Document:

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EXHIBIT 4.1

SYBASE, INC.

1999 NONSTATUTORY STOCK PLAN

(amended as of January 31, 2001)

     1. Purposes of the Plan. The purposes of this Plan are:

	 	•	 	to attract and retain the best available personnel
for positions of substantial responsibility,
	 
	 	•	 	to provide additional incentive to Employees and Consultants, and
	 
	 	•	 	to promote the success of the Company’s business.

          Options granted under the Plan will be Nonstatutory Stock Options.

     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 jurisdiction where Options are, or will be, granted under the
Plan.

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

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

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

          (f) “Common Stock” means the Common Stock of the Company.

          (g) “Company” means Sybase, Inc.

          (h) “Consultant” means any person, including an advisor, engaged by the
Company or a Parent or Subsidiary to render services to such entity.

          (i) “Continuous Status as an Employee or Consultant” means that the
employment or consulting relationship with the Company, any Parent, or
Subsidiary, is not interrupted or terminated. Continuous Status as an Employee
or Consultant shall not be considered interrupted 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.

 

 

A leave of absence approved by the Company shall include sick leave,
military leave, or any other personal leave approved by an authorized
representative of the Company.

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

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

          (l) “Employee” means any person who, on the date he or she is granted an
Option under this Plan is (i) employed by the Company or any Parent or
Subsidiary of the Company, and (ii) is not an Officer or Director of the
Company or any Parent or Subsidiary of the Company. Neither service as a
Director nor payment of a director’s fee by the Company shall be sufficient to
constitute “employment” by the Company. An Employee who is not an Officer or
Director on the date he or she is granted an Option under this Plan, but who
thereafter becomes an Officer or Director of the Company or any Parent or
Subsidiary of the Company, shall continue to be an “Employee” under this Plan
for purposes of such Option.

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

          (n) “Fair Market Value” means, as of any date, the value of Common Stock
determined as the closing sales price for such Common Stock (or the closing
bid, if no sales were reported) as quoted on such exchange or system for the
date of determination, as reported in The Wall Street Journal or such other
source as the Administrator deems reliable. In the absence of an established
market for the Common Stock, the Fair Market Value shall be determined in good
faith by the Administrator.

          (o) “Misconduct” means the Optionee (i) is convicted of a felony involving
dishonesty or moral turpitude, (ii) committed an act of dishonesty intended to
result in substantial personal enrichment, (iii) engaged in actions intended to
cause significant injury to the Company (including derogatory statements
regarding the Company, but excluding statements made in connection with any
legal action filed against the Company), or (iv) breached the non-disclosure,
non-compete or non-solicit provisions of any agreement between the Optionee and
the Company.

          (p) “Nonstatutory Stock Option” means an Option not intended to qualify as
an incentive stock option within the meaning of Section 422 of the Code and the
regulations promulgated thereunder.

          (q) “Notice of Grant” means a written or electronic notice evidencing
certain terms and conditions of an individual Option grant. The Notice of
Grant is part of the Option Agreement.

          (r) “Officer” means a person who is an officer of the Company (i) within
the meaning of Section 16 of the Exchange Act and the rules and regulations
promulgated thereunder, or (ii) by virtue of having the title of vice president
or above.

          (s) “Option” means a stock option granted pursuant to the Plan.

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          (t) “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.

          (u) “Optioned Stock” means the Common Stock subject to an Option.

          (v) “Optionee” means an Employee or Consultant who holds an outstanding
Option.

          (w) “Parent” means a “parent corporation”, whether now or hereafter
existing, as defined in Section 424(e) of the Code.

          (x) “Plan” means this 1999 Nonstatutory Stock Plan.

          (y) “Retirement” means the termination of employment pursuant to the
Company’s retirement policies for an Employee who has attained the age of
fifty-five (55) and whose Continuous Status as an Employee was not interrupted
during the previous five (5) years.

          (z) “Share” means a share of the Common Stock, as adjusted in accordance
with Section 13 of the Plan.

          (aa) “Subsidiary” means a “subsidiary corporation”, whether now or
hereafter existing, as defined in Section 424(f) of the Code.

     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 7,000,000. The Shares may be authorized, but unissued, or
reacquired Common Stock.

          If an Option expires or becomes unexercisable without having been
exercised in full, the unpurchased Shares that were subject thereto shall
become available for future grant or sale under the Plan (unless the Plan has
terminated).

     4. Administration of the Plan.

          (a) Administration. The Plan shall be administered by (A) the Board, or
(B) a Committee, which Committee shall be constituted to satisfy Applicable
Laws. Once appointed, such Committee shall serve in its designated capacity
until otherwise directed by the Board. The Board may increase the size of the
Committee and appoint additional members, remove members (with or without
cause) and substitute new members, fill vacancies (however caused), and remove
all members of the Committee and thereafter directly administer the Plan, all
to the extent permitted by 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 of the Common Stock;

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               (ii) to select the Consultants and Employees to whom Options may be
granted hereunder;

               (iii) to determine whether and to what extent Options or any combination
thereof, are granted hereunder;

               (iv) to determine the number of shares of Common Stock to be covered by
each Option granted hereunder;

               (v) to approve forms of agreement for use under the Plan;

               (vi) to determine the terms and conditions, not inconsistent with the
terms of the Plan, of any award granted hereunder. Such terms and conditions
include, but are not limited to, the exercise price, the time or times when
Options 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 the shares of Common Stock relating
thereto, based in each case on such factors as the Administrator, in its sole
discretion, shall determine;

               (vii) to construe and interpret the terms of the Plan and awards granted
pursuant to the Plan;

               (viii) 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 tax treatment under foreign tax laws;

               (ix) to modify or amend each Option (subject to Section 15(b) of the
Plan), including the discretionary authority to extend the post-termination
exercisability period of Options;

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

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

               (xii) to determine whether and under what circumstances an Option may be
settled in cash under Section 10(f) instead of Common Stock;

               (xiii) to determine whether, to what extent and under what circumstances
Common Stock and other amounts payable with respect to an award under this Plan
shall be deferred either automatically or at the election of the participant
(including providing for and determining the amount (if any) of any deemed
earnings on any deferred amount during any deferral period); and

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

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

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     5. Eligibility. Options may be granted to Employees and Consultants;
provided, however, that notwithstanding anything to the contrary contained in
the Plan, Options may not be granted to Officers and Directors.

     6. Limitation. Neither the Plan nor any Option shall confer upon an
Optionee any right with respect to continuing the Optionee’s employment or
consulting relationship with the Company, nor shall they interfere in any way
with the Optionee’s right or the Company’s right to terminate such employment
or consulting relationship at any time, with or without cause.

     7. Term of 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 Notice
of Grant.

     9. Option Exercise Price and Consideration.

          (a) Exercise Price. The per share exercise price for the Shares to be
issued pursuant to exercise of an Option shall be determined by the
Administrator but in no case shall the per Share exercise price be less than
85% of the Fair Market Value per Share on the date of grant; provided, however,
that for any calendar year, the aggregate number of Shares subject to
Nonstatutory Stock Options granted during such calendar year with a per Share
exercise price less than the Fair Market Value per Share on the date of grant
shall not exceed five percent (5%) of the number of Shares subject to Options
granted in the preceding calendar year.

          (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 which must be satisfied before the Option
may be exercised. In so doing, the Administrator may specify that an Option
may not be exercised until the completion of a service period or the attainment
of certain performance goals determined by the Administrator.

          (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) 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 (6) 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;

               (iv) delivery of a properly executed exercise notice together with such
other documentation as the Administrator and the broker, if applicable, shall
require to effect an exercise of the Option and delivery to the Company of the
sale or loan proceeds required to pay the exercise price;

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               (v) 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;

               (vi) any combination of the foregoing methods of payment; or

               (vii) 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.

               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 stock
certificate evidencing such Shares is issued (as evidenced by the appropriate
entry on the books of the Company or of a duly authorized transfer agent of the
Company), no right to vote or receive dividends or any other rights as a
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
stock certificate promptly after the Option is exercised. No adjustment will
be made for a dividend or other right for which the record date is prior to the
date the stock certificate is issued, except as provided in Section 13 of the
Plan.

               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 Employment or Consulting Relationship. Upon
termination of an Optionee’s Continuous Status as an Employee or Consultant,
other than as provided for in Sections 10(c), 10(d) and 10(e), the Optionee may
exercise his or her Option, but only within such period of time as is specified
in the Notice of Grant, and only to the extent that the Optionee was entitled
to exercise it at the date of termination (but in no event later than the
expiration of the term of such Option as set forth in the Notice of Grant). In
the absence of a specified time in the Notice of Grant, the Option shall remain
exercisable for three (3) months following the Optionee’s termination. If, on
the date of termination, the Optionee is not entitled to exercise the
Optionee’s entire Option, the Shares covered by the unexercisable 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.

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               (i) Notwithstanding the above, in the event an Optionee’s Continuous
Status as an Employee or Consultant terminates and the Optionee performs an act
of Misconduct, all unexercised Options held by such Optionee shall expire five
(5) business days following written notice from the Company to the Optionee.

               (ii) Notwithstanding the above, in the event of an Optionee’s change in
status from Consultant to Employee or Employee to Consultant, an Optionee’s
Continuous Status as an Employee or Consultant shall not automatically
terminate solely as a result of such change in status.

          (c) Disability of Optionee. In the event that an Optionee’s Continuous
Status as an Employee or Consultant terminates as a result of the Optionee’s
Disability, the Optionee may exercise his or her Option at any time within
twelve (12) months from the date of such termination, but only to the extent
that the Optionee was entitled to exercise it at the date of such termination
(but in no event later than the expiration of the term of such Option as set
forth in the Notice of Grant). If, at the date of termination, the Optionee is
not entitled to exercise his or her entire Option, the Shares covered by the
unexercisable 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. In the event of the death of an Optionee, the
Option may be exercised at any time within twenty-four (24) months following
the date of death (but in no event later than the expiration of the term of
such Option as set forth in the Notice of Grant), by the Optionee’s estate or
by a person who acquired the right to exercise the Option by bequest or
inheritance, but only to the extent that the Optionee was entitled to exercise
the Option at the date of death. If, at the time of death, the Optionee was
not entitled to exercise his or her entire Option, the Shares covered by the
unexercisable portion of the Option shall immediately revert to the Plan. If,
after death, the Optionee’s estate or a person who acquired the right to
exercise the Option by bequest or inheritance does not exercise the Option
within the time specified herein, the Option shall terminate, and the Shares
covered by such Option shall revert to the Plan.

          (e) Retirement. In the event that an Optionee’s Continuous Status as an
Employee terminates as a result of the Optionee’s Retirement, the Optionee may
exercise his or her Option at any time subject to the limitations in the Plan
and the Notice of Grant, but only to the extent that the Optionee was entitled
to exercise the Option at the time of such termination, unless otherwise
expressly provided in a written agreement between the Optionee and the Company.

          (f) 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.

     11. Withholding Taxes. In accordance with any applicable administrative
guidelines it establishes, the Administrator may allow a purchaser to pay the
amount of taxes required by law to be withheld as a result of a purchase of
Shares or a lapse of restrictions in connection with Shares purchased pursuant
to an Option, by withholding from any payment of Common Stock due as a result
of such purchase or lapse of restrictions, or by permitting the purchaser to
deliver to the

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Company, Shares having a Fair Market Value, as determined by the
Administrator, equal to the amount of such required withholding taxes.

     12. Non-Transferability of Options. Unless otherwise specified by the
Administrator in the Notice of Grant, an Option 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 transferable, such Option 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
stockholders of the Company, the number of shares of Common Stock covered by
each outstanding Option, and the number of shares of Common Stock which have
been authorized for issuance under the Plan but as to which no Options have yet
been granted or which have been returned to the Plan upon cancellation or
expiration of an Option, as well as the price per share of Common Stock covered
by each such outstanding Option, shall be proportionately adjusted for any
increase or decrease in the number of issued shares of Common Stock resulting
from a stock split, reverse stock split, stock dividend, combination or
reclassification of the Common Stock, or any other increase or decrease in the
number of issued shares of Common Stock effected without receipt of
consideration by the Company; provided, however, that conversion of any
convertible securities of the Company shall not be deemed to have been
“effected without receipt of consideration.” Such adjustment shall be made by
the Board, whose determination in that respect shall be final, binding and
conclusive. Except as expressly provided herein, no issuance by the Company of
shares of stock of any class, or securities convertible into shares of stock of
any class, shall affect, and no adjustment by reason thereof shall be made with
respect to, the number or price of shares of Common Stock subject to an Option.

          (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 rights applicable to any
Shares purchased upon exercise of an Option 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 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 shall be assumed or an equivalent option
substituted by the successor corporation or a Parent or Subsidiary of the
successor corporation (the “Successor Corporation”), unless the Successor
Corporation refuses to assume or substitute for the Option, in which case the
Optionee shall have the right to exercise the Option as to all of the Optioned
Stock, including Shares as to which it would not otherwise be exercisable. If
an Option is 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

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electronically that the Option shall be fully exercisable for a period of
not less than forty-five (45) days from the date of such notice, and the Option
shall terminate upon the expiration of such period. For the purposes of this
paragraph, the Option shall be considered assumed if, following the merger or
sale of assets, the Option confers the right to purchase or receive, for each
Share of Optioned Stock subject to the Option immediately prior to the merger
or sale of assets, the consideration (whether stock, cash, or other securities
or property) received in the merger or sale of assets by holders of Common
Stock for each Share held on the effective date of the transaction (and if
holders were offered a choice of consideration, the type of consideration
chosen by the holders of a majority of the outstanding Shares); provided,
however, that if such consideration received in the merger or sale of assets
was not solely common stock of the Successor Corporation, the Administrator
may, with the consent of the Successor Corporation, provide for the
consideration to be received upon the exercise of the Option, for each Share of
Optioned Stock subject to the Option, to be solely common stock of the
Successor Corporation equal in fair market value to the per share consideration
received by holders of Common Stock in the merger or sale of assets.

     14. Date of Grant. The date of grant of an Option shall be, for all
purposes, the date on which the Administrator makes the determination granting
such Option, 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) 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 unless the exercise of such Option 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, the Company may require the person exercising such Option 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. Liability of Company. 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

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liability in respect of the failure to issue or sell such Shares as to
which such requisite authority shall not have been obtained.

     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.

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EXHIBIT 4.2

SYBASE, INC.

AMENDED AND RESTATED

2003 STOCK PLAN

 

 

SYBASE, INC.

AMENDED AND RESTATED

2003 STOCK PLAN

(Amended and Restated Effective May 27, 2004)

     SYBASE, INC., hereby amends and restates in its entirety the Sybase, Inc.
2003 Stock Plan, as of March 25, 2004 (“Plan Adoption Date”). The amended and
restated 2003 Stock Plan shall hereinafter be referred to as the “Plan.” The
Plan shall become effective upon approval by the stockholders of Sybase, Inc.
at the Annual Meeting of Stockholders to be held May 27, 2004, or such other
date as determined in accordance with Section 11.3 below (“Plan Effective
Date”). Unless otherwise defined, terms with initial capital letters are
defined in Section 2 below.

SECTION 1

BACKGROUND AND PURPOSE

1.1 Background The Plan permits the grant of Nonqualified Stock Options,
Incentive Stock Options, Stock Appreciation Rights (SARs), Performance Shares,
Performance Units, Deferred Stock Units and Restricted Stock.

1.2 Purpose of the Plan The Plan is intended to attract, motivate, and retain
the following individuals: (a) employees of the Company and its Affiliates;
(b) consultants who provide significant services to the Company and its
Affiliates; and (c) directors of the Company who are employees of neither the
Company nor any Affiliate. The Plan also is designed to encourage stock
ownership by such individuals, thereby aligning their interests with those of
the Company’s stockholders.

SECTION 2

DEFINITIONS

     The following words and phrases shall have the following meanings unless a
different meaning is plainly required by the context:

2.1 “1934 Act” means the Securities Exchange Act of 1934, as amended.
Reference to a specific section of the 1934 Act shall include such section, any
valid rules or regulations promulgated under such section, and any comparable
provisions of any future legislation, rules or regulations amending,
supplementing or superseding any such section, rule or regulation.

2.2 “Administrator” means, collectively the Board, and/or one or more
Committees, and/or one or more executive officers of the Company designated by
the Board to administer the Plan or specific portions thereof.

2.3 “Affiliate” means any corporation or any other entity (including, but not limited to,
Subsidiaries, partnerships and joint ventures) controlling, controlled by, or
under common control with the Company.

1

 

2.4 “Applicable Law” means the legal requirements relating to the
administration of Options, SARs, Performance Shares, Performance Units,
Deferred Stock Units and Restricted Stock and similar incentive plans under
applicable state corporate and securities laws, the Code, and applicable rules
and regulations promulgated by the NYSE or the requirements of any other stock
exchange or quotation system upon which the Shares may then be listed or
quoted.

2.5 “Award” means, individually or collectively, a grant under the Plan of
Nonqualified Stock Options, Incentive Stock Options, SARs, Restricted Stock,
Performance Shares, Performance Units and/or Deferred Stock Units.

2.6 “Award Agreement” means the written agreement setting forth the terms and
provisions applicable to each Award granted under the Plan, including the Grant
Date.

2.7 “Board” or “Board of Directors” means the Board of Directors of the
Company.

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

     (a) 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 of 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;

     (b) The consummation of the sale or disposition by the Company of all or
substantially all of the Company’s assets;

     (c) 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” means directors who either (A) are
Directors as of the Plan Effective Date, or (B) are elected, or nominated for
election, to the Board with the affirmative votes of at least a majority of the
Directors at the time of such election or nomination (but will not include an
individual whose election or nomination is in connection with an actual or
threatened proxy contest relating to the election of Directors); or

     (d) 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 outstanding 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.

2.9 “Code” means the Internal Revenue Code of 1986, as amended. Reference to a
specific section of the Code or regulation thereunder shall include such
section or regulation, any valid regulation promulgated under such section, and
any comparable provision of any future legislation or regulation amending,
supplementing or superseding such section or regulation.

2.10 “Committee” means any committee appointed by the Board of Directors to
administer the Plan or any portion thereof that (i) is composed entirely of
Independent Directors, and (ii) has a published committee charter as required
under applicable NYSE rules.

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2.11 “Company” means Sybase, Inc., a Delaware corporation, or any successor
thereto. With respect to the definitions of the Performance Goals, the
Administrator may determine that “Company” means Sybase and its consolidated
Subsidiaries.

2.12 “Consultant” means any consultant, independent contractor, or other person
who provides significant services to the Company or its Affiliates, but who is
neither an Employee nor a Director.

2.13 “Continuous Status” as an Employee, Consultant or Director means that a
Participant’s employment or service relationship with the Company or any
Affiliate is not interrupted or terminated. Continuous Status as an Employee
or Consultant shall not be considered interrupted in the following cases: (i)
any leave of absence approved by the Company, or (ii) transfers between
locations of the Company or between the Company and any Subsidiary, or any
successor. A leave of absence approved by the Company shall include sick leave,
military leave, or any other personal leave approved by an authorized
representative of the Company. For purposes of Incentive Stock Options, no
leave of absence may exceed ninety (90) days, unless reemployment upon
expiration of such leave is guaranteed by statute or contract. If such
reemployment is not so guaranteed, then on the one hundred eighty-first (181st)
day of such leave any Incentive Stock Option held by the Participant shall
cease to be treated as an Incentive Stock Option and shall be treated for tax
purposes as a Nonqualified Stock Option. Continuous Status as a Director means
the absence of any interruption or termination of service as a Director.

2.14 “Deferred Stock Units” means an Award granted to a Participant that is
Restricted Stock, Performance Shares or Performance Units and that is paid out
on a deferred basis after such Award has vested as described in Section 10.3.

2.15 “Director” means any individual who is a member of the Board of Directors
of the Company.

2.16 “Disability” means a permanent and total disability within the meaning of
Section 22(e)(3) of the Code, provided that in the case of Awards other than
Incentive Stock Options, the Administrator in its discretion may determine
whether a permanent and total disability exists in accordance with uniform and
non-discriminatory standards adopted by the Administrator from time to time.

2.17 “Employee” means any employee of the Company or of an Affiliate.

2.18 “Exercise Price” means the price at which a Share may be purchased by a
Participant pursuant to the exercise of an Option.

2.19 “Fair Market Value” means the closing price of the Company’s Shares on the
NYSE on the relevant date. If the Shares are not trading on the NYSE on the
relevant date, “Fair Market Value” means the last quoted per share selling
price for Shares on the relevant date, or if there were no sales on such date,
the closing bid on the relevant date; if there are neither bids nor sales
on the relevant date, then the Fair Market Value shall mean the arithmetic mean
of the highest and lowest quoted selling prices on the last market trading day
before the relevant date, as determined by the Administrator. Notwithstanding
the preceding, for federal, state, and local income tax reporting purposes,
Fair Market Value shall be determined by the Administrator (or

3

 

its delegate) in accordance with uniform and nondiscriminatory standards adopted by it from time
to time.

2.20 “Fiscal Year” means a fiscal year of the Company.

2.21 “Freestanding SAR” means a SAR that is granted independently of any Option.

2.22 “Grant Date” means with respect to an Award, the effective date an Award is granted.

2.23 “Incentive Stock Option” means an Option to purchase Shares, which is
designated as an Incentive Stock Option and is intended to meet the
requirements of Section 422 of the Code.

2.24 “Independent Director” means a Nonemployee Director who is (i) a
“non-employee director” within the meaning of Section 16b-3 of the 1934 Act,
(ii) “independent” as determined under the applicable rules of the NYSE, and
(iii) an “outside director” under Treasury Regulation Section 1.162-27(e)(3),
as any of these definitions may be modified or supplemented from time to time.

2.25 “Individual Objectives” means as to a Participant, the objective and
measurable goals set by a “management by objectives” process and approved by
the Administrator in its discretion.

2.26 “Misconduct” shall include commission of any act in competition with any
activity of the Company (or any Affiliate) or any act contrary or harmful to
the interests of the Company (or any Affiliate) and shall include, without
limitation: (a) conviction of a felony or crime involving moral turpitude or
dishonesty, (b) violation of Company (or any Affiliate) policies, with or
acting against the interests of the Company (or any Affiliate), including
employing or recruiting any present, former or future employee of the Company
(or any Affiliate), (d) misuse of any trade or business secrets or
confidential, secret, privileged, or non-public information relating to the
Company’s (or any Affiliate’s) business or breach of the Company’s
Nondisclosure and Assignment of Inventions Agreement, or (e) participating in a
hostile takeover attempt of the Company or an Affiliate. The foregoing
definition shall not be deemed to be inclusive of all acts or omissions that
the Company (or any Affiliate) may consider as Misconduct for purposes of the
Plan.

2.27 “NYSE” means New York Stock Exchange.

2.28 “Nonemployee Director” means a Director who is not employed by the Company
or an Affiliate.

2.29 “Nonqualified Stock Option” means an option to purchase Shares that is not
intended to be an Incentive Stock Option.

2.30 “Option” means an Incentive Stock Option or a Nonqualified Stock Option.

2.31 “Participant” means an Employee, Consultant, or Nonemployee Director who
has an outstanding Award.

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2.32 “Performance Goals” means the goal(s) (or combined goal(s)) determined by
the Administrator (in its discretion) to be applicable to a Participant with
respect to an Award. As determined by the Administrator, the Performance Goals
applicable to an Award may provide for a targeted level or levels of
achievement, including without limitation goals tied to Individual Objectives
and/or the Company’s (or a business unit’s) annual revenue, cash position,
earnings per share, operating cash flow, net income, operating income, or other
financial measure determined in accordance with U.S. generally accepted
accounting principles (“GAAP”). The Performance Goals may differ from
Participant to Participant and from Award to Award.

2.33 “Performance Shares” mean an Award granted to a Participant pursuant to
Section 9 of the Plan that entitles the Participant to receive a prescribed
number of Shares upon achievement of performance objectives associated with
such Award.

2.34 “Performance Unit” means an Award granted to Participant pursuant to
Section 9 of the Plan that entitles the Participant to receive a cash payment
equal to the value of a prescribed number of Shares upon achievement of
performance objectives associated with such Award.

2.35 “Period of Restriction” means the period during which the transfer of
Shares of Restricted Stock are subject to restrictions that subject the Shares
to a substantial risk of forfeiture. As provided in Section 7, such
restrictions may be based on the passage of time, the achievement of
Performance Goals, or the occurrence of other events as determined by the
Administrator, in its discretion.

2.36 “Plan” means this amended and restated Sybase, Inc. 2003 Stock Plan, as
set forth in this instrument and as hereafter amended from time to time.

2.37 “Restricted Stock” means an Award granted to a Participant pursuant to
Section 7.

2.38 “Retirement” means the termination of employment pursuant to the Company’s
retirement policies for an Employee who has attained the age of fifty-five (55)
and whose Continuous Status as an Employee was not interrupted during the
previous five (5) years.

2.39 “Rule 16b-3” means Rule 16b-3 promulgated under the 1934 Act, and any
future regulation amending, supplementing or superseding such regulation.

2.40 “SEC” means the U.S. Securities and Exchange Commission.

2.41 “Section 16 Person” means a person who, with respect to the Shares, is
subject to Section 16 of the 1934 Act.

2.42 “Shares” means the shares of common stock of the Company.

2.43 “Stock Appreciation Right” or “SAR” means an Award, granted alone or in
connection with a related Option, that pursuant to Section 6 is designated as a
SAR. A SAR gives a Participant a right to receive an amount equal to the
difference between the exercise price of the
Shares on the grant date and the Fair Market Value of the Shares on the
exercise date. For example, assume a Participant is granted 100 SARs at an
exercise price of $20 (i.e., 100% of the Fair Market Value of the underlying
Shares on the grant date). When the SARs become

5

 

exercisable, the Fair Market Value of the underlying Shares is $30 per Share. Therefore, upon exercise of
the SAR the Participant is entitled to receive $1,000 (100 Shares x $10 per
Share).

2.44 “Subsidiary” means any corporation in an unbroken chain of corporations
beginning with the Company if each of the corporations other than the last
corporation in the unbroken chain then owns stock possessing fifty percent
(50%) or more of the total combined voting power of all classes of stock in one
of the other corporations in such chain.

2.45 “Tandem SAR” means a SAR that is granted in connection with a related
Option, the exercise of which shall require forfeiture of the right to purchase
an equal number of Shares under the related Option (and when a Share is
purchased under the Option, the SAR shall be canceled to the same extent).

SECTION 3

ADMINISTRATION

3.1 The Administrator. The Administrator shall be appointed by the Board of
Directors from time to time.

3.2 Authority of the Administrator. It shall be the duty of the Administrator
to administer the Plan in accordance with the Plan’s provisions and in
accordance with Applicable Law. The Administrator shall have all powers and
discretion necessary or appropriate to administer the Plan and to control its
operation, including, but not limited to, the power to make recommendations to
the Board regarding the following: (a) which Employees, Consultants and
Directors shall be granted Awards; (b) the terms and conditions of the Awards,
(c) interpretation of the Plan, (d) adoption of such procedures and sub-plans
as are necessary or appropriate to permit participation in the Plan by
Employees and Directors who are foreign nationals or employed outside of the
United States, (e) adoption of rules for the administration, interpretation and
application of the Plan as are consistent therewith, and (f) interpretation,
amendment or revocation of any such rules.

3.3 Delegation by the Administrator. The Administrator, in its discretion and
on such terms and conditions as it may provide, may delegate all or any part of
its authority and powers under the Plan to one or more Directors; provided,
however, that the Administrator may not delegate its authority and powers (a)
with respect to Section 16 Persons, or (b) in any way which would jeopardize
the Plan’s qualification under Section 162(m) of the Code or Rule 16b-3.

3.4 Decisions Binding. All determinations and decisions made by the
Administrator, the Board, and any delegate of the Administrator pursuant to the
provisions of the Plan shall be final, conclusive, and binding on all persons,
and shall be given the maximum deference permitted by Applicable Law.

SECTION 4

SHARES SUBJECT TO THE PLAN

4.1 Number of Shares. Subject to adjustment as provided in Section 4.3, the
total number of Shares initially available for grant under the Plan shall be
2,500,000 (i.e., the existing 2003 Plan share reserve), plus (i) the shares
available for grant under the Sybase, Inc. 1996 Stock Plan as of

6

 

the Plan Adoption Date (not to exceed 1,836,351 shares); plus (ii) the shares available
for grant under the 1999 Plan as of the Plan Adoption Date (not to exceed
555,745 shares), plus (iii) any shares represented by awards granted under the
1996 Plan, the 1999 Plan, or the 1992 Director Plan or the 2001 Director Plan
(collectively, the “Existing Plans”) as of the Plan Adoption Date that are
forfeited or cancelled or expire without the delivery of Shares. As of the
Plan Adoption Date, there were a total of 17,202,848 options and awards issued
but unexercised under the Existing Plans. Upon stockholder approval of the
Plan, no further shares will be issued under any Existing Plan. When any Award
made under the Plan expires, or is forfeited or cancelled without the delivery
of Shares, such Shares will become available for future Awards under the Plan.
Shares granted under the Plan may be authorized but unissued Shares or
reacquired Shares.

     4.1.2 Limit on Discounted Awards. Notwithstanding the foregoing, no more
than twenty percent (20%) of the total Shares issuable under the Plan may be
granted pursuant to Awards with an exercise price or purchase price that is
less than 100% of Fair Market Value on the Grant Date.

4.2 Lapsed Awards. If an Award is settled in cash, or is cancelled,
terminates, expires, or lapses for any reason (with the exception of the
termination of a Tandem SAR upon exercise of the related Option, or the
termination of a related Option upon exercise of the corresponding Tandem SAR),
any Shares subject to such Award again shall be available to be the subject of
an Award.

4.3 Adjustments in Awards and Authorized Shares. Subject to the provisions of
Section 10.6, in the event that any dividend or other distribution (whether in
the form of cash, Shares, other securities, or other property),
recapitalization, stock split, reverse stock split, reorganization, merger,
consolidation, split-up, spin-off, combination, repurchase, or exchange of
Shares or other securities of the Company, or other change in the corporate
structure of the Company affecting the Shares occurs such that an adjustment is
determined by the Administrator (in its discretion) to be appropriate in order
to prevent dilution or enlargement of the benefits or potential benefits
intended to be made available under the Plan, then the Administrator shall, in
such manner as it may deem equitable, adjust the number and class of Shares
which may be delivered under the Plan, the number, class, and price of Shares
subject to outstanding Awards, and the numerical limits of Sections 8.1 and
10.6. Notwithstanding the preceding, the number of Shares subject to any Award
always shall be a whole number.

4.4 Legal Compliance. Shares shall not be issued pursuant to the making or
exercise of an Award unless the exercise of Options and rights and the issuance
and delivery of Shares shall comply with the Securities Act of 1933, as
amended, the 1934 Act and other Applicable Law, and shall be further subject to
the approval of counsel for the Company with respect to such compliance.

4.5 Investment Representations. As a condition to the exercise of an Option or
other right, the Company may require the person exercising such Option or right
to represent and warrant at the
time of exercise that the Shares are being acquired 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.

7

 

SECTION 5

EMPLOYEE AND CONSULTANT STOCK OPTIONS

     The provisions of this Section 5 are applicable only to Options granted to
Employees (including Directors who are also Employees), and Consultants. Such
Participants shall also be eligible to receive other types of Awards as set
forth in the Plan.

5.1 Grant of Options. Subject to the terms and provisions of the Plan, Options
may be granted to Employees and Consultants at any time and from time to time
as determined by the Administrator in its discretion. The Administrator may
grant Incentive Stock Options, Nonqualified Stock Options, or a combination
thereof, and the Administrator, in its discretion and subject to Sections 4.1.2
and 10.6, shall determine the number of Shares subject to each Option.

5.2 Award Agreement. Each Option shall be evidenced by an Award Agreement that
shall specify the Exercise Price, the expiration date of the Option, the number
of Shares to which the Option pertains, any conditions to exercise the Option,
and such other terms and conditions as the Administrator, in its discretion,
shall determine. The Award Agreement shall also specify whether the Option is
intended to be an Incentive Stock Option or a Nonqualified Stock Option.

5.3 Exercise Price. The Administrator shall determine the Exercise Price for
each Option subject to the provisions of this Section 5.3.

     5.3.1 Nonqualified Stock Options. In the case of a Nonqualified Stock
Option, the Exercise Price shall be determined by the Administrator, but in no
case shall the per Share exercise price be less than eighty-five percent (85%)
of the Fair Market Value of a Share on the Grant Date.

     5.3.2 Incentive Stock Options. The grant of Incentive Stock Options shall
be subject to the following limitations:

          (a) The Exercise Price of an Incentive Stock Option shall be not less than
one hundred percent (100%) of the Fair Market Value of a Share on the Grant
Date; provided, however, that if on the Grant Date, the Employee (together with
persons whose stock ownership is attributed to the Employee pursuant to Section
424(d) of the Code) owns stock possessing more than 10% of the total combined
voting power of all classes of stock of the Company or any of its Subsidiaries,
the Exercise Price shall be not less than one hundred and ten percent (110%) of
the Fair Market Value of a Share on the Grant Date;

          (b) Incentive Stock Options may be granted only to persons who are, as of

the Grant Date, Employees of the Company or a Subsidiary, and may not be
granted to Nonemployee Directors or Consultants;

          (c) To the extent that the aggregate Fair Market Value of the Shares with
respect to which Incentive Stock Options are exercisable for the first time by
the Participant during any calendar year (under all plans of the Company and any parent or
Subsidiary) exceeds $100,000, such Options shall be treated as Nonstatutory
Stock Options. For purposes of this Section 5.3.2(c), Incentive Stock Options
shall be taken into account in the order in which they

8

 

were granted. The Fair
Market Value of the Shares shall be determined as of the time the Option with
respect to such Shares is granted; and

          (d) In the event of an Participant’s change of status from Employee to
Consultant or Director, an Incentive Stock Option held by the Participant shall
cease to be treated as an Incentive Stock Option and shall be treated for tax
purposes as a Nonstatutory Stock Option three (3) months and one (1) day
following such change of status.

     5.3.3 Substitute Options. Notwithstanding the provisions of Sections
5.3.1 and 5.3.2, in the event that the Company or an Affiliate consummates a
transaction described in Section 424(a) of the Code (e.g., the acquisition of
property or stock from an unrelated corporation), persons who become Employees,
Directors or Consultants on account of such transaction may be granted Options
in substitution for options granted by their former employer. If such
substitute Options are granted, the Administrator, in its discretion and
consistent with Section 424(a) of the Code, may determine that such substitute
Options shall have an exercise price of no less than eighty-five percent (85%)
of the Fair Market Value of the Shares on the Grant Date.

5.4 Expiration of Options

     5.4.1 Expiration Dates. Each Option shall terminate no later than the
first to occur of the following events:

          (a) Date in Award Agreement. The date for termination of the Option set
forth in the written Award Agreement; or

          (b) Termination of Continuous Status as Employee or Consultant. The last
day of the three (3)-month period following the date the Participant ceases
his/her Continuous Status as an Employee or Consultant (other than termination
for a reason described in subsections (c), (d), (e), (f) or (g) below); or

          (c) Misconduct. In the event a Participant’s Continuous Status as an
Employee or Consultant terminates because the Participant has performed an act
of Misconduct as determined by the Administrator, all unexercised Options held
by such Participant shall expire five (5) business days following written
notice from the Company to the Participant;

          (d) Disability. In the event that a Participant’s Continuous Status as an
Employee or Consultant terminates as a result of the Participant’s Disability,
the Participant may exercise his or her Option at any time within twelve (12)
months from the date of such termination, but only to the extent that the
Participant was entitled to exercise it at the date of such termination (but in
no event later than the expiration of the term of such Option as set forth in
the Award Agreement). If, at the date of termination, the Participant is not
entitled to exercise his or her entire Option, the Shares covered by the
unexercisable portion of the Option shall revert to the Plan. If, after
termination, the Participant 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; or

          (e) Death. In the event of the death of a Participant, the Option may be
exercised at any time within twenty-four (24) months following the date of
death (but in no event later than the expiration of the term of such Option as
set forth in the Award Agreement), by the

9

 

Participant’s estate or by a person
who acquired the right to exercise the Option by bequest or inheritance, but
only to the extent that the Participant was entitled to exercise the Option at
the date of death. If, at the time of death, the Participant was not entitled
to exercise his or her entire Option, the Shares covered by the unexercisable
portion of the Option shall immediately revert to the Plan. If, after death,
the Participant’s estate or a person who acquired the right to exercise the
Option by bequest or inheritance does not exercise the Option within the time
specified herein, the Option shall terminate, and the Shares covered by such
Option shall revert to the Plan; or

          (f) Retirement. In the event that an Participant’s Continuous Status as
an Employee terminates as a result of the Participant’s Retirement, the
Participant may exercise his or her Option at any time subject to the
limitations in the Plan and the Award Agreement, but only to the extent that
the Participant was entitled to exercise the Option at the time of such
termination, unless otherwise expressly provided in a written agreement between
the Participant and the Company. However, any Incentive Stock Options not
exercised within three (3) months of the termination of the Participant’s
Continuous Status as an Employee shall be treated for tax purposes as
Nonstatutory Stock Options three (3) months and one (1) day following such
Retirement; or

          (g) 10 Years from Grant. Unless otherwise specified above, an Option
shall expire no more than ten (10) years from the Grant Date; provided,
however, that if an Incentive Stock Option is granted to an Employee who,
together with persons whose stock ownership is attributed to the Employee
pursuant to Section 424(d) of the Code, owns stock possessing more than 10% of
the total combined voting power of all classes of the stock of the Company or
any of its Subsidiaries, such Incentive Stock Option may not be exercised after
the expiration of five (5) years from the Grant Date.

          (h) Change in Status. In the event a Participant’s status has changed
from Consultant to Employee, or vice versa, a Participant’s Continuous Status
as an Employee or Consultant shall not automatically terminate solely as a
result of such change in status.

     5.4.2 Administrator Discretion. Subject to the limits of Section 5.4.1,
the Administrator, in its discretion, (a) shall provide in each Award Agreement
when each Option expires and becomes unexercisable, and (b) may, after an
Option is granted, extend the maximum term of the Option (subject to
limitations applicable to Incentive Stock Options).

5.5 Exercisability of Options. Options granted under the Plan shall be
exercisable at such times and be subject to such restrictions and conditions as
the Administrator shall determine in its discretion. After an Option is
granted, the Administrator, in its discretion, may accelerate the
exercisability of the Option.

5.6 Exercise and Payment. Options shall be exercised by the Participant’s
delivery of a written notice of exercise to the Secretary of the Company (or
its designee), setting forth the
number of Shares with respect to which the Option is to be exercised,
accompanied by full payment for the Shares.

10

 

     5.6.1 Form of Consideration. Upon the exercise of any Option, the Exercise
Price shall be payable to the Company in full in cash or its equivalent. The
Administrator, in its discretion, also may permit the same-day exercise and
sale of Options and related Shares, or exercise by tendering previously
acquired Shares having an aggregate Fair Market Value at the time of exercise
equal to the total Exercise Price (such previously acquired Shares must have
been held for the requisite period necessary to avoid a charge to the Company’s
earnings for financial reporting purposes, unless otherwise determined by the
Administrator), or by any other means which the Administrator, in its
discretion, determines to provide legal consideration for the Shares, and to be
consistent with the purposes of the Plan.

     5.6.2 Delivery of Shares. As soon as practicable after receipt of a
written notification of exercise and full payment for the Shares purchased, the
Company shall deliver to the Participant (or the Participant’s designated
broker), Share certificates (which may be in book entry form) representing such
Shares.

SECTION 6

STOCK APPRECIATION RIGHTS

6.1 Grant of SARs. Subject to the terms of the Plan, a SAR may be granted to
Employees, Directors and Consultants at any time and from time to time as shall
be determined by the Administrator. The Administrator may grant, Freestanding
SARs, Tandem SARs, or any combination thereof.

     6.1.1 Number of Shares. The Administrator shall have complete discretion
to determine the number of SARs granted to any Participant, subject to the
limitation in Section 10.6.

     6.1.2 Exercise Price and Other Terms. The Administrator, subject to the
provisions of the Plan, shall have discretion to determine the terms and
conditions of SARs granted under the Plan. However, the exercise price of a
Freestanding SAR shall be not less than eighty-five percent (85%) of the Fair
Market Value of a Share on the Grant Date. The exercise price of Tandem SARs
shall equal the Exercise Price of the related Option.

6.2 Exercise of Tandem SARs. Tandem SARs may be exercised for all or part of
the Shares subject to the related Option upon the surrender of the right to
exercise the equivalent portion of the related Option. A Tandem SAR may be
exercised only with respect to the Shares for which its related Option is then
exercisable. With respect to a Tandem SAR granted in connection with an
Incentive Stock Option: (a) the Tandem SAR shall expire no later than the
expiration of the underlying Incentive Stock Option; (b) the value of the
payout with respect to the Tandem SAR shall be for no more than one hundred
percent (100%) of the difference between the Exercise Price of the underlying
Incentive Stock Option and the Fair Market Value of the Shares subject to the
underlying Incentive Stock Option at the time the Tandem SAR is exercised; and
(c) the Tandem SAR shall be exercisable only when the Fair Market Value of the
Shares subject to the Incentive Stock Option exceeds the Exercise Price of the
Incentive Stock Option.

6.3 Exercise of Freestanding SARs. Freestanding SARs shall be exercisable on
such terms and conditions as the Administrator, in its discretion, shall
determine.

11

 

6.4 SAR Agreement. Each SAR grant shall be evidenced by an Award Agreement
that shall specify the exercise price, the term of the SAR, the conditions of
exercise, and such other terms and conditions as the Administrator shall
determine.

6.5 Expiration of SARs. A SAR granted under the Plan shall expire upon the
date determined by the Administrator in its discretion as set forth in the
Award Agreement, or otherwise pursuant to the provisions relating to the
expiration of related Options as set forth in Sections 5.4.

6.6 Payment of SAR Amount. Upon exercise of a SAR, a Participant shall be
entitled to receive payment from the Company in an amount determined by
multiplying: (a) the difference between the Fair Market Value of a Share on
the date of exercise over the Option Exercise Price, times (b) the number of
Shares with respect to which the SAR is exercised. At the discretion of the
Administrator, the payment upon SAR exercise may be in cash, in Shares of
equivalent value, or in some combination thereof.

SECTION 7

RESTRICTED STOCK

7.1 Grant of Restricted Stock. Subject to the terms and provisions of the
Plan, the Administrator, at any time and from time to time, may grant Shares of
Restricted Stock to Employees, Directors and Consultants in such amounts as the
Administrator, in its discretion, shall determine. The Administrator, in its
discretion and subject to Section 10.6, shall determine the number of Shares to
be granted to each Participant.

7.2 Restricted Stock Agreement. Each Award of Restricted Stock shall be
evidenced by an Award Agreement that shall specify the Period of Restriction,
the number of Shares granted, and such other terms and conditions as the
Administrator, in its discretion, shall determine. Unless the Administrator
determines otherwise, Shares of Restricted Stock shall be held by the Company
as escrow agent until the restrictions on such Shares have lapsed.

7.3 Transferability. Except as provided in this Section 7, Shares of
Restricted Stock may not be sold, transferred, pledged, assigned, or otherwise
alienated or hypothecated until expiration of the applicable Period of
Restriction.

7.4 Other Restrictions. The Administrator, in its discretion, may impose such
other restrictions on Shares of Restricted Stock as it may deem advisable or
appropriate, in accordance with this Section 7.4.

     7.4.1 General Restrictions. The Administrator may set restrictions based
upon the achievement of specific performance objectives (Company-wide, business
unit, or individual), or any other basis determined by the Administrator in its
discretion.

     7.4.2 Section 162(m) Performance Restrictions. For purposes of qualifying
grants of Restricted Stock as “performance-based compensation” under Section
162(m) of the Code, the Administrator, in its discretion, may set restrictions based upon the
achievement of Performance Goals. The Performance Goals shall be set by the
Administrator on or before the latest date permissible to enable the Restricted
Stock to qualify as “performance-based compensation”

12

 

under Section 162(m) of
the Code. In granting Restricted Stock which is intended to qualify under
Section 162(m) of the Code, the Administrator shall follow any procedures
determined by it from time to time to be necessary or appropriate to ensure
qualification of the Restricted Stock under Section 162(m) of the Code (e.g.,
in determining the Performance Goals).

     7.4.3 Legend on Certificates. The Administrator, in its discretion, may
legend the certificates representing Restricted Stock to give appropriate
notice of such restrictions.

7.5 Removal of Restrictions. Except as otherwise provided in this Section 7,
Shares of Restricted Stock covered by each Restricted Stock grant made under
the Plan shall be released from escrow as soon as practicable after expiration
of the Period of Restriction. The Administrator, in its discretion, may
accelerate the time at which any restrictions shall lapse or be removed. After
the restrictions have lapsed, the Participant shall be entitled to have any
legend or legends under Section 7.4.3 removed from his or her Share
certificate, and the Shares shall be freely transferable by the Participant,
subject to Applicable Law.

7.6 Voting Rights. During the Period of Restriction, Participants holding
Shares of Restricted Stock granted hereunder may exercise full voting rights
with respect to those Shares, unless the Administrator determines otherwise.

7.7 Dividends and Other Distributions. During the Period of Restriction,
Participants holding Shares of Restricted Stock shall be entitled to receive
all dividends and other distributions paid with respect to such Shares unless
otherwise provided in the Award Agreement. If any such dividends or
distributions are paid in Shares, the Shares shall be subject to the same
restrictions on transferability and forfeitability as the Shares of Restricted
Stock with respect to which they were paid.

7.8 Return of Restricted Stock to Company. On the date set forth in the Award
Agreement, the Restricted Stock for which restrictions have not lapsed shall
revert to the Company and again shall become available for grant under the
Plan.

SECTION 8

NONEMPLOYEE DIRECTOR AWARDS

     The provisions of this Section 8 are applicable only to Nonemployee
Directors. Nonemployee Directors shall be entitled to receive all types of
Awards under this Plan.

8.1 Granting of Options

     8.1.1 Initial Grants. Each Nonemployee Director who first becomes a
Nonemployee Director on or after the Plan Effective Date (excluding each
Nonemployee Director whom, at the time he or she first becomes a Director,
holds unvested options to purchase Shares or securities convertible or
exchangeable for Shares as a result of such Outside Director’s service as a
director of an Affiliate), shall be entitled to receive, as of the date that
the individual first is appointed or elected as a Nonemployee Director, an Award having an Imputed
Value of up to $308,000 on the date of grant, or such lesser number of Shares
as is allowed pursuant to

13

 

Section 10.6. Such Award may consist of a single
type or any combination of the types of Awards permissible under this Plan, as
determined from time to time by the Board as a whole.

     8.1.2 Ongoing Grants. On the first trading day of February in each
calendar year, each Non-Employee Director who has served as a Nonemployee
Director for at least five months on that date shall be granted an Award having
an Imputed Value of up to $400,000 on the date of grant, or such lesser amount
of Shares as is allowed pursuant to Section 10.6, provided that such
Non-Employee Director is a member of the Board. Such Award may consist of a
single type or any combination of the types of Awards permissible under this
Plan, as determined from time to time by the Board as a whole.

     8.1.3 “Imputed Value.” For purposes of Sections 8.1.1, 8.1.2 and 8.3 (as
such section relates to Options), the “Imputed Value” of any Award shall mean
the value on the applicable date as determined in accordance with Financial
Accounting Standards Board Statement No. 123, “Accounting for Stock-Based
Compensation,” as the same may be amended from time to time.

     8.1.4 One-Time 2004 Make-Up Grants. As soon as practicable after the
Company’s stockholders first approve the Plan in 2004, the following shall
occur:

          (a) Each Nonemployee Director who was granted a Nonqualified Stock Option
under the 2001 Director Option Plan for less than the scheduled annual amount
in February 2004 (“2004 Grant”), shall be entitled to receive a one-time
make-up grant of Nonqualified Stock Options to purchase 22,000 Shares under the
Plan so that the total number of Shares subject to each such Director’s 2004
Grant shall equal 26,000 Shares. Options granted pursuant to this Section
8.1.4(a) shall be vested on the Grant Date as if such Options had been granted
on February 2, 2004, and shall vest as to an additional 1/48th of the Shares
each month thereafter so that one hundred percent (100%) of the Shares shall be
exercisable as of February 2, 2007;

          (b) One Nonemployee Director who became a Director as of February 4, 2004
shall be entitled to receive a one-time grant of Nonqualified Stock Options to
purchase 20,000 Shares under this Plan. Options granted pursuant to this
Section 8.1.4(b) shall be vested on the Grant Date as if such Options had been
granted on February 4, 2004, and shall vest as to an additional 1/48th of the
Shares each month thereafter so that one hundred percent (100%) of the Shares
shall be exercisable as of February 4, 2007; and

          (c) No Options shall be granted pursuant to Sections 8.1.4 (a) or (b)
prior to stockholder approval of the Plan.

8.2 Terms of Options.

     8.2.1 Option Agreement. A written Award Agreement between the Participant
and the Company shall evidence each Option granted pursuant to this Section 8.

     8.2.2 Exercise Price. The Exercise Price for the Shares subject to each
Option granted pursuant to this Section 8 shall be 100% of the Fair Market
Value of such Shares on the Grant Date.

14

 

     8.2.3 Expiration of Options. Each Option granted pursuant to this Section
8 shall terminate upon the first to occur of the following events:

          (a) The date for termination of the Option set forth in the written Award
Agreement; or

          (b) The expiration of ten (10) years from the Grant
Date; or

          (c) The expiration of twelve (12) months from the date the Participant
ceases Continuous Status as a Director for any reason other than the
Participant’s death or Disability; or

          (d) In the event that a Participant’s Continuous Status as a Director
terminates as a result of the Participant’s death or Disability, the
Participant’s Option shall terminate in accordance with the provisions set
forth in Section 5.4.1 (d) and (e), respectively.

     8.2.4 Nonqualified Stock Options Only. No Incentive Options may be
granted pursuant to this Section 8.

     8.2.5 Vesting and Other Terms. Except as provided in Sections 8.1.4 and
8.2.3, Options granted pursuant to this Section 8 shall become exercisable on
terms and conditions determined by the Administrator in its sole discretion.
All other provisions of the Plan not inconsistent with this Section 8 shall
also apply to Options granted to Nonemployee Directors. In the event of any
inconsistency between provisions set forth in Section 8 and those set forth
elsewhere in the Plan as they relate to Options, the provisions of Section 8
shall govern with respect to Options granted to Nonemployee Directors.

     8.2.6 Substitute Options. In the event that the Company or an Affiliate
consummates a transaction described in section 424(a) of the Code (e.g., the
acquisition of property or stock from an unrelated corporation), an individual
who becomes a Nonemployee Director as a result of such transaction may be
granted Options in substitution for options granted by the unrelated
corporation. If such substitute Options are granted, the Administrator, in its
discretion and consistent with section 424(a) of the Code, shall determine the
exercise price of such substitute Options, subject to Section 4.1.2.

8.3 Elections by Nonemployee Directors. Pursuant to such procedures as the
Administrator (in its discretion) may adopt from time to time, each Nonemployee
Director may elect to forego receipt of all or a portion of the annual
retainer, committee fees and meeting fees otherwise due to the Nonemployee
Director in exchange for an Award under this Plan. The number of Shares
subject to an Award received by any Nonemployee Director shall equal the amount
of foregone compensation divided by the Fair Market Value of a Share on the
date the compensation otherwise would have been paid to the Nonemployee
Director, rounded up to the nearest whole number of Shares. The number of
Options granted shall be determined by dividing the cash amount foregone by the
Imputed Value of the Options (as defined in Section 8.1.3), rounded up to the
nearest whole number of Shares. The procedures adopted by the Administrator
for elections under this Section 8.3 shall be designed to ensure that any such
election by a Nonemployee Director will not disqualify him or her as a
“non-employee director” under Rule 16b-3.

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SECTION 9

PERFORMANCE SHARES AND PERFORMANCE UNITS

9.1 Grant of Performance Shares/Units. Subject to the terms and conditions of
the Plan, Performance Shares and Performance Units may be granted to Employees,
Directors and Consultants at any time and from time to time, as shall be
determined by the Administrator in its discretion.

     9.1.1 Number of Units or Shares. The Administrator will have complete
discretion in determining the number of Performance Shares and Performance
Units granted to any Participant, subject to the limitations in Sections 4.1.2
and 10.6, provided that during any Fiscal Year, (a) no Participant shall
receive Performance Units having an initial Imputed Value (defined in Section
8.1.3) greater than $1,000,000, except that such Participant may receive
Performance Units in a Fiscal Year in which his or her service as an Employee
first commences with an initial value no greater than $2,000,000.

     9.1.2 Value of Performance Shares/Units. Subject to Section 4.1.2, each
Performance Unit will have an initial Imputed Value that is established by the
Administrator on or before the Grant Date in accordance with Section 8.1.3.
Each Performance Share will have an initial Imputed Value equal to the Fair
Market Value of a Share on the Grant Date.

9.2 Performance Objectives and Other Terms. The Administrator will set
performance objectives or other vesting provisions, including, without
limitation, time-based vesting provisions, in its discretion which, depending
on the extent to which they are met, will determine the number or value of
Performance Shares/Units that will be paid out to Participants. The time
period during which the performance objectives or other vesting provisions must
be met will be called the “Performance Period.” Each Award of Performance
Shares/Units will be evidenced by an Award Agreement that will specify the
Performance Period, and such other terms and conditions as the Administrator,
in its discretion, will determine. The Administrator may set performance
objectives based upon the achievement of Company-wide or individual goals or
any other basis determined by the Administrator in its discretion.

9.3 Earning of Performance Shares/Units. After the applicable Performance
Period has ended, the holder of Performance Units/Shares will be entitled to
receive a payout of the number of Performance Units/Shares earned by the
Participant over the Performance Period, to be determined as a function of the
extent to which the corresponding performance objectives or other vesting
provisions have been achieved. After the grant of a Performance Unit/Share,
the Administrator, in its discretion, may reduce or waive any performance
objectives or other vesting provisions for such Performance Unit/Share.

9.4 Form and Timing of Payment of Performance Shares/Units. Payment of earned
Performance Shares/Units will be made as soon as practicable after the
expiration of the applicable Performance Period. The Administrator, in its
discretion, may pay earned Performance Shares/Units in the form of cash, in Shares (which have an
aggregate Fair Market Value equal to the value of the earned Performance
Units/Shares at the close of the applicable Performance Period) or in a
combination thereof.

16

 

9.5 Cancellation of Performance Shares/Units. On the date set forth in the
Award Agreement, all unearned or unvested Performance Shares/Units will be
forfeited to the Company, and again will be available for grant under the Plan.

SECTION 10

MISCELLANEOUS

10.1 Change In Control

     10.1.1 Generally. In the event of a Change in Control, unless an Award is
assumed or substituted by the successor corporation, then (i) such Awards shall
become fully exercisable as of the date of the Change in Control, whether or
not then exercisable; and (ii) all restrictions and conditions on any Award
then outstanding shall lapse as of the date of the Change in Control.

     10.1.2 Options and SARs. If the Administrator determines that Options and
SARs will be assumed or an equivalent option or right substituted by the
successor corporation or a parent or Subsidiary of the successor corporation,
then

          (a) In the event that the successor corporation refuses to assume or
substitute for the Option or SAR, the Options and SARs held by such Participant
shall immediately become one hundred percent (100%) exercisable. In such
event, the Company shall notify the Participant in writing or electronically
that the Options and SARs are fully exercisable (subject to the consummation of
the Change in Control) for a period of forty-five (45) days from the date of
such notice, and the Option or SAR shall terminate upon the expiration of such
period.

          (b) For the purposes of this Section 10.1.2, the Option or SAR shall be
considered assumed if, following the Change in Control, the option or SAR
confers the right to purchase or receive, for each Share subject to the Option
or SAR immediately prior to the Change in Control, the consideration (whether
stock, cash, or other securities or property) received in the Change in Control
event by holders of Shares for each Share held on the closing 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 Change in Control
is not solely common stock of the successor corporation or its parent, the
Administrator or the Board may, with the consent of the successor corporation,
provide for the consideration to be received upon the exercise of the Option or
SAR, for each Share subject to the Option or SAR, to be solely common stock of
the successor corporation or its parent equal in fair market value to the per
share consideration received by holders of Shares in the Change in Control, as
determined on the date of the Change in Control.

     10.1.3 Restricted Stock. If the Administrator determines that any Company
repurchase or reacquisition right with respect to outstanding Shares of
Restricted Stock held by the Participant will be assigned to the successor
corporation, then in the event that the successor corporation refuses to accept
the assignment of any such Company repurchase or reacquisition
right, such Company repurchase or reacquisition right will immediately
lapse and the Participant will become one hundred percent (100%) vested in such
Shares of Restricted Stock prior to the closing of the Change in Control event.

17

 

     10.1.4 Performance Shares/Units. If the Administrator determines that
Performance Shares/Units will be assumed or an equivalent option or right
substituted by the successor corporation or a parent or Subsidiary of the
successor corporation, then

          (a) in the event that the successor corporation refuses to assume or
substitute for the Performance Shares/Units, 100% of all performance objectives
will be deemed achieved and all other terms and conditions met. In such event,
the Company shall notify the Participant in writing or electronically that the
Performance Shares/Units are fully exercisable (subject to the consummation of
the Change in Control) for a period of forty-five (45) days from the date of
such notice, and Performance Shares/Units shall terminate upon the expiration
of such period.

          (b) For the purposes of this Section 10.1.4, the Performance Share/Unit
shall be considered assumed if, following the Change in Control, the
Performance Share/Unit confers the right to purchase or receive, for each Share
subject to the Performance Share/Unit immediately prior to the Change in
Control, the consideration (whether stock, cash, or other securities or
property) received in the Change in Control by holders of Shares 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 Change in Control is not solely common stock of
the successor corporation or its parent, the Administrator or the Board may,
with the consent of the successor corporation, provide for the consideration to
be received upon the payout of a Performance Share/Unit, for each Share subject
to such Award (or, in the case of Performance Units, the number of implied
Shares determined by dividing the value of the Performance Units by the per
share consideration received by holders of Shares), 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 Shares in the Change in Control,
as determined on the date of the Change in Control. Notwithstanding anything
in this Section 10.1.4 to the contrary, an Award that vests, is earned or
paid-out upon the satisfaction of one or more performance goals will not be
considered assumed if the Company or its successor modifies any of such
performance goals without the Participant’s consent; provided, however, that a
modification to such performance goals only to reflect the successor
corporation’s post Change in Control corporate structure will not be deemed to
invalidate an otherwise valid Award assumption.

10.2 Dissolution or Liquidation. In the event of the proposed dissolution or
liquidation of the Company, the Administrator shall notify each Participant as
soon as practicable prior to the effective date of such proposed transaction.
The Administrator in its discretion may provide for a Participant to have the
right to exercise his or her Award until ten (10) days prior to such
transaction as to all of the Shares covered thereby, including Shares as to
which the Award would not otherwise be exercisable. In addition, the
Administrator may provide that any Company repurchase rights applicable to any
Shares purchased upon exercise of an Award 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 Award will terminate immediately prior to the consummation of such proposed
action.

10.3 Deferrals. The Administrator, in its discretion, may permit a Participant
to defer receipt of the payment of cash or the delivery of Shares that would
otherwise be due to such Participant

18

 

under an Award. Any such deferral
elections shall be subject to such rules and procedures as shall be determined
by the Administrator in its discretion.

10.4 No Effect on Employment or Service. Nothing in the Plan shall interfere
with or limit in any way the right of the Company or an Affiliate to terminate
any Participant’s employment or service at any time, with or without cause.
Unless otherwise provided by written contract, employment with the Company and
its Affiliates is on an at-will basis only. Additionally, the Plan shall not
confer upon any Nonemployee Director any right with respect to continuation of
service as a Director or nomination to serve as a Director, nor shall it
interfere in any way with any rights which such Nonemployee Director or the
Company may have to terminate his or her directorship at any time.

10.5 Participation. No Employee or Consultant shall have the right to be
selected to receive an Award under this Plan, or, having been so selected, to
be selected to receive a future Award.

10.6 Limitations on Awards. No Participant shall be granted an Award in any
Fiscal Year for Shares representing more than the lesser of (i) one percent
(1%) of the Company’s total number of outstanding Shares immediately prior to
the issuance of such Award, or (ii) two million (2,000,000) Shares; provided,
however, that such limitation shall be adjusted proportionately in connection
with any change in the Company’s capitalization as described in Section 4.3.

10.7 Successors. All obligations of the Company under the Plan, with respect
to Awards granted hereunder, shall be binding on any successor to the Company,
whether the existence of such successor is the result of a direct or indirect
purchase, merger, consolidation, or otherwise, of all or substantially all of
the business or assets of the Company.

10.8 Beneficiary Designations. If permitted by the Administrator, a
Participant under the Plan may name a beneficiary or beneficiaries to whom any
vested but unpaid Award shall be paid in the event of the Participant’s death.
Each such designation shall revoke all prior designations by the Participant
and shall be effective only if given in a form and manner acceptable to the
Administrator. In the absence of any such designation, any vested benefits
remaining unpaid at the Participant’s death shall be paid to the Participant’s
estate and, subject to the terms of the Plan and of the applicable Award
Agreement, any unexercised vested Award may be exercised by the administrator
or executor of the Participant’s estate.

10.9 Limited Transferability of Awards. No Award granted under the Plan may be
sold, transferred, pledged, assigned, or otherwise alienated or hypothecated,
other than by will, by the laws of descent and distribution. All rights with
respect to an Award granted to a Participant shall be available during his or
her lifetime only to the Participant. Notwithstanding the foregoing, the
Participant may, in a manner specified by the Administrator, (a) transfer a
Nonqualified Stock Option to a Participant’s spouse, former spouse or dependent
pursuant to a court-approved domestic relations order which relates to the
provision of child support, alimony payments or marital property rights, and
(b) transfer a Nonqualified Stock Option by bona fide gift and not for any
consideration, to (i) a member or members of the Participant’s immediate
family, (ii) a trust established for the exclusive benefit of the Participant
and/or member(s) of the Participant’s immediate family, (iii) a partnership, limited liability company
of other entity whose only partners or members are the Participant and/or
member(s) of the Participant’s

19

 

immediate family, or (iv) a foundation in which
the Participant an/or member(s) of the Participant’s immediate family control
the management of the foundation’s assets.

10.10 Restrictions on Share Transferability. The Administrator may impose such
restrictions on any Shares acquired pursuant to the exercise of an Award as it
may deem advisable, including, but not limited to, restrictions related to
applicable federal securities laws, the requirements of any national securities
exchange or system upon which Shares are then listed or traded, or any blue sky
or state securities laws.

10.11 Buyout Provisions. The Administrator may at any time offer to buy out for
a payment in cash or Shares, an Award previously granted based on such terms
and conditions as the Administrator shall establish and communicate to the
Participant at the time that such offer is made.

10.12 No Rights as Stockholder. Except to the limited extent provided in
Sections 7.6 and 7.7, no Participant (nor any beneficiary) shall have any of
the rights or privileges of a stockholder of the Company with respect to any
Shares issuable pursuant to an Award (or exercise thereof), unless and until
certificates representing such Shares shall have been issued, recorded on the
records of the Company or its transfer agents or registrars, and delivered to
the Participant (or beneficiary).

SECTION 11

AMENDMENT, TERMINATION, AND DURATION; RE-PRICING PROHIBITED

11.1 Amendment, Suspension, or Termination. Except as provided in Section
11.2, the Board, in its sole discretion, may amend, suspend or terminate the
Plan, or any part thereof, at any time and for any reason. The amendment,
suspension, or termination of the Plan shall not, without the consent of the
Participant, alter or impair any rights or obligations under any Award
theretofore granted to such Participant. No Award may be granted during any
period of suspension or after termination of the Plan.

11.2 No Amendment or Re-Pricing without Stockholder Approval. The Company shall
obtain stockholder approval of any material Plan amendment (including but not
limited to any provision to reduce the exercise or purchase price of any
outstanding Options or other Awards after the Grant Date (other than for
adjustments made pursuant Section 4.3), or to cancel and re-grant Options or
other rights at a lower exercise price), to the extent necessary or desirable
to comply with the rules of the NYSE, the Exchange Act, Section 422 of the
Code, or other Applicable Law.

11.3 Plan Effective Date and Duration of Awards . The Plan Effective Date
shall be effective as of May 27, 2004 (or such other date as the stockholders
of the Company shall have approved the Plan by the required vote), subject to
Sections 11.1 and 11.2 (regarding the Board’s right to amend or terminate the
Plan), and shall remain in effect thereafter. However, without further
stockholder approval, no Award may be granted under the Plan more than ten (10)
years after the Plan Effective Date.

20

 

SECTION 12

TAX WITHHOLDING

12.1 Withholding Requirements. Prior to the delivery of any Shares or cash
pursuant to an Award (or exercise thereof), the Company shall have the power
and the right to deduct or withhold, or require a Participant to remit to the
Company, an amount sufficient to satisfy federal, state, and local taxes
(including the Participant’s FICA obligation) required to be withheld with
respect to such Award (or exercise thereof).

12.2 Withholding Arrangements. The Administrator, in its discretion and
pursuant to such procedures as it may specify from time to time, may permit a
Participant to satisfy such tax withholding obligation, in whole or in part by
(a) electing to have the Company withhold otherwise deliverable Shares, or (b)
delivering to the Company already-owned Shares having a Fair Market Value equal
to the minimum amount required to be withheld. The amount of the withholding
requirement shall be deemed to include any amount which the Administrator
agrees may be withheld at the time the election is made, not to exceed the
amount determined by using the maximum federal, state or local marginal income
tax rates applicable to the Participant with respect to the Award on the date
that the amount of tax to be withheld is to be determined. The Fair Market
Value of the Shares to be withheld or delivered shall be determined as of the
date taxes are required to be withheld.

SECTION 13

LEGAL CONSTRUCTION

13.1 Liability of Company. 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 grant or any Award or the
issuance and sale of any Shares hereunder, shall relieve the Company, its
officers, Directors and Employees of any liability in respect of the failure to
grant such Award or to issue or sell such Shares as to which such requisite
authority shall not have been obtained.

13.2 Grants Exceeding Allotted Shares. If the Shares covered by an Award
exceed, as of the date of grant, the number of Shares, which may be issued
under the Plan without additional stockholder approval, such Award shall be
void with respect to such excess Shares, unless stockholder approval of an
amendment sufficiently increasing the number of Shares subject to the Plan is
timely obtained.

13.3 Gender and Number. Except where otherwise indicated by the context, any
masculine term used herein also shall include the feminine; the plural shall
include the singular and the singular shall include the plural.

13.4 Severability. In the event any provision of the Plan shall be held
illegal or invalid for any reason, the illegality or invalidity shall not
affect the remaining parts of the Plan, and the Plan shall be construed and
enforced as if the illegal or invalid provision had not been included.

21

 

13.5 Requirements of Law. The granting of Awards and the issuance of Shares
under the Plan shall be subject to all applicable laws, rules, and regulations,
and to such approvals by any governmental agencies or national securities
exchanges as may be required.

13.6 Securities Law Compliance. With respect to Section 16 individuals,
transactions under this Plan are intended to comply with all applicable
conditions of Rule 16b-3. To the extent any provision of the Plan, Award
Agreement or action by the Administrator fails to so comply, it shall be deemed
null and void, to the extent permitted by law and deemed advisable by the
Administrator.

13.7 Governing Law. The Plan and all Award Agreements shall be construed in
accordance with and governed by the laws of the State of California

13.8 Captions. Captions are provided herein for convenience only, and shall
not serve as a basis for interpretation or construction of the Plan.

SECTION 14

EXECUTION

     IN WITNESS WHEREOF, the Company, by its duly authorized officer, has
executed this Plan on the date indicated below.

	 	 	 	 	 	 	 
	

	 	 	 	SYBASE, INC.	 	 
	 
	 	 	 	 	 	 
	Dated: March 25, 2004

	 	By:
	 	/S/ DANIEL R. CARL	 	 
	

	 	 	 	
 	 	 
	

	 	 	 	Daniel R. Carl	 	 
	

	 	 	 	Vice President,	 	 
	

	 	 	 	General Counsel and Secretary	 	 

22

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