Document:

exv10w21

 

Exhibit 10.21

Mr. Jim Feenstra

November 1, 2006

Dear Jim:

This letter sets forth the terms of the separation agreement (the “Agreement”) that Hansen Medical,
Inc. (the “Company”) is offering to you to aid in your employment transition.

     1. Resignation Date. You hereby resign as President and Chief Operating Officer
effective as of October 20, 2006 and the Company hereby accepts your resignation of such positions.
You shall remain employed as an at-will employee of Hansen to work on such projects as the Chief
Executive Officer shall determine until November 30, 2006 at which time you shall resign from any
and all positions with Hansen (the “Resignation Date”). Through the Resignation Date: (a) you will
not have authority to bind the Company or make management decisions; (b) you shall refrain from
communicating with Company employees or Company business contacts; and (c) you shall not enter or
use the Company’s offices except as requested by the Chief Executive Officer. Of course, if you
fail to comply with this Agreement, violate Company policies, or fail to diligently work on the
projects provided to you by the Chief Executive Officer, the Company will have the right to
accelerate the Resignation Date.

     2. Accrued Salary and Vacation Pay. On the Resignation Date, the Company will pay you all
accrued salary and all accrued and unused vacation (if any) earned by you through the Resignation
Date, less standard payroll deductions and withholdings. You are entitled to these payments by
law.

     3. Severance Pay. Although the Company is not otherwise obligated to do so, if you sign and
return this Agreement to the Company, and allow it to become effective, and if you comply with your
obligations hereunder, the Company will pay you as severance (the “Severance”) an amount equivalent
to five (5) months of your base salary in effect as of the Resignation Date, subject to applicable
deductions and withholdings. The Severance will be paid on the Company’s ordinary payroll dates,
beginning with the first payroll date following the Resignation Date. In the event that the
Company determines that any payments or benefits provided hereunder (including but not limited to
the Severance or the Health Insurance Reimbursement discussed in Section 5), fail to satisfy the
distribution requirement of Section 409A(a)(2)(A) of the Internal Revenue Code of 1986, as amended
(the “Code”) as a result of Section 409A(a)(2)(B)(i) of the Code, then such payments or benefits
shall not be made pursuant to the schedules provided herein and instead the payments or benefits
shall be accelerated, delayed or otherwise restructured, as determined by the Company, to the
minimum extent necessary so that such payments or benefits are not subject to the provisions of
Section 409A(a)(1) of the Code. The Company may attach conditions to or adjust the amounts paid
pursuant hereto to preserve, as closely as possible, the economic consequences that would have

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applied in the absence of this and the preceding sentence; provided, however, that no such
condition or adjustment shall result in the payments or benefits being subject to Section
409A(a)(1) of the Code.

     4. Post-Resignation Consulting. As part of this Agreement and a condition of your receipt of
the Severance and other benefits to be provided to you hereunder, you agree to make yourself
available to consult with the Chief Executive Officer, President or any other executive officer to
the extent reasonably requested and for a reasonable period of time following the Resignation Date.
You understand that you will not earn or be entitled to receive any additional payments or
reimbursements for such consulting.

     5. Health Insurance. To the extent provided by the federal COBRA law or, if applicable, state
insurance laws, and by the Company’s current group health insurance policies, you will be eligible
to continue your group health insurance benefits at your own expense following the Resignation
Date. Later, you may be able to convert to an individual policy through the provider of the
Company’s health insurance, if you wish. You will be provided with a separate notice describing
your rights and obligations under the applicable state and/or federal insurance laws. If you
timely elect such continued health insurance coverage, the Company, as part of this Agreement and
an additional severance benefit, will reimburse your health insurance premiums sufficient to
continue your group health insurance coverage at the same level in effect as of the Resignation
Date (including dependent coverage, if any) for up to five (5) months following the Resignation
Date, unless and until you become eligible for other health coverage with another employer which
provides coverage for you and your family (the “Health Insurance Reimbursement”). You agree to
notify the Company in writing immediately upon commencing other employment that provides health
insurance benefits.

     6. Transfer of Laptop Ownership. Provided that you have satisfied the conditions for receipt
of Severance hereunder, the Company hereby transfers to you its ownership interests in the
Company’s laptop computer provided to you for your use during your employment (the “Laptop”),
effective as of the Resignation Date. The Laptop will be provided to you “as is” without warranty
or guarantee of any kind.

     7. Stock Options. All of your stock option grants (the “Options”) pursuant to the Company’s
2002 Stock Plan (the “Plan”) will cease to vest as of the Resignation Date. You acknowledge and
agree that those Options that shall not be vested as of the Resignation Date (an aggregate of
1,262,300 shares (pre-split)) shall be cancelled effective as of October 20, 2006 and returned to
the Company. As of the Resignation Date, an aggregate of 485,500 shares (pre-split) subject to the
Options will be vested and exercisable (the “Vested Shares”). Your rights to exercise the Vested
Shares following the Resignation Date, if any, are set forth in the Plan and related agreements for
the Options.

     8. No Other Compensation or Benefits. You acknowledge that, except as expressly provided in
this Agreement, you have not earned and will not receive from the Company any additional
compensation, severance, or benefits relating to or arising from your employment with the Company,
before or after the Resignation Date, with the exception of any vested right you may have under the
express terms of a written ERISA-qualified benefit plan (e.g., 401(k) account) or any vested Option
shares. By way of example, you acknowledge that

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you are not owed any bonus, incentive compensation, commissions or equity, except as may be
expressly provided herein.

     9. Expense Reimbursement. You agree that, within thirty (30) days after the Resignation Date,
you will submit your final documented expense reimbursement statement reflecting all business
expenses you incurred through the Resignation Date, if any, for which you seek reimbursement. The
Company will reimburse you for such expenses pursuant to its regular business practice.

     10. Return of Company Property. On or before the Resignation Date, you shall return to the
Company all Company documents (and all copies thereof) and, except for the Laptop discussed in
Section 6, all other Company property in your possession or control, including, but not limited to,
Company files, notes, correspondence, memoranda, notebooks, drawings, records, reports, lists,
compilations of data, proposals, agreements, drafts, minutes, studies, plans, forecasts, purchase
orders, business cards and stationery, financial and operational information, technical and
training information, research and development information, customer information and contact lists,
sales and marketing information, personnel information, vendor information, promotional literature
and instructions, product and manufacturing information, computer-recorded information, electronic
information (including e-mail and correspondence), other tangible property and equipment, credit
cards, entry cards, identification badges and keys; and any materials of any kind that contain or
embody any proprietary or confidential information of the Company (and all reproductions thereof in
whole or in part). You agree that you will make a diligent search to locate any such documents,
property and information. In addition, if you have used any personally owned computer, server, or
e-mail system to receive, store, prepare or transmit any Company confidential or proprietary data,
materials or information, you agree to immediately provide the Company with a computer-useable copy
of all such information, and you then agree to permanently delete and expunge all Company
confidential or proprietary information and data from those systems; and you agree to provide the
Company access to your system as reasonably requested to verify that the necessary copying and/or
deletion is completed; and further, with respect to the Laptop, you shall follow all of the same
procedures set forth above in this sentence prior to or on the Resignation Date. Your timely
compliance with this Section 10 is a precondition to your receipt of the Severance, Health
Insurance Reimbursement, Laptop, and other benefits provided under this Agreement.

     11. Proprietary Information Obligations. You hereby acknowledge your continuing obligations
under your Proprietary Information and Inventions Agreement, a copy of which is attached hereto as
Exhibit A.

     12. Confidentiality. The provisions of this Agreement will be held in strictest confidence by
you and the Company and will not be publicized or disclosed in any manner whatsoever; provided,
however, that: (a) you may disclose this Agreement in confidence to your immediate family; (b) the
parties may disclose this Agreement in confidence to their respective attorneys, accountants,
auditors, tax preparers, and financial advisors; (c) the Company may disclose this Agreement as
necessary to fulfill standard or legally required corporate reporting or disclosure requirements;
and (d) the parties may disclose this Agreement insofar as such disclosure may be necessary to
enforce its terms or as otherwise required by law. In particular,

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and without limitation, you agree not to disclose the terms of this Agreement to any current
or former Company employee, or independent contractor of the Company.

     13. Nondisparagement. You agree not to disparage the Company, or its officers, directors,
employees, shareholders and agents, in any manner likely to be harmful to them or their business,
business reputations or personal reputations; and the Company (through its officers and directors)
agrees not to disparage you in any manner likely to be harmful to you or your business, business
reputation or personal reputation; provided that you and the Company may respond accurately and
fully to any inquiry or request for information if required by legal process.

     14. No Admissions. The promises and payments in consideration of this Agreement shall not be
construed to be an admission of any liability or obligation by either party to the other party, and
neither party makes any such admission.

     15. No Voluntary Adverse Action. You agree that you will not voluntarily (except in response
to legal compulsion) assist any third party in bringing or pursuing any proposed or pending
litigation, arbitration, administrative claim or other formal proceeding against the Company, its
parent or subsidiary entities, affiliates, officers, directors, employees or agents.

     16. Cooperation. You agree to cooperate fully with the Company in connection with its actual
or contemplated defense, prosecution, or investigation of any claims or demands by or against third
parties, or other matters arising from events, acts, or failures to act that occurred during the
period of your employment by the Company. Such cooperation includes, without limitation, making
yourself available to the Company upon reasonable notice, without subpoena, to provide complete,
truthful and accurate information in witness interviews, depositions, and trial testimony. The
Company will reimburse you for reasonable out-of-pocket expenses you incur in connection with any
such cooperation (excluding forgone wages, salary, or other compensation), and will make reasonable
efforts to accommodate your scheduling needs. In addition, you agree to execute all documents (if
any) necessary to carry out the terms of this Agreement.

     17. Nonsolicitation. Before and for one (1) year after the Resignation Date, you will not
directly or indirectly, recruit, solicit, entice, induce, or encourage any employee, independent
contractor, or consultant of the Company to terminate a relationship with the Company in order to
become an employee, independent contractor, or consultant for any other person or entity.

     18. Release of Claims. In exchange for the consideration under this Agreement to which you
would not otherwise be entitled, including but not limited to the Severance, the Health Insurance
Reimbursement, and the Laptop, you hereby generally and completely release, acquit and forever
discharge the Company and its parent, subsidiary, and affiliated entities (along with their
predecessors and successors) and their directors, officers, employees, shareholders, partners,
agents, attorneys, insurers, affiliates and assigns, from any and all claims, liabilities and
obligations, both known and unknown, that arise from or are in any way related to events, acts,
conduct, or omissions occurring at any time prior to and including the date you sign this
Agreement. This general release includes, but is not limited to: (a) all claims arising out of or
in any way related to your employment with the Company or the termination of that employment;

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(b) all claims related to your compensation or benefits from the Company, including salary,
bonuses, commissions, vacation pay, expense reimbursements, severance payments, fringe benefits,
stock, stock options, or any other ownership or equity interests in the Company; (c) all claims for
breach of contract, wrongful termination, and breach of the implied covenant of good faith and fair
dealing; (d) all tort claims, including but not limited to claims for fraud, defamation, emotional
distress, and discharge in violation of public policy; and (e) all federal, state, and local
statutory claims, including but not limited to claims for discrimination, harassment, retaliation,
attorneys’ fees, or other claims arising under the federal Civil Rights Act of 1964 (as amended),
the federal Americans with Disabilities Act of 1990 (as amended), the federal Age Discrimination in
Employment Act of 1967 (as amended) (the “ADEA”), the California Labor Code, and the California
Fair Employment and Housing Act. Notwithstanding the foregoing, you are not hereby releasing the
Company from any obligation it has undertaken in this Agreement or any obligation it may otherwise
have to indemnify you for your acts within the course and scope of your employment with the
Company, pursuant to the articles and bylaws of the Company, any fully executed written agreement
with the Company, or applicable law. You represent that you have no lawsuits, claims or actions
pending in your name, or on behalf of any other person or entity, against the Company or any other
person or entity subject to the release granted in this paragraph.

     19. ADEA Waiver. You acknowledge that you are knowingly and voluntarily waiving and releasing
any rights you may have under the ADEA, and that the consideration given for the waiver and release
in the preceding paragraph hereof is in addition to anything of value to which you are already
entitled. You further acknowledge that you have been advised, as required by the ADEA, that: (a)
your waiver and release do not apply to any rights or claims that may arise after the date that you
sign this Agreement; (b) you should consult with an attorney prior to signing this Agreement
(although you may choose voluntarily not to do so); (c) you have twenty-one (21) days from the date
you receive this Agreement to consider this Agreement (although you may choose voluntarily to sign
it earlier); (d) you have seven (7) days following the date you sign this Agreement to revoke the
Agreement by providing written notice of your revocation to the Chief Executive Officer; and (e)
this Agreement will not be effective until the date upon which the revocation period has expired,
which will be the eighth day after the date that this Agreement is signed by you (the “Effective
Date”).

     20. Section 1542 Waiver. In giving the releases set forth in this Agreement, which include
claims which may be unknown to you at present, you acknowledge that you have read and understand
Section 1542 of the California Civil Code which reads as follows: “A general release does not
extend to claims which the creditor does not know or suspect to exist in his favor at the time of
executing the release, which if known by him must have materially affected his settlement with the
debtor.” You hereby expressly waive and relinquish all rights and benefits under that section and
any law or legal principle of similar effect in any jurisdiction with respect to the releases
granted herein, including but not limited to the release of unknown and unsuspected claims granted
in this Agreement.

     21. Representations. You hereby represent that, except as expressly provided in this
Agreement, you have been paid all compensation owed and for all hours worked, have received all the
leave and leave benefits and protections for which you are eligible, pursuant to the Family

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and Medical Leave Act or otherwise, and have not suffered any on-the-job injury for which you
have not already filed a workers’ compensation claim.

     22. Dispute Resolution. To aid in the rapid and economical resolution of any disputes which
may arise under this Agreement, you and the Company agree that any and all claims, disputes or
controversies of any nature whatsoever arising from or regarding the interpretation, performance,
negotiation, execution, enforcement or breach of this Agreement shall be resolved by confidential,
final and binding arbitration conducted before a single arbitrator with Judicial Arbitration and
Mediation Services, Inc. (“JAMS”) in San Francisco, California, under JAMS’ then-applicable
arbitration rules. The parties acknowledge that by agreeing to this arbitration procedure, they
waive the right to resolve any such dispute through a trial by jury, judge or administrative
proceeding. You will have the right to be represented by legal counsel at any arbitration
proceeding. The arbitrator shall: (a) have the authority to compel adequate discovery for the
resolution of the dispute and to award such relief as would otherwise be available under applicable
law in a court proceeding; and (b) issue a written statement signed by the arbitrator regarding the
disposition of each claim and the relief, if any, awarded as to each claim, the reasons for the
award, and the arbitrator’s essential findings and conclusions on which the award is based. The
Company shall bear the JAMS arbitration fees and administrative costs. Nothing in this Agreement
shall prevent either you or the Company from obtaining injunctive relief in court to prevent
irreparable harm pending the conclusion of any such arbitration.

     23. Miscellaneous. This Agreement, including Exhibit A, constitutes the complete, final and
exclusive embodiment of the entire agreement between you and the Company with regard to this
subject matter. It is entered into without reliance on any promise or representation, written or
oral, other than those expressly contained herein, and it supersedes any other such promises,
warranties or representations. This Agreement may not be modified or amended except in a writing
signed by both you and a duly authorized officer of the Company. This Agreement will bind the
heirs, personal representatives, successors and assigns of both you and the Company, and inure to
the benefit of both you and the Company, their heirs, successors and assigns. If any provision of
this Agreement is determined to be invalid or unenforceable, in whole or in part, this
determination will not affect any other provision of this Agreement and the provision in question
will be modified by the court so as to be rendered enforceable. This Agreement will be deemed to
have been entered into and will be construed and enforced in accordance with the laws of the State
of California without regard to conflicts of law principles. This Agreement may be executed in
counterparts, each of which shall be deemed to part of one original, and facsimile signatures shall
be equivalent to original signatures.

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If this Agreement is acceptable to you, please sign below on or within twenty-one (21) days and
return the Agreement to me. If you do not return the fully signed Agreement by such date, the
Company’s offer contained herein will automatically expire.

I wish you the best in your future endeavors.

Sincerely,

Hansen Medical, Inc.

	 	 	 	 	 
	By:

	 	/s/ Frederic H. Moll
 

Frederic Moll, Chief Executive Officer
	 	 

Exhibit A –Proprietary Information and Inventions Agreement

Understood and Agreed:

	 	 	 
	/s/ Jim Feenstra
 

Jim Feenstra

	 	 

Date: 11/01/06

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Exhibit A

Proprietary Information and Inventions Agreement

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Exhibit 10.19

LSI LOGIC CORPORATION

2003 EQUITY INCENTIVE PLAN

(Amended and Restated May 5, 2004)

 

 

TABLE OF CONTENTS

	 	 	 
	 	 	Page
	 
	 	 
	SECTION 1 BACKGROUND AND PURPOSE
	 	1
	 
	 	 
	1.1 Background and Effective Date
	 	1
	1.2 Purpose of the Plan
	 	1
	 
	 	 
	SECTION 2 DEFINITIONS
	 	1
	 
	 	 
	2.1 “1934 Act”
	 	1
	2.2 “Affiliate”
	 	1
	2.3 “Award”
	 	1
	2.4 “Award Agreement”
	 	1
	2.5 “Board” or “Board of Directors”
	 	1
	2.6 “Cash Flow”
	 	1
	2.7 “Code”
	 	2
	2.8 “Committee”
	 	2
	2.9 “Company”
	 	2
	2.10 “Director”
	 	2
	2.11 “Disability”
	 	2
	2.12 “Earnings Per Share”
	 	2
	2.13 “Employee”
	 	2
	2.14 “Exchange Program”
	 	2
	2.15 “Exercise Price”
	 	2
	2.16 “Fair Market Value”
	 	2
	2.17 “Fiscal Year”
	 	2
	2.18 “Grant Date”
	 	2
	2.19 “Incentive Stock Option”
	 	2
	2.20 “Measurement Period”
	 	3
	2.21 “Nonemployee Director”
	 	3
	2.22 “Nonqualified Stock Option”
	 	3
	2.23 “Option”
	 	3
	2.24 “Participant”
	 	3
	2.25 “Performance Goals”
	 	3
	2.26 “Period of Restriction”
	 	3
	2.27 “Plan”
	 	3
	2.28 “Profit After Tax”
	 	3
	2.29 “Profit Before Tax”
	 	3
	2.30 “Restricted Stock”
	 	3
	2.31 “Restricted Stock Unit”
	 	3
	2.32 “Retirement”
	 	4
	2.33 “Return on Capital”
	 	4
	2.34 “Return on Equity”
	 	4
	2.35 “Return on Sales”
	 	4
	2.36 “Revenue”
	 	4
	2.37 “Rule 16b-3”
	 	4
	2.38 “Section 16 Person”
	 	4

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TABLE OF CONTENTS
(continued)

	 	 	 
	 	 	Page
	2.39 “Shares”
	 	4
	2.40 “Stock Unit”
	 	4
	2.41 “Subsidiary”
	 	4
	2.42 “Termination of Service”
	 	4
	2.43 “Total Shareholder Return”
	 	4
	 
	 	 
	SECTION 3 ADMINISTRATION
	 	5
	 
	 	 
	3.1 The Committee
	 	5
	3.2 Authority of the Committee
	 	5
	3.3 Delegation by the Committee
	 	5
	3.4 Decisions Binding
	 	5
	 
	 	 
	SECTION 4 SHARES SUBJECT TO THE PLAN
	 	5
	 
	 	 
	4.1 Number of Shares
	 	5
	4.2 Lapsed Awards
	 	5
	4.3 Adjustments in Awards and Authorized Shares
	 	5
	 
	 	 
	SECTION 5 STOCK OPTIONS
	 	6
	 
	 	 
	5.1 Grant of Options
	 	6
	5.2 Award Agreement
	 	6
	5.3 Exercise Price
	 	6
	5.4 Expiration of Options
	 	7
	5.5 Exercisability of Options
	 	7
	5.6 Payment
	 	7
	5.7 Restrictions on Share Transferability
	 	8
	5.8 Certain Additional Provisions for Incentive Stock Options
	 	8
	 
	 	 
	SECTION 6 RESTRICTED STOCK
	 	8
	 
	 	 
	6.1 Grant of Restricted Stock
	 	8
	6.2 Restricted Stock Agreement
	 	8
	6.3 Transferability
	 	9
	6.4 Other Restrictions
	 	9
	6.5 Removal of Restrictions
	 	9
	6.6 Voting Rights
	 	9
	6.7 Dividends and Other Distributions
	 	9
	6.8 Return of Restricted Stock to Company
	 	9
	 
	 	 
	SECTION 7 RESTRICTED STOCK UNITS
	 	10
	 
	 	 
	7.1 Grant of Restricted Stock Units
	 	10
	7.2 Restricted Stock Unit Agreement
	 	10
	7.3 Transferability
	 	10
	7.4 Other Restrictions
	 	10
	7.5 Award Payout
	 	10
	7.6 Dividends and Other Distributions
	 	11
	7.7 Cancellation
	 	11

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TABLE OF CONTENTS
(continued)

	 	 	 
	 	 	Page
	SECTION 8 MISCELLANEOUS
	 	11
	 
	 	 
	8.1 Deferrals
	 	11
	8.2 No Effect on Employment or Service
	 	11
	8.3 Participation
	 	11
	8.4 Indemnification
	 	11
	8.5 Successors
	 	11
	8.6 Limited Transferability of Awards
	 	12
	8.7 Beneficiary Designations
	 	12
	8.8 No Rights as Stockholder
	 	12
	 
	 	 
	SECTION 9 AMENDMENT, TERMINATION, AND DURATION
	 	12
	 
	 	 
	9.1 Amendment, Suspension, or Termination
	 	12
	9.2 Duration of the Plan
	 	12
	 
	 	 
	SECTION 10 TAX WITHHOLDING
	 	13
	 
	 	 
	10.1 Withholding Requirements
	 	13
	10.2 Withholding Arrangements
	 	13
	 
	 	 
	SECTION 11 LEGAL CONSTRUCTION
	 	13
	 
	 	 
	11.1 Gender and Number
	 	13
	11.2 Severability
	 	13
	11.3 Requirements of Law
	 	13
	11.4 Securities Law Compliance
	 	13
	11.5 Governing Law
	 	13
	11.6 Captions
	 	13

-iii-

 

LSI LOGIC CORPORATION

2003 EQUITY INCENTIVE PLAN

SECTION 1

BACKGROUND AND PURPOSE

     1.1 Background and Effective Date. The Plan permits the grant of Nonqualified Stock
Options, Incentive Stock Options, Restricted Stock and Restricted
Stock Units. The Plan was
effective as of March 20, 2003, and was amended and restated in May
2004.

     1.2 Purpose of the Plan. The Plan is intended to attract, motivate, and retain
employees of the Company and its Affiliates. The Plan also is designed to encourage stock
ownership by Participants, thereby aligning their interests with those of the Company’s
shareholders and to permit the payment of compensation that qualifies as performance-based
compensation under section 162(m) of the Code.

SECTION 2

DEFINITIONS

     The following words and phrases shall have the following meanings unless a different meaning
is plainly required by the context:

     2.1 “1934 Act” means the Securities Exchange Act of 1934, as amended. Reference to a
specific section of the 1934 Act or regulation thereunder shall include such section or regulation,
any valid regulation promulgated under such section, and any comparable provision of any future
legislation or regulation amending, supplementing or superseding such section or regulation.

     2.2 “Affiliate” means any corporation or any other entity (including, but not limited
to, partnerships and joint ventures) controlling, controlled by, or under common control with the
Company.

     2.3 “Award” means, individually or collectively, a grant under the Plan of
Nonqualified Stock Options, Incentive Stock Options, Restricted Stock and/or Restricted Stock
Units.

     2.4 “Award Agreement”
means the written agreement setting forth the terms and provisions applicable to each Award
granted under the Plan.

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

     2.6 “Cash Flow” means the Company’s or a business unit’s sum of Profit After Tax plus
depreciation and amortization less capital expenditures plus changes in working capital comprised
of accounts receivable, inventories, other current assets, trade accounts payable, accrued
expenses, product warranty, advance payments from customers and long-term accrued expenses,
determined in accordance with generally acceptable accounting principles.

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     2.7 “Code” means the Internal Revenue Code of 1986, as amended. Reference to a
specific section of the Code or regulation thereunder shall include such section or regulation, any
valid regulation promulgated under such section, and any comparable provision of any future
legislation or regulation amending, supplementing or superseding such section or regulation.

     2.8 “Committee” means the committee appointed by the Board (pursuant to Section 3.1)
to administer the Plan.

     2.9 “Company” means LSI Logic Corporation, a Delaware corporation, or any successor
thereto.

     2.10 “Director” means any individual who is a member of the Board of Directors of the
Company.

     2.11 “Disability” means a permanent and total disability determined in accordance
with uniform and nondiscriminatory standards adopted by the Committee from time to time.

     2.12 “Earnings Per Share” means the Company’s or a business unit’s Profit After Tax,
divided by a weighted average number of common shares outstanding and dilutive common equivalent
shares deemed outstanding, determined in accordance with generally accepted accounting principles.

     2.13 “Employee” means any employee of the Company or of an Affiliate, whether such
employee is so employed at the time the Plan is adopted or becomes so employed subsequent to the
adoption of the Plan.

     2.14 “Exchange Program” means a program established by the Committee under which
outstanding Awards are amended to provide for a lower Exercise Price or surrendered or cancelled in
exchange for (a) Awards with a different Exercise Price, (b) a different type of Award, (c) cash,
or (d) a combination of (a), (b) and/or (c).

     2.15 “Exercise Price” means the price at which a Share may be purchased by a
Participant pursuant to the exercise of an Option.

     2.16 “Fair Market Value” means the closing price per Share on the New York Stock
Exchange on the relevant date, or if there were no sales on such date, the closing price per Share
on the nearest day before the relevant date, as determined by the Committee. Notwithstanding the
preceding, for federal, state, and local income tax reporting purposes, fair market value shall be
determined by the Committee (or its delegate) in accordance with uniform and nondiscriminatory
standards adopted by it from time to time.

     2.17 “Fiscal Year” means the fiscal year of the Company.

     2.18 “Grant Date” means, with respect to an Award, the date that the Award was
granted.

     2.19 “Incentive Stock Option” means an Option to purchase Shares that is designated
as an Incentive Stock Option and is intended to meet the requirements of Section 422 of the Code.

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     2.20 “Measurement Period” means the period during which the satisfaction of
performance objectives will be measured to earn a payout of Stock Units. As provided in Section 7,
such performance objectives may be based on the passage of time, the achievement of target levels
of performance, or the occurrence of other events or conditions, as determined by the Committee, in
its discretion.

     2.21 “Nonemployee Director” means a Director who is an employee of neither the
Company nor of any Affiliate.

     2.22 “Nonqualified Stock Option” means an option to purchase Shares that is not
intended to be an Incentive Stock Option.

     2.23 “Option” means an Incentive Stock Option or a Nonqualified Stock Option.

     2.24 “Participant” means an Employee or Nonemployee Director who has an outstanding
Award.

     2.25 “Performance Goals” means the goal(s) (or combined goal(s)) determined by the
Committee (in its discretion) to be applicable to a Participant with respect to an Award. As
determined by the Committee, the Performance Goals applicable to an Award may provide for a
targeted level or levels of achievement using one or more of the following measures: (a) Cash Flow,
(b) Earnings per Share, (c) Profit After Tax, and (d) Profit Before Tax, (e) Return on Capital, (f)
Return on Equity, (g) Return on Sales, (h) Revenue, (i) Total Shareholder Return. The Performance
Goals may differ from Participant to Participant and from Award to Award. Prior to the
Determination Date, the Committee shall determine whether any significant element(s) shall be
included in or excluded from the calculation of any Performance Goal with respect to any
Participants.

     2.26 “Period of Restriction” means the period during which the transfer of Shares of
Restricted Stock are subject to restrictions and therefore, the Shares are subject to a substantial
risk of forfeiture. As provided in Section 6, such restrictions may be based on the passage of
time, the achievement of target levels of performance, or the occurrence of other events or
conditions, as determined by the Committee, in its discretion.

     2.27 “Plan” means the LSI Logic Corporation 2003 Equity Incentive Plan, as set forth
in this instrument and as hereafter amended from time to time.

     2.28 “Profit After Tax” means the Company’s or a business unit’s income after taxes,
determined in accordance with generally accepted accounting principles.

     2.29 “Profit Before Tax” means the Company’s or a business unit’s income before
taxes, determined in accordance with generally accepted accounting principles.

     2.30 “Restricted Stock” means an Award granted to a Participant pursuant to Section
6.

     2.31 “Restricted Stock Unit” means an Award granted to a Participant pursuant to
Section 7.

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     2.32 “Retirement” means a Termination of Service occurring on or after the earlier of
(a) age sixty-five (65), or (b) age fifty-five (55) and the completion of ten (10) years of service
with the Company or an Affiliate.

     2.33 “Return on Capital” means the Company’s or a business unit’s Profit After Tax
divided by Company’s or business unit’s, as applicable, average invested capital, determined in
accordance with generally accepted accounting principles.

     2.34 “Return on Equity” means the percentage equal to the Company’s Profit After Tax
divided by average stockholder’s equity, determined in accordance with generally accepted
accounting principles.

     2.35 “Return on Sales” means the percentage equal to the Company’s or a business
unit’s Profit After Tax, divided by the Company’s or the business unit’s, as applicable, Revenue,
determined in accordance with generally accepted accounting principles.

     2.36 “Revenue” means the Company’s or business unit’s net sales, determined in
accordance with generally accepted accounting principles.

     2.37 “Rule 16b-3” means Rule 16b-3 promulgated under the 1934 Act, and any future
regulation amending, supplementing or superseding such regulation.

     2.38 “Section 16 Person” means a person who, with respect to the Shares, is subject
to Section 16 of the 1934 Act.

     2.39 “Shares” means the shares of common stock of the Company.

     2.40 “Stock Unit” means a bookkeeping entry initially representing any amount
equivalent to the Fair Market Value of one Share. Stock Units represent an unfunded and unsecured
obligation of the Company.

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

     2.42 “Termination of Service” means (a) in the case of an Employee, a cessation of
the employee-employer relationship between the Employee and the Company or an Affiliate for any
reason, including, but not by way of limitation, a termination by resignation, discharge, death,
Disability, Retirement, or the disaffiliation of an Affiliate, but excluding any such termination
where there is a simultaneous reemployment by the Company or an Affiliate; and (b) in the case of a
Nonemployee Director, a cessation of the Director’s service on the Board for any reason, including,
but not by way of limitation, a termination by resignation, death, Disability, Retirement or
non-reelection to the Board.

     2.43 “Total Shareholder Return” means the total return (change in share price plus
reinvestment of any dividends) of a Share.

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SECTION 3

ADMINISTRATION

     3.1 The Committee. The Plan shall be administered by the Committee. The Committee
shall consist of not less than two (2) Directors who shall be appointed from time to time by, and
shall serve at the pleasure of, the Board of Directors. The Committee shall be comprised solely of
Directors who both are (a) ”non-employee directors” under Rule 16b-3, and (b) “outside directors”
under Section 162(m) of the Code.

     3.2 Authority of the Committee. It shall be the duty of the Committee to administer
the Plan in accordance with the Plan’s provisions. The Committee shall have all powers and
discretion necessary or appropriate to administer the Plan and to control its operation, including,
but not limited to, the power to (a) determine which Employees (including Employees who also are
Directors) shall be granted Awards, (b) prescribe the terms and conditions of the Awards, (c)
interpret the Plan and the Awards,
(d) adopt such procedures and subplans as are necessary or appropriate to permit participation
in the Plan by Employees (including Employees who also are Directors) who are foreign nationals or
employed outside of the United States, (e) adopt rules for the administration, interpretation and
application of the Plan as are consistent therewith and (f) interpret, amend or revoke any such
rules. Notwithstanding any contrary provision of the Plan, the Committee shall not have the
authority to implement an Exchange Program without the approval of the Company’s stockholders.

     3.3 Delegation by the Committee. The Committee, in its sole discretion and on such
terms and conditions as it may provide, may delegate all or any part of its authority and powers
under the Plan to one or more Directors or officers of the Company; provided, however, that the
Committee may not delegate its authority and powers (a) with respect to Section 16 Persons, or (b)
in any way which would jeopardize the Plan’s qualification under Section 162(m) of the Code or Rule
16b-3.

     3.4 Decisions Binding. All determinations and decisions made by the Committee, the
Board, and any delegate of the Committee pursuant to the provisions of the Plan shall be final,
conclusive, and binding on all persons, and shall be given the maximum deference permitted by law.

SECTION 4

SHARES SUBJECT TO THE PLAN

     4.1 Number of Shares. Subject to adjustment as provided in Section 4.3, the total
number of Shares available for grant under the Plan shall not exceed 11,000,000. Shares granted
under the Plan may be either authorized but unissued Shares or treasury Shares.

     4.2 Lapsed Awards. If an Award is cancelled, terminates, expires, or lapses for any
reason, any Shares subject to such Award again shall be available to be the subject of an Award,
except as determined by the Committee.

     4.3 Adjustments in Awards and Authorized Shares. In the event that any dividend or
other distribution (whether in the form of cash, Shares, other securities, or other property),
recapitalization, stock split, reverse stock split, reorganization, merger, consolidation,
split-up, spin- 

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off, combination, repurchase, or exchange of Shares or other securities of the
Company, or other change in the corporate structure of the Company affecting the Shares such that
an adjustment is determined by the Committee (in its sole discretion) to be appropriate in order to
prevent dilution or enlargement of the benefits or potential benefits intended to be made available
under the Plan, then the Committee shall, in such manner as it may deem equitable, adjust the
number and class of Shares and Stock Units that may be delivered under the Plan, the number, class,
and price of Shares and Stock Units subject to outstanding Awards, and the
numerical limits of Sections 5.1, 6.1 and 7.1. Notwithstanding the preceding, the number of
Shares or Stock Units subject to any Award always shall be a whole number.

SECTION 5

STOCK OPTIONS

     5.1 Grant of Options. Subject to the terms and provisions of the Plan, Options may be
granted to Employees at any time and from time to time as determined by the Committee in its sole
discretion. The Committee, in its sole discretion, shall determine the number of Shares subject to
each Option, provided that during any Fiscal Year, no Participant shall be granted Options covering
more than 2,000,000 Shares. The Committee may grant Incentive Stock Options, Nonqualified Stock
Options, or a combination thereof.

     5.2 Award Agreement. Each Option shall be evidenced by an Award Agreement that shall
specify the Exercise Price, the expiration date of the Option, the number of Shares to which the
Option pertains, any conditions to exercise of the Option, and such other terms and conditions as
the Committee, in its discretion, shall determine. The Award Agreement shall also specify whether
the Option is intended to be an Incentive Stock Option or a Nonqualified Stock Option.

     5.3 Exercise Price. Subject to the provisions of this Section 5.3, the Exercise Price
for each Option shall be determined by the Committee in its sole discretion.

          5.3.1 Nonqualified Stock Options. In the case of a Nonqualified Stock Option, the
Exercise Price shall be not less than one hundred percent (100%) of the Fair Market Value of a
Share on the Grant Date.

          5.3.2 Incentive Stock Options. In the case of an Incentive Stock Option, the Exercise
Price shall be not less than one hundred percent (100%) of the Fair Market Value of a Share on the
Grant Date; provided, however, that if on the Grant Date, the Employee (together with persons whose
stock ownership is attributed to the Employee pursuant to Section 424(d) of the Code) owns stock
possessing more than 10% of the total combined voting power of all classes of stock of the Company
or any of its Subsidiaries, the Exercise Price shall be not less than one hundred and ten percent
(110%) of the Fair Market Value of a Share on the Grant Date.

          5.3.3 Substitute Options. Notwithstanding the provisions of Sections 5.3.1 and 5.3.2,
in the event that the Company or an Affiliate consummates a transaction described in Section 424(a)
of the Code (e.g., the acquisition of property or stock from an unrelated corporation), persons who
become Employees or Nonemployee Directors on account of such transaction may be granted Options in
substitution for options granted by their former employer. If such substitute Options are granted,
the Committee, in its sole discretion and consistent with Section 424(a) of the

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Code, may determine that such substitute Options shall have an exercise price less than one
hundred percent (100%) of the Fair Market Value of the Shares on the Grant Date.

     5.4 Expiration of Options.

          5.4.1 Expiration Dates. Each Option shall terminate no later than the first to occur
of the following events:

               (a) The date for termination of the Option set forth in the written Award Agreement; or

               (b) The expiration of seven (7) years from the Grant Date.

          5.4.2 Death of Participant. Notwithstanding Section 5.4.1, if a Participant dies
prior to the expiration of his or her Options, the Committee, in its discretion, may provide that
his or her Options shall be exercisable for up to three (3) years after the date of death.

          5.4.3 Committee Discretion. Subject to the limits of Sections 5.4.1 and 5.4.2, the
Committee, in its sole discretion, (a) shall provide in each Award Agreement when each Option
expires and becomes unexercisable, and (b) may, after an Option is granted, extend the maximum term
of the Option (subject to Section 5.8.4 regarding Incentive Stock Options).

     5.5 Exercisability of Options. Options granted under the Plan shall be exercisable at
such times and be subject to such restrictions and conditions as the Committee shall determine in
its sole discretion. After an Option is granted, the Committee, in its sole discretion, may
accelerate the exercisability of the Option.

     5.6 Payment. Options shall be exercised by the Participant’s delivery of a notice of
exercise to the Corporate Secretary of the Company (or its designee), setting forth the number of
Shares with respect to which the Option is to be exercised, accompanied by full payment for the
Shares. The notice shall be given in the form and manner specified by the Company from time to
time.

          Upon the exercise of any Option, the Exercise Price shall be payable to the Company in full in
cash or its equivalent. The Committee, in its sole discretion, also may permit exercise (a) by
tendering previously acquired Shares having an aggregate Fair Market Value at the time of exercise
equal to the total Exercise Price, or (b) by any other means which the Committee, in its sole
discretion, determines to both provide legal consideration for the Shares, and to be consistent
with the purposes of the Plan. As soon as practicable after receipt of a written notification of
exercise and full payment for the Shares purchased, the Company shall deliver to the Participant
(or the Participant’s designated broker), Share certificates (which may be in book entry form)
representing such Shares.

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     5.7 Restrictions on Share Transferability. The Committee may impose such restrictions
on any Shares acquired pursuant to the exercise of an Option as it may deem advisable, including,
but not limited to, restrictions related to applicable federal securities laws, the requirements of
any national securities exchange or system upon which Shares are then listed or traded, or any blue
sky or state securities laws.

     5.8 Certain Additional Provisions for Incentive Stock Options.

          5.8.1 Exercisability. The aggregate Fair Market Value (determined on the Grant
Date(s)) of the Shares with respect to which Incentive Stock Options are exercisable for the first
time by any Employee during any calendar year (under all plans of the Company and its Subsidiaries)
shall not exceed $100,000.

          5.8.2 Termination of Service. No Incentive Stock Option may be exercised more than
three (3) months after the Participant’s Termination of Service for any reason other than
Disability or death, unless (a) the Participant dies during such three-month period, and (b) the
Award Agreement or the Committee permits later exercise. No Incentive Stock Option may be
exercised more than one (1) year after the Participant’s Termination of Service on account of
Disability, unless (a) the Participant dies during such one-year period, and (b) the Award
Agreement or the Committee permit later exercise.

          5.8.3 Company and Subsidiaries Only. Incentive Stock Options may be granted only to
persons who are employees of the Company or a Subsidiary on the Grant Date.

          5.8.4 Expiration. No Incentive Stock Option may be exercised after the expiration of
seven (7) years from the Grant Date; provided, however, that if the Option is granted to an
Employee who, together with persons whose stock ownership is attributed to the Employee pursuant to
Section 424(d) of the Code, owns stock possessing more than 10% of the total combined voting power
of all classes of the stock of the Company or any of its Subsidiaries, the Option may not be
exercised after the expiration of five (5) years from the Grant Date.

SECTION 6

RESTRICTED STOCK

     6.1 Grant of Restricted Stock. Subject to the terms and provisions of the Plan, the
Committee, at any time and from time to time, may grant shares of Restricted Stock to Employees in
such amounts as the Committee, in its sole discretion, shall determine. The Committee, in its sole
discretion, shall determine the number of Shares to be granted to each Participant as Restricted
Stock, provided that during any Fiscal Year, the sum of the number of Restricted Stock Units and
Shares of Restricted Stock granted to any one Participant shall not exceed 500,000 .

     6.2 Restricted Stock Agreement. Each Award of Restricted Stock shall be evidenced by an Award Agreement that shall specify
the Period of Restriction, the number of Shares granted, and such other terms and conditions as the
Committee, in its sole discretion, shall determine. Unless the Committee determines otherwise,
shares of Restricted Stock shall be held by the Company as escrow agent until the restrictions on
such Shares have lapsed.

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     6.3 Transferability. Except as provided in this Section 6, shares of Restricted Stock
may not be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated until the
end of the applicable Period of Restriction.

     6.4 Other Restrictions. The Committee, in its sole discretion, may impose such other
restrictions on shares of Restricted Stock as it may deem advisable or appropriate, in accordance
with this Section 6.4.

          6.4.1 General Restrictions. The Committee may set restrictions based upon the
achievement of specific performance objectives (Company-wide, divisional, or individual),
applicable federal or state securities laws, or any other basis determined by the Committee in its
discretion.

          6.4.2 Section 162(m) Performance Restrictions. For purposes of qualifying grants of
Restricted Stock as “performance-based compensation” under Section 162(m) of the Code, the
Committee, in its discretion, may set restrictions based upon the achievement of Performance Goals.
The Performance Goals shall be set by the Committee on or before the latest date permissible to
enable the Restricted Stock to qualify as “performance-based compensation” under Section 162(m) of
the Code. In granting Restricted Stock that is intended to qualify under Section 162(m) of the
Code, the Committee shall follow any procedures determined by it from time to time to be necessary
or appropriate to ensure qualification of the Restricted Stock under Section 162(m) of the Code
(e.g., in determining the Performance Goals).

          6.4.3 Legend on Certificates. The Committee, in its discretion, may legend the
certificates representing Restricted Stock to give appropriate notice of such restrictions.

     6.5 Removal of Restrictions. Except as otherwise provided in this Section 6, Shares
of Restricted Stock covered by each Restricted Stock grant made under the Plan shall be released
from escrow as soon as practicable after the last day of the Period of Restriction. The Committee,
in its discretion, may accelerate the time at which any restrictions shall lapse or be removed.
After the restrictions have lapsed, the Participant shall be entitled to have any legend or legends
under Section 6.4.3 removed from his or her Share certificate, and the Shares shall be freely
transferable by the Participant.

     6.6 Voting Rights. During the Period of Restriction, Participants holding Shares of Restricted Stock granted
hereunder may exercise full voting rights with respect to those Shares, unless the Committee
determines otherwise.

     6.7 Dividends and Other Distributions. During the Period of Restriction, Participants
holding Shares of Restricted Stock shall be entitled to receive all dividends and other
distributions paid with respect to such Shares unless otherwise provided in the Award Agreement.
If any such dividends or distributions are paid in Shares, the Shares shall be subject to the same
restrictions on transferability and forfeitability as the Shares of Restricted Stock with respect
to which they were paid.

     6.8 Return of Restricted Stock to Company. On the date set forth in the Award
Agreement, the Restricted Stock for which restrictions have not lapsed shall revert to the Company
and again shall become available for grant under the Plan.

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SECTION 7

RESTRICTED STOCK UNITS

     7.1 Grant of Restricted Stock Units. Subject to the terms and provisions of the Plan,
the Committee, at any time and from time to time, may grant Restricted Stock Units to Employees in
such amounts as the Committee, in its sole discretion, shall determine. The Committee, in its sole
discretion, shall determine the number of Restricted Stock Units to be granted to each Participant,
provided that during any Fiscal Year, the sum of the number of Restricted Stock Units and Shares of
Restricted Stock granted to any one Participant shall not exceed 500,000.

     7.2 Restricted Stock Unit Agreement. Each Award of Restricted Stock Units shall be
evidenced by an Award Agreement that shall specify the Measurement Period, the number of Restricted
Stock Units granted, and such other terms and conditions as the Committee, in its sole discretion,
shall determine.

     7.3 Transferability. Except as provided in this Section 7, Restricted Stock Units may
not be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated.

     7.4 Other Restrictions. The Committee, in its sole discretion, may impose such other
restrictions on Restricted Stock Units as it may deem advisable or appropriate, in accordance with
this Section 7.4.

          7.4.1 General Restrictions. The Committee may set restrictions based upon the
achievement of specific performance objectives (Company-wide, divisional, or individual),
applicable federal or state securities laws, or any other basis determined by the Committee in
its discretion.

          7.4.2 Section 162(m) Performance Restrictions. For purposes of qualifying grants of
Restricted Stock Units as “performance-based compensation” under Section 162(m) of the Code, the
Committee, in its discretion, may set performance objectives based upon the achievement of
Performance Goals. The Performance Goals shall be set by the Committee on or before the latest
date permissible to enable the Restricted Stock Units to qualify as “performance-based
compensation” under Section 162(m) of the Code. In granting Restricted Stock Units that are
intended to qualify under Section 162(m) of the Code, the Committee shall follow any procedures
determined by it from time to time to be necessary or appropriate to ensure qualification of the
Restricted Stock Units under Section 162(m) of the Code (e.g., in determining the Performance
Goals).

     7.5 Award Payout. After the applicable Measurement Period has ended, the Participant
shall be entitled to receive a payout of the number of Stock Units earned during the Measurement
Period.

          7.5.1 Earning Restricted Stock Units. An Employee shall earn Stock Units under a
Restricted Stock Unit Award by meeting the specified performance objectives. The number of Stock
Units earned will depend on the extent to which the performance objectives are met.

          7.5.2 Form and Timing of Payment. Except as otherwise provided in this Section 7,
payment of earned Stock Units shall be made as soon as practicable after the expiration of the

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applicable Measurement Period. The Committee, in its sole discretion, may pay such earned Stock
Units in cash, Shares, or a combination thereof.

     7.6 Dividends and Other Distributions. During the Measurement Period, Participants
holding Restricted Stock Units shall be entitled to be credited with all dividends and other
distributions paid with respect to the underlying Shares, unless otherwise provided in the Award
Agreement. Such dividends and distributions shall be deemed reinvested in Stock Units, which shall
be subject to the same terms and conditions as the underlying Award.

     7.7 Cancellation. On the date set forth in the Award Agreement, all unearned Stock
Units shall be forfeited to the Company, and again shall be available for grant under the Plan.

SECTION 8

MISCELLANEOUS

     8.1 Deferrals. The Committee, in its sole discretion, may permit a Participant to
defer receipt of the payment of cash or the delivery of Shares that would otherwise be due to such
Participant under an
Award. Any such deferral elections shall be subject to such rules and procedures as shall be
determined by the Committee in its sole discretion.

     8.2 No Effect on Employment or Service. Nothing in the Plan shall interfere with or
limit in any way the right of the Company to terminate any Participant’s employment or service at
any time, with or without cause. For purposes of the Plan, transfer of employment of a Participant
between the Company and any one of its Affiliates (or between Affiliates) shall not be deemed a
Termination of Service. Employment with the Company and its Affiliates is on an at-will basis
only.

     8.3 Participation. No Employee shall have the right to be selected to receive an
Award under this Plan, or, having been so selected, to be selected to receive a future Award.

     8.4 Indemnification. Each person who is or shall have been a member of the Committee,
or of the Board, shall be indemnified and held harmless by the Company against and from (a) any
loss, cost, liability, or expense that may be imposed upon or reasonably incurred by him or her in
connection with or resulting from any claim, action, suit, or proceeding to which he or she may be
a party or in which he or she may be involved by reason of any action taken or failure to act under
the Plan or any Award Agreement, and (b) from any and all amounts paid by him or her in settlement
thereof, with the Company’s approval, or paid by him or her in satisfaction of any judgment in any
such claim, action, suit, or proceeding against him or her, provided he or she shall give the
Company an opportunity, at its own expense, to handle and defend the same before he or she
undertakes to handle and defend it on his or her own behalf. The foregoing right of
indemnification shall not be exclusive of any other rights of indemnification to which such persons
may be entitled under the Company’s Certificate of Incorporation or Bylaws, by contract, as a
matter of law, or otherwise, or under any power that the Company may have to indemnify them or hold
them harmless.

     8.5 Successors. All obligations of the Company under the Plan, with respect to Awards
granted hereunder, shall be binding on any successor to the Company, whether the existence of such
successor is the result of a direct or indirect purchase, merger, consolidation, or otherwise, of
all or substantially all of the business or assets of the Company.

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     8.6 Limited Transferability of Awards. No Award granted under the Plan may be sold,
transferred, pledged, assigned, or otherwise alienated or hypothecated, other than by will, by the
laws of descent and distribution. All rights with respect to an Award granted to a Participant
shall be available during his or her lifetime only to the Participant. Notwithstanding the
foregoing, after the Plan becomes effective, the Committee (in its sole discretion) may determine
that a Participant may, in a manner specified by the Committee, (a) transfer a Nonqualified Stock
Option to a Participant’s spouse, former spouse or dependent pursuant to a court-approved domestic
relations order which relates to the provision of child support,
alimony payments or marital property rights, and (b) transfer a Nonqualified Stock Option by
bona fide gift and not for any consideration, to (i) a member or members of the Participant’s
immediate family, (ii) a trust established for the exclusive benefit of the Participant and/or
member(s) of the Participant’s immediate family, (iii) a partnership, limited liability company of
other entity whose only partners or members are the Participant and/or member(s) of the
Participant’s immediate family, or (iv) a foundation in which the Participant an/or member(s) of
the Participant’s immediate family control the management of the foundation’s assets. The
transferability provisions provided in the preceding sentence shall be effective only if expressly
determined by the Committee after the effective date of the Plan.

     8.7 Beneficiary Designations. Notwithstanding any contrary provisions of Section 8.6,
after the Plan becomes effective, the Committee (in its sole discretion) may determine that a
Participant under the Plan may name a beneficiary or beneficiaries to whom any vested but unpaid
Award shall be paid in the event of the Participant’s death. Each such designation shall revoke
all prior designations by the Participant and shall be effective only if given in a form and manner
acceptable to the Committee. In the absence of any such designation, any vested benefits remaining
unpaid at the Participant’s death shall be paid to the Participant’s estate and, subject to the
terms of the Plan and of the applicable Award Agreement, any unexercised vested Award may be
exercised by the administrator or executor of the Participant’s estate. The provisions of this
Section 8.7 shall be effective only if expressly determined by the Committee after the effective
date of the Plan.

     8.8 No Rights as Stockholder. Except to the limited extent provided in Sections 6.6
and 6.7, no Participant (nor any beneficiary) shall have any of the rights or privileges of a
stockholder of the Company with respect to any Shares issuable pursuant to an Award (or exercise
thereof), unless and until certificates representing such Shares shall have been issued, recorded
on the records of the Company or its transfer agents or registrars, and delivered to the
Participant (or beneficiary).

SECTION 9

AMENDMENT, TERMINATION, AND DURATION

     9.1 Amendment, Suspension, or Termination. The Board, in its sole discretion, may
amend, suspend or terminate the Plan, or any part thereof, at any time and for any reason. The
amendment, suspension, or termination of the Plan shall not, without the consent of the
Participant, alter or impair any rights or obligations under any Award theretofore granted to such
Participant. No Award may be granted during any period of suspension or after termination of the
Plan.

     9.2 Duration of the Plan. The Plan shall be effective as of March 20, 2003, and
subject to Section 9.1 (regarding the Board’s right to amend or terminate the Plan), shall remain
in effect thereafter. However, without
further stockholder approval, no Incentive Stock Option may be granted under the Plan after
March 19, 2013.

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SECTION 10

TAX WITHHOLDING

     10.1 Withholding Requirements. Prior to the delivery of any Shares or cash pursuant
to an Award (or exercise thereof), the Company shall have the power and the right to deduct or
withhold, or require a Participant to remit to the Company, an amount sufficient to satisfy
federal, state, and local taxes (including the Participant’s FICA obligation) required to be
withheld with respect to such Award (or exercise thereof).

     10.2 Withholding Arrangements. The Committee, in its sole discretion and pursuant to
such procedures as it may specify from time to time, may permit a Participant to satisfy such tax
withholding obligation, in whole or in part by (a) electing to have the Company withhold otherwise
deliverable Shares, or (b) delivering to the Company already-owned Shares having a Fair Market
Value equal to the minimum amount required to be withheld.

SECTION 11

LEGAL CONSTRUCTION

     11.1 Gender and Number. Except where otherwise indicated by the context, any
masculine term used herein also shall include the feminine; the plural shall include the singular
and the singular shall include the plural.

     11.2 Severability. In the event any provision of the Plan shall be held illegal or
invalid for any reason, the illegality or invalidity shall not affect the remaining parts of the
Plan, and the Plan shall be construed and enforced as if the illegal or invalid provision had not
been included.

     11.3 Requirements of Law. The granting of Awards and the issuance of Shares under the
Plan shall be subject to all applicable laws, rules, and regulations, and to such approvals by any
governmental agencies or national securities exchanges as may be required.

     11.4 Securities Law Compliance. With respect to Section 16 Persons, transactions
under this Plan are intended to comply with all applicable conditions of Rule 16b-3. To the extent
any provision of the Plan, Award
Agreement or action by the Committee fails to so comply, it shall be deemed null and void, to
the extent permitted by law and deemed advisable by the Committee.

     11.5 Governing Law. The Plan and all Award Agreements shall be construed in
accordance with and governed by the laws of the State of California.

     11.6 Captions. Captions are provided herein for convenience only, and shall not serve
as a basis for interpretation or construction of the Plan.

-13-

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00113-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00113-of-00352.parquet"}]]