Document:

exv10w2

Exhibit 10.2

BROCADE COMMUNICATIONS SYSTEMS, INC.

1999 STOCK PLAN

(as amended and restated on November 17, 2006)

     1. Purposes of the Plan. The purposes of this 1999 Stock Plan are:

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

     Options granted under the Plan may be Incentive Stock Options or Nonstatutory Stock Options,
as determined by the Administrator at the time of grant. Stock Purchase Rights and Restricted
Stock Units may also be granted under the Plan.

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

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

          (b) “Applicable Laws” means the requirements relating to the administration of
equity-based award plans under U. S. state corporate laws, U.S. federal and state securities laws,
the Code, any stock exchange or quotation system on which the Common Stock is listed or quoted and
the applicable laws of any foreign country or jurisdiction where Awards are, or will be, granted
under the Plan.

          (c) “Award” means, individually or collectively, a grant under the Plan of Options,
Stock Purchase Rights or Restricted Stock Units and other stock or cash awards as the Administrator
may determine.

          (d) “Award Agreement” means the written or electronic agreement setting forth the
terms and provisions applicable to each Award granted under the Plan, including an Option
Agreement. The Award Agreement is subject to the terms and conditions of the Plan.

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

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

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

          (h) “Common Stock” means the common stock of the Company.

          (i) “Company” means Brocade Communications Systems, Inc., a Delaware corporation.

 

 

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

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

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

          (m) “Employee” means any individual, including Officers and Directors, employed by the
Company or any Parent or Subsidiary of the Company. For purposes of the Plan, the employment
relationship shall be treated as continuing intact while the individual (i) is on any bona fide
leave of absence approved by the Company or (ii) transfers between locations of the Company or
between the Company, its Parent, any Subsidiary, or any successor. Neither service as a Director
nor payment of a director’s fee by the Company shall be sufficient to constitute “employment” by
the Company.

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

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

               (i) If the Common Stock is listed on any established stock exchange or a national market
system, including without limitation the Nasdaq National Market or The Nasdaq SmallCap Market of
The Nasdaq Stock Market, its Fair Market Value shall be the closing sales price for such stock (or
the closing bid, if no sales were reported) as quoted on such exchange or system for the last
market trading day on the date of such determination, as reported in The Wall Street Journal or
such other source as the Administrator deems reliable;

               (ii) If the Common Stock is regularly quoted by a recognized securities dealer but selling
prices are not reported, the Fair Market Value of a Share of Common Stock shall be the mean between
the high bid and low asked prices for the Common Stock on the last market trading day prior to the
day of determination, as reported in The Wall Street Journal or such other source as the
Administrator deems reliable; or

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

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

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

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

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

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

          (u) “Option Agreement” means an agreement between the Company and a Participant
evidencing the terms and conditions of an individual Option grant. The Option Agreement is subject
to the terms and conditions of the Plan.

          (v) “Option Exchange Program” means a program whereby outstanding Options are
surrendered in exchange for Options with a lower exercise price.

          (w) “Optioned Stock” means the Common Stock subject to an Award.

          (x) “Optionee” means the holder of an outstanding Option or Stock Purchase Right
granted under the Plan.

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

          (z) “Participant” means the holder of an outstanding Award, including an Optionee.

          (aa) “Plan” means this 1999 Stock Plan.

          (bb) “Restricted Stock” means shares of Common Stock acquired pursuant to a grant of
Stock Purchase Rights under Section 11 of the Plan.

          (cc) “Restricted Stock Purchase Agreement” means a written agreement between the
Company and the Participant evidencing the terms and restrictions applying to stock purchased under
a Stock Purchase Right. The Restricted Stock Purchase Agreement is subject to the terms and
conditions of the Plan and the Notice of Grant.

          (dd) “Restricted Stock Unit” means a bookkeeping entry representing an amount equal to
the Fair Market Value of one Share, granted pursuant to Section 12. Each Restricted Stock Unit
represents an unfunded and unsecured obligation of the Company.

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

          (ff) “Section 16(b)” means Section 16(b) of the Exchange Act.

          (gg) “Service Provider” means an Employee, Director or Consultant.

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

          (ii) “Stock Purchase Right” means the right to purchase Common Stock pursuant to
Section 11 of the Plan, as evidenced by a Notice of Grant.

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          (jj) “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 14 of the Plan,
the maximum aggregate number of Shares which may be optioned and sold under the Plan is 7,607,000
Shares [60,856,000 Shares as adjusted for three 2:1 stock splits effective on or prior to
12/21/00], plus an annual increase to be added on the first day of the Company’s fiscal year
beginning in 2000 equal to the lesser of (i) 5,000,000 shares [40,000,000 shares as adjusted for
three 2:1 stock splits effective on or prior to 12/21/00], (ii) 5% of the outstanding shares on
such date or (iii) a lesser amount determined by the Board. The Shares may be authorized, but
unissued, or reacquired Common Stock.

     If an Award expires or becomes unexercisable without having been exercised in full, or is
surrendered pursuant to an Option Exchange Program, the unpurchased Shares (or for Awards other
than Options, the forfeited or repurchased Shares), which were subject thereto shall become
available for future grant or sale under the Plan (unless the Plan has terminated);
provided, however, that Shares that have actually been issued under the Plan upon exercise
of an Award, shall not be returned to the Plan and shall not become available for future
distribution under the Plan, except that if Shares of Restricted Stock or Shares acquired pursuant
to Restricted Stock Units are repurchased by the Company at their original purchase price or are
forfeited to the Company, such Shares shall become available for future grant under the Plan.

     4. Administration of the Plan.

          (a) Procedure.

               (i) Multiple Administrative Bodies. The Plan may be administered by different
Committees with respect to different groups of Service Providers.

               (ii) Section 162(m). To the extent that the Administrator determines it to be
desirable to qualify Awards granted hereunder as “performance-based compensation” within the
meaning of Section 162(m) of the Code, the Plan shall be administered by a Committee of two or more
“outside directors” within the meaning of Section 162(m) of the Code.

               (iii) Rule 16b-3. To the extent desirable to qualify transactions hereunder as exempt
under Rule 16b-3, the transactions contemplated hereunder shall be structured to satisfy the
requirements for exemption under Rule 16b-3.

               (iv) Other Administration. Other than as provided above, the Plan shall be
administered by (A) the Board or (B) a Committee, which committee shall be constituted to satisfy
Applicable Laws.

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

               (i) to determine the Fair Market Value;

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               (ii) to select the Service Providers to whom Awards may be granted hereunder;

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

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

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

               (vi) to reduce the exercise price of any Award to the then current Fair Market Value if the
Fair Market Value of the Common Stock covered by such Award shall have declined since the date the
Award was granted;

               (vii) to institute an Option Exchange Program;

               (viii) to construe and interpret the terms of the Plan and Awards granted pursuant to the
Plan;

               (ix) to prescribe, amend and rescind rules and regulations relating to the Plan, including
rules and regulations relating to sub-plans established for the purpose of qualifying for preferred
tax treatment under foreign tax laws;

               (x) to modify or amend each Award (subject to Section 16(c) of the Plan), including the
discretionary authority to extend the post-termination exercisability period of Awards longer than
is otherwise provided for in the Plan;

               (xi) to allow Participants to satisfy withholding tax obligations by electing to have the
Company withhold from the Shares to be issued upon exercise of an Award that number of Shares
having a Fair Market Value equal to the amount required to be withheld. The Fair Market Value of
the Shares to be withheld shall be determined on the date that the amount of tax to be withheld is
to be determined. All elections by a Participant to have Shares withheld for this purpose shall be
made in such form and under such conditions as the Administrator may deem necessary or advisable;

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

               (xiii) 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 Participants and any other holders of Awards.

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     5. Eligibility. Nonstatutory Stock Options, Stock Purchase Rights and Restricted
Stock Units may be granted to Service Providers. Incentive Stock Options may be granted only to
Employees.

     6. Limitations.

          (a) Each Option shall be designated in the Award Agreement as either an Incentive Stock Option
or a Nonstatutory Stock Option. However, notwithstanding such designation, 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 6(a), Incentive Stock Options shall be
taken into account in the order in which they 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.

          (b) Neither the Plan nor any Award shall confer upon a Participant any right with respect to
continuing the Participant’s relationship as a Service Provider with the Company, nor shall they
interfere in any way with the Participant’s right or the Company’s right to terminate such
relationship at any time, with or without cause.

          (c) The following limitations shall apply to grants of Options:

               (i) No Service Provider shall be granted, in any fiscal year of the Company, Options to
purchase more than 1.5 million Shares.

               (ii) In connection with his or her initial service, a Service Provider may be granted Options
to purchase up to an additional 1.5 million Shares which shall not count against the limit set
forth in subsection (i) above.

               (iii) The foregoing limitations shall be adjusted proportionately in connection with any
change in the Company’s capitalization as described in Section 14.

               (iv) If an Option is cancelled in the same fiscal year of the Company in which it was granted
(other than in connection with a transaction described in Section 14), the cancelled Option will be
counted against the limits set forth in subsections (i) and (ii) above. For this purpose, if the
exercise price of an Option is reduced, the transaction will be treated as a cancellation of the
Option and the grant of a new Option.

     7. Term of Plan. Subject to Section 20 of the Plan, the Plan shall become effective
upon its adoption by the Board. It shall continue in effect for a term of ten (10) years unless
terminated earlier under Section 16 of the Plan.

     8. Term of Option. The term of each Option shall be stated in the Award Agreement.
In the case of an Incentive Stock Option, the term shall be ten (10) years from the date of grant
or such shorter term as may be provided in the Award Agreement. Moreover, in the case of an
Incentive Stock Option granted to a Participant who, at the time the Incentive Stock Option is
granted, owns stock representing more than ten percent (10%) of the total combined voting power of
all classes of stock of the Company or any Parent or Subsidiary, the term of the Incentive Stock

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Option shall be five (5) years from the date of grant or such shorter term as may be provided
in the Award Agreement.

     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, subject to the following:

               (i) In the case of an Incentive Stock Option

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

                    (B) granted to any Employee other than an Employee described in paragraph (A) immediately
above, the per Share exercise price shall be no less than 100% of the Fair Market Value per Share
on the date of grant.

               (ii) In the case of a Nonstatutory Stock Option, the per Share exercise price shall be
determined by the Administrator. In the case of a Nonstatutory Stock Option intended to qualify as
“performance-based compensation” within the meaning of Section 162(m) of the Code, the per Share
exercise price shall be no less than 100% of the Fair Market Value per Share on the date of grant.

               (iii) Notwithstanding the foregoing, Options may be granted with a per Share exercise price of
less than 100% of the Fair Market Value per Share on the date of grant pursuant to a merger or
other corporate transaction.

          (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.

          (c) Form of Consideration. The Administrator shall determine the acceptable form of
consideration for exercising an Option, including the method of payment. In the case of an
Incentive Stock Option, the Administrator shall determine the acceptable form of consideration at
the time of grant. 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 Participant for more than six months on the date of surrender, and (B) have a
Fair Market Value on the date of surrender equal to the aggregate exercise price of the Shares as
to which said Option shall be exercised;

               (iv) consideration received by the Company under a cashless exercise program implemented by
the Company in connection with the Plan;

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               (v) a reduction in the amount of any Company liability to the Participant, including any
liability attributable to the Participant’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 Award Agreement. Unless the Administrator
provides otherwise, vesting of Options granted hereunder shall be tolled during any unpaid leave of
absence. An Option may not be exercised for a fraction of a Share.

     An Option shall be deemed exercised when the Company receives: (i) written or electronic
notice of exercise (in accordance with the Award 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 Award Agreement and the Plan. Shares issued upon exercise of an Option shall
be issued in the name of the Participant or, if requested by the Participant, in the name of the
Participant and his or her spouse. Until the Shares are issued (as evidenced by the appropriate
entry on the books of the Company or of a duly authorized transfer agent of the Company), no right
to vote or receive dividends or any other rights as a shareholder shall exist with respect to the
Optioned Stock, notwithstanding the exercise of the Option. The Company shall issue (or cause to
be issued) such Shares promptly after the Option is exercised. No adjustment will be made for a
dividend or other right for which the record date is prior to the date the Shares are issued,
except as provided in Section 14 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 Relationship as a Service Provider. If a Participant ceases to be
a Service Provider, other than upon the Participant’s death or Disability, the Participant may
exercise his or her Option within such period of time as is specified in the Award Agreement to the
extent that the Option is vested on the date of termination (but in no event later than the
expiration of the term of such Option as set forth in the Award Agreement). In the absence of a
specified time in the Award Agreement, the Option shall remain exercisable for three (3) months
following the Participant’s termination. If, on the date of termination, the Participant is not
vested as to his or her entire Option, the Shares covered by the unvested portion of the Option
shall revert to the Plan. If, after termination, the Participant does not exercise his or her
Option within the time specified by the Administrator, the Option shall terminate, and the Shares
covered by such Option shall revert to the Plan.

          (c) Disability of Participant. If a Participant ceases to be a Service Provider as a
result of the Participant’s Disability, the Participant may exercise his or her Option within such

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period of time as is specified in the Award Agreement to the extent the Option is vested on
the date of termination (but in no event later than the expiration of the term of such Option as
set forth in the Award Agreement). In the absence of a specified time in the Award Agreement, the
Option shall remain exercisable for twelve (12) months following the Participant’s termination.
If, on the date of termination, the Participant is not vested as to his or her entire Option, the
Shares covered by the unvested portion of the Option shall revert to the Plan. If, after
termination, the 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.

          (d) Death of Participant. If a Participant dies while a Service Provider, the Option
may be exercised within such period of time as is specified in the Award Agreement (but in no event
later than the expiration of the term of such Option as set forth in the Notice of Grant), by the
Participant’s estate or by a person who acquires the right to exercise the Option by bequest or
inheritance, but only to the extent that the Option is vested on the date of death. In the absence
of a specified time in the Award Agreement, the Option shall remain exercisable for twelve (12)
months following the Participant’s termination. If, at the time of death, the Participant is not
vested as to his or her entire Option, the Shares covered by the unvested portion of the Option
shall immediately revert to the Plan. The Option may be exercised by the executor or administrator
of the Participant’s estate or, if none, by the person(s) entitled to exercise the Option under the
Participant’s will or the laws of descent or distribution. If the Option is not so exercised
within the time specified herein, the Option shall terminate, and the Shares covered by such Option
shall revert to the Plan.

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

     11. Stock Purchase Rights.

          (a) Rights to Purchase. Stock Purchase Rights may be issued either alone, in addition
to, or in tandem with other awards granted under the Plan and/or cash awards made outside of the
Plan. After the Administrator determines that it will offer Stock Purchase Rights under the Plan,
it shall advise the offeree in writing or electronically, by means of a Notice of Grant, of the
terms, conditions and restrictions related to the offer, including the number of Shares that the
offeree shall be entitled to purchase, the price to be paid, and the time within which the offeree
must accept such offer. The offer shall be accepted by execution of a Restricted Stock Purchase
Agreement in the form determined by the Administrator.

          (b) Repurchase Option. Unless the Administrator determines otherwise, the Restricted
Stock Purchase Agreement shall grant the Company a repurchase option exercisable upon the voluntary
or involuntary termination of the purchaser’s service with the Company for any reason (including
death or Disability). The purchase price for Shares repurchased pursuant to the Restricted Stock
Purchase Agreement shall be the original price paid by the purchaser and may be paid by
cancellation of any indebtedness of the purchaser to the Company. The repurchase option shall
lapse at a rate determined by the Administrator.

          (c) Other Provisions. The Restricted Stock Purchase Agreement shall contain such
other terms, provisions and conditions not inconsistent with the Plan as may be determined by the
Administrator in its sole discretion.

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          (d) Rights as a Shareholder. Once the Stock Purchase Right is exercised, the
purchaser shall have the rights equivalent to those of a shareholder, and shall be a shareholder
when his or her purchase is entered upon the records of the duly authorized transfer agent of the
Company. No adjustment will be made for a dividend or other right for which the record date is
prior to the date the Stock Purchase Right is exercised, except as provided in Section 14 of the
Plan.

     12. Restricted Stock Units.

          (a) Grant. Restricted Stock Units may be granted at any time and from time to time as
determined by the Administrator. Each Restricted Stock Unit grant will be evidenced by an Award
Agreement that will specify such other terms and conditions as the Administrator, in its sole
discretion, will determine, including all terms, conditions, and restrictions related to the grant,
the number of Restricted Stock Units and the form of payout, which, subject to Section 12(d), may
be left to the discretion of the Administrator.

          (b) Vesting Criteria and Other Terms. The Administrator will set vesting criteria
(which may include performance objectives based upon the achievement of Company-wide, departmental
or individual goals, Company performance relative to selected other companies, or any other basis
determined by the Administrator) in its discretion, which, depending on the extent to which the
criteria are met, will determine the number of Restricted Stock Units that will be paid out to the
Participant. After the grant of Restricted Stock Units, the Administrator, in its sole discretion,
may reduce or waive any restrictions for such Restricted Stock Units. Each Award of Restricted
Stock Units will be evidenced by an Award Agreement that will specify the vesting criteria, and
such other terms and conditions as the Administrator, in its sole discretion, will determine.

          (c) Earning Restricted Stock Units. Upon meeting the applicable vesting criteria
(including without limitation, achievement of any applicable performance objectives), the
Participant will be entitled to receive a payout as specified in the Award Agreement.
Notwithstanding the foregoing, at any time after the grant of Restricted Stock Units, the
Administrator, in its sole discretion, may reduce or waive any vesting criteria that must be met to
receive a payout.

          (d) Form and Timing of Payment. Payment of earned Restricted Stock Units will be made
as soon as practicable after the date(s) set forth in the Award Agreement. The Restricted Stock
Units will be paid in Shares.

          (e) Cancellation. On the date set forth in the Award Agreement, all unearned
Restricted Stock Units will be forfeited to the Company.

     13. Non-Transferability of Awards. Unless determined otherwise by the Administrator,
an Award 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 Participant, only by the Participant. If the Administrator makes an Award
transferable, such Award shall contain such additional terms and conditions as the Administrator
deems appropriate.

     14. Adjustments Upon Changes in Capitalization, Dissolution, Merger or Asset Sale.

          (a) Changes in Capitalization. Subject to any required action by the shareholders of
the Company, the number of shares of Common Stock covered by each outstanding Award, and

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the number of shares of Common Stock which have been authorized for issuance under the Plan
but as to which no Awards have yet been granted or which have been returned to the Plan upon
cancellation or expiration of an Award, as well as the price per share of Common Stock covered by
each such outstanding Award, 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
Award.

          (b) 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 Option until ten (10) days prior
to such transaction as to all of the Optioned Stock covered thereby, including Shares as to which
the Option would not otherwise be exercisable. In addition, the Administrator may provide that any
Company repurchase option applicable to any Shares purchased upon exercise of an Award shall lapse
as to all such Shares or, with respect to Restricted Stock Units, all Shares shall vest, 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.

          (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 Award shall be assumed or an equivalent option or right substituted by the successor
corporation or a Parent or Subsidiary of the successor corporation. In the event that the
successor corporation refuses to assume or substitute for the Award, the Participant shall fully
vest in and have the right to exercise the Award as to all of the Optioned Stock, including Shares
as to which it would not otherwise be vested or exercisable, all restrictions on Restricted Stock
shall lapse, and all outstanding Restricted Stock Units shall fully vest. If an Award becomes
fully vested and exercisable in lieu of assumption or substitution in the event of a merger or sale
of assets, the Administrator shall notify the Participant in writing or electronically that the
Award shall be fully vested and exercisable for a period of fifteen (15) days from the date of such
notice, and the Award shall terminate upon the expiration of such period. For the purposes of this
paragraph, the Award shall be considered assumed if, following the merger or sale of assets, the
Award confers the right to purchase or receive, for each Share subject to the Award immediately
prior to the merger or sale of assets, the consideration (whether stock, cash, or other securities
or property) received in the merger or sale of assets by holders of Common Stock for each Share
held on the effective date of the transaction (and if holders were offered a choice of
consideration, the type of consideration chosen by the holders of a majority of the outstanding
Shares); provided, however, that if such consideration received in the merger or sale of assets is
not solely common stock of the successor corporation or its Parent, the Administrator may, with the
consent of the successor corporation, provide for the consideration to be received upon the
exercise of the Award, for each Share of Optioned Stock subject to the Award, to be solely common
stock of

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the successor corporation or its Parent equal in fair market value to the per share
consideration received by holders of Common Stock in the merger or sale of assets.

     15. Date of Grant. The date of grant of an Award shall be, for all purposes, the date
on which the Administrator makes the determination granting such Award, or such other later date as
is determined by the Administrator. Notice of the determination shall be provided to each
Participant within a reasonable time after the date of such grant.

     16. Amendment and Termination of the Plan.

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

          (b) Shareholder Approval. The Company shall obtain shareholder approval of any Plan
amendment to the extent necessary and desirable to comply with Applicable Laws.

          (c) Effect of Amendment or Termination. No amendment, alteration, suspension or
termination of the Plan shall impair the rights of any Participant, unless mutually agreed
otherwise between the Participant and the Administrator, which agreement must be in writing and
signed by the Participant 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 Awards
granted under the Plan prior to the date of such termination.

     17. Conditions Upon Issuance of Shares.

          (a) Legal Compliance. Shares shall not be issued pursuant to the exercise of an Award
unless the exercise of such Award 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 Award, the
Company may require the person exercising such Award to represent and warrant at the time of any
such exercise that the Shares are being purchased only for investment and without any present
intention to sell or distribute such Shares if, in the opinion of counsel for the Company, such a
representation is required.

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

     19. 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.

     20. Shareholder Approval. The Plan shall be subject to approval by the shareholders
of the Company within twelve (12) months after the date the Plan is adopted. Such shareholder
approval shall be obtained in the manner and to the degree required under Applicable Laws.

-12-

 

 

Notice of Grant of Stock Options

and Option Agreement

Brocade Communications Systems, Inc.

ID: 77-0409517

1745 Technology Drive

San Jose, CA 95110

	 	 	 	 	 	 	 
	Name:

	 	 
	 	Option Number:	 	 
	Address:

	 	 	 	Plan:
	 	1999 
	 

	 	 	 	ID:	 	 

Effective [DATE], you have been granted a(n) Non-Qualified Stock Option to buy [SHARES] shares of
Brocade Communications Systems, Inc. (the Company) stock at $[PRICE] per share.

The total option price of the shares granted is $[PRICE].

Shares in each period will become fully vested on the date shown.

	 	 	 	 	 	 	 
	Shares	 	Vest Type	 	Full Vest	 	Expiration
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 

By your signature and the Company’s signature below, you and the Company agree that these options
are granted under and governed by the terms and conditions of the Company’s Stock Option Plan as
amended and the Option Agreement, all of which are attached and made a part of this document.

	 	 	 
	 
	 	 
	 

	 	 
	Brocade Communications Systems, Inc.

	 	Date
	 
	 	 
	 
	 	 
	 

	 	 
	[EMPLOYEE NAME]

	 	Date

 

BROCADE COMMUNICATIONS SYSTEMS, INC.

1999 STOCK OPTION PLAN

STOCK OPTION AGREEMENT

Termination Period:

     This Option may be exercised for three months after Optionee ceases to be a Service Provider.
Upon the death or Disability of the Optionee, this Option may be exercised for one year after
Optionee ceases to be a Service Provider. In no event shall this Option be exercised later than
the Term/Expiration Date as provided above.

I. AGREEMENT

     A. Grant of Option. 

     The Plan Administrator of the Company hereby grants to the Optionee named in the Notice of
Grant attached as Part I of this Agreement (the “Optionee”) an option (the “Option”) to purchase
the number of Shares, as set forth in the Notice of Grant, at the exercise price per share set
forth in the Notice of Grant (the “Exercise Price”), subject to the terms and conditions of the
Plan, which is incorporated herein by reference. Subject to Section 15(c) of the Plan, in the
event of a conflict between the terms and conditions of the Plan and the terms and conditions of
this Option Agreement, the terms and conditions of the Plan shall prevail.

     If designated in the Notice of Grant as an Incentive Stock Option (“ISO”), this Option is
intended to qualify as an Incentive Stock Option under Section 422 of the Code. However, if this
Option is intended to be an Incentive Stock Option, to the extent that it exceeds the $100,000 rule
of Code Section 422(d) it shall be treated as a Nonstatutory Stock Option (“NSO”).

     B. Exercise of Option.

          (a) Right to Exercise. This Option is exercisable during its term in accordance with
the Vesting Schedule set out in the Notice of Grant and the applicable provisions of the Plan and
this Option Agreement.

          (b) Method of Exercise. This Option is exercisable by delivery of an exercise notice,
in the form attached as Exhibit A (the “Exercise Notice”), which shall state the election to
exercise the Option, the number of Shares in respect of which the Option is being exercised (the
“Exercised Shares”), and such other representations and agreements as may be required by the
Company pursuant to the provisions of the Plan. The Exercise Notice shall be completed by the
Optionee and delivered to Elizabeth Moore, Stock Administrator, of the Company. The Exercise
Notice shall be accompanied by payment of the aggregate Exercise Price as to all Exercised Shares.
This Option shall be deemed to be exercised upon receipt by the Company of such fully executed
Exercise Notice accompanied by such aggregate Exercise Price.

          No Shares shall be issued pursuant to the exercise of this Option unless such issuance and
exercise complies with Applicable Laws. Assuming such compliance, for income tax purposes the
Exercised Shares shall be considered transferred to the Optionee on the date the Option is
exercised with respect to such Exercised Shares.

     C. Method of Payment.

     Payment of the aggregate Exercise Price shall be by any of the following, or a combination
thereof, at the election of the Optionee:

          1. cash; or

          2. check; or

          3. consideration received by the Company under a cashless exercise program implemented by the
Company in connection with the Plan; or

          4. surrender of other Shares which (i) 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
(ii) have a Fair Market Value on the date of surrender equal to the aggregate Exercise Price of the
Exercised Shares; or

          5. with the Administrator’s consent, delivery of Optionee’s promissory note (the “Note”) in
the form attached hereto as Exhibit C, in the amount of the aggregate Exercise Price of the
Exercised Shares together with the execution and delivery by the Optionee of the Security Agreement
attached hereto as Exhibit B. The Note shall bear interest at the “applicable federal rate”
prescribed under the Code and its regulations at time of purchase, and shall be secured by a pledge
of the Shares purchased by the Note pursuant to the Security Agreement.

     D. Non-Transferability of Option. 

     This Option may not be transferred in any manner otherwise than by will or by the laws of
descent or distribution and may be exercised during the lifetime of Optionee only by the Optionee.
Notwithstanding the foregoing, Optionee may, in a manner and in accordance with terms specified by
the Administrator, transfer NSOs to Optionee’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. The terms of the Plan and this Option Agreement shall be
binding upon the executors, administrators, heirs, successors and assigns of the Optionee.

     E. Term of Option. 

     This Option may be exercised only within the term set out in the Notice of Grant, and may be
exercised during such term only in accordance with the Plan and the terms of this Option Agreement.

     F. Tax Consequences. 

     Some of the federal tax consequences relating to this Option, as of the date of this Option,
are set forth below. THIS SUMMARY IS NECESSARILY INCOMPLETE, AND THE TAX LAWS AND REGULATIONS ARE
SUBJECT TO CHANGE. THE OPTIONEE SHOULD CONSULT A TAX ADVISER BEFORE EXERCISING THIS OPTION OR
DISPOSING OF THE SHARES.

     G. Exercising the Option.

          1. Nonstatutory Stock Option. The Optionee may incur regular federal income tax
liability upon exercise of a NSO. The Optionee will be treated as having received compensation
income (taxable at ordinary income tax rates) equal to the excess, if any, of the Fair Market Value
of the Exercised Shares on the date of exercise over their aggregate Exercise Price. If the
Optionee is an Employee or a former Employee, the Company will be required to withhold from his or
her compensation or collect from Optionee and pay to the applicable taxing authorities an amount in
cash equal to a percentage of this compensation income at the time of exercise, and may refuse to
honor the exercise and refuse to deliver Shares if such withholding amounts are not delivered at
the time of exercise.

 

 

          2.
Incentive Stock Option. If this Option qualifies as an ISO, the Optionee will have no
regular federal income tax liability upon its exercise, although the excess, if any, of the Fair
Market Value of the Exercised Shares on the date of exercise over their aggregate Exercise Price
will be treated as an adjustment to alternative minimum taxable income for federal tax purposes and
may subject the Optionee to alternative minimum tax in the year of exercise. In the event that the
Optionee ceases to be an Employee but remains a Service Provider, any Incentive Stock Option of the
Optionee that remains unexercised shall cease to qualify as an Incentive Stock Option and will be
treated for tax purposes as a Nonstatutory Stock Option on the date three (3) months and one (1)
day following such change of status.

          3. Disposition of Shares.

               (a) NSO. If the Optionee holds NSO Shares for at least one year, any gain realized on
disposition of the Shares will be treated as long-term capital gain for federal income tax
purposes.

               (b) ISO. If the Optionee holds ISO Shares for at least one year after exercise and
two years after the grant date, any gain realized on disposition of the Shares will be treated as
long-term capital gain for federal income tax purposes. If the Optionee disposes of ISO Shares
within one year after exercise or two years after the grant date, any gain realized on such
disposition will be treated as compensation income (taxable at ordinary income rates) to the extent
of the excess, if any, of the lesser of (A) the difference between the Fair Market Value of the
Shares acquired on the date of exercise and the aggregate Exercise Price, or (B) the difference
between the sale price of such Shares and the aggregate Exercise Price. Any additional gain will
be taxed as capital gain, short-term or long-term depending on the period that the ISO Shares were
held.

               (c) Notice of Disqualifying Disposition of ISO Shares. If the Optionee sells or
otherwise disposes of any of the Shares acquired pursuant to an ISO on or before the later of (i)
two years after the grant date, or (ii) one year after the exercise date, the Optionee shall
immediately notify the Company in writing of such disposition. The Optionee agrees that he or she
may be subject to income tax withholding by the Company on the compensation income recognized from
such early disposition of ISO Shares by payment in cash or out of the current earnings paid to the
Optionee.

     H. Entire Agreement; Governing Law. 

          The Plan is incorporated herein by reference. The Plan and this Option Agreement constitute
the entire agreement of the parties with respect to the subject matter hereof and supersede in
their entirety all prior undertakings and agreements of the Company and Optionee with respect to
the subject matter hereof, and may not be modified adversely to the Optionee’s interest except by
means of a writing signed by the Company and Optionee. This agreement is governed by the internal
substantive laws, but not the choice of law rules, of Delaware.

     I. NO GUARANTEE OF CONTINUED SERVICE. 

          OPTIONEE ACKNOWLEDGES AND AGREES THAT THE VESTING OF SHARES PURSUANT TO THE VESTING SCHEDULE
HEREOF IS EARNED ONLY BY CONTINUING AS A SERVICE PROVIDER AT THE WILL OF THE COMPANY (AND NOT
THROUGH THE ACT OF BEING HIRED, BEING GRANTED AN OPTION OR PURCHASING SHARES HEREUNDER). OPTIONEE
FURTHER ACKNOWLEDGES AND AGREES THAT THIS AGREEMENT, THE TRANSACTIONS CONTEMPLATED HEREUNDER AND
THE VESTING SCHEDULE SET FORTH HEREIN DO NOT CONSTITUTE AN EXPRESS OR IMPLIED PROMISE OF CONTINUED
ENGAGEMENT AS A SERVICE PROVIDER FOR THE VESTING PERIOD, FOR ANY PERIOD, OR AT ALL, AND SHALL NOT
INTERFERE WITH OPTIONEE’S RIGHT OR THE COMPANY’S RIGHT TO TERMINATE OPTIONEE’S RELATIONSHIP AS A
SERVICE PROVIDER AT ANY TIME, WITH OR WITHOUT CAUSE.

     By your signature and the signature of the Company’s representative, you and the Company agree
that this Option is granted under and governed by the terms and conditions of the Plan and this
Option Agreement. Optionee has reviewed the Plan and this Option Agreement in their entirety, has
had an opportunity to obtain the advice of counsel prior to executing this Option Agreement and
fully understands all provisions of the Plan and Option Agreement. Optionee hereby agrees to
accept as binding, conclusive and final all decisions or interpretations of the Administrator upon
any questions relating to the Plan and Option Agreement. Optionee further agrees to notify the
Company upon any change in the residence address indicated on page one.

 

 

BROCADE COMMUNICATIONS SYSTEMS, INC.

1999 STOCK PLAN (AS AMENDED AND RESTATED)

RESTRICTED STOCK UNIT AGREEMENT

NOTICE OF GRANT

%%FIRST_NAME%-% %%MIDDLE_NAME%-% %%LAST_NAME%-%

You (“Grantee”) have been granted an award of Restricted Stock Units under the Company’s Amended
and Restated 1999 Stock Plan (the “Plan”). The date of this Restricted Stock Units Agreement (the
“Agreement”) is the Grant Date defined below. Subject to the provisions of Appendix A and the
Plan, which are attached hereto and incorporated herein in their entirety, the principal features
of this award are as follows:

	 	 	 
	Grant Date:

	 	%%AWARD_DATE,’Month DD,YYYY’%-% (the “Grant Date”)
	 
	 	 
	Number of Restricted
Stock Units:

	 	%%TOTAL_SHARES_GRANTED,’999,999,999’%-% (the “Number of Restricted
Stock Units”)
	 
	 	 
	Vesting Schedule:

	 	The Restricted Stock Units will
vest in accordance with the
following Vesting Schedule;
provided, Grantee remains a
Service Provider to the Company
through the applicable vesting
dates (the “Vesting Schedule”):

	 	 	 	 	 
	 	 	# Shares	 	Vest Date
	 

	 	%%SHARES_PERIOD1,’999,999,999’%-%
	 	%%VEST_DATE_PERIOD1,’MM/DD/YYYY’%-%

Your acceptance online indicates your agreement and understanding that this award is subject to all
of the terms and conditions contained in Appendix A and the Plan. For example, important
additional information on vesting and forfeiture of the Restricted Stock Units is contained in
Sections 3 through 5 and Section 7 of Appendix A. PLEASE BE SURE TO READ ALL OF APPENDIX A AND THE
PLAN, WHICH CONTAIN THE SPECIFIC TERMS AND CONDITIONS OF THIS AWARD.

	 	 	 	 	 
	BROCADE COMMUNICATIONS SYSTEMS, INC.

	 	 
	 	GRANTEE
	 
	 	 	 	 
	 
	 	 	 	 
	 

	 	 	 	 
	Signature

	 	 	 	Signature
	 
	 	 	 	 
	 
	 	 	 	 
	 

	 	 	 	 
	Print Name

	 	 	 	Print Name
	 
	 	 	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	Title
	 	 	 	 

 

 

APPENDIX A

TERMS AND CONDITIONS OF RESTRICTED STOCK UNITS

     Unless otherwise defined herein, capitalized terms used herein shall have the meanings
ascribed to them in the Plan.

     1. Grant.

          (a) The Company hereby grants to the Grantee under the Plan an award of the Number of
Restricted Stock Units set forth on the Notice of Grant, subject to all of the terms and conditions
in this Agreement and the Plan. For each Restricted Stock Unit that vests, the Grantee will be
entitled to receive one (1) Share (subject to automatic adjustment for stock splits, combinations
and other adjustments contemplated in the Plan).

          (b) When Shares are paid to the Grantee in payment for the Restricted Stock Units, par value
($.001 per share) will be deemed paid by the Grantee for each Restricted Stock Unit by services
rendered by the Grantee, and will be subject to the appropriate tax withholdings.

     2. Company’s Obligation to Pay. Each Restricted Stock Unit has a value equal to the
Fair Market Value of a Share on the date that the Restricted Stock Unit is granted. Unless and
until the Restricted Stock Units have vested in the manner set forth in Sections 3 through 5, the
Grantee will have no right to payment of such Restricted Stock Units. Prior to actual payment of
Shares upon the vesting of any Restricted Stock Units, such Restricted Stock Units will represent
an unsecured obligation. Payment of any vested Restricted Stock Units shall be made in whole
Shares only and any fractional Shares will be forfeited at the time of payment.

     3. Vesting Schedule/Period of Restriction. Except as provided in Sections 4 and 5,
and subject to Section 7, the Restricted Stock Units awarded by this Agreement shall vest in
accordance with the vesting provisions set forth on the Notice of Grant. Restricted Stock Units
shall not vest in accordance with any of the provisions of this Agreement unless the Grantee shall
have been continuously employed by the Company or by its Parent or other successor or a Subsidiary
from the Grant Date through the dates the Restricted Stock Units are otherwise scheduled to vest.

     4. Modifications to Vesting Schedule.

          (a) Vesting upon Leave of Absence. In the event that the Grantee takes an authorized leave of
absence (“LOA”), the Restricted Stock Units awarded by this Agreement that are eligible to be
earned shall either: (i) not be affected, or (ii) shall be

 

 

deferred for a period of time equal to the duration of such LOA, based on the Company’s LOA
policy in effect at such time as determined by the Company in its sole discretion.

          (b) Death or Disability of Grantee. In the event that the Grantee’s relationship with the
Company or its Parent or other successor or a Subsidiary as a Service Provider is terminated prior
to full vesting of the Restricted Stock Units due to his or her death or Disability, the unvested
portion of the Restricted Stock Units subject to this Restricted Stock Unit award shall be
forfeited on the date of the Grantee’s death or Disability.

     5. Administrator Discretion. The Administrator, in its discretion, may accelerate the
vesting of the balance, or some lesser portion of the balance, of the Restricted Stock Units at any
time, subject to the terms of the Plan. Such acceleration may result in tax or other consequences
to the Grantee. If so accelerated, such Restricted Stock Units will be considered as having vested
as of the date specified by the Administrator. If the Administrator, in its discretion,
accelerates the vesting of the balance, or some lesser portion of the balance, of the Restricted
Stock Units, the payment of such accelerated Restricted Stock Units nevertheless shall be made at
the same time or times as if such Restricted Stock Units had vested in accordance with the vesting
schedule set forth on the Notice of Grant and Section 1 of this Agreement or as otherwise provided
herein (whether or not the Grantee remains employed by the Company or by one of its Subsidiaries as
of such date(s)). The Grantee is hereby advised to consult with the Grantee’s own personal tax,
legal and financial advisors regarding the Grantee’s participation in the Plan before taking any
action related to the Plan.

     6. Payment after Vesting. Any Restricted Stock Units that vest in accordance with
Sections 3 through 4 of this Agreement will be paid to the Grantee (or in the event of the
Grantee’s death, to his or her estate) as soon as practicable following the applicable vesting
date, subject to Section 9, but no later than March 15th of the calendar year following
the applicable vesting date.

     7. Forfeiture. The balance of the Restricted Stock Units that have not vested
pursuant to Sections 3 through 5 at the time of the termination of the Grantee’s relationship with
the Company as a Service Provider for any or no reason will be forfeited.

     8. [Reserved.]

     9. Withholding of Taxes.

          (a) General. Regardless of any action the Company and/or the Grantee’s employer (the
“Employer”) take with respect to any or all income tax (including U.S. federal, state, local and/or
non-U.S. taxes), social insurance, payroll tax, payment on account or other tax-related
withholdings (“Tax-Related Items”), the Grantee acknowledges that the ultimate liability for all
Tax-Related Items legally due by the Grantee is and remains the Grantee’s responsibility and that
the Company and/or the Employer (i) make no guarantees or undertakings regarding the treatment of
any Tax-

 

 

Related Items in connection with any aspect of the award, including the grant of the
Restricted Stock Units, the vesting of the Restricted Stock Units, the delivery of Shares, the
subsequent sale of any Shares received at vesting and the receipt of any dividends; and (ii) do not
commit to structure the terms of the grant or any aspect of the award to reduce or eliminate the
Grantee’s liability for Tax-Related Items.

          (b) Payment of Tax-Related Items. The Grantee authorizes the Company and/or the
Employer, at its discretion, to satisfy the obligations with regard to all Tax-Related Items by
withholding a portion of the Shares issued as payment for vested Restricted Stock Units that have
an aggregate market value sufficient to pay all Tax-Related Items required to be withheld by the
Company and/or the Employer with respect to the vesting of the Restricted Stock Units and issuance
of the Shares, unless the Company, in its sole discretion, either requires or otherwise permits the
Grantee to make alternate arrangements satisfactory to the Company for such withholdings in advance
of the arising of any withholding obligations. The number of Shares withheld pursuant to the prior
sentence will be rounded up to the nearest whole Share, with no refund for any value of the Shares
withheld in excess of the tax obligation as a result of such rounding.

          If the obligation of Tax-Related Items is satisfied by reducing the number of Shares delivered
as described herein, the Grantee is deemed to have been issued the full number of Shares subject to
the award of Restricted Stock Units, notwithstanding that a number of the Shares are held back
solely for the purpose of paying the Tax-Related Items due as a result of any aspect of the award.

          If the foregoing method of withholding is prohibited or insufficient to satisfy all
Tax-Related Items required to be withheld by the Company and/or the Employer with respect to the
vesting of the Restricted Stock Units and issuance of the Shares or if the Company, in its
discretion, determines not to apply the foregoing method of withholding, then the Grantee hereby
authorizes the Company and/or the Employer to satisfy such obligations by one or a combination of
the following: (i) withholding from the Grantee’s wages or other cash compensation paid to the
Grantee by the Company and/or the Employer, to the maximum extent permitted by law; or (ii) selling
the applicable number of Shares or arranging for the sale of the applicable number of Shares (in
either case on the Grantee’s behalf and at the Grantee’s discretion pursuant to this authorization)
issued in settlement of vested Restricted Stock Units and retaining the requisite proceeds from
such sale.

          Finally, the Grantee shall pay to the Company and/or the Employer any amount of Tax-Related
Items that the Company and/or the Employer may be required to withhold as a result of the Grantee’s
participation in the Plan that cannot be satisfied by the means previously described. The Company
may refuse to deliver to the Grantee any Shares pursuant to the award if the Grantee fails to
comply with the Grantee’s obligations in connection with the Tax-Related Items, as described in
this Section 9.

     10. Rights as Stockholder. Neither the Grantee nor any person claiming under or
through the Grantee will have any of the rights or privileges of a stockholder of the Company in
respect of any Shares deliverable hereunder unless and until certificates

 

 

representing such Shares (which may be in book entry form) will have been issued, recorded on
the records of the Company or its transfer agents or registrars, and delivered to the Grantee
(including through electronic delivery to a brokerage account). After such issuance, recordation
and delivery, the Grantee will have all the rights of a stockholder of the Company with respect to
voting such Shares and receipt of dividends and distributions on such Shares.

     11. No Effect on Employment. Subject to any employment contract with the Grantee, the
terms of such employment will be determined from time to time by the Company, or the Subsidiary
employing the Grantee, as the case may be, and the Company, or the Subsidiary employing the
Grantee, as the case may be, will have the right, which is hereby expressly reserved, to terminate
or change the terms of the employment of the Grantee at any time for any reason whatsoever, with or
without good cause. The transactions contemplated hereunder and the vesting schedule set forth on
the first page of this Agreement do not constitute an express or implied promise of continued
employment for any period of time. A leave of absence or an interruption in service (including an
interruption during military service) authorized or acknowledged by the Company or the Subsidiary
employing the Grantee, as the case may be, shall not be deemed a termination of the Grantee’s
relationship with the Company or its Subsidiary as a Service Provider for the purposes of this
Agreement.

     12. Address for Notices. Any notice to be given to the Company under the terms of
this Agreement will be addressed to the Company, in care of Stock Administrator, at 1745 Technology
Drive, San Jose, California, 95110, USA, or at such other address as the Company may hereafter
designate in writing, with a copy to the Company, C/O General Counsel, 1745 Technology Drive, San
Jose, California, 95110, USA.

     13. Grant is Not Transferable. Except to the limited extent provided in this
Agreement or the Plan, this grant of Restricted Stock Units and the rights and privileges conferred
hereby will not be sold, pledged, assigned, hypothecated, transferred or disposed of any way
(whether by operation of law or otherwise) and will not be subject to sale under execution,
attachment or similar process, until the Grantee has been issued Shares in payment of the
Restricted Stock Units. Upon any attempt to sell, pledge, assign, hypothecate, transfer or
otherwise dispose of this grant, or any right or privilege conferred hereby, or upon any attempted
sale under any execution, attachment or similar process, this grant and the rights and privileges
conferred hereby immediately will become null and void. Notwithstanding the foregoing, Grantee
may, in a manner and in accordance with terms specified by the Administrator, transfer these
Restricted Stock Units to Grantee’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.

     14. Restrictions on Sale of Securities. The Shares issued as payment for vested
Restricted Stock Units under this Agreement will be registered under U.S. federal securities laws
and will be freely tradable upon receipt. However, a Grantee’s subsequent sale of the Shares may
be subject to any market blackout-period that may be

 

 

imposed by the Company and must comply with the Company’s insider trading policies, and any
other U.S. securities laws or other Applicable Laws.

     15. Binding Agreement. Subject to the limitation on the transferability of this grant
contained herein, this Agreement will be binding upon and inure to the benefit of the heirs,
legatees, legal representatives, successors and assigns of the parties hereto.

     16. Additional Conditions to Issuance of Certificates for Shares. The Company shall
not be required to issue any certificate or certificates for Shares hereunder prior to fulfillment
of all the following conditions: (a) the admission of such Shares to listing on all stock
exchanges on which such class of stock is then listed; (b) the completion of any registration or
other qualification of such Shares under any U.S. state or federal or non-U.S. law or under the
rulings or regulations of the Securities and Exchange Commission or any other governmental
regulatory body, which the Administrator shall, in its absolute discretion, deem necessary or
advisable; (c) the obtaining of any approval or other clearance from any U.S. state or federal or
non-U.S. governmental agency, which the Administrator shall, in its absolute discretion, determine
to be necessary or advisable; and (d) the lapse of such reasonable period of time following the
Vesting Date of the Restricted Stock Units as the Administrator may establish from time to time for
reasons of administrative convenience.

     17. Plan Governs. This Agreement is subject to all the terms and provisions of the
Plan. In the event of a conflict between one or more provisions of this Agreement and one or more
provisions of the Plan, the provisions of the Plan will govern.

     18. Administrator Authority. The Administrator will have the power to interpret the
Plan and this Agreement and to adopt such rules for the administration, interpretation and
application of the Plan as are consistent therewith and to interpret or revoke any such rules
(including, but not limited to, the determination of whether or not any Restricted Stock Units have
vested). All actions taken and all interpretations and determinations made by the Administrator in
good faith will be final and binding upon the Grantee, the Company and all other interested
persons. No member of the Administrator will be personally liable for any action, determination or
interpretation made in good faith with respect to the Plan or this Agreement.

     19. Captions. Captions provided herein are for convenience only and are not to serve
as a basis for interpretation or construction of this Agreement.

     20. Agreement Severable. In the event that any provision in this Agreement will be
held invalid or unenforceable, such provision will be severable from, and such invalidity or
unenforceability will not be construed to have any effect on, the remaining provisions of this
Agreement.

     21. Modifications to the Agreement. This Agreement, including Appendix A, together
with the Plan, constitutes the entire understanding of the parties on the subjects covered, subject
to any applicable pre-existing agreement or agreement entered into after the date hereof relating
to full or partial acceleration of vesting in the event of a change of

 

 

control of the Company (or similar event). The Grantee expressly warrants that he or she is
not accepting this Agreement in reliance on any promises, representations, or inducements other
than those contained herein or expressly contemplated above. Modifications to this Agreement or
the Plan can be made only in an express written contract executed by a duly authorized officer of
the Company. Notwithstanding anything to the contrary in the Plan or this Agreement, the Company
reserves the right to revise this Agreement as it deems necessary or advisable, in its sole
discretion and without the consent of the Grantee, to comply with Section 409A of the Code or to
otherwise avoid imposition of any additional tax or income recognition under Section 409A of the
Code prior to the actual payment of Shares pursuant to this award of Restricted Stock Units.
Notwithstanding the foregoing, if required by Section 409A of the Internal Revenue Code of 1986, as
amended (the “Code”), no Restricted Stock Units will be paid to the Grantee (or in the event of the
Grantee’s death, to his or her estate) earlier than six (6) months and one (1) day following the
date of the Termination of the Grantee’s relationship with the Company as a Service Provider,
subject to Section 9.

     22. Amendment, Suspension or Termination of the Plan. By accepting this Restricted
Stock Units award, the Grantee expressly warrants that he or she has received a right to receive
stock under the Plan, and has received, read and understood a description of the Plan. The Grantee
understands that the Plan is discretionary in nature and may be modified, amended, suspended or
terminated by the Company at any time, except as otherwise provided in the Plan and/or the
Agreement.

     23. Labor Law and Nature of Grant. In accepting the award of Restricted Stock Units,
the Grantee acknowledges that:

          (a) the Plan is established voluntarily by the Company;

          (b) the award of Restricted Stock Units is voluntary and occasional and does not create any
contractual or other right to receive future awards of Restricted Stock Units, or benefits in lieu
of Restricted Stock Units even if Restricted Stock Units have been awarded repeatedly in the past;

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

          (d) the Grantee’s participation in the Plan is voluntary;

          (e) the award is an extraordinary item that is outside the scope of the Grantee’s employment
or service contract, if any;

          (f) the award is not part of normal or expected compensation or salary for any purposes,
including, but not limited to, calculation of any severance, resignation, termination, redundancy,
end of service payments, bonuses, long-service awards, pension or retirement or welfare benefits or
similar payments;

          (g) in the event that the Grantee is not an employee of the Company, the award will not be
interpreted to form an employment or service contract or

 

 

relationship with the Company; and, furthermore, the award will not be interpreted to form an
employment or service contract or relationship with the Employer or any Parent or other successor
or a Subsidiary of the Company;

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

          (i) the Company is not providing any tax, legal, or financial advice, nor is the Company
making any recommendations regarding the Grantee’s participation in the Plan or the acquisition or
sale of Shares; and

          (j) the Grantee is hereby advised to consult with the Grantee’s own personal tax, legal and
financial advisors regarding the Grantee’s participation in the Plan before taking any action
related to the Plan.

     24. Data Privacy. The Grantee hereby explicitly and unambiguously consents to the
collection, use and transfer, in electronic or other form, of the Grantee’s personal data as
described in the Notice of Grant and this Agreement and any other Restricted Stock Unit grant
materials by and among, as applicable, the Employer, the Company and its Subsidiaries for the
exclusive purpose of implementing, administering and managing the Grantee’s participation in the
Plan.

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

          The Grantee understands that Data will be transferred to E*Trade or such other stock plan
service provider as may be selected by the Company in the future, which is assisting the Company
with the implementation, administration and management of the Plan. The Grantee understands the
recipients of Data may be located in the Grantee’s country, in the United States or elsewhere, and
that the recipients’ country may have different data privacy laws and protections than the
Grantee’s country. The Grantee understands that the Grantee may request a list with the names and
addresses of any potential recipients of the Data by contacting the Grantee’s local human resources
representative. The Grantee authorizes the Company, E*Trade and any other potential recipients
which may assist the Company (presently or in the future) with implementing, administering and
managing the Plan to receive, possess, use, retain and transfer the Data, in electronic or other
form, for the sole purpose of implementing, administering and managing the Grantee’s participation
in the Plan. The Grantee understands that he or she may, at any time, view the Data, request
additional information about the storage and processing of the Data, require any necessary
amendments to the Data or refuse or withdraw the consents herein, in any case without cost, by
contacting in writing the Grantee’s local human resources representative. The Grantee understands,
however, that

 

 

refusing or withdrawing consent may affect the Grantee’s ability to participate in the Plan.
For more information on the consequences of the Grantee’s refusal to consent or withdrawal of
consent, the Grantee understands that he or she may contact his or her local human resources
representative.

     25. Notice of Governing Law. This award of Restricted Stock Units shall be governed
by, and construed in accordance with, the laws of the State of California, without regard to
principles of conflict of laws. For purposes of litigating any dispute that arises directly or
indirectly from the relationship of the parties evidenced by the award of Restricted Stock Units,
the parties hereby submit to and consent to the exclusive jurisdiction of the State of California
and agree that such litigation shall be conducted on in the courts of Santa Clara County,
California or the federal courts for the United States for the Northern District of California, and
no other courts, where this grant is made and/or to be performed.

     26. Electronic Delivery. The Company may, in its sole discretion, decide to deliver
any documents related to Restricted Stock Units awarded under the Plan or future Restricted Stock
Units that may be awarded under the Plan by electronic means, or to request the Grantee’s consent
to participate in the Plan by electronic means. The Grantee hereby consents to receive such
documents by electronic delivery and if requested, to agree to participate in the Plan through an
on-line or electronic system established and maintained by the Company or another third party
designated by the Company.

 

 

BROCADE COMMUNICATIONS SYSTEMS, INC.

1999 STOCK PLAN

NOTICE OF GRANT OF STOCK PURCHASE RIGHT

[Name of Purchaser]:

     You have been granted the right to purchase Common Stock of Brocade Communications Systems,
Inc. (the “Company”), subject to your ongoing status as a Service Provider (as described in the
Plan) and the forfeiture provision and other terms and conditions set forth in the attached
Restricted Stock Purchase Agreement, as follows:

	 	 	 	 	 
	 

	 	Grant Number
	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	Date of Grant	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	Purchase Price Per Share
	 	 $0.001 per share (par value)
	 
	 	 	 	 
	 

	 	Fair Market Value on Grant Date
	 	 $
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	Total Number of Shares Subject	 	 
	 

	 	 	 	 
	 

	 	to This Stock Purchase Right	 	 
	 
	 	 	 	 
	 

	 	Expiration Date:	 	 
	 

	 	 	 	 

     YOU MUST EXERCISE THIS STOCK PURCHASE RIGHT BEFORE THE EXPIRATION DATE OR IT WILL TERMINATE
AND YOU WILL HAVE NO FURTHER RIGHT TO PURCHASE THE SHARES. By your signature and the signature of
the Company’s representative below, you and the Company agree that this Stock Purchase Right is
granted under and governed by the terms and conditions of the 1999 Stock Plan and the Restricted
Stock Purchase Agreement, attached hereto as Exhibit A-1, both of which are made a part of this
document. You further agree to execute the attached Restricted Stock Purchase Agreement as a
condition to purchasing any shares under this Stock Purchase Right. Unless otherwise defined
herein, the terms defined in the Plan shall have the same defined meanings in this Notice of Grant.

	 	 	 
	Purchaser:

	 	Brocade Communications Systems, Inc.
	 
	 	 
	 
	 	 
	 

	 	 
	Signature

	 	Signature
	 
	 	 
	 
	 	 
	 

	 	 
	Print Name

	 	Print Name
	 
	 	 
	 
	 	 
	 

	 	 
	 

	 	Title

 

 

EXHIBIT A-1

1999 STOCK PLAN

RESTRICTED STOCK PURCHASE AGREEMENT

     Unless otherwise defined herein, the defined terms in this Restricted Stock Purchase Agreement
shall have the same meanings as defined in the 1999 Stock Plan (the “Plan”).

     WHEREAS the Purchaser named in the Notice of Grant (the “Purchaser”) is a Service Provider,
and the Purchaser’s continued participation is considered by the Company to be important for the
Company’s continued growth; and

     WHEREAS in order to give the Purchaser an opportunity to acquire an equity interest in the
Company as an incentive for the Purchaser to participate in the affairs of the Company, the
Administrator has granted to the Purchaser a Stock Purchase Right subject to the terms and
conditions of the Plan and the Notice of Grant, which are incorporated herein by reference, and
pursuant to this Restricted Stock Purchase Agreement (the “Agreement”).

     NOW THEREFORE, the parties agree as follows:

     1. Sale of Stock. The Company hereby agrees to sell to the Purchaser and the
Purchaser hereby agrees to purchase shares of the Company’s Common Stock (the “Shares”), at the per
Share purchase price and as otherwise described in the Notice of Grant.

     2. Payment of Purchase Price. The purchase price for the Shares may be paid by
delivery to the Company at the time of execution of this Agreement of cash, a check, or some
combination thereof.

     3. Forfeiture. Except as provided and subject to the provisions of Section 13 of the
Plan, and only in the event the Purchaser ceases to be a Service Provider for any or no reason
(including death or disability) before the Restriction Period lapses with respect to all of the
Shares (see Section 4), all of the Shares which constitute Unreleased Shares shall be automatically
forfeited by the Purchaser (without any further consideration or notice from the Company),
effective upon the date of such termination (as determined by the Company). Upon forfeiture of the
Unreleased Shares, the Company shall become the legal and beneficial owner of the Shares which
constitute Unreleased Shares and all rights and interests therein or relating thereto, and the
Company shall have the right to retain and transfer to its own name the number of Unreleased
Shares.

     4. Vesting of Shares and Expiration of Restriction Period.

          (a) Except as provided by and subject to the provisions of Section 13 of the Plan, upon the
[___] anniversary of the Date of Grant, the Restriction Period shall lapse with respect to one
hundred percent (100%) of the Shares. On such anniversary or such earlier period under Section 13 of the Plan, all of the Shares shall be vested as to the Purchaser and no longer subject to
forfeiture to the Company.

 

 

          (b) Any of the Shares subject to the Restriction Period that have not yet vested are referred
to herein as “Unreleased Shares.”

          (c) The Shares with respect to which the Restriction Period has expired shall be delivered to
the Purchaser upon the expiration of the Restriction Period. (See Section 7.)

     5. [Intentionally Omitted].

     6. Restriction on Transfer. Except for the escrow described in Section 7 or the
transfer of the Shares to the Company contemplated by this Agreement, none of the Shares or any
beneficial interest therein shall be transferred, encumbered or otherwise disposed of in any way
until the Restriction Period expires with respect to such Shares in accordance with the provisions
of this Agreement, other than by will or the laws of descent and distribution, or as specified in
the following sentence. Purchaser may, in a manner and in accordance with terms specified by the
Administrator, transfer Shares or beneficial interest in Shares to Purchaser’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.

     7. Escrow of Shares.

          (a) To ensure the availability for delivery of the Unreleased Shares upon forfeiture, the
Purchaser shall, upon execution of this Agreement, deliver and deposit with an escrow holder
designated by the Company (the “Escrow Holder”) the share certificates representing the Unreleased
Shares, together with the stock assignment duly endorsed in blank, attached hereto as Exhibit A-2.
The Unreleased Shares and stock assignment shall be held by the Escrow Holder, pursuant to the
Joint Escrow Instructions of the Company and Purchaser attached hereto as Exhibit A-3, until such
time as the Company’s Restriction Period expires. As a further condition to the Company’s
obligations under this Agreement, the Company may require the spouse of Purchaser, if any, to
execute and deliver to the Company the Consent of Spouse attached hereto as Exhibit A-4.

          (b) The Escrow Holder shall not be liable for any act it may do or omit to do with respect to
holding the Unreleased Shares in escrow while acting in good faith and in the exercise of its
judgment.

          (c) Upon forfeiture of the Unreleased Shares pursuant to this Agreement, the Escrow Holder,
upon receipt of written notice of such exercise from the proposed transferee, shall take all steps
necessary to accomplish such transfer.

          (d) Upon forfeiture of the Unreleased Shares, the Escrow Holder shall promptly cause the
certificate representing the Shares which constitute the Unreleased Shares to be delivered to the
Company. If the Restriction Period lapses with respect to a portion or all of the Shares, upon
request the Escrow Holder shall promptly cause a new certificate to be issued for the Shares no
longer subject to forfeiture and delivered to the Purchaser free of any legend or restriction,
subject to Applicable Laws.

-2-

 

          (e) Subject to the terms hereof, the Purchaser shall have all the rights of a shareholder with
respect to the Shares while they are held in escrow, including without limitation, the right to
vote the Shares and to receive any cash dividends declared thereon. If, from time to time during
the term of the Restriction Period, there is any (i) stock dividend, stock split or other change in
the Shares, or (ii) merger or sale of all or substantially all of the assets or other acquisition
of the Company, any and all new, substituted or additional securities to which the Purchaser is
entitled by reason of the Purchaser’s ownership of the Shares shall be immediately subject to this
escrow, deposited with the Escrow Holder and included thereafter as “Shares” for purposes of this
Agreement and subject to the Restriction Period (to the extent the Shares would have otherwise been
subject to the Restriction Period).

     8. Legends. The share certificate evidencing the Shares, if any, issued hereunder
shall be endorsed with the following legend (in addition to any legend required under applicable
federal, state or other securities laws):

          THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN RESTRICTIONS UPON TRANSFER
AND RIGHTS OF REPURCHASE AS SET FORTH IN AN AGREEMENT BETWEEN THE COMPANY AND THE SHAREHOLDER, A
COPY OF WHICH IS ON FILE WITH THE COMPANY.

     9. Adjustment for Stock Split. All references to the number of Shares and the
purchase price of the Shares in this Agreement shall be appropriately adjusted to reflect any stock
split, stock dividend or other change in the Shares that may be made by the Company after the date
of this Agreement.

     10. Withholding of Taxes; Tax Consequences.

          (a) Notwithstanding any contrary provision of this Agreement, no certificate representing the
Shares, whether or not such Shares represent Unreleased Shares, may be released from the escrow
established pursuant to Section 7, unless and until satisfactory arrangements (as determined by the
Administrator) will have been made by the Purchaser with respect to the payment of income,
employment and other taxes which the Company determines must be withheld with respect to such
Shares. The Administrator, in its sole discretion and pursuant to such procedures as it may
specify from time to time, may permit the Purchaser to satisfy such tax withholding obligation, in
whole or in part by one or more of the following: (a) paying cash, (b) electing to have the Company
withhold otherwise deliverable Shares having a Fair Market Value equal to the minimum amount
required to be withheld, (c) delivering to the Company already vested and owned Shares having a
Fair Market Value equal to the amount required to be withheld, or (d) selling a sufficient number
of such Shares otherwise deliverable to Purchaser through such means as the Company may determine
in its sole discretion (whether through a broker or otherwise) equal to the minimum amount required
to be withheld. Notwithstanding the foregoing, if the Purchaser fails to make other arrangements
satisfactory to the Company for the payment of any required tax
withholding obligations hereunder at the time any Shares are scheduled to vest pursuant to
Section 4 (or otherwise give rise to tax withholding obligations by the employer and employee with
respect to such Shares), Purchaser hereby authorizes and directs the Company to withhold and cancel
on each

-3-

 

vesting date (or other applicable date) that number of Shares, rounded up to the nearest
whole share, equal to the amount of the employer and employee tax withholdings and other applicable
payroll taxes with respect to such tax withholding event based, divided by the closing price of the
Company’s common stock on the vesting (or other applicable) date. With respect to the Shares
withheld and cancelled by the Company for tax withholding purposes, such Shares shall be returned
to the Company, the Company shall be deemed to be the legal and beneficial owner of such Shares,
and the Company shall have the right to retain and transfer such Shares to its own name for
cancellation.

          (b) The Purchaser has reviewed with the Purchaser’s own tax advisors the federal, state, local
and foreign tax consequences of this investment and the transactions contemplated by this
Agreement. The Purchaser is relying solely on such advisors and not on any statements or
representations of the Company or any of its agents. The Purchaser understands that the Purchaser
(and not the Company) shall be responsible for the Purchaser’s own tax liability that may arise as
a result of the transactions contemplated by this Agreement. The Purchaser understands that
Section 83 of the Internal Revenue Code of 1986, as amended (the “Code”), taxes as ordinary income
the difference between the purchase price for the Shares and the Fair Market Value of the Shares as
of the date any restrictions on the Shares lapse. In this context, “restriction” includes the
forfeiture provision pursuant to Section 3 of the Agreement. The Purchaser understands that the
Purchaser may elect to be taxed at the time the Shares are purchased rather than when and as the
Restriction Period lapses by filing an election under Section 83(b) of the Code with the IRS within
30 days from the date of purchase. The form for making this election is attached as Exhibit A-5
hereto.

          THE PURCHASER ACKNOWLEDGES THAT IT IS THE PURCHASER’S SOLE RESPONSIBILITY AND NOT THE
COMPANY’S TO FILE TIMELY THE ELECTION UNDER SECTION 83(b), EVEN IF THE PURCHASER ASKS THE COMPANY
OR ITS REPRESENTATIVES TO MAKE THIS FILING ON THE PURCHASER’S BEHALF.

     11. General Provisions.

          (a) This Agreement shall be governed by the internal substantive laws, but not the choice of
law rules of California. This Agreement, subject to the terms and conditions of the Plan and the
Notice of Grant, represents the entire agreement between the parties with respect to the purchase
of the Shares by the Purchaser. Subject to Section 15(c) of the Plan, in the event of a conflict
between the terms and conditions of the Plan and the terms and conditions of this Agreement, the
terms and conditions of this Agreement shall prevail. Unless otherwise defined herein, the terms
defined in the Plan shall have the same defined meanings in this Agreement.

          (b) Any notice, demand or request required or permitted to be given by either the Company or
the Purchaser pursuant to the terms of this Agreement shall be in writing and shall be deemed given
when delivered personally or deposited in the U.S. mail, First Class with postage
prepaid, and addressed to the parties at the addresses of the parties set forth at the end of
this Agreement or such other address as a party may request by notifying the other in writing.

               Any notice to the Escrow Holder shall be sent to the Company’s address with a copy to the
other party hereto.

-4-

 

          (c) The rights of the Company under this Agreement shall be transferable to any one or more
persons or entities, and all covenants, obligations and agreements hereunder shall inure to the
benefit of, and be enforceable by the Company’s successors and assigns. The rights and obligations
of the Purchaser under this Agreement may only be assigned with the prior written consent of the
Company.

          (d) Either party’s failure to enforce any provision of this Agreement shall not in any way be
construed as a waiver of any such provision, nor prevent that party from thereafter enforcing any
other provision of this Agreement. The rights granted both parties hereunder are cumulative and
shall not constitute a waiver of either party’s right to assert any other legal remedy available to
it.

          (e) The Purchaser agrees upon request to execute any further documents or instruments
necessary or desirable to carry out the purposes or intent of this Agreement.

          (f) PURCHASER ACKNOWLEDGES AND AGREES THAT THE VESTING OF SHARES PURSUANT TO SECTION 4 HEREOF
IS EARNED ONLY BY CONTINUING SERVICE AS A SERVICE PROVIDER AT THE WILL OF THE COMPANY (OR THE
PARTENT OR SUBSIDIARY EMPLOYING OR RETAINING PURCHASER) AND NOT THROUGH THE ACT OF BEING HIRED OR
PURCHASING SHARES HEREUNDER AND OTHER THAN AS SET FORTH IN SECTION 13 OF THE PLAN. PURCHASER
FURTHER ACKNOWLEDGES AND AGREES THAT THIS AGREEMENT, THE TRANSACTIONS CONTEMPLATED HEREUNDER AND
THE VESTING SCHEDULE SET FORTH HEREIN DO NOT CONSTITUTE AN EXPRESS OR IMPLIED PROMISE OF CONTINUED
ENGAGEMENT AS A SERVICE PROVIDER FOR THE VESTING PERIOD, FOR ANY PERIOD, OR AT ALL, AND SHALL NOT
INTERFERE WITH PURCHASER’S RIGHT OR THE RIGHT OF THE COMPANY (OR THE PARENT OR SUBSIDIARY EMPLOYING
OR RETAINING PURCHASER) TO TERMINATE PURCHASER’S RELATIONSHIP AS A SERVICE PROVIDER AT ANY TIME,
WITH OR WITHOUT CAUSE.

-5-

 

     By Purchaser’s signature below, Purchaser represents that he or she is familiar with the terms
and provisions of the Plan, and hereby accepts this Agreement subject to all of the terms and
provisions thereof. Purchaser has reviewed the Plan and this Agreement in their entirety, has had
an opportunity to obtain the advice of counsel prior to executing this Agreement and fully
understands all provisions of this Agreement. Purchaser agrees to accept as binding, conclusive
and final all decisions or interpretations of the Administrator upon any questions arising under
the Plan or this Agreement. Purchaser further agrees to notify the Company upon any change in the
residence indicated in the Notice of Grant.

	 	 	 	 	 
	DATED:

	 	 	 	 
	 

	 	 	 	 

	 	 	 
	PURCHASER:

	 	BROCADE COMMUNICATIONS SYSTEMS, INC.
	 
	 	 
	 
	 	 
	 

	 	 
	Signature

	 	Signature
	 
	 	 
	 
	 	 
	 

	 	 
	Print Name

	 	Print Name
	 
	 	 
	 
	 	 
	 

	 	 
	 

	 	Title

-6-

 

EXHIBIT A-2

ASSIGNMENT SEPARATE FROM CERTIFICATE

     FOR VALUE RECEIVED I,                  
                    , hereby sell, assign and transfer unto                                      
                       
(                    ) shares of the Common Stock of Brocade Communications Systems, Inc. (the “Company”)
standing in my name of the books of said corporation represented by Certificate No.       herewith
and do hereby irrevocably constitute and appoint                                          to transfer the said stock on the books of the within named corporation with full power of
substitution in the premises.

     This Stock Assignment may be used only in accordance with the Restricted Stock Purchase
Agreement (the “Agreement”) between the Company and the undersigned dated                     , ___.

Dated:                     , _____

	 	 	 	 	 
	 

	 	Signature:	 	 
	 

	 	 	 	 

 

 

 

     INSTRUCTIONS: Please do not fill in any blanks other than the signature line. The purpose of
this assignment is to facilitate the forfeiture and transfer of any Unreleased Shares as set forth
in the Agreement without requiring additional signatures on the part of the Purchaser.

 

 

EXHIBIT A-3

JOINT ESCROW INSTRUCTIONS

________, __

[Escrow Agent Name]

[Escrow Agent Address]

Dear                     :

     As Escrow Agent for both Brocade Communications Systems, Inc., a Delaware corporation (the
“Company”), and the undersigned purchaser of stock of the Company (the “Purchaser”), you are hereby
authorized and directed to hold the documents delivered to you pursuant to the terms of that
certain Restricted Stock Purchase Agreement (“Agreement”) between the Company and the undersigned,
in accordance with the following instructions:

     1. In the event of the forfeiture of any Shares as set forth in the Agreement, Purchaser and
the Company hereby irrevocably authorize and direct you to close the transaction contemplated by
such notice in accordance with the terms of said notice.

     2. At the closing, you are directed (a) to date the stock assignments necessary for the
transfer in question, (b) to fill in the number of shares being transferred, and (c) to deliver
same, together with the certificate evidencing the shares of stock to be transferred, to the
Company or its assignee, against the simultaneous delivery to you of the purchase price (by cash, a
check, or some combination thereof) for the number of shares of stock forfeited in accordance with
the terms of the Agreement.

     3. Purchaser irrevocably authorizes the Company to deposit with you any certificates
evidencing shares of stock to be held by you hereunder and any additions and substitutions to said
shares as defined in the Agreement. Purchaser does hereby irrevocably constitute and appoint you
as Purchaser’s attorney-in-fact and agent for the term of this escrow to execute with respect to
such securities all documents necessary or appropriate to make such securities negotiable and to
complete any transaction herein contemplated, including but not limited to the filing with any
applicable state blue sky authority of any required applications for consent to, or notice of
transfer of, the securities. Subject to the provisions of this paragraph 3, Purchaser shall
exercise all rights and privileges of a shareholder of the Company while the stock is held by you.

     4. Upon written request of the Purchaser, but no more than once per calendar year, to the
extent the Restriction Period has lapsed with respect to any Shares, you shall deliver to Purchaser
a certificate or certificates representing so many shares of stock as are not then subject to the
Restriction Period. Within 90 days after Purchaser ceases to be a Service Provider, you shall
deliver to Purchaser a certificate or certificates representing the aggregate number of shares held
or issued pursuant to the Agreement and not forfeited by Purchaser pursuant to the terms of this
Agreement.

 

 

     5. If at the time of termination of this escrow you should have in your possession any
documents, securities, or other property belonging to Purchaser, you shall deliver all of the same
to Purchaser and shall be discharged of all further obligations hereunder.

     6. Your duties hereunder may be altered, amended, modified or revoked only by a writing signed
by all of the parties hereto.

     7. You shall be obligated only for the performance of such duties as are specifically set
forth herein and may rely and shall be protected in relying or refraining from acting on any
instrument reasonably believed by you to be genuine and to have been signed or presented by the
proper party or parties. You shall not be personally liable for any act you may do or omit to do
hereunder as Escrow Agent or as attorney-in-fact for Purchaser while acting in good faith, and any
act done or omitted by you pursuant to the advice of your own attorneys shall be conclusive
evidence of such good faith.

     8. You are hereby expressly authorized to disregard any and all warnings given by any of the
parties hereto or by any other person or corporation, excepting only orders or process of courts of
law, and are hereby expressly authorized to comply with and obey orders, judgments or decrees of
any court. In case you obey or comply with any such order, judgment or decree, you shall not be
liable to any of the parties hereto or to any other person, firm or corporation by reason of such
compliance, notwithstanding any such order, judgment or decree being subsequently reversed,
modified, annulled, set aside, vacated or found to have been entered without jurisdiction.

     9. You shall not be liable in any respect on account of the identity, authorities or rights of
the parties executing or delivering or purporting to execute or deliver the Agreement or any
documents or papers deposited or called for hereunder.

     10. You shall not be liable for the outlawing of any rights under the statute of limitations
with respect to these Joint Escrow Instructions or any documents deposited with you.

     11. You shall be entitled to employ such legal counsel and other experts as you may deem
necessary properly to advise you in connection with your obligations hereunder, may rely upon the
advice of such counsel, and may pay such counsel reasonable compensation therefor.

     12. Your responsibilities as Escrow Agent hereunder shall terminate if you shall cease to be
an officer or agent of the Company or if you shall resign by written notice to each party. In the
event of any such termination, the Company shall appoint a successor Escrow Agent.

     13. If you reasonably require other or further instruments in connection with these Joint
Escrow Instructions or obligations in respect hereto, the necessary parties hereto shall join in
furnishing such instruments.

     14. It is understood and agreed that should any dispute arise with respect to the delivery
and/or ownership or right of possession of the securities held by you hereunder, you are authorized
and directed to retain in your possession without liability to anyone all or any part of said
securities until such disputes shall have been settled either by mutual written agreement of the
parties

-2-

 

concerned or by a final order, decree or judgment of a court of competent jurisdiction
after the time for appeal has expired and no appeal has been perfected, but you shall be under no duty
whatsoever to institute or defend any such proceedings.

     15. Any notice required or permitted hereunder shall be given in writing and shall be deemed
effectively given upon personal delivery or upon deposit in the United States Post Office, by
registered or certified mail with postage and fees prepaid, addressed to each of the other parties
thereunto entitled at the following addresses or at such other addresses as a party may designate
by ten days’ advance written notice to each of the other parties hereto.

	 	 	 	 	 
	 

	 	COMPANY:
	 	Brocade Communications Systems, Inc.
	 

	 	 	 	1745 Technology Drive
	 

	 	 	 	San Jose CA 95110
	 
	 	 	 	 
	 

	 	PURCHASER:
	 	At the address set forth following his or her signature
	 
	 	 	 	 
	 

	 	ESCROW AGENT:
	 	[Escrow Agent Name]
	 

	 	 	 	[Escrow Agent Address]

     16. By signing these Joint Escrow Instructions, you become a party hereto only for the purpose
of said Joint Escrow Instructions; you do not become a party to the Agreement.

     17. This instrument shall be binding upon and inure to the benefit of the parties hereto, and
their respective successors and permitted assigns.

-3-

 

     18. These Joint Escrow Instructions shall be governed by, and construed and enforced in
accordance with, the internal substantive laws, but not the choice of law rules, of California.

	 	 	 	 	 
	 	 	Very truly yours,
	 
	 	 	 	 
	 
	 	 	 	 
	 	 	BROCADE COMMUNICATIONS SYSTEMS,
	 

	 	INC.	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	 	 	 
	 	 	Signature
	 
	 	 	 	 
	 
	 	 	 	 
	 	 	 
	 	 	Print Name
	 
	 	 	 	 
	 
	 	 	 	 
	 	 	 
	 	 	Title
	 
	 	 	 	 
	 
	 	 	 	 
	 	 	PURCHASER:
	 
	 	 	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	 	 	 
	 	 	Signature
	 
	 	 	 	 
	 
	 	 	 	 
	 	 	 
	 	 	Print Name
	 
	 	 	 	 
	 
	 	 	 	 
	 	 	Address:
	 

	 	 	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	 	 	 

	 	 	 	 	 
	ESCROW AGENT:	 	 
	 
	 	 	 	 
	[Escrow Agent Name]	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	Signature:
	 	 	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	Print Name:
	 	 	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	Title:
	 	 	 	 
	 

	 	 	 	 

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EXHIBIT A-4

CONSENT OF SPOUSE

     I,                                         , spouse of                         
                , have read and approve the foregoing
Restricted Stock Purchase Agreement (the “Agreement”). In consideration of the Company’s grant to
my spouse of the right to purchase shares of Brocade Communications Systems, Inc., as set forth in
the Agreement, I hereby appoint my spouse as my attorney-in-fact in respect to the exercise of any
rights under the Agreement and agree to be bound by the provisions of the Agreement insofar as I
may have any rights in said Agreement or any shares issued pursuant thereto under the community
property laws or similar laws relating to marital property in effect in the state of our residence
as of the date of the signing of the foregoing Agreement.

Dated:                          , _____

 

 

                  
             
                                
    
             
                                        

Signature of Spouse

 

 

EXHIBIT A-5

ELECTION UNDER SECTION 83(b)

OF THE INTERNAL REVENUE CODE OF 1986

The undersigned taxpayer hereby elects, pursuant to Section 83(b) of the Internal Revenue Code of
1986, as amended, to include in taxpayer’s gross income for the current taxable year the amount of
any compensation taxable to taxpayer in connection with his or her receipt of the property
described below:

	 	 	 	 	 	 	 
	1.	 	The name, address, taxpayer identification number and taxable year of the undersigned are as
follows:
	 
	 	 	 	 	 	 
	 

	 	NAME:
	 	TAXPAYER:
	 	SPOUSE:
	 
	 	 	 	 	 	 
	 

	 	ADDRESS:	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	IDENTIFICATION NO.:
	 	TAXPAYER:
	 	SPOUSE:
	 
	 	 	 	 	 	 
	 

	 	TAXABLE YEAR:	 	 	 	 
	 
	 	 	 	 	 	 
	2.	 	The property with respect to which the election is made is described as follows:
shares (the “Shares”) of the Common Stock of Brocade Communications Systems, Inc. (the
“Company”).
	 
	 	 	 	 	 	 
	3.	 	The date on which the
property was transferred is:                  ,   
       .
	 
	 	 	 	 	 	 
	4.	 	The property is subject to the following restrictions:
	 
	 	 	 	 	 	 
	 	 	The Shares may be repurchased by the Company, or its assignee, upon certain events. This
right lapses with regard to a portion of the Shares based on the continued performance of
services by the taxpayer over time.
	 
	 	 	 	 	 	 
	5.	 	The fair market value at the time of transfer, determined without regard to any restriction
other than a restriction which by its terms will never lapse, of such property is:
	 	 	$______________.
	 
	 	 	 	 	 	 
	6.	 	The amount (if any) paid for such property is:
	 	 	$______________.

The undersigned has submitted a copy of this statement to the person for whom the services were
performed in connection with the undersigned’s receipt of the above-described property. The
transferee of such property is the person performing the services in connection with the transfer
of said property.

The undersigned understands that the foregoing election may not be revoked except with the
consent of the Commissioner.

	 	 	 	 	 
	Dated:

	 	                                        ,
          	 	 
	 

	 	 	 	 
	 

	 	 	 	Taxpayer
	 
	 	 	 	 
	The undersigned spouse of taxpayer joins in this election.
	 
	 	 	 	 
	Dated:

	 	                                        ,
          	 	 
	 

	 	 	 	 
	 

	 	 	 	Spouse of Taxpayer

 

 

[FORM OF PERFORMANCE-BASED RESTRICTED STOCK UNIT AGREEMENT —

LTI/OUTPERFORM PLAN (MARKET CAPITALIZATION GROWTH)]

BROCADE COMMUNICATIONS SYSTEMS, INC.

PERFORMANCE-BASED RESTRICTED STOCK UNIT AGREEMENT

NOTICE OF GRANT

     [GRANTEE NAME]

     [GRANTEE ADDRESS]

     You (“Grantee”) have been granted an award of Restricted Stock Units under the Company’s
Amended and Restated 1999 Stock Plan (the “Plan”). The date of this Restricted Stock Unit
Agreement (the “Agreement”) is the Grant Date defined below. Subject to the provisions of Appendix
A, any appendix to the Agreement for Grantee’s country of residence (for non-US employees) and the
Plan, all of which are attached hereto and incorporated herein in their entirety, the principal
features of this Award are as follows:

	 	 	 
	Grant Date:

	 	[                    ] (the “Grant Date”)
	 
	 	 
	Maximum Number
	 	 
	of Restricted Stock Units:

	 	[                    ] (the “Maximum Number of Restricted Stock Units”)
	 
	 	 
	Pool
	 	 
	Percentage:

	 	[                    ]
	 
	 	 
	Grantee Percentage of
	 	 
	Restricted Stock Unit Pool:

	 	[                    ]%
	 
	 	 
	Performance Period:

	 	[PERFORMANCE PERIOD BEGIN DATE] through [PERFORMANCE PERIOD END DATE] (subject to Section 4(c) of
Appendix A) (the “Performance Period”).
	 
	 	 
	Performance Matrix:

	 	The number of Restricted Stock Units in which you may vest in accordance with the Vesting Schedule will
depend upon the Company’s Market Capitalization Growth Rate as compared to the QQQQ Growth Rate for the
Performance Period and will be determined in accordance with Section 1 of Appendix A.
	 
	 	 
	 

	 	For this purpose, “Market Capitalization Growth Rate” means the
percentage growth in the Market Capitalization of the Company during
the Performance Period determined by comparing the Market
Capitalization of the Company as of the day immediately preceding the
commencement of the Performance Period with the Market Capitalization
of the Company as of the last day of the Performance Period.
	 
	 	 
	 

	 	For this purpose, “QQQQ Growth Rate” means, as to the Performance
Period, the total return (change in share price plus reinvestment of
any dividends) of a share of Nasdaq-100 Index Tracking Stock issued by

-1-

 

	 	 	 
	 

	 	the PowerShares QQQ Trust, Series 1 (or any successor fund),
denominated as a percentage. For purposes of the preceding sentence,
the “change in share price” will be determined by comparing the 10-day
trading average of Nasdaq-100 Index Tracking Stock as of the day
immediately preceding the commencement of the Performance Period with
the 10-day trading average of Nasdaq-100 Index Tracking Stock as of
the last day of the Performance Period. For this purpose, the “10-day
trading average of Nasdaq-100 Index Tracking Stock” will mean the
average closing sales price of one share of Nasdaq-100 Index Tracking
Stock for the 10 most recent trading days ending on, and including,
the relevant date, as reported on the established stock exchange or
national market system on which Nasdaq-100 Index Tracking Stock is
listed.
	 
	 	 
	 

	 	For additional definitions of terms used in this Agreement, please see
Section 1(c) of Appendix A.
	 
	 	 
	Vesting Schedule:

	 	The Grantee will vest on the date the Administrator determines the number of
Restricted Stock Units earned in accordance with the Performance Matrix and Section 1 of
Appendix A (the “Vesting Date”), provided that such determination will be made within 30 days
after the end of the Performance Period. Except as otherwise provided in Appendix A, the
Grantee will not vest in the Restricted Stock Units unless he or she remains a Service
Provider through the Vesting Date.

     Your signature below indicates your agreement and understanding that this award is subject to
all of the terms and conditions contained in Appendix A, Appendix B, if any, and the Plan. For
example, important additional information on vesting and forfeiture of the Restricted Stock Units
is contained in Sections 3 through 5 and Section 7 of Appendix A. PLEASE BE SURE TO READ ALL OF
APPENDIX A, APPENDIX B, IF ANY, AND THE PLAN, WHICH CONTAIN THE SPECIFIC TERMS AND CONDITIONS OF
THIS AWARD.

	 	 	 	 	 
	BROCADE COMMUNICATIONS SYSTEMS, INC.	 	GRANTEE
	 
	 	 	 	 
	 
	 	 	 	 
	 

	 	 	 	 
	Signature

	 	 	 	Signature
	 
	 	 	 	 
	 
	 	 	 	 
	 

	 	 	 	 
	Print Name

	 	 	 	Print Name
	 
	 	 	 	 
	 
	 	 	 	 
	 

Title

	 	 	 	 

-2-

 

APPENDIX A

TERMS AND CONDITIONS OF PERFORMANCE-BASED RESTRICTED STOCK UNITS

     Unless otherwise defined herein, capitalized terms used herein shall have the meanings
ascribed to them in the Plan.

     1. Grant.

          (a) The Company hereby grants to the Grantee under the Plan an award of Restricted Stock
Units, subject to all of the terms and conditions in this Agreement, Appendix B, if any, and the
Plan. For each Restricted Stock Unit that vests, the Grantee will be entitled to receive one (1)
Share (subject to automatic adjustment for stock splits, combinations and the like pursuant to
Section 14 of the Plan).

          (b) The number of Restricted Stock Units in which the Grantee may vest will depend upon the
Company’s Market Capitalization Growth Rate as compared to the QQQQ Growth Rate for the Performance
Period and will be determined following the end of the Performance Period as follows:

               (i) The QQQQ Growth Rate for the Performance Period will be compared to the Company’s Market
Capitalization Growth Rate for the Performance Period;

               (ii) If the QQQQ Growth Rate for the Performance Period equals or exceeds the Company’s Market
Capitalization Growth Rate for the Performance Period, this Restricted Stock Unit award will
immediately terminate and the Restricted Stock Units granted hereunder will be forfeited and
automatically transferred to and reacquired by the Company at no cost to the Company;

               (iii) To the extent the Company’s Market Capitalization Growth Rate for the Performance Period
exceeds the QQQQ Growth Rate for the Performance Period (the “Excess Growth Rate”), the Company’s
Market Capitalization as of the day immediately preceding the commencement of the Performance
Period will be multiplied by the Excess Growth Rate. For the avoidance of doubt, if both rates are
negative, the Company’s Market Capitalization Growth Rate will exceed the QQQQ Growth Rate for
purposes of the previous sentence to the extent that the Company’s Market Capitalization Growth
Rate is a larger number than the QQQQ Growth Rate, and the Excess Growth Rate will be the
difference between the two rates. For example, if the Company’s Market Capitalization Growth Rate
is -10% and the QQQQ Growth Rate
is -20%, the Company’s Market Capitalization Growth Rate is higher
than the QQQQ Growth Rate, and the Excess Growth Rate is 10%. The resulting dollar value (rounded
down to the nearest whole dollar) will be referred to herein as the “Market Capitalization Gain”;

               (iv) The Market Capitalization Gain will be multiplied by the Pool Percentage set forth on the
Notice of Grant. The resulting dollar value (rounded down to the nearest whole dollar) will be
referred to herein as the “Restricted Stock Unit Pool”;

               (v) The Restricted Stock Unit Pool will be multiplied by the Grantee Percentage of Restricted
Stock Unit Pool set forth on the Notice of Grant and rounded down to the nearest whole dollar; and

-3-

 

               (vi) The dollar value determined in accordance with Section 1(b)(v) above will be divided by
the 10-Day Trading Average of the Company’s Common Stock as of the last day of the Performance
Period (rounded down to the nearest whole number), resulting in a preliminary number of Restricted
Stock Units.

               The number of Restricted Stock Units in which the Grantee may vest in accordance with the
Vesting Schedule set forth on the Notice of Grant will be the lesser of (A) the preliminary number
of Restricted Stock Units determined in accordance with Section 1(b)(vi) above or (B) the Maximum
Number of Restricted Stock Units; provided, however, that the Administrator, in its sole
discretion, may, within 30 days after the end of the Performance Period, eliminate or reduce the
number of Restricted Stock Units determined in accordance with this Section 1. For the avoidance
of doubt, once the number of Restricted Stock Units have been determined in accordance with the
preceding sentence, the Grantee will vest in such number of Restricted Stock Units in accordance
with the Vesting Schedule and the Administrator may not further eliminate or reduce such number of
Restricted Stock Units. In any event, the Administrator shall not be entitled to eliminate or
reduce the number of Restricted Stock Units determined in accordance with this Section 1 following
a Change of Control.

     Example for illustration purposes only:

	 	 	 	 	 
	A
	 	Market Capitalization as of the day immediately preceding the commencement of the Performance Period	 	$4,118,055,000
	B
	 	Pool Percentage	 	2%
	C
	 	Grantee Percentage of Restricted Stock Unit Pool	 	5%
	D
	 	Market Capitalization Growth Rate for the Performance Period	 	20%
	E
	 	QQQQ Growth Rate for the Performance Period	 	10%
	F
	 	Excess Growth Rate (D - E)	 	10%
	G
	 	Market Capitalization Gain determined by multiplying the Market Capitalization as of the day immediately preceding the commencement of the Performance Period by the Excess Growth Rate (A x F)	 	$411,805,500
	H
	 	Restricted Stock Unit Pool determined by multiplying the Market Capitalization Gain by the Pool Percentage (B x G)	 	$8,236,110
	I
	 	Dollar value of the Grantee's award determined by multiplying the Restricted Stock Unit Pool by the Grantee's Percentage of Restricted Stock Unit Pool (C x H)	 	$411,805
	J
	 	10-Day Trading Average of the Company's Common Stock as of the last day of the Performance Period	 	$11.72
	K
	 	Number of Restricted Stock Units in which the Grantee may vest, subject to the Administrator's discretion to eliminate or reduce this number (I ÷ J)	 	35,136

          (c) Definitions.

               (i) “Market Capitalization” will mean, as of any date, the value equal to

-4-

 

the 10-Day Trading Average of the Company’s Common Stock multiplied by the number of Shares
outstanding as of market close on such date. Market Capitalization will be appropriately adjusted
by the Administrator for the effects of any stock acquisitions, other than acquisitions of private
companies with a purchase price equal to or less than $100 million, made during the Performance
Period by subtracting (A) the Company’s purchase price for the acquired company as of the date of
the initial, public announcement by the Company of the entry into a definitive agreement by and
between the acquired company and the Company (the “Press Release”), from (B) the Market
Capitalization of the Company as of the end of the Performance Period. For purposes of the
preceding sentence, the “Company’s purchase price” will mean the estimated value of the total
consideration to be paid by the Company to the acquired company’s stockholders (in their capacity
as stockholders), as set forth in the Company’s Press Release, less any cash consideration. If the
Company’s Press Release does not set forth the estimated value of the consideration to be paid by
the Company to the acquired company’s stockholders, the “Company’s purchase price” will mean the
value, as of the date of the Press Release, equal to the product of (i) the actual number of shares
of the Company’s Common Stock issued in exchange for the shares of the acquired company’s stock
multiplied by (ii) the Fair Market Value of the Company’s Common Stock as of the market close on
the last market trading day immediately prior to the date of the Press Release.

               (ii) “10-Day Trading Average of the Company’s Common Stock” will mean the average closing
sales price of one share of the Company’s Common Stock for the 10 most recent trading days ending
on, and including, the relevant date, as reported on the established stock exchange or national
market system on which the Company’s Common Stock is listed (or, in the absence of an established
market, as determined in good faith by the Administrator).

          (d) When Shares are paid to the Grantee in payment for the Restricted Stock Units, par value
will be deemed paid by the Grantee for each Restricted Stock Unit by past services rendered by the
Grantee, and will be subject to the appropriate tax withholdings.

     2. Company’s Obligation to Pay. Each Restricted Stock Unit has a value equal to the
Fair Market Value of a Share on the date that the Restricted Stock Unit is granted. Unless and
until the Restricted Stock Units have vested in the manner set forth in Sections 3 through 5, the
Grantee will have no right to payment of such Restricted Stock Units. Prior to actual payment of
any vested Restricted Stock Units, such Restricted Stock Units will represent an unsecured
obligation. Payment of any vested Restricted Stock Units shall be made in whole Shares only and
any fractional shares will be forfeited at the time of payment.

     3. Vesting Schedule/Period of Restriction. Except as provided in Sections 4 and 5,
and subject to Section 7, the Restricted Stock Units awarded by this Agreement shall vest in
accordance with the vesting provisions set forth on the Notice of Grant and Section 1 of this
Agreement. Except as otherwise provided herein, Restricted Stock Units shall not vest in
accordance with any of the provisions of this Agreement unless the Grantee remains a Service
Provider through the Vesting Date.

     4. Modifications
to Vesting Schedule.

          (a) Vesting upon Leave of Absence. In the event that the Grantee takes an authorized leave of
absence (“LOA”), the Restricted Stock Units awarded by this Agreement that are eligible to be
earned shall either: (i) not be affected, or (ii) be deferred for a period of time equal to the
duration of such LOA, based on the Company’s LOA policy in effect at such time as determined by the
Company in its sole discretion.

-5-

 

          (b) Death or Disability of Grantee. In the event that the Grantee’s relationship with the
Company as a Service Provider is terminated during the Performance Period due to his or her death
or Disability, the vesting of the Restricted Stock Units subject to this Restricted Stock Unit
award shall be forfeited on the date of the Grantee’s death or Disability.

          (c) Change of Control. In the event of a Change of Control (as defined below) during the
Performance Period, the Performance Period shall be deemed to end immediately prior to the date of
the Press Release for purposes of determining the Company’s Market Capitalization Growth Rate and
the QQQQ Growth Rate and the number of Restricted Stock Units in which the Grantee will be entitled
to vest will be determined by the Administrator (as in existence prior to the Change in Control) in
accordance with the Performance Matrix and Section 1 of this Appendix A. The Grantee shall vest in
the number of Restricted Stock Units determined based on the preceding sentence immediately prior
to and contingent upon the Change of Control (the “New Vesting Date”) (unless vested earlier in
accordance with the terms of this Award, Section 14(c) of the Plan or any employment or change of
control agreement by and between the Company and the Grantee and provided that the Grantee remains
a Service Provider through the New Vesting Date or as otherwise set forth in this Agreement). In
accordance with Section 1 of this Appendix A, the Administrator shall not be entitled to eliminate
or reduce the number of Restricted Stock Units determined in accordance with Section 1 of Appendix
A following a Change of Control.

          (d) Definition of Change of Control. For purposes of this Agreement, “Change of Control”
shall mean the occurrence of any of the following events:

               (1) the consummation by the Company 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) more than fifty
percent (50%) of the total voting power represented by the voting securities of the Company or such
surviving entity outstanding immediately after such merger or consolidation;

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

               (3) any “person” (as such term is used in Sections 13(d) and 14(d) of the Securities Exchange
Act of 1934, as amended) becoming the “beneficial owner” (as defined in Rule 13d-3 under said Act),
directly or indirectly, of securities of the Company representing 50% or more of the total voting
power represented by the Company’s then outstanding voting securities; or

               (4) a change in the composition of the Board, as a result of which fewer than a majority of
the directors are Incumbent Directors. “Incumbent Directors” shall mean directors who either (A)
are directors of the Company as of the date hereof, or (B) are elected, or nominated for election,
to the Board with the affirmative votes of at least a majority of those directors whose election or
nomination was not in connection with any transactions described in subsections (i), (ii), or (iii)
or in connection with an actual or threatened proxy contest relating to the election of directors
of the Company.

     5. Administrator Discretion. The Administrator, in its discretion, may accelerate the
vesting of the balance, or some lesser portion of the balance, of the Restricted Stock Units at any
time, subject to the terms of the Plan. If so accelerated, such Restricted Stock Units will be
considered as having vested as of the date specified by the Administrator. If the Administrator,
in its

-6-

 

discretion, accelerates the vesting of the balance, or some lesser portion of the balance, of
the Restricted Stock Units, the payment of such accelerated Restricted Stock Units nevertheless
shall be made at the same time or times as if such Restricted Stock Units had vested in accordance
with the Vesting Schedule set forth on the Notice of Grant or as otherwise provided herein (whether
or not the Grantee remains employed by the Company or by one of its Subsidiaries as of such
date(s)), unless an earlier payment date, in the judgment of the Administrator, would not cause the
Grantee to incur an additional tax under Section 409A of the U.S. Internal Revenue Code of 1986, as
amended, and any proposed, temporary or final Treasury Regulations and Internal Revenue Service
guidance thereunder (“Section 409A”).

     6. Payment after Vesting. Any Restricted Stock Units that vest in accordance with
Sections 3 through 5 of this Agreement will be paid to the Grantee (or in the event of the
Grantee’s death, to his or her estate) as soon as practicable following the Vesting Date, subject
to Section 10, but no later than March 15th of the calendar year following the Vesting
Date. Notwithstanding the foregoing, if the Grantee is a “specified employee” within the meaning
of Section 409A(a)(2)(B)(i) and any proposed, temporary or final Treasury Regulations and Internal
Revenue Service guidance thereunder, any Restricted Stock Units that vest on account of the
termination of the Grantee’s relationship with the Company as a Service Provider will be paid to
the Grantee (or in the event of the Grantee’s death, to his or her estate) no earlier than six (6)
months and one (1) day following the date of the termination of the Grantee’s relationship with the
Company (or any Parent or Subsidiary of the Company) as a Service Provider, subject to Section 10.

     7. Forfeiture of Unvested Restricted Stock Units. The balance of the Restricted Stock
Units that have not vested pursuant to Sections 3 through 5 at the time of the termination of the
Grantee’s relationship with the Company (or any Parent or Subsidiary of the Company) as a Service
Provider for any or no reason will be forfeited.

     8. Conditions Requiring Forfeiture of Shares. Notwithstanding any provision in this
Agreement to the contrary, the Company may demand that the Grantee forfeit and transfer to, and the
Grantee hereby agrees that, within thirty (30) days of such demand, the Grantee will (i) forfeit
and transfer to, the Company that number of Shares equal to the number of Shares issued as payment
for vested Restricted Stock Units under this Agreement, or (ii) tender to the Company a cash
payment in immediately available funds in an amount equal to the number of Shares issued as payment
for the vested Restricted Stock Units under this Agreement multiplied by the Fair Market Value of a
Share on the Vesting Date, in the event the Board, in its reasonable discretion, determines within
four (4) years following the Performance Period but in any event prior to a Change of Control that
the Grantee committed financial-based fraud with respect to the Company’s financial statements
filed with the Securities and Exchange Commission requiring the restatement of such financial
statements and such fraud positively impacted the Market Capitalization Growth Rate during the
Performance Period. Except for any applicable offset of amounts reimbursed, nothing herein,
including any determination by the Board contemplated by this Section 8, shall limit or otherwise
waive any Company right of recovery or obligation of reimbursement by applicable executive officers
under Section 304 of the Sarbanes Oxley Act of 2002.

     9. [Reserved.]

     10. Withholding of Taxes.

               (a) General. Regardless of any action the Company and/or the Grantee’s employer (the
“Employer”) take with respect to any or all income tax (including U.S. federal, state,

-7-

 

local and/or non-U.S. taxes), social insurance, payroll tax, payment on account or other
tax-related withholdings (“Tax-Related Items”), the Grantee acknowledges that the ultimate
liability for all Tax-Related Items legally due by the Grantee is and remains the Grantee’s
responsibility and that the Company and/or the Employer (i) make no guarantees or undertakings
regarding the treatment of any Tax-Related Items in connection with any aspect of the award,
including the grant of the Restricted Stock Units, the vesting of the Restricted Stock Units, the
delivery of Shares, the subsequent sale of any Shares received at vesting and the receipt of any
dividends; and (ii) do not commit to structure the terms of the grant or any aspect of the award to
reduce or eliminate the Grantee’s liability for Tax-Related Items.

          (b) Payment of Tax-Related Items. The Grantee authorizes the Company and/or the Employer, at
its discretion, to satisfy the obligations with regard to all Tax-Related Items by withholding a
portion of the Shares issued as payment for vested Restricted Stock Units that have an aggregate
market value sufficient to pay all Tax-Related Items required to be withheld by the Company and/or
the Employer with respect to the vesting of the Restricted Stock Units and issuance of the Shares,
unless the Company, in its sole discretion, either requires or otherwise permits the Grantee to
make alternate arrangements satisfactory to the Company for such withholdings in advance of the
arising of any withholding obligations. The number of Shares withheld pursuant to the prior
sentence will be rounded up to the nearest whole Share, with no refund for any value of the Shares
withheld in excess of the tax obligation as a result of such rounding.

          If the obligation of Tax-Related Items is satisfied by reducing the number of Shares delivered
as described herein, the Grantee is deemed to have been issued the full number of Shares subject to
the award of Restricted Stock Units, notwithstanding that a number of the Shares are held back
solely for the purpose of paying the Tax-Related Items due as a result of any aspect of the award.

          If the foregoing method of withholding is prohibited or insufficient to satisfy all
Tax-Related Items required to be withheld by the Company and/or the Employer with respect to the
vesting of the Restricted Stock Units and issuance of the Shares or if the Company, in its
discretion, determines not to apply the foregoing method of withholding, then the Grantee hereby
authorizes the Company and/or the Employer to satisfy such obligations by one or a combination of
the following: (i) withholding from the Grantee’s wages or other cash compensation paid to the
Grantee by the Company and/or the Employer, to the maximum extent permitted by law; or (ii) selling
the applicable number of Shares or arranging for the sale of the applicable number of Shares (in
either case on the Grantee’s behalf and at the Grantee’s discretion pursuant to this authorization)
issued in settlement of vested Restricted Stock Units and retaining the requisite proceeds from
such sale.

          Finally, the Grantee shall pay to the Company and/or the Employer any amount of Tax-Related
Items that the Company and/or the Employer may be required to withhold as a result of the Grantee’s
participation in the Plan that cannot be satisfied by the means previously described. The Company
may refuse to deliver to the Grantee any Shares pursuant to the award if the Grantee fails to
comply with the Grantee’s obligations in connection with the Tax-Related Items, as described in
this Section 10.

     11. Rights as Stockholder. Neither the Grantee nor any person claiming under or
through the Grantee will have any of the rights or privileges of a stockholder of the Company in
respect of any Shares deliverable hereunder unless and until certificates representing such Shares
(which may be in book entry form) will have been issued, recorded on the records of the Company or
its transfer agents or registrars, and delivered to the Grantee (including through electronic
delivery to a

-8-

 

brokerage account). After such issuance, recordation and delivery, the Grantee will have all
the rights of a stockholder of the Company with respect to voting such Shares and receipt of
dividends and distributions on such Shares.

     12. No Effect on Employment. Subject to any employment contract with the Grantee, the
terms of such employment will be determined from time to time by the Company, or the Subsidiary
employing the Grantee, as the case may be, and the Company, or the Subsidiary employing the
Grantee, as the case may be, will have the right, which is hereby expressly reserved, to terminate
or change the terms of the employment of the Grantee at any time for any reason whatsoever, with or
without good cause. The transactions contemplated hereunder and the Vesting Schedule set forth on
the Notice of Grant do not constitute an express or implied promise of continued employment for any
period of time. A leave of absence or an interruption in service (including an interruption during
military service) authorized or acknowledged by the Company or the Subsidiary employing the
Grantee, as the case may be, shall not be deemed a termination of the Grantee’s relationship with
the Company as a Service Provider for the purposes of this Agreement.

     13. Address for Notices. Any notice to be given to the Company under the terms of
this Agreement will be addressed to the Company, in care of Stock Administrator, at 1745 Technology
Drive, San Jose, CA 95110, or at such other address as the Company may hereafter designate in
writing, with a copy to the Company, C/O General Counsel, 1745 Technology Drive, San Jose, CA
95110.

     14. Grant is Not Transferable. Except to the limited extent provided in this
Agreement or the Plan, this grant of Restricted Stock Units and the rights and privileges conferred
hereby will not be sold, pledged, assigned, hypothecated, transferred or disposed of any way
(whether by operation of law or otherwise) and will not be subject to sale under execution,
attachment or similar process, until the Grantee has been issued Shares in payment of the
Restricted Stock Units. Upon any attempt to sell, pledge, assign, hypothecate, transfer or
otherwise dispose of this grant, or any right or privilege conferred hereby, or upon any attempted
sale under any execution, attachment or similar process, this grant and the rights and privileges
conferred hereby immediately will become null and void. Notwithstanding the foregoing, Grantee
may, in a manner and in accordance with terms specified by the Administrator, transfer these
Restricted Stock Units to Grantee’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.

     15. Restrictions on Sale of Securities. The Shares issued as payment for vested
Restricted Stock Units under this Agreement will be registered under U.S. federal securities laws
and will be freely tradable upon receipt. However, a Grantee’s subsequent sale of the Shares may
be subject to any market blackout-period that may be imposed by the Company and must comply with
the Company’s insider trading policies, and any other applicable securities laws.

     16. Binding Agreement. Subject to the limitation on the transferability of this grant
contained herein, this Agreement will be binding upon and inure to the benefit of the heirs,
legatees, legal representatives, successors and assigns of the parties hereto.

     17. Additional Conditions to Issuance of Certificates for Shares. The Company shall
not be required to issue any certificate or certificates for Shares hereunder prior to fulfillment
of all the following conditions: (a) the admission of such Shares to listing on all stock
exchanges on which such class of stock is then listed; (b) the completion of any registration or
other qualification of such Shares under any U.S. state or federal law or under the rulings or
regulations of the Securities and

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Exchange Commission or any other governmental regulatory body, which the Administrator shall,
in its absolute discretion, deem necessary or advisable; (c) the obtaining of any approval or other
clearance from any U.S. state or federal governmental agency, which the Administrator shall, in its
absolute discretion, determine to be necessary or advisable; and (d) the lapse of such reasonable
period of time following the Vesting Date of the Restricted Stock Units as the Administrator may
establish from time to time for reasons of administrative convenience.

     18. Plan Governs. This Agreement and Appendix B, if any, are subject to all the terms
and provisions of the Plan. In the event of a conflict between one or more provisions of this
Agreement or Appendix B, if any, and one or more provisions of the Plan, the provisions of the Plan
will govern.

     19. Administrator Authority. The Administrator will have the power to interpret the
Plan and this Agreement and to adopt such rules for the administration, interpretation and
application of the Plan as are consistent therewith and to interpret or revoke any such rules
(including, but not limited to, the determination of whether or not any Restricted Stock Units have
vested). All actions taken and all interpretations and determinations made by the Administrator in
good faith will be final and binding upon the Grantee, the Company and all other interested
persons. No member of the Administrator will be personally liable for any action, determination or
interpretation made in good faith with respect to the Plan or this Agreement.

     20. Captions. Captions provided herein are for convenience only and are not to serve
as a basis for interpretation or construction of this Agreement.

     21. Agreement Severable. In the event that any provision in this Agreement will be
held invalid or unenforceable, such provision will be severable from, and such invalidity or
unenforceability will not be construed to have any effect on, the remaining provisions of this
Agreement.

     22. Modifications to the Agreement. This Agreement, together with the Plan and
Appendix B, if any, constitutes the entire understanding of the parties on the subjects covered,
subject to any applicable pre-existing agreement or agreement entered into after the date hereof
relating to full or partial acceleration of vesting in the event of a change of control of the
Company (or similar event). The Grantee expressly warrants that he or she is not accepting this
Agreement in reliance on any promises, representations, or inducements other than those contained
herein or expressly contemplated above. Modifications to this Agreement or the Plan can be made
only in an express written contract executed by a duly authorized officer of the Company.
Notwithstanding anything to the contrary in the Plan or this Agreement, the Company reserves the
right to revise this Agreement as it deems necessary or advisable, in its sole discretion and
without the consent of the Grantee, to comply with Section 409A of the Code or to otherwise avoid
imposition of any additional tax or income recognition under Section 409A of the Code prior to the
actual payment of Shares pursuant to this award of Restricted Stock Units.

     23. Amendment, Suspension or Termination of the Plan. By accepting this Restricted
Stock Units award, the Grantee expressly warrants that he or she has received a right to receive
stock under the Plan, and has received, read and understood a description of the Plan. The Grantee
understands that the Plan is discretionary in nature and may be amended, suspended or terminated by
the Company at any time.

     24. Labor Law and Nature of Grant. In accepting the award of Restricted Stock Units,

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the Grantee acknowledges that:

          (a) the Plan is established voluntarily by the Company;

          (b) the award of Restricted Stock Units is voluntary and occasional and does not create any
contractual or other right to receive future awards of Restricted Stock Units, or benefits in lieu
of Restricted Stock Units even if Restricted Stock Units have been awarded repeatedly in the past;

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

          (d) the Grantee’s participation in the Plan is voluntary;

          (e) the award is an extraordinary item that is outside the scope of the Grantee’s employment
or service contract, if any;

          (f) the award is not part of normal or expected compensation or salary for any purposes,
including, but not limited to, calculation of any severance, resignation, termination, redundancy,
end of service payments, bonuses, long-service awards, pension or retirement or welfare benefits or
similar payments;

          (g) in the event that the Grantee is not an employee of the Company, the award will not be
interpreted to form an employment or service contract or relationship with the Company; and,
furthermore, the award will not be interpreted to form an employment or service contract or
relationship with the Employer or any Parent or other successor or a Subsidiary of the Company;

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

          (i) the Company is not providing any tax, legal, or financial advice, nor is the Company
making any recommendations regarding the Grantee’s participation in the Plan or the acquisition or
sale of Shares; and

          (j) the Grantee is hereby advised to consult with the Grantee’s own personal tax, legal and
financial advisors regarding the Grantee’s participation in the Plan before taking any action
related to the Plan.

     25. Data Privacy. The Grantee hereby explicitly and unambiguously consents to the
collection, use and transfer, in electronic or other form, of the Grantee’s personal data as
described in the Notice of Grant and this Agreement and any other Restricted Stock Unit grant
materials by and among, as applicable, the Employer, the Company and its Subsidiaries for the
exclusive purpose of implementing, administering and managing the Grantee’s participation in the
Plan.

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

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

     26. Notice of Governing Law. This award of Restricted Stock Units shall be governed
by, and construed in accordance with, the laws of the State of California, without regard to
principles of conflict of laws.

     27. Language. If the Grantee has received this Agreement, Appendix B, if any, or any
other document related to the Plan translated into a language other than English and if the
translated version is different than the English version, the English version will control, unless
otherwise prescribed by local law.

     28. Electronic Delivery. The Company may, in its sole discretion, decide to deliver
any documents related to Restricted Stock Units awarded under the Plan or future Restricted Stock
Units that may be awarded under the Plan by electronic means, or to request the Grantee’s consent
to participate in the Plan by electronic means. The Grantee hereby consents to receive such
documents by electronic delivery and if requested, to agree to participate in the Plan through an
on-line or electronic system established and maintained by the Company or another third party
designated by the Company.

     29. Appendix B. Notwithstanding any provision in this Agreement or any other Plan
documents to the contrary, the award of Restricted Stock Units shall be subject to any special
terms and conditions as set forth in the Appendix B, if any, to this Agreement for the Grantee’s
country of residence outside the United States, if any. The Appendix B, if any, constitutes part
of this Agreement.

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[FORM OF PERFORMANCE-BASED RESTRICTED STOCK UNIT AGREEMENT]

BROCADE COMMUNICATIONS SYSTEMS, INC.

1999 STOCK PLAN (AS AMENDED AND RESTATED)

PERFORMANCE-BASED RESTRICTED STOCK UNIT AGREEMENT

NOTICE OF GRANT

     [GRANTEE NAME]

     [GRANTEE ADDRESS]

     You (“Grantee”) have been granted an award of Restricted Stock Units under the Company’s
Amended and Restated 1999 Stock Plan (the “Plan”). The date of this Restricted Stock Units
Agreement (the “Agreement”) is the Grant Date defined below. Subject to the provisions of
Appendices A and B (attached) and the Plan, the principal features of this award are as follows:

	 	 	 
	Grant Date:

	 	[                    ] (the “Grant Date”)
	 
	 	 
	Target Number
	 	 
	of Restricted Stock Units:

	 	[                    ] (the “Target Number of Restricted Stock Units”)
	 
	 	 
	Performance Period:

	 	Three year period beginning [PERFORMANCE PERIOD BEGIN DATE] through [PERFORMANCE PERIOD END DATE]
(subject to Section 4(c) of Appendix A) (the “Performance Period”).
	 
	 	 
	Performance Matrix:

	 	The number of Restricted Stock Units in which you may vest in accordance with the Vesting Schedule will
depend upon achievement of targets in Revenue Growth, Operating Income Growth, Free Cash Flow Growth,
and Stock Price Performance for the Performance Period as set forth in Section 1 of Appendix A.
	 
	 	 
	Vesting Schedule:

	 	The Restricted Stock Units will vest on the final day of the Performance Period, unless vested earlier
in accordance with the terms of this Award (the “Vesting Date”); provided, that Grantee remains a
Service Provider to the Company through the Vesting Date (or as otherwise set forth in this Agreement).

     Your signature below indicates your agreement and understanding that this award is subject to
all of the terms and conditions contained in Appendices A and B and the Plan. For example,
important additional information on vesting and forfeiture of the Restricted Stock Units is
contained in Sections 3 through 5 and Section 7 of Appendix A. PLEASE BE SURE TO READ ALL OF
APPENDICES A AND B AND THE PLAN, WHICH CONTAIN THE SPECIFIC TERMS AND CONDITIONS OF THIS AWARD.

	 	 	 	 	 
	BROCADE COMMUNICATIONS SYSTEMS, INC.	 	GRANTEE
	 
	 	 	 	 
	 
	 	 	 	 
	 

	 	 	 	 
	Signature

	 	 	 	Signature
	 
	 	 	 	 
	 
	 	 	 	 
	 

	 	 	 	 
	Print Name

	 	 	 	Print Name
	 
	 	 	 	 
	 
	 	 	 	 
	 

Title

	 	 	 	 

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APPENDIX A

TERMS AND CONDITIONS OF PERFORMANCE-BASED RESTRICTED STOCK UNITS

     Unless otherwise defined herein, capitalized terms used herein shall have the meanings
ascribed to them in the Plan.

     1. Grant.

          (a) The Company hereby grants to the Grantee under the Plan an award of the Target Number of
Restricted Stock Units set forth on the Notice of Grant, subject to all of the terms and conditions
in this Agreement and the Plan. For each Restricted Stock Unit that vests, the Grantee will be
entitled to receive one (1) Share (subject to automatic adjustment for stock splits, combinations
and other adjustments as contemplated in the Plan).

          (b) The number of Restricted Stock Units in which the Grantee may vest shall be measured based
on the Company’s relative performance versus a Peer Group as defined on Appendix B for the
Performance Period with respect to the following metrics measured at the beginning and end of the
Performance Period (or most readily available dates closest in time prior to such beginning and end
dates for the Peer Group companies):

	 	 	 	 	 
	Metrics	 	Weighting	 
	Revenue Growth
	 	 	25	%
	Operating Income Growth
	 	 	25	%
	Free Cash Flow Growth
	 	 	25	%
	Stock Price Performance
	 	 	25	%

          (c) Definitions.

               (i) “Revenue Growth” shall be the measure of revenue on a GAAP basis for each of the twelve
month periods as of the beginning and end of the Performance Period (or most readily available
dates closest in time prior to such beginning and end dates for the Peer Group companies)

               (ii) “Operating Income Growth” shall be the measure of income from operations on a GAAP basis,
for each of the twelve month periods as of the beginning and end of the Performance Period (or most
readily available dates closest in time prior to such beginning and end dates for the Peer Group
companies).

               (iii) “Free Cash Flow Growth” shall be the measure of cash flows from operating activities
less purchases of property and equipment on a GAAP basis, for each of the twelve month periods as
of the beginning and end of the Performance Period (or most readily available dates closest in time
prior to such beginning and end dates for the Peer Group companies).

               (iv) “Stock Price Performance” shall be the measure of the average daily price of one share of
common stock (as adjusted for stock splits, combinations and the like) as reported on the
applicable primary stock exchange on which such shares are listed for the ten (10) trading days
prior to (and including) the beginning and end of the Performance Period.

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          (d) The number of the Restricted Stock Units in which the Grantee may vest will range from
zero percent (0%) of the Target Number of Restricted Stock Units to two hundred percent (200%) of
the Target Number of Restricted Stock Units and shall be determined as follows:

	 	 	 	 	 	 	 	 	 	 	 
	Threshold	 	Target	 	Maximum
	Average	 	Payout	 	Average	 	Payout	 	Average	 	Payout
	Percentile	 	 	 	Percentile	 	 	 	Percentile	 	 
	Performance	 	 	 	Performance	 	 	 	Performance	 	 
	v.	 	 	 	v.	 	 	 	v.	 	 
	Peer Group	 	 	 	Peer Group	 	 	 	Peer Group	 	 
	35th 
	 	25%	 	50th	 	100%	 	75th (or higher)	 	200%

NOTE: The actual amount of the payout shall be interpolated on a straight line basis between (i)
the Threshold and Target, or (ii) the Target and Maximum, as the case may be. An Average
Percentile Performance v. Peer Group of less than the 35th percentile shall not be
entitled to any payout under this Award. An Average Percentile Performance v. Peer Group of
greater than the 75th percentile shall be entitled to a payout of 200% of the Target
Number of Restricted Stock Units.

     Example(s) for illustration purposes only:

	 	 	 	 	 
	Performance Metric	 	Example 1	 	Example 2
	Revenue Growth

	 	25th percentile
	 	50th percentile
	Operating Income Growth

	 	50th percentile
	 	80th percentile
	Free Cash Flow Growth

	 	35th percentile
	 	75th percentile
	Stock Price Performance

	 	90th percentile
	 	35th percentile
	Overall Average Percentile Performance

	 	50th percentile
	 	60th percentile
	Percent of Target Award Earned

	 	100% of Target
	 	140% of Target

          (e) When Shares are paid to the Grantee in payment for the Restricted Stock Units, par value
($.001 per share) will be deemed paid by the Grantee for each Restricted Stock Unit by services
rendered by the Grantee, and will be subject to the appropriate tax withholdings.

     2. Company’s Obligation to Pay. Each Restricted Stock Unit has a value equal to the
Fair Market Value of a Share on the date that the Restricted Stock Unit is granted. Unless and
until the Restricted Stock Units have vested in the manner set forth in Sections 3 through 5, the
Grantee will have no right to payment of such Restricted Stock Units. Prior to actual payment of
Shares upon the vesting of any Restricted Stock Units, such Restricted Stock Units will represent
an unsecured obligation. Payment of any vested Restricted Stock Units shall be made in whole
Shares only and any fractional Shares will be forfeited at the time of payment.

     3. Vesting Schedule/Period of Restriction. Except as provided in Sections 4 and 5,
and subject to Section 7, the Restricted Stock Units awarded by this Agreement shall vest in
accordance with the vesting provisions set forth on the Notice of Grant and Section 1 of this
Agreement. Restricted Stock Units shall not vest in accordance with any of the provisions of this
Agreement unless the Grantee shall have been continuously employed by the Company or by its Parent
or other successor or a Subsidiary from the Grant Date until the Vesting Date occurs.

     4. Modifications to Vesting Schedule.

          (a) Vesting upon Leave of Absence. In the event that the Grantee takes an authorized leave of
absence (“LOA”), the Restricted Stock Units awarded by this Agreement that are

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eligible to be earned shall either: (i) not be affected, or (ii) shall be deferred for a
period of time equal to the duration of such LOA, based on the Company’s LOA policy in effect at
such time as determined by the Company in its sole discretion.

          (b) Death or Disability of Grantee. In the event that the Grantee’s relationship with the
Company or its Parent or other successor or a Subsidiary as a Service Provider is terminated prior
to full vesting of the Restricted Stock Units due to his or her death or Disability, the unvested
portion of the Restricted Stock Units subject to this Restricted Stock Unit award shall be
forfeited on the date of the Grantee’s death or Disability.

          (c) Change in Control.

               (i) In the event of a Change in Control during the Performance Period, the Performance Period
shall be deemed to end immediately prior to the Change in Control for purposes of calculating the
performance of the Company against the Peer Group. The Vesting Date shall remain based on the
original term of the Performance Period as set forth in the Notice of Grant (unless vested earlier
in accordance with the terms of this Award and provided that Grantee remains a Service Provider to
the Company (or its successor(s)) through the Vesting Date or as otherwise set forth in this
Agreement).

[NOTE: Include the following if change of control arrangements are applicable to the grant:]

               [(ii) Notwithstanding Section 4(c)(i), if Grantee’s employment with the Company (or any Parent
or Subsidiary of the Company) is terminated by the Company (or the Parent or Subsidiary of the
Company) without Cause or by Grantee for Good Reason in Connection with a Change of Control, then
the greater of: (a) [AMOUNT OF ACCELERATION]% of the original number of Target Number of Restricted
Stock Units set forth in the Notice of Grant, or (b) the number of Restricted Stock Units which
would vest in accordance with Section 4(c)(i), shall immediately vest as of the date of Grantee’s
termination of employment with the Company (or any Parent or Subsidiary of the Company).

               (iii) Any additional vesting of Restricted Stock Units pursuant to Section 4(c)(i)(a) and
payment to Grantee of such underlying Shares shall be contingent on the following: (i) receipt by
the Company of a signed release of claims in form and substance satisfactory to the Company (or its
successor(s)) and expiration of any applicable revocation period with respect to such release; (ii)
Grantee agrees not to knowingly disparage, criticize or otherwise make any derogatory statements
regarding the Company, its directors or officers (other than statements made truthfully in response
to a subpoena or other compulsory legal process); and (iii) Grantee agrees to continue to comply
with the terms of the Company’s Employment, Confidential Information and Invention Assignment
Agreement entered into by Grantee.

               (iv) Definitions.

                    (A) Cause. For purposes of this Agreement, “Cause” means (i) Grantee’s willful and continued
failure to perform the duties and responsibilities of his position that is not corrected within a
thirty (30) day correction period that begins upon delivery to Grantee of a written demand for
performance from the Board that describes the basis for the Board’s belief that Grantee has not
substantially performed his duties; (ii) any act of personal dishonesty taken by Grantee in
connection with his or her responsibilities as an employee of the Company with the intention or
reasonable expectation that such may result in substantial personal enrichment of

-4-

 

Grantee; (iii) Grantee’s conviction of, or plea of nolo contendre to, a felony that the Board
reasonably believes has had or will have a material detrimental effect on the Company’s reputation
or business, or (iv) Grantee materially breaching Grantee’s Confidential Information Agreement,
which breach is (if capable of cure) not cured within thirty (30) days after the Company delivers
written notice to Grantee of the breach.

                    (B) Change of Control. For purposes of this Agreement, “Change of Control” shall mean the
occurrence of any of the following events:

                         (1) the consummation by the Company 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) more than fifty
percent (50%) of the total voting power represented by the voting securities of the Company or such
surviving entity outstanding immediately after such merger or consolidation;

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

                         (3) any “person” (as such term is used in Sections 13(d) and 14(d) of the Securities Exchange
Act of 1934, as amended) becoming the “beneficial owner” (as defined in Rule 13d-3 under said Act),
directly or indirectly, of securities of the Company representing 50% or more of the total voting
power represented by the Company’s then outstanding voting securities; or

                         (4) a change in the composition of the Board, as a result of which fewer than a majority of
the directors are Incumbent Directors. “Incumbent Directors” shall mean directors who either (A)
are directors of the Company as of the date hereof, or (B) are elected, or nominated for election,
to the Board with the affirmative votes of at least a majority of those directors whose election or
nomination was not in connection with any transactions described in subsections (i), (ii), or (iii)
or in connection with an actual or threatened proxy contest relating to the election of directors
of the Company.

                    (C) Good Reason. For purposes of this Agreement, “Good Reason” means the occurrence of any of
the following, without Grantee’s consent: (i) a material reduction of Grantee’s duties, title,
authority or responsibilities in effect immediately prior to a Change of Control; (ii) a reduction
in Grantee’s base salary or target annual cash incentive compensation; (iii) the failure of the
Company to obtain the assumption of the Agreement by the successor, or (iv) the Company requiring
Grantee to relocate his or her principal place of business or the Company relocating its
headquarters, in either case to a facility or location outside of a thirty-five (35) mile radius
from Grantee’s current principal place of employment; provided, however, that Grantee only will
have Good Reason if the Executive gives written notice to the Chief Executive Officer of the
Company of the event or circumstances constituting Good Reason specified in any of the preceding
clauses within ninety (90) days of its initial occurrence and such event or circumstance is not
cured within thirty (30) days after Grantee gives such written notice to the Board. Grantee’s
actions approving any of the foregoing changes (that otherwise may be considered Good Reason) will
be considered consent for the purposes of this Good Reason definition.

-5-

 

                    (D) In Connection with a Change of Control. For purposes of this Agreement, a termination of
Grantee’s employment with the Company is “in Connection with a Change of Control” if Grantee’s
employment is terminated at any time from thirty (30) days prior to a Change of Control through the
remainder of the original Performance Period following a Change of Control.]

     5. Administrator Discretion. The Administrator, in its discretion, may accelerate the
vesting of the balance, or some lesser portion of the balance, of the Restricted Stock Units at any
time, subject to the terms of the Plan. Such acceleration may result in tax or other consequences
to the Grantee. If so accelerated, such Restricted Stock Units will be considered as having vested
as of the date specified by the Administrator. If the Administrator, in its discretion,
accelerates the vesting of the balance, or some lesser portion of the balance, of the Restricted
Stock Units, the payment of such accelerated Restricted Stock Units nevertheless shall be made at
the same time or times as if such Restricted Stock Units had vested in accordance with the vesting
schedule set forth on the Notice of Grant and Section 1 of this Agreement or as otherwise provided
herein (whether or not the Grantee remains employed by the Company or by one of its Subsidiaries as
of such date(s)). The Grantee is hereby advised to consult with the Grantee’s own personal tax,
legal and financial advisors regarding the Grantee’s participation in the Plan before taking any
action related to the Plan.

     6. Payment after Vesting. Any Restricted Stock Units that vest in accordance with
Sections 3 through 4 of this Agreement will be paid to the Grantee (or in the event of the
Grantee’s death, to his or her estate) as soon as practicable following the Vesting Date, subject
to Section 9, but no later than March 15th of the calendar year following the Vesting
Date.

     7. Forfeiture. The balance of the Restricted Stock Units that have not vested
pursuant to Sections 3 through 5 at the time of the termination of the Grantee’s relationship with
the Company as a Service Provider for any or no reason will be forfeited.

     8. [Reserved.]

     9. Withholding of Taxes.

          (a) General. Regardless of any action the Company and/or the Grantee’s employer (the
“Employer”) take with respect to any or all income tax (including U.S. federal, state, local and/or
non-U.S. taxes), social insurance, payroll tax, payment on account or other tax-related
withholdings (“Tax-Related Items”), the Grantee acknowledges that the ultimate liability for all
Tax-Related Items legally due by the Grantee is and remains the Grantee’s responsibility and that
the Company and/or the Employer (i) make no guarantees or undertakings regarding the treatment of
any Tax-Related Items in connection with any aspect of the award, including the grant of the
Restricted Stock Units, the vesting of the Restricted Stock Units, the delivery of Shares, the
subsequent sale of any Shares received at vesting and the receipt of any dividends; and (ii) do not
commit to structure the terms of the grant or any aspect of the award to reduce or eliminate the
Grantee’s liability for Tax-Related Items.

          (b) Payment of Tax-Related Items. The Grantee authorizes the Company and/or the
Employer, at its discretion, to satisfy the obligations with regard to all Tax-Related Items by
withholding a portion of the Shares issued as payment for vested Restricted Stock Units that have
an aggregate market value sufficient to pay all Tax-Related Items required to be withheld by the
Company and/or the Employer with respect to the vesting of the Restricted Stock Units and issuance

-6-

 

of the Shares, unless the Company, in its sole discretion, either requires or otherwise
permits the Grantee to make alternate arrangements satisfactory to the Company for such
withholdings in advance of the arising of any withholding obligations. The number of Shares
withheld pursuant to the prior sentence will be rounded up to the nearest whole Share, with no
refund for any value of the Shares withheld in excess of the tax obligation as a result of such
rounding.

          If the obligation of Tax-Related Items is satisfied by reducing the number of Shares delivered
as described herein, the Grantee is deemed to have been issued the full number of Shares subject to
the award of Restricted Stock Units, notwithstanding that a number of the Shares are held back
solely for the purpose of paying the Tax-Related Items due as a result of any aspect of the award.

          If the foregoing method of withholding is prohibited or insufficient to satisfy all
Tax-Related Items required to be withheld by the Company and/or the Employer with respect to the
vesting of the Restricted Stock Units and issuance of the Shares or if the Company, in its
discretion, determines not to apply the foregoing method of withholding, then the Grantee hereby
authorizes the Company and/or the Employer to satisfy such obligations by one or a combination of
the following: (i) withholding from the Grantee’s wages or other cash compensation paid to the
Grantee by the Company and/or the Employer, to the maximum extent permitted by law; or (ii) selling
the applicable number of Shares or arranging for the sale of the applicable number of Shares (in
either case on the Grantee’s behalf and at the Grantee’s discretion pursuant to this authorization)
issued in settlement of vested Restricted Stock Units and retaining the requisite proceeds from
such sale.

          Finally, the Grantee shall pay to the Company and/or the Employer any amount of Tax-Related
Items that the Company and/or the Employer may be required to withhold as a result of the Grantee’s
participation in the Plan that cannot be satisfied by the means previously described. The Company
may refuse to deliver to the Grantee any Shares pursuant to the award if the Grantee fails to
comply with the Grantee’s obligations in connection with the Tax-Related Items, as described in
this Section 9.

     10. Rights as Stockholder. Neither the Grantee nor any person claiming under or
through the Grantee will have any of the rights or privileges of a stockholder of the Company in
respect of any Shares deliverable hereunder unless and until certificates representing such Shares
(which may be in book entry form) will have been issued, recorded on the records of the Company or
its transfer agents or registrars, and delivered to the Grantee (including through electronic
delivery to a brokerage account). After such issuance, recordation and delivery, the Grantee will
have all the rights of a stockholder of the Company with respect to voting such Shares and receipt
of dividends and distributions on such Shares.

     11. No Effect on Employment. Subject to any employment contract with the Grantee, the
terms of such employment will be determined from time to time by the Company, or the Subsidiary
employing the Grantee, as the case may be, and the Company, or the Subsidiary employing the
Grantee, as the case may be, will have the right, which is hereby expressly reserved, to terminate
or change the terms of the employment of the Grantee at any time for any reason whatsoever, with or
without good cause. The transactions contemplated hereunder and the vesting schedule set forth on
the first page of this Agreement do not constitute an express or implied promise of continued
employment for any period of time. A leave of absence or an interruption in service (including an
interruption during military service) authorized or acknowledged by the Company or the Subsidiary
employing the Grantee, as the case may be, shall not be deemed a termination of the Grantee’s
relationship with the Company as a Service Provider for the purposes of this Agreement.

-7-

 

     12. Address for Notices. Any notice to be given to the Company under the terms of
this Agreement will be addressed to the Company, in care of Stock Administrator, at 1745 Technology
Drive, San Jose, California 95110, USA or at such other address as the Company may hereafter
designate in writing, with a copy to the Company, C/O General Counsel, 1745 Technology Drive, San
Jose, California 95110, USA.

     13. Grant is Not Transferable. Except to the limited extent provided in this
Agreement or the Plan, this grant of Restricted Stock Units and the rights and privileges conferred
hereby will not be sold, pledged, assigned, hypothecated, transferred or disposed of any way
(whether by operation of law or otherwise) and will not be subject to sale under execution,
attachment or similar process, until the Grantee has been issued Shares in payment of the
Restricted Stock Units. Upon any attempt to sell, pledge, assign, hypothecate, transfer or
otherwise dispose of this grant, or any right or privilege conferred hereby, or upon any attempted
sale under any execution, attachment or similar process, this grant and the rights and privileges
conferred hereby immediately will become null and void. Notwithstanding the foregoing, Grantee
may, in a manner and in accordance with terms specified by the Administrator, transfer these
Restricted Stock Units to Grantee’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.

     14. Restrictions on Sale of Securities. The Shares issued as payment for vested
Restricted Stock Units under this Agreement will be registered under U.S. federal securities laws
and will be freely tradable upon receipt. However, a Grantee’s subsequent sale of the Shares may
be subject to any market blackout-period that may be imposed by the Company and must comply with
the Company’s insider trading policies, and any other U.S. securities laws or other Applicable
Laws.

     15. Binding Agreement. Subject to the limitation on the transferability of this grant
contained herein, this Agreement will be binding upon and inure to the benefit of the heirs,
legatees, legal representatives, successors and assigns of the parties hereto.

     16. Additional Conditions to Issuance of Certificates for Shares. The Company shall
not be required to issue any certificate or certificates for Shares hereunder prior to fulfillment
of all the following conditions: (a) the admission of such Shares to listing on all stock
exchanges on which such class of stock is then listed; (b) the completion of any registration or
other qualification of such Shares under any U.S. state or federal law or under the rulings or
regulations of the Securities and Exchange Commission or any other governmental regulatory body,
which the Administrator shall, in its absolute discretion, deem necessary or advisable; (c) the
obtaining of any approval or other clearance from any U.S. state or federal governmental agency,
which the Administrator shall, in its absolute discretion, determine to be necessary or advisable;
and (d) the lapse of such reasonable period of time following the Vesting Date of the Restricted
Stock Units as the Administrator may establish from time to time for reasons of administrative
convenience.

     17. Plan Governs. This Agreement is subject to all the terms and provisions of the
Plan. In the event of a conflict between one or more provisions of this Agreement and one or more
provisions of the Plan, the provisions of the Plan will govern.

     18. Administrator Authority. The Administrator will have the power to interpret the
Plan and this Agreement and to adopt such rules for the administration, interpretation and
application of the Plan as are consistent therewith and to interpret or revoke any such rules
(including, but not limited to, the determination of whether or not any Restricted Stock Units have
vested). All actions taken and all interpretations and determinations made by the Administrator in
good faith will be final

-8-

 

and binding upon the Grantee, the Company and all other interested persons. No member of the
Administrator will be personally liable for any action, determination or interpretation made in
good faith with respect to the Plan or this Agreement.

     19. Captions. Captions provided herein are for convenience only and are not to serve
as a basis for interpretation or construction of this Agreement.

     20. Agreement Severable. In the event that any provision in this Agreement will be
held invalid or unenforceable, such provision will be severable from, and such invalidity or
unenforceability will not be construed to have any effect on, the remaining provisions of this
Agreement.

     21. Modifications to the Agreement. This Agreement, including Appendix A, together
with the Plan, constitutes the entire understanding of the parties on the subjects covered, subject
to any applicable pre-existing agreement or agreement entered into after the date hereof relating
to full or partial acceleration of vesting in the event of a change of control of the Company (or
similar event). The Grantee expressly warrants that he or she is not accepting this Agreement in
reliance on any promises, representations, or inducements other than those contained herein or
expressly contemplated above. Modifications to this Agreement or the Plan can be made only in an
express written contract executed by a duly authorized officer of the Company. Notwithstanding
anything to the contrary in the Plan or this Agreement, the Company reserves the right to revise
this Agreement as it deems necessary or advisable, in its sole discretion and without the consent
of the Grantee, to comply with Section 409A of the Code or to otherwise avoid imposition of any
additional tax or income recognition under Section 409A of the Code prior to the actual payment of
Shares pursuant to this award of Restricted Stock Units. Notwithstanding the foregoing, if
required by Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), no
Restricted Stock Units will be paid to the Grantee (or in the event of the Grantee’s death, to his
or her estate) earlier than six (6) months and one (1) day following the date of the Termination of
the Grantee’s relationship with the Company as a Service Provider, subject to Section 9.

     22. Amendment, Suspension or Termination of the Plan. By accepting this Restricted
Stock Units award, the Grantee expressly warrants that he or she has received a right to receive
stock under the Plan, and has received, read and understood a description of the Plan. The Grantee
understands that the Plan is discretionary in nature and may be modified, amended, suspended or
terminated by the Company at any time, except as otherwise provided in the Plan and/or the
Agreement.

     23. Labor Law and Nature of Grant. In accepting the award of Restricted Stock Units,
the Grantee acknowledges that:

          (a) the Plan is established voluntarily by the Company;

          (b) the award of Restricted Stock Units is voluntary and occasional and does not create any
contractual or other right to receive future awards of Restricted Stock Units, or benefits in lieu
of Restricted Stock Units even if Restricted Stock Units have been awarded repeatedly in the past;

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

-9-

 

          (d) the Grantee’s participation in the Plan is voluntary;

          (e) the award is an extraordinary item that is outside the scope of the Grantee’s employment
or service contract, if any;

          (f) the award is not part of normal or expected compensation or salary for any purposes,
including, but not limited to, calculation of any severance, resignation, termination, redundancy,
end of service payments, bonuses, long-service awards, pension or retirement or welfare benefits or
similar payments;

          (g) in the event that the Grantee is not an employee of the Company, the award will not be
interpreted to form an employment or service contract or relationship with the Company; and,
furthermore, the award will not be interpreted to form an employment or service contract or
relationship with the Employer or any Parent or other successor or a Subsidiary of the Company;

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

          (i) the Company is not providing any tax, legal, or financial advice, nor is the Company
making any recommendations regarding the Grantee’s participation in the Plan or the acquisition or
sale of Shares; and

          (j) the Grantee is hereby advised to consult with the Grantee’s own personal tax, legal and
financial advisors regarding the Grantee’s participation in the Plan before taking any action
related to the Plan.

     24. Data Privacy. The Grantee hereby explicitly and unambiguously consents to the
collection, use and transfer, in electronic or other form, of the Grantee’s personal data as
described in the Notice of Grant and this Agreement and any other Restricted Stock Unit grant
materials by and among, as applicable, the Employer, the Company and its Subsidiaries for the
exclusive purpose of implementing, administering and managing the Grantee’s participation in the
Plan.

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

          The Grantee understands that Data will be transferred to E*Trade or such other stock plan
service provider as may be selected by the Company in the future, which is assisting the Company
with the implementation, administration and management of the Plan. The Grantee understands the
recipients of Data may be located in the Grantee’s country, in the United States or elsewhere, and
that the recipients’ country may have different data privacy laws and protections than the
Grantee’s country. The Grantee understands that the Grantee may request a list with the names and
addresses of any potential recipients of the Data by contacting the Grantee’s local human resources
representative. The Grantee authorizes the Company, E*Trade and any other potential recipients
which may assist the Company (presently or in the future) with implementing, administering and
managing the Plan to receive, possess, use, retain and transfer the Data, in

-10-

 

electronic or other form, for the sole purpose of implementing, administering and managing the
Grantee’s participation in the Plan. The Grantee understands that he or she may, at any time, view
the Data, request additional information about the storage and processing of the Data, require any
necessary amendments to the Data or refuse or withdraw the consents herein, in any case without
cost, by contacting in writing the Grantee’s local human resources representative. The Grantee
understands, however, that refusing or withdrawing consent may affect the Grantee’s ability to
participate in the Plan. For more information on the consequences of the Grantee’s refusal to
consent or withdrawal of consent, the Grantee understands that he or she may contact his or her
local human resources representative.

     25. Notice of Governing Law. This award of Restricted Stock Units shall be governed
by, and construed in accordance with, the laws of the State of California, without regard to
principles of conflict of laws. For purposes of litigating any dispute that arises directly or
indirectly from the relationship of the parties evidenced by the award of Restricted Stock Units,
the parties hereby submit to and consent to the exclusive jurisdiction of the State of California
and agree that such litigation shall be conducted on in the courts of Santa Clara County,
California or the federal courts for the United States for the Northern District of California, and
no other courts, where this grant is made and/or to be performed.

     26. Electronic Delivery. The Company may, in its sole discretion, decide to deliver
any documents related to Restricted Stock Units awarded under the Plan or future Restricted Stock
Units that may be awarded under the Plan by electronic means, or to request the Grantee’s consent
to participate in the Plan by electronic means. The Grantee hereby consents to receive such
documents by electronic delivery and if requested, to agree to participate in the Plan through an
on-line or electronic system established and maintained by the Company or another third party
designated by the Company.

-11-

 

APPENDIX B

PEER GROUP

[NOTE: THE LIST OF PEER GROUP COMPANIES SHALL BE DETERMINED BY THE COMPENSATION COMMITTEE IN
CONNECTION WITH PERFORMANCE RSU GRANTS.]

[NOTE: USE THE FOLLOWING PEER GROUP FOR THE NOVEMBER 2006 PERFORMANCE RSU GRANTS (AS APPROVED BY
THE COMPENSATION COMMITTEE):]

Adaptec

Avid Technology

Checkpoint Systems

Ciena

Citrix Systems

Conexant Systems

Electronics for Imaging

Emulex

Extreme Networks

Foundry Networks

McDATA Corporation

Network Appliance

Palm

Plantronics

QLogic

Quantum

SMART Modular Technologies

Verifone Holdings

-1-

 

BROCADE COMMUNICATIONS SYSTEMS, INC.

1999 STOCK PLAN

EXERCISE NOTICE

Brocade Communications Systems, Inc.

1745 Technology Drive

San Jose CA 95110

Attention: Secretary

     1. Exercise of Option. Effective as of today,                                         ,           , the
undersigned (“Purchaser”) hereby elects to purchase
                                         shares (the “Shares”) of the
Common Stock of Brocade Communications Systems, Inc. (the “Company”) under and pursuant to the
Brocade Communications Systems, Inc. 1999 Stock Plan (the “Plan”) and the Stock Option Agreement
dated,                                          (the “Option Agreement”). The purchase price for the Shares shall be
$                                        , as required by the Option Agreement.

     2. Delivery of Payment. Purchaser herewith delivers to the Company the full purchase
price for the Shares.

     3. Representations of Purchaser. Purchaser acknowledges that Purchaser has received,
read and understood the Plan and the Option Agreement and agrees to abide by and be bound by their
terms and conditions.

     4. Rights as Shareholder. Until the issuance (as evidenced by the appropriate entry
on the books of the Company or of a duly authorized transfer agent of the Company) of the Shares,
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 Shares so acquired shall be
issued to the Optionee as soon as practicable after exercise of the Option. No adjustment will be
made for a dividend or other right for which the record date is prior to the date of issuance,
except as provided in [Section 13] of the Plan.

     5. Tax Consultation. Purchaser understands that Purchaser may suffer adverse tax
consequences as a result of Purchaser’s purchase or disposition of the Shares. Purchaser
represents that Purchaser has consulted with any tax consultants Purchaser deems advisable in
connection with the purchase or disposition of the Shares and that Purchaser is not relying on the
Company for any tax advice.

     6. Entire Agreement; Governing Law. The Plan and Option Agreement are incorporated
herein by reference. This Agreement, the Plan and the Option Agreement constitute the entire
agreement of the parties with respect to the subject matter hereof and supersede in their entirety
all prior undertakings and agreements of the Company and Purchaser with respect to the subject
matter hereof, and may not be modified adversely to the Purchaser’s interest except by means of a
writing signed by the Company and Purchaser. This agreement is governed by the internal
substantive laws, but not the choice of law rules, of Delaware.

	 	 	 
	Submitted by:

	 	Accepted by:
	 
	 	 
	 
	 	 
	PURCHASER:

	 	BROCADE COMMUNICATIONS SYSTEMS, INC.
	 
	 	 
	 
	 	 
	 

	 	 
	Signature

	 	Signature
	 
	 	 
	 
	 	 
	 

	 	 
	Print Name

	 	Print Name & Title
	 
	 	 
	 
	 	 
	Address:

	 	Address:
	 
	 	 
	 

	 	Brocade Communications Systems, Inc.
	 

	 	1745 Technology Drive
	 

	 	San Jose CA 95110
	 
	 	 
	 

	 	 
	 

	 	 
	 
	 	 
	 

	 	 
	 

	 	Date Received

 

 

CONSENT OF SPOUSE

     The undersigned spouse of Optionee has read and hereby approves the terms and conditions of
the Plan and this Option Agreement. In consideration of the Company’s granting his or her spouse
the right to purchase Shares as set forth in the Plan and this Option Agreement, the undersigned
hereby agrees to be irrevocably bound by the terms and conditions of the Plan and this Option
Agreement and further agrees that any community property interest shall be similarly bound. The
undersigned hereby appoints the undersigned’s spouse as attorney-in-fact for the undersigned with
respect to any amendment or exercise of rights under the Plan or this Option Agreement.

	 	 	 
	 

	 	 
	 

	 	Spouse of Optioneeexv4w1

Exhibit 4.1

 

BMC Software, Inc.

 

INDENTURE

Dated as of June 4, 2008

 

Wells Fargo Bank, N.A.

Trustee

 

 

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Page
	ARTICLE I. DEFINITIONS AND INCORPORATION BY REFERENCE	 	 	1	 
	 

	 	Section 1.1.
	 	Definitions
	 	 	1	 
	 

	 	Section 1.2.
	 	Other Definitions
	 	 	4	 
	 

	 	Section 1.3.
	 	Incorporation by Reference of Trust Indenture Act
	 	 	5	 
	 

	 	Section 1.4.
	 	Rules of Construction
	 	 	5	 
	 
	 	 	 	 	 	 	 	 
	ARTICLE II. THE SECURITIES	 	 	6	 
	 

	 	Section 2.1.
	 	Issuable in Series
	 	 	6	 
	 

	 	Section 2.2.
	 	Establishment of Terms of Series of Securities
	 	 	6	 
	 

	 	Section 2.3.
	 	Execution and Authentication
	 	 	8	 
	 

	 	Section 2.4.
	 	Registrar and Paying Agent
	 	 	9	 
	 

	 	Section 2.5.
	 	Paying Agent to Hold Money in Trust
	 	 	10	 
	 

	 	Section 2.6.
	 	Securityholder Lists
	 	 	10	 
	 

	 	Section 2.7.
	 	Transfer and Exchange
	 	 	10	 
	 

	 	Section 2.8.
	 	Mutilated, Destroyed, Lost and Stolen Securities
	 	 	11	 
	 

	 	Section 2.9.
	 	Outstanding Securities
	 	 	12	 
	 

	 	Section 2.10.
	 	Treasury Securities
	 	 	12	 
	 

	 	Section 2.11.
	 	Temporary Securities
	 	 	12	 
	 

	 	Section 2.12.
	 	Cancellation
	 	 	13	 
	 

	 	Section 2.13.
	 	Defaulted Interest
	 	 	13	 
	 

	 	Section 2.14.
	 	Global Securities
	 	 	13	 
	 

	 	Section 2.15.
	 	CUSIP Numbers
	 	 	14	 
	 
	 	 	 	 	 	 	 	 
	ARTICLE III. REDEMPTION	 	 	14	 
	 

	 	Section 3.1.
	 	Notice to Trustee
	 	 	14	 
	 

	 	Section 3.2.
	 	Selection of Securities to be Redeemed
	 	 	15	 
	 

	 	Section 3.3.
	 	Notice of Redemption
	 	 	15	 
	 

	 	Section 3.4.
	 	Effect of Notice of Redemption
	 	 	16	 
	 

	 	Section 3.5.
	 	Deposit of Redemption Price
	 	 	16	 
	 

	 	Section 3.6.
	 	Securities Redeemed in Part
	 	 	16	 
	 
	 	 	 	 	 	 	 	 
	ARTICLE IV. COVENANTS	 	 	16	 
	 

	 	Section 4.1.
	 	Payment of Principal and Interest
	 	 	16	 
	 

	 	Section 4.2.
	 	SEC Reports
	 	 	16	 
	 

	 	Section 4.3.
	 	Compliance Certificate
	 	 	16	 
	 

	 	Section 4.4.
	 	Stay, Extension and Usury Laws
	 	 	17	 
	 

	 	Section 4.5.
	 	Corporate Existence
	 	 	17	 
	 
	 	 	 	 	 	 	 	 
	ARTICLE V. SUCCESSORS	 	 	17	 
	 

	 	Section 5.1.
	 	When Company May Merge, Etc
	 	 	17	 
	 

	 	Section 5.2.
	 	Successor Corporation Substituted
	 	 	18	 
	 
	 	 	 	 	 	 	 	 

i

 

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Page
	ARTICLE VI. DEFAULTS AND REMEDIES	 	 	18	 
	 

	 	Section 6.1.
	 	Events of Default
	 	 	18	 
	 

	 	Section 6.2.
	 	Acceleration of Maturity; Rescission and Annulment
	 	 	19	 
	 

	 	Section 6.3.
	 	Collection of Indebtedness and Suits for Enforcement by Trustee
	 	 	20	 
	 

	 	Section 6.4.
	 	Trustee May File Proofs of Claim
	 	 	21	 
	 

	 	Section 6.5.
	 	Trustee May Enforce Claims Without Possession of Securities
	 	 	21	 
	 

	 	Section 6.6.
	 	Application of Money Collected
	 	 	21	 
	 

	 	Section 6.7.
	 	Limitation on Suits
	 	 	22	 
	 

	 	Section 6.8.
	 	Unconditional Right of Holders to Receive Principal and Interest
	 	 	22	 
	 

	 	Section 6.9.
	 	Restoration of Rights and Remedies
	 	 	23	 
	 

	 	Section 6.10.
	 	Rights and Remedies Cumulative
	 	 	23	 
	 

	 	Section 6.11.
	 	Delay or Omission Not Waiver
	 	 	23	 
	 

	 	Section 6.12.
	 	Control by Holders
	 	 	23	 
	 

	 	Section 6.13.
	 	Waiver of Past Defaults
	 	 	24	 
	 

	 	Section 6.14.
	 	Undertaking for Costs
	 	 	24	 
	 
	 	 	 	 	 	 	 	 
	ARTICLE VII. TRUSTEE	 	 	24	 
	 

	 	Section 7.1.
	 	Duties of Trustee
	 	 	24	 
	 

	 	Section 7.2.
	 	Rights of Trustee
	 	 	26	 
	 

	 	Section 7.3.
	 	Individual Rights of Trustee
	 	 	26	 
	 

	 	Section 7.4.
	 	Trustee’s Disclaimer
	 	 	27	 
	 

	 	Section 7.5.
	 	Notice of Defaults
	 	 	27	 
	 

	 	Section 7.6.
	 	Reports by Trustee to Holders
	 	 	27	 
	 

	 	Section 7.7.
	 	Compensation and Indemnity
	 	 	27	 
	 

	 	Section 7.8.
	 	Replacement of Trustee
	 	 	28	 
	 

	 	Section 7.9.
	 	Successor Trustee by Merger, etc
	 	 	29	 
	 

	 	Section 7.10.
	 	Eligibility; Disqualification
	 	 	29	 
	 

	 	Section 7.11.
	 	Preferential Collection of Claims Against Company
	 	 	29	 
	 
	 	 	 	 	 	 	 	 
	ARTICLE VIII. SATISFACTION AND DISCHARGE; DEFEASANCE	 	 	29	 
	 

	 	Section 8.1.
	 	Satisfaction and Discharge of Indenture
	 	 	29	 
	 

	 	Section 8.2.
	 	Application of Trust Funds; Indemnification
	 	 	30	 
	 

	 	Section 8.3.
	 	Legal Defeasance of Securities of any Series
	 	 	31	 
	 

	 	Section 8.4.
	 	Covenant Defeasance
	 	 	32	 
	 

	 	Section 8.5.
	 	Repayment to Company
	 	 	34	 
	 

	 	Section 8.6.
	 	Reinstatement
	 	 	34	 
	 
	 	 	 	 	 	 	 	 
	ARTICLE IX. AMENDMENTS AND WAIVERS	 	 	34	 
	 

	 	Section 9.1.
	 	Without Consent of Holders
	 	 	34	 
	 

	 	Section 9.2.
	 	With Consent of Holders
	 	 	35	 
	 

	 	Section 9.3.
	 	Limitations
	 	 	35	 
	 

	 	Section 9.4.
	 	Compliance with Trust Indenture Act
	 	 	36	 
	 

	 	Section 9.5.
	 	Revocation and Effect of Consents
	 	 	36	 
	 

	 	Section 9.6.
	 	Notation on or Exchange of Securities
	 	 	36	 
	 

	 	Section 9.7.
	 	Trustee Protected
	 	 	36	 
	 
	 	 	 	 	 	 	 	 

ii

 

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Page
	ARTICLE X. MISCELLANEOUS	 	 	37	 
	 

	 	Section 10.1.
	 	Trust Indenture Act Controls
	 	 	37	 
	 

	 	Section 10.2.
	 	Notices
	 	 	37	 
	 

	 	Section 10.3.
	 	Communication by Holders with Other Holders
	 	 	38	 
	 

	 	Section 10.4.
	 	Certificate and Opinion as to Conditions Precedent
	 	 	38	 
	 

	 	Section 10.5.
	 	Statements Required in Certificate or Opinion
	 	 	38	 
	 

	 	Section 10.6.
	 	Rules by Trustee and Agents
	 	 	38	 
	 

	 	Section 10.7.
	 	Legal Holidays
	 	 	39	 
	 

	 	Section 10.8.
	 	No Recourse Against Others
	 	 	39	 
	 

	 	Section 10.9.
	 	Counterparts
	 	 	39	 
	 

	 	Section 10.10.
	 	Governing Laws
	 	 	39	 
	 

	 	Section 10.11.
	 	No Adverse Interpretation of Other Agreements
	 	 	39	 
	 

	 	Section 10.12.
	 	Successors
	 	 	39	 
	 

	 	Section 10.13.
	 	Severability
	 	 	40	 
	 

	 	Section 10.14.
	 	Table of Contents, Headings, Etc
	 	 	40	 
	 

	 	Section 10.15.
	 	Securities in a Foreign Currency or in ECU
	 	 	40	 
	 

	 	Section 10.16.
	 	Judgment Currency
	 	 	41	 
	 
	 	 	 	 	 	 	 	 
	ARTICLE XI. SINKING FUNDS	 	 	41	 
	 

	 	Section 11.1.
	 	Applicability of Article
	 	 	41	 
	 

	 	Section 11.2.
	 	Satisfaction of Sinking Fund Payments with Securities
	 	 	41	 
	 

	 	Section 11.3.
	 	Redemption of Securities for Sinking Fund
	 	 	42	 

iii

 

BMC Software, Inc.

Reconciliation and tie between Trust Indenture Act of 1939 and

Indenture, dated as of June 4, 2008

	 	 	 
	§ 310(a)(1)
	 	7.10

	(a)(2)
	 	7.10

	(a)(3)
	 	Not Applicable

	(a)(4)
	 	Not Applicable

	(a)(5)
	 	7.10

	(b)
	 	7.10

	§ 311(a)
	 	7.11

	(b)
	 	7.11

	(c)
	 	Not Applicable

	§ 312(a)
	 	2.6

	(b)
	 	10.3

	(c)
	 	10.3

	§ 313(a)
	 	7.6

	(b)(1)
	 	7.6

	(b)(2)
	 	7.6

	(c)(1)
	 	7.6

	(d)
	 	7.6

	§ 314(a)
	 	4.2, 10.5

	(b)
	 	Not Applicable

	(c)(1)
	 	10.4

	(c)(2)
	 	10.4

	(c)(3)
	 	Not Applicable

	(d)
	 	Not Applicable

	(e)
	 	10.5

	(f)
	 	Not Applicable

	§ 315(a)
	 	7.1

	(b)
	 	7.5

	(c)
	 	7.1

	(d)
	 	7.1

	(e)
	 	6.14

	§ 316(a)
	 	2.10

	(a)(1)(A)
	 	6.12

	(a)(1)(B)
	 	6.13

	(b)
	 	6.8

	§ 317(a)(1)
	 	6.3

	(a)(2)
	 	6.4

	(b)
	 	2.5

	§ 318(a)
	 	10.1

 

			
	Note:	 	This reconciliation and tie shall not, for any purpose, be deemed to be part of the Indenture.

iv

 

          Indenture dated as of June 4, 2008 between BMC Software, Inc., a Delaware corporation
(“Company”), and Wells Fargo Bank, N.A., a National Banking Association (“Trustee”).

          Each party agrees as follows for the benefit of the other party and for the equal and ratable
benefit of the Holders of the Securities issued under this Indenture.

ARTICLE I.

DEFINITIONS AND INCORPORATION BY REFERENCE

     Section 1.1. Definitions.

          “Additional Amounts” means any additional amounts which are required hereby or by any
Security, under circumstances specified herein or therein, to be paid by the Company in respect of
certain taxes imposed on Holders specified herein or therein and which are owing to such Holders.

          “Affiliate” of any specified person means any other person directly or indirectly controlling
or controlled by or under common control with such specified person. For the purposes of this
definition, “control” (including, with correlative meanings, the terms “controlled by” and “under
common control with”), as used with respect to any person, shall mean the possession, directly or
indirectly, of the power to direct or cause the direction of the management or policies of such
person, whether through the ownership of voting securities or by agreement or otherwise.

          “Agent” means any Registrar, Paying Agent or Service Agent.

          “Board of Directors” means the Board of Directors of the Company or any duly authorized
committee thereof.

          “Board Resolution” means a copy of a resolution certified by the Secretary or an Assistant
Secretary of the Company to have been adopted by the Board of Directors or pursuant to
authorization by the Board of Directors and to be in full force and effect on the date of the
certificate and delivered to the Trustee.

          “Business Day” means, unless otherwise provided by Board Resolution, Officers’ Certificate or
supplemental indenture hereto for a particular Series, any day except a Saturday, Sunday or a legal
holiday in The City of New York on which banking institutions are authorized or required by law,
regulation or executive order to close.

          “Capital Stock” means any and all shares, interests, participations, rights or other
equivalents (however designated) of corporate stock.

          “Company” means the party named as such above until a successor replaces it and thereafter
means the successor.

 

 

          “Company Order” means a written order signed in the name of the Company by two Officers, one
of whom must be the Company’s principal executive officer, principal financial officer or principal
accounting officer.

          “Company Request” means a written request signed in the name of the Company by its Chief
Executive Officer, the President or a Vice President, and by its Treasurer, an Assistant Treasurer,
its Secretary or an Assistant Secretary, and delivered to the Trustee.

          “Corporate Trust Office” means the office of the Trustee at which at any particular time its
corporate trust business shall be principally administered.

          “Default” means any event which is, or after notice or passage of time or both would be, an
Event of Default.

          “Depositary” means, with respect to the Securities of any Series issuable or issued in whole
or in part in the form of one or more Global Securities, the person designated as Depositary for
such Series by the Company, which Depositary shall be a clearing agency registered under the
Exchange Act; and if at any time there is more than one such person, “Depositary” as used with
respect to the Securities of any Series shall mean the Depositary with respect to the Securities of
such Series.

          “Discount Security” means any Security that provides for an amount less than the stated
principal amount thereof to be due and payable upon declaration of acceleration of the maturity
thereof pursuant to Section 6.2.

          “Dollars” and “$” means the currency of The United States of America.

          “ECU” means the European Currency Unit as determined by the Commission of the European Union.

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

          “Foreign Currency” means any currency or currency unit issued by a government other than the
government of The United States of America.

          “Foreign Government Obligations” means, with respect to Securities of any Series that are
denominated in a Foreign Currency, (i) direct obligations of the government that issued or caused
to be issued such currency for the payment of which obligations its full faith and credit is
pledged or (ii) obligations of a person controlled or supervised by or acting as an agency or
instrumentality of such government the timely payment of which is unconditionally guaranteed as a
full faith and credit obligation by such government, which, in either case under clauses (i) or
(ii), are not callable or redeemable at the option of the issuer thereof.

          “GAAP” means accounting principles generally accepted in the United States of America set
forth in the opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of the Financial
Accounting Standards Board or in such other statements by such other entity as have

2

 

been approved by a significant segment of the accounting profession, which are in effect as of
the date of determination.

          “Global Security” or “Global Securities” means a Security or Securities, as the case may be,
in the form established pursuant to Section 2.2 evidencing all or part of a Series of Securities,
issued to the Depositary for such Series or its nominee, and registered in the name of such
Depositary or nominee.

          “Holder” or “Securityholder” means a person in whose name a Security is registered.

          “Indenture” means this Indenture as amended or supplemented from time to time and shall
include the form and terms of particular Series of Securities established as contemplated
hereunder.

          “interest” with respect to any Discount Security which by its terms bears interest only after
Maturity, means interest payable after Maturity.

          “Maturity,” when used with respect to any Security, means the date on which the principal of
such Security becomes due and payable as therein or herein provided, whether at the Stated Maturity
or by declaration of acceleration, call for redemption or otherwise.

          “Officer” means the Chief Executive Officer, President, any Vice-President, the Treasurer, the
Secretary, any Assistant Treasurer or any Assistant Secretary of the Company.

          “Officers’ Certificate” means a certificate signed by two Officers, one of whom must be the
Company’s principal executive officer, principal financial officer or principal accounting officer.

          “Opinion of Counsel” means a written opinion of legal counsel who is acceptable to the
Trustee. The counsel may be an employee of or counsel to the Company.

          “person” means any individual, corporation, partnership, joint venture, association, limited
liability company, joint-stock company, trust, unincorporated organization or government or any
agency or political subdivision thereof.

          “principal” of a Security means the principal of the Security plus, when appropriate, the
premium, if any, on, and any Additional Amounts in respect of, the Security.

          “Responsible Officer” means any officer of the Trustee in its Corporate Trust Office and also
means, with respect to a particular corporate trust matter, any other officer to whom any corporate
trust matter is referred because of his or her knowledge of and familiarity with a particular
subject.

          “SEC” means the Securities and Exchange Commission.

          “Securities” means the debentures, notes or other debt instruments of the Company of any
Series authenticated and delivered under this Indenture.

3

 

          “Series” or “Series of Securities” means each series of debentures, notes or other debt
instruments of the Company created pursuant to Sections 2.1 and 2.2 hereof.

          “Stated Maturity” when used with respect to any Security, means the date specified in such
Security as the fixed date on which the principal of such Security or interest is due and payable.

          “Subsidiary” of any specified person means any corporation, association or other business
entity of which more than 50% of the total voting power of shares of Capital Stock entitled
(without regard to the occurrence of any contingency) to vote in the election of directors,
managers or trustees thereof is at the time owned or controlled, directly or indirectly, by such
person or one or more of the other Subsidiaries of that person or a combination thereof.

          “TIA” means the Trust Indenture Act of 1939 (15 U.S. Code §§ 77aaa-77bbbb) as in effect on the
date of this Indenture; provided, however, that in the event the Trust Indenture
Act of 1939 is amended after such date, “TIA” means, to the extent required by any such amendment,
the Trust Indenture Act as so amended.

          “Trustee” means the person named as the “Trustee” in the first paragraph of this instrument
until a successor Trustee shall have become such pursuant to the applicable provisions of this
Indenture, and thereafter “Trustee” shall mean or include each person who is then a Trustee
hereunder, and if at any time there is more than one such person, “Trustee” as used with respect to
the Securities of any Series shall mean the Trustee with respect to Securities of that Series.

          “U.S. Government Obligations” means securities which are (i) direct obligations of The United
States of America for the payment of which its full faith and credit is pledged or (ii) obligations
of a person controlled or supervised by and acting as an agency or instrumentality of The United
States of America the payment of which is unconditionally guaranteed as a full faith and credit
obligation by The United States of America, and which in the case of (i) and (ii) are not callable
or redeemable at the option of the issuer thereof, and shall also include a depository receipt
issued by a bank or trust company as custodian with respect to any such U.S. Government Obligation
or a specific payment of interest on or principal of any such U.S. Government Obligation held by
such custodian for the account of the holder of a depository receipt, provided that (except as
required by law) such custodian is not authorized to make any deduction from the amount payable to
the holder of such depository receipt from any amount received by the custodian in respect of the
U.S. Government Obligation evidenced by such depository receipt.

     Section 1.2. Other Definitions.

	 	 	 	 	 
	 	 	DEFINED IN
	TERM	 	SECTION
	“Bankruptcy Law”
	 	 	6.1	 
	“Custodian”
	 	 	6.1	 
	“Event of Default”
	 	 	6.1	 
	“Journal”
	 	 	10.15	 

4

 

	 	 	 	 	 
	 	 	DEFINED IN
	TERM	 	SECTION
	“Judgment Currency”
	 	 	10.16	 
	“Legal Holiday”
	 	 	10.7	 
	“mandatory sinking fund payment”
	 	 	11.1	 
	“Market Exchange Rate”
	 	 	10.15	 
	“New York Banking Day”
	 	 	10.16	 
	“optional sinking fund payment”
	 	 	11.1	 
	“Paying Agent”
	 	 	2.4	 
	“Registrar”
	 	 	2.4	 
	“Required Currency”
	 	 	10.16	 
	“Service Agent”
	 	 	2.4	 
	“successor person”
	 	 	5.1	 

     Section 1.3. Incorporation by Reference of Trust Indenture Act.

          Whenever this Indenture refers to a provision of the TIA, the provision is incorporated by
reference in and made a part of this Indenture. The following TIA terms used in this Indenture
have the following meanings:

          “Commission” means the SEC.

          “indenture securities” means the Securities.

          “indenture security holder” means a Securityholder.

          “indenture to be qualified” means this Indenture.

          “indenture trustee” or “institutional trustee” means the Trustee.

          “obligor” on the indenture securities means the Company and any successor
obligor upon the Securities.

          All other terms used in this Indenture that are defined by the TIA, defined by TIA reference
to another statute or defined by SEC rule under the TIA and not otherwise defined herein are used
herein as so defined.

     Section 1.4. Rules of Construction.

          Unless the context otherwise requires:

     (a) a term has the meaning assigned to it;

     (b) an accounting term not otherwise defined has the meaning assigned to it in
accordance with GAAP;

     (c) “or” is not exclusive;

     (d) words in the singular include the plural, and in the plural include the
singular; and

5

 

     (e) provisions apply to successive events and transactions.

ARTICLE II.

THE SECURITIES

     Section 2.1. Issuable in Series.

          The aggregate principal amount of Securities that may be authenticated and delivered under
this Indenture is unlimited. The Securities may be issued in one or more Series. All Securities of
a Series shall be identical except as may be set forth or determined in the manner provided in a
Board Resolution, supplemental indenture or Officers’ Certificate detailing the adoption of the
terms thereof pursuant to authority granted under a Board Resolution. In the case of Securities of
a Series to be issued from time to time, the Board Resolution, Officers’ Certificate or
supplemental indenture detailing the adoption of the terms thereof pursuant to authority granted
under a Board Resolution may provide for the method by which specified terms (such as interest
rate, maturity date, record date or date from which interest shall accrue) are to be determined.
Securities may differ between Series in respect of any matters, provided that all Series of
Securities shall be equally and ratably entitled to the benefits of the Indenture.

     Section 2.2. Establishment of Terms of Series of Securities.

          At or prior to the issuance of any Securities within a Series, the following shall be
established (as to the Series generally, in the case of Subsection 2.2.1 and either as to such
Securities within the Series or as to the Series generally in the case of Subsections 2.2.2 through
2.2.23) by or pursuant to a Board Resolution, and set forth or determined in the manner provided in
a Board Resolution, supplemental indenture or Officers’ Certificate:

          2.2.1. the title of the Series (which shall distinguish the Securities of that particular
Series from the Securities of any other Series);

          2.2.2. the price or prices (expressed as a percentage of the principal amount thereof) at
which the Securities of the Series will be issued;

          2.2.3. any limit upon the aggregate principal amount of the Securities of the Series which
may be authenticated and delivered under this Indenture (except for Securities authenticated and
delivered upon registration of transfer of, or in exchange for, or in lieu of, other Securities of
the Series pursuant to Section 2.7, 2.8, 2.11, 3.6 or 9.6);

          2.2.4. the date or dates on which the principal of the Securities of the Series is
payable;

          2.2.5. the rate or rates (which may be fixed or variable) per annum or, if applicable, the
method used to determine such rate or rates (including, but not limited to, any commodity,
commodity index, stock exchange index or financial index) at which the Securities of the Series
shall bear interest, if any, the date or dates from which such interest, if any, shall accrue, the
date or dates on which such interest, if any, shall commence and be payable and any regular record
date for the interest payable on any interest payment date;

6

 

          2.2.6. the place or places where the principal of and interest, if any, on the Securities
of the Series shall be payable, where the Securities of such Series may be surrendered for
registration of transfer or exchange and where notices and demands to or upon the Company in
respect of the Securities of such Series and this Indenture may be served, and the method of such
payment, if by wire transfer, mail or other means;

          2.2.7. if applicable, the period or periods within which, the price or prices at which and
the terms and conditions upon which the Securities of the Series may be redeemed, in whole or in
part, at the option of the Company;

          2.2.8. the obligation, if any, of the Company to redeem or purchase the Securities of the
Series pursuant to any sinking fund or analogous provisions or at the option of a Holder thereof
and the period or periods within which, the price or prices at which and the terms and conditions
upon which Securities of the Series shall be redeemed or purchased, in whole or in part, pursuant
to such obligation;

          2.2.9. the dates, if any, on which and the price or prices at which the Securities of the
Series will be repurchased by the Company at the option of the Holders thereof and other detailed
terms and provisions of such repurchase obligations;

          2.2.10. if other than denominations of $1,000 and any integral multiple thereof, the
denominations in which the Securities of the Series shall be issuable;

          2.2.11. the forms of the Securities of the Series and whether the Securities will be
issuable as Global Securities;

          2.2.12. if other than the principal amount thereof, the portion of the principal amount of
the Securities of the Series that shall be payable upon declaration of acceleration of the maturity
thereof pursuant to Section 6.2;

          2.2.13. the currency of denomination of the Securities of the Series, which may be Dollars
or any Foreign Currency, including, but not limited to, the ECU, and if such currency of
denomination is a composite currency other than the ECU, the agency or organization, if any,
responsible for overseeing such composite currency;

          2.2.14. the designation of the currency, currencies or currency units in which payment of
the principal of and interest, if any, on the Securities of the Series will be made;

          2.2.15. if payments of principal of or interest, if any, on the Securities of the Series
are to be made in one or more currencies or currency units other than that or those in which such
Securities are denominated, the manner in which the exchange rate with respect to such payments
will be determined;

          2.2.16. the manner in which the amounts of payment of principal of or interest, if any, on
the Securities of the Series will be determined, if such amounts may be determined by reference to
an index based on a currency or currencies or by reference to a commodity, commodity index, stock
exchange index or financial index;

7

 

          2.2.17. the provisions, if any, relating to any security provided for the Securities of
the Series;

          2.2.18. any addition to or change in the Events of Default which applies to any Securities
of the Series and any change in the right of the Trustee or the requisite Holders of such
Securities to declare the principal amount thereof due and payable pursuant to Section 6.2;

          2.2.19. any addition to or change in the covenants set forth in Articles IV or V which
applies to Securities of the Series;

          2.2.20. any other terms of the Securities of the Series (which may supplement, modify or
delete any provision of this Indenture insofar as it applies to such Series);

          2.2.21. any depositaries, interest rate calculation agents, exchange rate calculation
agents or other agents with respect to Securities of such Series if other than those appointed
herein;

          2.2.22. the provisions, if any, relating to conversion of any Securities of such Series,
including if applicable, the conversion price, the conversion period, provisions as to whether
conversion will be mandatory, at the option of the Holders thereof or at the option of the Company,
the events requiring an adjustment of the conversion price and provisions affecting conversion if
such Series of Securities are redeemed; and

          2.2.23. whether the Securities of such Series will be senior debt securities or
subordinated debt securities and, if applicable, a description of the subordination terms thereof.

          All Securities of any one Series need not be issued at the same time and may be issued from
time to time, consistent with the terms of this Indenture, if so provided by or pursuant to the
Board Resolution, supplemental indenture hereto or Officers’ Certificate referred to above.

     Section 2.3. Execution and Authentication.

          Two Officers shall sign the Securities for the Company by manual or facsimile signature.

          If an Officer whose signature is on a Security no longer holds that office at the time the
Security is authenticated, the Security shall nevertheless be valid.

          A Security shall not be valid until authenticated by the manual signature of the Trustee or an
authenticating agent. The signature shall be conclusive evidence that the Security has been
authenticated under this Indenture.

          The Trustee shall at any time, and from time to time, authenticate Securities for original
issue in the principal amount provided in the Board Resolution, supplemental indenture hereto or
Officers’ Certificate, upon receipt by the Trustee of a Company Order. Such Company Order may
authorize authentication and delivery pursuant to oral or electronic instructions from the Company
or its duly authorized agent or agents, which oral instructions shall be promptly

8

 

confirmed in writing. Each Security shall be dated the date of its authentication unless
otherwise provided by a Board Resolution, a supplemental indenture hereto or an Officers’
Certificate.

          The aggregate principal amount of Securities of any Series outstanding at any time may not
exceed any limit upon the maximum principal amount for such Series set forth in the Board
Resolution, supplemental indenture hereto or Officers’ Certificate delivered pursuant to Section
2.2, except as provided in Section 2.8.

          Prior to the issuance of Securities of any Series, the Trustee shall have received and
(subject to Section 7.2) shall be fully protected in relying on: (a) the Board Resolution,
supplemental indenture hereto or Officers’ Certificate establishing the form of the Securities of
that Series or of Securities within that Series and the terms of the Securities of that Series or
of Securities within that Series, (b) an Officers’ Certificate complying with Section 10.4, and (c)
an Opinion of Counsel complying with Section 10.4.

          The Trustee shall have the right to decline to authenticate and deliver any Securities of such
Series: (a) if the Trustee, being advised by counsel, determines that such action may not be taken
lawfully; or (b) if the Trustee in good faith by its board of directors or trustees, executive
committee or a trust committee of directors and/or vice-presidents shall determine that such action
would expose the Trustee to personal liability to Holders of any then outstanding Series of
Securities.

          The Trustee may appoint an authenticating agent acceptable to the Company to authenticate
Securities. An authenticating agent may authenticate Securities whenever the Trustee may do so.
Each reference in this Indenture to authentication by the Trustee includes authentication by such
agent. An authenticating agent has the same rights as an Agent to deal with the Company or an
Affiliate of the Company.

     Section 2.4. Registrar and Paying Agent.

          The Company shall maintain, with respect to each Series of Securities, at the place or places
specified with respect to such Series pursuant to Section 2.2, an office or agency where Securities
of such Series may be presented or surrendered for payment (“Paying Agent”), where Securities of
such Series may be surrendered for registration of transfer or exchange (“Registrar”) and where
notices and demands to or upon the Company in respect of the Securities of such Series and this
Indenture may be served (“Service Agent”). The Registrar shall keep a register with respect to
each Series of Securities and to their transfer and exchange. The Company will give prompt written
notice to the Trustee of the name and address, and any change in the name or address, of each
Registrar, Paying Agent or Service Agent. If at any time the Company shall fail to maintain any
such required Registrar, Paying Agent or Service Agent or shall fail to furnish the Trustee with
the name and address thereof, such presentations, surrenders, notices and demands may be made or
served at the Corporate Trust Office of the Trustee, and the Company hereby appoints the Trustee as
its agent to receive all such presentations, surrenders, notices and demands.

          The Company may also from time to time designate one or more co-registrars, additional paying
agents or additional service agents and may from time to time rescind such

9

 

designations; provided, however, that no such designation or rescission shall
in any manner relieve the Company of its obligations to maintain a Registrar, Paying Agent and
Service Agent in each place so specified pursuant to Section 2.2 for Securities of any Series for
such purposes. The Company will give prompt written notice to the Trustee of any such designation
or rescission and of any change in the name or address of any such co-registrar, additional paying
agent or additional service agent. The term “Registrar” includes any co-registrar; the term
"Paying Agent” includes any additional paying agent; and the term “Service Agent” includes any
additional service agent.

          The Company hereby appoints the Trustee the initial Registrar, Paying Agent and Service Agent
for each Series unless another Registrar, Paying Agent or Service Agent, as the case may be, is
appointed prior to the time Securities of that Series are first issued.

     Section 2.5. Paying Agent to Hold Money in Trust.

          The Company shall require each Paying Agent other than the Trustee to agree in writing that
the Paying Agent will hold in trust, for the benefit of Securityholders of any Series of
Securities, or the Trustee, all money held by the Paying Agent for the payment of principal of or
interest on the Series of Securities, and will notify the Trustee of any default by the Company in
making any such payment. While any such default continues, the Trustee may require a Paying Agent
to pay all money held by it to the Trustee. The Company at any time may require a Paying Agent to
pay all money held by it to the Trustee. Upon payment over to the Trustee, the Paying Agent (if
other than the Company or a Subsidiary of the Company) shall have no further liability for the
money. If the Company or a Subsidiary of the Company acts as Paying Agent, it shall segregate and
hold in a separate trust fund for the benefit of Securityholders of any Series of Securities all
money held by it as Paying Agent.

     Section 2.6. Securityholder Lists.

          The Trustee shall preserve in as current a form as is reasonably practicable the most recent
list available to it of the names and addresses of Securityholders of each Series of Securities and
shall otherwise comply with TIA § 312(a). If the Trustee is not the Registrar, the Company shall
furnish to the Trustee at least ten days before each interest payment date and at such other times
as the Trustee may request in writing a list, in such form and as of such date as the Trustee may
reasonably require, of the names and addresses of Securityholders of each Series of Securities.

     Section 2.7. Transfer and Exchange.

          Where Securities of a Series are presented to the Registrar or a co-registrar with a request
to register a transfer or to exchange them for an equal principal amount of Securities of the same
Series, the Registrar shall register the transfer or make the exchange if its requirements for such
transactions are met. To permit registrations of transfers and exchanges, the Trustee shall
authenticate Securities at the Registrar’s request. No service charge shall be made for any
registration of transfer or exchange (except as otherwise expressly permitted herein), but the
Company may require payment of a sum sufficient to cover any transfer tax or similar

10

 

governmental charge payable in connection therewith (other than any such transfer tax or
similar governmental charge payable upon exchanges pursuant to Sections 2.11, 3.6 or 9.6).

          Neither the Company nor the Registrar shall be required (a) to issue, register the transfer
of, or exchange Securities of any Series for the period beginning at the opening of business
fifteen days immediately preceding the mailing of a notice of redemption of Securities of that
Series selected for redemption and ending at the close of business on the day of such mailing, or
(b) to register the transfer of or exchange Securities of any Series selected, called or being
called for redemption as a whole or the portion being redeemed of any such Securities selected,
called or being called for redemption in part.

     Section 2.8. Mutilated, Destroyed, Lost and Stolen Securities.

          If any mutilated Security is surrendered to the Trustee, the Company shall execute and the
Trustee shall authenticate and deliver in exchange therefor a new Security of the same Series and
of like tenor and principal amount and bearing a number not contemporaneously outstanding.

          If there shall be delivered to the Company and the Trustee (i) evidence to their satisfaction
of the destruction, loss or theft of any Security and (ii) such security or indemnity as may be
required by them to save each of them and any agent of either of them harmless, then, in the
absence of notice to the Company or the Trustee that such Security has been acquired by a bona fide
purchaser, the Company shall execute and upon its request the Trustee shall authenticate and make
available for delivery, in lieu of any such destroyed, lost or stolen Security, a new Security of
the same Series and of like tenor and principal amount and bearing a number not contemporaneously
outstanding.

          In case any such mutilated, destroyed, lost or stolen Security has become or is about to
become due and payable, the Company in its discretion may, instead of issuing a new Security, pay
such Security.

          Upon the issuance of any new Security under this Section, the Company may require the payment
of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation
thereto and any other expenses (including the fees and expenses of the Trustee) connected
therewith.

          Every new Security of any Series issued pursuant to this Section in lieu of any destroyed,
lost or stolen Security shall constitute an original additional contractual obligation of the
Company, whether or not the destroyed, lost or stolen Security shall be at any time enforceable by
anyone, and shall be entitled to all the benefits of this Indenture equally and proportionately
with any and all other Securities of that Series duly issued hereunder.

          The provisions of this Section are exclusive and shall preclude (to the extent lawful) all
other rights and remedies with respect to the replacement or payment of mutilated, destroyed, lost
or stolen Securities.

11

 

     Section 2.9. Outstanding Securities.

          The Securities outstanding at any time are all the Securities authenticated by the Trustee
except for those canceled by it, those delivered to it for cancellation, those reductions in the
interest on a Global Security effected by the Trustee in accordance with the provisions hereof and
those described in this Section as not outstanding.

          If a Security is replaced pursuant to Section 2.8, it ceases to be outstanding until the
Trustee receives proof satisfactory to it that the replaced Security is held by a bona fide
purchaser.

          If the Paying Agent (other than the Company, a Subsidiary of the Company or an Affiliate of
the Company) holds on the Maturity of Securities of a Series money sufficient to pay such
Securities payable on that date, then on and after that date such Securities of the Series cease to
be outstanding and interest on them ceases to accrue.

          A Security does not cease to be outstanding because the Company or an Affiliate of the Company
holds the Security.

          In determining whether the Holders of the requisite principal amount of outstanding Securities
have given any request, demand, authorization, direction, notice, consent or waiver hereunder, the
principal amount of a Discount Security that shall be deemed to be outstanding for such purposes
shall be the amount of the principal thereof that would be due and payable as of the date of such
determination upon a declaration of acceleration of the Maturity thereof pursuant to Section 6.2.

     Section 2.10. Treasury Securities.

          In determining whether the Holders of the required principal amount of Securities of a Series
have concurred in any request, demand, authorization, direction, notice, consent or waiver,
Securities of a Series owned by the Company or any Affiliate of the Company shall be disregarded,
except that for the purposes of determining whether the Trustee shall be protected in relying on
any such request, demand, authorization, direction, notice, consent or waiver only Securities of a
Series that the Trustee knows are so owned shall be so disregarded.

     Section 2.11. Temporary Securities.

          Until definitive Securities are ready for delivery, the Company may prepare and the Trustee
shall authenticate temporary Securities upon a Company Order. Temporary Securities shall be
substantially in the form of definitive Securities but may have variations that the Company
considers appropriate for temporary Securities. Without unreasonable delay, the Company shall
prepare and the Trustee upon request shall authenticate definitive Securities of the same Series
and date of maturity in exchange for temporary Securities. Until so exchanged, temporary
securities shall have the same rights under this Indenture as the definitive Securities.

12

 

     Section 2.12. Cancellation.

          The Company at any time may deliver Securities to the Trustee for cancellation. The Registrar
and the Paying Agent shall forward to the Trustee any Securities surrendered to them for
registration of transfer, exchange or payment. The Trustee shall cancel all Securities surrendered
for transfer, exchange, payment, replacement or cancellation and shall destroy such canceled
Securities (subject to the record retention requirement of the Exchange Act) and deliver a
certificate of such destruction to the Company, unless the Company otherwise directs. The Company
may not issue new Securities to replace Securities that it has paid or delivered to the Trustee for
cancellation.

     Section 2.13. Defaulted Interest.

          If the Company defaults in a payment of interest on a Series of Securities, it shall pay the
defaulted interest, plus, to the extent permitted by law, any interest payable on the defaulted
interest, to the persons who are Securityholders of the Series on a subsequent special record date.
The Company shall fix the record date and payment date. At least 10 days before the record date,
the Company shall mail to the Trustee and to each Securityholder of the Series a notice that states
the record date, the payment date and the amount of interest to be paid. The Company may pay
defaulted interest in any other lawful manner.

     Section 2.14. Global Securities.

          2.14.1. Terms of Securities. A Board Resolution, a supplemental indenture hereto
or an Officers’ Certificate shall establish whether the Securities of a Series shall be issued in
whole or in part in the form of one or more Global Securities and the Depositary for such Global
Security or Securities.

          2.14.2. Transfer and Exchange. Notwithstanding any provisions to the contrary
contained in Section 2.7 of the Indenture and in addition thereto, any Global Security shall be
exchangeable pursuant to Section 2.7 of the Indenture for Securities registered in the names of
Holders other than the Depositary for such Security or its nominee only if (i) such Depositary
notifies the Company that it is unwilling or unable to continue as Depositary for such Global
Security or if at any time such Depositary ceases to be a clearing agency registered under the
Exchange Act, and, in either case, the Company fails to appoint a successor Depositary registered
as a clearing agency under the Exchange Act within 90 days of such event or (ii) the Company
executes and delivers to the Trustee an Officers’ Certificate to the effect that such Global
Security shall be so exchangeable. Any Global Security that is exchangeable pursuant to the
preceding sentence shall be exchangeable for Securities registered in such names as the Depositary
shall direct in writing in an aggregate principal amount equal to the principal amount of the
Global Security with like tenor and terms.

          Except as provided in this Section 2.14.2, a Global Security may not be transferred except as
a whole by the Depositary with respect to such Global Security to a nominee of such Depositary, by
a nominee of such Depositary to such Depositary or another nominee of such Depositary or by the
Depositary or any such nominee to a successor Depositary or a nominee of such a successor
Depositary.

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          2.14.3. Legend. Any Global Security issued hereunder shall bear a legend in
substantially the following form:

          “This Security is a Global Security within the meaning of the Indenture hereinafter referred
to and is registered in the name of the Depositary or a nominee of the Depositary. This Security
is exchangeable for Securities registered in the name of a person other than the Depositary or its
nominee only in the limited circumstances described in the Indenture, and may not be transferred
except as a whole by the Depositary to a nominee of the Depositary, by a nominee of the Depositary
to the Depositary or another nominee of the Depositary or by the Depositary or any such nominee to
a successor Depositary or a nominee of such a successor Depositary.”

          2.14.4. Acts of Holders. The Depositary, as a Holder, may appoint agents and
otherwise authorize participants to give or take any request, demand, authorization, direction,
notice, consent, waiver or other action which a Holder is entitled to give or take under the
Indenture.

          2.14.5. Payments. Notwithstanding the other provisions of this Indenture, unless
otherwise specified as contemplated by Section 2.2, payment of the principal of and interest, if
any, on any Global Security shall be made to the Holder thereof.

          2.14.6. Consents, Declaration and Directions. Except as provided in Section
2.14.5, the Company, the Trustee and any Agent shall treat a person as the Holder of such principal
amount of outstanding Securities of such Series represented by a Global Security as shall be
specified in a written statement of the Depositary with respect to such Global Security, for
purposes of obtaining any consents, declarations, waivers or directions required to be given by the
Holders pursuant to this Indenture.

     Section 2.15. CUSIP Numbers.

          The Company in issuing the Securities may use “CUSIP” numbers (if then generally in use), and,
if so, the Trustee shall use “CUSIP” numbers in notices of redemption as a convenience to Holders;
provided that any such notice may state that no representation is made as to the
correctness of such numbers either as printed on the Securities or as contained in any notice of a
redemption and that reliance may be placed only on the other elements of identification printed on
the Securities, and any such redemption shall not be affected by any defect in or omission of such
numbers.

ARTICLE III.

REDEMPTION

     Section 3.1. Notice to Trustee.

          The Company may, with respect to any Series of Securities, reserve the right to redeem and pay
the Series of Securities or may covenant to redeem and pay the Series of Securities or any part
thereof prior to the Stated Maturity thereof at such time and on such terms as provided for in such
Securities. If a Series of Securities is redeemable and the Company wants or is obligated to
redeem prior to the Stated Maturity thereof all or part of the Series of

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Securities pursuant to the terms of such Securities, it shall notify the Trustee of the
redemption date and the principal amount of Series of Securities to be redeemed. The Company shall
give the notice at least 30 days before the redemption date (or such shorter notice as may be
acceptable to the Trustee).

     Section 3.2. Selection of Securities to be Redeemed.

          Unless otherwise indicated for a particular Series by a Board Resolution, a supplemental
indenture hereto or an Officers’ Certificate, if less than all the Securities of a Series are to be
redeemed, the Trustee shall select the Securities of the Series to be redeemed in any manner that
the Trustee deems fair and appropriate. The Trustee shall make the selection from Securities of
the Series outstanding not previously called for redemption. The Trustee may select for redemption
portions of the principal of Securities of the Series that have denominations larger than $1,000.
Securities of the Series and portions of them it selects shall be in amounts of $1,000 or whole
multiples of $1,000 or, with respect to Securities of any Series issuable in other denominations
pursuant to Section 2.2.10, the minimum principal denomination for each Series and integral
multiples thereof. Provisions of this Indenture that apply to Securities of a Series called for
redemption also apply to portions of Securities of that Series called for redemption.

     Section 3.3. Notice of Redemption.

          Unless otherwise indicated for a particular Series by Board Resolution, a supplemental
indenture hereto or an Officers’ Certificate, at least 15 days but not more than 60 days before a
redemption date, the Company shall mail a notice of redemption by first-class mail to each Holder
whose Securities are to be redeemed.

          The notice shall identify the Securities of the Series to be redeemed and shall state:

     (a) the redemption date;

     (b) the redemption price;

     (c) the name and address of the Paying Agent;

     (d) that Securities of the Series called for redemption must be surrendered to the
Paying Agent to collect the redemption price;

     (e) that interest on Securities of the Series called for redemption ceases to accrue
on and after the redemption date;

     (f) the CUSIP number, if any; and

     (g) any other information as may be required by the terms of the particular Series
or the Securities of a Series being redeemed.

          At the Company’s request, the Trustee shall give the notice of redemption in the Company’s
name and at its expense.

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     Section 3.4. Effect of Notice of Redemption.

          Once notice of redemption is mailed or published as provided in Section 3.3, Securities of a
Series called for redemption become due and payable on the redemption date and at the redemption
price. A notice of redemption may not be conditional. Upon surrender to the Paying Agent, such
Securities shall be paid at the redemption price plus accrued interest to the redemption date.

     Section 3.5. Deposit of Redemption Price.

          On or before 10:00 a.m., New York City time, on the redemption date, the Company shall deposit
with the Paying Agent money sufficient to pay the redemption price of and accrued interest, if any,
on all Securities to be redeemed on that date.

     Section 3.6. Securities Redeemed in Part.

          Upon surrender of a Security that is redeemed in part, the Trustee shall authenticate for the
Holder a new Security of the same Series and the same maturity equal in principal amount to the
unredeemed portion of the Security surrendered.

ARTICLE IV.

COVENANTS

     Section 4.1. Payment of Principal and Interest.

          The Company covenants and agrees for the benefit of the Holders of each Series of Securities
that it will duly and punctually pay the principal of and interest, if any, on the Securities of
that Series in accordance with the terms of such Securities and this Indenture.

     Section 4.2. SEC Reports.

          The Company shall deliver to the Trustee within 15 days after it files them with the SEC
copies of the annual reports and of the information, documents, and other reports (or copies of
such portions of any of the foregoing as the SEC may by rules and regulations prescribe) which the
Company is required to file with the SEC pursuant to Section 13 or 15(d) of the Exchange Act. The
Company also shall comply with the other provisions of TIA § 314(a).

     Section 4.3. Compliance Certificate.

          The Company shall deliver to the Trustee, within 120 days after the end of each fiscal year of
the Company, an Officers’ Certificate stating that a review of the activities of the Company and
its Subsidiaries during the preceding fiscal year has been made under the supervision of the
signing Officers with a view to determining whether the Company has kept, observed, performed and
fulfilled its obligations under this Indenture, and further stating, as to each such Officer
signing such certificate, that to the best of his/her knowledge the Company has kept, observed,
performed and fulfilled each and every covenant contained in this Indenture and is not in default
in the performance or observance of any of the terms, provisions and conditions

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hereof (or, if a Default or Event of Default shall have occurred, describing all such Defaults
or Events of Default of which he may have knowledge).

          The Company will, so long as any of the Securities are outstanding, deliver to the Trustee,
promptly upon becoming aware of any Default or Event of Default, an Officers’ Certificate
specifying such Default or Event of Default and what action the Company is taking or proposes to
take with respect thereto.

     Section 4.4. Stay, Extension and Usury Laws.

          The Company covenants (to the extent that it may lawfully do so) that it will not at any time
insist upon, plead, or in any manner whatsoever claim or take the benefit or advantage of, any
stay, extension or usury law wherever enacted, now or at any time hereafter in force, which may
affect the covenants or the performance of this Indenture or the Securities; and the Company (to
the extent it may lawfully do so) hereby expressly waives all benefit or advantage of any such law
and covenants that it will not, by resort to any such law, hinder, delay or impede the execution of
any power herein granted to the Trustee, but will suffer and permit the execution of every such
power as though no such law has been enacted.

     Section 4.5. Corporate Existence.

          Subject to Article V, the Company will do or cause to be done all things necessary to preserve
and keep in full force and effect its corporate existence and rights (charter and statutory);
provided, however, that the Company shall not be required to preserve any such right if the Board
of Directors shall determine that the preservation thereof is no longer desirable in the conduct of
the business of the Company and its Subsidiaries taken as a whole and that the loss thereof is not
adverse in any material respect to the Holders.

ARTICLE V.

SUCCESSORS

     Section 5.1. When Company May Merge, Etc.

          The Company shall not consolidate with or merge with or into, or convey, transfer or lease all
or substantially all of its properties and assets to, any person (a “successor person”) unless:

     (a) the Company is the surviving corporation or the successor person (if other than
the Company) is a corporation organized and validly existing under the laws of any U.S.
domestic jurisdiction and expressly assumes the Company’s obligations on the Securities and
under this Indenture; and

     (b) immediately after giving effect to the transaction, no Default or Event of
Default, shall have occurred and be continuing.

          The Company shall deliver to the Trustee prior to the consummation of the proposed transaction
an Officers’ Certificate to the foregoing effect and an Opinion of Counsel stating that the
proposed transaction and any supplemental indenture comply with this Indenture.

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          Notwithstanding the above, any Subsidiary of the Company may consolidate with, merge into or
transfer all or part of its properties to the Company. Neither an Officers’ Certificate nor an
Opinion of Counsel shall be required to be delivered in connection therewith.

     Section 5.2. Successor Corporation Substituted.

          Upon any consolidation or merger, or any sale, lease, conveyance or other disposition of all
or substantially all of the assets of the Company in accordance with Section 5.1, the successor
corporation formed by such consolidation or into or with which the Company is merged or to which
such sale, lease, conveyance or other disposition is made shall succeed to, and be substituted for,
and may exercise every right and power of, the Company under this Indenture with the same effect as
if such successor person has been named as the Company herein; provided, however,
that the predecessor Company in the case of a sale, conveyance or other disposition (other than a
lease) shall be released from all obligations and covenants under this Indenture and the
Securities.

ARTICLE VI.

DEFAULTS AND REMEDIES

     Section 6.1. Events of Default.

          “Event of Default,” wherever used herein with respect to Securities of any Series, means any
one of the following events, unless in the establishing Board Resolution, supplemental indenture or
Officers’ Certificate, it is provided that such Series shall not have the benefit of said Event of
Default:

     (a) default in the payment of any interest on any Security of that Series when it
becomes due and payable, and continuance of such default for a period of 30 days (unless the
entire amount of such payment is deposited by the Company with the Trustee or with a Paying
Agent prior to the expiration of such period of 30 days); or

     (b) default in the payment of principal of any Security of that Series at its
Maturity; or

     (c) default in the performance or breach of any covenant or warranty of the Company
in this Indenture (other than a covenant or warranty that has been included in this
Indenture solely for the benefit of Series of Securities other than that Series), which
default continues uncured for a period of 60 days after there has been given, by registered
or certified mail, to the Company by the Trustee or to the Company and the Trustee by the
Holders of at least 25% in principal amount of the outstanding Securities of that Series a
written notice specifying such default or breach and requiring it to be remedied and stating
that such notice is a “Notice of Default” hereunder; or

     (d) the Company pursuant to or within the meaning of any Bankruptcy Law:

     (i) commences a voluntary case,

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     (ii) consents to the entry of an order for relief against it in an involuntary
case,

     (iii) consents to the appointment of a Custodian of it or for all or
substantially all of its property,

     (iv) makes a general assignment for the benefit of its creditors, or

     (v) generally is unable to pay its debts as the same become due; or

     (e) a court of competent jurisdiction enters an order or decree under any Bankruptcy
Law that:

     (i) is for relief against the Company in an involuntary case,

     (ii) appoints a Custodian of the Company or for all or substantially all of its
property, or

     (iii) orders the liquidation of the Company,

     and the order or decree remains unstayed and in effect for 60 days; or

     (f) any other Event of Default provided with respect to Securities of that Series,
which is specified in a Board Resolution, a supplemental indenture hereto or an Officers’
Certificate, in accordance with Section 2.2.18.

          The term “Bankruptcy Law” means title 11, U.S. Code or any similar Federal or State law for
the relief of debtors. The term “Custodian” means any receiver, trustee, assignee, liquidator or
similar official under any Bankruptcy Law.

     Section 6.2. Acceleration of Maturity; Rescission and Annulment.

          If an Event of Default with respect to Securities of any Series at the time outstanding occurs
and is continuing (other than an Event of Default referred to in Section 6.1(d) or (e)) then in
every such case the Trustee or the Holders of not less than 25% in principal amount of the
outstanding Securities of that Series may declare the principal amount (or, if any Securities of
that Series are Discount Securities, such portion of the principal amount as may be specified in
the terms of such Securities) of and accrued and unpaid interest, if any, on all of the Securities
of that Series to be due and payable immediately, by a notice in writing to the Company (and to the
Trustee if given by Holders), and upon any such declaration such principal amount (or specified
amount) and accrued and unpaid interest, if any, shall become immediately due and payable. If an
Event of Default specified in Section 6.1(d) or (e) shall occur, the principal amount (or specified
amount) of and accrued and unpaid interest, if any, on all outstanding Securities shall ipso facto
become and be immediately due and payable without any declaration or other act on the part of the
Trustee or any Holder.

          At any time after such a declaration of acceleration with respect to any Series has been made
and before a judgment or decree for payment of the money due has been obtained by

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the Trustee as hereinafter in this Article provided, the Holders of a majority in principal
amount of the outstanding Securities of that Series, by written notice to the Company and the
Trustee, may rescind and annul such declaration and its consequences if all Events of Default with
respect to Securities of that Series, other than the non-payment of the principal and interest, if
any, of Securities of that Series which have become due solely by such declaration of acceleration,
have been cured or waived as provided in Section 6.13.

          No such rescission shall affect any subsequent Default or impair any right consequent thereon.

     Section 6.3. Collection of Indebtedness and Suits for Enforcement by Trustee.

          The Company covenants that if

     (a) default is made in the payment of any interest on any Security when such
interest becomes due and payable and such default continues for a period of 30 days, or

     (b) default is made in the payment of principal of any Security at the Maturity
thereof, or

     (c) default is made in the deposit of any sinking fund payment when and as due by
the terms of a Security,

then, the Company will, upon demand of the Trustee, pay to it, for the benefit of the Holders of
such Securities, the whole amount then due and payable on such Securities for principal and
interest and, to the extent that payment of such interest shall be legally enforceable, interest on
any overdue principal and any overdue interest at the rate or rates prescribed therefor in such
Securities, and, in addition thereto, such further amount as shall be sufficient to cover the costs
and expenses of collection, including the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel.

          If the Company fails to pay such amounts forthwith upon such demand, the Trustee, in its own
name and as trustee of an express trust, may institute a judicial proceeding for the collection of
the sums so due and unpaid, may prosecute such proceeding to judgment or final decree and may
enforce the same against the Company or any other obligor upon such Securities and collect the
moneys adjudged or deemed to be payable in the manner provided by law out of the property of the
Company or any other obligor upon such Securities, wherever situated.

          If an Event of Default with respect to any Securities of any Series occurs and is continuing,
the Trustee may in its discretion proceed to protect and enforce its rights and the rights of the
Holders of Securities of such Series by such appropriate judicial proceedings as the Trustee shall
deem most effectual to protect and enforce any such rights, whether for the specific enforcement of
any covenant or agreement in this Indenture or in aid of the exercise of any power granted herein,
or to enforce any other proper remedy.

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     Section 6.4. Trustee May File Proofs of Claim.

          In case of the pendency of any receivership, insolvency, liquidation, bankruptcy,
reorganization, arrangement, adjustment, composition or other judicial proceeding relative to the
Company or any other obligor upon the Securities or the property of the Company or of such other
obligor or their creditors, the Trustee (irrespective of whether the principal of the Securities
shall then be due and payable as therein expressed or by declaration or otherwise and irrespective
of whether the Trustee shall have made any demand on the Company for the payment of overdue
principal or interest) shall be entitled and empowered, by intervention in such proceeding or
otherwise,

     (a) to file and prove a claim for the whole amount of principal and interest owing
and unpaid in respect of the Securities and to file such other papers or documents as may be
necessary or advisable in order to have the claims of the Trustee (including any claim for
the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel) and of the Holders allowed in such judicial proceeding, and

     (b) to collect and receive any moneys or other property payable or deliverable on
any such claims and to distribute the same,

and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official
in any such judicial proceeding is hereby authorized by each Holder to make such payments to the
Trustee and, in the event that the Trustee shall consent to the making of such payments directly to
the Holders, to pay to the Trustee any amount due it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the
Trustee under Section 7.7.

          Nothing herein contained shall be deemed to authorize the Trustee to authorize or consent to
or accept or adopt on behalf of any Holder any plan of reorganization, arrangement, adjustment or
composition affecting the Securities or the rights of any Holder thereof or to authorize the
Trustee to vote in respect of the claim of any Holder in any such proceeding.

     Section 6.5. Trustee May Enforce Claims Without Possession of Securities.

          All rights of action and claims under this Indenture or the Securities may be prosecuted and
enforced by the Trustee without the possession of any of the Securities or the production thereof
in any proceeding relating thereto, and any such proceeding instituted by the Trustee shall be
brought in its own name as trustee of an express trust, and any recovery of judgment shall, after
provision for the payment of the reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel, be for the ratable benefit of the Holders of the Securities in
respect of which such judgment has been recovered.

     Section 6.6. Application of Money Collected.

          Any money collected by the Trustee pursuant to this Article shall be applied in the following
order, at the date or dates fixed by the Trustee and, in case of the distribution of such

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money on account of principal or interest, upon presentation of the Securities and the
notation thereon of the payment if only partially paid and upon surrender thereof if fully paid:

          First: To the payment of all amounts due the Trustee under Section 7.7; and

          Second: To the payment of the amounts then due and unpaid for principal of and interest on the
Securities in respect of which or for the benefit of which such money has been collected, ratably,
without preference or priority of any kind, according to the amounts due and payable on such
Securities for principal and interest, respectively; and

          Third: To the Company.

     Section 6.7. Limitation on Suits.

          No Holder of any Security of any Series shall have any right to institute any proceeding,
judicial or otherwise, with respect to this Indenture, or for the appointment of a receiver or
trustee, or for any other remedy hereunder, unless

     (a) such Holder has previously given written notice to the Trustee of a continuing
Event of Default with respect to the Securities of that Series;

     (b) the Holders of not less than 25% in principal amount of the outstanding
Securities of that Series shall have made written request to the Trustee to institute
proceedings in respect of such Event of Default in its own name as Trustee hereunder;

     (c) such Holder or Holders have offered to the Trustee reasonable indemnity against
the costs, expenses and liabilities to be incurred in compliance with such request;

     (d) the Trustee for 60 days after its receipt of such notice, request and offer of
indemnity has failed to institute any such proceeding; and

     (e) no direction inconsistent with such written request has been given to the
Trustee during such 60-day period by the Holders of a majority in principal amount of the
outstanding Securities of that Series;

it being understood and intended that no one or more of such Holders shall have any right in any
manner whatever by virtue of, or by availing of, any provision of this Indenture to affect, disturb
or prejudice the rights of any other of such Holders, or to obtain or to seek to obtain priority or
preference over any other of such Holders or to enforce any right under this Indenture, except in
the manner herein provided and for the equal and ratable benefit of all such Holders.

     Section 6.8. Unconditional Right of Holders to Receive Principal and Interest.

          Notwithstanding any other provision in this Indenture, the Holder of any Security shall have
the right, which is absolute and unconditional, to receive payment of the principal of and
interest, if any, on such Security on the Stated Maturity or Stated Maturities expressed in such
Security (or, in the case of redemption, on the redemption date) and to institute suit for the

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enforcement of any such payment, and such rights shall not be impaired without the consent of
such Holder.

     Section 6.9. Restoration of Rights and Remedies.

          If the Trustee or any Holder has instituted any proceeding to enforce any right or remedy
under this Indenture and such proceeding has been discontinued or abandoned for any reason, or has
been determined adversely to the Trustee or to such Holder, then and in every such case, subject to
any determination in such proceeding, the Company, the Trustee and the Holders shall be restored
severally and respectively to their former positions hereunder and thereafter all rights and
remedies of the Trustee and the Holders shall continue as though no such proceeding had been
instituted.

     Section 6.10. Rights and Remedies Cumulative.

          Except as otherwise provided with respect to the replacement or payment of mutilated,
destroyed, lost or stolen Securities in Section 2.8, no right or remedy herein conferred upon or
reserved to the Trustee or to the Holders is intended to be exclusive of any other right or remedy,
and every right and remedy shall, to the extent permitted by law, be cumulative and in addition to
every other right and remedy given hereunder or now or hereafter existing at law or in equity or
otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not,
to the extent permitted by law, prevent the concurrent assertion or employment of any other
appropriate right or remedy.

     Section 6.11. Delay or Omission Not Waiver.

          No delay or omission of the Trustee or of any Holder of any Securities to exercise any right
or remedy accruing upon any Event of Default shall impair any such right or remedy or constitute a
waiver of any such Event of Default or an acquiescence therein. Every right and remedy given by
this Article or by law to the Trustee or to the Holders may be exercised from time to time, and as
often as may be deemed expedient, by the Trustee or by the Holders, as the case may be.

     Section 6.12. Control by Holders.

          The Holders of a majority in principal amount of the outstanding Securities of any Series
shall have the right to direct the time, method and place of conducting any proceeding for any
remedy available to the Trustee, or exercising any trust or power conferred on the Trustee, with
respect to the Securities of such Series, provided that

     (a) such direction shall not be in conflict with any rule of law or with this
Indenture,

     (b) the Trustee may take any other action deemed proper by the Trustee which is not
inconsistent with such direction, and

     (c) subject to the provisions of Section 6.1, the Trustee shall have the right to
decline to follow any such direction if the Trustee in good faith shall, by a Responsible

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Officer of the Trustee, determine that the proceeding so directed would involve the
Trustee in personal liability.

     Section 6.13. Waiver of Past Defaults.

          The Holders of not less than a majority in principal amount of the outstanding Securities of
any Series may on behalf of the Holders of all the Securities of such Series waive any past Default
hereunder with respect to such Series and its consequences, except a Default in the payment of the
principal of or interest on any Security of such Series (provided, however, that the Holders of a
majority in principal amount of the outstanding Securities of any Series may rescind an
acceleration and its consequences, including any related payment default that resulted from such
acceleration). Upon any such waiver, such Default shall cease to exist, and any Event of Default
arising therefrom shall be deemed to have been cured, for every purpose of this Indenture; but no
such waiver shall extend to any subsequent or other Default or impair any right consequent thereon.

     Section 6.14. Undertaking for Costs.

          All parties to this Indenture agree, and each Holder of any Security by his acceptance thereof
shall be deemed to have agreed, that any court may in its discretion require, in any suit for the
enforcement of any right or remedy under this Indenture, or in any suit against the Trustee for any
action taken, suffered or omitted by it as Trustee, the filing by any party litigant in such suit
of an undertaking to pay the costs of such suit, and that such court may in its discretion assess
reasonable costs, including reasonable attorneys’ fees, against any party litigant in such suit,
having due regard to the merits and good faith of the claims or defenses made by such party
litigant; but the provisions of this Section shall not apply to any suit instituted by the Company,
to any suit instituted by the Trustee, to any suit instituted by any Holder, or group of Holders,
holding in the aggregate more than 10% in principal amount of the outstanding Securities of any
Series, or to any suit instituted by any Holder for the enforcement of the payment of the principal
of or interest on any Security on or after the Stated Maturity or Stated Maturities expressed in
such Security (or, in the case of redemption, on the redemption date).

ARTICLE VII.

TRUSTEE

     Section 7.1. Duties of Trustee.

     (a) If an Event of Default has occurred and is continuing, the Trustee shall
exercise the rights and powers vested in it by this Indenture and use the same degree of
care and skill in their exercise as a prudent man would exercise or use under the
circumstances in the conduct of his own affairs.

     (b) Except during the continuance of an Event of Default:

     (i) The Trustee need perform only those duties that are specifically set forth
in this Indenture and no others.

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     (ii) In the absence of bad faith on its part, the Trustee may conclusively
rely, as to the truth of the statements and the correctness of the opinions
expressed therein, upon Officers’ Certificates or Opinions of Counsel furnished to
the Trustee and conforming to the requirements of this Indenture; however,
in the case of any such Officers’ Certificates or Opinions of Counsel which by any
provisions hereof are specifically required to be furnished to the Trustee, the
Trustee shall examine such Officers’ Certificates and Opinions of Counsel to
determine whether or not they conform to the requirements of this Indenture.

     (c) The Trustee may not be relieved from liability for its own negligent action, its
own negligent failure to act or its own willful misconduct, except that:

     (i) This paragraph does not limit the effect of paragraph (b) of this Section.

     (ii) The Trustee shall not be liable for any error of judgment made in good
faith by a Responsible Officer, unless it is proved that the Trustee was negligent
in ascertaining the pertinent facts.

     (iii) The Trustee shall not be liable with respect to any action taken,
suffered or omitted to be taken by it with respect to Securities of any Series in
good faith in accordance with the direction of the Holders of a majority in
principal amount of the outstanding Securities of such Series relating to the time,
method and place of conducting any proceeding for any remedy available to the
Trustee, or exercising any trust or power conferred upon the Trustee, under this
Indenture with respect to the Securities of such Series.

     (d) Every provision of this Indenture that in any way relates to the Trustee is
subject to paragraph (a), (b) and (c) of this Section.

     (e) The Trustee may refuse to perform any duty or exercise any right or power unless
it receives indemnity satisfactory to it against any loss, liability or expense.

     (f) The Trustee shall not be liable for interest on any money received by it except
as the Trustee may agree in writing with the Company. Money held in trust by the Trustee
need not be segregated from other funds except to the extent required by law.

     (g) No provision of this Indenture shall require the Trustee to risk its own funds
or otherwise incur any financial liability in the performance of any of its duties, or in
the exercise of any of its rights or powers, if it shall have reasonable grounds for
believing that repayment of such funds or adequate indemnity against such risk is not
reasonably assured to it.

     (h) The Paying Agent, the Registrar and any authenticating agent shall be entitled
to the protections, immunities and standard of care as are set forth in paragraphs (a), (b)
and (c) of this Section with respect to the Trustee.

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     Section 7.2. Rights of Trustee.

     (a) The Trustee may rely on and shall be protected in acting or refraining from
acting upon any document believed by it to be genuine and to have been signed or presented
by the proper person. The Trustee need not investigate any fact or matter stated in the
document.

     (b) Before the Trustee acts or refrains from acting, it may require an Officers’
Certificate or an Opinion of Counsel. The Trustee shall not be liable for any action it
takes or omits to take in good faith in reliance on such Officers’ Certificate or Opinion of
Counsel.

     (c) The Trustee may act through agents and shall not be responsible for the
misconduct or negligence of any agent appointed with due care. No Depositary shall be
deemed an agent of the Trustee and the Trustee shall not be responsible for any act or
omission by any Depositary.

     (d) The Trustee shall not be liable for any action it takes or omits to take in good
faith which it believes to be authorized or within its rights or powers, provided that the
Trustee’s conduct does not constitute negligence or bad faith.

     (e) The Trustee may consult with counsel and the advice of such counsel or any
Opinion of Counsel shall be full and complete authorization and protection in respect of any
action taken, suffered or omitted by it hereunder without negligence and in good faith and
in reliance thereon.

     (f) The Trustee shall be under no obligation to exercise any of the rights or powers
vested in it by this Indenture at the request or direction of any of the Holders of
Securities unless such Holders shall have offered to the Trustee reasonable security or
indemnity against the costs, expenses and liabilities which might be incurred by it in
compliance with such request or direction.

     (g) The Trustee shall not be bound to make any investigation into the facts or
matters stated in any resolution, certificate, statement, instrument, opinion, report,
notice, request, direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document, but the Trustee, in its discretion, may make such
further inquiry or investigation into such facts or matters as it may see fit.

     (h) The Trustee shall not be deemed to have notice of any Default or Event of
Default unless a Responsible Officer of the Trustee has actual knowledge thereof or unless
written notice of any event which is in fact such a default is received by the Trustee at
the Corporate Trust Office of the Trustee, and such notice references the Securities
generally or the Securities of a particular Series and this Indenture.

     Section 7.3. Individual Rights of Trustee.

          The Trustee in its individual or any other capacity may become the owner or pledgee of
Securities and may otherwise deal with the Company or an Affiliate of the Company

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with the same rights it would have if it were not Trustee. Any Agent may do the same with
like rights. The Trustee is also subject to Sections 7.10 and 7.11.

     Section 7.4. Trustee’s Disclaimer.

          The Trustee makes no representation as to the validity or adequacy of this Indenture or the
Securities, it shall not be accountable for the Company’s use of the proceeds from the Securities,
and it shall not be responsible for any statement in the Securities other than its authentication.

     Section 7.5. Notice of Defaults.

          If a Default or Event of Default occurs and is continuing with respect to the Securities of
any Series and if it is known to a Responsible Officer of the Trustee, the Trustee shall mail to
each Securityholder of the Securities of that Series notice of a Default or Event of Default within
90 days after it occurs or, if later, after a Responsible Officer of the Trustee has knowledge of
such Default or Event of Default. Except in the case of a Default or Event of Default in payment
of principal of or interest on any Security of any Series, the Trustee may withhold the notice if
and so long as its corporate trust committee or a committee of its Responsible Officers in good
faith determines that withholding the notice is in the interests of Securityholders of that Series.

     Section 7.6. Reports by Trustee to Holders.

          Within 60 days after May 15 in each year, the Trustee shall transmit by mail to all
Securityholders, as their names and addresses appear on the register kept by the Registrar, a brief
report dated as of such May 15, in accordance with, and to the extent required under, TIA § 313.

          A copy of each report at the time of its mailing to Securityholders of any Series shall be
filed with the SEC and each stock exchange on which the Securities of that Series are listed. The
Company shall promptly notify the Trustee when Securities of any Series are listed on any stock
exchange.

     Section 7.7. Compensation and Indemnity.

          The Company shall pay to the Trustee from time to time compensation for its services as the
Company and the Trustee shall from time to time agree upon in writing. The Trustee’s compensation
shall not be limited by any law on compensation of a trustee of an express trust. The Company
shall reimburse the Trustee upon request for all reasonable out of pocket expenses incurred by it.
Such expenses shall include the reasonable compensation and expenses of the Trustee’s agents and
counsel.

          The Company shall indemnify each of the Trustee and any predecessor Trustee (including the
cost of defending itself) against any loss, liability or expense, including taxes (other than taxes
based upon, measured by or determined by the income of the Trustee) incurred by it except as set
forth in the next paragraph in the performance of its duties under this Indenture as Trustee or
Agent. The Trustee shall notify the Company promptly of any claim for which it may seek indemnity.
The Company shall defend the claim and the Trustee shall

27

 

cooperate in the defense. The Trustee may have one separate counsel and the Company shall pay
the reasonable fees and expenses of such counsel. The Company need not pay for any settlement made
without its consent, which consent shall not be unreasonably withheld. This indemnification shall
apply to officers, directors, employees, shareholders and agents of the Trustee.

          The Company need not reimburse any expense or indemnify against any loss or liability incurred
by the Trustee or by any officer, director, employee, shareholder or agent of the Trustee through
negligence or bad faith.

          To secure the Company’s payment obligations in this Section, the Trustee shall have a lien
prior to the Securities of any Series on all money or property held or collected by the Trustee,
except that held in trust to pay principal of and interest on particular Securities of that Series.

          When the Trustee incurs expenses or renders services after an Event of Default specified in
Section 6.1(d) or (e) occurs, the expenses and the compensation for the services are intended to
constitute expenses of administration under any Bankruptcy Law.

          The provisions of this Section shall survive the termination of this Indenture.

     Section 7.8. Replacement of Trustee.

          A resignation or removal of the Trustee and appointment of a successor Trustee shall become
effective only upon the successor Trustee’s acceptance of appointment as provided in this Section.

          The Trustee may resign with respect to the Securities of one or more Series by so notifying
the Company at least 30 days prior to the date of the proposed resignation. The Holders of a
majority in principal amount of the Securities of any Series may remove the Trustee with respect to
that Series by so notifying the Trustee and the Company. The Company may remove the Trustee with
respect to Securities of one or more Series if:

     (a) the Trustee fails to comply with Section 7.10;

     (b) the Trustee is adjudged a bankrupt or an insolvent or an order for relief is
entered with respect to the Trustee under any Bankruptcy Law;

     (c) a Custodian or public officer takes charge of the Trustee or its property; or

     (d) the Trustee becomes incapable of acting.

          If the Trustee resigns or is removed or if a vacancy exists in the office of Trustee for any
reason, the Company shall promptly appoint a successor Trustee. Within one year after the
successor Trustee takes office, the Holders of a majority in principal amount of the then
outstanding Securities may appoint a successor Trustee to replace the successor Trustee appointed
by the Company.

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          If a successor Trustee with respect to the Securities of any one or more Series does not take
office within 60 days after the retiring Trustee resigns or is removed, the retiring Trustee, the
Company or the Holders of at least a majority in principal amount of the Securities of the
applicable Series may petition any court of competent jurisdiction for the appointment of a
successor Trustee.

          A successor Trustee shall deliver a written acceptance of its appointment to the retiring
Trustee and to the Company. Immediately after that, the retiring Trustee shall transfer all
property held by it as Trustee to the successor Trustee subject to the lien provided for in Section
7.7, the resignation or removal of the retiring Trustee shall become effective, and the successor
Trustee shall have all the rights, powers and duties of the Trustee with respect to each Series of
Securities for which it is acting as Trustee under this Indenture. A successor Trustee shall mail
a notice of its succession to each Securityholder of each such Series. Notwithstanding replacement
of the Trustee pursuant to this Section 7.8, the Company’s obligations under Section 7.7 hereof
shall continue for the benefit of the retiring Trustee with respect to expenses and liabilities
incurred by it prior to such replacement.

     Section 7.9. Successor Trustee by Merger, etc.

          If the Trustee consolidates with, merges or converts into, or transfers all or substantially
all of its corporate trust business to, another corporation, the successor corporation without any
further act shall be the successor Trustee.

     Section 7.10. Eligibility; Disqualification.

          This Indenture shall always have a Trustee who satisfies the requirements of TIA § 310(a)(1),
(2) and (5). The Trustee shall always have a combined capital and surplus of at least $25,000,000
as set forth in its most recent published annual report of condition. The Trustee shall comply
with TIA § 310(b).

     Section 7.11. Preferential Collection of Claims Against Company.

          The Trustee is subject to TIA § 311(a), excluding any creditor relationship listed in TIA §
311(b). A Trustee who has resigned or been removed shall be subject to TIA § 311(a) to the extent
indicated.

ARTICLE VIII.

SATISFACTION AND DISCHARGE; DEFEASANCE

     Section 8.1. Satisfaction and Discharge of Indenture.

          This Indenture shall upon Company Order cease to be of further effect (except as hereinafter
provided in this Section 8.1), and the Trustee, at the expense of the Company, shall execute proper
instruments acknowledging satisfaction and discharge of this Indenture, when

     (a) either

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     (i) all Securities theretofore authenticated and delivered (other than
Securities that have been destroyed, lost or stolen and that have been replaced or
paid) have been delivered to the Trustee for cancellation; or

     (ii) all such Securities not theretofore delivered to the Trustee for
cancellation

     (1) have become due and payable, or

     (2) will become due and payable at their Stated Maturity within one
year, or

     (3) have been called for redemption or are to be called for redemption
within one year under arrangements satisfactory to the Trustee for the
giving of notice of redemption by the Trustee in the name, and at the
expense, of the Company, or

     (4) are deemed paid and discharged pursuant to Section 8.3, as
applicable;

 and the Company, in the case of (1), (2) or (3) above, has irrevocably deposited or caused to be
deposited with the Trustee as trust funds in trust an amount sufficient for the purpose of paying
and discharging the entire indebtedness on such Securities not theretofore delivered to the Trustee
for cancellation, for principal and interest to the date of such deposit (in the case of Securities
which have become due and payable on or prior to the date of such deposit) or to the Stated
Maturity or redemption date, as the case may be;

     (b) the Company has paid or caused to be paid all other sums payable hereunder by
the Company; and

     (c) the Company has delivered to the Trustee an Officers’ Certificate and an Opinion
of Counsel, each stating that all conditions precedent herein provided for relating to the
satisfaction and discharge of this Indenture have been complied with.

          Notwithstanding the satisfaction and discharge of this Indenture, the obligations of the
Company to the Trustee under Section 7.7, and, if money shall have been deposited with the Trustee
pursuant to clause (a) of this Section, the provisions of Sections 2.4, 2.7, 2.8, 8.2 and 8.5
shall survive.

     Section 8.2. Application of Trust Funds; Indemnification.

     (a) Subject to the provisions of Section 8.5, all money deposited with the Trustee
pursuant to Section 8.1, all money and U.S. Government Obligations or Foreign Government
Obligations deposited with the Trustee pursuant to Section 8.3 or 8.4 and all money received
by the Trustee in respect of U.S. Government Obligations or Foreign Government Obligations
deposited with the Trustee pursuant to Section 8.3 or 8.4, shall be held in trust and
applied by it, in accordance with the provisions of the Securities and this Indenture, to
the payment, either directly or through any Paying Agent (including the

30

 

Company acting as its own Paying Agent) as the Trustee may determine, to the persons
entitled thereto, of the principal and interest for whose payment such money has been
deposited with or received by the Trustee or to make mandatory sinking fund payments or
analogous payments as contemplated by Sections 8.3 or 8.4.

     (b) The Company shall pay and shall indemnify the Trustee against any tax, fee or
other charge imposed on or assessed against U.S. Government Obligations or Foreign
Government Obligations deposited pursuant to Sections 8.3 or 8.4 or the interest and
principal received in respect of such obligations other than any payable by or on behalf of
Holders.

     (c) The Trustee shall deliver or pay to the Company from time to time upon Company
Request any U.S. Government Obligations or Foreign Government Obligations or money held by
it as provided in Sections 8.3 or 8.4 which, in the opinion of a nationally recognized firm
of independent certified public accountants expressed in a written certification thereof
delivered to the Trustee, are then in excess of the amount thereof which then would have
been required to be deposited for the purpose for which such U.S. Government Obligations or
Foreign Government Obligations or money were deposited or received. This provision shall
not authorize the sale by the Trustee of any U.S. Government Obligations or Foreign
Government Obligations held under this Indenture.

     Section 8.3. Legal Defeasance of Securities of any Series.

          Unless this Section 8.3 is otherwise specified, pursuant to Section 2.2.20, to be inapplicable
to Securities of any Series, the Company shall be deemed to have paid and discharged the entire
indebtedness on all the outstanding Securities of any Series on the 91st day after the date of the
deposit referred to in subparagraph (d) hereof, and the provisions of this Indenture, as it relates
to such outstanding Securities of such Series, shall no longer be in effect (and the Trustee, at
the expense of the Company, shall, at Company Request, execute proper instruments acknowledging the
same), except as to:

     (a) the rights of Holders of Securities of such Series to receive, from the trust
funds described in subparagraph (d) hereof, (i) payment of the principal of and each
installment of principal of and interest on the outstanding Securities of such Series on the
Stated Maturity of such principal or installment of principal or interest and (ii) the
benefit of any mandatory sinking fund payments applicable to the Securities of such Series
on the day on which such payments are due and payable in accordance with the terms of this
Indenture and the Securities of such Series;

     (b) the provisions of Sections 2.4, 2.7, 2.8, 8.2, 8.3 and 8.5; and

     (c) the rights, powers, trust and immunities of the Trustee hereunder;

provided that, the following conditions shall have been satisfied:

     (d) the Company shall have deposited or caused to be irrevocably deposited (except
as provided in Section 8.2(c)) with the Trustee as trust funds in trust for the

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purpose of making the following payments, specifically pledged as security for and
dedicated solely to the benefit of the Holders of such Securities (i) in the case of
Securities of such Series denominated in Dollars, cash in Dollars and/or U.S. Government
Obligations, or (ii) in the case of Securities of such Series denominated in a Foreign
Currency (other than a composite currency), money and/or Foreign Government Obligations,
which through the payment of interest and principal in respect thereof in accordance with
their terms, will provide (and without reinvestment and assuming no tax liability will be
imposed on such Trustee), not later than one day before the due date of any payment of
money, an amount in cash, sufficient, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification thereof delivered to the
Trustee, to pay and discharge each installment of principal of and interest, if any, on and
any mandatory sinking fund payments in respect of all the Securities of such Series on the
dates such installments of interest or principal and such sinking fund payments are due;

     (e) such deposit will not result in a breach or violation of, or constitute a
default under, this Indenture or any other agreement or instrument to which the Company is a
party or by which it is bound;

     (f) no Default or Event of Default with respect to the Securities of such Series
shall have occurred and be continuing on the date of such deposit or during the period
ending on the 91st day after such date;

     (g) the Company shall have delivered to the Trustee an Officers’ Certificate and an
Opinion of Counsel to the effect that (i) the Company has received from, or there has been
published by, the Internal Revenue Service a ruling, or (ii) since the date of execution of
this Indenture, there has been a change in the applicable Federal income tax law, in either
case to the effect that, and based thereon such Opinion of Counsel shall confirm that, the
Holders of the Securities of such Series will not recognize income, gain or loss for Federal
income tax purposes as a result of such deposit, defeasance and discharge and will be
subject to Federal income tax on the same amount and in the same manner and at the same
times as would have been the case if such deposit, defeasance and discharge had not
occurred;

     (h) the Company shall have delivered to the Trustee an Officers’ Certificate stating
that the deposit was not made by the Company with the intent of preferring the Holders of
the Securities of such Series over any other creditors of the Company or with the intent of
defeating, hindering, delaying or defrauding any other creditors of the Company; and

     (i) the Company shall have delivered to the Trustee an Officers’ Certificate and an
Opinion of Counsel, each stating that all conditions precedent provided for relating to the
defeasance contemplated by this Section have been complied with.

     Section 8.4. Covenant Defeasance.

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          Unless this Section 8.4 is otherwise specified pursuant to Section 2.2.20 to be inapplicable
to Securities of any Series, the Company may omit to comply with respect to the Securities of any
Series with any term, provision or condition set forth under Sections 4.2, 4.3, 4.4, 4.5, and 5.1
as well as any additional covenants specified in a supplemental indenture for such Series of
Securities or a Board Resolution or an Officers’ Certificate delivered pursuant to Section 2.2.20
(and the failure to comply with any such covenants shall not constitute a Default or Event of
Default with respect to such Series under Section 6.1) and the occurrence of any event specified in
a supplemental indenture for such Series of Securities or a Board Resolution or an Officers’
Certificate delivered pursuant to Section 2.2.18 and designated as an Event of Default shall not
constitute a Default or Event of Default hereunder, with respect to the Securities of such Series,
provided that the following conditions shall have been satisfied:

     (a) With reference to this Section 8.4, the Company has deposited or caused to be
irrevocably deposited (except as provided in Section 8.2(c)) with the Trustee as trust funds
in trust for the purpose of making the following payments specifically pledged as security
for, and dedicated solely to, the benefit of the Holders of such Securities (i) in the case
of Securities of such Series denominated in Dollars, cash in Dollars and/or U.S. Government
Obligations, or (ii) in the case of Securities of such Series denominated in a Foreign
Currency (other than a composite currency), money and/or Foreign Government Obligations,
which through the payment of interest and principal in respect thereof in accordance with
their terms, will provide (and without reinvestment and assuming no tax liability will be
imposed on such Trustee), not later than one day before the due date of any payment of
money, an amount in cash, sufficient, in the opinion of a nationally recognized firm of
independent certified public accountants expressed in a written certification thereof
delivered to the Trustee, to pay and discharge each installment of principal of and
interest, if any, on and any mandatory sinking fund payments in respect of the Securities of
such Series on the dates such installments of interest or principal and such sinking fund
payments are due;

     (b) Such deposit will not result in a breach or violation of, or constitute a
default under, this Indenture or any other agreement or instrument to which the Company is a
party or by which it is bound;

     (c) No Default or Event of Default with respect to the Securities of such Series
shall have occurred and be continuing on the date of such deposit;

     (d) The Company shall have delivered to the Trustee an Opinion of Counsel to the
effect that Holders of the Securities of such Series will not recognize income, gain or loss
for federal income tax purposes as a result of such deposit and covenant defeasance and will
be subject to federal income tax on the same amounts, in the same manner and at the same
times as would have been the case if such deposit and covenant defeasance had not occurred;

     (e) The Company shall have delivered to the Trustee an Officers’ Certificate stating
the deposit was not made by the Company with the intent of preferring the Holders of the
Securities of such Series over any other creditors of the Company or with

33

 

the intent of defeating, hindering, delaying or defrauding any other creditors of the
Company; and

     (f) The Company shall have delivered to the Trustee an Officers’ Certificate and an
Opinion of Counsel, each stating that all conditions precedent herein provided for relating
to the covenant defeasance contemplated by this Section have been complied with.

     Section 8.5. Repayment to Company.

          The Trustee and the Paying Agent shall pay to the Company upon request any money held by them
for the payment of principal and interest that remains unclaimed for two years. After that,
Securityholders entitled to the money must look to the Company for payment as general creditors
unless an applicable abandoned property law designates another person.

     Section 8.6. Reinstatement.

          If the Trustee or the Paying Agent is unable to apply any money deposited with respect to
Securities of any Series in accordance with Section 8.1 by reason of any legal proceeding or by
reason of any order or judgment of any court or governmental authority enjoining, restraining or
otherwise prohibiting such application, the obligations of the Company under this Indenture with
respect to the Securities of such Series and under the Securities of such Series shall be revived
and reinstated as though no deposit had occurred pursuant to Section 8.1 until such time as the
Trustee or the Paying Agent is permitted to apply all such money in accordance with Section 8.1;
provided, however, that if the Company has made any payment of principal of or
interest on or any Additional Amounts with respect to any Securities because of the reinstatement
of its obligations, the Company shall be subrogated to the rights of the Holders of such Securities
to receive such payment from the money held by the Trustee or Paying Agent.

ARTICLE IX.

AMENDMENTS AND WAIVERS

     Section 9.1. Without Consent of Holders.

          The Company and the Trustee may amend or supplement this Indenture or the Securities of one or
more Series without the consent of any Securityholder:

     (a) to cure any ambiguity, defect or inconsistency;

     (b) to comply with Article V;

     (c) to provide for uncertificated Securities in addition to or in place of
certificated Securities;

     (d) to make any change that does not adversely affect the rights of any
Securityholder;

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     (e) to provide for the issuance of and establish the form and terms and conditions
of Securities of any Series as permitted by this Indenture;

     (f) to evidence and provide for the acceptance of appointment hereunder by a
successor Trustee with respect to the Securities of one or more Series and to add to or
change any of the provisions of this Indenture as shall be necessary to provide for or
facilitate the administration of the trusts hereunder by more than one Trustee; or

     (g) to comply with requirements of the SEC in order to effect or maintain the
qualification of this Indenture under the TIA.

     Section 9.2. With Consent of Holders.

          The Company and the Trustee may enter into a supplemental indenture with the written consent
of the Holders of at least a majority in principal amount of the outstanding Securities of each
Series affected by such supplemental indenture (including consents obtained in connection with a
tender offer or exchange offer for the Securities of such Series), for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of this Indenture or
of any supplemental indenture or of modifying in any manner the rights of the Securityholders of
each such Series. Except as provided in Section 6.13, the Holders of at least a majority in
principal amount of the outstanding Securities of any Series by notice to the Trustee (including
consents obtained in connection with a tender offer or exchange offer for the Securities of such
Series) may waive compliance by the Company with any provision of this Indenture or the Securities
with respect to such Series.

          It shall not be necessary for the consent of the Holders of Securities under this Section 9.2
to approve the particular form of any proposed supplemental indenture or waiver, but it shall be
sufficient if such consent approves the substance thereof. After a supplemental indenture or
waiver under this section becomes effective, the Company shall mail to the Holders of Securities
affected thereby, a notice briefly describing the supplemental indenture or waiver. Any failure by
the Company to mail or publish such notice, or any defect therein, shall not, however, in any way
impair or affect the validity of any such supplemental indenture or waiver.

     Section 9.3. Limitations.

          Without the consent of each Securityholder affected, an amendment or waiver may not:

     (a) reduce the principal amount of Securities whose Holders must consent to an
amendment, supplement or waiver;

     (b) reduce the rate of or extend the time for payment of interest (including default
interest) on any Security;

     (c) reduce the principal or change the Stated Maturity of any Security or reduce the
amount of, or postpone the date fixed for, the payment of any sinking fund or analogous
obligation;

35

 

     (d) reduce the principal amount of Discount Securities payable upon acceleration of
the maturity thereof;

     (e) waive a Default or Event of Default in the payment of the principal of or
interest, if any, on any Security (except a rescission of acceleration of the Securities of
any Series by the Holders of at least a majority in principal amount of the outstanding
Securities of such Series and a waiver of the payment default that resulted from such
acceleration);

     (f) make the principal of or interest, if any, on any Security payable in any
currency other than that stated in the Security;

     (g) make any change in Sections 6.8, 6.13 or 9.3 (this sentence); or

     (h) waive a redemption payment with respect to any Security, provided that such
redemption is made at the Company’s option.

     Section 9.4. Compliance with Trust Indenture Act.

          Every amendment to this Indenture or the Securities of one or more Series shall be set forth
in a supplemental indenture hereto that complies with the TIA as then in effect.

     Section 9.5. Revocation and Effect of Consents.

          Until an amendment is set forth in a supplemental indenture or a waiver becomes effective, a
consent to it by a Holder of a Security is a continuing consent by the Holder and every subsequent
Holder of a Security or portion of a Security that evidences the same debt as the consenting
Holder’s Security, even if notation of the consent is not made on any Security. However, any such
Holder or subsequent Holder may revoke the consent as to his Security or portion of a Security if
the Trustee receives the notice of revocation before the date of the supplemental indenture or the
date the waiver becomes effective.

          Any amendment or waiver once effective shall bind every Securityholder of each Series affected
by such amendment or waiver unless it is of the type described in any of clauses (a) through (h) of
Section 9.3. In that case, the amendment or waiver shall bind each Holder of a Security who has
consented to it and every subsequent Holder of a Security or portion of a Security that evidences
the same debt as the consenting Holder’s Security.

     Section 9.6. Notation on or Exchange of Securities.

          The Trustee may place an appropriate notation about an amendment or waiver on any Security of
any Series thereafter authenticated. The Company in exchange for Securities of that Series may
issue and the Trustee shall authenticate upon request new Securities of that Series that reflect
the amendment or waiver.

     Section 9.7. Trustee Protected.

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          In executing, or accepting the additional trusts created by, any supplemental indenture
permitted by this Article or the modifications thereby of the trusts created by this Indenture, the
Trustee shall be entitled to receive, and (subject to Section 7.1) shall be fully protected in
relying upon, an Opinion of Counsel stating that the execution of such supplemental indenture is
authorized or permitted by this Indenture. The Trustee shall sign all supplemental indentures,
except that the Trustee need not sign any supplemental indenture that adversely affects its rights.

ARTICLE X.

MISCELLANEOUS

     Section 10.1. Trust Indenture Act Controls.

          If any provision of this Indenture limits, qualifies, or conflicts with another provision
which is required or deemed to be included in this Indenture by the TIA, such required or deemed
provision shall control.

     Section 10.2. Notices.

          Any notice or communication by the Company or the Trustee to the other, or by a Holder to the
Company or the Trustee, is duly given if in writing and delivered in person or mailed by
first-class mail:

if to the Company:

BMC Software, Inc.

2101 Citywest Boulevard, Suite 2015A

Houston, Texas 77042

Attention: General Counsel

Telephone: (713) 918-8800

if to the Trustee:

Wells Fargo Bank, N.A.

1445 Ross Avenue – 2nd Floor

Dallas, Texas 75202-2812

Attention: Corporate Debt Relationship Manager

Telephone: 214-740-1573

          The Company or the Trustee by notice to the other may designate additional or different
addresses for subsequent notices or communications.

          Any notice or communication to a Securityholder shall be mailed by first-class mail to his
address shown on the register kept by the Registrar. Failure to mail a notice or communication to
a Securityholder of any Series or any defect in it shall not affect its sufficiency with respect to
other Securityholders of that or any other Series.

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          If a notice or communication is mailed or published in the manner provided above, within the
time prescribed, it is duly given, whether or not the Securityholder receives it.

          If the Company mails a notice or communication to Securityholders, it shall mail a copy to the
Trustee and each Agent at the same time.

     Section 10.3. Communication by Holders with Other Holders.

          Securityholders of any Series may communicate pursuant to TIA § 312(b) with other
Securityholders of that Series or any other Series with respect to their rights under this
Indenture or the Securities of that Series or all Series. The Company, the Trustee, the Registrar
and anyone else shall have the protection of TIA § 312(c).

     Section 10.4. Certificate and Opinion as to Conditions Precedent.

          Upon any request or application by the Company to the Trustee to take any action under this
Indenture, the Company shall furnish to the Trustee:

     (a) an Officers’ Certificate stating that, in the opinion of the signers, all
conditions precedent, if any, provided for in this Indenture relating to the proposed action
have been complied with; and

     (b) an Opinion of Counsel stating that, in the opinion of such counsel, all such
conditions precedent have been complied with.

     Section 10.5. Statements Required in Certificate or Opinion.

          Each certificate or opinion with respect to compliance with a condition or covenant provided
for in this Indenture (other than a certificate provided pursuant to TIA § 314(a)(4)) shall comply
with the provisions of TIA § 314(e) and shall include:

     (a) a statement that the person making such certificate or opinion has read such
covenant or condition;

     (b) a brief statement as to the nature and scope of the examination or investigation
upon which the statements or opinions contained in such certificate or opinion are based;

     (c) a statement that, in the opinion of such person, he has made such examination or
investigation as is necessary to enable him to express an informed opinion as to whether or
not such covenant or condition has been complied with; and

     (d) a statement as to whether or not, in the opinion of such person, such condition
or covenant has been complied with.

     Section 10.6. Rules by Trustee and Agents.

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          The Trustee may make reasonable rules for action by or a meeting of Securityholders of one or
more Series. Any Agent may make reasonable rules and set reasonable requirements for its
functions.

     Section 10.7. Legal Holidays.

          Unless otherwise provided by Board Resolution, Officers’ Certificate or supplemental indenture
hereto for a particular Series, a “Legal Holiday” is any day that is not a Business Day. If a
payment date is a Legal Holiday at a place of payment, payment may be made at that place on the
next succeeding day that is not a Legal Holiday, and no interest shall accrue for the intervening
period.

     Section 10.8. No Recourse Against Others.

          A director, officer, employee or stockholder, as such, of the Company shall not have any
liability for any obligations of the Company under the Securities or the Indenture or for any claim
based on, in respect of or by reason of such obligations or their creation. Each Securityholder by
accepting a Security waives and releases all such liability. The waiver and release are part of
the consideration for the issue of the Securities.

     Section 10.9. Counterparts.

          This Indenture may be executed in any number of counterparts and by the parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an original and all of
which taken together shall constitute one and the same agreement.

     Section 10.10. Governing Laws.

          THIS INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK
APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED IN SUCH STATE, WITHOUT REGARD TO THE CONFLICT OF
LAWS PROVISIONS THEREOF.

     Section 10.11. No Adverse Interpretation of Other Agreements.

          This Indenture may not be used to interpret another indenture, loan or debt agreement of the
Company or a Subsidiary of the Company. Any such indenture, loan or debt agreement may not be used
to interpret this Indenture.

     Section 10.12. Successors.

          All agreements of the Company in this Indenture and the Securities shall bind its successor.
All agreements of the Trustee in this Indenture shall bind its successor.

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     Section 10.13. Severability.

          In case any provision in this Indenture or in the Securities shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby.

     Section 10.14. Table of Contents, Headings, Etc.

          The Table of Contents, Cross Reference Table, and headings of the Articles and Sections of
this Indenture have been inserted for convenience of reference only, are not to be considered a
part hereof, and shall in no way modify or restrict any of the terms or provisions hereof.

     Section 10.15. Securities in a Foreign Currency or in ECU.

          Unless otherwise specified in a Board Resolution, a supplemental indenture hereto or an
Officers’ Certificate delivered pursuant to Section 2.2 of this Indenture with respect to a
particular Series of Securities, whenever for purposes of this Indenture any action may be taken by
the Holders of a specified percentage in aggregate principal amount of Securities of all Series or
all Series affected by a particular action at the time outstanding and, at such time, there are
outstanding Securities of any Series which are denominated in a coin or currency other than Dollars
(including ECUs), then the principal amount of Securities of such Series which shall be deemed to
be outstanding for the purpose of taking such action shall be that amount of Dollars that could be
obtained for such amount at the Market Exchange Rate at such time. For purposes of this Section
10.15, “Market Exchange Rate” shall mean the noon Dollar buying rate in New York City for cable
transfers of that currency as published by the Federal Reserve Bank of New York; provided,
however, in the case of ECUs, Market Exchange Rate shall mean the rate of exchange
determined by the Commission of the European Union (or any successor thereto) as published in the
Official Journal of the European Union (such publication or any successor publication, the
“Journal”). If such Market Exchange Rate is not available for any reason with respect to such
currency, the Trustee shall use, in its sole discretion and without liability on its part, such
quotation of the Federal Reserve Bank of New York or, in the case of ECUs, the rate of exchange as
published in the Journal, as of the most recent available date, or quotations or, in the case of
ECUs, rates of exchange from one or more major banks in The City of New York or in the country of
issue of the currency in question or, in the case of ECUs, in Luxembourg or such other quotations
or, in the case of ECUs, rates of exchange as the Trustee, upon consultation with the Company,
shall deem appropriate. The provisions of this paragraph shall apply in determining the equivalent
principal amount in respect of Securities of a Series denominated in currency other than Dollars in
connection with any action taken by Holders of Securities pursuant to the terms of this Indenture.

          All decisions and determinations of the Trustee regarding the Market Exchange Rate or any
alternative determination provided for in the preceding paragraph shall be in its sole discretion
and shall, in the absence of manifest error, to the extent permitted by law, be conclusive for all
purposes and irrevocably binding upon the Company and all Holders.

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     Section 10.16. Judgment Currency.

          The Company agrees, to the fullest extent that it may effectively do so under applicable law,
that (a) if for the purpose of obtaining judgment in any court it is necessary to convert the sum
due in respect of the principal of or interest or other amount on the Securities of any Series (the
“Required Currency”) into a currency in which a judgment will be rendered (the “Judgment
Currency”), the rate of exchange used shall be the rate at which in accordance with normal banking
procedures the Trustee could purchase in The City of New York the Required Currency with the
Judgment Currency on the day on which final unappealable judgment is entered, unless such day is
not a New York Banking Day, then the rate of exchange used shall be the rate at which in accordance
with normal banking procedures the Trustee could purchase in The City of New York the Required
Currency with the Judgment Currency on the New York Banking Day preceding the day on which final
unappealable judgment is entered and (b) its obligations under this Indenture to make payments in
the Required Currency (i) shall not be discharged or satisfied by any tender, any recovery pursuant
to any judgment (whether or not entered in accordance with subsection (a)), in any currency other
than the Required Currency, except to the extent that such tender or recovery shall result in the
actual receipt, by the payee, of the full amount of the Required Currency expressed to be payable
in respect of such payments, (ii) shall be enforceable as an alternative or additional cause of
action for the purpose of recovering in the Required Currency the amount, if any, by which such
actual receipt shall fall short of the full amount of the Required Currency so expressed to be
payable, and (iii) shall not be affected by judgment being obtained for any other sum due under
this Indenture. For purposes of the foregoing, “New York Banking Day” means any day except a
Saturday, Sunday or a legal holiday in The City of New York on which banking institutions are
authorized or required by law, regulation or executive order to close.

ARTICLE XI.

SINKING FUNDS

     Section 11.1. Applicability of Article.

          The provisions of this Article shall be applicable to any sinking fund for the retirement of
the Securities of a Series, except as otherwise permitted or required by any form of Security of
such Series issued pursuant to this Indenture.

          The minimum amount of any sinking fund payment provided for by the terms of the Securities of
any Series is herein referred to as a “mandatory sinking fund payment” and any other amount
provided for by the terms of Securities of such Series is herein referred to as an “optional
sinking fund payment.” If provided for by the terms of Securities of any Series, the cash amount
of any sinking fund payment may be subject to reduction as provided in Section 11.2. Each sinking
fund payment shall be applied to the redemption of Securities of any Series as provided for by the
terms of the Securities of such Series.

     Section 11.2. Satisfaction of Sinking Fund Payments with Securities.

          The Company may, in satisfaction of all or any part of any sinking fund payment with respect
to the Securities of any Series to be made pursuant to the terms of such Securities

41

 

(1) deliver outstanding Securities of such Series to which such sinking fund payment is
applicable (other than any of such Securities previously called for mandatory sinking fund
redemption) and (2) apply as credit Securities of such Series to which such sinking fund payment is
applicable and which have been repurchased by the Company or redeemed either at the election of the
Company pursuant to the terms of such Series of Securities (except pursuant to any mandatory
sinking fund) or through the application of permitted optional sinking fund payments or other
optional redemptions pursuant to the terms of such Securities, provided that such Securities have
not been previously so credited. Such Securities shall be received by the Trustee, together with
an Officers’ Certificate with respect thereto, not later than 15 days prior to the date on which
the Trustee begins the process of selecting Securities for redemption, and shall be credited for
such purpose by the Trustee at the price specified in such Securities for redemption through
operation of the sinking fund and the amount of such sinking fund payment shall be reduced
accordingly. If as a result of the delivery or credit of Securities in lieu of cash payments
pursuant to this Section 11.2, the principal amount of Securities of such Series to be redeemed in
order to exhaust the aforesaid cash payment shall be less than $100,000, the Trustee need not call
Securities of such Series for redemption, except upon receipt of a Company Order that such action
be taken, and such cash payment shall be held by the Trustee or a Paying Agent and applied to the
next succeeding sinking fund payment, provided, however, that the Trustee or such
Paying Agent shall from time to time upon receipt of a Company Order pay over and deliver to the
Company any cash payment so being held by the Trustee or such Paying Agent upon delivery by the
Company to the Trustee of Securities of that Series purchased by the Company having an unpaid
principal amount equal to the cash payment required to be released to the Company.

     Section 11.3. Redemption of Securities for Sinking Fund.

          Not less than 45 days (unless otherwise indicated in the Board Resolution, supplemental
indenture hereto or Officers’ Certificate in respect of a particular Series of Securities) prior to
each sinking fund payment date for any Series of Securities, the Company will deliver to the
Trustee an Officers’ Certificate specifying the amount of the next ensuing mandatory sinking fund
payment for that Series pursuant to the terms of that Series, the portion thereof, if any, which is
to be satisfied by payment of cash and the portion thereof, if any, which is to be satisfied by
delivering and crediting of Securities of that Series pursuant to Section 11.2, and the optional
amount, if any, to be added in cash to the next ensuing mandatory sinking fund payment, and the
Company shall thereupon be obligated to pay the amount therein specified. Not less than 30 days
(unless otherwise indicated in the Board Resolution, Officers’ Certificate or supplemental
indenture in respect of a particular Series of Securities) before each such sinking fund payment
date the Trustee shall select the Securities to be redeemed upon such sinking fund payment date in
the manner specified in Section 3.2 and cause notice of the redemption thereof to be given in the
name of and at the expense of the Company in the manner provided in Section 3.3. Such notice
having been duly given, the redemption of such Securities shall be made upon the terms and in the
manner stated in Sections 3.4, 3.5 and 3.6.

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          IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly executed as of
the day and year first above written.

	 	 	 	 	 
	 	BMC Software, Inc.

 	 
	 	By:  	/s/ Christopher C. Chaffin
 	 
	 	 	Name:  	Christopher C. Chaffin 	 
	 	 	Its:  	Vice President, Deputy General

Counsel and Assistant Secretary 	 
	 
	 	Wells Fargo Bank, N.A.

 	 
	 	By:  	/s/ Patrick Giordano
 	 
	 	 	Name:  	Patrick Giordano 	 
	 	 	Its: Vice President

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