Document:

Indemnification and Hold Harmless Agreement

 Exhibit 10.2 
 INDEMNIFICATION AND HOLD HARMLESS AGREEMENT 
 THIS INDEMNIFICATION AND HOLD HARMLESS AGREEMENT
(this “Agreement”) is made as of March 29, 2006, by and between W&T Offshore, Inc., a Texas corporation (the “Company”), and William Talafuse (“Indemnitee”). 
 WHEREAS, in order to incentivize Indemnitee to serve, or to continue to serve, as an officer of the Company (in any such case, the
“Service”), the Company has agreed to indemnify Indemnitee as set forth below; 
 NOW, THEREFORE, in consideration of the
foregoing and certain other good and valuable consideration, the receipt of which is hereby acknowledged, the parties, intending to be legally bound, hereby agree as follows: 
 1. Indemnification. Effective as of the original date of Indemnitee’s beginning Service, the Company shall indemnify Indemnitee and hold
Indemnitee harmless if the Indemnitee is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative, arbitrative or investigative, and in any appeal in such
action, suit or proceeding, and in any inquiry or investigation that could lead to such an action, suit or proceeding, against any and all liabilities, obligations (whether known or unknown, or due or to become due or otherwise), judgments, fines,
fees, penalties, interest obligations, deficiencies, other actual losses (for example, verifiable lost income related to time spent defending such claim or action) and reasonable expenses (including, without limitation amounts paid in settlement,
interest, court costs, costs of investigators, reasonable fees and expenses of attorneys, accountants, financial advisors and other experts) incurred or suffered by Indemnitee in connection with such action, suit or proceeding arising out of or
pertaining to any actual or alleged action or omission which arises out of or relates to the fact that Indemnitee is or was serving as a director or officer of the Company or at the request of the Company as a director, officer, trustee, employee,
or agent of or in any other capacity for another corporation, partnership, joint venture, trust or other enterprise, to the fullest extent permitted by then applicable law and the Company’s Articles of Incorporation and Bylaws, each as amended
(but in the case of any such amendment, only to the extent that such amendment permits the Company to provide the same or broader indemnification rights than permitted prior thereto) (each such liability, obligation, judgment, fine, fee, penalty,
interest obligation, deficiency, other actual losses, and reasonable expenses being referred to herein as a “Loss,” and collectively, as “Losses”). 
 2. Payment. Any Loss incurred by Indemnitee shall be paid in full by the Company on a regular, monthly basis. This indemnity applies even if the Indemnitee caused the Loss through his or her negligence, strict
liability or other fault; however, if any Losses for which Indemnitee received payment from the Company under this Agreement are determined by final judicial decision from which there is no further right to appeal, to have been caused by Indemnitee
under circumstances with respect to which indemnification is not permitted by applicable law or this Agreement (any such Loss, a “Non-Indemnification Loss”), Indemnitee shall repay to the Company such Losses paid on behalf of Indemnitee
hereunder. 
  

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 3. Term. The indemnification rights provided hereby to Indemnitee shall continue even though he or
she may have ceased to be a director, officer, trustee, employee, or agent of or in any other capacity for the applicable entity. 
 4.
Notice and Coverage Prior to Notice. Indemnitee shall give notice (the “Notice”) to the Company within five days after actual receipt of service or summons related to any action begun in respect of which indemnity may be
sought hereunder or actual notice of assertion of a claim with respect to which he seeks indemnification; provided, however, that the Indemnitee’s failure to give such notice to the Company within such time shall not relieve the Company from
any of its obligations under Section 1 of this Agreement except to the extent the Company has been materially prejudiced by Indemnitee’s failure to give such notice within such time period. Upon receipt of the Notice, the Company shall
assume the defense of such action, whereupon the Indemnitee shall not be liable for any reasonable fees or expenses of counsel for Indemnitee or any other Losses incurred thereafter with respect to the matters set forth in the Notice and the Company
shall reimburse the Indemnitee for all reasonable expenses related to the action or claim incurred by the Indemnitee prior to the Indemnitee’s giving of the Notice. 
 5. Non-Exclusivity. The rights of Indemnitee hereunder shall be in addition to any rights that Indemnitee may have under the Company’s governance documents (e.g. Articles of Incorporation, By-laws,
Articles of Organization, Regulations, etc.) (the “Governance Documents”), applicable law or otherwise and shall survive any termination, resignation, death or other dismissal of Indemnitee. No amendment or alteration of the Company’s
Governance Documents shall adversely affect Indemnitee’s rights under the Governance Documents or this Agreement. 
 6.
Insurance. To the extent the Company maintains, at its expense, an insurance policy or policies providing liability insurance with respect to the acts or omissions covered by this Agreement, Indemnitee shall be covered by such policy or
policies, in accordance with its or their terms, to the maximum extent of the coverage available there under. 
 7. Payment. The
Company shall not be liable to Indemnitee under this Agreement to make any payment in connection with any claim against Indemnitee to the extent the Indemnitee has otherwise actually received, and is entitled to retain, payment (under any insurance
policy or otherwise) of the amounts otherwise indemnifiable hereunder. 
 8. Enforceability. The indemnification contained in this
Agreement shall be binding upon and inure to the benefit of and be enforceable by the parties hereto and their respective successors, assigns (including any direct or indirect successor by purchase, merger, consolidation, liquidation or otherwise to
all or substantially all of the business and/or assets of the Company), spouses, heirs and personal and legal representatives. 
 9.
Binding Obligation. If this Agreement or any portion hereof shall be found to be invalid on any ground by any court of competent jurisdiction, then the Company shall nevertheless indemnify and hold harmless Indemnitee, as to costs, charges
and expenses (including court costs and attorneys’ fees), judgments, fines, penalties and amounts paid in settlement with respect to any action, suit or proceeding, whether civil, criminal, administrative, arbitrative or investigative, and in
any appeal in such action, suit or proceeding, and in any inquiry or investigation that could lead to such an action, suit or proceeding, to the full extent permitted by any applicable portion of this Agreement that shall not have been invalidated
and to the fullest extent permitted by applicable law. 
  

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 10. Governing Law; Venue. This Agreement shall be construed in accordance with and governed by the
laws of the State of Texas, without regard to the principles of conflicts of laws. The parties agree that any litigation directly or indirectly relating to this Agreement must be brought before and determined by a court of competent jurisdiction
within Harris County, Texas, and the parties hereby agree to waive any rights to object to, and hereby agree to submit to, the jurisdiction of such courts. 
 11. Right to Sue; Attorneys’ Fees and Costs. If a claim by Indemnitee for payment of Losses hereunder is not paid in full by the Company within forty-five (45) days after a written claim has been
delivered to the Company, Indemnitee may at any time thereafter bring suit against the Company to recover the unpaid amount of the claim. If successful in whole or in part in any such suit, Indemnitee shall be entitled to be paid also the reasonable
costs and expenses of prosecuting such suit. In any suit brought by Indemnitee to enforce any right hereunder (including, without limitation, the right to indemnification), the burden of proving that Indemnitee is not entitled to such right shall be
borne by the Company. If a claim by the Company for repayment of any Non-Indemnification Losses previously paid on behalf of Indemnitee hereunder is not repaid in full to the Company within forty-five (45) days after such ruling has been
delivered to Indemnitee, the Company may at any time thereafter bring suit against the Indemnitee to recover the unpaid amount. 
 12.
Successors and Assigns. This Agreement shall be binding upon and shall inure to the benefit of the heirs, successors and assigns of each party to this Agreement. 
 13. Amendment. This Agreement may be amended, modified or supplemented only by a written instrument executed by each of the parties hereto. 
 14. Facsimile and Counterpart Signature. This Agreement may be executed by facsimile signature and in one or more counterparts, each of which
shall for all purposes be deemed an original and all of which shall constitute the same instrument, but only one of which need be produced. 
  

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 IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date first above
written. 
  

			
	COMPANY
	
	W&T OFFSHORE, INC.
		
	By:	 	 /s/ Tracy W. Krohn

	Name:	 	Tracy W. Krohn
	Title:	 	President and CEO
	
	INDEMNITEE
	
	 /s/ William Talafuse

	William Talafuse

  

 Page 42006 Performance Incentive Plan and related agreements

 Exhibit 10.6 
 NORTHSTAR NEUROSCIENCE, INC. 
 2006 PERFORMANCE INCENTIVE PLAN 

 NORTHSTAR NEUROSCIENCE, INC. 
 2006 PERFORMANCE INCENTIVE PLAN 
  

	 	1.	ESTABLISHMENT, PURPOSE AND TERM OF PLAN.

 1.1 Establishment. The Northstar Neuroscience, Inc. 2006 Performance Incentive Plan (the
“Plan”) is hereby established effective as of the date of its approval by the shareholders of the Company (the “Effective Date”). Prior to the Effective Date, the Company
may implement a reverse stock split. Because this Plan is not effective until the Effective Date, any such reverse stock split will not affect any of the share numbers set forth in this Plan, except that the number of shares set forth in
Section 4.4 that may become available under this Plan shall be adjusted in connection with any such reverse stock split in accordance with the provisions of the Prior Plan. 
 1.2 Purpose. The purpose of the Plan is to advance the interests of the Participating Company Group and its
shareholders by providing an incentive to attract, retain and reward persons performing services for the Participating Company Group and by motivating such persons to contribute to the growth and profitability of the Participating Company Group. The
Plan seeks to achieve this purpose by providing for Awards in the form of Options, Stock Appreciation Rights, Restricted Stock Purchase Rights, Restricted Stock Bonuses, Restricted Stock Units, Performance Shares, Performance Units, Deferred
Compensation Awards, Cash-Based and Other Stock-Based Awards and Nonemployee Director Awards. 
 1.3 Term of Plan. The
Plan shall continue in effect until its termination by the Committee; provided, however, that all Awards shall be granted, if at all, within ten (10) years from the Effective Date. 
  

	 	2.	DEFINITIONS AND CONSTRUCTION. 

 2.1 Definitions. Whenever used herein, the following terms shall have their respective meanings set forth below: 
 (a) “Affiliate” means (i) an entity, other than a Parent Corporation, that directly, or indirectly through
one or more intermediary entities, controls the Company or (ii) an entity, other than a Subsidiary Corporation, that is controlled by the Company directly or indirectly through one or more intermediary entities. For this purpose, the term
“control” (including the term “controlled by”) means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of the relevant entity, whether through the ownership of voting
securities, by contract or otherwise; or shall have such other meaning assigned such term for the purposes of registration on Form S-8 under the Securities Act. 
 (b) “Award” means any Option, Stock Appreciation Right, Restricted Stock Purchase Right, Restricted Stock Bonus,
Restricted Stock Unit, Performance Share, Performance Unit, Deferred Compensation Award, Cash-Based Award, Other Stock-Based Award or Nonemployee Director Award granted under the Plan. 

 (c) “Award Agreement” means a written or electronic agreement
between the Company and a Participant setting forth the terms, conditions and restrictions of the Award granted to the Participant. 
 (d) “Board” means the Board of Directors of the Company. 
 (e) “Cash-Based
Award” means an Award denominated in cash and granted pursuant to Section 12. 
 (f)
“Cause” means, unless such term or an equivalent term is otherwise defined with respect to an Award by the Participant’s Award Agreement or by a written contract of employment or service, any of the following:
(i) the Participant’s theft, dishonesty, willful misconduct, breach of fiduciary duty for personal profit, or falsification of any Participating Company documents or records; (ii) the Participant’s material failure to abide by a
Participating Company’s code of conduct or other policies (including, without limitation, policies relating to confidentiality and reasonable workplace conduct); (iii) the Participant’s unauthorized use, misappropriation, destruction
or diversion of any tangible or intangible asset or corporate opportunity of a Participating Company (including, without limitation, the Participant’s improper use or disclosure of a Participating Company’s confidential or proprietary
information); (iv) any intentional act by the Participant which has a material detrimental effect on a Participating Company’s reputation or business; (v) the Participant’s repeated failure or inability to perform any reasonable
assigned duties after written notice from a Participating Company of, and a reasonable opportunity to cure, such failure or inability; (vi) any material breach by the Participant of any employment, service, non-disclosure, non-competition,
non-solicitation or other similar agreement between the Participant and a Participating Company, which breach is not cured pursuant to the terms of such agreement; or (vii) the Participant’s conviction (including any plea of guilty or nolo
contendere) of any criminal act involving fraud, dishonesty, misappropriation or moral turpitude, or which impairs the Participant’s ability to perform his or her duties with a Participating Company. 
 (g) “Change in Control” means, unless such term or an equivalent term is otherwise defined with respect to an
Award by the Participant’s Award Agreement or by a written contract of employment or service, the occurrence of any of the following: 
 (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 promulgated under the Exchange Act),
directly or indirectly, of securities of the Company representing more than fifty percent (50%) of the total combined voting power of the Company’s then-outstanding securities entitled to vote generally in the election of Directors;
provided, however, that the following acquisitions shall not constitute a Change in Control: (1) an acquisition by any such person who on the Effective Date is the beneficial owner of more than fifty percent (50%) of such voting power;
(2) any acquisition directly from the Company, including, without limitation, a public offering of securities; (3) any acquisition by the Company; (4) any acquisition by a trustee or other fiduciary under an employee benefit plan of a
Participating Company; or (5) any acquisition by an entity owned directly or indirectly by the shareholders of the Company in substantially the same proportions as their ownership of the voting securities of the Company; or 
  

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 (ii) an Ownership Change Event or series of related Ownership Change Events
(collectively, a “Transaction”) in which the shareholders of the Company immediately before the Transaction do not retain immediately after the Transaction direct or indirect beneficial ownership of more than
fifty percent (50%) of the total combined voting power of the outstanding securities entitled to vote generally in the election of Directors or, in the case of an Ownership Change Event described in Section 2.1(ee)(iii), the entity to
which the assets of the Company were transferred (the “Transferee”), as the case may be; or 
 (iii) a liquidation or dissolution of the Company; provided, however, that a Change in Control shall be deemed not to include a transaction described in subsections (i) or (ii) of this Section 2.1(g) in which a majority of
the members of the board of directors of the continuing, surviving or successor entity, or parent thereof, immediately after such transaction is comprised of Incumbent Directors. 
 For purposes of the preceding sentence, indirect beneficial ownership shall include, without limitation, an interest resulting from ownership of the
voting securities of one or more corporations or other business entities which own the Company or the Transferee, as the case may be, either directly or through one or more subsidiary corporations or other business entities. The Committee shall have
the right to determine whether multiple sales or exchanges of the voting securities of the Company or multiple Ownership Change Events are related, and its determination shall be final, binding and conclusive. 
 (h) “Code” means the Internal Revenue Code of 1986, as amended, and any applicable regulations promulgated
thereunder. 
 (i) “Committee” means the Compensation Committee and such other committee or
subcommittee of the Board, if any, duly appointed to administer the Plan and having such powers in each instance as shall be specified by the Board. If, at any time, there is no committee of the Board then authorized or properly constituted to
administer the Plan, the Board shall exercise all of the powers of the Committee granted herein, and, in any event, the Board may in its discretion exercise any or all of such powers. 
 (j) “Company” means Northstar Neuroscience, Inc., a Washington corporation, or any successor corporation thereto.

 (k) “Consultant” means a person engaged to provide consulting or advisory services (other than as
an Employee or Director) to a Participating Company, provided that the identity of such person, the nature of such services or the entity to which such services are provided would not preclude the Company from offering or selling securities to such
person pursuant to the Plan in reliance on registration on a Form S-8 Registration Statement under the Securities Act. 
 (l) “Covered Employee” means, at any time the Plan is subject to Section 162(m), any Employee who is or may become a “covered employee” as defined in Section 162(m), or any successor statute, and
who is designated, either as an individual Employee or a member of a class of Employees, by the Committee no later than (i) the date ninety (90) days after the beginning of the Performance Period, or (ii) the date on which twenty-five

  

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percent (25%) of the Performance Period has elapsed, as a “Covered Employee” under this Plan for such applicable Performance Period.

 (m) “Deferred Compensation Award” means an award granted to a Participant pursuant to
Section 11. 
 (n) “Director” means a member of the Board. 
 (o) “Disability” means the permanent and total disability of the Participant, within the meaning of
Section 22(e)(3) of the Code. 
 (p) “Dividend Equivalent Right” means the right of a
Participant, granted at the discretion of the Committee or as otherwise provided by the Plan, to receive a credit for the account of such Participant in an amount equal to the cash dividends paid on one share of Stock for each share of Stock
represented by an Award held by such Participant. 
 (q) “Employee” means any person treated as an
employee (including an Officer or Director who is also treated as an employee) in the records of a Participating Company and, with respect to any Incentive Stock Option granted to such person, who is an employee for purposes of Section 422 of
the Code; provided, however, that neither service as a Director nor payment of a director’s fee shall be sufficient to constitute employment for purposes of the Plan. The Company shall determine in good faith and in the exercise of its
discretion whether an individual has become or has ceased to be an Employee and the effective date of such individual’s employment or termination of employment, as the case may be. For purposes of an individual’s rights, if any, under the
terms of the Plan as of the time of the Company’s determination of whether or not the individual is an Employee, all such determinations by the Company shall be final, binding and conclusive as to such rights, if any, notwithstanding that the
Company or any court of law or governmental agency subsequently makes a contrary determination as to such individual’s status as an Employee. 
 (r) “Exchange Act” means the Securities Exchange Act of 1934, as amended. 
 (s) “Fair Market Value” means, as of any date, the value of a share of Stock or other property as determined by the Committee, in its discretion, or by the Company, in its discretion, if such determination is
expressly allocated to the Company herein, subject to the following: 
 (i) Except as otherwise determined by the Committee,
if, on such date, the Stock is listed on a national or regional securities exchange or market system, the Fair Market Value of a share of Stock shall be the closing price of a share of Stock (or the mean of the closing bid and asked prices of a
share of Stock if the Stock is so quoted instead) as quoted on the Nasdaq National Market, The Nasdaq SmallCap Market or such other national or regional securities exchange or market system constituting the primary market for the Stock, as reported
in The Wall Street Journal or such other source as the Company deems reliable. If the relevant date does not fall on a day on which the Stock has traded on such securities exchange or market system, the date on which the Fair Market Value
shall be established shall be the last day on 

  

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which the Stock was so traded prior to the relevant date, or such other appropriate day as shall be determined by the Committee, in its discretion.

 (ii) Notwithstanding the foregoing, the Committee may, in its discretion, determine the Fair Market Value on the basis of
the opening, closing, or average of the high and low sale prices of a share of Stock on such date, the preceding trading day or the next succeeding trading day; and, for purposes other than determining the exercise price or purchase price of shares
pursuant to an Award, the high or low sale price of a share of Stock on such date, the preceding trading day or the next succeeding trading day, the average of any such prices determined over a period of trading days or the actual sale price of a
share of Stock received by a Participant. The Committee may vary its method of determination of the Fair Market Value as provided in this Section for different purposes under the Plan. 
 (iii) If, on such date, the Stock is not listed on a national or regional securities exchange or market system, the Fair Market Value of
a share of Stock shall be as determined by the Committee in good faith without regard to any restriction other than a restriction which, by its terms, will never lapse. 
 (t) “Incentive Stock Option” means an Option intended to be (as set forth in the Award Agreement) and which
qualifies as an incentive stock option within the meaning of Section 422(b) of the Code. 
 (u) “Incumbent
Director” means a director who either (i) is a member of the Board as of the Effective Date or (ii) is elected to the Board with the affirmative votes of at least a majority of the Directors who were not elected in connection
with an actual or threatened proxy contest relating to the election of directors of the Company. 
 (v)
“Insider” means an Officer, Director or any other person whose transactions in Stock are subject to Section 16 of the Exchange Act. 
 (w) “Insider Trading Policy” means the written policy of the Company pertaining to the purchase, sale, transfer or
other disposition of the Company’s equity securities by Directors, Officers, Employees or other service providers who may possess material, nonpublic information regarding the Company or its securities. 
 (x) “Net-Exercise” means a procedure by which the Participant will be issued a number of shares of Stock
determined in accordance with the following formula: 
  

			
	N =	 	X(A-B)/A, where
		 	“N” = the number of shares of Stock to be issued to the Participant upon exercise of the Option;
		 	“X” = the total number of shares with respect to which the Participant has elected to exercise the Option;
		 	“A” = the Fair Market Value of one (1) share of Stock determined on the exercise date; and
		 	“B” = the exercise price per share (as defined in the Participant’s Award Agreement)

  

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 (y) “Nonemployee Director” means a Director who is not an
Employee. 
 (z) “Nonemployee Director Award” means a Nonstatutory Stock Option, Stock Appreciation
Right, Restricted Stock Award or Restricted Stock Unit Award granted to a Nonemployee Director pursuant to Section 13 of the Plan. 
 (aa) “Nonstatutory Stock Option” means an Option not intended to be (as set forth in the Award Agreement) an incentive stock option within the meaning of Section 422(b) of the Code.

 (bb) “Officer” means any person designated by the Board as an officer of the Company. 

(cc) “Option” means an Incentive Stock Option or a Nonstatutory Stock Option. 
 (dd) “Other Stock-Based Award” means an Award denominated in shares of Stock and granted pursuant to
Section 12. 
 (ee) “Ownership Change Event” means the occurrence of any of the following with
respect to the Company: (i) the direct or indirect sale or exchange in a single or series of related transactions by the shareholders of the Company of more than fifty percent (50%) of the voting stock of the Company; (ii) a merger or
share exchange in which the Company is a party; or (iii) the sale, exchange, or transfer of all or substantially all of the assets of the Company (other than a sale, exchange or transfer to one or more subsidiaries of the Company). 

(ff) “Parent Corporation” means any present or future “parent corporation” of the Company, as defined
in Section 424(e) of the Code. 
 (gg) “Participant” means any eligible person who has been
granted one or more Awards. 
 (hh) “Participating Company” means the Company or any Parent
Corporation, Subsidiary Corporation or Affiliate. 
 (ii) “Participating Company Group” means, at any
point in time, all entities collectively which are then Participating Companies. 
 (jj) “Performance
Award” means an Award of Performance Shares or Performance Units. 
 (kk) “Performance Award
Formula” means, for any Performance Award, a formula or table established by the Committee pursuant to Section 10.3 which provides the basis for computing the value of a Performance Award at one or more threshold levels of
attainment of the applicable Performance Goal(s) measured as of the end of the applicable Performance Period. 
  

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 (ll) “Performance-Based Compensation” means compensation under an
Award that satisfies the requirements of Section 162(m) for certain performance-based compensation paid to Covered Employees. 
 (mm) “Performance Goal” means a performance goal established by the Committee pursuant to Section 10.3. 
 (nn) “Performance Period” means a period established by the Committee pursuant to Section 10.3 at the end of which one or more Performance Goals are to be measured. 
 (oo) “Performance Share” means a right granted to a Participant pursuant to Section 10 to receive a payment
equal to the value of a Performance Share, as determined by the Committee, based on performance. 
 (pp)
“Performance Unit” means a right granted to a Participant pursuant to Section 10 to receive a payment equal to the value of a Performance Unit, as determined by the Committee, based upon performance. 
 (qq) “Prior Plan” means the Company’s 1999 Stock Option Plan. 
 (rr) “Restricted Stock Award” means an Award of a Restricted Stock Bonus or a Restricted Stock Purchase Right.

 (ss) “Restricted Stock Bonus” means Stock granted to a Participant pursuant to Section 8.

 (tt) “Restricted Stock Purchase Right” means a right to purchase Stock granted to a Participant
pursuant to Section 8. 
 (uu) “Restricted Stock Unit” or “Stock Unit”
means a right granted to a Participant pursuant to Section 9 or Section 11, respectively, to receive a share of Stock on a date determined in accordance with the provisions of such Sections, as applicable, and the Participant’s Award
Agreement. 
 (vv) “Rule 16b-3” means Rule 16b-3 under the Exchange Act, as amended from time to
time, or any successor rule or regulation. 
 (ww) “SAR” or “Stock Appreciation
Right” means a right granted to a Participant pursuant to Section 7 to receive payment, for each share of Stock subject to such SAR, of an amount equal to the excess, if any, of the Fair Market Value of a share of Stock on the date
of exercise of the SAR over the exercise price. 
 (xx) “Section 162(m)” means
Section 162(m) of the Code. 
 (yy) “Section 409A” means Section 409A of the Code
(including regulations or administrative guidelines thereunder). 
  

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 (zz) “Securities Act” means the Securities Act of 1933, as
amended. 
 (aaa) “Service” means a Participant’s employment or service with the Participating
Company Group, whether in the capacity of an Employee, a Director or a Consultant. Unless otherwise provided by the Committee, a Participant’s Service shall not be deemed to have terminated merely because of a change in the capacity in which
the Participant renders such Service or a change in the Participating Company for which the Participant renders such Service, provided that there is no interruption or termination of the Participant’s Service. Furthermore, a Participant’s
Service shall not be deemed to have terminated if the Participant takes any military leave, sick leave, or other bona fide leave of absence approved by the Company. However, if any such leave taken by a Participant exceeds ninety (90) days,
then on the ninety-first (91st) day following the commencement of such leave the Participant’s Service shall be deemed to have terminated, unless the Participant’s right to return to Service is guaranteed by statute or contract.
Notwithstanding the foregoing, unless otherwise designated by the Company or required by law, a leave of absence shall not be treated as Service for purposes of determining vesting under the Participant’s Award Agreement. A Participant’s
Service shall be deemed to have terminated either upon an actual termination of Service or upon the entity for which the Participant performs Service ceasing to be a Participating Company. Subject to the foregoing, the Company, in its discretion,
shall determine whether the Participant’s Service has terminated and the effective date of such termination. 
 (bbb)
“Stock” means the common stock of the Company, as adjusted from time to time in accordance with Section 4.6. 
 (ccc) “Subsidiary Corporation” means any present or future “subsidiary corporation” of the Company, as defined in Section 424(f) of the Code. 
 (ddd) “Ten Percent Owner” means a Participant who, at the time an Option is granted to the Participant, owns stock
possessing more than ten percent (10%) of the total combined voting power of all classes of stock of a Participating Company (other than an Affiliate) within the meaning of Section 422(b)(6) of the Code. 
 (eee) “Vesting Conditions” mean those conditions established in accordance with the Plan prior to the satisfaction
of which shares subject to an Award remain subject to forfeiture or a repurchase option in favor of the Company exercisable for the Participant’s purchase price for such shares upon the Participant’s termination of Service. 
 2.2 Construction. Captions and titles contained herein are for convenience only and shall not affect the meaning or interpretation
of any provision of the Plan. Except when otherwise indicated by the context, the singular shall include the plural and the plural shall include the singular. Use of the term “or” is not intended to be exclusive, unless the context clearly
requires otherwise. 
  

	 	3.	ADMINISTRATION. 

 3.1 Administration by the Committee. The Plan shall be administered by the Committee. All questions of interpretation of the Plan,
of any Award Agreement or of any other form of agreement or other document employed by the Company in the administration of 

  

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the Plan or of any Award shall be determined by the Committee, and such determinations shall be final, binding and conclusive upon all persons having an
interest in the Plan or such Award, unless fraudulent or made in bad faith. Any and all actions, decisions and determinations taken or made by the Committee in the exercise of its discretion pursuant to the Plan or Award Agreement or other agreement
thereunder (other than determining questions of interpretation pursuant to the preceding sentence) shall be final, binding and conclusive upon all persons having an interest therein. 
 3.2 Authority of Officers. Any Officer shall have the authority to act on behalf of the Company with respect to any matter, right,
obligation, determination or election which is the responsibility of or which is allocated to the Company herein, provided the Officer has apparent authority with respect to such matter, right, obligation, determination or election. The Board or
Committee may, in its discretion, delegate to a committee comprised of one or more Officers the authority to grant one or more Awards, without further approval of the Board or the Committee, to any Employee, other than a person who, at the time of
such grant, is an Insider or a Covered Person; provided, however, that (a) such Awards shall not be granted for shares in excess of the maximum aggregate number of shares of Stock authorized for issuance pursuant to Section 4.1,
(b) each such Award shall be subject to the terms and conditions of the appropriate standard form of Award Agreement approved by the Board or the Committee and shall conform to the provisions of the Plan, and (c) each such Award shall
conform to such limits and guidelines as shall be established from time to time by resolution of the Board or the Committee. 
 3.3 Powers of the Committee. In addition to any other powers set forth in the Plan and subject to the provisions of the Plan, the Committee shall have the full and final power and authority, in its discretion:

 (a) to determine the persons to whom, and the time or times at which, Awards shall be granted and the number of shares of
Stock, units or monetary value to be subject to each Award; 
 (b) to determine the type of Award granted; 
 (c) to determine the Fair Market Value of shares of Stock or other property; 
 (d) to determine the terms, conditions and restrictions applicable to each Award (which need not be identical) and any shares acquired
pursuant thereto, including, without limitation, (i) the exercise or purchase price of shares pursuant to any Award, (ii) the method of payment for shares purchased pursuant to any Award, (iii) the method for satisfaction of any tax
withholding obligation arising in connection with Award, including by the withholding or delivery of shares of Stock, (iv) the timing, terms and conditions of the exercisability or vesting of any Award or any shares acquired pursuant thereto,
(v) the Performance Measures, Performance Period, Performance Award Formula and Performance Goals applicable to any Award and the extent to which such Performance Goals have been attained, (vi) the time of the expiration of any Award,
(vii) the effect of the Participant’s termination of Service on any of the foregoing, and (viii) all other terms, conditions and 

  

 9 

 
restrictions applicable to any Award or shares acquired pursuant thereto not inconsistent with the terms of the Plan; 
 (e) to determine whether an Award will be settled in shares of Stock, cash, or in any combination thereof; 
 (f) to approve one or more forms of Award Agreement; 
 (g) to amend, modify, extend, cancel or renew any Award or to waive any restrictions or conditions applicable to any Award or any shares
acquired pursuant thereto; 
 (h) to accelerate, continue, extend or defer the exercisability or vesting of any Award or any
shares acquired pursuant thereto, including with respect to the period following a Participant’s termination of Service; 
 (i) without the consent of the affected Participant and notwithstanding the provisions of any Award Agreement to the contrary, to unilaterally substitute at any time a Stock Appreciation Right providing for settlement solely in shares of
Stock in place of any outstanding Option, provided that such Stock Appreciation Right covers the same number of shares of Stock and provides for the same exercise price (subject in each case to adjustment in accordance with Section 4.6) as the
replaced Option and otherwise provides substantially equivalent terms and conditions as the replaced Option, as determined by the Committee; 
 (j) to prescribe, amend or rescind rules, guidelines and policies relating to the Plan, or to adopt sub-plans or supplements to, or alternative versions of, the Plan, including, without limitation, as the Committee
deems necessary or desirable to comply with the laws or regulations of or to accommodate the tax policy, accounting principles or custom of, foreign jurisdictions whose citizens may be granted Awards; and 
 (k) to correct any defect, supply any omission or reconcile any inconsistency in the Plan or any Award Agreement and to make all other
determinations and take such other actions with respect to the Plan or any Award as the Committee may deem advisable to the extent not inconsistent with the provisions of the Plan or applicable law. 
 3.4 Compliance with Section 162(m). If the Company is a “publicly held corporation” within the meaning of
Section 162(m), the Board may establish a Committee of “outside directors” within the meaning of Section 162(m) to approve the grant of any Award intended to result in the payment of Performance-Based Compensation. 
 3.5 Administration with Respect to Insiders. With respect to participation by Insiders in the Plan, at any time that any class of
equity security of the Company is registered pursuant to Section 12 of the Exchange Act, the Plan shall be administered in compliance with the requirements, if any, of Rule 16b-3. 
 3.6 Indemnification. In addition to such other rights of indemnification as they may have as members of the Board or the Committee
or as officers or employees of the Participating Company Group, members of the Board or the Committee and any officers or employees of the Participating Company Group to whom authority to act for the Board, the 

  

 10 

 
Committee or the Company is delegated shall be indemnified by the Company against all reasonable expenses, including attorneys’ fees, actually and
necessarily incurred in connection with the defense of any action, suit or proceeding, or in connection with any appeal therein, to which they or any of them may be a party by reason of any action taken or failure to act under or in connection with
the Plan, or any right granted hereunder, and against all amounts paid by them in settlement thereof (provided such settlement is approved by independent legal counsel selected by the Company) or paid by them in satisfaction of a judgment in any
such action, suit or proceeding, except in relation to matters as to which it shall be adjudged in such action, suit or proceeding that such person is liable for gross negligence, bad faith or intentional misconduct in duties; provided, however,
that within sixty (60) days after the institution of such action, suit or proceeding, such person shall offer to the Company, in writing, the opportunity at its own expense to handle and defend the same. 
  

	 	4.	SHARES SUBJECT TO PLAN. 

 4.1 Maximum Number of Shares Issuable. Subject to adjustment as provided in Sections 4.2, 4.3, 4.4, and 4.6, the maximum
aggregate number of shares of Stock that may be issued under the Plan after the Effective Date shall be equal to Three Million (3,000,000) shares, and shall consist of authorized but unissued or reacquired shares of Stock or any combination
thereof. 
 4.2 Annual Increase in Maximum Number of Shares Issuable. Subject to adjustment as provided in
Section 4.6, the maximum aggregate number of shares of Stock that may be issued under the Plan as set forth in Section 4.1 shall be cumulatively increased on January 1, 2007 and on each subsequent January 1, through and including
January 1, 2015, by a number of shares (the “Annual Increase”) equal to the lesser of (i) two percent (2%) of the number of shares of Stock issued and outstanding on the immediately preceding
December 31 or (ii) One Million (1,000,000) shares. Notwithstanding the foregoing, the Board may act, prior to the first day of any calendar year, to increase the share reserve by a number of shares of Stock as the Board shall
determine, which number shall be less than each of (i) and (ii). 
 4.3 Share Accounting. If an outstanding Award
for any reason expires or is terminated or cancelled without having been exercised or settled in full, or if shares of Stock acquired pursuant to an Award subject to forfeiture or repurchase are forfeited or repurchased by the Company for an amount
not greater than the Participant’s purchase price, the shares of Stock allocable to the terminated portion of such Award or such forfeited or repurchased shares of Stock shall again be available for issuance under the Plan. Shares of Stock
shall not be deemed to have been issued pursuant to the Plan (a) with respect to any portion of an Award that is settled in cash or (b) to the extent such shares are withheld or reacquired by the Company in satisfaction of tax withholding
obligations pursuant to Section 17.2. Upon payment in shares of Stock pursuant to the exercise of a SAR, the number of shares available for issuance under the Plan shall be reduced only by the number of shares actually issued in such payment.
If the exercise price of an Option is paid by tender to the Company, or attestation to the ownership, of shares of Stock owned by the Participant, or by means of a Net-Exercise, the number of shares available for issuance under the Plan shall be
reduced by the net number of shares for which the Option is exercised. 
  

 11 

 4.4 Adjustment for Unissued Prior Plan Shares. The maximum aggregate number of
shares of Stock that may be issued under the Plan as set forth in Section 4.1 shall be cumulatively increased from time to time by: 
 (a) the number of shares of Stock subject to that portion of any option outstanding pursuant to the Prior Plan as of the Effective Date which, on or after the Effective Date, expires or is terminated or cancelled
without having been exercised; and 
 (b) the number of shares of Stock acquired pursuant to the Prior Plan subject to
forfeiture or repurchase by the Company at the Participant’s purchase price which, on or after the date of termination of the Prior Plan, is so forfeited or repurchased; provided, however, that the aggregate number of shares of Stock authorized
for issuance under the Prior Plan that may become authorized for issuance under the Plan pursuant to this Section 4.4 shall not exceed Three Million Ninety Two Thousand Nine Hundred Sixty-One (3,092,961) subject to adjustment as provided
in Section 4.6. 
 4.5 Maximum Number of Shares Issuable Pursuant to Incentive Stock Options. Subject to
adjustment as provided in Section 4.6, the maximum aggregate number of shares of Stock that may be issued under the Plan pursuant to the exercise of Incentive Stock Options shall not exceed Three Million (3,000,000), cumulatively increased on
January 1, 2007 and on each subsequent January 1, through and including January 1, 2015, by a number of shares equal to the smaller of the Annual Increase determined under Section 4.2 or Eight Million (8,000,000) shares. The
maximum aggregate number of shares of Stock that may be issued under the Plan pursuant to all Awards other than Incentive Stock Options shall be the number of shares determined in accordance with Section 4.1, subject to adjustment as provided
in Sections 4.2, 4.3, 4.4 and 4.6. 
 4.6 Adjustments for Changes in Capital Structure. Subject to
any required action by the shareholders of the Company, in the event of any change in the Stock effected without receipt of consideration by the Company after the Effective Date, whether through merger, share exchange, reorganization,
reincorporation, recapitalization, reclassification, stock dividend, stock split, reverse stock split, split-up, split-off, spin-off, combination of shares, exchange of shares, or similar change in the capital structure of the Company, or in the
event of payment of a dividend or distribution to the shareholders of the Company in a form other than Stock (excepting normal cash dividends) that has a material effect on the Fair Market Value of shares of Stock, appropriate adjustments shall be
made in the number and kind of shares subject to the Plan and to any outstanding Awards, in the Award limits set forth in Section 5.3 and in the exercise or purchase price per share under any outstanding Award in order to prevent dilution or
enlargement of Participants’ rights under the Plan. For purposes of the foregoing, conversion of any convertible securities of the Company shall not be treated as “effected without receipt of consideration by the Company.” If a
majority of the shares which are of the same class as the shares that are subject to outstanding Awards are exchanged for, converted into, or otherwise become (whether or not pursuant to an Ownership Change Event) shares of another corporation (the
“New Shares”), the Committee may unilaterally amend the outstanding Awards to provide that such Awards are for New Shares. In the event of any such amendment, the number of shares subject to, and the exercise or
purchase price per share of, the outstanding Awards shall be adjusted in a fair and equitable manner as determined by the Committee, in its discretion. Any 

  

 12 

 
fractional share resulting from an adjustment pursuant to this Section 4.6 shall be rounded down to the nearest whole number, and in no event may the
exercise or purchase price under any Award be decreased to an amount less than the par value, if any, of the stock subject to such Award. The Committee in its sole discretion, may also make such adjustments in the terms of any Award to reflect, or
related to, such changes in the capital structure of the Company or distributions as it deems appropriate, including modification of Performance Goals, Performance Award Formulas and Performance Periods. The adjustments determined by the Committee
pursuant to this Section shall be final, binding and conclusive. 
 The Committee may, without affecting the number of Shares reserved or
available hereunder, authorize the issuance or assumption of benefits under this Plan in connection with any merger, consolidation, acquisition of property or stock, or reorganization upon such terms and conditions as it may deem appropriate,
subject to compliance with Sections 409A and 422 and any related guidance issued by the U.S. Treasury Department, where applicable. 
  

	 	5.	ELIGIBILITY, PARTICIPATION AND AWARD LIMITATIONS.

 5.1 Persons Eligible for Awards. Awards, other than Deferred Compensation Award or Nonemployee
Director Awards, may be granted only to Employees and Consultants. Deferred Compensation Awards may be granted only to Officers, Directors and individuals who are among a select group of management or highly compensated Employees. Nonemployee
Director Awards may be granted only to persons who, at the time of grant, are Nonemployee Directors. 
 5.2 Participation
in Plan. Awards are granted solely at the discretion of the Committee. Eligible persons may be granted more than one Award. However, eligibility in accordance with this Section shall not entitle any person to be granted an Award, or, having been
granted an Award, to be granted an additional Award. 
 5.3 Award Limitations. 
 (a) Incentive Stock Option Limitations. 
 (i) Persons Eligible. An Incentive Stock Option may be granted only to a person who, on the effective date of grant, is an
Employee of the Company, a Parent Corporation or a Subsidiary Corporation (each being an “ISO-Qualifying Corporation”). Any person who is not an Employee of an ISO-Qualifying Corporation on the effective date of
the grant of an Option to such person may be granted only a Nonstatutory Stock Option. An Incentive Stock Option granted to a prospective Employee upon the condition that such person become an Employee of an ISO-Qualifying Corporation shall be
deemed granted effective on the date such person commences Service with an ISO-Qualifying Corporation, with an exercise price determined as of such date in accordance with Section 6.1. 
 (ii) Fair Market Value Limitation. To the extent that options designated as Incentive Stock Options (granted under all stock
option plans of the Participating Company Group, including the Plan) become exercisable by a Participant for the first time during any calendar year for stock having a Fair Market Value greater than One Hundred Thousand Dollars ($100,000), the
portion of such options which exceeds such amount shall be 

  

 13 

 
treated as Nonstatutory Stock Options. For purposes of this Section, options designated as Incentive Stock Options shall be taken into account in the order
in which they were granted, and the Fair Market Value of stock shall be determined as of the time the option with respect to such stock is granted. If the Code is amended to provide for a limitation different from that set forth in this Section,
such different limitation shall be deemed incorporated herein effective as of the date and with respect to such Options as required or permitted by such amendment to the Code. If an Option is treated as an Incentive Stock Option in part and as a
Nonstatutory Stock Option in part by reason of the limitation set forth in this Section, the Participant may designate which portion of such Option the Participant is exercising. In the absence of such designation, the Participant shall be deemed to
have exercised the Incentive Stock Option portion of the Option first. Upon exercise, shares issued pursuant to each such portion shall be separately identified. 
 (b) Nonemployee Director Award Limits. Subject to adjustment as provided in Section 4.6, no Nonemployee Director may be
granted within any fiscal year of the Company one or more Nonemployee Director Awards for more than Seventy Five Thousand (75,000) shares; provided, however, that the foregoing annual limit shall be increased by one or more of the following
additions, as applicable: (i) an additional Fifty Thousand (50,000) in the fiscal year in which the Nonemployee Director is first appointed or elected to the Board as a Nonemployee Director, (ii) an additional Thirty Thousand
(30,000) shares in any fiscal year in which the Nonemployee Director is serving as the Chairman or Lead Director of the Board, (iii) an additional Fifteen Thousand (15,000) shares in any fiscal year for each committee of the Board on
which the Nonemployee Director is then serving other than as chairman of the committee, and (iv) an additional Twenty Thousand (20,000) shares in any fiscal year for each committee of the Board on which the Nonemployee Director is then
serving as chairman of the committee. 
  

	 	6.	STOCK OPTIONS. 

 Options shall be evidenced by Award Agreements specifying the number of shares of Stock covered thereby, in such form as the Committee
shall from time to time establish. No Option or purported Option shall be a valid and binding obligation of the Company unless evidenced by a fully executed Award Agreement. Award Agreements evidencing Options may incorporate all or any of the terms
of the Plan by reference and shall comply with and be subject to the following terms and conditions: 
 6.1 Exercise
Price. The exercise price for each Option shall be established in the discretion of the Committee; provided, however, that (a) the exercise price per share shall be not less than the Fair Market Value of a share of Stock on the effective
date of grant of the Option and (b) no Incentive Stock Option granted to a Ten Percent Owner shall have an exercise price per share less than one hundred ten percent (110%) of the Fair Market Value of a share of Stock on the effective date
of grant of the Option. Notwithstanding the foregoing, an Option (whether an Incentive Stock Option or a Nonstatutory Stock Option) may be granted with an exercise price lower than the minimum exercise price set forth above if such Option is granted
pursuant to an assumption or substitution for another option in a manner qualifying under the provisions of Section 424(a) of the Code. 
  

 14 

 6.2 Exercisability and Term of Options. Options shall be exercisable at such time
or times, or upon such event or events, and subject to such terms, conditions, performance criteria and restrictions as shall be determined by the Committee and set forth in the Award Agreement evidencing such Option; provided, however, that
(a) no Option shall be exercisable after the expiration of ten (10) years after the effective date of grant of such Option and (b) no Incentive Stock Option granted to a Ten Percent Owner shall be exercisable after the expiration of
five (5) years after the effective date of grant of such Option. Subject to the foregoing, unless otherwise specified by the Committee in the grant of an Option, each Option shall terminate ten (10) years after the effective date of grant
of the Option, unless earlier terminated in accordance with its provisions. 
  

	 	6.3	Payment of Exercise Price. 

 (a)
Forms of Consideration Authorized. Except as otherwise provided below, payment of the exercise price for the number of shares of Stock being purchased pursuant to any Option shall be made (i) in cash or by check or cash
equivalent, (ii) to the extent permitted by the Company at the time of exercise, by tender to the Company, or attestation to the ownership, of shares of Stock owned by the Participant having a Fair Market Value not less than the exercise price,
(iii) to the extent permitted by the Company at the time of exercise, by delivery of a properly executed notice of exercise together with irrevocable instructions to a broker providing for the assignment to the Company of the proceeds of a sale
or loan with respect to some or all of the shares being acquired upon the exercise of the Option (including, without limitation, through an exercise complying with the provisions of Regulation T as promulgated from time to time by the Board of
Governors of the Federal Reserve System) (a “Cashless Exercise”), (iv) to the extent permitted by the Company at the time of exercise, by delivery of a properly executed notice electing a Net-Exercise,
(v) by such other consideration as may be approved by the Committee from time to time to the extent permitted by applicable law, or (vi) by any combination thereof. The Committee may at any time or from time to time grant Options which do
not permit all of the foregoing forms of consideration to be used in payment of the exercise price or which otherwise restrict one or more forms of consideration. 
 (b) Limitations on Forms of Consideration. 
 (i) Tender of Stock. Notwithstanding the foregoing, an Option may not be exercised by tender to the Company, or attestation to the
ownership, of shares of Stock to the extent such tender or attestation would constitute a violation of the provisions of any law, regulation or agreement restricting the redemption of the Company’s stock. Unless otherwise provided by the
Committee, an Option may not be exercised by tender to the Company, or attestation to the ownership, of shares of Stock unless such shares either have been owned by the Participant for more than six (6) months (or such other period, if any, as
the Committee may permit) and not used for another Option exercise by attestation during such period, or were not acquired, directly or indirectly, from the Company. 
 (ii) Cashless Exercise. The Company reserves, at any and all times, the right, in the Company’s sole and absolute discretion,
to establish, decline to approve or terminate any program or procedures for the exercise of Options by means of a Cashless 

  

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Exercise, including with respect to one or more Participants specified by the Company notwithstanding that such program or procedures may be available to
other Participants. 
  

	 	6.4	Effect of Termination of Service. 

 (a) Option Exercisability. Subject to earlier termination of the Option as otherwise provided herein and unless otherwise provided by the Committee in the grant of an Option and set forth in the Award Agreement, an Option
shall terminate immediately upon the Participant’s termination of Service to the extent that it is then unvested and shall be exercisable after the Participant’s termination of Service to the extent it is then vested only during the
applicable time period determined in accordance with this Section and thereafter shall terminate: 
 (i) Disability.
If the Participant’s Service terminates because of the Disability of the Participant, the Option, to the extent unexercised and exercisable for vested shares on the date on which the Participant’s Service terminated, may be exercised by
the Participant (or the Participant’s guardian or legal representative) at any time prior to the expiration of twelve (12) months after the date on which the Participant’s Service terminated, but in any event no later than the date of
expiration of the Option’s term as set forth in the Award Agreement evidencing such Option (the “Option Expiration Date”). 
 (ii) Death. If the Participant’s Service terminates because of the death of the Participant, the Option, to the extent
unexercised and exercisable for vested shares on the date on which the Participant’s Service terminated, may be exercised by the Participant’s legal representative or other person who acquired the right to exercise the Option by reason of
the Participant’s death at any time prior to the expiration of twelve (12) months after the date on which the Participant’s Service terminated, but in any event no later than the Option Expiration Date. The Participant’s Service
shall be deemed to have terminated on account of death if the Participant dies within three (3) months after the Participant’s termination of Service. 
 (iii) Termination for Cause. Notwithstanding any other provision of the Plan to the contrary, if the Participant’s Service is
terminated for Cause or if, following the Participant’s termination of Service and during any period in which the Option otherwise would remain exercisable, the Participant engages in any act that would constitute Cause, the Option shall
terminate in its entirety and cease to be exercisable immediately upon such termination of Service or act. 
 (iv) Other
Termination of Service. If the Participant’s Service terminates for any reason, except Disability, death or Cause, the Option, to the extent unexercised and exercisable for vested shares on the date on which the Participant’s Service
terminated, may be exercised by the Participant at any time prior to the expiration of three (3) months after the date on which the Participant’s Service terminated, but in any event no later than the Option Expiration Date. 
 (b) Extension if Exercise Prevented by Law. Notwithstanding the foregoing, other than termination of Service for Cause, if
the exercise of an Option within the applicable time periods set forth in Section 6.4(a) is prevented by the provisions of Section 16 below, the Option shall remain exercisable until three (3) months (or such longer period of time

  

 16 

 
as determined by the Committee, in its discretion) after the date the Participant is notified by the Company that the Option is exercisable, but in any event
no later than the Option Expiration Date. 
 (c) Extension if Participant Subject to Section 16(b).
Notwithstanding the foregoing, other than termination of Service for Cause, if a sale within the applicable time periods set forth in Section 6.4(a) of shares acquired upon the exercise of the Option would subject the Participant to suit under
Section 16(b) of the Exchange Act, the Option shall remain exercisable until the earliest to occur of (i) the tenth (10th) day following the date on which a sale of such shares by the Participant would no longer be subject to such
suit, (ii) the one hundred and ninetieth (190th) day after the Participant’s termination of Service, or (iii) the Option Expiration Date. 
 6.5 Transferability of Options. During the lifetime of the Participant, an Option shall be exercisable only by the Participant or
the Participant’s guardian or legal representative. An Option shall not be subject in any manner to anticipation, alienation, sale, exchange, transfer, assignment, pledge, encumbrance, or garnishment by creditors of the Participant or the
Participant’s beneficiary, except transfer by will or by the laws of descent and distribution. Notwithstanding the foregoing, to the extent permitted by the Committee, in its discretion, and set forth in the Award Agreement evidencing such
Option, a Nonstatutory Stock Option shall be assignable or transferable subject to the applicable limitations, if any, described in the General Instructions to Form S-8 Registration Statement under the Securities Act. 
  

	 	7.	STOCK APPRECIATION RIGHTS. 

 Stock Appreciation Rights shall be evidenced by Award Agreements specifying the number of shares of Stock subject to the Award, in such
form as the Committee shall from time to time establish. No SAR or purported SAR shall be a valid and binding obligation of the Company unless evidenced by a fully executed Award Agreement. Award Agreements evidencing SARs may incorporate all or any
of the terms of the Plan by reference and shall comply with and be subject to the following terms and conditions: 
 7.1
Types of SARs Authorized. SARs may be granted in tandem with all or any portion of a related Option (a “Tandem SAR”) or may be granted independently of any Option (a “Freestanding
SAR”). A Tandem SAR may only be granted concurrently with the grant of the related Option. 
 7.2
Exercise Price. The exercise price for each SAR shall be established in the discretion of the Committee; provided, however, that (a) the exercise price per share subject to a Tandem SAR shall be the exercise price per share under the
related Option and (b) the exercise price per share subject to a Freestanding SAR shall be not less than the Fair Market Value of a share of Stock on the effective date of grant of the SAR. 
 7.3 Exercisability and Term of SARs. 
 (a) Tandem SARs. Tandem SARs shall be exercisable only at the time and to the extent, and only to the extent, that the related Option is exercisable, subject to such provisions as the Committee may
specify where the Tandem SAR is granted with respect to 

  

 17 

 
less than the full number of shares of Stock subject to the related Option. The Committee may, in its discretion, provide in any Award Agreement evidencing a
Tandem SAR that such SAR may not be exercised without the advance approval of the Company and, if such approval is not given, then the Option shall nevertheless remain exercisable in accordance with its terms. A Tandem SAR shall terminate and cease
to be exercisable no later than the date on which the related Option expires or is terminated or canceled. Upon the exercise of a Tandem SAR with respect to some or all of the shares subject to such SAR, the related Option shall be canceled
automatically as to the number of shares with respect to which the Tandem SAR was exercised. Upon the exercise of an Option related to a Tandem SAR as to some or all of the shares subject to such Option, the related Tandem SAR shall be canceled
automatically as to the number of shares with respect to which the related Option was exercised. 
 (b) Freestanding
SARs. Freestanding SARs shall be exercisable at such time or times, or upon such event or events, and subject to such terms, conditions, performance criteria and restrictions as shall be determined by the Committee and set forth in the Award
Agreement evidencing such SAR; provided, however, that no Freestanding SAR shall be exercisable after the expiration of ten (10) years after the effective date of grant of such SAR. 
 7.4 Exercise of SARs. Upon the exercise (or deemed exercise pursuant to Section 7.5) of a SAR, the Participant (or the
Participant’s legal representative or other person who acquired the right to exercise the SAR by reason of the Participant’s death) shall be entitled to receive payment of an amount for each share with respect to which the SAR is exercised
equal to the excess, if any, of the Fair Market Value of a share of Stock on the date of exercise of the SAR over the exercise price. Payment of such amount shall be made (a) in the case of a Tandem SAR, solely in shares of Stock in a lump sum
as soon as practicable following the date of exercise of the SAR and (b) in the case of a Freestanding SAR, in cash, shares of Stock, or any combination thereof as determined by the Committee in compliance with Section 409A. Unless
otherwise provided in the Award Agreement evidencing a Freestanding SAR, payment shall be made in a lump sum as soon as practicable following the date of exercise of the SAR. The Award Agreement evidencing any Freestanding SAR may provide for
deferred payment in a lump sum or in installments in compliance with Section 409A. When payment is to be made in shares of Stock, the number of shares to be issued shall be determined on the basis of the Fair Market Value of a share of Stock on
the date of exercise of the SAR. For purposes of Section 7, a SAR shall be deemed exercised on the date on which the Company receives notice of exercise from the Participant or as otherwise provided in Section 7.5. 
 7.5 Deemed Exercise of SARs. If, on the date on which a SAR would otherwise terminate or expire, the SAR by its terms remains
exercisable immediately prior to such termination or expiration and, if so exercised, would result in a payment to the holder of such SAR, then any portion of such SAR which has not previously been exercised shall automatically be deemed to be
exercised as of such date with respect to such portion. 
 7.6 Effect of Termination of Service. Subject to earlier
termination of the SAR as otherwise provided herein and unless otherwise provided by the Committee in the grant of a SAR and set forth in the Award Agreement, a SAR shall be exercisable after a Participant’s termination of Service only to the
extent and during the applicable time period determined in 

  

 18 

 
accordance with Section 6.4 (treating the SAR as if it were an Option) and thereafter shall terminate. 
 7.7 Transferability of SARs. During the lifetime of the Participant, a SAR shall be exercisable only by the Participant or the
Participant’s guardian or legal representative. An SAR shall not be subject in any manner to anticipation, alienation, sale, exchange, transfer, assignment, pledge, encumbrance, or garnishment by creditors of the Participant or the
Participant’s beneficiary, except transfer by will or by the laws of descent and distribution. Notwithstanding the foregoing, to the extent permitted by the Committee, in its discretion, and set forth in the Award Agreement evidencing such
Award, a Tandem SAR related to a Nonstatutory Stock Option or a Freestanding SAR shall be assignable or transferable subject to the applicable limitations, if any, described in the General Instructions to Form S-8 Registration Statement under
the Securities Act. 
  

	 	8.	RESTRICTED STOCK AWARDS. 

 Restricted Stock Awards shall be evidenced by Award Agreements specifying whether the Award is a Restricted Stock Bonus or a Restricted
Stock Purchase Right and the number of shares of Stock subject to the Award, in such form as the Committee shall from time to time establish. No Restricted Stock Award or purported Restricted Stock Award shall be a valid and binding obligation of
the Company unless evidenced by a fully executed Award Agreement. Award Agreements evidencing Restricted Stock Awards may incorporate all or any of the terms of the Plan by reference and shall comply with and be subject to the following terms and
conditions: 
 8.1 Types of Restricted Stock Awards Authorized. Restricted Stock Awards may be granted in the form of
either a Restricted Stock Bonus or a Restricted Stock Purchase Right. Restricted Stock Awards may be granted upon such conditions as the Committee shall determine, including, without limitation, upon the attainment of one or more Performance Goals
described in Section 10.4. If either the grant of or satisfaction of Vesting Conditions applicable to a Restricted Stock Award is to be contingent upon the attainment of one or more Performance Goals, the Committee shall follow procedures
substantially equivalent to those set forth in Sections 10.3 through 10.5(a). 
 8.2 Purchase Price. The purchase
price for shares of Stock issuable under each Restricted Stock Purchase Right shall be established by the Committee in its discretion. No monetary payment (other than applicable tax withholding) shall be required as a condition of receiving shares
of Stock pursuant to a Restricted Stock Bonus, the consideration for which shall be services actually rendered to a Participating Company or for its benefit. Notwithstanding the foregoing, if required by applicable state corporate law, the
Participant shall furnish consideration in the form of cash or past services rendered to a Participating Company or for its benefit having a value not less than the par value of the shares of Stock subject to a Restricted Stock Award. 
 8.3 Purchase Period. A Restricted Stock Purchase Right shall be exercisable within a period established by the Committee, which
shall in no event exceed thirty (30) days from the effective date of the grant of the Restricted Stock Purchase Right. 
  

 19 

 8.4 Payment of Purchase Price. Except as otherwise provided below, payment of the
purchase price for the number of shares of Stock being purchased pursuant to any Restricted Stock Purchase Right shall be made (a) in cash or by check or cash equivalent, (b) by such other consideration as may be approved by the Committee
from time to time to the extent permitted by applicable law, or (c) by any combination thereof. 
 8.5 Vesting and
Restrictions on Transfer. Shares issued pursuant to any Restricted Stock Award may (but need not) be made subject to Vesting Conditions based upon the satisfaction of such Service requirements, conditions, restrictions or performance criteria,
including, without limitation, Performance Goals as described in Section 10.4, as shall be established by the Committee and set forth in the Award Agreement evidencing such Award. During any period in which shares acquired pursuant to a
Restricted Stock Award remain subject to Vesting Conditions, such shares may not be sold, exchanged, transferred, pledged, assigned or otherwise disposed of other than pursuant to an Ownership Change Event or as provided in Section 8.8. The
Committee, in its discretion, may provide in any Award Agreement evidencing a Restricted Stock Award that, if the satisfaction of Vesting Conditions with respect to any shares subject to such Restricted Stock Award would otherwise occur on a day on
which the sale of such shares would violate the Company’s Insider Trading Policy, then the satisfaction of the Vesting Conditions automatically be deemed to occur on the next day on which the sale of such shares would not violate the Insider
Trading Policy. Upon request by the Company, each Participant shall execute any agreement evidencing such transfer restrictions prior to the receipt of shares of Stock hereunder and shall promptly present to the Company any and all certificates
representing shares of Stock acquired hereunder for the placement on such certificates of appropriate legends evidencing any such transfer restrictions. 
 8.6 Voting Rights; Dividends and Distributions. Except as provided in this Section, Section 8.5 and any Award Agreement, during any period in which shares acquired pursuant to a Restricted Stock Award
remain subject to Vesting Conditions, the Participant shall have all of the rights of a shareholder of the Company holding shares of Stock, including the right to vote such shares and to receive all dividends and other distributions paid with
respect to such shares. However, in the event of a dividend or distribution paid in shares of Stock or other property or any other adjustment made upon a change in the capital structure of the Company as described in Section 4.6, any and all
new, substituted or additional securities or other property (other than normal cash dividends) to which the Participant is entitled by reason of the Participant’s Restricted Stock Award shall be immediately subject to the same Vesting
Conditions as the shares subject to the Restricted Stock Award with respect to which such dividends or distributions were paid or adjustments were made. 
 8.7 Effect of Termination of Service. Unless otherwise provided by the Committee in the Award Agreement evidencing a Restricted Stock Award, if a Participant’s Service terminates for any reason, whether
voluntary or involuntary (including the Participant’s death or disability), then (a) the Company shall have the option to repurchase for the purchase price paid by the Participant any shares acquired by the Participant pursuant to a
Restricted Stock Purchase Right which remain subject to Vesting Conditions as of the date of the Participant’s termination of Service and (b) the Participant shall forfeit to the Company any shares acquired by the Participant pursuant to a
Restricted Stock Bonus which remain subject to Vesting Conditions as of the date of the Participant’s termination of Service. The Company shall have 

  

 20 

 
the right to assign at any time any repurchase right it may have, whether or not such right is then exercisable, to one or more persons as may be selected by
the Company. 
 8.8 Nontransferability of Restricted Stock Award Rights. Rights to acquire shares of Stock pursuant to
a Restricted Stock Award shall not be subject in any manner to anticipation, alienation, sale, exchange, transfer, assignment, pledge, encumbrance or garnishment by creditors of the Participant or the Participant’s beneficiary, except transfer
by will or the laws of descent and distribution. All rights with respect to a Restricted Stock Award granted to a Participant hereunder shall be exercisable during his or her lifetime only by such Participant or the Participant’s guardian or
legal representative. 
  

	 	9.	RESTRICTED STOCK UNIT AWARDS. 

 Restricted Stock Unit Awards shall be evidenced by Award Agreements specifying the number of Restricted Stock Units subject to the Award,
in such form as the Committee shall from time to time establish. No Restricted Stock Unit Award or purported Restricted Stock Unit Award shall be a valid and binding obligation of the Company unless evidenced by a fully executed Award Agreement.
Award Agreements evidencing Restricted Stock Units may incorporate all or any of the terms of the Plan by reference and shall comply with and be subject to the following terms and conditions: 
 9.1 Grant of Restricted Stock Unit Awards. Restricted Stock Unit Awards may be granted upon such conditions as the Committee shall
determine, including, without limitation, upon the attainment of one or more Performance Goals described in Section 10.4. If either the grant of a Restricted Stock Unit Award or the Vesting Conditions with respect to such Award is to be
contingent upon the attainment of one or more Performance Goals, the Committee shall follow procedures substantially equivalent to those set forth in Sections 10.3 through 10.5(a). 
 9.2 Purchase Price. No monetary payment (other than applicable tax withholding, if any) shall be required as a condition of
receiving a Restricted Stock Unit Award, the consideration for which shall be services actually rendered to a Participating Company or for its benefit. Notwithstanding the foregoing, if required by applicable state corporate law, the Participant
shall furnish consideration in the form of cash or past services rendered to a Participating Company or for its benefit having a value not less than the par value of the shares of Stock issued upon settlement of the Restricted Stock Unit Award.

 9.3 Vesting. Restricted Stock Unit Awards may (but need not) be made subject to Vesting Conditions based upon the
satisfaction of such Service requirements, conditions, restrictions or performance criteria, including, without limitation, Performance Goals as described in Section 10.4, as shall be established by the Committee and set forth in the Award
Agreement evidencing such Award. 
 9.4 Voting Rights, Dividend Equivalent Rights and Distributions. Participants shall
have no voting rights with respect to shares of Stock represented by Restricted Stock Units until the date of the issuance of such shares (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of
the Company). However, 

  

 21 

 
the Committee, in its discretion, may provide in the Award Agreement evidencing any Restricted Stock Unit Award that the Participant shall be entitled to
Dividend Equivalent Rights with respect to the payment of cash dividends on Stock during the period beginning on the date such Award is granted and ending, with respect to the particular shares subject to the Award, on the earlier of the date the
Award is settled or the date on which it is terminated. Such Dividend Equivalents Rights, if any, shall be paid by crediting the Participant with additional whole Restricted Stock Units as of the date of payment of such cash dividends on Stock. The
number of additional Restricted Stock Units (rounded to the nearest whole number) to be so credited shall be determined by dividing (a) the amount of cash dividends paid on such date with respect to the number of shares of Stock represented by
the Restricted Stock Units previously credited to the Participant by (b) the Fair Market Value per share of Stock on such date. Such additional Restricted Stock Units shall be subject to the same terms and conditions and shall be settled in the
same manner and at the same time as the Restricted Stock Units originally subject to the Restricted Stock Unit Award. In the event of a dividend or distribution paid in shares of Stock or other property or any other adjustment made upon a change in
the capital structure of the Company as described in Section 4.6, appropriate adjustments shall be made in the Participant’s Restricted Stock Unit Award so that it represents the right to receive upon settlement any and all new,
substituted or additional securities or other property (other than normal cash dividends) to which the Participant would be entitled by reason of the shares of Stock issuable upon settlement of the Award, and all such new, substituted or additional
securities or other property shall be immediately subject to the same Vesting Conditions as are applicable to the Award. 
 9.5 Effect of Termination of Service. Unless otherwise provided by the Committee and set forth in the Award Agreement evidencing a Restricted Stock Unit Award, if a Participant’s Service terminates for any reason, whether
voluntary or involuntary (including the Participant’s death or disability), then the Participant shall forfeit to the Company any Restricted Stock Units pursuant to the Award which remain subject to Vesting Conditions as of the date of the
Participant’s termination of Service. 
 9.6 Settlement of Restricted Stock Unit Awards. The Company shall issue
to a Participant on the date on which Restricted Stock Units subject to the Participant’s Restricted Stock Unit Award vest or on such other date determined by the Committee, in its discretion, and set forth in the Award Agreement one
(1) share of Stock (and/or any other new, substituted or additional securities or other property pursuant to an adjustment described in Section 9.4) for each Restricted Stock Unit then becoming vested or otherwise to be settled on such
date, subject to the withholding of applicable taxes, if any. If permitted by the Committee, subject to the provisions of Section 19 with respect to Section 409A, the Participant may elect in accordance with terms specified in the Award
Agreement to defer receipt of all or any portion of the shares of Stock or other property otherwise issuable to the Participant pursuant to this Section, and such deferred issuance date(s) elected by the Participant shall be set forth in the Award
Agreement. Notwithstanding the foregoing, the Committee, in its discretion, may provide for settlement of any Restricted Stock Unit Award by payment to the Participant in cash of an amount equal to the Fair Market Value on the payment date of the
shares of Stock or other property otherwise issuable to the Participant pursuant to this Section. The Committee, in its discretion, may provide in any Award Agreement evidencing a Restricted Stock Unit Award that, if the settlement of the Award with
respect to any shares would otherwise occur on a day on which the sale of such shares would violate the Company’s Insider Trading Policy, then the 

  

 22 

 
settlement with respect to such shares shall occur on the next day on which the sale of such shares would not violate the Insider Trading Policy. 

9.7 Nontransferability of Restricted Stock Unit Awards. The right to receive shares pursuant to a Restricted Stock Unit Award
shall not be subject in any manner to anticipation, alienation, sale, exchange, transfer, assignment, pledge, encumbrance, or garnishment by creditors of the Participant or the Participant’s beneficiary, except transfer by will or by the laws
of descent and distribution. All rights with respect to a Restricted Stock Unit Award granted to a Participant hereunder shall be exercisable during his or her lifetime only by such Participant or the Participant’s guardian or legal
representative. 
  

	 	10.	PERFORMANCE AWARDS. 

 Performance Awards shall be evidenced by Award Agreements in such form as the Committee shall from time to time establish. No Performance
Award or purported Performance Award shall be a valid and binding obligation of the Company unless evidenced by a fully executed Award Agreement. Award Agreements evidencing Performance Awards may incorporate all or any of the terms of the Plan by
reference and shall comply with and be subject to the following terms and conditions: 
 10.1 Types of Performance Awards
Authorized. Performance Awards may be granted in the form of either Performance Shares or Performance Units. Each Award Agreement evidencing a Performance Award shall specify the number of Performance Shares or Performance Units subject thereto,
the Performance Award Formula, the Performance Goal(s) and Performance Period applicable to the Award, and the other terms, conditions and restrictions of the Award. 
 10.2 Initial Value of Performance Shares and Performance Units. Unless otherwise provided by the Committee in granting a
Performance Award, each Performance Share shall have an initial monetary value equal to the Fair Market Value of one (1) share of Stock, subject to adjustment as provided in Section 4.6, on the effective date of grant of the Performance
Share, and each Performance Unit shall have an initial monetary value established by the Committee at the time of grant. The final value payable to the Participant in settlement of a Performance Award determined on the basis of the applicable
Performance Award Formula will depend on the extent to which Performance Goals established by the Committee are attained within the applicable Performance Period established by the Committee. 
 10.3 Establishment of Performance Period, Performance Goals and Performance Award Formula. In granting each Performance Award, the
Committee shall establish in writing the applicable Performance Period, Performance Award Formula and one or more Performance Goals which, when measured at the end of the Performance Period, shall determine on the basis of the Performance Award
Formula the final value of the Performance Award to be paid to the Participant. Unless otherwise permitted in compliance with the requirements under Section 162(m) with respect to each Performance Award intended to result in the payment of
Performance-Based Compensation, the Committee shall establish the Performance Goal(s) and Performance Award Formula applicable to each Performance Award no later than the earlier of (a) the date ninety (90) days after the commencement of
the applicable 

  

 23 

 
Performance Period or (b) the date on which 25% of the Performance Period has elapsed, and, in any event, at a time when the outcome of the Performance
Goals remains substantially uncertain. Once established, the Performance Goals and Performance Award Formula applicable to a Covered Employee shall not be changed during the Performance Period. The Company shall notify each Participant granted a
Performance Award of the terms of such Award, including the Performance Period, Performance Goal(s) and Performance Award Formula. 
 10.4 Measurement of Performance Goals. Performance Goals shall be established by the Committee on the basis of targets to be attained (“Performance Targets”) with respect to one or more measures
of business or financial performance (each, a “Performance Measure”), subject to the following: 
 (a) Performance Measures. Performance Measures shall have the same meanings as used in the Company’s financial statements, or, if such terms are not used in the Company’s financial statements,
they shall have the meaning applied pursuant to generally accepted accounting principles, or as used generally in the Company’s industry. Performance Measures shall be calculated with respect to the Company and each Subsidiary Corporation
consolidated therewith for financial reporting purposes or such division or other business unit as may be selected by the Committee. For purposes of the Plan, the Performance Measures applicable to a Performance Award shall be calculated in
accordance with generally accepted accounting principles, but prior to the accrual or payment of any Performance Award for the same Performance Period and excluding the effect (whether positive or negative) of any change in accounting standards or
any extraordinary, unusual or nonrecurring item, as determined by the Committee, occurring after the establishment of the Performance Goals applicable to the Performance Award. Each such adjustment, if any, shall be made solely for the purpose of
providing a consistent basis from period to period for the calculation of Performance Measures in order to prevent the dilution or enlargement of the Participant’s rights with respect to a Performance Award. Performance Measures may be one or
more of the following, as determined by the Committee: 
 (i) revenue; 
 (ii) sales; 
 (iii) expenses; 
 (iv) operating income; 
 (v) gross margin; 
 (vi) operating margin; 
 (vii) earnings before any one or more of: stock-based compensation expense, interest,
taxes, depreciation and amortization; 
 (viii) pre-tax profit; 
 (ix) net operating income; 
  

 24 

 (x) net income; 
 (xi) economic value added; 
 (xii) free cash flow; 
 (xiii) operating cash flow; 
 (xiv) balance of cash, cash equivalents and marketable securities; 
 (xv) stock price; 
 (xvi) earnings per share; 
 (xvii) return on shareholder equity; 
 (xviii) return on capital; 
 (xix) return on assets; 
 (xx) return on investment; 
 (xxi) employee satisfaction; 
 (xxii) employee retention; 
 (xxiii) market share; 
 (xxiv) customer satisfaction; 
 (xxv) product development; 
 (xxvi) research and development expenses; 
 (xxvii) completion of an identified special project; and 
 (xxviii) completion of a joint venture or other corporate transaction. 
 (b) Performance Targets. Performance Targets may include a minimum, maximum, target level and intermediate levels of
performance, with the final value of a Performance Award determined under the applicable Performance Award Formula by the level attained during the applicable Performance Period. A Performance Target may be stated as an absolute value or as a value
determined relative to an index, budget or other standard selected by the Committee. 
 10.5 Settlement of Performance
Awards. 
 (a) Determination of Final Value. As soon as practicable following the completion of the
Performance Period applicable to a Performance Award, the Committee 

  

 25 

 
shall certify in writing the extent to which the applicable Performance Goals have been attained and the resulting final value of the Award earned by the
Participant and to be paid upon its settlement in accordance with the applicable Performance Award Formula. 
 (b)
Discretionary Adjustment of Award Formula. In its discretion, the Committee may, either at the time it grants a Performance Award or at any time thereafter, provide for the positive or negative adjustment of the Performance Award
Formula applicable to a Performance Award granted to any Participant who is not a Covered Employee to reflect such Participant’s individual performance in his or her position with the Company or such other factors as the Committee may
determine. If permitted under a Covered Employee’s Award Agreement, the Committee shall have the discretion, on the basis of such criteria as may be established by the Committee, to reduce some or all of the value of the Performance Award that
would otherwise be paid to the Covered Employee upon its settlement notwithstanding the attainment of any Performance Goal and the resulting value of the Performance Award determined in accordance with the Performance Award Formula. No such
reduction may result in an increase in the amount payable upon settlement of another Participant’s Performance Award that is intended to result in Performance-Based Compensation. 
 (c) Effect of Leaves of Absence. Unless otherwise required by law or a Participant’s Award Agreement, payment of the
final value, if any, of a Performance Award held by a Participant who has taken in excess of thirty (30) days in leaves of absence during a Performance Period shall be prorated on the basis of the number of days of the Participant’s
Service during the Performance Period during which the Participant was not on a leave of absence. 
 (d) Notice to
Participants. As soon as practicable following the Committee’s determination and certification in accordance with Sections 10.5(a) and (b), the Company shall notify each Participant of the determination of the Committee.

 (e) Payment in Settlement of Performance Awards. Subject to the provisions of Section 19 with respect to
Section 409A, as soon as practicable following the Committee’s determination and certification in accordance with Sections 10.5(a) and (b), payment shall be made to each eligible Participant (or such Participant’s legal
representative or other person who acquired the right to receive such payment by reason of the Participant’s death) of the final value of the Participant’s Performance Award. Payment of such amount shall be made in cash, shares of Stock,
or a combination thereof as determined by the Committee. Unless otherwise provided in the Award Agreement evidencing a Performance Award, payment shall be made in a lump sum. If permitted by the Committee, and subject to the provisions of
Section 19 with respect to Section 409A, the Participant may elect to defer receipt of all or any portion of the payment to be made to Participant pursuant to this Section, and such deferred payment date(s) elected by the Participant shall
be set forth in the Award Agreement. If any payment is to be made on a deferred basis, the Committee may, but shall not be obligated to, provide for the payment during the deferral period of Dividend Equivalent Rights or interest. 
 (f) Provisions Applicable to Payment in Shares. If payment is to be made in shares of Stock, the number of such shares shall
be determined by dividing the final value of the Performance Award by the value of a share of Stock determined by the method 

  

 26 

 
specified in the Award Agreement. Such methods may include, without limitation, the closing market price on a specified date (such as the settlement date) or
an average of market prices over a series of trading days. Shares of Stock issued in payment of any Performance Award may be fully vested and freely transferable shares or may be shares of Stock subject to Vesting Conditions as provided in
Section 8.5. Any shares subject to Vesting Conditions shall be evidenced by an appropriate Award Agreement and shall be subject to the provisions of Sections 8.5 through 8.8 above. 
 10.6 Voting Rights; Dividend Equivalent Rights and Distributions. Participants shall have no voting rights with respect to shares
of Stock represented by Performance Share Awards until the date of the issuance of such shares, if any (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company). However, the Committee,
in its discretion, may provide in the Award Agreement evidencing any Performance Share Award that the Participant shall be entitled to Dividend Equivalent Rights with respect to the payment of cash dividends on Stock during the period beginning on
the date the Award is granted and ending, with respect to the particular shares subject to the Award, on the earlier of the date on which the Performance Shares are settled or the date on which they are forfeited. Such Dividend Equivalent Rights, if
any, shall be credited to the Participant in the form of additional whole Performance Shares as of the date of payment of such cash dividends on Stock. The number of additional Performance Shares (rounded to the nearest whole number) to be so
credited shall be determined by dividing (a) the amount of cash dividends paid on the dividend payment date with respect to the number of shares of Stock represented by the Performance Shares previously credited to the Participant by
(b) the Fair Market Value per share of Stock on such date. Dividend Equivalent Rights may be paid currently or may be accumulated and paid to the extent that Performance Shares become nonforfeitable, as determined by the Committee. Settlement
of Dividend Equivalent Rights may be made in cash, shares of Stock, or a combination thereof as determined by the Committee, and may be paid on the same basis as settlement of the related Performance Share as provided in Section 10.5. Dividend
Equivalent Rights shall not be paid with respect to Performance Units. In the event of a dividend or distribution paid in shares of Stock or other property or any other adjustment made upon a change in the capital structure of the Company as
described in Section 4.6, appropriate adjustments shall be made in the Participant’s Performance Share Award so that it represents the right to receive upon settlement any and all new, substituted or additional securities or other property
(other than normal cash dividends) to which the Participant would entitled by reason of the shares of Stock issuable upon settlement of the Performance Share Award, and all such new, substituted or additional securities or other property shall be
immediately subject to the same Performance Goals as are applicable to the Award. 
 10.7 Effect of Termination of
Service. Unless otherwise provided by the Committee and set forth in the Award Agreement evidencing a Performance Award, the effect of a Participant’s termination of Service on the Performance Award shall be as follows: 
 (a) Death or Disability. If the Participant’s Service terminates because of the death or Disability of the Participant
before the completion of the Performance Period applicable to the Performance Award, the final value of the Participant’s Performance Award shall be determined by the extent to which the applicable Performance Goals have been attained with
respect to the entire Performance Period and shall be prorated based on the number 

  

 27 

 
of months of the Participant’s Service during the Performance Period. Payment shall be made following the end of the Performance Period in any manner
permitted by Section 10.5. 
 (b) Other Termination of Service. If the Participant’s Service
terminates for any reason except death or Disability before the completion of the Performance Period applicable to the Performance Award, such Award shall be forfeited in its entirety. 
 10.8 Nontransferability of Performance Awards. Prior to settlement in accordance with the provisions of the Plan, no Performance
Award shall be subject in any manner to anticipation, alienation, sale, exchange, transfer, assignment, pledge, encumbrance, or garnishment by creditors of the Participant or the Participant’s beneficiary, except transfer by will or by the laws
of descent and distribution. All rights with respect to a Performance Award granted to a Participant hereunder shall be exercisable during his or her lifetime only by such Participant or the Participant’s guardian or legal representative.

  

	 	11.	DEFERRED COMPENSATION AWARDS. 

 11.1 Establishment of Deferred Compensation Award Programs. This Section 11 shall not be effective unless and until the
Committee determines to establish a program pursuant to this Section. The Committee, in its discretion and upon such terms and conditions as it may determine, subject to the provisions of Section 19 with respect to Section 409A, may
establish one or more programs pursuant to the Plan under which: 
 (a) Elective Cash Compensation Reduction
Awards. Participants designated by the Committee who are Officers, Directors or otherwise among a select group of management or highly compensated Employees may irrevocably elect, prior to a date specified by the Committee in compliance with
Section 409A, to reduce such Participant’s compensation otherwise payable in cash (subject to any minimum or maximum reductions imposed by the Committee) and to be granted automatically at such time or times as specified by the Committee
one or more Awards of Stock Units with respect to such numbers of shares of Stock as determined in accordance with the rules of the program established by the Committee and having such other terms and conditions as established by the Committee.

 (b) Stock Issuance Deferral Awards. Participants designated by the Committee who are Officers, Directors or
otherwise among a select group of management or highly compensated Employees may irrevocably elect, prior to a date specified by the Committee in compliance with Section 409A, to be granted automatically an Award of Stock Units with respect to
such number of shares of Stock and upon such other terms and conditions as established by the Committee in lieu of: 
 (i)
shares of Stock otherwise issuable to such Participant upon the exercise of an Option; 
 (ii) cash or shares of Stock
otherwise issuable to such Participant upon the exercise of a SAR; or 
 (iii) cash or shares of Stock otherwise issuable to
such Participant upon the settlement of a Performance Award. 
  

 28 

 11.2 Terms and Conditions of Deferred Compensation Awards. Deferred Compensation
Awards granted pursuant to this Section 11 shall be evidenced by Award Agreements in such form as the Committee shall from time to time establish. No such Deferred Compensation Award or purported Deferred Compensation Award shall be a valid and
binding obligation of the Company unless evidenced by a fully executed Award Agreement. Award Agreements evidencing Deferred Compensation Awards may incorporate all or any of the terms of the Plan by reference, including the provisions of
Section 19 with respect to Section 409A, and, except as provided below, shall comply with and be subject to the terms and conditions of Section 9. 
 (a) Voting Rights; Dividend Equivalent Rights and Distributions. Participants shall have no voting rights with respect to
shares of Stock represented by Stock Units until the date of the issuance of such shares (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company). However, a Participant shall be
entitled to Dividend Equivalent Rights with respect to the payment of cash dividends on Stock during the period beginning on the date the Stock Units are granted automatically to the Participant and ending on the earlier of the date on which such
Stock Units are settled or the date on which they are forfeited. Such Dividend Equivalent Rights shall be paid by crediting the Participant with additional whole Stock Units as of the date of payment of such cash dividends on Stock. The number of
additional Stock Units (rounded to the nearest whole number) to be so credited shall be determined by dividing (A) the amount of cash dividends paid on the dividend payment date with respect to the number of shares of Stock represented by the
Stock Units previously credited to the Participant by (B) the Fair Market Value per share of Stock on such date. Such additional Stock Units shall be subject to the same terms and conditions and shall be settled in the same manner and at the
same time (or as soon thereafter as practicable) as the Stock Units originally subject to the Stock Unit Award. In the event of a dividend or distribution paid in shares of Stock or other property or any other adjustment made upon a change in the
capital structure of the Company as described in Section 4.6, appropriate adjustments shall be made in the Participant’s Stock Unit Award so that it represents the right to receive upon settlement any and all new, substituted or additional
securities or other property (other than normal cash dividends) to which the Participant would entitled by reason of the shares of Stock issuable upon settlement of the Award. 
 (b) Settlement of Deferred Compensation Awards. A Participant electing to receive an Award of Stock Units pursuant to this
Section 11 shall specify at the time of such election a settlement date with respect to such Award in compliance with Section 409A. The Company shall issue to the Participant on the settlement date elected by the Participant, or as soon
thereafter as practicable, a number of whole shares of Stock equal to the number of vested Stock Units subject to the Stock Unit Award. Such shares of Stock shall be fully vested, and the Participant shall not be required to pay any additional
consideration (other than applicable tax withholding) to acquire such shares. 
  

	 	12.	CASH-BASED AWARDS AND OTHER STOCK-BASED
AWARDS. 

 Cash-Based Awards and Other Stock-Based Awards
shall be evidenced by Award Agreements in such form as the Committee shall from time to time establish. No such Award or purported Award shall be a valid and binding obligation of the Company unless evidenced by a 

  

 29 

 
fully executed Award Agreement. Award Agreements evidencing Cash-Based Awards and Other Stock-Based Awards may incorporate all or any of the terms of the
Plan by reference and shall comply with and be subject to the following terms and conditions: 
 12.1 Grant of Cash-Based
Awards. Subject to the provisions of the Plan, the Committee, at any time and from time to time, may grant Cash-Based Awards to Participants in such amounts and upon such terms and conditions, including the achievement of performance criteria,
as the Committee may determine. 
 12.2 Grant of Other Stock-Based Awards. The Committee may grant other types of
equity-based or equity-related Awards not otherwise described by the terms of this Plan (including the grant or offer for sale of unrestricted securities, stock-equivalent units, stock appreciation units, securities or debentures convertible into
common stock or other forms determined by the Committee) in such amounts and subject to such terms and conditions as the Committee shall determine. Such Awards may involve the transfer of actual shares of Stock to Participants, or payment in cash or
otherwise of amounts based on the value of Stock and may include, without limitation, Awards designed to comply with or take advantage of the applicable local laws of jurisdictions other than the United States. 
 12.3 Value of Cash-Based and Other Stock-Based Awards. Each Cash-Based Award shall specify a monetary payment amount or payment
range as determined by the Committee. Each Other Stock-Based Award shall be expressed in terms of shares of Stock or units based on such shares of Stock, as determined by the Committee. The Committee may require the satisfaction of such Service
requirements, conditions, restrictions or performance criteria, including, without limitation, Performance Goals as described in Section 10.4, as shall be established by the Committee and set forth in the Award Agreement evidencing such Award.
If the Committee exercises its discretion to establish performance criteria, the final value of Cash-Based Awards or Other Stock-Based Awards that will be paid to the Participant will depend on the extent to which the performance criteria are met.
The establishment of performance criteria with respect to the grant or vesting of any Cash-Based Award or Other Stock-Based Award intended to result in Performance-Based Compensation shall follow procedures substantially equivalent to those
applicable to Performance Awards set forth in Section 10. 
 12.4 Payment or Settlement of Cash-Based Awards and Other
Stock-Based Awards. Payment or settlement, if any, with respect to a Cash-Based Award or an Other Stock-Based Award shall be made in accordance with the terms of the Award, in cash, shares of Stock or other securities or any combination thereof
as the Committee determines. The determination and certification of the final value with respect to any Cash-Based Award or Other Stock-Based Award intended to result in Performance-Based Compensation shall comply with the requirements applicable to
Performance Awards set forth in Section 10. To the extent applicable, payment or settlement with respect to each Cash-Based Award and Other Stock-Based Award shall be made in compliance with Section 409A. 
 12.5 Voting Rights; Dividend Equivalent Rights and Distributions. Participants shall have no voting rights with respect to shares
of Stock represented by Other Stock-Based Awards until the date of the issuance of such shares of Stock (as evidenced by the 

  

 30 

 
appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company), if any, in settlement of such Award. However, the
Committee, in its discretion, may provide in the Award Agreement evidencing any Other Stock-Based Award that the Participant shall be entitled to Dividend Equivalent Rights with respect to the payment of cash dividends on Stock during the period
beginning on the date such Award is granted and ending, with respect to the particular shares subject to the Award, on the earlier of the date the Award is settled or the date on which it is terminated. Such Dividend Equivalent Rights, if any, shall
be paid in accordance with the provisions set forth in Section 9.4. Dividend Equivalent Rights shall not be granted with respect to Cash-Based Awards. 
 12.6 Effect of Termination of Service. Each Award Agreement evidencing a Cash-Based Award or Other Stock-Based Award shall set forth the extent to which the Participant shall have the right to retain such Award
following termination of the Participant’s Service. Such provisions shall be determined in the sole discretion of the Committee, need not be uniform among all Cash-Based Awards or Other Stock-Based Awards, and may reflect distinctions based on
the reasons for termination. 
 12.7 Nontransferability of Cash-Based Awards and Other Stock-Based Awards. Prior to the
payment or settlement of a Cash-Based Award or Other Stock-Based Award, the Award shall not be subject in any manner to anticipation, alienation, sale, exchange, transfer, assignment, pledge, encumbrance, or garnishment by creditors of the
Participant or the Participant’s beneficiary, except transfer by will or by the laws of descent and distribution. The Committee may impose such additional restrictions on any shares of Stock issued in settlement of Cash-Based Awards and Other
Stock-Based Awards as it may deem advisable, including, without limitation, minimum holding period requirements, restrictions under applicable federal securities laws, under the requirements of any stock exchange or market upon which such shares of
Stock are then listed and/or traded, or under any state securities laws applicable to such shares of Stock. 
  

	 	13.	NONEMPLOYEE DIRECTOR AWARDS. 

 From time to time, the Board or the Committee shall set the amount(s) and type(s) of Nonemployee Director Awards that shall be granted to
all Nonemployee Directors on a periodic, nondiscriminatory basis pursuant to the Plan, as well as the additional amount(s) and type(s) of Nonemployee Director Awards, if any, to be awarded, also on a periodic, nondiscriminatory basis, in
consideration of one or more of the following: (a) the initial election or appointment of an individual to the Board as a Nonemployee Director, (b) a Nonemployee Director’s service as Chairman or Lead Director of the Board, (c) a
Nonemployee Director’s service on one or more of the committees of the Board other than as the chairman of the committee, and (d) a Nonemployee Director’s service as the chairman of a committee of the Board. The terms and conditions
of each Nonemployee Director Award shall comply with the applicable provisions of the Plan. Subject to the limits set forth in Section 5.3(b) and the foregoing, the Board or the Committee shall grant Nonemployee Director Awards having such
terms and conditions as it shall from time to time determine. 
  

 31 

	 	14.	STANDARD FORMS OF AWARD AGREEMENT. 

14.1 Award Agreements. Each Award shall comply with and be subject to the terms and conditions set forth in the
appropriate form of Award Agreement approved by the Committee and as amended from time to time. Any Award Agreement may consist of an appropriate form of Notice of Grant and a form of Award Agreement incorporated therein by reference, or such other
form or forms, including electronic media, as the Committee may approve from time to time. 
 14.2 Authority to Vary
Terms. The Committee shall have the authority from time to time to vary the terms of any standard form of Award Agreement either in connection with the grant or amendment of an individual Award or in connection with the
authorization of a new standard form or forms; provided, however, that the terms and conditions of any such new, revised or amended standard form or forms of Award Agreement are not inconsistent with the terms of the Plan. 
  

	 	15.	CHANGE IN CONTROL. 

 15.1 Effect of Change in Control on Options and SARs. 
 (a) Accelerated Vesting. The Committee may, in its sole discretion, provide in any Award Agreement, or in the event of a
Change in Control, may take such actions as it deems appropriate to provide for the acceleration of the exercisability and vesting in connection with such Change in Control of any or all outstanding Options and SARs or shares acquired upon the
exercise thereof upon such conditions, including termination of the Participant’s Service prior to, upon or following such Change in Control, and to such extent as the Committee shall determine. 
 (b) Assumption or Substitution. In the event of a Change in Control, the surviving, continuing, successor, or purchasing
entity or parent thereof, as the case may be (the “Acquiror”), may, without the consent of any Participant, either assume or continue the Company’s rights and obligations under any or all outstanding
Options and SARs or substitute for any or all outstanding Options and SARs substantially equivalent options and stock appreciation rights (as the case may be) for the Acquiror’s stock. Any Options or SARs which are neither assumed or continued
by the Acquiror in connection with the Change in Control nor exercised as of the time of consummation of the Change in Control shall terminate and cease to be outstanding effective as of the time of consummation of the Change in Control. 

(c) Cash-Out. The Committee may, in its sole discretion and without the consent of any Participant, determine that, upon
the occurrence of a Change in Control, each or any Option or SAR outstanding immediately prior to the Change in Control shall be canceled in exchange for a payment with respect to each share of Stock subject to such canceled Option or SAR in
(i) cash, (ii) stock of the Company or of a corporation or other business entity a party to the Change in Control, or (iii) other property which, in any such case, shall be in an amount having a Fair Market Value equal to the excess
of the Fair Market Value of the consideration to be paid per share of Stock in the Change in Control over the exercise price per share under such Option or SAR (the “Spread”). In the event such determination is
made by the Committee, the 

  

 32 

 
Spread (reduced by applicable withholding taxes, if any) shall be paid to Participants in respect of their canceled Options and SARs as soon as practicable
following the date of the Change in Control. 
 15.2 Effect of Change in Control on Restricted Stock Awards, Restricted
Stock Unit Awards, Performance Awards, Cash-Based Awards, Other Stock-Based Awards and Deferred Compensation Awards. Subject to compliance with Section 409A, if applicable, in the event of a Change in Control, each outstanding Restricted
Stock Award, Restricted Stock Unit Award, Performance Award, Cash-Based Award, Other Stock-Based Award and Deferred Compensation Award held by a Participant whose Service has not terminated prior to the date of the Change in Control shall become
vested in full and shall be settled effective as of the date of the Change in Control. In addition, subject to compliance with Section 409A, if applicable, the Committee, in its sole discretion, may take such actions as it deems appropriate to
provide for the acceleration of vesting and/or settlement of any or all such outstanding Awards in connection with and upon termination of the Participant’s Service prior to a Change in Control upon such conditions and to such extent as the
Committee shall determine. 
 15.3 Effect of Change in Control on Nonemployee Director Awards. Subject to compliance
with Section 409A, if applicable, in the event of a Change in Control, each outstanding Nonemployee Director Award shall become immediately exercisable and vested in full and shall be settled effective as of the date of the Change in Control.

  

	 	16.	COMPLIANCE WITH SECURITIES LAW. 

 The grant of Awards and the issuance of shares of Stock pursuant to any Award shall be subject to compliance with all applicable
requirements of federal, state and foreign law with respect to such securities and the requirements of any stock exchange or market system upon which the Stock may then be listed. In addition, no Award may be exercised or shares issued pursuant to
an Award unless (a) a registration statement under the Securities Act shall at the time of such exercise or issuance be in effect with respect to the shares issuable pursuant to the Award or (b) in the opinion of legal counsel to the
Company, the shares issuable pursuant to the Award may be issued in accordance with the terms of an applicable exemption from the registration requirements of the Securities Act. The inability of the Company to obtain from any regulatory body having
jurisdiction the authority, if any, deemed by the Company’s legal counsel to be necessary to the lawful issuance and sale of any shares hereunder shall relieve the Company of any liability in respect of the failure to issue or sell such shares
as to which such requisite authority shall not have been obtained. As a condition to issuance of any Stock, the Company may require the Participant to satisfy any qualifications that may be necessary or appropriate, to evidence compliance with any
applicable law or regulation and to make any representation or warranty with respect thereto as may be requested by the Company. 
  

	 	17.	TAX WITHHOLDING. 

 17.1 Tax Withholding in General. The Company shall have the right to deduct from any and all payments made under the Plan, or to
require the Participant, through payroll withholding, cash payment or otherwise, to make adequate provision for, the federal, state, local and foreign taxes, if any, required by law to be withheld by the Participating 

  

 33 

 
Company Group with respect to an Award or the shares acquired pursuant thereto. The Company shall have no obligation to deliver shares of Stock, to release
shares of Stock from an escrow established pursuant to an Award Agreement, or to make any payment in cash under the Plan until the Participating Company Group’s tax withholding obligations have been satisfied by the Participant. 
 17.2 Withholding in Shares. The Company shall have the right, but not the obligation, to deduct from the shares of Stock issuable
to a Participant upon the exercise or settlement of an Award, or to accept from the Participant the tender of, a number of whole shares of Stock having a Fair Market Value, as determined by the Company, equal to all or any part of the tax
withholding obligations of the Participating Company Group. The Fair Market Value of any shares of Stock withheld or tendered to satisfy any such tax withholding obligations shall not exceed the amount determined by the applicable minimum statutory
withholding rates. 
  

	 	18.	AMENDMENT OR TERMINATION OF PLAN. 

 The Committee may amend, suspend or terminate the Plan at any time. However, without the approval of the Company’s shareholders,
there shall be (a) no increase in the maximum aggregate number of shares of Stock that may be issued under the Plan (except by operation of the provisions of Section 4.6), (b) no change in the class of persons eligible to receive
Incentive Stock Options, and (c) no other amendment of the Plan that would require approval of the Company’s shareholders under any applicable law, regulation or rule, including the rules of any stock exchange or market system upon which
the Stock may then be listed. No amendment, suspension or termination of the Plan shall affect any then outstanding Award unless expressly provided by the Committee. Except as provided by the next sentence, no amendment, suspension or termination of
the Plan may adversely affect any then outstanding Award without the consent of the Participant. Notwithstanding any other provision of the Plan to the contrary, the Committee may, in its sole and absolute discretion and without the consent of any
Participant, amend the Plan or any Award Agreement, to take effect retroactively or otherwise, as it deems necessary or advisable for the purpose of conforming the Plan or such Award Agreement to any present or future law, regulation or rule
applicable to the Plan, including, but not limited to, Section 409A. 
  

	 	19.	COMPLIANCE WITH SECTION 409A. 

 19.1 Awards Subject to Section 409A. The provisions of this Section 19 shall apply to any Award or portion thereof that
is or becomes subject to Section 409A, notwithstanding any provision to the contrary contained in the Plan or the Award Agreement applicable to such Award. Awards subject to Section 409A include, without limitation: 
 (a) Any Nonstatutory Stock Option that permits the deferral of compensation other than the deferral of recognition of income until the
exercise of the Award. 
 (b) Each Deferred Compensation Award. 
 (c) Any Restricted Stock Unit Award, Performance Award, Cash-Based Award or Other Stock-Based Award that either (i) provides by its
terms for settlement of all or any portion of the Award on one or more dates following the Short-Term Deferral Period 

  

 34 

 
(as defined below) or (ii) permits or requires the Participant to elect one or more dates on which the Award will be settled. 
 Subject to any applicable U.S. Treasury Regulations promulgated pursuant to Section 409A or other applicable guidance, the term
“Short-Term Deferral Period” means the period ending on the later of (i) the date that is two and one-half months from the end of the Company’s fiscal year in which the applicable portion of the Award is no
longer subject to a substantial risk of forfeiture or (ii) the date that is two and one-half months from the end of the Participant’s taxable year in which the applicable portion of the Award is no longer subject to a substantial risk of
forfeiture. For this purpose, the term “substantial risk of forfeiture” shall have the meaning set forth in any applicable U.S. Treasury Regulations promulgated pursuant to Section 409A or other applicable guidance. 
 19.2 Deferral and/or Distribution Elections. Except as otherwise permitted or required by Section 409A or any applicable U.S.
Treasury Regulations promulgated pursuant to Section 409A or other applicable guidance, the following rules shall apply to any deferral and/or distribution elections (each, an “Election”) that may be permitted or
required by the Committee pursuant to an Award subject to Section 409A: 
 (a) All Elections must be in writing and
specify the amount of the distribution in settlement of an Award being deferred, as well as the time and form of distribution as permitted by this Plan. 
 (b) All Elections shall be made by the end of the Participant’s taxable year prior to the year in which services commence for which an Award may be granted to such Participant; provided, however, that if the
Award qualifies as “performance-based compensation” for purposes of Section 409A and is based on services performed over a period of at least twelve (12) months, then the Election may be made no later than six (6) months
prior to the end of such period. 
 (c) Elections shall continue in effect until a written election to revoke or change such
Election is received by the Company, except that a written election to revoke or change such Election must be made prior to the last day for making an Election determined in accordance with paragraph (b) above or as permitted by
Section 19.3. 
 19.3 Subsequent Elections. Any Award subject to Section 409A which permits a
subsequent Election to delay the distribution or change the form of distribution in settlement of such Award shall comply with the following requirements: 
 (a) No subsequent Election may take effect until at least twelve (12) months after the date on which the subsequent Election is made; 
 (b) Each subsequent Election related to a distribution in settlement of an Award not described in Section 19.3(b), 19.4(b), or
19.4(f) must result in a delay of the distribution for a period of not less than five (5) years from the date such distribution would otherwise have been made; and 
  

 35 

 (c) No subsequent Election related to a distribution pursuant to Section 19.4(d)
shall be made less than twelve (12) months prior to the date of the first scheduled payment under such distribution. 
 19.4 Distributions Pursuant to Deferral Elections. No distribution in settlement of an Award subject to Section 409A may commence earlier than: 
 (a) Separation from service (as determined by the Secretary of the United States Treasury); 
 (b) The date the Participant becomes Disabled (as defined below); 
 (c) Death; 
 (d) A specified time (or pursuant to a fixed schedule) that is either (i) specified by the Committee upon the grant of an Award and set forth in the Award Agreement evidencing such Award or (ii) specified by the Participant in an
Election complying with the requirements of Section 19.2 and/or 19.3, as applicable; 
 (e) To the extent provided by the
Secretary of the U.S. Treasury, a change in the ownership or effective control or the Company or in the ownership of a substantial portion of the assets of the Company; or 
 (f) The occurrence of an Unforeseeable Emergency (as defined below). 
 Notwithstanding anything else herein to the contrary, to the extent that a Participant is a “Specified Employee” (as defined in
Section 409A(a)(2)(B)(i)) of the Company, no distribution pursuant to Section 19.4(a) in settlement of an Award subject to Section 409A may be made before the date which is six (6) months after such Participant’s date of
separation from service, or, if earlier, the date of the Participant’s death. 
 19.5 Unforeseeable
Emergency. The Committee shall have the authority to provide in the Award Agreement evidencing any Award subject to Section 409A for distribution in settlement of all or a portion of such Award in the event that a Participant
establishes, to the satisfaction of the Committee, the occurrence of an Unforeseeable Emergency. In such event, the amount(s) distributed with respect to such Unforeseeable Emergency cannot exceed the amounts necessary to satisfy such Unforeseeable
Emergency plus amounts necessary to pay taxes reasonably anticipated as a result of such distribution(s), after taking into account the extent to which such hardship is or may be relieved through reimbursement or compensation by insurance or
otherwise or by liquidation of the Participant’s assets (to the extent the liquidation of such assets would not itself cause severe financial hardship). All distributions with respect to an Unforeseeable Emergency shall be made in a lump sum as
soon as practicable following the Committee’s determination that an Unforeseeable Emergency has occurred. 
 The occurrence of an
Unforeseeable Emergency shall be judged and determined by the Committee. The Committee’s decision with respect to whether an Unforeseeable Emergency has 

  

 36 

 
occurred and the manner in which, if at all, the distribution in settlement of an Award shall be altered or modified, shall be final, conclusive, and not
subject to approval or appeal. 
 19.6 Disabled. The Committee shall have the authority to provide in any Award subject
to Section 409A for distribution in settlement of such Award in the event that the Participant becomes Disabled. A Participant shall be considered “Disabled” if either: 
 (a) the Participant is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental
impairment which can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months, or 
 (b) the Participant is, by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than twelve
(12) months, receiving income replacement benefits for a period of not less than three (3) months under an accident and health plan covering employees of the Participant’s employer. 
 All distributions payable by reason of a Participant becoming Disabled shall be paid in a lump sum or in periodic installments as established by the
Participant’s Election, commencing as soon as practicable following the date the Participant becomes Disabled. If the Participant has made no Election with respect to distributions upon becoming Disabled, all such distributions shall be paid in
a lump sum as soon as practicable following the date the Participant becomes Disabled. 
 19.7 Death. If a Participant
dies before complete distribution of amounts payable upon settlement of an Award subject to Section 409A, such undistributed amounts shall be distributed to his or her beneficiary under the distribution method for death established by the
Participant’s Election as soon as administratively possible following receipt by the Committee of satisfactory notice and confirmation of the Participant’s death. If the Participant has made no Election with respect to distributions upon
death, all such distributions shall be paid in a lump sum as soon as practicable following the date of the Participant’s death. 
 19.8 No Acceleration of Distributions. Notwithstanding anything to the contrary herein, this Plan does not permit the acceleration of the time or schedule of any distribution under this Plan, except as provided by Section 409A
and/or the Secretary of the U.S. Treasury. 
  

	 	20.	MISCELLANEOUS PROVISIONS. 

 20.1 Repurchase Rights. Shares issued under the Plan may be subject to one or more repurchase options, or other
conditions and restrictions as determined by the Committee in its discretion at the time the Award is granted. The Company shall have the right to assign at any time any repurchase right it may have, whether or not such right is then exercisable, to
one or more persons as may be selected by the Company. Upon request by the Company, each Participant shall execute any agreement evidencing such transfer restrictions prior to the receipt of shares of Stock hereunder and shall promptly present to
the Company any and all certificates 

  

 37 

 
representing shares of Stock acquired hereunder for the placement on such certificates of appropriate legends evidencing any such transfer restrictions.

 20.2 Forfeiture Events. 
 (a) The Committee may specify in an Award Agreement that the Participant’s rights, payments, and benefits with respect to an Award
shall be subject to reduction, cancellation, forfeiture, or recoupment upon the occurrence of specified events, in addition to any otherwise applicable vesting or performance conditions of an Award. Such events may include, but shall not be limited
to, termination of Service for Cause or any act by a Participant, whether before or after termination of Service, that would constitute Cause for termination of Service. 
 (b) If the Company is required to prepare an accounting restatement due to the material noncompliance of the Company, as a result of
misconduct, with any financial reporting requirement under the securities laws, any Participant who knowingly or through gross negligence engaged in the misconduct, or who knowingly or through gross negligence failed to prevent the misconduct, and
any Participant who is one of the individuals subject to automatic forfeiture under Section 304 of the Sarbanes-Oxley Act of 2002, shall reimburse the Company the amount of any payment in settlement of an Award earned or accrued during the
twelve- (12-) month period following the first public issuance or filing with the United States Securities and Exchange Commission (whichever first occurred) of the financial document embodying such financial reporting requirement. 
 20.3 Provision of Information. Each Participant shall be given access to information concerning the Company equivalent to that
information generally made available to the Company’s common shareholders. 
 20.4 Rights as Employee, Consultant or
Director. No person, even though eligible pursuant to Section 5, shall have a right to be selected as a Participant, or, having been so selected, to be selected again as a Participant. Nothing in the Plan or any Award granted under the Plan
shall confer on any Participant a right to remain an Employee, Consultant or Director or interfere with or limit in any way any right of a Participating Company to terminate the Participant’s Service at any time. To the extent that an Employee
of a Participating Company other than the Company receives an Award under the Plan, that Award shall in no event be understood or interpreted to mean that the Company is the Employee’s employer or that the Employee has an employment
relationship with the Company. 
 20.5 Rights as a Shareholder. A Participant shall have no rights as a shareholder
with respect to any shares covered by an Award until the date of the issuance of such shares (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company). No adjustment shall be made for
dividends, distributions or other rights for which the record date is prior to the date such shares are issued, except as provided in Section 4.6 or another provision of the Plan. 
 20.6 Delivery of Title to Shares. Subject to any governing rules or regulations, the Company shall issue or cause to be issued the
shares of Stock acquired pursuant 

  

 38 

 
to an Award and shall deliver such shares to or for the benefit of the Participant by means of one or more of the following: (a) by delivering to the
Participant evidence of book entry shares of Stock credited to the account of the Participant; (b) by depositing such shares of Stock for the benefit of the Participant with any broker with which the Participant has an account relationship; or
(c) by delivering such shares of Stock to the Participant in certificate form. 
 20.7 Fractional Shares. The
Company shall not be required to issue fractional shares upon the exercise or settlement of any Award. 
 20.8 Retirement
and Welfare Plans. Neither Awards made under this Plan nor shares of Stock or cash paid pursuant to such Awards may be included as “compensation” for purposes of computing the benefits payable to any Participant under any Participating
Company’s retirement plans (both qualified and non-qualified) or welfare benefit plans unless such other plan expressly provides that such compensation shall be taken into account in computing a Participant’s benefit. 
 20.9 Beneficiary Designation. Subject to local laws and procedures, each Participant may file with the Company a written
designation of a beneficiary who is to receive any benefit under the Plan to which the Participant is entitled in the event of such Participant’s death before he or she receives any or all of such benefit. Each designation will revoke all prior
designations by the same Participant, shall be in a form prescribed by the Company, and will be effective only when filed by the Participant in writing with the Company during the Participant’s lifetime. If a married Participant designates a
beneficiary other than the Participant’s spouse, the effectiveness of such designation may be subject to the consent of the Participant’s spouse. If a Participant dies without an effective designation of a beneficiary who is living at the
time of the Participant’s death, the Company will pay any remaining unpaid benefits to the Participant’s legal representative. 
 20.10 Severability. If any one or more of the provisions (or any part thereof) of this Plan shall be held invalid, illegal or unenforceable in any respect, such provision shall be modified so as to make it
valid, legal and enforceable, and the validity, legality and enforceability of the remaining provisions (or any part thereof) of the Plan shall not in any way be affected or impaired thereby. 
 20.11 No Constraint on Corporate Action. Nothing in this Plan shall be construed to: (a) limit, impair, or otherwise affect
the Company’s or another Participating Company’s right or power to make adjustments, reclassifications, reorganizations, or changes of its capital or business structure, or to merge or consolidate, or dissolve, liquidate, sell, or transfer
all or any part of its business or assets; or (b) limit the right or power of the Company or another Participating Company to take any action which such entity deems to be necessary or appropriate. 
 20.12 Unfunded Obligation. Participants shall have the status of general unsecured creditors of the Company. Any amounts payable to
Participants pursuant to the Plan shall be unfunded and unsecured obligations for all purposes, including, without limitation, Title I of the Employee Retirement Income Security Act of 1974. No Participating Company shall be required to
segregate any monies from its general funds, or to create any trusts, or 

  

 39 

 
establish any special accounts with respect to such obligations. The Company shall retain at all times beneficial ownership of any investments, including
trust investments, which the Company may make to fulfill its payment obligations hereunder. Any investments or the creation or maintenance of any trust or any Participant account shall not create or constitute a trust or fiduciary relationship
between the Committee or any Participating Company and a Participant, or otherwise create any vested or beneficial interest in any Participant or the Participant’s creditors in any assets of any Participating Company. The Participants shall
have no claim against any Participating Company for any changes in the value of any assets which may be invested or reinvested by the Company with respect to the Plan. 
 20.13 Choice of Law. Except to the extent governed by applicable federal law, the validity, interpretation, construction and
performance of the Plan and each Award Agreement shall be governed by the laws of the State of Washington, without regard to its conflict of law rules. 
 IN WITNESS WHEREOF, the undersigned Secretary of the Company certifies that the foregoing sets forth the Northstar Neuroscience, Inc. 2006 Performance Incentive Plan as duly adopted by the Board on February 16,
2006. 
  

	
	
	 /S/    RAYMOND
CALVERT

	 Secretary

  

 40 

 NORTHSTAR NEUROSCIENCE, INC. 
 NOTICE OF GRANT OF STOCK OPTION 
 ________________________ (the
“Optionee”) has been granted an option (the “Option”) to purchase certain shares of Stock of Northstar Neuroscience, Inc. pursuant to the Northstar Neuroscience, Inc. 2006
Performance Incentive Plan (the “Plan”), as follows: 
  

					
	 Grant Number:
	  	_____________________
		
	Date of Option Grant:	  	_____________________
		
	Number of Option Shares:	  	_____________________
		
	Exercise Price:	  	$____________________per share
		
	Initial Vesting Date:	  	_____________________(i.e., the date on which you first vest in some portion of your Option Shares)
		
	Option Expiration Date:	  	The date ten (10) years after the Date of Option Grant.
		
	Tax Status of Option:	  	_____________________Stock Option. (Enter “Incentive” or “Nonstatutory.” If blank, this Option will be a Nonstatutory Stock Option.)
	
	Vested Shares: Except as provided in the Stock Option Agreement, the number of Vested Shares (disregarding any resulting fractional share) as of any date is determined by
multiplying the Number of Option Shares by the “Vested Ratio” determined as of such date as follows:
			
	 	  	 	  	Vested Ratio
		  	Prior to Initial Vesting Date	  	0
		  	On Initial Vesting Date, provided the Optionee’s Service has not terminated prior to such date	  	1/4
			
		  	Plus:	  	
			
		  	For each full month of the Optionee’s continuous Service from Initial Vesting Date until the Vested Ratio equals 1/1, an additional	  	1/48

 By their signatures below, the Company and the Optionee agree that the Option is governed by this
Notice and by the provisions of the Plan and the Stock Option Agreement. The Optionee acknowledges that the Optionee has read and is familiar with their provisions, and hereby accepts the Option subject to all of their terms and conditions.

  

									
	 NORTHSTAR NEUROSCIENCE, INC.
	 		 		 	OPTIONEE
					
	 By:
	 	  	 		 		 	  
		 		 		 		 	 Signature

					
	 Its:
	 	  	 		 		 	  
		 		 		 		 	 Date

					
	 Address:
	 		 		 		 	  
		 		 		 		 	 Address

					
		 		 		 		 	  

 NORTHSTAR NEUROSCIENCE, INC. 
 STOCK OPTION AGREEMENT 
 Northstar Neuroscience, Inc. has granted to the
individual (the “Optionee”) named in the Notice of Grant of Stock Option (the “Notice”) to which this Stock Option Agreement (the “Option
Agreement”) is attached an option (the “Option”) to purchase certain shares of Stock upon the terms and conditions set forth in the Notice and this Option Agreement. The Option has been
granted pursuant to and shall in all respects be subject to the terms and conditions of the Northstar Neuroscience, Inc. 2006 Performance Incentive Plan (the “Plan”), as amended to the Date of Option Grant, the
provisions of which are incorporated herein by reference. By signing the Notice, the Optionee: (a) represents that the Optionee has received copies of, and has read and is familiar with the terms and conditions of, the Notice, the Plan and this
Option Agreement, (b) accepts the Option subject to all of the terms and conditions of the Notice, the Plan and this Option Agreement, and (c) agrees to accept as binding, conclusive and final all decisions or interpretations of the Board
or Committee upon any questions arising under the Notice, the Plan or this Option Agreement. 
  

	 	1.	DEFINITIONS AND CONSTRUCTION. 

 1.1 Definitions. Unless otherwise defined herein, capitalized terms shall have the meanings assigned to such terms in the Notice or
the Plan. 
 1.2 Construction. Captions and titles contained herein are for convenience only and shall not affect the
meaning or interpretation of any provision of this Option Agreement. Except when otherwise indicated by the context, the singular shall include the plural and the plural shall include the singular. Use of the term “or” is not intended to
be exclusive, unless the context clearly requires otherwise. 
  

	 	2.	TAX CONSEQUENCES. 

 2.1 Tax Status of Option. This Option is intended to have the tax status designated in the Notice. 
 (a) Incentive Stock Option. If the Notice so designates, this Option is intended to be an Incentive Stock Option within the
meaning of Section 422(b) of the Code, but the Company does not represent or warrant that this Option qualifies as such. The Optionee should consult with the Optionee’s own tax advisor regarding the tax effects of this Option and the
requirements necessary to obtain favorable income tax treatment under Section 422 of the Code, including, but not limited to, holding period requirements. (NOTE TO OPTIONEE: If the Option is exercised more than three (3) months after the
date on which you cease to be an Employee (other than by reason of your death or permanent and total disability as defined in Section 22(e)(3) of the Code), the Option will be treated as a Nonstatutory Stock Option and not as an Incentive Stock
Option to the extent required by Section 422 of the Code.) 
  

 1 

 (b) Nonstatutory Stock Option. If the Notice so designates, this Option is
intended to be a Nonstatutory Stock Option and shall not be treated as an Incentive Stock Option within the meaning of Section 422(b) of the Code. 
 2.2 ISO Fair Market Value Limitation. If the Notice designates this Option as an Incentive Stock Option, then to the extent that the Option (together with all Incentive Stock Options granted to the
Optionee under all stock option plans of the Participating Company Group, including the Plan) becomes exercisable for the first time during any calendar year for shares having a Fair Market Value greater than One Hundred Thousand Dollars ($100,000),
the portion of such options which exceeds such amount will be treated as Nonstatutory Stock Options. For purposes of this Section 2.2, options designated as Incentive Stock Options are taken into account in the order in which they were granted,
and the Fair Market Value of stock is determined as of the time the option with respect to such stock is granted. If the Code is amended to provide for a different limitation from that set forth in this Section 2.2, such different limitation
shall be deemed incorporated herein effective as of the date required or permitted by such amendment to the Code. If the Option is treated as an Incentive Stock Option in part and as a Nonstatutory Stock Option in part by reason of the limitation
set forth in this Section 2.2, the Optionee may designate which portion of such Option the Optionee is exercising. In the absence of such designation, the Optionee shall be deemed to have exercised the Incentive Stock Option portion of the
Option first. Separate certificates representing each such portion shall be issued upon the exercise of the Option. (NOTE TO OPTIONEE: If the aggregate Exercise Price (as defined in the Notice) of the Option (that is, the Exercise Price multiplied
by the Number of Option Shares) plus the aggregate exercise price of any other Incentive Stock Options you hold (whether granted pursuant to the Plan or any other stock option plan of the Participating Company Group) is greater than $100,000, you
should contact the Chief Financial Officer of the Company to ascertain whether the entire Option qualifies as an Incentive Stock Option.) 
  

	 	3.	ADMINISTRATION. 

 All questions of interpretation concerning this Option Agreement shall be determined by the Board or Committee. All determinations by the
Board or Committee shall be final and binding upon all persons having an interest in the Option. Any Officer shall have the authority to act on behalf of the Company with respect to any matter, right, obligation, or election which is the
responsibility of or which is allocated to the Company herein, provided the Officer has apparent authority with respect to such matter, right, obligation, or election. 
  

	 	4.	EXERCISE OF THE OPTION. 

 4.1 Right to Exercise. Except as otherwise provided herein, the Option shall be exercisable on and after the Initial Vesting Date
(as defined in the Notice) and prior to the termination of the Option (as provided in Section 6) in an amount not to exceed the number of Vested Shares (as defined in the Notice) less the number of shares previously acquired upon exercise of
the Option. In no event shall the Option be exercisable for more shares than the Number of Option Shares (as defined in the Notice). 
 4.2 Method of Exercise. Exercise of the Option shall be by written notice to the Company which must state the election to exercise the Option, the number of whole shares of 

  

 2 

 
Stock for which the Option is being exercised and such other representations and agreements as to the Optionee’s investment intent with respect to such
shares as may be required pursuant to the provisions of this Option Agreement. The written notice must be signed by the Optionee and must be delivered in person, by certified or registered mail, return receipt requested, by confirmed facsimile
transmission, or by such other means as the Company may permit, to the Chief Financial Officer of the Company, or other authorized representative of the Participating Company Group, prior to the termination of the Option as set forth in
Section 6, accompanied by full payment of the aggregate Exercise Price for the number of shares of Stock being purchased. The Option shall be deemed to be exercised upon receipt by the Company of such written notice and the aggregate Exercise
Price. 
 4.3 Payment of Exercise Price. 
 (a) Forms of Consideration Authorized. Except as otherwise provided below, payment of the aggregate Exercise Price for the
number of shares of Stock for which the Option is being exercised shall be made (i) in cash, by check, or cash equivalent, (ii) by tender to the Company, or attestation to the ownership, of whole shares of Stock owned by the Optionee
having a Fair Market Value not less than the aggregate Exercise Price, to the extent permitted by the Company at the time of exercise, (iii) by means of a Cashless Exercise, to the extent permitted by the Company at the time of exercise,
(iv) by delivery of a properly executed notice electing a Net-Exercise, to the extent permitted by the Company at the time of exercise, or (v) by any combination of the foregoing. 
 (b) Limitations on Forms of Consideration. 
 (i) Tender of Stock. Notwithstanding the foregoing, the Option may not be exercised by tender to the Company, or attestation to
the ownership, of shares of Stock to the extent such tender or attestation would constitute a violation of the provisions of any law, regulation or agreement restricting the redemption of the Company’s stock. The Option may not be exercised by
tender to the Company, or attestation to the ownership, of shares of Stock unless such shares either have been owned by the Optionee for more than six (6) months (and not used for another option exercise by attestation during such period) or
were not acquired, directly or indirectly, from the Company. 
 (ii) Cashless Exercise. A “Cashless
Exercise” means the delivery of a properly executed notice together with irrevocable instructions to a broker in a form acceptable to the Company providing for the assignment to the Company of the proceeds of a sale or loan with
respect to some or all of the shares of Stock acquired upon the exercise of the Option pursuant to a program or procedure approved by the Company (including, without limitation, through an exercise complying with the provisions of Regulation T
as promulgated from time to time by the Board of Governors of the Federal Reserve System). Notwithstanding anything in the Plan or this Option Agreement to the contrary, a Cashless Exercise shall only be permitted, if at all, provided (A) the
Company has completed an underwritten public offering of its Stock pursuant to an effective registration statement filed under the Securities Act, and (B) the Company’s Stock is listed on a “national securities exchange” (as such
term is defined in the Exchange Act) or the Nasdaq National Market at the time of such proposed Cashless Exercise. 

  

 3 

 
In addition, the Company reserves, at any and all times, the right, in the Company’s sole and absolute discretion, to decline to approve or terminate
any such program or procedure. 
 4.4 Tax Withholding. At the time the Option is exercised, in whole or in part, or at
any time thereafter as requested by the Company, the Optionee hereby authorizes withholding from payroll and any other amounts payable to the Optionee, and otherwise agrees to make adequate provision for (including by means of a Cashless Exercise to
the extent permitted by the Company), any sums required to satisfy the federal, state, local and foreign tax withholding obligations of the Participating Company Group, if any, which arise in connection with the Option, including, without
limitation, obligations arising upon (i) the exercise, in whole or in part, of the Option, (ii) the transfer, in whole or in part, of any shares acquired upon exercise of the Option, (iii) the operation of any law or regulation
providing for the imputation of interest, or (iv) the lapsing of any restriction with respect to any shares acquired upon exercise of the Option. The Option is not exercisable unless the tax withholding obligations of the Participating Company
Group are satisfied. Accordingly, the Company shall have no obligation to deliver shares of Stock until the tax withholding obligations of the Participating Company Group have been satisfied by the Optionee. 
 4.5 Certificate Registration. Except in the event the Exercise Price is paid by means of a Cashless Exercise, the certificate for
the shares as to which the Option is exercised shall be registered in the name of the Optionee, or, if applicable, in the names of the heirs of the Optionee. 
 4.6 Restrictions on Grant of the Option and Issuance of Shares. The grant of the Option and the issuance of shares of Stock upon
exercise of the Option shall be subject to compliance with all applicable requirements of federal, state or foreign law with respect to such securities. The Option may not be exercised if the issuance of shares of Stock upon exercise would
constitute a violation of any applicable federal, state or foreign securities laws or other law or regulations or the requirements of any stock exchange or market system upon which the Stock may then be listed. In addition, the Option may not be
exercised unless (i) a registration statement under the Securities Act shall at the time of exercise of the Option be in effect with respect to the shares issuable upon exercise of the Option or (ii) in the opinion of legal counsel to the
Company, the shares issuable upon exercise of the Option may be issued in accordance with the terms of an applicable exemption from the registration requirements of the Securities Act. THE OPTIONEE IS CAUTIONED THAT THE OPTION MAY NOT BE EXERCISED
UNLESS THE FOREGOING CONDITIONS ARE SATISFIED. ACCORDINGLY, THE OPTIONEE MAY NOT BE ABLE TO EXERCISE THE OPTION WHEN DESIRED EVEN THOUGH THE OPTION IS VESTED. The inability of the Company to obtain from any regulatory body having jurisdiction the
authority, if any, deemed by the Company’s legal counsel to be necessary to the lawful issuance and sale of any shares subject to the Option shall relieve the Company of any liability in respect of the failure to issue or sell such shares as to
which such requisite authority shall not have been obtained. As a condition to the exercise of the Option, the Company may require the Optionee to satisfy any qualifications that may be necessary or appropriate, to evidence compliance with any
applicable law or regulation and to make any representation or warranty with respect thereto as may be requested by the Company. 
  

 4 

 4.7 Fractional Shares. The Company shall not be required to issue fractional
shares upon the exercise of the Option. 
  

	 	5.	NONTRANSFERABILITY OF THE OPTION. 

 The Option may be exercised during the lifetime of the Optionee only by the Optionee or the Optionee’s guardian or legal
representative and may not be assigned or transferred in any manner except by will or by the laws of descent and distribution. Following the death of the Optionee, the Option, to the extent provided in Section 7, may be exercised by the
Optionee’s legal representative or by any person empowered to do so under the deceased Optionee’s will or under the then applicable laws of descent and distribution. 
  

	 	6.	TERMINATION OF THE OPTION. 

 The Option shall terminate and may no longer be exercised after the first to occur of (a) the Option Expiration Date, (b) the
termination of the Optionee’s Service to the extent that the Option is unvested on such date, (c) the last date for exercising the Option following termination of the Optionee’s Service as described in Section 7, or (d) a
Change in Control to the extent provided in Section 8. 
  

	 	7.	EFFECT OF TERMINATION OF SERVICE. 

 7.1 Option Exercisability. 
 (a) Disability. If the Optionee’s Service terminates because of the Disability of the Optionee, the Option, to the extent vested and exercisable on the date on which the Optionee’s Service
terminated, may be exercised by the Optionee (or the Optionee’s guardian or legal representative) at any time prior to the expiration of twelve (12) months after the date on which the Optionee’s Service terminated, but in any event no
later than the Option Expiration Date. 
 (b) Death. If the Optionee’s Service terminates because of the
death of the Optionee, the Option, to the extent vested and exercisable on the date on which the Optionee’s Service terminated, may be exercised by the Optionee’s legal representative or other person who acquired the right to exercise the
Option by reason of the Optionee’s death at any time prior to the expiration of twelve (12) months after the date on which the Optionee’s Service terminated, but in any event no later than the Option Expiration Date. The
Optionee’s Service shall be deemed to have terminated on account of death if the Optionee dies within three (3) months after the Optionee’s termination of Service (other than a termination for Cause). 
 (c) Termination for Cause. Notwithstanding any other provision of the Plan or this Option Agreement to the contrary, if the
Optionee’s Service is terminated for Cause, the Option shall terminate and cease to be exercisable immediately upon such termination of Service. 
 (d) Other Termination of Service. If the Optionee’s Service terminates for any reason, except Disability, death or Cause, the Option, to the extent vested and exercisable by the Optionee on the date
on which the Optionee’s Service terminated, may be 

  

 5 

 
exercised by the Optionee at any time prior to the expiration of three (3) months (or such other longer period of time as determined by the Board or
Committee, in its discretion) after the date on which the Optionee’s Service terminated, but in any event no later than the Option Expiration Date. 
 7.2 Extension if Exercise Prevented by Law. Notwithstanding the foregoing, except termination for Cause, if the exercise of the Option within the applicable time periods set forth in Section 7.1 is
prevented by the provisions of Section 4.6, the Option shall remain exercisable until three (3) months after the date the Optionee is notified by the Company that the Option is exercisable, but in any event no later than the Option
Expiration Date. 
 7.3 Extension if Optionee Subject to Section 16(b). Notwithstanding the
foregoing, except termination for Cause, if a sale within the applicable time periods set forth in Section 7.1 of shares acquired upon the exercise of the Option would subject the Optionee to suit under Section 16(b) of the Exchange Act,
the Option shall remain exerciseable until the earliest to occur of (i) the tenth (10th) day following the date on which a sale of such shares by the Optionee would no longer be subject to such suit, (ii) the one hundred and ninetieth
(190th) day after the Optionee’s termination of Service, or (iii) the Option Expiration Date. 
  

	 	8.	CHANGE IN CONTROL. 

 In the event of a Change in Control, the surviving, continuing, successor, or purchasing corporation or other business entity or parent
thereof, as the case may be (the “Acquiring Corporation”), may, without the consent of the Optionee, either assume the Company’s rights and obligations under the Option or substitute for the Option a
substantially equivalent option for the Acquiring Corporation’s stock. The Option shall terminate and cease to be outstanding effective as of the date of the Change in Control to the extent that the Option is neither assumed or substituted for
by the Acquiring Corporation in connection with the Change in Control nor exercised as of the date of the Change in Control. Notwithstanding the foregoing, shares acquired upon exercise of the Option prior to the Change in Control and any
consideration received pursuant to the Change in Control with respect to such shares shall continue to be subject to all applicable provisions of the Option Agreement except as otherwise provided herein. Furthermore, notwithstanding the foregoing,
if the corporation the stock of which is subject to the Option immediately prior to an Ownership Change Event described in Section 2.1(ee)(i) of the Plan constituting a Change in Control is the surviving or continuing corporation and
immediately after such Ownership Change Event less than fifty percent (50%) of the total combined voting power of its voting stock is held by another corporation or by other corporations that are members of an affiliated group within the
meaning of Section 1504(a) of the Code without regard to the provisions of Section 1504(b) of the Code, the Option shall not terminate unless the Board or Committee otherwise provides in its discretion. 
  

	 	9.	ADJUSTMENTS FOR CHANGES IN CAPITAL STRUCTURE.

 Subject to any required action by the shareholders of the Company, in the event of any change in the Stock
effected without receipt of consideration by the Company, whether through merger, consolidation, reorganization, reincorporation, recapitalization, reclassification, stock dividend, stock split, reverse stock split, split-up, split-off, spin-off,
combination of shares, 

  

 6 

 
exchange of shares, or similar change in the capital structure of the Company, or in the event of payment of a dividend or distribution to the shareholders
of the Company in a form other than Stock (excepting normal cash dividends) that has a material effect on the Fair Market Value of shares of Stock, appropriate and proportionate adjustments shall be made in the number, Exercise Price and class of
shares subject to the Option, in order to prevent dilution or enlargement of the Optionee’s rights under the Option. For purposes of the foregoing, conversion of any convertible securities of the Company shall not be treated as “effected
without receipt of consideration by the Company.” If a majority of the shares which are of the same class as the shares that are subject to the Option are exchanged for, converted into, or otherwise become (whether or not pursuant to an
Ownership Change Event) shares of another corporation (the “New Shares”), the Board or Committee may unilaterally amend the Option to provide that the Option is exercisable for New Shares. In the event of any such amendment,
the Number of Option Shares and the Exercise Price shall be adjusted in a fair and equitable manner as determined by the Board or Committee, in its discretion. Notwithstanding the foregoing, any fractional share resulting from an adjustment pursuant
to this Section 9 shall be rounded down to the nearest whole number, and in no event may the Exercise Price of the Option be decreased to an amount less than the par value, if any, of the stock subject to the Option. Such adjustments shall be
determined by the Board or Committee, and its determination shall be final, binding and conclusive. 
  

	 	10.	RIGHTS AS A SHAREHOLDER, EMPLOYEE OR
CONSULTANT. 

 The Optionee shall have no rights as a
shareholder with respect to any shares covered by the Option until the date of the issuance of a certificate for the shares for which the Option has been exercised (as evidenced by the appropriate entry on the books of the Company or of a duly
authorized transfer agent of the Company). No adjustment shall be made for dividends, distributions or other rights for which the record date is prior to the date such certificate is issued, except as provided in Section 9. If the Optionee is
an Employee, the Optionee understands and acknowledges that, except as otherwise provided in a separate, written employment agreement between a Participating Company and the Optionee, the Optionee’s employment is “at will” and is for
no specified term. Nothing in this Option Agreement shall confer upon the Optionee any right to continue in the Service of a Participating Company or interfere in any way with any right of the Participating Company Group to terminate the
Optionee’s Service as an Employee or Consultant, as the case may be, at any time. 
  

	 	11.	NOTICE OF SALES UPON DISQUALIFYING DISPOSITION.

 The Optionee shall dispose of the shares acquired pursuant to the Option only in accordance with the
provisions of the Plan and this Option Agreement. In addition, if the Notice designates this Option as an Incentive Stock Option, the Optionee shall (a) promptly notify the Chief Financial Officer of the Company if the Optionee disposes
of any of the shares acquired pursuant to the Option within one (1) year after the date the Optionee exercises all or part of the Option or within two (2) years after the Date of Option Grant and (b) provide the Company with a
description of the circumstances of such disposition. Until such time as the Optionee disposes of such shares in a manner consistent with the provisions of this Option Agreement, unless otherwise expressly authorized by the Company, the Optionee
shall hold all shares acquired pursuant to the Option in the Optionee’s name (and not in the name of any nominee) for the one- 

  

 7 

 
year period immediately after the exercise of the Option and the two-year period immediately after Date of Option Grant. At any time during the one-year or
two-year periods set forth above, the Company may place a legend on any certificate representing shares acquired pursuant to the Option requesting the transfer agent for the Company’s stock to notify the Company of any such transfers. The
obligation of the Optionee to notify the Company of any such transfer shall continue notwithstanding that a legend has been placed on the certificate pursuant to the preceding sentence. 
  

	 	12.	LEGENDS. 

 The Company may at any time place legends referencing any applicable federal, state or foreign securities law restrictions on all certificates representing shares of stock subject to the provisions of this Option
Agreement. The Optionee shall, at the request of the Company, promptly present to the Company any and all certificates representing shares acquired pursuant to the Option in the possession of the Optionee in order to carry out the provisions of this
Section. Unless otherwise specified by the Company, legends placed on such certificates may include, but shall not be limited to, the following: 
 12.1 “THE SHARES EVIDENCED BY THIS CERTIFICATE WERE ISSUED BY THE CORPORATION TO THE REGISTERED HOLDER UPON EXERCISE OF AN INCENTIVE STOCK OPTION AS DEFINED IN SECTION 422 OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (“ISO”). IN ORDER TO OBTAIN THE PREFERENTIAL TAX TREATMENT AFFORDED TO ISOs, THE SHARES SHOULD NOT BE TRANSFERRED PRIOR TO [INSERT DISQUALIFYING DISPOSITION DATE HERE]. SHOULD THE REGISTERED HOLDER ELECT TO TRANSFER
ANY OF THE SHARES PRIOR TO THIS DATE AND FOREGO ISO TAX TREATMENT, THE TRANSFER AGENT FOR THE SHARES SHALL NOTIFY THE CORPORATION IMMEDIATELY. THE REGISTERED HOLDER SHALL HOLD ALL SHARES PURCHASED UNDER THE INCENTIVE STOCK OPTION IN THE REGISTERED
HOLDER’S NAME (AND NOT IN THE NAME OF ANY NOMINEE) PRIOR TO THIS DATE OR UNTIL TRANSFERRED AS DESCRIBED ABOVE.” 
  

	 	13.	MISCELLANEOUS PROVISIONS. 

 13.1 Binding Effect. Subject to the restrictions on transfer set forth herein, this Option Agreement shall inure to the benefit of
and be binding upon the parties hereto and their respective heirs, executors, administrators, successors and assigns. 
 13.2
Termination or Amendment. The Board or Committee may terminate or amend the Plan or the Option at any time; provided, however, that except as provided in Section 8 in connection with a Change in Control, no such termination or amendment
may adversely affect the Option or any unexercised portion hereof without the consent of the Optionee unless such termination or amendment is necessary to comply with any applicable law or government regulation or is required to enable the Option,
if designated an Incentive Stock Option in the Notice, to qualify as an Incentive Stock Option. No amendment or addition to this Option Agreement shall be effective unless in writing. 
  

 8 

 13.3 Notices. Any notice required or permitted hereunder shall be given in writing
and shall be deemed effectively given (except to the extent that this Option Agreement provides for effectiveness only upon actual receipt of such notice) upon personal delivery or upon deposit in the United States Post Office, by registered or
certified mail, with postage and fees prepaid, addressed to the other party at the address shown below that party’s signature or at such other address as such party may designate in writing from time to time to the other party. 
 13.4 Integrated Agreement. The Notice, this Option Agreement and the Plan constitute the entire understanding and agreement of the
Optionee and the Participating Company Group with respect to the subject matter contained herein or therein and supersedes any prior agreements, understandings, restrictions, representations, or warranties among the Optionee and the Participating
Company Group with respect to such subject matter other than those as set forth or provided for herein or therein. To the extent contemplated herein or therein, the provisions of the Notice and the Option Agreement shall survive any exercise of the
Option and shall remain in full force and effect. 
 13.5 Applicable Law. This Option Agreement shall be governed by
the laws of the State of Washington as such laws are applied to agreements between Washington residents entered into and to be performed entirely within the State of Washington. 
 13.6 Counterparts. The Notice may be executed in counterparts, each of which shall be deemed an original, but all of which together
shall constitute one and the same instrument. 
  

 9 

					
		 	  ̈ Incentive Stock
Option
	  	Optionee: _______________________________
		 	  ̈ Nonstatutory Stock
Option
	  	
		 		  	        Date: ______________________________

 STOCK OPTION EXERCISE NOTICE 
 Northstar Neuroscience, Inc. 
 Attention: Chief Financial Officer 
 2401 Fourth Avenue, Suite 500 
 Seattle, WA 98121 
 Ladies and Gentlemen:

 1. Option. I was granted an option (the “Option”) to purchase shares of the common
stock (the “Shares”) of Northstar Neuroscience, Inc. (the “Company”) pursuant to the Company’s 2006 Performance Incentive Plan (the
“Plan”), my Notice of Grant of Stock Option (the “Notice”) and my Stock Option Agreement (the “Option Agreement”) as follows:

  

				
	Grant Number:	  	 	__________________
	Date of Option Grant:	  	 	__________________
	Number of Option Shares:	  	 	__________________
	Exercise Price per Share:	  	$	__________________

 2. Exercise of Option. I hereby elect to exercise the Option to purchase the
following number of Shares, all of which are Vested Shares in accordance with the Notice and the Option Agreement: 
  

				
	Total Shares Purchased:	  	 	__________________
	Total Exercise Price (Total Shares X Price per Share)	  	$	__________________

 3. Payments. I enclose payment in full of the total exercise price for the Shares in
the following form(s), as authorized by my Option Agreement: 
  

			
	 ̈ Cash:	  	$______________________
	 ̈ Check:	  	$______________________
	 ̈ Tender of Company Stock:	  	Contact Plan Administrator
	 ̈ Cashless Exercise:	  	Contact Plan Administrator
	 ̈ Net-Exercise:	  	Contact Plan Administrator

  

 1 

 4. Tax Withholding. I authorize payroll withholding and otherwise will make adequate
provision for the federal, state, local and foreign tax withholding obligations of the Company, if any, in connection with the Option. If I am exercising a Nonstatutory Stock Option, I enclose payment in full of my withholding taxes, if any, as
follows: 
 (Contact Plan Administrator for amount of tax due.) 
  

			
	  ̈ Cash:
	  	$ ______________________
	  ̈ Check:
	  	$ ______________________

 5. Optionee Information. 
  

			
	My address is:	 	 ___________________________________________________________________

		 	  
 ___________________________________________________________________

	
	
	 My Social Security Number is:    
________________________________________________________

 6. Notice of Disqualifying Disposition. If the Option is an Incentive Stock Option,
I agree that I will promptly notify the Chief Financial Officer of the Company if I transfer any of the Shares within one (1) year from the date I exercise all or part of the Option or within two (2) years of the Date of Option Grant.

 7. Binding Effect. I agree that the Shares are being acquired in accordance with and subject to the terms, provisions and
conditions of the Option Agreement, to all of which I hereby expressly assent. This Agreement shall inure to the benefit of and be binding upon my heirs, executors, administrators, successors and assigns. 
 I understand that I am purchasing the Shares pursuant to the terms of the Plan, the Notice and my Option Agreement, copies of which I have received and
carefully read and understand. 
  

	
	Very truly yours,
	
	   
	(Signature)

  

			
	Receipt of the above is hereby acknowledged.
	
	Northstar Neuroscience, Inc.
		
	By:	 	  
		
	Title:	 	  
		
	Dated:	 	  

  

 2 

 NORTHSTAR NEUROSCIENCE, INC. 
 STOCK OPTION AGREEMENT 
 (Immediately Exercisable) 
 Northstar Neuroscience, Inc. has granted to the individual (the “Optionee”) named in the Notice of Grant of
Stock Option (the “Notice”) to which this Stock Option Agreement (the “Option Agreement”) is attached an option (the “Option”) to
purchase certain shares of Stock upon the terms and conditions set forth in the Notice and this Option Agreement. The Option has been granted pursuant to and shall in all respects be subject to the terms and conditions of the Northstar Neuroscience,
Inc. 2006 Performance Incentive Plan (the “Plan”), as amended to the Date of Option Grant, the provisions of which are incorporated herein by reference. By signing the Notice, the Optionee: (a) represents
that the Optionee has received copies of, and has read and is familiar with the terms and conditions of, the Notice, the Plan and this Option Agreement, (b) accepts the Option subject to all of the terms and conditions of the Notice, the Plan
and this Option Agreement, and (c) agrees to accept as binding, conclusive and final all decisions or interpretations of the Board or Committee upon any questions arising under the Notice, the Plan or this Option Agreement. 
  

	 	1.	DEFINITIONS AND CONSTRUCTION. 

 1.1 Definitions. Unless otherwise defined herein, capitalized terms shall have the meanings assigned to such terms in the Notice or
the Plan. 
 1.2 Construction. Captions and titles contained herein are for convenience only and shall not affect the
meaning or interpretation of any provision of this Option Agreement. Except when otherwise indicated by the context, the singular shall include the plural and the plural shall include the singular. Use of the term “or” is not intended to
be exclusive, unless the context clearly requires otherwise. 
  

	 	2.	TAX CONSEQUENCES. 

 2.1 Tax Status of Option. This Option is intended to have the tax status designated in the Notice. 
 (a) Incentive Stock Option. If the Notice so designates, this Option is intended to be an Incentive Stock Option within the
meaning of Section 422(b) of the Code, but the Company does not represent or warrant that this Option qualifies as such. The Optionee should consult with the Optionee’s own tax advisor regarding the tax effects of this Option and the
requirements necessary to obtain favorable income tax treatment under Section 422 of the Code, including, but not limited to, holding period requirements. (NOTE TO OPTIONEE: If the Option is exercised more than three (3) months after the
date on which you cease to be an Employee (other than by reason of your death or permanent and total disability as defined in Section 22(e)(3) of the Code), the Option will be treated as a Nonstatutory Stock Option and not as an Incentive Stock
Option to the extent required by Section 422 of the Code.) 
  

 1 

 (b) Nonstatutory Stock Option. If the Notice so designates,
this Option is intended to be a Nonstatutory Stock Option and shall not be treated as an Incentive Stock Option within the meaning of Section 422(b) of the Code. 
 2.2 ISO Fair Market Value Limitation. If the Notice designates this Option as an Incentive Stock Option, then to the extent
that the Option (together with all Incentive Stock Options granted to the Optionee under all stock option plans of the Participating Company Group, including the Plan) becomes exercisable for the first time during any calendar year for shares having
a Fair Market Value greater than One Hundred Thousand Dollars ($100,000), the portion of such options which exceeds such amount will be treated as Nonstatutory Stock Options. For purposes of this Section 2.2, options designated as Incentive
Stock Options are taken into account in the order in which they were granted, and the Fair Market Value of stock is determined as of the time the option with respect to such stock is granted. If the Code is amended to provide for a different
limitation from that set forth in this Section 2.2, such different limitation shall be deemed incorporated herein effective as of the date required or permitted by such amendment to the Code. If the Option is treated as an Incentive Stock
Option in part and as a Nonstatutory Stock Option in part by reason of the limitation set forth in this Section 2.2, the Optionee may designate which portion of such Option the Optionee is exercising. In the absence of such designation, the
Optionee shall be deemed to have exercised the Incentive Stock Option portion of the Option first. Separate certificates representing each such portion shall be issued upon the exercise of the Option. (NOTE TO OPTIONEE: If the aggregate Exercise
Price (as defined in the Notice) of the Option (that is, the Exercise Price multiplied by the Number of Option Shares) plus the aggregate exercise price of any other Incentive Stock Options you hold (whether granted pursuant to the Plan or any other
stock option plan of the Participating Company Group) is greater than $100,000, you should contact the Chief Financial Officer of the Company to ascertain whether the entire Option qualifies as an Incentive Stock Option.) 
 2.3 Election Under Section 83(b) of the Code. If the Optionee exercises this Option to purchase shares of Stock that are both
nontransferable and subject to a substantial risk of forfeiture, the Optionee understands that the Optionee should consult with the Optionee’s tax advisor regarding the advisability of filing with the Internal Revenue Service an election under
Section 83(b) of the Code, which must be filed no later than thirty (30) days after the date on which the Optionee exercises the Option. Shares acquired upon exercise of the Option are nontransferable and subject to a substantial risk of
forfeiture if, for example, (a) they are unvested and are subject to a right of the Company to repurchase such shares at the Optionee’s original purchase price if the Optionee’s Service terminates, or (b) the Optionee is an
Insider and, under certain circumstances, exercises the Option within six (6) months of the Date of Option Grant (if a class of equity security of the Company is registered under Section 12 of the Exchange Act). Failure to file an election
under Section 83(b), if appropriate, may result in adverse tax consequences to the Optionee. The Optionee acknowledges that the Optionee has been advised to consult with a tax advisor prior to the exercise of the Option regarding the tax
consequences to the Optionee of the exercise of the Option. AN ELECTION UNDER SECTION 83(b) MUST BE FILED WITHIN 30 DAYS AFTER THE DATE ON WHICH THE OPTIONEE PURCHASES SHARES. THIS TIME PERIOD CANNOT BE EXTENDED. THE OPTIONEE ACKNOWLEDGES THAT
TIMELY FILING OF A SECTION 83(b) ELECTION IS THE OPTIONEE’S SOLE RESPONSIBILITY, EVEN IF THE OPTIONEE REQUESTS THE COMPANY OR ITS REPRESENTATIVE TO FILE SUCH ELECTION ON HIS OR HER BEHALF. 
  

 2 

	 	3.	ADMINISTRATION. 

 All questions of interpretation concerning this Option Agreement shall be determined by the Board or Committee. All determinations by the
Board or Committee shall be final and binding upon all persons having an interest in the Option. Any Officer shall have the authority to act on behalf of the Company with respect to any matter, right, obligation, or election which is the
responsibility of or which is allocated to the Company herein, provided the Officer has apparent authority with respect to such matter, right, obligation, or election. 
  

	 	4.	EXERCISE OF THE OPTION. 

 4.1 Right to Exercise. 
 (a) In General. Except as otherwise provided herein, the Option shall be exercisable on and after the Initial Exercise Date (as defined in the Notice) and prior to the termination of the Option (as provided in
Section 6) in an amount not to exceed the Number of Option Shares (as defined in the Notice) less the number of shares previously acquired upon exercise of the Option, subject to the Company’s repurchase rights set forth in
Section 11. 
 (b) ISO Exercise Limitation. If this Option is designated as an Incentive Stock Option in
the Notice, then notwithstanding the provisions of Section 4.1(a) and except as provided in Section 4.1(c), the aggregate Fair Market Value of the shares of Stock with respect to which the Optionee may exercise the Option for the first
time during any calendar year, when added to the aggregate Fair Market Value of the shares subject to any other options designated as Incentive Stock Options granted to the Optionee under all stock option plans of the Participating Company Group
prior to the Date of Option Grant with respect to which such options are exercisable for the first time during the same calendar year, shall not exceed One Hundred Thousand Dollars ($100,000). For purposes of the preceding sentence, options
designated as Incentive Stock Options shall be taken into account in the order in which they were granted, and the Fair Market Value of shares of stock shall be determined as of the time the option with respect to such shares is granted. Such
limitation on exercise shall be referred to in this Option Agreement as the “ISO Exercise Limitation.” If Section 422 of the Code is amended to provide for a different limitation from that set forth in this
Section 4.1(b), the ISO Exercise Limitation shall be deemed amended effective as of the date required or permitted by such amendment to the Code. The ISO Exercise Limitation shall terminate upon the earlier of (i) the Optionee’s
termination of Service, (ii) the day immediately prior to the effective date of a Change in Control in which the Option is not assumed or substituted for by the Acquiring Corporation as provided in Section 8, or (iii) the day ten
(10) days prior to the Option Expiration Date. Upon such termination of the ISO Exercise Limitation, the Option shall be deemed a Nonstatutory Stock Option to the extent of the number of shares subject to the Option which would otherwise exceed
the ISO Exercise Limitation. 
 (c) Exception to ISO Exercise Limitation. Notwithstanding any other provision of
this Option Agreement, if compliance with the ISO Exercise Limitation as set forth 

  

 3 

 
in Section 4.1(b) will result in the exercisability of any Vested Shares being delayed more than thirty (30) days beyond the date such shares
become Vested Shares (the “Vesting Date”), the Option shall be deemed to be two (2) options. The first option shall be for the maximum portion of the Number of Option Shares that can comply with the ISO
Exercise Limitation without causing the Option to be unexercisable in the aggregate as to Vested Shares on the Vesting Date for such shares. The second option, which shall not be treated as an Incentive Stock Option as described in
section 422(b) of the Code, shall be for the balance of the Number of Option Shares; that is, those such shares which, on the respective Vesting Date for such shares, would be unexercisable if included in the first option and thereby made
subject to the ISO Exercise Limitation. Shares treated as subject to the second option shall be exercisable on the same terms and at the same time as set forth in this Option Agreement; provided, however, that (i) Section 4.1(b) shall not apply
to the second option and (ii) each such share shall become a Vested Share on the Vesting Date such share must first be allocated to the second option pursuant to the preceding sentence. Unless the Optionee specifically elects to the contrary in
the Optionee’s written notice of exercise, the first option shall be deemed to be exercised first to the maximum possible extent and then the second option shall be deemed to be exercised. 
 4.2 Method of Exercise. Exercise of the Option shall be by written notice to the Company which must state the election to exercise
the Option, the number of whole shares of Stock for which the Option is being exercised and such other representations and agreements as to the Optionee’s investment intent with respect to such shares as may be required pursuant to the
provisions of this Option Agreement. The written notice must be signed by the Optionee and must be delivered in person, by certified or registered mail, return receipt requested, by confirmed facsimile transmission, or by such other means as the
Company may permit, to the Chief Financial Officer of the Company, or other authorized representative of the Participating Company Group, prior to the termination of the Option as set forth in Section 6, accompanied by (i) full payment of
the aggregate Exercise Price for the number of shares of Stock being purchased and (ii) an executed copy, if required herein, of the then current form of escrow agreement referenced below. The Option shall be deemed to be exercised upon receipt
by the Company of such written notice, the aggregate Exercise Price, and, if required by the Company, such executed agreement. 
 4.3 Payment of Exercise Price. 
 (a) Forms of Consideration Authorized. Except as otherwise
provided below, payment of the aggregate Exercise Price for the number of shares of Stock for which the Option is being exercised shall be made (i) in cash, by check, or cash equivalent, (ii) by tender to the Company, or attestation to the
ownership, of whole shares of Stock owned by the Optionee having a Fair Market Value not less than the aggregate Exercise Price, to the extent permitted by the Company at the time of exercise, (iii) by means of a Cashless Exercise, as defined
in Section 4.3(b), to the extent permitted by the Company at the time of exercise, (iv) by delivery of a properly executed notice electing a Net-Exercise, to the extent permitted by the Company at the time of exercise, or (v) by any
combination of the foregoing. 
  

 4 

 (b) Limitations on Forms of Consideration. 
 (i) Tender of Stock. Notwithstanding the foregoing, the Option may not be exercised by tender to the Company, or attestation to
the ownership, of shares of Stock to the extent such tender or attestation would constitute a violation of the provisions of any law, regulation or agreement restricting the redemption of the Company’s stock. The Option may not be exercised by
tender to the Company, or attestation to the ownership, of shares of Stock unless such shares either have been owned by the Optionee for more than six (6) months (and not used for another option exercise by attestation during such period) or
were not acquired, directly or indirectly, from the Company. 
 (ii) Cashless Exercise. A “Cashless
Exercise” means the delivery of a properly executed notice together with irrevocable instructions to a broker in a form acceptable to the Company providing for the assignment to the Company of the proceeds of a sale or loan with
respect to some or all of the shares of Stock acquired upon the exercise of the Option pursuant to a program or procedure approved by the Company (including, without limitation, through an exercise complying with the provisions of Regulation T
as promulgated from time to time by the Board of Governors of the Federal Reserve System). Notwithstanding anything in the Plan or this Option Agreement to the contrary, a Cashless Exercise shall only be permitted, if at all, provided (A) the
Company has completed an underwritten public offering of its Stock pursuant to an effective registration statement filed under the Securities Act, and (B) the Company’s Stock is listed on a “national securities exchange” (as such
term is defined in the Exchange Act) or the Nasdaq National Market at the time of such proposed Cashless Exercise. In addition, the Company reserves, at any and all times, the right, in the Company’s sole and absolute discretion, to decline to
approve or terminate any such program or procedure. 
 4.4 Tax Withholding. At the time the Option is exercised, in
whole or in part, or at any time thereafter as requested by the Company, the Optionee hereby authorizes withholding from payroll and any other amounts payable to the Optionee, and otherwise agrees to make adequate provision for (including by means
of a Cashless Exercise to the extent permitted by the Company), any sums required to satisfy the federal, state, local and foreign tax withholding obligations of the Participating Company Group, if any, which arise in connection with the Option,
including, without limitation, obligations arising upon (i) the exercise, in whole or in part, of the Option, (ii) the transfer, in whole or in part, of any shares acquired upon exercise of the Option, (iii) the operation of any law
or regulation providing for the imputation of interest, or (iv) the lapsing of any restriction with respect to any shares acquired upon exercise of the Option. The Option is not exercisable unless the tax withholding obligations of the
Participating Company Group are satisfied. Accordingly, the Company shall have no obligation to deliver shares of Stock or to release shares of Stock from an escrow established pursuant to this Option Agreement until the tax withholding obligations
of the Participating Company Group have been satisfied by the Optionee. 
 4.5 Certificate Registration. Except in the
event the Exercise Price is paid by means of a Cashless Exercise, the certificate for the shares as to which the Option is exercised shall be registered in the name of the Optionee, or, if applicable, in the names of the heirs of the Optionee.

  

 5 

 4.6 Restrictions on Grant of the Option and Issuance of Shares. The grant of the
Option and the issuance of shares of Stock upon exercise of the Option shall be subject to compliance with all applicable requirements of federal, state or foreign law with respect to such securities. The Option may not be exercised if the issuance
of shares of Stock upon exercise would constitute a violation of any applicable federal, state or foreign securities laws or other law or regulations or the requirements of any stock exchange or market system upon which the Stock may then be listed.
In addition, the Option may not be exercised unless (i) a registration statement under the Securities Act shall at the time of exercise of the Option be in effect with respect to the shares issuable upon exercise of the Option or (ii) in
the opinion of legal counsel to the Company, the shares issuable upon exercise of the Option may be issued in accordance with the terms of an applicable exemption from the registration requirements of the Securities Act. THE OPTIONEE IS CAUTIONED
THAT THE OPTION MAY NOT BE EXERCISED UNLESS THE FOREGOING CONDITIONS ARE SATISFIED. ACCORDINGLY, THE OPTIONEE MAY NOT BE ABLE TO EXERCISE THE OPTION WHEN DESIRED EVEN THOUGH THE OPTION IS VESTED. The inability of the Company to obtain from any
regulatory body having jurisdiction the authority, if any, deemed by the Company’s legal counsel to be necessary to the lawful issuance and sale of any shares subject to the Option shall relieve the Company of any liability in respect of the
failure to issue or sell such shares as to which such requisite authority shall not have been obtained. As a condition to the exercise of the Option, the Company may require the Optionee to satisfy any qualifications that may be necessary or
appropriate, to evidence compliance with any applicable law or regulation and to make any representation or warranty with respect thereto as may be requested by the Company. 
 4.7 Fractional Shares. The Company shall not be required to issue fractional shares upon the exercise of the Option. 
  

	 	5.	NONTRANSFERABILITY OF THE OPTION. 

 The Option may be exercised during the lifetime of the Optionee only by the Optionee or the Optionee’s guardian or legal
representative and may not be assigned or transferred in any manner except by will or by the laws of descent and distribution. Following the death of the Optionee, the Option, to the extent provided in Section 7, may be exercised by the
Optionee’s legal representative or by any person empowered to do so under the deceased Optionee’s will or under the then applicable laws of descent and distribution. 
  

	 	6.	TERMINATION OF THE OPTION. 

 The Option shall terminate and may no longer be exercised after the first to occur of (a) the Option Expiration Date, (b) the
termination of the Optionee’s Service to the extent that the Option is unvested on such date, (c) the last date for exercising the Option following termination of the Optionee’s Service as described in Section 7, or (d) a
Change in Control to the extent provided in Section 8. 
  

 6 

	 	7.	EFFECT OF TERMINATION OF SERVICE. 

 7.1 Option Exercisability. 
 (a) Disability. If the Optionee’s Service terminates because of the Disability of the Optionee, the Option, to the extent vested and exercisable on the date on which the Optionee’s Service
terminated, may be exercised by the Optionee (or the Optionee’s guardian or legal representative) at any time prior to the expiration of twelve (12) months after the date on which the Optionee’s Service terminated, but in any event no
later than the Option Expiration Date. 
 (b) Death. If the Optionee’s Service terminates because of the
death of the Optionee, the Option, to the extent vested and exercisable on the date on which the Optionee’s Service terminated, may be exercised by the Optionee’s legal representative or other person who acquired the right to exercise the
Option by reason of the Optionee’s death at any time prior to the expiration of twelve (12) months after the date on which the Optionee’s Service terminated, but in any event no later than the Option Expiration Date. The
Optionee’s Service shall be deemed to have terminated on account of death if the Optionee dies within three (3) months after the Optionee’s termination of Service (other than a termination for Cause). 
 (c) Termination for Cause. Notwithstanding any other provision of the Plan or this Option Agreement to the contrary, if the
Optionee’s Service is terminated for Cause, the Option shall terminate and cease to be exercisable immediately upon such termination of Service. 
 (d) Other Termination of Service. If the Optionee’s Service terminates for any reason, except Disability, death or Cause, the Option, to the extent vested and exercisable by the Optionee on the date
on which the Optionee’s Service terminated, may be exercised by the Optionee at any time prior to the expiration of three (3) months (or such other longer period of time as determined by the Board or Committee, in its discretion) after the
date on which the Optionee’s Service terminated, but in any event no later than the Option Expiration Date. 
 7.2
Additional Limitations on Option Exercise. Notwithstanding the provisions of Section 7.1, the Option may not be exercised after the Optionee’s termination of Service to the extent that the shares to be acquired upon exercise of the
Option would be subject to the Unvested Share Repurchase Option as provided in Section 11. 
 7.3 Extension if
Exercise Prevented by Law. Notwithstanding the foregoing, except termination for Cause, if the exercise of the Option within the applicable time periods set forth in Section 7.1 is prevented by the provisions of Section 4.6, the Option
shall remain exercisable until three (3) months after the date the Optionee is notified by the Company that the Option is exercisable, but in any event no later than the Option Expiration Date. 
 7.4 Extension if Optionee Subject to Section 16(b). Notwithstanding the foregoing, except termination for Cause, if a sale
within the applicable time periods set forth in Section 7.1 of shares acquired upon the exercise of the Option would subject the Optionee to suit under Section 16(b) of the Exchange Act, the Option shall remain exerciseable until the

  

 7 

 
earliest to occur of (i) the tenth (10th) day following the date on which a sale of such shares by the Optionee would no longer be subject to such
suit, (ii) the one hundred and ninetieth (190th) day after the Optionee’s termination of Service, or (iii) the Option Expiration Date. 
  

	 	8.	CHANGE IN CONTROL. 

 In the event of a Change in Control, the surviving, continuing, successor, or purchasing corporation or other business entity or parent
thereof, as the case may be (the “Acquiring Corporation”), may, without the consent of the Optionee, either assume the Company’s rights and obligations under the Option or substitute for the Option a
substantially equivalent option for the Acquiring Corporation’s stock. The Option shall terminate and cease to be outstanding effective as of the date of the Change in Control to the extent that the Option is neither assumed or substituted for
by the Acquiring Corporation in connection with the Change in Control nor exercised as of the date of the Change in Control. Notwithstanding the foregoing, shares acquired upon exercise of the Option prior to the Change in Control and any
consideration received pursuant to the Change in Control with respect to such shares shall continue to be subject to all applicable provisions of the Option Agreement except as otherwise provided herein. Furthermore, notwithstanding the foregoing,
if the corporation the stock of which is subject to the Option immediately prior to an Ownership Change Event described in Section 2.1(ee)(i) of the Plan constituting a Change in Control is the surviving or continuing corporation and
immediately after such Ownership Change Event less than fifty percent (50%) of the total combined voting power of its voting stock is held by another corporation or by other corporations that are members of an affiliated group within the
meaning of Section 1504(a) of the Code without regard to the provisions of Section 1504(b) of the Code, the Option shall not terminate unless the Board or Committee otherwise provides in its discretion. 
  

	 	9.	ADJUSTMENTS FOR CHANGES IN CAPITAL STRUCTURE.

 Subject to any required action by the shareholders of the Company, in the event of any change in the Stock
effected without receipt of consideration by the Company, whether through merger, consolidation, reorganization, reincorporation, recapitalization, reclassification, stock dividend, stock split, reverse stock split, split-up, split-off, spin-off,
combination of shares, exchange of shares, or similar change in the capital structure of the Company, or in the event of payment of a dividend or distribution to the shareholders of the Company in a form other than Stock (excepting normal cash
dividends) that has a material effect on the Fair Market Value of shares of Stock, appropriate and proportionate adjustments shall be made in the number, Exercise Price and class of shares subject to the Option, in order to prevent dilution or
enlargement of the Optionee’s rights under the Option. For purposes of the foregoing, conversion of any convertible securities of the Company shall not be treated as “effected without receipt of consideration by the Company.” If a
majority of the shares which are of the same class as the shares that are subject to the Option are exchanged for, converted into, or otherwise become (whether or not pursuant to an Ownership Change Event) shares of another corporation (the
“New Shares”), the Board or Committee may unilaterally amend the Option to provide that the Option is exercisable for New Shares. In the event of any such amendment, the Number of Option Shares and the
Exercise Price shall be adjusted in a fair and equitable manner as determined by the Board or Committee, in its discretion. Notwithstanding the foregoing, any fractional share resulting from an adjustment pursuant to this Section 9 shall be
rounded down to 

  

 8 

 
the nearest whole number, and in no event may the Exercise Price of the Option be decreased to an amount less than the par value, if any, of the stock
subject to the Option. Such adjustments shall be determined by the Board or Committee, and its determination shall be final, binding and conclusive. 
  

	 	10.	RIGHTS AS A SHAREHOLDER, EMPLOYEE OR
CONSULTANT. 

 The Optionee shall have no rights as a
shareholder with respect to any shares covered by the Option until the date of the issuance of a certificate for the shares for which the Option has been exercised (as evidenced by the appropriate entry on the books of the Company or of a duly
authorized transfer agent of the Company). No adjustment shall be made for dividends, distributions or other rights for which the record date is prior to the date such certificate is issued, except as provided in Section 9. If the Optionee is
an Employee, the Optionee understands and acknowledges that, except as otherwise provided in a separate, written employment agreement between a Participating Company and the Optionee, the Optionee’s employment is “at will” and is for
no specified term. Nothing in this Option Agreement shall confer upon the Optionee any right to continue in the Service of a Participating Company or interfere in any way with any right of the Participating Company Group to terminate the
Optionee’s Service as an Employee or Consultant, as the case may be, at any time. 
  

	 	11.	UNVESTED SHARE REPURCHASE OPTION. 

 11.1 Grant of Unvested Share Repurchase Option. In the event the Optionee’s Service with the Participating Company Group is
terminated for any reason or no reason, with or without cause, or, if the Optionee, the Optionee’s legal representative, or other holder of shares acquired upon exercise of the Option attempts to sell, exchange, transfer, pledge, or otherwise
dispose of (other than pursuant to an Ownership Change Event) any Unvested Shares, as defined in Section 11.2 below (the “Unvested Shares”), the Company shall have the right to repurchase the Unvested
Shares under the terms and subject to the conditions set forth in this Section 11 (the “Unvested Share Repurchase Option”). 
 11.2 Unvested Shares Defined. The “Unvested Shares” shall mean, on any given date, the
number of shares of Stock acquired upon exercise of the Option which exceed the Vested Shares determined as of such date. 
 11.3 Exercise of Unvested Share Repurchase Option. The Company may exercise the Unvested Share Repurchase Option by written notice to the Optionee within two hundred seventy (270) days after (a) termination of the
Optionee’s Service (or exercise of the Option, if later) or (b) the Company has received notice of the attempted disposition of Unvested Shares. If the Company fails to give notice within such two hundred seventy (270) day period, the
Unvested Share Repurchase Option shall terminate unless the Company and the Optionee have extended the time for the exercise of the Unvested Share Repurchase Option. The Unvested Share Repurchase Option must be exercised, if at all, for all of the
Unvested Shares, except as the Company and the Optionee otherwise agree. 
 11.4 Payment for Shares and Return of Shares to
Company. The purchase price per share being repurchased by the Company shall be an amount equal to the Optionee’s 

  

 9 

 
original cost per share, as adjusted pursuant to Section 9 (the “Repurchase Price”). The Company shall pay the
aggregate Repurchase Price to the Optionee in cash within thirty (30) days after the date of the written notice to the Optionee of the Company’s exercise of the Unvested Share Repurchase Option. For purposes of the foregoing, cancellation
of any purchase money indebtedness of the Optionee to any Participating Company for the shares shall be treated as payment to the Optionee in cash to the extent of the unpaid principal and any accrued interest canceled. The shares being repurchased
shall be delivered to the Company by the Optionee at the same time as the delivery of the Repurchase Price to the Optionee. 
 11.5 Assignment of Unvested Share Repurchase Option. The Company shall have the right to assign the Unvested Share Repurchase Option at any time, whether or not such option is then exercisable, to one or more persons as may be
selected by the Company. 
 11.6 Ownership Change Event. Upon the occurrence of an Ownership Change Event, any and all
new, substituted or additional securities or other property to which the Optionee is entitled by reason of the Optionee’s ownership of Unvested Shares shall be immediately subject to the Unvested Share Repurchase Option and included in the
terms “Stock” and “Unvested Shares” for all purposes of the Unvested Share Repurchase Option with the same force and effect as the Unvested Shares immediately prior to the Ownership Change Event. While the aggregate Repurchase
Price shall remain the same after such Ownership Change Event, the Repurchase Price per Unvested Share upon exercise of the Unvested Share Repurchase Option following such Ownership Change Event shall be adjusted as appropriate. For purposes of
determining the Vested Shares following an Ownership Change Event, credited Service shall include all Service with any corporation which is a Participating Company at the time the Service is rendered, whether or not such corporation is a
Participating Company both before and after the Ownership Change Event. 
  

	 	12.	ESCROW. 

 12.1 Establishment of Escrow. To ensure that shares subject to the Unvested Share Repurchase Option will be available for repurchase, the Company may require the Optionee to deposit the certificate evidencing
the shares which the Optionee purchases upon exercise of the Option with an agent designated by the Company under the terms and conditions of an escrow agreement approved by the Company. If the Company does not require such deposit as a condition of
exercise of the Option, the Company reserves the right at any time to require the Optionee to so deposit the certificate in escrow. Upon the occurrence of an Ownership Change Event or a change, as described in Section 9, in the character or
amount of any of the outstanding stock of the corporation the stock of which is subject to the provisions of this Option Agreement, any and all new, substituted or additional securities or other property to which the Optionee is entitled by reason
of the Optionee’s ownership of shares of Stock acquired upon exercise of the Option that remain, following such Ownership Change Event or change described in Section 9, subject to the Unvested Share Repurchase Option shall be immediately
subject to the escrow to the same extent as such shares of Stock immediately before such event. The Company shall bear the expenses of the escrow. 
 12.2 Delivery of Shares to Optionee. As soon as practicable after the expiration of the Unvested Share Repurchase Option, but not more frequently than twice each 

  

 10 

 
calendar year, the escrow agent shall deliver to the Optionee the shares and any other property no longer subject to such restriction. 
 12.3 Notices and Payments. In the event the shares and any other property held in escrow are subject to the Company’s exercise
of the Unvested Share Repurchase Option, the notices required to be given to the Optionee shall be given to the escrow agent, and any payment required to be given to the Optionee shall be given to the escrow agent. Within thirty (30) days after
payment by the Company, the escrow agent shall deliver the shares and any other property which the Company has purchased to the Company and shall deliver the payment received from the Company to the Optionee. 
  

	 	13.	Stock Distributions Subject to Option Agreement. 

 If, from time to time, there is any stock dividend, stock split or other change, as described in Section 9, in the character or amount of any of the outstanding stock of the corporation the stock of which is
subject to the provisions of this Option Agreement, then in such event any and all new, substituted or additional securities to which the Optionee is entitled by reason of the Optionee’s ownership of the shares acquired upon exercise of the
Option shall be immediately subject to the Unvested Share Repurchase Option with the same force and effect as the shares subject to the Unvested Share Repurchase Option immediately before such event. 
  

	 	14..	NOTICE OF SALES UPON DISQUALIFYING DISPOSITION.

 The Optionee shall dispose of the shares acquired pursuant to the Option only in accordance with the
provisions of the Plan and this Option Agreement. In addition, if the Notice designates this Option as an Incentive Stock Option, the Optionee shall (a) promptly notify the Chief Financial Officer of the Company if the Optionee disposes
of any of the shares acquired pursuant to the Option within one (1) year after the date the Optionee exercises all or part of the Option or within two (2) years after the Date of Option Grant and (b) provide the Company with a
description of the circumstances of such disposition. Until such time as the Optionee disposes of such shares in a manner consistent with the provisions of this Option Agreement, unless otherwise expressly authorized by the Company, the Optionee
shall hold all shares acquired pursuant to the Option in the Optionee’s name (and not in the name of any nominee) for the one-year period immediately after the exercise of the Option and the two-year period immediately after Date of Option
Grant. At any time during the one-year or two-year periods set forth above, the Company may place a legend on any certificate representing shares acquired pursuant to the Option requesting the transfer agent for the Company’s stock to notify
the Company of any such transfers. The obligation of the Optionee to notify the Company of any such transfer shall continue notwithstanding that a legend has been placed on the certificate pursuant to the preceding sentence. 
  

 13 

	 	15.	LEGENDS. 

 The Company may at any time place legends referencing the Unvested Share Repurchase Option and any applicable federal, state or foreign securities law restrictions on all certificates representing shares of stock
subject to the provisions of this Option Agreement. The Optionee shall, at the request of the Company, promptly present to the Company any and all certificates representing shares acquired pursuant to the Option in the possession of the Optionee in
order to carry out the provisions of this Section. Unless otherwise specified by the Company, legends placed on such certificates may include, but shall not be limited to, the following: 
 15.1 “THE SHARES EVIDENCED BY THIS CERTIFICATE WERE ISSUED BY THE CORPORATION TO THE REGISTERED HOLDER UPON EXERCISE OF AN INCENTIVE
STOCK OPTION AS DEFINED IN SECTION 422 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (“ISO”). IN ORDER TO OBTAIN THE PREFERENTIAL TAX TREATMENT AFFORDED TO ISOs, THE SHARES SHOULD NOT BE TRANSFERRED PRIOR TO [INSERT
DISQUALIFYING DISPOSITION DATE HERE]. SHOULD THE REGISTERED HOLDER ELECT TO TRANSFER ANY OF THE SHARES PRIOR TO THIS DATE AND FOREGO ISO TAX TREATMENT, THE TRANSFER AGENT FOR THE SHARES SHALL NOTIFY THE CORPORATION IMMEDIATELY. THE REGISTERED
HOLDER SHALL HOLD ALL SHARES PURCHASED UNDER THE INCENTIVE STOCK OPTION IN THE REGISTERED HOLDER’S NAME (AND NOT IN THE NAME OF ANY NOMINEE) PRIOR TO THIS DATE OR UNTIL TRANSFERRED AS DESCRIBED ABOVE.” 
 15.2 “THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO AN UNVESTED SHARE REPURCHASE OPTION IN FAVOR OF THE CORPORATION OR
ITS ASSIGNEE SET FORTH IN AN AGREEMENT BETWEEN THE CORPORATION AND THE REGISTERED HOLDER, OR SUCH HOLDER’S PREDECESSOR IN INTEREST, A COPY OF WHICH IS ON FILE AT THE PRINCIPAL OFFICE OF THIS CORPORATION.” 
  

	 	16.	MISCELLANEOUS PROVISIONS. 

 16.1 Binding Effect. Subject to the restrictions on transfer set forth herein, this Option Agreement shall inure to the benefit of
and be binding upon the parties hereto and their respective heirs, executors, administrators, successors and assigns. 
 16.2
Termination or Amendment. The Board or Committee may terminate or amend the Plan or the Option at any time; provided, however, that except as provided in Section 8 in connection with a Change in Control, no such termination or amendment
may adversely affect the Option or any unexercised portion hereof without the consent of the Optionee unless such termination or amendment is necessary to comply with any applicable law or government regulation or is required to enable the Option,
if designated an Incentive Stock Option in the Notice, to qualify as an Incentive Stock Option. No amendment or addition to this Option Agreement shall be effective unless in writing. 
  

 12 

 16.3 Notices. Any notice required or permitted hereunder shall be given in writing
and shall be deemed effectively given (except to the extent that this Option Agreement provides for effectiveness only upon actual receipt of such notice) upon personal delivery or upon deposit in the United States Post Office, by registered or
certified mail, with postage and fees prepaid, addressed to the other party at the address shown below that party’s signature or at such other address as such party may designate in writing from time to time to the other party. 
 16.4 Integrated Agreement. The Notice, this Option Agreement and the Plan constitute the entire understanding and agreement of the
Optionee and the Participating Company Group with respect to the subject matter contained herein or therein and supersedes any prior agreements, understandings, restrictions, representations, or warranties among the Optionee and the Participating
Company Group with respect to such subject matter other than those as set forth or provided for herein or therein. To the extent contemplated herein or therein, the provisions of the Notice and the Option Agreement shall survive any exercise of the
Option and shall remain in full force and effect. 
 16.5 Applicable Law. This Option Agreement shall be governed by
the laws of the State of Washington as such laws are applied to agreements between Washington residents entered into and to be performed entirely within the State of Washington. 
 16.6 Counterparts. The Notice may be executed in counterparts, each of which shall be deemed an original, but all of which together
shall constitute one and the same instrument. 
  

 13 

			
	  ̈ Incentive Stock Option
	  	Optionee: __________________________________________
	  ̈ Nonstatutory Stock
Option
	  	
		  	        Date: __________________________________________

 STOCK OPTION EXERCISE NOTICE 
 (IMMEDIATELY EXERCISABLE) 
 Northstar Neuroscience, Inc.

 Attention: Chief Financial Officer 
 2401 Fourth Avenue, Suite 500 
 Seattle, WA 98121 
 Ladies and Gentlemen: 
 1. Option. I was granted an option (the “Option”) to purchase shares of the common stock (the
“Shares”) of Northstar Neuroscience, Inc. (the “Company”) pursuant to the Company’s 2006 Performance Incentive Plan (the “Plan”),
my Notice of Grant of Stock Option (the “Notice”) and my Stock Option Agreement (the “Option Agreement”) as follows: 
  

				
	 Grant Number:
	  	 	__________________
	 Date of Option Grant:
	  	 	__________________
	 Number of Option Shares:
	  	 	__________________
	 Exercise Price per Share:
	  	$	__________________

 2. Exercise of Option. I hereby elect to exercise the Option to purchase the
following number of Shares: 
  

				
	 Vested Shares:
	  	 	__________________
	 Unvested Shares:
	  	 	__________________
	 Total Shares Purchased:
	  	 	__________________
	 Total Exercise Price (Total Shares X Price per Share)
	  	$	__________________

 3. Payments. I enclose payment in full of the total exercise price for the Shares in
the following form(s), as authorized by my Option Agreement: 
  

			
	  ̈ Cash:
	  	$_____________________
	  ̈ Check:
	  	$_____________________
	  ̈ Tender of Company
Stock:
	  	Contact Plan Administrator
	  ̈ Cashless Exercise:
	  	Contact Plan Administrator
	  ̈ Net-Exercise:
	  	Contact Plan Administrator

 4. Tax Withholding. I authorize payroll withholding and otherwise will make adequate
provision for the federal, state, local and foreign tax withholding obligations of the Company, if any, in connection with the Option. If I am exercising a Nonstatutory Stock Option, I enclose payment in full of my withholding taxes, if any, as
follows: 
 (Contact Plan Administrator for amount of tax due.) 
  

			
	  ̈ Cash:
	  	$____________________
	  ̈ Check:
	  	$____________________

 5. Optionee Information. 
  

			
	 My address is:
	 	___________________________________________________________________
		 	 ___________________________________________________________________

	
	
	 My Social Security Number is:    
________________________________________________________

 6. Notice of Disqualifying Disposition. If the Option is an Incentive Stock Option,
I agree that I will promptly notify the Chief Financial Officer of the Company if I transfer any of the Shares within one (1) year from the date I exercise all or part of the Option or within two (2) years of the Date of Option Grant.

 7. Binding Effect. I agree that the Shares are being acquired in accordance with and subject to the terms, provisions and
conditions of the Option Agreement, including the Unvested Share Repurchase Option, to all of which I hereby expressly assent. This Agreement shall inure to the benefit of and be binding upon my heirs, executors, administrators, successors and
assigns. 
 8. Election Under Section 83(b) of the Code. I understand and acknowledge that if I am exercising the Option
to purchase Unvested Shares (i.e., shares that remain subject to the Company’s Unvested Share Repurchase Option), that I should consult with my tax advisor regarding the advisability of filing with the Internal Revenue Service an election under
Section 83(b) of the Code, which must be filed no later than thirty (30) days after the date on which I exercise the Option. I acknowledge that I have been advised to consult with a tax advisor prior to the exercise of the Option regarding
the tax consequences to me of exercising the Option. AN ELECTION UNDER SECTION 83(b) MUST BE FILED WITHIN 30 DAYS AFTER THE DATE ON WHICH I PURCHASE THE SHARES. THIS TIME PERIOD CANNOT BE EXTENDED. I ACKNOWLEDGE THAT TIMELY FILING OF A SECTION
83(b) ELECTION IS MY SOLE RESPONSIBILITY, EVEN IF I REQUEST THE COMPANY OR ITS REPRESENTATIVE TO FILE SUCH ELECTION ON MY BEHALF. 
 I
understand that I am purchasing the Shares pursuant to the terms of the Plan, the Notice and my Option Agreement, copies of which I have received and carefully read and understand. 
  

	
	 Very truly yours,

	
	   
	 (Signature)

  

			
	Receipt of the above is hereby acknowledged.
	
	Northstar Neuroscience, Inc.
		
	By:	 	  
		
	Title:	 	  
		
	Dated:

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