Document:

Form of Stock Option Agreement under the 2004 Stock Plan

 EXHIBIT 10.3B 
  
 TERCICA, INC. 
  
 2004 STOCK PLAN 
  
 STOCK OPTION AGREEMENT 
  
 Unless otherwise defined herein, the terms defined in the Plan shall have the same defined meanings in this Option Agreement. 
  

	I.	NOTICE OF STOCK OPTION GRANT 

  
 [Optionee’s Name and Address] 
  
 You have been granted an option to purchase Common Stock of the Company, subject to the terms and conditions of the Plan and this Option Agreement, as
follows: 
  

			
	 Grant Number
	 	  

		
	 Date of Grant
	 	  

		
	 Vesting Commencement Date
	 	  

		
	 Exercise Price per Share
	 	 $

		
	 Total Number of Shares Granted
	 	  

		
	 Total Exercise Price
	 	 $

		
	 Type of Option:
	 	  _____ Incentive Stock Option
		
	 	 	  _____ Nonstatutory Stock Option
		
	 Term/Expiration Date:
	 	  

  
 Vesting
Schedule: 
  
 This Option may be exercised, in whole or in
part, in accordance with the following schedule: 
  
 [25% of
the Shares subject to the Option shall vest twelve months after the Vesting Commencement Date, and 1/48 of the Shares subject to the Option shall vest each month thereafter, subject to the Optionee continuing to be a Service Provider on such dates].

 Termination Period: 
  
 This Option may be exercised for [three months] after Optionee ceases to be a Service Provider. Upon the death or
Disability of the Optionee, this Option may be exercised for [twelve months] after Optionee ceases to be a Service Provider. In no event shall this Option be exercised later than the Term/Expiration Date as provided above. 
  

	II.	AGREEMENT 

  
 A.    Grant of Option. 
  
 The Plan Administrator of the Company hereby grants to the Optionee named in the Notice of Grant attached as Part I of this Agreement (the
“Optionee”) an option (the “Option”) to purchase the number of Shares, as set forth in the Notice of Grant, at the exercise price per share set forth in the Notice of Grant (the “Exercise Price”), subject to the terms
and conditions of the Plan, which is incorporated herein by reference. Subject to Section 17 of the Plan, in the event of a conflict between the terms and conditions of the Plan and the terms and conditions of this Option Agreement, the terms and
conditions of the Plan shall prevail. 
  
 If
designated in the Notice of Grant as an Incentive Stock Option (“ISO”), this Option is intended to qualify as an Incentive Stock Option under Section 422 of the Code. However, if this Option is intended to be an Incentive Stock Option, to
the extent that it exceeds the $100,000 rule of Code Section 422(d) it shall be treated as a Nonstatutory Stock Option (“NSO”). 
  
 B.    Exercise of Option. 
  
 (a)    Right to Exercise.    This Option is exercisable during its term in accordance with
the Vesting Schedule set out in the Notice of Grant and the applicable provisions of the Plan and this Option Agreement. 
  
 (b)    Method of Exercise.    This Option is exercisable by delivery of an exercise notice,
in the form attached as Exhibit A (the “Exercise Notice”), which shall state the election to exercise the Option, the number of Shares in respect of which the Option is being exercised (the “Exercised Shares”), and such other
representations and agreements as may be required by the Company pursuant to the provisions of the Plan. The Exercise Notice shall be completed by the Optionee and delivered to [title] of the Company. The Exercise Notice shall be accompanied
by payment of the aggregate Exercise Price as to all Exercised Shares. This Option shall be deemed to be exercised upon receipt by the Company of such fully executed Exercise Notice accompanied by such aggregate Exercise Price. 
  
 No Shares shall be issued pursuant to the exercise of this
Option unless such issuance and exercise complies with Applicable Laws. Assuming such compliance, for income tax purposes the Exercised Shares shall be considered transferred to the Optionee on the date the Option is exercised with respect to such
Exercised Shares. 
  

 -2- 

 C.    Method of Payment. 
  
 Payment of the aggregate Exercise Price shall be by any of
the following, or a combination thereof, at the election of the Optionee: 
  
 1.    cash; 
  
 2.    check; 
  
 3.    consideration received by the Company under a cashless exercise program implemented by the Company in connection with the Plan; or 
  
 4.    surrender of other Shares which
(i) in the case of Shares acquired upon exercise of an option, have been owned by the Optionee for more than six (6) months on the date of surrender, and (ii) have a Fair Market Value on the date of surrender equal to the aggregate Exercise Price of
the Exercised Shares.  
  
 D.    Non-Transferability of Option. 
  
 This Option may not be transferred in any manner otherwise than by will or by the laws of descent or distribution and may be exercised during the lifetime of Optionee only by the Optionee. The terms of the Plan and
this Option Agreement shall be binding upon the executors, administrators, heirs, successors and assigns of the Optionee. 
  
 E.    Term of Option. 
  
 This Option may be exercised only within the term set out in the Notice of Grant, and may be exercised during such term only in accordance
with the Plan and the terms of this Option Agreement. 
  
 F.    Tax Consequences. 
  
 Some of the federal tax consequences relating to this Option, as of the date of this Option, are set forth below. THIS SUMMARY IS NECESSARILY INCOMPLETE, AND THE TAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE. THE
OPTIONEE SHOULD CONSULT A TAX ADVISER BEFORE EXERCISING THIS OPTION OR DISPOSING OF THE SHARES. 
  
 G.    Exercising the Option. 
  
 1.    Nonstatutory Stock Option.    The Optionee may incur regular federal income tax
liability upon exercise of a NSO. The Optionee will be treated as having received compensation income (taxable at ordinary income tax rates) equal to the excess, if any, of the Fair Market Value of the Exercised Shares on the date of exercise over
their aggregate Exercise Price. If the Optionee is an Employee or a former Employee, the Company will be required to withhold from his or her compensation or collect from Optionee and pay to the applicable taxing authorities an amount in cash equal
to a percentage of this compensation income at the time of exercise, and may refuse to honor the exercise and refuse to deliver Shares if such withholding amounts are not delivered at the time of exercise. 
  

 -3- 

 2.    Incentive Stock Option.    If this
Option qualifies as an ISO, the Optionee will have no regular federal income tax liability upon its exercise, although the excess, if any, of the Fair Market Value of the Exercised Shares on the date of exercise over their aggregate Exercise Price
will be treated as an adjustment to alternative minimum taxable income for federal tax purposes and may subject the Optionee to alternative minimum tax in the year of exercise. In the event that the Optionee ceases to be an Employee but remains a
Service Provider, any Incentive Stock Option of the Optionee that remains unexercised shall cease to qualify as an Incentive Stock Option and will be treated for tax purposes as a Nonstatutory Stock Option on the date three (3) months and one (1)
day following such change of status. 
  
 3.     Disposition of Shares. 
  
 (a)    NSO.    If the Optionee holds NSO Shares for at least one year, any gain realized on disposition of the Shares will be treated as long-term capital gain for
federal income tax purposes. 
  
 (b)    ISO.    If the Optionee holds ISO Shares for at least one year after exercise and two years after the grant date, any gain realized on disposition of the Shares will be treated as
long-term capital gain for federal income tax purposes. If the Optionee disposes of ISO Shares within one year after exercise or two years after the grant date, any gain realized on such disposition will be treated as compensation income (taxable at
ordinary income rates) to the extent of the excess, if any, of the lesser of (A) the difference between the Fair Market Value of the Shares acquired on the date of exercise and the aggregate Exercise Price, or (B) the difference between the sale
price of such Shares and the aggregate Exercise Price. Any additional gain will be taxed as capital gain, short-term or long-term depending on the period that the ISO Shares were held. 
  
 (c)    Notice of Disqualifying Disposition of ISO
Shares.    If the Optionee sells or otherwise disposes of any of the Shares acquired pursuant to an ISO on or before the later of (i) two years after the grant date, or (ii) one year after the exercise date, the Optionee
shall immediately notify the Company in writing of such disposition. The Optionee agrees that he or she may be subject to income tax withholding by the Company on the compensation income recognized from such early disposition of ISO Shares by
payment in cash or out of the current earnings paid to the Optionee. 
  
 H.    Entire Agreement; Governing Law. 
  
 The Plan is incorporated herein by reference. The Plan and this Option Agreement constitute the entire agreement of the parties with respect to the subject matter hereof and supersede in their entirety all prior
undertakings and agreements of the Company and Optionee with respect to the subject matter hereof, and may not be modified adversely to the Optionee’s interest except by means of a writing signed by the Company and Optionee. This agreement is
governed by the internal substantive laws, but not the choice of law rules, of California. 
  
 I.     NO GUARANTEE OF CONTINUED SERVICE. 
  
 OPTIONEE ACKNOWLEDGES AND AGREES THAT THE VESTING OF SHARES PURSUANT TO THE VESTING SCHEDULE HEREOF IS EARNED ONLY BY CONTINUING AS A
SERVICE PROVIDER AT THE WILL OF THE COMPANY (AND NOT THROUGH THE ACT OF BEING HIRED, BEING GRANTED AN OPTION OR PURCHASING 
  

 -4- 

 SHARES HEREUNDER). OPTIONEE FURTHER ACKNOWLEDGES AND AGREES THAT THIS AGREEMENT, THE TRANSACTIONS CONTEMPLATED HEREUNDER
AND THE VESTING SCHEDULE SET FORTH HEREIN DO NOT CONSTITUTE AN EXPRESS OR IMPLIED PROMISE OF CONTINUED ENGAGEMENT AS A SERVICE PROVIDER FOR THE VESTING PERIOD, FOR ANY PERIOD, OR AT ALL, AND SHALL NOT INTERFERE WITH OPTIONEE’S RIGHT OR THE
COMPANY’S RIGHT TO TERMINATE OPTIONEE’S RELATIONSHIP AS A SERVICE PROVIDER AT ANY TIME, WITH OR WITHOUT CAUSE. 
  
 By your signature and the signature of the Company’s representative below, you and the Company agree that this Option is granted under and governed
by the terms and conditions of the Plan and this Option Agreement. Optionee has reviewed the Plan and this Option Agreement in their entirety, has had an opportunity to obtain the advice of counsel prior to executing this Option Agreement and fully
understands all provisions of the Plan and Option Agreement. Optionee hereby agrees to accept as binding, conclusive and final all decisions or interpretations of the Administrator upon any questions relating to the Plan and Option Agreement.
Optionee further agrees to notify the Company upon any change in the residence address indicated below. 
  

			
	OPTIONEE:	 	  TERCICA, INC.
		
	  

 Signature
	 	  

   By

		
	  

 Print
Name
	 	  

   Title

		
	  

 Residence
Address
	 	 
		
	  

	 	 

  

 -5- 

 EXHIBIT A 
  
 TERCICA, INC. 
  
 2004 STOCK PLAN 
  
 EXERCISE NOTICE 
  
 Tercica, Inc. 
 651 Gateway Boulevard 
 Suite 950

 South San Francisco, California 94080 
  
 Attention: [Title] 
  
 1.    Exercise of Option.    Effective as of today, ______________, ______, the undersigned
(“Purchaser”) hereby elects to purchase __________ shares (the “Shares”) of the Common Stock of Tercica, Inc. (the “Company”) under and pursuant to the 2004 Stock Plan (the “Plan”) and the Stock Option
Agreement dated, ________ (the “Option Agreement”). The purchase price for the Shares shall be $______, as required by the Option Agreement. 
  
 2.    Delivery of Payment.    Purchaser herewith delivers to the Company the full purchase price for the
Shares. 
  
 3.    Representations of
Purchaser.    Purchaser acknowledges that Purchaser has received, read and understood the Plan and the Option Agreement and agrees to abide by and be bound by their terms and conditions. 
  
 4.    Rights as
Shareholder.    Until the issuance (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company) of the Shares, no right to vote or receive dividends or any other
rights as a shareholder shall exist with respect to the Optioned Stock, notwithstanding the exercise of the Option. The Shares so acquired shall be issued to the Optionee as soon as practicable after exercise of the Option. No adjustment will be
made for a dividend or other right for which the record date is prior to the date of issuance, except as provided in Section 3 of the Plan. 
  
 5.    Tax Consultation.    Purchaser understands that Purchaser may suffer adverse tax consequences as a
result of Purchaser’s purchase or disposition of the Shares. Purchaser represents that Purchaser has consulted with any tax consultants Purchaser deems advisable in connection with the purchase or disposition of the Shares and that Purchaser is
not relying on the Company for any tax advice. 

 6.    Entire Agreement; Governing Law.    The Plan and
Option Agreement are incorporated herein by reference. This Agreement, the Plan and the Option Agreement constitute the entire agreement of the parties with respect to the subject matter hereof and supersede in their entirety all prior undertakings
and agreements of the Company and Purchaser with respect to the subject matter hereof, and may not be modified adversely to the Purchaser’s interest except by means of a writing signed by the Company and Purchaser. This agreement is governed by
the internal substantive laws, but not the choice of law rules, of California. 
  

			
	 Submitted by:
  
 PURCHASER:
	 	   Accepted by:
  
   TERCICA, INC.

		
	  

 Signature
	 	  

   By

		
	  

 Print Name
                            Its
	 	  

		
	 Address:
  

  

	 	   Address:
  
   TERCICA, INC.
  
   651 Gateway Boulevard
   Suite 950
   South San Francisco, California 94080
  
  

   Date Received

  

 -2-2004 Employee Stock Purchase Plan

 EXHIBIT 10.4A 
  
 TERCICA, INC. 
  
 2004 EMPLOYEE STOCK PURCHASE PLAN 
  
 The following constitutes the provisions of the 2004 Employee Stock Purchase Plan of Tercica, Inc. 
  
 1. Purpose. The purpose of the Plan is to provide Employees with an
opportunity to purchase Common Stock through accumulated payroll deductions. It is the intention of the Company to have the Plan qualify as an “employee stock purchase plan” under Section 423 of the Code. The provisions of the Plan,
accordingly, shall be construed so as to extend and limit Plan participation in a manner that is consistent with the requirements of that section of the Code. 
  

2. Definitions. 
  
 (a) “Administrator” means the Board or any committee thereof designated by the Board in accordance with Section 14.

  
 (b) “Board” means the Board
of Directors of the Company. 
  
 (c)
“Change in Control” means the occurrence of any of the following events: 
  
 (i) Any “person” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act) becomes the “beneficial owner”
(as defined in Rule 13d-3 of the Exchange Act), directly or indirectly, of securities of the Company representing fifty percent (50%) or more of the total voting power represented by the Company’s then outstanding voting securities; or

  
 (ii) The consummation of the sale or
disposition by the Company of all or substantially all of the Company’s assets; or 
  
 (iii) The consummation of a merger or consolidation of the Company, with any other corporation, other than a merger or consolidation which
would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity or its parent) at least fifty
percent (50%) of the total voting power represented by the voting securities of the Company, or such surviving entity or its parent outstanding immediately after such merger or consolidation. 
  
 (iv) A change in the composition of the Board, as a result
of which fewer than a majority of the Directors are Incumbent Directors. “Incumbent Directors” means Directors who either (A) are Directors as of the effective date of the Plan (pursuant to Section 23), or (B) are elected, or nominated for
election, to the Board with the affirmative votes of at least a majority of those Directors whose election or nomination was not in connection with any transaction described in subsections (i), (ii) or (iii) or in connection with an actual or
threatened proxy contest relating to the election of Directors of the Company. 

 (d) “Code” means the Internal Revenue Code of 1986, as amended. Any
reference to a section of the Code herein shall be a reference to any successor or amended section of the Code. 
  
 (e) “Common Stock” means the common stock of the Company. 
  
 (f) “Company” means Tercica, Inc., a Delaware corporation. 
  
 (g) “Compensation” means an Employee’s
base straight time gross earnings, commissions (to the extent such commissions are an integral, recurring part of compensation), overtime and shift premium, but exclusive of payments for incentive compensation, bonuses and other compensation.

  
 (h) “Designated Subsidiary”
means any Subsidiary that has been designated by the Administrator from time to time in its sole discretion as eligible to participate in the Plan. 
  
 (i) “Director” means a member of the Board. 
  
 (j) “Employee” means any individual who is a common law employee of an Employer and is
customarily employed for at least twenty (20) hours per week and more than five (5) months in any calendar year by the Employer. For purposes of the Plan, the employment relationship shall be treated as continuing intact while the individual is on
sick leave or other leave of absence approved by the Employer. Where the period of leave exceeds ninety (90) days and the individual’s right to reemployment is not guaranteed either by statute or by contract, the employment relationship shall
be deemed to have terminated on the 91st day of such leave. 
  
 (k) “Employer” means any one or all of the Company and its Designated Subsidiaries. 
  
 (l) “Enrollment Date” means the first Trading Day of each Offering Period. 
  
 (m) “Exchange Act” means the Securities
Exchange Act of 1934, as amended, including the rules and regulations promulgated thereunder. 
  
 (n) “Exercise Date” means the first Trading Day on or after May 15 and November 15 of each year. The first Exercise Date
under the Plan shall be May 17, 2004. 
  
 (o)
“Fair Market Value” means, as of any date, the value of Common Stock determined as follows: 
  
 (i) If the Common Stock is listed on any established stock exchange or a national market system, including without limitation the Nasdaq
National Market or The Nasdaq SmallCap Market of The Nasdaq Stock Market, its Fair Market Value shall be the closing sales price for the Common Stock (or the closing bid, if no sales were reported) as quoted on such exchange or system on the date of
determination, as reported in The Wall Street Journal or such other source as the Administrator deems reliable, or; 
  

 -2- 

 (ii) If the Common Stock is regularly quoted by a recognized securities dealer but
selling prices are not reported, its Fair Market Value shall be the mean of the closing bid and asked prices for the Common Stock on the date of determination, as reported in The Wall Street Journal or such other source as the Administrator
deems reliable, or; 
  
 (iii) In the absence of
an established market for the Common Stock, its Fair Market Value shall be determined in good faith by the Administrator, or; 
  
 (iv) For purposes of the Enrollment Date of the first Offering Period under the Plan, the Fair Market Value shall be the initial price to
the public as set forth in the final prospectus deemed to be included within the registration statement on Form S-1 filed with the Securities and Exchange Commission for the initial public offering of the Common Stock (the “Registration
Statement”). 
  
 (p) “Offering
Periods” means the periods of approximately twenty-four (24) months during which an option granted pursuant to the Plan may be exercised, commencing on the first Trading Day on or after May 15 and November 15 of each year and terminating on
the first Trading Day on or after the May 15 and November 15 Offering Period commencement date approximately twenty-four months later; provided, however, that the first Offering Period under the Plan shall commence with the first Trading Day on or
after the date on which the Securities and Exchange Commission declares the Company’s Registration Statement effective and ending on the first Trading Day on or after the earlier of (i) November 15, 2005 or (ii) twenty-seven (27) months from
the beginning of the first Offering Period; and provided, further, that the second Offering Period under the Plan shall commence on May 17, 2004. The duration and timing of Offering Periods may be changed pursuant to Section 4 of this Plan.

  
 (q) “Parent” means a
“parent corporation,” whether now or hereafter existing, as defined in Section 424(e) of the Code. 
  
 (r) “Plan” means this 2004 Employee Stock Purchase Plan. 
  
 (s) “Purchase Period” means the approximately six (6) month period commencing on one
Exercise Date and ending with the next Exercise Date, except that the first Purchase Period of any Offering Period shall commence on the Enrollment Date and end with the next Exercise Date. 
  
 (t) “Purchase Price” means an amount equal
to eighty-five percent (85%) of the Fair Market Value of a share of Common Stock on the Enrollment Date or on the Exercise Date, whichever is lower; provided however, that the Purchase Price may be adjusted by the Administrator pursuant to Section
20. 
  
 (u) “Subsidiary” means a
“subsidiary corporation,” whether now or hereafter existing, as defined in Section 424(f) of the Code. 
  
 (v) “Trading Day” means a day on which the U.S. national stock exchanges and the Nasdaq System are open for trading.

  

 -3- 

 3. Eligibility. 
  
 (a) First Offering Period. Any individual who is an Employee immediately prior to the first Offering
Period under the Plan shall be automatically enrolled in the first Offering Period. 
  
 (b) Subsequent Offering Periods. Any individual who is an Employee as of the Enrollment Date of any future Offering Period shall be
eligible to participate in such Offering Period, subject to the requirements of Section 5. 
  
 (c) Limitations. Any provisions of the Plan to the contrary notwithstanding, no Employee shall be granted an option under the Plan
(i) to the extent that, immediately after the grant, such Employee (or any other person whose stock would be attributed to such Employee pursuant to Section 424(d) of the Code) would own capital stock of the Company or any Parent or Subsidiary of
the Company and/or hold outstanding options to purchase such stock possessing five percent (5%) or more of the total combined voting power or value of all classes of the capital stock of the Company or of any Parent or Subsidiary of the Company, or
(ii) to the extent that his or her rights to purchase stock under all employee stock purchase plans (as defined in Section 423 of the Code) of the Company or any Parent or Subsidiary of the Company accrues at a rate which exceeds twenty-five
thousand dollars ($25,000) worth of stock (determined at the Fair Market Value of the stock at the time such option is granted) for each calendar year in which such option is outstanding at any time. 
  
 4. Offering Periods. The Plan shall be implemented by consecutive,
overlapping Offering Periods with a new Offering Period commencing on the first Trading Day on or after May 15 and November 15 of each year, or on such other date as the Administrator shall determine, and continuing thereafter until terminated in
accordance with Section 20; provided, however, that the first Offering Period under the Plan shall commence with the first Trading Day on or after the date on which the Securities and Exchange Commission declares the Company’s Registration
Statement effective and ending on the first Trading Day on or after the earlier of (i) November 15, 2005 or (ii) twenty-seven (27) months from the beginning of the first Offering Period; and provided, further, that the second Offering Period under
the Plan shall commence on May 17, 2004. The Administrator shall have the power to change the duration of Offering Periods (including the commencement dates thereof) with respect to future offerings without stockholder approval if such change is
announced prior to the scheduled beginning of the first Offering Period to be affected thereafter. 
  
 5. Participation. 
  
 (a) First Offering Period. An Employee who has become a participant in the first Offering Period under the Plan pursuant to Section
3(a) shall be entitled to continue his or her participation in such Offering Period only if he or she submits to the Company’s payroll office (or its designee) a properly completed subscription agreement authorizing payroll deductions in the
form provided by the Administrator for such purpose (i) no earlier than the effective date of the filing of the Company’s Registration Statement on Form S-8 with respect to the shares of Common Stock issuable under the Plan (the “Effective
Date”) and (ii) no later than five (5) business days from the Effective Date (the “Enrollment Window”). A participant’s failure to submit the subscription agreement during the Enrollment Window pursuant to this Section 5(a) shall
result in the automatic termination of his or her participation in the first Offering Period under the Plan. 
  

 -4- 

 (b) Subsequent Offering Periods. An Employee who is eligible to participate in the
Plan pursuant to Section 3(b) may become a participant by (i) submitting to the Company’s payroll office (or its designee), on or before a date prescribed by the Administrator prior to an applicable Enrollment Date, a properly completed
subscription agreement authorizing payroll deductions in the form provided by the Administrator for such purpose, or (ii) following an electronic or other enrollment procedure prescribed by the Administrator. 
  
 6. Payroll Deductions. 
  
 (a) At the time a participant enrolls in the Plan pursuant
to Section 5, he or she shall elect to have payroll deductions made on each payday during the Offering Period in an amount not exceeding 10% of the Compensation which he or she receives on each such payday. 
  
 (b) Payroll deductions authorized by a participant shall
commence on the first payday following the Enrollment Date and shall end on the last payday in the Offering Period to which such authorization is applicable, unless sooner terminated by the participant as provided in Section 10; provided, however,
that for the first Offering Period under the Plan, payroll deductions shall commence on the first payday on or following the end of the Enrollment Window. 
  
 (c) All payroll deductions made for a participant shall be credited to his or her account under the Plan and shall be withheld in whole
percentages only. A participant may not make any additional payments into such account. 
  
 (d) A participant may discontinue his or her participation in the Plan as provided in Section 10, or may change the rate of his or her
payroll deductions during the Offering Period by (i) properly completing and submitting to the Company’s payroll office (or its designee), on or before a date prescribed by the Administrator prior to an applicable Exercise Date, a new
subscription agreement authorizing the change in payroll deduction rate in the form provided by the Administrator for such purpose, or (ii) following an electronic or other procedure prescribed by the Administrator; provided, however, that a
participant may only make one payroll deduction change during each Purchase Period. If a participant has not followed such procedures to change the rate of payroll deductions, the rate of his or her payroll deductions shall continue at the
originally elected rate throughout the Offering Period and future Offering Periods (unless terminated as provided in Section 10). The Administrator may, in its sole discretion, limit the nature and/or number of payroll deduction rate changes that
may be made by participants during any Offering Period. Any change in payroll deduction rate made pursuant to this Section 6(d) shall be effective as of the first full payroll period following five (5) business days after the date on which the
change is made by the participant (unless the Administrator, in its sole discretion, elects to process a given change in payroll deduction rate more quickly). 
  

(e) Notwithstanding the foregoing, to the extent necessary to comply with Section 423(b)(8) of the Code and Section 3(c), a
participant’s payroll deductions may be decreased to zero percent (0%) at any time during a Purchase Period. Payroll deductions shall recommence at the rate originally elected by the participant effective as of the beginning of the first
Purchase Period which is scheduled to end in the following calendar year, unless terminated by the participant as provided in Section 10. 
  

 -5- 

 (f) At the time the option is exercised, in whole or in part, or at the time some or all
of the Company’s Common Stock issued under the Plan is disposed of, the participant must make adequate provision for the Company’s federal, state, or other tax withholding obligations, if any, which arise upon the exercise of the option or
the disposition of the Common Stock. At any time, the Company may, but shall not be obligated to, withhold from the participant’s compensation the amount necessary for the Company to meet applicable withholding obligations, including any
withholding required to make available to the Company any tax deductions or benefits attributable to the sale or early disposition of Common Stock by the Employee. 
  
 7. Grant of Option. On the Enrollment Date of each Offering Period, each Employee participating in such Offering
Period shall be granted an option to purchase on each Exercise Date during such Offering Period (at the applicable Purchase Price) up to a number of shares of Common Stock determined by dividing such participant’s payroll deductions accumulated
prior to such Exercise Date and retained in the participant’s account as of the Exercise Date by the applicable Purchase Price; provided that in no event shall a participant be permitted to purchase during each Purchase Period more than 1,000
shares of Common Stock (subject to any adjustment pursuant to Section 19), and provided further that such purchase shall be subject to the limitations set forth in Sections 3(c) and 13. The Employee may accept the grant of such option (i) with
respect to the first Offering Period under the Plan, by submitting a properly completed subscription agreement in accordance with the requirements of Section 5(a) on or before the last day of the Enrollment Window, and (ii) with respect to any
future Offering Period under the Plan, by electing to participate in the Plan in accordance with the requirements of Section 5(b). The Administrator may, for future Offering Periods, increase or decrease, in its absolute discretion, the maximum
number of shares of Common Stock that a participant may purchase during each Purchase Period of such Offering Period. Exercise of the option shall occur as provided in Section 8, unless the participant has withdrawn pursuant to Section 10. The
option shall expire on the last day of the Offering Period. 
  
 8.
Exercise of Option. 
  
 (a) Unless a
participant withdraws from the Plan as provided in Section 10, his or her option for the purchase of shares of Common Stock shall be exercised automatically on the Exercise Date, and the maximum number of full shares subject to option shall be
purchased for such participant at the applicable Purchase Price with the accumulated payroll deductions in his or her account. No fractional shares of Common Stock shall be purchased; any payroll deductions accumulated in a participant’s
account which are not sufficient to purchase a full share shall be retained in the participant’s account for the subsequent Purchase Period or Offering Period, subject to earlier withdrawal by the participant as provided in Section 10. Any
other monies left over in a participant’s account after the Exercise Date shall be returned to the participant. During a participant’s lifetime, a participant’s option to purchase shares hereunder is exercisable only by him or her.

  
 (b) Notwithstanding any contrary Plan
provision, if the Administrator determines that, on a given Exercise Date, the number of shares of Common Stock with respect to which options are to be exercised may exceed (i) the number of shares of Common Stock that were available for sale under
the Plan on the Enrollment Date of the applicable Offering Period, or (ii) the number of shares of Common Stock available for sale under the Plan on such Exercise Date, the Administrator may in its sole discretion (x) provide that the Company shall
make a pro rata allocation of the shares 
  

 -6- 

 
of Common Stock available for purchase on such Enrollment Date or Exercise Date, as applicable, in as uniform a manner as shall be practicable and as it
shall determine in its sole discretion to be equitable among all participants exercising options to purchase Common Stock on such Exercise Date, and continue all Offering Periods then in effect, or (y) provide that the Company shall make a pro rata
allocation of the shares of Common Stock available for purchase on such Enrollment Date or Exercise Date, as applicable, in as uniform a manner as shall be practicable and as it shall determine in its sole discretion to be equitable among all
participants exercising options to purchase Common Stock on such Exercise Date, and terminate any or all Offering Periods then in effect pursuant to Section 20. The Company may make pro rata allocation of the shares of Common Stock available on the
Enrollment Date of any applicable Offering Period pursuant to the preceding sentence, notwithstanding any authorization of additional shares of Common Stock for issuance under the Plan by the Company’s shareholders subsequent to such Enrollment
Date. 
  
 9. Delivery. As soon as administratively
practicable after each Exercise Date on which a purchase of shares of Common Stock occurs, the Company shall arrange the delivery to each participant, as appropriate, the shares purchased upon exercise of his or her option in a form determined by
the Administrator (in its sole discretion) and pursuant to rules established by the Administrator. No participant shall have any voting, dividend, or other shareholder rights with respect to shares of Common Stock subject to any option granted under
the Plan until such shares have been purchased and delivered to the participant as provided in this Section 9. 
  
 10. Withdrawal. 
  
 (a) Under procedures established by the Administrator, a participant may withdraw all but not less than all the payroll deductions
credited to his or her account and not yet used to exercise his or her option under the Plan at any time by (i) submitting to the Company’s payroll office (or its designee) a written notice of withdrawal in the form prescribed by the
Administrator for such purpose, or (ii) following an electronic or other withdrawal procedure prescribed by the Administrator. All of the participant’s payroll deductions credited to his or her account shall be paid to such participant as
promptly as practicable after the effective date of his or her withdrawal and such participant’s option for the Offering Period shall be automatically terminated, and no further payroll deductions for the purchase of shares shall be made for
such Offering Period. If a participant withdraws from an Offering Period, payroll deductions shall not resume at the beginning of the succeeding Offering Period unless the participant re-enrolls in the Plan in accordance with the provisions of
Section 5. 
  
 (b) A participant’s
withdrawal from an Offering Period shall not have any effect upon his or her eligibility to participate in any similar plan which may hereafter be adopted by the Company or in succeeding Offering Periods which commence after the termination of the
Offering Period from which the participant withdraws. 
  
 11.
Termination of Employment. Upon a participant’s ceasing to be an Employee, for any reason, he or she shall be deemed to have elected to withdraw from the Plan and the payroll deductions credited to such participant’s account during
the Offering Period but not yet used to purchase shares of Common Stock under the Plan shall be returned to such participant or, in the case of his or her death, to the person or persons entitled thereto under Section 15, and such participant’s
option shall be automatically terminated. The preceding sentence notwithstanding, a participant who 
  

 -7- 

 
receives payment in lieu of notice of termination of employment shall be treated as continuing to be an Employee for the participant’s customary number
of hours per week of employment during the period in which the participant is subject to such payment in lieu of notice. 
  
 12. Interest. No interest shall accrue on the payroll deductions of a participant in the Plan. 
  
 13. Stock. 
  
 (a) Subject to adjustment upon changes in capitalization of
the Company as provided in Section 19, the maximum number of shares of Common Stock which shall be made available for sale under the Plan shall be 100,000 shares of Common Stock plus an annual increase to be added on the first day of the
Company’s fiscal year beginning in fiscal year 2005, equal to the lesser of (i) 125,000 shares of Common Stock, (ii) 0.5% of the outstanding shares of Common Stock on such date or (iii) an amount determined by the Board. 
  
 (b) Shares of Common Stock to be delivered to a participant
under the Plan shall be registered in the name of the participant or in the name of the participant and his or her spouse. 
  
 14. Administration. The Board or a committee of members of the Board who shall be appointed from time to time by, and shall serve at the pleasure
of, the Board, shall administer the Plan. The Administrator shall have full and exclusive discretionary authority to construe, interpret and apply the terms of the Plan, to determine eligibility, to adjudicate all disputed claims filed under the
Plan and to establish such procedures that it deems necessary for administration of the Plan (including, without limitation, to adopt such procedures and sub-plans as are necessary or appropriate to permit the participation in the Plan by employees
who are foreign nationals or employed outside the United States). The Administrator, in its sole discretion and on such terms and conditions as it may provide, may delegate to one or more individuals all or any part of its authority and powers under
the Plan. Every finding, decision and determination made by the Administrator (or its designee) shall, to the full extent permitted by law, be final and binding upon all parties. 
  
 15. Designation of Beneficiary. 
  
 (a) A participant may designate a beneficiary who is to receive any shares of Common Stock and cash, if any,
from the participant’s account under the Plan in the event of such participant’s death subsequent to an Exercise Date on which the option is exercised but prior to delivery to such participant of such shares and cash. In addition, a
participant may designate a beneficiary who is to receive any cash from the participant’s account under the Plan in the event of such participant’s death prior to exercise of the option. If a participant is married and the designated
beneficiary is not the spouse, spousal consent shall be required for such designation to be effective. 
  
 (b) Such designation of beneficiary may be changed by the participant at any time. In the event of the death of a participant and in the
absence of a beneficiary validly designated under the Plan who is living at the time of such participant’s death, the Company shall deliver such shares and/or cash to the executor or administrator of the estate of the participant, or if no such
executor or administrator has been appointed (to the knowledge of the Company), the Company, in its discretion, may deliver such shares and/or cash to the spouse or to any one or more dependents or relatives of the participant, or if no spouse,
dependent or relative is known to the Company, then to such other person as the Company may designate. 
  

 -8- 

 (c) All beneficiary designations under this Section 15 shall be made in such form and
manner as the Administrator may prescribe from time to time. 
  
 16. Transferability. Neither payroll deductions credited to a participant’s account nor any rights with regard to the exercise of an option or to receive shares of Common Stock under the Plan may be assigned, transferred,
pledged or otherwise disposed of in any way (other than by will, the laws of descent and distribution or as provided in Section 15) by the participant. Any such attempt at assignment, transfer, pledge or other disposition shall be without effect,
except that the Company may treat such act as an election to withdraw from an Offering Period in accordance with Section 10. 
  
 17. Use of Funds. All payroll deductions received or held by the Company under the Plan may be used by the Company for any corporate purpose, and
the Company shall not be obligated to segregate such payroll deductions. Until shares of Common Stock are issued under the Plan (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the
Company), a participant shall only have the rights of an unsecured creditor with respect to such shares. 
  
 18. Reports. Individual accounts shall be maintained for each participant in the Plan. Statements of account shall be given to participating
Employees at least annually, which statements shall set forth the amounts of payroll deductions, the Purchase Price, the number of shares of Common Stock purchased and the remaining cash balance, if any. 
  
 19. Adjustments, Dissolution, Liquidation or Change in Control.

  
 (a) Adjustments. In the event that any
dividend or other distribution (whether in the form of cash, Common Stock, other securities, or other property), recapitalization, stock split, reverse stock split, reorganization, merger, consolidation, split-up, spin-off, combination, repurchase,
or exchange of Common Stock or other securities of the Company, or other change in the corporate structure of the Company affecting the Common Stock such that an adjustment is determined by the Administrator (in its sole discretion) to be
appropriate in order to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under the Plan, then the Administrator shall, in such manner as it may deem equitable, adjust the number and class of Common
Stock which may be delivered under the Plan, the Purchase Price per share and the number of shares of Common Stock covered by each option under the Plan which has not yet been exercised, and the numerical limits of Sections 7 and 13. 
  
 (b) Dissolution or Liquidation. In the event of the
proposed dissolution or liquidation of the Company, the Offering Period then in progress shall be shortened by setting a new Exercise Date (the “New Exercise Date”), and shall terminate immediately prior to the consummation of such
proposed dissolution or liquidation, unless provided otherwise by the Board. The New Exercise Date shall be before the date of the Company’s proposed dissolution or liquidation. The Board shall notify each participant in writing, at least ten
(10) business days prior to the New Exercise Date, that the Exercise Date for the participant’s option has been changed to the New Exercise Date and that the participant’s option shall be exercised automatically on the New Exercise Date,
unless prior to such date the participant has withdrawn from the Offering Period as provided in Section 10. 
  

 -9- 

 (c) Change in Control. In the event of a Change in Control, each outstanding
option shall be assumed or an equivalent option substituted by the successor corporation or a Parent or Subsidiary of the successor corporation. In the event that the successor corporation refuses to assume or substitute for the option, any Purchase
Periods then in progress shall be shortened by setting a new Exercise Date (the “New Exercise Date”) and any Offering Periods then in progress shall end on the New Exercise Date. The New Exercise Date shall be before the date of the
Company’s proposed Change in Control. The Board shall notify each participant in writing, at least ten (10) business days prior to the New Exercise Date, that the Exercise Date for the participant’s option has been changed to the New
Exercise Date and that the participant’s option shall be exercised automatically on the New Exercise Date, unless prior to such date the participant has withdrawn from the Offering Period as provided in Section 10. 
  
 20. Amendment or Termination. 
  
 (a) The Administrator may at any time and for any reason
terminate or amend the Plan. Except as provided in Section 19, no such termination can affect options previously granted under the Plan, provided that an Offering Period may be terminated by the Administrator on any Exercise Date if the
Administrator determines that the termination or suspension of the Plan is in the best interests of the Company and its stockholders. Except as provided in Section 19 and this Section 20, no amendment may make any change in any option theretofore
granted which adversely affects the rights of any participant. To the extent necessary to comply with Section 423 of the Code (or any successor rule or provision or any other applicable law, regulation or stock exchange rule), the Company shall
obtain stockholder approval in such a manner and to such a degree as required. 
  
 (b) Without stockholder consent and without regard to whether any participant rights may be considered to have been “adversely
affected,” the Administrator shall be entitled to change the Offering Periods, limit the frequency and/or number of changes in the amount withheld during an Offering Period, establish the exchange ratio applicable to amounts withheld in a
currency other than U.S. dollars, permit payroll withholding in excess of the amount designated by a participant in order to adjust for delays or mistakes in the Company’s processing of properly completed withholding elections, establish
reasonable waiting and adjustment periods and/or accounting and crediting procedures to ensure that amounts applied toward the purchase of Common Stock for each participant properly correspond with amounts withheld from the participant’s
Compensation, and establish such other limitations or procedures as the Administrator determines in its sole discretion advisable which are consistent with the Plan. 
  
 (c) In the event the Administrator determines that the ongoing operation of the Plan may result in
unfavorable financial accounting consequences, the Board may, in its discretion and, to the extent necessary or desirable, modify or amend the Plan to reduce or eliminate such accounting consequence including, but not limited to: 
  
 (i) altering the Purchase Price for any Offering Period
including an Offering Period underway at the time of the change in Purchase Price; 
  

 -10- 

 (ii) shortening any Offering Period so that Offering Period ends on a new Exercise Date,
including an Offering Period underway at the time of the Board action; and 
  
 (iii) allocating shares. 
  
 Such modifications or
amendments shall not require stockholder approval or the consent of any Plan participants. 
  
 21. Notices. All notices or other communications by a participant to the Company under or in connection with the Plan shall be deemed to have been duly given when received in the form specified by the Company
at the location, or by the person, designated by the Company for the receipt thereof. 
  
 22. Conditions Upon Issuance of Shares. Shares of Common Stock shall not be issued with respect to an option under the Plan unless the exercise of such option and the issuance and delivery of such shares
pursuant thereto shall comply with all applicable provisions of law, domestic or foreign, including, without limitation, the Securities Act of 1933, as amended, including the rules and regulations promulgated thereunder, the Exchange Act and the
requirements of any stock exchange upon which the shares may then be listed, and shall be further subject to the approval of counsel for the Company with respect to such compliance. 
  
 As a condition to the exercise of an option, the Company may require the person exercising such option to represent and
warrant at the time of any such exercise that the shares are being purchased only for investment and without any present intention to sell or distribute such shares if, in the opinion of counsel for the Company, such a representation is required by
any of the aforementioned applicable provisions of law. 
  
 23.
Term of Plan. Contingent on its approval by the stockholders of the Company, the Plan shall become effective following its adoption by the Board and on the day immediately preceding the date of the Company’s firmly underwritten initial
public offering. It shall continue in effect until terminated under Section 20. 
  
 24. Automatic Transfer to Low Price Offering Period. To the extent permitted by any applicable laws, regulations, or stock exchange rules if the Fair Market Value of the Common Stock on any Exercise Date in an
Offering Period is lower than the Fair Market Value of the Common Stock on the Enrollment Date of such Offering Period, then all participants in such Offering Period shall be automatically withdrawn from such Offering Period immediately after the
exercise of their option on such Exercise Date and automatically re-enrolled in the immediately following Offering Period. 
  

 -11-

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00061-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00061-of-00352.parquet"}]]