Exhibit 10.11


 


SEAGATE TECHNOLOGY EMPLOYEE STOCK
PURCHASE PLAN


(as amended and restated)


 


1.             PURPOSE


 


The
purpose of this Plan is to provide an opportunity for Employees of Seagate
Technology, a Cayman Islands limited company (the “Corporation”) and its Designated
Subsidiaries, to purchase Common Stock of the Corporation and thereby to have
an additional incentive to contribute to the prosperity of the Corporation. It
is the intention of the Corporation that the Plan qualify as an “Employee Stock
Purchase Plan” under Section 423 of the U.S. Internal Revenue Code of 1986, as
amended (the “Code”), and the Plan shall be administered in accordance with
this intent. In addition, the Plan authorizes the grant of options pursuant to
sub-plans or special rules adopted by the Administrator designed to achieve
desired tax or other objectives in particular locations outside of the United
States, which sub-plans shall not be required to comply with the requirements
of Section 423 of the Code or all of the specific provisions of the Plan,
including but not limited to terms relating to eligibility, Offering Periods,
Purchase Periods, or Purchase Price.


 


2.             DEFINITIONS


 


2.1           “Applicable Law”
shall mean the legal requirements relating to the administration of an employee
stock purchase plan under applicable U.S. state corporate laws, U.S. federal
and applicable state securities laws, the Code, any stock exchange rules or
regulations and the applicable laws of any other country or jurisdiction, as
such laws, rules, regulations and requirements shall be in place from time to
time.


 


2.2           “Board”
shall mean the Board of Directors of the Corporation.


 


2.3           “Code”
shall mean the U.S. Internal Revenue Code of 1986, as amended. Any reference to
a section of the Code herein shall be a reference to any successor or amended
section of the Code.


 


2.4           “Committee”
shall mean the committee appointed by the Board in accordance with Section 15
of the Plan.


 


2.5           “Common
Stock” shall mean the Common Stock of the Corporation, or any
securities into which such Common Stock may be converted.


 


2.6           “Compensation”
shall mean an Employee’s base cash compensation and commissions, but shall
exclude such items as allowances, differentials, bonuses or premiums such as
those for working shifts or overtime, payments for incentive compensation,
incentive payments, bonuses, income from the exercise or vesting or the sale,
exchange or other disposition of a compensatory stock award granted to the
Employee by the Corporation or a Designated Subsidiary, and other forms


 

















 


of
extraordinary compensation. The Committee shall have the authority to determine
and approve all forms of pay to be included in the definition of Compensation
and may change the definition on a prospective basis.


 


2.7           “Corporation”
shall mean Seagate Technology, a Cayman Islands limited company.


 


2.8           “Designated
Subsidiary” shall mean a Subsidiary that has been designated by the
Committee in its sole discretion as eligible to participate in the Plan with
respect to its Employees.


 


2.9           “Effective
Date” shall mean the date on which the registration statement on Form
S-1 filed with the Securities and Exchange Commission pursuant to Rule 424
under the Securities Act for the initial public offering of the Corporation’s
Common Stock (the “Registration Statement”)
becomes effective.


 


2.10         “Employee”
shall mean an individual classified as an employee (within the meaning of Code Section
3401(c) and the regulations thereunder) by the Corporation or a Designated
Subsidiary on the Corporation’s or such Designated Subsidiary’s payroll records
during the relevant participation period. Employee shall not include
individuals whose employment is for less than the specific number of days
determined by the Committee as of the “Offering Date.”  Individuals classified as independent
contractors, consultants, advisers, or members of the Board or the board of
directors of a Designated Subsidiary are not considered “Employees” by virtue
of such station.


 


2.11         “Exchange
Act” shall mean the U.S. Securities Exchange Act of 1934, as
amended.


 


2.12         “Fair
Market Value” on a given date of determination (i.e., an Offering
Date or Purchase Date, as appropriate) shall mean the value of Common Stock
determined as follows: (i) if the Common Stock is listed on any established
stock exchange or a national market system, its Fair Market Value shall be the
closing sales price for a share of the Common Stock (or the closing bid, if no
sales were reported) on the date of determination as quoted on such exchange or
system on which the Common Stock has the highest average trading volume, as
reported in The Wall Street Journal or such other source as the
Committee deems reliable, or (ii) if the Common Stock is regularly quoted by a
recognized securities dealer but selling prices are not reported, its Fair
Market Value shall be the mean of the closing bid and asked prices for the
Common Stock on the date of such determination, as reported in The Wall
Street Journal or such other source as the Committee 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. For purposes of
the Offering Date under the first Offering Period, the Fair Market Value of a
share of the Common Stock of the Company shall be the initial price to the
public as set forth in the final prospectus included with the Registration
Statement.


 


2

















 


2.13         “Offering
Date” shall mean the first Trading Day of an Offering Period under
the Plan; provided that the Offering Date of the first Offering Period will be
the Effective Date.


 


2.14         “Offering
Period” shall mean a period of approximately twelve (12) months
during which an option granted pursuant to the Plan may be exercised; provided,
however, that effective for Offering Periods commencing on or after February 1,
2006, the term “Offering Period” shall mean a period of approximately six (6) months
during which an option granted pursuant to the Plan may be exercised.  For Offering Periods that commence prior to February
1, 2006, the Plan shall be implemented by a series of Offering Periods of
approximately twelve (12) months duration, with new Offering Periods commencing
on the first Trading Day on or after February 1 and August 1 of each year and
ending on the last Trading Day in the twelve month period ending on January 31
and July 31 of the subsequent year; provided that the first Offering Period
shall commence on the Effective Date and shall end on the last Trading Day on
or before January 31, 2004.  Effective
for Offering Periods that commence on or after February 1, 2006, the Plan shall
be implemented by a series of Offering Periods of approximately six (6) months
duration, with new Offering Periods commencing on the first Trading Day on or
after February 1 and August 1 of each year and ending on the last Trading Day
in the six-month period ending on the next July 31 and January 31,
respectively.  The duration and timing of
Offering Periods may be changed or modified by the Committee.


 


2.15         “Offering
Price” shall mean the Fair Market Value of a share of Common Stock
on the Offering Date of an Offering Period.


 


2.16         “Officer”
shall mean a person who is an officer of the Corporation within the
meaning of Section 16 of the Exchange Act and the rules and regulations
promulgated thereunder.


 


2.17         “Participant”
shall mean a participant in the Plan as described in Section 5 of the Plan.


 


2.18         “Plan”
shall mean this Employee Stock Purchase Plan.


 


2.19         “Purchase
Date” shall mean the last Trading Day of each Purchase Period.


 


2.20         “Purchase
Period”  shall mean,
with respect to Offering Periods that commence on prior to February 1, 2006,
the period of approximately six (6) months commencing after one Purchase Date
and ending with the next Purchase Date, with new Purchase Periods commencing on
the first Trading Day on or after February 1 and August 1 of each year and
ending on the last Trading Day in the six-month period ending on the next July 31
and January 31, respectively; provided that the first Purchase Period shall
commence on the Effective Date and 


 


3

















 


shall
end at the completion of the seventh complete calendar month following the
Effective Date unless otherwise determined by the Committee. The second
Purchase Period of the first Offering Period shall begin on the first Trading
Day following the end of the first Purchase Period and shall end on the last
Trading Day on or before January 31, 2004. Subsequent Purchase Periods, if any,
shall run consecutively after the termination of the preceding Purchase
Period.  Notwithstanding anything herein
to the contrary, effective for Offering Periods that commence on or after February
1, 2006, “Purchase Period” shall have the same meaning as the term “Offering Period.”


 


2.21         “Purchase
Price” shall have the meaning set out in Section 8.2.


 


2.22         “Securities
Act” shall mean the U.S. Securities Act of 1933, as amended.


 


2.23         “Shareowner”
shall mean a record holder of shares entitled to vote such shares of Common
Stock under the Corporation’s by-laws.


 


2.24         “Subsidiary”
shall mean any entity treated as a corporation (other than the Corporation) in
an unbroken chain of corporations beginning with the Corporation, within the
meaning of Code Section 424(f), whether or not such corporation now exists or
is hereafter organized or acquired by the Corporation or a Subsidiary.


 


2.25         “Trading
Day” shall mean a day on which U.S. national stock exchanges and the
National Market System are open for trading and the Common Stock is being
publicly traded on one or more of such markets.


 


3.             ELIGIBILITY


 


3.1           Any
Employee employed by the Corporation or by any Designated Subsidiary on an
Offering Date shall be eligible to participate in the Plan with respect to the
Offering Period commencing on such Offering Date. Committee may establish
administrative rules requiring that employment commence some minimum period
(not to exceed 30 days) prior to an Offering Date to be eligible to participate
with respect to the Offering Period beginning on that Offering Date. The
Committee may also determine that a designated group of highly compensated
Employees is ineligible to participate in the Plan so long as the excluded
category fits within the definition of “highly compensated employee” in Code Section
414(q).


 


3.2           No Employee may participate in the
Plan if immediately after an option is granted the Employee owns or is
considered to own (within the meaning of Code Section 424(d)) shares of Common
Stock, including Common Stock which the Employee may purchase by conversion of
convertible securities or under outstanding options granted by the Corporation,
possessing five percent (5%) or more of the total combined voting power or
value of all classes of stock of the Corporation or of any of its Subsidiaries.
All Employees who participate in the 


 


4

















 


Plan
shall have the same rights and privileges under the Plan, except for
differences that may be mandated by local law and that are consistent with Code
Section 423(b)(5); provided that individuals participating in a sub-plan
adopted pursuant to Section 16 which is not designed to qualify under Code
section 423 need not have the same rights and privileges as Employees
participating in the Code section 423 Plan. Eligible Employees may not
participate in more than one Offering Period at a time.


 


4.             OFFERING PERIODS AND PURCHASE PERIODS


 


4.1           Offering Periods.  With respect to Offering Periods commencing
prior to February 1, 2006, the Plan shall generally be implemented by a series
of twelve (12) month Offering Periods with new Offering Periods commencing on
the first Trading Day on or after February 1 and August 1 and ending on the
last Trading Day in the twelve month periods ending on January 31 and July 31
of the next calendar year, respectively, or on such other date as the Committee
shall determine. The first Offering Period shall commence on the Effective Date
and shall end on the last Trading Day on or before January 31, 2004. With
respect to Offering Periods commencing on or after February 1, 2006, the Plan
shall generally be implemented by a series of six (6) month Offering Periods
with new Offering Periods commencing on the first Trading Day on or after February
1 and August 1 and ending on the last Trading Day in the six-month periods
ending on the next July 31 and January 31, respectively, or on such other date
as the Committee shall determine, and continuing thereafter until the Plan is
terminated pursuant to Section 14 hereof. The Committee shall have the authority
to change the frequency and/or duration of Offering Periods (including the
commencement dates thereof) with respect to future offerings if such change is
announced at least five (5) days prior to the scheduled beginning of the first
Offering Period to be affected thereafter.


 


4.2           Purchase Periods.  With respect to Offering Periods commencing
prior to February 1, 2006, each Offering Period shall generally consist of two (2)
consecutive Purchase Periods of six (6) months’ duration, with new Purchase
Periods commencing on the first Trading Day on or after February 1 and August 1
of each year and ending on the last Trading Day in the six-month period ending
on the next July 31 and January 31, respectively. With respect to Offering
Periods commencing on or after February 1, 2006, each Offering Period shall
generally consist of one (1) Purchase Period that runs concurrently with the
Offering Period. The last Trading Day of each Purchase Period shall be the “Purchase
Date” for such Purchase Period; provided that the first Purchase Period shall
commence on the Effective Date and shall end at the completion of the seventh
complete calendar month following the Effective Date unless otherwise
determined by the Committee. The second Purchase Period of the first Offering
Period shall begin on the first Trading Day following the end of the first
Purchase Period and shall end on the last Trading Day on or before January 31,
2004. Subsequent Purchase Periods, if any, shall run consecutively after the
termination of the preceding Purchase Period. The Committee shall have the
power to change 


 


5

















 


the
duration and/or frequency of Purchase Periods with respect to future purchases
if such change is announced at least five (5) days prior to the scheduled
beginning of the first Purchase Period to be affected.


 


5.             PARTICIPATION


 


5.1           An Employee who is eligible to
participate in the Plan in accordance with its terms at the beginning of an
Offering Period shall automatically receive an option in accordance with Section
8.1 and may become a Participant by completing and submitting, on or before the
date prescribed by the Committee with respect to a given Offering Period, a
completed payroll deduction authorization and Plan enrollment form provided by
the Corporation or by following an electronic or other enrollment process as
prescribed by the Committee. An eligible Employee may authorize payroll
deductions at the rate of any whole percentage of the Employee’s Compensation,
not to exceed ten percent (10%) of the Employee’s Compensation (or such other
percentage as the Committee may establish from time to time before an Offering
Date) of such Employee’s Compensation on each payday during the Offering
Period.  All payroll deductions will be
held in a general corporate account or a trust account. No interest shall be
paid or credited to the Participant with respect to such payroll deductions.
The Corporation shall maintain a separate bookkeeping account for each
Participant under the Plan and the amount of each Participant’s payroll
deductions shall be credited to such account. A Participant may not make any
additional payments into such account, unless payroll deductions are prohibited
under Applicable Law, in which case the provisions of Section 5.2 of the Plan
shall apply.


 


5.2           Notwithstanding any other provisions
of the Plan to the contrary, in locations where local law prohibits payroll
deductions, an eligible Employee may elect to participate through contributions
to his or her account under the Plan in a form acceptable to the
Committee.  In such event, any such
Employees shall be deemed to be participating in a sub-plan, unless the
Committee otherwise expressly provides that such Employees shall be treated as
participating in the Plan.


 


5.3           Under procedures and at times
established by the Committee, a Participant may withdraw from the Plan during a
Purchase Period, by completing and filing a new payroll deduction authorization
and Plan enrollment form with the Corporation or by following electronic or
other procedures prescribed by the Committee. If a Participant withdraws from
the Plan during a Purchase Period, his or her accumulated payroll deductions
will be refunded to the Participant without interest, his or her right to
participate in the current Offering Period will be automatically terminated and
no further payroll deductions for the purchase of Common Stock will be made
during the Offering Period. The Committee may establish rules pertaining to the
timing of withdrawals, limiting the frequency with which Participants may
withdraw and re-enroll in the Plan and may impose a waiting period on
Participants wishing to re-enroll following withdrawal.


 


6

















 


5.4           A Participant may change his or her rate
of contribution through payroll deductions only during an open enrollment
period or such other times specified by the Committee by filing a new payroll
deduction authorization and Plan enrollment form or by following electronic or
other procedures prescribed by the Committee. If a Participant has not followed
such procedures to change the rate of contribution, the rate of contribution
shall continue at the originally elected rate throughout the Purchase Period
and future Purchase Periods (including Purchase Periods of subsequent Offering
Periods). Notwithstanding the foregoing, to the extent necessary to comply with
Section 423(b)(8) of the Code, the Committee may reduce a Participant’s payroll
deductions to zero percent (0%) at any time during a Purchase Period scheduled
to end during the current calendar year. Payroll deductions shall re-commence
at the rate provided in such Participant’s enrollment form at the beginning of
the first Purchase Period which is scheduled to end in the following calendar year,
unless terminated by the Participant as provided in Section 5.3.


 


6.             TERMINATION OF EMPLOYMENT


 


In
the event any Participant terminates employment with the Corporation and its
Designated Subsidiaries for any reason (including death) prior to the expiration
of a Purchase Period, the Participant’s participation in the Plan shall
terminate and all amounts credited to the Participant’s account shall be paid
to the Participant or, in the case of death, to the Participant’s heirs or
estate, without interest. Whether a termination of employment has occurred
shall be determined by the Committee. If a Participant’s termination of
employment occurs within a certain period of time as specified by the Committee
(not to exceed 30 days) prior to the Purchase Date of the Purchase Period then
in progress, his or her option for the purchase of shares of Common Stock will
be exercised on such Purchase Date in accordance with Section 9 as if such
Participant were still employed by the Corporation. Following the purchase of
shares on such Purchase Date, the Participant’s participation in the Plan shall
terminate and all amounts credited to the Participant’s account shall be paid
to the Participant or, in the case of death, to the Participant’s heirs or
estate, without interest. The Committee may also establish rules regarding when
leaves of absence or changes of employment status will be considered to be a
termination of employment, including rules regarding transfer of employment
among Designated Subsidiaries, Subsidiaries and the Corporation, and the
Committee may establish termination-of-employment procedures for this Plan that
are independent of similar rules established under other benefit plans of the
Corporation and its Subsidiaries; provided that such procedures are not in
conflict with the requirements of Section 423 of the Code.


 


7.             STOCK


 


Subject
to adjustment as set forth in Section 11, the maximum number of shares of
Common Stock, which may be issued pursuant to the Plan shall be thirty million
(30,000,000) shares, plus an automatic annual increase (the “Annual Increase”)
on the first day of the Corporation’s fiscal year beginning in 2003 


 


7

















 


equal
to the lesser of two million five hundred thousand (2,500,000) shares or
one-half of one percent (0.5%) of the outstanding shares on the last day of the
immediately preceding fiscal year, or such lesser number of shares as is
determined by the Board.(1) The maximum number of shares that may be granted
collectively to all Participants within any given Purchase Period is two and
one-half million (2,500,000) shares; provided, however, that unless and until the
Board determines otherwise, with respect to Purchase Periods commencing on or
after August 1, 2009, the maximum number of shares that may be granted
collectively to all Participants within any given Purchase Period shall be one
and one-half million (1,500,000) shares. If, on a given Purchase Date, the
number of shares with respect to which options are to be exercised exceeds
either maximum, the Corporation shall make pro rata allocation of the shares
remaining available for purchase in as uniform a manner as shall be practicable
and as it shall determine to be equitable. In no event shall the total number
of shares issued under the Plan exceed seventy-five million (75,000,000)
shares.


 


8.             OFFERING


 


8.1           On the Offering Date of each Offering
Period, each eligible Employee, whether or not such Employee has elected to
participate as provided in Section 5.1, shall be granted an option to purchase
that number of whole shares of Common Stock, not to exceed one thousand (1,000)
shares (or such other number of shares as determined by the Committee), which may be purchased with the payroll
deductions accumulated on behalf of such Employee during each Purchase Period
at the purchase price specified in Section 8.2 below, subject to the additional
limitation that no Employee participating in the Section 423 Plan shall be
granted an option to purchase Common Stock under the Plan if such option would
permit his or her rights to purchase stock under all employee stock purchase
plans (described in Section 423 of the Code) of the Corporation and its
Subsidiaries to accrue at a rate which exceeds U.S. twenty-five thousand
dollars (U.S. $25,000) of the Fair Market Value of such Common Stock
(determined at the time such option is granted) for each calendar year in which
such option is outstanding at any time. For purposes of the Plan, an option is “granted”
on a Participant’s Offering Date. An option will expire upon the earlier to
occur of (i) the termination of a Participant’s participation in the Plan or
such Offering Period (ii) the grant of an option to such Participant on a
subsequent Offering Date; or (iii) the termination of the Offering Period. This
Section 8.1 shall be interpreted so as to comply with Code Section 423(b)(8).


 


8.2           The Purchase Price under each option shall be with respect
to a Purchase Period the lower of (i) a percentage (not less than eighty-five
percent (85%)) established by the Committee (“Designated Percentage”) of the
Offering Price, or (ii) the Designated Percentage of the Fair Market Value of a
share of Common Stock on the Purchase Date on which the Common Stock is
purchased; provided 


 






(1)
Under this provision, effective for fiscal years commencing on or after fiscal
year 2003, the Board has determined that no shares will be added pursuant to
the Annual Increase until further affirmative action is taken by the Board in
the future.


 


8














 


that
the Purchase Price may be adjusted by the Committee pursuant to Sections 11 or
12 in accordance with Section 424(a) of the Code. The Committee may change the
Designated Percentage with respect to any future Offering Period, but not to
below eighty-five percent (85%), and the Committee may determine with respect
to any prospective Offering Period that the option price shall be the
Designated Percentage of the Fair Market Value of a share of the Common Stock
on the Purchase Date.


 


9.             PURCHASE OF STOCK


 


Unless a Participant withdraws from the Plan as
provided in Section 5.3 or except as provided in Sections 12 or 14.2, upon the
expiration of each Purchase Period, a Participant’s option shall be exercised
automatically for the purchase of that number of whole shares of Common Stock
which the accumulated payroll deductions credited to the Participant’s account
at that time shall purchase at the applicable price specified in Section 8.2.
Notwithstanding the foregoing, the Corporation or its designee may make such
provisions and take such action as it deems necessary or appropriate for the
withholding of taxes and/or social insurance which the Corporation or its
Designated Subsidiary is required by Applicable Law. Each Participant, however,
shall be responsible for payment of all individual tax liabilities arising
under the Plan. The shares of Common Stock purchased upon exercise of an option
hereunder shall be considered for tax purposes to be sold to the Participant on
the Purchase Date.  During his or her lifetime,
a Participant’s option to purchase shares of Common Stock hereunder is
exercisable only by him or her.


 


10.          PAYMENT AND DELIVERY


 


As
soon as practicable after the exercise of an option, the Corporation shall
deliver to the Participant a record of the Common Stock purchased and the
balance of any amount of payroll deductions credited to the Participant’s
account not used for the purchase, except as specified below. The Committee may
permit or require that shares be deposited directly with a broker designated by
the Committee or to a designated agent of the Corporation, and the Committee
may utilize electronic or automated methods of share transfer. The Committee
may require that shares be retained with such broker or agent for a designated
period of time and/or may establish other procedures to permit tracking of
disqualifying dispositions of such shares. The Corporation shall retain the
amount of payroll deductions used to purchase Common Stock as full payment for
the Common Stock and the Common Stock shall then be fully paid and
non-assessable. No Participant shall have any voting, dividend, or other
Shareowner rights with respect to shares subject to any option granted under
the Plan until the shares subject to the option have been purchased and delivered
to the Participant as provided in this Section 10. The Committee may in its
discretion direct the Corporation to retain in a Participant’s account for the
subsequent Purchase Period or Offering Period any payroll deductions which are
not sufficient to purchase a whole share of Common Stock or return such amount
to the 


 


9

















 


Participant.
Any other amounts left over in a Participant’s account after a Purchase Date
shall be returned to the Participant.


 


11.          RECAPITALIZATION


 


Subject to any required action by the Shareowners of
the Corporation, if there is any change in the outstanding shares of Common
Stock because of a merger, consolidation, spin-off, reorganization,
recapitalization, dividend in property other than cash, stock split, reverse
stock split, stock dividend, liquidating dividend, combination or
reclassification of the Common Stock (including any such change in the number
of shares of Common Stock effected in connection with a change in domicile of
the Corporation), or any other increase or decrease in the number of shares of
Common Stock effected without receipt of consideration by the Corporation,
provided that conversion of any convertible securities of the Corporation shall
not be deemed to have been “effected without consideration,” the number of
securities covered by each option under the Plan which has not yet been
exercised and the number of securities which have been authorized and remain
available for issuance under the Plan, as well as the maximum number of
securities which may be purchased by a Participant in a Purchase Period, the
number of securities in the Annual Increase, and the price per share covered by
each option under the Plan which has not yet been exercised, may be appropriately
adjusted by the Board, and the Board shall take any further actions which, in
the exercise of its discretion, may be necessary or appropriate under the
circumstances. The Board’s determinations under this Section 11 shall be
conclusive and binding on all parties.


 


12.          MERGER, LIQUIDATION, OTHER CORPORATION TRANSACTIONS


 


12.1         In the event of the proposed
liquidation or dissolution of the Corporation, the Offering Period will
terminate immediately prior to the consummation of such proposed transaction, unless
otherwise provided by the Board in its sole discretion, and all outstanding
options shall automatically terminate and the amounts of all payroll deductions
will be refunded without interest to the Participants.


 


12.2         In the event of a proposed sale of all
or substantially all of the assets of the Corporation, or the merger or
consolidation or similar combination of the Corporation with or into another
entity, then in the sole discretion of the Board, (1) each option shall be
assumed or an equivalent option shall be substituted by the successor
corporation or parent or subsidiary of such successor entity, (2) a date
established by the Board on or before the date of consummation of such merger,
consolidation, combination or sale shall be treated as a Purchase Date, and all
outstanding options shall be exercised on such date, (3) all outstanding
options shall terminate and the accumulated payroll deductions will be refunded
without interest to the Participants, or (4) outstanding options shall continue
unchanged.


 


10

















 


13.          TRANSFERABILITY


 


Neither
payroll deductions credited to a Participant’s bookkeeping account nor any
rights to exercise an option or to receive shares of Common Stock under the
Plan may be voluntarily or involuntarily assigned, transferred, pledged, or
otherwise disposed of in any way, and any attempted assignment, transfer,
pledge, or other disposition shall be null and void and without effect. If a
Participant in any manner attempts to transfer, assign or otherwise encumber
his or her rights or interests under the Plan, other than as permitted by the
Code, such act shall be treated as an election by the Participant to
discontinue participation in the Plan pursuant to Section 5.3.


 


14.          AMENDMENT OR TERMINATION OF THE PLAN


 


14.1                           The Plan shall continue
until terminated in accordance with Section 14.2.


 


14.2         The
Board may, in its sole discretion, insofar as permitted by law, terminate or
suspend the Plan, or revise or amend it in any respect whatsoever, except that,
without approval of the Shareowners, no such revision or amendment shall
increase the number of shares subject to the Plan, other than an adjustment
under Section 7 and Section 11 of the Plan, or make other changes for which
Shareowner approval is required under Applicable Law. Upon a termination or
suspension of the Plan, the Board may in its discretion (i) return without
interest, the payroll deductions credited to Participants’ accounts to such
Participants or (ii) set an earlier Purchase Date with respect to an Offering
Period and Purchase Period then in progress.


 


15.          ADMINISTRATION


 


15.1         The
Board shall appoint a committee of one or more individuals to administer the
Plan (the “Committee”), which, unless otherwise specified by the Board, shall
consist of the members of the Corporation’s Administrative Committee, as constituted
from time to time in accordance with its charter, and generally made up of
senior members of management from the Corporation’s Legal, Finance and Human
Resources functions.  The Committee will
serve for such period of time as the Board or the Compensation Committee of the
Board may specify and whom the Board or the Compensation Committee of the Board
may remove at any time. The Committee will have the authority and
responsibility for the day-to-day administration of the Plan, the authority and
responsibility specifically provided in this Plan and any additional duty,
responsibility and authority delegated to the Committee by the Board or the
Compensation Committee of the Board, which may include any of the functions
assigned to the Board in this Plan. The Committee may delegate to one or more
individuals the day-to-day administration of the Plan. The Committee shall have
full power and authority to adopt, amend and rescind any rules and regulations
which it deems desirable and appropriate for the proper administration of the
Plan, to construe and interpret the provisions and supervise the administration
of 


 


11

















 


the Plan, to make factual determinations relevant to
Plan entitlements and to take all action in connection with administration of
the Plan as it deems necessary or advisable, consistent with the delegation
from the Board or the Compensation Committee of the Board. Decisions of the
Board or the Compensation Committee of the Board and the Committee shall be
final and binding upon all participants. Any decision reduced to writing and
signed by a majority of the members of the Committee shall be fully effective as
if it had been made at a meeting of the Committee duly held. The Corporation
shall pay all expenses incurred in the administration of the Plan.


 


15.2         In
addition to such other rights of indemnification as they may have as members of
the Board or officers or employees of the Corporation, members of the Board and
of the Committee shall be indemnified by the Corporation against all reasonable
expenses, including attorneys’ fees, actually and necessarily incurred in
connection with the defense of any action, suit or proceeding, or in connection
with any appeal therein, to which they or any of them may be a party by reason
of any action taken or failure to act under or in connection with the Plan, or
any right granted under the Plan, and against all amounts paid by them in
settlement thereof (provided such settlement is approved by independent legal
counsel selected by the Corporation) or paid by them in satisfaction of a
judgment in any such action, suit or proceeding, except in relation to matters
as to which it shall be adjudged in such action, suit or proceeding that such
person is liable for gross negligence, bad faith or intentional misconduct in
duties; provided, however, that within sixty (60) days after the institution of
such action, suit or proceeding, such person shall offer to the Corporation, in
writing, the opportunity at its own expense to handle and defend the same.


 


16.          COMMITTEE RULES FOR FOREIGN JURISDICTIONS


 


The
Committee may adopt rules or procedures relating to the operation and
administration of the Plan to accommodate the specific requirements of local
laws and procedures. Without limiting the generality of the foregoing, the
Committee is specifically authorized to adopt rules and procedures regarding
handling of payroll deductions or other contributions by Participants, payment
of interest, conversion of local currency, payroll tax, withholding procedures
and handling of stock certificates which vary with local requirements; however,
if such varying provisions are not in accordance with the provisions of Section
423(b) of the Code, including but not limited to the requirement of Section 423(b)(5)
of the Code that all options granted under the Plan shall have the same rights
and privileges unless otherwise provided under the Code and the regulations
promulgated thereunder, then the individuals affected by such varying
provisions shall be deemed to be participating under a sub-plan and not the
Plan.  The Committee may also adopt
sub-plans applicable to particular Subsidiaries or locations, which sub-plans
may be designed to be outside the scope of Code section 423. The rules of such
sub-plans may take precedence over other provisions of this Plan, with the
exception of Section 7, but unless otherwise 


 


12

















 


superseded
by the terms of such sub-plan, the provisions of this Plan shall govern the
operation of such sub-plan.


 


17.          SECURITIES LAWS REQUIREMENTS


 


17.1         No option granted
under the Plan may be exercised to any extent unless the shares to be issued
upon such exercise under the Plan are covered by an effective registration
statement pursuant to the Securities Act and the Plan is in compliance with all
applicable provisions of law, domestic or foreign, including, without
limitation, the Securities Act, the Exchange Act, the rules and regulations
promulgated thereunder, applicable state and foreign securities laws and the
requirements of any stock exchange upon which the Shares may then be listed,
subject to the approval of counsel for the Corporation with respect to such
compliance. If on a Purchase Date in any Offering Period hereunder, the Plan is
not so registered or in such compliance, options granted under the Plan which
are not in compliance shall not be exercised on such Purchase Date, and the Purchase
Date shall be delayed until the Plan is subject to such an effective
registration statement and such compliance, except that the Purchase Date shall
not be delayed more than twelve (12) months and the Purchase Date shall in no
event be more than twenty-seven (27) months from the Offering Date. If, on the
Purchase Date of any offering hereunder, as delayed to the maximum extent
permissible, the Plan is not registered and in such compliance, options granted
under the Plan which are not in compliance shall not be exercised and all
payroll deductions accumulated during the Offering Period (reduced to the
extent, if any, that such deductions have been used to acquire shares of Common
Stock) shall be returned to the Participants, without interest. The provisions
of this Section 17 shall comply with the requirements of Section 423(b)(5) of
the Code to the extent applicable.


 


17.2         As a condition to the exercise of an
option, the Corporation may require the person exercising such option to
represent and warrant at the time of any such exercise that the Shares are
being purchased only for investment and without any present intention to sell
or distribute such Shares if, in the opinion of counsel for the Corporation,
such a representation is required by any of the aforementioned applicable
provisions of law.


 


18.          GOVERNMENTAL REGULATIONS


 


This
Plan and the Corporation’s obligation to sell and deliver shares of its stock
under the Plan shall be subject to the approval of any governmental authority
required in connection with the Plan or the authorization, issuance, sale, or
delivery of stock hereunder.


 


19.          NO ENLARGEMENT OF EMPLOYEE RIGHTS


 


Nothing
contained in this Plan shall be deemed to give any Employee or other individual
the right to be retained in the employ or service of the Corporation or 


 


13

















 


any
Designated Subsidiary or to interfere with the right of the Corporation or
Designated Subsidiary to discharge any Employee or other individual at any
time, for any reason or no reason, with or without notice.


 


20.          GOVERNING LAW


 


This
Plan shall be governed by applicable laws of the State of California.


 


21.          EFFECTIVE DATE


 


This
Plan shall be effective on the Effective Date, subject to approval of the
Shareowners of the Corporation within twelve (12) months before or after its
date of adoption by the Board.


 


22.          REPORTS


 


Individual
accounts shall be maintained for each Participant in the Plan. Statements of
account shall be given to Participants at least annually, which statements
shall set forth the amounts of payroll deductions, the Purchase Price, the
number of shares of Common Stock purchased and the remaining cash balance, if
any.


 


23.          DESIGNATION OF BENEFICIARY FOR OWNED SHARES


 


With
respect to shares of Common Stock purchased by the Participant pursuant to the
Plan and held in an account maintained by the Corporation or its assignee on
the Participant’s behalf, the Participant may be permitted to file a written
designation of beneficiary, who is to receive any shares and cash, if any, from
the Participant’s account under the Plan in the event of such Participant’s
death subsequent to the end of a Purchase Period but prior to delivery to him
or her of such shares and cash.  In
addition, a Participant may file a written designation of a beneficiary who is
to receive any cash from the Participant’s account under the Plan in the event
of such Participant’s death prior to the Purchase Date of an Offering
Period.  If a Participant is married and
the designated beneficiary is not the spouse, spousal consent shall be required
for such designation to be effective, to the extent required by local law. The
Participant (and if required under the preceding sentence, his or her spouse)
may change such designation of beneficiary at any time by written notice.
Subject to local legal requirements, in the event of a Participant’s death, the
Corporation or its assignee shall deliver any shares of Common Stock and/or
cash to the designated beneficiary. Subject to local law, in the event of the
death of a Participant and in the absence of a beneficiary validly designated
who is living at the time of such Participant’s death, the Corporation shall
deliver such shares of Common Stock and/or cash to the executor or
administrator of the estate of the Participant, or if no such executor or
administrator has been appointed (to the knowledge of the Corporation), the
Corporation in its sole discretion, may deliver (or cause its assignee to
deliver) such shares of Common Stock and/or cash to the spouse, or to any one
or more 


 


14

















 


dependents
or relatives of the Participant, or if no spouse, dependent or relative is
known to the Corporation, then to such other person as the Corporation may
determine. The provisions of this Section 23 shall in no event require the
Corporation to violate local law, and the Corporation shall be entitled to take
whatever action it reasonably concludes is desirable or appropriate in order to
transfer the assets allocated to a deceased Participant’s account in compliance
with local law.


 


24.          ADDITIONAL RESTRICTIONS OF RULE 16b-3.


 


The terms and conditions of options granted hereunder to, and the
purchase of shares of Common Stock by, persons subject to Section 16 of the
Exchange Act shall comply with the applicable provisions of Rule 16b-3.  This Plan shall be deemed to contain, and
such options shall contain, and the shares of Common Stock issued upon exercise
thereof shall be subject to, such additional conditions and restrictions, if
any, as may be required by Rule 16b-3 to qualify for the maximum exemption from
Section 16 of the Exchange Act with respect to Plan transactions.


 


25.          NOTICES


 


All notices or other communications by a Participant
to the Corporation under or in connection with the Plan shall be deemed to have
been duly given when received in the form specified by the Corporation at the
location, or by the person, designated by the Corporation for the receipt
thereof.


 


15