responsibility for performing ministerial acts in furtherance of the Plan’s purpose. In addition, as to each
Award, the CEO shall have full and final authority in his discretion to determine the time or times at which such Awards shall be granted. 
  
 3.2 LIMITATION. Notwithstanding any other provision of the Plan to the contrary, in no event may any Award be
made to the CEO. 
  
 SECTION 4. PARTICIPATION AND AWARDS 
  
 4.1 AWARDS TO SELECTED
ELIGIBLE EMPLOYEES. The CEO, in his sole discretion, may select those Eligible Employees (if any) who shall receive Awards hereunder, provided that in no event shall an Award be paid to an Eligible Employee
hereunder if such Eligible Employee is not still employed by the Company as of the date of the Liquidity Event that occasions payment of the Award to that Eligible Employee. 
  
 4.2 AWARDS. Subject to Section 5, below, the amount, terms, and conditions of each Award
hereunder shall determined in the sole discretion of the CEO. Each such Award shall be paid in cash, and shall be payable at the closing of or in connection with any Liquidity Event, or at such other time as the CEO may determine to be appropriate.
If any Award is made to any Eligible Employee subject to one or more conditions and any such conditions are not satisfied, then the amount allocated to such Eligible Employee may be included as part of an Award to another Eligible Employee.

  
 SECTION 5. FUNDING. In no event shall the maximum amount of Awards
actually paid pursuant to this Plan exceed Six Hundred Thousand Dollars ($600,000).  
  
 SECTION 6. MISCELLANEOUS 
  
 6.1 GOVERNING LAW. This Plan shall be governed by and construed in accordance with the laws of the State of California. 
  
 6.2 AMENDMENT AND TERMINATION. The Company may amend or terminate
this Plan at any time. From and after the effective date of any such termination, no further Awards may be made under this Plan, provided that the termination of this Plan shall not affect the validity of any Award made prior to the effective
date of such termination, even if any of the conditions to payment of such Award shall not have been satisfied as of the effective date of such termination. 
  
 6.3 NO ASSURANCES OF EMPLOYMENT. Neither the adoption of this Plan, nor the
granting of any Award hereunder is intended or shall be construed as either (a) conferring upon any individual any right to remain employed by the Company for any specified term, or (b) limiting in any way the right, power and authority of the
Company to terminate the employment or other service engagement of any Eligible Employee at any time, either with our without cause. 
  
 [Signature appears on the following page.] 
  

 2 

 IN WITNESS WHEREOF, the undersigned has executed this
Plan, effective as of the date set forth above. 
  

			
	CALLWAVE, INC., a California corporation
		
	 By
	 	 /s/    DAVID F.
HOFSTATTER        

	 	 	David F. Hofstatter, President and CEO

  

 3

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