SEVERANCE BENEFIT PLAN

Section 1.   Introduction.

This iPass Inc. Severance Benefit Plan was originally established effective January 1, 2001, and is hereby amended and restated effective December 23, 2008 (the “Plan”).  The purpose of the Plan is to provide for the payment of severance benefits to certain eligible employees of iPass Inc. (the “Company”) or an affiliate of the Company whose employment with the Company or an affiliate of the Company is involuntarily terminated.  This Plan shall supersede any severance benefit plan, policy or practice, whether written or unwritten, previously maintained by the Company or any affiliate of the Company, with the exception of the iPass, Inc. Executive Corporate Transaction and Severance Benefit Plan (the “Executive Severance Plan”).  This Plan document also is the Summary Plan Description for the Plan.

Section 2.   Eligibility For Benefits.

(a)   General Rules.   Subject to the requirements set forth in this Section, the Company will grant severance benefits under the Plan to Eligible Employees.

(1)   “Eligible Employees” for purposes of this Plan are all regular full-time and regular part-time employees of the Company and its affiliates (i) whose regular employment with the Company at the time of the termination of employment is located in the United States, (ii) whose employment is involuntarily terminated as a result of a reduction in force as determined by the Company (the “RIF”), (iii) whose termination of employment results in a “separation from service” with the Company within the meaning of Treasury Regulation Section 1.409A-1(h) (without regard to any permissible alternative definition of “termination of employment” thereunder) (such date, a “Termination Date”), and (iv) who are notified by the Company in writing that they are eligible for participation in this Plan.  The determination as to whether an employee’s termination of employment is due to the RIF and whether such employee is an Eligible Employee shall be made by the Company, in its sole discretion, and such determination shall be binding and conclusive on all persons.  Notwithstanding the foregoing, Eligible Employees under this Plan do not include the Chief Executive Officer of the Company, the Chief Financial Officer of the Company, and any individuals who are “Eligible Employees” for the purposes of the Executive Corporate Transaction and Severance Benefit Plan.

For purposes of this Plan, part-time employees are those regular hire employees who are regularly scheduled to work more than twenty (20) hours per week but less than a full-time work schedule.  Regular hire employees working twenty (20) hours per week or less and temporary employees are not eligible for severance benefits under the Plan.

For purposes of this Plan, an involuntary termination of employment which results from a RIF may include a termination due to a position elimination as well as situations where an employee lacks the necessary skills and abilities to perform the assigned responsibilities required under a restructuring of the employee's department or position.

(2)   In order to be eligible to receive benefits under the Plan, an Eligible Employee must remain on the job until his or her Termination Date.

(3)   In order to be eligible to receive benefits under the Plan, an Eligible Employee must execute a general waiver and release in substantially the form attached hereto as Exhibit A , Exhibit B , or Exhibit C , as appropriate, and such release must become effective in accordance with its terms within sixty (60) days following a Termination Date; provided, however, no such release shall require the Eligible Employee to forego any unpaid salary, any accrued but unpaid vacation pay or any benefits payable pursuant to this Plan.  The Plan Administrator, in its sole discretion, may modify the form of the required release to comply with applicable law and shall determine the form of the required release, which may be incorporated into a termination agreement or other agreement with the Eligible Employee.

(b)   Exceptions to Benefit Entitlement.   An employee who otherwise is an Eligible Employee will not receive benefits under the Plan (or will receive reduced benefits in the case of clause (1)) in any of the following circumstances, as determined by the Company in its sole discretion:

(1)   The employee has executed an individually negotiated employment contract or agreement with the Company relating to severance benefits that is in effect on his or her Termination Date, in which case such employee’s severance benefit, if any, shall be governed by the terms of such individually negotiated employment contract or agreement and shall be governed by this Plan only to the extent that the reduction pursuant to Section 3(d) below does not entirely eliminate benefits under this Plan.

(2)   The employee is involuntarily terminated for any reason other than due to the RIF.

(3)   The employee voluntarily terminates employment with the Company or an affiliate of the Company.  Voluntary terminations include, but are not limited to, resignation, retirement or failure to return from a leave of absence on the scheduled date.

(4)   The employee voluntarily terminates employment with the Company or an affiliate of the Company in order to accept employment with another entity that is wholly or partly owned (directly or indirectly) by the Company or an affiliate of the Company.

(5)   The employee is offered an identical or substantially equivalent or comparable position with the Company or an affiliate of the Company.  For purposes of the foregoing, a “substantially equivalent or comparable position” is one that offers the employee the same level of compensation.

(6)   The employee has failed to execute or has revoked the release within the applicable period of time specified in Section 2(a)(3).

Section 3.   Amount Of Benefit.

(a)   Base Salary Severance Benefits.    Eligible Employees shall receive a cash severance benefit in accordance with the following schedule:

(1)   For purposes of the foregoing schedule, Eligible Employees shall be credited with service with the Company, any affiliate of the Company, and any predecessor entity thereof, which shall include any service to a corporate entity acquired by, merged with, or which otherwise engaged in a corporate transaction with the Company if the Eligible Employee was immediately engaged by the Company following such acquisition, merger or other corporate transaction.

(2)   For purposes of calculating Plan benefits, “Base Salary” shall mean the Eligible Employee’s base pay (excluding incentive pay, premium pay, commissions, overtime, bonuses and other forms of variable compensation), at the weekly rate in effect during the last regularly scheduled payroll period immediately preceding the Eligible Employee’s Termination Date.

(b)   Bonus Severance Benefits.   In addition to cash severance benefits pursuant to Section 3(a), an Eligible Employee will be eligible for additional cash severance benefits if the Eligible Employee is either (i) not in the Company’s sales organization and is a participant, at the time of termination of employment, in a Company Management Business Objectives bonus program (such bonus program to be considered the “MBO Program” and such Eligible Employees to be considered “MBO Participants”), or (ii) is in the Company’s sales organization and is a participant, at the time of termination of employment, in a written Sales Compensation Plan (such Eligible Employees to be considered “Sales Plan Participants”).  MBO Participants shall receive a bonus cash severance benefit equal to the quarterly target bonus amount in effect during the quarter in which the date of termination occurs under the MBO Program applicable to each such MBO Participant.  Sales Plan Participants shall receive a bonus cash severance benefit equal to the amount of sales commissions that the Sales Plan Participant would have earned under the applicable Sales Compensation Plan if the Sales Plan Participant’s employment had not been terminated during the quarter, based on sales that close during such quarter, if any.  The bonus cash severance benefits will be paid to the MBO Participants at the same time that cash severance benefits are paid to such Participants pursuant to Section 3(a).  The bonus cash severance benefits will be paid to the Sales Plan Participants on the same schedule as Sales Compensation Plan commissions paid to employees whose employment has not been terminated.  Eligible Employees who are neither MBO Participants nor Sales Plan Participants will receive no bonus cash severance benefits.

(c)   Health Continuation Coverage.   Provided that the Eligible Employee is eligible for, and has made an election at or timely after the termination of employment pursuant to the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”) under a health, dental, or vision plan sponsored by the Company, each such Eligible Employee shall be entitled to payment by the Company of all of the applicable premiums (inclusive of premiums for the Eligible Employee’s dependents for such health, dental, or vision plan coverage as in effect immediately prior to the date of termination of employment) for such health, dental, or vision plan coverage for a period of three (3) months, with such coverage counted as coverage pursuant to COBRA.  No such premium payments (or any other payments for health, dental, or vision coverage by the Company) shall be made following the Eligible Employee’s death or the effective date of the Eligible Employee’s coverage by a health, dental, or vision insurance plan of a subsequent employer.  Each Eligible Employee shall be required to notify the Plan Administrator immediately if the Eligible Employee becomes covered by a health, dental, or vision insurance plan of a subsequent employer.  Upon the conclusion of such period of insurance premium payments made by the Company, the Eligible Employee will be responsible for the entire payment of premiums required under COBRA for the duration of the COBRA period. For purposes of this Section 3(c), (i) references to COBRA shall be deemed to refer also to analogous provisions of state law, and (ii) any applicable insurance premiums that are paid by the Company shall not include any amounts payable by the Eligible Employee under an Internal Revenue Code Section 125 health care reimbursement plan, which amounts, if any, are the sole responsibility of the Eligible Employee.

(d)   Certain Reductions.   The Company, in its sole discretion, shall have the authority to reduce an Eligible Employee’s severance benefits, in whole or in part, by any other severance benefits, pay in lieu of notice, or other similar benefits payable to the Eligible Employee by the Company or an affiliate of the Company that become payable in connection with the Eligible Employee’s termination of employment pursuant to (i) any applicable legal requirement, including, without limitation, the Worker Adjustment and Retraining Notification Act, the California Plant Closing Act, or any other similar state law (collectively, the “WARN Act”), (ii) a written employment or severance agreement with the Company, or (iii) any Company policy or practice providing for the Eligible Employee to remain on the payroll for a limited period of time after being given notice of the termination of the Eligible Employee’s employment.  The benefits provided under this Plan are intended to satisfy, in whole or in part, any and all statutory obligations and other contractual obligations of the Company, including benefits provided by offer letter or employment agreements, that may arise out of an Eligible Employee’s termination of employment, and the Plan Administrator shall so construe and implement the terms of the Plan.  The Company’s decision to apply such reductions to the severance benefits of one Eligible Employee and the amount of such reductions shall in no way obligate the Company to apply the same reductions in the same amounts to the severance benefits of any other Eligible Employee, even if similarly situated.  In the Company’s sole discretion, such reductions may be applied on a retroactive basis, with severance benefits previously paid being re-characterized as payments pursuant to the Company’s statutory obligation.

(e)   Other Employee Benefits and Stock Options.   All other benefits (such as life insurance, disability and 401(k) plan coverage) shall terminate as of the Eligible Employee’s Termination Date (except to the extent that a conversion privilege may be available thereunder).   An Eligible Employee’s rights with respect to his or her equity awards, if any, shall be governed by the terms of his or her equity award documents and the plan document for the plan under which such equity awards are granted.

(f)   Additional Benefits.   Notwithstanding the foregoing, the Plan Administrator may, in its sole discretion, provide benefits in addition to those pursuant to Sections 3(a), 3(b), and 3(c) to one or more Eligible Employees chosen by the Plan Administrator, in its sole discretion.  However, such additional benefits provided to one or more Eligible Employees selected by the Plan Administrator, in its sole discretion, shall in no way obligate the Company to provide such benefits to any other Eligible Employee, even if similarly situated.

Section 4.   Return of Company Property.

An Eligible Employee will not be entitled to any severance benefit under the Plan unless and until the Eligible Employee returns all Company Property.  For this purpose, “Company Property” means all paper and electronic Company documents (and all copies thereof) created and/or received by the Eligible Employee during his or her period of employment with the Company and other Company materials and property which the Eligible Employee has in his or her possession or control, including, but not limited to, Company files, notes, drawings records, plans, forecasts, reports, studies, analyses, proposals, agreements, financial information, research and development information, sales and marketing information, operational and personnel information, specifications, code, software, databases, computer-recorded information, tangible property and equipment (including, but not limited to, leased vehicles, computers, computer equipment, software programs, facsimile machines, mobile telephones, servers), credit and calling cards, entry cards, identification badges and keys; and any materials of any kind which contain or embody any proprietary or confidential information of the Company (and all reproductions thereof in whole or in part).  As a condition to receiving benefits under the Plan, Eligible Employees must not make or retain copies, reproductions or summaries of any such Company documents, materials or property.  However, an Eligible Employee is not required to return his or her personal copies of documents evidencing the Eligible Employee’s hire, termination, compensation, benefits and equity awards and any other documentation received as a shareholder of the Company.

Section 5.   Time Of Payment And Form Of Benefit.

(a)   General Rules .  The cash severance benefit under the Plan will be paid in a single sum within ten (10) business days following the effective date of the release described in Section 2(a)(3) unless another payment date is provided in said release; provided, however, that all such payments under the Plan will be subject to applicable withholding for federal, state and local income and employment taxes.  If applicable, the bonus cash severance benefit under the Plan will be paid in accordance with Section 3(b).  If a terminating employee is indebted to the Company or an affiliate of the Company at his or her Termination Date, the Company reserves the right to offset any severance payments under the Plan by the amount of such indebtedness.  In no event shall payment of any Plan benefit be made prior to the Eligible Employee’s Termination Date or prior to the effective date of the release described in Section 2(a)(3).

(b)   Application of Section 409A .  Any cash severance payment provided under Sections 3(a) and 3(b) and any additional benefits provided under Section 3(f) shall be paid no later than the later of: (i) December 31st of the calendar year in which the Termination Date occurs, or (ii) the fifteenth (15th) day of the third calendar month following the Termination Date.  It is the intention of the preceding sentence to apply the “short-term deferral” rule set forth in Treasury Regulation Section 1.409A-1(b)(4) to such payments.

Section 6.   Reemployment.

(a)   Repayment.   In the event of an Eligible Employee’s reemployment by the Company or an affiliate of the Company during the Severance Period, as defined below, such Eligible Employee will be required to repay to the Company a prorated portion of the severance pay received under Sections 3(a) and 3(b).

(b)   Definition of “Severance Period.”   “Severance Period,” for purposes of this Plan, means the number of weeks in respect of which the amount paid to the Eligible Employee under Section 3(a) was calculated.

Section 7.   Right To Interpret Plan; Amendment and Termination.

(a)   Exclusive Discretion.   The Plan Administrator shall have the exclusive discretion and authority to establish rules, forms, and procedures for the administration of the Plan and to construe and interpret the Plan and to decide any and all questions of fact, interpretation, definition, computation or administration arising in connection with the operation of the Plan, including, but not limited to, the eligibility to participate in the Plan and amount of benefits paid under the Plan.  The rules, interpretations, computations and other actions of the Plan Administrator shall be binding and conclusive on all persons.

(b)   Amendment or Termination.   The Company reserves the right to amend or terminate this Plan or the benefits provided hereunder at any time.

Section 8.   No Implied Employment Contract.

The Plan shall not be deemed (i) to give any employee or other person any right to be retained in the employ of the Company or (ii) to interfere with the right of the Company to discharge any employee or other person at any time, with or without cause or advance notice, which right is hereby reserved.

Section 9.   Legal Construction.

This Plan is intended to be governed by and shall be construed in accordance with the Employee Retirement Income Security Act of 1974 (“ERISA”) and, to the extent not preempted by ERISA, the laws of the State of California.

Section 10.   Claims, Inquiries And Appeals.

(a)   Applications for Benefits and Inquiries.   Any application for benefits, inquiries about the Plan or inquiries about present or future rights under the Plan must be submitted to the Plan Administrator in writing by an applicant (or his or her authorized representative).  The Plan Administrator is:

(b)   Denial of Claims.   In the event that any application for benefits is denied in whole or in part, the Plan Administrator must provide the applicant with written or electronic notice of the denial of the application, and of the applicant’s right to review the denial.  Any electronic notice will comply with the regulations of the U.S. Department of Lab