EXHIBIT 10(d)


 


As amended and restated effective
May 1, 2007


As amended and restated effective
November 21, 2002


As amended and restated effective
September 12, 2002


As amended and restated effective
October 27, 2000


As amended and restated effective
June 30, 2000


As amended effective September
16, 1999


As amended effective February 12,
1999


As amended effective July 17,
1997


As amended effective November 21,
1996


As amended effective July 16,
1996


As amended effective April 17,
1995


As approved by stockholder
February 28, 1995


As adopted November 24, 1994


 


HEWLETT-PACKARD COMPANY


1995 INCENTIVE STOCK PLAN


 


PART 1. PLAN ADMINISTRATION AND ELIGIBILITY


 


I.
PURPOSE


 


The
purpose of this 1995 Incentive Stock Plan (the “Plan”) of Hewlett-Packard
Company (“HP” or the “Company”) is to encourage ownership in the Company by key
personnel whose long-term employment is considered essential to the Company’s
continued progress and thus to provide them with a further incentive to
continue in the employ of the Company or its subsidiaries or affiliates. (Each
of the Company and all such subsidiaries and affiliates is referred to
hereinafter as a “Participating Company.”)


 


II.
ADMINISTRATION


 


The
Board of Directors (the “Board) of the Company or any committee (the “Committee”)
of the Board that will satisfy Rule 16b-3 of the Exchange Act, and any
regulations promulgated thereunder, as from time to time in effect, including
any successor rule (“Rule 16b-3), shall supervise and administer the Plan. The
Committee shall consist solely of two or more non-employee directors of the
Company, who shall be appointed by the Board. A member of the Board shall be
deemed to be a “non-employee director” only if he satisfies such requirements
as the Securities and Exchange Commission may establish for non-employee
directors under Rule 16b-3. Members of the Board receive no additional
compensation for their services in connection with the administration of the
Plan.


 


The
Board or the Committee may adopt such rules or guidelines as it deems appropriate
to implement the Plan. All questions of interpretation of the Plan or of any
shares issued under it shall be determined by the Board or the Committee and
such determination shall be final and binding upon all persons having an
interest in the Plan. Any or all powers and discretion vested in the Board or
the Committee under this Plan may be exercised by any subcommittee so
authorized by the Board or the Committee and satisfying the requirements of
Rule 16b-3 for employees subject to Section 16 of the Exchange Act. In
addition, the Board or the Committee may delegate to the Executive Committee of
the Board of Directors the power to approve stock options and stock awards to
employees not subject to Section 16 of the Exchange Act.


 


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Delegation
of Authority for the Day-to-Day Administration of the Plan. Except to the extent prohibited by applicable
law or applicable rules of a stock exchange, the Board or any of its committees
as shall be administering the Plan may delegate to one or more individuals the
day-to-day administration of the Plan and any of the functions assigned to it
in this Plan. The delegation may be revoked at any time.


 


III.
PARTICIPATION IN THE PLAN


 


Key
employees of the Company, including officers, and directors of the Company, who
are also employed by a Participating Company, shall be eligible to participate
in the Plan.


 


IV.
STOCK SUBJECT TO THE PLAN


 


The
maximum number of shares that may be awarded under the Plan shall be
128,000,000 shares of the Company’s $0.01 par value Common Stock (“Common Stock”).
If a class of Preferred Stock is created and authorized by the Company’s
Amended Certificate of Incorporation, Preferred Stock may be used in lieu of
Common Stock for Plan grants. The limitation on the number of shares that may
be awarded under the Plan shall be subject to adjustment as provided in Section
XXII of the Plan.


 


The
grant of a stock award not pursuant to an option under the Plan (“Stock Award”)
shall be subject to such restrictions as the Committee shall determine to be
appropriate, including but not limited to restrictions on resale, repurchase
provisions, special vesting requirements or forfeiture provisions. The grant
and exercise of a stock option shall be subject to such restrictions as the
Committee may determine to be appropriate in accordance with Section VII of the
Plan.


 


The
Committee may authorize conversion, assumption or substitution under the Plan
of any or all outstanding stock options or other stock-based awards (“Conversion
Options”) held by employees of an entity (the “Acquired Company”) with whom HP
or one of HP’s subsidiaries engages in an Acquisition. For purposes of this
paragraph, an “Acquisition” shall mean (1) a dissolution or liquidation of all
or substantially all of the assets of the Acquired Company, (2) a purchase of
assets from the Acquired Company, whether or not the purchased assets represent
substantially all of the assets of the Acquired Company or one of its
subsidiaries, (3) a reverse merger in which the Acquired Company is the
surviving corporation but the shares of the Acquired Company’s voting stock
outstanding immediately preceding the merger are converted by virtue of the
merger into other property, whether in the form of securities, cash or otherwise,
or (4) any other capital reorganization or purchase in which more than fifty
percent (50%) of the shares of the Acquired Company entitled to vote are
exchanged. Any conversion, assumption or substitution will be effective on the
closing date of the Acquisition. The Conversion Options may be nonstatutory
options or incentive stock options entitled to special tax treatment under
Section 422 of the Code (“ISOs”). Notwithstanding any other provision of this
Plan, the Committee may specify the Conversion Options’ terms and conditions,
which may be different from those applicable to other options or awards granted
under the Plan and may replicate the material terms and conditions of the
Conversion Options.


 


The
Committee may authorize the conversion under the Plan of any or all outstanding
stock appreciation rights held by employees of a Participating Company. Such
converted options are referred to as “FSAR Conversion Options”, and shall be
nonstatutory options. All FSAR Conversion Options shall have the same terms and
conditions as options granted under the Plan.


 


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If
any outstanding option under the Plan for any reason expires or is terminated
without having been exercised in full, or if any Stock Awards are forfeited,
the forfeited shares or shares allocable to the unexercised portion of such
option shall again become available for grant pursuant to the Plan.


 


PART 2. OPTIONS AND STOCK APPRECIATION RIGHTS


 


V.
INCENTIVE STOCK OPTIONS


 


Any
option granted under the Plan may be designated by the Committee as a
non-statutory option or as an ISO.


 


No
option intended to qualify as an ISO may be granted under the Plan if such
grant, together with any applicable prior grants, would exceed any maximum
established under the Internal Revenue Code for ISOs that may be granted to a
single employee. Should it be determined that any ISO granted under the Plan
exceeds such maximum, the ISO shall be null and void to the extent, but only to
the extent, of such excess. Section 422(d)(1) of the Internal Revenue Code
presently provides that with respect to options granted after December 31, 1986
the aggregate fair market value (determined as of the time the ISO is granted)
of the stock with respect to which ISOs are exercisable for the first time by
an employee in any calendar year under all incentive stock option plans of the
Company shall not exceed $100,000.


 


Nothing
in this section shall be deemed to prevent the grant of options in excess of
the maximum established by the Internal Revenue Code where such excess amount
is treated as a nonstatutory option not entitled to special tax treatment under
Section 422 of the Internal Revenue Code.


 


VI.
TERMS, CONDITIONS AND FORM OF OPTIONS


 


Each
option granted under this Plan shall be authorized by action of the Committee
and shall be evidenced by a written agreement in such form as the Committee
shall from time to time approve, which agreements shall comply with and be
subject to the following terms and conditions:


 


A.
Options Non-transferable


 


(1)
General


 


Except
as provided in subsection VI.A(2) below, each option granted under the Plan by
its terms shall not be transferable by the optionee otherwise than by will, or
by the laws of descent and distribution, and shall be exercised during the
lifetime of the optionee only by him. No option or interest therein may be
transferred, assigned, pledged or hypothecated by the optionee during his
lifetime, whether by operation of law or otherwise, or be made subject to
execution, attachment or similar process.


 


(2)
Transferability to Certain Vehicles


 


The
Committee, in its sole discretion, may establish, as  permitted by applicable law, rules and
conditions under which an  optionee may
transfer an option to those types of trusts or other  vehicles that the Committee may determine to
be eligible for  transfer.


 


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B.
Period of Option. The Committee may specify, at the time of grant, a vesting
schedule of any option. If no vesting schedule is specified, no option may be
exercised before the first anniversary of the date upon which it was granted,
nor may it be exercised as to more than one-fourth of the number of shares
covered thereby before the second anniversary of such date, nor as to more than
one-half of the number of shares covered thereby before the third anniversary
of such date, nor as to more than three-fourths of the number of shares covered
thereby before the fourth anniversary of such date. Any option granted pursuant
to the Plan shall become exercisable in full upon the retirement of the
optionee because of age or total and permanent disability or upon the death of
the optionee. Except as provided in this subsection B, no option shall be
exercisable after the expiration of 10 years from the date upon which such
option is granted. However, the Committee may, at the time an option is granted
to any employee who is not subject to Section 16 of the Exchange Act, specify a
different term for the option up to a maximum term of 10.5 years. Each option
shall be subject to termination before its date of expiration as hereinafter
provided.


 


C.
Exercise of Options. Options may be exercised only by written notice to the
Company at its head office accompanied by payment in U.S. dollars of the full
consideration for the shares as to which they are exercised, and, with respect
to nonstatutory options, by payment of all applicable U.S. withholding taxes
upon such exercise. In addition, if and to the extent authorized by the
Committee, optionees may make all or any portion of any payment due to the
Company upon exercise of an option by delivery of any property (including
securities of the Company) other than cash, as long as such property
constitutes valid consideration for the stock under applicable law.


 


The
Committee may, but need not, permit the payment of required tax withholding due
upon exercise of an option by the withholding of shares otherwise issuable upon
exercise of the option. Option shares withheld in payment of such taxes shall
be valued at the fair market value of the stock on the date of exercise. Fair
market value shall mean, unless the Committee deems otherwise, as of any date,
the closing sales price for such Common Stock as of such date (or if no sales
were reported on such date, the closing sales price on the last preceding day
on which a sale was made) as reported in such source as the Committee deems
reliable. The Committee may impose special restrictions on the use of option
shares as payment for withholding taxes by individuals subject to Section 16 of
the Exchange Act.


 


No
option may be exercised while the optionee is on any leave of absence from the
Company, other than an approved personal or medical leave having an employment
guaranty. Options will continue to vest during any authorized leave of absence,
and may be exercised to the extent permitted by subsection VI.B above upon the
optionee’s return to an active employment status.


 


D.
Termination of Options


 


(1)
Termination of Employment


 


All
rights of an employee in an option, to the extent that it has not been
exercised, shall terminate upon the termination of his employment for any
reason.


 


(2)
Retirement and Death


 


In
the event of an employee’s retirement due to age or total and permanent
disability, all rights of an employee in an option, to the extent that it has
not been exercised, shall terminate three years from the date thereof with
respect to nonstatutory options and three months from the retirement date with
respect to ISOs or upon expiration of the option, whichever shall first occur.
In the 


 


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event
of the death of the employee, the option shall terminate upon failure of his
designated representative to exercise the option in accordance with the time
period provided in subsection VI(E) below.


 


(3)
Leave of Absence


 


The
Committee may, but shall not be required to, authorize the continuation of
options held by employees who, at the Company’s request or with the Company’s
consent, are terminating or taking a leave of absence from the Company to
accept employment with not-for-profit or for-profit corporations, governmental
agencies, industry associations or other organizations in connection with the
Company’s investments or strategic alliances. Such approval must be obtained
from the Committee prior to termination of employment in order to prevent the
immediate termination of options. The Committee may, in its sole discretion,
delegate its authority under this subsection to the Executive Committee.


 


(4)
Divestiture


 


If
an employee terminates because of a divestiture by the Company, the Committee
may, in its sole discretion, amend any option previously granted to such
employee pursuant to the Plan such that the option becomes exercisable in full
and/or permits the employee to exercise such option which has not already been
exercised until the earlier of: (i) three months from the closing date of the
divestiture, or such longer date, if any, which the Committee may authorize, or
(ii) the expiration of the option. The Committee may, in its sole discretion,
delegate its authority under this subsection to the Executive Committee.


 


(5)
Voluntary Severance Program


 


If
an employee terminates as a result of participation in a  Participating Company voluntary severance
program approved by the  Executive
Committee, any option granted pursuant to the Plan shall become exercisable in
full, and the employee may exercise any such option that has not already been
exercised until the earlier of (i) three months from the employee’s termination
date, or (ii) the expiration of the option.


 


E.
Exercise by Representative Following Death of Employee. The employee, by
written notice to the Company, may designate one or more persons (and from time
to time change such designation) including his legal representative, who, by
reason of his death, shall acquire the right to exercise all or a portion of
the option. If the person or persons so designated wish to exercise any portion
of the option, they must do so within one year after the death of the employee
or retired employee, as the case may be. All rights of the representative(s) in
the option shall terminate upon failure to exercise the option within the time
period set forth in this subsection VI.E. Any exercise by a representative
shall be subject to the provisions of this Plan.


 


VII.
MODIFICATION, EXTENSION AND RENEWAL OF OPTIONS


 


The
Committee shall have the power to modify, extend or renew outstanding options
and authorize the grant of new options in substitution therefor, provided that
any such action may not have the effect of altering or impairing any rights or
obligations of any option previously granted without the consent of the
optionee.


 


The
Committee shall have the power to lower the exercise price of an outstanding
option not intended to qualify as an ISO under the Internal Revenue Code;
provided, however, that the 


 


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exercise
price per share may not be reduced below 75% of the fair market value of a
share of Common Stock on the date the action is taken to reduce the exercise
price. Such fair market value shall mean, unless the Committee deems otherwise,
as of any date, the closing sales price for such Common Stock as of such date
(or if no sales were reported on such date, the closing sales price on the last
preceding day on which a sale was made) as reported in such source as the
Committee deems reliable.


 


VIII.
OPTION PRICE


 


The
option price per share for the shares covered by each nonstatutory option shall
be not less than 75% of the fair market value of a share of Common Stock on the
date the option is granted. The option price per share for ISOs shall be not
less than the fair market value on the option grant date. Such fair market
value shall mean, unless the Committee deems otherwise, as of any date, the
closing sales price for such Common Stock as of such date (or if no sales were
reported on such date, the closing sales price on the last preceding day on
which a sale was made) as reported in such source as the Committee deems
reliable. The option price per share for Conversion Options shall be determined
by the Committee at the time of the related merger or acquisition.


 


IX.
LOANS FOR EXERCISE OF OPTIONS


 


Any
option agreement under this Plan entered into with an employee may, but need
not, provide that the Company shall lend to the employee who holds the option
the funds for any exercise of his option. Any such loans made to individuals
subject to Section 16 of the Exchange Act shall be at a rate of interest
adequate to avoid imputation of income under Sections 483 and 7872 of the
Internal Revenue Code and shall be for a term not to exceed 15 months from the
date of exercise of the related option. Any loan by the Company to fund the
exercise of an option shall be subject to such other terms and conditions as
shall be set forth in the option agreement, which terms and conditions shall be
determined by the Committee at the time of the grant of the option. Loans may
or may not be secured by stock issued pursuant to such option exercises, at the
Committee’s discretion.


 


X.
STOCK APPRECIATION RIGHTS


 


A.
General. This section shall apply to employees who hold options heretofore or
hereafter granted under the Plan (“Options”). The Committee may, but shall not
be required to, grant to such employees stock appreciation rights as herein
provided with respect to not more than the number of shares (from time to time)
subject to the Options held by such employees. The stock appreciation rights
shall be integral parts of the respective Options and shall have no existence
apart therefrom.


 


A
stock appreciation right shall be the right of the holder thereof to elect to
surrender part or all of any Option that is wholly exercisable, or of any
exercisable portion of an Option that is partially exercisable, and receive in
exchange therefore cash or shares of Common Stock (valued at current fair
market value) or a combination thereof. Such cash or shares or combination
shall have an aggregate value (“Appreciation”) equal to the excess of the
current fair market value of one share over the Option price of one share
specified in such Option multiplied by the number of shares subject to such
Option or the portion thereof that is surrendered. The current fair market
value of a share shall mean, unless the Committee deems otherwise, as of any
date, the closing sales price for such Common Stock as of such date (or if no
sales were reported on such date, the closing sales price on the last preceding
day on which a sale was made) as reported in such source as the 


 


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Committee
deems reliable. No fractional share shall be issued on the exercise of a stock
appreciation right, and settlement therefore shall be made in cash.


 


Each
stock appreciation right granted under this Plan shall be subject to the
following terms and conditions: (1) each stock appreciation right shall be
evidenced by a written agreement between the Company and the holder in such
form as the Committee shall authorize; (2) each stock appreciation right
granted under the Plan by its terms shall not be transferable by the holder
otherwise than by will or by the laws of descent and distribution, and shall be
exercised during the lifetime of the holder only by him, and no stock
appreciation right or interest therein may be transferred, assigned, pledged or
hypothecated by the holder during his lifetime, whether by operation of law or
otherwise, or be made subject to execution, attachment or similar process; (3)
all rights of an employee in a stock appreciation right, to the extent that it
has not been exercised, shall terminate upon the death of the employee or the
termination of his employment for any reason other than retirement because of
age or total and permanent disability, and in case of such retirement three
years from the date thereof with respect to nonstatutory Options and three
months from the date thereof with respect to Options intended to qualify as
ISOs or upon expiration of the Option, whichever shall first occur; provided,
however, that the employee, by written notice to the Company, may designate one
or more persons (and from time to time change such designation), including his
legal representative, who, by reason of his death, shall acquire the right to
exercise all or a portion of the rights accrued under the stock appreciation
right as of the date of his death. If the person or persons so designated wish
to exercise any portion of the stock appreciation right, they must do so within
one year after the death of the employee or retired employee, as the case may be,
and such exercise shall be subject to the provisions of this Plan; and (4) the
life of stock appreciation rights shall be coterminous with the life of the
Options.


 


The
holder of a stock appreciation right may exercise the same by (1) filing with
the Secretary of the Company a written election, which election shall be
delivered by the Secretary to the Committee, specifying (a) the Option or
portion thereof to be surrendered, and (b) the percentage of the Appreciation
that he desires to receive in cash, if any; and (2) surrendering such Option
for cancellation or partial cancellation, as the case may be; provided,
however, that any election that specifies that the holder of a stock
appreciation right desires to receive any portion of the Appreciation in cash
shall be of no force or effect unless and until the Committee shall have
consented to such election.


 


Upon
exercise of a stock appreciation right, the number of shares reserved for
issuance under the Plan shall be reduced by the number of shares covered by the
Option, or the portion thereof, which is surrendered in connection with such
exercise.


 


Nothing
in the Plan shall be construed to give any eligible employee any right to be
granted a stock appreciation right. Neither the Plan nor the granting of a stock
appreciation right nor any other action taken pursuant to the Plan shall
constitute or be evidence of any agreement or understanding, express or
implied, that the Company will employ the holder of a stock appreciation right
for any period of time or in any position or at any particular rate of
compensation. The holder of a stock appreciation right shall have no rights as
a shareholder with respect to the shares covered by his stock appreciation
right until the date of issuance to him of a stock certificate therefor, and,
except as otherwise specifically provided in the stock option agreement for the
Options, no adjustment will be made for dividends or other rights for which the
record date is prior to the date such certificate is issued.


 


The
Board or the Committee shall have the sole discretion to consent to approve or
disapprove, in whole or in part, any election to receive any portion of the
Appreciation in cash.


 


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B.
ADDITIONAL RESTRICTIONS APPLICABLE TO SECTION 16 EMPLOYEES. No stock
appreciation right or related Option may be exercised during the first six
months of its term, except in the event of death or total and permanent
disability of the holder occurring prior to the expiration of this six-month
period.


 


Stock
appreciation rights granted to individuals subject to Section 16 of the
Exchange Act must comply with any applicable provisions of Rule 16b-3. These
rights shall contain such additional conditions or restrictions as may be
required under this rule (or any successor rule) to qualify for the maximum
exemption from Section 16 of the Exchange Act with respect to Plan
transactions.


 


XI.
INDIVIDUAL GRANT LIMITATION


 


The
Plan prohibits a single participant from receiving grants of options or stock
appreciation rights during any single fiscal year of the Company for more than
an aggregate of 1,200,000 shares of Common Stock (subject to adjustment as
provided in Section XXII of the Plan). The amount of any payment of stock
appreciation rights in cash shall be based upon the fair market value of Common
Stock on the date of exercise. Fair market value shall mean, unless the
Committee deems otherwise, as of any date, the closing sales price for such
Common Stock as of such date (or if no sales were reported on such date, the
closing sales price on the last preceding day on which a sale was made) as
reported in such source as the Committee deems reliable.


 


PART 3. STOCK AND CASH AWARDS


 


XII.
STOCK AND CASH AWARD DETERMINATION


 


The
Committee may grant an eligible employee Stock Awards or awards of cash (“Cash
Awards”) at such times and in such amounts as the Committee may designate which
in its opinion fully reflect the performance level and potential of such
employee. The Committee shall designate whether such awards are payable in
Common Stock, cash, or a combination thereof. Such awards shall be made in
accordance with such guidelines as the Committee may from time to time adopt.
Stock Awards and Cash Awards shall be independent of any grant of an option under
this Plan and shall be made subject to such restrictions as the Committee may
determine to be appropriate.


 


XIII.
PAYMENT OF STOCK OR CASH AWARDS


 


A.
No employee shall have the right to receive payment of any Stock Award or Cash
Award until notified of the amount of such award, in writing, by the Committee
or its authorized delegate.


 


B.
Payment of Cash Awards shall be made in a lump sum or in annual installments
over such period as the Committee may designate, which period shall not exceed
five years, provided that the Committee may from time to time designate minimum
installment amounts.


 


C.
After an award of Common Stock subject to restrictions (“Restricted Stock”),
such shares will be deposited in certificate or book entry form in escrow with
the Company’s Secretary. The employee shall retain all rights in the Restricted
Stock while it is held in escrow including but not limited to voting rights and
the right to receive dividends, except that the employee shall not have 


 


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the
right to transfer or assign such shares until all restrictions pertaining to
such shares are terminated, at which time the applicable stock certificates
shall be released from escrow and delivered to the employee by the Company’s
Secretary.


 


D.
The Committee may permit, on such terms as it deems appropriate, use of
Restricted Stock as partial or full payment upon exercise of a stock option
under the Company’s incentive stock option or compensation plans or this Plan.
In the event shares of Restricted Stock are so tendered as consideration for
the exercise of an option, a number of the shares issued upon the exercise of
said option, equal to the number of shares of Restricted Stock used as
consideration therefor, shall be subject to the same restrictions as the
Restricted Stock so submitted plus any additional restrictions that may be
imposed by the Committee.


 


XIV.
TERMINATION OF RESTRICTIONS ON STOCK AWARDS


 


The
Committee will establish the period or periods after which the restrictions on
Restricted Stock will lapse.


 


The
Committee may in its discretion permit an employee to elect to receive in lieu
of shares of Restricted Stock, at the expiration of the restrictions, a cash
payment equal to the fair market value of the Common Stock on the date the
restrictions lapse. The Committee may also permit the employee to elect to pay
required tax withholding due upon the lapse of restrictions with part of the
shares due the employee at such time. The shares cancelled in payment of
required tax withholding shall be valued at the fair market value of the Common
Stock on the date the restrictions lapse. Fair market value shall mean, unless
the Committee deems otherwise, as of any date, the closing sales price for such
Common Stock as of such date (or if no sales were reported on such date, the
closing sales price on the last preceding day on which a sale was made) as
reported in such source as the Committee deems reliable.


 


XV.
RESTRICTIONS AND FORFEITURE OF STOCK AWARDS


 


The
Company’s obligation to deliver stock held in escrow is subject to the
condition that the employee remain an employee of the Company on active or
authorized leave status or be under contract to provide services to the Company
as provided in Section XVII hereof for the entire deferral and/or restriction
period, including mandatory and optional deferrals. If the employee fails to
meet this condition, the employee’s right to any such unpaid amounts or
undelivered stock shall be forfeited. This provision may be waived by the Committee
in exceptional circumstances, including the employee serving at the Company’s
request or with the Company’s consent as an employee of a not-for-profit or
for-profit corporation, a governmental agency, industry association or other
similar organization in connection with the Company’s investments or strategic
alliances. Unless the Committee provides otherwise, in the event an employee
holding restricted shares ceases to be on active pay status during the
restricted period for a period of more than six months, the restricted period
shall be extended by a period of time equal to the length of the period of
inactive status.


 


XVI.
DEATH OF A PARTICIPATING EMPLOYEE HOLDING RESTRICTED STOCK


 


A.
By written notice to the Company, an employee who has received a grant of
Restricted Stock may designate one or more persons (and from time to time
change such designation) who, by reason of his death, shall acquire the right
to receive any vested but unpaid awards held by the employee at the time of his
death. Such awards shall be paid to the designated representative at such time
and in such manner as if the employee were living.


 


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B.
In the event of the death of an employee holding unvested restricted shares,
the employee’s designated representative shall be entitled to receive a
prorated number of shares determined by dividing the number of whole years
lapsed since the grant date by the number of years in the restricted period and
multiplying this ratio by the number of shares subject to the restricted stock
award. Remaining unvested shares shall be forfeited unless additional payments
are specifically authorized by the Committee.


 


C.
If at the time of the employee’s death, there is no effective beneficiary
designation as to all or some portion of the awards hereunder, such awards or
such portion thereof shall be paid to or on the order of the legal
representative of the employee’s estate. In the event of uncertainty as to the
interpretation or effect of any notice of designation, the Committee’s decision
with respect thereto shall be conclusive.


 


XVII.
RETIREMENT OR DISABILITY OF EMPLOYEE HOLDING STOCK AWARD


 


In
the event of total and permanent disability of an employee who has participated
in the Plan, any unpaid but vested award shall be paid to the employee if
legally competent or to a committee or other legally designated guardian or
representative if the employee is legally incompetent.


 


At
the time of grant of any Stock Award, the Committee may specify special conditions
or terms covering the status of such Stock Award upon the retirement or total
and permanent disability of the employee. If no provision is made, and if the
employee retires due to age or is totally and permanently disabled but is still
legally competent, the Company’s obligation to make any payment due thereafter
under the Stock Award feature of the Plan is subject to the conditions that for
the entire period of deferral or restriction, including mandatory and optional
deferrals:


 


A.
An employee retiring due to age shall render as an independent contractor and
not as an employee such advisory or consultative services to the Company as
shall be reasonably requested by the Company’s Board of Directors (the “Board”)
or the Executive Committee in writing from time to time, consistent with the
state of the retired employee’s health and any employment or other activities
in which such employee may be engaged. For purposes of this Plan, the employee
shall not be required to devote a major portion of time to such services and
shall be entitled to reimbursement for any reasonable out-of-pocket expenses
incurred in connection with the performance of such services;


 


B.
The employee shall not render services for any organization or engage directly
or indirectly in any business which, in the opinion of the Committee, competes
with, or is in conflict with the interest of, a Participating Company. The
employee shall be free, however, to purchase, as an investment or otherwise,
stock or other securities of such organizations as long as they are listed upon
a recognized securities exchange or traded over-the-counter, or as long as such
investment does not represent a substantial investment to the employee or a
significant (greater than 10%) interest in the particular organization. For the
purposes of this subsection XVII(B), any organization that is engaged in the
business of producing, leasing or selling products or providing services of the
type now or at any time hereafter made or provided by a Participating Company
shall be deemed to compete with a Participating Company;


 


C.
The employee shall not, without prior written authorization from the Company,
disclose to anyone outside a Participating Company, or use in other than a
Participating Company’s business, any confidential information   or material relating to the business of any
Participating Company, either during or after employment with a Participating
Company; and


 


10

















 


D.
The employee shall disclose promptly and assign to the Company all right, title
and interest in any invention or idea, patentable or not, made or conceived by
the employee during employment by the Company, relating in any manner to the
actual or anticipated business, research or development work of the Company and
shall do anything reasonably necessary to enable the Company to secure a patent
where appropriate in the United States and in foreign countries.


 


XVIII.
PERFORMANCE-BASED RESTRICTED STOCK AWARDS.


 


A.
Award Agreement. The Committee, in its discretion, may grant performance-based
restricted stock awards to an eligible employee or make vesting of
performance-based restricted shares contingent upon the attainment of
performance goals relating to: (1) earnings growth, (2) return on shareholders’
equity, (3) earnings per share, (4) return on assets, (5) revenue growth,
(6)stock price, or (7) other business goals defined by the Committee, each as
may be adjusted by extraordinary financial events, if applicable. Any such
objectives and the period in which such objectives are to be met will be
determined by the Committee at the time of grant and reflected in the written
award agreement. The number or value of performance shares that will be paid
out to a participant at the end of the performance period will depend on the
extent to which the Company has met the objectives determined by the Committee.


 


B.
Payment of Performance-based Restricted Shares. Payment of earned
performance-based restricted shares is made as soon as practicable after the
Committee has determined that the performance goals have been met. The
Committee, in its discretion, may pay earned performance-based restricted stock
in the form of shares of Common Stock, cash or a combination thereof. Payment
of performance-based restricted stock in cash results in the return of the
shares to the Plan, and the shares subject to an award paid in cash will again
be available for grant under the Plan. Unless otherwise established by the
Committee in the applicable award agreement, upon a participant’s termination
of employment, for any reason, all remaining unearned performance-based
restricted shares shall be forfeited and returned to the Plan and shall again
be available for award under the Plan. The Committee shall also set forth in
the grant the number of performance-based restricted shares or the amount of
payment to be made under a performance award if the performance goals are met
or exceeded, including the fixing of a maximum payment (subject to subsection
XVIII(D)).


 


C.
Nontransferability. A performance share award is nontransferable other than by
will, the laws of descent and distribution or, if permitted by the Committee,
beneficiary designation, and a participant’s rights under an award are
exercisable during the participant’s lifetime only by the participant. The
extent to which a participant’s rights under an award of performance-based
restricted stock are exercisable, if at all, in the event of the total and
permanent disability or death during a performance period of a participant
shall be determined by the Committee at the time of grant.


 


D.
Maximum Payment. In any fiscal year, no individual may receive payment for
performance-based restricted stock in excess of an aggregate of 1,200,000
shares of Common Stock, including stock options, stock appreciation rights and
other Stock Awards granted under this Plan (subject to adjustment as provided
in Section XXII of the Plan). The amount of any payment of performance-based
restricted shares in cash shall be based upon the fair market value of the
Common Stock on the date the restrictions lapse. Fair market value shall mean,
unless the Committee deems otherwise, as of any date, the closing sales price
for such Common Stock as of 


 


11

















 


such
date (or if no sales were reported on such date, the closing sales price on the
last preceding day on which a sale was made) as reported in such source as the
Committee deems reliable.


 


PART 4. GENERAL PROVISIONS


 


XIX.
ASSIGNMENTS


 


The
rights and benefits under this Plan may not be assigned except for the
designation of a representative or beneficiary, as provided in Sections VI, X,
XVI and XVIII.


 


XX.
TIME FOR GRANTING OPTIONS OR STOCK AWARDS


 


All
options for shares, stock appreciation rights and Stock Awards subject to this
Plan shall be granted, if at all, not later than 10 years after the adoption of
this Plan by the Board.


 


XXI.
LIMITATION OF RIGHTS


 


A.
No Right to an Option or Stock Award. Nothing in the Plan shall be construed to
give any personnel of the Participating Companies any right to be granted an
option, Stock Award or Cash Award.


 


B.
No Employment Right. Neither the Plan, nor the granting of an option, Stock
Award or Cash Award nor any other action taken pursuant to the Plan shall
constitute or be evidence of any agreement or understanding, express or
implied, that any of the Participating Companies will employ a grantee for any
period of time or in any position, or at any particular rate of compensation.


 


C.
No Shareholder Rights for Options. An optionee shall have no rights as a
shareholder with respect to the shares covered by his options until the date of
the issuance to him of a stock certificate therefor, and no adjustment will be
made for dividends or other rights for which the record date is prior to the
date such certificate is issued.


 


XXII.
CHANGES IN PRESENT STOCK


 


In
the event of any merger, consolidation, reorganization, recapitalization, stock
dividend, stock split, or other change in the corporate structure or
capitalization affecting the Company’s present Common Stock, appropriate
adjustment shall be made by the Board in the number (including the aggregate
numbers specified in Section IV, XI and XVIII(D)) and kind of shares that are
or may become subject to options and Stock Awards granted or to be granted
hereunder, and in the option price of shares which are subject to options
granted hereunder.


 


XXIII.
CHANGE IN CONTROL


 


In
the event that the Company is merged into or acquired by another entity in a
transaction involving a change in control, the Committee shall have complete
authority and discretion, but not the obligation, to accelerate the vesting of
outstanding stock options and the termination of restrictions on Stock Awards.


 


The
Committee may also ask the Board to negotiate, as part of any agreement
involving a sale or merger of the Company, a sale of substantially all the
Company’s assets or similar transaction, terms providing protection for
employees holding stock options or Stock Awards.


 


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XXIV.
EFFECTIVE DATE OF THE PLAN


 


The
Plan shall take effect on the date of adoption by the Board, subject to
approval by the shareholders of the Company at a meeting held within 12 months
after the date of such adoption. Options, Stock Awards or Cash Awards may be
granted under the Plan at any time after the adoption of the Plan by the Board
and prior to the termination of this Plan.


 


XXV.
AMENDMENT OF THE PLAN


 


The
Board or the Committee may suspend or discontinue the Plan or revise or amend
it in any respect whatsoever; provided, however, that the Company may seek
shareholder approval of an amendment if determined to be required by or
advisable by any law or regulation, including without limitation, any
regulations of the Securities and Exchange Commission or the Internal Revenue
Service, the rules of any stock exchange on which the Company’s stock is listed
or other applicable law or regulation.


 


XXVI.
NOTICE


 


Any written notice to the Company required by any of the provisions of
this Plan shall be addressed to the Secretary of the Company and shall become
effective when it is received.


 


XXVII.
COMPANY BENEFIT PLANS


 


Nothing
contained in this Plan shall prevent the employee prior to death, or the
employee’s dependents or beneficiaries after the employee’s death, from
receiving, in addition to any awards provided for under this Plan and any
salary, any payments under a Company retirement plan or which may be otherwise
payable or distributable to such employee, or to the employee’s dependents or
beneficiaries under any other plan or policy of the Company or otherwise.


 


XXVIII.
UNFUNDED PLAN


 


Insofar
as it provides for awards of stock or cash, this Plan shall be unfunded.
Although bookkeeping accounts may be established with respect to employees who
are granted awards of stock under this Plan, any such accounts will be used
merely as a bookkeeping convenience. Except for the holding of Restricted Stock
in escrow pursuant to subsection XIII(C), the Company shall not be required to
segregate any assets that may at any time be represented by awards of stock or
cash, nor shall this Plan be construed as providing for such segregation, nor
shall the Company nor the Board nor the Committee be deemed to be a trustee of
stock or cash to be awarded under the Plan. Any liability of the Company to any
employee with respect to an award of stock or cash under this Plan shall be
based solely upon any contractual obligations that may be created by the Plan;
no such obligation of the Company shall be deemed to be secured by any pledge
or other encumbrance on any property of the Company. Neither the Company nor
the Board nor the Committee shall be required to give any security or bond for
the performance of any obligation that may be created by this Plan.


 


XXIX.
GOVERNING LAW


 


This
Plan and all determinations made and actions taken pursuant hereto shall be
governed by the law of the State of California and construed accordingly.


 


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XXX.
BUYOUT PROVISIONS


 


At any time, the Committee may, but shall not be
required to, authorize the Company to offer to buy out for a payment in cash or
Common Stock an option, stock appreciation right, Stock Award or Restricted
Stock previously granted based on such terms and conditions as the Committee
shall establish and communicate to the holder in connection with such offer.


 




	
  11/24/94

  	
   

  	
  Adopted by the
  Compensation Committee

  
	
  2/28/95

  	
   

  	
  Approved
  by the Shareholders

  
	
  4/17/95

  	
   

  	
  Two
  for one stock split

  
	
  7/16/96

  	
   

  	
  Two
  for one stock split

  
	
  11/21/96

  	
   

  	
  Part
  1, Section II, Part 2, Section X and Part 4, Section XXV amended by the
  Compensation Committee

  
	
  7/17/97

  	
   

  	
  Part
  1, Section VI amended by the Compensation Committee

  
	
  2/12/99

  	
   

  	
  Part
  2, Section VI(B) & (D) amended by the Compensation Committee

  
	
  9/16/99

  	
   

  	
  Part
  1, Section VI amended by the Compensation Committee

  
	
  6/30/00

  	
   

  	
  Part
  2, Section VI(C) & Part 3, Section XIV amended by the Compensation
  Committee

  
	
  10/27/00

  	
   

  	
  Two
  for one stock split in the form of a stock dividend

  
	
  9/12/02

  	
   

  	
  Part 4, Section XXX added
  and plan restated by HR & Compensation
  Committee11/21/02   Part 1, Section II added new paragraph and
  plan restated by HR & Compensation Committee

  
	
   

  	
   

  	
   

  
	
  05/01/07

  	
   

  	
  Section VI.C, VII, VIII,
  X, XI, XIV, XVIII amended and restated by HR and Compensation Committee to
  defined FMV using closing price

  






 


 


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