BOTTOMLINE TECHNOLOGIES INC /DE/ (Form: S-8, Received: 05/12/2014 11:45:13)

Large accelerated filer

Accelerated filer

Non-accelerated filer

¨ (Do not check if a smaller reporting company)

Smaller reporting company

As filed with the Securities and Exchange Commission on May 12, 2014

Registration No. 333-

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM S-8

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

Bottomline Technologies (de), Inc.

(Exact Name of Registrant as Specified in Its Charter)


Delaware		02-0433294
(State or Other Jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification No.)

325 Corporate Drive, Portsmouth, New Hampshire		03801
(Address of Principal Executive Offices)		(Zip Code)

Andera, Inc. 2010 Stock Option/Stock Issuance Plan

(Full Title of the Plan)

Robert A. Eberle

President and Chief Executive Officer

Bottomline Technologies (de), Inc.

325 Corporate Drive

Portsmouth, New Hampshire 03801

(603) 436-0700

(Name, Address, Including Zip Code, and Telephone Number, Including Area Code, of Agent for Service)

Copy to:

David A. Westenberg

Wilmer Cutler Pickering Hale and Dorr LLP

60 State Street

Boston, Massachusetts 02109

Telephone: (617) 526-6000

Telecopy: (617) 526-5000

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b of the Exchange Act.

CALCULATION OF REGISTRATION FEE



Title of Securities to be Registered (1)	Amount to be Registered (2)	Proposed Maximum Offering Price Per Share	Proposed Maximum Aggregate Offering Price	Amount of Registration Fee
Common Stock, $0.001 par value per share	28,462 shares (3)	$6.89 (4)	$196,103.18 (4)	$25.26
Common Stock, $0.001 par value per share	9,482 shares (5)	$30.14 (4)	$285,787.48 (4)	$36.81
Total	37,944 shares			$62.07

(1)

In addition to the number of shares of Bottomline Technologies (de), Inc. (the “Company” or “Registrant”) common stock, par value $0.001 per share (“Common Stock”) stated above, this Registration Statement (the “Registration Statement”) covers an indeterminate number of options and other rights to acquire common stock, to be granted pursuant to the Andera, Inc. 2010 Stock Option/Stock Issuance Plan (the “Plan”).

(2)	In accordance with Rule 416 under the Securities Act of 1933, as amended, this registration statement shall be deemed to cover any additional securities that may from time to time be offered or issued to prevent dilution resulting from stock splits, stock dividends or similar transactions.

(3)

Represents shares subject to issuance upon the exercise of stock options previously granted under the Plan, and assumed by the Registrant on April 3, 2014 pursuant to an Agreement and Plan of Merger by and among the Registrant, Argo Merger Sub Corp., Andera, Inc., the principal stockholders named therein and the Company Equityholder Representative, dated as of March 31, 2014 (the “Merger Agreement”).

(4)

Estimated solely for the purpose of calculating the registration fee in accordance with Rule 457(h) of the Securities Act of 1933, as amended. The price per share and aggregate offering price are calculated on the basis of (a) $6.89, the weighted average exercise price of the 28,462 shares subject to outstanding stock option grants under the Plan, at prices ranging from $6.51 to $7.51, and (b) the average of the high and low sale prices of the Registrant’s Common Stock on The Nasdaq Global Market on May 8, 2014, in accordance with Rule 457(c) under the Securities Act of 1933, as amended, for the 9,482 shares issuable under the Plan which are not subject to outstanding options.

(5)	Represents shares subject to issuance but not yet issued under the Plan, and assumed by the Registrant on April 3, 2014 pursuant to the Merger Agreement.

EXPLANATORY NOTE

On March 31, 2014, Bottomline Technologies (de), Inc. (the “Registrant”), Argo Merger Sub Corp., a wholly-owned subsidiary of the Registrant (“Merger Sub”), Andera, Inc., which was subsequently converted to a limited liability company named Andera, LLC (“Andera”), the principal stockholders named in the Merger Agreement and Shareholder Representative Services LLC, as the Company Equityholder Representative, entered into the Merger Agreement, pursuant to which, among other things, Merger Sub was merged with and into Andera, with Andera surviving as a wholly-owned subsidiary of the Registrant (the “Merger”). In connection with the Merger, the Registrant assumed the Plan and certain options to acquire Andera common stock under the Plan, outstanding as of the effective time of the Merger (the “Effective Time”), which were converted on April 3, 2014 at the Effective Time into options to purchase shares of Registrant Common Stock. This Registration Statement on Form S–8 registers the aggregate number of shares of Registrant Common Stock that may be issued pursuant to such assumed options and from the remaining shares within the Plan.

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PART I

INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS

Item 1. Plan Information.

The information required by Item 1 is included in documents sent or given to participants in the Plan covered by this registration statement pursuant to Rule 428(b)(1) of the Securities Act of 1933, as amended (the “Securities Act”).

Item 2. Registrant Information and Employee Plan Annual Information.

The written statement required by Item 2 is included in documents sent or given to participants in the Plan covered by this registration statement pursuant to Rule 428(b)(1) of the Securities Act.

PART II

INFORMATION REQUIRED IN THE REGISTRATION STATEMENT

Item 3. Incorporation of Documents by Reference.

The Registrant is subject to the informational and reporting requirements of Sections 13(a), 14, and 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and in accordance therewith files reports, proxy statements and other information with the Securities and Exchange Commission (the “Commission”). The following documents, which are on file with the Commission, are incorporated in this registration statement by reference:

(a) The Registrant’s latest annual report filed pursuant to Section 13(a) or 15(d) of the Exchange Act or the latest prospectus filed pursuant to Rule 424(b) under the Securities Act that contains audited financial statements for the Registrant’s latest fiscal year for which such statements have been filed.

(b) All other reports filed pursuant to Section 13(a) or 15(d) of the Exchange Act since the end of the fiscal year covered by the document referred to in (a) above.

(c) The description of the securities contained in the Registrant’s registration statement on Form 8-A dated January 12, 1999 and filed under the Exchange Act, including any amendment or report filed for the purpose of updating such description.

All documents subsequently filed by the Registrant pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act, prior to the filing of a post-effective amendment which indicates that all securities offered hereby have been sold or which deregisters all securities then remaining unsold, shall be deemed to be incorporated by reference in this registration statement and to be part hereof from the date of the filing of such documents. Any statement contained in a document incorporated or deemed to be incorporated by reference herein shall be deemed to be modified or superseded for the purposes of this registration statement to the extent that a statement contained herein or in any other subsequently filed document which also is or is deemed to be incorporated by reference herein modifies or supersedes such statement. Any statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this registration statement.

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Item 4. Description of Securities.

Not applicable.

Item 5. Interests of Named Experts and Counsel.

Wilmer Cutler Pickering Hale and Dorr LLP (“WilmerHale”) has opined as to the legality of the securities being offered by this registration statement.

Item 6. Indemnification of Directors and Officers.

Section 145 of the General Corporation Law of the state of Delaware (“DGCL”) provides, generally, that a corporation shall have the power to indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding (except actions by or in the right of the corporation) by reason of the fact that such person is or was a director, officer, employee or agent of the corporation against all expenses, judgments, fines and amounts paid in settlement actually and reasonably incurred by such person in connection with such action, suit or proceeding if such person acted in good faith and in a manner such person reasonably believed to be in or not opposed to the best interests of the corporation and, with respect to any criminal action or proceeding, had no reasonable cause to believe his or her conduct was unlawful. A corporation may similarly indemnify such person for expenses actually and reasonably incurred by such person in connection with the defense or settlement of any action or suit by or in the right of the corporation, provided that such person acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the best interests of the corporation, and, in the case of claims, issues and matters as to which such person shall have been adjudged liable to the corporation, provided that a court shall have determined, upon application, that, despite the adjudication of liability but in view of all of the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which such court shall deem proper.

Section 102(b)(7) of the DGCL provides, generally, that the certificate of incorporation may contain a provision eliminating or limiting the personal liability of a director to the corporation or its shareholders for monetary damages for breach of fiduciary duty as a director, provided that such provision may not eliminate or limit the liability of a director (i) for any breach of the director’s duty of loyalty to the corporation or its shareholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) under section 174 of the DGCL, or (iv) for any transaction from which the director derived an improper personal benefit. No such provision may eliminate or limit the liability of a director for any act or omission occurring prior to the date when such provision became effective.

Article EIGHTH of the Registrant’s Amended and Restated Certificate of Incorporation (the “Restated Certificate of Incorporation”) provides that no director of the Registrant shall be personally liable for any monetary damages for any breach of fiduciary duty as a director, except to the extent that the DGCL prohibits the elimination or limitation of liability of directors for breach of fiduciary duty.

Article NINTH of the Restated Certificate of Incorporation provides that a director or officer of the Registrant (a) shall be indemnified by the Registrant against all expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement incurred in connection with any litigation or other legal proceeding (other than an action by or in the right of the Registrant) brought against him by virtue of his position as a director or officer of the Registrant if he acted in good faith and in a manner he reasonably believed to be in, or not opposed to, the best interests of the Registrant, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful and (b) shall be

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indemnified by the Registrant against all expenses (including attorneys’ fees) and amounts paid in settlement incurred in connection with any action by or in the right of the Registrant brought against him by virtue of his position as a director or officer of the Registrant if he acted in good faith and in a manner he reasonably believed to be in, or not opposed to, the best interests of the Registrant, except that no indemnification shall be made with respect to any matter as to which such person shall have been adjudged to be liable to the Registrant, unless a court determines that, despite such adjudication but in view of all of the circumstances, he is entitled to indemnification of such expenses. Notwithstanding the foregoing, to the extent that a director or officer has been successful, on the merits or otherwise, including, without limitation, the dismissal of an action without prejudice, he is required to be indemnified by the Registrant against all expenses (including attorneys’ fees) incurred in connection therewith. Expenses shall be advanced to a director or officer at his request, provided that he undertakes to repay the amount advanced if it is ultimately determined that he is not entitled to indemnification for such expenses.

Indemnification is required to be made unless the Registrant determines that the applicable standard of conduct required for indemnification has not been met. In the event of a determination by the Registrant that the director or officer did not meet the applicable standard of conduct required for indemnification, or if the Registrant fails to make an indemnification payment within 60 days after such payment is claimed by such person, such person is permitted to petition the court to make an independent determination as to whether such person is entitled to indemnification. As a condition precedent to the right of indemnification, the director or officer must give the Registrant notice of the action for which indemnity is sought and the Registrant has the right to participate in such action or assume the defense thereof.

Article NINTH of the Restated Certificate of Incorporation further provides that the indemnification provided therein is not exclusive, and provides that in the event that the DGCL is amended to expand the indemnification permitted to directors or officers the Registrant must indemnify those persons to the fullest extent permitted by such law as so amended.

The Registrant has purchased directors’ and officers’ liability insurance which would indemnify its directors and officers against damages arising out of certain kinds of claims which might be made against them based on their negligent acts or omissions while acting in their capacity as such.

Item 7. Exemption from Registration Claimed.

Not applicable.

Item 8. Exhibits.

The Exhibit Index immediately preceding the exhibits is incorporated herein by reference.

Item 9. Undertakings.

1. Item 512(a) of Regulation S-K . The undersigned Registrant hereby undertakes:

(1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:

(i) To include any prospectus required by Section 10(a)(3) of the Securities Act;

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(ii) To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement; and

(iii) To include any material information with respect to the Plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement;

provided, however , that paragraphs (i) and (ii) do not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in reports filed with or furnished to the Commission by the Registrant pursuant to Section 13 or Section 15(d) of the Exchange Act that are incorporated by reference in the registration statement.

(2) That, for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

(3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.

2. Item 512(b) of Regulation S-K . The undersigned Registrant hereby undertakes that, for purposes of determining any liability under the Securities Act, each filing of the Registrant’s annual report pursuant to Section 13(a) or Section 15(d) of the Exchange Act that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

3. Item 512(h) of Regulation S-K . Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.

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SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the Registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-8 and has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the Town of Portsmouth, State of New Hampshire, on this 12 ^th day of May, 2014.


BOTTOMLINE TECHNOLOGIES (de), INC.

By:		/s/ Kevin M. Donovan
		Kevin M. Donovan
		Chief Financial Officer and Treasurer

POWER OF ATTORNEY AND SIGNATURES

We, the undersigned officers and directors of Bottomline Technologies (de), Inc., hereby severally constitute and appoint Joseph L. Mullen, Robert A. Eberle and Kevin M. Donovan, and each of them singly, our true and lawful attorneys with full power to them, and each of them singly, to sign for us and in our names in the capacities indicated below, the registration statement on Form S-8 filed herewith and any and all subsequent amendments to said registration statement, and generally to do all such things in our names and on our behalf in our capacities as officers and directors to enable Bottomline Technologies (de), Inc. to comply with the provisions of the Securities Act of 1933, as amended, and all requirements of the Securities and Exchange Commission, hereby ratifying and confirming our signatures as they may be signed by our said attorneys, or any of them, to said registration statement and any and all amendments thereto.

Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the dates indicated.


Signature	Title	Date

/s/ Robert A. Eberle Robert A. Eberle	President, Chief Executive Officer and Director (Principal Executive Officer)	May 12, 2014

/s/ Kevin M. Donovan Kevin M. Donovan	Chief Financial Officer and Treasurer (Principal Financial and Accounting Officer)	May 12, 2014

/s/ Joseph L. Mullen Joseph L. Mullen	Chairman of the Board	May 12, 2014

/s/ Joseph L. Barry, Jr. Joseph L. Barry, Jr.	Director	May 12, 2014

/s/ Michael J. Curran Michael J. Curran	Director	May 12, 2014

/s/ Jennifer M. Gray Jennifer M. Gray	Director	May 12, 2014

/s/ Jeffrey C. Leathe Jeffrey C. Leathe	Director	May 12, 2014

/s/ James L. Loomis James L. Loomis	Director	May 12, 2014

/s/ Daniel M. McGurl Daniel M. McGurl	Director	May 12, 2014

/s/ James W. Zilinski James W. Zilinski	Director	May 12, 2014

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INDEX TO EXHIBITS


Number		Description

4.1(1)		Amended and Restated Certificate of Incorporation of the Registrant

4.2(2)		Amended and Restated By-Laws of the Registrant

5		Opinion of Wilmer Cutler Pickering Hale and Dorr LLP, counsel to the Registrant

23.1		Consent of Wilmer Cutler Pickering Hale and Dorr LLP (included in Exhibit 5)

23.2		Consent of Ernst & Young LLP, independent registered public accounting firm

24		Power of attorney (included on the signature pages of this registration statement)

99.1		Andera, Inc. 2010 Stock Option/Stock Issuance Plan

(1)	Previously filed with the Securities and Exchange Commission as an Exhibit to the Registrant’s Current Report on Form 8-K filed January 18, 2013 (File No. 000-25259) and incorporated herein by reference.

(2)	Previously filed with the Securities and Exchange Commission as an Exhibit to the Registrant’s Annual Report on Form 10-K for the year ended June 30, 2007 (File No. 000-25259) and incorporated herein by reference.

Exhibit 5

+1 617 526 6000 (t)

+1 617 526 5000 (f)

Wilmerhale.com

May 12, 2014

Bottomline Technologies (de), Inc.

325 Corporate Drive

Portsmouth, New Hampshire 03801

Re:

Andera, Inc. 2010 Stock Option/Stock Issuance Plan

Ladies and Gentlemen:

We have assisted in the preparation of a Registration Statement on Form S-8 (the “Registration Statement”) to be filed with the Securities and Exchange Commission (the “Commission”) under the Securities Act of 1933, as amended (the “Securities Act”), relating to an aggregate of 37,944 shares of common stock, $0.001 par value per share (the “Shares”), of Bottomline Technologies, a Delaware corporation (the “Company”), issuable upon exercise of options granted under the Andera, Inc. 2010 Stock Option/Stock Issuance Plan (the “Plan”). The options issued and shares issuable under the Plan were assumed by the Company pursuant to the terms of that certain Agreement and Plan of Merger, dated as of March 31, 2014, by and among the Company, Argo Merger Sub Corp., a wholly-owned subsidiary of the Company, Andera, Inc., as predecessor to Andera, LLC, the principal stockholders named therein and Shareholder Representative Services LLC, as company equityholder representative.

We have examined the Certificate of Incorporation and By-Laws of the Company, each as amended and restated to date, and originals, or copies certified to our satisfaction, of all pertinent records of the meetings of the directors and stockholders of the Company, the Registration Statement and such other documents relating to the Company as we have deemed material for the purposes of this opinion.

In our examination of the foregoing documents, we have assumed the genuineness of all signatures, the authenticity of all documents submitted to us as originals, the conformity to original documents of all documents submitted to us as certified, photostatic or other copies, the authenticity of the originals of any such documents and the legal competence of all signatories to such documents.

We assume that the appropriate action will be taken, prior to the offer and sale of the Shares in accordance with the Plan, to register and qualify the Shares for sale under all applicable state securities or “blue sky” laws.

We express no opinion herein as to the laws of any state or jurisdiction other than the General Corporation Law of the State of Delaware and the federal laws of the United States of America.

LOGO

It is understood that this opinion is to be used only in connection with the offer and sale of the Shares while the Registration Statement is in effect.

Please note that we are opining only as to the matters expressly set forth herein, and no opinion should be inferred as to any other matters.

Based on the foregoing, we are of the opinion that the Shares have been duly authorized for issuance and, when the Shares are issued and paid for in accordance with the terms and conditions of the Plan, the Shares will be validly issued, fully paid and nonassessable.

We hereby consent to the filing of this opinion with the Commission in connection with the Registration Statement in accordance with the requirements of Item 601(b)(5) of Regulation S-K under the Securities Act. In giving such consent, we do not hereby admit that we are in the category of persons whose consent is required under Section 7 of the Securities Act or the rules and regulations of the Commission.


Very truly yours,

WILMER CUTLER PICKERING HALE AND DORR LLP

By:		/s/ David Westenberg
		David Westenberg, Partner

Exhibit 23.2

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the incorporation by reference in the Registration Statement (Form S-8) pertaining to the Andera, Inc. 2010 Stock Option/Stock Issuance Plan of our reports dated August 29, 2013, with respect to the consolidated financial statements and schedule of Bottomline Technologies (de), Inc., and the effectiveness of internal control over financial reporting of Bottomline Technologies (de), Inc., included in its Annual Report (Form 10-K) for the year ended June 30, 2013, filed with the Securities and Exchange Commission.

/s/ Ernst & Young LLP

Boston, Massachusetts

May 12, 2014

Exhibit 99.1

ANDERA, INC.

2010 STOCK OPTION/STOCK ISSUANCE PLAN

(as amended January 5, 2011 and December 20, 2012)

1. PURPOSE; AWARDS PERMITTED.

This 2010 Stock Option/Stock Issuance Plan (the “Plan”) is intended to promote the interests of Andera, Inc. (the “Company”) by giving incentives to the eligible officers and other employees and directors of and consultants and advisors to the Company and its Related Companies, through providing opportunities to acquire stock in the Company.

The Plan permits the grants of Options to purchase shares of Common Stock, pursuant to either ISOs or Non-Qualified Options; and awards of Restricted Stock. Certain capitalized terms have the meanings given them in Section 18.

2. STOCK AVAILABLE FOR AWARDS.

The stock subject to Awards shall be authorized but unissued shares of Common Stock, or shares of Common Stock reacquired by the Company in any manner. The aggregate number of shares which may be issued under the Plan is 199,293, subject to adjustment as provided in Section 13 (the “Aggregate Limit”). If any Option granted under the Plan shall expire or terminate for any reason without having been exercised in full or shall cease for any reason to be exercisable in whole or in part, or if the Company shall reacquire any Unvested shares issued pursuant to Awards, the unpurchased shares subject to such Option, or such Unvested shares so reacquired shall again be available for grants of Awards under the Plan.

This Plan is a successor to the Company’s 2000 Stock Incentive Plan (as amended) (the “Previous Plan”). All outstanding stock awards granted under the Previous Plan shall remain subject to the terms of the Previous Plan, but no further option grants will be made under the Previous Plan, and the remaining shares available for issuance under the Previous Plan have been transferred to this Plan and are available for issuance under this Plan. The Aggregate Limit has been calculated to include all options granted under the Previous Plan as well as under this Plan. Accordingly, as an additional restriction, in no event shall the number of shares subject to all Awards under the Plan at the time of the grant of, and including the shares subject to, any Award exceed the Aggregate Limit (a) less (i) the number of shares subject to options granted pursuant to the Previous Plan and (ii) without duplication of any shares described in the foregoing clause (i), the number of shares previously issued pursuant to the exercise of any option granted, or award or purchase under the Previous Plan, (b) plus the number of shares originally issued pursuant to the exercise of any option granted, or award or purchase under the Previous Plan or this Plan that are repurchased by the Company pursuant to contractual rights held by the Company and at repurchase prices not exceeding the respective original purchase prices (or fair market value of such shares as approved by the Board) paid by such persons to the Company. If any option granted under the Plan or under the Previous Plan shall expire or terminate for any reason without having been exercised in full or shall cease for any reason to be exercisable in whole or in part, the unpurchased shares subject to such Option or option shall again be available for grants of Awards under the Plan, but only up to the Aggregate Limit specified in the

preceding paragraph. For avoidance of doubt, nothing in this paragraph (or otherwise in this Plan) permits the issuance of Award in excess of the Aggregate Limit (as adjusted as provided in Section 13).

3. ADMINISTRATION.

(a) Administration by Board of Directors or Committee .

(i) Multiple Administrative Bodies . The Plan will be administered by the Board; provided, if permitted by Rule 16b-3, as in effect at the time that discretion is being exercised with respect to the Plan, and by the legal requirements of the Applicable Laws relating to the administration of stock plans such as the Plan, if any, the Plan may (but need not) be administered by different administrative bodies with respect to (A) Directors who are not employees, (B) Directors who are employees, (C) officers who are not Directors, (D) officers who are not employees and (E) employees who are neither Directors nor officers. The Board may authorize one or more officers to grant Awards subject to such limitations as the Board determines from time to time.

(ii) Section 162(m) . To the extent that the Board determines it to be desirable to qualify Options granted hereunder as “performance-based compensation” within the meaning of Section 162(m) of the Code, the Plan shall be administered by a Committee of two or more “outside directors” within the meaning of Section 162(m) of the Code.

(iii) Rule 16b-3 . To the extent desirable to qualify transactions hereunder as exempt under Rule 16b-3, the transactions contemplated hereunder shall be structured to satisfy the requirements for exemption under Rule 16b-3.

(iv) Other Administration . Other than as provided above, the Plan shall be administered by (A) the Board or (B) a Committee, which committee shall be constituted to satisfy Applicable Laws.

(v) Decisions Final . All decisions by the Board shall be final and binding and conclusive on all interested persons. Neither the Company nor any member of the Board shall be liable for any action or determination relating to the Plan.

(b) Express Grants of Authority .

Without limiting the power of the Board hereunder, the Board shall expressly have the authority:

(i) to grant and amend Awards, to adopt, amend and repeal rules relating to the Plan and to interpret and correct the provisions of the Plan and any Award;

(ii) to determine the Fair Market Value;

(iii) to amend the terms of any and all outstanding Options to provide an Exercise Price per share which is higher or lower than the then-current Exercise Price per share of such outstanding Options;

(iv) to accelerate the date or dates on which all or any particular Option or Options granted under the Plan may be exercised;

(v) to extend the dates during which all, or any particular, Option or Options granted under the Plan may be exercised;

(vi) to provide that any Restricted Stock shall be free of some or all restrictions;

(vii) to provide that any other stock-based Awards may become exercisable in full or in part or free of some or all restrictions or conditions, or otherwise realizable in full or in part, as the case may be;

(viii) in the event of the acceleration of the exercisability of one or more outstanding Options, to provide, as a condition of full exercisability of any or all such Options, that the Common Stock or other substituted consideration, including cash, as to which exercisability has been accelerated shall be Restricted Stock and subject to forfeiture and return to the Company at the option of the Company at the cost thereof upon Separation, with the timing and other terms of the vesting of such Restricted Stock or other consideration being equivalent to the timing and other terms of the superseded exercise schedule of the related Option;

(ix) to determine (A) whether or not a Recipient has a Business Relationship with the Company, (B) whether Continuous Employment or Continuous Service shall be considered interrupted in the case of any approved leave of absence, including sick leave, military leave or any other personal leave, or (C) whether a Separation has occurred, and the resulting Separation Date, which determination shall be made by the Board in its sole discretion (it being understood that the Board may, but need not, take into account the provisions of Regulation 1.409A-1(h)), and shall not be subject to challenge or review by the Recipient for any reason. Without limiting the foregoing, such determination may be made prospectively (i.e. in connection with a proposed Separation) even if at the time of such determination such Recipient continues to assert the right to, or has some continuing relationship with the Company. Further, if the Recipient is at such time a member of the Board, the Recipient shall not participate in such determination, and the determination of the remaining members of the Board, even if not a quorum, shall be binding;

(x) to take any action under the Plan on a case-by case basis, on the same basis or on different bases (treating differently each tranche, Award or individual or group or combination thereof) as the Board may determine; and

(xi) to make any adjustments or other decision under Section 13 (or otherwise), whose determination as to what adjustments or decisions, if any, will be made and the extent thereof shall be final, binding and conclusive.

The Board may do any of the foregoing at any time and from time to time, despite the fact that the foregoing actions may (x) cause the application of Sections 280G and 4999 of the Code if a change in control of the Company occurs, or (y) disqualify all or part of the Option as an Incentive Stock Option, or (z) cause the application of Section 409A of the Code. In addition,

the Board may with the consent of the affected Recipient cause the cancellation of any or all outstanding Options and the grant in substitution therefor of new Options covering the same or different shares of Common Stock and having an Exercise Price per share which may be lower or higher than the Exercise Price per share of the canceled Options. The Board may do any of the foregoing at any time and from time to time, after consideration of such factors as the Board considers relevant (which may include any financial accounting consequences to the Company, e.g., under APB Opinion No. 25 FIN 44, FAS 123R or similar types of accounting requirements and guidance affecting the proper administration of the Plan).

Notwithstanding anything in the Plan to the contrary, with respect to any Recipient who is resident outside of the United States, the Board may, in its sole discretion, amend the terms of the Plan in order to conform such terms with the requirements of local law or to meet the objectives of the Plan. The Board may, where appropriate, establish one or more sub-plans for this purpose.

(d) Indemnification.

In addition to such other rights of indemnification as they may have as members of the Board or as officers or employees of the Company or a Related Company, members of the Board and any officers or employees of the Company or a Related Company to whom authority to act for the Board or the Company is delegated shall be defended and indemnified by the Company to the extent permitted by law on an after-tax basis against all reasonable expenses (including attorneys’ fees), actually and necessarily incurred in connection with the defense of any claim, investigation, action, suit or proceeding, or in connection with any appeal therein, to which they or any of them may be a party by reason of any action taken or failure to act under or in connection with the Plan, or any Award granted hereunder, and against all amounts paid by them in settlement thereof (provided such settlement is approved by the Company) or paid by them in satisfaction of a judgment in any such claim, investigation, action, suit or proceeding, except in relation to matters as to which it shall be adjudged in such claim, investigation, action, suit or proceeding that such person is liable for gross negligence, bad faith or intentional misconduct; provided, however, that within 30 days after the institution of such claim, investigation, action, suit or proceeding, such person shall offer to the Company, in writing, the opportunity at the Company’s expense to handle and defend the same.

(e) Responsibility of Recipient.

Notwithstanding anything to the contrary contained in the Plan or in any Award Agreement, neither the Company nor any Related Company nor any officer, director, employee or agent of any of them makes any representations to any Recipient relating to the tax treatment of any Award, including without limitation (i) that any Award designated under the Plan as an ISO satisfies the requirements to be an ISO, (ii) that any particular disposition transaction with respect to any Award will satisfy the criteria for ISO treatment; or (iii) that any Award made under the Plan will be exempt from the requirements of Section 409A of the Code or otherwise comply with those requirements, Each Recipient shall be solely responsible for any taxes, penalties or other amounts which may become payable with respect to his or her Awards by reason of the Code.

4. ELIGIBLE RECIPIENTS.

ISOs may be granted to any employee of the Company or of any Related Company. No person who is not such an employee may be granted an ISO. Non-Qualified Options and Restricted Stock may be granted to any employee, officer or Director of, or consultant or advisor to the Company or any Related Company. The granting of any Award to any person shall neither entitle that person to, nor disqualify that person from, participation in any other grant of Awards.

5. AWARD AGREEMENTS.

As a condition to the grant of an Award, each recipient of an Award shall execute an Award Agreement in such form not inconsistent with the Plan as the Board shall approve. In addition, the Recipients of Restricted Stock shall pay to the Company in the manner designated by the Board the applicable Original Issue Price for each share acquired. Award Agreements may differ among Recipients. The Board may, in its sole discretion, include provisions in Award Agreements not inconsistent with any provision of the Plan, including without limitation the effect of the Separation or the death or disability of the Recipient in the period during which an Option can be exercised; restrictions on transfer; repurchase rights; commitments to pay cash bonuses, to make, arrange for or guarantee loans or to transfer other property to recipients upon exercise of Options; a requirement that a Recipient must execute a Shareholder Agreement or other undertaking relating to shares received upon exercise of an Option; or such other provisions as shall be determined by the Board.

6. OPTION EXERCISE PRICE/ORIGINAL ISSUANCE PRICE OF RESTRICTED STOCK.

(a) Exercise/Original Issue Price.

Subject to Sections 6(b), 6(c) and 11(b), the Exercise Price for each Option and the Original Issue Price for Restricted Stock shall be determined by the Board.

(b) Minimum Exercise Price.

The Exercise Price for each Option shall not be less than the Fair Market Value at the time of grant, subject to the additional restrictions on Exercise Price set forth in Section 11(b) in the case of ISOs.

The Original Issue Price for Restricted Stock shall in no event be less than the par value of the Common Stock.

(d) Default Exercise Price/Original Issue Price.

In the absence of a provision in the applicable Award Agreement expressly addressing the Exercise Price or Original Issue Price of an Award, such Exercise Price or Original Issue Price shall be the Fair Market Value on the date of grant, or such greater minimum Exercise Price if required as set forth in Section 11(b) in the case of ISOs.

7. OPTION EXERCISE PERIOD.

(a) Exercise Period.

Each Option and all rights thereunder shall expire on the Expiration Date set forth in the applicable Award Agreement, subject to earlier termination upon the conditions set forth in the applicable Award Agreement (or if not so set forth, as specified in this Section 7).

(b) Default Exercise Period.

In the absence of a provision in the applicable Award Agreement expressly addressing the term of any Option, except as otherwise provided in Section 11(d), the Option shall be for a term of ten (10) years from the date of grant (subject to earlier termination under the conditions specified in this Section).

Subject to clause (e) below, in the absence of a provision in the applicable Award Agreement expressly addressing the exercise rights of any Option following Separation, the Option (whether ISO or Non-Qualified Option) shall be exercisable after the Separation Date only for the following time period, and only with respect to that number of shares which were Vested as of the Separation Date:

(i) If the Separation is for Cause, the right to exercise the Option shall terminate on the Separation Date.

(ii) If the Recipient dies during the course of the Recipient’s Business Relationship, or (unless the Separation was for Cause) within three (3) months after the Separation Date, the Option may be exercised by the person to whom it is transferred by will or the laws of descent and distribution within the period of one (1) year after the date of death (or within such lesser period as may be specified in the Award Agreement) but not thereafter.

(iii) If the Recipient becomes disabled (within the meaning of Section 22(e)(3) of the Code) during the course of the Recipient’s Business Relationship, the Option may be exercised within the period of one (1) year after the Separation Date resulting from such disability (or within such lesser period as may be specified in the Award Agreement) but not thereafter.

(iv) If the provisions of (i)-(iii) above do not apply, the Option may be exercised within the period of three (3) months after the Separation Date, but not thereafter.

(d) Minimum Post-Separation Exercise Period for Options.

Subject to clause (e) below, no Award Agreement shall reduce the time period for the exercise of any Option following any Separation (other than a Separation for Cause) to less than the following time period:

(i) six (6) months from the date of Separation if Separation was caused by the Recipient’s death or “permanent total disability” (within the meaning of Section 22(e)(3) of the Code), or

(ii) thirty (30) days from the date of Separation, if Separation was caused other than by such Recipient’s death or “permanent total disability” (within the meaning of Section 22(e)(3) of the Code).

(e) Maximum Exercise Period.

Notwithstanding anything to the contrary in the Plan or in any Award Agreement, no Option shall be exercisable more than ten (10) years from the date of grant.

8. VESTING; REPURCHASE OF SHARES.

(a) Vesting.

Award Agreements for Awards may provide that such Awards are subject to vesting, setting forth dates and amounts of Vested shares as of each date under the Award. All shares under an Award that are not Vested shares are “Unvested” shares. For the purpose of the foregoing, “Vested” shares of an unexercised Option refers to those shares with respect to which the Recipient has the right, at such time to exercise the Option and acquire such shares; “Unvested” shares of an unexercised Option refers to the remaining shares subject to such Option; “Vested” and “Unvested” shares of Restricted Stock refer to shares which are subject to potentially differing treatment upon exercise of the repurchase right specified in Section 8(e).

(b) Default Conditions for Vesting.

In the absence of a provision in the applicable Award Agreement expressly specifying other conditions for vesting, vesting on a specified “vesting date” shall be conditional upon Continuous Service through such date.

In the absence of a provision in the applicable Award Agreement expressly addressing the timing of vesting of an Award, the Award shall Vest annually on the anniversary of the grant date in equal installments over a period of three (3) years from the grant date.

(d) Exercise of Vested Options.

Except as otherwise provided in the Award Agreement, an Option may be exercised by the Recipient, in whole or in part, with respect to all Vested shares at any time prior to the Expiration Date or the earlier termination of the Option, upon compliance with the conditions to exercise in Section 9.

(e) Repurchase Right.

Except as otherwise specified in the Award Agreement, upon Separation, the Company, at its sole election, may repurchase and Recipient shall be obligated to sell all shares acquired under this Plan (including either as Restricted Stock or through exercise of Options): (i) all of the Unvested shares at the Original Issue Price, and (ii) all of the Vested shares at the higher of (x) the Original Issue Price or (y) the Fair Market Value as of the Separation Date. Except as otherwise specified in the Award Agreement, the Company may elect to give Recipient a written notice within three (3) months following the Separation Date (or, in the case of shares acquired by the Recipient under this Plan following the Separation Date, three (3) months following such acquisition) specifying that it does not desire to purchase any shares, or specifying the number of Unvested shares and the number of Vested shares that the Company elects to purchase, and a date for the closing hereunder, which date shall be not more than thirty (30) calendar days after the giving of such notice. If the Company fails to provide written notice to the Recipient within the applicable period regarding its intentions regarding the repurchase of shares, the Company will be deemed to have exercised its option to purchase all Unvested shares (but not Vested shares) upon the expiration of the applicable period. In such event, the closing will occur thirty (30) days after the date of such deemed exercise. The closing shall take place at the Company’s principal offices or such other location as the Company may reasonably designate in such notice. At the closing, Recipient shall deliver to the Company the certificate or certificates representing the Unvested shares and the Vested shares being purchased against the simultaneous delivery of the purchase price by the Company. The Company’s purchase rights are assignable by the Company it its sole discretion.

9. EXERCISE OF OPTIONS; PAYMENT OF EXERCISE PRICE AND ORIGINAL ISSUE PRICE

(a) Exercise of Option

Unless otherwise specified in the applicable Award Agreement, an Option shall be exercised by the Recipient’s delivery of written notice of exercise to the Treasurer of the Company, specifying the number of shares to be purchased and the purchase price to be paid therefor and accompanied by payment in full in accordance with this Section 9. Such exercise shall be effective upon receipt by the Treasurer of the Company of such written notice together with the required payment. The Recipient may purchase less than the number of shares covered by an Award Agreement for an Option, provided that no partial exercise of an Option may be for any fractional share or for fewer than one hundred (100) whole shares.

(b) Payment of Exercise Price and Original Issue Price.

(i) Payment of the Exercise Price of an Option may be by delivery of cash or a check payable to the order of the Company, and/or, to the extent (if at all) provided in the applicable Award Agreement by delivery of a recourse promissory note of the Recipient bearing interest payable not less often than annually at such market rate at the date of exercise as will avoid adverse accounting consequences (including without limitation variable security accounting treatment under generally accepted accounting principles) and otherwise payable and on such terms as are specified by the Board in its sole discretion, together with cash, a wire transfer or a check payable to the Company in an amount equal to the par value of the shares of Common Stock to be issued; or any combination of the above methods of payment.

(ii) The Board may authorize issuance of a Restricted Stock Award for consideration consisting of cash, any tangible or intangible property, any benefit to the Company, or any combination thereof. In the absence of a specific provision to the contrary in the Award Agreement or the resolution of the Board relating thereto, the consideration payable as the Original Issue Price of a Restricted Stock Award shall be services provided to the Company, and no cash payment shall be required for the Original Issue Price.

Upon a Recipient’s exercise of an ISO, the Company shall provide to the Recipient the information required pursuant to Section 6039(a)(1) of the Code.

10. NONTRANSFERABILITY OF OPTIONS.

Options shall not be assignable or transferable by the Recipient, either voluntarily or by operation of law, except by will or the laws of descent and distribution, and, during the life of the Recipient, shall be exercisable only by the Recipient; except that Non-Qualified Options may also be transferred by instrument to an inter vivos or testamentary trust in which the Non-Qualified Options are to be passed to the Recipient’s beneficiaries upon the Recipient’s death, or by gift to “immediate family” (as defined in 16 C.F.R. 240.16a-1(e)). Notwithstanding the foregoing, by delivering written notice to the Company, in a form satisfactory to the Company, the Recipient may designate a third party who, in the event of the Recipient’s death, shall thereafter be entitled to exercise an Option, to the extent then exercisable.

11. ADDITIONAL ISO REQUIREMENTS.

ISOs granted under the Plan are subject to the additional following requirements:

(a) Designation.

The ISO shall, at the time of grant, be specifically designated as an Incentive Stock Option (or ISO) in the applicable Award Agreement.

(b) Exercise Price.

The Exercise Price shall not be less than 100% of the Fair Market Value at the time of grant of such ISO, or less than 110% of such Fair Market Value in the case of an ISO granted to a 10% Shareholder.

In no event shall the aggregate Fair Market Value (measured for each grant at the time of grant of an ISO) for which ISOs granted to any employee are exercisable for the first time by such employee during any calendar year (under all stock option plans of the Company and any Related Company) exceed One Hundred Thousand Dollars ($100,000). Any Option which

would, but for its failure to satisfy the foregoing restriction, qualify as an ISO shall nevertheless be a valid Option, but to the extent of such failure it shall be deemed to be a Non-Qualified Option.

(d) Expiration Date.

The Expiration Date for the ISO shall not be later than ten (10) years after the date on which the ISO is granted and, in the case of an ISO granted to a 10% Shareholder, such Expiration Date shall not be later than five (5) years after the date on which the ISO is granted.

(e) Continuous Employment Required; Post-Separation Exercise.

No ISO may be exercised unless, at the time of such exercise, the Recipient has had Continuous Employment since the date of grant of the ISO, except that:

(i) An ISO may be exercised within the period of three (3) months after the Recipient’s Employment Termination Date (or within such lesser period as may be specified in the Award Agreement or this Plan).

(ii) If the Recipient dies while in the employ of the Company or a Related Company, or within three (3) months after the Recipient’s Employment Termination Date, the ISO may be exercised by the person to whom it is transferred by will or the laws of descent and distribution within the period of one (1) year after the date of death (or within such lesser period as may be specified in the Award Agreement or this Plan).

(iii) If the Recipient becomes disabled (within the meaning of Section 22(e)(3) of the Code) while in the employ of the Company or a Related Company, the ISO may be exercised within the period of one (1) year after the Recipient’s Employment Termination Date because of such disability (or within such lesser period as may be specified in the Award Agreement or this Plan).

Notwithstanding the foregoing provisions of this Section 11(e), no ISO may be exercised after its Expiration Date.

(f) Reclassified Options.

Any Option which would, but for its failure to satisfy the foregoing restrictions, qualify as an ISO shall nevertheless be a valid Option, but to the extent of such failure it shall be deemed to be a Non-Qualified Option.

12. RIGHT OF FIRST REFUSAL; SHAREHOLDER AGREEMENT.

(a) First Refusal Rights.

If the Recipient is not subject to a right of first refusal in a Shareholder Agreement (as defined below), unless specifically disclaimed in an Award Agreement, the following first refusal rights will apply:

(i) If the Recipient or the Recipient’s successor in interest desires to sell all or any part of the shares acquired under an Award granted under the Plan (including any securities received in respect thereof pursuant to recapitalizations and the like), and an offeror (the “Offeror”) has made an offer therefor, which offer the Recipient desires to accept, the Recipient shall: (x) obtain in writing an irrevocable and unconditional bona fide offer (the “Bona Fide Offer”) for the purchase thereof from the Offeror; and (y) give written notice (the “Offer Notice”) to the Company setting forth the Recipient’s desire to sell such shares, which Offer Notice shall be accompanied by a photocopy of the original executed Bona Fide Offer and shall set forth at least the name and address of the Offeror and the price and terms of the Bona Fide Offer. Upon receipt of the Offer Notice, the Company shall have an option to purchase any or all of the shares specified in the Offer Notice, such option to be exercisable by giving, within thirty (30) days after receipt of the Offer Notice, a written counter-notice to the Recipient. If the Company elects to purchase, the Recipient shall be obligated to sell to the Company such shares at the price and terms indicated in the Bona Fide Offer within sixty (60) days from the date of receipt by the Company of the Offer Notice. The Company’s purchase rights under this Section 12 are assignable by the Company.

(ii) The Recipient may sell, pursuant to the terms of the Bona Fide Offer, any or all of such shares not purchased by the Company or which the Company does not elect to purchase in the manner set forth hereinabove after the expiration of the thirty (30)-day period during which the Company may give the aforesaid counter-notice; provided, however, that the Recipient may not sell such shares to the Offeror if the Offeror is (x) a competitor of the Company, or (y) a person that controls, is controlled by or is under common control with a competitor of the Company, or (z) a member of management of a competitor of the Company (any person described in clauses (x) through (z) being hereinafter referred to as a “Competitor”), and the Company gives to the Recipient, within thirty (30) days of its receipt of the Offer Notice, written notice stating that the Recipient shall not sell the shares to the Offeror; and provided, further, that prior to the sale of any such shares to the Offeror, the Offeror shall execute an agreement with the Company under which the Offeror agrees not to become a Competitor of the Company and further agrees to be subject to the restrictions set forth in this Section 12. If any or all of such shares are not sold pursuant to a Bona Fide Offer within the time permitted above, the unsold shares shall remain subject to the terms of this Section 12.

(b) Shareholder Agreement.

As a condition to receipt of any Award granted under the Plan (including the exercise of any Option granted hereunder), the Recipient shall at the request of the Company become a party to a shareholder agreement or investors rights agreement or similar agreement generally applicable to shareholders, if any such agreement is then in force, between or among the Company and any of its shareholders (the “Shareholder Agreement”), and if any such Shareholder Agreement is then in force, Recipient shall execute such agreement as a shareholder with the same status as other shareholders receiving shares as compensation from the Company. For the avoidance of doubt, such requirement shall apply even if not all shareholders or Award recipients are required to execute such Shareholder Agreement, and even if not all parties have equal or equivalent rights under such Shareholder Agreement. In connection with such requirement, the Company shall provide the Recipient with a copy of the latest Shareholder Agreement, or substitute agreement, if any, and shall arrange for the Recipient’s execution of an

original counterpart thereof, or for the execution by the Recipient and the shareholders of an original, as appropriate. If the Recipient refuses to execute such agreement, the Company shall cause any tendered payment made by the Recipient in connection with the Award to be returned to the Recipient, and the Recipient’s attempted Option exercise or Restricted Stock grant, as the case may be, shall be null and void ab initio and without effect.

(c) Termination . The requirements set forth in this Section 12 shall remain in effect until the closing of an initial public offering of the Company’s Common Stock pursuant to a registration statement filed under the Securities Act of 1933, as amended, or a successor statute, at which time the requirements will automatically expire.

13. ADJUSTMENTS; MERGER, SALE OF SUBSTANTIALLY ALL ASSETS, REORGANIZATION, ETC.

(a) Definition of Reorganization.

“Reorganization” means a merger, consolidation, sale of all or substantially all of the assets of the Company, reorganization, recapitalization, reclassification, stock dividend, stock split, reverse stock split, holding company formation or other similar transaction, or the liquidation of the Company.

(b) Continuation of Awards.

Upon the consummation of a Reorganization, the Board or the board of directors of the surviving or acquiring entity (as used in this Section 13, also the “Board”), may, in its sole discretion, as to outstanding Awards, make appropriate provision for the continuation of such Awards by the Company or the assumption of such Awards by the surviving or acquiring entity and by substituting on an equitable basis for the shares then subject to such Awards either (i) the consideration payable with respect to the outstanding shares of Common Stock in connection with the Reorganization, (ii) shares of stock of the surviving or acquiring corporation, or (iii) such other securities, consideration or rights as the Board deems appropriate, so long as the fair market value of which (as determined by the Board in its sole discretion) does not materially differ from the Fair Market Value of the Awards immediately preceding the Reorganization (provided, with respect to Options replaced with substitute Options for new shares, the fair market value of the new shares (as determined by the Board in its sole discretion) does not materially differ from the Fair Market Value of the shares subject to the Options immediately preceding the Reorganization); and provided, that any new Options substituted for ISOs shall meet the requirements of Section 424(a) of the Code, and the requirements of Regulation 1.409A-(b)(5)(v)(D).

In addition to or in lieu of the actions described in this Section 13, in connection with any Reorganization, with respect to outstanding Awards, the Board may, on the same basis or on different bases as the Board may specify, upon written notice to the affected Recipient, provide that (i) any or all then exercisable Options (x) must be exercised in whole or in part within a specified number of days of the date of such notice, at the end of which period such Options shall automatically terminate, or (y) be terminated in exchange for a cash payment or such other

consideration as may be received by the Company in connection with the Reorganization equal to the excess of the Fair Market Value for the shares subject to such Options over the Exercise Price thereof, (ii) any or all Options that are not then exercisable (“Unexercisable Options”) shall be terminated and (iii) any or all Unvested shares or other unvested rights issued or issuable pursuant to other Awards (“Unvested Rights”) shall be terminated in exchange for a cash payment per share equal to the Original Issue Price of such Unvested Rights.

(d) Accelerated Vesting.

(i) In addition to, in lieu of, or in connection with any of the actions described in this Section 13, in connection with any Reorganization (including any Change in Control), the Board may in its discretion provide that outstanding Unvested Awards become fully Vested, or any or all future Unvested portions of such Awards become Vested, or any combination of the foregoing; but may also provide as a condition to exercising any or all Unexercisable Options as to which exercisability has been accelerated, that the Common Stock issuable upon exercise thereof shall be Restricted Stock subject to forfeiture and repurchase at the option of the Company (or the surviving or acquiring entity in such Reorganization (the “Successor”), as applicable) at the cost thereof upon Separation, with the timing and other terms of the vesting of such Restricted Stock being equivalent to the timing and other terms of the superseded vesting schedule of the related Unexercisable Option.

(ii) Notwithstanding any provision of the Plan to the contrary, in the event that (x) any Unvested Award is terminated in connection with any Reorganization pursuant to Section 13(c), and (y) the Award Agreement pursuant to which the Company granted or issued such Unvested Award provided that the vesting or exercisability of such Unvested Award would accelerate (in whole or in part) upon the occurrence of one or more specified events following a Reorganization (including any Change in Control) (an “Acceleration Event”), then the Board may, in its sole discretion, make appropriate provision to ensure that the holder of such Unvested Award shall receive a contractual right at the time of such termination such that, notwithstanding such termination, in the event such Acceleration Event occurs following the Reorganization, such holder shall be entitled to receive from the Company or its Successor (as applicable) the cash payment or other consideration to which such holder would have been entitled with respect to the portion of such Unvested Award that would have accelerated pursuant to the Award Agreement had such Award been continued by the Company or assumed by the Successor in accordance with Section 13(c).

(e) Continuation of Repurchase Rights.

Unless otherwise determined by the Board, any repurchase rights or other rights of the Company that relate to any Awards shall continue to apply to consideration, including cash and amended Awards, that has been substituted, assumed or amended for Awards pursuant to this Section 13. The Company may hold in escrow all or any portion of any such consideration in order to effectuate any continuing restrictions.

(f) Substitution of Securities.

Unless otherwise provided by the Board consistent with its powers under this Section 13, if, through or as a result of any Reorganization, (i) the outstanding shares of Common Stock are increased, decreased or exchanged for a different number or kind of shares or other securities of the Company or of a corporation or other entity controlled by or controlling the Company, or (ii) additional shares or new or different shares or other securities of the Company or other non-cash property is distributed with respect to such shares of Common Stock or other securities, an appropriate and proportionate adjustment shall be made in (a) the maximum number and kind of shares reserved for issuance under the Plan, (b) the number and kind of shares or other securities subject to any then outstanding Awards under the Plan, and (c) the price for each share subject to any then outstanding Awards under the Plan, without changing the aggregate purchase price as to which any Options remain exercisable. No fractional shares shall be issued under the Plan on account of any adjustments set forth in this Section 13 or otherwise. Notwithstanding the foregoing provisions of this Section 13(f), no adjustment shall be made pursuant to this Section 13(f) if such adjustment would cause any ISO granted under the Plan to fail to qualify as an incentive stock option within the meaning of Section 422 of the Code.

(g) Substitution of Awards.

The Company may grant Awards under the Plan in substitution for Options or other Awards held by employees of another corporation who become employees of the Company or a Related Company as the result of a Reorganization. The Company may direct that substitute Awards be granted on such terms and conditions as the Board considers appropriate in the circumstances; provided, however, that any Options substituted for ISOs shall meet the requirements of Section 424(a) of the Code to the extent practicable.

14. RELATIONSHIP OF RECIPIENTS

(a) No Rights as Shareholder.

The holder of an Option shall have no rights as a shareholder with respect to any shares covered by the Option (including, without limitation, any voting rights, or any rights to receive dividends or non-cash distributions with respect to such shares) until the date of issue of a stock certificate for such shares. No adjustment shall be made for dividends or other rights for which the record date is prior to the date such stock certificate is issued.

(b) No Rights to Employment.

Nothing contained in the Plan or in any Award Agreement or other agreement or instrument executed pursuant to the provisions of the Plan shall confer upon any Recipient any right with respect to the continuation of his or her employment by or Business Relationship with the Company or any Related Company or interfere in any way with the right of the Company or a Related Company at any time to terminate such employment or Business Relationship or to increase or decrease the compensation of the Recipient.

Except as to plans which by their terms include such amounts as compensation, no amount of compensation deemed to be received by an employee as a result of any Award will

constitute compensation with respect to which any other employee benefits of such employee are determined, including, without limitation, benefits under any bonus, pension, profit-sharing, life insurance or salary continuation plan, except as otherwise specifically determined by the Board.

15. COMPLIANCE WITH SECURITIES LAWS.

(a) Rule 701 Compliance.

Unless in the opinion of counsel to the Company the issuance of securities under the Plan is exempt from the requirements of Rule 701, the Company must:

(i) deliver to each Recipient a copy of the Plan and the Award Agreement for each Award and

(ii) if the aggregate amount of Common Stock issued under the Plan (or other compensatory plans of the Company) in any consecutive 12-month period exceeds five million dollars ($5,000,000) as calculated under Rule 701, the Company shall deliver the following disclosure to each Recipient within a reasonable period of time before the issuance of Common Stock to such Recipient under the Plan (including a reasonable period of time prior to the date of exercise of any Option):

(A) A summary of the material terms of the Plan;

(B) Information about the risks associated with investment in the Common Stock; and

(C) Financial statements required to be furnished under Rule 701, which must be as of a date no more than one hundred eighty (180) days before the issuance of Common Stock.

(b) Investment Intent.

The Board may require any person to whom an Option is granted, as a condition of exercising such Option, and any person to whom Restricted Stock is granted, as a condition thereof, to give written assurances in substance and form satisfactory to the Board to the effect that such person is acquiring the Common Stock subject to the Award for such person’s own account for investment and not with any present intention of selling or otherwise distributing the same, and to such other effects as the Company deems necessary or appropriate in order to comply with federal and applicable state securities laws, or with covenants or representations made by the Company in connection with any public offering of its Common Stock.

Each Option shall be subject to the requirement that if, at any time, counsel to the Company shall determine that the listing, registration or qualification of the shares subject to such Option upon any securities exchange or under any state or federal law, or that the consent or approval of any governmental or regulatory body, or the disclosure of non-public information or the satisfaction of any other condition is necessary as a condition of, or in connection with, the

issuance or purchase of shares thereunder, such Option may not be exercised, in whole or in part, unless such listing, registration, qualification, consent or approval, or satisfaction of such condition shall have been effected or obtained on conditions acceptable to the Board. Nothing herein shall be deemed to require the Company to apply for or to obtain such listing, registration or qualification, or to satisfy such condition.

(d) Legends.

All stock certificates representing shares of Common Stock issued to the Recipient hereunder shall have affixed thereto a legend substantially in the following form, in addition to any other legends required by applicable state law:

“The shares of stock represented by this certificate have not been registered under the Securities Act of 1933 and may not be transferred, sold or otherwise disposed of in the absence of an effective registration statement with respect to the shares evidenced by this certificate, filed and made effective under the Securities Act of 1933, or an opinion of counsel satisfactory to the Company to the effect that registration under such Act is not required.”

If applicable, such stock certificates shall also have affixed thereto a legend substantially in the following form:

“The shares of stock represented by this certificate are subject to certain restrictions on transfer contained in the Company’s Stock Option/Stock Issuance Plan, a copy of which will be furnished upon request by the issuer.”

(e) Lock-up Period.

If the Company effects an initial underwritten public offering of Common Stock registered under the Securities Act, shares acquired under the Plan may not be sold, offered for sale or otherwise disposed of, directly or indirectly, without the prior written consent of the managing underwriter(s) of the offering, for such period of time after the execution of an underwriting agreement in connection with such offering that all of the Company’s then directors and executive officers agree to be similarly bound.

16. TAXES; WITHHOLDING AND NOTICE OF DISQUALIFYING DISPOSITION; RESTRICTIONS ON EXERCISE RELATING TO S-ELECTION

(a) Withholding.

The Company shall have the right to deduct from payments of any kind otherwise due to the Recipient any federal, national, state or local taxes of any kind required by law to be withheld with respect to any shares issued with respect to an Award, including without limitation the making of a purchase of Common Stock for less than its Fair Market Value, the making of a Disqualifying Disposition, or the vesting of Restricted Stock. The Board in its sole discretion may condition the exercise of an Option or the acquisition of Restricted Stock on the Recipient’s payment of such additional withholding taxes, regardless of whether or not a provision relating thereto is included in the Award Agreement.

(b) Transfer, Issuance and Other Tax Reimbursement . In the event the Company is subject to taxes, registration fees or other similar governmental charges in any jurisdiction based on an Award, including without limitation the issuance or exercise of shares or options or the disposition thereof, the Board in its sole discretion may condition the exercise of an Option or the acquisition of Restricted Stock, or similar transactions relating to an Award, on the Recipient’s reimbursement of the Company’s liability for such additional charges, regardless of whether or not a provision relating thereto is included in the Award Agreement.

Each employee who receives an ISO must agree to notify the Company in writing immediately after the employee makes a Disqualifying Disposition of any Common Stock acquired pursuant to the exercise of an ISO. “Disqualifying Disposition” is any disposition (including any sale) of such Common Stock before the later of (i) two (2) years after the date the employee was granted the ISO or (ii) one (1) year after the date the employee acquired Common Stock by exercising the ISO. If the employee has died before such stock is sold, these holding period requirements do not apply and no Disqualifying Disposition can occur thereafter.

17. CALIFORNIA REQUIREMENTS.

The Company anticipates it may grant Awards to Recipients in the State of California, and accordingly, notwithstanding anything to the contrary herein, each Award to such persons shall comply in all respects with Section 260.140.41 and 260.140.42 of Title 10 of the CCR.

18. DEFINITIONS

As used herein and in any Award Agreement, the following terms have the following meanings:

“10% Shareholder” means the owner of stock possessing more than 10% of the total combined voting power of all classes of stock of the Company or any Related Company (after taking into account the attribution of stock ownership rules of Section 424(d) of the Code).

“Applicable Laws” means the requirements relating to the administration of stock option plans under U.S. state corporate laws, U.S. federal and state securities laws, the Code, any stock exchange or quotation system on which the Common Stock is listed or quoted and the applicable laws of any foreign country or jurisdiction where Awards are, or will be, granted under the Plan.

“Award Agreement” means an agreement with a Recipient setting forth the terms and conditions of an Award.

“Awards” means Options and Restricted Stock.

“Board” means the Board of Directors of the Company; provided, to the extent the Plan is being administered by another body pursuant to Section 3(a)(i), references to the “Board” mean shall mean such other administrative body.

“Business Relationship” means the recipient serves the Company or a Related Company in the capacity of an employee, officer, Director or Independent Contractor. The Board may, but need not, take into account Regulation 1.409A-1(h) when determining whether a Business Relationship exists.

“Cause” means, with respect to the termination by the Company or a Related Company of the Recipients Continuous Service, that such termination is for one or more of the reasons set forth in the definition of “Cause” as such term is expressly defined in a then-effective written agreement between the Recipient and the Company or such Related Company, or in the absence of such then-effective written agreement and definition, is based on, in the determination of the Board, the Recipient’s: (i) performance of any act, or failure to perform any act, in bad faith and to the detriment of the Company or a Related Company; (ii) dishonesty, intentional misconduct, material violation of any applicable Company or Related Company policy, or material breach of any agreement with the Company or a Related Company; or (iii) commission of a crime involving dishonesty, breach of trust, or physical or emotional harm to any person.

“CCR” means the California Code of Regulations.

“Change in Control” means (i) the sale, transfer or other disposition of all or substantially all of the assets of the Company to a Third Party Entity, (ii) a merger or consolidation of the Company with a Third Party Entity, or (iii) a transfer of more than fifty percent (50%) of the outstanding voting equity of the Company to a Third Party Entity, provided no financing transaction involving issuance of additional securities of the Company to a Third Party Entity shall constitute a Change in Control; and provided further than the Company may in its discretion notify Recipient prior to consummation of such transaction that such transaction shall not constitute a Change in Control for the purposes of this Agreement; for the purposes of the foregoing, a “Third Party Entity” means another entity except (A) any legal entity (other than a natural person) that directly or indirectly controls, is controlled by, or is under common control with the Company prior to the transaction or (B) any entity which, following the transaction in question, a majority of the voting equity of which is owned directly or indirectly by the shareholders of the Company prior to the transaction.

“Code” means the Internal Revenue Code of 1986 as amended from time to time.

“Committee” means a committee appointed by the Board under Section 3.

“Common Stock” means that class of common stock of the Company having the greatest aggregate value of common stock issued and outstanding of the Company, or common stock with substantially similar rights to stock of such class (disregarding any difference in voting rights).

“Continuous Employment” means that the Recipient’s service with the Company or a Related Company as an employee is not interrupted or terminated. A change in the entity for which the Recipient renders service as an employee (as between the Company and any Related Company) shall not terminate a Recipient’s Continuous Employment.

“Continuous Service” means that the Recipient’s service with the Company or a Related Company, whether as an employee, officer, Director or Independent Contractor, is not interrupted or terminated. A change in the entity for which the Recipient renders any service (as between the Company and any Related Company) shall not terminate a Recipient’s Continuous Service; and a change in the capacity in which the Recipient renders service to the Company or a Related Company as an employee, Director or Independent Contractor shall not terminate a Recipient’s Continuous Service.

“Director” means a member of the Board.

“Disqualifying Disposition” has the meaning given it in Section 16(c).

“employment” shall be defined in accordance with the provisions of Treasury Regulation Section 1.421-7(h) under the Code (or any successor regulations).

“Employment Termination Date” means the date on which a Recipient’s Continuous Employment terminates.

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

“Exercise Price” of an Option means the purchase price per share of Common Stock deliverable upon the exercise of an Option.

“Expiration Date” of an Option means the expiration date specified in accordance with Section 7.

“Fair Market Value” shall mean the fair market value of a share of Common Stock, as determined by Board, and to the extent required, as provided in Regulation 1.409A-1(b)(5)(iv) and if applicable, in a manner not inconsistent with Section 260.140.50 of the CCR.

“Good Reason” means (a) a substantial adverse alteration in the Recipient’s duties or responsibilities from those in effect immediately prior to the Change in Control; (b) a reduction in the Recipient’s annual base salary as of immediately prior to the Change in Control (or as the same may be increased from time to time); or (c) the relocation of the Recipient’s principal place of employment to a location more than 50 miles from the Recipient’s principal place of employment immediately prior to the Change in Control, except for required travel on the Company’s business to an extent substantially consistent with the Recipient’s business travel obligations as of immediately prior to the Change in Control. The Recipient’s continued employment shall not constitute consent to, or a waiver of rights with respect to, any act or failure to act constituting Good Reason hereunder, provided that the Recipient provides the Company with a written notice of resignation within ninety (90) days following the occurrence of the event constituting Good Reason and the Company shall have failed to remedy such act or omission within thirty (30) days following its receipt of such notice.

“Independent Contractor” means a “service provider” described in Regulation 1.409A-1(f)(3) and such other federal and state regulations defining “independent contractor” as may be applicable.

“Involuntary Change in Control Separation Event” means either of the following events which occur following a Change in Control: (a) the involuntary Separation of a Recipient (i.e. not by Recipient’s choice), other than for Cause; provided, transfer of a Recipient’s employment to another affiliated company of an acquirer shall not constitute an Involuntary Separation Event under this clause (a) when such Recipient is rehired (or offered employment) by such affiliated company or (b) a Separation for Good Reason by the Recipient.

“ISO” or “Incentive Stock Options” means Options meeting the requirements of Section 422 of the Code.

“Non-Qualified Options” means Options which do not qualify as ISOs.

“Options” means options to acquire Common Stock of the Company.

“Original Issue Price” means the price per share payable by a Recipient to the Company in connection with the issuance of Restricted Stock to the Recipient.

“parent” and “subsidiary” mean “parent corporation” and “subsidiary corporation”, respectively, as those terms are defined in Sections 424(e) and 424(f) or successor provisions of the Code.

“Recipient” means the recipient of an Award. Except as otherwise indicated by the context, the term “Recipient”, as used in the Plan shall include the estate of the Recipient, the Recipient’s personal representative, or any other person who acquires the right to exercise this option by bequest or inheritance or otherwise by reason of the death of the Recipient or by reason of the Recipient’s incapacity.

“Regulation 1.409A”, or any subsection thereof, means section 1.409A or such subsection of the Regulations, including without limitation any proposed, amended or successor Regulation thereto after the date of adoption of the Plan.

“Regulations” means the regulations, including without limitation proposed regulations, promulgated by the Internal Revenue Service pursuant to the Code.

“Related Company” means the Company, its parent (if any) and any present or future subsidiaries of the Company.

“Reorganization” has the meaning given it in Section 13(a).

“Restricted Stock” means awards of, or opportunities to purchase, shares of Common Stock of the Company.

“Rule 16b-3” means Rule 16b-3 of the Exchange Act or any successor to Rule 16b-3, as in effect when discretion is being exercised with respect to the Plan.

“Rule 701” means Rule 701 under the Securities Act.

“Separation” means cessation of the Recipient’s Business Relationship.

“Separation Date” means the date of Separation.

“Shareholder Agreement” has the meaning given it in Section 12(b).

“Vest”, “Vested”, and “Unvested” have the meanings given them in Section 8.

19. EFFECTIVE DATE AND DURATION OF THE PLAN.

(a) Effectiveness; Shareholder Approval.

(i) The Plan shall become effective when adopted by the Board, provided that, with respect to the Award of ISOs, the Plan must also have been approved by the shareholders of the Company within twelve (12) months prior to such adoption by the Board, or be so approved by the shareholders within twelve (12) months following adoption by the Board.

(ii) Amendments to the Plan not requiring shareholder approval under Applicable Laws or the terms of the Plan shall become effective when adopted by the Board.

(iii) Amendments to the Plan requiring shareholder approval shall become effective when adopted by the Board, subject to the consequences set forth in Section 20(b) if shareholder approval is not obtained within twelve (12) months of adoption by the Board.

(b) Termination.

Unless sooner terminated as provided elsewhere in the Plan, the Plan shall terminate upon the close of business on the day next preceding the tenth anniversary of the date of its adoption by the Board. Awards outstanding on such date shall continue to have force and effect in accordance with the provisions of the instruments evidencing such Awards.

20. AMENDMENT.

(a) Amendment.

The Board may at any time, and from time to time, modify or amend the Plan in any respect, except as otherwise expressly provided in the Plan; provided, however, that if at any time the approval of the shareholders of the Company is required under the Code with respect to ISOs, or is required under federal securities laws applicable to the Company, the Board may not effect such modification or amendment without such approval.

(b) Effect of Failure to Obtain Shareholder Approval.

(i) Subject to the limitation in this Section 20(b), Awards may be granted under the Plan at any time after the effective date and before the termination date of the Plan.

(ii) If shareholder approval of the Plan (or any amendment required to be approved by shareholders) is not obtained within any required period specified in Section 19, then any Awards previously granted under the Plan (or pursuant to the amendment, as the case may be) shall not vest and shall terminate and shall be null and void and no Awards shall be granted thereafter under the Plan (or pursuant to the Amendment, as the case may be) and any Option exercised or other securities purchased hereunder (or pursuant to the Amendment, as the case may be) before shareholder approval is obtained shall be rescinded.

The Board may amend outstanding Award Agreements in a manner not inconsistent with the Plan, and the Recipient’s consent to such action shall not be required unless the Board determines that the action would materially and adversely affect the Recipient. Without limiting the foregoing, without the consent of the Recipient, the Board shall have the right to amend or modify (i) the terms and provisions of the Plan and of any outstanding ISO granted under the Plan to the extent necessary to qualify any or all such Options for such favorable federal income tax treatment (including deferral of taxation upon exercise) as may be afforded incentive stock options within the meaning of Section 422 of the Code or non-qualified stock options exempt from the application of Section 409A of the Code, and (ii) the terms and provisions of the Plan and of any outstanding Option to the extent necessary to ensure the qualification of the Plan under Rule 16b-3.

More generally, the Board reserves the right, to the extent it deems necessary or advisable in its sole discretion, to alter or modify the Plan and any outstanding Awards under the Plan, without the consent of the Recipients, so as to ensure that all Awards and Award Agreements provided to Recipients who are subject to U.S. income taxation either qualify for an exemption from the requirements of Section 409A of the Code or are structured in a manner that complies with those requirements.

21. NOTICES.

All notices under the Plan or an Award Agreement shall be delivered by hand, sent by commercial overnight courier service or sent by registered or certified mail, return receipt requested, and first-class postage prepaid, if to Company to its principal executive offices, attention: Corporate Secretary, and if to a Recipient, to the address of the Recipient on the Company’s records, or at such other address as may be designated in a notice by either party to the other. Notwithstanding the foregoing, any notice sent to such an address in a country other than that from which the notice is sent may be sent by fax or commercial air courier.