Document:

Exhibit 4.1

 

	
  

  	
  THIS CERTIFIES THAT is the owner of CUSIP DATED COUNTERSIGNED
  AND REGISTERED: COMPUTERSHARE TRUST COMPANY, N.A. TRANSFER AGENT AND
  REGISTRAR, FULLY-PAID AND NON-ASSESSABLE ORDINARY SHARES, $0.00001 PAR VALUE
  PER SHARE OF Seagate Technology Public Limited Company (hereinafter called
  the “Company”), transferable on the books of the Company, subject to the
  Irish Companies Acts and the company’s memorandum and articles of
  association, by the holder hereof in person or by a duly authorized attorney
  upon surrender of this Certificate properly endorsed. This Certificate is not
  valid until countersigned by the Transfer Agent and registered by the
  Registrar. Witness the facsimile seal of the Company and the facsimile
  signatures of its duly authorized officers. ORDINARY SHARES PAR VALUE
  $0.00001 ORDINARY SHARES SEE REVERSE FOR CERTAIN DEFINITIONS Certificate
  Number Shares SEAGATE TECHNOLOGY PUBLIC LIMITED COMPANY INCORPORATED UNDER
  THE LAWS OF IRELAND Chairman, President and Chief Executive Officer Secretary
  By AUTHORIZED SIGNATURE 016570| 003590|127C|RESTRICTED||4|057-423 G7945M 10 7
  <<Month Day, Year>> ZQ 000000 SECURITY INSTRUCTIONS ON REVERSE
  1234567

  

 

 

 

	
  

  	
  THE COMPANY WILL FURNISH TO ANY SHAREHOLDER UPON REQUEST AND
  WITHOUT CHARGE A COPY OF THE MEMORANDUM AND ARTICLES OF ASSOCIATION WHICH
  SETS FORTH THE DESIGNATIONS, PREFERENCES, LIMITATIONS, AND RELATIVE RIGHTS OF
  THE SHARES OF EACH CLASS OF SHARES AUTHORIZED TO BE ISSUED AND THE VARIATIONS
  IN THE RELATIVE RIGHTS AND PREFERENCES BETWEEN THE SHARES OF EACH SERIES OF A
  CLASS OF SHARES SO FAR AS THE SAME HAVE BEEN FIXED AND DETERMINED AND THE
  AUTHORITY OF THE BOARD OF DIRECTORS TO FIX AND DETERMINE THE RELATIVE RIGHTS
  AND PREFERENCES OF THE SUBSEQUENT SERIES. The following abbreviations, when
  used in the inscription on the face of this certificate, shall be construed
  as though they were written out in full according to applicable laws or
  regulations: TEN COM - as tenants in common UNIF GIFT MIN ACT- Custodian TEN
  ENT - as tenants by the entireties under Uniform Gifts to Minors Act JT TEN -
  as joint tenants with right of survivorship UNIF TRF MIN ACT Custodian (until
  age) and not as tenants in common (Cust) (Minor) under Uniform Transfers to
  Minors Act. (State) Additional abbreviations may also be used though not in
  the above list. For value received, hereby sell, assign and transfer, subject
  to the Irish Companies Acts and the company’s memorandum and articles of
  association, unto Shares Attorney Dated: 20 Signature: Signature: Notice: The
  signature to this transfer must correspond with the name as written upon the
  face of the certificate, in every particular, without alteration or
  enlargement, or any change whatever. (Cust) (Minor) (State) PLEASE INSERT
  SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF TRANSFEREE (PLEASE PRINT OR
  TYPEWRITE NAME AND ADDRESS, INCLUDING POSTAL ZIP CODE, OF TRANSFEREE) of the
  ordinary shares represented by the within Certificate, and do hereby
  irrevocably constitute and appoint to transfer the said shares on the books
  of the within-named Company with full power of substitution in the premises. SEAGATE
  TECHNOLOGY PUBLIC LIMITED COMPANY Signature(s) Guaranteed: Medallion
  Guarantee Stamp THE SIGNATURE(S) SHOULD BE GUARANTEED BY AN ELIGIBLE
  GUARANTOR INSTITUTION (Banks, Stockbrokers, Savings and Loan Associations and
  Credit Unions) WITH MEMBERSHIP IN AN APPROVED SIGNATURE GUARANTEE MEDALLION
  PROGRAM, PURSUANT TO S.E.C. RULE 17Ad-15. 1234567 SECURITY INSTRUCTIONS THIS IS WATERMARKED PAPER DO NOT ACCEPT
  WITHOUT NOTHING WATERMARK. HOLD TO LIGHT TO VERIFY WATERMARK.Exhibit
10.2

 

SEAGATE TECHNOLOGY PUBLIC LIMITED COMPANY

2001 SHARE OPTION PLAN

 

AMENDED AND RESTATED: December 5, 2002

APPROVED BY SHAREHOLDERS: December 3, 2002

 

LAST AMENDED AND RESTATED: July 3, 2010

TERMINATION DATE: February 1, 2011

 

1.                                       PURPOSES.

 

(a)           Eligible Share
Award Recipients.  The persons
eligible to receive Options are the Employees, Directors and Consultants of the
Company and its Affiliates.

 

(b)           Available Share
Awards.  The purpose of the Plan is
to provide a means by which eligible recipients of Options may be given an
opportunity to benefit from increases in value of the Ordinary Shares through
the granting of either (i) Incentive Stock Options or (ii) Nonstatutory
Share Options.

 

(c)           General Purpose.  The Company, by means of the Plan, which is
an amended and restated version of the Company’s 2001 Share Option Plan (“Predecessor
Plan”), seeks to provide incentives for the group of persons eligible to
receive Options to exert maximum efforts for the success of the Company and its
Affiliates.  Options 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.

 

2.                                       DEFINITIONS.

 

(a)           “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.

 

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

 

(c)           “Code” means the
U.S. Internal Revenue Code of 1986, as amended.

 

(d)           “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 subsection 3(c).

 

 

(e)            “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.

 

(f)             “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 Directors or Directors who are merely paid a director’s fee
by the Company for their services as Directors.

 

(g)           “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 that party, including sick leave, military leave or any other
personal leave.

 

(h)           “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.

 

(i)            “Director” means a
member of the Board of Directors of the Company.

 

(j)            “Disability” means
the permanent and total disability of a person within the meaning of Section 22(e)(3) of
the Code.

 

(k)           “Employee” means any
person employed by the Company or an Affiliate. 
Mere service as a Director or payment of a director’s fee by the Company
or an Affiliate shall not be sufficient to constitute “employment” by the
Company or an Affiliate.

 

(l)            “Exchange Act”
means the U.S. Securities Exchange Act of 1934, as amended.

 

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

 

(i)            If
the Shares are listed on any established 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 the low selling prices of
the Shares as reported on such date on the Composite Tape of the principal
national securities exchange on which the 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 the Shares are listed or admitted to
trading, or, if the Shares are not listed or admitted on a national securities
exchange, the arithmetic mean of the closing bid price and per share closing
ask 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.

 

(n)           “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.

 

(o)           “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.

 

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

 

(q)           “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.

 

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

 

(s)           “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.

 

(t)            “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.

 

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

 

(v)           “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.

 

(w)          “Plan” means this
Seagate Technology Public Limited Company Amended and Restated 2001 Share
Option Plan.

 

(x)            “Rule 16b-3”
means Rule 16b-3 promulgated under the Exchange Act or any successor to Rule l6b-3,
as in effect from time to time.

 

(y)           “Securities Act”
means the U.S. Securities Act of 1933, as amended.

 

(z)            “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.

 

3.                                       ADMINISTRATION.

 

(a)           Administration by
Board.  The Board shall administer
the Plan unless and until the Board delegates administration to a Committee, as
provided in subsection 3(c).

 

(b)           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 Options; when and how each Option shall be granted; what type or
combination of types of Option shall be granted; the provisions of each Option
granted (which need not be identical), including the time or times when a
person shall be permitted to receive Ordinary Shares pursuant to an Option; and
the number of Shares with respect to which an Option shall be granted to each
such person.

 

(ii)           To
construe and interpret the Plan and Options 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 Option
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 an Option as provided in Section 13.

 

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

 

(v)           To
adopt sub-plans and/or special provisions applicable to Options 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 this Plan, with the exception of Section 4, but unless
otherwise superseded by the terms of such sub-plans and/or special provisions,
the provisions of this Plan shall govern.

 

(c)           Delegation
to Committee.

 

(i)            General.  The Board may delegate administration of the
Plan to a Committee or Committees of one (1) 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), 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 the 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 Options 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 Options 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 Options to eligible
persons who are not then subject to Section 16 of the Exchange Act.

 

(d)           Effect of Board’s
Decision.  The Plan and all
determinations, interpretations and constructions made by the Board in its sole
discretion and reasonable good faith determination shall not be subject to
review by any person and shall be final, binding and conclusive on all persons,
including all successors and assigns of the Company and an Optionholder,
including without limitation, the estate of such Optionholder and the executor,
administrator or trustee of such estate, or any receiver or trustee in
bankruptcy or representative of the Optionholder’s creditors.  The terms and conditions of Options and the
Board’s determinations and interpretations with respect thereto need not be the
same with respect to each Optionholder (whether or not such Optionholders are
similarly situated).

 

4.                                       SHARES SUBJECT
TO THE PLAN.

 

(a)           Share Reserve.  Subject to the provisions of Section 12
relating to adjustments upon changes in the Ordinary Shares, the maximum
aggregate number of Shares that may be 

 

 

issued
pursuant to Options shall not exceed 100,000,000 Shares, reduced by the
aggregate number of Shares issued upon the exercise of Share options granted
under the Predecessor Plan.

 

(b)           Reversion of
Shares to the Share Reserve.  If any
Option (including a Share option granted under the Predecessor Plan) shall for
any reason (i) expire 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 by the Company prior to
vesting, the Shares not acquired under such Option shall revert to and again
become available for issuance under the Plan.

 

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

 

5.                                       ELIGIBILITY.

 

(a)           Eligibility for
Specific Share Awards.  Incentive
Stock Options may be granted only to Employees. 
Nonstatutory Share Options may be granted to Employees, Directors and
Consultants.

 

(b)           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.

 

(c)           Section 162(m) Limitation.  Subject to the provisions of Section 12
relating to adjustments upon changes in the Ordinary Shares, no Employee shall
be eligible to be granted Options covering more than 15,000,000 Shares during
any fiscal year.

 

(d)           Consultants.

 

(i)            A
Consultant shall not be eligible for the grant of an Option 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 (i) 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 (ii) 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 (i) they are
natural persons; (ii) they provide bona fide services to the issuer, its
parents, its majority owned subsidiaries; and (iii) 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.

 

 

6.                                       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:

 

(a)           Term.  Subject to the provisions of subsection 5(b) regarding
Ten Percent Shareholders, no Incentive Stock Option shall be exercisable after
the expiration of ten (10) years from the date it was granted.

 

(b)           Exercise Price of
an Incentive Stock Option.  Subject
to the provisions of subsection 5(b) 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.

 

(c)           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.

 

(d)           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) to
the extent permitted by law, 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 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
of the Company 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.  In addition, the promissory note documenting 

 

 

such arrangement shall be a
full recourse note and shall be secured by the Shares purchased upon exercise
of the Option.

 

In the case of any payment
of the purchase price of Shares by delivery of other Shares, if permitted under
the terms of the Optionholder’s Option Agreement, the Optionholder may, subject
to procedures satisfactory to the Board, satisfy such delivery requirement by
presenting proof of beneficial ownership of such shares, in which case the
Company shall treat the Option as exercised without further payment and shall
withhold such number of Shares from the Shares acquired by the exercise of the
Option.

 

(e)           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.

 

(f)            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.

 

(g)           Vesting Generally.  Options granted under the Plan shall be
vested and 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.  Generally, so long as the
Optionholder remains in continuous service with the Company, an Option shall
vest and become exercisable over a four year period with respect to 25% of the
Shares subject to the Option on the first anniversary of the date of grant and
in equal monthly installments of the remaining 75% of the Shares subject to the
Option over the next three years.  The
provisions of this subsection 6(g) are subject to any Option provisions
governing the minimum number of Shares as to which an Option may be exercised.

 

(h)           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.

 

 

(i)            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.

 

(j)            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.

 

(k)           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 subsection 6(e) or
6(f), but only within the period ending on the earlier of (l) 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.

 

(l)            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.

 

7.                                       OPTIONS TO
NON-EMPLOYEE DIRECTORS.

 

In
addition to any other Options that Non-Employee Directors may be granted under
the Plan, each Non-Employee Director of the Company shall be automatically
granted without the necessity of action by the Board, the following option
grants:

 

 

(a)           An initial Option to
purchase 150,000 Shares, or such lesser number as may be established by the
Board from time to time, on the date of his or her initial election as a
Non-Employee Director (the “Initial Grant”).

 

(b)           An automatic annual
Option to purchase 50,000 Shares, or such lesser number as may be established
by the Board from time to time (which need not be the same for each
Non-Employee Director), at an option exercise price equal to one hundred
percent (100%) of the Fair Market Value of the Shares on the date immediately
following the date of the Annual Meeting of Shareholders of the Company,
beginning with the Annual Meeting following the Company’s fiscal year ending in
2003 (the “Annual Grant”), provided that the Non-Employee Director has
completed at least six months of service as a Director from the date of the
Initial Grant.

 

(c)           Options granted
pursuant to an Initial Grant or Annual Grant generally shall vest over a period
of four (4) years, with 25% of the Shares subject to an Option becoming
vested and exercisable upon the first anniversary of the date of grant and the
remaining 75% of the Shares subject to an Option becoming vested and
exercisable in equal monthly installments over the next three years, provided
that the Optionholder continues in the service of the Company throughout the
relevant vesting period.  In all other
respects, Options granted pursuant to an Initial Grant or Annual Grant shall
contain in substance such terms and conditions as are allowable under Section 6
with respect to Options as shall be determined by the Board from time to time.

 

8.                                       COVENANTS OF
THE COMPANY.

 

(a)           Availability of
Shares.  During the terms of the
Options, the Company shall keep available at all times the number of Ordinary
Shares required to satisfy such Options.

 

(b)           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 Options and to issue and
sell Ordinary Shares upon exercise of the Options; provided, however, that this
undertaking shall not require the Company to register under the Securities Act
the Plan, any Option or any Shares issued or issuable pursuant to any such
Option.  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 Shares under the Plan, the Company shall be relieved from
any liability for failure to issue and sell Shares upon exercise of such
Options unless and until such authority is obtained.

 

9.                                       USE OF PROCEEDS
FROM SHARES.

 

Proceeds from the sale of
Ordinary Shares pursuant to the exercise of Options shall constitute general
funds of the Company.

 

10.                                 CANCELLATION AND RE-GRANT OF
OPTIONS.

 

(a)           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 therefor 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 subsection 5(b)), 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.

 

(b)           Shares subject to an
Option canceled under this Section 10 shall continue to be counted against
the maximum award of Options permitted to be granted pursuant to subsection 5(c) of
the Plan. The repricing of an Option under this Section 10, 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
subsection 5(c) of the Plan. The provisions of this subsection 10(b) shall
be applicable only to the extent required by Section 162(m) of the
Code.

 

11.                                 MISCELLANEOUS.

 

(a)           Acceleration of
Exercisability and Vesting.  The
Board shall have the power to accelerate the time at which an Option may first
be exercised or the time during which an Option or any part thereof will vest
in accordance with the Plan, notwithstanding the provisions in the Option
Agreement stating the time at which it may first be exercised or the time
during which it will vest.

 

(b)           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 such Option, including but not limited to
Shareholder voting rights and rights to receive dividends with respect to Shares,
unless and until such Participant has satisfied all requirements for exercise
of the Option pursuant to its terms.

 

(c)           No Employment or
other Service Rights.  Nothing in the
Plan or any instrument executed or Option 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 Option 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 or an Affiliate, and any applicable
provisions of the corporate law of the state or country in which the Company or
the Affiliate is domiciled, as the case may be.

 

(d)           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.

 

(e)           Investment
Assurances.  The Company may require
an Optionholder, as a condition of exercising or acquiring Shares under any
Option, (i) to give written assurances satisfactory to the Company as to
the Optionholder’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 exercising the Option; and (ii) to
give written assurances satisfactory to the Company stating that the
Optionholder is acquiring the Shares subject to the Option for the Optionholder’s
own account and not with any present intention of selling or otherwise
distributing the Shares.  The foregoing
requirements, and any assurances given pursuant to such requirements, shall
generally be inoperative if (1) the issuance of the Shares upon the
exercise or acquisition of Shares under the Option 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.  The
Company may, upon advice of counsel to the Company, place legends onShare
certificates issued under the Plan as such counsel deems necessary or
appropriate in order to comply with applicable securities laws, including, but
not limited to, legends restricting the transfer of the Shares.

 

(f)            Withholding
Obligations.  To the extent provided
by the terms of an Option Agreement, the Participant may satisfy any federal,
state, local or foreign tax withholding obligation relating to the exercise or
acquisition of Ordinary Shares under an Option 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 as a result of the exercise or
acquisition of Shares under the Option, 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 Option Agreement.

 

12.                                 ADJUSTMENTS UPON CHANGES IN
SHARES.

 

(a)           Capitalization
Adjustments.  If any change is made
in the Ordinary Shares subject to the Plan, or subject to any Option, 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,
combination of shares, exchange of shares, change in corporate structure or
other transaction not involving the receipt of consideration by the Company),
the Plan will be appropriately adjusted in the class(es) and maximum number of
securities subject to the Plan pursuant to subsection 4(a), the maximum number
of securities subject to the option grants to any person pursuant to subsection
5(c), and the number of securities subject to the option grants to Non-Employee
Directors under Section 7, and the outstanding Options will be
appropriately adjusted in the class(es) and number of securities and price per
share of the securities subject to such outstanding Options.  The Board 

 

 

shall
make such adjustments, 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.)

 

(b)           Dissolution or
Liquidation.  In the event of a
dissolution or liquidation of the Company, then all outstanding Options shall
terminate immediately prior to such event.

 

(c)           Asset Sale,
Merger, Consolidation or Reverse Merger. 
In the event of (i) a sale, exchange, lease or other disposition of
all or substantially all of the consolidated assets of the Company, (ii) a
merger or consolidation or other transaction in which the Company is not the
surviving corporation or (iii) a reverse merger or other transaction in
which the Company is the surviving corporation but the Ordinary Shares
outstanding immediately preceding the merger are converted by virtue of the
merger into other property, whether in the form of securities, cash or
otherwise (individually, a “Corporate Transaction”), then any surviving
corporation or acquiring corporation shall assume any Options outstanding under
the Plan or shall substitute similar share awards (including an award to
acquire the same consideration paid to the shareholders in the Corporate
Transaction) for those outstanding under the Plan.  In the event any surviving corporation or
acquiring corporation refuses to assume such Options or to substitute similar
share awards for those outstanding under the Plan, then with respect to Options
held by Optionholders whose Continuous Service has not terminated, the Board in
its sole discretion and without liability to any person may (i) provide
for the payment of a cash amount in exchange for the cancellation of an Option
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 Option, (ii) continue the
Options, or (iii) notify Optionholders that they must exercise or redeem
any portion of the Option (including, at the discretion of the Board, any
unvested portion of the Option) at or prior to the closing of the Corporate
Transaction and that the Options shall terminate if not so exercised or
redeemed at or prior to the closing of the Corporate Transaction.  With respect to any other Options outstanding
under the Plan, such Options shall terminate if not exercised or redeemed (if
applicable) prior to the closing of the Corporate Transaction.

 

13.                                 AMENDMENT OF THE PLAN AND
OPTIONS.

 

(a)           Amendment of Plan.  The Board at any time, and from time to time,
may amend the Plan.  However, except as
provided in Section 12 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.

 

(b)           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.

 

 

(c)           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.

 

(d)           No Material
Impairment of Rights.  Rights under
any Option 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 Optionholder and (ii) the Optionholder consents in writing.

 

(e)           Amendment of
Options.  The Board at any time, and
from time to time, may amend the terms of any one or more Options; 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
Optionholder and (ii) the Optionholder consents in writing.

 

14.                                 TERMINATION OR SUSPENSION OF
THE PLAN.

 

(a)           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 that the Predecessor Plan was adopted by the Board or approved by the
shareholders of the Company, whichever occurred earlier.  No Options may be granted under the Plan
while the Plan is suspended or after it is terminated.

 

(b)           No Material
Impairment of Rights.  Suspension or
termination of the Plan shall not materially impair rights and obligations
under any Option granted while the Plan is in effect except with the written
consent of the Optionholder.

 

15.                                 EFFECTIVE DATE OF PLAN.

 

The Plan shall become
effective as determined by the Board, but no Option shall be exercised (with
the exception of an Option granted under the Predecessor Plan) unless and until
the Plan has been 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.

 

16.                                 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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