Exhibit 10.1
 
eBay Inc.

 
1998 EMPLOYEE STOCK PURCHASE PLAN

 
As Amended on March 27, 2007
 
1. Establishment of Plan.  eBay Inc. (the “Company”) proposes to grant options
for purchase of the Company’s Common Stock to eligible employees of the Company,
its Participating Subsidiaries or Affiliates (as hereinafter defined) pursuant
to this Employee Stock Purchase Plan (this “Plan”). For purposes of this Plan,
“Parent Corporation” and “Subsidiary” shall have the same meanings as “parent
corporation” and “subsidiary corporation” in Sections 424(e) and 424(f),
respectively, of the Internal Revenue Code of 1986, as amended (the “Code”).
“Participating Subsidiaries” are Parent Corporations or Subsidiaries that the
Board of Directors of the Company (the “Board”) designates from time to time as
corporations that shall participate in this Plan. The Board may also designate
as participating companies in the Plan certain affiliates (“Affiliates”) which
are any entities where the Corporation has a significant equity interest or
significant business relationship and which have been designated as such. The
Company intends this Plan to qualify as an “employee stock purchase plan” under
Section 423 of the Code (including any amendments to or replacements of such
Section), and this Plan shall be so construed. Any term not expressly defined in
this Plan but defined for purposes of Section 423 of the Code shall have the
same definition herein. A total of 7,200,0001 shares of the Company’s Common
Stock were reserved for issuance under this Plan when originally adopted. In
addition, on each January 1, the aggregate number of shares of the Company’s
Common Stock reserved for issuance under the Plan shall be increased
automatically by the number of shares purchased under this Plan in the preceding
calendar year; provided that the aggregate shares reserved under this Plan shall
not exceed 36,000,0001 shares. Such number shall be subject to adjustments
effected in accordance with Section 14 of this Plan.
 
2. Purpose.  The purpose of this Plan is to provide eligible employees of the
Company, Participating Subsidiaries or Affiliates with a convenient means of
acquiring an equity interest in the Company through payroll deductions or
contributions, to enhance such employees’ sense of participation in the affairs
of the Company, Participating Subsidiaries or Affiliates, and to provide an
incentive for continued employment. In addition, the Plan authorizes the grant
of options and the issuance of the Company’s Common Stock which do not qualify
under Section 423 of the Code pursuant to sub-plans or special rules adopted by
the Board or the Compensation Committee of the Board (as hereinafter defined)
designated to achieve desired tax or other objectives in particular locations
outside the United States.
 
3. Administration.
 
(a) This Plan shall be administered by the Compensation Committee of the Board
(the “Committee”). Subject to the provisions of this Plan and the limitations of
Section 423 of the Code or any successor provision in the Code, all questions of
interpretation or application of this Plan shall be determined by the Committee
and its decisions shall be final and binding upon all participants. Members of
the Committee shall receive no compensation for their services in connection
with the administration of this Plan, other than standard fees as established
from time to time by the Board for services rendered by Board members serving on
Board committees. All expenses incurred in connection with the administration of
this Plan shall be paid by the Company.
 
(b) The Board or the Committee may adopt rules or procedures relating to the
operation and administration of the Plan to accommodate the specific
requirements of local laws and procedures. Without limiting the generality of
the foregoing, the Board or the Committee is specifically authorized to adopt
rules and procedures regarding handling of payroll deductions, contributions,
payment of interest, conversion of local currency, payroll tax, withholding
procedures and handling of stock certificates which vary with local
requirements. The Board or the Committee may adopt such rules, guidelines and
forms as the applicable laws allow to accomplish the transfer of
 

 
1 Denotes that such share number reflects the stock splits of eBay’s common
stock occurring in 8/98, 3/99,
5/00, 8/03 and 2/05.

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secondary Class 1 National Insurance Contributions (“NIC”) in the United Kingdom
(“UK”) from the employer to the participants in the UK and to make such transfer
of NIC liability a condition to the exercise of options in the UK.
 
(c) The Board or the Committee may also adopt sub-plans applicable to particular
Participating Subsidiaries, Affiliates or locations, which sub-plans may be
designed to be outside the scope of Code Section 423. The rules of such
sub-plans may take precedence over other provisions of this Plan, with the
exception of Paragraph 1 above, but unless otherwise superseded by the terms of
such sub-plan, the provisions of this Plan shall govern the operation of such
sub-plan.
 
4. Eligibility.  Any employee of the Company, its Participating Subsidiaries or
an Affiliate is eligible to participate in an Offering Period (as hereinafter
defined) under this Plan, subject to Paragraph 19 and except the following:
 
(a) employees who are not employed by the Company, a Participating Subsidiary or
an Affiliate (10) days before the beginning of such Offering Period, except that
employees who were employed on the Effective Date of the Registration Statement
filed by the Company with the Securities and Exchange Commission (“SEC”) under
the Securities Act of 1933, as amended (the “Securities Act”) registering the
initial public offering of the Company’s Common Stock were eligible to
participate in the first Offering Period under the Plan;
 
(b) employees who are customarily employed for twenty (20) hours or less per
week, unless local law prohibits exclusion of part-time employees;
 
(c) employees who are customarily employed for five (5) months or less in a
calendar year, unless local law prohibits exclusion of such employees;
 
(d) employees who, together with any other person whose stock would be
attributed to such employee pursuant to Section 424(d) of the Code, own stock or
hold options to purchase stock possessing five percent (5%) or more of the total
combined voting power or value of all classes of stock of the Company, any of
its Participating Subsidiaries or an Affiliate or who, as a result of being
granted an option under this Plan with respect to such Offering Period, would
own stock or hold options to purchase stock possessing five percent (5%) or more
of the total combined voting power or value of all classes of stock of the
Company, any of its Participating Subsidiaries or an Affiliate; and
 
(e) individuals who provide services to the Company, any of its Participating
Subsidiaries or an Affiliate as independent contractors who are reclassified as
common law employees for any reason except for federal income and employment tax
purposes.
 
5. Offering Dates.  The offering periods of this Plan (each, an “Offering
Period”) shall be of twenty-four (24) months duration commencing on May 1 and
November 1 of each year and ending on April 30 and October 31 of each year;
provided, however, that notwithstanding the foregoing, the first such Offering
Period shall commence on the first business day on which price quotations for
the Company’s Common Stock are available on the Nasdaq National Market (the
“First Offering Date”) and shall end on October 31, 2000. Except for the first
Offering Period, each Offering Period shall consist of four (4) six month
purchase periods (individually, a “Purchase Period”) during which payroll
deductions or contributions of the participants are accumulated under this Plan.
The first Offering Period shall consist of no more than five and no fewer than
three Purchase Periods, any of which may be greater or less than six months as
determined by the Committee. The first business day of each Offering Period is
referred to as the “Offering Date”. The last business day of each Purchase
Period is referred to as the “Purchase Date”. The Committee shall have the power
to change the duration of Offering Periods with respect to offerings without
stockholder approval if such change is announced at least fifteen (15) days
prior to the scheduled beginning of the first Offering Period to be affected.
Notwithstanding the foregoing, the Board or the Committee may establish other
Offering Periods in addition to those described above, which shall be subject to
any specific terms and conditions that the Committee approves, including
requirements with respect to eligibility, participation, the establishment of
Purchase Periods and Purchase Dates and other rights under any such Offering. A
participant may be enrolled in only one Offering Period at a time.

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6. Participation in this Plan.
 
(a) Eligible employees may become participants in an Offering Period under this
Plan on the first Offering Date after satisfying the eligibility requirements by
delivering a subscription agreement authorizing payroll deductions or
contributions, if Paragraph 6(b) below applies, to the Company’s treasury
department (the “Treasury Department”) not later than five (5) days before such
Offering Date. Notwithstanding the foregoing, the Committee may set a later time
for filing the subscription agreement authorizing payroll deductions or
contributions for all eligible employees with respect to a given Offering
Period. An eligible employee who does not deliver a subscription agreement to
the Treasury Department by such date after becoming eligible to participate in
such Offering Period shall not participate in that Offering Period or any
subsequent Offering Period unless such employee enrolls in this Plan by filing a
subscription agreement with the Treasury Department not later than five (5) days
preceding a subsequent Offering Date. Once an employee becomes a participant in
an Offering Period, such employee will automatically participate in the Offering
Period commencing immediately following the last day of the prior Offering
Period unless the employee withdraws or is deemed to withdraw from this Plan or
terminates further participation in the Offering Period as set forth in
Paragraph 11 below. Such participant is not required to file any additional
subscription agreement in order to continue participation in this Plan.
 
(b) Notwithstanding any other provisions of the Plan to the contrary, in
locations where local law prohibits payroll deductions, an eligible employee may
elect to participate through contributions to his account under the Plan in a
form acceptable to the Board or the Committee.
 
7. Grant of Option on Enrollment.  Enrollment by an eligible employee in this
Plan with respect to an Offering Period will constitute the grant (as of the
Offering Date) by the Company to such employee of an option to purchase on the
Purchase Date up to that number of shares of Common Stock of the Company
determined by dividing (a) the amount accumulated in such employee’s payroll
deduction account during such Purchase Period by (b) the lower of
(i) eighty-five percent (85%) of the fair market value of a share of the
Company’s Common Stock on the Offering Date (but in no event less than the par
value of a share of the Company’s Common Stock), or (ii) eighty-five percent
(85%) of the fair market value of a share of the Company’s Common Stock on the
Purchase Date (but in no event less than the par value of a share of the
Company’s Common Stock), provided, however, that the number of shares of the
Company’s Common Stock subject to any option granted pursuant to this Plan shall
not exceed the lesser of (x) the maximum number of shares set by the Committee
pursuant to Paragraph 10(c) below with respect to the applicable Purchase Date,
or (y) the maximum number of shares which may be purchased pursuant to
Paragraph 10(b) below with respect to the applicable Purchase Date. The fair
market value of a share of the Company’s Common Stock shall be determined as
provided in Paragraph 8 below.
 
8. Purchase Price.  The purchase price per share at which a share of Common
Stock will be sold in any Offering Period shall be eighty-five percent (85%) of
the lesser of:
 
(a) The fair market value on the Offering Date; or
 
(b) The fair market value on the Purchase Date.
 
For purposes of this Plan, the term “Fair Market Value” means, as of any date,
any date, the value of a share of the Company’s Common Stock determined as
follows:
 
(a) if such Common Stock is then quoted on the Nasdaq National Market, its
closing price on the Nasdaq National Market on the date of determination as
reported in The Wall Street Journal;
 
(b) if such Common Stock is publicly traded and is then listed on a national
securities exchange, its closing price on the date of determination on the
principal national securities exchange on which the Common Stock is listed or
admitted to trading as reported in The Wall Street Journal;
 
(c) if such Common Stock is publicly traded but is not quoted on the Nasdaq
National Market nor listed or admitted to trading on a national securities
exchange, the average of the closing bid and asked prices on the date of
determination as reported in The Wall Street Journal; or
 
(d) if none of the foregoing is applicable, by the Board in good faith, which in
the case of the First Offering Date will be the price per share at which shares
of the Company’s Common Stock are initially offered

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for sale to the public by the Company’s underwriters in the initial public
offering of the Company’s Common Stock pursuant to a registration statement
filed with the SEC under the Securities Act.
 
9. Payment of Purchase Price; Changes in Payroll Deductions; Issuance of Shares.
 
(a)(i) The purchase price of the shares is accumulated by regular payroll
deductions or contributions made during each Offering Period. The deductions or
contributions are made as a percentage of the participant’s compensation in one
percent (1%) increments not less than two percent (2%), nor greater than ten
percent (10%) or such lower limit set by the Committee. Payroll deductions or
contributions shall commence on the first payday of the Offering Period and
shall continue to the end of the Offering Period unless sooner altered or
terminated as provided in this Plan;
 
(a)(ii) “Compensation” means total cash wages or salary and performance-based
pay actually received or deferred by an eligible employee under this Plan during
the applicable Offering Period, including: base wages or salary; overtime;
performance bonuses; commissions; shift differentials; payments for paid time
off; payments in lieu of notice; compensation deferred under any program or
plan, including, without limitation, pursuant to Section 401(k) or Section 125
of the Code; or any other compensation or remuneration approved as
“compensation” by the Board or the Compensation Committee in accordance with
Section 423 of the Code. For purposes of this Plan, “Compensation” shall not
include forms of compensation or remuneration that are not included or covered
by the first sentence in this subparagraph (ii), including the following: moving
allowances; payments pursuant to a severance agreement; equalization payments;
termination pay (including the payout of accrued vacation time in connection
with any such termination); relocation allowances; expense reimbursements; meal
allowances; commuting allowances; geographical hardship pay; any payments (such
as guaranteed bonuses in certain foreign jurisdictions) with respect to which
salary reductions are not permitted by the laws of the applicable jurisdiction);
automobile allowances; sign-on bonuses; nonqualified executive compensation; any
amounts directly or indirectly paid pursuant to this Plan or any other
stock-based plan, including without limitation any stock option, stock purchase,
deferred stock unit, or similar plan, of the Company or any Subsidiary or
Affiliate; or any other compensation or remuneration determined not to be
“compensation” by the Board or the Compensation Committee in accordance with
Section 423 of the Code.
 
(b) A participant may increase or decrease the rate of payroll deductions or
contributions during an Offering Period by filing with the Treasury Department a
new authorization for payroll deductions, in which case the new rate shall
become effective for the next payroll period commencing more than fifteen
(15) days after the Treasury Department’s receipt of the authorization and shall
continue for the remainder of the Offering Period unless changed as described
below. Such change in the rate of payroll deductions or contributions may be
made at any time during an Offering Period, but not more than one (1) change may
be made effective during any Purchase Period. A participant may increase or
decrease the rate of payroll deductions or contributions for any subsequent
Offering Period by filing with the Treasury Department a new authorization for
payroll deductions or an election for contributions not later than fifteen
(15) days before the beginning of such Offering Period.
 
(c) A participant may reduce his or her payroll deduction or contributions
percentage to zero during an Offering Period by filing with the Treasury
Department a request for cessation of payroll deductions or contributions. Such
reduction shall be effective beginning with the next payroll period commencing
more than fifteen (15) days after the Treasury Department’s receipt of the
request and no further payroll deductions or contributions will be made for the
duration of the Offering Period. Payroll deductions or contributions credited to
the participant’s account prior to the effective date of the request shall be
used to purchase shares of Common Stock of the Company in accordance with
Section (e) below. A participant may not resume making payroll deductions or
contributions during the Offering Period in which he or she reduced his or her
payroll deductions or contributions to zero.
 
(d) In countries where local law prohibits payroll deductions, at the time a
participant files his or her subscription agreement, instead of authorization
for payroll deductions, he or she shall elect to make contributions on each
payday during the Offering Period at a rate not exceeding ten percent (10%) of
the compensation which he or she receives on such payday, provided that the
aggregate of such contributions during the Offering Period shall not exceed ten
percent (10%) of the aggregate compensation which he or she would receive during
said Offering Period. The Board or the Committee shall determine whether the
amount to be contributed is to be designated as a

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specific dollar amount, or as a percentage of the eligible compensation being
paid on such payday, or as either, and may also establish a minimum percentage
or amount for such contributions.
 
(e) All participant’s payroll deductions or contributions are credited to his or
her account under this Plan and are deposited with the general funds of the
Company. No interest accrues on the payroll deductions or contributions unless
local law requires that payroll deductions or contributions be held in an
interest-bearing account. All payroll deductions or contributions received or
held by the Company may be used by the Company for any corporate purpose, and
the Company shall not be obligated to segregate such payroll deductions or
contributions unless segregation of accounts is required by local law.
 
(f) On each Purchase Date, so long as this Plan remains in effect and provided
that the participant has not submitted a signed and completed withdrawal form
before that date which notifies the Company that the participant wishes to
withdraw from that Offering Period under this Plan and have all funds
accumulated in the account maintained on behalf of the participant as of that
date returned to the participant, the Company shall apply the funds then in the
participant’s account to the purchase of whole shares of Common Stock reserved
under the option granted to such participant with respect to the Offering Period
to the extent that such option is exercisable on the Purchase Date. The purchase
price per share shall be as specified in Section 8 of this Plan. Any cash
remaining in a participant’s account after such purchase of shares shall be
refunded to such participant in cash, without interest unless local law requires
the payment of interest; provided, however that any amount remaining in such
participant’s account on a Purchase Date which is less than the amount necessary
to purchase a full share of Common Stock of the Company shall be carried
forward, without interest, unless local law requires the payment of interest
into the next Purchase Period or Offering Period and in the locations where the
Board or the Committee have determined that such rollover is available under the
Plan, as the case may be. In the event that this Plan has been oversubscribed,
all funds not used to purchase shares on the Purchase Date shall be returned to
the participant, without interest unless local law requires the payment of
interest. No Common Stock shall be purchased on a Purchase Date on behalf of any
employee whose participation in this Plan has terminated prior to such Purchase
Date.
 
(g) Subject to Paragraph 9(h), as promptly as practicable after the Purchase
Date, the Company shall issue shares for the participant’s benefit representing
the shares purchased upon exercise of his or her option. If a participant dies
before receiving his or her shares, the account will be set up in the name of
such participant’s beneficiary, or the shares will be issued in such
beneficiary’s name.
 
(h) If, on the Purchase Date, the Company, a Participating Subsidiary or an
Affiliate is required by local law to withhold taxes on a participant’s exercise
of his or her options and such participant’s compensation is not sufficient to
cover such withholding, the Company will sell the requisite number of shares to
raise the necessary funds to make the withholding.
 
(i) During a participant’s lifetime, his or her option to purchase shares
hereunder is exercisable only by him or her. The participant will have no
interest or voting right in shares covered by his or her option until such
option has been exercised.
 
10. Limitations on Shares to be Purchased.
 
(a) No participant shall be entitled to purchase stock under this Plan at a rate
which, when aggregated with his or her rights to purchase stock under all other
employee stock purchase plans of the Company, any Participating Subsidiary or an
Affiliate, exceeds $25,000 in fair market value, determined as of the Offering
Date (or such other limit as may be imposed by the Code) for each calendar year
in which the employee participates in this Plan. The Company shall automatically
suspend the payroll deductions or contributions of any participant as necessary
to enforce such limit provided that when the Company automatically resumes
making such payroll deductions or accepting contributions, the Company must
apply the rate in effect immediately prior to such suspension.
 
(b) No more than two hundred percent (200%) of the number of shares determined
by using eighty-five percent (85%) of the fair market value of a share of the
Company’s Common Stock on the Offering Date as the denominator may be purchased
by a participant on any single Purchase Date.
 
(c) No participant shall be entitled to purchase more than the Maximum Share
Amount (as defined below) on any single Purchase Date. Not less than thirty
(30) days prior to the commencement of any Offering Period, the

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Committee may, in its sole discretion, set a maximum number of shares which may
be purchased by any employee at any single Purchase Date (hereinafter the
“Maximum Share Amount”). Until otherwise determined by the Committee, there
shall be no Maximum Share Amount. In no event shall the Maximum Share Amount
exceed the amounts permitted under Paragraph 10(b) above. If a new Maximum Share
Amount is set, then all participants must be notified of such Maximum Share
Amount prior to the commencement of the next Offering Period. The Maximum Share
Amount shall continue to apply with respect to all succeeding Purchase Dates and
Offering Periods unless revised by the Committee as set forth above.
 
(d) If the number of shares to be purchased on a Purchase Date by all employees
participating in this Plan exceeds the number of shares then available for
issuance under this Plan, then the Company will make a pro rata allocation of
the remaining shares in as uniform a manner as shall be reasonably practicable
and as the Committee shall determine to be equitable. In such event, the Company
shall give written notice of such reduction of the number of shares to be
purchased under a participant’s option to each participant affected.
 
(e) Any funds accumulated in a participant’s account which are not used to
purchase stock due to the limitations in this Paragraph 10 shall be returned to
the participant as soon as practicable after the end of the applicable Purchase
Period, without interest unless local law requires the payment of interest.
 
11. Withdrawal.
 
(a) Each participant may withdraw from a Purchase Period under this Plan by
signing and delivering to the Treasury Department a written notice to that
effect on a form provided for such purpose. Such withdrawal may be elected at
any time at least fifteen (15) days prior to the end of a Purchase Period.
 
(b) Upon withdrawal from this Plan, the accumulated payroll deductions shall be
returned to the withdrawn participant, without interest unless local law
requires the payment of interest, and his or her interest in this Plan shall
terminate. In the event a participant voluntarily elects to withdraw from this
Plan, he or she may not resume his or her participation in this Plan during the
same Offering Period, but he or she may participate in any Offering Period under
this Plan which commences on a date subsequent to such withdrawal by filing a
new authorization for payroll deductions or by commencing to make contributions
in the same manner as set forth in Paragraph 6 above for initial participation
in this Plan.
 
(c) If the Fair Market Value on the first day of the current Offering Period in
which a participant is enrolled is higher than the Fair Market Value on the
first day of any subsequent Offering Period, the Company will automatically
enroll such participant in the subsequent Offering Period. Any funds accumulated
in a participant’s account prior to the first day of such subsequent Offering
Period will be applied to the purchase of shares on the Purchase Date
immediately prior to the first day of such subsequent Offering Period.
Notwithstanding the foregoing, if the first Offering Date occurs prior to
November 1, 1998 and the Fair Market Value on the First Offering Date is higher
than the Fair Market Value on the first day of the second Offering Period, any
funds accumulated in a participant’s account prior to the first day of the
second Offering Period will be applied to the purchase of shares on the Purchase
Date next following the first day of such second Offering Period. A participant
does not need to file any forms with the Company to automatically be enrolled in
the subsequent Offering Period.
 
12. Termination of Employment.  Termination of a participant’s employment for
any reason, including retirement, death or the failure of a participant to
remain an eligible employee of the Company, a Participating Subsidiary or an
Affiliate, immediately terminates his or her participation in this Plan. In such
event, the funds credited to the participant’s account will be returned to him
or her or, in the case of his or her death, to his or her legal representative,
without interest unless local law requires the payment of interest. For purposes
of this Paragraph 12, an employee will not be deemed to have terminated
employment or failed to remain in the continuous employ of the Company, of a
Participating Subsidiary or an Affiliate in the case of sick leave, military
leave, or any other leave of absence approved by the Board; provided that such
leave is for a period of not more than ninety (90) days, unless reemployment
upon the expiration of such leave is guaranteed by contract or statute or unless
provided otherwise pursuant to formal policy adopted from time to time by the
Company.
 
13. Return of Payroll Deductions and Contributions.  In the event a
participant’s interest in this Plan is terminated by withdrawal, termination of
employment or otherwise, or in the event this Plan is terminated by the Board,
the Company shall deliver to the participant all payroll deductions or
contributions credited to such

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participant’s account. Subject to Paragraph 9(e), no interest shall accrue on
the payroll deductions or contributions of a participant in this Plan.
 
14. Capital Changes.
 
(a) In the event that any dividend or other distribution, reorganization,
merger, consolidation, combination, repurchase, or exchange of Common Stock or
other securities of the Company, or other change in the corporate structure of
the Company affecting the Common Stock (other than an Equity Restructuring, as
defined in Section 3(c)) occurs such that an adjustment is determined by the
Committee (in its sole discretion) to be appropriate in order to prevent
dilution or enlargement of the benefits or potential benefits intended to be
made available under the Plan, then the Committee shall, in such manner as it
may deem equitable, adjust the number and class of Common Stock which have been
authorized for issuance under this Plan but have not yet been placed under
option (collectively, the “Reserves”), the number and class of Common Stock
covered by each outstanding option, the purchase price per share of Common Stock
covered by each option which has not yet been exercised.
 
(b) In connection with the occurrence of any Equity Restructuring, and
notwithstanding anything to the contrary in Section 14(a) the number and type of
securities subject to each outstanding option and the price per share thereof,
if applicable, will be equitably adjusted by the Committee. The adjustments
provided under this Section 14(b) shall be nondiscretionary and shall be final
and binding on the affected participants and the Company.
 
(c) “Equity Restructuring” means a non-reciprocal transaction (i.e. a
transaction in which the Company does not receive consideration or other
resources in respect of the transaction approximately equal to and in exchange
for the consideration or resources the Company is relinquishing in such
transaction) between the Company and its stockholders, such as a stock split,
spin-off, rights offering, nonrecurring stock dividend or recapitalization
through a large, nonrecurring cash dividend, that affects the shares of Common
Stock (or other securities of the Company) or the share price of Common Stock
(or other securities) and causes a change in the per share value of the Common
Stock underlying outstanding options.
 
(d) In the event of the proposed dissolution or liquidation of the Company, the
Offering Period will terminate immediately prior to the consummation of such
proposed action, unless otherwise provided by the Committee. The Committee may,
in the exercise of its sole discretion in such instances, declare that this Plan
shall terminate as of a date fixed by the Committee and give each participant
the right to purchase shares under this Plan prior to such termination.
 
(e) In the event of (i) a merger or consolidation in which the Company is not
the surviving corporation (other than a merger or consolidation with a
wholly-owned subsidiary, a reincorporation of the Company in a different
jurisdiction, or other transaction in which there is no substantial change in
the stockholders of the Company or their relative stock holdings and the options
under this Plan are assumed, converted or replaced by the successor corporation,
which assumption will be binding on all participants), (ii) a merger in which
the Company is the surviving corporation but after which the stockholders of the
Company immediately prior to such merger (other than any stockholder that
merges, or which owns or controls another corporation that merges, with the
Company in such merger) cease to own their shares or other equity interest in
the Company, (iii) the sale of all or substantially all of the assets of the
Company or (iv) the acquisition, sale, or transfer of more than 50% of the
outstanding shares of the Company by tender offer or similar transaction, the
Plan will continue with regard to Offering Periods that commenced prior to the
closing of the proposed transaction and shares will be purchased based on the
Fair Market Value of the surviving corporation’s stock on each Purchase Date,
unless otherwise provided by the Committee consistent with pooling of interests
accounting treatment.
 
15. Nonassignability.  Neither payroll deductions or contributions credited to a
participant’s account nor any rights with regard to the exercise of an option or
to receive shares under this Plan may be assigned, transferred, pledged or
otherwise disposed of in any way (other than by will, the laws of descent and
distribution or as provided in Paragraph 22 below) by the participant. Any such
attempt at assignment, transfer, pledge or other disposition shall be void and
without effect.
 
16. Reports.  Individual accounts will be maintained for each participant in
this Plan. Each participant shall receive promptly after the end of each
Purchase Period a report of his or her account setting forth the total funds

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accumulated in the participant’s account, the number of shares purchased, the
per share price thereof and the remaining cash balance, if any, carried forward
to the next Purchase Period or Offering Period, as the case may be.
 
17. Notice of Disposition.  Each participant shall notify the Company in writing
if the participant disposes of any of the shares purchased in any Offering
Period pursuant to this Plan if such disposition occurs within two (2) years
from the Offering Date or within one (1) year from the Purchase Date on which
such shares were purchased (the “Notice Period”). The Company may, at any time
during the Notice Period, place a legend or legends on any certificate
representing shares acquired pursuant to this Plan requesting the Company’s
transfer agent to notify the Company of any transfer of the shares. The
obligation of the participant to provide such notice shall continue
notwithstanding the placement of any such legend on the certificates.
 
18. No Rights to Continued Employment.  Neither this Plan nor the grant of any
option hereunder shall confer any right on any employee to remain in the employ
of the Company, any Participating Subsidiary or an Affiliate, or restrict the
right of the Company, any Participating Subsidiary or an Affiliate to terminate
such employee’s employment.
 
19. Equal Rights And Privileges.  All employees who participate in the Plan
shall have the same rights and privileges under the Plan except for differences
which may be mandated by local law and which are consistent with Code
Section 423(b)(5); provided, however, that employees participating in a sub-plan
adopted pursuant to Paragraph 3 which is not designed to qualify under Code
Section 423 need not have the same rights and privileges as employees
participating in the Code Section 423 Plan. The Board or the Committee may
impose restrictions on eligibility and participation of employees who are
officers and directors to facilitate compliance with federal or state securities
laws or foreign laws. This Paragraph 19 shall take precedence over all other
provisions in this Plan.
 
20. Notices.  All notices or other communications by a participant to the
Company under or in connection with this Plan shall be deemed to have been duly
given when received in the form specified by the Company at the location, or by
the person, designated by the Company for the receipt thereof.
 
21. Term; Stockholder Approval.  After this Plan is adopted by the Board, this
Plan will become effective on the First Offering Date (as defined above). This
Plan shall be approved by the stockholders of the Company, in any manner
permitted by applicable corporate law, within twelve (12) months before or after
the date this Plan is adopted by the Board. No purchase of shares pursuant to
this Plan shall occur prior to such stockholder approval. This Plan shall
continue until the earlier to occur of (a) termination of this Plan by the Board
(which termination may be effected by the Board at any time), (b) issuance of
all of the shares of Common Stock reserved for issuance under this Plan, or
(c) ten (10) years from the adoption of this Plan by the Board.
 
22. Designation of Beneficiary.
 
(a) A participant may file a written designation of a beneficiary who is to
receive any shares and cash, if any, from the participant’s account under this
Plan in the event of such participant’s death subsequent to the end of an
Purchase Period but prior to delivery to him of such shares and cash. In
addition, a participant may file a written designation of a beneficiary who is
to receive any cash from the participant’s account under this Plan in the event
of such participant’s death prior to a Purchase Date.
 
(b) Such designation of beneficiary may be changed by the participant at any
time by written notice. In the event of the death of a participant and in the
absence of a beneficiary validly designated under this Plan who is living at the
time of such participant’s death, the Company shall deliver such shares or cash
to the executor or administrator of the estate of the participant, or if no such
executor or administrator has been appointed (to the knowledge of the Company),
the Company, in its discretion, may deliver such shares or cash to the spouse or
to any one or more dependents or relatives of the participant, or if no spouse,
dependent or relative is known to the Company, then to such other person as the
Company may designate.
 
23. Conditions Upon Issuance of Shares; Limitation on Sale of Shares.  Shares
shall not be issued with respect to an option unless the exercise of such option
and the issuance and delivery of such shares pursuant thereto shall comply with
all applicable provisions of law, domestic or foreign, including, without
limitation, the Securities Act, the Securities Exchange Act of 1934, as amended,
the rules and regulations promulgated thereunder, and the

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requirements of any stock exchange or automated quotation system upon which the
shares may then be listed, and shall be further subject to the approval of
counsel for the Company with respect to such compliance.
 
24. Applicable Law.  The Plan shall be governed by the substantive laws
(excluding the conflict of laws rules) of the State of California.
 
25. Amendment or Termination of this Plan.  The Board may at any time amend,
terminate or extend the term of this Plan, except that any such termination
cannot affect options previously granted under this Plan, nor may any amendment
make any change in an option previously granted which would adversely affect the
right of any participant, nor may any amendment be made without approval of the
stockholders of the Company obtained in accordance with Paragraph 21 above
within twelve (12) months of the adoption of such amendment (or earlier if
required by Paragraph 21) if such amendment would:
 
(a) increase the number of shares that may be issued under this Plan; or
 
(b) change the designation of the employees (or class of employees) eligible for
participation in this Plan.
 
Notwithstanding the foregoing, the Board may make such amendments to the Plan as
the Board determines to be advisable, if the continuation of the Plan or any
Offering Period would result in financial accounting treatment for the Plan that
is different from the financial accounting treatment in effect on the date this
Plan is adopted by the Board.

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