Document:

exv10w4

 

Exhibit 10.4

International

Employee Stock

Purchase Plan

LSI LOGIC CORPORATION

Plan Document

Revision Date: August 2006

 

 

This International Employee Stock Purchase Plan must be read
together with
the Country Addendum for the country in which
you are employed. Where terms of
the Country Addendum are
inconsistent with those stated in this document, the
terms of the
Country Addendum shall govern.

-i-

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 
	 	 	 	 	Page	 
	Introduction	 	 	1	 
	 
	 	 	 	 	 	 
	Eligibility	 	 	2	 
	 
	 	 	 	 	 	 
	 
	 	Who May Participate	 	 	2	 
	 
	 	 	 	 	 	 
	Enrollment	 	 	3	 
	 
	 	 	 	 	 	 
	 
	 	Enrolling in the IESPP	 	 	3	 
	 
	 	 	 	 	 	 
	How the Plan Works	 	 	4	 
	 
	 	 	 	 	 	 
	 
	 	Offering Period/Purchase Period	 	 	4	 
	 
	 	Purchase Date/Purchase Price	 	 	4	 
	 
	 	Determination of Fair Market Value	 	 	5	 
	 
	 	Examples	 	 	5	 
	 
	 	Automatic Re-Enrollment in Subsequent Offering Period	 	 	6	 
	 
	 	Automatic Early Transfer to a New Offering Period	 	 	6	 
	 
	 	Payroll Deductions	 	 	7	 
	 
	 	Confirm IESPP Changes and Enrollment	 	 	7	 
	 
	 	Exchange Rate	 	 	8	 
	 
	 	Limitations on Shares You May Purchase	 	 	8	 
	 
	 	Use of Excess Funds	 	 	9	 
	 
	 	Changing Your Contribution Level	 	 	9	 
	 
	 	E*TRADE Stock Plans Account	 	 	9	 
	 
	 	Activating Your E*TRADE Stock Plans and E*TRADE Brokerage Account	 	 	9	 
	 
	 	Deposit of Shares	 	 	10	 
	 
	 	Sale of Shares	 	 	10	 
	 
	 	Account Records	 	 	11	 
	 
	 	Report of Sales to LSI Logic	 	 	11	 
	 
	 	Employee Stock Purchase Transmittals	 	 	11	 
	 
	 	Withdrawing from the IESPP	 	 	11	 
	 
	 	Termination of Plan Participation/Participation While on a Leave of Absence	 	 	12	 
	 
	 	Designating Your Beneficiary	 	 	12	 
	 
	 	Nonassignability	 	 	13	 
	 
	 	Administration of the IESPP	 	 	13	 
	 
	 	Amendment and Termination of the IESPP	 	 	13	 
	 
	 	Capital Changes	 	 	14	 
	 
	 	Conditions upon Issuance of Company Common Stock	 	 	14	 
	 
	 	Designation of Employer Subsidiaries and Country Addendum	 	 	14	 
	 
	 	Third Party Fiduciaries	 	 	15	 
	 
	 	Notices	 	 	15	 
	 
	 	 	 	 	 	 
	Tax Consequences	 	 	16	 
	 
	 	 	 	 	 	 
	 
	 	Tax Implications of Purchasing and Selling Your Company Common Stock	 	 	16	 
	 
	 	Withholding and Employee-Paid Social Insurance	 	 	16	 
	 
	 	 	 	 	 	 
	Other Information	 	 	17	 
	 
	 	 	 	 	 	 
	 
	 	Obtaining Additional Information	 	 	17	 

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Introduction

The Board of Directors (the “Board”) of LSI Logic Corporation (the “Company”) has adopted the
International Employee Stock Purchase Plan (the “IESPP” or the “Plan”) in order to provide
employees of designated LSI Logic subsidiaries with the opportunity to purchase common stock of the
Company at a below current market price through convenient payroll deductions. If you decide to
participate in the Plan, you can set aside from 1% to 15% of your eligible compensation which will
then be used to purchase stock for you twice a year. Participation in the IESPP is voluntary.

As used in this IESPP, “Company Board” means the Board of Directors of LSI Logic Corporation, or to
the extent authorized by the Board, a committee of the Board. “Employer Subsidiary” means those
subsidiaries of the Company that have been designated by the Company as participants in the IESPP.
For more information about the Plan or its administration, you may contact the LSI Logic
Corporation Stock Administration Department, Mail Stop D-206, 1621 Barber Lane, Milpitas CA 95035,
1-408-433-6810.

IMPORTANT NOTE:

An effort has been made to have the terms of the IESPP apply to all IESPP participants regardless
of the country in which the participant is employed. Notwithstanding that effort, certain
different or additional terms may apply for the IESPP as it applies to the country in which you are
employed to accommodate local requirements. Those terms are set forth in the Country Addendum.
Therefore, this document must be read together with the Country Addendum that applies to your
Employer Subsidiary. Where terms of your Country Addendum are different from those stated in this
document, the terms of the Country Addendum shall apply.

This IESPP, together with the Country Addendum, if any, constitute part of a prospectus covering
securities that have been registered in the United States under the Securities Act of 1933, as
amended.

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Eligibility

Who May Participate

You qualify to participate in the IESPP if all of the following are true:

	 	•	 	You are working as a regular employee of an Employer Subsidiary.
	 
	 	•	 	You are regularly scheduled by an Employer Subsidiary to work for more than 20
hours per week and more than five months in each calendar year.
	 
	 	•	 	You do not own five percent or more of the total combined voting power or value
of all classes of stock of the Company or of any subsidiary of the Company, and

Temporary employees and independent contractors providing services to the Company are not eligible
to participate, regardless of the length of such service.

Participation in the Plan does not create a contract for employment or limit in any way the right
of the Company to terminate the participant’s employment at any time, with or without cause, or
confer on a participant any right to continue in the employ of the Company.

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Enrollment

Enrolling in the IESPP

An eligible employee may become a participant in the IESPP by completing the attached IESPP
Subscription Agreement authorizing payroll deductions and submitting it to LSI Logic Stock
Administration Department prior to an Enrollment Date.

There are two Enrollment Dates each calendar year: May 15 and November 15.

Open enrollment is held during April and October before each Enrollment Date.

You must submit a completed IESPP Subscription Agreement during Open Enrollment in order to
participate as of the next Enrollment Date if:

	 	•	 	You are a new participant,
	 
	 	•	 	You are enrolling following a period of non-participation.

Your payroll deductions begin with the first payroll on or after the Enrollment Date, depending on
the specific country payroll cycle.

New hires starting employment after the ESPP Open Enrollment Period and before the beginning of the
Offering Period can enroll up to and including the first day of the Offering Period. The
Subscription Agreement must be received no later than the first day of the Offering Period.

If you miss the deadline for enrolling, you must wait until the next Open Enrollment to enroll in
the IESPP.

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How the Plan Works

Offering Period/Purchase Period

An Offering Period lasts for 12 months unless you:

	 	•	 	withdraw
	 
	 	•	 	cease to be an Eligible Employee, or
	 
	 	•	 	are automatically transferred to a new Offering Period.

Each 12-month Offering Period consists of two consecutive Purchase Periods of six months each.
Offering Periods begin either on May 15 or November 15.

Purchase Date/Purchase Price

There are two Purchase Dates each calendar year: May 14 and November 14.

On each Purchase Date your payroll deductions accumulated during the Purchase Period are used to
automatically purchase the maximum number of whole shares of Company common stock that you are
entitled to purchase under the IESPP.

The Purchase Price you will pay for the stock purchased under the IESPP is equal to the lower of:

	 	Þ 	 	85% of the fair market value of the Company common stock on the Enrollment Date; or
	 
	 	Þ 	 	85% of the fair market value of the Company common stock on the Purchase Date.

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Determination of Fair Market Value

The fair market value of LSI Logic’s stock on a particular date is the closing price of the
stock on the New York Stock Exchange on that date in the United States, as reported by the Wall
Street Journal. However, if a closing price is not available for a particular date, then the fair
market value to be used for that date will be the previous business day’s closing stock price. For
example, if the Enrollment date falls on a Saturday, the closing price of the stock on the
preceding Friday (or on the next preceding NYSE trading day, if that Friday is not a business day)
would be the fair market value on the Enrollment Date.

Examples

The examples in this booklet are intended as illustrations only and are not based on any
actual or predicted value or performance of Company common stock.

Fair Market Value Higher on Purchase Date than on Enrollment Date

Let’s assume that the fair market value of Company common stock was US$8.00 per share on the
Enrollment Date. Assume that on a future Purchase Date in the Offering Period, the fair market
value of the common stock had risen to US$10.00 per share.

As illustrated below, your Purchase Price would be US$6.80:

The lower of:

85% x US$8.00= US$6.80 or

85% x US$10.00= US$8.50   

Your Purchase Price is US$6.80

Fair Market Value Lower on Purchase Date than on the Enrollment Date

Let’s assume that the fair market value of Company common stock was US$8.00 per share on the
Enrollment Date. Assume that six months later the fair market value of the Company common stock
had decreased and the closing price of the stock on the New York Stock Exchange on the Purchase
Date was US$7.00 per share.

As illustrated below, your Purchase Price would be US$5.95.

The lower of:

85% x US$8.00= US$6.80 or

85% x US$7.00= US$5.95    

Your Purchase Price is US$5.95

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Automatic Re-Enrollment in Subsequent Offering Period

A new Offering Period begins each May 15 and November 15; however, you may be enrolled in only
one Offering Period at a time. Once you have completed an IESPP Subscription Agreement authorizing
payroll deductions to initially enroll in the IESPP, you will be re-enrolled automatically as a
participant in future Offering Periods when an Offering Period in which you are currently enrolled
ends UNLESS:

	 	•	 	You withdraw from participation
	 
	 	•	 	Your employment terminates
	 
	 	•	 	You become otherwise ineligible to participate in the IESPP, or your participation has terminated for any other reason
	 
	 	•	 	Your Employer Subsidiary withdraws from the IESPP
	 
	 	•	 	The IESPP terminates

Automatic Early Transfer to a New Offering Period

If the fair market value of the Company common stock is lower on a Purchase Date than it was
on the Enrollment Date, you are automatically withdrawn from that Offering Period immediately after
you purchase shares on such Purchase Date and automatically re-enrolled in the next Offering
Period. The effect of this is to automatically begin a new 12-month Offering Period.

For example, in the second example described above, the fair market value on the Enrollment Date
was US$8.00, but had declined to US$7.00 on the Purchase Date. Regardless of where you are in the
current 12-month Offering Period, you would be automatically withdrawn from that Offering Period
following your purchase of shares and re-enrolled in the next Offering Period.

Your payroll deductions will continue at the same rate during the new Offering Period as in the
prior Offering Period unless you instruct the Stock Administration Department otherwise by
submitting an ESPP Change Form within the deadlines.

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Payroll Deductions

You may contribute from 1% to 15% of your eligible compensation to the IESPP. The percentage
you deduct must be expressed in whole numbers. For purposes of the IESPP, your eligible
compensation includes all regular and recurring straight time earnings, payments for overtime,
shift premium, incentive compensation, incentive payments, bonuses, commissions, but exclusive of
other compensation. Unless otherwise expressly provided in your Company Addendum, eligible
compensation excludes:

	 	•	 	car allowances
	 
	 	•	 	transportation allowances
	 
	 	•	 	housing allowances
	 
	 	•	 	dependent allowances
	 
	 	•	 	one-time incentive payments
	 
	 	•	 	one-time recognition awards (dinner for two, bravo & winners circle awards, and cash substitute)
	 
	 	•	 	disability pay (other than short-term salary continuation)
	 
	 	•	 	other compensation

Unless otherwise required under the laws of your country, all payroll deductions contributed by
IESPP participants will be held by the Company or the Employer Subsidiary’s in its general fund
until such time as the stock is purchased. In order for payroll deductions to be applied to a
particular purchase date, they must be from a payroll date that is more than three business days
before that purchase date. Also, once payroll deductions are taken, there are no restrictions on
the Company’s or Employer Subsidiary’s use of such accumulated payroll deductions.

Stock deductions calculated on retroactive pay adjustments, will be included in the purchase period
when the retroactive adjustment is paid.

Confirm IESPP Changes and Enrollment

It is your responsibility to review your first paycheck after the effective date of change or
an initial enrollment to make sure your instructions were carried out.

If you have a problem with any IESPP change or enrollment you must notify Stock Administration no
later than 45 days from the beginning of the Offering Period and provide your original fax
confirmation from your requested change or enrollment. For the November 15 Offering Period, the
last day to notify Stock Administration of any IESPP change or enrollment problems is December 31.
For the May 15 Offering Period, the last day to notify Stock Administration of any IESPP change or
enrollment problems is June 30.

-7-

 

Exchange Rate

The exchange rate used for calculating the number of shares of stock to be purchased with your
payroll deductions is the NYSE Composite exchange rate reported by Bloomberg Financial System using
the closing rate on the last Wednesday of the fiscal month ending closest to the Purchase Date.

Limitations on Shares You May Purchase

On each Enrollment Date of each Offering Period, each eligible Employee participating in such
Offering Period shall be granted an option to purchase on each Exercise Date during such Offering
Period (at the applicable Purchase Price) up to a number of full shares of the Company’s Common
Stock determined by dividing such Employee’s payroll deductions accumulated prior to such Exercise
Date and retained in the Employee’s account as of the Exercise Date by the applicable Purchase
Price; provided that in no event shall an Employee be permitted to purchase more than 1,000 shares
in each Purchase Period within an Offering Periods, provided further that such purchase shall be
subject to the limitations set forth below. The Board may, for future Offering Periods, increase
or decrease, in its absolute discretion, the maximum number of shares of the Company’s Common Stock
an Employee may purchase during each Purchase Period of such Offering Period.

No employee will be permitted to purchase shares under the IESPP, if, immediately after enrollment,
the employee would own five percent or more of the total combined voting stock of LSI Logic or of
any subsidiary of LSI Logic (including stock which may be purchased through the IESPP or pursuant
to stock options).

No employee will be permitted to purchase shares under the IESPP or any other employee stock
purchase plans of LSI Logic or its subsidiaries having a value of more than $25,000 (determined
using the fair market value of the shares on such employee’s Enrollment Date) in any calendar year.
This means that your annual payroll contributions cannot exceed US$21,250.

Subject to adjustment upon changes in capitalization by the Company as provided in the IESPP, the
maximum number of shares of the Company’s common stock that shall be reserved for sale under the
IESPP shall be 5,227,273. If the total number of shares to be purchased on any Purchase Date
exceeds the remaining reserved shares then available under the IESPP, a pro rata allocation of the
available Company common stock will be made among the participants, and the IESPP will terminate
unless additional Company common stock are added to the IESPP.

Additional limitations on the number of shares of Company common stock that an employee may
purchase apply for employees of certain Employer Subsidiaries. Please refer to the applicable
Country Addendum.

-8-

 

Use of Excess Funds

Any contributions remaining in your account after the purchase has been made for the current
Purchase Date that are not sufficient to purchase a full share, or exceed the amount required to
purchase 1,000 shares, or exceed the $25,000 cap described above, will be refunded to you following
the purchase of shares.

Changing Your Contribution Level

Once you are enrolled in the IESPP, you may reduce your contributions to a lower level (but
not below 1% of your eligible compensation) at any time. Reducing your contribution level does not
change your Purchase Price. To reduce your contribution level, complete an ESPP Change Form and
submit to the Stock Administration Department showing the change in contribution level.

You may also increase your contribution level to a maximum of 15%. You can only increase your
contribution percentage during ESPP Open Enrollment Periods held in April and October. Increases in
your contribution level are only effective as of the beginning of a Purchase Period. Increasing
your contribution level does not change your Purchase Price. To increase your contribution level,
submit an ESPP Change Form to the Stock Administration Department during designated ESPP Open
Enrollment periods showing the change in contribution level.

The ESPP Change Form is available on the Stock Administration web site on the Company intranet.

E*TRADE Stock Plans Account

The E*TRADE Stock Plans account is used for all stock programs. For new IESPP participants,
the Stock Plans accounts are opened approximately two months prior to the purchase as long as you
are a current participant. For new accounts, E*TRADE will email an activation notice to your LSI
Logic email address once they receive the new participant information from the LSI Logic Stock
Administration Department. In order to trade you will need to activate your account and complete
the Form W-8BEN. If you have not received an email notice you can activate online.

Activating Your E*TRADE Stock Plans and E*TRADE Brokerage Account

In order to begin trading in your E*TRADE Stock Plans account, the account activation form and
Form W-8BEN must be completed and received by E*TRADE. You can login to www.etrade.com/stockplans
and activate online, or you can download the forms. Additional instructions on how to activate are
also located on the LSI Logic Stock Administration web site. If you need assistance activating
your account, call E*TRADE’s International Customer Service number at 1-650-599-0125 and press “0”,
# to reach an operator. When your Stock Plans account is opened, an E*TRADE Brokerage Account is
automatically opened with it. There is no fee to activate the E*TRADE Brokerage Account. When you
sell shares from your Stock Plans account the proceeds are deposited into your brokerage account.
As an active LSI Logic employee, your E*TRADE Brokerage Account has no minimum balance, your funds
earn interest, and you have free check-writing privileges with funds in that account.

-9-

 

Deposit of Shares

Shortly after the close of each Purchase Period, LSI Logic will deposit your purchased shares
into your E*TRADE Stock Plans Account. Once your shares have been deposited to your account, you
may sell them at any time.

Sale of Shares

After you have activated your E*TRADE Stock Plans Account, you can login to your account at
www.etrade.com/stockplans to sell your shares.

Or, call the Interactive Voice Response System at 1-650-599-0125 from outside the U.S.

Each IESPP purchase with sellable shares is tracked individually. You choose which IESPP shares
you want to sell in your Stock Plans account. That sale will then be reported to LSI for
disposition tracking purposes. Such sales will be subject to commission charges at competitive
rates.

There are no brokerage account fees or inactivity fees for your E*TRADE accounts. The schedule
below applies to transactions for selling shares:

	 	 	 	 	 
	IESPP Sales
	 	$	19.95	 
	 
	 	 	 	 
	Additional Charges:
	 	 	 	 
	 
	 	 	 	 
	Broker Assisted Sale
	 	$	35	 
	Check Via Mail
	 	$	5	 
	Check Via Federal Express
	 	$	20	 
	Wire Transfer
	 	$	25	 
	Hold proceeds in E*TRADE
	 	No Charge

These rates are subject to change without notice.

Employees have the flexibility to determine when and how they receive proceeds from a sale:

	 	•	 	Sweep the proceeds into your E*TRADE Brokerage account (this account earns
interest and has free check-writing capabilities)
	 
	 	•	 	Wire Transfer
	 
	 	•	 	Mail a check via regular mail or overnight delivery

-10-

 

Account Records

E*TRADE will provide each employee with a brokerage account statement summarizing your account
activity as well as written trade confirmations on all executed orders. If there has been activity
in your account, you will receive a statement each month; otherwise you will receive one each
quarter, provided there are assets in the account.

Report of Sales to LSI Logic

E*TRADE will provide LSI Logic with monthly reporting for all IESPP sales. For more
information regarding tax consequences of sale of shares acquired under the IESPP see the
applicable Country Addendum.

Employee Stock Purchase Transmittals

Twice a year, following each Purchase Date, you will receive an Employee Stock Purchase
Transmittal, from the Stock Administration Department at LSI Logic which will detail the number of
Company common stock purchased for you on the preceding Purchase Date, the price paid per share and
any remaining cash balance in your account. The remaining cash balance will be refunded to you
following the purchase of shares.

Withdrawing from the IESPP

You may withdraw from the IESPP at any time by submitting an ESPP Change Form to the Stock
Administration Department no later than 30 days prior to the Purchase Date. The ESPP Change Form
is available on the Stock Administration web site located on the Company’s intranet. Your
accumulated funds will be returned to you without interest unless the laws of your country require
otherwise as soon as practicable after your notice of withdrawal has been received and processed.
After withdrawal, you may not re-enroll in the same Offering Period, although you may enroll in
future Offering Periods by completing an IESPP Subscription Agreement and submitting it to the
Stock Administration Department during a later enrollment period.

If you re-enroll after withdrawal, your Purchase Price is determined on the Enrollment Date of the
new Offering Period.

-11-

 

Termination of Plan Participation/Participation While on a Leave of Absence

Your eligibility to participate in an Offering Period under the IESPP is dependent on your
maintaining continuous status as a regular employee scheduled to work at least 20 hours per week
during the Offering Period. If the number of hours you are scheduled to work drops below 20 hours
per week, you will be deemed to have withdrawn from the Plan.

However, generally you may continue to participate in the Plan during a leave of absence which is
approved by your Employer Subsidiary. Unless you receive regular straight time earnings during a
leave of absence you will not make contributions to the IESPP during your leave. Contributions
made to the IESPP prior to an approved leave of absence will be used to purchase stock at the end
of the Purchase Period. Payroll deductions will resume at the time you return to active status.
If you wish to discontinue participation in the Plan you must notify the Stock Administration
Department as soon as you return to active status.

If your employment with the Company or any of its subsidiaries terminates for any reason prior to
the last business day of the purchase period, then all payroll deductions which you have
contributed, but which have not yet been used to purchase stock, will be returned to you without
interest.

Notwithstanding the above, your transfer from one Employer Subsidiary to another Employer
Subsidiary or to the parent Company shall not alone be considered a break in your continuous status
as a regular employee. In the event of such a transfer, however, your participation in the IESPP
would be subject to the Country Addendum applicable to your new Employer Subsidiary or to the terms
of the Company Employee Stock Purchase Plan if to the parent Company.

Designating Your Beneficiary

You may designate one or more beneficiaries in your IESPP Subscription Agreement to receive
your unused payroll deductions in the event of your death, which will be paid without interest,
unless required by local law. You may change your beneficiary at any time by submitting a revised
IESPP Subscription Agreement to the Stock Administration Department. If no living beneficiary is
designated, payment of contributions or delivery of the share certificate, as the case may be, will
be made to your estate.

Laws governing the disposition of decedent’s property vary widely from country to country. It is
highly recommended that you consult with your own independent legal counsel to make certain that
you have taken all necessary steps to ensure that your desired disposition of undistributed Company
common stock and payroll deductions in the event of your death can be accomplished.

-12-

 

Nonassignability

Unless where otherwise required under local law, none of your rights or accumulated payroll
deductions under the IESPP may be pledged, assigned, transferred or otherwise disposed of for any
reason (other than by will or the laws of descent and distribution). Any such attempt may be
treated by the Company as an election to withdraw from the IESPP.

Administration of the IESPP

The IESPP is currently administered by the Company Board or a designated committee of the
Board. All questions of interpretation or application of the IESPP are determined in the sole
discretion of the Company Board (or its duly authorized committee) and its decisions are final and
binding upon all participants. Members of the Board who are eligible employees are permitted to
participate in the Plan but may not vote on any matter affecting the administration of the Plan.
No member of the Board who is eligible to participate in the Plan may be a member of the committee
appointed by the Board to administer the Plan. No charges for administrative or other costs may be
made against the payroll deductions of a participant in the IESPP. Members of the Board of
Directors receive no additional compensation for their services in connection with the
administration of the IESPP.

Subject to such rules, procedures and instructions as may be adopted by the Company Board, each
participating Employer Subsidiary shall be responsible for making all payroll deductions (including
related withholding and social insurance contributions) for its participating employees, for filing
and distributing all reports and disclosures that may be required under local law, and for
otherwise ensuring compliance with all applicable local laws relating to administration of the
IESPP.

Amendment and Termination of the IESPP

The Company Board may at any time amend or terminate the IESPP or any particular Country
Addendum, or withdraw an Employer Subsidiary from the IESPP, except that such amendment or
termination will not adversely affect your participation in an Offering Period for which you are
already enrolled. Without regard to whether any participant rights may be considered to have been
“adversely affected,” the Company Board shall be entitled to change the Offering Periods, limit the
frequency and/or number of changes in the amount withheld during an Offering Period, establish the
exchange ratio applicable to amounts withheld in a currency other than U.S. dollars, permit payroll
withholding in excess of the amount designated by a participant in order to adjust for delays or
mistakes in the processing of properly completed withholding elections, establish reasonable
waiting and adjustment periods and/or accounting and crediting procedures to ensure that amounts
applied toward the purchase of Company common stock for each participant properly correspond with
amounts withheld from the participant’s compensation and establish such other limitations or
procedures as the Company Board determines in its sole discretion advisable which are consistent
with the IESPP.

-13-

 

Capital Changes

If the number of Company common stock outstanding is increased or decreased by way of stock
split, stock dividend or otherwise (but not including conversion of any convertible debentures),
appropriate adjustments will be made in the number of shares subject to purchase under the IESPP
and in the Purchase Price per share.

In the event of the proposed dissolution or liquidation of the Company, the Offering Period then in
progress will terminate immediately prior to such dissolution or liquidation unless otherwise
provided by the Company Board. In the event of the proposed sale of all or substantially all of
the assets of the Company or the merger of the Company with or into another corporation, each
participant’s rights under the IESPP will be assumed or an equivalent right will be substituted by
the successor corporation, unless the Company Board determines, in its discretion, to accelerate
the Purchase Date(s) for all current participants.

The Company Board may also make provisions for adjusting the number of shares subject to the IESPP
and the Purchase Price per share in the event the Company effects one or more reorganizations,
recapitalizations, right’s offerings or other increases or reductions of shares of the Company’s
outstanding common stock.

Conditions upon Issuance of Company Common Stock

Company common stock shall not be issued to you under this IESPP unless the exercise of your
option to purchase such Company common stock and the issuance and delivery of such Company common
stock pursuant thereto shall comply with all applicable provisions of law, domestic or foreign,
including, without limitation, the Securities Act of 1933, as amended, the Securities Exchange Act
of 1934, as amended, the rules and regulations promulgated thereunder, and the requirements of any
stock exchange upon which the Company common stock may then be listed, and shall be further subject
to the approval of counsel for the Company with respect to such compliance.

Designation of Employer Subsidiaries and Country Addendum

The Company Board may designate any subsidiary of the Company as a participating Employer
Subsidiary in the IESPP. The Company Board may, in addition, modify one or more provisions of the
IESPP solely as it applies to such Employer Subsidiary. The applicable modified Country Addendum
shall be attached to the copy of the IESPP distributed to the Eligible Employees of the applicable
Employer Subsidiary.

-14-

 

Third Party Fiduciaries

Certain countries may prohibit employees from directly owning Company common stock purchased
on their behalf under the IESPP. If local law so requires or if the Company Board determines that
distribution of proceeds could not be accomplished without undue liability or expense to either the
Company or your Employer Subsidiary, your Employer Subsidiary may provide for maintenance of the
accounts with a third party fiduciary for your benefit. Please refer to your applicable Country
Addendum to determine whether such arrangements apply to you.

Notices

Any notice or other communication from you to the Company in connection with the IESPP shall
be considered properly given only if and when it is received in the form specified by the Company
at the following location:

LSI Logic Corporation

Stock Administration

1621 Barber Lane

Mail Stop D-206

Milpitas, California 95035

Any notice or other communication from you to your Employer Subsidiary in connection with the IESPP
shall be considered properly given only if and when it is received in the form specified by the
Employer Subsidiary at the location designated in the attached Country Addendum.

The Employer Subsidiary and the Company may at any time change such notice addresses upon prior
written notice to you.

-15-

 

Tax Consequences

Tax Implications of Purchasing and Selling Your Company Common Stock

The Country Addendum applicable to you provides a brief summary of general rules regarding the
tax consequences in the country in which you are employed. The Country Addendum does not purport
to be a complete description of all tax implications of participation in the IESPP, nor does it
purport to discuss the income tax implications of the IESPP under the laws of each state, province,
district or local government in which you may reside or otherwise be subject to tax.

Withholding and Employee-Paid Social Insurance

Certain countries treat as taxable compensation the excess of the fair market value of the
Company common stock on the Purchase Date over the Purchase Price. Certain countries also treat as
taxable gain some or all of the excess, if any, of the sale price over the fair market value of the
Company common stock as of the Purchase Date. (See your applicable Country Addendum for more
information.)

Some of those countries also require that the Employer Subsidiary withhold and remit sums on behalf
of the employee in respect of income taxes and/or social insurance contributions. Any income,
social or other taxes imposed on you for the income arising from your participation in this IESPP
will be your responsibility.

The means by which this tax is satisfied will require that you pay all sums to the Employer
Subsidiary upon the purchase of Company common stock under the IESPP, regardless of when you sell
all or a portion of the Company common stock. The attached Country Addendum will describe the
mechanism by which such economic burden is passed to you.

You are strongly urged to consult your own tax advisor concerning the application of the various
tax laws that may apply to your particular situation.

-16-

 

Other Information

Obtaining Additional Information

Upon written or oral request to the Company, you may obtain copies, without charge, of any of
the following documents, which are incorporated by reference:

	 	•	 	The Company’s Annual Report on Form 10-K for the most recent fiscal year;
	 
	 	•	 	The Company’s definitive Proxy Statement for the Company’s most recent Annual
Meeting of Stockholders;
	 
	 	•	 	The Company’s Quarterly Report(s) on Form 10-Q for the quarter(s) ended since
the end of the Company’s most recent fiscal year;
	 
	 	•	 	The description of the Company common stock contained in the Company’s
Registration Statement on Form 8-A filed with the Securities and Exchange Commission of
August 29, 1989;
	 
	 	•	 	All documents filed by the Company pursuant to Sections 13, 14 and 15(d) of the
Securities Exchange Act of 1934 after the date of the Registration Statement under which
securities described herein are registered.

In addition, upon written or oral request to the Company, you may obtain a copy, without charge, of
the Company’s most recent Annual Report to Stockholders.

Requests for any of the documents described above should be directed to:

LSI Logic Corporation

Investor Relations

1621 BarberLane.

Mail Stop D-115

Milpitas, California 95035

Phone 01 408 433 6777

For further information concerning the IESPP, contact the LSI Logic Corporation Stock
Administration Department.

-17-exv10w8

 

Exhibit 10.8

LSI LOGIC CORPORATION

EMPLOYEE STOCK PURCHASE PLAN

Amended and Restated

     The following constitutes the provisions of the Employee Stock Purchase Plan (the “Plan”) of
LSI Logic Corporation amended and restated effective March 31, 1999.

1. PURPOSE. The purpose of the Plan is to provide employees of the Company and its Designated
Subsidiaries with an opportunity to purchase Common Stock of the Company through accumulated
payroll deductions. It is the intention of the Company that the Plan qualify as an “Employee Stock
Purchase Plan” under Section 423 of the Internal Revenue Code of 1986, as amended. The provisions
of the Plan shall, accordingly, be construed so as to extend and limit participation in a manner
consistent with the requirements of that section of the Code.

2. DEFINITIONS.

     (a) “Board” means the Board of Directors of the Company, or to the extent
authorized by the Board, a Committee of the Board.

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

     (c) “Common Stock” means the common stock of the Company.

     (d) “Company” means LSI Logic Corporation and any Designated Subsidiary of the Company.

     (e) “Compensation” means all regular and recurring straight time earnings, payments for
overtime, shift premium, incentive compensation, incentive payments, bonuses, commissions, but
exclusive of other compensation.

     (f) “Designated Subsidiary” means any Subsidiary which has been designated by the Board from
time to time in its sole discretion as eligible to participate in the Plan.

     (g) “Employee” means any individual who is an Employee of the Company for tax purposes whose
customary employment with the Company is at least 20 hours per week and more than five months in a
calendar year. For purposes of the Plan, the employment relationship will be treated as continuing
intact while the individual is on sick leave or other leave of absence approved in writing by the
Company. Where the period of leave exceeds 90 days and the individual’s right to reemployment is
not guaranteed either by statute or by contract, the employment relationship shall be deemed to
have terminated on the 91st day of such leave. It shall not include any independent contractors
providing services to the Company or its Subsidiaries, regardless of the length of such service.

     (h) “Enrollment Date” means the first Trading Day of each Offering Period.

     (i) “Exercise Date” means the last Trading Day of each Purchase Period.

1

 

     (j) “Fair Market Value” means, as of any date, the value of the Common Stock determined as
follows:

          (1) If the Common Stock is listed on any established stock exchange or a national market
system, its Fair Market Value shall be the closing sales price for such stock (or the closing bid,
if no sales were reported) as quoted on such exchange or system for the last market trading day on
the date of such determination, as reported by The Wall Street Journal or such other source as the
Board deems reliable;

          (2) If the Common Stock is regularly quoted by a recognized securities dealer but selling
prices are not reported, its Fair Market Value shall be the mean of the closing bid and asked
prices for the Common Stock on the date of such determination, as reported by The Wall Street
Journal or such other source as the Board deems reliable; or

          (3) In the absence of an established market for the Common Stock, the Fair Market Value shall
be determined in good faith by the Board.

     (k) “Offering Periods” means a period of approximately 12 months during which an option
granted pursuant to the Plan may be exercised as further described in Section 4 The duration and
timing of Offering Periods may be changed pursuant to Sections 4 and 20 of this Plan.

     (l) “Plan” means this Amended and Restated Employee Stock Purchase Plan.

     (m) “Purchase Period” means the approximately six-month period commencing after one Exercise
Date and ending with the next Exercise Date, except that the first Purchase Period of any Offering
Period will commence on the Enrollment Date and end with the next Exercise Date.

     (n) “Purchase Price” means 85% of the Fair Market Value of a share of Common Stock on the
Enrollment Date or on the Exercise Date, whichever is lower; provided, however, that with respect
to the Offering Periods commencing on or after January 1, 1999, unless otherwise directed by the
Board, if the Fair Market Value of a share of Common Stock on the date on which additional shares
of Common Stock (the “New Shares”) are authorized for issuance hereunder by the Company’s
stockholders (the “Authorization Date”) is higher than the Fair Market Value of a share of Common
Stock on the Enrollment Date of any outstanding Offering Period that commenced prior to the
Authorization Date, the Purchase Price for only New Shares to be issued on any remaining Exercise
Date of any Offering Period in effect on the Authorization Date shall be 85% of the Fair Market
Value of a share of Common Stock on the Authorization Date or on the Exercise Date, whichever is
lower. The Purchase Price may be adjusted by the Board pursuant to Section 20.

     (o) “Reserves” means the number of shares of Common Stock covered by each option under the
Plan which have not yet been exercised and the number of shares of Common Stock that have been
authorized for issuance under the Plan but not yet placed under option.

     (p) “Subsidiary” means any corporation, domestic or foreign, of which not less than 50% of the
voting shares are held by the Company or a Subsidiary, whether or not such corporation now exists
or is hereafter organized or acquired by the Company or a Subsidiary.

2

 

     (q) “Trading Day” means a day on which national stock exchanges and the Nasdaq System are open
for trading.

3. ELIGIBILITY.

     (a) Any Employee who is employed by the Company on a given Enrollment Date shall be eligible
to participate in the Plan, subject to the requirements of Section 5(a) and the limitations imposed
by Section 423(b) of the Code.

     (b) Any provisions of the Plan to the contrary notwithstanding, no Employee shall be granted
an option under the Plan (i) to the extent that, immediately after the grant, such Employee (or any
other person whose stock ownership would be attributed to such Employee pursuant to Section 424(d)
of the Code) would own capital stock and/or hold outstanding options to purchase shares possessing
five percent or more of the total combined voting power or value of all classes of the capital
stock of the Company or of any Subsidiary, or (ii) to the extent that his or her rights to purchase
stock under all employee stock purchase plans (described in Section 423 of the Code) of the Company
and its Subsidiaries accrue (i.e., become exercisable) at a rate which exceeds $25,000 worth of
stock (determined at the fair market value of the shares at the time such option is granted) for
each calendar year in which such option is outstanding at any time.

4. OFFERING PERIODS. The Plan shall be implemented by consecutive, overlapping Offering Periods
with a new Offering Period commencing on the first Trading Day on or after May 15 and November 15
each year, or on such other date as the Board shall determine, and continuing thereafter until
terminated in accordance with Section 20 hereof, except as set forth in this Section 4. The first
Offering Period of the Plan as amended and restated shall commence with the first Trading Day on or
after May 15, 1999 and end on the last Trading Day on or before May 14, 2000. The Offering Period
which began on October 1, 1998 will end on September 29, 2000 and an Offering Period shall commence
on October 1, 2000 and end on November 14, 2000. The Board shall have the power to change the
duration of Offering Periods (including the commencement dates thereof) with respect to future
offerings without stockholder approval, if such change is announced prior to the scheduled
beginning of the first Offering Period to be affected thereafter.

5. PARTICIPATION.

     (a) An eligible Employee may become a participant in the Plan by completing a subscription
agreement authorizing payroll deductions in the form provided by the Company and filing it with the
Company payroll office prior to the applicable Enrollment Date, unless a later time for filing the
subscription agreement is set for all eligible Employees with respect to such Offering Period.

     (b) Payroll deductions for a participant shall commence with the first payroll following the
Enrollment Date and shall end on the last payroll for the Offering Period to which the subscription
agreement applies, unless sooner terminated by the participant as provided in Section 10.

3

 

6. PAYROLL DEDUCTIONS.

     (a) At the time a participant files his or her subscription agreement, he or she shall elect
to have payroll deductions made on each payday during all subsequent Offering Periods in an amount
not exceeding 15%, or such other rate as may be determined from time to time by the Board,
expressed as a whole percent, of the Compensation which he or she receives on such payday during
said Offering Period and the aggregate of such deduction during the Offering Period shall not
exceed 15%, as applicable in accordance with the foregoing, of the aggregate Compensation during
such Offering Period.

     (b) All payroll deductions authorized by a participant shall be credited to his or her account
under the Plan and shall be withheld in whole percentages only. A participant may not make any
additional payments into such account.

     (c) A participant may discontinue his or her participation in the Plan as provided in Section
10, or may decrease the rate of his or her payroll deductions (but not below 1%) effective
immediately or may increase (but not above 15%) the rate of his payroll deductions effective as of
the first date of the next Purchase Period within such Offering Period by completing and filing
with the Company a new subscription agreement authorizing a change in payroll deduction. The Board
may, in its discretion, limit the number of participation rate changes during any Offering Period.
The change in rate shall be effective as soon as administratively feasible following the Company’s
receipt of the new authorization. A participant’s subscription agreement shall remain in effect
for successive Offering Periods unless terminated as provided in Section 10.

     (d) Notwithstanding the foregoing, to the extent necessary to comply with Section 423(b)(8) of
the Code and Section 3(b) of the Plan, a participant’s payroll deductions may be automatically
decreased to zero percent at any time during a Purchase Period. Payroll deductions shall
recommence at the rate provided in such participant’s subscription agreement at the beginning of
the first Purchase Period which is scheduled to end in the following calendar year, unless
terminated by the participant as provided in Section 10.

     (e) At the time the option is exercised, in whole or in part, or at the time some or all of
the Company’s Common Stock issued under the Plan is disposed of, the participant must make adequate
provision for the Company’s federal, state or other tax withholding obligations, if any, which
arise on the exercise of the option or the disposition of the Common Stock. At any time the
Company may, but shall not be obligated to, withhold from the participant’s compensation the amount
necessary for the Company to meet applicable withholding obligations, including any withholding
required to make available to the Company any tax deductions or benefits attributable to sale or
early disposition of Common Stock by the Employee.

7. GRANT OF OPTION. On each Enrollment Date of each Offering Period, each eligible Employee
participating in such Offering Period shall be granted an option to purchase on each Exercise Date
during such Offering Period (at the applicable Purchase Price) up to a number of full shares of the
Company’s Common Stock determined by dividing such Employee’s payroll deductions accumulated for
that Exercise Date and retained in the Employee’s account as of the Exercise Date by the applicable
Purchase Price; provided that in no event shall an Employee be

4

 

permitted to purchase more than
1,000 shares in each Purchase Period within each Offering Period, provided further that such
purchase shall be subject to the limitations set forth in Sections 3(b) and 13. The Board may, for
future Offering Periods, increase or decrease, in its absolute discretion, the maximum number of
shares of the Company’s Common Stock an Employee may purchase during each Purchase Period of such
Offering Period. Exercise of the option shall occur as provided in Section 8, unless the
participant has withdrawn pursuant to Section 10. The option shall expire on the last day of the
Offering Period.

8. EXERCISE OF OPTION.

     (a) Unless a participant withdraws from the Offering Period as provided in Section 10, his or
her option for the purchase of shares will be exercised automatically on the Exercise Date, and the
maximum number of full shares subject to option will be purchased at the applicable Purchase Price
with the accumulated payroll deductions in his or her account. For this purpose, only payroll
deductions from payroll dates that are more than three business days before an Exercise Date will
be applied to the purchase of shares on that Exercise Date. Payroll deductions from payroll dates
that occur on an Exercise Date or within three business days before an Exercise Date will be
applied to the purchase of shares on the next following Exercise Date. In any event, no fractional
shares will be purchased. Any payroll deductions accumulated in a participant’s account that are
not sufficient to purchase a full share or that exceed the $25,000 cap described in Section 3 above
will be refunded to the participant following the purchase of shares, subject to earlier withdrawal
by the participant as provided in Section 10 or unless the Offering Period has been
over-subscribed, in which event such amount shall be refunded to the participant. During his or
her lifetime, a participant’s option to purchase shares hereunder is exercisable only by the
participant.

     (b) If the Board determines that, on a given Exercise Date, the number of shares with respect
to which options are to be exercised may exceed (i) the number of shares of Common Stock that were
available for sale under the Plan on the Enrollment Date of the applicable Offering Period, or (ii)
the number of shares available for sale under the Plan on such Exercise Date, the Board may in its
sole discretion provide that the Company shall make a pro rata allocation of the shares of Common
Stock available for purchase on such Enrollment Date or Exercise Date, as applicable, in as uniform
a manner as shall be practicable and as it shall determine in its sole discretion to be equitable
among all participants exercising options to purchase Common Stock on such Exercise Date, and (x)
continue all Offering Periods then in effect, or (y) terminate any or all Offering Periods then in
effect pursuant to Section 20. The Company may make pro rata allocation of the shares available on
the Enrollment Date of any applicable Offering Period pursuant to the preceding sentence,
notwithstanding any authorization of additional shares for issuance under the Plan by the Company’s
stockholders subsequent to such Enrollment Date.

9. DELIVERY. As promptly as practicable after each Exercise Date on which a purchase of shares
occurs, the Company shall arrange for the shares purchased upon exercise of his or her option to be
electronically credited to the participant’s brokerage account at the securities brokerage firms
designated by the Company for its direct deposit program from time to time.

5

 

10. WITHDRAWAL; TERMINATION OF EMPLOYMENT.

     (a) A participant may withdraw all, but not less than all, the payroll deductions credited to
his or her account and not yet used to exercise his or her option under the Plan at any time by
giving written notice to the Company on a form provided for such purpose. All of the participant’s
payroll deductions credited to his or her account will be paid to the participant as soon as
practicable after receipt of the notice of withdrawal, his or her option for the current Offering
Period will be automatically canceled, and no further payroll deductions for the purchase of shares
will be made during such Offering Period. If a participant withdraws from an Offering Period,
payroll deductions shall not resume at the beginning of the succeeding Offering Period unless the
participant delivers to the Company a new subscription agreement.

     (b) A participant’s withdrawal from an Offering Period will not have any effect upon his or
her eligibility to participate in a succeeding Offering Period which begins after the end of the
Offering Period from which the participant withdraws or in any similar plan which may hereafter be
adopted by the Company.

11. TERMINATION OF EMPLOYMENT. Upon a participant’s ceasing to be an Employee for any reason,
including retirement or death, he or she will be deemed to have elected to withdraw from the Plan
and the payroll deductions accumulated in his or her account during the Offering Period but not yet
used to exercise the option will be returned to him or her as soon as practicable after such
termination or, in the case of death, to the person or persons entitled thereto under Section 15,
and his or her option will be automatically terminated. The preceding sentence notwithstanding, a
participant who receives payment in lieu of notice of termination of employment shall be treated as
continuing to be an Employee for the participant’s customary number of hours per week of employment
during the period in which the participant is subject to such payment in lieu of notice. In the
case of death of the participant, the payroll deductions credited to the participant’s account will
be paid to the person or persons entitled thereto under paragraph 15, and such participant’s option
will be automatically terminated.

12. INTEREST. No interest shall accrue on the payroll deductions of a participant in the Plan.

13. STOCK.

     (a) Subject to adjustment upon changes in capitalization of the Company as provided in Section
19, the maximum number of shares of the Company’s Common Stock which shall be reserved for sale
under the Plan shall be 78,314,110 shares, plus an annual increase to be added as of the first day
of each fiscal year by an amount equal to (x) 1.15% of the shares of the Company’s Common Stock
issued and outstanding on the last day of the immediately preceding fiscal year less (y) the number
of shares available for future option grants under the Plan on the last
day of the immediately preceding fiscal year, or a lesser amount determined by the Board, but not
to exceed 3,000,000 shares (subject to any adjustment pursuant to Section 19) in any fiscal year.

     (b) The participant will have no interest or voting rights in shares covered by his or her
option until such option has been exercised.

6

 

     (c) Shares to be delivered to a participant under the Plan shall be registered in the name of
the participant or in the name of the participant and his or her spouse.

14. ADMINISTRATION. The Plan shall be administered by the Board or a committee of members of the
Board appointed by the Board. The Board or its committee shall have full and exclusive
discretionary authority to construe, interpret and apply the terms of the Plan, to determine
eligibility and to adjudicate all disputed claims filed under the Plan. Every finding, decision
and determination made by the Board or its committee shall, to the full extent permitted by law, be
final and binding upon all parties.

15. DESIGNATION OF BENEFICIARY.

     (a) A participant may file a written designation of a beneficiary who is to receive shares
and/or cash, if any, from the participant’s account under the Plan in the event of such
participant’s death at a time when cash or shares are held for his or her account. If the
participant is married and the designated beneficiary is not the spouse, spousal consent shall be
required for such designation to be effective.

     (b) Such designation of beneficiary may be changed by the participant at any time by written
notice. In the event of the death of a participant in the absence of a valid designation of a
beneficiary who is living at the time of such participant’s death, the Company shall deliver such
shares and/or cash to the executor or administrator of the estate of the participant; or if no such
executor or administrator has been appointed (to the knowledge of the Company), the Company, in its
discretion, may deliver such shares and/or cash to the spouse or to any one or more dependents or
relatives of the participant, or if no spouse, dependent or relative is known to the Company, then
to such other person as the Company may reasonably designate.

16. TRANSFERABILITY. Neither payroll deductions credited to a participant’s account nor any rights
with regard to the exercise of an option or to receive shares under the Plan may be assigned,
transferred, pledged or otherwise disposed of in any way (other than by will, the laws of descent
and distribution, or as provided in Section 15 hereof) by the participant. Any such attempt at
assignment, transfer, pledge or other disposition shall be without effect, except that the Company
may treat such act as an election to withdraw funds in accordance with Section 10.

17. USE OF FUNDS. All payroll deductions received or held by the Company under the Plan may be
used by the Company for any corporate purpose, and the Company shall not be obligated to segregate
such payroll deductions.

18. REPORTS. Individual accounts will be maintained for each participant in the Plan. Statements
of account will be given to participating Employees at least annually, and will set forth the
amounts of payroll deductions, the Purchase Price, the number of shares purchased and the remaining
cash balance to be refunded, if any.

7

 

19. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION.

     (a) Changes in Capitalization. Subject to any required action by the stockholders of
the Company, the Reserves, the maximum number of shares each participant may purchase each Purchase
Period (under Section 7), as well as the price per share and the number of shares of Common Stock
covered by each option under the Plan that has not yet been exercised, shall be proportionately
adjusted for any increase or decrease in the number of issued shares of Common Stock resulting from
a stock split, reverse stock split, stock dividend, combination or reclassification of the Common
Stock or any other increase or decrease in the number of shares of Common Stock effected without
receipt of consideration by the Company; provided, however, that conversion of any convertible
securities of the Company shall not be deemed to have been “effected without receipt of
consideration.” Such adjustment shall be made by the Board, whose determination in that respect
shall be final, binding and conclusive. Except as expressly provided herein, no issuance by the
Company of shares of stock of any class, or securities convertible into shares of stock of any
class, shall affect, and no adjustment by reason thereof shall be made with respect to, the number
or price of shares of Common Stock subject to option.

     (b) Dissolution or Liquidation. In the event of the proposed dissolution or
liquidation of the Company, the Offering Period then in progress will be shortened by setting a new
Exercise Date (the “New Exercise Date”), and shall terminate immediately prior to the consummation
of such proposed dissolution or liquidation, unless otherwise provided by the Board. The New
Exercise Date shall be before the date of the Company’s proposed dissolution or liquidation. The
Company shall notify each participant in writing at least ten business days prior to the New
Exercise Date, that the Exercise Date for the participant’s option has been changed to the New
Exercise Date and that the participant’s option shall be exercised automatically on the New
Exercise Date, unless prior to such date the participant has withdrawn from the Offering Period as
provided in Section 10.

     (c) Merger or Asset Sale. In the event of a proposed sale of all or substantially all
of the assets of the Company, or the merger of the Company with or into another corporation, each
option under the Plan shall be assumed or an equivalent option shall be substituted by the
successor corporation or a parent or Subsidiary of the successor corporation. If the successor
corporation refuses to assume or substitute for the option, any Purchase Periods then in progress
shall be shortened by setting a new Exercise Date (the “New Exercise Date”) and any Offering
Periods then in progress shall end on the New Exercise Date. The New Exercise Date shall be before
the date of the Company’s proposed sale or merger. The Company shall notify each participant in
writing prior to the New Exercise Date, that the Exercise Date for the participant’s option has
been changed to the New Exercise Date and that the participant’s option will be exercised
automatically on the New Exercise Date, unless prior to such date the participant has withdrawn
from the Offering Period as provided in Section 10.

The Board may, if it so determines in the exercise of its sole discretion, also make provision for
adjusting the Reserves, as well as the price per share of Common Stock covered by each outstanding
option, in the event that the Company effects one or more reorganizations, recapitalizations,
rights offerings or other increases or reductions of shares of its outstanding Common Stock, and in
the event of the Company being consolidated with or merged into any other corporation.

8

 

20. AMENDMENT OR TERMINATION.

     (a) The Board of Directors of the Company may at any time and for any reason terminate or
amend the Plan. Except as provided in Section 19, no such termination will affect options
previously granted, provided that an Offering Period may be terminated by the Board on any Exercise
Date if the Board determines that the termination of the Offering Period or the Plan is in the best
interests of the Company and its stockholders. Except as provided in Section 19 and this Section
20, no amendment may make any change in any option theretofore granted which adversely affects the
rights of any participant. To the extent necessary to comply with Section 423 of the Code (or any
successor rule or provision or any other applicable law, regulation or stock exchange rule), the
Company shall obtain stockholder approval in such a manner and to such a degree as required.

     (b) Without stockholder consent and without regard to whether any participant rights may be
considered to have been “adversely affected,” the Board shall be entitled to change the Offering
Periods, limit the frequency and/or number of changes in the amount withheld during an Offering
Period, establish the exchange ratio applicable to amounts withheld in a currency other than U.S.
dollars, permit payroll withholding in excess of the amount designated by a participant in order to
adjust for delays or mistakes in the Company’s processing of properly completed withholding
elections, establish reasonable waiting and adjustment periods and/or accounting and crediting
procedures to ensure that amounts applied toward the purchase of Common Stock for each participant
properly correspond with amounts withheld from the participant’s Compensation and establish such
other limitations or procedures as the Board determines in its sole discretion advisable which are
consistent with the Plan.

     (c) In the event the Board determines that the ongoing operation of the Plan may result in
unfavorable financial accounting consequences, the Board may, in its discretion and, to the extent
necessary or desirable, modify or amend the Plan to reduce or eliminate such accounting consequence
including, but not limited to:

          (i) altering the Purchase Price for any Offering Period including an Offering Period underway
at the time of the change in Purchase Price;

          (ii) shortening any Offering Period so that the Offering Period ends on a new Exercise Date,
including an Offering Period underway at the time of the Board action; and

          (iii) allocating shares.

Such modifications or amendments shall not require stockholder approval or the consent of any Plan
participants.

21. NOTICES. All notices or other communications by a participant to the Company in connection
with the Plan shall be deemed to have been duly given when received in the form specified by the
Company at the location, or by the person, designated by the Company for the

9

 

receipt thereof. Notices given by means of the Company’s intranet or similar system will be deemed to be written
notices under the Plan.

22. CONDITIONS UPON ISSUANCE OF SHARES. Shares shall not be issued with respect to an option
unless the exercise of such option and the issuance and delivery of such shares pursuant thereto
shall comply with all applicable provisions of law, domestic or foreign, including, without
limitation, the Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as
amended, the rules and regulations promulgated thereunder, and the requirements of any stock
exchange upon which the shares may then be listed, and shall be further subject to the approval of
counsel for the Company with respect to such compliance.

As a condition to the exercise of an option, if required by applicable securities laws, the Company
may require the participant for whose account the option is being exercised to represent and
warrant at the time of such exercise that the shares are being purchased only for investment and
without any present intention to sell or distribute such shares if, in the opinion of counsel for
the Company, such a representation is required by any of the aforementioned applicable provisions
of law.

23. TERM OF PLAN. The Plan shall become effective upon the earlier to occur of its adoption by the
Board of Directors of the Company or it is approved by the stockholders. It shall continue in
effect for a term of 10 years unless sooner terminated under Section 20.

24. EMPLOYMENT RELATIONSHIP Nothing in the Plan shall be construed as creating a contract for
employment for any period or shall interfere with or limit in any way the right of the Company or
of any Subsidiary to terminate any participant’s employment relationship at any time, with or
without cause, nor confer upon any participant any right to continue in the employ of the Company
or any Subsidiary.

10

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