**EXHIBIT 10.4**
**PLUMTREE SOFTWARE, INC.**
**2002 EMPLOYEE STOCK PURCHASE PLAN**
     The following constitutes the provisions of the 2002 Employee StockPurchase Plan of Plumtree Software, Inc.
     1. Purpose. The purpose of the Plan is to provide Employees with anopportunity to purchase Common Stock through accumulated payroll deductions.It is the intention of the Company to have the Plan qualify as an “EmployeeStock Purchase Plan” under Section 423 of the Code. The provisions of thePlan, accordingly, shall be construed so as to extend and limit Planparticipation in a manner that is consistent with the requirements of thatsection of the Code.
     2. Definitions.
          (a) “Administrator” means the Board or any committee thereof designated bythe Board in accordance with Section 14.
          (b) “Board” means the Board of Directors of the Company.
          (c) “Change of Control” means the occurrence of any of the followingevents:
               (i) Any “person” (as such term is used in Sections 13(d) and 14(d) of theExchange Act) becomes the “beneficial owner” (as defined in Rule 13d-3 of theExchange Act), directly or indirectly, of securities of the Companyrepresenting fifty percent (50%) or more of the total voting power representedby the Company’s then outstanding voting securities; or
               (ii) The consummation of the sale or disposition by the Company of all orsubstantially all of the Company’s assets; or
               (iii) The consummation of a merger or consolidation of the Company, withany other corporation, other than a merger or consolidation which would resultin the voting securities of the Company outstanding immediately prior theretocontinuing to represent (either by remaining outstanding or by being convertedinto voting securities of the surviving entity or its parent) at least fiftypercent (50%) of the total voting power represented by the voting securities ofthe Company, or such surviving entity or its parent outstanding immediatelyafter such merger or consolidation.
               (iv) A change in the composition of the Board, as a result of which fewerthan a majority of the Directors are Incumbent Directors. “IncumbentDirectors” means Directors who either (A) are Directors as of the effectivedate of the Plan (pursuant to Section 23), or (B) are elected, or nominated forelection, to the Board with the affirmative votes of at least a majority ofthose Directors whose election or nomination was not in connection with anytransaction described in subsections (i), (ii) or (iii) or in connection withan actual or threatened proxy contest relating to the election of Directors ofthe Company.
          (d) “Code” means the Internal Revenue Code of 1986, as amended. Anyreference to a section of the Code herein shall be a reference to any successoror amended section of the Code.
          (e) “Common Stock” means the common stock of the Company.
          (f) “Company” means Plumtree Software, Inc., a Delaware corporation.
 

 

          (g) “Compensation” means an Employee’s base straight time gross earningsand bonuses, but exclusive of payments for commissions, overtime, shift premiumand other compensation.
          (h) “Designated Subsidiary” means any Subsidiary that has been designatedby the Administrator from time to time in its sole discretion as eligible toparticipate in the Plan.
          (i) “Director” means a member of the Board.
          (j) “Employee” means any individual who is a common law employee of anEmployer and is customarily employed for at least twenty (20) hours per weekand more than five (5) months in any calendar year by the Employer. Forpurposes of the Plan, the employment relationship shall be treated ascontinuing intact while the individual is on sick leave or other leave ofabsence approved by the Employer. Where the period of leave exceeds ninety(90) days and the individual’s right to reemployment is not guaranteed eitherby statute or by contract, the employment relationship shall be deemed to haveterminated on the 91st day of such leave.
          (k) “Employer” means any one or all of the Company and its DesignatedSubsidiaries.
          (l) “Enrollment Date” means the first Trading Day of each Offering Period.
          (m) “Exchange Act” means the Securities Exchange Act of 1934, as amended,including the rules and regulations promulgated thereunder.
          (n) “Exercise Date” means the first Trading Day on or after February 1 andAugust 1 of each year. The first Exercise Date under the Plan shall beFebruary 3, 2003.
          (o) “Fair Market Value” means, as of any date, the value of Common Stockdetermined as follows:
               (i) If the Common Stock is listed on any established stock exchange or anational market system, including without limitation the Nasdaq National Marketor The Nasdaq SmallCap Market of The Nasdaq Stock Market, its Fair Market Valueshall be the closing sales price for the Common Stock (or the closing bid, ifno sales were reported) as quoted on such exchange or system on the date ofdetermination, as reported in *The Wall Street Journal*or such other source asthe Administrator deems reliable, or;
               (ii) If the Common Stock is regularly quoted by a recognized securitiesdealer but selling prices are not reported, its Fair Market Value shall be themean of the closing bid and asked prices for the Common Stock on the date ofdetermination, as reported in *The Wall Street Journal*or such other source asthe Administrator deems reliable, or;
               (iii) In the absence of an established market for the Common Stock, itsFair Market Value shall be determined in good faith by the Administrator, or;
               (iv) For purposes of the Enrollment Date of the first Offering Periodunder the Plan, the Fair Market Value shall be the initial price to the publicas set forth in the final prospectus deemed to be included within theregistration statement on Form S-1 filed with the Securities and ExchangeCommission for the initial public offering of the Common Stock (the“Registration Statement”).
          (p) “Offering Periods” means the periods of approximately twenty-four (24)months during which an option granted pursuant to the Plan may be exercised,commencing on the first Trading Day on or after February 1 and August 1 of eachyear and terminating on the first Trading Day on or after the February 1 andAugust 1 Offering Period commencement date approximately twenty-four monthslater; provided, however, that the first Offering Period under the Plan shallcommence with the first Trading Day on or after the date on which theSecurities and Exchange Commission declares the Company’s RegistrationStatement effective and ending on the first Trading Day on or after the earlierof (i) August 1, 2004 or (ii) twenty-seven (27) months from the beginning ofthe first Offering Period; and
 

 

provided, further, that the second Offering Period under the Plan shallcommence on February 3, 2003. The duration and timing of Offering Periods maybe changed pursuant to Section 4 of this Plan.
          (q) “Parent” means a “parent corporation,” whether now or hereafterexisting, as defined in Section 424(e) of the Code.
          (r) “Plan” means this 2002 Employee Stock Purchase Plan.
          (s) “Purchase Period” means the approximately six (6) month periodcommencing on one Exercise Date and ending with the next Exercise Date, exceptthat the first Purchase Period of any Offering Period shall commence on theEnrollment Date and end with the next Exercise Date.
          (t) “Purchase Price” means an amount equal to eighty-five percent (85%) ofthe Fair Market Value of a share of Common Stock on the Enrollment Date or onthe Exercise Date, whichever is lower; provided however, that the PurchasePrice may be adjusted by the Administrator pursuant to Section 20.
          (u) “Subsidiary” means a “subsidiary corporation,” whether now orhereafter existing, as defined in Section 424(f) of the Code.
          (v) “Trading Day” means a day on which the U.S. national stock exchangesand the Nasdaq System are open for trading.
     3. Eligibility.
          (a) First Offering Period. Any individual who is an Employee immediatelyprior to the first Offering Period under the Plan shall be automaticallyenrolled in the first Offering Period.
          (b) Subsequent Offering Periods. Any individual who is an Employee as ofthe Enrollment Date of any future Offering Period shall be eligible toparticipate in such Offering Period, subject to the requirements of Section 5.
          (c) Limitations. Any provisions of the Plan to the contrarynotwithstanding, no Employee shall be granted an option under the Plan (i) tothe extent that, immediately after the grant, such Employee (or any otherperson whose stock would be attributed to such Employee pursuant to Section424(d) of the Code) would own capital stock of the Company or any Parent orSubsidiary of the Company and/or hold outstanding options to purchase suchstock possessing five percent (5%) or more of the total combined voting poweror value of all classes of the capital stock of the Company or of any Parent orSubsidiary of the Company, or (ii) to the extent that his or her rights topurchase stock under all employee stock purchase plans (as defined in Section423 of the Code) of the Company or any Parent or Subsidiary of the Companyaccrues at a rate which exceeds twenty-five thousand dollars ($25,000) worth ofstock (determined at the Fair Market Value of the stock at the time such optionis granted) for each calendar year in which such option is outstanding at anytime.
     4. Offering Periods. The Plan shall be implemented by consecutive,overlapping Offering Periods with a new Offering Period commencing on the firstTrading Day on or after February 1 and August 1 of each year, or on such otherdate as the Administrator shall determine, and continuing thereafter untilterminated in accordance with Section 20; provided, however, that the firstOffering Period under the Plan shall commence with the first Trading Day on orafter the date on which the Securities and Exchange Commission declares theCompany’s Registration Statement effective and ending on the first Trading Dayon or after the earlier of (i) August 1, 2004 or (ii) twenty-seven (27) monthsfrom the beginning of the first Offering Period; and provided, further, thatthe second Offering Period under the Plan shall commence on February 3, 2003.The Administrator shall have the power to change the duration of OfferingPeriods (including the commencement dates thereof) with respect to futureofferings without stockholder approval if such change is announced prior to thescheduled beginning of the first Offering Period to be affected thereafter.
 

 

     5. Participation.
          (a) First Offering Period. An Employee who has become a participant inthe first Offering Period under the Plan pursuant to Section 3(a) shall beentitled to continue his or her participation in such Offering Period only ifhe or she submits to the Company’s payroll office (or its designee) a properlycompleted subscription agreement authorizing payroll deductions in the formprovided by the Administrator for such purpose (i) no earlier than theeffective date of the filing of the Company’s Registration Statement on FormS-8 with respect to the shares of Common Stock issuable under the Plan (the“Effective Date”) and (ii) no later than five (5) business days from theEffective Date (the “Enrollment Window”). A participant’s failure to submitthe subscription agreement during the Enrollment Window pursuant to thisSection 5(a) shall result in the automatic termination of his or herparticipation in the first Offering Period under the Plan.
          (b) Subsequent Offering Periods. An Employee who is eligible toparticipate in the Plan pursuant to Section 3(b) may become a participant by(i) submitting to the Company’s payroll office (or its designee), on or beforea date prescribed by the Administrator prior to an applicable Enrollment Date,a properly completed subscription agreement authorizing payroll deductions inthe form provided by the Administrator for such purpose, or (ii) following anelectronic or other enrollment procedure prescribed by the Administrator.
     6. Payroll Deductions.
          (a) At the time a participant enrolls in the Plan pursuant to Section 5,he or she shall elect to have payroll deductions made on each payday during theOffering Period in an amount not exceeding 15% of the Compensation which he orshe receives on each such payday; provided, that should a payday occur on anExercise Date, a participant shall have the payroll deductions made on suchpayday applied to his or her account under the new Offering Period or PurchasePeriod, as the case may be.
          (b) Payroll deductions authorized by a participant shall commence on thefirst payday following the Enrollment Date and shall end on the last payday inthe Offering Period to which such authorization is applicable, unless soonerterminated by the participant as provided in Section 10; provided, however,that for the first Offering Period under the Plan, payroll deductions shallcommence on the first payday on or following the end of the Enrollment Window.
          (c) All payroll deductions made for a participant shall be credited to hisor her account under the Plan and shall be withheld in whole percentages only.A participant may not make any additional payments into such account.
          (d) A participant may discontinue his or her participation in the Plan asprovided in Section 10, or may change the rate of his or her payroll deductionsduring the Offering Period by (i) properly completing and submitting to theCompany’s payroll office (or its designee), on or before a date prescribed bythe Administrator prior to an applicable Exercise Date, a new subscriptionagreement authorizing the change in payroll deduction rate in the form providedby the Administrator for such purpose, or (ii) following an electronic or otherprocedure prescribed by the Administrator. If a participant has not followedsuch procedures to change the rate of payroll deductions, the rate of his orher payroll deductions shall continue at the originally elected rate throughoutthe Offering Period and future Offering Periods (unless terminated as providedin Section 10). The Administrator may, in its sole discretion, limit the natureand/or number of payroll deduction rate changes that may be made byparticipants during any Offering Period. Any change in payroll deduction ratemade pursuant to this Section 6(d) shall be effective as of the first fullpayroll period following five (5) business days after the date on which thechange is made by the participant (unless the Administrator, in its solediscretion, elects to process a given change in payroll deduction rate morequickly).
          (e) Notwithstanding the foregoing, to the extent necessary to comply withSection 423(b)(8) of the Code and Section 3(c), a participant’s payrolldeductions may be decreased to zero percent (0%) at any time during a PurchasePeriod. Payroll deductions shall recommence at the rate originally elected bythe participant effective as of the beginning of the first Purchase Periodwhich is scheduled to end in the following calendar year, unless terminated bythe participant as provided in Section 10.
          (f) At the time the option is exercised, in whole or in part, or at thetime some or all of the Company’s Common Stock issued under the Plan isdisposed of, the participant must make adequate provision for the Company’sfederal, state, or other tax withholding obligations, if any, which arise uponthe exercise of the option or the
 

 

disposition of the Common Stock. At any time, the Company may, but shallnot be obligated to, withhold from the participant’s compensation the amountnecessary for the Company to meet applicable withholding obligations, includingany withholding required to make available to the Company any tax deductions orbenefits attributable to the sale or early disposition of Common Stock by theEmployee.
     7. Grant of Option. On the Enrollment Date of each Offering Period, eachEmployee participating in such Offering Period shall be granted an option topurchase on each Exercise Date during such Offering Period (at the applicablePurchase Price) up to a number of shares of Common Stock determined by dividingsuch participant’s payroll deductions accumulated prior to such Exercise Dateand retained in the participant’s account as of the Exercise Date by theapplicable Purchase Price; provided that in no event shall a participant bepermitted to purchase during each Purchase Period more than 10,000 shares ofCommon Stock (subject to any adjustment pursuant to Section 19), and providedfurther that such purchase shall be subject to the limitations set forth inSections 3(c) and 13. The Employee may accept the grant of such option (i)with respect to the first Offering Period under the Plan, by submitting aproperly completed subscription agreement in accordance with the requirementsof Section 5(a) on or before the last day of the Enrollment Window, and (ii)with respect to any future Offering Period under the Plan, by electing toparticipate in the Plan in accordance with the requirements of Section 5(b).The Administrator may, for future Offering Periods, increase or decrease, inits absolute discretion, the maximum number of shares of Common Stock that aparticipant may purchase during each Purchase Period of such Offering Period.Exercise of the option shall occur as provided in Section 8, unless theparticipant has withdrawn pursuant to Section 10. The option shall expire onthe last day of the Offering Period.
     8. Exercise of Option.
          (a) Unless a participant withdraws from the Plan as provided in Section10, his or her option for the purchase of shares of Common Stock shall beexercised automatically on the Exercise Date, and the maximum number of fullshares subject to option shall be purchased for such participant at theapplicable Purchase Price with the accumulated payroll deductions in his or heraccount. No fractional shares of Common Stock shall be purchased; any payrolldeductions accumulated in a participant’s account which are not sufficient topurchase a full share shall be retained in the participant’s account for thesubsequent Purchase Period or Offering Period, subject to earlier withdrawal bythe participant as provided in Section 10. Any other monies left over in aparticipant’s account after the Exercise Date shall be returned to theparticipant. During a participant’s lifetime, a participant’s option topurchase shares hereunder is exercisable only by him or her.
          (b) Notwithstanding any contrary Plan provision, if the Administratordetermines that, on a given Exercise Date, the number of shares of Common Stockwith respect to which options are to be exercised may exceed (i) the number ofshares of Common Stock that were available for sale under the Plan on theEnrollment Date of the applicable Offering Period, or (ii) the number of sharesof Common Stock available for sale under the Plan on such Exercise Date, theAdministrator may in its sole discretion (x) provide that the Company shallmake a pro rata allocation of the shares of Common Stock available for purchaseon such Enrollment Date or Exercise Date, as applicable, in as uniform a manneras shall be practicable and as it shall determine in its sole discretion to beequitable among all participants exercising options to purchase Common Stock onsuch Exercise Date, and continue all Offering Periods then in effect, or (y)provide that the Company shall make a pro rata allocation of the shares ofCommon Stock available for purchase on such Enrollment Date or Exercise Date,as applicable, in as uniform a manner as shall be practicable and as it shalldetermine in its sole discretion to be equitable among all participantsexercising options to purchase Common Stock on such Exercise Date, andterminate any or all Offering Periods then in effect pursuant to Section 20.The Company may make pro rata allocation of the shares of Common Stockavailable on the Enrollment Date of any applicable Offering Period pursuant tothe preceding sentence, notwithstanding any authorization of additional sharesof Common Stock for issuance under the Plan by the Company’s shareholderssubsequent to such Enrollment Date.
     9. Delivery. As soon as administratively practicable after each ExerciseDate on which a purchase of shares of Common Stock occurs, the Company shallarrange the delivery to each participant, as appropriate, the shares purchasedupon exercise of his or her option in a form determined by the Administrator(in its sole discretion). No participant shall have any voting, dividend, orother shareholder rights with respect to shares of Common Stock subject to anyoption granted under the Plan until such shares have been purchased anddelivered to the participant as provided in this Section 9.
 

 

     10. Withdrawal.
          (a) Under procedures established by the Administrator, a participant maywithdraw all but not less than all the payroll deductions credited to his orher account and not yet used to exercise his or her option under the Plan atany time by (i) submitting to the Company’s payroll office (or its designee) awritten notice of withdrawal in the form prescribed by the Administrator forsuch purpose, or (ii) following an electronic or other withdrawal procedureprescribed by the Administrator. All of the participant’s payroll deductionscredited to his or her account shall be paid to such participant as promptly aspracticable after the effective date of his or her withdrawal and suchparticipant’s option for the Offering Period shall be automatically terminated,and no further payroll deductions for the purchase of shares shall be made forsuch Offering Period. If a participant withdraws from an Offering Period,payroll deductions shall not resume at the beginning of the succeeding OfferingPeriod unless the participant re-enrolls in the Plan in accordance with theprovisions of Section 5.
          (b) A participant’s withdrawal from an Offering Period shall not have anyeffect upon his or her eligibility to participate in any similar plan which mayhereafter be adopted by the Company or in succeeding Offering Periods whichcommence after the termination of the Offering Period from which theparticipant withdraws.
     11. Termination of Employment. In the event a participant ceases to be anEmployee of an Employer, his or her option shall remain exercisable for aperiod of ninety (90) days from the date of such Employee’s termination. Uponthe expiration of such ninety (90) day period or a date prior to the expirationof such ninety (90) day period if requested by the participant, any payrolldeductions credited to such participant’s account during the Offering Periodbut not yet used to purchase shares of Common Stock under the Plan shall bereturned to such participant or, in the case of his or her death, to the personor persons entitled thereto under Section 15, and such participant’s optionshall be automatically terminated.
     12. Interest. No interest shall accrue on the payroll deductions of aparticipant in the Plan.
     13. Stock.
          (a) Subject to adjustment upon changes in capitalization of the Company asprovided in Section 19, the maximum number of shares of Common Stock whichshall be made available for sale under the Plan shall be 2,000,000 shares plusan annual increase to be added on the first day of the Company’s fiscal yearbeginning in fiscal year 2003, equal to the lesser of (i) 1,500,000 shares,(ii) 2% of the outstanding shares on such date or (iii) an amount determined bythe Board.
          (b) Shares of Common Stock to be delivered to a participant under the Planshall be registered in the name of the participant or in the name of theparticipant and his or her spouse.
     14. Administration. The Plan shall be administered by the Board or acommittee of members of the Board who shall be appointed from time to time by,and shall serve at the pleasure of, the Board. The Administrator shall havefull and exclusive discretionary authority to construe, interpret and apply theterms of the Plan, to determine eligibility and to adjudicate all disputedclaims filed under the Plan. The Administrator, in its sole discretion and onsuch terms and conditions as it may provide, may delegate to one or moreindividuals all or any part of its authority and powers under the Plan. Everyfinding, decision and determination made by the Administrator (or its designee)shall, to the full extent permitted by law, be final and binding upon allparties.
     15. Designation of Beneficiary.
          (a) A participant may designate a beneficiary who is to receive any sharesof Common Stock and cash, if any, from the participant’s account under the Planin the event of such participant’s death subsequent to an Exercise Date onwhich the option is exercised but prior to delivery to such participant of suchshares and cash. In addition, a participant may designate a beneficiary who isto receive any cash from the participant’s account under the Plan in the eventof such participant’s death prior to exercise of the option. If a participantis married and the designated beneficiary is not the spouse, spousal consentshall be required for such designation to be effective.
          (b) Such designation of beneficiary may be changed by the participant atany time. In the event of the death of a participant and in the absence of abeneficiary validly designated under the Plan who is living at the
 

 

time of such participant’s death, the Company shall deliver such sharesand/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 ofthe Company), the Company, in its discretion, may deliver such shares and/orcash to the spouse or to any one or more dependents or relatives of theparticipant, or if no spouse, dependent or relative is known to the Company,then to such other person as the Company may designate.
          (c) All beneficiary designations under this Section 15 shall be made insuch form and manner as the Administrator may prescribe from time to time.
     16. Transferability. Neither payroll deductions credited to aparticipant’s account nor any rights with regard to the exercise of an optionor to receive shares of Common Stock under the Plan may be assigned,transferred, pledged or otherwise disposed of in any way (other than by will,the laws of descent and distribution or as provided in Section 15) by theparticipant. Any such attempt at assignment, transfer, pledge or otherdisposition shall be without effect, except that the Company may treat such actas an election to withdraw from an Offering Period in accordance with Section10.
     17. Use of Funds. All payroll deductions received or held by the Companyunder the Plan may be used by the Company for any corporate purpose, and theCompany shall not be obligated to segregate such payroll deductions. Untilshares of Common Stock are issued under the Plan (as evidenced by theappropriate entry on the books of the Company or of a duly authorized transferagent of the Company), a participant shall only have the rights of an unsecuredcreditor with respect to such shares.
     18. Reports. Individual accounts shall be maintained for each participantin the Plan. Statements of account shall be given to participating Employeesat least annually, which statements shall set forth the amounts of payrolldeductions, the Purchase Price, the number of shares of Common Stock purchasedand the remaining cash balance, if any.
     19. Adjustments, Dissolution, Liquidation, Merger or Change of Control.
          (a) Adjustments. In the event that any dividend or other distribution(whether in the form of cash, Common Stock, other securities, or otherproperty), recapitalization, stock split, reverse stock split, reorganization,merger, consolidation, split-up, spin-off, combination, repurchase, or exchangeof Common Stock or other securities of the Company, or other change in thecorporate structure of the Company affecting the Common Stock such that anadjustment is determined by the Administrator (in its sole discretion) to beappropriate in order to prevent dilution or enlargement of the benefits orpotential benefits intended to be made available under the Plan, then theAdministrator shall, in such manner as it may deem equitable, adjust the numberand class of Common Stock which may be delivered under the Plan, the PurchasePrice per share and the number of shares of Common Stock covered by each optionunder the Plan which has not yet been exercised, and the numerical limits ofSections 7 and 13.
          (b) Dissolution or Liquidation. In the event of the proposed dissolutionor liquidation of the Company, the Offering Period then in progress shall beshortened by setting a new Exercise Date (the “New Exercise Date”), and shallterminate immediately prior to the consummation of such proposed dissolution orliquidation, unless provided otherwise by the Board. The New Exercise Dateshall be before the date of the Company’s proposed dissolution or liquidation.The Board shall notify each participant in writing, at least ten (10) businessdays prior to the New Exercise Date, that the Exercise Date for theparticipant’s option has been changed to the New Exercise Date and that theparticipant’s option shall be exercised automatically on the New Exercise Date,unless prior to such date the participant has withdrawn from the OfferingPeriod as provided in Section 10.
          (c) Merger or Change of Control. In the event of a merger of the Companywith or into another corporation or a Change of Control, each outstandingoption shall be assumed or an equivalent option substituted by the successorcorporation or a Parent or Subsidiary of the successor corporation. In theevent that the successor corporation refuses to assume or substitute for theoption, any Purchase Periods then in progress shall be shortened by setting anew Exercise Date (the “New Exercise Date”) and any Offering Periods then inprogress shall end on the New Exercise Date. The New Exercise Date shall bebefore the date of the Company’s proposed merger or Change of Control. TheBoard shall notify each participant in writing, at least ten (10) business daysprior to the New Exercise Date, that the Exercise Date for the participant’soption has been changed to the New Exercise Date and that the participant’soption shall be
 

 

exercised automatically on the New Exercise Date, unless prior to suchdate the participant has withdrawn from the Offering Period as provided inSection 10.
     20. Amendment or Termination.
          (a) The Administrator may at any time and for any reason terminate oramend the Plan. Except as provided in Section 19, no such termination canaffect options previously granted under the Plan, provided that an OfferingPeriod may be terminated by the Administrator on any Exercise Date if theAdministrator determines that the termination of the Plan is in the bestinterests of the Company and its stockholders. Except as provided in Section19 and this Section 20, no amendment may make any change in any optiontheretofore granted which adversely affects the rights of any participant. Tothe extent necessary to comply with Section 423 of the Code (or any successorrule or provision or any other applicable law, regulation or stock exchangerule), the Company shall obtain stockholder approval in such a manner and tosuch a degree as required.
          (b) Without stockholder consent and without regard to whether anyparticipant rights may be considered to have been “adversely affected,” theAdministrator shall be entitled to change the Offering Periods, limit thefrequency and/or number of changes in the amount withheld during an OfferingPeriod, establish the exchange ratio applicable to amounts withheld in acurrency other than U.S. dollars, permit payroll withholding in excess of theamount designated by a participant in order to adjust for delays or mistakes inthe Company’s processing of properly completed withholding elections, establishreasonable waiting and adjustment periods and/or accounting and creditingprocedures to ensure that amounts applied toward the purchase of Common Stockfor each participant properly correspond with amounts withheld from theparticipant’s Compensation, and establish such other limitations or proceduresas the Administrator determines in its sole discretion advisable which areconsistent with the Plan.
          (c) In the event the Administrator determines that the ongoing operationof the Plan may result in unfavorable financial accounting consequences, theBoard may, in its discretion and, to the extent necessary or desirable, modifyor amend the Plan to reduce or eliminate such accounting consequence including,but not limited to:
               (i) altering the Purchase Price for any Offering Period including anOffering Period underway at the time of the change in Purchase Price;
               (ii) shortening any Offering Period so that Offering Period ends on a newExercise Date, including an Offering Period underway at the time of the Boardaction; and
               (iii) allocating shares.
Such modifications or amendments shall not require stockholder approval or theconsent of any Plan participants.
     21. Notices. All notices or other communications by a participant to theCompany under or in connection with the Plan shall be deemed to have been dulygiven when received in the form specified by the Company at the location, or bythe person, designated by the Company for the receipt thereof.
     22. Conditions Upon Issuance of Shares. Shares of Common Stock shall notbe issued with respect to an option under the Plan unless the exercise of suchoption and the issuance and delivery of such shares pursuant thereto shallcomply with all applicable provisions of law, domestic or foreign, including,without limitation, the Securities Act of 1933, as amended, including the rulesand regulations promulgated thereunder, the Exchange Act and the requirementsof any stock exchange upon which the shares may then be listed, and shall befurther subject to the approval of counsel for the Company with respect to suchcompliance.
          As a condition to the exercise of an option, the Company may require theperson exercising such option to represent and warrant at the time of any suchexercise that the shares are being purchased only for investment and withoutany present intention to sell or distribute such shares if, in the opinion ofcounsel for the Company, such a representation is required by any of theaforementioned applicable provisions of law.
 

 

     23. Term of Plan. The Plan shall become effective upon the earlier tooccur of its adoption by the Board or its approval by the stockholders of theCompany. It shall continue in effect until terminated under Section 20.
     24. Automatic Transfer to Low Price Offering Period. To the extentpermitted by any applicable laws, regulations, or stock exchange rules if theFair Market Value of the Common Stock on any Exercise Date in an OfferingPeriod is lower than the Fair Market Value of the Common Stock on theEnrollment Date of such Offering Period, then all participants in such OfferingPeriod shall be automatically withdrawn from such Offering Period immediatelyafter the exercise of their option on such Exercise Date and automaticallyre-enrolled in the immediately following Offering Period.