Document:

exv4w2

 

Exhibit 4.2

CERTIFICATE OF ADJUSTMENT

     Pursuant to the requirements of Section 12 of the Rights Agreement, dated as of June 15, 1998,
between Hyperion Solutions Corporation, a Delaware corporation (the “Company”), and
EquiServe Trust Company, N.A. (f.k.a. BankBoston, N.A.), as Rights Agent, (the “Rights
Agreement”), this Certificate is being delivered to EquiServe Trust Company, N.A., as Rights
Agent under the Rights Agreement, and as transfer agent for the Common Stock (as defined below).

     Statement of Facts 

     On November 21, 2005, the Company announced that its Board of Directors declared a
three-for-two stock split (the “Stock Split”) to be effected by a stock dividend issuance
of one share for every two shares already issued and outstanding to be distributed on December 19,
2005 (the “Split Date”) to stockholders of record of the Company’s common stock, $0.001 par
value per share (“Common Stock”), as of the close of business on December 1, 2005.

     Adjustment Pursuant to the Rights Plan 

     In accordance with the Rights Agreement, each share of Common Stock is currently accompanied
by one preferred stock purchase right (a “Right”). Each Right, after it becomes
exercisable and until such time as it expires or is redeemed, entitles the holder to purchase from
the Company 1/1000 of a share of the Company’s Series A Junior Participating Preferred Stock
(“Preferred Stock”) at an exercise price of $250 per Right, before giving effect to the
Stock Split.

     As a result of the Stock Split, the following adjustments will be effected as of the Split
Date:

     (i) Pursuant to Section 11(n) of the Rights Agreement,

          (a) each Right, after it becomes exercisable and until such time as it expires or is redeemed,
will, subject to the terms and conditions of the Rights Agreement, entitle the holder to purchase
from the Company 2/3000 of a share of Preferred Stock at an exercise price of $250.00
for each 1/1000th of an interest in the Preferred Stock; and

          (b) the number of outstanding Rights will be increased by 50%, such that each share of Common
Stock outstanding immediately after the Stock Split shall have issued with respect to it one Right.

 

 

     (ii) Pursuant to Section 23(a) of the Rights Agreement, the outstanding Rights will be
redeemable at a redemption price of $0.0067 per Right.

     (iv) Pursuant to the Certificate of Designations setting forth the rights, preferences and
limitations of the Preferred Stock, as a result of the Stock Split, each share of Preferred Stock
will be entitled to quarterly dividends, when, as and if declared by the Company’s board of
directors, in an amount equal to 1500 times the dividends and distributions (other than dividends
payable in Common Shares). Each share of Preferred Stock will have 1500 votes, voting together
with the Common Stock. If the Company enters into any consolidation, merger, combination or other
transaction in which shares of Common Stock are exchanged into other stock or securities, cash
and/or other property, then each share of Preferred Stock will be similarly exchanged into an
amount per share equal to 1500 times the aggregate amount of consideration for which each share of
Common Stock is exchanged. In the event of liquidation, the holders of shares of Preferred Stock
will be entitled to receive an aggregate amount per share equal to 1500 times the aggregate amount
to be distributed per share to holders of shares of Common Stock plus an amount equal to any
accrued and unpaid dividends.

     IN WITNESS WHEREOF, the undersigned
 has executed this Certificate on this 19th, day of
December, 2005.

	 	 	 	 	 
	 	HYPERION SOLUTIONS CORPORATION

 	 
	 	By:  	/s/
Lonnie Goldman	 
	 	 	Name:  	Lonnie Goldman 	 
	 	 	Title:  	Assistant General Counselexv10w01

 

Exhibit 10.01

INTUIT INC. 2005 EQUITY INCENTIVE PLAN, AS AMENDED THROUGH DECEMBER 16, 2005

INTUIT INC.

2005 EQUITY INCENTIVE PLAN

(As Amended on October 25, 2005, Approved by Shareholders on December 16, 2005)

     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 or Subsidiaries by offering them an opportunity to participate in the Company’s
future performance through awards of Options, Restricted Stock, Stock Bonuses, Stock Appreciation
Rights (SARs) and Restricted Stock Units. Capitalized terms not defined in the text are defined in
Section 26.

     2. SHARES SUBJECT TO THE PLAN.

          2.1 Number of Shares Available. Subject to Sections 2.2 and 21, 13,000,000 Shares are
available for grant and issuance under the Plan. Shares that are subject to: (a) issuance upon
exercise of an Option or SAR granted under this Plan but cease to be subject to the Option or SAR
for any reason other than exercise of the Option; (b) an Award granted under this Plan but are
forfeited or are repurchased by the Company at the original issue price; or (c) an Award granted
under this Plan that otherwise terminates without Shares being issued, will return to the pool of
Shares available for grant and issuance under this Plan. In any fiscal year of the Company no more
than fifty percent (50%) of the Shares subject to Awards granted in such fiscal year may have an
Exercise Price or Purchase Price per Share that is less than Fair Market Value on the applicable
date of grant. In order that ISOs may be granted under this Plan, no more than 13,000,000 shares
shall be issued as ISOs. The Company may issue Shares which are authorized but unissued or
treasury shares pursuant to the Awards granted under this Plan. At all times the Company will
reserve and keep available a sufficient number of Shares to satisfy the requirements of all
outstanding Options and SARs granted under the Plan and all other outstanding but unvested Awards
granted under the Plan.

          2.2 Adjustment of Shares. If the number of outstanding Shares is changed by a stock
dividend, recapitalization, stock split, reverse stock split, subdivision, combination,
reclassification, extraordinary dividend of cash or stock or similar change in the capital
structure of the Company, without consideration, then (a) the number of Shares reserved for
issuance under the Plan and the limits that are set forth in Section 2.1; (b) the Exercise Prices
of and number of Shares subject to outstanding Options and SARs; (c) the number of Shares subject
to other outstanding Awards; (d) the 2,000,000 and 3,000,000 maximum number of shares that may be
issued to an individual in any one calendar year set forth in Section 3; and (e) the number of
Shares that are granted as Options to Non-Employee Directors as set forth in Section 10, will be
proportionately adjusted, subject to any required action by the Board or the stockholders of the
Company and compliance with applicable securities laws; provided that fractions of a Share will not
be issued but will either be replaced by a cash payment equal to the Fair Market Value of such
fraction of a Share or will be rounded up to the nearest whole 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 may be granted only to employees (including officers and directors who
are also employees) of the Company or of a Parent or Subsidiary. All other Awards may be granted
to employees (including officers and directors who are also employees), non-employee directors and
consultants of the Company or any Parent or Subsidiary; provided that such consultants, contractors
and advisors render bona fide services not in connection with the offer and sale of securities in a
capital-raising transaction. The Committee (or its designee under 4.1(c)) will from time to time
determine and designate among the eligible persons who will be granted one or more Awards under the
Plan. A person may be granted more than one Award under the Plan. However, no person will be
eligible to receive more than 2,000,000 Shares issuable under Awards granted in any calendar year,
other than new employees of the Company or of a Parent or Subsidiary (including new employees who
are also officers and directors of the Company or any Parent or Subsidiary), who are eligible to
receive up to a maximum of 3,000,000 Shares issuable under Awards granted in the calendar year in
which they commence their employment.

 

 

     4. ADMINISTRATION.

          4.1 Committee Authority. The Plan shall be administered by the Committee or by the
Board acting as the Committee. Except for automatic grants to Non-Employee Directors pursuant to
Section 10 hereof, and subject to the general purposes, terms and conditions of the Plan, the
Committee will have full power to implement and carry out the Plan. Without limiting the previous
sentence, the Committee will 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 or any
Award, including determining the forms and agreements used in connection with the Plan;
provided that the Committee may delegate to the President, the Chief Financial Officer
or the officer in charge of Human Resources, in consultation with the General Counsel,
the authority to approve revisions to the forms and agreements used in connection with
the Plan that are designed to facilitate Plan administration, and that are not
inconsistent with the Plan or with any resolutions of the Committee relating to the
Plan;
	 
	 	(c)	 	select persons to receive Awards; provided that the Committee may delegate to one
or more Executive Officers (who would also be considered “officers” under Delaware law)
the authority to grant an Award under the Plan to Participants who are not Insiders;
	 
	 	(d)	 	determine the 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, or in tandem
with, 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 or Subsidiary;
	 
	 	(g)	 	grant waivers of Plan or Award conditions;
	 
	 	(h)	 	determine the vesting, exercisability, transferability, 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;
	 
	 	(k)	 	amend the Plan; or
	 
	 	(l)	 	make all other determinations necessary or advisable for the administration of
the Plan.

          4.2 Committee Interpretation and Discretion. Except for automatic grants to
Non-Employee Directors pursuant to Section 10 hereof, 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. Any dispute regarding the interpretation of the Plan or any Award Agreement
shall be submitted by the Participant or 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. The
Committee may delegate to one or more Executive Officers, the authority to review and resolve
disputes with respect to Awards held by Participants who are not Insiders, and such resolution
shall be final and binding on the Company and Participant. Notwithstanding any provision of the
Plan to the contrary, administration of the Plan shall at all times be limited by the requirement
that any administrative action or exercise of discretion shall be void (or suitably modified when
possible) if necessary to avoid the application to any Participant of immediate taxation and/or tax
penalities under Section 409A of the Code.

 

 

     5. OPTIONS. The Committee may grant Options to eligible persons and will determine (a)
whether the Options will be ISOs or NQSOs; (b) the number of Shares subject to the Option, (c) the
Exercise Price of the Option, (d) the period during which the Option may be exercised, and (e) all
other terms and conditions of the Option, subject to the provisions of this Section 5 and the Plan.
Options granted to Non-Employee Directors pursuant to Section 10 hereof shall be governed by that
Section.

          5.1 Form of Option Grant. Each Option granted under the Plan will be evidenced by a
Stock Option Agreement that will expressly identify the Option as an ISO or NQSO. Except as
otherwise required by the terms of Options to Non-Employee Directors as provided in the terms of
Section 10 hereof, the Stock Option Agreement will be substantially in a form and contain such
provisions (which need not be the same for each Participant) that the Committee or an officer of
the Company (pursuant to Section 4.1(b)) has from time to time approved, and will 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 will be the date on which the
Committee makes the determination to grant the Option, unless a later date is otherwise specified
by the Committee. The Stock Option Agreement, and a copy of the Plan and the current Prospectus
for the Plan (plus any additional documents required to be delivered under applicable laws), will
be delivered to the Participant within a reasonable time after the Option is granted. The Stock
Option Agreement, Plan, the Prospectus and other documents may be delivered in any manner
(including electronic distribution or posting) that meets applicable legal requirements.

          5.3 Exercise Period and Expiration Date. An Option will be exercisable within the
times or upon the occurrence of events determined by the Committee and set forth in the Stock
Option Agreement governing such Option, subject to the provisions of Section 5.6, and subject to
Company policies established by the Committee (or by individuals to whom the Committee has
delegated responsibility) from time to time with respect to vesting during leaves of absences. The
Stock Option Agreement shall set forth the last date that the Option may be exercised (the
“Expiration Date”); provided that no Option will be exercisable after the expiration of seven years
from the date the Option is granted; and provided further that no ISO granted to a Ten Percent
Stockholder will be exercisable after the expiration of five years from the date the Option is
granted. The Committee also may provide for Options to become exercisable at one time or from time
to time, periodically or otherwise (including, without limitation, upon the attainment during a
Performance Period of performance goals based on Performance Factors), in such number of Shares or
percentage of Shares subject to the Option as the Committee determines.

          5.4 Exercise Price. The Exercise Price of an Option will be determined by the
Committee when the Option is granted and, subject to the limit of Section 2.1, may be less than
Fair Market Value (but not less than the par value of the Shares); provided that (i) the Exercise
Price of an ISO will not be less than the Fair Market Value of the Shares on the date of grant and
(ii) the Exercise Price of any ISO granted to a Ten Percent Stockholder will not be less than 110%
of the Fair Market Value of the Shares on the date of grant. Payment for the Shares purchased must
be made in accordance with Section 11 of the Plan and the Stock Option Agreement.

          5.5 Procedures for Exercise. A Participant or Authorized Transferee may exercise
Options by following the procedures established by the Company’s Stock Administration Department,
as communicated and made available to Participants through the stock pages on the Intuit Legal
Department intranet web site, and/or through the Company’s electronic mail system.

          5.6 Termination.

     (a) Vesting. Any Option granted to a Participant will cease to vest on the
Participant’s Termination Date, if the Participant is Terminated for any reason other than “total
disability” (as defined in this Section 5.6(a)) or death. Any Option granted to a Participant who
is an employee who has been actively employed by the Company or any Subsidiary for one year or more
or who is a director, will vest as to 100% of the Shares subject to such Option, if the Participant
is Terminated due to “total disability” or death. For purposes of this Section 5.6(a), “total
disability” shall mean: (i) (A) for so long as such definition is used for purposes of the
Company’s group life insurance and accidental death and dismemberment plan or group long term
disability plan, that the Participant is unable to perform each of the material duties of any
gainful occupation for which the Participant is or becomes reasonably fitted by training, education
or experience and which total disability is in fact preventing the Participant from engaging in any
employment or occupation for wage or profit; or, (B) if such definition has changed, such other
definition of “total disability” as determined under the Company’s group life insurance and
accidental death and dismemberment plan or group long term disability plan; and (ii) the Company
shall have received from the Participant’s primary physician a certification that the Participant’s
total disability is likely to be permanent. Any Option held by an employee who is Terminated by
the Company, or any Subsidiary or Parent

 

 

within one year following the date of a Corporate Transaction, will immediately vest as to such
number of Shares as the Participant would have been vested in twelve months after the date of
Termination had the Participant remained employed for that twelve month period.

     (b) Post-Termination Exercise Period. Following a Participant’s Termination, the
Participant’s Option may be exercised to the extent vested as set forth in Section 5.6(a):

          (i) no later than 90 days after the Termination Date if a Participant is Terminated for any
reason except death or Disability, unless a longer time period, not exceeding five years, is
specifically set forth in the Participant’s Stock Option Agreement; provided that no Option may be
exercised after the Expiration Date of the Option; or

          (ii) no later than (A) twelve months after the Termination Date in the case of Termination due
to Disability or (B) eighteen months after the Termination Date in the case of Termination due to
death or if a Participant dies within three months of the Termination Date, unless a longer time
period, not exceeding five years, is specifically set forth in the Participant’s Stock Option
Agreement; provided that no Option may be exercised after the Expiration Date of the Option.

          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 the minimum number will
not prevent a Participant from exercising an 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 Parent or Subsidiary) 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 that calendar year will be ISOs, and the Options for the Shares with a Fair
Market Value in excess of $100,000 that become exercisable in that calendar year will be NQSOs. If
the Code is amended 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 into the Plan and
will apply to any Options granted after the effective date of the Code’s amendment.

          5.9 Notice of Disqualifying Dispositions of Shares Acquired on Exercise of an ISO. If
a Participant sells or otherwise disposes of any Shares acquired pursuant to the exercise of an ISO
on or before the later of (a) the date two years after the Date of Grant, and (b) the date one year
after the exercise of the ISO (in either case, a “Disqualifying Disposition”), the Company may
require the Participant to immediately notify the Company in writing of such Disqualifying
Disposition.

          5.10 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; and provided, further that without stockholder
approval, the modified, extended, renewed or new Option may not have a lower Exercise Price than
the outstanding Option. 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 unless prior stockholder approval is secured, the
Exercise Price may not be reduced below that of the outstanding Option.

          5.11 No Disqualification. Notwithstanding any other provision in the Plan, no term of
the Plan relating to ISOs will be interpreted, amended or altered, and no discretion or authority
granted under the Plan will 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 AWARDS.

          6.1 Awards of 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 will
determine to whom an offer will be made, the number of Shares the

 

 

person may purchase, the Purchase Price, the restrictions under which the Shares will be subject
and all other terms and conditions of the Restricted Stock Award, subject to the following:

          6.2 Restricted Stock Purchase Agreement. All purchases under a Restricted Stock Award
will be evidenced by a Restricted Stock Purchase Agreement, which will be in substantially a form
(which need not be the same for each Participant) that the Committee or an officer of the Company
(pursuant to Section 4.1(b)) has from time to time approved, and will comply with and be subject to
the terms and conditions of the Plan. A Participant accepts a Restricted Stock Award by signing
and delivering to the Company a Restricted Stock Purchase Agreement with full payment of the
Purchase Price, within thirty days from the date the Restricted Stock Purchase Agreement was
delivered to the Participant. If the Participant does not accept the Restricted Stock Award within
thirty days, then the offer of the Restricted Stock Award will terminate, unless the Committee
determines otherwise.

          6.3 Purchase Price. The Purchase Price for a Restricted Stock Award will be
determined by the Committee and, subject to the limit of Section 2.1, may be less than Fair Market
Value (but not less than the par value of the Shares) on the date the Restricted Stock Award is
granted. Payment of the Purchase Price must be made in accordance with Section 11 of the Plan and
the Restricted Stock Purchase Agreement, and in accordance with any procedures established by the
Company’s Stock Administration Department, as communicated and made available to Participants
through the stock pages on the Intuit Legal Department intranet web site, and/or through the
Company’s electronic mail system.

          6.4 Terms of Restricted Stock Awards. Restricted Stock Awards will be subject to such
restrictions as the Committee may impose. These restrictions may be based on completion of a
specified number of years of service with the Company or upon completion of the performance goals
based on Performance Factors during any Performance Period as set out in advance in the
Participant’s Restricted Stock Purchase Agreement. Prior to the grant of a Restricted Stock Award,
the Committee shall: (a) determine the nature, length and starting date of any Performance Period
for the Restricted Stock Award; (b) select from among the Performance Factors to be used to measure
performance goals, if any; and (c) determine the number of Shares that may be awarded to the
Participant. Prior to the payment for Shares to be purchased under any Restricted Stock Award, the
Committee shall determine the extent to which such Restricted Stock Award has been earned.
Performance Periods may overlap and a Participant may participate simultaneously with respect to
Restricted Stock Awards that are subject to different Performance Periods and having different
performance goals and other criteria.

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

     7. STOCK BONUS AWARDS.

          7.1 Awards of Stock Bonuses. A Stock Bonus Award is an award to an eligible person of
Shares (which may consist of Restricted Stock or Restricted Stock Units) for services to be
rendered or for past services already rendered to the Company or any Parent or Subsidiary. All
Stock Bonus Awards shall be made pursuant to a Stock Bonus Agreement, which shall be in
substantially a form (which need not be the same for each Participant) that the Committee or an
officer of the Company (pursuant to Section 4.1(b)) has from time to time approved, and will comply
with and be subject to the terms and conditions of the Plan. No payment will be required for
Shares awarded pursuant to a Stock Bonus Award, but the number of Shares awarded is subject to the
limit of Section 2.1.

          7.2 Terms of Stock Bonus Awards. The Committee will determine the number of Shares to
be awarded to the Participant under a Stock Bonus Award and any restrictions thereon. These
restrictions may be based upon completion of a specified number of years of service with the
Company or upon satisfaction of performance goals based on Performance Factors during any
Performance Period as set out in advance in the Participant’s Stock Bonus Agreement. If the Stock
Bonus Award is to be earned upon the satisfaction of performance goals, the Committee shall: (a)
determine the nature, length and starting date of any Performance Period for the Stock Bonus Award;
(b) select from among the Performance Factors to be used to measure performance goals; and (c)
determine the number of Shares that may be awarded to the Participant. Prior to the issuance of
any Shares or other payment to a Participant pursuant to a Stock Bonus Award, the Committee will
determine the extent to which the Stock Bonus Award has been earned. Performance Periods may
overlap and a Participant may participate simultaneously with respect to Stock Bonus Awards 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 a Stock Bonus Award 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 to Participant. The Committee will determine whether the earned
portion of a Stock Bonus Award will be paid to the Participant currently or on a deferred basis
with such interest or dividend equivalent, if any, as the Committee may determine. To the extent
permissible under law, the Committee may also permit a Participant to defer payment under a Stock
Bonus Award to a date or dates after the Stock Bonus Award is earned provided that the terms of the
Stock Bonus Award and any deferral satisfy the requirements of Section 409A of the Code and
provided further that payout shall not be deferred beyond March 15 of the year following the year
of vesting unless a deferral election in compliance with Section 409A of the Code has been made.
Payment may be made in the form of cash, whole Shares, or a combination thereof, based on the Fair
Market Value of the Shares earned under a Stock Bonus Award on the date of payment, and in either a
lump sum payment or in installments.

          7.4 Termination of Participant . In the event of a Participant’s Termination during a
Performance Period or vesting period, for any reason, then such Participant will be entitled to
payment (whether in Shares, cash or otherwise) with respect to the Stock Bonus Award only to the
extent earned as of the date of Termination in accordance with the Stock Bonus Agreement, unless
the Committee determines otherwise.

     8. STOCK APPRECIATION RIGHTS. 

          8.1 Awards of SARs. A Stock Appreciation Right (“SAR”) is an award to an eligible
person that may be settled in cash, or Shares (which may consist of Restricted Stock), having a
value equal to the value determined by multiplying the difference between the Fair Market Value on
the date of exercise over the Exercise Price and the number of Shares with respect to which the SAR
is being settled. The SAR may be granted for services to be rendered or for past services already
rendered to the Company, or any Parent or Subsidiary. All SARs shall be made pursuant to a SAR
Agreement, which shall be in substantially a form (which need not be the same for each Participant)
that the Committee or an officer of the Company (pursuant to Section 4.1(b)) has from time to time
approved, and will comply with and be subject to the terms and
conditions of this Plan.

          8.2 Terms of SARs. The Committee will determine the terms of a SAR including, without
limitation: (a) the number of Shares deemed subject to the SAR; (b) the Exercise Price and the time
or times during which the SAR may be settled; (c) the consideration to be distributed on settlement
of the SAR; and (d) the effect on each SAR of the Participant’s Termination. The Exercise Price of
the SAR will be determined by the Committee when the SAR is granted and, subject to the limit of
Section 2.1, may be less than Fair Market Value (but not less than the par value of the Shares. A
SAR may be awarded upon satisfaction of such performance goals based on Performance Factors during
any Performance Period as are set out in advance in the Participant’s individual SAR Agreement. If
the SAR is being earned upon the satisfaction of performance goals, then the Committee will: (x)
determine the nature, length and starting date of any Performance Period for each SAR; and (y)
select from among the Performance Factors to be used to measure the performance, if any. Prior to
settlement of any SAR earned upon the satisfaction of performance goals pursuant to a SAR
Agreement, the Committee shall determine the extent to which such SAR has been earned. Performance
Periods may overlap and Participants may participate simultaneously with respect to SARs that are
subject to different performance goals and other criteria. The Exercise Price of an outstanding
SAR may not be reduced without stockholder approval.

          8.3 Exercise Period and Expiration Date. A SAR will be exercisable within the times
or upon the occurrence of events determined by the Committee and set forth in the SAR Agreement
governing such SAR. The SAR Agreement shall set forth the last date that the SAR may be exercised
(the “Expiration Date”); provided that no SAR will be exercisable after the expiration of seven
years from the date the SAR is granted. The Committee may also provide for SARs to become
exercisable at one time or from time to time, periodically or otherwise (including, without
limitation, upon the attainment during a Performance Period of performance goals based on
Performance Factors), in such number of Shares or percentage of the Shares subject to the SAR as
the Committee determines.

          8.4 Form and Timing of Settlement. The portion of a SAR being settled may be paid
currently or on a deferred basis with such interest or dividend equivalent, if any, as the
Committee determines. Payment may be made in the form of cash or whole Shares or a combination
thereof, either in a lump sum payment or in installments, as the Committee determines, provided
that

 

 

the terms of the SAR and any deferral satisfy the requirements of Section 409A of the Code and
provided further that payout shall not be deferred beyond March 15 of the year following the year
of vesting unless a deferral election in compliance with Section 409A of the Code has been made.

     9. RESTRICTED STOCK UNITS

          9.1 Awards of Restricted Stock Units. A Restricted Stock Unit (“RSU”) is an award to
an eligible person covering a number of Shares that may be settled in cash, or by issuance of those
Shares (which may consist of Restricted Stock) for services to be rendered or for past services
already rendered to the Company or any Parent or Subsidiary. The Committee may authorize the
issuance of RSUs to certain eligible persons who elect to defer cash compensation. All RSUs shall
be made pursuant to a RSU Agreement, which shall be in substantially a form (which need not be the
same for each Participant) that the Committee or an officer of the Company (pursuant to Section
4.1(b)) has from time to time approved, and will comply with and be subject to the terms and
conditions of the Plan (including the limit set forth in Section 2.1).

          9.2 Terms of RSUs. The Committee will determine the terms of a RSU including, without
limitation: (a) the number of Shares deemed subject to the RSU; (b) the time or times during which
the RSU may be exercised; (c) the consideration to be distributed on settlement, and the effect on
each RSU of the Participant’s Termination. A RSU may be awarded upon satisfaction of such
performance goals based on Performance Factors during any Performance Period as are set out in
advance in the Participant’s individual RSU Agreement. If the RSU is being earned upon
satisfaction of performance goals, then the Committee will: (x) determine the nature, length and
starting date of any Performance Period for the RSU; (y) select from among the Performance Factors
to be used to measure the performance, if any; and (z) determine the number of Shares deemed
subject to the RSU. Prior to settlement of any RSU earned upon the satisfaction of performance
goals pursuant to a RSU Agreement, the Committee shall determine the extent to which such SAR has
been earned. Performance Periods may overlap and participants may participate simultaneously with
respect to RSUs 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 RSUs to take into account changes in law and accounting 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.

          9.3 Form and Timing of Settlement. The portion of a RSU being settled may be paid
currently or on a deferred basis with such interest or dividend equivalent, if any, as the
Committee determines. To the extent permissible under law, the Committee may also permit a
Participant to defer payment under a RSU to a date or dates after the RSU is earned provided that
the terms of the RSU and any deferral satisfy the requirements of Section 409A of the Code and
provided further that payout shall not be deferred beyond March 15 of the year following the year
of vesting unless a deferral election in compliance with Section 409A of the Code has been made.
Payment may be made in the form of cash or whole Shares or a combination thereof, either in a lump
sum payment or in installments, all as the Committee determines.

     10. AUTOMATIC GRANTS TO NON-EMPLOYEE DIRECTORS.

          10.1 Eligibility. Non-Employee Directors are eligible for options granted pursuant to
this Section 10.

          10.2 Initial Grant. Each Non-Employee Director who first becomes a member of the
Board on or after the Effective Date will automatically be granted an option for 45,000 Shares on
the date such Non-Employee Director first becomes a member of the Board. Each Non-Employee
Director who became a member of the Board prior to the Effective Date and who did not receive a
prior option grant in connection with his or her appointment from the Company, will receive an
Initial Grant on the Effective Date. Each Option granted pursuant to this Section 10.2 shall be
called an “Initial Grant”.

          10.3 Succeeding Grant. On each anniversary of an Initial Grant under this Plan (or
under the Company’s 1996 Directors Stock Option Plan) each Non-Employee Director who has served
continuously as a member of the Board during that period will automatically be granted an Option
for 15,000 Shares; provided that, each Non-Employee Director who became a member of the Board prior
to the Effective Date that did not receive a 15,000 share option grant pursuant to Section 6.3 of
the Company’s 1996 Directors Stock Option Plan in calendar year 2004, will receive a 2004
Succeeding Grant on the Effective Date. Each Option granted pursuant to this Section 10.3 shall be
called a “Succeeding Grant”.

 

 

          10.4 Audit Committee Grants. Each Non-Employee Director who is appointed a new member
to the Audit Committee on or after the Effective Date, will automatically be granted an Option for
5,000 Shares on the day he or she is appointed. On each anniversary of a Non-Employee Director’s
first grant (a) pursuant to this Section 10.4 or (b) pursuant to 6.4 of the Company’s 1996
Directors Stock Option Plan, on which the Non-Employee Director is a member of the Audit Committee,
the Non-Employee Director will automatically be granted an Option for 5,000 Shares. Each Option
granted pursuant to this Section 10.4 shall be called an “Audit Committee Grant”.

          10.5 Compensation and Organizational Development Committee Grants. Each Non-Employee
Director who is appointed a new member to the Compensation and Organizational Development Committee
on or after the Effective Date, will automatically be granted an Option for 5,000 Shares on the day
he or she is appointed. On each anniversary of a Non-Employee Director’s first grant (a) pursuant
to this Section 10.5 or (b) pursuant to 6.5 of the Company’s 1996 Directors Stock Option Plan, on
which the Non-Employee Director is a member of the Compensation and Organizational Development
Committee, the Non-Employee Director will automatically be granted an Option for 5,000 Shares.
Each Option granted pursuant to this Section 10.5 shall be called a “Compensation Committee Grant”.

          10.6 Nominating & Governance Committee Grants. Each Non-Employee Director who is
appointed a new member to the Nominating & Governance Committee on or after the Effective Date,
will automatically be granted an Option for 5,000 Shares on the day he or she is appointed. On
each anniversary of a Non-Employee Director’s first grant (a) pursuant to this Section 10.6 or (b)
pursuant to 6.6 of the Company’s 1996 Directors Stock Option Plan, on which the Non-Employee
Director is a member of the Nominating & Governance Committee, the Non-Employee Director will
automatically be granted an Option for 5,000 Shares. Each Option granted pursuant to this Section
10.6 shall be called a “Nominating & Governance Committee Grant”.

          10.7 Vesting and Exercisability

               (a) Initial Grants shall become exercisable as they vest as to 25% of the Shares upon the
first anniversary of the date such Option is granted and an additional 2.0833% of the shares each
month thereafter and become fully vested on the fourth anniversary of the date of grant, so long as
the Non-Employee Director continuously remains a director or a consultant of the Company.

               (b) Succeeding Grants shall become exercisable as they vest as to 50% of the Shares upon the
first anniversary of the date such Option is granted and an additional 4.1666% of the Shares each
month thereafter and become fully vested on the second anniversary of the date of grant, so long as
the Non-Employee Director continuously remains a director or a consultant of the Company.

               (c) Each Audit Committee Grant, Compensation and Organizational Development Committee Grant
and Nominating & Governance Committee Grant shall become exercisable as they vest as to 8.333% of
the Shares each month following the date of grant and become fully vested on the first anniversary
of the date of grant, so long as the Non-Employee director continuously remains a director or a
consultant of the Company.

               (d) Any Option granted to a Non-Employee Director will vest as to 100% of the Shares subject
to such Option, if the Non-Employee Director ceases to be a member of the Board or a consultant of
the Company due to “total disability” or death. For
purposes of this Section  10.7(d), “total
disability” shall mean: (1) (i) for so long as such definition is used for purposes of the
Company’s group life insurance and accidental death and dismemberment plan or group long term
disability plan, that the Non-Employee Director is unable to perform each of the material duties of
any gainful occupation for which the Non-Employee Director is or becomes reasonably fitted by
training, education or experience and which total disability is in fact preventing the Non-Employee
Director from engaging in any employment or occupation for wage or profit or (ii) if such
definition has changed, such other definition of “total disability” as determined under the
Company’s group life insurance and accidental death and dismemberment plan or group long term
disability plan; and (2) the Company shall have received from the Non-Employee Director’s primary
physician a certification that the Non-Employee Director’s total disability is likely to be
permanent.

               (e) In the event of a Corporate Transaction, the vesting of all Options granted to
Non-Employee Directors pursuant to this Section 10 will accelerate and such Options will become
exercisable in full prior to the consummation of such event at such time and on such conditions as
the Committee determines, and if such Options are not exercised on or prior to the consummation of
the corporate transaction, they shall terminate.

 

 

          10.8 Form of Option Grant. Each Option granted under this Section 10 shall be a NQSO
and shall be evidenced by a Non-Employee Director Stock Option Grant Agreement in such form as the
Committee shall from time to time approve and which shall comply with and be subject to the terms
and conditions of this Plan.

          10.9 Exercise Price. The Exercise Price of each Option granted under this Section 10
shall be the Fair Market Value of the Share on the date the Option is granted. The Exercise Price
of an outstanding Option may not be reduced without stockholder approval.

          10.10 Termination of Option. Except as provided in Section 10.7(e) or this Section
10.10, each Option granted under this Section 10 shall expire seven (7) years after its date of
grant. The date on which the Non-Employee Director ceases to be a member of the Board or a
consultant of the Company shall be referred to as the “Non-Employee Director Termination Date” for
purposes of this Section 10.10. An Option may be exercised after the Non-Employee Director
Termination Date only as set forth below:

               (a) Termination Generally. If the Non-Employee Director ceases to be a member of the
Board or consultant of the Company for any reason except death or Disability, then each Option, to
the extent then vested pursuant to Section 10.7 above, then held by such Non-Employee Director may
be exercised by the Non-Employee Director within seven months after the Non-Employee Director
Termination Date, but in no event later than the Expiration Date.

               (b) Death or Disability. If the Non-Employee Director ceases to be a member of the
Board or consultant of the Company because of his or her death or Disability, then each Option, to
the extent then vested pursuant to Section 10.7 above, then held by such Non-Employee Director may
be exercised by the Non-Employee Director or his or her legal representative within twelve months
after the Non-Employee Director Termination Date, but in no event later than the Expiration Date.

     11. PAYMENT FOR SHARE PURCHASES.

          11.1 Payment. Payment for Shares purchased pursuant to the Plan may be made by any of
the following methods (or any combination of such methods) that are described in the applicable
Award Agreement and that are permitted by law:

	 	(a)	 	in cash (by check);
	 
	 	(b)	 	in the case of exercise by the Participant, Participant’s guardian or legal
representative or the authorized legal representative of Participants’ heirs or legatees
after Participant’s death, by cancellation of indebtedness of the Company to the
Participant;
	 
	 	(c)	 	by surrender of shares of the Company’s Common Stock;
	 
	 	(d)	 	in the case of exercise by the Participant, Participant’s guardian or legal
representative or the authorized legal representative of Participants’ heirs or legatees
after Participant’s death, by waiver of compensation due or accrued to Participant for
services rendered;
	 
	 	(e)	 	by tender of property; or
	 
	 	(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 the Participant or
Authorized Transferee and an NASD Dealer meeting the requirements of the
Company’s “same day sale” procedures and in accordance with law; or
	 
	 	(2)	 	through a “margin” commitment from Participant or Authorized
Transferee and an NASD Dealer meeting the requirements of the Company’s “margin”
procedures and in accordance with law.

 

 

          11.2 Issuance of Shares. Upon payment of the applicable Purchase Price or Exercise
Price (or a commitment for payment from the NASD Dealer designated by the Participant or Authorized
Transferee in the case of an exercise by means of a “same-day sale” or “margin” commitment), and
compliance with other conditions and procedures established by the Company for the purchase of
shares, the Company shall issue the Shares registered in the name of Participant or Authorized
Transferee (or in the name of the NASD Dealer designated by the Participant or Authorized
Transferee in the case of an exercise by means of a “same-day sale” or “margin” commitment) and
shall deliver certificates representing the Shares (in physical or electronic form, as
appropriate). The Shares may be subject to legends or other restrictions as described in Section
15 of the Plan.

     12. WITHHOLDING TAXES.

          12.1 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(s) for the Shares. If a payment in satisfaction of an Award is to be
made in cash, the payment will be net of an amount sufficient to satisfy federal, state, and local
withholding tax requirements.

          12.2 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 number of
whole 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. All elections by
a Participant to have Shares withheld for this purpose shall be made in accordance with the
requirements established by the Committee and be in writing in a form acceptable to the Committee.

     13. PRIVILEGES OF STOCK OWNERSHIP. No Participant or Authorized Transferee will have any
rights as a stockholder of the Company with respect to any Shares until the Shares are issued to
the Participant or Authorized Transferee. After Shares are issued to the Participant or Authorized
Transferee, the Participant or Authorized Transferee will be a stockholder and have all the rights
of a stockholder with respect to the Shares including the right to vote and receive all dividends
or other distributions made or paid with respect to such Shares; provided, that if the Shares are
Restricted Stock, any new, additional or different securities the Participant or Authorized
Transferee may become entitled to receive with respect to the Shares by virtue of a stock dividend,
stock split or any other change in the corporate or capital structure of the Company will be
subject to the same restrictions as the Restricted Stock; provided further, that the Participant or
Authorized Transferee will have no right to retain such dividends or distributions with respect to
Shares that are repurchased at the Participant’s original Exercise Price or Purchase Price pursuant
to Section 15.

     14. TRANSFERABILITY. No Award and no interest therein, shall be sold, pledged, assigned,
hypothecated, transferred or disposed of in any manner other than by will or by the laws of descent
and distribution, and no Award may be made subject to execution, attachment or similar process;
provided, however that with the consent of the Committee a Participant may transfer a NQSO to an
Authorized Transferee. Transfers by the Participant for consideration are prohibited. Without
such permission by the Committee, a NQSO shall like all other Awards under the Plan be exercisable
(a) during a Participant’s lifetime only by the Participant or the Participant’s guardian or legal
representative; and (b) after Participant’s death, by the legal representative of the Participant’s
heirs or legatees.

     15. 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 all or a portion of a
Participant’s Shares that are not “Vested” (as defined in the Award Agreement), following the
Participant’s Termination, at any time within ninety days after the later of (a) the Participant’s
Termination Date or (b) the date the Participant purchases Shares under the Plan, for cash or
cancellation of purchase money indebtedness with respect to Shares, at the Participant’s original
Exercise Price or Purchase Price; provided that upon assignment of the right to repurchase, the
assignee must pay the Company cash equal to the excess of the Fair Market Value of the Shares over
the original Purchase Price.

     16. CERTIFICATES. All certificates for Shares or other securities delivered under the Plan
(whether in physical or electronic form, as appropriate) will be subject to stock transfer orders,
legends and other restrictions that the Committee deems necessary or advisable, including without
limitation 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 on which the Shares may be listed.

     17. ESCROW. To enforce any restrictions on a Participant’s Shares, the Committee may require
the Participant to deposit all certificates representing Shares, together with stock powers or
other transfer instruments 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.

     18. SECURITIES LAW AND OTHER REGULATORY COMPLIANCE. An Award shall not be effective unless
the Award is in compliance with all applicable state, federal and foreign securities laws, rules
and regulations of any governmental body, and the requirements of any stock exchange or automated
quotation system on 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 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, federal or foreign 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, federal or foreign securities laws, stock
exchange or automated quotation system, and the Company shall have no liability for any inability
or failure to do so.

     19. 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 to
continue any other relationship with, the Company or any Parent or Subsidiary or limit in any way
the right of the Company or any Parent or Subsidiary to terminate Participant’s employment or other
relationship at any time, with or without cause.

     20. REPRICING PROHIBITED; EXCHANGE AND BUYOUT OF AWARDS. The repricing of Options or SARs is
prohibited without prior stockholder approval. The Committee may, at any time or from time to
time, authorize the Company, with prior stockholder approval, in the case of an Option or SAR
exchange, and 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 Option previously granted with payment in cash, Shares or other
consideration, based on such terms and conditions as the Committee and the Participant shall agree;
provided, however, that in no event will an Option with an Exercise Price above the Fair Market
Value at the time of such proposed buyout be repurchased.

     21. CORPORATE TRANSACTIONS.

          21.1 Assumption or Replacement of Awards by Successor. Except as provided for in
Section 10.7(e), in the event of a Corporate Transaction 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
stockholders (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 to repurchase restrictions no less favorable
to the Participant. In the event such successor corporation, if any, refuses to assume or replace
the Awards, as provided above, pursuant to a Corporate Transaction or if there is no successor
corporation due to a dissolution or liquidation of the Company, such Awards shall immediately vest
as to 100% of the Shares subject thereto at such time and on such conditions as the Board shall
determine and the Awards shall expire at the closing of the transaction or at the time of
dissolution or liquidation.

          21.2 Other Treatment of Awards. Subject to any greater rights granted to Participants
under Section 21.1, in the event of a Corporate Transaction, any outstanding Awards shall be
treated as provided in the applicable agreement or plan of merger, consolidation, dissolution,
liquidation or sale of assets.

          21.3 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.

     22. ADOPTION AND STOCKHOLDER APPROVAL. The Plan was adopted by the Compensation and
Organizational Development Committee on August 26, 2004. The Plan shall become effective upon
approval by stockholders of the Company, consistent with applicable laws.

     23. TERM OF PLAN. The Plan will terminate three years following the date it originally became
effective upon approval by stockholders of the Company.

     24. 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. Notwithstanding the foregoing, neither the Board nor the
Committee shall, without the approval of the stockholders of the Company, amend the Plan in any
manner that requires such stockholder approval pursuant to the Code or the regulations promulgated
thereunder as such provisions apply to ISO plans or pursuant to the Exchange Act or any rule
promulgated thereunder or pursuant to the listing requirements of the national securities market on
which the Shares are listed. In addition, no amendment that is detrimental to a Participant may be
made to any outstanding Award without the consent of the Participant.

     25. NONEXCLUSIVITY OF THE PLAN; UNFUNDED PLAN. Neither the adoption of the Plan by the Board,
the submission of the Plan to the stockholders 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. The Plan shall be unfunded.
Neither the Company nor the Board shall be required to segregate any assets that may at any time be
represented by Awards made pursuant to the Plan. Neither the Company, the Committee, nor the Board
shall be deemed to be a trustee of any amounts to be paid under the Plan.

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

     (a) “Authorized Transferee” means the permissible recipient, as authorized by this
Plan and the Committee, of an NQSO that is transferred during the Participant’s lifetime by the
Participant by gift or domestic relations order. For purposes of this definition a “permissible
recipient” is: (i) a child, stepchild, grandchild, parent, stepparent, grandparent, spouse, former
spouse, sibling, niece, nephew, mother-in-law, father-in-law, son-in-law, daughter-in-law,
brother-in-law or sister-in-law of the Participant, including any such person with such
relationship to the Participant by adoption; (ii) any person (other than a tenant or employee)
sharing the Participant’s household; (iii) a trust in which the persons in (i) or (ii) have more
than fifty percent of the beneficial interest; (iv) a foundation in which the persons in (i) or
(ii) or the Participant control the management of assets; or (v) any other entity in which the
person in (i) or (ii) or the Participant own more than fifty percent of the voting interest.

     (b) “Award” means any award under the Plan, including any Option, Restricted Stock,
Stock Bonus, Stock Appreciation Right or Restricted Stock Unit.

     (c) “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.

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

     (e) “Code” means the Internal Revenue Code of 1986, as amended, and the regulations
promulgated thereunder.

     (f) “Committee” means the Compensation and Organizational Development Committee of the
Board or such other committee appointed by the Board to administer the Plan, or if no committee is
appointed, the Board. Each member of the Committee

 

 

shall be (i) a “non-employee director” for purposes of Section 16 and Rule 16b-3 of the
Exchange Act, and (ii) an “outside director” for purposes of Section 162(m) of the Code, unless the
Board has fewer than two such outside directors.

     (g) “Company” means Intuit Inc., a corporation organized under the laws of the State
of Delaware, or any successor corporation.

     (h) “Corporate Transaction” means (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 stockholders 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, (d) a merger in which the Company is the surviving
corporation but after which the stockholders of the Company immediately prior to such merger (other
than any stockholder that merges, or which owns or controls another corporation that merges, with
the Company in such merger) cease to own their shares or other equity interest in the Company; or
(e) any other transaction which qualifies as a “corporate transaction” under Section 424(a) of the
Code wherein the stockholders 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).

     (i) “Disability” means a disability within the meaning of Section 22(e)(3) of the
Code, as determined by the Committee.

     (j) “Effective Date” means the date stockholders approve the Plan
pursuant to Section 22 of the Plan.

     (k) “Exchange Act” means the Securities Exchange Act of 1934, as amended, and the
regulations promulgated thereunder.

     (l) “Executive Officer” means a person who is an “executive officer” of the Company as
defined in Rule 3b-7 promulgated under the Exchange Act.

     (m) “Exercise Price” means the price at which a Participant who holds an Option or SAR
may purchase the Shares issuable upon exercise of the Option or SAR.

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

	 	(1)	 	if such Common Stock is then quoted on the NASDAQ National Market,
its closing price on the NASDAQ National Market on such date or if such date is
not a trading date, the closing price on the NASDAQ National Market on the last
trading date that precedes such date;
	 
	 	(2)	 	if such Common Stock is publicly traded and is then listed on a
national securities exchange, the last reported sale price on such date 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;
	 
	 	(3)	 	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
	 
	 	(4)	 	if none of the foregoing is applicable, by the Board of Directors
in good faith.

     (o) “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.

     (p) “ISO” means an Incentive Stock Option within the meaning of the Code.

     (q) “NASD Dealer” means broker-dealer that is a member of the National Association of
Securities Dealers, Inc.

 

 

     (r) “NQSO” means a nonqualified stock option that does not qualify as an ISO.

     (s) “Option” means an Award pursuant to Section 5 of the Plan.

     (t) “Non-Employee Director” means a member of the Company’s Board of Directors who is
not a current or former employee of the Company or any Parent or Subsidiary.

     (u) “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.

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

     (w) “Performance Factors” means the factors selected by the Committee from among the
following measures to determine whether the performance goals established by the Committee and
applicable to Awards have been satisfied:

	 	(1)	 	Net revenue and/or net revenue growth;
	 
	 	(2)	 	Earnings before income taxes and amortization and/or earnings
before income taxes and amortization growth;
	 
	 	(3)	 	Operating income and/or operating income growth;
	 
	 	(4)	 	Net income and/or net income growth;
	 
	 	(5)	 	Earnings per share and/or earnings per share growth;
	 
	 	(6)	 	Total stockholder return and/or total stockholder return growth;
	 
	 	(7)	 	Return on equity;
	 
	 	(8)	 	Operating cash flow return on income;
	 
	 	(9)	 	Adjusted operating cash flow return on income;
	 
	 	(10)	 	Economic value added; and
	 
	 	(11)	 	Individual business objectives.

     (x) “Performance Period” means the period of service determined by the Committee, not
to exceed five years, during which years of service or performance is to be measured for the Award.

     (y) “Plan” means this Intuit Inc. 2005 Equity Incentive Plan, as amended from time to
time.

     (z) “Prospectus” means the prospectus relating to the Plan, as amended from time to
time, that is prepared by the Company and delivered or made available to Participants pursuant to
the requirements of the Securities Act.

     (aa) “Purchase Price” means the price to be paid for Shares acquired under the Plan,
other than Shares acquired upon exercise of an Option.

     (bb) “Restricted Stock Award” means an award of Shares pursuant to Section 6 of the Plan.

     (cc) “Restricted Stock Unit” means an Award granted pursuant to Section 9 of the Plan.

 

 

     (dd) “RSU Agreement” means an agreement evidencing a Restricted Stock Unit Award
granted pursuant to Section 9 of the Plan.

     (ee) “SAR Agreement” means an agreement evidencing a Stock Appreciation Right granted
pursuant to Section 8 of the Plan.

     (ff) “SEC” means the Securities and Exchange Commission.

     (gg) “Securities Act” means the Securities Act of 1933, as amended, and the regulations promulgated thereunder.

     (hh) “Shares” means shares of the Company’s Common Stock $0.01 par value, reserved for
issuance under the Plan, as adjusted pursuant to Sections 2 and 21, and any successor security.

     (ii) “Stock Appreciation Right” means an Award granted pursuant to Section 8 of the Plan.

     (jj) “Stock Bonus” means an Award granted pursuant to Section 7 of the Plan.

     (kk) “Stock Option Agreement” means the agreement which evidences a Stock Option,
granted pursuant to Section 5 of the Plan.

     (ll) “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.

     (mm) “Ten Percent Stockholder” means any person who directly or by attribution owns
more than ten percent of the total combined voting power of all classes of stock of the Company or
any Parent or Subsidiary.

     (nn) “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 or Subsidiary;
provided that a Participant shall not be deemed to be Terminated if the Participant is on a leave
of absence approved by the Committee or by an officer of the Company designated by the Committee;
and provided further, that during any approved leave of absence, vesting of Awards shall be
suspended or continue in accordance with guidelines established from time to time by the Committee.
Subject to the foregoing, 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”).

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