Document:

1999 Stock Plan, as amended

 Exhibit 10.1 
  
 PALM, INC. 
  
 1999 STOCK PLAN 
 (As Amended through
July 1, 2003) 
  
 1.    Purposes of the
Plan.    The purposes of this 1999 Stock Plan are: 
  

	 	•	 	to attract and retain the best available personnel for positions of substantial responsibility, 

  

	 	•	 	to provide additional incentive to Employees, Directors and Consultants, and 

  

	 	•	 	to promote the success of the Company’s business. 

  
 Options granted under the Plan will be Nonstatutory Stock Options. Stock Purchase Rights may also be granted under the Plan. 
  
 2.    Definitions.    As used
herein, the following definitions shall apply: 
  
 (a)    “Administrator” means the Board or any of its Committees as shall be administering the Plan, in accordance with Section 4 of the Plan. 
  
 (b)    “Applicable
Laws” means the requirements relating to the administration of stock option plans under U. S. state corporate laws, U.S. federal and state securities laws, the Code, any stock exchange or quotation system on which the Common Stock is listed
or quoted and the applicable laws of any foreign country or jurisdiction where Options or Stock Purchase Rights are, or will be, granted under the Plan. 
  
 (c)    “Board” means the Board of Directors of the Company. 
  
 (d)    “Cause” shall
mean (i) an act of personal dishonesty taken by the Optionee in connection with his or her responsibilities as a Service Provider and intended to result in substantial personal enrichment of the Optionee, (ii) Optionee being convicted of a felony,
(iii) a willful act by the Optionee which constitutes gross misconduct and which is injurious to the Company, (iv) following delivery to the Optionee of a written demand for performance from the Company which describes the basis for the
Company’s reasonable belief that the Optionee has not substantially performed his duties, continued violations by the Optionee of the Optionee’s obligations to the Company which are demonstrably willful and deliberate on the
Optionee’s part. 
  
 (e)    “Change of Control” means the occurrence of any of the following events: 
  
 (i)  Any “person” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act) becomes the “beneficial
owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing fifty percent (50%) or more of the total voting power represented by the Company’s then outstanding voting
securities who is not already such as of the Effective Date; or 

 (ii)  The consummation of the sale or disposition by the Company of all or
substantially all the Company’s assets; or 
  
 (iii)  The consummation of a merger or consolidation of the Company with any other corporation, other than a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto
continuing to represent (either by remaining out-standing or by being converted into voting securities of the surviving entity or its parent) at least fifty percent (50%) of the total voting power represented by the voting securities of the Company
or such surviving entity or its parent outstanding immediately after such merger or consolidation; or 
  
 (iv)  A change in the composition of the Board occurring within a two-year period, as a result of which fewer than a majority of
the directors are Incumbent Directors. “Incumbent Directors” shall mean directors who either (A) are directors of the Company as of the Effective Date, or (B) are elected, or nominated for election, to the Board with the affirmative votes
of at least a majority of those directors whose election or nomination was not in connection with any transaction described in subsections (i), (ii), or (iii) above, or in connection with an actual or threatened proxy contest relating to the
election of directors to the Company. 
  
 Notwithstanding the foregoing, in no event shall either or both of the following events constitute a Change of Control: (i) the initial public offering of the Company’s securities pursuant to a registration statement filed under
Section 12 of the Exchange Act or (ii) the spin-off of the Company from 3Com pursuant to one or more transactions in which 3Com distributes eighty percent (80%) or more of its securities ownership of the Company to the shareholders of 3Com.

  
 (f)    “Code” means the Internal Revenue Code of 1986, as amended. 
  
 (g)    “Committee” means a committee of Directors appointed by the Board in accordance with Section 4
of the Plan. 
  
 (h)    “Common Stock” means the common stock of the Company. 
  
 (i)    “Company” means Palm, Inc., a Delaware corporation. 
  
 (j)    “Consultant”
means any person, including an advisor, engaged by the Company or a Parent or Subsidiary to render services to such entity. 
  
 (k)    “Director” means a member of the Board. 
  
 (l)    “Disability”
means total and permanent disability as defined in Section 22(e)(3) of the Code. 
  
 (m)    “Effective Date” means the effective date of this Plan as determined in accordance with
Section 7. 
  
 (n)    “Employee” means any person, including Officers and Directors, employed by the Company or any Parent or Subsidiary of the Company. A Service Provider shall not cease to be an Employee in the case
of (i) any leave of absence approved by the Company or (ii) transfers between locations of the Company or between the Company, its Parent, any Subsidiary, or any successor. Neither service as a Director nor payment of a director’s fee by the
Company shall be sufficient to constitute “employment” by the Company. 
  

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 (o)    “Exchange Act” means the Securities Exchange
Act of 1934, as amended. 
  
 (p)    “Fair Market Value” means, as of any date, the value of Common Stock determined as follows: 
  
 (i)    If the Common Stock is listed on any established stock exchange or a national market system, including without
limitation the Nasdaq National Market or The Nasdaq SmallCap Market of The Nasdaq Stock Market, its Fair Market Value shall be the closing sales price for such stock (or the closing bid, if no sales were reported) as quoted on such exchange or
system on the day of determination, as reported in The Wall Street Journal or such other source as the Administrator deems reliable; 
  
 (ii)    If the Common Stock is regularly quoted by a recognized securities dealer but selling prices are not reported,
the Fair Market Value of a Share of Common Stock shall be the mean between the high bid and low asked prices for the Common Stock on the day of determination, as reported in The Wall Street Journal or such other source as the Administrator
deems reliable; 
  
 (iii)    In the absence of an established market for the Common Stock, the Fair Market Value shall be determined in good faith by the Administrator; or 
  
 (iv)    For purposes of Option grants made on the effective date of the Company’s
initial public offering of Common Stock, the Fair Market Value shall be the initial price to the public as set forth in the final prospectus included with the registration on Form S-1 filed with the Securities and Exchange Commission for such
offering. 
  
 (q)    “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. 
  
 (r)    “Nonstatutory Stock
Option” means an Option not intended to qualify as an Incentive Stock Option. 
  
 (s)    “Notice of Grant” means a written or electronic notice evidencing certain terms and conditions
of an individual Option or Stock Purchase Right grant. The Notice of Grant is part of the Option Agreement. 
  
 (t)    “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. 
  
 (u)    “Option” means a stock option granted pursuant to the Plan. 
  
 (v)    “Option Agreement” means an agreement between the Company and an Optionee evidencing the terms
and conditions of an individual Option grant. The Option Agreement is subject to the terms and conditions of the Plan. 
  

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 (w)    “Option Exchange Program” means a program
whereby outstanding Options are surrendered in exchange for Options with a lower exercise price. 
  
 (x)    “Optioned Stock” means the Common Stock subject to an Option or Stock Purchase Right.

  
 (y)    “Optionee” means the holder of an outstanding Option or Stock Purchase Right granted under the Plan. 
  
 (z)    “Parent” means a “parent corporation,” whether now or hereafter existing, as defined
in Section 424(e) of the Code. 
  
 (aa)    “Plan” means this 1999 Stock Plan. 
  
 (bb)    “Restricted Stock” means shares of Common Stock acquired pursuant to a grant of Stock
Purchase Rights under Section 11 of the Plan. 
  
 (cc)    “Restricted Stock Purchase Agreement” means a written agreement between the Company and the Optionee evidencing the terms and restrictions applying to stock purchased under a Stock Purchase
Right. The Restricted Stock Purchase Agreement is subject to the terms and conditions of the Plan and the Notice of Grant. 
  
 (dd)    “Rule 16b-3” means Rule 16b-3 of the Exchange Act or any successor to Rule 16b-3, as in
effect when discretion is being exercised with respect to the Plan. 
  
 (ee)    “Section 16(b) “ means Section 16(b) of the Exchange Act. 
  
 (ff)    “Service Provider” means an Employee, Director or Consultant. In addition, an individual who
receives an award under this Plan while an Employee, Director or Consultant, and who ceases to be an Employee, Director or Consultant, but who remains an employee, director or consultant to 3Com shall be deemed Service Provider for purposes of this
Plan. 
  
 (gg)    “Share” means a share of the Common Stock, as adjusted in accordance with Section 13 of the Plan. 
  
 (hh)    “Stock Purchase Right” means the right to purchase Common Stock pursuant to Section 11 of the
Plan, as evidenced by a Notice of Grant. 
  
 (ii)    “Subsidiary” means a “subsidiary corporation”, whether now or hereafter existing, as defined in Section 424(f) of the Code. 
  
 (jj)    “3Com” means
3Com Corporation, a Delaware corporation. 
  

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 3.    Stock Subject to the Plan.    Subject to the
provisions of Section 13 of the Plan, the maximum aggregate number of Shares that may be optioned and sold under the Plan is 6,409,520* Shares, plus an annual increase to be added the first day of the Company’s fiscal year equal to the lesser
of (i) 5% of the outstanding shares of Common Stock on such date, or (ii) an amount determined by the Board. The Shares may be authorized, but unissued, or reacquired Common Stock. 
  
 The number of shares of Common Stock which have been authorized for issuance under the Plan shall be appropriately increased
from time to time for any increase in the number of issued shares of Common Stock resulting from any adjustment pursuant to Section 13(c) hereof in connection with the transaction in which the Company’s interest in its PalmSource, Inc.
subsidiary is distributed to the Company’s stockholders. 
  
 If an Option or Stock Purchase Right expires or becomes unexercisable without having been exercised in full, or is surrendered pursuant to an Option Exchange Program, the unpurchased Shares which were subject thereto shall become available
for future grant or sale under the Plan (unless the Plan has terminated); provided, however, that Shares that have actually been issued under the Plan, whether upon exercise of an Option or Right, shall not be returned to the Plan and shall
not become available for future distribution under the Plan, except that if Shares of Restricted Stock are repurchased by the Company at their original purchase price, such Shares shall become available for future grant under the Plan. 

 
 4.    Administration of the Plan. 

 
 (a)    Procedure. 

 
 (i)    Multiple Administrative
Bodies.    Different Committees with respect to different groups of Service Providers may administer the Plan. 
  
 (ii)    Section 162(m).    To the extent that the Administrator determines it to be
desirable to qualify Options granted hereunder as “performance-based compensation” within the meaning of Section 162(m) of the Code, the Plan shall be administered by a Committee of two or more “outside directors” within the
meaning of Section 162(m) of the Code. 
  
 (iii)    Rule 16b-3.    To the extent desirable to qualify transactions hereunder as exempt under Rule 16b-3, the transactions contemplated hereunder shall be structured to satisfy the
requirements for exemption under Rule 16b-3. 
  
 (iv)    Other Administration.    Other than as provided above, the Plan shall be administered by (A) the Board or (B) a Committee, which committee shall be constituted to satisfy Applicable
Laws. 
  
 (b)    Powers of
the Administrator.    Subject to the provisions of the Plan, and in the case of a Committee, subject to the specific duties delegated by the Board to such Committee, the Administrator shall have the authority, in its
discretion: 
  
 (i)    to
determine the Fair Market Value; 

 * This number includes the 20 million
Shares initially reserved for issuance under the Plan, plus the Shares that have been added annually pursuant to this Section 3 since the first day of the Company’s 2001 fiscal year through May 31, 2003 as adjusted for the 1-for-20 reverse
stock split effected on October 15, 2002. 
  

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 (ii)    to select the Employees, Directors and Consultants to whom
Options and Stock Purchase Rights may be granted hereunder; 
  
 (iii)    to determine the number of shares of Common Stock to be covered by each Option and Stock Purchase Right granted hereunder; 
  
 (iv)    to approve forms of agreement for use under the Plan; 
  
 (v)    to determine the terms and
conditions, not inconsistent with the terms of the Plan, of any Option or Stock Purchase Right granted hereunder. Such terms and conditions include, but are not limited to, the exercise price, the time or times when Options or Stock Purchase Rights
may be exercised (which may be based on performance criteria), any vesting acceleration or waiver of forfeiture restrictions, and any restriction or limitation regarding any Option or Stock Purchase Right or the shares of Common Stock relating
thereto, based in each case on such factors as the Administrator, in its sole discretion, shall determine; 
  
 (vi)    to reduce the exercise price of any Option or Stock Purchase Right to the then current Fair Market Value if
the Fair Market Value of the Common Stock covered by such Option or Stock Purchase Right shall have declined since the date the Option or Stock Purchase Right was granted; 
  
 (vii)    to institute an Option Exchange Program; 
  
 (viii)    to construe and interpret the
terms of the Plan and awards granted pursuant to the Plan; 
  
 (ix)    to prescribe, amend and rescind rules and regulations relating to the Plan, including rules and regulations relating to sub-plans established for the purpose of qualifying for preferred
treatment under foreign laws; 
  
 (x)    to modify or amend each Option or Stock Purchase Right (subject to Section 15(c) of the Plan), including the discretionary authority to extend the post-termination exercisability period of Options longer than is
otherwise provided for in the Plan; 
  
 (xi)    to allow Optionees to satisfy withholding tax obligations by electing to have the Company withhold from the Shares to be issued upon exercise of an Option or Stock Purchase Right that number of Shares having a
Fair Market Value equal to (or less than) the minimum amount required to be withheld. The Fair Market Value of the Shares to be withheld shall be determined on the date that the amount of tax to be withheld is to be determined. All elections by an
Optionee to have Shares withheld for this purpose shall be made in such form and under such conditions as the Administrator may deem necessary or advisable; 
  
 (xii)    to authorize any person to execute on behalf of the Company any instrument required to effect the grant of an
Option or Stock Purchase Right previously granted by the Administrator; 
  
 (xiii)    to make all other determinations deemed necessary or advisable for administering the Plan. 
  

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 (c)    Effect of Administrator’s
Decision.    The Administrator’s decisions, determinations and interpretations shall be final and binding on all Optionees and any other holders of Options or Stock Purchase Rights. 
  
 5.    Eligibility.    Nonstatutory Stock Options and Stock Purchase Rights may be granted to Employees, Directors or Consultants. 
  
 6.    Limitations. 
  
 (a)    Neither the Plan nor any Option or Stock Purchase Right shall confer upon an
Optionee any right with respect to continuing the Optionee’s relationship as a Service Provider, nor shall they interfere in any way with the Optionee’s right or the Company’s or 3Com’s right, as applicable, to terminate such
relationship at any time, with or without cause. 
  
 (b)    The following limitations shall apply to grants of Options: 
  
 (i)    No Service Provider shall be granted, in any fiscal year of the Company, Options to purchase more than 150,000
Shares. 
  
 (ii)    In
connection with his or her initial service, a Service Provider may be granted Options to purchase up to an additional 300,000 Shares, which shall not count against the limit set forth in subsection (i) above. 
  
 (iii)    The foregoing limitations shall
be adjusted proportionately in connection with any change in the Company’s capitalization as described in Section 13. 
  
 (iv)    If an Option is cancelled in the same fiscal year of the Company in which it was granted (other than in
connection with a transaction described in Section 13), the cancelled Option will be counted against the limits set forth in subsections (i) and (ii) above. For this purpose, if the exercise price of an Option is reduced, the transaction will be
treated as a cancellation of the Option and the grant of a new Option. 
  
 7.    Term of Plan.    Subject to Section 19 of the Plan, the Plan shall become effective upon its adoption by the Board. It shall continue in effect for a term of ten (10) years unless
terminated earlier under Section 15 of the Plan. 
  
 8.    Term of Option.    The term of each Option shall be stated in the Option Agreement. 
  
 9.    Option Exercise Price and Consideration. 
  
 (a)    Exercise Price.    The per share exercise price for
the Shares to be issued pursuant to the exercise of an Option shall be determined by the Administrator; provided, however, that in the case of a Nonstatutory Stock Option intended to qualify as “performance-based compensation” within the
meaning of Section 162(m) of the Code, the per Share exercise price shall be no less than 100% of the Fair Market Value per Share on the date of grant. 
  
 (b)    Waiting Period and Exercise Dates.    At the time an Option is granted, the
Administrator shall fix the period within which the Option may be exercised and shall determine any conditions that must be satisfied before the Option may be exercised. 
  

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 (c)    Form of Consideration.    The
Administrator shall determine the acceptable form of consideration for exercising an Option, including the method of payment. Such consideration may consist entirely of: 
  
 (i)    cash; 
  
 (ii)    check; 
  
 (iii)    promissory note; 
  
 (iv)    other Shares which (A) in the case of Shares acquired upon exercise of an
option, have been owned by the Optionee for more than six months on the date of surrender, and (B) have a Fair Market Value on the date of surrender equal to the aggregate exercise price of the Shares as to which said Option shall be exercised;

  
 (v)    consideration
received by the Company under a cashless exercise program implemented by the Company in connection with the Plan; 
  
 (vi)    a reduction in the amount of any Company liability to the Optionee, including any liability attributable to
the Optionee’s participation in any Company-sponsored deferred compensation program or arrangement; 
  
 (vii)    any combination of the foregoing methods of payment; or 
  
 (viii)    such other consideration and
method of payment for the issuance of Shares to the extent permitted by Applicable Laws. 
  
 10.    Exercise of Option. 
  
 (a)    Procedure for Exercise; Rights as a Shareholder.    Any Option granted hereunder
shall be exercisable according to the terms of the Plan and at such times and under such conditions as determined by the Administrator and set forth in the Option Agreement. Unless the Administrator provides otherwise, vesting of Options granted
hereunder shall be tolled during any unpaid leave of absence. An Option may not be exercised for a fraction of a Share. 
  
 An Option shall be deemed exercised when the Company receives: (i) written or electronic notice of exercise (in accordance with the Option
Agreement) from the person entitled to exercise the Option, and (ii) full payment for the Shares with respect to which the Option is exercised. Full payment may consist of any consideration and method of payment authorized by the Administrator and
permitted by the Option Agreement and the Plan. Shares issued upon exercise of an Option shall be issued in the name of the Optionee or, if requested by the Optionee, in the name of the Optionee and his or her spouse. Until the Shares are issued (as
evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company), no right to vote or receive dividends or any other rights as a shareholder shall exist with respect to the Optioned Stock,
notwithstanding the exercise of the Option. The Company shall issue (or cause to be issued) such Shares promptly after the Option is exercised. No adjustment will be made for a dividend or other right for which the record date is prior to the date
the Shares are issued, except as provided in Section 13 of the Plan. 
  

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 Exercising an Option in any manner shall decrease the number of Shares thereafter
available, both for purposes of the Plan and for sale under the Option, by the number of Shares as to which the Option is exercised. 
  
 (b)    Termination of Relationship as a Service Provider.    If an Optionee ceases to be a
Service Provider, other than upon the Optionee’s death or Disability, the Optionee may exercise his or her Option within such period of time as is specified in the Option Agreement to the extent that the Option is vested on the date of
termination (but in no event later than the expiration of the term of such Option as set forth in the Option Agreement). In the absence of a specified time in the Option Agreement, the Option shall remain exercisable for three (3) months following
the Optionee’s termination. If, on the date of termination, the Optionee is not vested as to his or her entire Option, the Shares covered by the unvested portion of the Option shall revert to the Plan. If, after termination, the Optionee does
not exercise his or her Option within the time specified by the Administrator, the Option shall terminate, and the Shares covered by such Option shall revert to the Plan. 
  
 (c)    Disability of Optionee.    If an Optionee ceases to be
a Service Provider as a result of the Optionee’s Disability, the Optionee may exercise his or her Option within such period of time as is specified in the Option Agreement to the extent the Option is vested on the date of termination (but in no
event later than the expiration of the term of such Option as set forth in the Option Agreement). In the absence of a specified time in the Option Agreement, the Option shall remain exercisable for twelve (12) months following the Optionee’s
termination. If, on the date of termination, the Optionee is not vested as to his or her entire Option, the Shares covered by the unvested portion of the Option shall revert to the Plan. If, after termination, the Optionee does not exercise his or
her Option within the time specified herein, the Option shall terminate, and the Shares covered by such Option shall revert to the Plan. 
  
 (d)    Death of Optionee.    If an Optionee dies while a Service Provider, the Option may
be exercised within such period of time as is specified in the Option Agreement (but in no event later than the expiration of the term of such Option as set forth in the Notice of Grant) but only to the extent that the Option is vested on the date
of death. In the absence of a specified time in the Option Agreement, the Option shall remain exercisable for twelve (12) months following the Optionee’s death. The Option may be exercised by the Optionee’s designated beneficiary, provided
such beneficiary has been designated prior to Optionee’s death in a form acceptable by the Administrator. If no such beneficiary has been designated by the Optionee, then such Option may be exercised within the applicable time period by the
personal representative of the Optionee’s estate or by the person or persons to whom the Option is transferred pursuant to the Optionee’s will or in accordance with the laws of descent and distribution. If, at the time of death, the
Optionee is not vested as to his or her entire Option, the Shares covered by the unvested portion of the Option shall immediately revert to the Plan. If the Option is not so exercised within the time specified herein, the Option shall terminate, and
the Shares covered by such Option shall revert to the Plan. 
  
 (e)    Buyout Provisions.    The Administrator may at any time offer to buy out for a payment in cash or Shares an Option previously granted based on such terms and
conditions as the Administrator shall establish and communicate to the Optionee at the time that such offer is made. 
  

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 11.    Stock Purchase Rights. 
  
 (a)    Rights to
Purchase.    Stock Purchase Rights may be issued either alone, in addition to, or in tandem with other awards granted under the Plan and/or cash awards made outside of the Plan; provided, however that in no event may Stock
Purchase Rights be issued in any fiscal year of the Company for more than ten percent (10%) of the total Shares available for issuance hereunder, in the aggregate, on the first day of such fiscal year. After the Administrator determines that it will
offer Stock Purchase Rights under the Plan, it shall advise the offeree in writing or electronically, by means of a Notice of Grant, of the terms, conditions and restrictions related to the offer, including the number of Shares that the offeree
shall be entitled to purchase, the price to be paid, and the time within which the offeree must accept such offer. The offer shall be accepted by execution of a Restricted Stock Purchase Agreement in the form determined by the Administrator.

  
 (b)    Repurchase
Option.    Unless the Administrator determines otherwise, the Restricted Stock Purchase Agreement shall grant the Company a repurchase option exercisable upon the voluntary or involuntary termination of the purchaser’s
service with the Company for any reason (including death or Disability). The purchase price for Shares repurchased pursuant to the Restricted Stock Purchase Agreement shall be the original price paid by the purchaser and may be paid by cancellation
of any indebtedness of the purchaser to the Company. The repurchase option shall lapse at a rate determined by the Administrator. 
  
 (c)    Other Provisions.    The Restricted Stock Purchase Agreement shall contain such
other terms, provisions and conditions not inconsistent with the Plan as may be determined by the Administrator in its sole discretion. 
  
 (d)    Rights as a Shareholder.    Once the Stock Purchase Right is exercised, the
purchaser shall have the rights equivalent to those of a shareholder, and shall be a shareholder when his or her purchase is entered upon the records of the duly authorized transfer agent of the Company. No adjustment will be made for a dividend or
other right for which the record date is prior to the date the Stock Purchase Right is exercised, except as provided in Section 13 of the Plan. 
  
 12.    Transferability of Options and Stock Purchase Rights.    Unless determined otherwise by the
Administrator, an Option or Stock Purchase Right may not be sold, pledged, assigned, hypothecated, transferred, or disposed of in any manner other than by will or by the laws of descent or distribution and may be exercised, during the lifetime of
the Optionee, only by the Optionee. If the Administrator makes an Option or Stock Purchase Right transferable, such Option or Stock Purchase Right shall contain such additional terms and conditions as the Administrator deems appropriate. 

 
 13.    Adjustments Upon Changes in Capitalization,
Dissolution, Merger or Asset Sale. 
  
 (a)    Changes in Capitalization.    Subject to any required action by the shareholders of the Company, the number of shares of Common Stock which have been authorized for issuance under the
Plan, including Shares as to which no Options or Stock Purchase Rights have yet been granted or which have been returned to the Plan upon cancellation or expiration of an Option or Stock Purchase Right and the number of shares of Common Stock
covered by each outstanding Option and Stock Purchase Right, as well as the price per share of Common Stock covered by each such outstanding Option or Stock Purchase Right, shall be proportionately adjusted for any increase 

  

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or decrease in the number of issued shares of Common Stock resulting from a stock split, reverse stock split, stock dividend, combination or reclassification
of the Common Stock, or any other increase or decrease in the number of issued shares of Common Stock effected without receipt of consideration by the Company; provided, however, that conversion of any convertible securities of the Company shall not
be deemed to have been “effected without receipt of consideration.” Such adjustment shall be made by the Board, whose determination in that respect shall be final, binding and conclusive. Except as expressly provided herein, no issuance by
the Company of shares of stock of any class, or securities convertible into shares of stock of any class, shall affect, and no adjustment by reason thereof shall be made with respect to, the number or price of shares of Common Stock subject to an
Option or Stock Purchase Right. 
  
 (b)    Dissolution or Liquidation.    In the event of the proposed dissolution or liquidation of the Company, the Administrator shall notify each Optionee as soon as practicable prior to the
effective date of such proposed transaction. The Administrator in its discretion may provide for an Optionee to have the right to exercise his or her Option until ten (10) days prior to such transaction as to all of the Optioned Stock covered
thereby, including Shares as to which the Option would not otherwise be exercisable. In addition, the Administrator may provide that any Company repurchase option applicable to any Shares purchased upon exercise of an Option or Stock Purchase Right
shall lapse as to all such Shares, provided the proposed dissolution or liquidation takes place at the time and in the manner contemplated. To the extent it has not been previously exercised, an Option or Stock Purchase Right will terminate
immediately prior to the consummation of such proposed action. 
  
 (c)    Merger or Asset Sale.    In the event of a merger of the Company with or into another corporation, or the sale of substantially all of the assets of the Company,
each outstanding Option and Stock Purchase Right shall be assumed or an equivalent option or right substituted by the successor corporation or a Parent or Subsidiary of the successor corporation. In the event that the successor corporation refuses
to assume or substitute for the Option or Stock Purchase Right, the Optionee shall fully vest in and have the right to exercise the Option or Stock Purchase Right as to all of the Optioned Stock, including Shares as to which it would not otherwise
be vested or exercisable. If an Option or Stock Purchase Right becomes fully vested and exercisable in lieu of assumption or substitution in the event of a merger or sale of assets, the Administrator shall notify the Optionee in writing or
electronically that the Option or Stock Purchase Right shall be fully vested and exercisable for a period of fifteen (15) days from the date of such notice, and the Option or Stock Purchase Right shall terminate upon the expiration of such period.
For the purposes of this paragraph, the Option or Stock Purchase Right shall be considered assumed if, following the merger or sale of assets, the option or right confers the right to purchase or receive, for each Share of Optioned Stock subject to
the Option or Stock Purchase Right immediately prior to the merger or sale of assets, the consideration (whether stock, cash, or other securities or property) received in the merger or sale of assets by holders of Common Stock for each Share held on
the effective date of the transaction (and if holders were offered a choice of consideration, the type of consideration chosen by the holders of a majority of the outstanding Shares); provided, however, that if such consideration received in the
merger or sale of assets is not solely common stock of the successor corporation or its Parent, the Administrator may, with the consent of the successor corporation, provide for the consideration to be received upon the exercise of the Option or
Stock Purchase Right, for each Share of Optioned Stock subject to the Option or Stock Purchase Right, to be solely common stock of the successor corporation or its Parent equal in fair market value to the per share consideration received by holders
of Common Stock in the merger or sale of assets. 
  

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 Notwithstanding the foregoing, if an Optionee’s status as a Service Provider is terminated for
reasons other than Cause within twelve (12) months following a Change of Control, then the vesting and exercisability of each of the Optionee’s outstanding Options and Stock Purchase Rights shall partially accelerate upon such termination with
respect to fifty percent (50%) of the then unvested Shares subject to or acquired under each such Option or Stock Purchase Right. 
  
 14.    Date of Grant.    The date of grant of an Option or Stock Purchase Right shall be, for all purposes,
the date on which the Administrator makes the determination granting such Option or Stock Purchase Right, or such other later date as is determined by the Administrator. Notice of the determination shall be provided to each Optionee within a
reasonable time after the date of such grant. 
  
 15.    Amendment and Termination of the Plan. 
  
 (a)    Amendment and Termination.    The Board may at any time amend, alter, suspend or
terminate the Plan. 
  
 (b)    Shareholder Approval.    The Company shall obtain shareholder approval of any Plan amendment to the extent necessary and desirable to comply with Applicable Laws. 
  
 (c)    Effect of Amendment or
Termination.    No amendment, alteration, suspension or termination of the Plan shall impair the rights of any Optionee, unless mutually agreed otherwise between the Optionee and the Administrator, which agreement must be in
writing and signed by the Optionee and the Company. Termination of the Plan shall not affect the Administrator’s ability to exercise the powers granted to it hereunder with respect to Options granted under the Plan prior to the date of such
termination. 
  
 16.    Conditions Upon
Issuance of Shares. 
  
 (a)    Legal Compliance.    Shares shall not be issued pursuant to the exercise of an Option or Stock Purchase Right unless the exercise of such Option or Stock Purchase Right and the issuance
and delivery of such Shares shall comply with Applicable Laws and shall be further subject to the approval of counsel for the Company with respect to such compliance. 
  
 (b)    Investment Representations.    As a condition to the
exercise of an Option or Stock Purchase Right, the Company may require the person exercising such Option or Stock Purchase Right to represent and warrant at the time of any such exercise that the Shares are being purchased only for investment and
without any present intention to sell or distribute such Shares if, in the opinion of counsel for the Company, such a representation is required. 
  
 17.    Inability to Obtain Authority.    The inability of the Company to obtain authority from any
regulatory body having jurisdiction, which authority is deemed by the Company’s counsel to be necessary to the lawful issuance and sale of any Shares hereunder, shall relieve the Company of any liability in respect of the failure to issue or
sell such Shares as to which such requisite authority shall not have been obtained. 
  

 -12- 

 18.    Reservation of Shares.    The Company, during the
term of this Plan, will at all times reserve and keep available such number of Shares as shall be sufficient to satisfy the requirements of the Plan. 
  
 19.    Shareholder Approval.    The Plan shall be subject to approval by the shareholders of the Company
within twelve (12) months after the date the Plan is adopted. Such shareholder approval shall be obtained in the manner and to the degree required under Applicable Laws. 
  

 -13-1990 Employee Stock Purchase Plan, as amended

 EXHIBIT 4.1 
  

SUN MICROSYSTEMS, INC. 
 1990
EMPLOYEE STOCK PURCHASE PLAN 
 (Amended and Restated as of July 23, 2003) 
  
 The following constitutes the provisions of the 1990 Employee Stock
Purchase Plan of Sun Microsystems, Inc. 
  
 1.    Purpose.    The purpose of the Plan is to provide Employees of the Company and its Designated Subsidiaries with an opportunity to purchase Common Stock through accumulated payroll
deductions or other approved contributions. The Plan consists of two programs, which are referred to as the U.S. Program and the Global Program. The U.S. Program is intended to qualify as an employee stock purchase plan under Code Section 423(b) and
the Global Program is not intended to so qualify. 
  
 2.    Definitions. 
  

	 	(a)	“Board” shall mean the Board of Directors of the Company. 

  

	 	(b)	“Code” shall mean the Internal Revenue Code of 1986, as amended. 

  
        (c)      “Committee” shall mean a
Committee designated by the Board to administer the Plan. If at any time no Committee shall be in office, then the Board shall exercise the functions of the Committee specified in the Plan and any references herein to the Committee shall be
construed as references to the Board. 
  

	 	(d)	“Common Stock” shall mean the Company’s common stock, $0.00067 par value (as adjusted from time to time). 

  

	 	(e)	“Company” shall mean Sun Microsystems, Inc., a Delaware corporation. 

  
        (f)      “Compensation” shall mean
(i) for Offering Periods beginning prior to November 1, 2003, regular straight time gross earnings, variable compensation for field sales personnel, certain incentive bonuses, payments for overtime, shift premiums, lead pay and automobile
allowances, but shall exclude other compensation, and (ii) for Offering Periods beginning on or after November 1, 2003, regular straight time gross earnings, variable compensation for field sales personnel, broad-based Company bonus programs,
payments for overtime, shift premiums and lead pay, but shall exclude other compensation. 
  
       (g)        “Corporate Affiliate” shall mean (i) for purposes of the U.S. Program any parent or subsidiary corporation of the
Company (as determined in accordance with Code Section 424), whether now existing or subsequently established, (ii) for purposes of the Global Program any affiliate controlling the Company or controlled by the Company directly or indirectly through
one or more intermediaries. 
  
       (h)       “Designated Subsidiary” shall mean any Corporate Affiliate as may be authorized from time to time by the Board to extend the benefits of the
Plan to their Employees. 
  
       (i)       “Employee” shall mean, subject to Section 11(c), any employee (including officers and directors who are also employees) of the Company or a
Designated Subsidiary. 
  
       (j)       “Enrollment Date” shall mean the first Trading Day of each Offering Period. 
  
       (k)       “Exercise Date” shall mean
the last Trading Day of each Exercise Period. 

       (l)       “Exercise
Period” shall mean a period commencing on an Enrollment Date and which is of such duration as the Committee shall determine. 
  
       (m)       “Fair Market Value” per share of Common Stock on any
relevant date shall be determined in accordance with the following provisions: 
  
                     (i)     If the Common Stock is at the time traded on the Nasdaq National
Market, then the Fair Market Value shall be the U.S. Dollar closing selling price per share of Common Stock on the date in question, as such price is reported by the National Association of Securities Dealers on the Nasdaq National Market and
published in The Wall Street Journal. If there is no closing selling price for the Common Stock on the date in question, then the Fair Market Value shall be the U.S. Dollar closing selling price on the last preceding date for which such
quotation exists. 
  
                     (ii)    If the Common Stock is at the time listed on any Stock Exchange, then the Fair Market Value
shall be the U.S. Dollar closing selling price per share of Common Stock on the date in question on the Stock Exchange determined by the Committee to be the primary market for the Common Stock, as such price is officially quoted in the composite
tape of transactions on such exchange and published in The Wall Street Journal. If there is no closing selling price for the Common Stock on the date in question, then the Fair Market Value shall be the U.S. Dollar closing selling price on the last
preceding date for which such quotation exists. 
  
       (n)       “Global Program” shall mean the component of the Plan intended to provide Employees of the Company and its Designated Subsidiaries who are not
subject to United States income tax the opportunity to purchase Common Stock through accumulated payroll deductions or other approved contributions. This component of the Plan is not intended to qualify for special tax treatment under Code Section
423. 
  
       (o)       “Offering Period” shall mean the period beginning with the date an option is granted under the Plan and ending with the date determined by the
Committee. During the term of the Plan, the duration of each Offering Period shall be determined from time to time by the Committee, provided that no Offering Period may exceed 27 months in duration. If determined by the Committee, an Offering
Period may include one or more Exercise Periods. 
  
       (p)       “Plan” shall mean this 1990 Employee Stock Purchase Plan and shall apply to both the U.S. Program and the Global Program. 
  
       (q)       “Purchase Price” shall mean an amount equal to 85% of the Fair Market Value of a share of Common Stock on the Enrollment Date or on the
Exercise Date, whichever is lower; provided however, that the Purchase Price may be adjusted by the Committee pursuant to Section 20. 
  
       (r)       “Reserves” shall mean the number of shares of Common
Stock covered by each option under the Plan which has not yet been exercised and the number of shares of Common Stock which have been authorized for issuance under the Plan but not yet placed under option. 
  
       (s)       “Stock Exchange” shall mean any national securities exchange registered under Section 6 of the Securities Exchange Act of 1934, as amended,
including, but not limited to the American Stock Exchange and the New York Stock Exchange. 
  
       (t)       “Subsidiary” shall mean a corporation, domestic or foreign, of which not less than 50% of the voting stock is held by
the Company or by a Subsidiary, whether or not such corporation now exists or is hereafter organized or acquired by the Company or by a Subsidiary. 
  
       (u)       “Trading Day” shall mean a day on which the Common Stock
is open for trading on a Stock Exchange or the Nasdaq National Market, as the case may be. 

       (v)       “U.S.
Program” shall mean the component of the Plan intended to provide Employees of the Company and its Designated Subsidiaries who are subject to United States income tax with the opportunity to purchase Common Stock through accumulated payroll
deductions or other approved contributions. This component of the Plan is intended to qualify for special tax treatment under Code Section 423(b). 
  
 3.    Stock Subject to the Plan. 
  
       (a)       Subject to the provisions of Section 13 of the Plan, the total number of
shares of Common Stock reserved and available for issuance pursuant to the Plan shall not exceed 616,400,000 shares, including an increase of 170,000,000 shares authorized by the Board on July 23, 2003, subject to stockholder approval at the 2003
Annual Meeting of Stockholders to be held on November 13, 2003. The shares purchasable under the Plan may be either authorized but unissued or reacquired Common Stock, including shares of Common Stock purchased on the open market. 
  
       (b)       A Plan participant will have no voting, dividend, or other stockholder rights with respect to any shares of Common Stock covered by his or her option until
such option has been exercised and such shares have been purchased and delivered to the participant as provided in Section 10. 
  
       (c)       Shares of Common Stock to be delivered to a participant under the Plan
will be registered in the name of the participant. 
  
 4.    Eligibility.    Any Employee of the Company or a Designated Subsidiary is eligible to participate in an Offering Period (as hereinafter defined) under the Plan except the following:

  
       (a)       Employees who are not employed by the Company or a Designated Subsidiary on the fifteenth (15th) day of the month preceding the beginning of such Offering
Period; 
  
       (b)       Employees who would, by virtue of their participation in such Offering Period, be participating simultaneously in more than one Offering Period under the Plan;

  
       (c)       Unless otherwise prohibited by the laws of the local jurisdiction, Employees who are customarily employed for less than twenty (20) hours per week or who are
customarily employed for less than five (5) months in a calendar year; and 
  
       (d)       Notwithstanding any provision of the Plan to the contrary, no Employee shall be granted an option under the Plan (i) to the extent that,
immediately after such grant, such Employee (or any other person whose stock would be attributed to such Employee pursuant to Code Section 424(d)) would own capital stock of the Company or any Corporate Affiliate and/or hold outstanding options to
purchase such stock possessing five percent (5%) or more of the total combined voting power or value of all classes of capital stock of the Company or any Corporate Affiliate, or (ii) to the extent that his or her rights to purchase stock under all
employee stock purchase plans (as defined in Code Section 423) of the Company or any Corporate Affiliate accrues at a rate which exceeds $25,000 worth of Common Stock (determined on the basis of the Fair Market Value of the stock at the time such
option is granted) for each calendar year in which such option is outstanding at any time. 
  
 5.    Offering Periods.    The Plan shall be implemented by consecutive Offering Periods, each consisting of such number of Exercise Periods as the Committee shall
determine, and shall continue until terminated in accordance with Section 21 hereof. The first Offering Period shall commence on a date to be determined by the Committee. The Committee shall have the power to change the duration of Offering Periods
and Exercise Periods with respect to future offerings without stockholder approval if such change is announced at least 15 days prior to the scheduled beginning of the first Offering Period and Exercise Period to be affected. 
  
 6.    Participation. 

       (a)       An Employee who is
eligible under Section 4 of the Plan may become a participant in any Offering Period under the Plan only by completing a subscription agreement authorizing payroll deductions or other approved contributions in form and substance satisfactory to the
Committee and filing it with the Company during the open enrollment period prior to the applicable Enrollment Date, unless a later time for filing the subscription agreement is set by the Committee for all eligible Employees with respect to a given
Offering Period. 
  
       (b)       Payroll deductions or other approved contributions for a participant shall commence on the first payday following the Enrollment Date and shall continue until
terminated by the participant as provided in Section 11. 
  
 7.    Payroll Deductions. 
  
       (a)       Except as otherwise prohibited by the laws of the local jurisdiction, at the time a participant files his or her subscription agreement, he or she shall elect
to have payroll deductions made (under this Plan and all employee stock purchase plans of the Company) on each payday during the Offering Period in an amount not exceeding a total of ten percent (10%) (or such other percentage as the Committee may
determine) of the Compensation which he or she receives on each payday during the Offering Period, and the aggregate of such payroll deductions (under this Plan and all employee stock purchase plans of the Company) during the Offering Period shall
not exceed a total of ten percent (10%) (or such other percentage as the Committee may determine) of the participant’s Compensation during said Offering Period. 
  
       (b)       In jurisdictions where payroll deductions
are not permitted under local law, the eligible Employees may participate in the Plan by making contributions in the form that is acceptable and approved by the Board or Committee. Other approved contributions are subject to the same restrictions as
set forth in this Section 7. 
  
       (c)       Only payroll deductions or other approved contributions made for a participant shall be credited to his or her account under the Plan and will be withheld in
whole percentages of Compensation only. 
  
       (d)       A participant may discontinue his or her participation in the Plan as provided in Section 11. A participant’s subscription agreement shall remain in
effect for successive Offering Periods unless terminated as provided in Section 11. To increase or decrease the rate of payroll deductions or other approved contributions (within the limitations of Section 7(a)), (i) with respect to the next
Offering Period, a participant must complete and file with the Company during the open enrollment period prior to the Enrollment Date for such Offering Period, or (ii) with respect to the next Exercise Period within the same Offering Period, a
participant must complete and file with the Company prior to the commencement of the new Exercise Period within such Offering Period, a new subscription agreement authorizing a change in the payroll deduction or other approved contributions rate.
Except in the case of authorized leaves of absence (which shall be governed by Section 11(c) below), such change in rate shall be effective at the beginning of the next Offering Period or Exercise Period, as the case may be, following the
Company’s receipt of the new subscription agreement. 
  
       (e)       Notwithstanding the foregoing, to the extent necessary to comply with Code Section 423(b)(8) and Section 4(d) herein, a participant’s payroll deductions
or other approved contributions may be decreased to zero percent (0%) by the Company at such time during any Exercise Period. Payroll deductions shall recommence at the rate provided in such participant’s subscription agreement at the beginning
of the first Exercise Period which is scheduled to end in the following calendar year, unless terminated by the participant as provided in Section 11. 
  
        (f)       The Company will assess its requirements regarding tax, social
insurance and payroll tax withholding (collectively the “Tax-Related Items”) in connection with the participant’s participation in the Plan, including the grant of purchase rights, the exercise of such purchase rights, or the
subsequent sale of shares of Common Stock acquired under the Plan. Prior to each of the aforementioned events, each participant must make adequate arrangements satisfactory to the Company and/or the Designated Subsidiary employing the participant to
satisfy all withholding obligations of the Company and/or the Designated Subsidiary employing the participant. At such time, the 

 Company and/or Designated Subsidiary may withhold all applicable Tax-Related Items (including any withholding required to
make available to the Company or any Designated Subsidiary any tax deductions or benefit attributable to the sale or early disposition by the participant of Common Stock under the Plan) and the Company and/or Designated Subsidiary may sell or
arrange for the sale of Common Stock purchased by the participant to meet the minimum withholding obligations for Tax-Related Items. The Company and/or the Designated Subsidiary employing the participant will return to the participant any estimated
withholding which is collected but not required in satisfaction of the Tax-Related Items. To the extent that a participant is unable to satisfy the payment of Tax-Related Items by the foregoing methods, the participant shall pay to the Company or
the Designated Subsidiary employing the participant any amount of the Tax-Related Items that such entity may be required to withhold as a result of participant’s participation in the Plan. 
  
 8.    Grant of Option. 
  
       (a)       On the Enrollment Date of each Offering Period, each eligible participant in such Offering Period shall be granted an option to purchase on each Exercise Date
during such Offering Period (at the applicable Purchase Price) up to the number of shares of Common Stock determined by dividing such participant’s payroll deductions or other approved contributions accumulated prior to or on such Exercise Date
and retained in the participant’s account as of the Exercise Date by the applicable Purchase Price. Such purchase shall be subject to the limitations set forth in Sections 4(d), 7(e) and 13 hereof. 
  
       (b)       For Offering Periods commencing after July 23, 2003, no participant shall be permitted to purchase more than twenty-five thousand (25,000) shares of Common
Stock on any one Exercise Date, subject to any adjustments pursuant to Section 20. In addition, for Offering Periods commencing after July 23, 2003, the maximum number of shares of Common Stock that may be purchased in total by all participants on
any one Exercise Date shall not exceed forty-five million (45,000,000) shares, subject to any adjustments pursuant to Section 20. The Committee may, for subsequent Offering Periods, increase or decrease, in its absolute discretion, the maximum
number of shares of Common Stock that may be purchased per participant or in total by all participants on each Exercise Date of such Offering Period. 
  
       (c)       Exercise of the option shall occur as provided in Section 9, unless the
participant has withdrawn pursuant to Section 11, and such option shall expire on the last day of the Offering Period. 
  
 9.    Exercise of Option.    Unless a participant withdraws from the Plan as provided in Section 11 below,
his or her option for the purchase of shares of Common Stock will be exercised automatically on the Exercise Date, and the maximum number of full shares subject to option shall be purchased for such participant at the applicable Purchase Price with
the accumulated payroll deductions or other approved contributions in his or her account, subject to the other limitations in the Plan. No fractional shares will be purchased. Any payroll deductions or other approved contributions left over in a
participant’s account after the Exercise Date shall be returned to the participant. During a participant’s lifetime, a participant’s option to purchase Common Stock hereunder is exercisable only by him or her. 
  
 10.    Delivery.    As
promptly as practicable after each Exercise Date on which a purchase of Common Stock occurs, the Company shall arrange the delivery to each participant, as appropriate, the shares purchased upon exercise of his or her option in a form determined by
the Committee in its sole discretion. 
  
 11.    Withdrawal; Termination of Employment. 
  
 (a) A participant may withdraw all (but not less than all) the payroll deductions credited to his or her account and not yet used to exercise his or her option under the Plan at any time prior to the close of an
Exercise Period by (i) providing a written notice of withdrawal in the form prescribed by the Committee for such purpose, or (ii) following an electronic or other withdrawal procedure prescribed by the Committee, provided such procedure is legally
recognized by the laws of the local jurisdiction. Such notice shall state whether the participant is withdrawing only from the applicable Exercise Period or entirely from the Offering Period. All of the participant’s payroll deductions or

 other approved contributions credited to his or her account will be paid to such participant as promptly as practicable
after receipt of notice of withdrawal and such participant’s option for the current Offering Period or Exercise Period (as specified in the notice) will be automatically terminated, and no further payroll deductions or other approved
contributions for the purchase of shares of Common Stock will be made during the Offering Period or Exercise Period, as applicable. If a participant withdraws from an Offering Period, payroll deductions will not resume at the beginning of the
succeeding Offering Period unless the participant delivers to the Company a new subscription agreement during the open enrollment period preceding the commencement of a subsequent Offering Period in accordance with Section 6. If a participant
withdraws from an Exercise Period, payroll deductions or other approved contributions will not resume at the beginning of any succeeding Exercise Period within the same Offering Period unless written notice is delivered to the Company in form and
substance satisfactory to the Committee within the open enrollment period preceding the commencement of the Exercise Period directing the Company to resume payroll deductions. 
  
       (b)       Upon a participant’s ceasing to be an
Employee for any reason, the payroll deductions or other approved contributions credited to such participant’s account during the Offering Period but not yet used to exercise the option will be returned to such participant or, in the case of
his or her death, to the person or persons entitled thereto under Section 16, and such participant’s option will be automatically terminated. 
  
       (c)       Subject to the laws of the local jurisdiction, in the event an
Employee’s customary employment with the Company or a Designated Subsidiary is reduced below twenty (20) hours per week or five (5) months per calendar year during an Offering Period, he or she will be deemed to have elected to withdraw from
the Plan and the payroll deductions or other approved contributions credited to his or her account will be returned to such participant and such participant’s option terminated; provided that (i) if an Employee shall take an unpaid leave of
absence approved by the Company of more than thirty (30) days during an Offering Period in which the Employee is a participant, and the Employee’s right to re-employment is not guaranteed by statute or contract, he or she will be deemed to have
withdrawn from the applicable Exercise Period on the thirty-first (31st) day of such leave, (ii) if an Employee shall take a paid leave of absence approved by the Company of more than ninety (90) days during an Offering Period in which the Employee
is a participant, and the Employee’s right to re-employment is not guaranteed by statute or contract, he or she will be deemed to have withdrawn from the applicable Exercise Period on the earlier of (aa) the ninety-first (91st) day if the
Employee is paid for the entire ninety (90) day leave, or (bb) the last day upon which the Employee is paid provided he or she is paid for at least thirty (30) days; and (iii) if an Employee shall take a paid or unpaid leave of absence of any
duration during an Offering Period, and the Employee’s right to re-employment is guaranteed by statute or contract, he or she shall not be deemed to have withdrawn from the applicable Exercise Period and his or her option for the purchase of
shares of Common Stock will be exercised in accordance with Section 9 hereof. On the date, if any, upon which the Employee shall be deemed to have withdrawn from the applicable Exercise Period, the payroll deductions or other approved contributions
credited to his or her account will be returned to him or her, but he or she shall continue to be a participant in the applicable Offering Period during such authorized leave of absence until and unless such authorized leave of absence terminates
without his or her returning to his or her employment with the Company. 
  
       (d)       A participant’s withdrawal from an Exercise Period (but not from the Offering Period) will not have any effect upon his or her ability to participate in
subsequent Exercise Periods during the same Offering Period. However, a participant’s withdrawal from an Offering Period makes him or her ineligible for future participation in that Offering Period. Withdrawal from an Exercise Period or from an
Offering Period will not have any effect upon a participant’s eligibility to participate in a succeeding Offering Period of the Plan or in any similar plan which may hereafter be adopted by the Company, provided that a participant may elect to
participate in a succeeding Offering Period only during the open enrollment period for such Offering Period and may not participate concurrently in more than one Offering Period. 
  
       (e)       Notwithstanding the foregoing, unless
otherwise determined by the Committee, if the Fair Market Value on the Enrollment Date of an Offering Period in which a participant is enrolled (the “Current Offering Period”) is greater than the Fair Market Value on the Enrollment Date of
a succeeding Offering Period (the “Succeeding Offering Period”), the participant’s enrollment in the Current Offering Period automatically will be terminated immediately 

 following the exercise of his or her option under the Current Offering Period on the Exercise Date that occurs
immediately prior to the Enrollment Date of the Succeeding Offering Period, and the participant automatically will be enrolled in the Succeeding Offering Period, unless the participant elects to remain in the former Offering Period by delivery to
the Company of a written notice in form and substance satisfactory to the Committee. 
  
 12.    Interest.    Unless otherwise required by the laws of the local jurisdiction, no interest shall accrue on the payroll deductions of a participant in the Plan.

  
 13.    Stock. 
  
       (a)       The maximum number of shares of Common Stock which shall be made available for sale under the Plan, as set forth in Section 3 hereof, is subject to adjustment
upon changes in capitalization of the Company as provided in Section 20. 
  
       (b)       If the Committee determines that the total number of shares of Common Stock to be purchased pursuant to outstanding purchase rights on
any particular date exceed the number of shares then available for issuance under the Plan (an “over-subscription”), the Committee shall make a pro rata allocation of the available shares on a uniform and nondiscriminatory basis and the
payroll deductions of each participant, to the extent in excess of the aggregate purchase price payable for the Common Stock pro-rated to such individual, shall be refunded. 
  
 14.    Administration.    The Plan shall be administered by the Board or the
Committee appointed by the Board. The Committee shall consist of not less than two (2) persons (who are members of the Board), each of whom is an independent director. As used in this Plan, references to the “Committee” shall mean either
the Committee appointed by the Board to administer this Plan or the Board if no Committee has been established. Subject to the provisions of the Plan and the limitations of Code Section 423 or any successor provision in the Code, if applicable, all
questions of interpretation or application of the Plan shall be determined by the Committee and its decisions shall be final and binding upon all participants. Members of the Committee shall receive no compensation for their services in connection
with the administration of the Plan, other than standard fees as established from time to time by the Board for services rendered by Board members serving on Board committees. All expenses incurred in connection with the administration of the Plan
shall be paid by the Company. 
  
 15.    Rules for Foreign Jurisdictions. 
  
       (a)       The Board or Committee may adopt rules or procedures relating to the operation and administration of the Plan to accommodate the
specific requirements of the law and procedures of foreign jurisdictions. Without limiting the generality of the foregoing, the Board or Committee is specifically authorized to adopt rules and procedures regarding handling of payroll deductions or
other approved contributions, payment of interest, conversion of local currency, payroll tax, withholding procedures and handling of stock certificates that vary with local requirements. 
  
       (b)       The Board or Committee may also adopt
rules, procedures or sub-plans applicable to particular Designated Subsidiaries or jurisdiction as part of the Global Program. The rules of such sub-plans under the Global Program may take precedence over other provisions of this Plan, with the
exception of Section 3, but unless otherwise superseded by the terms of such sub-plan, the provisions of the Plan shall govern the operation of such sub-plan. 
  

16.    Designation of Beneficiary. 
  

      (a)       A participant may file a written designation of a beneficiary who is
to receive any stock and cash, if any, from the participant’s account under the Plan in the event of such participant’s death subsequent to an Exercise Date on which the option is exercised but prior to delivery to such participant of such
stock and cash. In addition, a participant may file a written designation of a beneficiary who is to receive any cash from the participant’s account under the Plan in the event of such participant’s death prior to exercise of the option.
If a participant is married and the designated beneficiary is not the spouse, spousal consent shall be required for such designation to be effective. 

       (b)       Such designation of
beneficiary may be changed by the participant at any time by written notice. In the event of the death of a participant and in the absence of a beneficiary validly designated under the Plan who is living at the time of such participant’s death,
the Company shall deliver such stock and/or cash to the executor or administrator of the estate of the participant, or if no such executor or administrator has been appointed (to the knowledge of the Company), the Company, in its discretion, may
deliver such stock and/or cash to the spouse or to any one or more dependents or relatives of the participant, or if no spouse, dependent or relative is known to the Company, then to such other person as the Company may designate. 
  
       (c)       All beneficiary designations herein shall be made in such form and manner as the Committee may prescribe from time to time. 
  
 17.    Transferability.    Neither payroll deductions nor other approved contributions credited to a participant’s account nor any rights with regard to the exercise of an option or to
receive shares of Common Stock under the Plan may be assigned, transferred, pledged or otherwise disposed of in any way (other than by will, the laws of descent and distribution or as provided in Section 16 hereof) by the participant. Any such
attempt at assignment, transfer, pledge or other disposition shall be without effect, except that the Company may treat such act as an election to withdraw from an Offering Period in accordance with Section 11. 
  
 18.    Use of Funds.    Except
as prohibited by the laws of a local jurisdiction, all payroll deductions or other approved contributions received or held by the Company under the Plan may be used by the Company for any corporate purpose, and the Company shall not be obligated to
segregate funds from such payroll deductions or other approved contributions. 
  
 19.    Reports.    Individual accounts will be maintained for each participant in the Plan. Statements of account will be given to participating Employees at least
annually, which statements will set forth the amounts of payroll deductions, the Purchase Price, the number of shares of Common Stock purchased and the remaining cash balance, if any. 
  
 20.    Adjustments Upon Changes in Capitalization, Dissolution, Liquidation, Merger or Asset
Sale. 
  
           (a)    Changes in Capitalization.    Subject to any required action by the stockholders of the Company, the Reserves, the price per
share of Common Stock covered by each outstanding option under the Plan which has not yet been exercised, and the numerical limits of Sections 3 and 8 shall be proportionately adjusted for any increase or decrease in the number of issued shares of
Common Stock resulting from a stock split, reverse stock split, stock dividend, combination or reclassification of the Common Stock, or any other increase or decrease in the number of shares of Common Stock effected without receipt of consideration
by the Company; provided, however, that conversion of any convertible securities of the Company shall not be deemed to have been “effected without receipt of consideration.” Such adjustment shall be made by the Committee, whose
determination in that respect shall be final, binding and conclusive. Except as expressly provided herein, no issuance by the Company of stock of any class, or securities convertible into stock of any class, shall affect, and no adjustment by reason
thereof shall be made with respect to, the number or price of shares of Common Stock subject to an option. 
  
           (b)    Dissolution or Liquidation.    In the
event of the proposed dissolution or liquidation of the Company, the Offering Period then in progress shall be shortened by setting a new Exercise Date (the “New Exercise Date”), and shall terminate immediately prior to the consummation of
such proposed action, unless otherwise provided by the Committee. The New Exercise Date shall be before the date of the Company’s proposed dissolution or liquidation. The Committee shall make its best efforts to notify each participant in
writing, at least ten (10) business days prior to the New Exercise Date, that the Exercise Date for the participant’s option has been changed to the New Exercise Date and that the participant’s option shall be exercised automatically on
the New Exercise Date, unless prior to such date the participant has withdrawn from the Offering Period as provided in Section 11. 

       (c)       Merger or Asset
Sale.    In the event of a proposed sale of all or substantially all of the assets of the Company, or the merger of the Company with or into another corporation, each option under the Plan shall be assumed or an equivalent
option shall be substituted by such successor corporation or a parent or subsidiary of such successor corporation, unless the Committee determines, in the exercise of its sole discretion and in lieu of such assumption or substitution, to shorten the
Offering Period (and, if applicable, the Exercise Period) then in progress by setting a new Exercise Date (the “New Exercise Date”) and any Offering Periods then in progress shall end on the New Exercise Date. The New Exercise Date shall
be before the date of the Company’s proposed sale or merger. If the Committee shortens the Offering Period (and the Exercise Period, if applicable) then in progress in lieu of assumption or substitution in the event of a merger or sale of
assets, the Committee shall make its best efforts to notify each participant in writing, at least ten (10) days prior to the New Exercise Date, that the Exercise Date for his or her option has been changed to the New Exercise Date and that his or
her option will be exercised automatically on the New Exercise Date, unless prior to such date he or she has withdrawn from the Offering Period or the Exercise Period as provided in Section 11. For purposes of this paragraph, an option granted under
the Plan shall be deemed to be assumed if, following the sale of assets or merger, the option confers the right to purchase, for each share of Common Stock subject to the option immediately prior to the sale of assets or merger, the consideration
(whether stock, cash or other securities or property) received in the sale of assets or merger by holders of Common Stock for each share of Common Stock held on the effective date of the transaction (and if such holders were offered a choice of
consideration, the type of consideration chosen by the holders of a majority of the outstanding shares of Common Stock); provided, however, that if such consideration received in the sale of assets or merger was not solely common stock of the
successor corporation or its parent (as defined in Code Section 424(e)), the Committee may, with the consent of the successor corporation and the participant, provide for the consideration to be received upon exercise of the option to be solely
common stock of the successor corporation or its parent equal in fair market value to the per share consideration received by holders of Common Stock in the sale of assets or merger. 
  
 21.    Amendment or Termination. 
  
         (a)    The Board may at any time and for any reason
amend or terminate the Plan to become effective following the close of any Exercise Period. However, the Plan may be amended or terminated immediately upon Board action, if and to the extent necessary to assure that the Company will not recognize,
for financial reporting purposes, any compensation expense in connection with the shares of Common Stock offered for purchase under the Plan, should the financial accounting rules applicable to the Plan be subsequently revised so as to require the
Company to recognize a compensation expense in the absence of such amendment or termination. Except as provided in Section 20 or herein, no such termination can affect options previously granted, provided that an Offering Period may be terminated by
the Committee on any Exercise Date if the Committee determines that the termination of the Plan is in the best interests of the Company and its stockholders. Except as provided in Section 20, no amendment may make any change in any option
theretofore granted which adversely affects the rights of any participant. To the extent necessary and desirable to comply with Code Section 423 (or any successor rule or provision or any other applicable law or regulation), the Company shall obtain
stockholder approval in such a manner and to such a degree as is required thereby. 
  
         (b)    Without stockholder consent and without regard to whether any participant rights may be considered to have been “adversely
affected,” the Committee shall be entitled to change the Offering Periods, establish the exchange ratio applicable to amounts withheld in a currency other than United States Dollars, permit payroll withholding in excess of the amount designated
by a participant in order to adjust for delays or mistakes in the Company’s processing of properly completed withholding elections, establish reasonable waiting and adjustment periods and/or accounting and crediting procedures to ensure that
amounts applied toward the purchase of Common Stock for each participant properly correspond with amounts withheld from the participant’s Compensation, and establish such other limitations or procedures as the Committee determines in its sole
discretion advisable which are consistent with the Plan. 
  
        (c)    In no event may the Board effect any of the following amendments or revisions to the Plan without the approval of the Company’s stockholders: (i) increase the number
of shares of Common Stock issuable under the Plan, except for permissible adjustments in the event of certain changes in the Company’s capitalization pursuant to 

 Sections 20(a) or 20(c), (ii) alter the purchase price formula so as to reduce the purchase price payable for the shares
of Common Stock available for purchase under the Plan, (iii) modify the eligibility requirements for participation in the Plan, or (iv) extend the duration of the Plan. 
  
 22.    Notices.    All notices or other communications by a participant to
the Company under or in connection with the Plan shall be deemed to have been duly given when received in the form specified by the Company at the location, or by the person, designated by the Company for the receipt thereof. 
  
 23.    Conditions Upon Issuance of
Shares.    Shares of Common Stock shall not be issued with respect to an option unless the exercise of such option and the issuance and delivery of such stock pursuant thereto shall comply with all applicable provisions of
law of the United States or other country or jurisdiction, including, without limitation, the Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as amended, the rules and regulations promulgated thereunder, and the requirements
of any stock exchange or quotation system upon which the stock may then be listed or quoted, and shall be further subject to the approval of counsel for the Company with respect to such compliance. 
  
 As a condition to the exercise of an option, the Company may require the
person exercising such option to represent and warrant at the time of any such exercise that the stock is being purchased only for investment and without any present intention to sell or distribute such stock if, in the opinion of counsel for the
Company, such a representation is required by any of the aforementioned applicable provisions of law. 
  
 24.    Applicable Law.    Except as otherwise expressly required under the laws of the local jurisdiction,
the Plan and all rights hereunder shall be governed by and construed in accordance with the laws of the state of California, United States of America without resort to that state’s conflict-of-laws rules. Should any provision of this Plan be
determined by a court of competent jurisdiction to be unlawful or unenforceable for a country, such determination shall in no way affect the application of that provision in any other country, or any of the remaining provisions of the Plan.

  
 25.    Designation of
Subsidiaries.    The Board or Committee may extend or terminate the benefits of the Plan to any Designated Subsidiary at any time without the approval of the stockholders of the Company. 
  
 26.    Equal Rights and
Privileges.    All eligible Employees participating in the U.S. Program shall have equal rights and privileges under the Plan to the extent necessary to comply with Code Section 423(b)(5) and any related regulations.

  
 27.    Term of
Plan.    The Plan was adopted by the Board on October 16, 1990 and was subsequently approved by the Company’s stockholders at the 1990 Annual Meeting of Stockholders held on December 13, 1990. Unless sooner terminated by
the Board, the Plan shall terminate on December 12, 2010. No further purchase rights shall be granted or exercised, and no further payroll deductions shall be collected under the Plan following such termination.

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