Document:

Ex-4.2 Schedule to the Jabil Circuit 2002 Employee

 

EXHIBIT 4.2

SCHEDULE TO THE JABIL CIRCUIT, INC.

2002 EMPLOYEE STOCK PURCHASE PLAN

Adopted by the Company by resolution of the Board on October 27, 2005

The Government of India has under Section 17(2)(iii) of the Income-tax Act, 1961 issued
Notification No.F.No.142/48/2001-TPL prescribing guidelines for Employee Stock Option Plan or
Scheme

	 	I.	 	Purpose:
	 
	 	 	 	Jabil Circuit, Inc, a company incorporated under United States laws and having its
registered office at Florida intends to adopt this Sub Plan as an addendum to the
overall Jabil Circuit, Inc. 2002 Employee Stock Purchase Plan. The Sub Plan
incorporates specific additional terms, conditions and restrictions applicable to stock
options granted to employees of Jabil Circuit India Private Limited, Jabil Circuit
Technology India Private Limited, and any other company of the Jabil group in India
which may be formed or acquired at a later date or time. These additional terms,
conditions and restrictions are intended to ensure compliance of the Jabil Circuit, Inc.
2002 Employee Stock Purchase Plan (‘the Plan’) to the ESOP Guidelines issued by the
Indian Government.
	 
	 	II.	 	The rules of this India Sub Plan take precedence over other provisions of the Plan but
unless otherwise specifically superseded by terms of the India Sub Plan, the provisions of
the Plan shall govern the operations of the India Sub Plan.
	 
	 	III.	 	The India Sub Plan shall be effective from 1 November 2005.
	 
	 	IV.	 	Shareholder Approval:
	 
	 	 	 	Shareholder approval for the Plan has been granted on 24 September 2002.
	 
	 	V.	 	An employee who is a promoter or belongs to the promoter group or is a director who
either by himself or through his relative/body corporate, directly or indirectly holds more
than 10% of the outstanding equity shares of the company, shall not be eligible to
participate under the Sub Plan.

	 	1.1	 	For purposes of the above, “Promoter” means:

	 	a)	 	the person/s who are in over-all control of the company; or
	 
	 	b)	 	the person/s who are instrumental in the formation of the company; or
the programme pursuant to which shares were offered to the public; or
	 
	 	c)	 	the person/s named in the offer document as promoter(s).

A director or officer of the company will not be deemed to be a promoter if he is acting
as such only in his professional capacity.

(Explanation: Where a promoter of a company is a body corporate, the promoter of that
body corporate shall also be deemed to be a promoter of the company.)

	 	1.2	 	“Promoter group” means:

 

 

	 	a)	 	an immediate relative of the promoter (i.e. spouse of that person, or
any parent, brother, sister or child of the person or of the spouse) ; or
	 
	 	b)	 	persons whose shareholding is aggregated for the purpose of disclosing
“shareholding of the promoter group” in the offer document.

	 	VI.	 	The India Sub Plan as applicable to India shall not be subject to changes as required
by the ESOP Guidelines unless prior approvals from the relevant Indian regulatory
authorities, if required, have been obtained in this behalf.
	 
	 	VII.	 	Plan Terms and Conditions Binding:
	 
	 	 	 	Shares granted under this Sub-Plan shall be subject to all other terms and conditions of
the Plan.
	 
	 	VIII.	 	Amendment:
	 
	 	 	 	The Sub Plan may be suspended or discontinued at any time.

For Jabil Circuit, Inc.

Authorized Signatories:

	 	 	 
	 
	 	 
	 

By:

	 	 
	 
	 	 
	 
	 	 
	 
	 	 
	 

By:Ex-4.1 Jabil Circuit, Inc. 2002 Stock Incentive Pl

 

EXHIBIT 4.1

JABIL CIRCUIT, INC.

2002 STOCK INCENTIVE PLAN

     1. Purposes of the Plan. The purposes of this Stock Incentive Plan are to attract and
retain the best available personnel for positions of substantial responsibility, to provide
additional incentive to Employees and Consultants, and to promote the success of the Company’s
business. Awards granted under the Plan may be Incentive Stock Options, Nonstatutory Stock
Options, Stock Awards, Performance Units, Performance Shares or Stock Appreciation Rights.

     2. Definitions. As used herein, the following definitions shall apply:

          (a) “Administrator” means the Board or any Committee or person as shall be
administering the Plan, in accordance with Section 4 of the Plan.

          (b) “Applicable Law” means the legal requirements relating to the administration of
the Plan under applicable federal, state, local and foreign corporate, tax and securities laws, and
the rules and requirements of any stock exchange or quotation system on which the Common Stock is
listed or quoted.

          (c) “Award” means an Option, Stock Appreciation Right, Stock Award, Performance Unit
or Performance Share granted under the Plan.

          (d) “Award Agreement” means the agreement, notice and/or terms or conditions by which
an Award is evidenced, documented in such form (including by electronic communication) as may be
approved by the Administrator.

          (e) “Board” means the Board of Directors of the Company.

          (f) “Change in Control” means the happening of any of the following:

               (i) When any “person,” as such term is used in Sections 13(d) and 14(d) of the Exchange Act
(other than the Company, a Subsidiary or a Company employee benefit plan, including any trustee of
such plan acting as trustee) is or becomes the “beneficial owner” (as defined in Rule 13d-3 under
the Exchange Act), directly or indirectly, of securities of the Company representing fifty percent
(50%) or more of the combined voting power of the Company’s then outstanding securities; or

               (ii) The occurrence of a transaction requiring stockholder approval, and involving the sale of
all or substantially all of the assets of the Company or the merger of the Company with or into
another corporation.

          (g) “Change in Control Price” means, as determined by the Board,

               (i) the highest Fair Market Value of a Share within the 60 day period immediately preceding
the date of determination of the Change in Control Price by the Board (the “60-Day Period”), or

               (ii) the highest price paid or offered per Share, as determined by the Board, in any bona fide
transaction or bona fide offer related to the Change in Control of the Company, at any time within
the 60-Day Period, or

               (iii) some lower price as the Board, in its discretion, determines to be a reasonable estimate
of the fair market value of a Share.

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

          (i) “Committee” means a Committee appointed by the Board in accordance with Section 4
of

 

 

the Plan.

          (j) “Common Stock” means the Common Stock, $.001 par value, of the Company.

          (k) “Company” means Jabil Circuit, Inc., a Delaware corporation.

          (l) “Consultant” means any person, including an advisor, engaged by the Company or a
Parent or Subsidiary to render services and who is compensated for such services, including without
limitation non-Employee Directors who are paid only a director’s fee by the Company or who are
compensated by the Company for their services as non-Employee Directors. In addition, as used
herein, “consulting relationship” shall be deemed to include service by a non-Employee Director as
such.

          (m) “Continuous Status as an Employee or Consultant” means that the employment or
consulting relationship is not interrupted or terminated by the Company, any Parent or Subsidiary.
Continuous Status as an Employee or Consultant shall not be considered interrupted in the case of
(i) any leave of absence approved in writing by the Board, an Officer, or a person designated in
writing by the Board or an Officer as authorized to approve a leave of absence, including sick
leave, military leave, or any other personal leave; provided, however, that for purposes of
Incentive Stock Options, any such leave may not exceed 90 days, unless reemployment upon the
expiration of such leave is guaranteed by contract (including certain Company policies) or statute,
or (ii) transfers between locations of the Company or between the Company, a Parent, a Subsidiary
or successor of the Company; or (iii) a change in the status of the Grantee from Employee to
Consultant or from Consultant to Employee.

          (n) “Covered Stock” means the Common Stock subject to an Award.

          (o) “Date of Grant” means the date on which the Administrator makes the determination
granting the Award, or such other later date as is determined by the Administrator. Notice of the
determination shall be provided to each Grantee within a reasonable time after the Date of Grant.

          (p) “Date of Termination” means the date on which a Grantee’s Continuous Status as an
Employee or Consultant terminates.

          (q) “Director” means a member of the Board.

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

          (s) “Employee” means any person, including Officers and Directors, employed by the
Company or any Parent or Subsidiary of the Company. Neither service as a Director nor payment of a
director’s fee by the Company shall be sufficient to constitute “employment” by the Company.

          (t) “Exchange Act” means the Securities Exchange Act of 1934, as amended.

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

               (i) If the Common Stock is listed on any established stock exchange or a national market
system, including without limitation the National Market System of the National Association of
Securities Dealers, Inc. Automated Quotation (“NASDAQ”) System, the Fair Market Value of a Share of
Common Stock shall be the closing sales price for such stock (or the closing bid, if no sales were
reported) as quoted on such system or exchange (or the exchange with the greatest volume of trading
in Common Stock) on the last market trading day prior to the day of determination, as reported in
The Wall Street Journal or such other source as the Administrator deems reliable;

               (ii) If the Common Stock is quoted on the NASDAQ System (but not on the National Market System
thereof) or is regularly quoted by a recognized securities dealer but selling prices are not
reported, the Fair Market Value of a Share of Common Stock shall be the mean between the high bid
and low asked prices for the

 

 

Common Stock on the last market trading day prior to the day of determination, as reported in The
Wall Street Journal or such other source as the Administrator deems reliable;

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

          (v) “Grantee” means an individual who has been granted an Award.

          (w) “Incentive Stock Option” means an Option intended to qualify as an incentive stock
option within the meaning of Section 422 of the Code and the regulations promulgated thereunder.

          (x) “Mature Shares” means Shares for which the holder thereof has good title, free and
clear of all liens and encumbrances, and that such holder either (i) has held for at least six
months or (ii) has purchased on the open market.

          (y) “Nonstatutory Stock Option” means an Option not intended to qualify as an
Incentive Stock Option.

          (z) “Officer” means a person who is an officer of the Company within the meaning of
Section 16 of the Exchange Act and the rules and regulations promulgated thereunder.

          (aa) “Option” means a stock option granted under the Plan.

          (bb) “Parent” means a corporation, whether now or hereafter existing, in an unbroken
chain of corporations ending with the Company if each of the corporations other than the Company
holds at least 50 percent of the voting shares of one of the other corporations in such chain.

          (cc) “Performance Period” means the time period during which the performance goals
established by the Administrator with respect to a Performance Unit or Performance Share, pursuant
to Section 9 of the Plan, must be met.

          (dd) “Performance Share” has the meaning set forth in Section 9 of the Plan.

          (ee) “Performance Unit” has the meaning set forth in Section 9 of the Plan.

          (ff) “Plan” means this 2002 Stock Incentive Plan.

          (gg) “Rule 16b-3” means Rule 16b-3 promulgated under the Exchange Act or any successor
to Rule 16b-3, as in effect when discretion is being exercised with respect to the Plan.

          (hh) “Share” means a share of the Common Stock, as adjusted in accordance with Section
11 of the Plan.

          (ii) “Stock Appreciation Right” or “SAR” has the meaning set forth in Section
7 of the Plan.

          (jj) “Stock Grant” means Shares that are awarded to a Grantee pursuant to Section 8 of
the Plan.

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

     3. Stock Subject to the Plan. Subject to the provisions of Section 11 of the Plan and
except as otherwise provided in this Section 3, the maximum aggregate number of Shares that may be
subject to Awards under the Plan since the Plan became effective is 26,608,726, which includes
Shares that were available on November 28, 2005 to be subject to future Awards, plus Shares that
were subject to Awards on November 28, 2005, and all Shares

 

 

issued prior to November 28, 2005. The Shares may be authorized, but unissued, or reacquired
Common Stock. The Shares may be authorized, but unissued, or reacquired Common Stock.

          If an Award expires or becomes unexercisable without having been exercised in full the
remaining Shares that were subject to the Award shall become available for future Awards under the
Plan (unless the Plan has terminated). With respect to Stock Appreciation Rights, if the payment
upon exercise of a SAR is in the form of Shares, the Shares subject to the SAR shall be counted
against the available Shares as one Share for every Share subject to the SAR, regardless of the
number of Shares used to settle the SAR upon exercise.

     4. Administration of the Plan.

          (a) Procedure.

               (i) Multiple Administrative Bodies. The Plan may be administered by different bodies
with respect to different groups of Employees and Consultants. Except as provided below, the Plan
shall be administered by (A) the Board or (B) a committee designated by the Board and constituted
to satisfy Applicable Law.

               (ii) Rule 16b-3. To the extent the Board or the Committee considers it desirable for
transactions relating to Awards to be eligible to qualify for an exemption under Rule 16b-3, the
transactions contemplated under the Plan shall be structured to satisfy the requirements for
exemption under Rule 16b-3.

               (iii) Section 162(m) of the Code. To the extent the Board or the Committee considers
it desirable for compensation delivered pursuant to Awards to be eligible to qualify for an
exemption from the limit on tax deductibility of compensation under Section 162(m) of the Code, the
transactions contemplated under the Plan shall be structured to satisfy the requirements for
exemption under Section 162(m) of the Code.

               (iv) Authorization of Officers to Grant Options. In accordance with Applicable Law,
the Board may, by a resolution adopted by the Board, authorize one or more Officers to designate
Officers and Employees (excluding the Officer so authorized) to be Grantees of Options and
determine the number of Options to be granted to such Officers and Employees; provided, however,
that the resolution adopted by the Board so authorizing such Officer or Officers shall specify the
total number and the terms (including the exercise price, which may include a formula by which such
price may be determined) of Options such Officer or Officers may so grant.

          (b) Powers of the Administrator. Subject to the provisions of the Plan, and in the
case of a Committee or an Officer, subject to the specific duties delegated by the Board to such
Committee or Committee, the Administrator shall have the authority, in its sole and absolute
discretion:

               (i) to determine the Fair Market Value of the Common Stock, in accordance with Section 2(u) of
the Plan;

               (ii) to select the Consultants and Employees to whom Awards will be granted under the Plan;

               (iii) to determine whether, when, to what extent and in what types and amounts Awards are
granted under the Plan;

               (iv) to determine the number of shares of Common Stock to be covered by each Award granted
under the Plan;

               (v) to determine the forms of Award Agreements, which need not be the same for each grant or
for each Grantee, and which may be delivered electronically, for use under the Plan;

               (vi) to determine the terms and conditions, not inconsistent with the terms of the Plan, of
any Award granted under the Plan. Such terms and conditions, which need not be the same for each
grant or for each Grantee, include, but are not limited to, the exercise price, the time or times
when Options and SARs may be exercised (which may be based on performance criteria), the extent to
which vesting is suspended during a leave of

 

 

absence, any vesting acceleration or waiver of forfeiture restrictions, and any restriction or
limitation regarding any Award or the shares of Common Stock relating thereto, based in each case
on such factors as the Administrator shall determine;

               (vii) to construe and interpret the terms of the Plan and Awards;

               (viii) to prescribe, amend and rescind rules and regulations relating to the Plan, including,
without limiting the generality of the foregoing, rules and regulations relating to the operation
and administration of the Plan to accommodate the specific requirements of local and foreign laws
and procedures;

               (ix) to modify or amend each Award (subject to Section 13 of the Plan). However, the
Administrator may not modify or amend any outstanding Option so as to specify a lower exercise
price or accept the surrender of an outstanding Option and authorize the granting of a new Option
with a lower exercise price in substitution for such surrendered Option;

               (x) to authorize any person to execute on behalf of the Company any instrument required to
effect the grant of an Award previously granted by the Administrator;

               (xi) to determine the terms and restrictions applicable to Awards;

               (xii)
to make such adjustments or modifications to Awards granted to Grantees who are Employees
of foreign Subsidiaries as are advisable to fulfill the purposes of the Plan or to comply with
Applicable Law;

               (xiii) to delegate its duties and responsibilities under the Plan with respect to sub-plans
applicable to foreign Subsidiaries, except its duties and responsibilities with respect to
Employees who are also Officers or Directors subject to Section 16(b) of the Exchange Act;

               (xiv) to provide any notice or other communication required or permitted by the Plan in either
written or electronic form; and

               (xv) to make all other determinations deemed necessary or advisable for administering the
Plan.

          (c) Effect of Administrator’s Decision. The Administrator’s decisions, determinations
and interpretations shall be final and binding on all Grantees and any other holders of Awards.

     5. Eligibility and General Conditions of Awards.

          (a) Eligibility. Awards other than Incentive Stock Options may be granted to
Employees and Consultants. Incentive Stock Options may be granted only to Employees. If otherwise
eligible, an Employee or Consultant who has been granted an Award may be granted additional Awards.

          (b) Maximum Term. Subject to the following provision, the term during which an Award
may be outstanding shall not extend more than ten years after the Date of Grant, and shall be
subject to earlier termination as specified elsewhere in the Plan or Award Agreement; provided,
however, that any deferral of a cash payment or of the delivery of Shares that is permitted or
required by the Administrator pursuant to Section 10 of the Plan may, if so permitted or required
by the Administrator, extend more than ten years after the Date of Grant of the Award to which the
deferral relates.

          (c) Award Agreement. To the extend not set forth in the Plan, the terms and
conditions of each Award, which need not be the same for each grant or for each Grantee, shall be
set forth in an Award Agreement. The Administrator, in its sole and absolute discretion, may
require as a condition to any Award Agreement’s effectiveness that the Award Agreement be executed
by the Grantee, including by electronic signature or other electronic indication of acceptance, and
that the Grantee agree to such further terms and conditions as specified in the Award Agreement.

 

 

          (d) Termination of Employment or Consulting Relationship. In the event that a
Grantee’s Continuous Status as an Employee or Consultant terminates (other than upon the Grantee’s
death or Disability), then, unless otherwise provided by the Award Agreement, and subject to
Section 11 of the Plan:

               (i) the Grantee may exercise his or her unexercised Option or SAR, but only within such period
of time as is determined by the Administrator, and only to the extent that the Grantee was entitled
to exercise it at the Date of Termination (but in no event later than the expiration of the term of
such Option or SAR as set forth in the Award Agreement). In the case of an Incentive Stock Option,
the Administrator shall determine such period of time (in no event to exceed three months from the
Date of Termination) when the Option is granted. If, at the Date of Termination, the Grantee is
not entitled to exercise his or her entire Option or SAR, the Shares covered by the unexercisable
portion of the Option or SAR shall revert to the Plan. If, after the Date of Termination, the
Grantee does not exercise his or her Option or SAR within the time specified by the Administrator,
the Option or SAR shall terminate, and the Shares covered by such Option or SAR shall revert to the
Plan. An Award Agreement may also provide that if the exercise of an Option following the Date of
Termination would be prohibited at any time because the issuance of Shares would violate Company
policy regarding compliance with Applicable Law, then the exercise period shall terminate on the
earlier of (A) the expiration of the term of the Option set forth in Section 6(b) of the Plan or
(B) the expiration of a period of 10 days after the Date of Termination during which the exercise
of the Option would not be in violation of such requirements;

               (ii) the Grantee’s Stock Awards, to the extent forfeitable immediately before the Date of
Termination, shall thereupon automatically be forfeited;

               (iii) the Grantee’s Stock Awards that were not forfeitable immediately before the Date of
Termination shall promptly be settled by delivery to the Grantee of a number of unrestricted Shares
equal to the aggregate number of the Grantee’s vested Stock Awards;

               (iv) any Performance Shares or Performance Units with respect to which the Performance Period
has not ended as of the Date of Termination shall terminate immediately upon the Date of
Termination.

          (e) Disability of Grantee. In the event that a Grantee’s Continuous Status as an
Employee or Consultant terminates as a result of the Grantee’s Disability, then, unless otherwise
provided by the Award Agreement:

               (i) the Grantee may exercise his or her unexercised Option or SAR at any time within 12 months
from the Date of Termination, but only to the extent that the Grantee was entitled to exercise the
Option or SAR at the Date of Termination (but in no event later than the expiration of the term of
the Option or SAR as set forth in the Award Agreement). If, at the Date of Termination, the
Grantee is not entitled to exercise his or her entire Option or SAR, the Shares covered by the
unexercisable portion of the Option or SAR shall revert to the Plan. If, after the Date of
Termination, the Grantee does not exercise his or her Option or SAR within the time specified
herein, the Option or SAR shall terminate, and the Shares covered by such Option or SAR shall
revert to the Plan.

               (ii) the Grantee’s Stock Awards, to the extent forfeitable immediately before the Date of
Termination, shall thereupon automatically be forfeited;

               (iii) the Grantee’s Stock Awards that were not forfeitable immediately before the Date of
Termination shall promptly be settled by delivery to the Grantee of a number of unrestricted Shares
equal to the aggregate number of the Grantee’s vested Stock Awards;

               (iv) any Performance Shares or Performance Units with respect to which the Performance Period
has not ended as of the Date of Termination shall terminate immediately upon the Date of
Termination.

          (f) Death of Grantee. In the event of the death of an Grantee, then, unless otherwise
provided by the Award Agreement,

               (i) the Grantee’s unexercised Option or SAR may be exercised at any time within 12

 

 

months following the date of death (but in no event later than the expiration of the term of such
Option or SAR as set forth in the Award Agreement), by the Grantee’s estate or by a person who
acquired the right to exercise the Option or SAR by bequest or inheritance, but only to the extent
that the Grantee was entitled to exercise the Option or SAR at the date of death. If, at the time
of death, the Grantee was not entitled to exercise his or her entire Option or SAR, the Shares
covered by the unexercisable portion of the Option or SAR shall immediately revert to the Plan.
If, after death, the Grantee’s estate or a person who acquired the right to exercise the Option or
SAR by bequest or inheritance does not exercise the Option or SAR within the time specified herein,
the Option or SAR shall terminate, and the Shares covered by such Option or SAR shall revert to the
Plan.

               (ii) the Grantee’s Stock Awards, to the extent forfeitable immediately before the date of
death, shall thereupon automatically be forfeited;

               (iii) the Grantee’s Stock Awards that were not forfeitable immediately before the date of
death shall promptly be settled by delivery to the Grantee’s estate or a person who acquired the
right to hold the Stock Grant by bequest or inheritance, of a number of unrestricted Shares equal
to the aggregate number of the Grantee’s vested Stock Awards;

               (iv) any Performance Shares or Performance Units with respect to which the Performance Period
has not ended as of the date of death shall terminate immediately upon the date of death.

          (g) Buyout Provisions. The Administrator may at any time offer to buy out, for a
payment in cash or Shares, an Award previously granted, based on such terms and conditions as the
Administrator shall establish and communicate to the Grantee at the time that such offer is made.
Any such cash offer made to an Officer or Director shall comply with the provisions of Rule 16b-3
relating to cash settlement of stock appreciation rights. This provision is intended only to
clarify the powers of the Administrator and shall not in any way be deemed to create any rights on
the part of Grantees to buyout offers or payments.

          (h) Nontransferability of Awards.

               (i) Except as provided in Section 5(h)(iii) below, each Award, and each right under any Award,
shall be exercisable only by the Grantee during the Grantee’s lifetime, or, if permissible under
Applicable Law, by the Grantee’s guardian or legal representative.

               (ii) Except as provided in Section 5(h)(iii) below, no Award (prior to the time, if
applicable, Shares are issued in respect of such Award), and no right under any Award, may be
assigned, alienated, pledged, attached, sold or otherwise transferred to encumbered by a Grantee
otherwise than by will or by the laws of descent and distribution (or in the case of Stock Awards,
to the Company) and any such purported assignment, alienation, pledge, attachment, sale, transfer
or encumbrance shall be void and unenforceable against the Company or any Subsidiary; provided,
that the designation of a beneficiary shall not constitute an assignment, alienation, pledge,
attachment, sale, transfer or encumbrance.

               (iii) To the extent and in the manner permitted by Applicable Law, and to the extent and
in the manner permitted by the Administrator, and subject to such terms and conditions as may be
prescribed by the Administrator, a Grantee may transfer an Award to:

                    (A) a child, stepchild, grandchild, parent, stepparent, grandparent, spouse, former spouse,
sibling, niece, nephew, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law,
or sister-in-law of the Grantee (including adoptive relationships);

                    (B) any person sharing the employee’s household (other than a tenant or employee);

                    (C) a trust in which persons described in (A) and (B) have more than 50

 

 

percent of the beneficial interest;

                    (D) a foundation in which persons described in (A) or (B) or the Grantee control the
management of assets; or

                    (E) any other entity in which the persons described in (A) or (B) or the Grantee own more than
50 percent of the voting interests;

provided such transfer is not for value. The following shall not be considered transfers for
value: a transfer under a domestic relations order in settlement of marital property rights, and a
transfer to an entity in which more than 50 percent of the voting interests are owned by persons
described in (A) above or the Grantee, in exchange for an interest in such entity.

     6. Stock Options.

          (a) Limitations.

               (i) Each Option shall be designated in the Award Agreement as either an Incentive Stock Option
or a Nonstatutory Stock Option. Any Option designated as an Incentive Stock Option:

                    (A) shall not have an aggregate Fair Market Value (determined for each Incentive Stock Option
at the Date of Grant) of Shares with respect to which Incentive Stock Options are exercisable for
the first time by the Grantee during any calendar year (under the Plan and any other employee stock
option plan of the Company or any Parent or Subsidiary (“Other Plans”)), determined in accordance
with the provisions of Section 422 of the Code, that exceeds $100,000 (the “$100,000 Limit”);

                    (B) shall, if the aggregate Fair Market Value of Shares (determined on the Date of Grant) with
respect to the portion of such grant that is exercisable for the first time during any calendar
year (“Current Grant”) and all Incentive Stock Options previously granted under the Plan and any
Other Plans that are exercisable for the first time during a calendar year (“Prior Grants”) would
exceed the $100,000 Limit, be exercisable as follows:

                         (1) The portion of the Current Grant that would, when added to any Prior Grants, be
exercisable with respect to Shares that would have an aggregate Fair Market Value (determined as of
the respective Date of Grant for such Options) in excess of the $100,000 Limit shall,
notwithstanding the terms of the Current Grant, be exercisable for the first time by the Grantee in
the first subsequent calendar year or years in which it could be exercisable for the first time by
the Grantee when added to all Prior Grants without exceeding the $100,000 Limit; and

                         (2) If, viewed as of the date of the Current Grant, any portion of a Current Grant could not
be exercised under the preceding provisions of this Section 6(a)(i)(B) during any calendar year
commencing with the calendar year in which it is first exercisable through and including the last
calendar year in which it may by its terms be exercised, such portion of the Current Grant shall
not be an Incentive Stock Option, but shall be exercisable as a separate Option at such date or
dates as are provided in the Current Grant.

               (ii) No Employee shall be granted, in any fiscal year of the Company, Options to purchase more
than 3,000,000 Shares. The limitation described in this Section 6(a)(ii) shall be adjusted
proportionately in connection with any change in the Company’s capitalization as described in
Section 11 of the Plan. If an Option is canceled in the same fiscal year of the Company in which
it was granted (other than in connection with a transaction described in Section 11 of the Plan),
the canceled Option will be counted against the limitation described in this Section 6(a)(ii).

          (b) Term of Option. The term of each Option shall be stated in the Award Agreement;
provided, however, that in the case of an Incentive Stock Option, the term shall be 10 years from
the date of grant or such shorter term as may be provided in the Award Agreement. Moreover, in the
case of an Incentive Stock Option granted to a Grantee who, at the time the Incentive Stock Option
is granted, owns stock representing more than 10

 

 

percent of the voting power of all classes of stock of the Company or any Parent or Subsidiary, the
term of the Incentive Stock Option shall be five years from the date of grant or such shorter term
as may be provided in the Award Agreement.

          (c) Option Exercise Price and Consideration.

               (i) Exercise Price. The per share exercise price for the Shares to be issued pursuant
to exercise of an Option shall be determined by the Administrator and, except as otherwise provided
in this Section 6(c)(i), shall be no less than 100 percent of the Fair Market Value per Share on
the Date of Grant.

                    (A) In the case of an Incentive Stock Option granted to an Employee who on the Date of Grant
owns stock representing more than 10 percent of the voting power of all classes of stock of the
Company or any Parent or Subsidiary, the per Share exercise price shall be no less than 110 percent
of the Fair Market Value per Share on the Date of Grant.

                    (B) Any Option that is (1) granted to a Grantee in connection with the acquisition
(“Acquisition”), however effected, by the Company of another corporation or entity (“Acquired
Entity”) or the assets thereof, (2) associated with an option to purchase shares of stock or other
equity interest of the Acquired Entity or an affiliate thereof (“Acquired Entity Option”) held by
such Grantee immediately prior to such Acquisition, and (3) intended to preserve for the Grantee
the economic value of all or a portion of such Acquired Entity Option, may be granted with such
exercise price as the Administrator determines to be necessary to achieve such preservation of
economic value.

                    (C) Any Option that is granted to a Grantee not previously employed by the Company, or a
Parent or Subsidiary, as a material inducement to the Grantee’s commencing employment with the
Company may be granted with such exercise price as the Administrator determines to be necessary to
provide such material inducement.

          (d) Waiting Period and Exercise Dates. At the time an Option is granted, the
Administrator shall fix the period within which the Option may be exercised and shall determine any
conditions that must be satisfied before the Option may be exercised. An Option shall be
exercisable only to the extent that it is vested according to the terms of the Award Agreement.

          (e) Form of Consideration. The Administrator shall determine the acceptable form of
consideration for exercising an Option, including the method of payment. In the case of an
Incentive Stock Option, the Administrator shall determine the acceptable form of consideration at
the time of grant. The acceptable form of consideration may consist of any combination of cash,
personal check, wire transfer or, subject to the approval of the Administrator:

               (i) pursuant to rules and procedures approved by the Administrator, promissory note;

               (ii) Mature Shares;

               (iii) pursuant to procedures approved by the Committee, (A) through the sale of the Shares
acquired on exercise of the Option through a broker-dealer to whom the Grantee has submitted an
irrevocable notice of exercise and irrevocable instructions to deliver promptly to the Company the
amount of sale or loan proceeds sufficient to pay the exercise price, together with, if requested
by the Company, the amount of federal, state, local or foreign withholding taxes payable by the
Grantee by reason of such exercise, or (B) through simultaneous sale through a broker of Shares
acquired upon exercise; or

               (iv) such other consideration and method of payment for the issuance of Shares to the extent
permitted by Applicable Law.

          (f) Exercise of Option.

 

 

               (i) Procedure for Exercise; Rights as a Stockholder.

                    (A) Any Option granted hereunder shall be exercisable according to the terms of the Plan and
at such times and under such conditions as determined by the Administrator and set forth in the
Award Agreement.

                    (B) An Option may not be exercised for a fraction of a Share.

                    (C) An Option shall be deemed exercised when the Company receives:

                         (1) written or electronic notice of exercise (in accordance with the Award Agreement and any
action taken by the Administrator pursuant to Section 4(b) of the Plan or otherwise) from the
person entitled to exercise the Option, and

                         (2) full payment for the Shares with respect to which the Option is exercised. Full payment
may consist of any consideration and method of payment authorized by the Administrator and
permitted by the Award Agreement and the Plan.

                         (3) Shares issued upon exercise of an Option shall be issued in the name of the Grantee or, if
requested by the Grantee, in the name of the Grantee and his or her spouse. Until the stock
certificate evidencing such Shares is issued (as evidenced by the appropriate entry on the books of
the Company or of a duly authorized transfer agent of the Company), no right to vote or receive
dividends or any other rights as a stockholder shall exist with respect to the Optioned Stock,
notwithstanding the exercise of the Option. The Company shall issue (or cause to be issued) such
stock certificate promptly after the Option is exercised. No adjustment will be made for a
dividend or other right for which the record date is prior to the date the stock certificate is
issued, except as provided in Section 11 of the Plan.

                         (4) Exercising an Option in any manner shall decrease the number of Shares thereafter
available, both for purposes of the Plan and for sale under the Option, by the number of Shares as
to which the Option is exercised.

     7. Stock Appreciation Rights.

          (a) Grant of SARs. Subject to the terms and conditions of the Plan, the Administrator
may grant SARs in tandem with an Option or alone and unrelated to an Option. Tandem SARs shall
expire no later than the expiration of the underlying Option.

          (b) Limitation. No Employee shall be granted, in any fiscal year of the Company, SARs
covering more than 3,000,000 Shares. The limitation described in this Section 7(b) shall be
adjusted proportionately in connection with any change in the Company’s capitalization as described
in Section 11 of the Plan. If a SAR is canceled in the same fiscal year of the Company in which it
was granted (other than in connection with a transaction described in Section 11 of the Plan), the
canceled SAR will be counted against the limitation described in this Section 7(b).

          (c) Exercise of SARs. SARs shall be exercised by the delivery of a written or
electronic notice of exercise to the Company (in accordance with the Award Agreement and any action
taken by the Administrator pursuant to Section 4(b) of the Plan or otherwise), setting forth the
number of Shares over which the SAR is to be exercised. Tandem SARs may be exercised:

               (i) with respect to all or part of the Shares subject to the related Option upon the surrender
of the right to exercise the equivalent portion of the related Option;

               (ii) only with respect to the Shares for which its related Option is then exercisable; and

               (iii) only when the Fair Market Value of the Shares subject to the Option exceeds the exercise
price of the Option.

 

 

The value of the payment with respect to the tandem SAR may be no more than 100 percent of the
difference between the exercise price of the underlying Option and the Fair Market Value of the
Shares subject to the underlying Option at the time the tandem SAR is exercised.

          (d) Payment of SAR Benefit. Upon exercise of a SAR, the Grantee shall be entitled to
receive payment from the Company in an amount determined by multiplying:

               (i) the excess of the Fair Market Value of a Share on the date of exercise over the SAR
exercise price; by

               (ii) the number of Shares with respect to which the SAR is exercised;

provided, that the Administrator may provide in the Award Agreement that the benefit payable on
exercise of an SAR shall not exceed such percentage of the Fair Market Value of a Share on the Date
of Grant as the Administrator shall specify. As determined by the Administrator, the payment upon
exercise of an SAR may be in cash, in Shares that have an aggregate Fair Market Value (as of the
date of exercise of the SAR) equal to the amount of the payment, or in some combination thereof, as
set forth in the Award Agreement.

     8. Stock Awards.

          (a) Authorization to Grant Stock Awards. Subject to the terms and conditions of the
Plan, the Administrator may grant Stock Awards to Employees or Consultants from time to time. Each
Stock Award shall be evidenced by an Award Agreement that shall set forth the conditions, if any,
which will need to be timely satisfied before the grant will be effective and the conditions, if
any, under which the Grantee’s interest in the related Stock will be forfeited. No more than
3,000,000 Shares may be granted pursuant to Stock Awards to an individual Grantee in any calendar
year.

          (b) Code Section 162(m) Provisions.

               (i) Notwithstanding any other provision of the Plan, if the Compensation Committee of the
Board (the “Compensation Committee”) determines at the time a Stock Award is granted to a Grantee
that such Grantee is, or may be as of the end of the tax year for which the Company would claim a
tax deduction in connection with such Stock Award, a “covered employee” within the meaning of
Section 162(m)(3) of the Code, and to the extent the Compensation Committee considers it desirable
for compensation delivered pursuant to such Stock Award to be eligible to qualify for an exemption
from the limit on tax deductibility of compensation under Section 162(m) of the Code, then the
Compensation Committee may provide that this Section 8(b) is applicable to such Stock Award under
such terms as the Compensation Committee shall determine.

               (ii) If a Stock Award is subject to this Section 8(b), then the lapsing of restrictions
thereon and the distribution of Shares pursuant thereto, as applicable, shall be subject to
satisfaction of one, or more than one, objective performance targets. The Compensation Committee
shall determine the performance targets that will be applied with respect to each Stock Award
subject to this Section 8(b) at the time of grant, but in no event later than 90 days after the
commencement of the period of service to which the performance target(s) relate. The performance
criteria applicable to Stock Awards subject to this Section 8(b) will be one or more of the
following criteria:

               (A) stock price;

 

 

               (B) market share;

               (C) sales;

               (D) earnings per share, core earnings per share or variations thereof;

               (E) return on equity;

               (E) costs;

               (F) revenue;

               (G) cash to cash cycle;

               (H) days payables outstanding;

               (I) days of supply;

               (J) days sales outstanding;

               (K) cash flow;

               (L) operating income;

               (M) profit after tax;

               (N) profit before tax;

               (O) return on assets;

               (P) return on sales;

               (Q) inventory turns;

               (R) invested capital;

               (S) net operating profit after tax;

               (T) return on invested capital;

               (U) total shareholder return;

               (V) earnings

               (W) return on equity or average shareowners’ equity;

               (X) total shareowner return;

               (Y) return on capital;

               (Z) return on investment;

               (AA) income or net income;

               (BB) operating income or net operating income;

               (CC) operating profit or net operating profit;

               (DD) operating margin;

               (EE) return on operating revenue;

               (FF) contract awards or backlog;

               (GG) overhead or other expense reduction;

 

 

               (HH) growth in shareowner value relative to the moving average of the S&P
500 Index or a peer group index;

               (II) credit rating;

               (JJ) strategic plan development and implementation;

               (KK) net cash provided by operating activities;

               (LL) gross margin;

               (MM) economic value added;

               (NN) customer satisfaction;

               (OO) financial return ratios;

               (PP) market performance.

               (iii) Notwithstanding any contrary provision of the Plan, the Compensation Committee may not
increase the number of shares granted pursuant to any Stock Award subject to this Section 8(b), nor
may it waive the achievement of any performance target established pursuant to this Section 8(b).

               (iv) Prior to the payment of any Stock Award subject to this Section 8(b), the Compensation
Committee shall certify in writing that the performance target(s) applicable to such Stock Award
was met.

                    (v) The Compensation Committee shall have the power to impose such other restrictions on
Stock Awards subject to this Section 8(b) as it may deem necessary or appropriate to ensure that
such Stock Awards satisfy all requirements for “performance-based compensation” within the meaning
of Code section 162(m)(4)(C) of the Code, the regulations promulgated thereunder, and any
successors thereto.

     9. Performance Units and Performance Shares.

          (a) Grant of Performance Units and Performance Shares. Subject to the terms of the
Plan, the Administrator may grant Performance Units or Performance Shares to any Employee or
Consultant in such amounts and upon such terms as the Administrator shall determine.

          (b) Value/Performance Goals. Each Performance Unit shall have an initial value that
is established by the Administrator on the Date of Grant. Each Performance Share shall have an
initial value equal to the Fair Market Value of a Share on the Date of Grant. The Administrator
shall set performance goals that, depending upon the extent to which they are met, will determine
the number or value of Performance Units or Performance Shares that will be paid to the Grantee.

          (c) Payment of Performance Units and Performance Shares.

               (i) Subject to the terms of the Plan, after the applicable Performance Period has ended, the
holder of Performance Units or Performance Shares shall be entitled to receive a payment based on
the number and value of Performance Units or Performance Shares earned by the Grantee over the
Performance Period, determined as a function of the extent to which the corresponding performance
goals have been achieved.

               (ii) If a Grantee is promoted, demoted or transferred to a different business unit of the
Company during a Performance Period, then, to the extent the Administrator determines appropriate,
the Administrator may adjust, change or eliminate the performance goals or the applicable
Performance Period as it deems appropriate in order to make them appropriate and comparable to the
initial performance goals or Performance Period.

 

 

          (d) Form and Timing of Payment of Performance Units and Performance Shares. Payment
of earned Performance Units or Performance Shares shall be made in a lump sum following the close
of the applicable Performance Period. The Administrator may pay earned Performance Units or
Performance Shares in cash or in Shares (or in a combination thereof) that have an aggregate Fair
Market Value equal to the value of the earned Performance Units or Performance Shares at the close
of the applicable Performance Period. Such Shares may be granted subject to any restrictions
deemed appropriate by the Administrator. The form of payout of such Awards shall be set forth in
the Award Agreement pertaining to the grant of the Award.

     10. Deferral of Receipt of Payment. The Administrator may permit or require a Grantee
to defer receipt of the payment of cash or the delivery of Shares that would otherwise be due by
virtue of the exercise of an Option or SAR, the grant of or the lapse or waiver of restrictions
with respect to Stock Awards or the satisfaction of any requirements or goals with respect to
Performance Units or Performance Shares. If any such deferral is required or permitted, the
Administrator shall establish such rules and procedures for such deferral.

     11. Adjustments Upon Changes in Capitalization or Change of Control.

          (a) Changes in Capitalization. Subject to any required action by the stockholders of
the Company, the number of Covered Shares, and the number of shares of Common Stock which have been
authorized for issuance under the Plan but as to which no Awards have yet been granted or which
have been returned to the Plan upon cancellation or expiration of an Award, as well as the price
per share of Covered Stock, shall be proportionately adjusted for any increase or decrease in the
number of issued shares of Common Stock resulting from a stock split, reverse stock split, stock
dividend, combination or reclassification of the Common Stock, or any other increase or decrease in
the number of issued shares of Common Stock effected without receipt of consideration by the
Company; provided, however, that conversion of any convertible securities of the Company shall not
be deemed to have been “effected without receipt of consideration.” Such adjustment shall be made
by the Board, whose determination in that respect shall be final, binding and conclusive. Except
as expressly provided herein, no issuance by the Company of shares of stock of any class, or
securities convertible into shares of stock of any class, shall affect, and no adjustment by reason
thereof shall be made with respect to, the number or price of shares of Covered Stock.

          (b) Change in Control. In the event of a Change in Control, then the following
provisions shall apply:

               (i) Vesting. Any Award outstanding on the date such Change in Control is determined to
have occurred that is not yet exercisable and vested on such date:

                    (A) shall become fully exercisable and vested on the first anniversary of the date of such
Change in Control (the “Change in Control Anniversary”) if the Grantee’s Continuous Status as an
Employee or Consultant does not terminate prior to the Change in Control Anniversary;

                    (B) shall become fully exercisable and vested on the Date of Termination if the Grantee’s
Continuous Status as an Employee or Consultant terminates prior to the Change in Control
Anniversary as a result of termination by the Company without Cause or resignation by the Grantee
for Good Reason; or

                    (C) shall not become full exercisable and vested if the Grantee’s Continuous Status as an
Employee or Consultant terminates prior to the Change in Control Anniversary as a result of
termination by the Company for Cause or resignation by the Grantee without Good Reason.

For purposes of this Section 11(b)(i), the following definitions shall apply:

                    (D) “Cause” means:

                         (1) A Grantee’s conviction of a crime involving fraud or dishonesty; or

 

 

                         (2) A Grantee’s continued willful or reckless material misconduct in the performance of the
Grantee’s duties after receipt of written notice from the Company concerning such misconduct;

provided, however, that for purposes of Section 11(b)(i)(D)(2), Cause shall not include any
one or more of the following: bad judgment, negligence or any act or omission believed by the
Grantee in good faith to have been in or not opposed to the interest of the Company (without intent
of the Grantee to gain, directly or indirectly, a profit to which the Grantee was not legally
entitled).

                    (E) “Good Reason” means:

                         (1) The assignment to the Grantee of any duties inconsistent in any respect with the
Grantee’s position (including status, titles and reporting requirement), authority, duties or
responsibilities, or any other action by the Company that results in a diminution in such position,
authority, duties or responsibilities, excluding for this purpose an isolated, insubstantial and
inadvertent action that is not taken in bad faith and that is remedied by the Company promptly
after receipt of written notice thereof given by the Grantee within 30 days following the
assignment or other action by the Company;

                         (2) Any reduction in compensation; or

                         (3) Change in location of office of more than 35 miles without prior consent of the
Grantee.

               (ii) Dissolution or Liquidation. In the event of the proposed dissolution or
liquidation of the Company, to the extent that an Award is outstanding, it will terminate
immediately prior to the consummation of such proposed action. The Board may, in the exercise of
its sole discretion in such instances, declare that any Option or SAR shall terminate as of a date
fixed by the Board and give each Grantee the right to exercise his or her Option or SAR as to all
or any part of the Covered Stock, including Shares as to which the Option or SAR would not
otherwise be exercisable.

               (iii) Merger or Asset Sale. Except as otherwise determined by the Board, in its
discretion, prior to the occurrence of a merger of the Company with or into another corporation, or
the sale of substantially all of the assets of the Company, in the event of such a merger or sale
each outstanding Option or SAR shall be assumed or an equivalent option or right shall be
substituted by the successor corporation or a Parent or Subsidiary of the successor corporation. In
the event that the successor corporation or a Parent or Subsidiary of the successor corporation
does not agree to assume the Option or SAR or to substitute an equivalent option or right, the
Administrator shall, in lieu of such assumption or substitution, provide for the Grantee to have
the right to exercise the Option or SAR as to all or a portion of the Covered Stock, including
Shares as to which it would not otherwise be exercisable. If the Administrator makes an Option or
SAR exercisable in lieu of assumption or substitution in the event of a merger or sale of assets,
the Administrator shall notify the Grantee that the Option or SAR shall be fully exercisable for a
period of 15 days from the date of such notice, and the Option or SAR will terminate upon the
expiration of such period. For the purposes of this paragraph, the Option or SAR shall be
considered assumed if, following the merger or sale of assets, the option or right confers the
right to purchase, for each Share of Covered Stock subject to the Option or SAR immediately prior
to the merger or sale of assets, the consideration (whether stock, cash, or other securities or
property) received in the merger or sale of assets by holders of Common Stock for each Share held
on the effective date of the transaction (and if holders were offered a choice of consideration,
the type of consideration chosen by the holders of a majority of the outstanding Shares); provided,
however, that if such consideration received in the merger or sale of assets was not solely common
stock of the successor corporation or its Parent, the Administrator may, with the consent of the
successor corporation and the participant, provide for the consideration to be received upon the
exercise of the Option or SAR, for each Share of Optioned Stock subject to the Option or SAR, to be
solely common stock of the successor corporation or its Parent equal in Fair Market Value to the
per Share consideration received by holders of Common Stock in the merger or sale of assets.

 

 

               (iv) Except as otherwise determined by the Board, in its discretion, prior to the occurrence
of a Change in Control other than the dissolution or liquidation of the Company, a merger of the
Company with or into another corporation, or the sale of substantially all of the assets of the
Company, in the event of such a Change in Control, all outstanding Options and SARs, to the extent
they are exercisable and vested (including Options and SARs that shall become exercisable and
vested pursuant to Section 11(b)(i) above), shall be terminated in exchange for a cash payment
equal to the Change in Control Price (reduced by the exercise price applicable to such Options or
SARs). These cash proceeds shall be paid to the Grantee or, in the event of death of an Grantee
prior to payment, to the estate of the Grantee or to a person who acquired the right to exercise
the Option or SAR by bequest or inheritance.

     12. Term of Plan. The Plan shall become effective upon its approval by the
stockholders of the Company within 12 months after the date the Plan is adopted by the Board. Such
stockholder approval shall be obtained in the manner and to the degree required under applicable
federal and state law. The Plan shall continue in effect until October 17, 2011, unless terminated
earlier under Section 13 of the Plan.

     13. Amendment and Termination of the Plan.

          (a) Amendment and Termination. The Board may at any time amend, alter, suspend or
terminate the Plan.

          (b) Stockholder Approval. The Company shall obtain stockholder approval of any Plan
amendment to the extent necessary and desirable to comply with Rule 16b-3 or with Section 422 of
the Code (or any successor rule or statute or other applicable law, rule or regulation, including
the requirements of any exchange or quotation system on which the Common Stock is listed or
quoted). Furthermore, the Company shall obtain stockholder approval of any modification or
amendment of the Plan to the extent that the Board, in its sole and absolute discretion, reasonably
determines, in accordance with the requirements of any exchange or quotation system on which the
Common Stock is listed or quoted, that such modification or amendment constitutes a material
revision or material amendment of the Plan. Such stockholder approval, if required, shall be
obtained in such a manner and to such a degree as is required by the applicable law, rule or
regulation.

          (c) Effect of Amendment or Termination. No amendment, alteration, suspension or
termination of the Plan shall impair the rights of any Grantee, unless mutually agreed otherwise
between the Grantee and the Administrator, which agreement must be in writing and signed by the
Grantee and the Company.

     14. Conditions Upon Issuance of Shares.

          (a) Legal Compliance. Shares shall not be issued pursuant to an Award unless the
exercise, if applicable, of such Award and the issuance and delivery of such Shares shall comply
with all relevant provisions of law, including, without limitation, the Securities Act of 1933, as
amended, the Exchange Act, the rules and regulations promulgated thereunder, Applicable Law, and
the requirements of any stock exchange or quotation system upon which the Shares may then be listed
or quoted, and shall be further subject to the approval of counsel for the Company with respect to
such compliance.

          (b) Investment Representations. As a condition to the exercise of an Award, the
Company may require the person exercising such Award to represent and warrant at the time of any
such exercise that the Shares are being purchased only for investment and without any present
intention to sell or distribute such Shares if, in the opinion of counsel for the Company, such a
representation is required.

     15. Liability of Company.

          (a) Inability to Obtain Authority. The inability of the Company to obtain authority
from any regulatory body having jurisdiction, which authority is deemed by the Company’s counsel to
be necessary to the lawful issuance and sale of any Shares hereunder, shall relieve the Company of
any liability in respect of the failure to issue or sell such Shares as to which such requisite
authority shall not have been obtained.

 

 

          (b) Grants Exceeding Allotted Shares. If the Covered Stock covered by an Award
exceeds, as of the date of grant, the number of Shares that may be issued under the Plan without
additional stockholder approval, such Award shall be void with respect to such excess Covered
Stock, unless stockholder approval of an amendment sufficiently increasing the number of Shares
subject to the Plan is timely obtained in accordance with Section 13 of the Plan.

     16. Reservation of Shares. The Company, during the term of this Plan, will at all
times reserve and keep available such number of Shares as shall be sufficient to satisfy the
requirements of the Plan.

     17. Rights of Employees and Consultants. Neither the Plan nor any Award shall confer
upon an Grantee any right with respect to continuing the Grantee’s employment or consulting
relationship with the Company, nor shall they interfere in any way with the Grantee’s right or the
Company’s right to terminate such employment or consulting relationship at any time, with or
without cause.

     18. Sub-plans for Foreign Subsidiaries. The Board may adopt sub-plans applicable to
particular foreign Subsidiaries. All Awards granted under such sub-plans shall be treated as
grants under the Plan. The rules of such sub-plans may take precedence over other provisions of
the Plan, with the exception of Section 3, but unless otherwise superseded by the terms of such
sub-plan, the provisions of the Plan shall govern the operation of such sub-plan.

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