Exhibit 10(l)

 

Amended and restated November 21, 2002

Amended and restated September 12, 2002

Amended September 4, 2001

Amended November 23, 1994

Adjusted for Stock Splits in 1990, 1994 and 1997(2)

 

 

COMPAQ COMPUTER CORPORATION

 

1985 EXECUTIVE AND KEY EMPLOYEE STOCK OPTION PLAN

 

 

ARTICLE I

Definitions

 

1.01                           “Board” shall mean the Board of Directors of the
Company.

 

1.02                           “Code” shall mean the Internal Revenue Code of
1986 as amended.

 

1.03                           “Committee” shall mean the body comprised of the
member or members of the Board appointed by the Board to administer the Plan.

 

1.04                           “Common Stock” means the Company’s $.01 par value
common stock.

 

1.05                           “Company” shall mean Compaq Computer Corporation
or any successor thereto.

 

1.06                           “Fair Market Value” shall mean the value of a
share of Common Stock as determined by the Board. The Board shall determine Fair
Market Value as follows:

 

(i)                                     If the Common Stock shall not then be
listed and traded upon a recognized securities exchange or in the NASDAQ
National Market System, upon the basis of the mean between the bid and asked
quotations for such stock on the Date of Grant (as reported by a recognized
stock quotation service) or, in the event that there shall be no bid or asked
quotations on the Date of Grant, then upon the basis of the mean between the bid
an asked quotations on the date nearest preceding the Date of Grant; or,

 

(ii)                                  If the Common Stock shall then be listed
and traded upon a recognized securities exchange or in the NASDAQ National
Market System, upon the basis of the reported closing price at which shares of
the Common Stock were traded on such recognized securities exchange or system on
the Date of Grant or, if the Common Stock was not traded on said date, upon the
basis of the reported closing price on the date nearest preceding the Date of
Grant.

 

1.07                           “Date of Grant” means the later of (i) the date
on which the Board approves the grant of an Option or (ii) the date on which the
Optionee is employed by the Company or a Subsidiary.

 

 

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1.08                           “Incentive Option” means an option to purchase
Common Stock granted pursuant to the provisions of the Plan, including the
provisions of Paragraphs 8.02, 8.03, 8.04, and 8.05 of the Plan.

 

1.09                           “Optionee” shall mean an officer and key manager
of the Company to whom an Option has been granted under the Plan.

 

1.10                           “Plan” shall mean the Compaq Computer
Corporation1985 Executive and Key Employee Stock Option Plan, the terms of which
are set forth herein.

 

1.11                           “Incentive Stock Option Agreement” shall mean any
written notice, agreement or other instrument or document evidencing an
Incentive Option and under which the Optionee may purchase Common Stock pursuant
to the terms of the Plan.

 

1.12                           “Subsidiary” or “Subsidiaries” shall mean any
corporation which is a subsidiary corporation of the Company pursuant to Section
425(f ) of the Code.

 

1.13                           “Successor” shall mean the legal representative
of the estate of a deceased Optionee or the person or persons who acquire the
right to exercise an Option by bequest or inheritance or by the reason of the
death of any Optionee.

 

1.14                           “Nonqualified Option” shall mean an Option to
purchase Common Stock granted pursuant to the provisions of the Plan, but which
is not subject to the provisions of Paragraphs 8.02 and 8.05 of the Plan.

 

1.15                           “Nonqualified Stock Option Agreement” shall mean
any written notice, agreement or other instrument or document evidencing a
Nonqualified Option and under which the Optionee may purchase Common Stock
pursuant to the terms of the Plan.

 

1.16                           “Option” shall refer to either or both Incentive
Options and Nonqualified Options granted pursuant to the terms of the Plan.

 

 

ARTICLE II

Purpose

 

The purpose of the Plan is to advance the interests of the Company and its
stockholders by offering to officers and key managers of the Company and its
Subsidiaries the opportunity to acquire, or increase a proprietary interest in
the Company by the grant to such persons of Incentive Options entitled to the
income tax benefits described in Section 422A of the Code under the terms set
forth in the Plan and by the grant to employees of Nonqualified Options. By so
doing, the Company seeks to motivate, obtain, and attract those highly competent
individuals upon whose judgment, initiative, leadership, and continuing efforts
the success of the Company depends.

 

 

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ARTICLE III

Effective Date of the Plan

 

The Plan shall become effective on the date of its adoption by a resolution of
the Board. Within one year of such adoption, this Plan shall be submitted to the
stockholders of the Company entitled to vote thereon; should a majority of the
stockholders of the Company entitled to vote thereon fail to approve the Plan
within such year, this Plan shall automatically terminate.

 

 

ARTICLE IV

Eligibility

 

Options may be granted only to officers and key manager (including officers and
employees who are also directors) of the Company or any of its Subsidiaries.

 

 

ARTICLE V

Administration of the Plan

 

The Plan shall be administered by the Board. The Board may, in its discretion,
appoint a Committee to administer the Plan. The Committee shall consist of three
or more disinterested directors, none of whom shall be eligible (or shall have
been eligible for one year prior to appointment to the Committee) to be granted
Options under the Plan. The Committee shall serve at the pleasure of the Board
and shall exercise all powers of the Board granted herein, other than the power
to amend the Plan.

 

The Board shall have the sole discretion and authority, subject to the
provisions of the Plan, to determine the officers and key managers to whom and
the time or times at which Options shall be granted, and the number of shares of
the Common Stock which shall be subject to each Option.

 

Subject to the express provisions of the Plan, the Board shall also have full
and final authority to interpret the Plan, and to make all other determinations
and to take all other actions it deems necessary or advisable for the proper
administration of the Plan. All such actions and determinations shall be
conclusively binding for all purposes and upon all persons.

 

The majority of the members of the Board shall constitute a quorum and any
action taken by a majority present at a meeting a which a quorum is present or
any action taken without a meeting evidenced by writing executed by a majority
of the Board shall constitute the action of the Board.

 

Delegation of Authority for the Day-to-Day Administration of the Plan.  Except
to the extent prohibited by applicable law or applicable rules of a stock
exchange, the Board or any of its committees as shall be administering the Plan
may delegate to one or more individuals the day-to-day administration of the
Plan and any of the functions assigned to it in this Plan. The delegation may be
revoked at any time.

 

 

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ARTICLE VI

Common Stock Subject to Options

 

Subject to the adjustments specified below, the aggregate number of shares of
Common Stock that may be issued upon the exercise of all Options that may be
granted under the Plan shall not exceed 30,000,000 shares of the Common Stock.
Any shares subject to an Option which for any reason is surrendered, expires or
is terminated unexercised as to such shares may again be subject to an Option
under the Plan.

 

 

ARTICLE VII

Adjustments and Change in Control

 

7.01                           Adjustment. The total number of shares of Common
Stock available for Options under the Plan or which may be allocated to any one
employee, the number of shares of Common Stock subject to outstanding Options
and the exercise price for such Options shall be appropriately adjusted by the
Board for any increase or decrease in the number of outstanding shares of Common
Stock resulting from a stock dividend, subdivision or combination of shares or
reclassification, as may be necessary to maintain the proportionate interest of
the Option holder. In the event of a merger or consolidation of the Company or a
tender offer for shares of Common Stock, the Board may make such adjustments
with respect to Options under the Plan and take such other action as it deems
necessary or appropriate to reflect or in anticipation of such merger,
consolidation or tender offer including, without limitation, the substitution of
new Options, the termination or adjustment of outstanding Options, and the
acceleration of Options.

 

7.02                           Immediate Vesting. Notwithstanding any other
provision of the Plan to the contrary, upon a Change in Control, as defined
below, all outstanding Options shall vest and become immediately exercisable or
payable, or have all restrictions lifted as may apply to the type of Award;
provided, however, that unless otherwise determined by the Committee at the time
of award or thereafter, if it is determined that the Net After-Tax Amount to be
realized by any Optionee, taking into account the accelerated vesting provided
for by this paragraph 7.02 as well as all other payments to be received by such
Optionee in connection with such Change in Control, would be higher if Options
did not vest in accordance with the foregoing paragraph 7.02, then and to such
extent the Options shall not vest. The determination of whether any such Option
should not vest shall be made by a nationally recognized accounting firm
selected by the Company, which shall be instructed to consider that (i) stock
options shall be vested in the order in which they were granted and within each
grant in the order in which they would otherwise have vested and (ii) unless and
to the extent any other plan, arrangement or contract of the Company pursuant to
which any such payment is to be received provides to the contrary, such other
payment shall be deemed to have occurred after any acceleration of Options.

7.03                           Change in Control. A “Change in Control” shall be
deemed to have occurred if: (i) any “person” as such term is used in Sections
13(d) and 14(d) of the Securities Exchange Act of 1934, (the “Exchange Act”)
(other than the Company, any trustee or other fiduciary holding securities under
any employee benefit plan of the Company, or any company owned, directly or
indirectly, by the stockholders

 

 

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of the Company in substantially the same proportions as their ownership of Stock
of the Company), is or becomes the “beneficial owner” (as defined in Rule 13d-3
under the Exchange Act), directly or indirectly, of securities of the Company
representing 30% or more of the combined voting power of the Company’s then
outstanding securities; (ii) during any period of two consecutive years (not
including any period prior to January 18, 1989), individuals who at the
beginning of such period constitute the Board of Directors, and any new director
(other than a director designated by a person who has entered into an agreement
with the Company to effect a transaction described in clause (i), (iii), or (iv)
of this paragraph whose election by the Board of Directors or nomination for
election by the Company’s stockholders was approved by a vote of at least
two-thirds of the directors then still in office who either were directors at
the beginning of the two year period or whose election or nomination for
election was previously so approved, cease for any reason to constitute at least
a majority of the Board of Directors; (iii) the stockholders of the Company
approve 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) more than 50% of the combined voting power of the voting
securities of the Company or such surviving entity outstanding immediately after
such merger or consolidation; provided, however, that a merger or consolidation
effected to implement a recapitalization of the company (or similar transaction)
in which no person acquires more than 30% of the combined voting power of the
Company’s then outstanding securities shall not constitute a Change in Control
of the Company; or (iv) the stockholders of the Company approve a plan of
complete liquidation of the Company or an agreement for the sale or disposition
by the Company of all or substantially all of the Company’s assets.

 

7.04                           Net After-Tax Amount. “Net After-Tax Amount”
shall mean the net amount of compensation, assuming for this purpose only that
all vested Options are exercised upon such Change in Control, to be received (or
deemed to have been received) by such Optionee in connection with such Change of
Control under any option agreement and under any other plan, arrangement or
contract of the company to which such Optionee is a party, after giving effect
to all income and excise taxes applicable to such payments.

 

 

ARTICLE VIII

Terms and Conditions of Options

 

8.01                           Option Grant and Agreement. Each Incentive Option
and each Nonqualified Option granted prior to November 23, 1994, shall be
evidenced by a written Incentive Stock Option Agreement or a written
Nonqualified Stock Option Agreement, as applicable, dated as of the Date of
Grant and executed by the Company and the Optionee, which Agreement shall set
forth the applicable terms and conditions provided in this Article VIII and such
other provisions which the Board, in its discretion, may deem appropriate. Each
Incentive Option and each Nonqualified Option granted on or after November 23,
1994, shall be evidenced by a Stock Option Agreement in the form of a written
notice to the Participant

 

 

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receiving an Option, which shall set forth the applicable terms and conditions
provided in this Article VIII and such other provisions which the Board, in its
discretion may deem appropriate.

 

8.02                           Participation Limitation. In accordance with
rules and procedures established by the Committee, the aggregate Fair Market
Value (determined as of the time of grant) of the stock subject to Incentive
Stock Options as defined by Section 422A of the Code (“Section 422A”) held by
any Optionee that become exercisable for the first time by such Optionee during
any calendar year under the Plan (and under any other benefit plans of the
Company or of any parent or subsidiary corporation of the Company) shall not
exceed $100,000 or, if different the maximum limitation in effect at the time of
grant under Section 422A, or any successor provision, and any regulations
promulgated thereunder. The terms of any Incentive Option granted hereunder
shall comply in all respects with the provisions of Section 422A, or any
successor provision, and any regulations promulgated thereunder.

 

8.03                           Option Price. The per share Option price of the
Common Stock subject to each Option shall be determined by the Board but the per
share price shall not be less than the Fair Market Value of the Common Stock on
the Date of Grant.

 

8.04                           Option. Each Option granted must be granted
within ten years from the date of the Plan’s adoption by the Board. The period
of exercise of each Option shall be set forth in the applicable Option
Agreement; provided that such period not exceed ten years from the Date of
Grant.

 

8.05                           Ten Percent Shareholder Limitations. In any case
in which an Incentive Option is granted to an employee who, at the time the
Incentive Option is granted, owns more than ten percent (10%) of the total
combined voting power of all classes of stock of the Company, its parent or
subsidiary, the per share Incentive Option price of the Common Stock subject to
each Incentive Option shall be determined by the Board but the per share price
shall not be less than one hundred and ten percent of the Fair Market Value of
the Common Stock on the Date of Grant; furthermore, the period for exercise, of
each such Incentive Option shall not exceed five (5) years from the Date of
Grant. For the purposes of the immediately preceding sentence, an employee shall
be considered owning the shares of Common Stock owned, directly or indirectly,
by or for his brothers and sisters (whether by the whole or half blood), spouse,
ancestors and lineal descendants. In addition, the stock owned directly or
indirectly, by or for a corporation, partnership, estate or trust shall be
considered as owned proportionately by or for its shareholders, partners or
beneficiaries.

 

8.06                           Exercise of Options. Incentive Options and
Nonqualified Options shall become exercisable in whole or in part and at such
time or times as shall be set forth in the Incentive Stock Option Agreement or
Nonqualified Stock Option Agreement, as applicable. Options shall be exercised
by notice of intent to exercise the Option with respect to a specified number of
whole shares delivered to the Company at its principal office, and payment in

 

 

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full to the Company in the amount of the Option price for the number of shares
of the Common Stock with respect to which the Option is then being exercised.
The payment of the Option price shall be made in cash or, with the consent of
the Board, in whole or in part in Common Stock valued at Fair Market Value which
is owned by the Optionee.

 

8.07                           Non-Transferability of Options, Transfer upon
Death of Optionee. No Option shall be transferable or assignable by the
Optionee, other than by will or the laws of descent and distribution. Each
Option shall be exercisable during the Optionee’s lifetime, only by the
Optionee.

 

8.08                           Effect of Death or Other Termination of
Employment.

 

(a)                                  If the Optionee’s employment with the
Company is terminated for any reason other than death, disability, or
retirement, the Optionee’s right to exercise any Stock Option shall terminate,
and such Option shall expire, on the earlier of (A) the first anniversary of
such termination of employment or (B) the date such Option would have expired
had it not been for the termination of employment; provided, however, that if,
within one year following an occurrence of a Change in Control, the Optionee’s
employment is terminated in a Qualifying Termination (as defined in paragraph
(d) below), the Optionee shall have the right to exercise such Option until the
earlier of (1) the third anniversary of such termination of employment or (2)
the date such Option would have expired had it not been for such termination of
employment.   For purposes of applying the immediately preceding proviso with
respect to treatment of Options in the event of a Qualifying Termination, the
definition of a Change in Control set forth in Section 7.03 of Article VII shall
be revised by substituting the phrase “a merger or consolidation of the Company
with any other corporation is consummated” for the phrase “the stockholders of
the Company approve a merger or consolidation of the Company with any other
corporation” in clause (iii) of said Section 7.03. The Optionee shall have the
right to exercise such Option prior to such expiration to the extent it was
exercisable at the date of such termination of employment and shall not have
been exercised.

 

(b)                                 If the Optionee’s employment with the
Company is terminated by reason of death, disability, or retirement, the
Optionee’s right to exercise any Stock Option shall terminate, and such Option
shall expire, on the earlier of (A) the third anniversary of such termination of
employment or (B) the date such Option would have expired had it not been for
the termination of employment. The Optionee (or his successor if his employment
is terminated by death) shall have the right to exercise such Option prior to
such expiration to the extent it was exercisable at the date of such termination
of employment and shall not have been exercised.

 

 

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(c)                                  Notwithstanding the foregoing, the Board
may in its discretion provide in an Option Agreement that such Option shall
terminate at a date earlier or later than the date set forth above, provided
such date shall not be beyond the earlier of (i) three years from the last day
of Optionee’s employment or (ii) the date such Option would have expired had it
not been for the termination of the Optionee’s employment.

 

(d)                                 The term “disability” as used in this
paragraph means total and permanent disability. The terms “disability” and
“retirement” shall be determined in accordance with applicable Company personnel
policies as interpreted in the exercise of the Board’s discretion.  For purposes
of subparagraph (a) above, the term “Qualifying Termination” shall have the
meaning ascribed to such term in the Optionee’s individual employment or
severance agreement with the Company or its Subsidiaries.  If the Optionee is
not a party to an individual employment or severance agreement with the Company
or its Subsidiaries, the term “Qualifying Termination” shall have the meaning
ascribed to the term “Qualified Termination” in the Compaq Computer Corporation
employee severance plan in which such Optionee is eligible to participate.

 

(e)                                  No transfer of an Option by an Optionee by
will or by the laws of descent and distribution shall be effective to bind the
Company unless the Company shall have been furnished with written notice of the
same and an authenticated copy of the will and/or such other evidence as the
Board may deem necessary to establish the validity of the transfer and the
acceptance of the transferee or transferees of the terms and conditions of such
Option.

 

(f)                                    In the event an Optionee holds an
Incentive Stock Option, such Option to the extent not exercised during the 90
days after termination of employment, automatically will be deemed a
Nonqualified Stock Option and such Option will be exercisable during the
remainder of the time set forth above; provided that in the event that
employment is terminated because of death or the Optionee dies in such 90-day
period, the Option will continue to be an Incentive Stock Option to the extent
provided by Section 421 or Section 422A of the Code, or any successor provision,
and any regulations promulgated thereunder.

 

8.09                           Leave Without Pay. Any time spent by a
Participant in the status of “leave without pay” shall be disregarded for
purposes of determining the extent to which an Option or any portion thereof has
vested. The meaning of the term “leave without pay” shall be determined by the
Committee and shall include but not be limited to periods during which the
Participant is receiving payments under the Company’s Long-Term Disability Plan.

 

 

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8.10                           Rights of Stockholder. Optionee or his successor
shall have no rights as a stockholder with respect to any share subject to an
Option until the certificates evidencing the share purchased are properly
delivered to such Optionee or his Successor.

 

8.11                           Buyout Provision.  At any time, the Committee
may, but shall not be required to, authorize the Company to offer to buy out for
a payment in cash or shares an Option previously granted based on such terms and
conditions as the Committee shall establish and communicate to the Optionee in
connection with such offer.

 

 

ARTICLE IX

Restrictions on Issuing Shares

 

The exercise of each Option shall be subject to the condition that if at any
time the Board shall determine in its discretion that the listing, registration
or qualification of any shares otherwise deliverable upon such exercise upon any
securities exchange or under any state or federal law, or that the consent or
approval of any regulatory body is necessary or desirable as a condition of or
in connection with such exercise of delivery or purchase of shares pursuant to
the Plan, then in any such event, such exercise shall not be effective unless
such withholding, listing, registration, qualification, consent or approval
shall have been effected or obtained free of any conditions not acceptable to
the Board.

 

In addition, the exercise of each Option shall be subject to the condition that,
if required by the Board, Optionee shall give satisfactory assurance in writing,
signed by Optionee, his successor or legal representative, as the case may be,
that such shares are being purchased for investment and not with a view to the
distribution thereof; provided that such assurance shall be deemed inapplicable
to (i) any sale of such shares by such Optionee made in accordance with the
terms of a registration statement covering such sale, which has heretofore been
(or may hereafter be) filed and become effective under the Securities Ac of
1933, as amended, and with respect to which no stop order suspending the
effectiveness thereof has been issued, and (ii) any other sale of such shares
with respect to which, in the opinion of counsel for the Company, such assurance
is not required to be given in order to comply with the provisions of the
Securities Act of 1933 as amended.

 

 

ARTICLE X

Amendment, Suspension and Termination of the Plan

 

The Board shall have the right to amend, suspend or terminate the Plan at any
time; provided, however, that no such action shall affect any Option granted
without the consent of the Optionee or his Successor of the Option. In addition,
unless duly approved by a majority of the holders of Common Stock entitled to
vote thereon at a meeting (which may be the annual meeting), or the equivalent
of said meeting, duly called and held for such purpose, no amendment or change
shall be made in the Plan (a) increasing the total number of shares which may be
issued under the Plan (except for adjustments for recapitalization, stock
dividends and other changes in the corporate structure and except as
contemplated in Article VII), (b) changing the minimum purchase price
hereinbefore specified for the Common Stock subject to the Options, (c) changing
the maximum period during which the Options may be exercised, (d) increasing the
maximum number of shares for which Incentive Options may be granted to any one
employee, or (e)

 

 

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extending the period during which Options may be granted under the Plan. It is
contemplated that the Incentive Options issued pursuant to the Plan qualify as
“Incentive Stock Options” within the meaning of Section 422A of the Code.
Accordingly, the Board shall administer the Plan and make such amendments as to
accomplish this purpose.

 

 

ARTICLE XI

Miscellaneous

 

11.01                     Employment. Nothing in the Plan, any Option granted
pursuant to the Plan, or in any Incentive Stock Option Agreement or Nonqualified
Stock Option Agreement shall confer upon any employee the right to continue in
the employ of the Company or any Subsidiary.

 

11.02                     Other Compensation Plans. The adoption of the Plan
shall not affect any other stock option, incentive or other compensation plans
in effect for the Company or any Subsidiary or preclude the Company from
establishing any other forms of incentive or other compensation for employees of
the Company or any Subsidiary.

 

11.03                     Plan Binding on Successors. The Plan shall be binding
on the successors and assigns of the Company.

11.04                     Use of Proceeds. The proceeds from the sale of Common
Stock, pursuant to Options granted under the Plan, shall constitute general
funds of the Company.

 

 

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