Document:

exv10w14

Exhibit 10.14

EZCORP, Inc. Fiscal Year 2009 Incentive Compensation Program

PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED AND ARE BEING FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION IN A CONFIDENTIAL TREATMENT REQUEST UNDER RULE 24B-2 OF THE SECURITIES EXCHANGE
ACT OF 1934, AS AMENDED. THE SYMBOL [***] IN THIS EXHIBIT INDICATES THAT INFORMATION HAS BEEN
OMITTED.

FY 2009 Incentive

Compensation Program

 

 

FY 2009 Incentive Compensation Program

Policy

It is a policy of EZCORP, Inc. and its wholly owned affiliates (also referred to as “the Company”)
to offer a total compensation package which is commensurate with the job assigned, competitive
within the affiliated industry, and reflective of the value of each individual’s performance and
overall contribution towards the short and long term success of the Company.

As a supplement to the base compensation paid and stock awards granted by EZCORP, the Company
offers the FY2009 Incentive Compensation Program (the “Program”) to reward the accomplishment of
corporate, business unit, and personal objectives for select key associates. This Program is
designed to motivate selected associates to strive for excellence in both Company and specific
personal objectives and provides incentive compensation awards for their achievement.

Objectives

The primary objectives of the EZCORP Incentive Compensation Program are:

	 	1.	 	To provide an incentive for individuals to drive their performance to achieve
strategic Company and personal objectives.
	 
	 	2.	 	To attract, retain and motivate top-quality associates who are able to add
significant value to the Company’s performance.
	 
	 	3.	 	To provide incentive compensation opportunities which are competitive for the
associate levels and the affiliated industry.

Eligibility for Participation

The Compensation Advisory Group (President/CEO, SVP Administration and the SVP & CFO) will select
the positions that will participate in the Program. Participants are generally selected from
positions that typically have incentive-based compensation components in the industry and from
individuals who make meaningful and substantial contributions to the business. Participation in the
Program will be determined prior to the beginning of the fiscal year. Eligible associates will
usually be drawn from:

	 	1.	 	Officers and Executives of the Company.
	 
	 	2.	 	Regional and Corporate Director Level Management
	 
	 	3.	 	Key Management individuals as determined by the Compensation Advisory Group and
approved by the Board Compensation Committee.

 

 

Setting of Financial Measurements and Individual Objectives

Company Objective:

The President/CEO will recommend, and the Board of Directors will approve specific financial
measures that, along with Individual Objectives, will be used to determine the incentive awards for
the year.

Individual Objectives:

The Executive Committee will determine overall departmental objectives and assign some or all of
those objectives as Individual Objectives to specific individual participants. Individual
Objectives may be either business financial objectives, such as, operating income or strategic
objectives that are related to specific projects, operational responsibilities or plan
implementations.

Awards will be based on the level of attainment of both the Company Objectives and the Individual
Objectives of each participant. However, the Board of Directors will set a minimum financial
threshold that must be attained for any incentive compensation to be paid.

Company management will conduct periodic progress reviews with participants during the year in the
monthly Key Performance Review (KPR) meetings to monitor progress and ensure on-going focus and
alignment.

FY 2009 Company Objectives and Incentive Targets 

Net Income will be used as the Company Objective to determine actual financial award payouts for
FY2009. For purposes of this Program, “Net Income” is defined as the net income shown on the
audited financial statements, adjusted for any special items, charges and credits, which the Board
Compensation Committee, in its sole discretion, determines are unusual or infrequently occurring
events or situations and also are not subject to the direct control of management.

The Company’s targeted Net Income goal for Incentive Compensation is [***]. The “minimum
threshold” for any payout is reached at [***] and the “maximum payout” is achieved at
[***] .

* The target Net Income for 2009 has been set using [***] million for the base business
and [***] million for the Pawn Plus, Las Vegas acquisition for three quarters of the
fiscal year.

The payout based upon financial participation for a participant can be read from the following
matrix based on FY2009 “Net Income.”

	 	 	 	 	 	 	 	 	 	 	 	 	 
	Net Income	 	[***]	 	[***]	 	 	 	[***]
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Bonus Payout
	 	 	50	%	 	 	100	%	 	 	150	%

 

 

FY 2009 Individual Objectives and Incentive Targets

	 	1.	 	The Board Compensation Committee establishes all of the Incentive Compensation Plan
objectives for the Chairman of the Board and the President/CEO. The Chairman of the Board
and the President/CEO do not have Individual Objectives as defined by this Plan and will
have their incentive award determined solely by the achievement of the overall Company’s
Financial Objectives as approved by the Board Compensation Committee.
	 
	 	2.	 	The Executive Committee establishes Departmental Objectives for FY2009 for all other
participants. Based upon those Departmental Objectives, participants are assigned
Individual Objectives for the FY2009 Incentive Compensation Program. Except for the
Company Objectives of the Chairman of the Board and the President/CEO, these Individual
Objectives are subject to revisions based upon changing circumstances as deemed appropriate
by the President/CEO throughout the year.
	 
	 	3.	 	The quality of the output of specific Individual Objectives is a substantial portion of
the payout rating. To ensure consistency in the scoring of the performance in achieving
Individual Objectives by individual participants, the following definitions and payout
structure are provided:

	 	 	 	 	 
	 

	 	* Achieved or exceeds the target goal
	 	Payout 100%
	 
	 

	 	* Slight miss of the target goal
	 	Payout 50% to 75%
	 
	 

	 	* Miss minimum target goal
	 	Payout zero

	 	4.	 	The Individual Objectives portion of the incentive award is maximized at 100% of the
allocated percentage. For participants, other than the Chairman of the Board and the
President/CEO, the Executive Committee will determine scores to be given.
	 
	 	5.	 	The relative weighting of Company and Individual Objectives will be determined based
upon the individual position and the amount of control they have on the achievement of the
Objectives. Therefore, individual participants will have different weighting between
Company and Individual Objectives, as shown for key executives in Schedule “A”.

Calculation of Incentive Compensation Payout

The Company Objectives and the Individual Objectives will be scored based upon the actual results
achieved for the Program year. Each participant’s actual payout will be determined using the
formula below:

 

 

	 	 	 	 	 	 	 	 	 
	A.

	 	% Company Objective

Participation
	 	___%
	 	(A1)
	 	(assigned, see personal documentation)
	 
	 	 	 	 	 	 	 	 
	 

	 	Matrix Rating
	 	___%
	 	(A2)
	 	(Company financial goal; percent
achievement)
	 
	 	 	 	 	 	 	 	 
	 

	 	(A1 x A2) =
	 	___%
	 	(A3)
	 	(Company Objective Factor)
	 
	 	 	 	 	 	 	 	 
	B.

	 	% Individual Objectives

Participation
	 	___%
	 	(B1)
	 	(assigned, see personal documentation)
	 
	 	 	 	 	 	 	 	 
	 

	 	Weighted Rating for

Individual Objectives
	 	___%
	 	(B2)
	 	(sum of all individual objective
ratings divided by the number of
assigned objectives)
	 
	 	 	 	 	 	 	 	 
	 

	 	(B1 x B2) =
	 	___%
	 	(B3)
	 	(Individual Objective Factor)
	 
	 	 	 	 	 	 	 	 
	C.

	 	Base Salary as of
October 1, 2008
	 	$___
	 	(C1)	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	Participation Factor
	 	___%
	 	(C2)
	 	(Sum of A3 + B3)
	 
	 	 	 	 	 	 	 	 
	 

	 	(C1 x C2) =
	 	$___
	 	(C3)
	 	Incentive Payout

Calculation Example:

1.   Participant has a base salary = $60,000

2.   Participant has a Company Objective incentive potential of 5% of Base Salary

3.   Participant has a Individual Objective incentive potential of 10% of Base Salary

4.   The Company achieves Net Income resulting in a 150% financial payout

5.   Participant achieved 75% of overall weighting for Individual Objectives

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	A.
	 	Company Obj. Potential
	 	 	5	%	 	(A1)
	 	(assigned, see personal documentation)
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	Company Matrix Rating
	 	 	150	%	 	(A2)	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	(A1 x A2) =
	 	 	7.50	%	 	(A3)
	 	(Company Factor)
	 

	 	B.
	 	Individual Obj. Potential
	 	 	10	%	 	(B1)
	 	(assigned, see personal documentation)
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	Weighted Rating
	 	 	75	%	 	(B2)
	 	(sum of all individual objective
ratings divided by the number of
assigned objectives)
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	(B1 x B2) =
	 	 	7.50	%	 	(B3)
	 	(Objective Factor)
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	C.
	 	Base Salary
as of 10/1/08
	 	$	60,000	 	 	(C1)	 	 
	 

	 	 	 	Participation Factor (A3 + B3)
	 	 	 15.0	%	 	(C2)
	 	(Sum of Company Factor and Individual Factor)
	 

	 	 	 	(C1 x C2) =
	 	$	9,000	 	 	(C3)
	 	Incentive Payout
	 

	 	 	 	 	 	 	 	 	 	 	 	 

Incentive Program Funding

Funding for the Incentive Compensation Program will be based on the number of participants selected
for the individual Program year and their individual level of participation. At the beginning of
each fiscal year, a budget will be established based on participant information and on economic,
operational and financial profitability. The full amount of the Program payouts will be included
in the administrative

 

 

expense of the Company prior to the determination of the Company’s final results for ICP purposes.
Therefore, the funding of the ICP payouts is a part of the financial results of the Company for
incentive calculations.

Administration of the Program

Amendments to or termination of the Program

While it is the intention of the Company to provide an incentive compensation plan annually,
the Company, with the approval of the Compensation Committee, reserves the right to:

ü    Amend or modify the incentive plan in its entirety;

ü    Suspend or terminate the Program at any time.

Performance Measurement

	 	1.	 	Except for the Chairman of the Board and the President/CEO (whose awards are determined
by the Board Compensation Committee based upon their specific criteria), the Executive
Committee, at its sole discretion, will score each Individual Objective and the individual
performance of each ICP participant as it relates to that specific Individual Objective.
Participants who share a common Individual Objective may be rated differently based upon
their contribution to the achievement or lack of achievement of that specific objective.
	 
	 	2.	 	The fact that an associate is initially selected as eligible to participate in the ICP
does not mean that he or she is entitled to or guaranteed receipt of an incentive
compensation award.
	 
	 	3.	 	Actions taken by a participant in the Program to enhance his or her incentive pay at
the expense of the long-term benefit of the Company will result in the participant being
disqualified as a Program participant, at the sole discretion of the Company.
	 
	 	4.	 	Except for the Chairman of the Board and the President/CEO, if it can be determined by
the Company, at its sole discretion, that a participant’s actions throughout the ICP year
did not support or actually worked against their team’s ability to meet its objective, the
participant will not receive any incentive compensation award even if all of the objectives
are obtained. For the Chairman of the Board and the President/CEO, the Board Compensation
Committee may make this determination and their decision will be final and binding.
	 
	 	5.	 	The Compensation Advisory Group reserves the right, in its sole discretion, to
establish the measurement systems associated with this Program and to approve in advance,
departmental and Individual Objectives.
	 
	 	6.	 	Any participant who receives an “UNSATISFACTORY” appraisal rating as determined by the
Company or the Board Compensation Committee, in its sole discretion, for the incentive
period will not be eligible for an incentive award for that period. Incentive
awards for participants with a “MARGINAL” appraisal rating for the incentive period must be
approved by the President/CEO in writing before being awarded.

 

 

No Implied Contract

The information presented in this Program shall not in any way be construed to constitute a
binding employment or compensation contract between the Company and its associates, nor
shall it in any way affect the “employment-at-will relationship” between associates and the
Company.

Rules Concerning Awards Payments and Participation

	 	1.	 	Participants must be employed with the Company at the time incentive payments are made
to be eligible to receive an award
	 
	 	2.	 	Participants who voluntarily or involuntarily leave the service of the Company shall
not be entitled to receive an award at the end of the Program year.
	 
	 	3.	 	Except for the Chairman of the Board, the President/CEO and all company officers,
recommendations to include a new hire, change a participant’s incentive level or add a
promoted associate into the Program at any time during the Program year must be approved by
the President/CEO. This action is mandatory before informing any associate of their
participation in the Program. Partial year participant awards, if any, will be prorated
based upon full months of the associate’s inclusion into the Program and their achievement
of Program year objectives.
	 
	 	4.	 	Associates hired after the second fiscal quarter (March 31, 2009) will not normally be
eligible for participation until the following Program year. The President/CEO must approve
any exceptions to the above in advance. Approval of such exception is mandatory
before informing any associate of their participation in the Program.

Discretionary Awards

The President/CEO will have the authority to award “discretionary bonuses” at year-end. These
awards will be granted to individuals based upon the associate’s contribution toward either the
achievement of the Company’s strategic objectives or the FY2009 financial plan. Individual awards
will not exceed [***]; aggregate of awards will not exceed [***] annually.

Effective Date of the Program:

This Program shall be in effect for the fiscal year 2009.

 

 

Approvals:

	 	 	 
	 

	 	Date: September 29, 2008
	 

Joe Rotunda

	 	 
	President & Chief Executive Officer
	 	 
	 
	 	 
	 

	 	Date: September 29, 2008
	 

Robert Kasenter

	 	 
	Sr. Vice President, Administration
	 	 
	 
	 	 
	 

	 	Date: September 29, 2008
	 

Connie Kondik

	 	 
	VP & General Counsel, Secretary to the Board
	 	 
	Confirming Compensation Committee Approval
	 	 

 

 

Schedule A

FY 2009 ICP Participants List

[***]

2009 ICP Objectives

[***]exv10w120

Exhibit 10.120

STOCK PURCHASE PLAN AND AGREEMENT

This Stock Purchase Plan and Agreement (this “Plan”) made this 13th day of August, 2008
by and between Morgan Stanley & Co. Incorporated (“Broker”) and Brocade Communications Systems,
Inc., a Delaware corporation (“Purchaser”).

     WHEREAS, Purchaser has entered into a definitive agreement to purchase Foundry Networks(R),
Inc. (Nasdaq: FDRY) (the “Target”) for consideration in the amount of a combination of $18.50 of
cash plus 0.0907 shares of Brocade common stock in exchange for each share of Foundry common stock
(the “Acquisition”).

     WHEREAS, Purchaser wishes to enter into this Plan for the purpose of establishing and adopting
a written plan for trading securities that complies with the requirements of Rule 10b5-1(c)(1)
under the Securities and Exchange Act of 1934, as amended (the “Exchange Act”).

     WHEREAS, Purchaser is establishing and adopting this Plan to provide for the orderly purchase
of a certain amount of shares of common stock of Foundry Networks, Inc. (the “Stock”) prior to the
consummation of the Acquisition; and

     WHEREAS, subject to the terms and conditions herein, Broker shall act as agent on behalf of
Purchaser in connection with this Plan.

     NOW THEREFORE, the parties hereto agree as follows:

A. Purchaser’s Representations, Warranties and Covenants. Purchaser hereby represents and
warrants to and agrees with Broker as follows:

     1. As of the date hereof, Purchaser is not aware of any material nonpublic information
concerning itself, the Target, or any of its securities or any of the companies whose securities it
purchases, including the Stock. Purchaser is entering into this Plan in good faith and not as part
of a plan or scheme to evade compliance with the federal securities laws, including the provisions
of Rule 10b5-1(c)(1)(ii). Subject to Purchaser’s right to terminate this Plan, Purchaser shall not
alter or modify the terms of this Plan while aware of any material non-public information with
respect to itself or its securities.

     2. During any Period (as defined on Exhibit A of this Plan), Purchaser shall not make
any purchase of Stock or otherwise enter into or alter any corresponding or hedging transaction or
position in the Stock that is or would become effective during the Period of this Plan, except for
purchases of Stock by Broker, whether or not pursuant to this Plan, or in accordance with the
Acquisition.

     3. Purchaser acknowledges and agrees that the execution and delivery of this Plan by Purchaser
and the transactions contemplated by this Plan will not contravene applicable law or any material
agreement or other instrument (including agreements relating to the Acquisition)

1.

 

binding on Purchaser or any judgment, order or decree of any governmental body, agency or
court having jurisdiction over Purchaser. The transactions to be made by Broker for the account of
Purchaser pursuant to this Plan will not violate Purchaser’s insider trading policies.

     4. Purchaser agrees to notify Broker orally or in writing at the addresses and facsimile
numbers set forth in paragraph E.4 hereof as soon as practicable after Purchaser has knowledge of
any material pending or threatened legal, contractual or regulatory restriction that would
restrict, limit or prohibit the purchase of Stock pursuant to this Plan. Such notice shall
indicate, to the extent then known by Purchaser, the anticipated onset and duration of the
restriction, but shall not include any other information about the nature of the restriction or its
applicability to Purchaser or Purchaser’s affiliates and shall not in any way communicate any
material nonpublic information about the Purchaser or its securities to Broker. Any such notice
received by Broker from Purchaser shall operate to, as indicated in such notice, suspend, amend or
terminate this Plan.

     5. Purchaser understands that Broker may from time to time not be able to affect purchases of
the Stock under the Plan due to market conditions or legal, regulatory or contractual restrictions
applicable to Broker.

     6. Purchaser agrees that it shall not, directly or indirectly, communicate any material
non-public information relating to itself, the Target, its securities or the securities of the
companies whose securities it purchases, including the Stock, to any employee of Broker or its
affiliates who is known by Purchaser to be involved, directly or indirectly, in executing this Plan
at any time while this Plan is in effect.

     7. Purchaser agrees that, while this Plan is in effect, it shall comply with all laws, rules
and regulations applicable in connection with the execution of this Plan and the transactions
contemplated hereby.

     8. Purchaser acknowledges and agrees that, while this Plan is in effect, Purchaser does not
have, and shall not attempt to exercise, directly or indirectly, any influence over how, when or
whether to effect purchases of Stock pursuant to this Plan.

B. Implementation of the Plan

     1. Purchase instructions are set forth on Exhibit A of this Plan and shall be deemed a
part of this Plan. Broker shall commence purchases under this Plan only during a Period (as
defined on Exhibit A of this Plan) and may effect such purchases on any day during a Period
that the principal market on which the Stock trades is open (each such a potential “Trading Day”)
under the ordinary principles of best execution with no shares to be purchased during the term of
this Plan other than in accordance with the guidelines and provisions set forth herein.

     2. Broker’s Execution. It is understood and agreed that the acceptance of Purchaser’s
orders herein by Broker does not constitute a guarantee or other assurance of any kind that
purchases of Stock can or will be made at any particular price on any Trading Day. Broker shall
make purchases under this Plan under ordinary principles of best execution. Broker will not be

2.

 

liable for any failure to purchase Stock, or to purchase Stock at any particular price, on any
Trading Day, so long as it exercises reasonable efforts in good faith to execute this Plan in
accordance with its terms. Broker will comply with all applicable laws, rules and regulations in
its execution of the Plan.

     3. Stock Splits, etc. The Aggregate Dollar Amount, Daily Purchase Limitation, Limit
Price and Maximum Number of Shares (if applicable), each as defined on Exhibit A of this
Plan, or any other applicable share references or price limits under applicable formulas and any
other applicable provisions of this Plan shall be adjusted automatically on a proportionate basis
to take into account any stock split, reverse stock split or stock dividend with respect to the
Stock or any similar transaction with respect to the Stock that occurs during this Plan.

     4. Compensation. Purchaser will pay to Broker the fees and commissions set forth on
Exhibit B attached hereto in connection with this Plan and the transactions contemplated
hereby.

     5. Notification of Purchases. Broker will provide Purchaser, as soon as reasonably
practicable but not less than daily, reports of purchases executed under this Plan, at the number
or address set forth in section E.4 hereof.

     6. Amendment. Any alteration, suspension, or modification of this Plan by Purchaser
will be made in good faith and not as part of a plan or scheme to evade the prohibitions of Rule
10b5-1. In particular, subject to Purchaser’s right to terminate this Plan, Purchaser shall not
alter, suspend, or modify from the terms of this Plan while aware of any material non-public
information with respect to itself or its securities. Any alteration, modification, or amendment
of this Plan, other than a termination of this Plan (which may take effect at any time but shall be
subject to Section C below), shall not take effect until sixty (60) days after the date the
alteration, modification or amendment is adopted. Any alteration, modification or amendment of any
plan with any other broker for purchase of Stock shall also be deemed an amendment of this Plan.

C. Termination or Suspension

     1. This Plan may not be terminated or suspended prior to the time designated pursuant to
paragraph C.2 hereof, except that it may be suspended or terminated upon written notice at any time
from Purchaser to the address or facsimile numbers set forth in paragraph E.4 hereof. Each such
notice from Purchaser shall indicate whether the Plan is being suspended or terminated and, in the
event of suspension, the expected duration of the suspension, but shall not in any way communicate
any material nonpublic information about Purchaser or its securities to Broker.

     2. This Plan will automatically terminate on the earliest of (a) the date on which Broker
receives notice of the commencement of any proceedings in respect of or triggered by any bankruptcy
or insolvency of Purchaser; (b) the date of Broker’s election, upon any failure by Purchaser to pay
for securities purchased hereunder; (c) the time at which the Maximum Number of Shares (if
applicable) set forth in Exhibit A has been purchased under this Plan; (d) the time at

3.

 

which the Aggregate Dollar Limit (if applicable) set forth in Exhibit A has been
purchased under this Plan; and (e) the Plan Expiration Date set forth in Exhibit A.

     3. Any termination of this Plan would require the Purchaser to enter into a new stock
repurchase plan and agreement or other Rule 10b5-1 trading arrangement with Broker to resume
purchases. Any new Rule 10b5-1 plan or arrangement entered into by the Purchaser after a
termination shall not be effective until at least sixty (60) days from the date of termination of
this Plan.

D. Limitation of Liability

     1. Notwithstanding any other provision hereof, neither Purchaser nor Broker shall be liable to
the other for:

	 	(a)	 	special, indirect, punitive, exemplary or consequential
damages, or incidental losses or incidental damages of any kind, even if
advised of the possibility of such losses or damages or if such losses or
damages could have been reasonably foreseen, or
	 
	 	(b)	 	any failure to perform or to cease performance or any delay in
performance that results from a cause or circumstance that is beyond its
reasonable control, including but not limited to failure of electronic or
mechanical equipment, strikes, failure of common carrier or utility systems,
severe weather, market disruptions or other causes commonly known as “acts of
God”.

     2. Purchaser has consulted with its own advisors as to the legal, tax, business, financial and
related aspects of, and has not relied upon Broker or any person affiliated with Broker in
connection with, Purchaser’s adoption and implementation of this Plan.

     3. Purchaser acknowledges and agrees that in performing its obligations under this Plan
neither Broker nor any of its affiliates nor any of their respective officers, employees or other
representatives is exercising any discretionary authority or discretionary control respecting
management of Purchaser’s assets, or exercising any authority or control respecting management or
disposition of Purchaser’s assets, or otherwise acting as a fiduciary (within the meaning of
Section 3(21) of the Employee Retirement Income Security Act of 1974, as amended, or Section
2510.3-21 of the Regulations promulgated by the United States Department of Labor) with respect to
Purchaser or Purchaser’s assets. Without limiting the foregoing, Purchaser further acknowledges and
agrees that neither Broker nor any of its affiliates nor any of their respective officers,
employees or other representatives has provided any “investment advice” within the meaning of such
provisions, and that no views expressed by any such person will serve as a basis for investment
decisions with respect to Purchaser’s assets.

     4. Purchaser agrees to indemnify and hold harmless Broker and its officers, directors,
employees, agents and affiliates from and against any losses, liabilities, claims, damages and
expenses (“Losses”), including but not limited to reasonable attorneys’ fees and the

4.

 

costs of investigating or defending any matter, arising out of or incurred in connection with
this Plan, except to the extent Losses have resulted from the fraud, bad faith, gross negligence or
willful misconduct of Broker.

E. General

     1. Purchaser and Broker acknowledge and agree that Broker is acting as broker for Purchaser in
connection with this Plan and that Purchaser is a “customer” of Broker within the meaning of
Section 741(2) of Title 11 of the United States Code (the “Bankruptcy Code”). Purchaser and Broker
further acknowledge and agree that this Plan is a “securities contract,” as such term is defined in
Section 741(7) of the Bankruptcy Code, entitled to all of the protections given such contracts
under the Bankruptcy Code.

     2. This Plan constitutes the entire agreement between the parties and supercedes any prior
agreements or understandings with respect to the subject matter hereof; provided that the terms and
conditions of any agreement(s) governing Purchaser’s account(s) with Broker and its affiliates
shall continue to apply with respect to the matters governed thereby and are hereby ratified and
confirmed.

     3. This Plan may be amended by Purchaser and may be reinstated following any suspension only
with the written consent of Broker.

     4. All notices to Purchaser and Broker under this Plan shall be given to all of the following
persons in the manner specified by this Plan by telephone, confirmed immediately in writing by
facsimile, email or overnight courier:

	 	 	 	 	 
	 

	 	If to Purchaser:
	 	Brocade Communications Systems, Inc.
	 

	 	 	 	ATTN: Richard Deranleau, Chief Financial Officer
	 

	 	 	 	1745 Technology Drive
	 

	 	 	 	San Jose, CA 95110
	 

	 	 	 	Phone: 408-333-8006
	 

	 	 	 	Fax: 408-333-6659
	 
	 	 	 	 
	 

	 	with copies to:
	 	Brocade Communications Systems, Inc.
	 

	 	 	 	ATTN: Bill Schenher, Stock Administration
	 

	 	 	 	1745 Technology Drive
	 

	 	 	 	San Jose, CA 95110
	 

	 	 	 	Phone: 408-333-5663
	 

	 	 	 	Fax: 408-333-6659
	 
	 	 	 	 
	 

	 	and:
	 	Brocade Communications Systems, Inc.
	 

	 	 	 	ATTN: Tyler Wall, General Counsel and Secretary
	 

	 	 	 	1745 Technology Drive
	 

	 	 	 	San Jose, CA 95110
	 

	 	 	 	Phone: 408-333-8000
	 

	 	 	 	Fax: 408-333-5630

5.

 

If to Broker:

All notices to Morgan Stanley under this Agreement shall be given to Morgan Stanley’s compliance
office in the manner specified by this Agreement by telephone at (212) 762-6000, by facsimile at
(212) 761-9709 or by certified mail to the address below:

Morgan Stanley & Co. Incorporated

Control Group

1221 Avenue of the Americas

New York, NY 10020

Attn: Dennine Bullard/Mathias Kramer

with a copy to:

Anthony Cicia

Morgan Stanley & Co. Incorporated

Legal Department

1221 Avenue of the Americas

New York, NY 10020

Facsimile: (212) 507-4338

     5. Each party’s respective rights and obligations under this Plan may not be assigned or
delegated without the prior written permission of the other parties. Notwithstanding the foregoing,
it is understood and agreed that Broker may utilize the services of brokers and other
intermediaries in connection with making the purchases of Stock hereunder, without the consent of
Purchaser.

     6. This Plan may be signed in any number of counterparts, each of which shall be an original,
with the same effect as if the signatures thereto and hereto were upon the same instrument.
Delivery of an executed counterpart of this Plan by telecopier or facsimile transmission shall
constitute due and effective delivery thereof.

     7. If any provision of this Plan is or becomes inconsistent with any applicable present or
future law, rule or regulation, that provision will be deemed modified or, if necessary, rescinded
in order to comply with the relevant law, rule or regulation. All other provisions of this Plan
will continue and remain in full force and effect.

     8. All transactions contemplated under this Plan shall be effected in the State of New York.
This Plan, and all transactions contemplated hereunder, shall be governed by and construed in
accordance with the laws of the State of New York.

6.

 

     IN WITNESS WHEREOF, the undersigned have signed this Plan as of the date set forth in the
first paragraph hereof.

	 	 	 	 	 	 	 
	 

	 	BROKER:	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	Morgan Stanley & Co. Incorporated	 	 
	 
	 	 	 	 	 	 
	 
	 	Signature:  /s/ Darrell R. Alfieri	 	 
	 
	 	
 
	 	 
	 	 	Print Name: Darrell R. Alfieri	 	 
	 	 	Title: Executive Director	 	 
	 	 	Date: 8/13/08	 	 
	 
	 	 	 	 	 	 
	 

	 	PURCHASER:	 	 
	 
	 	 	 	 	 	 
	 	 	Brocade Communications Systems, Inc.	 	 
	 
	 
	 	Signature:	 	 	 	 
	 
	 	
 
	 	 
	 
	 
	 	Print Name:	 	 	 	 
	 
	 	
 

	 	 
	 
	 
	 	Title:	 	 	 	 
	 
	 	
 
	 	 
	 
	 
	 	Date:	 	 	 	 
	 
	 	
 
	 	 

[Signature Page
to Stock Purchase Plan and Agreement]

 

 

Exhibit A

1. Broker shall commence the purchase of shares of Stock under this Plan, in accordance with table
below, beginning on the Commencement Date and shall continue until the Plan is terminated in
accordance with paragraph C. of the Plan.

2. The following terms shall have the following meanings under the Plan and this Exhibit A:

	 	 	“Aggregate Dollar Limit” means $250,000,000 of Stock (excluding fees).
	 
	 	 	“Commencement Date” means the start of the second business day following the day on which
Purchaser notifies Broker that it has filed a current report on Form 8-K, Item 2.02 Results
of Operations and Financial Condition, with the Securities and Exchange Commission (“SEC”),
which includes Purchaser’s press release announcing its third quarter FY 2008 earnings.
	 
	 	 	“Daily Purchase Limitation” means purchases of no more than 25% of the 5-day trailing
average trading volume of the Stock.
	 
	 	 	“HSR Notification Date” means the business day following the day on which Broker shall
receive an email notification from Cooley Godward Kronish LLP that the waiting period for
the HSR filing by Purchaser and Foundry shall have expired or been early terminated.
	 
	 	 	“Limit Price” means a price of NO GREATER THAN $18.47 per share of Stock.
	 
	 	 	“Maximum Number of Shares” means 14,000,000 shares of Stock.
	 
	 	 	“Plan Expiration Date” means the earlier to occur of (a) the date of the Foundry’s
shareholders’ meeting at which the shareholders do not approve the Acquisition and (b) the
date on which the closing of the Acquisition shall occur.

3. The Broker shall make the purchases under the Plan in accordance with the following table unless
the Plan is terminated in accordance with paragraph C. of the Plan:

	 	 	 	 	 	 	 	 	 
	 	 	Maximum Dollar Limit	 	 	 	 	 	 
	 	 	of Shares to be	 	 	 	Purchase	 	 
	 	 	Purchased in Period	 	Broker’s	 	Price	 	Share Purchase
	Periods	 	(excluding fees)	 	Fees	 	Limitations	 	Limitations
	Commencement Date
until the date
 that
Stock in the amount
of the
 Maximum
Dollar Limit is
acquired
	 	$60,000,000
	 	$.03 per share
	 	Limit Price
	 	Daily Purchase
Limitation; 
Maximum
Number of
 Shares
	HSR Notification
Date until the date 

that Stock in the
amount of the 

Maximum Dollar
Limit is acquired
	 	$190,000,000
	 	$.03 per share
	 	Limit Price
	 	Daily Purchase
Limitation;
 Maximum
Number of 
Shares
	Total
	 	$250,000,000
	 	 	 	 	 	14,000,000 shares of Stock

 

 

	 	 	 	 	 	 	 
	 
	 	PURCHASER:
	 
	 	 
	 

	 	Brocade Communications Systems, Inc.
	 
	 	 
	 
	 	Signature:
	 
	 	
 

	 
	 	 
	 
	 	Print Name:
	 
	 	
 

	 
	 	 
	 
	 	Title:
	 
	 	
 

	 
	 	 
	 
	 	Date:
	 
	 	
 

	 
	 	 	ACKNOWLEDGED:	 	 
	 
	 	 	 	 	 	 
	 	 	Morgan Stanley & Co. Incorporated	 	 
	 
	 	 	 	 	 	 
	 

	 	Signature:  /s/ Darrell R. Alfieri	 	 
	 
	 	
 

	 	 	Print Name: Darrell R. Alfieri	 	 
	 	 	Title: Executive Director	 	 
	 	 	Date: 8/13/08	 	 

[Signature Page to
Exhibit A to Stock Purchase Plan and Agreement]

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