eHealth, Inc 10-Q for FY2021 Q2

eHealth, Inc. (EHTH)

10-Q 2021-08-09 For: 2021-06-30

Added on April 07, 2026

About this 10-Q

eHealth, Inc filed this 10-Q on August 9, 2021, covering the quarter ended June 30, 2021 (FY2021 Q2).

Headline figures

Quarter ended June 30, 2021, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $96.56M; up 8.8% from $88.77M a year earlier
Net loss: $18.41M; compared with a net loss of $3.37M a year earlier
Diluted EPS: -$0.86; compared with -$0.13 a year earlier

Search and read filings like this one from Claude or ChatGPT with the SEC filings MCP server →


Delaware						56-2357876
(State or other jurisdiction of incorporation or organization)						(I.R.S Employer Identification No)


Title of each class	Trading Symbol	Name of each exchange on which registered
Common Stock, par value $0.001 per share	EHTH	The Nasdaq Stock Market LLC


PART I	FINANCIAL INFORMATION	PAGE
Summary of Risk Factors		2
Item 1.	Financial Statements (unaudited)	2
	Condensed Consolidated Balance Sheets as of June 30, 2021 and December 31, 2020	2
	Condensed Consolidated Statements of Comprehensive Income (Loss) for the Three and Six Months Ended June 30, 2021 and 2020	3
	Condensed Consolidated Statements of Stockholders' Equity for the Three and Six Months Ended June 30, 2021 and 2020	5
	Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2021 and 2020	6
	Notes to Condensed Consolidated Financial Statements	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	26
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	50
Item 4.	Controls and Procedures	51
PART II	OTHER INFORMATION
Item 1.	Legal Proceedings	52
Item 1A.	Risk Factors	52
Item 6.	Exhibits	77
	Signatures	78


	June 30, 2021		December 31, 2020 *
Assets
Current assets:
Cash and cash equivalents	$	229,260	$	43,759
Short-term marketable securities	75,830		49,620
Accounts receivable	3,534		1,799
Contract assets – commissions receivable – current	181,673		219,153
Prepaid expenses and other current assets	11,594		16,661
Total current assets	501,891		330,992
Contract assets – commissions receivable – non-current	573,949		573,252
Property and equipment, net	14,296		14,609

Operating lease right-of-use assets	39,996		42,558
Restricted cash	3,354		3,354
Intangible assets, net	8,273		8,569
Goodwill	40,233		40,233
Other assets	29,746		26,455
Total assets	$	1,211,738	$	1,040,022
Liabilities, Series A preferred stock, and stockholders’ equity
Current liabilities:
Accounts payable	$	15,423	$	36,921
Accrued compensation and benefits	16,833		20,542
Accrued marketing expenses	10,141		17,788

Lease liabilities – current	5,443		5,192
Deferred revenue	1,363		308
Other current liabilities	3,806		3,657
Total current liabilities	53,009		84,408
Deferred income taxes – non-current	64,925		72,317
Lease liabilities – non-current	38,577		41,369
Other non-current liabilities	4,969		4,370
Total liabilities	161,480		202,464
Commitments and contingencies
Series A convertible preferred stock	218,504		—
Stockholders’ equity:
Common stock	38		38
Additional paid-in capital	738,906		721,013
Treasury stock, at cost	(199,998)		(199,998)
Retained earnings	292,467		316,155
Accumulated other comprehensive income	341		350
Total stockholders’ equity	831,754		837,558
Total liabilities, Series A preferred stock, and stockholders’ equity	$	1,211,738	$	1,040,022


	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Revenue:
Commission	$	89,823	$	80,773	$	216,875	$	180,442
Other	6,734		7,993		13,896		14,732
Total revenue	96,557		88,766		230,771		195,174
Operating costs and expenses:
Cost of revenue	246		540		1,242		1,678
Marketing and advertising	44,581		32,873		95,455		70,637
Customer care and enrollment	38,362		27,148		72,524		57,683
Technology and content	20,464		13,373		43,627		29,113
General and administrative	18,118		20,713		41,172		40,366
Amortization of intangible assets	119		373		295		920

Restructuring charges	—		—		2,431		—

Total operating costs and expenses	121,890		95,020		256,746		200,397
Loss from operations	(25,333)		(6,254)		(25,975)		(5,223)
Other income, net	172		452		322		825
Loss before benefit from income taxes	(25,161)		(5,802)		(25,653)		(4,398)
Benefit from income taxes	(6,752)		(2,432)		(6,444)		(4,480)
Net income (loss)	(18,409)		(3,370)		(19,209)		82

Paid-in-kind dividends for preferred stock	(3,082)		—		(3,082)		—
Change in preferred stock redemption value	(1,397)		—		(1,397)		—

Net income (loss) attributable to common stockholders	$	(22,888)	$	(3,370)	$	(23,688)	$	82

Net income (loss) per share attributable to common stockholders:
Basic	$	(0.86)	$	(0.13)	$	(0.89)	$	—
Diluted	$	(0.86)	$	(0.13)	$	(0.89)	$	—
Weighted-average number of shares used in per share amounts:
Basic	26,677		26,358		26,639		25,539
Diluted	26,677		26,358		26,639		26,758
Comprehensive income (loss):
Net income (loss)	$	(18,409)	$	(3,370)	$	(19,209)	$	82
Unrealized holding gain (loss) for available for sales debt securities, net of tax	(35)		143		(51)		168
Foreign currency translation adjustment	59		—		42		(31)
Comprehensive income (loss)	$	(18,385)	$	(3,227)	$	(19,218)	$	219


Three Months Ended June 30, 2021
	Common Stock			Additional Paid-in Capital		Treasury Stock			Retained Earnings		Accumulated Other Comprehensive Income		Total Stockholders’ Equity
	Shares	Amount				Shares	Amount
Balance as of March 31, 2021	37,993	$	38	$	728,213	11,912	$	(199,998)	$	315,355	$	317	$	843,925
Issuance of common stock in connection with equity incentive plans	63	—		517		—	—		—		—		517
Repurchase of shares to satisfy employee tax withholding obligations	—	—		(870)		13	—		—		—		(870)
Changes in convertible preferred stock	—	—		—		—	—		(4,479)		—		(4,479)
Issuance of common stock for employee stock purchase program	38	—		2,248		—	—		—		—		2,248
Stock-based compensation	—	—		8,798		—	—		—		—		8,798
Other comprehensive income, net of tax	—	—		—		—	—		—		24		24
Net loss	—	—		—		—	—		(18,409)		—		(18,409)
Balance as of June 30, 2021	38,094	$	38	$	738,906	11,925	$	(199,998)	$	292,467	$	341	$	831,754


Three Months Ended June 30, 2020
	Common Stock			Additional Paid-in Capital		Treasury Stock			Retained Earnings		Accumulated Other Comprehensive Income		Total Stockholders’ Equity
	Shares	Amount				Shares	Amount
Balance as of March 31, 2020	37,258	$	37	$	717,380	11,649	$	(199,998)	$	274,157	$	110	$	791,686

Issuance of common stock in connection with equity incentive plans	115	—		223		—	—		—		—		223
Repurchase of shares to satisfy employee tax withholding obligations	—	—		(3,785)		49	—		—		—		(3,785)


Stock-based compensation	—	—		7,158		—	—		—		—		7,158
Other comprehensive income, net of tax	—	—		—		—	—		—		143		143
Net loss	—	$	—	$	—	—	$	—	$	(3,370)	$	—	$	(3,370)
Balance as of June 30, 2020	37,373	$	37	$	720,976	11,698	$	(199,998)	$	270,787	$	253	$	792,055


Six Months Ended June 30, 2021
	Common Stock			Additional Paid-in Capital		Treasury Stock			Retained Earnings		Accumulated Other Comprehensive Income		Total Stockholders’ Equity
	Shares	Amount				Shares	Amount
Balance as of December 31, 2020	37,755	$	38	$	721,013	11,831	$	(199,998)	$	316,155	$	350	$	837,558
Issuance of common stock in connection with equity incentive plans	301	—		802		—	—		—		—		802
Repurchase of shares to satisfy employee tax withholding obligations	—	—		(5,907)		94	—		—		—		(5,907)
Changes in convertible preferred stock	—	—		—		—	—		(4,479)		—		(4,479)
Issuance of common stock for employee stock purchase program	38	—		2,248		—	—		—		—		2,248
Stock-based compensation	—	—		20,750		—	—		—		—		20,750
Other comprehensive income, net of tax	—	—		—		—	—		—		(9)		(9)
Net loss	—	—		—		—	—		(19,209)		—		(19,209)
Balance as of June 30, 2021	38,094	$	38	$	738,906	11,925	$	(199,998)	$	292,467	$	341	$	831,754


Six Months Ended June 30, 2020
	Common Stock			Additional Paid-in Capital		Treasury Stock			Retained Earnings		Accumulated Other Comprehensive Income		Total Stockholders’ Equity
	Shares	Amount				Shares	Amount
Balance as of December 31, 2019	34,752	$	35	$	455,159	11,616	$	(199,998)	$	271,852	$	116	$	527,164
Cumulative effect from the adoption of ASU 2016-13	—	—		—		—	—		(1,147)		—		(1,147)
Issuance of common stock in connection with equity incentive plans	256	—		1,314		—	—		—		—		1,314
Repurchase of shares to satisfy employee tax withholding obligations	—	—		(8,160)		82	—		—		—		(8,160)
Shares issued in equity offering	2,070	2		228,022		—	—		—		—		228,024
Settlement of earnout liability	295	—		28,521		—	—		—		—		28,521
Stock-based compensation	—	—		16,120		—	—		—		—		16,120
Other comprehensive income, net of tax	—	—		—		—	—		—		137		137
Net income	—	—		—		—	—		82		—		82
Balance as of June 30, 2020	37,373	$	37	$	720,976	11,698	$	(199,998)	$	270,787	$	253	$	792,055


	June 30, 2021		December 31, 2020
Cash	$	35,192	$	39,552
Cash equivalents	194,068		4,207
Cash and cash equivalents	229,260		43,759
Restricted cash	3,354		3,354
Total cash, cash equivalents and restricted cash	$	232,614	$	47,113



Beginning balance	$	2,026
Change in allowance	(225)
Ending balance	$	1,801


	Six Months Ended June 30, 2021
	Medicare Segment		IFP/SMB Segment		Total
Beginning balance	$	739,637	$	52,768	$	792,405
Commission revenue from members approved during the period	193,276		11,603		204,879
Commission revenue from renewals of small business members during the periods (1)	—		4,410		4,410
Net commission revenue adjustments from members approved in prior periods	(11,529)		19,115		7,586
Cash receipts	(230,446)		(23,437)		(253,883)
Net change in credit loss allowance	206		19		225
Ending balance	$	691,144	$	64,478	$	755,622


	June 30, 2021		December 31, 2020
Humana	27	%	21	%
UnitedHealthCare (1)	23	%	21	%
Aetna (1)	17	%	20	%
Centene (1)(2)	8	%	11	%


	June 30, 2021		December 31, 2020
Prepaid maintenance contracts	$	6,270	$	7,715
Prepaid licenses	2,302		—
Prepaid expenses	2,149		6,628
Prepaid insurance	430		1,672

Others	443		646
Prepaid expenses and other current assets	$	11,594	$	16,661


Level 1			Unadjusted quoted prices in active markets for identical assets or liabilities.
Level 2			Unadjusted quoted prices in active markets for similar assets or liabilities; unadjusted quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability.
Level 3			Unobservable inputs for the asset or liability.


	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Medicare
Medicare Advantage	$	69,142	$	58,586	$	172,667	$	126,933
Medicare Supplement	3,921		9,893		12,143		25,063
Medicare Part D	(6,027)		1,158		(4,291)		6,819
Total Medicare	67,036		69,637		180,519		158,815
Individual and Family (1)
Non-Qualified Health Plans	11,076		1,224		14,443		2,670
Qualified Health Plans	2,838		883		4,938		2,093
Total Individual and Family	13,914		2,107		19,381		4,763
Ancillary
Short-term	1,513		2,070		3,269		4,286
Dental	3,660		596		5,388		1,339
Vision	934		187		1,139		430
Other	1,021		797		1,056		1,846
Total Ancillary	7,128		3,650		10,852		7,901
Small Business	2,290		2,281		5,513		5,252
Commission Bonus	(545)		3,098		610		3,711
Total Commission Revenue	89,823		80,773		216,875		180,442
Other Revenue
Sponsorship and Advertising Revenue	6,023		7,369		11,837		13,259
Other	711		624		2,059		1,473
Total Other Revenue	6,734		7,993		13,896		14,732
Total Revenue	$	96,557	$	88,766	$	230,771	$	195,174


	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Medicare
Commission Revenue from Members Approved During the Period (1)	$	78,598	$	72,165	$	193,276	$	153,290
Net Commission Revenue from Members Approved in Prior Periods (2)	(11,543)		685		(11,529)		9,664
Total Medicare Segment Commission Revenue	$	67,055	$	72,850	$	181,747	$	162,954
Individual, Family and Small Business
Commission Revenue from Members Approved During the Period (1)	$	5,208	$	4,362	$	11,603	$	10,158
Commission Revenue from Renewals of Small Business Members During the Period (3)	1,723		1,487		4,410		3,883
Net Commission Revenue from Members Approved in Prior Periods (2)	15,837		2,074		19,115		3,447
Total IFP/SMB Segment Commission Revenue	$	22,768	$	7,923	$	35,128	$	17,488

Total Commission Revenue from Members Approved During the Period (1)	$	83,806	$	76,527	$	204,879	$	163,448
Commission Revenue from Renewals of Small Business Members During the Period (3)	1,723		1,487		4,410		3,883
Total Net Commission Revenue from Members Approved in Prior Periods (2)(4)	4,294		2,759		7,586		13,111
Total Commission Revenue	$	89,823	$	80,773	$	216,875	$	180,442


	June 30, 2021
	Carrying Value		Level 1		Level 2		Level 3		Total
Assets
Cash equivalents
Money market funds	$	49,999	$	49,999	$	—	$	—	$	49,999
Commercial paper	144,069		—		144,069		—		144,069

Short-term marketable securities
Agency bonds	11,289		—		11,289		—		11,289
Commercial paper	62,003		—		62,003		—		62,003

Corporate bond	2,538		—		2,538		—		2,538


Total assets measured at fair value	$	269,898	$	49,999	$	219,899	$	—	$	269,898


	As of June 30, 2021
	Amortized Cost		Fair Value
Due in 1 year	$	269,895	$	269,898


	Amortized Cost		Unrealized Gain		Unrealized Loss		Fair Value
Cash equivalents
Money market funds	$	49,999	$	—	$	—	$	49,999
Commercial paper	144,072		1		(4)		144,069

Short-term marketable securities
Agency bonds	11,283		6		—		11,289
Commercial paper	62,003		3		(3)		62,003
Corporate bond	2,538		—		—		2,538


Total	$	269,895	$	10	$	(7)	$	269,898


Gross proceeds	$	225,000
Less: issuance costs	10,975
Net proceeds	$	214,025

Balance as of Closing Date	$	214,025
Accrued paid-in-kind dividends	3,083
Change in preferred stock redemption value	1,396
Balance as of June 30, 2021	$	218,504


For the Years Ending December 31,
Remainder of 2021	$	5,273
2022	6,537
2023	5,236
2024	1,970
2025	—
Thereafter	—
Total	$	19,016


	June 30, 2021		December 31, 2020
United States	$	43,519	$	40,500
China	523		565
Total	$	44,042	$	41,065


	June 30, 2021			December 31, 2020
Weighted-average remaining lease term of operating leases	6.8 years			7.2 years
Weighted-average discount rate used to recognize operating lease right-of-use-assets	5.4		%	5.4		%
	Six Months Ended June 30,
	2021			2020
Operating lease expense	$	3,825		$	4,272
Cash outflows related to operating leases	3,802			3,199


Year ending December 31,
Remainder of 2021	$	3,842
2022	7,701
2023	8,033
2024	7,832
2025	8,009
Thereafter	19,407
Total lease payments (1)	54,824
Less imputed interest	(10,804)
Total	$	44,020


	Three Months Ended June 30,		% Change		Six Months Ended June 30,		% Change
	2021	2020			2021	2020
Medicare:
Medicare Advantage	78,569	60,477	30	%	185,453	125,375	48	%
Medicare Supplement	6,130	8,794	(30)	%	13,912	19,632	(29)	%
Medicare Part D	6,976	7,603	(8)	%	14,987	16,569	(10)	%
Total Medicare	91,675	76,874	19	%	214,352	161,576	33	%
Individual and Family:
Non-Qualified Health Plans	4,120	2,798	47	%	9,729	7,618	28	%
Qualified Health Plans	5,353	2,512	113	%	11,058	7,057	57	%
Total Individual and Family	9,473	5,310	78	%	20,787	14,675	42	%
Ancillaries:
Short-term	6,462	9,446	(32)	%	14,338	21,584	(34)	%
Dental	10,406	7,722	35	%	21,576	17,432	24	%
Vision	4,566	3,764	21	%	9,628	8,265	16	%
Other	2,614	3,946	(34)	%	5,017	8,271	(39)	%
Total Ancillaries	24,048	24,878	(3)	%	50,559	55,552	(9)	%
Small Business	2,588	3,118	(17)	%	5,536	6,721	(18)	%
Total Approved Members	127,784	110,180	16	%	291,234	238,524	22	%


	As of June 30,		% Change
	2021	2020
Medicare (1)
Medicare Advantage	562,905	407,243	38	%
Medicare Supplement	99,306	94,838	5	%
Medicare Part D	214,744	213,949	—	%
Total Medicare	876,955	716,030	22	%
Individual and Family (2)	107,466	115,832	(7)	%
Ancillaries (3)
Short-term	18,032	23,203	(22)	%
Dental	115,990	118,198	(2)	%
Vision	69,062	68,666	1	%
Other	33,015	35,404	(7)	%
Total Ancillaries	236,099	245,471	(4)	%
Small Business (4)	46,450	40,090	16	%
Total Estimated Membership	1,266,970	1,117,423	13	%


	Three Months Ended June 30,						Change				Six Months Ended June 30,						Change
	2021			2020			$		%		2021			2020			$		%
Commission	$	89,823		$	80,773		$	9,050	11	%	$	216,875		$	180,442		$	36,433	20	%
% of total revenue	93		%	91		%					94		%	92		%
Other	6,734			7,993			(1,259)		(16)	%	13,896			14,732			(836)		(6)	%
% of total revenue	7		%	9		%					6		%	8		%
Total revenue	$	96,557		$	88,766		$	7,791	9	%	$	230,771		$	195,174		$	35,597	18	%


	June 30, 2021		December 31, 2020
Cash and cash equivalents (1) (2)	$	229,260	$	43,759
Short-term marketable securities (2)	75,830		49,620
Restricted cash	3,354		3,354
Total cash, cash equivalents, short-term marketable securities, and restricted cash	$	308,444	$	96,733


		EHEALTH, INC.
Date:	August 6, 2021	/s/ Scott N. Flanders
		Scott N. Flanders Chief Executive Officer (Principal Executive Officer)
Date:	August 6, 2021	/s/ John Pierantoni
		John Pierantoni Chief Accounting Officer (Principal Financial Officer)


Name of Participant:						«FIRSTNAME» «LASTNAME»
Total Number of Shares:						«SHARESGRANTED»
Date of Grant:						«AWARDDATE»
Vesting Commencement Date:						«VESTINGSTARTDATE»
Vesting Schedule:						«VESTINGSCHEDULE», subject to your continued service through each vesting date.


Grant						The Company hereby grants you an award of restricted Stock Units (“RSUs”), as set forth in the Notice of Stock Unit Grant (the “Notice of Grant”) and subject to the terms and conditions in this Agreement and the Company’s 2014 Equity Incentive Plan (the “Plan”). Unless otherwise defined herein, the terms defined in the Plan shall have the same defined meanings in this Stock Unit Agreement.

Company’s Obligation						Each RSU represents the right to receive a share of Stock (a “Share”) on the vesting date. Unless and until the RSUs vest, you will have no right to receive Shares under such RSUs. Prior to actual distribution of Shares pursuant to any vested RSUs, such RSUs will represent an unsecured obligation of the Company, payable (if at all) only from the general assets of the Company. Settlement of any vested RSUs shall be made in whole Shares only.

Vesting						Subject to the next paragraph (Forfeiture upon Termination of Service), the RSUs awarded by this Agreement will vest according to the vesting schedule specified in the Notice of Grant. If you commence working on a part-time basis, then the vesting schedule specified in the Notice of Grant may be adjusted in accordance with the Company’s part-time work policy or the terms of an agreement between you and the Company pertaining to your part-time schedule.

Forfeiture upon Termination of Service						Notwithstanding any contrary provision of this Agreement or the Notice of Grant, if you terminate Service for any or no reason prior to vesting, the unvested RSUs awarded by this Agreement will thereupon be forfeited at no cost to the Company.

Leaves of Absence						For purposes of this RSU, your Service does not terminate when you go on a military leave, a sick leave or another bona fide leave of absence, if the leave was approved by the Company in writing and if continued crediting of Service is required by the terms of the leave or by applicable law. But your Service terminates when the approved leave ends, unless you immediately return to active work. If you go on a leave of absence, then the vesting schedule specified in the Notice of Grant may be adjusted in accordance with the Company’s leave of absence policy or the terms of your leave.

Payment after Vesting						Any RSUs that vest hereunder will be paid to you (or in the event of your death, to your estate) in Shares. Subject to any payment delay required under the following paragraph, such vested RSUs shall be paid in whole Shares as soon as practicable after vesting, but in each such case within sixty (60) days following the vesting date. In no event will you be permitted, directly or indirectly, to specify the taxable year of payment of any RSUs payable under this Agreement.


						Notwithstanding anything in the Plan or this Agreement or any other agreement (whether entered into before, on or after Date of Grant), if the vesting of the balance, or some lesser portion of the balance, of the RSUs is accelerated in connection with your termination of Service (provided that such termination is a “separation from service” within the meaning of Section 409A, as determined by the Company), other than due to your death, and if (x) you are a “specified employee” within the meaning of Section 409A at the time of such termination of Service and (y) the payment of such accelerated RSUs will result in the imposition of additional tax under Section 409A if paid to you on or within the six (6) month period following your termination of Service, then the payment of such accelerated RSUs will not be made until the date six (6) months and one (1) day following the date of your termination of Service, unless you die following your termination of Service, in which case, the RSUs will be paid in Shares to your estate as soon as practicable following your death.

Section 409A						It is the intent of this Agreement that it and all payments and benefits hereunder be exempt from, or comply with, the requirements of Section 409A so that none of the RSUs provided under this Agreement or Shares issuable thereunder will be subject to the additional tax imposed under Section 409A, and any ambiguities herein will be interpreted to be so exempt or so comply. Each payment payable under this Award Agreement is intended to constitute a separate payment for purposes of Treasury Regulation Section 1.409A-2(b)(2). For purposes of this Agreement, “Section 409A” means Section 409A of the Code, and any final Treasury Regulations and Internal Revenue Service guidance thereunder, as each may be amended from time to time.

Tax Withholding						Notwithstanding any contrary provision of this Agreement, no Shares shall be distributed to you unless and until you have made satisfactory arrangements with respect to the payment of income, employment and any other taxes which must be withheld with respect to such Shares. The Administrator, in its sole discretion and pursuant to such procedures as it may specify from time to time, may permit you to satisfy such tax withholding obligation, in whole or in part by one or more of the following: (a) paying cash, (b) electing to have the Company withhold otherwise deliverable Shares having a value equal to the minimum amount statutorily required to be withheld, (c) delivering to the Company already vested and owned Shares having a value equal to the amount required to be withheld, or (d) selling a sufficient number of such Shares otherwise deliverable to you through such means as the Administrator may determine in its sole discretion (whether through a broker or otherwise) equal to the amount required to be withheld. If you fail to make satisfactory arrangements for the payment of any required tax withholding obligations with respect to Shares that are vesting, the Administrator, in its sole discretion, may require you to permanently forfeit such Shares and the Shares will be returned to the Plan at no cost.


Tax Consequences						You acknowledge that you have reviewed with your own tax advisors the U.S. federal, state, local and foreign tax consequences of this investment and the transactions contemplated by this Agreement. With respect to such matters, you acknowledge and agree that you are relying solely on such advisors and not on any statements or representations of the Company or any of its agents, written or oral. You understand that you (and not the Company) shall be responsible for your own tax liability that may arise as a result of this investment or the transactions contemplated by this Agreement.

Arbitration						You and the Company agree that any and all disputes arising out of the terms of the Notice of Grant, the Plan or this Agreement or their interpretation shall be subject to binding arbitration in Santa Clara County, California before the American Arbitration Association under its California Employment Dispute Resolution Rules, or by a judge to be mutually agreed upon. You and the Company agree that the prevailing party in any arbitration shall be entitled to injunctive relief in any court of competent jurisdiction to enforce the arbitration award. You and the Company agree that the prevailing party in any arbitration shall be awarded reasonable attorney’s fees and costs.

Payments after Death						Any distribution or delivery to be made to you under this Agreement will, if you are then deceased, be made to the administrator or executor of your estate. Any such administrator or executor must furnish the Company with (a) written notice of his or her status as transferee, and (b) evidence satisfactory to the Company to establish the validity of the transfer and compliance with any laws or regulations pertaining to said transfer.

Stockholder Rights						Neither you nor any person claiming under or through you will have any of the rights or privileges of a stockholder of the Company in respect of any Shares deliverable hereunder unless and until certificates representing such Shares will have been issued, recorded on the records of the Company or its transfer agents or registrars, and delivered to you or your broker.

No Effect on Employment						Your employment with the Company and its Subsidiaries is on an at will basis only. Accordingly, the terms of your employment with the Company and its Subsidiaries will be determined from time to time by the Company or the Subsidiary employing you (as the case may be), and the Company or the Subsidiary will have the right, which is hereby expressly reserved, to terminate or change the terms of your employment at any time for any reason whatsoever, with or without good cause or notice.

Notices						Any notice to be given to the Company under the terms of this Agreement will be addressed to the Company at 2625 Augustine Drive, Second Floor, Santa Clara, CA 95054, Attn: Stock Administration, or at such other address as the Company may hereafter designate in writing or electronically.



Grant is Not Transferable						Except to the limited extent provided in paragraph, this grant and the rights and privileges conferred hereby will not be transferred, assigned, pledged or hypothecated in any way (whether by operation of law or otherwise) and will not be subject to sale under execution, attachment or similar process. Upon any attempt to transfer, assign, pledge, hypothecate or otherwise dispose of this grant, or any right or privilege conferred hereby, or upon any attempted sale under any execution, attachment or similar process, this grant and the rights and privileges conferred hereby immediately will become null and void. You may, however, dispose of this award in your will or through a beneficiary designation.

Binding Agreement						Subject to the limitation on the transferability of this grant contained herein, this Agreement will be binding upon and inure to the benefit of the heirs, legatees, legal representatives, successors and assigns of the parties hereto.

Additional Conditions to Issuance of Stock						If at any time the Company will determine, in its discretion, that the listing, registration or qualification of the Shares upon any securities exchange or under any state or federal law, or the consent or approval of any governmental regulatory authority is necessary or desirable as a condition to the issuance of Shares to you (or your estate), such issuance will not occur unless and until such listing, registration, qualification, consent or approval will have been effected or obtained free of any conditions not acceptable to the Company. The Company will make all reasonable efforts to meet the requirements of any such state or federal law or securities exchange and to obtain any such consent or approval of any such governmental authority.

Resale Restrictions						You agree not to sell any RSU Shares at a time when applicable laws, Company policies or an agreement between the Company and its underwriters prohibit a sale. This restriction will apply as long as your Service continues and for such period of time after the termination of your Service as the Company may specify.

Applicable Law						This Agreement will be interpreted and enforced under the laws of the State of California, without regard to its choice-of-law provisions.

The Plan and Other Agreements						The text of the Plan is incorporated in this Agreement by reference. This Agreement and the Notice of Grant are subject to all terms and provisions of the Plan. In the event of a conflict between one or more provisions of this Agreement or the Notice of Grant and one or more provisions of the Plan, the provisions of the Plan will govern.


						This Agreement, the Notice of Grant and the Plan constitute the entire understanding between you and the Company regarding this award. Any prior agreements, commitments or negotiations concerning this award are superseded. This Agreement may be amended only by another written agreement between the parties. Notwithstanding anything to the contrary in the Plan or this Agreement, the Company reserves the right to revise this Agreement as it deems necessary or advisable, in its sole discretion and without your consent, to comply with Section 409A or to otherwise avoid imposition of any additional tax or income recognition under Section 409A in connection to this grant of RSUs.

Administrator Authority						The Administrator will have the power to interpret the Plan, the Notice of Grant and this Agreement and to adopt such rules for the administration, interpretation and application of the Plan as are consistent therewith and to interpret or revoke any such rules (including, but not limited to, the determination of whether or not any RSUs have vested). All actions taken and all interpretations and determinations made by the Administrator in good faith will be final and binding upon you, the Company and all other interested persons. No member of the Administrator will be personally liable for any action, determination or interpretation made in good faith with respect to the Plan, the Notice of Grant or this Agreement.


/s/ SCOTT N. FLANDERS
Scott N. Flanders
Chief Executive Officer
August 6, 2021


/s/ JOHN PIERANTONI
John Pierantoni
Chief Accounting Officer (Principal Financial Officer)
August 6, 2021