Exhibit 10.3
 
PALM, INC.
 
1999 EMPLOYEE STOCK PURCHASE PLAN
 
(As Amended and Restated Effective as of October 15, 2002)
 
The following constitute the provisions of the Palm, Inc. 1999 Employee Stock
Purchase Plan, as amended and restated effective as of October 15, 2002:
 
1.    Purpose.    The purpose of the Plan is to provide Employees with an
opportunity to purchase Common Stock through accumulated payroll deductions. It
is the intention of the Company to have the Plan qualify as an “Employee Stock
Purchase Plan” under Section 423 of the Code. The provisions of the Plan,
accordingly, shall be construed so as to extend and limit participation in a
manner consistent with the requirements of that section of the Code.
 
2.    Definitions.
 
(a)    “Administrator” shall mean the Board or any committee thereof designated
by the Board in accordance with Section 14.
 
(b)    “Board” shall mean the Board of Directors of the Company.
 
(c)    “Code” shall mean the Internal Revenue Code of 1986, as amended. Any
reference to a section of the Code herein shall be a reference to any successor
or amended section of the Code.
 
(d)    “Common Stock” shall mean the common stock of the Company.
 
(e)    “Company” shall mean Palm, Inc., a Delaware corporation.
 
(f)    “Compensation” shall mean an Employee’s base straight time gross earnings
and commissions, but shall exclude payments for overtime, shift premium,
incentive compensation, incentive payments, bonuses and other compensation.
 
(g)    “Designated Subsidiary” shall mean any Subsidiary that has been
designated by the Administrator from time to time in its sole discretion as
eligible to participate in the Plan with respect to its Employees.
 
(h)    “Employee” shall mean any individual who is an employee of an Employer
for tax purposes and is customarily employed for at least twenty (20) hours per
week and more than five (5) months in any calendar year by the Employer. For
purposes of the Plan, the employment relationship shall be treated as continuing
intact while the individual is on sick leave or other leave of absence approved
by the Employer. Where the period of leave exceeds ninety (90) days and the
individual’s right to reemployment is not guaranteed either by statute or by
contract, the employment relationship shall be deemed to have terminated on the
91st day of such leave.

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(i)    “Employer” shall mean any one or all of the Company and its Designated
Subsidiaries.
 
(j)    “Enrollment Date” shall mean the first Trading Day of each Offering
Period.
 
(k)    “Exercise Date” shall mean the last Trading Day of each Purchase Period.
 
(l)    “Fair Market Value” shall mean, as of any date, the value of Common Stock
determined as follows:
 
(i)    If the Common Stock is listed on any established stock exchange or a
national market system, including without limitation the Nasdaq National Market
or The Nasdaq SmallCap Market of The Nasdaq Stock Market, its Fair Market Value
shall be the closing sales price for the Common Stock (or the closing bid, if no
sales were reported) as quoted on such exchange or system on the date of
determination, as reported in The Wall Street Journal or such other source as
the Administrator deems reliable;
 
(ii)    If the Common Stock is regularly quoted by a recognized securities
dealer but selling prices are not reported, its Fair Market Value shall be the
mean of the closing bid and asked prices for the Common Stock on the date of
determination, as reported in The Wall Street Journal or such other source as
the Administrator deems reliable;
 
(iii)    In the absence of an established market for the Common Stock, the Fair
Market Value thereof shall be determined in good faith by the Administrator; or
 
(iv)    For purposes of the Enrollment Date of the first Offering Period under
the Plan, the Fair Market Value shall be the initial price to the public as set
forth in the final prospectus included with the registration statement on Form
S-1 filed with the Securities and Exchange Commission for the initial public
offering of the Company’s Common Stock (the “Registration Statement”).
 
(m)    “Offering Periods” shall mean the periods of approximately twenty-four
(24) months during which an option granted pursuant to the Plan may be
exercised, commencing on the first Trading Day on or after April 1 and October 1
of each year and terminating on the last Trading Day in the periods ending
twenty-four (24) months later; provided, however, that the first Offering Period
under the Plan shall commence with the first Trading Day on or after the date on
which the Securities and Exchange Commission declares the Company’s Registration
Statement effective and ending on the last Trading Day on or before March 31,
2002. Notwithstanding the foregoing, if a new Offering Period is established in
accordance with Section 25, the new Offering Period shall commence on the last
Exercise Date of the immediately preceding Offering Period following the
exercise of options on such Exercise Date. The duration and timing of Offering
Periods may be changed by the Administrator pursuant to Section 4.
 
(n)    “Parent” shall mean a “parent corporation,” whether now or hereafter
existing, as defined in Section 424(e) of the Code.
 
(o)    “Plan” shall mean this 1999 Employee Stock Purchase Plan, as amended from
time to time.

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(p)    “Purchase Period” shall mean the approximately six (6) month period
commencing after one Exercise Date and ending with the next Exercise Date,
except that the first Purchase Period of any Offering Period shall commence on
the Enrollment Date and end with the next Exercise Date.
 
(q)    “Purchase Price” shall mean eighty-five percent (85%) of the Fair Market
Value of a share of Common Stock on the Enrollment Date or on the Exercise Date,
whichever is lower; provided however, that the Purchase Price may be adjusted by
the Administrator pursuant to Section 20.
 
(r)    “Reserves” shall mean the number of shares of Common Stock covered by
each option under the Plan which have not yet been exercised and the number of
shares of Common Stock which have been authorized for issuance under the Plan
but not yet placed under option.
 
(s)    “Subsidiary” shall mean a corporation, domestic or foreign, of which not
less than 50% of the voting shares are held by the Company or a Subsidiary,
whether or not such corporation now exists or is hereafter organized or acquired
by the Company or a Subsidiary.
 
(t)    “Trading Day” shall mean a day on which U.S. national stock exchanges and
the Nasdaq System are open for trading.
 
3.    Eligibility.
 
(a)    Any person who is an Employee as of the Enrollment Date of a given
Offering Period shall be eligible to participate in such Offering Period under
the Plan, subject to the requirements of Section 5.
 
(b)    Any provisions of the Plan to the contrary notwithstanding, no Employee
shall be granted an option under the Plan (i) to the extent that, immediately
after the grant, such Employee (or any other person whose stock would be
attributed to such Employee pursuant to Section 424(d) of the Code) would own
capital stock of the Company or any Parent or Subsidiary of the Company and/or
hold outstanding options to purchase such stock possessing five percent (5%) or
more of the total combined voting power or value of all classes of the capital
stock of the Company or any Parent or Subsidiary of the Company, or (ii) to the
extent that his or her rights to purchase stock under all employee stock
purchase plans (as defined in Section 423 of the Code) of the Company or any
Parent or Subsidiary of the Company accrues at a rate which exceeds twenty-five
thousand dollars ($25,000) worth of stock (determined at the Fair Market Value
of the stock at the time such option is granted) for each calendar year in which
such option is outstanding at any time.
 
4.    Offering Periods.    The Plan shall be implemented by consecutive,
overlapping Offering Periods, with a new Offering Period commencing on the first
Trading Day on or after April 1 and October 1 of each year, or on such other
date as the Administrator shall determine, and continuing thereafter until
terminated in accordance with Section 20; provided, however, that the first
Offering Period under the Plan shall commence with the first Trading Day on or
after the date on which the Securities and Exchange Commission declares the
Company’s Registration Statement effective and ending on the last Trading Day on
or before March 31, 2002. The Administrator shall have the power to change the
duration of Offering Periods (including the commencement dates thereof) with
respect to future offerings without shareholder approval if such change is
announced at least five (5) days prior to the scheduled beginning of the first
Offering Period to be affected thereafter.

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5.    Participation.    An Employee who is eligible to participate in the Plan
pursuant to Section 3 may become a participant in the Plan by (i) submitting to
the Company’s Stock Administration Department (or its designee), on or before a
date prescribed by the Administrator prior to an applicable Enrollment Date, a
properly completed subscription agreement authorizing payroll deductions in the
form provided by the Administrator for such purpose, or (ii) following an
electronic or other enrollment procedure prescribed by the Administrator.
 
6.    Payroll Deductions.
 
(a)    At the time a participant enrolls in the Plan pursuant to Section 5, he
or she shall elect to have payroll deductions made on each payday during the
Offering Period in an amount not exceeding ten percent (10%) of the Compensation
which he or she receives on each such payday. However, if the percentage of a
participant’s Compensation deducted for purposes of this Plan and all other
plans of the Company or any Parent or Subsidiary of the Company, that are
intended to qualify as “employee stock purchase plans” under Section 423 of the
Code exceeds ten percent (10%), then the percentage of Compensation deducted for
purposes of this Plan shall be reduced such that the participant’s percentage of
Compensation deducted under all such plans that qualify under Section 423 of the
Code does not exceed ten percent (10%) of the Compensation which the participant
receives on each pay day during the Offering Period.
 
(b)    Payroll deductions authorized by a participant shall commence on the
first payday following the Enrollment Date and shall end on the last payday in
the Offering Period to which such authorization is applicable, unless sooner
terminated by the participant as provided in Section 10.
 
(c)    All payroll deductions made for a participant shall be credited to his or
her account under the Plan and shall be withheld in whole percentages only. A
participant may not make any additional payments into such account.
 
(d)    A participant may discontinue his or her participation in the Plan as
provided in Section 10, or may change the rate of his or her payroll deductions
during the Offering Period by (i) properly completing and submitting to the
Company’s Stock Administration Department (or its designee), on or before a date
prescribed by the Administrator prior to an applicable Exercise Date, a new
subscription agreement authorizing the change in payroll deduction rate in the
form provided by the Administrator for such purpose, or (ii) following an
electronic or other procedure prescribed by the Administrator. If a participant
has not followed such procedures to change the rate of payroll deductions, the
rate of his or her payroll deductions shall continue at the originally elected
rate throughout the Offering Period and future Offering Periods (unless
terminated as provided in Section 10). The Administrator may, in its sole
discretion, limit the nature and/or number of payroll deduction rate changes
that may be made by participants during any Offering Period. Any change in
payroll deduction rate made pursuant to this Section 6(d) shall be effective as
of the beginning of the calendar month immediately following the date on which
the change is made by the participant.

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(e)    Notwithstanding the foregoing, to the extent necessary to comply with
Section 423(b)(8) of the Code and Section 3(b), a participant’s payroll
deductions may be decreased to zero percent (0%) at any time during a Purchase
Period. Payroll deductions shall recommence at the rate originally elected by
the participant effective as of the beginning of the first Purchase Period which
is scheduled to end in the following calendar year, unless terminated by the
participant as provided in Section 10.
 
(f)    At the time the option is exercised, in whole or in part, or at the time
some or all of the Common Stock issued under the Plan is disposed of, the
participant must make adequate provision for the Company’s federal, state, or
other tax withholding obligations, if any, which arise upon the exercise of the
option or the disposition of the Common Stock. At any time, the Company may, but
shall not be obligated to, withhold from the participant’s compensation the
amount necessary for the Company to meet applicable withholding obligations,
including any withholding required to make available to the Company any tax
deductions or benefits attributable to sale or early disposition of Common Stock
by the participant.
 
7.    Grant of Option.    On the Enrollment Date of each Offering Period, each
Employee participating in such Offering Period shall be granted an option to
purchase on each Exercise Date during such Offering Period (at the applicable
Purchase Price) up to a number of shares of Common Stock determined by dividing
such participant’s payroll deductions accumulated prior to such Exercise Date
and retained in the participant’s account as of the Exercise Date by the
applicable Purchase Price; provided that in no event shall a participant be
permitted to purchase during each Purchase Period more than 500 shares of Common
Stock (subject to any adjustment pursuant to Section 19), and provided further
that such purchase shall be subject to the limitations set forth in Sections
3(b) and 13. The Administrator may, for future Offering Periods, increase or
decrease, in its absolute discretion, the maximum number of shares of Common
Stock that an Employee may purchase during each Purchase Period of such Offering
Period. Exercise of the option shall occur as provided in Section 8, unless the
participant has withdrawn pursuant to Section 10. The option shall expire on the
last day of the Offering Period.
 
8.    Exercise of Option.
 
(a)    Unless a participant withdraws from the Plan as provided in Section 10,
his or her option for the purchase of shares of Common Stock shall be exercised
automatically on the Exercise Date, and the maximum number of full shares
subject to the option shall be purchased for such participant at the applicable
Purchase Price with the accumulated payroll deductions in his or her account. No
fractional shares of Common Stock shall be purchased; any payroll deductions
accumulated in a participant’s account which are not sufficient to purchase a
full share shall be retained in the participant’s account for the subsequent
Purchase Period or Offering Period, subject to earlier withdrawal by the
participant as provided in Section 10. Any other monies left over in a
participant’s account after the Exercise Date shall be returned to the
participant. During a participant’s lifetime, a participant’s option to purchase
shares hereunder is exercisable only by him or her.

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(b)    If the Administrator determines that, on a given Exercise Date, the
number of shares of Common Stock with respect to which options are to be
exercised may exceed (i) the number of shares of Common Stock that were
available for sale under the Plan on the Enrollment Date of the applicable
Offering Period, or (ii) the number of shares of Common Stock available for sale
under the Plan on such Exercise Date, the Administrator may in its sole
discretion (x) provide that the Company shall make a pro rata allocation of the
shares of Common Stock available for purchase on such Enrollment Date or
Exercise Date, as applicable, in as uniform a manner as shall be practicable and
as it shall determine in its sole discretion to be equitable among all
participants exercising options to purchase Common Stock on such Exercise Date,
and continue all Offering Periods then in effect, or (y) provide that the
Company shall make a pro rata allocation of the shares of Common Stock available
for purchase on such Enrollment Date or Exercise Date, as applicable, in as
uniform a manner as shall be practicable and as it shall determine in its sole
discretion to be equitable among all participants exercising options to purchase
Common Stock on such Exercise Date, and terminate any or all Offering Periods
then in effect pursuant to Section 20. The Company may make pro rata allocation
of the shares of Common Stock available on the Enrollment Date of any applicable
Offering Period pursuant to the preceding sentence, notwithstanding any
authorization of additional shares of Common Stock for issuance under the Plan
by the Company’s shareholders subsequent to such Enrollment Date.
 
9.    Delivery.    As promptly as practicable after each Exercise Date on which
a purchase of shares of Common Stock occurs, the Company shall arrange the
delivery to each participant, as appropriate, of a record of the shares
purchased. The Administrator may permit or require that such shares be deposited
directly with a broker designated by the Administrator or to a designated agent
of the Company, and the Administrator may utilize electronic or other automated
methods of share transfer. No participant shall have any voting, dividend, or
other shareholder rights with respect to shares of Common Stock subject to any
option granted under the Plan until such shares have been purchased and
delivered to the participant as provided in this Section 9.
 
10.    Withdrawal.
 
(a)    Under procedures established by the Administrator, a participant may
withdraw all but not less than all the payroll deductions credited to his or her
account and not yet used to exercise his or her option under the Plan by
submitting to the Company’s Stock Administration Department (or its designee) a
notice of withdrawal in the form and manner prescribed by the Administrator for
such purpose. Unless otherwise determined by the Administrator on a uniform and
non-discriminatory basis, any election to withdraw from an Offering Period will
be effective only with respect to Exercise Dates that are at least five (5)
business days after the properly completed election is received by the Company’s
Stock Administration Department. All of the participant’s payroll deductions
credited to his or her account shall be paid to such participant as promptly as
practicable after the effective date of his or her withdrawal and such
participant’s option for the Offering Period shall be automatically terminated,
and no further payroll deductions for the purchase of shares shall be made for
such Offering Period. Once a participant has withdrawn from an Offering Period,
the participant may not re-enroll in the same Offering Period. Moreover, payroll
deductions shall not resume at the beginning of the succeeding Offering Period
unless the participant re-enrolls in the Plan in accordance with the provisions
of Section 5.
 
(b)    A participant’s withdrawal from an Offering Period shall not have any
effect upon his or her eligibility to participate in any similar plan which may
hereafter be adopted by the Company or in succeeding Offering Periods which
commence after the termination of the Offering Period from which the participant
withdraws.

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11.    Termination of Employment.    Upon a participant’s ceasing to be an
Employee for any reason, he or she shall be deemed to have elected to withdraw
from the Plan and the payroll deductions credited to such participant’s account
during the Offering Period but not yet used to exercise the option shall be
returned to such participant or, in the case of his or her death, to the person
or persons entitled thereto under Section 15, and such participant’s option
shall be automatically terminated. The preceding sentence notwithstanding, a
participant who receives payment in lieu of notice of termination of employment
shall be treated as continuing to be an Employee for the participant’s customary
number of hours per week of employment during the period in which the
participant is subject to such payment in lieu of notice; provided, however,
that in no event shall the participant’s option be exercisable more than three
(3) months after the date of his or her termination of employment.
 
12.    Interest.    No interest shall accrue on the payroll deductions of a
participant in the Plan.
 
13.    Stock.
 
(a)    Subject to adjustment upon changes in capitalization of the Company as
provided in Section 19, the maximum number of shares of Common Stock which shall
be made available for sale under the Plan shall be 1,750,000* shares plus an
annual increase to be added on the first day of the Company’s fiscal year equal
to the lesser of (i) 500,000 shares, (ii) 2% of the outstanding shares of Common
Stock on such date, or (iii) a lesser amount determined by the Board.
 
(b)    Shares of Common Stock to be delivered to a participant under the Plan
shall be registered in the name of the participant or in the name of the
participant and his or her spouse.
 
14.    Administration.    The Plan shall be administered by the Board or a
committee of members of the Board who shall be appointed from time to time by,
and shall serve at the pleasure of, the Board. The Administrator shall have full
and exclusive discretionary authority to construe, interpret and apply the terms
of the Plan, to determine eligibility and to adjudicate all disputed claims
filed under the Plan. The Administrator, in its sole discretion and on such
terms and conditions as it may provide, may delegate to one or more individuals
all or any part of its authority and powers under the Plan. Every finding,
decision and determination made by the Administrator shall, to the full extent
permitted by law, be final and binding upon all parties.
 
15.    Designation of Beneficiary.
 
(a)    A participant may designate a beneficiary who is to receive any shares of
Common Stock and cash, if any, from the participant’s account under the Plan in
the event of such participant’s death subsequent to an Exercise Date on which
the option is exercised but prior to delivery to such participant of such shares
and cash. In addition, a participant may designate a beneficiary who is to
receive any cash from the participant’s account under the Plan in the event of
such participant’s death prior to exercise of the option. If a participant is
married and the designated beneficiary is not the spouse, spousal consent shall
be required for such designation to be effective.

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*
 
This number includes the 5,000,000 Shares initially reserved for issuance under
the Plan, plus the Shares that have been added annually pursuant to this Section
13(a) since the first day of the Company’s 2001 fiscal year through October 14,
2002, as adjusted for the 1-for-20 reverse stock split effected on October 15,
2002.

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(b)    Such designation of beneficiary may be changed by the participant at any
time. In the event of the death of a participant and in the absence of a
beneficiary validly designated under the Plan who is living at the time of such
participant’s death, the Company shall deliver such shares and/or cash to the
executor or administrator of the estate of the participant, or if no such
executor or administrator has been appointed (to the knowledge of the Company),
the Company, in its discretion, may deliver such shares and/or cash to the
spouse or to any one or more dependents or relatives of the participant, or if
no spouse, dependent or relative is known to the Company, then to such other
person as the Company may designate.
 
(c)    All beneficiary designations under this Section 15 shall be made in such
form and manner as the Administrator may prescribe from time to time.
 
16.    Transferability.    Neither payroll deductions credited to a
participant’s account nor any rights with regard to the exercise of an option or
to receive shares under the Plan may be assigned, transferred, pledged or
otherwise disposed of in any way (other than by will, the laws of descent and
distribution or as provided in Section 15) by the participant. Any such attempt
at assignment, transfer, pledge or other disposition shall be without effect,
except that the Company may treat such act as an election to withdraw from an
Offering Period in accordance with Section 10.
 
17.    Use of Funds.    All payroll deductions received or held by the Company
under the Plan may be used by the Company for any corporate purpose, and the
Company shall not be obligated to segregate such payroll deductions. Until
shares of Common Stock are issued under the Plan, a participant shall only have
the rights of an unsecured creditor with respect to such shares.
 
18.    Reports.    Individual accounts shall be maintained for each participant
in the Plan. Statements of account shall be given to participating Employees at
least annually, which statements shall set forth the amounts of payroll
deductions, the Purchase Price, the number of shares of Common Stock purchased
and the remaining cash balance, if any.
 
19.    Adjustments Upon Changes in Capitalization, Dissolution, Liquidation,
Merger or Asset Sale.
 
(a)    Changes in Capitalization.    Subject to any required action by the
shareholders of the Company, the Reserves, the number of shares of Common Stock
that may be added annually to the shares reserved under the Plan (pursuant to
Section 13(a)(i)), the maximum number of shares of Common Stock each participant
may purchase each Purchase Period (pursuant to Section 7), as well as the
Purchase Price per share and the number of shares of Common Stock covered by
each option under the Plan which has not yet been exercised, shall be
proportionately adjusted for any spin-off or increase or decrease in the number
of issued shares of Common Stock resulting from a stock split, reverse stock
split, stock dividend, combination or reclassification of the Common Stock, or
any other increase or decrease in the number of shares of Common Stock effected
without receipt of consideration by the Company; provided, however, that
conversion of any convertible securities of the Company shall not be deemed to
have been “effected without receipt of consideration.” Such adjustment shall be
made by the Board, whose determination in that respect shall be final, binding
and conclusive. Except as expressly provided herein, no issuance by the Company
of shares of stock of any class, or securities convertible into shares of stock
of any class, shall affect, and no adjustment by reason thereof shall be made
with respect to, the number or Purchase Price of shares of Common Stock subject
to an option.

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(b)    Dissolution or Liquidation.    In the event of the proposed dissolution
or liquidation of the Company, the Offering Period then in progress shall be
shortened by setting a new Exercise Date (the “New Exercise Date”), and shall
terminate immediately prior to the consummation of such proposed dissolution or
liquidation, unless provided otherwise by the Board. The New Exercise Date shall
be before the date of the Company’s proposed dissolution or liquidation. The
Board shall notify each participant in writing, at least ten (10) business days
prior to the New Exercise Date, that the Exercise Date for the participant’s
option has been changed to the New Exercise Date and that the participant’s
option shall be exercised automatically on the New Exercise Date, unless prior
to such date the participant has withdrawn from the Offering Period as provided
in Section 10.
 
(c)    Merger or Asset Sale.    In the event of a proposed sale of all or
substantially all of the assets of the Company, or the merger of the Company
with or into another corporation, each outstanding option shall be assumed or an
equivalent option substituted by the successor corporation or a Parent or
Subsidiary of the successor corporation. In the event that the successor
corporation refuses to assume or substitute for the option, any Purchase Periods
then in progress shall be shortened by setting a new Exercise Date (the “New
Exercise Date”) and any Offering Periods then in progress shall end on the New
Exercise Date. The New Exercise Date shall be before the date of the Company’s
proposed sale or merger. The Board shall notify each participant in writing, at
least ten (10) business days prior to the New Exercise Date, that the Exercise
Date for the participant’s option has been changed to the New Exercise Date and
that the participant’s option shall be exercised automatically on the New
Exercise Date, unless prior to such date the participant has withdrawn from the
Offering Period as provided in Section 10.
 
20.    Amendment or Termination.
 
(a)    The Board may at any time and for any reason terminate or amend the Plan.
Except as provided in Section 19, no such termination can affect options
previously granted under the Plan, provided that an Offering Period may be
terminated by the Board on any Exercise Date if the Board determines that the
termination of the Offering Period or the Plan is in the best interests of the
Company and its shareholders. Except as provided in Section 19 and this Section
20, no amendment may make any change in any option theretofore granted which
adversely affects the rights of any participant. To the extent necessary to
comply with Section 423 of the Code (or any successor rule or provision or any
other applicable law, regulation or stock exchange rule), the Company shall
obtain shareholder approval in such a manner and to such a degree as required.
 
(b)    Without shareholder consent and without regard to whether any participant
rights may be considered to have been “adversely affected,” the Administrator
shall be entitled to change the Offering Periods, limit the frequency and/or
number of changes in the amount withheld during an Offering Period, establish
the exchange ratio applicable to amounts withheld in a currency other than U.S.
dollars, permit payroll withholding in excess of the amount designated by a
participant in order to adjust for delays or mistakes in the Company’s
processing of properly completed withholding elections, establish reasonable
waiting and adjustment periods and/or accounting and crediting procedures to
ensure that amounts applied toward the purchase of Common Stock for each
participant properly correspond with amounts withheld from the participant’s
Compensation, and establish such other limitations or procedures as the
Administrator determines in its sole discretion advisable which are consistent
with the Plan.

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(c)    In the event the Board determines that the ongoing operation of the Plan
may result in unfavorable financial accounting consequences, the Board may, in
its discretion and, to the extent necessary or desirable, modify or amend the
Plan to reduce or eliminate such accounting consequence including, but not
limited to:
 
(i)    altering the Purchase Price for any Offering Period including an Offering
Period underway at the time of the change in Purchase Price;
 
(ii)    shortening any Offering Period so that Offering Period ends on a new
Exercise Date, including an Offering Period underway at the time of the Board
action; and
 
(iii)    allocating shares.
 
Such modifications or amendments shall not require stockholder approval or the
consent of any Plan participants.
 
21.    Notices.    All notices or other communications by a participant to the
Company under or in connection with the Plan shall be deemed to have been duly
given when received in the form specified by the Company at the location, or by
the person, designated by the Company for the receipt thereof.
 
22.    Conditions Upon Issuance of Shares.    Shares of Common Stock shall not
be issued with respect to an option under the Plan unless the exercise of such
option and the issuance and delivery of such shares pursuant thereto shall
comply with all applicable provisions of law, domestic or foreign, including,
without limitation, the Securities Act of 1933, as amended, the Securities
Exchange Act of 1934, as amended, the rules and regulations promulgated
thereunder, and the requirements of any stock exchange upon which the shares may
then be listed, and shall be further subject to the approval of counsel for the
Company with respect to such compliance.
 
As a condition to the exercise of an option, the Company may require the person
exercising such option to represent and warrant at the time of any such exercise
that the shares are being purchased only for investment and without any present
intention to sell or distribute such shares if, in the opinion of counsel for
the Company, such a representation is required by any of the aforementioned
applicable provisions of law.
 
23.    Term of Plan.    The Plan shall become effective upon the earlier to
occur of its adoption by the Board or its approval by the shareholders of the
Company. It shall continue in effect for a term of ten (10) years unless sooner
terminated under Section 20.

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24.    No Enlargement of Employee Rights.    Nothing contained in the Plan shall
be deemed to give any Employee the right to be retained in the employ of any
Employer or to interfere with the right of the Employer to discharge any
Employee at any time.
 
25.    Automatic Transfer to Low Price Offering Period.    To the extent
permitted by any applicable laws, regulations, or stock exchange rules if the
Fair Market Value of the Common Stock on any Exercise Date in an Offering Period
is lower than the Fair Market Value of the Common Stock on the Enrollment Date
of such Offering Period, then all participants in such Offering Period shall be
automatically withdrawn from such Offering Period immediately after the exercise
of their option on such Exercise Date and automatically re-enrolled in the
immediately following Offering Period. The new Offering Period shall commence on
the last Exercise Date of the immediately preceding Offering Period after all
options have been exercised on such Exercise Date.

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