Document:

exv10w14

 

Exhibit 10.14

VERITAS Software Corporation

2002 Directors Stock Option Plan

(As Adopted Effective May 14, 2002)

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	 	 	Page	 
	 
	 	 	 	 
	ARTICLE 1. INTRODUCTION
	 	 	1	 
	 
	 	 	 	 
	ARTICLE 2. ADMINISTRATION
	 	 	1	 
	2.1 Committee Composition
	 	 	1	 
	2.2 Committee Responsibilities
	 	 	1	 
	 
	 	 	 	 
	ARTICLE 3. SHARES AVAILABLE FOR GRANTS
	 	 	1	 
	3.1 Basic Limitation
	 	 	1	 
	3.3 Additional Shares
	 	 	2	 
	 
	 	 	 	 
	ARTICLE 4. AUTOMATIC OPTION GRANTS TO NON-EMPLOYEE DIRECTORS
	 	 	2	 
	4.1 Eligibility
	 	 	2	 
	4.2 Initial Grants
	 	 	2	 
	4.3 Annual Grants
	 	 	2	 
	4.4 Committee Service
	 	 	2	 
	4.5 Exercisability and Vesting
	 	 	2	 
	4.6 Accelerated Vesting
	 	 	3	 
	4.7 Exercise Price
	 	 	3	 
	4.8 Term
	 	 	3	 
	4.9 Affiliates of Non-Employee Directors
	 	 	3	 
	4.10 Stock Option Agreement
	 	 	3	 
	4.11 Option Transferability
	 	 	4	 
	 
	 	 	 	 
	ARTICLE 5. PAYMENT FOR OPTION SHARES
	 	 	4	 
	5.1 Cash
	 	 	4	 
	5.2 Surrender of Stock
	 	 	4	 
	5.3 Exercise/Sale
	 	 	4	 
	5.4 Other Forms of Payment
	 	 	4	 
	 
	 	 	 	 
	ARTICLE 6. PROTECTION AGAINST DILUTION
	 	 	4	 
	6.1 Adjustments
	 	 	4	 
	6.2 Dissolution or Liquidation
	 	 	5	 
	9.3 Reorganizations
	 	 	5	 
	 
	 	 	 	 
	ARTICLE 7. LIMITATION ON RIGHTS
	 	 	5	 
	7.1 Stockholders’ Rights
	 	 	5	 
	7.2 Regulatory Requirements
	 	 	5	 
	7.3 Withholding Taxes
	 	 	6	 
	 
	 	 	 	 
	ARTICLE 8. FUTURE OF THE PLAN
	 	 	6	 
	8.1 Term of the Plan
	 	 	6	 
	8.2 Amendment or Termination
	 	 	6	 
	 
	 	 	 	 
	ARTICLE 9. DEFINITIONS
	 	 	6	 

i

 

VERITAS Software Corporation

2002 Directors Stock Option Plan

	     ARTICLE 1.	 	INTRODUCTION.

     The Board adopted the Plan effective as of May 14, 2002. The purpose of the Plan is to
promote the long-term success of the Company and the creation of stockholder value by (a)
encouraging Non-Employee Directors to focus on critical long-range objectives, (b) encouraging the
attraction and retention of Non-Employee Directors with exceptional qualifications and (c) linking
Non-Employee Directors directly to stockholder interests through increased stock ownership. The
Plan seeks to achieve this purpose by providing for automatic and non-discretionary grants of
Options to Non-Employee Directors.

     The Plan shall be governed by, and construed in accordance with, the laws of the State of
Delaware (except their choice-of-law provisions).

	     ARTICLE 2.	 	ADMINISTRATION.

          2.1
Committee Composition. The Committee shall administer the Plan. The Committee shall
consist exclusively of two or more directors of the Company, who shall be appointed by the Board.
In addition, the composition of the Committee shall satisfy such requirements as the Securities and
Exchange Commission may establish for administrators acting under plans intended to qualify for
exemption under Rule 16b-3 (or its successor) under the Exchange Act.

          2.2 Committee Responsibilities. The Committee shall interpret the Plan and make all decisions
relating to the operation of the Plan. The Committee may adopt such rules or guidelines as it
deems appropriate to implement the Plan. The Committee’s determinations under the Plan shall be
final and binding on all persons.

	     ARTICLE 3.	 	SHARES AVAILABLE FOR GRANTS.

          3.1 Basic Limitation. Shares of Common Stock issued pursuant to the Plan may be authorized
but unissued shares or treasury shares. The aggregate number of shares of Common Stock subject to
Options granted under the Plan shall not exceed (a) 1,900,258 plus (b) the additional shares of
Common Stock described in

 

 

Section 3.2. The limitations of this Section 3.1 shall be subject to adjustment pursuant to
Article 6.

          3.2 Additional Shares. If Options are forfeited or terminate for any other reason before
being exercised, then the shares of Common Stock subject to such Options shall again become
available for the grant of Options under the Plan.

	     ARTICLE 4.	 	AUTOMATIC OPTION GRANTS TO NON-EMPLOYEE DIRECTORS.

          4.1 Eligibility. Only Non-Employee Directors shall be eligible for the grant of Options under
the Plan.

          4.2 Initial Grants. Each Non-Employee Director who first becomes a member of the Board shall
receive an automatic one-time grant of an Option covering between 50,000 and 100,000 shares of
Common Stock. The specific number of shares covered by such Option shall be determined by the
Board at its discretion on a periodic basis, but in no event shall the number of shares granted
exceed 100,000. Such Option shall be granted on the date when such Non-Employee Director first
joins the Board. A Non-Employee Director who previously was an Employee shall not receive a grant
under this Section 4.2.

          4.3 Annual Grants. Upon the conclusion of each regular annual meeting of the Company’s
stockholders held in the year 2002 or thereafter, each Non-Employee Director who will continue
serving as a member of the Board thereafter shall receive an Option covering 10,000 and 50,000
shares of Common Stock, except that such Option shall not be granted in the calendar year in which
the same Non-Employee Director received the Option described in Section 4.2. The specific number
of shares covered by such Option shall be determined by the Board at its discretion on a periodic
basis, but in no event shall the number of shares granted exceed 50,000. A Non-Employee Director
who previously was an Employee shall be eligible to receive grants under this Section 4.3.

          4.4 Committee Service. Upon the conclusion of each regular annual meeting of the Company’s
stockholders held in the year 2002 and thereafter, each Non-Employee Director who serves on a
committee of the Board shall receive once per year, an automatic grant of an Option covering 10,000
shares of Common Stock for the first committee on which such director serves and 5,000 shares of
Common Stock for each additional committee on which such director serves. A Non-Employee Director
who previously was an Employee shall be eligible to receive grants under this Section 4.4.

          4.5 Exercisability and Vesting. Each automatic grant made pursuant to Sections 4.2, 4.3, and
4.4 herein shall be immediately exercisable for any or all of the Option shares. Any shares
purchased under the Option shall be subject to repurchase by the Company, at the exercise price
paid per share, upon the Optionee’s cessation of Service prior to vesting in those shares. Subject
to the Non-

2

 

Employee Director’s continuing Service, each Option granted under Sections 4.2, 4.3, and 4.4
shall become vested in equal monthly installments over the 48-month period commencing on the date
of grant.

          Vesting of the Option shares shall be subject to acceleration as provided in Sections 4.6 and
6.3. In no event, however, shall any additional Option shares vest after the Optionee’s cessation
of Service.

          4.6 Accelerated Vesting. Options granted to a Non-Employee Director under this Article 4
shall also become vested as follows:

     (a) In the event that such Non-Employee Director’s Service terminates because
of death, the shares of Common Stock at the time subject to each outstanding Option
but not otherwise vested shall automatically vest and the Company’s repurchase right
shall lapse as to 50% of the then unvested shares; and

     (b) In the event that the Company is subject to a Change in Control before such
Non-Employee Director’s Service terminates, all of the shares purchasable under the
Options, shall become vested and the Company’s repurchase right shall lapse with
respect thereto.

          4.7 Exercise Price. The Exercise Price under all Options granted to a Non-Employee Director
under this Article 4 shall be equal to 100% of the Fair Market Value of a share of Common Stock on
the date of grant, payable in one of the forms described in Article 5.

          4.8 Term. All Options granted to a Non-Employee Director under this Article 4 shall terminate
on the earliest of (a) the 10th anniversary of the date of grant, (b) the date 6 months after the
termination of such Non-Employee Director’s Service for any reason other than death or Disability,
or (c) the date 12 months after the termination of such Non-Employee Director’s Service because of
death or Disability.

          4.9 Affiliates of Non-Employee Directors. The Committee may provide that the Options that
otherwise would be granted to a Non-Employee Director under this Article 4 shall instead be granted
to an affiliate of such Non-Employee Director. Such affiliate shall then be deemed to be a
Non-Employee Director for purposes of the Plan, provided that the Service-related vesting and
termination provisions pertaining to the Options shall be applied with regard to the Service of the
Non-Employee Director.

          4.10 Stock Option Agreement. Each grant of an Option under the Plan shall be evidenced by a
Stock Option Agreement between the Optionee and the Company. Such Option shall be subject to all
applicable terms of the Plan and may be subject to any other terms that are not inconsistent with
the Plan.

3

 

          4.11 Option Transferability. Prior to death, only an Optionee may exercise an Option. If an
Optionee attempts to transfer (other than through a will or beneficiary designation), assign, sell
or use an Option as security for a loan the Option will immediately become invalid. However, the
Committee may, in its sole discretion, allow an Optionee to transfer an Option as a gift to members
of the Optionee’s Immediate Family or to trusts or partnerships for the exclusive benefit of
members of Optionee’s Immediate Family. Such transfer will only be allowed if both the Optionee
and the transferee(s) execute the forms prescribed by the Committee, which shall include the
consent of the transferee(s) to be bound by the terms of the Optionee’s Stock Option Agreement.

	     ARTICLE 5.	 	PAYMENT FOR OPTION SHARES.

          5.1 Cash. All or any part of the Exercise Price may be paid in cash or cash equivalents.

          5.2 Surrender of Stock. All or any part of the Exercise Price may be paid by surrendering, or
attesting to the ownership of, shares of Common Stock that are already owned by the Optionee. Such
shares of Common Stock shall be valued at their Fair Market Value on the date when the new shares
of Common Stock are purchased under the Plan. The Optionee shall not surrender, or attest to the
ownership of, shares of Common Stock in payment of the Exercise Price if such action would cause
the Company to recognize compensation expense (or additional compensation expense) with respect to
the Option for financial reporting purposes.

          5.3 Exercise/Sale. All or any part of the Exercise Price and any withholding taxes may be
paid by delivering (on a form prescribed by the Company) an irrevocable direction to a securities
broker approved by the Company to sell all or part of the shares of Common Stock being purchased
under the Plan and to deliver all or part of the sales proceeds to the Company.

          5.4 Other Forms of Payment. At the sole discretion of the Committee, all or any part of the
Exercise Price and any withholding taxes may be paid in any other form that is consistent with
applicable laws, regulations and rules.

	     ARTICLE 6.	 	PROTECTION AGAINST DILUTION.

          6.1 Adjustments. In the event of a subdivision of the outstanding shares of Common Stock, a
declaration of a dividend payable in shares of Common Stock or a combination or consolidation of
the outstanding shares of Common Stock (by reclassification or otherwise) into a lesser number of
shares of Common Stock, corresponding adjustments shall automatically be made in each of the
following:

4

 

     (a) The number of Options available for future grants under Article 3;

     (b) The number of Options automatically granted under Article 4;

     (c) The number of shares of Common Stock covered by each outstanding Option;
and

     (d) The Exercise Price under each outstanding Option.

In the event of a declaration of an extraordinary dividend payable in a form other than shares of
Common Stock in an amount that has a material effect on the price of shares of Common Stock, a
recapitalization, a spin-off or a similar occurrence, the Committee shall make such adjustments as
it, in its sole discretion, deems appropriate in one or more of the foregoing. Except as provided
in this Article 6, an Optionee shall have no rights by reason of any issuance by the Company of
stock of any class or securities convertible into stock of any class, any subdivision or
consolidation of shares of stock of any class, the payment of any stock dividend or any other
increase or decrease in the number of shares of stock of any class.

          6.2 Dissolution or Liquidation. To the extent not previously exercised, Options shall
terminate immediately prior to the dissolution or liquidation of the Company.

          6.3 Reorganizations. In the event that the Company is a party to a merger or other
reorganization, outstanding Options shall be subject to the agreement of merger or reorganization.
Such agreement shall provide for (a) the continuation of the outstanding Options by the Company, if
the Company is a surviving corporation, (b) the assumption of the outstanding Options by the
surviving corporation or its parent or subsidiary, (c) the substitution by the surviving
corporation or its parent or subsidiary of its own options for the outstanding Options, (d) full
exercisability and accelerated expiration of the outstanding Options or (e) settlement of the full
value of the outstanding Options in cash or cash equivalents followed by cancellation of such
Options.

	     ARTICLE 7.	 	LIMITATION ON RIGHTS.

          7.1 Stockholders’ Rights. An Optionee shall have no dividend rights, voting rights or other
rights as a stockholder with respect to any shares of Common Stock covered by his or her Option
prior to the time when he or she becomes entitled to receive such shares of Common Stock by filing
a notice of exercise and paying the Exercise Price. No adjustment shall be made for cash dividends
or other rights for which the record date is prior to such time, except as expressly provided in
the Plan.

          7.2 Regulatory Requirements. Any other provision of the Plan notwithstanding, the obligation
of the Company to issue

5

 

shares of Common Stock under the Plan shall be subject to all applicable laws, rules and
regulations and such approval by any regulatory body as may be required. The Company reserves the
right to restrict, in whole or in part, the delivery of shares of Common Stock pursuant to any
Option prior to the satisfaction of all legal requirements relating to the issuance of such shares
of Common Stock, to their registration, qualification or listing or to an exemption from
registration, qualification or listing.

          7.3 Withholding Taxes. To the extent required by applicable federal, state, local or foreign
law, an Optionee or his or her successor shall make arrangements satisfactory to the Company for
the satisfaction of any withholding tax obligations that arise in connection with the Plan. The
Company shall not be required to issue any shares of Common Stock or make any cash payment under
the Plan until such obligations are satisfied.

	     ARTICLE 8.	 	FUTURE OF THE PLAN.

          8.1 Term of the Plan. The Plan, as set forth herein, shall become effective on the date of
the Company’s 2002 Annual Meeting of Stockholders. The Plan shall remain in effect until it is
terminated under Section 8.2.

          8.2 Amendment or Termination. The Board may, at any time and for any reason, amend or
terminate the Plan. An amendment of the Plan shall be subject to the approval of the Company’s
stockholders only to the extent required by applicable laws, regulations or rules. No Options
shall be granted under the Plan after the termination thereof. The termination of the Plan, or any
amendment thereof, shall not affect any Option previously granted under the Plan.

	     ARTICLE 9.	 	DEFINITIONS.

          9.1 “Board” means the Company’s Board of Directors, as constituted from time to time.

          9.2 “Change in Control” means:

     (a) The consummation of a merger or consolidation of the Company with or into
another entity or any other corporate reorganization, if persons who were not
stockholders of the Company immediately prior to such merger, consolidation or other
reorganization own immediately after such merger, consolidation or other
reorganization 50% or more of the voting power of the outstanding securities of each
of (i) the continuing or surviving entity and (ii) any direct or indirect parent
corporation of such continuing or surviving entity;

     (b) The sale, transfer or other disposition of all or substantially all of the
Company’s assets;

6

 

     (c) A change in the composition of the Board, as a result of which fewer than
50% of the incumbent directors are directors who either (i) had been directors of
the Company on the date 24 months prior to the date of the event that may constitute
a Change in Control (the “original directors”) or (ii) were elected, or nominated
for election, to the Board with the affirmative votes of at least a majority of the
aggregate of the original directors who were still in office at the time of the
election or nomination and the directors whose election or nomination was previously
so approved; or

     (d) Any transaction as a result of which any person is the “beneficial owner”
(as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of
securities of the Company representing at least 50% of the total voting power
represented by the Company’s then outstanding voting securities. For purposes of
this Subsection (d), the term “person” shall have the same meaning as when used in
sections 13(d) and 14(d) of the Exchange Act but shall exclude (i) a trustee or
other fiduciary holding securities under an employee benefit plan of the Company or
of a Parent or Subsidiary and (ii) a corporation owned directly or indirectly by the
stockholders of the Company in substantially the same proportions as their ownership
of the common stock of the Company.

A transaction shall not constitute a Change in Control if its sole purpose is to change the state
of the Company’s incorporation or to create a holding company that will be owned in substantially
the same proportions by the persons who held the Company’s securities immediately before such
transaction.

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

          9.4 “Committee” means a committee of the Board, as described in Article 2.

          9.5 “Common Stock” means the common stock of the Company.

          9.6 “Company” means VERITAS Software Corporation, a Delaware corporation.

          9.7 “Disability” shall mean permanent and total disability (as defined in Section 22(e)(3) of
the Code).

          9.8 “Employee” means a common-law employee of the Company, a Parent or a Subsidiary.

          9.9 “Exchange Act” means the Securities Exchange Act of 1934, as amended.

          9.10 “Exercise Price” means the amount for which one share of Common Stock may be purchased
upon exercise of such Option, as specified in the applicable Stock Option Agreement.

          9.11 “Fair Market Value” means the market price of shares of Common Stock, determined by the
Committee in good faith on such basis as it deems appropriate.

7

 

Whenever possible, the determination of Fair Market Value by the Committee shall be based on
the prices reported in The Wall Street Journal. Such determination shall be conclusive and
binding on all persons.

          9.12 “Immediate Family” means any child, stepchild, grandchild, parent, stepparent,
grandparent, spouse, sibling, mother-in-law, father-in-law, son-in-law, daughter-in-law,
brother-in-law or sister-in-law and shall include adoptive relationships.

          9.13 “Non-Employee Director” means a member of the Board who is not an Employee.

          9.14 “Option” means an option granted under the Plan and entitling the holder to purchase
shares of Common Stock. Options do not qualify as incentive stock options described in section
422(b) of the Code.

          9.15 “Optionee” means an individual, estate, or affiliate of a Non-Employee Director that
holds an Option.

          9.16 “Parent” means any corporation (other than the Company) in an unbroken chain of
corporations ending with the Company, if each of the 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. A corporation that attains the status of a Parent on a date
after the adoption of the Plan shall be considered a Parent commencing as of such date.

          9.17 “Plan” means this VERITAS Software Corporation 2002 Directors Stock Option Plan, as
amended from time to time.

          9.18 “Service” means service as a member of the Board.

          9.19 “Stock Option Agreement” means the agreement between the Company and an Optionee that
contains the terms, conditions and restrictions pertaining to his or her Option.

          9.20 “Subsidiary” means any corporation (other than the Company) in an unbroken chain of
corporations beginning with the Company, if 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. A corporation that
attains the status of a Subsidiary on a date after the adoption of the Plan shall be considered a
Subsidiary commencing as of such date.

8

 

Exhibit A

Form of Stock Option Agreement

 

 

VERITAS Software Corporation

2002 Directors Stock Option Plan

Stock Option Agreement

	 	 	 	 	 
	Tax Treatment	 	This option is intended to be a nonstatutory stock option and is not intended to qualify under
section 422 of the Internal Revenue Code as an incentive stock option.
	 
	 	 	 	 
	Exercisability of Option	 	You may immediately exercise all or part of this option, as shown in the Notice
of Stock Option Grant.
	 
	 	 	 	 
	Vesting of Option Shares	 	The shares covered by this option vest in installments, as shown in the Notice
of Stock Option Grant. In addition, the shares covered by this option shall
vest on an accelerated basis as follows:
	 
	 	 	 	 
	 

	 	•
	 	In the event that your service on the Board of Directors terminates
because of death, the shares of common stock subject to this option but not
otherwise vested at such time shall automatically vest as to and the Company’s
repurchase right shall lapse as to 50% of the then unvested shares.
	 
	 	 	 	 
	 

	 	•
	 	In the event that the Company is subject to a “Change in Control” (as
defined in the Plan) before your Board service terminates, all of the shares
purchasable under the options, shall become vested and the Company’s repurchase
right shall lapse with respect thereto.
In no event will additional shares vest after your service has terminated for
any reason.
	 
	 	 	 	 
	Term	 	This option expires in any event at the close of business at Company
headquarters on the day before the 10th anniversary of the Date of
Grant, as shown in the Notice of Stock Option Grant. (It will expire earlier
if your service terminates, as described below.)
	 
	 	 	 	 
	Regular Termination	 	If your service terminates for any reason except death or total and permanent
disability, then this option will expire at the close of business at Company
headquarters on the date 6 months after your termination date. The Company
determines when your service terminates for this purpose.
	 
	 	 	 	 
	Death	 	If you die before your service terminates, then this option will expire at the
close of business at Company headquarters on the date 12 months after the date
of death.
	 
	 	 	 	 
	Disability	 	If your service terminates because of your Disability, (as defined in the Plan)
then this option will expire at the close of business at Company headquarters
on the date 12 months after your termination date.
	 
	 	 	 	 
	Right of Repurchase	 	You may exercise your option before all of the option shares have vested. The
shares that you buy over and above your vested shares are “nonvested shares.”
You may not sell, transfer, pledge or otherwise dispose of any nonvested shares

 

 

	 	 	 	 	 
	 	 	without the written consent of the Company, except as provided in the next
sentence. You may transfer nonvested shares to your spouse, children or
grandchildren or to a trust established by you for the benefit of yourself or
your spouse, children or grandchildren. A transferee of nonvested shares must
agree in writing on a form prescribed by the Company to be bound by all
provisions of this Agreement. If nonvested shares are subject to a stock
split, stock dividend or similar transaction, then the additional shares you
receive as a result will also be treated as nonvested shares.
	 
	 	 	 	 
	 	 	If your service terminates for any reason while you are holding nonvested
shares, the Company may buy those nonvested shares back from you at the
exercise price that you originally paid. If the Company wishes to exercise its
right to repurchase the nonvested shares, it must give you written notice
within 90 days after the termination of your service.
	 
	 	 	 	 
	 	 	If the Company exercises its right to repurchase your nonvested shares, you
must deliver the appropriate number of shares to the Company within 30 days
after you receive the Company’s notice. The stock certificate(s) must be fully
endorsed or accompanied by a duly executed stock transfer power. You will
receive a check for the exercise price that you originally paid for the
nonvested shares. If your nonvested shares are not delivered as required, then
you will no longer have any rights with respect to the nonvested shares
(including the right to vote or transfer the shares) and the nonvested shares
will be deemed to have been repurchased by the Company.
	 
	 	 	 	 
	 	 	You will not be permitted to exercise your option in order to purchase
nonvested shares after your service has terminated for any reason.
	 
	 	 	 	 
	 	 	The certificates for nonvested shares have stamped on them a special legend
referring to the Company’s right of repurchase. In addition to or in lieu of
imposing the legend, the Company may hold the certificates in escrow. As your
vested percentage increases, you may request (at reasonable intervals) that the
Company release to you a certificate without the repurchase legend for your
vested shares.
	 
	 	 	 	 
	Restrictions on Exercise	 	The Company will not permit you to exercise this option if the issuance of
shares at that time would violate any law or regulation.
	 
	 	 	 	 
	Notice of Exercise	 	When you wish to exercise this option, you must notify the Company by filing
the proper “Notice of Exercise” form at the address given on the form. Your
notice must specify how many shares you wish to purchase. Your notice must
also specify how your shares should be registered. The notice will be effective
when the Company receives it.
	 
	 	 	 	 
	 	 	If someone else wants to exercise this option after your death, that person
must prove to the Company’s satisfaction that he or she is entitled to do so.

2

 

	 	 	 	 	 
	Form of Payment	 	When you submit your notice of exercise, you must include payment of the option
exercise price for the shares that you are purchasing. Payment may be made in
one (or a combination of two or more) of the following forms:
	 
	 	 	 	 
	 

	 	•
	 	Your personal check, a cashier’s check or a money order.
	 
	 	 	 	 
	 

	 	•

	 	Certificates for shares of Company stock that you own, along with any
forms needed to effect a transfer of those shares to the Company. The value of
the shares, determined as of the effective date of the option exercise, will be
applied to the option exercise price. Instead of surrendering shares of
Company stock, you may attest to the ownership of those shares on a form
provided by the Company and have the same number of shares subtracted from the
option shares issued to you. However, you may not surrender, or attest to the
ownership of, shares of Company stock in payment of the exercise price if your
action would cause the Company to recognize compensation expense (or additional
compensation expense) with respect to this option for financial reporting
purposes.
	 
	 	 	 	 
	 

	 	•	 	Irrevocable directions to a securities broker approved by the Company
to sell all or part of your vested option shares and to deliver to the Company
from the sale proceeds an amount sufficient to pay the option exercise price
and any withholding taxes. (The balance of the sale proceeds, if any, will be
delivered to you.) The directions must be given by signing a special “Notice
of Exercise” form provided by the Company.
	 
	 	 	 	 
	 

	 	•	 	Irrevocable directions to a securities broker or lender approved by the
Company to pledge vested option shares as security for a loan and to deliver to
the Company from the loan proceeds an amount sufficient to pay the option
exercise price and any withholding taxes. The directions must be given by
signing a special “Notice of Exercise” form provided by the Company.
	 
	 	 	 	 
	Withholding Taxes and
Stock Withholding	 	You will not be allowed to exercise this option unless you make arrangements
acceptable to the Company to pay any withholding taxes that may be due as a
result of the option exercise or the vesting of your shares. With the
Company’s consent, these arrangements may include (a) withholding shares of
Company stock that otherwise would be issued to you when you exercise this
option or (b) surrendering shares that you previously acquired. The value of
these shares, determined as of the date withholding taxes are due, will be
applied to the withholding taxes.
	 
	 	 	 	 
	Restrictions on Resale	 	You agree not to sell any option shares at a time when applicable laws, Company
policies or an agreement between the Company and its underwriters prohibit a
sale. This restriction will apply as long as your service continues and for
such period of time after the termination of your service as the Company may
specify.
	 
	 	 	 	 
	Transfer of Option	 	Prior to your death, only you may exercise this option. You cannot transfer or
assign this option. For instance, you may not sell this option or use it as
security for a loan. If you attempt to do any of these things, this option
will immediately become invalid. You may, however, dispose of this option in
your will or a beneficiary designation.

3

 

	 	 	 	 	 
	 	 	Regardless of any marital property settlement agreement, the Company is not
obligated to honor a notice of exercise from your former spouse, nor is the
Company obligated to recognize your former spouse’s interest in your option in
any other way.
	 
	 	 	 	 
	Retention Rights	 	Your option or this Agreement do not interfere with or otherwise restrict in
any way the rights of the Company and the Company’s stockholders to remove you
from the Board at any time in accordance with the provisions of applicable law.
	 
	 	 	 	 
	Stockholder Rights	 	You, or your estate or heirs, have no rights as a stockholder of the Company
until you have exercised this option by giving the required notice to the
Company and paying the exercise price. No adjustments are made for dividends
or other rights if the applicable record date occurs before you exercise this
option, except as described in the Plan.
	 
	 	 	 	 
	Adjustments	 	In the event of a stock split, a stock dividend or a similar change in Company
stock, the number of shares covered by this option and the exercise price per
share may be adjusted pursuant to the Plan.
	 
	 	 	 	 
	Applicable Law	 	This Agreement will be interpreted and enforced under the laws of the State of
Delaware (without regard to their choice-of-law provisions).
	 
	 	 	 	 
	The Plan and Other
Agreements	 	The text of the Plan is incorporated in this Agreement by reference.
This Agreement and the Plan constitute the entire understanding between you and
the Company regarding this option. Any prior agreements, commitments or
negotiations concerning this option are superseded. This Agreement may be
amended only by another written agreement between the parties.

 By signing the Notice of Stock Option Grant, you agree to all of the terms and

conditions described above and in the 2002 Directors Stock Option Plan.

4

 

Exhibit B

Form of Notice of Stock Option Grant

 

 

VERITAS Software Corporation

2002 Directors Stock Option Plan

Notice of Stock Option Grant (Initial)

               You have been granted the following option to purchase Common Stock of VERITAS Software
Corporation (the “Company”):

	 	 	 	 	 
	 

	 	Name of Optionee:
	 	
	 
	 	 	 	 
	 

	 	Total Number of Shares Granted:
	 	___
	 
	 	 	 	 
	 

	 	Type of Option:
	 	Nonstatutory Stock Option
	 
	 	 	 	 
	 

	 	Exercise Price Per Share:
	 	$
	 
	 	 	 	 
	 

	 	Date of Grant:
	 	 
	 
	 	 	 	 
	 

	 	Grant Number:	 	 
	 
	 	 	 	 
	 

	 	Date Exercisable:
	 	All or part of this option is exercisable at any
time after the Date of Grant.
	 
	 	 	 	 
	 

	 	Vesting Schedule:
	 	The Right of Repurchase shall lapse with respect to 1/48th of the
Shares subject to this option after you complete each month of Board service
from the Date of Grant.
	 
	 	 	 	 
	 

	 	Expiration Date:
	 	

By your signature and the signature of the Company’s representative below, you and the Company
agree that this option is granted under and governed by the terms and conditions of the Stock
Option Agreement, which is attached to and made a part of this document, and of the 2002 Directors
Stock Option Plan (the “Plan”).

 

 

	 	 	 	 	 
	Optionee:	 	VERITAS Software Corporation
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 
	 
	 	 	 	 
	 

	 	Title:	 	 
	 

	 	 	 	 
	Print Name
	 	 	 	 

2

 

VERITAS Software Corporation

2002 Directors Stock Option Plan

Notice of Stock Option Grant (Annual)

               You have been granted the following option to purchase Common Stock of VERITAS Software
Corporation (the “Company”):

	 	 	 	 	 
	 

	 	Name of Optionee:
	 	 
	 
	 	 	 	 
	 

	 	Total Number of Shares Granted:
	 	___
	 
	 	 	 	 
	 

	 	Type of Option:
	 	Nonstatutory Stock Option
	 
	 	 	 	 
	 

	 	Exercise Price Per Share:
	 	$ 
	 
	 	 	 	 
	 

	 	Date of Grant:
	 	 
	 
	 	 	 	 
	 

	 	Date Exercisable:
	 	All or part of this option is exercisable at any
time after the Date of Grant.
	 
	 	 	 	 
	 

	 	Vesting Schedule:
	 	The Right of Repurchase shall lapse with respect to 1/48th of the
Shares subject to this option after you complete each month of Board service
from the Date of Grant.
	 
	 	 	 	 
	 

	 	Expiration Date:
	 	 

By your signature and the signature of the Company’s representative below, you and the Company
agree that this option is granted under and governed by the terms and conditions of the Stock
Option Agreement, which is attached to and made a part of this document, and of the 2002 Directors
Stock Option Plan (the “Plan”).

	 	 	 	 	 
	Optionee:	 	VERITAS Software Corporation
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 
	 
	 	 	 	 
	 

	 	Title:	 	 
	 

	 	 	 	 
	Print Name
	 	 	 	 

 

 

VERITAS Software Corporation

2002 Directors Stock Option Plan

Notice of Stock Option Grant (Committee)

               You have been granted the following option to purchase Common Stock of VERITAS Software
Corporation (the “Company”):

	 	 	 	 	 
	 

	 	Name of Optionee:
	 	
	 
	 	 	 	 
	 

	 	Total Number of Shares Granted:
	 	___
	 
	 	 	 	 
	 

	 	Type of Option:
	 	Nonstatutory Stock Option
	 
	 	 	 	 
	 

	 	Exercise Price Per Share:
	 	$
	 
	 	 	 	 
	 

	 	Date of Grant:
	 	 
	 
	 	 	 	 
	 

	 	Date Exercisable:
	 	All or part of this option is exercisable at any
time after the Date of Grant.
	 
	 	 	 	 
	 

	 	Vesting Schedule:
	 	The Right of Repurchase shall lapse with respect to 1/48th of the
Shares subject to this option after you complete each month of Board service
from the Date of Grant.
	 
	 	 	 	 
	 

	 	Expiration Date:
	 	 

By your signature and the signature of the Company’s representative below, you and the Company
agree that this option is granted under and governed by the terms and conditions of the Stock
Option Agreement, which is attached to and made a part of this document, and of the 2002 Directors
Stock Option Plan (the “Plan”).

	 	 	 	 	 
	Optionee:	 	VERITAS Software Corporation
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 
	 
	 	 	 	 
	 

	 	Title:	 	 
	 

	 	 	 	 
	Print Name
	 	 	 	 

4exv10w15

 

Exhibit 10.15

VERITAS SOFTWARE CORPORATION

2003 STOCK INCENTIVE PLAN

ARTICLE ONE

GENERAL PROVISIONS

     I. PURPOSE OF THE PLAN

          This 2003 Stock Incentive Plan is intended to promote the interests of VERITAS Software
Corporation, a Delaware corporation, by providing eligible persons in the Corporation’s service
with the opportunity to acquire a proprietary interest, or otherwise increase their proprietary
interest, in the Corporation as an incentive for them to remain in such service.

     II. STRUCTURE OF THE PLAN

          A. The Plan shall be divided into two separate equity incentives programs:

          - the Discretionary Option Grant Program under which eligible persons may, at the
discretion of the Plan Administrator, be granted options to purchase shares of Common Stock,
and

          - the Stock Issuance Program under which eligible persons may, at the discretion
of the Plan Administrator, be issued shares of Common Stock directly, either through the
immediate purchase of such shares or as a bonus for services rendered the Corporation (or
any Parent or Subsidiary) or the attainment of designated milestones.

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

 

 

     III. ADMINISTRATION OF THE PLAN

          A. The Primary Committee shall have sole and exclusive authority to administer the
Discretionary Option Grant and Stock Issuance Programs with respect to Section 16 Insiders. The
Primary Committee shall also have full power and authority to administer the Discretionary Option
Grant and Stock Issuance Programs with respect to all other persons eligible to participate in
those programs. However, the Board may, in its sole discretion, appoint a Secondary Committee to
exercise separate but concurrent jurisdiction with the Primary Committee in the administration of
the Discretionary Option Grant and Stock Issuance Programs with respect to one or more groups of
persons eligible to participate in those programs other than Section 16 Insiders. The Board may
also, in its sole discretion, retain the power to administer those programs with respect to all
persons other than Section 16 Insiders.

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

          C. Each Plan Administrator shall, within the scope of its administrative functions under the
Plan, have full power and authority (subject to the provisions of the Plan) to establish such rules
and regulations as it may deem appropriate for proper administration of the Discretionary Option
Grant and Stock Issuance Programs and to make such determinations under, and issue such
interpretations of, the provisions of those programs and any outstanding options or stock issuances
thereunder as it may deem necessary or advisable. Decisions of the Plan Administrator within the
scope of its administrative functions under the Plan shall be final and binding on all parties who
have an interest in the Discretionary Option Grant and Stock Issuance Programs under its
jurisdiction or any stock option or stock issuance thereunder.

          D. Subject to the express limitations of the Plan, the Plan Administrator shall, within the
scope of its administrative authority under the Plan, have full power and authority to structure or
otherwise modify any awards made under the Discretionary Option Grant and Stock Issuance Programs
to persons residing in foreign jurisdictions or held by any such persons so as to comply with the
applicable laws and regulations of the jurisdictions in which those awards are made or outstanding.

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

2

 

     IV. ELIGIBILITY

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

               (i) Employees, and

               (ii) consultants and other independent advisors who provide services to the
Corporation (or any Parent or Subsidiary).

          B. Non-employee Board members shall not be eligible to participate in either the Discretionary
Option Grant or Stock Issuance Program.

          C. Each Plan Administrator shall, within the scope of its administrative jurisdiction under
the Plan, have full authority to determine, (i) with respect to the option grants under the
Discretionary Option Grant Program, which eligible persons are to receive such grants, the time or
times when those grants are to be made, the number of shares to be covered by each such grant, the
status of the granted option as either an Incentive Option or a Non-Statutory Option, the time or
times when each option is to become exercisable, the vesting schedule (if any) applicable to the
option shares and the maximum term for which the option is to remain outstanding and (ii) with
respect to stock issuances under the Stock Issuance Program, which eligible persons are to receive
such issuances, the time or times when the issuances are to be made, the number of shares to be
issued to each Participant, the vesting schedule (if any) applicable to the issued shares and the
consideration for such shares.

          D. The Plan Administrator shall have the absolute discretion either to grant options in
accordance with the Discretionary Option Grant Program or to effect stock issuances in accordance
with the Stock Issuance Program.

     V. STOCK SUBJECT TO THE PLAN

          A. The stock issuable under the Plan shall be shares of authorized but unissued or reacquired
Common Stock, including shares repurchased by the Corporation on the open market. The number of
shares of Common Stock reserved for issuance over the term of the Plan shall not exceed Fourteen
Million (14,000,000) shares. Such reserve shall be in addition to the shares of Common Stock
reserved for issuance under the Corporation’s 1993 Equity Incentive Plan. Accordingly, issuances
under the 1993 Equity Incentive Plan shall not reduce the number of shares of Common Stock reserved
for issuance under this Plan, nor shall issuances under this Plan reduce the number of shares of
Common Stock available for issuance under the 1993 Equity Incentive Plan. However, no new option
grants shall be made under the 1993 Equity Incentive Plan after approval of the Plan by the
Company’s stockholders.

          B. No one person participating in the Plan may receive stock options and direct stock
issuances for more than 3,000,000 shares of Common Stock in the aggregate per calendar year.

3

 

          C. Shares of Common Stock subject to outstanding options shall be available for subsequent
issuance under the Plan to the extent those options expire, terminate or are cancelled for any
reason prior to exercise in full. Unvested shares issued under the Plan and subsequently
repurchased by the Corporation, at a price per share not greater than the original issue price paid
per share, pursuant to the Corporation’s repurchase rights under the Plan shall be added back to
the number of shares of Common Stock reserved for issuance under the Plan and shall accordingly be
available for reissuance through one or more subsequent option grants or direct stock issuances
under the Plan. However, should the exercise price of an option under the Plan be paid with shares
of Common Stock or should shares of Common Stock otherwise issuable under the Plan be withheld by
the Corporation in satisfaction of the withholding taxes incurred in connection with the exercise
of an option or the vesting of a stock issuance under the Plan, then the number of shares of Common
Stock available for issuance under the Plan shall be reduced by the gross number of shares for
which the option is exercised or which vest under the stock issuance, and not by the net number of
shares of Common Stock issued to the holder of such option or stock issuance.

          D. If any change is made to the Common Stock by reason of any stock split, stock dividend,
recapitalization, combination of shares, exchange of shares or other change affecting the
outstanding Common Stock as a class without the Corporation’s receipt of consideration, appropriate
adjustments shall be made by the Plan Administrator to (i) the maximum number and/or class of
securities issuable under the Plan, (ii) the maximum number and/or class of securities for which
any one person may be granted stock options and direct stock issuances under the Plan per calendar
year and (iii) the number and/or class of securities and the exercise price per share in effect
under each outstanding option under the Plan. Such adjustments to the outstanding options are to
be effected in a manner which shall preclude the enlargement or dilution of rights and benefits
under such options. The adjustments determined by the Plan Administrator shall be final, binding
and conclusive.

4

 

ARTICLE TWO

DISCRETIONARY OPTION GRANT PROGRAM

     I. OPTION TERMS

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

          A. Exercise Price.

               1. The exercise price per share shall be fixed by the Plan Administrator but shall not be less
than one hundred percent (100%) of the Fair Market Value per share of Common Stock on the option
grant date.

               2. The exercise price shall become immediately due upon exercise of the option and shall be
payable in one or more of the forms specified below as determined by the Plan Administrator at the
time of grant and set forth in the applicable stock option agreement:

               (i) cash or check made payable to the Corporation,

               (ii) shares of Common Stock held for the requisite period necessary to avoid a
charge to the Corporation’s earnings for financial reporting purposes and valued at
Fair Market Value on the Exercise Date, or

               (iii) to the extent the option is exercised for vested shares, through a
special sale and remittance procedure pursuant to which the Optionee shall
concurrently provide irrevocable instructions to (a) a brokerage firm (reasonably
satisfactory to the Corporation for purposes of administrating such procedure in
compliance with the Corporation’s pre-notification/pre clearance policies) to
effect the immediate sale of the purchased shares and remit to the Corporation, out
of the sale proceeds available on the settlement date, sufficient funds to cover the
aggregate exercise price payable for the purchased shares plus all applicable income
and employment taxes required to be withheld by the Corporation by reason of such
exercise and (b) the Corporation to deliver the certificates for the purchased shares directly to such brokerage firm in order to complete the sale.

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

5

 

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

          C. Effect of Termination of Service.

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

               (i) Any option outstanding at the time of the Optionee’s cessation of Service
for any reason shall remain exercisable for such period of time thereafter as shall
be determined by the Plan Administrator and set forth in the documents evidencing
the option, but no such option shall be exercisable after the expiration of the
option term.

               (ii) Any option held by the Optionee at the time of death and exercisable in
whole or in part at that time may be subsequently exercised by the personal
representative of the Optionee’s estate or by the person or persons to whom the
option is transferred pursuant to the Optionee’s will or the laws of inheritance or
by the Optionee’s designated beneficiary or beneficiaries of that option.

               (iii) Should the Optionee’s Service be terminated for Misconduct or should the
Optionee otherwise engage in Misconduct while holding one or more outstanding
options under this Article Two, then all those options shall terminate immediately
and cease to be outstanding.

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

6

 

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

               (i) extend the period of time for which the option is to remain exercisable
following the Optionee’s cessation of Service from the limited exercise period
otherwise in effect for that option to such greater period of time as the Plan
Administrator shall deem appropriate, but in no event beyond the expiration of the
option term, and/or

               (ii) permit the option to be exercised, during the applicable post-Service
exercise period, not only with respect to the number of vested shares of Common
Stock for which such option is exercisable at the time of the Optionee’s cessation
of Service but also with respect to one or more additional installments in which the
Optionee would have vested had the Optionee continued in Service.

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

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

7

 

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

     II. INCENTIVE OPTIONS

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

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

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

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

8

 

     III. CHANGE IN CONTROL/HOSTILE TAKE-OVER

          A. In the event of a Change in Control, each outstanding option under the Discretionary Option
Grant Program shall automatically accelerate so that each such option shall, immediately prior to
the effective date of that Change in Control, become exercisable for all the shares of Common Stock
at the time subject to such option and may be exercised for any or all of those shares as fully
vested shares of Common Stock. However, an outstanding option shall not become exercisable on such
an accelerated basis if and to the extent: (i) such option is to be assumed by the successor
corporation (or parent thereof) or is otherwise to continue in full force and effect pursuant to
the terms of the Change in Control transaction or (ii) such option is to be replaced with a cash
incentive program of the successor corporation which preserves the spread existing at the time of
the Change in Control on any shares for which the option is not otherwise at that time exercisable
and provides for subsequent payout of that spread in accordance with the same exercise/vesting
schedule applicable to those option shares or (iii) the acceleration of such option is subject to
other limitations imposed by the Plan Administrator at the time of the option grant.

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

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

9

 

          D. Each option which is assumed in connection with a Change in Control or otherwise continued
in effect shall be appropriately adjusted, immediately after such Change in Control, to apply to
the number and class of securities which would have been issuable to the Optionee in consummation
of such Change in Control had the option been exercised immediately prior to such Change in
Control. Appropriate adjustments to reflect such Change in Control shall also be made to (i) the
exercise price payable per share under each outstanding option, provided the aggregate
exercise price payable for such securities shall remain the same, (ii) the maximum number and/or
class of securities available for issuance over the remaining term of the Plan and (iii) the
maximum number and/or class of securities for which any one person may be granted stock options and
direct stock issuances under the Plan per calendar year. To the extent the actual holders of the
Corporation’s outstanding Common Stock receive cash consideration for their Common Stock in
consummation of the Change in Control, the successor corporation may, in connection with the
assumption of the outstanding options under the Discretionary Option Grant Program, substitute one
or more shares of its own common stock with a fair market value equivalent to the cash
consideration paid per share of Common Stock in such Change in Control transaction.

          E. The Plan Administrator shall have the discretionary authority to structure one or more
outstanding options under the Discretionary Option Grant Program so that those options shall,
immediately prior to the effective date of a Change in Control, become exercisable for all the
shares of Common Stock at the time subject to those options and may be exercised for any or all of
those shares as fully vested shares of Common Stock, whether or not those options are to be assumed
in the Change in Control transaction or otherwise continued in effect. In addition, the Plan
Administrator shall have the discretionary authority to structure one or more of the Corporation’s
repurchase rights under the Discretionary Option Grant Program so that those rights shall
immediately terminate upon the consummation of the Change in Control transaction, and the shares
subject to those terminated rights shall thereupon vest in full.

          F. The Plan Administrator shall have full power and authority to structure one or more
outstanding options under the Discretionary Option Grant Program so that those options shall
become exercisable for all the shares of Common Stock at the time subject to those options in the
event the Optionee’s Service is subsequently terminated by reason of an Involuntary Termination
within a designated period (not to exceed eighteen (18) months) following the effective date of any
Change in Control transaction in which those options do not otherwise accelerate. In addition, the
Plan Administrator may structure one or more of the Corporation’s repurchase rights so that those
rights shall immediately terminate with respect to any shares held by the Optionee at the time of
such Involuntary Termination, and the shares subject to those terminated repurchase rights shall
accordingly vest in full at that time.

10

 

          G. The Plan Administrator shall have the discretionary authority to structure one or more
outstanding options under the Discretionary Option Grant Program so that those options shall,
immediately prior to the effective date of a Hostile Take-Over, become exercisable for all the
shares of Common Stock at the time subject to those options and may be exercised for any or all of
those shares as fully vested shares of Common Stock. In addition, the Plan Administrator shall have
the discretionary authority to structure one or more of the Corporation’s repurchase rights under
the Discretionary Option Grant Program so that those rights shall terminate automatically upon the
consummation of such Hostile Take-Over, and the shares subject to those terminated rights shall
thereupon vest in full. Alternatively, the Plan Administrator may condition the automatic
acceleration of one or more outstanding options under the Discretionary Option Grant Program and
the termination of one or more of the Corporation’s outstanding repurchase rights under such
program upon the subsequent termination of the Optionee’s Service by reason of an Involuntary
Termination within a designated period (not to exceed eighteen (18) months) following the effective
date of such Hostile Take-Over.

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

          I. The outstanding options shall in no way affect the right of the Corporation to adjust,
reclassify, reorganize or otherwise change its capital or business structure or to merge,
consolidate, dissolve, liquidate or sell or transfer all or any part of its business or assets.

11

 

ARTICLE THREE

STOCK ISSUANCE PROGRAM

     I. STOCK ISSUANCE TERMS

          Shares of Common Stock may be issued under the Stock Issuance Program through direct and
immediate issuances without any intervening option grants. In no event, however, may more than
five percent (5%) of the total number of shares of Common Stock from time to time authorized for
issuance under the Plan be issued pursuant to the Stock Issuance Program. Each stock issuance
under the program shall be evidenced by a Stock Issuance Agreement which complies with the terms
specified below. Shares of Common Stock may also be issued under the Stock Issuance Program
pursuant to share right awards which entitle the recipients to receive those shares upon the
attainment of designated performance goals or the satisfaction of specified Service requirements.

          A. Issue Price.

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

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

               (i) cash or check made payable to the Corporation, or

               (ii) past services rendered to the Corporation (or any Parent or Subsidiary).

          B. Vesting Provisions.

               1. Shares of Common Stock issued under the Stock Issuance Program may, in the discretion of
the Plan Administrator, be fully and immediately vested upon issuance or may vest in one or more
installments over the Participant’s period of Service or upon attainment of specified performance
objectives. The elements of the vesting schedule applicable to any unvested shares of Common Stock
issued under the Stock Issuance Program shall be determined by the Plan Administrator and
incorporated into the Stock Issuance Agreement. Shares of Common Stock may also be issued under
the Stock Issuance Program pursuant to share right awards which entitle the recipients to receive
those shares upon the attainment of designated performance goals or the satisfaction of specified
Service requirements.

12

 

               2. For any Common Stock issuance which is to vest solely on the basis of Service, a minimum
period of three (3) years of Service shall be required as condition to such vesting. The required
Service period shall be measured from the issue date of the shares in the event of a direct
issuance or from the grant date of the share right award for any shares to be subsequently issued
pursuant to such award. However, any such Common Stock issuance shall be subject to the vesting
acceleration provisions of this Article Three.

               3. The Plan Administrator shall also have the discretionary authority, consistent with Code
Section 162(m), to structure one or more share right awards so that the shares of Common Stock
subject to those awards shall be issuable upon the achievement of certain pre-established corporate
performance goals based on one or more of the following criteria: (1) return on total stockholder
equity; (2) earnings per share of Common Stock; (3) net income (before or after taxes); (4)
earnings before interest, taxes, depreciation and amortization; (5) sales or revenues; (6) return
on assets, capital or investment; (7) market share; (8) cost reduction goals; (9) budget
comparisons; (10) implementation or completion of critical projects or processes; (11) customer
satisfaction; (12) any combination of, or a specified increase in, any of the foregoing; and (13)
the formation of joint ventures, research or development collaborations, or the completion of other
corporate transactions. In addition, such performance goals may be based upon the attainment of
specified levels of the Corporation’s performance under one or more of the measures described above
relative to the performance of other entities and may also be based on the performance of any of
the Corporation’s business units or divisions or any Parent or Subsidiary. Performance goals may
include a minimum threshold level of performance below which no award will be earned, levels of
performance at which specified portions of an award will be earned and a maximum level of
performance at which an award will be fully earned.

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

               5. The Participant shall have full stockholder rights with respect to any shares of Common
Stock issued to the Participant under the Stock Issuance Program, whether or not the Participant’s
interest in those shares is vested. Accordingly, the Participant shall have the right to vote such
shares and to receive any regular cash dividends paid on such shares.

13

 

               6. Should the Participant cease to remain in Service while holding one or more unvested shares
of Common Stock issued under the Stock Issuance Program or should the performance objectives not be
attained with respect to one or more such unvested shares of Common Stock, then those shares shall
be immediately surrendered to the Corporation for cancellation, and the Participant shall have no
further stockholder rights with respect to those shares. To the extent the surrendered shares were
previously issued to the Participant for consideration paid in cash or cash equivalent (including
the Participant’s purchase-money indebtedness), the Corporation shall repay to the Participant the
lower of (i) the cash consideration paid for the surrendered shares or (ii) the Fair Market Value
of those shares at the time of cancellation and shall cancel the unpaid principal balance of any
outstanding purchase-money note of the Participant attributable to the surrendered shares by the
applicable clause (i) or (ii) amount.

               7. The Plan Administrator may in its discretion waive the surrender and cancellation of one or
more unvested shares of Common Stock which would otherwise occur upon the cessation of the
Participant’s Service or the non-attainment of the performance objectives applicable to those
shares, to the extent the Plan Administrator deems such waiver to be an appropriate severance
benefit under the circumstances. Such waiver shall result in the immediate vesting of the
Participant’s interest in the shares of Common Stock as to which the waiver applies.

               8. Outstanding share right awards under the Stock Issuance Program shall automatically
terminate, and no shares of Common Stock shall actually be issued in satisfaction of those awards,
if the performance goals or Service requirements established for such awards are not attained or
satisfied. The Plan Administrator, however, shall have the discretionary authority to issue shares
of Common Stock under one or more outstanding share right awards as to which the designated
performance goals or Service requirements have not been attained or satisfied, to the extent the
Plan Administrator deems such issuance to be an appropriate severance benefit under the
circumstances.

     II. CHANGE IN CONTROL/HOSTILE TAKE-OVER

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

14

 

          B. The Plan Administrator shall have the discretionary authority to structure one or more of
the Corporation’s repurchase rights under the Stock Issuance Program so that those rights shall
automatically terminate in whole or in part, and the shares of Common Stock subject to those
terminated rights shall vest, either immediately upon the effective date of a Change in Control or
subsequently upon an Involuntary Termination of the Participant’s Service within a designated
period (not to exceed eighteen (18) months) following the effective date of any Change in Control
transaction in which those repurchase rights are assigned to the successor corporation (or parent
thereof) or are otherwise continued in effect.

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

     III. SHARE ESCROW/LEGENDS

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

15

 

ARTICLE FOUR

MISCELLANEOUS

     I. TAX WITHHOLDING

          A. The Corporation’s obligation to deliver shares of Common Stock upon the exercise of options
or the issuance or vesting of such shares under the Plan shall be subject to the satisfaction of
all applicable income and employment tax withholding requirements. The Corporation shall also make
appropriate arrangements for the satisfaction by participants of all applicable foreign tax
withholding requirements which may be imposed in connection with the grant, vesting or exercise of
options under the Plan or other taxable event or the issuance or vesting of shares of Common Stock
under the Plan.

          B. The Plan Administrator may, in its discretion, provide any or all Optionees or Participants
under the Plan with the right to use shares of Common Stock in satisfaction of all or part of the
Withholding Taxes to which such individuals may become subject in connection with the grant or
exercise of their options or the issuance or vesting of their shares. Such right may be provided
to any such holder in either or both of the following formats:

               Stock Withholding: The election to have the Corporation withhold, from the shares of
Common Stock otherwise issuable upon the exercise of options or the issuance or the vesting of such
shares, a portion of those shares with an aggregate Fair Market Value equal to the percentage of
the Withholding Taxes (not to exceed one hundred percent (100%)) designated by the holder.

               Stock Delivery: The election to deliver to the Corporation, at the time the option is
granted or exercised or the shares are issued or vest, one or more shares of Common Stock
previously acquired by such holder (other than in connection with the option exercise or share
vesting triggering the Withholding Taxes) with an aggregate Fair Market Value equal to the
percentage of the Withholding Taxes (not to exceed one hundred percent (100%)) designated by the
holder.

     II. EFFECTIVE DATE AND TERM OF THE PLAN

          A. The Plan shall become effective immediately on the Plan Effective Date.

          B. The Plan shall terminate upon the earliest to occur of (i) December 31, 2012, (ii)
the date on which all shares available for issuance under the Plan shall have been issued as fully
vested shares or (iii) the termination of all outstanding options in connection with a Change in
Control. Should the Plan terminate on December 31, 2012, then all option grants and unvested stock
issuances outstanding at that time shall continue to have force and effect in accordance with the
provisions of the documents evidencing such grants or issuances.

16

 

     III. AMENDMENT OF THE PLAN

          A. The Board shall have complete and exclusive power and authority to amend or modify the Plan
in any or all respects. However, no such amendment or modification shall adversely affect the
rights and obligations with respect to stock options or unvested stock issuances at the time
outstanding under the Plan unless the Optionee or the Participant consents to such amendment or
modification. In addition, stockholder approval shall be required for any amendment which (i)
increases the number of shares of Common Stock reserved for issuance under the Plan, (ii)
materially modifies the eligibility requirements for participation in the Plan or (iii) materially
increases the benefits accruing to Optionees or Participants under the Plan.

     IV. USE OF PROCEEDS

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

     V. REGULATORY APPROVALS

          A. The implementation of the Plan, the granting of any stock option under the Plan and the
issuance of any shares of Common Stock (i) upon the exercise of any granted option or (ii) under
the Stock Issuance Program shall be subject to the Corporation’s procurement of all approvals and
permits required by regulatory authorities having jurisdiction over the Plan, the stock options
granted under it and the shares of Common Stock issued pursuant to it.

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

     VI. NO EMPLOYMENT/SERVICE RIGHTS

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

17

 

APPENDIX 

          The following definitions shall be in effect under the Plan:

          A. Board shall mean the Corporation’s Board of Directors.

          B. Change in Control shall mean a change in ownership or control of the Corporation
effected through any of the following transactions:

          (i) a merger, consolidation or other reorganization approved by the
Corporation’s stockholders, unless securities representing more than fifty
percent (50%) of the total combined voting power of the voting securities of the
successor corporation are immediately thereafter beneficially owned, directly or
indirectly and in substantially the same proportion, by the persons who beneficially
owned the Corporation’s outstanding voting securities immediately prior to such
transaction, or

          (ii) the sale, transfer or other disposition of all or substantially all of the
Corporation’s assets in complete liquidation or dissolution of the Corporation, or

          (iii) any transaction or series of related transactions pursuant to which any
person or any group of persons comprising a “group” within the meaning of Rule
13d-5(b)(1) under the 1934 Act (other than the Corporation or a person that, prior
to such transaction or series of related transactions, directly or indirectly
controls, is controlled by or is under common control with, the Corporation) becomes
directly or indirectly the beneficial owner (within the meaning of Rule 13d-3 under
the 1934 Act) of securities possessing (or convertible into or exercisable for
securities possessing) more than fifty percent (50%) of the total combined voting
power of the Corporation’s securities outstanding immediately after the consummation
of such transaction or series of related transactions, whether such transaction
involves a direct issuance from the Corporation or the acquisition of outstanding
securities held by one or more of the Corporation’s stockholders.

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

          D. Common Stock shall mean the Corporation’s common stock.

          E. Corporation shall mean VERITAS Software Corporation, a Delaware corporation, and
any corporate successor to all or substantially all of the assets or voting stock of VERITAS
Software Corporation which shall by appropriate action adopt the Plan.

          F. Discretionary Option Grant Program shall mean the discretionary option grant
program in effect under Article Two of the Plan.

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          G. Employee shall mean an individual who is in the employ of the Corporation (or any
Parent or Subsidiary), subject to the control and direction of the employer entity as to both the
work to be performed and the manner and method of performance.

          H. Exercise Date shall mean the date on which the Corporation shall have received
written notice of the option exercise.

          I. Fair Market Value per share of Common Stock on any relevant date shall be
determined in accordance with the following provisions:

          (i) If the Common Stock is at the time traded on the Nasdaq National Market,
then the Fair Market Value shall be the closing selling price per share of Common
Stock on the date in question, as such price is reported by the National Association
of Securities Dealers on the Nasdaq National Market and published in The Wall Street
Journal. If there is no closing selling price for the Common Stock on the date in
question, then the Fair Market Value shall be the closing selling price on the last
preceding date for which such quotation exists.

          (ii) If the Common Stock is at the time listed on any Stock Exchange, then the
Fair Market Value shall be the closing selling sale price per share of Common Stock
on the date in question on the Stock Exchange determined by the Plan Administrator
to be the primary market for the Common Stock, as such price is officially quoted in
the composite tape of transactions on such exchange and published in The Wall Street
Journal. If there is no closing selling price for the Common Stock on the date in
question, then the Fair Market Value shall be the closing selling price on the last
preceding date for which such quotation exists.

          J. Hostile Take-Over shall mean a change in ownership or control of the Corporation
effected through either of the following transactions:

          (i) a change in the composition of the Board over a period of thirty-six (36)
consecutive months or less such that a majority of the Board members ceases, by
reason of one or more contested elections for Board membership, to be comprised of
individuals who either (A) have been Board members continuously since the beginning
of such period or (B) have been elected or nominated for election as Board members
during such period by at least a majority of the Board members described in clause
(A) who were still in office at the time the Board approved such election or
nomination, or

          (ii) the acquisition, directly or indirectly, by any person or related group of
persons (other than the Corporation or a person that directly or indirectly
controls, is controlled by, or is under common control with, the Corporation) of
beneficial ownership (within the meaning of Rule 13d-3 of the

A-2

 

1934 Act) of securities possessing more than thirty percent (30%) of the total
combined voting power of the Corporation’s outstanding securities pursuant to a
tender or exchange offer made directly to the Corporation’s stockholders which the
Board does not recommend such stockholders to accept.

          K. Incentive Option shall mean an option which satisfies the requirements of Code
Section 422.

          L. Involuntary Termination shall mean the termination of the Service of any individual
which occurs by reason of:

          (i) such individual’s involuntary dismissal or discharge by the Corporation for
reasons other than Misconduct, or

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

          M. Misconduct shall mean the commission of any act of fraud, embezzlement or
dishonesty by the Optionee or Participant, any intentional unauthorized use or disclosure by such
person of confidential information or trade secrets of the Corporation (or any Parent or
Subsidiary), or any other intentional misconduct by such person adversely affecting the business or
affairs of the Corporation (or any Parent or Subsidiary) in a material manner. The foregoing
definition shall not in any way preclude or restrict the right of the Corporation (or any Parent or
Subsidiary) to discharge or dismiss any Optionee, Participant or other person in the Service of the
Corporation (or any Parent or Subsidiary) for any other acts or omissions, but such other acts or
omissions shall not be deemed, for purposes of the Plan, to constitute grounds for termination for
Misconduct.

          N. 1934 Act shall mean the Securities Exchange Act of 1934, as amended.

          O. Non-Statutory Option shall mean an option not intended to satisfy the requirements
of Code Section 422.

          P. Optionee shall mean any person to whom an option is granted under the Discretionary
Option Grant Program.

A-3

 

          Q. Parent shall mean any corporation (other than the Corporation) in an unbroken chain of
corporations ending with the Corporation, provided each corporation in the unbroken chain (other
than the Corporation) owns, at the time of the determination, stock possessing fifty percent (50%)
or more of the total combined voting power of all classes of stock in one of the other corporations
in such chain.

          R. Participant shall mean any person who is issued shares of Common Stock under the
Stock Issuance Program.

          S. Permanent Disability or Permanently Disabled shall mean the inability of the
Optionee or the Participant to engage in any substantial gainful activity by reason of any
medically determinable physical or mental impairment expected to result in death or to be of
continuous duration of twelve (12) months or more.

          T. Plan shall mean the Corporation’s 2003 Stock Incentive Plan, as set forth in this
document.

          U. Plan Administrator shall mean the particular entity, whether the Primary Committee,
the Secondary Committee or the Board, which is authorized to administer the Discretionary Option
Grant and Stock Issuance Programs with respect to one or more classes of eligible persons, to the
extent such entity is carrying out its administrative functions under those programs with respect
to the persons under its jurisdiction.

          V. Plan Effective Date shall mean the date the Plan becomes effective and shall be
coincidental with the date the Plan is approved by the Corporation’s stockholders. The Plan
Effective Date shall accordingly be the date of the 2003 Annual Stockholders Meeting, provided the
stockholders approve the Plan at such meeting.

          W. Primary Committee shall mean the committee of two (2) or more non-employee Board
members appointed by the Board to administer the Discretionary Option Grant and Stock Issuance
Programs with respect to Section 16 Insiders.

          X. Secondary Committee shall mean a committee of one or more Board members appointed
by the Board to administer the Discretionary Option Grant and Stock Issuance Programs with respect
to eligible persons other than Section 16 Insiders.

          Y. Section 16 Insider shall mean an officer or director of the Corporation subject to
the short-swing profit liabilities of Section 16 of the 1934 Act.

          Z. Service shall mean the performance of services for the Corporation (or any Parent
or Subsidiary) by a person in the capacity of an Employee, a non-employee member of the board of
directors or a consultant or independent advisor, except to the extent otherwise specifically
provided in the documents evidencing the option grant or stock issuance. Service shall not be
deemed to cease during a period of military leave, sick leave or other personal leave approved by
the Corporation; provided, however, that for a leave which exceeds ninety (90)

A-4

 

days, Service shall be deemed, for purposes of determining the period within which any
outstanding option held by the Optionee in question may be exercised as an Incentive Option, to
cease on the ninety-first (91st) day of such leave, unless the right of that Optionee to
return to Service following such leave is guaranteed by law or statute. Except to the extent
otherwise required by law or expressly authorized by the Plan Administrator, no Service credit
shall be given for vesting purposes for any period the Optionee or Participant is on a leave of
absence.

          AA. Stock Exchange shall mean either the American Stock Exchange or the New York Stock
Exchange.

          BB. Stock Issuance Agreement shall mean the agreement entered into by the Corporation
and the Participant at the time of issuance of shares of Common Stock under the Stock Issuance
Program.

          CC. Stock Issuance Program shall mean the stock issuance program in effect under
Article Four of the Plan.

          DD. Subsidiary shall mean any corporation (other than the Corporation) in an unbroken
chain of corporations beginning with the Corporation, provided each corporation (other than the
last corporation) in the unbroken chain owns, at the time of the determination, stock possessing
fifty percent (50%) or more of the total combined voting power of all classes of stock in one of
the other corporations in such chain.

          EE. 10% Stockholder shall mean the owner of stock (as determined under Code Section
424(d)) possessing more than ten percent (10%) of the total combined voting power of all classes of
stock of the Corporation (or any Parent or Subsidiary).

          FF. Withholding Taxes shall mean the applicable income and employment withholding
taxes to which the holder of an option or shares of Common Stock under the Plan may become subject
in connection with the grant, vesting or exercise of those options or other taxable event or the
issuance or vesting of those shares.

A-5

 

Exhibit A

Form of Stock Option Agreement

 

 

FORM OF

VERITAS SOFTWARE CORPORATION

STOCK OPTION AGREEMENT

RECITALS

     A. The Board has adopted the Plan for the purpose of retaining the
services of selected Employees and consultants and other independent advisors
who provide services to the Corporation (or any Parent or Subsidiary).

     B. Optionee is to render valuable services to the Corporation (or a Parent
or Subsidiary), and this Agreement is executed pursuant to, and is intended to
carry out the purposes of, the Plan in connection with the Corporation’s grant
of an option to Optionee.

     C. All capitalized terms in this Agreement shall have the meaning assigned
to them in the attached Appendix.

          NOW, THEREFORE, it is hereby agreed as follows:

          1. GRANT OF OPTION. The Corporation hereby grants to Optionee, as of
the Grant Date, an option to purchase up to the number of Option Shares
specified in the Grant Notice. The Option Shares shall be purchasable from time
to time during the option term specified in Paragraph 2 at the Exercise Price.

          2. OPTION TERM. This option shall have a maximum term of seven (7)
years measured from the Grant Date and shall accordingly expire at the close of
business on the Expiration Date, unless sooner terminated in accordance with
Paragraph 5 or 6.

          3. LIMITED
TRANSFERABILITY.

               (a) This option shall be neither transferable nor assignable
by Optionee other than by will or the laws of inheritance following Optionee’s
death and may be exercised, during Optionee’s lifetime, only by Optionee.
However, Optionee may designate one or more persons as the beneficiary or
beneficiaries of this option, and this option shall, in accordance with such
designation, automatically be transferred to such beneficiary or beneficiaries
upon the Optionee’s death while holding this option. Such beneficiary or
beneficiaries shall take the transferred option subject to all the terms and
conditions of this Agreement, including (without limitation) the limited time
period during which this option may, pursuant to Paragraph 5, be exercised
following Optionee’s death.

               (b) If this option is designated a Non-Statutory Option in the
Grant Notice, then this option may, subject to the consent of the Plan
Administrator, be assigned in

 

 

whole or in part during Optionee’s lifetime to one or more of the Optionee’s
Family Members or to a trust established for the exclusive benefit of the
Optionee or one or more such Family Members, to the extent such assignment is in
connection with the Optionee’s estate plan or pursuant to a domestic relations
order. The assigned portion shall be exercisable only by the person or persons
who acquire a proprietary interest in the option pursuant to such assignment.
The terms applicable to the assigned portion shall be the same as those in
effect for this option immediately prior to such assignment.

          4. DATES OF EXERCISE. This option shall become exercisable for the
Option Shares in one or more installments as specified in the Grant Notice. As
the option becomes exercisable for such installments, those installments shall
accumulate, and the option shall remain exercisable for the accumulated
installments until the Expiration Date or sooner termination of the option term
under Paragraph 5 or 6.

          5. CESSATION OF SERVICE. The option term specified in Paragraph 2
shall terminate (and this option shall cease to be outstanding) prior to the
Expiration Date should any of the following provisions become applicable:

               (a) Should Optionee cease to remain in Service for any reason
(other than death, Permanent Disability or Misconduct) while this option is
outstanding, then Optionee (or any person or persons to whom this option is
transferred pursuant to a permitted transfer under Paragraph 3) shall have a
period of three (3) months (commencing with the date of such cessation of
Service) during which to exercise this option, but in no event shall this option
be exercisable at any time after the Expiration Date.

               (b) Should Optionee die while this option is outstanding, then
the personal representative of Optionee’s estate or the person or persons to
whom the option is transferred pursuant to Optionee’s will or the laws of
inheritance following Optionee’s death or to whom the option is transferred
during Optionee’s lifetime pursuant to a permitted transfer under Paragraph 3
shall have the right to exercise this option. However, if Optionee dies while
holding this option and has an effective beneficiary designation in effect for
this option at the time of his or her death, then the designated beneficiary or
beneficiaries shall have the exclusive right to exercise this option following
Optionee’s death. Any such right to exercise this option shall lapse, and this
option shall cease to be outstanding, upon the earlier of (i) the expiration of
the twelve (12)-month period measured from the date of Optionee’s death or (ii)
the Expiration Date.

               (c) Should Optionee cease Service by reason of Permanent
Disability while this option is outstanding, then Optionee (or any person or
persons to whom this option is transferred pursuant to a permitted transfer
under Paragraph 3) shall have a period of twelve (12) months (commencing with
the date of such cessation of Service) during which to exercise this option. In
no event shall this option be exercisable at any time after the Expiration Date.

               (d) The applicable post-Service exercise period in effect for
this option pursuant to the foregoing provisions of this Paragraph 5 shall
automatically be extended by an additional period of time equal in duration to
any interval within that otherwise applicable post-

2

 

Service exercise period during which the exercise of this option or the
immediate sale of the Option Shares acquired hereunder cannot be effected in
compliance with applicable federal and state securities laws, but in no event
shall such an extension result in the continuation of this option beyond the
Expiration Date.

               (e) During the limited period this option remains exercisable
following Optionee’s cessation of Service, this option may not be exercised in
the aggregate for more than the number of Option Shares for which such option
is, at the time of Optionee’s cessation of Service, exercisable pursuant to the
Exercise Schedule specified in the Grant Notice or the special vesting
acceleration provisions of Paragraph 6. This option shall not vest or become
exercisable for any additional Option Shares, whether pursuant to the normal
Exercise Schedule specified in the Grant Notice or the special vesting
acceleration provisions of Paragraph 6, following Optionee’s cessation of
Service, except to the extent (if any) specifically authorized by the Plan
Administrator pursuant to an express written agreement with the Optionee. Upon
the expiration of the limited post-Service exercise period provided under this
Paragraph 5 or (if earlier) upon the Expiration Date, this option shall
terminate and cease to be outstanding for any otherwise vested and exercisable
Option Shares for which the option has not been exercised.

               (f) Should Optionee’s Service be terminated for Misconduct or
should Optionee otherwise engage in any Misconduct while this option is
outstanding, then this option shall terminate immediately and cease to remain
outstanding.

          6. SPECIAL ACCELERATION OF OPTION.

               (a) This option, to the extent outstanding at the time of a
Change in Control but not otherwise fully exercisable, shall automatically
accelerate so that this option shall, immediately prior to the effective date of
such Change in Control, vest and become exercisable for all of the Option Shares
at the time subject to this option and may be exercised for any or all of those
Option Shares as fully vested shares of Common Stock. However, this option shall
NOT vest or become exercisable on such an accelerated basis, if and to the
extent: (i) this option is to be assumed by the successor corporation (or parent
thereof) or is otherwise to be continued in full force and effect pursuant to
the terms of the Change in Control transaction or (ii) this option is to be
replaced with a cash incentive program of the successor corporation which
preserves the spread existing at the time of the Change in Control on any Option
Shares for which this option is not otherwise at that time exercisable (the
excess of the Fair Market Value of those Option Shares over the aggregate
Exercise Price payable for such shares) and provides for subsequent payout of
that spread in accordance with the same option exercise/vesting schedule for
those Option Shares set forth in the Grant Notice or (iii) such accelerated
vesting is otherwise precluded pursuant to the provisions of Paragraph 5(e).

               (b) Immediately following the Change in Control, this option
shall terminate and cease to be outstanding, except to the extent assumed by the
successor corporation (or parent thereof) or otherwise continued in effect
pursuant to the terms of the Change in Control transaction.

3

 

               (c) If this option is assumed in connection with a Change in
Control or otherwise continued in effect, then this option shall be
appropriately adjusted, immediately after such Change in Control, to apply to
the number and class of securities which would have been issuable to Optionee in
consummation of such Change in Control had the option been exercised immediately
prior to such Change in Control, and appropriate adjustments shall also be made
to the Exercise Price, provided the aggregate Exercise Price shall remain the
same. To the extent the actual holders of the Corporation’s outstanding Common
Stock receive cash consideration for their Common Stock in consummation of the
Change in Control, the successor corporation may, in connection with the
assumption or continuation of this option, substitute one or more shares of its
own common stock with a fair market value equivalent to the cash consideration
paid per share of Common Stock in such Change in Control.

               (d) This Agreement shall not in any way affect the right of
the Corporation to adjust, reclassify, reorganize or otherwise change its
capital or business structure or to merge, consolidate, dissolve, liquidate or
sell or transfer all or any part of its business or assets.

          7. ADJUSTMENT IN OPTION SHARES. Should any change be made to the
Common Stock by reason of any stock split, stock dividend, recapitalization,
combination of shares, exchange of shares or other change affecting the
outstanding Common Stock as a class without the Corporation’s receipt of
consideration, appropriate adjustments shall be made to (i) the total number
and/or class of securities subject to this option and (ii) the Exercise Price in
order to reflect such change and thereby preclude a dilution or enlargement of
benefits hereunder.

          8. STOCKHOLDER RIGHTS. The holder of this option shall not have any
stockholder rights with respect to the Option Shares until such person shall
have exercised the option, paid the Exercise Price and become a holder of record
of the purchased shares.

          9. MANNER OF EXERCISING OPTION.

               (a) In order to exercise this option with respect to all or
any part of the Option Shares for which this option is at the time exercisable,
Optionee (or any other person or persons exercising the option) must take the
following actions:

          (i) Execute and deliver to the Corporation a Notice of
Exercise for the Option Shares for which the option is exercised.

          (ii) Pay the aggregate Exercise Price for the purchased shares in one or more of the following forms:

          (A) cash or check made payable to the Corporation;

                              (B) shares of Common Stock held by Optionee (or
any other person or persons exercising the option) for the requisite

period necessary to avoid a charge to the Corporation’s earnings for
financial reporting purposes and valued at Fair Market Value on the
Exercise Date; or

4

 

          (C) through a special sale and remittance
procedure pursuant to which Optionee (or any other person or persons
exercising the option) shall concurrently provide irrevocable
instructions (i) to a brokerage firm (reasonably satisfactory to the
Corporation for purposes of administering such procedure in
compliance with the Corporation’s pre-notification/pre clearance
policies) to effect the immediate sale of the purchased shares and
remit to the Corporation, out of the sale proceeds available on the
settlement date, sufficient funds to cover the aggregate Exercise
Price payable for the purchased shares plus all applicable income
and employment taxes required to be withheld by the Corporation by
reason of such exercise and (ii) to the Corporation to deliver the
certificates for the purchased shares directly to such brokerage
firm on such settlement date in order to complete the sale.

     Except to the extent the sale and remittance procedure is
utilized in connection with the option exercise, payment of the
Exercise Price must accompany the Notice of Exercise delivered to
the Corporation in connection with the option exercise.

          (iii) Furnish to the Corporation appropriate
documentation that the person or persons exercising the option (if other
than Optionee) have the right to exercise this option.

          (iv) Make appropriate arrangements with the Corporation
(or Parent or Subsidiary employing or retaining Optionee) for the
satisfaction of all applicable income and employment tax withholding
requirements applicable to the option exercise.

               (b) As soon as practical after the Exercise Date, the
Corporation shall issue to or on behalf of Optionee (or any other person or
persons exercising this option) a certificate for the purchased Option Shares,
with the appropriate legends affixed thereto.

               (c) In no event may this option be exercised for any
fractional shares.

          10. COMPLIANCE WITH LAWS AND REGULATIONS.

               (a) The exercise of this option and the issuance of the Option
Shares upon such exercise shall be subject to compliance by the Corporation and
Optionee with all applicable requirements of law relating thereto and with all
applicable regulations of any stock exchange (or the Nasdaq National Market, if
applicable) on which the Common Stock may be listed for trading at the time of
such exercise and issuance.

               (b) The inability of the Corporation to obtain approval from
any regulatory body having authority deemed by the Corporation to be necessary
to the lawful issuance and sale of any Common Stock pursuant to this option
shall relieve the Corporation of any liability with respect to the non-issuance
or sale of the Common Stock as to which such

6

 

approval shall not have been obtained. The Corporation, however, shall use its
best efforts to obtain all such approvals.

          11. SUCCESSORS AND ASSIGNS. Except to the extent otherwise provided
in Paragraphs 3 and 6, the provisions of this Agreement shall inure to the
benefit of, and be binding upon, the Corporation and its successors and assigns
and Optionee, Optionee’s assigns, the legal representatives, heirs and legatees
of Optionee’s estate and any beneficiaries of this option designated by
Optionee.

          12. NOTICES. Any notice required to be given or delivered to the
Corporation under the terms of this Agreement shall be in writing and addressed
to the Corporation 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 below Optionee’s signature line on the Grant Notice. All
notices shall be deemed effective upon personal delivery or upon deposit in the
U.S. mail, postage prepaid and properly addressed to the party to be notified.

          13. CONSTRUCTION. This Agreement and the option evidenced hereby are
made and granted pursuant to the Plan and are in all respects limited by and
subject to the terms of the Plan. All decisions of the Plan Administrator with
respect to any question or issue arising under the Plan or this Agreement shall
be conclusive and binding on all persons having an interest in this option.

          14. GOVERNING LAW. The interpretation, performance and enforcement
of this Agreement shall be governed by the laws of the State of California
without resort to that State’s conflict-of-laws rules.

          15. EXCESS SHARES. If the Option Shares covered by this Agreement
exceed, as of the Grant Date, the number of shares of Common Stock which may
without stockholder approval be issued under the Plan, then this option shall
not become exercisable with respect to those excess shares, unless stockholder
approval of an amendment sufficiently increasing the number of shares of Common
Stock issuable under the Plan is obtained in accordance with the provisions of
the Plan.

          16. ADDITIONAL TERMS APPLICABLE TO AN INCENTIVE OPTION. In the event
this option is designated an Incentive Option in the Grant Notice, the following
terms and conditions shall also apply to the grant:

               (a) This option shall cease to qualify for favorable tax
treatment as an Incentive Option if (and to the extent) this option is exercised
for one or more Option Shares: (A) more than three (3) months after the date
Optionee ceases to be an Employee for any reason other than death or Permanent
Disability or (B) more than twelve (12) months after the date Optionee ceases to
be an Employee by reason of Permanent Disability.

               (b) No installment under this option shall qualify for
favorable tax treatment as an Incentive Option if (and to the extent) the
aggregate Fair Market Value (determined at the Grant Date) of the Common Stock
for which such installment first becomes

7

 

exercisable hereunder would, when added to the aggregate value (determined as of
the respective date or dates of grant) of the Common Stock or other securities
for which this option or any other Incentive Options granted to Optionee prior
to the Grant Date (whether under the Plan or any other option plan of the
Corporation or any Parent or Subsidiary) first become exercisable during the
same calendar year, exceed One Hundred Thousand Dollars ($100,000) in the
aggregate. Should such One Hundred Thousand Dollar ($100,000) limitation be
exceeded in any calendar year, this option shall nevertheless become exercisable
for the excess shares in such calendar year as a Non-Statutory Option.

               (c) Should the exercisability of this option be accelerated
upon a Change in Control, then this option shall qualify for favorable tax
treatment as an Incentive Option only to the extent the aggregate Fair Market
Value (determined at the Grant Date) of the Common Stock for which this option
first becomes exercisable in the calendar year in which the Change in Control
transaction occurs does not, when added to the aggregate value (determined as of
the respective date or dates of grant) of the Common Stock or other securities
for which this option or one or more other Incentive Options granted to Optionee
prior to the Grant Date (whether under the Plan or any other option plan of the
Corporation or any Parent or Subsidiary) first become exercisable during the
same calendar year, exceed One Hundred Thousand Dollars ($100,000) in the
aggregate. Should the applicable One Hundred Thousand Dollar ($100,000)
limitation be exceeded in the calendar year of such Change in Control, the
option may nevertheless be exercised for the excess shares in such calendar year
as a Non-Statutory Option.

               (d) Should Optionee hold, in addition to this option, one or
more other options to purchase Common Stock which become exercisable for the
first time in the same calendar year as this option, then for purposes of the
foregoing limitations on the exercisability of such options as Incentive
Options, this option and each of those other options shall be deemed to become
first exercisable in that calendar year on the basis of the chronological order
in which they were granted, except to the extent otherwise provided under
applicable law or regulation.

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

8

 

EXHIBIT I

NOTICE OF EXERCISE

          I hereby notify VERITAS Software Corporation (the “Corporation”)
that I elect to purchase                      shares of the Corporation’s Common Stock
(the “Purchased Shares”) at the option exercise price of $                     per share
(the “Exercise Price”) pursuant to that certain option (the “Option”) granted to
me under the Corporation’s 2003 Stock Incentive Plan on                                         ,
                    .

          Concurrently with the delivery of this Exercise Notice to the
Corporation, I shall hereby pay to the Corporation the Exercise Price for the
Purchased Shares in accordance with the provisions of my agreement with the
Corporation (or other documents) evidencing the Option and shall deliver
whatever additional documents may be required by such agreement as a condition
for exercise. Alternatively, I may utilize the special broker-dealer sale and
remittance procedure specified in my agreement to effect payment of the Exercise
Price.

                                        ,                     

Date

	 	 	 	 	 	 	 
	 	 	 	 	 
	 

	 	Optionee
	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Address:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 
	Print name in exact manner it is to
appear on the stock certificate:
	 	 	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 
	Address to which certificate is to
be sent, if different from address
above:
	 	 	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 
	Social Security Number:
	 	 	 	 	 	 
	 	 	 	 	 

9

 

APPENDIX

          The following definitions shall be in effect under the Agreement:

          A. AGREEMENT shall mean this Stock Option Agreement.

          B. BOARD shall mean the Corporation’s Board of Directors.

          C. CHANGE IN CONTROL shall mean a change in ownership or control of
the Corporation effected through any of the following transactions:

          (i) a merger, consolidation or other reorganization approved
by the Corporation’s stockholders, unless securities representing more
than fifty percent (50%) of the total combined voting power of the voting
securities of the successor corporation are immediately thereafter
beneficially owned, directly or indirectly and in substantially the same
proportion, by the persons who beneficially owned the Corporation’s
outstanding voting securities immediately prior to such transaction, or

          (ii) the sale, transfer or other disposition of all or
substantially all of the Corporation’s assets in complete liquidation or
dissolution of the Corporation, or

          (iii) any transaction or series of related transactions
pursuant to which any person or any group of persons comprising a “group”
within the meaning of Rule 13d-5(b)(1) under the 1934 Act (other than the
Corporation or a person that, prior to such transaction or series of
related transactions, directly or indirectly controls, is controlled by or
is under common control with, the Corporation) becomes directly or
indirectly the beneficial owner (within the meaning of Rule 13d-3 under
the 1934 Act) of securities possessing (or convertible into or exercisable
for securities possessing) more than fifty percent (50%) of the total
combined voting power of the Corporation’s securities outstanding
immediately after the consummation of such transaction or series of
related transactions, whether such transaction involves a direct issuance
from the Corporation or the acquisition of outstanding securities held by
one or more of the Corporation’s stockholders.

          D. CODE shall mean the Internal Revenue Code of 1986, as amended.

          E. COMMON STOCK shall mean shares of the Corporation’s common stock.

          F. CORPORATION shall mean VERITAS Software Corporation, a Delaware
corporation, and any successor corporation to all or substantially all of the
assets or voting stock of VERITAS Software Corporation which shall by
appropriate action adopt the Plan.

A-1

 

          G. EMPLOYEE shall mean an individual who is in the employ of the
Corporation (or any Parent or Subsidiary), subject to the control and direction
of the employer entity as to both the work to be performed and the manner and
method of performance.

          H. EXERCISE DATE shall mean the date on which the option shall have
been exercised in accordance with Paragraph 9 of the Agreement.

          I. EXERCISE PRICE shall mean the exercise price per Option Share as
specified in the Grant Notice.

          J. EXERCISE SCHEDULE shall mean the schedule set forth in the Grant
Notice pursuant to which the option is to vest and become exercisable for the
Option Shares in a series of installments over the Optionee’s period of Service.

          K. EXPIRATION DATE shall mean the date on which the option expires
as specified in the Grant Notice.

          L. FAIR MARKET VALUE per share of Common Stock on any relevant date
shall be determined in accordance with the following provisions:

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

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

          M. FAMILY MEMBER shall mean any of the following members of the
Optionee’s family: any child, stepchild, grandchild, parent, stepparent,
grandparent, spouse, former spouse, sibling, niece, nephew, mother-in-law,
father-in-law, son-in-law, daughter-in-law, bother-in-law or sister-in-law.

          N. GRANT DATE shall mean the date of grant of the option as
specified in the Grant Notice.

A-2

 

          O. GRANT NOTICE shall mean the Notice of Grant of Stock Option
accompanying the Agreement, pursuant to which Optionee has been informed of the
basic terms of the option evidenced hereby.

          P. INCENTIVE OPTION shall mean an option which satisfies the
requirements of Code Section 422.

          Q. MISCONDUCT shall mean the commission of any act of fraud,
embezzlement or dishonesty by Optionee, any unauthorized use or disclosure by
Optionee of confidential information or trade secrets of the Corporation (or any
Parent or Subsidiary), or any other intentional misconduct by Optionee adversely
affecting the business or affairs of the Corporation (or any Parent or
Subsidiary) in a material manner. The foregoing definition shall not in any way
preclude or restrict the right of the Corporation (or any Parent or Subsidiary)
to discharge or dismiss Optionee or any other person in the Service of the
Corporation (or any Parent or Subsidiary) for any other acts or omissions, but
such other acts or omissions shall not be deemed, for purposes of the Plan or
this Agreement, to constitute grounds for termination for Misconduct.

          R. NON-STATUTORY OPTION shall mean an option not intended to satisfy
the requirements of Code Section 422.

          S. NOTICE OF EXERCISE shall mean the notice of exercise in the form
attached hereto as Exhibit I.

          T. OPTION SHARES shall mean the number of shares of Common Stock
subject to the option as specified in the Grant Notice.

          U. OPTIONEE shall mean the person to whom the option is granted as
specified in the Grant Notice.

          V. PARENT shall mean any corporation (other than the Corporation) in
an unbroken chain of corporations ending with the Corporation, provided each
corporation in the unbroken chain (other than the Corporation) owns, at the time
of the determination, stock possessing fifty percent (50%) or more of the total
combined voting power of all classes of stock in one of the other corporations
in such chain.

          W. PERMANENT DISABILITY shall mean the inability of Optionee to
engage in any substantial gainful activity by reason of any medically
determinable physical or mental impairment which is expected to result in death
or has lasted or can be expected to last for a continuous period of twelve (12)
months or more.

          X. PLAN shall mean the Corporation’s 2003 Stock Incentive Plan, as
amended from time to time.

          Y. PLAN ADMINISTRATOR shall mean either the Board or a committee of
the Board acting in its capacity as administrator of the Plan.

A-3

 

          Z. SERVICE shall mean the Optionee’s performance of services for the
Corporation (or any Parent or Subsidiary) in the capacity of an Employee, a
non-employee member of the board of directors or a consultant or independent
advisor. For purposes of this Agreement, Optionee shall be deemed to cease
Service immediately upon the occurrence of the either of the following events:
(i) Optionee no longer performs services in any of the foregoing capacities for
the Corporation or any Parent or Subsidiary or (ii) the entity for which
Optionee is performing such services ceases to remain a Parent or Subsidiary of
the Corporation, even though the Optionee may subsequently continue to perform
services for that entity. Service shall not be deemed to cease during a period
of military leave, sick leave or other personal leave approved by the
Corporation; provided, however, that should such leave of absence exceed three
(3) months, then for purposes of determining the period within which the Option
(if designated as an Incentive Option in the Grant Notice) may be exercised as
such an Incentive Option under the federal tax laws, the Optionee’s Service
shall be deemed to cease on the first day immediately following the expiration
of such three (3)-month period, unless Optionee is provided with the right to
return to Service following such leave either by statute or by written contract.
Except to the extent otherwise required by law or expressly authorized by the
Plan Administrator, no Service credit shall be given for vesting purposes for
any period the Optionee is on a leave of absence.

          AA. STOCK EXCHANGE shall mean the American Stock Exchange or the New
York Stock Exchange.

          BB. SUBSIDIARY shall mean any corporation (other than the
Corporation) in an unbroken chain of corporations beginning with the
Corporation, provided each corporation (other than the last corporation) in the
unbroken chain owns, at the time of the determination, stock possessing fifty
percent (50%) or more of the total combined voting power of all classes of stock
in one of the other corporations in such chain.

A-4

 

Exhibit B

Form of Stock Option Agreement for Executive Officers

 

 

FORM OF

VERITAS SOFTWARE CORPORATION

STOCK OPTION AGREEMENT

(FOR EXECUTIVES AND SENIOR VPS)

RECITALS

     A. The Board has adopted the Plan for the purpose of retaining the
services of selected Employees and consultants and other independent advisors
who provide services to the Corporation (or any Parent or Subsidiary).

     B. Optionee is to render valuable services to the Corporation (or a Parent
or Subsidiary), and this Agreement is executed pursuant to, and is intended to
carry out the purposes of, the Plan in connection with the Corporation’s grant
of an option to Optionee.

     C. All capitalized terms in this Agreement shall have the meaning assigned
to them in the attached Appendix.

          NOW, THEREFORE, it is hereby agreed as follows:

          1. GRANT OF OPTION. The Corporation hereby grants to Optionee, as of
the Grant Date, an option to purchase up to the number of Option Shares
specified in the Grant Notice. The Option Shares shall be purchasable from time
to time during the option term specified in Paragraph 2 at the Exercise Price.

          2. OPTION TERM. This option shall have a maximum term of seven (7)
years measured from the Grant Date and shall accordingly expire at the close of
business on the Expiration Date, unless sooner terminated in accordance with
Paragraph 5 or 6.

          3. LIMITED TRANSFERABILITY.

                    (a) This option shall be neither transferable nor assignable
by Optionee other than by will or the laws of inheritance following Optionee’s
death and may be exercised, during Optionee’s lifetime, only by Optionee.
However, Optionee may designate one or more persons as the beneficiary or
beneficiaries of this option, and this option shall, in accordance with such
designation, automatically be transferred to such beneficiary or beneficiaries
upon the Optionee’s death while holding this option. Such beneficiary or
beneficiaries shall take the transferred option subject to all the terms and
conditions of this Agreement, including (without limitation) the limited time
period during which this option may, pursuant to Paragraph 5, be exercised
following Optionee’s death.

 

                (b) If this option is designated a Non-Statutory Option in the
Grant Notice, then this option may, subject to the consent of the Plan
Administrator, be assigned in whole or in part during Optionee’s lifetime to one
or more of the Optionee’s Family Members or to a trust established for the
exclusive benefit of the Optionee or one or more such Family Members, to the
extent such assignment is in connection with the Optionee’s estate plan or
pursuant to a domestic relations order. The assigned portion shall be
exercisable only by the person or persons who acquire a proprietary interest in
the option pursuant to such assignment. The terms applicable to the assigned
portion shall be the same as those in effect for this option immediately prior
to such assignment.

          4. DATES OF EXERCISE. This option shall become exercisable for the
Option Shares in one or more installments as specified in the Grant Notice. As
the option becomes exercisable for such installments, those installments shall
accumulate, and the option shall remain exercisable for the accumulated
installments until the Expiration Date or sooner termination of the option term
under Paragraph 5 or 6.

          5. CESSATION OF SERVICE. The option term specified in Paragraph 2
shall terminate (and this option shall cease to be outstanding) prior to the
Expiration Date should any of the following provisions become applicable:

                    (a) Should Optionee cease to remain in Service for any reason
(other than Misconduct) while this option is outstanding, then Optionee (or any
person or persons to whom this option is transferred pursuant to a permitted
transfer under Paragraph 3) shall have a period of twelve (12) months
(commencing with the date of such cessation of Service) during which to exercise
this option, but in no event shall this option be exercisable at any time after
the Expiration Date.

                    (b) Should Optionee die while this option is outstanding, then
the personal representative of Optionee’s estate or the person or persons to
whom the option is transferred pursuant to Optionee’s will or the laws of
inheritance following Optionee’s death or to whom the option is transferred
during Optionee’s lifetime pursuant to a permitted transfer under Paragraph 3
shall have the right to exercise this option. However, if Optionee dies while
holding this option and has an effective beneficiary designation in effect for
this option at the time of his or her death, then the designated beneficiary or
beneficiaries shall have the exclusive right to exercise this option following
Optionee’s death. Any such right to exercise this option shall lapse, and this
option shall cease to be outstanding, upon the earlier of (i) the expiration of
the twelve (12) month period measured from the date of Optionee’s death or (ii)
the Expiration Date.

                    (c) Should Optionee cease Service by reason of Permanent
Disability while this option is outstanding, then Optionee (or any person or
persons to whom this option is transferred pursuant to a permitted transfer
under Paragraph 3) shall have a period of twelve (12) months (commencing with
the date of such cessation of Service) during which to exercise this option. In
no event shall this option be exercisable at any time after the Expiration Date.

2

 

                     (d) The applicable post-Service exercise period in effect for
this option pursuant to the foregoing provisions of this Paragraph 5 shall
automatically be extended by an additional period of time equal in duration to
any interval within that otherwise applicable post-Service exercise period
during which the exercise of this option or the immediate sale of the Option
Shares acquired hereunder cannot be effected in compliance with applicable
federal and state securities laws, but in no event shall such an extension
result in the continuation of this option beyond the Expiration Date.

                    (e) During the limited period this option remains exercisable
following Optionee’s cessation of Service, this option may not be exercised in
the aggregate for more than the number of Option Shares for which such option
is, at the time of Optionee’s cessation of Service, exercisable pursuant to the
Exercise Schedule specified in the Grant Notice or the special vesting
acceleration provisions of Paragraph 6. This option shall not vest or become
exercisable for any additional Option Shares, whether pursuant to the normal
Exercise Schedule specified in the Grant Notice or the special vesting
acceleration provisions of Paragraph 6, following Optionee’s cessation of
Service, except to the extent (if any) specifically authorized by the Plan
Administrator pursuant to an express written agreement with the Optionee. Upon
the expiration of the limited post-Service exercise period provided under this
Paragraph 5 or (if earlier) upon the Expiration Date, this option shall
terminate and cease to be outstanding for any otherwise vested and exercisable
Option Shares for which the option has not been exercised.

                    (f) Should Optionee’s Service be terminated for Misconduct or
should Optionee otherwise engage in any Misconduct while this option is
outstanding, then this option shall terminate immediately and cease to remain
outstanding.

          6. SPECIAL ACCELERATION OF OPTION.

                    (a) This option, to the extent outstanding at the time of a
Change in Control but not otherwise fully exercisable, shall automatically
accelerate so that this option shall, immediately prior to the effective date of
such Change in Control, vest and become exercisable for all of the Option Shares
at the time subject to this option and may be exercised for any or all of those
Option Shares as fully vested shares of Common Stock. However, this option shall
NOT vest or become exercisable on such an accelerated basis, if and to the
extent: (i) this option is to be assumed by the successor corporation (or parent
thereof) or is otherwise to be continued in full force and effect pursuant to
the terms of the Change in Control transaction or (ii) this option is to be
replaced with a cash incentive program of the successor corporation which
preserves the spread existing at the time of the Change in Control on any Option
Shares for which this option is not otherwise at that time exercisable (the
excess of the Fair Market Value of those Option Shares over the aggregate
Exercise Price payable for such shares) and provides for subsequent payout of
that spread in accordance with the same option exercise/vesting schedule for
those Option Shares set forth in the Grant Notice or (iii) such accelerated
vesting is otherwise precluded pursuant to the provisions of Paragraph 5(e).

                     (b) Immediately following the Change in Control, this option
shall terminate and cease to be outstanding, except to the extent assumed by the
successor corporation

3

 

(or parent thereof) or otherwise continued in effect pursuant to the terms of
the Change in Control transaction.

                    (c) If this option is assumed in connection with a Change in
Control or otherwise continued in effect, then this option shall be
appropriately adjusted, immediately after such Change in Control, to apply to
the number and class of securities which would have been issuable to Optionee in
consummation of such Change in Control had the option been exercised immediately
prior to such Change in Control, and appropriate adjustments shall also be made
to the Exercise Price, provided the aggregate Exercise Price shall remain the
same. To the extent the actual holders of the Corporation’s outstanding Common
Stock receive cash consideration for their Common Stock in consummation of the
Change in Control, the successor corporation may, in connection with the
assumption or continuation of this option, substitute one or more shares of its
own common stock with a fair market value equivalent to the cash consideration
paid per share of Common Stock in such Change in Control.

                         (d) This Agreement shall not in any way affect the right of
the Corporation to adjust, reclassify, reorganize or otherwise change its
capital or business structure or to merge, consolidate, dissolve, liquidate or
sell or transfer all or any part of its business or assets.

          7. ADJUSTMENT IN OPTION SHARES. Should any change be made to the
Common Stock by reason of any stock split, stock dividend, recapitalization,
combination of shares, exchange of shares or other change affecting the
outstanding Common Stock as a class without the Corporation’s receipt of
consideration, appropriate adjustments shall be made to (i) the total number
and/or class of securities subject to this option and (ii) the Exercise Price in
order to reflect such change and thereby preclude a dilution or enlargement of
benefits hereunder.

          8. STOCKHOLDER RIGHTS. The holder of this option shall not have any
stockholder rights with respect to the Option Shares until such person shall
have exercised the option, paid the Exercise Price and become a holder of record
of the purchased shares.

          9. MANNER OF EXERCISING OPTION.

                     (a) In order to exercise this option with respect to all or
any part of the Option Shares for which this option is at the time exercisable,
Optionee (or any other person or persons exercising the option) must take the
following actions:

                                   (i) Execute and deliver to the Corporation a Notice of
Exercise for the Option Shares for which the option is exercised.

                                   (ii) Pay the aggregate Exercise Price for the purchased
shares in one or more of the following forms:

                                        (A) cash or check made payable to the Corporation;

4

 

                                        (B) shares of Common Stock held by Optionee (or
any other person or persons exercising the option) for the requisite period
necessary to avoid a charge to the Corporation’s earnings for financial
reporting purposes and valued at Fair Market Value on the Exercise Date; or

                                        (C) through a special sale and remittance
procedure pursuant to which Optionee (or any other person or persons exercising
the option) shall concurrently provide irrevocable instructions (i) to a
brokerage firm (reasonably satisfactory to the Corporation for purposes of
administering such procedure in compliance with the Corporation’s
pre-notification/pre clearance policies) to effect the immediate sale of the
purchased shares and remit to the Corporation, out of the sale proceeds
available on the settlement date, sufficient funds to cover the aggregate
Exercise Price payable for the purchased shares plus all applicable income and
employment taxes required to be withheld by the Corporation by reason of such
exercise and (ii) to the Corporation to deliver the certificates for the
purchased shares directly to such brokerage firm on such settlement date in
order to complete the sale.

                                        Except to the extent the sale and remittance
procedure is utilized in connection with the option exercise, payment of the
Exercise Price must accompany the Notice of Exercise delivered to the
Corporation in connection with the option exercise.

                                   (iii) Furnish to the Corporation appropriate
documentation that the person or persons exercising the option (if other than
Optionee) have the right to exercise this option.

                                   (iv) Make appropriate arrangements with the Corporation
(or Parent or Subsidiary employing or retaining Optionee) for the satisfaction
of all applicable income and employment tax withholding requirements applicable
to the option exercise.

                    (b) As soon as practical after the Exercise Date, the
Corporation shall issue to or on behalf of Optionee (or any other person or
persons exercising this option) a certificate for the purchased Option Shares,
with the appropriate legends affixed thereto.

                    (c) In no event may this option be exercised for any
fractional shares.

          10. COMPLIANCE WITH LAWS AND REGULATIONS.

                    (a) The exercise of this option and the issuance of the Option
Shares upon such exercise shall be subject to compliance by the Corporation and
Optionee with all applicable requirements of law relating thereto and with all
applicable regulations of any stock exchange (or the Nasdaq National Market, if
applicable) on which the Common Stock may be listed for trading at the time of
such exercise and issuance.

5

 

                    (b) The inability of the Corporation to obtain approval from
any regulatory body having authority deemed by the Corporation to be necessary
to the lawful issuance and sale of any Common Stock pursuant to this option
shall relieve the Corporation of any liability with respect to the non-issuance
or sale of the Common Stock as to which such approval shall not have been
obtained. The Corporation, however, shall use its best efforts to obtain all
such approvals.

          11. SUCCESSORS AND ASSIGNS. Except to the extent otherwise provided
in Paragraphs 3 and 6, the provisions of this Agreement shall inure to the
benefit of, and be binding upon, the Corporation and its successors and assigns
and Optionee, Optionee’s assigns, the legal representatives, heirs and legatees
of Optionee’s estate and any beneficiaries of this option designated by
Optionee.

          12. NOTICES. Any notice required to be given or delivered to the
Corporation under the terms of this Agreement shall be in writing and addressed
to the Corporation 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 below Optionee’s signature line on the Grant Notice. All
notices shall be deemed effective upon personal delivery or upon deposit in the
U.S. mail, postage prepaid and properly addressed to the party to be notified.

          13. CONSTRUCTION. This Agreement and the option evidenced hereby are
made and granted pursuant to the Plan and are in all respects limited by and
subject to the terms of the Plan. All decisions of the Plan Administrator with
respect to any question or issue arising under the Plan or this Agreement shall
be conclusive and binding on all persons having an interest in this option.

          14. GOVERNING LAW. The interpretation, performance and enforcement
of this Agreement shall be governed by the laws of the State of California
without resort to that State’s conflict-of-laws rules.

          15. EXCESS SHARES. If the Option Shares covered by this Agreement
exceed, as of the Grant Date, the number of shares of Common Stock which may
without stockholder approval be issued under the Plan, then this option shall
not become exercisable with respect to those excess shares, unless stockholder
approval of an amendment sufficiently increasing the number of shares of Common
Stock issuable under the Plan is obtained in accordance with the provisions of
the Plan.

          16. ADDITIONAL TERMS APPLICABLE TO AN INCENTIVE OPTION. In the event
this option is designated an Incentive Option in the Grant Notice, the following
terms and conditions shall also apply to the grant:

                    (a) This option shall cease to qualify for favorable tax
treatment as an Incentive Option if (and to the extent) this option is exercised
for one or more Option Shares: (A) more than three (3) months after the date
Optionee ceases to be an Employee for any reason other than death or Permanent
Disability or (B) more than twelve (12) months after the date Optionee ceases to
be an Employee by reason of Permanent Disability.

6

 

                    (b) No installment under this option shall qualify for
favorable tax treatment as an Incentive Option if (and to the extent) the
aggregate Fair Market Value (determined at the Grant Date) of the Common Stock
for which such installment first becomes exercisable hereunder would, when added
to the aggregate value (determined as of the respective date or dates of grant)
of the Common Stock or other securities for which this option or any other
Incentive Options granted to Optionee prior to the Grant Date (whether under the
Plan or any other option plan of the Corporation or any Parent or Subsidiary)
first become exercisable during the same calendar year, exceed One Hundred
Thousand Dollars ($100,000) in the aggregate. Should such One Hundred Thousand
Dollar ($100,000) limitation be exceeded in any calendar year, this option shall
nevertheless become exercisable for the excess shares in such calendar year as a
Non-Statutory Option.

                    (c) Should the exercisability of this option be accelerated
upon a Change in Control, then this option shall qualify for favorable tax
treatment as an Incentive Option only to the extent the aggregate Fair Market
Value (determined at the Grant Date) of the Common Stock for which this option
first becomes exercisable in the calendar year in which the Change in Control
transaction occurs does not, when added to the aggregate value (determined as of
the respective date or dates of grant) of the Common Stock or other securities
for which this option or one or more other Incentive Options granted to Optionee
prior to the Grant Date (whether under the Plan or any other option plan of the
Corporation or any Parent or Subsidiary) first become exercisable during the
same calendar year, exceed One Hundred Thousand Dollars ($100,000) in the
aggregate. Should the applicable One Hundred Thousand Dollar ($100,000)
limitation be exceeded in the calendar year of such Change in Control, the
option may nevertheless be exercised for the excess shares in such calendar year
as a Non-Statutory Option.

                    (d) Should Optionee hold, in addition to this option, one or
more other options to purchase Common Stock which become exercisable for the
first time in the same calendar year as this option, then for purposes of the
foregoing limitations on the exercisability of such options as Incentive
Options, this option and each of those other options shall be deemed to become
first exercisable in that calendar year on the basis of the chronological order
in which they were granted, except to the extent otherwise provided under
applicable law or regulation.

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

          

7

 

EXHIBIT I

NOTICE OF EXERCISE

          I hereby notify VERITAS Software Corporation (the “Corporation”)
that I elect to purchase ___shares of the Corporation’s Common Stock
(the “Purchased Shares”) at the option exercise price of $  per share
(the “Exercise Price”) pursuant to that certain option (the “Option”) granted to
me under the Corporation’s 2003 Stock Incentive Plan on ___,
___.

          Concurrently with the delivery of this Exercise Notice to the
Corporation, I shall hereby pay to the Corporation the Exercise Price for the
Purchased Shares in accordance with the provisions of my agreement with the
Corporation (or other documents) evidencing the Option and shall deliver
whatever additional documents may be required by such agreement as a condition
for exercise. Alternatively, I may utilize the special broker-dealer sale and
remittance procedure specified in my agreement to effect payment of the Exercise
Price.

                                        ,                     

Date

	 	 	 	 	 	 	 
	 	 	 	 	 
	 

	 	Optionee
	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Address:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 

	 	 	 	 	 	 	 
	Print name in exact manner it is to
appear on the stock certificate:

	 	 	 	 
	 	 
	 	 	 	 
	 
	 	 	 	 	 	 
	Address to which certificate is to
be sent, if different from address
above:
	 	 	 	 	 	 
	 	 	 	 
	 
	 	 	 	 	 	 
	Social Security Number:
	 	 	 	 	 	 
	 	 	 	 

 

APPENDIX

          The following definitions shall be in effect under the Agreement:

          A. AGREEMENT shall mean this Stock Option Agreement.

          B. BOARD shall mean the Corporation’s Board of Directors.

          C. CHANGE IN CONTROL shall mean a change in ownership or control of
the Corporation effected through any of the following transactions:

               (i) a merger, consolidation or other reorganization approved
by the Corporation’s stockholders, unless securities representing more
than fifty percent (50%) of the total combined voting power of the voting
securities of the successor corporation are immediately thereafter
beneficially owned, directly or indirectly and in substantially the same
proportion, by the persons who beneficially owned the Corporation’s
outstanding voting securities immediately prior to such transaction, or

               (ii) the sale, transfer or other disposition of all or
substantially all of the Corporation’s assets in complete liquidation or
dissolution of the Corporation, or

               (iii) any transaction or series of related transactions
pursuant to which any person or any group of persons comprising a “group”
within the meaning of Rule 13d-5(b)(1) under the 1934 Act (other than the
Corporation or a person that, prior to such transaction or series of
related transactions, directly or indirectly controls, is controlled by or
is under common control with, the Corporation) becomes directly or
indirectly the beneficial owner (within the meaning of Rule 13d-3 under
the 1934 Act) of securities possessing (or convertible into or exercisable
for securities possessing) more than fifty percent (50%) of the total
combined voting power of the Corporation’s securities outstanding
immediately after the consummation of such transaction or series of
related transactions, whether such transaction involves a direct issuance
from the Corporation or the acquisition of outstanding securities held by
one or more of the Corporation’s stockholders.

          D. CODE shall mean the Internal Revenue Code of 1986, as amended.

          E. COMMON STOCK shall mean shares of the Corporation’s common stock.

          F. CORPORATION shall mean VERITAS Software Corporation, a Delaware
corporation, and any successor corporation to all or substantially all of the
assets or voting stock of VERITAS Software Corporation which shall by
appropriate action adopt the Plan.

A- 1

 

          G. EMPLOYEE shall mean an individual who is in the employ of the
Corporation (or any Parent or Subsidiary), subject to the control and direction
of the employer entity as to both the work to be performed and the manner and
method of performance.

          H. EXERCISE DATE shall mean the date on which the option shall have
been exercised in accordance with Paragraph 9 of the Agreement.

          I. EXERCISE PRICE shall mean the exercise price per Option Share as
specified in the Grant Notice.

          J. EXERCISE SCHEDULE shall mean the schedule set forth in the Grant
Notice pursuant to which the option is to vest and become exercisable for the
Option Shares in a series of installments over the Optionee’s period of Service.

          K. EXPIRATION DATE shall mean the date on which the option expires
as specified in the Grant Notice.

          L. FAIR MARKET VALUE per share of Common Stock on any relevant date
shall be determined in accordance with the following provisions:

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

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

          M. FAMILY MEMBER shall mean any of the following members of the
Optionee’s family: any child, stepchild, grandchild, parent, stepparent,
grandparent, spouse, former spouse, sibling, niece, nephew, mother-in-law,
father-in-law, son-in-law, daughter-in-law, bother-in-law or sister-in-law.

          N. GRANT DATE shall mean the date of grant of the option as
specified in the Grant Notice.

A- 2

 

          O. GRANT NOTICE shall mean the Notice of Grant of Stock Option
accompanying the Agreement, pursuant to which Optionee has been informed of the
basic terms of the option evidenced hereby.

          P. INCENTIVE OPTION shall mean an option which satisfies the
requirements of Code Section 422.

          Q. MISCONDUCT shall mean the commission of any act of fraud,
embezzlement or dishonesty by Optionee, any unauthorized use or disclosure by
Optionee of confidential information or trade secrets of the Corporation (or any
Parent or Subsidiary), or any other intentional misconduct by Optionee adversely
affecting the business or affairs of the Corporation (or any Parent or
Subsidiary) in a material manner. The foregoing definition shall not in any way
preclude or restrict the right of the Corporation (or any Parent or Subsidiary)
to discharge or dismiss Optionee or any other person in the Service of the
Corporation (or any Parent or Subsidiary) for any other acts or omissions, but
such other acts or omissions shall not be deemed, for purposes of the Plan or
this Agreement, to constitute grounds for termination for Misconduct.

          R. NON-STATUTORY OPTION shall mean an option not intended to satisfy
the requirements of Code Section 422.

          S. NOTICE OF EXERCISE shall mean the notice of exercise in the form
attached hereto as Exhibit I.

          T. OPTION SHARES shall mean the number of shares of Common Stock
subject to the option as specified in the Grant Notice.

          U. OPTIONEE shall mean the person to whom the option is granted as
specified in the Grant Notice.

          V. PARENT shall mean any corporation (other than the Corporation) in
an unbroken chain of corporations ending with the Corporation, provided each
corporation in the unbroken chain (other than the Corporation) owns, at the time
of the determination, stock possessing fifty percent (50%) or more of the total
combined voting power of all classes of stock in one of the other corporations
in such chain.

          W. PERMANENT DISABILITY shall mean the inability of Optionee to
engage in any substantial gainful activity by reason of any medically
determinable physical or mental impairment which is expected to result in death
or has lasted or can be expected to last for a continuous period of twelve (12)
months or more.

          X. PLAN shall mean the Corporation’s 2003 Stock Incentive Plan, as
amended from time to time.

          Y. PLAN ADMINISTRATOR shall mean either the Board or a committee of
the Board acting in its capacity as administrator of the Plan.

A- 3

 

          Z. SERVICE shall mean the Optionee’s performance of services for the
Corporation (or any Parent or Subsidiary) in the capacity of an Employee, a
non-employee member of the board of directors or a consultant or independent
advisor. For purposes of this Agreement, Optionee shall be deemed to cease
Service immediately upon the occurrence of the either of the following events:
(i) Optionee no longer performs services in any of the foregoing capacities for
the Corporation or any Parent or Subsidiary or (ii) the entity for which
Optionee is performing such services ceases to remain a Parent or Subsidiary of
the Corporation, even though the Optionee may subsequently continue to perform
services for that entity. Service shall not be deemed to cease during a period
of military leave, sick leave or other personal leave approved by the
Corporation; provided, however, that should such leave of absence exceed three
(3) months, then for purposes of determining the period within which the Option
(if designated as an Incentive Option in the Grant Notice) may be exercised as
such an Incentive Option under the federal tax laws, the Optionee’s Service
shall be deemed to cease on the first day immediately following the expiration
of such three (3)-month period, unless Optionee is provided with the right to
return to Service following such leave either by statute or by written contract.
Except to the extent otherwise required by law or expressly authorized by the
Plan Administrator, no Service credit shall be given for vesting purposes for
any period the Optionee is on a leave of absence.

          AA. STOCK EXCHANGE shall mean the American Stock Exchange or the New
York Stock Exchange.

          BB. SUBSIDIARY shall mean any corporation (other than the
Corporation) in an unbroken chain of corporations beginning with the
Corporation, provided each corporation (other than the last corporation) in the
unbroken chain owns, at the time of the determination, stock possessing fifty
percent (50%) or more of the total combined voting power of all classes of stock
in one of the other corporations in such chain.

A- 4

 

Exhibit C

Form of Notice of Stock Option Assumption

 

 

	 	 	 
	

	 	Symantec EE ID:

Re: Assumption of Your VERITAS Stock Option(s) by Symantec Corporation

Dear [Name of Employee]:

As of July 2, 2005 (the “Effective Date”), Symantec Corporation (“Symantec”) completed its
acquisition of VERITAS Software Corporation (the “Merger”) pursuant to the Agreement and Plan of
Reorganization dated as of December 15, 2004 (the “Merger Agreement”).

Pursuant to the Merger Agreement, your options to purchase shares of VERITAS common stock (each a
“VERITAS Option” and specified on the attached notice (the “Notice”)) assumed and converted into
options to purchase shares of Symantec Common Stock (each a “Symantec Option”).

Each VERITAS Option that is assumed and converted into a Symantec Option will continue to be
governed by the applicable stock option agreement, any amendment(s) thereto entered into by and
between you and VERITAS, and the applicable stock option plan (the “Plan(s)”) pursuant to which
such VERITAS Option was granted. In consideration of, Symantec’s assumption of the option(s)
listed on the attached Notice, all of your rights to purchase shares of VERITAS common stock are
terminated and your only rights to purchase Symantec common stock based on any right to purchase
VERITAS common stock are through each Symantec Option listed on the attached Notice.

By exercising your Symantec Options, you agree to the following:

(1) you are responsible for any tax or social insurance contribution obligation legally due by you
and/or brokerage fees arising out of the purchase and sale of Symantec shares; Symantec does not
guarantee any particular favorable tax treatment for the Symantec Options; and

(2) the Plans are voluntary programs governed by applicable law; further, the Plans are a benefit
offered by Symantec that is not a part of or a form of employment compensation (whether regular or
not) and is outside the scope of any employment contract and labor relationship that you may have
with your employer.

You should contact your personal tax advisor to determine the tax and social insurance
contribution consequences of your participation in the Plans and the conversion of the VERITAS
Options.

If you have any questions, please contact [stock administration contact(s)].

Sincerely,

Symantec Corporation

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