exv10w24



 





Exhibit 10.24




PACKETEER, INC.

NOTICE OF GRANT OF PERFORMANCE SHARES



(For U.S. Participants)



The Participant has been granted an award of Performance Shares (the “Award”) pursuant to the
Packeteer, Inc. 1999 Stock Incentive Plan (the “Plan”) and the Performance Share Agreement attached
hereto (the “Agreement”), each of which represents the right to receive on the applicable
Settlement Date one (1) share of Common Stock, as follows:




	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	Participant:

	 	 	 	Employee ID:	 	 
	 

	 	 
	 	 	 	 
	 
	 	 	 	 	 	 
	Grant Date:

	 	February 19, 2008
	 	Grant No.:	 	 
	 

	 	 
	 	 	 	 
	 
	 	 	 	 	 	 
	Target Number of
	 	 	 	 	 	 
	Performance Shares:	 	[_______________], subject to adjustment as provided by the Agreement.
	 
	 	 	 	 	 	 
	Maximum Number of
	 	 	 	 	 	 
	Performance Shares:	 	[_______________], subject to adjustment as provided by the Agreement.
	 
	 	 	 	 	 	 
	Performance Period:	 	The fiscal year of the Corporation beginning January 1, 2008 and ending December 31, 2008.
	 
	 	 	 	 	 	 
	Performance Measures:	 	Product Revenue, as defined by the Agreement.
Pro Forma Operating Income, as defined by the Agreement.
	 
	 	 	 	 	 	 
	Earned Performance 

Shares:	 	Except as provided by the Agreement, the number of Earned Performance Shares, if any (not
to exceed the Maximum Number of Performance Shares), shall be determined following
completion of the Performance Period by multiplying the Target Number of Performance
Shares by the product of the Product Revenue Multiplier (as defined by the Agreement) and
the Pro Forma Operating Income Multiplier (as defined by the Agreement).
	 
	 	 	 	 	 	 
	Vested Performance 

Shares:	 	Except as provided by the Agreement, and provided that the Participant’s Service has not
terminated prior to the applicable Vesting Date, a number of Earned Performance Shares,
if any, shall become Vested Performance Shares as of each of the following dates (each a
“Vesting Date”) determined by multiplying the total number of Earned Performance Shares
by the Vested Ratio:
	 
	 	 	 	 	 	 
	 	 	Vesting Date	 	Vested Ratio
	 
	 	 	 	 	 	 
	 	 	February 28, 2009	 	1/3
	 
	 	 	 	 	 	 
	 	 	February 28, 2010	 	An additional 1/3
	 
	 	 	 	 	 	 
	 	 	February 28, 2011	 	An additional 1/3
	 
	 	 	 	 	 	 
	Settlement Date:	 	Each Vesting Date shall be a Settlement Date with respect to the number of Earned
Performance Shares, if any, becoming Vested Performance Shares on such date, except as
otherwise provided by the Agreement.










 









 









By their signatures below or by electronic acceptance or authentication in a form authorized by the
Corporation, the Corporation and the Participant agree that the Award is governed by this Notice
and by the provisions of the Plan and the Agreement, both of which are made a part of this
document. The Participant acknowledges that copies of the Plan, the Agreement and the prospectus
for the Plan are available on the Corporation’s internal web site and may be viewed and printed by
the Participant for attachment to the Participant’s copy of this Grant Notice. The Participant
represents that the Participant has read and is familiar with the provisions of the Plan and the
Agreement, and hereby accepts the Award subject to all of their terms and conditions.



	 	 	 	 	 
	PACKETEER, INC.	 	PARTICIPANT
	 
	 	 	 	 
	By:
	 	 	 	 
	 

	 	 
	 	 
	 

	 	 	 	Signature
	 
	 	 	 	 
	Its:
	 	 	 	 
	 

	 	 
	 	 
	 

	 	 	 	Date
	 
	 	 	 	 
	 

	 	 	 	 






	 	 	 	 	 
	Address: 
	 	10201 North De Anza Boulevard	 	Address
	 

	 	Cupertino, CA 95014, USA
	 	 
	 
	 	 	 	 
	 

	 	 	 	 






			
	ATTACHMENTS:	 	1999 Stock Incentive Plan, as amended to the Grant Date; Performance Share Agreement
and Plan Prospectus









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PACKETEER, INC.

PERFORMANCE SHARE AGREEMENT



(For U.S. Participants)




     Packeteer, Inc. has granted to the Participant named in the Notice of Grant of Performance
Shares (the “Grant Notice”) to which this Performance Share Agreement (the “Agreement”) is attached
an Award consisting of Performance Shares subject to the terms and conditions set forth in the
Grant Notice and this Agreement. The Award has been granted pursuant to the Packeteer, Inc. 1999
Stock Incentive Plan (the “Plan”), as amended to the Grant Date, the provisions of which are
incorporated herein by reference. By signing the Grant Notice, the Participant: (a) acknowledges
receipt of and represents that the Participant has read and is familiar with the Grant Notice, this
Agreement, the Plan and a prospectus for the Plan (the “Plan Prospectus”) in the form most recently
prepared in connection with the registration with the Securities and Exchange Commission of shares
issuable pursuant to the Plan, (b) accepts the Award subject to all of the terms and conditions of
the Grant Notice, this Agreement and the Plan and (c) agrees to accept as binding, conclusive and
final all decisions or interpretations of the Plan Administrator upon any questions arising under
the Grant Notice, this Agreement or the Plan.



     1. Definitions and Construction.



          1.1 Definitions. Unless otherwise defined herein, capitalized terms shall have the meanings
assigned to such terms in the Grant Notice or the Plan.



               (a) “Cause” means the occurrence of any of the following: (1) Participant’s theft, dishonesty,
misconduct, breach of fiduciary duty for personal profit, or falsification of any documents or
records of the Corporation; (2) Participant’s material failure to abide by the code of conduct or
other policies (including, without limitation, policies relating to confidentiality and reasonable
workplace conduct) of the Corporation; (3) misconduct by Participant within the scope of Section
304 of the Sarbanes-Oxley Act of 2002 as a result of which of the Corporation is required to
prepare an accounting restatement; (4) Participant’s unauthorized use, misappropriation,
destruction or diversion of any tangible or intangible asset or corporate opportunity of the
Corporation (including, without limitation, Participant’s improper use or disclosure of the
confidential or proprietary information of the Corporation); (5) any intentional act by Participant
which has a material detrimental effect on reputation or business of the Corporation; (6)
Participant’s repeated failure or inability to perform any reasonable assigned duties after written
notice from the Corporation of, and a reasonable opportunity to cure, such failure or inability;
(7) any material breach by Participant of any employment, non-disclosure, non-competition,
non-solicitation or other similar agreement between Participant and the Corporation, which breach
is not cured pursuant to the terms of such agreement; (8) Participant’s failure to cooperate in any
investigation by the Corporation that has been approved by the Board or the Audit Committee of the
Board; or (9) Participant’s conviction (including any plea of guilty or nolo contendere) of any
criminal act involving fraud, dishonesty, misappropriation or moral turpitude, or which impairs
Participant’s ability to perform his duties with the Corporation.







 









 









               (b) “Disability” means either (1) the inability of Participant to engage in any substantial
gainful activity by reason of any medically determinable physical or mental impairment which can be
expected to result in death or can be expected to last for a continuous period of not less than
twelve (12) months, or (2) Participant is, by reason of any medically determinable physical or
mental impairment which can be expected to result in death or can be expected to last for a
continuous period of not less than twelve (12) months, receiving income replacement benefits for a
period of not less than three (3) months under an accident and health plan covering employees of
Participant’s employer.



               (c) “Involuntary Termination of Service” means the involuntary termination by the Corporation
(or its successor) of the Service of the Participant for reasons other than Cause; provided,
however, that Involuntary Termination of Service shall not include any voluntary termination or
any termination of Participant’s employment which is a result of Participant’s death or Disability.



               (d) “Performance Share” means a right to receive on the applicable Settlement Date one (1)
share of Common Stock if such Performance Share is then a Vested Performance Share.



               (e) “Plan Administrator” shall mean the Primary Committee (as defined by the Plan).



               (f) “Product Revenue” means product revenue determined in accordance with generally
accepted accounting principles, as reported in the Company’s Form 10-K filing for the Performance
Period. Product Revenue does not include services revenue.



               (g) “Product Revenue Goal” means an amount of Product Revenue for the Performance Period equal
to $_________.



               (h) “Product Revenue Multiplier” means a number determined as follows:



	 	 	 	 	 
	Percentage Achievement of Product	 	 
	Revenue Goal	 	Product Revenue Multiplier
	Less than 95%

	 	 	0.00	 
	95%

	 	 	0.75	 
	100%

	 	 	1.00	 
	110%

	 	 	1.25	 
	115%

	 	 	1.50	 
	120%

	 	 	1.75	 
	Equal to or greater than 125%

	 	 	2.00	 





The Product Revenue Multiplier for percentages of achievement of the Product Revenue Goal falling
between the percentages set forth in the table above shall be determined by linear interpolation.




               (i) “Pro Forma Operating Income” means the operating income for the Performance Period
determined in accordance with generally accepted accounting principles,







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but adjusted to exclude (1) amortization of purchased intangible assets, (2) in-process
research and development expense, (3) stock-based compensation expense from acquisitions and (4)
stock-based compensation expense determined in accordance with Statement of Financial Accounting
Standards No. 123 (revised 2004).




               (j) “Pro Forma Operating Income Goal” means an amount of Pro Forma Operating Income for the
Performance Period equal to $_________.



               (k) “Pro Forma Operating Income Multiplier” means a number determined as follows:



	 	 	 	 	 
	Percentage Achievement of	 	 
	Pro Forma Operating

Income Goal	 	Pro Forma Operating

Income Multiplier
	Less than 95%

	 	 	0.00	 
	95%

	 	 	0.50	 
	Equal to or greater than 100%

	 	 	1.00	 





The Pro Forma Operating Income Multiplier for percentages of achievement of the Pro Forma Operating
Income Goal falling between the percentages set forth in the table above shall be determined by
linear interpolation.




          1.2 Construction. Captions and titles contained herein are for convenience only and shall not
affect the meaning or interpretation of any provision of this Agreement. Except when otherwise
indicated by the context, the singular shall include the plural and the plural shall include the
singular. Use of the term “or” is not intended to be exclusive, unless the context clearly
requires otherwise.



     2. Administration.



          All questions of interpretation concerning the Grant Notice, this Agreement and the Plan shall
be determined by the Plan Administrator. All determinations by the Plan Administrator shall be
final and binding upon all persons having an interest in the Award. Any officer of the Corporation
shall have the authority to act on behalf of the Corporation with respect to any matter, right,
obligation, or election which is the responsibility of or which is allocated to the Corporation
herein, provided that such officer has apparent authority with respect to such matter, right,
obligation, or election. If the Participant is a Covered Employee (as defined by the Plan),
compensation realized by the Participant pursuant to the Award is intended to constitute qualified
performance-based compensation within the meaning of Section 162(m) of the Code and the regulations
thereunder, and the provisions of this Agreement shall be construed and administered in a manner
consistent with this intent.



     3. The Award.



          3.1 Grant of Performance Shares. On the Grant Date, the Participant shall acquire, subject to
the provisions of this Agreement, a right to receive a number of Performance Shares which shall not
exceed the Maximum Number of Performance Shares set forth in the







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Grant Notice, subject to adjustment as provided in Section 10. The number of Performance
Shares, if any, ultimately earned by the Participant, shall be that number of Performance Shares
which become Vested Performance Shares.




          3.2 No Monetary Payment Required. The Participant is not required to make any monetary
payment (other than applicable tax withholding, if any) as a condition to receiving the Performance
Shares or shares of Common Stock issued upon settlement of the Performance Shares, the
consideration for which shall be past services actually rendered and/or future services to be
rendered to the Corporation (or any Parent or Subsidiary) or for its benefit. Notwithstanding the
foregoing, if required by applicable state corporate law, the Participant shall furnish
consideration in the form of cash or past services rendered to the Corporation (or any Parent or
Subsidiary) or for its benefit having a value not less than the par value of the shares of Common
Stock issued upon settlement of the Performance Shares.



     4. Certification of Plan Administrator.



          4.1 Level of Performance Measures Attained. As soon as practicable following completion of
the Performance Period, and in any event prior to the initial Vesting Date set forth in the Grant
Notice, the Plan Administrator shall certify in writing the level of attainment of the Performance
Measures during the Performance Period and the resulting number of Performance Shares which shall
become Earned Performance Shares. The Corporation shall promptly notify the Participant of the
determination by the Plan Administrator.



          4.2 Adjustment to Performance Measures for Extraordinary Items. The Plan Administrator shall
adjust one or both of the Performance Measures, as it deems appropriate, to exclude the effect
(whether positive or negative) of any of the following occurring after the grant of the Award: (a)
a change in accounting standards required by generally accepted accounting principles, (b) a merger
with or acquisition of any other business entity or business assets, (c) restructurings,
discontinued operations, extraordinary items or other unusual or non-recurring charges, (d) an
event either not directly related to the operations of the Corporation or not within the reasonable
control of the Corporation’s management or (e) changes in applicable laws or regulations affecting
the Corporation. Each such adjustment, if any, shall be made solely for the purpose of providing a
consistent basis from period to period for the calculation of Performance Measures in order to
prevent the dilution or enlargement of the Participant’s rights with respect to the Award.



     5. Vesting of Performance Shares.



          5.1 In General. Except as provided by this Section and Section 9, the Earned Performance
Shares shall vest and become Vested Performance Shares as provided in the Grant Notice based on the
Participant’s continued Service until the applicable Vesting Date.



          5.2 Effect of Leave of Absence. Unless otherwise required by law, in the event that the
Participant has taken in excess of thirty (30) days in unpaid leaves of absence during the
Performance Period, the number of Performance Shares determined to be Earned Performance Shares, if
any, shall be prorated on the basis of the number of days of the







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Participant’s Service during the Performance Period during which the Participant was not on an
unpaid leave of absence.




          5.3 Effect of Involuntary Termination of Service Following a Corporate Transaction Occurring
On or After Initial Vesting Date. In the event of the Involuntary Termination of Service of the
Participant upon or within twelve (12) months following a Corporate Transaction in which the
Performance Shares are assumed, continued or replaced by the Acquiror pursuant to Section 9.1(b)
and prior to a Vesting Date other than the initial Vesting Date as set forth in the Grant Notice,
then a number of Performance Shares equal to the product of the number of Earned Performance Shares
which remain unvested as of the date of such Involuntary Termination, as adjusted pursuant to
Section 10 in connection with the Corporate Transaction, and the greater of (a) fifty percent (50%)
or (b) the percentage that the number of days elapsed from the last completed Vesting Date to the
date of such Involuntary Termination bears to the total number of days contained in the period from
the last completed Vesting Date to the final Vesting Date shall be accelerated and shall be deemed
Vested Performance Shares effective as of the date of such termination of Service, and the Award
shall be settled in full in accordance with Section 7 immediately upon the date of such termination
of Service, which shall be deemed the Settlement Date for this purpose. This Section 5.3 shall
govern exclusively the vesting of the Award in the event of a termination of the Participant’s
Service upon or following a Corporate Transaction or Change in Control occurring on or after the
initial Vesting Date as set forth in the Grant Notice.



     6. Termination of Service; Forfeiture of Unvested Performance
Shares.



          Except as provided by Section 5.3 and Section 9, in the event that the Participant’s Service
terminates prior to a Vesting Date for any reason or no reason, with or without cause, the
Participant shall forfeit and the Corporation shall automatically reacquire all Performance Shares
subject to this Award which have not become Vested Performance Shares as of the date of such
termination of Service. Effective as of the last day of the Performance Period, the Participant
shall forfeit and the Corporation shall automatically reacquire all Performance Shares which do not
become Earned Performance Shares in accordance with the Plan Administrator’s certification pursuant
to Section 4.1. The Participant shall not be entitled to any payment for such forfeited
Performance Shares.



     7. Settlement of the Award.



          7.1 Issuance of Shares of Common Stock. Subject to the provisions of Section 7.3 below, the
Corporation shall issue to the Participant on each Settlement Date with respect to each Vested
Performance Share not previously settled one (1) share of Common Stock. Shares of Common Stock
issued in settlement of Performance Shares shall not be subject to any restriction on transfer
other than any such restriction as may be required pursuant to Section 7.3, Section 8 or the
Corporation’s Insider Trading Policy.



          7.2 Beneficial Ownership of Shares; Certificate Registration. The Participant hereby
authorizes the Corporation, in its sole discretion, to deposit for the benefit of the Participant
with any broker with which the Participant has an account relationship of which







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the Corporation has notice any or all shares acquired by the Participant pursuant to the
settlement of the Award. Except as provided by the preceding sentence, a certificate for the
shares as to which the Award is settled shall be registered in the name of the Participant, or, if
applicable, in the names of the heirs of the Participant.




          7.3 Restrictions on Grant of the Award and Issuance of Shares. The grant of the Award and
issuance of shares of Common Stock upon settlement of the Award shall be subject to compliance with
all applicable requirements of federal, state law or foreign law with respect to such securities.
No shares of Common Stock may be issued hereunder if the issuance of such shares would constitute a
violation of any applicable federal, state or foreign securities laws or other law or regulations
or the requirements of any stock exchange or market system upon which the Common Stock may then be
listed. The inability of the Corporation to obtain from any regulatory body having jurisdiction
the authority, if any, deemed by the Corporation’s legal counsel to be necessary to the lawful
issuance of any shares subject to the Award shall relieve the Corporation of any liability in
respect of the failure to issue such shares as to which such requisite authority shall not have
been obtained. As a condition to the settlement of the Award, the Corporation may require the
Participant to satisfy any qualifications that may be necessary or appropriate, to evidence
compliance with any applicable law or regulation and to make any representation or warranty with
respect thereto as may be requested by the Corporation.



          7.4 Fractional Shares. The Corporation shall not be required to issue fractional shares upon
the settlement of the Award. Any fractional share resulting from the determination of the number
of Vested Performance Shares shall be rounded down to the nearest whole number.



     8. Tax Withholding.



          8.1 In General. At the time the Grant Notice is executed, or at any time thereafter as
requested by the Corporation, the Participant hereby authorizes withholding from payroll and any
other amounts payable to the Participant, and otherwise agrees to make adequate provision for, any
sums required to satisfy the federal, state, local and foreign tax withholding obligations of the
Corporation, if any, which arise in connection with the Award or the issuance of shares of Stock in
settlement thereof. The Corporation shall have no obligation to process the settlement of the
Award or to deliver shares until the tax withholding obligations as described in this Section have
been satisfied by the Participant.



          8.2 Withholding in Shares. Subject to applicable law, the Corporation shall require the
Participant to satisfy its tax withholding obligations by deducting from the shares of Common Stock
otherwise deliverable to the Participant in settlement of the Award a number of whole shares having
a fair market value, as determined by the Corporation as of the date on which the tax withholding
obligations arise, not in excess of the amount of such tax withholding obligations determined by
the applicable minimum statutory withholding rates.







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     9. Corporate Transaction.



          9.1 Effect of Corporate Transaction on the Award.



               (a) Corporate Transaction Occurring Prior to Initial Vesting Date. In the event of a
Corporate Transaction occurring prior to the initial Vesting Date as set forth in the Grant Notice,
then the vesting of a number of Performance Shares equal to fifty percent (50%) of the Target
Number of Performance Shares, as adjusted pursuant to Section 10, shall be accelerated and shall be
deemed Vested Performance Shares effective as of the date of the Corporate Transaction, and the
Award shall be settled in full in accordance with Section 7 immediately prior to the Corporate
Transaction, provided that the Participant’s Service has not terminated prior to such date. The
vesting of Performance Shares and settlement of the Award that was permissible solely by reason of
this Section 9.1(a) shall be conditioned upon the consummation of the Corporate Transaction. The
Award shall terminate and cease to be outstanding as of the time of the consummation of the
Corporate Transaction to the extent of the Performance Shares which are not Vested Performance
Shares following the application of this Section 9.1(a).



               (b) Corporate Transaction Occurring On or After Initial Vesting Date. In the event of a
Corporate Transaction occurring on or after the initial Vesting Date as set forth in the Grant
Notice, the surviving, continuing, successor, or purchasing entity or parent thereof, as the case
may be (the “Acquiror”), may, without the consent of the Participant, either assume or continue the
Corporation’s rights and obligations with respect to the outstanding Performance Shares or
substitute for outstanding Performance Shares substantially equivalent rights with respect to the
Acquiror’s stock. For purposes of this Section 9.1(b), a Performance Share shall be deemed assumed
if, following the Corporate Transaction, the Performance Share confers the right to receive,
subject to the terms and conditions of the Plan and this Agreement, the consideration (whether
stock, cash, other securities or property or a combination thereof) to which a holder of a share of
Common Stock on the effective date of the Corporate Transaction was entitled; provided, however,
that if such consideration is not solely common stock of the Acquiror, the Board may, with the
consent of the Acquiror, provide for the consideration to be received upon settlement of the
Performance Share to consist solely of common stock of the Acquiror equal in Fair Market Value to
the per share consideration received by holders of Common Stock pursuant to the Corporate
Transaction. In the event the Acquiror elects not to assume, continue or substitute for the
outstanding Performance Shares in connection with a Corporate Transaction occurring on or after
such initial Vesting Date, the vesting of 100% of the Earned Performance Shares shall be
accelerated and shall be deemed Vested Performance Shares effective as of the date of the Corporate
Transaction, and the Award shall be settled in full in accordance with Section 7 immediately prior
to the Corporate Transaction, provided that the Participant’s Service has not terminated prior to
such date. The vesting of Performance Shares and settlement of the Award that was permissible
solely by reason of this Section 9.1(b) shall be conditioned upon the consummation of the Corporate
Transaction.



          9.2 Federal Excise Tax Under Section 4999 of the Code.



               (a) Excess Parachute Payment. In the event that any acceleration of vesting the Performance
Shares and any other payment or benefit received or to be received by







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the Participant would subject the Participant to any excise tax pursuant to Section 4999 of
the Code due to the characterization of such acceleration of vesting, payment or benefit as an
“excess parachute payment” under Section 280G of the Code, the Participant may elect, in his or her
sole discretion, to reduce the amount of any acceleration of vesting called for by this Agreement
in order to avoid such characterization.




               (b) Determination by Independent Accountants. To aid the Participant in making any election
called for under Section 9.2(a), no later than the date of the occurrence of any event that might
reasonably be anticipated to result in an “excess parachute payment” to the Participant as
described in Section 9.2(a), the Corporation shall request a determination in writing by
independent public accountants selected by the Corporation (the “Accountants”). As soon as
practicable thereafter, the Accountants shall determine and report to the Corporation and the
Participant the amount of such acceleration of vesting, payments and benefits which would produce
the greatest after-tax benefit to the Participant. For the purposes of such determination, the
Accountants may rely on reasonable, good faith interpretations concerning the application of
Sections 280G and 4999 of the Code. The Corporation and the Participant shall furnish to the
Accountants such information and documents as the Accountants may reasonably request in order to
make their required determination. The Corporation shall bear all fees and expenses the
Accountants may reasonably charge in connection with their services contemplated by this Section
9.2(b).



     10. Adjustments for Changes in Capital Structure.



          Subject to any required action by the stockholders of the Corporation, in the event of any
change in the Common Stock effected without receipt of consideration by the Corporation, whether
through merger, consolidation, reorganization, reincorporation, recapitalization, reclassification,
stock dividend, stock split, reverse stock split, split-up, split-off, spin-off, combination of
shares, exchange of shares, or similar change in the capital structure of the Corporation,
appropriate adjustments shall be made in the number of Performance Shares subject to the Award
and/or the number and kind of shares to be issued in settlement of the Award, in order to prevent
dilution or enlargement of the Participant’s rights under the Award. For purposes of the
foregoing, conversion of any convertible securities of the Corporation shall not be treated as
“effected without receipt of consideration by the Corporation.” Any fractional share resulting
from an adjustment pursuant to this Section shall be rounded down to the nearest whole number.
Such adjustments shall be determined by the Plan Administrator, and its determination shall be
final, binding and conclusive.



     11. Rights as a Stockholder or Employee.



          The Participant shall have no rights as a stockholder with respect to any shares which may be
issued in settlement of this Award until the date of the issuance of a certificate for such shares
(as evidenced by the appropriate entry on the books of the Corporation or of a duly authorized
transfer agent of the Corporation). No adjustment shall be made for dividends, distributions or
other rights for which the record date is prior to the date such certificate is issued, except as
provided in Section 10. If the Participant is an Employee, the Participant understands and
acknowledges that, except as otherwise provided in a separate, written employment agreement between
the Corporation or a Parent or Subsidiary and the Participant, the







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Participant’s employment is “at will” and is for no specified term. Nothing in this Agreement
shall confer upon the Participant any right to continue in Service interfere in any way with any
right of the Corporation or any Parent or Subsidiary to terminate the Participant’s Service at any
time.




     12. Legends.



          The Corporation may at any time place legends referencing any applicable federal, state or
foreign securities law restrictions on all certificates representing shares of Common Stock issued
pursuant to this Agreement. The Participant shall, at the request of the Corporation, promptly
present to the Corporation any and all certificates representing shares acquired pursuant to this
Award in the possession of the Participant in order to carry out the provisions of this Section.



     13. Compliance with Section 409A.



          13.1 Notwithstanding anything set forth herein to the contrary, no amount payable pursuant to
this Agreement on account of the Participant’s termination of Service which constitutes a “deferral
of compensation” within the meaning of the Treasury Regulations issued pursuant to Section 409A of
the Code (the “Section 409A Regulations”) shall be paid unless and until the Participant has
incurred a “separation from service” within the meaning of the Section 409A Regulations.
Furthermore, to the extent that the Participant is a “specified employee” within the meaning of the
Section 409A Regulations as of the date of the Participant’s separation from service, no amount
that constitutes a deferral of compensation which is payable on account of the Participant’s
separation from service shall paid to the Participant before the date (the “Delayed Payment Date”)
which is first day of the seventh month after the date of the Participant’s separation from service
or, if earlier, the date of the Participant’s death following such separation from service. All
such amounts that would, but for this Section, become payable prior to the Delayed Payment Date
will be accumulated and paid on the Delayed Payment Date.



          13.2 The Corporation intends that income provided to the Participant pursuant to this
Agreement will not be subject to taxation under Section 409A of the Code. The provisions of this
Agreement shall be interpreted and construed in favor of satisfying any applicable requirements of
Section 409A of the Code. However, the Corporation does not guarantee any particular tax effect
for income provided to the Participant pursuant to this Agreement. In any event, except for the
Corporation’s responsibility to withhold applicable income and employment taxes from compensation
paid or provided to the Participant, the Corporation shall not be responsible for the payment of
any applicable taxes incurred by the Participant on compensation paid or provided to the
Participant pursuant to this Agreement.



     14. Miscellaneous Provisions.



          14.1 Termination or Amendment. The Plan Administrator may terminate or amend the Plan or this
Agreement at any time; provided, however, that except as provided in Section 9 in connection with a
Corporate Transaction, no such termination or amendment may adversely affect the Participant’s
rights under this Agreement without the consent of the







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Participant unless such termination or amendment is necessary to comply with applicable law or
government regulation, including, but not limited to, Section 409A of the Code. No amendment or
addition to this Agreement shall be effective unless in writing.




          14.2 Nontransferability of the Award. Prior the issuance of shares of Common Stock on the
Settlement Date, neither this Award nor any Performance Shares subject to this Award shall be
subject in any manner to anticipation, alienation, sale, exchange, transfer, assignment, pledge,
encumbrance, or garnishment by creditors of the Participant or the Participant’s beneficiary,
except transfer by will or by the laws of descent and distribution. All rights with respect to the
Award shall be exercisable during the Participant’s lifetime only by the Participant or the
Participant’s guardian or legal representative.



          14.3 Unfunded Obligation. The Participant shall have the status of a general unsecured
creditor of the Corporation. Any amounts payable to the Participant pursuant to the Award shall be
an unfunded and unsecured obligation for all purposes, including, without limitation, Title I of
the Employee Retirement Income Security Act of 1974. The Corporation shall not be required to
segregate any monies from its general funds, or to create any trusts, or establish any special
accounts with respect to such obligations. The Corporation shall retain at all times beneficial
ownership of any investments, including trust investments, which the Corporation may make to
fulfill its payment obligations hereunder. Any investments or the creation or maintenance of any
trust or any Participant account shall not create or constitute a trust or fiduciary relationship
between the Plan Administrator or the Corporation and the Participant, or otherwise create any
vested or beneficial interest in the Participant or the Participant’s creditors in any assets of
the Corporation. The Participant shall have no claim against the Corporation for any changes in
the value of any assets which may be invested or reinvested by the Corporation with respect to the
Award.



          14.4 Further Instruments. The parties hereto agree to execute such further instruments and to
take such further action as may reasonably be necessary to carry out the intent of this Agreement.



          14.5 Binding Effect. This Agreement shall inure to the benefit of the successors and assigns
of the Corporation and, subject to the restrictions on transfer set forth herein, be binding upon
the Participant and the Participant’s heirs, executors, administrators, successors and assigns.



          14.6 Delivery of Documents and Notices. Any document relating to participation in the Plan or
any notice required or permitted hereunder shall be given in writing and shall be deemed
effectively given (except to the extent that this Agreement provides for effectiveness only upon
actual receipt of such notice) upon personal delivery, electronic delivery at the e-mail address,
if any, provided for the Participant by the Corporation or a Parent or Subsidiary, or upon deposit
in the U.S. Post Office or foreign postal service, by registered or certified mail, or with a
nationally recognized overnight courier service, with postage and fees prepaid, addressed to the
other party at the address shown below that party’s signature to the Grant Notice or at such other
address as such party may designate in writing from time to time to the other party.







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               (a) Description of Electronic Delivery. The Plan documents, which may include but do not
necessarily include: the Plan, the Grant Notice, this Agreement, the Plan Prospectus, and any
reports of the Corporation provided generally to the Corporation’s stockholders, may be delivered
to the Participant electronically. In addition, the Participant may deliver electronically the
Grant Notice to the Corporation or to such third party involved in administering the Plan as the
Corporation may designate from time to time. Such means of electronic delivery may include but do
not necessarily include the delivery of a link to a Corporation intranet or the internet site of a
third party involved in administering the Plan, the delivery of the document via e-mail or such
other means of electronic delivery specified by the Corporation.



               (b) Consent to Electronic Delivery. The Participant acknowledges that the Participant has
read Section 13.6(a) of this Agreement and consents to the electronic delivery of the Plan
documents and Grant Notice, as described in Section 13.6(a). The Participant acknowledges that he
or she may receive from the Corporation a paper copy of any documents delivered electronically at
no cost to the Participant by contacting the Corporation by telephone or in writing. The
Participant further acknowledges that the Participant will be provided with a paper copy of any
documents if the attempted electronic delivery of such documents fails. Similarly, the Participant
understands that the Participant must provide the Corporation or any designated third party
administrator with a paper copy of any documents if the attempted electronic delivery of such
documents fails. The Participant may revoke his or her consent to the electronic delivery of
documents described in Section 13.6(a) or may change the electronic mail address to which such
documents are to be delivered (if Participant has provided an electronic mail address) at any time
by notifying the Corporation of such revoked consent or revised e-mail address by telephone, postal
service or electronic mail. Finally, the Participant understands that he or she is not required to
consent to electronic delivery of documents described in Section 13.6(a).



          14.7 Integrated Agreement. The Grant Notice, this Agreement and the Plan shall constitute the
entire understanding and agreement of the Participant and the Corporation with respect to the
subject matter contained herein or therein and supersedes any prior agreements, understandings,
restrictions, representations, or warranties between the Participant and the Corporation with
respect to such subject matter other than those as set forth or provided for herein or therein. To
the extent contemplated herein or therein, the provisions of the Grant Notice and the Agreement
shall survive any settlement of the Award and shall remain in full force and effect.



          14.8 Applicable Law. This Agreement shall be governed by the laws of the State of California
as such laws are applied to agreements between California residents entered into and to be
performed entirely within the State of California.



          14.9 Counterparts. The Grant Notice may be executed in counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same instrument.










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