Exhibit 4.03


 


 


EUROLOGIC SYSTEMS
GROUP LIMITED


 


 


 


 


 


 


1998
SHARE OPTION PLAN


 


RULES


 


(Amended as of 1 April 2003)


 


 


 


 


 


 


WILLIAM FRY


Solicitors


Fitzwilton House


Wilton Place


Dublin 2


 


013174.0001.MG/JR


 


 

















 


TABLE
OF CONTENTS


 


	
  1.

  	
   

  	
  DEFINITIONS AND INTERPRETATION

  
	
  2.

  	
   

  	
  ELIGIBILITY FOR PARTICIPATION

  
	
  3.

  	
   

  	
  GRANT OF OPTIONS

  
	
  4.

  	
   

  	
  LIMIT

  
	
  5.

  	
   

  	
  MANAGEMENT AGREEMENT

  
	
  6.

  	
   

  	
  EXERCISE AND LAPSE OF OPTIONS

  
	
  7.

  	
   

  	
  DEATH OF PARTICIPANT

  
	
  8.

  	
   

  	
  RETIREMENT/DISABILITY OF PARTICIPANT

  
	
  9.

  	
   

  	
  CESSATION OF EMPLOYMENT

  
	
  10.

  	
   

  	
  OFFERS FOR SHARE CAPITAL

  
	
  11.

  	
   

  	
  CESSATION EVENT

  
	
  12.

  	
   

  	
  RECONSTRUCTION AND WINDING UP

  
	
  13.

  	
   

  	
  VARIATION OF CAPITAL

  
	
  14.

  	
   

  	
  ADJUSTMENTS UPON CHANGES IN CAPITALIZATION,
  MERGER, ASSET SALE OR CHANGE IN CONTROL

  
	
  15.

  	
   

  	
  ALTERATIONS

  
	
  16.

  	
   

  	
  ISOS

  
	
  17.

  	
   

  	
  CANCELLATION OF NEW GRANT OF OPTIONS, ETC.

  
	
  18.

  	
   

  	
  TERMINATION

  
	
  19.

  	
   

  	
  MISCELLANEOUS

  
	
  APPENDIX 1

  
	
  APPENDIX 2

  
	
  APPENDIX 3

  
	
  APPENDIX 4

  



 


 


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EUROLOGIC
SYSTEMS GROUP LIMITED (the “Company”)


 


1998
SHARE OPTION PLAN


 


Introduction


 


This 1998 Share Option Plan (the “Plan”) is
intended to promote the interests of the Company by providing eligible persons
with the opportunity to acquire a proprietary interest or otherwise increase
their proprietary interest in the Company or its Parent (as defined below) as
an incentive for them to remain in the service of the Company.  The grant of options shall be entirely at the
discretion of the Board and is not a standard employee benefit.  Options granted pursuant to the Plan may be
either incentive stock options (“ISOs) meeting the requirements of Section 422
of the U.S. Internal Revenue Code of 1986 as amended from time to time (the
“Code”) or non-qualified options (“NSOs) which are not intended to meet the
requirements of Section 422 of the Code. 
Those provisions of the Rules which make express reference to Section
422 of the Code shall apply only to ISOs. 
The term “Option” shall be construed as referring to both ISOs and NSOs
except where the context otherwise requires.


 


1.                            Definitions and Interpretation


 


(a)                        In these Rules, unless the
context otherwise requires:


 


(i)                          “Adoption Date”, the date with effect from
which these Rules are adopted by the Board.


(ii)                       “April 2003 Amendments” means
the amendments to this Plan adopted by the Board on 1 April 2003.


 


(iii)                    “Board”, the Board of Directors of the
Company or a duly constituted committee thereof or other administrator of the
Plan appointed by such Board or committee thereof.


 


(iv)                   “Cause”, means (A) any act of personal
dishonesty taken by the Participant in connection with his responsibilities as
a service provider to a 


 


 


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Qualifying Company and intended to result in
substantial personal enrichment of the Participant, (B) the Participant’s
conviction of a felony, or (C) a wilful act by the Participant which
constitutes gross misconduct and which is injurious to a Qualifying Company, or
(D) continued substantial violations by the Participant of the Participant’s
duties to a Qualifying Company which are demonstrably wilful and deliberate on
the Participant’s part after there has been delivered to the Participant a
written demand for performance from a Qualifying Company  which specifically sets forth the factual
basis for such company’s  belief that
the Participant has committed continued substantial violations of his or her
duties.


 


(v)       “Change
in Control”, means


 


A.                  When any “person,” as such term is used in
Sections 13(d) and 14(d) of the United States Securities Exchange Act (other
than Parent, a Qualifying Company, a subsidiary of Parent or a Parent employee
benefit plan, including any trustee of such plan acting as trustee) is or
becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange
Act), directly or indirectly, of securities of Parent representing fifty
percent (50%) or more of the combined voting power of Parent’s then outstanding
securities; or


 


B.                    A change in the composition of the Board of
Directors of Parent occurring within a two-year period, as a result of which
fewer than a majority of the directors are Incumbent Directors. “Incumbent
Directors” shall mean directors who either (I) are directors of Parent as of
the date of the April 2003 Amendments, or (II) are elected, or nominated for
election, to the Board of Parent with the affirmative votes of at least a
majority of the Incumbent Directors at the time of such election or nomination
(but shall not include an individual whose election or nomination is in
connection with an actual or threatened proxy contest relating to the election
of directors to Parent);


 


 


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C.                    The consummation of a merger or
consolidation of Parent with any other corporation, other than a merger or
consolidation which would result in the voting securities of Parent outstanding
immediately prior thereto continuing to represent (either by remaining
outstanding or by being converted into voting securities of the surviving
entity) at least fifty percent (50%) of the total voting power represented by
the voting securities of Parent or such surviving entity outstanding
immediately after such merger or consolidation; or


 


D.                   The consummation of the sale or disposition
by Parent of all or substantially all of Parent’s assets.


 


(vi)                   “Control”, has the same meaning as in
Section 11, Taxes Consolidation Act, 1997.


 


(vii)                “Code”, “ISOs” and “NSOs” shall have the
meanings given to such terms in the Introduction on page 1 to these Rules.


 


(viii)             “Disability”, the total and permanent
disability of the Participant, as defined in Section 22(e)(3) of the Code.


 


(ix)                     “Employee”,


 


A.                         in the case of NSOs:


 


I.                               an employee of a company which
is a Qualifying Company and who is required to devote substantially the whole
of his/her time to the service of a Qualifying Company (including such an
employee temporarily absent from his/her employment for some purpose approved
by the Board); or


 


II.                           a director of a company which
is a Qualifying Company;


 


 


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provided, however, that the Board shall have the discretion, on an
Employee by Employee basis and/or an Option by Option basis, to provide that an
individual who was an Employee at the time of grant of an Option and who
subsequently enters into employment with an entity which is not a Qualifying
Company will continue to be an Employee for purposes of the Plan through such
individual’s period of service with such entity or such shorter time period as
the Board may determine;


 


B.                           in the case of ISOs, a person
who is in the employment, as such term is defined in accordance with the
provisions of Section 1.421-7(h) of the U.S. Income Tax Regulations (or any
successor regulations), of a Qualifying Company;


 


(x)                        “Fair Market Value”, means (i)
if the common stock is listed on any established stock exchange or a national
market system, including without limitation the National Market System of the
National Association of Securities Dealers, Inc. Automated Quotation (“NASDAQ”)
System, the Fair Market Value of a share of common stock shall be the closing
sales price for such stock (or the closing bid, if no sales were reported) as
quoted on such system or exchange (or the exchange with the greatest volume of
trading in common stock) on the last market trading day prior to the day of
determination, as reported in the Wall Street Journal or such other source as
the administrator deems reliable; (ii) if the common stock is quoted on the
NASDAQ System (but not on the National Market System thereof) or regularly
quoted by a recognized securities dealer but selling prices are not reported,
the Fair Market Value of a share of common stock shall be the mean between the
high and low asked prices for the common stock or on the last market trading
day prior to the day of determination, as reported in the Wall Street Journal
or such other source as the Board  deems
reliable; or (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 Board


(xi)                     “Grant Date”, in relation to an Option
means the date on which the Option is granted.


 


 


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(xii)                  “Holding Company”, the meaning assigned to
such term in Section 155, Companies Act, 1963.


 


(xiii)               “Letter of Offer”, a letter issued under
Clause 3 of these Rules offering an Employee an Option on the terms set out in
such letter subject to the provisions of these Rules.


 


(xiv)              “Management Agreement”, an agreement to be
entered into, upon every exercise by a Participant of an Option, subject to
Clause 5, between such Participant and a management company designated at the
Grant Date of such Option by the Board (or, as the case may be, its successor),
governing the registered ownership, management, voting, sale, and exercise of
rights in relation to all of the Shares the subject matter of such exercise,
the form whereof shall be in the form approved by the Board at or prior to the
Adoption Date, or in such other form as may be approved by the Board and
notified to the Participant prior to the Grant Date of the Option to which such
amended form shall apply.


 


(xv)                 “Market Value”, the price which each Share
might reasonably expect to obtain on a sale in the open market determined by
the Auditors as at the Grant Date.


 


(xvi)              “Option”, an option granted subject to
these Rules, provided that an option which:


 


A.                         has been cancelled by
agreement between the holder thereof and the Company; or


 


B.                           has ceased to be capable of
exercise for any reason whatsoever (or, in the case of any option which has
only partially ceased to be capable of exercise, such part thereof as shall
have so ceased);


 


shall be deemed not to be an Option for any
of the purposes of these Rules.


 


 


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(xvii)                     “Option Certificate”, the certificate given
by the Company to the Participant pursuant to Clause 3(e) hereof.


 


(xviii)                  “Option Price”, the price payable for a
Share comprised in any Option, which shall be determined by the Board and shall
not, in the case of an ISO, be less than 100% of the Market Value of such Share
or less than 110% of the Market Value of such Share in the case of Options
described at Clause 16(b) below or in any case be less than the nominal value
of a Share.


 


(xix)                “Option Shares”, such of the ordinary
shares in the capital of the Company as are issued pursuant or subject to these
Rules; provided, however, that following the Sale, “Option Shares” shall mean
shares of the Common Stock of Parent.


 


(xx)                   “Parent” means Adaptec, Inc., a United
States company incorporated in the State of Delaware, subject to the completion
of the Sale.


 


(xxi)                “Participant”, a person who is the holder
of an Option or of Shares held pursuant to the exercise of an Option or the
personal representatives of a person who was the holder of an Option or of
Shares held pursuant to the exercise of an Option immediately prior to his
death.


 


(xxii)             “Qualifying Company”, Parent, the Company
and every other body corporate which is a subsidiary (within the meaning of
Section 155, Companies Act, 1963) of the Company or of Parent.


 


(xxiii)          “Relevant Shares”, in respect of any
Participant, all Option Shares held by him or on his behalf by the Manager, and
all Shares acquired by him or the Manager on his behalf as a direct or indirect
result of his holding of Option Shares.


 


(xxiv)         “Rules”, these Rules subject to any
alterations or additions made under Clause 15 below.


 


 


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(xxv)            “Sale” means the transaction contemplated
by that certain Share Purchase Agreement by and among the Company, Adaptec CI,
Ltd., a Cayman Islands limited liability company, Parent, and the shareholders
of the Company dated [31] March 2003.


 


(xxvi)         “Securities Exchange”, any market on the
Irish Stock Exchange Limited, the London Stock Exchange Limited, NASDAQ and/or
EASDAQ as appropriate and/or any other recognised stock exchange or securities
market in any other Member State of the European Union or the United States of America.


 


(xxvii)      “Share”, an Ordinary Share of IR10p in the
capital of the Company and the term “Shares” shall be construed accordingly;
provided, however, that following the Sale, “Share” shall mean a share of
Common Stock of Parent.


 


(xxviii)   “Vested Option”, an option or any instalment thereof
which is exercisable.


 


(xxix)           “Vesting Date”, the day upon which the
Option or any instalment thereof first becomes exercisable.


 


(xxx)              “Vesting Period”, the period during which
the Option or any instalment thereof can be exercised.


 


(b)                       Any reference in these Rules
to any enactment includes a reference to that enactment as from time to time
modified, extended or re-enacted.


 


(c)                        For the avoidance of doubt it
is hereby declared that these Rules shall extend to all of the companies which
are for the time being Subsidiaries of the Company.


 


2.                            Eligibility for Participation


 


No
person shall be entitled as of right to an Option and the Board may from time
to time, subject to these Rules but otherwise in its absolute discretion decide
who shall 


 


 


9

















 


have
the opportunity of receiving Options and the time, extent, commencement and
determination thereof.


 


3.                            Grant of Options


 


(a)                        The Plan shall become
effective on the Adoption Date and Options may be granted under the Plan during
the period expiring ten years from the Adoption Date provided that no ISOs
granted under the Plan shall become exercisable unless and until the Plan shall
have been approved by the Company’s shareholders.  If such shareholder approval is not obtained prior to or within
twelve months after the Adoption Date, ISOs previously granted under the Plan
shall not vest and shall terminate and no further ISOs shall be thereafter
granted.


 


(b)                       At such time as it shall in
its absolute discretion determine the Board may offer to any Employee an Option
under these Rules.


 


(c)                        Each offer issued hereunder
shall be in writing and shall:


 


(i)                          specify the number of Shares
to be subject to the Option which may vest either in full or in instalments on
different Vesting Dates and for different Vesting Periods as shall be specified
in the Letter of Offer;


 


(ii)                       specify the Option Price to be
payable for each Share under the Option, which shall be determined by the
Board;


 


(iii)                    specify the Vesting Date(s) and Vesting
Period(s);


 


(iv)                   specify the terms and conditions (if any)
attaching to exercise of the Option;


 


(v)                      specify the manner in which
the Employee should accept the offer;


 


(vi)                   specify whether the Option shall be an ISO or
a NSO;


 


 


 


 


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(vii)                refer the Employee to these Rules; and


 


(viii)             subject as aforesaid, be given in such form
and manner as the Board may from time to time prescribe.


 


(d)                       Acceptance by an Employee of an
offer hereunder shall be valid only if:


 


(i)                          it contains an agreement by
the Employee to be bound by all the provisions of these Rules; and


 


(ii)                       it is otherwise made in such
form and manner as the Board may from time to time prescribe.


 


(e)                        As soon as reasonably
practicable after the Grant Date, the Board shall issue to the Participant a
certificate or stock option agreement which shall:


 


(i)                          specify the Grant Date;


 


(ii)                       specify the number of Shares
subject to the Option, and if an Option is comprised of instalments, the number
of Shares the subject of each such instalment;


 


(iii)                    specify the Option Price payable for each
Share under the Option;


 


(iv)                   specify the Vesting Date(s) and Vesting
Period(s);


 


(v)                      specify the terms and
conditions attaching to any exercise of the Option;


 


(vi)                   specify whether the Option shall be an ISO
or an NSO; and


 


(vii)                subject as aforesaid, be issued in such
form and manner as the Board shall from time to time prescribe.


 


 


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(f)                          Options shall be personal to
the Participant and shall be non-assignable and shall lapse forthwith if
(except in the case of the death of the Participant) it is purported to be
transferred, assigned, mortgaged, charged or otherwise disposed of by the Participant.


 


4.                            Limit


 


Subject
to adjustment as provided for in Clause 13 or Clause 14 below, the maximum
number of Shares which may be issued under the Plan is 1,834,147 Shares during
the ten-year term of the Plan.


 


5.                            Management Agreement


 


(a)                          It shall be a fundamental condition of both
the grant and the exercise of an Option that the Participant shall on exercise
thereof be required to enter into a Management Agreement in respect of all
Shares acquired by him/her thereunder, and to remain party thereto, observing
and performing all of the provisions thereof, throughout the period of his/her
ownership of such Shares, or (if earlier) until such Management Agreement shall
terminate; provided, however, that a Participant shall not be required to
execute a Management Agreement with respect to Options exercised on or after 21
April 2003 and with respect to Options exercised after the Sale and prior to 21
April 2003, the Board may waive, on a case by case basis, the requirement that
a Management Agreement be entered into by the Participant.


 


(b)                       Paragraph 5(a) of this Plan shall not apply to Options
granted on or after 1 April 2003.


 


6.                            Exercise and Lapse of Options


 


(a)                        The exercise of any Option or
any instalment thereof shall be effected by a notice in writing (or via
electronic transmission) by the Participant to the Company  (provided that following completion of the
Sale such notice shall be given to Parent or its designee) which shall:


 


(i)                          specify the number of Shares
in respect of which the Option is exercised;


 


 


12

















 


(ii)                       be accompanied by payment to
the Company of an amount equal to the product of the number of Shares so
specified and the Option Price payable for each fully paid-up Share under the
Option;


 


(iii)                    if applicable, be accompanied by a
Management Agreement in the form applicable to such Option, duly executed by
the Participant;


 


(iv)                   unless the Board otherwise permits, be
accompanied by the certificate issued in respect of the Option; and


 


(v)                      subject as aforesaid, be given
in such form and manner as the Board may from time to time prescribe.


 


(b)                       Subject to Clauses 7, 8, 9,
10, 13 and 17 hereof, an Option or any instalment thereof shall be capable of
being exercised in whole or in part at any time within the Vesting Period
applicable to it as specified in the Option Certificate and at no other
times.  The Board shall in its sole
discretion have the right to:


 


(i)                          accelerate any Vesting Date
and/or Vesting Period ;


 


(ii)                       extend the Vesting Period of all
or any particular Option(s) or any instalment(s) thereof;


 


provided that the Board shall not, without the consent of a Participant
accelerate or extend the Vesting Date and/or Vesting Period of any instalment
of any Option granted to any Employee as an ISO (and not previously converted
into a NSO pursuant to Clauses 16(d) or (f)) if such acceleration or extension
would prejudice the favourable federal income tax treatment as may be afforded
to such ISO under the Code.


 


(c)                        Subject to Clauses 7, 8, 9, 10,
13 and 17 hereof and subject to Section (d) of this Clause 6 below, an Option
granted prior to 1 April 2003 shall lapse to the extent that it has not been
exercised by the earliest of:


 


 


13

















 


(i)                          the seventh anniversary of its
Grant Date;


 


(ii)                       the expiry of twelve months
from the date of death of the Participant;


 


(iii)                    the date upon which the Participant shall
cease to be an Employee for any reason other than the death or retirement of
such Participant, subject in such cases to the provisions of Clauses 7 and 8
respectively;


(iv)                   the date upon which the Participant tenders
his resignation as an Employee


(v)                      the date upon which the
Participant purports to transfer, assign, mortgage, charge or otherwise dispose
of an Option or any instalment thereof within the terms of Clause 3(f) above;


 


(vi)                   such earlier date as the Board may
prescribe when giving an Executive an offer of an Option.


(d)                       Subject to Clauses 7, 8, 9,
10, 13 and 17 hereof, an Option granted on or after 1 April 2003, and with
effect from 21 April 2003 an Option granted prior to 1 April 2003, shall lapse
to the extent that it has not been exercised by the earliest of:


 


(i)                          the seventh anniversary of its
Grant Date;


 


(ii)                       the expiry of twelve months
from the date of death of the Participant;


 


(iii)                    90
days following the date upon which the Participant shall cease to be an
Employee for any reason, other than death or disability (and in such case
subject to the provisions of Clauses 7 and 8, respectively);


 


(iv)                   the date upon which the Participant
purports to transfer, assign, mortgage, charge or otherwise dispose of an
Option or any instalment thereof within the terms of Clause 3(f) above;


 


 


14

















 


(v)                      such earlier date as the Board
may prescribe when giving an Executive an offer of an Option.


 


(e)                        Promptly after a notice
properly and validly exercising an Option has taken effect, the Participant
shall be allotted the number of Shares in respect of which the notice has taken
effect.


 


(f)                          If a Participant tenders his
resignation as an Employee, any Options or instalments thereof which have, on
or before the time of tendering of such resignation, been exercised but in
respect of which shares have not been allotted by or on behalf of the Company
pursuant to Clause 6(d), may by resolution of the Board be deemed to have
lapsed notwithstanding such exercise, whereupon the Board shall procure the
return to the Participant of the Option Price furnished with the applicable
notice of exercise and neither the Company nor its Board shall be under any
obligation to issue Option Shares in respect of any such exercise of an Option
or instalment thereof, provided however, that this Clause 6(f) shall not apply
to any Options from and after the completion of the Sale.


 


(g)                       As soon as reasonably
practicable after allotting any Shares, the Board on behalf of the Company
shall:


 


(i)                          issue to the Participant a
definitive share certificate or a renounceable allotment letter or a share
certificate in respect of the Shares so allotted; and


 


(ii)                       if the Option remains
partially unexercised, either amend the certificate issued to the Participant
pursuant to Clause 3(e) so as to indicate the number of Shares in respect of
which the Option may still be exercised, or issue to him/her a new certificate
which shall contain all the information which would have been contained in such
an amended certificate.


 


(h)                       All Shares allotted under
Options shall rank pari passu in all respects with the Shares for the time
being in issue save as regards any rights attaching to such Shares by reference
to a record date prior to the date of such allotment.


 


 


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7.                            Death of Participant


 


If a
Participant dies at a time when a Vested Option or any part thereof has not
been exercised by him/her, his/her legal personal representatives may, subject
to the conditions applicable thereto other than the condition in Clause 6(b),
exercise the Vested Option in whole or in part at any time within twelve months
from the date of his/her death.  On any
partial exercise of such an Option the balance of the rights then remaining
unexercised under such Option shall forthwith expire.  No Option may be exercised later than twelve months after the
date of death of a Participant and upon the expiration of such period the
Option shall expire to the extent that it has not been exercised.  Notwithstanding the foregoing provisions of
this Clause 7, in the event that following completion of the Sale a Participant
who holds an Option ceases to be an Employee by reason of his death, any Option
held by such Participant shall automatically accelerate and become fully vested
and exercisable and may be exercised in accordance with this Clause 7.


 


8.                            Retirement/Disability
of Participant


 


(a)                        Subject to the provisions of
Clause 8(b) below and subject to the provisions of Clause 16(d) in relation to
ISOs, if a Participant ceases to be an Employee:


 


(i)                          because he/she has retired on
or after reaching his/her normal retirement age; or


 


(ii)                       because of ill-health
compelling the Participant to retire;


 


then in
either case a Vested Option held by such Participant may, subject to the
conditions applicable thereto other than the condition in Clause 6(b), be exercised
at any time within twelve months (or such longer period as the Board may
determine) thereafter and shall, if and to the extent not previously exercised,
lapse on the expiry of such period.


 


(b)                       Notwithstanding
the foregoing, following completion of the Sale, the following provisions shall
apply to all Options and shall replace Clause 8(a):


 


 


16

















 


if a
Participant ceases to be an Employee by reason of Disability, his Vested Option
may be exercised at any time during the six-month period thereafter and shall,
if and to the extent not previously exercised, lapse on the expiry of such
period.


 


9.                            Cessation of Employment


 


(a)                        If a Participant shall cease
to be an Employee (either by virtue of cessation of his/her employment or
directorship otherwise than by reason of death or retirement pursuant to
Clauses 7 and 8, or by virtue of the company of which he/she is an employee or
director ceasing to be a Qualifying Company) at a time when an Option or part
thereof has not been exercised by him/her or has been so exercised but Shares
have not yet been allotted by the Board in respect of such exercise pursuant to
Clause 6(d), such Option and (if applicable) the exercise thereof shall
automatically lapse unless the Board in its absolute discretion decides that
such Option, or any portion thereof, shall subject to the conditions applicable
thereto be or continue to be exercisable on or after such termination; provided
however that no Option shall be exercisable or exercised later than the
expiration of the earlier of the following periods, whichever shall first
occur:


 


(i)                          the seventh anniversary of the
Grant Date thereof; or


 


(ii)                       twelve months after such
cessation.


 


(b)                       Notwithstanding
the provisions of Clause 9(a), following the completion of the Sale, if a
Participant who holds  Options shall
cease to be an Employee (either by virtue of cessation of his/her employment or
directorship otherwise than by reason of death or retirement pursuant to
Clauses 7 and 8, or by virtue of the company of which he/she is an employee or
director ceasing to be a Qualifying Company) at a time when an Option or part
thereof has not been exercised by him/her, such  Option,  to the extent
vested as of the Participant’s date of cessation of employment, will be
exercisable at any time during the 90-day period 


 


 


17

















 


after such date and, upon the expiry of such period,
shall lapse and cease to be exercisable.


 


(c)                        In no circumstances shall any
Participant ceasing to be an Employee be entitled to any compensation for any
loss of any right or benefit or prospective right or benefit under an Option
which he/she might otherwise have enjoyed, whether such compensation is claimed
by way of damages for wrongful dismissal or other breach of contract or by way
of compensation for loss of office or otherwise howsoever.


 


10.                     Offers
for Share Capital


 


(a)                        If any person shall acquire or
seek to acquire or shall obtain Control of the Company as a result of purchasing
or offering to purchase or of subscribing or offering to subscribe for Shares,
or if the Company shall determine to obtain or shall obtain a listing or
quotation or dealing facility of or for all or some of its shares on a
Securities Exchange, then, subject to Clause 10(c), at any time after becoming
aware of such acquisition or offer or after making such determination (as the
case may be) and before the expiry of thirty days after the completion thereof,
the Board may notify Participants of such offer, acquisition, subscription or
determination and, with respect to each unexercised Option, may;


 


(i)                          accelerate the Vesting Period
of such Option, in whole or in part, and/or require the Participant by notice
in writing to exercise such Option upon and in accordance with and subject to
the terms and conditions specified in the notice provided to the Participant
and to the other conditions applicable thereto hereunder (except that, to the
extent the Vesting Period is accelerated, the condition contained in Clause
6(b) shall not apply).  Upon service of
such a notice, the Participant shall be entitled for the period specified in
the notice (being not less than fourteen days) to exercise the Option in whole
or in part; or


 


(ii)                       in the event that a corporate
entity is to obtain Control of the Company as a result of purchasing or
offering to purchase Shares, notify the Participant, 


 


 


18

















 


that, the Option, to the extent not
exercised prior to a date specified by the Board in accordance with and subject
to the terms and conditions of such Option (including the condition in Clause
6(b)), shall, with the agreement of the acquiring entity and without further
consent of the Participant, be assumed by such entity (or Holding Company
thereof), provided the Participant is an Employee as
of the effective date of such assumption, and, in order to effect such
assumption, the Board may agree with the acquiring entity to make such
adjustments as the Board determines are fair and reasonable to the number of
Shares subject to each assumed Option and the Option Price payable per Share
provided, however, that in no event shall any such adjustment result in an
increase in the aggregate Option Price payable by the Participant in respect of
the Option.   Following such assumption,
the Option shall be exercisable for shares of the acquiring entity (or the
Holding Company thereof) subject to the terms and conditions which applied to
such Option (including the condition in Clause 6(b)) immediately prior to such
assumption.


 


(b)                       In the event of a Participant
failing to exercise during the specified time period an Option requested to be
exercised by him/her by the Board pursuant to sub-paragraph 10(a)(i) hereof,
such Option shall be deemed to have lapsed.


 


(c)                        Options
granted on or after 1 April 2003 but prior to completion of the  Sale shall be assumed by Parent upon the
closing of the Sale and, for the avoidance of doubt, such assumption shall not
require the Company to give notice to any Participant holding such an  Option, nor shall it require the consent of
any Participant holding such an Option.


 


(d)                       For the avoidance of doubt, in
the event the Board exercises its discretion pursuant to Clause 10(a) and a
Participant holds more than one Option, the Board may, in its sole discretion,
determine that sub-paragraph 10(a)(i) shall apply to one or more Options held
by such Participant and that sub-paragraph 10(a)(ii) shall apply to other
Options held by such Participant.


 


 


19

















 


(e)                        In the event that Options are
assumed by an acquiring entity pursuant to sub-paragraph 10(a)(ii), as of the
effective date of such assumption, all references in the Rules to the “Company”
shall be references to such acquiring entity and all references to “Shares”
shall be references to the shares of such entity (or Holding Company thereof)
issuable upon exercise of such assumed Options.


 


(f)                          Notwithstanding any other
provision of these Rules, and for the avoidance of doubt, in the event any
person shall obtain Control of the Company as contemplated by this Clause 10,
the holders of Options need not receive the same type or same amount of
consideration as is provided to the holders of Shares in connection with such
acquisition and instead shall receive the consideration, if any, provided for
in the agreement governing such acquisition, provided that such agreement has
been approved by the Board.


 


11.                     Cessation
Event


 


(a)                        In the event that a
Participant who has exercised an Option hereunder ceases to be an Employee (as
such term is defined in Clause 1(ix)(A) of these Rules) for any reason
whatsoever (such event being referred to hereafter as a “Cessation Event”),
then the Participant shall be obliged to offer for sale, and if accepted, sell
any or all Relevant Shares to the Company and/or to such person or persons as
the Board may direct by notice in writing on the terms set out in this Clause
11.  Notwithstanding the foregoing, this
Clause 11 shall not apply to any Options outstanding following completion of
the Sale.


 


(b)                       The Board shall be entitled to
require such an offer/offers to be made in respect of any or all of the
Relevant Shares on any one or more occasions within two years after a Cessation
Event.


 


(c)                        The price at which the Board
may direct Relevant Shares to be offered for sale hereunder shall be determined
as follows:


 


 


20

















 


(i)                          in respect of Relevant Shares
acquired by or on behalf of the Participant within one year prior to a
Cessation Event - all such Relevant Shares shall be offered for sale at the
actual price paid by the Participant therefor;


 


(ii)                       in respect of Relevant Shares
acquired by or on behalf of the Participant within three years prior to a
Cessation Event, but more than one year prior thereto -one-half of all such
Relevant Shares shall be offered for sale at the actual price paid by the
Participant therefor, and one-half of all such shares shall be sold at the
Relevant Market Value thereof as at the date upon which the Board requires such
Relevant Shares to be sold hereunder;


 


(iii)                    in respect of all other Relevant Shares -
such Relevant Shares shall be offered for sale at the Relevant Market Value
thereof as at the date upon which the Board requires such Relevant Shares to be
sold hereunder.


 


(d)                       For the purposes of this
Clause 11 the “Relevant Market Value” thereof as at any date shall mean in
respect of each Relevant Share:


 


(i)                          in any case where either the
Relevant Shares or Shares of the same class as the Relevant Shares are not
admitted to dealing on a Securities Exchange, the price agreed between the
Participant, whose Relevant Shares are required to be offered for sale pursuant
to this Clause 11, and the Board to be the fair market value thereof as between
a willing seller and a willing buyer as at the date of the written notice
pursuant to which the Board requires such Relevant Shares to be offered for
sale hereunder (the “Relevant Date”), or in default of such agreement, the
amount certified by the auditors of the Company for the time being as the fair
value per share as at the Relevant Date and in assessing the Relevant Market
Value the auditors shall value the Relevant Shares on the basis of an open
market as between a willing seller and a willing buyer and shall take account
of the liability due upon the Relevant Shares in respect of the balance of the
issue price thereof (if any), the proportion which the Relevant Shares shall
represent of the entire issued share capital of the Company and of any restriction
on rights attaching to the Relevant Shares. In their determination 


 


 


21

















 


the Auditors shall act as experts and not as
arbitrators and their decision shall, save in the case of manifest error be final
and binding; or


 


(ii)                       where the Relevant Shares or
Shares of the same class as the Relevant Shares are admitted to dealing or are
otherwise traded on a Securities Exchange, the average of the daily market
prices for the 10 consecutive trading days immediately preceding the Relevant
Date.  The market price for each such
trading day shall be the closing quotation price for each Share for each such
day on which there shall be a dealing on the relevant Securities Exchange as
published in daily official list of such exchange, and in respect of a day on
which there shall be no such dealing, the price which is equal to (a) the
midpoint between the high and low market guide prices in respect of such Share
as published in the daily official list of the relevant Securities Exchange or
(b) if there shall be only one such market guide price so published, the market
price so published.  In the event that
the Relevant Shares are admitted to dealing or are otherwise traded on more
than one Securities Exchange, the Relevant Market Value shall be determined by
reference to the market price quoted on the exchange which constitutes the
primary listing of/trading facility for the Relevant Shares.


 


(e)                        The Participant shall upon the
sale as outlined above, be indemnified by the purchaser thereof against all
outstanding liabilities (if any) in respect of the balance of the issue price.


 


(f)                          The Board shall have absolute
discretion to waive any or all of the provisions of this Clause 11 upon such
terms as it deems fit.


 


(g)                       The Participant shall be bound
to transfer such Relevant Shares and surrender the Share Certificate in respect
thereof to the Purchaser thereof at such time and place as the Board may from
time to time direct and if the Participant shall fail to do so for the purposes
of this Clause the Participant shall be deemed to have appointed the Chairman
of the Board or some other person appointed by the Board for the purpose,
attorney of the Participant with full power to execute, complete and deliver in
the name and on behalf of the Participant, transfers of the Relevant 


 


 


22

















 


Shares as aforesaid. 
The Purchaser on payment of the price specified to the Company shall be
deemed to have received good discharge for such payment.  The Company shall pay any such amount
received hereunder into a separate bank account in the name of the Company and
shall hold any such amount in trust for the Vendor.


 


12.                     Reconstruction and Winding
Up


 


(a)                        In the event of:


 


(i)                          any reorganisation of the
capital of the Company or any reconstruction or amalgamation of the Company
involving a material change in the nature of the Shares comprised in any Option) (and
for the purposes of this sub-clause the determination by the Board of a
material change in the nature of Shares in any particular case shall be final
and conclusive and shall be communicated to each Participant in writing); or


 


(ii)                       the Company passing a
resolution for its winding-up or an order being made for the compulsory
winding-up of the Company (the passing of which resolution or the making of
which order shall be communicated by the Board to each Participant in writing);


 


a Participant may, subject to the conditions applicable to the exercise
of Options on the date that such reconstruction or amalgamation becomes
unconditional or such winding-up takes effect or within such period before or
after such date as the Board may determine, exercise unexercised Options held
by him/her in relation to the whole or a specified portion of Shares to which
such Options relate and upon and subject to any conditions or limitations as
the Board may at its discretion determine.


 


(b)                       In the event of a Participant
failing to exercise an Option pursuant to sub-clause (a) hereof, such Option
shall be deemed to have lapsed.


 


 


23

















 


(c)                        Notwithstanding the foregoing,
this Clause 12 shall not apply to any Options outstanding following completion
of the Sale.


 


13.                     Variation of Capital


 


(a)                         If the Company shall effect
any variation in its capital structure (whether by way of a rights issue, a
capitalisation of profits or reserves sub-division or consolidation of its
ordinary shares or any reduction of capital or otherwise howsoever) or
distribute to its members any capital profits or capital reserves, the Board
may adjust any one or more of the following:


 


(i)                          the number of Shares in
respect of which any Option may be exercised;


 


(ii)                       the Option Price payable by a
Participant for Shares; and


 


(iii)                    where any Option has been exercised but no
Shares have been allotted pursuant thereto, the number of Shares which may be
allotted and/or, the Option Price payable for each such Share.


 


(b)                       Except in the case of a
capitalisation issue, no adjustment under sub-clause 13(a) shall be made
without the prior confirmation in writing by the auditors for the time being of
the Company that such adjustment is in their opinion fair and reasonable, and
no adjustment shall be made to an ISO pursuant to this Clause 13 if such
adjustment would cause such ISO to fail to comply with Section 422 of the Code.


 


(c)                        Notwithstanding the foregoing,
this Clause 13 shall not apply to any Options outstanding following completion
of the Sale.


 


14.                     Adjustments Upon Changes in
Capitalization, Merger, Asset Sale or Change in Control


 


Following completion
of the Sale, all Options shall be subject to the following provisions:


 


 


24

















 


(a)                        Subject to any required action
by the stockholders of Adaptec, the number of shares covered by each
outstanding Option as well as the price per share covered by each such
outstanding Option, shall be proportionately adjusted for any increase or
decrease in the number of issued shares 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 aggregate number of issued
shares effected without receipt of consideration by Parent; provided, however,
that conversion of any convertible securities of Parent shall not be deemed to
have been “effected without receipt of consideration.” Such adjustment shall be
made by the Board of Directors of Parent (the “Parent Board”), whose
determination in that respect shall be final, binding and conclusive. Except as
expressly provided herein, no issuance by Parent 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 price of shares subject to an Option.


 


(b)                       In the event of the proposed
dissolution or liquidation of Parent, all outstanding Options will terminate
immediately prior to the consummation of such proposed action, unless otherwise
provided by the Adaptec Board. The Adaptec Board may, in the exercise of its
sole discretion in such instances, declare that any Option shall terminate as
of a date fixed by the Parent Board and give each Participant the right to
exercise his or her Option as to all or any portion of the shares, including
shares as to which the Option would not otherwise be exercisable.


 


(c)                        In the event of a proposed
sale of all or substantially all of the assets of Parent, or the merger of
Parent with or into another corporation, each outstanding Option shall be
assumed or an equivalent option shall be substituted by such successor
corporation or a parent or subsidiary of such successor corporation. In the
event that the successor corporation refuses to assume or substitute for the
Option, the Participant shall fully vest in and have the right to exercise the
Option as to one hundred percent (100%) of the shares, including shares as to
which it would not otherwise be vested or exercisable. If an Option becomes
fully vested and exercisable in lieu of assumption or substitution in the event
of a merger or sale 


 


 


25

















 


of assets, the Board shall
notify the Participant in writing or electronically that the Option shall be
fully vested and exercisable for a period of fifteen (15) days from the date of
such notice, and the Option shall terminate upon the expiration of such period.
For purposes of this paragraph, an Option shall be deemed to be assumed if,
following the sale of assets or merger, the Option offers the right to
purchase, for each share of subject to the Option immediately prior to the sale
of assets or merger, the consideration (whether stock, cash or other securities
or property) received in the sale of assets or merger by holders of common
stock for each share held on the effective date of the transaction (and if such
holders were offered a choice of consideration, the type of consideration
chosen by the holders if a majority of the outstanding Shares); provided,
however, that if such consideration received in the sale of assets or merger
was not solely common stock of the successor corporation or its parent, the
Parent  Board may, with the consent of
the successor corporation and the participant, provide for the consideration to
be received upon exercise of the  Option
to be solely common stock of the successor corporation or its parent equal in
Fair Market Value to the per share consideration received by holders of common
stock in the sale of assets or merger.


 


(d)                       In
the event of a “Change in Control” of Parent, then any Options outstanding upon
the date of such Change in Control that are not yet exercisable and vested on
such date shall have their vesting accelerated as to an additional twenty-five
percent (25%) of the unvested shares subject to such Options as of the date of
such Change in Control, and such Options shall continue to otherwise vest,
(subject to (i) Participant remaining in continuous status as an employee or
consultant, and (ii) accelerated vesting as provided for in subsections (c) or
(e) of this section) at the same rate and as to the same number of shares per
vesting period as immediately prior to the Change in Control. For example, if a
Participant holds an Option that is fifty percent (50%) vested immediately
prior to the date of a Change in Control, which Option ordinarily vests so as
to be one hundred percent (100%) vested four years after the date of grant
(subject to Participant maintaining his or her continuous status as an employee
or consultant), the Option would become seventy-five percent (75%) vested upon
the date of the Change in Control and would resume vesting (subject to (i) 


 


 


26

















 


Participant maintaining his or her continuous status
as an employee or consultant, and (ii) accelerated vesting as provided for in
subsections (c) or (e) of this section) so as to be one hundred percent (100%)
vested three years following the date of grant.


 


(e)                        In the event a Participant is
involuntarily terminated without Cause within twelve (12) months following a
“Change in Control” of Parent, then any Options outstanding upon the date of
such Change in Control that are not yet exercisable and vested on such date
shall become one hundred percent (100%) exercisable and vested.  Notwithstanding the foregoing, (unless
Participant is party to a duly authorized written agreement with Parent
providing otherwise) the Option does not constitute a contract of employment or
impose on Parent, Company or any Qualifying Company any obligation to retain the
Participant, or to change Parent’s policies regarding termination of employment
or other provision of services. The employment of Participants who are
employees is and shall continue to be at-will, as defined under applicable law,
and may be terminated at any time, with or without cause.


 


(f)                          Notwithstanding any other
provision to the contrary relating to an Option, in the event that the vesting
acceleration provided for in this section or amounts or benefits otherwise
payable to a Participant (i) constitute “parachute payments” within the meaning
of Section 280G of the Code, and (ii) but for this Section, would be subject to
the excise tax imposed by Section 4999 of the Code (the “Excise Tax”), then the
Participant’s accelerated vesting hereunder shall be either


 


(i)                          made in full, or


 


(ii)                       made as to such lesser extent
as would result in no portion of such acceleration, amounts or benefits being
subject to the Excise Tax, whichever of the foregoing amounts, taking into
account the applicable federal, state and local income taxes and the Excise
Tax, results in the receipt by the Participant on an after-tax basis, of the
greatest amount of severance benefits, notwithstanding that all or some portion
of such severance benefits may be taxable under Section 4999 of the Code.
Unless 


 


 


27

















 


Parent and the Participant otherwise agree in writing,
any determination required under this Section shall be made in writing in good
faith by the accounting firm serving as Parent’s  independent public accountants immediately prior to the Change of
Control (the “Accountants”). In the event of a reduction in benefits hereunder,
the Participant shall be given the choice of which benefits to reduce. For
purposes of making the calculations required by this Section, the Accountants
may make reasonable assumptions and approximations concerning applicable taxes
and may rely on reasonable, good faith interpretations concerning the
application of Sections 280G and 4999 of the Code. Parent  and the Participant shall furnish to the
Accountants such information and documents as the Accountants may reasonably
request in order to make a determination under this Section.  Parent 
shall bear all costs the Accountants may reasonably incur in connection
with any calculations contemplated by this Section.


 


15.                     Alterations


 


(a)                        The Company may at any time by
resolution of the Board vary, amend or revoke any of these Rules in such manner
as the Board in its absolute discretion determines to be appropriate provided
always that:


 


(i)                          no such alteration amendment
or revocation shall increase the amount payable by any Participant or otherwise
impose more onerous obligations on any Participant in respect of the exercise
of an Option which has already been granted;


 


(ii)                       if at any time the approval of
the shareholders of the Company is required under any provision of the Code or
any successor provision with respect to ISOs or under any other applicable law,
the Board shall not effect such variation, amendment or revocation without such
approval.


 


(b)                       Notwithstanding any of the
provisions of Clause 15(a), the Board of Directors shall have the right to
amend or modify the terms and provisions of the Plan and 


 


 


28

















 


of any unexercised ISOs granted under the Plan to the
extent necessary to qualify any or all such Options for such favourable federal
income tax treatment (including deferral of taxation upon exercise) as may be
afforded to ISOs under the Code.


 


(c)                        As soon as is reasonably
practicable after any alteration or addition under Clause 15(a) above takes
effect, the Board shall give notice in writing thereof to all Participants.


 


(d)                       Any alteration or addition
made pursuant to this Clause 15 shall apply to Options which are outstanding as
of the effective date of such alteration or addition and to Options granted
after such date, unless (with respect to the amendments included in the April
2003 Amendments) specifically provided to the contrary in the April 2003 Amendments.


 


16.                     ISOs


 


Options
granted under the Plan which are intended to be ISOs shall be subject to the
following additional terms and conditions:


 


(a)                        Express Designation.  All ISOs granted under the Plan shall, at
the Grant Date, be specifically designated as such in the Option Certificate.


 


(b)                       10% Shareholder.  If any Employee to whom an ISO is to be
granted under the Plan is, at the time of the grant of such Option, the owner
of Shares possessing more than 10% of the total combined voting power of all classes
of shares then in issue in the capital of the Company (after taking into
account the attribution of stock ownership rules of Section 424(d) of the
Code), then the following special provisions shall be applicable to the ISO
granted to such individual:


 


(i)                          the Option Price for each
Share subject to such ISO shall not be less than 110% of the Market Value of a
Share on the Grant Date; and


 


 


29

















 


(ii)                       the Option exercise period
shall not exceed five years from the Grant Date.


 


(c)                        Dollar Limitation.  For so long as the Code shall so provide,
Options granted to any Employee under the Plan (and any other incentive share
option schemes of the Company) which are intended to constitute ISOs shall not
constitute ISOs to the extent that such Options, in the aggregate, become
exercisable for the first time in any one calendar year for Shares with an
aggregate Market Value of more than US$100,000.


 


(d)                       Termination of Employment,
Death or Disability.  No ISO may be exercised
unless, at the time of such exercise, the Employee is, and has, since the date
of grant of his or her option, been continuously employed by a Qualifying
Company, except that:


 


(i)                          an ISO may be exercised within
the 90-day period after the date the Employee ceases to be an employee (other
than by reason of death or disability (as defined below)) of a Qualifying
Company;


 


(ii)                       if the Employee dies while in
the employ of a Qualifying Company, or within 90 days after the Employee ceases
to be such an employee, the ISO may be exercised by his or her legal personal
representatives within the period of one year after the date of death (or
within such lesser period as the Board may specify); and


 


(iii)                    if the Employee becomes disabled (within
the meaning of Section 22(e) (3) of the Code or any successor provision
thereto) while in the employ of a Qualifying Company, the ISO may be exercised
within the period of one year after the date the Employee ceases to be so
employed because of such disability.


 


Notwithstanding the foregoing provisions, no ISO may be exercised after
its expiration date.


 


 


30

















 


(e)                        Notice to Company of
Disqualifying Disposition.  A
Participant, in accepting or receiving an ISO granted under the Plan, thereby
agrees to notify the Company in writing immediately after such Participant
makes a Disqualifying Disposition (as described in Sections 421, 422 and 424 of
the Code and regulations thereunder) of any stock acquired pursuant to the
exercise of ISOs granted under the Plan. 
A Disqualifying Disposition is generally any disposition occurring on or
before the later of:


 


(i)                          the date being two years
following the Grant Date of the ISO; or


 


(ii)                       the date being one year
following the date on which the ISO was exercised.


 


(f)                          Conversion of ISOs.  Without the prior written consent of the
holder of an ISO, the Board shall not alter the terms of such ISO (including
the means of exercising such ISO) if such alteration would constitute a modification
(within the meaning of Section 424(h)(3) of the Code).  The Board, at the written request or with
the written consent of any Participant, may in its absolute discretion take
such actions as may be necessary to convert such Participant’s ISO (or any
instalments or portions of instalments thereof) that have not been exercised on
the date of conversion into NSOs at any time prior to the expiration of such
ISOs, regardless of whether the Participant is an Employee of a Qualifying
Company at the time of such conversion. 
Such actions may include, but shall not be limited to, extending the
exercise period or reducing the Option Price of the appropriate instalments of
such ISOs.  At the time of such
conversion, the Board (with the consent of the Participant) may impose such
conditions on the exercise of the resulting NSO as the Board in its discretion
may determine, provided that such conditions shall not be inconsistent with
these Rules.  Nothing in these Rules
shall be deemed to give any Participant the right to have such Participant’s
ISO converted into NSOs, and no such conversion shall occur until and unless
the Board takes appropriate action. 
Upon the taking of such action the Company shall issue separate Option
Certificates to the Participant with respect to Options that are NSOs and
Options that are ISOs.


 


 


31

















 


17.                     Cancellation of New Grant of Options, Etc.


 


The
Board shall have the authority to effect, at any time and from time to time,
with the consent of the affected Participants, (i) the cancellation of any or
all unexercised Options under the Plan and the grant in substitution therefor
of new Options under the Plan covering the same or different numbers of Shares
and having an Option Price per share which may be lower or higher than the
Option Price per share of the cancelled Options or (ii) the amendment of the
terms of any and all unexercised Options under the Plan to provide an Option
Price which is higher or lower than the then-current Option Price per share of
such outstanding Options.


 


18.                     Termination


 


The
Plan shall terminate upon the close of business on the day next preceding the
tenth anniversary of the Adoption Date. 
Options granted and un-exercised on such date shall continue to have
force and effect in accordance with the provisions of the Option Certificates
evidencing such Options and the provisions of these Rules.


 


19.                     Miscellaneous


 


(a)                        The Company shall at all times
keep available such number of authorised but unissued Shares as shall be
necessary to meet all Options which have neither lapsed nor been fully
exercised.


 


(b)                       The Board may from time to
time make and vary such rules and regulations not inconsistent herewith and
establish such procedures for administration and implementation of the Options
and these Rules as it thinks fit, and in the event of any dispute or
disagreement as to the interpretation of these Rules, or of any such rule,
regulation or procedure, or as to any question or right arising from or related
to Options and/or these Rules, the decision of the Board shall be final and
binding upon all persons concerned therein.


 


Any
notice or other communication under or in connection with an Option and/or
these Rules may be given by personal delivery or by sending the same by e-mail
to his e-mail address at the place of business at which he/she performs the
whole or substantially the 


 


 


32

















 


whole
of the duties of his/her office or such other e-mail address provided to the
Company by Participant or , where he is an Employee, by
sending the same by e-mail to his e-mail address at the place of business at
which he/she performs the whole or substantially the whole of the duties of
his/her office and provided that it is
Company policy to communicate with Employees via e-mail,
or by sending the same by prepaid post, in the case of a company to its registered
office, and in the case of an individual to his/her last known address, or,
where he is an Employee, either to his last known address or to the address of
the place of business at which he/she performs the whole or substantially the
whole of the duties of his/her office or employment, and where a notice or
other communication is personally delivered, it shall be deemed to have been
received at the time of delivery and where it sent by e-mail shall be deemed
received effective as of effective transmission is sent
by e-mail it shall be deemed to have been received when effective delivery is
made, and where it is posted to an address within Ireland, it shall be deemed
to have been
received 48 hours after it was put into the post properly addressed and stamped
and where it is posted to an address outside Ireland, it shall be deemed to
have been received on the fifth business day after the date it was put into the
post properly addressed and stamped.


 


(c)                        The validity and
interpretation of the Plan, these Rules and the Option Certificates shall be
governed and construed in accordance with the laws of Ireland.


 


Adopted by the Board with effect from 17 December
1998.


 


 


April 2003 Amendments adopted 1 April 2003.


 


 


33

















 


APPENDIX 1


 


Letter of Offer


 


 


Dear
[       ],


 


You are hereby offered an Option to subscribe
for [           ]
Ordinary Shares of IR£10p each in Eurologic Systems Group Limited (the
“Company”) at a subscription price of
IR£[        ] per share.  You will be entitled to exercise the Option
as follows:


 


	
  No of Option Shares for which

  Option will be Exercisable

  	
   

  	
  Vesting
  Date

  	
   

  	
  Vesting
  Period

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


If you wish to accept this Option, you should
complete and sign the acceptance form enclosed with this letter and return it
to the Company at the above address, so as to be received by close of business
on [               ].  If your acceptance is not actually received
by that date, this offer will lapse.


 


If you accept this offer, you will be issued
with an Option Certificate in due course which will state the date of grant of
the option, the Vesting Date(s), the Vesting Period(s),  the number of shares subject to the Option
and if an Option is comprised of instalments, the number of shares, the subject
of each instalment, the subscription price per share payable by you on its
exercise and such other conditions and details as may apply to this Option.


 


[The Option hereby offered to you is an
Incentive Share Option which meets the requirements of Section 422 of the U.S.
Internal Revenue Code of 1986 as amended from time to time]/[The Option hereby
offered to you is a Non-Statutory Option](1)


 












(1)               Delete
whichever is inappropriate.


 


 


34

















 


This offer is made subject to:


 


(iii)                    the Rules enclosed with this letter;


 


(iv)                    any other conditions imposed by the Board.


 


Yours sincerely,


 


 


 


 


	
   

  
	
  For and on
  behalf of

  
	
  Eurologic
  Systems Group Limited

  



 


 


35

















 


APPENDIX 2


 


Acceptance Form


 


To:                                        The Secretary,


Eurologic Systems Group Limited (the
“Company”)


 


 


2.                             I refer to the letter of
[               ]
offering me an Option to subscribe for shares in the Company.


 


3.                             I hereby accept an Option to
subscribe for
[          ]  Ordinary Shares of IR£1 each in the Company
on the terms as offered to me, subject to and in accordance with the Rules
enclosed with the offer at a subscription price of IR£[   ] per
share.


 


4.                             I have read the Rules and I
agree to comply with and be bound by them and any variations to them.


 


 


	
  Full Name:

  	
   

  
	
   

  	
   

  
	
  Address:

  	
   

  
	
   

  	
   

  
	
  Signature:

  	
   

  
	
   

  	
   

  
	
  Date:

  	
   

  



 


 


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APPENDIX 3


 


Option Certificate


 


Eurologic Systems Group Limited (the
“Company”)


Share Option Scheme


 


THIS DOCUMENT IS IMPORTANT


 


A form of notice for use by the Participant for the exercise of the
Option is set out overleaf.


 


 


	
  Name of
  Participant:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Address of Participant:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Date of
  Grant:

  	
   

  	
   

  



 


 


	
  Number of

  Shares/

  instalments

  	
   

  	
  Subscription
  Price

  per Share

  	
   

  	
  Vesting

  Date(s)

  	
   

  	
  Vesting

  Period(s)

  	
   

  	
  Last date
  on which the

  notice of exercise of option/

  instalment(s) thereof 

  can be given

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


 


[Conditions]


 


THIS IS TO CERTIFY that the Participant named above was on the above
date granted an Option to subscribe for the above number of Ordinary Shares in
the Company on the above Vesting Dates and at the above subscription price per
share.  The Option is personal to the 


 


 


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Participant and may not be transferred, assigned, mortgaged, charged or
otherwise disposed of by the Participant. 
The Option is exercisable subject to and in accordance with the Rules
provided with the offer of the option, a further copy of which may be had on
request from the Company. [The Option is an Incentive Share Option as defined
in the Rules]/[The Option is a Non Statutory Option as defined in the Rules].


 


 


	
   

  
	
  For and on
  behalf of

  
	
  Eurologic
  Systems Group Limited

  



 


 


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APPENDIX 4


 


Notice of Exercise


 


Eurologic Systems Group Option Scheme


 


 


1.                             I hereby exercise the Option
referred to in the attached Option Certificate in respect of
[          ] Ordinary Shares
in the Company.(2)


 


2.                             I enclose a signed copy of the
Management Agreement.


 


3.                             I enclose the sum of
[               ](3).


 


 


	
  Full
  Name(s):

  	
   

  
	
   

  	
   

  
	
  Address:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Signature(s):

  	
   

  
	
   

  	
   

  
	
  Date:

  	
   

  



 


 












(2)                                  Insert the number of
shares in respect of which the Option is exercised.


 


(3)                                  Insert the
subscription cost of the shares in respect of which the Option is exercised;
this can be calculated by multiplying the subscription price per share stated
in the Option Certificate by the number of shares inserted in paragraph 1
above.


 


 


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