Document:

exv10w05

 

EXHIBIT 10.05

SYMANTEC CORPORATION

1996 EQUITY INCENTIVE PLAN

(Amended August 21, 2003)

     1. Purpose. The purpose of this Plan is to provide incentives to attract, retain and motivate
eligible persons whose present and potential contributions are important to the success of the
Company, its Parent, Subsidiaries and Affiliates, by offering them an opportunity to participate in
the Company’s future performance through awards of Options and Restricted Stock Awards. Capitalized
terms not defined in the text are defined in Section 23.

     2. Shares Subject to the Plan.

     2.1 Number of Shares Available. Subject to Sections 2.2 and 18, the total number of Shares
reserved and available for grant and issuance pursuant to this Plan will be 48,872,204 Shares, of
which no more than ten percent (10%) shall be issued as Restricted Stock Awards. Subject to
Sections 2.2 and 18, Shares that: (a) are subject to issuance upon exercise of an Option but cease
to be subject to such Option for any reason other than exercise of such Option; (b) are subject to
an Award granted hereunder but are forfeited or are repurchased by the Company at the original
issue price; or (c) are subject to an Award that otherwise terminates without Shares being issued;
will again be available for grant and issuance in connection with future Awards under this Plan. At
all times the Company shall reserve and keep available a sufficient number of Shares as shall be
required to satisfy the requirements of all outstanding Options granted under this Plan and all
other outstanding but unvested Awards granted under this Plan.

     2.2 Adjustment of Shares. In the event that the number of outstanding Shares is changed by a
stock dividend, recapitalization, stock split, reverse stock split, subdivision, combination,
reclassification or similar change in the capital structure of the Company without consideration,
then (a) the number of Shares reserved for issuance under this Plan, (b) the Exercise Prices of and
number of Shares subject to outstanding Options, and (c) the Purchase Price and number of Shares
subject to other outstanding Awards, including Restricted Stock Awards, will be proportionately
adjusted, subject to any required action by the Board or the stockholders of the Company and
compliance with applicable securities laws; provided, however, that fractions of a Share will not
be issued but will either be replaced by a cash payment equal to the Fair Market Value of such
fraction of a Share or will be rounded up to the nearest whole Share, as determined by the
Committee.

     3. Eligibility. ISOs (as defined in Section 5 below) may be granted only to employees
(including officers and directors who are also employees) of the Company or of a Parent or
Subsidiary of the Company. All other Awards may be granted to employees, officers, directors,
consultants, independent contractors and advisors of the Company or any Parent, Subsidiary or
Affiliate of the Company; provided such consultants, contractors and advisors render bona fide
services not in connection with the offer and sale of securities in a capital-raising transaction;
and provided further, that unless otherwise determined by the Board, non-employee directors shall
receive Options only pursuant to the formula award provisions set forth in Section 6. No person
will be eligible to receive more than 500,000 Shares in any calendar year under this Plan pursuant
to the grant of Awards hereunder, other than new employees of the Company or of a Parent,
Subsidiary or Affiliate of the Company (including new employees who are also officers and directors
of the Company or any Parent, Subsidiary or Affiliate of the Company) who are eligible to receive
up to a maximum of 800,000 Shares in the calendar year in which they commence their employment. A
person may be granted more than one Award under this Plan.

     4. Administration.

     4.1 Committee Authority. This Plan will be administered by the Committee or by the Board
acting as the Committee. Subject to the general purposes, terms and conditions of this Plan, and to
the direction of the Board, except as provided in Section 6, the Committee will have full power to
implement and carry out this Plan. Without limitation, the Committee will have the authority to:

     (a) construe and interpret this Plan, any Award Agreement and any other agreement or
document executed pursuant to this Plan;

     (b) prescribe, amend and rescind rules and regulations relating to this Plan;

     (c) select persons to receive Awards;

     (d) determine the form and terms of Awards;

     (e) determine the number of Shares or other consideration subject to Awards;

 

 

     (f) determine whether Awards will be granted singly, in combination with, in tandem with,
in replacement of, or as alternatives to, other Awards under this Plan or any other incentive or
compensation plan of the Company or any Parent, Subsidiary or Affiliate of the Company;

     (g) grant waivers of Plan or Award conditions;

     (h) determine the vesting, exercisability and payment of Awards;

     (i) correct any defect, supply any omission or reconcile any inconsistency in this Plan,
any Award or any Award Agreement;

     (j) amend any option agreements executed in connection with this Plan;

     (k) determine whether an Award has been earned; and

     (l) make all other determinations necessary or advisable for the administration of this
Plan.

     4.2 Committee Discretion. Any determination made by the Committee with respect to any Award
will be made in its sole discretion at the time of grant of the Award or, unless in contravention
of any express term of this Plan or Award, at any later time, and such determination will be final
and binding on the Company and on all persons having an interest in any Award under this Plan. The
Committee may delegate to one or more officers of the Company the authority to grant an Award under
this Plan to Participants who are not Insiders of the Company.

     4.3 Section 162(m) Requirements. If two or more members of the Board are Outside Directors,
the Committee will be comprised of at least two (2) members of the Board, all of whom are Outside
Directors.

     5. Options. The Committee may grant Options to eligible persons and will determine whether
such Options will be Incentive Stock Options within the meaning of the Code (“ISOs”) or
Nonqualified Stock Options (“NQSOs”), the number of Shares subject to the Option, the Exercise
Price of the Option, the period during which the Option may be exercised, and all other terms and
conditions of the Option, subject to the following:

     5.1 Form of Option Grant. Each Option granted under this Plan will be evidenced by an Award
Agreement which will expressly identify the Option as an ISO or an NQSO (“Stock Option Agreement”),
and will be in such form and contain such provisions (which need not be the same for each
Participant) as the Committee may from time to time approve, and which will comply with and be
subject to the terms and conditions of this Plan.

     5.2 Date of Grant. The date of grant of an Option will be the date on which the Committee
makes the determination to grant such Option, unless otherwise specified by the Committee. The
Stock Option Agreement and a copy of this Plan will be delivered to the Participant within a
reasonable time after the granting of the Option.

     5.3 Exercise Period. Options will be exercisable within the times or upon the events
determined by the Committee as set forth in the Stock Option Agreement governing such Option;
provided, however, that no Option will be exercisable after the expiration of ten (10) years from
the date the Option is granted; and provided further that no ISO granted to a person who directly
or by attribution owns more than ten percent (10%) of the total combined voting power of all
classes of stock of the Company or of any Parent or Subsidiary of the Company (“Ten Percent
Stockholder”) will be exercisable after the expiration of five (5) years from the date the ISO is
granted. The Committee also may provide for the exercise of Options to become exercisable at one
time or from time to time, periodically or otherwise, in such number of Shares or percentage of
Shares as the Committee determines.

     5.4 Exercise Price. The Exercise Price of an Option will be determined by the Committee when
the Option is granted and may be not less than 100% of the Fair Market Value of the Shares on the
date of grant; provided that the Exercise Price of any ISO granted to a Ten Percent Stockholder
will not be less than 110% of the Fair Market Value of the Shares on the date of grant. Payment for
the Shares purchased may be made in accordance with Section 8 of this Plan.

     5.5 Method of Exercise. Options may be exercised only by delivery to the Company of a written
stock option exercise agreement (the “Exercise Agreement") in a form approved by the Committee
(which need not be the same for each Participant), stating the number of Shares being purchased,
the restrictions imposed on the Shares purchased under such Exercise Agreement, if any, and such
representations and agreements regarding Participant’s investment intent and access to information
and other matters, if any, as may be required or desirable by the Company to comply with applicable
securities laws, together with payment in full of the Exercise Price for the number
of Shares being purchased.

 

 

     5.6 Termination. Notwithstanding the exercise periods set forth in the Stock Option Agreement,
exercise of an Option will always be subject to the following:

     (a) If the Participant is Terminated for any reason except death or Disability, then the
Participant may exercise such Participant’s Options only to the extent that such Options would
have been exercisable upon the Termination Date no later than three (3) months after the
Termination Date (or such shorter or longer time period not exceeding five (5) years as may be
determined by the Committee, with any exercise beyond three (3) months after the Termination
Date deemed to be an NQSO), but in any event, no later than the expiration date of the Options;
provided however, that options granted to non-employee directors pursuant to Section 6 shall
remain exercisable for a period of seven (7) months following the non-employee director’s
termination as a director or consultant of the Company or any Affiliate.

     (b) If the Participant is Terminated because of Participant’s death or Disability (or the
Participant dies within three (3) months after a Termination other than because of Participant’s
death or disability), then Participant’s Options may be exercised only to the extent that such
Options would have been exercisable by Participant on the Termination Date and must be exercised
by Participant (or Participant’s legal representative or authorized assignee) no later than
twelve (12) months after the Termination Date (or such shorter or longer time period not
exceeding five (5) years as may be determined by the Committee, with any such exercise beyond
(a) three (3) months after the Termination Date when the Termination is for any reason other
than the Participant’s death or Disability, or (b) twelve (12) months after the Termination Date
when the Termination is for Participant’s death or Disability, deemed to be an NQSO), but in any
event no later than the expiration date of the Options.

     (c) Notwithstanding anything to the contrary herein, if the Participant is Terminated
because of the Participant’s actual or alleged commitment of a criminal act or an intentional
tort and the Company (or an employee of the Company) is the victim or object of such criminal
act or intentional tort or such criminal act or intentional tort results, in the reasonable
opinion of the Company, in liability, loss, damage or injury to the Company, then, at the
Company’s election, Participant’s Options shall not be exercisable and shall expire upon the
Participant’s Termination Date. Termination by the Company based on a Participant’s alleged
commitment of a criminal act or an intentional tort shall be based on a reasonable investigation
of the facts and a determination by the Company that a preponderance of the evidence discovered
in such investigation indicates that such Participant is guilty of such criminal act or
intentional tort.

     5.7 Limitations on Exercise. The Committee may specify a reasonable minimum number of Shares
that may be purchased on any exercise of an Option, provided that such minimum number will not
prevent Participant from exercising the Option for the full number of Shares for which it is then
exercisable.

     5.8 Limitations on ISOs. The aggregate Fair Market Value (determined as of the date of grant)
of Shares with respect to which ISOs are exercisable for the first time by a Participant during any
calendar year (under this Plan or under any other incentive stock option plan of the Company or any
Affiliate, Parent or Subsidiary of the Company) will not exceed $100,000. If the Fair Market Value
of Shares on the date of grant with respect to which ISOs are exercisable for the first time by a
Participant during any calendar year exceeds $100,000, then the Options for the first $100,000
worth of Shares to become exercisable in such calendar year will be ISOs and the Options for the
amount in excess of $100,000 that become exercisable in that calendar year will be NQSOs. In the
event that the Code or the regulations promulgated thereunder are amended after the Effective Date
of this Plan to provide for a different limit on the Fair Market Value of Shares permitted to be
subject to ISOs, such different limit will be automatically incorporated herein and will apply to
any Options granted after the effective date of such amendment.

     5.9 Modification, Extension or Renewal. The Committee may modify, extend or renew outstanding
Options and authorize the grant of new Options in substitution therefor, provided that (a) any such
action may not, without the written consent of a Participant, impair any of such Participant’s
rights under any Option previously granted. Any outstanding ISO that is modified, extended, renewed
or otherwise altered will be treated in accordance with Section 424(h) of the Code; and (b)
notwithstanding anything to the contrary elsewhere in the Plan, the Company will not reprice
Options issued under the Plan by lowering the Exercise Price of a previously granted Award, by
canceling outstanding Options and issuing replacements, or by otherwise replacing existing Options
with substitute Options with a lower Exercise Price, without prior approval of the Company’s
stockholders.

     5.10 No Disqualification. Notwithstanding any other provision in this Plan, no term of this
Plan relating to ISOs will be interpreted, amended or altered, nor will any discretion or authority
granted under this Plan be exercised, so as to disqualify this Plan under Section 422 of the Code
or, without the consent of the Participant affected, to disqualify any ISO under Section 422 of the
Code.

 

 

     6. Formula for Non-Employee Director Option Grants and Vesting.

     6.1 Grant of Formula Option. Options shall be granted to non-employee directors of the Company
or any Affiliate (“non-employee directors”) during the term of this Plan as follows: (i) to the
extent that a stock option has not already been granted to a non-employee director during the
fiscal year of the Company in which such director becomes a director, a NQSO to purchase 20,000
shares will automatically be granted to such director upon such director’s joining the Board, (ii)
a NQSO to purchase 12,000 shares will be granted to each non-employee director, other than a
non-employee director acting as the Chairman of the Board on the day after the Annual Meeting of
Stockholders, provided that no such grant shall be made to a director within six months of the
initial grant to such director and with the exception that the award grant to a continuing director
following the Annual Meeting of Stockholders in September 2002 shall be 6,000 shares, and (iii) a
NQSO to purchase 20,000 shares will be granted each year to the non-employee director acting as the
Chairman of the Board on the day after the Annual Meeting of Stockholders, provided, that no such
grant shall be made to a director within six months of the initial grant to such director. Only
non-employee directors who are neither an employee of the Company nor the holder of more than one
percent of the Shares or a representative of any such stockholder shall be eligible for a formula
option grant.

     6.2 Exercise Period for Formula Options. A non-employee director may exercise a granted option
in whole or in part for any Vested Shares, as determined in accordance with Section 6.3 hereof;
provided, however, that the option shall expire and terminate on the tenth anniversary of the date
of grant, or earlier in accordance with the provisions of this Plan.

     6.3 Vesting of Formula Options. Twenty-five percent (25%) of the Shares shall vest on the
First Vesting Date, as specified in the Stock Option Grant, with the remaining Shares vesting at
the rate of 2.0833% of the total Shares per month over the subsequent three years (each a
“Succeeding Vesting Date”) provided that the non-employee director provides services to the Company
or a Parent, Subsidiary or Affiliate of the Company on the First Vesting Date and on each
Succeeding Vesting Date thereafter. Shares that are vested pursuant to the vesting schedule set
forth in this Section 6.3 are “Vested Shares” and are exercisable hereunder.

     7. Restricted Stock Awards. A Restricted Stock Award is an offer by the Company to issue to
an eligible person Shares that are subject to restrictions. The Committee will determine to whom
an offer will be made, the number of Shares the person may purchase, the Purchase Price, the
restrictions to which the Shares will be subject, and all other terms and conditions of the
Restricted Stock Award, subject to the following:

     7.1 Restricted Stock Purchase Agreement. All purchases under a Restricted Stock Award will be
evidenced by a written agreement (the “Restricted Stock Purchase Agreement”), which will be in
substantially a form (which need not be the same for each Participant) that the Committee shall
from time to time approve, and will comply with and be subject to the terms and conditions of the
Plan. A Participant can accept a Restricted Stock Award only by signing and delivering to the
Company the Restricted Stock Purchase Agreement, and full payment of the Purchase Price, within
thirty (30) days from the date the Restricted Stock Purchase Agreement was delivered to the
Participant. If the Participant does not accept the Restricted Stock Award in this manner within
thirty (30) days, then the offer of the Restricted Stock Award will terminate, unless the Committee
determines otherwise.

     7.2 Purchase Price. The Purchase Price for a Restricted Stock Award will be determined by the
Committee, and may be less than Fair Market Value (but not less than the par value of the Shares)
on the date the Restricted Stock Award is granted, provided that the Exercise Price of any
Restricted Stock Award to a Ten Percent Stockholder will not be less than 110% of the Fair Market
Value of the Shares on the date of grant. Payment of the Purchase Price must be made in accordance
with Section 8 of this Plan and as permitted in the Restricted Stock Purchase Agreement, and in
accordance with any procedures established by the Company.

     7.3 Terms of Restricted Stock Awards. Restricted Stock Awards will be subject to all
restrictions, if any, that the Committee may impose. These restrictions may be based on completion
of a specified number of years of service with the Company and/or upon completion of the
performance goals as set out in advance in the Participant’s Restricted Stock Purchase Agreement,
which shall be in such form and contain such provisions (which need not be the same for each
Participant) as the Committee shall from time to time approve, and which will comply with and be
subject to the terms and conditions of this Plan. Prior to the grant of a Restricted Stock Award,
the Committee shall: (a) determine the nature, length and starting date of any Performance Period
for the Restricted Stock Award; (b) select from among the Performance Factors to be used to measure
performance goals, if any; and (c) determine the number of Shares that may be awarded to the
Participant. Performance Periods may overlap and a Participant may participate simultaneously with
respect to Restricted Stock Awards that are subject to different Performance Periods and having
different performance goals and other criteria.

 

 

     7.4 Termination During Performance Period. Restricted Stock Awards shall cease to vest
immediately if a Participant is Terminated during a Performance Period for any reason, unless the
Committee determines otherwise, and any unvested Shares subject to such Restricted Stock Awards
shall be subject to the Company’s right to repurchase such Shares, as described in Section 12 of
this Plan, if and as set forth in the applicable Restricted Stock Purchase Agreement.

     8. Payment for Share Purchases.

     8.1 Payment. Payment for Shares purchased pursuant to this Plan may be made in cash (by check)
or, where expressly approved for the Participant by the Committee and where permitted by law:

     (a) by cancellation of indebtedness of the Company to the Participant;

     (b) by surrender of shares that either: (1) have been owned by Participant for more than
six (6) months and have been paid for within the meaning of SEC Rule 144 (and, if such shares
were purchased from the Company by use of a promissory note, such note has been fully paid with
respect to such shares); or (2) were obtained by Participant in the public market;

     (c) by tender of a full recourse promissory note having such terms as may be approved by
the Committee and bearing interest at a rate sufficient to avoid imputation of income under
Sections 483 and 1274 of the Code; provided, however, that Participants who are not employees or
directors of the Company will not be entitled to purchase Shares with a promissory note unless
the note is adequately secured by collateral other than the Shares; provided, further, that the
portion of the Purchase Price equal to the par value of the Shares, if any, must be paid in
cash;

     (d) by waiver of compensation due or accrued to the Participant for services rendered;
provided, further, that the portion of the Purchase Price equal to the par value of the Shares,
if any, must be paid in cash;

     (e) with respect only to purchases upon exercise of an Option, and provided that a public
market for the Company’s stock exists:

     (1) through a “same day sale” commitment from the Participant and a broker-dealer that is a
member of the National Association of Securities Dealers (an
“NASD Dealer”) whereby the
Participant irrevocably elects to exercise the Option and to sell a portion of the Shares so
purchased to pay for the Exercise Price, and whereby the NASD Dealer irrevocably commits upon
receipt of such Shares to forward the Exercise Price directly to the Company; or

     (2) through a “margin” commitment from the Participant and an NASD Dealer whereby the
Participant irrevocably elects to exercise the Option and to pledge the Shares so purchased to
the NASD Dealer in a margin account as security for a loan from the NASD Dealer in the amount of
the Exercise Price, and whereby the NASD Dealer irrevocably commits upon receipt of such Shares
to forward the Exercise Price directly to the Company; or

     (f) by any combination of the foregoing.

     8.2 Loan Guarantees. The Committee may help the Participant pay for Shares purchased under
this Plan by authorizing a guarantee by the Company of a third-party loan to the Participant,
provided the Company has full recourse to the Participant relative to the guarantee.

     9. Withholding Taxes.

     9.1 Withholding Generally. Whenever Shares are to be issued in satisfaction of Awards granted
under this Plan, the Company may require the Participant to remit to the Company an amount
sufficient to satisfy federal, state and local withholding tax requirements prior to the delivery
of any certificate or certificates for such Shares. Whenever, under this Plan, payments in
satisfaction of Awards are to be made in cash, such payment will be net of an amount sufficient to
satisfy federal, state, and local withholding tax requirements.

     9.2 Stock Withholding. When, under applicable tax laws, a Participant incurs tax liability in
connection with the exercise or vesting of any Award that is subject to tax withholding and the
Participant is obligated to pay the Company the amount required to be withheld, the Committee may
allow the Participant to satisfy the minimum withholding tax obligation by electing to have the
Company withhold from the Shares to be issued that number of Shares having a Fair Market Value
equal to the minimum amount required to be withheld, determined on the date
that the amount of tax to be withheld is to be determined (the “Tax Date"). All elections by a
Participant to have Shares withheld for this purpose will be made in writing in a form acceptable
to the Committee.

 

 

     10. Privileges of Stock Ownership.

     10.1 Voting and Dividends. No Participant will have any of the rights of a stockholder with
respect to any Shares until the Shares are issued to the Participant. After Shares are issued to
the Participant, the Participant will be a stockholder and have all the rights of a stockholder
with respect to such Shares, including the right to vote and receive all dividends or other
distributions made or paid with respect to such Shares; provided, that if such Shares are
restricted stock, then any new, additional or different securities the Participant may become
entitled to receive with respect to such Shares by virtue of a stock dividend, stock split or any
other change in the corporate or capital structure of the Company will be subject to the same
restrictions as the restricted stock; provided, further, that the Participant will have no right to
retain such stock dividends or stock distributions with respect to Shares that are repurchased at
the Participant’s original Purchase Price pursuant to Section 12.

     10.2 Financial Statements. The Company will provide financial statements to each Participant
prior to such Participant’s purchase of Shares under this Plan, and to each Participant annually
during the period such Participant has Awards outstanding; provided, however, the Company will not
be required to provide such financial statements to Participants whose services in connection with
the Company assure them access to equivalent information.

     11. Transferability. Awards granted under this Plan, and any interest therein, will not be
transferable or assignable by Participant, and may not be made subject to execution, attachment or
similar process, otherwise than by will or by the laws of descent and distribution or as consistent
with the specific Plan and Award Agreement provisions relating thereto. During the lifetime of the
Participant an Award will be exercisable only by the Participant, and any elections with respect to
an Award, may be made only by the Participant.

     12. Restrictions on Shares. At the discretion of the Committee, the Company may reserve to
itself and/or its assignee(s) in the Award Agreement a right to repurchase a portion of or all
Shares that are not vested held by a Participant following such Participant’s Termination at any
time within ninety (90) days after the later of Participant’s Termination Date and the date
Participant purchases Shares under this Plan, for cash and/or cancellation of purchase money
indebtedness, at the Participant’s original Exercise Price or Purchase Price, as the case may be.

     13. Certificates. All certificates for Shares or other securities delivered under this Plan
will be subject to such stock transfer orders, legends and other restrictions as the Committee may
deem necessary or advisable, including restrictions under any applicable federal, state or foreign
securities law, or any rules, regulations and other requirements of the SEC or any stock exchange
or automated quotation system upon which the Shares may be listed or quoted.

     14. Escrow; Pledge of Shares. To enforce any restrictions on a Participant’s Shares, the
Committee may require the Participant to deposit all certificates representing Shares, together
with stock powers or other instruments of transfer approved by the Committee, appropriately
endorsed in blank, with the Company or an agent designated by the Company to hold in escrow until
such restrictions have lapsed or terminated, and the Committee may cause a legend or legends
referencing such restrictions to be placed on the certificates. Any Participant who is permitted to
execute a promissory note as partial or full consideration for the purchase of Shares under this
Plan will be required to pledge and deposit with the Company all or part of the Shares so purchased
as collateral to secure the payment of Participant’s obligation to the Company under the promissory
note; provided, however, that the Committee may require or accept other or additional forms of
collateral to secure the payment of such obligation and, in any event, the Company will have full
recourse against the Participant under the promissory note notwithstanding any pledge of the
Participant’s Shares or other collateral. In connection with any pledge of the Shares, Participant
will be required to execute and deliver a written pledge agreement in such form as the Committee
will from time to time approve. The Shares purchased with the promissory note may be released from
the pledge on a pro rata basis as the promissory note is paid.

     15. Exchange and Buyout of Awards. The Committee may, at any time or from time to time,
authorize the Company, with the consent of the respective Participants, to issue new Awards in
exchange for the surrender and cancellation of any or all outstanding Awards. The Committee may at
any time buy from a Participant an Award previously granted with payment in cash, Shares (including
restricted stock) or other consideration, based on such terms and conditions as the Committee and
the Participant may agree.

     16. Securities Law and Other Regulatory Compliance. An Award will not be effective unless such
Award is in compliance with all applicable federal and state securities laws, rules and regulations
of any governmental body, and the requirements of any stock exchange or automated quotation system
upon which the Shares may then be listed or

 

 

quoted, as they are in effect on the date of grant of the Award and also on the date of
exercise or other issuance. Notwithstanding any other provision in this Plan, the Company will have
no obligation to issue or deliver certificates for Shares under this Plan prior to: (a) obtaining
any approvals from governmental agencies that the Company determines are necessary or advisable;
and/or (b) completion of any registration or other qualification of such Shares under any state or
federal law or ruling of any governmental body that the Company determines to be necessary or
advisable. The Company will be under no obligation to register the Shares with the SEC or to effect
compliance with the registration, qualification or listing requirements of any state securities
laws, stock exchange or automated quotation system, and the Company will have no liability for any
inability or failure to do so.

     17. No Obligation to Employ. Nothing in this Plan or any Award granted under this Plan will
confer or be deemed to confer on any Participant any right to continue in the employ of, or to
continue any other relationship with, the Company or any Parent, Subsidiary or Affiliate of the
Company or limit in any way the right of the Company or any Parent, Subsidiary or Affiliate of the
Company to terminate Participant’s employment or other relationship at any time, with or without
cause.

     18. Corporate Transactions.

     18.1 Assumption or Replacement of Awards by Successor. In the event of (a) a dissolution or
liquidation of the Company, (b) a merger or consolidation in which the Company is not the surviving
corporation (other than a merger or consolidation with a wholly-owned subsidiary, a reincorporation
of the Company in a different jurisdiction, or other transaction in which there is no substantial
change in the stockholders of the Company or their relative stock holdings and the Awards granted
under this Plan are assumed, converted or replaced by the successor corporation, which assumption
will be binding on all Participants), (c) a merger in which the Company is the surviving
corporation but after which the stockholders of the Company (other than any stockholder which
merges (or which owns or controls another corporation which merges) with the Company in such
merger) cease to own their shares or other equity interests in the Company, (d) the sale of
substantially all of the assets of the Company, or (e) any other transaction which qualifies as a
“corporate transaction” under Section 424(a) of the Code wherein the stockholders of the Company
give up all of their equity interest in the Company (except for the acquisition, sale or transfer
of all or substantially all of the outstanding shares of the Company from or by the stockholders of
the Company), any or all outstanding Awards may be assumed, converted or replaced by the successor
corporation (if any), which assumption, conversion or replacement will be binding on all
Participants, or the successor corporation may substitute equivalent Awards or provide
substantially similar consideration to Participants as was provided to stockholders (after taking
into account the existing provisions of the Awards); provided that all formula option grants,
pursuant to Section 6, shall accelerate and be fully vested upon such merger, consolidation or
corporate transaction. In the event such successor corporation (if any) fails to assume or
substitute Options pursuant to a transaction described in this Subsection 18.1, all Options will
expire on such transaction at such time and on such conditions as the Board shall determine.

     18.2 Other Treatment of Awards. Subject to any greater rights granted to Participants under
the foregoing provisions of this Section 18, in the event of the occurrence of any transaction
described in Section 18.1, any outstanding Awards will be treated as provided in the applicable
agreement or plan of merger, consolidation, dissolution, liquidation, sale of assets or other
“corporate transaction.”

     18.3 Assumption of Awards by the Company. The Company, from time to time, also may substitute
or assume outstanding awards granted by another company, whether in connection with an acquisition
of such other company or otherwise, by either; (a) granting an Award under this Plan in
substitution of such other company’s award; or (b) assuming such award as if it had been granted
under this Plan if the terms of such assumed award could be applied to an Award granted under this
Plan. Such substitution or assumption will be permissible if the holder of the substituted or
assumed award would have been eligible to be granted an Award under this Plan if the other company
had applied the rules of this Plan to such grant. In the event the Company assumes an award granted
by another company, the terms and conditions of such award will remain unchanged (except that the
exercise price and the number and nature of Shares issuable upon exercise of any such option will
be adjusted appropriately pursuant to Section 424(a) of the Code). In the event the Company elects
to grant a new Option rather than assuming an existing option, such new Option may be granted with
a similarly adjusted Exercise Price.

     19. Adoption and Stockholder Approval. This Plan will become effective on the date that it is
adopted by the Board (the “Effective Date”). This Plan shall be approved by the stockholders of the
Company (excluding Shares issued pursuant to this Plan), consistent with applicable laws, within
twelve (12) months before or after the Effective Date. Upon the Effective Date, the Board may grant
Awards pursuant to this Plan; provided, however, that: (a) no Option may be exercised prior to
initial stockholder approval of this Plan; (b) no Option granted pursuant to an increase in the
number of Shares subject to this Plan approved by the Board will be exercised prior to the time
such increase has been approved by the stockholders of the Company; and (c) in the event that
stockholder approval of
this Plan or any amendment increasing the number of Shares subject to this Plan is not
obtained, all Awards granted hereunder will be canceled, any Shares issued pursuant to any Award
will be canceled, and any purchase of Shares hereunder will be rescinded.

 

 

     20. Term of Plan. Unless earlier terminated as provided herein, this Plan will terminate ten
(10) years from the date this Plan is adopted by the Board or, if earlier, the date of stockholder
approval.

     21. Amendment or Termination of Plan. The Board may at any time terminate or amend this Plan
in any respect, including without limitation amendment of Section 6 of this Plan; provided,
however, that the Board will not, without the approval of the stockholders of the Company, amend
this Plan to increase the number of shares that may be issued under this Plan, or change the
designation of employees or class of employees eligible for participation in this Plan.

     22. Nonexclusivity of the Plan. Neither the adoption of this Plan by the Board, the submission
of this Plan to the stockholders of the Company for approval, nor any provision of this Plan will
be construed as creating any limitations on the power of the Board to adopt such additional
compensation arrangements as it may deem desirable, including, without limitation, the granting of
stock options and bonuses otherwise than under this Plan, and such arrangements may be either
generally applicable or applicable only in specific cases.

     23. Definitions. As used in this Plan, the following terms will have the following meanings:

     “Affiliate” means any corporation that directly, or indirectly through one or more
intermediaries, controls or is controlled by, or is under common control with, another
corporation, where “control” (including the terms “controlled by” and “under common control
with”) means the possession, direct or indirect, of the power to cause the direction of the
management and policies of the corporation, whether through the ownership of voting securities,
by contract or otherwise.

     “Award” means any award under this Plan, including any Option or Restricted Stock Award.

     “Award Agreement” means, with respect to each Award, the signed written agreement between
the Company and the Participant setting forth the terms and conditions of the Award.

     “Board” means the Board of Directors of the Company.

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

     “Committee” means the committee appointed by the Board to administer this Plan, or if no
such committee is appointed, the Board.

     “Company” means Symantec Corporation, a corporation organized under the laws of the State
of Delaware, or any successor corporation.

     “Disability” means a disability, whether temporary or permanent, partial or total, within
the meaning of Section 22(e)(3) of the Code, as determined by the Committee.

     “Exercise Price” means the price at which a holder of an Option may purchase the Shares
issuable upon exercise of the Option.

     “Fair Market Value” means, as of any date, the value of a share of the Company’s Common
Stock determined as follows:

     (a) if such Common Stock is then quoted on the Nasdaq National Market, its closing price on
the Nasdaq National Market on the last trading day prior to the date of determination as
reported in The Wall Street Journal;

     (b) if such Common Stock is publicly traded and is then listed on a national securities
exchange, its closing price on the last trading day prior to the date of determination on the
principal national securities exchange on which the Common Stock is listed or admitted to
trading as reported in The Wall Street Journal;

     (c) if such Common Stock is publicly traded but is not quoted on the Nasdaq National Market
nor listed or admitted to trading on a national securities exchange, the average of the closing
bid and asked prices on the last trading day prior to the date of determination as reported in
The Wall Street Journal; or

 

 

     (d) if none of the foregoing is applicable, by the Committee in good faith.

     “Outside Director” shall mean a person who satisfies the requirements of an “outside
director” as set forth in regulations promulgated under Section 162(m) of the Code.

     “Option” means an award of an option to purchase Shares pursuant to Section 5.

     “Parent” means any corporation (other than the Company) in an unbroken chain of
corporations ending with the Company, if at the time of the granting of an Award under this
Plan, each of such corporations other than the Company owns stock possessing 50% or more of the
total combined voting power of all classes of stock in one of the other corporations in such
chain.

     “Participant” means a person who receives an Award under this Plan.

     “Performance Factors” means the factors selected by the Committee from among the following
measures to determine whether the performance goals established by the Committee and applicable
to Awards have been satisfied:

	 	(1)	 	Net revenue and/or net revenue growth;
	 
	 	(2)	 	Earnings before income taxes and amortization and/or earnings before income taxes and
amortization growth;
	 
	 	(3)	 	Operating income and/or operating income growth;
	 
	 	(4)	 	Net income and/or net income growth;
	 
	 	(5)	 	Earnings per share and/or earnings per share growth;
	 
	 	(6)	 	Total stockholder return and/or total stockholder return growth;
	 
	 	(7)	 	Return on equity;
	 
	 	(8)	 	Operating cash flow return on income;
	 
	 	(9)	 	Adjusted operating cash flow return on income;
	 
	 	(10)	 	Economic value added; and
	 
	 	(11)	 	Individual business objectives.

     “Performance Period” means the period of service determined by the Committee, not to exceed
five years, during which years of service or performance is to be measured for Restricted Stock
Awards.

     “Plan” means this Symantec Corporation 1996 Equity Incentive Plan, as amended from time to
time.

     “Purchase Price” means the price to be paid for Shares acquired under this Plan pursuant to
a Restricted Stock Award.

     “Restricted Stock Award” means an award of Shares pursuant to Section 7 of this Plan.

     “Securities Act” means the Securities Act of 1933, as amended.

     “Shares” means shares of the Company’s Common Stock reserved for issuance under this Plan,
as adjusted pursuant to Sections 2 and 18, and any successor security.

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

     “Termination” or “Terminated” means, for purposes of this Plan with respect to a
Participant, that the Participant has for any reason ceased to provide services as an employee,
director, consultant, independent contractor or advisor to the Company or a Parent, Subsidiary
or Affiliate of the Company, except in the case of sick leave, military leave, or any other
leave of absence approved by the Committee, provided that such leave is for a period of not more
than ninety (90) days, or reinstatement upon the expiration of such leave is guaranteed by
contract or statute. The Committee will have sole discretion to determine whether a Participant
has ceased to provide services and the effective date on which the Participant ceased to provide
services (the “Termination Date”).

 

 

Exhibit A

Form of Stock Option Agreement

 

 

SYMANTEC CORPORATION

STOCK OPTION GRANT — TERMS AND CONDITIONS

          1. Grant of Option. Symantec Corporation, a Delaware corporation, (the “Company”), hereby
grants to the optionee named in the Stock Option Grant (the “Optionee”) an option (this “Option”)
to purchase the Total Number of Shares Subject to Option set forth in the Stock Option Grant
(the “Shares”) at the Exercise Price Per Share set forth in the Stock Option Grant (the
“Exercise Price”), subject to all of the terms and conditions set forth in this Terms and
Conditions of Stock Option Grant and the Stock Option Grant (collectively, the “Grant”) and in the
Company’s 1996 Equity Incentive Plan (the “Plan”). If designated as an incentive stock option in
the Stock Option Grant, this Option is intended to qualify as an “incentive stock option” (“ISO”)
within the meaning of Section 422 of the Internal Revenue Code of 1986 (the “Code”). If not so
designated, this Option shall be a nonqualified stock option (“NQSO”).

          2. Exercise Period of Option. Subject to the terms and
conditions set forth in this Grant and in the Plan, Optionee may exercise this Option in whole or
in part for any Vested Shares, as determined in accordance with Section 8 hereof; provided,
however, that this Option shall expire and terminate on the Expiration Date set forth in the Stock
Option Grant (the “Expiration Date”), or earlier, as provided in Section 4 hereof, and must be
exercised, if at all, on or before the Expiration Date.

          3. Restrictions on Exercise. Exercise of this Option is subject to the following limitations:

                    (a) This Option may not be exercised unless such
exercise is in compliance with the Securities Act of 1933, as amended, and all applicable state
securities laws, as they are in effect on the date of exercise.

                    (b) This Option may not be exercised until the Plan, or
any required increase in the number of shares authorized under the Plan, is approved by the
stockholders of the Company.

                    (c) If Optionee is determined by the Company to be an
officer subject to the reporting and other requirements set forth in Section 16 of the Securities
Exchange Act of 1934 and associated regulations (a “Section 16 Officer”), Optionee shall be subject
such additional restrictions upon exercise of this Option and/or sale of shares issued pursuant to
an exercise of this Option as may be established from time to time by the Chairman/CEO of the
Company and/or the Compensation committee of the Company’s Board of Directors.

1.

 

          4. Termination of Option. Except as provided below in this
Section, this Option shall terminate and may not be exercised if Optionee ceases to provide
services as an employee, director,
consultant, independent contractor or advisor to the Company or a Parent, Subsidiary or Affiliate
of the Company (each as defined in the Plan), except in the case of sick leave, military leave, or
any other leave of absence approved by the committee appointed by the Company’s Board of Directors
to administer the Plan (the “Committee”) or by any person designated by the Committee, provided
that such leave is for a period of not more than ninety days, or reinstatement upon the expiration
of such leave is guaranteed by contract or statute. The Committee or its designee will have sole
discretion to determine whether an Optionee has ceased to provide services and the effective date
on which the Optionee ceased to provide services (the “Termination Date”).

                    (a) If Optionee ceases to provide services to the
Company or any Parent, Subsidiary or Affiliate of the Company for any reason except death or
disability, Optionee may exercise this Option to the extent (and only to the extent) that it would
have been exercisable upon the Termination Date, within three months after the Termination Date,
but in any event no later than the Expiration Date.

                    (b) If Optionee ceases to provide services to the
Company or any Parent, Subsidiary or Affiliate of the Company because of the death or disability of
Optionee, within the meaning of Section 22 (e) (3) of the Code, (or the Optionee dies within three
months after the Optionee ceases to provide services other than because of such Optionee’s death or
disability) the Option may be exercised to the extent (and only to the extent) that it would have
been exercisable by Optionee on the Termination Date, by Optionee (or the Optionee’s legal
representative) within twelve months after the Termination Date, but in any event no later than the
Expiration Date.

                    (c) Notwithstanding anything to the contrary herein, if
Optionee ceases to provide services to the Company or any Parent, Subsidary or Affiliate of the
Company because of the Optionee’s actual or alleged commitment of a criminal act or an intentional
tort and the Company (or an employee of the Company) is the victim or object of such criminal act
or intentional tort or such criminal act or intentional tort results, in the reasonable opinion of
the Company, in liability, loss, damage or injury to the Company, then, at the Company’s election,
this Option shall not be exercisable and shall terminate upon the Optionee’s Termination Date.
Termination by the Company based on Optionee’s alleged commitment of a criminal act or an
intentional tort shall be based on a reasonable investigation of the facts and a determination by
the Company that a preponderance of the evidence discovered in such investigation indicates that
Optionee is guilty of such criminal act or intentional tort.

Nothing in this Grant or in the Plan shall confer on Optionee any right to continue in the employ
of, or to continue any other relationship with, the Company or any Parent, Subsidiary or Affiliate
of the Company, or limit in any way the right of the Company or any Parent, Subsidiary or Affiliate
of the Company to
terminate Optionee’s employment or other relationship at any time, with or without cause.

          5. Manner of Exercise.

                    (a) This Option shall be exercisable by delivery to the
Company of an executed written Notice of Intent to Exercise Stock Option in the form attached
hereto, or in such other form as may be approved by the Company

2.

 

(the “Exercise Agreement”), which shall set forth Optionee’s election to exercise this Option, the
number of Shares being purchased, any restrictions imposed on the Shares and such other
representations and agreements regarding Optionee’s investment intent and access to information as
may be required by the Company to comply with applicable securities laws.

                    (b) Such Exercise Agreement shall be accompanied by
full payment of the Exercise Price for the Shares being purchased (i) in cash (by check); (ii) by
surrender of shares of Common Stock of the Company that have been owned by the Optionee for more
than six months (and which have been paid for within the meaning of SEC Rule 144 and, if such
shares were purchased from the Company by use of a promissory note, such note has been fully paid
with respect to such shares) or were obtained by the Optionee in the open public market, having a
Fair Market Value (as defined in the Plan) equal to the Exercise Price of the Option; (iii) by
waiver of compensation due or accrued to Optionee for services rendered; (iv) provided that a
public market for the Company’s stock exists, through a “same day sale” commitment from the
Optionee and a broker-dealer that is a member of the National Association of Securities Dealers (an
“NASD Dealer”) whereby the Optionee irrevocably elects to exercise the Option and to sell a portion
of the Shares so purchased to pay for the Exercise Price and whereby the NASD Dealer irrevocably
commits upon receipt of such Shares to forward the Exercise Price directly to the Company; (v)
provided that a public market for the Company’s stock exists, through a “margin” commitment from
the Optionee and an NASD Dealer whereby the Optionee irrevocably elects to exercise the Option and
to pledge the Shares so purchased to the NASD Dealer in a margin account as security for a loan
from the NASD Dealer in the amount of the Exercise Price, and whereby the NASD Dealer irrevocably
commits upon receipt of such shares to forward the Exercise Price directly to the Company; or (vi)
by any combination of the foregoing where approved by the Committee, or its designee, in its sole
discretion.

                    (c) Withholding Taxes. Prior to the issuance of the
Shares upon exercise of this Option, Optionee must pay or make adequate provision for any
applicable federal or state withholding obligations of the Company.

                    (d) Issuance of Shares. Provided that such notice and
payment are in form and substance satisfactory to counsel for the Company, the Company shall cause
the Shares to be issued in the name
of Optionee or Optionee’s legal representative or assignee.

          6. Notice of Disqualifying Disposition of ISO Shares. If the Option granted to Optionee pursuant to
this Grant is an ISO, and if Optionee sells or otherwise disposes of any of the Shares acquired
pursuant to the ISO on or before the later of (1) the date which is two years after the Grant Date,
or (2) the date one year after exercise of the ISO with respect to which the Shares are to be sold
or disposed, the Optionee shall immediately notify the Company in writing of such disposition.
Optionee acknowledges and agrees that Optionee may be subject to income tax withholding by the
Company on the compensation income recognized by the Optionee from any such early disposition by
payment in cash or out of the current wages or other earnings payable to the Optionee.

          7. Nontransferability of Option. This Option may not be
transferred in any manner other than by will or by the law of descent and distribution and may be
exercised during the lifetime of the Optionee only by the Optionee. The terms of this Option shall
be binding upon the executors, administrators, successors and assigns of Optionee.

3.

 

          8. Vesting Schedule. Shares that are vested pursuant to the vesting schedule set forth in the Stock
Option Grant are “Vested Shares” and exercisable hereunder, provided that the Optionee provides
services to the Company or a Parent, Subsidiary or Affiliate of the Company on the First Vesting
Date and on each Succeeding Vesting Date thereafter.

          9. Compliance with Laws and Regulations. The exercise of this
Option and the issuance of Shares shall be subject to compliance by the Company and the Optionee
with all applicable requirements of federal and state securities laws and with all applicable
requirements of any stock exchange or national market system on which the Company’s Common Stock
may be listed at the time of such issuance. Optionee understands that the Company is under no
obligation to register or qualify the Shares with the Securities and Exchange Commission, any state
securities commission or any stock exchange or national market system on which the Company’s Common
Stock may be listed at the time of such issuance or transfer.

          10. Tax Consequences. Set forth below is a brief summary as of the date of this Option of some
of the federal and California tax consequences of exercise of this Option and disposition of the
Shares. THIS SUMMARY IS NECESSARILY INCOMPLETE, AND THE TAX LAWS AND REGULATIONS ARE SUBJECT TO
CHANGE. OPTIONEE SHOULD CONSULT A TAX ADVISOR BEFORE EXERCISING THIS OPTION OR DISPOSING OF THE
SHARES.

                    (a) Exercise of ISO. If this Option qualifies as an ISO, there will be no regular federal
income tax liability or California income tax liability upon the exercise of the Option, although
the excess, if any, of the Fair Market Value of the Shares on the date of exercise over the
Exercise Price will be treated as a tax preference item for federal income tax purposes and may
subject the Optionee to alternative minimum tax in the year of exercise.

                    (b) Exercise of Nonqualified Stock Option. If this Option does not qualify as an ISO, there may be
a regular federal income tax liability and a California income tax liability upon the exercise of
the Option. The Optionee will be treated as having received compensation income (taxable at
ordinary income tax rates) equal to the excess, if any, of the Fair Market Value of the Shares on
the date of exercise over the Exercise Price. The Company will be required to withhold from
Optionee’s compensation or collect from Optionee and pay to the applicable taxing authorities an
amount equal to a percentage of this compensation income at the time of exercise.

                    (c) Disposition of Shares. If the Shares are held for at least twelve months after the date of the
transfer of the Shares pursuant to the exercise of this Option (and, if this Option qualifies as an
ISO, are disposed of at least two years after the Grant Date), any gain realized on disposition of
the Shares will be treated as long term capital gain for federal and California income tax purposes. If Shares purchased under an
ISO are disposed of within one year of exercise or within two years after the Grant Date, any gain
realized on such disposition will be treated as compensation income (taxable at ordinary income
rates) to the extent of the excess, if any, of the Fair Market Value of the Shares on the date of
exercise over the Exercise Price.

          11. Interpretation. Any dispute regarding the interpretation hereof or of the Plan shall be submitted by Optionee
or the Company forthwith to

4.

 

the Committee, which shall review such dispute at its next regular meeting. The resolution of such
a dispute by the Committee shall be final and binding on the Company and on Optionee.

          12. Governing Law. This Grant shall be governed by and
construed in accordance with 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
California. If any provision of this Grant is determined by a court of law to be illegal or
unenforceable, then such provision will be enforced to the maximum extent possible and the other
provisions will remain fully effective and enforceable.

          13. Notices. Any notice required to be given or delivered to the Company under the terms of this
Grant shall be in writing and addressed to the Corporate Secretary of the Company at its principal
corporate offices. Any notice required to be given or delivered to Optionee shall be in writing and
addressed to Optionee at the address indicated in the Stock Option Grant or to such other address
as such party may designate in writing from time to time to  the Company. All notices shall be
deemed to have been given or delivered upon: personal delivery; three days after deposit in the
United States mail by certified or registered mail (return receipt requested); one business day
after deposit with any return receipt express courier (prepaid); or one business day after
transmission by facsimile, rapifax or telecopier.

          14. Entire Agreement. The Plan and the Exercise Agreement
are incorporated in this Grant by reference. This Grant constitutes the entire agreement of the
parties and supersede all prior undertakings and agreements with respect to the subject matter
hereof.

EXHIBIT I

NOTICE OF INTENT TO EXERCISE STOCK OPTION

SYMANTEC CORPORATION

20330 Stevens Creek Blvd.

Cupertino, CA 95014

DATE: __ __ \ __ __ \ __ __

PURSUANT to the Stock Option Grants (detailed below) granted to me by Symantec Corporation
(the “Company”), I hereby notify the company that I wish to exercise my right to purchase shares of
common stock as described in the table below. I acknowledge that I have received, read and
understood a copy of the Plan and the Grant Agreement, and that such are incorporated herein by
reference.

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Grant	 	Grant	 	 	Option Type	 	 	Option Price	 	 	Number	 	 	Total	 
	Number	 	Date	 	 	(NQ or ISO)	 	 	Per Share	 	 	of Shares	 	 	Option Pri	 
	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 

 

 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 
	 	 	 	 	 	 	 	 	 	TOTALS	 	 	 	 	 	 	 	 
	 

	 	 	 
	 

	 	I do not wish to sell the shares at this time. Payment for these shares will be made in a
manner as defined in and allowed by the Plan and the Company. Please deliver the shares to
the following address:
	 
	 	 
	 

	 	 

q I am not a Company Insider.

q I am a Company Insider and have received pre-clearance approval from the Legal Department of
the Company.

	 	 	 
	 

	 	 
	Name

	 	Signature
	 
	 	 
	 
	Address
	 	 

	 	 	 
	Social Security Number: __ __\ __ __\ __ __ __ __

	 	Office Location:           
                                                            

	 	 	 
	Daytime Telephone Number:                                           

	 	Home Telephone Number:                                                        

Fax this form to the attention of “Stock Administration” in the Cupertino

office, NOT to your broker.

Stock Administration Fax Number: (408) 517-8118.

 

 

Exhibit B

Form of Restricted Stock Purchase Agreement

 

 

SYMANTEC CORPORATION

1996 EQUITY INCENTIVE PLAN

RESTRICTED STOCK PURCHASE AGREEMENT

(STOCK AWARD DOCUMENTATION)

     This Restricted Stock Purchase Agreement (the “AGREEMENT”) is made and
entered into as of                                         ,                      (the “EFFECTIVE DATE”) by and between
Symantec Corporation, a Delaware corporation (the “COMPANY”), and the
purchaser-participant named below (the “PARTICIPANT”). Capitalized terms not
defined herein shall have the meaning ascribed to them in the Company’s 1996
Equity Incentive Plan (the “PLAN”).

	 	 	 	 	 
	PARTICIPANT:
	 	 	 	 
	 

	 	 

	 	 
	SOCIAL SECURITY NUMBER:
	 	 	 	 
	 

	 	 

	 	 
	ADDRESS:
	 	 	 	 
	 

	 	 

	 	 
	 
	 	 	 	 
	 

	 	 

	 	 
	TOTAL NUMBER OF SHARES:
	 	 	 	 
	 

	 	 

	 	 
	PURCHASE PRICE PER SHARE:
	 	 	 	 
	 

	 	 

	 	 
	TOTAL PURCHASE PRICE:
	 	 	 	 
	 

	 	 

	 	 

     1. PURCHASE OF SHARES.

          1.1 Purchase of Shares. On the Effective Date and subject to the
terms and conditions of this Agreement and the Plan, Participant hereby
purchases from the Company, and the Company hereby sells to Participant, the
Total Number of Shares set forth above (the “SHARES”) of the Company’s Common
Stock at the Purchase Price Per Share as set forth above (the “Purchase Price
Per Share”) for a Total Purchase Price as set forth above (the “PURCHASE
PRICE”). As used in this Agreement, the term “SHARES” includes the Shares
purchased under this Agreement and all securities received (i) in replacement of
the Shares, (ii) as a result of stock dividends or stock splits with respect to
the Shares, and (iii) in replacement of the Shares in a merger,
recapitalization, reorganization or similar corporate transaction.

          1.2 Title to Shares. The exact spelling of the name(s) under which
Participant will take title to the Shares is:                                                                                 

1

 

 

 

          Participant desires to take title to the Shares as follows:

          [ ] Individual, as separate property

          [ ] Husband and wife, as community property

          [ ] Joint Tenants

          1.3 Payment. Participant hereby delivers payment of the Purchase
Price in cash (by check) in the amount of $                    , receipt of which is
acknowledged by the Company.

     2. DELIVERIES BY PARTICIPANT. Participant hereby delivers to the
Company (i) a duly executed copy of this Agreement, (ii) two (2) copies of a
blank Stock Power and Assignment Separate from Stock Certificate in the form of
Exhibit 1 attached hereto (the “STOCK POWERS”), both executed by Participant
(and Participant’s spouse, if any), (iii) if Participant is married, a Consent
of Spouse in the form of Exhibit 2 attached hereto (the “SPOUSE CONSENT”)
executed by Participant’s spouse, and (iv) payment of the Purchase Price by the
method(s) check above (if by delivery of a check, then a copy of the check is
attached hereto as Exhibit 4).

     3. COMPANY’s REPURCHASE OPTION FOR UNVESTED SHARES. The Company, or its
assignee, shall have the option to repurchase all or a portion of the
Participant’s Unvested Shares (as defined in Section 3.2 below) on the terms and
conditions set forth in this Section (the “REPURCHASE OPTION”) if Participant is
terminated for any reason, or no reason, including without limitation
Participant’s death, Disability (as defined in the Plan), voluntary resignation
or termination by the Company with or without cause.

          3.1 Termination and Termination Date. In case of any dispute as to
whether Participant has been terminated, the Compensation Committee shall have
sole discretion to determine whether Participant has been terminated and the
effective date of such termination (the “TERMINATION DATE”).

          3.2 Unvested and Vested Shares. Shares that are vested pursuant to
the schedule set forth in this Section 3.2 are “VESTED SHARES.” Shares that are
not vested pursuant to the schedule set forth in this Section 3.2 are “UNVESTED
SHARES.” Unvested Shares may not be sold or otherwise transferred by Participant
without the Company’s prior written consent. On the Effective Date all of the
Shares will be Unvested Shares. If Participant has continuously been employed at
all times from the Effective Date until the first anniversary of the Effective
Date (the “FIRST VESTING DATE”), then on the First Vesting Date [                    ] of the
Shares will become Vested Shares; and thereafter, if Participant has
continuously been employed at all times from the First Vesting Date until the
second anniversary of the Effective Date (the “SECOND VESTING DATE”), then on
the Second Vesting Date [                    ] of the Shares will become Vested Shares. If
the application of the vesting percentage causes a fractional share, such share
shall be rounded

2

 

down to the nearest whole share except for the last installment in such vesting
period, at the end of which the balance of Unvested Shares shall become Vested
Shares. No Shares will become Vested Shares after the Termination Date. The
number of Shares that are Vested Shares or Unvested Shares will be
proportionally adjusted for any stock split or similar change in the capital
structure of the Company as set forth in Section 2.2 of the Plan. Any new,
additional or different securities the Participant may become entitled to
receive with respect to Unvested Shares by virtue of a stock dividend, stock
split or any other change in the corporate or capital structure of the Company
will be subject to the same restrictions as such Unvested Shares; and
Participant will have no right to retain such stock dividends or stock
distributions with respect to Unvested Shares that are repurchased at the
Repurchase Price (defined below).

          3.3 Exercise of Repurchase Option. At any time within ninety (90)
days after the Termination Date, the Company, or its assignee(s), may elect to
repurchase any or all of the Participant’s Unvested Shares by giving Participant
written notice of exercise of the Repurchase Option.

          3.4 Calculation of Repurchase Price. The Company or its
assignee(s) shall have the option to repurchase from Participant (or from
Participant’s personal representative as the case may be) the Participant’s
Unvested Shares at the Participant’s original Purchase Price Per Share (as
adjusted to reflect any stock split or similar change in the capital structure
of the Company as set forth in Section 2.2 of the Plan) (the “REPURCHASE
PRICE”).

          3.5 Payment of Repurchase Price. The Repurchase Price shall be
payable, at the option of the Company or its assignee(s), by check or by
cancellation of all or a portion of any outstanding purchase money indebtedness
owed by Participant to the Company, or such assignee, or by any combination
thereof. The Repurchase Price shall be paid without interest within sixty (60)
days after exercise of the Repurchase Option.

          3.6 Right of Termination Unaffected. Nothing in this Agreement
shall be construed to limit or otherwise affect in any manner whatsoever the
right or power of the Company (or any Parent or Subsidiary of the Company) to
terminate Participant at any time for any reason or no reason, with or without
cause.

     4. RESTRICTIONS ON TRANSFERS. Purchaser shall not transfer, assign,
grant a lien or security interest in, pledge, hypothecate, encumber or otherwise
dispose of any of the Shares that are subject to the Repurchase Option.

     5. RIGHTS AS A STOCKHOLDER. Subject to the terms and conditions of this
Agreement, Participant will have all of the rights of a stockholder of the
Company with respect to the Shares from and after the date that Participant
delivers payment of the Purchase Price until such time as Participant disposes
of the Shares or the Company and/or its assignee(s) exercise(s) the Repurchase
Option. Upon an exercise of the Repurchase Option, Participant will have no
further rights as a holder of the Shares so purchased upon such exercise, other
than the right to receive payment for the Shares so purchased in accordance with
the provisions of this Agreement, and Participant will promptly surrender the
stock certificate(s) evidencing the Shares so purchased to the Company for
transfer or cancellation.

3

 

     6. ESCROW. As security for Participant’s faithful performance of this
Agreement, Participant agrees, immediately upon receipt of the stock
certificate(s) evidencing the Shares, to deliver such certificate(s), together
with the Stock Powers executed by Participant and by Participant’s spouse, if
any (with the date and number of Shares left blank), to the Secretary of the
Company or other designee of the Company (the “ESCROW HOLDER”), who is hereby
appointed to hold such certificate(s) and Stock Powers in escrow and to take all
such actions and to effectuate all such transfers and/or releases of such Shares
as are in accordance with the terms of this Agreement. Escrow Holder will act
solely for the Company as its agent and not as a fiduciary. Participant and the
Company agree that Escrow Holder will not be liable to any party to this
Agreement (or to any other party) for any actions or omissions unless Escrow
Holder is grossly negligent or intentionally fraudulent in carrying out the
duties of Escrow Holder under this Agreement. Escrow Holder may rely upon any
letter, notice or other document executed with any signature purported to be
genuine and may rely on the advice of counsel and obey any order of any court
with respect to the transactions contemplated by this Agreement. The Shares will
be released from escrow upon termination of the Repurchase Option.

     7. RESTRICTIVE LEGENDS AND STOP-TRANSFER ORDERS.

          7.1 Legends. Participant understands and agrees that the Company
will place the legends set forth below or similar legends on any stock
certificate(s) evidencing the Shares, together with any other legends that may
be required by state or federal securities laws, the Company’s Certificate of
Incorporation or Bylaws, any other agreement between Participant and the Company
or any agreement between Participant and any third party:

THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN
RESTRICTIONS ON TRANSFER, INCLUDING THE RIGHT OF REPURCHASE HELD BY
THE ISSUER AND/OR ITS ASSIGNEE(S) AS SET FORTH IN A RESTRICTED STOCK
PURCHASE AGREEMENT BETWEEN THE ISSUER AND THE ORIGINAL HOLDER OF
THESE SHARES, A COPY OF WHICH MAY BE OBTAINED AT THE PRINCIPAL
OFFICE OF THE ISSUER. SUCH TRANSFER RESTRICTIONS, INCLUDING THE
RIGHT OF REPURCHASE, ARE BINDING ON TRANSFEREES OF THESE SHARES.

          7.2 Stop-Transfer Instructions. Participant agrees that, to ensure
compliance with the restrictions imposed by this Agreement, the Company may
issue appropriate “stop-transfer” instructions to its transfer agent, if any,
and if the Company transfers its own securities, it may make appropriate
notations to the same effect in its own records.

          7.3 Refusal to Transfer. The Company will not be required (i) to
transfer on its books any Shares that have been sold or otherwise transferred in
violation of any of the provisions of this Agreement or (ii) to treat as owner
of such Shares, or to accord the right to vote or pay dividends to any
participant or other transferee to whom such Shares have been so transferred.

     8. TAX CONSEQUENCES. PARTICIPANT UNDERSTANDS THAT PARTICIPANT MAY
SUFFER ADVERSE TAX CONSEQUENCES AS A RESULT OF PARTICIPANT’s

4

 

PURCHASE OR DISPOSITION OF THE SHARES. PARTICIPANT REPRESENTS (I) THAT
PARTICIPANT HAS CONSULTED WITH ANY TAX ADVISER THAT PARTICIPANT DEEMS ADVISABLE
IN CONNECTION WITH THE PURCHASE OR DISPOSITION OF THE SHARES AND (II) THAT
PARTICIPANT IS NOT RELYING ON THE COMPANY FOR ANY TAX ADVICE. Participant hereby
acknowledges that Participant has been informed that, unless an election is
filed by the Participant with the Internal Revenue Service (and, if necessary,
the proper state taxing authorities) within 30 days of the purchase of the
Shares to be effective, electing pursuant to Section 83(b) of the Internal
Revenue Code (and similar state tax provisions, if applicable) to be taxed
currently on any difference between the Purchase Price of the Shares and their
Fair Market Value on the date of purchase, there will be a recognition of
taxable income to the Participant, measured by the excess, if any, of the Fair
Market Value of the Vested Shares, at the time they cease to be Unvested Shares,
over the Purchase Price for such Shares. Participant represents that Participant
has consulted any tax advisers Participant deems advisable in connection with
Participant’s purchase of the Shares and the filing of the election under
Section 83(b) and similar tax provisions. A form of Election under Section 83(b)
is attached hereto as Exhibit 3 for reference. PARTICIPANT HEREBY ASSUMES ALL
RESPONSIBILITY FOR FILING SUCH ELECTION AND PAYING ANY TAXES RESULTING FROM SUCH
ELECTION OR FROM FAILURE TO FILE THE ELECTION AND PAYING TAXES RESULTING FROM
THE LAPSE OF THE REPURCHASE RESTRICTIONS ON THE UNVESTED SHARES.

     9. COMPLIANCE WITH LAWS AND REGULATIONS. The issuance and transfer of
the Shares will be subject to and conditioned upon compliance by the Company and
Participant with all applicable state and federal laws and regulations and with
all applicable requirements of any stock exchange or automated quotation system
on which the Company’s Common Stock may be listed or quoted at the time of such
issuance or transfer.

     10. SUCCESSORS AND ASSIGNS. The Company may assign any of its rights
under this Agreement, including its rights to repurchase Shares under the
Repurchase Option. This Agreement shall be binding upon and inure to the benefit
of the successors and assigns of the Company. Subject to the restrictions on
transfer herein set forth, this Agreement will be binding upon Participant and
Participant’s heirs, executors, administrators, legal representatives,
successors and assigns.

     11. GOVERNING LAW; SEVERABILITY. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of California as
such laws are applied to agreements between California residents entered into
and to be performed entirely within California, excluding that body of laws
pertaining to conflict of laws. If any provision of this Agreement is determined
by a court of law to be illegal or unenforceable, then such provision will be
enforced to the maximum extent possible and the other provisions will remain
fully effective and enforceable.

     12. NOTICES. Any notice required to be given or delivered to the Company
shall be in writing and addressed to the Corporate Secretary of the Company at
its principal corporate offices. Any notice required to be given or delivered to
Participant shall be in writing and addressed to Participant at the address
indicated above or to such other address as Participant

5

 

may designate in writing from time to time to the Company. All notices shall be
deemed effectively given upon personal delivery, (i) three (3) days after
deposit in the United States mail by certified or registered mail (return
receipt requested), (ii) one (1) business day after its deposit with any return
receipt express courier (prepaid), or (iii) one (1) business day after
transmission by rapifax or telecopier.

     13. FURTHER INSTRUMENTS. The parties agree to execute such further
instruments and to take such further action as may be reasonably necessary to
carry out the purposes and intent of this Agreement.

     14. HEADINGS. The captions and headings of this Agreement are included
for ease of reference only and will be disregarded in interpreting or construing
this Agreement.

     15. ENTIRE AGREEMENT. The Plan and this Agreement, together with all its
Exhibits, constitute the entire agreement and understanding of the parties with
respect to the subject matter of this Agreement, and supersede all prior
understandings and agreements, whether oral or written, between the parties
hereto with respect to the specific subject matter hereof.

[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK, SIGNATURE PAGE FOLLOWS]

6

 

     IN WITNESS WHEREOF, the Company has caused this Agreement to be EXECUTED
IN TRIPLICATE by its duly authorized representative and Participant has executed
this Agreement in triplicate as of the Effective Date. THIS AGREEMENT, ALONG
WITH PAYMENT FOR THE SHARES BEING PURCHASED, MUST BE RECEIVED BY THE
REPRESENTATIVE OF THE COMPANY NAMED BELOW NO LATER THAN THE THIRTIETH DAY AFTER
THIS AGREEMENT WAS FIRST DELIVERED TO PARTICIPANT FOR EXECUTION.

	 	 	 	 	 	 	 	 	 
	SYMANTEC CORPORATION	 	 	 	PARTICIPANT
	 
	 	 	 	 	 	 	 	 
	By:
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	 	 	(Signature)	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 
	(Please print name)	 	 	 	(Please print name)
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	(Please print title)	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Address:

	 	 	 	 	 	Address:	 	 
	 

	 	 

	 	 
	 	 	 	 
 
	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Fax No.:

	 	 	 	 	 	Fax No.:	 	 
	 

	 	 

	 	 
	 	 	 	 
 
	Phone No.

	 	 	 	 	 	Phone No.:	 	 
	 

	 	 

	 	 
	 	 	 	 
 

[SIGNATURE PAGE TO SYMANTEC CORPORATION. RESTRICTED STOCK PURCHASE AGREEMENT]

7

 

LIST OF EXHIBITS

Exhibit 1: Stock Power and Assignment Separate from Stock Certificate

Exhibit 2: Spouse Consent

Exhibit 3: Election Under Section 83(b) of the Internal Revenue Code

Exhibit 4: Copy of Participant’s Check

 

 

EXHIBIT 1

STOCK POWER AND ASSIGNMENT

SEPARATE FROM STOCK CERTIFICATE

 

 

STOCK POWER AND ASSIGNMENT

SEPARATE FROM STOCK CERTIFICATE

     FOR VALUE RECEIVED and pursuant to that certain Restricted Stock Purchase
Agreement No. ___[COMPLETE AT THE TIME OF EXERCISE] dated as of
                                        , ___, [COMPLETE AT THE TIME OF EXERCISE] (the “AGREEMENT”),
the undersigned hereby sells, assigns and transfers unto
                                                            ,                                 shares of the Common Stock $0.01, par
value per share, of Symantec Corporation, a Delaware corporation (the
“COMPANY”), standing in the undersigned’s name on the books of the Company
represented by Certificate No(s).                      [COMPLETE AT THE TIME OF EXERCISE]
delivered herewith, and does hereby irrevocably constitute and appoint the
Secretary of the Company as the undersigned’s attorney-in-fact, with full power
of substitution, to transfer said stock on the books of the Company. THIS
ASSIGNMENT MAY ONLY BE USED AS AUTHORIZED BY THE AGREEMENT AND ANY EXHIBITS
THERETO.

Dated:                                                             ,                     

	 	 	 	 	 
	 

	 	PARTICIPANT	 	 
	 
	 	 	 	 
	 

	 	 

(Signature)
	 	 
	 
	 	 	 	 
	 

	 	 

(Please Print Name)
	 	 
	 
	 	 	 	 
	 

	 	 

(Spouse’s Signature, if any)
	 	 
	 
	 	 	 	 
	 

	 	 

(Please Print Spouse’s Name)
	 	 

INSTRUCTIONS TO PARTICIPANT: Please do not fill in any blanks other than the
signature line. The purpose of this Stock Power and Assignment is to enable the
Company and/or its assignee(s) to acquire the shares upon exercise of its
“Repurchase Option” set forth in the Agreement without requiring additional
signatures on the part of the Participant or Participant’s Spouse, if any.

 

 

EXHIBIT 2

SPOUSE CONSENT

 

 

SPOUSE CONSENT

     The undersigned spouse of                      (the “PARTICIPANT”) has read,
understands, and hereby approves the Restricted Stock Purchase Agreement between
Participant and the Company (the “AGREEMENT”). In consideration of the Company’s
granting my spouse the right to purchase the Shares as set forth in the
Agreement, the undersigned hereby agrees to be irrevocably bound by the
Agreement and further agrees that any community property interest shall
similarly be bound by the Agreement. The undersigned hereby appoints Participant
as my attorney-in-fact with respect to any amendment or exercise of any rights
under the Agreement.

	 	 	 	 	 	 	 	 	 
	Date:
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	Print Name of Participant’s Spouse
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 
	(Please print name)	 	 	 	Signature of Participant’s Spouse
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Address:	 	 
	 

	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	(Please print title)	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 

     [                    ] Participant, initial this box if you do not have a spouse.

 

 

EXHIBIT 3

ELECTION UNDER SECTION 83(b) OF THE INTERNAL REVENUE CODE

 

 

ELECTION UNDER SECTION 83(b) OF THE INTERNAL REVENUE CODE

     The undersigned Taxpayer hereby elects, pursuant to Section 83(b) of the
Internal Revenue Code, as amended, to include in gross income for the Taxpayer’s
current taxable year the excess, if any, of the fair market value of the
property described below at the time of transfer over the amount paid for such
property, as compensation for services.

	 	 	 	 	 
	1.

	 	TAXPAYER’S NAME:	 	 
	 
	 	 	 	 
	 

	 	TAXPAYER’S ADDRESS:	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	SOCIAL SECURITY NUMBER:	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	2.	 	The property with respect to which the election is made is described as
follows:                                                     shares of Common Stock of Symantec Corporation,
a Delaware corporation (the “COMPANY”), which is Taxpayer’s employer or
the corporation for whom the Taxpayer performs services.
	 
	 	 	 	 
	3.	 	The date on which the shares were purchased was                                         ,                     
and this election is made for calendar year                     .
	 
	 	 	 	 
	4.	 	The shares are subject to the following restrictions: The Company may
repurchase all or a portion of the shares at the Taxpayer’s original
purchase price under certain conditions at the time of Taxpayer’s
termination of employment or services.
	 
	 	 	 	 
	5.	 	The fair market value of the shares (without regard to restrictions other
than restrictions which by their terms will never lapse) was $                                        
per share at the time of purchase.
	 
	 	 	 	 
	6.	 	The amount paid for such shares was $                                         per share.
	 
	 	 	 	 
	7.	 	The Taxpayer has submitted a copy of this statement to the Company.

THIS ELECTION MUST BE FILED WITH THE INTERNAL REVENUE SERVICE (“IRS”), AT THE
OFFICE WHERE THE TAXPAYER FILES ANNUAL INCOME TAX RETURNS, WITHIN 30 DAYS AFTER
THE DATE OF TRANSFER OF THE PROPERTY, AND MUST ALSO BE FILED WITH THE TAXPAYER’S
INCOME TAX RETURNS FOR THE CALENDAR YEAR. THE ELECTION CANNOT BE REVOKED WITHOUT
THE CONSENT OF THE IRS.

	 	 	 
	Dated:                                                             ,                     
	 	 
	 

	 	 
 Taxpayer’s
Signatureexv10w07

 

Exhibit 10.07

SYMANTEC CORPORATION

1998 EMPLOYEE STOCK PURCHASE PLAN

(AS AMENDED EFFECTIVE JULY 1, 2005)

1. ESTABLISHMENT OF PLAN

     Symantec Corporation (the “Company”) adopted this plan in 1998 to grant options for the
purchase of the Company’s Common Stock to eligible employees of the Company and Subsidiaries (as
hereinafter defined) pursuant to this Employee Stock Purchase Plan (the “Plan”). For purposes of
this Plan, “parent corporation” and “Subsidiary” (collectively, “Subsidiaries”) shall have the same
meanings as “parent corporation” and “subsidiary corporation” in Section 424, of the Internal
Revenue Code of 1986, as amended (the “Code”). The Company intends that the Plan shall qualify as
an “employee stock purchase plan” under Section 423 of the Code (including any amendments or
replacements of such section), and the Plan shall be so construed. Any term not expressly defined
in the Plan but defined for purposes of Section 423 of the Code shall have the same definition
herein. A total of 38,604,400 shares of Common Stock (as adjusted for all stock splits and
increases to the Plan through March 1, 2005) may be issued under the Plan. Such number shall be
subject to adjustments effected in accordance with Section 14 of the Plan.

2. PURPOSES

     The purpose of the Plan is to provide employees of the Company and Subsidiaries designated by
the Board of Directors as eligible to participate in the Plan with a convenient means to acquire an
equity interest in the Company through payroll deductions, to enhance such employees’ sense of
participation in the affairs of the Company and Subsidiaries, and to provide an incentive for
continued employment.

3. ADMINISTRATION

     The Plan is administered by the Board of Directors of the Company or by a committee designated
by the Board of Directors of the Company (in which event all references herein to the Board of
Directors shall be to the committee). Subject to the provisions of the Plan and the limitations of
Section 423 of the Code or any successor provision in the Code, all questions of interpretation or
application of the Plan shall be determined by the Board and its decisions shall be final and
binding upon all participants. Members of the Board shall receive no compensation for their
services in connection with the administration of the Plan, other than standard fees as established
from time to time by the Board of Directors of the Company for services rendered by Board members
serving on Board committees. All expenses incurred in connection with the administration of the
Plan shall be paid by the Company.

4. ELIGIBILITY

     Any employee of the Company or its Subsidiaries is eligible to participate in an Offering
Period (as hereinafter defined) under the Plan except the following:

          (a) employees who are not employed by the Company or any of its Subsidiaries on the third
business day before the beginning of such Offering Period;

          (b) employees who are customarily employed for less than 20 hours per week;

          (c) employees who are customarily employed for less than 5 months in a calendar year;

          (d) employees who, together with any other person whose stock would be attributed to such
employee pursuant to Section 425(d) of the Code, own stock or hold options to purchase stock or
who, as a result of being granted an option under the Plan with respect to such Offering Period,
would own stock or hold options to purchase stock possessing 5 percent or more of the total
combined voting power or value of all classes of stock of the Company or any of its Subsidiaries;

          (e) employees who would, by virtue of their participation in such Offering Period, be
participating simultaneously in more than one Offering Period under the Plan; and

 

 

          (f) individuals who provide services to the Company or any of its Subsidiaries as independent
contractors who are reclassified as common law employees for any reason except for federal income
and employment tax purposes.

5. OFFERING PERIODS; OFFERING DATES; PURCHASE PERIODS; AND PURCHASE DATES

     (a) Each Offering Period under the Plan (each an “Offering Period”) shall be of the duration
provided herein. The Board of Directors of the Company shall have the power to change the duration
of Offering Periods or Purchase Periods without stockholder approval. The last business day of
each Purchase Period is hereinafter referred to as the “Purchase Date.”

     (b) Each Offering Period commencing after June 30, 2005, shall be of 6 months duration
commencing August 16 and February 16 of each year and ending no later than the next February 15 and
August 15, respectively, thereafter. The first day of each Offering Period is referred to as the
“Offering Date.” Each such Offering Period shall consist of a single purchase period (a “Purchase
Period”) during which payroll deductions of the participant are accumulated under this Plan. Each
such Purchase Period shall commence on the August 16 or February 16 of the applicable Offering
Period and shall end no later than the next February 15 or August 15, respectively.

     (c) Notwithstanding 5(b) above and the other provisions of the Plan, the Board of Directors
may, but need not, adopt after July 1, 2005, one or more Offering Periods exclusively for employees
of the Company, or exclusively for employees of any Subsidiary (or any combination of the Company
and/or one or more Subsidiaries), on such terms as it shall determine in its sole discretion
(including without limitation, the length of each Offering Period and Purchase Period, whether
there is more than one Purchase Period in an Offering Period, conditions on eligibility for
participation, and the formula(s) for calculating the price(s) at which shares may be purchased
during such Offering Period). Unless expressly set forth to the contrary in the resolutions
adopting an Offering Period pursuant to this 5(c), upon the Offering Date of an Offering Period
adopted under this 5(c) the employees permitted to participate in such Offering Period shall be
ineligible to participate in any other Offering Period while such Offering Period is in existence.

6. PARTICIPATION IN THE PLAN

     Eligible employees may become participants in an Offering Period under the Plan on the first
Offering Date after satisfying the eligibility requirements by delivering to the Company’s or
Subsidiary’s (whichever employs such employee) Stock Administration (“Stock Administration”) not
later than the 3rd business day before such Offering Date unless a later time for filing the
subscription agreement is set by the Board for all eligible Employees with respect to a given
Offering Period a subscription agreement authorizing payroll deductions. An eligible employee who
does not deliver a subscription agreement to Stock Administration by such date after becoming
eligible to participate in such Offering Period under the Plan shall not participate in that
Offering Period and shall not participate in any subsequent Offering Period unless such employee
enrolls in the Plan by filing the subscription agreement with Stock Administration not later than
the 3rd business day preceding the Offering Date of the applicable, subsequent Offering Period.
Once an employee becomes a participant in an Offering Period, such employee will automatically
participate in the Offering Period commencing immediately following the last day of the prior
Offering Period unless the employee withdraws from the Plan or terminates further participation in
the Offering Period as set forth in Section 11 below. Such participant is not required to file any
additional subscription agreements in order to continue participation in the Plan. Any participant
whose option expires and who has not withdrawn from the Plan pursuant to Section 11 below will
automatically be re-enrolled in the Plan and granted a new option on the Offering Date of the next
Offering Period. A participant in the Plan may participate in only one Offering Period at any time.

7. GRANT OF OPTION

     (a) Each employee enrolled in an Offering Period will be granted on the Purchase Date an
option to purchase on such Purchase Date up to that number of shares of Common Stock of the Company
determined by dividing the amount accumulated in such employee’s payroll deduction account during
such Purchase Period by eighty-five percent (85%) of the fair market value of a share of the
Company’s Common Stock on the Purchase Date.

2

 

     (b) In no event, however, shall the number of shares of the Company’s Common Stock subject to
any option granted pursuant to this Plan exceed the maximum number of shares determined pursuant to
Section 10 below. Fair market value of a share of the Company’s Common Stock shall be determined as
provided in Section 8 hereof.

8. PURCHASE PRICE

     The purchase price per share at which a share of Common Stock will be sold in any Offering
Period shall be 85 percent of the fair market value on the Purchase Date. For purposes of the
Plan, the term “fair market value” on a given date shall mean the closing price on the Purchase
Date of a share of the Company’s Common Stock as reported on the NASDAQ National Market System.

9. PAYMENT OF PURCHASE PRICE; CHANGES IN PAYROLL DEDUCTIONS; ISSUANCE OF SHARES

     (a) The purchase price of the shares is accumulated by regular payroll deductions made during
each Purchase Period. The deductions are made as a percentage of the employee’s compensation in one
percent increments not less than 2 percent nor greater than 10 percent. Compensation shall mean all
W-2 compensation, including, but not limited to base salary, wages, commissions, overtime, shift
premiums and bonuses, plus draws against commissions; provided, however, that for purposes of
determining a participant’s compensation, any election by such participant to reduce his or her
regular cash remuneration under Sections 125 or 401(k) of the Code shall be treated as if the
participant did not make such election. Payroll deductions shall commence on the first payday
following the Offering Date and shall continue to the end of the Offering Period unless sooner
altered or terminated as provided in the Plan.

     (b) A participant may lower (but not increase) the rate of payroll deductions during a
Purchase Period by filing with Stock Administration a new authorization for payroll deductions, in
which case the new rate shall become effective for the next payroll period commencing more than 15
days after Stock Administration’s receipt of the authorization and shall continue for the remainder
of the Offering Period unless changed as described below. Such change in the rate of payroll
deductions may be made at any time during an Offering Period, but not more than one change may be
made effective during any Purchase Period. A participant may increase or lower the rate of payroll
deductions for any subsequent Purchase Period by filing with Stock Administration a new
authorization for payroll deductions not later than the first day of the month in which begins such
Purchase Period.

     (c) All payroll deductions made for a participant are credited to his or her account under the
Plan and are deposited with the general funds of the Company; no interest accrues on the payroll
deductions. All payroll deductions received or held by the Company may be used by the Company for
any corporate purpose, and the Company shall not be obligated to segregate such payroll deductions.

     (d) On each Purchase Date, so long as the Plan remains in effect and provided that the
participant has not submitted a signed and completed withdrawal form before that date which
notifies the Company that the participant wishes to withdraw from that Offering Period under the
Plan and have all payroll deductions accumulated in the account maintained on behalf of the
participant as of that date returned to the participant, the Company shall apply the funds then in
the participant’s account to the purchase of whole shares of Common Stock reserved under the option
granted to such participant with respect to the Offering Period to the extent that such option is
exercisable on the Purchase Date. The purchase price per share shall be as specified in Section 8
of the Plan. Any cash remaining in a participant’s account after such purchase of shares shall be
refunded to such participant in cash; provided, however, that any amount remaining in such
participant’s account on a Purchase Date which is less than the amount necessary to purchase a full
share of Common Stock of the Company shall be carried forward, without interest, into the next
Purchase Period or Offering Period, as the case may be. In the event that the Plan has been
oversubscribed, all funds not used to purchase shares on the Purchase Date shall be returned to the
participant. No Common Stock shall be purchased on a Purchase Date on behalf of any employee whose
participation in the Plan has terminated prior to such Purchase Date.

     (e) As promptly as practicable after the Purchase Date, the Company shall arrange the delivery
to each participant, as appropriate, of a certificate representing the shares purchased upon
exercise of his option; provided

3

 

that the Board may deliver certificates to a broker or brokers that hold such certificate in street
name for the benefit of each such participant.

     (f) During a participant’s lifetime, such participant’s option to purchase shares hereunder is
exercisable only by him or her. The participant will have no interest or voting right in shares
covered by his or her option until such option has been exercised. Shares to be delivered to a
participant under the Plan will be registered in the name of the participant or in the name of the
participant and his or her spouse.

10. LIMITATIONS ON SHARES TO BE PURCHASED

     (a) No employee shall be entitled to purchase stock under the Plan at a rate which, when
aggregated with his or her rights to purchase stock under all other employee stock purchase plans
of the Company or any Subsidiary, exceeds $25,000 in fair market value, determined as of the date
such right is granted (or such other limit as may be imposed by the Code) for each calendar year in
which the employee participates in the Plan.

     (b) No employee shall be entitled to purchase more than the Maximum Share Amount (as defined
below) on any single Purchase Date. Not less than thirty days prior to the commencement of any
Purchase Period, the Board may, in its sole discretion, set a maximum number of shares which may be
purchased by any employee at any single Purchase Date (hereinafter the “Maximum Share Amount”). In
no event shall the Maximum Share Amount exceed the amounts permitted under Section 10(a) above. If
a new Maximum Share Amount is set, then all participants must be notified of such Maximum Share
Amount not less than fifteen days prior to the commencement of the next Purchase Period. Once the
Maximum Share Amount is set, it shall continue to apply in respect of all succeeding Purchase Dates
and Purchase Periods unless revised by the Board as set forth above.

     (c) If the number of shares to be purchased on a Purchase Date by all employees participating
in the Plan exceeds the number of shares then available for issuance under the Plan, the Company
will make a pro rata allocation of the remaining shares in as uniform a manner as shall be
practicable and as the Board shall determine to be equitable. In such event, the Company shall give
written notice of such reduction of the number of shares to be purchased under a participant’s
option to each employee affected thereby.

     (d) Any payroll deductions accumulated in a participant’s account which are not used to
purchase stock due to the limitations in this Section 10 shall be returned to the participant as
soon as practicable after the end of the Offering Period.

11. WITHDRAWAL

     (a) Each participant may withdraw from an Offering Period under the Plan by signing and
delivering to Stock Administration notice on a form provided for such purpose. Such withdrawal may
be elected at any time at least 15 days prior to the end of an Offering Period.

     (b) Upon withdrawal from the Plan, the accumulated payroll deductions shall be returned to the
withdrawn employee and his or her interest in the Plan shall terminate. In the event an employee
voluntarily elects to withdraw from the Plan, he or she may not resume his or her participation in
the Plan during the same Offering Period, but he or she may participate in any Offering Period
under the Plan which commences on a date subsequent to such withdrawal by filing a new
authorization for payroll deductions in the same manner as set forth above for initial
participation in the Plan.

12. TERMINATION OF EMPLOYMENT

     Termination of a participant’s employment for any reason, including retirement or death or the
failure of a participant to remain an eligible employee, terminates his or her participation in the
Plan immediately. In such event, the payroll deductions credited to the participant’s account will
be returned to him or her or, in the case of his or her death, to his or her legal representative.
For this purpose, an employee will not be deemed to have terminated employment or failed to remain
in the continuous employ of the Company in the case of sick leave, military leave, or any other
leave of absence approved by the Board of Directors of the Company; provided that such leave is for
a

4

 

period of not more than ninety (90) days or reemployment upon the expiration of such leave is
guaranteed by contract or statute.

13. RETURN OF PAYROLL DEDUCTIONS

     In the event an employee’s interest in the Plan is terminated by withdrawal, termination of
employment or otherwise, or in the event the Plan is terminated by the Board, the Company shall
promptly deliver to the employee all payroll deductions credited to his or her account. No interest
shall accrue on the payroll deductions of a participant in the Plan.

14. CAPITAL CHANGES

     Subject to any required action by the stockholders of the Company, the number of shares of
Common Stock covered by each option under the Plan which has not yet been exercised and the number
of shares of Common Stock which have been authorized for issuance under the Plan but have not yet
been placed under option (collectively, the “Reserves”), as well as the price per share of Common
Stock covered by each option under the Plan which 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 or the payment of a stock dividend (but only on 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 issue 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 an option.

     In the event of the proposed dissolution or liquidation of the Company, each Offering Period
will terminate immediately prior to the consummation of such proposed action, unless otherwise
provided by the Board. The Board may, in the exercise of its sole discretion in such instances,
declare that the options under the Plan shall terminate as of a date fixed by the Board and give
each participant the right to exercise his or her option as to all of the optioned stock, including
shares which would not otherwise be exercisable. 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 such successor corporation or a parent or subsidiary of such successor corporation,
unless the Board determines, in the exercise of its sole discretion and in lieu of such assumption
or substitution, that the participant shall have the right to exercise the option as to all of the
optioned stock. If the Board makes an option exercisable in lieu of assumption or substitution in
the event of a merger or sale of assets, the Board shall notify the participant that the option
shall be fully exercisable for a period of twenty (20) days from the date of such notice, and the
option will terminate upon the expiration of such period.

     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.

15. NONASSIGNABILITY

     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 22 hereof) by the participant. Any such attempt at assignment, transfer, pledge
or other disposition shall be without effect.

5

 

16. REPORTS

     Individual accounts will be maintained for each participant in the Plan. Each participant
shall receive promptly after the end of each Purchase Period a report of his account setting forth
the total payroll deductions accumulated, the number of shares purchased, the per share price
thereof and the remaining cash balance, if any, carried forward to the next Purchase Period or
Offering Period, as the case may be.

17. NOTICE OF DISPOSITION

     Each participant shall notify the Company if the participant disposes of any of the shares
purchased in any Offering Period pursuant to this Plan if such disposition occurs within two years
from the Offering Date or within six months from the Purchase Date on which such shares were
purchased (the “Notice Period”). Unless such participant is disposing of any of such shares during
the Notice Period, such participant shall keep the certificates representing such shares in his or
her name (and not in the name of a nominee) during the Notice Period. The Company may, at any time
during the Notice Period, place a legend or legends on any certificate representing shares acquired
pursuant to the Plan requesting the Company’s transfer agent to notify the Company of any transfer
of the shares. The obligation of the participant to provide such notice shall continue
notwithstanding the placement of any such legend on certificates.

18. NO RIGHTS TO CONTINUED EMPLOYMENT

     Neither this Plan nor the grant of any option hereunder shall confer any right on any employee
to remain in the employ of the Company or any Subsidiary or restrict the right of the Company or
any Subsidiary to terminate such employee’s employment.

19. EQUAL RIGHTS AND PRIVILEGES

     All eligible employees shall have equal rights and privileges with respect to the Plan so that
the Plan qualifies as an “employee stock purchase plan” within the meaning of Section 423 or any
successor provision of the Code and the related regulations. Any provision of the Plan which is
inconsistent with Section 423 or any successor provision of the Code shall without further act or
amendment by the Company or the Board be reformed to comply with the requirements of Section 423.
This Section 19 shall take precedence over all other provisions in the Plan.

20. NOTICES

     All notices or other communications by a participant to the Company under or 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 receipt thereof.

21. STOCKHOLDER APPROVAL

     Any required approval of the stockholders of the Company shall be solicited substantially in
accordance with Section 14(a) of the Securities Exchange Act of 1934, as amended (the “Exchange
Act”), and the rules and regulations promulgated thereunder. Such approval of an amendment shall be
solicited at or prior to the first annual meeting of stockholders held subsequent to the grant of
an option under the Plan as then amended to an officer or director of the Company.

22. DESIGNATION OF BENEFICIARY

     (a) A participant may file a written designation of a beneficiary who is to receive any shares
and cash, if any, from the participant’s account under the Plan in the event of such participant’s
death subsequent to the end of a Purchase Period but prior to delivery to him of such shares and
cash. In addition, a participant may file a written designation of a beneficiary who is to receive
any cash from the participant’s account under the Plan in the event of such participant’s death
prior to a Purchase Date.

     (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 and in the absence of a beneficiary validly
designated under the Plan who is living at the time of such participant’s death, the Company shall
deliver such shares or cash to the executor or administrator

6

 

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 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
designate.

23. 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 Exchange Act, 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.

24. APPLICABLE LAW

     The Plan shall be governed by the substantive laws (excluding the conflict of laws rules) of
the State of Delaware.

25. AMENDMENT OR TERMINATION OF THE PLAN

     The Plan shall continue until the earlier to occur of termination by the Board, issuance of
all of the shares of Common Stock reserved for issuance under the Plan, or January 1, 2009. The
Board of Directors of the Company may at any time amend or terminate the Plan, except that any such
termination cannot affect options previously granted under the Plan, nor may any amendment make any
change in an option previously granted which would adversely affect the right of any participant;
provided that if the Board determines that a change in applicable accounting rules or a change in
applicable laws, renders an amendment or termination desirable, then the Board may approve such an
amendment or termination. The Board may not amend the Plan without approval of the stockholders of
the Company obtained in accordance with Section 21 hereof within 12 months of the adoption of such
amendment (or earlier if required by Section 21) if such amendment would:

          (a) Increase the number of shares that may be issued under the Plan; or

          (b) Change the designation of the employees (or class of employees) eligible for participation
in the Plan.

     Notwithstanding the foregoing, the Board may make such amendments to the Plan as the Board
determines to be advisable, if the continuation of the Plan or any Offering Period would result in
financial accounting treatment for the Plan that is different from the financial accounting
treatment in effect on the date this Plan is adopted by the Board.

7

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