Document:

si-bonexformofprsugrantp

1.    SI-BONE, INC.  RESTRICTED STOCK UNIT GRANT NOTICE  (2018 EQUITY INCENTIVE PLAN)  SI-BONE, Inc. (the “Company”), pursuant to its 2018 Equity Incentive Plan (the “Plan”), hereby  awards to Participant a Restricted Stock Unit Award for the number of shares of the Company’s  Common Stock (“Restricted Stock Units”) set forth below (the “Award”).  The Award is subject  to all of the terms and conditions as set forth in this notice of grant (this “Restricted Stock Unit  Grant Notice”), and in the Plan and the Restricted Stock Unit Award Agreement, both of which  are attached hereto and incorporated herein in their entirety.  Capitalized terms not explicitly  defined herein will have the meanings set forth in the Plan or the Restricted Stock Unit Award  Agreement.  In the event of any conflict between the terms in this Restricted Stock Unit Grant  Notice or the Restricted Stock Unit Award Agreement and the Plan, the terms of the Plan will  control.  Participant:    Date of Grant:    Performance Period:     Target Number of Restricted Stock Units:     Maximum Number of Restricted Stock Units:        Vesting Schedule:  The number of Restricted Stock Units subject to the Award that may vest  will be determined in accordance with the Restricted Stock Unit Award  Vesting Criteria set forth in Attachment I to this Restricted Stock Unit  Grant Notice (the “Vesting Criteria”).  The Target Number of Restricted  Stock Units represent the number of Restricted Stock Units that would  vest if the Participant satisfies the service vesting conditions set forth in  the Vesting Criteria and the Company achieves 100% of the Company’s  target performance goal specified in the Vesting Criteria. In no event will  more than the Maximum Number of Restricted Stock Units vest.      Issuance Schedule: Subject to any Capitalization Adjustment, one share of Common Stock  will be issued for each Restricted Stock Unit that vests at the time set forth  in Section 6 of the Restricted Stock Unit Award Agreement.    Additional Terms/Acknowledgements:  Participant acknowledges receipt of, and understands  and agrees to, this Restricted Stock Unit Grant Notice, the Restricted Stock Unit Award  Agreement and the Plan.  Participant further acknowledges that as of the Date of Grant, this  Restricted Stock Unit Grant Notice, the Restricted Stock Unit Award Agreement and the Plan set  forth the entire understanding between Participant and the Company regarding the acquisition of  the Common Stock pursuant to the Award specified above and supersede all prior oral and  written agreements on the terms of this Award, with the exception, if applicable, of (i) equity  awards previously granted and delivered to Participant, (ii) any compensation recovery policy  that is adopted by the Company or is otherwise required by applicable law; and (iii) any written  

 

2.    employment agreement or severance arrangement that would provide for vesting acceleration of  this Award upon the terms and conditions set forth therein.   By accepting this Award, Participant acknowledges having received and read the Restricted  Stock Unit Grant Notice, the Restricted Stock Unit Award Agreement and the Plan and agrees to  all of the terms and conditions set forth in these documents.  Participant consents to receive such  documents by electronic delivery and to participate in the Plan through an on-line or electronic  system established and maintained by the Company or a third party designated by the Company.  SI-BONE, INC. PARTICIPANT  By:       Signature Signature  Title:   Date:    Date:   ATTACHMENTS:  Restricted Stock Unit Award Vesting Criteria, Restricted Stock Unit Award  Agreement and 2018 Equity Incentive Plan          

 

1.    ATTACHMENT I  RESTRICTED STOCK UNIT AWARD VESTING CRITERIA    The number of Restricted Stock Units that may vest will be determined in accordance with the  following criteria. Capitalized terms not explicitly defined in this Attachment I shall have the same  meanings given to them in the Plan, the Restricted Stock Unit Award Grant Notice (the “Grant Notice”) or  the Restricted Stock Unit Award Agreement, as applicable.    1. PERFORMANCE PERIOD; MEASUREMENT PERIODS.   The performance period for the Restricted Stock Units shall be the period of time beginning January  1, 2022 and ending on December 31, 2024 (the “Performance Period”). During the Performance Period  there will be three separate measurement periods of the Company’s TSR as measured versus the TSR of  the Median Peer Company (each, a “Measurement Period”). The Start Dates and End Dates for the First,  Second and Third Measurement Periods are:       First Measurement  Period  Second Measurement  Period  Third Measurement  Period  Start Date January 1, 2022 January 1, 2022 January 1, 2022  End Date December 31, 2022 December 31, 2023 December 31, 2024      2. TARGET NUMBER OF RESTRICTED STOCK UNITS.  The Target Number of Restricted Stock Units for each of the First and Second Measurement  Periods is equal to one-third of the Target Number of Restricted Units specified in the Grant Notice (with  the portions allocated to the First Measurement Period and Second Measurement Period rounded down to  the nearest whole share). The Target Number of Restricted Stock Units for the Third Measurement Period  is equal to the total Target Number of Restricted Stock Units in the Grant Notice.      First Measurement  Period  Second Measurement  Period  Third Measurement  Period  Target Number of  Restricted Stock  Units          3. RELATIVE TSR REQUIREMENT.   (a) The number of Restricted Stock Units subject to the Award that may vest, subject to  satisfaction of the Service Vesting Requirement described in Section 4 below, will be determined  by reference to the Company’s TSR as measured versus the TSR of the Median Peer Company for  each Measurement Period in accordance with the following TSR Performance Formula:  TTTTTTTTTTTTNNNNNNNNTTTTeeeeeeTTeeTTTTeeeeTTTTeeeeTTeeeeeeeeeeeeTTee ∗ �100% + �(eeSSSSNNTTeeee–MMTTeeeeTTeeMMTTTTTTMMeeNNMMTTeeMMTTeeee) ∗ 2�� = eehTTTTTTee MMTTCCeeNNCCTTTTTTee  

 

2.    If the Company’s TSR is –50 points as compared to the Median Peer Company during any  Measurement Period, no Restricted Stock Units are eligible to vest. If any company in the Relative TSR  Peer Group is acquired before the end of the applicable Measurement Period, such company shall be  excluded from the TSR Peer Group for purposes of determination of the TSR of the Median Peer Company  for all Measurement Periods ending after the closing of the acquisition of such company.  (b) As soon as practicable within the 45-day period following each Measurement Period’s End  Date, the Compensation Committee of the Board (the “Committee”) shall determine the applicable  number of Restricted Stock Units that may vest based on the TSR Performance Formula as applied  to the applicable Measurement Period. The date of the Committee’s determination is the  “Determination Date.”  Shares earned pursuant to this Restricted Stock Unit with respect to each  Measurement Period shall be released to the Participant on February 15 of the year that follows  such Measurement Period, or on the next trading day thereafter if February 15 is not a trading day  (such date, the “Settlement Date”), subject to the provisions of Section 6 of the Restricted Stock  Unit Award Agreement.  (c) As determined by the Committee on the Determination Date following the First  Measurement Period, the number of Restricted Stock Units that may vest shall be determined based  on the TSR Performance Formula applied to the First Measurement Period, provided that the total  number of Restricted Stock Units earned (the “Shares Released” with respect to the First  Measurement Period) will not exceed 100% of the Target Number of Restricted Stock Units for the  First Measurement Period.  (d) As determined by the Committee on the Determination Date following the Second  Measurement Period, the number of Restricted Stock Units that may vest shall be the number of  Shares Calculated according to the TSR Performance Formula applied to the Second Measurement  Period, provided that the total number of Restricted Stock Units earned (the “Shares Released”  with respect the Second Measurement Period) will not exceed 200% of the Target Number of  Restricted Stock Units for the Second Measurement Period.  (e) As determined by the Committee on the Determination Date following the Third  Measurement Period, the number of Restricted Stock Units that shall vest shall be determined based  on the Shares Calculated according to TSR Performance Formula applied to the Third Measurement  Period using the total Target Number of Restricted Stock Units specified in the Grant Notice  (subject to the Maximum Number of Restricted Stock Units set forth in the Grant Notice), with  such number of Shares Calculated (up to 200% of the total Target Number of Restricted Stock  Units set forth in the Grant Notice) then reduced by the Shares Released pursuant to Section 3(c)  and (d) (the “Shares Released” with respect to the Third Measurement Period).  (f) Notwithstanding anything to the contrary herein, in no event shall the total number of  Shares Released exceed the Maximum Number of Restricted Stock Units specified in the Grant  Notice.  (g) Any Restricted Stock Units that are not determined eligible to vest on the Determination  Date following the Third Measurement Period shall immediately terminate and be forfeited.  (h) See Appendix B for Sample Performance Period Calculation.  

 

3.    4. SERVICE REQUIREMENT.  Except as specifically provided in Section 5 below, the Participant must remain in Continuous  Service as an Executive through the applicable Measurement Period’s End Date in order for the applicable  portion of the Restricted Stock Units to vest.  5. CHANGE IN CONTROL.  (a) Impact of Change in Control.  In the event of a Change in Control that occurs prior to  the last day of the Performance Period, the number of Restricted Stock Units that are eligible to  vest shall be determined by the Committee prior to the Change in Control based upon applying the  TSR Performance Formula to the portion of the Performance Period that precedes the Change in  Control, provided that the target number of shares in the TSR Performance Formula will be the  Target Number of Restricted Stock Units specified in the Grant Notice, with the Shares Calculated  according to the TSR Performance Formula less the aggregate number of Shares Released  pursuant  to Sections 3(c) and 3(d), as applicable, in connection with any previously completed Measurement  Period(s) (such resulting number, the “CIC Units”), and provided further that the total number of  Restricted Stock Units that may vest over the Performance Period will not exceed the Maximum  Number of Restricted Stock Units. Any Restricted Stock Units that are not CIC Units shall  immediately terminate and be forfeited upon the Change in Control.   (b) Award Assumed, Continued or Substituted.  In the event of a Change in Control where  the acquiring, surviving or continuing entity assumes, continues or substitutes the Award on  substantially the same terms and conditions as in effect prior to the Change in Control, the portion  of the Shares Calculated according to the TSR Performance Formula applied pursuant to Section  5(a) and prorated according to the portion of the Performance Period that preceded the Change in  Control, less the aggregate number of Shares Released in connection with any previously  completed Measurement Period(s) pursuant to Sections 3(c) and 3(d), as applicable, will vest  immediately upon the Change in Control (the “Shares Released” at the closing) and the remainder  of the CIC Units will vest and be released in equal quarterly increments throughout the remainder  of the Performance Period, subject to the Participant remaining in Continuous Service through each  applicable quarterly vesting date (the “Continued Service Requirement”). Notwithstanding the  foregoing, if the Participant’s Continuous Service to the Company or its successor is terminated  without Cause or if the Participant resigns for Good Reason, in either case, within three months  prior to or within 12 months following the Change in Control and prior to the originally scheduled  expiration date of the Performance Period, the Continued Service Requirement shall be waived and  the CIC Units shall immediately vest on the date of such termination, subject to the requirements  of the Company’s Severance Benefit Plan.  (c) Award Not Assumed, Continued or Substituted. In the event of a Change in Control  where the acquiring, surviving or continuing entity does not assume, continue or substitute the  Award on substantially the same terms and conditions as in effect prior to the Change in Control,  all of the CIC Units shall vest and be released immediately prior to the Change in Control, subject  to the Participant remaining in Continuous Service as an Executive through the effective date of  the Change in Control.  (d) Sample Change in Control Calculation. See Appendix C for Sample Change in Control  Calculation.  

 

4.    6. DEFINITIONS.  For purposes of this Award, the following definitions will apply:  (a) “Beginning Period Average Price” means the average closing price per share of  the company over the 60 consecutive trading days ending with and including December 31, 2021.  (b) “Ending Period Average Price” means (i) in the absence of a Change in Control,  the average closing price per share of the company over the 60 consecutive trading days ending  with and including the End Date of the applicable Measurement Period and (ii) in the event of a  Change in Control, (A) for the TSR Peer Companies (other than the Company), the average closing  price per share of the company over the 60 consecutive trading days immediately prior the effective  date of the Change in Control or (B) for the Company, the sale price of the Shares in the Change  in Control.  (c) “Executive” means an Employee who serves in a meaningful executive role, as  determined by the Committee, and continues providing services to the Company at a level at least  equal to 50% of the Participant’s level of service as of the Date of Grant.  (d) “Good Reason” will have the meaning ascribed to such term in the Company’s  Severance Benefit Plan.  (e) “Median Peer Company” means the TSR Peer Company with a TSR at the median  of the range of TSRs for the TSR Peer Companies during a particular Measurement Period.    (f) “TSR” means total shareholder return as determined by dividing (i) the sum of  (A) the Ending Period Average Price minus the Beginning Period Average Price plus (B) all  dividends and other distributions paid on the company’s shares during the applicable period by  (ii) the Beginning Period Average Price. In calculating TSR, all dividends are assumed to have  been reinvested in shares on the ex-dividend date. The Committee shall have the authority to make  appropriate equitable adjustments to account for extraordinary, unusual and infrequently occurring  events and transactions affecting the TSR.  (g) “TSR Peer Companies” means the companies listed on Appendix A.  (h) “TSR Performance Formula” means the formula described in Section 3 above.      

 

1.    APPENDIX A  RELATIVE TSR PEER GROUP   Alphatec Holdings, Inc.  Apyx Medical Corporation  Atrion Corporation  AxoGen, Inc.  BioLife Solutions Inc.  Cerus Corporation  Conformis Inc.  Cryoport, Inc.   Cutera Inc.  Eargo, Inc.  LeMaitre Vascular Inc.  Mesa Laboratories Inc.  NeuroPace Inc.  OrthoPediatrics Corporation  Outset Medical, Inc.  Pulmonx Corporation  Quotient Ltd.  SeaSpine Holdings Corporation  ShockWave Medical, Inc.   Silk Road Medical Inc.  Surmodics Inc.  Tactile Systems Technology Inc.  Vapotherm Inc.  ViewRay, Inc.    Zynex Inc.        

 

2.    APPENDIX B  SAMPLE PERFORMANCE PERIOD CALCULATION  SAMPLE ASSUMPTIONS:  Date of Grant: January 1, 2022   Performance Period:  January 1, 2022 to December 31, 2024   Target Number of Restricted Stock Units:  3,000   Maximum Number of Restricted Stock Units: 6,000     SAMPLE PERFORMANCE PERIOD CALCULATION:    2022 2023 2024 Total  SIBN TSR -4.9% 29.0% 13.6%    TSR of Median  Peer Company   8.1% 6.3% 37.6%    Difference -12.9% 22.7% -23.9%            Target # of  Shares  1,000 1,000 3,000    TSR  Performance  Formula  74.2% 145.4% 52.2%            Shares  Calculated  742 1,454 1,566            Shares  Released  742 1,454 - 2,196                   

 

3.    APPENDIX C  SAMPLE CHANGE IN CONTROL CALCULATION  SAMPLE ASSUMPTIONS:  Date of Grant: January 1, 2022   Performance Period:  January 1, 2022 to December 31, 2024   Target Number of Restricted Stock Units:  3,000   Maximum Number of Restricted Stock Units: 6,000   Acquisition Date: July 1, 2023       SAMPLE CHANGE IN CONTROL CALCULATION:      2022 H1 2023 H2 2023 2024 Total  SIBN TSR -4.9% 29.0%      Relative TSR  Peer Group   8.1% 6.3%      Difference -12.9% 22.7%               Target # of  Shares  1,000 3,000      TSR  Performance  Formula  74.2% 145.4%                 Shares  Calculated  742 4,362              CIC Units  4,362 – 742 =  3,620                 Shares  Released  742 (50%*4,362) –  742 = 1,439  33% * (3,620 –  1,439) = 727  1,454 4,362    Note: Calculation shows award assumed, continued, or substituted for performance period as set forth in Section 5.   The remaining CIC Shares not released upon the Change in Control shall be released in equal quarterly increments  for the remainder of the Measurement Period.  Remaining shares may vest earlier if the Participant’s employment is  terminated or if Participant resigns for Good Reason under criteria set forth in Section 5(b). If award is not assumed,  continued, or substituted, all CIC shall vest and be released upon change of control as set forth in Section 5(c).      

 

1.    ATTACHMENT II    SI-BONE, INC.  2018 EQUITY INCENTIVE PLAN  RESTRICTED STOCK UNIT AWARD AGREEMENT    Pursuant to the Restricted Stock Unit Grant Notice (the “Grant Notice”) and this Restricted Stock  Unit Award Agreement, SI-BONE, Inc. (the “Company”) has awarded you (“Participant”) a Restricted  Stock Unit Award (the “Award”) pursuant to the Company’s 2018 Equity Incentive Plan (the “Plan”) for  the number of Restricted Stock Units/shares indicated in the Grant Notice. Capitalized terms not explicitly  defined in this Restricted Stock Unit Award Agreement or the Grant Notice will have the same meanings  given to them in the Plan. The terms of your Award, in addition to those set forth in the Grant Notice, are  as follows.  1. GRANT OF THE AWARD.  This Award represents the right to be issued on a future date one  (1) share of Common Stock for each Restricted Stock Unit that vests on the applicable vesting  date(s) (subject to any adjustment under Section 3 below) as indicated in the Grant Notice. As of  the Date of Grant, the Company will credit to a bookkeeping account maintained by the Company  for your benefit (the “Account”) the number of Restricted Stock Units/shares of Common Stock  subject to the Award. This Award was granted in consideration of your services to the Company.  Except as otherwise provided herein, you will not be required to make any payment to the Company  or an Affiliate (other than services to the Company or an Affiliate) with respect to your receipt of  the Award, the vesting of the Restricted Stock Units or the delivery of the Company’s Common  Stock to be issued in respect of the Award.  Notwithstanding the foregoing, the Company reserves  the right to issue you the cash equivalent of Common Stock, in part or in full satisfaction of the  delivery of Common Stock upon the vesting of the Restricted Stock Units, and, to the extent  applicable, references in this Restricted Stock Unit Award Agreement and the Grant Notice to  Common Stock issuable in connection with your Restricted Stock Units will include the potential  issuance of its cash equivalent pursuant to such right.    2. VESTING.  Subject to the limitations contained herein, your Award will vest, if at all, in  accordance with the vesting schedule provided in the Grant Notice, provided that vesting will cease  upon the termination of your Continuous Service. Upon such termination of your Continuous  Service, the Restricted Stock Units/shares of Common Stock credited to the Account that were not  vested on the date of such termination will be forfeited at no cost to the Company and you will  have no further right, title or interest in or to such underlying shares of Common Stock.  3. NUMBER OF SHARES.  The number of Restricted Stock Units subject to your Award may  be adjusted from time to time for Capitalization Adjustments, as provided in the Plan. Any  additional Restricted Stock Units, shares, cash or other property that becomes subject to the Award  pursuant to this Section 3, if any, will be subject, in a manner determined by the Board to the same  forfeiture restrictions, restrictions on transferability, and time and manner of delivery as applicable  to the other Restricted Stock Units and shares covered by your Award. Notwithstanding the  provisions of this Section 3, no fractional shares or rights for fractional shares of Common Stock  will be created pursuant to this Section 3. Any fraction of a share will be rounded down to the  nearest whole share.  

 

2.    4. SECURITIES LAW COMPLIANCE.  You may not be issued any Common Stock under your  Award unless the shares of Common Stock underlying the Restricted Stock Units are either (i) then  registered under the Securities Act, or (ii) the Company has determined that such issuance would  be exempt from the registration requirements of the Securities Act. Your Award must also comply  with other applicable laws and regulations governing the Award, and you will not receive such  Common Stock if the Company determines that such receipt would not be in material compliance  with such laws and regulations.  5. TRANSFER RESTRICTIONS.  Prior to the time that shares of Common Stock have been  delivered to you, you may not transfer, pledge, sell or otherwise dispose of this Award or the shares  issuable in respect of your Award, except as expressly provided in this Section 5. For example, you  may not use shares that may be issued in respect of your Restricted Stock Units as security for a  loan. The restrictions on transfer set forth herein will lapse upon delivery to you of shares in respect  of your vested Restricted Stock Units. Notwithstanding the foregoing, by delivering written notice  to the Company, in a form satisfactory to the Company, you may designate a third party who, in  the event of your death, will thereafter be entitled to receive any distribution of Common Stock to  which you were entitled at the time of your death pursuant to this Restricted Stock Unit Award  Agreement. In the absence of such a designation, your legal representative will be entitled to  receive, on behalf of your estate, such Common Stock or other consideration.  (a) Death.  Your Award is transferable by will and by the laws of descent and  distribution. At your death, vesting of your Award will cease and your executor or administrator of  your estate will be entitled to receive, on behalf of your estate, any Common Stock or other  consideration that vested but was not issued before your death.   (b) Domestic Relations Orders.  Upon receiving written permission from the Board  or its duly authorized designee, and provided that you and the designated transferee enter into  transfer and other agreements required by the Company, you may transfer your right to receive the  distribution of Common Stock or other consideration hereunder, pursuant to a domestic relations  order, official marital settlement agreement or other divorce or separation instrument as permitted  by applicable law that contains the information required by the Company to effectuate the transfer.  You are encouraged to discuss the proposed terms of any division of this Award with the  Company’s General Counsel prior to finalizing the domestic relations order or marital settlement  agreement to verify that you may make such transfer, and if so, to help ensure the required  information is contained within the domestic relations order or marital settlement agreement.    6. DATE OF ISSUANCE.   (a) The issuance of shares in respect of the Restricted Stock Units is intended to  comply with Treasury Regulations Section 1.409A-1(b)(4) and will be construed and administered  in such a manner.  Subject to the satisfaction of the Withholding Obligation set forth in Section 11  of this Restricted Stock Unit Award Agreement, in the event one or more Restricted Stock Units  vests, then on the Settlement Date the Company will issue to you one (1) share of Common Stock  for each vested Restricted Stock Unit subject to any adjustment under Section 3 above, and subject  to any different provisions in the Grant Notice). Each Settlement Date determined by this paragraph  is referred to as an “Original Issuance Date”.   (b) If the Original Issuance Date falls on a date that is not a business day, delivery will  instead occur on the next following business day. In addition, if:  

 

3.    (i) the Original Issuance Date does not occur (1) during an “open window  period” applicable to you, as determined by the Company in accordance with the Company’s then- effective policy on trading in Company securities (“Insider Trading Policy”), or (2) on a date when  you are otherwise permitted to sell shares of Common Stock on an established stock exchange or  stock market (including but not limited to under a previously established written trading plan that  meets the requirements of Rule 10b5-1 under the Exchange Act and was entered into in compliance  with the Company's policies (a “10b5-1 Arrangement”)), and   (ii) either (1) the Company’s then-effective Insider Trading Policy does not  permit sell to cover transactions in satisfaction of applicable Withholding Obligations, (2) a  Withholding Obligation does not apply, or (3) the Company decides, prior to the Original Issuance  Date, (A) not to satisfy the Withholding Obligation by withholding shares of Common Stock from  the shares otherwise due, on the Original Issuance Date, to you under this Award, and (B) not to  permit you to enter into a “same day sale” commitment with a broker-dealer pursuant to Section 9  of this Restricted Stock Unit Award Agreement (including but not limited to a commitment under  a 10b5-1 Arrangement) and (C) not to permit you to pay your Withholding Obligation in cash,   then the shares that would otherwise be issued to you on the Original Issuance Date will not be  delivered on such Original Issuance Date and will instead be delivered on the first business day when you  are not prohibited from selling shares of the Company’s Common Stock in the open public market, but in  no event later than December 31 of the calendar year in which the Original Issuance Date occurs (that is,  the last day of your taxable year in which the Original Issuance Date occurs), or, if and only if permitted in  a manner that complies with Treasury Regulations Section 1.409A-1(b)(4), no later than the date that is the  15th day of the third calendar month of the applicable year following the year in which the shares of  Common Stock under this Award are no longer subject to a “substantial risk of forfeiture” within the  meaning of Treasury Regulations Section 1.409A-1(d).  (c) The form of delivery of the shares of Common Stock in respect of your Award  (e.g., a stock certificate or electronic entry evidencing such shares) will be determined by the  Company.   7. DIVIDENDS.  You will receive no benefit or adjustment to your Award with respect to any  cash dividend, stock dividend or other distribution that does not result from a Capitalization  Adjustment; provided, however, that this sentence will not apply with respect to any shares of  Common Stock that are delivered to you in connection with your Award after such shares have  been delivered to you.  8. AWARD NOT A SERVICE CONTRACT.   (a) Your Continuous Service with the Company or an Affiliate is not for any specified  term and may be terminated by you or by the Company or an Affiliate at any time, for any reason,  with or without cause and with or without notice.  Nothing in this Restricted Stock Unit Award  Agreement (including, but not limited to, the vesting of your Award or the issuance of the shares  subject to your Award), the Plan or any covenant of good faith and fair dealing that may be found  implicit in this Restricted Stock Unit Award Agreement or the Plan will: (i) confer upon you any  right to continue in the employ or service of, or affiliation with, the Company or an Affiliate; (ii)  constitute any promise or commitment by the Company or an Affiliate regarding the fact or nature  of future positions, future work assignments, future compensation or any other term or condition  of employment or affiliation; (iii) confer any right or benefit under this Restricted Stock Unit Award  Agreement or the Plan unless such right or benefit has specifically accrued under the terms of this  

 

4.    Restricted Stock Unit Award Agreement or Plan; or (iv) deprive the Company of the right to  terminate you at will and without regard to any future vesting opportunity that you may have.   (b) By accepting this Award, you acknowledge and agree that the right to continue  vesting in the Award is earned only by continuing as an employee, director or consultant at the will  of the Company or an Affiliate and that the Company has the right to reorganize, sell, spin-out or  otherwise restructure one or more of its businesses or Affiliates at any time or from time to time,  as it deems appropriate (a “reorganization”). You acknowledge and agree that such a  reorganization could result in the termination of your Continuous Service, or the termination of  Affiliate status of your employer and the loss of benefits available to you under this Restricted  Stock Unit Award Agreement, including but not limited to, the termination of the right to continue  vesting in the Award. You further acknowledge and agree that this Restricted Stock Unit Award  Agreement, the Plan, the transactions contemplated hereunder and the vesting schedule set forth  herein or any covenant of good faith and fair dealing that may be found implicit in any of them do  not constitute an express or implied promise of continued engagement as an employee or consultant  for the term of this Restricted Stock Unit Award Agreement, for any period, or at all, and will not  interfere in any way with the Company’s right to terminate your Continuous Service at any time,  with or without your cause or notice, or to conduct a reorganization.  9. WITHHOLDING OBLIGATION.  (a) On each vesting date, and on or before the time you receive a distribution of the  shares of Common Stock underlying your Restricted Stock Units, and at any other time as reasonably  requested by the Company in accordance with applicable tax laws, you hereby authorize any required  withholding from the Common Stock issuable to you and/or otherwise agree to make adequate provision,  including in cash, for any sums required to satisfy the federal, state, local and foreign tax withholding  obligations of the Company or any Affiliate that arise in connection with your Award (the “Withholding  Obligation”).    (b) By accepting this Award, you acknowledge and agree that the Company or any  Affiliate may, in its sole discretion, satisfy all or any portion of the Withholding Obligation relating to your  Award by any of the following means or by a combination of such means: (i) causing you to pay any portion  of the Withholding Obligation in cash; (ii) withholding from any compensation otherwise payable to you  by the Company or an Affiliate; (iii) withholding shares of Common Stock from the shares of Common  Stock issued or otherwise issuable to you in connection with the Award with a Fair Market Value (measured  as of the date shares of Common Stock are issued pursuant to Section 6) equal to the amount of such  Withholding Obligation; provided, however, that the number of such shares of Common Stock so withheld  will not exceed the amount necessary to satisfy the Withholding Obligation using the maximum statutory  withholding rates for federal, state, local and foreign tax purposes, including payroll taxes, that are  applicable to supplemental taxable income; and provided, further, that to the extent necessary to qualify for  an exemption from application of Section 16(b) of the Exchange Act, if applicable, such share withholding  procedure will be subject to the express prior approval of the Board or the Company’s Compensation  Committee; and/or (iv) permitting or requiring you to enter into a “same day sale” commitment, if  applicable, with a broker-dealer that is a member of the Financial Industry Regulatory Authority (a “FINRA  Dealer”), pursuant to this authorization and without further consent,  whereby you irrevocably elect to sell  a portion of the shares to be delivered in connection with your Restricted Stock Units to satisfy the  Withholding Obligation and whereby the FINRA Dealer irrevocably commits to forward the proceeds  necessary to satisfy the Withholding Obligation directly to the Company and/or its Affiliates.  (c) Unless the Withholding Obligation is satisfied, the Company will have no  obligation to deliver to you any Common Stock or other consideration pursuant to this Award.  

 

5.    (d) In the event the Withholding Obligation arises prior to the delivery to you of  Common Stock or it is determined after the delivery of Common Stock to you that the amount of the  Withholding Obligation was greater than the amount withheld by the Company, you agree to indemnify  and hold the Company harmless from any failure by the Company to withhold the proper amount.  10. TAX CONSEQUENCES.  The Company has no duty or obligation to minimize the tax  consequences to you of this Award and will not be liable to you for any adverse tax consequences  to you arising in connection with this Award. You are hereby advised to consult with your own  personal tax, financial and/or legal advisors regarding the tax consequences of this Award and by  signing the Grant Notice, you have agreed that you have done so or knowingly and voluntarily  declined to do so. You understand that you (and not the Company) will be responsible for your own  tax liability that may arise as a result of this investment or the transactions contemplated by this  Award Agreement.   11. UNSECURED OBLIGATION.  Your Award is unfunded, and as a holder of a vested Award,  you will be considered an unsecured creditor of the Company with respect to the Company’s  obligation, if any, to issue shares or other property pursuant to this Restricted Stock Unit Award  Agreement. You will not have voting or any other rights as a stockholder of the Company with  respect to the shares to be issued pursuant to this Restricted Stock Unit Award Agreement until  such shares are issued to you pursuant to Section 6 of this Restricted Stock Unit Award Agreement.  Upon such issuance, you will obtain full voting and other rights as a stockholder of the Company.  Nothing contained in this Restricted Stock Unit Award Agreement, and no action taken pursuant  to its provisions, will create or be construed to create a trust of any kind or a fiduciary relationship  between you and the Company or any other person.   12. NOTICES.  Any notice or request required or permitted hereunder will be given in writing  (including electronically) and will be deemed effectively given upon receipt or, in the case of  notices delivered by mail by the Company to you, five (5) days after deposit in the United States  mail, postage prepaid, addressed to you at the last address you provided to the Company. The  Company may, in its sole discretion, decide to deliver any documents related to participation in the  Plan and this Award by electronic means or to request your consent to participate in the Plan by  electronic means. By accepting this Award, you consent to receive such documents by electronic  delivery and to participate in the Plan through an on-line or electronic system established and  maintained by the Company or another third party designated by the Company.  13. ADDITIONAL ACKNOWLEDGEMENTS. You hereby consent and acknowledge that:  (a) Receipt of the Award is voluntary and therefore you must accept the terms and  conditions of this Award Agreement and Grant Notice as a condition to receipt of this Award. This  Award is voluntary and occasional and does not create any contractual or other right to receive  future awards or other benefits in lieu of future awards, even if similar awards have been granted  repeatedly in the past. All determinations with respect to any such future awards, including, but not  limited to, the time or times when such awards are made, the size of such awards and performance  and other conditions applied to the awards, will be at the sole discretion of the Company.   (b) The future value of your Award is unknown and cannot be predicted with certainty.  You do not have, and will not assert, any claim or entitlement to compensation, indemnity or  damages arising from the termination of this Award or diminution in value of this Award and you  irrevocably release the Company, its Affiliates and, if applicable, your employer, if different from  the Company, from any such claim that may arise.  

 

6.    (c) The rights and obligations of the Company under your Award will be transferable  by the Company to any one or more persons or entities, and all covenants and agreements hereunder  will inure to the benefit of, and be enforceable by, the Company’s successors and assigns.   (d) You agree upon request to execute any further documents or instruments necessary  or desirable in the sole determination of the Company to carry out the purposes or intent of  your Award.  (e) You acknowledge and agree that you have reviewed your Award in its entirety,  have had an opportunity to obtain the advice of counsel prior to executing and accepting your  Award and fully understand all provisions of your Award.  (f) This Award Agreement will be subject to all applicable laws, rules, and  regulations, and to such approvals by any governmental agencies or national securities exchanges  as may be required.  (g) All obligations of the Company under the Plan and this Award Agreement will be  binding on any successor to the Company, whether the existence of such successor is the result of  a direct or indirect purchase, merger, consolidation, or otherwise, of all or substantially all of the  business and assets of the Company.  14. CLAWBACK.  Your Award (and any compensation paid or shares issued under your Award)  is subject to recoupment in accordance with The Dodd–Frank Wall Street Reform and Consumer  Protection Act and any implementing regulations thereunder, any clawback policy adopted by the  Company and any compensation recovery policy otherwise required by applicable law. No  recovery of compensation under such a clawback policy will be an event giving rise to a right to  voluntarily terminate employment upon a resignation for “good reason,” or for a “constructive  termination” or any similar term under any plan of or agreement with the Company.  15. GOVERNING PLAN DOCUMENT.  Your Award is subject to all the provisions of the Plan,  the provisions of which are hereby made a part of your Award, and is further subject to all  interpretations, amendments, rules and regulations which may from time to time be promulgated  and adopted pursuant to the Plan. Your Award (and any compensation paid or shares issued under  your Award) is subject to recoupment in accordance with The Dodd–Frank Wall Street Reform and  Consumer Protection Act and any implementing regulations thereunder, any clawback policy  adopted by the Company and any compensation recovery policy otherwise required by applicable  law. No recovery of compensation under such a clawback policy will be an event giving rise to a  right to voluntarily terminate employment upon a resignation for “good reason,” or for a  “constructive termination” or any similar term under any plan of or agreement with the Company.  16. EFFECT ON OTHER EMPLOYEE BENEFIT PLANS.  The value of the Award subject to this  Restricted Stock Unit Award Agreement will not be included as compensation, earnings, salaries,  or other similar terms used when calculating benefits under any employee benefit plan (other than  the Plan) sponsored by the Company or any Affiliate except as such plan otherwise expressly  provides. The Company expressly reserves its rights to amend, modify, or terminate any or all of  the employee benefit plans of the Company or any Affiliate.  17. SEVERABILITY.  If all or any part of this Restricted Stock Unit Award Agreement or the  Plan is declared by any court or governmental authority to be unlawful or invalid, such  unlawfulness or invalidity will not invalidate any portion of this Restricted Stock Unit Award  

 

7.    Agreement or the Plan not declared to be unlawful or invalid. Any Section of this Restricted Stock  Unit Award Agreement (or part of such a Section) so declared to be unlawful or invalid will, if  possible, be construed in a manner which will give effect to the terms of such Section or part of a  Section to the fullest extent possible while remaining lawful and valid.  18. OTHER DOCUMENTS. You hereby acknowledge receipt or the right to receive a document  providing the information required by Rule 428(b)(1) promulgated under the Securities Act. In  addition, you acknowledge receipt of the Company’s policy permitting certain individuals to sell  shares only during certain "window" periods and the Company's Insider Trading Policy, in effect  from time to time.   19. AMENDMENT.  This Restricted Stock Unit Award Agreement may not be modified,  amended or terminated except by an instrument in writing, signed by you and by a duly authorized  representative of the Company. Notwithstanding the foregoing, this Restricted Stock Unit Award  Agreement may be amended solely by the Board by a writing which specifically states that it is  amending this Restricted Stock Unit Award Agreement, so long as a copy of such amendment is  delivered to you, and provided that, except as otherwise expressly provided in the Plan, no such  amendment materially adversely affecting your rights hereunder may be made without your written  consent. Without limiting the foregoing, the Board reserves the right to change, by written notice  to you, the provisions of this Restricted Stock Unit Award Agreement in any way it may deem  necessary or advisable to carry out the purpose of the Award as a result of any change in applicable  laws or regulations or any future law, regulation, ruling, or judicial decision, provided that any such  change will be applicable only to rights relating to that portion of the Award which is then subject  to restrictions as provided herein.   20. COMPLIANCE WITH SECTION 409A OF THE CODE.  This Award is intended to be exempt  from the application of Section 409A of the Code, including but not limited to by reason of  complying with the “short-term deferral” rule set forth in Treasury Regulation Section 1.409A- 1(b)(4) and any ambiguities herein will be interpreted accordingly.  Notwithstanding the foregoing,  if it is determined that the Award fails to satisfy the requirements of the short-term deferral rule  and is otherwise not exempt from, and determined to be deferred compensation subject to Section  409A of the Code, this Award will comply with Section 409A to the extent necessary to avoid  adverse personal tax consequences and any ambiguities herein will be interpreted accordingly.  If  it is determined that the Award is deferred compensation subject to Section 409A and you are a  “Specified Employee” (within the meaning set forth in Section 409A(a)(2)(B)(i) of the Code) as of  the date of your  “Separation from Service” (as defined in Section 409A), then the issuance of any  shares that would otherwise be made upon the date of your Separation from Service or within the  first six (6) months thereafter will not be made on the originally scheduled date(s) and will instead  be issued in a lump sum on the date that is six (6) months and one day after the date of the Separation  from Service, with the balance of the shares issued thereafter in accordance with the original vesting  and issuance schedule set forth above, but if and only if such delay in the issuance of the shares is  necessary to avoid the imposition of adverse taxation on you in respect of the shares under Section  409A of the Code. Each installment of shares that vests is intended to constitute a “separate  payment” for purposes of Treasury Regulation Section 1.409A-2(b)(2).  Notwithstanding any  contrary provision of the Notice of Grant or of this Restricted Stock Unit Award Agreement, under  no circumstances will the Company reimburse you for any taxes or other costs under Section 409A  or any other tax law or rule.  All such taxes and costs are solely your responsibility.  * * * * *     

 

8.     This Restricted Stock Unit Award Agreement will be deemed to be signed by the Company and the  Participant upon the signing by the Participant of the Restricted Stock Unit Grant Notice to which it is  attached.  

 

  ATTACHMENT III  2018 EQUITY INCENTIVE PLAN    SI-BONE, INC.  2018 EQUITY INCENTIVE PLAN  ADOPTED BY THE BOARD OF DIRECTORS: JULY 26, 2018  APPROVED BY THE STOCKHOLDERS: OCTOBER 4, 2018  EFFECTIVE DATE:  OCTOBER 16, 2018  1. GENERAL.  (a) Eligible Award Recipients and Plan Purposes.  Employees, Directors and Consultants are  eligible to receive Awards under the Plan.  The Company, by means of the Plan, seeks to secure and retain the  services of such persons, to provide incentives for such persons to exert maximum efforts for the success of the  Company and any Affiliate and to provide a means by which such eligible recipients may be given an  opportunity to benefit from increases in value of the Common Stock through the granting of Awards.  (b) Available Awards.  The Plan provides for the grant of the following types of Awards: (i)  Incentive Stock Options, (ii) Nonstatutory Stock Options, (iii) Stock Appreciation Rights (iv) Restricted Stock  Awards, (v) Restricted Stock Unit Awards, (vi) Performance Stock Awards, (vii) Performance Cash Awards, and  (viii) Other Stock Awards.  2. ADMINISTRATION.  (a) Administration by Board.  The Board will administer the Plan.  The Board may delegate  administration of the Plan to a Committee or Committees, as provided in Section 2(c).  (b) Powers of Board.  The Board will have the power, subject to, and within the limitations of,  the express provisions of the Plan:  (i) To determine (A) which of the persons eligible under the Plan will be granted Awards;  (B) when and how each Award will be granted; (C) what type of Award will be granted; (D) the provisions of  each Award (which need not be identical), including when a person will be permitted to exercise or otherwise  receive cash or Common Stock under the Award; (E) the number of shares of Common Stock subject to, or the  cash value of, an Award; and (F) the Fair Market Value applicable to a Stock Award.  (ii) To construe and interpret the Plan and Awards granted under it, and to establish,  amend and revoke rules and regulations for administration of the Plan and Awards.  The Board, in the exercise  of these powers, may correct any defect, omission or inconsistency in the Plan or in any Award Agreement or  in the written terms of a Performance Cash Award, in a manner and to the extent it will deem necessary or  expedient to make the Plan or Award fully effective.  (iii) To settle all controversies regarding the Plan and Awards granted under it.  (iv) To accelerate the time at which an Award may first be exercised or the time during  which an Award or any part thereof will vest, notwithstanding the provisions in the Award Agreement stating  the time at which it may first be exercised or the time during which it will vest.    (v) To prohibit the exercise of any Option, SAR or other exercisable Award during a  period of up to thirty days prior to the consummation of any pending stock dividend, stock split, combination  

 

  or exchange of shares, merger, consolidation or other distribution (other than normal cash dividends) of  Company assets to stockholders, or any other change affecting the shares of Common Stock or the share price  of the Common Stock including any Corporate Transaction, for reasons of administrative convenience.  (vi) To suspend or terminate the Plan at any time.  Except as otherwise provided in the  Plan or an Award Agreement, suspension or termination of the Plan will not impair a Participant’s rights under  his or her then-outstanding Award without his or her written consent except as provided in subsection (viii)  below.  (vii) To amend the Plan in any respect the Board deems necessary or advisable, including,  without limitation, by adopting amendments relating to Incentive Stock Options and certain nonqualified  deferred compensation under Section 409A of the Code and/or to make the Plan or Awards granted under the  Plan compliant with the requirements for Incentive Stock Options or exempt from or compliant with the  requirements for nonqualified deferred compensation under Section 409A of the Code, subject to the  limitations, if any, of applicable law. However, if required by applicable law or listing requirements, and except  as provided in Section 10(a) relating to Capitalization Adjustments, the Company will seek stockholder  approval of any amendment of the Plan that (A) materially increases the number of shares of Common Stock  available for issuance under the Plan, (B) materially expands the class of individuals eligible to receive Awards  under the Plan, (C) materially increases the benefits accruing to Participants under the Plan, (D) materially  reduces the price at which shares of Common Stock may be issued or purchased under the Plan, (E) materially  extends the term of the Plan, or (F) materially expands the types of Awards available for issuance under the  Plan.  Except as provided in the Plan (including subsection (viii) below) or an Award Agreement, no amendment  of the Plan will impair a Participant’s rights under an outstanding Award unless (1) the Company requests the  consent of the affected Participant, and (2) such Participant consents in writing.    (viii) To submit any amendment to the Plan for stockholder approval.  (ix) To approve forms of Award Agreements for use under the Plan and to amend the  terms of any one or more Awards, including, but not limited to, amendments to provide terms more favorable  to the Participant than previously provided in the Award Agreement, subject to any specified limits in the Plan  that are not subject to Board discretion; provided however, that a Participant’s rights under any Award will not  be impaired by any such amendment unless (A) the Company requests the consent of the affected Participant,  and (B) such Participant consents in writing.  Notwithstanding the foregoing, (1) a Participant’s rights will not  be deemed to have been impaired by any such amendment if the Board, in its sole discretion, determines that  the amendment, taken as a whole, does not materially impair the Participant’s rights, and (2) subject to the  limitations of applicable law, if any, the Board may amend the terms of any one or more Awards without the  affected Participant’s consent (A) to maintain the qualified status of the Award as an Incentive Stock Option  under Section 422 of the Code; (B) to change the terms of an Incentive Stock Option, if such change results in  impairment of the Award solely because it impairs the qualified status of the Award as an Incentive Stock  Option under Section 422 of the Code; (C) to clarify the manner of exemption from, or to bring the Award into  compliance with, Section 409A of the Code; or (D) to comply with other applicable laws or listing requirements.  (x) Generally, to exercise such powers and to perform such acts as the Board deems  necessary or expedient to promote the best interests of the Company and that are not in conflict with the  provisions of the Plan or Awards.  (xi) To adopt such rules, procedures and sub-plans related to the operation and  administration of the Plan as are necessary or appropriate under local laws and regulations to permit  participation in the Plan by Employees, Directors or Consultants who are foreign nationals or employed outside  the United States (provided that Board approval will not be necessary for immaterial modifications to the Plan  or any Award Agreement that are required for compliance with the laws or regulations of the relevant foreign  jurisdiction).  (xii) To effect at any time or from time to time, with the consent of any adversely affected  Participant, (A) the reduction of the exercise, purchase or strike price of any outstanding Option or SAR under  

 

  the Plan; (B) the cancellation of any outstanding Option or SAR under the Plan and the grant in substitution  therefor of a new (1) Option or SAR under the Plan, (2) a Restricted Stock Award, (3) a Restricted Stock Unit  Award, (4) an Other Stock Award, (5) cash and/or (6) other valuable consideration determined by the Board,  in its sole discretion; or (C) any other action that is treated as a repricing under generally accepted accounting  principles.  (c) Delegation to Committee.  (i) General.  The Board may delegate some or all of the administration of the Plan to a  Committee or Committees.  If administration of the Plan is delegated to a Committee, the Committee will have,  in connection with the administration of the Plan, the powers theretofore possessed by the Board that have  been delegated to the Committee, including the power to delegate to a subcommittee of the Committee any of  the administrative powers the Committee is authorized to exercise (and references in this Plan to the Board  will thereafter be to the Committee or subcommittee).  Any delegation of administrative powers will be  reflected in resolutions, not inconsistent with the provisions of the Plan, adopted from time to time by the Board  or Committee (as applicable).  The Committee may, at any time, abolish the subcommittee and/or revest in the  Committee any powers delegated to the subcommittee.  The Board may retain the authority to concurrently  administer the Plan with the Committee and may, at any time, revest in the Board some or all of the powers  previously delegated.  (ii) Rule 16b-3 Compliance.  The Committee may consist solely of two or more Non- Employee Directors, in accordance with Rule 16b-3.    (d) Delegation to an Officer.  The Board may delegate to one or more Officers the authority to  do one or both of the following (i) designate Employees who are not Officers to be recipients of Options and  SARs (and, to the extent permitted by applicable law, other Stock Awards) and, to the extent permitted by  applicable law, the terms of such Awards, and (ii) determine the number of shares of Common Stock to be  subject to such Stock Awards granted to such Employees; provided, however, that the Board resolutions  regarding such delegation will specify the total number of shares of Common Stock that may be subject to the  Stock Awards granted by such Officer and that such Officer may not grant a Stock Award to himself or herself.   Any such Stock Awards will be granted on the form of Award Agreement most recently approved for use by the  Committee or the Board, unless otherwise provided in the resolutions approving the delegation authority.   Notwithstanding anything to the contrary in this Section 2(d), the Board may not delegate authority to an  Officer who is acting solely in the capacity of an Officer (and not also as a Director) to determine the Fair Market  Value pursuant to Section 15(w)(iii) below.  (e) Effect of Board’s Decision. All determinations, interpretations and constructions made by  the Board in good faith will not be subject to review by any person and will be final, binding and conclusive on  all persons.  3. SHARES SUBJECT TO THE PLAN.  (a) Share Reserve.  Subject to Section 10(a) relating to Capitalization Adjustments, and the  following sentence regarding the annual increase, the aggregate number of shares of Common Stock that may  be issued pursuant to Stock Awards will not exceed 2,576,538 shares, (the “Share Reserve”).  In addition, the  Share Reserve will automatically increase on January 1st of each year for a period of ten years commencing on  January 1, 2019 and ending on (and including) January 1, 2028, in an amount equal to five percent (5%) of  the total number of shares of Common Stock outstanding on the last day of the preceding calendar year.   Notwithstanding the foregoing, the Board may act prior to the first day of any calendar year to provide that  there will be no increase in the Share Reserve for such calendar year or that the increase in the Share Reserve  for such calendar year will be a lesser number of shares of Common Stock than would otherwise occur pursuant  to the preceding sentence.  (b) Share Reserve Limit.  For clarity, the Share Reserve in Section 3(a) is a limitation on the  number of shares of Common Stock that may be issued pursuant to the Plan and does not limit the granting of  

 

  Stock Awards except that the Company shall keep available at all times the number of shares of Common Stock  reasonably required to satisfy its obligations to issue shares pursuant to such Stock Awards.  Shares may be  issued in connection with a merger or acquisition as permitted by NASDAQ Listing Rule 5635(c) or, if  applicable, NYSE Listed Company Manual Section 303A.08, AMEX Company Guide Section 711 or other  applicable rule, and such issuance will not reduce the number of shares available for issuance under the Plan.   Furthermore, if a Stock Award or any portion thereof (i) expires or otherwise terminates without all of the  shares covered by such Stock Award having been issued or (ii) is settled in cash (i.e., the Participant receives  cash rather than stock), such expiration, termination or settlement will not reduce (or otherwise offset) the  number of shares of Common Stock that are subject to the Share Reserve and available for issuance under the  Plan.  (c) Reversion of Shares to the Share Reserve.  If any shares of Common Stock issued pursuant  to a Stock Award are forfeited back to or repurchased by the Company because of the failure to meet a  contingency or condition required to vest such shares in the Participant, then the shares that are forfeited or  repurchased will revert to and again become available for issuance under the Plan.  Any shares reacquired by  the Company in satisfaction of tax withholding obligations on a Stock Award or as consideration for the exercise  or purchase price of a Stock Award will again become available for issuance under the Plan.  (d) Incentive Stock Option Limit.  Subject to the Share Reserve (as increased under Section 3(a))  and Section 10(a) relating to Capitalization Adjustments, the aggregate maximum number of shares of Common  Stock that may be issued pursuant to the exercise of Incentive Stock Options will be the number of shares of  Common Stock equal to three (3) times the Share Reserve.  (e) Source of Shares.  The stock issuable under the Plan will be shares of authorized but unissued  or reacquired Common Stock, including shares repurchased by the Company on the open market or otherwise.  4. ELIGIBILITY.  (a) Eligibility for Specific Stock Awards.  Incentive Stock Options may be granted only to  employees of the Company or a “parent corporation” or “subsidiary corporation” thereof (as such terms are  defined in Sections 424(e) and 424(f) of the Code).  Stock Awards other than Incentive Stock Options may be  granted to Employees, Directors and Consultants; provided, however, that Stock Awards may not be granted to  Employees, Directors and Consultants who are providing Continuous Service only to any “parent” of the  Company, as such term is defined in Rule 405, unless (i) the stock underlying such Stock Awards is treated as  “service recipient stock” under Section 409A of the Code (for example, because the Stock Awards are granted  pursuant to a Corporate Transaction such as a spin off transaction), (ii) the Company, in consultation with its  legal counsel, has determined that such Stock Awards are otherwise exempt from Section 409A of the Code, or  (iii) the Company, in consultation with its legal counsel, has determined that such Stock Awards comply with  the distribution requirements of Section 409A of the Code.  (b) Ten Percent Stockholders.  A Ten Percent Stockholder will not be granted an Incentive Stock  Option unless the exercise price of such Option is at least 110% of the Fair Market Value on the date of grant  and the Option is not exercisable after the expiration of five years from the date of grant.  5. PROVISIONS RELATING TO OPTIONS AND STOCK APPRECIATION RIGHTS.  Each Option or SAR will be in such form and will contain such terms and conditions as the Board  deems appropriate.  All Options will be separately designated Incentive Stock Options or Nonstatutory Stock  Options at the time of grant, and, if certificates are issued, a separate certificate or certificates will be issued  for shares of Common Stock purchased on exercise of each type of Option. If an Option is not specifically  designated as an Incentive Stock Option, or if an Option is designated as an Incentive Stock Option but some  portion or all of the Option fails to qualify as an Incentive Stock Option under the applicable rules, then the  Option (or portion thereof) will be a Nonstatutory Stock Option. The provisions of separate Options or SARs  need not be identical; provided, however, that each Award Agreement will conform to (through incorporation  

 

  of provisions hereof by reference in the applicable Award Agreement or otherwise) the substance of each of  the following provisions:  (a) Term.  Subject to the provisions of Section 4(b) regarding Ten Percent Stockholders, no  Option or SAR will be exercisable after the expiration of ten years from the date of its grant or such shorter  period specified in the Award Agreement.  (b) Exercise Price.  Subject to the provisions of Section 4(b) regarding Ten Percent Stockholders,  the exercise or strike price of each Option or SAR will be not less than 100% of the Fair Market Value of the  Common Stock subject to the Option or SAR on the date the Award is granted.  Notwithstanding the foregoing,  an Option or SAR may be granted with an exercise or strike price lower than 100% of the Fair Market Value of  the Common Stock subject to the Award if such Award is granted pursuant to an assumption of or substitution  for another option or stock appreciation right pursuant to a Corporate Transaction and in a manner consistent  with the provisions of Section 409A of the Code and, if applicable, Section 424(a) of the Code.  Each SAR will be  denominated in shares of Common Stock equivalents.  (c) Procedure for Option Exercise and Payment of Exercise Price for Options.  To exercise  any outstanding Option, the Participant must provide notice of exercise to the Stock Plan Administrator in  compliance with the provisions of the Stock Option Agreement evidencing such Option.  The purchase price of  Common Stock acquired pursuant to the exercise of an Option will be paid, to the extent permitted by applicable  law and as determined by the Board in its sole discretion, by any combination of the methods of payment set  forth below.  The Board has the authority to grant Options that do not permit all of the following methods of  payment (or otherwise restrict the ability to use certain methods) and to grant Options that require the consent  of the Company to use a particular method of payment.  The permitted methods of payment are as follows:  (i) by cash, check, bank draft or money order payable to the Company;  (ii) provided that at the time of exercise the Company has established procedures for  cashless exercise, pursuant to a program developed under Regulation T as promulgated by the Federal Reserve  Board that, prior to the issuance of the stock subject to the Option, results in either the receipt of cash (or check)  by the Company or the receipt of irrevocable instructions to pay the aggregate exercise price to the Company  from the sales proceeds;  (iii) provided that at the time of exercise the Company has established procedures for  accepting such form of payment, by delivery to the Company (either by actual delivery or attestation) of  already-owned shares of Common Stock that are owned free and clear of any liens, claims, encumbrances or  security interests, and that are valued at Fair Market Value on the date of exercise; provided that (A) such  tender would not violate the provisions of any law, regulation or agreement restricting the redemption of the  Company’s stock, (B) any certificated shares must be endorsed or accompanied by an executed assignment  separate from certificate, and (C) such shares have been held by the Participant for the minimum period, if any,  necessary to avoid adverse accounting treatment as a result of such tender;  (iv) provided that at the time of exercise the Company has established procedures for  accepting such payment via a “net exercise,” if an Option is a Nonstatutory Stock Option, by a “net exercise”  arrangement pursuant to which the Company will reduce the number of shares of Common Stock issuable upon  exercise by the largest whole number of shares with a Fair Market Value that does not exceed the aggregate  exercise price; provided, however, that the Company will accept a cash or other payment from the Participant  to the extent of any remaining balance of the aggregate exercise price not satisfied by such reduction in the  number of whole shares to be issued.  Shares of Common Stock will no longer be subject to an Option and will  not be exercisable thereafter to the extent that (A) shares issuable upon exercise are used to pay the exercise  price pursuant to the “net exercise,” (B) shares are delivered to the Participant as a result of such exercise, and  (C) shares are withheld to satisfy tax withholding obligations; or  (v) in any other form of legal consideration that may be acceptable to the Board and  specified in the applicable Award Agreement.  

 

  (d) Exercise and Payment of a SAR.  To exercise any outstanding SAR, the Participant must  provide written notice of exercise to the Company in compliance with the provisions of the Stock Appreciation  Right Agreement evidencing such SAR.  The appreciation distribution payable on the exercise of a SAR will be  not greater than an amount equal to the excess of (A) the aggregate Fair Market Value (on the date of the  exercise of the SAR) of a number of shares of Common Stock equal to the number of Common Stock equivalents  in which the Participant is vested under such SAR, and with respect to which the Participant is exercising the  SAR on such date, over (B) the aggregate strike price of the number of Common Stock equivalents with respect  to which the Participant is exercising the SAR on such date.  The appreciation distribution may be paid in  Common Stock, in cash, in any combination of the two or in any other form of consideration, as determined by  the Board and contained in the Award Agreement evidencing such SAR.  (e) Transferability of Options and SARs.  The Board may, in its sole discretion, impose such  limitations on the transferability of Options and SARs as the Board will determine.  In the absence of such a  determination by the Board to the contrary, the following restrictions on the transferability of Options and  SARs will apply:  (i) Restrictions on Transfer.  An Option or SAR will not be transferable except by will  or by the laws of descent and distribution (and pursuant to subsections (ii) and (iii) below), and will be  exercisable during the lifetime of the Participant only by the Participant; provided, however, that the Board may,  in its sole discretion, permit transfer of the Option or SAR in a manner that is not prohibited by applicable tax  and securities laws upon the Participant’s request, including to a trust if the Participant is considered to be the  sole beneficial owner (determined under Section 671 of the Code and applicable state law) while the Option is  held in the trust, provided that the Participant and the trustee enter into a transfer and other agreements  required by the Company.  Except as explicitly provided herein, neither an Option nor a SAR may be transferred  for consideration.   (ii) Domestic Relations Orders.  Notwithstanding the foregoing, subject to the  execution of transfer documentation in a format acceptable to the Company, an Option or SAR may be  transferred pursuant to the terms of a domestic relations order, marital settlement agreement or other divorce  or separation instrument; provided, however, that if an Option is an Incentive Stock Option, such Option may be  deemed to be a Nonstatutory Stock Option as a result of such transfer.   (iii) Beneficiary Designation.  Subject to the approval of the Board or a duly authorized  Officer, a Participant may, by delivering written notice to the Company or to any third party designated by the  Company, in a form approved by the Company (or the designated broker), designate a third party who, upon  the death of the Participant, will thereafter be entitled to exercise the Option or SAR and receive the Common  Stock or other consideration resulting from such exercise.  In the absence of such a designation, upon the death  or the Participant, the executor or administrator of the Participant’s estate or the Participant’s legal heirs will  be entitled to exercise the Option or SAR and receive the Common Stock or other consideration resulting from  such exercise. However, the Company may prohibit designation of a beneficiary at any time, including due to  any conclusion by the Company that such designation would be inconsistent with the provisions of applicable  laws.  (f) Vesting Generally.  The total number of shares of Common Stock subject to an Option or SAR  may vest and therefore become exercisable in periodic installments that may or may not be equal.  The Option  or SAR may be subject to such other terms and conditions on the time or times when it may or may not be  exercised (which may be based on the satisfaction of Performance Goals or other criteria) as the Board may  deem appropriate.  The vesting provisions of individual Options or SARs may vary.  The provisions of this  Section 5(f) are subject to any Option or SAR provisions governing the minimum number of shares of Common  Stock as to which an Option or SAR may be exercised.  (g) Termination of Continuous Service.  Except as otherwise provided in the applicable Award  Agreement or other agreement between the Participant and the Company, if a Participant’s Continuous Service  terminates (other than for Cause and other than upon the Participant’s death or Disability), the Participant may  exercise his or her Option or SAR (to the extent that the Participant was entitled to exercise such Award as of  

 

  the date of termination of Continuous Service) within the period of time ending on the earlier of (i) the date  three months following the termination of the Participant’s Continuous Service (or such longer or shorter  period specified in the applicable Award Agreement) and (ii) the expiration of the term of the Option or SAR as  set forth in the Award Agreement.  If, after termination of Continuous Service, the Participant does not exercise  his or her Option or SAR (as applicable) within the applicable time frame, the Option or SAR will terminate.  (h) Automatic Extension of Termination Date.  If the exercise of an Option or SAR following the  termination of the Participant’s Continuous Service for any reason other than for Cause and other than upon  the Participant’s death of Disability would be prohibited at any time solely because the issuance of shares of  Common Stock would violate the registration requirements under the Securities Act, then the Option or SAR  will terminate on the earlier of (i) the expiration of a period equal to the applicable post-termination exercise  period after the termination of the Participant’s Continuous Service during which the exercise of the Option or  SAR would not be in violation of such registration requirements, or (ii) the expiration of the term of the Option  or SAR as set forth in the applicable Award Agreement.  In addition, unless otherwise provided in a Participant’s  Award Agreement, if the immediate sale of any Common Stock received upon exercise of an Option or SAR  within the applicable post-termination exercise period following the termination of the Participant’s  Continuous Service (other than for Cause) would violate the Company’s insider trading policy, then the Option  or SAR will not terminate prior to (i) the expiration of a period of months equal to the applicable post- termination exercise period after the termination of the Participant’s Continuous Service during which the sale  of the Common Stock received upon exercise of the Option or SAR would not be in violation of the Company’s  insider trading policy, or (ii) the expiration of the permitted term of the Option or SAR as set forth in the  applicable Award Agreement as determined without giving effect to any termination of Continuous Service.  (i) Disability of Participant.  Except as otherwise provided in the applicable Award Agreement  or other agreement between the Participant and the Company, if a Participant’s Continuous Service terminates  as a result of the Participant’s Disability, the Participant may exercise his or her Option or SAR (to the extent  that the Participant was entitled to exercise such Option or SAR as of the date of termination of Continuous  Service), but only within such period of time ending on the earlier of (i) the date 12 months following such  termination of Continuous Service (or such longer or shorter period specified in the Award Agreement) and  (ii) the expiration of the term of the Option or SAR as set forth in the Award Agreement.  If, after termination of  Continuous Service, the Participant does not exercise his or her Option or SAR within the applicable time frame,  the Option or SAR (as applicable) will terminate.  (j) Death of Participant.  Except as otherwise provided in the applicable Award Agreement or  other agreement between the Participant and the Company, if (i) a Participant’s Continuous Service terminates  as a result of the Participant’s death, or (ii) the Participant dies within the period (if any) specified in the Award  Agreement for exercisability after the termination of the Participant’s Continuous Service for a reason other  than death, then the Option or SAR may be exercised (to the extent the Participant was entitled to exercise such  Option or SAR as of the date of death) by the Participant’s estate, by a person who acquired the right to exercise  the Option or SAR by bequest or inheritance or by a person designated to exercise the Option or SAR upon the  Participant’s death, but only within the period ending on the earlier of (i) the date 18 months following the date  of death (or such longer or shorter period specified in the Award Agreement) and (ii) the expiration of the term  of such Option or SAR as set forth in the Award Agreement.  If, after the Participant’s death, the Option or SAR  is not exercised within the applicable time frame, the Option or SAR (as applicable) will terminate.  (k) Termination for Cause.  Except as explicitly provided otherwise in a Participant’s Award  Agreement or other individual written agreement between the Company or any Affiliate and the Participant, if  a Participant’s Continuous Service is terminated for Cause, the Option or SAR will terminate immediately upon  such Participant’s termination of Continuous Service, and the Participant will be prohibited from exercising his  or her Option or SAR from and after the time of such termination of Continuous Service.  If a Participant’s  Continuous Service is suspended pending an investigation of the existence of Cause, all of the Participant’s  rights under the Option or SAR will also be suspended during the investigation period.  (l) Non-Exempt Employees.  No Option or SAR, whether or not vested, granted to an Employee  who is a non-exempt employee for purposes of the Fair Labor Standards Act of 1938, as amended, will be first  

 

  exercisable for any shares of Common Stock until at least six months following the date of grant of the Option  or SAR. Notwithstanding the foregoing, consistent with the provisions of the Worker Economic Opportunity  Act, (i) in the event of the Participant’s death or Disability, (ii) upon a Corporate Transaction in which such  Option or SAR is not assumed, continued, or substituted, (iii) upon a Change in Control, or (iv) upon the  Participant’s retirement (as such term may be defined in the Participant’s Award Agreement or in another  applicable agreement or in accordance with the Company’s then current employment policies and guidelines),  any such vested Options and SARs may be exercised earlier than six months following the date of grant.  The  foregoing provision is intended to operate so that any income derived by a non-exempt employee in connection  with the exercise or vesting of an Option or SAR will be exempt from his or her regular rate of pay.  To the  extent permitted and/or required for compliance with the U.S. Worker Economic Opportunity Act to ensure  that any income derived by a non-exempt employee in connection with the exercise, vesting or issuance of any  shares under any other Stock Award will be exempt from the employee’s regular rate of pay, the provisions of  this Section 5(l) will apply to all Stock Awards and are hereby incorporated by reference into such Stock Award  Agreements.  (m) Whole Shares.  Options and SARs may be exercised only with respect to whole shares of  Common Stock.  (n) Securities Compliance.  No Option or SAR may be exercised unless the shares of Common  Stock issuable upon such exercise are then registered under the Securities Act or, if such shares of Common  Stock are not then so registered, the Company has determined that such exercise and issuance would be exempt  from the registration requirements of the Securities Act.  The exercise of any Option or SAR also must comply  with other applicable laws and regulations governing the Award, and the Participant may not exercise the  Award if the Company determines  6. PROVISIONS OF STOCK AWARDS OTHER THAN OPTIONS AND SARS.  (a) Restricted Stock Awards.  Each Restricted Stock Award Agreement will be in such form and  will contain such terms and conditions as the Board deems appropriate.  To the extent consistent with the  Company’s bylaws, at the Board’s election, shares of Common Stock may be (i) held in book entry form subject  to the Company’s instructions until any restrictions relating to the Restricted Stock Award lapse; or  (ii) evidenced by a certificate, which certificate will be held in such form and manner as determined by the  Board.  The terms and conditions of Restricted Stock Award Agreements may change from time to time, and  the terms and conditions of separate Restricted Stock Award Agreements need not be identical.  Each Restricted  Stock Award Agreement will conform to (through incorporation of the provisions hereof by reference in the  agreement or otherwise) the substance of each of the following provisions:  (i) Consideration.  A Restricted Stock Award may be awarded in consideration for (A)  cash, check, bank draft or money order payable to the Company, (B) past services to the Company or an Affiliate,  or (C) any other form of legal consideration (including future services) that may be acceptable to the Board, in  its sole discretion, and permissible under applicable law.  (ii) Vesting.  Shares of Common Stock awarded under the Restricted Stock Award  Agreement may be subject to forfeiture to the Company in accordance with a vesting schedule to be determined  by the Board.  (iii) Termination of Participant’s Continuous Service.  If a Participant’s Continuous  Service terminates, the Company may receive through a forfeiture condition or a repurchase right any or all of  the shares of Common Stock held by the Participant that have not vested as of the date of termination of  Continuous Service under the terms of the Restricted Stock Award Agreement.  (iv) Dividends.  A Restricted Stock Award Agreement may provide that any dividends  paid on Restricted Stock will be subject to the same vesting and forfeiture restrictions as apply to the shares  subject to the Restricted Stock Award to which they relate.  

 

  (b) Restricted Stock Unit Awards.  Each Restricted Stock Unit Award Agreement will be in such  form and will contain such terms and conditions as the Board deems appropriate.  The terms and conditions of  Restricted Stock Unit Award Agreements may change from time to time, and the terms and conditions of  separate Restricted Stock Unit Award Agreements need not be identical.  Each Restricted Stock Unit Award  Agreement will conform to (through incorporation of the provisions hereof by reference in the Agreement or  otherwise) the substance of each of the following provisions:  (i) Consideration.  At the time of grant of a Restricted Stock Unit Award, the Board will  determine the consideration, if any, to be paid by the Participant upon delivery of each share of Common Stock  subject to the Restricted Stock Unit Award. The consideration to be paid (if any) by the Participant for each  share of Common Stock subject to a Restricted Stock Unit Award may be paid in any form of legal consideration  that may be acceptable to the Board, in its sole discretion, and permissible under applicable law.  (ii) Vesting.  At the time of the grant of a Restricted Stock Unit Award, the Board may  impose such restrictions on or conditions to the vesting of the Restricted Stock Unit Award as it, in its sole  discretion, deems appropriate.  (iii) Settlement.  A Restricted Stock Unit Award may be settled by the delivery of shares  of Common Stock, their cash equivalent, any combination thereof or in any other form of consideration, as  determined by the Board and contained in the Restricted Stock Unit Award Agreement.  (iv) Additional Restrictions.  At the time of the grant of a Restricted Stock Unit Award,  the Board, as it deems appropriate, may impose such restrictions or conditions that delay the delivery of the  shares of Common Stock (or their cash equivalent) subject to a Restricted Stock Unit Award to a time after the  vesting of such Restricted Stock Unit Award.  (v) Dividend Equivalents.  Dividend equivalents may be credited in respect of shares of  Common Stock covered by a Restricted Stock Unit Award, as determined by the Board and contained in the  Restricted Stock Unit Award Agreement.  At the sole discretion of the Board, such dividend equivalents may be  converted into additional shares of Common Stock covered by the Restricted Stock Unit Award in such manner  as determined by the Board.  Any additional shares covered by the Restricted Stock Unit Award credited by  reason of such dividend equivalents will be subject to all of the same terms and conditions of the underlying  Restricted Stock Unit Award Agreement to which they relate.  (vi) Termination of Participant’s Continuous Service.  Except as otherwise provided  in the applicable Restricted Stock Unit Award Agreement, such portion of the Restricted Stock Unit Award that  has not vested will be forfeited upon the Participant’s termination of Continuous Service.  (vii) Unsecured Obligation.  A Restricted Stock Unit Award is an unfunded obligation, and  as a holder of a vested Restricted Stock Unit Award, a Participant shall be considered an unsecured creditor of  the Company with respect to the Company's obligation, if any, to issue shares pursuant to the terms of the  applicable Award Agreement.  A Participant shall not have voting or any other rights as a stockholder of the  Company with respect to the shares to be issued pursuant a Restricted Stock Unit Award unless and until such  shares are actually issued.  Nothing contained in the Plan or any Restricted Stock Unit Award Agreement, and  no action taken pursuant to its provisions, shall create or be construed to create a trust of any kind or a fiduciary  relationship between a Participant and the Company or any other person.  (c) Performance Awards.  (i) Performance Stock Awards.  A Performance Stock Award is a Stock Award that is  payable (including that may be granted, may vest or may be exercised) contingent upon the attainment during  a Performance Period of certain Performance Goals.  A Performance Stock Award may, but need not, require  the completion of a specified period of Continuous Service.  The length of any Performance Period, the  Performance Goals to be achieved during the Performance Period, and the measure of whether and to what  degree such Performance Goals have been attained will be conclusively determined by the Board or Committee,  

 

  in its sole discretion.  In addition, to the extent permitted by applicable law and the applicable Award  Agreement, the Board may determine that cash may be used in payment of Performance Stock Awards.   (ii) Performance Cash Awards.  A Performance Cash Award is a cash award that is  payable contingent upon the attainment during a Performance Period of certain Performance Goals.  A  Performance Cash Award may, but need not, require the completion of a specified period of Continuous Service.   At the time of grant of a Performance Cash Award, the length of any Performance Period, the Performance Goals  to be achieved during the Performance Period, and the measure of whether and to what degree such  Performance Goals have been attained will be conclusively determined by the Board or Committee, in its sole  discretion.  The Committee may specify the form of payment of Performance Cash Awards, which may be cash  or other property, or may provide for a Participant to have the option for his or her Performance Cash Award,  or such portion thereof as the Board may specify, to be paid in whole or in part in cash or other property.   (iii) Board Discretion.  The Board retains the discretion to reduce or eliminate the  compensation or economic benefit due upon attainment of Performance Goals and to define the manner of  calculating the Performance Criteria it selects to use for a Performance Period.    (d) Other Stock Awards.  Other forms of Stock Awards valued in whole or in part by reference  to, or otherwise based on, Common Stock, including the appreciation in value thereof (e.g., options or stock  rights with an exercise price or strike price less than 100% of the Fair Market Value of the Common Stock at  the time of grant) may be granted either alone or in addition to Stock Awards provided for under Section 5 and  the preceding provisions of this Section 6.  Subject to the provisions of the Plan, the Board will have sole and  complete authority to determine the persons to whom and the time or times at which such Other Stock Awards  will be granted, the number of shares of Common Stock (or the cash equivalent thereof) to be granted pursuant  to such Other Stock Awards and all other terms and conditions of such Other Stock Awards.  7. COVENANTS OF THE COMPANY.  (a) Securities Law Compliance.  The Company will seek to obtain from each regulatory  commission or agency having jurisdiction over the Plan such authority as may be required to grant Stock  Awards and to issue and sell shares of Common Stock upon exercise or vesting of the Stock Awards; provided,  however, that this undertaking will not require the Company to register under the Securities Act or other  securities or applicable laws, the Plan, any Stock Award or any Common Stock issued or issuable pursuant to  any such Stock Award.  If, after reasonable efforts and at a reasonable cost, the Company is unable to obtain  from any such regulatory commission or agency the authority that counsel for the Company deems necessary  or advisable for the lawful issuance and sale of Common Stock under the Plan, the Company will be relieved  from any liability for failure to issue and sell Common Stock upon exercise or vesting of such Stock Awards  unless and until such authority is obtained. A Participant will not be eligible for the grant of a Stock Award or  the subsequent issuance of Common Stock pursuant to the Stock Award if such grant or issuance would be in  violation of any applicable securities law.  (b) No Obligation to Notify or Minimize Taxes; No Liability for Taxes.  The Company will have  no duty or obligation to any Participant to advise such holder as to the time or manner of exercising such Stock  Award.  Furthermore, the Company will have no duty or obligation to warn or otherwise advise such holder of  a pending termination or expiration of an Award or a possible period in which the Award may not be exercised.   The Company has no duty or obligation to minimize the tax consequences of an Award to the holder of such  Award and will not be liable to any holder of a Stock Award for any adverse tax consequences to such holder in  connection with a Stock Award.  As a condition to accepting a Stock Award under the Plan, each Participant (i)  agrees to not make any claim against the Company, or any of its Officers, Directors, Employees or Affiliates  related to tax liabilities arising from such Stock Award or other Company compensation and (ii) acknowledges  that such Participant was advised to consult with his or her own personal tax, financial and other legal advisors  regarding the tax consequences of the Stock Award and has either done so or knowingly and voluntarily  declined to do so. Additionally, each Participant acknowledges any Option or SAR granted under the Plan is  exempt from Section 409A of the Code only if the exercise or strike price per share is at least equal to the “fair  market value” per share of the Common Stock on the date of grant as determined by the Internal Revenue  

 

  Service and there is no other impermissible deferral of compensation associated with the Award.  Additionally,  as a condition to accepting an Option or SAR granted under the Plan, each Participant agrees not make any  claim against the Company, or any of its Officers, Directors, Employees or Affiliates in the event that the Internal  Revenue Service asserts that such exercise price or strike price is less than the “fair market value” of the  Common Stock on the date of grant as subsequently determined by the Internal Revenue Service.  8. TAX WITHHOLDING  (a) Withholding Authorization.  As a condition to acceptance of any Award under the Plan, a  Participant authorizes withholding from payroll and any other amounts payable to such Participant, and  otherwise agree to make adequate provision for (including), any sums required to satisfy the federal, state,  local and foreign tax withholding obligations of the Company or an Affiliate, if any, which arise in connection  with the exercise, vesting or settlement of such Award, as applicable.  Accordingly, a Participant may not be  able to exercise an Award even though the Award is vested, and the Company shall have no obligation to issue  shares of Common Stock subject to an Award, unless and until such obligations are satisfied.  (b) Satisfaction of Withholding Obligation.  Unless prohibited by the terms of an Award  Agreement, the Company may, in its sole discretion, satisfy any federal, state or local tax withholding obligation  relating to an Award by any of the following means or by a combination of such means: (i) causing the  Participant to tender a cash payment; (ii) withholding shares of Common Stock from the shares of Common  Stock issued or otherwise issuable to the Participant in connection with the Award; provided, however, that (A)  no shares of Common Stock are withheld with a Fair Market Value exceeding the maximum amount of tax that  may be required to be withheld by law (or such other amount as may be permitted while still avoiding  classification of the Stock Award as a liability for financial accounting purposes), and (B) with respect to an  Award held by any Participant who is subject to the filing requirements of Section 16 of the Exchange Act, any  such share withholding must be specifically approved by the Compensation Committee as the applicable  method that must be used to satisfy the tax withholding obligation or such share withholding procedure must  otherwise satisfy the requirements for an exempt transaction under Section 16(b) of the Exchange Act; (iii)  withholding cash from an Award settled in cash; (iv) withholding payment from any amounts otherwise  payable to the Participant; (v) by means of a “cashless exercise” pursuant to a program developed under  Regulation T as promulgated by the Federal Reserve Board, or (vi) by such other method as may be set forth in  the Award Agreement; provided, however, that    (c) Withholding Indemnification.  As a condition to accepting an Award under the Plan, in the  event that the amount of the Company’s withholding obligation in connection with such Award was greater  than the amount actually withheld by the Company, each Participant agrees to indemnify and hold the Company  harmless from any failure by the Company to withhold the proper amount.  9. MISCELLANEOUS.  (a) Use of Proceeds from Sales of Common Stock.  Proceeds from the sale of shares of Common  Stock pursuant to Stock Awards will constitute general funds of the Company.  (b) Corporate Action Constituting Grant of Awards.  Corporate action constituting a grant by  the Company of an Award to any Participant will be deemed completed as of the date of such corporate action,  unless otherwise determined by the Board, regardless of when the instrument, certificate, or letter evidencing  the Award is communicated to, or actually received or accepted by, the Participant.  In the event that the  corporate records (e.g., Board consents, resolutions or minutes) documenting the corporate action approving  the grant contain terms (e.g., exercise price, vesting schedule or number of shares) that are inconsistent with  those in the Award Agreement or related grant documents as a result of a clerical error in the papering of the  Award Agreement or related grant documents, the corporate records will control and the Participant will have  no legally binding right to the incorrect term in the Award Agreement or related grant documents.    (c) Stockholder Rights.  No Participant will be deemed to be the holder of, or to have any of the  rights of a holder with respect to, any shares of Common Stock subject to an Award unless and until (i) such  

 

  Participant has satisfied all requirements for exercise of, or the issuance of shares of Common Stock under, the  Award pursuant to its terms, and (ii) the issuance of the Common Stock subject to such Award has been entered  into the books and records of the Company.  (d) No Employment or Other Service Rights.  Nothing in the Plan, any Award Agreement or any  other instrument executed thereunder or in connection with any Award granted pursuant thereto will confer  upon any Participant any right to continue to serve the Company or an Affiliate in the capacity in effect at the  time the Award was granted or will affect the right of the Company or an Affiliate to terminate (i) the  employment of an Employee with or without notice and with or without cause, (ii) the service of a Consultant  pursuant to the terms of such Consultant’s agreement with the Company or an Affiliate, or (iii) the service of a  Director pursuant to the bylaws of the Company or an Affiliate, and any applicable provisions of the corporate  law of the state or foreign jurisdiction in which the Company or the Affiliate is incorporated, as the case may  be.  Furthermore, to the extent the Company is not the employer of a Participant, the grant of an Award will be  not establish an employment or other service relationship between the Company and the Participant.  Further,  nothing in the Plan, any Award Agreement or any other instrument executed thereunder or in connection with  any Award will constitute any promise or commitment by the Company or an Affiliate regarding the fact or  nature of future positions, future work assignments, future compensation or any other term or condition of  employment or service or confer any right or benefit under the Award or the Plan unless such right or benefit  has specifically accrued under the terms of the Award Agreement and/or Plan.  (e) Change in Time Commitment.  In the event a Participant’s regular level of time commitment  in the performance of his or her services for the Company and any Affiliates is reduced (for example, and  without limitation, if the Participant is an Employee of the Company and the Employee has a change in status  from a full-time Employee to a part-time Employee  or takes an extended leave of absence) after the date of  grant of any Award to the Participant, the Board has the right in its sole discretion to (x) make a corresponding  reduction in the number of shares or cash amount subject to any portion of such Award that is scheduled to  vest or become payable after the date of such change in time commitment, and (y) in lieu of or in combination  with such a reduction, extend the vesting or payment schedule applicable to such Award. In the event of any  such reduction, the Participant will have no right with respect to any portion of the Award that is so reduced  or extended.  (f) Incentive Stock Option $100,000 Limitation.  To the extent that the aggregate Fair Market  Value (determined at the time of grant) of Common Stock with respect to which Incentive Stock Options are  exercisable for the first time by any Optionholder during any calendar year (under all plans of the Company  and any Affiliates) exceeds $100,000 (or such other limit established in the Code) or otherwise does not comply  with the rules governing Incentive Stock Options, the Options or portions thereof that exceed such limit  (according to the order in which they were granted) or otherwise do not comply with such rules will be treated  as Nonstatutory Stock Options, notwithstanding any contrary provision of the applicable Option Agreement(s).  (g) Execution of Additional Documents.  As a condition to accepting an Award under the Plan,  the Participant agrees to execute any additional documents or instruments necessary or desirable, as  determined in the Company’s sole discretion, to carry out the purposes or intent of the Award, or facilitate  compliance with securities and/or other regulatory requirements, in each case at the Company’s request.  (h) Electronic Delivery and Participation.  Any reference herein or in an Award Agreement to  a “written” agreement or document will include any agreement or document delivered electronically, filed  publicly at www.sec.gov (or any successor website thereto) or posted on the Company’s intranet (or other  shared electronic medium controlled by the Company to which the Participant has access).  By accepting any  Award the Participant consents to receive documents by electronic delivery and, if requested by the Company,  to participate in the Plan through an on-line electronic system established and maintained by the Plan  Administrator or another third party selected by the Plan Administrator.  The form of delivery of any Common  Stock (e.g., a stock certificate or electronic entry evidencing such shares) shall be determined by the Company.  (i) Deferrals.  To the extent permitted by applicable law, the Board, in its sole discretion, may  determine that the delivery of Common Stock or the payment of cash, upon the exercise, vesting or settlement  

 

  of all or a portion of any Award may be deferred and may establish programs and procedures for deferral  elections to be made by Participants.  Deferrals by Participants will be made in accordance with Section 409A  of the Code.   (j) Transfer or Assignment of Awards; Issued Shares.  Except as expressly provided in the  Plan or the form of Award Agreement, Awards granted under the Plan may not be transferred or assigned by  the Participant.  After the vested shares subject to an Award have been issued, or in the case of Restricted Stock  and similar awards, after the issued shares have vested, the holder of such shares is free to assign, hypothecate,  donate, encumber or otherwise dispose of any interest in such shares provided that any such actions are in  compliance with the provisions herein, the terms of the Trading Policy and applicable securities laws.   (k) Clawback/Recovery.  All Awards granted under the Plan will be subject to recoupment in  accordance with any clawback policy that the Company is required to adopt pursuant to the listing standards  of any national securities exchange or association on which the Company’s securities are listed or as is  otherwise required by the Dodd-Frank Wall Street Reform and Consumer Protection Act or other applicable  law. In addition, the Board may impose such other clawback, recovery or recoupment provisions in an Award  Agreement as the Board determines necessary or appropriate, including but not limited to a reacquisition right  in respect of previously acquired shares of Common Stock or other cash or property upon the occurrence of  Cause. No recovery of compensation under such a clawback policy will be an event giving rise to a right to  voluntary terminate employment upon a “resignation for good reason,” or for a “constructive termination” or  any similar term under any plan of or agreement with the Company.  (l) Securities Compliance.  A Participant will not be issued any shares in respect of an Award  unless either (i) the shares are registered under the Securities Act; or (ii) the Company has determined that  such issuance would be exempt from the registration requirements of the Securities Act.  Each Award also must  comply with other applicable laws and regulations governing the Award, and a Participant will not receive such  shares if the Company determines that such receipt would not be in material compliance with such laws and  regulations.  (m) Compliance with Section 409A of the Code.  Unless otherwise expressly provided for in an  Award Agreement, the Plan and Award Agreements will be interpreted to the greatest extent possible in a  manner that makes the Plan and the Awards granted hereunder exempt from Section 409A of the Code, and, to  the extent not so exempt, in compliance with Section 409A of the Code. If the Board determines that any Award  granted hereunder is not exempt from and is therefore subject to Section 409A of the Code, the Award  Agreement evidencing such Award will incorporate the terms and conditions necessary to avoid the  consequences specified in Section 409A(a)(1) of the Code, and to the extent an Award Agreement is silent on  terms necessary for compliance, such terms are hereby incorporated by reference into the Award Agreement.  Notwithstanding anything to the contrary in this Plan (and unless the Award Agreement specifically provides  otherwise), if the shares of Common Stock are publicly traded, and if a Participant holding an Award that  constitutes “deferred compensation” under Section 409A of the Code is a “specified employee” for purposes of  Section 409A of the Code, no distribution or payment of any amount that is due because of a “separation from  service” (as defined in Section 409A of the Code without regard to alternative definitions thereunder) will be  issued or paid before the date that is six months following the date of such Participant’s “separation from  service” or, if earlier, the date of the Participant’s death, unless such distribution or payment can be made in a  manner that complies with Section 409A of the Code, and any amounts so deferred will be paid in a lump sum  on the day after such six month period elapses, with the balance paid thereafter on the original schedule.  10. ADJUSTMENTS UPON CHANGES IN COMMON STOCK; OTHER CORPORATE EVENTS.  (a) Capitalization Adjustments.  In the event of a Capitalization Adjustment, the Board will  appropriately and proportionately adjust: (i) the class(es) and maximum number of securities subject to the  Plan pursuant to Section 3(a), (ii) the class(es) and maximum number of securities by which the share reserve  is to increase automatically each year pursuant to Section 3(a), (iii) the class(es) and maximum number of  securities that may be issued pursuant to the exercise of Incentive Stock Options pursuant to Section 3(d), and  (iv) the class(es) and number of securities and price per share of stock subject to outstanding Stock Awards.   

 

  The Board will make such adjustments, and its determination will be final, binding and conclusive.   Notwithstanding the provisions of this Section 10(a), no fractional shares or rights for fractional shares of  Common Stock shall be created pursuant to this Section 10(a).  The Board shall, in its discretion, determine an  equivalent benefit for any fractional shares or fractional shares that might be created by the adjustments  referred to in this Section 10(a).  (b) Dissolution or Liquidation.  Except as otherwise provided in the Stock Award Agreement, in  the event of a dissolution or liquidation of the Company, all outstanding Stock Awards (other than Stock Awards  consisting of vested and outstanding shares of Common Stock not subject to a forfeiture condition or the  Company’s right of repurchase) will terminate immediately prior to the completion of such dissolution or  liquidation, and the shares of Common Stock subject to the Company’s repurchase rights or subject to a  forfeiture condition may be repurchased or reacquired by the Company notwithstanding the fact that the  holder of such Stock Award is providing Continuous Service; provided, however, that the Board may, in its sole  discretion, cause some or all Stock Awards to become fully vested, exercisable and/or no longer subject to  repurchase or forfeiture (to the extent such Stock Awards have not previously expired or terminated) before  the dissolution or liquidation is completed but contingent on its completion.  (c) Corporate Transaction.  The following provisions will apply to Stock Awards in the event of  a Corporate Transaction unless otherwise provided in the Stock Award Agreement or any other written  agreement between the Company or any Affiliate and the Participant or unless otherwise expressly provided  by the Board at the time of grant of a Stock Award.  In the event of a Corporate Transaction, then,  notwithstanding any other provision of the Plan, the Board will take one or more of the following actions with  respect to Stock Awards, contingent upon the closing or completion of the Corporate Transaction:  (i) arrange for the surviving corporation or acquiring corporation (or the surviving or  acquiring corporation’s parent company) to assume or continue the Stock Award or to substitute a similar stock  award for the Stock Award (including, but not limited to, an award to acquire the same consideration paid to  the stockholders of the Company pursuant to the Corporate Transaction);  (ii) arrange for the assignment of any reacquisition or repurchase rights held by the  Company in respect of Common Stock issued pursuant to the Stock Award to the surviving corporation or  acquiring corporation (or the surviving or acquiring corporation’s parent company);  (iii) accelerate the vesting, in whole or in part, of the Stock Award (and, if applicable, the  time at which the Stock Award may be exercised) to a date prior to the effective time of such Corporate  Transaction as the Board determines (or, if the Board does not determine such a date, to the date that is five  days prior to the effective date of the Corporate Transaction), which exercise is contingent upon the  effectiveness of such Corporate Transaction with such Stock Award terminating if not exercised (if applicable)  at or prior to the effective time of the Corporate Transaction in accordance with the exercise procedures  determined by the Board;  (iv) arrange for the lapse, in whole or in part, of any reacquisition or repurchase rights  held by the Company with respect to the Stock Award; and  (v) cancel or arrange for the cancellation of the Stock Award, to the extent not vested or  not exercised prior to the effective time of the Corporate Transaction, in exchange for a payment, if any, in such  form as may be determined by the Board, equal to the excess, if any, of (A), the per share amount (or value of  property per share) payable to holders of Common Stock in connection with the Corporate Transaction, over  (B) the per share exercise price under the applicable Award, multiplied by the number of shares subject to the  Stock Award.  Such payment may be subject to vesting based  on the Participant’s Continuous Service, provided  that the vesting schedule shall be no less favorable to the Participant than the schedule under which the Stock  Award would have become vested and/or exercisable.  In addition, any escrow, holdback, earnout or similar  provisions in the definitive agreement for the Corporate Transaction may apply to such payment to the holder  of the Stock Award to the same extent and in the same manner as such provisions apply to the holders of  Common Stock.  For clarity, this payment may be $0 if the amount per share (or value of property per share)  

 

  payable to the holders of the Common Stock is equal to or less than the per share exercise price of the Stock  Award.  The Board need not take the same action or actions with respect to all Stock Awards or portions thereof or with  respect to all Participants.  The Board may take different actions with respect to the vested and unvested  portions of a Stock Award.    (d) Change in Control.  A Stock Award may be subject to additional acceleration of vesting and  exercisability upon or after a Change in Control as may be provided in the Stock Award Agreement for such  Stock Award or as may be provided in any other written agreement between the Company or any Affiliate and  the Participant, but in the absence of such provision, no such acceleration will occur.  11. SEVERABILITY.  If all or any part of the Plan or any Award Agreement is declared by any court or  governmental authority to be unlawful or invalid, such unlawfulness or invalidity shall not invalidate any  portion of the Plan or such Award Agreement not declared to be unlawful or invalid. Any Section of the Plan or  any Award Agreement (or part of such a Section) so declared to be unlawful or invalid shall, if possible, be  construed in a manner which will give effect to the terms of such Section or part of a Section to the fullest extent  possible while remaining lawful and valid.  12. TERMINATION OR SUSPENSION OF THE PLAN.  The Board may suspend or terminate the Plan at any time.   No Incentive Stock Option will be granted after the tenth anniversary of the earlier of (i) the Adoption Date, or  (ii) the date the Plan is approved by the stockholders of the Company.  No Awards may be granted under the  Plan while the Plan is suspended or after it is terminated.  Suspension or termination of the Plan will not impair  rights and obligations under any Award granted while the Plan is in effect except with the written consent of  the affected Participant or as otherwise permitted in the Plan.  13. EFFECTIVE DATE OF THE PLAN.  The Plan will come into existence on the Adoption Date; provided, however, no Award may be  granted prior to the IPO Date (that is, the Effective Date).  In addition, no Stock Award will be exercised (or, in  the case of a Restricted Stock Award, Restricted Stock Unit Award, Performance Stock Award, or Other Stock  Award, will be granted) and no Performance Cash Award will be settled unless and until the Plan has been  approved by the stockholders of the Company, which approval will be within 12 months after the Adoption  Date.  14. CHOICE OF LAW.  The laws of the State of Delaware will govern all questions concerning the construction, validity and  interpretation of this Plan, without regard to that state’s conflict of laws rules.  15. DEFINITIONS.  As used in the Plan, the following definitions will apply to the capitalized terms indicated  below:  (a) “Adoption Date” means the date the Plan is adopted by the Board.  (b) “Affiliate” means, at the time of determination, any “parent” or “subsidiary” of the Company  as such terms are defined in Rule 405.  The Board will have the authority to determine the time or times at  which “parent” or “subsidiary” status is determined within the foregoing definition.  (c) “Award” means a Stock Award or a Performance Cash Award.  (d) “Award Agreement” means a written agreement between the Company and a Participant  evidencing the terms and conditions of an Award.  

 

  (e) “Board” means the Board of Directors of the Company.  (f) “Capitalization Adjustment” means any change that is made in, or other events that occur  with respect to, the Common Stock subject to the Plan or subject to any Stock Award after the Effective Date  without the receipt of consideration by the Company through merger, consolidation, reorganization,  recapitalization, reincorporation, stock dividend, dividend in property other than cash, large nonrecurring cash  dividend, stock split, reverse stock split, liquidating dividend, combination of shares, exchange of shares,  change in corporate structure or any similar equity restructuring transaction, as that term is used in Statement  of Financial Accounting Standards Board Accounting Standards Codification Topic 718 (or any successor  thereto).  Notwithstanding the foregoing, the conversion of any convertible securities of the Company will not  be treated as a Capitalization Adjustment.  (g) “Cause” will have the meaning ascribed to such term in any written agreement between the  Participant and the Company defining such term and, in the absence of such agreement, such term means, with  respect to a Participant, the occurrence of any of the following events: (i) such Participant’s commission,  indictment or conviction of, or plea of no contest with respect to, any felony or crime involving dishonesty or  moral turpitude; (ii) such Participant’s failure to satisfactorily perform his or her job duties as assigned by the  Board or the officers of the Company, inability to meet documented performance goals, willful neglect of his or  her duties, or refusal or failure to follow the lawful and reasonable directions of the Board or the officers of the  Company, provided that the Company first provides the Participant with written notice of such conduct and 30  days to cure the conduct (if curable), and the Participant has failed to cure such conduct within such 30 day  period; (iii) such Participant’s disloyalty, gross negligence, willful misconduct, dishonesty, fraud or breach of  fiduciary duty to the Company; (iv) such Participant’s violation of any rule or policy of the Company, or breach  of an employment, consulting or other agreement with the Company, which could reasonably result in direct  or indirect loss, damage or injury to the Company; (v) such Participant’s disclosure of any trade secret or  confidential information of the Company; (vi) such Participant’s commission of an act which could at the  discretion of the Company be reasonably deemed to constitute unfair competition with the Company or induce  any customer or supplier to breach a contract with the Company; or (vii) such Participant’s intentional acts on  the part of the Participant that have generated material adverse publicity toward or about the Company. Any  determination by the Company that the Continuous Service of a Participant was terminated with or without  Cause for the purposes of outstanding Awards held by such Participant will have no effect upon any  determination of the rights or obligations of the Company or such Participant for any other purpose.   (h) “Change in Control” means the occurrence, in a single transaction or in a series of related  transactions, of any one or more of the following events:  (i) any Exchange Act Person becomes the Owner, directly or indirectly, of securities of  the Company representing more than 50% of the combined voting power of the Company’s then outstanding  securities other than by virtue of a merger, consolidation or similar transaction.  Notwithstanding the  foregoing, a Change in Control will not be deemed to occur (A) on account of the acquisition of securities of the  Company directly from the Company, (B) on account of the acquisition of securities of the Company by an  investor, any affiliate thereof or any other Exchange Act Person that acquires the Company’s securities in a  transaction or series of related transactions the primary purpose of which is to obtain financing for the  Company through the issuance of equity securities, (C) on account of the acquisition of securities of the  Company by any individual who is, on the IPO Date, either an executive officer or a Director (either, an “IPO  Investor”) and/or any entity in which an IPO Investor has a direct or indirect interest (whether in the form of  voting rights or participation in profits or capital contributions) of more than 50% (collectively, the “IPO  Entities”) or on account of the IPO Entities continuing to hold shares that come to represent more than 50% of  the combined voting power of the Company’s then outstanding securities as a result of the conversion of any  class of the Company’s securities into another class of the Company’s securities having a different number of  votes per share pursuant to the conversion provisions set forth in the Company’s Amended and Restated  Certificate of Incorporation; or (D) solely because the level of Ownership held by any Exchange Act Person (the  “Subject Person”) exceeds the designated percentage threshold of the outstanding voting securities as a result  of a repurchase or other acquisition of voting securities by the Company reducing the number of shares  outstanding, provided that if a Change in Control would occur (but for the operation of this sentence) as a result  

 

  of the acquisition of voting securities by the Company, and after such share acquisition, the Subject Person  becomes the Owner of any additional voting securities that, assuming the repurchase or other acquisition had  not occurred, increases the percentage of the then outstanding voting securities Owned by the Subject Person  over the designated percentage threshold, then a Change in Control will be deemed to occur;  (ii) there is consummated a merger, consolidation or similar transaction involving  (directly or indirectly) the Company and, immediately after the consummation of such merger, consolidation  or similar transaction, the stockholders of the Company immediately prior thereto do not Own, directly or  indirectly, either (A) outstanding voting securities representing more than 50% of the combined outstanding  voting power of the surviving Entity in such merger, consolidation or similar transaction or (B) more than 50%  of the combined outstanding voting power of the parent of the surviving Entity in such merger, consolidation  or similar transaction, in each case in substantially the same proportions as their Ownership of the outstanding  voting securities of the Company immediately prior to such transaction; provided, however, that a merger,  consolidation or similar transaction will not constitute a Change in Control under this prong of the definition if  the outstanding voting securities representing more than 50% of the combined voting power of the surviving  Entity or its parent are owned by the IPO Entities;  (iii) there is consummated a sale, lease, exclusive license or other disposition of all or  substantially all of the consolidated assets of the Company and its Subsidiaries, other than a sale, lease, license  or other disposition of all or substantially all of the consolidated assets of the Company and its Subsidiaries to  an Entity, more than 50% of the combined voting power of the voting securities of which are Owned by  stockholders of the Company in substantially the same proportions as their Ownership of the outstanding  voting securities of the Company immediately prior to such sale, lease, license or other disposition; provided,  however, that a sale, lease, exclusive license or other disposition of all or substantially all of the consolidated  assets of the Company and its Subsidiaries will not constitute a Change in Control under this prong of the  definition if the outstanding voting securities representing more than 50% of the combined voting power of  the acquiring Entity or its parent are owned by the IPO Entities; or  (iv) individuals who, on the date the Plan is adopted by the Board, are members of the  Board (the “Incumbent Board”) cease for any reason to constitute at least a majority of the members of the  Board; provided, however, that if the appointment or election (or nomination for election) of any new Board  member was approved or recommended by a majority vote of the members of the Incumbent Board then still  in office, such new member will, for purposes of this Plan, be considered as a member of the Incumbent Board.  Notwithstanding the foregoing or any other provision of this Plan, (A) the term Change in Control  will not include a sale of assets, merger or other transaction effected exclusively for the purpose of changing  the domicile of the Company, and (B) the definition of Change in Control (or any analogous term) in an  individual written agreement between the Company or any Affiliate and the Participant will supersede the  foregoing definition with respect to Awards subject to such agreement; provided, however, that if no definition  of Change in Control or any analogous term is set forth in such an individual written agreement, the foregoing  definition will apply. To the extent required for compliance with Section 409A of the Code, in no event will a  Change in Control be deemed to have occurred if such transaction is not also a “change in the ownership or  effective control of” the Company or “a change in the ownership of a substantial portion of the assets of” the  Company as determined under Treasury Regulations Section 1.409A-3(i)(5) (without regard to any  alternative definition thereunder).  The Board may, in its sole discretion and without a Participant’s consent,  amend the definition of “Change in Control” to conform to the definition of “Change in Control” under Section  409A of the Code, and the regulations thereunder.   (i) “Code” means the Internal Revenue Code of 1986, as amended, including any applicable  regulations and guidance thereunder.  (j)  “Committee” means a committee of one or more Directors to whom authority has been  delegated by the Board in accordance with Section 2(c).  

 

  (k) “Common Stock” means, as of the IPO Date, the common stock of the Company, having one  vote per share.  (l) “Company” means SI-BONE, Inc., a Delaware corporation.  (m) “Consultant” means any person, including an advisor, who is (i) engaged by the Company or  an Affiliate to render consulting or advisory services and is compensated for such services, or (ii) serving as a  member of the board of directors of an Affiliate and is compensated for such services.  However, service solely  as a Director, or payment of a fee for such service, will not cause a Director to be considered a “Consultant” for  purposes of the Plan. Notwithstanding the foregoing, a person is treated as a Consultant under this Plan only if  a Form S-8 Registration Statement under the Securities Act is available to register either the offer or the sale of  the Company’s securities to such person.  (n) “Continuous Service” means that the Participant’s service with the Company or an Affiliate,  whether as an Employee, Director or Consultant, is not interrupted or terminated.  A change in the capacity in  which the Participant renders service to the Company or an Affiliate as an Employee, Director or Consultant or  a change in the Entity for which the Participant renders such service, provided that there is no interruption or  termination of the Participant’s service with the Company or an Affiliate, will not terminate a Participant’s  Continuous Service; provided, however, that if the Entity for which a Participant is rendering services ceases to  qualify as an Affiliate, as determined by the Board, in its sole discretion, such Participant’s Continuous Service  will be considered to have terminated on the date such Entity ceases to qualify as an Affiliate.  For example, a  change in status from an Employee of the Company to a Consultant of an Affiliate or to a Director will not  constitute an interruption of Continuous Service.  To the extent permitted by law, the Board or the chief  executive officer of the Company, in that party’s sole discretion, may determine whether Continuous Service  will be considered interrupted in the case of (i) any leave of absence approved by the Board or chief executive  officer, including sick leave, military leave or any other personal leave, or (ii) transfers between the Company,  an Affiliate, or their successors.  Notwithstanding the foregoing, a leave of absence will be treated as Continuous  Service for purposes of vesting in an Award only to such extent as may be provided in the Company’s leave of  absence policy, in the written terms of any leave of absence agreement or policy applicable to the Participant,  or as otherwise required by law.  In addition, to the extent required for exemption from or compliance with  Section 409A of the Code, the determination of whether there has been a termination of Continuous Service  will be made, and such term will be construed, in a manner that is consistent with the definition of “separation  from service” as defined under Treasury Regulation Section 1.409A-1(h) (without regard to any alternative  definition thereunder).  (o) “Corporate Transaction” means the consummation, in a single transaction or in a series of  related transactions, of any one or more of the following events:  (i) a sale or other disposition of all or substantially all, as determined by the Board, in its  sole discretion, of the consolidated assets of the Company and its Subsidiaries;  (ii) a sale or other disposition of more than 50% of the outstanding securities of the  Company;  (iii) a merger, consolidation or similar transaction following which the Company is not  the surviving corporation; or  (iv) a merger, consolidation or similar transaction following which the Company is the  surviving corporation but the shares of Common Stock outstanding immediately preceding the merger,  consolidation or similar transaction are converted or exchanged by virtue of the merger, consolidation or  similar transaction into other property, whether in the form of securities, cash or otherwise.  If required for compliance with Section 409A of the Code, in no event will a Corporate Transaction be deemed  to have occurred if such transaction is not also a “change in the ownership or effective control of” the Company  

 

  or “a change in the ownership of a substantial portion of the assets of” the Company as determined under  Treasury Regulation Section 1.409A-3(i)(5) (without regard to any alternative definition thereunder).  (p) “Director” means a member of the Board.  (q) “Disability” means, with respect to a Participant, the inability of such Participant to engage in  any substantial gainful activity by reason of any medically determinable physical or mental impairment that  can be expected to result in death or that has lasted or can be expected to last for a continuous period of not  less than 12 months, as provided in Sections 22(e)(3) and 409A(a)(2)(c)(i) of the Code, and will be determined  by the Board on the basis of such medical evidence as the Board deems warranted under the circumstances.  (r)  “Effective Date” means the effective date of this Plan, which is the IPO Date.  (s) “Employee” means any person employed by the Company or an Affiliate.  However, service  solely as a Director, or payment of a fee for such services, will not cause a Director to be considered an  “Employee” for purposes of the Plan.  (t) “Entity” means a corporation, partnership, limited liability company or other entity.  (u) “Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and  regulations promulgated thereunder.  (v) “Exchange Act Person” means any natural person, Entity or “group” (within the meaning of  Section 13(d) or 14(d) of the Exchange Act), except that “Exchange Act Person” will not include (i) the Company  or any Subsidiary of the Company, (ii) any employee benefit plan of the Company or any Subsidiary of the  Company or any trustee or other fiduciary holding securities under an employee benefit plan of the Company  or any Subsidiary of the Company, (iii) an underwriter temporarily holding securities pursuant to a registered  public offering of such securities, (iv) an Entity Owned, directly or indirectly, by the stockholders of the  Company in substantially the same proportions as their Ownership of stock of the Company; or (v) any natural  person, Entity or “group” (within the meaning of Section 13(d) or 14(d) of the Exchange Act) that, as of the  Effective Date, is the Owner, directly or indirectly, of securities of the Company representing more than50% of  the combined voting power of the Company’s then outstanding securities.  (w) “Fair Market Value” means, as of any date, the value of the Common Stock determined as  follows:  (i) If the Common Stock is listed on any established stock exchange or traded on any  established market, the Fair Market Value of a share of Common Stock will be, unless otherwise determined by  the Board, the closing sales price for such stock as quoted on such exchange or market (or the exchange or  market with the greatest volume of trading in the Common Stock) on the date of determination, as reported in  a source the Board deems reliable.  (ii) Unless otherwise provided by the Board, if there is no closing sales price for the  Common Stock on the date of determination, then the Fair Market Value will be the closing selling price on the  last preceding date for which such quotation exists.  (iii) In the absence of such markets for the Common Stock, the Fair Market Value will be  determined by the Board in good faith and in a manner that complies with Sections 409A and 422 of the Code.  (x) “Incentive Stock Option” means an option granted pursuant to Section 5 of the Plan that is  intended to be, and that qualifies as, an “incentive stock option” within the meaning of Section 422 of the Code.  

 

  (y) “IPO Date” means the date of the underwriting agreement between the Company and the  underwriter(s) managing the initial public offering of the Common Stock, pursuant to which the Common Stock  is priced for the initial public offering.   (z) “Non-Employee Director” means a Director who either (i) is not a current employee or officer  of the Company or an Affiliate, does not receive compensation, either directly or indirectly, from the Company  or an Affiliate for services rendered as a consultant or in any capacity other than as a Director (except for an  amount as to which disclosure would not be required under Item 404(a) of Regulation S-K promulgated  pursuant to the Securities Act (“Regulation S-K”)), does not possess an interest in any other transaction for  which disclosure would be required under Item 404(a) of Regulation S-K, and is not engaged in a business  relationship for which disclosure would be required pursuant to Item 404(b) of Regulation S-K; or (ii) is  otherwise considered a “non-employee director” for purposes of Rule 16b-3.  (aa) “Nonstatutory Stock Option” means any option granted pursuant to Section 5 of the Plan that  does not qualify as an Incentive Stock Option.  (bb) “Officer” means a person who is an officer of the Company within the meaning of Section 16  of the Exchange Act.  (cc) “Option” means an Incentive Stock Option or a Nonstatutory Stock Option to purchase shares  of Common Stock granted pursuant to the Plan.  (dd) “Option Agreement” means a written agreement between the Company and an Optionholder  evidencing the terms and conditions of an Option grant.  Each Option Agreement will be subject to the terms  and conditions of the Plan.  (ee) “Optionholder” means a person to whom an Option is granted pursuant to the Plan or, if  applicable, such other person who holds an outstanding Option.  (ff) “Other Stock Award” means an award based in whole or in part by reference to the Common  Stock which is granted pursuant to the terms and conditions of Section 6(d).  (gg) “Other Stock Award Agreement” means a written agreement between the Company and a  holder of an Other Stock Award evidencing the terms and conditions of an Other Stock Award grant.  Each Other  Stock Award Agreement will be subject to the terms and conditions of the Plan.  (hh) “Own,” “Owned,” “Owner,” “Ownership” A person or Entity will be deemed to “Own,” to have  “Owned,” to be the “Owner” of, or to have acquired “Ownership” of securities if such person or Entity, directly  or indirectly, through any contract, arrangement, understanding, relationship or otherwise, has or shares  voting power, which includes the power to vote or to direct the voting, with respect to such securities.  (ii) “Participant” means a person to whom an Award is granted pursuant to the Plan or, if  applicable, such other person who holds an outstanding Stock Award.  (jj) “Performance Cash Award” means an award of cash granted pursuant to the terms and  conditions of Section 6(c)(ii).  (kk) “Performance Criteria” means the one or more criteria that the Board or Committee (as  applicable) will select for purposes of establishing the Performance Goals for a Performance Period.  The  Performance Criteria that will be used to establish such Performance Goals may be based on any one of, or  combination of, the following as determined by the Board or Committee (as applicable): (1) earnings (including  earnings per share and net earnings); (2) earnings before interest, taxes and depreciation; (3) earnings before  interest, taxes, depreciation and amortization; (4) total stockholder return; (5) return on equity or average  stockholder’s equity; (6) return on assets, investment, or capital employed; (7) stock price; (8) margin  

 

  (including gross margin); (9) income (before or after taxes); (10) operating income; (11) operating income  after taxes; (12) pre-tax profit; (13) operating cash flow; (14) sales or revenue targets; (15) increases in  revenue or product revenue; (16) expenses and cost reduction goals; (17) improvement in or attainment of  working capital levels; (18) economic value added (or an equivalent metric); (19) market share; (20) cash flow;  (21) cash flow per share; (22) share price performance; (23) debt reduction; (24) customer satisfaction; (25)  stockholders’ equity; (26) capital expenditures; (27) debt levels; (28) operating profit or net operating profit;  (29) workforce diversity; (30) growth of net income or operating income; (31) billings; (32) pre-clinical  development related compound goals; (33) financing; (34) regulatory milestones, including approval of a  compound; (35) stockholder liquidity; (36) corporate governance and compliance; (37) product  commercialization; (38) intellectual property; (39) personnel matters; (40) progress of internal research or  clinical programs; (41) progress of partnered programs; (42) partner satisfaction; (43) budget management;  (44) clinical achievements; (45) completing phases of a clinical study (including the treatment phase); (46)  announcing or presenting preliminary or final data from clinical studies; in each case, whether on particular  timelines or generally; (47) timely completion of clinical trials; (48) submission of INDs and NDAs and other  regulatory achievements; (49) partner or collaborator achievements; (50) internal controls, including those  related to the Sarbanes-Oxley Act of 2002; (51) research progress, including the development of programs;  (52) investor relations, analysts and communication; (53) manufacturing achievements (including obtaining  particular yields from manufacturing runs and other measurable objectives related to process development  activities); (54) strategic partnerships or transactions (including in-licensing and out-licensing of intellectual  property; (55) establishing relationships with commercial entities with respect to the marketing, distribution  and sale of the Company’s products (including with group purchasing organizations, distributors and other  vendors); (56) supply chain achievements (including establishing relationships with manufacturers or  suppliers of active pharmaceutical ingredients and other component materials and manufacturers of the  Company’s products); (57) co-development, co-marketing, profit sharing, joint venture or other similar  arrangements; and (58) other measures of performance selected by the Board or Committee (as applicable).  (ll) “Performance Goals” means, for a Performance Period, the one or more goals established by  the Board or Committee (as applicable) for the Performance Period based upon the Performance Criteria.   Performance Goals may be based on a Company-wide basis, with respect to one or more business units,  divisions, Affiliates, or business segments, and in either absolute terms or relative to the performance of one or  more comparable companies or the performance of one or more relevant indices.  Unless specified otherwise  by the Board or Committee (as applicable) (i) in the Award Agreement at the time the Award is granted or (ii)  in such other document setting forth the Performance Goals at the time the Performance Goals are established,  the Board or Committee (as applicable) will appropriately make adjustments in the method of calculating the  attainment of Performance Goals for a Performance Period as follows: (1) to exclude restructuring and/or other  nonrecurring charges; (2) to exclude exchange rate effects; (3) to exclude the effects of changes to generally  accepted accounting principles; (4) to exclude the effects of any statutory adjustments to corporate tax rates;  (5) to exclude the effects of items that are “unusual” in nature or occur “infrequently” as determined under  generally accepted accounting principles; (6) to exclude the dilutive effects of acquisitions or joint ventures;  (7) to assume that any business divested by the Company achieved performance objectives at targeted levels  during the balance of a Performance Period following such divestiture; (8) to exclude the effect of any change  in the outstanding shares of common stock of the Company by reason of any stock dividend or split, stock  repurchase, reorganization, recapitalization, merger, consolidation, spin-off, combination or exchange of  shares or other similar corporate change, or any distributions to common stockholders other than regular cash  dividends; (9) to exclude the effects of stock based compensation and the award of bonuses under the  Company’s bonus plans; (10) to exclude costs incurred in connection with potential acquisitions or divestitures  that are required to expensed under generally accepted accounting principles; and (11) to exclude the goodwill  and intangible asset impairment charges that are required to be recorded under generally accepted accounting  principles.  In addition, the Board or Committee (as applicable) retains the discretion to reduce or eliminate  the compensation or economic benefit due upon attainment of Performance Goals and to define the manner of  calculating the Performance Criteria it selects to use for such Performance Period. Partial achievement of the  specified criteria may result in the payment or vesting corresponding to the degree of achievement as specified  in the Stock Award Agreement or the written terms of a Performance Cash Award.    

 

  (mm) “Performance Period” means the period of time selected by the Board or Committee (as  applicable) over which the attainment of one or more Performance Goals will be measured for the purpose of  determining a Participant’s right to and the payment of a Stock Award or a Performance Cash Award.   Performance Periods may be of varying and overlapping duration, at the sole discretion of the Board or  Committee (as applicable).  (nn) “Performance Stock Award” means a Stock Award granted pursuant to the terms and  conditions of Section 6(c)(i).  (oo) “Plan” means this SI-BONE, Inc. 2018 Equity Incentive Plan.  (pp) “Restricted Stock Award” means an award of shares of Common Stock which is granted  pursuant to the terms and conditions of Section 6(a).  (qq) “Restricted Stock Award Agreement” means a written agreement between the Company and  a holder of a Restricted Stock Award evidencing the terms and conditions of a Restricted Stock Award grant.   Each Restricted Stock Award Agreement will be subject to the terms and conditions of the Plan.  (rr) “Restricted Stock Unit Award” means a right to receive shares of Common Stock which is  granted pursuant to the terms and conditions of Section 6(b).  (ss) “Restricted Stock Unit Award Agreement” means a written agreement between the Company  and a holder of a Restricted Stock Unit Award evidencing the terms and conditions of a Restricted Stock Unit  Award grant.  Each Restricted Stock Unit Award Agreement will be subject to the terms and conditions of the  Plan.  (tt) “Rule 16b-3” means Rule 16b-3 promulgated under the Exchange Act or any successor to Rule  16b-3, as in effect from time to time.  (uu) “Rule 405” means Rule 405 promulgated under the Securities Act.    (vv) “Securities Act” means the Securities Act of 1933, as amended.  (ww) “Stock Appreciation Right” or “SAR” means a right to receive the appreciation on Common  Stock that is granted pursuant to the terms and conditions of Section 5.  (xx) “Stock Appreciation Right Agreement” means a written agreement between the Company  and a holder of a Stock Appreciation Right evidencing the terms and conditions of a Stock Appreciation Right  grant.  Each Stock Appreciation Right Agreement will be subject to the terms and conditions of the Plan.  (yy) “Stock Award” means any right to receive Common Stock granted under the Plan, including  an Incentive Stock Option, a Nonstatutory Stock Option, a Restricted Stock Award, a Restricted Stock Unit  Award, a Stock Appreciation Right, a Performance Stock Award or any Other Stock Award.  (zz) “Stock Award Agreement” means a written agreement between the Company and a  Participant evidencing the terms and conditions of a Stock Award grant.  Each Stock Award Agreement will be  subject to the terms and conditions of the Plan.  (aaa) “Subsidiary” means, with respect to the Company, (i) any corporation of which more than  50% of the outstanding capital stock having ordinary voting power to elect a majority of the board of directors  of such corporation (irrespective of whether, at the time, stock of any other class or classes of such corporation  will have or might have voting power by reason of the happening of any contingency) is at the time, directly or  indirectly, Owned by the Company, and (ii) any partnership, limited liability company or other entity in which  

 

  the Company has a direct or indirect interest (whether in the form of voting or participation in profits or capital  contribution) of more than 50%.  (bbb) “Ten Percent Stockholder” means a person who Owns (or is deemed to Own pursuant to  Section 424(d) of the Code) stock possessing more than 10% of the total combined voting power of all classes  of stock of the Company or any Affiliate.Exhibit 10.1
Execution Version

THIRD AMENDMENT TO FIFTH AMENDED AND RESTATED LOAN AGREEMENT
This Third Amendment to the Fifth Amended and Restated Loan Agreement (this "Amendment"), dated as of January 4, 2022, is entered into by and among WHITEHORSE FINANCE CREDIT I, LLC (the "Company"), JPMORGAN CHASE BANK, NATIONAL ASSOCIATION, as lender (the "Lender") and administrative agent (the "Administrative Agent"), CITIBANK, N.A., as collateral agent (the "Collateral Agent") and securities intermediary (the "Securities Intermediary"), WHITEHORSE FINANCE, INC. (the "Portfolio Manager") and Virtus Group LP, as collateral administrator (the "Collateral Administrator").  Reference is hereby made to the Fifth Amended and Restated Loan Agreement (as amended by the First Amendment dated as of July 15, 2021, as amended by the Second Amendment dated as of October 4, 2021 and as further amended or modified from time to time, the "Loan Agreement"), dated as of April 28, 2021, among the Company, the Lender, the Administrative Agent, the Collateral Agent, the Securities Intermediary, the Portfolio Manager and the Collateral Administrator.  Capitalized terms used herein without definition shall have the meanings assigned thereto in the Loan Agreement.
WHEREAS, the parties hereto are parties to the Loan Agreement; 
WHEREAS, the parties hereto desire to amend the terms of the Loan Agreement in accordance with Section 10.05 thereof as provided for herein; and
ACCORDINGLY, the Loan Agreement is hereby amended as follows:
SECTION 1.AMENDMENT TO THE LOAN AGREEMENT
The definition of "Bridge Commitment Period" is deleted in its entirety and is replaced with the following:
"Bridge Commitment Period" means the period beginning on, and including, the Second Amendment Effective Date and ending on, but excluding, the date that is four calendar months following the Second Amendment Effective Date.
SECTION 2.MISCELLANEOUS.
(A)The effectiveness of this Amendment shall be subject to receipt by the Administrative Agent of (i) the fee payable in accordance with the Third Amendment Effective Date Letter and (ii) to the extent the Company qualifies as a "legal entity customer" under the Beneficial Ownership Regulation, a Beneficial Ownership Certification in relation to the Company.
(B)The parties hereto hereby agree that, except as specifically amended herein, the Loan Agreement is and shall continue to be in full force and effect and is hereby ratified and confirmed in all respects.  Except as specifically provided herein, the execution, delivery and effectiveness of this Amendment shall not operate as a waiver of any right, power or remedy of any party hereto under the Loan Agreement, or constitute a waiver of any provision of any other agreement.
(C)The Collateral Administrator, the Collateral Agent and the Securities Intermediary are hereby directed to execute and deliver this Amendment.
(D)The effectiveness of this Amendment shall be subject to receipt by the Administrative Agent of an opinion of counsel for the Company to the effect that this Amendment constitutes a legal, valid and binding obligation of the Company (subject to standard qualifications and assumptions).  
(E)The Portfolio Manager hereby certifies that (i) all of the Company’s representations and warranties set forth in Section 6.01 of the Loan Agreement are true and correct (subject to any materiality 

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qualifiers set forth therein) as of the date hereof and (ii) as of the date hereof, no Default, Event of Default or Market Value Cure Failure has occurred and is continuing.
(F)This Amendment shall be governed by and construed in accordance with the laws of the State of New York.
(G)This Amendment may be executed in any number of counterparts by facsimile or other written form of communication, each of which shall be deemed to be an original as against any party whose signature appears thereon, and all of which shall together constitute one and the same instrument.
(H)This Amendment shall be effective as of the date of this Amendment first written above.
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IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of the day and year first above written. 
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	WHITEHORSE FINANCE CREDIT I, LLC

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	By:
	/s/ Joyson C. Thomas

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	Name:
	Joyson C. Thomas

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	Title:
	Authorized Signatory

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	JPMORGAN CHASE BANK, NATIONAL
ASSOCIATION, as Administrative Agent

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	By:
	/s/ James Greenfield

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	Name:
	James Greenfield

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	Title:
	Executive Director

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	CITIBANK, N.A., as Collateral Agent

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	By:
	/s/ Jose Mayorga

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	Name:
	Jose Mayorga

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	Title:
	Senior Trust Officer

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	CITIBANK, N.A., as Securities Intermediary

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	By:
	/s/ Jose Mayorga

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	Name:
	Jose Mayorga

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	Title:
	Senior Trust Officer

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	VIRTUS GROUP LP, as Collateral Administrator

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	By:
	Rocket Partners holdings, LLC,
its General Partner

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	By:
	/s/ Paul Plank

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	Name:
	Paul Plank

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	Title:
	Authorized Signatory

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	WHITEHORSE FINANCE, INC., as Portfolio Manager

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	By:
	/s/ Joyson C. Thomas

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	Name:
	Joyson C. Thomas

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	Title:
	Authorized Signatory

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	The Financing Provider

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	JPMORGAN CHASE BANK, NATIONAL ASSOCIATION, as Lender

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	By:
	/s/ James Greenfield

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	Name:
	James Greenfield

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	Title:
	Executive Director

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Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00338-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00338-of-00352.parquet"}]]