Document:

2004 Equity Incentive Plan

 Exhibit 10.17 
  
 TRIKON TECHNOLOGIES, INC. 
  
 2004 EQUITY INCENTIVE PLAN 

 TABLE OF CONTENTS 
  

					
	 	  	 	  	Page

	 SECTION 1 BACKGROUND AND PURPOSE
	  	1
			
	             1.1
	  	Background and Effective Date	  	1
	             1.2
	  	Purpose of the Plan	  	1
		
	 SECTION 2 DEFINITIONS
	  	1
			
	             2.1
	  	“1934 Act”	  	1
	             2.2
	  	“Affiliate”	  	1
	             2.3
	  	“Award”	  	1
	             2.4
	  	“Award Agreement”	  	1
	             2.5
	  	“Board” or “Board of Directors”	  	1
	             2.6
	  	“Cash Flow”	  	1
	             2.7
	  	“Code”	  	1
	             2.8
	  	“Committee”	  	1
	             2.9
	  	“Company”	  	2
	             2.10
	  	“Consultant”	  	2
	             2.11
	  	“Director”	  	2
	             2.12
	  	“Disability”	  	2
	             2.13
	  	“Earnings Per Share”	  	2
	             2.14
	  	“Employee”	  	2
	             2.15
	  	“Exchange Program”	  	2
	             2.16
	  	“Exercise Price”	  	2
	             2.17
	  	“Fair Market Value”	  	2
	             2.18
	  	“Fiscal Year”	  	2
	             2.19
	  	“Grant Date”	  	2
	             2.20
	  	“Incentive Stock Option”	  	2
	             2.21
	  	“Income from Operations”	  	2
	             2.22
	  	“Nonemployee Director”	  	2
	             2.23
	  	“Nonqualified Stock Option”	  	2
	             2.24
	  	“Option”	  	3
	             2.25
	  	“Participant”	  	3
	             2.26
	  	“Performance Goals”	  	3
	             2.27
	  	“Performance Period”	  	3
	             2.28
	  	“Period of Restriction”	  	3
	             2.29
	  	“Plan”	  	3
	             2.30
	  	“Profit After Tax”	  	3
	             2.31
	  	“Profit Before Tax”	  	3
	             2.32
	  	“Restricted Stock”	  	3
	             2.33
	  	“Retirement”	  	3
	             2.34
	  	“Return on Sales”	  	3
	             2.35
	  	“Revenue”	  	3
	             2.36
	  	“Rule 16b-3”	  	3
	             2.37
	  	“Section 16 Person”	  	3
	             2.38
	  	“Shares”	  	4
	             2.39
	  	“Subsidiary”	  	4
	             2.40
	  	“Termination of Service”	  	4
	             2.41
	  	“Total Shareholder Return”	  	4

  

 i 

 TABLE OF CONTENTS 
 (continued) 
  

					
	 	  	 	  	Page

	 SECTION 3 ADMINISTRATION
	  	4
			
	             3.1
	  	The Committee	  	4
	             3.2
	  	Authority of the Committee	  	4
	             3.3
	  	Delegation by the Committee	  	4
	             3.4
	  	Decisions Binding	  	4
		
	 SECTION 4 SHARES SUBJECT TO THE PLAN
	  	5
			
	             4.1
	  	Number of Shares	  	5
	             4.2
	  	Lapsed Awards	  	5
	             4.3
	  	Adjustments in Awards and Authorized Shares	  	5
		
	 SECTION 5 STOCK OPTIONS
	  	5
			
	             5.1
	  	Grant of Options	  	5
	             5.2
	  	Award Agreement	  	5
	             5.3
	  	Exercise Price	  	5
	             5.4
	  	Expiration of Options	  	7
	             5.5
	  	Exercisability of Options	  	6
	             5.6
	  	Payment	  	6
	             5.7
	  	Restrictions on Share Transferability	  	6
	             5.8
	  	Certain Additional Provisions for Incentive Stock Options	  	6
		
	 SECTION 6 RESTRICTED STOCK
	  	7
			
	             6.1
	  	Grant of Restricted Stock	  	7
	             6.2
	  	Restricted Stock Agreement	  	7
	             6.3
	  	Transferability	  	7
	             6.4
	  	Other Restrictions	  	7
	             6.5
	  	Removal of Restrictions	  	8
	             6.6
	  	Voting Rights	  	8
	             6.7
	  	Dividends and Other Distributions	  	8
	             6.8
	  	Return of Restricted Stock to Company	  	8
		
	 SECTION 7 NONEMPLOYEE DIRECTOR OPTIONS
	  	8
			
	             7.1
	  	Granting of Options	  	8
	             7.2
	  	Terms of Options	  	8
		
	 SECTION 8 MISCELLANEOUS
	  	9
			
	             8.1
	  	Deferrals	  	9
	             8.2
	  	No Effect on Employment or Service	  	9
	             8.3
	  	Participation	  	9
	             8.4
	  	Indemnification	  	9
	             8.5
	  	Successors	  	10
	             8.6
	  	Limited Transferability of Awards	  	10
	             8.7
	  	Beneficiary Designations	  	10
	             8.8
	  	No Rights as Stockholder	  	10

  

 ii 

 TABLE OF CONTENTS 
 (continued) 
  

					
	 	  	 	  	Page

	 SECTION 9 AMENDMENT, TERMINATION, AND DURATION
	  	10
			
	             9.1
	  	Amendment, Suspension, or Termination	  	10
	             9.2
	  	Duration of the Plan	  	10
		
	 SECTION 10 TAX WITHHOLDING
	  	11
			
	             10.1
	  	Withholding Requirements	  	11
	             10.2
	  	Withholding Arrangements	  	11
		
	 SECTION 11 LEGAL CONSTRUCTION
	  	11
			
	             11.1
	  	Gender and Number	  	11
	             11.2
	  	Severability	  	11
	             11.3
	  	Requirements of Law	  	11
	             11.4
	  	Securities Law Compliance	  	11
	             11.5
	  	Governing Law	  	11
	             11.6
	  	Captions	  	11
		
	 EXECUTION
	  	11

  

 iii 

 TRIKON TECHNOLOGIES, INC. 
 2004 EQUITY INCENTIVE PLAN 
  
 
SECTION 1 
 BACKGROUND AND PURPOSE 
  
 
1.1 Background and Effective Date. The Plan permits the grant of Nonqualified Stock Options, Incentive Stock Options, and Restricted Stock. The Plan is effective as of July 26, 2004, subject to ratification by an
affirmative vote of the holders of the Shares in accordance with applicable laws. 
  
 
1.2 Purpose of the Plan. The Plan is intended to attract, motivate, and retain (a) employees of the Company and its Affiliates and (b) consultants who provide significant services to the Company and its
Affiliates, and (c) directors of the Company who are employees of neither the Company nor of any Affiliate. The Plan also is designed to encourage stock ownership by Participants, thereby aligning their interests with those of the
Company’s shareholders and to permit the payment of compensation that qualifies as performance-based compensation under Section 162(m) of the Code. 
  
 
SECTION 2 
 DEFINITIONS 
  
 The following words and phrases shall have the following meanings unless a different meaning is plainly required by the
context: 
  
 
2.1 “1934 Act” means the Securities Exchange Act of 1934, as amended. Reference to a specific section of the 1934 Act or regulation thereunder shall include such section or regulation, any valid
regulation promulgated under such section, and any comparable provision of any future legislation or regulation amending, supplementing or superseding such section or regulation. 
  
 
2.2 “Affiliate” means any corporation or any other entity (including, but not limited to, partnerships and joint ventures) controlling, controlled by, or under common control with the Company.

  
 
2.3 “Award” means, individually or collectively, a grant under the Plan of Nonqualified Stock Options, Incentive Stock Options and/or Restricted Stock. 
  
 
2.4 “Award Agreement” means the written agreement setting forth the terms and conditions applicable to each Award granted under the Plan. 
  
 
2.5 “Board” or “Board of Directors” means the Board of Directors of the Company. 
  
 
2.6 “Cash Flow” means as to any Performance Period, the Company’s or a business unit’s sum of Profit After Tax plus depreciation and amortization less capital expenditures plus changes in
working capital comprised of accounts receivable, inventories, other current assets, trade accounts payable, accrued expenses, product warranty, advance payments from customers and long-term accrued expenses, determined in accordance with generally
acceptable accounting principles. 
  
 
2.7 “Code” means the Internal Revenue Code of 1986, as amended. Reference to a specific section of the Code or regulation thereunder shall include such section or regulation, any valid regulation
promulgated under such section, and any comparable provision of any future legislation or regulation amending, supplementing or superseding such section or regulation. 
  
 
2.8 “Committee” means the committee appointed by the Board (pursuant to Section 3.1) to administer the Plan, or, if no committee is so appointed, the Board. 
  

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2.9 “Company” means Trikon Technologies, Inc., a Delaware corporation, or any successor thereto. 
  
 
2.10 “Consultant” means any consultant, independent contractor or other person who provides significant services to the Company or its Affiliates, but who is neither an Employee nor a Director.

  
 
2.11 “Director” means any individual who is a member of the Board of Directors of the Company. 
  
 
2.12 “Disability” means a permanent and total disability within the meaning of Section 22(e)(3) of the Code, provided that in the case of Awards other than Incentive Stock Options, the Committee in its
discretion may determine whether a permanent and total disability exists in accordance with uniform and nondiscriminatory standards adopted by the Committee from time to time. 
  
 
2.13 “Earnings Per Share” means as to any Performance Period, the Company’s or a business unit’s Profit After Tax, divided by a weighted average number of all classes of common shares
outstanding and dilutive common equivalent shares deemed outstanding, determined in accordance with generally accepted accounting principles. 
  
 
2.14 “Employee” means any employee of the Company or of an Affiliate, whether such employee is so employed at the time the Plan is adopted or becomes so employed subsequent to the adoption of the Plan.

  
 
2.15 “Exchange Program” means a program established by the Committee under which outstanding Awards are amended to provide for a lower Exercise Price or surrendered or cancelled in exchange for (a)
Awards of the same type (which may have lower Exercise Prices or purchase prices), (b) a different type of Award, (c) cash, or (d) a combination of (a), (b) and/or (c). 
  
 
2.16 “Exercise Price” means the price at which a Share may be purchased by a Participant pursuant to the exercise of an Option. 
  
 
2.17 “Fair Market Value” means the closing price per Share on the Nasdaq National Market on the relevant date, or if there were no sales on such date, the arithmetic mean of the closing price per Share
on the nearest day before and the nearest day after the relevant date, as determined by the Committee. In the absence of an established market for the Shares, fair market value shall be determined in good faith by the Committee. Notwithstanding the
preceding, for federal, state, and local income tax reporting purposes, fair market value shall be determined by the Committee (or its delegate) in accordance with uniform and nondiscriminatory standards adopted by it from time to time. 

 
 
2.18 “Fiscal Year” means the fiscal year of the Company. 
  
 
2.19 “Grant Date” means, with respect to an Award, the date that the Award was granted. The Grant Date of an Award shall not be earlier than the date the Award is approved by the Committee. 

 
 
2.20 “Incentive Stock Option” means an Option to purchase Shares that is designated as an Incentive Stock Option and is intended to meet the requirements of Section 422 of the Code. 
  
 
2.21 “Income from Operations” means as to any Performance Period, the Company’s or a business unit’s income from operations, determined in accordance with generally accepted accounting
principles. 
  
 
2.22 “Nonemployee Director” means a Director who is an employee of neither the Company nor of any Affiliate. 
  
 
2.23 “Nonqualified Stock Option” means an option to purchase Shares that is not intended to be an Incentive Stock Option. 
  

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2.24 “Option” means an Incentive Stock Option or a Nonqualified Stock Option. 
  
 
2.25 “Participant” means an Employee, Consultant or Nonemployee Director who has an outstanding Award. 
  
 
2.26 “Performance Goals” means the goal(s) (or combined goal(s)) determined by the Committee (in its discretion) to be applicable to a Participant with respect to an Award. As determined by the
Committee, the Performance Goals applicable to an Award may provide for a targeted level or levels of achievement using one or more of the following measures: (a) Cash Flow, (b) Earnings per Share, (c) Income from Operations, (d) Profit After Tax,
and (e) Profit Before Tax, (f) Return on Sales, (g) Revenue and (h) Total Shareholder Return. The Performance Goals may differ from Participant to Participant and from Award to Award. Any criteria used may be measured, as applicable, (i) in absolute
terms, (ii) in relative terms (including, but not limited to, passage of time and/or against another company or companies), (iii) on a per-share basis, (iv) against the performance of the Company as a whole or of a particular audio/visual product or
software product of the Company or any other Company product related to such products, and/or (v) on a pre-tax or after-tax basis. Prior to the beginning of the applicable Performance Period, the Committee shall determine whether any significant
element(s) shall be included in or excluded from the calculation of any Performance Goal with respect to any Participants. 
  
 
2.27 “Performance Period” means any Fiscal Year or such longer period as determined by the Committee in its sole discretion. 
  
 
2.28 “Period of Restriction” means the period during which the transfer of Shares of Restricted Stock are subject to restrictions and therefore, the Shares are subject to a substantial risk of
forfeiture. As provided in Section 6, such restrictions may be based on the passage of time, the achievement of target levels of performance, or the occurrence of other events or conditions, as determined by the Committee, in its discretion.

  
 
2.29 “Plan” means the Trikon Technologies, Inc. Corporation 2004 Equity Incentive Plan, as set forth in this instrument and as hereafter amended from time to time. 
  
 
2.30 “Profit After Tax” means as to any Performance Period, the Company’s or a business unit’s income after taxes, determined in accordance with generally accepted accounting principles.

  
 
2.31 “Profit Before Tax” means as to any Performance Period, the Company’s or a business unit’s income before taxes, determined in accordance with generally accepted accounting principles.

  
 
2.32 “Restricted Stock” means an Award granted to a Participant pursuant to Section 6. 
  
 
2.33 “Retirement” means a Termination of Service occurring on or after the earlier of (a) age sixty-five (65), or (b) age fifty-five (55) and the completion of ten (10) years of service with the Company
or an Affiliate. 
  
 
2.34 “Return on Sales” means as to any Performance Period, the percentage equal to the Company’s or a business unit’s Profit After Tax, divided by the Company’s or the business
unit’s, as applicable, Revenue, determined in accordance with generally accepted accounting principles. 
  
 
2.35 “Revenue” means as to any Performance Period, the Company’s or business unit’s net sales, determined in accordance with generally accepted accounting principles. 
  
 
2.36 “Rule 16b-3” means Rule 16b-3 promulgated under the 1934 Act, and any future regulation amending, supplementing or superseding such regulation. 
  
 
2.37 “Section 16 Person” means a person who, with respect to the Shares, is subject to Section 16 of the 1934 Act. 
  

 3 

 
2.38 “Shares” means the shares of common stock of the Company. 
  
 
2.39 “Subsidiary” means any corporation in an unbroken chain of corporations beginning with the Company as the corporation at the top of the chain, but only if each of the corporations below the Company
other than the last corporation in the unbroken chain then owns stock possessing fifty percent (50%) or more of the total combined voting power of all classes of stock in one of the other corporations in such chain. 
  
 
2.40 “Termination of Service” means (a) in the case of an Employee, a cessation of the employee-employer relationship between the Employee and the Company or an Affiliate for any reason, including, but
not by way of limitation, a termination by resignation, discharge, death, Disability, Retirement, or the disaffiliation of an Affiliate, but excluding any such termination where there is a simultaneous reemployment by the Company or an Affiliate;
and (b) in the case of a Consultant, a cessation of the service relationship between the Consultant and the Company or an Affiliate for any reason, including, but not by way of limitation, a termination by resignation, discharge, death, Disability,
or the disaffiliation of an Affiliate, but excluding any such termination where there is a simultaneous re-engagement of the consultant by the Company or an Affiliate; and (c) in the case of a Nonemployee Director, a cessation of the Director’s
service on the Board for any reason, including, but not by way of limitation, a termination by resignation, death, Disability, Retirement or non-reelection to the Board. 
  
 
2.41 “Total Shareholder Return” means as to any Performance Period, the total return (change in share price plus reinvestment of any dividends) of a Share. 
  
 
SECTION 3 
 ADMINISTRATION 
  
 
3.1 The Committee. The Plan shall be administered by the Committee (and/or the Board, as determined by the Board). The Committee shall consist of not less than two (2) Directors who shall be appointed from time
to time by, and shall serve at the pleasure of, the Board of Directors. Unless determined otherwise by the Board, the Committee shall be comprised solely of Directors who both are (a) “non-employee directors” under- Rule 16b-3, and (b)
”outside directors” under Section 162(m) of the Code.  
  
 
3.2 Authority of the Committee. It shall be the duty of the Committee to administer the Plan in accordance with the Plan’s provisions. The Committee shall have all powers and discretion necessary or
appropriate to administer the Plan and to control its operation, including, but not limited to, the power to (a) determine which Employees, Directors and Consultants shall be granted Awards, (b) prescribe the terms and conditions of the Awards, (c)
interpret the Plan and the Awards, (d) adopt such procedures and subplans as are necessary or appropriate to permit participation in the Plan by Employees, Consultants and Directors who are foreign nationals or employed outside of the United States,
(e) adopt rules for the administration, interpretation and application of the Plan as are consistent therewith, (f) interpret, amend or revoke any such rules, and (g) effect, with the approval of the stockholders, at any time and from time to time,
an Exchange Program. 
  
 
3.3 Delegation by the Committee. The Committee, in its sole discretion and on such terms and conditions as it may provide, may delegate all or any part of its authority and powers under the Plan to one or more
Directors or officers of the Company; provided, however, that the Committee may not delegate its authority and powers (a) with respect to Section 16 Persons, or (b) in any way which would jeopardize the Plan’s qualification under Section
162(m) of the Code or Rule 16b-3. 
  
 
3.4 Decisions Binding. All determinations and decisions made by the Committee, the Board, and any delegate of the Committee pursuant to the provisions of the Plan shall be final, conclusive, and binding on all
persons, and shall be given the maximum deference permitted by law. 
  

 4 

 
SECTION 4 
 SHARES SUBJECT TO THE PLAN 
  
 
4.1 Number of Shares. Subject to adjustment as provided in Section 4.3, the total number of Shares available for grant under the Plan shall not exceed 1,300,000. Shares granted under the Plan may be either
authorized but unissued Shares or treasury Shares. 
  
 
4.2 Lapsed Awards. If an Award is settled in cash or is cancelled, terminates, expires, or lapses for any reason, any Shares subject to such Award again shall be available to be the subject of an Award, except as
determined by the Committee.  
  
 
4.3 Adjustments in Awards and Authorized Shares. In the event that any dividend or other distribution (whether in the form of cash, Shares, other securities, or other property), recapitalization, stock split,
reverse stock split, reorganization, merger, consolidation, split-up, spin-off, combination, repurchase, or exchange of Shares or other securities of the Company, or other change in the corporate structure of the Company affecting the Shares occurs
such that an adjustment is determined by the Committee (in its sole discretion) to be appropriate in order to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under the Plan, then the Committee
shall, in such manner as it may deem equitable, adjust the number and class of Shares that may be issued under the Plan, the number, class, and price of Shares subject to outstanding Awards and the numerical limits of Sections 5.1, 6.1 and 7.1.
Notwithstanding the preceding, the number of Shares subject to any Award always shall be a whole number. 
  
 
SECTION 5 
 STOCK OPTIONS 
  
 
5.1 Grant of Options. Subject to the terms and provisions of the Plan, Options may be granted to Employees, Directors and Consultants at any time and from time to time as determined by the Committee in its sole
discretion. The Committee, in its sole discretion, shall determine the number of Shares subject to each Option, provided that during any Fiscal Year, no Participant shall be granted Options covering more than 300,000 Shares. The Committee may grant
Incentive Stock Options, Nonqualified Stock Options, or a combination thereof. 
  
 
5.2 Award Agreement. Each Option shall be evidenced by an Award Agreement that shall specify the Exercise Price, the expiration date of the Option, the number of Shares to which the Option pertains, any
conditions to the exercise of the Option, and such other terms and conditions as the Committee, in its discretion, shall determine. The Award Agreement shall also specify whether the Option is intended to be an Incentive Stock Option or a
Nonqualified Stock Option. 
  
 
5.3 Exercise Price. Subject to the provisions of this Section 5.3, the Exercise Price for each Option shall be determined by the Committee in its sole discretion. 
  
 5.3.1 Nonqualified Stock Options. In the case of a
Nonqualified Stock Option, the Exercise Price shall be not less than one hundred percent (100%) of the Fair Market Value of a Share on the Grant Date. 
  
 5.3.2 Incentive Stock Options. In the case of an Incentive Stock Option, the Exercise Price shall be not less than one hundred
percent (100%) of the Fair Market Value of a Share on the Grant Date; provided, however, that if on the Grant Date, the Employee (together with persons whose stock ownership is attributed to the Employee pursuant to Section 424(d) of the Code) owns
stock possessing more than 10% of the total combined voting power of all classes of stock of the Company or any of its Subsidiaries, the Exercise Price shall be not less than one hundred and ten percent (110%) of the Fair Market Value of a Share on
the Grant Date. 
  
 5.3.3 Substitute
Options. Notwithstanding the provisions of Sections 5.3.1 and 5.3.2, in the event that the Company or an Affiliate consummates a transaction described in Section 424(a) of the Code (e.g., the 

  

 5 

 
acquisition of property or stock from an unrelated corporation), persons who become Employees, Consultants or Directors on account of such transaction may be
granted Options in substitution for options granted by their former employer. If such substitute Options are granted, the Committee, in its sole discretion and consistent with Section 424(a) of the Code, may determine that such substitute Options
shall have an exercise price less than one hundred percent (100%) of the Fair Market Value of the Shares on the Grant Date. 
  
 
5.4 Expiration of Options 
  
 5.4.1 Expiration Dates. Each Option shall terminate no later than the first to occur of the following events: 
  
 (a) The date for termination of the Option set forth in the written Award Agreement; or 
 (b) If no date for the termination of the Option is set forth in the written Award Agreement (other than reference to Section 5.4.1(c)),
the expiration of three (3) months from the date of the Participant’s Termination of Service for any reason; or 
  
 (c) The expiration of ten (10) years from the Grant Date. 
  
 5.4.2 Death of Participant. Notwithstanding Section 5.4.1, if a Participant dies prior to the
expiration of his or her Options, the Committee, in its discretion, may provide that his or her Options shall be exercisable for up to twelve (12) months after the date of death. 
  
 5.4.3 Committee Discretion. Subject to the limits of Sections 5.4.1 and 5.4.2, the Committee, in its
sole discretion, (a) shall provide in each Award Agreement when each Option expires and becomes unexercisable, and (b) may, after an Option is granted, extend the maximum term of the Option (subject to Section 5.8.4 regarding Incentive Stock
Options). 
  
 
5.5 Exercisability of Options. Options granted under the Plan shall be exercisable at such times and be subject to such restrictions and conditions as the Committee shall determine in its sole discretion. After
an Option is granted, the Committee, in its sole discretion, may accelerate the exercisability of the Option. 
  
 
5.6 Payment. Options shall be exercised by the Participant’s delivery of a written notice of exercise to the Corporate Secretary of the Company (or its designee), setting forth the number of Shares with
respect to which the Option is to be exercised, accompanied by full payment for the Shares. The notice shall be given in the form and manner specified by the Company from time to time. 
  
 Upon the exercise of any Option, the Exercise Price shall be payable to the Company in full in cash or its equivalent. The
Committee, in its sole discretion, also may permit exercise (a) by tendering previously acquired Shares having an aggregate Fair Market Value at the time of exercise equal to the total Exercise Price, or (b) by any other means which the Committee,
in its sole discretion, determines to both provide legal consideration for the Shares, and to be consistent with the purposes of the Plan. As soon as practicable after receipt of a written notification of exercise satisfactory to the Company and
full payment for the Shares purchased, the Company shall deliver to the Participant (or the Participant’s designated broker), Share certificates (which may be in book entry form) representing such Shares. 
  
 
5.7 Restrictions on Share Transferability. The Committee may impose such restrictions on any Shares acquired pursuant to the exercise of an Option as it may deem advisable, including, but not limited to,
restrictions related to applicable federal securities laws, the requirements of any national securities exchange or system upon which Shares are then listed or traded, or any blue sky or state securities laws. 
  
 
5.8 Certain Additional Provisions for Incentive Stock Options. 
  
 5.8.1 Exercisability. The aggregate Fair Market Value (determined on the Grant Date(s)) of the Shares with respect to which
Incentive Stock Options are exercisable for the first time by any Employee during any calendar year (under all plans of the Company and its Subsidiaries) shall not exceed $100,000. 
  

 6 

 5.8.2 Termination of Service. No Incentive Stock Option may be exercised more than
three (3) months after the Participant’s Termination of Service for any reason other than Disability or death, unless (a) the Participant dies during such three-month period, and/or (b) the Award Agreement or the Committee permits later
exercise (in which case the Option instead may be deemed to be a Nonqualified Stock Option). No Incentive Stock Option may be exercised more than one (1) year after the Participant’s Termination of Service on account of Disability, unless (a)
the Participant dies during such one year period, and/or (b) the Award Agreement or the Committee permit later exercise (in which case the Option instead may be deemed to be a Nonqualified Stock Option). 
  
 5.8.3 Employees Only. Incentive Stock Options may be
granted only to persons who are employees of the Company or a Subsidiary on the Grant Date. 
  
 5.8.4 Expiration. No Incentive Stock Option may be exercised after the expiration of ten (10) years from the Grant Date; provided,
however, that if the Option is granted to an Employee who, together with persons whose stock ownership is attributed to the Employee pursuant to Section 424(d) of the Code, owns stock possessing more than 10% of the total combined voting power of
all classes of the stock of the Company or any of its Subsidiaries, the Option may not be exercised after the expiration of five (5) years from the Grant Date. 
  

SECTION 6 
 RESTRICTED STOCK 
  
 
6.1 Grant of Restricted Stock. Subject to the terms and provisions of the Plan, the Committee, at any time and from time to time, may grant Shares of Restricted Stock to Employees and Consultants in such amounts
as the Committee, in its sole discretion, shall determine. The Committee, in its sole discretion, shall determine the number of Shares to be granted to each Participant as Restricted Stock, provided that during any Fiscal Year, no Participant shall
receive more than 100,000 shares of Restricted Stock.  
  
 
6.2 Restricted Stock Agreement. Each Award of Restricted Stock shall be evidenced by an Award Agreement that shall specify the Period of Restriction, the number of Shares granted, and such other terms and
conditions as the Committee, in its sole discretion, shall determine. Unless the Committee determines otherwise, Shares of Restricted Stock shall be held by the Company as escrow agent until the restrictions on such Shares have lapsed. 

 
 
6.3 Transferability. Except as provided in this Section 6, Shares of Restricted Stock may not be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated until the end of the applicable Period
of Restriction. 
  
 
6.4 Other Restrictions. The Committee, in its sole discretion, may impose such other restrictions on Shares of Restricted Stock as it may deem advisable or appropriate, in accordance with this Section 6.4.

  
 6.4.1 General Restrictions. The
Committee may set restrictions based upon continued employment or service with the Company and its Affiliates, the achievement of specific performance objectives (Company-wide, divisional, or individual), applicable federal or state securities laws,
or any other basis determined by the Committee in its discretion. 
  
 6.4.2 Section 162(m) Performance Restrictions. For purposes of qualifying grants of Restricted Stock as “performance-based compensation” under Section 162(m) of the Code, the Committee, in its
discretion, may set restrictions based upon the achievement of Performance Goals. The Performance Goals shall be set by the Committee on or before the latest date permissible to enable the Restricted Stock to qualify as “performance-based
compensation” under Section 162(m) of the Code. In granting Restricted Stock that is intended to qualify under Section 162(m) of the Code, the Committee shall follow any procedures determined by it from time to time to be necessary or
appropriate to ensure qualification of the Restricted Stock under Section 162(m) of the Code (e.g., in determining the Performance Goals). 
  

 7 

 6.4.3 Legend on Certificates. The Committee, in its discretion, may legend the
certificates representing Restricted Stock to give appropriate notice of such restrictions. 
  
 
6.5 Removal of Restrictions. Except as otherwise provided in this Section 6, Shares of Restricted Stock covered by each Restricted Stock grant made under the Plan shall be released from escrow as soon as
practicable after the last day of the Period of Restriction. The Committee, in its discretion, may accelerate the time at which any restrictions shall lapse or be removed. After the restrictions have lapsed, the Participant shall be entitled to have
any legend or legends under Section 6.4.3 removed from his or her Share certificate, and the Shares shall be freely transferable by the Participant. The Committee (in its discretion) may establish procedures regarding the release of Shares from
escrow and the removal of legends, as necessary or appropriate to minimize administrative burdens on the Company. 
  
 
6.6 Voting Rights. During the Period of Restriction, Participants holding Shares of Restricted Stock granted hereunder may exercise full voting rights with respect to those Shares, unless the Committee determines
otherwise. 
  
 
6.7 Dividends and Other Distributions. During the Period of Restriction, Participants holding Shares of Restricted Stock shall be entitled to receive all dividends and other distributions paid with respect to
such Shares unless otherwise provided in the Award Agreement. If any such dividends or distributions are paid in Shares, the Shares shall be subject to the same restrictions on transferability and forfeitability as the Shares of Restricted Stock
with respect to which they were paid, unless otherwise provided in the Award Agreement. 
  
 
6.8 Return of Restricted Stock to Company. On the date set forth in the Award Agreement, the Restricted Stock for which restrictions have not lapsed shall revert to the Company and again shall become available
for grant under the Plan. 
  
 
SECTION 7 
 NONEMPLOYEE DIRECTOR OPTIONS 
  
 The provisions of this Section 7 are applicable only to Options granted to
Nonemployee Directors. 
  
 
7.1 Granting of Options. 
  
 7.1.1 Initial Grants. Each Nonemployee Director who first becomes a Nonemployee Director on or after the effective date of this Plan and who has not previously been an Employee, automatically shall receive, as
of the date that the individual first is appointed or elected as a Nonemployee Director, an Option to purchase 20,000 Shares. 
  
 7.1.2 Ongoing Grants. On the date of each annual meeting of the Company’s stockholders, each Nonemployee Director who both (a)
is a Nonemployee Director on the date of the annual meeting of the Company’s stockholders for the relevant year, and (b) has served as a Nonemployee Director for the previous six months, automatically shall receive an Option to purchase 8,000
Shares; provided, however, that for the Director then serving as the Chairman of the Board, such Option shall be to purchase 12,000 Shares. 
  
 
7.2 Terms of Options. 
  
 7.2.1 Option Agreement. Each Option granted pursuant to this Section 7 shall be evidenced by a written Award Agreement between the Participant and the Company. 
  
 7.2.2 Exercise Price. The Exercise Price for the
Shares subject to each Option granted pursuant to this Section 7 shall be 100% of the Fair Market Value of such Shares on the Grant Date. 
  
 7.2.3 Exercisability.  
  
 (a) Each Option granted pursuant to Section 7.1.1 shall become exercisable as to twenty-five percent (25%) of the Shares on each annual
anniversary of the Grant Date. 
  

 8 

 (b) Each Option granted pursuant to Section 7.1.2 shall become exercisable as to one
hundred percent (100%) of the Shares on the earlier of the first anniversary of the Grant Date and the date of the first annual meeting of the stockholders of the Company that takes place after the Grant Date. 
  
 Notwithstanding the preceding, once a Participant ceases to be a Director, his or her Options
which are not then exercisable shall never become exercisable and shall be immediately forfeited, except to the limited extent provided in the Section 7.2.5. Shares subject to forfeited Options shall revert to the Company and again shall become
available for grant under the Plan. 
  
 7.2.4
Expiration of Options. Each Option granted pursuant to this Section 7 shall terminate upon the first to occur of the following events: 
  
 (a) The expiration of ten (10) years from the Grant Date; or 
  
 (b) The expiration of twelve (12) months from the date of the Participant’s Termination of Service for
any reason, including the Participant’s death, Disability or Retirement; or 
  
 7.2.5 Death of Participant. Notwithstanding the provisions of Section 7.2.4, if a Participant dies prior to the expiration of his
or her Options in accordance with Section 7.2.4, then (a) one hundred percent (100%) of the Shares covered by his or her Options shall immediately become one hundred percent (100%) exercisable, and (b) his or her Options shall terminate twelve (12)
months after the date of his or her death. 
  
 7.2.6 Not Incentive Stock Options. Options granted pursuant to this Section 7 shall not be designated as Incentive Stock Options. 
  
 7.2.7 Amendment. Notwithstanding anything herein to the contrary, the Board in its discretion may increase or decrease the number
of Shares subject to future grants of Options granted pursuant to Sections 7.1.1 and 7.1.2. 
  
 7.2.8 Other Terms. All provisions of the Plan not inconsistent with this Section 7 shall apply to Options granted to Nonemployee
Directors pursuant to this Section 7. 
  
 
SECTION 8 
 MISCELLANEOUS 
  
 
8.1 Deferrals. The Committee, in its sole discretion, may permit a Participant to defer receipt of the payment of cash or the delivery of Shares that would otherwise be due to such Participant under an Award. Any
such deferral elections shall be subject to such rules and procedures as shall be determined by the Committee in its sole discretion. 
  
 
8.2 No Effect on Employment or Service. Nothing in the Plan shall interfere with or limit in any way the right of the Company to terminate any Participant’s employment or service at any time, with or without
cause. For purposes of the Plan, transfer of employment of a Participant between the Company and any one of its Affiliates (or between Affiliates) shall not be deemed a Termination of Service. Employment with the Company and its Affiliates is on an
at-will basis only. 
  
 
8.3 Participation. No Employee, Director or Consultant shall have the right to be selected to receive an Award under this Plan, or, having been so selected, to be selected to receive a future Award. 

 
 
8.4 Indemnification. Each person who is or shall have been a member of the Committee, or of the Board, shall be indemnified and held harmless by the Company against and from (a) any loss, cost, liability, or
expense that may be imposed upon or reasonably incurred by him or her in connection with or resulting from any claim, action, suit, or proceeding to which he or she may be a party or in which he or she may be involved by reason of any action taken
or failure to act under the Plan or any Award Agreement, and (b) from any and all amounts paid by him or her in settlement thereof, with the Company’s approval, or paid by him or her in satisfaction of any judgment in any such claim, action,
suit, or proceeding against him or her, provided he or she shall give the 

  

 9 

 
Company an opportunity, at its own expense, to handle and defend the same before he or she undertakes to handle and defend it on his or her own behalf. The
foregoing right of indemnification shall not be exclusive of any other rights of indemnification to which such persons may be entitled under the Company’s Certificate of Incorporation or Bylaws, by contract, as a matter of law, or otherwise, or
under any power that the Company may have to indemnify them or hold them harmless. 
  
 
8.5 Successors. All obligations of the Company under the Plan, with respect to Awards granted hereunder, shall be binding on any successor to the Company, whether the existence of such successor is the result of
a direct or indirect purchase, merger, consolidation, or otherwise, of all or substantially all of the business or assets of the Company. 
  
 
8.6 Limited Transferability of Awards. No Award granted under the Plan may be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated, other than by will, by the laws of descent and
distribution, or to the limited extent provided in Section 8.7. All rights with respect to an Award granted to a Participant shall be available during his or her lifetime only to the Participant. Notwithstanding the foregoing, a Participant may, if
the Committee (in its discretion) so permits, transfer an Award to an individual or entity other than the Company. Any such transfer shall be made in accordance with such procedures as the Committee may specify from time to time. 
  
 
8.7 Beneficiary Designations. Notwithstanding any contrary provisions of Section 8.6, after the Plan becomes effective, the Committee (in its sole discretion) may determine that a Participant under the Plan may
name a beneficiary or beneficiaries to whom any vested but unpaid Award shall be paid in the event of the Participant’s death. Each such designation shall revoke all prior designations by the Participant and shall be effective only if given in
a form and manner acceptable to the Committee. In the absence of any such designation, any vested benefits remaining unpaid at the Participant’s death shall be paid to the Participant’s estate and, subject to the terms of the Plan and of
the applicable Award Agreement, any unexercised vested Award may be exercised by the administrator or executor of the Participant’s estate. The provisions of this Section 8.7 shall be effective only if expressly determined by the Committee
after the effective date of the Plan. 
  
 
8.8 No Rights as Stockholder. Except to the limited extent provided in Sections 6.6 and 6.7, no Participant (nor any beneficiary) shall have any of the rights or privileges of a stockholder of the Company with
respect to any Shares issuable pursuant to an Award (or exercise thereof), unless and until certificates representing such Shares shall have been issued, recorded on the records of the Company or its transfer agents or registrars, and delivered to
the Participant (or beneficiary). 
  
 
SECTION 9 
 AMENDMENT, TERMINATION, AND DURATION 
  
 
9.1 Amendment, Suspension, or Termination. The Board, in its sole discretion, may amend, suspend or terminate the Plan, or any part thereof, at any time and for any reason. The amendment, suspension, or
termination of the Plan shall not, without the consent of the Participant, alter or impair any rights or obligations under any Award theretofore granted to such Participant. No Award may be granted during any period of suspension or after
termination of the Plan. 
  
 
9.2 Duration of the Plan. The Plan shall be effective as of July 26, 2004, and subject to Section 9.1 (regarding the Board’s right to amend or terminate the Plan), shall remain in effect thereafter. However,
without further stockholder approval, no Incentive Stock Option may be granted under the Plan after July 25, 2014. 
  

 10 

 
SECTION 10 
 TAX WITHHOLDING 
  
 
10.1 Withholding Requirements. Prior to the delivery of any Shares or cash pursuant to an Award (or exercise thereof), the Company shall have the power and the right to deduct or withhold, or require a
Participant to remit to the Company, an amount sufficient to satisfy federal, state, and local taxes (including the Participant’s FICA obligation) required to be withheld with respect to such Award (or exercise thereof). 
  
 
10.2 Withholding Arrangements. The Committee, in its sole discretion and pursuant to such procedures as it may specify from time to time, may permit a Participant to satisfy such tax withholding obligation, in
whole or in part by (a) electing to have the Company withhold otherwise deliverable Shares, or (b) delivering to the Company already-owned Shares having a Fair Market Value equal to the amount required to be withheld. The amount of the withholding
requirement shall be deemed to include any amount which the Committee agrees may be withheld at the time the election is made, not to exceed the amount determined by using the maximum federal, state or local marginal income tax rates applicable to
the Participant with respect to the Award on the date that the amount of tax to be withheld is to be determined. The Fair Market Value of the Shares to be withheld or delivered shall be determined as of the date that the taxes are required to be
withheld. 
  
 
SECTION 11 
 LEGAL CONSTRUCTION 
  
 
11.1 Gender and Number. Except where otherwise indicated by the context, any masculine term used herein also shall include the feminine; the plural shall include the singular and the singular shall include the
plural. 
  
 
11.2 Severability. In the event any provision of the Plan shall be held illegal or invalid for any reason, the illegality or invalidity shall not affect the remaining parts of the Plan, and the Plan shall be
construed and enforced as if the illegal or invalid provision had not been included. 
  
 
11.3 Requirements of Law. The granting of Awards and the issuance of Shares under the Plan shall be subject to all applicable laws, rules, and regulations, and to such approvals by any governmental agencies or
national securities exchanges as may be required. 
  
 
11.4 Securities Law Compliance. With respect to Section 16 Persons, transactions under this Plan are intended to qualify for the exemption provided by Rule 16b-3. To the extent any provision of the Plan, Award
Agreement or action by the Committee fails to so comply, it shall be deemed null and void, to the extent permitted by law and deemed advisable or appropriate by the Committee. 
  
 
11.5 Governing Law. The Plan and all Award Agreements shall be construed in accordance with and governed by the laws of the State of California, other than its conflicts of laws provisions. 
  
 
11.6 Captions. Captions are provided herein for convenience only, and shall not serve as a basis for interpretation or construction of the Plan. 
  
 
EXECUTION 
  
 IN WITNESS
WHEREOF, the Company, by its duly authorized officer, has executed this Plan on the date indicated below. 
  

					
	 	 	TRIKON TECHNOLOGIES, INC.
			
	 Dated:  July 26, 2004
	 	 By:
	 	 WILLIAM J. CHAPPELL

	 	 	Title:	 	Chief Financial Officer

  

 11Form of Change of Control Severance Agreements

 EXHIBIT 10.2 
  
 Proposed Revision July 20, 2004 
  
 AMENDED AND RESTATED NETIQ CORPORATION 
 CHANGE OF CONTROL SEVERANCE AGREEMENT 
  
 This Amended and Restated Change of Control Severance Agreement (the “Agreement”) is made and entered into effective as of
                         (the “Effective Date”), by and between
                         (the “Employee”) and NetIQ Corporation, a Delaware corporation (the
“Company”). Certain capitalized terms used in this Agreement are defined in Section 1 below. 
  
 R E C I T A L S 
  
 A. The Company may from time to time consider the possibility of a Change of Control. The Board of Directors of the Company (the “Board”) recognizes that the possibility of such consideration can be a
distraction to the Employee and can cause the Employee to consider alternative employment opportunities. 
  
 B. The Board believes that it is in the best interests of the Company and its shareholders to provide the Employee with an incentive to continue his or
her employment and to maximize the value of the Company upon a Change of Control for the benefit of its shareholders. 
  
 C. In order to provide the Employee with appropriate financial security and sufficient incentive to remain with the Company notwithstanding the
possibility of a Change of Control, the Board believes that it is in the best interests of the Company to provide the Employee with certain severance benefits upon the Employee’s termination of employment following a Change of Control.

  
 AGREEMENT 
  
 In consideration of the mutual covenants herein contained and the continued
employment of the Employee by the Company, the parties agree as follows: 
  
 1. Definition of Terms. The following terms referred to in this Agreement shall have the following meanings: 
  
 (a) Cause. “Cause” shall mean (i) any act of personal dishonesty taken by the Employee in connection with his or her
responsibilities as an employee which is intended to result in substantial personal enrichment of the Employee and is reasonably likely to result in material harm to the Company, (ii) Employee’s conviction of a felony which the Board reasonably
believes has had or will have a material detrimental effect on the Company’s reputation or business, (iii) a willful act by the Employee which constitutes misconduct and is materially injurious to the Company, and (iv) continued willful

 violations by the Employee of the Employee’s obligations to the Company after there has been
delivered to the Employee a written demand for performance from the Company which describes the basis for the Company’s belief that the Employee has not substantially performed his or her duties. 
  
 (b) Change of Control. “Change of Control” shall
mean the first to occur of any of the following events after the date hereof: 
  
 (i) the consummation of a merger or consolidation of the Company with any other corporation, other than a merger or consolidation which would result in the voting securities of the Company outstanding immediately
prior thereto continuing to represent (either by remaining outstanding or by being converted into or exchanged for voting securities of the surviving entity) more than fifty percent (50%) of the total voting power represented by the voting
securities of the Company or such surviving entity outstanding immediately after such merger or consolidation; or 
  
 (ii) (A) any approval by the shareholders of the Company of a plan of complete liquidation of the Company, other than as a result of
insolvency, or (B) the consummation of the sale or disposition (or the last in a series of sales or dispositions) by the Company of all or substantially all of the Company’s assets, other than a sale or disposition to a wholly-owned direct or
indirect subsidiary of the Company and other than a sale or disposition which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (by being converted into or exchanged for voting
securities of the entity to which such sale or disposition was made) more than fifty percent (50%) of the total voting power represented by the voting securities of the entity to which such sale or disposition was made after such sale or
disposition; or 
  
 (iii) any “person”
(as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended) becoming the “beneficial owner” (as defined in Rule 13d-3 under said Act), directly or indirectly, of securities of the Company
representing 50% or more of the total voting power represented by the Company’s then outstanding voting securities; or 
  
 (iv) during any period of two consecutive years after the Effective Date, Incumbent Directors cease for any reason to constitute a
majority of the Board. “Incumbent Directors” shall mean directors who either (A) are directors of the Company as of the Effective Date, or (B) are elected, or nominated for election, to the Board with the affirmative votes of at least a
majority of those directors then still in office who either were directors on the Effective Date or whose election or nomination for election was so approved. 
  

(c) Compensation Continuation Period. “Compensation Continuation Period” shall mean the period of time commencing with the
date of the Employee’s Involuntary Termination at any time within twelve (12) months after a Change of Control and ending with the expiration of eighteen (18) months following the date of the Employee’s Involuntary Termination. 

 

 2 

 (d) Constructive Termination. “Constructive Termination” shall mean a
resignation by the Employee within 90 days after the occurrence of any of the following: (i) without the Employee’s express written consent, a material reduction of the Employee’s duties, position or responsibilities relative to the
Employee’s duties, position or responsibilities in effect immediately prior to the Change of Control, or the removal of the Employee from such position, duties and responsibilities, unless the Employee is provided with substantially comparable
duties, position and responsibilities; (ii) without the Employee’s express written consent, a material reduction of the facilities and perquisites (including without limitation office space, location and administrative support) available to the
Employee immediately prior to such reduction; (iii) a reduction by the Company of the Employee’s base salary or bonus opportunity as in effect immediately prior to such reduction; (iv) a material reduction by the Company in the kind or level of
employee benefits to which the Employee is entitled immediately prior to such reduction with the result that the Employee’s overall benefits package is materially reduced; (v) without the Employee’s express written consent, the relocation
of the Employee to a facility or a location more than fifty (50) miles from his or her current location; or (vi) the failure of the Company to obtain the assumption of this Agreement by any successors contemplated in Section 6 below.

  
 (e) Involuntary Termination.
“Involuntary Termination” shall mean Constructive Termination or a termination of the Employee by the Company without Cause. 
  
 2. Term of Agreement. This Agreement shall be in effect for the period commencing on the Effective Date and ending on the third anniversary of the
Effective Date. 
  
 3. At-Will Employment. The Company and the
Employee acknowledge that the Employee’s employment is and shall continue to be at-will, as defined under applicable law. If the Employee’s employment terminates for any reason, the Employee shall not be entitled to any payments, benefits,
damages, awards or compensation other than as provided by this Agreement, or as may otherwise be established under the Company’s then existing employee benefit plans or policies at the time of termination. 
  
 4. Change of Control and Severance Benefits; Non-solicitation. 
  
 (a) Termination Following A Change of Control. 

 
 (i) Severance Payments. If the Employee’s employment
with the Company terminates as a result of an Involuntary Termination at any time within twelve (12) months after a Change of Control, then the Employee shall be entitled to receive from the Company an aggregate amount (the “Severance
Amount”) equal to (A) one and one-half (1.5) times the Employee’s annual base salary in effect on the date of termination plus (B) one and one-half (1.5) times the Employee’s annualized target bonus amount under the Company’s
Management Incentive Plan in effect on the date of termination. The Company shall pay the 
  

 3 

 Severance Amount to the Employee in equal installments on a bi-weekly basis over the Compensation
Continuation Period. In addition, during the Compensation Continuation Period, through COBRA or otherwise the Company shall continue to make available to the Employee and Employee’s spouse and dependents covered under any group health plans or
life insurance plans of the Company on the date of such termination of employment, all group health, life and other similar insurance plans in which Employee or such Covered Dependents participate on the date of the Employee’s termination at
the same cost to the Employee as the Employee paid for such benefits prior to termination of employment. To the extent the Company cannot continue to provide such benefits it will pay the Employee an amount that would be sufficient to enable the
Employee to purchase such benefits from a third party at the same cost to the Employee as the Employee paid for such benefits prior to the termination of employment. Notwithstanding any of the foregoing, if the Employee breaches its obligation in
paragraph (d) or (e) of this Section 4, from and after the date of such breach (x) the Employee will no longer be entitled to, and the Company will no longer be obligated to pay, any remaining unpaid portion of the Severance Amount and (y) the
Employee will no longer be entitled to, and the Company will no longer be obligated to make available to Employee or Employee’s spouse or dependents, any group health, life or other similar insurance plans or any payment in respect of such
plans to the extent the Company cannot continue to provide such benefits. 
  
 (ii) Option Acceleration. If the Employee’s employment with the Company terminates as a result of an Involuntary Termination at any time within twelve (12) months after a Change of Control, then the vesting and
exercisability of each option, stock purchase right or restricted stock award (each, a “Stock Award”) shall be automatically accelerated in full and the forfeiture provisions and/or Company right of repurchase of each Stock Award shall
automatically lapse in full. 
  
 (iii) Other
Termination. If the Employee’s employment with the Company terminates other than as a result of an Involuntary Termination at any time within twelve (12) months after a Change of Control, then the Employee shall not be entitled to receive the
Severance Amount or other benefits hereunder, but may be eligible for those benefits (if any) as may then be established under the Company’s then existing severance and benefits plans and policies. 
  
 (b) Termination Apart from a Change of Control. If the
Employee’s employment with the Company terminates for any or no reason other than within twelve (12) months following a Change of Control, then the Employee shall not be entitled to receive the Severance Amount or other benefits hereunder, but
may be eligible for those benefits (if any) as may then be established under the Company’s then existing severance and benefits plans and policies at the time of such termination. 
  
 (c) Accrued Wages and Vacation; Expenses. Without regard to the reason for, or the timing of,
Employee’s termination of employment: (i) the Company shall pay 
  

 4 

 the Employee any unpaid base salary due for periods prior to the date of termination; (ii) the Company
shall pay the Employee all of the Employee’s accrued and unused vacation through the date of termination; and (iii) following submission of proper expense reports by the Employee, the Company shall reimburse the Employee for all expenses
reasonably and necessarily incurred by the Employee in connection with the business of the Company prior to the date of termination. These payments shall be made promptly upon termination and within the period of time mandated by law. 
  
 (d) Non-solicitation. In consideration of the benefits and
protections conferred under this Agreement, Employee agrees that for the Non-solicit Period, the Employee shall not either directly or indirectly solicit, induce, recruit or encourage any of the Company’s Personnel to leave their employment, or
take away such Personnel, or attempt to solicit, induce, recruit, encourage or take away such Personnel, either for the Employee or for any other person or entity. “Personnel” means any of the Company’s employees and any former
employees who have terminated their employment with the Company within six months of the date of the purported solicitation, in each case excluding the Employee’s administrative assistant. “Non-solicit Period” means the period
commencing on the date of a Change of Control and ending immediately after the end of the Compensation Continuation Period. 
  
 (e) Confidentiality. In consideration of the benefits and protections conferred under this Agreement, the Employee agrees that he or she
will abide by Section 2(a) of the Employment, Confidential Information and Invention Assignment Agreement dated as of                 ,
         between the Employee and the Company. 
  
 5. Limitation on Benefits. 
  
 (a) Notwithstanding anything contained in this Agreement to the contrary, to the extent that the payments and benefits provided under this
Agreement and benefits provided to, or for the benefit of, the Employee under any other employer plan or agreement (such payments or benefits are collectively referred to as the “Benefits”) would be subject to the excise tax (the
“Excise Tax”) imposed under Section 4999 of the Internal Revenue Code of 1986, as amended (the “Code”), the Benefits shall be reduced (but not below zero) if and to the extent that a reduction in the Benefits would result in
Employee retaining a larger amount, on an after-tax basis (taking into account federal, state and local income taxes and the Excise Tax), than if Employee received all of the Benefits (such reduced amount is hereinafter referred to as the
“Limited Benefit Amount”). Unless Employee shall have given prior written notice specifying a different order to the Company to effectuate the Limited Benefit Amount, the Company shall reduce or eliminate the Benefits, by first reducing or
eliminating those payments or benefits which are not payable in cash and then by reducing or eliminating cash payments, in each case in reverse order beginning with payments or benefits which are to be paid the farthest in time from the
“Determination” (as hereinafter defined). Any notice given by the Employee pursuant to the preceding sentence shall take precedence over the provisions of any other plan, arrangement or agreement governing the Employee’s rights and
entitlements to any benefits or compensation. 
  

 5 

 (b) A determination as to whether the Benefits shall be reduced to the Limited Benefit
Amount pursuant to this Agreement and the amount of such Limited Benefit Amount shall be made by the Company’s independent public accountants or another certified public accounting firm of national reputation designated by the Company (the
“Accounting Firm”) at the Company’s expense. The Accounting Firm shall provide its determination (the “Determination”), together with detailed supporting calculations and documentation to the Company and Employee within five
(5) days of the date of termination of Employee’s employment, if applicable, or such other time as requested by the Company or by Employee (provided Employee reasonably believes that any of the Benefits may be subject to the Excise Tax) and if
the Accounting Firm determines that no Excise Tax is payable by Employee with respect to any Benefits, it shall furnish Employee with an opinion reasonably acceptable to Employee that no Excise Tax will be imposed with respect to any such Benefits.
Within ten (10) days of the delivery of the Determination to the Employee, the Employee shall have the right to dispute the Determination (the “Dispute”). If there is no Dispute, the Determination shall be binding, final and conclusive
upon the Company and the Employee. 
  
 6. Successors. 

 
 (a) Company’s Successors. Any successor to the
Company (whether direct or indirect and whether by purchase, lease, merger, consolidation, liquidation or otherwise) to all or substantially all of the Company’s business and/or assets shall assume the Company’s obligations under this
Agreement and agree expressly to perform the Company’s obligations under this Agreement in the same manner and to the same extent as the Company would be required to perform such obligations in the absence of a succession. For all purposes
under this Agreement, the term “Company” shall include any successor to the Company’s business and/or assets which executes and delivers the assumption agreement described in this subsection (a) or which becomes bound by the terms of
this Agreement by operation of law. 
  
 (b)
Employee’s Successors. Without the written consent of the Company, Employee shall not assign or transfer this Agreement or any right or obligation under this Agreement to any other person or entity. Notwithstanding the foregoing, the terms of
this Agreement and all rights of Employee hereunder shall inure to the benefit of, and be enforceable by, Employee’s personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees.

  
 7. Notices. 
  
 (a) General. Notices and all other communications
contemplated by this Agreement shall be in writing and shall be deemed to have been duly given when personally delivered or when mailed by U.S. registered or certified mail, return receipt requested and postage prepaid. In the case of the Employee,
mailed notices shall be addressed to him or her at the home address that he or she most recently communicated to the Company in writing. In the case of the Company, mailed notices shall be addressed to its corporate headquarters, and all notices
shall be directed to the attention of its Secretary. 
  

 6 

 (b) Notice of Termination. Any termination by the Company or by the Employee shall be
communicated by a notice of termination to the other party hereto given in accordance with this Section. If applicable, such notice shall indicate the specific termination provision in this Agreement relied upon and shall set forth in reasonable
detail the facts and circumstances claimed to provide a basis for termination under the provision so indicated. The failure by the Employee to include in the notice any fact or circumstance which contributes to a showing of Involuntary Termination
shall not waive any right of the Employee hereunder or preclude the Employee from asserting such fact or circumstance in enforcing his or her rights hereunder. 
  

8. Arbitration. 
  
 (a) Any dispute or controversy arising out of, relating to, or in connection with this Agreement, or the interpretation, validity,
construction, performance, breach, or termination thereof, shall be settled by binding arbitration to be held in [San Francisco, California][Houston, Texas][Portland, Oregon], in accordance with the National Rules for the Resolution of Employment
Disputes then in effect of the American Arbitration Association (the “Rules”). The arbitrator may grant injunctions or other relief in such dispute or controversy. The decision of the arbitrator shall be final, conclusive and binding on
the parties to the arbitration. Judgment may be entered on the arbitrator’s decision in any court having jurisdiction. 
  
 (b) The arbitrator(s) shall apply California law to the merits of any dispute or claim, without reference to conflicts of law rules. The
arbitration proceedings shall be governed by federal arbitration law and by the Rules, without reference to state arbitration law. Employee hereby consents to the personal jurisdiction of the state and federal courts located in
[California][Texas][Oregon] for any action or proceeding arising from or relating to this Agreement or relating to any arbitration in which the parties are participants. 
  
 (c) Employee understands that nothing in this Section modifies Employee’s at-will employment status.
Either Employee or the Company can terminate the employment relationship at any time, with or without cause. 
  
 (d) EMPLOYEE HAS READ AND UNDERSTANDS THIS SECTION, WHICH DISCUSSES ARBITRATION. EMPLOYEE UNDERSTANDS THAT SUBMITTING ANY CLAIMS ARISING
OUT OF, RELATING TO, OR IN CONNECTION WITH THIS AGREEMENT, OR THE INTERPRETATION, VALIDITY, CONSTRUCTION, PERFORMANCE, BREACH OR TERMINATION THEREOF TO BINDING ARBITRATION, CONSTITUTES A WAIVER OF EMPLOYEE’S RIGHT TO A JURY TRIAL AND RELATES TO
THE RESOLUTION OF ALL DISPUTES RELATING TO ALL ASPECTS OF THE EMPLOYER/EMPLOYEE RELATIONSHIP, INCLUDING BUT NOT LIMITED TO, THE FOLLOWING CLAIMS: 
  
 (i) ANY AND ALL CLAIMS FOR WRONGFUL DISCHARGE OF EMPLOYMENT; BREACH OF CONTRACT, BOTH EXPRESS AND 
  

 7 

 IMPLIED; BREACH OF THE COVENANT OF GOOD FAITH AND FAIR DEALING, BOTH EXPRESS AND IMPLIED; NEGLIGENT OR
INTENTIONAL INFLICTION OF EMOTIONAL DISTRESS; NEGLIGENT OR INTENTIONAL MISREPRESENTATION; NEGLIGENT OR INTENTIONAL INTERFERENCE WITH CONTRACT OR PROSPECTIVE ECONOMIC ADVANTAGE; AND DEFAMATION. 
  
 (ii) ANY AND ALL CLAIMS FOR VIOLATION OF ANY FEDERAL, STATE
OR MUNICIPAL STATUTE, INCLUDING, BUT NOT LIMITED TO, TITLE VII OF THE CIVIL RIGHTS ACT OF 1964, THE CIVIL RIGHTS ACT OF 1991, THE AGE DISCRIMINATION IN EMPLOYMENT ACT OF 1967, THE AMERICANS WITH DISABILITIES ACT OF 1990, THE FAIR LABOR STANDARDS
ACT, THE CALIFORNIA FAIR EMPLOYMENT AND HOUSING ACT, AND LABOR CODE SECTION 201, et seq; 
  
 (iii) ANY AND ALL CLAIMS ARISING OUT OF ANY OTHER LAWS AND REGULATIONS RELATING TO EMPLOYMENT OR EMPLOYMENT DISCRIMINATION. 
  
 9. Miscellaneous Provisions. 
  
 (a) No Duty to Mitigate. The Employee shall not be required
to mitigate the amount of any payment contemplated by this Agreement, nor shall any such payment be reduced by any earnings that the Employee may receive from any other source. 
  
 (b) Waiver. No provision of this Agreement may be modified, waived or discharged unless the modification,
waiver or discharge is agreed to in writing and signed by the Employee and by an authorized officer of the Company (other than the Employee). No waiver by either party of any breach of, or of compliance with, any condition or provision of this
Agreement by the other party shall be considered a waiver of any other condition or provision or of the same condition or provision at another time. 
  
 (c) Integration. This Agreement and the agreements representing the Stock Awards represent the entire agreement and understanding between
the parties as to the subject matter herein and supersede all prior or contemporaneous agreements, whether written or oral. Specifically, this Agreement supersedes and replaces in its entirety the Change of Control Severance Agreement, dated
                , by and between the Employee and the Company. 
  
 (d) Choice of Law. The validity, interpretation, construction and performance of this Agreement shall be governed by the internal
substantive laws, but not the conflicts of law rules, of the State of California. 
  
 (e) Severability. The invalidity or unenforceability of any provision or provisions of this Agreement shall not affect the validity or
enforceability of any other provision hereof, which shall remain in full force and effect. 
  
 (f) Employment Taxes. All payments made pursuant to this Agreement shall be subject to withholding of applicable income and employment
taxes. 
  

 8 

 (g) Counterparts. This Agreement may be executed in counterparts, each of which shall be
deemed an original, but all of which together will constitute one and the same instrument. 
  
 IN WITNESS WHEREOF, each of the parties has executed this Agreement, in the case of the Company by its duly authorized officer, as of the day and year first above written. 
  

					
	 COMPANY:
	 	 NETIQ CORPORATION

			
	 	 	 By:
	 	  

	 	 	 	 	 Charles M. Boesenberg

	 	 	 	 	 Chairman of the Board

			
	 EMPLOYEE:
	 	 	 	  

	 	 	 	 	 [Name of Employee]

  

 9

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