Document:

EX-4.2

 Exhibit 4.2 
 WESTERN DIGITAL CORPORATION 
 2005 EMPLOYEE STOCK PURCHASE PLAN

 The Western Digital Corporation 2005 Employee Stock Purchase Plan (the “Plan”) shall be established and
operated in accordance with the following terms and provisions. 
  

	 	1.	Definitions. 

 As used in
the Plan the following terms shall have the meanings set forth below: 
 (a) “Board” means the Board of Directors of
the Company. 
 (b) “Code” means the Internal Revenue Code of 1986, as amended. 

(c) “Committee” means the committee appointed by the Board to administer the Plan as described in Section 4 below.

 (d) “Common Stock” means the common stock, $0.01 par value, of the Company. 

(e) “Company” means Western Digital Corporation, a Delaware corporation. 

(f) “Continuous Employment” means the absence of any interruption or termination of service as an Employee with the Company
and/or its Participating Subsidiaries. Continuous Employment shall not be considered interrupted in the case of a leave of absence agreed to in writing by the Company, provided that such leave is for a period of not more than 90 days or reemployment
upon the expiration of such leave is guaranteed by contract or statute. If a Participating Subsidiary ceases to be a Subsidiary, each person employed by that Subsidiary will be deemed to have had a break in Continuous Employment for purposes of the
Plan at the time the Participating Subsidiary ceased to be a Subsidiary, unless such person continues as an Employee in respect of another Company entity. 
 (g) “Eligible Compensation” means, with respect to each Participant for each pay period, the full salary and wages paid to such Participant by the Company or a Participating Subsidiary,
including commissions, bonuses (to the extent not excluded below), overtime pay and shift differentials. Except as otherwise determined by the Committee, “Eligible Compensation” does not include 

(i) any amounts contributed by the Company or a Participating Subsidiary to any pension plan or plan of deferred compensation,

 (ii) any automobile or relocation allowances (or reimbursement for any such expenses), 

(iii) any amounts paid that are non-regularly scheduled items of compensation (for example, starting bonus, finder’s fee, or other
special bonuses), 

 (iv) any amounts realized from the exercise of qualified or non-qualified stock options, or

 (v) any amounts paid by the Company or a Participating Subsidiary for other fringe benefits, such as health and welfare,
hospitalization and group life insurance benefits, or perquisites, or paid in lieu of such benefits, such as cash-out of credits generated under a plan qualified under Code Section 125. 

(h) “Eligible Employee” means an Employee who is 
 (i) customarily employed for at least twenty (20) hours per week and more than five months in a calendar year, and 
 (ii) eligible to participate in the Plan as described in Section 5 below. 

If any person is (a) an Employee due to any classification or reclassification of the person as an employee or common-law employee
of the Company or one of its Participating Subsidiaries by reason of action taken by any tax or other governmental authority, or (b) an Employee who has a written employment agreement providing that the Employee shall not participate in the
Plan until at least two (2) years of Continuous Employment, then such Employee must be employed for at least two (2) years by the Company or one of its Participating Subsidiaries as well as meet the criteria set forth above in subsections
(i) and (ii) in order to be an Eligible Employee. 
 (i) “Employee” means each person currently employed by
the Company or one of its Participating Subsidiaries. It shall not include any person who is recorded on the books and records of the Company or one of its Participating Subsidiaries as an independent contractor or consultant or a worker provided by
a temporary staffing agency. 
 (j) “Enrollment Date” means the first day of each Offering Period. 

(k) “Exercise Date” means one or more dates during an Offering Period, as established by the Committee in accordance with
Section 6 hereof, on which options to purchase Common Stock granted under the Plan shall be exercised as provided in Section 11 hereof. 
 (l) “Exercise Period” means one or more periods during an Offering Period, the duration of which shall be established by the Committee in accordance with Section 6 hereof, during which
payroll deductions are accumulated for purposes of purchasing Common Stock under the Plan on each Exercise Date. 
 (m)
“Exercise Price” means the price per share of shares offered in a given Offering Period determined as provided in Section 10 below. 

  
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 (n) “Fair Market Value” means, with respect to a share of Common Stock as of any
Enrollment Date or Exercise Date (or New Exercise Date, as the case may be), the closing price (in regular trading) of such Common Stock on the NASDAQ Stock Market (or, if the Common Stock is not then traded on the NASDAQ Stock Market, on the
principal national securities exchange on which the Common Stock is then listed or admitted to trade (the “Exchange”)). In the event that such a closing price is not available for an Enrollment Date or an Exercise Date, or New Exercise
Date, the Fair Market Value of a share of Common Stock on such date shall be the closing price (in regular trading) of a share of the Common Stock on the Exchange on the last business day prior to such date or such other amount as may be determined
by the Committee by any fair and reasonable means. 
 (o) “New Exercise Date” means the new exercise date set by the
Board in the case of a sale of all or substantially all of the assets of the Company, or the merger of the Company with or into another corporation or other entity in certain circumstances as described in Section 15(b). 

(p) “Offering Period” means a period of time with respect to which options are granted under the Plan, the time and duration of
which shall be established by the Committee in accordance with Section 6. 
 (q) “Parent” means any corporation,
domestic or foreign, which owns, directly or indirectly, not less than 50% of the total combined voting power of all classes of stock or other equity interests of the Company and that otherwise qualifies as a “parent corporation” within
the meaning of Section 424(e) of the Code or any successor thereto. 
 (r) “Participant” means an Eligible
Employee who has elected to participate in the Plan by filing an enrollment agreement with the Company as provided in Section 7 below. 
 (s) “Participating Subsidiary” means any Subsidiary other than a Subsidiary excluded from participation in the Plan by the Committee, in its sole discretion. 

(t) “Plan” means this Western Digital Corporation 2005 Employee Stock Purchase Plan. 

(u) “Subsidiary” means any corporation, domestic or foreign, of which the Company owns, directly or indirectly, not less than
50% of the total combined voting power of all classes of stock or other equity interests and that otherwise qualifies as a “subsidiary corporation” within the meaning of Section 424(f) of the Code or any successor thereto. 

 

	 	2.	Purpose of the Plan. 

 The
purpose of the Plan is to provide an incentive for present and future Employees of the Company and its Participating Subsidiaries to acquire a proprietary interest (or increase an existing proprietary interest) in the Company through the purchase of
Common Stock. It is the intention of the Company that the Plan qualify as an “employee stock purchase plan” under Section 423 of the Code. Accordingly, the provisions of the Plan shall be administered, interpreted and construed in a
manner consistent with the requirements of that section of the Code. 

  
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	 	3.	Shares Reserved for the Plan. 

 (a) There shall be reserved for issuance and purchase by Participants under the Plan an aggregate of 21,000,000 shares of Common Stock, subject to adjustment as provided in Section 15 below. Shares
of Common Stock subject to the Plan may be newly issued shares or shares reacquired in private transactions or open market purchases. If and to the extent that any right to purchase reserved shares shall not be exercised by any Participant for any
reason or if such right to purchase shall terminate as provided herein, shares that have not been so purchased hereunder shall again become available for the purposes of the Plan unless the Plan shall have been terminated, but all shares sold under
the Plan, regardless of source, shall be counted against the limitation set forth above. 
 (b) From time to time and without
shareholder approval, the Committee may fix a maximum limit on the number of shares that may be acquired by any individual during an Exercise Period under the Plan, which limit shall be effective no earlier than the first Offering Period that
commences after the determination of such limit by the Committee; provided, however, that any adjustment to such limit pursuant to Section 15 shall apply to any Exercise Period in progress at the time such adjustment is made. 

 

	 	4.	Administration of the Plan. 

 (a) The Plan shall be administered by a Committee appointed by, and which shall serve at the pleasure of, the Board. The Committee shall consist of two or more directors, each of whom is a
“Non-Employee Director” within the meaning of Rule 16b-3 promulgated under the Securities Exchange Act of 1934, as amended, as such rule may be amended from time to time. The Committee shall have authority to interpret the Plan, to
prescribe, amend and rescind rules and regulations relating to the Plan, and to make all other determinations necessary or advisable for the administration of the Plan, all of which actions and determinations shall be final, conclusive and binding
on all persons. 
 (b) The Committee may request advice or assistance or employ such other persons as it in its absolute
discretion deems necessary or appropriate for the proper administration of the Plan, including, but not limited to employing a brokerage firm, bank or other financial institution to assist in the purchase of shares, delivery of reports or other
administrative aspects of the Plan. 
 (c) Neither the Board nor any Committee, nor any member thereof or person acting at the
direction thereof, shall be liable for any act, omission, interpretation, construction or determination made in good faith in connection with the Plan, and all such persons shall be entitled to indemnification and reimbursement by the Company in
respect of any claim, loss, damage or expense (including, without limitation, attorneys’ fees) arising or resulting therefrom to the fullest extent permitted by law and/or under any directors and officers liability insurance coverage that may
be in effect from time to time. 
  

	 	5.	Eligibility to Participate in the Plan. 

 Subject to limitations imposed by Section 423(b) of the Code, any Eligible Employee who is employed by the Company or a Participating Subsidiary on an Enrollment Date shall be eligible to participate
in the Plan for the Offering Period beginning on that Enrollment Date. 

  
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	 	6.	Offering Periods. 

 During
the term of the Plan, the Company will grant options to purchase shares of Common Stock in each Offering Period to all Participants in that Offering Period. The Committee shall determine from time to time, subject to the requirements of
Section 423 of the Code and no later than the first Offering Period to commence under the Plan, when Offering Periods will be offered during the term of the Plan and shall establish the Enrollment Date(s), the number and duration of the
Exercise Period(s), and the Exercise Date(s) for such Offering Period(s), which determinations shall be effective no later than the first Offering Period that commences after they are made by the Committee and provided, however, that no Offering
Period may exceed twenty-four (24) months in duration. To the extent consistent with Section 423 of the Code, the Committee may provide for a new Offering Period to commence prior to the termination of one or more preceding Offering
Periods. 
  

	 	7.	Election to Participate in the Plan. 

 (a) Each Eligible Employee may elect to participate in an Offering Period by completing an enrollment agreement on a form approved by and in a manner prescribed by the Committee (or its delegate) or, if
the Committee does not require enrollment forms, by otherwise completing such enrollment procedures as the Committee may prescribe. Such agreement must be filed with the Company or such other procedures must be completed, as applicable, prior to the
applicable Enrollment Date, unless the Committee establishes an earlier deadline for filing the enrollment form for all Eligible Employees with respect to a given Offering Period. An Eligible Employee may participate in an Offering Period only if,
as of the Enrollment Date of such Offering Period, such Eligible Employee is not participating in any prior Offering Period which is continuing at the time of such proposed enrollment. 

(b) Payroll deductions for a Participant shall commence on the first payroll date on or following the Enrollment Date and shall end on
the last payroll date in the Offering Period to which such authorization is applicable, unless sooner terminated by the Participant as provided in Section 12. 
 (c) Unless a Participant elects otherwise prior to the Enrollment Date of the immediately succeeding Offering Period, an Eligible Employee who is participating in an Offering Period as of the last
Exercise Date of such Offering Period (the “Prior Offering Period”) shall be deemed (i) to have elected to participate in the immediately succeeding Offering Period and (ii) to have authorized the same payroll deduction for such
immediately succeeding Offering Period as was in effect for such Participant immediately prior to the expiration or termination of the Prior Offering Period. 
 (d) In its discretion, the Committee may determine (with such determination to be effective no earlier than the first Offering Period that commences after such determination by the Committee) that the
participation of all Participants on an Exercise Date in an Offering Period that includes more than one Exercise Period shall terminate and such Participants shall be enrolled in a new Offering Period commencing immediately following such Exercise
Date if, during such Offering Period, the Fair Market Value determined as of such Exercise Date within such Offering Period is lower than the Fair Market Value determined as of the Enrollment Date of such Offering Period. In such event, each of such
Participants shall be deemed for purposes of this Plan (i) to have elected to participate in such new Offering Period, and (ii) to have authorized the same payroll deduction for such new Offering Period as was in effect for such
Participant immediately prior to the Termination Date. 

  
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	 	8.	Payroll Deductions. 

 (a)
All Participant contributions to the Plan shall be made only by payroll deductions. At the time a Participant files the enrollment agreement with respect to an Offering Period, the Participant shall authorize payroll deductions to be made on each
payroll date during the Offering Period in an amount up to 10% (or such other limit as the Committee may establish prior to the start of the applicable Offering Period) of the Eligible Compensation which the Participant receives on each payroll date
during such Offering Period. The Committee also may prescribe other limits, rules or procedures for payroll deductions. Unless otherwise provided by the Committee, the amount of such payroll deductions shall be a whole percentage (i.e., 1%, 2%, 3%,
etc.) of the Participant’s Eligible Compensation. 
 (b) All payroll deductions made for a Participant shall be deposited
in the Company’s general corporate account and shall be credited to the Participant’s account under the Plan. No interest shall accrue or be credited with respect to the payroll deductions of a Participant under the Plan. A Participant may
not make any additional payments into such account. All payroll deductions received or held by the Company under the Plan may be used by the Company for any corporate purpose, and the Company shall not be obligated to segregate such payroll
deductions. 
 (c) A Participant may discontinue participation in the Plan as provided in Section 12. Unless otherwise
provided by the Committee in advance of an Offering Period, a Participant may at any time during the Offering Period (but no more than four times in any calendar year) reduce or increase (subject to the limitations of Section 8(a) above) the
rate of his or her payroll deductions by completing and filing with the Company a change notice in the form provided by the Company. Any such reduction in the rate of a Participant’s payroll deductions shall be effective as of the pay period
specified by the Participant in the Participant’s change notice, but in no event sooner than the first pay period ending more than fifteen (15) days after the Participant files the change notice with the Company. Any such increase in the
rate of a Participant’s payroll deductions shall be effective as of the first date of the next Exercise Period within such Offering Period. 
  

	 	9.	Grant of Options. 

 (a) On
the Enrollment Date of each Offering Period, subject to the limitations set forth in Sections 3, 9(b) and 17 hereof, each Participant shall be granted an option to purchase on each Exercise Date during such Offering Period up to a number of shares
of the Common Stock determined by dividing such Participant’s payroll deductions accumulated during the Exercise Period ending on such Exercise Date by the Exercise Price for such Exercise Period (determined as provided in Section 10
below), provided that the number of shares subject to the option shall not exceed five (5) times the number of shares determined by dividing (i) 10% (or such other maximum limit on a Participant’s payroll deductions for the Offering
Period as the Committee may establish pursuant to Section 8(a)) of the Participant’s Eligible Compensation over the Offering Period (determined based upon the Participant’s rate of Eligible Compensation in effect as of the Enrollment
Date), by (ii) the Fair Market Value of a share of the Common Stock on the Enrollment Date multiplied by the percentage (not less than 85%) used to calculate the Exercise Price for that Offering Period. 

  
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 (b) Notwithstanding any provision of the Plan to the contrary, no Participant shall be
granted an option under the Plan (i) if, immediately after the grant, such Participant (or any other person whose stock would be attributed to such Participant pursuant to Section 424(d) of the Code) would own stock and/or hold outstanding
options to purchase stock possessing 5% or more of the total combined voting power or value of all classes of stock of the Company or of any Parent or any Subsidiary of the Company, or (ii) which permits such Participant’s rights to
purchase stock under all employee stock purchase plans of the Company, its Subsidiaries and any Parent to accrue at a rate which exceeds $25,000 of fair market value of such stock (determined at the time such option is granted) for each calendar
year in which such option is outstanding at any time. 
  

	 	10.	Exercise Price. 

 The
Committee shall establish from time to time (but no later than the first Offering Period to commence under the Plan) the method for determining the Exercise Price for each Offering Period under the Plan in accordance with this Section 10, which
determination shall be effective no earlier than the first Offering Period that commences after such determination is made by the Committee. In making its determination, the Committee may provide that the Exercise Price for an Offering Period shall
be determined by applying a discount amount (not to exceed 15%) to either (1) the Fair Market Value of a share of Common Stock on the Enrollment Date of such Offering Period, or (2) the Fair Market Value of a share of Common Stock on the
applicable Exercise Date, or (3) the lesser of the Fair Market Value of a share on the Enrollment Date of such Offering Period or the Fair Market Value of a share on the applicable Exercise Date. Notwithstanding anything to the contrary
in the preceding provisions of this Section 10, in no event shall the Exercise Price per share be less than the par value of a share of Common Stock. 
  

	 	11.	Exercise of Options. 

Unless a Participant withdraws from the Plan as provided in Section 12, the Participant’s option for the purchase of shares will
be exercised automatically on each Exercise Date of the Offering Period, and the maximum number of full shares subject to option will be purchased for the Participant at the applicable Exercise Price with the accumulated payroll deductions in the
Participant’s account. Any amount remaining in the Participant’s account after an Exercise Date that is not sufficient to purchase a whole share shall be held in the account until the next Exercise Date. In the event that an Offering
Period has been over-subscribed or that any other applicable Plan limit has been exceeded by a Participant in an Offering Period, any amount remaining in such Participant’s account shall be refunded to the Participant as soon as
administratively practicable after the end of the Offering Period. 

  
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	 	12.	Withdrawal; Termination of Employment. 

 (a) A Participant may withdraw all but not less than all of the payroll deductions credited to the Participant’s account under the Plan at any time by giving written notice to the Company. All of the
Participant’s payroll deductions credited to the Participant’s account will be paid to him or her promptly after receipt of the Participant’s notice of withdrawal, the Participant’s participation in the Plan will be automatically
terminated, and no further payroll deductions for the purchase of shares will be made. Payroll deductions will not resume on behalf of a Participant who has withdrawn from the Plan unless written notice is delivered to the Company within the open
enrollment period preceding the commencement of an Exercise Period directing the Company to resume payroll deductions. 
 (b)
Upon termination of the Participant’s Continuous Employment prior to the Exercise Date of an Offering Period for any reason, including retirement or death, the payroll deductions credited to the Participant’s account will be returned to
the Participant or, in the case of death, to the Participant’s estate, and the Participant’s options to purchase shares under the Plan will be automatically terminated. 

(c) In the event a Participant fails to maintain Continuous Employment for at least twenty (20) hours per week during an Offering
Period, the Participant will be deemed to have elected to withdraw from the Plan, the payroll deductions credited to the Participant’s account will be returned to the Participant, and the Participant’s options to purchase shares under the
Plan will be terminated. 
 (d) A Participant’s withdrawal from an Offering Period will not have any effect upon the
Participant’s eligibility to participate in a succeeding Offering Period or in any similar plan which may hereafter be adopted by the Company. 
  

	 	13.	Transferability. 

 Neither
payroll deductions credited to a Participant’s account nor options to purchase Common Stock granted under the Plan may be transferred, assigned, pledged or otherwise disposed of by a Participant other than by will or the laws of descent and
distribution. Options granted under the Plan are exercisable during a Participant’s lifetime only by the Participant. 
  

	 	14.	Reports. 

 Individual
accounts will be maintained for each Participant in the Plan. Statements of account will be given to Participants promptly following each Exercise Date, which statements will set forth the amounts of payroll deductions, the per share purchase price,
the number of shares purchased and the remaining cash balance, if any. 
  

	 	15.	Adjustments Upon Changes in Capitalization. 

 (a) If the outstanding shares of Common Stock are increased or decreased, or are changed into or are exchanged for a different number or kind of shares, as a result of one or more reorganizations,
restructurings, recapitalizations, reclassifications, stock splits, reverse stock splits, stock dividends or any similar unusual or extraordinary corporate transaction, appropriate adjustment shall be made in the number and/or kind of shares, and
the Exercise Price thereof, which may be issued in the aggregate and to any Participant upon exercise of options granted under the Plan. 

  
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 (b) In the event of the proposed dissolution or liquidation of the Company, each Offering
Period then in progress will terminate immediately prior to the consummation of such proposed action, unless otherwise provided by the Committee. In the event of a proposed sale of all or substantially all of the assets of the Company, or the merger
of the Company with or into another corporation or entity, each option under the Plan shall be assumed or an equivalent option shall be substituted by such successor corporation or entity or a parent or subsidiary of such successor corporation or
entity, unless the Committee determines, in the exercise of its sole discretion and in lieu of such assumption or substitution, that the Participants shall have the right to exercise the option as to all of the optioned stock. If the Committee makes
an option fully exercisable under these circumstances in lieu of assumption or substitution, each Offering Period then in progress shall be shortened and a new Exercise Date shall be set (the “New Exercise Date”), as of which date
any Offering Period then in progress will terminate. The New Exercise Date shall be on or before the date of consummation of the transaction and the Committee shall notify each participant in writing, at least ten (10) days prior to the New
Exercise Date, that the Exercise Date for his or her option has been changed to the New Exercise Date and that his or her option will be exercised automatically on the New Exercise Date, unless prior to such date he or she has withdrawn from the
Offering Period as provided in Section 12. The Exercise Price on the New Exercise Date shall be determined as provided in Section 10 hereof, and for purposes of determining such Exercise Price, the New Exercise Date shall be treated as the
“Exercise Date.” 
 (c) In all cases, the Committee shall have full discretion to exercise any of the powers and
authority provided under this Section 15, and the Committee’s actions hereunder shall be final and binding on all Participants. No fractional shares of stock shall be issued under the Plan pursuant to any adjustment authorized under the
provisions of this Section 15. 
  

	 	16.	Amendment of the Plan. 

The Board may at any time, or from time to time, amend or suspend the Plan, in whole or in part and without notice; provided, however,
that the Plan may not be amended in any way that will cause rights issued under the Plan to fail to meet the requirements for employee stock purchase plans as defined in Section 423 of the Code or any successor thereto, including, without
limitation, shareholder approval if required. No options may be granted during any suspension of the Plan or after a termination of the Plan pursuant to Section 17(b) below, but the Committee will retain jurisdiction as to options then
outstanding in accordance with the terms of the Plan. No amendment, suspension or termination pursuant to this Section 16 or Section 17 shall, without written consent of the Participant, affect in any manner materially adverse to the
Participant any right or benefits of such Participant or obligations of the Company under any option granted under the Plan prior to the effective date of such change; provided that the Board may amend, suspend or terminate the Plan as to any
outstanding options granted under the Plan for an Offering Period, effective as of any Exercise Date within that Offering Period, without the consent of the Participants to whom such options were granted. In no event shall changes contemplated by
Section 7(d) or Section 15 be deemed to constitute changes or amendments requiring Participant consent. 

  
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	 	17.	Termination of the Plan. 

The Plan and all rights of Employees hereunder shall terminate: 
 (a) on the Exercise Date that Participants would become entitled to purchase a number of shares greater than the number of reserved shares remaining available for purchase under the Plan if the final
sentence in this Section 17 were not applied; or 
 (b) at any time, at the discretion of the Board. 

In the event that the Plan terminates under circumstances described in Section 17(a) above, reserved shares remaining as of the
termination date shall be sold to Participants on a pro rata basis. 
  

	 	18.	Notices. 

 All notices or
other communications by a Participant to the Company under or in connection with the Plan shall be deemed to have been duly given when received in the form specified by the Company at the location, or by the person, designated by the Company for the
receipt thereof. 
  

	 	19.	Shareholder Approval. 

Continuance of the Plan shall be subject to approval by the shareholders of the Company within twelve months before or after the date the
Plan is adopted. If such shareholder approval is obtained at a duly held shareholders’ meeting, it may be obtained by the affirmative vote of the holders of a majority of the outstanding shares of the Company present or represented and entitled
to vote thereon. 
  

	 	20.	Conditions Upon Issuance of Shares. 

 (a) The Plan, the grant and exercise of options to purchase shares of Common Stock under the Plan, and the Company’s obligation to sell and deliver shares upon the exercise of options to purchase
shares shall be subject to all applicable federal, state and foreign laws, rules and regulations, and to such approvals by any regulatory or governmental agency as may, in the opinion of counsel for the Company, be required. 

(b) The Company may make such provisions as it deems appropriate for withholding by the Company pursuant to federal or state income tax
laws of such amounts as the Company determines it is required to withhold in connection with the purchase or sale by a Participant of any Common Stock acquired pursuant to the Plan. The Company may require a Participant to satisfy any relevant tax
requirements before authorizing any issuance of Common Stock to such Participant. 
  

	 	21.	Employees’ Rights. 

(a) Nothing in the Plan (or in any other document related to the Plan) will confer upon any Eligible Employee or Participant any right to
continue in the employ or other service of the Company or any Subsidiary, constitute any contract or agreement of employment or other service or affect an employee’s status as an employee at will, nor shall interfere in any way with the right
of the Company or any Subsidiary to change such person’s compensation or other benefits or to terminate his or her employment or other service, with or without cause. Nothing contained in this Section 21(a), however, is intended to
adversely affect any express independent right of any such person under a separate employment or service contract. 

  
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 (b) No Participant or other person will have any right, title or interest in any fund or in
any specific asset (including shares of Common Stock) of the Company or any Subsidiary by reason of any option hereunder. Neither the provisions of the Plan (or of any other document related to the Plan), nor the creation or adoption of the Plan,
nor any action taken pursuant to the provisions of the Plan will create, or be construed to create, a trust of any kind or a fiduciary relationship between the Company or any Subsidiary and any Participant or other person. To the extent that a
Participant or other person acquires a right to receive payment pursuant to the Plan, such right will be no greater than the right of any unsecured general creditor of the Company. 

(c) A Participant will not be entitled to any privilege of stock ownership as to any shares of Common Stock not actually delivered to and
held of record by the Participant. No adjustment will be made for dividends or other rights as a shareholder for which a record date is prior to such date of delivery. 
  

	 	22.	Miscellaneous. 

 (a) The
Plan, the options granted hereunder and any other documents related to the Plan shall be governed by, and construed in accordance with, the laws of the State of Delaware. 
 (b) If any provision of the Plan shall be held by a court of competent jurisdiction to be invalid and unenforceable, the remaining provisions of the Plan shall continue in effect. 

(c) Captions and headings are given to the sections of the Plan solely as a convenience to facilitate reference. Such captions and
headings shall not be deemed in any way material or relevant to the construction of interpretation of the Plan or any provision hereof. 
 (d) The adoption of the Plan shall not affect any other Company or Subsidiary compensation or incentive plans in effect. Nothing in the Plan will limit or be deemed to limit the authority of the Board or
Committee (1) to establish any other forms of incentives or compensation for employees of the Company or any Subsidiary (with or without reference to the Common Stock), or (2) to grant or assume options (outside the scope of and in
addition to those contemplated by the Plan) in connection with any proper corporate purpose; to the extent consistent with any other plan or authority. Benefits received by a Participant under an option granted pursuant to the Plan shall not be
deemed a part of the Participant’s compensation for purposes of the determination of benefits under any other employee welfare or benefit plans or arrangements, if any, provided by the Company or any Subsidiary, except where the Committee or
the Board (or the Board of Directors of the Subsidiary that sponsors such plan or arrangement, as applicable) expressly otherwise provides or authorizes in writing. 
 (e) The Committee may also adopt rules, procedures or sub-plans applicable to particular Subsidiaries or locations, which sub-plans may be designed to be outside the scope of Section 423 of the Code.

 As Amended August 6, 2012 

  
 11<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>NEITHER THIS NOTE NOR THE SECURITIES
INTO WHICH THIS NOTE IS CONVERTIBLE HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE &ldquo;ACT&rdquo;) OR
ANY STATE SECURITIES LAWS AND NEITHER THIS NOTE NOR ANY INTEREST THEREIN NOR THE SECURITIES INTO WHICH THIS NOTE IS CONVERTIBLE
MAY BE OFFERED, SOLD, TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER
SUCH ACT AND SUCH LAWS OR AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT AND SUCH LAWS.</B></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>IDS Solar Technologies, Inc.</B></P>

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<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Promissory Note</B></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>September 30, 2012</B></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 0"><B>$1,900.00 </B></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><B>FOR VALUE RECEIVED</B>, the undersigned,
IDS Solar Technologies, Inc. (Maker), promises to pay to the order of Charles J. Kalina, III (Note Holder) or the successors and
assigns, the principal sum of One Thousand Nine Hundred and no/100 Dollars ($1,900.00) (Principal) subject to the terms and conditions
set forth herein.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Principal payment shall be made to:</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Charles J. Kalina</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">96 Grove Street</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Somerville, NJ 08876</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">The consideration for this loan shall
be a simple annual interest rate of 10% charged monthly.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">The principal shall be due and payable
in full in one payment, without offset or deduction, in lawful money of the United States, by Ninety (90) days from final funding
of loan (maturity date).</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Maker will reimburse legal expenses
to Note Holder for any costs and expenses incurred in enforcing this Note to the extent allowable by applicable law. Those expenses
include, but are not limited to, reasonable attorney&rsquo;s fees.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">IDS Solar Technologies, Inc. and
any other entity that has obligations under this Note waive the rights of Presentment and Notice of Dishonor. &quot;Presentment&quot;
means the right to require the Note Holder to demand payment of amounts due. &quot;Notice of Dishonor&quot; means the right to
require the Note Holder to give notice to other persons that amounts due have not been paid.</P>

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<P STYLE="font: 10pt/115% Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 0">The Maker represents and warrants to Holder:</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><U>Organization and Qualification</U>.
The Maker and each of its Subsidiaries (as defined below), if any, is a corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction in which it is incorporated, with full power and authority (corporate and other) to
own, lease, use and operate its properties and to carry on its business as and where now owned, leased, used, operated and conducted.
The Maker and each of its Subsidiaries is duly qualified as a foreign corporation to do business and is in good standing in every
jurisdiction in which its ownership or use of property or the nature of the business conducted by it makes such qualification necessary
except where the failure to be so qualified or in good standing would not have a Material Adverse Effect. &ldquo;Material Adverse
Effect&rdquo; means any material adverse effect on the business, operations, assets, financial condition or prospects of the Maker
or its Subsidiaries, if any, taken as a whole, or on the transactions contemplated hereby or by the agreements or instruments to
be entered into in connection herewith. &ldquo;Subsidiaries&rdquo; means any corporation or other organization, whether incorporated
or unincorporated, in which the Maker owns, directly or indirectly, any equity or other ownership interest.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><U>Authorization; Enforcement</U>.
(i) The Maker has all requisite corporate power and authority to enter into and perform this Note and to consummate the transactions
contemplated hereby and thereby and to agree to all fees charged, in accordance with the terms hereof, (ii) the execution and delivery
of this Note by the Maker and the consummation by it of the transactions contemplated hereby and thereby have been duly authorized
by the Maker&rsquo;s Board of Directors and no further consent or authorization of the Maker, its Board of Directors, or its shareholders
is required, (iii) this Note has been duly executed and delivered by the Maker by its authorized representative, and such authorized
representative is the true and official representative with authority to sign this Note and the other documents executed in connection
herewith and bind the Maker accordingly, and (iv) this Note constitutes, a legal, valid and binding obligation of the Maker enforceable
against the Maker in accordance with its terms.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><U>No Conflicts.</U> The execution,
delivery and performance the Note by the Maker and the consummation by the Maker of the transactions contemplated hereby will not
(i) conflict with or result in a violation of any provision of the Articles of Incorporation or By-laws of the Maker, or (ii) violate
or conflict with, or result in a breach of any provision of, or constitute a default (or an event which with notice or lapse of
time or both could become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation
of, any agreement, indenture, patent, patent license or instrument to which the Maker or any of its Subsidiaries is a party, or
(iii) result in a violation of any law, rule, regulation, order, judgment or decree (including federal and state securities laws
and regulations and regulations of any self-regulatory organizations to which the Maker or its securities are subject) applicable
to the Maker or any of its Subsidiaries or by which any property or asset of the Maker or any of its Subsidiaries is bound or affected
(except for such conflicts, defaults, terminations, amendments, accelerations, cancellations and violations as would not, individually
or in the aggregate, have a Material Adverse Effect).</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><U>No Integrated Offering</U>. Neither
the Maker, nor any of its affiliates, nor any person acting on its or their behalf, has directly or indirectly made any offers
or sales in any security or solicited any offers to buy any security under circumstances that would require registration under
the 1933 Act of the issuance of this note or the Conversion Stock to the Holder.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><U>No Investment Company</U>. The
Company is not an &ldquo;investment company&rdquo; required to be registered under the Investment Company Act of 1940 (an &ldquo;Investment
Company&rdquo;). The Maker is not controlled by an Investment Company. This Note is a uniform instrument with limited variations
in some jurisdictions.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><U>Notices</U>. Any notice herein
required or permitted to be given shall be in writing and may be personally served or delivered by courier or sent by United States
mail and shall be deemed to have been given upon receipt if personally served (which shall include telephone line facsimile transmission)
or sent by courier or three (3) days after being deposited in the United States mail, certified, with postage pre-paid and properly
addressed, if sent by mail. For the purposes hereof, the address of the Note Holder shall be <U>93 Grove Street, Somerville, NJ
08876</U>; and the address of the Maker shall be <U>533 Birch Street, Lake Elsinore, CA 92530</U>. Both the Holder or its assigns
and the Maker may change the address for service by delivery of written notice to the other as herein provided.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

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<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><U>Amendment</U>. This Note and
any provision hereof may be amended only by an instrument in writing signed by the Maker and the Note Holder.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><U>Assignability</U>. This Note shall
be binding upon the Maker and its successors and assigns and shall inure to be the benefit of the Holder and its successors and
assigns; provided, however, that so long as no Event of Default has occurred, this Note shall only be transferable in whole subject
to the restrictions contained in the restrictive legend on the first page of this Note.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><U>Governing Law</U>. This Note shall
be governed by the internal laws of the State of California, without regard to conflicts of laws principles.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><U>Replacement of Note</U>. The Maker
covenants that upon receipt by the Maker of evidence reasonably satisfactory to it of the loss, theft, destruction or mutilation
of this Note, and in case of loss, theft or destruction, of indemnity or security reasonably satisfactory to it (which shall not
include the posting of any bond), and upon surrender and cancellation of such Note, if mutilated, the Maker will make and deliver
a new Note of like tenor.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><U>Severability</U>. In case any
provision of this Note is held by a court of competent jurisdiction to be excessive in scope or otherwise invalid or unenforceable,
such provision shall be adjusted rather than voided, if possible, so that it is enforceable to the maximum extent possible, and
the validity and enforceability of the remaining provisions of this Note will not in any way be affected or impaired thereby.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><U>Headings.</U> The headings of
the sections of this Note are inserted for convenience only and do not affect the meaning of such section.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><U>Counterparts</U>. This Note may
be executed in multiple counterparts, each of which shall be an original, but all of which shall be deemed to constitute on instrument.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 0">IN WITNESS WHEREOF, with the intent to be legally bound
hereby, the Maker as executed this Note as of the date first written above</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 53%; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold">MAKER:</TD>
    <TD STYLE="width: 47%; padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold"></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold"><U>/s/ Bruce R. Knoblich</U></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold"><U>9/30/12</U></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold">Bruce R. Knoblich, President/CEO&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold">Date</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold">IDS Solar Technologies, Inc.</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold"></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold"></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold">NOTE HOLDER:</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold"></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold"><U>/s/ Charles J. Kalina, III&nbsp;&nbsp;</U></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold"><U>9/30/12</U></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold">Charles J. Kalina, III&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold">Date</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold">Individual Investor/Lender</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; line-height: 115%; font-weight: bold"></TD></TR>
</TABLE>
<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0pt 0"></P>

<P STYLE="margin: 0">

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