exv10w2



 





Exhibit 10.2




RealNetworks, Inc.




2007 EMPLOYEE STOCK PURCHASE PLAN



1. Purpose. The purpose of the Plan is to provide employees of the Company and its
Designated Subsidiaries with an opportunity to purchase Common Stock through accumulated payroll
deductions. The Company’s intention is to have the Plan qualify as an “employee stock purchase
plan” under Section 423 of the Code. The provisions of the Plan, accordingly, will be construed so
as to extend and limit Plan participation in a uniform and nondiscriminatory basis consistent with
the requirements of Section 423 of the Code. In addition, the Plan authorizes the grant of options
that would not qualify under Section 423 of the Code pursuant to rules, procedures, or sub-plans
adopted by the Administrator designed to achieve desired tax or other objectives in particular
locations outside the United States.



2. Definitions.




     (a) “Administrator” means the Board or any Committee designated by the Board to administer the
Plan pursuant to Section 14.



     (b) “Applicable Laws” means the requirements relating to the administration of equity-based
awards under U.S. state corporate laws, U.S. federal and state securities laws, the Code, any stock
exchange or quotation system on which the Common Stock is listed or quoted and the applicable laws
of any foreign country or jurisdiction where participants in the Plan are located.



     (c) “Board” means the Board of Directors of the Company.



     (d) “Change in Control” means the occurrence of any of the following events:



          (i) Any “person” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act)
becomes the “beneficial owner” (as defined in Rule 13d-3 of the Exchange 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; or




          (ii) The consummation of the sale or disposition by the Company of all or substantially all of
the Company’s assets; or




          (iii) 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.




     (e) “Code” means the Internal Revenue Code of 1986, as amended. Any reference to a section of
the Code herein will be a reference to any successor or amended section of the Code.



     (f) “Committee” means a committee of the Board appointed in accordance with Section 14 hereof.



     (g) “Common Stock” means the common stock of the Company.



     (h) “Company” means RealNetworks, Inc., a Washington corporation.



     (i) “Compensation” means all cash salary, wages, bonuses, commissions and other amounts paid
to or on behalf of a Participant for services performed or on account of holidays, vacation, sick
leave or other similar events, including any amounts by which such amounts are reduced, at the
election of a Participant, pursuant to a cafeteria plan described in Section 125 of the Code, a
dependent care assistance program described in Section 129 of the Code, a cash or deferred
arrangement described in Section 401(k) of the Code, or any similar plan, program or arrangement,
but excluding the value of any noncash benefits under any employee benefit plans and any special
amounts paid to the Participant that are specifically excluded by the Committee.



     (j) “Designated Subsidiary” means any Subsidiary that has been designated by the Administrator
from time to time in its sole discretion as eligible to participate in the Plan.



     (k) “Director” means a member of the Board.



     (l) “Eligible Employee” means any individual who is a common law employee of the Company or
any of its current majority-owned subsidiaries (and each other corporation designated by the
Committee that hereafter becomes a majority-owned subsidiary of the Company), except the following:
(a) employees who have been employed for less than 30 days; (b) employees whose customary
employment is 20 hours or less per week; and (c) employees whose customary employment is for not
more than five months in any calendar year, unless for participants outside the United States, such
limitations in eligibility are not permitted under Applicable Laws outside the United States.
Except as otherwise expressly provided in the Plan and permitted by Section 423 of the



-1-









 




Code, all Eligible Employees shall have the same rights and obligations under the Plan. For
purposes of the Plan, the employment relationship will be treated as continuing intact while the
individual is on sick leave or other leave of absence that the Employer approves.




     (m) “Employer” means any one or all of the Company and its Designated Subsidiaries.



     (n) “Exchange Act” means the Securities Exchange Act of 1934, as amended, including the rules
and regulations promulgated thereunder.



     (o) “Exercise Date” means the first Trading Day on or before June 30 and December 31 of each
year. The first Exercise Date under the Plan will be June 30, 2008.



     (p) “Fair Market Value” means, as of any date and unless the Administrator determines
otherwise, 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, its Fair Market Value will be the
closing sales price for such 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 will 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; or




          (iii) In the absence of an established market for the Common Stock, the Fair Market Value
thereof will be determined in good faith by the Administrator.



     (q) “Fiscal Year” means the fiscal year of the Company.



     (r) “New Exercise Date” means a new Exercise Date set by shortening any Offering Period then
in progress.



     (s) “Offering Date” means the first Trading Day of each Offering Period.



     (t) “Offering Periods” means the periods of approximately six months during which an option
granted pursuant to the Plan may be exercised, (i) commencing on the first Trading Day on or after
January 1 of each year and terminating on the first Trading Day on or before June 30, approximately
six months later, and (ii) commencing on the first Trading Day on or after July 1 of each year and
terminating on the first Trading Day on or before December 31, approximately six months later;
provided, however, that the first Offering Period under the Plan will commence with the first
Trading Day on or after January 1, 2008 and end on the first Trading Day on or before June 30,
2008; and provided, further, that the second Offering Period under the Plan will commence on the
first Trading Day on or after Junly 1, 2008. The duration and timing of Offering Periods may be
changed pursuant to Sections 4 and 19.



     (u) “Parent” means a “parent corporation,” whether now or hereafter existing, as defined in
Section 424(e) of the Code.



     (v) “Plan” means this RealNetworks, Inc. 2007 Employee Stock Purchase Plan.



     (w) “Purchase Period” means the period during an Offering Period during which shares of Common
Stock may be purchased on a participant’s behalf in accordance with the terms of the Plan. Unless
the Administrator provides otherwise, the Purchase Period will have the same duration and coincide
with the length of the Offering Period.



     (x) “Purchase Price” means an amount equal to eighty-five percent (85%) of the Fair Market
Value of a share of Common Stock on the Exercise Date; provided however, that the Purchase Price
may be determined for subsequent Offering Periods by the Administrator subject to compliance with
Section 423 of the Code (or any successor rule or provision or any other applicable law, regulation
or stock exchange rule) or pursuant to Section 19.



     (y) “Subsidiary” means a “subsidiary corporation,” whether now or hereafter existing, as
defined in Section 424(f) of the Code.



     (z) “Trading Day” means a day on which the national stock exchange upon which the Common Stock
is listed is open for trading.


3. Eligibility.




     (a) Offering Periods. Any Eligible Employee on a given Offering Date will be eligible to
participate in the Plan, subject to the requirements of Section 5.



     (b) Limitations. Any provisions of the Plan to the contrary notwithstanding, no Eligible
Employee will be granted an option under the Plan (i) to the extent that, immediately after the
grant, such Eligible Employee (or any other person whose stock would be attributed to such Eligible
Employee pursuant to Section 424(d) of the Code) would own capital stock of the Company or



-2-









 




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 of 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 will be implemented by consecutive Offering Periods with a
new Offering Period commencing on the first Trading Day on or after January 1 and July 1 each year,
or on such other date as the Administrator will determine. The Administrator will 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 prior to the scheduled
beginning of the first Offering Period to be affected thereafter.



5. Participation. An Eligible Employee may participate in the Plan pursuant to Section 3(a)
by (i) submitting to the Company’s stock plan administration office (or its designee), on or before
a date prescribed by the Administrator prior to an applicable Offering 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 will elect
to have payroll deductions made on each pay day during the Offering Period in an amount not
exceeding ten percent (10%) of the Compensation which he or she receives on each pay day during the
Offering Period, provided, however, that no Participant may apply payroll deductions in excess of
$10,000 toward the purchase of Common Stock under the Plan during any calendar year. The Committee
may set such minimum level of payroll deductions as the Committee determines to be appropriate. Any
minimum level of deductions set by the Committee shall apply equally to all Eligible Employees. A
participant’s subscription agreement will remain in effect for successive Offering Periods unless
terminated as provided in Section 10 hereof.



     (b) A Participant in the Plan on the last day of an Offering Period shall automatically
continue to participate in the Plan during the next Offering Period unless he or she withdraws in
the manner described in Section 10.



     (c) All payroll deductions made for a participant will be credited to his or her account under
the Plan and will be withheld in whole percentages only. A participant may not make any additional
payments into such account. A Participant’s accumulated payroll deductions shall remain the
property of the Participant until applied toward the purchase of shares of Common Stock under the
Plan, but may be commingled with the general funds of the Company. No interest will be paid on
payroll deductions accumulated under the Plan.



     (d) A participant may discontinue his or her participation in the Plan as provided in Section
10, and may not increase or decrease the rate of his or her payroll deductions during an Offering
Period (it being understood that a participant may increase or decrease his or her payroll
deductions for future Offering Periods prior to the commencement of any such Offering Period). Any
change of a participant’s contribution rate for future Offering Periods may be accomplished by (i)
properly completing and submitting to the Company’s stock plan administration office (or its
designee), on or before a date prescribed by the Administrator 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 will continue at the originally elected rate throughout future
Offering Periods (unless terminated as provided in Section 10).



     (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 an Offering Period. Subject to Section 423(b)(8) of the Code and Section 3(b)
hereof, payroll deductions will recommence at the rate originally elected by the participant
effective as of the beginning of the first Offering 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 or Employer’s federal, state, or any other tax liability payable to any
authority, national insurance, social security 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 or the Employer may, but will not be obligated to, withhold from the participant’s
compensation the amount necessary for the Company or the Employer to meet applicable withholding
obligations, including any withholding required to make available to the Company or the Employer
any tax deductions or benefits attributable to sale or early disposition of Common Stock by the
Eligible Employee.


7. Grant of Option. On the Offering Date of each Offering Period, each Eligible Employee
participating in such Offering Period will be granted an option to purchase on each Exercise Date
during such Offering Period (at the applicable Purchase Price) up




-3-









 







to a number of shares of Common Stock determined by dividing such Eligible Employee’s payroll
deductions accumulated prior to such Exercise Date and retained in the Eligible Employee’s account
as of the Exercise Date by the applicable Purchase Price; provided that such purchase will be
subject to the limitations set forth in Sections 3(b) and 13. The Eligible Employee may accept the
grant of such option by electing to participate in the Plan in accordance with the requirements of
Section 5. Exercise of the option will occur as provided in Section 8, unless the participant has
withdrawn pursuant to Section 10. The option will 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 will be exercised automatically on the Exercise Date,
and the maximum number of full shares subject to option will 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 will be purchased; any payroll deductions accumulated in a
participant’s account which are not sufficient to purchase a full share will be retained in the
participant’s account for the subsequent Offering Period, subject to earlier withdrawal by the
participant as provided in Section 10. Any other funds left over in a participant’s account after
the Exercise Date will 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.



     (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 Offering 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 provide that the Company will make
a pro rata allocation of the shares of Common Stock available for purchase on such Offering Date or
Exercise Date, as applicable, in as uniform a manner as will be practicable and as it will
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
terminate all Offering Periods then in effect pursuant to Section 19. The Company may make a pro
rata allocation of the shares available on the Offering Date of any applicable Offering Period
pursuant to the preceding sentence, notwithstanding any authorization of additional shares for
issuance under the Plan by the Company’s shareholders subsequent to such Offering Date.


9. Delivery. As soon as reasonably practicable after each Exercise Date on which a
purchase of shares of Common Stock occurs, the Company will arrange the delivery to each
participant the shares purchased upon exercise of his or her option in a form determined by the
Administrator (in its sole discretion) and pursuant to rules established by the Administrator. The
Company may permit or require that shares be deposited directly with a broker designated by the
Company or to a designated agent of the Company, and the Company may utilize electronic or
automated methods of share transfer. The Company may require that shares be retained with such
broker or agent for a designated period of time and/or may establish other procedures to permit
tracking of disqualifying dispositions of such shares. No participant will 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) 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 at any time by (i)
submitting to the Company’s payroll office (or its designee) a written notice of withdrawal in the
form prescribed by the Administrator for such purpose, or (ii) following an electronic or other
withdrawal procedure prescribed by the Administrator. All of the participant’s payroll deductions
credited to his or her account will be paid to such participant promptly after receipt of notice of
withdrawal and such participant’s option for the Offering Period will be automatically terminated,
and no further payroll deductions for the purchase of shares will be made for such Offering Period.
If a participant withdraws from an Offering Period, payroll deductions will 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 will 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.


11. Termination of Employment. Upon a participant’s ceasing to be an Eligible Employee,
for any reason, he or she will 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
purchase shares of Common Stock under the Plan will 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 will be automatically terminated.



12. Interest. No interest will accrue on the payroll deductions of a participant in the
Plan, unless required by non-United States Applicable Laws for participants outside the United
States.



13. Stock.




-4-









 








     (a) Subject to adjustment upon changes in capitalization of the Company as provided in Section
18 hereof, the maximum number of shares of Common Stock which will be made available for sale under
the Plan will be One Million Five Hundred Thousand (1,500,000) shares.



     (b) Until the shares are issued (as evidenced by the appropriate entry on the books of the
Company or of a duly authorized transfer agent of the Company), a participant will only have the
rights of an unsecured creditor with respect to such shares, and no right to vote or receive
dividends or any other rights as a shareholder will exist with respect to such shares.



     (c) Shares of Common Stock to be delivered to a participant under the Plan will be registered
in the name of the participant or in the name of the participant and his or her spouse, or in the
name of a bank or broker nominee designated to hold such shares for the benefit of the participant
in an account established in the participant’s name.


14. Administration. The Plan will be administered by the Board or a Committee appointed by
the Board, which Committee will be constituted to comply with Applicable Laws. The Administrator
will 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,
including, without limitation, as further provided in Section 24. Every finding, decision and
determination made by the Administrator will, to the full extent permitted by law, be final and
binding upon all parties.



15. 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 of Common Stock 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 hereof) by the participant. Any
such attempt at assignment, transfer, pledge or other disposition will be without effect, except
that the Company may treat such act as an election to withdraw funds from an Offering Period in
accordance with Section 10 hereof.



16. Use of Funds. The Company may use all payroll deductions received or held by it under
the Plan for any corporate purpose, and the Company will not be obligated to segregate such payroll
deductions. Until shares of Common Stock are issued, participants will only have the rights of an
unsecured creditor with respect to such shares.



17. Reports. Individual accounts will be maintained for each participant in the Plan.
Statements of account will be given to participating Eligible Employees at least annually, which
statements will set forth information including the Purchase Price, the number of shares of Common
Stock purchased and the remaining cash balance, if any.



18. Adjustments, Dissolution, Liquidation, Merger or Change in Control.




     (a) Adjustments. In the event that any dividend or other distribution (whether in the
form of cash, Common Stock, other securities, or other property), recapitalization, stock split,
reverse stock split, reorganization, merger, consolidation, split-up, spin-off, combination,
repurchase, or exchange of Common Stock or other securities of the Company, or other change in the
corporate structure of the Company affecting the Common Stock occurs, the Administrator, in order
to prevent dilution or enlargement of the benefits or potential benefits intended to be made
available under the Plan, will, in such manner as it may deem equitable, adjust the number and
class of Common Stock which may be delivered under the Plan, 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, and the numerical limits of Sections 7 and 13.



     (b) Dissolution or Liquidation. In the event of the proposed dissolution or
liquidation of the Company, any Offering Period then in progress will be shortened by setting a New
Exercise Date, and will terminate immediately prior to the consummation of such proposed
dissolution or liquidation, unless provided otherwise by the Administrator. The New Exercise Date
will be before the date of the Company’s proposed dissolution or liquidation. The Administrator
will 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 will 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
hereof.



     (c) Merger or Change in Control. In the event of a merger or Change in Control, each
outstanding option will 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, the Offering Period with respect to which such
option relates will be shortened by setting a New Exercise Date and will end on the New Exercise
Date. The New Exercise Date will occur before the date of the Company’s proposed merger or Change
in Control. The Administrator will notify each participant in writing 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 will 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
hereof.


19. Amendment or Termination.




     (a) The Administrator, 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 Administrator, in
its discretion, may elect to terminate all outstanding Offering Periods either immediately or upon
completion of the purchase of shares of Common Stock on the next Exercise Date (which may be



-5-









 




accomplished by the Administrator setting a New Exercise Date in its discretion), or may elect
to permit Offering Periods to expire in accordance with their terms (and subject to any adjustment
pursuant to Section 18). If the Offering Periods are terminated prior to expiration, all amounts
then credited to participants’ accounts which have not been used to purchase shares of Common Stock
will be returned to the participants (without interest thereon, except as otherwise required under
local laws) as soon as administratively practicable.




     (b) Without shareholder consent and without limiting Section 19(a), the Administrator will 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.



     (c) In the event the Administrator determines that the ongoing operation of the Plan may
result in unfavorable financial accounting consequences, the Administrator may, in its discretion
and, to the extent necessary or desirable, modify, amend or terminate the Plan to reduce or
eliminate such accounting consequence including, but not limited to:



          (i) amending the Plan to conform with the safe harbor definition under Statement of Financial
Accounting Standards 123(R), including with respect to an Offering Period underway at the time;




          (ii) altering the Purchase Price for any Offering Period including an Offering Period underway
at the time of the change in Purchase Price;




          (iii) shortening any Offering Period by setting a New Exercise Date, including an Offering
Period underway at the time of the Administrator action;




          (iv) reducing the maximum percentage of Compensation a participant may elect to set aside as
payroll deductions; and




          (v) reducing the maximum number of Shares a participant may purchase during any Offering
Period or Purchase Period.




     Such modifications or amendments will not require shareholder approval or the consent of any
Plan participants.


20. Notices. All notices or other communications by a participant to the Company under or
in connection with the Plan will be deemed to have been duly given when received in the form and
manner specified by the Company at the location, or by the person, designated by the Company for
the receipt thereof.



21. Conditions Upon Issuance of Shares. Shares of Common Stock will not be issued with
respect to an option unless the exercise of such option and the issuance and delivery of such
shares pursuant thereto will comply with all applicable provisions of law, domestic or foreign,
including, without limitation, the Securities Act of 1933, as amended, the Exchange Act, the rules
and regulations promulgated thereunder, and the requirements of any stock exchange upon which the
shares may then be listed, and will 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.


22. Term of Plan. The Plan will become effective upon the earlier to occur of its adoption
by the Board or its approval by the shareholders of the Company. It will continue in effect for a
term of twenty (20) years, unless sooner terminated under Section 20.



23. Shareholder Approval. The Plan will be subject to approval by the shareholders of the
Company within twelve (12) months after the date the Plan is adopted by the Board. Such shareholder
approval will be obtained in the manner and to the degree required under Applicable Laws.



24. Rules for Non-United States Jurisdictions.




     (a) Special Rules or Procedures. Notwithstanding any provision to the contrary in
this Plan, the Administrator may adopt rules or procedures relating to the operation and
administration of the Plan to accommodate the specific requirements of local laws and procedures
for jurisdictions outside of the United States. Without limiting the generality of the foregoing,
the Administrator is specifically authorized to adopt rules and procedures regarding eligibility to
participate, the definition of Compensation, handling of payroll deductions, making of
contributions to the Plan in forms other than payroll deductions, establishment of bank or trust
accounts



-6-









 




to hold payroll deductions, payment of interest, conversion of local currency, obligations to
pay payroll tax, determination of beneficiary designation requirements, withholding procedures and
handling of stock certificates which vary with local requirements.




     (b) Non-423 Plan Rules, Procedures or Sub-Plans. The Administrator may also adopt
rules, procedures or sub-plans applicable to particular Designated Subsidiaries or locations, which
sub-plans may be designed to be outside the scope of Section 423 of the Code. Such rules,
procedures and sub-plans may take precedence over other provisions of this Plan, with the exception
of Sections 13(a) and 20, but unless otherwise superseded by such rules, procedures and sub-plans,
the provisions of this Plan shall govern the operation of such arrangements. To the extent
inconsistent with the requirements of Section 423 of the Code, the options affected by such rules,
procedures and sub-plans shall not be considered to comply with Section 423 of the Code.




-7-