HEWLETT-PACKARD COMPANY
1990 INCENTIVE STOCK PLAN
PART 1. PLAN ADMINISTRATION AND ELIGIBILITY
I. PURPOSE
The purpose of this 1990 Incentive Stock Plan (the "Plan") of
Hewlett-Packard Company (the "Company") is to encourage ownership in the Company
by key personnel whose long-term employment is considered essential to the
Company's continued progress and thus to provide them with a further incentive
to continue in the employ of the Company or its subsidiaries or affiliates. (The
Company and all such subsidiaries are collectively referred to hereinafter as
the "Participating Companies.")
II. ADMINISTRATION
The Board of Directors (the "Board) of the Company or any committee
(the "Committee") of the Board that will satisfy Rule 16b-3 of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and any regulations
promulgated thereunder, as from time to time in effect, including any successor
rule ("Rule 16b-3"), shall supervise and administer the Plan. The Committee
shall consist solely of two or more non-employee directors of the Company, who
shall be appointed by the Board. A member of the Board shall be deemed to be a
"non-employee director" only if he satisfies such requirements as the Securities
and Exchange Commission may establish for non-employee directors under Rule
16b-3. Members of the Board receive no additional compensation for their
services in connection with the administration of the Plan.
The Committee or the Board shall from time to time designate the key
employees of the Participating Companies who shall be granted stock options,
stock or cash awards under the Plan and the amount and nature of the award to be
granted to each such employee.
The Board or the Committee may adopt such rules or guidelines as it
deems appropriate to implement the Plan. All questions of interpretation of the
Plan or of any shares issued under it shall be determined by the Board or the
Committee and such determination shall be final and binding upon all persons
having an interest in the Plan. Any or all powers and discretion vested in the
Board or the Committee under this Plan may be exercised by any subcommittee so
authorized by the Board or the Committee and satisfying the requirements of Rule
16b-3 for employees subject to Section 16 of the Exchange Act. In addition, the
Board or the Committee may delegate to the Executive Committee of the Board of
Directors the power to approve stock options and stock awards to employees not
subject to Section 16 of the Exchange Act.
III. PARTICIPATION IN THE PLAN
Key employees of the Company, including officers (with the exception of
David Packard), and directors of the Company who are also employed by a
Participating Company shall be eligible to participate in the Plan.
IV. STOCK SUBJECT TO THE PLAN
The maximum number of shares which may be optioned or awarded under the
Plan shall be 128,000,000 shares of the Company's $0.01 par value Common Stock.
In any fiscal year, no individual may be granted stock awards or stock options
exceeding 1,000,000 shares or five percent of all shares optioned or awarded
that year, whichever is less. If a class of Preferred Stock is created and
authorized by the Company's Certificate of Amendment to the Certificate of
Incorporation, Preferred Stock may be used in lieu of Common Stock for Plan
grants. The limitation on the number of shares which may be optioned or awarded
under the Plan shall be subject to adjustment as provided in Section XX of the
Plan.
The grant of a stock award not pursuant to an option under the Plan
("Stock Award") shall be subject to such restrictions as the Committee shall
determine to be appropriate, including but not limited to restrictions on
resale, repurchase provisions, special vesting requirements or forfeiture
provisions. The grant and exercise of a stock option shall be subject to such
restrictions as the Committee may determine to be appropriate in accordance with
Section VI of the Plan.
If any outstanding option under the Plan for any reason expires or is
terminated without having been exercised in full, or if any Stock Awards are
forfeited, the forfeited shares or shares allocable to the unexercised portion
of such option shall again become available for grant pursuant to the Plan.
PART 2. OPTIONS AND STOCK APPRECIATION RIGHTS
V. INCENTIVE STOCK OPTIONS
Any option granted under the Plan may be designated by the Committee as
a nonstatutory option or as an incentive stock option ("ISO") entitled to
special tax treatment under Section 422A of the Internal Revenue Code of 1986,
as amended to date and as may be amended from time to time (the "Code").
No option intended to qualify as an ISO may be granted under the Plan
if such grant, together with any applicable prior grants, would exceed any
maximum established under the Code for ISOs that may be granted to a single
employee. Should it be determined that any ISO granted under the Plan exceeds
such maximum, the ISO shall be null and void to the extent, but only to the
extent, of such excess. Section 422A(b)(7) of the Code presently provides that
with respect to options granted after December 31, 1986 the aggregate fair
market value (determined as of the time the ISO is granted) of the stock with
respect to which ISOs are exercisable for the first time by an employee in any
calendar year under all incentive stock option plans of the Company shall not
exceed $100,000.
Nothing in this section shall be deemed to prevent the grant of options
in excess of the maximum established by the Code where such excess amount is
treated as a nonstatutory option not entitled to special tax treatment under
Section 422A of the Code.
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VI. TERMS, CONDITIONS AND FORM OF OPTIONS
Each option granted under this Plan shall be authorized by action of
the Committee and shall be evidenced by a written agreement in such form as the
Committee shall from time to time approve, which agreements shall comply with
and be subject to the following terms and conditions:
A. OPTIONS NON-TRANSFERABLE. Each option granted under the Plan by its
terms shall not be transferable by the optionee otherwise than by will, or by
the laws of descent and distribution, and shall be exercised during the lifetime
of the optionee only by him. No option or interest therein may be transferred,
assigned, pledged or hypothecated by the optionee during his lifetime, whether
by peration of law or otherwise, or be made subject to execution, attachment or
similar process.
B. PERIOD OF OPTION. The Committee may specify, at the time of grant a
vesting schedule for any option. If no vesting schedule is specified, no option
may be exercised before the first anniversary of the date upon which it was
granted, nor may it be exercised as to more than one-fourth of the number of
shares covered thereby before the second anniversary of such date, nor as to
more than one-half of the number of shares covered thereby before the third
anniversary of such date, nor as to more than three-fourths of the number of
shares covered thereby before the fourth anniversary of such date. Any option
granted pursuant to the Plan shall become exercisable in full upon the
retirement of the optionee because of age or total and permanent disability or
upon the death of the optionee. Except as provided in this subsection B, no
option shall be exercisable after the expiration of 10 years from the date upon
which such option is granted. However, the Committee may, at the time an option
is granted to any employee who is not subject to Section 16 of the Exchange Act,
specify a different term for the option up to a maximum term of 10.5 years. Each
option shall be subject to termination before its date of expiration as
hereinafter provided.
C. EXERCISE OF OPTIONS. Options may be exercised only by written notice
to the Company at its head office accompanied by payment in cash of the full
consideration for the shares as to which they are exercised, and, with respect
to nonstatutory options, by payment of all applicable U.S. withholding taxes
upon such exercise. In addition, if and to the extent authorized by the
Committee, optionees may make all or any portion of any payment due to the
Company upon exercise of an option by delivery of any property (including
securities of the Company) other than cash, as long as such property constitutes
valid consideration for the stock under applicable law.
The Committee may permit the payment of required tax withholding due
upon exercise of an option by the withholding of shares otherwise issuable upon
exercise of the option. Option shares withheld in payment of such taxes shall be
valued at the fair market value of the stock on the date of exercise. Fair
market value shall be deemed to be the mean of the highest and lowest quoted
selling prices for such shares on the exercise date as reported on the New York
Stock Exchange Composite Tape. The Committee may impose special restrictions on
the use of option shares as payment for withholding taxes by individuals subject
to Section 16(b) of the Exchange Act.
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No option may be exercised while the optionee is on any leave of
absence from the Company other than an approved medical leave. Options will
continue to vest during any authorized leave of absence, and may be exercised to
the extent permitted by subsection VI(B) above upon the optionee's return to
active employment status.
D. TERMINATION OF OPTIONS. All rights of an employee in an option, to
the extent that it has not been exercised, shall terminate upon the termination
of his employment for any reason other than the death of the employee or
retirement because of age or total and permanent disability and in case of such
retirement three years from the date thereof with respect to nonstatutory
options and three months from the-retirement date with respect to ISOs. In the
event of the death of the employee, the option shall terminate upon failure of
his designated representative to exercise the option in accordance with the time
period provided in subsection VI(E) below. The Committee may authorize the
continuation of options held by terminating employees who, at the Company's
request or with the Company's consent, are terminating to accept employment with
not-for-profit corporations, governmental agencies or industry associations.
Such approval must be obtained from the Committee prior to termination of
employment in order to prevent termination of options.
(1) Divestiture.
Notwithstanding the foregoing, if an employee terminates because
of a divestiture by the Company, the Committee may, in its sole discretion,
amend any option previously granted to such employee pursuant to the Plan such
that the option becomes exercisable in full and/or permits the employee to
exercise such option which has not already been exercised until the earlier of:
(i) three months from the closing date of the divestiture, or such longer date,
if any which the committee may authorize, or (ii) the expiration of the option.
The Committee may, in its sole discretion, delegate its authority under this
subsection to the Executive Committee.
(2) Voluntary Severance Program.
Notwithstanding the foregoing, if an employee who is not a Section
16 officer terminates as a result of participation in a Company voluntary
severance program approved by the Executive Committee, any option granted
pursuant to the Plan shall become exercisable in full, and the employee may
exercise any such option which has not already been exercised until the earlier
of (i) three months from the employee's termination date, or (ii) the
expiration of the option.
E. EXERCISE BY REPRESENTATIVE FOLLOWING DEATH OF EMPLOYEE. The
employee, by written notice to the Company, may designate one or more persons
(and from time to time change such designation) including his legal
representative, who, by reason of his death, shall acquire the right to exercise
all or a portion of the option. If the person or persons so designated wish to
exercise any portion of the option, they must do so within one year after the
death of the employee or retired employee, as the case may be. All rights of the
representative(s) in the option shall terminate upon failure to exercise the
option within the time period set forth in this subsection VI(E). Any exercise
by a representative shall be subject to the provisions of this Plan.
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VII. MODIFICATION, EXTENSION AND RENEWAL OF OPTIONS
The Committee shall have the power to modify, extend or renew
outstanding options and authorize the grant of new options in substitution
therefor, provided that any such action may not have the effect of altering or
impairing any rights or obligations of any option previously granted without the
consent of the optionee.
The Committee shall have the power to lower the exercise price of an
outstanding option not intended to qualify as an ISO under the Code; provided,
however, that the exercise price per share may not be reduced below 75% of the
fair market value of a share of Common Stock of the Company on the date the
action is taken to reduce the exercise price. Such fair market value shall be
deemed to be the mean of the highest and lowest quoted selling prices for such
shares on that date as reported on The New York Stock Exchange Composite Tape.
VIII. OPTION PRICE
The option price per share for the shares covered by each nonstatutory
option shall be not less than 75% of the fair market value of a share of Common
Stock of the Company on the date the option is granted. The option price per
share for ISOs shall be not less than the fair market value on the option grant
date. Such fair market value shall be deemed to be the mean of the highest and
lowest quoted selling prices for such share on that date as reported on The New
York Stock Exchange Composite Tape.
IX. LOANS FOR EXERCISE OF OPTIONS
Any option agreement under this Plan entered into with an employee may,
but need not, provide that the Company shall lend to the employee who holds the
option the funds for any exercise of his option. Any such loans made to
individuals subject to Section 16 of the Exchange Act shall be at a rate of
interest adequate to avoid imputation of income under Sections 483 and 7872 of
the Code and shall be for a term not to exceed 15 months from the date of
exercise of the related option. Any loan by the Company to fund the exercise of
an option shall be subject to such other terms and conditions as shall be set
forth in the option agreement, which terms and conditions shall be determined by
the Committee at the time of the grant of the option. Loans may or may not be
secured by stock issued pursuant to such option exercises, at the Committee's
discretion.
X. STOCK APPRECIATION RIGHTS
This section shall apply to employees who hold options heretofore or
hereafter granted under the Plan ("Options") and who are or may hereafter be
subject to Section 16 of the Exchange Act. The Committee may, but shall not be
required to, grant to such employees stock appreciation rights as herein
provided with respect to not more than the number of shares from time to time
subject to the Options held by such employees. The stock appreciation rights
shall be integral parts of the respective Options and shall have no existence
apart therefrom.
A stock appreciation right shall be the right of the holder thereof to
elect to surrender part or all of any Option which is wholly exercisable, or of
any exercisable portion of an Option which is partially exercisable, and receive
in exchange therefor cash or shares (valued at current
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fair market value) or a combination thereof. Such cash or shares or combination
shall have an aggregate value ("Appreciation") equal to the excess of the
current fair market value of one share over the Option price of one share
specified in such Option multiplied by the number of shares subject to such
Option or the portion thereof which is surrendered. The current fair market
value of a share shall be the mean of the highest and lowest quoted selling
prices for shares as reported on The New York Stock Exchange Composite Tape on
the day on which a stock appreciation right is exercised, or if no sale was made
on such date, then on the next preceding day on which such a sale was made. No
fractional share shall be issued on the exercise of a stock appreciation right,
and settlement therefor shall be made in cash.
Each stock appreciation right granted under this Plan shall be subject
to the following terms and conditions: (1) each stock appreciation right shall
be evidenced by a written agreement between the Company and the holder in such
form as the Committee shall authorize; (2) each stock appreciation right granted
under the Plan by its terms shall not be transferable by the holder otherwise
than by will or by the law of descent and distribution, and shall be exercised
during the lifetime of the holder only by him, and no stock appreciation right
or interest therein may be transferred, assigned, pledged or hypothecated by the
holder during his lifetime, whether by operation of law or otherwise, or be made
subject to execution, attachment or similar process; (3) all rights of an
employee in a stock appreciation right, to the extent that it has not been
exercised, shall terminate upon the death of the employee or the termination of
his employment for any reason other than retirement because of age or total and
permanent disability, and in case of such retirement three years from the date
thereof with respect to nonstatutory Options and three months from the date
thereof with respect to Options intended to qualify as ISOs; provided, however,
that the employee, by written notice to the Company, may designate one or more
persons (and from time to time change such designation), including his legal
representative, who, by reason of his death, shall acquire the right to exercise
all or a portion of the rights accrued under the stock appreciation right as of
the date of his death. If the person or persons so designated wish to exercise
any portion of the stock appreciation right, they must do so within one year
after the death of the employee or retired employee, as the case may be, and
such exercise shall be subject to the provisions of this Plan; and (4) the life
of stock appreciation rights shall be coterminous with the life of the Options.
The holder of a stock appreciation right may exercise the same by (1)
filing with the Secretary of the Company a written election, which election
shall be delivered by the Secretary to the Committee, specifying (a) the Option
or portion thereof to be surrendered, and (b) the percentage of the Appreciation
which he desires to receive in cash, if any; and (2) surrendering such Option
for cancellation or partial cancellation, as the case may be; provided, however,
that any election which specifies that the holder of a stock appreciation right
desires to receive any portion of the Appreciation in cash shall be of no force
or effect unless and until the Committee shall have consented to such election.
No stock appreciation right or related Option may be exercised during
the first six months of its term, except in the event death or total and
permanent disability of the holder occurs prior to the expiration of this
six-month period. No election to receive any portion of the Appreciation in cash
shall be filed with the Secretary and no stock appreciation right shall be
exercised to receive any cash unless such election and exercise shall occur
during the period (hereinafter referred to as the "Cash Window Period")
beginning on the third business day following the date of release for
publication by the Company of a regular quarterly or annual statement of sales
and
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earnings and ending on the twelfth business day following such date. The
Committee may consent to the election of a holder to receive any portion of the
Appreciation in cash at any time after such election has been made.
No stock appreciation right or related Option may be exercised during
the first six months of its term, except in the event of death or total and
permanent disability of the holder occurs prior to the expiration of this
six-month period.
The Board or the Committee shall have the sole discretion to consent to
approve or disapprove, in whole or in part, any election to receive any portion
of the Appreciation in cash.
Nothing in the Plan shall be construed to give any eligible employee
any right to be granted a stock appreciation right. Neither the Plan nor the
granting of a stock appreciation right nor any other action taken pursuant to
the Plan shall constitute or be evidence of any agreement or understanding,
express or implied, that the Company will employ the holder of a stock
appreciation right for any period of time or in any position or at any
particular rate of compensation. The holder of a stock appreciation right shall
have no rights as a stockholder with respect to the shares covered by his stock
appreciation right until the date of issuance to him of a stock certificate
therefor, and, except as otherwise specifically provided in the stock option
agreement for the Options, no adjustment will be made for dividends or other
rights for which the record date is prior to the date such certificate is
issued.
PART 3. STOCK AND CASH AWARDS
XI. STOCK AND CASH AWARD DETERMINATION
The Committee may grant an eligible employee Stock Awards or awards of
cash ("Cash Awards") at such times and in such amounts as the Committee may
designate which in its opinion fully reflect the performance level and potential
of such employee. The Committee shall designate whether such awards are payable
in Common Stock, cash or a combination thereof. Such awards shall be made in
accordance with such guidelines as the Committee may from time to time adopt.
Stock and Cash Awards shall be independent of any grant of an option under this
Plan and shall be made subject to such restrictions as the Committee may
determine to be appropriate.
XII. PAYMENT OF STOCK OR CASH AWARDS
A. No employee shall have the right to receive payment of any Stock or
Cash Award until notified of the amount of such award, in writing, by the
Committee or its authorized delegate.
B. Payment of Cash Awards shall be made in a lump sum or in annual
installments over such period as the Committee may designate, which period shall
not exceed five years, provided that the Committee may from time to time
designate minimum installment amounts.
C. After an award of Common Stock subject to restrictions ("Restricted
Stock"), such shares will be deposited in certificate or book entry form in
escrow with the Company's Secretary. The employee shall retain all rights in the
Restricted Stock while it is held in escrow
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including but not limited to voting rights and the right to receive dividends,
except that the employee shall not have the right to transfer or assign such
shares until all restrictions pertaining to such shares are terminated, at which
time the applicable stock certificates shall be released from escrow and
delivered to the employee by the Company's Secretary.
D. The Committee may permit, on such terms as it deems appropriate, use
of Restricted Stock as partial or full payment upon exercise of a stock option
under the Company's incentive stock option or compensation plans or this Plan.
In the event shares of Restricted Stock are so tendered as consideration for the
exercise of an option, a number of the shares issued upon the exercise of said
option, equal to the number of shares of Restricted Stock used as consideration
therefor, shall be subject to the same restrictions as the Restricted Stock so
submitted plus any additional restrictions that may be imposed by the Committee.
XIII. TERMINATION OF RESTRICTIONS ON STOCK AWARDS
The Committee will establish the period or periods after which the
restrictions on Restricted Stock will lapse.
The Committee may in its discretion permit an employee to elect to
receive in lieu of shares of Restricted Stock, at the expiration of the
restrictions, a cash payment equal to the fair market value of the Company's
Common Stock on the date the restrictions lapse. The Committee may also permit
the employee to elect to pay required tax withholding due upon the lapse of
restrictions with part of the shares due the employee at such time. The shares
cancelled in payment of required tax withholding shall be valued at the fair
market value of the Company's Common Stock on the date the restrictions lapse.
Fair market value shall be the mean of the high and low prices of such stock on
The New York Stock Exchange Composite Tape on the date in question, or if no
sales of such stock were made on that date, the mean of the high and low prices
of such stock on the next preceding day on which sales were made.
XIV. DEATH OR TOTAL AND PERMANENT DISABILITY OF A PARTICIPATING EMPLOYEE
HOLDING RESTRICTED STOCK
By written notice to the Company, an employee who has received a grant
of Restricted Stock may designate one or more persons (and from time to time
change such designation) who, by reason of his death, shall acquire the right to
receive any vested but unpaid awards held by the employee at the time of his
death. Such awards shall be paid to the designated representative at such time
and in such manner as if the employee were living.
In the event of total and permanent disability of an employee who has
participated in the Plan, any unpaid but vested award shall be paid to the
employee if legally competent or to a committee or other legally designated
guardian or representative if the employee is legally incompetent.
In the event of the death or total and permanent disability of an
employee holding unvested restricted shares, the employee's designated
representative or the employee, as the case may be, shall be entitled to receive
a prorated number of shares determined by dividing the number of years in the
restricted period by the number of whole years lapsed since the grant date.
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Remaining unvested shares shall be forfeited unless additional payments are
specifically authorized by the Committee.
If at the time of the employee's death there is no effective
beneficiary designation as to all or some portion of the awards hereunder, such
awards or such portion thereof shall be paid to or on the order of the legal
representative of the employee's estate. In the event of uncertainty as to the
interpretation or effect of any notice of designation, the Committee's decision
with respect thereto shall be conclusive.
XV. RESTRICTIONS AND FORFEITURE OF STOCK AWARDS
The Company's obligation to deliver stock held in escrow is subject to
the condition that the employee remain an employee of the Company on active or
authorized leave status or be under contract to provide services to the Company
as provided in Section XVI hereof for the entire deferral and/or restriction
period, including mandatory and optional deferrals. If the employee fails to
meet this condition, the employee's right to any such unpaid amounts or
undelivered stock shall be forfeited. This provision may be waived by the
Committee in exceptional circumstances. In the event an employee holding
restricted shares ceases to be on active pay status during the restricted period
for a period of more than six months, the restricted period shall be extended by
a period of time equal to the length of the period of inactive status.
XVI. RETIREMENT OF EMPLOYEE HOLDING STOCK AWARD
At the time of grant of any Stock Award, the Committee may specify
special conditions or terms covering the status of such Stock Award upon the
retirement of the employee. If no provision is made, the following provisions
shall govern if the employee retires due to age: the Company's obligation to
make any payment due thereafter under the Stock Award feature of the Plan is
subject to the condition that for the entire period of deferral or restriction,
including mandatory and optional deferrals:
A. The employee shall render as an independent contractor and not as an
employee such advisory or consultative services to the Company as shall be
reasonably requested by the Board or the Executive Committee of the Board in
writing from time to time, consistent with the state of the retired employee's
health and any employment or other activities in which such employee may be
engaged. For purposes of this Plan, the employee shall not be required to devote
a major portion of time to such services and shall be entitled to reimbursement
for any reasonable out-of-pocket expenses incurred in connection with the
performance of such services;
B. The employee shall not render services for any organization or
engage directly or indirectly in any business which, in the opinion of the
Committee, competes with, or is in conflict with the interest of, the Company.
The employee shall be free, however, to purchase as an investment or otherwise
stock or other securities of such organizations as long as they are listed upon
a recognized securities exchange or traded over-the-counter, or as long as such
investment does not represent a substantial investment to the employee or a
significant (greater than 10%) interest in the particular organization. For the
purposes of this subsection XVI(B), a company (other than a subsidiary) which is
engaged in the business of producing, leasing or selling products or providing
services of the type now or at any time hereafter made or provided by the
Company shall be deemed to compete with the Company;
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C. The employee shall not, without prior written authorization from the
Company, disclose to anyone outside the Company, or use in other than the
Company's business, any confidential information or material relating to the
business of the Company, either during or after employment with the Company; and
D. The employee shall disclose promptly and assign to the Company all
right, title and interest in any invention or idea, patentable or not, made or
conceived by the employee during employment by the Company, relating in any
manner to the actual or anticipated business, research or development work of
the Company and shall do anything reasonably necessary to enable the Company to
secure a patent where appropriate in the United States and in foreign countries.
PART 4. GENERAL PROVISIONS
XVII. ASSIGNMENTS
The rights and benefits under this Plan may not be assigned except for
the designation of a beneficiary as provided in Sections VI and XIV.
XVIII. TIME FOR GRANTING OPTIONS OR STOCK AWARDS
All options for shares and Stock Awards subject to this Plan shall be
granted, if at all, not later than 10 years after the adoption of this Plan by
the Company's Board of Directors.
XIX LIMITATION OF RIGHTS
A. NO RIGHT TO AN OPTION OR STOCK AWARD. Nothing in the Plan shall be
construed to give any personnel of the Participating Companies any right to be
granted an option or Stock or Cash Award.
B. NO EMPLOYMENT RIGHT. Neither the Plan, nor the granting of an option
or Stock or Cash Award nor any other action taken pursuant to the Plan shall
constitute or be evidence of any agreement or understanding, express or implied,
that any of the Participating Companies will employ a grantee for any period of
time or in any position, or at any particular rate of compensation.
C. NO SHAREHOLDER RIGHTS FOR Options. An optionee shall have no rights
as a shareholder with respect to the shares covered by his options until the
date of the issuance to him of a stock certificate therefor, and no adjustment
will be made for dividends or other rights for which the record date is prior to
the date such certificate is issued.
XX. CHANGES IN PRESENT STOCK
In the event of any merger, consolidation, reorganization,
recapitalization, stock dividend, stock split or other change in the corporate
structure or capitalization affecting the Company's present Common Stock,
appropriate adjustment shall be made by the Board of Directors in the
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number (including the aggregate numbers specified in Section IV) and kind of
shares which are or may become subject to options and Stock Awards granted or
to be granted hereunder, and in the option price of shares which are subject to
options granted hereunder.
XXI. CHANGE IN CONTROL
In the event that the Company is merged into or acquired by another
entity in a transaction involving a change in control, the Committee shall have
complete authority and discretion, but not the obligation, to accelerate the
vesting of outstanding stock options and the termination of restrictions on
Stock Awards.
The Committee may also ask the Board of Directors to negotiate, as part of
any agreement involving a sale or merger of the Company, a sale of substantially
all the Company's assets or similar transaction, terms providing protection for
employees holding stock options or Stock Awards.
XXII. EFFECTIVE DATE OF THE PLAN
The Plan shall take effect on the date of adoption by the Board of
Directors of the Company, subject to approval by the shareholders of the Company
at a meeting held within 12 months after the date of such adoption. Options and
Stock or Cash Awards may be granted under the Plan at any time after the
adoption of the Plan by the Board of Directors of the Company and prior to the
termination of this Plan.
XXIII. AMENDMENT OF THE PLAN
The Board or the Committee may suspend or discontinue the Plan or
revise or amend it in any respect whatsoever; provided, however, that the
Company may seek shareholder approval of an amendment if determined to be
required by or advisable by any law or regulation, including without limitation,
any regulations of the Securities and Exchange Commission or the Internal
Revenue Service, the rules of any stock exchange on which the Company's stock is
listed or other applicable law or regulation.
XXIV. NOTICE
Any written notice to the Company required by any of the provisions of
this Plan shall be addressed to the Secretary of the Company and shall become
effective when it is received.
XXV. COMPANY BENEFITS PLANS
Nothing contained in this Plan shall prevent the employee prior to
death, or the employee's dependents or beneficiaries after the employee's death,
from receiving, in addition to any awards provided for under this Plan and any
salary, any payments under a Company retirement plan or which may be otherwise
payable or distributable to such employee, or to the employee's dependents or
beneficiaries under any other plan or policy of the Company or otherwise.
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XXVI. UNFUNDED PLAN
Insofar as it provides for awards of stock or cash, this Plan shall be
unfunded. Although bookkeeping accounts may be established with respect to
employees who are granted awards of stock under this Plan, any such accounts
will be used merely as a bookkeeping convenience. Except for the holding of
Restricted Stock in escrow pursuant to subsection XII(C), the Company shall not
be required to segregate any assets which may at any time be represented by
awards of stock or cash, nor shall this Plan be construed as providing for such
segregation, nor shall the Company nor the Board nor the Committee be deemed to
be a trustee of stock or cash to be awarded under the Plan. Any liability of the
Company to any employee with respect to an award of stock or cash under this
Plan shall be based solely upon any contractual obligations which may be created
by the Plan; no such obligation of the Company shall be deemed to be secured by
any pledge or other encumbrance on any property of the Company. Neither the
Company nor the Board nor the Committee shall be required to give any security
or bond for the performance of any obligation which may be created by this Plan.
XXVII. GOVERNING LAW
This Plan and all determinations made and actions taken pursuant hereto
shall be governed by the law of the State of California and construed
accordingly.
9/21/89 Adopted by the Executive Compensation and Stock Option Committee
2/27/90 Approved by the Shareholders
7/17/91 Part 1, Section II amended by the Executive Compensation and
Stock Option Committee
11/18/93 Section IV amended by the Executive Compensation and Stock Option
Committee
3/24/95 Two for one stock split
6/21/96 Two for one stock split
11/21/96 Part 1, Section II, Part 2, Section X and Part 4, Section XXIII
amended by the Compensation Committee
5/15/97 Section VI D amended by the Compensation Committee
5/20/98 The Company reincorporated in the State of Delaware
2/12/99 Section VI B & D amended by the Compensation Committee
6/30/00 Section VI C and XIII amended by the Compensation Committee
10/27/00 Two for one stock split in the form of a stock dividend
12
1990 Incentive Stock Plan - Hewlett-Packard Co.
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