Document:

Exhibit

EXHIBIT 10.1

COMMON STOCK REPURCHASE AND OPTION EXCHANGE AGREEMENT
THIS COMMON STOCK REPURCHASE AND OPTION EXCHANGE AGREEMENT (the “Agreement”) is entered into as of May 17, 2020 by and between A10 Networks, Inc., a Delaware corporation (the “Company”), and Lee Chen (the “Stockholder”).
RECITALS

WHEREAS, the Stockholder is the holder of 9,873,424 shares of the Company’s common stock (the “Common Stock”); 
WHEREAS, the Stockholder desires to sell, and the Company desires to repurchase, 2,200,000 shares of Common Stock (the “Shares”) on the terms and subject to the conditions set forth in this Agreement (the “Repurchase”);
WHEREAS, the Stockholder is the holder of an option to purchase 282,500 shares of Common Stock at $5.52 per share granted on February 12, 2016 pursuant to the terms and conditions of a stock option agreement and the Company’s 2014 Equity Incentive Plan (the “Stock Option”); and
WHEREAS, the parties desire to cancel the Stock Option in exchange for a cash payment on the terms and subject to the conditions set forth in this Agreement (the “Option Exchange”).
NOW, THEREFORE, in consideration of the promises, covenants and agreements herein contained, the parties agree as follows:
AGREEMENT

		
	SECTION 1.
	REPURCHASE OF SHARES AND EXCHANGE OF OPTION FOR CASH.

1.1    Repurchase. At the Closing (as defined below), the Company hereby agrees to repurchase from the Stockholder, and the Stockholder hereby agrees to sell, assign and transfer to the Company, all of the Stockholder’s right, title and interest in and to the Shares at the per Share price of $6.00, for an aggregate repurchase price of $13,200,000.00 (the “Repurchase Amount”). Promptly following the execution of this Agreement, the Stockholder shall complete and execute a Transfer Request Form, bearing an appropriate medallion signature guarantee, in the form attached hereto as Exhibit A (the “Transfer Request Form”), and at the Closing shall deliver the Transfer Request Form. The Repurchase Amount shall be paid by wire transfer of immediately available funds to an account or accounts to be designated by the Stockholder.

1.2    Option Cancellation. At the Closing, the Company hereby agrees to cancel the Stock Option, and the Stockholder hereby agrees to surrender the Stock Option for cancellation, in exchange for the payment of $135,600 (the “Option Exchange Amount”), subject to applicable tax withholding. The Option Exchange Amount, net of applicable tax withholding, shall be paid by cash, check or wire transfer of immediately available funds to an account or accounts to be designated by the Stockholder.
   
1.3    Closing. The closing of the Repurchase and the Option Exchange (the “Closing”) shall take place at the offices of the Company, 2300 Orchard Parkway, San Jose, California on the date hereof, or at such other time and place as the parties hereto shall mutually agree.  The obligations of the Company to repurchase the Shares in the Repurchase and pay the Option Exchange Amount shall be subject to the accuracy of the representations and warranties on the part of the Stockholder contained herein as of the date hereof and as of the date of the Closing and to the performance by the Stockholder of his obligations hereunder.  The obligations of the Stockholder to sell the Shares in the Repurchase and surrender the Stock Option for cancellation shall be subject to the accuracy of the representations and warranties on the part of the Company contained herein as of the date hereof and as of the date of the Closing and to the performance by the Company of its obligations hereunder.
   
1.4    Termination of Rights as the Stockholder. Upon payment of the Repurchase Amount and completion of the Repurchase in accordance with the terms of this Agreement, the Shares shall cease to be outstanding for any and all purposes, and the Stockholder shall no longer have any rights as a holder of the Shares, including any rights that the Stockholder may have had under the Company’s Certificate of Incorporation or otherwise as a holder of the Shares.

1.5    Termination of Rights as Optionee. Upon the payment of the Option Exchange Amount and completion of the Option Exchange in accordance with the terms of this Agreement, the Stock Option shall cease to be outstanding for any and all purposes, neither the Stockholder nor any other person shall have any rights as a holder of the Stock Option.

		
	SECTION 2.
	STOCKHOLDER REPRESENTATIONS AND WARRANTIES.

In connection with the transactions provided for hereby, the Stockholder represents and warrants to the Company as follows:
2.1    Ownership of Shares. The Stockholder has good and marketable right, title and interest (legal and beneficial) in and to all of the Shares, free and clear of all liens, pledges, security interests, charges, claims, equity or encumbrances of any kind. Upon paying for the Shares in accordance with this Agreement, the Company will acquire good and marketable title to the Shares, free and clear of all liens, pledges, security interests, charges, claims, equity or encumbrances of any kind.   No person other than the Stockholder has any legal or beneficial interest in the Stock Option. As of the date hereof, and after giving effect to the transactions contemplated by this Agreement, the Stockholder holds an aggregate of 7,673,424 shares of the Company’s Common Stock, and all such shares are held in the Stockholder’s brokerage accounts identified in writing by the Stockholder to the Company, and the Stockholder has no other right, title or interest (including beneficial interest) in or rights to acquire Common Stock of the Company.

2.2    Authorization. The Stockholder has all necessary right, capacity, power and authority to execute, deliver and perform the Stockholder’s obligations under this Agreement and all agreements, instruments and documents contemplated hereby and to sell and deliver the Shares being sold hereunder and to surrender the Stock Option for the Option Exchange, and this Agreement constitutes a valid and binding obligation of the Stockholder.

2.3    No Conflict. The execution and delivery of this Agreement and the consummation of the transactions contemplated hereby will not result in a breach by the Stockholder of, or constitute a default by the Stockholder under, any agreement, instrument, decree, judgment or order to which the Stockholder is a party or by which the Stockholder may be bound.

2.4    Experience and Evaluation. By reason of the Stockholder’s business or financial experience or the business or financial experience of the Stockholder’s professional advisers who are unaffiliated with the Company and who are not compensated by the Company, the Stockholder has the capacity to protect the Stockholder’s own interests in connection with the sale of the Shares to the Company and the Option Exchange. The Stockholder is capable of evaluating the potential risks and benefits of the sale hereunder of the Shares and Option Exchange.  Stockholder is sophisticated and capable of understanding and appreciating, and does understand and appreciate, that future events may occur that result in an increased value of the Shares owned by the Stockholder and subject to the Stock Option, and that the Stockholder would be deprived of the opportunity to participate in any gain that might have resulted if the Stockholder had not transferred the Shares owned by the Stockholder to the Company or surrendered the Stock Option for the Option Exchange hereunder.

2.5    Access to Information. The Stockholder represents that the Stockholder has access to and has carefully reviewed the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2019, all subsequent public filings of the Company with the Securities and Exchange Commission, other publicly available information regarding the Company, and such other information that it and its advisers deem necessary to make its decision to sell the Shares to the Company and surrender the Stock Option for the Option Exchange.  The Stockholder further represents that the Stockholder has had an opportunity to ask questions and receive answers from the Company regarding the business, properties, prospects and financial condition of the Company and to seek from the Company such additional information as the Stockholder has deemed necessary.

2.6    Tax Matters. The Stockholder has had an opportunity to review with the Stockholder’s tax advisers the federal, state, local and foreign tax consequences of the Repurchase and Option Exchange and the transactions contemplated by this Agreement. The Stockholder is relying solely on such advisers and not on any statements or representations of the Company or any of its agents. The Stockholder understands that the Stockholder (and not the Company) shall be responsible for the Stockholder’s tax liability and any related interest and penalties that may arise as a result of the transactions contemplated by this Agreement.

2.7    Finders.  The Stockholder has not engaged any investment banker, broker, or finder in connection with the transactions contemplated hereunder, and no broker’s or similar fee is payable by the Stockholder or any of its affiliates in connection with the transfer of the Shares owned by the Stockholder or the surrender of the Stock Option for the Option Exchange hereunder.

2.8    Stabilization Activity. The Stockholder has not taken, directly or indirectly, any action designed to, or that would constitute or might reasonably be expected to cause or result in, under the Securities Exchange Act of 1934, as amended (and the rules and regulations promulgated thereunder) (the “Exchange Act”) or otherwise, stabilization or manipulation of the 

price of any security of the Company in connection with the transfer of the Shares owned by the Stockholder or the surrender of the Stock Option for the Option Exchange hereunder.

2.9    Certain Information. The Stockholder acknowledges and understands that (i) the Company possesses material nonpublic information not known to the Stockholder that may impact the value of the Common Stock (the “Information”), and that the Company is not disclosing the Information to the Stockholder. The Stockholder understands, based on its experience, the disadvantage to which the Stockholder is subject due to the disparity of information between the Stockholder and the Company. Notwithstanding such disparity, the Stockholder has deemed it appropriate to enter into this Agreement and to consummate the repurchase of the Shares and the Option Exchange. The Stockholder agrees that none of the Company, its affiliates, stockholders, directors, employees and agents shall have liability to the Stockholder or its agents, grantors or beneficiaries, whatsoever due to or in connection with the Company’s use or non-disclosure of the Information or otherwise as a result of the repurchase of the Shares or Option Exchange, and the Stockholder hereby irrevocably waives any claim that it might have based on the failure of the Company to disclose the Information.

SECTION 3.COMPANY REPRESENTATIONS AND WARRANTIES; COMPANY COVENANTS.

In connection with the transactions provided for hereby, the Company represents and warrants to the Stockholder as follows:
3.1    Organization. The Company is a corporation duly incorporated, validly existing and in good standing under the laws of the State of Delaware.
 
3.2    Authorization. The Company has all necessary power and authority to execute, deliver and perform the Company’s obligations under this Agreement and all agreements, instruments and documents contemplated hereby and to purchase the Shares being sold hereunder, and this Agreement constitutes a valid and binding obligation of the Company.

3.3    No Conflict. The execution and delivery of this Agreement and the consummation of the transactions contemplated hereby (i) will not result in a breach by the Company of, or constitute a default by the Company under, any agreement, instrument, decree, judgment or order to which the Company is a party or by which the Company may be bound, and (ii) will not result in a breach or violation of any law, rule or regulation applicable to the Company, including the Securities Act of 1933, as amended (and the rules and regulations promulgated thereunder) (the “Securities Act”), the Exchange Act, and the rules and regulations of the New York Stock Exchange.
 
3.4    No Consents.  No consent, approval, authorization, filing, order, registration or qualification of or with any court or governmental or regulatory agency or body is required in connection with the transactions contemplated hereby, other than as may be required under the Exchange Act.

3.5    Brokers.  No broker or finder has acted for the Company in connection with this Agreement or the transactions contemplated hereby, and no broker or finder is entitled to any brokerage or finder’s fee or other commissions in respect of such transactions.

3.6    Sufficient Funds.  At the Closing, the Company will have sufficient funds available to deliver the Repurchase Amount and Option Exchange Amount in full and to consummate the transactions contemplated hereby.

3.7    Affiliate Status.  Based on the Stockholder’s representations in Section 2.1, on the Closing Date and after giving effect to the transactions contemplated by this Agreement, the Stockholder will not be deemed an “affiliate” under Rule 405 of the Securities Act.  Following (i) Stockholder’s delivery of the information required under Section 4.3 (confirming Stockholder’s compliance with the lock-up provisions of Section 4.1) and (ii) the date that Stockholder delivers an executed representation letter in the form attached as Exhibit B to the Company, the Company shall promptly cause the removal of any restrictive legend on each certificate, instrument or book entry representing the Stockholder’s remaining shares of Common Stock.  Thereafter, the Company will not require a legal opinion or “no action” letter in any transaction in compliance with Rule 144 under the Securities Act (“Rule 144”).  Further, the Company covenants to use commercially reasonable efforts to comply with the current public information requirements under Rule 144(c) under the Securities Act.
  
SECTION 4.LOCK-UP.
 
4.1    For a period commencing on the date of this Agreement until the date that is 90 days follow the date of this Agreement, the Stockholder shall not, directly or indirectly, without the Company’s prior written consent: (i) offer, pledge, sell, contract to sell, grant or enter into any option or contract to sell or otherwise dispose of, directly or indirectly, any shares of 

Common Stock of the Company beneficially owned by Stockholder, or any securities convertible into, exercisable for or exchangeable for shares of Common Stock of the Company beneficially owned by Stockholder, including any transfers of shares of Common Stock beneficially owned by Stockholder (a) as a bona fide gift or gifts, (b) by will, other testamentary document or intestate succession to the legal representative, heir, beneficiary or a member of the immediate family of Stockholder or (c) by operation of law, such as pursuant to a qualified domestic order or as required by a divorce settlement; or (ii) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of the Common Stock beneficially owned by Stockholder; whether any such transaction described in clause (i) or (ii) above is to be settled by delivery of Common Stock or such other securities, in cash or otherwise.
 
4.2    The Stockholder agrees that the Company may, and that the Stockholder will, (i) with respect to any shares of Common Stock or other Company securities for which the Stockholder is the record holder at the time of this Agreement or at any time during the term of this Agreement, cause the transfer agent for the Company to note stop transfer instructions with respect to such securities on the transfer books and records of the Company and (ii) with respect to any shares of Common Stock or other Company securities for which the Stockholder is the beneficial holder but not the record holder at the time of this Agreement or at any time during the term of this Agreement, cause the record holder of such securities to cause the transfer agent for the Company to note stop transfer instructions with respect to such securities on the transfer books and records of the Company.
 
4.3    Stockholder agrees to deliver to the Company on each of (i) the day that is 30 days following the date of this Agreement, (ii) the day that is 60 days following the date of this Agreement and (iii) the day that is 90 days following the date of this Agreement (or the next business day if such day in any of (i), (ii) or (iii) falls on a weekend) a true and correct statement setting forth all shares of Common Stock of the Company beneficially owned by Stockholder, or any securities convertible into, exercisable for or exchangeable for shares of Common Stock of the Company beneficially owned by Stockholder as of a date within 5 business days of such delivery date, in a form reasonably acceptable to the Company.
 
SECTION 5.VOTING.
 
For a period commencing on the date of this Agreement until the date that is 180 days follow the date of this Agreement, at each annual or special meeting of Company’s stockholders or action by written consent, the Stockholder will (i) cause all Voting Securities that are beneficially owned by him to be present for quorum purposes, if applicable and (ii) vote, or cause to be voted, all Voting Securities beneficially owned by him in a manner consistent with the recommendation of the Company’s Board of Directors.  Notwithstanding the prior sentence, the Stockholder will have the right to vote in his sole discretion with respect to any proposal to approve any contract or transaction between the Company and one or more of its directors, or between the Company and any other corporation, partnership, association, or other organization in which one or more of the Company’s directors, are directors or officers, or have a financial interest, and on any matter related to the election or removal of directors. “Voting Securities” means shares of the Company’s Common Stock and any other securities of the Company entitled to vote in the election of directors.
SECTION 6.ADJUSTMENTS.
 
Whenever a particular number is specified herein, including, without limitation, the number of shares or price per share, such number shall be adjusted to reflect any stock dividends, stock splits, reverse stock splits, combinations or other reclassifications of stock or any similar transactions and appropriate adjustments shall be made with respect to the relevant provisions of this Agreement so as to fairly and equitably preserve, as far as practicable, the original rights and obligations of the Company and the Stockholder under this Agreement.  
SECTION 7.SUCCESSORS AND ASSIGNS.

Except as otherwise provided herein, the terms and conditions of this Agreement shall inure to the benefit of and be binding upon the respective successors and assigns of the parties (including transferees of any Shares). Nothing in this Agreement, express or implied, is intended to confer upon any party other than the parties hereto or their respective successors and assigns any rights, remedies, obligations, or liabilities under or by reason of this Agreement, except as expressly provided in this Agreement.
SECTION 8.GOVERNING LAW.

This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware, except the choice-of-law provisions thereof.
SECTION 9.WAIVER OF JURY TRIAL.

EACH OF THE PARTIES TO THIS AGREEMENT, AFTER CONSULTING OR HAVING HAD THE OPPORTUNITY TO CONSULT WITH COUNSEL, KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHT THAT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN ANY LITIGATION BASED UPON OR ARISING OUT OF THIS AGREEMENT OR ANY RELATED INSTRUMENT OR AGREEMENT, OR ANY OF THE TRANSACTIONS CONTEMPLATED THEREBY, OR ANY COURSE OF CONDUCT, DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN), OR ACTIONS OF ANY OF THEM. No party to this Agreement will seek to consolidate, by counterclaim or otherwise, any action in which a jury trial has been waived with any other action in which a jury trial cannot be or has not been waived.
SECTION 10.SPECIFIC PERFORMANCE.
 
Each party to this Agreement acknowledges and agrees that money damages would not be a sufficient remedy for any breach (or threatened breach) of this Agreement by it and that, in the event of any breach or threatened breach of this Agreement, (a) the party seeking specific performance will be entitled to injunctive and other equitable relief, without proof of actual damages; (b) the party against whom specific performance is sought will not plead in defense that there would be an adequate remedy at law; and (c) the party against whom specific performance is sought agrees to waive any applicable right or requirement that a bond be posted. Such remedies will not be the exclusive remedies for a breach of this Agreement, but will be in addition to all other remedies available at law or in equity.
SECTION 11.ENTIRE AGREEMENT.

This Agreement contains the entire understanding of the parties, and there are no further or other agreements or understandings, written or oral, in effect between the parties relating to the subject matter hereof, except as expressly referred to herein.
SECTION 12.AMENDMENTS AND WAIVERS.

Any term of this Agreement may be amended, and the observance of any term of this Agreement may be waived (either generally or in a particular instance and either retroactively or prospectively), only with the written consent of the Stockholder and the Company.
SECTION 13.FURTHER ACTION.

Each party hereto agrees to execute any additional documents and to take any further action as may be necessary or desirable in order to implement the transactions contemplated by this Agreement.
SECTION 14.SURVIVAL.

The representations and warranties herein shall survive the Closing.
SECTION 15.SEVERABILITY.

Whenever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement shall be held to be prohibited by or invalid under applicable law, such provision shall be ineffective only to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions of this Agreement.
SECTION 16.NOTICES.

All notices and other communications given or made pursuant hereto shall be in writing and shall be deemed effectively given (a) upon personal delivery to the party to be notified, (b) when sent by confirmed facsimile or electronic mail, if sent during normal business hours of the recipient or, if not, then on the next business day, (c) five days after having been sent by registered or certified mail, return receipt requested, postage prepaid, or (d) one day after deposit with a nationally recognized overnight courier, specifying next-day delivery, with written verification of receipt. All communications shall be sent to the respective parties at the addresses set forth on the signature pages attached hereto (or at such other addresses as shall be specified by notice given in accordance with this SECTION 16).
SECTION 17.REPRESENTATION BY COUNSEL.
 
Each of the parties to this Agreement acknowledges that it has been represented by counsel of its choice throughout all negotiations that have preceded the execution of this Agreement, and that it has executed this Agreement with the advice of such counsel. Each 

party to this Agreement and its counsel cooperated and participated in the drafting and preparation of this Agreement, and any and all drafts of this Agreement exchanged among the parties to this Agreement will be deemed the work product of all of the parties to this Agreement and may not be construed against any party by reason of its drafting or preparation. Accordingly, any rule of law or any legal decision that would require interpretation of any ambiguities in this Agreement against any party that drafted or prepared it is of no application and is expressly waived by each of the parties to this Agreement, and any controversy over interpretations of this Agreement will be decided without regard to events of drafting or preparation.
SECTION 18.COUNTERPARTS.

This Agreement and any amendments to this Agreement may be executed in one or more textually-identical counterparts, all of which will be considered one and the same agreement and will become effective when one or more counterparts have been signed by each of the parties to this Agreement and delivered to the other parties to this Agreement, it being understood that all parties to this Agreement need not sign the same counterpart. Any such counterpart, to the extent delivered by fax or .pdf, .tif, .gif, .jpg or similar attachment to electronic mail (any such delivery, an “Electronic Delivery”), will be treated in all manner and respects as an original executed counterpart and will be considered to have the same binding legal effect as if it were the original signed version thereof delivered in person. No party to this Agreement may raise the use of an Electronic Delivery to deliver a signature, or the fact that any signature or agreement or instrument was transmitted or communicated through the use of an Electronic Delivery, as a defense to the formation of a contract, and each party to this Agreement forever waives any such defense, except to the extent such defense relates to lack of authenticity.
IN WITNESS WHEREOF, each of the parties has executed this Agreement as of the day and year first above written.

	
			
	 
	 
	 

	COMPANY:

	 

	A10 Networks, Inc.

	 
	 

	By:
	/s/ Robert Cochran
	 

	Name:
	Robert Cochran
	 

	Title:
	EVP, Legal and Corporate Collaboration
	 

	
			
	 
	 
	 

	STOCKHOLDER:

	 
	 

	By:
	/s/ Lee Chen
	 

	Name:
	Lee Chen
	 

	 
	 
	 

EXHIBIT A
Transfer Request Form

EXHIBIT B
A10 Networks, Inc. 
2300 Orchard Parkway
San Jose, California 95131

Re: Removal of Restrictive Legend from_____________________________ shares of Common Stock (the “Shares”) of A10 Networks, Inc. (the “Issuer”) Pursuant to SEC Rule 144(“Rule 144”) 

Dear Ladies and Gentlemen: 

I would like to have the restrictive legend on my ________________________ shares of Common Stock of the Issuer removed and am submitting this letter to present all facts necessary under Rule 144 of the Securities Act of 1933 to authorize such removal. In this connection, I represent to you and warrant as follows: 

		
	1.
	 I am not an underwriter with respect to the Shares, nor will any future sale of the Shares be part of a distribution of securities of the Issuer. 

		
	2.
	 I am not currently an affiliate of the Issuer, as defined within the meaning of Rule 144 (a), and have not been an affiliate of the Issuer for a period of three months prior to the date hereof. 

		
	3. 
	The Shares are fully paid and a minimum of one year has elapsed since the date that the Shares were acquired from the Issuer or an affiliate thereof as described in Rule 144. 

		
	4. 
	I am not aware of any material information with regard to the Issuer which has not been made public, and will notify the Issuer immediately of any development or occurrence which to the knowledge of the undersigned would render any of the foregoing inaccurate.

I am familiar with the aforesaid Rule 144 and agree that, in connection with the matters described above, you and your counsel, Pillsbury Winthrop Shaw Pittman LLP are relying on the statements made herein. Pillsbury Winthrop Shaw Pittman LLP may rely on such statements as if this letter were addressed to them. 

Very truly yours,exhibit1012020

                                                                                                                                                                                                                                                                                                                                                                                                                                                       SERVICESOURCE INTERNATIONAL, INC.                            ____________________________________________________                                                                2020 EQUITY INCENTIVE PLAN                            ____________________________________________________                                                          4681029.3 

 

                             TABLE OF CONTENTS                                                                      Page   1.  ESTABLISHMENT AND PURPOSE OF PLAN .............................................................. 1  2.  DEFINITIONS ................................................................................................................. 1      2.1  Defined Terms ........................................................................................................ 1      2.2  Construction ........................................................................................................... 5  3.  PLAN ADMINISTRATION ............................................................................................. 5      3.1  Plan Administrator.................................................................................................. 5      3.2  Powers of the Administrator .................................................................................... 6      3.3  Binding Determinations .......................................................................................... 8      3.4  Reliance on Experts ................................................................................................ 8      3.5  Delegation of Non-Discretionary Functions ............................................................. 8  4.  SHARES OF COMMON STOCK SUBJECT TO THE PLAN; SHARE LIMIT ................. 8      4.1  Shares of Common Stock Subject to the Plan; Share Limit ....................................... 8      4.2  Counting of Shares ................................................................................................. 9      4.3  Reservation of Shares; No Fractional Shares ............................................................ 9  5.  PARTICIPATION ............................................................................................................ 9  6.  AWARDS ........................................................................................................................ 9      6.1  Type and Form of Awards....................................................................................... 9           6.1.1 Stock Options.............................................................................................. 9           6.1.2 Stock Appreciation Rights ......................................................................... 11           6.1.3 Restricted Stock ........................................................................................ 11           6.1.4 Restricted Stock Units ............................................................................... 12           6.1.5 Performance Stock Units ........................................................................... 13           6.1.6 Cash Awards ............................................................................................. 14           6.1.7 Other Awards............................................................................................ 14      6.2  Award Agreements ............................................................................................... 14      6.3  Deferrals and Settlements...................................................................................... 14      6.4  Consideration for Common Stock or Awards ......................................................... 15      6.5  Minimum Vesting Schedule .................................................................................. 15      6.6  Transfer Restrictions ............................................................................................. 16           6.6.1 Limitations on Exercise and Transfer ......................................................... 16           6.6.2 Exceptions ................................................................................................ 16           6.6.3 Further Exceptions to Limits on Transfer ................................................... 16      6.7  International Awards............................................................................................. 17      6.8  Dividend and Dividend Equivalents....................................................................... 17  7.  EFFECT OF TERMINATION OF SERVICE ON AWARDS .......................................... 17      7.1  Termination of Employment ................................................................................. 17           7.1.1 Administrator Determination ..................................................................... 17           7.1.2 General ..................................................................................................... 17           7.1.3 Stock Options and SARs ........................................................................... 17                                       i   

 

                                                                              7.2  Events Not Deemed Terminations of Service ......................................................... 18      7.3  Change in Time Commitment ............................................................................... 18      7.4  Effect of Change of Subsidiary Status.................................................................... 18  8.  ADJUSTMENTS; ACCELERATION............................................................................. 19      8.1  Adjustments ......................................................................................................... 19      8.2  Change in Control................................................................................................. 19  9.  TAX PROVISIONS ....................................................................................................... 20      9.1  Tax Withholding................................................................................................... 20      9.2  Requirement of Notification of Code Section 83(b) Election .................................. 20      9.3  Requirement of Notification of Disqualifying Disposition ...................................... 21  10. OTHER PROVISIONS................................................................................................... 21      10.1 Compliance with Laws.......................................................................................... 21      10.2 Future Awards/Other Rights.................................................................................. 21      10.3 No Employment/Service Contract ......................................................................... 21      10.4 Plan Not Funded ................................................................................................... 21      10.5 Effective Date, Termination and Suspension, Amendments .................................... 22           10.5.1 Effective Date and Termination ................................................................. 22           10.5.2 Amendment; Termination .......................................................................... 22           10.5.3 Stockholder Approval................................................................................ 22           10.5.4 Amendments to Awards ............................................................................ 22           10.5.5 Limitations on Amendments to Plan and Awards........................................ 22      10.6 Privileges of Stock Ownership .............................................................................. 23      10.7 Governing Law; Severability; Construction ........................................................... 23           10.7.1 Choice of Law........................................................................................... 23           10.7.2 Severability ............................................................................................... 23           10.7.3 Plan Construction ...................................................................................... 23      10.8 Stock-Based Awards in Substitution for Stock Options or Awards Granted by Other           Corporation .......................................................................................................... 24      10.9 Non-Exclusivity of Plan ........................................................................................ 24      10.10 No Corporate Action Restriction ........................................................................... 24      10.11 Other Company Benefit and Compensation Programs ............................................ 25      10.12 Restrictive Covenants; Cause Forfeiture; Clawback Policy ..................................... 25           10.12.1 Restrictive Covenants .............................................................................. 25           10.12.2 Annulment upon Termination for Cause ................................................... 25           10.12.3 Awards Subject to Clawback.................................................................... 25      10.13 Captions ............................................................................................................... 26                                       ii                                                                          

 

                     SERVICESOURCE INTERNATIONAL, INC.                        2020 EQUITY INCENTIVE PLAN                                                            Adopted by the Board on March 5, 2020               Approved b&#0; the Compan&#0;&#0;s stockholders on May 14, 2020                                        1.    ESTABLISHMENT AND PURPOSE OF PLAN   ServiceSource International, Inc., a De&#0;a&#0;a&#0;e c&#0;&#0;&#0;&#0;&#0;a&#0;i&#0;&#0; (&#0;he &#0;Company&#0;), he&#0;eb&#0; e&#0;&#0;ab&#0;i&#0;he&#0;  the ServiceSource International, Inc. 2020 Equity Incentive Plan (the &#0;Plan&#0;) a&#0; &#0;e&#0; f&#0;&#0;&#0;h i&#0; &#0;hi&#0;  document. The purpose of the Plan is to promote the success of the Company and to increase  stockholder value by providing an additional means to attract, motivate, retain and reward  selected  employees, non-employee directors, and other eligible persons through the grant of  equity and cash Awards that align the interests of Plan participants with the interests of the  C&#0;&#0;&#0;a&#0;&#0;&#0;&#0; &#0;&#0;&#0;c&#0;h&#0;&#0;de&#0;&#0;.    2.    DEFINITIONS         2.1  Defined Terms.  As used in the Plan, the following capitalized terms shall have        the meanings set forth below:               a.    &#0;Administrator&#0;  &#0;ha&#0;&#0;  &#0;ea&#0;  &#0;he  B&#0;a&#0;d  &#0;&#0;  &#0;&#0;e  &#0;&#0;  &#0;&#0;&#0;e Committees                   appointed by the Board (or appointed by another Committee within that                   Committee&#0;&#0; de&#0;ega&#0;ed a&#0;&#0;h&#0;&#0;i&#0;&#0;) &#0;&#0; ad&#0;i&#0;i&#0;&#0;e&#0; a&#0;&#0; &#0;&#0; ce&#0;&#0;ai&#0; a&#0;&#0;ec&#0;&#0; &#0;f                   this Plan, as set forth in Section 3 hereof.               b.    &#0;Affiliate&#0; &#0;ha&#0;&#0; ha&#0;e the meaning ascribed to such term in Rule 12b-2 of                   the General Rules and Regulations of the Exchange Act.               c.    &#0;Award&#0; &#0;ha&#0;&#0; &#0;ea&#0; any  award granted under  the Plan, including any                   Option, Stock Appreciation Right, Restricted Stock, Restricted Stock Unit,                   Performance Stock Unit, cash Award, or Other Stock-Based Award.               d.    &#0;Award Agreement&#0; &#0;ha&#0;&#0; &#0;ea&#0; a &#0;&#0;i&#0;&#0;e&#0; &#0;&#0; e&#0;ec&#0;&#0;&#0;&#0;ic A&#0;a&#0;d ag&#0;ee&#0;e&#0;&#0;                   between the Company and a Participant evidencing the grant of an Award                   under the Plan and containing the terms and conditions of such Award, as                   determined by the Administrator.               e.    &#0;Board&#0; &#0;ha&#0;&#0; &#0;ea&#0; &#0;he b&#0;a&#0;d &#0;f di&#0;ec&#0;&#0;&#0;&#0; &#0;f &#0;he C&#0;&#0;&#0;a&#0;&#0;.               f.    &#0;Cause&#0; shall have the meaning ascribed to such term in any written                   agreement  between  the  Participant  and  the  Company  or  an  Affiliate                   defining such  term and, in the absence of such agreement, such term                   means,  with  respect  to  a  Participant,  the  occurrence  of  any  of  the                   following events, in each case as determined by the Administrator: (i)                   Pa&#0;&#0;ici&#0;a&#0;&#0;&#0;&#0; gross negligence or willful misconduct in connection with                                      1   

 

                                                                     the performance of his or her duties; (ii) Pa&#0;&#0;ici&#0;a&#0;&#0;&#0;&#0; conviction of, or a        plea  of nolo  contendere to, a felony  or  a  crime  involving fraud  or        dishonesty under the laws of the United States or any state thereof ; (iii)        Pa&#0;&#0;ici&#0;a&#0;&#0;&#0;&#0;  &#0;e&#0;f&#0;&#0;&#0;a&#0;ce  &#0;f  any act  of  theft,  embezzlement,  fraud,        &#0;a&#0;fea&#0;a&#0;ce, di&#0;h&#0;&#0;e&#0;&#0;&#0; &#0;&#0; &#0;i&#0;a&#0;&#0;&#0;&#0;&#0;&#0;ia&#0;i&#0;&#0; &#0;f &#0;he C&#0;&#0;&#0;a&#0;&#0;&#0;&#0; &#0;&#0;&#0;&#0;e&#0;&#0;&#0;,        or  (iv) Pa&#0;&#0;ici&#0;a&#0;&#0;&#0;&#0; material breach of any term of any employment,        consulting or other services, confidentiality, intellectual property or non -       competition agreement, if any, between the Participant and the Company.        Any determination by the Administrator whether an event constituting        Cause has occurred will be final, binding and conclusive. For purposes of        &#0;hi&#0; defi&#0;i&#0;i&#0;&#0;, &#0;he &#0;e&#0;&#0; &#0;C&#0;&#0;&#0;a&#0;&#0;&#0; &#0;ha&#0;l be interpreted to include any        Subsidiary, Affiliate or parent of the Company, as appropriate.   g.    &#0;Change in Control&#0; &#0;ha&#0;&#0; &#0;ea&#0; the occurrence of any of the following        events:          1.   the  acquisition  by  any  individual,  entity  or  group  (within  the             meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) (a             &#0;Person&#0;) &#0;f be&#0;eficia&#0; &#0;&#0;&#0;e&#0;&#0;hi&#0; (&#0;i&#0;hi&#0; &#0;he &#0;ea&#0;i&#0;g &#0;f R&#0;&#0;e             13d-3 promulgated under the Exchange Act) of fifty percent (50%)             or more of the combined voting power of the then outstanding             voting securities of the Company entitled to vote generally in the             e&#0;ec&#0;i&#0;&#0;  &#0;f  di&#0;ec&#0;&#0;&#0;&#0;  (&#0;he  &#0;Outstanding  Company  Voting             Securities&#0;); provided, however,  that  for  purposes  of  this             subsection 1., the acquisition of additional securities by any one             Person, who is already considered to beneficially own more than             fifty percent (50%) of the Outstanding Company Voting Securities,             will not be considered a Change in Control; or          2.   a change in the effective control of the Company which occurs on             the date that a majority of members of the Board is replaced during             any twelve (12) month period by Directors whose appointment or             election is not endorsed by a majority of the members of the Board             prior to the date of the appointment or election. For purposes of             this  clause  (ii),  if  any  Person  is considered  to be in effective             control of the Company, the acquisition of additional control of the             Company by the same Person will not be considered a Change in             Control; or          3.   A  change  in  the  ownership  of  a  substantial  portion  of  the             C&#0;&#0;&#0;a&#0;&#0;&#0;&#0;  a&#0;&#0;e&#0;&#0;  &#0;hich  &#0;ccurs on  the  date  that  any  Person             acquires  (or  has  acquired  during  the  twelve  (12)  month  period             ending on the date of the most recent acquisition by such person or             persons)  assets  from  the  Company  that  have  a  total  gross  fair             market value equal to or more than fifty percent (50%) of the total             gross  fair  market  value  of  all  of  the  assets  of  the  Company             immediately prior to such acquisition or acquisitions; provided,                           2                                                               

 

                                                                          however, that for purposes of this subsection (iii), the following             will  not  constitute  a  change  in the  ownership  of a substantial             &#0;&#0;&#0;&#0;i&#0;&#0; &#0;f &#0;he C&#0;&#0;&#0;a&#0;&#0;&#0;&#0; a&#0;&#0;e&#0;&#0;: (A) a &#0;&#0;a&#0;&#0;fe&#0; &#0;&#0; a&#0; e&#0;&#0;i&#0;&#0; &#0;ha&#0; i&#0;             c&#0;&#0;&#0;&#0;&#0;&#0;&#0;ed b&#0; &#0;he C&#0;&#0;&#0;a&#0;&#0;&#0;&#0; &#0;&#0;&#0;c&#0;h&#0;&#0;de&#0;&#0; i&#0;&#0;edia&#0;e&#0;&#0; af&#0;e&#0; &#0;he             transfer,  or  (B)  a  transfer  of  assets  by  the  Company  to:  (1)  a             stockholder  of  the  Company  (immediately  before  the  asset             &#0;&#0;a&#0;&#0;fe&#0;) i&#0; e&#0;cha&#0;ge f&#0;&#0; &#0;&#0; &#0;i&#0;h &#0;e&#0;&#0;ec&#0; &#0;&#0; &#0;he C&#0;&#0;&#0;a&#0;&#0;&#0;&#0; &#0;&#0;&#0;c&#0;,             (2)  an  entity,  fifty  percent  (50%)  or  more  of the total value or             voting  power of which is owned, directly or indirectly, by the             Company,  (3)  a  Person,  that  owns,  directly  or  indirectly,  fifty             percent (50%) or more of the total value or voting power of all the             outstanding stock of the Company, or (4) an entity, at least fifty             percent  (50%)  of  the  total  value  or  voting power of which is             owned,  directly  or  indirectly, by  a  Person  described  in  this             subsection (iii)(B)(3). For purposes of this subsection (iii), gross             fair market value means the value of the assets of the Company, or             the  value  of  the  assets  being disposed of, determined without             regard to any liabilities associated with such assets.          For purposes of this definition, Persons will be considered to be acting as a        group  if  they  are  owners  of  a  corporation  that  enters  into  a  merger,        consolidation,  purchase  or  acquisition  of  stock,  or  similar  business        transaction with the Company         If the occurrence of a Change in Control is a payment event for an Award        &#0;ha&#0;  i&#0;  &#0;&#0;&#0;&#0;-&#0;&#0;a&#0;ified defe&#0;&#0;ed c&#0;&#0;&#0;e&#0;&#0;a&#0;i&#0;&#0;&#0; &#0;&#0;b&#0;ec&#0; &#0;&#0; C&#0;de Sec&#0;i&#0;&#0;        409A, then a Change in Control will be deemed to have occurred only if        the transaction is also a &#0;cha&#0;ge i&#0; &#0;&#0;&#0;e&#0;&#0;hi&#0; &#0;&#0; effec&#0;i&#0;e c&#0;&#0;&#0;&#0;&#0;&#0; &#0;f&#0; &#0;he        C&#0;&#0;&#0;a&#0;&#0; &#0;&#0; a &#0;cha&#0;ge i&#0; &#0;he &#0;&#0;&#0;e&#0;&#0;hi&#0; &#0;f a &#0;&#0;b&#0;&#0;a&#0;&#0;ia&#0; &#0;&#0;&#0;&#0;i&#0;&#0; &#0;f &#0;he        a&#0;&#0;e&#0;&#0; &#0;f&#0; &#0;he C&#0;&#0;&#0;a&#0;&#0; a&#0; de&#0;e&#0;&#0;i&#0;ed &#0;&#0;de&#0; T&#0;ea&#0;&#0;&#0;&#0; Reg&#0;&#0;a&#0;i&#0;&#0; Sec&#0;i&#0;&#0;        1.409A-3(i)(5).   h.    &#0;Code&#0; &#0;ha&#0;&#0; &#0;ea&#0; &#0;he I&#0;&#0;e&#0;&#0;a&#0; Re&#0;e&#0;&#0;e C&#0;de of 1986, as amended.    i.    &#0;Committee&#0; &#0;ha&#0;&#0; &#0;ea&#0; the compensation committee of the Board, or        such other Committee of the Board to which administration of the Plan, or        a part of the Plan, has been duly delegated as permitted by applicable law        and in accordance with the Plan.    j.    &#0;Common  Stock&#0; &#0;ha&#0;&#0; &#0;ea&#0; &#0;he c&#0;&#0;&#0;&#0;&#0; &#0;&#0;&#0;c&#0; &#0;f &#0;he C&#0;&#0;&#0;a&#0;&#0;, &#0;a&#0;        value $0.0001 per  share,  and such other securities or property as may        become the subject of Awards under this Plan pursuant to an adjustment        made under Section 8.1.    k.    &#0;Company&#0;  &#0;ha&#0;&#0;  &#0;ea&#0; ServiceSource  International,  Inc.,  a  Delaware        corporation.                             3                                                               

 

                                                               l.    &#0;Disability&#0; shall mean  total  and  permanent  disability  as  defined  in        Section  22(e)(3)  of  the  Code; provided that, if the  occurrence  of  a        Disabilit&#0; i&#0; a &#0;a&#0;&#0;e&#0;&#0; e&#0;e&#0;&#0; f&#0;&#0; a&#0; A&#0;a&#0;d &#0;ha&#0; i&#0; &#0;&#0;&#0;&#0;-qualified deferred        c&#0;&#0;&#0;e&#0;&#0;a&#0;i&#0;&#0;&#0; &#0;&#0;b&#0;ec&#0; &#0;&#0; C&#0;de Sec&#0;i&#0;&#0; 409A, then a Disability will be        deemed to have occurred only if the Pa&#0;&#0;ici&#0;a&#0;&#0;&#0;&#0; c&#0;&#0;di&#0;i&#0;&#0; a&#0;&#0;&#0; &#0;&#0;a&#0;ifie&#0;        a&#0; a &#0;di&#0;abi&#0;i&#0;&#0;&#0; f&#0;&#0; &#0;&#0;&#0;&#0;&#0;&#0;e&#0; &#0;f Code Section 409A.    m.    &#0;Effective Date&#0; &#0;ha&#0;&#0; &#0;ea&#0; &#0;he da&#0;e &#0;&#0; &#0;hich &#0;hi&#0; P&#0;a&#0; i&#0; a&#0;&#0;&#0;&#0;&#0;ed b&#0; &#0;he        stockholders of the Company.    n.    &#0;Eligible  Person&#0; shall  mean  any  person  who  is  either:  (a)  an  officer        (whether  or  not  a  director)  or employee of the Company or one of its        Subsidiaries or (b) a non-employee director of the Company or one of its        Subsidiaries.    o.    &#0;Exchange  Act&#0;  &#0;ha&#0;&#0;  &#0;ea&#0;  &#0;he  Sec&#0;&#0;i&#0;ie&#0; E&#0;cha&#0;ge Ac&#0; &#0;f 1934, a&#0;        amended.    p.    &#0;Fair  Market  Value&#0;  &#0;ha&#0;&#0;  &#0;ea&#0; the  fair  market  value  of a  share  of        Common Stock as of a particular date, determined as follows: (i) if the        Common Stock is then listed on a national securities exchange of national        market system, the closing sale price for such share of Common Stock for        the  last  market  trading  day  prior  to  the  particular  date  for  which  Fair        Market Value is being determined, as reported on the national securities        exchange or national market system on which such stock is principally        traded,  or  (ii)  if  the  shares  of  Common  Stock  are not then listed on a        national securities exchange or national market system, or the value of        such shares is not otherwise determinable, such value as determined by the        Committee  in  good  faith  in  its  sole  discretion  consistent  with  the        requirements under Section 409A of the Code.    q.    &#0;Incentive Stock Option&#0; &#0;&#0; &#0;ISO&#0; &#0;ha&#0;&#0; &#0;ea&#0; a&#0; Option that is intended        to comply with the requirements of Section 422 of the Code.    r.    &#0;Non-Qualified Stock Option&#0; &#0;ha&#0;&#0; &#0;ea&#0; a&#0; O&#0;&#0;i&#0;&#0; that is not intended to        comply with the requirements of Section 422 of the Code.    s.    &#0;Option&#0; &#0;ha&#0;&#0; &#0;ean a right to purchase a specified number of shares of        Common  Stock during a specified period at a fixed exercise price as        determined by the Administrator, granted pursuant to Section 6.1.1.    t.    &#0;Other-Stock  Based Award&#0;  &#0;ha&#0;&#0;  &#0;ea&#0;  a  &#0;&#0;&#0;c&#0;-based  Award  issued        pursuant to Section 6.1.7.    u.    &#0;Participant&#0;  &#0;ha&#0;&#0;  &#0;ea&#0;  a&#0;&#0;  E&#0;igib&#0;e  Pe&#0;&#0;&#0;&#0;  &#0;ha&#0;  ha&#0; bee&#0; i&#0;&#0;&#0;ed a&#0;        Award under the Plan.                             4                                                               

 

                                                                                     v.    &#0;Performance Stock Unit&#0; &#0;&#0; &#0;PSU&#0; &#0;ha&#0;&#0; &#0;ea&#0; an Award evidencing the                   right  to  receive  shares of  Common  Stock  or  equivalent  value  (as                   determined  by  the  Administrator) based  on  the  attainment  of certain                   performance goals, issued pursuant to Section 6.1.5.               w.    &#0;Plan&#0; &#0;ha&#0;&#0; ha&#0;e &#0;he &#0;ea&#0;i&#0;g &#0;e&#0; f&#0;&#0;&#0;h i&#0; Sec&#0;i&#0;&#0; 1 hereof.               x.    &#0;Prior Plan&#0; &#0;ha&#0;&#0; &#0;ea&#0; &#0;he ServiceSource International, Inc. 2011 Equity                   Incentive Plan, as amended.              y.    &#0;Restricted Stock&#0; &#0;ha&#0;&#0; &#0;ea&#0; &#0;ha&#0;e&#0; &#0;f C&#0;&#0;&#0;&#0;&#0; S&#0;&#0;c&#0; that are subject to                   forfeiture  and  restrictions  on  transferability, issued  pursuant  to                   Section 6.1.3.               z.    &#0;Restricted Stock Unit&#0; &#0;&#0; &#0;RSU&#0; &#0;ha&#0;&#0; &#0;ea&#0; a &#0;&#0;i&#0; evidencing the right to                   receive one share of Common Stock or equivalent value (as determined by                   the  Administrator)  that  is  restricted  or  subject  to forfeiture provisions,                   issued pursuant to Section 6.1.4.               aa.   &#0;Section 409A&#0; &#0;ha&#0;&#0; &#0;ea&#0; &#0;ec&#0;i&#0;&#0; 409A of the Code and related Treasury                   regulations and guidance promulgated thereunder.               bb.   &#0;Securities Act&#0; &#0;ha&#0;&#0; &#0;ea&#0; &#0;he Sec&#0;&#0;i&#0;ie&#0; Ac&#0; &#0;f 1933, a&#0; a&#0;e&#0;ded.               cc.   &#0;Share Limit&#0; &#0;ha&#0;&#0; ha&#0;e &#0;he number of shares available for issuance under                   the Plan as set forth in Section 4.1.               dd.   &#0;Stock  Appreciation  Right&#0; &#0;&#0; &#0;SAR&#0; &#0;ha&#0;&#0; &#0;ea&#0; a right to receive the                   appreciation value on the shares of Common Stock subject to the Award,                   issued pursuant to Section 6.1.2.               ee.   &#0;Subsidiary&#0; &#0;hall  mean  any  corporation (other than the Company) or                   other entity controlled by the Company directly or indirectly though one                   or more intermediaries.          2.2  Construction.  Except where otherwise indicated by the context, any masculine        term used herein also shall include the feminine, the plural shall include the singular, and        the singular shall include the plural.    3.    PLAN ADMINISTRATION             3.1  Plan Administrator.  This Plan shall be administered by, and all Awards under        this Plan shall be authorized by, the Administrator. Any Committee appointed by the        Board to act as the Administrator shall be comprised solely of one or more directors or        such other number of directors as may be required under applicable law and the rules of        any applicable stock exchange. A Committee may delegate some or all of its authority to        another Committee so  constituted.  The  Board  or  a Committee comprised  solely  of        directors may also delegate, to the extent permitted by applicable law and the rules of any                                      5                                                                          

 

                                                                    applicable stock exchange, to one or more officers of the Company, its powers under this  Plan (a) to determine the Eligible Persons who will receive grants of Awards under this  Plan,  and  (b) to determine the number of shares subject to, and the other terms and  conditions of, such Awards. The Board may delegate different levels of authority to  different Committees with administrative and grant authority under this Plan. Unless  otherwise  provided in the bylaws of the Company or the applicable charter of any  Administrator: (a) a majority of the members of the acting Administrator shall constitute  a quorum, and (b) the affirmative vote of a majority of the members present assuming the  presence  of  a  quorum  or  the  unanimous  written  consent  of  the  members  of  the  Administrator shall constitute due authorization of an action by the acting Administrator.    Grants of Awards, and transactions in or involving Awards, intended to be exempt under  Rule 16b-3 under the Exchange Act, must be duly and timely authorized by the Board or  a Committee consisting  solely  of two  or  more  non-employee  directors (as  this  requirement is applied under Rule 16b-3 promulgated under the Exchange Act). Awards  granted to non-employee directors shall not be subject to the discretion of any of ficer or  employee of the Company and shall be administered exclusively by the Board or a  Committee consisting solely of independent directors.    3.2  Powers of the Administrator.  Subject to the express provisions of this Plan, the  Administrator  is  authorized  and  empowered  to  do  all  things deemed necessary or  desirable in connection with the authorization of Awards and the administration of this  Plan (in the case of a delegation to a Committee or one or more officers, within the  authority  delegated to that Committee or person(s)), including, without limitation, the  authority to:         a.    determine eligibility and, from among those persons determined to be             eligible, the particular Eligible Persons who will receive Awards under             this Plan;         b.    grant  Awards  to  Eligible  Persons,  determine the type of Awards to be             granted, the price at which securities will be offered or awarded and the             number of securities to be offered or awarded to any of such persons,             determine  the  other  specific  terms  and  conditions  of  such  Awards             consistent with the express limits of this Plan, establish the installments (if             any) in which such Awards shall become exercisable or shall vest (which             may  include,  without  limitation,  performance  and/or  time-based             schedules),  or  determine  that  no  delayed  exercisability  or  vesting  is             required, establish any applicable performance targets, and establish the             events of termination or reversion of such Awards;         c.    approve  the  forms of Award Agreements (which need not be identical             either as to type of Award or among Participants);         d.    construe and interpret this Plan and any Award Agreements defining the             rights and obligations of the Company, its Subsidiaries, and Participants             under this Plan, further define the terms used in this Plan, and prescribe,                                6                                                                    

 

                                                                     amend and rescind rules and regulations relating to the administration of        this Plan or the Awards granted under this Plan;    e.    ca&#0;ce&#0;, &#0;&#0;dif&#0;, &#0;&#0; &#0;ai&#0;e &#0;he C&#0;&#0;&#0;a&#0;&#0;&#0;&#0; &#0;igh&#0;&#0; &#0;i&#0;h &#0;e&#0;&#0;ec&#0; &#0;&#0;, &#0;&#0; &#0;&#0;dif&#0;,        discontinue, suspend, or terminate any or all outstanding Awards, subject        to any required consent under Section 10.5.5;    f.    extend  the  vesting  or  exercisability  or  extend  the  term  of  any or all        outstanding Awards (in the case of Options or Stock Appreciation Rights,        within  the  maximum  ten (10)-year  term  of  such  Awards)  in  such        circumstances  as  the  Administrator  may  deem  appropriate  (including,        without limitation, in connection with a termination of employment or        services  or  other  events  of  a  personal  nature)  subject  to  any  required        consent under Section 10.5.5;    g.    adjust the number of shares of Common Stock subject to any Award,        adjust the price of any or all outstanding Awards or otherwise change        previously imposed terms and conditions, in such circumstances as the        Administrator may deem appropriate, in each case subject to compliance        with applicable stock exchange requirements, Sections 4 and 10.5.5, and        provided that in no case (except due to an adjustment contemplated by        Section 8) shall the terms of any outstanding Awards be amended (by        amendment, cancellation and regrant, or other means) to reduce the per        share  exercise  or  base  price  of  any  outstanding  Option  or  Stock        Appreciation  Right  or  other  Award  granted  under  this  Plan,  or  be        exchanged for cash, other Award or Option or Stock Appreciation Right        with an exercise price that is less than the per share exercise price of the        original  Option  or  Stock  Appreciation  Right,  without  stockholder        approval,  and further provided that any adjustment or change in terms        made pursuant to this Section 1.1g shall be made in a manner that, in the        good faith determination of the Administrator will not likely result in the        imposition of additional taxes or interest under Section 409A;    h.    determine the date of grant of an Award, which may be a designated date        af&#0;e&#0;  b&#0;&#0;  &#0;&#0;&#0;  bef&#0;&#0;e  &#0;he  da&#0;e  &#0;f  &#0;he  Ad&#0;i&#0;i&#0;&#0;&#0;a&#0;&#0;&#0;&#0;&#0;  ac&#0;i&#0;&#0;  (&#0;&#0;&#0;e&#0;&#0;        otherwise designated by the Administrator, the date of grant of an Award        shall be the date upon which the Administrator took the action granting an        Award);    i.    determine  whether, and the extent to which, adjustments are required        pursuant to Section 8 hereof and authorize the termination, conversion,        substitution, acceleration or succession of Awards upon the occurrence of        an event of the type described in Section 8;    j.    acquire or settle rights under Awards in cash, stock of equivalent value, or        other consideration, subject to the provision of the Plan; and                             7                                                               

 

                                                                                     k.    determine the Fair Market Value of the Common Stock or Awards under                   this Plan from time to time and/or the manner in which such value will be                   determined.          Notwithstanding  anything in  this  Section  to  the  contrary,  in  no  event  shall  the        Administrator be authorized to accelerate the vesting of any Award under the Plan except        upon the death or Disability of the Participant.          3.3  Binding Determinations.  Any action taken by, or inaction of, the Company, any        Subsidiary, or the Administrator relating or pursuant to this Plan and within its authority        hereunder or under applicable law shall be within the absolute discretion of that entity or        body  and shall be conclusive and binding upon all persons.  Neither  the  Board,  the        Administrator,  nor  any Committee,  nor  any  member  thereof  or  person  acting  at  the        direction thereof, shall be liable for any act, omission, interpretation, construction or        determination made in good faith in connection with this Plan (or any Award made under        this Plan), and all such persons shall be entitled to indemnification and reimbursement by        the  Company  in  respect of any claim, loss, damage or expense (including, without        limitation, legal fees) arising or resulting therefrom to the fullest extent permitted by law.        The foregoing right of indemnification shall be in addition to any right of indemnification        &#0;e&#0; f&#0;&#0;&#0;h i&#0; &#0;he C&#0;&#0;&#0;a&#0;&#0;&#0;&#0; ce&#0;&#0;ifica&#0;e &#0;f i&#0;c&#0;&#0;&#0;&#0;&#0;a&#0;i&#0;&#0; a&#0;d b&#0;&#0;a&#0;&#0;, a&#0; &#0;he &#0;a&#0;e &#0;a&#0; be        amended  from  time  to  time,  or  under any  directors  and  officers  liability  insurance        coverage or written indemnification agreement with the Company that may be in ef fect        from time to time.          3.4  Reliance on Experts.  In making any determination or in taking or not taking any        action under this Plan, the Administrator may obtain and may rely upon the advice of        experts, including professional advisors to the Company. The Administrator shall not be        liable for any such action or determination taken or made or omitted in good faith based        upon such advice.          3.5  Delegation  of  Non-Discretionary  Functions.  In  addition  to  the  ability  to        delegate certain grant authority to officers of the Company as set forth in Section 3.1, th e        Administrator may also delegate ministerial, non-discretionary functions to individuals        who  are  officers  or employees of the Company or any of its Subsidiaries or to third        parties.   4.    SHARES OF COMMON STOCK SUBJECT TO THE PLAN; SHARE LIMIT             4.1  Shares  of  Common  Stock Subject  to  the  Plan;  Share  Limit.  Subject  to  the        adjustment as provided in Sections 8.1 and 10.8, the maximum number of shares of        Common Stock available for issuance under the Plan will be equal to 6,200,000, all of        which may be granted, in the sole discretion of the Administrator, as Incentive Stock        Options. Common Stock issued under the Plan shall be either authorized but unissued        shares of Common Stock or, to the extent permitted, shares of Common Stock that have        been reacquired by the Company or any Subsidiary.                                        8                                                                          

 

                                                                                4.2  Counting  of  Shares. The  Administrator  may  adopt  reasonable  counting        procedures to ensure appropriate counting and to avoid double counting (as, for example,        in the case of tandem or substitute Awards) as it may deem necessary or desirable in its        sole discretion. Shares shall be counted against those reserved to the extent shares have        been delivered pursuant to an Award and are no longer subject to a substantial risk of        forfeiture. Accordingly, to the extent that an Award under the Plan, in whole or in part, is        canceled, expired, forfeited, settled in cash, or otherwise terminated without delivery of        shares of Common Stock to the Participant, the shares of Common Stock retained by or        returned to the Company will not be deemed to have been delivered under the Plan, as        applicable,  and  will  be  deemed  to  remain or  become available  under  this  Plan.         Notwithstanding the foregoing, shares of Common Stock that are withheld from such an        Award or separately surrendered by the Participant in payment of the exercise price or        taxes relating to such an Award, and the total number of shares subject to the exercised        portion of a stock-settled SAR (regardless of the actual lesser of number shares delivered        to the Participant), shall be deemed to have been issued hereunder and shall reduce the        number of shares of Common Stock remaining available for issuance under the Plan.          4.3  Reservation of Shares; No Fractional Shares.  The Company shall at all times        reserve  a  n&#0;&#0;be&#0;  &#0;f  &#0;ha&#0;e&#0;  &#0;f  C&#0;&#0;&#0;&#0;&#0;  S&#0;&#0;c&#0;  &#0;&#0;fficie&#0;&#0;  &#0;&#0;  c&#0;&#0;e&#0;  &#0;he  C&#0;&#0;&#0;a&#0;&#0;&#0;&#0;        obligations and contingent obligations to deliver shares with respect to Awards then        outstanding under this Plan (exclusive of any dividend equivalent obligations to the        extent the Company has the right to settle such rights in cash). No fractional shares shall        be delivered under this Plan. The Administrator may pay cash in lieu of any fractional        shares in settlements of Awards under this Plan.    5.    PARTICIPATION       The  Administrator  may  grant Awards  under  this  Plan  only  to  those  persons  that  the  Administrator determines to be Eligible Persons. The Administrator shall, in its sole and absolute  discretion, select from among the Eligible Persons those individuals who shall receive Awards  and become Participants under the Plan. There is no right of any Eligible Person to receive an  Award under the Plan, and the Administrator has absolute discretion to treat Eligible Persons  differently from one another under the Plan. Receipt of an Award by a Participant shall not  create the right to receive future Awards under the Plan, but a Participant who has been granted  an Award may, if otherwise eligible, be granted additional Awards if the Administrator shall so  determine.    6.    AWARDS             6.1  Type and Form of Awards.  The Administrator shall determine the type or types        of Award(s) to be made to each selected Eligible Person. Awards may be granted singly,        in combination or in tandem. Awards may also be made in combination or in tandem        with, in replacement of, as alternatives to, or as the payment form for grants or rights        under any other employee or compensation plan of the Company or its Subsidiaries. The        types of Awards that may be granted under this Plan are:               6.1.1 Stock Options.                                        9                                                                          

 

                                                         a.   General  Option  Provisions.  Options  may  only  be  granted  to       Eligible Persons for whom the Company would be deemed to be       a&#0;  &#0;e&#0;igib&#0;e  i&#0;&#0;&#0;e&#0;  &#0;f  &#0;e&#0;&#0;ice  &#0;eci&#0;ie&#0;&#0;  &#0;&#0;&#0;c&#0;,&#0;  a&#0;  defi&#0;ed  i&#0;       Treasury  Regulation 1.409A-1(b)(5)(iii)(E).  An  Option  may  be       intended to be an Incentive Stock Option or a Non-Qualified Stock       Option. The Award Agreement for an Option will indicate if the       Option is intended to be an ISO or an Non-Qualified Stock Option.       The maximum term of each Option (whether an ISO or a Non-      Qualified  Stock  Option)  shall  be ten (10) years.  The  per  share       exercise price for each Option shall be not less than one hundred       percent (100%) of the Fair Market Value of a share of Common       Stock on the date of grant of the Option. Each Option shall become       exercisable at such times and under such conditions and shall be       subject  to  such  other  terms  as  may  be  determined  by  the       Administrator in its discretion. When an Option is exercised, the       exercise price for the shares underlying such Option shall be paid       in full in cash or such other method permitted by the Administrator       consistent with Section 6.4.    b.   Additional Rules Applicable to ISOs.  Notwithstanding the general       Option rules set forth in Section 1.1.1a, the following rules shall       apply to Options intended to qualify as ISOs. ISOs may only be       granted to employees of the Company or its Subsidiaries (for this       &#0;&#0;&#0;&#0;&#0;&#0;e, &#0;he &#0;e&#0;&#0; &#0;&#0;&#0;b&#0;idia&#0;&#0;&#0; i&#0; a&#0; defi&#0;ed i&#0; Sec&#0;i&#0;&#0; 424(f) of       the  Code,  which  generally  requires  an  unbroken  chain  of       ownership of at least fifty percent (50%) of the total combined       voting power of all classes of stock of each subsidiary in the chain       beginning with the Company and ending with the subsidiary in       question).  To  the  extent  that the  aggregate  Fair  Market  Value       (determined at the time of grant of the applicable Option) of shares       of  Common  Stock with  respect  to  which  ISOs  first  become       exercisable  by  a  Participant  in  any  calendar  year  exceeds       $100,000, taking into account both Common Stock subject to ISOs       under this Plan and stock subject to ISOs under all other plans of       the  Company  or  its  Subsidiaries  (or  any  parent  or  predecessor       corporation to the extent required by and within the meaning of       Section 422  of  the  Code  and  the  regulations  promulgated       thereunder), such Options shall be treated as Non-Qualified Stock       Options.  In  reducing  the  number  of Options treated  as ISOs to       meet the $100,000 limit, the most recently granted Options shall be       reduced first. To the extent a reduction of simultaneously granted       Options is necessary to meet the $100,000 limit, the Administrator       may, in the manner and to the extent permitted by law, designate       which shares of Common Stock are to be treated as shares acquired       pursuant to the exercise of an ISO. An Award Agreement relating       to ISOs may contain such other terms and conditions as from time       to time are required in order for the Option to be considered an                     10                                                         

 

                                                                          &#0;i&#0;ce&#0;&#0;i&#0;e &#0;&#0;&#0;c&#0; &#0;&#0;&#0;i&#0;&#0;,&#0; a&#0; &#0;ha&#0; &#0;e&#0;&#0; i&#0; defi&#0;ed i&#0; Sec&#0;i&#0;&#0;  422 of             the Code. No ISO may be granted to any person who, at the time             the Option is  granted,  owns  (or  is  deemed  to  own  under             Section 424(d) of the Code) shares of outstanding Common Stock             possessing more than ten  percent  (10%) of the total combined             voting power of all classes of stock of the Company, unless the             exercise  price  of  such  option  is  at  least one  hundred and ten             percent (110%) of the Fair Market Value of the stock subject to the             Option and the term of such Option does not exceed five (5) years             from the date such Option is granted.    6.1.2 Stock  Appreciation  Rights.  A SAR is  an  Award  that  entitles  the  Participant  to  receive,  upon  exercise  of  the SAR, a payment in cash and/or  Common Stock, or a combination of the two, equal to (or having a Fair Market  Value equal to) the product of (x) number of SARs being exercised multiplied by  (y) the excess of (i) the Fair Market Value of a share of Common Stock on the  date the SAR is exercised, over (ii) &#0;he &#0;ba&#0;e &#0;&#0;ice&#0; a&#0;&#0;&#0;icab&#0;e &#0;&#0; &#0;he SAR. SAR&#0;  may  only  be  granted  to  Eligible  Persons  for  whom the Company would be  deemed to be a&#0; &#0;e&#0;igib&#0;e i&#0;&#0;&#0;e&#0; &#0;f &#0;e&#0;&#0;ice &#0;eci&#0;ie&#0;&#0; &#0;&#0;&#0;c&#0;,&#0; a&#0; defi&#0;ed i&#0; T&#0;ea&#0;&#0;&#0;&#0;  Regulation 1.409A-1(b)(5)(iii)(E). The base price of the SAR shall be determined  by the Administrator but shall be not less than the Fair Market Value of the  C&#0;&#0;&#0;a&#0;&#0;&#0;&#0; C&#0;&#0;&#0;&#0;&#0; S&#0;&#0;c&#0; &#0;&#0; the date of grant. The maximum term of a SAR  shall be ten (10) years. SARs shall become exercisable at such times and under  such conditions and shall be subject to such other terms as may be determined by  the Administrator in its discretion consistent with the terms and conditions of the  Plan.    6.1.3 Restricted Stock.             a.   General Restricted Stock Provisions.  Restricted Stock is Common             Stock  subject  to  such  restrictions  on  transferability,  risk  of             forfeiture and other restrictions, if any, as the Administrator may             impose, which restrictions may lapse separately or in combination             at  such  times,  under  such  circumstances  (including  based  on             achievement  of  performance  goals  and/or  future  service             requirements),  in  such  installments  or  otherwise,  as  the             Administrator may  determine  at  the  date  of  grant or thereafter.             Except to the extent restricted under the terms of this Plan and the             applicable Award Agreement relating to the Restricted Stock, a             Participant granted Restricted Stock shall have all of the rights of a             stockholder  of  the  Company,  including  the  right  to  vote  the             Restricted Stock and the right to receive dividends thereon (subject             to the provisions of Section 1.1.1c and Section 6.8).          b.   Certificates for Shares.  Shares of Restricted Stock granted under             this Plan may be evidenced in such manner as the Administrator             shall  determine.  If  certificates  representing Restricted Stock are                           11                                                               

 

                                                                          registered in the name of the Participant, the Administrator may             require that such certificates bear an appropriate legend referring to             the terms, conditions and restrictions applicable to such Restricted             Stock,  that  the  Company  retain  physical  possession  of  the             certificates, and that the Participant deliver a stock power to the             Company, endorsed in blank, relating to the Restricted Stock. The             Administrator may require that shares of Restricted Stock are held             in escrow until all restrictions lapse.          c.   Dividends and Splits.  As a condition to the grant of an Award of             Restricted Stock, any cash dividends paid on shares of Restricted             Stock and any stock distributed in connection with a stock split or             stock dividend, and any other property distributed as a dividend,             shall be subject to restrictions and a risk of forfeiture  to the same             extent as the Restricted Stock with respect to which such dividend             or distribution was made. In addition, and subject to applicable             law, the Administrator may require or permit a Participant to elect             that any cash dividends paid on Restricted Stock be automatically             reinvested in additional shares of Restricted Stock or applied to the             purchase of additional Awards under this Plan, subject to the same             vesting schedule as the Restricted Stock to which the dividend             relates.    6.1.4 Restricted Stock Units.             a.   Grant of Restricted Stock Units.  An RSU represents the right to             receive from the Company on the relevant scheduled vesting or             payment date for such RSU, one share of Common Stock or, if             specified  in  the  applicable Award  Agreement,  the  Fair  Market             Value of one share of Common Stock paid in cash. The vesting or             payment of an Award of RSUs may be subject to the attainment of             specified performance goals or targets, forfeitability provisions and             such  other  terms  and  conditions  as  the  Administrator  may             determine, subject to the provisions of this Plan.          b.   Dividend  Equivalent Accounts.  If (and only if) required by the             applicable Award  Agreement,  prior  to  the  expiration  of  the             applicable  vesting  period  of  an  RSU,  the  Administrator  shall             provide dividend equivalent rights with respect to RSUs, in which             case the Company shall establish an account for the Participant and             reflect  in  that  account  any  securities,  cash  or  other  property             comprising any dividend or property distribution with respect to             the shares of Common Stock underlying each RSU. Each amount             or other property credited to any such account shall be subject to             the  same  vesting  conditions as the RSU to which it relates. In             addition, subject to applicable law, the Administrator may require             or permit a Participant to elect that any such dividend equivalent                           12                                                               

 

                                                                          a&#0;&#0;&#0;&#0;&#0;&#0;  c&#0;edi&#0;ed  &#0;&#0;  &#0;he  Pa&#0;&#0;ici&#0;a&#0;&#0;&#0;&#0; acc&#0;&#0;&#0;&#0; be a&#0;&#0;&#0;&#0;a&#0;ica&#0;&#0;&#0;             deemed reinvested in additional RSUs or applied to the purchase of             additional  Awards  under  the  Plan, subject to the same vesting             schedule as the RSUs to which the dividend equivalent amounts             relate. The Participant shall be paid the amounts or other property             credited to such dividend equivalent account at the same time as             payment of the RSU.          c.   Rights as a Stockholder.  Subject to the restrictions imposed under             the  terms  and conditions of this Plan and the applicable Award             Agreement, each Participant receiving RSUs shall have no rights             as a stockholder of the Company with respect to such RSUs until             such time as shares of Common Stock are issued to the Participant.             In  the  event an RSU is settled in cash, the Participant receiving             RSUs shall never receive stockholder rights with respect to such             Award. No shares of Common Stock shall be issued at the time a n             RSU is granted, and the Company will not be required to set aside             funds for the payment of any such Award.    6.1.5 Performance Stock Units.             a.   Grant of Performance Stock Units.  A PSU is a performance-based             Award that entitles the Participant to receive shares of Common             Stock or, if specified in the Award Agreement, the Fair Market             Value of such shares of Common Stock paid in cash, based on the             attainment  of  one  or  more  performance  goals.  Each  Award  of             PSUs  shall  designate  a  target number of PSUs covered by the             Award, with the actual number of shares of Common Stock earned             (if any) to be based on a formula set forth in the Award Agreement             related to the attainment of one or more performance goals set             forth in the Award Agreement.          b.   Dividend  Equivalent Accounts.  If (and only if) required by the             applicable Award Agreement, the Administrator shall pay dividend             equivalent rights with respect to PSUs, in which case a Participant             shall be entitled to a cash payment with respect to each PSU earned             and payable in an amount based on the ordinary cash dividends             that would have been payable to the Participant had the Participant             been the owner of a number of actual shares of Common Stock             equal to the number of PSUs earned, from the date of grant of the             PSU Award through the date the PSU is paid. If so determined by             the Administrator  and  set  forth in  the  applicable  Award             Agreement, such cash amount may be credited with earnings or             losses as if deemed reinvested in Common Stock or as if used to             purchase additional Awards under the Plan. The amount payable             shall be made in a single lump sum on the date on which payment             is made in respect of the related PSUs.                            13                                                               

 

                                                                               c.   Rights as a Stockholder.  Subject to the restrictions imposed under                  the terms and conditions of this Plan and the applicable Award                  Agreement, each Participant receiving PSUs shall have no rights as                  a stockholder of the Company with respect to such PSUs until such                  time as shares of Common Stock are issued to the Participant. In                  the event a PSU is settled in cash, the Participant receiving PSUs                  shall never receive stockholder rights with respect to such Award.                  No shares of Common Stock shall be issued at the time a PSU is                  granted, and the Company will not be required to set aside funds                  for the payment of any such Award.         6.1.6 Cash Awards.  The Administrator may, from time to time, subject to the       provisions of the Plan and such other terms and conditions as it may determine,       grant cash bonuses (including without limitation, discretionary Awards, Awards       based on objective or subjective performance criteria, Awards subject to other       vesting  criteria  or  Awards granted  consistent  with  Section 6.1.7 below). Cash       Awards may be awarded in such amount and at such times during the term of the       Plan as the Administrator shall determine.         6.1.7 Other Awards.  The other types of Awards that may be granted under this       Plan include: (a) stock bonuses or similar rights to purchase or acquire shares,       whether at a fixed or variable price or ratio related to the Common Stock (subject       to compliance with applicable laws), upon the passage of time, the occurrence of       one or more events, or the satisfaction of performance criteria or other conditions,       or any combination thereof; or (b) any similar securities or rights with a value       derived  from  the  value  of, or  related to, the  Common  Stock  and/or returns       thereon.    6.2  Award  Agreements.  Each  Award  (other  than  cash  Awards  described  in  Section 6.1.6) shall be evidenced by a written or electronic Award Agreement in the form  approved by  the  Administrator  and,  if required  by  the  Administrator,  executed  or  accepted by the recipient of the Award. The Administrator may authorize any officer of  the Company (other than the particular Award recipient) to execute any or all Award  Agreements  on behalf  of  the  Company  (electronically  or  otherwise).  The Award  Agreement shall set forth the material terms and conditions of the Award as established  by the Administrator consistent with the express limitations of this Plan.    6.3  Deferrals  and  Settlements.  Except as otherwise set forth herein, payment of  Awards may be in the form of cash, Common Stock, other Awards or combinations  thereof as the Administrator shall determine, and with such restrictions as it may impose.  The Administrator may also require or permit Participants to elect to defer the issuance of  shares of Common Stock or the settlement of Awards in cash under such rules and  procedures as it may establish under this Plan. The Administrator may also provide that  deferred settlements include the payment or crediting of interest or other earnings on the  deferral amounts, or the payment or crediting of dividend equivalents where the deferred  amounts are denominated in shares. All mandatory or elective deferrals of the issuance of  shares of Common Stock or the settlement of Awards in cash shall be structured in a                                14                                                                    

 

                                                                    manner  that  is  intended  to  comply  with,  or  be  exempt  from, the  requirements  of  Section 409A of the Code.    6.4  Consideration for Common Stock or Awards.  The purchase price for any Award  granted under this Plan or the Common Stock to be delivered pursuant to an Award, as  applicable, may be paid by means of any lawful consideration as determined by the  Administrator  and  subject  to  compliance  with  applicable  laws,  including,  without  limitation, one or a combination of the following methods:         (i)   services rendered by the recipient of such Award;         (ii)  cash, check payable to the order of the Company, or electronic funds             transfer;         (iii) notice and third-party payment in such manner as may be authorized by             the Administrator;         (iv)  the delivery of previously owned shares of Common Stock that are f ully             vested and unencumbered;         (v)   by a reduction in the number of shares otherwise deliverable pursuant to             the Award; or         (vi)  subject to such procedures as the Administrator may adopt, pursuant to a             &#0;ca&#0;h&#0;e&#0;&#0;  e&#0;e&#0;ci&#0;e&#0;  &#0;i&#0;h  an  approved  broker  or  dealer who  provides             financing for the purposes of (or who otherwise facilitates) the purchase or             exercise of Awards.    In  the  event  that  the  Administrator  allows  a  Participant  to  exercise  an  Award  by   delivering shares of Common Stock previously owned by such Participant and unless  otherwise  expressly  provided by the Administrator, any shares delivered which were  initially acquired by the Participant from the Company (upon exercise of an Option or  otherwise) must have been owned by the Participant at least six (6) months as of the date  of delivery (or such other period as may be required by the Administrator in order to  avoid  adverse  accounting  treatment).  Shares  of  Common  Stock used to satisfy the  exercise price of an Option shall be valued at their Fair Market Value on the date of  exercise. The Company will not be obligated to deliver any shares with respect to any  Award unless and until it receives full payment of the exercise or purchase price theref or  and any related withholding amounts under Section 9.1, and any other conditions to  exercise or purchase, as established from time to time by the Administrator , have been  satisfied. Unless otherwise expressly provided in the applicable Award Agreement, the  Ad&#0;i&#0;i&#0;&#0;&#0;a&#0;&#0;&#0;  &#0;a&#0;  a&#0;  a&#0;&#0;  &#0;i&#0;e  e&#0;i&#0;i&#0;a&#0;e  &#0;&#0;  &#0;i&#0;i&#0;  a  Pa&#0;&#0;ici&#0;a&#0;&#0;&#0;&#0;  abi&#0;i&#0;&#0;  &#0;&#0;  &#0;a&#0;  &#0;he  purchase or exercise price of any Award by any method other than cash payment to the  Company.    6.5  Minimum  Vesting  Schedule.  Except as provided below, all Awards  granted  under the Plan shall have a minimum one (1) year cliff vesting schedule meaning that no  portion of any Award may be scheduled to vest prior to one (1) year after the date of                                15                                                                    

 

                                                                    grant of such Award. Notwithstanding the foregoing, up to five percent (5%) of the total  number of shares of Common Stock authorized by the Board and the stockholders for  issuance under the Plan may be granted pursuant to Awards not subject to the minimum  vesting schedule described above. The Administrator may adopt reasonable counting  procedures to determine whether the five percent (5%) limit in the preceding sentence has  been attained.    6.6  Transfer Restrictions.            6.6.1 Limitations  on  Exercise  and  Transfer.  Unless  otherwise  expressly       provided in (or pursuant to) this Section 6.6, by applicable law or by an Award       Agreement, as the same may be amended, (a) all Awards are non-transferable by       the  Participant and  shall  not  be  subject  in  any  manner  to  sale,  transfer,       anticipation, alienation, assignment, pledge, encumbrance or charge; (b) Awards       shall be exercised only by the Participant; and (c) amounts payable or shares       issuable pursuant to any Award shall be delivered only to (or for the account of )       the Participant.         6.6.2 Exceptions.  The Administrator may permit Awards to be exercised by       and paid to, or otherwise transferred to, other persons or entities pursuant to such       conditions and procedures, including limitations on subsequent transfers, as the       Administrator may, in its sole discretion, establish in writing (provided that any       such transfers of ISOs shall be limited to the extent permitted under the federal       tax laws governing ISOs). Any permitted transfer shall be subject to compliance       with applicable federal and state securities laws.         6.6.3 Further  Exceptions  to  Limits  on  Transfer.  The  exercise  and transfer       restrictions in Section 6.6.1 shall not apply to:               a.   transfers to the Company,               b.   the designation of a beneficiary to receive benefits in the event of                  &#0;he Pa&#0;&#0;ici&#0;a&#0;&#0;&#0;&#0; dea&#0;h &#0;&#0;, if &#0;he Pa&#0;&#0;ici&#0;a&#0;&#0; ha&#0; died, &#0;&#0;a&#0;&#0;fe&#0;&#0; &#0;&#0; &#0;&#0;                  e&#0;e&#0;ci&#0;e b&#0; &#0;he Pa&#0;&#0;ici&#0;a&#0;&#0;&#0;&#0; be&#0;eficia&#0;&#0;, &#0;&#0;, i&#0; &#0;he ab&#0;e&#0;ce &#0;f a                  validly designated beneficiary, transfers by will or the laws of                  descent and distribution,               c.   subject to any applicable limitations on ISOs, transfers to a family                  member  (or  former  family  member)  pursuant  to  a  domestic                  relations order if approved or ratified by the Administrator,               d.   subject to any applicable limitations on ISOs, if the Participant has                  suffered a Disability, permitted transfers or exercises on behalf of                  the Participant by his or her legal representative, or               e.   &#0;he  a&#0;&#0;h&#0;&#0;i&#0;a&#0;i&#0;&#0;  b&#0;  &#0;he  Ad&#0;i&#0;i&#0;&#0;&#0;a&#0;&#0;&#0;  &#0;f  &#0;ca&#0;h&#0;e&#0;&#0;  e&#0;e&#0;ci&#0;e&#0;                  procedures  with approved  brokers  or  dealers who  provide                  financing  for  the  purpose  of (or  who  otherwise  facilitate)  the                                16                                                                    

 

                                                                                                exercise of Awards consistent with applicable laws and the express                        authorization of the Administrator.          6.7  International Awards.  One or more Awards may be granted to Eligible Persons        who provide services to the Company or one of its Subsidiaries outside of the United        States. Any Awards granted to such persons may, if deemed necessary or advisable by        the Administrator, be granted pursuant to the terms and conditions of any applicable sub -       plans, if any, appended to this Plan and approved by the Administrator.          6.8  Dividend and Dividend Equivalents.  Notwithstanding anything to the contrary        herein, in no event may accrued dividends or dividend equivalents with respect to any        Award issued under the Plan be paid prior to the vesting of the Award to which they        relate.    7.    EFFECT OF TERMINATION OF SERVICE ON AWARDS             7.1  Termination of Employment.                  7.1.1 Administrator  Determination.  The  Administrator  shall  establish  the             effect of a termination of employment or service on the rights and benefits under             each Award under this Plan and in so doing may make distinctions based upon,             inter alia, the cause of termination and type of Award. If the Participant is not an             employee of the Company or one of its Subsidiaries and provides other services to             the Company or one of its Subsidiaries, the Administrator shall be the sole judge             for purposes of this Plan (unless a contract or the Award Agreement otherwise             provides) of whether the Participant continues to render services to the Company             or one of its Subsidiaries and the date, if any, upon which such services shall be             deemed to have terminated.               7.1.2 General.  For any Award  issued  under  the  Plan,  unless  the  Award             Agreement provides otherwise, the portion of such Award that is unvested at the             time that a Partici&#0;a&#0;&#0;&#0;&#0; e&#0;&#0;&#0;&#0;&#0;&#0;e&#0;&#0; &#0;&#0; &#0;e&#0;&#0;ice i&#0; &#0;e&#0;&#0;i&#0;a&#0;ed for any or no reason             shall be forfeited and reacquired by the Company; provided however, that the             Administrator may provide, by rule or regulation or in any Award Agreement, or             may determine in any individual case, that such forfeiture requirement shall be             waived in whole or in part.              7.1.3 Stock  Options  and SARs.  For Awards of Options or SARs, unless the             Award  Agreement  provides otherwise, the exercise period of such Options or             SARs shall expire:                     a.   three (3) months after the last day that the Participant is employed                        by, or  provides  services  to, the  Company  or its Subsidiaries                        (provided  however, &#0;ha&#0; i&#0; &#0;he e&#0;e&#0;&#0; &#0;f &#0;he Pa&#0;&#0;ici&#0;a&#0;&#0;&#0;&#0; dea&#0;h                        during this period, those persons entitled to exercise the Option or                        SAR pursuant to the laws of descent and distribution shall have                        one (1) year following the date of &#0;he Pa&#0;&#0;ici&#0;a&#0;&#0;&#0;&#0; death within                        which to exercise such Option or SAR);                                       17                                                                          

 

                                                                               b.   twelve  (12) months  after  the  last  day  that  the  Participant  is                  employed by, or provides services to, the Company or a Subsidiary                  in the case of a Participant whose termination of employment or                  service is due to death or Disability; and               c.   i&#0;&#0;edia&#0;e&#0;&#0; &#0;&#0;&#0;&#0; a Pa&#0;&#0;ici&#0;a&#0;&#0;&#0;&#0; &#0;e&#0;&#0;i&#0;a&#0;i&#0;&#0; f&#0;&#0; Ca&#0;&#0;e.         The  Administrator  will,  in  its  absolute  discretion,  determine the effect of all       matters and questions relating to a termination of a Pa&#0;&#0;ici&#0;a&#0;&#0;&#0;&#0; employment or       service, including, but not limited to, the question of whether a leave of absence       constitutes a termination of employment or service and whether a Partici&#0;a&#0;&#0;&#0;&#0;       termination is for Cause.    7.2  Events Not Deemed Terminations of Service.  Unless the express policy of the  Company  or any  of its  Subsidiaries  or  the  Administrator  otherwise  provides,  the  employment relationship shall not be considered terminated in the case of (a) sick leave,  (b) military leave, or (c) any other paid leave of absence authorized by the Company or  one of its Subsidiaries, or the Administrator. In the case of any employee of the Company  or  one of its Subsidiaries on an approved leave of absence, continued vesting of the  Award while on leave from the employ of the Company or one of its Subsidiaries may be  suspended until the employee returns to service, unless the Administrator otherwise  provides or applicable law otherwise requires. In no event shall an Award be exercised  after the expiration of the term set forth in the Award Agreement.   7.3  Change in Time Commitment.  I&#0; &#0;he e&#0;e&#0;&#0; a Pa&#0;&#0;ici&#0;a&#0;&#0;&#0;&#0; &#0;eg&#0;&#0;a&#0; &#0;e&#0;e&#0; &#0;f &#0;i&#0;e  commitment  in  the  performance  of  his  or  her  services  for the  Company  or  any  Subsidiaries is reduced (for example, and without limitation, if the Participant is an  employee of the Company and the Participant has a change in status from full-time to  part-time or takes an extended leave of absence) after the date of grant of any Award, the  Administrator,  in its sole discretion, may (a)  make  a  corresponding  reduction in the  number of shares or cash amount subject to any portion of such Award that is scheduled  to vest or become payable after the date of such change in time commitment, and (b) in  lieu of or in combination with such a reduction, extend the vesting schedule applicable to  such Award (in accordance with Section 409A, as applicable). In the event of any such  reduction, the Participant will have no right with respect to any portion of the Award that  is so amended.   7.4  Effect of Change of Subsidiary Status.  For purposes of this Plan and any Award,  if an entity ceases to be a Subsidiary of the Company, a termination of employment or  service shall be deemed to have occurred with respect to each Eligible Person in respect  of  such  Subsidiary  who  does  not  continue  as  an  Eligible  Person  in respect of the  Company  or  another  Subsidiary  that  continues  as  such  after  giving  effect  to  the  transaction or other event giving rise to the change in status.                                  18                                                                    

 

                                                                          8.    ADJUSTMENTS; ACCELERATION             8.1  Adjustments.  Upon  or  in  contemplation  of  (a) any  reclassification,        recapitalization, stock split (including a stock split in the form of a stock dividend) or        reverse stock split, (b) any merger, arrangement, combination, consolidation, or other        reorganization, (c) any spin-off, split-up, or similar extraordinary dividend distribution in        respect of the Common Stock (whether in the form of securities or property),  or (d) any        exchange of Common Stock or other securities of the Company, or any similar unusual or        extraordinary  corporate  event  or  transaction  affecting  the  Common  Stock,  the        Administrator  shall  in  such  manner,  to  such  extent  and  at  such  time  as  it  deems        appropriate and equitable in the circumstances (but subject to compliance with applicable        laws  and  stock  exchange  requirements)  proportionately  adjust  any  or  all  of  (1) the        number and type of shares of Common Stock (or other securities) that thereafter may be        made the subject of Awards (including the Share Limit and the limit on the number of        ISOs issuable under the Plan), (2) the number, amount and type of shares of Common        Stock (or other securities or property) subject to any or all outstanding Awards, (3) the        grant,  purchase or  exercise  price (which term includes the base price of any SAR or        similar  right)  of  any  or  all  outstanding  Awards,  and  (4) the  securities,  cash  or other        property  deliverable  upon  exercise  or  payment  of  any  outstanding  Awards.  Any        adjustment made pursuant to this Section 8.1 shall be made in a manner that, in the good        faith  determination  of  the  Administrator,  will  not  likely result in the imposition of        additional taxes or interest under Section 409A of the Code. With respect to any Award        of an ISO, the Administrator may make an adjustment that causes the Option to cease to        qualify as an ISO without the consent of the affected Participant. Any determinations        made  by  the  Administrator pursuant  to  this  Section 8.1 shall be final, binding and        conclusive. Except as expressly provided herein, no issuance by the Company of shares        of Common Stock of any class, or securities convertible into shares of Common Stock of        any class, shall affect, and no adjustment by reason thereof shall be made with respect to,        the number or price of shares of Common Stock subject to an Award.         8.2  Change in Control.  In the event of a Change in Control, the Administrator shall        provide for the assumption or substitution of all outstanding Awards by the surviving or        acquiring company or parent thereof, in a manner designed to comply with Section 409A        of the Code.  All assumed or substituted time-vested Awards shall continue to vest in        accordance with their original vesting terms; provided, however, that in the event the        Participant  is  terminated  without  Cause within 12 months following the Change in        Control, any then unvested portion of the Award shall vest in full.  All assumed or        substituted performance-vested Awards shall be measured on the date of the Change in        Control to determine the portion thereof that is earned based on performance through the        Change in Control, and the earned portion shall thereafter vest at the same time or times        as the award was originally scheduled to vest, except that such vesting shall be based on        &#0;he Pa&#0;&#0;ici&#0;a&#0;&#0;&#0;&#0; c&#0;&#0;&#0;i&#0;&#0;ed &#0;e&#0;&#0;ice &#0;i&#0;h &#0;he &#0;&#0;&#0;&#0;i&#0;i&#0;g &#0;&#0; ac&#0;&#0;i&#0;i&#0;g c&#0;&#0;&#0;a&#0;&#0; &#0;&#0; &#0;a&#0;e&#0;&#0;        thereof; provided, however, that in the event the Participant is terminated without Cause        within 12 months following the Change in Control, any then unvested portion of the        Award shall vest in full.  Notwithstanding the foregoing, in the event the surviving or        acquiring company does not assume the outstanding Awards or substitute similar stock        awards for those outstanding under the Plan as of the Change in Control, then (a) the                                      19                                                                          

 

                                                                                vesting of all Awards shall be accelerated in full immediately prior to such Change in        Control, with  all  performance  goals  or  other  vesting  criteria  applicable  to  any        performance-based Awards deemed achieved based on performance measured through         the  date  of  the  Change  in  Control,  and  (b) such outstanding Awards shall terminate        and/or  be  payable in  cash  or  property (determined  by  the  Administrator  in  its  sole        discretion) upon the occurrence of the Change in Control in a manner designed to comply        with Code Section 409A, and such payment may be subject to any escrow, earn-out or        other contingent or deferred payment arrangement that is contemplated by the Change in        Control.  The Administrator shall have the authority to take additional actions it deems        necessary or advisable in connection with the Change in Control transaction, and may        take different actions with respect to different Participants under the Plan, different        Awards under the Plan, and different portions of Awards granted under the Plan, in each        case to the extent not inconsistent with the terms and conditions of this Section 8.2.    9.    TAX PROVISIONS             9.1  Tax Withholding.  Upon any exercise, vesting, or payment of any Award, the        Company or one of its Subsidiaries shall have the right at its option to:               a.    &#0;e&#0;&#0;i&#0;e  &#0;he  Pa&#0;&#0;ici&#0;a&#0;&#0;  (&#0;&#0;  &#0;he  Pa&#0;&#0;ici&#0;a&#0;&#0;&#0;&#0;  &#0;e&#0;&#0;&#0;&#0;a&#0;  &#0;e&#0;&#0;e&#0;e&#0;&#0;a&#0;i&#0;e  &#0;&#0;                   beneficiary, as the case may be) to pay or provide for payment of at least                   the minimum amount of any taxes which the Company or its Subsidiar ies                   may be required to withhold with respect to such Award event or payment;                   or               b.    deduct from any amount otherwise payable in cash to the Participant (or                   &#0;he Pa&#0;&#0;ici&#0;a&#0;&#0;&#0;&#0; &#0;e&#0;&#0;&#0;&#0;a&#0; &#0;e&#0;&#0;e&#0;e&#0;&#0;a&#0;i&#0;e &#0;&#0; be&#0;eficia&#0;&#0;, a&#0; &#0;he ca&#0;e &#0;a&#0;                   be)  the  minimum  amount  of  any taxes  which  the  Company  or  its                   Subsidiaries  may  be  required  to  withhold  with  respect  to  such  cash                   payment.          In any case where a tax is required to be withheld in connection with the delivery of        shares of Common Stock under this Plan, the Administrator may in its sole discretion        (subject to Section 10.1)  grant  (either  at  the  time  of  the  Award  or  thereafter)  to  the        Participant the right to elect, pursuant to such rules and subject to such conditions as the        Administrator may establish, to have the Company reduce the number of shares to be        delivered  by  (or  otherwise  reacquire)  the  appropriate  number  of  shares, valued in a        consistent manner at their Fair Market Value or at the sales price in accordance with        authorized procedures  for  cashless  exercises, necessary  to  satisfy  the  applicable        withholding obligation on exercise, vesting or payment, not in excess of the maximum        &#0;&#0;a&#0;&#0;&#0;&#0;&#0;&#0; &#0;a&#0;e&#0; i&#0; &#0;he Pa&#0;&#0;ici&#0;a&#0;&#0;&#0;&#0; a&#0;&#0;&#0;icab&#0;e &#0;&#0;&#0;i&#0;dic&#0;i&#0;&#0;&#0;.          9.2  Requirement of Notification of Code Section 83(b) Election.  If any Participant        shall make an election under Section 83(b) of the Code (to include in gross income in the        year of transfer the amounts specified in Section 83(b) of the Code) or under a similar        provisions of the laws of a jurisdiction outside the United States, such Participant shall        notify  the  Company of such election within ten (10) days after filing notice of the                                      20                                                                          

 

                                                                                election with the Internal Revenue Service or other government authority, in addition to        any  filing  and  notification  required  pursuant  to  regulations  issued  under  Code        Section 83(b) or other applicable provision.          9.3  Requirement  of  Notification  of  Disqualifying  Disposition.  If  any Participant        shall make any disposition of shares of Common  Stock delivered to  the Participant        pursuant  to  the  exercise  of an  ISO  under  the  circumstances  described  in  Code        Section 421(b)  (relating  to  certain  disqualifying  dispositions),  such  Participant  shall        notify the Company of such disposition within ten (10) days thereof.    10.   OTHER PROVISIONS             10.1 Compliance with Laws.  This Plan, the granting and vesting of Awards under this        Plan, the offer, issuance and delivery of shares of Common Stock, the payment of money        under this Plan or under Awards are subject to compliance with all applicable federal and        state laws, rules and regulations and to such approvals by any applicable stock exchange        listing, regulatory or governmental authority as may, in the opinion of the counsel for the        Company, be necessary or advisable in connection therewith. The person acquiring any        securities under this Plan will, if requested by the Company or any of its Subsidiaries,        provide such assurances and representations to the Company or any of its Subsidiaries as        the  Administrator  may  deem  necessary  or  desirable  to  assure  compliance  with  all        applicable legal and accounting requirements.          10.2 Future  Awards/Other  Rights.  No person shall have any claim or rights to be        granted an Award (or additional Awards, as the case may be) under this Plan, subject to        any  express  contractual  rights (set  forth  in  a  document  other  than  this  Plan)  to  the        contrary.          10.3 No Employment/Service Contract.  Nothing contained in this Plan or in any other        documents under this Plan or in any Award Agreement shall confer upon any Eligible        Person or other Participant any right to continue in the employ or other service of the        Company or any of its Subsidiaries, constitute any contract or agreement of employment        &#0;&#0; &#0;&#0;he&#0; &#0;e&#0;&#0;ice &#0;&#0; affec&#0; a&#0; e&#0;&#0;&#0;&#0;&#0;ee&#0;&#0; &#0;&#0;a&#0;&#0;&#0; a&#0; a&#0; e&#0;&#0;&#0;&#0;&#0;ee a&#0;-will, nor shall interf ere        in  any  way with the  right  of  the  Company  or i&#0;&#0;  S&#0;b&#0;idia&#0;ie&#0;  &#0;&#0;  cha&#0;ge  a  &#0;e&#0;&#0;&#0;&#0;&#0;&#0;        compensation or other benefits, or to terminate his or her employment or other service,        with or without Cause. Nothing in this Section 10.3, however, is intended to adversely        affect any express independent right of such person under a separate employment or        service contract other than an Award Agreement.          10.4 Plan Not Funded.  Awards payable under this Plan shall be payable in shares of        Common Stock or from the general assets of the Company, and no special or separate        reserve, fund or deposit shall be made to assure payment of such Awards. No Participant,        beneficiary or other person shall have any right, title or interest in any fund or in any        specific asset  (including  shares  of Common  Stock,  except  as  expressly  otherwise        provided) of the Company or any of its Subsidiaries by reason of any Award hereunder.        Neither the provisions of this Plan or of any related documents, nor the creation or        adoption of this Plan, nor any action taken pursuant to the provisions of this Plan shall                                      21                                                                          

 

                                                                    create, or be construed to create, a trust of any kind or a fiduciary relationship between  the Company or any of its Subsidiaries and any Participant, beneficiary or other pe rson.  To the extent that a Participant, beneficiary or other person acquires a right to receive  payment pursuant to any Award hereunder, such right shall be no greater than the right of  any unsecured general creditor of the Company.    10.5 Effective Date, Termination and Suspension, Amendments.            10.5.1 Effective Date and Termination.  This Plan was approved by the Board       and shall become effective upon approval by the stockholders of the Company.       Unless earlier terminated by the Board, this Plan shall terminate at the close of       business five (5) years after the date on which it was approved by the Board. After       the termination of this Plan either upon such stated expiration date or its earlier       termination by the Board, no additional Awards may be granted under this Pla n,       but  previously  granted  Awards (and  the  authority of the Administrator with       respect  thereto,  including  the authority to amend such Awards) shall remain       outstanding in accordance with their applicable terms and conditions and the       terms and conditions of this Plan.         10.5.2 Amendment;  Termination.  The  Board may, at any time, terminate or,       from time to time, amend, modify or suspend this Plan, in whole or in part. No       Awards may be granted during any period that the Board suspends this Plan.         10.5.3 Stockholder Approval.  To the extent then required by applicable law or       any  applicable  stock  exchange rule or  required  to  preserve  the  intended  tax       consequences of this Plan, or deemed necessary or advisable by the Board, this       Plan  and  any  amendment  to  this  Plan  shall  be  subject  to approval  by  the       stockholders of the Company.         10.5.4 Amendments to Awards.  Without limiting any other express authority of       the  Administrator  under  (but  subject  to)  the  express  limits  of  this Plan, the       Administrator may by agreement or resolution waive conditions of or limitations       on  Awards  to  Participants  that  the  Administrator  in  the  prior  exercise  of  its       discretion has imposed, without the consent of a Participant, and (subject to the       requirements of Sections 3.2 and 10.5.5) may make other changes to the terms       and conditions of Awards. Any amendment or other action that would constitute a       repricing  of  an Award is subject to the limitations and stockholder approval       requirements set forth in Section 1.1g.         10.5.5 Limitations  on  Amendments  to  Plan  and  Awards.  No  amendment,       suspension or termination of this Plan or change of or affecting any outstanding       Award  shall,  without  written  consent of the Participant, affect in any manner       materially adverse to the Participant any rights or benefits of the Participant or       obligations of the Company under any Award granted under this Plan. Changes,       settlements and other actions contemplated by Section 8 shall not be deemed to       constitute changes or amendments for purposes of this Section 10.5.5.                                  22                                                                    

 

                                                                    10.6 Privileges of Stock Ownership.  Except as otherwise expressly authorized b y th e  Administrator or this Plan, a Participant shall not be entitled to any privilege of stock  ownership as to any shares of Common Stock not actually delivered to and held of record  by the Participant. Except as expressly provided herein, no adjustment will be made f or  dividends or other rights as a stockholder of the Company for which a record date is prior  to such date of delivery.    10.7 Governing Law; Severability; Construction.            10.7.1 Choice of Law.  This Plan, the Awards, all documents evidencing Awards       and all other related documents shall be governed by, and construed in accordance       with the laws of the State of Delaware.         10.7.2 Severability.  If a court of competent jurisdiction holds any provision of       this Plan invalid and unenforceable, the remaining provisions of this Plan shall       continue in effect and the Plan shall be construed and enforced without regard to       the illegal or invalid provision.         10.7.3 Plan Construction.                  a.   Rule 16b-3.  It is the intent of the Company that the Awards and                  transactions permitted by the Awards be interpreted in a manner                  that,  in  the  case  of  Participants who are or may be subject to                  Section 16 of the Exchange Act, qualify, to the maximum extent                  compatible with the express terms of the Award, for exemption                  from matching liability under Rule 16b-3 promulgated under the                  Exchange Act. Notwithstanding the foregoing, the Company shall                  have no liability to any Participant for Section 16 consequences of                  Awards or events under Awards if an Award or event does not so                  qualify.               b.   Compliance  with Section 409A of the Code.  The Board intends                  that, except as may be otherwise determined by the Administrator,                  any Awards under the Plan will be either exempt from, or satisfy                  the requirements of, Section 409A to avoid the imposition of any                  taxes, including additional income or penalty taxes, thereunder. If                  the Administrator determines that an Award, Award Agreement,                  acceleration,  adjustment  to  the  terms  of  an  Award,  payment,                  distribution,  deferral election, transaction or any other action or                  arrangement contemplated by the provisions of the Plan would, if                  &#0;&#0;de&#0;&#0;a&#0;e&#0;, ca&#0;&#0;e a Pa&#0;&#0;ici&#0;a&#0;&#0;&#0;&#0; A&#0;a&#0;d &#0;&#0; violate Section  409A,                  unless  the  Administrator  expressly  determines  otherwise, such                  Award,  Award  Agreement,  payment,  acceleration,  adjustment,                  distribution,  deferral  election,  transaction  or other  action  or                  arrangement shall not be undertaken and the related provisions of                  the Plan and/or Award Agreement will be deemed modified or, if                  necessary, rescinded in order to comply with the requirements of                                23                                                                    

 

                                                                                    Section 409A to  the  extent  determined  by  the  Administrator                  without the consent of or notice to the Participant. Notwithstanding                  the  foregoing,  neither  the  Company nor the Administrator shall                  have any obligation to take any action to prevent the assessment of                  any excise tax or penalty on any Participant under Section 409A.                c.   No  Guarantee  of  Favorable  Tax  Treatment.  Although  the                  Company intends that Awards under the Plan will be exempt from,                  or  will  comply  with,  the  requirements of Section 409A of the                  Code, the Company does not warrant that any Award under the                  Plan will qualify for favorable tax treatment under Section 409A of                  the Code or any other provision of federal, state, local or f oreign                  law. The Company shall not be liable to any Participant for any                  tax, interest or penalties the Participant might owe as a result of the                  grant, holding, vesting, exercise or payment of any Award under                  the Plan.    10.8 Stock-Based Awards in Substitution for Stock Options or Awards Granted by  Other Corporation.  Awards may be granted to Eligible Persons in substitution f or or in  connection with an assumption of employee stock options, stock appreciation right,  restricted stock or other stock-based awards granted by other entities to persons who are  or who will become Eligible Persons in respect of the Company or one of its Subsidiaries,  in connection with a distribution, arrangement, business combination, merger or other  reorganization by or with the granting entity or an affiliated entity, or the acquisition by  the Company or one of its Subsidiaries, directly or indirectly, of all or a substantial part  of the stock or assets of the employing entity. The Awards so granted need not comply  with other specific terms of this Plan, provided the Awards reflect only adjustments  giving effect to the assumption or substitution consistent with the conversion applicable  to the Common Stock in the transaction and any change in the issuer of the security. Any  shares that are delivered and any Awards that are granted by, or become obligations of,  the Company, as a result of the assumption by the Company of, or in substitution for,  outstanding Awards previously granted by an acquired company (or previously granted  by a predecessor employer (or direct or indirect parent thereof) in the case of persons that  become  employed  by  the  Company  or  one of its Subsidiaries in connection with a  business or asset acquisition or similar transaction) shall not be counted against the Share  Limit or other limits on the number of shares available for issuance under this Plan,  except as may otherwise be provided by the Administrator at the time of such assumption  or substitution or as may be required to comply with the requirements of any applicable  stock exchange.    10.9 Non-Exclusivity of Plan.  Nothing in this Plan shall limit or be deemed to limit  the authority of the Board or the Administrator to grant Awards or authorize any other  compensation, with or without reference to the Common Stock, under any other plan or  authority.    10.10 No  Corporate  Action  Restriction.  The  existence  of  this Plan,  the Award  Agreements and the Awards granted hereunder shall not limit, affect or restrict in any                                24                                                                    

 

                                                                    way the right or power of the Board or the stockholders of the Company to make or  authorize:  (a) any adjustment, recapitalization, reorganization or other  change in the  capital  structure or  business  of  the  Company  or  any  Subsidiary,  (b) any  merger,  arrangement,  business  combination,  amalgamation,  consolidation  or  change  in  the  ownership of the Company or any Subsidiary, (c) any issue of bonds, debentures, capital,  preferred or prior preference stock ahead of or affecting the capital stock (or the rights  thereof)  of  the  Company  or any Subsidiary, (d) any dissolution or liquidation of the  Company or any Subsidiary, (e) any sale or transfer of all or any part of the assets or  business of the Company or any Subsidiary, or (f) any other corporate act or proceeding  by the Company or any Subsidiary. No Participant, beneficiary or any other person shall  have any claim under any Award or Award Agreement against any member of the Board  or  the  Administrator,  or  the  Company  or  any  employees,  officers  or  agents  of  the  Company or any Subsidiary, as a result of any such action.    10.11 Other  Company  Benefit  and  Compensation  Programs.  Payments  and  other  benefits received by a Participant under an Award made pursuant to this Plan shall not be  dee&#0;ed a &#0;a&#0;&#0; &#0;f a Pa&#0;&#0;ici&#0;a&#0;&#0;&#0;&#0; c&#0;&#0;&#0;e&#0;&#0;a&#0;i&#0;&#0; f&#0;&#0; &#0;&#0;&#0;&#0;&#0;&#0;e&#0; &#0;f &#0;he de&#0;e&#0;&#0;i&#0;a&#0;i&#0;&#0; &#0;f  benefits under any other employee welfare or benefit plans or arrangements, if any,  provided by the Company or any Subsidiary, except where the Administrator expressly  otherwise provides or authorizes in writing, or except as otherwise specifically set forth  in  the  terms  and  conditions  of  such  other  employee  welfare  or  benefit  plan  or  arrangement. Awards under this Plan may be made in addition to, in combination with, as  alternatives to or in payment of grants, Awards or commitments under any other plans or  arrangements of the Company or its Subsidiaries.    10.12 Restrictive Covenants; Cause Forfeiture; Clawback Policy.            10.12.1  Restrictive Covenants.  The Company may retain the right in an Award       Agreement to cause a forfeiture of the gain realized by a Participant on account of       actions taken by the Participant in violation or breach of or in conflict with any       non-competition agreement, any agreement prohibiting solicitation of employees       of the Company or any Affiliate thereof or any confidentiality obligation or post-      employment cooperation agreement with respect to the Company or any Affiliate,       to the extent specified in such Award Agreement applicable to the Participant.         10.12.2  Annulment upon Termination for Cause.  The Administrator may annul       an Award if the Participant is an employee of the Company or an Affiliate thereof       and is terminated for Cause.         10.12.3  Awards Subject to Clawback.  Notwithstanding any other provision of       this Plan to the contrary, any Award granted or amount payable or paid under this       Plan shall be subject to the terms of any compensation recoupment policy then       applicable, if any, of the Company, to the extent the policy applies to such Award       or amount.  By accepting an Award or the payment of any amount under the Plan,       each  Pa&#0;&#0;ici&#0;a&#0;&#0;  ag&#0;ee&#0;  a&#0;d  c&#0;&#0;&#0;e&#0;&#0;&#0;  &#0;&#0;  &#0;he  C&#0;&#0;&#0;a&#0;&#0;&#0;&#0;  a&#0;&#0;&#0;ica&#0;i&#0;&#0;,       implementation and enforcement of (a) any such policy and (b) any provision of       applicable  law  relating  to cancellation, rescission, payback or recoupment of                                25                                                                    

 

                                                                                     compensation, and expressly agrees that the Company may take such actions as             are permitted under the policy or applicable law without further consent or action             being required by such Participant.  To the extent that the terms of this Plan and             the policy or applicable law conflict, then the terms of the policy or applicable             law shall prevail.         10.13 Captions.  Captions and headings are given to the sections and subsections of this        Plan solely as a convenience to facilitate reference. Such headings shall not be deemed in        any  way  material  or  relevant  to the construction or interpretation of this Plan or any        provision thereof.    As adopted by the Board of Directors of ServiceSource International, Inc. on March 5, 2020.                                        26

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