Document:

Exhibit 10.3

 

SEAGATE TECHNOLOGY PUBLIC LIMITED COMPANY

2001 SHARE OPTION PLAN

NOTICE OF STOCK OPTION GRANT

(SUBJECT TO COMPENSATION RECOVERY POLICY)

 

Seagate Technology plc, a public limited company
incorporated under the laws of the Republic of Ireland with limited liability
(the “Company”), pursuant to its 2001 Share Option Plan (the “Plan”), hereby
grants to Participant an option to purchase the number of Shares set forth
below.  This option (the “Option”) is
subject to all of the terms and conditions as set forth herein and in the
Option Agreement and the Plan, all of which are provided with this Notice of
Stock Option Grant (the “Grant Notice”) and incorporated herein in their
entirety. Capitalized terms not otherwise defined in this Grant Notice or the
Option Agreement shall have the same meanings as in the Plan.

 

	
  Participant:

  	
   

  	
   

  
	
  Global
  ID Number:

  	
   

  	
   

  
	
  Date
  of Grant:

  	
   

  	
   

  
	
  Grant
  Number:

  	
   

  	
   

  
	
  Vesting
  Commencement Date:

  	
   

  	
   

  
	
  Exercise
  Price (Per Share):

  	
   

  	
  $

  	
   

  
	
  Number
  of Shares Subject to Option:

  	
   

  	
   

  
	
  Total
  Exercise Price:

  	
   

  	
  $

  	
   

  
	
  Expiration
  Date:

  	
   

  	
   

  

 

	
  Type of Grant:

  	
  Nonstatutory
  Stock Option

  
	
   

  	
   

  
	
  Payment:

  	
  By
  cash or check or other form of payment permitted under the Option Agreement
  (as described in greater detail in the Option Agreement).

  
	
   

  	
   

  
	
  Exercise Schedule:

  	
  Same
  as Vesting Schedule.

  
	
   

  	
   

  
	
  Vesting Schedule:

  	
  25%
  of the Shares vest on the first anniversary of the Vesting Commencement Date,
  and an additional 1/48th of the Shares vest at the end of each full month
  thereafter, until the fourth anniversary of the Vesting Commencement Date,
  subject to accelerated vesting under varying circumstances described in the
  Option Agreement (as described in greater detail in the Option Agreement).
  If, on any vesting date, this Vesting Schedule would result in the vesting of
  a fraction of a Share, such fraction shall be rounded to the nearest whole
  Share.

  

 

Additional Terms/Acknowledgements:  By returning my response to the Company as
indicated in the instructions hereto, I am acknowledging that I have
received, and understand and agree to the terms of, this Grant Notice, the
Option Agreement and the Plan (including any exhibits to each document).  I am further acknowledging that this Grant
Notice, the Option Agreement and the Plan (including any exhibits to each
document) set forth the entire understanding between myself and the Company
regarding the rights to acquire the Shares subject to this Option and supersede
all prior oral and written agreements with respect thereto, including, but not
limited to, any other agreement or understanding between myself and the Company
or an Affiliate relating to my Continuous Service and any termination thereof,
my compensation, or my rights, claims or interests in or to the Shares.  I further acknowledge that by returning my
response to the Company as indicated in the instructions hereto, I accept
the Option as set forth in this Grant Notice, the Option Agreement and the Plan
(including any exhibits to each document).

 

By
returning my response to the Company as indicated in the instructions hereto, I
am also acknowledging that, unless I specifically request (or have in the past
specifically requested) to receive communications regarding the Plan and this
Option in paper form, I agree to receive all communications regarding the
Plan and this Option (including but not limited to the Plan Prospectus) by
electronic delivery through an online or electronic system established and
maintained by the Company or a third party designated by the Company (currently
through the Morgan Stanley Smith Barney Corporate Benefits Website at
www.benefitaccess.com, , which I may easily access and understand how to
access, review and print the communications posted thereon).  Further, if requested, I agree to
participate in the Plan through such an online or electronic system.  In addition, by returning my response to the
Company as indicated in the instructions hereto, I agree it is my
responsibility to notify the Company of any changes to my mailing address so
that I may receive any shareholder information to be delivered by regular mail.

 

2001 Plan Option Notice (Recovery Policy – July 2010)

 

 

Seagate Technology Share Option Grant Notice

 

 

SEAGATE TECHNOLOGY PLC

 

 

	
  By:

  	
   

  	
   

  
	
  Title:

  	
  Chief
  Executive Officer

  	
   

  

 

 

SEAGATE TECHNOLOGY PUBLIC LIMITED COMPANY

2001 SHARE OPTION PLAN

 

OPTION AGREEMENT

(with acknowledgement of Compensation Recovery Policy)

 

THIS AGREEMENT (including
any exhibits hereto, the “Agreement”) is made effective as of the Date of Grant
(as set forth in the attached Notice of Share Option Grant (including any
exhibits thereto, the “Notice”), the terms of which Notice are hereby made a
part of this Agreement) between Seagate Technology plc, a public company
incorporated under the laws of the Republic of Ireland with limited liability
(the “Company”), and the Participant named in the Notice.

 

R E C I T A L S:

 

WHEREAS, the Company has
adopted the Seagate Technology Public Limited Company 2001 Share Option Plan
(including any exhibits thereto, the “Plan”), which Plan is incorporated herein
by reference and made a part of this Agreement. 
Capitalized terms not otherwise defined herein shall have the same
meanings as in the Plan; and

 

WHEREAS, the Committee has
determined that it would be in the best interests of the Company and its
shareholders to grant the Option provided for herein to the Participant
pursuant to the Plan and the terms set forth herein and in the Notice.

 

NOW THEREFORE, in
consideration of the mutual covenants hereinafter set forth, the parties agree
as follows:

 

1.     Grant of the Option.  The Company hereby grants to the Participant
the right and option (the “Option”) to purchase, on the terms and conditions
hereinafter set forth, all or any part of an aggregate of that number of Shares
set forth in the Notice, subject to adjustment from time to time pursuant to
the provisions of Section 12 of the Plan. 
The purchase price per Share of the Shares subject to the Option (the “Option
Price”) shall be the “Exercise Price (Per Share)” set forth in the Notice,
subject to adjustment from time to time pursuant to the provisions of Section 12
of the Plan.  The Option is intended to
be a non-qualified share option, and is not intended to be treated as an option
that complies with Section 422 of the U.S. Internal Revenue Code of 1986,
as amended.

 

If the Participant relocates
to another country, any special terms and conditions applicable to options
granted in such country will apply to the Participant, to the extent the
Company determines that the application of such terms and conditions is
necessary or advisable in order to comply with local law or facilitate the
administration of the Plan.

 

In addition, the Company
reserves the right to impose other requirements on the Option and any Shares
acquired under the Plan, to the extent the Company determines it is necessary
or advisable in order to comply with local law or facilitate the administration
of the Plan, and to require the Participant to sign any additional agreements
or undertakings that may be necessary to accomplish the foregoing.

 

2001
Plan Option Agmt (Recovery Policy – July 2010)

 

 

2.     Vesting.  At any time, the portion of the Option which
has become vested and exercisable as described in this Section 2 is
hereinafter referred to as the “Vested Portion.”

 

(a)         Vesting Schedule.

 

(i)            Subject to
Sections 2(a)(ii), 2(a)(iii), and 2(b) below, the Option shall vest and
become exercisable with respect to 25% of the Shares initially subject to the
Option on the first anniversary of the Vesting Commencement Date (as set forth
in the Notice) and shall vest and become exercisable with respect to an
additional 1/48th of the Shares initially subject to the Option at the end of
each full month thereafter (measured by using the same day of each subsequent month
as the Vesting Commencement Date (as set forth in the Notice), or if there is
no same day in a given subsequent month, the last day of such subsequent
month).

 

(ii)           Notwithstanding
the foregoing, in the event of a Corporate Transaction in which the Option is
not to be assumed or replaced with a substitute option which substantially
preserves both the intrinsic value (i.e., the excess of the Fair Market Value
of the Shares subject to the Option over the aggregate Option Price) and the
rights and benefits of the Option as in effect immediately prior to such
Corporate Transaction or is not otherwise to be continued in effect by the
Company or any successor entity in the Corporate Transaction, then the Option
shall, for at least 10 days prior to the consummation of the Corporate
Transaction, vest and become exercisable for all the Shares at the time subject
to the Option and the Option shall terminate upon the consummation of the
Corporate Transaction.

 

(iii)          In addition to
the foregoing, in the event of the Participant’s termination of Continuous
Service on account of the Participant’s death, the Participant shall be deemed
to have completed an additional year of service for purposes of determining the
portion of the Option which is the Vested Portion.

 

(b)         Termination of Continuous
Service

 

If the Participant’s
Continuous Service with the Company is terminated for any reason, the Option
shall, to the extent not then vested, be canceled by the Company without
consideration, as further described in Section 8(m) below.  The Vested Portion of the Option shall remain
exercisable for the period set forth in Section 3(a).

 

3.     Exercise of Option.

 

(a)         Period of Exercise

 

Subject to the provisions of the Plan and this Agreement, including the
provision set forth in Section 8(m) below, the Participant may
exercise all or any part of the Vested Portion of the Option at any time prior
to the earliest to occur of:

 

(i)            the “Expiration
Date” set forth in the Notice;

 

2

 

(ii)           one year
following the date of the Participant’s termination of Continuous Service as a
result of death or Disability (as defined below);

 

(iii)          three (3) months
following the date of the Participant’s termination of Continuous Service
without Cause (other than as a result of death or Disability) or by the
Participant for any reason; and

 

(iv)          the date of the
Participant’s termination of Continuous Service for Cause.

 

For purposes of this
Agreement:

 

“Cause” shall mean (i) the
Participant’s continued failure substantially to perform the material duties of
his office (other than as a result of total or partial incapacity due to
physical or mental illness), (ii) the embezzlement or theft by the
Participant of the Company’s property, (iii) the commission of any act or
acts on the Participant’s part resulting in the conviction of such Participant
of a felony under the laws of the United States or any state, (iv) the
Participant’s willful malfeasance or willful misconduct in connection with the
Participant’s duties to the Company (or any Affiliate) or any other act or
omission which is materially injurious to the financial condition or business
reputation of the Company or any of its Affiliates, or (v) a material
breach by the Participant of the material terms of his employment agreement or
any non-compete, non-solicitation or confidentiality provisions to which the
Participant is subject.  However, no
termination shall be deemed for Cause under clause (i), (iv) or (v) unless
the Participant is first given written notice by the Company or an Affiliate of
the specific acts or omissions which the Company deems constitute grounds for a
termination for Cause and is provided with at least 30 days after such notice
to cure the specified deficiency.

 

“Disability” shall mean the
inability of a Participant to perform in all material respects his duties and
responsibilities to the Company, or any Subsidiary of the Company, for a period
of six consecutive months or for an aggregate of nine months in any twenty-four
consecutive month period by reason of a physical or mental incapacity. 
Any question as to the existence of a Disability as to which Participant and
the Company cannot agree shall be determined in writing by a qualified
independent physician mutually acceptable to Participant and the Company. 
If Participant and the Company cannot agree as to a qualified independent
physician, each shall appoint such a physician and those two physicians shall
select a third who shall make such determination in writing.  The determination
of Disability made in writing to the Company and Participant shall be final and
conclusive for all purposes of this Agreement.

 

(b)         Method of Exercise.

 

(i)            Subject to Section 3(a),
the Vested Portion of the Option may be exercised by delivering to the Company
at its principal office or its designee written notice of intent to so
exercise; provided that, the Option may be exercised with
respect to whole Shares only.  Such
notice shall specify the number of Shares for which the Option is being
exercised and shall be accompanied by payment in full of the Option Price.  The Option Price for the Shares as to which 

 

3

 

the Option is exercised shall be paid to the Company, at the election
of the Participant, (i) in cash or
by check or (ii) if there should be
a public market for the Shares at such time, (A) in Shares having a Fair
Market Value equal to the aggregate Option Price for the Shares being purchased
and satisfying such other requirements as may be imposed by the Committee; provided,
that if such Shares were acquired, directly or indirectly, from the Company,
such Shares have been held by the Participant for no less than six months (or
such other period as established from time to time by the Committee or generally
accepted accounting principles in order to avoid variable grant date accounting
for financial accounting purposes), (B) partly in cash and partly in such
Shares or (C) subject to such rules as may be established by the
Committee, through the delivery of irrevocable instruments to a broker to sell
all or a portion of such Shares and deliver promptly to the Company an amount
equal to the aggregate Option Price for the Shares being purchased.  The Participant shall also be required to pay
all Tax-Related Items as described in Section 7 below.

 

(ii)           Notwithstanding
any other provision of the Plan or this Agreement to the contrary, unless there
is an available exemption from such registration, qualification or other legal
requirements, the Option may not be exercised prior to the completion of any
registration or qualification of the Option or the Shares that is required to
comply with applicable state and federal securities or any ruling or regulation
of any governmental body or national securities exchange or compliance with any
other applicable federal, state or foreign law that the Committee shall in its
sole discretion determine in good faith to be necessary or advisable.

 

(iii)          Upon the
Company’s determination that the Option has been validly exercised as to any of
the Shares, the Company shall issue certificates in the Participant’s name for
such Shares or a broker shall record the Shares acquired by the Participant in
an account in his or her name.  However,
the Company shall not be liable to the Participant for damages relating to any
delays in issuing the certificates to him, any loss of the certificates, or any
mistakes or errors in the issuance of the certificates or in the certificates
themselves.

 

(iv)          Should the
Participant die while holding the Option, the Vested Portion of the Option
shall remain exercisable by the Participant’s executor or administrator, or the
person or persons to whom the Participant’s rights under this Agreement shall
pass by will, by the laws of descent and distribution, or by beneficiary
designation, as the case may be, for the period set forth in Section 3(a).  Any heir or legatee of the Participant shall
take rights herein granted subject to the terms and conditions hereof.

 

4.     Seagate Technology Public
Limited Company Compensation Recovery for Fraud or Misconduct Policy.  The Participant hereby acknowledges and
agrees that the Participant and the award evidenced by this Agreement are
subject to the Seagate Technology Public Limited Company Compensation Recovery
for Fraud and Misconduct Policy as in effect from time to time, a current copy
of which is attached hereto as Exhibit A. 
To the extent the 

 

4

 

Participant
is subject to the policy, the terms and conditions of the policy are hereby
incorporated by reference into this Agreement.

 

5.     No Right to Continued
Employment.  Neither the
Plan nor this Agreement shall be construed as giving the Participant the right
to be retained in the employ of, or in any consulting relationship to, the
Company or any Affiliate.  Further, the
Company or an Affiliate may at any time dismiss the Participant or discontinue
any consulting relationship, free from any liability or any claim under the
Plan or this Agreement, except as otherwise expressly provided herein.

 

6.     Transferability.  The Option is exercisable only by the
Participant during the Participant’s lifetime and may not be assigned,
alienated, pledged, attached, sold or otherwise transferred or encumbered by
the Participant otherwise than by will or by the laws of descent and
distribution, and any such purported assignment, alienation, pledge,
attachment, sale, transfer or encumbrance shall be void and unenforceable
against the Company or any Affiliate; provided that the designation of a
beneficiary shall not constitute an assignment, alienation, pledge, attachment,
sale, transfer or encumbrance.

 

7.  Responsibility for Taxes.  Regardless of any action the Company or the
Participant’s employer (the “Employer”) take with respect to any or all income
tax, social insurance, payroll tax, payment on account or other tax-related
items related to the Participant’s participation in the Plan and legally
applicable to the Participant (“Tax-Related Items”), the Participant
acknowledges that the ultimate liability for all Tax-Related Items is and
remains the Participant’s responsibility and may exceed the amount actually
withheld by the Company or the Employer. 
The Participant further acknowledges that the Company and/or the
Employer (i) make no representations or undertakings regarding the
treatment of any Tax-Related Items in connection with any aspect of the Option,
including, but not limited to, the grant, vesting or exercise of the Option,
the subsequent sale of Shares acquired pursuant to such exercise and the
receipt of any dividends; and (ii) do not commit to and are under no
obligation to structure the terms of the grant or any aspect of the Option to
reduce or eliminate the Participant’s liability for Tax-Related Items or
achieve any particular tax result. 
Further, if the Participant has become subject to Tax-Related Items in
more than one jurisdiction between the Date of Grant and the date of any
relevant taxable or tax withholding event, as applicable, the Participant
acknowledges that the Company and/or the Employer (or former employer, as
applicable) may be required to withhold or account for Tax-Related Items in
more than one jurisdiction.

 

Prior to the relevant taxable or tax withholding
event, as applicable, the Participant will pay or make adequate arrangements
satisfactory to the Company and/or the Employer to satisfy any withholding
obligation with respect to the Tax-Related Items.  In this regard, the Participant authorizes
the Company and/or the Employer, or their respective agents, at their
discretion, to satisfy any withholding obligation with respect to the
Tax-Related Items by one or a combination of the following:
(i) withholding from the Participant’s wages or other cash compensation
paid to the Participant by the Company and/or the Employer; or
(ii) withholding from proceeds of the sale of Shares acquired upon
exercise of the Option either through a voluntary sale or through a mandatory
sale arranged by the Company (on the Participant’s behalf pursuant to this
authorization); or (iii) withholding in Shares to be issued upon exercise
of the Option.

 

5

 

To avoid any negative accounting treatment, the
Company may withhold or account for Tax-Related Items by considering applicable
minimum statutory withholding amounts or other applicable withholding
rates.  If the obligation for Tax-Related
Items is satisfied by withholding in Shares, for tax purposes, the Participant
will be deemed to have been issued the full number of Shares subject to the
exercised portion of the Option, notwithstanding that a number of the Shares
are held back solely for the purpose of paying the Tax-Related Items due as a
result of any aspect of the Participant’s participation in the Plan.

 

Finally,
the Participant shall pay to the Company or the Employer any amount of
Tax-Related Items that the Company or the Employer may be required to withhold
or account for as a result of the Participant’s participation in the Plan that
cannot be satisfied by the means previously described.  The Company shall not be obligated to comply
with its obligations under this Agreement unless and until the Participant has
paid to the Company (or the Company has otherwise recovered from the Participant)
an amount equal to the Tax-Related Items.

 

8.     Nature of Grant.  In accepting the Option, the Participant
acknowledges, understands and agrees that:

 

(a)   the Plan is established
voluntarily by the Company, it is discretionary in nature, and may be amended,
suspended or terminated by the Company at any time;

 

(b)   the grant of the Option is
voluntary and occasional and does not create any contractual or other right to
receive future grants of options, or benefits in lieu of options, even if
options have been granted repeatedly in the past;

 

(c)   all decisions with respect
to future option grants, if any, will be at the sole discretion of the Company;

 

(d)   the Participant is
voluntarily participating in the Plan;

 

(e)   the Option and any Shares
subject to the Option are an extraordinary item that does not constitute
compensation of any kind for services of any kind rendered to the Company or
the Employer, and which is outside the scope of the Participant’s employment or
service contract, if any;

 

(f)    the Option and any Shares
subject to the Option are not intended to replace any pension rights or
compensation;

 

(g)   the Option and any Shares
subject to the Option are not part of normal or expected compensation or salary
for any purposes, including, but not limited to, calculating any severance,
resignation, termination, redundancy, dismissal, end of service payments,
bonuses, long-service awards, pension or retirement or welfare benefits or
similar payments and in no event should be considered as compensation for, or
relating in any way to, past services for the Employer, the Company or any
Affiliate;

 

(h)   the Option and the
Participant’s participation in the Plan will not be interpreted to form an
employment or service contract or relationship with the Company or any
Affiliate;

 

6

 

(i)    the future value of the
Shares underlying the Option is unknown and cannot be predicted with certainty;

 

(j)    if the underlying Shares do
not increase in value, the Option will have no value;

 

(k)   if the Participant exercises
the Option and acquires Shares, the value of such Shares may increase or
decrease, even below the Option Price;

 

(l)    no claim or entitlement to
compensation or damages shall arise from forfeiture of the Option resulting
from termination of the Participant’s employment by the Company or the Employer
(for any reason whatsoever and whether or not in breach of local labor laws)
and in consideration of the grant of the Option to which the Participant is
otherwise not entitled, the Participant irrevocably agrees never to institute
any claim against the Company or the Employer, waives his or her ability, if
any, to bring any such claim, and releases the Company and the Employer from
any such claim; if, notwithstanding the foregoing, any such claim is allowed by
a court of competent jurisdiction, then, by participating in the Plan, the
Participant shall be deemed irrevocably to have agreed not to pursue such claim
and agrees to execute any and all documents necessary to request dismissal or
withdrawal of such claims;

 

(m)  in the event of termination
of the Participant’s employment (whether or not in breach of local labor laws),
the Participant’s right to vest in the Option under the Plan, if any, will
terminate effective as of the date that the Participant is no longer actively
employed and will not be extended by any notice period mandated under local law
(e.g., active employment would not
include a period of “garden leave” or similar period pursuant to local law);
furthermore, in the event of termination of the Participant’s employment
(whether or not in breach of local labor laws), the Participant’s right to
exercise the Option after termination of employment, if any, will be measured
by the date of termination of the Participant’s active employment and will not
be extended by any notice period mandated under local law; the Committee shall
have the exclusive discretion to determine when the Participant is no longer
actively employed for purposes of his or her Option grant; and

 

(n)   the Option and the benefits
under the Plan, if any, will not necessarily transfer to another company in the
case of a merger, take-over or transfer of liability.

 

9.     No Advice Regarding Grant.  The Company  is
not providing any tax, legal or financial advice, nor is the Company making any
recommendations regarding the Participant’s participation in the Plan, or the
Participant’s acquisition or sale of the underlying Shares.  The Participant is hereby advised to consult
with his or her own personal tax, legal and financial advisors regarding his or
her participation in the Plan before taking any action related to the Plan.

 

10.   Securities Laws.  Upon the acquisition of any Shares pursuant
to the exercise of the Option, the Participant will make or enter into such
written representations, warranties and agreements as the Committee may
reasonably request in order to comply with applicable securities laws or with
this Agreement.

 

11.   Data Privacy.  The Participant hereby explicitly and
unambiguously consents to the collection, use, processing and transfer, in
electronic or other form, of the 

 

7

 

Participant’s personal data as described in this Agreement and any
other Option grant materials by and among, as applicable, the Employer, the
Company and its Affiliates (whether inside or outside the European Economic
Area) for the exclusive purpose of implementing, administering and managing the
Participant’s participation in the Plan.

 

The Participant
understands that the Company and the Employer may hold certain personal
information about the Participant, including, but not limited to, the
Participant’s name, home address and telephone number, date of birth, social
insurance number or other identification number, salary, nationality, job
title, any shares or directorships held in the Company, details of all options
or any other entitlement to shares awarded, canceled, exercised, vested,
unvested or outstanding in the Participant’s favor, for the exclusive purpose
of implementing, administering and managing the Plan (“Data”).

 

The Participant understands that Data will be transferred to a
brokerage firm or share plan service provider designated by the Company which
is assisting the Company with the implementation, administration and management
of the Plan.  The Participant understands
that the recipients of Data may be located in the United States or elsewhere,
and that the recipients’ country (e.g., the United States) may have different
data privacy laws and protections than the Participant’s country.  The Participant understands that he or she
may request a list with the names and addresses of any potential recipients of
Data by contacting the Participant’s local human resources representative.  The Participant authorizes the Company, any
Company-designated brokerage firm or share plan service provider and any other
possible recipients which may assist the Company (presently or in the future)
with implementing, administering and managing the Plan to receive, possess,
use, retain, process and transfer Data, in electronic or other form, for the
purpose of implementing, administering and managing his or her participation in
the Plan.  The Participant understands
that Data will be held only as long as is necessary to implement, administer
and manage the Participant’s participation in the Plan.  The Participant understands that he or she
may, at any time, view Data, request additional information about the storage
and processing of Data, require any necessary amendments to Data or refuse or
withdraw the consents herein, in any case without cost, by contacting in
writing his or her local human resources representative.  The Participant understands, however, that
refusing or withdrawing his or her consent may affect the Participant’s ability
to participate in the Plan.  For more
information on the consequences of the Participant’s refusal to consent or
withdrawal of consent, the Participant understands that he or she may contact
his or her local human resources representative.

 

12.   Notices.   Any notices provided for in this Agreement
or the Plan shall be given in writing and shall be deemed effectively given
upon receipt or, in the case of notices delivered by the Company to the
Participant, five (5) days after deposit in the United States mail,
postage prepaid, addressed to the Participant at the last address he or she
provided to the Company.   Any such
notices from the Company to the Participant may also be delivered through the
Company’s electronic mail system (during the Participant’s Continuous Service)
or at the last email address the Participant provided to the Company (after
termination of the Participant’s Continuous Service).

 

13.   Choice of Law and Venue.  The interpretation, performance and
enforcement of this Agreement shall be governed by the laws of the State of
California, without regard to such 

 

8

 

state’s
conflict of laws rules, as provided in the Plan.  For purposes of litigating any dispute that
arises directly or indirectly from the relationship of the parties evidenced by
this grant or the Agreement, the parties hereby submit and consent to the
exclusive jurisdiction of the State of California and agree that such litigation shall be conducted only in the courts of
Santa Clara County, California, or the federal courts for the United States for
the Northern District of California, and no other courts, where this grant is
made and/or to be performed.

 

14.   Option Subject to Plan.  By entering into this Agreement the
Participant agrees and acknowledges that the Participant has received a copy of
the Plan.  The Option is subject to the
Plan.  The terms and provisions of the
Plan, as it may be amended from time to time in accordance with its respective
terms, are hereby incorporated herein by reference.  The Participant acknowledges that the Notice,
this Agreement and the Plan set forth the entire understanding between the
Participant and the Company regarding the Participant’s rights to acquire the
Shares subject to this Option and supersede all prior oral and written
agreements with respect thereto, including, but not limited to, any other
agreement or underwriting between the Participant and the Company or an
Affiliate relating to the Participant’s employment, consulting relationship, or
directorship, and any termination thereof, his compensation, or his rights,
claims or interests in or to the Shares. 
In the event of a conflict between any term or provision contained
herein and a term or provision of the Plan, the applicable terms and provisions
of the Plan will govern and prevail.

 

15.   Amendments.  The Committee at any time, and from time to
time, may amend the terms of the Option; provided, however, that the rights
under any Option shall not be materially impaired by any such amendment unless (i) the
Company requests the consent of the Participant and (ii) the Participant
consents in writing.

 

16.   Language.  If the Participant has received this or any
other document related to the Plan or this Option translated into a language
other than English and if the translated version is different than the English
version, the English version will control.

 

17.   Severability.  The provisions of this Agreement are
severable and if any one or more provisions are determined to be illegal or
otherwise unenforceable, in whole or in part, the remaining provisions shall
nevertheless be binding and enforceable.

 

9

 

EXHIBIT A

 

SEAGATE TECHNOLOGY PUBLIC LIMITED COMPANY COMPENSATION
RECOVERY FOR FRAUD OR MISCONDUCT POLICY

Effective January 29, 2009

 

The Seagate Technology
Public Limited Company Compensation Recovery for Fraud or Misconduct Policy is
intended to support accurate disclosure by recovering compensation paid to an
executive covered by this policy where such compensation was based on
incorrectly reported financial results due to the fraud or willful misconduct
of the executive who received such compensation.

 

Employees
Covered:

 

“Executive” is defined as
U.S. employees of Seagate Technology plc, a public company incorporated under the
laws of the Republic of Ireland with limited liability, or one of its
subsidiaries (the “Company”) at the Senior Vice President level or above and
any other officers subject to Section 16 of the Securities Exchange Act of
1934, as amended.

 

Compensation
Covered:

 

The repayment and other
obligations of an Executive described in this policy apply to any bonus paid,
share grant issued (whether or not vested) and/or vested during the covered
period, or share option exercised during the covered period, defined as the
period commencing with the later of the effective date of this policy or the
date that is four years prior to beginning of the fiscal year in which a
restatement is announced and ending on the date recovery is sought pursuant to
this policy; provided, however, that in no event shall this policy apply to any
share or option award granted before the effective date of this policy.

 

Fraud or
Misconduct:

 

For the purposes of this
policy, “Fraud” or “Misconduct” shall mean any of the following events that are
significant contributing factors to a restatement of the Company’s financial
results, as determined pursuant to “Determination of Fraud or Misconduct”,
below: (A) embezzlement or theft by the Executive, (B) the commission
of any act or acts on the Executive’s part resulting in the conviction (or plea
of guilty or nolo contendere) of such Executive of a felony under the laws of
the United States or any state (or equivalent law of any jurisdiction outside
of the United States), (C) Executive’s willful malfeasance or willful
misconduct in connection with Executive’s financial reporting obligations for
the Company, or (D) Executive’s other misrepresentation, act, or omission
which is materially injurious to the Company’s financial reporting obligations.

 

Recovery
Event:

 

A recovery event occurs
when:

 

·                  The Company issues a
restatement of financial results, and

 

·                  The independent members of
the Board of Directors determine in good faith that the Fraud or Misconduct of
an Executive covered by this policy was a significant contributing factor to
such restatement, and

 

 

·                  During the covered period, (i) some
or all of a bonus previously paid or performance-based share grant that vested
prior to such restatement, in either case, having a value of at least $100,000,
would not have been paid or become vested, as applicable, based upon the
restated financial results, (ii) the Executive exercised one or more share
options, sold the Company’s shares acquired upon such exercises and in the
aggregate realized proceeds of at least $100,000 or (iii) the Executive
sold the Company’s shares attributable to one or more non-performance-based
share grants and in the aggregate realized proceeds of at least $100,000.

 

Determination
of Fraud or Misconduct:

 

The determination of whether
an Executive’s Fraud or Misconduct was a significant contributing factor to the
Company’s restatement of financial results shall only be made by the
affirmative vote of a majority of all of the independent members of the Board
at an in-person meeting of the independent members of the Board called and held
for such purpose (after reasonable notice is provided to the Executive and the
Executive, with or without legal counsel, is given an opportunity to be heard
at such meeting).  Any determination by
the Board pursuant to this policy shall be subject to the Executive’s right to
review by an arbitrator pursuant to procedures set forth in the Seagate
Executive Severance and Change of Control Plan, a copy of which is attached
hereto.

 

Repayment
Obligation:

 

Upon receiving from the
Company the revised calculations and determination of the independent members
of the Board setting forth the amount of a previously paid bonus or bonuses
that would not have been paid and/or a performance-based share grant or grants
that would not have vested, in all cases based upon the restated financial
results, and/or the proceeds of sales of shares acquired upon the exercise of
share options or following the vesting of any non-performance-based share
grants, the affected Executive will be required to deliver, within 30 days of
such written notification of the amount due, to the Company an amount in equal
to: (i) the bonus payments that would not have been made during the
covered period had the restated financial results been used to determine such
bonus awards; (ii) with respect to a performance-based share grant that
was issued and/or vested during the covered period, an amount in cash or
equivalent value in the Company’s shares (or a combination of the two) equal to
the net proceeds realized by the Executive upon the issuance and, if applicable,
subsequent sale of any shares that would not have been issued or vested based
upon the restated financial results; (iii) with respect to any share
option that was exercised during the covered period, an amount in cash equal to
the net proceeds realized by the Executive upon the sale during the covered
period of some or all of the shares acquired upon the exercise of such share
option; and (iv) with respect to the sale of shares following the vesting
of any non-performance-based share grant, an amount in cash determined by the
independent members of the Board to be attributable to the Executive’s Fraud or
Misconduct.  The Executive shall also
immediately comply with any instructions delivered by the Company with respect
to any of the Company’s shares that have not yet been sold or otherwise
disposed of and would not have been issued or vested based upon the restated
financial results.  For this purpose, “net
proceeds” shall be net of any brokerage commissions and amounts paid to the
Company to satisfy the aggregate exercise price and/or tax withholding
obligations paid in respect of the award. 
With respect to amounts to be paid in cash, the form of payment may be a
certified cashier check, money transfer, or other method as approved by the
Board of Directors.

 

Other Terms:

 

The Company shall be able to
enforce the repayment obligation described in this policy by all legal means
available, including, without limitation, by withholding such amount from other
sums owed to the affected Executive.Exhibit 10.6

 

SEAGATE TECHNOLOGY PUBLIC LIMITED COMPANY

 

2004 SHARE COMPENSATION PLAN

 

Adopted
by Board on August 5, 2004

 

Approved
by Stockholders on October 28, 2004

 

Last
Amended and Restated on July 27, 2010

 

Termination
Date: October 28, 2014

 

I. PURPOSES.

 

1.1          Eligible Share Award
Recipients.  The persons
eligible to receive Share Awards are the Employees, Directors and Consultants
of the Company and its Affiliates.

 

1.2          Available Share Awards.  The purpose of the Plan is to provide a means
by which eligible recipients of Share Awards may be given an opportunity to
benefit from increases in value of the Ordinary Shares through the granting of
Share Awards including, but not limited to: (i) Incentive Stock Options, (ii)
Nonstatutory Share Options, (iii) Restricted Share Bonuses, (iv) Restricted
Share Purchase Rights, (v) Share Appreciation Rights, (vi) Phantom Share Units,
(vii) Restricted Share Units, (viii) Performance Share Bonuses, and (ix)
Performance Share Units.

 

1.3          General Purpose.  The Company, by means of this new Plan, which
is intended to replace the Company’s 2001 Share Option Plan (“Predecessor Plan”),
seeks to provide incentives for the group of persons eligible to receive Share
Awards to align their long-term interests with those of the Company’s
shareholders and to perform in a manner individually and collectively that
enhances the success of the Company and its Affiliates.  Share Awards granted under the Predecessor
Plan shall continue to be governed by the terms of the Predecessor Plan in
effect on the date of grant of such award.

 

II. DEFINITIONS.

 

2.1          “Affiliate” means generally
with respect to the Company, any entity directly, or indirectly through one or
more intermediaries, controlling or controlled by (but not under common control
with) the Company.  Solely with respect
to the granting of any Incentive Stock Options, Affiliate means any parent
corporation or subsidiary corporation of the Company, whether now or hereafter
existing, as those terms are defined in Sections 424(e) and (f), respectively,
of the Code.

 

2.2          “Beneficial Owner” means the
definition given in Rule 13d-3 promulgated under the Exchange Act.

 

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

 

2.4          “Change of Control” means
the occurrence of any of the following events:

 

 

(i)            The sale, exchange, lease or
other disposition of all or substantially all of the assets of the Company to a
person or group of related persons, as such terms are defined or described in
Sections 3(a)(9) and 13(d)(3) of the Exchange Act (other than to Silver Lake
Partners and its affiliates, Texas Pacific Group and its affiliates, or any
group controlled by one or more of the foregoing), that will continue the
business of the Company in the future;

 

(ii)           A merger or consolidation
involving the Company in which the voting securities of the Company owned by
the shareholders of the Company immediately prior to such merger or
consolidation do not represent, after conversion if applicable, more than fifty
percent (50%) of the total voting power of the surviving controlling entity
outstanding, immediately after such merger or consolidation; provided that any
person who (1) was a beneficial owner (within the meaning of Rules 13d-3 and
13d-5 promulgated under the Exchange Act) of the voting securities of the
Company immediately prior to such merger or consolidation, and (2) is a
beneficial owner of more than 20% of the securities of the Company immediately
after such merger or consolidation, shall be excluded from the list of “shareholders
of the Company immediately prior to such merger or consolidation” for purposes
of the preceding calculation;

 

(iii)          Any person or group of
related persons, as such terms are defined or described in Sections 3(a)(9) and
13(d)(3) of the Exchange Act, is or becomes the Beneficial Owner, directly or
indirectly, of more than 50% of the total voting power of the voting securities
of the Company (including by way of merger, consolidation or otherwise);

 

(iv)          During any period of two (2)
consecutive years, individuals who at the beginning of such period constituted
the Board (together with any new Directors whose election by such Board or
whose nomination for election by the shareholders of the Company was approved
by a vote of a majority of the Directors of the Company then still in office,
who were either Directors at the beginning of such period or whose election or
nomination for election was previously so approved) cease for any reason to
constitute a majority of the Board then in office; or

 

(v)           A dissolution or liquidation
of the Company.

 

Notwithstanding the
foregoing, a restructuring of the Company for the purpose of changing the
domicile of the Company (including, but not limited to, any change in the
structure of the Company resulting from the process of moving its domicile from
the Cayman Islands to Ireland or from and to other jurisdictions),
reincorporation of the Company or other similar transaction involving the
Company (a “Restructuring Transaction”) will not constitute a Change in Control
if, immediately after the Restructuring Transaction, the shareholders of the
Company immediately prior to such Restructuring Transaction represent, directly
or indirectly, more than fifty percent (50%) of the total voting power of the
surviving publicly-traded entity.

 

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

 

2.6          “Committee” means a
committee of one or more members of the Board (or other individuals who are not
members of the Board to the extent allowed by law) appointed by the Board in
accordance with Section 3.3 of the Plan.

 

 

2.7          “Company” means Seagate
Technology plc, a public company incorporated under the laws of the Republic of
Ireland with limited liability under registered number 480010, or any successor
thereto.

 

2.8          “Consultant” means any
person, including an advisor, (i) engaged by the Company or an Affiliate to
render consulting or advisory services and who is compensated for such services
or (ii) who is a member of the board of directors of an Affiliate.  However, the term “Consultant” shall not
include either Directors who are not compensated by the Company for their
services as a Director or Directors who are compensated by the Company solely
for their services as a Director.

 

2.9          “Continuous Service” means
that the Participant’s service with the Company or an Affiliate, whether as an
Employee, Director or Consultant, is not interrupted or terminated.  The Participant’s Continuous Service shall
not be deemed to have terminated merely because of a change in the capacity in
which the Participant renders service to the Company or an Affiliate as an
Employee, Consultant or Director or a change in the entity for which the
Participant renders such service, provided that there is no interruption or
termination of the Participant’s Continuous Service.  For example, a change in status from an
Employee of the Company to a Consultant of an Affiliate or a Director will not
constitute an interruption of Continuous Service.  The Board or the chief executive officer of
the Company, in that party’s sole discretion, may determine whether Continuous
Service shall be considered interrupted in the case of any leave of absence
approved by the Company or an Affiliate, including sick leave, military leave
or any other personal leave.

 

2.10        “Covered Employee” means the
chief executive officer and the four (4) other highest compensated officers of
the Company for whom total compensation is required to be reported to
shareholders under the Exchange Act, as determined for purposes of Section
162(m) of the Code.

 

2.11        “Director” means a member of
the Board of Directors of the Company.

 

2.12        “Disability” means the
permanent and total disability of a person within the meaning of Section
22(e)(3) of the Code for all Incentive Stock Options.  For all other Share Awards, “Disability”
means physical or mental incapacitation such that for a period of six (6)
consecutive months or for an aggregate of nine (9) months in any twenty-four
(24) consecutive month period, a person is unable to substantially perform his
or her duties.  Any question as to the
existence of that person’s physical or mental incapacitation as to which the
person or person’s representative and the Company cannot agree shall be
determined in writing by a qualified independent physician mutually acceptable
to the person and the Company.  If the
person and the Company or an Affiliate cannot agree as to a qualified
independent physician, each shall appoint such a physician and those two (2)
physicians shall select a third (3rd)who shall make such determination in writing.  The determination of Disability made in
writing to the Company or an Affiliate and the person shall be final and
conclusive for all purposes of the Share Awards.

 

2.13        “Eligible Director” means
any Director who: (i) is not employed by the Company and (ii) does not receive
a financial management fee from the Company and is not employed by any entity
that receives such a fee.

 

 

2.14        “Employee” means any person
employed by the Company or an Affiliate. 
Service as a Director or compensation by the Company or an Affiliate
solely for services as a Director shall not be sufficient to constitute “employment”
by the Company or an Affiliate.

 

2.15        “Exchange Act” means the
U.S. Securities Exchange Act of 1934, as amended.

 

2.16        “Fair Market Value” means, as
of any date, the value of the Ordinary Shares determined as follows:

 

(i)            If the Ordinary Shares are
listed on any established stock exchange (including the New York Stock
Exchange) or traded on the Nasdaq Global Select Market or the Nasdaq Capital
Market, the Fair Market Value of a Share shall be the arithmetic mean of the
high and low selling prices of such Shares as reported on such date on the
Composite Tape of the principal national securities exchange on which such
Shares are listed or admitted to trading, or if no Composite Tape exists for
such national securities exchange on such date, then on the principal national
securities exchange on which such Shares are listed or admitted to trading, or
if the Shares are not listed or admitted to trading on a national securities
exchange, the arithmetic mean of the per Share closing bid price and per Share
closing asked price on such date as quoted on the National Association of
Securities Dealers Automated Quotation System (or such market in which such prices
are regularly quoted), or if no sale of Shares shall have been reported on such
Composite Tape or such national securities exchange on such date or quoted on
the National Association of Securities Dealers Automated Quotation System on
such date, then the immediately preceding date on which sales of the Shares
have been so reported or quoted shall be used.

 

(ii)           In the absence of such
markets for the Ordinary Shares, the Fair Market Value shall be determined in
good faith by the Board.

 

(iii)          For any reference to Fair
Market Value in the Plan used to establish the price at which the Company shall
sell Ordinary Shares to a Participant under the terms and conditions of a Share
Award (such as a Share Award of Options, Restricted Share Purchase Rights or
Share Appreciation Rights), the date as of which this definition shall be
applied shall be the grant date of such Share Award.

 

2.17        “Full-Value Share Award”
shall mean any of a Restricted Share Bonus, Restricted Share Units, Phantom
Share Units, Performance Share Bonus, or Performance Share Units.

 

2.18        “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.

 

2.19        “Nominal Value” means US$0.00001
per Share.

 

2.20        “Non-Employee Director”
means a Director who either (i) is not a current Employee or Officer of the
Company or its parent or a subsidiary, does not receive compensation (directly
or indirectly) from the Company or its parent or a subsidiary for services
rendered as a consultant or in any capacity other than as a Director (except
for an amount as to which disclosure would not be required under Item 404(a) of
Regulation S-K promulgated pursuant to the Securities Act (“Regulation S-K”)),
does not possess an interest in any other transaction as to which disclosure

 

 

would
be required under Item 404(a) of Regulation S-K and is not engaged in a
business relationship as to which disclosure would be required under Item
404(b) of Regulation S-K; or (ii) is otherwise considered a “non-employee
director” for purposes of Rule 16b-3.

 

2.21        “Nonstatutory Share Option”
means an Option not intended to qualify as an Incentive Stock Option.

 

2.22        “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.

 

2.23        “Option” means an Incentive
Stock Option or a Nonstatutory Share Option granted pursuant to the Plan.

 

2.24        “Option Agreement” means a
written agreement between the Company and an Optionholder evidencing the terms
and conditions of an individual Option grant. 
Each Option Agreement shall be subject to the terms and conditions of
the Plan.

 

2.25        “Optionholder” means a
person to whom an Option is granted pursuant to the Plan or, if applicable,
such other person who holds an outstanding Option.

 

2.26        “Ordinary Share” or “Share”
means an ordinary share of the Company, nominal value US$0.00001.

 

2.27        “Outside Director” means a
Director who either (i) is not a current employee of the Company or an “affiliated
corporation” (within the meaning of Treasury Regulations promulgated under
Section 162(m) of the Code), is not a former employee of the Company or an “affiliated
corporation” receiving compensation for prior services (other than benefits
under a tax qualified pension plan), was not an officer of the Company or an “affiliated
corporation” at any time and is not currently receiving direct or indirect
remuneration from the Company or an “affiliated corporation” for services in
any capacity other than as a Director; or (ii) is otherwise considered an “outside
director” for purposes of Section 162(m) of the Code.

 

2.28        “Participant” means a person
to whom a Share Award is granted pursuant to the Plan or, if applicable, such
other person who holds an outstanding Share Award.

 

2.29        “Performance Share Bonus”
means a grant of Ordinary Shares subject to the provisions of Section 8.6 of
the Plan.

 

2.30        “Performance Share Unit”
means the right to receive the value of one (1) Ordinary Share at the time the
Performance Share Unit vests, with the further right to elect to defer receipt
of that value otherwise deliverable upon the vesting of an award of Performance
Share Units to the extent permitted in the Participant’s agreement.  These Performance Share Units are subject to
the provisions of Section 8.7 of the Plan.

 

2.31        “Phantom Share Unit” means
the right to receive the value of one (1) Ordinary Share, subject to the
provisions of Section 8.4 of the Plan.

 

 

2.32        “Plan” means this 2004 Share
Compensation Plan of Seagate Technology Public Limited Company.

 

2.33        “Qualifying Performance
Criteria” means any one or more of the following performance criteria, or
derivations of such performance criteria, either individually, alternatively or
in any combination, applied to either the Company as a whole or to a business
unit or subsidiary, and measured either annually or cumulatively over a period
of years, on an absolute basis or relative to a pre-established target, to
previous years’ results or to a designated comparison group, in each case as
specified by the Committee: (a) pre- and after-tax income; (b) net income
(before or after taxes); (c) operating income; (d) net earnings; (e) net
operating income (before or after taxes); (f) operating margin; (g) gross
margin; (h) cash flow; (i) earnings per share; (j) return on equity; (k) return
on assets, investments or capital employed; (l) pre-tax profit; (m) revenue;
(n) market share; (o) cash flow (before or after dividends); (p) cost
reductions or savings; (q) funds from operations; (r) total shareholder return;
(s) share price; (t) earnings before any one or more of the following items:
interest, taxes, depreciation or amortization; (u) market capitalization; (v)
economic value added; (w) operating ratio; (x) product development or release
schedules; (y) new product innovation; (z) cost reductions; (aa) implementation
of our critical processes or projects; (bb) customer service or customer
satisfaction; or (cc) product quality measures.

 

2.34        “Restricted Share Bonus”
means a grant of Ordinary Shares subject to the provisions of Section 8.1 of
the Plan.

 

2.35        “Restricted Share Purchase
Right” means the right to acquire Ordinary Shares upon the payment of the
agreed-upon monetary consideration, subject to the provisions of Section 8.2 of
the Plan.

 

2.36        “Restricted Share Unit”
means the right to receive the value of one (1) Ordinary Share at the time the
Restricted Share Unit vests, with the further right to elect to defer receipt
of that value otherwise deliverable upon the vesting of an award of restricted
share units to the extent permitted in the Participant’s agreement.  These Restricted Share Units are subject to
the provisions of Section 8.5 of the Plan.

 

2.37        “Rule 16b-3” means Rule
16b-3 promulgated under the Exchange Act or any successor to Rule 16b-3, as in
effect from time to time.

 

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

 

2.39        “Share Appreciation Right”
means the right to receive an amount equal to the Fair Market Value of one (1)
Ordinary Share on the day the Share Appreciation Right is redeemed, reduced by
the deemed exercise price or base price of such right, subject to the
provisions of Section 8.3 of the Plan.

 

2.40        “Share Award” means any
Option award, Restricted Share Bonus award, Restricted Share Purchase Right
award, Share Appreciation Right award, Phantom Share Unit award, Restricted
Share Unit award, Performance Share Bonus award, Performance Share Unit award,
or

 

 

other
share-based award.  These Awards may
include, but are not limited to those listed in Section 1.2.

 

2.41        “Share Award Agreement”
means a written agreement between the Company and a holder of a Share Award
setting forth the terms and conditions of an individual Share Award grant.  Each Share Award Agreement shall be subject
to the terms and conditions of the Plan.

 

2.42        “Ten Percent Shareholder”
means a person who owns (or is deemed to own pursuant to Section 424(d) of the
Code) shares possessing more than ten percent (10%) of the total combined
voting power of all classes of shares of the Company or of any of its
Affiliates.

 

III. ADMINISTRATION.

 

3.1          Administration by Board.  The Board shall administer the Plan unless
and until the Board delegates administration to a Committee, as provided in
Section 3.3.

 

3.2          Powers of Board.  The Board shall have the power, subject to,
and within the limitations of, the express provisions of the Plan:

 

(i)            To determine from time to
time which of the persons eligible under the Plan shall be granted Share
Awards; when and how each Share Award shall be granted; what type or
combination of types of Share Award shall be granted; the provisions of each
Share Award granted (which need not be identical), including the time or times when
a person shall be permitted to receive Ordinary Shares pursuant to a Share
Award; and the number of Shares with respect to which a Share Award shall be
granted to each such person.

 

(ii)           To construe and interpret
the Plan and Share Awards granted under it, and to establish, amend and revoke
rules and regulations for its administration. 
The Board, in the exercise of this power, may correct any defect,
omission or inconsistency in the Plan or in any Share Award Agreement, in a
manner and to the extent it shall deem necessary or expedient to make the Plan
fully effective.

 

(iii)          To amend the Plan or a Share
Award as provided in Section 15 of the Plan.

 

(iv)          Generally, to exercise such
powers and to perform such acts as the Board deems necessary, desirable,
convenient or expedient to promote the best interests of the Company that are
not in conflict with the provisions of the Plan.

 

(v)           To adopt sub-plans and/or
special provisions applicable to Share Awards regulated by the laws of a
jurisdiction other than and outside of the United States.  Such sub-plans and/or special provisions may
take precedence over other provisions of the Plan, with the exception of
Section 4 of the Plan, but unless otherwise superseded by the terms of such
sub-plans and/or special provisions, the provisions of the Plan shall govern.

 

 

3.3          Delegation to Committee.

 

(i)            General.  The Board may delegate administration of the
Plan to a Committee or Committees of one or more individuals, and the term “Committee”
shall apply to any person or persons to whom such authority has been
delegated.  If administration is
delegated to a Committee, the Committee shall have, in connection with the
administration of the Plan, the powers theretofore possessed by the Board,
including the power to delegate to a subcommittee any of the administrative
powers the Committee is authorized to exercise (and references in this Plan to
the Board shall thereafter be to the Committee or subcommittee, as applicable),
subject, however, to such resolutions, not inconsistent with the provisions of
the Plan, as may be adopted from time to time by the Board.  The Board may abolish the Committee at any
time and revest in the Board the administration of the Plan.

 

(ii)           Committee Composition when
Ordinary Shares are Publicly Traded.  At such time as the Ordinary Shares are
publicly traded, in the discretion of the Board, a Committee may consist solely
of two or more Outside Directors, in accordance with Section 162(m) of the
Code, and/or solely of two or more Non-Employee Directors, in accordance with
Rule 16b-3.  Within the scope of such
authority, the Board or the Committee may (1) delegate to a committee of one or
more individuals who are not Outside Directors the authority to grant Share
Awards to eligible persons who are either (a) not then Covered Employees and
are not expected to be Covered Employees at the time of recognition of income
resulting from such Share Award or (b) not persons with respect to whom the
Company wishes to comply with Section 162(m) of the Code and/or (2) delegate to
a committee of one or more individuals who are not Non-Employee Directors the
authority to grant Share Awards to eligible persons who are either (a) not then
subject to Section 16 of the Exchange Act or (b) receiving a Share Award as to
which the Board or Committee elects not to comply with Rule 16b-3 by having two
or more Non-Employee Directors grant such Share Award.

 

3.4          Effect of Board’s Decision.  All determinations, interpretations and
constructions made by the Board in good faith shall not be subject to review by
any person and shall be final, binding and conclusive on all persons.

 

IV. SHARES SUBJECT TO THE PLAN.

 

4.1          Share Reserve.  Subject to the provisions of Section 14 of
the Plan relating to adjustments upon changes in Ordinary Shares, the maximum
aggregate number of Shares that may be issued pursuant to Share Awards shall
not exceed sixty three million five hundred thousand (63,500,000) shares,
provided that each Share Award granted will reduce the share reserve by one (1)
share upon the issuance of a share at the time of grant, exercise or
redemption, as applicable.  To the extent
that a distribution pursuant to a Share Award is made in cash, the share
reserve shall remain unaffected.  In
addition, the maximum aggregate number of Shares that may be issued pursuant to
Full-Value Share Awards shall not exceed ten million (10,000,000) Shares (“Full-Value
Share Award Share Reserve”).

 

4.2          Reversion of Shares to the
Share Reserve.  If any
Share Award shall for any reason (i) expire, be cancelled or otherwise
terminate, in whole or in part, without having been exercised or redeemed in
full, (ii) be reacquired by the Company prior to vesting, or (iii) be
repurchased at cost

 

 

by
the Company prior to vesting, the Shares not acquired under such Share Award
shall revert to and again become available for issuance under the Plan, and if
subject to a Full-Value Share Award, shall also reduce the number of Shares
issued against the Full-Value Share Award Share Reserve.  To the extent that a Share Award granted
under the Plan is redeemed by payment in cash rather than Shares according to
its terms, the Shares subject to the redeemed portion of the Share Award shall
revert to and again become available for issuance under the Plan.

 

4.3          Source of Shares.  The Shares subject to the Plan may be
unissued Shares or reacquired Shares, bought on the market or otherwise.

 

V. ELIGIBILITY.

 

5.1          Eligibility for Specific
Share Awards.  Incentive
Stock Options may be granted only to Employees. 
Share Awards other than Incentive Stock Options may be granted to
Employees, Directors and Consultants.

 

5.2          Ten Percent Shareholders.  A Ten Percent Shareholder shall not be
granted an Incentive Stock Option unless the exercise price of such Option is
at least one hundred ten percent (110%) of the Fair Market Value of the
Ordinary Shares at the date of grant and the Option is not exercisable after
the expiration of five (5) years from the date of grant.

 

5.3          Annual Section 162(m) Limitation.  Subject to the provisions of Section 14
of the Plan relating to adjustments upon changes in the Ordinary Shares, no
Employee shall be eligible to be granted Share Awards covering more than ten
million (10,000,000) Shares during any fiscal year.

 

5.4          Individual Full-Value Share
Award Limitation over Life of Plan.  Subject to the provisions of Section 14
of the Plan relating to adjustments upon changes in the Ordinary Shares, no
individual shall be eligible to be issued more than ten million (10,000,000)
Shares under all Full-Value Share Awards (i.e., Restricted Share Bonuses,
Restricted Share Units, Phantom Share Units, Performance Share Bonuses, and
Performance Share Units, but not Incentive Stock Options, Nonstatutory Share Options,
or Share Appreciation Rights for which an annual limit is provided under Section 5.3)
granted to such individual under the Plan.

 

5.5          Consultants.

 

(i)            A Consultant shall not be
eligible for the grant of a Share Award if, at the time of grant, a Form S-8
Registration Statement under the Securities Act (“Form S-8”) is not
available to register either the offer or the sale of the Company’s securities
to such Consultant because of the nature of the services that the Consultant is
providing to the Company, or because the Consultant is not a natural person, or
as otherwise provided by the rules governing the use of Form S-8,
unless the Company determines both (1) that such grant (A) shall be
registered in another manner under the Securities Act (e.g., on a Form S-3
Registration Statement) or (B) does not require registration under the
Securities Act in order to comply with the requirements of the Securities Act,
if applicable, and (2) that such grant complies with the securities laws
of all other relevant jurisdictions.

 

(ii)           Form S-8 generally is
available to consultants and advisors only if (A) they are natural
persons; (B) they provide bona fide services to the issuer, its parents,
its majority owned 

 

 

subsidiaries:
and (C) the services are not in connection with the offer or sale of
securities in a capital-raising transaction, and do not directly or indirectly
promote or maintain a market for the issuer’s securities.

 

VI. OPTION PROVISIONS.

 

Each Option shall be in such
form and shall contain such terms and conditions as the Board shall deem
appropriate.  All Options shall be
separately designated Incentive Stock Options or Nonstatutory Share Options at
the time of grant.  The provisions of
separate Options need not be identical, but each Option shall include (through
incorporation of provisions hereof by reference in the Option or otherwise) the
substance of each of the following provisions:

 

6.1          Term.  Subject to the provisions of Section 5.2
of the Plan regarding grants of Incentive Stock Options to Ten Percent
Shareholders, no Option shall be exercisable after the expiration of seven (7) years
from the date it was granted.

 

6.2          Exercise Price of an
Incentive Stock Option. 
Subject to the provisions of Section 5.2 of the Plan regarding Ten
Percent Shareholders, the exercise price of each Incentive Stock Option shall
be not less than one hundred percent (100%) of the Fair Market Value of the
Shares subject to the Option on the date the Option is granted.  Notwithstanding the foregoing, an Incentive
Stock Option may be granted with an exercise price lower than that set forth in
the preceding sentence if such Option is granted pursuant to an assumption or
substitution for another option in a manner satisfying the provisions of Section 424(a) of
the Code.

 

6.3          Exercise Price of a
Nonstatutory Share Option.  The
exercise price of each Nonstatutory Share Option shall be not less than
eighty-five percent (85%) of the Fair Market Value of the Shares subject to the
Option on the date the Option is granted. 
Notwithstanding the foregoing, a Nonstatutory Share Option may be
granted with an exercise price lower than that set forth in the preceding
sentence if such Option is granted pursuant to an assumption or substitution
for another option in a manner satisfying the provisions of Section 424(a) of
the Code.

 

6.4          Consideration.  The purchase price of Ordinary Shares
acquired pursuant to an Option shall be paid, to the extent permitted by
applicable statutes and regulations, either (i) in cash or by check at the
time the Option is exercised or (ii) at the discretion of the Board at the
time of the grant of the Option (or subsequently in the case of a Nonstatutory
Share Option): (1) by delivery to the Company of other Shares, (2) according
to a deferred payment or other similar arrangement with the Optionholder,
including use of a promissory note, (3) pursuant to a “same day sale”
program, or (4) by some combination of the foregoing.  Unless otherwise specifically provided in the
Option Agreement, the purchase price of Ordinary Shares acquired pursuant to an
Option that is paid by delivery to the Company of other Shares acquired,
directly or indirectly from the Company, shall be paid only by Shares that have
been held for more than six (6) months (or such longer or shorter period
of time required to avoid a charge to earnings for financial accounting
purposes).

 

In the case of any deferred
payment arrangement, interest shall be compounded at least annually and shall
be charged at the market rate of interest and contain such other terms and 

 

 

conditions necessary to
avoid a charge to earnings for financial accounting purposes as a result of the
use of such deferred payment arrangement.

 

6.5          Transferability of an
Incentive Stock Option.  An
Incentive Stock Option shall not be transferable except by will or by the laws
of descent and distribution and shall be exercisable during the lifetime of the
Optionholder only by the Optionholder. 
Notwithstanding the foregoing, if provided in the Option Agreement, the
Optionholder may, by delivering written notice to the Company, in a form
satisfactory to the Company, designate a third party who, in the event of the
death of the Optionholder, shall thereafter be entitled to exercise the Option.

 

6.6          Transferability of a
Nonstatutory Share Option.  A
Nonstatutory Share Option shall be transferable to the extent provided in the
Option Agreement.  If the Nonstatutory
Share Option does not provide for transferability, then the Nonstatutory Share
Option shall not be transferable except by will or by the laws of descent and
distribution and shall be exercisable during the lifetime of the Optionholder
only by the Optionholder. 
Notwithstanding the foregoing, if provided in the Option Agreement, the
Optionholder may, by delivering written notice to the Company, in a form
satisfactory to the Company, designate a third party who, in the event of the
death of the Optionholder, shall thereafter be entitled to exercise the Option.

 

6.7          Vesting Generally.  Options granted under the Plan shall be
exercisable at such time and upon such terms and conditions as may be
determined by the Board.  The vesting
provisions of individual Options may vary. 
The provisions of this Section 6.7 are subject to any Option
provisions governing the minimum number of Shares as to which an Option may be
exercised.

 

6.8          Termination of Continuous
Service.  In the event an Optionholder’s
Continuous Service terminates (other than upon the Optionholder’s death or
Disability), the Optionholder may exercise his or her Option (to the extent
that the Optionholder was entitled to exercise such Option as of the date of
termination) but only within such period of time ending on the earlier of (i) the
date three (3) months following the termination of the Optionholder’s
Continuous Service (or such longer or shorter period specified in the Option
Agreement), or (ii) the expiration of the term of the Option as set forth
in the Option Agreement.  If, after
termination, the Optionholder does not exercise his or her Option within the
time specified in the Option Agreement, the Option shall terminate.

 

6.9          Extension of Termination
Date.  An Optionholder’s Option
Agreement may also provide that if the exercise of the Option following the
termination of the Optionholder’s Continuous Service (other than upon the
Optionholder’s death or Disability) would be prohibited at any time solely
because the issuance of Shares would violate the registration requirements
under the Securities Act or other applicable securities law, then the Option
shall terminate on the earlier of (i) the expiration of the term of the
Option set forth in the Option Agreement or (ii) the expiration of a
period of three (3) months after the termination of the Optionholder’s
Continuous Service during which the exercise of the Option would not be in
violation of such registration requirements or other applicable securities law.

 

6.10        Disability of Optionholder.  In the event that an Optionholder’s
Continuous Service terminates as a result of the Optionholder’s Disability, the
Optionholder may exercise his or her Option (to the extent that the
Optionholder was entitled to exercise such Option as of the date of 

 

 

termination),
but only within such period of time ending on the earlier of (i) the date
twelve (12) months following such termination (or such longer or shorter period
specified in the Option Agreement) or (ii) the expiration of the term of
the Option as set forth in the Option Agreement.  If after termination, the Optionholder does
not exercise his or her Option within the time specified herein, the Option
shall terminate.

 

6.11        Death of Optionholder.  In the event (i) an Optionholder’s
Continuous Service terminates as a result of the Optionholder’s death or (ii) the
Optionholder dies within the period (if any) specified in the Option Agreement
after the termination of the Optionholder’s Continuous Service for a reason
other than death, then the Option may be exercised (to the extent the
Optionholder was entitled to exercise such Option as of the date of death) by
the Optionholder’s estate, by a person who acquired the right to exercise the
Option by bequest or inheritance or by a person designated to exercise the
Option upon the Optionholder’s death pursuant to Section 6.5 or 6.6 of the
Plan, but only within the period ending on the earlier of (1) the date
twelve (12) months following the date of death (or such longer or shorter
period specified in the Option Agreement) or (2) the expiration of the
term of such Option as set forth in the Option Agreement.  If, after death, the Option is not exercised
within the time specified herein, the Option shall terminate.

 

6.12        Early Exercise.  The Option Agreement may, but need not,
include a provision whereby the Optionholder may elect at any time before the
Optionholder’s Continuous Service terminates to exercise the Option as to any
part or all of the Shares subject to the Option prior to the full vesting of
the Option.  Any unvested Shares so
purchased may be subject to a repurchase option in favor of the Company or to
any other restriction the Board determines to be appropriate.

 

VII. RESERVED.

 

VIII. PROVISIONS OF SHARE AWARDS OTHER THAN OPTIONS.

 

8.1          Restricted Share Bonus
Awards.  Each Restricted Share Bonus
agreement shall be in such form and shall contain such terms and conditions as
the Board shall deem appropriate. 
Restricted Share Bonuses shall be paid by the Company in Ordinary
Shares.  Should Shares be issued pursuant
to a Restricted Share Bonus award in circumstances where they are not otherwise
fully paid up, the Board may require the Participant to pay the aggregate
Nominal Value of the Shares on the basis that such Shares underlying the
Restricted Share Bonus award shall then be allotted as fully paid to the
Participant.  The terms and conditions of
Restricted Share Bonus agreements may change from time to time, and the terms
and conditions of separate Restricted Share Bonus agreements need not be
identical, but each Restricted Share Bonus agreement shall include (through
incorporation of provisions hereof by reference in the agreement or otherwise)
the substance of each of the following provisions:

 

(i)            Vesting.  Vesting shall generally be based on the
Participant’s Continuous Service.  Shares
awarded under the Restricted Share Bonus agreement shall be subject to a share
reacquisition right in favor of the Company in accordance with a vesting
schedule to be determined by the Board.

 

 

(ii)           Termination of Participant’s
Continuous Service.  In the
event a Participant’s Continuous Service terminates, the Company shall
reacquire any or all of the Shares held by the Participant that have not vested
as of the date of termination under the terms of the Restricted Share Bonus
agreement.

 

(iii)          Transferability.  Rights to acquire Shares under the Restricted
Share Bonus agreement shall be transferable by the Participant only upon such
terms and conditions as are set forth in the Restricted Share Bonus agreement,
as the Board shall determine in its discretion, so long as Ordinary Shares
awarded under the Restricted Share Bonus agreement remain subject to the terms
of the Restricted Share Bonus agreement.

 

8.2          Restricted Share Purchase
Awards.  Each Restricted Share Purchase
agreement shall be in such form and shall contain such terms and conditions as
the Board shall deem appropriate.  The terms
and conditions of the Restricted Share Purchase agreements may change from time
to time, and the terms and conditions of separate Restricted Share Purchase
agreements need not be identical, but each Restricted Share Purchase agreement
shall include (through incorporation of provisions hereof by reference in the
agreement or otherwise) the substance of each of the following provisions:

 

(i)            Purchase Price.  The purchase price under each Restricted
Share Purchase agreement shall be such amount as the Board shall determine and
designate in such Restricted Share Purchase agreement.  The purchase price shall not be less than
eighty-five percent (85%) of the Fair Market Value of the Shares on the date
such award is made or at the time the purchase is consummated.

 

(ii)           Consideration.  The purchase price of the Shares acquired
pursuant to the Restricted Share Purchase agreement shall be paid either: (A) in
cash or by check at the time of purchase; (B) at the discretion of the
Board, according to a deferred payment or other similar arrangement with the
Participant, including use of a promissory note; or (C) in any other form
of legal consideration that may be acceptable to the Board in its discretion.

 

(iii)          Vesting.  The Board shall determine the criteria under
which Shares under the Restricted Share Purchase agreement may vest; the
criteria may or may not include performance criteria or Continuous
Service.  Shares acquired under the
Restricted Share Purchase agreement may, but need not, be subject to a share repurchase
option in favor of the Company in accordance with a vesting schedule to be
determined by the Board.

 

(iv)          Termination of Participant’s
Continuous Service.  In the
event a Participant’s Continuous Service terminates, the Company may repurchase
any or all of the Shares held by the Participant that have not vested as of the
date of termination under the terms of the Restricted Share Purchase agreement.

 

(v)           Transferability.  Rights to acquire Shares under the Restricted
Share Purchase agreement shall be transferable by the Participant only upon
such terms and conditions as are set forth in the Restricted Share Purchase
agreement, as the Board shall determine in its discretion, so 

 

 

long
as Shares awarded under the Restricted Share Purchase agreement remain subject
to the terms of the Restricted Share Purchase agreement.

 

8.3          Share Appreciation Rights.  Two types of Share Appreciation Rights (“SARs”)
shall be authorized for issuance under the Plan: (1) stand-alone SARs and (2) stapled
SARs.

 

(i)            Stand-Alone SARs.  The following terms and conditions shall
govern the grant and redeemability of stand-alone SARs:

 

(A)          The stand-alone
SAR shall cover a specified number of underlying Shares and shall be redeemable
upon such terms and conditions as the Board may establish.  Upon redemption of the stand-alone SAR, the
holder shall be entitled to receive a distribution from the Company in an
amount equal to the excess of (i) the aggregate Fair Market Value (on the
redemption date) of the Shares underlying the redeemed right over (ii) the
aggregate base price in effect for those Shares.

 

(B)          The number of
Shares underlying each stand-alone SAR and the base price in effect for those
Shares shall be determined by the Board in its sole discretion at the time the
stand-alone SAR is granted.  In no event,
however, may the base price per Share be less than eighty-five percent (85%) of
the Fair Market Value per underlying Share on the grant date.

 

(C)          The
distribution with respect to any redeemed stand-alone SAR may be made in Shares
valued at Fair Market Value on the redemption date, in cash, or partly in
Shares and partly in cash, as the Board shall in its sole discretion deem
appropriate.

 

(ii)           Stapled SARs.  The following terms and conditions shall
govern the grant and redemption of stapled SARs:

 

(A)          Stapled SARs
may only be granted concurrently with an Option to acquire the same number of
Shares as the number of such Shares underlying the stapled SARs.

 

(B)          Stapled SARs
shall be redeemable upon such terms and conditions as the Board may establish
and shall grant a holder the right to elect among (i) the exercise of the
concurrently granted Option for Shares, whereupon the number of Shares subject
to the stapled SARs shall be reduced by an equivalent number, (ii) the redemption
of such stapled SARs in exchange for a distribution from the Company in an
amount equal to the excess of the Fair Market Value (on the redemption date) of
the number of vested Shares which the holder redeems over the aggregate base
price for such vested Shares, whereupon the number of Shares subject to the
concurrently granted Option shall be reduced by any equivalent number, or (iii) a
combination of (i) and (ii).

 

(C)          The
distribution to which the holder of stapled SARs shall become entitled under
this Section 8 upon the redemption of stapled SARs as described in Section 8.3(ii)(B) above
may be made in Shares valued at Fair Market Value on the redemption date, in
cash, or partly in Shares and partly in cash, as the Board shall in its sole
discretion deem appropriate.

 

 

8.4          Phantom Share Units.  The following terms and conditions shall
govern the grant and redeemability of Phantom Share Units:

 

(i)            Phantom Share Unit awards
shall be redeemable by the Participant to the Company upon such terms and conditions
as the Board may establish.  The value of
a single Phantom Share Unit shall be equal to the Fair Market Value of a Share,
unless the Board otherwise provides in the terms of the Share Award Agreement.

 

(ii)           The distribution with
respect to any exercised Phantom Share Unit award may be made in Shares valued
at Fair Market Value on the redemption date, in cash, or partly in Shares and
partly in cash, as the Board shall in its sole discretion deem
appropriate.   Should Shares be issued
pursuant to a Phantom Share Unit award in circumstances where they are not
otherwise fully paid up, the Board may require the Participant to pay the
aggregate Nominal Value of the Shares on the basis that such Shares underlying
the Phantom Share Unit award shall then be allotted as fully paid to the
Participant.

 

8.5          Restricted Share Units.  The following terms and conditions shall
govern the grant and redeemability of Restricted Share Units:

 

A Restricted Share Unit is
the right to receive the value of one (1) Ordinary Share at the time the
Restricted Share Unit vests.  Should
Shares be issued pursuant to a Restricted Share Unit award in circumstances
where they are not otherwise fully paid up, the Board may require the
Participant to pay the aggregate Nominal Value of the Shares on the basis that
such Shares underlying the Restricted Share Unit award shall then be allotted
as fully paid to the Participant.

 

To the extent permitted by
the Committee in the terms of his or her Share Award Agreement, a Participant
may elect to defer receipt of the value of the Shares otherwise deliverable
upon the vesting of an award of Restricted Share Units, so long as such
deferral election complies with applicable law, including to the extent
applicable, the Employee Retirement Income Security Act of 1974, as amended (“ERISA”).  An election to defer such delivery shall be
irrevocable and shall be made in writing on a form acceptable to the
Company.  The election form shall be
filed prior to the vesting date of such Restricted Share Units in a manner
determined by the Board.  When the
Participant vests in such Restricted Share Units, the Participant will be
credited with a number of Restricted Share Units equal to the number of Shares
for which delivery is deferred. 
Restricted Share Units may be paid by the Company by delivery of Shares,
in cash, or a combination thereof, as the Board shall in its sole discretion
deem appropriate, in accordance with the timing and manner of payment elected
by the Participant on his or her election form, or if no deferral election is
made, as soon as administratively practicable following the vesting of the
Restricted Share Unit.

 

Each Restricted Share Unit
agreement shall be in such form and shall contain such terms and conditions as
the Board shall deem appropriate.  The
terms and conditions of Restricted Share Unit agreements may change from time
to time, and the terms and conditions of separate Restricted Share Unit
agreements need not be identical, but each Restricted Share Unit agreement
shall include (through incorporation of provisions hereof by reference in the
agreement or otherwise) the substance of each of the following provisions:

 

 

(i)            Vesting.  Vesting shall generally be based on the
Participant’s Continuous Service.  Shares
awarded under the Restricted Share Unit agreement shall be subject to a Share
reacquisition right in favor of the Company in accordance with a vesting
schedule to be determined by the Board.

 

(ii)           Termination of Participant’s
Continuous Service.  In the
event a Participant’s Continuous Service terminates, the Company shall
reacquire any or all of the Shares held by the Participant that have not vested
as of the date of termination under the terms of the Restricted Share Unit
agreement.

 

(iii)          Transferability.  Rights to acquire the value of Shares under
the Restricted Share Unit agreement shall be transferable by the Participant
only upon such terms and conditions as are set forth in the Restricted Share
Unit agreement, as the Board shall determine in its discretion, so long as any
Ordinary Shares awarded under the Restricted Share Unit agreement remain
subject to the terms of the Restricted Share Unit agreement.

 

8.6          Performance Share Bonus
Awards.  Each Performance Share Bonus
agreement shall be in such form and shall contain such terms and conditions as
the Board shall deem appropriate. 
Performance Share Bonuses shall be paid by the Company in Ordinary
Shares.  Should Shares be issued pursuant
to a Performance Share Bonus award in circumstances where they are not
otherwise fully paid up, the Board may require the Participant to pay the
aggregate Nominal Value of the Shares on the basis that such Shares underlying
the Performance Share Bonus award shall then be allotted as fully paid to the
Participant.  The terms and conditions of
Performance Share Bonus agreements may change from time to time, and the terms
and conditions of separate Performance Share Bonus agreements need not be
identical, but each Performance Share Bonus agreement shall include (through
incorporation of provisions hereof by reference in the agreement or otherwise)
the substance of each of the following provisions:

 

(i)            Vesting.  Vesting shall be based on the achievement of
certain performance criteria, whether financial, transactional or otherwise, as
determined by the Board.  Vesting shall
be subject to the Performance Share Bonus agreement.  Upon failure to meet performance criteria,
Shares awarded under the Performance Share Bonus agreement shall be subject to
a share reacquisition right in favor of the Company in accordance with a
vesting schedule to be determined by the Board.

 

(ii)           Termination of Participant’s
Continuous Service.  In the event
a Participant’s Continuous Service terminates, the Company shall reacquire any
or all of the Shares held by the Participant that have not vested as of the
date of termination under the terms of the Performance Share Bonus agreement.

 

(iii)          Transferability.  Rights to acquire Shares under the
Performance Share Bonus agreement shall be transferable by the Participant only
upon such terms and conditions as are set forth in the Performance Share Bonus
agreement, as the Board shall determine in its discretion, so long as Ordinary
Shares awarded under the Performance Share Bonus agreement remain subject to
the terms of the Performance Share Bonus agreement.

 

 

(iv)          Discretionary Adjustments
and Limits.  Subject to
the limits imposed under Section 162(m) of the Code for Share Awards
that are intended to qualify as “performance-based compensation,”
notwithstanding the satisfaction of any performance goals, the number of Shares
granted, issued, retainable and/or vested under a Performance Share Bonus may,
to the extent specified in the Share Award Agreement, be reduced, but not
increased, by the Committee on the basis of such further considerations as the
Committee shall determine

 

8.7          Performance Share Units.  The following terms and conditions shall
govern the grant and redeemability of Performance Share Units:

 

A Performance Share Unit is
the right to receive the value of one (1) Ordinary Share at the time the
Performance Share Unit vests.  Should
Shares be issued pursuant to a Performance Share Unit award in circumstances
where they are not otherwise fully paid up, the Board may require the
Participant to pay the aggregate Nominal Value of the Shares on the basis that
such Shares underlying the Performance Share Unit award shall then be allotted
as fully paid to the Participant.

 

To the extent permitted by
the Committee in the terms of his or her Share Award Agreement, a Participant
may elect to defer receipt of the value of Shares otherwise deliverable upon
the vesting of an award of Performance Share Units, so long as such deferral
election complies with applicable law. 
An election to defer such delivery shall be irrevocable and shall be
made in writing on a form acceptable to the Company.  The election form shall be filed prior to the
vesting date of such Performance Share Units in a manner determined by the
Board.  When the Participant vests in
such Performance Share Units, the Participant will be credited with a number of
Performance Share Units equal to the number of Shares for which delivery is
deferred.  Performance Share Units may be
paid by the Company by delivery of Shares, in cash, or a combination thereof,
as the Board shall in its sole discretion deem appropriate, in accordance with
the timing and manner of payment elected by the Participant on his or her
election form, or if no deferral election is made, as soon as administratively
practicable following the vesting of the Performance Share Unit.

 

Each Performance Share Unit
agreement shall be in such form and shall contain such terms and conditions as
the Board shall deem appropriate.  The
terms and conditions of Performance Share Unit agreements may change from time
to time, and the terms and conditions of separate Performance Share Unit
agreements need not be identical, but each Performance Share Unit agreement
shall include (through incorporation of provisions hereof by reference in the
agreement or otherwise) the substance of each of the following provisions:

 

(i)            Vesting.  Vesting shall be based on the achievement of
certain performance criteria, whether financial, transactional or otherwise, as
determined by the Board.  Vesting shall
be subject to the Performance Share Unit agreement.  Upon failure to meet performance criteria,
Shares awarded under the Performance Share Unit agreement shall be subject to a
Share reacquisition right in favor of the Company in accordance with a vesting
schedule to be determined by the Board.

 

(ii)           Termination of Participant’s
Continuous Service.  In the
event a Participant’s Continuous Service terminates, the Company shall
reacquire any or all of the Shares held by the Participant that have not vested
as of the date of termination under the terms of the Performance Share Unit
agreement.

 

 

(iii)          Transferability.  Rights to acquire the value of Shares under
the Performance Share Unit agreement shall be transferable by the Participant
only upon such terms and conditions as are set forth in the Performance Share
Unit agreement, as the Board shall determine in its discretion, so long as
Ordinary Shares awarded under the Performance Share Unit agreement remain
subject to the terms of the Performance Share Unit agreement.

 

(iv)          Discretionary Adjustments
and Limits.  Subject to
the limits imposed under Section 162(m) of the Code for Share Awards
that are intended to qualify as “performance-based compensation,”
notwithstanding the satisfaction of any performance goals, the number of Shares
granted, issued, retainable and/or vested under a Performance Share Unit may,
to the extent specified in the Share Award Agreement, be reduced, but not
increased, by the Committee on the basis of such further considerations as the
Committee shall determine.

 

IX. COVENANTS OF THE COMPANY.

 

9.1          Availability of Shares.  During the terms of the Share Awards, the
Company shall keep available at all times the number of Ordinary Shares
required to satisfy such Share Awards.

 

9.2          Securities Law Compliance.  The Company shall seek to obtain from each
regulatory commission or agency having jurisdiction over the Plan such
authority as may be required to grant Share Awards and to issue and sell
Ordinary Shares upon exercise, redemption or satisfaction of the Share Awards;
provided, however, that this undertaking shall not require the Company to
register under the Securities Act the Plan, any Share Award or any Ordinary
Shares issued or issuable pursuant to any such Share Award.  If, after reasonable efforts, the Company is
unable to obtain from any such regulatory commission or agency the authority
which counsel for the Company deems necessary for the lawful issuance and sale
of Ordinary Shares under the Plan, the Company shall be relieved from any
liability for failure to issue and sell Ordinary Shares related to such Share
Awards unless and until such authority is obtained.

 

X. QUALIFYING PERFORMANCE-BASED COMPENSATION

 

10.1        General.  The Committee may establish performance
criteria and the level of achievement versus such criteria that shall determine
the number of Shares to be granted, retained, vested, issued or issuable under
or in settlement of or the amount payable pursuant to a Share Award (including
a, Restricted Share Bonus, Restricted Share Purchase Right, Restricted Share
Unit, Performance Share Bonus or Performance Share Unit award), which criteria
may be based on Qualifying Performance Criteria or other standards of financial
performance and/or personal performance evaluations.  In addition, the Committee may specify that a
Share Award or a portion of a Share Award is intended to satisfy the
requirements for “performance-based compensation” under Section 162(m) of
the Code, provided that the performance criteria for such Award or portion of a
Share Award that is intended by the Committee to satisfy the requirements for “performance-based
compensation” under Section 162(m) of the Code shall be a measure
based on one or more Qualifying Performance Criteria selected by the Committee
and specified at the time the Award is granted, or within the time prescribed
by Section 162(m) and shall otherwise be in compliance with Section 162(m).  The Committee shall certify the extent to
which any Qualifying Performance Criteria has been satisfied and the amount
payable as a result thereof, prior to payment, settlement or 

 

 

vesting
of any Award that is intended to satisfy the requirements for “performance-based
compensation” under Section 162(m) of the Code.  Notwithstanding satisfaction of any
performance goals, the number of Shares issued under or the amount paid under
an award may, to the extent specified in the Share Award Agreement, be reduced,
but not increased, by the Committee on the basis of such further considerations
as the Committee in its sole discretion shall determine.

 

10.2        Adjustments.  To the extent consistent with Section 162(m) of
the Code, the Committee (a) shall appropriately adjust any evaluation of
performance under a Qualifying Performance Criteria to eliminate the effects of
charges for restructurings, discontinued operations, extraordinary items and
all items of gain, loss or expense determined to be extraordinary or unusual in
nature or related to the disposal of a segment of a business or related to a
change in accounting principle all as determined in accordance with standards
established by opinion No. 30 of the Accounting Principles Board (APA
Opinion No. 30) or other applicable or successor accounting provisions, as
well as the cumulative effect of accounting changes, in each case as determined
in accordance with generally accepted accounting principles or identified in
the Company’s financial statements or notes to the financial statements, and (b) may
appropriately adjust any evaluation of performance under a Qualifying
Performance Criteria to exclude any of the following events that occurs during
a performance period: (i) asset write-downs, (ii) litigation, claims,
judgments or settlements, (iii) the effect of changes in tax law or other
such laws or provisions affecting reported results, (iv) accruals for
reorganization and restructuring programs and (v) accruals of any amounts
for payment under this Plan or any other compensation arrangement maintained by
the Company.

 

XI. USE OF PROCEEDS FROM SHARES.

 

Proceeds from the sale of
Ordinary Shares pursuant to Share Awards shall constitute general funds of the
Company.

 

XII. CANCELLATION AND RE-GRANT OF OPTIONS.

 

12.1        The Board shall have the
authority to effect, at any time and from time to time, (i) the repricing
of any outstanding Options under the Plan and/or (ii) with the consent of
the affected Optionholders, the cancellation of any outstanding Options under
the Plan and the grant in substitution therefore of new Options under the Plan
covering the same or different number of Shares, but having an exercise price
per Share not less than eighty-five percent (85%) of the Fair Market Value (one
hundred percent (100%) of Fair Market Value in the case of an Incentive Stock
Option or, in the case of a Ten Percent Shareholder (as described in Section 5.2
of the Plan), not less than one hundred ten percent (110%) of the Fair Market
Value) per Share on the new grant date. 
Notwithstanding the foregoing, the Board may grant an Option with an
exercise price lower than that set forth above if such Option is granted as
part of a transaction to which Section 424(a) of the Code
applies.  Prior to the implementation of
any such repricing or cancellation of one or more outstanding Options, the
Board shall obtain the approval of the shareholders of the Company to the
extent required by any New York Stock Exchange, Nasdaq or other securities
exchange listing requirements, or applicable law.

 

12.2        Shares subject to an Option
canceled under this Section 12 shall continue to be counted against the
maximum award of Options permitted to be granted pursuant to Section 5.3
of 

 

 

the
Plan.  The repricing of an Option under
this Section 12, resulting in a reduction of the exercise price, shall be
deemed to be a cancellation of the original Option and the grant of a
substitute Option; in the event of such repricing, both the original and the
substituted Options shall be counted against the maximum awards of Options permitted
to be granted pursuant to Section 5.3 of the Plan.  The provisions of this Section 12.2
shall be applicable only to the extent required by Section 162(m) of
the Code.

 

XIII. MISCELLANEOUS.

 

13.1        Acceleration of
Exercisability and Vesting.  The Board (or Committee, if so authorized by
the Board) shall have the power to accelerate exercisability and/or vesting
when it deems fit, such as upon a Change of Control.  The Board or Committee shall have the power
to accelerate the time at which a Share Award may first be exercised or the
time during which a Share Award or any part thereof will vest in accordance
with the Plan, notwithstanding the provisions in the Award Agreement stating
the time at which it may first be exercised or the time during which it will
vest.

 

13.2        Shareholder Rights.  No Participant shall be deemed to be the
holder of, or to have any of the rights of a holder with respect to, any Shares
subject to a Share Award except to the extent that the Company has issued the
Shares relating to such Share Award.

 

13.3        No Employment or other
Service Rights.  Nothing in
the Plan or any instrument executed or Share Award granted pursuant thereto
shall confer upon any Participant any right to continue to serve the Company or
an Affiliate in the capacity in effect at the time the Share Award was granted
or shall affect the right of the Company or an Affiliate to terminate (i) the
employment of an Employee with or without notice and with or without cause, (ii) the
service of a Consultant pursuant to the terms of such Consultant’s agreement
with the Company or an Affiliate or (iii) the service of a Director
pursuant to the Bylaws of the Company, and any applicable provisions of the
corporate law of the state or other jurisdiction in which the Company is domiciled,
as the case may be.

 

13.4        Incentive Stock Option
$100,000 Limitation.  To the
extent that the aggregate Fair Market Value (determined at the time of grant)
of the Ordinary Shares with respect to which Incentive Stock Options are
exercisable for the first time by any Optionholder during any calendar year
(under all plans of the Company and its Affiliates) exceeds one hundred
thousand dollars ($100,000), the Options or portions thereof which exceed such
limit (according to the order in which they were granted) shall be treated as
Nonstatutory Share Options.

 

13.5        Investment Assurances.  The Company may require a Participant, as a
condition of exercising or redeeming a Share Award or acquiring Shares under
any Share Award, (i) to give written assurances satisfactory to the
Company as to the Participant’s knowledge and experience in financial and
business matters and/or to employ a purchaser representative reasonably
satisfactory to the Company who is knowledgeable and experienced in financial
and business matters and that he or she is capable of evaluating, alone or
together with the purchaser representative, the merits and risks of acquiring
the Shares; (ii) to give written assurances satisfactory to the Company
stating that the Participant is acquiring the Shares subject to the Share Award
for the Participant’s own account and 

 

 

not
with any present intention of selling or otherwise distributing the Shares; and
(iii) to give such other written assurances as the Company may determine
are reasonable in order to comply with applicable law.  The foregoing requirements, and any
assurances given pursuant to such requirements, shall be inoperative if (1) the
issuance of the Shares under the Share Award has been registered under a then
currently effective registration statement under the Securities Act or (2) as
to any particular requirement, a determination is made by counsel for the
Company that such requirement need not be met in the circumstances under the
then applicable securities laws, and in either case otherwise complies with
applicable law.  The Company may, upon
advice of counsel to the Company, place legends on Share certificates issued
under the Plan as such counsel deems necessary or appropriate in order to
comply with applicable laws, including, but not limited to, legends restricting
the transfer of the Shares.

 

13.6        Withholding Obligations.  To the extent provided by the terms of a
Share Award Agreement, the Participant may satisfy any federal, state, local,
or foreign tax withholding obligation relating to the exercise or redemption of
a Share Award or the acquisition, vesting, distribution or transfer of Ordinary
Shares under a Share Award by any of the following means (in addition to the
Company’s right to withhold from any compensation paid to the Participant by
the Company) or by a combination of such means: (i) tendering a cash
payment; (ii) authorizing the Company to withhold Shares from the Shares
otherwise issuable to the Participant, provided, however, that no Shares are
withheld with a value exceeding the minimum amount of tax required to be
withheld by law; or (iii) delivering to the Company owned and unencumbered
Shares.  The Participant may also satisfy
such tax withholding obligation by any other means set forth in the applicable
Share Award Agreement.

 

XIV. ADJUSTMENTS UPON CHANGES IN SHARES.

 

14.1        Capitalization Adjustments.  If any change is made in the Ordinary Shares
subject to the Plan, or subject to any Share Award, without the receipt of
consideration by the Company (through merger, consolidation, reorganization,
recapitalization, reincorporation, share dividend, spinoff, dividend in
property other than cash, share split, liquidating dividend, extraordinary
dividends or distributions, combination of shares, exchange of shares, change
in corporate structure or other transaction not involving the receipt of
consideration by the Company), the Plan may be appropriately adjusted in the
class(es) and maximum number of securities subject to the Plan or to grants of
Full-Value Share Awards pursuant to Section 4.1 above, the maximum number
of securities subject to award to any person pursuant to Sections 5.3 or 5.4
above, and the number of securities subject to the option grants to Eligible
Directors under Section 7 of the Plan, and the outstanding Share Awards
may be appropriately adjusted in the class(es) and number of securities and
price per share of the securities subject to such outstanding Share
Awards.  The Board may make such
adjustments in its sole discretion, and its determination shall be final,
binding and conclusive.  (The conversion
of any convertible securities of the Company shall not be treated as a
transaction “without receipt of consideration” by the Company.)

 

An adjustment under this
provision may have the effect of reducing the price at which Ordinary Shares
may be acquired to less than their Nominal Value (the “Shortfall”), but only if
and to the extent that the Board shall be authorized to capitalize from the
reserves of the Company a sum equal to the Shortfall and to apply that sum in
paying up that amount on the Ordinary Shares.

 

 

14.2        Adjustments Upon a Change of
Control.

 

(i)            In the event of a Change of
Control as defined in 2.4(i) through 2.4(iv), such as an asset sale,
merger, or change in ownership of voting power, then any surviving entity or
acquiring entity shall assume or continue any Share Awards outstanding under
the Plan or shall substitute similar share awards (including an award to
acquire substantially the same consideration paid to the shareholders in the
transaction by which the Change of Control occurs) for those outstanding under
the Plan.  In the event any surviving
entity or acquiring entity refuses to assume or continue such Share Awards or
to substitute similar share awards for those outstanding under the Plan, then
with respect to Share Awards held by Participants whose Continuous Service has
not terminated, the Board in its sole discretion and without liability to any
person may (1) provide for the payment of a cash amount in exchange for the
cancellation of a Share Award equal to the product of (x) the excess, if
any, of the Fair Market Value per Share at such time over the exercise or
redemption price, if any, times (y) the total number of Shares then
subject to such Share Award, (2) continue the Share Awards, or (3) notify
Participants holding an Option, Share Appreciation Right, or Phantom Share Unit
that they must exercise or redeem any portion of such Share Award (including,
at the discretion of the Board, any unvested portion of such Share Award) at or
prior to the closing, of the transaction by which the Change of Control occurs
and that the Share Awards shall terminate if not so exercised or redeemed at or
prior to the closing of the transaction by which the Change of Control occurs.  With respect to any other Share Awards
outstanding under the Plan, such Share Awards shall terminate if not exercised
or redeemed prior to the closing of the transaction by which the Change of
Control occurs.  The Board shall not be
obligated to treat all Share Awards, even those that are of the same type, in
the same manner.

 

(ii)           In the event of a Change of
Control as defined in 2.4(v), such as a dissolution of the Company, all
outstanding Share Awards shall terminate immediately prior to such event.

 

XV. AMENDMENT OF THE PLAN AND SHARE AWARDS.

 

15.1        Amendment of Plan.  The Board at any time, and from time to time,
may amend the Plan.  However, except as
provided in Section 14 of the Plan relating to adjustments upon changes in
the Ordinary Shares, no amendment shall be effective unless approved by the
shareholders of the Company to the extent shareholder approval is necessary to
satisfy the requirements of Section 422 of the Code, any New York Stock
Exchange, Nasdaq or other securities exchange listing requirements, or other
applicable law or regulation.

 

15.2        Shareholder Approval.  The Board may, in its sole discretion, submit
any other amendment to the Plan for shareholder approval, including, but not
limited to, amendments to the Plan intended to satisfy the requirements of Section 162(m) of
the Code and the regulations thereunder regarding the exclusion of
performance-based compensation from the limit on corporate deductibility of
compensation paid to certain executive officers.

 

15.3        Contemplated Amendments.  It is expressly contemplated that the Board
may amend the Plan in any respect the Board deems necessary or advisable to
provide eligible Employees with the maximum benefits provided or to be provided
under the provisions of the Code and the 

 

 

regulations
promulgated thereunder relating to Incentive Stock Options and/or to bring the
Plan and/or Incentive Stock Options granted under it into compliance therewith.

 

15.4        No Material Impairment of
Rights.  Rights under any Share Award
granted before amendment of the Plan shall not be materially impaired by any
amendment of the Plan unless (i) the Company requests the consent of the
Participant and (ii) the Participant consents in writing.

 

15.5        Amendment of Share Awards.  The Board at any time, and from time to time,
may amend the terms of any one or more Share Awards; provided, however, that
the rights under any Share Award shall not be materially impaired by any such
amendment unless (i) the Company requests the consent of the Participant
and (ii) the Participant consents in writing.

 

XVI. TERMINATION OR SUSPENSION OF THE PLAN.

 

16.1        Plan Term.  The Board may suspend or terminate the Plan
at any time. Unless sooner terminated, the Plan shall terminate on the day
before the tenth (10th) anniversary
of the date the Plan is approved by the shareholders of the Company.  No Share Awards may be granted under the Plan
while the Plan is suspended or after it is terminated.

 

16.2        No Material Impairment of
Rights.  Suspension or termination of
the Plan shall not materially impair rights and obligations under any Share
Award granted while the Plan is in effect except with the written consent of
the Participant.

 

XVII. EFFECTIVE DATE OF PLAN.

 

The Plan shall become
effective on the date that it is approved by the shareholders of the Company,
which approval shall be within twelve (12) months before or after the date the
Plan is adopted by the Board.  No Share
Awards may be granted under the Plan prior to the time that the shareholders
have approved the Plan.  The approval or
disapproval of the Plan by the shareholders of the Company shall have no effect
on any other equity compensation plan, program or arrangement sponsored by the
Company or any of its Affiliates.

 

XVIII. CHOICE OF LAW.

 

The law of the State of
California shall govern all questions concerning the construction, validity and
interpretation of this Plan, without regard to such state’s conflict of laws
rules.

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