Exhibit 10.2

 

POLYCOM, INC.

 

EMPLOYEE STOCK PURCHASE PLAN

 

Section 1

Purpose

 

Polycom, Inc. hereby establishes the Polycom, Inc. Employee Stock Purchase Plan,
effective as of May 25, 2005, in order to provide eligible employees of the
Company and its participating Affiliates 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. 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 nor representation to
maintain such qualification. In addition, this Plan document authorizes the
grant of options under a Non-423(b) Plan which do not qualify under Section
423(b) of the Code pursuant to rules, procedures or sub-plans adopted by the
Board (or its designate) designed to achieve desired tax or other objectives.

 

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 “Affiliate” means any (i) Subsidiary, and (ii) any other entity other than
the Company in an unbroken chain of entities beginning with the Company if, at
the time of the granting of the option, each of the entities, other than the
last entity in the unbroken chain, owns or controls 50 percent or more of the
total ownership interest in one of the other entities in such chain. For
purposes of the Code Section 423(b) Plan, an Affiliate solely means a
Subsidiary.

 

2.3 “Board” means the Board of Directors of the Company.

 

2.4 “Change in Control” means the occurrence of any of the following events: (a)
any “person” (as such term is used in Sections 13(d) and 14(d) of the 1934 Act)
becomes the “beneficial owner” (as defined in Rule 13d-3 of the 1934 Act),
directly or indirectly, of securities of the Company representing fifty percent
(50%) or more of the total voting power represented by the Company’s then
outstanding voting securities; (b) the consummation of the sale or disposition
by the Company of all or substantially all of the Company’s assets; (c) a change
in the composition of the Board occurring within a two-year period, as a result
of which fewer than a majority of the directors are Incumbent Directors; or (d)
the consummation of a merger or consolidation of the Company with any other
corporation, other than a merger or consolidation which would result in the
voting securities of the Company outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by being converted
into voting securities of the surviving entity or its parent) at least fifty
percent (50%) of the total voting power represented by the voting securities of
the Company or such surviving entity or its parent outstanding immediately after
such merger or consolidation. “Incumbent Directors” means directors who either
(A) are Directors as of the effective date of the Plan, or (B) are elected, or
nominated for election, to the Board with the affirmative votes of at least a
majority of the Directors at the time of such election or nomination (but will
not include an individual whose election or nomination is in connection with an
actual or threatened proxy contest relating to the election of directors to the
Company).

 

2.5 “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.

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2.6 “Code Section 423(b) Plan” means an employee stock purchase plan that is
designed to meet the requirements set forth in Section 423(b) of the Code, as
amended. Any provision of the Code Section 423(b) Plan that 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). Furthermore, the provisions of the Code Section 423(b) Plan shall be
construed, administered and enforced in accordance with Section 423(b).

 

2.7 “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 Compensation Committee
of the Board.

 

2.8 “Common Stock” means the common stock (0.0005 per value per share) of the
Company.

 

2.9 “Company” means Polycom, Inc., a Delaware corporation.

 

2.10 “Compensation” means the sum of a Participant’s (a) base salary or regular
wages (including sick pay and vacation pay) and (b) overtime payments, bonuses,
commissions, profit-sharing distributions and other incentive-type payments (in
each case, to the extent paid in cash). Compensation shall exclude any
contributions (other than under code Section 125 or 401(k) arrangements) made by
Employers on the Participant’s behalf to any deferred compensation plan or
welfare benefit program that may exist from time to time. The Committee may
establish, in its discretion and on a uniform and nondiscriminatory basis, a
different definition of Compensation prior to an Enrollment Date for all options
to be granted on such Enrollment Date, which definition may vary among
Participants who are employed by the Company or different Affiliates and/or who
are outside the United States.

 

2.11 “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 Affiliate of the Company (including stock attributed to
such Employee pursuant to Section 424(d) of the Code), or (b) as provided in
this Section 2.9. Prior to an Enrollment Date for all options to be granted on
such Enrollment Date, the Committee may determine from time to time, in its
discretion and on a uniform and nondiscriminatory basis, that an Employee shall
not be an Eligible Employee if he or she: (1) has not completed at least two
years of service since his or her last hire date (or such lesser period of time
as may be determined by the Committee in its discretion), (2) customarily works
not more than 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 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, provided the exclusion of Employees in such categories is not prohibited
under applicable local law. 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 by the Employer, except that if the period of
leave exceeds ninety 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.

 

2.12 “Employee” means an individual who is a common-law employee of any Employer
as reflected on the payroll records of the Employer on the Enrollment Date,
regardless of whether such employee is so employed at the time the Plan is
adopted or becomes so employed subsequent to the adoption of the Plan. With
respect to a particular Participant, Employer means the Company or Affiliate (as
the case may be) that directly employs the Participant.

 

2.13 “Employer” or “Employers” means any one or all of the Company and those
Affiliates which, with the consent of the Board or the Committee, have adopted
the Plan. In the event the Employer is not a Subsidiary, its Employees shall
participate in the Non-423(b) Plan.

 

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2.14 “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.

 

2.15 “Grant Date” means any date on which a Participant is granted an option
under the Plan.

 

2.16 “Non-423(b) Plan” means an employee stock purchase plan that does not meet
the requirements set forth in Section 423(b) of the Code, as amended.

 

2.17 “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 7 or Section 8.

 

2.18 “Plan” means the Polycom, Inc. Employee Stock Purchase Plan, as set forth
in this instrument and as hereafter amended from time to time, which includes
(a) a Code Section 423(b) Plan, and (b) a Non-423(b) Plan.

 

2.19 “Purchase 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
prior to an Enrollment Date for all options to be granted on such Enrollment
Date.

 

2.20 “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 5,000,000 shares of Common Stock shall be
available for issuance pursuant to the Plan. Shares sold 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 may make such adjustment, if any, as it
deems appropriate in its sole discretion in the number, kind and purchase price
of the shares available for purchase under the Plan and any outstanding option
under the Plan.

 

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). Any Participant whose option expires and who has not
withdrawn from the Plan automatically will be re-enrolled in the Plan on the
Enrollment Date immediately following the Purchase Date on which his or her
option expires. Also, even if a Participant’s option has not expired, he or she
automatically will be withdrawn from the Plan after a Purchase Date and
re-enrolled in the Plan on the immediately following Enrollment Date if the
closing price per Share on the Nasdaq National Market on the new Enrollment Date
is lower than such price on the Participant’s previous Enrollment Date. The
Committee (in its discretion and on a uniform and nondiscriminatory basis)
shall, prior to an Enrollment Date, determine whether the preceding sentence
shall apply to all options to be granted on that Enrollment Date.

 

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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, a Participant may
elect to have withholding equal to or otherwise contribute a whole percentage
from 1% to 20% (or such lesser percentage 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). 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 in
accordance with and to the extent permitted by procedures established by the
Committee from time to time. 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 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 will be
deemed to have elected to continue his or her payroll withholding or
contributions at the percentage last elected by the Participant.

 

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 24 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. 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 6 months later.

 

5.3 Number of Shares Subject to Option. The number of shares available for
purchase by each Participant under the option will be established by the
Committee from time to time prior to an Enrollment Date for all options to be
granted on such Enrollment Date. Until otherwise determined by the Committee for
all options to be granted on an Enrollment Date, the number of shares referred
to in the preceding sentence shall be 5,000 shares per Purchase Date. In
addition and notwithstanding the preceding, 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;

 

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(b) purchase of shares upon exercise of the option will be accomplished only in
accordance with Section 6.1;

 

(c) the price per share under the option will be determined as provided in
Section 6.1; 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, 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 (i.e., because fractional shares may not be purchased under
the Plan) shall be rolled over and used to purchase shares on the next Purchase
Date (unless the individual no longer is a Participant, in which case the cash
shall be refunded to him or her). Any other cash remaining after a Purchase Date
(e.g., because a Participant has reached one of the limits on share purchases
under the Plan) shall be returned to the Participant. 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
National Market; or

 

(b) the closing price per Share on the Purchase Date on the Nasdaq National
Market.

 

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 (in 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).

 

Section 7

Withdrawal

 

7.1 Withdrawal. A Participant may withdraw from the Plan by submitting a
withdrawal election to the Company in accordance with and to the extent
permitted by procedures specified by the Committee from time to time. A
withdrawal will be effective only if it is received by the Company by the
deadline specified by the Committee (in its discretion and on a uniform and
nondiscriminatory basis) from time to time. Unless otherwise determined by the
Committee, when a withdrawal becomes effective, the Participant’s payroll
withholding or 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).

 

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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.
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) 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 the Committee does not make Sections 9.1 and 9.2
operative or if Participant dies without having effectively designated a
Beneficiary, the Participant’s Account shall be payable to the general
beneficiary shown on the records of the Employer. If no Beneficiary survives the
Participant, the Participant’s Account shall be payable to his or her estate.

 

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 supervise the administration of 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, validity and parameters of the terms
and 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;

 

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(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;

 

(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 or to facilitate legal, tax or regulatory
compliance outside the United States; and

 

(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.

 

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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 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 2.16, 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 subject to any adjustment pursuant to Section 3.2). If the options
are terminated prior to expiration, all amounts then credited to Participants’
accounts which 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. If the Board or the Committee
determines that a Change of Control will occur, all outstanding options shall
terminate on a Purchase Date (prior to the Change of Control), and upon
completion of the purchase of shares on such Purchase Date, that is selected by
the Board or the Committee (which Purchase Date, notwithstanding Section 2.19,
may be sooner than originally scheduled, if determined by the Board or the
Committee in its discretion), unless the Board or the Committee expressly
determines that the options in fact will be assumed by the surviving corporation
or its parent (subject to any adjustment pursuant to Section 3.2).

 

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 Affiliates. One or more Affiliates of the Company may
become participating Employers by adopting the Plan and obtaining approval for
such adoption from the Board or the Committee. By adopting the Plan, an
Affiliate 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

 

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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 is 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 any
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 Affiliates, 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 provisions of the Plan shall be
construed, administered and enforced in accordance with the laws of the State of
California (excluding California’s conflict of laws provisions).

 

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.

 

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