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Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
FORM 10-Q
(Mark One)
☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2021
OR
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Transition Period from              to
Commission File Number: 001-35469
VOCERA COMMUNICATIONS, INC.
(Exact name of registrant as specified in its charter)
Delaware 94-3354663
(State or other jurisdiction of
incorporation or organization) 		(I.R.S. Employer
Identification No.)
Vocera Communications, Inc.
525 Race Street
San Jose, CA 95126
(408) 882-5100
(Address and telephone number of principal executive offices)
_____________________________________________
Not Applicable
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
(Title of each class) (Trading Symbol) (Name of each exchange on which registered)
Common Stock, $0.0003 par value VCRA New York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ☒  No  ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  ☒    No  ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See definition of “large accelerated filer,” “accelerated filer,” “small reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer
☐
Accelerated filer ☒
Non-accelerated filer
☐
Smaller reporting company
☐
Emerging growth company
☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ☐    No  ☒
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
Class Outstanding as of August 2, 2021
Common Stock, $0.0003 par value per share
34,714,806

Table of Contents
VOCERA COMMUNICATIONS, INC.
QUARTERLY REPORT ON FORM 10-Q
FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2021
INDEX
PART I: FINANCIAL INFORMATION
Page No.
Item 1.
3
3
4
5
6
7
9
Item 2.
27
Item 3.
34
Item 4.
35
PART II: OTHER INFORMATION
Item 1.
36
Item 1A.
36
Item 2.
62
Item 3.
62
Item 4.
62
Item 5.
62
Item 6.
64

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Table of Contents
PART I: FINANCIAL INFORMATION

Item 1.Financial Statements (Unaudited)


Vocera Communications, Inc.
Condensed Consolidated Balance Sheets
(In Thousands, Except Share and Par Amounts)
(Unaudited)
June 30, 2021 December 31, 2020
Assets
Current assets
Cash and cash equivalents $ 40,480  $ 34,976 
Short-term investments 251,428  195,227 
Accounts receivable, net of allowance 36,596  45,653 
Other receivables 6,473  6,170 
Inventories 8,602  10,159 
Prepaid expenses and other current assets 7,208  6,317 
Total current assets 350,787  298,502 
Property and equipment, net 6,848  8,103 
Intangible assets, net 22,906  12,788 
Goodwill 94,846  69,168 
Deferred commissions 14,854  12,293 
Other long-term assets 7,876  5,967 
Total assets $ 498,117  $ 406,821 
Liabilities and stockholders' equity
Current liabilities
Accounts payable $ 3,219  $ 3,127 
Accrued payroll and other current liabilities 24,757  23,195 
Deferred revenue, current 52,065  54,785 
Total current liabilities 80,041  81,107 
Deferred revenue, long-term 10,490  9,948 
Convertible senior notes, net 258,285  124,376 
Other long-term liabilities 7,396  10,374 
Total liabilities 356,212  225,805 
Stockholders' equity
Preferred stock, $0.0003 par value - 5,000,000 shares authorized as of June 30, 2021 and December 31, 2020; zero shares issued and outstanding
—  — 
Common stock, $0.0003 par value - 100,000,000 shares authorized as of June 30, 2021 and December 31, 2020; 34,692,364 and 32,692,561 shares issued and outstanding as of June 30, 2021 and December 31, 2020, respectively
10  10 
Additional paid-in capital 296,467  340,515 
Accumulated other comprehensive income 107  473 
Accumulated deficit (154,679) (159,982)
Total stockholders’ equity 141,905  181,016 
Total liabilities and stockholders’ equity $ 498,117  $ 406,821 

The accompanying notes are an integral part of these condensed consolidated financial statements.
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Vocera Communications, Inc.
Condensed Consolidated Statements of Operations
(In Thousands, Except Per Share Amounts)
(Unaudited)
Three months ended June 30, Six months ended June 30,
2021 2020 2021 2020
Revenue
Product $ 28,344  $ 23,951  $ 50,952  $ 41,801 
Service 27,836  23,396  53,896  46,219 
Total revenue 56,180  47,347  104,848  88,020 
Cost of revenue
Product 7,541  7,710  14,497  14,074 
Service 12,383  9,694  23,210  20,217 
Total cost of revenue 19,924  17,404  37,707  34,291 
Gross profit 36,256  29,943  67,141  53,729 
Operating expenses
Research and development 12,006  9,349  22,356  18,381 
Sales and marketing 18,425  15,998  36,095  32,961 
General and administrative 9,064  6,923  16,339  13,314 
Total operating expenses 39,495  32,270  74,790  64,656 
Loss from operations (3,239) (2,327) (7,649) (10,927)
Interest income 295  913  641  2,033 
Interest expense (794) (2,308) (1,571) (4,582)
Other income (expense), net 1,544  210  (1,002) (381)
Loss before income taxes (2,194) (3,512) (9,581) (13,857)
(Provision for) benefit from income taxes (88) 44  (334) (81)
Net loss $ (2,282) $ (3,468) $ (9,915) $ (13,938)
Loss per share
     Basic $ (0.07) $ (0.11) $ (0.29) $ (0.44)
     Diluted $ (0.07) $ (0.11) $ (0.29) $ (0.44)
Weighted average shares used to compute net loss per share
     Basic 34,485  32,152  33,790  31,945 
     Diluted 34,485  32,152  33,790  31,945 

The accompanying notes are an integral part of these condensed consolidated financial statements.

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Table of Contents
Vocera Communications, Inc.
Condensed Consolidated Statements of Comprehensive Loss
(In Thousands)
(Unaudited)

Three months ended June 30, Six months ended June 30,
2021 2020 2021 2020
Net loss $ (2,282) $ (3,468) $ (9,915) $ (13,938)
Other comprehensive loss, net:
Change in unrealized gain (loss) on investments, net of tax (132) 1,806  (366) 850 
Comprehensive loss $ (2,414) $ (1,662) $ (10,281) $ (13,088)

The accompanying notes are an integral part of these condensed consolidated financial statements.
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Vocera Communications, Inc.
Condensed Consolidated Statements of Stockholders' Equity
(In Thousands, Except Share Amounts)
(Unaudited)
Common stock Additional
paid-in
capital 		Accum. other
comprehensive
income (loss) 		Accumulated
deficit 		Total
stockholders’
equity
Shares Amount
Balance at January 1, 2020 31,660,709  $ 9  $ 313,963  $ 179  $ (150,326) $ 163,825 
Exercise of stock options 77,909  —  731  —  —  731 
RSUs released net of shares withheld for tax settlement 64,161  —  (864) —  —  (864)
Employee stock-based compensation expense —  —  5,841  —  —  5,841 
Net loss —  —  —  —  (10,470) (10,470)
Other comprehensive loss —  —  —  (956) —  (956)
Balance at March 31, 2020 31,802,779  9  319,671  (777) (160,796) 158,107 
Exercise of stock options 46,508  —  594  —  594 
RSUs released net of shares withheld for tax settlement 372,639  —  (4,716) —  (4,716)
Common stock issued under employee stock purchase plan 126,046  —  1,966  —  1,966 
Employee stock-based compensation expense —  —  6,366  —  6,366 
Net loss —  —  —  —  (3,468) (3,468)
Other comprehensive gain —  —  —  1,806  1,806 
Balance at June 30, 2020 32,347,972  $ 9  $ 323,881  $ 1,029  $ (164,264) $ 160,655 
Balance at January 1, 2021 32,692,561  $ 10  $ 340,515  $ 473  $ (159,982) $ 181,016 
Cumulative effect of the adoption of ASU 2020-06 —  —  (32,214) —  15,218  (16,996)
Exercise of stock options 69,360  —  1,181  —  —  1,181 
RSUs released net of shares withheld for tax settlement 97,766  —  (2,185) —  —  (2,185)
Induced conversion of convertible senior notes 1,277,731  —  477  —  —  477 
Issuance of capped calls —  —  (15,460) —  —  (15,460)
Employee stock-based compensation expense —  —  6,862  —  —  6,862 
Net loss —  —  —  —  (7,633) (7,633)
Other comprehensive loss —  —  —  (234) —  (234)
Balance at March 31, 2021 34,137,418  $ 10  $ 299,176  $ 239  $ (152,397) $ 147,028 
Exercise of stock options 29,807  —  425  —  —  425 
RSUs released net of shares withheld for tax settlement 447,601  —  (10,509) —  —  (10,509)
Common stock issued under employee stock purchase plan 77,538  —  2,146  —  —  2,146 
Issuance of capped calls —  —  (1,894) —  —  (1,894)
Employee stock-based compensation expense —  —  7,123  —  —  7,123 
Net loss —  —  —  —  (2,282) (2,282)
Other comprehensive loss —  —  —  (132) —  (132)
Balance at June 30, 2021 34,692,364  $ 10  $ 296,467  $ 107  $ (154,679) $ 141,905 

The accompanying notes are an integral part of these condensed consolidated financial statements.
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Vocera Communications, Inc.
Condensed Consolidated Statements of Cash Flows
(In Thousands)
(Unaudited)
Six months ended June 30,
2021 2020
Cash flows from operating activities
Net loss $ (9,915) $ (13,938)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization 4,587  2,801 
Stock-based compensation expense 13,985  12,207 
Amortization of debt discount and issuance costs 617  3,504 
Non-cash lease expense 1,203  1,183 
Non-cash impact of induced premium 2,059  — 
Other 1,588  142 
Changes in operating assets and liabilities, net of effect of acquisitions:
Accounts receivable 9,963  14,293 
Other receivables (89) (275)
Inventories 1,436  (3,866)
Prepaid expenses and other assets (1,060) (607)
Deferred commissions (2,561) (640)
Accounts payable (535) (1,035)
Accrued payroll and other liabilities (5,298) 1,176 
Change in lease-related performance obligations (580) (623)
Deferred revenue (3,952) (7,461)
Net cash provided by operating activities 11,448  6,861 
Cash flows from investing activities
Payment for property and equipment (853) (1,427)
Business acquisitions, net of cash and restricted cash acquired (35,397) — 
Purchase of short-term investments (127,240) (86,300)
Maturities of short-term investments 69,430  72,137 
Sales of short-term investments —  14,393 
Net cash used in investing activities (94,060) (1,197)
Cash flows from financing activities
Cash from lease-related performance obligations 198  306 
Repayment of borrowings (102,946) — 
Proceeds from issuance of convertible senior notes, net of issuance costs 217,758  — 
Payment for purchase of capped calls (17,354) — 
Proceeds from issuance of common stock from the employee stock purchase plan 2,146  1,966 
Proceeds from exercise of stock options 1,606  1,325 
Tax withholdings paid on behalf of employees for net share settlement (12,694) (5,579)
Net cash provided by (used in) financing activities 88,714  (1,982)
Net increase in cash, cash equivalents and restricted cash 6,102  3,682 
Cash, cash equivalents and restricted cash at beginning of period 34,976  25,704 
Cash, cash equivalents and restricted cash at end of period $ 41,078  $ 29,386 



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Table of Contents

Six months ended June 30,
(in thousands) 2021 2020
Supplemental disclosure of non-cash investing and financing activities:
Costs related to the convertible senior notes in accounts payable and accrued liabilities $ 98  $ — 
Operating lease right-of-use assets exchanged for lease obligations, net of acquired leases $ 731  122 
Convertible senior notes converted to equity $ 477  $ — 
Property and equipment in accounts payable and accrued liabilities $ 259  $ 222 
Reconciliation of cash, cash equivalents and restricted cash as shown in the consolidated statement of cash flows
Cash and cash equivalents $ 40,480  $ 29,386 
Restricted cash included in other long-term assets 598  — 
Total cash, cash equivalents and restricted cash $ 41,078  $ 29,386 
The accompanying notes are an integral part of these condensed consolidated financial statements.
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Table of Contents
Notes to Unaudited Condensed Consolidated Financial Statements

1. The Company and Summary of Significant Accounting Policies
Organization and Business
Vocera Communications, Inc. and its subsidiaries (collectively, the "Company" or "Vocera") is a provider of secure, integrated, intelligent communication and clinical workflow solutions, focused on empowering mobile workers in healthcare, hospitality, retail, energy, education and other mission-critical mobile work environments, in the United States and internationally. The significant majority of the Company's business is generated from sales of its solutions in the healthcare market to help its customers improve quality of care, safety, patient and staff experience and increase operational efficiency.
The Vocera communication and collaboration solution includes: an intelligent enterprise software platform; a lightweight, wearable, voice-controlled communication Badge and Smartbadge; and smartphone applications. The solution enables users to simply connect instantly with other staff by name, function or group name of the desired recipient. It also delivers HIPAA-compliant secure text messages, alerts and alarms directly to a range of smartphones or the Smartbadge both inside and outside the hospital, replacing legacy pagers and in-building wireless phones.
The Company was incorporated in Delaware on February 16, 2000. The Company formed wholly-owned subsidiaries Vocera Communications UK Ltd and Vocera Communications Australia Pty Ltd. in 2005, Vocera Canada, Ltd. in 2010, Vocera Communications India Private Ltd. in 2013, Vocera Communications Middle East FZ LLC in 2014, acquired Extension, LLC in 2016, EASE Applications, LLC ("EASE") in 2020, and PatientSafe Solutions, Inc. (“PatientSafe”) in 2021.
Basis of Presentation
The Company’s unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”), pursuant to the instructions to Form 10-Q and Article 10 of Regulation S-X of the U.S. Securities and Exchange Commission, and include the accounts of Vocera and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated. Certain information and disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. Accordingly, these unaudited interim condensed consolidated financial statements should be read in conjunction with the annual audited consolidated financial statements and notes thereto contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020. The year-end condensed consolidated balance sheet data was derived from the Company’s audited financial statements but does not include all disclosures required by GAAP.
In the opinion of management, the accompanying unaudited condensed consolidated financial statements reflect all adjustments, which include only normal recurring adjustments, necessary to present fairly the Company’s interim consolidated financial information. The results for the quarter presented are not necessarily indicative of the results to be expected for the year ending December 31, 2021 or for any other interim period or any other future year.
Except for the change in certain accounting policies upon adoption of the accounting standards described below, there have been no material changes to the Company’s significant accounting policies compared to the accounting policies presented in Note 1 to the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020.
Use of Estimates
The preparation of financial statements in conformity with GAAP requires the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expense during the reporting periods. The estimates include, but are not limited to, revenue recognition, warranty reserves, accounts receivable reserves, inventory reserves, bonuses, goodwill and intangible assets, stock-based compensation expense, provisions for income taxes, contingent consideration and contingencies. Actual results could differ from these estimates, and such differences could be material to the Company’s financial position and results of operations.
Certain reclassifications have been made to the prior year financial statements to conform to the current year presentation. These reclassifications had no impact on the previously reported net loss or accumulated deficit.
Recently Adopted Accounting Pronouncements
In August 2020, the FASB issued ASU 2020-06 related to the accounting for debt with conversion features. The amendments in this update simplify the accounting for convertible instruments by reducing the number of accounting models available for convertible debt instruments and convertible preferred stock. This update also amends the guidance for the derivatives scope
9
exception for contracts in an entity's own equity to reduce form-over-substance-based accounting conclusions and requires the application of the if-converted method for calculating diluted earnings per share. The update also requires entities to provide expanded disclosures about the terms and features of convertible instruments, how the instruments have been reported in the entity's financial statements and information about events, conditions and circumstances that can affect how to assess the amount or timing of an entity's future cash flows related to those instruments. The guidance is effective for interim and annual periods beginning after December 15, 2021 with early adoption permitted for fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. The Company adopted the guidance beginning January 1, 2021. The adoption of this guidance resulted in an increase of $17.0 million and $15.2 million to convertible senior notes, net and accumulated deficit, respectively, and a reduction to additional paid-in capital of $32.2 million.

2.Revenue, Deferred Revenue and Deferred Commissions
Disaggregation of Revenue
A typical sales arrangement involves multiple arrangements, such as sales of the Company’s proprietary communication device ("Vocera Badge"), perpetual software licenses, professional services, cloud-based subscription software, and support services which entitles customers to unspecified upgrades, patch releases and telephone-based support. The following table depicts the disaggregation of revenue according to revenue type and is consistent with how the Company evaluates its financial performance:
Three months ended June 30, Six months ended June 30,
(in thousands) 2021 2020 2021 2020
Product revenue
Device $ 16,256  $ 17,100  $ 31,529  $ 31,003 
Software 12,088  6,851  19,423  10,798 
Total product 28,344  23,951  50,952  41,801 
Service revenue
Subscription and support 22,641  18,994  43,600  37,063 
Professional services and training 5,195  4,402  10,296  9,156 
Total service 27,836  23,396  53,896  46,219 
Total revenue $ 56,180  $ 47,347  $ 104,848  $ 88,020 
Contract balances
The timing of revenue recognition may differ from the timing of invoicing to customers. Accounts receivable are recorded at the invoiced amount and in the period the Company delivers goods or provides services or when the Company’s right to consideration is unconditional. Payment terms on invoiced amounts are typically 30 days. The balance of accounts receivable, net of allowance for doubtful accounts, as of June 30, 2021 and December 31, 2020 is presented in the accompanying condensed consolidated balance sheets. In situations where revenue recognition occurs before invoicing, an unbilled receivable is created, which represents a contract asset. As of June 30, 2021 and December 31, 2020, contract assets totaling $4.6 million and $4.2 million, respectively, were included in other receivables in the condensed consolidated balance sheets.

Costs to obtain and fulfill a contract
The Company capitalizes certain incremental contract acquisition costs consisting primarily of commissions paid and the related payroll taxes when customer contracts are signed. The Company determines whether costs should be deferred based on its sales compensation plans, if the commissions are incremental and would not have been incurred absent the execution of the customer contract. Sales commissions for renewals of customer contracts are not commensurate with the commissions paid for the acquisition of the initial contract given the substantive difference in commission rates in proportion to their respective contract values. Commissions paid upon the initial acquisition of a contract are amortized over the estimated period of benefit, which may exceed the term of the initial contract. Accordingly, amortization of deferred costs is recognized on a systematic basis that is consistent with the pattern of revenue recognition allocated to each performance obligation and is included in sales and marketing expense in the consolidated statements of operations. The Company determines its estimated period of benefit, up to five years, by evaluating the expected renewals of its customer contracts, the duration of its relationships with its customers and other factors. Deferred costs are periodically reviewed for impairment. In accordance with Topic 340, an entity
10
may elect a practical expedient that allows the entity to recognize the incremental costs of obtaining a contract as an expense when incurred if the amortization period of the asset that the entity otherwise would have recognized is one year or less. The Company has elected this practical expedient and recognizes costs paid to obtain contracts as expense when incurred. Changes in the balance of total deferred commissions (contract asset) during the three and six months ended June 30, 2021 are as follows:
(in thousands) March 31, 2021 Additions Commissions Recognized June 30, 2021
Deferred commissions $ 12,713  $ 4,452  $ (2,311) $ 14,854 
(in thousands) December 31, 2020 Additions Commissions Recognized June 30, 2021
Deferred commissions $ 12,293  $ 6,787  $ (4,226) $ 14,854 
Of the $14.9 million total deferred commissions balance as of June 30, 2021, the Company expects to recognize approximately 39% as commission expense over the next 12 months and the remainder thereafter.
Deferred revenue
The Company records deferred revenue when cash payments are received in advance of the performance under the contract. The current portion of deferred revenue represents the amounts that are expected to be recognized as revenue within one year of the consolidated balance sheet date. Changes in the balance of total deferred revenue (contract liability) during the three and six months ended June 30, 2021 are as follows:
(in thousands) March 31, 2021 Additions Revenue Recognized June 30, 2021
Deferred revenue $ 60,136  $ 27,433  $ (25,014) $ 62,555 
(in thousands) December 31, 2020 Additions Revenue Recognized June 30, 2021
Deferred revenue $ 64,733  $ 45,350  $ (47,528) $ 62,555 
Revenue recognized during the three and six months ended June 30, 2021 from deferred revenue balances at the beginning of the period was $22.6 million and $43.7 million, respectively. Revenue recognized during the three and six months ended June 30, 2020 from deferred revenue balances at the beginning of the period was $19.5 million and $34.2 million, respectively.
The “contracted but not recognized” performance obligations represent the Company’s deferred revenue and non-cancelable backlog amounts. This balance as of June 30, 2021 was $179.0 million, of which the Company expects to recognize approximately 66% as revenue over the next 12 months and the remainder thereafter.

3.Fair Value of Financial Instruments
The Company’s cash, cash equivalents and short-term investments are carried at their fair values with any differences from their amortized cost recorded in equity as unrealized gains (losses) on marketable securities. As a basis for determining the fair value of its assets and liabilities, the Company follows a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows: (Level 1) observable inputs such as quoted prices in active markets; (Level 2) inputs other than the quoted prices in active markets that are observable either directly or indirectly; and (Level 3) unobservable inputs in which there is little or no market data which requires the Company to develop its own assumptions. This hierarchy requires the Company to use observable market data, when available, and to minimize the use of unobservable inputs when determining fair value. During the six months ended June 30, 2021, there have been no transfers between Level 1 and Level 2 fair value instruments and no transfers out of Level 3.
The Company’s money market funds are classified within Level 1 of the fair value hierarchy because they are valued using quoted market prices. The fair value of the Company’s Level 2 fixed income securities is obtained from independent pricing
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services, which may use quoted market prices for identical or comparable instruments or model-driven valuations using observable market data or other inputs, corroborated by observable market data.
In addition to its cash, cash equivalents and short-term investments, the Company measures the fair value of its Convertible Senior Notes on a quarterly basis for disclosure purposes. The Company considers the fair value of the Convertible Senior Notes at June 30, 2021 to be a Level 2 measurement due to limited trading activity of the Convertible Senior Notes. Refer to Note 8 to the condensed consolidated financial statements for further information.
The agreement for the acquisition of EASE includes contingent payments to the owners of EASE, payable based on achievement of post-acquisition financial metrics. This contingent consideration is a Level 3 fair value measurement and the valuation of the Company’s contingent consideration obligation was estimated as the present value of total expected contingent consideration payments which are determined using a Monte Carlo simulation. This analysis reflects the contractual terms of the purchase agreements and utilizes assumptions with regard to future sales, probabilities of achieving such future sales, the likelihood and timing of expected payments and a discount rate. Significant increases with respect to assumptions as to future sales and probabilities of achieving such future sales would result in a higher fair value measurement, while an increase in the discount rate would result in a lower fair value measurement. The unobservable inputs in the valuation include revenue volatility of 11%, a risk-free rate of 2.50%, and the amounts are expected to be paid in the second quarters of 2022 and 2023. The fair value adjustment for the contingent consideration of $(1.7) million and $(1.3) million for the three and six months ended June 30, 2021, respectively, was recorded as other income in the condensed consolidated statements of operations.
The Company’s assets that are measured at fair value on a recurring basis, by level, within the fair value hierarchy as of June 30, 2021 and December 31, 2020, are summarized as follows (in thousands):
June 30, 2021 December 31, 2020
Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total
Assets
Money market funds $ 15,471  $ —  $ —  $ 15,471  $ 363  $ —  $ —  $ 363 
Commercial paper —  62,960  —  62,960  —  21,950  —  21,950 
U.S. Treasury securities —  —  —  —  —  6,000  —  6,000 
Corporate debt securities —  188,468  —  188,468  —  173,277  —  173,277 
Total assets measured at fair value $ 15,471  $ 251,428  $ —  $ 266,899  $ 363  $ 201,227  $ —  $ 201,590 
Liabilities
Contingent consideration $ —  $ —  $ 1,661  1,661  $ —  $ —  $ 2,959  $ 2,959 
Total liabilities measured at fair value $ —  $ —  $ 1,661  $ 1,661  $ —  $ —  $ 2,959  $ 2,959 

The financial accounts that are not subject to recurring fair value measurement include trade and other receivables, prepaid expenses and other current assets, total current liabilities and deferred revenues, both current and long-term. Due to their short maturities, the carrying amounts of these accounts approximate their fair values.
The table below provides a roll-forward of the fair value of the Company's liabilities that use significant unobservable inputs (Level 3) (in thousands).
Six months ended June 30,
2021
Beginning balance $ 2,959 
Fair value adjustment for contingent consideration included in earnings $ (1,298)
Ending balance $ 1,661 


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4.Cash, Cash Equivalents and Short-Term Investments
The following tables present cash, cash equivalents and short-term investments (in thousands) as of June 30, 2021 and December 31, 2020:
As of June 30, 2021
Amortized Cost Unrealized Gains Unrealized Losses Fair value
Cash and cash equivalents:
Cash $ 25,009  $ —  $ —  $ 25,009 
Money market funds 15,471  —  —  15,471 
Total cash and cash equivalents 40,480  —  —  40,480 
Short-term investments:
Commercial papers 62,956  6  (2) 62,960 
Corporate debt securities 188,365  182  (79) 188,468 
Total short-term investments 251,321  188  (81) 251,428 
Total cash, cash equivalents and short-term investments $ 291,801  $ 188  $ (81) $ 291,908 

As of December 31, 2020
Amortized Cost Unrealized Gains Unrealized Losses Fair value
Cash and cash equivalents:
Cash $ 28,613  $ —  $ —  $ 28,613 
Money market funds 363  —  —  363 
U.S. government agency securities 6,000  —  —  6,000 
Total cash and cash equivalents 34,976  —  —  34,976 
Short-term investments:
Commercial papers 21,961  —  (11) 21,950 
Corporate debt securities 172,768  543  (34) 173,277 
Total short-term investments 194,729  543  (45) 195,227 
Total cash, cash equivalents and short-term investments $ 229,705  $ 543  $ (45) $ 230,203 

The Company has determined that no credit losses related to marketable securities were required as of June 30, 2021 and December 31, 2020. The Company’s conclusion is based on the high credit quality of the securities, their short remaining maturity and the Company’s intent and ability to hold such loss securities until maturity.
13
Classification of the cash, cash equivalents and short-term investments by contractual maturity was as follows:
(in thousands) One year or shorter Between 1 and 2 years Total
Balances as of June 30, 2021
Cash and cash equivalents (1) $ 40,480  $ —  $ 40,480 
Short-term investments 201,890  49,538  251,428 
Cash, cash equivalents and short-term investments $ 242,370  $ 49,538  $ 291,908 
Balances as of December 31, 2020
Cash and cash equivalents (1) $ 34,976  $ —  $ 34,976 
Short-term investments 141,582  53,645  195,227 
Cash, cash equivalents and short-term investments $ 176,558  $ 53,645  $ 230,203 
(1) Includes demand deposits and other cash, money market funds and other cash equivalent securities, all with 0-90 day maturity at purchase.

5.Net Loss Per Share
The following table sets forth the computation of basic and diluted net loss per share (in thousands, except per share amounts):
Three months ended June 30, Six months ended June 30,
2021 2020 2021 2020
Numerator:
Net loss $ (2,282) $ (3,468) $ (9,915) $ (13,938)
Denominator:
Weighted-average shares used to compute net loss per common share - basic and diluted 34,485 32,152 33,790 31,945
Net loss per share
   Basic and diluted $ (0.07) $ (0.11) $ (0.29) $ (0.44)
The following securities were not included in the calculation of diluted shares outstanding as the effect would have been anti-dilutive:
Three months ended June 30, Six months ended June 30,
(in thousands) 2021 2020 2021 2020
Options to purchase common stock, including ESPP 213  517  253  568 
Restricted stock units and performance stock units 1,831  2,125  1,967  1,880 
Convertible senior notes (if-converted) 4,998  —  4,795  — 

6.Goodwill and Intangible Assets
Goodwill
As of June 30, 2021 and December 31, 2020, the Company had $94.8 million and $69.2 million of goodwill, respectively. The addition to goodwill during the six months ended June 30, 2021 of $25.7 million was based on the purchase price allocations of the acquisition completed during the three months ended June 30, 2021 (see Note 12). As of June 30, 2021, there were no changes in circumstances indicating that the carrying values of goodwill or acquired intangibles may not be recoverable.
The changes in the carrying amount of goodwill are as follows (in thousands):
14
Balance at December 31, 2020 $69,168
Acquired in acquisition (Note 12) 25,678
Balance at June 30, 2021 $94,846
Intangible Assets
The fair values for acquired intangible assets were determined by management with consideration of, in part, valuations performed by independent valuation specialists. Acquisition-related intangible assets are amortized either straight-line, or over the life of the assets on a basis that resembles the economic benefit of the assets. This assumption results in amortization that is higher in earlier periods of the useful life. The estimated useful lives and carrying value of acquired intangible assets are as follows:
June 30, 2021 December 31, 2020
(in thousands) Weighted Average
Useful Life
(years) 		Gross
 Carrying
 Amount 		Accumulated
Amortization 		Net
 Carrying
 Amount 		Gross
 Carrying
 Amount 		Accumulated
Amortization 		Net
 Carrying
 Amount
Developed technology 3.3 $ 17,620  $ (10,992) $ 6,628  $ 12,360  $ (10,255) $ 2,105 
Customer relationships 8.0 19,640  (8,073) 11,567  16,350  (7,143) 9,207 
Backlog 3.8 5,950  (1,708) 4,242  2,240  (1,343) 897 
Trademarks 3.0 1,770  (1,301) 469  1,770  (1,191) 579 
Intangible assets, net book value $ 44,980  $ (22,074) $ 22,906  $ 32,720  $ (19,932) $ 12,788 
Amortization expense was $1.3 million and $0.3 million for the three months ended June 30, 2021 and 2020, respectively. Amortization expense was $2.1 million and $0.6 million for the six months ended June 30, 2021 and 2020, respectively.
Amortization of acquired intangible assets is reflected in the cost of revenue for developed technology and backlog and in operating expenses for the other intangible assets. The estimated future amortization of existing acquired intangible assets as of June 30, 2021 was as follows:
(in thousands) Future amortization
2021 (remaining six months) $ 3,235 
2022 6,057 
2023 5,537 
2024 3,506 
2025 1,409 
2026 1,090 
Thereafter 2,072 
     Future amortization expense $ 22,906 

15
7.Balance Sheet Components
Inventories
(in thousands) June 30,
2021 		December 31,
2020
Raw materials $ 356  $ 462 
Finished goods 8,246  9,697 
        Total inventories $ 8,602  $ 10,159 
Property and equipment, net
(in thousands) June 30,
2021 		December 31,
2020
Computer equipment and software $ 15,865  $ 15,912 
Furniture, fixtures and equipment 2,760  2,570 
Leasehold improvements 5,762  5,306 
Manufacturing tools and equipment 2,758  2,506 
Construction in process 210  629 
        Property and equipment, at cost 27,355  26,923 
Less: Accumulated depreciation (20,507) (18,820)
        Property and equipment, net $ 6,848  $ 8,103 
Depreciation and amortization expense for property and equipment was $1.3 million and $1.2 million for the three months ended June 30, 2021 and 2020, respectively. Depreciation and amortization expense for property and equipment was $2.4 million and $2.2 million for the six months ended June 30, 2021 and 2020, respectively.
Net investment in sales-type leases
The Company has sales-type leases with terms of 3 to 4 years. Sales-type lease receivables are collateralized by the underlying equipment. The components of the Company’s net investment in sales-type leases are as follows:
(in thousands) June 30,
2021 		  December 31,
2020
Minimum payments to be received on sales-type leases $ 1,101    $ 1,440 
Less: Unearned interest income and executory revenue portion (540)   (731)
Net investment in sales-type leases 561    709 
Less: Current portion (316)   (360)
Non-current net investment in sales-type leases $ 245    $ 349 
Sales-type lease activity recognized in the condensed consolidated statement of operations are as follows:
Three months ended June 30, Six months ended June 30,
(in thousands) 2021 2020 2021 2020
Lease revenue $ 500  $ 1,118  $ 919  $ 1,553 
Less: Cost of lease shipments (32) (165) (40) (175)
Gross profit $ 468  $ 953  $ 879  $ 1,378 
Interest income (expense), net on lease receivable $ 1  $ (6) $ 2  $ (12)
Initial direct cost incurred $ 22  $ 60  $ 39  $ 83 
There were no allowances for doubtful accounts on these leases as of June 30, 2021 and December 31, 2020. There is no guaranteed or unguaranteed residual value on the leased equipment. The current and non-current net investments in sales-type
16
leases are reported as components of the condensed consolidated balance sheet captions “other receivables” and “other long-term assets,” respectively.
The minimum payments expected to be received for future years under sales-type leases as of June 30, 2021 were as follows:
(in thousands) Future lease payments
2021 (remaining six months) $ 361 
2022 522 
2023 185 
2024 33 
     Total $ 1,101 
Accrued payroll and other current liabilities
(in thousands) June 30,
2021 		December 31,
2020
Payroll and related expenses $ 11,907  $ 9,043 
Accrued payables 2,985  3,160 
Operating lease liabilities, current portion 3,627  2,529 
Lease financing, current portion 1,097  1,034 
Product warranty 433  453 
Customer prepayments 1,472  4,292 
Sales and use tax payable 513  476 
Other taxes payable 2,210  1,832 
Other 513  376 
        Total accrued payroll and other current liabilities $ 24,757  $ 23,195 
The changes in the Company’s product warranty reserve are as follows:
Three months ended June 30, Six months ended June 30,
(in thousands) 2021 2020 2021 2020
Warranty balance at the beginning of the period $ 462  $ 440  $ 453  $ 420 
Warranty expense accrued for shipments during the period 80  115  150  223 
Changes in estimate related to pre-existing warranties (94) 40  (126) 9 
Warranty settlements made (15) (74) (44) (131)
Total product warranty $ 433  $ 521  $ 433  $ 521 

Leases
The Company has operating leases for office space at its headquarters and subsidiaries under non-cancelable operating leases. Leases with an initial term of 12 months or less are not recorded on the balance sheet; lease expense for these leases is recognized on a straight-line basis over the lease term. The Company determines if an arrangement is a lease at inception. Some lease agreements contain lease and non-lease components, which are accounted for as a single lease component. The Company’s leases have remaining lease terms of approximately nine months to approximately eight years. Operating lease cost, including short-term operating leases was $0.8 million and $0.7 million for the three months ended June 30, 2021 and 2020, respectively and $1.5 million and $1.4 million for the six months ended June 30, 2021 and 2020, respectively.
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Supplemental balance sheet information related to leases was as follows:
(in thousands) June 30,
2021
Other long-term assets $ 4,908 
Accrued payroll and other current liabilities 3,627 
Other long-term liabilities 2,692 
Total operating lease liabilities $ 6,319 
Other information related to leases was as follows:
Three months ended June 30, Six months ended June 30,
(in thousands) 2021 2020 2021 2020
Supplemental Cash Flow Information
Cash paid for amounts included in the measurement of lease liabilities $ 1,005  $ 732  $ 1,766  1,444 
Right-of-use assets obtained in exchange for lease obligations $ 1,423  $ 122  $ 2,096  122 
Weighted average remaining lease term 2.13 years 2.46 years 2.13 years 2.46 years
Weighted average discount rate 8  % 8  % 8  % 8  %
Maturities of lease liabilities as of June 30, 2021 are as follows:
(in thousands) Operating leases
2021 (remaining six months) $ 2,073 
2022 3,096 
2023 908 
2024 523 
2025 175 
2026 74 
Total maturities of lease liabilities 6,849 
Less imputed interest (530)
Total $ 6,319 
During the three months ended June 30, 2021, the Company entered into a new lease for its headquarters with lease payments totaling $15.5 million. The Company will have access to the facility starting in the third quarter of 2021 and the lease goes through the second quarter of 2029.

8.Convertible Senior Notes
Convertible Senior Notes due 2026
In March 2021, the Company issued $200.0 million aggregate principal amount of its 0.50% Convertible Senior Notes, due 2026 (the “2026 Notes”). The 2026 Notes are unsecured, unsubordinated obligations of the Company and bear interest at a fixed rate of 0.50% per annum, payable semi-annually in arrears on March 15 and September 15 of each year, commencing on September 15, 2021. The 2026 Notes mature on September 15, 2026, unless converted, redeemed or repurchased in accordance with their terms prior to such date. The Company granted the initial purchasers an overallotment option under the purchase agreement to purchase up to an additional $30.0 million aggregate principal amount of the 2026 Notes to cover overallotments within a 30-day period. The purchasers partially exercised the overallotment option in April 2021 and the Company issued an additional $24.5 million of the 2026 Notes. The Company may not redeem the 2026 Notes prior to March 20, 2024. The Company may redeem for cash all or any portion of the 2026 Notes (subject to the partial redemption limitation (as defined in the Indenture)), at its option, on or after March 20, 2024 if the last reported sale price of common stock has been at least 130%
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of the conversion price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period (including the last trading day of such period) ending on, and including, the trading day immediately preceding the date on which the Company provides a redemption notice at a redemption price equal to 100% of the principal amount of the 2026 Notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date.
The 2026 Notes are convertible into cash, shares of Company’s common stock or a combination of cash and shares of common stock, at the Company’s election, at an initial conversion rate of 16.6272 shares of common stock per $1,000 principal amount of the 2026 Notes, which is equal to an initial conversion price of approximately $60.14 per share of common stock. The 2026 Notes will be convertible at the option of the holders at any time prior to the close of business on the business day immediately preceding June 15, 2026, only under the following circumstances:
(1) during any calendar quarter commencing after the calendar quarter ending on June 30, 2021 (and only during such calendar quarter), if the last reported sale price of common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price of the 2026 Notes on each applicable trading day
(2) during the five business day period after any ten consecutive trading day period in which the trading price per $1,000 principal amount of the 2026 Notes for each trading day of that ten day consecutive trading day period was less than 98% of the product of the last reported sale price of common stock and the conversion rate of the 2026 Notes on such trading day;
(3) if the Company calls any or all of the 2026 Notes for redemption, at any time prior to the close of business on the second scheduled trading day prior to the applicable redemption date; or
(4) upon the occurrence of specified corporate events.
On or after June 15, 2026, holders of the 2026 Notes may convert all or any portion of their 2026 Notes at any time prior to the close of business on the second scheduled trading day immediately preceding the maturity date, regardless of the foregoing circumstances. If a fundamental change occurs (as set forth in the indenture governing the 2026 Notes), each holder of the 2026 Note shall have the right, at such holder’s option, to require the Company to repurchase for cash all of such their Notes, or any portion of the principal amount, at a repurchase price equal to 100% of the principal amount thereof, plus accrued and unpaid interest. During the six months ended June 30, 2021, the conditions allowing holders of the 2026 Notes to convert have not been met and there were no changes to the initial conversion price of the 2026 Notes. The 2026 Notes are not convertible during the six months ended June 30, 2021 and are classified as long-term debt.
In accounting for the 2026 Notes after adoption of ASU 2020-06, the 2026 Notes are accounted for as a single liability. The carrying amount of the liability component for 2026 Notes is $218.0 million as of June 30, 2021, with principal of $224.5 million, net of unamortized issuance costs of $6.5 million. The costs related to the 2026 Notes are being amortized to interest expense over the contractual term of the 2026 Notes at an effective interest rate of 1.05%.
The 2026 Notes and related interest expense consist of the following:
(in thousands) June 30,
2021
Liability:
Principal $ 224,500 
Unamortized issuance costs (6,480)
     Net carrying amount $ 218,020 

Three months ended June 30, Six months ended June 30,
(in thousands) 2021 2021
Contractual interest expense $ 276  $ 337 
Amortization of issuance costs 295  359 
Total interest expense $ 571  $ 696 

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2026 Capped Calls
In connection with the pricing of the 2026 Notes, the Company entered into privately negotiated capped call transactions with certain counterparties (the “2026 Capped Calls”). The 2026 Capped Calls have an initial strike price of $60.14 per share, subject to certain adjustments, which correspond to the initial conversion price of the 2026 Notes. The 2026 Capped Calls have initial cap prices of $77.96 per share, subject to certain adjustments. Conditions that cause adjustments to the initial strike price of the 2026 Capped Calls mirror conditions that result in corresponding adjustments for the 2026 Notes. The 2026 Capped Calls are generally intended to reduce or offset the potential dilution to the Company’s common stock upon any conversion of the 2026 Notes with such reduction or offset, as the case may be, subject to a cap based on the cap price. For accounting purposes, the 2026 Capped Calls are separate transactions, and not part of the terms of the 2026 Notes. As these transactions meet certain accounting criteria, the 2026 Capped Calls are recorded in stockholders' equity at an amount of $17.4 million and are not accounted for as derivatives. In connection with the partial exercise of the overallotment option and the issuance by the Company of $24.5 million of 2026 Notes on April 5, 2021, the Company entered into $1.9 million of additional privately negotiated capped calls with the same terms as the initial capped calls.
Convertible Senior Notes due 2023
In May 2018, the Company issued $143.8 million aggregate principal amount of 1.50% Convertible Senior Notes due May 15, 2023 (the “2023 Notes”), including $18.8 million aggregate principal amount of such notes pursuant to the exercise in full of options granted to the initial purchasers. The 2023 Notes are unsecured, unsubordinated obligations and bear interest at a fixed rate of 1.50% per annum, payable semi-annually in arrears on May 15 and November 15 of each year, commencing on November 15, 2018. The total net proceeds from the offering, after deducting initial purchase discounts and estimated debt issuance costs, were approximately $138.9 million.
In the first quarter of 2021, the Company used part of the net proceeds from the issuance of the 2026 Notes to retire $102.9 million aggregate principal amount of the 2023 Notes in privately-negotiated transactions for consideration of $102.9 million in cash and 1,277,731 shares of the Company’s common stock (the "2023 Note Repurchase Transactions"). The Company separately settled the accrued interest of approximately $0.5 million associated with the retired 2023 Notes in cash.
Out of the common stock issued, the Company provided additional issuance of 46,216 shares of the Company’s common stock not provided for under the original conversion terms of the 2023 Notes to induce the holders of the 2023 Notes to agree to the retirement. The Company used cash to settle the principal of the retired 2023 Notes and issued common stock to settle the conversion spread.

The 2023 Note Repurchase Transactions met the requirements to be accounted for as an induced conversion. Under the induced conversion guidance, the total fair value of the additional cash and common stock issued to induce conversion is recognized as an inducement expense. The remaining cash and common stock consideration issued under the original terms of the 2023 Notes are accounted for under the general conversion accounting guidance. The 2023 Note Repurchase Transactions resulted in a $2.1 million inducement loss equal to the fair value of the additional common stock issued for inducement and the difference of approximately $1.6 million between the carrying amount of the 2023 Notes retired, including unamortized debt issuance cost of $1.6 million, and the cash consideration paid and the par amount of the common stock issued was recorded in additional paid-in capital.

Each $1,000 principal amount of the remaining 2023 Notes is initially convertible into 31.0073 shares of the Company’s common stock (the “2023 Notes Conversion Option”), which is equivalent to an initial conversion price of approximately $32.25 per share, subject to adjustment upon the occurrence of specified events. The 2023 Notes will be convertible at the option of the holders at any time prior to the close of business on the business day immediately preceding February 15, 2023, only under the following circumstances:
(1) during any calendar quarter commencing after the calendar quarter ending on June 30, 2018 (and only during such calendar quarter), if the last reported sale price of the Company common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price of the 2023 Notes on each applicable trading day;
(2) during the five business day period after any ten consecutive trading day period in which the trading price per $1,000 principal amount of the 2023 Notes for each day of that ten day consecutive trading day period was less than 98% of the product of the last reported sale price of the Company’s common stock and the conversion rate of the 2023 Notes on such trading day; or
(3) upon the occurrence of specified corporate events (as set forth in the indenture governing the 2023 Notes).
20
On or after February 15, 2023 until the close of business on the second scheduled trading day immediately preceding the maturity date, holders may convert their 2023 Notes at any time, regardless of the foregoing circumstances. Upon conversion, the Company will pay or deliver, as the case may be, cash, shares of the Company’s common stock or a combination of cash and shares of the Company’s common stock, at the Company’s election. If certain specified fundamental changes occur (as set forth in the indenture governing the 2023 Notes) prior to the maturity date, holders of the 2023 Notes may require the Company to repurchase for cash all or any portion of their Notes at a repurchase price equal to 100% of the principal amount of the 2023 Notes to be repurchased, plus accrued and unpaid interest to, but excluding, the fundamental change repurchase date. In addition, if specific corporate events occur prior to the applicable maturity date, the Company will increase the conversion rate for a holder who elects to convert their notes in connection with such a corporate event in certain circumstances. During the six months ended June 30, 2021, the conditions allowing holders of the 2023 Notes to convert have not been met and there were no changes to the initial conversion price of the 2023 Notes. The 2023 Notes are not convertible during the six months ended June 30, 2021 and are classified as long-term debt.
Prior to the adoption of the ASU 2020-06 on January 1, 2021 and in accounting for the issuance of the 2023 Notes, the 2023 Notes were separated into liability and equity components. The carrying amount of the liability component was calculated by measuring the fair value of a similar debt instrument that does not have an associated conversion feature. The carrying amount of the equity component representing the 2023 Conversion Option was $33.4 million and was determined by deducting the fair value of the liability components from the par value of the 2023 Notes. The equity component was recorded in additional paid-in-capital and are not re-measured as long as they continue to meet the conditions for equity classification. The excess of the principal amount of the liability component over its carrying amount (the “Debt Discount”) was amortized to interest expense over the contractual term of the 2023 Notes at an effective interest rate of 7.6%.
Prior to the adoption of the ASU 2020-06 on January 1, 2021 and in accounting for the debt issuance costs of $4.9 million related to the 2023 Notes, the Company allocated the total amount incurred to the liability and equity components of the 2023 Notes based on their relative values. Issuance costs attributable to the liability component were $3.8 million and were amortized to interest expense using the effective interest method over the contractual term of the 2023 Notes. Issuance costs attributable to the equity components were netted with the equity component in additional paid-in-capital.
The Company elected to early adopt ASU 2020-06 as of January 1, 2021 based on a modified retrospective transition method. Under such transition, prior-period information has not been retrospectively adjusted.
In accounting for the 2023 Notes after adoption of ASU 2020-06, the 2023 Notes are accounted for as a single liability. The carrying amount of the liability component for 2023 Notes is $40.3 million as of June 30, 2021, with principal of $40.8 million, net of debt issuance cost of $0.5 million. The issuance costs related to the 2023 Notes are being amortized to interest expense over the contractual term of the 2023 Notes at an effective interest rate 2.19%.
The 2023 Notes and related interest expense consist of the following:
(in thousands) June 30,
2021 		December 31,
2020
Liability:
Principal $ 40,804  $ 143,750 
Unamortized debt discount —  (17,411)
Unamortized issuance costs (539) (1,963)
     Net carrying amount $ 40,265  $ 124,376 
Stockholders’ equity:
Debt discount for conversion option $ —  $ 33,350 
Issuance costs —  (1,136)
Net carrying amount $ —  $ 32,214 

21
Three months ended June 30, Six months ended June 30,
(in thousands) 2021 2020 2021 2020
Contractual interest expense $ 153  $ 539  $ 190  $ 1,078 
Amortization of debt discount —  1,590  —  3,149 
Amortization of issuance costs 70  179  88  355 
Total interest expense $ 223  $ 2,308  $ 278  $ 4,582 

The total estimated fair value of the 2023 and 2026 Notes (“the Notes”) as of June 30, 2021 was approximately $270.0 million. The fair value was determined based on the closing trading price per $100 of the Notes as of the last day of trading for the period. The fair value of the Notes is primarily affected by the trading price of the Company’s common stock and market interest rates. Based on the closing price of the Company’s common stock of $39.85 on June 30, 2021, the if-converted value of the Notes of $199.2 million was less than their principal amount.     
2023 Capped Calls
In connection with the pricing of the 2023 Notes, the Company entered into privately negotiated capped call transactions with certain counterparties, the “2023 Capped Calls.” The 2023 Capped Calls entered into with the 2023 Notes are still outstanding and each have an initial strike price of approximately $32.25 per share, subject to certain adjustments, which correspond to the initial conversion price of the 2023 Notes. The 2023 Capped Calls have initial cap prices of $38.94 per share, subject to certain adjustments. The 2023 Capped Calls cover, subject to anti-dilution adjustments, approximately 4.5 million shares of the Company’s common stock. Conditions that cause adjustments to the initial strike price of the Capped Calls mirror conditions that result in corresponding adjustments for the 2023 Notes. The 2023 Capped Calls are generally intended to reduce or offset the potential dilution to the Company’s common stock upon any conversion of the 2023 Notes with such reduction or offset, as the case may be, subject to a cap based on the cap price. For accounting purposes, the 2023 Capped Calls are separate transactions, and not part of the terms of the 2023 Notes. As these transactions meet certain accounting criteria, the 2023 Capped Calls are recorded in stockholders' equity and are not accounted for as derivatives. The cost of $8.9 million incurred in connection with the 2023 Capped Calls was recorded as a reduction to additional paid-in capital. The 2023 Capped Calls were not impacted by the 2023 Note Repurchase Transactions and continue to remain outstanding.
The net impact to the Company’s stockholders' equity, included in additional paid-in capital, of the above components of the 2023 Notes is as follows:
(in thousands) December 31,
2020
Conversion option $ 33,350 
Purchase of capped calls (8,907)
Issuance costs (1,136)
Total $ 23,307 

Impact on Earnings Per Share
Prior to the adoption of ASU 2020-06, the Company used the treasury stock method for calculating any potential dilutive effect of the conversion spread of its 2023 Notes. Under the treasury stock method, in periods when the Company reports net income, the Company is required to include the effect of additional shares that may be issued under the 2023 Notes when the price of its’ common stock exceeds the conversion price. The conversion spread on the 2023 convertible senior notes had an anti-dilutive impact during the six months ended June 30, 2020, since the average market price of the Company’s common stock during the period exceeded the initial conversion price per share for the 2023 Notes and the Company was in a net loss position.
After the adoption of ASU 2020-06, the Company uses the if-converted method for calculating any potential dilutive effect of its 2023 Notes and 2026 Notes for the three and six months ended June 30, 2021. Under this method, diluted earnings per share would generally be calculated assuming that all the 2023 and 2026 Notes were converted solely into 5.1 million shares of common stock at the beginning of the reporting period, unless the result would be antidilutive. The potential shares of common stock issuable upon the conversion of the 2023 and 2026 Notes were excluded from the calculation of diluted net loss per share because their effect would have been anti-dilutive as of June 30, 2021.

22
9.Commitments and Contingencies
Non-cancelable Material Commitments
The Company is required to purchase unused, non-cancelable, non-returnable raw material inventory that was purchased by its contract manufacturers based on committed finished goods orders from the Company, certain long lead-time raw materials based on the Company’s forecast and current work-in-progress materials. As of June 30, 2021 and December 31, 2020, approximately $9.7 million and $6.1 million, respectively, of such inventory was purchased and held by the third-party manufacturers which was subject to these purchase guarantees.
Indemnifications
The Company undertakes, in the ordinary course of business, to (i) defend customers and other parties from certain third-party claims associated with allegations of trade secret misappropriation, infringement of copyright, patent or other intellectual property rights, tortious damage to persons or property or breaches of certain Company obligations relating to confidentiality (e.g., safeguarding protected health information) and (ii) indemnify and hold harmless such parties from certain resulting damages, costs and other liabilities. The term of these undertakings may be perpetual and the maximum potential liability of the Company under certain of these undertakings is not determinable. Based on its historical experience, the Company believes the liability associated with these undertakings is minimal.
The Company has entered into indemnification agreements with its directors and officers that may require the Company to indemnify its directors and officers against liabilities that may arise by reason of their status or service as directors or officers, other than liabilities arising from willful misconduct of the individual. The Company currently has directors and officers insurance. As there has been no significant history of losses, no expense accrual has been made.
Litigation
From time to time, the Company may be involved in lawsuits, claims, investigations and proceedings, consisting of intellectual property, commercial, employment and other matters which arise in the ordinary course of business. The Company defends itself vigorously against any such claims. Although the outcome of these matters is currently not determinable, management expects that any losses from existing matters that are probable or reasonably possible of being incurred as a result of these matters would not be material to the financial statements as a whole.

10.Stock-based Compensation and Awards
Valuation Assumptions
Compensation expense for all share-based payment awards, including stock options, restricted stock units (“RSUs”), and performance stock units (“PSUs”), is measured based on the estimated fair value of the award on the grant date over the related vesting or performance periods.
We estimate the fair value of our stock-based awards as follows:
Restricted Stock Units. The fair value of restricted stock units is determined based on the quoted market price of our common stock on the date of grant.

Performance Stock Units. Performance stock units consist of grants of performance-based restricted stock units to certain members of executive management that vest contingent upon the achievement of pre-determined market and service conditions (referred to herein as “performance stock units”). The fair value of our performance stock units is estimated using a Monte-Carlo simulation model which is a probabilistic approach for calculating the fair value of the awards. The Monte-Carlo simulation is a statistical technique used, in this instance, to simulate future stock prices of the Company relative to constituents in the S&P 600 Health Care Equipment and Services Index. Key assumptions for the Monte-Carlo simulation model are the risk-free interest rate, expected volatility, expected dividends and correlation coefficient.

Stock Options and Employee Stock Purchase Plan. The fair value of stock options and stock purchase rights granted pursuant to our equity incentive plans and our 2012 Employee Stock Purchase Plan (ESPP), respectively, is estimated using the Black-Scholes valuation model based on the multiple-award valuation method. Key assumptions of the Black-Scholes valuation model are the risk-free interest rate, expected volatility, expected term and expected dividends. The risk-free interest rate is based on U.S. Treasury yields in effect at the time of grant for the expected term of the option. Expected volatility is based on a combination of historical stock price volatility. An expected term is estimated based on historical exercise behavior, post-vesting termination patterns, options outstanding and future expected exercise behavior.
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Stock Option Activity
The following table summarizes the combined stock option activity under the 2000 Plan, the 2006 Plan and the 2012 Plan and non-plan stock option agreements for the six months ended June 30, 2021:
Options Outstanding
Number of options Weighted average exercise price Weighted average remaining contractual term Aggregate intrinsic value
(in years) (in thousands)
Outstanding at December 31, 2020 299,031  $ 15.58  2.68 $ 7,761 
Options exercised (99,167) 16.20 
Options canceled (9,431) 16.77 
Outstanding at June 30, 2021 190,433  $ 15.19  2.22 $ 4,696 
At June 30, 2021, there was no unrecognized compensation cost related to options. We did not grant any stock options during the six months ended June 30, 2021. As of June 30, 2021, there were 1,742,713 shares that remained available for future issuance of options, restricted stock units (“RSUs”) or other equity awards under the 2012 Equity Incentive Plan.
Employee Stock Purchase Plan
In March 2012, the Company’s 2012 Employee Stock Purchase Plan (the “ESPP”) was approved. During the six months ended June 30, 2021 employees purchased 77,538 shares of common stock at an average price of $27.68 per share. During the six months ended June 30, 2020 employees purchased 126,046 shares of common stock at an average price of $15.60 per share. As of June 30, 2021, there were 1,198,413 shares available for future issuance under the ESPP.
The Company uses the Black-Scholes option-pricing model to calculate the fair value of periodic ESPP offerings on their offer date. The following assumptions were used for each respective period for the ESPP:
Three months ended June 30, Six months ended June 30,
2021 2020 2021 2020
Expected term (in years) 0.50 0.50 0.50 0.50
Volatility
54.2% - 55%
50% - 54.14%
54.2% - 55%
50.0% - 54.14%
Risk-free interest rate
0.03% - 0.12%
0.15% - 1.59%
0.03% - 0.12%
0.15% - 1.59%
Dividend yield 0% 0% 0% 0%
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Restricted Stock Units and Performance Stock Units
The Company issues RSUs and PSUs as part of its compensation plans. A summary of RSU and PSU activity for the six months ended June 30, 2021 is presented below:
Restricted Stock Units and Performance Stock Units
Number of shares Weighted Average Grant Date Fair Value per Share
Outstanding at December 31, 2020 2,140,763  $ 25.16 
Granted 708,213  38.94 
Vested (879,615) 24.50 
Forfeited (138,662) 27.82 
Outstanding at June 30, 2021 1,830,699  $ 30.61 
At June 30, 2021, there was $47.2 million of unrecognized compensation cost related to RSUs and PSUs, which is expected to be recognized over a weighted-average period of 2.01 years.
During the second quarter of fiscal year 2020 the Company granted 145,877 PSUs to certain executives under the 2012 Equity Incentive Plan (the “2012 Plan”). PSUs are contingent on the achievement of our comparative market-based returns. On the date of grant, the fair value of the total shareholder return (TSR) component of the PSUs is estimated using a Monte Carlo valuation model. The PSUs will vest over a three-year performance period. The number of shares the PSU holder receives is based on the extent to which the corresponding market conditions have been achieved. For awards subject to service and market conditions, the number of shares of our stock issued pursuant to the award can range from 0% to 200% of the target amount. Compensation expense for awards with performance-based and service-based conditions is recognized over the requisite service period. These grants were reduced from shares of common stock reserved for issuance under stock option plans as if 200% of the target amount were achieved. The assumptions used to determine the fair value are level 3 fair value measurements which include unobservable inputs that are significant to the measurement of the fair value of the assets or liabilities that are supported by little or no market data.
The assumptions used in the Monte Carlo valuation model to value the PSUs were as follows:
Grant Date
June 1, 2020
Grant date fair value per share $ 30.70 
Expected term (in years) 3
Volatility 42.68  %
Risk-free interest rate 0.20  %
Dividend yield —  %
Allocation of Stock-Based Compensation Expense
The following table presents the allocation of stock-based compensation expense:
Three months ended June 30, Six months ended June 30,
(in thousands) 2021 2020 2021 2020
Cost of revenue $ 1,395  $ 1,114  $ 2,479  $ 2,087 
Research and development 1,233  1,023  2,233  1,989 
Sales and marketing 2,432  1,961  4,757  3,821 
General and administrative 2,063  2,268  4,516  4,310 
Total stock-based compensation $ 7,123  $ 6,366  $ 13,985  $ 12,207 

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11.Income Taxes
The Company recorded a $0.3 million and $0.1 million provision for income taxes for the six months ended June 30, 2021 and 2020, respectively. The provision for income taxes for the six months ended June 30, 2021 was primarily due to foreign income and withholding taxes. The expense for the six months ended June 30, 2020 was primarily due to the accretion of deferred tax liability associated with indefinite lived intangibles, taxes on international operations and state income taxes.
As of June 30, 2021, the Company has provided a valuation allowance against certain federal and state deferred tax assets. Management continues to evaluate the realizability of deferred tax assets and the related valuation allowance. If management's assessment of the deferred tax assets or the corresponding valuation allowance were to change, the Company would record the related adjustment to income during the period in which management makes the determination.
As of June 30, 2021, the statute of limitations lapsed on the FIN48 liabilities in the amount of $50 thousand.
On March 11, 2021 the American Rescue Plan Act of 2021 (the “Act”) was enacted and signed into law. The Act contains several tax provisions, including expansion of employment tax credits. The Company is currently evaluating the impact of the Act on its consolidated financial statements, but does not expect the tax provisions will result in a material impact to the Company’s tax position.

12.Business Acquisitions
Acquisition of PatientSafe Solutions, Inc.
On May 4, 2021, the Company acquired all of the outstanding equity interest of PatientSafe for approximately $36.0 million in cash, net of cash acquired of $0.2 million. PatientSafe provides a clinical communication and collaboration (CC&C) solution for smartphones that is engineered to run in the cloud. The solution is designed for hospitals and health systems that have invested in their electronic health record (EHR) mobile workflow software, are smartphone centric, and prefer a cloud-based CC&C solution. The solution enhances care team mobility and efficiency at the point of care through effective, reliable communication and clinical workflows. Nurses can document to the EHR while receiving filtered, prioritized alarm and task notifications. Physicians can communicate with the nurses and team members supporting their patients. Two-way communication with a hospital’s EHR system enables clinicians to complete certain documentation and manage patient-centric communication from their smartphones. Moving forward the PatientSafe solutions will be marketed and sold under the Vocera Edge brand.
The following table presents the preliminary fair value of the identifiable assets acquired and liabilities assumed as of the acquisition date:
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(in thousands, except useful lives) Estimated Fair Value Estimated Useful life (in years)
Assets
Current assets $ 1,527 
Restricted cash 598 
Fixed assets, net 208 
Operating lease right-of-use asset 2,089 
Other assets 74 
Intangibles assets
Customer relationships 3,290  8
Developed technology 5,260  3
Backlog 3,710  4
Goodwill 25,678 
Total assets $ 42,434 
Liabilities
Current liabilities 3,642 
Deferred revenue 1,774 
Operating lease liabilities, long term 906 
Other long-term liabilities 112 
Total liabilities 6,434 
Net assets acquired $ 36,000 
The estimated fair values of identifiable intangible assets were primarily determined using discounted cash flow models. The estimation of the fair value of the intangible assets required the use of valuation techniques and entailed consideration of all the relevant factors that might affect the fair value, such as present value factors and estimates of future revenues and costs. The amortization of developed technology and backlog is recorded in "cost of revenues" for product and the amortization for the remaining intangibles is recorded in "sales and marketing" expenses on the condensed consolidated statement of operations.

The excess of the acquisition consideration over the fair values of the underlying net assets acquired was recorded as goodwill. Goodwill is largely attributed to the synergy of PatientSafe’s proprietary solutions with the Company’s existing customer base, dedicated sales force and cross selling opportunities with the Company’s other solutions. Goodwill is not amortized but is instead tested for impairment at least annually or more frequently if indicators of impairment are present. The goodwill acquired as part of the acquisition is not deductible for tax purposes.

The Company incurred $1.7 million of acquisition-related costs in the three months ended June 30, 2021 that were expensed as incurred. These costs are recorded as general and administrative expenses in the consolidated statement of operations.
The acquisition did not result in material contributions to revenue or net loss in the condensed consolidated financial statements in the six months period ended June 30, 2021. Additionally, pro forma financial information is not provided for consolidated revenue and net income as such amounts attributable to PatientSafe were insignificant to the Company’s condensed consolidated financial statements taken as a whole.


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Item 2.    Management’s Discussion and Analysis of Financial Condition and Results of Operations
Forward-Looking Statements
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our condensed consolidated financial statements and related notes appearing elsewhere in this Quarterly Report on Form 10-Q and in our other Securities and Exchange Commission, or SEC, filings, including our Annual Report on Form 10-K for the year ended December 31, 2020, filed with the SEC on February 25, 2021. These discussions contain forward-looking statements reflecting our current expectations that involve risks and uncertainties which are subject to safe harbors under the Securities Act of 1933, as amended, or the Securities Act, and the Securities Exchange Act of 1934, as amended, or the Exchange Act. These forward-looking statements include, but are not limited to, statements concerning our plans, objectives, expectations and intentions, future financial position, future revenues, projected costs, expectations regarding demand and acceptance for our technologies, growth opportunities and trends in the market in which we operate, prospects and plans and objectives of management. The words “anticipates,” “believes,” “estimates,” “expects,” “intends,” “may,” “plans,” “projects,” “will,” “would” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements, and you should not place undue reliance on our forward-looking statements. These forward-looking statements involve risks and uncertainties that could cause our actual results to differ materially from those in the forward-looking statements, including, without limitation, the risks set forth in Part II, Item 1A, “Risk Factors” in this Quarterly Report on Form 10-Q and in our other filings with the Securities and Exchange Commission. We do not assume any obligation to update any forward-looking statements.
Business Overview
We are a provider of secure, integrated, intelligent communication and clinical workflow solutions, focused on empowering mobile workers in healthcare, hospitality, retail, energy, education and other mission-critical mobile work environments, in the United States and internationally. The significant majority of our business is generated from sales of our solutions in the healthcare market to help our customers enhance quality of care, safety, patient and staff experience and improve operational efficiency.
We primarily sell devices, software, subscriptions and support, and professional services directly to end users. Total revenue increased $16.8 million from $88.0 million for the six months ended June 30, 2020 to $104.8 million for the six months ended June 30, 2021. Our total deferred revenue and backlog was $218.4 million as of June 30, 2021 compared to $173.9 million as of December 31, 2020. For the six months ended June 30, 2021, we recorded a net loss of $9.9 million compared to a net loss of $13.9 million for the six months ended June 30, 2020.
Our diverse customer base ranges from large hospital systems to small local hospitals, as well as other healthcare facilities and customers in non-healthcare markets. We do not rely on any one customer for a substantial portion of our revenue. While we have international customers in other English-speaking countries such as Canada, the United Kingdom, Australia, New Zealand and parts of the Middle East, most of our customers are located in the United States. International customers represented 10.0%, 10.7% and 8.7% of our revenue in the six months ended June 30, 2021, and the years ended December 31, 2020 and 2019, respectively. We believe certain international markets represent attractive growth opportunities.
We outsource the manufacturing of our hardware products. Our outsourced manufacturing model allows us to scale our business without the significant capital investment and on-going expenses required to establish and maintain manufacturing operations. We work closely with our contract manufacturers, including Sercomm and SMTC Corporation, and key suppliers to manage the procurement, quality and cost of components. We seek to maintain an optimal level of finished goods inventory to meet our forecast for sales and unanticipated shifts in sales volume and mix.
In the current quarter, we acquired PatientSafe for $36.0 million, net of $0.2 million of cash acquired. For further discussion on the acquisition, please refer to Note 12 in the notes to the condensed consolidated financial statements.
COVID-19 Pandemic
The outbreak of the novel coronavirus, SARS-CoV-2, or COVID-19, has evolved into a global pandemic and public health emergency. Many federal, state and local governments and private entities have mandated various restrictions, including travel restrictions, restrictions on public gatherings, stay at home orders and advisories and quarantining of people who may have been exposed to the virus. Since our last filing, COVID-19 infections have continued and are increasing in many geographies of the world. Although there is an increase in vaccinations, infection rates could continue to increase due to a variety of factors, including new variants of the disease.
Over the course of the COVID-19 pandemic, our business has been impacted in several ways, including the following:
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•We have taken measures to protect the health and safety of our employees, primarily by shifting the majority of our employees to remote work.
•Our access to our healthcare customers’ locations for sales and implementation activities remains limited in some cases. The sales cycle and implementation timeline for broader strategic deals in some cases has been elongated as they shifted their primary focus to preparing for and responding to the pandemic.
•We have experienced some delays in receiving parts due to supplier and shipping issues.
Overall, the outbreak did not have a material impact on our operating results or business in the six months ended June 30, 2021. While future impacts cannot be predicted at this time, the shift in hospital resources, attention to treatment of COVID-19 patients and declines in hospital revenues may result in reduced demand for our products and solutions, longer sales cycles and/or delays of customer implementations, which could negatively impact our financial condition.
We have generated operating cash flows in the past and our $291.9 million in cash and short-term investments provides us with ample liquidity to meet our current needs. However, given the dynamic nature of this situation, we cannot accurately estimate the impacts of COVID-19 on our financial condition, results of operations or cash flows.
Convertible Senior Notes
In March 2021, we issued $200.0 million aggregate principal amount of 0.50% Convertible Senior Notes, due 2026 (the “2026 Notes”). We used part of the net proceeds from the issuance of the 2026 Notes to retire approximately $102.9 million aggregate principal amount of the 2023 Notes in privately-negotiated transactions for consideration of $102.9 million in cash and 1,277,731 shares of common stock (the "2023 Note Repurchase Transactions"). We separately settled the accrued interest of approximately $0.5 million associated with the retired 2023 Notes in cash.
In connection with the 2026 Notes, we granted to the initial purchasers an overallotment option under the purchase agreement to purchase up to an additional $30.0 million aggregate principal amount of the 2026 Notes to cover overallotments within a 30-day period. The purchasers partially exercised the overallotment option on April 5, 2021 and we issued an additional $24.5 million of the 2026 Notes.
In connection with the pricing of the 2026 Notes, we entered into privately negotiated capped call transactions with certain counterparties, the “2026 Capped Calls”. The 2026 Capped Calls have an initial strike price of approximately $60.14 per share, subject to certain adjustments, which correspond to the initial conversion price of the 2026 Notes. The 2026 Capped Calls have initial cap prices of $77.96 per share, subject to certain adjustments. We used proceeds of $15.5 million to purchase the Capped Calls, which were recorded as a reduction to additional paid-in capital. Additionally, in connection with the partial exercise of the overallotment option and the issuance by us of $24.5 million of 2026 Notes, on April 5, 2021, we entered into $1.9 million of additional privately negotiated capped calls. The 2023 Capped Calls were not impacted by the 2023 Note Repurchase Transactions and continue to remain outstanding. For further discussion on the Capped Calls, please refer to Note 8 in the notes to the condensed consolidated financial statements.
We expect to use the remaining net proceeds for general corporate purposes, which may include funding research and development, increasing working capital, acquisitions or investments in complementary businesses, products or technologies and capital expenditures.

Critical Accounting Policies and Estimates
There have been no changes to our critical accounting policies and estimates as compared to the critical accounting policies and estimates described in our Annual Report on Form 10-K for the year ended December 31, 2020, except as disclosed in Note 1 to the condensed consolidated financial statements “Recently Adopted Accounting Pronouncements”.
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Results of Operations
The following table presents our results of operations for the periods indicated. The period-to-period comparisons of results are not necessarily indicative of results for future periods.
Three months ended June 30, Six months ended June 30,
Consolidated statement of operations data: 2021 2020 2021 2020
(unaudited)
(in thousands) Amount % Revenue Amount % Revenue Amount % Revenue Amount % Revenue
Revenue
  Product $ 28,344  50.5  % $ 23,951  50.6  % $ 50,952  48.6  % $ 41,801  47.5  %
  Service 27,836  49.5  23,396  49.4  53,896  51.4  46,219  52.5 
     Total revenue 56,180  100.0  47,347  100.0  104,848  100.0  88,020  100.0 
Cost of revenue
  Product 7,541  13.5  7,710  16.3  14,497  13.9  14,074  16.0 
  Service 12,383  22.0  9,694  20.5  23,210  22.1  20,217  23.0 
     Total cost of revenue 19,924  35.5  17,404  36.8  37,707  36.0  34,291  39.0 
Gross profit 36,256  64.5  29,943  63.2  67,141  64.0  53,729  61.0 
Operating expenses:
  Research and development 12,006  21.4  9,349  19.7  22,356  21.2  18,381  20.9 
  Sales and marketing 18,425  32.8  15,998  33.8  36,095  34.5  32,961  37.4 
  General and administrative 9,064  16.1  6,923  14.6  16,339  15.6  13,314  15.1 
     Total operating expenses 39,495  70.3  32,270  68.1  74,790  71.3  64,656  73.4 
Loss from operations (3,239) (5.7) (2,327) (4.9) (7,649) (7.3) (10,927) (12.4)
Interest income 295  0.5  913  1.9  641  0.6  2,033  2.3 
Interest expense (794) (1.4) (2,308) (4.9) (1,571) (1.4) (4,582) (5.2)
Other income (expense), net 1,544  2.7  210  0.4  (1,002) (1.0) (381) (0.4)
Loss before income taxes (2,194) (3.9) (3,512) (7.5) (9,581) (9.1) (13,857) (15.7)
Provision for income taxes (88) (0.2) 44  0.1  (334) (0.4) (81) (0.1)
Net loss $ (2,282) (4.1) % $ (3,468) (7.4) % $ (9,915) (9.5) % $ (13,938) (15.8) %
Revenue:
Three months ended June 30, Six months ended June 30,
2021 2020 Change 2021 2020 Change
(in thousands) Amount Amount Amount % Amount Amount Amount %
Product revenue
Device $ 16,256  $ 17,100  $ (844) (4.9) % $ 31,529  $ 31,003  $ 526  1.7  %
Software 12,088  6,851  5,237  76.4  19,423  10,798  8,625  79.9 
Total product 28,344  23,951  4,393  18.3  50,952  41,801  9,151  21.9 
Service revenue
Subscription and support 22,641  18,994  3,647  19.2  43,600  37,063  6,537  17.6 
Professional services and training 5,195  4,402  793  18.0  10,296  9,156  1,140  12.5 
Total service 27,836  23,396  4,440  19.0  53,896  46,219  7,677  16.6 
Total revenue $ 56,180  $ 47,347  $ 8,833  18.7  % $ 104,848  $ 88,020  $ 16,828  19.1  %

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Three months ended June 30, 2021 compared to the three months ended June 30, 2020.
Total revenue increased $8.8 million, or 18.7%, for the three months ended June 30, 2021 compared to the three months ended June 30, 2020.
Product revenue increased $4.4 million, or 18.3%, for the three months ended June 30, 2021 compared to the three months ended June 30, 2020. Device revenue decreased $0.8 million, or 4.9%, and software revenue increased $5.2 million, or 76.4% for the three months ended June 30, 2021 compared to the three months ended June 30, 2020. The decrease in device revenue was driven primarily by decreased unit volume sales of Badges and related accessories. The increase in software revenue was mainly a result of an increase in the number of software licenses delivered to our customers.
Service revenue increased $4.4 million, or 19.0%, for the three months ended June 30, 2021 compared to the three months ended June 30, 2020. Subscription and support revenue increased $3.6 million, or 19.2%, and professional services and training revenue increased $0.8 million, or 18.0%, for the three months ended June 30, 2021 compared to the three months ended June 30, 2020. The increase in subscription and support revenue was primarily the result of having a larger customer base purchasing software maintenance contracts. The increase in professional services and training revenue was due to an increase in implementation services for our solutions.
Six months ended June 30, 2021 compared to the six months ended June 30, 2020.
Total revenue increased $16.8 million, or 19.1%, for the six months ended June 30, 2021 compared to the six months ended June 30, 2020.
Product revenue increased $9.2 million, or 21.9%, for the six months ended June 30, 2021 compared to the six months ended June 30, 2020. Device revenue increased $0.5 million, or 1.7%, and software revenue increased $8.6 million, or 79.9% for the six months ended June 30, 2021 compared to the six months ended June 30, 2020. The increase in device revenue was driven primarily by an increased percentage of sales of the Smartbadge out of total devices sold. The increase in software revenue was mainly a result of an increase in the number of software licenses delivered to our customers.
Service revenue increased $7.7 million, or 16.6%, for the six months ended June 30, 2021 compared to the six months ended June 30, 2020. Subscription and support revenue increased $6.5 million, or 17.6%, and professional services and training revenue increased $1.1 million, or 12.5%, for the six months ended June 30, 2021 compared to the six months ended June 30, 2020. The increase in subscription and support revenue was primarily the result of having a larger customer base purchasing software maintenance contracts. The increase in professional services and training revenue was due to an increase in implementation services for our solutions.
Cost of revenue:
Three months ended June 30, Six months ended June 30,
2021 2020 Change 2021 2020 Change
(in thousands) Amount Amount Amount % Amount Amount Amount %
Cost of revenue
Product $ 7,541  $ 7,710  $ (169) (2.2) % $ 14,497  $ 14,074  $ 423  3.0  %
Service 12,383  9,694  2,689  27.7  23,210  20,217  2,993  14.8 
Total cost of revenue $ 19,924  $ 17,404  $ 2,520  14.5  % $ 37,707  $ 34,291  $ 3,416  10.0  %
Gross margin
Product 73.4  % 67.8  % 5.6  % 71.5  % 66.3  % 5.2  %
Service 55.5  % 58.6  % (3.1) % 56.9  % 56.3  % 0.6  %
Total gross margin 64.5  % 63.2  % 1.3  % 64.0  % 61.0  % 3.0  %
Three months ended June 30, 2021 compared to the three months ended June 30, 2020.
Cost of product revenue decreased $0.2 million, or 2.2%, for the three months ended June 30, 2021 compared to the three months ended June 30, 2020. This was primarily driven by a decrease in the unit volume of Badges and related accessories sold and a decrease in inventory costs. For the same comparative periods, product gross margin increased primarily as a result of a higher proportion of software revenue versus device revenue.
Cost of service revenue increased $2.7 million, or 27.7%, for the three months ended June 30, 2021 compared to the three months ended June 30, 2020. Cost of service revenue increased due to higher compensation and benefits as a result of increased headcount related to core business as well as the acquisitions of PatientSafe and Ease. For the same comparative periods,
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service gross margin as a percentage of service revenue decreased primarily as a result of an increase in costs related to the acquisitions of PatientSafe and Ease.
Six months ended June 30, 2021 compared to the six months ended June 30, 2020.
Cost of product revenue increased $0.4 million, or 3.0%, for the six months ended June 30, 2021 compared to the six months ended June 30, 2020. This was primarily driven by an increase in amortization related to the acquisitions of Ease and PatientSafe. For the same comparative periods, product gross margin increased primarily as a result of higher software revenue.
Cost of service revenue increased $3.0 million, or 14.8%, for the six months ended June 30, 2021 compared to the six months ended June 30, 2020. For the same comparative periods, service gross margin as a percentage of service revenue increased primarily as a result of an increase in subscription and support revenue. In addition, cost of service revenue increased due to increased compensation and benefits as a result of increased headcount and costs related to core business and the acquisitions of PatientSafe and Ease.
Operating expenses:
Three months ended June 30, Six months ended June 30,
2021 2020 Change 2021 2020 Change
(in thousands) Amount Amount Amount % Amount Amount Amount %
Operating expenses
Research and development $ 12,006  $ 9,349  $ 2,657  28.4  % $ 22,356  $ 18,381  $ 3,975  21.6  %
Sales and marketing 18,425  15,998  2,427  15.2  36,095  32,961  3,134  9.5 
General and administrative 9,064  6,923  2,141  30.9  16,339  13,314  3,025  22.7 
Total operating expenses $ 39,495  $ 32,270  $ 7,225  22.4  % $ 74,790  $ 64,656  $ 10,134  15.7  %
Three months ended June 30, 2021 compared to the three months ended June 30, 2020.
Research and development expense. Research and development expense increased $2.7 million, or 28.4%, for the three months ended June 30, 2021 compared to the three months ended June 30, 2020. This was primarily due to an increase of $1.9 million in compensation, benefits and hiring costs associated with increased headcount and an increase of $0.7 million in outside services and development.
Sales and marketing expense. Sales and marketing expense increased $2.4 million, or 15.2%, for the three months ended June 30, 2021 compared to the three months ended June 30, 2020. This was primarily due to an increase of $1.8 million in compensation, benefits and hiring costs associated with increased headcount, $0.3 million increase in amortization related to the acquisition of Ease and PatientSafe and an increase of $0.3 million in marketing development costs.
General and administrative expense. General and administrative expense increased $2.1 million, or 30.9%, for the three months ended June 30, 2021 compared to the three months ended June 30, 2020. This was primarily due to an increase in compensation, benefits and hiring costs of $1.2 million due to increased headcount, severance and retention costs related to the acquisition of PatientSafe and an increase of $0.8 million in outside services.
Six months ended June 30, 2021 compared to the six months ended June 30, 2020.
Research and development expense. Research and development expense increased $4.0 million or 21.6%, for the six months ended June 30, 2021 compared to the six months ended June 30, 2020. This was primarily due to an increase of $2.8 million in compensation, benefits and hiring costs associated with increased headcount, an increase of $0.9 million in outside services and development, and an increase of $0.3 million in research and development equipment.
Sales and marketing expense. Sales and marketing expense increased $3.1 million or 9.5% for the six months ended June 30, 2021 compared to the six months ended June 30, 2020. This was primarily due to an increase in compensation, benefits and hiring costs of $3.0 million resulting from higher headcount, an increase of $0.5 million in amortization related to the acquisition of Ease and PatientSafe, and an increase of $0.3 million in outside services. This increase was partially offset by a decrease in travel expense of $0.7 million.
General and administrative expense. General and administrative expense increased $3.0 million or 22.7% for the six months ended June 30, 2021 compared to the six months ended June 30, 2020. This was primarily due to an increase in compensation, benefits and hiring costs of $1.8 million due to increased headcount, severance and retention costs related to the acquisition of PatientSafe and achievement of performance related compensation targets and an increase of $1.2 million in outside services.
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Interest income and Other income (expense), net:
Three months ended June 30, Six months ended June 30,
(in thousands) 2021 2020 Change 2021 2020 Change
Interest income $ 295  $ 913  $ (618) $ 641  $ 2,033  $ (1,392)
Interest expense (794) (2,308) 1,514  (1,571) (4,582) 3,011 
Other income (expense), net 1,544  210  1,334  (1,002) (381) (621)
Three months ended June 30, 2021 compared to the three months ended June 30, 2020.
Interest income. Interest income decreased $0.6 million for the three months ended June 30, 2021 compared to the three months ended June 30, 2020. This decrease was due to earning a lower rate of return on our investments.
Interest expense. For the three months ended June 30, 2021 we had interest expense of $0.8 million resulting from the amortization of debt issuance costs and the contractual interest incurred on the issuance of the Notes. This decrease of $1.5 million from June 30, 2020 was primarily due to the impact of the adoption of ASU 2020-06 Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity which eliminates the debt discount and amortization. The amortization of the debt discount was previously accounted for as part of interest expense and represented $1.6 million of the total interest expense for the three months ended June 30, 2020.
Other income (expense), net. The change in other income in the three months ended June 30, 2021 compared to the three months ended June 30, 2020 was primarily due to the change in the fair value adjustment of the Ease contingent consideration included in earnings.
Six months ended June 30, 2021 compared to the six months ended June 30, 2020.
Interest income. Interest income decreased $1.4 million for the six months ended June 30, 2021 compared to the six months ended June 30, 2020. This decrease was due to earning a lower rate of return on our investments.
Interest expense. For the six months ended June 30, 2021 we had interest expense of $1.6 million resulting from the amortization of debt issuance costs and the contractual interest incurred on the issuance of the Notes. This decreased $3.0 million from the six months ended June 30, 2020 which primarily due to the impact of the adoption of ASU 2020-06 Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity which eliminates the debt discount and amortization. The amortization of the debt discount was previously accounted for as part of interest expense and represented $3.2 million of the total interest expense for the six months ended June 30, 2020.
Other income (expense), net. The change in other expense in the six months ended June 30, 2021 compared to the six months ended June 30, 2020 was primarily due to the $2.1 million inducement loss resulting from the repurchase of the 2023 Notes partially offset by the change in the fair value adjustment of the Ease contingent consideration included in earnings of $0.8 million for the six months ended June 30, 2021 .
Liquidity and Capital Resources
As of June 30, 2021, we had cash and cash equivalents and short-term investments of $291.9 million.
In March 2021, we issued $200.0 million aggregate principal amount of 0.50% Convertible Senior Notes and we used part of the net proceeds from the issuance of the 2026 Notes to retire approximately $102.9 million aggregate principal amount of the 2023 Notes. In addition, in April 2021, the purchasers partially exercised the overallotment option and we issued an additional $24.5 million aggregate principal amount of the 2026 Notes. For additional information, see Note 8 of Notes to Consolidated Financial Statements.
We believe that our existing sources of liquidity will satisfy our working capital and capital requirements for at least the next twelve months and the foreseeable future.
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Six months ended June 30,
(in thousands) 2021 2020
Consolidated Statements of Cash Flow Data:
Net cash provided by operating activities $ 11,448  $ 6,861 
Net cash used in investing activities (94,060) (1,197)
Net cash provided by (used in) financing activities 88,714  (1,982)
Net increase in cash, cash equivalents and restricted cash $ 6,102  $ 3,682 
Operating activities
Cash provided by operating activities was $11.4 million for the six months ended June 30, 2021. Cash provided by operating activities was the result of a net loss of $9.9 million and a decrease in lease-related performance liabilities of $0.6 million, offset by non-cash items such as stock-based compensation of $14.0 million, non-cash lease expense of $1.2 million, amortization of debt issuance costs of $0.6 million, amortization of $4.6 million for property and equipment and acquired intangible assets and inducement loss of $2.1 million resulting from the repurchase of our 2023 Notes as well as $1.6 million of other items primarily driven by the accretion of investments. With respect to changes in assets and liabilities, we experienced a decrease in accounts receivable of $10.0 million, an increase of $0.1 million in other receivables, a decrease of $1.4 million in inventories, an increase of $1.1 million in prepaid expenses and other assets, an increase in deferred commissions of $2.6 million, a decrease of $0.5 million in accounts payable, a decrease of $5.3 million in accrued payroll and other liabilities and a $4.0 million decrease in deferred revenue.
Cash provided by operating activities was $6.9 million for the six months ended June 30, 2020, due to a net loss of $13.9 million, offset by non-cash items such as stock-based compensation of $12.2 million, amortization of debt discount and issuance costs of $3.5 million, a decrease in lease-related performance liabilities of $0.6 million and depreciation and amortization of $2.8 million for property and equipment and acquired intangible assets. With respect to changes in assets and liabilities, we experienced a decrease in accounts receivable of $14.3 million, an increase of $0.3 million in other receivables, an increase of $3.9 million in inventories, an increase of $0.6 million in prepaid expenses and other assets, an increase in deferred commissions of $0.6 million, a decrease of $1.0 million in accounts payable, an increase of $1.2 million in accrued payroll and other liabilities and a $7.5 million decrease in deferred revenue.
Investing activities
Cash used in investing activities was $94.1 million for the six months ended June 30, 2021, due to $127.2 million in purchases of short-term investments and $35.4 million used in the acquisition of PatientSafe offset by $69.4 million of short-term investment maturities. An additional $0.9 million of cash was used for the purchase of property and equipment and leasehold improvements.
Cash used in investing activities was $1.2 million for the six months ended June 30, 2020, due to $72.1 million of short-term investment maturities, $14.4 million from sales of short-term investments, offset by $86.3 million for purchases of short-term investments. An additional $1.4 million of cash was used for the purchase of property and equipment and leasehold improvements.
Financing activities
Cash provided by financing activities was $88.7 million for the six months ended June 30, 2021, attributable to $217.8 million of net proceeds from convertible senior notes, $2.1 million of proceeds from issuance of common stock from the employee stock purchase plan, $0.2 million of cash from lease-related performance obligations, and $1.6 million of proceeds from stock option exercises, offset by $102.9 million related to the repayment of a portion of our 2023 Notes, a $17.4 million payment for the purchase of capped calls related to our 2026 Notes and $12.7 million cash paid for employee taxes collected via net share settlement.

Cash used in financing activities was $2.0 million for the six months ended June 30, 2020, attributable to $1.3 million of proceeds from stock option exercises, $2.0 million of proceeds from issuance of common stock from the employee stock purchase plan and $0.3 million of cash from lease-related performance obligations. This was offset by $5.6 million cash paid for employee taxes collected via net share settlement.
Item 3.    Quantitative and Qualitative Disclosures About Market Risk
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The primary objective of our investment activities is to preserve principal while maximizing yields without significantly increasing risk. To achieve this objective, historically we have invested in money market funds. With the proceeds from our two public offerings in 2012 and the issuance of our convertible senior notes in 2018 and 2021, we have invested in a broader portfolio of high credit quality short-term securities. To minimize the exposure due to an adverse shift in interest rates, we maintain an average portfolio duration of one year or less.
Our primary exposure to market risk is interest income and expense sensitivity, which is affected by changes in the general level of the interest rates in the United States. However, because of the short-term nature of our interest-bearing securities, a 10% change in market interest rates would not be expected to have a material impact on our consolidated financial condition or results of operations.
Historically our operations have consisted of research and development and sales activities in the United States. As a result, our financial results have not been materially affected by factors such as changes in foreign currency exchange rates or economic conditions in foreign markets. We are considering plans to expand our international presence. Accordingly, we expect that our exposure to changes in foreign currency exchange rates and economic conditions may increase in future periods.
Item 4.    Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Disclosure controls and procedures are designed to ensure that information required to be disclosed by us in reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in reports filed under the Exchange Act is accumulated and communicated to management, including principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. There are inherent limitations to the effectiveness of any system of disclosure controls and procedures, including the possibility of human error and the circumvention or overriding of the controls and procedures. Accordingly, even effective disclosure controls and procedures can only provide reasonable assurance of achieving their control objectives.
As of June 30, 2021, we carried out an evaluation under the supervision of, and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act. Based on our evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of June 30, 2021.
Changes in Internal Control over Financial Reporting
There was no change in our internal control over financial reporting which occurred during the period covered by this Quarterly Report on Form 10-Q which has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
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PART II: OTHER INFORMATION
Item 1.    Legal Proceedings
From time to time, we may be involved in lawsuits, claims, investigations and proceedings, consisting of intellectual property, commercial, employment and other matters which arise in the ordinary course of business.
Item 1A.    Risk Factors
Investing in our common stock involves a high degree of risk. You should carefully consider the risks and uncertainties described below, together with all of the other information set forth in this Quarterly Report on Form 10-Q. Our business, financial condition, results of operations or future prospects could be materially and adversely harmed if any of the following risks, or other risks or uncertainties that are not yet identified or that we currently believe are immaterial, actually occur. The trading price of our common stock could decline due to any of these risks or uncertainties, and, as a result, you may lose all or part of your investment.
Summary of Risk Factors

Our business is subject to a number of risks and uncertainties, including those risks discussed at-length below. These risks include, among others, the following:
•We have incurred significant losses in the past and will likely experience losses in the future.
•We depend on sales in the healthcare market for the majority of our revenue, and a decrease in sales in the healthcare market would harm our business.
•Our sales cycle can be lengthy and unpredictable, which may cause our revenue and operating results to fluctuate significantly.
•If we fail to offer high-quality products and services, our operating results and our ability to sell these in the future will be harmed.
•We primarily compete in the rapidly evolving and competitive healthcare market, and if we fail to effectively respond to competitive pressures, our business and operating results could be harmed.
•We depend on some sole source and limited source suppliers, and if we are unable to source our components from them, our business and operating results could be harmed.
•Because we depend on contract manufacturers and original design manufacturers, our operations could be harmed and we could lose sales if we encounter problems with these manufacturers.
•If we fail to forecast our manufacturing requirements accurately or fail to properly manage our inventory with our contract manufacturers, we could incur additional costs or experience manufacturing delays that could impact the timing of our revenue recognition and adversely affect our operating results.
•The COVID-19 outbreak has had a material impact on the U.S. and global economies and could have a material adverse impact on our employees, suppliers, manufacturing and customers, which could adversely and materially impact our business, financial condition and results of operations.
•Our business has gone through cycles of expansion, relative stability and contraction, and if we are not able to manage such cycles effectively, our operating results may suffer.
•Our revenue and operating results have fluctuated, and are likely to continue to fluctuate, making our quarterly results difficult to predict, which may cause us to miss analyst expectations and may cause the price of our common stock to decline.
•Developments in the healthcare industry and governing regulations have negatively affected and may continue to negatively affect our business.
•If we fail to increase market awareness of our brand and solutions, and expand our sales and marketing operations, our business could be harmed.
•Failure to protect our information technology infrastructure against cyber-based attacks, network security breaches, service interruptions, or data corruption could significantly disrupt our operations and adversely affect our business and operating results.
•Our international operations subject us, and may increasingly subject us in the future, to operational, financial, economic and political risks abroad.
•Our efforts to sell our solutions in non-healthcare markets may not be successful.
•If we are unable to protect our intellectual property rights, our competitive position could be harmed, or we could be required to incur significant expenses to enforce our rights.
•We have indebtedness in the form of convertible senior notes. The provisions of indenture for the 2023 notes and 2026 notes (the Notes), accounting method for the Notes and capped call transaction entered into related to the Notes could have a material effect on our operating results, value of the Notes and our common stock or may deter or prevent a business combination.

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Risks related to our business and industry
We have incurred significant losses in the past and will likely experience losses in the future.
We have incurred significant losses in the past and reported a net loss of $9.9 million for the six months ended June 30, 2021. As of June 30, 2021, we had an accumulated deficit of $154.7 million. If we cannot make consistent progress toward future profitability, our business and our stock price may be adversely affected.
Our ability to be profitable in the future depends upon continued demand for our solutions from existing and new customers. Further adoption of our solutions depends upon our ability to improve quality of care, enhance patient and staff satisfaction, increase hospital efficiency and productivity, and bring value to customers outside of healthcare. In addition, our profitability will be affected by, among other things, our ability to execute on our business strategy, the timing and size of orders, the pricing and costs of our solutions, competitive offerings, macroeconomic conditions affecting the health care industry and the extent to which we invest in sales and marketing, research and development and general and administrative resources.

We depend on sales in the healthcare market for the majority of our revenue, and a decrease in sales in the healthcare market would harm our business.

To date, substantially all of our revenue has been derived from sales to the healthcare market and, in particular, hospitals. Sales to the healthcare market accounted for 98%, 98% and 96% of our revenue for the six months ended June 30, 2021 and the years ended December 31, 2020 and 2019, respectively. We anticipate that sales to the healthcare market will represent a significant portion of our revenue for the foreseeable future.
Most of our solutions require a substantial upfront investment by new customers. The cost of the initial deployment depends on the number of users and departments involved, the size and age of the hospital and the condition of the existing wireless infrastructure, if any, within the hospital. Even if hospital personnel determine that our solutions provide compelling benefits over their existing communications methods, their hospitals may not have, or may not be willing to spend, the resources necessary to install and maintain wireless infrastructure to initially deploy and support our solutions or expand our solutions to other departments or users. Hospitals face significant budget constraints from the COVID-19 pandemic, as they have had to postpone elective procedures that provide a significant portion of their revenue. Hospital budgets are also constrained by unpredictable patient population trends and commercial reimbursements, and increasing demands from, and competition for, patients. In addition, both governmental and commercial hospitals are experiencing lower Medicare reimbursement rates and higher compliance demands, which add to these budget pressures. Also as part of the tax reform law that came into effect in December 2017, the tax penalty for violating the individual health insurance mandate under the Patient Protection and Affordable Care Act of 2010 (ACA) was set to zero effective in 2019, essentially repealing it. It is uncertain if there will be changes to the ACA, but there have been attempts in the past to repeal or amend the ACA, as well as continue to undertake other healthcare reforms. As a consequence of these regulatory and other factors, hospitals may delay or reduce their spending, which may cause slowdowns and deferral of orders for our solutions, or customers may choose other less expensive solutions, both of which could negatively impact our sales. We might not be able to sustain or increase our revenue from sales of our solutions, or achieve the growth rates that we envision, if hospitals continue to face significant budgetary constraints and reduce their spending on communications systems.

Our sales cycle can be lengthy and unpredictable, which may cause our revenue and operating results to fluctuate significantly.

Our sales cycles can be lengthy and unpredictable. Our sales efforts involve educating our customers about the use and benefits of our solutions, including the technical capabilities of our solutions and the potential cost savings and productivity gains achievable by deploying them. Customers typically undertake a significant evaluation process, which frequently involves not only our solutions but also their existing communications methods and those of our competitors and can result in a lengthy sales cycle that sometimes exceeds twelve months. We spend substantial time, effort and money in our sales efforts without any assurance that our efforts will produce sales. Similarly, our increasing dependence on larger, hospital-wide deployments may increase fluctuations in our revenue and operating results because the failure to complete a significant sale, or the loss of a large customer, will have a greater impact on those results. In addition, purchases of our solutions are frequently subject to budget constraints and shifts, multiple approvals, and unplanned administrative, processing and other delays. We have experienced and may continue to experience elongated sales cycles due to ongoing uncertainty caused by the COVID-19 pandemic, as well as past and future healthcare reform legislation, the impact of shifting federal government budgets, changes to Medicare and Medicaid reimbursement and potential future statutes and rulemaking.

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If we fail to offer high-quality products and services, our operating results and our ability to sell these in the future will be harmed.

Our ability to sell our solutions depends on our ability to offer high-quality product and services. Our solutions incorporate complex technology, are deployed in a variety of complex hospital environments and must interoperate with many different types of devices and hospital systems. While we test the components of our solutions for defects and errors prior to release, we or our customers may not discover a defect or error until after we have deployed our solution, integrated it into the hospital environment and our customer has commenced general use of the solution. In addition, our solutions in some cases are integrated with hardware and software offered by “middleware” vendors to interoperate with nurse call systems, device alarms and other hospital systems. Our software may be partnered with third party software to provide for potential joint solutions with such third party. Our software may also be deployed on third party devices, including devices we resell, which creates additional complexity because we share control of the customer experience. If we cannot successfully integrate our solutions with these vendors as needed or if any hardware or software of these vendors contains any defect or error, then our solutions may not perform as designed, or may exhibit a defect or error.
Our professional services team assists our customers with their wireless infrastructure assessment, clinical workflow design, communication solution configuration, clinical integration, training and project management during the pre-deployment and deployment stages. Once our solutions are deployed within a customer’s facility, the customer typically depends on our technical support team to help resolve technical issues, assist in optimizing the use of our solutions and facilitate adoption of new functionality. In some cases we also use third parties to provide professional services to our customers, which means that we have less control over how these services are performed. If we do not effectively assist our customers in deploying our solutions, succeed in helping our customers quickly resolve technical and other post-deployment issues, or provide effective ongoing support services, our ability to expand the use of our solutions with existing customers and to sell our solutions to new customers will be harmed. If deployment of our solutions is deemed unsatisfactory, we may incur significant costs to attain and sustain customer satisfaction or, in extreme cases, our customers may choose not to deploy our solutions. As we hire new services and support personnel, we may inadvertently hire underperforming people who will have to be replaced, or fail to effectively train such employees, leading in some instances to slower growth, additional costs and poor customer relations. In addition, the failure of channel partners or other outsourced professional support contractors to provide high-quality services and support could also harm sales of our solutions.
Any defects or errors in, or which are attributed to our solutions, or to products or services we resell, could result in:
•delayed market acceptance of our affected solutions;
•loss of revenue or delay in revenue recognition;
•loss of customers or inability to attract new customers;
•diversion of engineering or other resources for remedying the defect or error;
•damage to our brand and reputation;
•delay in delivery of information;
•increased service and warranty costs, including potential replacement costs for product recalls or returns; and
•legal actions by our customers and hospital patients, including product liability claims.
If any of these occur, our operating results and reputation could be harmed.
As we continue to pursue opportunities for larger deals that have greater technical complexity, including deals that require more complex integrations with our customer’s workflows, we may experience a longer time period for our solutions to deploy and as a result, our revenue recognition for these deals may be delayed. Additionally, as we enter agreements with new and existing customers for larger and more complex deals across multiple sites, we have been, and may continue to be, required to agree to customer acceptance and cancellation clauses. With acceptance clauses, delays may occur in obtaining customer acceptance regardless of the quality of our products and services, and may cause us to defer revenue recognition where such acceptance provisions are substantive in nature, or they may require us to incur additional professional services or other costs in an effort to obtain such customer acceptance. Cancellation clauses may result in a customer canceling an order for our hardware, software and services, which could impact our revenue.

We primarily compete in the rapidly evolving and competitive healthcare market, and if we fail to effectively respond to competitive pressures, our business and operating results could be harmed.

Our prospective customers primarily use legacy communication solutions such as wired and wireless phones, pagers and overhead intercoms. We believe that our system is superior to these legacy methods. Manufacturers and distributors of product categories such as cellular phones, pagers, mobile radios and in-building wireless telephones continue to sell their products to hospitals. In addition, the growing proliferation of smartphones and related applications, including cloud-based applications, represents another category of competitive offerings. Furthermore, our clinical integrations and middleware solutions compete
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with a variety of companies that offer clinical integration technology.  Similarly we may face a different set of competitors in our patient and family engagement solutions.
We believe currently there is no directly comparable single competitor that provides a solution for the healthcare market as richly-featured as ours, but we could face such competition in the future. Potential competitors in the healthcare or communications markets include large, multinational companies with significantly more resources to dedicate to product development and sales and marketing. These companies, which may include electronic health record vendors or other large software and healthcare IT companies, may have existing relationships within the hospital, which may enhance their ability to gain a foothold in our market. For example, some of the electronic health record vendors offer secure text messaging as an additional service and have said they plan to expand these offerings to complete more directly with us. Some customers may prefer to purchase a more highly integrated or bundled solution from a single provider or an existing supplier rather than a new supplier, regardless of performance or features. Accordingly, if we fail to effectively respond to competitive pressures, we could experience pricing pressure, reduced profit margins, higher sales and marketing expenses, lower revenue and the loss of market share, any of which would harm our business, operating results or financial condition.

We depend on some sole source and limited source suppliers, and if we are unable to source our components from them, our business and operating results could be harmed.

We depend on sole and limited source suppliers for several hardware components of our solutions, including our batteries and integrated circuits. We purchase inventory generally through individual purchase orders. Any of these suppliers could cease production of our components, cease to provide the necessary levels of support for our use of their components, experience capacity constraints, material shortages, work stoppages, epidemics or contagious diseases, such as the coronavirus outbreak, that negatively impact them and their suppliers, financial difficulties, cost increases or other reductions or disruptions in output, cease operations or be acquired by or enter into exclusive arrangements with, a competitor. For example, we have experienced, and may continue to experience periodic delays in deliveries from our suppliers as a result of the COVID-19 pandemic. These suppliers typically rely on purchase orders rather than long-term contracts with their suppliers, and as a result, the supplier may not be able to secure sufficient materials at reasonable prices or of acceptable quality to build our components in a timely manner.
Any of these circumstances could cause interruptions or delays in the delivery of our solutions to our customers, and this may force us to seek components from alternative sources, which may not have the required specifications, or be available in time to meet demand or on commercially reasonable terms, if at all. Any of these circumstances may also force us to redesign our solutions to incorporate a component from an alternative source if a component becomes unavailable.
Our solutions incorporate multiple software components obtained from licensors on a non-exclusive basis, such as voice recognition software, software supporting the runtime execution of our software platform, and database and reporting software. Our license agreements can be terminated for cause. In many cases, these license agreements specify a limited term and are only renewable beyond that term with the consent of the licensor. If a licensor terminates a license agreement for cause, objects to its renewal or conditions renewal on modified terms and conditions, we may be unable to obtain licenses for equivalent software components on reasonable terms and conditions, including licensing fees, warranties or protection from infringement claims. Some licensors may discontinue licensing their software to us or support of the software version used in our solutions. In such circumstances, we may need to redesign our solutions with substantial cost and time investments to incorporate alternative software components or be subject to higher royalty costs. Any of these circumstances could adversely affect the cost and availability of our solutions.
Third-party licensors generally require us to incorporate specific license terms and conditions in our agreements with our customers. If we are alleged to have failed to incorporate these license terms and conditions, we may be subject to claims by these licensors, incur significant legal costs defending ourselves against such claims and, if such claims are successful, be subject to termination of licenses, monetary damages, or an injunction against the continued distribution of one or more of our solutions.

Because we depend on contract manufacturers and original design manufacturers, our operations could be harmed and we could lose sales if we encounter problems with these manufacturers.

We do not have internal manufacturing capabilities and rely upon two contract manufacturers, Sercomm and SMTC, to make our wearable devices. We have entered into manufacturing agreements with Sercomm and SMTC that are terminable by either party with advance notice and may also be terminated for a material uncured breach. We expect to enter into additional contract manufacturing agreements as we expand our business. We also rely on original design manufacturers (ODMs) to produce accessories, including batteries, chargers and attachments. Any of these suppliers could cease production of our components, cease to provide the necessary levels of support for our use of their components, experience capacity constraints, material
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shortages, work stoppages, epidemics or contagious diseases that negatively impact them and their suppliers, financial difficulties, cost increases or other reductions or disruptions in output, cease operations or be acquired by, or enter into exclusive arrangements with, a competitor. If Sercomm, SMTC, or another contract manufacturer or an ODM is unable or unwilling to continue manufacturing components of our solutions in the volumes and timeframes that we require, fails to meet our quality specifications or significantly increases its prices, we may not be able to deliver our solutions to our customers with the quantities, quality and performance that they expect in a timely manner. As a result, we could lose sales and our operating results could be harmed.
Sercomm, SMTC, other contract manufacturers or ODMs may experience problems that could impact the quantity and quality of hardware components of our solution, including disruptions in their manufacturing operations due to equipment breakdowns, labor strikes or shortages, component or material shortages and cost increases. The majority of the hardware components of our solution are manufactured in Asia or Mexico, and adverse changes in political or economic circumstances, or health related issues such as epidemics or contagious diseases, in those locations could also disrupt our supply and quality of components of our solutions. For example, there is currently a global shortage of semiconductors that are used in a wide variety of products, including ours. Our contract manufacturers currently have an adequate supply of semiconductors to satisfy our expected demand for 2021, but a prolonged shortage could result in manufacturing delays for our products. In addition, U.S. government officials have imposed changes in trade, tariffs, fiscal and tax policies and may do so in the future, and any such changes in the U.S. or in other countries from which we source components of our products could adversely affect our business.
Companies occasionally encounter unexpected difficulties in ramping up production of new products, and we may experience such difficulties with future generations of our products. Sercomm, SMTC, other contract manufacturers and our ODMs also manufacture products for other companies. Generally, our orders represent a relatively small percentage of the overall orders received by Sercomm, SMTC, other contract manufacturers and these ODMs from their customers; therefore, fulfilling our orders may not be a priority in the event Sercomm, SMTC, other contract manufacturers or an ODM is constrained in its ability to fulfill all of its customer obligations. In addition, if Sercomm, SMTC, other contract manufacturers or an ODM is unable or unwilling to continue manufacturing components of our solutions, we may have to identify one or more alternative manufacturers. The process of identifying and qualifying a new contract manufacturer or ODM can be time consuming, and we may not be able to substitute suitable alternative manufacturers in a timely manner or at an acceptable cost. Additionally, transitioning to a new manufacturer may cause us to incur additional costs and delays if the new manufacturer has difficulty manufacturing components of our solutions to our specifications or quality standards.

If we fail to forecast our manufacturing requirements accurately or fail to properly manage our inventory with our contract manufacturer, we could incur additional costs or experience manufacturing delays that could impact the timing of our revenue recognition and adversely affect our operating results.

We place orders with our contract manufacturers, including Sercomm and SMTC, and we and our contract manufacturers place orders with suppliers based on forecasts of customer demand. Because of our international low-cost sourcing strategy, our lead times are long and cause substantially more risk to forecasting accuracy than would result were lead times shorter. Our forecasts are based on multiple assumptions, each of which may introduce errors into our estimates affecting our ability to meet our customers’ demands for our solutions. We also may face additional forecasting challenges due to new product introductions, product transitions in the components of our solutions, or to our suppliers discontinuing production of materials and subcomponents required for our solutions. If demand for our solutions increases significantly, we may not be able to meet demand on a timely basis, and we may need to expend a significant amount of time working with our customers to allocate limited supply and maintain positive customer relations, or we may incur additional costs in order to source additional materials and subcomponents to produce components of our solutions or to expedite the manufacture and delivery of additional inventory. If we underestimate customer demand, we and our contract manufacturer may have inadequate materials and subcomponents on hand to produce components of our solutions, which could result in manufacturing interruptions, shipment delays, deferral or loss of revenue, and damage to our customer relationships. Conversely, if we overestimate customer demand, we and our contract manufacturers may purchase more inventory than required for actual customer orders, resulting in excess or obsolete inventory, thereby increasing our costs and harming our operating results.

If we fail to successfully develop and introduce new solutions and features to existing solutions, our revenue, operating results and reputation could suffer.

Our success depends, in part, upon our ability to develop and introduce new solutions and to add features to existing solutions that meet existing and new customer requirements. We may not be able to develop and introduce new solutions or features on a timely basis or in response to customers’ changing requirements. Similarly, our new solutions and features may not sufficiently differentiate us from competing solutions such that customers can justify deploying our solutions. We expect to incur costs associated with the development and introduction of new solutions before the anticipated benefits or the returns are realized, if
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at all. We may experience technical problems and additional costs as we introduce new features to our software platform, deploy future models of our wireless badges, or deploy new smartphone apps, which can require customers to perform software upgrades to their systems, and integrate new solutions with existing customer clinical systems and workflows. In addition, we may face technical difficulties as we expand into non-English speaking countries and incorporate non-English speech recognition capabilities into our solutions. We also may incur substantial costs or delays in the manufacture of any additional new products or models as we seek to optimize production methods and processes at our contract manufacturers. In addition, we expect that we may at least initially achieve lower gross margins on new models, while endeavoring to reduce manufacturing costs over time. If any of these problems were to arise, our revenue, operating results and reputation could suffer.

The COVID-19 outbreak has had a material impact on the U.S. and global economies and could have a material adverse impact on our employees, suppliers, manufacturing and customers, which could adversely and materially impact our business, financial condition and results of operations.

The outbreak of the novel coronavirus, SARS-CoV-2 (COVID-19) is a global pandemic and both a public health and economic emergency. Many federal, state and local governments and private entities have mandated various restrictions, including travel restrictions, restrictions on public gatherings, stay at home orders and advisories and quarantining of people who may have been exposed to the virus. As the COVID-19 pandemic is complex and rapidly evolving, our business may be negatively affected for a prolonged period of time. At this point, we cannot reasonably estimate the duration and severity of this pandemic, which could have a material adverse impact on our business, results of operations, financial position and cash flows.
The pandemic has affected, and may continue to adversely affect, our customers’ operations, our employees and our employee productivity. It may impact the ability of our customers, subcontractors, partners, and suppliers to operate and fulfill their contractual obligations, and result in an increase in payment defaults, collection costs and/or delays or disruptions in performance. In particular, hospitals and healthcare facilities have prioritized the care and treatment of COVID-19 patients and may have restricted access for most visitors and reduced spending unrelated to COVID-19. These customers have also had to suspend elective procedures in some cases, which generate a majority of their profits, adding to their financial difficulties. While many elective procedures have resumed, it is uncertain whether consumers will seek those procedures due to concerns about COVID-19, and it is also uncertain if elective procedures will be suspended again if cases increase. In response, some have furloughed staff, including those we ordinarily work with to sell and implement our offerings.
Outside of healthcare, some of our clients in the hospitality and retail industries have suspended or modified operations until stay-at-home orders are lifted, and potentially beyond. Although stay-at-home orders have been lifted in many areas, it is uncertain whether consumers will return to those establishments and how successful these businesses will be. As a result, we have experienced delays in planned deployments and changes in customer demand, and could experience additional delays, discounts, customer payment issues, bad debt, potential terminations and unpredictability as our customers continue to respond to the challenges of treating and containing the COVID-19 pandemic.
We have also experienced some disruptions in our supply chain and our manufacturers have similarly experienced disruptions in their supply chains. To the extent our suppliers prioritize the manufacturing of other products or experience facility or business disruptions due to sick employees, stay-at-home orders, supply chain disruptions or otherwise, we may be unable to maintain a sufficient supply of our products to meet demand. Additionally, our employees, in many cases, are working remotely and using various technologies to perform their functions, which may create security risks, inefficiencies and reduced productivity, and reduce the effectiveness of our sales team.
These effects on our business, and the direct effect of the virus and the disruption on our employees and operations, may negatively impact our revenue, profit margins and liquidity. Additionally, the disruption and volatility in the global and domestic capital markets may increase the cost of capital and limit our ability to access capital.
The COVID-19 pandemic has also caused us to modify our business practices including employee travel, customer visits, employee work locations, and cancellation of physical participation in meetings, events and conferences which are important to support our sales approach, and we may take further actions as may be required by government authorities or that we determine are in the best interests of our employees, customers and business partners. A prolonged disruption or any further unforeseen delay in our operations or within any of our business activities could result in reduced revenue. We could also be adversely affected if government authorities impose additional restrictions or extend the length of restrictions on public gatherings, human interactions, mandatory closures, seek voluntary closures, restrict hours of operations or impose curfews, restrict the import or export of products or if suppliers issue mass recalls of products. There is no certainty that such measures will be sufficient to mitigate the risks posed by the virus or otherwise be satisfactory to government authorities.
Both the health and economic aspects of the COVID-19 virus are highly fluid and the future course of each is uncertain. For these reasons and other reasons that may come to light as the coronavirus pandemic and associated protective or preventative
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measures develop, we may experience a material adverse effect on our business operations, revenues and financial condition; however, its ultimate impact is highly uncertain and subject to change.

Our business has gone through cycles of expansion, relative stability and contraction, and if we are not able to manage such cycles effectively, our operating results may suffer.

We have experienced periods of expansion, relative stability and contraction in our revenues and operations in the past. Such fluctuations have placed, and may continue to place, strains on our management systems, infrastructure and other resources. Especially during growth periods, we hire additional direct sales, professional services and marketing personnel domestically and internationally, acquire complementary businesses, technologies or assets, and increase our investment in research and development. Our future operating results depend to a large extent on our ability to successfully implement such plans and manage such investments. To do so successfully we must, among other things:
•manage our expenses in line with our operating plans and current business environment;
•maintain and enhance our operational, financial and management controls, reporting systems and procedures;
•integrate acquired businesses, technologies or assets;
•manage operations in multiple locations and time zones; and
•develop and deliver new solutions and enhancements to existing solutions efficiently and reliably.

We expect to incur costs associated with the investments made to support our business strategy before the anticipated benefits or the returns are realized, if any. If we are unable to grow our business or manage our future growth effectively, we may not be able to take advantage of market opportunities or develop new solutions or enhancements to existing solutions. We may also fail to satisfy customer requirements, maintain quality, execute our business plan or respond to competitive pressures, which could result in lower revenue and a decline in the share price of our common stock.

Our revenue and operating results have fluctuated, and are likely to continue to fluctuate, making our quarterly results difficult to predict, which may cause us to miss analyst expectations and may cause the price of our common stock to decline.

Our operating results have been and may continue to be difficult to predict, even in the near term, and are likely to fluctuate as a result of a variety of factors, many of which are outside of our control.
Comparisons of our revenue and operating results on a period-to-period basis may not be meaningful. You should not rely on our past results as an indication of our future performance. Each of the following factors, among others, could cause our operating results to fluctuate from quarter to quarter:
•the ongoing impact of the COVID-19 pandemic;
•the financial health of our healthcare customers and budgetary constraints on their ability to upgrade their communications, particularly in light of the pandemic;
•the availability of government funding for healthcare facilities operated by the United States federal, state and local governments;
•changes in customer purchasing patterns or sales cycles;
•market acceptance of our Smartbadge and its impact on orders for our existing Badge and related software;
•changes in the regulatory environment affecting our healthcare customers, including impediments to their ability to obtain reimbursement for their services;
•our ability to expand and improve our sales and marketing operations;
•our ability to successfully integrate acquired businesses, technologies or assets;
•the announcement of new significant contracts or relationships;
•the procurement and deployment cycles of our healthcare customers and the length of our sales cycles;
•changes in how healthcare operating and capital budgets are administered by our customers;
•changes in customer deployment timelines;
•variations in the amount of orders booked in a prior quarter but not delivered until later quarters;
•our mix of solutions and the varying revenue recognition rules that apply;
•pricing, including discounts by us or our competitors;
•our ability to expand into non-healthcare markets;
•our ability to develop significant new reseller relationships and maintain existing reseller relationships;
•the financial health of our resellers;
•our ability to successfully deploy our solutions in a timely manner;
•our ability to sell and integrate third-party products and services, and our customer’s satisfaction with those third-party products and services;
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•our ability to forecast demand and manage lead times for the manufacture of our solutions;
•our ability to develop and introduce new solutions and features to existing solutions that achieve market acceptance;
•the announcement of a new product, which may cause sales cycles to lengthen;
•federal government shutdowns;
•occurrence of health epidemics or contagious diseases and potential effects on our business and manufacturing operations;
•fluctuations in foreign currencies in the international markets in which we operate; and
•future accounting pronouncements and changes in accounting policies.

If we do not achieve the anticipated strategic or financial benefits from our acquisitions or if we cannot successfully integrate them, our business and operating results could be harmed.

We have acquired, and in the future may acquire, complementary businesses, technologies or assets that we believe to be strategic. For example, in the prior fiscal year we acquired EASE, a cloud-based communication platform and mobile application, to help enhance care team communication with patients and families, and in the current year, we acquired PatientSafe, a clinical communication and collaboration (CC&C) solution designed for hospitals and health systems that have invested in their EHR mobile workflow software, are smartphone centric, and may prefer a cloud-based CC&C solution. We may not achieve the anticipated strategic or financial benefits, or be successful in integrating EASE or PatientSafe or any acquired businesses, technologies or assets. If we cannot effectively integrate the acquired business and products into our business, we may not achieve market acceptance for, or derive significant revenue from, these new solutions.
Integrating newly acquired businesses, technologies and assets could strain our resources, could be expensive and time consuming, and might not be successful. Our recent acquisitions expose us, and we will be further exposed, if we acquire or invest in additional businesses, technologies or assets, to a number of risks, including that we may:
•experience technical issues as we integrate acquired businesses, technologies or assets into our existing solutions;
•encounter difficulties leveraging our existing sales and marketing organizations, and direct sales channels, to increase our revenue from acquired businesses, technologies or assets;
•find that the acquisition does not further our business strategy, we overpaid for the acquisition or the economic conditions underlying our acquisition decision have changed;
•have difficulty retaining key personnel of acquired businesses;
•suffer disruption to our ongoing business and diversion of our management’s attention as a result of transition or integration issues and the challenges of managing geographically or culturally diverse enterprises;
•experience unforeseen and significant problems or liabilities associated with quality, technology and legal contingencies relating to the acquisition, such as intellectual property or employment matters; and
•incur substantial costs to integrate the acquired business.

If we were to proceed with one or more additional significant acquisitions in which the consideration included cash, we could be required to use a substantial portion of our available cash. To the extent we issue shares of capital stock or other rights to purchase capital stock, including options and warrants, the ownership of existing stockholders would be diluted. In addition, acquisitions may result in the incurrence of debt, contingent liabilities, large write-offs, or other unanticipated costs, events or circumstances, any of which could harm our operating results.
In addition, from time to time we may enter into negotiations for acquisitions that are not ultimately consummated. These negotiations could result in significant diversion of management time, as well as substantial out-of-pocket costs.

We could be required to record adjustments to our recorded asset balance for intangible assets, including goodwill, that could significantly impact our operating results.

Our balance sheet includes significant intangible assets, including goodwill and other acquired intangible assets. The determination of related estimated useful lives and whether these assets have been impaired involves significant judgment and is subject to certain factors and events over which we have no control. The introduction of new competitive products or services into our markets could impair the value of our intangible assets if they create market conditions that adversely affect the competitiveness of our products and services. Further, declines in our market capitalization may be an indicator that our
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intangible assets or goodwill carrying values exceed their fair values, which could lead to potential impairment charges that could impact our operating results.

Developments in the healthcare industry and governing regulations have negatively affected and may continue to negatively affect our business.

Substantially all of our revenue is derived from customers in the healthcare industry, in particular, hospitals. The healthcare industry is highly regulated and is subject to changing political, legislative, regulatory and other influences. Developments generally affecting the healthcare industry, including new regulations or new interpretations of existing regulations, could adversely affect spending on information technology and capital equipment by reducing funding, changing healthcare pricing or delivery or creating impediments for obtaining healthcare reimbursements, which together with declining admission trends, could cause our sales to decline and negatively impact our business. For example, the margins of our hospital customers are modest, and potential decreases in reimbursement for healthcare costs may reduce the overall solvency of our customers or cause further deterioration in their financial or business condition.
In the past bills were signed into law that impact the U.S. healthcare system, including the ACA. Uncertainty surrounding the status of the ACA and its regulations may impact the spending of our healthcare customers, and we cannot predict the effect on our business of any new legislation and regulations that may be adopted if the ACA is significantly changed or repealed or of additional regulations.
Federal budget activities also impact our customers. Our customers include healthcare facilities run by the Department of Defense and the U.S. Department of Veterans Affairs. During the six months ended June 30, 2021, and years ended December 31, 2020 and 2019, we generated approximately 19%, 18% and 17%, respectively, of our revenue from these customers. Our reseller to the Department of Defense and the U.S. Department of Veterans Affairs represented 25% and 33% of our accounts receivable as of June 30, 2021 and December 31, 2020, respectively. These customers have been and may continue to be impacted by budgetary and legislative actions.
In the past certain departments of the U.S. federal government temporarily stopped operating as a result of failure by the legislative and executive branches of the government to pass bills to keep them operating. There is a risk that the government could be shut down again. Any past or future shutdown may impact our US government customers’ spending decisions, as well as those of our non-US government customers. Any reduction or delay in our customers’, or potential customers’ spending decisions may result in a delay, or reduction, to our revenue.
In addition, many state governments are changing or expanding their healthcare laws, adding additional complexity to understanding the potential impacts.
We are unable to predict the full impact of these new and changing rules on our hospital customers and others in the healthcare industry. Impacts of these rules have affected and could continue to affect materially our customers’ ability to budget for or purchase our products. The healthcare industry has changed significantly in recent years and we expect that significant changes will continue to occur. We cannot provide assurance that the markets for our solutions will continue to exist at current levels or that we will have adequate technical, financial and marketing resources to react to changes in those markets.

If we fail to increase market awareness of our brand and solutions, and expand our sales and marketing operations, our business could be harmed.

We intend to continue to add personnel and resources in sales and marketing as we focus on expanding awareness of our brand and solutions and capitalize on sales opportunities with new and existing customers. Our efforts to improve sales of our solutions will result in an increase in our sales and marketing expense and general and administrative expense, and these efforts may not be successful. Some newly hired sales and marketing personnel may subsequently be determined to be unproductive and have to be replaced, resulting in operational and sales delays and incremental costs. If we are unable to significantly increase the awareness of our brand and solutions or effectively manage the costs associated with these efforts, our business, financial condition and operating results could be harmed.

Failure to protect our information technology infrastructure against cyber-based attacks, network security breaches, service interruptions, or data corruption could significantly disrupt our operations and adversely affect our business and operating results.

We rely on information technology and telephone networks and systems, including the Internet, to process and transmit sensitive electronic information and to manage or support a variety of business processes and activities, including sales, billing, customer service, procurement and our supply chain. We use enterprise information technology systems to record, process, and summarize financial information and results of operations for internal reporting purposes and to comply with regulatory
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financial reporting, legal, and tax requirements. In the ordinary course of our business, we also collect, store, process, use and transmit large amounts of confidential information, including intellectual property, protected health information, proprietary business information and personal information. Our information technology systems, some of which are managed by third-parties, may be susceptible to damage, disruptions or shutdowns due to computer viruses, attacks by computer hackers, failures during the process of upgrading or replacing software, databases or components thereof, power outages, hardware failures, telecommunication failures, user errors or catastrophic events. Most of our workforce is currently working remotely as a result of the COVID-19 pandemic, which also increases risks related to information security. Although we have developed systems and processes that are designed to protect confidential information and prevent data loss and other security breaches, including systems and processes designed to reduce the impact of a security breach, such measures cannot provide absolute security. The risk of a security breach or disruption or data loss, particularly through cyber-attacks or cyber intrusion, including by computer hackers, foreign governments and cyber terrorists, has generally increased as the number, intensity and sophistication of attempted attacks and intrusions from around the world have increased. We may not be able to anticipate all types of security threats, and we may not be able to implement preventive measures effective against all such security threats. Although we maintain cybersecurity insurance, if our systems are breached or suffer severe damage, disruption or shutdown and we are unable to effectively resolve the issues in a timely manner, our business and operating results may significantly suffer and we may be subject to litigation, government enforcement actions or potential liability beyond our insurance coverage. In addition, such a breach may require notification to governmental agencies, the media and/or affected individuals pursuant to various federal, state (including regulations promulgated by the Federal Trade Commission and state breach notification laws) and international privacy (including GDPR) and security laws, if applicable, including HIPAA or HITECH and its implementing rules and regulations. Security breaches could also cause us to incur significant remediation costs, result in product development delays, disrupt key business operations, adversely impact customer relationships, damage our reputation and divert attention of management and key information technology resources.

During fiscal year 2020, one of our vendors, SolarWinds, was the victim of a cyberattack that inserted a vulnerability in their platform. We use SolarWinds services for our internal corporate network so this introduced a potential vulnerability in our internal systems. We have removed the vulnerable software from our network and have not found any indication that the vulnerability was exploited. There are still uncertainties about the full scope of this cyberattack and we may learn of other vulnerabilities and potential network intrusions by third parties.

If hospitals do not have and are not willing to install, upgrade and maintain the wireless and other information technology infrastructure required to effectively operate our solutions, then they may experience technical problems or not purchase our solutions at all.

The effectiveness of our solutions depends upon the quality and compatibility of the communications environment that our healthcare customers maintain. Our solutions require voice-grade wireless (Wi-Fi) installed through large enterprise environments, which can vary from hospital to hospital and from department to department within a hospital. Many hospitals have not installed a voice-grade wireless infrastructure. If potential customers do not have a wireless network that can properly and fully interoperate with our solutions, then such a network must be installed, or an existing Wi-Fi network must be upgraded or modified, for example, by adding access points in stairwells, for our solutions to be fully functional. The additional costs of installing or upgrading a Wi-Fi network may dissuade potential customers from installing our solutions. Furthermore, if changes to a customer’s physical or information technology environment cause integration issues or degrade the effectiveness of our solutions, or if the customer fails to upgrade or maintain its environment as may be required for software deployments, releases and updates, the customer may not be able to fully utilize our solutions or may experience technical problems, or these changes may impact the performance of other wireless equipment being used. If such circumstances arise, prospective customers may not purchase or existing customers may not expand their use of or deploy upgraded versions of our solutions, thereby harming our business and operating results.

If we fail to achieve and maintain certification for certain U.S. federal standards, our sales to U.S. government customers will suffer.

We believe that a significant opportunity exists to continue to sell our products to healthcare facilities in the Veterans Administration and Department of Defense (DoD). These customers require independent certification of compliance with specific requirements relating to encryption, security, interoperability and scalability, including Federal Information Processing Standard (FIPS) 140-2 and, as to DoD, certification by its Joint Interoperability and Test Command and under its Information Assurance Certification and Accreditation Process. We have received certification under certain of these standards for military-specific configurations of our solution incorporating our Badge and Smartbadge. We continue to carry out further compliance
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activities and recertifications, as required. A failure on our part to achieve and maintain compliance and to respond to new threats and vulnerabilities, both as to current products and as to new product versions, could adversely impact our revenue.

Our international operations subject us, and may increasingly subject us in the future, to operational, financial, economic and political risks abroad.

Although we derive a relatively small portion of our revenue from customers outside the United States, we believe that non-U.S. customers could represent an increasing share of our revenue in the future. For the six months ended June 30, 2021 and years ended December 31, 2020 and 2019, we generated 10.0%, 10.7% and 8.7% of our revenue, respectively, from customers outside of the United States, including Canada, the United Kingdom, Australia, New Zealand and Middle Eastern countries including the United Arab Emirates, Saudi Arabia and Qatar. We also operate an innovation center in India and a sales office in Dubai, United Arab Emirates. Accordingly, we are subject to risks and challenges that we would not otherwise face if we conducted our business solely in the United States, including:
•challenges incorporating non-English speech recognition capabilities into our solutions if we expand into non-English speaking markets;
•difficulties integrating our solutions with wireless infrastructures with which we do not have experience;
•difficulties integrating local dialing plans and applicable PBX standards;
•challenges associated with delivering support, training and documentation in several languages;
•difficulties in staffing and managing personnel and resellers;
•the need to comply with a wide variety of foreign laws and regulations, including increasingly stringent data privacy regulations, requirements for export controls for encryption technology, employment laws, changes in tax laws and tax audits by government agencies;
•political and economic instability in, or foreign conflicts that involve or affect, the countries of our customers;
•the impacts associated with epidemics or contagious diseases;
•adverse effects on us directly, or on our customers and suppliers, of changes in trade, fiscal or tax policies, including the imposition of tariffs;
•difficulties in collecting accounts receivable and longer accounts receivable payment cycles;
•exposure to competitors who are more familiar with local markets;
•risks associated with the Foreign Corrupt Practices Act and local anti-bribery law compliance;
•difficulties associated with resolving contract disputes in foreign countries with varied legal systems;
•limited or unfavorable intellectual property protection in some countries; and
•currency exchange rate fluctuations, which could affect the price of our solutions relative to locally produced solutions.

Any of these factors could harm our existing international business, impair our ability to expand into international markets or harm our operating results.

Our efforts to sell our solutions in non-healthcare markets may not be successful.

In recent years, we have actively engaged in sales efforts to customers outside the healthcare markets, including hospitality, retail, energy, education and other mobile work environments. We may not be successful in further penetrating the non-healthcare markets upon which we are initially focusing, or other new markets. To date, our solutions have been selected by over 400 customers in non-healthcare markets. Total revenue from non-healthcare customers accounted for 2%, 2% and 4% of our revenue for the six months ended June 30, 2021 and the years ended December 31, 2020 and 2019, respectively. If we cannot maintain these customers by providing solutions that meet their requirements, if we cannot successfully expand our solutions in non-healthcare markets, or if adoption of our solutions remains slow, we may not obtain significant revenue from these markets. We may experience challenges as we expand in non-healthcare markets, including pricing pressure on our solutions, budget constraints, and technical issues as we adapt our solutions for the requirements of new markets. For example, some of our hospitality and retail customers have been significantly impacted by the COVID-19 pandemic and they have been forced to close locations and face significant revenue declines. Our solutions also may not contain the functionality required by these non-healthcare markets, may be too expensive or may not sufficiently differentiate us from competing solutions such that customers can justify deploying our solutions.

We generally recognize revenue from maintenance and support contracts and subscription arrangements over the contract term, and changes in sales may not be immediately reflected in our operating results.

We generally recognize revenue from our customer subscription and support contracts and extended warranty contracts ratably over the contract term, in some cases subject to an early termination right. Revenue from our subscription and support contracts accounted for 42%, 40% and 38% of our revenue for the six months ended June 30, 2021 and years ended December 31, 2020
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and 2019, respectively. A portion of the revenue we report in each quarter is derived from the recognition of deferred revenue relating to subscription and support contracts entered into during previous quarters. Consequently, a decline in new or renewed subscription and support, extended warranty contracts or subscription agreements by our customers in any one quarter may not be immediately reflected in our revenue for that quarter. Such a decline, however, will negatively affect our revenue in future quarters. Accordingly, the effect of significant downturns in sales and market acceptance of our services and potential changes in our rate of renewals may not be fully reflected in our operating results until future periods.

Our success depends upon our ability to attract, integrate and retain key personnel, and our failure to do so could harm our ability to grow our business.

Our success depends, in part, on the continuing services of our senior management and other key personnel, and our ability to continue to attract, integrate and retain highly skilled personnel, particularly in engineering, sales and marketing. Competition for highly skilled personnel is intense, particularly in the technology field. If we fail to create work environments viewed as attractive and integrate and retain key personnel our ability to grow our business could be harmed.
The members of our senior management and other key personnel are at-will employees and may terminate their employment at any time without notice. If one or more members of our senior management terminate their employment, we may not be able to find qualified individuals to replace them on a timely basis or at all, and our senior management may need to divert their attention from other aspects of our business. Former employees may also become employees of a competitor. We may also have to pay additional compensation to attract and retain key personnel. We also anticipate hiring additional engineering, marketing and sales, and services personnel to grow our business. Often, significant amounts of time and resources are required to train these personnel. We may incur significant costs to attract, integrate and retain them, and we may lose them to a competitor or another company before we realize the benefit of our investments in them.

We face potential liability related to the privacy and security of personal information collected through our solutions.

In connection with our healthcare business, we handle and have access to “Protected Health Information” (PHI) subject in the United States to the Health Insurance Portability and Accountability Act of 1996 (HIPAA) as amended and supplemented by the Health Information Technology for Economic and Clinical Health Act of 2009 (HITECH) , regulations issued pursuant to these statutes, state privacy and security laws and regulations, and associated contractual obligations as a “business associate” of healthcare providers. These statutes, regulations and contractual obligations impose numerous requirements regarding the use and disclosure of PHI with which we must comply. Among other things, HITECH made certain aspects of HIPAA’s rules, notably the “HIPAA Security Rule,” directly applicable to business associates, independent contractors or agents of covered entities that create, receive, maintain or transmit PHI in connection with providing a function on behalf of, or a service to, a covered entity (e.g., health care communication solutions). HITECH also created four new tiers of civil monetary penalties, amended HIPAA to make civil and criminal penalties directly applicable to business associates and gave state attorneys general new authority to file civil actions for damages or injunctions in federal court to enforce the federal HIPAA regulation and seek attorney’s fees and costs associated with pursuing federal civil actions. The U.S. Department of Health & Human Services Office for Civil Rights (OCR) has increased its focus on compliance and continues to train state attorneys general for enforcement purposes. The OCR has recently increased both its efforts to audit HIPAA compliance and its level of enforcement, with one recent penalty exceeding $16 million. Our failure to accurately anticipate the application or interpretation of these statutes, regulations and contractual obligations as we develop our solutions, a failure by us to comply with their requirements (e.g., evolving encryption and security requirements) or an allegation that defects in our products have resulted in noncompliance by our customers could create material civil and/or criminal liability for us, resulting in adverse publicity and negatively affecting our business.
In addition, the use and disclosure of personal health information, non-health personal information is also subject to laws and regulations in other jurisdictions in which we do business or expect to do business in the future. Any developments stemming from enactment or modification of these laws and regulations, or the failure by us to comply with their requirements or to accurately anticipate the application or interpretation of these laws could create material liability to us (including but not limited to regulatory enforcement actions), which may result in adverse publicity and negatively affect our business.
For example, in May 2016, the EU formally adopted the General Data Protection Regulation (GDPR), which became effective in May 2018. The GDPR greatly increased the European Commission’s jurisdictional reach of its laws and adds a broad array of requirements for handling personal information, including, for example, requirements to establish a legal basis for processing, higher standards for obtaining consent from individuals to process their personal information, more robust disclosures to individuals and a strengthened individual data rights regime, requirements to implement safeguards to protect the security and confidentiality of personal information that requires the adoption of administrative, physical and technical safeguards, shortened timelines for data breach notifications to appropriate data protection authorities or data subjects, limitations on retention and secondary use of information, increased requirements pertaining to health data and additional
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requirements that we impose certain contractual obligations on third-party processors in connection with the processing of the personal information. EU member states are tasked under the GDPR to enact, and have enacted, certain implementing legislation that adds to and/or further interprets the GDPR requirements and potentially extends our obligations and potential liability for failing to meet such obligations. The GDPR, together with national legislation, regulations and guidelines of the EU member states governing the processing of personal information, impose strict obligations and restrictions on the ability to collect, use, retain, protect, disclose, transfer and otherwise process personal information. In particular, the GDPR includes obligations and restrictions concerning the consent and rights of individuals to whom the personal information relates, the transfer of personal information out of the European Economic Area, security breach notifications and the security and confidentiality of personal information. The GDPR authorizes fines for certain violations of up to 4% of global annual revenue or €20 million, whichever is greater, and other administrative penalties. Additionally, the United Kingdom (UK) implemented the Data Protection Act effective in May 2018 and statutorily amended in 2019, that substantially implements the GDPR and contains provisions, including UK-specific derogations, for how GDPR is applied in the UK. Since the beginning of 2021 (when the transitional period following Brexit expired), we also have to continue to comply with the GDPR and the Data Protection Act, with each regime having the ability to fine up to the greater of €20 million (£17 million) or 4% of global turnover. The relationship between the U.K. and the EU remains uncertain, for example how data transfers between the U.K. and the EU and other jurisdictions will be treated and the role of the U.K.’s supervisory authority. The EU has issued a draft adequacy decision for personal information transfers from the European Economic Area to the U.K. on February 19, 2021. Although the European Data Protection Board (EDPB) issued an opinion generally supportive of the draft adequacy decision, the EDPB urged further assessment of certain issues and continued monitoring of developments in UK law. If this adequacy decision is not passed by the EU, it would require that companies implement protection measures such as the standard contractual clauses, or “Standard contractual Clauses,” for data transfers between the EU and the UK. These changes will lead to additional costs as we try to ensure compliance with new privacy legislation and will increase our overall risk exposure.
The costs of compliance with, and other burdens imposed by, such laws and regulations that are applicable to our business operations may limit the use and adoption of our services and reduce overall demand for them. Changes in these legislations may add additional complexity, variation in requirements, restrictions and potential legal risk, require additional investment in resources for compliance programs, could impact strategies and availability of previously useful data, and could result in increased compliance costs and/or changes in business practices and policies.
Any legislation or regulation in the area of privacy and security of personal information could affect the way we operate our services and could harm our business. For example, the GDPR imposes strict rules on the transfer of personal information out of the EU to the United States. These obligations may be interpreted and applied in a manner that is inconsistent from one jurisdiction to another and may conflict with other requirements or our practices. In addition, these rules are consistently under scrutiny. For example, on July 16, 2020, the Court of Justice of the European Union (the Court of Justice) invalidated the European Union-United States (EU-U.S.) Privacy Shield on the grounds that the EU-U.S. Privacy Shield failed to offer adequate protections to EU personal information transferred to the United States. While the Court of Justice upheld the use of other data transfer mechanisms, such as the Standard Contractual Clauses, the decision has led to some uncertainty regarding the use of such mechanisms for data transfers to the United States, and the court made clear that reliance on Standard Contractual Clauses alone may not necessarily be sufficient in all circumstances. The use of Standard Contractual Clauses for the transfer of personal information specifically to the United States also remains under review by a number of European data protection supervisory authorities. For example, German and Irish supervisory authorities have indicated that the Standard Contractual Clauses alone provide inadequate protection for EU-U.S. data transfers. Use of the data transfer mechanisms must now be assessed on a case-by-case basis taking into account the legal regime applicable in the destination country, in particular applicable surveillance laws and rights of individuals.
On June 4, 2021 the European Commission finalized new versions of the Standard Contractual Clauses, with the implementing decision, or “Implementing Decision,” now in effect as of June 27, 2021. Under the Implementing Decision, we will have until December 27, 2022 to update any existing agreements, or any new agreements executed before September 27, 2021, that rely on Standard Contractual Clauses as the data transfer mechanism. To comply with the Implementing Decision and the new Standard Contractual Clauses, we may need to implement additional safeguards to further enhance the security of data transferred out of the European Economic Area, which could increase our compliance costs, expose us to further regulatory scrutiny and liability, and adversely affect our business.
Additionally, other countries (e.g., Australia and Japan) have adopted certain legal requirements for cross-border transfers of personal information. These obligations may be interpreted and applied in a manner that is inconsistent from one jurisdiction to another and may conflict with other requirements or our practices. Further, since the transition period for Brexit ended December 31, 2020, there remains some uncertainty regarding cross-border data transfers from the EU to the United Kingdom. The EU is expected to either issue an adequacy decision for such transfers in early 2021, or an adequacy mechanism such as the Standard Contractual Clauses will be required for transfer of personal information from the EU to the United Kingdom. The costs of compliance with, and the other burdens imposed by, these and other laws or regulatory actions may prevent us from
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selling our solutions or increase the costs associated with selling our solutions and may affect our ability to invest in or jointly develop solutions in the United States and in foreign jurisdictions. If we are required to implement additional measures to transfer data from foreign jurisdictions, such as the EU, this could increase our compliance costs, and could adversely affect our business, financial condition and results of operations. Further, we cannot guarantee that our privacy and security policies and practices will be found sufficient to protect us from liability or adverse publicity relating to the privacy and security of personal information.

Additionally, several states have begun enacting new data privacy laws. For example, California recently enacted legislation, the California Consumer Privacy Act (CCPA), that, among other things, requires covered companies to provide new disclosures to California consumers, and afford such consumers new abilities to opt out of certain sales of personal information. The CCPA took effect on January 1, 2020 and became enforceable by the California Attorney General on July 1, 2020. The CCPA has been amended on multiple occasions and additional regulations of the California Attorney General came into effect on August 14, 2020 and were most recently amended on March 15, 2021. However, aspects of the CCPA and its interpretation remain unclear. The effects of the CCPA are significant and may require us to modify our data processing practices and policies and to incur substantial costs and expenses in an effort to comply. Moreover, a new privacy law, the California Privacy Rights Act (CPRA) was recently approved by California voters in connection with the election on November 3, 2020. The CPRA creates obligations relating to consumer data beginning on January 1, 2022, with implementing regulations expected on or before July 1, 2022, and enforcement beginning July 1, 2023. The CCPA requires (and the CPRA will require) covered companies to, among other things, provide new disclosures to California consumers, and affords such consumers new privacy rights such as the ability to opt-out of certain sales of personal information and expanded rights to access and require deletion of their personal information, opt out of certain personal information sharing, and receive detailed information about how their personal information is collected, used and shared. The CCPA provides for civil penalties for violations, as well as a private right of action for security breaches that may increase security breach litigation. Potential uncertainty surrounding the CCPA and CPRA may increase our compliance costs and potential liability, particularly in the event of a data breach, and could have a material adverse effect on our business, including how we use personal information, our financial condition, the results of our operations or prospects. The CCPA has also prompted a number of proposals for new federal and state privacy legislation that, if passed, could increase our potential liability, increase our compliance costs and adversely affect our business. Two states have recently passed personal information laws: the Colorado Privacy Act, which goes in effect on July 1, 2023; and Virginia’s Consumer Data Protection Act, which goes in effect on January 1, 2023.

The interplay of federal and state laws (e.g., in addition to California, Massachusetts and Nevada have adopted laws requiring the implementation of certain security measures to protect personal information, and all 50 states and the District of Columbia, Puerto Rico and Guam, have adopted breach notification laws) may be subject to varying interpretations by courts and government agencies, creating complex compliance issues for us and our customers and potentially exposing us to additional expense, adverse publicity and liability. Further, as regulatory focus on privacy, security and data use issues continues to increase and laws and regulations concerning the protection of personal information expand and become more complex, these potential risks to products and services could intensify.

As mentioned, changing definitions of personal data and information may also limit or inhibit our ability to operate or expand our business, including limiting strategic partnerships that may involve the sharing of data. Also, some jurisdictions require that certain types of data be retained on servers within these jurisdictions. Our failure to comply with applicable laws, directives, and regulations may result in enforcement action against us, including fines, and damage to our reputation, any of which may have an adverse effect on our business and operating results.

If our efforts to protect the security of information collected by our customers are unsuccessful, we could become subject to costly government enforcement actions and private litigation, and our sales and reputation could suffer.

The nature of our business involves the receipt and storage of information about our customers, including personal information and PHI. We have implemented programs to detect and alert us to data security incidents. However, because the techniques used to obtain unauthorized access, disable or degrade service, or sabotage systems change frequently and may be difficult to detect for long periods of time, we may be unable to anticipate these techniques or implement adequate preventive measures. Companies are increasingly subject to a wide variety of security incidents, cyber-attacks and other attempts to gain unauthorized access. These threats can come from a variety of sources, ranging in sophistication from an individual hacker to malfeasance by employees, consultants or other service providers to state-sponsored attacks. Cyber threats may be generic, or they may be custom crafted against our information systems. In recent times, cyber-attacks have become more prevalent and much harder to detect and defend against. Our network and storage applications may be vulnerable to cyber-attack, malicious intrusion, malfeasance, loss of data privacy or other significant disruption and may be subject to unauthorized access by hackers, employees, consultants or other service providers. In addition, hardware, software or applications we develop or
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procure from third parties may contain defects in design or manufacture or other problems that could unexpectedly compromise information security. Unauthorized parties may also attempt to gain access to our systems or facilities through fraud, trickery or other forms of deceiving our employees, contractors and temporary staff. If we experience significant data security breaches or fail to detect and appropriately respond to significant data security breaches, we could be exposed to government enforcement actions and private litigation, as well as potentially incur significant costs and diversion of resources to comply with our contractual obligations to notify our customers of such security breaches, particularly with respect to any protected health information affected. Moreover, if a computer security breach affects our systems or results in the unauthorized access, use or disclosure of personal information, our reputation could be materially damaged. In addition, such a breach may require notification to governmental agencies, the media and/or affected individuals pursuant to various federal, state and international privacy and security laws, if applicable, including HIPAA or HITECH and its implementing rules and regulations, as well as regulations promulgated by the Federal Trade Commission and state breach notification laws. We would also be exposed to a risk of loss or litigation and potential liability under laws, regulations and contracts that protect the privacy and security of personal information. For example, as stated above, the CCPA imposes a private right of action for security breaches that could lead to some form of remedy including regulatory scrutiny, fines, private right of action settlements, and other consequences. The financial exposure from the events referenced above could either not be insured against or not be fully covered through any insurance that we may maintain, and there can be no assurance that the limitations of liability in any of our contracts would be enforceable or adequate or would otherwise protect us from liabilities or damages as a result of the events referenced above. Any of the foregoing could have a material adverse effect on our business, reputation, results of operations, financial condition and prospects. In addition, our customers could lose confidence in our ability to protect their information, which could cause them to discontinue using our products or purchasing from us altogether.

The failure of our equipment lease customers to pay us under leasing agreements with them that we do not sell to third party lease finance companies could harm our revenue and operating results.

In 2012, we began offering our solutions to our customers through multi-year equipment lease agreements. We sell the bulk of these leases, including the related accounts receivables, to third party lease finance companies on a non-recourse basis. We retain unsold leases in-house, which exposes us to the creditworthiness of such lease customers over the lease term. For the leases that we retain in-house, our ability to collect payments from a customer or to recognize revenue for the sale could be impaired if the customer fails to meet its obligations to us such as in the case of its bankruptcy filing or deterioration in its financial position, or has other creditworthiness issues, any of which could harm our revenue and operating results.

Our use of open source and non-commercial software components could impose risks and limitations on our ability to commercialize our solutions.

Our solutions contain software modules licensed under open source and other types of non-commercial licenses, including the GNU Public License, the Apache License and others. We also may incorporate open source and other licensed software into our solutions in the future. Use and distribution of such software may entail greater risks than use of third-party commercial software, as licenses of these types generally do not provide warranties or other contractual protections regarding infringement claims or the quality of the code. Some of these licenses require the release of our proprietary source code to the public if we combine our proprietary software with open source software in certain manners. This could allow competitors to create similar products with lower development effort and time and ultimately result in a loss of sales for us.
The terms of many open source and other non-commercial licenses have not been judicially interpreted, and there is a risk that such licenses could be construed in a manner that could impose unanticipated conditions or restrictions on our ability to commercialize our solutions. In such event, in order to continue offering our solutions, we could be required to seek licenses from alternative licensors, which may not be available on a commercially reasonable basis or at all, to re-engineer our solutions or to discontinue the sale of our solutions in the event we cannot obtain a license or re-engineer our solutions on a timely basis, any of which could harm our business and operating results. In addition, if an owner of licensed software were to allege that we had not complied with the conditions of the corresponding license agreement, we could incur significant legal costs defending ourselves against such allegations. In the event such claims were successful, we could be subject to significant damages, be required to disclose our source code, or be enjoined from the distribution of our solutions.

Claims of intellectual property infringement could harm our business.

Vigorous protection and pursuit of intellectual property rights has resulted in protracted and expensive litigation for many companies in our industry. Although claims of this kind have not materially affected our business to date, there can be no assurance of the absence of such claims in the future. Any claims or proceedings against us, whether meritorious or not, could be time consuming, result in costly litigation, require significant amounts of management time, result in the diversion of
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significant operational resources, or require us to enter into royalty or licensing agreements, any of which could harm our business and operating results.
Intellectual property lawsuits are subject to inherent uncertainties due to the complexity of the technical issues involved, and we cannot be certain that we will be successful in defending ourselves against intellectual property claims. In addition, we currently have a limited portfolio of issued patents compared to many other industry participants, and therefore may not be able to effectively utilize our intellectual property portfolio to assert defenses or counterclaims in response to patent infringement claims or litigation brought against us by third parties. Further, litigation may involve patent holding companies or other adverse patent owners who have no relevant products and against whom our potential patents may provide little or no deterrence.
Many potential litigants have the capability to dedicate substantially greater resources to enforce their intellectual property rights and to defend claims that may be brought against them. Furthermore, a successful claimant could secure a judgment that requires us to pay substantial damages or prevents us from distributing certain solutions or performing certain services. We might also be required to seek a license and pay royalties for the use of such intellectual property, which may not be available on commercially acceptable terms or at all. Alternatively, we may be required to develop non-infringing technology, which could require significant effort and expense and may ultimately not be successful.

If we are unable to protect our intellectual property rights, our competitive position could be harmed, or we could be required to incur significant expenses to enforce our rights.

Our success depends, in part, on our ability to protect our proprietary technology. We protect our proprietary technology through patent, copyright, trade secret and trademark laws in the United States and similar laws in other countries. We also protect our proprietary technology through licensing agreements, nondisclosure agreements and other contractual provisions. These protections may not be available in all cases or may be inadequate to prevent our competitors from copying, reverse engineering or otherwise obtaining and using our technology, proprietary rights or solutions in an unauthorized manner. The laws of some foreign countries may not be as protective of intellectual property rights as those in the United States, and mechanisms for enforcement of intellectual property rights may be inadequate. In addition, third parties may seek to challenge, invalidate or circumvent our patents, trademarks, copyrights and trade secrets, or applications for any of the foregoing. Our competitors may independently develop technologies that are substantially equivalent, or superior, to our technology or design around our proprietary rights. In each case, our ability to compete could be significantly impaired.
To prevent unauthorized use of our intellectual property rights, it may be necessary to prosecute actions for infringement or misappropriation of our proprietary rights. Any such action could result in significant costs and diversion of our resources and management’s attention, and there can be no assurance that we will be successful in such action. Furthermore, many of our current and potential competitors have the ability to dedicate substantially greater resources to enforce their intellectual property rights than us. Accordingly, despite our efforts, we may not be able to prevent third parties from infringing or misappropriating our intellectual property. While we plan to continue to protect our intellectual property with, among other things, patent protection, there can be no assurance that:
•current or future U.S. or foreign patent applications will be approved;
•our issued patents will protect our intellectual property and not be held invalid or unenforceable if challenged by third parties;
•we will succeed in protecting our technology adequately in all key jurisdictions in which we develop technology, or we or our competitors operate; or
•others will not independently develop similar or competing products or methods or design around any patents that may be issued to us.
Our failure to obtain patents with claims of a scope necessary to cover our technology, or the invalidation of our patents, or our inability to protect any of our intellectual property, may weaken our competitive position and harm our business and operating results. We might be required to spend significant resources to monitor and protect our intellectual property rights. We may initiate claims or litigation against third parties for infringement of our proprietary rights or to establish the validity of our proprietary rights. Any litigation, whether or not it is resolved in our favor, could result in significant expense to us and divert the efforts of our technical and management personnel, which may harm our business, operating results and financial condition.

Product liability or other liability claims could cause us to incur significant costs, adversely affect the sales of our solutions and harm our reputation.

Our solutions are utilized by healthcare professionals and others in the course of providing patient care. As a result, patients, family members, physicians, nurses or others may allege we are responsible for harm to patients or healthcare professionals due
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to defects in, the malfunction of, the characteristics of, or the operation of, our solutions. Any such allegations could harm our reputation and ability to sell our solutions.
Our solutions utilize lithium-ion batteries and electronic components that may overheat or otherwise malfunction as a result of physical or environmental damage. Components of our solutions emit radio frequency (RF) emissions which have been alleged, in connection with cellular phones, to have adverse health consequences. Magnets in our Badges may emit electromagnetic radiation and may be alleged to interfere with implanted medical or other devices. While these components of our solutions comply with applicable guidelines, some may allege that these components of our solutions cause adverse health consequences. Also, applicable guidelines may change making these components of our solutions non-compliant. Any such allegations or non-compliance, or any regulatory developments, could negatively impact the sales of our solutions, require costly modifications to our solutions, and harm our reputation.
Although our customer agreements contain terms and conditions, including disclaimers of liability, that are intended to reduce or eliminate our potential liability, we could be required to spend significant amounts of management time and resources to defend ourselves against product liability, tort, warranty or other claims. If any such claims were to prevail, we could be forced to pay damages, comply with injunctions or stop distributing our solutions. Even if potential claims do not result in liability to us, investigating and defending against these claims could be expensive and time consuming and could divert management’s attention away from our business. We maintain general liability insurance coverage, including coverage for errors and omissions; however, this coverage may not be sufficient to cover large claims against us or otherwise continue to be available on acceptable terms. Further, the insurer could attempt to disclaim coverage as to any particular claim.

We may require additional capital to support our business growth, and such capital may not be available.

We intend to continue to make investments to support business growth and may require additional funds to respond to business challenges, which include the need to develop new solutions or enhance existing solutions, enhance our operating infrastructure, expand our sales and marketing capabilities, expand into non-healthcare markets, and acquire complementary businesses, technologies or assets. Accordingly, we may need to engage in additional equity or debt financing to secure funds. Equity and debt financing, however, might not be available when needed or, if available, might not be available on terms satisfactory to us. If we raise additional funds through equity financing, our stockholders may experience dilution. Debt financing, if available, may involve covenants restricting our operations or our ability to incur additional debt. If we are unable to obtain adequate financing or financing on terms satisfactory to us in the future, our ability to continue to support our business growth and to respond to business challenges could be significantly limited as we may have to delay, reduce the scope of or eliminate some or all of our initiatives, which could harm our operating results.

Some of our solutions are, and others could become, subject to regulation by the U.S. Food and Drug Administration or similar foreign agencies, which could increase our operating costs.

We provide certain products that are, and others that may become, subject to regulation by the Food and Drug Administration (FDA) and similar agencies in other countries, or the jurisdiction of these agencies could be expanded in the future to include our solutions. The FDA regulates certain products, including software-based products, as “medical devices” based, in part, on the intended use of the product and the risk the device poses to the patient should the device fail to perform properly. For example, the clinical alert notification solution we acquired as part of our acquisition of Extension Healthcare and the clinical communications product we acquired from mVisum are regulated by the FDA as Class II medical devices. Although we have concluded that our wireless Badge is a general-purpose communications device not subject to FDA regulation, the FDA could disagree with our conclusion, or changes in our solutions or the FDA’s evolving regulation could lead to FDA regulation of our solutions. Canada and many other countries in which we sell or may sell our solutions could also have similar regulations applicable to our solutions, some of which may be subject to change or interpretation. We may incur substantial operating costs if we are required to register our solutions or components of our solutions as regulated medical devices under U.S. or foreign regulations, obtain premarket approval from the FDA or foreign regulatory agencies, and satisfy the extensive reporting requirements. In addition, failure to comply with these regulations could result in enforcement actions and monetary penalties.

Environmental and social (E&S) regulations, policies and provisions, as well as customer demand, may make our supply chain more complex and may adversely affect our relationships with customers.

There is an increasing focus on the governance of environmental and social risks in our industry. A number of our customers have adopted, or may adopt, procurement policies that include E&S provisions that their suppliers must comply with, or they may seek to include such provisions in their procurement terms and conditions. An increasing number of participants in the industry are also joining voluntary E&S initiatives, such as the Responsible Business Alliance. These E&S provisions and initiatives are subject to change, can be unpredictable, and may be difficult and expensive for us to comply with, given the
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complexity of our supply chain and our outsourced manufacturing. If we are unable to comply or are unable to cause our suppliers or contract manufacturers to comply, with such policies or provisions, a customer may stop purchasing products from us, and may take legal action against us, which could harm our reputation, revenue and results of operations.

In addition, as part of their E&S programs, an increasing number of customers are seeking to source products that do not contain minerals sourced from areas where proceeds from the sale of such minerals are likely to be used to fund armed conflict, such as in the Democratic Republic of the Congo. This could adversely affect the sourcing, availability and pricing of minerals used in the manufacture of our equipment. Since our supply chain is complex, we are not currently able to definitively ascertain the origins of all of the minerals and metals used in our products. As a result, we may face difficulties in satisfying these customers’ demands, which may harm our sales and operating results.

Risks Related to our Notes

We have indebtedness in the form of convertible senior notes.

As a result of the Notes offerings, we incurred $265.3 million principal amount of indebtedness, the principal amount of which we may be required to pay at maturity in 2023 and 2026. Holders of the Notes will have the right to require us to repurchase their Notes upon the occurrence of a “fundamental change” (as defined in the indenture governing the Notes) at a purchase price equal to 100% of the principal amount of the Notes to be purchased, plus accrued and unpaid interest, if any. In addition, the indenture for the Notes provides that we are required to repay amounts due under the indenture in the event that there is an event of default for the Notes that results in the principal, premium, if any, and interest, if any, becoming due prior to maturity date of the Notes. There can be no assurance that we will be able to repay this indebtedness when due, or that we will be able to refinance this indebtedness on acceptable terms or at all. In addition, this indebtedness could, among other things:

•heighten our vulnerability to adverse general economic conditions and heightened competitive pressures;
•require us to dedicate a larger portion of our cash flow from operations to interest payments, limiting the availability of cash for other purposes;
•limit our flexibility in planning for, or reacting to, changes in our business and industry; and
•impair our ability to obtain additional financing in the future for working capital, capital expenditures, acquisitions, general corporate purposes or other purposes.

In addition, our ability to purchase the Notes or repay prior to maturity any accelerated amounts under the Notes upon an event of default or pay cash upon conversions of the Notes may be limited by law, by regulatory authority or by agreements governing our indebtedness outstanding at the time. Our failure to repurchase Notes at a time when the repurchase is required by the indenture (whether upon a fundamental change or otherwise under the indenture) or pay cash payable on future conversions of the Notes (unless we elect to deliver solely shares of our common stock to settle such conversion) as required by the indenture would constitute a default under the indenture. A default under the indenture or the fundamental change itself could also lead to a default under agreements governing any future indebtedness. If the repayment of any related indebtedness were to be accelerated after any applicable notice or grace periods, we may not have sufficient funds to repay the indebtedness, repurchase the Notes or make cash payments upon conversions thereof.

Although the Notes are referred to as convertible senior notes, they are effectively subordinated to any of our secured debt and any liabilities of our subsidiaries.

The Notes will rank senior in right of payment to any of our indebtedness that is expressly subordinated in right of payment to the notes; equal in right of payment to all of our existing and future liabilities that are not so subordinated; effectively junior in right of payment to any of our secured indebtedness to the extent of the value of the assets securing such indebtedness; and structurally junior to all indebtedness and other liabilities (including trade payables) of our current or future subsidiaries. In the event of our bankruptcy, liquidation, reorganization, or other winding up, our assets that secure debt ranking senior or equal in right of payment to the Notes will be available to pay obligations on the Notes only after the secured debt has been repaid in full from these assets, and the assets of our subsidiaries will be available to pay obligations on the Notes only after all claims senior to the Notes have been repaid in full. There may not be sufficient assets remaining to pay amounts due on any or all of the Notes then outstanding. The indenture governing the Notes will not prohibit us from incurring additional senior debt or secured debt, nor will it prohibit any of our current or future subsidiaries from incurring additional liabilities.

Servicing our debt requires, and will require, a significant amount of cash. We may not have sufficient cash flow to make payments on our debt, which could adversely affect our business, financial condition and results of operations.

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Our ability to make scheduled payments of the principal of, to pay interest on or to refinance our indebtedness,
including the Notes, depends on our future performance, which is subject to economic, financial, competitive and other factors beyond our control. Our business may not continue to generate cash flow from operations in the future sufficient to service our debt and make necessary capital expenditures. If we are unable to generate such cash flow, we may be required to adopt one or more alternatives, such as selling assets, restructuring debt or obtaining additional equity capital on terms that may be onerous or highly dilutive. Our ability to refinance our indebtedness will depend on the capital markets and our financial condition at such time. We may not be able to engage in any of these activities or engage in these activities on desirable terms, which could result in a default on our debt obligations, including the notes or otherwise.

In addition, our significant indebtedness, combined with our other financial obligations and contractual commitments, could have other important consequences. For example, it could:

•make us more vulnerable to adverse changes in general U.S. and worldwide economic, industry and competitive conditions and adverse changes in government regulation;
•limit our flexibility in planning for, or reacting to, changes in our business and our industry;
•place us at a disadvantage compared to our competitors who have less debt; and
•limit our ability to borrow additional amounts for working capital and other general corporate purposes, including to fund possible acquisitions of, or investments in, complementary businesses, products, services and technologies.

Any of these factors could materially and adversely affect our business, financial condition and results of operations. In addition, if we incur additional indebtedness, the risks related to our business and our ability to service or repay our indebtedness would increase.

Recent and future regulatory actions and other events may adversely affect the trading price and liquidity of the Notes.

We expect that many investors in, and purchasers of, the notes will employ, or seek to employ, a convertible arbitrage strategy with respect to the notes. Investors would typically implement such a strategy by selling short the common stock underlying the notes and dynamically adjusting their short position while continuing to hold the notes. Investors may also implement this type of strategy by entering into swaps on our common stock in lieu of or in addition to short selling the common stock.

The SEC and other regulatory and self-regulatory authorities have implemented various rules and taken certain actions, and may in the future adopt additional rules and take other actions, that may impact those engaging in short selling activity involving equity securities (including our common stock). Such rules and actions include Rule 201 of SEC Regulation SHO, the adoption by the Financial Industry Regulatory Authority, Inc. and the national securities exchanges of a “Limit Up-Limit Down” program, the imposition of market-wide circuit breakers that halt trading of securities for certain periods following specific market declines, and the implementation of certain regulatory reforms required by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. Any governmental or regulatory action that restricts the ability of the holders the Notes to effect short sales of our common stock, borrow our common stock, or enter into swaps on our common stock could adversely affect the trading price and the liquidity of the Notes.

Volatility in the market price and trading volume of our common stock could adversely impact the trading price of the Notes.

We expect that the trading price of the Notes will be significantly affected by the market price of our common stock. The stock market in recent years has experienced significant price and volume fluctuations that have often been unrelated to the operating performance of companies. The market price of our common stock could fluctuate significantly for many reasons. A decrease in the market price of our common stock would likely adversely impact the trading price of the notes. The market price of our common stock could also be affected by possible sales of our common stock by investors who view the Notes as a more attractive means of equity participation in us and by hedging or arbitrage trading activity that we expect to develop involving our common stock. This trading activity could, in turn, affect the trading price of the Notes.

We may still incur substantially more debt or take other actions which would intensify the risks discussed above.

We and our subsidiaries may incur substantial additional debt in the future, subject to the restrictions contained in our debt instruments, some of which may be secured debt. We will not be restricted under the terms of the indentures governing the Notes from incurring additional debt, securing existing or future debt, recapitalizing our debt, or taking a number of other actions that are not limited by the terms of the indentures governing the Notes that could have the effect of diminishing our ability to make payments on our debt, including the Notes, when due.

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We may not have the ability to raise the funds necessary to settle conversions of the Notes in cash or to repurchase the Notes upon a fundamental change, and our future debt may contain limitations on our ability to pay cash upon conversion or repurchase of the Notes.

Holders of the Notes will have the right, subject to certain conditions and limited exceptions, to require us to repurchase all or a portion of their Notes upon the occurrence of a fundamental change before the maturity date at a fundamental change repurchase price equal to 100% of the principal amount of the Notes to be repurchased, plus accrued and unpaid interest, if any, In addition, upon conversion of the Notes, unless we elect to deliver solely shares of our common stock to settle such conversion (other than paying cash in lieu of delivering any fractional share), we will be required to make cash payments in respect of the Notes being converted. However, we may not have enough available cash or be able to obtain financing at the time we are required to make repurchases of Notes surrendered therefor or pay cash with respect to Notes being converted.

In addition, our ability to repurchase Notes or to pay cash upon conversions of Notes may be limited by law, regulatory authority, or any agreements governing our future indebtedness. Our failure to repurchase Notes at a time when the repurchase is required by the indenture or to pay any cash upon conversions of Notes as required by the indenture would constitute a default under the indenture. A default under the indenture or the fundamental change itself could also lead to a default under agreements governing our future indebtedness. If the payment of the related indebtedness were to be accelerated after any applicable notice or grace periods, we may not have sufficient funds to repay the indebtedness and repurchase the Notes or to pay cash upon conversions of notes.

Redemption may adversely affect a holder’s return on the 2026 Notes.

We may not redeem the 2026 Notes prior to March 20, 2024. We may redeem for cash all or any portion of the 2026 Notes (subject to the partial redemption limitation (as defined in the indenture governing the notes)), at our option, on or after March 20, 2024 if the last reported sale price of our common stock has been at least 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period (including the last trading day of such period) ending on, and including, the trading day immediately preceding the date on which we provide notice of redemption at a redemption price equal to 100% of the principal amount of the notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date. As a result, we may choose to redeem some or all of the 2026 Notes, including at times when prevailing interest rates are relatively low. As a result, you may not be able to reinvest the proceeds you receive from the redemption in a comparable security at an effective interest rate as high as the interest rate on your 2026 Notes being redeemed. In addition, a redemption of less than all of the outstanding 2026 Notes will likely harm the liquidity of the market for the unredeemed 2026 Notes following the redemption. Accordingly, if your 2026 Notes are not redeemed in a partial redemption, then you may be unable to sell your 2026 Notes at the times you desire or at favorable prices, if at all, and the trading price of your 2026 Notes may decline.

The conditional conversion feature of the Notes, if triggered, may adversely affect our financial condition and operating results

In the event the conditional conversion feature of the Notes is triggered, holders of the Notes will be entitled to convert their Notes at any time during specified periods at their option. If one or more holders elect to convert their Notes, unless we elect to satisfy our conversion obligation by delivering solely shares of our common stock (other than paying cash in lieu of delivering any fractional share), we would be required to settle a portion or all of our conversion obligation through the payment of cash, which could adversely affect our liquidity. In addition, even if holders of Notes do not elect to convert their Notes, we could be required under applicable accounting rules to reclassify all or a portion of the outstanding principal of the Notes as a current rather than long-term liability, which would result in a material reduction of our net working capital.

Changes in the accounting method for convertible debt securities that may be settled in cash, such as the Notes, could have a material effect on our reported financial results.

The accounting method for reflecting the Notes on our balance sheet, accruing amortized interest expense for the Notes and reflecting the underlying shares of our common stock in our reported diluted earnings per share may adversely affect our reported earnings and financial condition. For the fiscal year beginning January 1, 2021, we have elected to early adopt new accounting guidance that was recently released that simplifies the accounting for convertible debt that may be settled in cash (ASU 2020-06), amending Accounting Standards Codification 470-20, Debt with Conversion and Other Options (ASC 470-20). As a result, we expect to record the convertible debt securities (including the Notes) entirely as a liability on our balance sheet, net of issuance costs incurred, with interest expense reflecting the cash coupon plus the amortization of the capitalized issuance costs. Additionally, the new guidance modifies the treatment of convertible debt securities that may be settled in cash or shares
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by requiring the use of the “if-converted” method. Under that method, diluted earnings per share would generally be calculated assuming that all the Notes were converted solely into shares of common stock at the beginning of the reporting period, unless the result would be antidilutive. In addition, in the future, we may, in our sole discretion, irrevocably elect to settle the conversion value of the Notes in cash up to the principal amount being converted. Following such an irrevocable election, if the conversion value of the Notes exceeds their principal amount for a reporting period, then we will calculate our diluted earnings per share by assuming that all of the Notes were converted at the beginning of the reporting period and that we issued shares of our common stock to settle the excess, unless the result would be anti-dilutive. The application of the if-converted method may reduce our reported diluted earnings per share. Furthermore, if any of the conditions to the convertibility of the Notes are satisfied, then, under certain conditions, we may be required under applicable accounting standards to reclassify the liability carrying value of the Notes as a current, rather than a long-term, liability. This reclassification could be required even if no noteholders convert their Notes and could materially reduce our reported working capital.

Future sales of our common stock or equity-linked securities in the public market could lower the market price for our common stock and adversely impact the trading price of the Notes.

In the future, we may sell additional shares of our common stock or equity-linked securities to raise capital. In addition, a substantial number of shares of our common stock is reserved for issuance upon the exercise of stock options and upon conversion of the Notes. We cannot predict the size of future issuances or the effect, if any, that they may have on the market price for our common stock. The issuance and sale of substantial amounts of our common stock or equity-linked securities, or the perception that such issuances and sales may occur, could adversely affect the trading price of the Notes and the market price of our common stock and impair our ability to raise capital through the sale of additional equity or equity-linked securities.

Holders of Notes will not be entitled to any rights with respect to our common stock, but they will be subject to all changes affecting our common stock to the extent satisfaction of our conversion obligation includes shares of our common stock.

Holders of Notes will not be entitled to any rights with respect to our common stock (including, without limitation, voting rights and rights to receive any dividends or other distributions on our common stock) prior to the conversion date relating to such Notes (if we have elected to settle the relevant conversion by delivering solely shares of our common stock (other than paying cash in lieu of delivering any fractional share)) or the last trading day of the relevant observation period (if we elect to pay and deliver, as the case may be, a combination of cash and shares of our common stock in respect of the relevant conversion), but holders of Notes will be subject to all changes affecting our common stock. For example, if an amendment is proposed to our restated certificate of incorporation or restated bylaws requiring stockholder approval and the record date for determining the stockholders of record entitled to vote on the amendment occurs prior to the conversion date related to a holder’s conversion of its Notes (if we have elected to settle the relevant conversion by delivering solely shares of our common stock (other than paying cash in lieu of delivering any fractional share)) or the last trading day of the relevant observation period (if we elect to pay and deliver, as the case may be, a combination of cash and shares of our common stock in respect of the relevant conversion), such holder will not be entitled to vote on the amendment, although such holder will nevertheless be subject to any changes affecting our common stock.

The conditional conversion feature of the Notes could result in holders of our Notes receiving less than the value of our common stock into which the Notes would otherwise be convertible.

Prior to the close of business on the business day immediately preceding June 15, 2026, a holder may convert 2026 Notes only if specified conditions are met. If the specific conditions for conversion are not met, a holder will not be able to convert 2026 Notes, and a holder may not be able to receive the value of the cash, common stock or a combination of cash and common stock, as applicable, into which the 2026 Notes would otherwise be convertible.

Upon conversion of the Notes, our note holders may receive less valuable consideration than expected because the value of our common stock may decline after the exercise of conversion rights but before we settle our conversion obligation.

Under the Notes, a converting holder will be exposed to fluctuations in the value of our common stock during the period from the date such holder surrenders Notes for conversion until the date we settle our conversion obligation. For example, upon conversion of the 2026 Notes, we have the option to pay or deliver, as the case may be, cash, shares of our common stock, or a combination of cash and shares of our common stock. If we elect to satisfy our conversion obligation in cash or a combination of cash and shares of our common stock, the amount of consideration that our note holders will receive upon conversion of their 2026 Notes will be determined by reference to the volume weighted average prices of our common stock for each trading day in a 40 trading day observation period. This period would be: (i), subject to clause (ii), if the relevant conversion date occurs prior
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to June 15, 2026, the 40 consecutive trading days beginning on, and including, the second trading day immediately succeeding such conversion date; (ii) with respect to any 2026 Notes called for redemption (or deemed called for redemption) and prior to the relevant redemption date, the 40 consecutive trading days beginning on, and including the 41st scheduled trading day immediately preceding such redemption date; and (iii) subject to clause (ii) if the relevant conversion date occurs on or after June 15, 2026, the 40 consecutive trading days beginning on, and including, the 41st scheduled trading day immediately preceding the maturity date. Accordingly, if the price of our common stock decreases during this period, the amount and/or value of consideration a note holder receives will be adversely affected. In addition, if the market price of our common stock at the end of such period is below the average of the daily volume weighted average prices of our common stock during such period, the value of any shares of our common stock that a note holder will receive in satisfaction of our conversion obligation will be less than the value used to determine the number of shares that the note holder will receive. If we elect to satisfy our conversion obligation solely in shares of our common stock upon conversion of the 2026 Notes, we will be required to deliver the shares of our common stock, together with cash for any fractional share, on the second business day following the relevant conversion date. Accordingly, if the price of our common stock decreases during this period, the value of the shares that a note holder receives will be adversely affected and would be less than the conversion value of the 2026 Notes on the conversion date.

The Notes are not protected by restrictive covenants.

The indentures governing the Notes will not contain any financial or operating covenants or restrictions on the payments of dividends, the incurrence of indebtedness, or the issuance or repurchase of securities by us or any of our subsidiaries. The indentures will not contain any covenants or other provisions to afford protection to holders of the Notes in the event of a fundamental change or other corporate transaction involving us except to the extent described in the indentures governing the Notes.

The increase in the conversion rate for Notes converted in connection with a make-whole fundamental change or a notice of redemption may not adequately compensate note holders for any lost value of their Notes as a result of such transaction or redemption.

If a make-whole fundamental change occurs prior to the maturity date or if we deliver a notice of redemption, we will, under certain circumstances, increase the conversion rate by a number of additional shares of our common stock for Notes converted in connection with such make-whole fundamental change or Notes called (or deemed called) for redemption that are converted during the related redemption period. The increase in the conversion rate will be determined based on the date on which the make-whole fundamental change occurs or the date we deliver the notice of redemption, as the case may be, and the price paid (or deemed to be paid) per share of our common stock in the make-whole fundamental change or determined with respect to the notice of redemption, as the case may be. The increase in the conversion rate for Notes converted in connection with a make-whole fundamental change or called (or deemed called) for redemption that are converted during the related redemption period may not adequately compensate a note holder for any lost value of the Notes as a result of such transaction or redemption. Furthermore, if we call only a portion of the outstanding Notes for redemption, only those Notes called (or deemed called) for redemption will become convertible as a result of such call for redemption and only the conversion rate of Notes converted in connection with such notice of redemption will be increased. Accordingly, Notes not called for redemption will not become convertible if not otherwise convertible at such time and will remain outstanding, and may have reduced liquidity and a resulting reduced trading price.

In addition for the 2026 Notes, if the price per share of our common stock is greater than $325.00 per share or less than $44.55 per share (in each case, subject to adjustment), no additional shares will be added to the conversion rate. Moreover, in no event will the conversion rate per $1,000 principal amount of 2026 Notes as a result of this adjustment exceed 22.4466 shares of common stock, subject to adjustment. The 2023 Notes contain substantially similar conversion features.

Our obligation to increase the conversion rate for Notes converted in connection with a make-whole fundamental change or Notes called (or deemed called) for redemption that are converted during the related redemption period could be considered a penalty, in which case the enforceability thereof would be subject to general principles of reasonableness and equitable remedies.

The conversion rate of the Notes may not be adjusted for all dilutive events.

The conversion rate of the Notes is subject to adjustment for certain events, including, but not limited to, the issuance of certain stock dividends on our common stock, the issuance of certain rights or warrants, subdivisions, combinations, distributions of capital stock, indebtedness, or assets, cash dividends, and certain issuer tender or exchange offers. However, the conversion rate
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will not be adjusted for other events, such as a third-party tender or exchange offer or an issuance of our common stock for cash, that may adversely affect the trading price of the Notes or our common stock. An event that adversely affects the value of the Notes may occur, and that event may not result in an adjustment to the conversion rate.

Provisions in the indenture for the Notes may deter or prevent a business combination that may be favorable to our security holders.

If a fundamental change occurs prior to the maturity date, holders of the Notes will have the right, at their option, to require us to repurchase all or a portion of their Notes. In addition, if a make-whole fundamental change occurs prior the maturity date, we will in some cases be required to increase the conversion rate for a holder that elects to convert its Notes in connection with such make-whole fundamental change. Furthermore, the indentures for the Notes will prohibit us from engaging in certain mergers or acquisitions unless, among other things, the surviving entity assumes our obligations under the Notes. These and other provisions in the indenture could deter or prevent a third party from acquiring us even when the acquisition may be favorable to our security holders.

Some significant restructuring transactions may not constitute a fundamental change, in which case we would not be obligated to offer to repurchase the Notes.

Upon the occurrence of a fundamental change, our note holders have the right to require us to repurchase all or a portion of their Notes. However, the fundamental change provisions will not afford protection to holders of notes in the event of other transactions that could adversely affect the Notes. For example, a significant change in the composition of our board of directors or transactions such as leveraged recapitalizations, refinancings, restructurings, or acquisitions initiated by us may not constitute a fundamental change requiring us to offer to repurchase the Notes. In the event of any such transaction, the holders would not have the right to require us to repurchase the Notes, even though each of these transactions could increase the amount of our indebtedness, or otherwise adversely affect our capital structure or any credit ratings, thereby adversely affecting the holders of Notes.

We have not registered, and are not required to register, the Notes or the common stock issuable upon
conversion of the Notes, if any, which will limit our note holders’ ability to resell them.

The Notes and the shares of common stock issuable upon conversion of the Notes, if any, have not been, and are not required to be, registered under the Securities Act or any state securities laws. Unless the Notes and any shares of common stock issuable upon conversion of the Notes, if any, have been registered, the Notes and such shares may not be transferred or resold except in a transaction exempt from or not subject to the registration requirements of the Securities Act and applicable state securities laws. We do not intend to file a registration statement for the resale of the notes and the common stock, if any, into which the notes are convertible.

We cannot assure you that an active trading market will develop for the Notes.

We do not intend to apply to list the Notes on any securities exchange or to arrange for quotation on any automated dealer quotation system. The liquidity of the trading market in the Notes, and the market price quoted for the Notes, may be adversely affected by changes in the overall market for this type of security and by changes in our financial performance or prospects or in the prospects for companies in our industry generally. As a result, an active trading market may not develop for the Notes. If an active trading market does not develop or is not maintained, the market price and liquidity of the Notes may be adversely affected. In that case note holders may not be able to sell their Notes at a particular time or may not be able to sell their Notes at a favorable price.

Any adverse rating of the Notes may cause their trading price to fall.

We do not intend to seek a rating on the Notes. However, if a rating service were to rate the Notes and if such rating service were to lower its rating on the Notes below the rating initially assigned to the Notes or otherwise announces its intention to put the Notes on credit watch, the trading price of the Notes could decline.

Note holders may be subject to tax if we make or fail to make certain adjustments to the conversion rate of the Notes even though they do not receive a corresponding cash distribution.

The conversion rate of the Notes is subject to adjustment in certain circumstances, including the payment of cash dividends. If the conversion rate is adjusted as a result of a distribution that is taxable to our common stockholders, such as a cash dividend,
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note holders may be deemed to have received a dividend subject to U.S. federal income tax without the receipt of any cash. In addition, a failure to adjust (or to adjust adequately) the conversion rate after an event that increases a note holder’s proportionate interest in us could be treated as a deemed taxable dividend to the holder. If a make-whole fundamental change occurs prior to the maturity date or if we deliver a notice of redemption, we will, under some circumstances, increase the conversion rate for Notes converted in connection with the make-whole fundamental change or called (or deemed called) for redemption that are converted during the related redemption period. Such increase may also be treated as a distribution subject to U.S. federal income tax as a dividend. If a note holder is a non-U.S. holder, any deemed dividend would generally be subject to U.S. federal withholding tax, which may be set off against subsequent payments on the Notes or other amounts received by the holder.

Because the Notes will initially be held in book-entry form, holders must rely on The Depository Trust Company (DTC) procedures to receive communications relating to the Notes and exercise their rights and remedies.

We have issued the Notes in the form of one or more global notes registered in the name of Cede & Co., as nominee of DTC. Beneficial interests in global notes will be shown on, and transfers of global notes will be effected only through, the records maintained by DTC. Except in limited circumstances, we will not issue certificated notes.

Accordingly, if a note holder owns a beneficial interest in a global note, then it will not be considered an owner or holder of the Notes. Instead, DTC or its nominee will be the sole holder of the Notes. Unlike persons who have certificated notes registered in their names, owners of beneficial interests in global notes will not have the direct right to act on our solicitations for consents or requests for waivers or other actions from holders. Instead, those beneficial owners will be permitted to act only to the extent that they have received appropriate proxies to do so from DTC or, if applicable, a DTC participant. The applicable procedures for the granting of these proxies may not be sufficient to enable owners of beneficial interests in global notes to vote on any requested actions on a timely basis. In addition, notices and other communications relating to the Notes will be sent to DTC. We expect DTC to forward any such communications to DTC participants, which in turn would forward such communications to indirect DTC participants. However, we can make no assurances that note holders will timely receive any such communications.

The capped call transactions may affect the value of the Notes and our common stock.

In connection with the issuance of the Notes, we entered into capped call transactions with certain financial institutions (the option counterparties). The capped call transactions are expected generally to reduce the potential dilution upon any conversion of the Notes and/or offset any cash payments we are required to make in excess of the principal amount upon conversion of the Notes, with such reduction and/or offset subject to a cap. In connection with establishing their initial hedges of the capped call transactions, the option counterparties and/or their respective affiliates purchased shares of our common stock and/or entered into various derivative transactions with respect to our common stock. This activity could have increased (or reduced the size of any decrease in) the market price of our common stock or the Notes at that time. In addition, the option counterparties and/or their respective affiliates may modify their hedge positions by entering into or unwinding various derivatives with respect to our common stock and/or purchasing or selling our common stock in secondary market transactions (and are likely to do so during any observation period related to a conversion of notes or following any repurchase of notes by us on any fundamental change repurchase date or otherwise). This activity could also cause or avoid an increase or a decrease in the price of our common stock or the Notes. The potential effect, if any, of these transactions and activities on the price of our common stock or the Notes will depend in part on market conditions and cannot be ascertained at this time. Any of these activities could adversely affect the value of our common stock.

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Risks related to our common stock

We have never paid cash dividends on our capital stock, and we do not anticipate paying any dividends in the foreseeable future.

We have never paid cash dividends on any of our capital stock and currently intend to retain our future earnings to fund the development and growth of our business. As a result, capital appreciation, if any, of our common stock will be the sole source of gain for the foreseeable future.

Our charter documents and Delaware law could discourage, delay or prevent a change of control of our company or change in our management that stockholders consider favorable and cause our stock price to decline.

Certain provisions of our restated certificate of incorporation and restated bylaws and Delaware law could discourage, delay or prevent a change of control of our company or change in our management that the stockholders of our company consider favorable. These provisions:
•authorize the issuance of “blank check” preferred stock that our board of directors could issue to increase the number of outstanding shares and to discourage a takeover attempt;
•prohibit stockholder action by written consent, requiring all stockholder actions to be taken at a meeting of stockholders;
•establish advance notice procedures for nominating candidates to our board of directors or proposing matters that can be acted upon by stockholders at stockholder meetings;
•limit the ability of our stockholders to call special meetings of stockholders;
•prohibit stockholders from cumulating their votes for the election of directors;
•permit newly created directorships resulting from an increase in the authorized number of directors or vacancies on our board of directors to be filled only by majority vote of our remaining directors, even if less than a quorum is then in office;
•provide that our board of directors is expressly authorized to make, alter or repeal our bylaws;
•establish a classified board of directors so that not all members of our board are elected at one time;
•provide that our directors may be removed only for “cause” and only with the approval of the holders of at least 66 2/3rds percent of our outstanding stock; and
•require super-majority voting to amend certain provisions in our certificate of incorporation and bylaws.
Section 203 of the Delaware General Corporation Law may also discourage, delay or prevent a change of control of our company.
The exclusive forum provision in our amended and restated bylaws may limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with us or any of our directors, officers, or other employees, which may discourage lawsuits with respect to such claims.

Section 22 of the Securities Act creates concurrent jurisdiction for federal and state courts over all claims brought to enforce any duty or liability created by the Securities Act or the rules and regulations thereunder. In April 2020, we amended and restated our restated bylaws to provide that the federal district courts of the United States of America will, to the fullest extent permitted by law, be the exclusive forum for resolving any complaint asserting a cause of action arising under the Securities Act (a Federal Forum Provision). Our decision to adopt a Federal Forum Provision followed a decision by the Supreme Court of the State of Delaware holding that such provisions are facially valid under Delaware law. While there can be no assurance that federal courts or other state courts will follow the holding of the Delaware Supreme Court or determine that the Federal Forum Provision should be enforced in a particular case, application of the Federal Forum Provision generally means that suits brought by our stockholders to enforce any duty or liability created by the Securities Act must be brought in federal court and cannot be brought in state court. While neither the exclusive forum provision nor the Federal Forum Provision applies to suits brought to enforce any duty or liability created by the Exchange Act, Section 27 of the Exchange Act creates exclusive federal jurisdiction over all claims brought to enforce any duty or liability created by the Exchange Act or the rules and regulations thereunder. Accordingly, actions by our stockholders to enforce any duty or liability created by the Exchange Act or the rules and regulations thereunder also must be brought in federal court. Our stockholders will not be deemed to have waived our compliance with the federal securities laws and the regulations promulgated thereunder.

Any person or entity purchasing or otherwise acquiring or holding any interest in any of our securities shall be deemed to have notice of and consented to our exclusive forum provisions, including the Federal Forum Provision. These provisions may limit a stockholder’s ability to bring a claim in a judicial forum of their choosing for disputes with us or our directors, officers, or other employees, which may discourage lawsuits against us and our directors, officers, and other employees.

General risk factors
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The market price of our common stock has been, and may continue to be, volatile, and your investment in our stock could suffer a decline in value.

There has been significant volatility in the market price and trading volume of equity securities, which is often unrelated or disproportionate to the financial performance of the companies issuing the securities. These broad market fluctuations may negatively affect the market price of our common stock. The market price of our common stock could fluctuate significantly in response to the factors described in this “Risk Factors” section and elsewhere in this Form 10-Q and other factors, many of which are beyond our control, including:
•actual or anticipated variation in anticipated operating results of us or our competitors;
•the financial projections we may provide to the public, any changes in these projections or our failure to meet these projections;
•announcements by us or our competitors of new solutions, new or terminated significant contracts, commercial relationships or capital commitments;
•changes in the regulatory environment affecting our healthcare customers, including impediments to their ability to obtain reimbursement for their services, and other actual or anticipated legal or regulatory developments in the United States or foreign countries;
•actual or anticipated developments in our competitors’ businesses or the competitive landscape generally;
•failure of securities analysts to maintain coverage of us, changes in financial estimates by any securities analysts who follow our company, or our failure to meet these estimates or the expectations of investors;
•developments or disputes concerning our intellectual property or other proprietary rights;
•commencement of, or our involvement in, litigation;
•announced or completed acquisitions of businesses, technologies or assets by us or our competitor;
•changes in operating performance and stock market valuations of other technology companies generally, or those in our industry in particular;
•price and volume fluctuations attributable to inconsistent trading volume levels of our common stock;
•our decision to seek additional equity or debt financing;
•our public float relative to the total number of shares of our common stock that are issued and outstanding;
•price and volume fluctuations in the overall stock market, including as a result of trends in the economy as a whole;
•rumors and market speculation involving us or other companies in our industry;
•the dissemination of adverse or misleading reports or opinions about our business;
•any major change in our management;
•unfavorable economic conditions and slow or negative growth of our markets; and
•other events or factors, including those resulting from war, incidents of terrorism or health epidemics or contagious diseases.

Our business is subject to the risks of earthquakes, fire, floods and other natural catastrophic events, and to interruption by man-made problems such as power disruptions or terrorism.

Our corporate headquarters are located in the San Francisco Bay Area, a region known for seismic activity, and many critical components of our solutions are sourced in Asia and Mexico, regions known to suffer natural disasters and epidemics or contagious diseases. A significant natural disaster, such as an earthquake, fire or a flood, or epidemic or contagious disease, occurring at our headquarters, our other facilities or where our contract manufacturer or its suppliers are located, could harm our business, operating results and financial condition. In addition, acts of terrorism could cause disruptions in our business, the businesses of our customers and suppliers, or the economy as a whole. We also rely on information technology systems to communicate among our workforce located worldwide, and in particular, our senior management, general and administrative, and research and development activities that are coordinated with our corporate headquarters in the San Francisco Bay Area. Any disruption to our internal communications, whether caused by a natural disaster, an epidemic or contagious disease, or by man-made problems, such as power disruptions, in the San Francisco Bay Area, Asia or Mexico could delay our research and development efforts, cause delays or cancellations of customer orders or delay deployment of our solutions, which could harm our business, operating results and financial condition.

If we do not maintain effective internal control over financial reporting or disclosure controls and procedures in the future, the accuracy and timeliness of our financial reporting may be adversely affected.

The Sarbanes-Oxley Act requires, among other things, that we assess the effectiveness of our internal control over financial reporting annually and disclosure controls and procedures quarterly. In particular, we must obtain confidence in our internal control over financial reporting to allow management to report on the effectiveness of our internal control over financial
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reporting as required by Section 404 of the Sarbanes-Oxley Act. To the extent we find a material weakness or other deficiency in our internal control over financial reporting, the accuracy and timeliness of our financial reporting may be adversely affected.
Multiple negative consequences could ensue if a material weakness in our internal control over financial reporting is identified in the future, or we are not able to comply with the requirements of Section 404 in a timely manner, or we do not maintain effective controls. For example, our reported financial results could be materially misstated or could be restated, we could receive an adverse opinion regarding our controls from our independent registered public accounting firm, or we could be subject to investigations or sanctions by regulatory authorities. All of these outcomes would require additional financial and management resources, and the market price of our stock could decline.

We will continue to incur substantial costs as a result of operating as a public company and our management devotes substantial time to public company compliance obligations.

As a public company, we incur substantial legal, accounting and other expenses. The Sarbanes-Oxley Act, Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 and rules subsequently implemented by the SEC and our stock exchange, impose various requirements on public companies, including certain corporate governance practices. Our management and other personnel devote a substantial amount of time to these compliance requirements. Moreover, these rules and regulations, along with compliance with accounting principles and regulatory interpretations of such principles, as amended by the JOBS Act, have increased and will continue to increase our legal, accounting and financial compliance costs and have made and will continue to make some activities more time-consuming and costly.

We face risks related to securities litigation that could result in significant legal expenses and settlement or damage awards.

We have in the past been, and may in the future become, subject to claims and litigation alleging violations of the securities laws or other related claims, which could harm our business and require us to incur significant costs. Regardless of the outcome, these matters or future litigation may require significant attention from management and could result in significant legal expenses, settlement costs or damage awards that could have a material impact on our financial position, results of operations and cash flows.

If securities or industry analysts issue an adverse or misleading opinion regarding our stock or do not publish research or reports about our business, our stock price could decline.

The trading market for our common stock depends in part on the research and reports that securities or industry analysts publish about us and our business. We do not control these analysts or the content and opinions included in their reports. The price of our common stock could decline if one or more analysts downgrade our common stock or if those analysts issue other unfavorable commentary or cease publishing reports about us or our business. If one or more analysts cease coverage of our company or fail to regularly publish reports about our company, we could lose visibility in the financial market, which in turn could cause our stock price to decline. Further, securities or industry analysts may elect not to provide research coverage of our common stock and such lack of research coverage may adversely affect the market price of our common stock.

Item 2.    Unregistered Sales of Equity Securities and Use of Proceeds
None.

Item 3.    Defaults Upon Senior Securities
None.

Item 4.    Mine Safety Disclosures
None.

Item 5.    Other Information
None.

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Item 6.    Exhibits
Exhibit Index
Number
  Exhibit title
10.01
10.02
10.03
10.04
10.05
10.06
10.07
31.01  
31.02  
32.01+  
101.INS   Inline XBRL Instance Document - The instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.SCH   Inline XBRL Taxonomy Schema Linkbase Document
101.CAL   Inline XBRL Taxonomy Calculation Linkbase Document
101.DEF   Inline XBRL Taxonomy Definition Linkbase Document
101.LAB   Inline XBRL Taxonomy Labels Linkbase Document
101.PRE   Inline XBRL Taxonomy Presentation Linkbase Document
104 Cover Page Interactive Data File - (formatted in Inline XBRL and contained in Exhibit 101).
 
+ This certification shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date hereof and irrespective of any general incorporation language in any filings.

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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
VOCERA COMMUNICATIONS, INC.
Date: August 4, 2021 By:
/S/    Brent D. Lang
Brent D. Lang
Chief Executive Officer
Date: August 4, 2021 By:
/S/    Steven J. Anheier
Steven J. Anheier
Chief Financial Officer
(Principal Financial Officer)


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EXHIBIT 10.01
SUBLEASE
THIS SUBLEASE (this “Sublease”), dated as of May 25, 2021 (“Effective Date”), is entered into by and between ARLO TECHNOLOGIES, INC., a Delaware corporation (“Sublandlord”), and VOCERA COMMUNICATIONS, INC., a Delaware corporation (“Subtenant”).
RECITALS
A.    Sublandlord, as tenant, entered into that certain Office Lease dated as of June 28, 2018 (as amended, the “Master Lease”) with LT ORCHARD PARKWAY, LLC, a Delaware limited liability company (“Landlord”), for the lease of the entire building consisting of approximately 77,822 rentable square feet located at 3030 Orchard Parkway, San Jose, California 95134 (the “Premises”). The Premises is depicted on Exhibit A attached hereto. Capitalized terms used herein shall have the meanings given to those terms in the Master Lease, unless otherwise defined herein. Notwithstanding anything to the contrary stated in the Master Lease, the amounts payable under this Sublease as Rent and the Security Deposit shall not be subject to adjustment upon remeasurement of the Premises under the Master Lease and the final sentence of Section 1.2 of the Master Lease is hereby excluded from incorporation herein.
B.    Subject to the terms and conditions of this Sublease, Subtenant desires to sublease from Sublandlord, and Sublandlord desires to sublease to Subtenant, the Premises.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing, and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged by the parties, Sublandlord and Subtenant hereby agree as follows:
1.Sublease.
1.1Premises. Subject to the receipt of the Consent (as defined in Section 1.2 below), Sublandlord hereby subleases to Subtenant, and Subtenant hereby subleases from Sublandlord, the Premises. Subtenant acknowledges and agrees that the Premises contains the number of rentable square feet stated herein, and the Premises is not subject to remeasurement or adjustment. Subtenant shall have the right to use in common with Sublandlord all other common areas of the Project.
1.2Consent. This Sublease and Subtenant’s and Sublandlord’s obligations hereunder are expressly conditioned upon the execution by Landlord of a written consent to this Sublease, with such modifications as may be required by Landlord and as are reasonably acceptable to Sublandlord and Subtenant (“Consent”). Sublandlord shall promptly comply with all of the terms of the Master Lease applicable to such Consent, including the payment of any fees required in connection therewith, and the requirement to promptly submit a request for the Consent a second time if Landlord shall have failed to respond to the first request for the Consent. Subtenant shall promptly deliver to Sublandlord any information reasonably requested
1

by Landlord in connection with Landlord’s approval of this Sublease. If Sublandlord does not deliver Landlord’s Consent on or before the date that is the 45th day after the Effective Date (the “Outside Date”), then either Sublandlord or Subtenant shall have the right to terminate this Sublease by written notice (the “Outside Date Termination Notice”) to the other party on or before the date that is five (5) business days after the Outside Date (with time being of the essence with respect to the giving of the Outside Date Termination Notice). If Subtenant terminates this Sublease in accordance with the terms of this Section 1.2, then this Sublease shall be null and void ab initio and of no further force or effect and neither party shall have any further rights or obligations under this Sublease, except for such rights and obligations which expressly survive the expiration or earlier termination of this Sublease and except that Sublandlord shall promptly return to Subtenant the Pre-paid Rent and the Security Deposit.
2.Term; Early Access Period.
2.1Subject to the Early Access Period (as defined below), Sublandlord shall deliver to Subtenant the Premises on the date that is the last to occur of (i) February 1, 2022, and (ii) the date the Consent is fully executed and delivered to Subtenant (the “Commencement Date”). The term of this Sublease (the “Term”) shall end at 5:00 p.m. Pacific time on June 30, 2029 (the “Expiration Date”), unless sooner terminated pursuant to any provision hereof. Subtenant has no right to retain possession of the Premises or any part thereof beyond the Expiration Date or earlier termination of this Sublease or the Master Lease.
2.2On the condition that Landlord has delivered the Consent to Sublandlord and a copy of same has been delivered to Subtenant, and provided that Subtenant has not committed a default under this Sublease (beyond any applicable notice and cure period provided for herein), commencing no sooner than October 1, 2021, Subtenant and Subtenant’s invitees may enter the Premises, at Subtenant’s sole risk, solely in order to install in the Premises its furnishings, equipment, cabling and perform general business set-up (the “Early Access Period”). Prior to any entry by Subtenant pursuant to this Section 2.2, Subtenant shall have first furnished evidence of all insurance required hereunder and under the Master Lease. Subtenant’s use of the Premises during the Early Access Period shall be subject to all of the terms and conditions of this Sublease and the Master Lease excluding the obligation to pay Basic Rent or Subtenant’s Proportionate Share (as defined below) of Additional Rent.
3.Subtenant’s Rent Payment Obligations.
3.1Basic Rent. Commencing on the Commencement Date (the “Rent Commencement Date”), Subtenant shall pay to Sublandlord monthly base rent for the Premises (“Monthly Base Rent”) in accordance with the table below (“Base Rent Schedule”).
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Period Rent per Month Per Rentable Square Foot Monthly Base Rent for Premises
February 1, 2022 - January 31, 2023 $2.15
$167,317.30
February 1, 2023 - January 31, 2024 $2.22 $172,336.81
February 1, 2024 - January 31, 2025 2.28 $177,506.92
February 1, 2025 - January 31, 2026 $2.35 $182,832.13
February 1, 2026 - January 31, 2027 $2.42 $188,317.10
February 1, 2027 - January 31, 2028 $2.49 $193,966.61
February 1, 2028 - January 31, 2029 $2.57 $199,785.61
February 1, 2029 - June 30, 2029 $2.64 $205,779.18

3.2Abated Rent. Notwithstanding anything herein to the contrary, Sublandlord and Subtenant acknowledge and agree that Subtenant shall not pay Monthly Base Rent (the “Abated Base Rent”) for the Premises for first (1st), thirteenth (13th), twenty-fifth (25th), thirty-seventh (37th) and forty-ninth (49th) full calendar month after the Commencement Date (the “Base Rent Abatement Period”) of the Term hereof. Notwithstanding the foregoing, if, at any time during the Term, Subtenant is in uncured default under the terms of this Sublease, then (i) any remaining right to the Abated Base Rent during the Base Rent Abatement Period shall be null and void and of no further force or effect, (ii) Monthly Base Rent for any remaining portion of the Base Rent Abatement Period shall be payable in accordance with the terms of this Sublease without regard to the terms of this Section 3.2, and (iii) Sublandlord shall be entitled to recover, and Subtenant shall pay to Sublandlord, the unamortized portion of the Abated Base Rent as of the date of termination as damages hereunder. For the avoidance of doubt, Subtenant shall pay Subtenant’s Pro Rata Share of Additional Rent with respect to the Premises during the Base Rent Abatement Period (including, without limitation, Direct Expenses, Operating Expenses and Tax Expenses).
3.3Advanced Payment of Base Rent; Payment of Monthly Base Rent.
3.3.1Within three (3) business days after mutual execution of this Sublease, Subtenant shall deliver to Sublandlord as advance payment (a) an amount equal to $167,317.30, which amount shall be applied to the Base Rent for the second month of the Term, and (b) an amount equal to $56,031.84, which amount shall be applied to Subtenant’s Pro Rata Share of Additional Rent for the first month of the Term.
3.3.2Monthly Base Rent shall be paid without deduction or offset on the first day of each month of the Term. Attached hereto as Exhibit E is a copy of the rental statement from Landlord for Base Rent and Additional Rent for the month of April, 2021. If the Term does not begin on the first day of a calendar month or end on the last day of a calendar month, the monthly Base Rent for any such partial month shall be prorated by multiplying the monthly Base Rent by a fraction, the numerator of which is the number of days of the partial calendar month included in the Term and the denominator of which is the total number of days in the full calendar month. All Rent (as defined below) shall be payable in lawful money of the
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United States to Sublandlord at the address stated herein or to such other persons or at such other places as Sublandlord may designate in writing.
3.4Additional Rent: Operating Expenses and Tax Expenses.
3.4.1Subtenant shall, during the Term hereof concurrently with the payment of Monthly Base Rent, pay Subtenant’s Pro Rata Share (defined below) of Direct Expenses, Operating Expenses, and Tax Expenses (including the obligation specified in Section 4.5 of the Master Lease) with respect to the Premises in accordance with the Master Lease. For purposes of this Sublease and as used herein, the term “Subtenant’s Pro Rata Share” shall be one hundred percent (100%).
3.5Rent. As used in this Sublease, the term “Rent” shall mean, collectively, Monthly Base Rent for the Premises, Additional Rent and all other sums payable by Subtenant to Sublandlord under this Sublease, whether or not expressly designated as “rent”, all of which are deemed and designated as rent pursuant to the terms of this Sublease, except as expressly set forth in this Sublease. Notwithstanding the foregoing, “Rent” under this Sublease shall not include, and Subtenant shall have no responsibility or liability for (i) the payment of any cost, expense, and/or charge arising from Sublandlord’s breach of the Master Lease, or (ii) costs arising from Sublandlord’s failure to perform any condition or obligation under the Master Lease.
4.Utilities and Services. Subject to the terms of the Master Lease, should the Premises be separately metered for water, electricity, natural gas or other utilities serving the Premises, all such utilities used by Subtenant in the Premises (e.g., water, electricity and natural gas, as applicable) shall be paid for by Subtenant by separate charge billed by the applicable utility company and payable directly by Subtenant. Should the Premises not be separately metered, Subtenant shall pay Subtenant’s Pro Rata Share of any such utilities and services billed to Sublandlord provided to the Premises. Utility service to the Premises may be furnished by one or more companies. To the extent provided in the Master Lease, Landlord shall have the exclusive right to reasonably designate any company providing utility service to the Premises. Any utilities paid for directly by Subtenant shall not be included as Operating Expenses and, accordingly, shall not be passed-through for payment by Subtenant. Subtenant shall be responsible for paying for the actual cost of any excess utility consumption by Subtenant. Notwithstanding anything to the contrary specified in the Master Lease or this Sublease, Subtenant shall not install equipment of any kind or nature whatsoever nor engage in any practice or use which will necessitate any changes, replacements or additions to, or in the use of, the water system, heating system, plumbing system, air conditioning system, electrical system, floor load capacities, or other mechanical or structural system of the Premises, unless otherwise permitted under the Master Lease and in such case in accordance with the terms thereof.
5.Security Deposit. Within three (3) business days after mutual execution of this Sublease, Subtenant shall deposit with Sublandlord an amount equal to $785,433.06 (the “Security Deposit”) which may be in the form of cash which shall be held by Sublandlord as security for the faithful performance by Subtenant of all the terms, covenants and conditions of this Sublease to be kept and performed by Subtenant. If Subtenant defaults beyond any
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applicable notice grace and/or cure period with respect to any provision of this Sublease, Sublandlord may use any part of the Security Deposit for the payment of any Rent or any other sum in default, or to compensate Sublandlord for any other loss or damage which Sublandlord may incur, spend or become obligated to spend by reason of Subtenant’s default, or to compensate Sublandlord for any other loss or damage which Sublandlord may suffer by reason of Subtenant’s default. If any portion is so used, Subtenant shall within three (3) business days after written demand therefor, deposit with Sublandlord an amount sufficient to restore the Security Deposit to its original amount. Subtenant’s failure to do so shall be a material breach of this Sublease. Subtenant shall not be entitled to interest on such deposit. The Security Deposit shall not be deemed to be trust funds and may be commingled with other funds of Sublandlord. The Security Deposit or any remaining balance thereof shall be returned to Subtenant within thirty (30) days after termination of this Sublease, after deducting for damages (if any) permitted under this Sublease.
6.Parking; Roof Rights.
    Parking. Subject to and in accordance with the Landlord’s consent and the Master Lease, Subtenant shall have the right to use two hundred seventy-two (272) unreserved parking spaces in the Premises’ parking facility and eight (8) reserved parking spaces in the visitor surface parking lot area in front of the “Main Visitor Entrance” of the Premises as specified in the Master Lease. Furthermore, upon and subject to Landlord’s expressed approval, Sublandlord shall grant Subtenant the right to install up to ten (10) electric vehicle charging stations in the parking facility of the Premises as designated by Landlord and Sublandlord.
6.2    Roof Rights. Subject to and in accordance with the Landlord’s consent and the Master Lease, Subtenant shall have the right to use and install communication equipment on the roof of the Premises as necessary for the operation of Subtenant’s business at the Premises subject to and as specified in Article 30 of the Master Lease.
7.Use and Occupancy.
7.1Use. The Premises shall be used and occupied by Subtenant in accordance with the Permitted Use specified in the Summary of Basic Lease Information of the Master Lease and Article 5 of the Master Lease and for no other purpose.
7.2Compliance with Master Lease.
7.2.1Subtenant agrees that it will occupy the Premises in accordance with the terms of the Master Lease and will not suffer to be done or omit to do any act which may cause or reasonably likely to cause a violation of or a default under any of the terms and conditions of the Master Lease, or render Sublandlord liable for any damage, charge or expense thereunder, except for (a) any charge or expense attributable to the period prior to or after Subtenant’s occupancy of the Premises (specifically including, without limitation, any occupancy for the purposes contemplated by Section 2.2 above), (b) any damages, charges and expenses to the extent caused by Sublandlord under the Master Lease excluding damages, charges and expenses to the extent caused by Subtenant under this Sublease, or (c) any damages,
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charges and expenses arising from the negligence or willful misconduct of Sublandlord (the damages, charges and expenses described in the foregoing clauses (a), (b) and (c) are referred to collectively herein as the “Excluded Charges”). Subtenant further covenants and agrees to indemnify Sublandlord against and hold Sublandlord harmless from any claim, demand, action, proceeding, suit, liability, loss, judgment, expense (including reasonable attorneys’ fees and disbursements) and damages of any kind or nature whatsoever arising out of, by reason of, or resulting from, Subtenant’s failure to perform or observe any of the terms and conditions of the Master Lease or this Sublease. Sublandlord covenants and agrees to indemnify Subtenant against, defend and hold Subtenant harmless from any claim, demand, action, proceeding, suit, liability, loss, judgment, expense (including reasonable attorneys’ fees and disbursements) and damages of any kind or nature whatsoever arising out of, by reason of, or resulting from, (i) any acts, omissions or gross negligence of Sublandlord in or about the Premises (except to the extent caused by Subtenant’s negligence), or (ii) any breach or default by Sublandlord under the Master Lease or this Sublease.
7.2.2Subtenant agrees that Sublandlord shall not be required to perform any of the covenants, agreements and/or obligations of Landlord under the Master Lease and, insofar as any of the covenants, agreements and obligations of Sublandlord hereunder are required to be performed under the Master Lease by Landlord thereunder, Subtenant acknowledges and agrees that Sublandlord shall be entitled to look to Landlord for such performance. In addition, Sublandlord shall have no obligation to perform any improvements or repairs or any other obligation of Landlord under the Master Lease. Sublandlord shall not be responsible for any failure or interruption, for any reason whatsoever, of the services or facilities that may be appurtenant to or supplied to the Premises by Landlord or otherwise, including, without limitation, heat, air conditioning, ventilation, life-safety, water, electricity, elevator service and cleaning service, if any; and no failure to furnish, or interruption of, any such services or facilities shall give rise to any abatement, diminution or reduction of Subtenant’s obligations under this Sublease, or any liability on the part of Sublandlord unless such failure or interruption is caused by reason of Sublandlord’s gross negligence or willful misconduct. Notwithstanding the foregoing, Sublandlord shall use commercially reasonable efforts to keep the Master Lease in effect, and provided that there is no uncured default hereunder by Subtenant, upon Subtenant’s request to Sublandlord to do so, Sublandlord shall use commercially reasonable efforts, as reasonably indicated under the circumstances, to obtain the performance by Landlord of its obligations under the Master Lease and/or to obtain the consent or approval of Landlord of any action Subtenant desires to take that requires such consent or approval; provided, however, that Sublandlord shall have no obligation to bring any action or proceeding or to take any steps to enforce the Master Lease against Landlord unless Subtenant is unable to bring suit for lack of standing, and in such case Subtenant shall pay for the reasonable costs thereof.
7.2.3Any other provision in this Sublease to the contrary notwithstanding, Subtenant shall pay to Sublandlord as additional Rent hereunder any and all sums which Sublandlord may be required to pay to Landlord under the Master Lease with respect to the Premises to the extent attributable to the Subtenant.
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7.2.4Sublandlord reserves the right (i) on reasonable prior notice to Subtenant (with at least 24 hours advance notice except in the caser of an emergency), to inspect the Premises, and (ii) following a default by Subtenant (beyond applicable notice and cure periods), to enter upon the Premises, with reasonable prior notice, and to take such actions or cause such things to be done as may be necessary or appropriate in order to cure any Subtenant default under this Sublease or under the Master Lease. All such sums paid, and all reasonable costs and expenses of performing any such cure, shall be deemed additional Rent payable by Subtenant to Sublandlord upon demand, together with interest thereon at the Default Rate specified in Article 25 of the Master Lease from the date of invoice to Subtenant until repaid.
7.2.5Sublandlord shall use commercially reasonable efforts to deliver to Subtenant a copy of a Statement (as defined in Section 4.4.1 of the Master Lease) within ten (10) business days after receipt of same from Landlord. Within thirty (30) days after Subtenant's receipt of such Statement, should Subtenant have a reasonable basis to audit such Statement in accordance with Section 4.4.3 of the Master Lease, Subtenant may deliver a written request to Sublandlord to cause Sublandlord to exercise the right to audit Landlord’s books and records, for the benefit of Subtenant, pursuant to and in accordance with Section 4.4.3 of the Master Lease. Should Subtenant timely deliver written notice to Sublandlord of Subtenant’s election to audit Landlord’s books and records in accordance with this Section 7.2.5, Subtenant shall, within five (5) business days after written demand therefor, reimburse Sublandlord for any and all costs relating to such audit.
7.2.6If Sublandlord shall actually receive under the Master Lease an abatement of Rent as to the Sublease Premises (for a period after the Commencement Date), then Subtenant shall be entitled to receive from Sublandlord a proportionate share of abated Rent under this Sublease, which share shall be calculated in the same manner the abated rent was calculated under the Master Lease.
7.2.7Sublandlord shall pay Landlord all Rent and other charges that may become due and payable by Sublandlord pursuant to the Master Lease, as and when such amounts become due and payable thereunder.
7.2.8In the event that Sublandlord receives a notice of default from Master Landlord under the Master Lease, if Sublandlord is unable or unwilling to so cure such default, Sublandlord shall deliver such notice to Subtenant, who shall have the right, but not the obligation, to so cure such default and offset any related costs under this Sublease; provided, however, that any such actions to cure shall comply in all respects with the terms and obligations of Sublandlord as tenant under the Master Lease.
8.Subject to Master Lease. This Sublease is and shall be at all times subject and subordinate to the Master Lease. Subtenant acknowledges that Subtenant has reviewed and is familiar with all of the terms, agreements, covenants and conditions of the Master Lease, and assumes and agrees to be bound thereby. Additionally, Subtenant’s rights under this Sublease shall be subject to the terms of the Consent.
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9.Incorporation of Master Lease. The terms, covenants and conditions of the Master Lease are hereby incorporated into this Sublease as they apply to the Premises, except as otherwise expressly provided herein. The terms, conditions and respective obligations of Sublandlord and Subtenant to each other under this Sublease shall be the terms and conditions of the Master Lease except for those provisions of the Master Lease which are directly contradicted by this Sublease in which event the terms of this Sublease shall control over the Master Lease. Therefore, for the purposes of incorporation in this Sublease, (1) wherever in the Master Lease the word “Landlord” is used it shall be deemed to mean the Sublandlord herein, (2) wherever in the Master Lease the word “Tenant” is used it shall be deemed to mean the Subtenant herein, and (3) wherever in the Master Lease the words “Lease”, “Premises”, “Rent” or “Term” are used, such terms shall be deemed to mean this Sublease, the Premises, the Rent hereunder and the Term hereunder, respectively. The time limits contained in the Master Lease for the giving of notices, making of demands or performing of any act, condition or covenant on the part of the tenant thereunder, or for the exercise by the tenant thereunder of any right, remedy or option, are changed for the purposes of incorporation herein by reference by shortening the same in each instance by one (1) day, so that in each instance Subtenant shall have one (1) day less time to observe or perform hereunder than Sublandlord has as the tenant under the Master Lease unless the applicable notice, grace or cure period under the Master Lease is five (5) days or less, in which case such period shall not be shortened. Any non-liability, release, indemnity or hold harmless provision in the Master Lease for the benefit of Landlord or Tenant that is incorporated herein by reference shall be deemed to inure to the benefit of Sublandlord and Landlord, on the one hand, and Subtenant, on the other hand, and any other person intended to be benefitted by said provision, for the purpose of incorporation by reference in this Sublease. Any right of Landlord under the Master Lease of access or inspection, any right of Landlord under the Master Lease to do work in the Premises and any right of Landlord under the Master Lease in respect of rules and regulations, which is incorporated herein by reference, shall be deemed to inure to the benefit of Sublandlord, Landlord, and any other person intended to be benefitted by said provision, for the purpose of incorporation by reference in this Sublease.
10.Modifications. For the purposes of incorporation herein, the terms of the Master Lease are subject to the following additional modifications:
10.1In all provisions of the Master Lease (under the terms thereof and without regard to modifications thereof for purposes of incorporation into this Sublease) requiring the approval or consent of Landlord, Subtenant shall be required to obtain the approval or consent of both Sublandlord and Landlord, which consent shall not be unreasonably withheld, conditioned, or delayed by Sublandlord (and which shall be deemed granted if Landlord first grants its approval or consent).
10.2In all provisions of the Master Lease requiring Tenant to submit, exhibit to, supply or provide Landlord with evidence, certificates, or any other matter or thing, Subtenant shall be required to submit, exhibit to, supply or provide, as the case may be, the same to both Landlord and Sublandlord.
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10.3Subject to Sublandlord’s obligations under 7.2.2, Sublandlord shall have no obligation to restore or rebuild any portion of the Premises after any damage or destruction or any taking by eminent domain.
10.4Subject to Sublandlord’s obligations under 7.2.2, Sublandlord shall have no obligation to maintain any portion of the Premises.
10.5Subject to Sublandlord’s obligations under 7.2.2, Sublandlord shall have no obligation to provide utilities or any other services to the Premises.
10.6In all provisions of the Master Lease requiring Tenant to designate Landlord as an additional or named insured on its insurance policy, Subtenant shall be required to so designate Landlord and Sublandlord on its insurance policy.
10.7The right of Subtenant to assign the Sublease or to sub-sublet all or any part of the Premises shall require the prior written consent, if such consent is required under the Master Lease, of both Landlord and Sublandlord and shall otherwise be subject to and governed by Article 14 of the Master Lease. In addition to the terms and conditions set forth in Article 14 of the Master Lease, Landlord’s consent to this Sublease shall not waive Landlord’s rights as to any subsequent Transfers and any request to further sublease all or any portion of the Premises by Subtenant shall be subject to the requirements set forth in Article 14 of the Master Lease.
11.Exclusions. The following provisions of the Master Lease are NOT incorporated herein: Sections 3, 4, 7, 9, 10, 11, 12, and 13 of the Summary of Basic Lease Information, and Articles 2, 21, Sections 29.18, 29.24, 29.37 and Exhibits B, C, F, G and H of the Master Lease; except that to the extent of any conflict between the Master Lease and this Sublease then as between Sublandlord and Subtenant the terms of this Sublease shall govern.
12.Sublandlord’s Representations and Warranties. Sublandlord represents and warrants to Subtenant now and as of the Commencement Date as follows:
12.1Exhibit B to this Sublease is a redacted but true and complete copy of the Master Lease. The Master Lease, as attached as Exhibit B to this Sublease, is in full force and effect and has not been amended or modified.
12.2Sublandlord has received no written notice of default under the Master Lease, and to its actual knowledge, there exists no fact or circumstance which with the giving of notice or the passage of time or both would constitute a default by Sublandlord under the Master Lease.
12.3Sublandlord has given no written notice of default under the Master Lease and to its actual knowledge, without inquiry, there exists no fact or circumstance which with the giving of notice or the passage of time or both would constitute a default by Landlord under the Master Lease.
13.Intentionally Deleted.
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14.Termination of Master Lease. Sublandlord hereby acknowledges and agrees that it shall not voluntarily terminate the Master Lease without the prior written consent of Subtenant. If for any reason the Master Lease shall terminate prior to the Expiration Date, this Sublease shall thereupon be terminated unless Landlord elects to cause Subtenant to attorn to Landlord. In consideration of the foregoing, Sublandlord agrees, as a courtesy to Subtenant to request from Landlord a non-disturbance agreement in favor of Subtenant that provides that: (i) upon a default by Sublandlord under the Master Lease, this Sublease shall not be terminated by Landlord or affected by such default, (ii) this Sublease shall continue in full force and effect, and (iii) provided Subtenant is not in default of this Sublease, Subtenant’s occupancy of the Premises shall not be affected or disturbed by Landlord notwithstanding any termination of the Master Lease. Subtenant and Sublandlord acknowledge and agree that (A) the effectiveness of this Sublease is not conditioned or contingent upon Sublandlord’s obtaining such non-disturbance and (B) Subtenant shall reimburse Sublandlord for the costs of obtaining and negotiating any non-disturbance agreement for the benefit of Subtenant including any costs passed through by Landlord and reasonable attorneys’ fees of Landlord.
15.Indemnity.
(a)In addition to the indemnities provided under the Master Lease as incorporated herein, except to the extent arising from the gross negligence or willful misconduct of Sublandlord or its employees, contractors, agents or consultants, Subtenant shall indemnify, defend and hold harmless Sublandlord from and against all losses, costs, damages, expenses and liabilities, including, without limitation, reasonable attorneys’ fees and disbursements, which Sublandlord may incur or pay out (including, without limitation, to Landlord under the Master Lease) by reason of (i) any accidents, damages or injuries to persons or property occurring in, on or about the Premises (except to the extent caused by Sublandlord’s negligence or willful misconduct), (ii) any breach or default hereunder by Subtenant, (iii) any work performed after the date hereof in or to the Premises (except if performed by Landlord or Sublandlord), or (iv) any act, omission, negligence or willful misconduct on the part of Subtenant and/or its officers, partners, employees, agents, contractors, customers and/or invitees, or any person claiming through or under Subtenant in or about the Premises.
(b)Sublandlord covenants and agrees to indemnify Subtenant against and hold Subtenant harmless from any claim, demand, action, proceeding, suit, liability, loss, judgment, expense (including reasonable attorneys’ fees and disbursements) and damages of any kind or nature whatsoever which Subtenant may incur or pay out by reason of (i) any willful misconduct or gross negligence of Sublandlord in or about the Sublease Premises (except to the extent caused by Subtenant’s negligence), or (ii) any breach or default by Sublandlord under the Master Lease or this Sublease not otherwise attributable to the acts or omissions of Subtenant.
(c)The foregoing indemnity (and those referenced therein) shall survive the expiration or earlier termination of this Sublease.
16.Limitation on Liability. Notwithstanding any other term or provision of this Sublease, the liability of Sublandlord to Subtenant for any default in Sublandlord’s obligations under this Sublease shall be limited to actual, direct damages, and under no circumstances shall
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Subtenant, its partners, members, shareholders, directors, agents, officers, employees, contractors, sublessees, successors and/or assigns be entitled to recover from Sublandlord (or otherwise be indemnified by Sublandlord) for: (a) any losses, costs, claims, causes of action, damages or other liability incurred in connection with a failure of Landlord, its partners, members, shareholders, directors, agents, officers, employees, contractors, successors and/or assigns to perform or cause to be performed Landlord’s obligations under the Master Lease unless such failure to perform is due to a breach by Sublandlord under the Master Lease; or (b) any damages or other liability arising from or incurred in connection with the condition of the Premises or suitability of the Premises for Subtenant’s intended use. Subtenant shall, however, have the right to seek any injunctive or other equitable remedies as may be available to Subtenant under applicable law. Notwithstanding any other term or provision of this Sublease, (i) no personal liability shall at any time be asserted or enforceable against Sublandlord’s or Subtenant’s members, shareholders, directors, officers, or partners on account of any of Sublandlord’s or Subtenant’s obligations or actions under this Sublease, and (ii) neither Sublandlord nor Subtenant shall be liable to the other for any lost revenues, lost profit or other consequential, special or punitive damages arising in connection with this Sublease for any reason. As used in this Sublease, the term “Sublandlord” means at any time the then current holder of the tenant’s interest under the Master Lease and of the sublandlord’s interest under this Sublease.
17.Consents and Approvals. In any instance when Sublandlord’s consent or approval is required under this Sublease, (i) Sublandlord’s refusal to consent to or approve any matter or thing shall be deemed reasonable if, without limitation, such consent or approval is required under the provisions of the Master Lease incorporated herein by reference but has not been obtained from Landlord despite the good faith commercially reasonable request by Sublandlord and (ii) Sublandlord shall be deemed to have granted its consent if Landlord shall have granted its consent or approval to such request.
18.Condition of Premises.
18.1Delivery of Possession.
18.1.1Sublandlord shall deliver the Premises clean, with all operating systems servicing the Premises, including the roof membrane, windows, lighting, sensors and switches, building management systems, fire life and safety systems, doors, loading doors, MEP systems and emergency generator (collectively, the “Warrantied Items”), in good operating condition and the Premises are in compliance with all applicable laws and regulations, including ADA and Title 24 (the “Warranty”) as of the Commencement Date and for the first six (6) months thereafter (the “Warranty Period”). Notwithstanding the foregoing, the Warranty includes only the foregoing Warrantied Items provided by Sublandlord and specifically excludes any systems, equipment or improvements installed and/or contracted for directly by Subtenant or any modifications to the same made by Subtenant. Subtenant shall have until the expiration of the Warranty Period to notify Sublandlord in writing of any failure of the Warranty and in such event Sublandlord will make any required repairs at Sublandlord’s expense. Sublandlord will not be responsible for any repairs in connection with any failure of the Warranty unless Sublandlord
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is notified in writing by Subtenant no later than the expiration of the Warranty Period. Notwithstanding the foregoing or anything in this Lease to the contrary, in no event will repairs resulting from any of the following be covered by the Warranty: (i) the negligent or willful acts or omissions of, or misuse or abuse of any of the Warrantied Items, by Subtenant or its agents, employees, contractors, licensees or invitees, (ii) any improvements or alterations constructed by Subtenant, or (iii) any acts or omissions by Subtenant or its agents, employees, contractors, licensees, or invitees which solely voids or limits Sublandlord’s warranties.
18.1.2During the Term, at no charge to Subtenant, Subtenant shall be permitted to use the existing modular and office furniture and cabling located in the Premises and described in more particular detail in Exhibit C attached hereto (the “FF&E”). Should Subtenant, in Subtenant’s sole discretion, determine that any of the FF&E is not required by Subtenant for the conduct of Subtenant’s business from the Premises, Subtenant may deliver written notice to Sublandlord of such determination together with an itemized list of any FF&E that is not so required (the “Excluded FF&E”), at least thirty (30) days before the Early Access Period, and Sublandlord shall, at Sublandlord’s sole cost and expense, remove such Excluded FF&E from the Premises within thirty (30) days after such notice from Subtenant. Subtenant shall accept the FF&E in its current condition without any warranty of fitness from Sublandlord (Subtenant expressly acknowledges that no warranty is made by Sublandlord with respect to the condition of any cabling currently located in or serving the Premises). Subtenant shall use the FF&E only for the purposes for which such FF&E is intended and shall be responsible for the proper maintenance, care and repair of the Remaining Furniture and Cabling, at Subtenant’s sole cost and expense. On or about the date of expiration of this Sublease, Subtenant will purchase the FF&E from Sublandlord in its then “as-is” condition for the sum of $1.00 whereupon Sublandlord shall deliver to Subtenant the Bill of Sale in substantially the form attached hereto as Exhibit D with respect to the FF&E (excluding the Excluded FF&E), it being acknowledged and agreed that Subtenant shall have the right, at its sole cost and expense, from time to time during the Term of this Sublease to remove from the Premises those items from the FF&E that (i) Sublandlord has fully depreciated and authorized Subtenant to remove and (ii) that Subtenant no longer desires to use; provided, however, that Subtenant shall request approval from Sublandlord before any such removal which approval shall be granted by Sublandlord so long as Sublandlord has fully depreciated such items, and such removal shall not relieve Subtenant’s obligation to purchase all such remaining FF&E on or about the expiration of this Sublease pursuant to the terms hereof. Subtenant shall, at its sole cost and expense, be responsible for the removal of the FF&E upon the termination or expiration of this Sublease and its surrender of the Premises to the extent such removal is required by the Master Lease.
18.1.3Subject to the provisions of Section 18.1.1, Sublandlord shall deliver to Subtenant, and Subtenant shall accept, possession of the Premises in their “AS IS” condition as the Premises exist on the Commencement Date and, notwithstanding anything to the contrary set forth in the Master Lease to the contrary, Sublandlord shall have no obligation to furnish, render, pay for, consent to or supply any work, labor, services, materials, furniture, fixtures, equipment, decorations or other items to make the Premises ready or suitable for Subtenant’s occupancy. In making and executing this Sublease, Subtenant has relied solely on such investigations, examinations and inspections as Subtenant has chosen to make or has made
12


and has not relied on and Sublandlord has not made, any representation or warranty concerning the Premises with the exception of those specified in Section 11 above. Subtenant acknowledges that Sublandlord has afforded Subtenant the opportunity for full and complete investigations, examinations and inspections of the Premises. Subtenant acknowledges that it is not authorized to make or perform any alterations or improvements in or to the Premises except as permitted by the provisions of this Sublease and the Master Lease.
19.Surrender. Sublandlord represents and warrants to Subtenant that, other than the Tenant Improvements for which Sublandlord has no removal or restoration obligations as specified in Section 5.5 of the Work Letter, Sublandlord has performed no Alterations to the Premises. In accordance with the foregoing, Subtenant shall, at Subtenant’s sole cost and expense, upon the expiration or earlier termination of this Sublease, remove any Alterations constructed by Subtenant within the Premises in accordance with Article 15 of the Master Lease. For the avoidance of doubt, Sublandlord shall have no obligation to comply with Article 15 of the Master Lease, including, without limitation, the removal and/or restoration of any improvements or alterations within the Premises (or liability with respect to the cost of removal or restoring the same in accordance with Article 15 of the Master Lease) and as partial consideration for Sublandlord’s entry into this Sublease, Subtenant shall be solely responsible for complying with Article 15 of the Master Lease with respect to Alterations to the Premises performed by Subtenant. The indemnification obligations set forth in Section 14 of this Sublease are hereby expressly acknowledged to apply to Subtenant’s obligations under this provision.
20.Signage. Subject to the expressed prior written consent of Landlord and Sublandlord and as specified by Sublandlord, Subtenant shall have the right, at Subtenant’s sole cost and expense and otherwise in compliance with Article 23 of the Master Lease, to Sublandlord’s signage rights set forth in the Master Lease. Sublandlord shall request that Landlord grant such signage rights to Subtenant as part of the consent process and shall use commercially reasonable efforts to cause Landlord to grant such signage rights to Subtenant. Subtenant and Sublandlord acknowledge and agree that the effectiveness of this Sublease is not conditioned or contingent upon obtaining Sublandlord’s signage rights set forth in the Master Lease.
21.Notices. Any notice by either party to the other required, permitted or provided for herein shall be valid only if in writing and shall be deemed to be duly given only if given by email at the email address set forth below for the party to whom notice is given, and such notice shall be deemed given and served upon transmission so long as such notice is also given on the same day via (a) personal delivery, or (b) sent by means of FedEx, UPS Next Day Air or another reputable express mail delivery service guaranteeing next day delivery, or (c) sent by United States certified or registered mail, return receipt requested. For purposes of this Section 21, the parties’ respective contact information is: (i) if to Subtenant, Vocera Communications, Inc,; Email: legal@vocera.com; Address: 525 Race Street, San Jose, California 95126; Attn: General Counsel; and (ii) if to Sublandlord, Arlo Technologies, Inc., Email: legal@arlo.com; Address: 2200 Faraday Ave., Suite 150, Carlsbad, CA 92008, Attn: Legal Department, or at such other address for either party as that party may designate by notice to the other. A notice shall be deemed given and effective upon date of receipt or refusal to accept receipt unless the notice is
13


delivered personally and such delivery takes place after hours or on a holiday or weekend, in which event the notice shall be deemed given on the next succeeding business day.
22.Brokers. Sublandlord hereby represents to Subtenant that it has not dealt with any broker in connection with this Sublease or the Premises other than Newmark Knight Frank (“Sublandlord’s Broker”). Subtenant hereby represents to Sublandlord that it has not dealt with any broker in connection with this Sublease or the Premises other than Savills, Inc. (“Subtenant’s Broker”). Sublandlord agrees to indemnify, defend and hold Subtenant harmless from and against any and all claims of any brokers, claiming to have represented Sublandlord with respect to this Sublease or the Premises, other than Sublandlord’s Broker. Subtenant agrees to indemnify, defend and hold Sublandlord harmless from and against any and all claims of any brokers, claiming to have represented Subtenant with respect to this Sublease or the Premises, other than Subtenant’s Broker. Sublandlord shall be solely responsible for paying all commissions due in connection with the parties entering into this Sublease.
23. Complete Agreement. There are no representations, warranties, agreements, arrangements or understandings, oral or written, between the parties or their representatives relating to the subject matter of this Sublease which are not fully expressed in this Sublease. This Sublease cannot be changed or terminated nor may any of its provisions be waived orally or in any manner other than by a written agreement executed by both parties.
24.Interpretation. This Sublease shall be governed by and construed in accordance with California law. If any provision of this Sublease or the application thereof to any person or circumstance shall, for any reason and to any extent, be invalid or unenforceable, the remainder of this Sublease and the application of that provision to other persons or circumstances shall not be affected but rather shall be enforced to the extent permitted by law. The captions, headings and titles, if any, in this Sublease are solely for convenience of reference and shall not affect its interpretation. This Sublease shall be construed without regard to any presumption or other rule requiring construction against the party causing this Sublease or any part thereof to be drafted. If any words or phrases in this Sublease shall have been stricken out or otherwise eliminated, whether or not any other words or phrases have been added, this Sublease shall be construed as if the words or phrases so stricken out or otherwise eliminated were never included in this Sublease and no implication or inference shall be drawn from the fact that said words or phrases were so stricken out or otherwise eliminated. Each covenant, agreement, obligation or other provision of this Sublease shall be deemed and construed as a separate and independent covenant of the party bound by, undertaking or making same, not dependent on any other provision of this Sublease unless otherwise expressly provided. All terms and words used in this Sublease, regardless of the number or gender in which they are used, shall be deemed to include any other number and any other gender as the context may require. The word “person” as used in this Sublease shall mean a natural person or persons, a partnership, a corporation or any other form of business or legal association or entity. In the event of a dispute between the parties hereto, the prevailing party shall be entitled to collect from the non-prevailing party, in addition to any court-ordered judgment or award, its reasonable attorneys’ fees and court costs.
25.Confidentiality; Publicity.
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25.1The parties shall treat the contents of this Sublease as confidential information and shall not disclose the terms and conditions hereof to other parties; provided, however, each party may disclose portions of this Sublease to its officers, directors, employees, attorneys, architects, accountants, and other consultants and advisors to the extent such persons need to know such information provided such parties are first informed of the confidential nature of such information and each such party agrees to treat the information as confidential. In addition, the contents of this Sublease may be divulged to the extent, but only to the extent, required by law or in any administrative or judicial proceeding in which a party is required to divulge such information, however in such event such party shall notify the other prior to making such disclosure.
25.2Neither Landlord nor Sublandlord shall be permitted to use Subtenant’s name, marks or logos, or to issue any press release or other publicity regarding, or make any public statements, disclosures or communications concerning, this Agreement or any of its terms, or the relationship of the Parties, without prior written approval from Subtenant, which may be granted or withheld in Subtenant’s sole discretion. Without limiting the foregoing, Landlord and Sublandlord may not disclose or publicize to third parties any information related to its business relationship with Subtenant in marketing materials, sales pitches, case studies, on its website or other materials or documentation, without the express prior written consent of Subtenant.
26.Defined Terms. Capitalized terms not otherwise defined herein shall have the meanings ascribed to such terms in the Master Lease.
27.Counterparts. This Sublease may be executed in separate counterparts, each of which shall constitute an original and all of which together shall constitute one and the same instrument. This Sublease shall be fully executed when each party has signed and delivered to the other party at least one counterpart, even though no single counterpart contains the signatures of all parties hereto.
28.Authority to Execute. Subtenant and Sublandlord each represents and warrants to the other that each person executing this Sublease on behalf of such party is duly authorized to so execute and deliver this Sublease.
29.Certified Access Specialist. For purposes of Section 1938(a) of the California Civil Code, Sublandlord hereby discloses to Subtenant, and Subtenant hereby acknowledges, that the Premises has not undergone inspection by a Certified Access Specialist (CASp). As required by Section 1938(e) of the California Civil Code, Sublandlord hereby states as follows: “A Certified Access Specialist (CASp) can inspect the subject premises and determine whether the subject premises comply with all of the applicable construction-related accessibility standards under state law. Although state law does not require a CASp inspection of the subject premises, the commercial property owner or lessor may not prohibit the lessee or tenant from obtaining a CASp inspection of the subject premises for the occupancy or potential occupancy of the lessee or tenant, if requested by the lessee or tenant. The parties shall mutually agree on the arrangements for the time and manner of the CASp inspection, the payment of the fee for the CASp inspection, and the cost of making any repairs necessary to correct violations of construction-related accessibility standards within the premises.”
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[Signatures on Following Page]
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    IN WITNESS WHEREOF, the parties hereto have executed this Sublease as of the date first above written.

SUBLANDLORD: SUBTENANT:
ARLO TECHNOLOGIES, INC.,
a Delaware corporation
VOCERA COMMUNICATIONS, INC.,
a Delaware corporation
By: /S/ Brian Busse
By: /S/ Brent Lang
Name: Brian Busse
Name: Brent Lang
Title: General Counsel
Title: President and CEO
Date: 5/25/21
Date: 5/21/21




EXHIBIT A
Depiction of Premises
IMAGE_0.JPG


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IMAGE_1.JPG
3


EXHIBIT B
Master Lease
[See attached]
4


EXHIBIT C
FF&E
Floor Location ID number Qty Asset Description
1st 100 - Reception 239 1 Apple 9.7-inch iPad Wi-Fi - 6th generation - tablet - 32 GB - 9.7"
1st 100 - Reception 339 1 Samsung 65" Commercial LED Display
1st 100 - Reception 340 1 Samsung 65" Commercial LED Display
1st 100 - Reception 1 Mini fridge
1st 101 - Hearts Conf Room 207 1 Apple 9.7-inch iPad Wi-Fi - 6th generation - tablet - 32 GB - 9.7"
1st 101 - Hearts Conf Room 255 1 Lenovo ThinkCentre M910q - tiny desktop - Core i7 7700T 2.9 GHz - 16 GB
1st 101 - Hearts Conf Room 278 1 Logitech Rally UHD PTZ Camera
1st 101 - Hearts Conf Room 1 1 Modified miro conference table rectangle
1st 101 - Hearts Conf Room 2 1 Pure white float glassboard
1st 101 - Hearts Conf Room 3 1 Pure white float glassboard + accessories
1st 101 - Hearts Conf Room 304 1 Samsung 65" Commercial LED Display
1st 101 - Hearts Conf Room 305 1 Samsung 65" Commercial LED Display
1st 101 - Hearts Conf Room 1 Samsung soundbar
1st 101 - Hearts Conf Room 1 Samsung wireless speaker
1st 102 - Clubs Conf Room 210 1 Apple 9.7-inch iPad Wi-Fi - 6th generation - tablet - 32 GB - 9.7"
1st 102 - Clubs Conf Room 249 1 Lenovo ThinkCentre M910q - tiny desktop - Core i7 7700T 2.9 GHz - 16 GB
1st 102 - Clubs Conf Room 307 1 Samsung 65" Commercial LED Display
1st 102 - Clubs Conf Room 5 1 trapezoid shaped conference table
1st 102 - Clubs Conf Room 1 Aver VB342+ USB Camera Audio soundbar
1st 104 - Melissa/Vanessa's Office 6 1 clarus 4884 pure white float glassboard+ accessories
1st 104 - Melissa/Vanessa's Office 77 2 Private office "L" shaped
1st 104 - Melissa/Vanessa's Office 79 1 Right return shell
1st 105 - Security 1 Black with gray leather chair
1st 106 - Diamonds Conf Room 208 1 Apple 9.7-inch iPad Wi-Fi - 6th generation - tablet - 32 GB - 9.7"
1st 106 - Diamonds Conf Room 8 1 clarus 4860 pure white float glassboard+ accessories
1st 106 - Diamonds Conf Room 257 1 Lenovo ThinkCentre M910q - tiny desktop - Core i7 7700T 2.9 GHz - 16 GB
1st 106 - Diamonds Conf Room 303 1 Samsung 65" Commercial LED Display
1st 106 - Diamonds Conf Room 10 1 trapezoid shaped conference table
1st 106 - Diamonds Conf Room 1 Aver VB342+ USB Camera Audio soundbar
1st 109 - Break Room 6 Microwaves
1st 109 - Break Room 3 Refridgerators
1st 109 - Break Room 4 Toasters
1st 109 - Breakroom 11 1 60" banquet single booths sections for breakroom
1st 109 - Breakroom 12 4 72" w booth sections w caster system corner look on toe-kick
1st 109 - Breakroom 13 28 andaz café chair mid back, plain, phantom cloth
1st 109 - Breakroom 14 26 Beaufurn, bar stool
1st 109 - Breakroom 15 1 breck x large round table
1st 109 - Breakroom 16 1 calm corner left arm
1st 109 - Breakroom 17 2 calm ganging bracket
1st 109 - Breakroom 18 1 calm lounge three seat right arm


1st 109 - Breakroom 19 1 calm lounge two seat left arm
1st 109 - Breakroom 21 23 honest-overcast textiles (fabric for chairs in breakroom)
1st 109 - Breakroom 23 1 Open lounge chair on wire frame
1st 109 - Breakroom 24 2 rectangular bar height table, one piece top
1st 109 - Breakroom 25 4 rectangular shaped table
1st 109 - Breakroom 26 1 ribbon table with small round top and metal base
1st 109 - Breakroom 296 1 Samsung 4K HD LCD TV 82"
1st 109 - Breakroom 27 4 square café table, one piece top (rectangle)
1st 109 - Breakroom 28 10 square café table, one piece top with matching edge
1st 109 - Breakroom 29 4 stacking chair cart
1st 109 - Breakroom 30 39 textiles honest - overcast (fabric for chairs in breakrooms)
1st 111 - Shipping 200 3 storage rack, packing table, 3 in 1 hand truck
1st 113 - Data Center 31 1 Tripp Lite Mobile TV Floor Stand Cart Height-Adjustable LCD
1st 114 - Break Room Storage 3 Refridgerators
1st 116 - Connectivity Testing Workroom 83 3 ESD Modular Workstation w two uprgihts, lamps, outlets
1st 116/122 - Connectivity/Engineering Rooms 97 2 kona laptop table with 2"H tablet holder
1st 118 - Battery Workroom 351 3 Fully Welded & Assembled Workbench - 15" wx72"Lx24"H
1st 118 - Battery Workroom 5 ESD blue chairs
1st 120 - Systems Integration Workroom 22 1 kona laptop table wih 2"H tablet holder
1st 122 - Engineering Dev Room 350 2 Fully ESD Modular Workstation 30"Dx72"Lx34"H plus accessories
1st 123 - Flex Room 33 2 Pure white float glassboard, supplies
1st 123 - Flex Room 292 1 Samsung 4K HD LCD TV 82"
1st 123 - Flex Room 1 Ping pong table
1st 123 - Flex Room 11 Portable 4.5' rollaway tables for social events
1st 123 - Flex Room (chairs) 35 21 nesting chair mesh back, violet (conference room chairs)
1st 124/126 - Locker Rooms 192 60 Digilock (panel on lockers)
1st 132 - Spades Conf Room 209 1 Apple 9.7-inch iPad Wi-Fi - 6th generation - tablet - 32 GB - 9.7"
1st 132 - Spades Conf Room 37 1 Clarus 4896 White float glassboard tempered glass + accessories
1st 132 - Spades Conf Room 38 1 Conference room table rectangle
1st 132 - Spades Conf Room 39 1 credenza with 4 hinged doors
1st 132 - Spades Conf Room 254 1 Lenovo ThinkCentre M910q - tiny desktop - Core i7 7700T 2.9 GHz - 16 GB
1st 132 - Spades Conf Room 306 1 Samsung 65" Commercial LED Display
1st 132 - Spades Conf Room 1 Aver VB342+ USB Camera Audio soundbar
1st 134 - Training Conf Room 234 1 Apple 9.7-inch iPad Wi-Fi - 6th generation - tablet - 32 GB - 9.7"
1st 134 - Training Conf Room 244 1 Aver Cam520 USB Video Conference
1st 134 - Training Conf Room 245 1 Aver Cam520 USB Video Conference
1st 134 - Training Conf Room 32 2 etch mobile markerboard + supplies
1st 134 - Training Conf Room 253 1 Lenovo ThinkCentre M910q - tiny desktop - Core i7 7700T 2.9 GHz - 16 GB
1st 134 - Training Conf Room 288 1 Samsung 4K HD LCD TV 82"
1st 134 - Training Conf Room 289 1 Samsung 4K HD LCD TV 82"
1st 134 - Training Conf Room 299 1 Samsung 55" commercial LCD Display
1st 134 - Training Conf Room 2 Podiums
2


1st 134 - Training Conf Room 1 Portable 4' rollaway tables for social events
1st 134 - Training Conf Room 26 Portable 5' rollaway tables for social events
1st 134 - Training Conf Room (chairs) 36 53 Violet nesting chair (conference room chairs)
1st 134 - Training Conf Room (outside) 238 1 Apple 9.7-inch iPad Wi-Fi - 6th generation - tablet - 32 GB - 9.7"
1st 139 - Gym/Fitness Room 40 1 2.5-50lb Durabell Set
1st 139 - Gym/Fitness Room 41 1 60 horizontal dumbbell rack w optional 3rd tier
1st 139 - Gym/Fitness Room 42 1 7 POS F.I.D. Bench
1st 139 - Gym/Fitness Room 43 1 Algra Charters - Stretches
1st 139 - Gym/Fitness Room 44 1 Algra Charters Muscle Guide -Men
1st 139 - Gym/Fitness Room 45 1 Algra Charters Muscle Guide -women
1st 139 - Gym/Fitness Room 46 1 Algra Charts heart rate training
1st 139 - Gym/Fitness Room 47 1 All American Fitness Equipment - Balance Bar and rubber grips
1st 139 - Gym/Fitness Room 48 1 Bravo Pro functional trainer w chin up
1st 139 - Gym/Fitness Room 49 1 Bravo Utility Bench
1st 139 - Gym/Fitness Room 50 1 Digi lock ADA key
1st 139 - Gym/Fitness Room 51 1 Digilock master key
1st 139 - Gym/Fitness Room 52 1 digilock programming key
1st 139 - Gym/Fitness Room 54 2 Life Fitness Platinum Discover Cross-trainer w/ 10" touch screen console
1st 139 - Gym/Fitness Room 55 1 Life Fitness Platinum Discover recumbent bike w/ 10" touch screen console
1st 139 - Gym/Fitness Room 56 2 Life Fitness Platinum Discover SI Treadmill w 10" Screen console
1st 139 - Gym/Fitness Room 57 1 life fitness platinum discover upright bike w touch screem console
1st 139 - Gym/Fitness Room 58 2 Physician scale lb&kg w/ height rod
1st 139 - Gym/Fitness Room 59 1 Prestige Dip /Chin Assist Standard Weight Stack
1st 139 - Gym/Fitness Room 60 1 Prism Fitness Self Guided Storage System Elite
1st 139 - Gym/Fitness Room 341 1 Samsung 65" Commercial LED Display
1st 139 - Gym/Fitness Room 342 1 Samsung 65" Commercial LED Display
1st 139 - Gym/Fitness Room 62 1 Schwin Airdyne AD Pro
1st 139 - Gym/Fitness Room 34 1 Trash/recycle credenza with 4 hinged doors
1st 139 - Gym/Fitness Room 63 20 Storage lockers towers (3 lockers) triple door
1st Facilities 64 1 1st floor shipping /facilities office/desk/cubicle set-up
1st Facilities 65 1 2 box 1 file pedestal with lock
1st Facilities 66 2 Calm 12Dx18W Laptop
1st Facilities 67 1 ceasar stone (countertop table in kitchen area, stuck to ground)
1st Facilities 68 1 clarus white board and accessories
1st Facilities 169 1 credenza, 4 hinged doors with adjustable shelves for storage size
1st Facilities 71 1 Loop modular corner sofa
1st Facilities 72 1 Loop modular sofa arm on left side
1st Facilities 73 1 Loop modular sofa arm on right side
1st Facilities 74 1 Mail slots
1st Facilities 75 2 Modo 84" Bench w metal base
1st Facilities 76 1 Oval egg coffee table
1st Facilities 78 1 Reception front module with work surface
1st Facilities 80 1 two drawer lateral file w lock
1st Facilities 81 1 U Shape Ledge
3


1st Facilities 82 1 Vika swivel lounge chair self-return swivel
1st Lab Area 85 21 Office Master ergonomic mid-height chairs with arms
1st Misc 194 1 Fast Response Kit, Onsite AED, First Aid Station
1st/2nd 116/218 - Connectivity Workroom/IT Staging 193 8 ESD Stool
2nd 201 - Call Room (by elevator) 87 1 Kona laptop table with 2" tablet holder
2nd 201 - Call Room (by elevator) 88 1 Ponder highback lounge chair
2nd 201 - Call Room (by elevator) 89 1 ruby occasional table
2nd 201 - Call Room (by elevator) 90 3 Textiles - twist blue & green (fabric on ponder highback lounge chair)
2nd 202 - Call Room (by elevator) 91 1 Kona laptop table with 2" tablet holder
2nd 202 - Call Room (by elevator) 92 1 Ponder highback lounge chair
2nd 202 - Call Room (by elevator) 93 1 ruby occasional table
2nd 202 - Call Room (by elevator) 94 3 textiles twist blue & green (fabric on ponder highback lounge chair)
2nd 205 - Grand Canyon Conf Room 95 1 307" banquet table for conference room 205
2nd 205 - Grand Canyon Conf Room 221 1 Apple 9.7-inch iPad Wi-Fi - 6th generation - tablet - 32 GB - 9.7"
2nd 205 - Grand Canyon Conf Room 96 1 Etch mobile white board + accessories
2nd 205 - Grand Canyon Conf Room 251 1 Lenovo ThinkCentre M910q - tiny desktop - Core i7 7700T 2.9 GHz - 16 GB
2nd 205 - Grand Canyon Conf Room 282 1 Logitech Rally UHD PTZ Camera
2nd 205 - Grand Canyon Conf Room 98 1 Modified micro conference table rectangle
2nd 205 - Grand Canyon Conf Room 321 1 Samsung 65" Commercial LED Display
2nd 205 - Grand Canyon Conf Room 322 1 Samsung 65" Commercial LED Display
2nd 205 - Grand Canyon Conf Room 1 Samsung soundbar
2nd 205 - Grand Canyon Conf Room 1 Samsung wireless speaker
2nd 206 - Everglades Conf Room 220 1 Apple 9.7-inch iPad Wi-Fi - 6th generation - tablet - 32 GB - 9.7"
2nd 206 - Everglades Conf Room 272 1 Lenovo ThinkCentre M910q - tiny desktop - Core i7 7700T 2.9 GHz - 16 GB
2nd 206 - Everglades Conf Room 99 1 modified rectangle conference table
2nd 206 - Everglades Conf Room 100 1 Pure white float glassboard, tray+markers
2nd 206 - Everglades Conf Room 320 1 Samsung 65" Commercial LED Display
2nd 206 - Everglades Conf Room 1 Aver VB342+ USB Camera Audio soundbar
2nd 207 - Rocky Mountain Conf Room 219 1 Apple 9.7-inch iPad Wi-Fi - 6th generation - tablet - 32 GB - 9.7"
2nd 207 - Rocky Mountain Conf Room 101 1 Conference room table rectangle
2nd 207 - Rocky Mountain Conf Room 102 1 etch mobile markerboard, + accessories
2nd 207 - Rocky Mountain Conf Room 265 1 Lenovo ThinkCentre M910q - tiny desktop - Core i7 7700T 2.9 GHz - 16 GB
2nd 207 - Rocky Mountain Conf Room 281 1 Logitech Rally UHD PTZ Camera
2nd 207 - Rocky Mountain Conf Room 318 1 Samsung 65" Commercial LED Display
2nd 207 - Rocky Mountain Conf Room 319 1 Samsung 65" Commercial LED Display
2nd 207 - Rocky Mountain Conf Room 1 Samsung soundbar
2nd 207 - Rocky Mountain Conf Room 1 Samsung wireless speaker
2nd 208 - Lassen Open Collaboration 103 4 always lounge chair with 4 star black base
2nd 208 - Lassen Open Collaboration 104 2 bernhardt textiles, kavir-grassland (fabric on breck table small)
2nd 208 - Lassen Open Collaboration 105 1 breck table large
2nd 208 - Lassen Open Collaboration 106 1 breck table small
2nd 208 - Lassen Open Collaboration 107 4 kona laptop table with 2"H tablet holder
2nd 208 - Lassen Open Collaboration 108 1 kona round pouf 20" diameter
2nd 208 - Lassen Open Collaboration 109 1 kona round pouf 20" diameter
2nd 208 - Lassen Open Collaboration 110 2 Kvadrat maharam hallingdal (fabric for kona round pouf)
2nd 208 - Lassen Open Collaboration 111 2 Maharam - mallard, teal (fabric on breck table large)
2nd 209 - Glacier Conf Room 218 1 Apple 9.7-inch iPad Wi-Fi - 6th generation - tablet - 32 GB - 9.7"
2nd 209 - Glacier Conf Room 112 1 Conference room table rectangle
2nd 209 - Glacier Conf Room 273 1 Lenovo ThinkCentre M910q - tiny desktop - Core i7 7700T 2.9 GHz - 16 GB
4


2nd 209 - Glacier Conf Room 113 1 Pure white float glassboard, tray+markers
2nd 209 - Glacier Conf Room 317 1 Samsung 65" Commercial LED Display
2nd 209 - Glacier Conf Room 1 Aver VB342+ USB Camera Audio soundbar
2nd 210 - Yellow Stone Conf Room 217 1 Apple 9.7-inch iPad Wi-Fi - 6th generation - tablet - 32 GB - 9.7"
2nd 210 - Yellow Stone Conf Room 114 1 Conference room table rectangle
2nd 210 - Yellow Stone Conf Room 115 1 etch mobile markerboard, + accessories
2nd 210 - Yellow Stone Conf Room 258 1 Lenovo ThinkCentre M910q - tiny desktop - Core i7 7700T 2.9 GHz - 16 GB
2nd 210 - Yellow Stone Conf Room 280 1 Logitech Rally UHD PTZ Camera
2nd 210 - Yellow Stone Conf Room 315 1 Samsung 65" Commercial LED Display
2nd 210 - Yellow Stone Conf Room 316 1 Samsung 65" Commercial LED Display
2nd 210 - Yellowstone Conf Room 1 Samsung soundbar
2nd 210 - Yellowstone Conf Room 1 Samsung wireless speaker
2nd 211 - Carlsbad Caverns Conf Room 216 1 Apple 9.7-inch iPad Wi-Fi - 6th generation - tablet - 32 GB - 9.7"
2nd 211 - Carlsbad Caverns Conf Room 116 1 Conference room table rectangle
2nd 211 - Carlsbad Caverns Conf Room 117 1 etch mobile markerboard, + accessories
2nd 211 - Carlsbad Caverns Conf Room 252 1 Lenovo ThinkCentre M910q - tiny desktop - Core i7 7700T 2.9 GHz - 16 GB
2nd 211 - Carlsbad Caverns Conf Room 279 1 Logitech Rally UHD PTZ Camera
2nd 211 - Carlsbad Caverns Conf Room 313 1 Samsung 65" Commercial LED Display
2nd 211 - Carlsbad Caverns Conf Room 314 1 Samsung 65" Commercial LED Display
2nd 211 - Carlsbad Caverns Conf Room 1 Samsung soundbar
2nd 211 - Carlsbad Caverns Conf Room 1 Samsung wireless speaker
2nd 215 - Mother's Room 118 1 cielo round table
2nd 215 - Mother's Room 119 1 saven rocker with stationary arms
2nd 215 - Mother's Room 1 Mini fridge
2nd 218 - IT Staging 348 3 36"D x 72"L x 30"H Workstations with 9 LCD Arms
2nd 220 - Copy 1 Large white mobile board
2nd 222 - Clue Conf Room 222 1 Apple 9.7-inch iPad Wi-Fi - 6th generation - tablet - 32 GB - 9.7"
2nd 222 - Clue Conf Room 120 1 Conference room table rectangle
2nd 222 - Clue Conf Room 121 1 Glassboard, + tray + markers
2nd 222 - Clue Conf Room 261 1 Lenovo ThinkCentre M910q - tiny desktop - Core i7 7700T 2.9 GHz - 16 GB
2nd 222 - Clue Conf Room 323 1 Samsung 65" Commercial LED Display
2nd 222 - Clue Conf Room 1 Aver VB342+ USB Camera Audio soundbar
2nd 223 - Battleship Conf Room 223 1 Apple 9.7-inch iPad Wi-Fi - 6th generation - tablet - 32 GB - 9.7"
2nd 223 - Battleship Conf Room 122 1 Conference room table rectangle
2nd 223 - Battleship Conf Room 123 1 Glassboard, + tray + markers
2nd 223 - Battleship Conf Room 262 1 Lenovo ThinkCentre M910q - tiny desktop - Core i7 7700T 2.9 GHz - 16 GB
2nd 223 - Battleship Conf Room 324 1 Samsung 65" Commercial LED Display
2nd 223 - Battleship Conf Room 1 Aver VB342+ USB Camera Audio soundbar
2nd 224 - Chess Conf Room 211 1 Apple 9.7-inch iPad Wi-Fi - 6th generation - tablet - 32 GB - 9.7"
2nd 224 - Chess Conf Room 124 1 clarus 4884 pure white float glassboard+ accessories
2nd 224 - Chess Conf Room 125 1 d-shaped conference table
2nd 224 - Chess Conf Room 260 1 Lenovo ThinkCentre M910q - tiny desktop - Core i7 7700T 2.9 GHz - 16 GB
2nd 224 - Chess Conf Room 308 1 Samsung 65" Commercial LED Display
2nd 224 - Chess Conf Room 1 Aver VB342+ USB Camera Audio soundbar
2nd 225 - Checkers Conf Room 212 1 Apple 9.7-inch iPad Wi-Fi - 6th generation - tablet - 32 GB - 9.7"
2nd 225 - Checkers Conf Room 126 1 clarus 4884, 4x7 white float glassboard starphire
2nd 225 - Checkers Conf Room 127 1 d-shaped conference table
5


2nd 225 - Checkers Conf Room 274 1 Lenovo ThinkCentre M910q - tiny desktop - Core i7 7700T 2.9 GHz - 16 GB
2nd 225 - Checkers Conf Room 309 1 Samsung 65" Commercial LED Display
2nd 225 - Checkers Conf Room 1 Aver VB342+ USB Camera Audio soundbar
2nd 226 - Yahtzee Conf Room 213 1 Apple 9.7-inch iPad Wi-Fi - 6th generation - tablet - 32 GB - 9.7"
2nd 226 - Yahtzee Conf Room 128 1 Conference room table rectangle
2nd 226 - Yahtzee Conf Room 129 1 Glassboard, + tray + markers
2nd 226 - Yahtzee Conf Room 276 1 Lenovo ThinkCentre M910q - tiny desktop - Core i7 7700T 2.9 GHz - 16 GB
2nd 226 - Yahtzee Conf Room 310 1 Samsung 65" Commercial LED Display
2nd 226 - Yahtzee Conf Room 1 Aver VB342+ USB Camera Audio soundbar
2nd 226 - Yahtzee Conf Room 1 White wooden cabinet/drawers, similar to 3rd floor cubicles
2nd 227 - Scrabble Conf Room 214 1 Apple 9.7-inch iPad Wi-Fi - 6th generation - tablet - 32 GB - 9.7"
2nd 227 - Scrabble Conf Room 131 1 Conference room table rectangle
2nd 227 - Scrabble Conf Room 132 1 Glassboard, + tray + markers
2nd 227 - Scrabble Conf Room 269 1 Lenovo ThinkCentre M910q - tiny desktop - Core i7 7700T 2.9 GHz - 16 GB
2nd 227 - Scrabble Conf Room 311 1 Samsung 65" Commercial LED Display
2nd 227 - Scrabble Conf Room 1 Aver VB342+ USB Camera Audio soundbar
2nd 228 - Big Bend Open Collaboration 1 Aver VB342+ USB Camera Audio soundbar
2nd 228 - Big Bend Open Colloboration 215 1 Apple 9.7-inch iPad Wi-Fi - 6th generation - tablet - 32 GB - 9.7"
2nd 228 - Big Bend Open Colloboration 133 1 bar heigh rectangular table
2nd 228 - Big Bend Open Colloboration 134 1 clarus 4884 pure white float glassboard+ accessories
2nd 228 - Big Bend Open Colloboration 135 8 happy barstool with steel sled base
2nd 228 - Big Bend Open Colloboration 136 10 knowll crossroads tropical for happy bar stool (fabric for happy bar stool)
2nd 228 - Big Bend Open Colloboration 266 1 Lenovo ThinkCentre M910q - tiny desktop - Core i7 7700T 2.9 GHz - 16 GB
2nd 228 - Big Bend Open Colloboration 312 1 Samsung 65" Commercial LED Display
2nd 229 - Copy 1 Black bulletin board
2nd 230 - Yosemite Conf Room 232 1 Apple 9.7-inch iPad Wi-Fi - 6th generation - tablet - 32 GB - 9.7"
2nd 230 - Yosemite Conf Room 137 1 Conference room table rectangle
2nd 230 - Yosemite Conf Room 138 1 Glassboard + tray + markers
2nd 230 - Yosemite Conf Room 275 1 Lenovo ThinkCentre M910q - tiny desktop - Core i7 7700T 2.9 GHz - 16 GB
2nd 230 - Yosemite Conf Room 334 1 Samsung 65" Commercial LED Display
2nd 230 - Yosemite Conf Room 1 Aver VB342+ USB Camera Audio soundbar
2nd 231 - Snowdonia Conf Room 233 1 Apple 9.7-inch iPad Wi-Fi - 6th generation - tablet - 32 GB - 9.7"
2nd 231 - Snowdonia Conf Room 4 1 clarus 4884 pure white float glassboard+ accessories
2nd 231 - Snowdonia Conf Room 139 1 Conference room table rectangle
2nd 231 - Snowdonia Conf Room 140 1 Glassboard + tray + markers
2nd 231 - Snowdonia Conf Room 277 1 Lenovo ThinkCentre M910q - tiny desktop - Core i7 7700T 2.9 GHz - 16 GB
2nd 231 - Snowdonia Conf Room 335 1 Samsung 65" Commercial LED Display
2nd 231 - Snowdonia Conf Room 1 Aver VB342+ USB Camera Audio soundbar
2nd 232 - Coffee/Vending Area 141 2 2nd floor 72" bench w metal base
2nd 232 - Coffee/Vending Area 142 3 30" round café table
2nd 232 - Coffee/Vending Area 143 11 Camira halcyon cedar - lake (fabric on 72" bench w metal base)
2nd 232 - Coffee/Vending Area 144 3 four cast chair with polypropylene seat and 4 legged base
2nd 232 - Coffee/Vending Area 2 Microwaves
2nd 232 - Coffee/Vending Area 2 Refridgerators
2nd 232 - Coffee/Vending Area 1 Toaster
2nd/3rd Misc 195 2 Fast Response Kit, Onsite AED, First Aid Station
6


3rd 301 - Catering Area 1 Mini fridge
3rd 301 - Catering Area 1 Round table
3rd 301 - Catering Area 1 Toaster
3rd 302 - King's Landing Board Room 145 1 264" banquet for boardroom
3rd 302 - King's Landing Board Room 231 1 Apple 9.7-inch iPad Wi-Fi - 6th generation - tablet - 32 GB - 9.7"
3rd 302 - King's Landing Board Room 147 6 calm lamptop polished chrome
3rd 302 - King's Landing Board Room 271 1 Lenovo ThinkCentre M910q - tiny desktop - Core i7 7700T 2.9 GHz - 16 GB
3rd 302 - King's Landing Board Room 285 1 Logitech Rally UHD PTZ Camera
3rd 302 - King's Landing Board Room 148 11 luna textiles llinen
3rd 302 - King's Landing Board Room 149 2 Modo 84" Bench w metal base (outside bench)
3rd 302 - King's Landing Board Room 150 1 rectangle top 5 pieces
3rd 302 - King's Landing Board Room 290 1 Samsung 4K HD LCD TV 82"
3rd 302 - King's Landing Board Room 291 1 Samsung 4K HD LCD TV 82"
3rd 302 - King's Landing Board Room 151 1 trash/recycle 4 hinged doors with storage and recycle
3rd 302 - King's Landing Board Room (chairs) 204 19 Memento chair (black leather executive chairs)
3rd 302 - King's Landing Board Room (outside) 237 1 Apple 9.7-inch iPad Wi-Fi - 6th generation - tablet - 32 GB - 9.7"
3rd 302 - King's Landing Conf Room 1 Mini fridge
3rd 305 - Storage (nearby) 61 1 Pure white glassboard starphire + tray
3rd 306 - Dragonstone Conf Room 235 1 Apple 9.7-inch iPad Wi-Fi - 6th generation - tablet - 32 GB - 9.7"
3rd 306 - Dragonstone Conf Room 152 1 Conference room table rectangle
3rd 306 - Dragonstone Conf Room 153 1 Glassboard+tray+ markers
3rd 306 - Dragonstone Conf Room 256 1 Lenovo ThinkCentre M910q - tiny desktop - Core i7 7700T 2.9 GHz - 16 GB
3rd 306 - Dragonstone Conf Room 336 1 Samsung 65" Commercial LED Display
3rd 306 - Dragonstone Conf Room 1 Aver VB342+ USB Camera Audio soundbar
3rd 307 - Rivendell Conf Room 230 1 Apple 9.7-inch iPad Wi-Fi - 6th generation - tablet - 32 GB - 9.7"
3rd 307 - Rivendell Conf Room 154 1 Conference room table rectangle
3rd 307 - Rivendell Conf Room 155 1 Glassboard + tray + markers (on roller/mobile)
3rd 307 - Rivendell Conf Room 268 1 Lenovo ThinkCentre M910q - tiny desktop - Core i7 7700T 2.9 GHz - 16 GB
3rd 307 - Rivendell Conf Room 284 1 Logitech Rally UHD PTZ Camera
3rd 307 - Rivendell Conf Room 332 1 Samsung 65" Commercial LED Display
3rd 307 - Rivendell Conf Room 333 1 Samsung 65" Commercial LED Display
3rd 307 - Rivendell Conf Room 1 Samsung soundbar
3rd 307 - Rivendell Conf Room 1 Samsung wireless speaker
3rd 308 - Neverland Conf Room 229 1 Apple 9.7-inch iPad Wi-Fi - 6th generation - tablet - 32 GB - 9.7"
3rd 308 - Neverland Conf Room 156 1 Conference room table rectangle
3rd 308 - Neverland Conf Room 157 1 Glassboard + tray + markers
3rd 308 - Neverland Conf Room 263 1 Lenovo ThinkCentre M910q - tiny desktop - Core i7 7700T 2.9 GHz - 16 GB
3rd 308 - Neverland Conf Room 331 1 Samsung 65" Commercial LED Display
3rd 308 - Neverland Conf Room 1 Aver VB342+ USB Camera Audio soundbar
3rd 309 - Piccadilly Circus Conf Room 158 1 151" banquet for conference room 309
3rd 309 - Piccadilly Circus Conf Room 228 1 Apple 9.7-inch iPad Wi-Fi - 6th generation - tablet - 32 GB - 9.7"
3rd 309 - Piccadilly Circus Conf Room 159 1 Conference room table rectangle
3rd 309 - Piccadilly Circus Conf Room 160 1 Glassboard + tray + markers (on roller/mobile)
3rd 309 - Piccadilly Circus Conf Room 161 1 Kona lapop table with 2"H tablet holder
3rd 309 - Piccadilly Circus Conf Room 270 1 Lenovo ThinkCentre M910q - tiny desktop - Core i7 7700T 2.9 GHz - 16 GB
3rd 309 - Piccadilly Circus Conf Room 283 1 Logitech Rally UHD PTZ Camera
7


3rd 309 - Piccadilly Circus Conf Room 329 1 Samsung 65" Commercial LED Display
3rd 309 - Piccadilly Circus Conf Room 330 1 Samsung 65" Commercial LED Display
3rd 309 - Piccadilly Circus Conf Room 1 Samsung soundbar without wireless speaker
3rd 310 - Wall Street Conf Room 227 1 Apple 9.7-inch iPad Wi-Fi - 6th generation - tablet - 32 GB - 9.7"
3rd 310 - Wall Street Conf Room 162 1 Conference room table rectangle
3rd 310 - Wall Street Conf Room 163 1 Glassboard+tray+ markers
3rd 310 - Wall Street Conf Room 328 1 Samsung 65" Commercial LED Display
3rd 310 - Wall Street Conf Room 1 Aver VB342+ USB Camera Audio soundbar
3rd 310 - Wall Street Conf Room 1 Lenovo ThinkCentre M910q - tiny desktop - Core i7 7700T 2.9 GHz - 16 GB
3rd 311 - Coffee/Vending Area 164 6 four cast chair with polypropylene seat and 4 legged base
3rd 311 - Coffee/Vending Area 165 1 rectangular table, one piece top with 4 square posts
3rd 311 - Coffee/Vending Area 3 Microwaves
3rd 311 - Coffee/Vending Area 2 Refridgerators
3rd 311 - Coffee/Vending Area 1 Toaster
3rd 312 - Coachella Conf Room 226 1 Apple 9.7-inch iPad Wi-Fi - 6th generation - tablet - 32 GB - 9.7"
3rd 312 - Coachella Conf Room 166 1 Conference room table rectangle
3rd 312 - Coachella Conf Room 167 1 Glassboard + tray + markers
3rd 312 - Coachella Conf Room 267 1 Lenovo ThinkCentre M910q - tiny desktop - Core i7 7700T 2.9 GHz - 16 GB
3rd 312 - Coachella Conf Room 327 1 Samsung 65" Commercial LED Display
3rd 312 - Coachella Conf Room 1 Aver VB342+ USB Camera Audio soundbar
3rd 313 - Copy 9 1 credenza with (3) hinged doors and adjustable shelves
3rd 313 - Copy 1 Black bulletin board
3rd 329 - Men's Bathroom 1 High (thin) wooden table with black legs
3rd 333 - Open Office (IT) 1 Black leather chair at cube 3003
3rd 333 - Open Office (IT) 1 Lenovo ThinkCentre M910q - tiny desktop - Core i7 7700T 2.9 GHz - 16 GB
3rd 333 - Open Office (near IT) 293 1 Samsung 4K HD LCD TV 82"
3rd 333 - Open Office (near IT) 294 1 Samsung 4K HD LCD TV 82"
3rd 333 - Open Office (near IT) 295 1 Samsung 4K HD LCD TV 82"
3rd 334 - Silk Road Conf Room 236 1 Apple 9.7-inch iPad Wi-Fi - 6th generation - tablet - 32 GB - 9.7"
3rd 334 - Silk Road Conf Room 168 1 Conference room table rectangle
3rd 334 - Silk Road Conf Room 170 1 Glassboard+tray+ markers
3rd 334 - Silk Road Conf Room 264 1 Lenovo ThinkCentre M910q - tiny desktop - Core i7 7700T 2.9 GHz - 16 GB
3rd 334 - Silk Road Conf Room 286 1 Logitech Rally UHD PTZ Camera
3rd 334 - Silk Road Conf Room 337 1 Samsung 65" Commercial LED Display
3rd 334 - Silk Road Conf Room 338 1 Samsung 65" Commercial LED Display
3rd 334 - Silk Road Conf Room 1 Samsung soundbar
3rd 334 - Silk Road Conf Room 1 Samsung wireless speaker
3rd 335 - Windsor Castle Conf Room 224 1 Apple 9.7-inch iPad Wi-Fi - 6th generation - tablet - 32 GB - 9.7"
3rd 335 - Windsor Castle Conf Room 172 1 Conference room table rectangle
3rd 335 - Windsor Castle Conf Room 173 1 Glassboard+tray+ markers
3rd 335 - Windsor Castle Conf Room 250 1 Lenovo ThinkCentre M910q - tiny desktop - Core i7 7700T 2.9 GHz - 16 GB
3rd 335 - Windsor Castle Conf Room 325 1 Samsung 65" Commercial LED Display
3rd 335 - Windsor Castle Conf Room 1 Aver VB342+ USB Camera Audio soundbar
3rd 336 - Atlantis Conf Room 225 1 Apple 9.7-inch iPad Wi-Fi - 6th generation - tablet - 32 GB - 9.7"
3rd 336 - Atlantis Conf Room 174 1 Conference room table rectangle
3rd 336 - Atlantis Conf Room 175 1 Glassboard+tray+markers
8


3rd 336 - Atlantis Conf Room 259 1 Lenovo ThinkCentre M910q - tiny desktop - Core i7 7700T 2.9 GHz - 16 GB
3rd 336 - Atlantis Conf Room 326 1 Samsung 65" Commercial LED Display
3rd 336 - Atlantis Conf Room 1 Aver VB342+ USB Camera Audio soundbar
3rd 341 - Open Collaboration (by IT) 176 4 allob4s, always lounge chair with 4 star base in black
3rd 341 - Open Collaboration (by IT) 177 1 breck table large
3rd 341 - Open Collaboration (by IT) 178 1 breck table small
3rd 341 - Open Collaboration (by IT) 179 4 dali side chair
3rd 341 - Open Collaboration (by IT) 180 4 kona laptop table with 2" H tablet holder
3rd 341 - Open Collaboration (by IT) 181 1 kona round pouf 20" diameter
3rd 341 - Open Collaboration (by IT) 182 1 kona round pouf 20" diamter
3rd 341 - Open Collaboration (by IT) 183 1 rectangular table, one piece top with 4 square posts
3rd Misc 3 White mobile boards by cubicle area
3rd Misc - Private Offices 352 6 3rd floor private offices (furnitures/cabinets/desks)
3rd Misc - Private Offices 184 6 800 series tack board
3rd Misc - Private Offices 185 6 clarus 4848 glassboard starphire
All Misc 198 1 pillows
All Misc - Chairs for Conf Rooms 202 227
High back mesh chair conference room chairs (1 of 3) (Appendix 2)
All Misc - Chairs for Conf Rooms 203 2
High back mesh chair conference room chairs (2 of 3) (Appendix 2)
All Misc - Chairs for Conf Rooms 205 25
High back mesh chair conference room chairs (3 of 3) (Appendix 2)
All Misc - Chairs for Cubicles 201 38 Focus four leg side chair with mesh back (guest chairs, non-rolling)
All Misc - Chairs for Cubicles 206 205 Standard black lumbar seats (desk chairs)
All Misc - Cubicles/Workstations 347 288
Workstations/Cubicles (Appendix 2)


9


APPENDIX 2 - ADDITIONAL DETAILS – CHAIRS AND WORK STATIONS


CONF ROOM STYLE BLUE CHAIRS                
  WORKSTATIONS  
FLOOR Room No Room Name Qty FLOOR Qty
1ST 100 Reception 1 1st Floor 0
1ST 101 Hearts Conf Room 16 2nd Floor 126
1ST 102 Clubs Conf Room 7 3rd Floor 112
1ST 105 Security Room 1
1ST 106 Diamonds Conf Room 7
1ST 132 Spades Conf Room 8 Standard Cubicles - Unfurnished (Empty) Qty
1ST 134 Training Conf Room (Storage) 4 1st Floor 0
2ND 203 Monopoly Open Collaboration 8 2nd Floor (No. 2020) 1
2ND 205 Grand Canyon Conf Room 16 3rd Floor 0
2ND 206 Everglades Conf Room 7
2ND 207 Rocky Mountain Conf Room 10
2ND 208 Lassen Open Collaboration 6 Expanded Cubicles - Furnished Qty
2ND 209 Glacier Conf Room 8 1st Floor 0
2ND 210 Yellowstone Conf Room 10 2nd Floor 10
2ND 211 Carlsbad Caverns Conf Room 12 3rd Floor 16
2ND 222 Clue Conf Room 6
2ND 223 Battleship Conf Room 6
2ND 224 Chess Conf Room 4 Touchdown Stations/Cubicles - Furnished Qty
2ND 225 Checkers Conf Room 4 1st Floor 0
2ND 226 Yahtzee Conf Room 9 2nd Floor 7
2ND 227 Scrabble Conf Room 8 3rd Floor 16
2ND 228 Big Bend Open Collaboration 8
2ND 230 Yosemite Conf Room 6
2ND 231 Snowdonia Conf Room 6 Total 288
3RD 306 Dragonstone Conf Room 8
3RD 307 Rivendell Conf Room 10
3RD 308 Neverland Conf Room 6
3RD 309 Piccadilly Circus Conf Room 10
3RD 310 Wall Street Conf Room 6
3RD 312 Coachella Conf Room 6
3RD 334 Silk Road Conf Room 16
3RD 335 Windsor Castle Conf Room 7
3RD 336 Atlantis Conf Room 7
TOTAL     254

10


EXHIBIT D
BILL OF SALE
ARLO TECHNOLOGIES, INC., a Delaware corporation (“Seller”), in consideration of Ten Dollars ($1.00) and other good and valuable consideration paid to Seller by VOCERA COMMUNICATIONS, INC., a Delaware corporation (“Purchaser”), the receipt and sufficiency of which are hereby acknowledged, hereby sells, conveys, assigns, transfers, delivers and sets over to Purchaser all of Seller’s right, title and interest in and to the personal property listed on Schedule A annexed hereto and made a part hereof (collectively, the “Included Property”), and Purchaser, by its acceptance hereof, hereby purchases and accepts the Included Property.
    TO HAVE AND TO HOLD unto Purchaser and its successors and assigns to its and their own use and benefit forever.
    Seller does hereby represent to Purchaser that Seller is the lawful owner of the Included Property and that such Included Property is free and clear of all encumbrances.
    Subject to the foregoing, this Bill of Sale is made by Seller without recourse and without any expressed or implied representation or warranty whatsoever, including, but not limited to, any representation with respect to the merchantability of the Included Property or its fitness for any particular purpose; the design or condition of the Included Property; the quality of capacity of the Included Property; workmanship or compliance of the Included Property with the requirements of any applicable law, rule, specification or contract pertaining thereto; patent infringement or latent defects. Purchaser hereby acknowledges and agrees that the Included Property is being conveyed “AS IS, WHERE IS, WITH ALL FAULTS”.

[SIGNATURE PAGE TO FOLLOW]




    IN WITNESS WHEREOF, Seller has caused this Bill of Sale to be executed as of this ____ day of __________, 20__.
ARLO TECHNOLOGIES, INC.,
a Delaware corporation

By:    
Name:
Title:

2


EXHIBIT E
Rental Statement for Month of April 2021
[Omitted]


EXHIBIT 10.03
VOCERA COMMUNICATIONS, INC.
2021 EQUITY INCENTIVE PLAN
GLOBAL NOTICE OF PERFORMANCE RESTRICTED STOCK UNIT AWARD

Unless otherwise defined herein, the terms defined in the Vocera Communications, Inc. (the “Company”) 2021 Equity Incentive Plan (the “Plan”) will have the same meanings in this Global Notice of Performance Restricted Stock Unit Award and the electronic representation of this Global Notice of Performance Restricted Stock Unit Award, and the performance and vesting terms set forth in Appendix A attached hereto (the “Vesting Appendix”) established and maintained by the Company or a third party designated by the Company (the Global Notice of Performance Stock Unit Award and Vesting Appendix are collectively referred to as this “Notice”).
Name:    
Address:    
You (“Participant”) have been granted an award of Performance Restricted Stock Units (“PRSUs”) under the Plan subject to the terms and conditions of the Plan, this Notice and the attached Global Performance Restricted Stock Unit Award Agreement (the “Agreement”), including any applicable country-specific provisions in Appendix B attached hereto (the “Country Appendix”), which constitutes part of the Agreement.
Grant Number:            
Number of PRSUs:    
Date of Grant:    
Vesting Commencement Date:    As set forth in the Vesting Appendix.
Expiration Date:    The earlier to occur of: (a) the date on which settlement of all PRSUs granted hereunder occurs and (b) the tenth anniversary of the Date of Grant. This Award expires earlier if Participant’s Service terminates earlier, as described in the Agreement.
Vesting Schedule:     As set forth in the Vesting Appendix.
By accepting (whether in writing, electronically or otherwise) the PRSUs, Participant acknowledges and agrees to the following:
1)Participant understands that Participant’s Service with the Company or a Parent or Subsidiary or Affiliate is for an unspecified duration, can be terminated at any time (i.e., is “at-will”), except where otherwise prohibited by applicable law, and that nothing in this Notice, the Agreement or the Plan changes the nature of that relationship. Participant acknowledges that the vesting of the PRSUs pursuant to this Notice is subject to both achievement of the performance metrics set forth in the Vesting Appendix and Participant’s continuing Service as an Employee, Director or Consultant. To the extent permitted by applicable law, Participant agrees and acknowledges that the Vesting Schedule may change prospectively in the event that Participant’s service status changes between full- and part-time and/or in the event Participant is on a leave of absence, in accordance with Company policies relating to work schedules and vesting of Awards or as determined by the Committee.
2)This grant is made under and governed by the Plan, the Agreement and this Notice, and this Notice is subject to the terms and conditions of the Agreement and the Plan, both of which are incorporated herein by reference. Participant has read the Notice, the Agreement and the Plan.
3)Participant has read the Company’s Insider Trading Policy, and agrees to comply with such policy, as it may be amended from time to time, whenever Participant acquires or disposes of the Company’s securities.
4)By accepting the PRSUs, Participant consents to electronic delivery and participation as set forth in the Agreement.
1

APPENDIX A
VESTING APPENDIX

[Company to insert applicable performance metrics and vesting schedule.]

2


VOCERA COMMUNICATIONS, INC.
2021 EQUITY INCENTIVE PLAN
GLOBAL PERFORMANCE RESTRICTED STOCK UNIT AWARD AGREEMENT

Unless otherwise defined in this Global Performance Restricted Stock Unit Award Agreement (this “Agreement”), any capitalized terms used herein will have the same meaning ascribed to them in the Vocera Communications, Inc. 2021 Equity Incentive Plan (the “Plan”).
Participant has been granted Performance Restricted Stock Units (“PRSUs”) subject to the terms, restrictions and conditions of the Plan, the Global Notice of Performance Restricted Stock Unit Award (including the Vesting Appendix attached thereto, the “Notice”) and this Agreement, including any applicable country-specific provisions in Appendix B attached hereto (the “Country Appendix”), which constitutes part of this Agreement. In the event of a conflict between the terms and conditions of the Plan and the terms and conditions of the Notice or this Agreement, the terms and conditions of the Plan shall prevail.
1.Settlement. Settlement of PRSUs will be made within the time period set forth in the Vesting Appendix. Settlement of PRSUs will be in Shares. No fractional PRSUs or rights for fractional Shares shall be created pursuant to this Agreement.
2.No Stockholder Rights. Unless and until such time as Shares are issued in settlement of vested PRSUs, Participant will have no ownership of the Shares allocated to the PRSUs and will have no rights to dividends or to vote such Shares.
3.No Dividend Equivalents. Dividends, if any (whether in cash or Shares), will not be credited to Participant.
4.Non-Transferability of PRSUs. The PRSUs and any interest therein will not be sold, assigned, transferred, pledged, hypothecated, or otherwise disposed of in any manner other than by will or by the laws of descent or distribution or court order or unless otherwise permitted by the Committee on a case-by-case basis.
5.Termination and Change in Status.
(a)Except as may otherwise be provided in the Vesting Appendix, if Participant’s Service terminates for any reason, all unvested PRSUs will be forfeited to the Company forthwith, and all rights of Participant to such PRSUs will immediately terminate without payment of any consideration to Participant. Participant’s Service will be considered terminated (regardless of the reason for such termination and whether or not later found to be invalid or in breach of employment laws in the jurisdiction where Participant is providing Services or the terms of Participant’s employment or service agreement, if any) as of the date Participant is no longer actively providing services and Participant’s Service will not be extended by any notice period (e.g., Participant’s Service would not include a period of “garden leave” or similar period mandated under employment laws in the jurisdiction where Participant is providing Services or the terms of Participant’s employment or service agreement, if any). In case of any dispute as to whether and when a termination of Service has occurred, the Committee will have sole discretion to determine whether such termination of Service has occurred and the effective date of such termination (including whether Participant may still be considered to be actively providing Services while on a leave of absence).
3


(b)Participant acknowledges and agrees that the Vesting Schedule may change prospectively in the event Participant’s service status changes between full- and part-time and/or in the event Participant is on a leave of absence, in accordance with Company policies relating to work schedules and vesting of awards or as determined by the Committee.
6.Taxes.
(a)Responsibility for Taxes. Participant acknowledges that, regardless of any action taken by the Company or a Parent, Subsidiary or Affiliate employing or retaining Participant (the “Employer”), the ultimate liability for all income tax, social insurance, payroll tax, fringe benefits tax, payment on account or other tax-related items related to Participant’s participation in the Plan and legally applicable or deemed applicable to Participant (“Tax-Related Items”) is and remains Participant’s responsibility and may exceed the amount actually withheld by the Company or the Employer, if any. Participant further acknowledges that the Company and/or the Employer (i) make no representations or undertakings regarding the treatment of any Tax-Related Items in connection with any aspect of the PRSUs, including, but not limited to, the grant, vesting or settlement of the PRSUs and the subsequent sale of Shares acquired pursuant to such settlement and the receipt of any dividends, and (ii) do not commit to and are under no obligation to structure the terms of the grant or any aspect of the PRSUs to reduce or eliminate Participant’s liability for Tax-Related Items or achieve any particular tax result. Further, if Participant is subject to Tax-Related Items in more than one jurisdiction, Participant acknowledges that the Company and/or the Employer (or former employer, as applicable) may be required to withhold or account for Tax-Related Items in more than one jurisdiction. PARTICIPANT SHOULD CONSULT A TAX ADVISER APPROPRIATELY QUALIFIED IN EACH OF THE JURISDICTIONS, INCLUDING COUNTRY OR COUNTRIES IN WHICH PARTICIPANT RESIDES OR IS SUBJECT TO TAXATION.
(b)Withholding. Prior to any relevant taxable or tax withholding event, as applicable, to the extent permitted by applicable law, Participant agrees to make arrangements satisfactory to the Company and/or the Employer to satisfy all Tax-Related Items. In this regard, Participant authorizes the Company and/or the Employer, or their respective agents, at their discretion, to satisfy any withholding obligations or rights for Tax-Related Items by one or a combination of the following:
(i)withholding from Participant’s wages or other cash compensation payable to Participant by the Company and/or the Employer or any other Parent, Subsidiary or Affiliate;
(ii)withholding from proceeds of the sale of Shares acquired upon settlement of the PRSUs either through a voluntary sale or through a mandatory sale arranged by the Company (on Participant’s behalf pursuant to this authorization and without further consent);
(iii)withholding Shares to be issued upon settlement of the PRSUs, provided the Company only withholds the number of Shares necessary to satisfy no more than the maximum statutory withholding amounts;
(iv)Participant’s payment of a cash amount (including by check representing readily available funds or a wire transfer); or
(v)any other arrangement approved by the Committee and permitted under applicable law;
4


all under such rules as may be established by the Committee and in compliance with the Company’s Insider Trading Policy and 10b5-1 Trading Plan Policy, if applicable; provided however, that if Participant is a Section 16 officer of the Company under the Exchange Act, then the Committee (as constituted in accordance with Rule 16b-3 under the Exchange Act) shall establish the method of withholding from alternatives (i) – (v) above, and the Committee shall establish such method prior to the tax withholding event.
The Company may withhold or account for Tax-Related Items by considering applicable statutory or other withholding rates, including minimum or maximum rates applicable in Participant’s jurisdiction(s). In the event of over-withholding, Participant may receive a refund of any over-withheld amount in cash (with no entitlement to the equivalent amount in Shares), or if not refunded, Participant may be able to seek a refund from the local tax authorities. In the event of under-withholding, Participant may be required to pay any additional Tax-Related Items directly to the applicable tax authority. If the obligation for Tax-Related Items is satisfied by withholding in Shares, for tax purposes, Participant will be deemed to have been issued the full number of Shares subject to the vested PRSUs, notwithstanding that a number of the Shares are held back solely for the purpose of satisfying the withholding obligation for Tax-Related Items.
The Company may refuse to issue or deliver the Shares or the proceeds of the sale of Shares, if Participant fails to comply with Participant’s obligations in connection with the Tax-Related Items.
7.Nature of Grant. By accepting the PRSUs, Participant acknowledges, understands and agrees that:
(a)the Plan is established voluntarily by the Company, it is discretionary in nature and it may be modified, amended, suspended or terminated by the Company at any time, to the extent permitted by the Plan;
(b)the grant of the PRSUs is exceptional, voluntary and occasional and does not create any contractual or other right to receive future grants of PRSUs, or benefits in lieu of PRSUs, even if PRSUs have been granted in the past;
(c)all decisions with respect to future PRSUs or other grants, if any, will be at the sole discretion of the Company;
(d)Participant is voluntarily participating in the Plan;
(e)the PRSUs and Participant’s participation in the Plan will not create a right to employment or be interpreted as forming or amending an employment or service contract with the Company, the Employer or any other Parent, Subsidiary or Affiliate and shall not interfere with the ability of the Company, the Employer or any other Parent, Subsidiary or Affiliate, as applicable, to terminate Participant’s Service (if any);
(f)the PRSUs and the Shares subject to the PRSUs, and the income from and value of same, are not intended to replace any pension rights or compensation;
(g)the PRSUs and the Shares subject to the PRSUs, and the income from and value of same, are not part of normal or expected compensation for purpose including, but not limited to, calculating any severance, resignation, termination, redundancy, dismissal, end-of-service payments, bonuses, long-service awards, pension or retirement or welfare benefits or similar payments;
5


(h)unless otherwise agreed with the Company, the PRSUs and the Shares subject to the PRSUs, and the income from and value of same, are not granted as consideration for, or in connection with, the service Participant may provide as a director of a Parent, Subsidiary or Affiliate;
(i)the future value of the underlying Shares is unknown, indeterminable and cannot be predicted with certainty;
(j)no claim or entitlement to compensation or damages will arise from forfeiture of the PRSUs resulting from Participant’s termination of Service (regardless of the reason for such termination and whether or not later found to be invalid or in breach of employment laws in the jurisdiction where Participant is employed or the terms of Participant’s employment agreement, if any); and
(k)neither the Company, the Employer nor any Parent, Subsidiary or Affiliate will be liable for any foreign exchange rate fluctuation between Participant’s local currency and the United States Dollar that may affect the value of the PRSUs or of any amounts due to Participant pursuant to the settlement of the PRSUs or the subsequent sale of any Shares acquired upon settlement.
8.No Advice Regarding Grant. The Company is not providing any tax, legal or financial advice, nor is the Company making any recommendations regarding Participant’s participation in the Plan, or Participant’s acquisition or sale of the underlying Shares. Participant acknowledges, understands and agrees he or she should consult with his or her own personal tax, legal and financial advisors regarding his or her participation in the Plan before taking any action related to the Plan.
9.Data Privacy. Participant hereby explicitly and unambiguously consents to the collection, use and transfer, in electronic or other form, of Participant’s personal data as described in this Agreement and any other PRSU grant materials by and among, as applicable, the Employer, the Company and any other Parent, Subsidiary or Affiliate for the purpose of implementing, administering and managing the Plan.
Participant understands that the Company and the Employer may hold certain personal information about Participant, including, but not limited to, Participant’s name, home address, email address and telephone number, date of birth, passport, social insurance number or other identification number (e.g., resident registration number), salary, nationality, job title, any shares of stock or directorships held in the Company, details of all awards or any other entitlement to shares of stock awarded, canceled, exercised, vested, unvested or outstanding in Participant’s favor (“Data”), for the purpose of implementing, administering and managing the Plan.

Participant understands that Data may be transferred to E*TRADE Financial Corporate Services, Inc., its affiliates or successors, or such other stock plan service provider or other third party as may be selected by the Company in the future, to assist the Company with the implementation, administration and management of the Plan, presently or in the future. Participant understands that the recipients of Data may be located in the United States or elsewhere, and that the recipients’ country (e.g., the United States) may have different data privacy laws and protections than Participant’s country. Participant understands that, if he or she resides outside the United States, he or she may request a list with the names and addresses of any potential recipients of Data by contacting Participant’s local human resources representative. Participant authorizes the Company and any other possible recipients which may assist the Company (presently or in the future) with implementing, administering and managing the Plan to receive, possess, use, retain and transfer Data, in electronic or other form, for the purpose of implementing, administering and managing the Plan. Participant
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understands that Data will be held only as long as is necessary to implement, administer and manage Participant’s participation in the Plan. Participant understands that, if he or she resides outside the United States, he or she may, at any time, view Data, request information about the storage and processing of Data, require any necessary amendments to Data or refuse or withdraw the consents herein, in any case without cost, by contacting in writing Participant’s local human resources representative. Further, Participant understands that Participant is providing the consents herein on a purely voluntary basis. If Participant does not consent, or if Participant later seeks to revoke Participant’s consent, Participant’s employment status or service with the Employer will not be affected; the only consequence of refusing or withdrawing Participant’s consent is that the Company may not be able to grant PRSUs to Participant or administer or maintain such PRSUs. Therefore, Participant understands that refusing or withdrawing Participant’s consent may affect Participant’s ability to participate in the Plan. For more information on the consequences of Participant’s refusal to consent or withdrawal of consent, Participant understands that he or she may contact Participant’s local human resources representative.
10.Language. Participant acknowledges that he or she is sufficiently proficient in English, or has consulted with an advisor who is proficient in the English language, so as to enable Participant to understand the terms and conditions of this Agreement and the Plan. Furthermore, if Participant has received this Agreement or any other document related to the PRSU and/or the Plan translated into a language other than English and if the meaning of the translated version is different than the English version, the English version will control.
11.Country Appendix. Notwithstanding any provisions in this Agreement, the PRSUs will be subject to any additional or different terms and conditions set forth in the Country Appendix for Participant’s country. Moreover, if Participant relocates to one of the countries included in the Country Appendix, the terms and conditions for such country will apply to Participant, to the extent the Company determines that the application of such terms and conditions is necessary or advisable for legal or administrative reasons. The Country Appendix constitutes part of this Agreement.
12.Imposition of Other Requirements. The Company reserves the right to impose other requirements on Participant’s participation in the Plan, on the PRSUs and on any Shares acquired under the Plan, to the extent the Company determines it is necessary or advisable for legal or administrative reasons, and to require Participant to sign any additional agreements or undertakings that may be necessary to accomplish the foregoing.
13.Acknowledgement. The Company and Participant agree that the PRSUs are granted under and governed by the Notice, this Agreement and the provisions of the Plan (incorporated herein by reference). Participant: (a) acknowledges receipt of a copy of the Plan and the Plan prospectus, (b) represents that Participant has carefully read and is familiar with their provisions, and (c) hereby accepts the PRSUs subject to all of the terms and conditions set forth herein and those set forth in the Plan and the Notice.
14.Entire Agreement; Enforcement of Rights. This Agreement, the Plan and the Notice constitute the entire agreement and understanding of the parties relating to the subject matter herein and supersede all prior discussions between them. Any prior agreements, commitments or negotiations concerning the purchase of the Shares hereunder are superseded. No adverse modification of or adverse amendment to this Agreement, nor any waiver of any rights under this Agreement, will be effective unless in writing and signed by the parties to this Agreement (which writing and signing may be electronic). The failure by either party to enforce any rights under this Agreement will not be construed as a waiver of any rights of such party.
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15.Compliance with Laws and Regulations. The issuance of Shares will be subject to and conditioned upon compliance by the Company and Participant with all applicable state, federal and foreign laws and regulations and with all applicable requirements of any stock exchange or automated quotation system on which the Company’s Shares may be listed or quoted at the time of such issuance or transfer. Participant understands that the Company is under no obligation to register or qualify the Shares with any state, federal or foreign securities commission or to seek approval or clearance from any governmental authority for the issuance or sale of the Shares. Further, Participant agrees that the Company shall have unilateral authority to amend the Plan and this Agreement without Participant’s consent to the extent necessary to comply with securities or other laws applicable to issuance of Shares. Finally, the Shares issued pursuant to this Agreement shall be endorsed with appropriate legends, if any, determined by the Company.
16.Severability. If one or more provisions of this Agreement are held to be unenforceable under applicable law, then such provision will be enforced to the maximum extent possible given the intent of the parties hereto. If such clause or provision cannot be so enforced, then (a) such provision will be excluded from this Agreement, (b) the balance of this Agreement will be interpreted as if such provision were so excluded and (c) the balance of this Agreement will be enforceable in accordance with its terms.
17.Governing Law and Venue. This Agreement and all acts and transactions pursuant hereto and the rights and obligations of the parties hereto will be governed, construed and interpreted in accordance with the laws of the State of Delaware, without giving effect to such state’s conflict of laws rules. Any and all disputes relating to, concerning or arising from this Agreement, or relating to, concerning or arising from the relationship between the parties evidenced by the Plan or this Agreement, will be brought and heard exclusively in the United States District Court for the Northern District of California or the Superior Court of California, County of Santa Clara. Each of the parties hereby represents and agrees that such party is subject to the personal jurisdiction of said courts; hereby irrevocably consents to the jurisdiction of such courts in any legal or equitable proceedings related to, concerning or arising from such dispute, and waives, to the fullest extent permitted by law, any objection which such party may now or hereafter have that the laying of the venue of any legal or equitable proceedings related to, concerning or arising from such dispute which is brought in such courts is improper or that such proceedings have been brought in an inconvenient forum.
18.No Rights as Employee, Director or Consultant. Nothing in this Agreement will affect in any manner whatsoever any right or power of the Company, or a Parent, Subsidiary or Affiliate, may have to terminate Participant’s Service, for any reason, with or without Cause.
19.Consent to Electronic Delivery of All Plan Documents and Disclosures. By Participant’s acceptance of the Notice (whether in writing or electronically), Participant and the Company agree that the PRSUs are granted under and governed by the terms and conditions of the Plan, the Notice and this Agreement. Participant has reviewed the Plan, the Notice and this Agreement in their entirety, has had an opportunity to obtain the advice of counsel prior to executing this Notice and Agreement, and fully understands all provisions of the Plan, the Notice and this Agreement. Participant hereby agrees to accept as binding, conclusive and final all decisions or interpretations of the Committee upon any questions relating to the Plan, the Notice and this Agreement. Participant further agrees to notify the Company upon any change in Participant’s residence address.
By acceptance of the PRSUs, Participant agrees to participate in the Plan through an on-line or electronic system established and maintained by the Company or a third party designated by the Company and consents to the electronic delivery of the Notice, this Agreement, the Plan, account statements, Plan
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prospectuses required by the SEC, U.S. financial reports of the Company, and all other documents that the Company is required to deliver to its security holders (including, without limitation, annual reports and proxy statements) or other communications or information related to the PRSUs and current or future participation in the Plan. Electronic delivery may include the delivery of a link to the Company intranet or the internet site of a third party involved in administering the Plan, the delivery of the document via e-mail or such other delivery determined at the Company’s discretion. Participant acknowledges that Participant may receive from the Company a paper copy of any documents delivered electronically at no cost if Participant contacts the Company by telephone, through a postal service or electronic mail to Stock Administration. Participant further acknowledges that Participant will be provided with a paper copy of any documents delivered electronically if electronic delivery fails; similarly, Participant understands that Participant must provide on request to the Company or any designated third party a paper copy of any documents delivered electronically if electronic delivery fails. Also, Participant understands that Participant’s consent may be revoked or changed, including any change in the electronic mail address to which documents are delivered (if Participant has provided an electronic mail address), at any time by notifying the Company of such revised or revoked consent by telephone, postal service or electronic mail to Stock Administration.
20.Insider Trading Restrictions/Market Abuse Laws. Participant acknowledges that, depending on Participant’s country of residence, the broker’s country, or the country in which the Shares are listed, Participant may be subject to insider trading restrictions and/or market abuse laws in applicable jurisdictions, which may affect Participant’s ability to directly or indirectly, accept, acquire, sell or attempt to sell or otherwise dispose of Shares, or rights to Shares (e.g., PRSUs), or rights linked to the value of Shares, during such times as Participant is considered to have “inside information” regarding the Company (as defined by the laws or regulations in the applicable jurisdiction). Local insider trading laws and regulations may prohibit the cancellation or amendment of orders Participant placed before possessing the inside information. Furthermore, Participant may be prohibited from (i) disclosing the inside information to any third party, including fellow employees (other than on a “need to know” basis) and (ii) “tipping” third parties or causing them to otherwise buy or sell securities. Any restrictions under these laws or regulations are separate from and in addition to any restrictions that may be imposed under the Company’s Insider Trading Policy and 10b5-1 Trading Plan Policy. Participant acknowledges that it is Participant’s responsibility to comply with any applicable restrictions and understands that Participant should consult his or her personal legal advisor on such matters. In addition, Participant acknowledges that he or she read the Company’s Insider Trading Policy, and agrees to comply with such policy, as it may be amended from time to time, whenever Participant acquires or disposes of the Company’s securities.
21.Foreign Asset/Account, Exchange Control and Tax Reporting. Participant may be subject to foreign asset/account, exchange control and/or tax reporting requirements as a result of the acquisition, holding and/or transfer of Shares or cash resulting from his or her participation in the Plan. Participant may be required to report such accounts, assets, the balances therein, the value thereof and/or the transactions related thereto to the applicable authorities in Participant’s country and/or repatriate funds received in connection with the Plan within certain time limits or according to specified procedures. Participant acknowledges that he or she is responsible for ensuring compliance with any applicable foreign asset/account, exchange control and tax reporting requirements and should consult his or her personal legal and tax advisors on such matters.
22.Code Section 409A. For purposes of this Agreement, if Participant is subject to taxation in the U.S., a termination of employment will be determined consistent with the rules relating to a “separation from service” as defined in Section 409A of the Internal Revenue Code and the regulations thereunder
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(“Section 409A”). Notwithstanding anything else provided herein, to the extent any payments provided under this Agreement in connection with Participant’s termination of employment constitute deferred compensation subject to Section 409A, and Participant is deemed at the time of such termination of employment to be a “specified employee” under Section 409A, then such payment shall not be made or commence until the earlier of (i) the expiration of the six-month period measured from Participant’s separation from service from the Company or (ii) the date of Participant’s death following such a separation from service; provided, however, that such deferral shall only be effected to the extent required to avoid adverse tax treatment to Participant including, without limitation, the additional tax for which Participant would otherwise be liable under Section 409A(a)(1)(B) in the absence of such a deferral. To the extent any payment under this Agreement may be classified as a “short-term deferral” within the meaning of Section 409A, such payment shall be deemed a short-term deferral, even if it may also qualify for an exemption from Section 409A under another provision of Section 409A. Payments pursuant to this section are intended to constitute separate payments for purposes of Section 1.409A-2(b)(2) of the Treasury Regulations.
23.Award Subject to Company Clawback or Recoupment. The PRSUs shall be subject to clawback or recoupment pursuant to any compensation clawback or recoupment policy adopted by the Board or required by law during the term of Participant’s employment or other Service that is applicable to Participant. In addition to any other remedies available under such policy, applicable law may require the cancellation of Participant’s PRSUs (whether vested or unvested) and the recoupment of any gains realized with respect to Participant’s PRSUs.
BY ACCEPTING THIS AWARD OF PRSUS, PARTICIPANT AGREES TO ALL OF THE TERMS AND CONDITIONS DESCRIBED ABOVE, IN THE COUNTRY APPENDIX, IN THE NOTICE AND IN THE PLAN.
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APPENDIX B1
VOCERA COMMUNICATIONS, INC.
2021 EQUITY INCENTIVE PLAN
GLOBAL PERFORMANCE RESTRICTED STOCK UNIT AWARD AGREEMENT

COUNTRY SPECIFIC PROVISIONS FOR EMPLOYEES OUTSIDE THE U.S.

Any capitalized term used in this Country Appendix without definition will have the meaning ascribed to it in the Notice, the Agreement or the Plan, as applicable.

Terms and Conditions

This Country Appendix includes additional terms and conditions that govern the PRSUs granted to Participant under the Plan if Participant resides and/or works in one of the countries below. This Country Appendix forms part of the Agreement.

If Participant is a citizen or resident of a country other than the one in which Participant is currently residing and/or working, or Participant is considered as such for local law purposes, or Participant transfers Service and/or residency to another country after the Date of Grant, the Company will, in its sole discretion, determine to what extent the additional terms and conditions included herein will apply to Participant under these circumstances.

Notifications

This Country Appendix also includes information relating to exchange control, securities laws, foreign asset/account reporting and other issues of which Participant should be aware with respect to Participant’s participation in the Plan. The information is based on the securities, exchange control, foreign asset/account reporting and other laws in effect in the respective countries as of April 2021. Such laws are complex and change frequently. As a result, Participant should not rely on the information herein as the only source of information relating to the consequences of Participant’s participation in the Plan because the information may be out of date at the time that Participant vests in the PRSUs, sells Shares acquired under the Plan or takes any other action in connection with the Plan.

In addition, the information is general in nature and may not apply to Participant’s particular situation, and the Company is not in a position to assure Participant of any particular result. Accordingly, Participant should seek appropriate professional advice as to how the relevant laws in Participant’s country may apply to Participant’s situation.

Finally, if Participant is a citizen or resident of a country other than the one in which Participant is currently working and/or residing, or Participant is considered as such for local law purposes, or Participant transfers Service and/or residency to another country after the Date of Grant, the information contained herein may not apply to Participant in the same manner.



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EUROPEAN UNION (“EU”) / EUROPEAN ECONOMIC AREA (“EEA”) MEMBER STATES AND THE UNITED KINGDOM

Terms and Conditions

Data Privacy. The following provisions replace Section 9 of the Agreement:

(a)Data Collection and Usage. Participant is hereby notified of the collection, processing and use of certain personal information about Participant, including, but not limited to, Participant’s name, home address, telephone number, email address, date of birth, social insurance number, passport or other identification number, salary, nationality, job title, any Shares or directorships held in the Company, details of all awards granted under the Plan or any other entitlement to Shares awarded, canceled, exercised, vested, unvested or outstanding in Participant’s favor (“Data”), in connection with the implementation, administration and management of the Plan. The processing activity is pursuant to the Company’s legitimate business interest of providing the benefits under the Plan to Participant and generally administering employee equity awards granted under the Plan. Participant may opt out of such processing, although this would mean that the Company could not grant awards under the Plan to Participant. For questions about opting out, Participant should contact his or her local human resources representative.
(b)International Data Transfers. The Company is based in the U.S. The EU / EEA member states and the United Kingdom have different data privacy laws and protections than the U.S. The Company provides appropriate safeguards for protecting Data that it receives in the U.S. from its Subsidiaries and Affiliates in the EU / EEA member states and the United Kingdom. The Company’s legal basis for its transfer of Data is its adherence to the EU Standard Contractual Clauses in its data transfer agreements with its Subsidiaries and Affiliates in the EU / EEA member states and the United Kingdom.
(c)Stock Plan Administration Service Providers. The Company will transfer Data to E*TRADE Financial Services, Inc. and E*TRADE Securities LLC (“E*TRADE”), an independent service provider based in the U.S. which is assisting the Company with the implementation, administration and management of the Plan. The Company may select a different service provider or additional service providers and share Data with such other provider serving in a similar manner. Participant may be asked to agree on separate terms and data processing practices with the service provider, with such agreement being a condition to the ability to participate in the Plan. E*TRADE is based in the U.S.  The EU / EEA member states and the United Kingdom have different data privacy laws and protections than the U.S.  By signing below or, in case this information is presented electronically, by clicking the “Accept” or similar button implemented into the relevant webpage or platform, Participant agrees to the transfer of Data to E*TRADE for the exclusive purpose of administering Participant's participation in the Plan. The Company's legal basis for the transfer of Data to E*TRADE is Participant's consent.
(d)Voluntariness and Consequences of Denial or Withdrawal of Consent. Participation in the Plan is voluntary and Participant is providing the consent herein on a purely voluntary basis. If Participant does not consent, or if Participant later seeks to revoke the consent, Participant’s salary from or employment with the Employer will not be affected. The only consequence of refusing or withdrawing consent is that the Company would not be able to grant the PRSUs or other awards under the Plan or administer or maintain such awards.
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(e)Data Retention. The Company will hold and use Data only as long as is necessary to implement, administer and manage Participant’s participation in the Plan, or as required to comply with legal or regulatory obligations, including under tax and security laws.
(f)Data Subject Rights. To the extent provided by law, Participant has the right to (i) request access to or copies of Data the Company processes, (ii) rectify incorrect Data, (iii) delete Data, (iv) restrict the processing of Data, (v) restrict the portability of Data, (vi) lodge complaints with competent authorities in Participant’s country, and/or (vii) receive a list with the names and addresses of any potential recipients of Data. To receive clarification regarding these rights or to exercise these
IMAGE_05.JPG
rights, Participant can contact his or her local human resources representative.











AUSTRALIA

Terms and Conditions

Australian Offer Document. The Company is pleased to provide Participant with this offer to participate in the Plan. This offer sets out information regarding the grant of PRSUs to Australian resident Employees. This information is provided by the Company to ensure compliance of the Plan with Australian Securities and Investments Commission (“ASIC”) Class Order 14/1000 and relevant provisions of the Corporations Act 2001.
In addition to the information set out in the Agreement and this Country Appendix, Participant is also being provided with copies of the following documents:
(a)the Plan; and
(b)the Plan prospectus;
(c)Insider Trading Policy;
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(d)Data Privacy Addendum; and
(e)Employee Information Supplement
(collectively, the “Additional Documents”).
The Additional Documents provide further information to help Participant make an informed investment decision about participating in the Plan. Neither the Plan nor the Plan prospectus is a prospectus for the purposes of the Corporations Act 2001.
Participant should not rely upon any oral statements made in relation to this offer. Participant should rely only upon the statements contained in the Agreement (including this Country Appendix) and the Additional Documents when considering participation in the Plan.
Tax Information. The Plan is a plan to which Subdivision 83A-C of the Income Tax Assessment Act 1997 (Cth) applies (subject to conditions in the Act).
Securities Law Information. Investment in Shares involves a degree of risk. Eligible Employees who elect to participate in the Plan should monitor their participation and consider all risk factors relevant to the acquisition of Shares under the Plan as set forth below and in the Additional Documents.
The information herein is general information only. It is not advice or information that takes into account Participant’s objectives, financial situation and needs. Participant should consider obtaining his or her own financial product advice from a person who is licensed by ASIC to give such advice.
Additional Risk Factors for Australian Residents. Participant should have regard to risk factors relevant to investment in securities generally and, in particular, to holding Shares. For example, the price at which an individual Share is quoted on the New York Stock Exchange (“NYSE”) may increase or decrease due to a number of factors. There is no guarantee that the price of a Share will increase. Factors that may affect the price of an individual Share include fluctuations in the domestic and international market for listed stocks, general economic conditions, including interest rates, inflation rates, commodity and oil prices, changes to government fiscal, monetary or regulatory policies, legislation or regulation, the nature of the markets in which the Company operates and general operational and business risks.
More information about potential factors that could affect the Company’s business and financial results will be included in the Company’s most recent Annual Report on Form 10-K and the Company’s Quarterly Report on Form 10-Q. Copies of these reports are available at www.sec.gov, on the Company’s investor’s page at investors.vocera.com, and upon request to the Company.
In addition, Participant should be aware that the Australian dollar (“AUD”) value of any Shares acquired under the Plan will be affected by the USD/AUD exchange rate. Participation in the Plan involves certain risks related to fluctuations in this rate of exchange.
Common Stock in a U.S. Corporation. Common stock of a U.S. corporation is analogous to ordinary shares of an Australian corporation. Each holder of a Share is entitled to one vote. Dividends may be paid on the Shares out of any funds of the Company legally available for dividends at the discretion of the Board. Further, Shares are not liable to any further calls for payment of capital or for other assessment by the Company and have no sinking fund provisions, pre-emptive rights, conversion rights or redemption provisions.
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Ascertaining the Market Price of Shares. Participant may ascertain the current market price of an individual Share as traded on the NYSE under the symbol “VCRA” at www.nyse.com/quote/XNYS:VCRA. The AUD equivalent of that price can be obtained at www.rba.gov.au/statistics/frequency/exchange-rates.html. Please note that this is not a prediction of what the market price of the Shares will be on any applicable vesting date or when Shares are issued to Participant (or at any other time), or of the applicable exchange rate at such time.
CANADA

Terms and Conditions

Settlement. The following provision supplements Section 1 of the Agreement:
Notwithstanding the discretion contained in Section 9.2 of the Plan, the PRSUs will be settled in Shares only, not in cash or a combination of cash and Shares.
Termination. The following provisions replace Section 5(a) of the Agreement:

If Participant’s Service terminates for any reason, all unvested PRSUs will be forfeited to the Company forthwith, and all rights of Participant to such PRSUs will immediately terminate without payment of any consideration to Participant. Participant’s Service will be considered terminated (regardless of the reason for such termination and whether or not later found to be invalid or in breach of employment laws in the jurisdiction where Participant is providing services or the terms of Participant’s employment or service agreement, if any) as of the date that is the earlier of (i) the date Participant’s Service terminates, and (ii) the date Participant receives notice of termination. In either case, the date shall exclude any period during which notice, pay in lieu of notice or related payments or damages are provided or required to be provided under local law. For greater certainty, Participant will not be entitled to any pro-rated vesting for that portion of time before the date on which Participant’s right to vest terminates, nor will Participant be entitled to any compensation for lost vesting.

Notwithstanding the foregoing, if applicable employment standards legislation explicitly requires continued vesting during a statutory notice period, Participant acknowledges that his or her right to vest in the PRSUs, if any, will terminate effective as of the last day of Participant’s minimum statutory notice period, but Participant will not earn or be entitled to pro-rata vesting if such date falls after the end of Participant’s statutory notice period, nor will Participant be entitled to any compensation for lost vesting.

In case of any dispute as to whether and when a termination of Service has occurred, the Committee will have sole discretion to determine whether such termination of Service has occurred and the effective date of such termination.

The following provisions will apply if Participant is a resident of Quebec:

Language Consent. The parties acknowledge that it is their express wish that the Agreement, as well as all documents, notices and legal proceedings entered into, given or instituted pursuant hereto or relating directly or indirectly hereto, be drawn up in English.

Consentement Relatif à la Langue. Les parties reconnaissent avoir exigé la rédaction en anglais de cette convention, ainsi que de tous documents exécutés, avis donnés et procédures judiciaries intentées, directement ou indirectement, relativement à ou suite à la présente convention.

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Data Privacy. The following provisions supplement Section 9 of the Agreement:

Participant hereby authorizes the Company and the Company’s representatives to discuss with and obtain all relevant information from all personnel, professional or not, involved in the administration and operation of the Plan. Participant further authorizes the Company, any Parent, Subsidiary and Affiliate, and any stock plan service provider that may be selected by the Company to assist with the Plan to disclose and discuss the Plan with their respective advisors. Participant further authorizes the Company and any Parent, Subsidiary and Affiliate to record such information and to keep such information in Participant’s employee file.

Notifications

Securities Law Information. Participant is permitted to sell Shares acquired under the Plan through the designated broker appointed under the Plan, if any, provided the resale of Shares acquired under the Plan takes place outside Canada through facilities of a stock exchange on which the Shares are listed. The Shares are currently listed on the New York Stock Exchange under the ticker symbol “VCRA.”

Foreign Asset/Account Reporting Information. Foreign property, including Shares and other rights to receive Shares (e.g., PRSUs), of a non-Canadian company must generally be reported annually on a Form T1135 (Foreign Income Verification Statement), if the total cost of Participant’s foreign assets exceeds C$100,000 at any time during the year. The PRSUs must be reported, generally at nil cost, if the C$100,000 threshold is exceeded because of other foreign property held by Participant. When Shares are acquired, their cost generally is the adjusted cost base (“ACB”) of the Shares, ordinarily equal to the Fair Market Value of the Shares at the time of acquisition, but if Participant owns Shares of the Company, the ACB may have to be averaged with the ACB of the other Shares. Participant should consult with a personal advisor to ensure compliance with applicable reporting obligations.

INDIA

Notifications

Exchange Control Information. Indian residents are required to repatriate to India any proceeds from the sale of Shares acquired under the Plan and any cash dividends within such period of time as is required under applicable regulations. Participant should obtain a foreign inward remittance certificate (“FIRC”) from the bank where Participant deposits the foreign currency. Participant should maintain the FIRC as evidence of the repatriation of funds in the event the Reserve Bank of India or the Employer requests proof of repatriation.

Foreign Asset/Account Reporting Information. Indian residents are required to declare any foreign bank accounts and any foreign financial assets (including Shares held outside India) in their annual tax return. Participant should consult with personal tax advisor to determine his or her personal reporting obligations.

IRELAND

Notifications

Director Notification Obligation. Directors, shadow directors or secretaries of an Irish Subsidiary or Affiliate, whose interests in the Company represent more than 1% of the Company’s voting share capital, must notify the Irish Subsidiary or Affiliate, as applicable, in writing when (i) receiving or disposing of an
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interest in the Company (e.g., the PRSUs, Shares, etc.), (ii) becoming aware of the event giving rise to the notification requirement, or (iii) becoming a director or secretary if such an interest exists at the time. This notification requirement also applies with respect to the interests of a spouse or minor children of such individuals (whose interests will be attributed to the director, shadow director or secretary).

SINGAPORE

Notifications

Securities Law Information. The PRSUs are being granted pursuant to the “Qualifying Person” exemption under section 273(1)(f) of the Singapore Securities and Futures Act (Chapter 289, 2006 Ed.) (“SFA”). The Plan has not been lodged or registered as a prospectus with the Monetary Authority of Singapore. Participant should note that the PRSUs are subject to section 257 of the SFA, and that Participant will not be able to make any subsequent sale of Shares in Singapore or any offer of such subsequent sale of the Shares underlying the PRSUs in Singapore, unless such sale or offer is made (i) after six months from the Date of Grant, (ii) pursuant to the exemptions under Part XIII Division (1) Subdivision (4) (other than section 280) of the SFA, or (iii) pursuant to, and in accordance with, the conditions of any other applicable provisions of the SFA.

Director Notification Obligation. If Participant is a director, associate director or shadow director of a Singapore Subsidiary or Affiliate, Participant is subject to certain notification requirements under the Singapore Companies Act, regardless of whether Participant is a Singapore resident or employed in Singapore. Among these requirements is an obligation to notify the Singapore Subsidiary or Affiliate writing of an interest in the Company (e.g., PRSUs, Shares) or any related companies within two business days of (i) its acquisition or disposal, (ii) any change in a previously disclosed interest, or (iii) becoming a director, if Participant holds such an interest at the time.

UNITED ARAB EMIRATES

Notifications

Securities Law Information. The grant of PRSUs is available only for select employees of the Company or a Parent, Subsidiary or Affiliate, and is in the nature of providing equity incentives to employees in the United Arab Emirates. The Plan, the Notice and the Agreement and any other Plan materials (collectively, the “Plan Documents”) are intended for distribution only to such eligible employees and must not be delivered to, or relied on by any other person. Prospective purchasers of securities should conduct their own due diligence.

The Emirates Securities and Commodities Authority has no responsibility for reviewing or verifying any documents in connection with this statement, including the Plan Documents, or any other incidental communication materials distributed in connection with the PRSUs. Further, neither the Ministry of Economy nor the Dubai Department of Economic Development has approved this statement nor taken steps to verify the information set out in it, and has no responsibility for it. Residents of the United Arab Emirates who have any questions regarding the contents of the Plan, the Notice and the Agreement should obtain independent professional advice.

UNITED KINGDOM

Terms and Conditions

17


Settlement. The following provisions supplement Section 1 of the Agreement:
Notwithstanding the discretion contained in Section 9.2 of the Plan, the PRSUs will be settled in Shares only, not in cash or a combination of cash and Shares.
Taxes. The following provisions supplement Section 6 of the Agreement:

Without limitation to Section 6 of the Agreement, Participant agrees that Participant is liable for all Tax-Related Items and hereby covenants to pay all such Tax-Related Items as and when requested by the Company or, if different, the Employer or by Her Majesty’s Revenue and Customs (“HMRC”) (or any other tax authority or any other relevant authority). Participant also agrees to indemnify and keep indemnified the Company or the Employer against any Tax-Related Items that they are required to pay or withhold or have paid or will pay to HMRC (or any other tax authority or any other relevant authority) on Participant’s behalf.
Notwithstanding the foregoing, if Participant is a director or executive officer of the Company (within the meaning of Section 13(k) of the Exchange Act), the terms of the immediately foregoing provision will not apply. In such case, if any amount of income tax is not collected from or paid by Participant within 90 days of the end of the U.K. tax year in which an event giving rise to the indemnification described above occurs, the amount of any uncollected income tax may constitute a benefit to Participant on which additional income tax and National Insurance contributions (“NICs”) may be payable. Participant is responsible for reporting and paying any income tax due on this additional benefit directly to HMRC under the self-assessment regime and for paying the Company or the Employer (as applicable) for the value of any employee NICs due on this additional benefit, which the Company and/or the Employer may collect by any of the means referred to in Section 6 of the Agreement.

Joint Election. As a condition of participation in the Plan and the vesting of the PRSUs, Participant agrees to accept any liability for secondary Class 1 NICs that may be payable by the Company or the Employer (or any successor to the Company or the Employer) in connection with the PRSUs and any event giving rise to Tax-Related Items (the “Employer NICs”). Without prejudice to the foregoing, Participant agrees to execute a joint election with the Company and/or the Employer, the form of such Joint Election being formally approved by HMRC (the “Joint Election”), and any other consent or elections required by the Company or the Employer in respect of the Employer NICs liability. Participant further agrees to execute such other elections as may be required by any successor to the Company and/or the Employer for the purpose of continuing the effectiveness of the Joint Election. The Employer NICs may be collected by the Company and/or the Employer using any of the means referred to in Section 6 of the Agreement.

If Participant does not enter into the Joint Election, if approval of the Joint Election has been withdrawn by HMRC, if the Joint Election is revoked by the Company or the Employer (as applicable), or if the Joint Election is jointly revoked by Participant and the Company or the Employer (as applicable), the Company, in its sole discretion and without any liability to the Company or the Employer, may choose not to issue or deliver any Shares or proceeds from the sale of Shares to Participant upon settlement of the PRSUs.
18
EXHIBIT 10.04

VOCERA COMMUNICATIONS, INC.
2021 EQUITY INCENTIVE PLAN
GLOBAL NOTICE OF RESTRICTED STOCK UNIT AWARD

Unless otherwise defined herein, the terms defined in the Vocera Communications, Inc. (the “Company”) 2021 Equity Incentive Plan (the “Plan”) will have the same meanings in this Global Notice of Restricted Stock Unit Award and the electronic representation of this Global Notice of Restricted Stock Unit Award established and maintained by the Company or a third party designated by the Company (this “Notice”).
Name:    
Address:    
You (“Participant”) have been granted an award of Restricted Stock Units (“RSUs”) under the Plan subject to the terms and conditions of the Plan, this Notice and the attached Global Restricted Stock Unit Award Agreement (the “Agreement”), including any applicable country-specific provisions in the appendix attached hereto (the “Appendix”), which constitutes part of the Agreement.
Grant Number:            
Number of RSUs:    
Date of Grant:    
Vesting Commencement Date:    
Expiration Date:    The earlier to occur of: (a) the date on which settlement of all RSUs granted hereunder occurs and (b) the tenth anniversary of the Date of Grant. This RSU expires earlier if Participant’s Service terminates earlier, as described in the Agreement.
Vesting Schedule:     Subject to the limitations set forth in this Notice, the Plan and the Agreement, the RSUs will vest in accordance with the following schedule: [Vocera to insert applicable vesting schedule, which may be time and/or performance-based]
By accepting (whether in writing, electronically or otherwise) the RSUs, Participant acknowledges and agrees to the following:
1)Participant understands that Participant’s Service with the Company or a Parent or Subsidiary or Affiliate is for an unspecified duration, can be terminated at any time (i.e., is “at-will”), except where otherwise prohibited by applicable law, and that nothing in this Notice, the Agreement or the Plan changes the nature of that relationship. Participant acknowledges that the vesting of the RSUs pursuant to this Notice is subject to Participant’s continuing Service as an Employee, Director or Consultant. To the extent permitted by applicable law, Participant agrees and acknowledges that the Vesting Schedule may change prospectively in the event that Participant’s service status changes between full- and part-time and/or in the event Participant is on a leave of absence, in accordance with Company policies relating to work schedules and vesting of Awards or as determined by the Committee.
2)This grant is made under and governed by the Plan, the Agreement and this Notice, and this Notice is subject to the terms and conditions of the Agreement and the Plan, both of which are incorporated herein by reference. Participant has read the Notice, the Agreement and the Plan.
3)Participant has read the Company’s Insider Trading Policy, and agrees to comply with such policy, as it may be amended from time to time, whenever Participant acquires or disposes of the Company’s securities.
4)By accepting the RSUs, Participant consents to electronic delivery and participation as set forth in the Agreement.


VOCERA COMMUNICATIONS, INC.
2021 EQUITY INCENTIVE PLAN
GLOBAL RESTRICTED STOCK UNIT AWARD AGREEMENT

Unless otherwise defined in this Global Restricted Stock Unit Award Agreement (this “Agreement”), any capitalized terms used herein will have the same meaning ascribed to them in the Vocera Communications, Inc. 2021 Equity Incentive Plan (the “Plan”).
Participant has been granted Restricted Stock Units (“RSUs”) subject to the terms, restrictions and conditions of the Plan, the Global Notice of Restricted Stock Unit Award (the “Notice”) and this Agreement, including any applicable country-specific provisions in the appendix attached hereto (the “Appendix”), which constitutes part of this Agreement. In the event of a conflict between the terms and conditions of the Plan and the terms and conditions of the Notice or this Agreement, the terms and conditions of the Plan shall prevail.
1.Settlement. Settlement of RSUs will be made within 30 days following the applicable date of vesting under the Vesting Schedule set forth in the Notice. Settlement of RSUs will be in Shares. No fractional RSUs or rights for fractional Shares shall be created pursuant to this Agreement.
2.No Stockholder Rights. Unless and until such time as Shares are issued in settlement of vested RSUs, Participant will have no ownership of the Shares allocated to the RSUs and will have no rights to dividends or to vote such Shares.
3.No Dividend Equivalents. Dividends, if any (whether in cash or Shares), will not be credited to Participant.
4.Non-Transferability of RSUs. The RSUs and any interest therein will not be sold, assigned, transferred, pledged, hypothecated, or otherwise disposed of in any manner other than by will or by the laws of descent or distribution or court order or unless otherwise permitted by the Committee on a case-by-case basis.
5.Termination and Change in Status.
(a)If Participant’s Service terminates for any reason, all unvested RSUs will be forfeited to the Company forthwith, and all rights of Participant to such RSUs will immediately terminate without payment of any consideration to Participant. Participant’s Service will be considered terminated (regardless of the reason for such termination and whether or not later found to be invalid or in breach of employment laws in the jurisdiction where Participant is providing Services or the terms of Participant’s employment or service agreement, if any) as of the date Participant is no longer actively providing Services and Participant’s Service will not be extended by any notice period (e.g., Participant’s Service would not include a period of “garden leave” or similar period mandated under employment laws in the jurisdiction where Participant is providing Services or the terms of Participant’s employment or service agreement, if any). In case of any dispute as to whether and when a termination of Service has occurred, the Committee will have sole discretion to determine whether such termination of Service has occurred and the effective date of such termination (including whether Participant may still be considered to be actively providing Services while on a leave of absence).
(b)Participant acknowledges and agrees that the Vesting Schedule may change prospectively in the event Participant’s service status changes between full- and part-time and/or in the event Participant is on



a leave of absence, in accordance with Company policies relating to work schedules and vesting of awards or as determined by the Committee.
6.Taxes.
(a)Responsibility for Taxes. Participant acknowledges that, regardless of any action taken by the Company or a Parent, Subsidiary or Affiliate employing or retaining Participant (the “Employer”), the ultimate liability for all income tax, social insurance, payroll tax, fringe benefits tax, payment on account or other tax-related items related to Participant’s participation in the Plan and legally applicable or deemed applicable to Participant (“Tax-Related Items”) is and remains Participant’s responsibility and may exceed the amount actually withheld by the Company or the Employer, if any. Participant further acknowledges that the Company and/or the Employer (i) make no representations or undertakings regarding the treatment of any Tax-Related Items in connection with any aspect of the RSUs, including, but not limited to, the grant, vesting or settlement of the RSUs and the subsequent sale of Shares acquired pursuant to such settlement and the receipt of any dividends, and (ii) do not commit to and are under no obligation to structure the terms of the grant or any aspect of the RSUs to reduce or eliminate Participant’s liability for Tax-Related Items or achieve any particular tax result. Further, if Participant is subject to Tax-Related Items in more than one jurisdiction, Participant acknowledges that the Company and/or the Employer (or former employer, as applicable) may be required to withhold or account for Tax-Related Items in more than one jurisdiction. PARTICIPANT SHOULD CONSULT A TAX ADVISER APPROPRIATELY QUALIFIED IN EACH OF THE JURISDICTIONS, INCLUDING COUNTRY OR COUNTRIES IN WHICH PARTICIPANT RESIDES OR IS SUBJECT TO TAXATION.
(b)Withholding. Prior to any relevant taxable or tax withholding event, as applicable, to the extent permitted by applicable law, Participant agrees to make arrangements satisfactory to the Company and/or the Employer to satisfy all Tax-Related Items. In this regard, Participant authorizes the Company and/or the Employer, or their respective agents, at their discretion, to satisfy any withholding obligations or rights for Tax-Related Items by one or a combination of the following:
(i)withholding from Participant’s wages or other cash compensation payable to Participant by the Company and/or the Employer or any other Parent, Subsidiary or Affiliate;
(ii)withholding from proceeds of the sale of Shares acquired upon settlement of the RSUs either through a voluntary sale or through a mandatory sale arranged by the Company (on Participant’s behalf pursuant to this authorization and without further consent);
(iii)withholding Shares to be issued upon settlement of the RSUs, provided the Company only withholds the number of Shares necessary to satisfy no more than the maximum statutory withholding amounts;
(iv)Participant’s payment of a cash amount (including by check representing readily available funds or a wire transfer); or
(v)any other arrangement approved by the Committee and permitted under applicable law;



all under such rules as may be established by the Committee and in compliance with the Company’s Insider Trading Policy and 10b5-1 Trading Plan Policy, if applicable; provided however, that if Participant is a Section 16 officer of the Company under the Exchange Act, then the Committee (as constituted in accordance with Rule 16b-3 under the Exchange Act) shall establish the method of withholding from alternatives (i) – (v) above, and the Committee shall establish such method prior to the tax withholding event.
The Company may withhold or account for Tax-Related Items by considering applicable statutory or other withholding rates, including minimum or maximum rates applicable in Participant’s jurisdiction(s). In the event of over-withholding, Participant may receive a refund of any over-withheld amount in cash (with no entitlement to the equivalent amount in Shares), or if not refunded, Participant may be able to seek a refund from the local tax authorities. In the event of under-withholding, Participant may be required to pay any additional Tax-Related Items directly to the applicable tax authority. If the obligation for Tax-Related Items is satisfied by withholding in Shares, for tax purposes, Participant will be deemed to have been issued the full number of Shares subject to the vested RSUs, notwithstanding that a number of the Shares are held back solely for the purpose of satisfying the withholding obligation for Tax-Related Items.
The Company may refuse to issue or deliver the Shares or the proceeds of the sale of Shares, if Participant fails to comply with Participant’s obligations in connection with the Tax-Related Items.
7.Nature of Grant. By accepting the RSUs, Participant acknowledges, understands and agrees that:
(a)the Plan is established voluntarily by the Company, it is discretionary in nature and it may be modified, amended, suspended or terminated by the Company at any time, to the extent permitted by the Plan;
(b)the grant of the RSUs is exceptional, voluntary and occasional and does not create any contractual or other right to receive future grants of RSUs, or benefits in lieu of RSUs, even if RSUs have been granted in the past;
(c)all decisions with respect to future RSUs or other grants, if any, will be at the sole discretion of the Company;
(d)Participant is voluntarily participating in the Plan;
(e)the RSUs and Participant’s participation in the Plan will not create a right to employment or be interpreted as forming or amending an employment or service contract with the Company, the Employer or any other Parent, Subsidiary or Affiliate and shall not interfere with the ability of the Company, the Employer or any other Parent, Subsidiary or Affiliate, as applicable, to terminate Participant’s Service (if any);
(f)the RSUs and the Shares subject to the RSUs, and the income from and value of same, are not intended to replace any pension rights or compensation;
(g)the RSUs and the Shares subject to the RSUs, and the income from and value of same, are not part of normal or expected compensation for purposes of, including, but not limited to, calculating any severance, resignation, termination, redundancy, dismissal, end-of-service payments, bonuses, long-service awards, pension or retirement or welfare benefits or similar payments;



(h)unless otherwise agreed with the Company, the RSUs and the Shares subject to the RSUs, and the income from and value of same, are not granted as consideration for, or in connection with, the service Participant may provide as a director of a Parent, Subsidiary or Affiliate;
(i)the future value of the underlying Shares is unknown, indeterminable and cannot be predicted with certainty;
(j)no claim or entitlement to compensation or damages will arise from forfeiture of the RSUs resulting from Participant’s termination of Service (regardless of the reason for such termination and whether or not later found to be invalid or in breach of employment laws in the jurisdiction where Participant is employed or the terms of Participant’s employment agreement, if any); and
(k)neither the Company, the Employer nor any Parent, Subsidiary or Affiliate will be liable for any foreign exchange rate fluctuation between Participant’s local currency and the United States Dollar that may affect the value of the RSUs or of any amounts due to Participant pursuant to the settlement of the RSUs or the subsequent sale of any Shares acquired upon settlement.
8.No Advice Regarding Grant. The Company is not providing any tax, legal or financial advice, nor is the Company making any recommendations regarding Participant’s participation in the Plan, or Participant’s acquisition or sale of the underlying Shares. Participant acknowledges, understands and agrees he or she should consult with his or her own personal tax, legal and financial advisors regarding his or her participation in the Plan before taking any action related to the Plan.
9.Data Privacy. Participant hereby explicitly and unambiguously consents to the collection, use and transfer, in electronic or other form, of Participant’s personal data as described in this Agreement and any other RSU grant materials by and among, as applicable, the Employer, the Company and any other Parent, Subsidiary or Affiliate for the purpose of implementing, administering and managing the Plan.
Participant understands that the Company and the Employer may hold certain personal information about Participant, including, but not limited to, Participant’s name, home address, email address and telephone number, date of birth, passport, social insurance number or other identification number (e.g., resident registration number), salary, nationality, job title, any shares of stock or directorships held in the Company, details of all awards or any other entitlement to shares of stock awarded, canceled, exercised, vested, unvested or outstanding in Participant’s favor (“Data”), for the purpose of implementing, administering and managing the Plan.

Participant understands that Data may be transferred to E*TRADE Financial Corporate Services, Inc., its affiliates or successors, or such other stock plan service provider or other third party as may be selected by the Company in the future, to assist the Company with the implementation, administration and management of the Plan, presently or in the future. Participant understands that the recipients of Data may be located in the United States or elsewhere, and that the recipients’ country (e.g., the United States) may have different data privacy laws and protections than Participant’s country. Participant understands that, if he or she resides outside the United States, he or she may request a list with the names and addresses of any potential recipients of Data by contacting Participant’s local human resources representative. Participant authorizes the Company and any other possible recipients which may assist the Company (presently or in the future) with implementing, administering and managing the Plan to receive, possess, use, retain and transfer Data, in electronic or other form, for the purpose of implementing, administering and managing the Plan. Participant



understands that Data will be held only as long as is necessary to implement, administer and manage Participant’s participation in the Plan. Participant understands that, if he or she resides outside the United States, he or she may, at any time, view Data, request information about the storage and processing of Data, require any necessary amendments to Data or refuse or withdraw the consents herein, in any case without cost, by contacting in writing Participant’s local human resources representative. Further, Participant understands that Participant is providing the consents herein on a purely voluntary basis. If Participant does not consent, or if Participant later seeks to revoke Participant’s consent, Participant’s employment status or service with the Employer will not be affected; the only consequence of refusing or withdrawing Participant’s consent is that the Company may not be able to grant RSUs to Participant or administer or maintain such RSUs. Therefore, Participant understands that refusing or withdrawing Participant’s consent may affect Participant’s ability to participate in the Plan. For more information on the consequences of Participant’s refusal to consent or withdrawal of consent, Participant understands that he or she may contact Participant’s local human resources representative.
10.Language. Participant acknowledges that he or she is sufficiently proficient in English, or has consulted with an advisor who is proficient in the English language, so as to enable Participant to understand the terms and conditions of this Agreement and the Plan. Furthermore, if Participant has received this Agreement or any other document related to the RSU and/or the Plan translated into a language other than English and if the meaning of the translated version is different than the English version, the English version will control.
11.Appendix. Notwithstanding any provisions in this Agreement, the RSUs will be subject to any additional or different terms and conditions set forth in the Appendix for Participant’s country. Moreover, if Participant relocates to one of the countries included in the Appendix, the terms and conditions for such country will apply to Participant, to the extent the Company determines that the application of such terms and conditions is necessary or advisable for legal or administrative reasons. The Appendix constitutes part of this Agreement.
12.Imposition of Other Requirements. The Company reserves the right to impose other requirements on Participant’s participation in the Plan, on the RSUs and on any Shares acquired under the Plan, to the extent the Company determines it is necessary or advisable for legal or administrative reasons, and to require Participant to sign any additional agreements or undertakings that may be necessary to accomplish the foregoing.
13.Acknowledgement. The Company and Participant agree that the RSUs are granted under and governed by the Notice, this Agreement and the provisions of the Plan (incorporated herein by reference). Participant: (a) acknowledges receipt of a copy of the Plan and the Plan prospectus, (b) represents that Participant has carefully read and is familiar with their provisions, and (c) hereby accepts the RSUs subject to all of the terms and conditions set forth herein and those set forth in the Plan and the Notice.
14.Entire Agreement; Enforcement of Rights. This Agreement, the Plan and the Notice constitute the entire agreement and understanding of the parties relating to the subject matter herein and supersede all prior discussions between them. Any prior agreements, commitments or negotiations concerning the purchase of the Shares hereunder are superseded. No adverse modification of or adverse amendment to this Agreement, nor any waiver of any rights under this Agreement, will be effective unless in writing and signed by the parties to this Agreement (which writing and signing may be electronic). The failure by either party to enforce any rights under this Agreement will not be construed as a waiver of any rights of such party.



15.Compliance with Laws and Regulations. The issuance of Shares will be subject to and conditioned upon compliance by the Company and Participant with all applicable state, federal and foreign laws and regulations and with all applicable requirements of any stock exchange or automated quotation system on which the Company’s Shares may be listed or quoted at the time of such issuance or transfer. Participant understands that the Company is under no obligation to register or qualify the Shares with any state, federal or foreign securities commission or to seek approval or clearance from any governmental authority for the issuance or sale of the Shares. Further, Participant agrees that the Company shall have unilateral authority to amend the Plan and this Agreement without Participant’s consent to the extent necessary to comply with securities or other laws applicable to issuance of Shares. Finally, the Shares issued pursuant to this Agreement shall be endorsed with appropriate legends, if any, determined by the Company.
16.Severability. If one or more provisions of this Agreement are held to be unenforceable under applicable law, then such provision will be enforced to the maximum extent possible given the intent of the parties hereto. If such clause or provision cannot be so enforced, then (a) such provision will be excluded from this Agreement, (b) the balance of this Agreement will be interpreted as if such provision were so excluded and (c) the balance of this Agreement will be enforceable in accordance with its terms.
17.Governing Law and Venue. This Agreement and all acts and transactions pursuant hereto and the rights and obligations of the parties hereto will be governed, construed and interpreted in accordance with the laws of the State of Delaware, without giving effect to such state’s conflict of laws rules. Any and all disputes relating to, concerning or arising from this Agreement, or relating to, concerning or arising from the relationship between the parties evidenced by the Plan or this Agreement, will be brought and heard exclusively in the United States District Court for the Northern District of California or the Superior Court of California, County of Santa Clara. Each of the parties hereby represents and agrees that such party is subject to the personal jurisdiction of said courts; hereby irrevocably consents to the jurisdiction of such courts in any legal or equitable proceedings related to, concerning or arising from such dispute, and waives, to the fullest extent permitted by law, any objection which such party may now or hereafter have that the laying of the venue of any legal or equitable proceedings related to, concerning or arising from such dispute which is brought in such courts is improper or that such proceedings have been brought in an inconvenient forum.
18.No Rights as Employee, Director or Consultant. Nothing in this Agreement will affect in any manner whatsoever any right or power of the Company, or a Parent, Subsidiary or Affiliate, may have to terminate Participant’s Service, for any reason, with or without Cause.
19.Consent to Electronic Delivery of All Plan Documents and Disclosures. By Participant’s acceptance of the Notice (whether in writing or electronically), Participant and the Company agree that the RSUs are granted under and governed by the terms and conditions of the Plan, the Notice and this Agreement. Participant has reviewed the Plan, the Notice and this Agreement in their entirety, has had an opportunity to obtain the advice of counsel prior to executing this Notice and Agreement, and fully understands all provisions of the Plan, the Notice and this Agreement. Participant hereby agrees to accept as binding, conclusive and final all decisions or interpretations of the Committee upon any questions relating to the Plan, the Notice and this Agreement. Participant further agrees to notify the Company upon any change in Participant’s residence address.
By acceptance of the RSUs, Participant agrees to participate in the Plan through an on-line or electronic system established and maintained by the Company or a third party designated by the Company and consents to the electronic delivery of the Notice, this Agreement, the Plan, account statements, Plan



prospectuses required by the SEC, U.S. financial reports of the Company, and all other documents that the Company is required to deliver to its security holders (including, without limitation, annual reports and proxy statements) or other communications or information related to the RSUs and current or future participation in the Plan. Electronic delivery may include the delivery of a link to the Company intranet or the internet site of a third party involved in administering the Plan, the delivery of the document via e-mail or such other delivery determined at the Company’s discretion. Participant acknowledges that Participant may receive from the Company a paper copy of any documents delivered electronically at no cost if Participant contacts the Company by telephone, through a postal service or electronic mail to Stock Administration. Participant further acknowledges that Participant will be provided with a paper copy of any documents delivered electronically if electronic delivery fails; similarly, Participant understands that Participant must provide on request to the Company or any designated third party a paper copy of any documents delivered electronically if electronic delivery fails. Also, Participant understands that Participant’s consent may be revoked or changed, including any change in the electronic mail address to which documents are delivered (if Participant has provided an electronic mail address), at any time by notifying the Company of such revised or revoked consent by telephone, postal service or electronic mail to Stock Administration.
20.Insider Trading Restrictions/Market Abuse Laws. Participant acknowledges that, depending on Participant’s country of residence, the broker’s country, or the country in which the Shares are listed, Participant may be subject to insider trading restrictions and/or market abuse laws in applicable jurisdictions, which may affect Participant’s ability to directly or indirectly, accept, acquire, sell or attempt to sell or otherwise dispose of Shares, or rights to Shares (e.g., RSUs), or rights linked to the value of Shares, during such times as Participant is considered to have “inside information” regarding the Company (as defined by the laws or regulations in the applicable jurisdiction). Local insider trading laws and regulations may prohibit the cancellation or amendment of orders Participant placed before possessing the inside information. Furthermore, Participant may be prohibited from (i) disclosing the inside information to any third party, including fellow employees (other than on a “need to know” basis) and (ii) “tipping” third parties or causing them to otherwise buy or sell securities. Any restrictions under these laws or regulations are separate from and in addition to any restrictions that may be imposed under the Company’s Insider Trading Policy and 10b5-1 Trading Plan Policy. Participant acknowledges that it is Participant’s responsibility to comply with any applicable restrictions and understands that Participant should consult his or her personal legal advisor on such matters. In addition, Participant acknowledges that he or she read the Company’s Insider Trading Policy, and agrees to comply with such policy, as it may be amended from time to time, whenever Participant acquires or disposes of the Company’s securities.
21.Foreign Asset/Account, Exchange Control and Tax Reporting. Participant may be subject to foreign asset/account, exchange control and/or tax reporting requirements as a result of the acquisition, holding and/or transfer of Shares or cash resulting from his or her participation in the Plan. Participant may be required to report such accounts, assets, the balances therein, the value thereof and/or the transactions related thereto to the applicable authorities in Participant’s country and/or repatriate funds received in connection with the Plan within certain time limits or according to specified procedures. Participant acknowledges that he or she is responsible for ensuring compliance with any applicable foreign asset/account, exchange control and tax reporting requirements and should consult his or her personal legal and tax advisors on such matters.
22.Code Section 409A. For purposes of this Agreement, if Participant is subject to taxation in the U.S., a termination of employment will be determined consistent with the rules relating to a “separation from service” as defined in Section 409A of the Internal Revenue Code and the regulations thereunder



(“Section 409A”). Notwithstanding anything else provided herein, to the extent any payments provided under this Agreement in connection with Participant’s termination of employment constitute deferred compensation subject to Section 409A, and Participant is deemed at the time of such termination of employment to be a “specified employee” under Section 409A, then such payment shall not be made or commence until the earlier of (i) the expiration of the six-month period measured from Participant’s separation from service from the Company or (ii) the date of Participant’s death following such a separation from service; provided, however, that such deferral shall only be effected to the extent required to avoid adverse tax treatment to Participant including, without limitation, the additional tax for which Participant would otherwise be liable under Section 409A(a)(1)(B) in the absence of such a deferral. To the extent any payment under this Agreement may be classified as a “short-term deferral” within the meaning of Section 409A, such payment shall be deemed a short-term deferral, even if it may also qualify for an exemption from Section 409A under another provision of Section 409A. Payments pursuant to this section are intended to constitute separate payments for purposes of Section 1.409A-2(b)(2) of the Treasury Regulations.
23.Award Subject to Company Clawback or Recoupment. The RSUs shall be subject to clawback or recoupment pursuant to any compensation clawback or recoupment policy adopted by the Board or required by law during the term of Participant’s employment or other Service that is applicable to Participant. In addition to any other remedies available under such policy, applicable law may require the cancellation of Participant’s RSUs (whether vested or unvested) and the recoupment of any gains realized with respect to Participant’s RSUs.
BY ACCEPTING THIS AWARD OF RSUS, PARTICIPANT AGREES TO ALL OF THE TERMS AND CONDITIONS DESCRIBED ABOVE, IN THE APPENDIX, IN THE NOTICE AND IN THE PLAN.


APPENDIX
VOCERA COMMUNICATIONS, INC.
2021 EQUITY INCENTIVE PLAN
GLOBAL RESTRICTED STOCK UNIT AWARD AGREEMENT

COUNTRY SPECIFIC PROVISIONS FOR EMPLOYEES OUTSIDE THE U.S.

Any capitalized term used in this Appendix without definition will have the meaning ascribed to it in the Notice, the Agreement or the Plan, as applicable.

Terms and Conditions

This Appendix includes additional terms and conditions that govern the RSUs granted to Participant under the Plan if Participant resides and/or works in one of the countries below. This Appendix forms part of the Agreement.

If Participant is a citizen or resident of a country other than the one in which Participant is currently residing and/or working, or Participant is considered as such for local law purposes, or Participant transfers Service and/or residency to another country after the Date of Grant, the Company will, in its sole discretion, determine to what extent the additional terms and conditions included herein will apply to Participant under these circumstances.

Notifications

This Appendix also includes information relating to exchange control, securities laws, foreign asset/account reporting and other issues of which Participant should be aware with respect to Participant’s participation in the Plan. The information is based on the securities, exchange control, foreign asset/account reporting and other laws in effect in the respective countries as of April 2021. Such laws are complex and change frequently. As a result, Participant should not rely on the information herein as the only source of information relating to the consequences of Participant’s participation in the Plan because the information may be out of date at the time that Participant vests in the RSUs, sells Shares acquired under the Plan or takes any other action in connection with the Plan.

In addition, the information is general in nature and may not apply to Participant’s particular situation, and the Company is not in a position to assure Participant of any particular result. Accordingly, Participant should seek appropriate professional advice as to how the relevant laws in Participant’s country may apply to Participant’s situation.

Finally, if Participant is a citizen or resident of a country other than the one in which Participant is currently working and/or residing, or Participant is considered as such for local law purposes, or Participant transfers Service and/or residency to another country after the Date of Grant, the information contained herein may not apply to Participant in the same manner.





EUROPEAN UNION (“EU”) / EUROPEAN ECONOMIC AREA (“EEA”) MEMBER STATES AND THE UNITED KINGDOM

Terms and Conditions

Data Privacy. The following provisions replace Section 9 of the Agreement:

(a)Data Collection and Usage. Participant is hereby notified of the collection, processing and use of certain personal information about Participant, including, but not limited to, Participant’s name, home address, telephone number, email address, date of birth, social insurance number, passport or other identification number, salary, nationality, job title, any Shares or directorships held in the Company, details of all awards granted under the Plan or any other entitlement to Shares awarded, canceled, exercised, vested, unvested or outstanding in Participant’s favor (“Data”), in connection with the implementation, administration and management of the Plan. The processing activity is pursuant to the Company’s legitimate business interest of providing the benefits under the Plan to Participant and generally administering employee equity awards granted under the Plan. Participant may opt out of such processing, although this would mean that the Company could not grant awards under the Plan to Participant. For questions about opting out, Participant should contact his or her local human resources representative.
(b)International Data Transfers. The Company is based in the U.S. The EU / EEA member states and the United Kingdom have different data privacy laws and protections than the U.S. The Company provides appropriate safeguards for protecting Data that it receives in the U.S. from its Subsidiaries and Affiliates in the EU / EEA member states and the United Kingdom. The Company’s legal basis for its transfer of Data is its adherence to the EU Standard Contractual Clauses in its data transfer agreements with its Subsidiaries and Affiliates in the EU / EEA member states and the United Kingdom.
(c)Stock Plan Administration Service Providers. The Company will transfer Data to E*TRADE Financial Services, Inc. and E*TRADE Securities LLC (“E*TRADE”), an independent service provider based in the U.S. which is assisting the Company with the implementation, administration and management of the Plan. The Company may select a different service provider or additional service providers and share Data with such other provider serving in a similar manner. Participant may be asked to agree on separate terms and data processing practices with the service provider, with such agreement being a condition to the ability to participate in the Plan. E*TRADE is based in the U.S.  The EU / EEA member states and the United Kingdom have different data privacy laws and protections than the U.S.  By signing below or, in case this information is presented electronically, by clicking the “Accept” or similar button implemented into the relevant webpage or platform, Participant agrees to the transfer of Data to E*TRADE for the exclusive purpose of administering Participant's participation in the Plan. The Company's legal basis for the transfer of Data to E*TRADE is Participant's consent.
(d)Voluntariness and Consequences of Denial or Withdrawal of Consent. Participation in the Plan is voluntary and Participant is providing the consent herein on a purely voluntary basis. If Participant does not consent, or if Participant later seeks to revoke the consent, Participant’s salary from or employment with the Employer will not be affected. The only consequence of refusing or withdrawing consent is that the Company would not be able to grant the RSUs or other awards under the Plan or administer or maintain such awards.



(e)Data Retention. The Company will hold and use Data only as long as is necessary to implement, administer and manage Participant’s participation in the Plan, or as required to comply with legal or regulatory obligations, including under tax and security laws.
(f)Data Subject Rights. To the extent provided by law, Participant has the right to (i) request access to or copies of Data the Company processes, (ii) rectify incorrect Data, (iii) delete Data, (iv) restrict the processing of Data, (v) restrict the portability of Data, (vi) lodge complaints with competent authorities in Participant’s country, and/or (vii) receive a list with the names and addresses of any potential recipients of Data. To receive clarification regarding these rights or to exercise these IMAGE_04.JPG rights, Participant can contact his or her local human resources representative.












AUSTRALIA

Terms and Conditions

Australian Offer Document. The Company is pleased to provide Participant with this offer to participate in the Plan. This offer sets out information regarding the grant of RSUs to Australian resident Employees. This information is provided by the Company to ensure compliance of the Plan with Australian Securities and Investments Commission (“ASIC”) Class Order 14/1000 and relevant provisions of the Corporations Act 2001.
In addition to the information set out in the Agreement and this Appendix, Participant is also being provided with copies of the following documents:
(a)the Plan; and
(b)the Plan prospectus;
(c)Insider Trading Policy;



(d)Data Privacy Addendum; and
(e)Employee Information Supplement
(collectively, the “Additional Documents”).
The Additional Documents provide further information to help Participant make an informed investment decision about participating in the Plan. Neither the Plan nor the Plan prospectus is a prospectus for the purposes of the Corporations Act 2001.
Participant should not rely upon any oral statements made in relation to this offer. Participant should rely only upon the statements contained in the Agreement (including this Appendix) and the Additional Documents when considering participation in the Plan.
Tax Information. The Plan is a plan to which Subdivision 83A-C of the Income Tax Assessment Act 1997 (Cth) applies (subject to conditions in the Act).
Securities Law Information. Investment in Shares involves a degree of risk. Eligible Employees who elect to participate in the Plan should monitor their participation and consider all risk factors relevant to the acquisition of Shares under the Plan as set forth below and in the Additional Documents.
The information herein is general information only. It is not advice or information that takes into account Participant’s objectives, financial situation and needs. Participant should consider obtaining his or her own financial product advice from a person who is licensed by ASIC to give such advice.
Additional Risk Factors for Australian Residents. Participant should have regard to risk factors relevant to investment in securities generally and, in particular, to holding Shares. For example, the price at which an individual Share is quoted on the New York Stock Exchange (“NYSE”) may increase or decrease due to a number of factors. There is no guarantee that the price of a Share will increase. Factors that may affect the price of an individual Share include fluctuations in the domestic and international market for listed stocks, general economic conditions, including interest rates, inflation rates, commodity and oil prices, changes to government fiscal, monetary or regulatory policies, legislation or regulation, the nature of the markets in which the Company operates and general operational and business risks.
More information about potential factors that could affect the Company’s business and financial results will be included in the Company’s most recent Annual Report on Form 10-K and the Company’s Quarterly Report on Form 10-Q. Copies of these reports are available at www.sec.gov, on the Company’s investor’s page at investors.vocera.com, and upon request to the Company.
In addition, Participant should be aware that the Australian dollar (“AUD”) value of any Shares acquired under the Plan will be affected by the USD/AUD exchange rate. Participation in the Plan involves certain risks related to fluctuations in this rate of exchange.
Common Stock in a U.S. Corporation. Common stock of a U.S. corporation is analogous to ordinary shares of an Australian corporation. Each holder of a Share is entitled to one vote. Dividends may be paid on the Shares out of any funds of the Company legally available for dividends at the discretion of the Board. Further, Shares are not liable to any further calls for payment of capital or for other assessment by the Company and have no sinking fund provisions, pre-emptive rights, conversion rights or redemption provisions.
Ascertaining the Market Price of Shares. Participant may ascertain the current market price of an individual Share as traded on the NYSE under the symbol “VCRA” at www.nyse.com/quote/



XNYS:VCRA. The AUD equivalent of that price can be obtained at www.rba.gov.au/statistics/frequency/exchange-rates.html. Please note that this is not a prediction of what the market price of the Shares will be on any applicable vesting date or when Shares are issued to Participant (or at any other time), or of the applicable exchange rate at such time.
CANADA

Terms and Conditions

Settlement. The following provision supplements Section 1 of the Agreement:
Notwithstanding the discretion contained in Section 9.2 of the Plan, the RSUs will be settled in Shares only, not in cash or a combination of cash and Shares.
Termination. The following provisions replace Section 5(a) of the Agreement:

If Participant’s Service terminates for any reason, all unvested RSUs will be forfeited to the Company forthwith, and all rights of Participant to such RSUs will immediately terminate without payment of any consideration to Participant. Participant’s Service will be considered terminated (regardless of the reason for such termination and whether or not later found to be invalid or in breach of employment laws in the jurisdiction where Participant is providing services or the terms of Participant’s employment or service agreement, if any) as of the date that is the earlier of (i) the date Participant’s Service terminates, and (ii) the date Participant receives notice of termination. In either case, the date shall exclude any period during which notice, pay in lieu of notice or related payments or damages are provided or required to be provided under local law. For greater certainty, Participant will not be entitled to any pro-rated vesting for that portion of time before the date on which Participant’s right to vest terminates, nor will Participant be entitled to any compensation for lost vesting.

Notwithstanding the foregoing, if applicable employment standards legislation explicitly requires continued vesting during a statutory notice period, Participant acknowledges that his or her right to vest in the RSUs, if any, will terminate effective as of the last day of Participant’s minimum statutory notice period, but Participant will not earn or be entitled to pro-rata vesting if such date falls after the end of Participant’s statutory notice period, nor will Participant be entitled to any compensation for lost vesting.

In case of any dispute as to whether and when a termination of Service has occurred, the Committee will have sole discretion to determine whether such termination of Service has occurred and the effective date of such termination.

The following provisions will apply if Participant is a resident of Quebec:

Language Consent. The parties acknowledge that it is their express wish that the Agreement, as well as all documents, notices and legal proceedings entered into, given or instituted pursuant hereto or relating directly or indirectly hereto, be drawn up in English.

Consentement Relatif à la Langue. Les parties reconnaissent avoir exigé la rédaction en anglais de cette convention, ainsi que de tous documents exécutés, avis donnés et procédures judiciaries intentées, directement ou indirectement, relativement à ou suite à la présente convention.

Data Privacy. The following provisions supplement Section 9 of the Agreement:




Participant hereby authorizes the Company and the Company’s representatives to discuss with and obtain all relevant information from all personnel, professional or not, involved in the administration and operation of the Plan. Participant further authorizes the Company, any Parent, Subsidiary and Affiliate, and any stock plan service provider that may be selected by the Company to assist with the Plan to disclose and discuss the Plan with their respective advisors. Participant further authorizes the Company and any Parent, Subsidiary and Affiliate to record such information and to keep such information in Participant’s employee file.

Notifications

Securities Law Information. Participant is permitted to sell Shares acquired under the Plan through the designated broker appointed under the Plan, if any, provided the resale of Shares acquired under the Plan takes place outside Canada through facilities of a stock exchange on which the Shares are listed. The Shares are currently listed on the New York Stock Exchange under the ticker symbol “VCRA.”

Foreign Asset/Account Reporting Information. Foreign property, including Shares and other rights to receive Shares (e.g., RSUs), of a non-Canadian company must generally be reported annually on a Form T1135 (Foreign Income Verification Statement), if the total cost of Participant’s foreign assets exceeds C$100,000 at any time during the year. The RSUs must be reported, generally at nil cost, if the C$100,000 threshold is exceeded because of other foreign property held by Participant. When Shares are acquired, their cost generally is the adjusted cost base (“ACB”) of the Shares, ordinarily equal to the Fair Market Value of the Shares at the time of acquisition, but if Participant owns Shares of the Company, the ACB may have to be averaged with the ACB of the other Shares. Participant should consult with a personal advisor to ensure compliance with applicable reporting obligations.

INDIA

Notifications

Exchange Control Information. Indian residents are required to repatriate to India any proceeds from the sale of Shares acquired under the Plan and any cash dividends within such period of time as is required under applicable regulations. Participant should obtain a foreign inward remittance certificate (“FIRC”) from the bank where Participant deposits the foreign currency. Participant should maintain the FIRC as evidence of the repatriation of funds in the event the Reserve Bank of India or the Employer requests proof of repatriation.

Foreign Asset/Account Reporting Information. Indian residents are required to declare any foreign bank accounts and any foreign financial assets (including Shares held outside India) in their annual tax return. Participant should consult with personal tax advisor to determine his or her personal reporting obligations.

IRELAND

Notifications

Director Notification Obligation. Directors, shadow directors or secretaries of an Irish Subsidiary or Affiliate, whose interests in the Company represent more than 1% of the Company’s voting share capital, must notify the Irish Subsidiary or Affiliate, as applicable, in writing when (i) receiving or disposing of an interest in the Company (e.g., the RSUs, Shares, etc.), (ii) becoming aware of the event giving rise to the notification requirement, or (iii) becoming a director or secretary if such an interest exists at the time.



This notification requirement also applies with respect to the interests of a spouse or minor children of such individuals (whose interests will be attributed to the director, shadow director or secretary).

SINGAPORE

Notifications

Securities Law Information. The RSUs are being granted pursuant to the “Qualifying Person” exemption under section 273(1)(f) of the Singapore Securities and Futures Act (Chapter 289, 2006 Ed.) (“SFA”). The Plan has not been lodged or registered as a prospectus with the Monetary Authority of Singapore. Participant should note that the RSUs are subject to section 257 of the SFA, and that Participant will not be able to make any subsequent sale of Shares in Singapore or any offer of such subsequent sale of the Shares underlying the RSUs in Singapore, unless such sale or offer is made (i) after six months from the Date of Grant, (ii) pursuant to the exemptions under Part XIII Division (1) Subdivision (4) (other than section 280) of the SFA, or (iii) pursuant to, and in accordance with, the conditions of any other applicable provisions of the SFA.

Director Notification Obligation. If Participant is a director, associate director or shadow director of a Singapore Subsidiary or Affiliate, Participant is subject to certain notification requirements under the Singapore Companies Act, regardless of whether Participant is a Singapore resident or employed in Singapore. Among these requirements is an obligation to notify the Singapore Subsidiary or Affiliate writing of an interest in the Company (e.g., RSUs, Shares) or any related companies within two business days of (i) its acquisition or disposal, (ii) any change in a previously disclosed interest, or (iii) becoming a director, if Participant holds such an interest at the time.

UNITED ARAB EMIRATES

Notifications

Securities Law Information. The grant of RSUs is available only for select employees of the Company or a Parent, Subsidiary or Affiliate, and is in the nature of providing equity incentives to employees in the United Arab Emirates. The Plan, the Notice and the Agreement and any other Plan materials (collectively, the “Plan Documents”) are intended for distribution only to such eligible employees and must not be delivered to, or relied on by any other person. Prospective purchasers of securities should conduct their own due diligence.

The Emirates Securities and Commodities Authority has no responsibility for reviewing or verifying any documents in connection with this statement, including the Plan Documents, or any other incidental communication materials distributed in connection with the RSUs. Further, neither the Ministry of Economy nor the Dubai Department of Economic Development has approved this statement nor taken steps to verify the information set out in it, and has no responsibility for it. Residents of the United Arab Emirates who have any questions regarding the contents of the Plan, the Notice and the Agreement should obtain independent professional advice.

UNITED KINGDOM

Terms and Conditions

Settlement. The following provisions supplement Section 1 of the Agreement:



Notwithstanding the discretion contained in Section 9.2 of the Plan, the RSUs will be settled in Shares only, not in cash or a combination of cash and Shares.
Taxes. The following provisions supplement Section 6 of the Agreement:

Without limitation to Section 6 of the Agreement, Participant agrees that Participant is liable for all Tax-Related Items and hereby covenants to pay all such Tax-Related Items as and when requested by the Company or, if different, the Employer or by Her Majesty’s Revenue and Customs (“HMRC”) (or any other tax authority or any other relevant authority). Participant also agrees to indemnify and keep indemnified the Company or the Employer against any Tax-Related Items that they are required to pay or withhold or have paid or will pay to HMRC (or any other tax authority or any other relevant authority) on Participant’s behalf.
Notwithstanding the foregoing, if Participant is a director or executive officer of the Company (within the meaning of Section 13(k) of the Exchange Act), the terms of the immediately foregoing provision will not apply. In such case, if any amount of income tax is not collected from or paid by Participant within 90 days of the end of the U.K. tax year in which an event giving rise to the indemnification described above occurs, the amount of any uncollected income tax may constitute a benefit to Participant on which additional income tax and National Insurance contributions (“NICs”) may be payable. Participant is responsible for reporting and paying any income tax due on this additional benefit directly to HMRC under the self-assessment regime and for paying the Company or the Employer (as applicable) for the value of any employee NICs due on this additional benefit, which the Company and/or the Employer may collect by any of the means referred to in Section 6 of the Agreement.

Joint Election. As a condition of participation in the Plan and the vesting of the RSUs, Participant agrees to accept any liability for secondary Class 1 NICs that may be payable by the Company or the Employer (or any successor to the Company or the Employer) in connection with the RSUs and any event giving rise to Tax-Related Items (the “Employer NICs”). Without prejudice to the foregoing, Participant agrees to execute a joint election with the Company and/or the Employer, the form of such Joint Election being formally approved by HMRC (the “Joint Election”), and any other consent or elections required by the Company or the Employer in respect of the Employer NICs liability. Participant further agrees to execute such other elections as may be required by any successor to the Company and/or the Employer for the purpose of continuing the effectiveness of the Joint Election. The Employer NICs may be collected by the Company and/or the Employer using any of the means referred to in Section 6 of the Agreement.

If Participant does not enter into the Joint Election, if approval of the Joint Election has been withdrawn by HMRC, if the Joint Election is revoked by the Company or the Employer (as applicable), or if the Joint Election is jointly revoked by Participant and the Company or the Employer (as applicable), the Company, in its sole discretion and without any liability to the Company or the Employer, may choose not to issue or deliver any Shares or proceeds from the sale of Shares to Participant upon settlement of the RSUs.

EXHIBIT 10.05
VOCERA COMMUNICATIONS, INC.
2021 EQUITY INCENTIVE PLAN
GLOBAL NOTICE OF STOCK OPTION GRANT
Unless otherwise defined herein, the terms defined in the Vocera Communications, Inc. (the “Company”) 2021 Equity Incentive Plan (the “Plan”) will have the same meanings in this Global Notice of Stock Option Grant and the electronic representation of this Global Notice of Stock Option Grant established and maintained by the Company or a third party designated by the Company (this “Notice”).
Name:    
Address:    
You (“Participant”) have been granted an option to purchase shares of common stock of the Company (the “Option”) under the Plan subject to the terms and conditions of the Plan, this Notice and the attached Global Stock Option Award Agreement (the “Option Agreement”), including any applicable country-specific provisions in the appendix attached hereto (the “Appendix”), which constitutes part of the Option Agreement.
Grant Number:    
Date of Grant:    
Vesting Commencement Date:    
Exercise Price per Share:    
Total Number of Shares:    
Type of Option:             Non-Qualified Stock Option

         Incentive Stock Option
Expiration Date:    ________ __, 20__; This Option expires earlier if Participant’s Service terminates earlier, as described in the Option Agreement.
Vesting Schedule:    Subject to the limitations set forth in this Notice, the Plan and the Option Agreement, the Option will vest in accordance with the following schedule: [Vocera to insert applicable vesting schedule, which may be time and/or performance based]
By accepting (whether in writing, electronically or otherwise) the Option, Participant acknowledges and agrees to the following:
1)Participant understands that Participant’s Service with the Company or a Parent or Subsidiary or Affiliate is for an unspecified duration, can be terminated at any time (i.e., is “at-will”), except where otherwise prohibited by applicable law, and that nothing in this Notice, the Option Agreement or the Plan changes the nature of that relationship. Participant acknowledges that the vesting of the Option pursuant to this Notice is subject to Participant’s continuing Service as an Employee, Director or Consultant. To the extent permitted by applicable law, Participant agrees and acknowledges that the Vesting Schedule may change prospectively in the event that Participant’s service status changes between full- and part-time and/or in the event Participant is on a leave of absence, in accordance with Company policies relating to work schedules and vesting of Awards or as determined by the Committee to the extent permitted by applicable law. Furthermore, the period during which Participant may exercise the Option after termination of Service, if any, will commence on the Termination Date (as defined in the Option Agreement).
2)This grant is made under and governed by the Plan, the Option Agreement and this Notice, and this Notice is subject to the terms and conditions of the Option Agreement and the Plan, both of which are incorporated herein by reference. Participant has read the Notice, the Option Agreement and the Plan.
3)Participant has read the Company’s Insider Trading Policy, and agrees to comply with such policy, as it may be amended from time to time, whenever Participant acquires or disposes of the Company’s securities.
4)By accepting the Option, Participant consents to electronic delivery and participation as set forth in the Option Agreement.
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VOCERA COMMUNICATIONS, INC.
2021 EQUITY INCENTIVE PLAN
GLOBAL STOCK OPTION AWARD AGREEMENT
Unless otherwise defined in this Global Stock Option Award Agreement (this “Option Agreement”), any capitalized terms used herein will have the meaning ascribed to them in the Vocera Communications, Inc. 2021 Equity Incentive Plan (the “Plan”).
Participant has been granted an option to purchase Shares (the “Option”) of Vocera Communications, Inc. (the “Company”), subject to the terms, restrictions and conditions of the Plan, the Global Notice of Stock Option Grant (the “Notice”) and this Option Agreement, including any applicable country-specific provisions in the appendix attached hereto (the “Appendix”), which constitutes part of this Option Agreement.
1.Vesting Rights. Subject to the applicable provisions of the Plan and this Option Agreement, this Option may be exercised, in whole or in part, in accordance with the Vesting Schedule set forth in the Notice. Participant acknowledges that the vesting of the Option pursuant to the Notice and this Option Agreement is subject to Participant’s continuing Service as an Employee, Director or Consultant.
2.Grant of Option. Participant has been granted an Option for the number of Shares set forth in the Notice at the exercise price per Share in U.S. Dollars set forth in the Notice (the “Exercise Price”). In the event of a conflict between the terms and conditions of the Plan and the terms and conditions of this Option Agreement, the terms and conditions of the Plan shall prevail. If designated in the Notice as an Incentive Stock Option (“ISO”), this Option is intended to qualify as an Incentive Stock Option under Section 422 of the Code. However, if this Option is intended to be an ISO, to the extent that it exceeds the U.S. $100,000 rule of Code Section 422(d) it shall be treated as a Nonqualified Stock Option (“NSO”).
3.Termination Period.
(a)General Rule. If Participant’s Service terminates for any reason except death or Disability, and other than for Cause, then this Option will expire at the close of business at Company headquarters on the date three (3) months after Participant’s Termination Date (as defined below) (or such shorter time period not less than thirty (30) days or longer time period as may be determined by the Committee, with any exercise beyond three (3) months after the date Participant’s Service terminates deemed to be the exercise of an NSO), but in no event after the Expiration Date set forth in the Notice. If Participant does not exercise this Option within the termination period set forth in the Notice or the termination periods set forth in this Section 3, the Option shall terminate in its entirety.
(b)Death; Disability. If Participant dies before Participant’s Service terminates (or Participant dies within three (3) months of Participant’s termination of Service other than for Cause), then this Option will expire at the close of business at Company headquarters on the date twelve (12) months after the date of death (or such shorter time period not less than six (6) months or longer time period as may be determined by the Committee), subject to any shorter period set forth in the Appendix for any applicable jurisdiction, and in no event after the Expiration Date set forth in the Notice. If Participant’s Service terminates because of Participant’s Disability, then this Option will expire at the close of business at Company headquarters on the date twelve (12) months after Participant’s Termination Date (or such shorter time period not less than six (6) months or longer time period as may be determined by the Committee), subject to any shorter period set forth in the Appendix for any applicable jurisdiction and in no event after the Expiration Date set forth in the Notice. Any exercise of this Option beyond twelve (12) months after the date Participant ceases to be an employee when the termination is for Participant’s Disability will be deemed to be the exercise of an NSO.
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(c)Cause. Unless otherwise determined by the Committee, the Option (whether or not vested) will terminate immediately upon the Participant’s cessation of Service if the Company reasonably determines in good faith that such cessation of Service has resulted in connection with an act or failure to act constituting Cause (or the Participant’s Service could have been terminated for Cause (without regard to the lapsing of any required notice or cure periods in connection therewith) at the time the Participant’s Service terminated).
(d)No Notification of Exercise Periods. Participant is responsible for keeping track of these exercise periods following Participant’s termination of Service for any reason. The Company will not provide further notice of such periods. In no event shall this Option be exercised later than the Expiration Date set forth in the Notice.
(e)Termination. For purposes of this Option, Participant’s Service will be considered terminated (regardless of the reason for such termination and whether or not later found to be invalid or in breach of employment laws in the jurisdiction where Participant is providing Services or the terms of Participant’s employment or service agreement, if any) as of the date Participant is no longer actively providing Services to the Company or a Parent, Subsidiary or Affiliate (i.e., Participant’s period of Service would not include any contractual notice period or any period of “garden leave” or similar period mandated under employment laws in the jurisdiction where Participant is providing Service or the terms of Participant’s employment or service agreement, if any) (the “Termination Date”). Unless otherwise provided in this Option Agreement or determined by the Company, Participant’s right to vest in the Option under the Plan, if any, will terminate as of the Termination Date and Participant’s right to exercise the Option after termination of Service, if any, will be measured from the Termination Date. In case of any dispute as to whether and when a termination of Service has occurred, the Committee will have sole discretion to determine whether such termination of Service has occurred and the effective date of such termination (including whether Participant may still be considered to be actively providing Services while on a leave of absence).
4.Exercise of Option.
(a)Right to Exercise. This Option is exercisable during its term in accordance with the Vesting Schedule set forth in the Notice and the applicable provisions of the Plan and this Option Agreement. In the event of Participant’s death, Disability, termination for Cause or other cessation of Service, the exercisability of the Option is governed by the applicable provisions of the Plan, the Notice and this Option Agreement. This Option may not be exercised for a fraction of a Share.
(b)Method of Exercise. This Option is exercisable by delivery of an exercise notice in a form specified by the Company (the “Exercise Notice”), which will state the election to exercise the Option, the number of Shares in respect of which the Option is being exercised (the “Exercised Shares”), and such other representations and agreements as may be required by the Company pursuant to the provisions of the Plan. The Exercise Notice will be delivered in person, by mail, via electronic mail or facsimile or by other authorized method to the Secretary of the Company or other person designated by the Company. The Exercise Notice will be accompanied by payment of the aggregate Exercise Price as to all Exercised Shares together with any applicable Tax-Related Items (as defined in Section 8 below). This Option will be deemed to be exercised upon receipt by the Company of such fully executed Exercise Notice accompanied by such aggregate Exercise Price and payment of any applicable Tax-Related Items (as defined below). No Shares will be issued pursuant to the exercise of this Option unless such issuance and exercise complies with all relevant provisions of law ,the requirements of any stock exchange or quotation service upon which the Shares are then listed, and any exchange control registrations. Assuming such compliance, for United States income tax purposes the Exercised Shares will be considered transferred to Participant on the date the Option is exercised with respect to such Exercised Shares.
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(c)Exercise by Another. If another person wants to exercise this Option after it has been transferred to him or her in compliance with this Option Agreement, that person must prove to the Company’s satisfaction that he or she is entitled to exercise this Option. That person must also complete the proper Exercise Notice form (as described above) and pay the Exercise Price (as described below) and any applicable Tax-Related Items (as described below).
5.Method of Payment. Payment of the aggregate Exercise Price will be by any of the following, or a combination thereof, at the election of Participant:
(a)Participant’s personal check (representing readily available funds), wire transfer, or a cashier’s check;
(b)if permitted by the Committee, certificates for shares of Company stock that Participant owns, along with any forms needed to effect a transfer of those shares to the Company; the value of the shares, determined as of the effective date of the Option exercise, will be applied to the Exercise Price. Instead of surrendering shares of Company stock, Participant may attest to the ownership of those shares on a form provided by the Company and have the same number of shares subtracted from the Exercised Shares issued to Participant. However, Participant may not surrender, or attest to the ownership of, shares of Company stock in payment of the Exercise Price of Participant’s Option if Participant’s action would cause the Company to recognize compensation expense (or additional compensation expense) with respect to this Option for financial reporting purposes;
(c)cashless exercise through irrevocable directions to a securities broker approved by the Company to sell all or part of the Shares covered by this Option and to deliver to the Company from the sale proceeds an amount sufficient to pay the Exercise Price. The balance of the sale proceeds, if any, will be delivered to Participant unless otherwise provided in this Option Agreement. The directions must be given by signing a special notice of exercise form provided by the Company; or
(d)any other method authorized by the Company;
provided, however, that the Company may restrict the available methods of payment due to facilitate compliance with applicable law or administration of the Plan. In particular, if Participant is located outside the United States, Participant should review the applicable provisions of the Appendix for any such restrictions that may currently apply.
6.Non-Transferability of Option. This Option may not be sold, assigned, transferred, pledged, hypothecated, or otherwise disposed of other than by will or by the laws of descent or distribution or court order and may be exercised during the lifetime of Participant only by Participant or unless otherwise permitted by the Committee on a case-by-case basis. The terms of the Plan and this Option Agreement will be binding upon the executors, administrators, heirs, successors and assigns of Participant.
7.Term of Option. This Option will in any event expire on the Expiration Date set forth in the Notice, which date is 10 years after the Date of Grant (five years after the Date of Grant if this Option is designated as an ISO in the Notice and Section 5.3 of the Plan applies).
8.Taxes.
(a)Responsibility for Taxes. Participant acknowledges that, regardless of any action taken by the Company or a Parent, Subsidiary or Affiliate employing or retaining Participant (the “Employer”), the ultimate liability for all income tax, social insurance, payroll tax, fringe benefits tax, payment on account or other tax related items related to Participant’s participation in the Plan and legally applicable or deemed applicable to Participant (“Tax-Related Items”) is and remains Participant’s
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responsibility and may exceed the amount actually withheld by the Company or the Employer, if any. Participant further acknowledges that the Company and/or the Employer (i) make no representations or undertakings regarding the treatment of any Tax-Related Items in connection with any aspect of this Option, including, but not limited to, the grant, vesting or exercise of this Option, the subsequent sale of Shares acquired pursuant to such exercise and the receipt of any dividends; and (ii) do not commit to and are under no obligation to structure the terms of the grant or any aspect of this Option to reduce or eliminate Participant’s liability for Tax-Related Items or achieve any particular tax result. Further, if Participant is subject to Tax-Related Items in more than one jurisdiction, Participant acknowledges that the Company and/or the Employer (or former employer, as applicable) may be required to withhold or account for Tax-Related Items in more than one jurisdiction. PARTICIPANT SHOULD CONSULT A TAX ADVISER APPROPRIATELY QUALIFIED IN EACH OF THE JURISDICTIONS, INCLUDING COUNTRY OR COUNTRIES IN WHICH PARTICIPANT RESIDES OR IS SUBJECT TO TAXATION BEFORE EXERCISING THE OPTION OR DISPOSING OF THE SHARES.
(b)Withholding. Prior to any relevant taxable or tax withholding event, as applicable, to the extent permitted by applicable law Participant agrees to make arrangements satisfactory to the Company and/or the Employer to satisfy all Tax-Related Items. In this regard, Participant authorizes the Company and/or the Employer, or their respective agents, at their discretion, to satisfy any withholding obligations or rights for Tax-Related Items by one or a combination of the following:
(i)withholding from Participant’s wages or other cash compensation payable to Participant by the Company, the Employer or any other Parent, Subsidiary or Affiliate;
(ii)withholding from proceeds of the sale of Shares acquired at exercise of this Option either through a voluntary sale or through a mandatory sale arranged by the Company (on Participant’s behalf pursuant to this authorization and without further consent);
(iii)withholding Shares to be issued upon exercise of the Option, provided the Company only withholds the number of Shares necessary to satisfy no more than the maximum statutory withholding amounts;
(iv)Participant’s payment of a cash amount (including by check representing readily available funds or a wire transfer); or
(v)any other arrangement approved by the Committee and permitted under applicable law;
all under such rules as may be established by the Committee and in compliance with the Company’s Insider Trading Policy and 10b5-1 Trading Plan Policy, if applicable; provided however, that if Participant is a Section 16 officer of the Company under the Exchange Act, then the Committee (as constituted in accordance with Rule 16b-3 under the Exchange Act) shall establish the method of withholding from alternatives (i)-(v) above, and the Committee shall establish the method prior to the tax withholding event.
The Company may withhold or account for Tax-Related Items by considering applicable statutory or other withholding rates, including minimum or maximum rates applicable in Participant’s jurisdiction(s). In the event of over-withholding, Participant may receive a refund of any over-withheld amount in cash (with no entitlement to the equivalent amount in Shares), or if not refunded, Participant may be able to seek a refund from the local tax authorities. In the event of under-withholding, Participant may be required to pay any additional Tax-Related Items directly to the applicable tax authority. If the obligation for Tax-Related Items is satisfied by withholding in Shares, for tax purposes, Participant will
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be deemed to have been issued the full number of Exercised Shares, notwithstanding that a number of the Shares are held back solely for the purpose of satisfying the withholding obligation for Tax-Related Items.
The Company may refuse to issue or deliver the Shares or the proceeds of the sale of Shares, if Participant fails to comply with Participant’s obligations in connection with the Tax-Related Items.
(c)Notice of Disqualifying Disposition of ISO Shares. If Participant is subject to Tax-Related Items in the United States and sells or otherwise disposes of any of the Shares acquired pursuant to an ISO on or before the later of (i) two years after the grant date, or (ii) one year after the exercise date, Participant will immediately notify the Company in writing of such disposition. Participant agrees that he or she may be subject to income tax withholding by the Company on the compensation income recognized from such early disposition of ISO Shares by payment in cash or out any wages or other cash compensation paid to Participant by the Company and/or the Employer or any Parent, Subsidiary or Affiliate.
9.Nature of Grant. By accepting the Option, Participant acknowledges, understands and agrees that:
(a)the Plan is established voluntarily by the Company, it is discretionary in nature and it may be modified, amended, suspended or terminated by the Company at any time, to the extent permitted by the Plan;
(b)the grant of the Option is exceptional, voluntary and occasional and does not create any contractual or other right to receive future grants of options, or benefits in lieu of options, even if options have been granted in the past;
(c)all decisions with respect to future options or other grants, if any, will be at the sole discretion of the Company;
(d)Participant is voluntarily participating in the Plan;
(e)the Option and Participant’s participation in the Plan will not create a right to employment or be interpreted as forming or amending an employment or service contract with the Company, the Employer or any other Parent, Subsidiary or Affiliate, and shall not interfere with the ability of the Company, the Employer or any other Parent, Subsidiary or Affiliate, as applicable, to terminate Participant’s Service (if any);
(f)the Option and the Shares subject to the Option, and the income from and value of same, are not intended to replace any pension rights or compensation;
(g)the Option and the Shares subject to the Option, and the income from and value of same, are not part of normal or expected compensation for purposes including, but not limited to, calculating any severance, resignation, termination, redundancy, dismissal, end-of-service payments, bonuses, long-service awards, pension or retirement or welfare benefits or similar payments;
(h)unless otherwise agreed with the Company, the Option and the Shares subject to the Option, and the income from and value of same, are not granted as consideration for, or in connection with, the service Participant may provide as a director of a Parent, Subsidiary or Affiliate;
(i)the future value of the Shares underlying the Option is unknown, indeterminable and cannot be predicted with certainty; if the underlying Shares do not increase in value, the Option will
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have no value; if Participant exercises the Option and acquires Shares, the value of such Shares may increase or decrease, even below the Exercise Price;
(j)no claim or entitlement to compensation or damages will arise from forfeiture of the Option resulting from Participant’s termination of Service (regardless of the reason for such termination and whether or not later found to be invalid or in breach of employment laws in the jurisdiction where Participant is employed or the terms of Participant’s employment agreement, if any); and
(k)neither the Company, the Employer nor any Parent, Subsidiary or Affiliate will be liable for any foreign exchange rate fluctuation between Participant’s local currency and the United States Dollar that may affect the value of the Option or of any amounts due to Participant pursuant to the exercise of the Option or the subsequent sale of any Shares acquired upon exercise.
10.No Advice Regarding Grant. The Company is not providing any tax, legal or financial advice, nor is the Company making any recommendations regarding Participant’s participation in the Plan, or Participant’s acquisition or sale of the underlying Shares. Participant acknowledges, understands and agrees that he or she should consult with his or her own personal tax, legal and financial advisors regarding his or her participation in the Plan before taking any action related to the Plan.
11.Data Privacy. Participant hereby explicitly and unambiguously consents to the collection, use and transfer, in electronic or other form, of Participant’s personal data as described in this Option Agreement and any other grant materials by and among, as applicable, the Employer, the Company and any other Parent, Subsidiary or Affiliate for the purpose of implementing, administering and managing the Plan.
Participant understands that the Company and the Employer may hold certain personal information about Participant, including, but not limited to, Participant’s name, home address, email address and telephone number, date of birth, passport, social insurance number or other identification number (e.g., resident registration number), salary, nationality, job title, any shares of stock or directorships held in the Company, details of all awards or any other entitlement to shares of stock awarded, canceled, exercised, vested, unvested or outstanding in Participant’s favor (“Data”), for the purpose of implementing, administering and managing the Plan.

Participant understands that Data may be transferred to E*TRADE Financial Corporate Services, Inc., its affiliates or successors, or such other stock plan service provider or other third party as may be selected by the Company in the future, to assist the Company with the implementation, administration and management of the Plan, presently or in the future. Participant understands that the recipients of Data may be located in the United States or elsewhere, and that the recipients’ country (e.g., the United States) may have different data privacy laws and protections than Participant’s country. Participant understands that, if he or she resides outside the United States, he or she may request a list with the names and addresses of any potential recipients of Data by contacting Participant’s local human resources representative. Participant authorizes the Company and any other possible recipients which may assist the Company (presently or in the future) with implementing, administering and managing the Plan to receive, possess, use, retain and transfer Data, in electronic or other form, for the purpose of implementing, administering and managing the Plan. Participant understands that Data will be held only as long as is necessary to implement, administer and manage Participant’s participation in the Plan. Participant understands that, if he or she resides outside the United States, he or she may, at any time, view Data, request information about the storage and processing of Data, require any necessary amendments to Data or refuse or withdraw the consents herein, in any case without cost, by contacting in writing Participant’s local human resources representative. Further, Participant understands that Participant is providing the consents herein on a purely voluntary basis. If Participant does not consent, or if Participant later seeks to revoke
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Participant’s consent, Participant’s employment status or service with the Employer will not be affected; the only consequence of refusing or withdrawing Participant’s consent is that the Company may not be able to grant the Option to Participant or administer or maintain such Option. Therefore, Participant understands that refusing or withdrawing Participant’s consent may affect Participant’s ability to participate in the Plan. For more information on the consequences of Participant’s refusal to consent or withdrawal of consent, Participant understands that he or she may contact Participant’s local human resources representative.
12.Language. Participant acknowledges that he or she is sufficiently proficient in English, or has consulted with an advisor who is proficient in the English language, so as to enable Participant to understand the terms and conditions of this Option Agreement and the Plan. Furthermore, if Participant has received this Option Agreement, or any other document related to the Option and/or the Plan translated into a language other than English and if the meaning of the translated version is different than the English version, the English version will control.
13.Appendix. Notwithstanding any provisions in this Option Agreement, the Option will be subject to any additional or different terms and conditions set forth in the Appendix for Participant’s country. Moreover, if Participant relocates to one of the countries included in the Appendix, the terms and conditions for such country will apply to Participant, to the extent the Company determines that the application of such terms and conditions is necessary or advisable for legal or administrative reasons. The Appendix constitutes part of this Option Agreement.
14.Imposition of Other Requirements. The Company reserves the right to impose other requirements on Participant’s participation in the Plan, on the Option and on any Shares purchased upon exercise of the Option, to the extent the Company determines it is necessary or advisable for legal or administrative reasons, and to require Participant to sign any additional agreements or undertakings that may be necessary to accomplish the foregoing.
15.Acknowledgement. The Company and Participant agree that the Option is granted under and governed by the Notice, this Option Agreement and the provisions of the Plan (incorporated herein by reference). Participant (a) acknowledges receipt of a copy of the Plan and the Plan prospectus, (b) represents that Participant has carefully read and is familiar with their provisions, and (c) hereby accepts the Option subject to all of the terms and conditions set forth herein and those set forth in the Plan and the Notice.
16.Entire Agreement; Enforcement of Rights. This Option Agreement, the Plan and the Notice constitute the entire agreement and understanding of the parties relating to the subject matter herein and supersede all prior discussions between them. Any prior agreements, commitments or negotiations concerning the purchase of the Shares hereunder are superseded. No adverse modification of, or adverse amendment to, this Option Agreement, nor any waiver of any rights under this Option Agreement, will be effective unless in writing and signed by the parties to this Option Agreement (which writing and signing may be electronic). The failure by either party to enforce any rights under this Option Agreement will not be construed as a waiver of any rights of such party.
17.Compliance with Laws and Regulations. The issuance of Shares will be subject to and conditioned upon compliance by the Company and Participant with all applicable state, federal and foreign laws and regulations and with all applicable requirements of any stock exchange or automated quotation system on which the Company’s Shares may be listed or quoted at the time of such issuance or transfer. Participant understands that the Company is under no obligation to register or qualify the Shares with any state, federal or foreign securities commission or to seek approval or clearance from any governmental authority for the issuance or sale of the Shares. Further, Participant agrees that the Company shall have unilateral authority to amend the Plan and this Option Agreement without Participant’s consent to the extent necessary to comply with securities or other laws applicable to issuance
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of Shares. Finally, the Shares issued pursuant to this Option Agreement shall be endorsed with appropriate legends, if any, determined by the Company.
18.Severability. If one or more provisions of this Option Agreement are held to be unenforceable under applicable law, then such provision will be enforced to the maximum extent possible given the intent of the parties hereto. If such clause or provision cannot be so enforced, then (a) such provision will be excluded from this Option Agreement, (b) the balance of this Option Agreement will be interpreted as if such provision were so excluded and (c) the balance of this Option Agreement will be enforceable in accordance with its terms.
19.Governing Law and Venue. This Option Agreement and all acts and transactions pursuant hereto and the rights and obligations of the parties hereto will be governed, construed and interpreted in accordance with the laws of the State of Delaware, without giving effect to such state’s conflict of laws rules. Any and all disputes relating to, concerning or arising from this Option Agreement, or relating to, concerning or arising from the relationship between the parties evidenced by the Plan or this Option Agreement, will be brought and heard exclusively in the United States District Court for the Northern District of California or the Superior Court of California, County of Santa Clara. Each of the parties hereby represents and agrees that such party is subject to the personal jurisdiction of said courts; hereby irrevocably consents to the jurisdiction of such courts in any legal or equitable proceedings related to, concerning or arising from such dispute, and waives, to the fullest extent permitted by law, any objection which such party may now or hereafter have that the laying of the venue of any legal or equitable proceedings related to, concerning or arising from such dispute which is brought in such courts is improper or that such proceedings have been brought in an inconvenient forum.
20.No Rights as Employee, Director or Consultant. Nothing in this Option Agreement will affect in any manner whatsoever any right or power of the Company, or a Parent, Subsidiary or Affiliate may have to terminate Participant’s Service, for any reason, with or without Cause.
21.Consent to Electronic Delivery of All Plan Documents and Disclosures. By Participant’s acceptance of the Notice (whether in writing or electronically), Participant and the Company agree that this Option is granted under and governed by the terms and conditions of the Plan, the Notice and this Option Agreement. Participant has reviewed the Plan, the Notice and this Option Agreement in their entirety, has had an opportunity to obtain the advice of counsel prior to executing the Notice and Agreement, and fully understands all provisions of the Plan, the Notice and this Option Agreement. Participant hereby agrees to accept as binding, conclusive and final all decisions or interpretations of the Committee upon any questions relating to the Plan, the Notice and this Option Agreement. Participant further agrees to notify the Company upon any change in the residence address.
By acceptance of this Option, Participant agrees to participate in the Plan through an on-line or electronic system established and maintained by the Company or a third party designated by the Company and consents to the electronic delivery of the Notice, this Option Agreement, the Plan, account statements, Plan prospectuses required by the SEC, U.S. financial reports of the Company, and all other documents that the Company is required to deliver to its security holders (including, without limitation, annual reports and proxy statements) or other communications or information related to the Option and current or future participation in the Plan. Electronic delivery may include the delivery of a link to the Company intranet or the internet site of a third party involved in administering the Plan, the delivery of the document via e-mail or such other delivery determined at the Company’s discretion. Participant acknowledges that Participant may receive from the Company a paper copy of any documents delivered electronically at no cost if Participant contacts the Company by telephone, through a postal service or electronic mail to Stock Administration. Participant further acknowledges that Participant will be provided with a paper copy of any documents delivered electronically if electronic delivery fails; similarly, Participant understands that Participant must provide on request to the Company or any designated third party a paper copy of any documents delivered electronically if electronic delivery fails.
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Also, Participant understands that Participant’s consent may be revoked or changed, including any change in the electronic mail address to which documents are delivered (if Participant has provided an electronic mail address), at any time by notifying the Company of such revised or revoked consent by telephone, postal service or electronic mail to Stock Administration.
22.Insider Trading Restrictions/Market Abuse Laws. Participant acknowledges that, depending on Participant’s country of residence, the broker’s country, or the country in which the Shares are listed, Participant may be subject to insider trading restrictions and/or market abuse laws in applicable jurisdictions, which may affect Participant’s ability to directly or indirectly, accept, acquire, sell or attempt to sell or otherwise dispose of Shares, or rights to Shares (e.g., Options), or rights linked to the value of Shares, during such times as Participant is considered to have “inside information” regarding the Company (as defined by the laws or regulations in the applicable jurisdiction). Local insider trading laws and regulations may prohibit the cancellation or amendment of orders Participant placed before possessing the inside information. Furthermore, Participant may be prohibited from (i) disclosing the inside information to any third party, including fellow employees (other than on a “need to know” basis) and (ii) “tipping” third parties or causing them to otherwise buy or sell securities. Any restrictions under these laws or regulations are separate from and in addition to any restrictions that may be imposed under the Company’s Insider Trading Policy and 10b5-1 Trading Plan Policy. Participant acknowledges that it is Participant’s responsibility to comply with any applicable restrictions and understands that Participant should consult his or her personal legal advisor on such matters. In addition, Participant acknowledges that he or she read the Company’s Insider Trading Policy, and agrees to comply with such policy, as it may be amended from time to time, whenever Participant acquires or disposes of the Company’s securities.
23.Foreign Asset/Account, Exchange Control and Tax Reporting. Participant may be subject to foreign asset/account, exchange control and/or tax reporting requirements as a result of the acquisition, holding and/or transfer of Shares or cash resulting from his or her participation in the Plan. Participant may be required to report such accounts, assets, the balances therein, the value thereof and/or the transactions related thereto to the applicable authorities in Participant’s country and/or repatriate funds received in connection with the Plan within certain time limits or according to specified procedures. Participant acknowledges that he or she is responsible for ensuring compliance with any applicable foreign asset/account, exchange control and tax reporting requirements and should consult his or her personal legal and tax advisors on such matters.
24.Award Subject to Company Clawback or Recoupment. The Option shall be subject to clawback or recoupment pursuant to any compensation clawback or recoupment policy adopted by the Board or required by law during the term of Participant’s employment or other Service that is applicable to Participant. In addition to any other remedies available under such policy, applicable law may require the cancellation of Participant’s Option (whether vested or unvested) and the recoupment of any gains realized with respect to Participant’s Option.
BY ACCEPTING THIS OPTION, PARTICIPANT AGREES TO ALL OF THE TERMS AND CONDITIONS DESCRIBED ABOVE, IN THE APPENDIX, IN THE NOTICE AND IN THE PLAN.
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APPENDIX
VOCERA COMMUNICATIONS, INC.
2021 EQUITY INCENTIVE PLAN
GLOBAL STOCK OPTION AWARD AGREEMENT
COUNTRY SPECIFIC PROVISIONS FOR EMPLOYEES OUTSIDE THE U.S.
Any capitalized term used in this Appendix without definition will have the meaning ascribed to it in the Notice, the Option Agreement or the Plan, as applicable.
Terms and Conditions
This Appendix includes additional terms and conditions that govern the Option granted to Participant under the Plan if Participant resides and/or works in one of the countries below. This Appendix forms part of the Option Agreement.
If Participant is a citizen or resident of a country other than the one in which Participant is currently residing and/or working, or Participant is considered as such for local law purposes, or Participant transfers Service and/or residency to another country after the Date of Grant, the Company will, in its sole discretion, determine to what extent the additional terms and conditions included herein will apply to Participant under these circumstances.
Notifications
This Appendix also includes information relating to exchange control, securities laws, foreign asset/account reporting and other issues of which Participant should be aware with respect to Participant’s participation in the Plan. The information is based on the securities, exchange control, foreign asset/account reporting and other laws in effect in the respective countries as of April 2021. Such laws are complex and change frequently. As a result, Participant should not rely on the information herein as the only source of information relating to the consequences of Participant’s participation in the Plan because the information may be out of date at the time that Participant exercises the Option, sells Shares acquired under the Plan or takes any other action in connection with the Plan.
In addition, the information is general in nature and may not apply to Participant’s particular situation, and the Company is not in a position to assure Participant of any particular result. Accordingly, Participant should seek appropriate professional advice as to how the relevant laws in Participant’s country may apply to Participant’s situation.

Finally, if Participant is a citizen or resident of a country other than the one in which Participant is currently working and/or residing, or Participant is considered as such for local law purposes, or Participant transfers Service and/or residency to another country after the Date of Grant, the information contained herein may not apply to Participant in the same manner.

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EUROPEAN UNION (“EU”) / EUROPEAN ECONOMIC AREA (“EEA”) MEMBER STATES AND THE UNITED KINGDOM

Terms and Conditions

Data Privacy. The following provisions replace Section 11 of the Option Agreement:

(a)Data Collection and Usage. Participant is hereby notified of the collection, processing and use of certain personal information about Participant, including, but not limited to, Participant’s name, home address, telephone number, email address, date of birth, social insurance number, passport or other identification number, salary, nationality, job title, any Shares or directorships held in the Company, details of all awards granted under the Plan or any other entitlement to Shares awarded, canceled, exercised, vested, unvested or outstanding in Participant’s favor (“Data”), in connection with the implementation, administration and management of the Plan. The processing activity is pursuant to the Company’s legitimate business interest of providing the benefits under the Plan to Participant and generally administering employee equity awards granted under the Plan. Participant may opt out of such processing, although this would mean that the Company could not grant awards under the Plan to Participant. For questions about opting out, Participant should contact his or her local human resources representative.
(b)International Data Transfers. The Company is based in the U.S. The EU / EEA member states and the United Kingdom have different data privacy laws and protections than the U.S. The Company provides appropriate safeguards for protecting Data that it receives in the U.S. from its Subsidiaries and Affiliates in the EU / EEA member states and the United Kingdom. The Company’s legal basis for its transfer of Data is its adherence to the EU Standard Contractual Clauses in its data transfer agreements with its Subsidiaries and Affiliates in the EU / EEA member states and the United Kingdom.
(c)Stock Plan Administration Service Providers. The Company will transfer Data to E*TRADE Financial Services, Inc. and E*TRADE Securities LLC (“E*TRADE”), an independent service provider based in the U.S. which is assisting the Company with the implementation, administration and management of the Plan. The Company may select a different service provider or additional service providers and share Data with such other provider serving in a similar manner. Participant may be asked to agree on separate terms and data processing practices with the service provider, with such agreement being a condition to the ability to participate in the Plan. E*TRADE is based in the U.S.  The EU / EEA member states and the United Kingdom have different data privacy laws and protections than the U.S.  By signing below or, in case this information is presented electronically, by clicking the “Accept” or similar button implemented into the relevant webpage or platform, Participant agrees to the transfer of Data to E*TRADE for the exclusive purpose of administering Participant's participation in the Plan. The Company's legal basis for the transfer of Data to E*TRADE is Participant's consent.
(d)Voluntariness and Consequences of Denial or Withdrawal of Consent. Participation in the Plan is voluntary and Participant is providing the consent herein on a purely voluntary basis. If Participant does not consent, or if Participant later seeks to revoke the consent, Participant’s salary from or employment with the Employer will not be affected. The only consequence of refusing or withdrawing consent is that the Company would not be able to grant the Options or other awards under the Plan or administer or maintain such awards.
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(e)Data Retention. The Company will hold and use Data only as long as is necessary to implement, administer and manage Participant’s participation in the Plan, or as required to comply with legal or regulatory obligations, including under tax and security laws.
(f)Data Subject Rights. To the extent provided by law, Participant has the right to (i) request access to or copies of Data the Company processes, (ii) rectify incorrect Data, (iii) delete Data, (iv) restrict the processing of Data, (v) restrict the portability of Data, (vi) lodge complaints with competent authorities in Participant’s country, and/or (vii) receive a list with the names and addresses of any potential recipients of Data. To receive clarification regarding these rights or to exercise these rights, Participant can contact his or her local human resources representative.
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AUSTRALIA1

Notifications

Tax Information. The Plan is a plan to which Subdivision 83A-C of the Income Tax Assessment Act 1997 (Cth) applies (subject to conditions in the Act).

Securities Law Information. If Participant acquires Shares under the Plan and subsequently offers to sell the Shares to a person or entity resident in Australia, such offer may be subject to disclosure requirements under Australian law, and Participant should obtain legal advice regarding any applicable disclosure requirements prior to making any such offer.

CANADA

Terms and Conditions

Method of Payment and Tax Withholding. The following provisions supplement Sections 5 and 8(b) of the Option Agreement:

Due to tax considerations in Canada, Participant will not be permitted to pay the Exercise Price of the Option or any Tax-Related Items by surrendering certificates for shares of Company stock that Participant owns (or attesting to the ownership of shares that Participant owns and having such number of shares subtracted from the Exercised Shares to be issued to Participant).

Termination Date. The following provisions replace Section 3(e) of the Option Agreement:

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For purposes of this Option, Participant’s Service will be considered terminated (regardless of the reason for such termination and whether or not later found to be invalid or in breach of employment laws in the jurisdiction where Participant is providing services or the terms of Participant’s employment or service agreement, if any) as of the date that is the earlier of (i) the date Participant’s Service terminates, and (ii) the date Participant receives notice of termination. In either case, the date shall exclude any period during which notice, pay in lieu of notice or related payments or damages are provided or required to be provided under local law. For greater certainty, Participant will not be entitled to any pro-rated vesting or exercisability for that portion of time before the date on which Participant’s right to vest or exercise terminates, nor will Participant be entitled to any compensation for lost vesting or exercisability.

Notwithstanding the foregoing, if applicable employment standards legislation explicitly requires continued vesting and exercisability during a statutory notice period, Participant acknowledges that his or her right to vest in and exercise the Option, if any, will terminate effective as of the last day of Participant’s minimum statutory notice period, but Participant will not earn or be entitled to pro-rata vesting or exercisability if such date falls after the end of Participant’s statutory notice period, nor will Participant be entitled to any compensation for lost vesting or exercisability.

In case of any dispute as to whether and when a termination of Service has occurred, the Committee will have sole discretion to determine whether such termination of Service has occurred and the effective date of such termination.

The following provisions will apply if Participant is a resident of Quebec:

Language Consent. The parties acknowledge that it is their express wish that the Option Agreement, as well as all documents, notices and legal proceedings entered into, given or instituted pursuant hereto or relating directly or indirectly hereto, be drawn up in English.

Consentement Relatif à la Langue. Les parties reconnaissent avoir exigé la rédaction en anglais de cette convention, ainsi que de tous documents exécutés, avis donnés et procédures judiciaries intentées, directement ou indirectement, relativement à ou suite à la présente convention.

Data Privacy. The following provisions supplement Section 11 of the Option Agreement:

Participant hereby authorizes the Company and the Company’s representatives to discuss with and obtain all relevant information from all personnel, professional or not, involved in the administration and operation of the Plan. Participant further authorizes the Company, any Parent or Subsidiary, and any stock plan service provider that may be selected by the Company to assist with the Plan to disclose and discuss the Plan with their respective advisors. Participant further authorizes the Company and any Parent or Subsidiary to record such information and to keep such information in Participant’s employee file.

Notifications

Securities Law Information. Participant is permitted to sell Shares acquired under the Plan through the designated broker appointed under the Plan, if any, provided the resale of Shares acquired under the Plan takes place outside Canada through facilities of a stock exchange on which the Shares are listed. The Shares are currently listed on the New York Stock Exchange under the ticker symbol “VCRA.”

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Foreign Asset/Account Reporting Information. Foreign property, including Shares and rights to receive Shares (e.g., the Option), of a non-Canadian company held by a Canadian resident employee must generally be reported annually on a Form T1135 (Foreign Income Verification Statement), if the total cost of Participant’s foreign assets exceeds C$100,000 at any time during the year. The Options must be reported, generally at nil cost, if the C$100,000 threshold is exceeded because of other foreign property held by Participant. When Shares are acquired, their cost generally is the adjusted cost base (“ACB”) of the Shares, ordinarily equal to the Fair Market Value of the Shares at the time of acquisition, but if Participant owns other Shares of the Company, the ACB may have to be averaged with the ACB of the other Shares. Participant should consult with a personal advisor to ensure compliance with applicable reporting obligations.

INDIA

Terms and Conditions

Method of Payment. The following provisions supplement Section 5 of the Option Agreement:

Due to legal restrictions in India, Participant will not be permitted to pay the Exercise Price by a cashless exercise through irrevocable directions to a securities broker approved by the Company to sell part of the Shares covered by this Option and deliver to the Company from the sale proceeds an amount sufficient to pay the Exercise Price. However, Participant will be permitted to pay the Exercise Price by a cashless exercise through irrevocable directions to a securities broker approved by the Company to sell all of the Shares covered by this Option and deliver to the Company from the sale proceeds an amount sufficient to pay the Exercise Price. The Company reserves the right to allow additional methods of payment depending on the development of local law.

Notifications

Exchange Control Information. Indian residents are required to repatriate to India any proceeds from the sale of Shares acquired under the Plan and any cash dividends within such period of time as will be required under applicable regulations. Participant should obtain a foreign inward remittance certificate (“FIRC”) from the bank where Participant deposits the foreign currency. Participant should maintain the FIRC as evidence of the repatriation of funds in the event the Reserve Bank of India or the Employer requests proof of repatriation.

Foreign Asset/Account Reporting Information. Indian residents are required to declare any foreign bank accounts and any foreign financial assets (including Shares held outside India) in their annual tax return. Participant should consult with personal tax advisor to determine his or her personal reporting obligations.

IRELAND

Notifications

Director Notification Obligation. Directors, shadow directors or secretaries of an Irish Subsidiary or Affiliate, whose interests in the Company represent more than 1% of the Company’s voting share capital, must notify the Irish Subsidiary or Affiliate, as applicable, in writing when (i) receiving or disposing of an interest in the Company (e.g., the Option, Shares, etc.), (ii) becoming aware of the event giving rise to the notification requirement, or (iii) becoming a director or secretary if such an interest exists at the time.
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This notification requirement also applies with respect to the interests of a spouse or minor children of such individuals (whose interests will be attributed to the director, shadow director or secretary).

SINGAPORE

Notifications

Securities Law Information. This Option is being granted pursuant to the “Qualifying Person” exemption under section 273(1)(f) of the Singapore Securities and Futures Act (Chapter 289, 2006 Ed.) (“SFA”). The Plan has not been lodged or registered as a prospectus with the Monetary Authority of Singapore. Participant should note that the Option is subject to section 257 of the SFA, and that Participant will not be able to make any subsequent sale of Shares in Singapore, or any offer of such subsequent sale of the Shares underlying the Option in Singapore, unless such sale or offer is made (i) after six months from the Date of Grant, (ii) pursuant to the exemptions under Part XIII Division (1) Subdivision (4) (other than section 280) of the SFA, or (iii) pursuant to, and in accordance with, the conditions of any other applicable provisions of the SFA.

Director Notification Obligation. If Participant is a director, associate director or shadow director of a Singapore Subsidiary or Affiliate, Participant is subject to certain notification requirements under the Singapore Companies Act, regardless of whether Participant is a Singapore resident or employed in Singapore. Among these requirements is an obligation to notify the Singapore Subsidiary or Affiliate writing of an interest in the Company (e.g., this Option, Shares) or any related companies within two business days of (i) its acquisition or disposal, (ii) any change in a previously disclosed interest, or (iii) becoming a director, if Participant holds such an interest at the time.

UNITED ARAB EMIRATES

Notifications

Securities Law Information. The grant of the Option is available only for select employees of the Company or a Parent, Subsidiary or Affiliate, and is in the nature of providing equity incentives to employees in the United Arab Emirates. The Plan, the Notice and the Option Agreement, and any other Plan materials (collectively, the “Plan Documents”), are intended for distribution only to such eligible employees and must not be delivered to, or relied on, by any other person. Prospective purchasers of securities should conduct their own due diligence.

The Emirates Securities and Commodities Authority has no responsibility for reviewing or verifying any documents in connection with this statement, including the Plan Documents, or any other incidental communication materials distributed in connection with this Option. Further, neither the Ministry of Economy nor the Dubai Department of Economic Development has approved this statement nor taken steps to verify the information set out in it, and has no responsibility for it. Residents of the United Arab Emirates who have any questions regarding the contents of the Plan, the Notice and the Option Agreement should obtain independent professional advice.

UNITED KINGDOM

Terms and Conditions

Taxes. The following provisions supplement Section 8 of the Option Agreement:
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Without limitation to Section 8 of the Option Agreement, Participant agrees that Participant is liable for all Tax-Related Items and hereby covenants to pay all such Tax-Related Items, as and when requested by the Company or, if different, the Employer or by Her Majesty’s Revenue & Customs (“HMRC”) (or any other tax authority or any other relevant authority). Participant also agrees to indemnify and keep indemnified the Company and, if different, the Employer against any Tax-Related Items that they are required to pay or withhold or have paid or will pay to HMRC (or any other tax authority or any other relevant authority) on Participant’s behalf.

Notwithstanding the foregoing, if Participant is a director or executive officer of the Company (within the meaning of Section 13(k) of the Exchange Act), the terms of the immediately foregoing provision will not apply. In such case, if any amount of income tax is not collected from or paid by Participant within 90 days of the end of the U.K. tax year in which an event giving rise to the indemnification described above occurs, the amount of any uncollected income tax may constitute a benefit to Participant on which additional income tax and National Insurance contributions (“NICs”) may be payable. Participant is responsible for reporting and paying any income tax due on this additional benefit directly to HMRC under the self-assessment regime and for paying to the Company and/or the Employer (as appropriate) for value of any employee NICs due on this additional benefit, which the Company and/or the Employer may collect by any of the means referred to in Section 8 of the Option Agreement.

Joint Election. As a condition of participation in the Plan and the vesting and exercisability of the Option, Participant agrees to accept any liability for secondary Class 1 NICs that may be payable by the Company or the Employer (or any successor to the Company or the Employer) in connection with the Option, the receipt of any benefits related to the Option and any event giving rise to Tax-Related Items (the “Employer NICs”). Without prejudice to the foregoing, Participant agrees to execute a joint election with the Company and/or the Employer, the form of such Joint Election being formally approved by HMRC (the “Joint Election”), and any other consent or elections required by the Company or the Employer in respect of the Employer NICs liability. Participant further agrees to execute such other elections as may be required by any successor to the Company and/or the Employer for the purpose of continuing the effectiveness of the Joint Election. The Employer NICs may be collected by the Company and/or the Employer using any of the means referred to in Section 8 of the Option Agreement.

If Participant does not enter into the Joint Election, if approval of the Joint Election has been withdrawn by HMRC, if the Joint Election is revoked by the Company or the Employer (as applicable), or if the Joint Election is jointly revoked by Participant and the Company or the Employer (as applicable), the Company, in its sole discretion and without any liability to the Company or the Employer, may choose not to issue or deliver any Shares or proceeds from the sale of Shares to Participant upon exercise of this Option.
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EXHIBIT 10.06
VOCERA COMMUNICATIONS, INC.
2021 EQUITY INCENTIVE PLAN
GLOBAL NOTICE OF PERFORMANCE STOCK OPTION GRANT
Unless otherwise defined herein, the terms defined in the Vocera Communications, Inc. (the “Company”) 2021 Equity Incentive Plan (the “Plan”) will have the same meanings in this Global Notice of Performance Stock Option Grant and the electronic representation of this Global Notice of Performance Stock Option Grant, and the performance and vesting terms set forth in Appendix A attached hereto (the “Vesting Appendix”) established and maintained by the Company or a third party designated by the Company (the Global Notice of Performance Stock Option Grant and the Vesting Appendix are collectively referred to as this “Notice”).
Name:    
Address:    
You (“Participant”) have been granted an option to purchase shares of common stock of the Company (the “Option”) under the Plan subject to the terms and conditions of the Plan, this Notice and the attached Global Performance Stock Option Award Agreement (the “Option Agreement”), including any applicable country-specific provisions in Appendix B attached hereto (the “Country Appendix”), which constitutes part of the Option Agreement.
Grant Number:    
Date of Grant:    
Vesting Commencement Date:    
Exercise Price per Share:    
Maximum Number of Shares:    
Type of Option:             Non-Qualified Stock Option

         Incentive Stock Option
Expiration Date:    ________ __, 20__; This Option expires earlier if Participant’s Service terminates earlier, as described in the Option Agreement.
Vesting Schedule:    As set forth in the Vesting Appendix.
By accepting (whether in writing, electronically or otherwise) the Option, Participant acknowledges and agrees to the following:
1)Participant understands that Participant’s Service with the Company or a Parent or Subsidiary or Affiliate is for an unspecified duration, can be terminated at any time (i.e., is “at-will”), except where otherwise prohibited by applicable law, and that nothing in this Notice, the Option Agreement or the Plan changes the nature of that relationship. Participant acknowledges that the vesting of the Option pursuant to this Notice is subject to both achievement of the performance metrics set forth in the Vesting Appendix and Participant’s continuing Service as an Employee, Director or Consultant. To the extent permitted by applicable law, Participant agrees and acknowledges that the Vesting Schedule may change prospectively in the event that Participant’s service status changes between full- and part-time and/or in the event Participant is on a leave of absence, in accordance with Company policies relating to work schedules and vesting of Awards or as determined by the Committee to the extent permitted by applicable law. Furthermore, the period during which Participant may exercise the Option after termination of Service, if any, will commence on the Termination Date (as defined in the Option Agreement).
2)This grant is made under and governed by the Plan, the Option Agreement and this Notice, and this Notice is subject to the terms and conditions of the Option Agreement and the Plan, both of which are incorporated herein by reference. Participant has read the Notice, the Option Agreement and the Plan.
3)Participant has read the Company’s Insider Trading Policy, and agrees to comply with such policy, as it may be amended from time to time, whenever Participant acquires or disposes of the Company’s securities.
4)By accepting the Option, Participant consents to electronic delivery and participation as set forth in the Option Agreement.
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APPENDIX A
VESTING APPENDIX
[Company to insert applicable performance metrics and vesting schedule.]
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VOCERA COMMUNICATIONS, INC.
2021 EQUITY INCENTIVE PLAN
GLOBAL PERFORMANCE STOCK OPTION AWARD AGREEMENT
Unless otherwise defined in this Global Performance Stock Option Award Agreement (this “Option Agreement”), any capitalized terms used herein will have the meaning ascribed to them in the Vocera Communications, Inc. 2021 Equity Incentive Plan (the “Plan”).
Participant has been granted an option to purchase Shares (the “Option”) of Vocera Communications, Inc. (the “Company”), subject to the terms, restrictions and conditions of the Plan, the Global Notice of Performance Stock Option Grant (including the Vesting Appendix attached thereto, the “Notice”) and this Option Agreement, including any applicable country-specific provisions in Appendix B attached hereto (the “Country Appendix”), which constitutes part of this Option Agreement.
1.Vesting Rights. Subject to the applicable provisions of the Plan and this Option Agreement, this Option may be exercised, in whole or in part, in accordance with the Vesting Schedule set forth in the Notice. Participant acknowledges that the vesting of the Option pursuant to the Notice and this Option Agreement is subject to Participant’s continuing Service as an Employee, Director or Consultant.
2.Grant of Option. Participant has been granted an Option for the number of Shares set forth in the Notice at the exercise price per Share in U.S. Dollars set forth in the Notice (the “Exercise Price”). In the event of a conflict between the terms and conditions of the Plan and the terms and conditions of this Option Agreement, the terms and conditions of the Plan shall prevail. If designated in the Notice as an Incentive Stock Option (“ISO”), this Option is intended to qualify as an Incentive Stock Option under Section 422 of the Code. However, if this Option is intended to be an ISO, to the extent that it exceeds the U.S. $100,000 rule of Code Section 422(d) it shall be treated as a Nonqualified Stock Option (“NSO”).
3.Termination Period.
(a)General Rule. If Participant’s Service terminates for any reason except death or Disability, and other than for Cause, then this Option will expire at the close of business at Company headquarters on the date three (3) months after Participant’s Termination Date (as defined below) (or such shorter time period not less than thirty (30) days or longer time period as may be determined by the Committee, with any exercise beyond three (3) months after the date Participant’s Service terminates deemed to be the exercise of an NSO), but in no event after the Expiration Date set forth in the Notice. If Participant does not exercise this Option within the termination period set forth in the Notice or the termination periods set forth in this Section 3, the Option shall terminate in its entirety.
(b)Death; Disability. If Participant dies before Participant’s Service terminates (or Participant dies within three (3) months of Participant’s termination of Service other than for Cause), then this Option will expire at the close of business at Company headquarters on the date twelve (12) months after the date of death (or such shorter time period not less than six (6) months or longer time period as may be determined by the Committee), subject to any shorter period set forth in the Country Appendix for any applicable jurisdiction, and in no event after the Expiration Date set forth in the Notice. If Participant’s Service terminates because of Participant’s Disability, then this Option will expire at the close of business at Company headquarters on the date twelve (12) months after Participant’s Termination Date (or such shorter time period not less than six (6) months or longer time period as may be determined by the Committee), subject to any shorter period set forth in the Country Appendix for any applicable jurisdiction and in no event after the Expiration Date set forth in the Notice. Any exercise of this Option beyond twelve (12) months after the date Participant ceases to be an employee when the termination is for Participant’s Disability will be deemed to be the exercise of an NSO.
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(c)Cause. Unless otherwise determined by the Committee, the Option (whether or not vested) will terminate immediately upon the Participant’s cessation of Service if the Company reasonably determines in good faith that such cessation of Service has resulted in connection with an act or failure to act constituting Cause (or the Participant’s Service could have been terminated for Cause (without regard to the lapsing of any required notice or cure periods in connection therewith) at the time the Participant’s Service terminated).
(d)No Notification of Exercise Periods. Participant is responsible for keeping track of these exercise periods following Participant’s termination of Service for any reason. The Company will not provide further notice of such periods. In no event shall this Option be exercised later than the Expiration Date set forth in the Notice.
(e)Termination. For purposes of this Option, Participant’s Service will be considered terminated (regardless of the reason for such termination and whether or not later found to be invalid or in breach of employment laws in the jurisdiction where Participant is providing Services or the terms of Participant’s employment or service agreement, if any) as of the date Participant is no longer actively providing Services to the Company or a Parent, Subsidiary or Affiliate (i.e., Participant’s period of Service would not include any contractual notice period or any period of “garden leave” or similar period mandated under employment laws in the jurisdiction where Participant is providing Service or the terms of Participant’s employment or service agreement, if any) (the “Termination Date”). Unless otherwise provided in this Option Agreement or determined by the Company, Participant’s right to vest in the Option under the Plan, if any, will terminate as of the Termination Date and Participant’s right to exercise the Option after termination of Service, if any, will be measured from the Termination Date. In case of any dispute as to whether and when a termination of Service has occurred, the Committee will have sole discretion to determine whether such termination of Service has occurred and the effective date of such termination (including whether Participant may still be considered to be actively providing Services while on a leave of absence).
4.Exercise of Option.
(a)Right to Exercise. This Option is exercisable during its term in accordance with the Vesting Schedule set forth in the Notice and the applicable provisions of the Plan and this Option Agreement. In the event of Participant’s death, Disability, termination for Cause or other cessation of Service, the exercisability of the Option is governed by the applicable provisions of the Plan, the Notice and this Option Agreement. This Option may not be exercised for a fraction of a Share.
(b)Method of Exercise. This Option is exercisable by delivery of an exercise notice in a form specified by the Company (the “Exercise Notice”), which will state the election to exercise the Option, the number of Shares in respect of which the Option is being exercised (the “Exercised Shares”), and such other representations and agreements as may be required by the Company pursuant to the provisions of the Plan. The Exercise Notice will be delivered in person, by mail, via electronic mail or facsimile or by other authorized method to the Secretary of the Company or other person designated by the Company. The Exercise Notice will be accompanied by payment of the aggregate Exercise Price as to all Exercised Shares together with any applicable Tax-Related Items (as defined in Section 8 below). This Option will be deemed to be exercised upon receipt by the Company of such fully executed Exercise Notice accompanied by such aggregate Exercise Price and payment of any applicable Tax-Related Items (as defined below). No Shares will be issued pursuant to the exercise of this Option unless such issuance and exercise complies with all relevant provisions of law ,the requirements of any stock exchange or quotation service upon which the Shares are then listed, and any exchange control registrations. Assuming such compliance, for United States income tax purposes the Exercised Shares will be considered transferred to Participant on the date the Option is exercised with respect to such Exercised Shares.
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(c)Exercise by Another. If another person wants to exercise this Option after it has been transferred to him or her in compliance with this Option Agreement, that person must prove to the Company’s satisfaction that he or she is entitled to exercise this Option. That person must also complete the proper Exercise Notice form (as described above) and pay the Exercise Price (as described below) and any applicable Tax-Related Items (as described below).
5.Method of Payment. Payment of the aggregate Exercise Price will be by any of the following, or a combination thereof, at the election of Participant:
(a)Participant’s personal check (representing readily available funds), wire transfer, or a cashier’s check;
(b)if permitted by the Committee, certificates for shares of Company stock that Participant owns, along with any forms needed to effect a transfer of those shares to the Company; the value of the shares, determined as of the effective date of the Option exercise, will be applied to the Exercise Price. Instead of surrendering shares of Company stock, Participant may attest to the ownership of those shares on a form provided by the Company and have the same number of shares subtracted from the Exercised Shares issued to Participant. However, Participant may not surrender, or attest to the ownership of, shares of Company stock in payment of the Exercise Price of Participant’s Option if Participant’s action would cause the Company to recognize compensation expense (or additional compensation expense) with respect to this Option for financial reporting purposes;
(c)cashless exercise through irrevocable directions to a securities broker approved by the Company to sell all or part of the Shares covered by this Option and to deliver to the Company from the sale proceeds an amount sufficient to pay the Exercise Price. The balance of the sale proceeds, if any, will be delivered to Participant unless otherwise provided in this Option Agreement. The directions must be given by signing a special notice of exercise form provided by the Company; or
(d)any other method authorized by the Company;
provided, however, that the Company may restrict the available methods of payment due to facilitate compliance with applicable law or administration of the Plan. In particular, if Participant is located outside the United States, Participant should review the applicable provisions of the Country Appendix for any such restrictions that may currently apply.
6.Non-Transferability of Option. This Option may not be sold, assigned, transferred, pledged, hypothecated, or otherwise disposed of other than by will or by the laws of descent or distribution or court order and may be exercised during the lifetime of Participant only by Participant or unless otherwise permitted by the Committee on a case-by-case basis. The terms of the Plan and this Option Agreement will be binding upon the executors, administrators, heirs, successors and assigns of Participant.
7.Term of Option. This Option will in any event expire on the Expiration Date set forth in the Notice, which date is 10 years after the Date of Grant (five years after the Date of Grant if this Option is designated as an ISO in the Notice and Section 5.3 of the Plan applies).
8.Taxes.
(a)Responsibility for Taxes. Participant acknowledges that, regardless of any action taken by the Company or a Parent, Subsidiary or Affiliate employing or retaining Participant (the “Employer”), the ultimate liability for all income tax, social insurance, payroll tax, fringe benefits tax, payment on account or other tax related items related to Participant’s participation in the Plan and legally applicable or deemed applicable to Participant (“Tax-Related Items”) is and remains Participant’s responsibility and may exceed the amount actually withheld by the Company or the Employer, if any.
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Participant further acknowledges that the Company and/or the Employer (i) make no representations or undertakings regarding the treatment of any Tax-Related Items in connection with any aspect of this Option, including, but not limited to, the grant, vesting or exercise of this Option, the subsequent sale of Shares acquired pursuant to such exercise and the receipt of any dividends; and (ii) do not commit to and are under no obligation to structure the terms of the grant or any aspect of this Option to reduce or eliminate Participant’s liability for Tax-Related Items or achieve any particular tax result. Further, if Participant is subject to Tax-Related Items in more than one jurisdiction, Participant acknowledges that the Company and/or the Employer (or former employer, as applicable) may be required to withhold or account for Tax-Related Items in more than one jurisdiction. PARTICIPANT SHOULD CONSULT A TAX ADVISER APPROPRIATELY QUALIFIED IN EACH OF THE JURISDICTIONS, INCLUDING COUNTRY OR COUNTRIES IN WHICH PARTICIPANT RESIDES OR IS SUBJECT TO TAXATION BEFORE EXERCISING THE OPTION OR DISPOSING OF THE SHARES.
(b)Withholding. Prior to any relevant taxable or tax withholding event, as applicable, to the extent permitted by applicable law Participant agrees to make arrangements satisfactory to the Company and/or the Employer to satisfy all Tax-Related Items. In this regard, Participant authorizes the Company and/or the Employer, or their respective agents, at their discretion, to satisfy any withholding obligations or rights for Tax-Related Items by one or a combination of the following:
(i)withholding from Participant’s wages or other cash compensation payable to Participant by the Company, the Employer or any other Parent, Subsidiary or Affiliate;
(ii)withholding from proceeds of the sale of Shares acquired at exercise of this Option either through a voluntary sale or through a mandatory sale arranged by the Company (on Participant’s behalf pursuant to this authorization and without further consent);
(iii)withholding Shares to be issued upon exercise of the Option, provided the Company only withholds the number of Shares necessary to satisfy no more than the maximum statutory withholding amounts;
(iv)Participant’s payment of a cash amount (including by check representing readily available funds or a wire transfer); or
(v)any other arrangement approved by the Committee and permitted under applicable law;
all under such rules as may be established by the Committee and in compliance with the Company’s Insider Trading Policy and 10b5-1 Trading Plan Policy, if applicable; provided however, that if Participant is a Section 16 officer of the Company under the Exchange Act, then the Committee (as constituted in accordance with Rule 16b-3 under the Exchange Act) shall establish the method of withholding from alternatives (i)-(v) above, and the Committee shall establish the method prior to the tax withholding event.
The Company may withhold or account for Tax-Related Items by considering applicable statutory or other withholding rates, including minimum or maximum rates applicable in Participant’s jurisdiction(s). In the event of over-withholding, Participant may receive a refund of any over-withheld amount in cash (with no entitlement to the equivalent amount in Shares), or if not refunded, Participant may be able to seek a refund from the local tax authorities. In the event of under-withholding, Participant may be required to pay any additional Tax-Related Items directly to the applicable tax authority. If the obligation for Tax-Related Items is satisfied by withholding in Shares, for tax purposes, Participant will be deemed to have been issued the full number of Exercised Shares, notwithstanding that a number of the
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Shares are held back solely for the purpose of satisfying the withholding obligation for Tax-Related Items.
The Company may refuse to issue or deliver the Shares or the proceeds of the sale of Shares, if Participant fails to comply with Participant’s obligations in connection with the Tax-Related Items.
(c)Notice of Disqualifying Disposition of ISO Shares. If Participant is subject to Tax-Related Items in the United States and sells or otherwise disposes of any of the Shares acquired pursuant to an ISO on or before the later of (i) two years after the grant date, or (ii) one year after the exercise date, Participant will immediately notify the Company in writing of such disposition. Participant agrees that he or she may be subject to income tax withholding by the Company on the compensation income recognized from such early disposition of ISO Shares by payment in cash or out any wages or other cash compensation paid to Participant by the Company and/or the Employer or any Parent, Subsidiary or Affiliate.
9.Nature of Grant. By accepting the Option, Participant acknowledges, understands and agrees that:
(a)the Plan is established voluntarily by the Company, it is discretionary in nature and it may be modified, amended, suspended or terminated by the Company at any time, to the extent permitted by the Plan;
(b)the grant of the Option is exceptional, voluntary and occasional and does not create any contractual or other right to receive future grants of options, or benefits in lieu of options, even if options have been granted in the past;
(c)all decisions with respect to future options or other grants, if any, will be at the sole discretion of the Company;
(d)Participant is voluntarily participating in the Plan;
(e)the Option and Participant’s participation in the Plan will not create a right to employment or be interpreted as forming or amending an employment or service contract with the Company, the Employer or any other Parent, Subsidiary or Affiliate, and shall not interfere with the ability of the Company, the Employer or any other Parent, Subsidiary or Affiliate, as applicable, to terminate Participant’s Service (if any);
(f)the Option and the Shares subject to the Option, and the income from and value of same, are not intended to replace any pension rights or compensation;
(g)the Option and the Shares subject to the Option, and the income from and value of same, are not part of normal or expected compensation for purposes including, but not limited to, calculating any severance, resignation, termination, redundancy, dismissal, end-of-service payments, bonuses, long-service awards, pension or retirement or welfare benefits or similar payments;
(h)unless otherwise agreed with the Company, the Option and the Shares subject to the Option, and the income from and value of same, are not granted as consideration for, or in connection with, the service Participant may provide as a director of a Parent, Subsidiary or Affiliate;
(i)the future value of the Shares underlying the Option is unknown, indeterminable and cannot be predicted with certainty; if the underlying Shares do not increase in value, the Option will have no value; if Participant exercises the Option and acquires Shares, the value of such Shares may increase or decrease, even below the Exercise Price;
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(j)no claim or entitlement to compensation or damages will arise from forfeiture of the Option resulting from Participant’s termination of Service (regardless of the reason for such termination and whether or not later found to be invalid or in breach of employment laws in the jurisdiction where Participant is employed or the terms of Participant’s employment agreement, if any); and
(k)neither the Company, the Employer nor any Parent, Subsidiary or Affiliate will be liable for any foreign exchange rate fluctuation between Participant’s local currency and the United States Dollar that may affect the value of the Option or of any amounts due to Participant pursuant to the exercise of the Option or the subsequent sale of any Shares acquired upon exercise.
10.No Advice Regarding Grant. The Company is not providing any tax, legal or financial advice, nor is the Company making any recommendations regarding Participant’s participation in the Plan, or Participant’s acquisition or sale of the underlying Shares. Participant acknowledges, understands and agrees that he or she should consult with his or her own personal tax, legal and financial advisors regarding his or her participation in the Plan before taking any action related to the Plan.
11.Data Privacy. Participant hereby explicitly and unambiguously consents to the collection, use and transfer, in electronic or other form, of Participant’s personal data as described in this Option Agreement and any other grant materials by and among, as applicable, the Employer, the Company and any other Parent, Subsidiary or Affiliate for the purpose of implementing, administering and managing the Plan.
Participant understands that the Company and the Employer may hold certain personal information about Participant, including, but not limited to, Participant’s name, home address, email address and telephone number, date of birth, passport, social insurance number or other identification number (e.g., resident registration number), salary, nationality, job title, any shares of stock or directorships held in the Company, details of all awards or any other entitlement to shares of stock awarded, canceled, exercised, vested, unvested or outstanding in Participant’s favor (“Data”), for the purpose of implementing, administering and managing the Plan.

Participant understands that Data may be transferred to E*TRADE Financial Corporate Services, Inc., its affiliates or successors, or such other stock plan service provider or other third party as may be selected by the Company in the future, to assist the Company with the implementation, administration and management of the Plan, presently or in the future. Participant understands that the recipients of Data may be located in the United States or elsewhere, and that the recipients’ country (e.g., the United States) may have different data privacy laws and protections than Participant’s country. Participant understands that, if he or she resides outside the United States, he or she may request a list with the names and addresses of any potential recipients of Data by contacting Participant’s local human resources representative. Participant authorizes the Company and any other possible recipients which may assist the Company (presently or in the future) with implementing, administering and managing the Plan to receive, possess, use, retain and transfer Data, in electronic or other form, for the purpose of implementing, administering and managing the Plan. Participant understands that Data will be held only as long as is necessary to implement, administer and manage Participant’s participation in the Plan. Participant understands that, if he or she resides outside the United States, he or she may, at any time, view Data, request information about the storage and processing of Data, require any necessary amendments to Data or refuse or withdraw the consents herein, in any case without cost, by contacting in writing Participant’s local human resources representative. Further, Participant understands that Participant is providing the consents herein on a purely voluntary basis. If Participant does not consent, or if Participant later seeks to revoke Participant’s consent, Participant’s employment status or service with the Employer will not be affected; the only consequence of refusing or withdrawing Participant’s consent is that the Company may not be able to grant the Option to Participant or administer or maintain such Option. Therefore,
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Participant understands that refusing or withdrawing Participant’s consent may affect Participant’s ability to participate in the Plan. For more information on the consequences of Participant’s refusal to consent or withdrawal of consent, Participant understands that he or she may contact Participant’s local human resources representative.
12.Language. Participant acknowledges that he or she is sufficiently proficient in English, or has consulted with an advisor who is proficient in the English language, so as to enable Participant to understand the terms and conditions of this Option Agreement and the Plan. Furthermore, if Participant has received this Option Agreement, or any other document related to the Option and/or the Plan translated into a language other than English and if the meaning of the translated version is different than the English version, the English version will control.
13.Country Appendix. Notwithstanding any provisions in this Option Agreement, the Option will be subject to any additional or different terms and conditions set forth in the Country Appendix for Participant’s country. Moreover, if Participant relocates to one of the countries included in the Country Appendix, the terms and conditions for such country will apply to Participant, to the extent the Company determines that the application of such terms and conditions is necessary or advisable for legal or administrative reasons. The Country Appendix constitutes part of this Option Agreement.
14.Imposition of Other Requirements. The Company reserves the right to impose other requirements on Participant’s participation in the Plan, on the Option and on any Shares purchased upon exercise of the Option, to the extent the Company determines it is necessary or advisable for legal or administrative reasons, and to require Participant to sign any additional agreements or undertakings that may be necessary to accomplish the foregoing.
15.Acknowledgement. The Company and Participant agree that the Option is granted under and governed by the Notice, this Option Agreement and the provisions of the Plan (incorporated herein by reference). Participant (a) acknowledges receipt of a copy of the Plan and the Plan prospectus, (b) represents that Participant has carefully read and is familiar with their provisions, and (c) hereby accepts the Option subject to all of the terms and conditions set forth herein and those set forth in the Plan and the Notice.
16.Entire Agreement; Enforcement of Rights. This Option Agreement, the Plan and the Notice constitute the entire agreement and understanding of the parties relating to the subject matter herein and supersede all prior discussions between them. Any prior agreements, commitments or negotiations concerning the purchase of the Shares hereunder are superseded. No adverse modification of, or adverse amendment to, this Option Agreement, nor any waiver of any rights under this Option Agreement, will be effective unless in writing and signed by the parties to this Option Agreement (which writing and signing may be electronic). The failure by either party to enforce any rights under this Option Agreement will not be construed as a waiver of any rights of such party.
17.Compliance with Laws and Regulations. The issuance of Shares will be subject to and conditioned upon compliance by the Company and Participant with all applicable state, federal and foreign laws and regulations and with all applicable requirements of any stock exchange or automated quotation system on which the Company’s Shares may be listed or quoted at the time of such issuance or transfer. Participant understands that the Company is under no obligation to register or qualify the Shares with any state, federal or foreign securities commission or to seek approval or clearance from any governmental authority for the issuance or sale of the Shares. Further, Participant agrees that the Company shall have unilateral authority to amend the Plan and this Option Agreement without Participant’s consent to the extent necessary to comply with securities or other laws applicable to issuance of Shares. Finally, the Shares issued pursuant to this Option Agreement shall be endorsed with appropriate legends, if any, determined by the Company.
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18.Severability. If one or more provisions of this Option Agreement are held to be unenforceable under applicable law, then such provision will be enforced to the maximum extent possible given the intent of the parties hereto. If such clause or provision cannot be so enforced, then (a) such provision will be excluded from this Option Agreement, (b) the balance of this Option Agreement will be interpreted as if such provision were so excluded and (c) the balance of this Option Agreement will be enforceable in accordance with its terms.
19.Governing Law and Venue. This Option Agreement and all acts and transactions pursuant hereto and the rights and obligations of the parties hereto will be governed, construed and interpreted in accordance with the laws of the State of Delaware, without giving effect to such state’s conflict of laws rules. Any and all disputes relating to, concerning or arising from this Option Agreement, or relating to, concerning or arising from the relationship between the parties evidenced by the Plan or this Option Agreement, will be brought and heard exclusively in the United States District Court for the Northern District of California or the Superior Court of California, County of Santa Clara. Each of the parties hereby represents and agrees that such party is subject to the personal jurisdiction of said courts; hereby irrevocably consents to the jurisdiction of such courts in any legal or equitable proceedings related to, concerning or arising from such dispute, and waives, to the fullest extent permitted by law, any objection which such party may now or hereafter have that the laying of the venue of any legal or equitable proceedings related to, concerning or arising from such dispute which is brought in such courts is improper or that such proceedings have been brought in an inconvenient forum.
20.No Rights as Employee, Director or Consultant. Nothing in this Option Agreement will affect in any manner whatsoever any right or power of the Company, or a Parent, Subsidiary or Affiliate may have to terminate Participant’s Service, for any reason, with or without Cause.
21.Consent to Electronic Delivery of All Plan Documents and Disclosures. By Participant’s acceptance of the Notice (whether in writing or electronically), Participant and the Company agree that this Option is granted under and governed by the terms and conditions of the Plan, the Notice and this Option Agreement. Participant has reviewed the Plan, the Notice and this Option Agreement in their entirety, has had an opportunity to obtain the advice of counsel prior to executing the Notice and Agreement, and fully understands all provisions of the Plan, the Notice and this Option Agreement. Participant hereby agrees to accept as binding, conclusive and final all decisions or interpretations of the Committee upon any questions relating to the Plan, the Notice and this Option Agreement. Participant further agrees to notify the Company upon any change in the residence address.
By acceptance of this Option, Participant agrees to participate in the Plan through an on-line or electronic system established and maintained by the Company or a third party designated by the Company and consents to the electronic delivery of the Notice, this Option Agreement, the Plan, account statements, Plan prospectuses required by the SEC, U.S. financial reports of the Company, and all other documents that the Company is required to deliver to its security holders (including, without limitation, annual reports and proxy statements) or other communications or information related to the Option and current or future participation in the Plan. Electronic delivery may include the delivery of a link to the Company intranet or the internet site of a third party involved in administering the Plan, the delivery of the document via e-mail or such other delivery determined at the Company’s discretion. Participant acknowledges that Participant may receive from the Company a paper copy of any documents delivered electronically at no cost if Participant contacts the Company by telephone, through a postal service or electronic mail to Stock Administration. Participant further acknowledges that Participant will be provided with a paper copy of any documents delivered electronically if electronic delivery fails; similarly, Participant understands that Participant must provide on request to the Company or any designated third party a paper copy of any documents delivered electronically if electronic delivery fails. Also, Participant understands that Participant’s consent may be revoked or changed, including any change in the electronic mail address to which documents are delivered (if Participant has provided an electronic
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mail address), at any time by notifying the Company of such revised or revoked consent by telephone, postal service or electronic mail to Stock Administration.
22.Insider Trading Restrictions/Market Abuse Laws. Participant acknowledges that, depending on Participant’s country of residence, the broker’s country, or the country in which the Shares are listed, Participant may be subject to insider trading restrictions and/or market abuse laws in applicable jurisdictions, which may affect Participant’s ability to directly or indirectly, accept, acquire, sell or attempt to sell or otherwise dispose of Shares, or rights to Shares (e.g., Options), or rights linked to the value of Shares, during such times as Participant is considered to have “inside information” regarding the Company (as defined by the laws or regulations in the applicable jurisdiction). Local insider trading laws and regulations may prohibit the cancellation or amendment of orders Participant placed before possessing the inside information. Furthermore, Participant may be prohibited from (i) disclosing the inside information to any third party, including fellow employees (other than on a “need to know” basis) and (ii) “tipping” third parties or causing them to otherwise buy or sell securities. Any restrictions under these laws or regulations are separate from and in addition to any restrictions that may be imposed under the Company’s Insider Trading Policy and 10b5-1 Trading Plan Policy. Participant acknowledges that it is Participant’s responsibility to comply with any applicable restrictions and understands that Participant should consult his or her personal legal advisor on such matters. In addition, Participant acknowledges that he or she read the Company’s Insider Trading Policy, and agrees to comply with such policy, as it may be amended from time to time, whenever Participant acquires or disposes of the Company’s securities.
23.Foreign Asset/Account, Exchange Control and Tax Reporting. Participant may be subject to foreign asset/account, exchange control and/or tax reporting requirements as a result of the acquisition, holding and/or transfer of Shares or cash resulting from his or her participation in the Plan. Participant may be required to report such accounts, assets, the balances therein, the value thereof and/or the transactions related thereto to the applicable authorities in Participant’s country and/or repatriate funds received in connection with the Plan within certain time limits or according to specified procedures. Participant acknowledges that he or she is responsible for ensuring compliance with any applicable foreign asset/account, exchange control and tax reporting requirements and should consult his or her personal legal and tax advisors on such matters.
24.Award Subject to Company Clawback or Recoupment. The Option shall be subject to clawback or recoupment pursuant to any compensation clawback or recoupment policy adopted by the Board or required by law during the term of Participant’s employment or other Service that is applicable to Participant. In addition to any other remedies available under such policy, applicable law may require the cancellation of Participant’s Option (whether vested or unvested) and the recoupment of any gains realized with respect to Participant’s Option.
BY ACCEPTING THIS OPTION, PARTICIPANT AGREES TO ALL OF THE TERMS AND CONDITIONS DESCRIBED ABOVE, IN THE COUNTRY APPENDIX, IN THE NOTICE AND IN THE PLAN.
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APPENDIX B
VOCERA COMMUNICATIONS, INC.
2021 EQUITY INCENTIVE PLAN
GLOBAL PERFORMANCE STOCK OPTION AWARD AGREEMENT
COUNTRY SPECIFIC PROVISIONS FOR EMPLOYEES OUTSIDE THE U.S.
Any capitalized term used in this Country Appendix without definition will have the meaning ascribed to it in the Notice, the Option Agreement or the Plan, as applicable.
Terms and Conditions
This Country Appendix includes additional terms and conditions that govern the Option granted to Participant under the Plan if Participant resides and/or works in one of the countries below. This Country Appendix forms part of the Option Agreement.
If Participant is a citizen or resident of a country other than the one in which Participant is currently residing and/or working, or Participant is considered as such for local law purposes, or Participant transfers Service and/or residency to another country after the Date of Grant, the Company will, in its sole discretion, determine to what extent the additional terms and conditions included herein will apply to Participant under these circumstances.
Notifications
This Country Appendix also includes information relating to exchange control, securities laws, foreign asset/account reporting and other issues of which Participant should be aware with respect to Participant’s participation in the Plan. The information is based on the securities, exchange control, foreign asset/account reporting and other laws in effect in the respective countries as of April 2021. Such laws are complex and change frequently. As a result, Participant should not rely on the information herein as the only source of information relating to the consequences of Participant’s participation in the Plan because the information may be out of date at the time that Participant exercises the Option, sells Shares acquired under the Plan or takes any other action in connection with the Plan.
In addition, the information is general in nature and may not apply to Participant’s particular situation, and the Company is not in a position to assure Participant of any particular result. Accordingly, Participant should seek appropriate professional advice as to how the relevant laws in Participant’s country may apply to Participant’s situation.

Finally, if Participant is a citizen or resident of a country other than the one in which Participant is currently working and/or residing, or Participant is considered as such for local law purposes, or Participant transfers Service and/or residency to another country after the Date of Grant, the information contained herein may not apply to Participant in the same manner.

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EUROPEAN UNION (“EU”) / EUROPEAN ECONOMIC AREA (“EEA”) MEMBER STATES AND THE UNITED KINGDOM

Terms and Conditions

Data Privacy. The following provisions replace Section 11 of the Option Agreement:

(a)Data Collection and Usage. Participant is hereby notified of the collection, processing and use of certain personal information about Participant, including, but not limited to, Participant’s name, home address, telephone number, email address, date of birth, social insurance number, passport or other identification number, salary, nationality, job title, any Shares or directorships held in the Company, details of all awards granted under the Plan or any other entitlement to Shares awarded, canceled, exercised, vested, unvested or outstanding in Participant’s favor (“Data”), in connection with the implementation, administration and management of the Plan. The processing activity is pursuant to the Company’s legitimate business interest of providing the benefits under the Plan to Participant and generally administering employee equity awards granted under the Plan. Participant may opt out of such processing, although this would mean that the Company could not grant awards under the Plan to Participant. For questions about opting out, Participant should contact his or her local human resources representative.
(b)International Data Transfers. The Company is based in the U.S. The EU / EEA member states and the United Kingdom have different data privacy laws and protections than the U.S. The Company provides appropriate safeguards for protecting Data that it receives in the U.S. from its Subsidiaries and Affiliates in the EU / EEA member states and the United Kingdom. The Company’s legal basis for its transfer of Data is its adherence to the EU Standard Contractual Clauses in its data transfer agreements with its Subsidiaries and Affiliates in the EU / EEA member states and the United Kingdom.
(c)Stock Plan Administration Service Providers. The Company will transfer Data to E*TRADE Financial Services, Inc. and E*TRADE Securities LLC (“E*TRADE”), an independent service provider based in the U.S. which is assisting the Company with the implementation, administration and management of the Plan. The Company may select a different service provider or additional service providers and share Data with such other provider serving in a similar manner. Participant may be asked to agree on separate terms and data processing practices with the service provider, with such agreement being a condition to the ability to participate in the Plan. E*TRADE is based in the U.S.  The EU / EEA member states and the United Kingdom have different data privacy laws and protections than the U.S.  By signing below or, in case this information is presented electronically, by clicking the “Accept” or similar button implemented into the relevant webpage or platform, Participant agrees to the transfer of Data to E*TRADE for the exclusive purpose of administering Participant's participation in the Plan. The Company's legal basis for the transfer of Data to E*TRADE is Participant's consent.
(d)Voluntariness and Consequences of Denial or Withdrawal of Consent. Participation in the Plan is voluntary and Participant is providing the consent herein on a purely voluntary basis. If Participant does not consent, or if Participant later seeks to revoke the consent, Participant’s salary from or employment with the Employer will not be affected. The only consequence of refusing or withdrawing consent is that the Company would not be able to grant the Options or other awards under the Plan or administer or maintain such awards.
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(e)Data Retention. The Company will hold and use Data only as long as is necessary to implement, administer and manage Participant’s participation in the Plan, or as required to comply with legal or regulatory obligations, including under tax and security laws.
(f)Data Subject Rights. To the extent provided by law, Participant has the right to (i) request access to or copies of Data the Company processes, (ii) rectify incorrect Data, (iii) delete Data, (iv) restrict the processing of Data, (v) restrict the portability of Data, (vi) lodge complaints with competent authorities in Participant’s country, and/or (vii) receive a list with the names and addresses of any potential recipients of Data. To receive clarification regarding these rights or to exercise these rights, Participant can contact his or her local human resources representative.
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AUSTRALIA

Notifications

Tax Information. The Plan is a plan to which Subdivision 83A-C of the Income Tax Assessment Act 1997 (Cth) applies (subject to conditions in the Act).

Securities Law Information. If Participant acquires Shares under the Plan and subsequently offers to sell the Shares to a person or entity resident in Australia, such offer may be subject to disclosure requirements under Australian law, and Participant should obtain legal advice regarding any applicable disclosure requirements prior to making any such offer.

CANADA

Terms and Conditions

Method of Payment and Tax Withholding. The following provisions supplement Sections 5 and 8(b) of the Option Agreement:

Due to tax considerations in Canada, Participant will not be permitted to pay the Exercise Price of the Option or any Tax-Related Items by surrendering certificates for shares of Company stock that Participant owns (or attesting to the ownership of shares that Participant owns and having such number of shares subtracted from the Exercised Shares to be issued to Participant).

Termination Date. The following provisions replace Section 3(e) of the Option Agreement:

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For purposes of this Option, Participant’s Service will be considered terminated (regardless of the reason for such termination and whether or not later found to be invalid or in breach of employment laws in the jurisdiction where Participant is providing services or the terms of Participant’s employment or service agreement, if any) as of the date that is the earlier of (i) the date Participant’s Service terminates, and (ii) the date Participant receives notice of termination. In either case, the date shall exclude any period during which notice, pay in lieu of notice or related payments or damages are provided or required to be provided under local law. For greater certainty, Participant will not be entitled to any pro-rated vesting or exercisability for that portion of time before the date on which Participant’s right to vest or exercise terminates, nor will Participant be entitled to any compensation for lost vesting or exercisability.

Notwithstanding the foregoing, if applicable employment standards legislation explicitly requires continued vesting and exercisability during a statutory notice period, Participant acknowledges that his or her right to vest in and exercise the Option, if any, will terminate effective as of the last day of Participant’s minimum statutory notice period, but Participant will not earn or be entitled to pro-rata vesting or exercisability if such date falls after the end of Participant’s statutory notice period, nor will Participant be entitled to any compensation for lost vesting or exercisability.

In case of any dispute as to whether and when a termination of Service has occurred, the Committee will have sole discretion to determine whether such termination of Service has occurred and the effective date of such termination.

The following provisions will apply if Participant is a resident of Quebec:

Language Consent. The parties acknowledge that it is their express wish that the Option Agreement, as well as all documents, notices and legal proceedings entered into, given or instituted pursuant hereto or relating directly or indirectly hereto, be drawn up in English.

Consentement Relatif à la Langue. Les parties reconnaissent avoir exigé la rédaction en anglais de cette convention, ainsi que de tous documents exécutés, avis donnés et procédures judiciaries intentées, directement ou indirectement, relativement à ou suite à la présente convention.

Data Privacy. The following provisions supplement Section 11 of the Option Agreement:

Participant hereby authorizes the Company and the Company’s representatives to discuss with and obtain all relevant information from all personnel, professional or not, involved in the administration and operation of the Plan. Participant further authorizes the Company, any Parent or Subsidiary, and any stock plan service provider that may be selected by the Company to assist with the Plan to disclose and discuss the Plan with their respective advisors. Participant further authorizes the Company and any Parent or Subsidiary to record such information and to keep such information in Participant’s employee file.

Notifications

Securities Law Information. Participant is permitted to sell Shares acquired under the Plan through the designated broker appointed under the Plan, if any, provided the resale of Shares acquired under the Plan takes place outside Canada through facilities of a stock exchange on which the Shares are listed. The Shares are currently listed on the New York Stock Exchange under the ticker symbol “VCRA.”

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Foreign Asset/Account Reporting Information. Foreign property, including Shares and rights to receive Shares (e.g., the Option), of a non-Canadian company held by a Canadian resident employee must generally be reported annually on a Form T1135 (Foreign Income Verification Statement), if the total cost of Participant’s foreign assets exceeds C$100,000 at any time during the year. The Options must be reported, generally at nil cost, if the C$100,000 threshold is exceeded because of other foreign property held by Participant. When Shares are acquired, their cost generally is the adjusted cost base (“ACB”) of the Shares, ordinarily equal to the Fair Market Value of the Shares at the time of acquisition, but if Participant owns other Shares of the Company, the ACB may have to be averaged with the ACB of the other Shares. Participant should consult with a personal advisor to ensure compliance with applicable reporting obligations.

INDIA

Terms and Conditions

Method of Payment. The following provisions supplement Section 5 of the Option Agreement:

Due to legal restrictions in India, Participant will not be permitted to pay the Exercise Price by a cashless exercise through irrevocable directions to a securities broker approved by the Company to sell part of the Shares covered by this Option and deliver to the Company from the sale proceeds an amount sufficient to pay the Exercise Price. However, Participant will be permitted to pay the Exercise Price by a cashless exercise through irrevocable directions to a securities broker approved by the Company to sell all of the Shares covered by this Option and deliver to the Company from the sale proceeds an amount sufficient to pay the Exercise Price. The Company reserves the right to allow additional methods of payment depending on the development of local law.

Notifications

Exchange Control Information. Indian residents are required to repatriate to India any proceeds from the sale of Shares acquired under the Plan and any cash dividends within such period of time as will be required under applicable regulations. Participant should obtain a foreign inward remittance certificate (“FIRC”) from the bank where Participant deposits the foreign currency. Participant should maintain the FIRC as evidence of the repatriation of funds in the event the Reserve Bank of India or the Employer requests proof of repatriation.

Foreign Asset/Account Reporting Information. Indian residents are required to declare any foreign bank accounts and any foreign financial assets (including Shares held outside India) in their annual tax return. Participant should consult with personal tax advisor to determine his or her personal reporting obligations.

IRELAND

Notifications

Director Notification Obligation. Directors, shadow directors or secretaries of an Irish Subsidiary or Affiliate, whose interests in the Company represent more than 1% of the Company’s voting share capital, must notify the Irish Subsidiary or Affiliate, as applicable, in writing when (i) receiving or disposing of an interest in the Company (e.g., the Option, Shares, etc.), (ii) becoming aware of the event giving rise to the notification requirement, or (iii) becoming a director or secretary if such an interest exists at the time.
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This notification requirement also applies with respect to the interests of a spouse or minor children of such individuals (whose interests will be attributed to the director, shadow director or secretary).

SINGAPORE

Notifications

Securities Law Information. This Option is being granted pursuant to the “Qualifying Person” exemption under section 273(1)(f) of the Singapore Securities and Futures Act (Chapter 289, 2006 Ed.) (“SFA”). The Plan has not been lodged or registered as a prospectus with the Monetary Authority of Singapore. Participant should note that the Option is subject to section 257 of the SFA, and that Participant will not be able to make any subsequent sale of Shares in Singapore, or any offer of such subsequent sale of the Shares underlying the Option in Singapore, unless such sale or offer is made (i) after six months from the Date of Grant, (ii) pursuant to the exemptions under Part XIII Division (1) Subdivision (4) (other than section 280) of the SFA, or (iii) pursuant to, and in accordance with, the conditions of any other applicable provisions of the SFA.

Director Notification Obligation. If Participant is a director, associate director or shadow director of a Singapore Subsidiary or Affiliate, Participant is subject to certain notification requirements under the Singapore Companies Act, regardless of whether Participant is a Singapore resident or employed in Singapore. Among these requirements is an obligation to notify the Singapore Subsidiary or Affiliate writing of an interest in the Company (e.g., this Option, Shares) or any related companies within two business days of (i) its acquisition or disposal, (ii) any change in a previously disclosed interest, or (iii) becoming a director, if Participant holds such an interest at the time.

UNITED ARAB EMIRATES

Notifications

Securities Law Information. The grant of the Option is available only for select employees of the Company or a Parent, Subsidiary or Affiliate, and is in the nature of providing equity incentives to employees in the United Arab Emirates. The Plan, the Notice and the Option Agreement, and any other Plan materials (collectively, the “Plan Documents”), are intended for distribution only to such eligible employees and must not be delivered to, or relied on, by any other person. Prospective purchasers of securities should conduct their own due diligence.

The Emirates Securities and Commodities Authority has no responsibility for reviewing or verifying any documents in connection with this statement, including the Plan Documents, or any other incidental communication materials distributed in connection with this Option. Further, neither the Ministry of Economy nor the Dubai Department of Economic Development has approved this statement nor taken steps to verify the information set out in it, and has no responsibility for it. Residents of the United Arab Emirates who have any questions regarding the contents of the Plan, the Notice and the Option Agreement should obtain independent professional advice.

UNITED KINGDOM

Terms and Conditions

Taxes. The following provisions supplement Section 8 of the Option Agreement:
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Without limitation to Section 8 of the Option Agreement, Participant agrees that Participant is liable for all Tax-Related Items and hereby covenants to pay all such Tax-Related Items, as and when requested by the Company or, if different, the Employer or by Her Majesty’s Revenue & Customs (“HMRC”) (or any other tax authority or any other relevant authority). Participant also agrees to indemnify and keep indemnified the Company and, if different, the Employer against any Tax-Related Items that they are required to pay or withhold or have paid or will pay to HMRC (or any other tax authority or any other relevant authority) on Participant’s behalf.

Notwithstanding the foregoing, if Participant is a director or executive officer of the Company (within the meaning of Section 13(k) of the Exchange Act), the terms of the immediately foregoing provision will not apply. In such case, if any amount of income tax is not collected from or paid by Participant within 90 days of the end of the U.K. tax year in which an event giving rise to the indemnification described above occurs, the amount of any uncollected income tax may constitute a benefit to Participant on which additional income tax and National Insurance contributions (“NICs”) may be payable. Participant is responsible for reporting and paying any income tax due on this additional benefit directly to HMRC under the self-assessment regime and for paying to the Company and/or the Employer (as appropriate) for value of any employee NICs due on this additional benefit, which the Company and/or the Employer may collect by any of the means referred to in Section 8 of the Option Agreement.

Joint Election. As a condition of participation in the Plan and the vesting and exercisability of the Option, Participant agrees to accept any liability for secondary Class 1 NICs that may be payable by the Company or the Employer (or any successor to the Company or the Employer) in connection with the Option, the receipt of any benefits related to the Option and any event giving rise to Tax-Related Items (the “Employer NICs”). Without prejudice to the foregoing, Participant agrees to execute a joint election with the Company and/or the Employer, the form of such Joint Election being formally approved by HMRC (the “Joint Election”), and any other consent or elections required by the Company or the Employer in respect of the Employer NICs liability. Participant further agrees to execute such other elections as may be required by any successor to the Company and/or the Employer for the purpose of continuing the effectiveness of the Joint Election. The Employer NICs may be collected by the Company and/or the Employer using any of the means referred to in Section 8 of the Option Agreement.

If Participant does not enter into the Joint Election, if approval of the Joint Election has been withdrawn by HMRC, if the Joint Election is revoked by the Company or the Employer (as applicable), or if the Joint Election is jointly revoked by Participant and the Company or the Employer (as applicable), the Company, in its sole discretion and without any liability to the Company or the Employer, may choose not to issue or deliver any Shares or proceeds from the sale of Shares to Participant upon exercise of this Option.
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EXHIBIT 10.07
CHANGE OF CONTROL SEVERANCE AGREEMENT
This Change of Control Severance Agreement (this “Agreement”), dated as of    , (the
“Effective Date”), is made by and between Vocera Communications, Inc., a Delaware corporation (the “Company”), and NAME, an executive officer or other key employee of the Company or one of the Company’s subsidiaries (the “Employee”). [This Agreement supersedes and replaces the Change of
Control Severance Agreement, dated as of    , by and between the Company and Employee.]
RECITALS
WHEREAS, the Company considers it to be in the best interests of the Company and its stockholders to foster the continuous employment of certain key management personnel;
WHEREAS, the Board of Directors of the Company or the Compensation Committee thereof (either, the “Board”) recognizes that, as is the case with many corporations, the possibility of a Change of Control (as defined below) exists and that such possibility, and the uncertainty and questions which it may raise among management, could result in the departure or distraction of management personnel to the detriment of the Company and its stockholders; and
WHEREAS, the Board has determined that appropriate steps should be taken to reinforce and encourage the continued attention and dedication of members of the Company’s management, including the Employee, to their assigned duties and responsibilities without distraction in light of the possibility of a Change of Control.
NOW THEREFORE, in consideration of the premises and the mutual covenants herein contained, the Company and the Employee hereby agree as follows.
ARTICLES
1.    Definitions. The following terms referred to in this Agreement shall have the following meanings.
“Bankruptcy/Insolvency Event” shall mean any proceeding that is brought or filed by or against the Company seeking liquidation, dissolution or similar relief under any bankruptcy, insolvency or similar law now or hereafter in effect, and, in the event of a proceeding filed on an involuntary basis, such proceeding is not dismissed or discharged within ninety (90) days.
“Cause” shall mean, in all cases as determined in the Company’s sole discretion: (i) gross negligence or willful misconduct in the performance of the Employee’s duties to the Company where such gross negligence or willful misconduct has resulted or is likely to result in substantial and material damage to the Company, (ii) failure or inability to perform any assigned duties after written notice from the Company to the Employee of, and a fourteen (14) calendar day opportunity to cure such failure or inability, if, and only if, cure is possible as determined in the Company’s sole discretion, (iii) commission of any act of fraud with respect to the Company or any of its affiliates causing material harm to the business, assets or reputation of the Company or any of its affiliates, (iv) conviction (including any plea of no contest) of a felony or a crime involving moral turpitude, (v) the Employee’s unauthorized use or
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disclosure of the confidential information or trade secrets of the Company or any of its affiliates which use causes material harm to the Company or any of its affiliates or (vi) the Employee’s material breach of any contractual obligation to the Company or any written policy of the Company, which breach is not remedied within fourteen (14) calendar days of written notice.
“Change of Control” means the occurrence of any of the following events after the date hereof:
(i)any “Person” (as such term is used in Sections 13(d) and 14(d) of the United States Securities Exchange Act of 1934, as amended (the “Exchange Act”) becomes the “beneficial owner” (as defined in Rule 13d-3 of the Exchange Act), directly or indirectly, of securities of the Company representing more than fifty percent (50%) of the total voting power represented by the Company’s then-outstanding voting securities; provided, however, that for purposes of this subclause (i) the acquisition of additional securities by any one Person who is considered to own more than fifty percent (50%) of the total voting power of the securities of the Company will not be considered a Change of Control; or
(ii)the consummation of the sale or disposition by the Company of all or substantially all of the Company’s assets; or
(iii)the consummation of a merger or consolidation of the Company with any other corporation, other than a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity or its parent) at least fifty percent (50%) of the total voting power represented by the voting securities of the Company or such surviving entity or its parent outstanding immediately after such merger or consolidation; or
(iv)a change in the effective control of the Company that occurs on the date that a majority of members of the Board is replaced during any twelve (12) month period by members of the Board 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 purpose of this subclause (iv), 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 of Control.
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.
“Compensation Continuation Period” shall mean for the purposes of Section 4, the period of time commencing with the date of the Employee’s Involuntary Termination at any time and
ending with the expiration of [ ] months following the date of the Employee’s Involuntary Termination, and for the purposes of Section 5, the period of time commencing with the date of the Employee’s Involuntary Termination at any time within the period beginning two (2) months before a Change of Control and ending twelve (12) months after a Change of Control, and ending with
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the expiration of [     ] months following the date of the Employee’s Involuntary Termination.
“Good Reason” shall mean the occurrence of any of the following: (i) without the Employee’s express written consent, a material reduction of the Employee’s duties, title or responsibilities relative to the Employee’s duties, title or responsibilities in effect immediately prior to such reduction; (ii) a reduction by the Company of the Employee’s base salary by at least 10% as in effect immediately prior to such reduction (other than as part of an across-the-board, proportional reduction); (iii) a reduction by the Company of the Employee’s target bonus opportunity by at least 10% as in effect immediately prior to such reduction (other than as part of an across-the-board, proportional reduction); (iv) without the Employee’s express written consent, the relocation of the Employee to a facility or a location more than fifty (50) miles from their current facility, which is more than fifty (50) miles from the Employee’s current residence; (v) the Company’s material breach of any contractual obligation to the Employee or any written policy applicable to the Employee, which breach is not remedied within fourteen (14) days of written notice; or (vi) the failure of the Company to obtain the assumption of this Agreement by a successor. Notwithstanding anything else contained herein, in the event of the occurrence of a condition listed above, the Employee must provide written notice to the Company within ninety (90) days of the occurrence of a condition listed above and allow the Company thirty (30) days in which to cure such condition. Additionally, in the event the Company fails to cure the condition within the cure period provided, the Employee must terminate employment with the Company within thirty (30) days of the end of the cure period.
“Involuntary Termination” shall mean a termination of the Employee by the Company without Cause or a resignation by the Employee within ninety (90) days of any event constituting Good Reason [; provided, however, that for the purposes of Section 4, Involuntary Termination shall not mean a resignation by the Employee within ninety (90) days of any event constituting Good Reason].
2.    Term of Agreement. This Agreement shall be in effect for the period commencing on the Effective Date and ending on the thirty-six (36) month anniversary of the Effective Date (the “Original Term”); provided that at the end of the Original Term and for each one-year period thereafter (each year a “Renewal Term”), this Agreement shall be automatically extended for successive additional one-year Renewal Terms unless the Company has provided six (6) months prior notice to the Employee of non-renewal prior to the end of the Original Term or the applicable Renewal Term; and provided further that (i) if a Change of Control shall have occurred during an Original Term or a Renewal Term or (ii) if the Company enters into a definitive agreement during an Original Term or a Renewal Term that would result in a Change of Control (even though still subject to approval by the Company’s stockholders and other conditions and contingencies) and such definitive agreement is not subsequently terminated, this Agreement shall remain in effect for a period of twelve (12) months following the date of the consummation of such Change in Control, and this Agreement shall remain in effect to give effect to its

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provisions. Notwithstanding the forgoing, this Agreement shall terminate immediately upon a Bankruptcy/Insolvency Event.
3.At-Will Employment. The Company and the Employee acknowledge that the Employee’s employment is and shall continue to be at-will, as defined under applicable law.
4.Severance Benefits (except Change of Control Severance Benefits); Non-Solicitation.
(a)    Involuntary Termination. If the Employee’s employment with the Company terminates as a result of an Involuntary Termination (except at any time within the period beginning two (2) months before a Change of Control and ending twelve (12) months after a Change of Control which is addressed by Section 5), then the Employee shall be entitled to receive from the Company the following benefits, contingent upon the Employee’s execution, delivery and non-revocation of a release and waiver of claims satisfactory to the Company (the “Release”) within forty-five (45) days from the Employee’s “separation from service” (within the meaning of Section 409A); provided, however, that in any case where the period during which the Employee has discretion to execute or revoke the Release straddles two taxable years of the Employee, any payments required to be made to the Employee that are conditioned on the Release and are treated as nonqualified deferred compensation for purposes of Section 409A shall be made in the later taxable year.
(i)Cash Severance Payments. Employee shall receive an aggregate amount
(the “Severance Amount”) equal to [[A]     ] times the Employee’s annual base salary in effect
on the date of termination [plus (B) _____ times the greater of (x) the Employee’s annual target bonus amount for the year of termination assuming a one hundred percent (100%) payout on all objectives under the Company’s bonus plan in effect on the date of termination or (y) the Employee’s actual annual bonus paid to the Employee in the most recently completed fiscal year preceding the date of termination], subject to deductions and withholdings. In accordance with to the terms of the Release, the Company shall pay the Severance Amount to the Employee in a lump sum within sixty (60) days from the Employee’s separation from service; provided the Release has been timely executed and delivered to the Company, and not revoked prior to such date.
(ii)Health Benefits Continuation. During the Compensation Continuation Period, through COBRA or otherwise, the Company shall continue to make available to the Employee and Employee’s spouse and dependents covered under any group health plans of the Company on the date of such termination of employment, all group health insurance plans in which Employee or such covered dependents participate on the date of the Employee’s termination at the same cost to the Employee as the Employee paid for such benefits prior to termination of employment.
(iii)Forfeiture upon Breach of Covenants. Notwithstanding any of the foregoing, if the Employee breaches their obligations under paragraph (d) or (e) of this Section 4, from
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and after the date of such breach, (x) the Employee will no longer be entitled to, and the Company will no longer be obligated to pay, any remaining unpaid portion of the Severance Amount and (y) the Employee will no longer be entitled to, and the Company will no longer be obligated to make available to Employee or Employee’s spouse or dependents, any group health insurance plans or any payment in respect of such plans starting as of the date of such breach, as determined in the Company’s sole discretion.
(iv)    Equity Acceleration. As of the termination date, vesting and exercisability of each option, restricted stock award, restricted stock unit or other stock-based award (each, a “Stock Award”) shall be accelerated and the forfeiture provisions and/or Company right of repurchase of each Stock Award shall automatically lapse accordingly with respect to an additional twelve (12) months of vesting commencing from the date of the Employee’s termination of employment; provided that any performance-based vesting criteria shall be treated in accordance with the applicable award agreement or applicable equity plan governing the terms of such award.
(b)Other Termination. If the Employee’s employment with the Company terminates other than as a result of an Involuntary Termination, then the Employee shall not be entitled to receive the Severance Amount or other benefits under this Section 4.
(c)Accrued Wages; Expenses. Without regard to the reason for, or the timing of, Employee’s termination of employment: (i) the Company shall pay the Employee any earned but unpaid base salary due for periods prior to the date of termination and any earned but unpaid bonuses from a prior fiscal year; (ii) following submission of proper expense reports by the Employee, the Company shall reimburse the Employee for all expenses reasonably and necessarily incurred by the Employee in connection with the business of the Company prior to the date of termination. These payments shall be made promptly upon termination and within the period of time mandated by law.
(d)Non-Solicitation. In consideration of the benefits and protections conferred under this Agreement, Employee agrees that for the Non-solicit Period (as defined below), the Employee shall not either directly or indirectly solicit, induce, recruit or encourage any of the Personnel (as defined below) to leave their employment, or take away such Personnel, or attempt to solicit, induce, recruit, encourage or take away such Personnel, either for the Employee or for any other person or entity. “Personnel” means any of the Company’s employees and any former employees who have terminated their employment with the Company within six months of the date of the purported solicitation, in each case excluding the Employee’s administrative assistant. “Non-solicit Period” means the Compensation Continuation Period.
(a)Confidentiality. Employee agrees that they will continue to abide by the confidentiality provisions in the Company’s Employment, Confidential Information and Invention Assignment Agreement, or similar agreement, as executed by the Employee.
5.    Change of Control and Severance Benefits; Non-Solicitation.
(a)    Involuntary Termination Following Change of Control. If the Employee’s employment with the Company terminates as a result of an Involuntary Termination at any time within the period beginning two (2) months before a Change of Control and ending twelve (12) months after a
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Change of Control, then the Employee shall be entitled to receive from the Company the following benefits, contingent upon the Employee’s execution, delivery and non-revocation of the Release within forty-five (45) days from the Employee’s “separation from service” (within the meaning of Section 409A); provided, however, that in any case where the period during which the Employee has discretion to execute or revoke the Release straddles two taxable years of the Employee, any payments required to be made to the Employee that are conditioned on the Release and are treated as nonqualified deferred compensation for purposes of Section 409A shall be made in the later taxable year.
(i)Cash Severance Payments. Employee shall receive a Severance Amount
equal to (A)    times Employee’s annual base salary in effect on the date of termination plus
(B)    times the greater of (x) the Employee’s annual target bonus amount for the year of termination assuming a one hundred percent (100%) payout on all objectives under the Company’s bonus plan in effect on the date of termination or (y) the Employee’s actual annual bonus paid to the Employee in the most recently completed fiscal year preceding the date of termination. These payments will be subject to standard deductions and withholding. In accordance with the terms of the Release, the Company shall pay the Severance Amount to the Employee in a lump sum within sixty (60) days from the Employee’s separation from service; provided the Release has been timely executed and delivered to the Company, and not revoked prior to such date.
(ii)Health Benefits Continuation. During the Compensation Continuation Period, through COBRA or otherwise, the Company shall continue to make available to the Employee and Employee’s spouse and dependents covered under any group health plans of the Company on the date of such termination of employment, all group health insurance plans in which Employee or such covered dependents participate on the date of the Employee’s termination at the same cost to the Employee as the Employee paid for such benefits prior to termination of employment.
(iii)Forfeiture upon Breach of Covenants. Notwithstanding any of the foregoing, if the Employee breaches their obligations under paragraph (e) or (f) of this Section 5, from and after the date of such breach, (x) the Employee will no longer be entitled to, and the Company will no longer be obligated to pay, any remaining unpaid portion of the Severance Amount and (y) the Employee will no longer be entitled to, and the Company will no longer be obligated to make available to Employee or Employee’s spouse or dependents, any group health insurance plans or any payment in respect of such plans starting as of the date of such breach, as determined in the Company’s sole discretion.
(iv)Equity Acceleration. As of the termination date, the vesting and exercisability of each Stock Award shall be automatically accelerated in full and the forfeiture provisions
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and/or Company right of repurchase of each Stock Award shall automatically lapse accordingly; provided that any performance-based vesting criteria shall be treated in accordance with the applicable award agreement or applicable equity plan governing the terms of such award.
(b)Other Termination in Connection with a Change of Control. If the Employee’s employment with the Company terminates other than as a result of an Involuntary Termination at any time within the period beginning two (2) months before a Change of Control and ending twelve (12) months after a Change of Control, then the Employee shall not be entitled to receive the Severance Amount or other benefits under this Section 5.
(c)Termination Apart from a Change of Control. If the Employee’s employment with the Company terminates for any or no reason other than within the period beginning two (2) months before a Change of Control and ending twelve (12) months after a Change of Control, then the Employee shall not be entitled to receive the Severance Amount or other benefits under this Section 5, but may be eligible for those benefits (if any) as set forth in Section 4.
(d)Accrued Wages; Expenses. Without regard to the reason for, or the timing of, Employee’s termination of employment: (i) the Company shall pay the Employee any earned but unpaid base salary due for periods prior to the date of termination and any earned but unpaid bonuses from a prior fiscal year; (ii) following submission of proper expense reports by the Employee, the Company shall reimburse the Employee for all expenses reasonably and necessarily incurred by the Employee in connection with the business of the Company prior to the date of termination. These payments shall be made promptly upon termination and within the period of time mandated by law.
(e)Non-Solicitation. In consideration of the benefits and protections conferred under this Agreement, Employee agrees that for the Non-solicit Period, the Employee shall not either directly or indirectly solicit, induce, recruit or encourage any of the Personnel to leave their employment, or take away such Personnel, or attempt to solicit, induce, recruit, encourage or take away such Personnel, either for the Employee or for any other person or entity.
(f)Confidentiality. Employee agrees that they will continue to abide by the confidentiality provisions in the Company’s Employment, Confidential Information and Invention Assignment Agreement, or similar agreement, as executed by the Employee.
6.No Benefits if Bankruptcy/Insolvency Event. In the event of a Bankruptcy/Insolvency Event, the Employee shall not be entitled to receive any Severance Amount or other benefits under this Agreement, but may be eligible for those benefits (if any) as may then be established under the Company’s then existing severance and benefits plans and policies at the time of such Bankruptcy/Insolvency Event.
7.Limitation on Benefits.
(a)    Notwithstanding anything contained in this Agreement to the contrary, to the extent that the payments and benefits provided under this Agreement and benefits provided to, or for the benefit of, the Employee under any other employer plan or agreement (such payments or benefits are collectively referred to as the “Benefits”) would be subject to the excise tax (the “Excise Tax”)
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imposed under Section 4999 of the Internal Revenue Code of 1986, as amended (the “Code”), the Benefits shall be reduced (but not below zero) if and to the extent that a reduction in the Benefits would result in the Employee retaining a larger amount, on an after-tax basis (taking into account federal, state and local income taxes and the Excise Tax), than if the Employee received all of the Benefits (such reduced amount is hereinafter referred to as the “Limited Benefit Amount”). Unless the Employee shall have given prior written notice specifying a different order to the Company to effectuate the Limited Benefit Amount, the Company shall reduce or eliminate the Benefits, by first reducing or eliminating those payments or benefits which are not payable in cash and then by reducing or eliminating cash payments, in each case in reverse order beginning with payments or benefits which are to be paid the farthest in time from the “Determination” (as defined below), and in each case, by first eliminating amounts that are subject to Section 409A. Any notice given by the Employee pursuant to the preceding sentence shall take precedence over the provisions of any other plan, arrangement or agreement governing the Employee’s rights and entitlements to any benefits or compensation.
(b)A determination as to whether the Benefits shall be reduced to the Limited Benefit Amount pursuant to this Agreement and the amount of such Limited Benefit Amount shall be made by the Company’s independent public accountant or another certified public accounting firm of national reputation designated by the Company (the “Accounting Firm”) at the Company’s expense. The Accounting Firm shall provide its determination (the “Determination”), together with detailed supporting calculations and documentation to the Company and the Employee within five (5) days of the date of termination of the Employee’s employment, if applicable, or such other time as requested by the Company or by the Employee (provided the Employee reasonably believes that any of the Benefits may be subject to the Excise Tax) and if the Accounting Firm determines that no Excise Tax is payable by the Employee with respect to any Benefits, it shall furnish the Employee with an opinion reasonably acceptable to Employee that no Excise Tax will be imposed with respect to any such Benefits. Within ten (10) days of the delivery of the Determination to the Employee, the Employee shall have the right to dispute the Determination (the “Dispute”). If there is no Dispute, the Determination shall be binding, final and conclusive upon the Company and the Employee.
(c)For purposes of this Agreement, a termination of employment will be determined consistent with the rules relating to a “separation from service” as defined in Section 409A of the Code and the regulations thereunder (“Section 409A”). Notwithstanding anything else provided herein, to the extent any payments provided under this Agreement in connection with Employee’s termination of employment constitute deferred compensation subject to Section 409A, and Employee is deemed at the time of such termination of employment to be a “specified employee” under Section 409A, then such payment shall not be made or commence until the earlier of (i) the expiration of the six (6) month period measured from Employee’s separation from service from the Company or (ii) the date of Employee’s death following such a separation from service; provided, however, that such deferral shall only be effected to the extent required to avoid adverse tax treatment to Employee including, without limitation, the additional tax for which Employee would otherwise be liable under Section 409A(a)(1)(B) in the absence of such a deferral. The first payment thereof will include a catch-up payment covering the amount that would have otherwise been paid during the period between Employee’s termination of employment and the first payment date but for the application of this
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provision, and the balance of the installments (if any) will be payable in accordance with their original schedule. To the extent that any provision of this Agreement is ambiguous as to its compliance with Section 409A, the provision will be read in such a manner so that all payments hereunder comply with Section 409A. To the extent any payment under this Agreement may be classified as a “short-term deferral” within the meaning of Section 409A, such payment shall be deemed a short-term deferral, even if it may also qualify for an exemption from Section 409A under another provision of Section 409A. Payments pursuant to this Section are intended to constitute separate payments for purposes of Section 1.409A-2(b)(2) of the Treasury Regulations.
8.    Successors.
(a)Company’s Successors. Any successor to the Company (whether direct or indirect) to all or substantially all of the Company’s business and/or assets shall assume the Company’s obligations under this Agreement and agree expressly to perform the Company’s obligations under this Agreement in the same manner and to the same extent as the Company would be required to perform such obligations in the absence of a succession. For all purposes under this Agreement, the term “Company” shall include any successor to the Company’s business and/or assets.
(b)Employee’s Successors. Without the written consent of the Company, the Employee shall not assign or transfer this Agreement or any right or obligation under this Agreement to any other person or entity. Notwithstanding the foregoing, the terms of this Agreement and all rights of the Employee hereunder shall inure to the benefit of, and be enforceable by, the Employee’s personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees.
9.    Notices.
(a)General. Notices and all other communications contemplated by this Agreement shall be in writing and shall be deemed to have been duly given when personally delivered or when delivered by U.S. registered or certified mail, return receipt requested and postage prepaid or via overnight courier such as Federal Express or UPS or DHL. In the case of the Employee, mailed notices shall be addressed to them at the home address that they most recently communicated to the Company in writing. In the case of the Company, mailed notices shall be addressed to its corporate headquarters, and all notices shall be directed to the attention of its General Counsel.
(b)Notice of Termination. Any termination by the Company or by the Employee shall be communicated by a notice of termination to the other party hereto given in accordance with this Section.
10.    Arbitration. Employee and the Company agree that any dispute or controversy arising out of, relating to, or in connection with this Agreement in any way shall be resolved via arbitration as set forth in the Arbitration Agreement signed by Employee and the Company on DATE.
11.    Miscellaneous Provisions.
(a)    No Duty to Mitigate. The Employee shall not be required to mitigate the amount
of any payment contemplated by this Agreement, nor shall any such payment be reduced by any earnings that the Employee may receive from any other source.
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(b)Waiver. No provision of this Agreement may be modified, waived or discharged unless the modification, waiver or discharge is agreed to in writing and signed by the Employee and by an authorized officer of the Company other than the Employee. No waiver by either party of any breach of, or of compliance with, any condition or provision of this Agreement by the other party shall be considered a waiver of any other condition or provision or of the same condition or provision at another time.
(c)Entire Agreement. This Agreement represents the entire agreement and understanding between the parties as to the subject matter herein and supersedes all prior or contemporaneous agreements, whether written or oral, concerning such subject matter herein, including but not limited to the Change of Control Severance Agreement, dated as of ________, by and between the Company and Employee.
(d)Choice of Law. The validity, interpretation, construction and performance of this Agreement shall be governed by the internal substantive laws, but not the conflicts of law rules, of the State of California.
(e)Severability. The invalidity or unenforceability of any provision or provisions of this Agreement shall not affect the validity or enforceability of any other provision hereof, which shall remain in full force and effect.
(f)Withholding Taxes. All payments made pursuant to this Agreement shall be subject to withholding of applicable income and employment taxes.
(g)Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which together will constitute one and the same instrument.
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IN WITNESS WHEREOF, each of the parties has executed and delivered this Change of Control Severance Agreement, in the case of the Company by its duly authorized officer, as of the day and year first above written.
VOCERA COMMUNICATIONS, INC.
By:    
Brent D. Lang, President & Chief Executive Officer
EMPLOYEE
By:         Employee, Title
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EXHIBIT 31.01

CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO RULE 13a-14(a) OR 15d-14(a) OF
THE SECURITIES EXCHANGE ACT OF 1934, AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Brent D. Lang, certify that:
1. I have reviewed this Quarterly Report on Form 10-Q of Vocera Communications, Inc.:
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Date: August 4, 2021 /s/ Brent D. Lang
Brent D. Lang
Chief Executive Officer



EXHIBIT 31.02

CERTIFICATION OF CHIEF FINANCIAL OFFICER PURSUANT TO RULE 13a-14(a) OR 15d-14(a) OF
THE SECURITIES EXCHANGE ACT OF 1934, AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Steven J. Anheier, certify that:
1. I have reviewed this Quarterly Report on Form 10-Q of Vocera Communications, Inc.:
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Date: August 4, 2021
/s/ Steven J. Anheier
Steven J. Anheier
Executive Vice President and
Chief Financial Officer



EXHIBIT 32.01
CERTIFICATION OF CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER
PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, Brent D. Lang, Chief Executive Officer of Vocera Communications, Inc. (the “Company”), and Steven J. Anheier, Chief Financial Officer of the Company, each hereby certifies that, to his knowledge:
1. The Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2021, to which this Certification is attached as Exhibit 32.01 (the “Periodic Report”), fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934, as amended; and
2. The information contained in the Periodic Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
In Witness Whereof, the undersigned have set their hands hereto as of the 4th day of August 2021.
/s/ Brent D. Lang
/s/ Steven J. Anheier
Brent D. Lang
Steven J. Anheier
Chief Executive Officer
Executive Vice President and
Chief Financial Officer