Document:

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                                                                    EXHIBIT 10.4

                       CATAPULT COMMUNICATIONS CORPORATION

                                 1998 STOCK PLAN

                   (As Amended and Restated October 28, 2003)

         1.       Purposes of the Plan. The purposes of this Stock Plan are:

                  -        to attract and retain the best available personnel
                           for positions of substantial responsibility,

                  -        to provide additional incentive to Employees,
                           Directors and Consultants, and

                  -        to promote the success of the Company's business.

         Options granted under the Plan may be Incentive Stock Options or
Nonstatutory Stock Options, as determined by the Administrator at the time of
grant. Stock Purchase Rights may also be granted under the Plan.

         2.       Definitions. As used herein, the following definitions shall
apply:

                  (a)      "Administrator" means the Board or any of its
Committees as shall be administering the Plan, in accordance with Section 4 of
the Plan.

                  (b)      "Applicable Laws" means the requirements relating to
the administration of stock option plans under U.S. state corporate laws, U.S.
federal and state securities laws, the Code, any stock exchange or quotation
system on which the Common Stock is listed or quoted and the applicable laws of
any foreign country or jurisdiction where Options or Stock Purchase Rights are,
or will be, granted under the Plan.

                  (c)      "Board" means the Board of Directors of the Company.

                  (d)      "Change in Control" means the occurrence of any of
the following events:

                           (i)      Any "person" (as such term is used in
Sections 13(d) and 14(d) of the Exchange Act), other than (A) a trustee or other
fiduciary holding securities under an employee benefit plan of the Company
acting in such capacity, (B) a corporation owned directly or indirectly by the
stockholders of the Company in substantially the same proportions as their
ownership of stock of the Company or (C) Richard A. or Nancy H. Karp, becomes
the "beneficial owner" (as defined in Rule 13d-3 of the Exchange Act), directly
or indirectly, of securities of the Company representing fifty percent (50%) or
more of the total voting power represented by the Company's then outstanding
voting securities; or

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                           (ii)     The consummation of the sale or disposition
by the Company of all or substantially all of the Company's assets; or

                           (iii)    The consummation of a merger or
consolidation of the Company with any other corporation, other than a merger or
consolidation which would result in the voting securities of the Company
outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving entity or its parent) at least fifty percent (50%) of the total voting
power represented by the voting securities of the Company or such surviving
entity or its parent outstanding immediately after such merger or consolidation.

                  (e)      "Code" means the Internal Revenue Code of 1986, as
amended.

                  (f)      "Committee" means a committee of Directors appointed
by the Board in accordance with Section 4 of the Plan.

                  (g)      "Common Stock" means the common stock of the Company.

                  (h)      "Company" means Catapult Communication Corporation, a
Nevada corporation.

                  (i)      "Consultant" means any person, including an advisor,
engaged by the Company or a Parent or Subsidiary to render services to such
entity.

                  (j)      "Director" means a member of the Board.

                  (k)      "Disability" means total and permanent disability as
defined in Section 22(e)(3) of the Code.

                  (l)      "Employee" means any person, including Officers and
Directors, employed by the Company or any Parent or Subsidiary of the Company. A
Service Provider shall not cease to be an Employee in the case of (i) any leave
of absence approved by the Company or (ii) transfers between locations of the
Company or between the Company, its Parent, any Subsidiary, or any successor.
For purposes of Incentive Stock Options, no such leave may exceed ninety days,
unless reemployment upon expiration of such leave is guaranteed by statute or
contract. If reemployment upon expiration of a leave of absence approved by the
Company is not so guaranteed, on the 181st day of such leave any Incentive Stock
Option held by the Optionee shall cease to be treated as an Incentive Stock
Option and shall be treated for tax purposes as a Nonstatutory Stock Option.
Neither service as a Director nor payment of a director's fee by the Company
shall be sufficient to constitute "employment" by the Company.

                  (m)      "Exchange Act" means the Securities Exchange Act of
1934, as amended.

                  (n)      "Fair Market Value" means, as of any date, the value
of Common Stock determined as follows:

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                           (i)      If the Common Stock is listed on any
established stock exchange or a national market system, including without
limitation the Nasdaq National Market or The Nasdaq SmallCap Market of The
Nasdaq Stock Market, its Fair Market Value shall be the closing sales price for
such stock (or the closing bid, if no sales were reported) as quoted on such
exchange or system for the last market trading day prior to the time of
determination, as reported in The Wall Street Journal or such other source as
the Administrator deems reliable;

                           (ii)     If the Common Stock is regularly quoted by a
recognized securities dealer but selling prices are not reported, the Fair
Market Value of a Share of Common Stock shall be the mean between the high bid
and low asked prices for the Common Stock on the last market trading day prior
to the day of determination, as reported in The Wall Street Journal or such
other source as the Administrator deems reliable; or

                           (iii)    In the absence of an established market for
the Common Stock, the Fair Market Value shall be determined in good faith by the
Administrator.

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

                  (p)      "Nonstatutory Stock Option" means an Option not
intended to qualify as an Incentive Stock Option.

                  (q)      "Notice of Grant" means a written or electronic
notice evidencing certain terms and conditions of an individual Option or Stock
Purchase Right grant. The Notice of Grant is part of the Option Agreement.

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

                  (s)      "Option" means a stock option granted pursuant to the
Plan.

                  (t)      "Option Agreement" means an agreement between the
Company and an Optionee evidencing the terms and conditions of an individual
Option grant. The Option Agreement is subject to the terms and conditions of the
Plan.

                  (u)      "Optioned Stock" means the Common Stock subject to an
Option or Stock Purchase Right.

                  (v)      "Optionee" means the holder of an outstanding Option
or Stock Purchase Right granted under the Plan.

                  (w)      "Parent" means a "parent corporation," whether now or
hereafter existing, as defined in Section 424(e) of the Code.

                  (x)      "Plan" means this 1998 Stock Plan.

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                  (y)      "Restricted Stock" means shares of Common Stock
acquired pursuant to a grant of Stock Purchase Rights under Section 11 of the
Plan.

                  (z)      "Restricted Stock Purchase Agreement" means a written
agreement between the Company and the Optionee evidencing the terms and
restrictions applying to stock purchased under a Stock Purchase Right. The
Restricted Stock Purchase Agreement is subject to the terms and conditions of
the Plan and the Notice of Grant.

                  (aa)     "Rule 16b-3" means Rule 16b-3 of the Exchange Act or
any successor to Rule 16b-3, as in effect when discretion is being exercised
with respect to the Plan.

                  (bb)     "Section 16(b)" means Section 16(b) of the Exchange
Act.

                  (cc)     "Service Provider" means an Employee, Director or
Consultant.

                  (dd)     "Share" means a share of the Common Stock, as
adjusted in accordance with Section 13 of the Plan.

                  (ee)     "Stock Purchase Right" means the right to purchase
Common Stock pursuant to Section 11 of the Plan, as evidenced by a Notice of
Grant.

                  (ff)     "Subsidiary" means a "subsidiary corporation",
whether now or hereafter existing, as defined in Section 424(f) of the Code.

         3.       Stock Subject to the Plan. Subject to the provisions of
Section 13 of the Plan, the maximum aggregate number of Shares which may be
optioned and sold under the Plan is 2,800,000 Shares. The Shares may be
authorized, but unissued, or reacquired Common Stock.

         If an Option or Stock Purchase Right expires or becomes unexercisable
without having been exercised in full, the unpurchased Shares which were subject
thereto shall become available for future grant or sale under the Plan (unless
the Plan has terminated); provided, however, that Shares that have actually been
issued under the Plan, whether upon exercise of an Option or Right, shall not be
returned to the Plan and shall not become available for future distribution
under the Plan, except that if Shares of Restricted Stock are repurchased by the
Company at their original purchase price, such Shares shall become available for
future grant under the Plan.

         4.       Administration of the Plan.

                  (a)      Procedure.

                           (i)      Multiple Administrative Bodies. The Plan may
be administered by different Committees with respect to different groups of
Service Providers.

                           (ii)     Section 162(m). To the extent that the
Administrator determines it to be desirable to qualify Options granted hereunder
as "performance-based compensation" within the meaning of Section 162(m) of the
Code, the Plan shall be administered by a Committee of two or more "outside
directors" within the meaning of Section 162(m) of the Code.

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                           (iii)    Rule 16b-3. To the extent desirable to
qualify transactions hereunder as exempt under Rule 16b-3, the transactions
contemplated hereunder shall be structured to satisfy the requirements for
exemption under Rule 16b-3.

                           (iv)     Other Administration. Other than as provided
above, the Plan shall be administered by (A) the Board or (B) a Committee, which
committee shall be constituted to satisfy Applicable Laws.

                  (b)      Powers of the Administrator. Subject to the
provisions of the Plan, and in the case of a Committee, subject to the specific
duties delegated by the Board to such Committee, the Administrator shall have
the authority, in its discretion:

                           (i)      to determine the Fair Market Value;

                           (ii)     to select the Service Providers to whom
Options and Stock Purchase Rights may be granted hereunder;

                           (iii)    to determine the number of shares of Common
Stock to be covered by each Option and Stock Purchase Right granted hereunder;

                           (iv)     to approve forms of agreement for use under
the Plan;

                           (v)      to determine the terms and conditions, not
inconsistent with the terms of the Plan, of any Option or Stock Purchase Right
granted hereunder. Such terms and conditions include, but are not limited to,
the exercise price, the time or times when Options or Stock Purchase Rights may
be exercised (which may be based on performance criteria), any vesting
acceleration or waiver of forfeiture restrictions, and any restriction or
limitation regarding any Option or Stock Purchase Right or the shares of Common
Stock relating thereto, based in each case on such factors as the Administrator,
in its sole discretion, shall determine;

                           (vi)     to construe and interpret the terms of the
Plan and awards granted pursuant to the Plan;

                           (vii)    to prescribe, amend and rescind rules and
regulations relating to the Plan, including rules and regulations relating to
sub-plans established for the purpose of qualifying for preferred tax treatment
under foreign tax laws;

                           (viii)   to modify or amend each Option or Stock
Purchase Right (subject to Section 15(c) of the Plan), including the
discretionary authority to extend the post-termination exercisability period of
Options longer than is otherwise provided for in the Plan; provided, however,
that no modification or amendment may reduce the exercise price of an Option or
Stock Purchase Right after it has been granted (except for adjustments made
pursuant to Section 13), unless approved by the Company's stockholders;

                           (ix)     to allow Optionees to satisfy withholding
tax obligations by electing to have the Company withhold from the Shares to be
issued upon exercise of an Option or Stock Purchase Right that number of Shares
having a Fair Market Value equal to the amount required to be

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withheld. The Fair Market Value of the Shares to be withheld shall be determined
on the date that the amount of tax to be withheld is to be determined. All
elections by an Optionee to have Shares withheld for this purpose shall be made
in such form and under such conditions as the Administrator may deem necessary
or advisable;

                           (x)      to authorize any person to execute on behalf
of the Company any instrument required to effect the grant of an Option or Stock
Purchase Right previously granted by the Administrator;

                           (xi)     to make all other determinations deemed
necessary or advisable for administering the Plan.

                  (c)      Effect of Administrator's Decision. The
Administrator's decisions, determinations and interpretations shall be final and
binding on all Optionees and any other holders of Options or Stock Purchase
Rights.

         5.       Eligibility. Nonstatutory Stock Options and Stock Purchase
Rights may be granted to Service Providers. Incentive Stock Options may be
granted only to Employees.

         6.       Limitations.

                  (a)      Each Option shall be designated in the Option
Agreement as either an Incentive Stock Option or a Nonstatutory Stock Option.
However, notwithstanding such designation, to the extent that the aggregate Fair
Market Value of the Shares with respect to which Incentive Stock Options are
exercisable for the first time by the Optionee during any calendar year (under
all plans of the Company and any Parent or Subsidiary) exceeds $100,000, such
Options shall be treated as Nonstatutory Stock Options. For purposes of this
Section 6(a), Incentive Stock Options shall be taken into account in the order
in which they were granted. The Fair Market Value of the Shares shall be
determined as of the time the Option with respect to such Shares is granted.

                  (b)      Neither the Plan nor any Option or Stock Purchase
Right shall confer upon an Optionee any right with respect to continuing the
Optionee's relationship as a Service Provider with the Company, nor shall they
interfere in any way with the Optionee's right or the Company's right to
terminate such relationship at any time, with or without cause.

                  (c)      On the date grants of Options under the Plan are
required to comply with Section 162(m) of the Code, the following limitations
shall apply to grants of Options:

                           (i)      No Service Provider shall be granted, in any
fiscal year of the Company, Options to purchase more than 225,000 Shares.

                           (ii)     In connection with his or her initial
service, a Service Provider may be granted Options to purchase up to an
additional 225,000 Shares which shall not count against the limit set forth in
subsection (i) above.

                           (iii)    The foregoing limitations shall be adjusted
proportionately in connection with any change in the Company's capitalization as
described in Section 13.

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                           (iv)     If an Option is canceled in the same fiscal
year of the Company in which it was granted (other than in connection with a
transaction described in Section 13), the canceled Option will be counted
against the limits set forth in subsections (i) and (ii) above. For this
purpose, if the exercise price of an Option is reduced, the transaction will be
treated as a cancellation of the Option and the grant of a new Option.

         7.       Term of Plan. Subject to Section 19 of the Plan, the Plan
shall become effective upon its adoption by the Board. It shall continue in
effect for a term of ten (10) years unless terminated earlier under Section 15
of the Plan.

         8.       Term of Option. The term of each Option shall be stated in the
Option Agreement, provided, however, that in the case of an Incentive Stock
Option granted to an Optionee who, at the time the Incentive Stock Option is
granted, owns stock representing more than ten percent (10%) of the total
combined voting power of all classes of stock of the Company or any Parent or
Subsidiary, the term of the Incentive Stock Option shall be five (5) years from
the date of grant or such shorter term as may be provided in the Option
Agreement.

         9.       Option Exercise Price and Consideration.

                  (a)      Exercise Price. The per share exercise price for the
Shares to be issued pursuant to exercise of an Option shall be determined by the
Administrator, subject to the following:

                           (i)      In the case of an Incentive Stock Option

                                    (A)      granted to an Employee who, at the
time the Incentive Stock Option is granted, owns stock representing more than
ten percent (10%) of the voting power of all classes of stock of the Company or
any Parent or Subsidiary, the per Share exercise price shall be no less than
110% of the Fair Market Value per Share on the date of grant.

                                    (B)      granted to any Employee other than
an Employee described in paragraph (A) immediately above, the per Share exercise
price shall be no less than 100% of the Fair Market Value per Share on the date
of grant.

                           (ii)     In the case of a Nonstatutory Stock Option,
the per Share exercise price shall be no less than 100% of the Fair Market Value
per Share on the date of grant.

                           (iii)    Notwithstanding the foregoing, Options may
be granted with a per Share exercise price of less than 100% of the Fair Market
Value per Share on the date of grant pursuant to a transaction described in
Section 424(a) of the Code and the regulations promulgated thereunder (i.e., a
merger, consolidation, acquisition of property or stock, separation,
reorganization, liquidation, a distribution (excluding ordinary dividends) or
change in the terms or number of outstanding Shares of the Company, or a change
in the name of the Company).

                  (b)      Waiting Period and Exercise Dates. At the time an
Option is granted, the Administrator shall fix the period within which the
Option may be exercised and shall determine any conditions which must be
satisfied before the Option may be exercised.

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                  (c)      Form of Consideration. The Administrator shall
determine the acceptable form of consideration for exercising an Option,
including the method of payment. In the case of an Incentive Stock Option, the
Administrator shall determine the acceptable form of consideration at the time
of grant. Such consideration may consist entirely of:

                           (i)      cash;

                           (ii)     check;

                           (iii)    promissory note;

                           (iv)     other Shares which (A) in the case of Shares
acquired upon exercise of an option, have been owned by the Optionee for more
than six months on the date of surrender, and (B) have a Fair Market Value on
the date of surrender equal to the aggregate exercise price of the Shares as to
which said Option shall be exercised;

                           (v)      consideration received by the Company under
a cashless exercise program implemented by the Company in connection with the
Plan;

                           (vi)     a reduction in the amount of any Company
liability to the Optionee, including any liability attributable to the
Optionee's participation in any Company-sponsored deferred compensation program
or arrangement;

                           (vii)    any combination of the foregoing methods of
payment; or

                           (viii)   such other consideration and method of
payment for the issuance of Shares to the extent permitted by Applicable Laws.

         10.      Exercise of Option.

                  (a)      Procedure for Exercise; Rights as a Shareholder. Any
Option granted hereunder shall be exercisable according to the terms of the Plan
and at such times and under such conditions as determined by the Administrator
and set forth in the Option Agreement. Unless the Administrator provides
otherwise, vesting of Options granted to Officers and Directors hereunder shall
be tolled during any unpaid leave of absence. An Option may not be exercised for
a fraction of a Share.

         An Option shall be deemed exercised when the Company receives: (i)
written or electronic notice of exercise (in accordance with the Option
Agreement) from the person entitled to exercise the Option, and (ii) full
payment for the Shares with respect to which the Option is exercised. Full
payment may consist of any consideration and method of payment authorized by the
Administrator and permitted by the Option Agreement and the Plan. Shares issued
upon exercise of an Option shall be issued in the name of the Optionee or, if
requested by the Optionee, in the name of the Optionee and his or her spouse.
Until the Shares are issued (as evidenced by the appropriate entry on the books
of the Company or of a duly authorized transfer agent of the Company), no right
to vote or receive dividends or any other rights as a shareholder shall exist
with respect to the Optioned Stock, notwithstanding the exercise of the Option.
The Company shall issue (or cause to be

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issued) such Shares promptly after the Option is exercised. No adjustment will
be made for a dividend or other right for which the record date is prior to the
date the Shares are issued, except as provided in Section 13 of the Plan.

         Exercising an Option in any manner shall decrease the number of Shares
thereafter available, both for purposes of the Plan and for sale under the
Option, by the number of Shares as to which the Option is exercised.

                  (b)      Termination of Relationship as a Service Provider. If
an Optionee ceases to be a Service Provider, other than upon the Optionee's
death or Disability, the Optionee may exercise his or her Option within such
period of time as is specified in the Option Agreement to the extent that the
Option is vested on the date of termination (but in no event later than the
expiration of the term of such Option as set forth in the Option Agreement). In
the absence of a specified time in the Option Agreement, the Option shall remain
exercisable for thirty (30) days following the Optionee's termination. If, on
the date of termination, the Optionee is not vested as to his or her entire
Option, the Shares covered by the unvested portion of the Option shall revert to
the Plan. If, after termination, the Optionee does not exercise his or her
Option within the time specified by the Administrator, the Option shall
terminate, and the Shares covered by such Option shall revert to the Plan.

                  (c)      Disability of Optionee. If an Optionee ceases to be a
Service Provider as a result of the Optionee's Disability, the Optionee may
exercise his or her Option within such period of time as is specified in the
Option Agreement to the extent the Option is vested on the date of termination
(but in no event later than the expiration of the term of such Option as set
forth in the Option Agreement). In the absence of a specified time in the Option
Agreement, the Option shall remain exercisable for twelve (12) months following
the Optionee's termination. If, on the date of termination, the Optionee is not
vested as to his or her entire Option, the Shares covered by the unvested
portion of the Option shall revert to the Plan. If, after termination, the
Optionee does not exercise his or her Option within the time specified herein,
the Option shall terminate, and the Shares covered by such Option shall revert
to the Plan.

                  (d)      Death of Optionee. If an Optionee dies while a
Service Provider, the Option may be exercised within such period of time as is
specified in the Option Agreement (but in no event later than the expiration of
the term of such Option as set forth in the Notice of Grant), by the Optionee's
estate or by a person who acquires the right to exercise the Option by bequest
or inheritance, but only to the extent that the Option is vested on the date of
death. In the absence of a specified time in the Option Agreement, the Option
shall remain exercisable for twelve (12) months following the Optionee's
termination. If, at the time of death, the Optionee is not vested as to his or
her entire Option, the Shares covered by the unvested portion of the Option
shall immediately revert to the Plan. The Option may be exercised by the
executor or administrator of the Optionee's estate or, if none, by the person(s)
entitled to exercise the Option under the Optionee's will or the laws of descent
or distribution. If the Option is not so exercised within the time specified
herein, the Option shall terminate, and the Shares covered by such Option shall
revert to the Plan.

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                  (e)      Buyout Provisions. The Administrator may at any time
offer to buy out for a payment in cash or Shares an Option previously granted
based on such terms and conditions as the Administrator shall establish and
communicate to the Optionee at the time that such offer is made.

         11.      Stock Purchase Rights.

                  (a)      Rights to Purchase. Stock Purchase Rights may be
issued either alone, in addition to, or in tandem with other awards granted
under the Plan and/or cash awards made outside of the Plan. After the
Administrator determines that it will offer Stock Purchase Rights under the
Plan, it shall advise the offeree in writing or electronically, by means of a
Notice of Grant, of the terms, conditions and restrictions related to the offer,
including the number of Shares that the offeree shall be entitled to purchase,
the price to be paid, and the time within which the offeree must accept such
offer. The offer shall be accepted by execution of a Restricted Stock Purchase
Agreement in the form determined by the Administrator.

                  (b)      Repurchase Option. Unless the Administrator
determines otherwise, the Restricted Stock Purchase Agreement shall grant the
Company a repurchase option exercisable upon the voluntary or involuntary
termination of the purchaser's service with the Company for any reason
(including death or Disability). The purchase price for Shares repurchased
pursuant to the Restricted Stock Purchase Agreement shall be the original price
paid by the purchaser and may be paid by cancellation of any indebtedness of the
purchaser to the Company. The repurchase option shall lapse at a rate determined
by the Administrator.

                  (c)      Other Provisions. The Restricted Stock Purchase
Agreement shall contain such other terms, provisions and conditions not
inconsistent with the Plan as may be determined by the Administrator in its sole
discretion.

                  (d)      Rights as a Shareholder. Once the Stock Purchase
Right is exercised, the purchaser shall have the rights equivalent to those of a
shareholder, and shall be a shareholder when his or her purchase is entered upon
the records of the duly authorized transfer agent of the Company. No adjustment
will be made for a dividend or other right for which the record date is prior to
the date the Stock Purchase Right is exercised, except as provided in Section 13
of the Plan.

         12.      Non-Transferability of Options and Stock Purchase Rights.
Unless determined otherwise by the Administrator, an Option or Stock Purchase
Right may not be sold, pledged, assigned, hypothecated, transferred, or disposed
of in any manner other than by will or by the laws of descent or distribution
and may be exercised, during the lifetime of the Optionee, only by the Optionee.
If the Administrator makes an Option or Stock Purchase Right transferable, such
Option or Stock Purchase Right shall contain such additional terms and
conditions as the Administrator deems appropriate.

         13.      Adjustments Upon Changes in Capitalization, Dissolution,
Merger or Asset Sale, or Change in Control

                  (a)      Changes in Capitalization. Subject to any required
action by the shareholders of the Company, the number of shares of Common Stock
covered by each outstanding Option and

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Stock Purchase Right, and the number of shares of Common Stock which have been
authorized for issuance under the Plan but as to which no Options or Stock
Purchase Rights have yet been granted or which have been returned to the Plan
upon cancellation or expiration of an Option or Stock Purchase Right, as well as
the price per share of Common Stock covered by each such outstanding Option or
Stock Purchase Right, shall be proportionately adjusted for any increase or
decrease in the number of issued shares of Common Stock resulting from a stock
split, reverse stock split, stock dividend, combination or reclassification of
the Common Stock, or any other increase or decrease in the number of issued
shares of Common Stock effected without receipt of consideration by the Company;
provided, however, that conversion of any convertible securities of the Company
shall not be deemed to have been "effected without receipt of consideration."
Such adjustment shall be made by the Board, whose determination in that respect
shall be final, binding and conclusive. Except as expressly provided herein, no
issuance by the Company of shares of stock of any class, or securities
convertible into shares of stock of any class, shall affect, and no adjustment
by reason thereof shall be made with respect to, the number or price of shares
of Common Stock subject to an Option or Stock Purchase Right.

                  (b)      Dissolution or Liquidation. In the event of the
proposed dissolution or liquidation of the Company, the Administrator shall
notify each Optionee as soon as practicable prior to the effective date of such
proposed transaction. The Administrator in its discretion may provide for an
Optionee to have the right to exercise his or her Option until ten (10) days
prior to such transaction as to all of the Optioned Stock covered thereby,
including Shares as to which the Option would not otherwise be exercisable. In
addition, the Administrator may provide that any Company repurchase option
applicable to any Shares purchased upon exercise of an Option or Stock Purchase
Right shall lapse as to all such Shares, provided the proposed dissolution or
liquidation takes place at the time and in the manner contemplated. To the
extent it has not been previously exercised, an Option or Stock Purchase Right
will terminate immediately prior to the consummation of such proposed action.

                  (c)      Merger or Asset Sale. In the event of a merger of the
Company with or into another corporation, or the sale of substantially all of
the assets of the Company, each outstanding Option and Stock Purchase Right
shall be assumed or an equivalent option or right substituted by the successor
corporation or a Parent or Subsidiary of the successor corporation. In the event
that the successor corporation refuses to assume or substitute for the Option or
Stock Purchase Right, the Optionee shall fully vest in and have the right to
exercise the Option or Stock Purchase Right as to all of the Optioned Stock,
including Shares as to which it would not otherwise be vested or exercisable. If
an Option or Stock Purchase Right becomes fully vested and exercisable in lieu
of assumption or substitution in the event of a merger or sale of assets, the
Administrator shall notify the Optionee in writing or electronically that the
Option or Stock Purchase Right shall be fully vested and exercisable for a
period of fifteen (15) days from the date of such notice, and the Option or
Stock Purchase Right shall terminate upon the expiration of such period. For the
purposes of this paragraph, the Option or Stock Purchase Right shall be
considered assumed if, following the merger or sale of assets, the option or
right confers the right to purchase or receive, for each Share of Optioned Stock
subject to the Option or Stock Purchase Right immediately prior to the merger or
sale of assets, the consideration (whether stock, cash, or other securities or
property) received in the merger or sale of assets by holders of Common Stock
for each Share held on the effective date of the transaction (and if holders
were offered a choice of consideration, the type of consideration chosen

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by the holders of a majority of the outstanding Shares); provided, however, that
if such consideration received in the merger or sale of assets is not solely
common stock of the successor corporation or its Parent, the Administrator may,
with the consent of the successor corporation, provide for the consideration to
be received upon the exercise of the Option or Stock Purchase Right, for each
Share of Optioned Stock subject to the Option or Stock Purchase Right, to be
solely common stock of the successor corporation or its Parent equal in fair
market value to the per share consideration received by holders of Common Stock
in the merger or sale of assets.

                  (d)      Additional Vesting for Certain Directors Upon Change
in Control. Unless the Option shall have become fully exercisable pursuant to
Sections 13(b) or 13(c) of the Plan, in the event of a Change in Control each
outstanding option granted to a Director who is not an Employee shall become
vested and exercisable as to an additional number of Shares equal to the number
of Shares which had become vested and exercisable immediately prior to the
Change in Control; provided, however, that in no event shall the Option become
vested and exercisable pursuant to this provision for a number of Shares greater
in the aggregate than the number of Shares subject to the Option. The
Administrator shall notify the Director in writing or electronically not less
than fifteen (15) days prior to the Change in Control that the vesting of the
Option shall accelerate and the Director shall be entitled to exercise the
Option as to the additional Shares concurrently with the Change in Control.

         14.      Date of Grant. The date of grant of an Option or Stock
Purchase Right shall be, for all purposes, the date on which the Administrator
makes the determination granting such Option or Stock Purchase Right, or such
other later date as is determined by the Administrator. Notice of the
determination shall be provided to each Optionee within a reasonable time after
the date of such grant.

         15.      Amendment and Termination of the Plan.

                  (a)      Amendment and Termination. The Board may at any time
amend, alter, suspend or terminate the Plan.

                  (b)      Shareholder Approval. The Company shall obtain
shareholder approval of any Plan amendment to the extent necessary and desirable
to comply with Applicable Laws.

                  (c)      Effect of Amendment or Termination. No amendment,
alteration, suspension or termination of the Plan shall (i) impair the rights of
any Optionee, unless mutually agreed otherwise between the Optionee and the
Administrator, which agreement must be in writing and signed by the Optionee and
the Company or (ii) permit the reduction of the exercise price of an Option or
Stock Purchase Right after it has been granted (except for adjustments made
pursuant to Section 13), unless approved by the Company's stockholders.
Termination of the Plan shall not affect the Administrator's ability to exercise
the powers granted to it hereunder with respect to Options granted under the
Plan prior to the date of such termination.

         16.      Conditions Upon Issuance of Shares.

                                      -12-

<PAGE>

                  (a)      Legal Compliance. Shares shall not be issued pursuant
to the exercise of an Option or Stock Purchase Right unless the exercise of such
Option or Stock Purchase Right and the issuance and delivery of such Shares
shall comply with Applicable Laws and shall be further subject to the approval
of counsel for the Company with respect to such compliance.

                  (b)      Investment Representations. As a condition to the
exercise of an Option or Stock Purchase Right, the Company may require the
person exercising such Option or Stock Purchase Right to represent and warrant
at the time of any such exercise that the Shares are being purchased only for
investment and without any present intention to sell or distribute such Shares
if, in the opinion of counsel for the Company, such a representation is
required.

         17.      Inability to Obtain Authority. The inability of the Company to
obtain authority from any regulatory body having jurisdiction, which authority
is deemed by the Company's counsel to be necessary to the lawful issuance and
sale of any Shares hereunder, shall relieve the Company of any liability in
respect of the failure to issue or sell such Shares as to which such requisite
authority shall not have been obtained.

         18.      Reservation of Shares. The Company, during the term of this
Plan, will at all times reserve and keep available such number of Shares as
shall be sufficient to satisfy the requirements of the Plan.

         19.      Shareholder Approval. The Plan shall be subject to approval by
the shareholders of the Company within twelve (12) months after the date the
Plan is adopted. Such shareholder approval shall be obtained in the manner and
to the degree required under Applicable Laws.

                                      -13-Exhibit 10.01

 

EXHIBIT 10.01

INTUIT INC.

1996 EMPLOYEE STOCK PURCHASE PLAN

As Amended Through July 30, 2003

     1. Establishment of Plan. The Company proposes to grant options for
purchase of the Company’s Common Stock, $0.01 par value, to eligible employees
of the Company and Participating Subsidiaries pursuant to this Plan. A total
of 5,400,0001 shares of the Company’s Common Stock is reserved for issuance
under this Plan. Such number shall be subject to adjustments effected in
accordance with Section 14 of this Plan. The Company intends this Plan to
qualify as an “employee stock purchase plan” under Section 423 of the Code
(including any amendments to or replacements of such Section), and this Plan
shall be so construed. Capitalized terms not defined in the text are defined
in Section 26 below. Any term not expressly defined in this Plan that is
defined in Section 423 of the Code shall have the same definition herein.

     2. Purpose. The purpose of this Plan is to provide eligible employees of
the Company and Participating Subsidiaries with a convenient means of acquiring
an equity interest in the Company through payroll deductions, to enhance such
employees’ sense of participation in the affairs of the Company and
Participating Subsidiaries, and to provide an incentive for continued
employment.

     3. Administration. This Plan shall be administered by the Committee.
Subject to the provisions of this Plan and the limitations of Section 423 of
the Code or any successor provision in the Code, all questions of
interpretation or application of this Plan and any agreement or document
executed pursuant to this Plan shall be determined by the Committee and its
decisions shall be final and binding upon all Participants. The Committee
shall have full power and authority to prescribe, amend and rescind rules and
regulations relating to this Plan, including determining the forms and
agreements used in connection with this 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 or her designee,
the authority to approve revisions to the forms and agreements used in
connection with this Plan that are designed to facilitate administration of the
Plan and that are not inconsistent with the Plan or with any resolutions of the
Committee relating to the Plan. The Committee may amend this Plan as described
in Section 25 below. Members of the Committee shall receive no compensation
for their services in connection with the administration of this Plan, other
than standard fees as established from time to time by the Board for services
rendered by Committee members serving on Board committees. All

1 On July 30, 2003 the Company’s Board of Directors amended this Plan to
increase the authorized share pool by 500,000 shares from 4,900,000 to
5,400,000 shares. This 500,000 share increase was approved by the Company’s
stockholders at the Company’s October 30, 2003 Annual Meeting.

 

 

Intuit Inc.

1996 Employee Stock Purchase Plan

expenses incurred in connection with the administration of this Plan shall be
paid by the Company.

     4. Eligibility.

          (a) Prior to the Offering Period commencing December 16, 2001, any
employee of the Company or of any Participating Subsidiary is eligible to
participate in an Offering Period under this Plan, except the following:

               (i) employees who are not employed fifteen (15) days before the beginning
of such Offering Period;

               (ii) employees who are customarily employed for less than twenty (20)
hours per week;

               (iii) employees who are customarily employed for less than five (5)
months in a calendar year; and

               (iv) employees who, together with any other person whose stock would be
attributed to such employee pursuant to Section 424(d) of the Code, own stock
or hold options to purchase stock possessing five percent (5%) or more of the
total combined voting power or value of all classes of stock of the Company or
any of its Subsidiaries or who, as a result of being granted an option under
this Plan with respect to such Offering Period, would own stock or hold options
to purchase stock possessing five percent (5%) or more of the total combined
voting power or value of all classes of stock of the Company or any of its
Subsidiaries.

          (b) Effective with the Offering Period commencing December 16, 2001, any
employee of the Company or of any Participating Subsidiary is eligible to
participate in an Offering Period under this Plan, except the following:

               (i) employees who are not employed fifteen (15) days before the beginning
of such Offering Period; and

               (ii) employees who, together with any other person whose stock would be
attributed to such employee pursuant to Section 424(d) of the Code, own stock
or hold options to purchase stock possessing five percent (5%) or more of the
total combined voting power or value of all classes of stock of the Company or
any of its Subsidiaries or who, as a result of being granted an option under
this Plan with respect to such Offering Period, would own stock or hold options
to purchase stock possessing five percent (5%) or more of the total combined
voting power or value of all classes of stock of the Company or any of its
Subsidiaries.

          (c) An individual who provides services to the Company, or any
Participating Subsidiary, as an independent contractor shall not be considered
an “employee” for purposes of this Section 4 or this Plan, and shall not be
eligible to participate in the Plan, except during

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Intuit Inc.

1996 Employee Stock Purchase Plan

such periods as the Company or the Participating Subsidiary, as applicable, is
required to withhold U.S. federal employment taxes for the individual. This
exclusion from participation shall apply even if the individual is reclassified
as an employee, rather than an independent contractor, for any purpose other
than U.S. federal employment tax withholding.

     5. Offering Dates.

          (a) Prior to the Offering Period commencing June 16, 2001, Offering
Periods shall be of six (6) months duration commencing on December 16 and June
16 of each year and ending on June 15 and December 15 of each year, except for
the first and second Offering Periods under this Plan. The first Offering
Period began on January 1, 1997 and ended on June 30, 1997, and the second
Offering Period began on July 1, 1997 and ended on December 15, 1997.

          (b) Effective with the Offering Period commencing June 16, 2001, Offering
Periods shall be of twelve (12) months duration commencing on December 16 and
June 16 of each year and ending on the following December 15 and June 15. Each
Offering Period shall consist of two six-month Accrual Periods during which
payroll deductions of the Participants are accumulated under this Plan.

          (c) Effective with the Offering Period commencing June 16, 2003, Offering
Periods shall be of twelve (12) months duration commencing on each June 16,
September 16, December 16 and March 16 and ending on the following June 15,
September 15, December 15 and March 15, respectively. Each Offering Period
shall consist of four three-month Accrual Periods during which payroll
deductions of the Participants are accumulated under this Plan. The Offering
Period commencing December 16, 2002 shall be a transitional Offering Period of
twelve (12) months duration comprised of one six-month Accrual Period
commencing on December 16, 2002 and ending on June 15, 2003 and two three-month
Accrual Periods, the first commencing on June 16, 2003 and ending on September
15, 2003 and the second commencing on September 16, 2003 and ending on December
15, 2003.

          (d) The Committee shall have the power to change the duration of Offering
Periods with respect to future offerings without stockholder approval if such
change is announced prior to the scheduled beginning of the first Offering
Period to be affected.

     6. Participation in this Plan. An eligible employee may become a
Participant in an Offering Period on the first Offering Date after satisfying
the eligibility requirements by following the enrollment procedures established
by the Company and enrolling in the Plan by the enrollment deadline established
by the Company before such Offering Date. The enrollment deadline shall be the
same for all eligible employees with respect to a given Offering Period. An
eligible employee who does not timely enroll after becoming eligible to
participate in such Offering Period shall not participate in that Offering
Period or any subsequent Offering Period unless such employee follows the
enrollment procedures established by the Company and enrolls in this Plan by
the enrollment deadline established by the Company before a subsequent Offering
Date. A Participant will automatically participate in each Offering Period
commencing immediately following the last day of the prior Offering Period
unless he or she withdraws or is deemed to withdraw from this Plan or
terminates

-3-

 

Intuit Inc.

1996 Employee Stock Purchase Plan

further participation in the Offering Period as set forth in Sections 11 or 12
below. A Participant is not required to file any additional agreement in order
to continue participation in this Plan. An employee may only participate in
one Offering Period at a time.

     7. Grant of Option on Enrollment. Enrollment by an eligible employee in
this Plan with respect to an Offering Period will constitute the grant (as of
the Offering Date) by the Company to such Participant of an option to purchase
on the Purchase Date up to that number of shares of Common Stock of the Company
determined by dividing (a) the amount accumulated in such employee’s payroll
deduction account during the applicable Accrual Period in such Offering Period
by (b) the lower of (i) eighty-five percent (85%) of the Fair Market Value of a
share of the Company’s Common Stock on the Offering Date (but in no event less
than the par value of a share of the Company’s Common Stock), or (ii)
eighty-five percent (85%) of the Fair Market Value of a share of the Company’s
Common Stock on the Purchase Date (but in no event less than the par value of a
share of the Company’s Common Stock); provided, however, that the number of
shares of the Company’s Common Stock subject to any option granted pursuant to
this Plan shall not exceed the maximum number of shares which may be purchased
pursuant to Sections 10(a), 10(b) or 10(c) below with respect to the applicable
Accrual Period. The fair market value of a share of the Company’s Common Stock
shall be determined as provided in Section 8 hereof.

     8. Purchase Price. The purchase price per share at which a share of
Common Stock will be sold to Participants in any Offering Period shall be
eighty-five percent (85%) of the lesser of:

          (a) The Fair Market Value on the Offering Date; or

          (b) The Fair Market Value on the Purchase Date;

provided, however, that in no event may the purchase price per share of the
Company’s Common Stock be below the par value per share of the Company’s Common
Stock.

     9. Payment Of Purchase Price; Changes In Payroll Deductions; Issuance Of
Shares.

          (a) The purchase price of the shares is accumulated by regular payroll
deductions made during each Accrual Period in an Offering Period. The
deductions are made as a percentage of the Participant’s compensation in one
percent (1%) increments not less than two percent (2%), nor greater than ten
percent (10%) or such lower limit set by the Committee. Compensation shall
mean base salary and commissions. Payroll deductions shall commence on the
first payday of each Accrual Period and shall end on the last payday that
occurs in such Accrual Period unless sooner altered or terminated as provided
in this Plan. Notwithstanding the foregoing, if the last payday that occurs in
an Accrual Period is within five business days prior to the Purchase Date, the
last payday may be deemed to be the immediately preceding payday, provided that
such determination is made and announced prior to the scheduled beginning of
the applicable Accrual Period.

-4-

 

Intuit Inc.

1996 Employee Stock Purchase Plan

          (b) A Participant may change the rate of payroll deductions during an
Offering Period as set forth below:

               (i) Effective for Offering Periods commencing on or before December 16,
2002 (and through the first six-month Accrual Period in such Offering Period),
a Participant may lower (but not increase) the rate of payroll deductions
during an Offering Period by filing with the Company a new authorization for
payroll deductions, in which case the new rate shall become effective after the
Company’s receipt of the authorization in accordance with the Company’s
administrative procedures for the Plan and shall continue for the remainder of
the Offering Period unless changed as described below. Such change lowering
the rate of payroll deductions may be made at any time during an Offering
Period, but not more than one (1) change may be made effective during any
Accrual Period. A Participant who lowers his or her rate of payroll deduction
during an Accrual Period may later request to cease payroll deductions during
the same Accrual Period under Section 9(d) below through the first six-month
Accrual Period in the Offering Period commencing December 16, 2002.

               (ii) Effective beginning with the first three-month Accrual Period in the
Offering Period commencing December 16, 2002 and for each subsequent Offering
Period, a Participant may lower or increase the rate of payroll deductions to
be effective with the next Accrual Period in the Offering Period in which the
Participant is enrolled by filing with the Company a new authorization for
payroll deductions. The Participant must file the authorization before the
beginning of the next Accrual Period during the same time period as enrollment
is open under Section 6 above.

          (c) A Participant may increase or decrease the rate of payroll deductions
for any subsequent Offering Period by filing with the Company a new
authorization for payroll deductions before the beginning of such Offering
Period by the deadline established by the Company and in accordance with the
Company’s administrative procedures for the Plan.

          (d) Effective with the Offering Period commencing December 16, 2000 and
ending with the first six-month Accrual Period in the Offering Period
commencing December 16, 2002, a participant may reduce his or her payroll
deduction rate to zero during an Offering Period by filing with the Company a
request to cease payroll deductions. Such request shall be effective after the
Company’s receipt of the request in accordance with the Company’s
administrative procedures for the Plan and provided the payroll deduction
suspension request is made by the deadline established by the Company no
further payroll deductions will be made for the duration of the Offering
Period. Payroll deductions credited to the Participant’s account prior to the
effective date of the request shall be used to purchase shares of Common Stock
of the Company in accordance with Section 9(f) below. A Participant may not
resume making payroll deductions during the Offering Period in which he or she
reduces his or her payroll deduction rate to zero. Unless the Participant
elects to withdraw effective following the purchase in accordance with Section
11 below, the Participant’s payroll deductions will automatically restart for
the Offering Period that begins immediately following the Purchase Date at the
rate that was in effect before the Participant filed his or her request to
cease payroll deductions.

-5-

 

Intuit Inc.

1996 Employee Stock Purchase Plan

          (e) All payroll deductions made for a Participant are credited to his or
her account under this Plan and are deposited with the general funds of the
Company. No interest accrues on the payroll deductions. All payroll
deductions received or held by the Company may be used by the Company for any
corporate purpose, and the Company shall not be obligated to segregate such
payroll deductions.

          (f) On each Purchase Date, so long as this Plan remains in effect and
provided that the Participant has not timely submitted a signed and completed
withdrawal form before that date which notifies the Company that the
Participant wishes to withdraw from that Offering Period under this Plan and
have all payroll deductions accumulated in the account maintained on behalf of
the Participant as of that date returned to the Participant, the Company shall
apply the funds then in the Participant’s account to the purchase of whole
shares of Common Stock reserved under the option granted to such Participant
with respect to the Offering Period to the extent that such option is
exercisable on the Purchase Date. The purchase price per share shall be as
specified in Section 8 of this Plan. Effective with the Offering Period
commencing June 16, 2001, any cash remaining in a Participant’s account after
such purchase of shares because the amount is insufficient to purchase a whole
share shall be returned to the Participant, without interest. Prior to the
Offering Period commencing June 16, 2001, any cash remaining in a Participant’s
account after such purchase of shares because the amount is insufficient to
purchase a whole share shall be carried forward, without interest, into the
next Accrual Period. Any cash remaining in a Participant’s account after such
purchase due to the limitations in Section 10 below shall be returned to the
Participant, without interest. Subject to Section 12 below, no Common Stock
shall be purchased on a Purchase Date on behalf of any employee or former
employee whose participation in this Plan has terminated prior to such Purchase
Date.

          (g) As promptly as practicable after the Purchase Date, the Company shall
issue shares representing the shares purchased.

          (h) During a Participant’s lifetime, such Participant’s option to
purchase shares hereunder is exercisable only by him or her. The Participant
will have no interest or voting right in shares covered by his or her option
until such option has been exercised. Shares issued for the benefit of a
Participant under this Plan will be issued to an account in the name of the
Participant or in the name of the Participant and his or her spouse.

     10. Limitations on Shares to be Purchased.

          (a) No Participant shall be entitled to purchase stock under this Plan at
a rate which, when aggregated with his or her rights to purchase stock under
all other employee stock purchase plans of the Company or any Subsidiary,
exceeds $25,000 in fair market value, determined as of the Offering Date (or
such other limit as may be imposed by the Code) for each calendar year in which
the employee is a Participant in this Plan.

          (b) No more than twice the number of shares that the Participant could
have purchased at the price on an Offering Date may be purchased by a
Participant on any single Purchase Date within that Offering Period.

-6-

 

Intuit Inc.

1996 Employee Stock Purchase Plan

          (c) No Participant shall be entitled to purchase more than the Maximum
Share Amount on any single Purchase Date. Prior to the commencement of any
Offering Period, the Committee may, in its sole discretion, set a Maximum Share
Amount. In no event shall the Maximum Share Amount exceed the amounts
permitted under Section 10(b) above. If a new Maximum Share Amount is set,
then all Participants must be notified of such Maximum Share Amount prior to
the deadline established by the Company to enroll or change the rate of payroll
deductions for the next Offering Period. Once the Maximum Share Amount is set,
it shall continue to apply with respect to all succeeding Offering Periods
unless revised by the Committee as set forth above.

          (d) If the number of shares to be purchased on a Purchase Date by all
Participants exceeds the number of shares then available for issuance under
this Plan, then the Company will make a pro rata allocation of the remaining
shares in as uniform a manner as shall be reasonably practicable and as the
Committee shall determine to be equitable. In such event, the Company shall
give written notice of such reduction of the number of shares to be purchased
under a Participant’s option to each Participant affected thereby.

          (e) Any payroll deductions accumulated in a Participant’s account which
are not used to purchase stock due to the limitations in this Section 10 shall
be returned to the Participant as soon as practicable after the end of the
applicable Accrual Period, without interest.

     11. Withdrawal.

          (a) Each Participant may withdraw from an Offering Period under this Plan
by withdrawing from the Plan in accordance to the procedures established by the
Company by the deadline established by the Company for withdrawals.

          (b) Upon withdrawal from this Plan, the accumulated payroll deductions
shall be returned to the withdrawn Participant, without interest, and his or
her interest in this Plan shall terminate. In the event a Participant
withdraws from this Plan in accordance with Section 11(a), he or she may not
resume his or her participation in this Plan during the same Offering Period,
but he or she may participate in any Offering Period under this Plan which
commences on a date subsequent to such withdrawal by filing a new authorization
for payroll deductions in the same manner as set forth above in Section 6 for
initial participation in this Plan.

          (c) If the Fair Market Value on the first day of a current Offering
Period in which a Participant is enrolled is higher than the Fair Market Value
on the first day of any subsequent Offering Period, the current Offering Period
will end following the Purchase Date and the Company will automatically enroll
such Participant in the Offering Period that begins immediately following the
Purchase Date. Any funds accumulated in the Participant’s account prior to the
first day of such subsequent Offering Period will be applied to the purchase of
shares on the Purchase Date immediately prior to the first day of such
subsequent Offering Period. A Participant does not need to file any forms with
the Company to

-7-

 

Intuit Inc.

1996 Employee Stock Purchase Plan

automatically be enrolled in the subsequent Offering Period in accordance with
this Section 11(c).

     12. Termination of Employment.

          (a) Effective with the Offering Period commencing December 16, 2001 and
ending with the Purchase Date of the first six-month Accrual Period in the
Offering Period commencing December 16, 2002, if a Participant terminates
employment for any reason within ninety (90) days prior to a Purchase Date,
payroll deductions credited to the Participant’s account prior to the date his
or her employment terminates shall be used to purchase shares of Common Stock
of the Company in accordance with Section 9(f) above. If, however, the
Participant or, in the event of the Participant’s death, the Participant’s
legal representative, elects to withdraw from the Plan in accordance with
Section 11 above, payroll deductions credited to the Participant’s account
prior to the date his or her employment terminates shall be returned to the
Participant or, in the case of his or her death, to his or her legal
representative, without interest. If a Participant terminates employment for
any reason more than ninety (90) days prior to a Purchase Date, payroll
deductions credited to the Participant’s account prior to the date his or her
employment terminates shall be returned to him or her or, in the case of his or
her death, to his or her legal representative, without interest.

          (b) Prior to the Offering Period commencing December 16, 2001 and
effective immediately following the first Purchase Date of the Offering Period
commencing December 16, 2002 and for subsequent Offering Periods, termination
of a Participant’s employment for any reason, including retirement, death or
the failure of a Participant to remain an eligible employee under Section 4
above, immediately terminates his or her participation in this Plan. In such
event, the payroll deductions credited to the Participant’s account will be
returned to him or her or, in the case of his or her death, to his or her legal
representative, without interest.

          (c) For purposes of this Section 12, an employee will not be deemed to
have terminated employment or failed to remain an eligible employee in the case
of sick leave, military leave, or any other leave of absence approved by the
Committee; provided that such leave is for a period of not more than ninety
(90) days or reemployment upon the expiration of such leave is guaranteed by
contract or statute.

     13. Return of Payroll Deductions. In the event a Participant’s interest
in this Plan is terminated by withdrawal, termination of employment or
otherwise, or in the event this Plan is terminated, the Company shall promptly
deliver to the Participant all payroll deductions credited to such
Participant’s account. No interest shall accrue on the payroll deductions of a
Participant in this Plan.

     14. Capital Changes. Subject to any required action by the stockholders
of the Company, the number of shares of Common Stock covered by each option
under this Plan which has not yet been exercised and the number of shares of
Common Stock which have been authorized for issuance under this Plan but have
not yet been placed under option, as

-8-

 

Intuit Inc.

1996 Employee Stock Purchase Plan

well as the price per share of Common Stock covered by each option under this
Plan which has not yet been exercised, shall be proportionately adjusted for
any increase or decrease in the number of issued and outstanding shares of
Common Stock of the Company resulting from a stock split or the payment of a
stock dividend (but only on the Common Stock) or any other increase or decrease
in the number of issued and outstanding shares of Common Stock effected without
receipt of any consideration by the Company; provided, however, that conversion
of any convertible securities of the Company shall not be deemed to have been
“effected without receipt of consideration”; and provided further, that the
price per share of Common Stock shall not be reduced below its par value per
share. Such adjustment shall be made by the Committee, whose determination
shall be final, binding and conclusive. Except as expressly provided herein,
no issue by the Company of shares of stock of any class, or securities
convertible into shares of stock of any class, shall affect, and no adjustment
by reason thereof shall be made with respect to, the number or price of shares
of Common Stock subject to an option.

     In the event of the proposed dissolution or liquidation of the Company,
each Offering Period will terminate immediately prior to the consummation of
such proposed action and the accrued payroll deductions will be returned to
each Participant without interest, unless otherwise provided by the Committee.
The Committee may, in the exercise of its sole discretion in such instances,
shorten each Offering Period in progress and establish a new Purchase Date (the
“Special Purchase Date”) upon which the accrued payroll deductions of each
Participant who does not elect to withdraw his or her payroll deductions will
be used to purchase whole shares with any remaining cash balance in a
Participant’s account being returned to such Participant as soon as
administratively practicable following the Special Purchase Date. In the event
of a proposed sale of all or substantially all of the assets of the Company, or
the merger or consolidation of the Company with or into another corporation,
each option under this Plan shall be assumed or an equivalent option shall be
substituted by such successor corporation or a parent or subsidiary of such
successor corporation. In the event the successor corporation does not assume
or substitute such options, the Committee shall shorten each Offering Period in
progress and establish a Special Purchase Date upon which the accrued payroll
deductions of each Participant who does not elect to withdraw his or her
payroll deductions will be used to purchase whole shares with any remaining
cash balance in a Participant’s account being returned to such Participant as
soon as administratively practicable following the Special Purchase Date. The
price at which each share may be purchased on such Special Purchase Date shall
be calculated in accordance with Section 8 above as if “Purchase Date” were
replaced by “Special Purchase Date”.

     The Committee may, if it so determines in the exercise of its sole
discretion, also make provision for adjusting the Reserves, as well as the
price per share of Common Stock covered by each outstanding option, in the
event that the Company effects one or more reorganizations, recapitalizations,
rights offerings or other increases or reductions of shares of its outstanding
Common Stock, or in the event of the Company being consolidated with or merged
into any other corporation; provided, that the price per share of Common Stock
shall not be reduced below its par value per share.

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Intuit Inc.

1996 Employee Stock Purchase Plan

     15. Nonassignability. Neither payroll deductions credited to a
Participant’s account nor any rights with regard to the exercise of an option
or to receive shares under this Plan may be assigned, transferred, pledged or
otherwise disposed of in any way (other than by will, the laws of descent and
distribution or as provided in Section 22 hereof) by the Participant. Any such
attempt at assignment, transfer, pledge or other disposition shall be void and
without effect.

     16. Reports. Individual accounts will be maintained for each Participant
in this Plan. Each Participant shall receive promptly after the end of each
Offering Period a report of his or her account setting forth the total payroll
deductions accumulated, the number of shares purchased, the per share price
thereof and any cash remaining in the Participant’s account after the shares
are purchased.

     17. Notice of Disposition. Effective January 1, 2003, in order that the
Company may properly report the compensation attributable to a Participant’s
disposition of shares purchased under this Plan, the Company may require
Participants to keep shares purchased under this Plan in an account established
with a broker dealer approved by the Company until the Participant sells, gifts
or transfers such shares by descent or distribution. Prior to such Offering
Period, each Participant may be required to notify the Company if the
Participant disposes of any of the shares purchased in any Offering Period
pursuant to this Plan if such disposition occurs within the Notice Period. The
Company may, at any time during the Notice Period, place a legend or legends on
any certificate representing shares acquired pursuant to this Plan requesting
the Company’s transfer agent to notify the Company of any transfer of the
shares. The obligation of the Participant to provide such notice shall
continue notwithstanding the placement of any such legend on the certificates.

     18. No Rights to Continued Employment. Neither this Plan nor the grant
of any option hereunder shall confer any right on any employee to remain in the
employ of the Company or any Subsidiary, or restrict the right of the Company
or any Subsidiary to terminate such employee’s employment.

     19. Equal Rights And Privileges. All eligible employees shall have equal
rights and privileges with respect to this Plan so that this Plan qualifies as
an “employee stock purchase plan” within the meaning of Section 423 or any
successor provision of the Code and the related regulations. Any provision of
this Plan which is inconsistent with Section 423 or any successor provision of
the Code shall, without further act or amendment by the Company or the
Committee, be reformed to comply with the requirements of Section 423. This
Section 19 shall take precedence over all other provisions in this Plan.

     20. Notices. All notices or other communications by a Participant to the
Company under or in connection with this Plan shall be deemed to have been duly
given when received in the form specified by the Company at the location, or by
the person, designated by the Company for the receipt thereof.

     21. Term; Stockholder Approval. This Plan became effective October 7,
1996, the date on which it was adopted by the Board and was approved by the
stockholders of the

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Intuit Inc.

1996 Employee Stock Purchase Plan

Company, in a manner permitted by applicable corporate law, within twelve (12)
months after the date this Plan was adopted by the Board. No purchase of
shares pursuant to this Plan occurred prior to such stockholder approval. This
Plan shall continue until the earlier to occur of (a) termination of this Plan
by the Board or the Committee (which termination may be effected at any time),
(b) issuance of all of the shares of Common Stock reserved for issuance under
this Plan, or (c) ten (10) years from the adoption of this Plan by the Board.

     22. Death of a Participant.

          (a) Effective with the Offering Period commencing December 16, 2001 and
ending with the Purchase Date of the first six-month Accrual Period in the
Offering Period commencing December 16, 2002, in the event of a Participant’s
death, payroll deductions in his or her account shall, in accordance with
Section 12(a) above, and the Participant’s will or the laws of descent and
distribution to the extent consistent with this Plan, either (i) purchase
Shares on the next Purchase Date in accordance with Section 12(a); or (ii) be
refunded to the Participant’s legal representative in accordance with Section
12(a). Effective immediately following the first Purchase Date of the Offering
Period commencing December 16, 2002 and for subsequent Offering Periods in the
event of a Participant’s death, payroll deductions in his or her account shall
be refunded to the Participant’s legal representative in accordance with
Section 12(b). Any shares purchased under the Plan on behalf of a Participant
are to be treated in accordance with the Participant’s will or the laws of
descent and distribution.

          (b) Prior to the Offering Period commencing December 16, 2001, a
Participant may file a written designation of a beneficiary who is to receive
any shares and cash, if any, from the Participant’s account under this Plan in
the event of such Participant’s death subsequent to the end of an Offering
Period but prior to delivery to him of such shares and cash. In addition, a
Participant may file a written designation of a beneficiary who is to receive
any cash from the Participant’s account under this Plan in the event of such
Participant’s death prior to a Purchase Date.) Such designation of beneficiary
may be changed by the Participant at any time by written notice. In the event
of the death of a Participant and in the absence of a beneficiary validly
designated under this Plan who is living at the time of such Participant’s
death, the Company shall deliver such shares or cash to the executor or
administrator of the estate of the Participant, or if no such executor or
administrator has been appointed (to the knowledge of the Company), the
Company, in its discretion, may deliver such shares or cash to the spouse or to
any one or more dependents or relatives of the Participant, or if no spouse,
dependent or relative is known to the Company, then to such other person as the
Company may designate.

     23. Conditions Upon Issuance of Shares; Limitation on Sale of Shares.
Shares shall not be issued with respect to an option unless the exercise of
such option and the issuance and delivery of such shares pursuant thereto shall
comply with all applicable provisions of law, domestic or foreign, including,
without limitation, the Securities Act of 1933, as amended, the Securities
Exchange Act of 1934, as amended, and the rules and regulations promulgated
thereunder, and the requirements of any stock exchange or automated quotation
system upon which the shares may then be listed, and shall be further subject
to the approval of counsel for the Company with respect to such compliance.

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Intuit Inc.

1996 Employee Stock Purchase Plan

     24. Applicable Law. The Plan shall be governed by the substantive laws
(excluding the conflict of laws rules) of the State of California.

     25. Amendment or Termination of this Plan. The Committee may at any time
amend, terminate or extend the term of this Plan, except that any such
termination cannot affect options previously granted under this Plan, nor may
any amendment make any change in an option previously granted which would
adversely affect the right of any Participant.

Notwithstanding the prohibition against affecting options previously granted
under this Plan, this Plan or an Offering Period may be terminated by the
Committee on a Purchase Date or by the Committee’s setting a new Purchase Date
with respect to an Offering Period then in progress if the Committee determines
that termination of the Plan and/or the Offering Period is in the best
interests of the Company and the stockholders or if continuation of the Plan
and/or the Offering Period would cause the Company to incur adverse accounting
charges as a result of a change in the generally accepted accounting rules or
interpretations thereof that are applicable to this Plan.

The Company must obtain stockholder approval for each amendment of this Plan
for which stockholder approval is required by the Code, the rules of any stock
exchange or automated quotation system upon which the Company’s shares may then
be listed, or any other applicable laws or regulation. Such stockholder
approval must be obtained, in a manner permitted by applicable corporate law,
within twelve (12) months of the adoption of such amendment by the Committee.

     26. Definitions.

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

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

	 	(c)	 	“Committee” means a committee appointed by the
Board. If two or more members of the Board are Outside
Directors, the Committee will be comprised of at least two (2)
members of the Board, all of whom are Outside Directors. If
no Committee has been established references to the
“Committee” shall mean the Board.

	 	(d)	 	“Company” means Intuit Inc., a Delaware
corporation.

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

(i) if such Common Stock is then quoted on the Nasdaq
National Market, its last reported sale price on the Nasdaq
National Market or, if

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Intuit Inc.

1996 Employee Stock Purchase Plan

no such reported sale takes place on such date, the average
of the closing bid and asked prices;

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

(iii) if such Common Stock is publicly traded but is not
quoted on the Nasdaq National Market or listed or admitted to
trading on a national securities exchange, the average of the
closing bid and asked prices on such date, as reported in The
Wall Street Journal, for the over-the-counter market; or

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

	 	(f)	 	“Maximum Share Amount” means the maximum number
of shares which may be purchased by any employee at any single
Purchase Date.

	 	(g)	 	“Notice Period” is the period beginning two (2)
years from the Offering Date and one (1) year from the
Purchase Date on which such shares were purchase.

	 	(h)	 	“Offering Date” is the first business day of each
Offering Period.

	 	(i)	 	“Offering Period” means through the Offering
Period commencing June 16, 2002, a twelve-month period
containing two six-month Accrual Periods. Effective with the
Offering Period commencing June 16, 2003, Offering Period
means a twelve-month period containing four three-month
Accrual Periods. The transitional Offering Period commencing
December 16, 2002 shall be a twelve-month period containing
one six-month Accrual Period and two three-month Accrual
Periods. Effective prior to June 16, 2001, the Offering
Period was six-months in length and contained one six-month
Accrual Period.

	 	(j)	 	“Outside Directors” means outside directors
within the meaning of Code Section 162(m).

	 	(k)	 	“Participating Subsidiaries” means Subsidiaries
that have been designated by the Committee from time to time
as eligible to participate in this Plan,

	 	(l)	 	“Plan” means this Intuit Inc. 1996 Employee Stock
Purchase Plan, as amended from time to time.

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Intuit Inc.

1996 Employee Stock Purchase Plan

	 	(m)	 	"Parent Corporation” and "Subsidiary”
(collectively, "Subsidiaries") shall have the same meanings as
“parent corporation” and “subsidiary corporation” in Code
Sections 424(e) and 424(f).

	 	(n)	 	“Participant” means an employee who meets the
eligibility requirements of Section 4 above and timely enrolls
in the Plan in accordance with Section 6 above.

	 	(o)	 	“Purchase Date” is the last business day of each
Accrual Period.

	 	(p)	 	“Accrual Period” means prior to June 16, 2003, a
six-month period during which payroll deductions are
accumulated and effective June 16, 2003 means, a three-month
period during which payroll deductions are accumulated.

	 	(q)	 	“Reserves” means (i) the number of shares of
Common Stock covered by each option under this Plan which has
not yet been exercised and (ii) the number of shares of Common
Stock which have been authorized for issuance under this Plan
but have not yet been placed under option.

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