Document:

Exhibit

NETGEAR, INC.

CHANGE OF CONTROL AND SEVERANCE AGREEMENT

This Agreement is entered into as of _______________, 201_, (the “Effective Date”) by and between NETGEAR, Inc. (the “Company”), and ___________ (“Executive”).

		
	1.
	Duties and Scope of Employment.

(a)    Positions and Duties. As of the Effective Date, Executive is serving as Senior Vice President of the Company. Executive will render such business and professional services in the performance of his duties, consistent with Executive’s position within the Company, as shall reasonably be assigned to him by the Company’s Chief Executive Officer and/or Board of Directors (the “Board”). The period of Executive’s employment under this Agreement is referred to herein as the “Employment Term.”

(b)    Obligations. During the Employment Term, Executive will perform his duties faithfully and to the best of his ability and will devote his full business efforts and time to the Company. For the duration of the Employment Term, Executive agrees not to actively engage in any other employment, occupation or consulting activity for any direct or indirect remuneration without the prior approval of the Board.

2.At-Will Employment. The parties agree that Executive’s employment with the Company will be “at-will” employment and may be terminated at any time with or without cause or notice. Executive understands and agrees that neither his job performance nor promotions, commendations, bonuses or the like from the Company give rise to or in any way serve as the basis for modification, amendment, or extension, by implication or otherwise, of his employment with the Company.

3.    Compensation.

(a)    Base Salary. During the Employment Term, the Company will pay Executive as compensation for his services a base salary at the annualized rate of _________________ (the “Base Salary”). The Base Salary will be paid periodically in accordance with the Company’s normal payroll practices and be subject to the usual, required withholding. Executive’s salary will be reviewed by the Company from time to time (but no more frequently than annually), and may be subject to adjustment based upon various factors including, but not limited to, Executive’s performance and the Company’s profitability. Any adjustment to Executive’s salary shall be in the sole discretion of the Company.

(b)    MBO Bonus. Executive will be eligible to receive an annual target bonus of up to Fifty percent (50%) per year based upon the Company’s achievement of various financial and/or other goals established by the Board. All MBO bonuses will be subject to applicable withholding and taxes.  Executive’s annual bonus will be paid no later than March 15th of the year following the year in which Executive’s annual bonus was earned.

(c)    Equity Awards. Executive has been and in the future may be granted (i) options to purchase shares of the Company’s common stock under the Company’s 2016 Equity Incentive Plan (the “2016 Plan”) (the “Options”); and (ii) awards of restricted stock units, each unit representing the right to receive a share of Company common stock on the date it becomes vested (the “RSU Awards”).  The Options will be subject to the terms, definitions and provisions of the 2016 Plan and the stock option agreement(s) by and between Executive and the Company (the “Option Agreement(s)”), which are incorporated herein by reference.  The RSU Awards will be subject to the terms, definitions and provisions of the 2016 Plan and the RSU Award grant agreement(s) between Executive and the Company (the “RSU Agreement(s)”), which are incorporated herein by reference.  Executive shall also be subject to the Company’s Director and Officer stock ownership guidelines, which is also incorporated by reference hereto.
    
4.    Employee Benefits. During the Employment Term, Executive will be entitled to participate in the employee benefit plans currently and hereafter maintained by the Company of general applicability to other senior executives of the Company, including, without limitation, the Company’s group medical, dental, vision, and disability plans. The Company reserves the right to cancel or change the benefit plans and programs it offers to its employees at any time.

5.Expenses. The Company will reimburse Executive for reasonable travel, entertainment or other expenses incurred by Executive in the furtherance of or in connection with the performance of Executive’s duties hereunder, in accordance with the Company’s expense reimbursement policy as in effect from time to time.  

		
	6.
	Severance.

(a)    Involuntary Termination. If Executive’s employment with the Company terminates other than voluntarily, or for death, disability or for “Cause” (as defined in Paragraph 9 of this Agreement), and Executive signs and does not revoke a standard release of claims (as described further in Section 6(b) below) with the Company, then Executive shall be entitled to receive severance payments at Executive’s final base salary rate, less applicable withholding, until twenty-six (26) weeks after the date of termination without Cause. Severance payments will be made in accordance with the Company’s normal payroll procedures. During the period in which Executive is receiving severance payments, Company will reimburse Executive and his family for COBRA premiums, assuming Executive remains eligible during the entire Severance Period. In addition, if Executive’s employment terminates other than voluntarily or for “Cause” (as defined herein), Executive will be entitled to continue to have all stock options, restricted stock awards and all other equity awards vest during the twelve month period immediately following the date of such termination.

(b)    Timing of Release.  The receipt of any severance benefits pursuant to Section 6(a) will be subject to Executive signing and not revoking a standard release of claims agreement (the “Release”), and provided that such Release is effective within sixty (60) days following the termination of employment or such earlier period as required by the Release.  To become effective, the Release must be executed by the Executive and any revocation periods (as required by statute, 

regulation, or otherwise) must have expired without the Executive having revoked the Release.  In addition, no severance will be paid or provided until the Release actually becomes effective.

7.Voluntary Termination; Termination for Cause. If Executive’s employment with the Company terminates voluntarily by Executive or for Cause by the Company, then all vesting of Options, RSU Awards, and all other options and restricted stock awards granted to Executive will terminate immediately and all payments of compensation by the Company to Executive hereunder and all obligations with respect thereto (including, without limitations, with respect to base salary, bonuses, employee benefits, relocation and temporary living reimbursements and other expense reimbursements) will terminate immediately (except as to amounts already earned).

		
	8.
	Change of Control/Good Reason.

(a)    If within one year following any Change of Control (as defined below) Executive’s employment is terminated without Cause or voluntarily by Executive for Good Reason, Executive will receive two years acceleration of any unvested portion of all Options and all RSU Awards.

(b)    For purposes of this Agreement, a “Change of Control” of the Company shall be deemed to have occurred if at any time after the Effective Date:

(i)    any “person” (as such term is used to Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), other than a trustee or other fiduciary holding securities of the Company under an employee benefit plan of the Company, becomes the “beneficial owner” (as defined in Rule 13d-3 promulgated under the Exchange Act), directly or indirectly, of securities of the Company representing 50% or more of (A) the outstanding shares of common stock of the company or (B) the combined voting power of the Company’s then-outstanding securities entitled to vote generally in the election of directors; or

(ii)    the Company (A) is party to a merger, consolidation or exchange of securities which results in the holders of voting securities of the Company outstanding immediately prior thereto failing to continue to hold at least 50% of the combined voting power of the voting securities of the Company, the surviving entity or a parent of the surviving entity outstanding immediately after such merger, consolidation or exchange, or (B) sells or disposes of all or substantially all of the Company’s assets (or any transaction having similar effect is consummated), or (C) the individuals constituting the Board immediately prior  to such merger, consolidation, exchange, sale or disposition shall cease to constitute at least 50% of the Board, unless the election of each director who was not a director prior to such merger, consolidation, exchange, sale or disposition was approved by a vote of at least two-thirds of the directors then in office who were directors prior to such merger, consolidation, exchange, sale or disposition.

(c)    For purposes of this Agreement, “Good Reason” means any of the following conditions, which condition(s) remain(s) in effect 10 days after written notice to the Board from you of such condition(s):

		
	(i)
	a material decrease in your target annual compensation; or

 
(ii)    a material, adverse change in your authority, responsibilities or duties, as measured against your authority, responsibilities or duties immediately prior to such change.

(iii)    notwithstanding the foregoing, for the purposes of this Agreement, in no event will you have Good Reason to resign due merely to a change of title or a change in your reporting caused by a change of control or discontinuance or modification of any duties and responsibilities solely related to the operation of a public company.

9.    Definition of Cause. For purposes of this Agreement, “Cause” is defined as (i) an act of dishonesty made by Executive in connection with Executive’s responsibilities as an employee, (ii) Executive’s conviction of, or plea of nolo contendere to, a felony, (iii) Executive’s gross misconduct, or (iv) Executive’s continued violation of his employment duties after Executive has received a written demand for performance from the Company which specifically sets forth the factual basis for the Company’s belief that Executive has not substantially performed his duties.

10.    Confidential Information. Executive agrees to enter into the Company’s standard Confidential Information and Invention Assignment Agreement (the “Confidential Information Agreement”) upon commencing employment hereunder, and to abide by its terms during and after his employment with the Company.

11.    Non-Solicitation. Until the date one (1) year after the termination of Executive’s employment with the Company for any reason, Executive agrees and acknowledges that Executive’s right to receive the severance payments set forth in Section 6 (to the extent Executive is otherwise entitled to such payments) shall be conditioned upon Executive not either directly or indirectly soliciting, inducing, attempting to hire, recruiting, encouraging, taking away, hiring any employee of the Company or causing an employee to leave his or her employment either for Executive or for any other entity or person.

12.    Assignment. This Agreement will be binding upon and inure to the benefit of (a) the heirs, executors and legal representatives of Executive upon Executive’s death and (b) any successor of the Company. Any such successor of the Company will be deemed substituted for the company under the terms of this Agreement for all purposes. For this purpose, “successor” means any person, firm, corporation or other business entity which at any time, whether by purchase, merger or otherwise, directly or indirectly acquires all or substantially all of the assets or business of the Company. None of the rights of Executive to receive any form of compensation payable pursuant to this Agreement may be assigned or transferred except by will or the laws of descent and distribution. Any other attempted assignment, transfer, conveyance or other disposition of Executive’s right to compensation or other benefits will be null and void.

13.    Notices. All notices, requests, demands and other communications called for hereunder shall be in writing and shall be deemed given (i) on the date of delivery if delivered personally, (ii) one (1) day after being sent by a well established commercial overnight service, or 

(iii) four (4) days after being mailed by registered or certified mail, return receipt requested, prepaid and addressed to the parties or their successors at the following addresses, or at such other addresses as the parties may later designate in writing:

If to the Company:

NETGEAR, Inc.
350 East Plumeria Drive
San Jose, CA 95134
Attn: Legal Department

If to Executive:
    
at the last residential address known by the Company.

14.    Severability. In the event that any provision hereof becomes or is declared by a court of competent jurisdiction to be illegal, unenforceable or void, this Agreement will continue in full force and effect without said provision.

15.    Arbitration.
    
(a)    General. In consideration of Executive’s service to the Company, its promise to arbitrate all employment related disputes and Executive’s receipt of the compensation, pay raises and other benefits paid to Executive by the Company, at present and in the future, Executive agrees that any and all controversies, claims, or disputes with anyone (including the Company and any employee, officer, director, shareholder or benefit plan of the Company in their capacity as such or otherwise) arising out of, relating to, or resulting from Executive’s service to the Company under the Agreement or otherwise or the termination of Executive’s service with the Company, including any breach of this Agreement, shall be subject to binding arbitration under the Arbitration Rules set forth in California Code of Civil Procedure Section 1280 through 1294.2, including Section 1283.05 (the “Rules”) and pursuant to California law. Disputes which Executive agrees to arbitrate, and thereby agrees to wave any right to a trial by jury, include any statutory claims under state or federal law, including, but not limited to, claims under Title VII of the Civil Rights Act of 1964, the Americans with Disabilities Act of 1990, the age Discrimination in Employment Act of 1967, the Older Workers Benefit Protection Act, the California Fair Employment and Housing Act, the California Labor Code, claims of harassment, discrimination or wrongful termination and any statutory claims. Executive further understands that this Agreement to arbitrate also applies to any disputes that the Company may have with Executive.

(b)    Procedure. Executive agrees that any arbitration will be administered by the American Arbitration Association (“AAA”) and that a neutral arbitrator will be selected in a manner consistent with its National Rules for the Resolution of Employment Disputes. The arbitration proceedings will allow for discovery according to the rules set forth in the California Code of Civil Procedure. Executive agrees that the arbitrator shall have the power to decide any motions brought by any party to the arbitration, including motions for summary judgment and/or adjudication and 

motions to dismiss and demurrers, prior to any arbitration hearing. Executive agrees that the arbitrator shall issue a written decision on the merits. Executive also agrees that the arbitrator shall have the power to award any remedies, including attorneys’ fees and costs, available under applicable law. The Parties understand that the Arbitrator shall issue a written decision in support of his award. Executive understands the Company will pay for any administrative or hearing fees charged by the arbitrator or AAA except that Executive shall pay the first $200.00 of any filing fees associated with any arbitration Executive initiates. Executive agrees that the arbitrator shall administer and conduct any arbitration in a manner consistent with the Rules and that to the extent that the AAA’s National Rules for the Resolution of Employment Disputes conflict with the Rules, the Rules shall take precedence.

(c)    Remedy. Except as provided by the Rules, arbitration shall be the sole, exclusive and final remedy for any dispute between Executive and the Company. Accordingly, except as provided for by the Rules, neither Executive nor the Company will be permitted to pursue court action regarding claims that are subject to arbitration. Notwithstanding, the arbitrator will not have the authority to disregard or refuse to enforce any lawful Company policy, and the arbitrator shall not order or require the Company to adopt a policy not otherwise required by law which the Company has not adopted.

(d)    Availability of Injunctive Relief. In addition to the right under the Rules to petition the court for provisional relief, Executive agrees that any party may also petition the court for injunctive relief where either party alleges or claims a violation of this Agreement or the Confidentiality Agreement or any other agreement regarding trade secrets, confidential information, nonsolicitation or Labor Code §2870. In the event either party seeks injunctive relief, the prevailing party shall be entitled to recover reasonable costs and attorneys fees.

(e)    Administrative Relief. Executive understands that this Agreement does not prohibit Executive from pursuing an administrative claim with a local, state or federal administrative body such as the Department of Fair Employment and Housing, the Equal Employment Opportunity Commission or the workers’ compensation board. This Agreement does, however, preclude Executive from pursuing court action regarding any such claim.

(f)    Voluntary Nature of Agreement. Executive acknowledges and agrees that Executive is executing this Agreement voluntarily and without any duress or undue influence by the Company or anyone else. Executive further acknowledges and agrees that Executive has carefully read this Agreement and that Executive has asked any questions needed for Executive to understand the terms, consequences and binding effect of this Agreement and fully understand it, including that Executive is waiving Executive’s right to a jury trial. Finally, Executive agrees that Executive has been provided an opportunity to seek the advice of an attorney of Executive’s choice before signing this Agreement.

17.    Integration. This Agreement, together with the 2016 Plan, Option Agreement(s), RSU Agreement(s) and the Confidential Information Agreement represents the entire agreement and understanding between the parties as to the subject matter herein and supersedes all prior or contemporaneous agreements whether written or oral. No waiver, alteration, or modification of any 

of the provisions of this Agreement will be binding unless in writing and signed by duly authorized representatives of the parties hereto.

18.    Tax Withholding. All payments made pursuant to this Agreement will be subject to withholding of applicable taxes.

19.    Governing Laws. This Agreement will be governed by the laws of the State of California.

20.    Section 409A.

(a)    Notwithstanding anything to the contrary in this Agreement, no Deferred Payments (as defined below) shall be payable until Executive has a “separation from service” within the meaning of Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”) and the final regulations and official guidance thereunder (“Section 409A”).  Similarly, no severance payable to Executive, if any, pursuant to this Agreement that would otherwise be exempt from Section 409 pursuant to Treasury Regulation Section 1.409A-1(b)(9) shall be payable until Executive has a “separation from service” within the meaning of Section 409A.
    
(b)    Any severance payments or benefits under this Agreement that would be considered Deferred Payments will be paid on, or, in the case of installments, will not commence until, the sixtieth (60th) day following Executive’s separation from service, or, if later, such time as required by Section 20(c).  Any installment payments that would have been made to Executive during the sixty (60) day period immediately following Executive’s separation from service but for the preceding sentence will be paid to Executive on the sixtieth (60th) day following the Executive’s separation from service and the remaining payments shall be made as provided in this Agreement.

(c)    Further, if Executive is a “specified employee” within the meaning of Section 409A at the time of Executive’s separation from service (other than due to death), and the severance payments and benefits payable to Executive, if any, pursuant to the Agreement, when considered together with any other severance payments or separation benefits, are considered deferred compensation under Section 409A (together, the “Deferred Payments”), such Deferred Payments that are otherwise payable within the first six (6) months following Executive’s separation from service will become payable on the first payroll date that occurs on or after the date six (6) months and one (1) day following the date of Executive’s separation from service.  All subsequent Deferred Payments, if any, will be payable in accordance with the payment schedule applicable to each payment or benefit.  Notwithstanding anything herein to the contrary, if Executive dies following Executive’s separation from service but prior to the six (6) month anniversary of Executive’s separation from service (or any later delay date), then any payments delayed in accordance with this paragraph will be payable in a lump sum as soon as administratively practicable after the date of Executive’s death and all other Deferred Payments will be payable in accordance with the payment schedule applicable to each payment or benefit.  Each payment and benefit payable under the Agreement is intended to constitute a separate payment for purposes of Section 1.409A-2(b)(2) of the Treasury Regulations.

(d)    Any amount paid under this Agreement that satisfies the requirements of the “short-term deferral” rule set forth in Section 1.409A-1(b)(4) of the Treasury Regulations will not constitute Deferred Payments for purposes the Agreement.  Any severance payment that qualifies as a payment made as a result of an involuntary separation from service pursuant to Section 1.409A-1(b)(9)(iii) of the Treasury Regulations that does not exceed the Section 409A Limit shall not constitute Deferred Payments for purposes of the Agreement.  For purposes of this section (d), “Section 409A Limit” will mean the lesser of two (2) times: (i) Executive’s annualized compensation based upon the annual rate of pay paid to Executive during the taxable year preceding the taxable year of Executive’s separation from service as determined under Treasury Regulation Section 1.409A-1(b)(9)(iii)(A)(1) and any Internal Revenue Service guidance issued with respect thereto; or (ii) the maximum amount that may be taken into account under a qualified plan pursuant to Section 401(a)(17) of the Code for the year in which Executive’s employment is terminated.

(e)    The foregoing provisions are intended to comply with the requirements of Section 409A so that none of the severance payments and benefits to be provided under the Agreement will be subject to the additional tax imposed under Section 409A, and any ambiguities herein will be interpreted to so comply.  Executive and the Company agree to work together in good faith to consider amendments to the Agreement and to take such reasonable actions which are necessary, appropriate or desirable to avoid imposition of any additional tax or income recognition prior to actual payment to Executive under Section 409A.

21.    Acknowledgment. Executive acknowledges that he has had the opportunity to discuss this matter with and obtain advice from his private attorney, has had sufficient time to, and has carefully read and fully understands all the provisions of this Agreement, and is knowingly and voluntarily entering into this Agreement. 

IN WITNESS WHEREOF, each of the parties has executed this Agreement, in the case of the Company by their duly authorized officers, as of the day and year first above written.

COMPANY:
NETGEAR, INC.

_________________                                           Date:

EXECUTIVE:

_________________                                           Date:EX-10.3

 Exhibit 10.3 
  

			
	

	  	PEGASYSTEMS INC.
	  	One Rogers Street
	  	Cambridge, MA 02142-1209 USA

 Notice of Grant of Stock Option and Option Agreement 

You have been granted an award of Nonstatutory Stock Options pursuant to the terms of the Pegasystems Inc. Amended and Restated 2004 Long-Term Incentive Plan
(the “Plan”). 
 If you have not yet completed the acceptance process for any of your awards, you may complete the acceptance process by
(A) reviewing your award details, (B) reviewing your award documents listed in this Section B of your Online Award Acceptance (the “Award Documents”), and (C) confirming your acceptance of your award. 

By accepting this award, you agree that this award is granted and governed by the terms and conditions of the Plan, this notice, and all your Award Documents
listed herein, including Exhibit A to this Notice of Stock Option and Option Agreement, and incorporated by reference. This notice, together with your Award Documents and your electronic acceptance, collectively comprise your total agreement (the
“Award Agreement”). 
  

	
	Pegasystems Inc.
	
	By:
	 

  

	Alan Trefler, Chairman and
	Chief Executive Officer

 Exhibit A 

Notice of Grant of Stock Option and Option Agreement for {Non-}U.S. Employees 

1.    Exercise Price. The Exercise Price is equal to Fair Market Value, as defined in Section 2(n)
of the Plan, of a share of the Company’s Common Stock on the date of the Notice of Grant of Stock Option and Option Agreement for {Non-U.S. Employees} (of which this Exhibit A is a part) (the
“Option Agreement”). 
 2.    Option Exercise. Once vested, and subject to the other
provisions of this Option Agreement, the Option shall remain exercisable in whole or in part at any time through and including the day immediately preceding the date set forth under the heading “Expiration” on the Option Agreement (the
“Expiration Date”), after which the Option shall expire and no longer be exercisable. 
 The Option shall be exercisable by notice
to the Company or the Company’s designated stock option administrator, which shall: 
 (a)    state the election to
exercise the Option, the number of shares of Common Stock with respect to which it is being exercised, and, if different than the Optionee, the person in whose name the stock certificate or certificates for such shares of Common Stock are to be
registered, and the address and Social Security number of such person; 
 (b)    be signed by the person or persons
entitled to exercise the Option, and if the Option is being exercised by a person or persons other than the Optionee, be accompanied by proof satisfactory to the Company’s legal counsel of the right of such person or persons to exercise the
Option; and 
 (c)    if to the Company, be in writing and delivered in person or by certified mail to the Chief
Financial Officer of the Company or, if to the Company’s designated stock option administrator, be in the manner and form specified by such stock option administrator. 

Payment of the full purchase price of any shares of Common Stock, with respect to which the Option is being exercised, shall accompany the notice of exercise
of the Option and such payment may be made in cash or check payable to the Company. Alternatively, the Optionee may elect to pay the full purchase price of any shares of Common Stock, with respect to which the Option is being exercised, by having
the Company withhold, such number of shares of Common Stock as are equal in value to the full purchase price. Unless the Company has elected to have shares recorded in book entry form, the certificate or certificates for shares of Common Stock as to
which the Option is exercised shall be registered in the name of the person or persons exercising the Option. 

3.    Termination of Service. If the Optionee terminates Service other than by reason of the
Optionee’s death, Disability or Retirement, the Optionee may exercise his or her Option for three months following such termination to the extent that the Option is vested on the date of termination (but in no event later than the expiration of
the term of the Option). 
 4.    Retirement of Optionee. If the Optionee terminates Service as a
result of Retirement, the Optionee may exercise his or her Option for 24 months following such termination to the extent that the Option is vested on the date of termination (but in no event later than the expiration of the term of the Option). 

5.    Disability of Optionee. If the Optionee terminates Service as a result of
the Optionee’s Disability, the Optionee may exercise his or her Option for 24 months following such termination to the extent that the Option is vested on the date of termination (but in no event later than the expiration of the term of the
Option). 

 6.    Death of Optionee. If the Optionee dies while a
Service Provider, the Option may be exercised by the Optionee’s estate or by a person who acquires the right to exercise the Option by bequest or inheritance for 12 months following the Optionee’s termination of Service because of death.

 7.    Optionee’s Agreement. The Optionee agrees to all the terms stated in the Option
Agreement (of which this Exhibit is a part), as well as to the terms of the Plan (which shall control in case of conflict with the Option Agreement), a copy of which is attached and of which the Optionee acknowledges receipt. 

8.    Withholding. The Optionee consents to fulfill all withholding obligations for all applicable
payroll and income taxes with respect to the Option when they are due and arrange for satisfactory payment of all withholding obligations in a manner as set forth in Section 13(h) of the Plan. The Company may delay issuance of a certificate until
proper payment of such taxes has been made by the Optionee. The Company may satisfy such withholding obligations by withholding such number of shares of Common Stock as are equal in value to the amount of the required withholding. 

{8.     Withholding. Regardless of any action the Company and/or the Optionee’s employer (the
“Employer”) take with respect to any or all income tax (including U.S. federal, state and local tax and/or non-U.S. tax), social insurance, payroll tax, payment on account or other tax-related withholding (“Tax-Related Items”), the Optionee acknowledges that the ultimate liability for all Tax-Related
Items legally due by the Optionee is and remains the Optionee’s responsibility and that the Company and/or the Employer (i) make no representations or undertakings regarding the treatment of any
Tax-Related Items in connection with any aspect of the Option, including the grant, vesting or exercise of the Options, the subsequent sale of any shares of Common Stock acquired at exercise and the receipt of
any dividends; and (ii) do not commit to structure the terms of the grant or any aspect of the Option to reduce or eliminate the Optionee’s liability for Tax-Related Items. 

Prior to the relevant taxable event, the Optionee shall pay or make arrangements satisfactory to the Company and/or the Employer to satisfy
all withholding and payment on account obligations of the Company and/or the Employer. In this regard, the Optionee authorizes the Company and/or the Employer to withhold all applicable Tax-Related Items
legally payable by the Optionee from any wages or other cash compensation paid to the Optionee by the Company and/or the Employer. Alternatively, or in addition, if permissible under local law, the Optionee authorizes the Company and/or the
Employer, at its discretion and pursuant to such procedures as it may specify from time to time, to satisfy the obligations with regard to all Tax-Related Items legally payable by the Optionee by one or a
combination of the following: (i) withholding otherwise deliverable shares of Common Stock, provided that the Company only withholds the amount of shares of Common Stock necessary to satisfy the minimum withholding amount; (ii) arranging
for the sale of shares of Common Stock otherwise deliverable to the Optionee (on the Optionee’s behalf and at the Optionee’s direction pursuant to this authorization); or (iii) withholding from the proceeds of the sale of shares of
Common Stock acquired upon exercise of the Option. If the obligation for Tax-Related Items is satisfied by withholding a number of shares of Common Stock as described herein, the Optionee is deemed to have
been issued the full number of shares of Common Stock subject to the Option, notwithstanding that a number of the shares of Common Stock are held back solely for the purpose of paying the Tax-Related Items due
as a result of any aspect of the Option. The Optionee shall pay to the Company and/or the Employer any amount of Tax-Related Items that the Company and/or the Employer may be required to withhold as a result
of the Optionee’s participation in the Plan that cannot be satisfied by the means previously described. The Company may refuse to deliver to the Optionee any shares of Common Stock pursuant to the Option if the Optionee fails to comply with the
Optionee’s obligations in connection with the Tax-Related Items as described in this section.} 

 9.    Rights as Shareholders. The Optionee shall have no
rights as a shareholder of the Company with respect to any of the shares of Common Stock covered by the Option until the issuance of a stock certificate or certificates upon the exercise of the Option, and then only with respect to the shares of
Common Stock represented by such certificate or certificates. 

10.    Non-Transferability. The Option may not be transferred
in any manner other than as permitted in Section 13(j) of the Plan {by will or by the laws of descent and distribution}. The terms of the Option shall be binding upon the executors, administrators, heirs and successors of the Optionee. 

{11.    Employment Agreement. In consideration for this Option, the Recipient reaffirms the terms of the
Recipient’s Employment Agreement with Employer, including but not limited to the provisions (if any) related to competition and solicitation. The Recipient further agrees that to the extent the nature of the Employer’s business has evolved
since the date of the Employment Agreement the covenants shall also apply to the business as evolved.} 
 11.    {12.}
Compliance with Securities, Tax and Other Law. The Option may not be exercised if the issuance of shares of Common Stock upon such exercise would constitute a violation of any applicable federal or state securities
law or any other law or valid regulation. As a condition to the exercise of the Option, the Company may require the Optionee, or any person acquiring the right to exercise the Option, to make any representation or warranty that the Company deems to
be necessary under any applicable securities, tax, or other law or regulation. 
 12.    {13.} Adjustments upon Changes in
Capitalization. In the event of any change in the shares subject to the Plan or to any Option granted under the Plan by reason of a merger, consolidation, reorganization, recapitalization, stock dividend, stock split,
combination or exchange of shares {of Common Stock}, or other change in the structure of the Company, the number of shares {of Common Stock} subject to each outstanding Option and/or the Option price with respect to the shares {of Common Stock}
shall be appropriately adjusted by the Company and such adjustment shall be final, binding and conclusive. 
 13.    {14.} No
Right to Employment. The granting of the Option does not confer upon the Optionee the right to continue in the Service of the Company {and/or the Employer}, or affect in any way the right and power of the Company {and/or
the Employer} to terminate the Service of the Optionee at any time with or without assigning a reason therefor, to the same extent as the Company {and/or the Employer} might have done if the Option had not been granted. 

14.    {15.} No Guarantee. The Company offers no guarantee or assurance that the Company’s stock
has any value at the time of this grant or will have any value or liquidity at any future time. 
 {16.     Acknowledgment of
Nature of Plan and Option. In accepting the Option, the Optionee acknowledges that: 
 (a)    the
Plan is established voluntarily by the Company, it is discretionary in nature, and it may be modified, amended, suspended or terminated by the Company at any time, unless otherwise provided in the Plan and this Option Agreement; 

(b)    the Option is voluntary and occasional and does not create any contractual or other right to receive future grants
of Options, or benefits in lieu of Options, even if Options have been granted repeatedly in the past; 

 (c)    all decisions with respect to future Options, if any, will be at the
sole discretion of the Company; 
 (d)    the Optionee’s participation in the Plan is voluntary; 

(e)    the Option is an extraordinary item that does not constitute compensation for services of any kind rendered to the
Company or any Related Company, and which is outside the scope of the employment contract, if any; 
 (f)    the Option
is not part of normal or expected compensation or salary for any purposes, including, but not limited to, calculation of any severance, resignation, termination, redundancy, end of service payments, bonuses, long-service awards, pension or
retirement or welfare benefits or similar payments and in no event should be considered as compensation for, or relating in any way to, past services for the Company or any Related Company; 

(g)    in the event that the Optionee is not an Employee of the Company or any Related Company, the Option and the
Optionee’s participation in the Plan will not be interpreted to form an employment or service contract or relationship with the Company or any Related Company; 

(h)    the future value of the underlying shares of Common Stock is unknown and cannot be predicted with any certainty;

 (i)    if you exercise your Option and obtain shares of Common Stock, the value of those shares of Common Stock
acquired upon exercise may increase or decrease in value, even below the Option price; 
 (j)    in consideration of the
Option, no claim or entitlement to compensation or damages shall arise from termination of the Option or from any diminution in value of the Option or shares of Common Stock acquired upon exercise of the Option resulting from termination of the
Optionee’s service by the Company or any Related Company (for any reason whatsoever and whether or not in breach of local labor laws) and the Optionee irrevocably releases the Company and any Related Company from any such claim that may arise;
if, notwithstanding the foregoing, any such claim is found by a court of competent jurisdiction to have arisen, then, by signing the Option Agreement, the Optionee shall be deemed irrevocably to have waived the Optionee’s entitlement to pursue
such claim; 
 (k)    in the event of termination of the Optionee’s Service (whether or not in breach of local
labor laws), the Optionee’s right to receive an Option and vest in the Option under the Plan, if any, will terminate effective as of the date that the Optionee is no longer actively employed and will not be extended by any notice period
mandated under local law (e.g., active employment would not include a period of “garden leave” or similar period pursuant to local law); the Administrator shall have the exclusive discretion to determine when the Optionee is no
longer actively employed for purposes of the Option; 
 (l)    the Company is not providing any tax, legal or financial
advice, nor is the Company making any recommendations regarding the Optionee’s participation in the Plan or the Optionee’s acquisition or sale of the underlying shares of Common Stock; and 

(m)    the Optionee is hereby advised to consult with the Optionee’s personal tax, legal and financial advisors
regarding the Optionee’s participation in the Plan before taking any action related to the Plan.} 

 {17. Data Privacy Notice and Consent. The Optionee hereby explicitly and unambiguously
consents to the collection, use and transfer, in electronic or other form, of the Optionee’s personal data as described in this Option Agreement and any other Option grant materials by and among, as applicable, the Employer, the Company and its
Subsidiaries for the exclusive purpose of implementing, administering and managing the Optionee’s participation in the Plan. 

The Optionee understands that the Company and the Employer may hold certain personal information about the Optionee, including, but not
limited to, the Optionee’s name, home address and telephone number, date of birth, social insurance number or other identification number, salary, nationality, job title, any shares of stock or directorships held in the Company, details of all
Options or any other entitlement to shares of stock granted, exercised, canceled, vested, unvested or outstanding in the Optionee’s favor, for the exclusive purpose of implementing, administering and managing the Plan
(“Data”). 
 The Optionee understands that Data will be transferred to a third party stock plan service provider(s)
as may be selected by the Company, which is assisting the Company with the implementation, administration and management of the Plan. The Optionee understands the recipients of the Data may be located in the Optionee’s country, in the United
States or elsewhere, and that the data recipients’ country may have different data privacy laws and protections than the Optionee’s country. The Optionee understands that the Optionee may request a list with the names and addresses of any
potential recipients of the Data by contacting the Optionee’s local human resources representative. The Optionee authorizes the Company and any other possible recipients which may assist the Company (presently or in the future) with
implementing, administering and managing the Plan to receive, possess, use, retain and transfer the Data, in electronic or other form, for the sole purpose of implementing, administering and managing the Optionee’s participation in the Plan.
The Optionee understands that Data will be held only as long as is necessary to implement, administer and manage the Optionee’s participation in the Plan. The Optionee understands that the Optionee may, at any time, view Data, request
additional information about the storage and processing of Data, require any necessary amendments to Data or refuse or withdraw the consents herein, in any case without cost, by contacting in writing the Optionee’s local human resources
representative. The Optionee understands, however, that refusing or withdrawing the Optionee’s consent may affect the Optionee’s ability to participate in the Plan. For more information on the consequences of the Optionee’s refusal to
consent or withdrawal of consent, the Optionee understands that the Optionee may contact the Optionee’s local human resources representative.} 

15.    {18.} Amendment and Termination of Option. The Company may amend, modify or terminate any
outstanding Option, provided that the Recipient’s consent to such action shall be required unless it occurs pursuant to a Sale of the Company or the Committee determines that the action would not materially and adversely affect the Recipient.

 16.    Standards Letter. In consideration for this Option, the Recipient reaffirms the terms of
the Recipient’s Standards Letter agreement with Pegasystems, including but not limited to the provisions related to competition and solicitation. The Recipient further agrees that to the extent the nature of the Company’s business has
evolved since the date of the Standards Letter the covenants shall also apply to the business as evolved. 

{19.    Language. If the Optionee has received this Option Agreement or any other document related to the Plan
translated into a language other than English and if the translated version is different from the English version, the English version will control.} 

 {20.    Electronic Delivery. The Company may, in its sole
discretion, decide to deliver any documents related to the Option or future grants made under the Plan by electronic means or request that the Optionee consent to participate in the Plan by electronic means. The Optionee hereby consents to receive
such documents by electronic delivery and agrees to participate in the Plan through an on-line or electronic system established and maintained by the Company or a third party designated by the Company.} 

17.    {21.} Governing Law and Venue. The Option Agreement shall be governed by and interpreted in
accordance with the laws of The Commonwealth of Massachusetts, without regard to any applicable conflicts of law provisions thereof. 
 For
purposes of litigating any dispute that arises directly or indirectly from the relationship of the parties evidenced by this Option or this Option Agreement, the parties hereby submit to and consent to the exclusive jurisdiction of The Commonwealth
of Massachusetts and agree that such litigation shall be conducted only in the courts of Middlesex County, Massachusetts, or the federal courts for the United States for the district of Massachusetts, and no other courts, where this grant of Options
is made and/or to be performed. 
 18.    {22.} Severability. In the event any one or more of the
provisions of the Option Agreement shall for any reason be held to be invalid, illegal or unenforceable, the remaining provisions of the Option Agreement shall be unimpaired, and the invalid, illegal or unenforceable provision shall be replaced by a
mutually acceptable provision, which being valid, legal and enforceable, comes closest to the intention of the parties underlying the invalid, illegal or unenforceable provision. 

19.    {23.} Definitions. All capitalized terms used herein and not otherwise defined shall have the
meanings assigned to such terms in the Plan. 
 {24.    Exhibit B. Notwithstanding any provision herein, the
Optionee’s participation in the Plan shall be subject to any special terms and conditions as set forth in Exhibit B for the Optionee’s country of residence, if any. The Exhibit B constitutes part of this Option Agreement.} 

 {Exhibit B 

To Notice of Grant of Option and Option Agreement for Non-U.S. Employees 

This Exhibit B includes additional terms and conditions that govern the Options granted to the Optionee if the Optionee resides in the countries contained
herein. Capitalized terms used but not defined herein shall have the meanings ascribed to them in the Notice of Grant of Option and Option Agreement for Non-U.S. Employees (of which this Exhibit B is a
part) or the Plan. 
 This Exhibit B also includes information regarding exchange controls and certain other issues of which the Optionee should be
aware with respect to the Optionee’s participation in the Plan. The information is based on the securities, exchange control and other laws in effect in the respective countries as of December 2009, unless otherwise notated. Such laws are often
complex and change frequently. As a result, the Company strongly recommends that the Optionee not rely on the information noted herein as the only source of information relating to the consequences of the Optionee’s participation in the Plan
because the information may be out of date at the time the Optionee acquires shares of Common Stock or sells shares of Common Stock the Optionee acquires under the Plan. 

In addition, the information is general in nature and may not apply to the Optionee’s particular situation, and the Company is not in a position to
assure the Optionee of any particular result. Accordingly, the Optionee is strongly advised to seek appropriate professional advice as to how the relevant laws in the Optionee’s country apply to the Optionee’s specific situation.

 If the Optionee is a citizen or resident of another country, or is considered a resident of another country for local law purposes, the information
contained in this Exhibit B may not be applicable to the Optionee. 
 Australia 

Withholding 
 This provision supplements Section 8
(Withholding): 
 Prior to the relevant taxable event, the Optionee will provide the Company with their Australian Tax File Number (TFN) or Australian
Business Number (ABN). Failure to do so will result in the requirement for the Company to withhold Australian tax at the rate of 46.5%. 
 Reform to the
taxation of employee share schemes 
 With effect from 1 July 2009, Optionee share options shall be taxed upfront, unless there is a “real risk
of forfeiture”. Where there is a “real risk of forfeiture,” options shall generally be taxed at the earliest of: 
  

	 	•	 	Vesting of the option 

  

	 	•	 	Cessation of employment 

  

	 	•	 	7 years after grant 

 Canada 

Option Exercise 
 The paragraphs below replace
Section 2 (Option Exercise) of Exhibit A to the Option Agreement: 
 Once vested, the Option shall remain exercisable in whole or in part at any time
through and including the day immediately preceding the date set forth under the heading “Expiration” on the Option Agreement (the “Expiration Date”), after which the Option shall expire and no longer be exercisable. 

 The Option shall be exercisable by notice to the Company or the Company’s designated stock option
administrator, which shall: 
  

	(a)	state the election to exercise the Option and the number of shares of Common Stock with respect to which it is being exercised, 

  

	(b)	be signed by the Optionee; and 

  

	(c)	if to the Company, be in writing and delivered in person or by certified mail to the Chief Financial Officer of the Company or, if to the Company’s designated stock option administrator, be in the manner and form
specified by such stock option administrator. 

 Payment of the full purchase price of any shares of Common Stock, with respect to which the
Option is being exercised, shall accompany the notice of exercise of the Option and such payment may be made in cash or check payable to the Company. Alternatively, the Optionee may elect to pay the full purchase price of any shares of Common Stock,
with respect to which the Option is being exercised, by having the Company withhold such number of shares of Common Stock as are equal in value to the full purchase price. The certificate or certificates for shares of Common Stock as to which the
Option is exercised shall be registered in the name of the Optionee. 
 For further clarity, any shares issued of the Common Stock of the Company upon
exercise of an Option shall be issued solely in the name of the Optionee and not in the name of any other person, including a person with whom the Optionee is dealing at non-arm’s length. 

Upon exercise of the Option, the Optionee shall receive shares of the Common Stock of the Company and under no circumstances shall the Administrator elect to
have the employee receive cash (or any other security) in lieu of the Common Stock of the Company. To this effect, section 13(e) of the Plan (and any other similar section) do not apply in Canada. 

Furthermore, at all times the Optionee should hold less than 10% of the shares of the Common Stock of the Company or any Related Company. 

Withholding 
 The paragraphs below replace Section 8
of Exhibit A to the Option Agreement: 
 Generally, there are Canadian requirements to withhold source deductions on stock options benefits. Although stock
options benefits are considered to be remuneration subject to source deductions, Canada recognizes that requiring additional withholding from cash payments, such as normal salary, as a result of a stock option benefit can create hardship for the
employee. This hardship will be created when either the benefit is very large in proportion to the employee’s normal salary or the option is exercised later in the year. As a result, employers may make withholdings from employees’ cash
remuneration to the extent possible, without imposing actual hardship. Where the non-cash benefit is the only form of income received from that employer, the employer will not be required to withhold tax on
the amount of such benefits. 
 Stock option benefits are also subject to social security taxes in Canada. These benefits are subject to Canada Pension Plan
withholdings but not Employment Insurance withholdings. The province of Ontario will also levy payroll taxes to fund the Canadian health service. 
 The
employment benefit and, if applicable, related 50% deduction will be reported on the Optionee T4 for the year in which the tradable options are exercised or sold. The Optionee must report these amounts on his or her individual income tax return for
the same year. 
 If the Optionee qualifies and elects to defer a part of the employment benefit arising on exercise to the date of sale, the employer (i.e.
the Related Company) will report the deferred benefit on the T4 slip in the year of exercise, however the benefit will not be included in income for that year. The Optionee must 

 
complete and file Form T1212, “Statement of Deferred Security Option Benefits” with his or her federal tax return for each year in which arises a balance of deferred benefit
outstanding. In the year the Optionee sells the shares, the Optionee must report the deferred benefit on his or her tax return. 
 Acknowledgement of
nature of plan 
 The paragraphs below replace Section 15 of Exhibit A to the Option Agreement [new or amended paragraphs are shown in italics at g
and j]: 
 In accepting the Option, the Optionee acknowledges that: 
  

	(a)	the Plan is established voluntarily by the Company, it is discretionary in nature, and it may be modified, amended, suspended or terminated by the Company at any time, unless otherwise provided in the Plan and this
Option Agreement; 

  

	(b)	the Option is voluntary and occasional and does not create any contractual or other right to receive future grants of Options, or benefits in lieu of Options, even if Options have been granted repeatedly in the past;

  

	(c)	all decisions with respect to future Options, if any, will be at the sole discretion of the Company; 

  

	(d)	the Optionee’s participation in the Plan is voluntary; 

  

	(e)	the Option is an extraordinary item that does not constitute compensation for services of any kind rendered to the Company or any Related Company, and which is outside the scope of the employment contract, if any;

  

	(f)	the Option is not part of normal or expected compensation or salary for any purposes, including, but not limited to, calculation of any severance, resignation, termination, redundancy, end of service payments, bonuses,
long-service awards, pension or retirement or welfare benefits or similar payments and in no event should be considered as compensation for, or relating in any way to, past services for the Company or any Related Company; 

 

	(g)	the Company has decided to grant Options under the Plan to individuals who are employees of the Company or any Related Company; and under no circumstances, the Optionee should be considered a Consultant or a “non-employee Officer or non-employee Director” of the Company or any Related Company; 

 

	(h)	the future value of the underlying shares of Common Stock is unknown and cannot be predicted with any certainty; 

  

	(i)	if you exercise your Option and obtain shares of Common Stock, the value of those shares of Common Stock acquired upon exercise may increase or decrease in value, even below the Option price; 

 

	(j)	at all times the Optionee should hold less than 10% of the shares of the Common Stock of the Company or any Related Company; 

  

	(k)	in consideration of the Option, no claim or entitlement to compensation or damages shall arise from termination of the Option or from any diminution in value of the Option or shares of Common Stock acquired upon
exercise of the Option resulting from termination of the Optionee’s service by the Company or any Related Company (for any reason whatsoever and whether or not in breach of local labor laws) and the Optionee irrevocable releases the Company and
any Related Company from any such claim that may arise; if, notwithstanding the foregoing, any such claim is found by a court of competent jurisdiction to have arisen, then, by signing the Option Agreement, the Optionee shall be deemed irrevocably
to have waived the Optionee’s entitlement to pursue such claim; 

	(l)	in the event of termination of the Optionee’s Service (whether or not in breach of local labor laws), the Optionee’s right to receive an Option and vest in the Option under the Plan, if any, will terminate
effective as of the date that the Optionee is no longer actively employed and will not be extended by any notice period mandated under local law (e.g., active employment would not include a period of “garden leave” or similar period
pursuant to local law); the Administrator shall have the exclusive discretion to determine when the Optionee is no longer actively employed for purposes of the Option; 

 

	(m)	the Company is not providing any tax, legal or financial advice, nor is the Company making any recommendations regarding the Optionee’s participation in the Plan or the Optionee’s acquisition or sale of the
underlying shares of Common Stock; and 

  

	(n)	the Optionee is hereby advised to consult with the Optionee’s personal tax, legal and financial advisors regarding the Optionee’s participation in the Plan before taking any action related to the Plan.

 France 
 This information is
correct as of November 2011. 
 Exchange Control Information 

If the Optionee retains Shares outside of France or maintains a foreign bank account, the Optionee is required to report such to the French tax authorities
when filing his or her annual tax return. 
 Germany 

Exchange Control Information 
 Cross-border payments in
excess of € 12,500 must be reported monthly to the German Federal Bank. If the Optionee uses a German bank to transfer a cross-border payment in excess of € 12,500 in connection with the sale of shares of Common Stock acquired
under the Plan, the bank will make the report for the Optionee. In addition, the Optionee must report any receivables or payables or debts in foreign currency exceeding € 5,000,000 on a monthly basis. 

Hong Kong 
 Obligation to report the share
option gains to the tax authority 
 The Optionee is obliged to declare the gains realized by the exercise, assignment or release of the share options to
the Hong Kong Inland Revenue Department (“IRD”) in their Individual Tax Return for the year of assessment in which the share options are exercised, assigned or released. If the Optionee is eligible to lodge any offshore non-taxable claim on their share option gains, the Optionee is required to lodge such claim in their Individual Tax Return. Therefore, it is the Optionee’s responsibility to prove to the satisfaction of the IRD
on their non-taxable claim lodged with documentary evidence in support. 
 Reporting requirement 

Upon the commencement of Hong Kong employment/assignment of the Optionee, the Optionee’s employer (the “Employer”) is obliged to file the
Commencement Notice (Form IR 56E) for reporting the term of employment and share options details to the IRD within 3 months from the date of commencement of employment. Annual Employer’s Return (Form IR 56B) is required to be filed to the IRD
by end of April to report the remuneration paid/accrued to the Optionee, including the share option gains, for each year ended 31 March. Further to the filing of the said Forms, the IRD will normally create

 
a tax file for the Optionee and issue the annual Individual Tax Return to the Optionee (usually in May) to ascertain their tax position. If there is no Individual Tax Return issued by the IRD to
the Optionee for reporting the share option gain in the year of exercise, the Optionee is obliged to voluntarily inform the IRD on this tax chargeability arising from the exercise as well as other Hong Kong taxable employment income within four
months after the end of the basis period during which the year of assessment is concerned (i.e. the informing deadline is 31 July given the fiscal year ends on 31 March). 

Leaving Hong Kong 
 If the share option is only exercised,
assigned or released after the Optionee permanently departs from Hong Kong, the Employer should report the share option gains by filing the Departure Notice (Form IR 56G) and provide a copy for the Optionee. The Optionee also needs to
discharge their voluntary informing chargeability obligation as mentioned above not later than 4 months after the end of the year of assessment in which the share option gains are derived. Even if the Employer fails to submit the Departure Notice to
report the taxable share option gain, the Optionee still needs to comply with their own reporting obligation. 
 In order to assist with finalizing the
salary-related tax liabilities prior to permanent departure, the Optionee is allowed, as a concession, to elect to have the tax liabilities finalized on the basis of a notional exercise of the share options. The notional gain is calculated on the
basis as if the options had been exercised on a day within 7 days before the date of submission of the Optionee’s tax return for the final year of assessment in which the Optionee departs. As a further concession, the IRD is prepared to accept
an election made within 3 months from the date of departure from Hong Kong if no election has been made before departure. In this case, the date of departure will be taken as the date of notional exercise for the purpose of calculating the gain.

 An election once made cannot be withdrawn before the actual exercise, assignment or release, except: 

 

	(i)	within the objection period of the assessment in which the gain of the notional exercise is included; or 

  

	(ii)	total forfeiture of the options with no replacement or compensation before the actual exercise. 

 If it
transpires that the gain in respect of the actual exercise, assignment or release is less than the amount assessed in respect of the notional exercise, the IRD has indicated in its Departmental Interpretation and Practice Note that they will
favorably consider any application for appropriate amendment and re-assessment. 
 Withholding 

The paragraphs below supplement Section 8 (Withholding) of Exhibit A to the Option Agreement. 

The Employer is not required to withhold the Optionee’s share option gains unless the Optionee permanently departs from Hong Kong. The Employer is
statutorily required to withhold money payment from the Optionee for a period of one month after the Departure Notification (Form IR 56G) was filed to the IRD, unless consent (by the issue of a Letter of Release to the employer with a copy to the
Optionee after they have settled all their tax liabilities) is given by the IRD. Hence, if the Optionee derives share option gains and there is money paid to them by the Employer, the Employer has the withholding obligation. 

India 
 Exchange Control Information 

As per the foreign exchange laws (“regulations”) in India, there are no restrictions on the amount of remittances that the Optionee can make for
acquiring Options provided that the following conditions are fulfilled: 
  

	1.	The Company issuing the shares effectively, directly or indirectly, holds in the Indian company, whose employees / directors are being offered shares, not less than 51% of its equity, and 

	2.	The shares under the Plan are offered by the issuing company globally on a uniform basis (with the same terms and with the same rights). 

Ireland 
 Restriction on Types of Shares Issued
to Directors 
 If the Optionee is a director or shadow director of an Irish Subsidiary, the Optionee’s Options will be paid in newly issued shares
of Common Stock only. In no event will the Options be settled in treasury shares. 
 Director Notification Requirement 

If the Optionee is a director, shadow director or secretary of an Irish Subsidiary, the Optionee must notify the Irish Subsidiary in writing within five
business days of receiving or disposing of an interest in the Company (e.g., Options, shares of Common Stock, etc.), or within five business days of becoming aware of the event giving rise to the notification requirement, or within five
business days of becoming a director or secretary if such an interest exists at the time. This notification requirement also applies with respect to the interests of a spouse or minor children (whose interests will be attributed to the director,
shadow director or secretary). 
 Italy 
 This
information is correct as of August 2011. 
 Purpose 

The Plan is discretionary in nature and is offered only to individual employees and/or specific categories of employees. 

Nature of Plan 
 This provision supplements
Section 11 (Acknowledgement of Nature of Plan and Option) of Exhibit A to the Option Agreement: 
 The Optionee understands that the Company has
unilaterally, gratuitously and discretionally decided to grant Options under the Plan to individuals who may be employees of the Company or its Subsidiaries throughout the world. The decision is a limited decision that is entered into upon the
express assumption and condition that any grant will not bind the Company or any Related Company. Consequently, the Optionee understands that the Option is granted on the assumption and condition that the Option and any shares of Common Stock
acquired upon exercise of the Option are not a part of any employment contract (either with the Company or any Related Company) and shall not be considered a mandatory benefit, salary for any purposes (including severance compensation) or any other
right whatsoever. Further, the Optionee understands that the Optionee will not be entitled to continue vesting in any Option once the Optionee’s Service with the Company or any Related Company ceases. In addition, the Option understands that
this grant would not be made to the Optionee but for the assumptions and conditions referred to above; thus, the Optionee acknowledges and freely accepts that should any or all of the assumptions be mistaken or should any of the conditions not be
met for any reason, then any grant of or right to the Option shall be null and void. 
 It is a condition of participation in the Plan that the Optionee
expressly agrees to the terms of the Plan, including the provisions in this Exhibit B. 

 Options Payable Only in Shares of Common Stock 

Notwithstanding any discretion in the Plan or anything contrary in the Option Agreement, if the Optionee is resident in Italy, the grant of Options does not
provide any right for the Optionee to receive a cash payment and the Options are payable in shares of Common Stock only. 
 Securities Reporting 

Individuals in Italy are required to report assets held abroad on their annual tax returns (Form RW) if the value of such assets exceeds 10,000 Euros at the
end of the calendar year. The Italian tax authorities have taken the position that vested Stock Options in a foreign company are considered ‘assets held abroad’. 

Employees must therefore also report vested Stock Options in their annual tax returns (Form Unico, Schedule RW) if the threshold is exceeded. 

In addition, employees must report in Section III of Form RW the transfer of money exceeding 10,000 Euros: 

 

	 	•	 	From Italy to another jurisdiction; 

  

	 	•	 	From another jurisdiction to Italy; 

  

	 	•	 	Between non-Italian jurisdictions, if the transfer relates to investments held overseas. 

This also applies to transfers to countries that have adopted the Euro. 

Japan 
 This information is correct as of August
2009. 
 Exchange Control Information 
 Although there
are no restrictions on the transfer of funds outside Japan, certain reporting obligations to the tax authorities or the Ministry of Finance may be required. 

Optionees must notify the Ministry of Finance of share purchases in excess of 30,000,000 Yen. An additional notification is required for purchase of shares
with a value in excess of 100,000,000 Yen. 
 Japanese banks including Japanese branches of foreign banks have to report transfers of funds of more than
1,000,000 Yen in and out of Japan to the government automatically. Sometimes the tax authorities check individual tax returns to these records. 

Netherlands 
 By participating in the Plan the
Optionee acknowledges that the Optionee’s Options can cease to vest on termination of employment under the terms of the Plan. It is a condition of participation in the Plan that the Optionee agrees to these terms. 

Poland 
 Securities reporting 

If the Optionee holds more than €10,000 of foreign securities (including following the grant of Options) the Optionee must declare details of the shares
and options (whether or not the options have vested) to the National Bank of Poland. The form of declaration must be submitted within 30 days of the end of the year. 

 Russia 

This information is correct as of August 2011. 
 Options
Payable Only in Shares of Common Stock 
 Notwithstanding any discretion in the Plan or anything contrary in the Option Agreement, if the Optionee is
resident in Russia, the grant of Options does not provide any right for the Optionee to receive a cash payment and the Options are payable in shares of Common Stock only. 

Exchange Control Information 
 The Optionee has a
reporting obligation to inform the Russian tax authorities of any bank accounts opened outside of Russia (This applies to Russian national employees only). 

Singapore 
 Leaving Singapore 

With effect from January 1, 2003, Optionees who are foreign citizens or are Singapore Permanent residents leaving Singapore permanently are taxed on a
“deemed exercise” basis for any options or units or shares granted or issued during Singapore employment. This would also include any unvested or restricted options or units or shares granted whilst exercising employment in Singapore. 

As per the deemed exercise rule, all Options, units, or stock which have been granted during Singapore employment are deemed to have been exercised,
irrespective whether the Options have vested or not. The taxable value is the difference between the fair market value (which would be the fair market value one month prior to the date of departure) and the exercise price. 

Director withholding 
 Independent Directors who are Non
Resident in Singapore and have received Options by virtue of their being on the Board of the Singapore Company will be subject to tax in Singapore and liable for tax withholding. 

Spain 
 This provision supplements Section 15
(Acknowledgment of Nature of Plan and Option) of Exhibit A to the Option Agreement: 
 In accepting the Options, the Optionee consents to participation in
the Plan and acknowledges that the Optionee has received a copy of the Plan. 
 The Optionee understands that the Company has unilaterally, gratuitously and
discretionally decided to grant Options under the Plan to individuals who may be employees of the Company or its Subsidiaries throughout the world. The decision is a limited decision that is entered into upon the express assumption and condition
that any grant will not bind the Company or any Related Company. Consequently, the Optionee understands that the Options are granted on the assumption and condition that the Options and any shares of Common Stock acquired upon exercise of the
Options are not a part of any employment contract (either with the Company or any Related Company) and shall not be considered a mandatory benefit, salary for any purposes (including severance compensation) or any other right whatsoever. Further,
the Optionee understands that the Optionee will not be entitled to continue vesting in any Options 

 
once the Optionee’s Service with the Company or any Related Company ceases. In addition, the Optionee understands that this grant would not be made to the Optionee but for the assumptions
and conditions referred to above; thus, the Optionee acknowledges and freely accepts that should any or all of the assumptions be mistaken or should any of the conditions not be met for any reason, then any grant of or right to the Options shall be
null and void. 
 Exchange Control Information 
 The
Optionee must declare the acquisition of shares of Common Stock to the Dirección General de Política Comercial e Inversiones Exteriores (the DGPCIE) of the Ministerio de Economía for statistical purposes. 

As the shares are listed on a stock exchange the acquisition will be filled in a form D-5B. The form will be declared
to the Registro de Inversiones of the Dirección General de Política Comercial e Inversiones Exteriores of the Ministerio de Industria, Turismo y Comercio. 

The Optionee must also declare ownership of any shares of Common Stock with the Directorate of Foreign Transactions each January whilst the shares of Common
Stock are owned in the following cases: 
  

	•	 	The shares of the company are listed on the stock exchange. 

  

	•	 	The shareholding in the company has to be at least 10% or more. 

  

	•	 	The investment is more than 1,502,530.26 Euros. 

 Foreign currency payments (i.e., dividends or sale proceeds)
have to be declared when the amount exceed 6,010.12 Euros on form B3. 
 The information provided to the financial institution is the following: 

 

	•	 	The Optionee’s name, address, and fiscal identification number 

  

	•	 	Non resident’s name, address and fiscal identification number. 

  

	•	 	The amount of the payment, payment method, currency of origin and value in euros. 

  

	•	 	The reasons for the payment. 

 A payment is made by bank transfer the following information should be provided
to the financial institution when the amount exceeds 50,000 euros: 
  

	•	 	Resident name, address and fiscal identification number. 

  

	•	 	Non resident name, address and fiscal identification number. 

  

	•	 	The amount, currency of origin and value of payment in euros. 

  

	•	 	The reason for the payment. 

 Sweden 

No country specific terms and conditions apply. 
 United
Kingdom 
 Withholding 
 The paragraphs below
replace Section 8 (Withholding) of Exhibit A to the Option Agreement: 
 Regardless of any action the Company or the Optionee’s employer (the
“Employer”) takes with respect to any or all income tax, primary and secondary Class 1 National Insurance contributions, payroll tax or other tax-related withholding attributable to or payable
in connection with or pursuant to the grant, vesting, exercise, release or assignment of any Option (“Tax-Related Items”), the Optionee acknowledges that the ultimate liability for all Tax-Related Items legally due by the Optionee is and remains the Optionee’s responsibility. Furthermore, the Company and/or the Employer (i) make no representations or

 
undertakings regarding the treatment of any Tax-Related Items in connection with any aspect of the Option, including the grant, vesting or exercise of the
Options, the subsequent sale of any shares of Common Stock acquired at exercise and the receipt of any dividends; and (ii) do not commit to structure the terms of the grant or any aspect of the Option to reduce or eliminate the Optionee’s
liability for Tax-Related Items. 
 As a condition of any Options becoming exercisable and the issuance of shares of
Common Stock upon exercise of the Options, the Company and/or the Employer shall be entitled to withhold and the Optionee agrees to pay, or make adequate arrangements satisfactory to the Company and/or the Employer to satisfy, all obligations of the
Company and/or the Employer to account to HM Revenue & Customs (“HMRC”) for any Tax-Related Items by the Due Date, which is 90 days, or such other period as required under U.K. law, after
the event giving rise to the Tax-Related Items (the “Chargeable Event”). In this regard, except as provided in the next sentence, such payment shall be made by means of the Company withholding and/or
reacquiring a number of shares of Common Stock issued upon exercise of the Options having a Fair Market Value equal to the amount of Tax-Related Items that the Company determines it or the Employer is required
to account to HMRC under applicable tax laws with respect to the Options (with such obligation determined based on any applicable minimum statutory withholding rates). In the event that the Company cannot (under applicable legal, regulatory, listing
or other requirements, or otherwise) satisfy such obligation in such method, the Company may satisfy its entitlement to withhold under this Option Agreement by either or a combination of the following methods: (i) by requiring the Optionee to
pay such amount in cash or check; and/or (ii) by deducting such amount out of any other compensation otherwise payable to the Optionee. For these purposes, the Fair Market Value of the shares of Common Stock to be withheld or repurchased, as
applicable, shall be determined on the date that Tax-Related Items are to be determined. 
 The Optionee shall pay
to the Company or the Employer any amount of Tax-Related Items that the Company or the Employer may be required to account to HMRC with respect to the Chargeable Event that cannot be satisfied by the means
previously described. If payment or withholding is not made by the Due Date, the Optionee agrees that the amount of any uncollected Tax-Related Items shall (assuming the Optionee is not a director or executive
officer of the Company (within the meaning of Section 13(k) of the U.S. Securities and Exchange Act of 1934, as amended)), constitute a loan owed by the Optionee to the Employer, effective on the Due Date. The Optionee agrees that the loan will bear
interest at the then-current HMRC Official Rate and it will be immediately due and repayable, and the Company and/or the Employer may recover it at any time thereafter by any of the means referred to above. If any of the foregoing methods of
collection are not allowed under Applicable Laws or if the Optionee fails to comply with the Optionee’s obligations in connection with the Tax-Related Items as described in this section, the Company may
refuse to deliver the shares of Common Stock acquired under the Plan. 
 Joint Election 

As a condition to exercising the Options, the Optionee agrees to accept any liability for secondary Class 1 National Insurance contributions (the
“Employer’s Liability”) which may be payable by the Company and/or the Employer in connection with the Options and any event giving rise to Tax-Related Items. To accomplish the foregoing, the
Optionee agrees to execute a joint election with the Company (the “Election”), the form of such Election being formally approved by HMRC, and any other consent or elections required to accomplish the transfer of the Employer’s
Liability to the Optionee. The Optionee further agrees to execute such other joint elections as may be required between the Optionee and any successor to the Company and/or the Employer. If the Optionee does not enter into the Election when the
Optionee accepts the Option Agreement or when otherwise requested by the Company and/or Employer, or if the Election is revoked at any time by HMRC, the Optionee will not be entitled to exercise the Option unless the Optionee agree to pay an amount
equal to the Employer’s Liability to the Company, the Employer and/or any Related Company. The Optionee further agrees that the Company and/or the Employer may collect the Employer’s Liability by any of the means set forth in the
Withholding section of the Option Agreement.}

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