{"id":38221,"date":"2015-09-17T11:25:58","date_gmt":"2015-09-17T16:25:58","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-legal\/contracts\/uncategorized\/1995-incentive-stock-plan-hewlett-packard-co.html"},"modified":"2015-09-17T11:25:58","modified_gmt":"2015-09-17T16:25:58","slug":"1995-incentive-stock-plan-hewlett-packard-co","status":"publish","type":"corporate_contracts","link":"https:\/\/corporate.findlaw.com\/contracts\/compensation\/1995-incentive-stock-plan-hewlett-packard-co.html","title":{"rendered":"1995 Incentive Stock Plan &#8211; Hewlett-Packard Co."},"content":{"rendered":"<pre>\n                             HEWLETT-PACKARD COMPANY\n                            1995 INCENTIVE STOCK PLAN\n\n                 (As amended June 30, 2000, September 16, 1999,\n            February 12, 1999, July 17, 1997 and November 21, 1996)\n\n\n                   PART 1. PLAN ADMINISTRATION AND ELIGIBILITY\n\nI. PURPOSE\n\nThe purpose of this 1995 Incentive Stock Plan (the \"Plan\") of Hewlett-Packard\nCompany (\"HP\" or the \"Company\") is to encourage ownership in the Company by key\npersonnel whose long-term employment is considered essential to the Company's\ncontinued progress and thus to provide them with a further incentive to continue\nin the employ of the Company or its subsidiaries or affiliates. (Each of the\nCompany and all such subsidiaries and affiliates is referred to hereinafter as a\n\"Participating Company.\")\n\nII. ADMINISTRATION\n\nThe Board of Directors (the \"Board) of the Company or any committee (the\n\"Committee\") of the Board that will satisfy Rule 16b-3 of the Exchange Act, and\nany regulations promulgated thereunder, as from time to time in effect,\nincluding any successor rule (\"Rule 16b-3), shall supervise and administer the\nPlan. The Committee shall consist solely of two or more non-employee directors\nof the Company, who shall be appointed by the Board. A member of the Board shall\nbe deemed to be a \"non-employee director\" only if he satisfies such requirements\nas the Securities and Exchange Commission may establish for non-employee\ndirectors under Rule 16b-3. Members of the Board receive no additional\ncompensation for their services in connection with the administration of the\nPlan.\n\nThe Board or the Committee may adopt such rules or guidelines as it deems\nappropriate to implement the Plan. All questions of interpretation of the Plan\nor of any shares issued under it shall be determined by the Board or the\nCommittee and such determination shall be final and binding upon all persons\nhaving an interest in the Plan. Any or all powers and discretion vested in the\nBoard or the Committee under this Plan may be exercised by any subcommittee so\nauthorized by the Board or the Committee and satisfying the requirements of Rule\n16b-3 for employees subject to Section 16 of the Exchange Act. In addition, the\nBoard or the Committee may delegate to the Executive Committee of the Board of\nDirectors the power to approve stock options and stock awards to employees not\nsubject to Section 16 of the Exchange Act.\n\n\n\nIII. PARTICIPATION IN THE PLAN\n\nKey employees of the Company, including officers, and directors of the Company,\nwho are also employed by a Participating Company, shall be eligible to\nparticipate in the Plan.\n\nIV. STOCK SUBJECT TO THE PLAN\n\nThe maximum number of shares that may be awarded under the Plan shall be \n128,000,000 shares of the Company's $0.01 par value Common Stock (\"Common \nStock\"). If a class of Preferred Stock is created and authorized by the \nCompany's amended Certificate of Incorporation, Preferred Stock may be used \nin lieu of Common Stock for Plan grants. The limitation on the number of \nshares that may be awarded under the Plan shall be subject to adjustment as \nprovided in Section XXII of the Plan.\n\nThe grant of a stock award not pursuant to an option under the Plan (\"Stock\nAward\") shall be subject to such restrictions as the Committee shall determine\nto be appropriate, including but not limited to restrictions on resale,\nrepurchase provisions, special vesting requirements or forfeiture provisions.\nThe grant and exercise of a stock option shall be subject to such restrictions\nas the Committee may determine to be appropriate in accordance with Section VII\nof the Plan.\n\nThe Committee may authorize conversion, assumption or substitution under the\nPlan of any or all outstanding stock options or other stock-based awards\n(\"Conversion Options\") held by employees of an entity (the \"Acquired Company\")\nwith whom HP or one of HP's subsidiaries engages in an Acquisition. For purposes\nof this paragraph, an \"Acquisition\" shall mean (1) a dissolution or liquidation\nof all or substantially all of the assets of the Acquired Company, (2) a\npurchase of assets from the Acquired Company, whether or not the purchased\nassets represent substantially all of the assets of the Acquired Company or one\nof its subsidiaries, (3) a reverse merger in which the Acquired Company is the\nsurviving corporation but the shares of the Acquired Company's voting stock\noutstanding immediately preceding the merger are converted by virtue of the\nmerger into other property, whether in the form of securities, cash or\notherwise, or (4) any other capital reorganization or purchase in which more\nthan fifty percent (50%) of the shares of the Acquired Company entitled to vote\nare exchanged. Any conversion, assumption or substitution will be effective on\nthe closing date of the Acquisition. The Conversion Options may be nonstatutory\noptions or incentive stock options entitled to special tax treatment under\nSection 422 of the Code (\"ISOs\"). Notwithstanding any other provision of this\nPlan, the Committee may specify the Conversion Options' terms and conditions,\nwhich may be different from those applicable to other options or awards granted\nunder the Plan and may replicate the material terms and conditions of the\nConversion Options.\n\nThe Committee may authorize the conversion under the Plan of any or all\noutstanding stock appreciation rights held by employees of a Participating\nCompany. Such converted options are referred to as \"FSAR Conversion Options\",\nand shall be nonstatutory options. All FSAR Conversion Options shall have the\nsame terms and conditions as options granted under the Plan.\n\n                                       2\n\n\nIf any outstanding option under the Plan for any reason expires or is terminated\nwithout having been exercised in full, or if any Stock Awards are forfeited, the\nforfeited shares or shares allocable to the unexercised portion of such option\nshall again become available for grant pursuant to the Plan.\n\n                  PART 2. OPTIONS AND STOCK APPRECIATION RIGHTS\n\nV. INCENTIVE STOCK OPTIONS\n\nAny option granted under the Plan may be designated by the Committee as a\nnon-statutory option or as an ISO.\n\nNo option intended to qualify as an ISO may be granted under the Plan if such\ngrant, together with any applicable prior grants, would exceed any maximum\nestablished under the Internal Revenue Code for ISOs that may be granted to a\nsingle employee. Should it be determined that any ISO granted under the Plan\nexceeds such maximum, the ISO shall be null and void to the extent, but only to\nthe extent, of such excess. Section 422(d)(1) of the Internal Revenue Code\npresently provides that with respect to options granted after December 31, 1986\nthe aggregate fair market value (determined as of the time the ISO is granted)\nof the stock with respect to which ISOs are exercisable for the first time by an\nemployee in any calendar year under all incentive stock option plans of the\nCompany shall not exceed $100,000.\n\nNothing in this section shall be deemed to prevent the grant of options in\nexcess of the maximum established by the Internal Revenue Code where such excess\namount is treated as a nonstatutory option not entitled to special tax treatment\nunder Section 422 of the Internal Revenue Code.\n\nVI. TERMS, CONDITIONS AND FORM OF OPTIONS\n\nEach option granted under this Plan shall be authorized by action of the\nCommittee and shall be evidenced by a written agreement in such form as the\nCommittee shall from time to time approve, which agreements shall comply with\nand be subject to the following terms and conditions:\n\n    A. Options Non-transferable\n\n      (1) General\n\nExcept as provided in subsection VI.A(2) below, each option granted under the\nPlan by its terms shall not be transferable by the optionee otherwise than by\nwill, or by the laws of descent and distribution, and shall be exercised during\nthe lifetime of the optionee only by him. No option or interest therein may be\ntransferred, assigned, pledged or hypothecated by the optionee during his\nlifetime, whether by operation of law or otherwise, or be made subject to\nexecution, attachment or similar process.\n\n                                       3\n\n\n      (2) Transferability to Certain Vehicles\n\nThe Committee, in its sole discretion, may establish, as permitted by applicable\nlaw, rules and conditions under which an optionee may transfer an option to\nthose types of trusts or other vehicles that the Committee may determine to be\neligible for transfer.\n\n    B. Period of Option. The Committee may specify, at the time of grant, a\nvesting schedule of any option. If no vesting schedule is specified, no option\nmay be exercised before the first anniversary of the date upon which it was\ngranted, nor may it be exercised as to more than one-fourth of the number of\nshares covered thereby before the second anniversary of such date, nor as to\nmore than one-half of the number of shares covered thereby before the third\nanniversary of such date, nor as to more than three-fourths of the number of\nshares covered thereby before the fourth anniversary of such date. Any option\ngranted pursuant to the Plan shall become exercisable in full upon the\nretirement of the optionee because of age or total and permanent disability or\nupon the death of the optionee. Except as provided in this subsection B, no\noption shall be exercisable after the expiration of 10 years from the date upon\nwhich such option is granted. However, the Committee may, at the time an option\nis granted to any employee who is not subject to Section 16 of the Exchange Act,\nspecify a different term for the option up to a maximum term of 10.5 years. Each\noption shall be subject to termination before its date of expiration as\nhereinafter provided.\n\n    C. Exercise of Options. Options may be exercised only by written notice to\nthe Company at its head office accompanied by payment in U.S. dollars of the\nfull consideration for the shares as to which they are exercised, and, with\nrespect to nonstatutory options, by payment of all applicable U.S. withholding\ntaxes upon such exercise. In addition, if and to the extent authorized by the\nCommittee, optionees may make all or any portion of any payment due to the\nCompany upon exercise of an option by delivery of any property (including\nsecurities of the Company) other than cash, as long as such property constitutes\nvalid consideration for the stock under applicable law.\n\nThe Committee may, but need not, permit the payment of required tax withholding\ndue upon exercise of an option by the withholding of shares otherwise issuable\nupon exercise of the option. Option shares withheld in payment of such taxes\nshall be valued at the fair market value of the stock on the date of exercise.\nFair market value shall be deemed to be the mean of the highest and lowest\nquoted selling prices for such shares on the exercise date as reported on the\nNew York Stock Exchange Composite Tape. The Committee may impose special\nrestrictions on the use of option shares as payment for withholding taxes by\nindividuals subject to Section 16 of the Exchange Act.\n\nNo option may be exercised while the optionee is on any leave of absence from\nthe Company, other than an approved personal or medical leave having an\nemployment guaranty. Options will continue to vest during any authorized leave\nof absence, and may be exercised to the extent permitted by subsection VI.B\nabove upon the optionee's return to an active employment status.\n\n                                       4\n\n\n    D. Termination of Options\n\n      (1) Termination of Employment\n\nAll rights of an employee in an option, to the extent that it has not been\nexercised, shall terminate upon the termination of his employment for any\nreason.\n\n      (2) Retirement and Death\n\nIn the event of an employee's retirement due to age or total and permanent\ndisability, all rights of an employee in an option, to the extent that it has\nnot been exercised, shall terminate three years from the date thereof with\nrespect to nonstatutory options and three months from the retirement date with\nrespect to ISOs or upon expiration of the option, whichever shall first occur.\nIn the event of the death of the employee, the option shall terminate upon\nfailure of his designated representative to exercise the option in accordance\nwith the time period provided in subsection VI(E) below.\n\n      (3) Leave of Absence\n\nThe Committee may, but shall not be required to, authorize the continuation of\noptions held by employees who, at the Company's request or with the Company's\nconsent, are terminating or taking a leave of absence from the Company to accept\nemployment with not-for-profit or for-profit corporations, governmental\nagencies, industry associations or other organizations in connection with the\nCompany's investments or strategic alliances. Such approval must be obtained\nfrom the Committee prior to termination of employment in order to prevent the\nimmediate termination of options. The Committee may, in its sole discretion,\ndelegate its authority under this subsection to the Executive Committee.\n\n      (4) Divestiture\n\nIf an employee terminates because of a divestiture by the Company, the Committee\nmay, in its sole discretion, amend any option previously granted to such\nemployee pursuant to the Plan such that the option becomes exercisable in full\nand\/or permits the employee to exercise such option which has not already been\nexercised until the earlier of: (i) three months from the closing date of the\ndivestiture, or such longer date, if any, which the Committee may authorize, or\n(ii) the expiration of the option. The Committee may, in its sole discretion,\ndelegate its authority under this subsection to the Executive Committee.\n\n      (5) Voluntary Severance Program\n\nIf an employee terminates as a result of participation in a Participating\nCompany voluntary severance program approved by the Executive Committee, any\noption granted pursuant to the Plan shall become exercisable in full, and the\nemployee may exercise any such option that has not already been exercised until\nthe earlier of (i) three months from the employee's termination date, or (ii)\nthe expiration of the option.\n\n                                       5\n\n\n    E. Exercise by Representative Following Death of Employee. The employee, by\nwritten notice to the Company, may designate one or more persons (and from time\nto time change such designation) including his legal representative, who, by\nreason of his death, shall acquire the right to exercise all or a portion of the\noption. If the person or persons so designated wish to exercise any portion of\nthe option, they must do so within one year after the death of the employee or\nretired employee, as the case may be. All rights of the representative(s) in the\noption shall terminate upon failure to exercise the option within the time\nperiod set forth in this subsection VI.E. Any exercise by a representative shall\nbe subject to the provisions of this Plan.\n\nVII. MODIFICATION, EXTENSION AND RENEWAL OF OPTIONS\n\nThe Committee shall have the power to modify, extend or renew outstanding\noptions and authorize the grant of new options in substitution therefor,\nprovided that any such action may not have the effect of altering or impairing\nany rights or obligations of any option previously granted without the consent\nof the optionee.\n\n  The Committee shall have the power to lower the exercise price of an\noutstanding option not intended to qualify as an ISO under the Internal Revenue\nCode; provided, however, that the exercise price per share may not be reduced\nbelow 75% of the fair market value of a share of Common Stock on the date the\naction is taken to reduce the exercise price. Such fair market value shall be\ndeemed to be the mean of the highest and lowest quoted selling prices for such\nshares on that date as reported on The New York Stock Exchange Composite Tape.\n\nVIII. OPTION PRICE\n\nThe option price per share for the shares covered by each nonstatutory option\nshall be not less than 75% of the fair market value of a share of Common Stock\non the date the option is granted. The option price per share for ISOs shall be\nnot less than the fair market value on the option grant date. Such fair market\nvalue shall be deemed to be the mean of the highest and lowest quoted selling\nprices for such share on that date as reported on The New York Stock Exchange\nComposite Tape. The option price per share for Conversion Options shall be\ndetermined by the Committee at the time of the related merger or acquisition.\n\nIX. LOANS FOR EXERCISE OF OPTIONS\n\nAny option agreement under this Plan entered into with an employee may, but need\nnot, provide that the Company shall lend to the employee who holds the option\nthe funds for any exercise of his option. Any such loans made to individuals\nsubject to Section 16 of the Exchange Act shall be at a rate of interest\nadequate to avoid imputation of income under Sections 483 and 7872 of the\nInternal Revenue Code and shall be for a term not to exceed 15 months from the\ndate of exercise of the related option. Any loan by the Company to fund the\nexercise of an option shall be subject to such other terms and \n\n                                       6\n\n\nconditions as shall be set forth in the option agreement, which terms and\nconditions shall be determined by the Committee at the time of the grant of the\noption. Loans may or may not be secured by stock issued pursuant to such option\nexercises, at the Committee's discretion.\n\nX. STOCK APPRECIATION RIGHTS\n\n  A. General. This section shall apply to employees who hold options heretofore\nor hereafter granted under the Plan (\"Options\"). The Committee may, but shall\nnot be required to, grant to such employees stock appreciation rights as herein\nprovided with respect to not more than the number of shares (from time to time)\nsubject to the Options held by such employees. The stock appreciation rights\nshall be integral parts of the respective Options and shall have no existence\napart therefrom.\n\nA stock appreciation right shall be the right of the holder thereof to elect to\nsurrender part or all of any Option that is wholly exercisable, or of any\nexercisable portion of an Option that is partially exercisable, and receive in\nexchange therefore cash or shares of Common Stock (valued at current fair market\nvalue) or a combination thereof. Such cash or shares or combination shall have\nan aggregate value (\"Appreciation\") equal to the excess of the current fair\nmarket value of one share over the Option price of one share specified in such\nOption multiplied by the number of shares subject to such Option or the portion\nthereof that is surrendered. The current fair market value of a share shall be\nthe mean of the highest and lowest quoted selling prices for shares as reported\non The New York Stock Exchange Composite Tape on the day on which a stock\nappreciation right is exercised, or if no sale was made on such date, then on\nthe next preceding day on which such a sale was made. No fractional share shall\nbe issued on the exercise of a stock appreciation right, and settlement\ntherefore shall be made in cash.\n\nEach stock appreciation right granted under this Plan shall be subject to the\nfollowing terms and conditions: (1) each stock appreciation right shall be\nevidenced by a written agreement between the Company and the holder in such form\nas the Committee shall authorize; (2) each stock appreciation right granted\nunder the Plan by its terms shall not be transferable by the holder otherwise\nthan by will or by the laws of descent and distribution, and shall be exercised\nduring the lifetime of the holder only by him, and no stock appreciation right\nor interest therein may be transferred, assigned, pledged or hypothecated by the\nholder during his lifetime, whether by operation of law or otherwise, or be made\nsubject to execution, attachment or similar process; (3) all rights of an\nemployee in a stock appreciation right, to the extent that it has not been\nexercised, shall terminate upon the death of the employee or the termination of\nhis employment for any reason other than retirement because of age or total and\npermanent disability, and in case of such retirement three years from the date\nthereof with respect to nonstatutory Options and three months from the date\nthereof with respect to Options intended to qualify as ISOs or upon expiration\nof the Option, whichever shall first occur; provided, however, that the\nemployee, by written notice to the Company, may designate one or more persons\n(and from time to time change such designation), including his legal\nrepresentative, who, by reason of his death, shall acquire the right to exercise\nall or a portion of the rights \n\n                                       7\n\n\naccrued under the stock appreciation right as of the date of his death. If the\nperson or persons so designated wish to exercise any portion of the stock\nappreciation right, they must do so within one year after the death of the\nemployee or retired employee, as the case may be, and such exercise shall be\nsubject to the provisions of this Plan; and (4) the life of stock appreciation\nrights shall be coterminous with the life of the Options.\n\nThe holder of a stock appreciation right may exercise the same by (1) filing\nwith the Secretary of the Company a written election, which election shall be\ndelivered by the Secretary to the Committee, specifying (a) the Option or\nportion thereof to be surrendered, and (b) the percentage of the Appreciation\nthat he desires to receive in cash, if any; and (2) surrendering such Option for\ncancellation or partial cancellation, as the case may be; provided, however,\nthat any election that specifies that the holder of a stock appreciation right\ndesires to receive any portion of the Appreciation in cash shall be of no force\nor effect unless and until the Committee shall have consented to such election.\n\nUpon exercise of a stock appreciation right, the number of shares reserved for\nissuance under the Plan shall be reduced by the number of shares covered by the\nOption, or the portion thereof, which is surrendered in connection with such\nexercise.\n\nNothing in the Plan shall be construed to give any eligible employee any right\nto be granted a stock appreciation right. Neither the Plan nor the granting of a\nstock appreciation right nor any other action taken pursuant to the Plan shall\nconstitute or be evidence of any agreement or understanding, express or implied,\nthat the Company will employ the holder of a stock appreciation right for any\nperiod of time or in any position or at any particular rate of compensation. The\nholder of a stock appreciation right shall have no rights as a shareholder with\nrespect to the shares covered by his stock appreciation right until the date of\nissuance to him of a stock certificate therefor, and, except as otherwise\nspecifically provided in the stock option agreement for the Options, no\nadjustment will be made for dividends or other rights for which the record date\nis prior to the date such certificate is issued.\n\nThe Board or the Committee shall have the sole discretion to consent to approve\nor disapprove, in whole or in part, any election to receive any portion of the\nAppreciation in cash.\n\n  B. ADDITIONAL RESTRICTIONS APPLICABLE TO SECTION 16 EMPLOYEES. No stock\nappreciation right or related Option may be exercised during the first six\nmonths of its term, except in the event of death or total and permanent\ndisability of the holder occurring prior to the expiration of this six-month\nperiod.\n\nStock appreciation rights granted to individuals subject to Section 16 of the\nExchange Act must comply with any applicable provisions of Rule 16b-3. These\nrights shall contain such additional conditions or restrictions as may be\nrequired under this rule (or any successor rule) to qualify for the maximum\nexemption from Section 16 of the Exchange Act with respect to Plan transactions.\n\n                                       8\n\n\nXI. INDIVIDUAL GRANT LIMITATION\n\nThe Plan prohibits a single participant from receiving grants of options or\nstock appreciation rights during any single fiscal year of the Company for more\nthan an aggregate of 1,200,000 shares of Common Stock (subject to adjustment as\nprovided in Section XXII of the Plan). The amount of any payment of stock\nappreciation rights in cash shall be based upon the fair market value of Common\nStock on the date of exercise. Fair market value shall be the mean of the high\nand low prices of such stock on The New York Stock Exchange Composite Tape on\nthe date in question, or if no sales of such stock were made on that date, the\nmean of the high and low prices of such stock on the next preceding day on which\nsales were made.\n\n                          PART 3. STOCK AND CASH AWARDS\n\nXII. STOCK AND CASH AWARD DETERMINATION\n\nThe Committee may grant an eligible employee Stock Awards or awards of cash\n(\"Cash Awards\") at such times and in such amounts as the Committee may designate\nwhich in its opinion fully reflect the performance level and potential of such\nemployee. The Committee shall designate whether such awards are payable in\nCommon Stock, cash, or a combination thereof. Such awards shall be made in\naccordance with such guidelines as the Committee may from time to time adopt.\nStock Awards and Cash Awards shall be independent of any grant of an option\nunder this Plan and shall be made subject to such restrictions as the Committee\nmay determine to be appropriate.\n\nXIII. PAYMENT OF STOCK OR CASH AWARDS\n\n  A. No employee shall have the right to receive payment of any Stock Award or\nCash Award until notified of the amount of such award, in writing, by the\nCommittee or its authorized delegate.\n\n  B. Payment of Cash Awards shall be made in a lump sum or in annual\ninstallments over such period as the Committee may designate, which period shall\nnot exceed five years, provided that the Committee may from time to time\ndesignate minimum installment amounts.\n\n  C. After an award of Common Stock subject to restrictions (\"Restricted\nStock\"), such shares will be deposited in certificate or book entry form in\nescrow with the Company's Secretary. The employee shall retain all rights in the\nRestricted Stock while it is held in escrow including but not limited to voting\nrights and the right to receive dividends, except that the employee shall not\nhave the right to transfer or assign such shares until all restrictions\npertaining to such shares are terminated, at which time the applicable stock\ncertificates shall be released from escrow and delivered to the employee by the\nCompany's Secretary.\n\n                                       9\n\n\n  D. The Committee may permit, on such terms as it deems appropriate, use of\nRestricted Stock as partial or full payment upon exercise of a stock option\nunder the Company's incentive stock option or compensation plans or this Plan.\nIn the event shares of Restricted Stock are so tendered as consideration for the\nexercise of an option, a number of the shares issued upon the exercise of said\noption, equal to the number of shares of Restricted Stock used as consideration\ntherefor, shall be subject to the same restrictions as the Restricted Stock so\nsubmitted plus any additional restrictions that may be imposed by the Committee.\n\nXIV. TERMINATION OF RESTRICTIONS ON STOCK AWARDS\n\nThe Committee will establish the period or periods after which the restrictions\non Restricted Stock will lapse.\n\nThe Committee may in its discretion permit an employee to elect to receive in\nlieu of shares of Restricted Stock, at the expiration of the restrictions, a\ncash payment equal to the fair market value of the Common Stock on the date the\nrestrictions lapse. The Committee may also permit the employee to elect to pay\nrequired tax withholding due upon the lapse of restrictions with part of the\nshares due the employee at such time. The shares cancelled in payment of\nrequired tax withholding shall be valued at the fair market value of the Common\nStock on the date the restrictions lapse. Fair market value shall be the mean of\nthe high and low prices of such stock on The New York Stock Exchange Composite\nTape on the date in question, or if no sales of such stock were made on that\ndate, the mean of the high and low prices of such stock on the next preceding\nday on which sales were made.\n\nXV. RESTRICTIONS AND FORFEITURE OF STOCK AWARDS\n\nThe Company's obligation to deliver stock held in escrow is subject to the\ncondition that the employee remain an employee of the Company on active or\nauthorized leave status or be under contract to provide services to the Company\nas provided in Section XVII hereof for the entire deferral and\/or restriction\nperiod, including mandatory and optional deferrals. If the employee fails to\nmeet this condition, the employee's right to any such unpaid amounts or\nundelivered stock shall be forfeited. This provision may be waived by the\nCommittee in exceptional circumstances, including the employee serving at the\nCompany's request or with the Company's consent as an employee of a\nnot-for-profit or for-profit corporation, a governmental agency, industry\nassociation or other similar organization in connection with the Company's\ninvestments or strategic alliances. Unless the Committee provides otherwise, in\nthe event an employee holding restricted shares ceases to be on active pay\nstatus during the restricted period for a period of more than six months, the\nrestricted period shall be extended by a period of time equal to the length of\nthe period of inactive status.\n\n                                       10\n\n\nXVI. DEATH OF A PARTICIPATING EMPLOYEE HOLDING RESTRICTED STOCK\n\n  A. By written notice to the Company, an employee who has received a grant of\nRestricted Stock may designate one or more persons (and from time to time change\nsuch designation) who, by reason of his death, shall acquire the right to\nreceive any vested but unpaid awards held by the employee at the time of his\ndeath. Such awards shall be paid to the designated representative at such time\nand in such manner as if the employee were living.\n\n  B. In the event of the death of an employee holding unvested restricted\nshares, the employee's designated representative shall be entitled to receive a\nprorated number of shares determined by dividing the number of whole years\nlapsed since the grant date by the number of years in the restricted period and\nmultiplying this ratio by the number of shares subject to the restricted stock\naward. Remaining unvested shares shall be forfeited unless additional payments\nare specifically authorized by the Committee.\n\n  C. If at the time of the employee's death, there is no effective beneficiary\ndesignation as to all or some portion of the awards hereunder, such awards or\nsuch portion thereof shall be paid to or on the order of the legal\nrepresentative of the employee's estate. In the event of uncertainty as to the\ninterpretation or effect of any notice of designation, the Committee's decision\nwith respect thereto shall be conclusive.\n\nXVII. RETIREMENT OR DISABILITY OF EMPLOYEE HOLDING STOCK AWARD\n\nIn the event of total and permanent disability of an employee who has\nparticipated in the Plan, any unpaid but vested award shall be paid to the\nemployee if legally competent or to a committee or other legally designated\nguardian or representative if the employee is legally incompetent.\n\nAt the time of grant of any Stock Award, the Committee may specify special\nconditions or terms covering the status of such Stock Award upon the retirement\nor total and permanent disability of the employee. If no provision is made, and\nif the employee retires due to age or is totally and permanently disabled but is\nstill legally competent, the Company's obligation to make any payment due\nthereafter under the Stock Award feature of the Plan is subject to the\nconditions that for the entire period of deferral or restriction, including\nmandatory and optional deferrals:\n\n    A. An employee retiring due to age shall render as an independent contractor\nand not as an employee such advisory or consultative services to the Company as\nshall be reasonably requested by the Company's Board of Directors (the \"Board\")\nor the Executive Committee in writing from time to time, consistent with the\nstate of the retired employee's health and any employment or other activities in\nwhich such employee may be engaged. For purposes of this Plan, the employee\nshall not be required to devote a major portion of time to such services and\nshall be entitled to reimbursement for any \n\n\n                                       11\n\n\nreasonable out-of-pocket expenses incurred in connection with the performance of\nsuch services;\n\n    B. The employee shall not render services for any organization or engage\ndirectly or indirectly in any business which, in the opinion of the Committee,\ncompetes with, or is in conflict with the interest of, a Participating Company.\nThe employee shall be free, however, to purchase, as an investment or otherwise,\nstock or other securities of such organizations as long as they are listed upon\na recognized securities exchange or traded over-the-counter, or as long as such\ninvestment does not represent a substantial investment to the employee or a\nsignificant (greater than 10%) interest in the particular organization. For the\npurposes of this subsection XVII(B), any organization that is engaged in the\nbusiness of producing, leasing or selling products or providing services of the\ntype now or at any time hereafter made or provided by a Participating Company\nshall be deemed to compete with a Participating Company;\n\n    C. The employee shall not, without prior written authorization from the\nCompany, disclose to anyone outside a Participating Company, or use in other\nthan a Participating Company's business, any confidential information or\nmaterial relating to the business of any Participating Company, either during or\nafter employment with a Participating Company; and\n\n    D. The employee shall disclose promptly and assign to the Company all right,\ntitle and interest in any invention or idea, patentable or not, made or\nconceived by the employee during employment by the Company, relating in any\nmanner to the actual or anticipated business, research or development work of\nthe Company and shall do anything reasonably necessary to enable the Company to\nsecure a patent where appropriate in the United States and in foreign countries.\n\nXVIII. PERFORMANCE-BASED RESTRICTED STOCK AWARDS.\n\n  A. Award Agreement. The Committee, in its discretion, may grant\nperformance-based restricted stock awards to an eligible employee or make\nvesting of performance-based restricted shares contingent upon the attainment of\nperformance goals relating to: (1) earnings growth, (2) return on shareholders'\nequity, (3) earnings per share, (4) return on assets, (5) revenue growth,\n(6)stock price, or (7) other business goals defined by the Committee, each as\nmay be adjusted by extraordinary financial events, if applicable. Any such\nobjectives and the period in which such objectives are to be met will be\ndetermined by the Committee at the time of grant and reflected in the written\naward agreement. The number or value of performance shares that will be paid out\nto a participant at the end of the performance period will depend on the extent\nto which the Company has met the objectives determined by the Committee.\n\n  B. Payment of Performance-based Restricted Shares. Payment of earned\nperformance-based restricted shares is made as soon as practicable after the\nCommittee has determined that the performance goals have been met. The\nCommittee, in its discretion, may pay earned performance-based restricted stock\nin the form of shares of Common Stock, cash \n\n                                       12\n\n\nor a combination thereof. Payment of performance-based restricted stock in cash\nresults in the return of the shares to the Plan, and the shares subject to an\naward paid in cash will again be available for grant under the Plan. Unless\notherwise established by the Committee in the applicable award agreement, upon a\nparticipant's termination of employment, for any reason, all remaining unearned\nperformance-based restricted shares shall be forfeited and returned to the Plan\nand shall again be available for award under the Plan. The Committee shall also\nset forth in the grant the number of performance-based restricted shares or the\namount of payment to be made under a performance award if the performance goals\nare met or exceeded, including the fixing of a maximum payment (subject to\nsubsection XVIII(D)).\n\n  C. Nontransferability. A performance share award is nontransferable other than\nby will, the laws of descent and distribution or, if permitted by the Committee,\nbeneficiary designation, and a participant's rights under an award are\nexercisable during the participant's lifetime only by the participant. The\nextent to which a participant's rights under an award of performance-based\nrestricted stock are exercisable, if at all, in the event of the total and\npermanent disability or death during a performance period of a participant shall\nbe determined by the Committee at the time of grant.\n\n  D. Maximum Payment. In any fiscal year, no individual may receive payment for\nperformance-based restricted stock in excess of an aggregate of 120,000,000\nshares of Common Stock, including stock options, stock appreciation rights and\nother Stock Awards granted under this Plan (subject to adjustment as provided in\nSection XXII of the Plan). The amount of any payment of performance-based\nrestricted shares in cash shall be based upon the fair market value of the\nCommon Stock on the date the restrictions lapse. Fair market value shall be the\nmean of the high and low prices of such stock on The New York Stock Exchange\nComposite Tape on the date in question, or if no sales of such stock were made\non that date, the mean of the high and low prices of such stock on the next\npreceding day on which sales were made.\n\n                           PART 4. GENERAL PROVISIONS\n\nXIX. ASSIGNMENTS\n\nThe rights and benefits under this Plan may not be assigned except for the\ndesignation of a representative or beneficiary, as provided in Sections VI, X,\nXVI and XVIII.\n\nXX. TIME FOR GRANTING OPTIONS OR STOCK AWARDS\n\nAll options for shares, stock appreciation rights and Stock Awards subject to\nthis Plan shall be granted, if at all, not later than 10 years after the\nadoption of this Plan by the Board.\n\n                                       13\n\n\nXXI. LIMITATION OF RIGHTS\n\n  A. No Right to an Option or Stock Award. Nothing in the Plan shall be \nconstrued to give any personnel of the Participating Companies any right to be\ngranted an option, Stock Award or Cash Award.\n\n  B. No Employment Right. Neither the Plan, nor the granting of an option, Stock\nAward or Cash Award nor any other action taken pursuant to the Plan shall\nconstitute or be evidence of any agreement or understanding, express or implied,\nthat any of the Participating Companies will employ a grantee for any period of\ntime or in any position, or at any particular rate of compensation.\n\n  C. No Shareholder Rights for Options. An optionee shall have no rights as a\nshareholder with respect to the shares covered by his options until the date of\nthe issuance to him of a stock certificate therefor, and no adjustment will be\nmade for dividends or other rights for which the record date is prior to the\ndate such certificate is issued.\n\nXXII. CHANGES IN PRESENT STOCK\n\nIn the event of any merger, consolidation, reorganization, recapitalization,\nstock dividend, stock split, or other change in the corporate structure or\ncapitalization affecting the Company's present Common Stock, appropriate\nadjustment shall be made by the Board in the number (including the aggregate\nnumbers specified in Section IV, XI and XVIII(D)) and kind of shares that are or\nmay become subject to options and Stock Awards granted or to be granted\nhereunder, and in the option price of shares which are subject to options\ngranted hereunder.\n\nXXIII. CHANGE IN CONTROL\n\nIn the event that the Company is merged into or acquired by another entity in a\ntransaction involving a change in control, the Committee shall have complete\nauthority and discretion, but not the obligation, to accelerate the vesting of\noutstanding stock options and the termination of restrictions on Stock Awards.\n\nThe Committee may also ask the Board to negotiate, as part of any agreement\ninvolving a sale or merger of the Company, a sale of substantially all the\nCompany's assets or similar transaction, terms providing protection for\nemployees holding stock options or Stock Awards.\n\nXXIV. EFFECTIVE DATE OF THE PLAN\n\nThe Plan shall take effect on the date of adoption by the Board, subject to\napproval by the shareholders of the Company at a meeting held within 12 months\nafter the date of such adoption. Options, Stock Awards or Cash Awards may be\ngranted under the Plan at any time after the adoption of the Plan by the Board\nand prior to the termination of this Plan.\n\n\n                                       14\n\n\nXXV. AMENDMENT OF THE PLAN\n\nThe Board or the Committee may suspend or discontinue the Plan or revise or\namend it in any respect whatsoever; provided, however, that the Company may seek\nshareholder approval of an amendment if determined to be required by or\nadvisable by any law or regulation, including without limitation, any\nregulations of the Securities and Exchange Commission or the Internal Revenue\nService, the rules of any stock exchange on which the Company's stock is listed\nor other applicable law or regulation.\n\nXXVI. NOTICE\n\nAny written notice to the Company required by any of the provisions of this Plan\nshall be addressed to the Secretary of the Company and shall become effective\nwhen it is received.\n\nXXVII. COMPANY BENEFIT PLANS\n\nNothing contained in this Plan shall prevent the employee prior to death, or the\nemployee's dependents or beneficiaries after the employee's death, from\nreceiving, in addition to any awards provided for under this Plan and any\nsalary, any payments under a Company retirement plan or which may be otherwise\npayable or distributable to such employee, or to the employee's dependents or\nbeneficiaries under any other plan or policy of the Company or otherwise.\n\nXXVIII. UNFUNDED PLAN\n\nInsofar as it provides for awards of stock or cash, this Plan shall be unfunded.\nAlthough bookkeeping accounts may be established with respect to employees who\nare granted awards of stock under this Plan, any such accounts will be used\nmerely as a bookkeeping convenience. Except for the holding of Restricted Stock\nin escrow pursuant to subsection XIII(C), the Company shall not be required to\nsegregate any assets that may at any time be represented by awards of stock or\ncash, nor shall this Plan be construed as providing for such segregation, nor\nshall the Company nor the Board nor the Committee be deemed to be a trustee of\nstock or cash to be awarded under the Plan. Any liability of the Company to any\nemployee with respect to an award of stock or cash under this Plan shall be\nbased solely upon any contractual obligations that may be created by the Plan;\nno such obligation of the Company shall be deemed to be secured by any pledge or\nother encumbrance on any property of the Company. Neither the Company nor the\nBoard nor the Committee shall be required to give any security or bond for the\nperformance of any obligation that may be created by this Plan.\n\nXXIX. GOVERNING LAW\n\nThis Plan and all determinations made and actions taken pursuant hereto shall be\ngoverned by the law of the State of California and construed accordingly.\n\n                                       15\n\n\n11\/24\/94       Adopted by the Compensation Committee \n2\/28\/95        Approved by the Shareholders \n4\/17\/95        Two for one stock split\n7\/16\/96        Two for one stock split\n11\/21\/96       Part 1, Section II, Part 2, Section X and Part 4, Section XXV \n               amended by the Compensation Committee \n7\/17\/97        Part 1, Section IV amended by the Compensation Committee\n5\/20\/98        The Company reincorporated in the State of Delaware\n2\/12\/99        Part 2, Section VI(B) &amp; (D) amended by the Compensation Committee\n9\/16\/99        Part 1, Section VI amended by the Compensation Committee \n6\/30\/00        Part 2, Section VI(C) &amp; Part 3, Section XIV amended by the\n               Compensation Committee \n10\/27\/00       Two for one stock split in the form of a stock dividend\n\n\n\n\n                                       16\n<\/pre>\n","protected":false},"template":"","meta":{"_acf_changed":false,"_stopmodifiedupdate":true,"_modified_date":"","_cloudinary_featured_overwrite":false},"corporate_contracts_companies":[7770],"corporate_contracts_industries":[9508],"corporate_contracts_types":[9539,9545],"class_list":["post-38221","corporate_contracts","type-corporate_contracts","status-publish","hentry","corporate_contracts_companies-hewlett-packard-co","corporate_contracts_industries-technology__hardware","corporate_contracts_types-compensation","corporate_contracts_types-compensation__esp"],"acf":[],"_links":{"self":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts\/38221","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts"}],"about":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/types\/corporate_contracts"}],"wp:attachment":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/media?parent=38221"}],"wp:term":[{"taxonomy":"corporate_contracts_companies","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_companies?post=38221"},{"taxonomy":"corporate_contracts_industries","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_industries?post=38221"},{"taxonomy":"corporate_contracts_types","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_types?post=38221"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}