Document:

Exhibit 10.3

 

SEAGATE TECHNOLOGY PUBLIC LIMITED COMPANY

 

2004 SHARE COMPENSATION PLAN

 

Adopted
by Board on August 5, 2004

 

Approved
by Stockholders on October 28, 2004

 

Last
Amended and Restated on July 3, 2010

 

Termination
Date: October 28, 2014

 

I. PURPOSES.

 

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

 

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

 

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

 

II. DEFINITIONS.

 

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

 

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

 

2004 Plan
(June 2010)

 

 

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

 

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

 

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

 

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

 

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

 

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

 

(v)           A dissolution
or liquidation of the Company.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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2.20         “Non-Employee
Director” means a Director who either (i) is not a current Employee or
Officer of the Company or its parent or a subsidiary, does not receive
compensation (directly or indirectly) from the Company or its parent or a
subsidiary for services rendered as a consultant or in any capacity other than
as a Director (except for an amount as to which disclosure would not be
required under Item 404(a) of Regulation S-K promulgated pursuant to the
Securities Act (“Regulation S-K”)), does not possess an interest in any other
transaction as to which disclosure would be required under Item 404(a) of
Regulation S-K and is not engaged in a business relationship as to which
disclosure would be required under Item 404(b) of Regulation S-K; or (ii) is
otherwise considered a “non-employee director” for purposes of Rule 16b-3.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

2.32         “Plan” means
this 2004 Share Compensation Plan of Seagate Technology public limited company.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

2.40         “Share Award”
means any Option award, Restricted Share Bonus award, Restricted Share Purchase
Right award, Share Appreciation Right award, Phantom Share Unit award,
Restricted Share Unit award, Performance Share Bonus award, Performance Share
Unit award, or other share-based award. 
These Awards may include, but are not limited to those listed in Section 1.2.

 

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

 

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

 

III. ADMINISTRATION.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

3.3           Delegation to
Committee.

 

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

 

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

 

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

 

IV. SHARES SUBJECT TO THE PLAN.

 

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

 

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remain
unaffected.  In addition, the maximum
aggregate number of Shares that may be issued pursuant to Full-Value Share
Awards shall not exceed ten million (10,000,000) Shares (“Full-Value Share
Award Share Reserve”).

 

4.2           Reversion of
Shares to the Share Reserve.  If any Share Award shall for any reason (i) expire,
be cancelled or otherwise terminate, in whole or in part, without having been
exercised or redeemed in full, (ii) be reacquired by the Company prior to
vesting, or (iii) be repurchased at cost by the Company prior to vesting,
the Shares not acquired under such Share Award shall revert to and again become
available for issuance under the Plan, and if subject to a Full-Value Share
Award, shall also reduce the number of Shares issued against the Full-Value
Share Award Share Reserve.  To the extent
that a Share Award granted under the Plan is redeemed by payment in cash rather
than Shares according to its terms, the Shares subject to the redeemed portion
of the Share Award shall revert to and again become available for issuance
under the Plan.

 

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

 

V. ELIGIBILITY.

 

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

 

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

 

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

 

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

 

5.5           Consultants.

 

(i)            A Consultant
shall not be eligible for the grant of a Share Award if, at the time of grant,
a Form S-8 Registration Statement under the Securities Act (“Form S-8”)
is not available to register either the offer or the sale of the Company’s
securities to such Consultant because of the 

 

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

 

(ii)           Form S-8
generally is available to consultants and advisors only if (A) they are
natural persons; (B) they provide bona fide services to the issuer, its
parents, its majority owned subsidiaries: and (C) the services are not in
connection with the offer or sale of securities in a capital-raising
transaction, and do not directly or indirectly promote or maintain a market for
the issuer’s securities.

 

VI. OPTION PROVISIONS.

 

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

 

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

 

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

 

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

 

6.4           Consideration.  The purchase price of Ordinary Shares
acquired pursuant to an Option shall be paid, to the extent permitted by
applicable statutes and regulations, either (i) in cash or by check at the
time the Option is exercised or (ii) at the discretion of the Board at the
time of the grant of the Option (or subsequently in the case of a Nonstatutory
Share Option): (1) by delivery to the Company of other Shares, (2) according
to a deferred payment or other similar arrangement with the

 

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Optionholder, including use of a promissory note, (3) pursuant to
a “same day sale” program, or (4) by some combination of the
foregoing.  Unless otherwise specifically
provided in the Option Agreement, the purchase price of Ordinary Shares
acquired pursuant to an Option that is paid by delivery to the Company of other
Shares acquired, directly or indirectly from the Company, shall be paid only by
Shares that have been held for more than six (6) months (or such longer or
shorter period of time required to avoid a charge to earnings for financial
accounting purposes).

 

In the case of
any deferred payment arrangement, interest shall be compounded at least
annually and shall be charged at the market rate of interest and contain such
other terms and conditions necessary to avoid a charge to earnings for
financial accounting purposes as a result of the use of such deferred payment
arrangement.

 

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

 

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

 

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

 

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

 

6.9           Extension of Termination Date.  An Optionholder’s Option Agreement may also
provide that if the exercise of the Option following the termination of the
Optionholder’s Continuous Service (other than upon the Optionholder’s death or
Disability) would be prohibited at any time

 

10

 

solely because the issuance of Shares would violate the registration
requirements under the Securities Act or other applicable securities law, then
the Option shall terminate on the earlier of (i) the expiration of the
term of the Option set forth in the Option Agreement or (ii) the
expiration of a period of three (3) months after the termination of the
Optionholder’s Continuous Service during which the exercise of the Option would
not be in violation of such registration requirements or other applicable
securities law.

 

6.10         Disability of Optionholder.  In the event that an Optionholder’s
Continuous Service terminates as a result of the Optionholder’s Disability, the
Optionholder may exercise his or her Option (to the extent that the
Optionholder was entitled to exercise such Option as of the date of
termination), but only within such period of time ending on the earlier of (i) the
date twelve (12) months following such termination (or such longer or shorter
period specified in the Option Agreement) or (ii) the expiration of the
term of the Option as set forth in the Option Agreement.  If after termination, the Optionholder does
not exercise his or her Option within the time specified herein, the Option
shall terminate.

 

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

 

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

 

VII. NON-DISCRETIONARY SHARE AWARDS FOR
ELIGIBLE DIRECTORS.

 

In addition to
any other Share Awards that Eligible Directors may be granted on a
discretionary basis under the Plan, each Eligible Director of the Company shall
be automatically granted without the necessity of action by the Board, the
following Share Award grants:

 

7.1           Initial Share Award Grant.

 

(i)            Form of Initial Share Award.  On the date that a Director commences service
on the Board and satisfies the definition of an Eligible Director, an initial
grant of Nonstatutory Share Options and/or Full-Value Share Awards shall
automatically be made to that Eligible Director

 

11

 

(collectively, the “Initial Grant”). 
The existing independent members of the Board shall determine which
portion of each Initial Grant will be granted in the form of a Nonstatutory
Share Option, if any, and which portion of each Initial Grant will be granted
in the form of a Full-Value Share Award, if any.

 

(ii)           Number of Shares Subject to Initial Share
Award Grant.  Subject to the
provisions of Section 14 of the Plan, the number of Shares covered by the
Initial Grant shall be determined by the existing independent members of the
Board, and shall in no event exceed one hundred thousand (100,000) Shares (“Initial
Grant Limit”); provided that (a) the number of Shares subject to that
portion, if any, of the Initial Grant awarded in the form of a Nonstatutory
Share Option shall be counted against the Initial Grant Limit on a one-for-one
basis and (b) the number of Shares subject to that portion, if any, of the
Initial Grant awarded in the form of a Full-Value Share Award shall be counted
against the Initial Grant Limit as three Shares for every one Share subject to
such Full-Value Share Award.

 

(iii)          Other Terms.  The exercise price of any Nonstatutory Share
Options granted as part of an Initial Grant shall be one hundred percent (100%)
of the Fair Market Value of the Shares subject to the option on the date the
option is granted.  The maximum term of
any Nonstatutory Share Options granted as part of an Initial Grant shall be
seven (7) years.  Nonstatutory Share
Options and/or Full-Value Share Awards granted as part of an Initial Grant
shall generally vest and become exercisable over a period of four (4) years
in equal annual installments provided that the Director remains in Continuous
Service during that period.  In all other
respects, Share Awards granted pursuant to an Initial Grant shall contain in
substance the same terms and conditions either as set forth in Section 6
with respect to Options, or as set forth in Section 8 with respect to
Full-Value Share Awards, as applicable. 
If at the time a Director commences service on the Board, the Director
does not satisfy the definition of an Eligible Director, such Director shall
not be entitled to an Initial Grant at any time, even if such Director
subsequently becomes an Eligible Director.

 

7.2           Annual Share Award Grant.

 

(i)            Form of Annual Share Award.  An annual grant of Nonstatutory Share Options
and/or Full-Value Share Awards (collectively, the “Annual Grant”) shall
automatically be made to each Director who (1) is re-elected to the Board,
(2) is an Eligible Director on the relevant grant date, and (3) has
served as a Director for a period of at least six (6) months.  The existing independent members of the Board
shall determine which portion of each Annual Grant will be granted in the form
of a Nonstatutory Share Option, if any, and which portion of each Annual Grant
will be granted in the form of a Full-Value Share Award, if any.

 

(ii)           Number of Shares Subject to Annual Share
Award Grant.  Subject to the
provisions of Section 14 of the Plan, the number of Shares covered by the Annual
Grant shall be determined by the existing independent members of the Board, and
shall in no event exceed twenty five thousand (25,000) Shares (“Annual Grant
Limit”); provided that (a) the number of Shares subject to that portion,
if any, of the Annual Grant awarded in the form of a Nonstatutory Share Option
shall be counted against the Annual Grant Limit on a one-for-one basis and (b) the
number of Shares subject to that portion, if any, of the Annual Grant awarded
in the form of a Full-Value Share

 

12

 

Award shall be counted against the Annual Grant Limit as three Shares
for every one Share subject to such Full-Value Share Award.

 

(iii)          Other Terms.  The exercise price of any Nonstatutory Share
Options granted as part of an Annual Grant shall be one hundred percent (100%)
of the Fair Market Value of the Shares subject to the option on the date the
option is granted.  The maximum term of
any Nonstatutory Share Options granted as part of an Annual Grant shall be
seven (7) years.  Nonstatutory Share
Options and/or Full-Value Share Awards granted as part of an Annual Grant shall
generally vest and become exercisable over a period of four (4) years in
equal annual installments provided that the Director remains in Continuous
Service during that period.  In all other
respects, Share Awards granted pursuant to an Annual Grant shall contain in
substance the same terms and conditions either as set forth in Section 6
with respect to Options, or as set forth in Section 8 with respect to
Full-Value Share Awards, as applicable. 
If at the time a Director commences service on the Board, the Director
does not satisfy the definition of an Eligible Director, such Director shall
not be entitled to an Annual Grant at any time, even if such Director
subsequently becomes an Eligible Director.

 

VIII. PROVISIONS OF SHARE AWARDS OTHER THAN
OPTIONS.

 

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

 

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

 

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

 

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

 

13

 

as Ordinary Shares awarded under the Restricted Share Bonus agreement
remain subject to the terms of the Restricted Share Bonus agreement.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

14

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

15

 

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

 

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

 

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

 

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

 

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

 

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

 

(ii)           Termination of Participant’s Continuous
Service.  In the event a Participant’s
Continuous Service terminates, the Company shall reacquire any or all of the
Shares held by the

 

16

 

Participant that have not vested as of the date of termination under
the terms of the Restricted Share Unit agreement.

 

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

 

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

 

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

 

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

 

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

 

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

 

17

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

18

 

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

 

IX. COVENANTS OF THE COMPANY.

 

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

 

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

 

X. QUALIFYING PERFORMANCE-BASED COMPENSATION

 

10.1         General.  The Committee may establish performance criteria
and the level of achievement versus such criteria that shall determine the
number of Shares to be granted, retained, vested, issued or issuable under or
in settlement of or the amount payable pursuant to a Share Award (including a,
Restricted Share Bonus, Restricted Share Purchase Right, Restricted Share Unit,
Performance Share Bonus or Performance Share Unit award), which criteria may be
based on Qualifying Performance Criteria or other standards of financial
performance and/or personal performance evaluations.  In addition, the Committee may specify that a
Share Award or a portion of a Share Award is intended to satisfy the
requirements for “performance-based compensation” under Section 162(m) of
the Code, provided that the performance criteria for such Award or portion of a
Share Award that is intended by the Committee to satisfy the requirements for “performance-based
compensation” under Section 162(m) of the Code shall be a measure
based on one or more Qualifying Performance Criteria selected by the Committee
and specified at the time the Award is granted, or within the time prescribed
by Section 162(m) and shall otherwise be in compliance with Section 162(m).  The Committee shall certify the extent to
which any Qualifying Performance Criteria has been satisfied, and the amount
payable as a result thereof, prior to payment, settlement or vesting of any
Award that is intended to satisfy the requirements for “performance-based
compensation” under Section 162(m) of the Code.  Notwithstanding satisfaction of any
performance goals, the number of Shares issued under or the amount paid under
an award may, to the extent specified in the Share Award Agreement, be reduced,
but not increased, by the Committee on the basis of such further considerations
as the Committee in its sole discretion shall determine.

 

19

 

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

 

XI. USE OF PROCEEDS FROM SHARES.

 

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

 

XII. CANCELLATION AND RE-GRANT OF OPTIONS.

 

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

 

12.2         Shares subject to an Option canceled under
this Section 12 shall continue to be counted against the maximum award of
Options permitted to be granted pursuant to Section 5.3 of the Plan.  The repricing of an Option under this Section 12,
resulting in a reduction of the exercise price, shall be deemed to be a
cancellation of the original Option and the grant of a substitute Option; in
the event of such repricing, both the original and the substituted Options
shall be counted against the maximum awards of Options permitted to be granted
pursuant to Section 5.3 of the Plan.

 

20

 

The provisions of this Section 12.2 shall be applicable only to
the extent required by Section 162(m) of the Code.

 

XIII. MISCELLANEOUS.

 

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

 

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

 

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

 

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

 

13.5         Investment Assurances.  The Company may require a Participant, as a
condition of exercising or redeeming a Share Award or acquiring Shares under
any Share Award, (i) to give written assurances satisfactory to the
Company as to the Participant’s knowledge and experience in financial and
business matters and/or to employ a purchaser representative reasonably
satisfactory to the Company who is knowledgeable and experienced in financial
and business matters and that he or she is capable of evaluating, alone or together
with the purchaser representative, the merits and risks of acquiring the
Shares; (ii) to give written assurances satisfactory to the Company
stating that the Participant is acquiring the Shares subject to the Share Award
for the Participant’s own account and not with any present intention of selling
or otherwise distributing the Shares; and (iii) to give such other written
assurances as the Company may determine are reasonable in order to comply with
applicable law.  The foregoing
requirements, and any assurances given pursuant to such

 

21

 

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

 

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

 

XIV. ADJUSTMENTS UPON CHANGES IN SHARES.

 

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

 

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

 

22

 

14.2         Adjustments Upon a Change of Control.

 

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

 

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

 

XV. AMENDMENT OF THE PLAN AND SHARE AWARDS.

 

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

 

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

 

15.3         Contemplated Amendments.  It is expressly contemplated that the Board
may amend the Plan in any respect the Board deems necessary or advisable to
provide eligible Employees with the maximum benefits provided or to be provided
under the provisions of the Code and the regulations promulgated thereunder
relating to Incentive Stock Options and/or to bring the Plan and/or Incentive
Stock Options granted under it into compliance therewith.

 

23

 

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

 

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

 

XVI. TERMINATION OR SUSPENSION OF THE PLAN.

 

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

 

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

 

XVII. EFFECTIVE DATE OF PLAN.

 

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

 

XVIII. CHOICE OF LAW.

 

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

 

24Exhibit 10.4

 

SEAGATE TECHNOLOGY PUBLIC LIMITED COMPANY

2001 SHARE OPTION PLAN

 

AMENDED AND RESTATED: December 5, 2002

APPROVED BY SHAREHOLDERS: December 3, 2002

LAST AMENDED AND RESTATED: July 3, 2010

TERMINATION DATE: February 1, 2011

 

1.                                       PURPOSES.

 

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

 

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

 

(c)           General Purpose.  The Company, by means of the Plan, which is
an amended and restated version of the Company’s 2001 Share Option Plan (“Predecessor
Plan”), seeks to provide incentives for the group of persons eligible to
receive Options to exert maximum efforts for the success of the Company and its
Affiliates.  Options granted under the
Predecessor Plan shall continue to be governed by the terms of the Predecessor
Plan in effect on the date of grant of such award.

 

2.                                       DEFINITIONS.

 

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

 

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

 

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

 

(d)           “Committee” means a committee of one or more
members of the Board (or other individuals who are not members of the Board to
the extent allowed by law) appointed by the Board in accordance with subsection
3(c).

 

 

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

 

(f)            “Consultant” means any person, including an
advisor, (i) engaged by the Company or an Affiliate to render consulting
or advisory services and who is compensated for such services or (ii) who
is a member of the Board of Directors of an Affiliate.  However, the term “Consultant” shall not
include either Directors who are not compensated by the Company for their
services as Directors or Directors who are merely paid a director’s fee by the
Company for their services as Directors.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(i)            If the Shares are listed on any established
stock exchange or traded on the Nasdaq Global Select Market or the Nasdaq
Capital Market, the Fair Market Value of a Share shall be the arithmetic mean
of the high and the low selling prices of the Shares as reported on such date
on the Composite Tape of the principal national securities exchange on which
the Shares are listed or admitted to trading, or if no Composite Tape exists
for such national securities exchange on such date, then on the principal
national 

 

2

 

securities exchange on which such the Shares
are listed or admitted to trading, or, if the Shares are not listed or admitted
on a national securities exchange, the arithmetic mean of the closing bid price
and per share closing ask price on such date as quoted on the National
Association of Securities Dealers Automated Quotation System (or such market in
which such prices are regularly quoted), or if no sale of Shares shall have
been reported on such Composite Tape or such national securities exchange on
such date or quoted on the National Association of Securities Dealers Automated
Quotation System on such date, then the immediately preceding date on which
sales of the Shares have been so reported or quoted shall be used.

 

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

 

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

 

(o)           “Non-Employee Director” means a Director who
either (i) is not a current Employee or Officer of the Company or its
parent or a subsidiary, does not receive compensation (directly or indirectly)
from the Company or its parent or a subsidiary for services rendered as a
consultant or in any capacity other than as a Director (except for an amount as
to which disclosure would not be required under Item 404(a) of Regulation
S-K promulgated pursuant to the Securities Act (“Regulation S-K”)), does not
possess an interest in any other transaction as to which disclosure would be
required under Item 404(a) of Regulation S-K and is not engaged in a
business relationship as to which disclosure would be required under Item 404(b) of
Regulation S-K; or (ii) is otherwise considered a “non-employee director”
for purposes of Rule 16b-3.

 

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

 

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

 

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

 

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

 

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

 

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

 

(v)           “Outside Director” means a Director who
either (i) is not a current employee of the Company or an “affiliated
corporation” (within the meaning of Treasury Regulations 

 

3

 

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

 

(w)          “Plan” means this Seagate Technology public limited
company Amended and Restated 2001 Share Option Plan.

 

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

 

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

 

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

 

3.                                       ADMINISTRATION.

 

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

 

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

 

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

 

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

 

(iii)          To amend the Plan or an Option as provided in
Section 13.

 

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

 

(v)           To adopt sub-plans and/or special provisions
applicable to Options regulated by the laws of a jurisdiction other than and
outside of the United States. Such 

 

4

 

sub-plans and/or special provisions may take
precedence over other provisions of this Plan, with the exception of Section 4,
but unless otherwise superseded by the terms of such sub-plans and/or special
provisions, the provisions of this Plan shall govern.

 

(c)           Delegation to Committee.

 

(i)            General.  The Board may delegate administration of the
Plan to a Committee or Committees of one (1) or more individuals, and the
term “Committee” shall apply to any person or persons to whom such authority
has been delegated.  If administration is
delegated to a Committee, the Committee shall have, in connection with the
administration of the Plan, the powers theretofore possessed by the Board,
including the power to delegate to a subcommittee any of the administrative
powers the Committee is authorized to exercise (and references in this Plan to
the Board shall thereafter be to the Committee or subcommittee), subject,
however, to such resolutions, not inconsistent with the provisions of the Plan,
as may be adopted from time to time by the Board.  The Board may abolish the Committee at any
time and revest in the Board the administration of the Plan.

 

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

 

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

 

4.                                       SHARES SUBJECT
TO THE PLAN.

 

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

 

5

 

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

 

(b)           Reversion of Shares to the Share Reserve.  If any Option (including a Share option
granted under the Predecessor Plan) shall for any reason (i) expire or
otherwise terminate, in whole or in part, without having been exercised or
redeemed in full, (ii) be reacquired by the Company prior to vesting, or (iii) be
repurchased by the Company prior to vesting, the Shares not acquired under such
Option shall revert to and again become available for issuance under the Plan.

 

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

 

5.                                       ELIGIBILITY.

 

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

 

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

 

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

 

(d)           Consultants.

 

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

 

(ii)           Form S-8 generally is available to
consultants and advisors only if (i) they are natural persons; (ii) they
provide bona fide services to the issuer, its parents, its majority owned
subsidiaries; and (iii) the services are not in connection with the offer
or sale of securities in a capital-raising transaction, and do not directly or
indirectly promote or maintain a market for the issuer’s securities.

 

6

 

6.                                       OPTION
PROVISIONS.

 

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

 

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

 

(b)           Exercise Price of an Incentive Stock
Option.  Subject to the provisions of
subsection 5(b) regarding Ten Percent Shareholders, the exercise price of
each Incentive Stock Option shall be not less than one hundred percent (100%)
of the Fair Market Value of the Shares subject to the Option on the date the
Option is granted.  Notwithstanding the
foregoing, an Incentive Stock Option may be granted with an exercise price
lower than that set forth in the preceding sentence if such Option is granted
pursuant to an assumption or substitution for another option in a manner
satisfying the provisions of Section 424(a) of the Code.

 

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

 

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

 

In the case of
any deferred payment arrangement, interest shall be compounded at least
annually and shall be charged at the market rate of interest and contain such
other terms and conditions necessary to avoid a charge to earnings for
financial accounting purposes as a result of the use of such deferred payment
arrangement.  In addition, the promissory
note documenting 

 

7

 

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

 

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

 

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

 

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

 

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

 

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

 

8

 

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

 

(j)            Disability of Optionholder.  In the event that an Optionholder’s
Continuous Service terminates as a result of the Optionholder’s Disability, the
Optionholder may exercise his or her Option (to the extent that the
Optionholder was entitled to exercise such Option as of the date of
termination), but only within such period of time ending on the earlier of (i) the
date twelve (12) months following such termination (or such longer or shorter
period specified in the Option Agreement) or (ii) the expiration of the
term of the Option as set forth in the Option Agreement.  If, after termination, the Optionholder does
not exercise his or her Option within the time specified herein, the Option
shall terminate.

 

(k)           Death of Optionholder.  In the event (i) an Optionholder’s
Continuous Service terminates as a result of the Optionholder’s death or (ii) the
Optionholder dies within the period (if any) specified in the Option Agreement
after the termination of the Optionholder’s Continuous Service for a reason
other than death, then the Option may be exercised (to the extent the
Optionholder was entitled to exercise such Option as of the date of death) by
the Optionholder’s estate, by a person who acquired the right to exercise the
Option by bequest or inheritance or by a person designated to exercise the
Option upon the Optionholder’s death pursuant to subsection 6(e) or 6(f),
but only within the period ending on the earlier of (l) the date twelve
(12) months following the date of death (or such longer or shorter period
specified in the Option Agreement) or (2) the expiration of the term of
such Option as set forth in the Option Agreement.  If, after death, the Option is not exercised
within the time specified herein, the Option shall terminate.

 

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

 

7.                                       OPTIONS TO
NON-EMPLOYEE DIRECTORS.

 

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

 

9

 

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

 

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

 

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

 

8.                                       COVENANTS OF THE
COMPANY.

 

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

 

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

 

9.                                       USE OF PROCEEDS
FROM SHARES.

 

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

 

10

 

10.                                 CANCELLATION AND
RE-GRANT OF OPTIONS.

 

(a)           The Board shall have the authority to
effect, at any time and from time to time, (i) the repricing of any
outstanding Options under the Plan and/or (ii) with the consent of the
affected Optionholders, the cancellation of any outstanding Options under the
Plan and the grant in substitution therefor of new Options under the Plan
covering the same or different number of Shares, but having an exercise price
per Share not less than eighty-five percent (85%) of the Fair Market Value (one
hundred percent (100%) of Fair Market Value in the case of an Incentive Stock
Option or, in the case of a Ten Percent shareholder (as described in subsection
5(b)), not less than one hundred ten percent (110%) of the Fair Market Value)
per Share on the new grant date. Notwithstanding the foregoing, the Board may
grant an Option with an exercise price lower than that set forth above if such
Option is granted as part of a transaction to which section 424(a) of the
Code applies.

 

(b)           Shares subject to an Option canceled under
this Section 10 shall continue to be counted against the maximum award of
Options permitted to be granted pursuant to subsection 5(c) of the Plan.
The repricing of an Option under this Section 10, resulting in a reduction
of the exercise price, shall be deemed to be a cancellation of the original
Option and the grant of a substitute Option; in the event of such repricing,
both the original and the substituted Options shall be counted against the
maximum awards of Options permitted to be granted pursuant to subsection 5(c) of
the Plan. The provisions of this subsection 10(b) shall be applicable only
to the extent required by Section 162(m) of the Code.

 

11.                                 MISCELLANEOUS.

 

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

 

(b)           Shareholder Rights.  No Participant shall be deemed to be the
holder of, or to have any of the rights of a holder with respect to, any Shares
subject to such Option, including but not limited to Shareholder voting rights
and rights to receive dividends with respect to Shares, unless and until such
Participant has satisfied all requirements for exercise of the Option pursuant
to its terms.

 

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

 

11

 

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

 

(e)           Investment Assurances.  The Company may require an Optionholder, as a
condition of exercising or acquiring Shares under any Option, (i) to give
written assurances satisfactory to the Company as to the Optionholder’s
knowledge and experience in financial and business matters and/or to employ a
purchaser representative reasonably satisfactory to the Company who is
knowledgeable and experienced in financial and business matters and that he or
she is capable of evaluating, alone or together with the purchaser
representative, the merits and risks of exercising the Option; and (ii) to
give written assurances satisfactory to the Company stating that the
Optionholder is acquiring the Shares subject to the Option for the Optionholder’s
own account and not with any present intention of selling or otherwise
distributing the Shares.  The foregoing
requirements, and any assurances given pursuant to such requirements, shall
generally be inoperative if (1) the issuance of the Shares upon the
exercise or acquisition of Shares under the Option has been registered under a
then currently effective registration statement under the Securities Act or (2) as
to any particular requirement, a determination is made by counsel for the
Company that such requirement need not be met in the circumstances under the
then applicable securities laws.  The
Company may, upon advice of counsel to the Company, place legends onShare
certificates issued under the Plan as such counsel deems necessary or
appropriate in order to comply with applicable securities laws, including, but
not limited to, legends restricting the transfer of the Shares.

 

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

 

12.                                 ADJUSTMENTS UPON
CHANGES IN SHARES.

 

(a)           Capitalization Adjustments.  If any change is made in the Ordinary Shares
subject to the Plan, or subject to any Option, without the receipt of
consideration by the Company (through merger, consolidation, reorganization,
recapitalization, reincorporation, share dividend, spinoff, dividend in property
other than cash, share split, liquidating dividend, combination of shares,
exchange of shares, change in corporate structure or other transaction not
involving the receipt of consideration by the Company), the Plan will be
appropriately adjusted in the class(es) and maximum number of securities
subject to the Plan pursuant to subsection 4(a), the maximum 

 

12

 

number of securities subject to the option grants to any person
pursuant to subsection 5(c), and the number of securities subject to the option
grants to Non-Employee Directors under Section 7, and the outstanding
Options will be appropriately adjusted in the class(es) and number of
securities and price per share of the securities subject to such outstanding
Options.  The Board shall make such
adjustments, and its determination shall be final, binding and conclusive.  (The conversion of any convertible securities
of the Company shall not be treated as a transaction “without receipt of
consideration” by the Company.)

 

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

 

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

 

13.                                 AMENDMENT OF THE PLAN
AND OPTIONS.

 

(a)           Amendment of Plan.  The Board at any time, and from time to time,
may amend the Plan.  However, except as
provided in Section 12 relating to adjustments upon changes in the
Ordinary Shares, no amendment shall be effective unless approved by the
shareholders of the Company to the extent shareholder approval is necessary to
satisfy the requirements of Section 422 of the Code, any New York Stock
Exchange, Nasdaq or other securities exchange listing requirements, or other
applicable law.

 

(b)           Shareholder Approval.  The Board may, in its sole discretion, submit
any other amendment to the Plan for shareholder approval, including, but not
limited to, amendments to the Plan intended to satisfy the requirements of Section 162(m) of
the Code and the regulations 

 

13

 

thereunder regarding the exclusion of performance-based compensation
from the limit on corporate deductibility of compensation paid to certain
executive officers.

 

(c)           Contemplated Amendments.  It is expressly contemplated that the Board
may amend the Plan in any respect the Board deems necessary or advisable to
provide eligible Employees with the maximum benefits provided or to be provided
under the provisions of the Code and the regulations promulgated thereunder
relating to Incentive Stock Options and/or to bring the Plan and/or Incentive
Stock Options granted under it into compliance therewith.

 

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

 

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

 

14.                                 TERMINATION OR
SUSPENSION OF THE PLAN.

 

(a)           Plan Term.  The Board may suspend or terminate the Plan
at any time.  Unless sooner terminated,
the Plan shall terminate on the day before the tenth (10th) anniversary of the
date that the Predecessor Plan was adopted by the Board or approved by the
shareholders of the Company, whichever occurred earlier.  No Options may be granted under the Plan
while the Plan is suspended or after it is terminated.

 

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

 

15.                                 EFFECTIVE DATE OF
PLAN.

 

The Plan shall
become effective as determined by the Board, but no Option shall be exercised
(with the exception of an Option granted under the Predecessor Plan) unless and
until the Plan has been approved by the shareholders of the Company, which
approval shall be within twelve (12) months before or after the date the Plan
is adopted by the Board.

 

16.                                 CHOICE OF LAW.

 

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

 

14

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