Document:

exhibit10-2.htm

    
      
        

      

      

      Exhibit
10.2

       

      

       

      

       

      

       

      

       

      

       

      

       

      FIRST
AMENDED AND RESTATED

      2008
EQUITY INCENTIVE PLAN

      FOR
NON-EMPLOYEE DIRECTORS

      OF

      ICO,
INC.

       

      

       

      

       

      

       

      

       

      

       

      

       

      

       

      

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      FIRST
AMENDED AND RESTATED

      2008
EQUITY INCENTIVE PLAN

      FOR
NON-EMPLOYEE DIRECTORS

      OF

      ICO,
INC.

      

      [Amending
and Restating the 2008 Equity Incentive Plan for Non-Employee Directors of ICO,
Inc.]

      

       

      This 2008
Equity Incentive Plan for Non-employee Directors of ICO, Inc. has been adopted
by the Board of Directors of the Company, effective on January 23, 2008, subject
to approval by the stockholders of the Company no later than twelve months
thereafter.

       

      ARTICLE
I

       

      Purpose

       

      The
purpose of this Plan is to advance the interests of the Company, by providing an
additional incentive to attract and retain qualified and competent Directors,
upon whose efforts and judgment the success of the Company is largely dependent,
through the encouragement of stock ownership in the Company by such
persons.

       

      ARTICLE
II

       

      Definitions

       

      2.1           Definitions. For purposes of this
Plan the following capitalized terms shall have the definition that is
attributed to them, unless another definition is clearly indicated by a
particular usage and context:

       

      
        	
                 
      

              	
                (a)

              	
                “Affiliate”
      shall mean, except to the extent otherwise not permitted under Code
      Section 424(f), any one or more corporations which are members of a
      “parent-subsidiary controlled group” as such term is defined in Code
      Section 1563(a)(1), except that “at least 50 percent” shall be substituted
      for “at least 80 percent” each place it appears in Code Section
      1563(a)(1).

              

      

       

      
        	
                 
      

              	
                (b)

              	
                “Award”
      shall mean any form of award authorized and granted under this Plan,
      whether singly or in combination, pursuant to the terms, conditions,
      restrictions and/or limitations (if any) the Committee may
      establish.  Awards granted under this Plan may
      include:

              

      

       

      
        	
                 
      

              	
                (i)

              	
                Options;
      and

              

      

       

      
        	
                 
      

              	
                (ii)

              	
                Restricted
      Shares.

              

      

       

      
        	
                 
      

              	
                (c)

              	
                “Award
      Agreement” shall mean an agreement between an Eligible Person and the
      Company evidencing an Award including, without limitation, an Option
      Agreement and/or a Restricted Stock
Agreement.

              

      

       

      
        	
                 
      

              	
                (d)

              	
                “Board”
      shall mean the Board of Directors of the
  Company.

              

      

       

      
        	
                 
      

              	
                (e)

              	
                ”Change
      of Control” shall have the meaning ascribed to it in Section
      9.3.

              

      

       

      
        	
                 
      

              	
                (f)

              	
                “Code”
      shall mean the Internal Revenue Code of 1986, as
  amended.

              

      

       

      
        	
                 
      

              	
                (g)

              	
                “Committee”
      shall mean the Board.

              

      

       

      
        	
                 
      

              	
                (h)

              	
                “Company”
      shall mean ICO, Inc.

              

      

       

      
        	
                 
      

              	
                (i)

              	
                “Date
      of Grant” shall mean the date when a grant of an Award is effective,
      which, unless otherwise provided in this Plan, shall be designated by the
      Committee at the time it makes an

              

      

       

      
        
           
- 1 -

        

        
           

          
            

          

        

        
           

        

      

      Award,
and shall be either the date when the Award is made or a date in the future
specified by the Committee.

       

      
        	
                 
      

              	
                (j)

              	
                “Director”
      shall mean a member of the Board.

              

      

       

      
        	
                 
      

              	
                (k)

              	
                “Eligible
      Person(s)” shall mean those persons who are Directors of the Company and
      who are not employees or officers of the Company or a
      Subsidiary.

              

      

       

      
        	
                 
      

              	
                (l)

              	
                “Fair
      Market Value” of a Share on a specified date shall mean the last sale
      price reported on the NASDAQ Global MarketTM (“NASDAQ”) on the specified
      date, or if Shares are no longer traded on the NASDAQ, the last sales
      price of the Shares reported on any other stock exchange or
      over-the-counter trading system on which the Shares are trading on the
      specified date.   If no sale has been made on a specified
      date, then the Fair Market Value of the Shares shall be the last sales
      price on the last preceding date on which any sales of Shares were made on
      the NASDAQ or other applicable stock exchange or over-the-counter trading
      system.

              

      

       

      
        	
                 
      

              	
                (m)

              	
                “Minimum
      Restricted Period” shall have the meaning ascribed to it in Section
      7.3.

              

      

       

      
        	
                 
      

              	
                (n)

              	
                “Nonqualified
      Stock Option” shall mean an Option granted under this Plan that is not an
      incentive stock option as defined in Section 422A of the
    Code.

              

      

       

      
        	
                 
      

              	
                (o)

              	
                “Option”
      shall mean the right to purchase a stated number of Shares at a specified
      price.  An Option may be granted to an Eligible Person subject
      to the terms of this Plan, and such other conditions and restrictions as
      the Committee deems appropriate.

              

      

       

      
        	
                 
      

              	
                (p)

              	
                “Option
      Expiration Date” shall mean the last day of the term of an Option, i.e.
      the last date when an Option may be
exercised.

              

      

       

      
        	
                 
      

              	
                (q)

              	
                “Option
      Price” shall mean the purchase price per Share subject to an Option and,
      unless otherwise provided in this Plan, shall be fixed by the Committee,
      but shall not be less than 100% of the Fair Market Value of a Share on the
      Date of Grant.

              

      

       

      
        	
                 
      

              	
                (r)

              	
                “Optionee”
      shall mean a person to whom an Option is granted under this Plan or any
      successor to the rights of such person under this Plan by reason of the
      death of such person.

              

      

       

      
        	
                 
      

              	
                (s)

              	
                “Performance
      Measures” shall have the
      meaning ascribed to it in Section
3.3.

              

      

       

      
        	
                 
      

              	
                (t)

              	
                “Performance
      Period” shall have the meaning ascribed to it in Section
    3.3.

              

      

       

      
        	
                 
      

              	
                (u)

              	
                “Permanent
      Disability” shall mean any medically determinable physical or mental
      impairment rendering an individual unable to engage in any substantial
      gainful activity, which disability can be expected to result in death or
      which has lasted or can be expected to last for a continuous period of not
      less than twelve months.

              

      

       

      
        	
                 
      

              	
                (v)

              	
                “Plan”
      shall mean this 2008 Equity Incentive Plan for Non-employee Directors of
      ICO, Inc., which is a restatement of the previously adopted Fourth Amended
      and Restated 1993 Stock Option Plan for Non-employee Directors of ICO,
      Inc.

              

      

       

      
        	
                 
      

              	
                (w)

              	
                “Restricted
      Period” shall
      have the meaning ascribed to it in Section
7.1.

              

      

       

      
        	
                 
      

              	
                (x)

              	
                “Restricted
      Shares” shall have the meaning ascribed to it in Section
    7.1.

              

      

       

      
        	
                 
      

              	
                (y)

              	
                “Rule
      16b-3” shall mean Rule 16b-3 promulgated under the Securities and Exchange
      Act of 1934, as amended.

              

      

       

      
        	
                 
      

              	
                (z)

              	
                “Share(s)”
      shall mean a share or shares of the common stock, no par value, of the
      Company.

              

      

       

      
        
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2 -  

        

        
           

          
            

          

        

        
           

        

      

      
        	
                 
      

              	
                (aa)

              	
                “Subsidiary”
      shall mean any corporation (other than the Company) in any unbroken chain
      of corporations beginning with the Company if, at the time of the granting
      of the Award, each of the corporations other than the last corporation in
      the unbroken chain owns stock possessing more than 50 percent of the total
      combined voting power of all classes of stock in one of the other
      corporations in such chain.

              

      

       

      
        	
                 
      

              	
                (bb)

              	
                “Termination
      of Service” shall mean the cessation of the Eligible Person’s relationship
      with the Company as a director.

              

      

       

      
        	
                 
      

              	
                (cc)

              	
                “Vesting
      Period” shall mean the continuous period of service on the Board required
      for an Award of Options or Restricted Shares to become fully
      earned.

              

      

       

      ARTICLE
III

       

      Administration

       

      
        	
                3.1

              	
                Administration.  The
      Plan shall be administered by the Committee.  Actions shall be
      taken by a majority of the Committee
members.

              

      

       

      
        	
                3.2

              	
                Interpretation.  Except
      as specifically limited by the provisions of this Plan, the Committee in
      its discretion shall have the authority to interpret the provisions of
      this Plan and decide all questions of fact arising in its
      application.

              

      

      

      
        	
                3.3

              	
                Awards Contingent on
      Performance.  The Committee may grant Awards contingent
      upon the achievement of performance or other objectives (“Performance
      Measures”) during a specified period (“Performance
      Period”).  Except as specifically limited by the provisions of
      this Plan, the Committee in its discretion shall have the authority to
      determine the Performance Period and Performance Measures, if any,
      applicable to an Award, and the Performance Period and Performance
      Measures shall be set forth in the Award Agreement.  If an Award
      is subject to Performance Measures, the number of Options that vest, or
      the number of Restricted Shares earned will be contingent on the degree to
      which the Performance Measures established at the time of the initial
      Award are satisfied or achieved, in the sole discretion of the
      Committee.  The Committee shall have the sole discretion to
      revise the Performance Measures or Performance Period to reflect
      significant events or changes that occurred during the Performance
      Period.

              

      

       

      
        	
                3.4

              	
                Final and Binding
      Decisions.  Any action, decision, interpretation or
      determination by the Committee with respect to the application or
      administration of this Plan shall be final and binding upon all persons,
      and need not be uniform with respect to its determination of recipients,
      amount, timing, form, terms or provisions of
  Awards.

              

      

       

      
        	
                3.5

              	
                Limitation of Liability;
      Indemnification.  No member of the Committee shall be
      liable for any action or determination taken or made in good faith with
      respect to this Plan or any Award granted hereunder, and to the extent
      permitted by law, all members shall be indemnified by the Company for any
      liability and expenses that may occur through any claim or cause of
      action.

              

      

       

      ARTICLE
IV

       

      Shares Subject to
Plan

       

      The
maximum number of Shares that may be made subject to Awards granted under this
Plan shall not exceed FIVE HUNDRED AND SIXTY THOUSAND (560,000) Shares, such
number having been adjusted for all previous stock splits, from Shares held in
the Company’s treasury or from authorized and unissued Shares.  To the
extent permitted under Rule 16b-3, upon lapse or termination of any Award for
any reason without being completely exercised, the Shares that were subject to
such Award may again be subject to other Awards.  The maximum number
of shares which may be subject to Awards granted under this Plan is subject to
adjustment as provided in Article IX hereof with respect to the Shares subject
to Awards then outstanding.  Exercise of an Award granted under this
Plan in any manner shall result in a decrease in the number of Shares which may
thereafter be available, both for purposes of this Plan and for sale to any one
individual, by the number of Shares as to which the Award is exercised. Separate
stock certificates may be, but are not required to be, issued by the Company for
those Shares acquired pursuant to the exercise of a Nonqualified Stock Option or
upon the satisfaction of the applicable Vesting Period

       

      
        
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      and/or
Performance Measures under an Award of Restricted Shares. Any Option granted
hereunder shall be a Nonqualified Stock Option.

       

      ARTICLE
V

       

      Award
Agreements

       

      
        	
                5.1

              	
                Award
      Agreements.  All Awards granted under this Plan shall be
      evidenced by a written Award Agreement in such form or forms as the
      Committee in its sole discretion may
determine.

              

      

       

      
        	
                5.2

              	
                Consent of Eligible
      Person. Each Eligible Person, by acceptance of an Award under this
      Plan, shall be deemed to have consented to be bound, on the Eligible
      Person’s own behalf and on the behalf of the Eligible Person’s heirs,
      assigns and legal representatives, by all terms and conditions of this
      Plan, as amended from time to time.

              

      

       

      ARTICLE
VI

       

      Stock Option
Awards

       

      
        	
                6.1

              	
                Option Expiration
      Dates.  Subject to the provisions regarding Termination
      of Awards in Article VIII herein, each Option shall be for a term of from
      one to ten years from the Date of Grant.  In the event that the
      Option Expiration Date is not specified in the Option Award Agreement, it
      shall be ten years from the Date of
Grant.

              

      

       

      
        	
                6.2

              	
                Revisions to Option
      Awards.  The Committee, subject to the Eligible Person’s
      approval, on or after the Date of Grant, may establish different exercise
      schedules and impose other conditions upon exercise and vesting for any
      particular Option or groups of
Options.

              

      

       

      
        	
                6.3

              	
                Option
      Price.  The Option Price per Share of any grant of
      Options under this Plan shall be not less than 100% of the Fair Market
      Value per Share on the Date of
Grant.

              

      

       

      
        	
                6.4

              	
                Exercise of
      Options.  Any person entitled to exercise an Option in
      whole or in part may do so by delivering written notice of exercise to the
      Company, attention Corporate Secretary, at its principal
      office.  The written notice shall specify the number of Shares
      for which an Option is being exercised and the Date of Grant of the Option
      being exercised, and shall be accompanied by full payment of the Option
      Price for the Shares being
purchased.

              

      

       

      6.5           Payment of Option
Price

       

      
        	
                 
      

              	
                (a)

              	
                Payment
      of Option Price may be made in cash, by wire transfer, by broker-assisted
      cashless exercise (in accordance with the Company’s current procedures for
      broker-assisted cashless exercise), by the tender of Shares, or any
      combination thereof, or in such other form as may be determined by the
      Committee.  Shares tendered for payment of the Option Price
      shall be valued at their Fair Market Value on the Date of
      Exercise.

              

      

       

      
        	
                 
      

              	
                (b)

              	
                Payment
      through tender of Shares may be made by instruction from the Eligible
      Person to the Company to withhold from the Shares issuable upon exercise
      that number which have a Fair Market Value equal to the exercise price for
      the Option or the portion thereof being
  exercised.

              

      

       

      ARTICLE
VII

       

      Restricted Share
Awards

       

      

      
        	
                7.1

              	
                Certain
      Definitions.  “Restricted Shares” are Awards consisting
      of grants of Shares to Eligible Persons, the vesting of which are subject
      to a Vesting Period and/or Performance Measures established by the
      Committee.  The period when any Restricted Shares have not yet
      been earned because the Vesting Period and/or Performance Measures have
      not been satisfied is referred to herein as the “Restricted
      Period.”

              

      

       

      
        
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                7.2

              	
                Awards of Restricted
      Shares.  The Committee shall designate the Eligible
      Persons to whom Restricted Shares are to be awarded and the number of
      Shares that are subject to the Award.  Restricted Shares may be
      granted to the same Eligible Person on more than one
      occasion.  Restricted Shares may be granted under this Section
      7.2 even if the Eligible Person receives a grant of Options under Article
      VI hereof.

              

      

       

      
        	
                7.3

              	
                Terms and
      Conditions.  Grants of Restricted Shares awarded to
      Eligible Persons under this Plan shall be subject to the following terms
      and conditions and to such other terms and conditions, not inconsistent
      with this Plan, as shall be prescribed by the Committee in its sole
      discretion and as shall be contained in the Restricted Share
      Agreement:

              

      

       

      
        	
                 
      

              	
                (a)

              	
                Restricted
      Shares awarded to Eligible Persons may not be sold, assigned, transferred,
      pledged or otherwise encumbered, except as provided otherwise herein,
      during the Restricted Period applicable to each
  Award.

              

      

       

      
        	
                 
      

              	
                (b)

              	
                The
      Restricted Period of Restricted Shares granted under this Plan shall be
      ten years or such shorter period as the Committee may determine at the
      time of the Award of such Restricted Shares.  Under no
      circumstances shall the Restricted Period be less than six months
      (“Minimum Restricted Period”); provided, however, that the vesting of any
      Restricted Shares may be accelerated to occur prior to the end of the
      Minimum Restricted Period pursuant to the provisions of Sections 8.2 or
      9.3 below.

              

      

       

      
        	
                 
      

              	
                (c)

              	
                Except
      for the restrictions described in the preceding paragraph, and as
      otherwise provided in a Restricted Share Agreement, during the Restricted
      Period the Eligible Person as holder of such Restricted Shares shall have
      all the rights of a stockholder, including but not limited
    to:

              

      

       

      
        	
                 
      

              	
                (i)

              	
                the
      right to vote such Restricted Shares,
and

              

      

       

      
        	
                 
      

              	
                (ii)

              	
                the
      right to receive all dividends paid on such Restricted
    Shares.

              

      

       

      
        	
                 
      

              	
                (d)

              	
                The
      Committee may, subject to the Eligible Person’s approval, at any time
      after the date of an Award of Restricted Shares, adjust the length of any
      applicable Vesting Period or Performance Period to account for individual
      circumstances of an Eligible Person or group of Eligible
      Persons.

              

      

       

      
        	
                 
      

              	
                (e)

              	
                Each
      certificate issued or book entry made in respect of Restricted Shares
      awarded under this Plan shall be registered in the name of the Eligible
      Person and, at the discretion of the Committee, until the conclusion of
      the Restricted Period each such certificate may be deposited in a bank or
      alternative location designated by the Committee.  Each such
      certificate shall bear the following (or a similar)
  legend:

              

      

       

      “The
transferability of this certificate and the shares of stock represented hereby
are subject to the terms and conditions (including forfeiture) contained in the
2008 Equity Incentive Plan for Non-employee Directors of ICO, Inc. [as amended
from time to time] and an agreement entered into between the registered
stockholder and ICO, Inc.  A copy of such plan and agreement is on
file in the office of the Secretary of ICO, Inc., 1811 Bering Drive, Suite 200,
Houston, Texas 77057 [or current ICO, Inc. address].”

       

      
        	
                 
      

              	
                (f)

              	
                At
      the end of the Vesting Period applicable to a Restricted Share Award (that
      is not subject to Performance Measures), certificates issued in respect to
      such Restricted Shares will be transferred free of all restrictions to the
      Eligible Person (or the Eligible Person’s successors) and all restrictions
      will be removed from an Eligible Person’s (or the Eligible Person’s
      successors) book entry(ies) representing such Restricted Shares, as
      applicable. At the end of the Performance Period applicable to a
      Restricted Share Award, the Committee shall determine the number of
      Restricted Shares that have been earned in accordance with the provisions
      of Section 3.3 above; provided that the Vesting Period, if any, has been
      satisfied, certificates issued in respect to such Restricted Shares will
      be transferred free of all restrictions to the Eligible Person (or the
      Eligible Person’s successors) and all restrictions will be removed from an
      Eligible Person’s (or the Eligible Person’s successors) book entry(ies)
      representing such Restricted Shares, as applicable; and any
      Restricted

              

      

       

      
        
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5 -  

        

        
           

          
            

          

        

        
           

        

      

      Shares
that are not earned because of failure to satisfy applicable Performance
Measures shall be forfeited.

       

      ARTICLE
VIII

       

      Termination of
Awards

       

      
        	
                8.1

              	
                Termination During Service as
      a Director.  During an Eligible Person’s period of
      continuous service as a director of the Company, an Award of Options or
      Restricted Shares will be terminated only if it (a) has been fully
      exercised or earned, (b) has not vested due to a failure to satisfy any
      Performance Measures or other terms of grant or (c) has expired or been
      forfeited by its terms.

              

      

       

      
        	
                8.2

              	
                Termination of
      Service.

              

      

       

      
        	
                 
      

              	
                (a)

              	
                Options.

              

      

       

      (1)           Unless
an Option Award Agreement provides otherwise, upon Termination of Service for
any reason, the then exercisable portion of any Option will terminate upon the
earlier of (i) the first business day following expiration of the three month
period after the date of Termination of Service or (ii) the Option Expiration
Date set forth in the Award Agreement pursuant to which the award was
granted.  The portion of any Option Award not exercisable will
terminate on the date of Termination of Service.

       

      (2)           Notwithstanding
the preceding paragraph, if an Eligible Person holding an Option dies or becomes
subject to Permanent Disability while serving as a director of the Company or
within three months after Termination of Service, such Option may be exercised
to the extent exercisable on the date of the occurrence of the event which
triggers the operation of this paragraph, at any time by the estate or guardian
of such person or by those persons to whom the Option may have been transferred
by will or by the laws of decent and distribution until the earlier of (i) the
date which is one year after the date of such death or occurrence of Permanent
Disability or (ii) the Option Expiration Date set forth in the Award
Agreement.

       

      (3)           The
Committee may at any time prior to the three months after the date of
Termination of Service provide that particular Options not be affected by such
termination and continue in force whether or not exercisable at the date of such
Termination of Service until the Option Expiration Date set forth in the Award
Agreement or any date prior thereto.

       

      (4)           Except
as provided in Article IX hereof, in no event will the continuation of the term
of an Option beyond the date of Termination of Service allow the Eligible
Person, or the Eligible Person’s beneficiaries or heirs, to accrue additional
rights under this Plan, or to purchase more Shares through the exercise of an
Option that could have been purchased on the date of Termination of
Service.  Notwithstanding anything contained herein, no Option may be
exercised in any event after the expiration of ten years from the Date of Grant
of such Option.

       

      
        	
                 
      

              	
                (b)

              	
                Restricted
      Shares.  Except as otherwise determined by the Committee
      in its sole discretion, or as otherwise permitted herein, an Eligible
      Person who ceases to be a Director of the Company prior to the end of the
      Vesting Period applicable to a Restricted Share Award for any reason shall
      forfeit all Restricted Shares remaining subject to such outstanding
      Restricted Share Award.

              

      

       

      
        	
                 
      

              	
                (c)

              	
                Termination due to
      Death or Permanent Disability – Awards Subject to Performance
      Measures.  In the event that an Eligible Person who holds
      Options or Restricted Shares conditioned upon Performance Measures ceases
      to be a Director because of death or because the Eligible Person becomes
      subject to a Permanent Disability, and the Performance Period has not
      ended at the time of such termination due to death or Permanent
      Disability, the Committee shall have sole discretion to determine whether
      all or any portion of the Award that is subject to Performance Measures
      will be deemed earned.

              

      

       

      
        
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6 -  

        

        
           

          
            

          

        

        
           

        

      

      ARTICLE
IX

       

      Adjustments to Awards due to
Changed Circumstances

       

      
        	
                9.1

              	
                Recapitalizations.  In
      the event of changes in the issued and outstanding Shares of the Company
      as a result of stock dividends, split-ups, recapitalizations, combinations
      of Shares, exchanges of Shares or related transactions, (a) the maximum
      number of Shares subject to Award under this Plan as provided in Article
      IV hereof shall be adjusted accordingly so that the same proportion of the
      Company’s issued and outstanding Shares shall continue to be subject to
      being so awarded and (b) the number and class of Shares and price per
      Share for each outstanding Award of Options or Restricted Shares shall be
      correspondingly adjusted by the
Committee.

              

      

       

      
        	
                9.2

              	
                Distributions to Shareholders
      and Other Adjustments.  The Committee shall make
      appropriate adjustments in the Option Price of any outstanding Award of
      Options to reflect any spin-off of assets, extraordinary dividends or
      other distributions to
shareholders.

              

      

       

      
        	
                9.3

              	
                Change of
      Control.  In event that the Company shall, pursuant to
      action by its Board, at any time propose to merge into, consolidate with,
      or sell or transfer substantially all of its assets, or otherwise enter in
      to a transaction pursuant to which the Company is not the surviving
      corporation (other than a corporate restructuring among Company
      Affiliates), or in which the outstanding Shares of the Company are
      converted to cash, other securities or other property (any such
      circumstances referred to herein as a “Change of Control”) and provision
      is not made pursuant to the terms of the transaction(s) relating to such
      Change of Control (the “Transaction”) for the assumption by the surviving,
      resulting or acquiring corporation of any outstanding category of Awards
      under this Plan, or for the substitution of new Awards therefor, with
      regard for Awards for which no provision is made the following shall
      apply:

              

      

       

      
        	
                 
      

              	
                (a)

              	
                Options. The
      Committee shall cause written notice of the proposed Transaction to be
      given to each Option holder not more than twenty days prior to the
      anticipated effective date of the proposed Transaction, and the holder’s
      Option, unless otherwise provided for under the terms of the applicable
      Award Agreement, shall become fully (100%) vested and, prior to a date
      specified in such notice, which shall not be more than ten days prior to
      the anticipated effective date of the proposed Transaction, each Option
      holder shall have the right to exercise his or her Option to purchase any
      or all Shares then subject to such Option (unless otherwise provided under
      the terms of the applicable Award Agreement), including those, if any,
      which by reason of other provisions of this Plan have not then become
      available for purchase. Each Option holder, by so notifying the Company in
      writing, may, in exercising his or her Option, condition such exercise
      upon, and provide that such exercise shall become effective at the time
      of, but immediately prior to, the consummation of the proposed
      Transaction, in which event such Option holder need not make payment for
      the Shares to be purchased upon exercise of such Option until five days
      after written notice by the Company to such Option holder that the
      proposed Transaction has been consummated. If the proposed Transaction is
      consummated, each Option, to the extent not previously exercised prior to
      the date specified in the foregoing notice, shall terminate on the
      effective date of the proposed Transaction. If the proposed Transaction is
      abandoned, (i) any Shares not purchased upon exercise of such Option shall
      continue to be available for purchase in accordance with the other
      provisions of this Plan and (ii) to the extent that any Option not
      exercised prior to such abandonment shall have vested solely by operation
      of this paragraph, such vesting shall be deemed annulled, and the original
      vesting schedule set forth shall be reinstituted, as of the date of such
      abandonment.

              

      

       

      
        	
                 
      

              	
                (b)

              	
                Restricted
      Shares. The Committee shall cause written notice of the proposed
      Transaction to be given to each holder of Restricted Shares not more than
      twenty days prior to the anticipated effective date of the proposed
      Transaction, and unless provided for under the terms of the applicable
      Award Agreement, all restrictions imposed on Restricted Shares shall lapse
      and such Restricted Shares shall become fully (100%) vested as of a date
      specified in the notice, which shall not be more than ten days prior to
      the anticipated effective date of the proposed
  Transaction.

              

      

       

      
        	
                9.4

              	
                No Adjustment in Certain
      Circumstances.  Except as otherwise expressly provided
      herein, the issuance by the Company of Shares of its capital stock of any
      class, or securities convertible into Shares of capital stock of any
      class, either in connection with a direct sale or upon the exercise of
      rights or warrants to subscribe

              

      

       

      
        
          -
7 -  

        

        
           

          
            

          

        

        
           

        

      

      
        	
                 
      

              	
                therefor,
      or upon conversion of Shares or obligations of the Company convertible
      into such Shares or other securities, shall not affect, and no adjustment
      by reason thereof shall be made with respect to, the number of Shares
      and/or the Option Price of Shares then subject to outstanding Awards
      granted under this Plan.

              

      

       

      
        	
                9.5

              	
                No Limitation on Corporate
      Actions.  Without limiting the generality of anything
      contained in this Article IX, the existence of outstanding Awards granted
      under this Plan shall not affect in any manner the right or power of the
      Company to make, authorize or consummate (a) any or all adjustments,
      recapitalizations,  reorganizations or other changes in the
      Company’s capital structure or its business; (b) any merger or
      consolidation of the Company; (c) any issue by the Company of debt
      securities, or preferred or preference stock which would rank above the
      Shares subject to outstanding Awards; (d) the dissolution or liquidation
      of the Company; (e) any sale, transfer or assignment of all or any part of
      the assets or business of the Company; or (f) any other corporate act or
      proceeding, whether of a similar character or
  otherwise.

              

      

       

      ARTICLE
X

       

      Transferability of
Awards

       

      
        	
                10.1

              	
                Transferability of
      Awards.  During the lifetime of an Eligible Person to
      whom an Award of Options or Restricted Shares has been granted, such
      Options or Restricted Shares are not transferable voluntarily or by
      operation of law, and may be exercised only by the designated Eligible
      Person.  Upon the death of an Eligible Person to whom an Award
      of Options or Restricted Shares has been granted and is outstanding, the
      Options or Restricted Shares may be transferred to the beneficiaries or
      heirs of the deceased Eligible Person by will or by the laws of descent
      and distribution.  Notwithstanding the foregoing limitations,
      the Committee, in its sole discretion, may allow for the transferability
      of any Option or Restricted Share Award granted pursuant to this
      Plan.

              

      

       

      
        	
                10.2

              	
                Issuance of
      Shares.  No person shall be, or have any of the rights or
      privileges of, a shareholder of the Company with respect to any of the
      Shares subject to an Option, unless and until certificates representing
      such Shares shall have been issued and delivered to such
      person.  As a condition of any transfer of the certificate for
      Shares, the Committee may obtain such agreements or undertakings, if any,
      as it may deem necessary or advisable to assure compliance with any
      provision of this Plan, any Award Agreement or any law or regulation
      including, but not limited to, the
following:

              

      

       

      
        	
                 
      

              	
                (a)

              	
                a
      representation, warranty or agreement by the Optionee to the Company, at
      the time any Option is exercised, that he or she is acquiring the Shares
      to be issued to him or her for investment and not with a view to, or for
      sale in connection with, the distribution of any such Shares;
      and

              

      

       

      
        	
                 
      

              	
                (b)

              	
                a
      representation, warranty or agreement to be bound by any legends that are,
      in the opinion of the Committee, necessary or appropriate to comply with
      the provisions of any securities law deemed by the Committee to be
      applicable to the issuance of the Shares and are endorsed upon the Share
      certificates.

              

      

       

      Share
certificates issued to an Eligible Person who is a party to any shareholders
agreement or a similar agreement shall bear the legends contained in such
agreements.

       

      ARTICLE
XI

       

      Amendment or Discontinuance
of Plan

       

      The Board
of Directors may amend, modify, suspend or terminate this Plan for the purpose
of meeting or addressing any changes in legal requirements or for any other
purpose permitted by law.  Subject to changes in law or other legal
requirements, including any change in the provisions of Rule 16b-3 and Section
162(m) of the Code that would permit otherwise, this Plan may not be amended
without the consent of the holders of a majority of the Shares of stock
represented at a meeting of Shareholders for which a quorum is present, to (i)
increase the aggregate number of Shares of stock that may be issued under this
Plan (except for adjustments pursuant to Article VIII of this Plan), (ii)
increase materially the benefit accruing to holders of Awards under this Plan,
or (iii) modify materially the requirements as to eligibility for participation
in this Plan.

       

       

      
        
          -
8 -

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      ARTICLE
XII

       

      Miscellaneous

       

      
        	
                12.1

              	
                Retention as
      Director.  Neither this Plan nor any Award granted under
      this Plan shall confer upon any person any right to continue to serve as a
      Director.

              

      

       

      
        	
                12.2

              	
                Interpretation; Governing
      Law

              

      

       

      
        	
                 
      

              	
                (a)

              	
                If
      any provision of this Plan is held to be invalid for any reason, such
      holding shall not affect the remaining provisions hereof, but instead this
      Plan shall be construed and enforced as if such provision had never been
      included in this Plan.

              

      

       

      
        	
                 
      

              	
                (b)

              	
                This
      Plan shall be governed by the laws of the State of
  Texas.

              

      

       

      
        	
                 
      

              	
                (c)

              	
                Headings
      contained in this Plan are for convenience only and shall in no manner be
      construed as part of this Plan.

              

      

       

      
        	
                12.3

              	
                Section 83(b)
      Election.  If an Eligible Person receives Shares under
      this Plan that are subject to a “substantial risk of forfeiture” and are
      not “transferable” as those terms are defined for purposes of Section
      83(a) of the Code, then such Eligible Person may elect under Section 83(b)
      of the Code to include in his gross income, for his taxable year in which
      the Shares are transferred to him, the excess of the Fair Market Value of
      such Shares at the time of transfer (determined without regard to any
      restriction other than one which by its terms will never lapse), over the
      amount paid for the Shares.  If the Eligible Person makes the
      Section 83(b) election described above, the Eligible Person shall (i) make
      such election in a manner that is satisfactory to the Committee, (ii)
      provide the Company with a copy of such election, (iii) agree to promptly
      notify the Company if any Internal Revenue Service or state tax agent, on
      audit or otherwise, questions the validity or correctness of such election
      or of the amount of income reportable on account of such election, and
      (iv) agree to such withholding as the Committee may reasonably require in
      its sole and absolute discretion.

              

      

       

      
        	
                12.4

              	
                Effective Date and Termination
      Date; Adoption of Plan.  The effective date of this Plan
      is the 13th day of April, 1993, the date on which the Board originally
      adopted this Plan.  The shareholders of the Company approved
      this Plan on June 15, 1993.  This Plan was subsequently amended
      and restated by the Board on August 29, 1996, which amendment and
      restatement was approved by the Shareholders on October 7,
      1996.  In connection with the corporate restructuring effected
      on April 1, 1998, pursuant to a Plan of Merger of ICO Merger Sub, Inc.
      with and into ICO, Inc., the Company (which prior to such merger was named
      “ICO Holdings, Inc.”) adopted this Plan and assumed the obligations under
      this Plan from the entity previously named “ICO, Inc.” (which after such
      merger was renamed “ICO P&O, Inc.”).  This Plan was again
      amended and restated by the Board on January 8, 1999.  This Plan
      was again amended and restated by the Board on December 18, 2001, which
      amendment and restatement was approved by the Shareholders on March 15,
      2002.  This Plan was again amended and restated by the Board on
      November 18, 2005, which amendment and restatement was approved by the
      Shareholders on March 14, 2006.  This Plan was again amended and
      restated by the Board on January 23, 2008, which amendment and restatement
      was approved by the shareholders on March 11, 2008.  This Plan
      was again amended and restated by the Board on December 8, 2008, which
      amendment and restatement was approved by the shareholders on [March 9,
      2009]. No further Awards may be granted under this Plan after January 23,
      2018, subject to early termination by the Board pursuant to Article XI of
      this Plan.  This Plan shall remain in effect until all Awards
      granted under this Plan have been fully earned, exercised or have
      expired.

              

      

       

      
        	
                12.5

              	
                Government
      Regulations.  This Plan, and the granting and exercise of
      Awards thereunder, and the obligation of the Company to sell and deliver
      Shares under such Awards, shall be subject to all applicable laws, rules
      and regulations, and to such approvals by any governmental agencies or
      national securities exchanges as may be
  required.

              

      

       

      

       
- 9 -ex10_3.htm

    
      EXHIBIT
10.3

      ADOBE
SYSTEMS INCORPORATED

      1994
PERFORMANCE AND RESTRICTED STOCK PLAN

      

      RESTRICTED
STOCK AWARD GRANT AGREEMENT

      

      Adobe Systems Incorporated (the
“Company”) has granted _______________________ (the “Participant”), as of
___________ ___, 2009 (the “Grant Date”), an award of Restricted Stock (the
“Award”) as described in this Restricted Stock Award Grant Agreement (the
“Agreement”) pursuant to the Company’s 1994 Performance and Restricted Stock
Plan (the “Plan”).  Capitalized terms not defined in this Agreement
shall have the meaning set forth in the Plan and, if applicable, the Superseding
Agreement.

      

      IT IS AGREED between the parties as
follows:

      

      1.           Issuance of
Shares.  Effective as of the Grant Date, the Company shall
issue the Participant _______________ shares of the Company’s common stock (the
“Stock”) in consideration for the Participant’s service with the
Company.  In the event additional consideration is required by law so
that the Stock acquired under this Agreement is deemed fully paid and
nonassessable, the Board shall determine the amount and character of such
additional consideration to be paid and the Participant shall deliver it
promptly to the Company.  The Company will direct the transfer agent
for the Company to deliver to Escrow Agent (as defined in Section 6 below) the
certificate or certificates evidencing the shares of Stock being acquired by the
Participant.  Any such shares may be held in book entry form directly
registered with the transfer agent or in such other form as the Company may
determine.

      

      2.           Vesting and Reacquisition
Right.

      

      (a)           Vesting.

      

      (i) Vesting Schedule. The
Award shall be subject to vesting in accordance with the Vesting Schedule set
forth on Exhibit A
hereto, except as otherwise set forth herein.  Shares of Stock that
have vested in accordance with the Vesting Schedule, or as otherwise set forth
herein, are “Vested Shares.”  Shares of Stock that have not vested are
“Unvested Shares.”  Vesting is subject to the Participant’s continued
Service.

       

      (ii) Acceleration Upon Death or
Disability.  If the Participant’s service with the Company
terminates because of his or her death or Disability, then he or she will be
given credit for an additional twelve (12) months of continuous service;
provided, however, that in no event shall such applicable vesting exceed 100%
vesting of the Award. For purposes of this provision, (i) the Participant’s
service shall be deemed to have terminated on account of death if his or her
death occurs within three (3) months after the Participant’s termination of
service, and (ii) “Disability” shall mean the Participant’s permanent and total
disability within the meaning of Section 22(e)(3) of the Code, and any
applicable regulations promulgated thereunder to the extent not inconsistent
with the regulations under Section 409A of the Code.

      

      (b)           Reacquisition
Right.  The Company shall simultaneously with the termination
of the Participant’s Service automatically reacquire for no consideration all of
the Unvested Shares (the “Reacquisition Right”), unless the Company agrees to
waive its Reacquisition Right as to some or all of the Unvested
Shares.  Any such waiver shall be exercised by the Company by written
notice to the Participant (with a copy to Escrow Agent) within ninety (90) days
after the termination of Service, and Escrow Agent may then release to the
Participant the number of Unvested Shares not being reacquired by the
Company.  If the Company does not waive its Reacquisition Right as to
all of the Unvested Shares,

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      then upon
such termination of Service, Escrow Agent shall transfer to the Company the
number of Unvested Shares the Company is reacquiring.  The
Reacquisition Right shall expire when all of the shares have become Vested
Shares.  Notwithstanding the foregoing, if necessary to avoid a charge
to earnings for financial accounting purposes, the Company shall not exercise
its Reacquisition Right until at least six (6) months (or such other period
required for financial accounting purposes) have elapsed following the
Participant’s acquisition of the shares of Stock issued pursuant to this Award,
unless otherwise determined by the Board.  In the event of a Change of
Control or other change in the Company’s capital structure (as provided in
Section 5 of the Plan), the Reacquisition Right may be assigned by the Company
to the successor of the Company (or such successor’s parent corporation), if
any, in connection with such transaction.  To the extent the
Reacquisition Right remains in effect following such transaction, it shall apply
to the new capital stock or other property received in exchange for the Stock
under this Award in consummation of such transaction.

      

      3.           Definitions.  As
used in this Agreement, the following terms shall have the meanings indicated
unless the context requires a different meaning.

      

      (a)           Board.  The
“Board” shall mean the Board of Directors of the Company.

      

      (b)           Code.  “Code”
shall mean the Internal Revenue Code of 1986, as amended.

      

      (c)           Director.  “Director”
shall mean a member of the Board of Directors of the Company.

      

      (d)           Participating
Company.  “Participating Company” shall mean (i) the Company,
and (ii) any present or future parent and/or subsidiary corporation of the
Company while such corporation is a parent or subsidiary of the
Company.  For purposes of this Agreement, a parent corporation and a
subsidiary corporation shall be as defined in Sections 424(e) and 424(f) of the
Code.

      

      (e)           Participating Company
Group.  “Participating Company Group” shall mean at any point
in time all corporations collectively which are then a Participating
Company.

      

      (f)           Service.  “Service”
means the Participant’s employment or service with the Participating Company
Group as an employee or a consultant, whichever such capacity the Participant
held on the Grant Date.  Unless otherwise determined by the Board, the
Participant’s Service shall be deemed to have terminated if the Participant
ceases to render service to the Participating Company Group in such initial
capacity.  However, the Participant’s Service shall not be deemed to
have terminated merely because of a change in the Participating Company for
which the Participant renders such Service in such initial capacity, provided
that there is no interruption or termination of the Participant’s
Service.  Furthermore, the Participant’s Service shall not be deemed
to have terminated if the Participant takes any bona fide leave of absence
approved by the Company of ninety (90) days or less.  In the event of
a leave in excess of ninety (90) days, the Participant’s Service shall be deemed
to terminate on the ninety-first (91st) day of the leave unless the
Participant’s right to return to Service is guaranteed by statute or
contract.  Notwithstanding the foregoing, unless otherwise designated
by the Company or required by law, a leave of absence shall not be treated as
Service for purposes of determining vesting under this Agreement.  A
Participant’s Service shall be deemed to have terminated either upon an actual
termination of Service or upon the corporation for which the Participant
performs Service ceasing to be a Participating Company.  Subject to
the foregoing, the Board, in its discretion, shall determine whether the
Participant’s Service has terminated and the effective date of such
termination.

      
        
           

        

        
          2

          
            

          

        

        
           

        

      

      (g)           Superseding
Agreement.  “Superseding Agreement” shall mean the Adobe
Systems Incorporated Executive Severance Plan in the Event of a Change of
Control and/or the individual written retention agreement in effect on the Grant
Date between the Company and the Participant, to the extent applicable to the
Participant.

      

      4.           Administration.  All
questions of interpretation concerning this Agreement shall be determined by the
Board and/or by a duly appointed committee of the Board having such powers as
shall be specified by the Board.  Any reference herein to the Board
shall also mean the committee if such committee has been
appointed.  All determinations by the Board shall be final and binding
upon all persons having an interest in this Agreement.

      

      5.           Rights as a
Stockholder.  The Participant shall have no rights as a
stockholder with respect to Unvested Stock. No adjustment shall be made for
dividends or distributions or other rights for which the record date is prior to
the date such Stock becomes Vested Stock.

      

      6.           Escrow of Unvested
Shares. As
security for the Participant’s faithful performance of the terms of this
Agreement (including Section 2) and to insure the availability for delivery of
the Participant’s Stock upon execution of the Reacquisition Right, the
Participant agrees to the following “Joint Escrow” and “Joint Escrow
Instructions,” and the Participant and the Company hereby authorize and direct
the Corporate Secretary of the Company or the Corporate Secretary’s designee
(“Escrow Agent”) to hold the documents delivered to Escrow Agent pursuant to the
terms of this Agreement, in accordance with the following Joint Escrow
Instructions:

      

      (a)           As
provided in Section 2 above, in the event of the termination of the
Participant’s Service, the Company shall pursuant to the Reacquisition Right,
automatically reacquire for no consideration all Unvested Shares, as of the date
of such termination, unless the Company elects to waive such right as to some or
all of the Unvested Shares.  If the Company elects to waive the
Reacquisition Right, the Company will give the Participant and Escrow Agent a
written notice specifying the number of Unvested Shares not to be reacquired.
The Participant and the Company hereby irrevocably authorize and direct Escrow
Agent to close the transaction contemplated by such notice as soon as
practicable following the date of termination of Service in accordance with the
terms of this Agreement and the notice of waiver, if any.

       

      (b)           Vested
Shares shall be delivered to the Participant upon the Participant’s request
given in the manner provided for in this Agreement for providing
notice.

       

      (c)           At
any closing involving the transfer or delivery of some or all of the property
subject to the Agreement, Escrow Agent is directed (i) to date any stock
assignments necessary for the transfer in question, (ii) to fill in the
number of shares being transferred, and (iii) to deliver the same, together
with the certificate, if any, evidencing the shares of Stock to be transferred,
to the Participant or the Company, as applicable.

       

      (d)           The
Participant irrevocably authorizes the Company to deposit with Escrow Agent the
certificates, if any, evidencing shares of Stock to be held by Escrow Agent
hereunder and any additions and substitutions to such shares as specified in
this Agreement.  The Participant hereby irrevocably constitutes and
appoints Escrow Agent as the Participant’s attorney-in-fact and agent for the
term of this escrow to execute with respect to such securities and other
property all documents of assignment and/or transfer and all stock certificates
necessary or appropriate to make all securities negotiable and complete any
transaction contemplated herein.

       

      
        
           

        

        
          3

          
            

          

        

        
           

        

      

      (e)           This
escrow shall terminate upon the expiration or application in full of the
Reacquisition Right and the completion of the tasks contemplated by these Joint
Escrow Instructions.

       

      (f)           If
at the time of termination of this escrow, Escrow Agent should have in its
possession any documents, securities, or other property belonging to the
Participant, Escrow Agent shall deliver all of same to the Participant and shall
be discharged of all further obligations hereunder.

       

      (g)           Except
as otherwise provided in these Joint Escrow Instructions, Escrow Agent’s duties
hereunder may be altered, amended, modified, or revoked only by a writing signed
by all of the parties hereto.

       

      (h)           Escrow
Agent shall be obligated only for the performance of such duties as are
specifically set forth herein and may rely and shall be protected in relying or
refraining from acting on any instrument reasonably believed by Escrow Agent to
be genuine and to have been signed or presented by the proper party or parties
or their assignees.  Escrow Agent shall not be personally liable for
any act Escrow Agent may do or omit to do hereunder as Escrow Agent or as
attorney-in-fact for the Participant while acting in good faith and any act done
or omitted by Escrow Agent pursuant to the advice of Escrow Agent’s own
attorneys shall be conclusive evidence of such good faith.

       

      (i)           Escrow
Agent is hereby expressly authorized to disregard any and all warnings given by
any of the parties hereto or by any other person or corporation, excepting only
orders, judgments, decrees or process of courts of law, and is hereby expressly
authorized to comply with and obey orders, judgments, or decrees of any
court.  In case Escrow Agent obeys or complies with any such order,
judgment, or decree of any court, Escrow Agent shall not be liable to any of the
parties hereto or to any other person, firm, or corporation by reason of such
compliance, notwithstanding any such order, judgment, or decree being
subsequently reversed, modified, annulled, set aside, vacated, or found to have
been entered without jurisdiction.

       

      (j)           Escrow
Agent shall not be liable in any respect on account of the identity, authority,
or rights of the parties executing or delivering or purporting to execute or
deliver this Agreement or any documents or papers deposited or called for
hereunder.

       

      (k)           Escrow
Agent shall not be liable for the outlawing of any rights under any statute of
limitations with respect to these Joint Escrow Instructions or any documents
deposited with Escrow Agent.

       

      (l)           Escrow
Agent’s responsibilities as Escrow Agent hereunder shall terminate if Escrow
Agent shall cease to be the Secretary of the Company (or the Secretary’s
designee, if applicable) or if Escrow Agent shall resign by written notice to
each party.  In the event of any such termination, the Company may
appoint any officer or assistant officer of the Company or any other person as
successor Escrow Agent and the Participant hereby confirm the appointment of
such successor or successors as the Participant’s attorney-in-fact and agent to
the full extent of such successor Escrow Agent’s appointment.

       

      (m)           If
Escrow Agent reasonably requires other or further instruments in connection with
these Joint Escrow Instructions or obligations in respect hereto, the necessary
parties hereto shall join in furnishing such instruments.

       

      (n)           It
is understood and agreed that should any dispute arise with respect to the
delivery and/or ownership or right of possession of the securities, Escrow Agent
is authorized and directed to retain in its possession without liability to
anyone all or any part of such securities until such

       

      
        
           

        

        
          4

          
            

          

        

        
           

        

      

      dispute
shall have been settled either by mutual written agreement of the parties
concerned or by a final order, decree, or judgment of a court of competent
jurisdiction after the time for appeal has expired and no appeal has been
perfected, but Escrow Agent shall be under no duty whatsoever to institute or
defend any such proceedings.

       

      (o)           By
signing this Agreement below Escrow Agent becomes a party hereto only for the
purpose of the Joint Escrow Instructions; Escrow Agent does not become a party
to any other rights and obligations of this Agreement apart from those in this
Section 6.

       

      (p)           Escrow
Agent shall be entitled to employ such legal counsel and other experts as Escrow
Agent may deem necessary to properly advise Escrow Agent in connection with
Escrow Agent’s obligations hereunder.  Escrow Agent may rely upon the
advice of such counsel, and may pay such counsel reasonable compensation
therefor.  The Company shall be responsible for all fees generated by
such legal counsel in connection with Escrow Agent’s obligations
hereunder.

       

      (q)           These
Joint Escrow Instructions shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and permitted
assigns.  It is understood and agreed that references to “Escrow
Agent” herein refer to the original Escrow Agent and to any and all successor
Escrow Agents.  It is understood and agreed that the Company may at
any time or from time to time assign its rights under the Agreement and these
Joint Escrow Instructions in whole or in part.

       

      7.           Legends.  The
Participating Company Group may at any time place legends referencing the
Reacquisition Right set forth in Section 2 above and any applicable federal
and/or state securities restrictions on all certificates representing shares of
Stock subject to the provisions of this Agreement.  The Participant
shall, at the request of the Participating Company Group, promptly present to
the Participating Company Group any and all certificates representing shares of
Stock acquired under this Agreement in the possession of the Participant in
order to effectuate the provisions of this Section.  Unless otherwise
specified by the Participating Company Group, legends placed on such
certificates may include but shall not be limited to the following:

      

      “THE
SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO RESTRICTIONS SET FORTH
IN AN AGREEMENT BETWEEN THIS CORPORATION AND THE REGISTERED HOLDER, OR HIS OR
HER PREDECESSOR IN INTEREST, A COPY OF WHICH IS ON FILE AT THE PRINCIPAL OFFICE
OF THE CORPORATION.”

      

      8.           Transfers in Violation of
Agreement. The Participant’s Award and any Unvested Shares are not
transferable, except by will or by the laws of descent and distribution. The
Company shall not be required (a) to transfer on its books any shares of the
Stock which shall have been sold or transferred in violation of any of the
provisions set forth in this Agreement, or (b) to treat as owner of such shares
or to accord the right to vote as such owner or to pay dividends to any
transferee to whom any such shares shall have been so transferred.

      

      9.           Tax
Matters.

      

      (a)           Tax Consequences.
The Participant acknowledges and agrees that the Participant has reviewed with
the Participant’s own tax advisors the federal, state, local and foreign tax
consequences of the Award and the transactions contemplated by this Agreement,
or has knowingly and voluntarily declined to do so.  The Participant
shall rely solely on such advisors and not on any statements or representations
of the Company or any of its agents.  The Participant understands that
the Participant (and not the Company) shall be responsible for the Participant’s
own tax liability that may

      
        
           

        

        
          5

          
            

          

        

        
           

        

      

      arise as
a result of the Award or the transactions contemplated by this
Agreement.  The Participant acknowledges that the Participant shall be
solely responsible for making any filings or elections, including any election
under Section 83(b) of the Code, even if the Participant requests the Company or
its representatives to make any filing on the Participant’s behalf.

      

      (b)           Withholding
Obligations.  Regardless of any action taken by the Company or
the Participating Company Group with respect to any or all income, employment,
social insurance, or payroll taxes, payment on account or other tax-related
withholding (“Tax-Related Items”), the Participant acknowledges that the
ultimate liability for all Tax-Related Items legally due by the Participant is
and remains the Participant’s responsibility and that the Company and
Participating Company Group (i) make no representations or undertakings
regarding the treatment of any Tax-Related Items in connection with any aspect
of this Agreement, the subsequent sale of the Stock, or the receipt of any
dividends, and (ii) do not commit to structure the terms of the grant or any
other aspect of this Agreement to reduce or eliminate the Participant’s
liability for Tax-Related Items. At the time the Participant vests in the Stock
or at any other time as reasonably requested by the Company or the Participating
Company Group, the Participant shall pay or make adequate arrangements
satisfactory to the Participating Company Group to satisfy all withholding
obligations of the Participating Company Group. In this regard, the Participant
hereby authorizes the withholding of that number of whole vested shares
otherwise deliverable to the Participant pursuant to this Agreement having a
fair market value not in excess of the amount of the Tax-Related Items
determined by the applicable minimum statutory rates. In no event may shares of
Stock be withheld with a value exceeding the minimum amount of tax required to
be withheld by law. Finally, the Participant shall pay to the Company or
Participating Company Group (as applicable) any amount of the Tax-Related Items
that the Company or the Participating Company Group may be required to withhold
as a result of the Participant’s participation in the Plan that cannot be
satisfied by the means previously described. The Participant expressly
acknowledges and agrees that the Company may withhold from any compensation paid
to the Participant by the Company in partial or full satisfaction of the
withholdings contemplated by this Section.

      

      10.           Acknowledgement. By
accepting this Agreement, the Participant acknowledges that:

      

      (a)           the
Plan is established voluntarily by the Company; it is discretionary in nature
and it may be modified, amended, suspended or terminated by the Board at any
time, unless otherwise provided in the Plan and this Agreement;

      

      (b)           this
grant is voluntary and occasional and does not create any contractual or other
right to receive future grants of awards, or benefits in lieu of awards, even if
awards have been granted repeatedly in the past;

      

      (c)           all
decisions with respect to future awards under the Plan, if any, will be at the
sole discretion of the Board;

      

      (d)           the
Participant’s participation in the Plan shall not create a right to further
employment with the Company or the Participating Company Group and shall not
interfere with any ability of the Company or the Participating Company Group to
terminate the Participant’s employment relationship at any time, with or without
cause;

      

      (e)           the
Participant is voluntarily participating in the Plan;

      

      (f)           this
Award is not part of normal or expected compensation or salary for any purpose,
including, but not limited to, calculating any severance, resignation,
termination, redundancy,

      
        
           

        

        
          6

          
            

          

        

        
           

        

      

      end-of-service
payments, bonuses, long-service awards, pension or retirement benefits or
similar payments;

      

      (g)           in
the event that the Participant is not an employee of the Company, this Agreement
will not be interpreted to form an employment contract or relationship with the
Company; and furthermore, this Agreement will not be interpreted to form an
employment contract with the other members of the Participating Company
Group;

      

      (h)           the
future value of the Stock is unknown and cannot be predicted with certainty;
and

      

      (i)           no
claim or entitlement to compensation or damages arises from termination of this
Award or diminution in value of the Stock issued resulting from termination of
the Participant’s Service with the Company or the Participating Company Group
(for any reason whether or not in breach of applicable labor laws), and the
Participant irrevocably releases the Company and the Participating Company Group
from any such claim that may arise. If, notwithstanding the foregoing, any such
claim is found by a court of competent jurisdiction to have arisen then, by
accepting this Agreement, the Participant shall be deemed irrevocably to have
waived the Participant’s entitlement to pursue such a claim.

      

      11.           Delivery of Documents and
Notices.  Any document relating to participating in the Plan
and/or notice required or permitted hereunder shall be given in writing and
shall be deemed effectively given (except to the extent that this Agreement
provides for effectiveness only upon actual receipt of such notice) upon
personal delivery, electronic delivery, or upon deposit in the U.S. Post Office
or foreign postal service, by registered or certified mail, with postage and
fees prepaid, addressed to the other party at the e-mail address, if any,
provided for the Participant by a Participating Company or at such other address
as such party may designate in writing from time to time to the other
party.

      

      (a)           Description of Electronic
Delivery.  The Plan documents, which may include but do not
necessarily include: the Plan prospectus, this Agreement and U.S. financial
reports of the Company, may be delivered to the Participant
electronically.  In addition, the Participant may deliver
electronically any notices called for by this Agreement.  Such means
of delivery may include but do not necessarily include the delivery of a link to
a Company intranet or the internet site of a third party involved in
administering the Plan, the delivery of the document via e-mail or such other
delivery determined at the Board’s discretion.

      

      (b)           Consent to Electronic
Delivery.  The Participant acknowledges and consents to the
electronic delivery of the Plan documents and notice pursuant to this
Agreement.  The Participant acknowledges that he or she may receive
from the Company a paper copy of any documents delivered electronically at no
cost if the Participant contacts the Company by telephone, through a postal
service or electronic mail at equity@adobe.com.  The Participant
further acknowledges that the Participant will be provided with a paper copy of
any documents delivered electronically if electronic delivery fails; similarly,
the Participant understands that the Participant must provide the Company or any
designated third party with a paper copy of any documents delivered
electronically if electronic delivery fails.  Also, the Participant
understands that the Participant’s consent may be revoked or changed, including
any change in the electronic mail address to which documents are delivered (if
Participant has provided an electronic mail address), at any time by notifying
the Company of such revised or revoked consent by telephone, postal service or
electronic mail at equity@adobe.com.

      
        
           

        

        
          7

          
            

          

        

        
           

        

      

      12.           Successors and
Assigns.  This Agreement shall inure to the benefit of the
successors and assigns of the Company and, subject to the restrictions on
transfer herein set forth, be binding upon Participant, his or her heirs,
executors, administrators, successors and assigns.

      

      13.           Securities Law
Compliance. The grant and issuance of the Stock under this Award shall be
subject to compliance with all applicable requirements of federal, state or
foreign law with respect to such securities. The Participant may not be issued
any shares of Stock if such issuance would constitute a violation of any
applicable federal, state or foreign securities laws or other law or regulations
or the requirements of any stock exchange or market system upon which the Stock
may then be listed. In addition, the Participant may not be issued any shares of
Stock unless (i) a registration statement under the Securities Act shall at the
time of issuance be in effect with respect to the shares or (ii) in the opinion
of legal counsel to the Company, the shares may be issued in accordance with the
terms of an applicable exemption from the registration requirements of the
Securities Act. YOU ARE CAUTIONED THAT THE SHARES MAY NOT BE ISSUED UNLESS THE
FOREGOING CONDITIONS ARE SATISFIED. The inability of the Company to obtain from
any regulatory body having jurisdiction the authority, if any, deemed by the
Company’s legal counsel to be necessary to the lawful issuance and sale of any
shares of Stock shall relieve the Company of any liability in respect of the
failure to issue or sell such shares as to which such requisite authority shall
not have been obtained. As a condition to the issuance of any shares of Stock
pursuant to this Agreement, the Company may require the Participant to satisfy
any qualifications that may be necessary or appropriate, to evidence compliance
with any applicable law or regulation and to make any representation or warranty
with respect thereto as may be requested by the Company.

      

      14.           Data Privacy
Consent.  The Participant hereby explicitly and unambiguously
consents to the collection, use and transfer, in electronic or other form, of
the Participant’s personal data as described in this document by and among the
members of the Participating Company Group for the exclusive purpose of
implementing, administering and managing the Participant’s participation in the
Plan.

      

      The Participant understands that the
Company and the Participating Company Group hold certain personal information
about the Participant, including, but not limited to, the Participant’s name,
home address and telephone number, date of birth, social insurance number or
other identification number, salary, nationality, job title, any shares of Stock
or directorships held in the Company, details of any entitlement to shares of
Stock awarded, canceled, exercised, vested, unvested or outstanding in the
Participant’s favor, for the purpose of implementing, administering and managing
the Plan (“Data”).  The Participant understands that Data may be
transferred to any third parties assisting in the implementation, administration
and management of the Plan, that these recipients may be located in the
Participant’s country or elsewhere, and that the recipient’s country may have
different data privacy laws and protections than the Participant’s
country.  The Participant understands that he or she may request a
list with the names and addresses of any potential recipients of the Data by
contacting the Participant’s local human resources
representative.  The Participant authorizes the recipients to receive,
possess, use, retain and transfer the Data, in electronic or other form, for the
purposes of implementing, administering and managing the Participant’s
participation in the Plan.  The Participant understands that Data will
be held only as long as is necessary to implement, administer and manage the
Participant’s participation in the Plan.  The Participant understands
that he or she may, at any time, view Data, request additional information about
the storage and processing of Data, require any necessary amendments to Data or
refuse or withdraw the consents herein, in any case without cost, by contacting
in writing the Participant’s local human resources
representative.  The Participant understands, however, that refusing
or withdrawing the Participant’s consent may affect the Participant’s ability to
participate in the Plan.  For more information on the consequences of
the Participant’s refusal to consent or withdrawal of

      
        
           

        

        
          8

          
            

          

        

        
           

        

      

      consent,
the Participant understands that he or she may contact the Participant’s local
human resources representative.

      

      15.           Integrated
Agreement.  This Agreement, together with the Superseding
Agreement, if any, and the Plan constitutes the entire understanding and
agreement of the Participant and the Participating Company Group with respect to
the subject matter contained herein and supersedes any prior agreements,
understandings, restrictions, representations, or warranties among the
Participant and the Participating Company Group with respect to such subject
matter other than those as set forth or provided for herein.  In the
event of any conflict between the provisions of this Agreement and those of the
Plan, the provisions of the Plan shall control.  In the event of any
conflict between the provisions of this Agreement and/or the Plan and the
provisions of the Superseding Agreement, the Superseding Agreement shall
control.

      

      16.           Applicable Law and
Venue.  This Agreement shall be governed by the laws of the
State of California as such laws are applied to agreements between California
residents entered into and to be performed entirely within the State of
California. For purposes of litigating any dispute that arises directly or
indirectly from the relationship of the parties as evidenced by this Agreement,
the parties herby submit to and consent to the jurisdiction of the State of
California and agree that such litigation shall be conducted only in the courts
of Santa Clara County, California, or the federal courts of the United States
for the Northern District of California, and no other courts, where this
Agreement is made and/or performed.

      

      17.           Application of Code Section
409A.  Notwithstanding
any other provision of this Agreement, to the extent that (i) one or more
of the payments or benefits received or to be received by the Participant
pursuant to this Agreement would constitute deferred compensation subject to the
requirements of Code Section 409A, and (ii) the Participant is a “specified
employee” within the meaning of Code Section 409A, then such payment or benefit
(or portion thereof) will be delayed until the earliest date following the
Participant’s “separation from service” with the Participating Company Group
within the meaning of Code Section 409A on which the Company can provide such
payment or benefit to the Participant without the Participant’s incurrence of
any additional tax or interest pursuant to Code Section 409A, with all payments
or benefits due thereafter occurring in accordance with the original
schedule.  In addition, this Award and the payments and benefits to be
provided hereunder are intended to comply in all respects with the applicable
provisions of Code Section 409A.

      

      
        	
                ADOBE
      SYSTEMS INCORPORATED

              	
                ESCROW
      AGENT

              
	
                By:
      ­­­­­__________________________________

                Shantanu
      Narayen

                Chief
      Executive Officer

                Adobe
      Systems Incorporated

                Address:        345
      Park Avenue

                San Jose, CA
      95110-2704

              	
                By:
      ­­­­­__________________________________

                [Designee
      of Corporate Secretary]

                [Title]

                Adobe
      Systems Incorporated

                Address:        345
      Park Avenue

                San Jose, CA
      95110-2704

              

      

      

      The
Participant represents that he or she is familiar with the terms and provisions
of this Agreement and hereby accepts the Stock subject to all of the terms and
provisions thereof.  The Participant hereby agrees

      
        
           

        

        
          9

          
            

          

        

        
           

        

      

      to accept
as binding, conclusive and final all decisions or interpretations of the Board
upon any questions arising under this Agreement.

      
        
           

        

        
          10

          
            

          

        

        
           

        

      

      Exhibit A

      

      Restricted
Stock Award

      Determination
of Vesting

      

      

      This Exhibit A is attached
to the Restricted Stock Award Grant Agreement between ________________ and Adobe
Systems Incorporated, dated __________________, covering
_______________ shares
and is incorporated by reference therein.

      

      Vesting
Schedule:  [Except as otherwise provided in a Superseding
Agreement, the Award shall vest as to 1/3rd of the shares of Stock subject to
the Award on the one year anniversary of the Grant Date (the “First Vesting
Date”), and thereafter as to 1/3rd of the shares of Stock subject to the Award
on each of the second and third anniversaries of the Grant Date (each such date,
a “Vesting Date”), so that the Award will be fully vested as of the third
anniversary of the Grant Date; provided, however, that the Participant continues
to render Service through each such vesting date.]

      

      
        
           

        

        
          11

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