Document:

exv10w03

 

Exhibit 10.03

VERITAS SOFTWARE CORPORATION

1993 EQUITY INCENTIVE PLAN

AS ADOPTED OCTOBER 1, 1993, AND AS AMENDED APRIL 22, 1994, APRIL 20,

1995, JANUARY 12, 1997 AND JANUARY 26, 1999

     1. PURPOSE. The purpose of the Plan is to provide incentives to attract, retain and
motivate eligible persons whose present and potential contributions are important to the success of
the Company, its Parent, Subsidiaries and Affiliates, by offering them an opportunity to
participate in the Company’s future performance through awards of Options, Restricted Stock and
Stock Bonuses. Capitalized terms not defined in the text are defined in Section 24.

     2. SHARES SUBJECT TO THE PLAN.

          2.1 Number of Shares Available. Subject to Sections 2.2 and 18, the total number of
Shares reserved and available for grant and issuance pursuant to the Plan shall be
107,130,1911 Shares. In addition, on each January 1, the aggregate number of shares of
the Company’s Common Stock reserved for issuance under this Plan shall be increased automatically
by a number of shares equal to four and one-half percent (4 1/2%) of the total outstanding shares
of the Company as of the immediately preceding December 31; provided, however, that
such increase shall in no event exceed 36,000,000 shares per year. Any Shares issuable upon
exercise of options granted pursuant to the Company’s 1991 Executive Stock Option Plan, and the
Company’s 1985 Stock Option Plan (the “Prior Plans”) that expire or become unexercisable
for any reason without having been exercised in full, shall no longer be available for distribution
under the Prior Plans, but shall be available for distribution under this Plan. Subject to Sections
2.2 and 18, Shares shall again be available for grant and issuance in connection with future Awards
under the Plan that: (a) are subject to issuance upon exercise of an Option but cease to be subject
to such Option for any reason other than exercise of such Option, (b) are subject to an Award
granted hereunder but are forfeited or are repurchased by the Company at the original issue price,
or (c) are subject to an Award that otherwise terminates without Shares being issued. The total
number of Shares issued under the Plan upon exercise of ISOs will in no event exceed 225,000,000
Shares (adjusted in proportion to any adjustment under Section 2.2 below) over the term of the
Plan.

2.2 Adjustment of Shares. In the event that the number of outstanding Shares is changed by
a stock dividend, recapitalization, stock split, reverse stock split, subdivision, combination,
reclassification or similar change in the capital structure of the Company without consideration,
then (a) the number of Shares reserved for issuance under the Plan, (b) the Exercise Prices of and
number of Shares subject to outstanding Options, and

 

	1	 	Includes 17,647,806 shares pursuant to the
provision for automatic annual increase and registered on Form S-8 March 29,
2001.

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(c) the number of Shares subject to other outstanding Awards shall be proportionately adjusted,
subject to any required action by the Board or the shareholders of the Company and compliance with
applicable securities laws; provided, however, that fractions of a Share shall not
be issued but shall either be paid in cash at Fair Market Value or shall be rounded down to the
nearest Share, as determined by the Committee; and provided, further, that the
Exercise Price of any Option may not be decreased to below the par value of the Shares.

     3. ELIGIBILITY. ISOs (as defined in Section 5 below) may be granted only to employees
(including officers and directors who are also employees) of the Company or of a Parent or
Subsidiary of the Company. All other Awards may be granted to employees, officers, directors,
consultants, independent contractors and advisers of the Company or any Parent, Subsidiary or
Affiliate of the Company; provided such consultants, contractors and advisers render bona
fide services not in connection with the offer and sale of securities in a capital-raising
transaction. “Named Executive Officers” (as that term is defined in Item 402(a)(3) of Regulation
S-K promulgated under the Exchange Act) shall each be eligible to receive up to an aggregate
maximum of 3,037,500 Shares at any time during the term of this Plan pursuant to the grant of
Awards hereunder, not to exceed 3,037,500 Shares during any one twelve (12) month period. A person
may be granted more than one Award under the Plan.

     4. ADMINISTRATION.

          4.1 Committee Authority. The Plan shall be administered by the Committee or the Board
acting as the Committee. Subject to the general purposes, terms and conditions of the Plan, and to
the direction of the Board, the Committee shall have full power to implement and carry out the
Plan. The Committee shall have the authority to:

	(a)	 	construe and interpret the Plan, any Award Agreement and any other agreement or document
executed pursuant to the Plan;
	 
	(b)	 	prescribe, amend and rescind rules and regulations relating to the Plan;
	 
	(c)	 	select persons to receive Awards;
	 
	(d)	 	determine the form and terms of Awards;
	 
	(e)	 	determine the number of Shares or other consideration subject to Awards;
	 
	(f)	 	determine whether Awards will be granted singly, in combination, in tandem, in replacement
of, or as alternatives to, other Awards under the Plan or any other incentive or compensation
plan of the Company or any Parent, Subsidiary or Affiliate of the Company;
	 
	(g)	 	grant waivers of Plan or Award conditions;

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	(h)	 	determine the vesting, exercisability and payment of Awards;
	 
	(i)	 	correct any defect, supply any omission, or reconcile any inconsistency in the Plan, any
Award or any Award Agreement;
	 
	(j)	 	determine whether an Award has been earned; and
	 
	(k)	 	make all other determinations necessary or advisable for the administration of the Plan.

          4.2 Committee Discretion. Any determination made by the Committee with respect to any
Award shall be made in its sole discretion at the time of grant of the Award or, unless in
contravention of any express term of the Plan or Award, at any later time, and such determination
shall be final and binding on the Company and all persons having an interest in any Award under the
Plan. The Committee may delegate to one or more officers of the Company the authority to grant an
Award under the Plan to Participants who are not Insiders of the Company, provided such officer is
a member of the Board.

          4.3 Compliance With Code Section 162m. If two or more members of the Board are Outside
Directors, the Committee shall be comprised of at least two members of the Board, all of whom are
Outside Directors.

     5. OPTIONS. The Committee may grant Options to eligible persons and shall determine
whether such Options shall be Incentive Stock Options within the meaning of the Code
(“ISOs”) or Nonqualified Stock Options (“NQSOs”), the number of Shares subject to
the Option, the Exercise Price of the Option, the period during which the Option may be exercised,
and all other terms and conditions of the Option, subject to the following:

          5.1 Form of Option Grant. Each Option granted under the Plan shall be evidenced by an
Award Agreement which shall expressly identify the Option as an ISO or NQSO (“Stock Option
Agreement”), and be in such form and contain such provisions (which need not be the same for
each Participant) as the Committee shall from time to time approve, and which shall comply with and
be subject to the terms and conditions of the Plan.

          5.2 Date of Grant. The date of grant of an Option shall be the date on which the
Committee makes the determination to grant such Option, unless otherwise specified by the
Committee. The Stock Option Agreement and a copy of the Plan will be delivered to the Participant
within a reasonable time after the granting of the Option.

          5.3 Exercise Period. Options shall be exercisable within the times or upon the events
determined by the Committee as set forth in the Stock Option Agreement; provided,
however, that no Option shall be exercisable after the expiration of

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one hundred twenty (120) months from the date the Option is granted, and provided
further that no Option granted to a person who directly or by attribution owns more than
ten percent (10%) of the total combined voting power of all classes of stock of the Company or any
Parent or Subsidiary of the Company (“Ten Percent Shareholder”) shall be exercisable after
the expiration of five (5) years from the date the Option is granted. The Committee also may
provide for the exercise of Options to become exercisable at one time or from time to time,
periodically or otherwise, in such number or percentage as the Committee determines.

          5.4 Exercise Price. The Exercise Price shall be determined by the Committee when the
Option is granted and may be not less than 85% of the Fair Market Value of the Shares on the date
of grant; provided that (i) the Exercise Price of an ISO shall be not less than 100% of the Fair
Market Value of the Shares on the date of grant and (ii) the Exercise Price of any Option granted
to a Ten Percent Shareholder shall not be less than 110% of the Fair Market Value of the Shares on
the date of grant. Payment for the Shares purchased may be made in accordance with Section 8 of the
Plan.

          5.5 Method of Exercise. Options may be exercised only by delivery to the Company or
its designee of a written stock option exercise agreement (the “Exercise Agreement”) in a
form approved by the Committee (which need not be the same for each Participant), stating the
number of Shares being purchased, the restrictions imposed on the Shares, if any, and such
representations and agreements regarding Participant’s investment intent and access to information,
if any, as may be required or desirable by the Company to comply with applicable securities laws,
together with payment in full of the Exercise Price for the number of Shares being purchased.

          5.6 Termination. Notwithstanding the exercise periods set forth in the Stock Option
Agreement, exercise of an Option shall always be subject to the following:

	(a)	 	If the Participant is Terminated for any reason except death or Disability, then Participant
may exercise such Participant’s Options only to the extent that such Options would have been
exercisable upon the Termination Date no later than ninety (90) days after the Termination
Date (or such shorter time period as may be specified in the Stock Option Agreement), but in
any event, no later than the expiration date of the Options.

	(b)	 	If the Participant is terminated because of death or Disability (or the participant dies
within three months of such termination), then Participant’s Options may be exercised only to
the extent that such Options would have been exercisable by Participant on the Termination
Date and must be exercised by Participant (or Participant’s legal representative or authorized
assignee) no later than twelve (12) months after the Termination Date (or such shorter time
period as may be specified in the Stock Option Agreement), but in any event no later than the
expiration date of the Options.

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          5.7 Limitations on Exercise. The Committee may specify a reasonable minimum number of
Shares that may be purchased on any exercise of an Option, provided that such minimum number will
not prevent Participant from exercising the Option for the full number of Shares for which it is
then exercisable.

          5.8 Limitations on ISOs. The aggregate Fair Market Value (determined as of the date of
grant) of Shares with respect to which ISOs are exercisable for the first time by a Participant
during any calendar year (under the Plan or under any other incentive stock option plan of the
Company or any Affiliate, Parent or Subsidiary of the Company) shall not exceed $100,000. If the
Fair Market Value of Shares on the date of grant with respect to which ISOs are exercisable for the
first time by a Participant during any calendar year exceeds $100,000, the Options for the first
$100,000 worth of Shares to become exercisable in such calendar year shall be ISOs and the Options
for the amount in excess of $100,000 that become exercisable in that calendar year shall be NQSOs.
In the event that the Code or the regulations promulgated thereunder are amended after the
Effective Date of the Plan to provide for a different limit on the Fair Market Value of Shares
permitted to be subject to ISOs, such different limit shall be automatically incorporated herein
and shall apply to any Options granted after the effective date of such amendment.

          5.9 Modification, Extension or Renewal. The Committee may modify, extend or renew
outstanding Options and authorize the grant of new Options in substitution therefor, provided that
any such action may not, without the written consent of Participant, impair any of Participant’s
rights under any Option previously granted. Any outstanding ISO that is modified, extended, renewed
or otherwise altered shall be treated in accordance with Section 424(h) of the Code. The Committee
may reduce the Exercise Price of outstanding Options without the consent of Participants affected
by a written notice to them; provided, however, that the Exercise Price may not be
reduced below the minimum Exercise Price that would be permitted under Section 5.4 of the Plan for
Options granted on the date the action is taken to reduce the Exercise Price; provided,
further, that the Exercise Price shall not be reduced below the par value of the Shares, if
any.

          5.10 No Disqualification. Notwithstanding any other provision in the Plan, no term of
the Plan relating to ISOs shall be interpreted, amended or altered, nor shall any discretion or
authority granted under the Plan be exercised, so as to disqualify the Plan under Section 422 of
the Code or, without the consent of the Participant affected, to disqualify any ISO under Section
422 of the Code.

     6. RESTRICTED STOCK. A Restricted Stock Award is an offer by the Company to sell to an
eligible person Shares that are subject to restrictions. The Committee shall determine to whom an
offer will be made, the number of Shares the person may purchase, the price to be paid (the
“Purchase Price”), the restrictions to which the Shares shall be subject, and all other terms and
conditions of the Restricted Stock Award, subject to the following:

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          6.1 Form of Restricted Stock Award. All purchases under a Restricted Stock Award made
pursuant to the Plan shall be evidenced by an Award Agreement (“Restricted Stock Purchase
Agreement”) that shall be in such form (which need not be the same for each Participant) as the
Committee shall from time to time approve, and shall comply with and be subject to the terms and
conditions of the Plan. The offer of Restricted Stock shall be accepted by the Participant’s
execution and delivery of the Restricted Stock Purchase Agreement and full payment for the Shares
to the Company within thirty (30) days from the date the Restricted Stock Purchase Agreement is
delivered to the person. If such person does not execute and deliver the Restricted Stock Purchase
Agreement along with full payment for the Shares to the Company within thirty (30) days, then the
offer shall terminate, unless otherwise determined by the Committee.

          6.2 Purchase Price. The Purchase Price of Shares sold pursuant to a Restricted Stock
Award shall be determined by the Committee and shall be at least 85% of the Fair Market Value of
the Shares when the Restricted Stock Award is granted, except in the case of a sale to a Ten
Percent Shareholder, in which case the Purchase Price shall be 100% of the Fair Market Value.
Payment of the Purchase Price may be made in accordance with Section 8 of the Plan.

          6.3 Restrictions. Restricted Stock Awards shall be subject to such restrictions as the
Committee may impose. The Committee may provide for the lapse of such restrictions in installments
and may accelerate or waive such restrictions, in whole or part, based on length of service,
performance or such other factors or criteria as the Committee may determine.

     7. STOCK BONUSES.

          7.1 Awards of Stock Bonuses. A Stock Bonus is an award of Shares (which may consist of
Restricted Stock) for services rendered to the Company or any Parent, Subsidiary or Affiliate of
the Company. A Stock Bonus may be awarded for past services already rendered to the Company, or any
Parent, Subsidiary or Affiliate of the Company pursuant to an Award Agreement (the “Stock Bonus
Agreement”) that shall be in such form (which need not be the same for each Participant) as the
Committee shall from time to time approve, and shall comply with and be subject to the terms and
conditions of the Plan. A Stock Bonus may be awarded upon satisfaction of such performance goals as
are set out in advance in Participant’s individual Award Agreement (the “Performance Stock
Bonus Agreement”) that shall be in such form (which need not be the same for each Participant)
as the Committee shall from time to time approve, and shall comply with and be subject to the terms
and conditions of the Plan. Stock Bonuses may vary from Participant to Participant and between
groups of Participants, and may be based upon the achievement of the Company, Parent, Subsidiary or
Affiliate and/or individual performance factors or upon such other criteria as the Committee may
determine.

          7.2 Terms of Stock Bonuses. The Committee shall determine the number of Shares to be
awarded to the Participant and whether such Shares shall be

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Restricted Stock. If the Stock Bonus is being earned upon the satisfaction of performance
goals pursuant to a Performance Stock Bonus Agreement, then the Committee shall determine: (a) the
nature, length and starting date of any period during which performance is to be measured (the
“Performance Period”) for each Stock Bonus; (b) the performance goals and criteria to be
used to measure the performance, if any; (c) the number of Shares that may be awarded to the
Participant; and (d) the extent to which such Stock Bonuses have been earned. Performance Periods
may overlap and Participants may participate simultaneously with respect to Stock Bonuses that are
subject to different Performance Periods and different performance goals and other criteria. The
number of Shares may be fixed or may vary in accordance with such performance goals and criteria as
may be determined by the Committee. The Committee may adjust the performance goals applicable to
the Stock Bonuses to take into account changes in law and accounting or tax rules and to make such
adjustments as the Committee deems necessary or appropriate to reflect the impact of extraordinary
or unusual items, events or circumstances to avoid windfalls or hardships.

          7.3 Form of Payment. The earned portion of a Stock Bonus may be paid currently or on a
deferred basis with such interest or dividend equivalent, if any, as the Committee may determine.
Payment may be made in the form of cash, whole Shares, including Restricted Stock, or a combination
thereof, either in a lump sum payment or in installments, all as the Committee shall determine.

          7.4 Termination During Performance Period. If a Participant is Terminated during a
Performance Period for any reason, then such Participant shall be entitled to payment (whether in
Shares, cash or otherwise) with respect to the Stock Bonus only to the extent earned as of the date
of Termination in accordance with the Performance Stock Bonus Agreement, unless the Committee shall
determine otherwise.

     8. PAYMENT FOR SHARE PURCHASES.

          8.1 Payment. Payment for Shares purchased pursuant to the Plan may be made in cash (by
check) or, where expressly approved for the Participant by the Committee and where permitted by
law:

	(a)	 	by cancellation of indebtedness of the Company to the Participant;
	 
	(b)	 	by surrender of Shares that either: (1) have been owned by Participant for more than six (6)
months and have been paid for within the meaning of SEC Rule 144 (and, if such shares were
purchased from the Company by use of a promissory note, such note has been fully paid with
respect to such Shares); or (2) were obtained by Participant in the public market;
	 
	(c)	 	by tender of a full recourse promissory note having such terms as may be approved by the
Committee and bearing interest at a rate sufficient to avoid imputation of income under
Sections 483 and 1274 of the Code; provided, however, that Participants who
are not employees of the Company shall not be

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	 	 	entitled to purchase Shares with a promissory note unless the note is adequately secured by
collateral other than the Shares; provided, further, that the portion of
the Purchase Price equal to the par value of the Shares, if any, must be paid in cash;
	 
	(d)	 	by waiver of compensation due or accrued to Participant for services rendered;
	 
	(e)	 	by tender of property;
	 
	(f)	 	with respect only to purchases upon exercise of an Option, and provided that a public market
for the Company’s stock exists:

	 	(1)	 	through a “same day sale” commitment from Participant and a broker-dealer
that is a member of the National Association of Securities Dealers (a “NASD
Dealer”) whereby Participant irrevocably elects to exercise the Option and to sell
a portion of the Shares so purchased to pay for the Exercise Price, and whereby the
NASD Dealer irrevocably commits upon receipt of such Shares to forward the Exercise
Price directly to the Company; or
	 
	 	(2)	 	through a “margin” commitment from Participant and a NASD Dealer whereby
Participant irrevocably elects to exercise the Option and to pledge the Shares so
purchased to the NASD Dealer in a margin account as security for a loan from the NASD
Dealer in the amount of the Exercise Price, and whereby the NASD Dealer irrevocably
commits upon receipt of such Shares to forward the Exercise Price directly to the
Company;

or

	(g)	 	by any combination of the foregoing.

          8.2 Loan Guarantees. The Committee may help the Participant pay for Shares purchased
under the Plan by authorizing a guarantee by the Company of a third-party loan to the Participant.

     9. WITHHOLDING TAXES.

          9.1 Withholding Generally. Whenever Shares are to be issued in satisfaction of Awards
granted under the Plan, the Company may require the Participant to remit to the Company an amount
sufficient to satisfy federal, state and local withholding tax requirements prior to the delivery
of any certificate or certificates for such Shares. Whenever, under the Plan, payments in
satisfaction of Awards are to be made in cash, such payment shall be net of an amount sufficient to
satisfy federal, state, and local withholding tax requirements.

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9.2 Stock Withholding. When, under applicable tax laws, a Participant incurs tax liability
in connection with the exercise or vesting of any Award that is subject to tax withholding and the
Participant is obligated to pay the Company the amount required to be withheld, the Committee may
in its sole discretion allow the Participant to satisfy the minimum withholding tax obligation by
electing to have the Company withhold from the Shares to be issued that minimum number of Shares
having a Fair Market Value equal to the minimum amount required to be withheld, determined on the
date that the amount of tax to be withheld is to be determined; but in no event will the Company
withhold Shares if such withholding would result in adverse accounting consequences to the Company.
All elections by a Participant to have Shares withheld for this purpose will be made in accordance
with the requirements established by the Committee for such elections and be in writing in a form
acceptable to the Committee.

     10. PRIVILEGES OF STOCK OWNERSHIP.

          10.1 Voting and Dividends. No Participant shall have any of the rights of a
shareholder with respect to any Shares until the Shares are issued to the Participant. After Shares
are issued to the Participant, the Participant shall be a shareholder and have all the rights of a
shareholder with respect to such Shares, including the right to vote and receive all dividends or
other distributions made or paid with respect to such Shares; provided, that if such Shares
are Restricted Stock, then any new, additional or different securities the Participant may become
entitled to receive with respect to such Shares by virtue of a stock dividend, stock split or any
other change in the corporate or capital structure of the Company shall be subject to the same
restrictions as the Restricted Stock; provided, further, that the Participant shall
have no right to retain such dividends or distributions with respect to Shares that are repurchased
at the Participant’s original Purchase Price pursuant to Section 12.

          10.2 Financial Statements. The Company shall provide financial statements to each
Participant prior to such Participant’s purchase of Shares under the Plan, and to each Participant
annually during the period such Participant has Options outstanding; provided,
however, the Company shall not be required to provide such financial statements to
Participants whose services in connection with the Company assure them access to equivalent
information.

     11. TRANSFERABILITY. Awards granted under the Plan, and any interest therein, shall
not be transferable or assignable by Participant, and may not be made subject to execution,
attachment or similar process, otherwise than by will or by the laws of descent and distribution or
as consistent with the specific Plan and Award Agreement provisions relating thereto. During the
lifetime of the Participant an Award shall be exercisable only by the Participant, and any
elections with respect to an Award, may be made only by the Participant.

     12. RESTRICTIONS ON SHARES. At the discretion of the Committee, the Company may
reserve to itself and/or its assignee(s) in the Award Agreement a right to repurchase a portion of
or all Shares which have not yet vested that are held by a

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Participant following such Participant’s Termination at any time within ninety (90) days after
the later of Participant’s Termination Date and the date Participant purchases Shares under this
Plan, for cash and/or cancellation of purchase money indebtedness, at the Participant’s Exercise
Price or Purchase Price, as the case may be.

     13. CERTIFICATES. All certificates for Shares or other securities delivered under the
Plan shall be subject to such stock transfer orders, legends and other restrictions as the
Committee may deem necessary or advisable, including restrictions under any applicable federal,
state or foreign securities law, or any rules, regulations and other requirements of the SEC or any
stock exchange or automated quotation system upon which the Shares may be listed.

     14. ESCROW; PLEDGE OF SHARES. To enforce any restrictions on a Participant’s Shares,
the Committee may require the Participant to deposit all certificates, together with stock powers
or other instruments of transfer approved by the Committee, appropriately endorsed in blank, with
the Company or an agent designated by the Company to hold in escrow until such restrictions have
lapsed or terminated, and the Committee may cause a legend or legends referencing such restrictions
to be placed on the certificates. Any Participant who is permitted to execute a promissory note as
partial or full consideration for the purchase of Shares under the Plan shall be required to pledge
and deposit with the Company all or part of the Shares so purchased as collateral to secure the
payment of Participant’s obligation to the Company under the promissory note; provided,
however, that the Committee may require or accept other or additional forms of collateral
to secure the payment of such obligation and, in any event, the Company shall have full recourse
against the Participant under the promissory note notwithstanding any pledge of the Participant’s
Shares or other collateral. In connection with any pledge of the Shares, Participant shall be
required to execute and deliver a written pledge agreement in such form as the Committee shall from
time to time approve. The Shares purchased with the promissory note may be released from the pledge
on a prorata basis as the promissory note is paid.

     15. EXCHANGE AND BUYOUT OF AWARDS. The Committee may, at any time or from time to
time, authorize the Company, with the consent of the respective Participants, to issue new Awards
in exchange for the surrender and cancellation of any or all outstanding Awards. The Committee may
at any time buy from a Participant an Award previously granted with payment in cash, Shares
(including Restricted Stock) or other consideration, based on such terms and conditions as the
Committee and the Participant shall agree.

     16. SECURITIES LAW AND OTHER REGULATORY COMPLIANCE. An Award shall not be effective
unless such Award is in compliance with all applicable federal and state securities laws, rules and
regulations of any governmental body, and the requirements of any stock exchange or automated
quotation system upon which the Shares may then be listed, as they are in effect on the date of
grant of the Award and also on the date of exercise or other issuance. Notwithstanding any other
provision in the Plan, the Company shall have no obligation to issue or deliver certificates for
Shares under the

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Plan prior to (a) obtaining any approvals from governmental agencies that the Company
determines are necessary or advisable, and/or (b) completion of any registration or other
qualification of such shares under any state or federal law or ruling of any governmental body that
the Company determines to be necessary or advisable. The Company shall be under no obligation to
register the Shares with the SEC or to effect compliance with the registration, qualification or
listing requirements of any state securities laws, stock exchange or automated quotation system,
and the Company shall have no liability for any inability or failure to do so.

     17. NO OBLIGATION TO EMPLOY. Nothing in the Plan or any Award granted under the Plan
shall confer or be deemed to confer on any Participant any right to continue in the employ of, or
other relationship with, the Company or any Parent, Subsidiary or Affiliate of the Company or limit
in any way the right of the Company or any Parent, Subsidiary or Affiliate of the Company to
terminate Participant’s employment or other relationship at any time, with or without cause.

     18. CORPORATE TRANSACTIONS.

          18.1 Assumption or Replacement of Awards by Successor. In the event of (a) a merger
or consolidation in which the Company is not the surviving corporation (other than a merger or
consolidation with a wholly-owned subsidiary, a reincorporation of the Company in a different
jurisdiction, or other transaction in which there is no substantial change in the shareholders of
the Company and the Awards granted under the Plan are assumed or replaced by the successor
corporation, which assumption shall be binding on all Participants), (b) a dissolution or
liquidation of the Company, (c) the sale of substantially all of the assets of the Company, or (d)
any other transaction which qualifies as a “corporate transaction” under Section 424(a) of the Code
wherein the shareholders of the Company give up all of their equity interest in the Company
(except for the acquisition, sale or transfer of all or substantially all of the
outstanding shares of the Company), any or all outstanding Awards may be assumed or replaced by the
successor corporation, which assumption or replacement shall be binding on all Participants. In the
alternative, the successor corporation may substitute equivalent Awards or provide substantially
similar consideration to Participants as was provided to shareholders (after taking into account
the existing provisions of the Awards). The successor corporation may also issue, in place of
outstanding Shares of the Company held by the Participant, substantially similar shares or other
property subject repurchase restrictions no less favorable to the Participant.

          18.2 Expiration of Options. In the event such successor corporation, if any, refuses
to assume or substitute the Options, as provided above, pursuant to a transaction described in
Subsection 18.1(a) above, such Options shall expire on such transaction at such time and on such
conditions as the Board shall determine. In the event such successor corporation, if any, refuses
to assume or substitute the Options as provided above, pursuant to a transaction described in
Subsections 18.1(b), (c) or (d) above, or there is no successor corporation, and if the Company
ceases to exist as a separate corporate entity, then, notwithstanding any contrary terms in the
Award

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Agreement, the Options shall expire on a date at least twenty (20) days after the Board gives
written notice to Participants specifying the terms and conditions of such termination.

          18.3 Other Treatment of Awards. Subject to any greater rights granted to Participants
under the foregoing provisions of this Section 18, in the event of the occurrence of any
transaction described in Section 18.1, any outstanding Awards shall be treated as provided in the
applicable agreement or plan of merger, consolidation, dissolution, liquidation, sale of assets or
other “corporate transaction.”

          18.4 Assumption of Awards by the Company. The Company, from time to time, also may
substitute or assume outstanding awards granted by another company, whether in connection with an
acquisition of such other company or otherwise, by either (a) granting an Award under the Plan in
substitution of such other company’s award, or (b) assuming such award as if it had been granted
under the Plan if the terms of such assumed award could be applied to an Award granted under the
Plan. Such substitution or assumption shall be permissible if the holder of the substituted or
assumed award would have been eligible to be granted an Award under the Plan if the other company
had applied the rules of the Plan to such grant. In the event the Company assumes an award granted
by another company, the terms and conditions of such award shall remain unchanged (except
that the exercise price and the number and nature of Shares issuable upon exercise of any such
option will be adjusted appropriately pursuant to Section 424(a) of the Code). In the event the
Company elects to grant a new Option rather than assuming an existing option, such new Option may
be granted with a similarly adjusted Exercise Price.

          18.5 Acceleration of Officer Options. The Committee in its sole discretion may grant
Options to certain officers under which the vesting will accelerate upon the occurrence of a
transaction described in Subsections 18.1(a), 18.1(b), 18.1(c) or 18.1(d) above in which there is a
successor corporation, as to an additional 1/48th of the Shares subject to such Options for each
month of employment the officer completed with the Company from the date of the grant to the date
of transaction. In addition, the vesting of such Options shall accelerate for an additional twenty
four months at the rate of 1/48th of the Shares subject to such option; provided that: (i) if
requested to do so, the officer remains employed with the successor for a period of six months
following the date of such transaction or (ii) the officer is not requested to remain with the
successor following the date of such transaction.

     19. ADOPTION AND SHAREHOLDER APPROVAL. The Plan shall become effective on the date
that it is adopted by the Board (the “Effective Date”). The Plan shall be approved by the
shareholders of the Company (excluding Shares issued pursuant to this Plan), consistent with
applicable laws, within twelve months before or after the Effective Date. Upon the Effective Date,
the Board may grant Awards pursuant to the Plan; provided, however, that: (a) no Option may be
exercised prior to initial shareholder approval of the Plan; (b) no Option granted pursuant to an
increase in the number of Shares approved by the Board shall be exercised prior to the time such

12

 

increase has been approved by the shareholders of the Company; and (c) in the event that
shareholder approval is not obtained within the time period provided herein, all Awards granted
hereunder shall be cancelled, any Shares issued pursuant to any Award shall be cancelled and any
purchase of Shares hereunder shall be rescinded.

     20. TERM OF PLAN. The Plan will terminate ten (10) years from the Effective Date or,
if earlier, the date of shareholder approval.

     21. AMENDMENT OR TERMINATION OF PLAN. The Board may at any time terminate or amend the
Plan in any respect, including without limitation amendment of any form of Award Agreement or
instrument to be executed pursuant to the Plan; provided, however, that the Board
shall not, without the approval of the shareholders of the Company, amend the Plan in any manner
that requires such shareholder approval pursuant to the Code or the regulations promulgated
thereunder as such provisions apply to ISO plans.

     22. NONEXCLUSIVITY OF THE PLAN. Neither the adoption of the Plan by the Board, the
submission of the Plan to the shareholders of the Company for approval, nor any provision of the
Plan shall be construed as creating any limitations on the power of the Board to adopt such
additional compensation arrangements as it may deem desirable, including, without limitation, the
granting of stock options and bonuses otherwise than under the Plan, and such arrangements may be
either generally applicable or applicable only in specific cases.

     23. GOVERNING LAW. The Plan and all agreements, documents and instruments entered into
pursuant to the Plan shall be governed by and construed in accordance with the internal laws of the
State of California, excluding that body of law pertaining to conflict of laws.

     24. DEFINITIONS. As used in the Plan, the following terms shall have the following
meanings:

          “Affiliate” means any corporation that directly, or indirectly through one or more
intermediaries, controls or is controlled by, or is under common control with, another corporation,
where “control” (including the terms “controlled by” and “under common control with”) means the
possession, direct or indirect, of the power to cause the direction of the management and policies
of the corporation, whether through the ownership of voting securities, by contract or otherwise.

          “Award” means any award under the Plan, including any Option, Restricted Stock or
Stock Bonus.

          “Award Agreement” means, with respect to each Award, the signed written agreement
between the Company and the Participant setting forth the terms and conditions of the Award.

13

 

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

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

          “Committee” means the committee appointed by the Board to administer the Plan, or if
no committee is appointed, the Board.

          “Company” means VERITAS Software Corporation, a corporation organized under the laws
of the State of Delaware, any successor corporation thereto and any corporation that assumes the
Plan.

          “Disability” means a disability, whether temporary or permanent, partial or total,
within the meaning of Section 22(e)(3) of the Code, as determined by the Committee.

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

          “Exercise Price” means the price at which a holder of an Option may purchase the
Shares issuable upon exercise of the Option.

          “Fair Market Value” means, as of any date, the value of a share of the Company’s
Common Stock determined as follows:

	(a)	 	if such Common Stock is then quoted on the Nasdaq National Market, its last reported sale
price on the Nasdaq National Market or, if no such reported sale takes place on such date, the
average of the closing bid and asked prices;

	(b)	 	if such Common Stock is publicly traded and is then listed on a national securities exchange,
the last reported sale price or, if no such reported sale takes place on such date, the
average of the closing bid and asked prices on the principal national securities exchange on
which the Common Stock is listed or admitted to trading;

	(c)	 	if such Common Stock is publicly traded but is not quoted on the Nasdaq National Market nor
listed or admitted to trading on a national securities exchange, the average of the closing
bid and asked prices on such date, as reported by The Wall Street Journal, for the
over-the-counter market;

or

	(d)	 	if none of the foregoing is applicable, by the Board of Directors of the Company in good
faith.

          “Insider” means an officer or director of the Company or any other person whose
transactions in the Company’s Common Stock are subject to Section 16 of the Exchange Act.

14

 

          “Option” means an award of an option to purchase Shares pursuant to Section 5.

          “Outside Director” means any director who is not (i) a current employee of the Company
or any Parent, Subsidiary or Affiliate of the Company; (ii) a former employee of the Company or any
Parent, Subsidiary or Affiliate of the Company who is receiving compensation for prior services
(other than benefits under a tax-qualified pension plan); (iii) a current or former officer of the
Company or any Parent, Subsidiary or Affiliate of the Company; or (iv) currently receiving
compensation for personal services in any capacity, other than as a director, from the Company or
any Parent, Subsidiary or Affiliate of the Company; provided, however, that at such
time as the term “Outside Director”, as used in Section 162(m) is defined in regulations
promulgated under Section 162(m) of the Code, “Outside Director” shall have the meaning set forth
in such regulations, as amended from time to time and as interpreted by the Internal

Revenue Service.

          “Parent” means any corporation (other than the Company) in an unbroken chain of
corporations ending with the Company, if at the time of the granting of an Award under the Plan,
each of such corporations other than the Company owns stock possessing 50% or more of the total
combined voting power of all classes of stock in one of the other corporations in such chain.

          “Participant” means a person who receives an Award under the Plan.

          “Plan” means this VERITAS Software Corporation 1993 Equity Incentive Plan, as amended
from time to time.

          “Restricted Stock Award” means an award of Shares pursuant to Section 6.

          “SEC” means the Securities and Exchange Commission.

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

          “Shares” means shares of the Company’s Common Stock reserved for issuance under the
Plan, as adjusted pursuant to Sections 2 and 15, and any successor security.

          “Stock Bonus” means an award of Shares, or cash in lieu of Shares, pursuant to Section
7.

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

15

 

          “Termination” or “Terminated” means, for purposes of the Plan with respect to
a Participant, that the Participant has ceased to provide services as an employee, director,
consultant, independent contractor or adviser, to the Company or a Parent, Subsidiary or Affiliate
of the Company, except in the case of sick leave, military leave, or any other leave of absence
approved by the Committee, provided, that such leave is for a period of not more than
ninety (90) days, or reinstatement upon the expiration of such leave is guaranteed by contract or
statute. The Committee shall have sole discretion to determine whether a Participant has ceased to
provide services and the effective date on which the Participant ceased to provide services (the
“Termination Date”).

16

 

Exhibit A

Form of Stock Option Agreement

 

 

VERITAS SOFTWARE CORPORATION

1993 EQUITY INCENTIVE PLAN

STOCK OPTION AGREEMENT

New Hire Stock Option Grants

          This Stock Option Agreement (“Agreement”) is made and entered into as of the
effective date of grant (the “Date of Grant”) set forth in the attached Notice of Grant
of Stock Options and Signature Page to Stock Option Agreement (the “Notice of Grant”)
by and between VERITAS Software Corporation, a Delaware corporation (the “Company”),
and the participant named in the Notice of Grant (“Participant”). Capitalized terms
not defined herein shall have the meaning ascribed to them in the Company’s 1993 Equity
Incentive Plan, as amended January 26, 1999 (the “Plan”).

          1. Grant of Option. The Company hereby grants to Participant an option (the
“Option”) to purchase the total number of shares of Common Stock of the Company set
forth in the Notice of Grant (the “Shares”) at the exercise price per share set forth
in the Notice of Grant, subject to all of the terms and conditions of this Agreement and the
Plan. If designated as an Incentive Stock Option above, the Option is intended to qualify as
an “incentive stock option” (“ISO”) within the meaning of Section 422 of the Internal
Revenue Code of 1986, as amended (the “Code”).

          2. Vesting Schedule.

               2.1 Vesting Schedule for New Hire Grants. Subject to the terms and conditions of
the Plan and this Agreement, the Option shall be exercisable as it vests. The Shares subject
to the Option shall vest as follows:

                    Provided Participant continues to provide services to the Company or any Subsidiary,
Parent or Affiliate of the Company throughout the specified period, the Option shall vest as to
portions of the Shares as follows: (a) the Option shall not vest with respect to any of the
Shares until the Participant has completed six (6) months employment with the Company or any
Subsidiary, Parent or Affiliate of the Company; (b) upon the Participant’s completion of six
(6) months employment with the Company or any Subsidiary, Parent or Affiliate of the Company,
the Option shall vest as to twelve and one half percent (12.5%) of the Total Option Shares; and
(c) each month thereafter, the Option shall vest as to 1/48th of the Total Option Shares until
the Option is vested with respect to one hundred percent (100%) of the Shares. If application
of the vesting percentage causes a fractional Share, such Share shall be rounded down to a
whole Share.

               2.2 Expiration. The Option shall expire on the Expiration Date set forth in the
Notice of Grant and must be exercised, if at all, on or before the Expiration Date.

               2.3 Extension of Vesting for Part-Time Employees. In the event Participant is a
full time employee of the Company or any Subsidiary, Parent or Affiliate of the Company on the
Date of Grant, and subsequently agrees with the Company or any Subsidiary, Parent or Affiliate
of the Company to reduce Participant’s normal working hours to at least twenty (20) and fewer
than (30) hours per week, all references to 1/48th in Section 2.1 above shall be automatically
deemed to be 1/96th from that date forward, until such time as Participant returns to a normal
full time schedule, whereupon the vesting percentage shall revert to 1/48th per month from that
date forward. In the event Participant is an employee of the Company or any Subsidiary on the
Date of Grant with normal working hours of at least twenty (20) hours per week, and
subsequently agrees with the Company or any Subsidiary, Parent or Affiliate of the Company to
reduce Participant’s normal working hours to fewer than twenty (20) per week,

 

 

the Option shall
cease to vest until such time (if any) when Participant returns to a working schedule of at
least twenty (20) hours per week.

          3. Termination.

               3.1 Termination for Any Reason Except Death or Disability. If Participant is
Terminated for any reason, except death or Disability, the Option, to the extent (and only to
the extent) that it would have been exercisable by Participant on the date of Termination, may
be exercised by Participant no later than ninety (90) days after the date of Termination, but
in any event no later than the Expiration Date.

               3.2 Termination Because of Death or Disability. If Participant is Terminated
because of death or Disability of Participant, the Option, to the extent that it is exercisable
by Participant on the date of Termination, may be exercised by Participant (or Participant’s
legal representative) no later than twelve (12) months after the date of Termination, but in
any event no later than the Expiration Date.

               3.3 No Obligation to Employ. Nothing in the Plan or this Agreement shall confer
on Participant any right to continue in the employ of, or any other relationship with, the
Company or any Parent, Subsidiary or Affiliate of the Company, or limit in any way the right of
the Company or any Parent, Subsidiary or Affiliate of the Company to terminate Participant’s
employment or other relationship at any time, with or without cause.

          4. Manner of Exercise.

               4.1 Stock Option Exercise Agreement. To exercise this Option, Participant (or in
the case of exercise after Participant’s death, Participant’s executor, administrator, heir or
legatee, as the case may be) must deliver to the Company an executed stock option exercise
agreement in the form as may be approved by the Company from time to time (the “Exercise
Agreement”), which shall set forth, inter alia. Participant’s election to
exercise the Option, the number of Shares being purchased, any restrictions imposed on the
Shares and any representations, warranties and agreements regarding Participant’s investment
intent and access to information as may be required by the Company to comply with applicable
securities laws. If someone other than Participant exercises the Option, then such person must
submit documentation reasonably acceptable to the Company that such person has the right to
exercise the Option. Alternatively, Participant may elect to exercise the Option by way of a
Company-sponsored program with an on-line stock broker (“the Broker”) whereby Participant
conveys Participant’s intent to exercise the Option through the Broker’s Internet site.

               4.2 Limitations on Exercise. The Option may not be exercised unless such exercise
is in compliance with all applicable federal and state securities laws, as they are in effect
on the date of exercise. The Option may not be exercised as to fewer than 100 Shares unless it
is exercised as to all Shares as to which the Option is then exercisable.

               4.3 Payment. The Exercise Agreement shall be accompanied by full payment of the
Exercise Price for the Shares being purchased in cash (by check), or where permitted by law:

	 	(a)	 	provided that a public market for the Company’s stock exists, (1) through a
“same day sale” commitment from Participant and a broker-dealer that is a member of
the National Association of Securities Dealers (a “NASD Dealer”) whereby
Participant irrevocably elects to exercise the Option and to sell a portion of the
Shares so purchased to pay for the Exercise Price and whereby the NASD Dealer
irrevocably commits upon receipt of such Shares to forward the Exercise Price
directly to the Company, or (2) through a “margin” commitment from
Participant and a NASD Dealer whereby Participant irrevocably elects to exercise the
Option and to pledge the Shares so purchased to the NASD Dealer in a margin account
as security for
a loan from the NASD Dealer in the amount of the Exercise Price, and whereby the
NASD Dealer irrevocably commits upon receipt of such Shares to forward the
Exercise Price directly to the Company; or
	 
	 	(b)	 	by any combination of the foregoing.

2

 

               4.4 Tax Withholding. Prior to the issuance of the Shares upon exercise of the
Option, Participant must pay or provide for any applicable federal or state withholding
obligations of the Company. If the Committee permits, Participant may provide for payment of
withholding taxes upon exercise of the Option by requesting that the Company retain Shares with
a Fair Market Value equal to the minimum amount of taxes required to be withheld. In such
case, the Company shall issue the net number of Shares to the Participant by deducting the
Shares retained from the Shares issuable upon exercise.

               4.5 Issuance of Shares. Provided that the Exercise Agreement and payment are in
form and substance satisfactory to counsel for the Company, the Company shall issue the Shares
registered in the name of Participant, Participant’s authorized assignee, or Participant’s
legal representative, and shall deliver certificates representing the Shares with the
appropriate legends affixed thereto.

          5. Notice of Disqualifying Disposition of ISO Shares. If the Option is an ISO,
and if Participant sells or otherwise disposes of any of the Shares acquired pursuant to the
ISO on or before the later of (1) the date two years after the Date of Grant, and (2) the date
one year after transfer of such Shares to Participant upon exercise of the Option, Participant
shall immediately notify the Company in writing of such disposition. Participant agrees that
Participant may be subject to income tax withholding by the Company on the compensation income
recognized by Participant from the early disposition by payment in cash or out of the current
wages or other compensation payable to Participant.

          6. Compliance with Laws and Regulations. The exercise of the Option and the
issuance and transfer of Shares shall be subject to compliance by the Company and Participant
with all applicable requirements of federal and state securities laws and with all applicable
requirements of any stock exchange on which the Company’s Common Stock may be listed at the
time of such issuance or transfer. Participant understands that the Company is under no
obligation to register or qualify the Shares with the Securities and Exchange Commission, any
state securities commission or any stock exchange to effect such compliance.

          7. Nontransferability of Option. The Option may not be transferred in any manner
other than by will or by the laws of descent and distribution and may be exercised during the
lifetime of Participant only by Participant. The terms of the Option shall be binding upon the
executors, administrators, successors and assigns of Participant.

          8. Tax Consequences. Set forth below is a brief summary as of the Date of Grant
of some of the United States federal and California tax consequences of exercise of the Option
and disposition of the Shares. THIS SUMMARY IS NECESSARILY INCOMPLETE, AND THE TAX LAWS AND
REGULATIONS ARE SUBJECT TO CHANGE. PARTICIPANT SHOULD CONSULT A TAX ADVISOR BEFORE EXERCISING
THE OPTION OR DISPOSING OF THE SHARES. Participants residing in other states or other countries
should contact their own tax advisors.

               8.1 Exercise of ISO. If the Option qualifies as an ISO, there will be no regular
federal or California income tax liability upon the exercise of the Option, although the
excess, if any, of the Fair Market Value of the Shares on the date of exercise over the
Exercise Price will be treated as a tax preference item for federal and state income tax
purposes and may subject the Participant to the alternative minimum tax in the year of
exercise.

               8.2 Exercise of Nonqualified Stock Option. If the Option does not qualify as an
ISO, there may be regular federal and California income tax liability upon the exercise of the
Option. Participant will be treated as having received compensation income (taxable at ordinary
income tax rates) equal to the excess, if any, of the Fair Market Value of the Shares on the
date of exercise over the Exercise Price. The Company will be required to withhold from
Participant’s compensation or collect from Participant and pay to the applicable taxing
authorities an amount equal to a percentage of this compensation income at the time of exercise.

               8.3 Disposition of Shares. If the Shares are held for more than twelve (12) months
after the date of the transfer of the Shares pursuant to the exercise of the Option (and, in
the case of an ISO, are disposed of more than two years after the Date of Grant), any gain
realized on disposition of the Shares will be treated as long term capital gain for federal and
California income tax purposes. If Shares purchased under an ISO are disposed of within one
year of exercise or within two years after the Date of Grant, any gain realized on such
disposition will be treated as compensation income (taxable at ordinary income rates) to the
extent of the excess, if

3

 

any, of the Fair Market Value of the Shares on the date of exercise
over the Exercise Price. The Company will be required to withhold from Participant’s
compensation or collect from Participant and pay to the applicable taxing authorities an amount
equal to a percentage of this compensation income at the time of exercise.

          9. Privileges of Stock Ownership. Participant shall not have any of the rights of
a shareholder with respect to any Shares until Participant exercises the Option and pays the
Exercise Price.

          10. Interpretation. All disputes regarding the interpretation of this Agreement,
the Plan or the Notice of Grant must be submitted by Participant or the Company to the
Committee for review. The resolution of such a dispute by the Committee shall be final and
binding on the Company and Participant.

          11. Entire Agreement. The Plan and the Notice of Grant are incorporated herein by
reference. This Agreement, the Plan and the Notice of Grant constitute the entire agreement of
the parties and supersede all prior undertakings and agreements with respect to the subject
matter hereof.

          12. Notices. Any notice required to be given or delivered to the Company under
the terms of this Agreement shall be in writing and addressed to the Corporate Secretary of the
Company at its principal corporate offices. Any notice required to be given or delivered to
Participant shall be in writing and addressed to Participant at the address indicated on the
Notice of Grant or to such other address as such party may designate in writing from time to
time to the Company. All notices shall be deemed to have been given or delivered upon:
personal delivery; three (3) days after deposit in the United States mail by certified or
registered mail (return receipt requested); one (1) business day after deposit with any return
receipt express courier (prepaid); or one (1) business day after transmission by facsimile or
telecopier.

          13. Successors and Assigns. The Company may assign any of its rights under this
Agreement. This Agreement shall be binding upon and inure to the benefit of the successors and
assigns of the Company. Subject to the restrictions on transfer set forth herein, this
Agreement shall be binding upon Participant and Participant’s heirs, executors, administrators,
legal representatives, successors and assigns.

          14. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of California.

          15. Acceptance. Participant hereby acknowledges receipt of a copy of the Plan,
this Agreement and the Notice of Grant. Participant has read and understands the terms and
provisions thereof, and accepts the Option subject to all the terms and conditions of the Plan,
this Agreement and the Notice of Grant. Participant acknowledges that there may be adverse tax
consequences upon exercise of the Option or disposition of the Shares and that Participant
should consult a tax adviser prior to such exercise or disposition.

****

4exv10w04

 

Exhibit 10.04

VERITAS SOFTWARE CORPORATION

1993 DIRECTORS STOCK OPTION PLAN

AS ADOPTED OCTOBER 1, 1993, AMENDED JANUARY 26, 1994, AMENDED

OCTOBER 19, 1994, AMENDED APRIL 20, 1995, AMENDED APRIL 17, 1996,

AMENDED JANUARY 12, 1997, AMENDED APRIL 15, 1999 AND AMENDED

OCTOBER 14, 1999 (EFFECTIVE JANUARY 1, 1999)

     1. PURPOSE. This Stock Option Plan (this “Plan”) is established to provide equity incentives
for nonemployee members of the Board of Directors of VERITAS Software Corporation, a corporation
organized under the laws of the State of California, any successor corporation thereto and any
corporation that assumes the Plan (the “Company”) who are described in Section 6.1 below, by
granting such persons options to purchase shares of stock of the Company.

     2. ADOPTION AND SHAREHOLDER APPROVAL. This Plan shall become effective on the date that it is
adopted by the Board of Directors (the “Board”) of the Company. This Plan shall be approved by the affirmative vote or written consent of the holders of a
majority of the outstanding shares of Common Stock of the Company, within twelve months after the
date this Plan is adopted by the Board. Upon the effective date of this Plan, options under this
Plan (“Options”) may be granted provided that, in the event that shareholder approval is not
obtained within the time period provided herein, this Plan, and all Options granted hereunder,
shall terminate. No Option that is issued as a result of any increase in the number of shares
authorized to be issued under this Plan shall be exercised prior to the time such increase has been
approved by the shareholders
of the Company and all such Options granted pursuant to such increase shall similarly terminate if
such shareholder approval is not obtained.

     3. TYPES OF OPTIONS AND SHARES. Options granted under this Plan shall be
nonqualified stock options (“NQSOs”). The shares of stock that may be purchased upon exercise of
Options granted under this Plan (the “Shares”) are shares of the Common Stock of the Company or any
successor security.

     4. NUMBER OF SHARES. The maximum number of Shares that may be issued
pursuant to Options granted under this Plan is 562,500 Shares, subject to adjustment as provided in
this Plan. If any Option is terminated for any reason without being exercised in whole or in part,
the Shares thereby released from such Option shall be available for purchase under other Options
subsequently granted under this Plan. At all times during the term of this Plan, the Company shall
reserve and keep available such number of Shares as shall be required to satisfy the requirements
of outstanding Options under this Plan. The numbers of Shares represented in this Plan are stated
as of January 1, 1999, and therefore do not reflect the two-for-one stock split announced by the
Board on June

 

 

7, 1999 and paid as a stock dividend on July 8, 1999 to stockholders of record on June 18, 1999.

     5. ADMINISTRATION. This Plan shall be administered by the Board or by a committee of not less
than two members of the Board appointed to administer this Plan (the “Committee”). As used in this Plan, references to the Committee shall mean either such
Committee or the Board if no committee has been established. The interpretation by the Committee of
any of the provisions of this Plan or any Option granted under this Plan shall be final and binding
upon the Company and all persons having an interest in any Option or any Shares purchased pursuant
to an Option.

     6. ELIGIBILITY AND AWARD FORMULA.

          6.1 ELIGIBILITY. Options may be granted only to directors of the Company who are not
employees of the Company or any Parent, Subsidiary or Affiliate of the Company, as those terms are
defined in Section 17 below (each an “Optionee”). Directors who are consultants and independent
contractors of the Company or of any Parent, Subsidiary or Affiliate of the Company are eligible to
participate in the Directors Plan.

          6.2 INITIAL GRANT. Each Optionee who is first elected or reelected to the Board after the
effective date of the Company’s registration statement (the “Registration Statement”) filed with,
and declared effective by, the Securities and Exchange Commission (the “SEC”) under the Securities
Act of 1933, as amended (the “1933 Securities Act”) on or after January 1, 1999 will automatically
be granted an option for 25,000 Shares on the later of (i) the date such Optionee is first elected
or reelected to the Board or (ii) the date his or her most recent prior option becomes fully vested
as to all Shares or terminates (whether such option was granted under this Plan, the Company’s 1993
Equity Incentive Plan or otherwise) (the “Initial Grant”). An Optionee who has received an Initial
Grant or a Succeeding Grant prior to any assumption of this Plan shall not be granted an Initial
Grant. The Board will have the discretion to increase the number of Shares subject to the Initial
Grant to 54,000 Shares without shareholder approval.

          6.3 SUCCEEDING GRANTS. On the anniversary date of his or her most recent prior option
(whether such option was granted under this Plan, the Company’s 1993 Equity Incentive Plan or
otherwise), Optionee will automatically be granted an Option for 6,500 Shares, provided that
Optionee is still a member of the Board (a “Succeeding Grant”). Notwithstanding the foregoing, an
Optionee shall not receive a Succeeding Grant earlier than the first anniversary of his or her
Initial Grant. The Board will have the discretion to increase the number of Shares subject to a
Succeeding Grant to 13,500 Shares without shareholder approval.

          6.4 MAXIMUM SHARES. The maximum number of Shares that may be issued to
any one director under this Plan is 108,000. No grant will be made, however, if such grant will
cause the number of Shares issued or subject to outstanding Options under this Plan to exceed the
number specified in Section 4 above.

 

 

     7. TERMS AND CONDITIONS OF OPTIONS. Subject to the following and to Section 6 above:

          7.1 FORM OF OPTION GRANT. Each Option granted under this Plan shall be
evidenced by a written Stock Option Grant (“Grant”) in such form (which need not be the same for
each Optionee) as the Committee shall from time to time approve, which Grant shall comply with and
be subject to the terms and conditions of this Plan.

          7.2 VESTING. The date an Optionee is first elected or reelected to the Board for the first
time, as to the Initial Grant, and the date a Succeeding Grant is granted, is referred to in this
Plan as the “Start Date” for such Option. Each Initial Grant granted prior to January 1, 1999 will
vest as to 3,375 Shares subject to it on the last day of each calendar quarter (not to exceed
13,500 Shares per year); provided that Optionee attended at least one Board meeting during such
quarter and provided further that the Board meeting Optionee attended occurred after the date of
grant. Each Initial Grant granted on or after January 1, 1999 will vest as to 521 Shares subject to
it on the last day of each calendar month (not to exceed 6,250 Shares per year). Each Succeeding
Grant granted prior to January 1, 1999 will vest as to 844 Shares subject to it on the last day of
each calendar quarter (not to exceed 3,375 Shares per year); provided that Optionee attended at
least one Board meeting during such quarter and provided further that the Board meeting Optionee
attended occurred after the date of grant. Each Succeeding Grant granted on or after January 1,
1999 will vest as to 135 Shares per calendar month (not to exceed 1,625 Shares per year). Initial
Grants granted on or after April 17, 1996 and Succeeding Grants shall be exercisable immediately
upon grant for a period of ten years. Exercised unvested Shares shall be subject to a right of
repurchase in the Company at the original purchase price that lapses as such Shares vest. Each
Option will fully vest as to any Shares that remain unvested on the day immediately preceding the
tenth anniversary of the Start Date of such Option. Each outstanding Option shall be exercisable
and vest in accordance with the Grant by which it was originally granted.

          7.3 EXERCISE PRICE. The exercise price of an Option shall be the Fair Market Value (as
defined in Section 17.4) of the Shares, at the time that the Option is granted.

          7.4 TERMINATION OF OPTION. Except as provided below in this Section, this Option shall
terminate and may not be exercised if Optionee ceases to be a member of the Board or a consultant
of the Company. The date on which Optionee ceases to be a member of the Board or a consultant of
the Company shall be referred to as the “Termination Date.”

               (a) Termination Generally. If Optionee ceases to be a member of the Board or a consultant of
the Company for any reason except death or disability, this Option, to the extent (and only to the
extent) that it would have been exercisable by Optionee on the Termination Date, may be exercised
by Optionee within six (6) months after the Termination Date, but in no event later than the
Expiration Date.

 

 

               (b) Death or Disability. If Optionee ceases to be a member of the Board or a consultant of the
Company because of the death of Optionee or the disability of Optionee within the meaning of
Section 22(e)(3) of the Internal Revenue Code of 1986, as amended, (the “Code”) this Option, to the
extent (and only to the extent) that it would have been exercisable by Optionee on the Termination
Date, may be exercised by Optionee (or Optionee’s legal representative) within twelve (12) months
after the Termination Date, but in no event later than the Expiration Date.

     8. EXERCISE OF OPTIONS.

          8.1 NOTICE. Options may be exercised only by delivery to the Company of an exercise agreement
in a form approved by the Committee, stating the number of Shares being purchased, the restrictions
imposed on the Shares and such representations and agreements regarding the Optionee’s investment
intent and access to information as may be required by the Company to comply with applicable
securities laws, together with payment in full of the exercise price for the number of Shares being
purchased.

          8.2 PAYMENT. Payment for the Shares may be made (a) in cash or by check; (b) by surrender of
shares of Common Stock of the Company that have been owned by Optionee for more than six (6) months
(and which have been paid for within the meaning of SEC Rule 144 and, if such shares were purchased
from the Company by use of a promissory note, such note has been fully paid with respect to such
shares) or were obtained by the Optionee in the open public market, having a Fair Market Value
equal to the exercise price of the Option; (c) by waiver of compensation due or accrued to Optionee
for services rendered; (d) provided that a public market for the Company’s stock exists, through a
“same day sale” commitment from Optionee and a broker-dealer that is a member of the National
Association of Securities Dealers (a “NASD Dealer”) whereby Optionee irrevocably elects to exercise
the Option and to sell a portion of the Shares so purchased to pay for the exercise price and whereby the NASD Dealer irrevocably commits upon
receipt of such Shares to forward the exercise price directly to the Company; (e) provided that a
public market for the Company’s stock exists, through a “margin” commitment from Optionee and a
NASD Dealer whereby Optionee irrevocably elects to exercise the Option and to pledge the Shares so purchased to the NASD Dealer
in a margin account as security for a loan from the NASD Dealer in the amount of the exercise
price, and whereby the NASD Dealer irrevocably commits upon receipt of such Shares to forward the
exercise price directly to the Company; or (f) by any combination of the foregoing.

          8.3 WITHHOLDING TAXES. Prior to issuance of the Shares upon exercise of
an Option, Optionee shall pay or make adequate provision for any federal or state withholding
obligations of the Company, if applicable.

          8.4 LIMITATIONS ON EXERCISE. Notwithstanding the exercise periods set
forth in the Grant, exercise of an Option shall always be subject to the following limitations:

 

 

               (a) An Option shall not be exercisable unless such exercise is in compliance with the 1933
Securities Act and all applicable state securities laws, as they are in effect on the date of
exercise.

               (b) The Committee may specify a reasonable minimum number of Shares that may be purchased on
any exercise of an Option, provided that such minimum number will not prevent Optionee from
exercising the full number of Shares as to which the Option is then exercisable.

     9. NONTRANSFERABILITY OF OPTIONS. During the lifetime of Optionee, an
Option shall be exercisable only by Optionee or by Optionee’s guardian or legal
representative, unless otherwise permitted by the Committee. No Option may be sold, pledged,
assigned, hypothecated, transferred or disposed of in any manner other than by will or by the laws
of descent and distribution.

     10. PRIVILEGES OF STOCK OWNERSHIP. No Optionee shall have any of the
rights of a shareholder with respect to any Shares subject to an Option until the Option has been
validly exercised. No adjustment shall be made for dividends or distributions or other rights for
which the record date is prior to the date of exercise, except as provided in this Plan. The
Company shall provide to each Optionee a copy of the annual financial statements of the Company, at
such time after the close of each fiscal year of the Company as they are released by the Company to
its shareholders.

     11. ADJUSTMENT OF OPTION SHARES. In the event that the number of
outstanding shares of Common Stock of the Company is changed by a stock dividend, stock split,
reverse stock split, combination, reclassification or similar change in the capital structure of
the Company without consideration, the number of Shares available under this Plan, the maximum
number of Shares that can be granted to a director and the number of Shares subject to outstanding
Options, the number of Shares vesting per quarter or per month and the exercise price per Share of
such Options shall be proportionately adjusted, subject to any required action by the Board or
shareholders of the Company and compliance with applicable securities laws; provided, however, that
no certificate or scrip representing fractional shares shall be issued upon exercise of any Option
and any resulting fractions of a Share shall be ignored; provided further, however, that in the
event that the number of shares of Common Stock of the Company is changed by a stock dividend or a
stock split without consideration, the Board will have the discretion not to proportionately adjust
the number of Shares subject to each Initial Grant and the number of Shares subject to each
Succeeding Grant, and the number of Shares to vest per month subject to such Initial Grants and
Succeeding Grants.

     12. NO OBLIGATION TO EMPLOY. Nothing in this Plan or any Option granted
under this Plan shall confer on any Optionee any right to continue as a director or a consultant of
the Company.

     13. COMPLIANCE WITH LAWS. The grant of Options and the issuance of Shares upon exercise of
any Options shall be subject to and conditioned upon compliance with

 

 

all applicable requirements of law, including without limitation compliance with the 1933
Securities Act, any required approval by the Commissioner of Corporations of the State of
California, compliance with all other applicable state securities laws and compliance with the
requirements of any stock exchange or national market system on which the Shares may be listed. The
Company shall be under no obligation to register the Shares with the Securities and Exchange
Commission or to effect compliance with the registration or qualification requirement of any state
securities laws, stock exchange or national market system.

     14. ACCELERATION OF OPTIONS BY SUCCESSORS. In the event of a dissolution or liquidation of
the Company, a merger in which the Company is not the surviving corporation, the sale of substantially all of the assets of the Company, or any other
transaction which qualifies as a “corporate transaction” under Section 424 of the Code wherein the
shareholders of the Company give up all of their equity interest in the Company (except for the
acquisition of all or substantially all of the outstanding shares of the Company) the vesting of
all options granted pursuant to the Plan will accelerate and the options will become exercisable in
full prior to the consummation of such event at such times and on such conditions as the Committee
determines.

     15. AMENDMENT OR TERMINATION OF PLAN. The Committee may at any time terminate or amend this
Plan but not the terms of any outstanding option; provided, however, that the Committee shall not,
without the approval of the shareholders of the Company, increase the total number of Shares
available under this Plan (except by operation of the provisions of Sections 4 and 11 above) or
change the class of persons eligible to receive Options. In any case, no amendment of this Plan may
adversely affect any then outstanding Options or any unexercised portions thereof without the
written consent of Optionee.

     16. TERM OF PLAN. Options may be granted pursuant to this Plan from time to time within a
period of ten (10) years from the date this Plan is adopted by the Board of Directors.

     17. CERTAIN DEFINITIONS. As used in this Plan, the following terms shall have the following
meanings:

          17.1 “Parent” means any corporation (other than the Company) in an unbroken chain of
corporations ending with the Company if, at the time of the granting of the Option, each of such
corporations other than the Company owns stock possessing 50% or more of the total combined voting
power of all classes of stock in one of the other corporations in such chain.

          17.2 “Subsidiary” means any corporation (other than the Company) in an unbroken chain of
corporations beginning with the Company if, at the time of granting of the Option, each of the
corporations other than the last corporation in the unbroken chain owns stock possessing 50% or
more of the total combined voting power of all classes of stock in one of the other corporations in
such chain.

 

 

          17.3 “Affiliate” means any corporation that directly, or indirectly through one or more
intermediaries, controls or is controlled by, or is under common control with, another corporation,
where “control” (including the terms “controlled by” and “under common control with”) means the
possession, direct or indirect, of the power to cause the direction of the management and policies
of the corporation, whether through the ownership of voting securities, by contract or otherwise.

          17.4 “Fair Market Value” shall mean the fair market value of the Shares as determined by the
Committee from time to time in good faith. If a public market exists for the Shares, the Fair
Market Value shall be the average of the last reported bid and asked prices for the common stock of
the Company on the last trading day prior to the date of determination, or, in the event the common
stock of the Company is listed on the Nasdaq National Market, the Fair Market Value shall be the
average of the high and low prices of the common stock on the option grant date as quoted on the Nasdaq National Market and
reported in The Wall Street Journal.

 

 

Exhibit A

Form of Stock Option Agreement

 

 

Grant No.:

VERITAS SOFTWARE CORPORATION

DIRECTORS NONQUALIFIED STOCK OPTION GRANT

Optionee:

Social Security Number:

Address:

Total Shares Subject to Option:

Exercise Price Per Share:

Date of Grant:

Expiration Date:

     1. Grant of Option. VERITAS Software Corporation, a Delaware corporation (the
“Company”), has granted to the optionee named above (“Optionee”) an option
(this “Option”) to purchase the total number of shares of Common Stock of the Company
set forth above (the “Shares”) at the exercise price per share set forth above (the
“Exercise Price”), subject to all of the terms and conditions of this Grant and the
Company’s 1993 Directors Stock Option Plan, as amended through January 12, 1997 (the
“Plan”). Unless otherwise
defined herein, capitalized terms used herein shall have the meanings ascribed to them in the
Plan.

     2. Exercise Period of Option. Subject to the terms and conditions of the Plan and
this Grant, this Option shall be exercisable as it vests. Subject to the terms and conditions
of the Plan and this Grant, this Option shall vest as to
           Shares subject to it on the last
day of each calendar quarter (not to exceed
                Shares per year); provided that
Optionee attended at least one Board meeting during such quarter and provided further
that the Board meeting Optionee attended occurred after the date of grant. This Option shall
be exercisable as it vests for a period of ten years and will fully vest as to any Shares that
remain unvested on the day immediately preceding the tenth anniversary of the Start Date of
such Option. This Option may not be exercised until the Plan, or in the case of Options
granted pursuant to an amendment to the number of shares that may be issued under the Plan, the
amendment has been approved by the shareholders of the Company as set forth in the Plan.

     3. Restriction on Exercise. This Option may not be exercised unless such exercise
is in compliance with the 1933 Securities Act, and all applicable state securities laws, as
they are in effect on the date of exercise, and the requirements of any stock exchange or
national market system on which the Company’s Common Stock may be listed at the time of
exercise. Optionee understands that the Company is under no obligation to register, qualify or
list the Shares with the Securities and Exchange Commission (the “SEC”), any

 

 

state
securities commission or any stock exchange or national market system to effect such
compliance.

     4. Termination of Option. Except as provided below in this Section, this Option
shall terminate and may not be exercised if Optionee ceases to be a Board Member or a
consultant of the Company. The date on which Optionee ceases to be a Board Member or a
consultant of the Company shall be referred to as the “Termination Date.”

          4.1 Termination Generally. If Optionee ceases to be a Board Member or a
consultant of the Company for any reason except death or disability, this Option, to the extent
(and only to the extent) that it would have been exercisable by Optionee on the Termination
Date, may be exercised by Optionee within six (6) months after the Termination Date, but in no
event later than the Expiration Date.

          4.2 Death or Disability. If Optionee ceases to be a Board Member or a consultant
of the Company because of the death of Optionee or the disability of Optionee within the
meaning of Section 22(e)(3) of the Code, this Option, to the extent (and only to the extent)
that it would have been exercisable by Optionee on the Termination Date, may be exercised by
Optionee (or Optionee’s legal representative) within twelve (12) months after the Termination
Date, but in no event later than the Expiration Date.

     5. Manner of Exercise.

          5.1 Exercise Agreement. This Option shall be exercisable by delivery to the
Company of an executed written Directors Stock Option Exercise Agreement in the form attached
hereto as Exhibit A, or in such other form as may be approved by the Board or the
committee thereof that administers the Plan, which shall set forth Optionee’s election to
exercise some or all of this Option, the number of Shares being purchased, any restrictions
imposed on the Shares and such other representations and agreements as may be required by the
Company to comply with applicable securities laws.

          5.2 Payment. Payment for the Shares may be made (a) in cash or by check; (b) by
surrender of shares of Common Stock of the Company that have been owned by Optionee for more
than six (6) months (and which have been paid for within the meaning of SEC Rule 144 and, if
such shares were purchased from the Company by use of a promissory note, such note has been
fully paid with respect to such shares) or were obtained by Optionee in the open public market,
having a Fair Market Value equal to the exercise price of the Option; (c) by waiver of
compensation due or accrued to Optionee for services rendered; (d) provided that a public
market for the Company’s stock exists, through a “same day sale” commitment from Optionee and a
broker-dealer that is a member of the National Association of Securities Dealers (an “NASD
Dealer”) whereby Optionee irrevocably elects to exercise the Option and to sell a portion
of the Shares so purchased to pay for the exercise price and whereby the NASD Dealer
irrevocably commits upon receipt of such Shares to forward the exercise price directly to the
Company; (e) provided that a public market for the Company’s stock exists, through a “margin”
commitment from Optionee and an NASD Dealer whereby Optionee irrevocably elects to exercise the
Option and to pledge the Shares so purchased to

-2-

 

the NASD Dealer in a margin account as security
for a loan from the NASD Dealer in the amount of the exercise price, and whereby the NASD
Dealer irrevocably commits upon receipt of such Shares to forward the exercise price directly
to the Company; or (f) by any combination of the foregoing.

          5.3 Withholding Taxes. Prior to the issuance of the Shares upon exercise of this
Option, Optionee shall pay or make adequate provision for any applicable federal or state
withholding obligations of the Company.

          5.4 Issuance of Shares. Provided that such notice and payment are in form and
substance satisfactory to counsel for the Company, the Company shall cause the Shares to be
issued in the name of Optionee or Optionee’s legal representative.

     6. Nontransferability of Option. During the lifetime of Optionee, an Option shall
be exercisable only by Optionee or by the Optionee’s guardian or legal representative, unless
otherwise permitted by the Committee. No Option may be sold, pledged, assigned, hypothecated,
transferred or disposed of in any manner other than by will or by the laws of descent and
distribution.

     7. Interpretation. Any dispute regarding the interpretation of this Grant shall
be submitted by Optionee or the Company to the Company’s Board of Directors or the committee
thereof that administers the Plan, which shall review such dispute at its next regular meeting.
The resolution of such a dispute by the Board or committee shall be final and binding on the
Company and on Optionee. Nothing in the Plan or this Grant shall confer on Optionee any right
to continue as a Board Member, employee, officer or consultant of the Company.

     8. Entire Agreement. The Plan and the Directors Stock Option Exercise Agreement
are incorporated herein by this reference. This Grant, the Plan and the Directors Stock Option
Exercise Agreement constitute the entire agreement of the parties hereto and supersede all
prior undertakings and agreements with respect to the subject matter hereof.

	 	 	 	 	 
	 	 	VERITAS SOFTWARE CORPORATION
	 
	 	 	 	 
	 

	 	By:
	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	Name:
	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	Title:
	 	 
	 

	 	 	 	 

ACCEPTANCE

-3-

 

     Optionee hereby acknowledges receipt of a copy of the Plan, represents that Optionee has
read and understands the terms and provisions thereof, and accepts this Option subject to all
the terms and conditions of the Plan and this Grant. Optionee acknowledges that there may be
adverse tax consequences upon exercise of this Option or disposition of the Shares and that
Optionee should consult a qualified tax advisor prior to such exercise or disposition.

	 	 	 
	 

	 	 
	 

	 	 
	Optionee

	 	Date

-4-

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