Exhibit 10.1



 











Exhibit 10.1




BROADCOM CORPORATION




1998 STOCK INCENTIVE PLAN




AMENDED AND RESTATED EFFECTIVE FEBRUARY 24,
2006




ARTICLE ONE




GENERAL PROVISIONS






		
	I.	
    Purpose of the Plan



     
This amended and restated 1998 Stock Incentive Plan is intended
to promote the interests of Broadcom Corporation, a California
corporation, by providing eligible persons in the
Corporation’s service with the opportunity to acquire a
proprietary interest, or otherwise increase their proprietary
interest, in the Corporation as an incentive for them to remain
in such service.



     
Capitalized terms not otherwise defined herein shall have the
meanings assigned to such terms in the attached Appendix.



     
All share numbers in this restatement reflect the three-for-two
stock split that was effected on February 21, 2006 through
the payment of a dividend of one additional share of
Class A common stock for every two shares of Class A
common stock outstanding, and one additional share of
Class B common stock for every two shares of Class B
common stock outstanding, as of the record date of
February 6, 2006.






		
	II.	
    Structure of the Plan



     
A.     The Plan as hereby amended and
restated is divided into three equity incentive programs:






			
	 	• 	
    the Discretionary Grant Program, under which eligible persons
    may, at the discretion of the Plan Administrator, be granted
    options to purchase shares of Common Stock or stock appreciation
    rights tied to the value of such Common Stock,
	 
	 	• 	
    the Stock Issuance Program, under which eligible persons may be
    issued shares of Common Stock pursuant to restricted stock or
    restricted stock unit awards or other stock-based awards, made
    by and at the discretion of the Plan Administrator, that vest
    upon the completion of a designated service period and/or the
    attainment of pre-established performance milestones, or under
    which shares of Common Stock may be issued through direct
    purchase or as a bonus for services rendered the Corporation (or
    any Parent or Subsidiary), and
	 
	 	• 	
    the Director Automatic Grant Program, under which Eligible
    Directors shall automatically receive option grants and
    restricted stock units at designated intervals over their period
    of Board service.



     
B. The provisions of Articles One and Five shall apply
to all equity programs under the Plan and shall govern the
interests of all persons under the Plan.






		
	III.	
    Administration of the Plan



     
A. The Primary Committee shall have sole and exclusive
authority to administer the Discretionary Grant and Stock
Issuance Programs with respect to Section 16 Insiders.
Administration of the Discretionary Grant and Stock Issuance
Programs with respect to all other persons eligible to
participate in those programs may, at the Board’s
discretion, be vested in the Primary Committee or a Secondary
Committee, or the Board may retain the power to administer those
programs with respect to all such persons. However, any
discretionary Awards to members of the Primary Committee must be
authorized and approved by a disinterested majority of the Board.



     
B. Members of the Primary Committee or any Secondary
Committee shall serve for such period as the Board may determine
and may be removed by the Board at any time. The Board may also
at any time terminate the functions of any Secondary Committee
and reassume all powers and authority previously delegated to
such committee.



     
C. Each Plan Administrator shall, within the scope of its
administrative functions under the Plan, have full power and
authority (subject to the provisions of the Plan) to establish
such rules and regulations as it may deem appropriate for proper
administration of the Discretionary Grant and Stock Issuance
Programs and to make such determinations



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under, and issue such interpretations of, the provisions of
those programs and any outstanding Awards thereunder as it may
deem necessary or advisable. Decisions of the Plan Administrator
within the scope of its administrative functions under the Plan
shall be final and binding on all parties who have an interest
in the Discretionary Grant and Stock Issuance Programs under its
jurisdiction or any Award thereunder.



     
D. Service on the Primary Committee or the Secondary
Committee shall constitute service as a Board member, and
members of each such committee shall accordingly be entitled to
full indemnification and reimbursement as Board members for
their service on such committee. No member of the Primary
Committee or the Secondary Committee shall be liable for any act
or omission made in good faith with respect to the Plan or any
Award under the Plan.



     
E. Administration of the Director Automatic Grant Program
shall be self-executing in accordance with the terms of that
program, and no Plan Administrator shall exercise any
discretionary functions with respect to any Award under that
program.






		
	IV.	
    Eligibility



     
A. The persons eligible to participate in the Discretionary
Grant and Stock Issuance Programs are as follows:






		
	 	     
    (i) Employees,
	 
	 	     
    (ii) non-employee members of the Board or the board of
    directors of any Parent or Subsidiary, and
	 
	 	     
    (iii) consultants and other independent advisors who
    provide services to the Corporation (or any Parent or
    Subsidiary).



     
B. Each Plan Administrator shall, within the scope of its
administrative jurisdiction under the Plan, have full authority
to determine (i) with respect to Awards made under the
Discretionary Grant Program, which eligible persons are to
receive such Awards, the time or times when those Awards are to
be made, the number of shares to be covered by each such Award,
the status of any awarded option as either an Incentive Option
or a Non-Statutory Option, the exercise price per share in
effect for each Award (subject to the limitations set forth in
Article Two), the time or times when each Award is to vest
and become exercisable and the maximum term for which the Award
is to remain outstanding, and (ii) with respect to Awards
under the Stock Issuance Program, which eligible persons are to
receive such Awards, the time or times when the Awards are to be
made, the number of shares subject to each such Award, the
vesting schedule (if any) applicable to the shares subject to
such Award, and the cash consideration (if any) payable for such
shares.



     
C. The Plan Administrator shall have the absolute
discretion to grant options or stock appreciation rights in
accordance with the Discretionary Grant Program and to effect
stock issuances or other stock-based awards in accordance with
the Stock Issuance Program.



     
D. Eligible Directors for purposes of the Director
Automatic Grant Program shall be limited to members of the Board
who are not, at the time of such determination, employees of the
Corporation (or any Parent or Subsidiary). However, a Board
member who has previously been in the employ of the Corporation
(or any Parent or Subsidiary) shall not be eligible to receive
an Award under the Director Automatic Grant Program at the time
he or she first becomes a non-employee Board member, but shall
be eligible to receive periodic Awards under the Director
Automatic Grant Program while he or she continues to serve as an
Eligible Director.






		
	V.	
    Stock Subject to the Plan



     
A. The stock issuable under the Plan shall be shares of
authorized but unissued or reacquired Common Stock, including
shares repurchased by the Corporation on the open market.
Subject to the automatic share increase provisions of
Section V.B. of this Article One and any additional
shares authorized by the vote of the Board and approved by the
shareholders, as of February 24, 2006 the number of shares
of Common Stock reserved for issuance over the term of the Plan
shall not exceed
394,180,488 shares(1). To the extent any
unvested shares of Common Stock outstanding under









 













1 The Common Stock issuable under the Plan shall be
Class A Common Stock, except to the extent such stock is to
be issued upon the exercise of outstanding options incorporated
from the Predecessor Plans. For those options, the issuable
stock shall be Class B Common Stock. As of
February 24, 2006, 47,689,368 shares of Class B
Common Stock have been reserved for issuance over the remaining
term of the Plan.



2






 




the Predecessor Plans as of the Plan Effective Date are
subsequently repurchased by the Corporation, at the option
exercise price paid per share, in connection with the
holder’s termination of Service prior to vesting in those
shares, the repurchased shares shall be added to the reserve of
Common Stock available for issuance under the Plan, but in no
event shall such addition exceed 27,000,000 shares.



     
B. The number of shares of Common Stock available for
issuance under the Plan shall automatically increase on the
first trading day of January each calendar year during the term
of the Plan (beginning with calendar year 2000) by an amount
equal to four and one-half percent (4.5%) of the total number of
shares of Class A and Class B Common Stock outstanding
on the last trading day in December of the immediately preceding
calendar year, but in no event shall any such annual increase
exceed 37,500,000 shares.



     
C. No one person participating in the Plan may be granted
Awards for more than 9,000,000 shares of Common Stock in
the aggregate per calendar year.



     
D. Shares of Common Stock subject to outstanding Awards
under the Plan (including options incorporated into this Plan
from the Predecessor Plans) shall be available for subsequent
issuance under the Plan to the extent (i) those Awards
expire or terminate for any reason prior to the issuance of the
shares of Common Stock subject to those Awards or (ii) the
Awards are cancelled in accordance with the cancellation-regrant
provisions of Article Two. Unvested shares issued under the
Plan and subsequently cancelled or repurchased by the
Corporation at the original exercise or issue price paid per
share pursuant to the Corporation’s repurchase rights under
the Plan shall be added back to the number of shares of Common
Stock reserved for issuance under the Plan and shall accordingly
be available for subsequent reissuance under the Plan. All
shares that become available for reissuance under the Plan,
including the shares of Class B Common Stock subject to the
outstanding options incorporated into this Plan from the
Predecessor Plans that expire or terminate unexercised and any
unvested shares of Class B Common Stock repurchased by the
Corporation pursuant to its repurchase rights, shall be issuable
solely as Class A Common Stock. In addition, should the
exercise price of an option under the Plan be paid with shares
of Common Stock, the authorized reserve of Common Stock under
the Plan shall be reduced only by the net number of shares
issued under the exercised stock option. Should shares of Common
Stock otherwise issuable under the Plan be withheld by the
Corporation in satisfaction of the withholding taxes incurred in
connection with the issuance, exercise or vesting of an Award
under the Plan, the number of shares of Common Stock available
for issuance under the Plan shall be reduced only by the net
number of shares issued with respect to that Award.



     
E. If any change is made to the Common Stock by reason of
any stock split, stock dividend, recapitalization, combination
of shares, exchange of shares or other change affecting the
outstanding Common Stock as a class without the
Corporation’s receipt of consideration, appropriate
adjustments shall be made by the Plan Administrator to
(i) the maximum number and/or class of securities issuable
under the Plan, (ii) the maximum number and/or class of
securities for which any one person may be granted Awards under
the Plan per calendar year, (iii) the number and/or class
of securities for which stock option grants and restricted stock
unit awards are subsequently to be made under the Director
Automatic Grant Program to new and continuing Eligible
Directors, (iv) the number and/or class of securities and
the exercise or base price per share (or any other cash
consideration payable per share) in effect under each
outstanding Award under the Discretionary Grant Program and the
Director Automatic Grant Program, (v) the number and/or
class of securities and exercise price per share in effect under
each outstanding option incorporated into this Plan from the
Predecessor Plans, (vi) the number and/or class of
securities subject to each outstanding Award under the Stock
Issuance Program and the cash consideration (if any) payable per
share thereunder, (vii) the maximum number and/or class of
securities by which the share reserve may increase automatically
each calendar year pursuant to the provisions of
Section V.B of this Article One and (viii) the
maximum number and/or class of securities that may be added to
the Plan through the repurchase of unvested shares issued under
the Predecessor Plans. Similar adjustments shall be made to the
number of shares of Class B Common Stock issuable under the
Plan and the number of shares subject to outstanding stock
options for Class B shares and exercise price per share in
effect under those options in the event of any similar changes
to the outstanding shares of Class B Common Stock. To the
extent such adjustments are to be made to outstanding Awards,
those adjustments shall be effected in a manner that shall
preclude the enlargement or dilution of rights and benefits
under those Awards. The adjustments determined by the Plan
Administrator shall be final, binding and conclusive.



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ARTICLE TWO




DISCRETIONARY GRANT PROGRAM






		
	I.	
    Option Terms



     
Each option shall be evidenced by one or more documents in the
form approved by the Plan Administrator; provided,
however, that each such document shall comply with the terms
specified below. Each document evidencing an Incentive Option
shall, in addition, be subject to the provisions of the Plan
applicable to such options.



     
A. Exercise Price.



     
1. The exercise price per share shall be fixed by the Plan
Administrator but shall not be less than eighty-five percent
(85%) of the Fair Market Value per share of Common Stock on the
option grant date.



     
2. The exercise price shall become immediately due upon
exercise of the option and shall be payable in one or more of
the forms specified below:






		
	 	     
    (i) cash or check made payable to the Corporation,
	 
	 	     
    (ii) shares of Common Stock valued at Fair Market Value on
    the Exercise Date and held for the period (if any) necessary to
    avoid any additional charges to the Corporation’s earnings
    for financial reporting purposes, or
	 
	 	     
    (iii) to the extent the option is exercised for vested
    shares, through a special sale and remittance procedure pursuant
    to which the Optionee shall concurrently provide irrevocable
    instructions to (a) a brokerage firm (designated by the

Corporation)(2) to effect the immediate sale of the purchased
    shares and remit to the Corporation, out of the sale proceeds
    available on the settlement date, sufficient funds to cover the
    aggregate exercise price payable for the purchased shares plus
    all applicable federal, state and local income and employment
    taxes required to be withheld by the Corporation by reason of
    such exercise and (b) the Corporation to deliver the
    certificates for the purchased shares directly to such brokerage
    firm to complete the sale.



     
Except to the extent such sale and remittance procedure is
utilized, payment of the exercise price for the purchased shares
must be made on the Exercise Date.



     
B. Exercise and Term of Options. Each option shall
be exercisable at such time or times, during such period and for
such number of shares as shall be determined by the Plan
Administrator and set forth in the documents evidencing the
option. However, no option shall have a term in excess of ten
(10) years measured from the option grant date.



     
C. Effect of Termination of Service.



     
1. The following provisions shall govern the exercise of
any options held by the Optionee at the time of cessation of
Service or death:






		
	 	     
    (i) Any option outstanding at the time of the
    Optionee’s cessation of Service for any reason shall remain
    exercisable for such period of time thereafter as shall be
    determined by the Plan Administrator and set forth in the
    documents evidencing the option or as otherwise specifically
    authorized by the Plan Administrator in its sole discretion
    pursuant to an express written agreement with Optionee, but no
    such option shall be exercisable after the expiration of the
    option term.
	 
	 	     
    (ii) Any option held by the Optionee at the time of death
    and exercisable in whole or in part at that time may be
    subsequently exercised by the personal representative of the
    Optionee’s estate or by the person or persons to whom the
    option is transferred pursuant to the Optionee’s will or
    the laws of inheritance or by the Optionee’s designated
    beneficiary or beneficiaries of that option.
	 
	 	     
    (iii) Should the Optionee’s Service be terminated for
    Misconduct or should the Optionee otherwise engage in Misconduct
    while holding one or more outstanding options under this Article
    Two, all those options shall terminate immediately and cease to
    be outstanding.









 













2 With respect to Section 16 Insiders, the brokerage
firm need only be reasonably satisfactory to the Corporation for
purposes of administering such procedure.



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    (iv) During the applicable post-Service exercise period,
    the option may not be exercised in the aggregate for more than
    the number of vested shares for which that option is at the time
    exercisable. No additional shares shall vest under the option
    following the Optionee’s cessation of Service, except to
    the extent (if any) specifically authorized by the Plan
    Administrator in its sole discretion pursuant to an express
    written agreement with Optionee. Upon the expiration of the
    applicable exercise period or (if earlier) upon the expiration
    of the option term, the option shall terminate and cease to be
    outstanding for any shares for which the option has not been
    exercised.



     
2. The Plan Administrator shall have complete discretion,
exercisable either at the time an option is granted or at any
time while the option remains outstanding, to:






		
	 	     
    (i) extend the period of time for which the option is to
    remain exercisable following the Optionee’s cessation of
    Service from the limited exercise period otherwise in effect for
    that option to such greater period of time as the Plan
    Administrator shall deem appropriate, but in no event beyond the
    expiration of the option term, and/or
	 
	 	     
    (ii) permit the option to be exercised, during the
    applicable post-Service exercise period, not only with respect
    to the number of vested shares of Common Stock for which such
    option is exercisable at the time of the Optionee’s
    cessation of Service but also with respect to one or more
    additional installments in which the Optionee would have vested
    had the Optionee continued in Service.



     
D. Shareholder Rights. The holder of an option shall
have no shareholder rights with respect to the shares subject to
the option until such person shall have exercised the option,
paid the exercise price and become a holder of record of the
purchased shares.



     
E. Repurchase Rights. The Plan Administrator shall
have the discretion to grant options that are exercisable for
unvested shares of Common Stock. Should the Optionee cease
Service while holding such unvested shares, the Corporation
shall have the right to repurchase, at the exercise price paid
per share, any or all of those unvested shares. The terms upon
which such repurchase right shall be exercisable (including the
period and procedure for exercise and the appropriate vesting
schedule for the purchased shares) shall be established by the
Plan Administrator and set forth in the document evidencing such
repurchase right.



     
F. Transferability of Options. The transferability
of options granted under the Plan shall be governed by the
following provisions:






		
	 	     
    (i) Incentive Options. During the lifetime of
    the Optionee, Incentive Options shall be exercisable only by the
    Optionee and shall not be assignable or transferable other than
    by will or the laws of inheritance following the Optionee’s
    death.
	 
	 	     
    (ii) Non-Statutory Options. Non-Statutory
    Options shall be subject to the same limitation on transfer as
    Incentive Options, except that the Plan Administrator may
    structure one or more Non-Statutory Options so that the option
    may be assigned in whole or in part during the Optionee’s
    lifetime to one or more Family Members of the Optionee or to a
    trust established exclusively for the Optionee and/or one or
    more such Family Members, to the extent such assignment is in
    connection with the Optionee’s estate plan or pursuant to a
    domestic relations order. The assigned portion may only be
    exercised by the person or persons who acquire a proprietary
    interest in the option pursuant to the assignment. The terms
    applicable to the assigned portion shall be the same as those in
    effect for the option immediately prior to such assignment and
    shall be set forth in such documents issued to the assignee as
    the Plan Administrator may deem appropriate.
	 
	 	     
    (iii) Beneficiary Designations.
    Notwithstanding the foregoing, the Optionee may designate one or
    more persons as the beneficiary or beneficiaries of his or her
    outstanding options under this Article Two (whether
    Incentive Options or Non-Statutory Options), and those options
    shall, in accordance with such designation, automatically be
    transferred to such beneficiary or beneficiaries upon the
    Optionee’s death while holding those options. Such
    beneficiary or beneficiaries shall take the transferred options
    subject to all the terms and conditions of the applicable
    agreement evidencing each such transferred option, including
    (without limitation) the limited time period during which the
    option may be exercised following the Optionee’s death.






		
	II.	
    Incentive Options



     
The terms specified below, together with any additions,
deletions or changes thereto imposed from time to time pursuant
to the provisions of the Code governing Incentive Options, shall
be applicable to all Incentive Options. Except



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as modified by the provisions of this Section II, all the
provisions of Articles One, Two and Five shall be
applicable to Incentive Options. Options that are specifically
designated as Non-Statutory Options when issued under the Plan
shall not be subject to the terms of this Section II.



     
A. Eligibility. Incentive Options may only be
granted to Employees.



     
B. Exercise Price. The exercise price per share
shall not be less than one hundred percent (100%) of the Fair
Market Value per share of Common Stock on the option grant date.



     
C. Dollar Limitation. The aggregate Fair Market
Value of the shares of Common Stock (determined as of the
respective date or dates of grant) for which one or more options
granted to any Employee under the Plan (or any other option plan
of the Corporation or any Parent or Subsidiary) may for the
first time become exercisable as Incentive Options during any
one calendar year shall not exceed the sum of One Hundred
Thousand Dollars ($100,000). To the extent the Employee holds
two (2) or more such options which become exercisable for
the first time in the same calendar year, then for purposes of
the foregoing limitation on the exercisability of those options
as Incentive Options, such options shall be deemed to become
first exercisable in that calendar year on the basis of the
chronological order in which they were granted, except to the
extent otherwise provided under applicable law or regulation.



     
D. 10% Shareholder. If any Employee to whom an
Incentive Option is granted is a 10% Shareholder, then the
exercise price per share shall not be less than one hundred ten
percent (110%) of the Fair Market Value per share of Common
Stock on the option grant date, and the option term shall not
exceed five (5) years measured from the option grant date.






		
	III.	
    Stock Appreciation Rights



     
A. Authority. The Plan Administrator shall have full
power and authority, exercisable in its sole discretion, to
grant stock appreciation rights in accordance with this
Section III to selected Optionees or other individuals
eligible to receive option grants under the Discretionary Grant
Program.



     
B. Types. Three types of stock appreciation rights
shall be authorized for issuance under this Section III:
(i) tandem stock appreciation rights (“Tandem
Rights”), (ii) standalone stock appreciation rights
(“Standalone Rights”) and (iii) limited stock
appreciation rights (“Limited Rights”).



     
C. Tandem Rights. The following terms and conditions
shall govern the grant and exercise of Tandem Rights.






		
	 	     
    1. One or more Optionees may be granted a Tandem Right,
    exercisable upon such terms and conditions as the Plan
    Administrator may establish, to elect between the exercise of
    the underlying stock option for shares of Common Stock or the
    surrender of that option in exchange for a distribution from the
    Corporation in an amount equal to the excess of (i) the
    Fair Market Value (on the option surrender date) of the number
    of shares in which the Optionee is at the time vested under the
    surrendered option (or surrendered portion thereof) over
    (ii) the aggregate exercise price payable for such vested
    shares.
	 
	 	     
    2. No such option surrender shall be effective unless it is
    approved by the Plan Administrator, either at the time of the
    actual option surrender or at any earlier time. If the surrender
    is so approved, then the distribution to which the Optionee
    shall accordingly become entitled under this Section III
    may be made in shares of Common Stock valued at Fair Market
    Value on the option surrender date, in cash, or partly in shares
    and partly in cash, as the Plan Administrator shall in its sole
    discretion deem appropriate.
	 
	 	     
    3. If the surrender of an option is not approved by the
    Plan Administrator, then the Optionee shall retain whatever
    rights the Optionee had under the surrendered option (or
    surrendered portion thereof) on the option surrender date and
    may exercise such rights at any time prior to the later
    of (i) five (5) business days after the receipt of
    the rejection notice or (ii) the last day on which the
    option is otherwise exercisable in accordance with the terms of
    the instrument evidencing such option, but in no event may such
    rights be exercised more than ten (10) years after the date
    of the option grant.



     
D. Standalone Rights. The following terms and
conditions shall govern the grant and exercise of Standalone
Rights under this Article Two:






		
	 	     
    1. One or more individuals eligible to participate in the
    Discretionary Grant Program may be granted a Standalone Right
    not tied to any underlying option under this Discretionary Grant
    Program. The Standalone Right shall relate to a specified number
    of shares of Common Stock and shall be exercisable upon such
    terms and



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    conditions as the Plan Administrator may establish. In no event,
    however, may the Standalone Right have a maximum term in excess
    of ten (10) years measured from the grant date. Upon
    exercise of the Standalone Right, the holder shall be entitled
    to receive a distribution from the Corporation in an amount
    equal to the excess of (i) the aggregate Fair Market Value
    (on the exercise date) of the shares of Common Stock underlying
    the exercised right over (ii) the aggregate base price in
    effect for those shares.
	 
	 	     
    2. The number of shares of Common Stock underlying each
    Standalone Right and the base price in effect for those shares
    shall be determined by the Plan Administrator in its sole
    discretion at the time the Standalone Right is granted. In no
    event, however, may the base price per share be less than the
    Fair Market Value per underlying share of Common Stock on the
    grant date.
	 
	 	     
    3. Standalone Rights shall be subject to the same
    transferability restrictions applicable to Non-Statutory Options
    and may not be transferred during the holder’s lifetime,
    except to one or more Family Members of the holder or to a trust
    established exclusively for the holder and/or such Family
    Members, to the extent such assignment is in connection with the
    holder’s estate plan or pursuant to a domestic relations
    order covering the Standalone Right as marital property. In
    addition, one or more beneficiaries may be designated for an
    outstanding Standalone Right in accordance with substantially
    the same terms and provisions as set forth in Section I.F
    of this Article Two.
	 
	 	     
    4. The distribution with respect to an exercised Standalone
    Right may be made in shares of Common Stock valued at Fair
    Market Value on the exercise date, in cash, or partly in shares
    and partly in cash, as the Plan Administrator shall in its sole
    discretion deem appropriate.
	 
	 	     
    5. The holder of a Standalone Right shall have no
    shareholder rights with respect to the shares subject to the
    Standalone Right unless and until such person shall have
    exercised the Standalone Right and become a holder of record of
    shares of Common Stock issued upon the exercise of such
    Standalone Right.




     
E. Limited Rights. The following terms and
conditions shall govern the grant and exercise of Limited Rights
under this Article Two:






		
	 	     
    1. One or more Section 16 Insiders may, in the Plan
    Administrator’s sole discretion, be granted Limited Rights
    with respect to their outstanding options under this
    Article Two.
	 
	 	     
    2. Upon the occurrence of a Hostile Take-Over, the
    Section 16 Insider shall have the unconditional right
    (exercisable for a thirty (30)-day period following such Hostile
    Take-Over) to surrender each option with such a Limited Right to
    the Corporation. The Section 16 Insider shall in return be
    entitled to a cash distribution from the Corporation in an
    amount equal to the excess of (i) the Take-Over Price of
    the number of shares in which the Optionee is at the time vested
    under the surrendered option (or surrendered portion thereof)
    over (ii) the aggregate exercise price payable for those
    vested shares. Such cash distribution shall be made within five
    (5) days following the option surrender date.
	 
	 	     
    3. The Plan Administrator shall pre-approve, at the time
    such Limited Right is granted, the subsequent exercise of that
    right in accordance with the terms of the grant and the
    provisions of this Section III. No additional approval of
    the Plan Administrator or the Board shall be required at the
    time of the actual option surrender and cash distribution. Any
    unsurrendered portion of the option shall continue to remain
    outstanding and become exercisable in accordance with the terms
    of the instrument evidencing such grant.



     
F. Post-Service Exercise. The provisions governing
the exercise of Tandem, Standalone and Limited Stock
Appreciation Rights following the cessation of the
recipient’s Service or the recipient’s death shall be
substantially the same as those set forth in Section I.C of
this Article Two for the options granted under the
Discretionary Grant Program.



     
G. Net Counting. Upon the exercise of any Tandem,
Standalone or Limited Right under this Section III, the
share reserve under Section V of Article One shall
only be reduced by the net number of shares actually issued by
the Corporation upon such exercise, and not by the gross number
of shares as to which such Tandem, Standalone or Limited Right
is exercised.



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	IV.	
    Change in Control/ Hostile Take-Over



     
A. No Award outstanding under the Discretionary Grant
Program at the time of a Change in Control shall vest and become
exercisable on an accelerated basis if and to the extent that:
(i) such Award is, in connection with the Change in
Control, assumed by the successor corporation (or parent
thereof) or otherwise continued in full force and effect
pursuant to the terms of the Change in Control transaction,
(ii) such Award is replaced with a cash retention program
of the successor corporation that preserves the spread existing
at the time of the Change in Control on the shares of Common
Stock as to which the Award is not otherwise at that time vested
and exercisable and provides for subsequent payout of that
spread in accordance with the same exercise/vesting schedule
applicable to those shares, or (iii) the acceleration of
such Award is subject to other limitations imposed by the Plan
Administrator. However, if none of the foregoing conditions are
satisfied, each Award outstanding under the Discretionary Grant
Program at the time of the Change in Control but not otherwise
vested and exercisable as to all the shares at the time subject
to that Award shall automatically accelerate so that each such
Award shall, immediately prior to the effective date of the
Change in Control, vest and become exercisable as to all the
shares of Common Stock at the time subject to that Award and may
be exercised as to any or all of those shares as fully vested
shares of Common Stock.



     
B. All outstanding repurchase rights under the
Discretionary Grant Program shall also terminate automatically,
and the shares of Common Stock subject to those terminated
rights shall immediately vest in full, in the event of any
Change in Control, except to the extent: (i) those
repurchase rights are assigned to the successor corporation (or
parent thereof) or otherwise continue in full force and effect
pursuant to the terms of the Change in Control transaction or
(ii) such accelerated vesting is precluded by other
limitations imposed by the Plan Administrator.



     
C. Immediately following the consummation of the Change in
Control, all outstanding Awards under the Discretionary Grant
Program shall terminate and cease to be outstanding, except to
the extent assumed by the successor corporation (or parent
thereof) or otherwise expressly continued in full force and
effect pursuant to the terms of the Change in Control
transaction.



     
D. Each option that is assumed in connection with a Change
in Control or otherwise continued in effect shall be
appropriately adjusted, immediately after such Change in
Control, to apply to the number and class of securities that
would have been issuable to the Optionee in consummation of such
Change in Control had the option been exercised immediately
prior to such Change in Control. In the event outstanding
Standalone Rights are to be assumed in connection with a Change
in Control transaction or otherwise continued in effect, the
shares of Common Stock underlying each such Standalone Right
shall be adjusted immediately after such Change in Control to
apply to the number and class of securities into which those
shares of Common Stock would have been converted in consummation
of such Change in Control had those shares actually been
outstanding at that time. Appropriate adjustments to reflect
such Change in Control shall also be made to (i) the
exercise price payable per share under each outstanding option,
provided the aggregate exercise price payable for such
securities shall remain the same, (ii) the base price per
share in effect under each outstanding Standalone Right,
provided the aggregate base price shall remain the same,
(iii) the maximum number and/or class of securities
available for issuance over the remaining term of the Plan,
(iv) the maximum number and/or class of securities for
which any one person may be granted Awards under the Plan per
calendar year, (v) the maximum number and/or class of
securities by which the share reserve is to increase
automatically each calendar year pursuant to the automatic share
increase provisions of the Plan, (vi) the number and/or
class of securities for which stock option grants and restricted
stock unit awards are subsequently to be made under the Director
Automatic Grant Program to new and continuing Eligible Directors
and (vii) the maximum number and class of securities that
may be added to the Plan through the repurchase of unvested
shares issued under the Predecessor Plans. To the extent the
actual holders of the Corporation’s outstanding Common
Stock receive cash consideration for their Common Stock in
consummation of the Change in Control, the successor corporation
may, in connection with the assumption or continuation of the
outstanding Awards under the Discretionary Grant Program,
substitute, for the securities underlying those assumed Awards,
one or more shares of its own common stock with a fair market
value equivalent to the cash consideration paid per share of
Common Stock in such Change in Control transaction.



     
E. The Plan Administrator shall have the discretionary
authority to structure one or more outstanding Awards under the
Discretionary Grant Program so that those Awards shall,
immediately prior to the effective date of a Change in Control
or a Hostile Take-Over, vest and become exercisable as to all
the shares at the time subject to those Awards and may be
exercised as to any or all of those shares as fully vested
shares of Common Stock, whether or not those Awards are to be
assumed or otherwise continued in full force and effect pursuant
to the express terms of such transaction. In addition, the Plan
Administrator shall have the discretionary authority to
structure one or more of the



8







 




Corporation’s repurchase rights under the Discretionary
Grant Program so that those rights shall immediately terminate
at the time of such Change in Control or consummation of such
Hostile Take-Over and shall not be assignable to successor
corporation (or parent thereof), and the shares subject to those
terminated rights shall accordingly vest in full at the time of
such Change in Control or consummation of such Hostile Take-Over.



     
F. The Plan Administrator shall have full power and
authority to structure one or more outstanding Awards under the
Discretionary Grant Program so that those Awards shall
immediately vest and become exercisable as to all of the shares
at the time subject to those Awards in the event the
Optionee’s Service is subsequently terminated by reason of
an Involuntary Termination within a designated period (not to
exceed eighteen (18) months) following the effective date
of any Change in Control or a Hostile Take-Over in which those
Awards do not otherwise vest on an accelerated basis. Any Awards
so accelerated shall remain exercisable as to fully vested
shares until the expiration or sooner termination of their term.
In addition, the Plan Administrator may structure one or more of
the Corporation’s repurchase rights under the Discretionary
Grant Program so that those rights shall immediately terminate
with respect to any shares held by the Optionee at the time of
his or her Involuntary Termination, and the shares subject to
those terminated repurchase rights shall accordingly vest in
full at that time.



     
G. The portion of any Incentive Option accelerated in
connection with a Change in Control shall remain exercisable as
an Incentive Option only to the extent the applicable One
Hundred Thousand Dollar ($100,000) limitation is not exceeded.
To the extent such dollar limitation is exceeded, the
accelerated portion of such option shall be exercisable as a
Non-Statutory Option under the Federal tax laws.



     
H. Awards outstanding under the Discretionary Grant Program
shall in no way affect the right of the Corporation to adjust,
reclassify, reorganize or otherwise change its capital or
business structure or to merge, consolidate, dissolve, liquidate
or sell or transfer all or any part of its business or assets.






		
	V.	
    Exchange/ Repricing Programs



     
A. The Plan Administrator shall have the authority to
effect, at any time and from time to time, with the consent of
the affected holders, the cancellation of any or all outstanding
options or stock appreciation rights under the Discretionary
Grant Program (including outstanding options transferred from
the Predecessor Plan) and to grant in exchange one or more of
the following: (i) new options or stock appreciation rights
covering the same or a different number of shares of Common
Stock but with an exercise or base price per share not less than
the Fair Market Value per share of Common Stock on the new grant
date or (ii) cash or shares of Common Stock, whether vested
or unvested, equal in value to the value of the cancelled
options or stock appreciation rights.



     
B. The Plan Administrator shall also have the authority,
exercisable at any time and from time to time, with the consent
of the affected holders, to reduce the exercise or base price of
one or more outstanding stock options or stock appreciation
rights to a price not less than the then current Fair Market
Value per share of Common Stock or issue new stock options or
stock appreciation rights with a lower exercise or base price in
immediate cancellation of outstanding stock options or stock
appreciation rights with a higher exercise or base price.



9







 




ARTICLE THREE




STOCK ISSUANCE PROGRAM






		
	I.	
    Stock Issuance Terms



     
A. Issuances. Shares of Common Stock may be issued
under the Stock Issuance Program through direct and immediate
issuances without any intervening option grants. Each such stock
issuance shall be evidenced by a Stock Issuance Agreement that
complies with the terms specified below. Shares of Common Stock
may also be issued under the Stock Issuance Program pursuant to
share right awards or restricted stock units, awarded by and at
the discretion of the Plan Administrator, that entitle the
recipients to receive the shares underlying those awards or
units upon the attainment of designated performance goals and/or
the satisfaction of specified Service requirements or upon the
expiration of a designated time period following the vesting of
those awards or units.



     
B. Issue Price.



     
1. The price per share at which shares of Common Stock may
be issued under the Stock Issuance Program shall be fixed by the
Plan Administrator, but shall not be less than one hundred
percent (100%) of the Fair Market Value per share of Common
Stock on the issuance date.



     
2. Shares of Common Stock may be issued under the Stock
Issuance Program for any of the following items of consideration
that the Plan Administrator may deem appropriate in each
individual instance:






		
	 	     
    (i) cash or check made payable to the Corporation;
	 
	 	     
    (ii) past services rendered to the Corporation (or any
    Parent or Subsidiary); or
	 
	 	     
    (iii) any other valid form of consideration permissible
    under the California Corporations Code at the time such shares
    are issued.



     
C. Vesting Provisions.



     
1. Shares of Common Stock issued under the Stock Issuance
Program may, in the discretion of the Plan Administrator, be
fully and immediately vested upon issuance or may vest in one or
more installments over the Participant’s period of Service
and/or upon attainment of specified performance objectives. The
elements of the vesting schedule applicable to any unvested
shares of Common Stock issued under the Stock Issuance Program
shall be determined by the Plan Administrator and incorporated
into the Stock Issuance Agreement. Shares of Common Stock may
also be issued under the Stock Issuance Program pursuant to
share right awards or restricted stock units that entitle the
recipients to receive the shares underlying those awards and/or
units upon the attainment of designated performance goals or the
satisfaction of specified Service requirements or upon the
expiration of a designated time period following the vesting of
those awards or units, including (without limitation) a deferred
distribution date following the termination of the
Participant’s Service.




     
2. The Plan Administrator shall also have the discretionary
authority, consistent with Code Section 162(m), to
structure one or more Awards under the Stock Issuance Program so
that the shares of Common Stock subject to those Awards shall
vest (or vest and become issuable) upon the achievement of
certain pre-established corporate performance goals based on one
or more of the following criteria: (i) return on total
shareholder equity; (ii) net income per share of Common
Stock; (iii) net income or operating income;
(iv) earnings before interest, taxes, depreciation,
amortization and stock-compensation costs, or operating income
before depreciation and amortization; (v) sales or revenue
targets; (vi) return on assets, capital or investment;
(vii) cash flow; (viii) market share; (ix) cost
reduction goals; (x) budget comparisons;
(xi) implementation or completion of projects or processes
strategic or critical to the Corporation’s business
operations; (xii) measures of customer satisfaction;
(xiii) any combination of, or a specified increase in, any
of the foregoing; and (xiv) the formation of joint
ventures, research and development collaborations, marketing or
customer service collaborations, or the completion of other
corporate transactions intended to enhance the
Corporation’s revenue or profitability or expand its
customer base; provided, however, that for purposes of
items (ii), (iii) and (vii) above, the Plan
Administrator may, at the time the Awards are made, specify
certain adjustments to such items as reported in accordance with
generally accepted accounting principles in the
U.S. (“GAAP”), which will exclude from the
calculation of those performance goals one or more of the
following: certain charges related to acquisitions, stock-based
compensation, employer payroll tax expense on certain stock
option exercises, settlement costs, restructuring costs, gains
or losses on strategic investments, non-




10







 





operating gains or losses, certain other non-cash charges,
valuation allowance on deferred tax assets, and the related
income tax effects, purchases of property and equipment, and any
extraordinary non-recurring items as described in Accounting
Principles Board Opinion No. 30, provided that such
adjustments are in conformity with those reported by the Corporation on a
non-GAAP basis. In addition, such performance goals may be based
upon the attainment of specified levels of the
Corporation’s performance under one or more of the measures
described above relative to the performance of other entities
and may also be based on the performance of any of the
Corporation’s business groups or divisions thereof or any
Parent or Subsidiary. Performance goals may include a minimum
threshold level of performance below which no award will be
earned, levels of performance at which specified portions of an
award will be earned, and a maximum level of performance at
which an award will be fully earned. The Plan Administrator may
provide that, if the actual level of attainment for any
performance objective is between two specified levels, the
amount of the award attributable to that performance objective
shall be interpolated on a straight-line basis.




     
3. Any new, substituted or additional securities or other
property (including money paid other than as a regular cash
dividend) that the Participant may have the right to receive
with respect to the Participant’s unvested shares of Common
Stock by reason of any stock dividend, stock split,
recapitalization, combination of shares, exchange of shares or
other change affecting the outstanding Common Stock as a class
without the Corporation’s receipt of consideration shall be
issued subject to (i) the same vesting requirements
applicable to the Participant’s unvested shares of Common
Stock and (ii) such escrow arrangements as the Plan
Administrator shall deem appropriate.



     
4. The Participant shall have full shareholder rights with
respect to any shares of Common Stock issued to the Participant
under the Stock Issuance Program, whether or not the
Participant’s interest in those shares is vested.
Accordingly, the Participant shall have the right to vote such
shares and to receive any regular cash dividends paid on such
shares. The Participant shall not have any shareholder rights
with respect to the shares of Common Stock subject to a
restricted stock unit or share right award until that award
vests and the shares of Common Stock are actually issued
thereunder. However, dividend-equivalent units may be paid or
credited, either in cash or in actual or phantom shares of
Common Stock, on outstanding restricted stock unit or share
right awards, subject to such terms and conditions as the Plan
Administrator may deem appropriate.



     
5. Should the Participant cease to remain in Service while
holding one or more unvested shares of Common Stock issued under
the Stock Issuance Program or should the performance objectives
not be attained with respect to one or more such unvested shares
of Common Stock, then those shares shall be immediately
surrendered to the Corporation for cancellation, and the
Participant shall have no further shareholder rights with
respect to those shares. To the extent the surrendered shares
were previously issued to the Participant for consideration paid
in cash, cash equivalent or otherwise, the Corporation shall
repay to the Participant the same amount and form of
consideration as the Participant paid for the surrendered shares.



     
6. The Plan Administrator may in its discretion waive the
surrender and cancellation of one or more unvested shares of
Common Stock that would otherwise occur upon the cessation of
the Participant’s Service or the non-attainment of the
performance objectives applicable to those shares. Any such
waiver shall result in the immediate vesting of the
Participant’s interest in the shares of Common Stock as to
which the waiver applies. Such waiver may be effected at any
time, whether before or after the Participant’s cessation
of Service or the attainment or non-attainment of the applicable
performance objectives. However, no vesting requirements tied to
the attainment of performance objectives may be waived with
respect to shares that were intended at the time of issuance to
qualify as performance-based compensation under Code
Section 162(m), except in the event of the
Participant’s Involuntary Termination or as otherwise
provided in Section II.E of this Article Three.



     
7. Outstanding share right awards or restricted stock units
under the Stock Issuance Program shall automatically terminate,
and no shares of Common Stock shall actually be issued in
satisfaction of those awards or units, if the performance goals
or Service requirements established for such awards or units are
not attained or satisfied. The Plan Administrator, however,
shall have the discretionary authority to issue vested shares of
Common Stock under one or more outstanding share right awards or
restricted stock units as to which the designated performance
goals or Service requirements have not been attained or
satisfied. However, no vesting requirements tied to the
attainment of performance goals may be waived with respect to
awards or units which were at the time of grant intended to
qualify as performance-based compensation under Code
Section 162(m), except in the event of the
Participant’s Involuntary Termination or as otherwise
provided in Section II.E of this Article Three.



11







 






		
	II.	
    Change in Control/ Hostile Take-Over



     
A. All of the Corporation’s outstanding repurchase
rights under the Stock Issuance Program shall terminate
automatically, and all the shares of Common Stock subject to
those terminated rights shall immediately vest in full, in the
event of any Change in Control, except to the extent
(i) those repurchase rights are to be assigned to the
successor corporation (or parent thereof) or otherwise continued
in full force and effect pursuant to the express terms of the
Change in Control transaction or (ii) such accelerated
vesting is precluded by other limitations imposed in the Stock
Issuance Agreement.



     
B. Each outstanding Award under the Stock Issuance Program
that is assumed in connection with a Change in Control or
otherwise continued in effect shall be adjusted immediately
after the consummation of that Change in Control to apply to the
number and class of securities into which the shares of Common
Stock subject to the Award immediately prior to the Change in
Control would have been converted in consummation of such Change
in Control had those shares actually been outstanding at that
time, and appropriate adjustments shall also be made to the cash
consideration (if any) payable per share thereunder, provided
the aggregate amount of such consideration shall remain the
same. If any such Award is not so assumed or otherwise continued
in effect or replaced with a cash retention program which
preserves the Fair Market Value of the shares underlying the
Award at the time of the Change in Control and provides for the
subsequent payout of that value in accordance with the vesting
schedule in effect for the Award at the time of such Change in
Control, such Award shall vest, and the shares of Common Stock
subject to that Award shall be issued as fully-vested shares,
immediately prior to the consummation of the Change in Control.



     
C. The Plan Administrator shall have the discretionary
authority to structure one or more unvested Awards under the
Stock Issuance Program so that the shares of Common Stock
subject to those Awards shall automatically vest (or vest and
become issuable) in whole or in part immediately upon the
occurrence of a Change in Control or upon the subsequent
termination of the Participant’s Service by reason of an
Involuntary Termination within a designated period (not to
exceed eighteen (18) months) following the effective date
of that Change in Control transaction.



     
D. The Plan Administrator shall also have the discretionary
authority to structure one or more unvested Awards under the
Stock Issuance Program so that the shares of Common Stock
subject to those Awards shall automatically vest (or vest and
become issuable) in whole or in part immediately upon the
occurrence of a Hostile Take-Over or upon the subsequent
termination of the Participant’s Service by reason of an
Involuntary Termination within a designated period (not to
exceed eighteen (18) months) following the effective date
of that Hostile Take-Over.



     
E. The Plan Administrator’s authority under
Paragraphs C and D of this Section II shall also
extend to any Award intended to qualify as performance-based
compensation under Code Section 162(m), even though the
automatic vesting of those Awards pursuant to Paragraph C
or D of this Section II may result in their loss of
performance-based status under Code Section 162(m).



12







 




ARTICLE FOUR




DIRECTOR AUTOMATIC GRANT PROGRAM






		
	I.	
    Terms



     
This Article Four of the Plan has been amended and restated
effective as of February 24, 2006, subject to shareholder
approval at the 2006 Annual Meeting of Shareholders. All options
and restricted stock units outstanding under the Director
Automatic Grant Program on February 24, 2006 shall continue
in full force and effect in accordance with the existing terms
of the agreements evidencing those options and restricted stock
units, and no change in this amended and restated
Article Four shall affect those options or restricted stock
units. In the event the shareholders do not approve the restated
provisions of this Article Four at the 2006 Annual Meeting
of Shareholders, the provisions of Article Four as in
effect immediately prior to this amendment and restatement shall
remain in full force and effect.



     
A. Grant Dates. Grants under this amended and
restated Article Four shall be made on the dates specified
below:






		
	 	     
    1. On the date of each annual meeting of shareholders,
    beginning with the 2006 Annual Meeting of Shareholders, each
    individual who is to continue to serve as an Eligible Director,
    whether or not that individual is standing for re-election to
    the Board at that particular annual meeting of shareholders,
    shall automatically be granted a Non-Statutory Option to
    purchase 10,000 shares of Common Stock and restricted
    stock units covering 5,000 shares of Common Stock. There
    shall be no limit on the number of such annual option grants and
    restricted stock unit awards any one Eligible Director may
    receive over his or her period of Board service, and Eligible
    Directors who have previously been in the employ of the
    Corporation (or any Parent or Subsidiary) shall be eligible to
    receive one or more such annual option grants and restricted
    stock unit awards over their period of Board service.
	 
	 	     
    2. Each individual who is first elected or appointed as an
    Eligible Director at any time on or after February 24,
    2006, other than at an annual meeting of shareholders, shall, on
    the date he or she commences Service as an Eligible Director,
    automatically be granted the following Awards, provided such
    individual has not previously been in the employ of the
    Corporation (or any Parent or Subsidiary):






		
	 	     
    (i) a Non-Statutory Option to purchase that number of
    shares of Common Stock determined by multiplying the normal
    10,000-share automatic
    annual option grant by a fraction the numerator of which is the
    number of months (including any partial month, expressed as a
    fraction) that will elapse between the date he or she commenced
    Service as an Eligible Director and the first
    May 5th next succeeding such Service commencement date
    and the denominator of which is 12 months; and
	 
	 	     
    (ii) a restricted stock unit award covering the number of
    shares of Common Stock determined by multiplying the normal
    5,000-share automatic
    annual restricted stock unit award by a fraction the numerator
    of which is the number of months (including any partial month,
    expressed as a fraction) that will elapse between the date he or
    she commenced Service as an Eligible Director and the first
    May 5th next succeeding such Service commencement date
    and the denominator of which is 12 months.



     
B. Exercise Price.



     
1. The exercise price per share for each option granted
under this Article Four shall be equal to one hundred
percent (100%) of the Fair Market Value per share of Common
Stock on the option grant date.



     
2. The exercise price shall be payable in one or more of
the alternative forms authorized under the Discretionary Grant
Program. Except to the extent the sale and remittance procedure
specified thereunder is utilized, payment of the exercise price
for the purchased shares must be made on the Exercise Date.



     
C. Option Term. Each option granted under this
Article Four shall have a term of ten (10) years
measured from the option grant date.



     
D. Exercise and Vesting of Options. Each option
granted under this Article Four shall be immediately
exercisable for any or all of the option shares. However, any
unvested shares purchased under the option shall be subject to
repurchase by the Corporation, at the exercise price paid per
share, upon the Optionee’s cessation of Board service prior
to vesting in those shares. The shares subject to each grant
shall vest, and the Corporation’s repurchase right shall
lapse,



13







 




in a series of one or more successive equal quarterly
installments over the period measured from the date of the
option grant. The quarterly vesting dates shall be the
5th day of February, May, August and November each year,
with the first such quarterly vesting date to be at least thirty
(30) days after the date of the option grant and the final
vesting date to be the earlier of (i) the last
quarterly vesting date determined for such option in accordance
with the foregoing specified dates or (ii) the day
immediately preceding the date of the first annual meeting of
shareholders following the grant date of such option. The
Optionee shall not vest in any additional shares subject to such
option following his or her cessation of service as a Board
member; provided, however, that should such cessation of
Board service occur by reason of the Optionee’s death or
Permanent Disability, all the shares purchased or purchasable
under that option shall immediately vest.



     
E. Vesting of Restricted Stock Units and Issuance of
Shares. Each restricted stock unit award shall vest in a
series of one or more successive equal quarterly installments
over the period measured from the date of such award. The
quarterly vesting dates shall be the 5th day of February,
May, August and November each year, with the first such
quarterly vesting date to be at least thirty (30) days
after the date of the award and the final vesting date to be the
earlier of (i) the last quarterly vesting date
determined for such award in accordance with the foregoing
specified dates or (ii) the day immediately preceding the
date of the first annual meeting of shareholders following the
date of such award. The Board member shall not vest in any
additional restricted stock units following his or her cessation
of service as a Board member; provided, however, that
each restricted stock unit award held by an Eligible Director
under the Director Automatic Grant Program will immediately vest
in full upon his or her cessation of Board service by reason of
death or Permanent Disability. As the restricted stock units
under the Director Automatic Grant Program vest in one or more
installments, the shares of Common Stock underlying those vested
units shall be promptly issued.



     
F. Limited Transferability of Options. Each option
granted under the Director Automatic Grant Program may be
assigned in whole or in part during the Optionee’s lifetime
to one or more Family Members of the Optionee or to a trust
established exclusively for Optionee and/or for one or more such
Family Members, to the extent such assignment is in connection
with the Optionee’s estate plan or pursuant to a domestic
relations order. The assigned portion may only be exercised by
the person or persons who acquire a proprietary interest in the
option pursuant to the assignment. The terms applicable to the
assigned portion shall be the same as those in effect for the
option immediately prior to such assignment and shall be set
forth in such documents issued to the assignee as the Plan
Administrator may deem appropriate. The Optionee may also
designate one or more persons as the beneficiary or
beneficiaries of his or her outstanding options under this
Article Four, and those options shall, in accordance with
such designation, automatically be transferred to such
beneficiary or beneficiaries upon the Optionee’s death
while holding those options. Such beneficiary or beneficiaries
shall take the transferred options subject to all the terms and
conditions of the applicable agreement evidencing each such
transferred option, including (without limitation) the limited
time period during which the option may be exercised following
the Optionee’s death.



     
G. Termination of Board Service. The following
provisions shall govern the exercise of any outstanding options
under the Director Automatic Grant Program held by the Optionee
at the time the Optionee ceases to serve as a Board member:






		
	 	     
    (i) The Optionee (or, in the event of Optionee’s
    death, the personal representative of the Optionee’s estate
    or the person or persons to whom the option is transferred
    pursuant to the Optionee’s will or the laws of inheritance
    or the designated beneficiary or beneficiaries of such option)
    shall have a twelve (12)-month period following the date of such
    cessation of Board service in which to exercise each such option.
	 
	 	     
    (ii) During the twelve (12)-month exercise period, the
    option may not be exercised in the aggregate for more than the
    number of vested shares of Common Stock for which the option is
    exercisable at the time of the Optionee’s cessation of
    Board service.
	 
	 	     
    (iii) Should the Optionee cease to serve as a Board member
    by reason of death or Permanent Disability, all shares at the
    time subject to the option shall immediately vest so that such
    option may, during the twelve
    (12)-month exercise
    period following such cessation of Board service, be exercised
    for all or any portion of those shares as fully-vested shares of
    Common Stock.
	 
	 	     
    (iv) In no event shall the option remain exercisable after
    the expiration of its term. Upon the expiration of the twelve
    (12)-month exercise period or (if earlier) upon the expiration
    of the option term, the option shall terminate and cease to be
    outstanding for any vested shares for which the option has not
    been exercised. However, the option shall, immediately upon the
    Optionee’s cessation of Board service for any reason other
    than death or



14







 


		
	 	
    Permanent Disability, terminate and cease to be outstanding to
    the extent the option is not otherwise at that time exercisable
    for vested shares.







		
	II.	
    Change in Control/ Hostile Take-Over



     
A. In the event of any Change in Control while the Eligible
Director remains a Board member, the following provisions shall
apply:






		
	 	     
    (i) The shares of Common Stock at the time subject to each
    outstanding option held by such Eligible Director under the
    Director Automatic Grant Program but not otherwise vested shall
    automatically vest in full so that each such option shall,
    immediately prior to the effective date of the Change in
    Control, become exercisable for all the option shares as
    fully-vested shares of Common Stock and may be exercised for any
    or all of those vested shares. Immediately following the
    consummation of the Change in Control, each automatic option
    grant shall terminate and cease to be outstanding, except to the
    extent assumed by the successor corporation (or parent thereof)
    or otherwise continued in full force and effect pursuant to the
    express terms of the Change in Control transaction.
	 
	 	     
    (ii) The shares of Common Stock which are at the time of
    such Change in Control subject to any outstanding restricted
    stock units awarded to such Director under the Director
    Automatic Grant Program shall, immediately prior to the
    effective date of the Change in Control, vest in full and be
    issued to such individual as soon as administratively
    practicable thereafter, but in no event later than fifteen
    (15) business days.



     
B. In the event of a Hostile Take-Over while the Eligible
Director remains a Board member, the following provisions shall
apply:






		
	 	     
    (i) The shares of Common Stock at the time subject to each
    option outstanding option held by such Eligible Director under
    the Director Automatic Grant Program but not otherwise vested
    shall automatically vest in full so that each such option shall,
    immediately prior to the effective date of the Hostile
    Take-Over, become exercisable for all the option shares as
    fully-vested shares of Common Stock and may be exercised for any
    or all of those vested shares. Each such option shall remain
    exercisable for such fully-vested option shares until the
    expiration or sooner termination of the option term or the
    surrender of the option in connection with that Hostile
    Take-Over.
	 
	 	     
    (ii) The shares of Common Stock which are at the time of
    such Hostile Take-Over subject to any outstanding restricted
    stock units awarded to such Eligible Director under the Director
    Automatic Grant Program shall, immediately prior to the
    effective date of the Hostile Take-Over, vest in full and be
    issued to such individual as soon as administratively
    practicable thereafter, but in no event later than fifteen
    (15) business days.



     
C. All outstanding repurchase rights under the Director
Automatic Grant Program shall automatically terminate, and the
shares of Common Stock subject to those terminated rights shall
immediately vest in full, in the event of any Change in Control
or Hostile Take-Over.



     
D. Upon the occurrence of a Hostile Take-Over, the Eligible
Director shall have a thirty (30)-day period in which to
surrender to the Corporation each of his or her outstanding
option grants under the Director Automatic Grant Program. Such
Eligible Director shall in return be entitled to a cash
distribution from the Corporation in an amount equal to the
excess of (i) the Take-Over Price of the shares of Common
Stock at the time subject to each surrendered option (whether or
not the Eligible Director is otherwise at the time vested in
those shares) over (ii) the aggregate exercise price
payable for such shares. Such cash distribution shall be paid
within five (5) days following the surrender of the option
to the Corporation. No approval or consent of the Board or any
Plan Administrator shall be required at the time of the actual
option surrender and cash distribution.



15







 



     
E. Each option that is assumed in connection with a Change
in Control or otherwise continued in full force and effect shall
be appropriately adjusted, immediately after such Change in
Control, to apply to the number and class of securities that
would have been issuable to the Optionee in consummation of such
Change in Control had the option been exercised immediately
prior to such Change in Control. Appropriate adjustments shall
also be made to the exercise price payable per share under each
outstanding option, provided the aggregate exercise price
payable for such securities shall remain the same. To the extent
the actual holders of the Corporation’s outstanding Common
Stock receive cash consideration for their Common Stock in
consummation of the Change in Control transaction, the successor
corporation may, in connection with the assumption of the
outstanding options under the Director Automatic Grant Program,
substitute one or more shares of its own common stock with a
fair market value equivalent to the cash consideration paid per
share of Common Stock in such Change in Control transaction.



     
F. The existence of outstanding Awards under the Director
Automatic Grant Program shall in no way affect the right of the
Corporation to adjust, reclassify, reorganize or otherwise
change its capital or business structure or to merge,
consolidate, dissolve, liquidate or sell or transfer all or any
part of its business or assets.






		
	III.	
    Remaining Terms



     
The remaining terms of each option granted under the Director
Automatic Grant Program shall be the same as the terms in effect
for option grants made under the Discretionary Grant Program.



16







 




ARTICLE FIVE




MISCELLANEOUS






		
	I.	
    Tax Withholding



     
A. The Corporation’s obligation to deliver shares of
Common Stock upon the issuance, exercise or vesting of Awards
under the Plan shall be subject to the satisfaction of all
applicable federal, state and local income and employment tax
withholding requirements.



     
B. The Plan Administrator may, in its discretion, provide
any or all Optionees or Participants to whom Awards are made
under the Plan (other than the Awards made under the Director
Automatic Grant Program) with the right to utilize either or
both of the following methods to satisfy all or part of the
Withholding Taxes to which those holders may become subject in
connection with the issuance, exercise or vesting of those
Awards.






		
	 	     
    Stock Withholding: The election to have the
    Corporation withhold, from the shares of Common Stock otherwise
    issuable upon the issuance, exercise or vesting of those Awards
    a portion of those shares with an aggregate Fair Market Value
    equal to the percentage of the Withholding Taxes (not to exceed
    one hundred percent (100%)) designated by the Optionee or
    Participant and make a cash payment equal to such Fair Market
    Value directly to the appropriate taxing authorities on such
    individual’s behalf. The shares of Common Stock so withheld
    shall not reduce the number of shares of Common
    Stock authorized for issuance under the Plan.
	 
	 	     
    Stock Delivery: The election to deliver to the
    Corporation, at the time the Award is issued, exercised or
    vests, one or more shares of Common Stock previously acquired by
    such the Optionee or Participant (other than in connection with
    the issuance, exercise or vesting triggering the Withholding
    Taxes) with an aggregate Fair Market Value equal to the
    percentage of the Withholding Taxes (not to exceed one hundred
    percent (100%)) designated by such holder. The shares of Common
    Stock so delivered shall not be added to the shares of Common
    Stock authorized for issuance under the Plan.






		
	II.	
    Share Escrow/ Legends



     
Unvested shares issued under the Plan may, in the Plan
Administrator’s discretion, be held in escrow by the
Corporation until the Participant’s interest in such shares
vests or may be issued directly to the Participant with
restrictive legends on the certificates evidencing those
unvested shares.






		
	III.	
    Effective Date and Term of the Plan



     
A. The Plan became effective immediately on the Plan
Effective Date. Awards may be granted under the Discretionary
Grant Program, the Stock Issuance Program and the Director
Automatic Grant Program at any time on or after the Plan
Effective Date.



     
B. The Plan shall serve as the successor to the Predecessor
Plans, and no further option grants or direct stock issuances
shall be made under the Predecessor Plans after April 16,
1998. All options outstanding under the Predecessor Plans on
April 16, 1998 were incorporated into the Plan at that time
and are treated as outstanding options under the Plan. However,
each outstanding option so incorporated shall continue to be
governed solely by the terms of the documents evidencing such
option, and no provision of the Plan shall be deemed to affect
or otherwise modify the rights or obligations of the holders of
such incorporated options with respect to their acquisition of
shares of Common Stock.



     
C. One or more provisions of the Plan, including (without
limitation) the option/vesting acceleration provisions of
Article Two relating to Changes in Control and Hostile
Take-Overs, may, in the Plan Administrator’s discretion, be
extended to one or more options incorporated from the
Predecessor Plans that do not otherwise contain such provisions.



     
D. The Plan was amended and restated by the Board on
February 24, 2006 (the “2006 Restatement”),
subject to shareholder approval at the 2006 Annual Meeting of
Shareholders, to (i) restructure the Director Automatic
Grant Program in effect for new and continuing Eligible
Directors to revise the number of shares of Common Stock subject
to the combined stock option grant and restricted stock unit
award made to each continuing Eligible Director, provide for a
pro-rated annual grant of options and restricted stock units for
Eligible Directors who first commence Service as such on a date
that is not the day of an annual meeting of shareholders, and
eliminate the automatic four-year renewal grants for continuing
Board members and (ii) allow for certain adjustments to be
made to any cash flow performance goals established under the
Stock Issuance Program. The revisions to the Director Automatic
Grant Program and Stock



17







 




Issuance Program shall not become effective unless the
shareholders approve the 2006 Restatement at the 2006 Annual
Meeting of Shareholders. Should shareholder approval not be
obtained at the 2006 Annual Meeting of Shareholders, the
proposed revisions to the Director Automatic Grant and Stock
Issuance Programs will not be implemented. The Plan will,
however, continue in effect, and Awards will continue to be made
under the Plan until all the shares available for issuance under
the Plan have been issued pursuant to Awards made under the
Plan. In addition, the Director Automatic Option Grant Program
for Eligible Directors will continue in effect in accordance
with the provisions of that program as they existed immediately
prior to the February 24, 2006 revisions.



     
E. The Plan shall terminate upon the earliest to
occur of (i) February 28, 2014, (ii) the date on
which all shares available for issuance under the Plan shall
have been issued as fully-vested shares or (iii) the
termination of all outstanding Awards in connection with a
Change in Control. Should the Plan terminate February 28,
2014, all Awards outstanding at that time shall continue to have
force and effect in accordance with the provisions of the
documents evidencing such Awards.






		
	IV.	
    Amendment of the Plan



     
A. The Board shall have complete and exclusive power and
authority to amend or modify the Plan in any or all respects.
However, no such amendment or modification shall adversely
affect the rights and obligations with respect to Awards at the
time outstanding under the Plan unless the Optionee or the
Participant consents to such amendment or modification. In
addition, shareholder approval will be required for any
amendment to the Plan that (i) materially increases the
number of shares of Common Stock available for issuance under
the Plan, (ii) materially expands the class of individuals
eligible to receive option grants or other awards under the
Plan, (iii) materially increases the benefits accruing to
the Optionees and Participants under the Plan or materially
reduces the price at which shares of Common Stock may be issued
or purchased under the Plan, (iv) materially extends the
term of the Plan or (v) expands the types of awards
available for issuance under the Plan.



     
B. Awards may be made under the Plan that involve shares of
Common Stock in excess of the number of shares then available
for issuance under the Plan, provided no shares shall actually
be issued pursuant to those Awards until the number of shares of
Common Stock available for issuance under the Plan is
sufficiently increased either by (1) the automatic annual
share increase provisions of Section V.B. of
Article One or (2) shareholder approval of an
amendment of the Plan sufficiently increasing the share reserve.
If shareholder approval is required and is not obtained within
twelve (12) months after the date of the first such excess
Award, then all Awards made on the basis of such excess shares
shall terminate and cease to be outstanding.






		
	V.	
    Use of Proceeds



     
Any cash proceeds received by the Corporation from the sale of
shares of Common Stock under the Plan shall be used for general
corporate purposes.






		
	VI.	
    Regulatory Approvals



     
A. The implementation of the Plan, the grant of any Award
and the issuance of shares of Common Stock in connection with
the issuance, exercise or vesting of any Award made under the
Plan shall be subject to the Corporation’s procurement of
all approvals and permits required by regulatory authorities
having jurisdiction over the Plan, the Awards made under the
Plan and the shares of Common Stock issuable pursuant to those
Awards.



     
B. No shares of Common Stock or other assets shall be
issued or delivered under the Plan unless and until there shall
have been compliance with all applicable requirements of Federal
and state securities laws, including the filing and
effectiveness of the
Form S-8
registration statement for the shares of Common Stock issuable
under the Plan, and all applicable listing requirements of any
stock exchange (or the NASDAQ National
Market®,
if applicable) on which Common Stock is then listed for trading.






		
	VII.	
    No Employment/ Service Rights



     
Nothing in the Plan shall confer upon the Optionee or the
Participant any right to continue in Service for any period of
specific duration or interfere with or otherwise restrict in any
way the rights of the Corporation (or any Parent or Subsidiary
employing or retaining such person) or of the Optionee or the
Participant, which rights are hereby expressly reserved by each,
to terminate such person’s Service at any time for any
reason, with or without cause.



18







 




APPENDIX



     
The following definitions shall be in effect under the Plan:






		
	 	     
    A. Award shall mean any of the following stock or
    stock-based awards authorized for issuance or grant under the
    Plan: stock option, stock appreciation right, direct stock
    issuance, restricted stock or restricted stock unit award or
    other stock-based award.
	 
	 	     
    B. Board shall mean the Corporation’s Board of
    Directors.
	 
	 	     
    C. Change in Control shall mean a change in
    ownership or control of the Corporation effected through any of
    the following transactions:






		
	 	     
    (i) a shareholder-approved merger or consolidation in which
    securities possessing more than fifty percent (50%) of the total
    combined voting power of the Corporation’s outstanding
    securities are transferred to a person or persons different from
    the persons holding those securities immediately prior to such
    transaction, or
	 
	 	     
    (ii) a shareholder-approved sale, transfer or other
    disposition of all or substantially all of the
    Corporation’s assets in complete liquidation or dissolution
    of the Corporation, or
	 
	 	     
    (iii) the acquisition, directly or indirectly by any person
    or related group of persons (other than the Corporation or a
    person that directly or indirectly controls, is controlled by,
    or is under common control with, the Corporation), of beneficial
    ownership (within the meaning of
    Rule 13d-3 of the
    Securities Exchange Act of 1934, as amended (the
    “1934 Act”)) of securities possessing more than
    fifty percent (50%) of the total combined voting power of the
    Corporation’s outstanding securities pursuant to a tender
    or exchange offer made directly to the Corporation’s
    shareholders.






		
	 	     
    D. Code shall mean the Internal Revenue Code of
    1986, as amended.
	 
	 	     
    E. Common Stock shall mean the Corporation’s
    Class A Common Stock.
	 
	 	     
    F. Corporation shall mean Broadcom Corporation, a
    California corporation, and any corporate successor to all or
    substantially all of the assets or voting stock of Broadcom
    Corporation that shall by appropriate action adopt the Plan.
	 
	 	     
    G. Director Automatic Grant Program shall mean the
    director automatic grant program in effect under
    Article Four of the Plan for the Eligible Directors.
	 
	 	     
    H. Discretionary Grant Program shall mean the
    discretionary grant program in effect under Article Two of
    the Plan pursuant to which stock options and stock appreciation
    rights may be granted to one or more eligible individuals.
	 
	 	     
    I. Eligible Director shall mean a Board member who
    is not, at the time of such determination, an employee of the
    Corporation (or any Parent or Subsidiary) and who is accordingly
    eligible to participate in the Director Automatic Grant Program
    in accordance with the eligibility provisions of
    Articles One and Four.
	 
	 	     
    J. Employee shall mean an individual who is in the
    employ of the Corporation (or any Parent or Subsidiary), subject
    to the control and direction of the employer entity as to both
    the work to be performed and the manner and method of
    performance.
	 
	 	     
    K. Exercise Date shall mean the date on which the
    Corporation shall have received written notice of the option
    exercise.
	 
	 	     
    L. Fair Market Value per share of Common Stock on
    any relevant date shall be determined in accordance with the
    following provisions:






		
	 	     
    (i) If the Common Stock is at the time traded on the NASDAQ
    National Market, then the Fair Market Value shall be the closing
    selling price per share of Common Stock at the close of regular
    hours trading (i.e., before after- hours trading begins) on the
    NASDAQ National Market on the date in question, as such price is
    reported by the National Association of Securities Dealers. If
    there is no closing selling price for the Common Stock on the
    date in question, then the Fair Market Value shall be the
    closing selling price on the last preceding date for which such
    quotation exists.



19







 






		
	 	     
    (ii) If the Common Stock is at the time listed on any Stock
    Exchange, then the Fair Market Value shall be the closing
    selling price per share of Common Stock at the close of regular
    hours trading (i.e., before after-hours trading begins) on the
    date in question on the Stock Exchange determined by the Plan
    Administrator to be the primary market for the Common Stock, as
    such price is officially quoted in the composite tape of
    transactions on such exchange. If there is no closing selling
    price for the Common Stock on the date in question, then the
    Fair Market Value shall be the closing selling price on the last
    preceding date for which such quotation exists.






		
	 	     
    M. Family Member means, with respect to a particular
    Optionee or Participant, any child, stepchild, grandchild,
    parent, stepparent, grandparent, spouse, former spouse, sibling,
    niece, nephew,
    mother-in-law,
    father-in-law,
    son-in-law,
    daughter-in-law,
    bother-in-law or
    sister-in-law.
	 
	 	     
    N. Hostile Take-Over shall mean either of the
    following events effecting a change in control or ownership of
    the Corporation:






		
	 	     
    (i) the acquisition, directly or indirectly, by any person
    or related group of persons (other than the Corporation or a
    person that directly or indirectly controls, is controlled by,
    or is under common control with, the Corporation) of beneficial
    ownership (within the meaning of
    Rule 13d-3 of the
    1934 Act) of securities possessing more than fifty percent
    (50%) of the total combined voting power of the
    Corporation’s outstanding securities pursuant to a tender
    or exchange offer made directly to the Corporation’s
    shareholders that the Board does not recommend such shareholders
    to accept, or
	 
	 	     
    (ii) a change in the composition of the Board over a period
    of thirty-six (36) consecutive months or less such that a
    majority of the Board members ceases, by reason of one or more
    contested elections for Board membership, to be composed of
    individuals who either (A) have been Board members
    continuously since the beginning of such period or (B) have
    been elected or nominated for election as Board members during
    such period by at least a majority of the Board members
    described in clause (A) who were still in office at
    the time the Board approved such election or nomination.






		
	 	     
    O. Incentive Option shall mean an option that
    satisfies the requirements of Code Section 422.
	 
	 	     
    P. Involuntary Termination shall mean the
    termination of the Service of any individual that occurs by
    reason of:






		
	 	     
    (i) such individual’s involuntary dismissal or
    discharge by the Corporation for reasons other than
    Misconduct, or
	 
	 	     
    (ii) such individual’s voluntary resignation following
    (A) a change in his or her position with the Corporation
    that materially reduces his or her duties and responsibilities
    or the level of management to which he or she reports,
    (B) a reduction in his or her level of compensation
    (including base salary, fringe benefits and target bonus under
    any corporate-performance based bonus or incentive programs) by
    more than fifteen percent (15%) or (C) a relocation of such
    individual’s place of employment by more than fifty
    (50) miles, provided and only if such change, reduction or
    relocation is effected by the Corporation without the
    individual’s consent.






		
	 	     
    Q. Misconduct shall mean the commission of any act
    of fraud, embezzlement or dishonesty by the Optionee or
    Participant, any unauthorized use or disclosure by such person
    of confidential information or trade secrets of the Corporation
    (or any Parent or Subsidiary), or any other intentional
    misconduct by such person adversely affecting the business or
    affairs of the Corporation (or any Parent or Subsidiary) in a
    material manner. The foregoing definition shall not in any way
    preclude or restrict the right of the Corporation (or any Parent
    or Subsidiary) to discharge or dismiss any Optionee, Participant
    or other person in the Service of the Corporation (or any Parent
    or Subsidiary) for any other acts or omissions, but such other
    acts or omissions shall not be deemed, for purposes of the Plan,
    to constitute grounds for termination for Misconduct.
	 
	 	     
    R. 1934 Act shall mean the Securities Exchange
    Act of 1934, as amended.
	 
	 	     
    S. Non-Statutory Option shall mean an option not
    intended to satisfy the requirements of Code Section 422.
	 
	 	     
    T. Optionee shall mean any person to whom an option
    is granted under the Discretionary Grant or Director Automatic
    Grant Program.



20







 






		
	 	     
    U. Parent shall mean any corporation (other than the
    Corporation) in an unbroken chain of corporations ending with
    the Corporation, provided each corporation in the unbroken chain
    (other than the Corporation) owns, at the time of the
    determination, stock possessing fifty percent (50%) or more of
    the total combined voting power of all classes of stock in one
    of the other corporations in such chain.
	 
	 	     
    V. Participant shall mean any person who is issued
    shares of Common Stock or restricted stock units or other
    stock-based awards under the Stock Issuance Program, and any
    person who is issued restricted stock units under the Director
    Automatic Grant Program.
	 
	 	     
    W. Permanent Disability or Permanently Disabled
    shall mean the inability of the Optionee or the Participant to
    engage in any substantial gainful activity by reason of any
    medically determinable physical or mental impairment expected to
    result in death or to be of continuous duration of twelve
    (12) months or more. However, solely for purposes of the
    Director Automatic Grant Program, Permanent Disability or
    Permanently Disabled shall mean the inability of the Eligible
    Director to perform his or her usual duties as a Board member by
    reason of any medically determinable physical or mental
    impairment expected to result in death or to be of continuous
    duration of twelve (12) months or more.
	 
	 	     
    X. Plan shall mean the Corporation’s 1998 Stock
    Incentive Plan, as set forth in this document.
	 
	 	     
    Y. Plan Administrator shall mean the particular
    entity, whether the Primary Committee, the Board or a Secondary
    Committee, which is authorized to administer the Discretionary
    Grant and Stock Issuance Programs with respect to one or more
    classes of eligible persons, to the extent such entity is
    carrying out its administrative functions under those programs
    with respect to the persons then subject to its jurisdiction.
	 
	 	     
    Z. Plan Effective Date shall mean February 3,
    1998.
	 
	 	     
    AA. Predecessor Plans shall collectively mean the
    Corporation’s 1994 Amended and Restated Stock Option Plan
    and the Special Stock Option Plan, as in effect immediately
    prior to the Plan Effective Date hereunder.
	 
	 	     
    BB. Primary Committee shall mean the committee of
    two (2) or more Eligible Directors appointed by the Board
    to administer the Discretionary Grant and Stock Issuance
    Programs with respect to Section 16 Insiders.
	 
	 	     
    CC. Secondary Committee shall mean a committee of
    two or more Board members appointed by the Board to administer
    the Discretionary Grant and Stock Issuance Programs with respect
    to one or more classes of eligible persons other than
    Section 16 Insiders.
	 
	 	     
    DD. Section 16 Insider shall mean an officer or
    director of the Corporation subject to the short-swing profit
    liability provisions of Section 16 of the 1934 Act.
	 
	 	     
    EE. Service shall mean the performance of services
    for the Corporation (or any Parent or Subsidiary) by a person in
    the capacity of an Employee, an Eligible Director or a
    consultant or independent advisor, except to the extent
    otherwise specifically provided in the documents evidencing the
    Award made to such person. For purposes of the Plan, an Optionee
    or Participant shall be deemed to cease Service immediately upon
    the occurrence of the either of the following events:
    (i) the Optionee or Participant no longer performs services
    in any of the foregoing capacities for the Corporation or any
    Parent or Subsidiary or (ii) the entity for which the
    Optionee or Participant is performing such services ceases to
    remain a Parent or Subsidiary of the Corporation, even though
    the Optionee or Participant may subsequently continue to perform
    services for that entity.
	 
	 	     
    FF. Stock Exchange shall mean either the American
    Stock Exchange or the New York Stock Exchange.
	 
	 	     
    GG. Stock Issuance Agreement shall mean the
    agreement entered into by the Corporation and the Participant at
    the time of issuance of shares of Common Stock under the Stock
    Issuance Program.
	 
	 	     
    HH. Stock Issuance Program shall mean the stock
    issuance program in effect under Article Three of the Plan.
	 
	 	     
    II. Subsidiary shall mean any corporation (other
    than the Corporation) in an unbroken chain of corporations
    beginning with the Corporation, provided each corporation (other
    than the last corporation) in the unbroken chain owns, at the
    time of the determination, stock possessing fifty percent (50%)
    or more of the total combined voting power of all classes of
    stock in one of the other corporations in such chain.



21







 






		
	 	     
    JJ. Take-Over Price shall mean the greater
    of (i) the Fair Market Value per share of Common
    Stock on the date the option is surrendered to the Corporation
    in connection with a Hostile Take-Over or, if applicable,
    (ii) the highest reported price per share of Common Stock
    paid by the tender offeror in effecting such Hostile Take-Over
    through the acquisition of such Common Stock. However, if the
    surrendered option is an Incentive Option, the Take-Over Price
    shall not exceed the clause (i) price per share.
	 
	 	     
    KK. 10% Shareholder shall mean the owner of stock
    (as determined under Code Section 424(d)) possessing more
    than ten percent (10%) of the total combined voting power of all
    classes of stock of the Corporation (or any Parent or
    Subsidiary).
	 
	 	     
    LL. Withholding Taxes shall mean the federal, state
    and local income and employment taxes to which the Optionee or
    Participant may become subject in connection with the issuance,
    exercise or vesting of the Award made to him or her under the
    Plan.



22