EXHIBIT 10.11

 

ADOBE SYSTEMS INCORPORATED

NONSTATUTORY STOCK OPTION AGREEMENT

(STANDARD)

 

                THIS NONSTATUTORY STOCK OPTION AGREEMENT (the “Option
Agreement”) is made and entered into as of the Date of Option Grant by and
between Adobe Systems Incorporated and

 

                                                                                               
(the “Participant”).  The Company has granted to the Participant pursuant to the
Adobe Systems Incorporated 2003 Equity Incentive Plan (the “Plan”) an option to
purchase certain shares of Stock (the “Option”), upon the terms and conditions
set forth in this Option Agreement, but subject in any event to the Superseding
Agreement, if any, described below.

 

1.             DEFINITIONS AND CONSTRUCTION.

1.1           DEFINITIONS.  WHENEVER USED HEREIN, THE FOLLOWING TERMS SHALL HAVE
THEIR RESPECTIVE MEANINGS SET FORTH BELOW:

(A)           “DATE OF OPTION GRANT” MEANS

(B)           “NUMBER OF OPTION SHARES” MEANS                                
 SHARES OF STOCK, AS ADJUSTED FROM TIME TO TIME PURSUANT TO SECTION 10.

(C)           “EXERCISE PRICE” MEANS $                                 PER SHARE
OF STOCK, AS ADJUSTED FROM TIME TO TIME PURSUANT TO SECTION 10.

(D)           “INITIAL VESTING DATE” MEANS THE DATE OCCURRING ONE (1) YEAR AFTER
THE DATE OF OPTION GRANT.

(E)           “VESTED SHARES” MEANS, ON ANY RELEVANT DATE, THAT PORTION
(DISREGARDING ANY FRACTIONAL SHARE) OF THE NUMBER OF OPTION SHARES DETERMINED BY
MULTIPLYING THE NUMBER OF OPTION SHARES BY THE “VESTED PERCENTAGE” DETERMINED AS
OF SUCH DATE AS FOLLOWS:

 

 

 

Vested Percentage

 

 

 

Prior to Initial Vesting Date

 

0

 

 

 

On Initial Vesting Date, provided the Participant’s Service has not terminated
prior to such date

 

25%

 

 

 

Plus:

 

 

 

 

 

For each of the next 12 full months of the Participant’s continuous Service from
the Initial Vesting Date

 

2.08%

 

 

 

Plus:

 

 

 

 

 

For each of the next 12 full months of the Participant’s continuous Service from
the Initial Vesting Date until the Vested Percentage equals 100%

 

4.17%

 

(F)            “AFFILIATE” MEANS (I) AN ENTITY, OTHER THAN A PARENT CORPORATION,
THAT DIRECTLY, OR INDIRECTLY THROUGH ONE OR MORE INTERMEDIARY ENTITIES, CONTROLS
THE COMPANY OR (II) AN ENTITY, OTHER THAN A SUBSIDIARY CORPORATION, THAT IS
CONTROLLED BY THE COMPANY DIRECTLY, OR INDIRECTLY THROUGH ONE OR MORE
INTERMEDIARY ENTITIES.  FOR THIS PURPOSE, THE TERM “CONTROL” (INCLUDING THE TERM
“CONTROLLED BY”) MEANS THE POSSESSION, DIRECT OR INDIRECT, OF THE

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POWER TO DIRECT OR CAUSE THE DIRECTION OF THE MANAGEMENT AND POLICIES OF THE
RELEVANT ENTITY, WHETHER THROUGH THE OWNERSHIP OF VOTING SECURITIES, BY CONTRACT
OR OTHERWISE; OR SHALL HAVE SUCH OTHER MEANING ASSIGNED SUCH TERM FOR THE
PURPOSES OF REGISTRATION IN THE UNITED STATES (“U.S.”) ON FORM S-8 UNDER THE
SECURITIES ACT.

(G)           “BOARD” MEANS THE BOARD OF DIRECTORS OF THE COMPANY.

(H)           “CODE” MEANS THE U.S. INTERNAL REVENUE CODE OF 1986, AS AMENDED,
AND ANY APPLICABLE REGULATIONS PROMULGATED THEREUNDER.

(I)            “COMMITTEE” MEANS THE EXECUTIVE COMPENSATION COMMITTEE OR OTHER
COMMITTEE OF THE BOARD DULY APPOINTED TO ADMINISTER THE PLAN AND HAVING SUCH
POWERS AS SHALL BE SPECIFIED BY THE BOARD.  IF NO COMMITTEE OF THE BOARD HAS
BEEN APPOINTED TO ADMINISTER THE PLAN, THE BOARD SHALL EXERCISE ALL OF THE
POWERS OF THE COMMITTEE GRANTED HEREIN, AND, IN ANY EVENT, THE BOARD MAY IN ITS
DISCRETION EXERCISE ANY OR ALL OF SUCH POWERS.

(J)            “COMPANY” MEANS ADOBE SYSTEMS INCORPORATED, A DELAWARE
CORPORATION, OR ANY SUCCESSOR CORPORATION THERETO.

(K)           “CONSULTANT” MEANS A PERSON ENGAGED TO PROVIDE CONSULTING OR
ADVISORY SERVICES (OTHER THAN AS AN EMPLOYEE OR A MEMBER OF THE BOARD) TO A
PARTICIPATING COMPANY, PROVIDED THAT THE IDENTITY OF SUCH PERSON, THE NATURE OF
SUCH SERVICES OR THE ENTITY TO WHICH SUCH SERVICES ARE PROVIDED WOULD NOT
PRECLUDE THE COMPANY FROM OFFERING OR SELLING SECURITIES TO SUCH PERSON PURSUANT
TO THE PLAN IN RELIANCE ON REGISTRATION ON A FORM S-8 REGISTRATION STATEMENT
UNDER THE SECURITIES ACT.

(L)            “DISABILITY” MEANS THE PERMANENT AND TOTAL DISABILITY OF THE
PARTICIPANT WITHIN THE MEANING OF SECTION 22(E)(3) OF THE CODE.

(M)          “EMPLOYEE” MEANS ANY PERSON TREATED AS AN EMPLOYEE (INCLUDING AN
OFFICER OR A MEMBER OF THE BOARD WHO IS ALSO TREATED AS AN EMPLOYEE) IN THE
RECORDS OF A PARTICIPATING COMPANY; PROVIDED, HOWEVER, THAT NEITHER SERVICE AS A
MEMBER OF THE BOARD NOR PAYMENT OF A DIRECTOR’S FEE SHALL BE SUFFICIENT TO
CONSTITUTE EMPLOYMENT.

(N)           “EXCHANGE ACT” MEANS THE U.S. SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

(O)           “FAIR MARKET VALUE” MEANS, AS OF ANY DATE, THE VALUE OF A SHARE OF
STOCK OR OTHER PROPERTY AS DETERMINED BY THE COMMITTEE, IN ITS DISCRETION, OR BY
THE COMPANY, IN ITS DISCRETION, IF SUCH DETERMINATION IS EXPRESSLY ALLOCATED TO
THE COMPANY HEREIN, SUBJECT TO THE FOLLOWING:

(I)            IF, ON SUCH DATE, THE STOCK IS LISTED ON A NATIONAL OR REGIONAL
SECURITIES EXCHANGE OR MARKET SYSTEM, THE FAIR MARKET VALUE OF A SHARE OF STOCK
SHALL BE THE CLOSING PRICE OF A SHARE OF STOCK (OR THE MEAN OF THE CLOSING BID
AND ASKED PRICES OF A SHARE OF STOCK IF THE STOCK IS SO QUOTED INSTEAD) AS
QUOTED ON THE NASDAQ NATIONAL MARKET, THE NASDAQ SMALLCAP MARKET OR SUCH OTHER
NATIONAL OR REGIONAL SECURITIES EXCHANGE OR MARKET SYSTEM CONSTITUTING THE
PRIMARY MARKET FOR THE STOCK, AS REPORTED ON WWW.NASDAQ.COM OR SUCH OTHER SOURCE
AS THE COMPANY DEEMS RELIABLE.  IF THE RELEVANT DATE DOES NOT FALL ON A DAY ON
WHICH THE STOCK HAS TRADED ON SUCH SECURITIES EXCHANGE OR MARKET SYSTEM, THE
DATE ON WHICH THE FAIR MARKET VALUE SHALL BE ESTABLISHED SHALL BE THE LAST DAY
ON WHICH THE STOCK WAS SO TRADED PRIOR TO THE RELEVANT DATE, OR SUCH OTHER
APPROPRIATE DAY AS SHALL BE DETERMINED BY THE COMMITTEE, IN ITS DISCRETION.

IF, ON SUCH DATE, THE STOCK IS NOT LISTED ON A NATIONAL OR REGIONAL SECURITIES
EXCHANGE OR MARKET SYSTEM, THE FAIR MARKET VALUE OF A SHARE OF STOCK SHALL BE AS
DETERMINED BY THE COMMITTEE IN GOOD FAITH WITHOUT REGARD TO ANY RESTRICTION
OTHER THAN A RESTRICTION WHICH, BY ITS TERMS, WILL NEVER LAPSE.

(P)           “OFFICER” MEANS ANY PERSON DESIGNATED BY THE BOARD AS AN OFFICER
OF THE COMPANY.

(Q)           “OPTION EXPIRATION DATE” MEANS THE DATE SEVEN (7) YEARS AFTER THE
DATE OF OPTION GRANT.

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(R)            “PARENT CORPORATION” MEANS ANY PRESENT OR FUTURE “PARENT
CORPORATION” OF THE COMPANY, AS DEFINED IN SECTION 424(E) OF THE CODE.

(S)           “PARTICIPATING COMPANY” MEANS THE COMPANY OR ANY PARENT
CORPORATION, SUBSIDIARY CORPORATION OR AFFILIATE.

(T)            “PARTICIPATING COMPANY GROUP” MEANS, AT ANY POINT IN TIME, ALL
CORPORATIONS COLLECTIVELY WHICH ARE THEN PARTICIPATING COMPANIES.

(U)           “SECURITIES ACT” MEANS THE U.S. SECURITIES ACT OF 1933, AS
AMENDED.

(V)           “SERVICE” MEANS THE PARTICIPANT’S EMPLOYMENT OR SERVICE WITH THE
PARTICIPATING COMPANY GROUP AS AN EMPLOYEE OR A CONSULTANT, WHICHEVER SUCH
CAPACITY THE PARTICIPANT HELD ON THE DATE OF OPTION GRANT OR, IF LATER, THE DATE
ON WHICH THE PARTICIPANT COMMENCED SERVICE.  THE PARTICIPANT’S SERVICE SHALL BE
DEEMED TO HAVE TERMINATED IF THE PARTICIPANT CEASES TO RENDER SERVICE TO THE
PARTICIPATING COMPANY GROUP IN SUCH INITIAL CAPACITY.  HOWEVER, THE
PARTICIPANT’S SERVICE SHALL NOT BE DEEMED TO HAVE TERMINATED MERELY BECAUSE OF A
CHANGE IN THE PARTICIPATING COMPANY FOR WHICH THE PARTICIPANT RENDERS SERVICE IN
SUCH INITIAL CAPACITY, PROVIDED THAT THERE IS NO INTERRUPTION OR TERMINATION OF
THE PARTICIPANT’S SERVICE.  FURTHERMORE, THE PARTICIPANT’S SERVICE WITH THE
PARTICIPATING COMPANY GROUP SHALL NOT BE DEEMED TO HAVE TERMINATED IF THE
PARTICIPANT TAKES ANY BONA FIDE LEAVE OF ABSENCE APPROVED BY THE COMPANY OF
NINETY (90) DAYS OR LESS.  IN THE EVENT OF A LEAVE IN EXCESS OF NINETY (90)
DAYS, THE PARTICIPANT’S SERVICE SHALL BE DEEMED TO TERMINATE ON THE NINETY-FIRST
(91ST) DAY OF THE LEAVE UNLESS THE PARTICIPANT’S RIGHT TO RETURN TO SERVICE WITH
THE PARTICIPATING COMPANY GROUP IS GUARANTEED BY STATUTE OR CONTRACT. 
NOTWITHSTANDING THE FOREGOING, UNLESS OTHERWISE DESIGNATED BY THE COMPANY OR
REQUIRED BY LAW, A LEAVE OF ABSENCE SHALL NOT BE TREATED AS SERVICE FOR PURPOSES
OF DETERMINING VESTING UNDER THE PARTICIPANT’S OPTION AGREEMENT.  THE
PARTICIPANT’S SERVICE SHALL BE DEEMED TO HAVE TERMINATED EITHER UPON AN ACTUAL
TERMINATION OF SERVICE OR UPON THE CORPORATION FOR WHICH THE PARTICIPANT
PERFORMS SERVICE CEASING TO BE A PARTICIPATING COMPANY.  SUBJECT TO THE
FOREGOING, THE COMPANY, IN ITS DISCRETION, SHALL DETERMINE WHETHER THE
PARTICIPANT’S SERVICE HAS TERMINATED AND THE EFFECTIVE DATE OF SUCH TERMINATION.

(W)          “STOCK” MEANS THE COMMON STOCK OF THE COMPANY, AS ADJUSTED FROM
TIME TO TIME IN ACCORDANCE WITH SECTION 10.

(X)            “SUBSIDIARY CORPORATION” MEANS ANY PRESENT OR FUTURE “SUBSIDIARY
CORPORATION” OF THE COMPANY, AS DEFINED IN SECTION 424(F) OF THE CODE.

(Y)           “SUPERSEDING AGREEMENT” MEANS THE ADOBE SYSTEMS INCORPORATED
EXECUTIVE SEVERANCE PLAN IN THE EVENT OF A CHANGE IN CONTROL OR ANY SUCCESSOR
PLAN OR AGREEMENT IN WHICH THE PARTICIPANT IS A PARTICIPANT OR TO WHICH THE
PARTICIPANT IS A PARTY (IN EACH SUCH INSTANCE, THE “SEVERANCE PLAN”), OR ANY
AGREEMENT TO WHICH THE PARTICIPANT IS A PARTY WHICH, BY ITS EXISTENCE ALONE,
PREVENTS THE PARTICIPANT FROM BEING ELIGIBLE TO PARTICIPATE IN THE SEVERANCE
PLAN.  THE TERMS AND CONDITIONS OF ANY SUCH SUPERSEDING AGREEMENT SHALL,
NOTWITHSTANDING ANY PROVISION OF THIS OPTION AGREEMENT TO THE CONTRARY,
SUPERSEDE ANY INCONSISTENT TERM OR CONDITION SET FORTH IN THIS OPTION AGREEMENT
TO THE EXTENT INTENDED BY SUCH SUPERSEDING AGREEMENT.

1.2           CONSTRUCTION.  CAPTIONS AND TITLES CONTAINED HEREIN ARE FOR
CONVENIENCE ONLY AND SHALL NOT AFFECT THE MEANING OR INTERPRETATION OF ANY
PROVISION OF THIS OPTION AGREEMENT.  EXCEPT WHEN OTHERWISE INDICATED BY THE
CONTEXT, THE SINGULAR SHALL INCLUDE THE PLURAL AND THE PLURAL SHALL INCLUDE THE
SINGULAR.  USE OF THE TERM “OR” IS NOT INTENDED TO BE EXCLUSIVE, UNLESS THE
CONTEXT CLEARLY REQUIRES OTHERWISE.

2.             TAX STATUS OF OPTION.

                                This Option is intended to be a nonstatutory
stock option and shall not be treated as an incentive stock option within the
meaning of Section 422(b) of the Code.

 

3.             ADMINISTRATION.

                                All questions of interpretation concerning this
Option Agreement shall be determined by the Committee.  All determinations by
the Committee shall be final and binding upon all persons having an interest in

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the Option.  Any Officer shall have the authority to act on behalf of the
Company with respect to any matter, right, obligation, or election which is the
responsibility of or which is allocated to the Company herein, provided the
Officer has apparent authority with respect to such matter, right, obligation,
or election.

 

4.             EXERCISE OF THE OPTION.

4.1           RIGHT TO EXERCISE.  EXCEPT AS OTHERWISE PROVIDED HEREIN, THE
OPTION SHALL BE EXERCISABLE ON AND AFTER THE INITIAL VESTING DATE AND PRIOR TO
THE TERMINATION OF THE OPTION (AS PROVIDED IN SECTION 7) IN AN AMOUNT NOT TO
EXCEED THE NUMBER OF VESTED SHARES LESS THE NUMBER OF SHARES PREVIOUSLY ACQUIRED
UPON EXERCISE OF THE OPTION.  IN NO EVENT SHALL THE OPTION BE EXERCISABLE FOR
MORE SHARES THAN THE NUMBER OF OPTION SHARES.

4.2           METHOD OF EXERCISE.  EXERCISE OF THE OPTION SHALL BE BY MEANS OF
ELECTRONIC NOTICE IN A FORM AUTHORIZED BY THE COMPANY, WHICH SHALL BE DIGITALLY
SIGNED OR AUTHENTICATED BY THE PARTICIPANT IN SUCH MANNER AS REQUIRED BY THE
NOTICE AND TRANSMITTED TO THE EQUITY COMPENSATION DEPARTMENT OF THE COMPANY OR
OTHER AUTHORIZED REPRESENTATIVE OF THE COMPANY (INCLUDING A THIRD-PARTY
ADMINISTRATOR DESIGNATED BY THE COMPANY).  IN THE EVENT THAT THE PARTICIPANT IS
NOT AUTHORIZED OR IS UNABLE TO PROVIDE ELECTRONIC NOTICE OF EXERCISE, THE OPTION
SHALL BE EXERCISED BY WRITTEN NOTICE TO THE COMPANY, WHICH SHALL BE SIGNED BY
THE PARTICIPANT AND DELIVERED IN PERSON, BY CERTIFIED OR REGISTERED MAIL, RETURN
RECEIPT REQUESTED, BY CONFIRMED FACSIMILE TRANSMISSION, OR BY SUCH OTHER MEANS
AS THE COMPANY MAY PERMIT, TO THE EQUITY COMPENSATION DEPARTMENT OF THE COMPANY,
OR OTHER AUTHORIZED REPRESENTATIVE OF THE COMPANY (INCLUDING A THIRD-PARTY
ADMINISTRATOR DESIGNATED BY THE COMPANY).  EACH SUCH NOTICE, WHETHER ELECTRONIC
OR WRITTEN, MUST STATE THE PARTICIPANT’S ELECTION TO EXERCISE THE OPTION, THE
NUMBER OF WHOLE SHARES OF STOCK FOR WHICH THE OPTION IS BEING EXERCISED AND SUCH
OTHER REPRESENTATIONS AND AGREEMENTS AS TO THE PARTICIPANT’S INVESTMENT INTENT
WITH RESPECT TO SUCH SHARES AS MAY BE REQUIRED PURSUANT TO THE PROVISIONS OF
THIS OPTION AGREEMENT.  FURTHER, EACH SUCH NOTICE MUST BE RECEIVED BY THE
COMPANY PRIOR TO THE TERMINATION OF THE OPTION AS SET FORTH IN SECTION 7 AND
MUST BE ACCOMPANIED BY FULL PAYMENT OF THE AGGREGATE EXERCISE PRICE FOR THE
NUMBER OF SHARES OF STOCK BEING PURCHASED.  THE OPTION SHALL BE DEEMED TO BE
EXERCISED UPON RECEIPT BY THE COMPANY OF SUCH ELECTRONIC OR WRITTEN NOTICE AND
THE AGGREGATE EXERCISE PRICE.

4.3           PAYMENT OF EXERCISE PRICE.

(A)           FORMS OF CONSIDERATION AUTHORIZED.  EXCEPT AS OTHERWISE PROVIDED
BELOW, PAYMENT OF THE AGGREGATE EXERCISE PRICE FOR THE NUMBER OF SHARES OF STOCK
FOR WHICH THE OPTION IS BEING EXERCISED SHALL BE MADE (I) IN CASH, BY CHECK OR
BY CASH EQUIVALENT OR (II) BY MEANS OF A CASHLESS EXERCISE, AS DEFINED IN
SECTION 4.3(B).

(B)           CASHLESS EXERCISE.  A “CASHLESS EXERCISE” MEANS THE DELIVERY OF A
PROPERLY EXECUTED NOTICE OF EXERCISE TOGETHER WITH IRREVOCABLE INSTRUCTIONS TO A
BROKER IN A FORM ACCEPTABLE TO THE COMPANY PROVIDING FOR THE ASSIGNMENT TO THE
COMPANY OF THE PROCEEDS OF A SALE OR LOAN WITH RESPECT TO SOME OR ALL OF THE
SHARES BEING ACQUIRED UPON THE EXERCISE OF THE OPTION PURSUANT TO A PROGRAM OR
PROCEDURE APPROVED BY THE COMPANY (INCLUDING, WITHOUT LIMITATION, THROUGH AN
EXERCISE COMPLYING WITH THE PROVISIONS OF REGULATION T AS PROMULGATED FROM TIME
TO TIME BY THE BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM).  THE COMPANY
RESERVES, AT ANY AND ALL TIMES, THE RIGHT, IN THE COMPANY’S SOLE AND ABSOLUTE
DISCRETION, TO ESTABLISH, DECLINE TO APPROVE OR TERMINATE ANY SUCH PROGRAM OR
PROCEDURE, INCLUDING WITH RESPECT TO THE PARTICIPANT NOTWITHSTANDING THAT SUCH
PROGRAM OR PROCEDURES MAY BE AVAILABLE TO OTHERS.

4.4           TAX WITHHOLDING.  REGARDLESS OF ANY ACTION TAKEN BY THE
PARTICIPATING COMPANY GROUP WITH RESPECT TO ANY OR ALL INCOME TAX, SOCIAL
INSURANCE, PAYROLL TAX, PAYMENT ON ACCOUNT OR OTHER TAX-RELATED WITHHOLDING
(“TAX-RELATED ITEMS”), THE PARTICIPANT ACKNOWLEDGES THAT THE ULTIMATE LIABILITY
FOR ALL TAX-RELATED ITEMS LEGALLY DUE BY THE PARTICIPANT IS AND REMAINS THE
PARTICIPANT’S RESPONSIBILITY AND THAT THE PARTICIPATING COMPANY GROUP (I) MAKES
NO REPRESENTATIONS OR UNDERTAKINGS REGARDING THE TREATMENT OF ANY TAX-RELATED
ITEMS IN CONNECTION WITH ANY ASPECT OF THE OPTION, INCLUDING THE GRANT, VESTING
OR EXERCISE OF THE OPTION, THE SUBSEQUENT SALE OF SHARES ACQUIRED PURSUANT TO
SUCH EXERCISE, OR THE RECEIPT OF ANY DIVIDENDS AND (II) DOES NOT COMMIT TO
STRUCTURE THE TERMS OF THE GRANT OR ANY OTHER ASPECT OF THE OPTION TO REDUCE OR
ELIMINATE THE PARTICIPANT’S LIABILITY FOR TAX-RELATED ITEMS.  AT THE TIME OF
EXERCISE OF THE OPTION, THE PARTICIPANT SHALL PAY OR MAKE ADEQUATE ARRANGEMENTS
SATISFACTORY TO THE PARTICIPATING COMPANY GROUP TO SATISFY ALL WITHHOLDING
OBLIGATIONS OF THE PARTICIPATING COMPANY GROUP.  IN THIS REGARD, AT THE TIME THE
OPTION IS EXERCISED, IN WHOLE OR IN PART, OR AT ANY TIME THEREAFTER AS REQUESTED
BY THE COMPANY, THE PARTICIPANT HEREBY AUTHORIZES WITHHOLDING OF ALL APPLICABLE
TAX-RELATED ITEMS FROM PAYROLL AND ANY

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OTHER AMOUNTS PAYABLE TO THE PARTICIPANT, AND OTHERWISE AGREES TO MAKE ADEQUATE
PROVISION FOR WITHHOLDING OF ALL APPLICABLE TAX RELATED ITEMS BY THE
PARTICIPATING COMPANY GROUP, IF ANY, WHICH ARISE IN CONNECTION WITH THE OPTION. 
ALTERNATIVELY, OR IN ADDITION, IF PERMISSIBLE UNDER APPLICABLE LAW, THE
PARTICIPATING COMPANY GROUP MAY (I) SELL OR ARRANGE FOR THE SALE OF SHARES
ACQUIRED BY THE PARTICIPANT TO MEET THE WITHHOLDING OBLIGATION OF TAX-RELATED
ITEMS AND/OR (II) WITHHOLD IN SHARES, PROVIDED THAT ONLY THE AMOUNT OF SHARES
NECESSARY TO SATISFY THE MINIMUM WITHHOLDING AMOUNT ARE WITHHELD.  FINALLY, THE
PARTICIPANT SHALL PAY TO THE PARTICIPATING COMPANY GROUP ANY AMOUNT OF THE
TAX-RELATED ITEMS THAT THE PARTICIPATING COMPANY GROUP MAY BE REQUIRED TO
WITHHOLD AS A RESULT OF THE PARTICIPANT’S PARTICIPATION IN THE PLAN THAT CANNOT
BE SATISFIED BY THE MEANS PREVIOUSLY DESCRIBED.  THE COMPANY SHALL HAVE NO
OBLIGATION TO PROCESS THE EXERCISE OF THE OPTION OR TO DELIVER SHARES OF STOCK
UNTIL THE OBLIGATIONS IN CONNECTION WITH THE TAX-RELATED ITEMS AS DESCRIBED IN
THIS SECTION HAVE BEEN SATISFIED BY THE PARTICIPANT.

4.5           BENEFICIAL OWNERSHIP OF SHARES; CERTIFICATE REGISTRATION.  THE
PARTICIPANT HEREBY AUTHORIZES THE COMPANY, IN ITS SOLE DISCRETION, TO DEPOSIT
FOR THE BENEFIT OF THE PARTICIPANT WITH ANY BROKER WITH WHICH THE PARTICIPANT
HAS AN ACCOUNT RELATIONSHIP OF WHICH THE COMPANY HAS NOTICE ANY OR ALL SHARES
ACQUIRED BY THE PARTICIPANT PURSUANT TO THE EXERCISE OF THE OPTION.  EXCEPT AS
PROVIDED BY THE PRECEDING SENTENCE, A CERTIFICATE FOR THE SHARES AS TO WHICH THE
OPTION IS EXERCISED SHALL BE REGISTERED IN THE NAME OF THE PARTICIPANT, OR, IF
APPLICABLE, IN THE NAMES OF THE HEIRS OF THE PARTICIPANT.

4.6           RESTRICTIONS ON GRANT OF THE OPTION AND ISSUANCE OF SHARES.  THE
GRANT OF THE OPTION AND THE ISSUANCE OF SHARES OF STOCK UPON EXERCISE OF THE
OPTION SHALL BE SUBJECT TO COMPLIANCE WITH ALL APPLICABLE REQUIREMENTS OF
FEDERAL, STATE OR FOREIGN LAW WITH RESPECT TO SUCH SECURITIES.  THE OPTION MAY
NOT BE EXERCISED IF THE ISSUANCE OF SHARES OF STOCK UPON EXERCISE WOULD
CONSTITUTE A VIOLATION OF ANY APPLICABLE FEDERAL, STATE OR FOREIGN SECURITIES
LAWS OR OTHER LAW OR REGULATIONS OR THE REQUIREMENTS OF ANY STOCK EXCHANGE OR
MARKET SYSTEM UPON WHICH THE STOCK MAY THEN BE LISTED.  IN ADDITION, THE OPTION
MAY NOT BE EXERCISED UNLESS (I) A REGISTRATION STATEMENT UNDER THE SECURITIES
ACT SHALL AT THE TIME OF EXERCISE OF THE OPTION BE IN EFFECT WITH RESPECT TO THE
SHARES ISSUABLE UPON EXERCISE OF THE OPTION OR (II) IN THE OPINION OF LEGAL
COUNSEL TO THE COMPANY, THE SHARES ISSUABLE UPON EXERCISE OF THE OPTION MAY BE
ISSUED IN ACCORDANCE WITH THE TERMS OF AN APPLICABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.  THE PARTICIPANT IS CAUTIONED
THAT THE OPTION MAY NOT BE EXERCISED UNLESS THE FOREGOING CONDITIONS ARE
SATISFIED.  ACCORDINGLY, THE PARTICIPANT MAY NOT BE ABLE TO EXERCISE THE OPTION
WHEN DESIRED EVEN THOUGH THE OPTION IS VESTED.  THE INABILITY OF THE COMPANY TO
OBTAIN FROM ANY REGULATORY BODY HAVING JURISDICTION THE AUTHORITY, IF ANY,
DEEMED BY THE COMPANY’S LEGAL COUNSEL TO BE NECESSARY TO THE LAWFUL ISSUANCE AND
SALE OF ANY SHARES SUBJECT TO THE OPTION SHALL RELIEVE THE COMPANY OF ANY
LIABILITY IN RESPECT OF THE FAILURE TO ISSUE OR SELL SUCH SHARES AS TO WHICH
SUCH REQUISITE AUTHORITY SHALL NOT HAVE BEEN OBTAINED.  AS A CONDITION TO THE
EXERCISE OF THE OPTION, THE COMPANY MAY REQUIRE THE PARTICIPANT TO SATISFY ANY
QUALIFICATIONS THAT MAY BE NECESSARY OR APPROPRIATE, TO EVIDENCE COMPLIANCE WITH
ANY APPLICABLE LAW OR REGULATION AND TO MAKE ANY REPRESENTATION OR WARRANTY WITH
RESPECT THERETO AS MAY BE REQUESTED BY THE COMPANY.

4.7           FRACTIONAL SHARES.  THE COMPANY SHALL NOT BE REQUIRED TO ISSUE
FRACTIONAL SHARES UPON THE EXERCISE OF THE OPTION.

5.             NONTRANSFERABILITY OF THE OPTION.

                                The Option may be exercised during the lifetime
of the Participant only by the Participant or the Participant’s guardian or
legal representative and may not be assigned or transferred in any manner except
by will or by the laws of descent and distribution.  Following the death of the
Participant, the Option, to the extent provided in Section 8, may be exercised
by the Participant’s legal representative or by any person empowered to do so
under the deceased Participant’s will or under the then applicable laws of
descent and distribution.

 

6.             NATURE OF OPTION.

                                In accepting the Option, the Participant
acknowledges that:

 

6.1           THE PLAN IS ESTABLISHED VOLUNTARILY BY THE COMPANY; IT IS
DISCRETIONARY IN NATURE AND IT MAY BE MODIFIED, AMENDED, SUSPENDED OR TERMINATED
BY THE COMPANY AT ANY TIME, UNLESS OTHERWISE PROVIDED IN THE PLAN AND THIS
OPTION AGREEMENT;

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6.2           THE GRANT OF THE OPTION IS VOLUNTARY AND OCCASIONAL AND DOES NOT
CREATE ANY CONTRACTUAL OR OTHER RIGHT TO RECEIVE FUTURE GRANTS OF OPTIONS, OR
BENEFITS IN LIEU OF OPTIONS, EVEN IF OPTIONS HAVE BEEN GRANTED REPEATEDLY IN THE
PAST;

6.3           ALL DECISIONS WITH RESPECT TO FUTURE OPTION GRANTS, IF ANY, WILL
BE AT THE SOLE DISCRETION OF THE COMPANY;

6.4           THE PARTICIPANT’S PARTICIPATION IN THE PLAN SHALL NOT CREATE A
RIGHT TO FURTHER EMPLOYMENT WITH THE PARTICIPATING COMPANY GROUP AND SHALL NOT
INTERFERE WITH ANY ABILITY OF THE PARTICIPATING COMPANY GROUP TO TERMINATE THE
PARTICIPANT’S EMPLOYMENT RELATIONSHIP AT ANY TIME WITH OR WITHOUT CAUSE;

6.5           THE PARTICIPANT IS VOLUNTARILY PARTICIPATING IN THE PLAN;

6.6           THE OPTION IS NOT PART OF NORMAL OR EXPECTED COMPENSATION OR
SALARY FOR ANY PURPOSE, INCLUDING, BUT NOT LIMITED TO, CALCULATING ANY
SEVERANCE, RESIGNATION, TERMINATION, REDUNDANCY, END-OF-SERVICE PAYMENTS,
BONUSES, LONG-SERVICE AWARDS, PENSION OR RETIREMENT BENEFITS OR SIMILAR
PAYMENTS;

6.7           IN THE EVENT THAT THE PARTICIPANT IS NOT AN EMPLOYEE OF THE
COMPANY, THE OPTION GRANT WILL NOT BE INTERPRETED TO FORM AN EMPLOYMENT CONTRACT
OR RELATIONSHIP WITH THE COMPANY; AND FURTHERMORE, THE OPTION GRANT WILL NOT BE
INTERPRETED TO FORM AN EMPLOYMENT CONTRACT WITH THE OTHER MEMBERS OF THE
PARTICIPATING COMPANY GROUP;

6.8           THE FUTURE VALUE OF THE UNDERLYING SHARES IS UNKNOWN AND CANNOT BE
PREDICTED WITH CERTAINTY;

6.9           IF THE UNDERLYING SHARES DO NOT INCREASE IN VALUE, THE OPTION WILL
HAVE NO VALUE;

6.10         IF THE PARTICIPANT EXERCISES THE OPTION AND OBTAINS SHARES, THE
VALUE OF THOSE SHARES ACQUIRED UPON EXERCISE MAY INCREASE OR DECREASE IN VALUE,
EVEN BELOW THE OPTION PRICE; AND

6.11         NO CLAIM OR ENTITLEMENT TO COMPENSATION OR DAMAGES ARISES FROM
TERMINATION OF THE OPTION OR DIMINUTION IN VALUE OF THE OPTION OR SHARES
PURCHASED THROUGH EXERCISE OF THE OPTION RESULTING FROM TERMINATION OF THE
PARTICIPANT’S SERVICE WITH THE PARTICIPATING COMPANY GROUP (FOR ANY REASON
WHETHER OR NOT IN BREACH OF APPLICABLE LABOR LAWS) AND THE PARTICIPANT
IRREVOCABLY RELEASES THE PARTICIPATING COMPANY GROUP FROM ANY SUCH CLAIM THAT
MAY ARISE.  IF, NOTWITHSTANDING THE FOREGOING, ANY SUCH CLAIM IS FOUND BY A
COURT OF COMPETENT JURISDICTION TO HAVE ARISEN THEN, BY SIGNING THIS OPTION
AGREEMENT, YOU SHALL BE DEEMED IRREVOCABLY TO HAVE WAIVED YOUR ENTITLEMENT TO
PURSUE SUCH A CLAIM.

7.             TERMINATION OF THE OPTION.

                                The Option shall terminate and may no longer be
exercised after the first to occur of (a) the Option Expiration Date, (b) the
last date for exercising the Option following termination of the Participant’s
Service as described in Section 8, or (c) a Change in Control to the extent
provided in Section 9.

 

8.             EFFECT OF TERMINATION OF SERVICE.

8.1           OPTION EXERCISABILITY.

(A)           NORMAL RETIREMENT.  IF THE PARTICIPANT’S SERVICE TERMINATES AT OR
AFTER THE NORMAL RETIREMENT AGE SIXTY-FIVE (65) YEARS (“NORMAL RETIREMENT”),
THEN (I) THE OPTION, TO THE EXTENT UNEXERCISED AND EXERCISABLE ON THE DATE ON
WHICH THE PARTICIPANT’S SERVICE TERMINATED, MAY BE EXERCISED BY THE PARTICIPANT
AT ANY TIME PRIOR TO THE EXPIRATION OF TWELVE (12) MONTHS AFTER THE DATE ON
WHICH THE PARTICIPANT’S SERVICE TERMINATED, BUT IN ANY EVENT NO LATER THAN THE
OPTION EXPIRATION DATE, AND (II) SOLELY FOR THE PURPOSE OF COMPUTING THE VESTED
PERCENTAGE, THE PARTICIPANT WILL BE GIVEN CREDIT FOR AN ADDITIONAL TWELVE (12)
MONTHS OF CONTINUOUS SERVICE; PROVIDED, HOWEVER, THAT IN NO EVENT SHALL THE
VESTED PERCENTAGE EXCEED 100%.

6

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(B)           EARLY RETIREMENT.  IF THE PARTICIPANT’S SERVICE TERMINATES BY
REASON OF THE EARLY RETIREMENT OF THE PARTICIPANT PURSUANT TO AN EARLY
RETIREMENT PROGRAM ESTABLISHED BY THE PARTICIPATING COMPANY TO WHICH THE
PARTICIPANT RENDERS SERVICE (“EARLY RETIREMENT”), THEN (I) THE OPTION, TO THE
EXTENT UNEXERCISED AND EXERCISABLE ON THE DATE ON WHICH THE PARTICIPANT’S
SERVICE TERMINATED, MAY BE EXERCISED BY THE PARTICIPANT AT ANY TIME PRIOR TO THE
EXPIRATION OF THREE (3) MONTHS (OR SUCH LONGER PERIOD AS SHALL BE ESTABLISHED
PURSUANT TO SUCH EARLY RETIREMENT PROGRAM) AFTER THE DATE ON WHICH THE
PARTICIPANT’S SERVICE TERMINATED, BUT IN ANY EVENT NO LATER THAN THE OPTION
EXPIRATION DATE, AND (II) SOLELY FOR THE PURPOSE OF COMPUTING THE VESTED
PERCENTAGE, THE PARTICIPANT WILL BE GIVEN CREDIT FOR SUCH ADDITIONAL MONTHS OF
CONTINUOUS SERVICE, IF ANY, AS SHALL BE ESTABLISHED PURSUANT TO THE EARLY
RETIREMENT PROGRAM; PROVIDED, HOWEVER, THAT IN NO EVENT SHALL THE VESTED
PERCENTAGE EXCEED 100%.

(C)           DISABILITY.  IF THE PARTICIPANT’S SERVICE TERMINATES BECAUSE OF
THE DISABILITY OF THE PARTICIPANT, THEN (I) THE OPTION, TO THE EXTENT
UNEXERCISED AND EXERCISABLE ON THE DATE ON WHICH THE PARTICIPANT’S SERVICE
TERMINATED, MAY BE EXERCISED BY THE PARTICIPANT (OR THE PARTICIPANT’S GUARDIAN
OR LEGAL REPRESENTATIVE) AT ANY TIME PRIOR TO THE EXPIRATION OF TWELVE (12)
MONTHS AFTER THE DATE ON WHICH THE PARTICIPANT’S SERVICE TERMINATED, BUT IN ANY
EVENT NO LATER THAN THE OPTION EXPIRATION DATE, AND (II) SOLELY FOR THE PURPOSE
OF COMPUTING THE VESTED PERCENTAGE, THE PARTICIPANT WILL BE GIVEN CREDIT FOR AN
ADDITIONAL TWELVE (12) MONTHS OF CONTINUOUS SERVICE; PROVIDED, HOWEVER, THAT IN
NO EVENT SHALL THE VESTED PERCENTAGE EXCEED 100%.

(D)           DEATH.  IF THE PARTICIPANT’S SERVICE TERMINATES BECAUSE OF THE
DEATH OF THE PARTICIPANT, THEN (I) THE OPTION, TO THE EXTENT UNEXERCISED AND
EXERCISABLE ON THE DATE ON WHICH THE PARTICIPANT’S SERVICE TERMINATED, MAY BE
EXERCISED BY THE PARTICIPANT’S LEGAL REPRESENTATIVE OR OTHER PERSON WHO ACQUIRED
THE RIGHT TO EXERCISE THE OPTION BY REASON OF THE PARTICIPANT’S DEATH AT ANY
TIME PRIOR TO THE EXPIRATION OF TWELVE (12) MONTHS AFTER THE DATE ON WHICH THE
PARTICIPANT’S SERVICE TERMINATED, BUT IN ANY EVENT NO LATER THAN THE OPTION
EXPIRATION DATE, AND (II) SOLELY FOR THE PURPOSE OF COMPUTING THE VESTED
PERCENTAGE, THE PARTICIPANT WILL BE GIVEN CREDIT FOR AN ADDITIONAL TWELVE (12)
MONTHS OF CONTINUOUS SERVICE; PROVIDED, HOWEVER, THAT IN NO EVENT SHALL THE
VESTED PERCENTAGE EXCEED 100%.  THE PARTICIPANT’S SERVICE SHALL BE DEEMED TO
HAVE TERMINATED ON ACCOUNT OF DEATH IF THE PARTICIPANT DIES WITHIN THREE (3)
MONTHS AFTER THE PARTICIPANT’S TERMINATION OF SERVICE.

(E)           TERMINATION AFTER CHANGE IN CONTROL.  IF THE PARTICIPANT’S SERVICE
CEASES AS A RESULT OF TERMINATION AFTER CHANGE IN CONTROL (AS DEFINED BELOW),
THEN (I) THE OPTION, TO THE EXTENT UNEXERCISED AND EXERCISABLE ON THE DATE ON
WHICH THE PARTICIPANT’S SERVICE TERMINATED, MAY BE EXERCISED BY THE PARTICIPANT
(OR THE PARTICIPANT’S GUARDIAN OR LEGAL REPRESENTATIVE) AT ANY TIME PRIOR TO THE
EXPIRATION OF TWELVE (12) MONTHS AFTER THE DATE ON WHICH THE PARTICIPANT’S
SERVICE TERMINATED, BUT IN ANY EVENT NO LATER THAN THE OPTION EXPIRATION DATE,
AND (II) SOLELY FOR THE PURPOSE OF COMPUTING THE VESTED PERCENTAGE, THE
PARTICIPANT WILL BE GIVEN CREDIT FOR AN ADDITIONAL TWELVE (12) MONTHS OF
CONTINUOUS SERVICE; PROVIDED, HOWEVER, THAT IN NO EVENT SHALL THE VESTED
PERCENTAGE EXCEED 100%.

(F)            OTHER TERMINATION OF SERVICE.  IF THE PARTICIPANT’S SERVICE
TERMINATES FOR ANY REASON, EXCEPT NORMAL RETIREMENT, EARLY RETIREMENT,
DISABILITY, DEATH OR TERMINATION AFTER CHANGE IN CONTROL, THE OPTION, TO THE
EXTENT UNEXERCISED AND EXERCISABLE BY THE PARTICIPANT ON THE DATE ON WHICH THE
PARTICIPANT’S SERVICE TERMINATED, MAY BE EXERCISED BY THE PARTICIPANT AT ANY
TIME PRIOR TO THE EXPIRATION OF THREE (3) MONTHS (OR SUCH OTHER LONGER PERIOD OF
TIME AS DETERMINED BY THE COMMITTEE, IN ITS DISCRETION) AFTER THE DATE ON WHICH
THE PARTICIPANT’S SERVICE TERMINATED, BUT IN ANY EVENT NO LATER THAN THE OPTION
EXPIRATION DATE.

8.2           EXTENSION IF EXERCISE PREVENTED BY LAW.  NOTWITHSTANDING THE
FOREGOING, IF THE EXERCISE OF THE OPTION WITHIN THE APPLICABLE TIME PERIODS SET
FORTH IN SECTION 8.1 IS PREVENTED BY THE PROVISIONS OF SECTION 4.6, THE OPTION
SHALL REMAIN EXERCISABLE UNTIL THREE (3) MONTHS AFTER THE DATE THE PARTICIPANT
IS NOTIFIED BY THE COMPANY THAT THE OPTION IS EXERCISABLE, BUT IN ANY EVENT NO
LATER THAN THE OPTION EXPIRATION DATE.

8.3           EXTENSION IF PARTICIPANT SUBJECT TO SECTION 16(B). 
NOTWITHSTANDING THE FOREGOING, IF A SALE WITHIN THE APPLICABLE TIME PERIODS SET
FORTH IN SECTION 8.1 OF SHARES ACQUIRED UPON THE EXERCISE OF THE OPTION WOULD
SUBJECT THE PARTICIPANT TO SUIT UNDER SECTION 16(B) OF THE EXCHANGE ACT, THE
OPTION SHALL REMAIN EXERCISABLE UNTIL THE EARLIEST TO OCCUR OF (I) THE TENTH
(10TH) DAY FOLLOWING THE DATE ON WHICH A SALE OF SUCH SHARES BY THE PARTICIPANT
WOULD NO LONGER BE SUBJECT TO SUCH SUIT, (II) THE ONE HUNDRED AND NINETIETH
(190TH) DAY AFTER THE PARTICIPANT’S TERMINATION OF SERVICE, OR (III) THE OPTION
EXPIRATION DATE.

7

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8.4           TERMINATION FOR CAUSE.  NOTWITHSTANDING ANY OTHER PROVISION OF
THIS OPTION AGREEMENT, IF THE PARTICIPANT’S SERVICE IS TERMINATED FOR CAUSE (AS
DEFINED BELOW), THE OPTION SHALL TERMINATE AND CEASE TO BE EXERCISABLE ON THE
EFFECTIVE DATE OF SUCH TERMINATION OF SERVICE.

8.5           CERTAIN DEFINITIONS.

(A)           “TERMINATION AFTER CHANGE IN CONTROL” SHALL MEAN EITHER OF THE
FOLLOWING EVENTS OCCURRING WITHIN TWELVE (12) MONTHS AFTER A CHANGE IN CONTROL:

(I)            TERMINATION BY THE PARTICIPATING COMPANY GROUP OF THE
PARTICIPANT’S SERVICE FOR ANY REASON OTHER THAN FOR CAUSE (AS DEFINED BELOW); OR

(II)           THE PARTICIPANT’S RESIGNATION FOR GOOD REASON (AS DEFINED BELOW)
FROM ALL CAPACITIES IN WHICH THE PARTICIPANT IS THEN RENDERING SERVICE WITHIN A
REASONABLE PERIOD OF TIME FOLLOWING THE EVENT CONSTITUTING GOOD REASON.

(III)          NOTWITHSTANDING ANY PROVISION HEREIN TO THE CONTRARY, TERMINATION
AFTER CHANGE IN CONTROL SHALL NOT INCLUDE ANY TERMINATION OF THE PARTICIPANT’S
SERVICE WHICH (1) IS FOR CAUSE (AS DEFINED BELOW); (2) IS A RESULT OF THE
PARTICIPANT’S NORMAL RETIREMENT, EARLY RETIREMENT, DEATH OR DISABILITY; (3) IS A
RESULT OF THE PARTICIPANT’S VOLUNTARY TERMINATION OF SERVICE OTHER THAN FOR GOOD
REASON; OR (4) OCCURS PRIOR TO THE EFFECTIVENESS OF A CHANGE IN CONTROL.

(B)           “CAUSE” SHALL MEAN ANY OF THE FOLLOWING: (I) THE PARTICIPANT’S
CONVICTION OF A FELONY; (II) THE PARTICIPANT’S MATERIAL ACT OF FRAUD, DISHONESTY
OR OTHER MALFEASANCE; OR (III) THE PARTICIPANT’S WILLFUL, IMPROPER DISCLOSURE OF
A PARTICIPATING COMPANY’S CONFIDENTIAL OR PROPRIETARY INFORMATION.

(C)           “GOOD REASON” SHALL MEAN ANY ONE OR MORE OF THE FOLLOWING:

(I)            WITHOUT THE PARTICIPANT’S EXPRESS WRITTEN CONSENT, THE ASSIGNMENT
TO THE PARTICIPANT OF ANY DUTIES, OR ANY LIMITATION OF THE PARTICIPANT’S
RESPONSIBILITIES, SUBSTANTIALLY INCONSISTENT WITH THE PARTICIPANT’S POSITIONS,
DUTIES, RESPONSIBILITIES AND STATUS WITH THE PARTICIPATING COMPANY GROUP
IMMEDIATELY PRIOR TO THE DATE OF THE CHANGE IN CONTROL;

(II)           WITHOUT THE PARTICIPANT’S EXPRESS WRITTEN CONSENT, THE RELOCATION
BY MORE THAN 35 MILES OF THE PRINCIPAL PLACE OF THE PARTICIPANT’S SERVICE
IMMEDIATELY PRIOR TO THE DATE OF THE CHANGE IN CONTROL, OR THE IMPOSITION OF
TRAVEL REQUIREMENTS SUBSTANTIALLY MORE DEMANDING OF THE PARTICIPANT THAN SUCH
TRAVEL REQUIREMENTS EXISTING IMMEDIATELY PRIOR TO THE DATE OF THE CHANGE IN
CONTROL;

(III)          ANY FAILURE BY THE PARTICIPATING COMPANY GROUP TO PAY, OR ANY
MATERIAL REDUCTION BY THE PARTICIPATING COMPANY GROUP OF, (1) THE PARTICIPANT’S
BASE SALARY IN EFFECT IMMEDIATELY PRIOR TO THE DATE OF THE CHANGE IN CONTROL
(UNLESS REDUCTIONS COMPARABLE IN AMOUNT, OR PERCENTAGE, AND DURATION ARE
CONCURRENTLY MADE FOR ALL OTHER EMPLOYEES OF THE PARTICIPATING COMPANY GROUP
WITH RESPONSIBILITIES, ORGANIZATIONAL LEVEL AND TITLE COMPARABLE TO THE
PARTICIPANT’S), OR (2) THE PARTICIPANT’S BONUS COMPENSATION, IF ANY, IN EFFECT
IMMEDIATELY PRIOR TO THE DATE OF THE CHANGE IN CONTROL (SUBJECT TO APPLICABLE
PERFORMANCE REQUIREMENTS WITH RESPECT TO THE ACTUAL AMOUNT OF BONUS COMPENSATION
EARNED BY THE PARTICIPANT); OR

(IV)          ANY FAILURE BY THE PARTICIPATING COMPANY GROUP TO (1) CONTINUE TO
PROVIDE THE PARTICIPANT WITH THE OPPORTUNITY TO PARTICIPATE, ON TERMS NO LESS
FAVORABLE THAN THOSE IN EFFECT FOR THE BENEFIT OF ANY EMPLOYEE OR SERVICE
PROVIDER GROUP WHICH CUSTOMARILY INCLUDES A PERSON HOLDING THE EMPLOYMENT OR
SERVICE PROVIDER POSITION OR A COMPARABLE POSITION WITH THE PARTICIPATING
COMPANY GROUP THEN HELD BY THE PARTICIPANT, IN ANY BENEFIT OR COMPENSATION PLANS
AND PROGRAMS, INCLUDING, BUT NOT LIMITED TO, THE PARTICIPATING COMPANY GROUP’S
LIFE, DISABILITY, HEALTH, DENTAL, MEDICAL, SAVINGS, PROFIT SHARING, STOCK
PURCHASE AND RETIREMENT PLANS, IF ANY, IN WHICH THE PARTICIPANT WAS
PARTICIPATING IMMEDIATELY PRIOR TO THE DATE OF THE CHANGE IN CONTROL, OR THEIR
EQUIVALENT, OR (2) PROVIDE THE PARTICIPANT WITH ALL OTHER FRINGE BENEFITS (OR
THEIR EQUIVALENT) FROM TIME TO TIME IN EFFECT FOR THE BENEFIT OF ANY EMPLOYEE OR
SERVICE PROVIDER GROUP WHICH CUSTOMARILY INCLUDES A PERSON HOLDING THE
EMPLOYMENT OR SERVICE PROVIDER POSITION OR A COMPARABLE POSITION WITH THE
PARTICIPATING COMPANY GROUP THEN HELD BY THE PARTICIPANT.

8

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9.             CHANGE IN CONTROL.

9.1           DEFINITIONS.

(A)           AN “OWNERSHIP CHANGE EVENT” SHALL BE DEEMED TO HAVE OCCURRED IF
ANY OF THE FOLLOWING OCCURS WITH RESPECT TO THE COMPANY: (I) THE DIRECT OR
INDIRECT SALE OR EXCHANGE BY THE STOCKHOLDERS OF THE COMPANY OF ALL OR
SUBSTANTIALLY ALL OF THE VOTING STOCK OF THE COMPANY; (II) A MERGER OR
CONSOLIDATION IN WHICH THE COMPANY IS A PARTY; (III) THE SALE, EXCHANGE, OR
TRANSFER OF ALL OR SUBSTANTIALLY ALL OF THE ASSETS OF THE COMPANY (OTHER THAN A
SALE, EXCHANGE OR TRANSFER TO ONE OR MORE SUBSIDIARIES OF THE COMPANY); OR (IV)
A LIQUIDATION OR DISSOLUTION OF THE COMPANY.

(B)           A “CHANGE IN CONTROL” SHALL MEAN AN OWNERSHIP CHANGE EVENT OR
SERIES OF RELATED OWNERSHIP CHANGE EVENTS (COLLECTIVELY, A “TRANSACTION”) IN
WHICH THE STOCKHOLDERS OF THE COMPANY IMMEDIATELY BEFORE THE TRANSACTION DO NOT
RETAIN IMMEDIATELY AFTER THE TRANSACTION, DIRECT OR INDIRECT BENEFICIAL
OWNERSHIP OF MORE THAN FIFTY PERCENT (50%) OF THE TOTAL COMBINED VOTING POWER OF
THE OUTSTANDING VOTING SECURITIES OF THE COMPANY OR, IN THE CASE OF AN OWNERSHIP
CHANGE EVENT DESCRIBED IN SECTION 9.1(A)(III), THE ENTITY TO WHICH THE ASSETS OF
THE COMPANY WERE TRANSFERRED.

9.2           EFFECT OF CHANGE IN CONTROL ON OPTION.  IN THE EVENT OF A CHANGE
IN CONTROL, THE SURVIVING, CONTINUING, SUCCESSOR, OR PURCHASING ENTITY OR PARENT
THEREOF, AS THE CASE MAY BE (THE “ACQUIROR”), MAY, WITHOUT THE CONSENT OF
PARTICIPANT, EITHER ASSUME THE COMPANY’S RIGHTS AND OBLIGATIONS UNDER
OUTSTANDING THE OPTION OR SUBSTITUTE FOR THE OPTION A SUBSTANTIALLY EQUIVALENT
OPTION FOR THE ACQUIROR’S STOCK.  IN THE EVENT THE ACQUIROR ELECTS NOT TO ASSUME
OR SUBSTITUTE FOR THE OPTION IN CONNECTION WITH A CHANGE IN CONTROL, THE
COMMITTEE SHALL PROVIDE THAT ANY UNEXERCISED AND/OR UNVESTED PORTIONS OF THE
OPTION SHALL BE IMMEDIATELY EXERCISABLE AND VESTED IN FULL AS OF THE DATE THIRTY
(30) DAYS PRIOR TO THE DATE OF THE CHANGE IN CONTROL.  ANY EXERCISE OF THE
OPTION THAT WAS PERMISSIBLE SOLELY BY REASON OF THIS SECTION 9.2 SHALL BE
CONDITIONED UPON THE CONSUMMATION OF THE CHANGE IN CONTROL.  THE OPTION SHALL
TERMINATE AND CEASE TO BE OUTSTANDING EFFECTIVE AS OF THE TIME OF CONSUMMATION
OF THE CHANGE IN CONTROL TO THE EXTENT THAT THE OPTION IS NEITHER ASSUMED BY THE
ACQUIROR IN CONNECTION WITH THE CHANGE IN CONTROL NOR EXERCISED AS OF THE TIME
OF CONSUMMATION OF THE CHANGE IN CONTROL.

10.           ADJUSTMENTS FOR CHANGES IN CAPITAL STRUCTURE.

                                In the event of any change in the Stock through
merger, consolidation, reorganization, reincorporation, recapitalization,
reclassification, stock dividend, stock split, reverse stock split, split-up,
split-off, spin-off, combination of shares, exchange of shares or similar change
in the capital structure of the Company, or in the event of payment of a
dividend or distribution to the stockholders of the Company in a form other than
Stock (excepting normal cash dividends) that has a material effect on the Fair
Market Value of shares of Stock, appropriate adjustments shall be made in the
number, Exercise Price and class of shares subject to the Option.  If a majority
of the shares which are of the same class as the shares that are subject to the
Option are exchanged for, converted into, or otherwise become (whether or not
pursuant to an Ownership Change Event) shares of another corporation (the “New
Shares”), the Committee may unilaterally amend the Option to provide that the
Option is exercisable for New Shares.  In the event of any such amendment, the
Number of Option Shares and the Exercise Price shall be adjusted in a fair and
equitable manner, as determined by the Committee, in its discretion. 
Notwithstanding the foregoing, any fractional share resulting from an adjustment
pursuant to this Section 10 shall be rounded down to the nearest whole number,
and in no event may the Exercise Price be decreased to an amount less than the
par value, if any, of the stock subject to the Option. The adjustments
determined by the Committee pursuant to this Section 10 shall be final, binding
and conclusive.

 

11.           RIGHTS AS A STOCKHOLDER, EMPLOYEE OR CONSULTANT.

                                The Participant shall have no rights as a
stockholder with respect to any shares covered by the Option until the date of
the issuance of the shares for which the Option has been exercised (as evidenced
by the appropriate entry on the books of the Company or of a duly authorized
transfer agent of the Company).  No adjustment shall be made for dividends,
distributions or other rights for which the record date is prior to the date
such shares are issued, except as provided in Section 10.  If the Participant is
an Employee, the Participant understands and acknowledges that, except as
otherwise provided in a separate, written employment agreement between a
Participating Company and the Participant, the Participant’s employment is “at
will” and is for no

 

9

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specified term.  Nothing in this Option Agreement shall confer upon the
Participant any right to continue in the Service of a Participating Company or
interfere in any way with any right of the Participating Company Group to
terminate the Participant’s Service as an Employee or Consultant, as the case
may be, at any time.

 

12.           MISCELLANEOUS PROVISIONS.

12.1         DESIGNATION OF BENEFICIARY.  SUBJECT TO LOCAL LAWS AND PROCEDURES,
THE PARTICIPANT MAY FILE WITH THE COMPANY A WRITTEN DESIGNATION OF A BENEFICIARY
WHO, IN THE EVENT OF THE DEATH OF THE PARTICIPANT, SHALL THEREAFTER BE ENTITLED
TO EXERCISE THE OPTION TO THE EXTENT THAT IT REMAINS EXERCISABLE IN ACCORDANCE
WITH THIS OPTION AGREEMENT.  EACH DESIGNATION WILL REVOKE ALL PRIOR DESIGNATIONS
BY THE PARTICIPANT, SHALL BE IN A FORM PRESCRIBED BY THE COMPANY, AND SHALL BE
EFFECTIVE ONLY WHEN FILED BY THE PARTICIPANT IN WRITING WITH THE COMPANY DURING
THE PARTICIPANT’S LIFETIME.  IF THE PARTICIPANT IS MARRIED AND DESIGNATES A
BENEFICIARY OTHER THAN THE PARTICIPANT’S SPOUSE, THE EFFECTIVENESS OF SUCH
DESIGNATION MAY BE SUBJECT TO THE CONSENT OF THE PARTICIPANT’S SPOUSE.  IF THE
PARTICIPANT DIES WITHOUT AN EFFECTIVE DESIGNATION OF A BENEFICIARY WHO IS LIVING
AT THE TIME OF THE PARTICIPANT’S DEATH, THE OPTION MAY BE EXERCISED BY THE
PARTICIPANT’S LEGAL REPRESENTATIVE TO THE EXTENT THAT IT REMAINS EXERCISABLE IN
ACCORDANCE WITH THIS OPTION AGREEMENT.  IF THE DESIGNATED BENEFICIARY SURVIVES
THE PARTICIPANT BUT DIES BEFORE EXERCISING THE OPTION TO THE FULL EXTENT THAT IT
REMAINS EXERCISABLE IN ACCORDANCE WITH THIS OPTION AGREEMENT, THEN THE OPTION
SHALL BE EXERCISABLE BY THE LEGAL REPRESENTATIVE OF SUCH DECEASED DESIGNATED
BENEFICIARY TO THE EXTENT THAT IT REMAINS EXERCISABLE IN ACCORDANCE WITH THIS
OPTION AGREEMENT.  THE DETERMINATION OF THE COMPANY AS TO WHICH PERSON, IF ANY,
QUALIFIES AS A DESIGNATED BENEFICIARY SHALL BE FINAL, CONCLUSIVE AND BINDING ON
ALL PERSONS.

12.2         BINDING EFFECT.  THIS OPTION AGREEMENT SHALL INURE TO THE BENEFIT
OF AND BE BINDING UPON THE PARTIES HERETO AND THEIR RESPECTIVE HEIRS, EXECUTORS,
ADMINISTRATORS, SUCCESSORS AND ASSIGNS.

12.3         TERMINATION OR AMENDMENT.  THE COMMITTEE MAY TERMINATE OR AMEND THE
PLAN OR THE OPTION AT ANY TIME; PROVIDED, HOWEVER, THAT EXCEPT AS PROVIDED IN
SECTION 9.2 IN CONNECTION WITH A CHANGE IN CONTROL, NO SUCH TERMINATION OR
AMENDMENT MAY ADVERSELY AFFECT THE OPTION OR ANY UNEXERCISED PORTION HEREOF
WITHOUT THE CONSENT OF THE PARTICIPANT UNLESS SUCH TERMINATION OR AMENDMENT IS
NECESSARY TO COMPLY WITH ANY APPLICABLE LAW OR GOVERNMENT REGULATION.  NO
AMENDMENT OR ADDITION TO THIS OPTION AGREEMENT SHALL BE EFFECTIVE UNLESS IN
WRITING.

12.4         DELIVERY OF DOCUMENTS AND NOTICES.  ANY DOCUMENT RELATING TO
PARTICIPATING IN THE PLAN AND/OR NOTICE REQUIRED OR PERMITTED HEREUNDER SHALL BE
GIVEN IN WRITING AND SHALL BE DEEMED EFFECTIVELY GIVEN (EXCEPT TO THE EXTENT
THAT THIS OPTION AGREEMENT PROVIDES FOR EFFECTIVENESS ONLY UPON ACTUAL RECEIPT
OF SUCH NOTICE) UPON PERSONAL DELIVERY, ELECTRONIC DELIVERY, OR UPON DEPOSIT IN
THE U.S. POST OFFICE OR FOREIGN POSTAL SERVICE, BY REGISTERED OR CERTIFIED MAIL,
WITH POSTAGE AND FEES PREPAID, ADDRESSED TO THE OTHER PARTY AT THE E-MAIL
ADDRESS, IF ANY, PROVIDED FOR THE PARTICIPANT BY A PARTICIPATING COMPANY OR AT
THE ADDRESS SHOWN BELOW THAT PARTY’S SIGNATURE TO THIS OPTION AGREEMENT OR AT
SUCH OTHER ADDRESS AS SUCH PARTY MAY DESIGNATE IN WRITING FROM TIME TO TIME TO
THE OTHER PARTY.

(A)           DESCRIPTION OF ELECTRONIC DELIVERY.  THE PLAN DOCUMENTS, WHICH MAY
INCLUDE BUT DO NOT NECESSARILY INCLUDE: THE PLAN PROSPECTUS, THIS OPTION
AGREEMENT AND U.S. FINANCIAL REPORTS OF THE COMPANY, MAY BE DELIVERED TO THE
PARTICIPANT ELECTRONICALLY.  IN ADDITION, THE PARTICIPANT MAY DELIVER
ELECTRONICALLY THE NOTICE CALLED FOR BY SECTION 4.2 (THE “NOTICE OF EXERCISE”)
TO THE COMPANY OR TO SUCH THIRD PARTY INVOLVED IN ADMINISTERING THE PLAN AS THE
COMPANY MAY DESIGNATE FROM TIME TO TIME.  SUCH MEANS OF DELIVERY MAY INCLUDE BUT
DO NOT NECESSARILY INCLUDE THE DELIVERY OF A LINK TO A COMPANY INTRANET OR THE
INTERNET SITE OF A THIRD PARTY INVOLVED IN ADMINISTERING THE PLAN, THE DELIVERY
OF THE DOCUMENT VIA E-MAIL OR SUCH OTHER DELIVERY DETERMINED AT THE COMMITTEE’S
DISCRETION.

(B)           CONSENT TO ELECTRONIC DELIVERY.  THE PARTICIPANT ACKNOWLEDGES THAT
THE PARTICIPANT HAS READ SECTION 12.4 OF THIS OPTION AGREEMENT AND CONSENTS TO
THE ELECTRONIC DELIVERY OF THE PLAN DOCUMENTS AND THE DELIVERY OF THE NOTICE OF
EXERCISE, AS DESCRIBED IN SECTION 12.4(A) OF THIS OPTION AGREEMENT.  THE
PARTICIPANT ACKNOWLEDGES THAT HE OR SHE MAY RECEIVE FROM THE COMPANY A PAPER
COPY OF ANY DOCUMENTS DELIVERED ELECTRONICALLY AT NO COST IF THE PARTICIPANT
CONTACTS THE COMPANY BY TELEPHONE, THROUGH A POSTAL SERVICE OR ELECTRONIC MAIL
AT EQUITY@ADOBE.COM.  THE PARTICIPANT FURTHER ACKNOWLEDGES THAT THE PARTICIPANT
WILL BE PROVIDED WITH A PAPER COPY OF ANY DOCUMENTS DELIVERED ELECTRONICALLY IF
ELECTRONIC DELIVERY FAILS; SIMILARLY, THE PARTICIPANT UNDERSTANDS THAT THE
PARTICIPANT MUST PROVIDE THE COMPANY OR ANY DESIGNATED THIRD PARTY WITH A PAPER
COPY OF ANY DOCUMENTS DELIVERED ELECTRONICALLY IF ELECTRONIC DELIVERY FAILS. 
ALSO, THE PARTICIPANT UNDERSTANDS THAT THE

10

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PARTICIPANT’S CONSENT MAY BE REVOKED OR CHANGED, INCLUDING ANY CHANGE IN THE
ELECTRONIC MAIL ADDRESS TO WHICH DOCUMENTS ARE DELIVERED (IF PARTICIPANT HAS
PROVIDED AN ELECTRONIC MAIL ADDRESS), AT ANY TIME BY NOTIFYING THE COMPANY OF
SUCH REVISED OR REVOKED CONSENT BY TELEPHONE, POSTAL SERVICE OR ELECTRONIC MAIL
AT EQUITY@ADOBE.COM.  FINALLY, THE PARTICIPANT UNDERSTANDS THAT HE OR SHE IS NOT
REQUIRED TO CONSENT TO ELECTRONIC DELIVERY.

12.5         DATA PRIVACY CONSENT.  THE PARTICIPANT HEREBY EXPLICITLY AND
UNAMBIGUOUSLY CONSENTS TO THE COLLECTION, USE AND TRANSFER, IN ELECTRONIC OR
OTHER FORM, OF THE PARTICIPANT’S PERSONAL DATA AS DESCRIBED IN THIS DOCUMENT BY
AND AMONG THE MEMBERS OF THE PARTICIPATING COMPANY GROUP FOR THE EXCLUSIVE
PURPOSE OF IMPLEMENTING, ADMINISTERING AND MANAGING THE PARTICIPANT’S
PARTICIPATION IN THE PLAN.

                                The Participant understands that the Company and
the Participating Company Group hold certain personal information about the
Participant, including, but not limited to, the Participant’s name, home address
and telephone number, date of birth, social insurance number or other
identification number, salary, nationality, job title, any shares of Stock or
directorships held in the Company, details of all Options or any other
entitlement to shares of Stock awarded, canceled, exercised, vested, unvested or
outstanding in the Participant’s favor, for the purpose of implementing,
administering and managing the Plan (“Data”).  The Participant understands that
Data may be transferred to any third parties assisting in the implementation,
administration and management of the Plan, that these recipients may be located
in the Participant’s country or elsewhere, and that the recipient’s country may
have different data privacy laws and protections than the Participant’s
country.  The Participant understands that he or she may request a list with the
names and addresses of any potential recipients of the Data by contacting the
Participant’s local human resources representative.  The Participant authorizes
the recipients to receive, possess, use, retain and transfer the Data, in
electronic or other form, for the purposes of implementing, administering and
managing the Participant’s participation in the Plan, including any requisite
transfer of such Data as may be required to a broker or other third party with
whom the Participant may elect to deposit any shares of Stock acquired upon
exercise of the Option.  The Participant understands that Data will be held only
as long as is necessary to implement, administer and manage the Participant’s
participation in the Plan.  The Participant understands that he or she may, at
any time, view Data, request additional information about the storage and
processing of Data, require any necessary amendments to Data or refuse or
withdraw the consents herein, in any case without cost, by contacting in writing
the Participant’s local human resources representative.  The Participant
understands, however, that refusing or withdrawing the Participant’s consent may
affect the Participant’s ability to participate in the Plan.  For more
information on the consequences of the Participant’s refusal to consent or
withdrawal of consent, the Participant understands that he or she may contact
the Participant’s local human resources representative.

 

12.6         INTEGRATED AGREEMENT.  THIS OPTION AGREEMENT, TOGETHER WITH THE
SUPERSEDING AGREEMENT, IF ANY, CONSTITUTES THE ENTIRE UNDERSTANDING AND
AGREEMENT OF THE PARTICIPANT AND THE PARTICIPATING COMPANY GROUP WITH RESPECT TO
THE SUBJECT MATTER CONTAINED HEREIN AND SUPERSEDES ANY PRIOR AGREEMENTS,
UNDERSTANDINGS, RESTRICTIONS, REPRESENTATIONS, OR WARRANTIES AMONG THE
PARTICIPANT AND THE PARTICIPATING COMPANY GROUP WITH RESPECT TO SUCH SUBJECT
MATTER OTHER THAN THOSE AS SET FORTH OR PROVIDED FOR HEREIN.  TO THE EXTENT
CONTEMPLATED HEREIN, THE PROVISIONS OF THIS OPTION AGREEMENT SHALL SURVIVE ANY
EXERCISE OF THE OPTION AND SHALL REMAIN IN FULL FORCE AND EFFECT.

12.7         APPLICABLE LAW.  THIS OPTION AGREEMENT SHALL BE GOVERNED BY THE
LAWS OF THE STATE OF CALIFORNIA AS SUCH LAWS ARE APPLIED TO AGREEMENTS BETWEEN
CALIFORNIA RESIDENTS ENTERED INTO AND TO BE PERFORMED ENTIRELY WITHIN THE STATE
OF CALIFORNIA.

11

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12.8         COUNTERPARTS.  THIS OPTION AGREEMENT MAY BE EXECUTED IN
COUNTERPARTS, EACH OF WHICH SHALL BE DEEMED AN ORIGINAL, BUT ALL OF WHICH
TOGETHER SHALL CONSTITUTE ONE AND THE SAME INSTRUMENT.

 

ADOBE SYSTEMS INCORPORATED

 

 

 

 

By:

 

 

 

Murray J. Demo

 

Title:

Senior Vice President, Chief Financial Officer

 

 

 

 

Address:

345 Park Avenue
San Jose, CA 95110-2704

 

                The Participant represents that the Participant is familiar with
the terms and provisions of this Option Agreement and hereby accepts the Option
subject to all of the terms and provisions thereof.  The Participant hereby
agrees to accept as binding, conclusive and final all decisions or
interpretations of the Committee upon any questions arising under this Option
Agreement.

 

 

 

 

PARTICIPANT

 

 

 

 

Date:

 

 

 

 

 

 

Signature

 

 

 

 

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ADOBE SYSTEMS INCORPORATED

RESTRICTED STOCK AGREEMENT

 

 

                THIS RESTRICTED STOCK AGREEMENT (the “Agreement”) is made and
entered into as of the Date of Grant by and between Adobe Systems Incorporated
and

 

                                                                                               
(the “Participant”).  The Company has granted to the Participant pursuant to the
Adobe Systems Incorporated 2003 Equity Incentive Plan (the “Plan”) an award of
certain shares of Stock (the “Award”), upon the terms and conditions set forth
in this Agreement, but subject in any event to the Superseding Agreement, if
any, described below.

 

13.           DEFINITIONS AND CONSTRUCTION.

 

13.1         DEFINITIONS.  WHENEVER USED HEREIN, THE FOLLOWING TERMS SHALL HAVE
THEIR RESPECTIVE MEANINGS SET FORTH BELOW:

 

(A)           “DATE OF GRANT” MEANS

 

(B)           “TOTAL NUMBER OF SHARES” MEANS                    SHARES OF STOCK,
AS ADJUSTED FROM TIME TO TIME PURSUANT TO SECTION 8.

 

(C)           “VESTED SHARES” MEANS, ON ANY RELEVANT DATE AND PROVIDED THAT THE
PARTICIPANT’S SERVICE HAS NOT TERMINATED PRIOR TO SUCH DATE, A NUMBER OF SHARES
OF STOCK DETERMINED AS FOLLOWS:

 

 

 

Vesting Date

 

No. Shares Vesting

 

Cumulative
No. Shares Vested

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(D)           “AFFILIATE” MEANS (I) AN ENTITY, OTHER THAN A PARENT CORPORATION,
THAT DIRECTLY, OR INDIRECTLY THROUGH ONE OR MORE INTERMEDIARY ENTITIES, CONTROLS
THE COMPANY OR (II) AN ENTITY, OTHER THAN A SUBSIDIARY CORPORATION, THAT IS
CONTROLLED BY THE COMPANY DIRECTLY, OR INDIRECTLY THROUGH ONE OR MORE
INTERMEDIARY ENTITIES.  FOR THIS PURPOSE, THE TERM “CONTROL” (INCLUDING THE TERM
“CONTROLLED BY”) MEANS THE POSSESSION, DIRECT OR INDIRECT, OF THE POWER TO
DIRECT OR CAUSE THE DIRECTION OF THE MANAGEMENT AND POLICIES OF THE RELEVANT
ENTITY, WHETHER THROUGH THE OWNERSHIP OF VOTING SECURITIES, BY CONTRACT OR
OTHERWISE; OR SHALL HAVE SUCH OTHER MEANING ASSIGNED SUCH TERM FOR THE PURPOSES
OF REGISTRATION IN THE UNITED STATES (“U.S.”) ON FORM S-8 UNDER THE SECURITIES
ACT.

 

(E)           “BOARD” MEANS THE BOARD OF DIRECTORS OF THE COMPANY.

 

(F)            “CHANGE IN CONTROL” MEANS AN OWNERSHIP CHANGE EVENT OR SERIES OF
RELATED OWNERSHIP CHANGE EVENTS (COLLECTIVELY, A “TRANSACTION”) IN WHICH THE
STOCKHOLDERS OF THE COMPANY IMMEDIATELY BEFORE THE TRANSACTION DO NOT RETAIN
IMMEDIATELY AFTER THE TRANSACTION, DIRECT OR INDIRECT BENEFICIAL OWNERSHIP OF
MORE THAN FIFTY PERCENT (50%) OF THE TOTAL COMBINED VOTING POWER OF THE
OUTSTANDING VOTING SECURITIES OF THE COMPANY OR, IN THE CASE OF AN OWNERSHIP
CHANGE EVENT DESCRIBED IN SECTION 1.1(P)(III) BELOW, THE ENTITY TO WHICH THE
ASSETS OF THE COMPANY WERE TRANSFERRED.

 

(G)           “CODE” MEANS THE U.S. INTERNAL REVENUE CODE OF 1986, AS AMENDED,
AND ANY APPLICABLE REGULATIONS PROMULGATED THEREUNDER.

 

(H)           “COMMITTEE” THE EXECUTIVE COMPENSATION COMMITTEE OR OTHER
COMMITTEE OF THE BOARD DULY APPOINTED TO ADMINISTER THE PLAN AND HAVING SUCH
POWERS AS SHALL BE SPECIFIED BY THE BOARD.  IF NO

 

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COMMITTEE OF THE BOARD HAS BEEN APPOINTED TO ADMINISTER THE PLAN, THE BOARD
SHALL EXERCISE ALL OF THE POWERS OF THE COMMITTEE GRANTED HEREIN, AND, IN ANY
EVENT, THE BOARD MAY IN ITS DISCRETION EXERCISE ANY OR ALL OF SUCH POWERS.

(I)            “COMPANY” MEANS ADOBE SYSTEMS INCORPORATED, A DELAWARE
CORPORATION, OR ANY SUCCESSOR CORPORATION THERETO.

 

(J)            “CONSULTANT” MEANS A PERSON ENGAGED TO PROVIDE CONSULTING OR
ADVISORY SERVICES (OTHER THAN AS AN EMPLOYEE OR A MEMBER OF THE BOARD) TO A
PARTICIPATING COMPANY, PROVIDED THAT THE IDENTITY OF SUCH PERSON, THE NATURE OF
SUCH SERVICES OR THE ENTITY TO WHICH SUCH SERVICES ARE PROVIDED WOULD NOT
PRECLUDE THE COMPANY FROM OFFERING OR SELLING SECURITIES TO SUCH PERSON PURSUANT
TO THE PLAN IN RELIANCE ON REGISTRATION ON A FORM S-8 REGISTRATION STATEMENT
UNDER THE SECURITIES ACT.

 

(K)           “DISABILITY” MEANS THE PERMANENT AND TOTAL DISABILITY OF THE
PARTICIPANT WITHIN THE MEANING OF SECTION 22(E)(3) OF THE CODE.

 

(L)            “EMPLOYEE” MEANS ANY PERSON TREATED AS AN EMPLOYEE (INCLUDING AN
OFFICER OR A MEMBER OF THE BOARD WHO IS ALSO TREATED AS AN EMPLOYEE) IN THE
RECORDS OF A PARTICIPATING COMPANY; PROVIDED, HOWEVER, THAT NEITHER SERVICE AS A
MEMBER OF THE BOARD NOR PAYMENT OF A DIRECTOR’S FEE SHALL BE SUFFICIENT TO
CONSTITUTE EMPLOYMENT.

 

(M)          “EXCHANGE ACT” MEANS THE U.S. SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

 

(N)           “OFFICER” MEANS ANY PERSON DESIGNATED BY THE BOARD AS AN OFFICER
OF THE COMPANY.

 

(O)           “OWNERSHIP CHANGE EVENT” MEANS THE OCCURRENCE OF ANY OF THE
FOLLOWING WITH RESPECT TO THE COMPANY: (I) THE DIRECT OR INDIRECT SALE OR
EXCHANGE BY THE STOCKHOLDERS OF THE COMPANY OF ALL OR SUBSTANTIALLY ALL OF THE
VOTING STOCK OF THE COMPANY; (II) A MERGER OR CONSOLIDATION IN WHICH THE COMPANY
IS A PARTY; (III) THE SALE, EXCHANGE, OR TRANSFER OF ALL OR SUBSTANTIALLY ALL OF
THE ASSETS OF THE COMPANY (OTHER THAN A SALE, EXCHANGE OR TRANSFER TO ONE OR
MORE SUBSIDIARIES OF THE COMPANY); OR (IV) A LIQUIDATION OR DISSOLUTION OF THE
COMPANY.

 

(P)           “PARENT CORPORATION” MEANS ANY PRESENT OR FUTURE “PARENT
CORPORATION” OF THE COMPANY, AS DEFINED IN SECTION 424(E) OF THE CODE.

 

(Q)           “PARTICIPATING COMPANY” MEANS THE COMPANY OR ANY PARENT
CORPORATION, SUBSIDIARY CORPORATION OR AFFILIATE.

 

(R)            “PARTICIPATING COMPANY GROUP” MEANS, AT ANY POINT IN TIME, ALL
CORPORATIONS COLLECTIVELY WHICH ARE THEN PARTICIPATING COMPANIES.

 

(S)           “SERVICE” MEANS THE PARTICIPANT’S EMPLOYMENT OR SERVICE WITH THE
PARTICIPATING COMPANY GROUP AS AN EMPLOYEE OR A CONSULTANT, WHICHEVER SUCH
CAPACITY THE PARTICIPANT HELD ON THE DATE OF GRANT OR, IF LATER, THE DATE ON
WHICH THE PARTICIPANT COMMENCED SERVICE.  THE PARTICIPANT’S SERVICE SHALL BE
DEEMED TO HAVE TERMINATED IF THE PARTICIPANT CEASES TO RENDER SERVICE TO THE
PARTICIPATING COMPANY GROUP IN SUCH INITIAL CAPACITY.  HOWEVER, THE
PARTICIPANT’S SERVICE SHALL NOT BE DEEMED TO HAVE TERMINATED MERELY BECAUSE OF A
CHANGE IN THE PARTICIPATING COMPANY FOR WHICH THE PARTICIPANT RENDERS SERVICE IN
SUCH INITIAL CAPACITY, PROVIDED THAT THERE IS NO INTERRUPTION OR TERMINATION OF
THE PARTICIPANT’S SERVICE.  FURTHERMORE, THE PARTICIPANT’S SERVICE WITH THE
PARTICIPATING COMPANY GROUP SHALL NOT BE DEEMED TO HAVE TERMINATED IF THE
PARTICIPANT TAKES ANY BONA FIDE LEAVE OF ABSENCE APPROVED BY THE COMPANY OF
NINETY (90) DAYS OR LESS.  IN THE EVENT OF A LEAVE IN EXCESS OF NINETY (90)
DAYS, THE PARTICIPANT’S SERVICE SHALL BE DEEMED TO TERMINATE ON THE NINETY-FIRST
(91ST) DAY OF THE LEAVE UNLESS THE PARTICIPANT’S RIGHT TO RETURN TO SERVICE WITH
THE PARTICIPATING COMPANY GROUP IS GUARANTEED BY STATUTE OR CONTRACT. 
NOTWITHSTANDING THE FOREGOING, UNLESS OTHERWISE DESIGNATED BY THE COMPANY OR
REQUIRED BY LAW, A LEAVE OF ABSENCE SHALL NOT BE TREATED AS SERVICE FOR PURPOSES
OF DETERMINING VESTING UNDER THE AGREEMENT.  THE PARTICIPANT’S SERVICE SHALL BE
DEEMED TO HAVE TERMINATED EITHER UPON AN ACTUAL TERMINATION OF SERVICE OR UPON
THE CORPORATION FOR WHICH THE PARTICIPANT PERFORMS SERVICE CEASING TO BE A
PARTICIPATING COMPANY.  SUBJECT TO THE FOREGOING, THE COMPANY, IN ITS
DISCRETION, SHALL DETERMINE WHETHER THE PARTICIPANT’S SERVICE HAS TERMINATED AND
THE EFFECTIVE DATE OF SUCH TERMINATION.

 

14

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(T)            “STOCK” MEANS THE COMMON STOCK OF THE COMPANY, AS ADJUSTED FROM
TIME TO TIME IN ACCORDANCE WITH SECTION 8.

 

(U)           “SUBSIDIARY CORPORATION” MEANS ANY PRESENT OR FUTURE “SUBSIDIARY
CORPORATION” OF THE COMPANY, AS DEFINED IN SECTION 424(F) OF THE CODE.

 

(V)           “SUPERSEDING AGREEMENT” MEANS THE ADOBE SYSTEMS INCORPORATED
EXECUTIVE SEVERANCE PLAN IN THE EVENT OF A CHANGE IN CONTROL OR ANY SUCCESSOR
PLAN OR AGREEMENT IN WHICH THE PARTICIPANT IS A PARTICIPANT OR TO WHICH THE
PARTICIPANT IS A PARTY (IN EACH SUCH INSTANCE, THE “SEVERANCE PLAN”), OR ANY
AGREEMENT TO WHICH THE PARTICIPANT IS A PARTY WHICH, BY ITS EXISTENCE ALONE,
PREVENTS THE PARTICIPANT FROM BEING ELIGIBLE TO PARTICIPATE IN THE SEVERANCE
PLAN.  THE TERMS AND CONDITIONS OF ANY SUCH SUPERSEDING AGREEMENT SHALL,
NOTWITHSTANDING ANY PROVISION OF THIS AGREEMENT TO THE CONTRARY, SUPERSEDE ANY
INCONSISTENT TERM OR CONDITION SET FORTH IN THIS AGREEMENT TO THE EXTENT
INTENDED BY SUCH SUPERSEDING AGREEMENT.

 

13.2         CONSTRUCTION.  CAPTIONS AND TITLES CONTAINED HEREIN ARE FOR
CONVENIENCE ONLY AND SHALL NOT AFFECT THE MEANING OR INTERPRETATION OF ANY
PROVISION OF THIS AGREEMENT.  EXCEPT WHEN OTHERWISE INDICATED BY THE CONTEXT,
THE SINGULAR SHALL INCLUDE THE PLURAL AND THE PLURAL SHALL INCLUDE THE
SINGULAR.  USE OF THE TERM “OR” IS NOT INTENDED TO BE EXCLUSIVE, UNLESS THE
CONTEXT CLEARLY REQUIRES OTHERWISE.

 

14.           THE AWARD.

 

14.1         GRANT AND ISSUANCE OF SHARES.  ON THE DATE OF GRANT, THE
PARTICIPANT SHALL ACQUIRE AND THE COMPANY SHALL ISSUE, SUBJECT TO THE PROVISIONS
OF THIS AGREEMENT, A NUMBER OF SHARES OF STOCK EQUAL TO THE TOTAL NUMBER OF
SHARES (THE “SHARES”).  AS A CONDITION TO THE ISSUANCE OF THE SHARES, THE
PARTICIPANT SHALL EXECUTE AND DELIVER TO THE COMPANY: (A) THE JOINT ESCROW
INSTRUCTIONS IN THE FORM ATTACHED HERETO AS EXHIBIT A AND (B) THE ASSIGNMENT
SEPARATE FROM CERTIFICATE DULY ENDORSED (WITH DATE AND NUMBER OF SHARES BLANK)
IN THE FORM ATTACHED HERETO AS EXHIBIT B.

 

14.2         NO MONETARY PAYMENT REQUIRED.  THE PARTICIPANT IS NOT REQUIRED TO
MAKE ANY MONETARY PAYMENT (OTHER THAN APPLICABLE TAX WITHHOLDING, IF ANY) AS A
CONDITION TO RECEIVING THE SHARES, THE CONSIDERATION FOR WHICH SHALL BE PAST
SERVICES ACTUALLY RENDERED TO A PARTICIPATING COMPANY OR FOR ITS BENEFIT.

 

14.3         CERTIFICATE REGISTRATION.  THE CERTIFICATE FOR THE SHARES SHALL BE
REGISTERED IN THE NAME OF THE PARTICIPANT, OR, IF APPLICABLE, IN THE NAMES OF
THE HEIRS OF THE PARTICIPANT.

 

14.4         ISSUANCE OF SHARES IN COMPLIANCE WITH LAW.  THE ISSUANCE OF THE
SHARES SHALL BE SUBJECT TO COMPLIANCE WITH ALL APPLICABLE REQUIREMENTS OF
FEDERAL, STATE OR FOREIGN LAW WITH RESPECT TO SUCH SECURITIES.  NO SHARES SHALL
BE ISSUED HEREUNDER IF THEIR ISSUANCE WOULD CONSTITUTE A VIOLATION OF ANY
APPLICABLE FEDERAL, STATE OR FOREIGN SECURITIES LAWS OR OTHER LAW OR REGULATIONS
OR THE REQUIREMENTS OF ANY STOCK EXCHANGE OR MARKET SYSTEM UPON WHICH THE STOCK
MAY THEN BE LISTED.  THE INABILITY OF THE COMPANY TO OBTAIN FROM ANY REGULATORY
BODY HAVING JURISDICTION THE AUTHORITY, IF ANY, DEEMED BY THE COMPANY’S LEGAL
COUNSEL TO BE NECESSARY TO THE LAWFUL ISSUANCE OF ANY SHARES SHALL RELIEVE THE
COMPANY OF ANY LIABILITY IN RESPECT OF THE FAILURE TO ISSUE SUCH SHARES AS TO
WHICH SUCH REQUISITE AUTHORITY SHALL NOT HAVE BEEN OBTAINED.  AS A CONDITION TO
THE ISSUANCE OF THE SHARES, THE COMPANY MAY REQUIRE THE PARTICIPANT TO SATISFY
ANY QUALIFICATIONS THAT MAY BE NECESSARY OR APPROPRIATE, TO EVIDENCE COMPLIANCE
WITH ANY APPLICABLE LAW OR REGULATION AND TO MAKE ANY REPRESENTATION OR WARRANTY
WITH RESPECT THERETO AS MAY BE REQUESTED BY THE COMPANY.

 

15.           VESTING OF SHARES.

 

15.1         NORMAL VESTING.  EXCEPT AS PROVIDED IN SECTION 3.2, THE SHARES
SHALL VEST AND BECOME VESTED SHARES AS PROVIDED IN SECTION 1.1(C) ABOVE.  NO
ADDITIONAL SHARES WILL BECOME VESTED SHARES FOLLOWING THE PARTICIPANT’S
TERMINATION OF SERVICE FOR ANY REASON.

 

15.2         ACCELERATION OF VESTING UPON A CHANGE IN CONTROL.  IN THE EVENT OF
A CHANGE IN CONTROL, THE VESTING OF THE SHARES SHALL BE ACCELERATED IN FULL AND
THE TOTAL NUMBER OF SHARES SHALL BE DEEMED VESTED SHARES EFFECTIVE AS OF THE
DATE OF THE CHANGE IN CONTROL, PROVIDED THAT THE PARTICIPANT’S SERVICE HAS NOT
TERMINATED PRIOR TO SUCH DATE.

 

15

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15.3         FEDERAL EXCISE TAX UNDER SECTION 4999 OF THE CODE.

 

(A)           EXCESS PARACHUTE PAYMENT.  IN THE EVENT THAT ANY ACCELERATION OF
VESTING PURSUANT TO THIS AGREEMENT AND ANY OTHER PAYMENT OR BENEFIT RECEIVED OR
TO BE RECEIVED BY THE PARTICIPANT WOULD SUBJECT THE PARTICIPANT TO ANY EXCISE
TAX PURSUANT TO SECTION 4999 OF THE CODE DUE TO THE CHARACTERIZATION OF SUCH
ACCELERATION OF VESTING, PAYMENT OR BENEFIT AS AN EXCESS PARACHUTE PAYMENT UNDER
SECTION 280G OF THE CODE, THE PARTICIPANT MAY ELECT, IN HIS OR HER SOLE
DISCRETION, TO REDUCE THE AMOUNT OF ANY ACCELERATION OF VESTING CALLED FOR UNDER
THIS AGREEMENT IN ORDER TO AVOID SUCH CHARACTERIZATION.

 

(B)           DETERMINATION BY INDEPENDENT ACCOUNTANTS.  TO AID THE PARTICIPANT
IN MAKING ANY ELECTION CALLED FOR UNDER SECTION 3.3(A), UPON THE OCCURRENCE OF
ANY EVENT THAT MIGHT REASONABLY BE ANTICIPATED TO GIVE RISE TO THE APPLICATION
OF SECTION 3.2 (AN “EVENT”), THE COMPANY SHALL PROMPTLY REQUEST A DETERMINATION
IN WRITING BY INDEPENDENT PUBLIC ACCOUNTANTS SELECTED BY THE COMPANY (THE
“ACCOUNTANTS”).  UNLESS THE COMPANY AND THE PARTICIPANT OTHERWISE AGREE IN
WRITING, THE ACCOUNTANTS SHALL DETERMINE AND REPORT TO THE COMPANY AND THE
PARTICIPANT WITHIN TWENTY (20) DAYS OF THE DATE OF THE EVENT THE AMOUNT OF SUCH
ACCELERATION OF VESTING, PAYMENTS AND BENEFITS WHICH WOULD PRODUCE THE GREATEST
AFTER-TAX BENEFIT TO THE PARTICIPANT.  FOR THE PURPOSES OF SUCH DETERMINATION,
THE ACCOUNTANTS MAY RELY ON REASONABLE, GOOD FAITH INTERPRETATIONS CONCERNING
THE APPLICATION OF SECTIONS 280G AND 4999 OF THE CODE.  THE COMPANY AND THE
PARTICIPANT SHALL FURNISH TO THE ACCOUNTANTS SUCH INFORMATION AND DOCUMENTS AS
THE ACCOUNTANTS MAY REASONABLY REQUEST IN ORDER TO MAKE THEIR REQUIRED
DETERMINATION.  THE COMPANY SHALL BEAR ALL FEES AND EXPENSES THE ACCOUNTANTS MAY
REASONABLY CHARGE IN CONNECTION WITH THEIR SERVICES CONTEMPLATED BY THIS SECTION
3.3(B).

 

16.           COMPANY REACQUISITION RIGHT.

 

16.1         GRANT OF COMPANY REACQUISITION RIGHT.  EXCEPT AS OTHERWISE PROVIDED
BY A SUPERSEDING AGREEMENT, IF ANY, IN THE EVENT THAT (A) THE PARTICIPANT’S
SERVICE TERMINATES FOR ANY REASON OR NO REASON, WITH OR WITHOUT CAUSE, OR (B)
THE PARTICIPANT, THE PARTICIPANT’S LEGAL REPRESENTATIVE, OR OTHER HOLDER OF THE
SHARES, ATTEMPTS TO SELL, EXCHANGE, TRANSFER, PLEDGE, OR OTHERWISE DISPOSE OF
(OTHER THAN PURSUANT TO AN OWNERSHIP CHANGE EVENT), INCLUDING, WITHOUT
LIMITATION, ANY TRANSFER TO A NOMINEE OR AGENT OF THE PARTICIPANT, ANY SHARES
WHICH ARE NOT THEN VESTED SHARES (THE “UNVESTED SHARES”), THE COMPANY SHALL
AUTOMATICALLY REACQUIRE THE UNVESTED SHARES, AND THE PARTICIPANT SHALL NOT BE
ENTITLED TO ANY PAYMENT THEREFOR (THE “COMPANY REACQUISITION RIGHT”).

 

16.2         OWNERSHIP CHANGE EVENT.  UPON THE OCCURRENCE OF AN OWNERSHIP CHANGE
EVENT, ANY AND ALL NEW, SUBSTITUTED OR ADDITIONAL SECURITIES OR OTHER PROPERTY
TO WHICH THE PARTICIPANT IS ENTITLED BY REASON OF THE PARTICIPANT’S OWNERSHIP OF
UNVESTED SHARES SHALL BE IMMEDIATELY SUBJECT TO THE COMPANY REACQUISITION RIGHT
AND INCLUDED IN THE TERMS “SHARES,” “STOCK” AND “UNVESTED SHARES” FOR ALL
PURPOSES OF THE COMPANY REACQUISITION RIGHT WITH THE SAME FORCE AND EFFECT AS
THE UNVESTED SHARES IMMEDIATELY PRIOR TO THE OWNERSHIP CHANGE EVENT.  FOR
PURPOSES OF DETERMINING THE NUMBER OF VESTED SHARES FOLLOWING AN OWNERSHIP
CHANGE EVENT, CREDITED SERVICE SHALL INCLUDE ALL SERVICE WITH ANY ENTITY WHICH
IS A PARTICIPATING COMPANY AT THE TIME THE SERVICE IS RENDERED, WHETHER OR NOT
SUCH ENTITY IS A PARTICIPATING COMPANY BOTH BEFORE AND AFTER THE OWNERSHIP
CHANGE EVENT.

 

17.           TAX MATTERS.

 

17.1         TAX WITHHOLDING.

 

(A)           IN GENERAL.  REGARDLESS OF ANY ACTION TAKEN BY THE PARTICIPATING
COMPANY GROUP WITH RESPECT TO ANY OR ALL INCOME TAX, SOCIAL INSURANCE, PAYROLL
TAX, PAYMENT ON ACCOUNT OR OTHER TAX-RELATED WITHHOLDING (“TAX-RELATED ITEMS”),
THE PARTICIPANT ACKNOWLEDGES THAT THE ULTIMATE LIABILITY FOR ALL TAX-RELATED
ITEMS LEGALLY DUE BY THE PARTICIPANT IS AND REMAINS THE PARTICIPANT’S
RESPONSIBILITY AND THAT THE PARTICIPATING COMPANY GROUP (I) MAKES NO
REPRESENTATIONS OR UNDERTAKINGS REGARDING THE TREATMENT OF ANY TAX-RELATED ITEMS
IN CONNECTION WITH ANY ASPECT OF THE AWARD, INCLUDING THE GRANT OR VESTING OF
THE AWARD, THE SUBSEQUENT SALE OF SHARES ACQUIRED PURSUANT TO THE AWARD, OR THE
RECEIPT OF ANY DIVIDENDS AND (II) DOES NOT COMMIT TO STRUCTURE THE TERMS OF THE
GRANT OR ANY OTHER ASPECT OF THE AWARD TO REDUCE OR ELIMINATE THE PARTICIPANT’S
LIABILITY FOR TAX-RELATED ITEMS.  THE PARTICIPANT SHALL PAY OR MAKE ADEQUATE
ARRANGEMENTS SATISFACTORY TO THE PARTICIPATING COMPANY GROUP TO SATISFY ALL
WITHHOLDING OBLIGATIONS OF THE PARTICIPATING COMPANY GROUP.  IN THIS REGARD, AT
THE TIME THAT THIS AGREEMENT IS EXECUTED, OR AT ANY TIME THEREAFTER AS REQUESTED
BY A PARTICIPATING COMPANY, THE PARTICIPANT HEREBY AUTHORIZES WITHHOLDING OF ALL
APPLICABLE TAX-RELATED ITEMS FROM PAYROLL AND ANY OTHER AMOUNTS PAYABLE TO THE
PARTICIPANT, AND

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OTHERWISE AGREES TO MAKE ADEQUATE PROVISION FOR WITHHOLDING OF ALL APPLICABLE
TAX-RELATED ITEM WITHHOLDING OBLIGATIONS OF THE PARTICIPATING COMPANY, IF ANY,
WHICH ARISE IN CONNECTION WITH THE AWARD, INCLUDING, WITHOUT LIMITATION,
OBLIGATIONS ARISING UPON (A) THE TRANSFER OF SHARES TO THE PARTICIPANT, (B) THE
LAPSING OF ANY RESTRICTION WITH RESPECT TO ANY SHARES, (C) THE FILING OF AN
ELECTION TO RECOGNIZE TAX LIABILITY, OR (D) THE TRANSFER BY THE PARTICIPANT OF
ANY SHARES.  ALTERNATIVELY, OR IN ADDITION, IF PERMISSIBLE UNDER APPLICABLE LAW,
THE PARTICIPATING COMPANY GROUP MAY SELL OR ARRANGE FOR THE SALE OF SHARES
ACQUIRED BY THE PARTICIPANT TO MEET THE WITHHOLDING OBLIGATION OF TAX-RELATED
ITEMS.  FINALLY, THE PARTICIPANT SHALL PAY TO THE PARTICIPATING COMPANY GROUP
ANY AMOUNT OF THE TAX-RELATED ITEMS THAT THE PARTICIPATING COMPANY GROUP MAY BE
REQUIRED TO WITHHOLD AS A RESULT OF THE PARTICIPANT’S PARTICIPATION IN THE PLAN
THAT CANNOT BE SATISFIED BY THE MEANS PREVIOUSLY DESCRIBED.  THE COMPANY SHALL
HAVE NO OBLIGATION TO DELIVER THE SHARES OR TO RELEASE ANY SHARES FROM AN ESCROW
ESTABLISHED PURSUANT TO THIS AGREEMENT UNTIL THE OBLIGATIONS IN CONNECTION WITH
THE TAX-RELATED ITEMS DESCRIBED IN THIS SECTION HAVE BEEN SATISFIED BY THE
PARTICIPANT.

 

(B)           WITHHOLDING IN SHARES.  SUBJECT TO APPROVAL BY THE COMPANY, IN ITS
DISCRETION, THE PARTICIPANT MAY SATISFY ALL OR ANY PORTION OF THE PARTICIPATING
COMPANY’S TAX-RELATED ITEM WITHHOLDING OBLIGATIONS BY REQUESTING THE COMPANY TO
WITHHOLD A NUMBER OF WHOLE, VESTED SHARES OTHERWISE DELIVERABLE TO THE
PARTICIPANT PURSUANT TO THIS AGREEMENT OR BY TENDERING TO THE COMPANY A NUMBER
OF WHOLE, VESTED SHARES OF STOCK ACQUIRED PURSUANT TO THIS AGREEMENT OR
OTHERWISE HAVING IN ANY SUCH CASE A FAIR MARKET VALUE, AS DETERMINED BY THE
COMPANY AS OF THE DATE ON WHICH THE TAX-RELATED ITEM WITHHOLDING OBLIGATIONS
ARISE, NOT IN EXCESS OF THE AMOUNT OF SUCH TAX WITHHOLDING OBLIGATIONS
DETERMINED BY THE APPLICABLE MINIMUM STATUTORY WITHHOLDING RATES.  ANY ADVERSE
CONSEQUENCES TO THE PARTICIPANT RESULTING FROM THE PROCEDURE PERMITTED UNDER
THIS SECTION, INCLUDING, WITHOUT LIMITATION, TAX CONSEQUENCES, SHALL BE THE SOLE
RESPONSIBILITY OF THE PARTICIPANT.

 

17.2         ELECTION UNDER SECTION 83(B) OF THE CODE.

 

(A)           THE PARTICIPANT UNDERSTANDS THAT SECTION 83 OF THE CODE TAXES AS
ORDINARY INCOME THE DIFFERENCE BETWEEN THE AMOUNT PAID FOR THE SHARES, IF
ANYTHING, AND THE FAIR MARKET VALUE OF THE SHARES AS OF THE DATE ON WHICH THE
SHARES ARE “SUBSTANTIALLY VESTED,” WITHIN THE MEANING OF SECTION 83.  IN THIS
CONTEXT, “SUBSTANTIALLY VESTED” MEANS THAT THE RIGHT OF THE COMPANY TO REACQUIRE
THE SHARES PURSUANT TO THE COMPANY REACQUISITION RIGHT HAS LAPSED.  THE
PARTICIPANT UNDERSTANDS THAT HE OR SHE MAY ELECT TO HAVE HIS OR HER TAXABLE
INCOME DETERMINED AT THE TIME HE OR SHE ACQUIRES THE SHARES RATHER THAN WHEN AND
AS THE COMPANY REACQUISITION RIGHT LAPSES BY FILING AN ELECTION UNDER SECTION
83(B) OF THE CODE WITH THE INTERNAL REVENUE SERVICE NO LATER THAN THIRTY (30)
DAYS AFTER THE DATE OF ACQUISITION OF THE SHARES.  THE PARTICIPANT UNDERSTANDS
THAT FAILURE TO MAKE A TIMELY FILING UNDER SECTION 83(B) WILL RESULT IN HIS OR
HER RECOGNITION OF ORDINARY INCOME, AS THE COMPANY REACQUISITION RIGHT LAPSES,
ON THE DIFFERENCE BETWEEN THE PURCHASE PRICE, IF ANYTHING, AND THE FAIR MARKET
VALUE OF THE SHARES AT THE TIME SUCH RESTRICTIONS LAPSE.  THE PARTICIPANT
FURTHER UNDERSTANDS, HOWEVER, THAT IF SHARES WITH RESPECT TO WHICH AN ELECTION
UNDER SECTION 83(B) HAS BEEN MADE ARE FORFEITED TO THE COMPANY PURSUANT TO ITS
COMPANY REACQUISITION RIGHT, SUCH FORFEITURE WILL BE TREATED AS A SALE ON WHICH
THERE IS REALIZED A LOSS EQUAL TO THE EXCESS (IF ANY) OF THE AMOUNT PAID (IF
ANY) BY THE PARTICIPANT FOR THE FORFEITED SHARES OVER THE AMOUNT REALIZED (IF
ANY) UPON THEIR FORFEITURE.  IF THE PARTICIPANT HAS PAID NOTHING FOR THE
FORFEITED SHARES AND HAS RECEIVED NO PAYMENT UPON THEIR FORFEITURE, THE
PARTICIPANT UNDERSTANDS THAT HE OR SHE WILL BE UNABLE TO RECOGNIZE ANY LOSS ON
THE FORFEITURE OF THE SHARES EVEN THOUGH THE PARTICIPANT INCURRED A TAX
LIABILITY BY MAKING AN ELECTION UNDER SECTION 83(B).

 

(B)           THE PARTICIPANT UNDERSTANDS THAT HE OR SHE SHOULD CONSULT WITH HIS
OR HER TAX ADVISOR REGARDING THE ADVISABILITY OF FILING WITH THE INTERNAL
REVENUE SERVICE AN ELECTION UNDER SECTION 83(B) OF THE CODE, WHICH MUST BE FILED
NO LATER THAN THIRTY (30) DAYS AFTER THE DATE OF THE ACQUISITION OF THE SHARES
PURSUANT TO THIS AGREEMENT.  FAILURE TO FILE AN ELECTION UNDER SECTION 83(B), IF
APPROPRIATE, MAY RESULT IN ADVERSE TAX CONSEQUENCES TO THE PARTICIPANT.  THE
PARTICIPANT ACKNOWLEDGES THAT HE OR SHE HAS BEEN ADVISED TO CONSULT WITH A TAX
ADVISOR REGARDING THE TAX CONSEQUENCES TO THE PARTICIPANT OF THE ACQUISITION OF
SHARES HEREUNDER.  ANY ELECTION UNDER SECTION 83(B) THE PARTICIPANT WISHES TO
MAKE MUST BE FILED NO LATER THAN 30 DAYS AFTER THE DATE ON WHICH THE PARTICIPANT
ACQUIRES THE SHARES.  THIS TIME PERIOD CANNOT BE EXTENDED.  THE PARTICIPANT
ACKNOWLEDGES THAT TIMELY FILING OF A SECTION 83(B) ELECTION IS THE PARTICIPANT’S
SOLE RESPONSIBILITY, EVEN IF THE PARTICIPANT REQUESTS THE COMPANY OR ITS
REPRESENTATIVE TO FILE SUCH ELECTION ON HIS OR HER BEHALF.

 

(C)           THE PARTICIPANT WILL NOTIFY THE COMPANY IN WRITING IF THE
PARTICIPANT FILES AN ELECTION PURSUANT TO SECTION 83(B) OF THE CODE.  THE
COMPANY INTENDS, IN THE EVENT IT DOES NOT RECEIVE FROM THE

 

17

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PARTICIPANT EVIDENCE OF SUCH FILING, TO CLAIM A TAX DEDUCTION FOR ANY AMOUNT
WHICH WOULD OTHERWISE BE TAXABLE TO THE PARTICIPANT IN THE ABSENCE OF SUCH AN
ELECTION.

18.           ESCROW.

 

18.1         ESTABLISHMENT OF ESCROW.  TO ENSURE THAT SHARES SUBJECT TO THE
COMPANY REACQUISITION RIGHT WILL BE AVAILABLE FOR REACQUISITION, THE PARTICIPANT
AGREES TO DELIVER TO AND DEPOSIT WITH AN ESCROW AGENT DESIGNATED BY THE COMPANY
THE CERTIFICATE EVIDENCING THE SHARES, TOGETHER WITH AN ASSIGNMENT SEPARATE FROM
CERTIFICATE WITH RESPECT TO SUCH CERTIFICATE DULY ENDORSED (WITH DATE AND NUMBER
OF SHARES BLANK) IN THE FORM ATTACHED TO THIS AGREEMENT AS EXHIBIT B, TO BE HELD
BY THE AGENT UNDER THE TERMS AND CONDITIONS OF THE JOINT ESCROW INSTRUCTIONS IN
THE FORM ATTACHED TO THIS AGREEMENT AS EXHIBIT A (THE “ESCROW”).  THE COMPANY
SHALL BEAR THE EXPENSES OF THE ESCROW.

 

18.2         DELIVERY OF SHARES TO PARTICIPANT.  WHENEVER THE PARTICIPANT OR THE
PARTICIPANT’S LEGAL REPRESENTATIVE PROPOSES TO SELL, EXCHANGE, TRANSFER, PLEDGE
OR OTHERWISE DISPOSE OF (OTHER THAN PURSUANT TO AN OWNERSHIP CHANGE EVENT) ANY
SHARES SUBJECT TO THE ESCROW, THE PARTICIPANT SHALL SO NOTIFY THE COMPANY.  AS
SOON AS PRACTICABLE THEREAFTER, THE COMPANY SHALL DETERMINE, IN ITS SOLE
DISCRETION, WHETHER (A) SUCH PROPOSED DISPOSITION WOULD NOT CAUSE THE COMPANY TO
AUTOMATICALLY REACQUIRE SUCH SHARES PURSUANT TO THE COMPANY REACQUISITION RIGHT
AND (B) THE PARTICIPANT HAS MADE ADEQUATE PROVISION FOR THE TAX WITHHOLDING
OBLIGATIONS, IF ANY, PURSUANT TO SECTION 5.  IF BOTH CONDITIONS (A) AND (B) SET
FORTH IN THE PRECEDING SENTENCE ARE SATISFIED, THE COMPANY SHALL, AS SOON AS
PRACTICABLE, SO NOTIFY THE PARTICIPANT AND GIVE TO THE ESCROW AGENT A WRITTEN
NOTICE DIRECTING THE ESCROW AGENT TO DELIVER SUCH SHARES TO THE PARTICIPANT.  AS
SOON AS PRACTICABLE AFTER RECEIPT OF SUCH NOTICE, THE ESCROW AGENT SHALL DELIVER
TO THE PARTICIPANT THE SHARES SPECIFIED IN SUCH NOTICE, AND THE ESCROW SHALL
TERMINATE WITH RESPECT TO SUCH SHARES.

 

19.           NATURE OF THE AWARD.

 

                                In accepting the Award, the Participant
acknowledges that:

 

19.1         THE PLAN IS ESTABLISHED VOLUNTARILY BY THE COMPANY; IT IS
DISCRETIONARY IN NATURE AND IT MAY BE MODIFIED, AMENDED, SUSPENDED OR TERMINATED
BY THE COMPANY AT ANY TIME, UNLESS OTHERWISE PROVIDED IN THE PLAN AND THIS
AGREEMENT;

 

19.2         THE GRANT OF THE AWARD IS VOLUNTARY AND OCCASIONAL AND DOES NOT
CREATE ANY CONTRACTUAL OR OTHER RIGHT TO RECEIVE FUTURE GRANTS OF AWARDS, OR
BENEFITS IN LIEU OF AWARDS, EVEN IF AWARDS HAVE BEEN GRANTED REPEATEDLY IN THE
PAST;

 

19.3         ALL DECISIONS WITH RESPECT TO FUTURE AWARD GRANTS, IF ANY, WILL BE
AT THE SOLE DISCRETION OF THE COMPANY;

 

19.4         THE PARTICIPANT’S PARTICIPATION IN THE PLAN SHALL NOT CREATE A
RIGHT TO FURTHER EMPLOYMENT WITH THE PARTICIPATING COMPANY GROUP AND SHALL NOT
INTERFERE WITH THE ABILITY OF THE PARTICIPATING COMPANY GROUP TO TERMINATE THE
PARTICIPANT’S EMPLOYMENT RELATIONSHIP AT ANY TIME WITH OR WITHOUT CAUSE;

 

19.5         THE PARTICIPANT IS VOLUNTARILY PARTICIPATING IN THE PLAN;

 

19.6         THE AWARD IS NOT PART OF NORMAL OR EXPECTED COMPENSATION OR SALARY
FOR ANY PURPOSE, INCLUDING, BUT NOT LIMITED TO, CALCULATING ANY SEVERANCE,
RESIGNATION, TERMINATION, REDUNDANCY, END-OF-SERVICE PAYMENTS, BONUSES,
LONG-SERVICE AWARDS, PENSION OR RETIREMENT BENEFITS OR SIMILAR PAYMENTS;

 

19.7         IN THE EVENT THAT THE PARTICIPANT IS NOT AN EMPLOYEE OF THE
COMPANY, THE AWARD GRANT WILL NOT BE INTERPRETED TO FORM AN EMPLOYMENT CONTRACT
OR RELATIONSHIP WITH THE COMPANY; AND FURTHERMORE, THE AWARD GRANT WILL NOT BE
INTERPRETED TO FORM AN EMPLOYMENT CONTRACT WITH THE OTHER MEMBERS OF THE
PARTICIPATING COMPANY GROUP;

 

19.8         THE FUTURE VALUE OF THE SHARES IS UNKNOWN AND CANNOT BE PREDICTED
WITH CERTAINTY; AND

 

19.9         NO CLAIM OR ENTITLEMENT TO COMPENSATION OR DAMAGES ARISES FROM
TERMINATION OF THE AWARD OR DIMINUTION IN VALUE OF THE AWARD RESULTING FROM
TERMINATION OF THE PARTICIPANT’S SERVICE WITH THE

 

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PARTICIPATING COMPANY GROUP (FOR ANY REASON WHETHER OR NOT IN BREACH OF
APPLICABLE LABOR LAWS), AND THE PARTICIPANT IRREVOCABLY RELEASES THE
PARTICIPATING COMPANY GROUP FROM ANY SUCH CLAIM THAT MAY ARISE.  IF,
NOTWITHSTANDING THE FOREGOING, ANY SUCH CLAIM IS FOUND BY A COURT OF COMPETENT
JURISDICTION TO HAVE ARISEN THEN, BY SIGNING THIS AGREEMENT, YOU SHALL BE DEEMED
IRREVOCABLY TO HAVE WAIVED YOUR ENTITLEMENT TO PURSUE SUCH A CLAIM.

20.           ADJUSTMENTS FOR CHANGES IN CAPITAL STRUCTURE.

 

                                In the event of any change in the Stock through
merger, consolidation, reorganization, reincorporation, recapitalization,
reclassification, stock dividend, stock split, reverse stock split, split-up,
split-off, spin-off, combination of shares, exchange of shares or similar change
in the capital structure of the Company, appropriate adjustments shall be made
in the number and class of shares subject to this Agreement.  Any and all new,
substituted or additional securities or other property to which Participant is
entitled by reason of his or her ownership of the Shares will be immediately
subject to the provisions of this Agreement and the Escrow on the same basis as
all Shares originally acquired hereunder and will be included in the terms
“Shares” and “Stock” for all purposes of this Agreement and the Escrow with the
same force and effect as the Shares presently subject thereto.  The adjustments
determined by the Committee pursuant to this Section shall be final, binding and
conclusive.

 

21.           LEGENDS.

 

                                The Company may at any time place legends
referencing the Company Reacquisition Right and any applicable federal, state or
foreign securities law restrictions on all certificates representing the
Shares.  The Participant shall, at the request of the Company, promptly present
to the Company any and all certificates representing the Shares in the
possession of the Participant in order to carry out the provisions of this
Section.  Unless otherwise specified by the Company, legends placed on such
certificates may include, but shall not be limited to, the following:

 

“THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO RESTRICTIONS SET
FORTH IN AN AGREEMENT BETWEEN THIS CORPORATION AND THE REGISTERED HOLDER, OR HIS
PREDECESSOR IN INTEREST, A COPY OF WHICH IS ON FILE AT THE PRINCIPAL OFFICE OF
THIS CORPORATION.”

 

22.           TRANSFERS IN VIOLATION OF AGREEMENT.

 

                                No Shares may be sold, exchanged, transferred
(including, without limitation, any transfer to a nominee or agent of the
Participant), assigned, pledged, hypothecated or otherwise disposed of,
including by operation of law, in any manner which violates any of the
provisions of this Agreement and, except pursuant to an Ownership Change Event,
until the date on which such shares become Vested Shares, and any such attempted
disposition shall be void.  The Company shall not be required (a) to transfer on
its books any Shares which will have been transferred in violation of any of the
provisions set forth in this Agreement or (b) to treat as owner of such Shares
or to accord the right to vote as such owner or to pay dividends to any
transferee to whom such Shares will have been so transferred.  In order to
enforce its rights under this Section, the Company shall be authorized to give a
stop transfer instruction with respect to the Shares to the Company’s transfer
agent.

 

23.           RIGHTS AS A STOCKHOLDER.

 

                                The Participant shall have no rights as a
stockholder with respect to any Shares subject to the Award until the date of
the issuance of a certificate for such Shares (as evidenced by the appropriate
entry on the books of the Company or of a duly authorized transfer agent of the
Company).  No adjustment shall be made for dividends, distributions or other
rights for which the record date is prior to the date such certificate is
issued, except as provided in Section 8.  Subject the provisions of this
Agreement, the Participant shall exercise all rights and privileges of a
stockholder of the Company with respect to Shares deposited in the Escrow
pursuant to Section 6.

 

24.           RIGHTS AS EMPLOYEE OR CONSULTANT.

 

                                If the Participant is an Employee, the
Participant understands and acknowledges that, except as otherwise provided in a
separate, written employment agreement between a Participating Company and the
Participant, the Participant’s employment is “at will” and is for no specified
term.  Nothing in this Agreement shall

 

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confer upon the Participant any right to continue in the Service of a
Participating Company or interfere in any way with any right of the
Participating Company Group to terminate the Participant’s Service at any time.

 

25.           MISCELLANEOUS PROVISIONS.

 

25.1         ADMINISTRATION.  ALL QUESTIONS OF INTERPRETATION CONCERNING THIS
AGREEMENT SHALL BE DETERMINED BY THE COMMITTEE.  ALL DETERMINATIONS BY THE
COMMITTEE SHALL BE FINAL AND BINDING UPON ALL PERSONS HAVING AN INTEREST IN THE
AWARD.  ANY OFFICER SHALL HAVE THE AUTHORITY TO ACT ON BEHALF OF THE COMPANY
WITH RESPECT TO ANY MATTER, RIGHT, OBLIGATION, OR ELECTION WHICH IS THE
RESPONSIBILITY OF OR WHICH IS ALLOCATED TO THE COMPANY HEREIN, PROVIDED THE
OFFICER HAS APPARENT AUTHORITY WITH RESPECT TO SUCH MATTER, RIGHT, OBLIGATION,
OR ELECTION.

 

25.2         TERMINATION OR AMENDMENT.  THE COMMITTEE MAY TERMINATE OR AMEND THE
PLAN OR THIS AGREEMENT AT ANY TIME; PROVIDED, HOWEVER, THAT NO SUCH TERMINATION
OR AMENDMENT MAY ADVERSELY AFFECT THE PARTICIPANT’S RIGHTS UNDER THIS AGREEMENT
WITHOUT THE CONSENT OF THE PARTICIPANT UNLESS SUCH TERMINATION OR AMENDMENT IS
NECESSARY TO COMPLY WITH APPLICABLE LAW OR GOVERNMENT REGULATION.  NO AMENDMENT
OR ADDITION TO THIS AGREEMENT SHALL BE EFFECTIVE UNLESS IN WRITING.

 

25.3         BINDING EFFECT.  THIS AGREEMENT SHALL INURE TO THE BENEFIT OF THE
SUCCESSORS AND ASSIGNS OF THE COMPANY AND, SUBJECT TO THE RESTRICTIONS ON
TRANSFER SET FORTH HEREIN, BE BINDING UPON THE PARTICIPANT AND THE PARTICIPANT’S
HEIRS, EXECUTORS, ADMINISTRATORS, SUCCESSORS AND ASSIGNS.

 

25.4         FRACTIONAL SHARES.  THE COMPANY SHALL NOT BE REQUIRED TO ISSUE
FRACTIONAL SHARES IN CONNECTION WITH THE AWARD.

 

25.5         NONTRANSFERABILITY OF THE AWARD.  THE RIGHT TO ACQUIRE SHARES
PURSUANT TO THE AWARD MAY NOT BE ASSIGNED OR TRANSFERRED IN ANY MANNER EXCEPT BY
WILL OR BY THE LAWS OF DESCENT AND DISTRIBUTION.  DURING THE LIFETIME OF THE
PARTICIPANT, ALL RIGHTS WITH RESPECT TO THIS AWARD SHALL BE EXERCISABLE ONLY BY
THE PARTICIPANT.

 

25.6         FURTHER INSTRUMENTS.  THE PARTIES HERETO AGREE TO EXECUTE SUCH
FURTHER INSTRUMENTS AND TO TAKE SUCH FURTHER ACTION AS MAY REASONABLY BE
NECESSARY TO CARRY OUT THE INTENT OF THIS AGREEMENT.

 

25.7         DELIVERY OF DOCUMENTS AND NOTICES.  ANY DOCUMENT RELATING TO
PARTICIPATING IN THE PLAN AND/OR NOTICE REQUIRED OR PERMITTED HEREUNDER SHALL BE
GIVEN IN WRITING AND SHALL BE DEEMED EFFECTIVELY GIVEN (EXCEPT TO THE EXTENT
THAT THIS AGREEMENT PROVIDES FOR EFFECTIVENESS ONLY UPON ACTUAL RECEIPT OF SUCH
NOTICE) UPON PERSONAL DELIVERY, ELECTRONIC DELIVERY, OR UPON DEPOSIT IN THE U.S.
POST OFFICE OR FOREIGN POSTAL SERVICE, BY REGISTERED OR CERTIFIED MAIL, WITH
POSTAGE AND FEES PREPAID, ADDRESSED TO THE OTHER PARTY AT THE ADDRESS SHOWN
BELOW THAT PARTY’S SIGNATURE OR AT SUCH OTHER ADDRESS AS SUCH PARTY MAY
DESIGNATE IN WRITING FROM TIME TO TIME TO THE OTHER PARTY.

 

(A)           DESCRIPTION OF ELECTRONIC DELIVERY.  THE PLAN DOCUMENTS, WHICH MAY
INCLUDE BUT DO NOT NECESSARILY INCLUDE: THE PLAN PROSPECTUS, THIS AGREEMENT AND
U.S. FINANCIAL REPORTS OF THE COMPANY, MAY BE DELIVERED TO THE PARTICIPANT
ELECTRONICALLY.  SUCH MEANS OF DELIVERY MAY INCLUDE BUT DO NOT NECESSARILY
INCLUDE THE DELIVERY OF A LINK TO A COMPANY INTRANET OR THE INTERNET SITE OF A
THIRD PARTY INVOLVED IN ADMINISTERING THE PLAN, THE DELIVERY OF THE DOCUMENT VIA
E-MAIL OR SUCH OTHER DELIVERY DETERMINED AT THE COMMITTEE’S DISCRETION.

 

(B)           CONSENT TO ELECTRONIC DELIVERY.  THE PARTICIPANT ACKNOWLEDGES THAT
THE PARTICIPANT HAS READ SECTION 13.7 OF THIS AGREEMENT AND CONSENTS TO THE
ELECTRONIC DELIVERY OF THE PLAN DOCUMENTS, AS DESCRIBED IN SECTION 13.7(A) OF
THIS AGREEMENT.  THE PARTICIPANT ACKNOWLEDGES THAT HE OR SHE MAY RECEIVE FROM
THE COMPANY A PAPER COPY OF ANY DOCUMENTS DELIVERED ELECTRONICALLY AT NO COST IF
THE PARTICIPANT CONTACTS THE COMPANY BY TELEPHONE, THROUGH A POSTAL SERVICE OR
ELECTRONIC MAIL AT EQUITY@ADOBE.COM.  THE PARTICIPANT FURTHER ACKNOWLEDGES THAT
THE PARTICIPANT WILL BE PROVIDED WITH A PAPER COPY OF ANY DOCUMENTS DELIVERED
ELECTRONICALLY IF ELECTRONIC DELIVERY FAILS; SIMILARLY, THE PARTICIPANT
UNDERSTANDS THAT THE PARTICIPANT MUST PROVIDE THE COMPANY OR ANY DESIGNATED
THIRD PARTY WITH A PAPER COPY OF ANY DOCUMENTS DELIVERED ELECTRONICALLY IF
ELECTRONIC DELIVERY FAILS.  ALSO, THE PARTICIPANT UNDERSTANDS THAT THE
PARTICIPANT’S CONSENT MAY BE REVOKED OR CHANGED, INCLUDING ANY CHANGE IN THE
ELECTRONIC MAIL ADDRESS TO WHICH DOCUMENTS ARE DELIVERED (IF PARTICIPANT HAS
PROVIDED AN ELECTRONIC MAIL ADDRESS), AT ANY TIME BY NOTIFYING THE COMPANY OF
SUCH REVISED OR REVOKED CONSENT BY TELEPHONE, POSTAL SERVICE OR ELECTRONIC MAIL
AT EQUITY@ADOBE.COM.  FINALLY, THE PARTICIPANT UNDERSTANDS THAT HE OR SHE IS NOT
REQUIRED TO CONSENT TO ELECTRONIC DELIVERY.

 

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25.8         DATA PRIVACY CONSENT.  THE PARTICIPANT HEREBY EXPLICITLY AND
UNAMBIGUOUSLY CONSENTS TO THE COLLECTION, USE AND TRANSFER, IN ELECTRONIC OR
OTHER FORM, OF THE PARTICIPANT’S PERSONAL DATA AS DESCRIBED IN THIS DOCUMENT BY
AND AMONG THE MEMBERS OF THE PARTICIPATING COMPANY GROUP FOR THE EXCLUSIVE
PURPOSE OF IMPLEMENTING, ADMINISTERING AND MANAGING THE PARTICIPANT’S
PARTICIPATION IN THE PLAN.

 

                                The Participant understands that the Company and
the Participating Company Group hold certain personal information about the
Participant, including, but not limited to, the Participant’s name, home address
and telephone number, date of birth, social insurance number or other
identification number, salary, nationality, job title, any shares of Stock or
directorships held in the Company, details of all Awards or any other
entitlement to shares of Stock awarded, canceled, exercised, vested, unvested or
outstanding in the Participant’s favor, for the purpose of implementing,
administering and managing the Plan (“Data”).  The Participant understands that
Data may be transferred to any third parties assisting in the implementation,
administration and management of the Plan, that these recipients may be located
in the Participant’s country or elsewhere, and that the recipient’s country may
have different data privacy laws and protections than the Participant’s
country.  The Participant understands that he or she may request a list with the
names and addresses of any potential recipients of the Data by contacting the
Participant’s local human resources representative.  The Participant authorizes
the recipients to receive, possess, use, retain and transfer the Data, in
electronic or other form, for the purposes of implementing, administering and
managing the Participant’s participation in the Plan, including any requisite
transfer of such Data as may be required to a broker or other third party with
whom the Participant may elect to deposit any shares of Stock acquired pursuant
to the Award.  The Participant understands that Data will be held only as long
as is necessary to implement, administer and manage the Participant’s
participation in the Plan.  The Participant understands that he or she may, at
any time, view Data, request additional information about the storage and
processing of Data, require any necessary amendments to Data or refuse or
withdraw the consents herein, in any case without cost, by contacting in writing
the Participant’s local human resources representative.  The Participant
understands, however, that refusing or withdrawing the Participant’s consent may
affect the Participant’s ability to participate in the Plan.  For more
information on the consequences of the Participant’s refusal to consent or
withdrawal of consent, the Participant understands that he or she may contact
the Participant’s local human resources representative.

 

25.9         INTEGRATED AGREEMENT.  THIS AGREEMENT, TOGETHER WITH THE
SUPERSEDING AGREEMENT, IF ANY, CONSTITUTES THE ENTIRE UNDERSTANDING AND
AGREEMENT OF THE PARTICIPANT AND THE PARTICIPATING COMPANY GROUP WITH RESPECT TO
THE SUBJECT MATTER CONTAINED HEREIN AND SUPERSEDES ANY PRIOR AGREEMENTS,
UNDERSTANDINGS, RESTRICTIONS, REPRESENTATIONS, OR WARRANTIES AMONG THE
PARTICIPANT AND THE COMPANY WITH RESPECT TO SUCH SUBJECT MATTER OTHER THAN THOSE
AS SET FORTH OR PROVIDED FOR HEREIN.

 

25.10       APPLICABLE LAW.  THE AGREEMENT SHALL BE GOVERNED BY THE LAWS OF THE
STATE OF CALIFORNIA AS SUCH LAWS ARE APPLIED TO AGREEMENTS BETWEEN CALIFORNIA
RESIDENTS ENTERED INTO AND TO BE PERFORMED ENTIRELY WITHIN THE STATE OF
CALIFORNIA.

 

25.11       COUNTERPARTS.  THE NOTICE MAY BE EXECUTED IN COUNTERPARTS, EACH OF
WHICH SHALL BE DEEMED AN ORIGINAL, BUT ALL OF WHICH TOGETHER SHALL CONSTITUTE
ONE AND THE SAME INSTRUMENT.

 

 

ADOBE SYSTEMS INCORPORATED

 

 

 

 

 

By:

 

 

 

Murray J. Demo

 

Title:

Senior Vice President, Chief Financial Officer

 

 

 

 

 

Address:

345 Park Avenue
San Jose, CA 95110-2704

 

 

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The Participant represents that the Participant is familiar with the terms and
provisions of this Agreement and hereby accepts the Award subject to all of the
terms and provisions thereof.  The Participant hereby agrees to accept as
binding, conclusive and final all decisions or interpretations of the Committee
upon any questions arising under this Agreement.

 

 

 

 

PARTICIPANT

 

 

 

 

Date:

 

 

 

 

 

 

Signature

 

 

 

 

 

 

 

 

 

 

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