EMPLOYEE STOCK PURCHASE PLAN
Effective [EFFECTIVE DATE]
1. Purpose. The purpose of the [COMPANY] Employee Stock Purchase Plan is to provide employees of [COMPANY] with an opportunity to acquire a proprietary interest in the Company through the purchase of shares of common stock of the Company.
The Company's intention is that the Plan qualify as an "employee stock purchase plan" under Section 423 of the Internal Revenue Code. The terms of the Plan will therefore be interpreted in a manner consistent with the requirements of that section of the Code.
Capitalized terms used in this plan are defined in section 18 (Definitions).
2.1. Eligibility on Enrollment Date. Any Employee who is employed by the Company on a given Enrollment Date is eligible to participate in the Plan, subject to the requirements of this Plan.
2.2. Employees in Foreign Jurisdictions. Company employees who are citizens or residents of a non-U.S. jurisdiction may be excluded from participation in the Plan or an Offering if their participation is prohibited under the Laws of their home jurisdiction or if complying with those Laws would cause the Plan or an Offering to violate Section 423 of the Code.
2.3. Limitations on Participation. Despite any terms of the Plan to the contrary, no Employee will be granted an option under the Plan
(a) if, immediately after the grant, the Employee (or any other Person whose stock would be attributed to that Eligible Employee under Section 424(d) of the Code) would own capital stock of the Company or of any Parent or Subsidiary, or hold outstanding options to purchase such stock, possessing % or more of the total combined voting power or value of all classes of the capital of stock of the Company or of any Parent or Subsidiary of the Company, or
(b) if 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 that exceeds [$25,000] worth of stock (determined at the Fair Market Value of the stock at the time the option is granted) for each calendar year in which that option is outstanding at any time, as determined in accordance with Section 423 of the Code.
2.4. Changes to Definition of Eligible Employee. The Administrator may, before an Enrollment Date for all options to be granted on the Enrollment Date, determine (on a uniform and non-discriminatory basis) that the definition of "Eligible Employee" will or will not include an individual if he or she
(a) has not completed at least [two] years of service since his or her last hire date (or such lesser period of time as the Administrator may determine),
(b) customarily works not more than  hours per week (or such lesser period of time as the Administrator may determine),
(c) customarily works not more than [five] months per calendar year (or such lesser period of time as the Administrator may determine), or
(d) 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, but only if the exclusion is applied in connection with each Offering in an identical manner to all highly compensated individuals of the Employer whose Employees are participating in that Offering.
2.5. Definition of "Employee." In this agreement, "Employee" means any individual
(a) who is an employee of the Company for tax purposes, and
(b) whose customary employment with the Company is at least  hours per week for more than [five] months in any calendar year.
2.6. Definition of "Enrollment Date." In this agreement, "Enrollment Date" means the first Trading Day of each Offering Period.
2.7. Definition of "Parent." In this agreement, "Parent" means the Person that Controls the Company from time to time.
2.8. Definition of "Subsidiary." In this agreement, "Subsidiary" means any corporation that is Controlled by the Company.
3. Plan Participation. An Eligible Employee may participate in the Plan by
(a) submitting to the Company's stock administration office (or its designee), on or before a date determined by the Administrator before an applicable Enrollment Date, a properly completed subscription agreement authorizing Contributions in the form provided by the Administrator for that purpose, or
(b) following an electronic or other enrollment procedure determined by the Administrator.
4. Offering Periods
4.1. Series of Offering Periods. The Plan will be implemented by a series of offering periods, each being of [three] months' duration, beginning on the first day of each calendar quarter (each, an "Offering Period"), with new Offering Periods beginning on the first day of each calendar quarter, or at such other time as the Administrator may determine.
4.2. Changes in Duration or Frequency. The Administrator may change any of the duration, the start dates, and the frequency of the Offering Period of future offerings without stockholder approval if the change is announced before the scheduled beginning of the first Offering Period to be affected.
5. Payroll Deductions
5.1. Election of Payroll Deductions. At the time that an Eligible Employee enrolls in the Plan, he or she shall elect to have payroll deductions made on each payday during the Offering Period, or to make other Contributions to the extent permitted by the Administrator, in an amount not exceeding % of the Compensation that he or she receives on each payday during the Offering Period.
5.2. Payday on an Exercise Date. If a payday occurs on an Exercise Date, the Participant's payroll deductions made on that day will be applied to his or her account in the next Offering Period.
5.3. Contributions through Other Means. The Administrator may permit all Participants in a specified Offering to contribute amounts to the Plan by cash, check, or other payment means set forth in the subscription agreement before each Exercise Date of each Offering Period, but only if the Participant has not already had the maximum permitted amount withheld through payroll deductions during the Offering Period.
5.4. Effectiveness of Subscription Agreements. A Participant's subscription agreement will remain in effect for successive Offering Periods unless terminated as provided in section 11 (Withdrawal).
5.5. Beginning of Payroll Deduction. The Company shall begin payroll deductions for a Participant on the first payday following his or her Enrollment Date and will end them on the last payday before the Exercise Date of the Offering Period to which the Participant's authorization applies, unless the Participant terminates it sooner in accordance with section 11 (Withdrawal).
5.6. Participant Accounts. The Administrator shall maintain individual accounts for each Participant. The Company shall credit all Contributions made for a Participant to his or her account under the Plan. Payroll deductions will be made in whole percentages only. A Participant may not make any additional payments into his or her account.
5.7. Changes in Payroll Deductions. A Participant may discontinue his or her participation in the Plan as provided in section 11 (Withdrawal), but may not increase or decrease the rate of his or her payroll deductions during the Offering Period.
5.8. Changes to Plan Administration. The Administrator may
(a) limit the nature and/or number of Contribution rate changes that Participants may make during any Offering Period, and
(b) establish such other conditions or limitations as it deems appropriate.
5.9. Changes in Deduction Rate. Any change in payroll deduction rate made under this section 5 (Payroll Deductions) will be effective as of the first full payroll period following [five] business days after the date on which the Participant makes the change by, unless the Administrator elects to process a given change more quickly.
5.10. Compliance Requirements
(a) Section 423(b)(8) Compliance. Despite the other terms of this section 5 (Payroll Deductions), a Participant's Contributions may, to the extent necessary to comply with Section 423(b)(8) of the Code and section 2.03 (Limitations on Participation), be decreased to zero at any time during an Offering Period.
(b) Restarting Payroll Deductions. Subject to Section 423(b)(8) of the Code and section 2.03 (Limitations on Participation), Contributions will restart at the rate that the Participant originally elected effective as of the beginning of the first Offering Period scheduled to end in the following calendar year, unless the Participant terminates it in accordance with section 11 (Withdrawal).
5.11. Cash Contributions. Despite any other terms of the Plan, the Administrator may allow Eligible Employees to participate in the Plan via cash contributions instead of payroll deductions if
(a) payroll deductions are not permitted under applicable Law, and
(b) the Administrator determines that cash contributions are permissible under Section 423 of the Code.
5.12. Tax Withholding
(a) Participant Tax Responsibility. At the time a Participant exercises his or her option right under the Plan, in whole or in part, or some or all of the Company's Common Stock issued under the Plan is disposed of, or at any other time that a taxable event related to the Plan occurs, the Participant must make adequate provision for the Company's tax withholding obligations, if any, that arise upon the exercise of the option or the disposition of the Common Stock, as the case may be, or at any other time that a taxable event related to the Plan occurs.
(b) Tax Withholding. The Company may at any time withhold from the Participant's compensation the amount necessary for the Company to meet applicable withholding obligations (including any withholding required to make available to the Company any tax deductions or benefits attributable to the Participant's sale or early disposition of Common Stock). The Company may also make withholdings from the proceeds of the sale of Common Stock or any other method of withholding that it deems appropriate to the extent permitted by U.S. Treasury Regulation Section 1.423-2(f).
5.13. Use of Funds. The Company may use all payroll deductions that it receives or holds under this Plan for any corporate purpose. It will not be obligated to segregate these amounts, except under Offerings in which applicable local Law requires that Plan Contributions be segregated from the Company's general corporate funds or deposited with an independent third party for Participants in non-U.S. jurisdictions.
5.14. No Interest. No interest will accrue on a Participant's Contributions, except as may be required by applicable Law, as determined by the Company. If interest is so required by the Laws of a particular jurisdiction, it will apply to all Participants in the relevant Offering except to the extent otherwise permitted by U.S. Treasury Regulation Section 1.423-2(f).
5.15. Annual Reports. The Administrator shall provide statements of account to all participating Eligible Employees at least annually, disclosing the amounts of Contributions, the Purchase Price, the number of Shares purchased, and the remaining cash balance in their accounts, if any.
5.16. Definition of "Compensation." In this agreement, "Compensation" means all cash compensation reportable on Form W-2 (including base straight time gross earnings, sales commissions, payments for overtime, shift premiums, incentive compensation, incentive payments and bonuses, plus any amounts contributed by the Participant to any Company 401(k) Plan from compensation paid to the Participant by the Company), but excluding compensatory fringe benefit payments and special award or bonus payments that the Company classifies as excludable from compensation.
5.17. Definition of "Contribution." In this agreement, "Contribution" means the payroll deductions and other additional payments that the Company may permit a Participant to make in order to fund the exercise of options granted in connection with the Plan.
5.18. Definition of "Participant." In this agreement, "Participant" means an Eligible Employee who participates in the Plan.
6. Right to Purchase Shares
6.1. Grant of Purchase Right. On the first business day of each Offering Period of the Plan (the "Offering Date"), each Eligible Employee participating in the Offering Period will be granted the option to purchase on the Exercise Date during that Offering Period (at the applicable Purchase Price) up to a number of Shares determined by dividing the Eligible Employee's Contributions accumulated before that Exercise Date and retained in his or her account as of the Exercise Date by the applicable Exercise Price, but subject to the terms of sections 2.03 (Limitation on Participation) and 9 (Stock Subject to Plan).
6.2. Purchase Price. The purchase price of each Share sold in accordance with this Plan (the "Purchase Price") will be the lesser of
(a) % of the Fair Market Value of the share on the first day of the Offering Period, and
(b) % of the Fair Market Value of the share on the last day of the Offering Period.
6.3. Limitations on Purchase Right
(a) Limit Based on Fair Market Value. A Participant will not be entitled, under section 6.01 (Grant of Purchase Right), to purchase during each purchase period more than a number of shares determined by dividing $[STOCK REFERENCE PRICE] by the Fair Market Value of a share of the Company's Common Stock, subject to any adjustment under section 12 (Adjustments, Dissolution, Liquidation, Merger, or Change in Control) on the Enrollment Date.
(b) Other Limitations. The Participant's purchase will be subject to the limitations set forth in sections 2.03 (Limitations on Participation), 9 (Stock Subject to Plan) and 11.04 (Termination of Employment).
6.4. Acceptance of Option. The Eligible Employee may accept the grant of the option relating to an Offering Period by electing to participate in the Plan in accordance with the requirements of section 3 (Participation). Exercise of the option will occur as provided in section 7 (Exercise of Option), unless the Participant has withdrawn under section 11 (Withdrawal).
6.5. Changes to Number of Shares Offered. The Administrator may, for future Offering Periods, increase or decrease the maximum number of Shares that an Eligible Employee may purchase during each Offering Period.
6.6. Expiry of Option. The option will expire on the last day of the Offering Period.
6.7. Definition of "Fair Market Value." In this agreement, "Fair Market Value" means, as of a particular date, the value of Common Stock determined on that date as follows:
(a) If the Common Stock is listed on any established stock exchange or a national market system (including The Nasdaq Global Market or The Nasdaq Capital Market of The Nasdaq Stock Market), its Fair Market Value will be the closing sales price (or the closing bid, if no sales were reported) as quoted on the exchange or system for the last market trading day before the date of determination, as reported in The Wall Street Journal or such other source as the Board deems reliable.
(b) If the Common Stock is regularly quoted by a recognized securities dealer but its selling prices are not reported, its Fair Market Value will be the closing bid and asked prices for the Common Stock before the date of determination, as reported in The Wall Street Journal or such other source as the Board deems reliable.
(c) In the absence of an established market for the Common Stock, the Fair Market Value will be determined in good faith by the Board.
7. Exercise of Option
7.1. Purchase of Shares
(a) Automatic Purchase. Unless a Participant withdraws from the Plan as provided in section 11 (Withdrawal), his or her option for the purchase of Shares will be exercised automatically on the last Trading Day of each Offering Period (each, an "Exercise Date"), and the maximum number of full shares subject to the option will be purchased at the applicable Purchase Price with the accumulated payroll deductions from his or her account.
(b) No Fractional Shares. No fractional Shares will be purchased. Any payroll deductions accumulated in a Participant's account that are not sufficient to purchase a full share will be retained in the Participant's account for the subsequent Offering Period, subject to earlier withdrawal as provided in section 11 (Withdrawal).
(c) Residual Funds. Any other funds left over in a Participant's account after the Exercise Date will be returned to the Participant.
(d) Exclusivity of Rights. A Participant's option to purchase shares under this Plan is exercisable, during his or her lifetime, only by the Participant.
7.2. Pro Rata Allocation. If the Administrator determines that, on a given Exercise Date, the number of Shares in connection with which options are to be exercised may exceed
(a) the number of Shares that were available for sale under the Plan on the Enrollment Date of the applicable Offering Period, or
(b) the number of Shares available for sale under the Plan on that Exercise Date,
the Administrator may require the Company to make a pro rata allocation of the Shares available for purchase on that Enrollment Date or Exercise Date, as applicable, in as uniform a manner as will be practicable and as the Administrator determines to be equitable among all Participants exercising options to purchase Common Stock on that Exercise Date, and either
(i) continue all Offering Periods then in effect, or
(ii) terminate any Offering Periods then in effect in accordance with section 17 (Amendment or Termination).
7.3. Allocation of Shares. The Company may make a pro rata allocation of the shares available on the Enrollment Date of any applicable Offering Period in accordance section 7.02 (Pro Rata Allocation), despite any authorization of additional shares for issuance under the Plan by the Company's stockholders after the Enrollment Date.
7.4. 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 that Offering Period, then all Participants in the Offering Period will be automatically withdrawn from the Offering Period immediately after the exercise of their option on that Exercise Date and automatically re-enrolled in the immediately following Offering Period as of the first day of that Offering Period.
(a) Delivery after Exercise Date. As soon as reasonably practicable after each Exercise Date on which a purchase of shares of Common Stock occurs, the Company shall arrange to deliver to each Participant the shares purchased upon exercise of Participant's option in a form determined by, and in accordance with rules established by, the Administrator. The Company may
(i) use electronic or automated methods of share transfer, and
(ii) permit or require that the purchased shares be deposited directly with a broker designated by the Company or with one of its designated agents.
7.6. Delivery to Broker. The Company may
(a) require that the purchased shares be retained with designated broker or agent for a designated period of time, and
(b) establish other procedures to permit tracking of disqualifying dispositions of those shares.
7.7. Definition of "Shares." In this agreement, "Shares" means shares of the Company's Common Stock, having no par value.
8. Stock Subject to Plan
8.1. Maximum Shares. Subject to adjustment upon changes in capitalization of the Company as provided in section 12 (Adjustments, Dissolution, Liquidation, Merger, or Change in Control), the maximum number of shares of Common Stock that will be made available for sale under the Plan will be [MAXIMUM NUMBER OF SHARES] shares of Common Stock.
8.2. Rights as a Shareholder. Until the shares are issued (as evidenced by the appropriate entry on the books of the Company or its duly authorized transfer agent) and purchased and delivered to the Participant in accordance with section 8 (Delivery), a Participant
(a) will only have the rights of an unsecured creditor in connection with those shares, and
(b) will have no right to vote, receive dividends, or exercise any other rights as a stockholder in connection with those shares.
8.3. Registration of Shares. The Company shall register the shares that are delivered to a Participant under the Plan in the name of the Participant or, at the Participant's direction, in the name of the Participant and his or her spouse.
9.1. Payment upon Death. Upon a Participant's death, the Administrator shall pay the amount credited to the Participant Account to the beneficiary designated by the Participant for this purpose on the prescribed form or, if none, to the Participant's estate. The beneficiary designation form will be valid only if it was filed with the Company in the prescribed manner and at the prescribed location before the Participant's death.
9.2. Designation of Beneficiary
(a) Right to Designate
(i) Shares. A Participant may file a designation of a beneficiary who is to receive any shares of Common Stock and any cash from the Participant's account under the Plan in the event of the Participant's death after an Exercise Date on which the option is exercised but before delivery of the shares and cash.
(ii) Cash. A Participant may also file a designation of a beneficiary who is to receive any cash from the Participant's account under the Plan in the event of his or her death before exercise of the option.
(iii) Spousal Consent. If a Participant is married and the designated beneficiary is not the spouse, spousal consent is required for the designation to be effective.
(b) Change of Beneficiary
(i) Change Procedure. A Participant may change his or her beneficiary designation at any time by Notice in a form determined by the Administrator.
(ii) Death in Absence of Beneficiary. If a Participant dies without a validly designated beneficiary who is living at the time of the Participant's death, the Company shall deliver the purchased shares and any cash to the executor or administrator of the Participant's estate, or if no executor or administrator has been appointed (to the knowledge of the Company), the Company may deliver the shares and any cash to his or her 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) Form of Beneficiary Designation. Beneficiary designations must be made in the form and manner that the Administrator establishes from time to time. Despite the other terms of this section 10 (Beneficiaries), the Company or the Administrator may decide not to permit beneficiary designations in non-U.S. jurisdictions to the extent permitted by U.S. Treasury Regulation Section 1.423-2(f).
10.1. Right of Withdrawal. A Participant may, by giving Notice to the Company, withdraw all, but not less than all, of the Contributions credited to his or her account under the Plan at any time before each Purchase Date.
10.2. Termination of Option for Current Period. All of the Contributions credited to the Participant's account will be paid to the Participant promptly after receipt of the Notice of withdrawal. The Participant's option for the current period will, in that case, be automatically terminated, and no further Contributions for the purchase of shares will be made during the applicable Offering Period.
10.3. No Effect upon Eligibility. A Participant's withdrawal from an Offering Period will not affect his or her eligibility to participate in any similar plan that the Company may subsequently adopt or in succeeding Offering Periods that begin after the termination of the Offering Period from which the Participant withdraws.
10.4. Deemed Withdrawal. Upon
(a) a Participant's ceasing to be an Eligible Employee for any reason, or
(b) an Employee failing to remain as an employee of the Company for at least 20 hours per week during the Offering Period in which he or she is a Participant,
the Participant will be deemed to have elected to withdraw from the Plan and the payroll deductions credited to his or her account during the Offering Period but not yet used to purchase shares under the Plan will be returned to the Participant or, in the event of his or her death, to the Person or Persons entitled those funds under section 10.2 (Designation of Beneficiary), and the Participant's option will be automatically terminated.
10.5. Leaves of Absence
(a) Approved Leave. If the Participant goes on a military leave, sick leave, or another bona fide leave of absence and the Company approved the leave in writing, his or her employment with the Company will not be deemed to terminate.
(b) Continuing Employment. For purposes of the Plan, the Participant's employment relationship will be treated as continuing intact while he or she is on a leave that has approved by the Company and that meets the requirements of Treasury Regulation Section 1.421-1(h)(2).
(c) Deemed Termination. The Participant's employment will be deemed to terminate  days after the Participant goes on any other leave, unless a contract or statute guarantees the Participant's right to return to work. In any event, the Participant's employment will be deemed to terminate when the guaranteed leave period ends, unless the Participant immediately returns to work.
10.6. Future Participation. 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 subsequently be adopted by the Company or in succeeding Offering Periods that commence after the termination of the Offering Period from which the Participant withdraws.
10.7. Re-Enrollment After Withdrawal
(a) Re-Enrollment. A former Participant who has withdrawn from the Plan will not be a Participant under the Plan until the former Participant re-enrolls in the Plan under section 5 (Payroll Deductions).
(b) Effective Date of Re-Enrollment. Re-enrollment may be effective only at the commencement of an Offering Period.
11. Adjustments, Dissolution, Liquidation, Merger, or Change in Control
11.1. Adjustments. If any Adjustment occurs, the Administrator, in order to prevent the dilution or enlargement of the benefits or potential benefits intended to be made available under the Plan, shall, in whatever manner it deems equitable, adjust
(a) the number and class of Common Stock that may be delivered under the Plan,
(b) 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
(c) the numerical limits of sections 2.03 (Limitations on Participation) and 9 (Stock Subject to Plan).
11.2. Dissolution or Liquidation
(a) Effect of Proposed 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 the Administrator setting a new Exercise Date, and will terminate immediately before the consummation of the proposed dissolution or liquidation, unless the Administrator provides otherwise.
(b) New Exercise Date. The Administrator will set the new Exercise Date (the "New Exercise Date") at a date before the date of the Company's proposed dissolution or liquidation.
(c) Notification of New Exercise Date. The Administrator shall give Notice to each Participant, at least  business days before the New Exercise Date, that
(i) the Exercise Date for the Participant's option has been changed to the New Exercise Date, and
(ii) the Participant's option will be exercised automatically on the New Exercise Date, unless before the New Exercise Date the Participant withdraws from the Offering Period as provided in section 11 (Withdrawal).
11.3. Merger or Change in Control
(a) Effect of Merger or Change in Control. In the event of a merger or Change in Control of the Company, the successor corporation or a Parent or Subsidiary of the successor corporation shall either assume each outstanding option or substitute an equivalent option.
(b) Effect of Successor Corporation Refusing to Assume or Substitute Option. If the successor corporation (or Parent or Subsidiary of the successor corporation) refuses to assume or substitute for the option, the Offering Period in connection with which such option relates will be shortened by setting a New Exercise Date on which the Offering Period will end.
(c) New Exercise Date. In that case, the New Exercise Date will occur before the date of the Company's proposed merger or Change in Control.
(d) Notification of New Exercise Date. The Administrator shall give Notice to each Participant, at least  business days before the New Exercise Date, that
(i) the Exercise Date for the Participant's option has been changed to the New Exercise Date, and
(ii) the Participant's option will be exercised automatically on the New Exercise Date, unless before the New Exercise Date the Participant withdraws from the Offering Period as provided in section 11 (Withdrawal).
11.4. Clarifications of Definition of Change in Control
(a) Effect of Code Section 409A. A transaction referred to in this section 12 (Adjustments, Dissolution, Liquidation, Merger, or Change in Control) will not be deemed to be a "Change in Control" unless the transaction qualifies as a change in control event within the meaning of Code Section 409A. In particular, a transaction will not constitute a Change in Control if its sole purpose is
(i) to change the state of the Company's incorporation, or
(ii) to create a holding company that will be owned in substantially the same proportions by the Persons who held the Company's securities immediately beforehand.
(b) Acting as a Group. For purposes of the definition of "Change in Control," two or more 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 any similar business transaction with the Company.
(c) Acquisition of Additional Control. For purposes of paragraph (b) (Change in Effective Control of the Company) of the definition of "Change in Control," if any Acquiror 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.
11.5. Definition of "Adjustment." In this agreement, "Adjustment" means a dividend or any other form of 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 any other change in the Company's corporate structure affecting the Common Stock.
11.6. Definition of "Change in Control." In this agreement, "Change in Control" means
(a) any sale, transfer, exchange, or other disposition of ownership interests in, or any merger, acquisition, or other reorganization of, the Company that results in a change in the Control of the Company that is currently exercised by one or more Persons, or
(b) any sale, transfer, or other disposition of all or substantially all of the Company's assets.
11.7. Definition of "Control." In this agreement, "Control" means , for a Person, the ownership interest in an entity that has the practical effect of giving that Person, either alone or with others, the majority voting interest in that entity, and the terms “Controlled” and “Controlling” have comparable meanings.
12. Conditions Upon Issuance of Shares
12.1. Compliance with Applicable Laws. The Administrator shall not issue shares in connection with an option unless the exercise of the option and the issuance and delivery of the shares under the option
(a) complies comply with all Laws and the requirements of any stock exchange upon which the shares may then be listed, and
(b) has been approved by the Company's counsel as being in compliance.
12.2. No Intention to Sell. As a condition to the exercise of an option, the Company may require the Person exercising the option to represent and warrant at the time of exercise that the shares are being purchased only for investment and without any present intention to sell or distribute them if, in the opinion of the Company's counsel, such a representation is required by any applicable Law.
13. Plan Administration
13.1. Supervision and Administration. The Plan will be supervised by the Compensation Committee of the Board or its authorized delegate (the "Committee") and administered by the Administrator. The Administrator, if otherwise an Eligible Employee, is not ineligible to participate in the Plan simply due to his or her role as Administrator.
13.2. Compliance with Laws. The Committee and the Administrator shall comply with all applicable Laws.
13.3. Administrator's General Authority. The Administrator has full and exclusive discretionary authority to
(a) construe, interpret, and apply the terms of the Plan,
(b) designate separate Offerings under the Plan,
(c) determine eligibility,
(d) adjudicate all disputed claims filed under the Plan, and
(e) establish any procedures that it deems necessary for the administration of the Plan.
13.4. Specific Powers. In carrying out its duties, the Administrator may do any of the following:
(a) establish bank or trust accounts to hold Contributions,
(b) adopt rules and procedures regarding
(i) Employees' eligibility to participate in the Plan,
(ii) the definition of Compensation,
(iii) the payment of interest,
(iv) the conversion of local currency,
(v) the payment of payroll tax,
(vi) beneficiary designation requirements,
(vii) withholding procedures,
(viii) the handling of stock certificates that vary with applicable local requirements, and
(ix) the making and handling of Contributions to the Plan (including in forms other than payroll deductions), and
(c) adopt any 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.
13.5. Binding Effect of Administrator's Decisions. Every finding, decision, and determination that the Administrator makes will, to the full extent permitted by Law, be final and binding upon all parties.
13.6. Exclusion of Liability. Neither the Administrator nor any member of the Board or the Committee will be liable for any action or determination made in good faith in connection with the Plan or any option granted under it.
13.7. Indemnification. The Company shall indemnify the Administrator and each member of the Board and the Committee to the fullest extent permitted by applicable Law against all claims, liability, and expenses (including legal fees) arising from any third party claim or proceeding brought against any of them in connection with the performance of their duties under this Plan, providing that their actions did not constitute gross negligence or willful misconduct.
13.8. Administration Costs. The Company shall bear all the costs of the administration of the Plan.
14.1. Committee Procedures
(a) Member Appointment. The Board may from time to time appoint members of the Committee in substitution for or in addition to members previously appointed and may fill any vacancies.
(b) Selection of Chair/Meetings. The Committee may select one of its members as its chair, shall hold its meetings at such times and places as it deems advisable, and may hold meetings by telephone.
(c) Majority Rule. All determinations of the Committee will be made by a majority of its members. A decision or determination reduced to writing and signed by a majority of the members of the Committee will be as fully effective as if it had been made by a majority vote at a meeting duly called and held.
(d) Appointment of Secretary. The Committee may appoint a secretary and shall adopt the rules and regulations for the conduct of its business that it deems advisable.
14.2. Authority of Committee
(a) Power of Interpretation. The Committee shall interpret the Plan and make all other policy decisions relating to the operation of the Plan.
(b) Adoption of Rules. The Committee may adopt such rules, guidelines, and forms as it deems appropriate to implement the Plan.
14.3. Committee Compensation. Unless otherwise determined by the Board of Directors, the members of the Committee will serve without additional compensation for their services.
15. Term of Plan
15.1. Stockholder Approval. The Company's stockholders must approve the Plan within  months after the date that it is adopted by the Board. Stockholder approval will be obtained in the manner and to the degree required under applicable Laws.
15.2. Effective Date of Plan. The Plan will become effective upon the earlier to occur of its adoption by the Board and its approval by the stockholders of the Company. It will continue in effect for a term of  years, unless sooner terminated under section 17 (Amendment or Termination).
16. Amendment or Termination
16.1. Administrator's Right to Amend, Suspend, or Terminate Plan. The Administrator may amend, suspend, or terminate all or any part of the Plan at any time and for any reason.
16.2. Effect of Termination. If the Plan is terminated, the Administrator may elect to
(a) 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
(b) permit Offering Periods to expire in accordance with their terms (and subject to any adjustment in connection with section 12 (Adjustments, Dissolution, Liquidation, Merger or Change in Control).
16.3. Consequences of Early Termination of Offering Period. If the Offering Periods are terminated before their expiry, the Administrator shall return to the Participants, as soon as administratively practicable, all amounts then credited to their accounts that have not been used to purchase shares of Common Stock, without interest, except as otherwise required under applicable Laws, as contemplated by section 5.15 (No Interest).
16.4. Termination. This Plan and all rights of Employees under an offering under this Plan will terminate on
(a) the date that participating Employees' accumulated payroll deductions in connection with section 5 (Payroll Deductions) are sufficient to purchase a number of shares equal to or greater than the number of shares remaining available for purchase and all such available shares have been purchased, and if the number of shares so purchasable is greater than the shares remaining available, the Administrator shall allocate the available shares among the participating Employees in whatever manner it deems equitable, or
(b) at any time at the discretion of the Board.
16.5. Refund of Deductions. Upon termination of the Plan, the Administrator shall promptly refund all accumulated payroll deductions of participating employees not applied to the purchase of shares under this Plan.
16.6. Changes without Stockholder Consent. Without stockholder consent and without regard to whether any Participant rights may be considered to have been adversely affected, the Administrator may
(a) change the Offering Periods,
(b) limit the frequency or number of changes in the amount withheld during an Offering Period,
(c) establish the exchange ratio applicable to amounts withheld in a currency other than U.S. dollars,
(d) 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,
(e) establish reasonable waiting and adjustment periods and accounting and crediting procedures to ensure that amounts applied toward the purchase of Common Stock for each Participant properly correspond with amounts withheld from the Participant's Compensation, and
(f) establish any other limitations or procedures that are consistent with the Plan and that it considers advisable.
16.7. Changes for Financial Accounting. If the Administrator determines that the ongoing operation of the Plan may result in unfavorable financial accounting consequences, the Administrator may modify, amend, or terminate the Plan to reduce or eliminate such accounting consequence, which may include any of the following:
(a) amending the Plan to conform with the safe harbor definition under the Financial Accounting Standards Board Accounting Standards Codification Topic 718, or any successor standards (including in connection with an Offering Period underway at the time),
(b) altering the Purchase Price for any Offering Period (including an Offering Period underway at the time of the change in the Purchase Price),
(c) shortening any Offering Period by setting a New Exercise Date (including an Offering Period underway at the time of the Administrator's action),
(d) reducing the maximum percentage of Compensation a Participant may elect to set aside as Contributions, and
(e) reducing the maximum number of Shares a Participant may purchase during any Offering Period.
16.8. No Approval Required. The modifications or amendments referred to in section 17.07 (Changes for Financial Accounting) will not require stockholder approval or the consent of any Participants.
17. Rights and Remedies
17.1. No Rights as an Employee. Nothing in the Plan or in any legal document signed in connection with the Plan
(a) confers upon any Employee any right to continue in the employ of the Company or any of its Subsidiaries, or
(b) affects the right of the Company or any of its Subsidiaries to terminate the employment of any Employee, with or without cause.
17.2. Equal Rights and Privileges
(a) Equal Rights and Privileges. All Eligible Employees will have equal rights and privileges under the Plan so that the Plan qualifies as an "employee stock purchase plan" within the meaning of Section 423 of the Code.
(b) Reformation of Plan to Conform to Section 423 of Code. Any term of the Plan that is inconsistent with Section 423 of the Code will, without further act or amendment by the Company, the Board, or the Administrator, be reformed to comply with the equal rights and privileges requirements of Section 423.
17.3. Code Section 409A
(a) Plan Exempt from Application of Section 409A. The Plan is exempt from the application of Code Section 409A.
(b) Amendment to Conform to Section 409A. Despite any term 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 term of 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 of any outstanding option granted under the Plan, or take such other action it considers necessary or appropriate, 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.
(c) Limitation of Liability. The Company will have no liability to a Participant or any other party
(i) 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
(ii) for any related action that the Administrator takes.
(d) No Representation of Compliance. The Company makes no representation that the option to purchase Common Stock under the Plan is compliant with Code Section 409A.
(a) No Right of Assignment or Transfer. No Participant may assign, transfer, pledge, or otherwise dispose of any Contributions credited to his or her account or any rights in connection with the exercise of an option or a right to receive shares under the Plan, other than a disposition by will, under the laws of descent and distribution, or as provided in section 10.02 (Designation of Beneficiary).
(b) Attempt to Assign or Transfer. Any attempt to assign, transfer, pledge, or otherwise dispose of a Participant's rights will be ineffective, but the Company may treat such an act as an election to withdraw funds in accordance with section 11 (Withdrawal).
18.1. "Adjustment" has the meaning given to that term in section 11.5 (Definition of "Adjustment").
18.2. "Administrator" means an officer or employee of the Company to whom the Committee has delegated the authority to administer the Plan, subject to the rules and interpretive determinations made by the Committee.
18.3. "Board" mean the Company's Board of Directors.
18.4. "Change in Control" has the meaning given to that term in section 11.6 (Definition of "Adjustment").
18.5. "Code" means the Internal Revenue Code of 1986, as amended.
18.6. "Common Stock" means the Company's common stock.
18.7. "Committee" has the meaning given to that term in section 13.1 (Supervision and Administration).
18.8. "Company" means [COMPANY NAME] and any any Subsidiary that the Board has designated as eligible to participate in the Plan.
18.9. "Compensation" has the meaning given to that term in section 5.16 (Definition of "Compensation").
18.10."Contribution" has the meaning given to that term in section 5.17 (Definition of "Contribution").
18.11. "Eligible Employee" means an Employee who is eligible to participate in the Plan in accordance with section 2 (Eligibility).
18.12."Employee" has the meaning given to that term in section 2.5 (Definition of "Employee").
18.13. "Enrollment Date" has the meaning given to that term in section 2.6 (Definition of "Enrollment Date").
18.14. "Exercise Date" has the meaning given to that term in paragraph (a) (Automatic Transfer) of section 7.1 (Purchase of Shares).
18.15."Fair Market Value" has the meaning given to that term in section 6.7 (Definition of "Fair Market Value").
18.16. "Governmental Authority" means
(a) the government of the United States or any other nation, or any of its or their geographical or political units or subdivisions, and
(b) any body, agency, tribunal, arbitrator, court, authority, or other entity that exercises executive, legislative, judicial, taxing, regulatory, or administrative powers or functions of, or relating to, government.
18.17. "Law" means
(a) any law (including the common law), statute, by-law, rule, regulation, order, ordinance, treaty, decree, judgment, and
(b) any official directive, protocol, code, guideline, notice, approval, order, policy, or other requirement of any Governmental Authority having the force of law.
18.18. "New Exercise Date" has the meaning given to that term in paragraph (b) (New Exercise Date) of section 11.2 (Dissolution or Liquidation).
18.19. "Notice" means any notice, request, direction, or other document that a party can or must make or give under this Plan.
18.20. "Offering Date" has the meaning given to that term in section section 6.1 (Grant of Purchase Right).
18.21. "Offering Period" has the meaning given to that term in section 4.1 (Series of Offering Periods).
18.22. "Parent" has the meaning given to that term in section 2.7 (Definition of "Parent").
18.23. "Participant" has the meaning given to that term in section 5.18 (Definition of "Participant").
18.24. "Person" includes
(a) any corporation, company, limited liability company, partnership, Governmental Authority, joint venture, fund, trust, association, syndicate, organization, or other entity or group of persons, whether incorporated or not, and
(b) any individual.
18.25. "Purchase Price" means the purchase price determined in accordance with section 6.2 (Purchase Price).
18.26. "Selected Courts" has the meaning given to that term in paragraph (b) (Definition of "Selected Courts") of section 19.7 (Consent to Jurisdiction).
18.27. "Shares" has the meaning given to that term in section 7.7 (Definition of "Shares").
18.28. "Subsidiary" has the meaning given to that term in section 2.8 (Definition of "Subsidiary").
18.29. "Trading Day" means a day on which national stock exchanges in the United States and the Nasdaq System are open for trading.
19.1. Binding Effect. The Plan benefits and binds each Employee participating in the Plan and his or her heirs, successors, and permitted assigns (including his or her estate, the executors, administrators, or trustees of his or her estate, and any receiver, trustee in bankruptcy, or representative of the Employee's creditors).
(a) Form of Notice. All notices and other communications made in connection with this Plan must be in writing.
(b) Method of Notice. Notices must be given by (i) personal delivery, (ii) a nationally-recognized, next-day courier service, or (iii) first-class registered or certified mail, postage prepaid to the party's address specified in the Plan.
(c) Receipt of Notice. A Notice given in accordance with this Plan will be effective upon receipt by the party to which it is given or, if mailed, upon the earlier of receipt and the fifth business day following mailing.
19.3. Severability. If any part of this Plan is declared unenforceable or invalid, the remainder will continue to be valid and enforceable.
19.4. Governing Law. This Plan will be governed by and construed in accordance with the laws of the State of [GOVERNING LAW STATE], without regard to its conflict of laws rules.
19.5. Dispute Resolution
(a) Arbitration. Any dispute or controversy arising under or in connection with this Plan will be settled exclusively by arbitration in [STATE], in accordance with the rules of the American Arbitration Association then in effect by [NUMBER OF ARBITRATORS] arbitrator(s).
(b) No Punitive Damages. The arbitrator(s) will not have the power to award punitive damages.
(c) Judgment. The successful party may enter the arbitral judgment in any court having jurisdiction.
19.6. Waiver of Jury Trial. Each Employee irrevocably waives his or her rights to trial by jury in any action or proceeding arising out of or relating to this Plan.
19.7. Consent to Jurisdiction.
(a) Jurisdiction of Selected Courts. The parties hereby irrevocably and unconditionally
(i) consent to submit to the exclusive jurisdiction of the Selected Courts for any action or proceeding arising out of or relating to this Plan, and agree not to commence any action or proceeding relating to this Plan except in the Selected Courts, although a party may commence an action or proceeding in a court other than a Selected Court but only for the purpose of enforcing an order or judgment issued by one of the Selected Courts,
(ii) consent to service of any process or other document in any action or proceeding made by registered first-class mail, postage prepaid, return receipt requested or by nationally recognized courier guaranteeing overnight delivery and agree that service of the process or other document will be effective service for any action or proceeding brought against it in a Selected Court, although this does not affect either party's right to serve process in any other manner permitted by law,
(iii) waive any objection to the laying of venue of any action or proceeding arising out of this Plan in the Selected Courts, and
(iv) waive and agree not to plead or claim in any Selected Court that an action or proceeding brought in any Selected Court has been brought in an inconvenient forum.
(b) Definition of "Selected Courts." In this agreement, "Selected Courts" means, collectively, the federal and state courts located in the State of [SELECTED STATE] in [SELECTED COUNTY] County.
(a) Currency. Unless otherwise specified, all dollar amounts expressed in this Plan refer to American currency.
(b) Statutes, etc. Unless specified otherwise, any reference in this Plan to a statute includes the rules, regulations, and policies made under that statute and any provision that amends, supplements, supersedes, or replaces that statute or those rules or policies.
(c) Number and Gender. Unless the context requires otherwise, words importing the singular number include the plural and vice versa, words importing gender include all genders.
(d) Headings. The headings used in this Plan and its division into sections and other subdivisions do not affect its interpretation.
(e) Internal References. References in this Plan to sections and other subdivisions are to those parts of this Plan.