Exhibit 10.55
APPLIED MATERIALS, INC.
EMPLOYEES’ STOCK PURCHASE PLAN
(as amended and restated March 10, 2008)
SECTION 1
PURPOSE
          Applied Materials, Inc. having established the Applied Materials, Inc.
Employees’ Stock Purchase Plan (the “Plan”), in order to provide eligible
employees of the Company with the opportunity to purchase Common Stock through
payroll deductions or, if payroll deductions are not permitted under local laws,
through other means as specified by the Committee, hereby amends and restates
the Plan effective as of March 10, 2008 (the “Effective Date”). The Plan is
intended to qualify as an employee stock purchase plan under Section 423(b) of
the Code, although the Company makes no undertaking or representation to
maintain such qualification.
SECTION 2
DEFINITIONS
          2.1 “1934 Act” means the Securities Exchange Act of 1934, as amended.
Reference to a specific Section of the 1934 Act or regulation thereunder shall
include such Section or regulation, any valid regulation promulgated under such
Section, and any comparable provision of any future legislation or regulation
amending, supplementing or superseding such Section or regulation.
          2.2 “Board” means the Board of Directors of the Company.
          2.3 “Code” means the Internal Revenue Code of 1986, as amended.
Reference to a specific Section of the Code or regulation thereunder shall
include such Section or regulation, any valid regulation promulgated under such
Section, and any comparable provision of any future legislation or regulation
amending, supplementing or superseding such Section or regulation.
          2.4 “Committee” shall mean the committee appointed by the Board to
administer the Plan. Any member of the Committee may resign at any time by
notice in writing mailed or delivered to the Secretary of the Company. As of the
Effective Date of the Plan, the Plan shall be administered by the Human
Resources and Compensation Committee of the Board.
          2.5 “Common Stock” means the common stock of the Company, $0.01 par
value per share.
          2.6 “Company” means Applied Materials, Inc., a Delaware corporation.
          2.7 “Compensation” means a Participant’s base wages, excluding any
overtime, bonuses, allowances or shift differential. The Committee, in its
discretion, may, on a uniform and nondiscriminatory basis, establish a different
definition of Compensation prior to an Enrollment Date for all options to be
granted on such Enrollment Date.
          2.8 “Eligible Employee” means every Employee of an Employer, except
(a) any Employee who immediately after the grant of an option under the Plan,
would own stock and/or hold outstanding 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 or of any Subsidiary of the Company (including
stock attributed to such Employee pursuant to Section 424(d) of the

1

--------------------------------------------------------------------------------

 

Code), or (b) as provided in this Section 2.8. The Committee, in its discretion,
from time to time may, prior to an Enrollment Date for all options to be granted
on such Enrollment Date, determine on a uniform and nondiscriminatory basis that
an Employee shall not be an Eligible Employee if he or she: (1) has not
completed the required length of service with the Company, if any, as such
length may be determined by the Committee in its discretion (such length of
required service not to exceed two (2) years), (2) customarily works not more
than twenty (20) hours per week (or such lesser period of time as may be
determined by the Committee in its discretion), (3) customarily works not more
than five (5) months per calendar year (or such lesser period of time as may be
determined by the Committee in its discretion), (4) is an officer or other
manager, or (5) is a highly compensated employee under Section 414(q) of the
Code. An Employee who otherwise is an Eligible Employee shall be treated as
continuing to be such while the Employee is on sick leave or other leave of
absence approved in writing by the Employer, except that if the period of leave
exceeds ninety (90) days and the Employee’s right to reemployment is not
guaranteed by statute or contract, he or she shall cease to be an Eligible
Employee on the 91st day of such leave. Until and unless determined otherwise by
the Committee, Eligible Employees shall exclude each Employee (other than as
excluded by subsection (a) of this Section 2.8) of an Employer who is
customarily employed by the Company and/or a Subsidiary to work less than or
equal to twenty (20) hours per week or five (5) months per calendar year.
          2.9 “Employee” means an individual who is a common-law employee of any
Employer, whether such employee is so employed at the time the Plan is adopted
or becomes so employed subsequent to the adoption of the Plan.
          2.10 “Employer” or “Employers” means any one or all of the Company and
those Subsidiaries which, with the consent of the Board or the Committee, have
adopted the Plan or have been designated by the Board or the Committee in
writing as an Employer for purposes of participation in the Plan. With respect
to a particular Participant, Employer means the Company or Subsidiary, as the
case may be, that directly employs the Participant.
          2.11 “Enrollment Date” means such dates as may be determined by the
Committee, in its discretion and on a uniform and nondiscriminatory basis, from
time to time.
          2.12 “Grant Date” means any date on which a Participant is granted an
option under the Plan.
          2.13 “Participant” means an Eligible Employee who (a) has become a
Participant in the Plan pursuant to Section 4.1 and (b) has not ceased to be a
Participant pursuant to Section 8 or Section 9.
          2.14 “Plan” means the Applied Materials, Inc. Employees’ Stock
Purchase Plan, as set forth in this instrument and as hereafter amended from
time to time.
          2.15 “Purchase Date” means such dates on which each outstanding option
granted under the Plan shall be exercised (except in such instance in which the
Plan has been terminated), as may be determined by the Committee, in its
discretion and on a uniform and nondiscriminatory basis from time to time prior
to an Enrollment Date for all options to be granted on such Enrollment Date.
          2.16 “Purchase Period” means the period beginning on such date as may
be determined by the Committee, in its discretion and on a uniform and
nondiscriminatory basis, and ending on a Purchase Date.

2

--------------------------------------------------------------------------------

 

          2.17 “Subsidiary” means any corporation in an unbroken chain of
corporations beginning with the Company if each of the corporations other than
the last corporation in the unbroken chain then owns stock possessing fifty
percent (50%) or more of the total combined voting power of all classes of stock
in one of the other corporations in such chain.
SECTION 3
SHARES SUBJECT TO THE PLAN
          3.1 Number Available. A maximum of one hundred twenty-one million, two
hundred thousand (121,200,000) shares of Common Stock shall be available for
issuance pursuant to the Plan. Shares issued under the Plan may be newly issued
shares or treasury shares.
          3.2 Adjustments. In the event of any reorganization, recapitalization,
stock split, reverse stock split, stock dividend, spin off, combination of
shares, merger, consolidation, offering of rights or other similar change in the
capital structure of the Company, the Committee shall proportionately adjust the
number, kind and purchase price of the shares available for purchase under the
Plan, the per person share number limits on purchases and the purchase price and
number of shares subject to any option under the Plan which has not yet been
exercised.
SECTION 4
ENROLLMENT
          4.1 Participation. Each Eligible Employee may elect to become a
Participant by enrolling or re-enrolling in the Plan effective as of any
Enrollment Date. In order to enroll, an Eligible Employee must complete, sign
and submit to the Company an enrollment form in such form, manner and by such
deadline as may be specified by the Committee from time to time, in its
discretion and on a nondiscriminatory basis, and which may be in electronic
form. Any Participant whose option expires and who has not withdrawn from the
Plan shall be automatically re-enrolled in the Plan on the Enrollment Date
immediately following the Purchase Date on which his or her option expires.
          4.2 Payroll Withholding and Contribution. On his or her enrollment
form, each Participant must elect to make Plan contributions via payroll
withholding from his or her Compensation or, if payroll withholding is not
permitted under local laws, via such other means as specified by the Committee.
Pursuant to such procedures as the Committee may specify from time to time
(which may be in electronic form), a Participant may elect to have withholding
equal to, or otherwise contribute, a whole percentage from one percent (1%) to
ten percent (10%) (or such greater or lesser percentage or dollar amount that
the Committee may establish from time to time, in its discretion and on a
uniform and nondiscriminatory basis, for all options to be granted on any
Enrollment Date). Unless and until the Committee determines otherwise, no
Participant may contribute more than $6,500 during any one Purchase Period. If
permitted by the Committee, a Participant instead may elect to have a specific
amount withheld or to contribute a specific amount, in dollars or in the
applicable local currency, subject to such uniform and nondiscriminatory rules
as the Committee in its discretion may specify. A Participant may elect to
increase or decrease his or her rate of payroll withholding or contribution by
submitting an election (which may be in electronic form) in accordance with, and
if and to the extent permitted by, procedures established by the Committee from
time to time, which may, if permitted by the Committee, include a decrease to
zero percent (0%); provided, however, that unless determined otherwise by the
Committee, a decrease to zero percent (0%) shall be deemed a withdrawal from the
Plan. A Participant may stop his or her payroll withholding or contribution by
submitting an election in accordance with and to the extent permitted by
procedures as may be established by the Committee from time to time. In order to
be effective as of a specific date, an enrollment election must be received by
the

3

--------------------------------------------------------------------------------

 

Company no later than the deadline specified by the Committee, in its discretion
and on a nondiscriminatory basis, from time to time. Any Participant who is
automatically re-enrolled in the Plan shall be deemed to have elected to
continue his or her payroll withholding or contributions at the percentage last
elected by the Participant. Notwithstanding the foregoing, to the extent
necessary to comply with Section 423(b)(8) of the Code and Section 5.3 of the
Plan, the Company may automatically decrease a Participant’s payroll deductions
to zero percent (0%) at any time during an option period. Under such
circumstances, payroll deductions shall recommence at the rate provided in such
Participant’s enrollment form at the beginning of the first Purchase Period
which is scheduled to end in the following calendar year, unless terminated by
the Participant as provided in Section 7 of the Plan.
SECTION 5
OPTIONS TO PURCHASE COMMON STOCK
          5.1 Grant of Option. On each Enrollment Date on which the Participant
enrolls or re-enrolls in the Plan, he or she shall be granted an option to
purchase shares of Common Stock.
          5.2 Duration of Option. Each option granted under the Plan shall
expire on the earliest to occur of (a) the completion of the purchase of shares
on the last Purchase Date occurring within 27 months of the Grant Date of such
option, (b) such shorter option period as may be established by the Committee
from time to time, in its discretion and on a uniform and nondiscriminatory
basis, prior to an Enrollment Date for all options to be granted on such
Enrollment Date, or (c) the date on which the Participant ceases to be such for
any reason. Beginning with the offering period beginning September 1, 2008 and
until otherwise determined by the Committee for all options to be granted on an
Enrollment Date, the period referred to in clause (b) in the preceding sentence
shall mean the period from the applicable Enrollment Date through the last
business day prior to the Enrollment Date that is approximately six (6) months
later.
          5.3 Number of Shares Subject to Option. The maximum number of shares
available for purchase by each Participant under the option or on any given
Purchase Date shall be established by the Committee from time to time prior to
an Enrollment Date for all options to be granted on such Enrollment Date,
subject to this Section 5.3. Unless and until otherwise determined by the
Committee, a Participant may not purchase more than 1,000 shares (subject to
adjustment in accordance with Section 3.2) on any given Purchase Date.
Notwithstanding any contrary provision of the Plan, to the extent required under
Section 423(b) of the Code, an option (taken together with all other options
then outstanding under this Plan and under all other similar employee stock
purchase plans of the Employers) shall not give the Participant the right to
purchase shares at a rate which accrues in excess of $25,000 of fair market
value at the applicable Grant Dates of such shares in any calendar year during
which such Participant is enrolled in the Plan at any time.
          5.4 Other Terms and Conditions. Each option shall be subject to the
following additional terms and conditions:
     (a) payment for shares purchased under the option shall be made only
through payroll withholding under Section 4.2, unless payroll withholding is not
permitted under local laws as determined by the Committee, in which case the
Participant may contribute by such other means as specified by the Committee;
     (b) purchase of shares upon exercise of the option shall be accomplished
only in accordance with Section 6.1;

4

--------------------------------------------------------------------------------

 

     (c) the price per share under the option shall be determined as provided in
Section 6.1, subject to adjustment pursuant to Section 3.2; and
     (d) the option in all respects shall be subject to such other terms and
conditions, applied on a uniform and nondiscriminatory basis, as the Committee
shall determine from time to time in its discretion.
SECTION 6
PURCHASE OF SHARES
          6.1 Exercise of Option. Subject to Section 6.2 and the limits
established under Section 5.3, on each Purchase Date, the funds then credited to
each Participant’s account shall be used to purchase whole shares of Common
Stock. Any cash remaining after whole shares of Common Stock have been purchased
or that exceed the $25,000 cap described in Section 5.3 above, shall be refunded
to the Participant without interest (except as otherwise required under local
laws). The price per Share of the Shares purchased under any option granted
under the Plan shall be determined by the Committee from time to time, in its
discretion and on a uniform and nondiscriminatory basis, for all options to be
granted on an Enrollment Date. However, in no event shall the price be less than
eighty-five percent (85%) of the lower of:
     (a) the closing price per Share on the Grant Date for such option on the
Nasdaq Global Select Market; or
     (b) the closing price per Share on the Purchase Date on the Nasdaq Global
Select Market.
If a closing price is not available on the Grant Date or Purchase Date, then the
closing price per Share referred to in 6.1(a) and (b) above shall refer to the
closing price per Share on the first Nasdaq Global Select Market trading day
immediately following the Grant Date or preceding the Purchase Date,
respectively.
          6.2 Delivery of Shares. As directed by the Committee in its sole
discretion, shares purchased on any Purchase Date shall be delivered directly to
the Participant or to a custodian or broker, if any, designated by the Committee
to hold shares for the benefit of the Participants. As determined by the
Committee from time to time, such shares shall be delivered as physical
certificates or by means of a book entry system.
          6.3 Exhaustion of Shares. If at any time the shares available under
the Plan are over-enrolled, enrollments shall be reduced to eliminate the
over-enrollment, as the Committee determines, which determination shall be on a
uniform and nondiscriminatory manner. For example, the Committee may determine
that such reduction method shall be “bottom up”, with the result that all option
exercises for one share shall be satisfied first, followed by all exercises for
two shares, and so on, until all available shares have been exhausted. Any funds
that, due to over-enrollment, cannot be applied to the purchase of whole shares
shall be refunded to the Participants without interest thereon, except as
otherwise required under local laws.
          6.4 Tax Withholding. Prior to the delivery of any shares purchased
under the Plan, the Company shall have the power and the right to deduct or
withhold, or require a Participant to remit to the Company, an amount sufficient
to satisfy all tax and social insurance liability obligations and requirements
in connection with the options and shares purchased thereunder, if any,
including, without limitation, all federal, state, and local taxes (including
the Participant’s FICA obligation, if any) that are required to be withheld by
the Company or the

5

--------------------------------------------------------------------------------

 

employing Subsidiary, the Participant’s and, to the extent required by the
Company (or the employing Subsidiary), the Company’s (or the employing
Subsidiary’s) fringe benefit tax liability, if any, associated with the grant,
vesting, or sale of shares and any other Company (or employing Subsidiary) taxes
the responsibility for which the Participant has agreed to bear with respect to
such shares.
SECTION 7
WITHDRAWAL
          7.1 Withdrawal. A Participant may withdraw from the Plan by submitting
a withdrawal form to the Company in such form and manner as the Committee may
specify (which may be in electronic form). A withdrawal shall be effective only
if it is received by the Company by the deadline specified from time to time by
the Committee, in its discretion and on a uniform and nondiscriminatory basis.
Unless otherwise determined by the Committee, when a withdrawal becomes
effective, the Participant’s payroll contributions shall cease and all amounts
then credited to the Participant’s account shall be distributed to him or her,
without interest thereon, except as otherwise required under local laws.
SECTION 8
CESSATION OF PARTICIPATION
          8.1 Termination of Status as Eligible Employee. A Participant shall
cease to be a Participant immediately upon the cessation of his or her status as
an Eligible Employee (for example, because of his or her termination of
employment from all Employers for any reason), except that the Committee, in its
discretion and on a uniform and nondiscriminatory basis, may permit an
individual who has ceased to be an Eligible Employee to exercise his or her
option on the next Purchase Date to the extent permitted by Code Section 423. As
soon as practicable after such cessation, the Participant’s payroll
contributions shall cease and all amounts then credited to the Participant’s
account shall be distributed to him or her without interest thereon, except as
otherwise required under local laws.
SECTION 9
DESIGNATION OF BENEFICIARY
          9.1 Designation. Each Participant may, pursuant to such uniform and
nondiscriminatory procedures as the Committee may specify in its discretion from
time to time, designate one or more beneficiaries to receive any amounts
credited to the Participant’s account at the time of his or her death
(“Beneficiaries”). Notwithstanding any contrary provision of this Section 9,
Sections 9.1 and 9.2 shall be operative only after, and for so long as, the
Committee determines on a uniform and nondiscriminatory basis to permit the
designation of Beneficiaries.
          9.2 Changes. A Participant may designate different Beneficiaries or
may revoke a prior Beneficiary designation at any time by delivering a new
designation or revocation of a prior designation, as applicable, in like manner.
Any designation or revocation shall be effective only if it is received by the
Committee. However, when so received, the designation or revocation shall be
effective as of the date the designation or revocation is executed, whether or
not the Participant still is living, but without prejudice to the Committee on
account of any payment made before the change is recorded. The last effective
designation received by the Committee shall supersede all prior designations.
          9.3 Failed Designations. If a Participant dies without having
effectively designated a Beneficiary, or if no Beneficiary survives the
Participant, the Participant’s account shall be payable to his or her estate.

6

--------------------------------------------------------------------------------

 

SECTION 10
ADMINISTRATION
          10.1 Plan Administrator. The Plan shall be administered by the
Committee. The Committee shall have the authority to control and manage the
operation and administration of the Plan.
          10.2 Actions by Committee. Each decision of a majority of the members
of the Committee then in office shall constitute the final and binding act of
the Committee. The Committee may act with or without a meeting being called or
held and shall keep minutes of all meetings held and a record of all actions
taken by written consent.
          10.3 Powers of Committee. The Committee shall have all powers and
discretion necessary or appropriate to administer the Plan and to control its
operation in accordance with its terms, including, but not by way of limitation,
the following discretionary powers:
     (a) To interpret and determine the meaning and validity of the provisions
of the Plan and the options and to determine any question arising under, or in
connection with, the administration, operation or validity of the Plan or the
options;
     (b) To determine the form and manner for Participants to make elections
under the Plan;
     (c) To determine any and all considerations affecting the eligibility of
any Employee to become a Participant or to remain a Participant in the Plan;
     (d) To cause an account or accounts to be maintained for each Participant
and establish rules for the crediting of contributions and/or shares to the
account(s);
     (e) To determine the time or times when, and the number of shares for
which, options shall be granted;
     (f) To establish and revise an accounting method or formula for the Plan;
     (g) To designate a custodian or broker to receive shares purchased under
the Plan and to determine the manner and form in which shares are to be
delivered to the designated custodian or broker;
     (h) To determine the status and rights of Participants and their
Beneficiaries or estates;
     (i) To employ such brokers, counsel, agents and advisers, and to obtain
such broker, legal, clerical and other services, as it may deem necessary or
appropriate in carrying out the provisions of the Plan;
     (j) To establish, from time to time, rules for the performance of its
powers and duties and for the administration of the Plan;
     (k) To adopt such procedures and subplans as are necessary or appropriate
to permit participation in the Plan by employees who are foreign nationals or
employed outside of the United States; and

7

--------------------------------------------------------------------------------

 

     (l) To delegate to any one or more of its members or to any other person
including, but not limited to, employees of any Employer, severally or jointly,
the authority to perform for and on behalf of the Committee one or more of the
functions of the Committee under the Plan.
          10.4 Decisions of Committee. All actions, interpretations, and
decisions of the Committee shall be made in the sole discretion of the Committee
and shall be conclusive and binding on all persons, and shall be given the
maximum deference permitted by law.
          10.5 Administrative Expenses. All expenses incurred in the
administration of the Plan by the Committee, or otherwise, including legal fees
and expenses, shall be paid and borne by the Employers, except any stamp duties
or transfer taxes applicable to the purchase of shares may be charged to the
account of each Participant. Any brokerage fees for the purchase of shares by a
Participant shall be paid by the Company, but fees and taxes (including
brokerage fees) for the transfer, sale or resale of shares by a Participant, or
the issuance of physical share certificates, shall be borne solely by the
Participant.
          10.6 Eligibility to Participate. No member of the Committee who is
also an employee of an Employer shall be excluded from participating in the Plan
if otherwise eligible, but he or she shall not be entitled, as a member of the
Committee, to act or pass upon any matters pertaining specifically to his or her
own account under the Plan.
          10.7 Indemnification. Each of the Employers shall, and hereby does,
indemnify and hold harmless the members of the Committee and the Board, from and
against any and all losses, claims, damages or liabilities, including attorneys’
fees and amounts paid, with the approval of the Board or the Committee, in
settlement of any claim, arising out of or resulting from the implementation of
a duty, act or decision with respect to the Plan, so long as such duty, act or
decision does not involve gross negligence or willful misconduct on the part of
any such individual.
SECTION 11
AMENDMENT, TERMINATION, AND DURATION
          11.1 Amendment, Suspension, or Termination. The Board or the
Committee, in its sole discretion, may amend, suspend or terminate the Plan, or
any part thereof, at any time and for any reason. If the Plan is amended,
suspended or terminated, the Board or the Committee, in its discretion, may
elect to terminate all outstanding options either immediately or upon completion
of the purchase of shares on the next Purchase Date (which, notwithstanding
Section 2.15, may be sooner than originally scheduled, if determined by the
Board or the Committee in its discretion), or may elect to permit options to
expire in accordance with their terms (and participation to continue through
such expiration dates). If the options are terminated prior to expiration, all
amounts then credited to Participants’ accounts that have not been used to
purchase shares shall be returned to the Participants (without interest thereon,
except as otherwise required under local laws) as soon as administratively
practicable. Except as provided in Section 3.2 and this Section 11 hereof, no
amendment may make any change in any option theretofore granted which adversely
affects the rights of any Participant unless his or her consent is obtained. To
the extent necessary to comply with Section 423 of the Code (or any successor
rule or provision or any other applicable law, regulation or stock exchange
rule), the Company shall obtain stockholder approval of any amendment in such a
manner and to such a degree as required. In addition, an amendment will be
subject to stockholder approval if the Committee or the Board, in their sole
discretion, deems such amendment to be a material amendment, except with respect
to such an amendment which will impact, in the aggregate, no more than five
percent (5%) of the shares reserved for issuance under the Plan. The following
amendments shall be deemed material amendments for purposes of the preceding
sentence (i) material

8

--------------------------------------------------------------------------------

 

increases to the benefits accrued to Participants under the Plan; (ii) increases
to the total number of securities that may be issued under the Plan;
(iii) material modifications to the requirements for participation in the Plan,
and (iv) the addition of a new provision allowing the Board or the Committee to
lapse or waive restrictions at its discretion. The amendment, suspension, or
termination of the Plan shall not, without the consent of the Participant, alter
or impair any rights or obligations under any option theretofore granted to such
Participant. No option may be granted during any period of suspension or after
termination of the Plan. Without stockholder approval and without regard to
whether any Participant rights may be considered to have been “adversely
affected,” the Committee shall be entitled to change the duration of an option,
limit the frequency and/or number of changes in the amount withheld during the
duration of an option, establish the exchange ratio applicable to amounts
withheld in a currency other than U.S. dollars, permit payroll withholding in
excess of the amount designated by a Participant in order to adjust for delays
or mistakes in the Company’s processing of properly completed withholding
elections, establish reasonable waiting and adjustment periods and/or accounting
and crediting procedures to ensure that amounts applied toward the purchase of
Common Stock for each Participant properly correspond with amounts withheld from
the Participant’s Compensation, and establish such other limitations or
procedures as the Committee determines in its sole discretion advisable which
are consistent with the Plan.
     Without regard to whether any Participant’s rights may be considered to
have been “adversely affected”, in the event the Committee determines that the
ongoing operation of the Plan may result in unfavorable financial accounting
consequences, the Committee may, in its discretion and, to the extent necessary
or desirable, modify or amend the Plan to reduce or eliminate such accounting
consequence including, but not limited to:
     (a) Amending the Plan to conform with the safe harbor definition under
Statement of Financial Accounting Standards 123(R), including with respect to an
option issued at the time of the amendment;
     (b) Increasing or otherwise altering the exercise price for any option
including an option issued at the time of the change in exercise price;
     (c) Reducing the maximum percentage of Compensation a Participant may elect
to set aside as payroll deductions;
     (d) Shortening the duration of any option so that the option ends on a new
Purchase Date, including an option issued at the time of the Committee action;
and
     (e) Reducing the number of shares that may be purchased upon exercise of
outstanding options.
Such modifications or amendments shall not require stockholder approval or the
consent of any Participants.
          11.2 Duration of the Plan. The Plan shall commence on the date
specified herein, and subject to Section 11.1 (regarding the Board’s and the
Committee’s right to amend or terminate the Plan), shall remain in effect
thereafter.
SECTION 12
GENERAL PROVISIONS
          12.1 Participation by Subsidiaries. One or more Subsidiaries of the
Company may become participating Employers by adopting the Plan and obtaining
approval for such

9

--------------------------------------------------------------------------------

 

adoption from the Board or the Committee. By adopting the Plan, a Subsidiary
shall be deemed to agree to all of its terms, including, but not limited to, the
provisions granting exclusive authority (a) to the Board and the Committee to
amend the Plan, and (b) to the Committee to administer and interpret the Plan.
An Employer may terminate its participation in the Plan at any time. The
liabilities incurred under the Plan to the Participants employed by each
Employer shall be solely the liabilities of that Employer, and no other Employer
shall be liable for benefits accrued by a Participant during any period when he
or she was not employed by such Employer.
          12.2 Inalienability. In no event may either a Participant, a former
Participant or his or her Beneficiary, spouse or estate sell, transfer,
anticipate, assign, hypothecate, or otherwise dispose of any right or interest
under the Plan; and such rights and interests shall not at any time be subject
to the claims of creditors nor be liable to attachment, execution or other legal
process. Accordingly, for example, a Participant’s interest in the Plan is not
transferable pursuant to a domestic relations order.
          12.3 Severability. In the event any provision of the Plan shall be
held illegal or invalid for any reason, the illegality or invalidity shall not
affect the remaining parts of the Plan, and the Plan shall be construed and
enforced as if the illegal or invalid provision had not been included.
          12.4 Requirements of Law. The granting of options and the issuance of
shares shall be subject to all applicable laws, rules, and regulations, and to
such approvals by any governmental agencies or securities exchanges as the
Committee may determine are necessary or appropriate.
          12.5 Compliance with Rule 16b-3. Any transactions under this Plan with
respect to officers, as defined in Rule 16a-1 promulgated under the 1934 Act,
are intended to comply with all applicable conditions of Rule 16b-3. To the
extent any provision of the Plan or action by the Committee fails to so comply,
it shall be deemed null and void to the extent permitted by law and deemed
advisable by the Committee. Notwithstanding any contrary provision of the Plan,
if the Committee specifically determines that compliance with Rule 16b-3 no
longer is required, all references in the Plan to Rule 16b-3 shall be null and
void.
          12.6 No Enlargement of Employment Rights. Neither the establishment or
maintenance of the Plan, the granting of options, the purchase of shares, nor
any action of any Employer or the Committee, shall be held or construed to
confer upon any individual any right to be continued as an employee of the
Employer nor, upon dismissal, any right or interest in any specific assets of
the Employers other than as provided in the Plan. Each Employer expressly
reserves the right to discharge any employee at any time, with or without cause.
          12.7 Apportionment of Costs and Duties. All acts required of the
Employers under the Plan may be performed by the Company for itself and its
Subsidiaries, and the costs of the Plan may be equitably apportioned by the
Committee among the Company and the other Employers. Whenever an Employer is
permitted or required under the terms of the Plan to do or perform any act,
matter or thing, it shall be done and performed by any officer or employee of
the Employers who is thereunto duly authorized by the Employers.
          12.8 Construction and Applicable Law. The Plan is intended to qualify
as an “employee stock purchase plan” within the meaning of Section 423(b) of the
Code. Any provision of the Plan which is inconsistent with Section 423(b) of the
Code shall, without further act or amendment by the Company or the Committee, be
reformed to comply with the requirements of Section 423(b). The provisions of
the Plan shall be construed, administered and enforced in accordance with such
Section and with the laws of the State of California, excluding California’s
conflict of laws provisions.

10

--------------------------------------------------------------------------------

 

          12.9 Captions. The captions contained in and the table of contents
prefixed to the Plan are inserted only as a matter of convenience, and in no way
define, limit, enlarge or describe the scope or intent of the Plan nor in any
way shall affect the construction of any provision of the Plan.
          12.10 Automatic Transfer to Low Price Option Period. To the extent
permitted by applicable laws, if the fair market value of the Common Stock on
any Enrollment Date is higher than the fair market value of the Common Stock on
the first day of any later Purchase Period during the same option period, then
all Participants in such option period shall be automatically withdrawn from
such option period and automatically re-enrolled in the immediately following
new option period.

11