{"id":38346,"date":"2015-09-17T11:25:58","date_gmt":"2015-09-17T16:25:58","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-legal\/contracts\/uncategorized\/1999-employee-stock-purchase-plan-sonicwall-inc.html"},"modified":"2015-09-17T11:25:58","modified_gmt":"2015-09-17T16:25:58","slug":"1999-employee-stock-purchase-plan-sonicwall-inc","status":"publish","type":"corporate_contracts","link":"https:\/\/corporate.findlaw.com\/contracts\/compensation\/1999-employee-stock-purchase-plan-sonicwall-inc.html","title":{"rendered":"1999 Employee Stock Purchase Plan &#8211; SonicWALL Inc."},"content":{"rendered":"<pre>\n                                SONICWALL, INC.\n                       1999 EMPLOYEE STOCK PURCHASE PLAN\n\n                            Adopted August 24, 1999\n\n     The following constitute the provisions of the 1999 Employee Stock Purchase\nPlan of SonicWALL, Inc.\n\n     1.  Purpose.  The purpose of the Plan is to provide employees of the\n         -------                                                         \nCompany and its Designated Subsidiaries with an opportunity to purchase Common\nStock of the Company.  It is the intention of the Company to have the Plan\nqualify as an 'Employee Stock Purchase Plan' under Section 423 of the Code.  The\nprovisions of the Plan shall, accordingly, be construed so as to extend and\nlimit participation in a manner consistent with the requirements of that section\nof the Code.\n\n     2.  Definitions.\n         ----------- \n\n     (a) 'Board' means the Board of Directors of the Company.\n          -----                                              \n\n     (b) 'Code' means the Internal Revenue Code of 1986, as amended.\n          ----                                                      \n\n     (c) 'Common Stock' means the Common Stock of the Company.\n          ------------                                        \n\n     (d) 'Company' means SonicWALL, Inc., a California corporation.\n          -------                                                  \n\n     (e) 'Compensation' means total cash compensation received by an Employee\n          ------------                                                       \nfrom the Company or a Designated Subsidiary.  By way of illustration, but not\nlimitation, Compensation includes regular compensation such as salary, wages,\novertime, shift differentials, bonuses, commissions and incentive compensation,\nbut excludes relocation, expense reimbursements, tuition or other reimbursements\nand income realized as a result of participation in any stock option, stock\npurchase, or similar plan of the Company or any Designated Subsidiary.\n\n     (f) 'Continuous Status As An Employee' means the absence of any\n          --------------------------------                          \ninterruption or termination of service as an Employee.  Continuous Status as an\nEmployee shall not be considered interrupted in the case of (i) sick leave; (ii)\nmilitary leave; (iii) any other leave of absence approved by the Administrator,\nprovided that such leave is for a period of not more than 90 days, unless\nreemployment upon the expiration of such leave is guaranteed by contract or\nstatute, or unless provided otherwise pursuant to Company policy adopted from\ntime to time; or (iv) in the case of transfers between locations of the Company\nor between the Company and its Designated Subsidiaries.\n\n     (g) 'Contributions' means all amounts credited to the account of a\n          -------------                                                \nparticipant pursuant to the Plan.\n\n                                       1\n\n \n     (h) 'Corporate Transaction' means a sale of all or substantially all of the\n          ---------------------                                                 \nCompany's assets, or a merger, consolidation or other capital reorganization of\nthe Company with or into another corporation.\n\n     (i) 'Designated Subsidiaries' means the Subsidiaries which have been\n          -----------------------                                        \ndesignated by the Board from time to time in its sole discretion as eligible to\nparticipate in the Plan; provided however that the Board shall only have the\ndiscretion to designate Subsidiaries if the issuance of options to such\nSubsidiary's Employees pursuant to the Plan would not cause the Company to incur\nadverse accounting charges.\n\n     (j) 'Employee' means any person, including an Officer, who is customarily\n          --------                                                            \nemployed for at least twenty (20) hours per week and more than five (5) months\nin a calendar year by the Company or one of its Designated Subsidiaries.\nEmployee does not include any individual who provides services to the Company or\nany Subsidiary as an independent contractor whether or not such individual is\nreclassified as a common law employee, unless the Company or a Subsidiary\nwithholds or is required to withhold U.S. Federal employment taxes for such\nindividual pursuant to Section 3402 of the Code.\n\n     (k) 'Exchange Act' means the Securities Exchange Act of 1934, as amended.\n          ------------                                                        \n\n     (l) 'Offering Date' means the first business day of each Offering Period of\n          -------------                                                         \nthe Plan.\n\n     (m) 'Offering Period' means a period of twenty-four (24) months commencing\n          ---------------                                                      \non February 1 and August 1 of each year, except for the first Offering Period as\nset forth in Section 4(a).\n\n     (n) 'Officer' means a person who is an officer of the Company within the\n          -------                                                            \nmeaning of Section 16 of the Exchange Act and the rules and regulations\npromulgated thereunder.\n\n     (o) 'Plan' means this Employee Stock Purchase Plan.\n          ----                                          \n\n     (p) 'Purchase Date' means the last day of each Purchase Period of the Plan.\n          -------------                                                         \n\n     (q) 'Purchase Period' means a period of six (6) months within an Offering\n          ---------------                                                     \nPeriod, except for the first Purchase Period as set forth in Section 4(b).\n\n     (r) 'Purchase Price' means with respect to a Purchase Period an amount\n          --------------                                                   \nequal to 85% of the Fair Market Value (as defined in Section 7(b) below) of a\nShare of Common Stock on the Offering Date or on the Purchase Date, whichever is\nlower; provided, however, that in the event (i) of any increase in the number of\nShares available for issuance under the Plan as a result of a shareholder-\napproved amendment to the Plan, and (ii) all or a portion of such additional\nShares are to be issued with respect to one or more Offering Periods that are\nunderway at the time of such increase ('Additional Shares'), and (iii) the Fair\nMarket Value of a Share of Common Stock on the date of such increase (the\n'Approval Date Fair Market Value') is higher than the Fair Market Value on the\nOffering Date for any such Offering Period, then in such instance the Purchase\nPrice with respect to Additional Shares shall be 85% of the Approval Date Fair\nMarket\n\n                                       2\n\n \nValue or the Fair Market Value of a Share of Common Stock on the Purchase Date,\nwhichever is lower.\n\n     (s) 'Share' means a share of Common Stock, as adjusted in accordance with\n          -----                                                               \nSection 19 of the Plan.\n\n     (t) 'Subsidiary' means a corporation, domestic or foreign, of which not\n          ----------                                                        \nless than 50% of the voting shares are held by the Company or a Subsidiary,\nwhether or not such corporation now exists or is hereafter organized or acquired\nby the Company or a Subsidiary.\n\n     3.  Eligibility.\n         ----------- \n\n     (a) Any person who is an Employee as of the Offering Date of a given\nOffering Period shall be eligible to participate in such Offering Period under\nthe Plan, subject to the requirements of Section 5(a) and the limitations\nimposed by Section 423(b) of the Code; provided however that eligible Employees\nmay not participate in more than one Offering Period at a time.\n\n     (b) Any provisions of the Plan to the contrary notwithstanding, no Employee\nshall be granted an option under the Plan (i) if, immediately after the grant,\nsuch Employee (or any other person whose stock would be attributed to such\nEmployee pursuant to Section 424(d) of the Code) would own capital stock of the\nCompany and\/or hold outstanding options to purchase stock possessing five\npercent (5%) or more of the total combined voting power or value of all classes\nof stock of the Company or of any Subsidiary of the Company, or (ii) if such\noption would permit his or her rights to purchase stock under all employee stock\npurchase plans (described in Section 423 of the Code) of the Company and its\nSubsidiaries to accrue at a rate which exceeds Twenty-Five Thousand Dollars\n($25,000) of the Fair Market Value (as defined in Section 7(b) below) of such\nstock (determined at the time such option is granted) for each calendar year in\nwhich such option is outstanding at any time.\n\n     4.  Offering Periods And Purchase Periods.\n         ------------------------------------- \n\n     (a) Offering Periods.  The Plan shall be implemented by a series of\n         ----------------                                               \nOffering Periods of twenty-four (24) months' duration, with new Offering Periods\ncommencing on or about February 1 and August 1 of each year (or at such other\ntime or times as may be determined by the Board of Directors).  The first\nOffering Period shall commence on the beginning of the effective date of the\nRegistration Statement on Form S-1 for the initial public offering of the\nCompany's Common Stock (the 'IPO Date') and continue until July 31, 2001.  The\nPlan shall continue until terminated in accordance with Section 19 hereof. The\nBoard of Directors of the Company shall have the power to change the duration\nand\/or the frequency of Offering Periods with respect to future offerings\nwithout shareholder approval if such change is announced at least five (5) days\nprior to the scheduled beginning of the first Offering Period to be affected.\n\n     (b) Purchase Periods.  Each Offering Period shall consist of four (4)\n         ----------------                                                 \nconsecutive purchase periods of six (6) months' duration.  The last day of each\nPurchase Period shall be the 'Purchase Date' for such Purchase Period.  A\nPurchase Period commencing on February 1 shall end on the next July 31.  A\nPurchase Period commencing on August 1 shall end on the next January 31.\n\n                                       3\n\n \nThe first Purchase Period shall commence on the IPO Date and shall end on\nJanuary 31, 2000. The Board of Directors of the Company shall have the power to\nchange the duration and\/or frequency of Purchase Periods with respect to future\npurchases without shareholder approval if such change is announced at least five\n(5) days prior to the scheduled beginning of the first Purchase Period to be\naffected.\n\n     5.  Participation.\n         ------------- \n\n     (a) An eligible Employee may become a participant in the Plan by completing\na subscription agreement on the form provided by the Company and filing it with\nthe Company's payroll office prior to the applicable Offering Date, unless a\nlater time for filing the subscription agreement is set by the Board for all\neligible Employees with respect to a given Offering Period.  The subscription\nagreement shall set forth the percentage of the participant's Compensation\n(subject to Section 6(a) below) to be paid as Contributions pursuant to the\nPlan.\n\n     (b) Payroll deductions shall commence on the first payroll following the\nOffering Date and shall end on the last payroll paid on or prior to the last\nPurchase Period of the Offering Period to which the subscription agreement is\napplicable, unless sooner terminated by the participant as provided in Section\n10.\n\n     6.  Method Of Payment Of Contributions.\n         ---------------------------------- \n\n     (a) A participant shall elect to have payroll deductions made on each\npayday during the Offering Period in an amount not less than one percent (1%)\nand not more than fifteen percent (15%) (or such greater percentage as the Board\nmay establish from time to time before an Offering Date) of such participant's\nCompensation on each payday during the Offering Period.  All payroll deductions\nmade by a participant shall be credited to his or her account under the Plan.  A\nparticipant may not make any additional payments into such account.\n\n     (b) A participant may discontinue his or her participation in the Plan as\nprovided in Section 10, or, on one occasion only during a Purchase Period may\nincrease and on one occasion only during a Purchase Period may decrease the rate\nof his or her Contributions with respect to the Offering Period by completing\nand filing with the Company a new subscription agreement authorizing a change in\nthe payroll deduction rate.  The change in rate shall be effective as of the\nbeginning of the next calendar month following the date of filing of the new\nsubscription agreement, if the agreement is filed at least ten (10) business\ndays prior to such date and, if not, as of the beginning of the next succeeding\ncalendar month.\n\n     (c) Notwithstanding the foregoing, to the extent necessary to comply with\nSection 423(b)(8) of the Code and Section 3(b) herein, a participant's payroll\ndeductions may be decreased during any Purchase Period to 0%. Payroll deductions\nshall re-commence at the rate provided in such participant's subscription\nagreement at the beginning of the first Purchase Period which is scheduled to\nend in the following calendar year, unless terminated by the participant as\nprovided in Section 10.\n\n                                       4\n\n \n     7.  Grant Of Option.\n         --------------- \n\n     (a) On the Offering Date of each Offering Period, each eligible Employee\nparticipating in such Offering Period shall be granted an option to purchase on\neach Purchase Date a number of Shares of the Company's Common Stock determined\nby dividing such Employee's Contributions accumulated prior to such Purchase\nDate and retained in the participant's account as of the Purchase Date by the\napplicable Purchase Price; provided however, that the maximum number of Shares\nan Employee may purchase during each Purchase Period shall be 2,000 Shares\n(subject to any adjustment pursuant to Section 19 below), and provided further\nthat such purchase shall be subject to the limitations set forth in Sections\n3(b) and 13.\n\n     (b) The fair market value of the Company's Common Stock on a given date\n(the 'Fair Market Value') shall be determined by the Board based on the closing\nsales price of the Common Stock for such date (or, in the event that the Common\nStock is not traded on such date, on the immediately preceding trading date), as\nreported by the National Association of Securities Dealers Automated Quotation\n(Nasdaq) National Market or, if such price is not reported, the mean of the bid\nand asked prices per share of the Common Stock as reported by Nasdaq or, in the\nevent the Common Stock is listed on a stock exchange, the Fair Market Value per\nshare shall be the closing sales price on such exchange on such date (or, in the\nevent that the Common Stock is not traded on such date, on the immediately\npreceding trading date), as reported in The Wall Street Journal.  For purposes\nof the Offering Date under the first Offering Period under the Plan, the Fair\nMarket Value of a share of the Common Stock of the Company shall be the Price to\nPublic as set forth in the final prospectus filed with the Securities and\nExchange Commission pursuant to Rule 424 under the Securities Act of 1933, as\namended.\n\n     8.  Exercise Of Option.  Unless a participant withdraws from the Plan as\n         ------------------                                                  \nprovided in Section 10, his or her option for the purchase of Shares will be\nexercised automatically on each Purchase Date of an Offering Period, and the\nmaximum number of full Shares subject to the option will be purchased at the\napplicable Purchase Price with the accumulated Contributions in his or her\naccount. No fractional Shares shall be issued.  The Shares purchased upon\nexercise of an option hereunder shall be deemed to be transferred to the\nparticipant on the Purchase Date.  During his or her lifetime, a participant's\noption to purchase Shares hereunder is exercisable only by him or her.\n\n     9.  Delivery.  As promptly as practicable after each Purchase Date of each\n         --------                                                              \nOffering Period, the Company shall arrange the delivery to each participant, as\nappropriate, the Shares purchased upon exercise of his or her option.  No\nfractional Shares shall be purchased; any payroll deductions accumulated in a\nparticipant's account which are not sufficient to purchase a full Share shall be\nretained in the participant's account for the subsequent Purchase Period or\nOffering Period, subject to earlier withdrawal by the participant as provided in\nSection 10 below. Any other amounts left over in a participant's account after a\nPurchase Date shall be returned to the participant.\n\n                                       5\n\n \n     10.  Voluntary Withdrawal; Termination Of Employment.\n          ----------------------------------------------- \n\n     (a) A participant may withdraw all but not less than all the Contributions\ncredited to his or her account under the Plan at any time prior to each Purchase\nDate by giving written notice to the Company. All of the participant's\nContributions credited to his or her account will be paid to him or her promptly\nafter receipt of his or her notice of withdrawal and his or her option for the\ncurrent period will be automatically terminated, and no further Contributions\nfor the purchase of Shares will be made during the Offering Period.\n\n     (b) Upon termination of the participant's Continuous Status as an Employee\nprior to the Purchase Date of an Offering Period for any reason, including\nretirement or death, the Contributions credited to his or her account will be\nreturned to him or her or, in the case of his or her death, to the person or\npersons entitled thereto under Section 15, and his or her option will be\nautomatically terminated.\n\n     (c) In the event an Employee fails to remain in Continuous Status as an\nEmployee of the Company for at least twenty (20) hours per week during the\nOffering Period in which the employee is a participant, he or she will be deemed\nto have elected to withdraw from the Plan and the Contributions credited to his\nor her account will be returned to him or her and his or her option terminated.\n\n     (d) A participant's withdrawal from an offering will not have any effect\nupon his or her eligibility to participate in a succeeding offering or in any\nsimilar plan which may hereafter be adopted by the Company.\n\n     11.  Automatic Withdrawal.  If the Fair Market Value of the Shares on any\n          --------------------                                                \nPurchase Date of an Offering Period is less than the Fair Market Value of the\nShares on the Offering Date for such Offering Period, then every participant\nshall automatically (i) be withdrawn from such Offering Period at the close of\nsuch Purchase Date and after the acquisition of Shares for such Purchase Period,\nand (ii) be enrolled in the Offering Period commencing on the first business day\nsubsequent to such Purchase Period.\n\n     12.  Interest.  No interest shall accrue on the Contributions of a\n          --------                                                     \nparticipant in the Plan.\n\n     13.  Stock.\n          ----- \n\n     (a) Subject to adjustment as provided in Section 19, the maximum number of\nShares which shall be made available for sale under the Plan shall be 125,000\nShares.  If the Board determines that, on a given Purchase Date, the number of\nshares with respect to which options are to be exercised may exceed (i) the\nnumber of shares of Common Stock that were available for sale under the Plan on\nthe Offering Date of the applicable Offering Period, or (ii) the number of\nshares available for sale under the Plan on such Purchase Date, the Board may in\nits sole discretion provide (x) that the Company shall make a pro rata\nallocation of the Shares of Common Stock available for purchase on such Offering\nDate or Purchase Date, as applicable, in as uniform a manner as shall be\npracticable and as it shall determine in its sole discretion to be equitable\namong all participants exercising options to purchase Common Stock on such\nPurchase\n\n                                       6\n\n \nDate, and continue all Offering Periods then in effect, or (y) that the Company\nshall make a pro rata allocation of the shares available for purchase on such\nOffering Date or Purchase Date, as applicable, in as uniform a manner as shall\nbe practicable and as it shall determine in its sole discretion to be equitable\namong all participants exercising options to purchase Common Stock on such\nPurchase Date, and terminate any or all Offering Periods then in effect pursuant\nto Section 20 below. The Company may make pro rata allocation of the Shares\navailable on the Offering Date of any applicable Offering Period pursuant to the\npreceding sentence, notwithstanding any authorization of additional Shares for\nissuance under the Plan by the Company's shareholders subsequent to such\nOffering Date.\n\n     (b) The participant shall have no interest or voting right in Shares\ncovered by his or her option until such option has been exercised.\n\n     (c) Shares to be delivered to a participant under the Plan will be\nregistered in the name of the participant or in the name of the participant and\nhis or her spouse.\n\n     14.  Administration.  The Board, or a committee named by the Board, shall\n          --------------                                                      \nsupervise and administer the Plan and shall have full power to adopt, amend and\nrescind any rules deemed desirable and appropriate for the administration of the\nPlan and not inconsistent with the Plan, to construe and interpret the Plan, and\nto make all other determinations necessary or advisable for the administration\nof the Plan.\n\n     15.  Designation Of Beneficiary.\n          -------------------------- \n\n     (a) A participant may file a written designation of a beneficiary who is to\nreceive any Shares and cash, if any, from the participant's account under the\nPlan in the event of such participant's death subsequent to the end of a\nPurchase Period but prior to delivery to him or her of such Shares and cash. In\naddition, a participant may file a written designation of a beneficiary who is\nto receive any cash from the participant's account under the Plan in the event\nof such participant's death prior to the Purchase Date of an Offering Period. If\na participant is married and the designated beneficiary is not the spouse,\nspousal consent shall be required for such designation to be effective.\n\n     (b) Such designation of beneficiary may be changed by the participant (and\nhis or her spouse, if any) at any time by written notice.  In the event of the\ndeath of a participant and in the absence of a beneficiary validly designated\nunder the Plan who is living at the time of such participant's death, the\nCompany shall deliver such Shares and\/or cash to the executor or administrator\nof the estate of the participant, or if no such executor or administrator has\nbeen appointed (to the knowledge of the Company), the Company, in its\ndiscretion, may deliver such Shares and\/or cash to the spouse or to any one or\nmore dependents or relatives of the participant, or if no spouse, dependent or\nrelative is known to the Company, then to such other person as the Company may\ndesignate.\n\n     16.  Transferability.  Neither Contributions credited to a participant's\n          ---------------                                                    \naccount nor any rights with regard to the exercise of an option or to receive\nShares under the Plan may be assigned, transferred, pledged or otherwise\ndisposed of in any way (other than by will, the laws\n\n                                       7\n\n \nof descent and distribution, or as provided in Section 15) by the participant.\nAny such attempt at assignment, transfer, pledge or other disposition shall be\nwithout effect, except that the Company may treat such act as an election to\nwithdraw funds in accordance with Section 10.\n\n     17.  Use Of Funds.  All Contributions received or held by the Company under\n          ------------                                                          \nthe Plan may be used by the Company for any corporate purpose, and the Company\nshall not be obligated to segregate such Contributions.\n\n     18.  Reports.  Individual accounts will be maintained for each participant\n          -------                                                              \nin the Plan. Statements of account will be given to participating Employees at\nleast annually, which statements will set forth the amounts of Contributions,\nthe per Share Purchase Price, the number of Shares purchased and the remaining\ncash balance, if any.\n\n     19.  Adjustments Upon Changes In Capitalization; Corporate Transactions.\n          ------------------------------------------------------------------ \n\n     (a) Adjustment.  Subject to any required action by the shareholders of the\n         ----------                                                            \nCompany, the number of Shares covered by each option under the Plan which has\nnot yet been exercised and the number of Shares which have been authorized for\nissuance under the Plan but have not yet been placed under option (collectively,\nthe 'Reserves'), as well as the maximum number of shares of Common Stock which\nmay be purchased by a participant in a Purchase Period, the number of shares of\nCommon Stock set forth in Section 13(a)(i) above, and the price per Share of\nCommon Stock covered by each option under the Plan which has not yet been\nexercised, shall be proportionately adjusted for any increase or decrease in the\nnumber of issued Shares resulting from a stock split, reverse stock split, stock\ndividend, combination or reclassification of the Common Stock (including any\nsuch change in the number of Shares of Common Stock effected in connection with\na change in domicile of the Company), or any other increase or decrease in the\nnumber of Shares effected without receipt of consideration by the Company;\nprovided however that conversion of any convertible securities of the Company\nshall not be deemed to have been 'effected without receipt of consideration.'\nSuch adjustment shall be made by the Board, whose determination in that respect\nshall be final, binding and conclusive. Except as expressly provided herein, no\nissue by the Company of shares of stock of any class, or securities convertible\ninto shares of stock of any class, shall affect, and no adjustment by reason\nthereof shall be made with respect to, the number or price of Shares subject to\nan option.\n\n     (b) Corporate Transactions.  In the event of a dissolution or liquidation\n         ----------------------                                               \nof the Company, any Purchase Period and Offering Period then in progress will\nterminate immediately prior to the consummation of such action, unless otherwise\nprovided by the Board. In the event of a Corporate Transaction, each option\noutstanding under the Plan shall be assumed or an equivalent option shall be\nsubstituted by the successor corporation or a parent or Subsidiary of such\nsuccessor corporation. In the event that the successor corporation refuses to\nassume or substitute for outstanding options, each Purchase Period and Offering\nPeriod then in progress shall be shortened and a new Purchase Date shall be set\n(the 'New Purchase Date'), as of which date any Purchase Period and Offering\nPeriod then in progress will terminate. The New Purchase Date shall be on or\nbefore the date of consummation of the transaction and the Board shall notify\neach participant in writing, at least ten (10) days prior to the New Purchase\nDate, that the Purchase Date for his or her option has been changed to the New\nPurchase Date and that his or her option\n\n                                       8\n\n \nwill be exercised automatically on the New Purchase Date, unless prior to such\ndate he or she has withdrawn from the Offering Period as provided in Section 10.\nFor purposes of this Section 19, an option granted under the Plan shall be\ndeemed to be assumed, without limitation, if, at the time of issuance of the\nstock or other consideration upon a Corporate Transaction, each holder of an\noption under the Plan would be entitled to receive upon exercise of the option\nthe same number and kind of shares of stock or the same amount of property, cash\nor securities as such holder would have been entitled to receive upon the\noccurrence of the transaction if the holder had been, immediately prior to the\ntransaction, the holder of the number of Shares of Common Stock covered by the\noption at such time (after giving effect to any adjustments in the number of\nShares covered by the option as provided for in this Section 19); provided\nhowever that if the consideration received in the transaction is not solely\ncommon stock of the successor corporation or its parent (as defined in Section\n424(e) of the Code), the Board may, with the consent of the successor\ncorporation, provide for the consideration to be received upon exercise of the\noption to be solely common stock of the successor corporation or its parent\nequal in Fair Market Value to the per Share consideration received by holders of\nCommon Stock in the transaction. The Board may, if it so determines in the\nexercise of its sole discretion, also make provision for adjusting the Reserves,\nas well as the price per Share of Common Stock covered by each outstanding\noption, in the event that the Company effects one or more reorganizations,\nrecapitalizations, rights offerings or other increases or reductions of Shares\nof its outstanding Common Stock, and in the event of the Company's being\nconsolidated with or merged into any other corporation.\n\n     20.  Amendment Or Termination.\n          ------------------------ \n\n     (a) The Board may at any time and for any reason terminate or amend the\nPlan. Except as provided in Section 19, no such termination of the Plan may\naffect options previously granted, provided that the Plan or an Offering Period\nmay be terminated by the Board on a Purchase Date or by the Board's setting a\nnew Purchase Date with respect to an Offering Period and Purchase Period then in\nprogress if the Board determines that termination of the Plan and\/or the\nOffering Period is in the best interests of the Company and the shareholders or\nif continuation of the Plan and\/or the Offering Period would cause the Company\nto incur adverse accounting charges as a result of a change after the effective\ndate of the Plan in the generally accepted accounting rules applicable to the\nPlan. Except as provided in Section 19 and in this Section 20, no amendment to\nthe Plan shall make any change in any option previously granted which adversely\naffects the rights of any participant. In addition, to the extent necessary to\ncomply with Rule 16b-3 under the Exchange Act, or under Section 423 of the Code\n(or any successor rule or provision or any applicable law or regulation), the\nCompany shall obtain shareholder approval in such a manner and to such a degree\nas so required.\n\n     (b) Without shareholder consent and without regard to whether any\nparticipant rights may be considered to have been adversely affected, the Board\n(or its committee) shall be entitled to change the Offering Periods and Purchase\nPeriods, limit the frequency and\/or number of changes in the amount withheld\nduring an Offering Period, establish the exchange ratio applicable to amounts\nwithheld in a currency other than U.S. dollars, permit payroll withholding in\nexcess of the amount designated by a participant in order to adjust for delays\nor mistakes in the Company's processing of properly completed withholding\nelections, establish reasonable waiting and adjustment periods and\/or accounting\nand crediting procedures to ensure that amounts applied\n\n                                       9\n\n \ntoward the purchase of Common Stock for each participant properly correspond\nwith amounts withheld from the participant's Compensation, and establish such\nother limitations or procedures as the Board (or its committee) determines in\nits sole discretion advisable which are consistent with the Plan.\n\n     21.  Notices.  All notices or other communications by a participant to the\n          -------                                                              \nCompany under or in connection with the Plan shall be deemed to have been duly\ngiven when received in the form specified by the Company at the location, or by\nthe person, designated by the Company for the receipt thereof.\n\n     22.  Conditions Upon Issuance Of Shares.  Shares shall not be issued with\n          ----------------------------------                                  \nrespect to an option unless the exercise of such option and the issuance and\ndelivery of such Shares pursuant thereto shall comply with all applicable\nprovisions of law, domestic or foreign, including, without limitation, the\nSecurities Act of 1933, as amended, the Exchange Act, the rules and regulations\npromulgated thereunder, applicable state securities laws and the requirements of\nany stock exchange upon which the Shares may then be listed, and shall be\nfurther subject to the approval of counsel for the Company with respect to such\ncompliance. As a condition to the exercise of an option, the Company may require\nthe person exercising such option to represent and warrant at the time of any\nsuch exercise that the Shares are being purchased only for investment and\nwithout any present intention to sell or distribute such Shares if, in the\nopinion of counsel for the Company, such a representation is required by any of\nthe aforementioned applicable provisions of law.\n\n     23.  Term Of Plan; Effective Date.\n          ---------------------------- \n\n     (a) The Plan was adopted by the Board on August 24, 1999 and shall become\neffective upon the IPO Date, provided no purchase option granted under the Plan\nshall be exercised, and no shares of Common Stock shall be issued hereunder,\nuntil (i) the Plan shall have been approved by the shareholders of the Company\nand (ii) the Company shall have complied with all applicable requirements of the\nSecurities Act of 1933, as amended (including the registration of the shares of\nCommon Stock issuable under the Plan on a Form S-8 registration statement filed\nwith the Securities and Exchange Commission), all applicable listing\nrequirements of any stock exchange (or the Nasdaq National Market, if\napplicable) on which the Common Stock is listed for trading and all other\napplicable requirements established by law or regulation. In the event such\nshareholder approval is not obtained, or such compliance is not effected, within\ntwelve (12) months after the date on which the Plan is adopted by the Board, the\nPlan shall terminate and have no further force or effect, and all sums collected\nfrom Participants during the initial offering period hereunder shall be\nrefunded.\n\n     (b) Unless sooner terminated by the Board, the Plan shall terminate upon\nthe earliest of (i) the last business day in July 2009, (ii) the date on which\nall shares available for issuance under the Plan shall have been sold pursuant\nto purchase rights exercised under the Plan or (iii) the date on which all\npurchase rights are exercised in connection with a Corporate Transaction. No\nfurther purchase rights shall be granted or exercised, and no further payroll\ndeductions shall be collected, under the Plan following such termination.\n\n                                       10\n\n \n     24.  Additional Restrictions of Rule 16b-3.  The terms and conditions of\n          -------------------------------------                              \noptions granted hereunder to, and the purchase of Shares by, persons subject to\nSection 16 of the Exchange Act shall comply with the applicable provisions of\nRule 16b-3.  This Plan shall be deemed to contain, and such options shall\ncontain, and the Shares issued upon exercise thereof shall be subject to, such\nadditional conditions and restrictions as may be required by Rule 16b-3 to\nqualify for the maximum exemption from Section 16 of the Exchange Act with\nrespect to Plan transactions.\n\n     25.  General Provisions.\n          ------------------ \n\n     (a) All costs and expenses incurred in the administration of the Plan shall\nbe paid by the Company; however, each Plan participant shall bear all costs and\nexpenses incurred by such individual in the sale or other disposition of any\nshares purchased under the Plan.\n\n     (b) Nothing in the Plan shall confer upon any participant any right to\ncontinue in the employ of the Company or any Subsidiary for any period of\nspecific duration or interfere with or otherwise restrict in any way the rights\nof the Company (or any Subsidiary employing such person) or of the participant,\nwhich rights are hereby expressly reserved by each, to terminate such person's\nemployment at any time for any reason, with or without cause.\n\n     (c) The provisions of the Plan shall be governed by the laws of the State\nof California without resort to its conflict-of-laws rules.\n\n                                       11\n\n \n                                SONICWALL, INC.\n                       1999 EMPLOYEE STOCK PURCHASE PLAN\n                            SUBSCRIPTION AGREEMENT\n                                                             New Election ______\n                                                       Change of Election ______\n\n     1.  I, ________________________, hereby elect to participate in the\nSonicWALL, Inc. 1999 Employee Stock Purchase Plan (the 'Plan') for the Offering\nPeriod ______________, ____ to _______________, ____, and subscribe to and\npurchase shares of the Company's Common Stock in accordance with this\nSubscription Agreement and the Plan.\n\n     2.  I elect to have Contributions in the amount of ____% of my\nCompensation, as those terms are defined in the Plan, applied to this purchase.\nI understand that this amount must not be less than 1% and not more than 15% of\nmy Compensation during the Offering Period. (Please note that no fractional\npercentages are permitted).\n\n     3.  I hereby authorize payroll deductions from each paycheck during the\nOffering Period at the rate stated in Item 2 of this Subscription Agreement. I\nunderstand that all payroll deductions made by me shall be credited to my\naccount under the Plan and that I may not make any additional payments into such\naccount. I understand that all payments made by me shall be accumulated for the\npurchase of shares of Common Stock at the applicable purchase price determined\nin accordance with the Plan. I further understand that, except as otherwise set\nforth in the Plan, shares will be purchased for me automatically on the Purchase\nDate of each Offering Period unless I otherwise withdraw from the Plan by giving\nwritten notice to the Company for such purpose.\n\n     4.  I understand that I may discontinue at any time prior to the Purchase\nDate my participation in the Plan as provided in Section 10 of the Plan. I also\nunderstand that I can increase or decrease the rate of my Contributions on one\noccasion only with respect to any increase and one occasion only with respect to\nany decrease during any Purchase Period by completing and filing a new\nSubscription Agreement with such increase or decrease taking effect as of the\nbeginning of the calendar month following the date of filing of the new\nSubscription Agreement, if filed at least ten (10) business days prior to the\nbeginning of such month. Further, I may change the rate of deductions for future\nOffering Periods by filing a new Subscription Agreement, and any such change\nwill be effective as of the beginning of the next Offering Period. In addition,\nI acknowledge that, unless I discontinue my participation in the Plan as\nprovided in Section 10 of the Plan, my election will continue to be effective\nfor each successive Offering Period.\n\n     5.  I have received a copy of the Company's most recent description of the\nPlan and a copy of the complete 'SonicWALL, Inc. 1999 Employee Stock Purchase\nPlan.' I understand that my participation in the Plan is in all respects subject\nto the terms of the Plan.\n\n                                       1\n\n \n     6.  Shares purchased for me under the Plan should be issued in the name(s)\nof (name of employee or employee and spouse only): __________________________\n____________________________________\n\n     7.  In the event of my death, I hereby designate the following as my\nbeneficiary(ies) to receive all payments and shares due to me under the Plan:\n\nNAME: (Please print)                      ___________________________________  \n                                          (First)    (Middle)    (Last)\n\n____________________                      ___________________________________  \n(Relationship)                            (Address)\n\n                                          ___________________________________  \n\n     8.  I understand that if I dispose of any shares received by me pursuant to\nthe Plan within two (2) years after the Offering Date (the first day of the\nOffering Period during which I purchased such shares) or within one (1) year\nafter the Purchase Date, I will be treated for federal income tax purposes as\nhaving received ordinary compensation income at the time of such disposition in\nan amount equal to the excess of the fair market value of the shares on the\nPurchase Date over the price which I paid for the shares, regardless of whether\nI disposed of the shares at a price less than their fair market value at the\nPurchase Date. The remainder of the gain or loss, if any, recognized on such\ndisposition will be treated as capital gain or loss.\n\n     I hereby agree to notify the Company in writing within thirty (30) days\nafter the date of any such disposition, and I will make adequate provision for\nfederal, state or other tax withholding obligations, if any, which arise upon\nthe disposition of the Common Stock. The Company may, but will not be obligated\nto, withhold from my compensation the amount necessary to meet any applicable\nwithholding obligation including any withholding necessary to make available to\nthe Company any tax deductions or benefits attributable to the sale or early\ndisposition of Common Stock by me.\n\n     9.  If I dispose of such shares at any time after expiration of the two (2)\nyear and one (1) year holding periods, I understand that I will be treated for\nfederal income tax purposes as having received compensation income only to the\nextent of an amount equal to the lesser of (1) the excess of the fair market\nvalue of the shares at the time of such disposition over the purchase price\nwhich I paid for the shares under the option, or (2) 15% of the fair market\nvalue of the shares on the Offering Date.  The remainder of the gain or loss, if\nany, recognized on such disposition will be treated as capital gain or loss.\n\n     I understand that this tax summary is only a summary and is subject to\nchange. I further understand that I should consult a tax advisor concerning the\ntax implications of the purchase and sale of stock under the Plan.\n\n                                       2\n\n \n     10.  I hereby agree to be bound by the terms of the Plan. The effectiveness\nof this Subscription Agreement is dependent upon my eligibility to participate\nin the Plan.\n\nSIGNATURE: _______________________________\n\nSOCIAL SECURITY NUMBER: __________________\n\nDATE: ____________________________________\n\nSPOUSE'S SIGNATURE (necessary if beneficiary is not spouse):\n\n_____________________________________ \n(Signature)\n\n_____________________________________ \n(Print name)\n\n                                       3\n\n \n                                SONICWALL, INC.\n                       1999 EMPLOYEE STOCK PURCHASE PLAN\n                             NOTICE OF WITHDRAWAL\n\n     I, __________________________, hereby elect to withdraw my participation in\nthe SonicWALL, Inc. 1999 Employee Stock Purchase Plan (the 'Plan') for the\nOffering Period that began on _________ ___, _____. This withdrawal covers all\nContributions credited to my account and is effective on the date designated\nbelow. I understand that all Contributions credited to my account will be paid\nto me within ten (10) business days of receipt by the Company of this Notice of\nWithdrawal and that my option for the current period will automatically\nterminate, and that no further Contributions for the purchase of shares can be\nmade by me during the Offering Period. The undersigned further understands and\nagrees that he or she shall be eligible to participate in succeeding offering\nperiods only by delivering to the Company a new Subscription Agreement.\n\nDated: __________________________\n\n_________________________________ \nSignature of Employee\n\n_________________________________ \nSocial Security Number\n\n\n<\/pre>\n","protected":false},"template":"","meta":{"_acf_changed":false,"_stopmodifiedupdate":true,"_modified_date":"","_cloudinary_featured_overwrite":false},"corporate_contracts_companies":[8863],"corporate_contracts_industries":[],"corporate_contracts_types":[9539,9545],"class_list":["post-38346","corporate_contracts","type-corporate_contracts","status-publish","hentry","corporate_contracts_companies-sonicwall-inc","corporate_contracts_types-compensation","corporate_contracts_types-compensation__esp"],"acf":[],"_links":{"self":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts\/38346","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts"}],"about":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/types\/corporate_contracts"}],"wp:attachment":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/media?parent=38346"}],"wp:term":[{"taxonomy":"corporate_contracts_companies","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_companies?post=38346"},{"taxonomy":"corporate_contracts_industries","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_industries?post=38346"},{"taxonomy":"corporate_contracts_types","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_types?post=38346"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}