CORNERSTONE
ONDEMAND, INC.
2010
EMPLOYEE STOCK PURCHASE PLAN
1. Purpose. The
purpose of the Plan is to provide employees of the Company and its Designated
Subsidiaries with an opportunity to purchase Common Stock through accumulated
Contributions (as defined in Section 2(j) below). The Company’s
intention is to have the Plan qualify as an “employee stock purchase plan” under
Section 423 of the Code. The provisions of the Plan, accordingly,
will be construed so as to extend and limit Plan participation in a uniform and
nondiscriminatory basis consistent with the requirements of Section 423 of the
Code.
2. Definitions.
(a) “Administrator” means
the Board or any Committee designated by the Board to administer the Plan
pursuant to Section 14.
(b) “Applicable Laws”
means the requirements relating to the administration of equity-based awards
under U.S. state corporate laws, U.S. federal and state securities laws, the
Code, any stock exchange or quotation system on which the Common Stock is listed
or quoted and the applicable laws of any foreign country or jurisdiction where
options are, or will be, granted under the Plan.
(c) “Board” means the
Board of Directors of the Company.
(d) “Change in Control”
means the occurrence of any of the following events:
(i) A
change in the ownership of the Company which occurs on the date that any one
person, or more than one person acting as a group (“Person”), acquires
ownership of the stock of the Company that, together with the stock held by such
Person, constitutes more than fifty percent (50%) of the total voting power of
the stock of the Company; provided, however, that for purposes of this
subsection, the acquisition of additional stock by any one Person, who is
considered to own more than fifty percent (50%) of the total voting power of the
stock of the Company will not be considered a Change in Control; or
(ii) A
change in the effective control of the Company which occurs on the date that a
majority of members of the Board is replaced during any twelve (12) month period
by Directors whose appointment or election is not endorsed by a majority of the
members of the Board prior to the date of the appointment or
election. For purposes of this clause (ii), if any Person is
considered to be in effective control of the Company, the acquisition of
additional control of the Company by the same Person will not be considered a
Change in Control; or
(iii) A
change in the ownership of a substantial portion of the Company’s assets which
occurs on the date that any Person acquires (or has acquired during the twelve
(12) month period ending on the date of the most recent acquisition by such
person or persons) assets from the Company that have a total gross fair market
value equal to or more than fifty percent (50%) of the total gross fair market
value of all of the assets of the Company immediately prior to such acquisition
or acquisitions; provided, however, that for purposes of this subsection, the
following will not constitute a change in the ownership of a substantial portion
of the Company’s assets: (A) a transfer to an entity that is controlled by the
Company’s stockholders immediately after the transfer, or (B) a transfer of
assets by the Company to: (1) a stockholder of the Company (immediately before
the asset transfer) in exchange for or with respect to the Company’s stock, (2)
an entity, fifty percent (50%) or more of the total value or voting power of
which is owned, directly or indirectly, by the Company, (3) a Person, that owns,
directly or indirectly, fifty percent (50%) or more of the total value or voting
power of all the outstanding stock of the Company, or (4) an entity, at least
fifty percent (50%) of the total value or voting power of which is owned,
directly or indirectly, by a Person described in this subsection
(iii)(B)(3). For purposes of this subsection, gross fair market value
means the value of the assets of the Company, or the value of the assets being
disposed of, determined without regard to any liabilities associated with such
assets.
For
purposes of this definition, persons will be considered to be acting as a group
if they are owners of a corporation that enters into a merger, consolidation,
purchase or acquisition of stock, or similar business transaction with the
Company.
Notwithstanding
the foregoing, a transaction will not be deemed a Change in Control unless the
transaction qualifies as a change in control event within the meaning of Code
Section 409A, as it has been and may be amended from time to time, and any
proposed or final Treasury Regulations and Internal Revenue Service guidance
that has been promulgated or may be promulgated thereunder from time to
time.
Further
and for the avoidance of doubt, a transaction will not constitute a Change in
Control if: (i) its sole purpose is to change the state of the Company’s
incorporation, or (ii) its sole purpose is to create a holding company that will
be owned in substantially the same proportions by the persons who held the
Company’s securities immediately before such transaction.
(e) “Code” means the
Internal Revenue Code of 1986, as amended. Any reference to a section
of the Code herein will be a reference to any successor or amended section of
the Code.
(f) “Committee” means a
committee of the Board appointed in accordance with Section 14
hereof.
(g) “Common Stock” means
the common stock of the Company.
(h) “Company” means
Cornerstone OnDemand, Inc., a Delaware corporation, or any successor
thereto.
(i) “Compensation” means
an Eligible Employee’s base straight time gross earnings, commissions (to the
extent such commissions are an integral, recurring part of compensation),
payments for overtime and shift premium, but exclusive of payments for incentive
compensation, bonuses and other similar compensation. The
Administrator, in its discretion, may, on a uniform and nondiscriminatory basis,
establish a different definition of Compensation for a subsequent Offering
Period.
(j) “Contributions” means
the payroll deductions and other additional payments that the Company may permit
to be made by a Participant to fund the exercise of options granted pursuant to
the Plan.
(k) “Designated
Subsidiary” means any Subsidiary that has been designated by the
Administrator from time to time in its sole discretion as eligible to
participate in the Plan.
(l) “Director” means a
member of the Board.
(m) “Eligible Employee”
means any individual who is a common law employee of the Company or a Designated
Subsidiary and is customarily employed for at least twenty (20) hours per week
and more than five (5) months in any calendar year by the Employer, or any
lesser number of hours per week and/or number of months in any calendar year
established by the Administrator (if required under applicable local law) for
purposes of any separate Offering. For purposes of the Plan, the
employment relationship will be treated as continuing intact while the
individual is on sick leave or other leave of absence that the Employer
approves. Where the period of leave exceeds three (3) months and the
individual’s right to reemployment is not guaranteed either by statute or by
contract, the employment relationship will be deemed to have terminated three
(3) months and one (1) day following the commencement of such
leave. The Administrator, in its discretion, from time to time may,
prior to an Enrollment Date for all options to be granted on such Enrollment
Date, determine (on a uniform and nondiscriminatory basis) that the definition
of Eligible Employee will or will not include an individual if he or she: (i)
has not completed at least two (2) years of service since his or her last hire
date (or such lesser period of time as may be determined by the
Administrator in its discretion), (ii) customarily works not more than
twenty (20) hours per week (or such lesser period of time as may be determined
by the Administrator in its discretion), (iii) customarily works not more than
five (5) months per calendar year (or such lesser period of time as may be
determined by the Administrator in its discretion), (iv) is a highly
compensated employee within the meaning of Section 414(q) of the Code with
compensation above a certain level or is an officer or subject to the disclosure
requirements of Section 16(a) of the Exchange Act, provided the exclusion is
applied with respect to each Offering in an identical manner to all highly
compensated individuals of the Employer whose Employees are participating in
that Offering.
(n) “Employer” means the
employer of the applicable Eligible Employee(s).
(o) “Enrollment Date”
means the first Trading Day of each Offering Period.
(p) “Exchange Act” means
the Securities Exchange Act of 1934, as amended, including the rules and
regulations promulgated thereunder.
(q) “Exercise Date” means
such dates on which each outstanding option granted under the Plan will be
exercised (except if the Plan has been terminated), as may be determined by the
Administrator, in its discretion and on a uniform and nondiscriminatory basis
from time to time prior to an Enrollment Date for all options to be granted on
such Enrollment Date.
(r) “Fair Market Value”
means, as of any date and unless the Administrator determines otherwise, the
value of Common Stock determined as follows:
(i) If
the Common Stock is listed on any established stock exchange or a national
market system, including without limitation the NASDAQ Global Select Market, the
NASDAQ Global Market or the NASDAQ Capital Market of The NASDAQ Stock Market,
its Fair Market Value will be the closing sales price for such stock as quoted
on such exchange or system on the date of determination (or the closing bid, if
no sales were reported), as reported in The Wall Street Journal or
such other source as the Administrator deems reliable;
(ii) If
the Common Stock is regularly quoted by a recognized securities dealer but
selling prices are not reported, its Fair Market Value will be the mean between
the high bid and low asked prices for the Common Stock on the date of
determination, as reported in The Wall Street Journal or
such other source as the Administrator deems reliable;
(iii) In
the absence of an established market for the Common Stock, the Fair Market Value
thereof will be determined in good faith by the Administrator; or
(iv) For
purposes of the Enrollment Date of the first Offering Period under the Plan, the
Fair Market Value will be the initial price to the public as set forth in the
final prospectus included within the registration statement on Form S-1 filed
with the Securities and Exchange Commission for the initial public offering of
the Common Stock (the “Registration
Statement”).
(s) “Fiscal Year” means
the fiscal year of the Company.
(t) “New Exercise Date”
means a new Exercise Date if the Administrator shortens any Offering Period then
in progress.
(u) “Offering” means an
offer under the Plan of an option that may be exercised during an Offering
Period as further described in Section 4. For purposes of the Plan,
the Administrator may designate separate Offerings under the Plan (the terms of
which need not be identical) in which Eligible Employees of one or more
Employers will participate, even if the dates of the applicable Offering Periods
of each such Offering are identical.
(v) “Offering Periods”
means the period beginning on such date as may be determined by the
Administrator, in its discretion and on a uniform and nondiscriminatory basis,
and ending on an Exercise Date. The duration and timing of Offering
Periods may be changed pursuant to Sections 4 and 20.
(w) “Parent” means a
“parent corporation,” whether now or hereafter existing, as defined in Section
424(e) of the Code.
(x) “Participant” means an
Eligible Employee that participates in the Plan.
(y) “Plan” means this
Cornerstone OnDemand, Inc. 2010 Employee Stock Purchase Plan.
(z) “Purchase Period”
means the period, as determined by the Administrator in its discretion on a
uniform and nondiscriminatory basis, commencing on the Enrollment Date and
ending with the next Exercise Date, except that if the Administrator determines
that more than one Purchase Period should occur within an Offering Period,
subsequent Purchase Periods within such Offering Period commence after one
Exercise Date and end with the next Exercise Date at such time or times as the
Administrator determines prior to the commencement of the applicable Offering
Period.
(aa) “Purchase Price” means
the price per share of the shares purchased under any option granted under the
Plan as determined by the Administrator from time to time, in its discretion and
on a uniform and nondiscriminatory basis for all options to be granted on an
Enrollment Date. However, in no event will the Purchase Price be less
than eighty-five percent (85%) of the lower of the Fair Market Value of a share
of Common Stock on the Enrollment Date or the Fair Market Value of a share of
Common Stock on the Exercise Date and at all times in compliance with Section
423 of the Code.
(bb) “Subsidiary” means a
“subsidiary corporation,” whether now or hereafter existing, as defined in
Section 424(f) of the Code.
(cc) “Trading Day” means a
day on which the national stock exchange upon which the Common Stock is listed
is open for trading.
3. Eligibility.
(a) Offering
Periods. Any Eligible Employee on a given Enrollment Date will
be eligible to participate in the Plan, subject to the requirements of Section
5.
(b) Non-U.S.
Employees. Employees who are citizens or residents of a
non-U.S. jurisdiction may be excluded from participation in the Plan or an
Offering if the participation of such employees is prohibited under the laws of
the applicable jurisdiction or if complying with the laws of the applicable
jurisdiction would cause the Plan or an Offering to violate Section 423 of the
Code.
(c) Limitations. Any
provisions of the Plan to the contrary notwithstanding, no Eligible Employee
will be granted an option under the Plan (i) to the extent that, immediately
after the grant, such Eligible Employee (or any other person whose stock would
be attributed to such Eligible Employee pursuant to Section 424(d) of the Code)
would own capital stock of the Company or any Parent or Subsidiary of the
Company and/or hold outstanding options to purchase such stock possessing five
percent (5%) or more of the total combined voting power or value of all classes
of the capital stock of the Company or of any Parent or Subsidiary of the
Company, or (ii) to the extent that his or her rights to purchase stock under
all employee stock purchase plans (as defined in Section 423 of the Code) of the
Company or any Parent or Subsidiary of the Company accrues at a rate which
exceeds twenty-five thousand dollars ($25,000) worth of stock (determined at the
Fair Market Value of the stock at the time such option is granted) for each
calendar year in which such option is outstanding at any time, as determined in
accordance with Section 423 of the Code and the regulations
thereunder.
4. Offering
Periods. Offering Periods will expire on the earliest to occur
of (a) the completion of the purchase of shares on the last Exercise Date
occurring within twenty-seven (27) months of the applicable Enrollment Date on
which the option to purchase shares was granted, or (b) such shorter period as
may be established by the Administrator from time to time, in its discretion and
on a uniform and nondiscriminatory basis, prior to an Enrollment Date for all
options to be granted on such Enrollment Date.
5. Participation. An
Eligible Employee may participate in the Plan by (i) submitting to the Company’s
stock administration office (or its designee), on or before a date determined by
the Administrator prior to an applicable Enrollment Date, a properly completed
subscription agreement authorizing Contributions in the form provided by the
Administrator for such purpose, or (ii) following an electronic or other
enrollment procedure determined by the Administrator.
6. Contributions.
(a) At
the time a Participant enrolls in the Plan pursuant to Section 5, he or she will
elect to have payroll deductions made on each pay day or other Contributions (to
the extent permitted by the Administrator) made during the Offering Period in an
amount that the Administrator may establish from time to time, in its discretion
and on a uniform and nondiscriminatory basis, for all options to be granted on
any Enrollment Date, which he or she receives on each pay day during the
Offering Period; provided, however, that should a pay day occur on an Exercise
Date, a Participant will have any payroll deductions made on such day applied to
his or her account under the subsequent Purchase Period or Offering
Period. The Administrator, in its sole discretion, may permit all
Participants in a specified Offering to contribute amounts to the Plan through
payment by cash, check or other means set forth in the subscription agreement
prior to each Exercise Date of each Offering Period, provided that payment
through means other than payroll deductions shall be permitted only if the
Participant has not already had the maximum permitted amount withheld through
payroll deductions during the Purchase Period or Offering Period. A
Participant’s subscription agreement will remain in effect for successive
Offering Periods unless terminated as provided in Section 10
hereof.
(b) Payroll
deductions for a Participant will commence on the first pay day following the
Enrollment Date and will end on the last pay day prior to the Exercise Date of
such Offering Period to which such authorization is applicable, unless sooner
terminated by the Participant as provided in Section 10 hereof; provided,
however, that for the first Offering Period, payroll deductions will commence on
the first pay day on or following the end of the Enrollment Window.
(c) All
Contributions made for a Participant will be credited to his or her account
under the Plan and payroll deductions will be made in whole percentages
only. A Participant may not make any additional payments into such
account.
(d) A
Participant may discontinue his or her participation in the Plan as provided in
Section 10. If permitted by the Administrator, as determined in its
sole discretion, for an Offering Period, a Participant may increase or decrease
the rate of his or her Contributions during the Offering Period by
(i) properly completing and submitting to the Company’s stock
administration office (or its designee), on or before a date determined by the
Administrator prior to an applicable Exercise Date, a new subscription agreement
authorizing the change in Contribution rate in the form provided by the
Administrator for such purpose, or (ii) following an electronic or other
procedure prescribed by the Administrator. If a Participant has not
followed such procedures to change the rate of Contributions, the rate of his or
her Contributions will continue at the originally elected rate throughout the
Offering Period and future Offering Periods (unless terminated as provided in
Section 10). The Administrator may, in its sole discretion, limit the
nature and/or number of Contribution rate changes that may be made by
Participants during any Offering Period, and may establish such other conditions
or limitations as it deems appropriate for Plan administration. Any
change in payroll deduction rate made pursuant to this Section 6(d) will be
effective as of the first full payroll period following five (5) business days
after the date on which the change is made by the Participant (unless the
Administrator, in its sole discretion, elects to process a given change in
payroll deduction rate more quickly).
(e) Notwithstanding
the foregoing, to the extent necessary to comply with Section 423(b)(8) of
the Code and Section 3(c), a Participant’s Contributions may be decreased to
zero percent (0%) at any time during an Offering Period. Subject to
Section 423(b)(8) of the Code and Section 3(c) hereof, Contributions will
recommence at the rate originally elected by the Participant effective as of the
beginning of the first Purchase Period or Offering Period scheduled to end in
the following calendar year, unless terminated by the Participant as provided in
Section 10.
(f) Notwithstanding
any provisions to the contrary in the Plan, the Administrator may allow Eligible
Employees to participate in the Plan via cash contributions instead of payroll
deductions if (i) payroll deductions are not permitted under applicable local
law, and (ii) the Administrator determines that cash contributions are
permissible under Section 423 of the Code.
(g) At
the time the option is exercised, in whole or in part, or at the time some or
all of the Common Stock issued under the Plan is disposed of (or any other time
that a taxable event related to the Plan occurs), the Participant must make
adequate provision for the Company’s or Employer’s federal, state, local or any
other tax liability payable to any authority including taxes imposed by
jurisdictions outside of the U.S., national insurance, social security or other
tax withholding obligations, if any, which arise upon the exercise of the option
or the disposition of the Common Stock (or any other time that a taxable event
related to the Plan occurs). At any time, the Company or the Employer
may, but will not be obligated to, withhold from the Participant’s Compensation
the amount necessary for the Company or the Employer to meet applicable
withholding obligations, including any withholding required to make available to
the Company or the Employer any tax deductions or benefits attributable to sale
or early disposition of Common Stock by the Eligible Employee. In addition, the
Company or the Employer may, but will not be obligated to, withhold from the
proceeds of the sale of Common Stock or any other method of withholding the
Company or the Employer deems appropriate to the extent permitted by U.S.
Treasury Regulation Section 1.423-2(f).
7. Grant of
Option. On the Enrollment Date of each Offering Period, each
Eligible Employee participating in such Offering Period will be granted an
option to purchase on each Exercise Date during such Offering Period (at the
applicable Purchase Price) up to a number of shares of Common Stock determined
by dividing such Eligible Employee’s Contributions accumulated prior to such
Exercise Date and retained in the Eligible Employee’s account as of the Exercise
Date by the applicable Purchase Price; provided that, unless and until otherwise
determined by the Administrator, in no event will an Eligible Employee be
permitted to purchase during each Purchase Period more than 5,000 shares of the
Company’s Common Stock (subject to any adjustment pursuant to Section 19) and
provided further that such purchase will be subject to the limitations set forth
in Sections 3(c) and 13. The Eligible Employee may accept the grant
of such option (i) with respect to the first Offering Period by submitting a
properly completed subscription agreement in accordance with the requirements of
Section 5 on or before the last day of the Enrollment Window, and (ii) with
respect to any subsequent Offering Period under the Plan, by electing to
participate in the Plan in accordance with the requirements of Section
5. The Administrator may, for future Offering Periods, increase or
decrease, in its absolute discretion, the maximum number of shares of Common
Stock that an Eligible Employee may purchase during each Purchase Period of an
Offering Period. Exercise of the option will occur as provided in
Section 8, unless the Participant has withdrawn pursuant to Section
10. The option will expire on the last day of the Offering
Period.
8. Exercise of
Option.
(a) Unless
a Participant withdraws from the Plan as provided in Section 10, his or her
option for the purchase of shares of Common Stock will be exercised
automatically on the Exercise Date, and the maximum number of full shares
subject to the option will be purchased for such Participant at the applicable
Purchase Price with the accumulated Contributions from his or her
account. No fractional shares of Common Stock will be purchased; any
Contributions accumulated in a Participant’s account which are not sufficient to
purchase a full share will be retained in the Participant’s account for the
subsequent Purchase Period or Offering Period, subject to earlier withdrawal by
the Participant as provided in Section 10. Any other funds left over
in a Participant’s account after the Exercise Date will be returned to the
Participant. During a Participant’s lifetime, a Participant’s option
to purchase shares hereunder is exercisable only by him or her.
(b) If
the Administrator determines that, on a given Exercise Date, the number of
shares of Common Stock with respect to which options are to be exercised may
exceed (i) the number of shares of Common Stock that were available for sale
under the Plan on the Enrollment Date of the applicable Offering Period, or (ii)
the number of shares of Common Stock available for sale under the Plan on such
Exercise Date, the Administrator may in its sole discretion (x) provide that the
Company will make a pro rata allocation of the shares of Common Stock available
for purchase on such Enrollment Date or Exercise Date, as applicable, in as
uniform a manner as will be practicable and as it will determine in its sole
discretion to be equitable among all Participants exercising options to purchase
Common Stock on such Exercise Date, and continue all Offering Periods then in
effect or (y) provide that the Company will make a pro rata allocation of the
shares available for purchase on such Enrollment Date or Exercise Date, as
applicable, in as uniform a manner as will be practicable and as it will
determine in its sole discretion to be equitable among all participants
exercising options to purchase Common Stock on such Exercise Date, and terminate
any or all Offering Periods then in effect pursuant to Section
20. The Company may make a pro rata allocation of the shares
available on the Enrollment Date of any applicable Offering Period pursuant to
the preceding sentence, notwithstanding any authorization of additional shares
for issuance under the Plan by the Company’s stockholders subsequent to such
Enrollment Date.
9. Delivery. As
soon as reasonably practicable after each Exercise Date on which a purchase of
shares of Common Stock occurs, the Company will arrange the delivery to each
Participant of the shares purchased upon exercise of his or her option in a form
determined by the Administrator (in its sole discretion) and pursuant to rules
established by the Administrator. The Company may permit or require
that shares be deposited directly with a broker designated by the Company or to
a designated agent of the Company, and the Company may utilize electronic or
automated methods of share transfer. The Company may require that
shares be retained with such broker or agent for a designated period of time
and/or may establish other procedures to permit tracking of disqualifying
dispositions of such shares. No Participant will have any voting,
dividend, or other stockholder rights with respect to shares of Common Stock
subject to any option granted under the Plan until such shares have been
purchased and delivered to the Participant as provided in this Section
9.
10. Withdrawal.
(a) A
Participant may withdraw all but not less than all the Contributions credited to
his or her account and not yet used to exercise his or her option under the Plan
at any time by (i) submitting to the Company’s stock administration office
(or its designee) a written notice of withdrawal in the form determined by the
Administrator for such purpose, or (ii) following an electronic or other
withdrawal procedure determined by the Administrator. All of the
Participant’s Contributions credited to his or her account will be paid to such
Participant promptly after receipt of notice of withdrawal and such
Participant’s option for the Offering Period will be automatically terminated,
and no further Contributions for the purchase of shares will be made for such
Offering Period. If a Participant withdraws from an Offering Period,
Contributions will not resume at the beginning of the succeeding Offering
Period, unless the Participant re-enrolls in the Plan in accordance with the
provisions of Section 5.
(b) A
Participant’s withdrawal from an Offering Period will not have any effect upon
his or her eligibility to participate in any similar plan that may hereafter be
adopted by the Company or in succeeding Offering Periods that commence after the
termination of the Offering Period from which the Participant
withdraws.
11. Termination of
Employment. Upon a Participant’s ceasing to be an Eligible
Employee, for any reason, he or she will be deemed to have elected to withdraw
from the Plan and the Contributions credited to such Participant’s account
during the Offering Period but not yet used to purchase shares of Common Stock
under the Plan will be returned to such Participant or, in the case of his or
her death, to the person or persons entitled thereto under Section 15, and such
Participant’s option will be automatically terminated.
12. Interest. No
interest will accrue on the Contributions of a participant in the Plan, except
as may be required by applicable law, as determined by the Company, and if so
required by the laws of a particular jurisdiction, shall apply to all
Participants in the relevant Offering except to the extent otherwise permitted
by U.S. Treasury Regulation Section 1.423-2(f).
13. Stock.
(a) Subject
to adjustment upon changes in capitalization of the Company as provided in
Section 19 hereof, the maximum number of shares of Common Stock that will be
made available for sale under the Plan will be 300,000 shares of Common Stock,
plus an annual increase to be added on the first day of each Fiscal Year
beginning with the 2012 Fiscal Year equal to the least of (i) 1,200,000
shares of Common Stock, (ii) one percent (1%) of the outstanding shares of
Common Stock on such date, or (iii) an amount determined by the
Administrator.
(b) Until
the shares are issued (as evidenced by the appropriate entry on the books of the
Company or of a duly authorized transfer agent of the Company), a Participant
will only have the rights of an unsecured creditor with respect to such shares,
and no right to vote or receive dividends or any other rights as a stockholder
will exist with respect to such shares.
(c) Shares
of Common Stock to be delivered to a Participant under the Plan will be
registered in the name of the Participant or in the name of the Participant and
his or her spouse.
14. Administration. The
Plan will be administered by the Board or a Committee appointed by the Board,
which Committee will be constituted to comply with Applicable
Laws. The Administrator will have full and exclusive discretionary
authority to construe, interpret and apply the terms of the Plan, to designate
separate Offerings under the Plan, to determine eligibility, to adjudicate all
disputed claims filed under the Plan and to establish such procedures that it
deems necessary for the administration of the Plan (including, without
limitation, to adopt such procedures and sub-plans as are necessary or
appropriate to permit the participation in the Plan by employees who are foreign
nationals or employed outside the U.S.). Unless otherwise determined
by the Administrator, the Eligible Employees eligible to participate in each
sub-plan will participate in a separate Offering. Without limiting
the generality of the foregoing, the Administrator is specifically authorized to
adopt rules and procedures regarding eligibility to participate, the definition
of Compensation, handling of Contributions, making of Contributions to the Plan
(including, without limitation, in forms other than payroll deductions),
establishment of bank or trust accounts to hold Contributions, payment of
interest, conversion of local currency, obligations to pay payroll tax,
determination of beneficiary designation requirements, withholding procedures
and handling of stock certificates that vary with applicable local
requirements. Every finding, decision and determination made by the
Administrator will, to the full extent permitted by law, be final and binding
upon all parties.
15. Designation of
Beneficiary.
(a) If
permitted by the Administrator, a Participant may file a designation of a
beneficiary who is to receive any shares of Common Stock and cash, if any, from
the Participant’s account under the Plan in the event of such Participant’s
death subsequent to an Exercise Date on which the option is exercised but prior
to delivery to such Participant of such shares and cash. In addition,
if permitted by the Administrator, a Participant may file a designation of a
beneficiary who is to receive any cash from the Participant’s account under the
Plan in the event of such Participant’s death prior to exercise of the
option. If a Participant is married and the designated beneficiary is
not the spouse, spousal consent will be required for such designation to be
effective.
(b) Such
designation of beneficiary may be changed by the Participant at any time by
notice in a form determined by the Administrator. In the event of the
death of a Participant and in the absence of a beneficiary validly designated
under the Plan who is living at the time of such Participant’s death, the
Company will deliver such shares and/or cash to the executor or administrator of
the estate of the Participant, or if no such executor or administrator has been
appointed (to the knowledge of the Company), the Company, in its discretion, may
deliver such shares and/or cash to the spouse or to any one or more dependents
or relatives of the Participant, or if no spouse, dependent or relative is known
to the Company, then to such other person as the Company may
designate.
(c) All
beneficiary designations will be in such form and manner as the Administrator
may designate from time to time. Notwithstanding Sections 15(a) and
(b) above, the Company and/or the Administrator may decide not to permit such
designations by Participants in non-U.S. jurisdictions to the extent permitted
by U.S. Treasury Regulation Section 1.423-2(f).
16. Transferability. Neither
Contributions credited to a Participant’s account nor any rights with regard to
the exercise of an option or to receive shares of Common Stock under the Plan
may be assigned, transferred, pledged or otherwise disposed of in any way (other
than by will, the laws of descent and distribution or as provided in Section 15
hereof) by the Participant. Any such attempt at assignment, transfer,
pledge or other disposition will be without effect, except that the Company may
treat such act as an election to withdraw funds from an Offering Period in
accordance with Section 10 hereof.
17. Use of
Funds. The Company may use all Contributions received or held
by it under the Plan for any corporate purpose, and the Company will not be
obligated to segregate such Contributions except under Offerings in which
applicable local law requires that Contributions to the Plan by Participants be
segregated from the Company’s general corporate funds and/or deposited with an
independent third party for Participants in non-U.S.
jurisdictions. Until shares of Common Stock are issued, Participants
will only have the rights of an unsecured creditor with respect to such
shares.
18. Reports. Individual
accounts will be maintained for each Participant in the
Plan. Statements of account will be given to participating Eligible
Employees at least annually, which statements will set forth the amounts of
Contributions, the Purchase Price, the number of shares of Common Stock
purchased and the remaining cash balance, if any.
19. Adjustments, Dissolution,
Liquidation, Merger or Change in Control.
(a) Adjustments. In
the event that any dividend or other distribution (whether in the form of cash,
Common Stock, other securities, or other property), recapitalization, stock
split, reverse stock split, reorganization, merger, consolidation, split-up,
spin-off, combination, repurchase, or exchange of Common Stock or other
securities of the Company, or other change in the corporate structure of the
Company affecting the Common Stock occurs, the Administrator, in order to
prevent dilution or enlargement of the benefits or potential benefits intended
to be made available under the Plan, will, in such manner as it may deem
equitable, adjust the number and class of Common Stock that may be delivered
under the Plan, the Purchase Price per share and the number of shares of Common
Stock covered by each option under the Plan that has not yet been exercised, and
the numerical limits of Sections 7 and 13.
(b) Dissolution or
Liquidation. In the event of the proposed dissolution or
liquidation of the Company, any Offering Period then in progress will be
shortened by setting a New Exercise Date, and will terminate immediately prior
to the consummation of such proposed dissolution or liquidation, unless provided
otherwise by the Administrator. The New Exercise Date will be before
the date of the Company’s proposed dissolution or liquidation. The
Administrator will notify each Participant in writing or electronically, at
least ten (10) business days prior to the New Exercise Date, that the Exercise
Date for the Participant’s option has been changed to the New Exercise Date and
that the Participant’s option will be exercised automatically on the New
Exercise Date, unless prior to such date the Participant has withdrawn from the
Offering Period as provided in Section 10 hereof.
(c) Merger or Change in
Control. In the event of a merger or Change in Control, each
outstanding option will be assumed or an equivalent option substituted by the
successor corporation or a Parent or Subsidiary of the successor
corporation. In the event that the successor corporation refuses to
assume or substitute for the option, the Offering Period with respect to which
such option relates will be shortened by setting a New Exercise Date on which
such Offering Period shall end. The New Exercise Date will occur
before the date of the Company’s proposed merger or Change in
Control. The Administrator will notify each Participant in writing or
electronically prior to the New Exercise Date, that the Exercise Date for the
Participant’s option has been changed to the New Exercise Date and that the
Participant’s option will be exercised automatically on the New Exercise Date,
unless prior to such date the Participant has withdrawn from the Offering Period
as provided in Section 10 hereof.
20. Amendment or
Termination.
(a) The
Administrator, in its sole discretion, may amend, suspend, or terminate the
Plan, or any part thereof, at any time and for any reason. If the
Plan is terminated, the Administrator, in its discretion, may elect to terminate
all outstanding Offering Periods either immediately or upon completion of the
purchase of shares of Common Stock on the next Exercise Date (which may be
sooner than originally scheduled, if determined by the Administrator in its
discretion), or may elect to permit Offering Periods to expire in accordance
with their terms (and subject to any adjustment pursuant to Section
19). If the Offering Periods are terminated prior to expiration, all
amounts then credited to Participants’ accounts that have not been
used to purchase shares of Common Stock will be returned to the Participants
(without interest thereon, except as otherwise required under local laws, as
further set forth in Section 12 hereof) as soon as administratively
practicable.
(b) Without
stockholder consent and without limiting Section 20(a), the Administrator will
be entitled to change the Purchase Periods or Offering Periods, designate
separate Offerings, limit the frequency and/or number of changes in the amount
withheld during an Offering Period, establish the exchange ratio applicable to
amounts withheld in a currency other than U.S. dollars, permit payroll
withholding in excess of the amount designated by a Participant in order to
adjust for delays or mistakes in the Company’s processing of properly completed
withholding elections, establish reasonable waiting and adjustment periods
and/or accounting and crediting procedures to ensure that amounts applied toward
the purchase of Common Stock for each Participant properly correspond with
Contribution amounts, and establish such other limitations or procedures as the
Administrator determines in its sole discretion advisable that are consistent
with the Plan.
(c) In
the event the Administrator determines that the ongoing operation of the Plan
may result in unfavorable financial accounting consequences, the Administrator
may, in its discretion and, to the extent necessary or desirable, modify, amend
or terminate the Plan to reduce or eliminate such accounting consequence
including, but not limited to:
(i)
amending the Plan to conform with the safe harbor definition under the Financial
Accounting Standards Board Accounting Standards Codification Topic 718 (or any
successor thereto), including with respect to an Offering Period underway at the
time;
(ii)
altering the Purchase Price for any Purchase Period or Offering Period including
a Purchase Period or Offering Period underway at the time of the change in
Purchase Price;
(iii)
shortening any Purchase Period or Offering Period by setting a New Exercise
Date, including a Purchase Period or Offering Period underway at the time of the
Administrator action;
(iv)
reducing the maximum percentage of Compensation a Participant may elect to set
aside as Contributions; and
(v)
reducing the maximum number of Shares a Participant may purchase during any
Purchase Period or Offering Period.
Such
modifications or amendments will not require stockholder approval or the consent
of any Plan Participants.
21. Notices. All
notices or other communications by a Participant to the Company under or in
connection with the Plan will be deemed to have been duly given when received in
the form and manner specified by the Company at the location, or by the person,
designated by the Company for the receipt thereof.
22. Conditions Upon Issuance of
Shares. Shares of Common Stock will not be issued with respect
to an option unless the exercise of such option and the issuance and delivery of
such shares pursuant thereto will comply with all applicable provisions of law,
domestic or foreign, including, without limitation, the Securities Act of 1933,
as amended, the Exchange Act, the rules and regulations promulgated thereunder,
and the requirements of any stock exchange upon which the shares may then be
listed, and will be further subject to the approval of counsel for the Company
with respect to such compliance.
As a
condition to the exercise of an option, the Company may require the person
exercising such option to represent and warrant at the time of any such exercise
that the shares are being purchased only for investment and without any present
intention to sell or distribute such shares if, in the opinion of counsel for
the Company, such a representation is required by any of the aforementioned
applicable provisions of law.
23. Code Section
409A. The Plan is exempt from the application of Code Section
409A. In furtherance of the foregoing and notwithstanding any
provision in the Plan to the contrary, if the Administrator determines that an
option granted under the Plan may be subject to Code Section 409A or that any
provision in the Plan would cause an option under the Plan to be subject to Code
Section 409A, the Administrator may amend the terms of the Plan and/or of an
outstanding option granted under the Plan, or take such other action the
Administrator determines is necessary or appropriate, in each case, without the
Participant’s consent, to exempt any outstanding option or future option that
may be granted under the Plan from or to allow any such options to comply with
Code Section 409A, but only to the extent any such amendments or action by the
Administrator would not violate Code Section 409A. Notwithstanding
the foregoing, the Company shall have no liability to a Participant or any other
party if the option to purchase Common Stock under the Plan that is intended to
be exempt from or compliant with Code Section 409A is not so exempt or compliant
or for any action taken by the Administrator with respect
thereto. The Company makes no representation that the option to
purchase Common Stock under the Plan is compliant with Code Section
409A.
24. Term of
Plan. The Plan will become effective upon the earlier to occur
of its adoption by the Board or its approval by the stockholders of the Company.
It will continue in effect for a term of twenty (20) years, unless sooner
terminated under Section 20.
25. Stockholder
Approval. The Plan will be subject to approval by the
stockholders of the Company within twelve (12) months after the date the Plan is
adopted by the Board. Such stockholder approval will be obtained in
the manner and to the degree required under Applicable Laws.
26. Governing Law. The
Plan shall be governed by, and construed in accordance with, the laws of the
State of California (except its choice-of-law provisions).
27. Severability. If
any provision of the Plan is or becomes or is deemed to be invalid, illegal, or
unenforceable for any reason in any jurisdiction or as to any Participant, such
invalidity, illegality or unenforceability shall not affect the remaining parts
of the Plan, and the Plan shall be construed and enforced as to such
jurisdiction or Participant as if the invalid, illegal or unenforceable
provision had not been included.
28. Automatic Transfer to Low
Price Offering Period. To the extent permitted by Applicable
Laws, if the Fair Market Value of the Common Stock on any Exercise Date in an
Offering Period is lower than the Fair Market Value of the Common Stock on the
Enrollment Date of such Offering Period, then all participants in such Offering
Period will be automatically withdrawn from such Offering Period immediately
after the exercise of their option on such Exercise Date and automatically
re-enrolled in the immediately following Offering Period as of the first day
thereof.