Exhibit 10.3

 

 

MEDTRONIC, INC

2005 EMPLOYEES STOCK PURCHASE PLAN

(As amended and restated effective August 27, 2009)

 

1.         Purpose Of Plan. Medtronic, Inc. (hereinafter referred to as the
“Company”) proposes to grant to Employees of the Company and of certain of its
Subsidiaries the opportunity to purchase common stock of the Company. Such
common stock shall be purchased pursuant to this Plan, which is the MEDTRONIC,
INC. 2005 EMPLOYEES STOCK PURCHASE PLAN (hereinafter referred to as the “Plan”).
The Company intends that the Plan qualify as an “employee stock purchase plan”
under Section 423 of the Internal Revenue Code of 1986, as amended, and shall be
construed in a manner consistent with the requirements of Section 423, or any
successor provision, and the regulations thereunder. The Plan is intended to
encourage stock ownership by all Employees of the Company, and to be an
incentive to them to remain in its employ, improve operations, increase profits
and contribute more significantly to the Company’s success.

 

 

2.

Definitions.

 

(a)        “Board of Directors” shall mean the Company’s Board of Directors.

 

(b)        “Committee” shall mean three or more directors designated by the
Board of Directors to administer the Plan under Paragraph 3 hereof, who are
considered to be non-employee directors within the meaning of Rule 16b-3 of the
Exchange Act.

 

(c)        “Corporate Transaction” shall mean (i) a dissolution or liquidation
of the Company, (ii) a sale of substantially all of the assets of the Company,
(iii) a merger, consolidation or reorganization of the Company with or into any
other corporation, regardless of whether the Company is the surviving
corporation, or (iv) a statutory share exchange or consolidation (or similar
corporate transaction) involving capital stock of the Company.

 

(d)        “Disability” shall mean Disability such that the Participant would be
considered disabled under any retirement plan of the Company which is qualified
under Section 401 of the Internal Revenue Code (which currently provides that a
Participant shall be considered to have a “Disability” as of the date benefit
payments commence under the long term disability plan maintained by the Company
or a Subsidiary).

 

(e)        “Employee” shall mean any individual who, as of the eligibility date
established under Paragraph 5 hereof, is classified as a regular employee, of
the Company or a Participating Employer; provided, however, that classification
of regular employee shall not exclude any employee that would not be permitted
to be excluded from the Plan under Section 423 of the Internal Revenue Code.

 

(f)        “Exchange Act” shall mean the Securities Exchange Act of 1934, as
amended.

 

(g)        ““Internal Revenue Code” shall mean the U.S. Internal Revenue Code of
1986, as amended.

 

(h)        “Participant” shall mean an Employee who has elected to participate
in the Plan.

 

(i)         “Participating Employer” shall mean Medtronic, Inc. and all of its
Subsidiaries (or any of their successors and assigns, by merger, purchase or
otherwise, that thereby become Subsidiaries), except for those Subsidiaries that
Medtronic, Inc. elects from time to time, by resolution duly adopted by its
Board of Directors, the Committee or the Committee’s delegate pursuant to
Paragraph 3 hereof, to be ineligible to participate in this Plan.

 

(j)         “Purchase Period” shall mean a period during which Participants are
eligible to purchase shares of the Company’s common stock according to the terms
of the Plan. The first Purchase Period shall be a five (5) calendar month period
commencing November 1, 2005, and terminating March 31, 2006. Subsequent Purchase
Periods shall be calendar quarters, with the first such quarterly Purchase
Period commencing April 1, 2006 and ending June 30, 2006, and succeeding
quarterly Purchase Periods following consecutively thereafter.

 

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(k)        “Rate of Exchange” shall mean the Rate of Exchange used by the
Company to record transactions on its financial records each month in which the
payroll deductions or refunds are processed.

 

(l)         “Retirement” shall mean Retirement of an Employee as defined under
any retirement plan of the Company which is qualified under Section 401 of the
Internal Revenue Code (which currently provides for retirement on or after age
55, provided the Employee has been credited with at least 10 years of vesting
service under the applicable plan, or retirement on or after age 62) or any
successor retirement plan of the Company or under any retirement plan of a
Participating Employer applicable to the Participant due to employment by a
non-U.S. Participating Employer or employment in a non-U.S. location, or as
otherwise determined by the Committee.

 

(m)       “Salary” shall mean the amount paid during the applicable Purchase
Period by the Participating Employer to or for the Participant as cash
compensation, including, without limitation, sales commissions, formula bonus
and short-term incentive plan payments, overtime, Salary continuation payments
and sick pay.

 

(n)        “Subsidiary” shall mean any corporation defined as a subsidiary of
the Company in Section 424(f) of the Internal Revenue Code or any successor
provision.

 

(o)        “Termination of Employment” shall mean an Employee’s complete
termination of employment with Medtronic, Inc. and all of its Subsidiaries. In
the event that any Subsidiary of Medtronic, Inc. ceases to be a Subsidiary of
Medtronic, Inc., the Employees of such Subsidiary shall be considered to have
terminated their employment as of the date such Subsidiary ceases to be a
Subsidiary, whether or not they continue in employment with such former
Subsidiary.

 

3.         Administration. The Committee shall administer the Plan. Subject to
the express provisions of the Plan, the Committee shall have full authority, in
its discretion, to interpret and construe any and all provisions of the Plan, to
adopt rules and regulations for administering the Plan, and to make all other
determinations deemed necessary or advisable for administering the Plan. The
Committee’s determination on the foregoing matters shall be conclusive. No
member of the Board of Directors or the Committee shall be liable for any action
or determination made in good faith with respect to the Plan or any option
granted or stock issued under the Plan.

 

The Board of Directors shall fill all vacancies on the Committee and may remove
any member of the Committee at any time, with or without cause. All
determinations of the Committee shall be made by a majority vote of its members.
Any decision which is made in writing and signed by a majority of the members of
the Committee shall be effective as fully as though made by a majority vote at a
meeting duly called and held.

 

4.         Duration And Purchase Periods Of The Plan. The Plan will commence as
of November 1, 2005, and will terminate ten (10) years thereafter, unless
extended by the Board of Directors. Notwithstanding the foregoing, this Plan
shall be considered of no force or effect and any options granted hereunder
shall be considered null and void unless the holders of a majority of all of the
issued and outstanding shares of the common stock of the Company approve the
Plan within the twelve (12) consecutive month period immediately preceding or
following the date of adoption of the Plan by the Board of Directors.

 

The Plan shall be carried out in a series of consecutive Purchase Periods. The
first Purchase Period shall commence November 1, 2005, and shall terminate March
31, 2006. Thereafter, Purchase Period shall be calendar quarters, with the first
such quarterly Purchase Period commencing April 1, 2006, and ending June 30,
2006. Each Purchase Period shall commence immediately after termination of the
previous Purchase Period. In the event that all of the stock reserved for grant
of options hereunder is issued pursuant to the terms hereof prior to the
commencement of one or more of the scheduled Purchase Periods, or the number of
shares remaining for optioning is so small, in the opinion of the Committee, as
to render administration of any succeeding Purchaser Period impracticable, such
Purchase Period or Purchase Periods may be canceled. Notwithstanding anything in
the Plan to the contrary, the Board of Directors, the Committee or the
Committee’s delegate pursuant to Paragraph 3 hereof may, in its, her or his
discretion, designate a different commencement date for a Purchase Period.

 

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5.         Eligibility. Each Employee who is employed by a Participating
Employer immediately preceding the commencement date of a Purchase Period shall
be eligible to participate in the Plan for such Purchase Period, provided that
he or she has satisfied the enrollment requirements described in Paragraph 6.

 

6.         Participation. Participation in the Plan is voluntary. An eligible
Employee may elect to participate in the Plan for any Purchase Period by
completing the Plan payroll deduction form provided by his or her Participating
Employer and delivering it to the Participating Employer or its designated
representative not later than the date preceding the commencement date of the
Purchase Period specified by the Senior Vice President, Human Resources of the
Company.

 

An Employee who elects to participate in the Plan for any Purchase Period shall
be deemed to have elected to participate in the Plan for each subsequent
consecutive Purchase Period unless such Participant elects to discontinue
payroll deductions during a Purchase Period or exercises his or her right to
withdraw all amounts previously withheld as provided in Paragraph 9(b). In this
event, the Participant must submit a change of election form or a new payroll
deduction form, as the case may be, to participate in the Plan for any
subsequent Purchase Period. The Participant may also increase his or her
participation for any subsequent Purchase Period by submitting a new payroll
deduction form during the enrollment period prior to that Purchase Period.

 

7.         Payroll Deductions.

 

(a)        Each Employee electing to participate shall indicate such election on
the Plan payroll deduction form by designating that percentage of his or her
Salary that he or she wishes to have deducted. Such percentage shall be stated
in whole percentage points and shall be not less than two percent (2%) nor more
than ten percent (10%) of the Participant’s Salary, or such other minimum and
maximum percentages as the Committee or Senior Vice President, Human Resources,
may establish from time to time, but not to exceed fifteen percent (15%).

 

Payroll deductions for a Participant shall commence on the first payday
coinciding with or immediately following the commencement date of the Purchase
Period and shall terminate on the last payday immediately prior to or coinciding
with the termination date of that Purchase Period, unless sooner terminated by
the Participant as provided in Paragraph 7(b) or 9(a) hereof. The authorized
deductions shall be made over the pay periods of such Purchase Period by
deducting from the Participant’s Salary for each such pay period that percentage
as specified by the Participant as of the commencement date of the Purchase
Period. Except for a Participant’s rights to reduce or discontinue deductions
pursuant to Paragraphs 7(b) and 9 hereof, the same percentage deduction shall be
applied against the Participant’s Salary for each pay period during such
Purchase Period, whether or not the Participant’s Salary level increases or
decreases after the commencement date of such Purchase Period.

 

The extent to which a Participant may actually exercise his or her option shall
be based upon the amount actually withheld for such Participant as of the
termination date of the phase.

 

(b)        A Participant shall not be entitled to increase the percentage amount
to be deducted in a given Purchase Period after the delivery deadline specified
in Paragraph 6 for filing his or her payroll deduction form. The Participant may
elect at any time prior to or during a Purchase Period to decrease the
percentage amount to be so deducted or discontinue any further deductions in a
given Purchase Period by filing an amended election form at least ten (10) days
prior to the first payroll date as of which such decrease or discontinued
deduction is to become effective. In the event of such a decrease or
discontinuance of deductions, the extent to which such Participant may exercise
his or her option as of the termination date of the Purchase Period shall depend
upon the amount actually withheld through payroll deductions for such
Participant. A Participant may also completely discontinue participation in the
Plan as provided in Paragraph 9 hereof.

 

(c)        Payroll deductions which are authorized by Participants who are paid
compensation in foreign currency shall be maintained in payroll deduction
accounts (as provided in Paragraph 11) in the country in which such Participant
is employed until exercise of the option. Upon exercise of the option granted to
such Participant, the amount so withheld shall be used to purchase up to the
maximum number of shares of stock which is subject to that Participant’s option
pursuant to Paragraph 8(a)(i) below, determined on the basis of the Rate of
Exchange for currency as of the exercise date. Upon exercise of the option, the
option price shall be paid to the Company in dollars after having been converted
at the Rate of Exchange as of the exercise date, and the extent to which the
Participant may exercise his or her option is dependent, in part, upon the Rate
of Exchange as of such date.

 

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8.      Options.

 

 

(a)

Grant Of Option.

 

(i)         Number Of Shares. A Participant who is employed by the Participating
Employer as of the commencement date of a Purchase Period shall be granted an
option at termination date of that Purchase Period to purchase that number of
whole shares of common stock of the Company by dividing the total amount
actually credited to that Participant’s account under Paragraph 7 hereof by the
option price set forth in Paragraph 8(a)(ii), provided such option shall be
subject to the limitations in Paragraph 8(a)(iv).

 

(ii)         Option Price. The option price per share for such common stock
shall be eighty-five percent (85%) of the fair market value per share of such
common stock on the termination date of the Purchase Period.

 

(iii)       Fair Market Value. The fair market value of the Company’s common
stock on such date (or the last preceding business day if such date is a
Saturday, Sunday or holiday) shall be computed as follows:

 

A.         If the Company’s common stock shall be listed on any national
securities exchange, then such price shall be computed on the basis of the
closing sale price of the common stock on such exchange on such date, or, if no
sale of the common stock has occurred on such exchange on that date, on the next
preceding date on which there was a sale of the common stock;

 

B.         If the common stock shall not be so listed, then such price shall be
the mean between the highest bid and asked prices quoted by a recognized market
maker in the common stock on such date; or

 

C.         If the common stock shall not be so listed and such bid and asked
prices shall not be so quoted, then such price shall be determined by an
investment banking firm acceptable to the Company.

 

(iv)       Limitations On Purchase. Anything herein to the contrary
notwithstanding:

 

A.         A Participant shall not have the right to purchase common stock under
all employee stock purchase plans of the Company, its Subsidiaries or its
parent, if any, at a rate which exceeds Twenty-Five Thousand Dollars ($25,000)
of fair market value of such stock as determined at the time such option is
granted (which is equal to $21,250 of stock at 85% of fair market value on the
termination date of the Purchase Period) for each calendar year in which such
option is outstanding at any time.

 

B.         No Employee shall be granted an option if, immediately after the
grant, such Employee would own stock possessing five percent (5%) or more of the
total combined voting power or value of all classes of stock of the Company, its
parent, if any, or of any Subsidiary of the Company. For purposes of determining
stock ownership under this subparagraph (B), the rules of Section 424(d) of the
Internal Revenue Code, or any successor provision, shall apply, and stock that
the Employee may purchase under outstanding options shall be treated as stock
owned by the Employee.

 

C.         The Committee may, in its discretion, limit the number of shares
available for option grants during any Purchase Period, as it deems appropriate.

 

(b)        Exercise Of Option. Except as otherwise specified in Paragraph 9, the
Participant’s option for the purchase of such number of shares of common stock
as determined pursuant to Paragraph 8(a) will be exercised automatically for him
or her as of the termination date of that Purchase Period. In no event shall a
Participant be allowed to exercise his or her option for more shares than can be
purchased with the payroll deductions actually credited to his or her account
during such Purchase Period, whether or not the deductions actually credited are
less than the full amount to be credited as determined on the commencement date
of the Purchase Period pursuant to Paragraph 7(a) hereof, it being intended that
the sufficiency of amounts actually credited to a Participant’s account be a
condition to the exercise of the option by such Participant.

 

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(i)         Fractional shares of common stock will not be issued under the Plan.
For Participants who use their funds to purchase the maximum amount of stock
permissible at the end of a Purchase Period, any cash amount that remains in the
Participant’s account because it is insufficient to purchase a whole share of
common stock shall be held in the account until the exercise date of the next
subsequent Purchase Period, at which time it will be included in the funds used
to purchase common stock for that Purchase Period, except as set forth in
Paragraph 9 or the Committee, in its discretion, elects to pay out such cash
amount to Participants.

 

(ii)        Upon issuance of the common stock to the Participant at the end of a
Purchase Period, the dividends payable on such stock will be automatically
reinvested in the Company’s common stock under the Medtronic, Inc. Dividend
Reinvestment Plan (the “DRP”) unless the Committee, in its discretion,
determines otherwise. The Participant has the right, upon written notice to the
Company’s designated agent, to elect instead to receive the dividends directly
by check.

 

(c)        Issuance And Delivery Of Stock. As promptly as practicable after the
termination date of any Purchase Period, the Company will issue the stock
purchased under the Plan. The Company may determine, in its discretion, the
manner of delivery of common stock purchased under the Plan, which may be by
electronic account entry into new or existing accounts, delivery of stock
certificates or such other means as the Company, in its discretion, deems
appropriate. The Company may, in its discretion, hold such stock on behalf of
the Participants during the restricted period set forth in Paragraph 8(d) below.

 

(d)        Restrictions On Resale Or Transfer Of Stock. Except in the case of a
Participant who exercises his or her option pursuant to Paragraph 9(d) hereof,
shares of common stock acquired by a Participant hereunder may not be sold or
transferred until after the earlier of: (1) the one-year anniversary of the date
on which the shares were issued; or (2) the death of the Participant.
Notwithstanding the preceding sentence, the Committee may require that the
Participant not transfer such shares for any additional period determined by the
Committee to be necessary to ensure that the Company or any Participating
Employer is able to meet its reporting requirements pursuant to Section 423 of
the Internal Revenue Code.

 

Any attempt by the Participant to sell or transfer such shares in violation of
this Paragraph 8(d) shall be considered null and void and of no force or effect.
During such restricted transfer period, each certificate and account evidencing
such shares of common stock shall bear an appropriate legend or stop transfer
order, respectively, referring to the terms, restrictions and conditions
applicable to the transfer of such shares.

 

9.         Election Not to Purchase, Withdrawal Or Termination Of Participation.

 

(a)        Election Not to Purchase. A Participant may, by written notice to his
or her Participating Employer prior to the termination date of a Purchase
Period, elect, effective as of the termination date of that Purchase Period, not
to purchase any common stock or to purchase a specified number of shares of
common stock less than the maximum number of shares he or she is authorized to
purchase pursuant to Paragraph 8(a)(i). In such event, the remaining cash
amounts credited to the Participant’s account shall be distributed to the
Participant as soon as practicable after the termination date of the Purchase
Period. In order to be effective, this notice must be provided to the
Participating Employer by the date during the Purchase Period specified by the
Senior Vice President, Human Resources.

 

(b)        Withdrawal. A Participant may, preceding the termination date of a
Purchase Period, withdraw all payroll deductions then credited to his or her
account by giving written notice to his or her Participating Employer. Upon
receipt of such notice of withdrawal, all payroll deductions credited to the
Participant’s account will be paid to him or her and no further payroll
deductions will be made for such Participant during that Purchase Period. In
such case, no option shall be granted the Participant under that Purchase
Period. Partial withdrawals of payroll deductions may not be made. In order to
be effective, this notice must be provided to the Participating Employer by the
date during the Purchase Period specified by the Senior Vice President, Human
Resources.

 

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(c)        Termination Of Employment. If a Participant’s employment shall be
terminated for reasons other than Retirement or Disability prior to the
termination date of any Purchase Period in which he or she is participating, no
option shall be granted to such Participant under the Plan and the payroll
deductions credited to his or her account shall be returned to him or her.

 

(d)        Retirement Or Disability. If the Participant terminates employment
prior to the last day of a Purchase Period in which he is participating as a
result of Retirement or Disability, the grant date for his or her option as well
as the termination date of such Purchase Period solely with respect to such
Participant shall be considered for all purposes of this Plan as being the last
day of the Purchase Period in which such Participant’s employment is terminated;
provided, however, during the initial Purchase Period of this Plan, such date
shall be considered for all purposes of this Plan as being the last day of the
month in which such Participant’s employment is terminated. In such event, the
Participant shall remain a Participant hereunder until the termination date of
the Purchase Period as applicable to him or her, the Participant shall be
entitled to exercise his or her option as of such date in accordance with the
provisions of this Plan, and any shares of stock acquired by the Participant
pursuant to exercise of his or her option shall not be subject to the
restrictions on transfer as otherwise provided for under Paragraph 8(d) hereof.
If such Participant dies prior to the termination date of the Purchase Period as
applicable to him or her, the provisions of Paragraph 9(e)(i) hereof shall
apply.

 

(e)        Death.

 

(i)         If the Participant dies before the termination date of any Purchase
Period of the Plan in which he or she is participating, the payroll deductions
credited to the Participant’s account shall be paid to the Participant’s
beneficiary pursuant to Paragraph 14 below. If the Participant elects not to
exercise his or her option pursuant to Paragraph 9(a) and the Participant dies
before the cash amounts credited to his or her account have been distributed to
him or her, such amounts shall be paid to the Participant’s beneficiary pursuant
to Paragraph 14 below.

 

(ii)        In the event a Participant dies after exercise of his or her option,
but prior to the delivery to him or her of the common stock and cash, if any, to
be transferred pursuant to the exercise, any such stock and cash shall be
delivered by the Company to the Participant’s beneficiary pursuant to Paragraph
14 (or, if permitted pursuant to Paragraph 10(d), the joint tenant named
thereunder), or, if none, the executor or administrator of the estate of the
Participant. In the event no such executor or administrator has been appointed
as of the date for delivery, the stock shall be held by the Company until it
receives written notification from the estate of such appointment and shall then
be payable to the representative of the estate.

 

10.        Stock Reserved For Options.

 

(a)        Twenty-five million (25,000,000) shares of common stock of the
Company, ten cents ($.10) par value per share (or the number and kind of
securities to which such shares may be adjusted in accordance with Paragraph
12), are reserved for issuance upon the exercise of options granted under the
Plan. Shares subject to the unexercised portion of any lapsed or expired option
may again be subject to option under the Plan.

 

(b)        If, as of the beginning of a Purchase Period, the total number of
shares of common stock for which options are to be granted for the Purchase
Period exceeds the number of shares then remaining available under the Plan
(after deduction of all shares for which options have been exercised or are then
outstanding) and if the Committee does not elect to cancel such Purchase Period
pursuant to Paragraph 4, the Committee shall make a pro rata allocation of the
shares remaining available in as nearly a uniform and equitable manner as
practicable. In such event, the payroll deductions to be made pursuant to the
Plan that would otherwise become effective on such commencement date shall be
reduced accordingly. The Committee shall give written notice of such reduction
to each Participant affected.

 

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(c)        The Participant (or, if permitted pursuant to Paragraph 10(d) hereof,
the joint tenant named thereunder) shall have no rights as a shareholder with
respect to any shares subject to the Participant’s option until the date of
issuance of such shares to such Participant. No adjustment shall be made for
dividends (ordinary or extraordinary, whether in cash, securities or other
property), distributions or other rights for which the record date is prior to
the issuance date of such stock, except as otherwise provided pursuant to
Paragraph 12.

 

(d)        The shares of common stock to be delivered to a Participant pursuant
to the exercise of an option under the Plan will be registered in the name of
the Participant or, if the Committee permits and the Participant so directs by
written notice to the Committee prior to the termination date of that Purchase
Period of the Plan, in the names of the Participant and one other person as
joint tenants with rights of survivorship, to the extent permitted by law. Any
shares of stock so registered in the names of the Participant and his or her
joint tenant shall be subject to any applicable restrictions on the right to
transfer such shares during such Participant’s lifetime as otherwise provided in
Paragraph 8 hereof.

 

11.       Accounting And Use Of Funds. Payroll deductions for each Participant
shall be credited to an account established under the Plan. A Participant may
not make any separate cash payments into such account. Such account shall be
solely for bookkeeping purposes and no separate fund or trust shall be
established hereunder. All funds from payroll deductions received or held by the
Participating Employers under the Plan may be used, without limitation, for any
corporate purpose by the Participating Employers who shall not be obligated to
segregate such funds. Such accounts shall not bear interest.

 

12.       Adjustment Provision. Subject to any required action by the
shareholders of the Company, in the event that the issued and outstanding shares
of common stock of the Company are changed into or exchanged for a different
number or kind of shares or securities of the Company or of another issuer, or
if additional shares or new or different securities are distributed with respect
to the outstanding shares of the common stock of the Company, through a
reorganization or merger to which the Company is a party, or through a
combination, consolidation, recapitalization, reclassification, stock split,
stock dividend, reverse stock split, stock consolidation or other capital change
or adjustment, effected without receipt of consideration by the Company, the
number of shares of stock subject to each outstanding option and the number of
shares remaining reserved for grant and not yet subject to option and the price
per share thereof shall be automatically equitably adjusted to reflect such
change.

 

In the event of a Corporate Transaction, the Board of Directors may either: (i)
amend or adjust the provisions of this Plan to provide for the acceleration of
the current Purchase Period and the exercise of options thereunder; or (ii)
continue the Plan with respect to completion of the then current Purchase Period
and the exercise of options thereunder. In the event of such continuance,
Participants shall have the right to exercise their options as to an equivalent
number of shares of stock of the corporation succeeding the Company by reason of
such sale, merger, consolidation, liquidation or other event, as provided
pursuant to Section 424(a) of the Internal Revenue Code, or any successor
provision. The grant of an option pursuant to the Plan shall not limit in any
way the right or power of the Company or Board of Directors to make adjustments,
reclassifications, reorganizations or changes in the Company’s capital or
business structure or to merge, consolidate, dissolve, liquidate, sell or
transfer all or any part of its business or assets.

 

13.       Non-Transferability Of Options. Options granted under any Purchase
Period of the Plan shall not be transferable and shall be exercisable only by
the optionee.

 

Neither payroll deductions credited to a Participant’s account, nor any rights
with regard to the exercise of an option or the receipt of common stock under
any Purchase Period of the Plan may be assigned, transferred, pledged or
otherwise disposed of in any way by the Participant. Any such attempted
assignment, transfer, pledge or other disposition shall be null and void and
without effect, except that a Participating Employer may, at its option, treat
such act as an election to withdraw funds in accordance with Paragraph 9(b).

 

14.       Designation Of Beneficiary. A Participant may file a written
designation of a beneficiary who is to receive any cash or stock payable
pursuant to Paragraph 9(e) hereof. The beneficiary designation may be changed by
the Participant at any time by written notice to the Participating Employer.

 

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Upon the death of a Participant and receipt by the Participating Employer of
proof deemed adequate by it of the identity and existence at the Participant’s
death of a beneficiary validly designated under the Plan, the Participating
Employer shall deliver such cash or stock to such beneficiary. In the event
there is no validly designated beneficiary under the Plan who is living at the
time of the Participant’s death, the Participating Employer shall deliver the
cash or stock 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 Participating Employer, it may, in its discretion, deliver such cash or
stock 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
Participating Employer, then to such other person as the Participating Employer
may designate. The Participating Employer will not be responsible for or be
required to give effect to the disposition of any cash or stock in accordance
with any will or other testamentary disposition made by such Participant or in
accordance with the provisions of any law concerning intestacy, or otherwise. No
designated beneficiary shall, prior to the death of a Participant by whom he has
been designated, acquire any interest in any stock or in any option or in the
cash credited to the Participant under any Purchase Period of the Plan.

 

15.       Amendment and Termination. The Plan may be terminated at any time by
the Board of Directors provided that, except as permitted pursuant to Paragraph
12, no such termination will take effect with respect to any completed Purchase
Period. Also, the Board may, from time to time, amend the Plan as it may deem
proper and in the best interests of the Company or as may be necessary to comply
with Section 423 of the Internal Revenue Code or other applicable laws or
regulations, provided that no such amendment shall, without prior approval of
the stockholders of the Company: (a) increase the total number of shares for
which options may be granted under the Plan (except as provided in Paragraph
12); (b) permit payroll deductions at a rate in excess of ten percent (10%) of a
Participant’s compensation or such other permissible maximum contribution
established by the Committee or Senior Vice President, Human Resources; (c)
impair any outstanding option without the consent of the optionee (except as
provided in Paragraph 12); (d) change the Employees or class of Employees
eligible to participate under the Plan; or (e) materially increase the benefits
accruing to Participants under the Plan.

 

16.       Notices. All notices or other communications in connection with the
Plan or any Purchase Period thereof shall be in the form specified by the
Committee and shall be deemed to have been duly given when sent to the
Participant at his or her last known address, or the Participant’s designated
personal representative or beneficiary, or to the Participating Employer or its
designated representative, as the case may be.

 

17.       Alteration of Plan Terms to Comply with Foreign Law; Establishment of
Non-Statutory Plans. The Senior Vice President, Human Resources of the Company
shall have the authority to alter the operation of the Plan to the extent
necessary to achieve desired tax or other objectives in particular locations
outside the United States of America or to comply with local laws applicable to
offerings in such foreign jurisdictions, including, without limitation: (i)
authorizing alternative payment methods in the case of foreign jurisdictions
where payroll deductions are not allowed; and (ii) imposing lower limitations on
the shares available for option grants during any Purchase Period in the case of
foreign jurisdictions where lower limitations are required. To the extent that
such alterations may be made in a manner that does not result in the Plan’s
failure to comply with Code Section 423, the options subject to such alterations
shall for all purposes be considered to be options granted under the Plan. To
the extent that such alterations would result in the Plan’s failure to comply
with Code Section 423, the options subject to such alterations shall be
considered to be options granted under one or more non-statutory stock option
plans. To the extent that the employing entity in a foreign jurisdiction does
not constitute a Subsidiary, options granted to such employees shall be
considered to be options granted under one or more non-statutory option plans.
In all such cases, the terms of such non-statutory stock option plan or plans
shall have the same terms as the Plan except for such alterations. In all cases,
the total number of shares authorized to be issued under the Plan shall apply in
the aggregate to the Plan and any such non-statutory stock option plans.

 

8

 

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