\n| \n SECTION 16.<\/p>\n<\/td>\n | <\/td>\n | <\/td>\n | <\/td>\n | \n \nEXECUTION<\/a>\n<\/p>\n<\/td>\n | <\/td>\n | <\/td>\n | \n 21<\/p>\n<\/td>\n | <\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n -iv-<\/p>\n<\/p>\n
\nCISCO SYSTEMS, INC. <\/strong><\/p>\n2005 STOCK INCENTIVE PLAN <\/strong><\/p>\nAS AMENDED AND RESTATED <\/strong><\/p>\n(Effective as of November 12, 2009)<\/p>\n SECTION 1.<\/strong> INTRODUCTION.<\/u><\/p>\nThe Company153s shareholders approved the Cisco Systems, Inc. 2005 Stock
\nIncentive Plan, as amended and restated and effective on November 15, 2007. The
\nCompany153s Board of Directors approved an amendment and restatement of the Plan;
\nprovided that, the amendment and restatement of the Plan shall become effective
\nupon its approval by Company shareholders. If the Company153s shareholders do not
\napprove the amendment and restatement of the Plan, Awards will be made under the
\nPlan as approved by shareholders on November 15, 2007.<\/p>\n The purpose of the Plan is to promote the long-term success of the Company
\nand the creation of shareholder value by offering Key Employees an opportunity
\nto share in such long-term success by acquiring a proprietary interest in the
\nCompany.<\/p>\n The Plan seeks to achieve this purpose by providing for discretionary
\nlong-term incentive Awards in the form of Options (which may constitute
\nIncentive Stock Options or Nonstatutory Stock Options), Stock Appreciation
\nRights, Stock Grants, and Stock Units.<\/p>\n The Plan shall be governed by, and construed in accordance with, the laws of
\nthe State of California (except its choice-of-law provisions).<\/p>\n Capitalized terms shall have the meaning provided in Section 2 unless
\notherwise provided in this Plan or any related Stock Option Agreement, SAR
\nAgreement, Stock Grant Agreement or Stock Unit Agreement.<\/p>\n SECTION 2. <\/strong>DEFINITIONS<\/u>. <\/strong><\/p>\n(a) “Affiliate” means any entity other than a Subsidiary, if the Company
\nand\/or one or more Subsidiaries own not less than 50% of such entity.<\/p>\n (b) “Award” means any award of an Option, SAR, Stock Grant or Stock Unit
\nunder the Plan.<\/p>\n (c) “Board” means the Board of Directors of the Company, as constituted from
\ntime to time.<\/p>\n (d) “Cashless Exercise” means, to the extent that a Stock Option Agreement so
\nprovides and as permitted by applicable law, a program approved by the Committee
\nin which payment may be made all or in part by delivery (on a form prescribed by
\nthe Committee) of an irrevocable direction to a securities broker to sell Shares
\nand to deliver all or part of the sale proceeds to the Company in payment of the
\naggregate Exercise Price and, if<\/p>\n<\/p>\n -1-<\/p>\n<\/p>\n
\napplicable, the amount necessary to satisfy the Company153s withholding
\nobligations at the minimum statutory withholding rates, including, but not
\nlimited to, U.S. federal and state income taxes, payroll taxes, and foreign
\ntaxes, if applicable.<\/p>\n (e) “Cause” means, except as may otherwise be provided in a Participant153s
\nemployment agreement or Award agreement, a conviction of a Participant for a
\nfelony crime or the failure of a Participant to contest prosecution for a felony
\ncrime, or a Participant153s misconduct, fraud or dishonesty (as such terms are
\ndefined by the Committee in its sole discretion), or any unauthorized use or
\ndisclosure of confidential information or trade secrets, in each case as
\ndetermined by the Committee, and the Committee153s determination shall be
\nconclusive and binding.<\/p>\n (f) “Change In Control” except as may otherwise be provided in a
\nParticipant153s employment agreement or Award agreement, means the occurrence of
\nany of the following:<\/p>\n (i) A change in the composition of the Board over a period of thirty-six
\nconsecutive months or less such that a majority of the Board members ceases, by
\nreason of one or more contested elections for Board membership, to be comprised
\nof individuals who either (A) have been Board members continuously since the
\nbeginning of such period or (B) have been elected or nominated for election as
\nBoard members during such period by at least a majority of the Board members
\ndescribed in clause (A) who were still in office at the time the Board approved
\nsuch election or nomination; or<\/p>\n (ii) The acquisition, directly or indirectly, by any person or related group
\nof persons (other than the Company or a person that directly or indirectly
\ncontrols, is controlled by, or is under common control with, the Company) of
\nbeneficial ownership (within the meaning of Rule 13d-3 under the Exchange Act)
\nof securities of the Company representing more than 35% of the total combined
\nvoting power of the Company153s then outstanding securities pursuant to a tender
\nor exchange offer made directly to the Company153s shareholders which the Board
\ndoes not recommend such shareholders accept.<\/p>\n (g) “Code” means the Internal Revenue Code of 1986, as amended, and the
\nregulations and interpretations promulgated thereunder.<\/p>\n (h) “Committee” means a committee described in Section 3.<\/p>\n (i) “Common Stock” means the Company153s common stock.<\/p>\n (j) “Company” means Cisco Systems, Inc., a California corporation.<\/p>\n (k) “Consultant” means an individual who performs bona fide services to the
\nCompany, a Parent, a Subsidiary or an Affiliate, other than as an Employee or
\nDirector or Non-Employee Director.<\/p>\n<\/p>\n -2-<\/p>\n<\/p>\n
\n(l) “Corporate Transaction” except as may otherwise be provided in a
\nParticipant153s employment agreement or Award agreement, means the occurrence of
\nany of the following shareholder approved transactions:<\/p>\n (i) The consummation of a merger or consolidation of the Company with or into
\nanother entity or any other corporate reorganization, if more than 50% of the
\ncombined voting power of the continuing or surviving entity153s securities
\noutstanding immediately after such merger, consolidation or other reorganization
\nis owned by persons who were not shareholders of the Company immediately prior
\nto such merger, consolidation or other reorganization; or<\/p>\n (ii) The sale, transfer or other disposition of all or substantially all of
\nthe Company153s assets.<\/p>\n A transaction shall not constitute a Corporate Transaction if its sole
\npurpose is to change the state of the Company153s incorporation or to create a
\nholding company that will be owned in substantially the same proportions by the
\npersons who held the Company153s securities immediately before such transactions.\n<\/p>\n (m) “Covered Employees” means those persons who are subject to the
\nlimitations of Code Section 162(m).<\/p>\n (n) “Director” means a member of the Board who is also an Employee.<\/p>\n (o) “Disability” means that the Key Employee is classified as disabled under
\na long-term disability policy of the Company or, if no such policy applies, the
\nKey Employee is unable to engage in any substantial gainful activity by reason
\nof any medically determinable physical or mental impairment which can be
\nexpected to result in death or which has lasted or can be expected to last for a
\ncontinuous period of not less than 12 months.<\/p>\n (p) “Employee” means an individual who is a common-law employee of the
\nCompany, a Parent, a Subsidiary or an Affiliate.<\/p>\n (q) “Exchange Act” means the Securities Exchange Act of 1934, as amended.\n<\/p>\n (r) “Exercise Price” means, in the case of an Option, the amount for which a
\nShare may be purchased upon exercise of such Option, as specified in the
\napplicable Stock Option Agreement. “Exercise Price,” in the case of a SAR, means
\nan amount, as specified in the applicable SAR Agreement, which is subtracted
\nfrom the Fair Market Value in determining the amount payable upon exercise of
\nsuch SAR.<\/p>\n (s) “Fair Market Value” means the market price of a Share as determined in
\ngood faith by the Committee. The Fair Market Value shall be determined by the
\nfollowing:<\/p>\n<\/p>\n -3-<\/p>\n<\/p>\n
\n(i) If the Shares were traded over-the-counter or listed with NASDAQ on the
\ndate in question, then the Fair Market Value shall be equal to the last
\ntransaction price quoted by the NASDAQ system for the date in question or
\n(ii) if the Common Stock is listed on the New York Stock Exchange or the
\nAmerican Stock Exchange on the date in question, the Fair Market Value is the
\nclosing selling price for the Common Stock as such price is officially quoted in
\nthe composite tape of transactions on the exchange determined by the Committee
\nto be the primary market for the Common Stock for the date in question;
\nprovided, however, that if there is no such reported price for the Common Stock
\nfor the date in question under (i) or (ii), then such price on the last
\npreceding date for which such price exists shall be determinative of Fair Market
\nValue.<\/p>\n If neither (i) or (ii) are applicable, then the Fair Market Value shall be
\ndetermined by the Committee in good faith on such basis as it deems appropriate.\n<\/p>\n Whenever possible, the determination of Fair Market Value by the Committee
\nshall be based on the prices reported in the Western Edition of The Wall
\nStreet Journal<\/u>. Such determination shall be conclusive and binding on all
\npersons.<\/p>\n (t) “Fiscal Year” means the Company153s fiscal year.<\/p>\n (u) “Grant” means any grant of an Award under the Plan.<\/p>\n (v) “Incentive Stock Option” or “ISO” means an incentive stock option
\ndescribed in Code Section 422.<\/p>\n (w) “Key Employee” means an Employee, Director, Non-Employee Director or
\nConsultant who has been selected by the Committee to receive an Award under the
\nPlan.<\/p>\n (x) “Non-Employee Director” means a member of the Board who is not an
\nEmployee.<\/p>\n (y) “Nonstatutory Stock Option” or “NSO” means a stock option that is not an
\nISO.<\/p>\n (z) “Option” means an ISO or NSO granted under the Plan entitling the
\nOptionee to purchase Shares.<\/p>\n (aa) “Optionee” means an individual, estate or other entity that holds an
\nOption.<\/p>\n (bb) “Parent” means any corporation (other than the Company) in an unbroken
\nchain of corporations ending with the Company, if each of the corporations other
\nthan the Company owns stock possessing 50% or more of the total combined voting
\npower of all classes of stock in one of the other corporations in such chain. A
\ncorporation that attains the status of a Parent on a date after the adoption of
\nthe Plan shall be considered a Parent commencing as of such date.<\/p>\n (cc) “Participant” means an individual or estate or other entity that holds
\nan Award.<\/p>\n<\/p>\n -4-<\/p>\n<\/p>\n
\n(dd) “Performance Goal” means an objective formula or standard determined by
\nthe Committee with respect to each Performance Period utilizing one or more of
\nthe following factors and any objectively verifiable adjustment(s) thereto
\npermitted and preestablished by the Committee in accordance with Code
\nSection 162(m): (i) operating income; (ii) earnings before interest, taxes,
\ndepreciation and amortization; (iii) earnings; (iv) cash flow; (v) market share;
\n(vi) sales; (vii) revenue; (viii) profits before interest and taxes;
\n(ix) expenses; (x) cost of goods sold; (xi) profit\/loss or profit margin;
\n(xii) working capital; (xiii) return on capital, equity or assets;
\n(xiv) earnings per share; (xv) economic value added; (xvi) stock price;
\n(xvii) price\/earnings ratio; (xviii) debt or debt-to-equity; (xix) accounts
\nreceivable; (xx) writeoffs; (xxi) cash; (xxii) assets; (xxiii) liquidity;
\n(xxiv) operations; (xxv) intellectual property (e.g., patents); (xxvi) product
\ndevelopment; (xxvii) regulatory activity; (xxviii) manufacturing, production or
\ninventory; (xxix) mergers and acquisitions or divestitures; (xxx) financings;
\nand\/or (xxxi) customer satisfaction, each with respect to the Company and\/or one
\nor more of its affiliates or operating units. Awards issued to persons who are
\nnot Covered Employees may take into account other factors (including subjective
\nfactors).<\/p>\n (ee) “Performance Period” means any period not exceeding 36 months as
\ndetermined by the Committee, in its sole discretion. The Committee may establish
\ndifferent Performance Periods for different Participants, and the Committee may
\nestablish concurrent or overlapping Performance Periods.<\/p>\n (ff) “Plan” means this Cisco Systems, Inc. 2005 Stock Incentive Plan as
\namended and restated, and as it may be further amended from time to time.<\/p>\n (gg) “Previous Plan Award” means any award of an Option, SAR, Stock Grant or
\nStock Unit under the Cisco Systems, Inc. 1996 Stock Incentive Plan, the Cisco
\nSystems, Inc. SA Acquisition Long-Term Incentive Plan or the Cisco Systems, Inc.
\nWebEx Acquisition Long-Term Incentive Plan.<\/p>\n (hh) “Re-Price” means that the Company has lowered or reduced the Exercise
\nPrice of outstanding Options and\/or outstanding SARs for any Participant(s),
\nwhether through amendment, cancellation, or replacement grants, or any other
\nmeans.<\/p>\n (ii) “SAR Agreement” means the agreement described in Section 8 evidencing
\neach Award of a Stock Appreciation Right.<\/p>\n (jj) “SEC” means the Securities and Exchange Commission.<\/p>\n (kk) “Section 16 Persons” means those officers, directors or other persons
\nwho are subject to Section 16 of the Exchange Act.<\/p>\n (ll) “Securities Act” means the Securities Act of 1933, as amended.<\/p>\n (mm) “Service” means service as an Employee, Director, Non-Employee Director
\nor Consultant. A Participant153s Service does not terminate when continued service
\ncrediting<\/p>\n<\/p>\n -5-<\/p>\n<\/p>\n
\nis required by applicable law. However, for purposes of determining whether
\nan Option is entitled to continuing ISO status, a common-law employee153s Service
\nwill be treated as terminating ninety (90) days after such Employee went on
\nleave, unless such Employee153s right to return to active work is guaranteed by
\nlaw or by a contract. Service terminates in any event when the approved leave
\nends, unless such Employee immediately returns to active work. The Committee
\ndetermines which leaves count toward Service, and when Service terminates for
\nall purposes under the Plan. Further, unless otherwise determined by the
\nCommittee, a Participant153s Service shall not be deemed to have terminated merely
\nbecause of a change in the capacity in which the Participant provides service to
\nthe Company, a Parent, Subsidiary or Affiliate, or a transfer between entities
\n(the Company or any Parent, Subsidiary, or Affiliate); provided that there is no
\ninterruption or other termination of Service.<\/p>\n (nn) “Share” means one share of Common Stock.<\/p>\n (oo) “Stock Appreciation Right” or “SAR” means a stock appreciation right
\nawarded under the Plan.<\/p>\n (pp) “Stock Grant” means Shares awarded under the Plan.<\/p>\n (qq) “Stock Grant Agreement” means the agreement described in Section 9
\nevidencing each Award of a Stock Grant.<\/p>\n (rr) “Stock Option Agreement” means the agreement described in Section 6
\nevidencing each Award of an Option.<\/p>\n (ss) “Stock Unit” means a bookkeeping entry representing the equivalent of
\none Share, as awarded under the Plan.<\/p>\n (tt) “Stock Unit Agreement” means the agreement described in Section 10
\nevidencing each Award of a Stock Unit.<\/p>\n (uu) “Subsidiary” means any corporation (other than the Company) in an
\nunbroken chain of corporations beginning with the Company, if each of the
\ncorporations other than the last corporation in the unbroken chain owns stock
\npossessing 50% or more of the total combined voting power of all classes of
\nstock in one of the other corporations in such chain. A corporation that attains
\nthe status of a Subsidiary on a date after the adoption of the Plan shall be
\nconsidered a Subsidiary commencing as of such date.<\/p>\n (vv) “10-Percent Shareholder” means an individual who owns more than 10% of
\nthe total combined voting power of all classes of outstanding stock of the
\nCompany, its Parent or any of its Subsidiaries. In determining stock ownership,
\nthe attribution rules of Section 424(d) of the Code shall be applied.<\/p>\n<\/p>\n -6-<\/p>\n<\/p>\n
\nSECTION 3. <\/strong>ADMINISTRATION<\/u>. <\/strong><\/p>\n(a) Committee Composition. The Board or a Committee appointed by the Board
\nshall administer the Plan. Unless the Board provides otherwise, the Company153s
\nCompensation & Management Development Committee shall be the Committee.
\nMembers of the Committee shall serve for such period of time as the Board may
\ndetermine and shall be subject to removal by the Board at any time. The Board
\nmay also at any time terminate the functions of the Committee and reassume all
\npowers and authority previously delegated to the Committee.<\/p>\n The Committee shall have membership composition which enables (i) Awards to
\nSection 16 Persons to qualify as exempt from liability under Section 16(b) of
\nthe Exchange Act and (ii) Awards to Covered Employees to qualify as
\nperformance-based compensation as provided under Code Section 162(m).<\/p>\n The Board may also appoint one or more separate committees of the Board, each
\ncomposed of two or more directors of the Company who need not qualify under Rule
\n16b-3 or Code Section 162(m), that may administer the Plan with respect to Key
\nEmployees who are not Section 16 Persons or Covered Employees, respectively, may
\ngrant Awards under the Plan to such Key Employees and may determine all terms of
\nsuch Awards.<\/p>\n Notwithstanding the foregoing, the Board shall constitute the Committee and
\nshall administer the Plan with respect to Non-Employee Directors, shall grant
\nAwards under the Plan to such Non-Employee Directors, and shall determine all
\nterms of such Awards.<\/p>\n (b) Authority of the Committee. Subject to the provisions of the Plan, the
\nCommittee shall have full authority and sole discretion to take any actions it
\ndeems necessary or advisable for the administration of the Plan. Such actions
\nshall include:<\/p>\n (i) selecting Key Employees who are to receive Awards under the Plan;<\/p>\n (ii) determining the type, number, vesting requirements and other features
\nand conditions of such Awards and amending such Awards;<\/p>\n (iii) correcting any defect, supplying any omission, or reconciling any
\ninconsistency in the Plan or any Award agreement;<\/p>\n (iv) accelerating the vesting, or extending the post-termination exercise
\nterm, of Awards at any time and under such terms and conditions as it deems
\nappropriate;<\/p>\n (v) interpreting the Plan;<\/p>\n (vi) making all other decisions relating to the operation of the Plan; and\n<\/p>\n (vii) adopting such plans or subplans as may be deemed necessary or
\nappropriate to provide for the participation by Key Employees of the Company and
\nits Subsidiaries and Affiliates who reside outside the U.S., which plans and\/or
\nsubplans shall be attached hereto as Appendices.<\/p>\n<\/p>\n -7-<\/p>\n<\/p>\n
\nThe Committee may adopt such rules or guidelines as it deems appropriate to
\nimplement the Plan. The Committee153s determinations under the Plan shall be final
\nand binding on all persons.<\/p>\n (c) Indemnification. To the maximum extent permitted by applicable law, each
\nmember of the Committee, or of the Board, shall be indemnified and held harmless
\nby the Company against and from (i) any loss, cost, liability, or expense that
\nmay be imposed upon or reasonably incurred by him or her in connection with or
\nresulting from any claim, action, suit, or proceeding to which he or she may be
\na party or in which he or she may be involved by reason of any action taken or
\nfailure to act under the Plan or any Stock Option Agreement, SAR Agreement,
\nStock Grant Agreement or Stock Unit Agreement, and (ii) from any and all amounts
\npaid by him or her in settlement thereof, with the Company153s approval, or paid
\nby him or her in satisfaction of any judgment in any such claim, action, suit,
\nor proceeding against him or her, provided he or she shall give the Company an
\nopportunity, at its own expense, to handle and defend the same before he or she
\nundertakes to handle and defend it on his or her own behalf. The foregoing right
\nof indemnification shall not be exclusive of any other rights of indemnification
\nto which such persons may be entitled under the Company153s Articles of
\nIncorporation or Bylaws, by contract, as a matter of law, or otherwise, or under
\nany power that the Company may have to indemnify them or hold them harmless.\n<\/p>\n SECTION 4.<\/strong> GENERAL<\/u>.<\/strong><\/p>\n(a) General Eligibility. Only Employees, Directors, Non-Employee Directors
\nand Consultants shall be eligible for designation as Key Employees by the
\nCommittee, in its sole discretion.<\/p>\n (b) Incentive Stock Options. Only Key Employees who are common-law employees
\nof the Company, a Parent or a Subsidiary shall be eligible for the grant of
\nISOs. In addition, a Key Employee who is a 10-Percent Shareholder shall not be
\neligible for the grant of an ISO unless the requirements set forth in
\nSection 422(c)(5) of the Code are satisfied.<\/p>\n (c) Restrictions on Shares. Any Shares issued pursuant to an Award shall be
\nsubject to such rights of repurchase, rights of first refusal and other transfer
\nrestrictions as the Committee may determine, in its sole discretion. Such
\nrestrictions shall apply in addition to any restrictions that may apply to
\nholders of Shares generally and shall also comply to the extent necessary with
\napplicable law. In no event shall the Company be required to issue fractional
\nShares under this Plan.<\/p>\n (d) Beneficiaries. Unless stated otherwise in an Award agreement, a
\nParticipant may designate one or more beneficiaries with respect to an Award by
\ntimely filing the prescribed form with the Company. A beneficiary designation
\nmay be changed by filing the prescribed form with the Company at any time before
\nthe Participant153s death. If no beneficiary was designated or if no designated
\nbeneficiary survives the Participant, then<\/p>\n<\/p>\n -8-<\/p>\n<\/p>\n
\nafter a Participant153s death any vested Award(s) shall be transferred or
\ndistributed to the Participant153s estate.<\/p>\n (e) Performance Conditions. The Committee may, in its discretion, include
\nperformance conditions in an Award or grant an Award upon the satisfaction of
\nperformance conditions. If performance conditions are included in Awards to
\nCovered Employees, then such Awards may be subject to the achievement of
\nPerformance Goals established by the Committee. Such Performance Goals shall be
\nestablished and administered pursuant to the requirements of Code
\nSection 162(m). Before any Shares underlying an Award or any Award payments
\nsubject to Performance Goals are released to a Covered Employee with respect to
\na Performance Period, the Committee shall certify in writing that the
\nPerformance Goals for such Performance Period have been satisfied. Awards with
\nperformance conditions that are granted to Key Employees who are not Covered
\nEmployees need not comply with the requirements of Code Section 162(m).<\/p>\n (f) No Rights as a Shareholder. A Participant, or a transferee of a
\nParticipant, shall have no rights as a shareholder with respect to any Common
\nStock covered by an Award until such person has satisfied all of the terms and
\nconditions to receive such Common Stock, has satisfied any applicable
\nwithholding or tax obligations relating to the Award and the Shares have been
\nissued (as evidenced by an appropriate entry on the books of the Company or a
\nduly authorized transfer agent of the Company).<\/p>\n (g) Termination of Service. Unless the applicable Award agreement or, with
\nrespect to Participants who reside in the U.S., the applicable employment
\nagreement provides otherwise, the following rules shall govern the vesting,
\nexercisability and term of outstanding Awards held by a Participant in the event
\nof termination of such Participant153s Service (in all cases subject to the
\nexpiration term of the Option or SAR as applicable): (i) upon termination of
\nService for any reason, all unvested portions of any outstanding Awards shall be
\nimmediately forfeited without consideration and the vested portions of any
\noutstanding Stock Units shall be settled upon termination; (ii) if the Service
\nof a Participant is terminated for Cause, then all unexercised Options and SARs,
\nunvested portions of Stock Units and unvested portions of Stock Grants shall
\nterminate and be forfeited immediately without consideration; (iii) if the
\nService of a Participant is terminated for any reason other than for Cause,
\ndeath, or Disability, then the vested portion of his or her then-outstanding
\nOptions and\/or SARs may be exercised by such Participant or his or her personal
\nrepresentative within three months after the date of such termination; or
\n(iv) if the Service of a Participant is terminated due to death or Disability,
\nthe vested portion of his or her then-outstanding Options and\/or SARs may be
\nexercised within eighteen months after the date of termination of Service.<\/p>\n (h) Director Fees. Each Non-Employee Director may elect to receive a Stock
\nGrant or Stock Unit under the Plan in lieu of payment of a portion of his or her
\nregular annual retainer based on the Fair Market Value of the Shares on the date
\nany regular annual retainer would otherwise be paid. For purposes of the Plan, a
\nNon-Employee Director153s regular annual retainer shall not include any additional
\nretainer paid in connection with service on any committee of the Board or paid
\nfor any other reason. Such an election<\/p>\n<\/p>\n -9-<\/p>\n<\/p>\n
\nmay be for any dollar or percentage amount equal to at least 25% of the
\nNon-Employee Director153s regular annual retainer (up to a limit of 100% of the
\nNon-Employee Director153s regular annual retainer). The election must be made
\nprior to the beginning of the annual board of directors cycle which shall be any
\ntwelve month continuous period designated by the Board. Any amount of the
\nregular annual retainer not elected to be received as a Stock Grant or Stock
\nUnit shall be payable in cash in accordance with the Company153s standard payment
\nprocedures. Shares granted under this Section 4(h) shall otherwise be subject to
\nthe terms of the Plan applicable to Non-Employee Directors or to Participants
\ngenerally (other than provisions specifically applying only to Employees).<\/p>\n SECTION 5. <\/strong>SHARES SUBJECT TO PLAN AND SHARE
\nLIMITS<\/u>. <\/strong><\/p>\n(a) Basic Limitations. The stock issuable under the Plan shall be authorized
\nbut unissued Shares. The aggregate number of Shares reserved for Awards under
\nthe Plan shall not exceed 559,000,000 Shares, subject to adjustment pursuant to
\nSection 11. Shares issued as Stock Grants or pursuant to Stock Units will count
\nagainst the Shares available for issuance under the Plan as 1.5 Shares for every
\n1 Share issued in connection with the Award.<\/p>\n (b) Additional Shares. If Awards are forfeited or are terminated for any
\nother reason before being exercised or settled, then the Shares underlying such
\nAwards, plus the number of additional Shares, if any, that counted against
\nShares available for issuance under the Plan in respect thereof at the time of
\nGrant, shall again become available for Awards under the Plan. If a Previous
\nPlan Award is forfeited or is terminated for any other reason before being
\nexercised or settled, then the Shares underlying such Previous Plan Award shall
\nagain become available for Awards under this Plan. SARs shall be counted in full
\nagainst the number of Shares available for issuance under the Plan, regardless
\nof the number of Shares issued upon settlement of the SARs.<\/p>\n (c) Dividend Equivalents. Any dividend equivalents distributed under the Plan
\nshall not be applied against the number of Shares available for Awards.<\/p>\n (d) Share Limits.<\/p>\n (i) Limits on Options<\/strong>. Subject to adjustment pursuant to
\nSection 11, no Key Employee shall receive Options to purchase Shares during any
\nFiscal Year covering in excess of 5,000,000 Shares and the aggregate maximum
\nnumber of Shares that may be issued in connection with ISOs shall be 559,000,000
\nShares.<\/p>\n(ii) Limits on SARs.<\/strong> Subject to adjustment pursuant to
\nSection 11, no Key Employee shall receive Awards of SARs during any Fiscal Year
\ncovering in excess of 5,000,000 Shares and the aggregate maximum number of
\nShares that may be issued in connection with SARs shall be 559,000,000 Shares.\n<\/p>\n<\/p>\n-10-<\/p>\n<\/p>\n
\n(iii) Limits on Stock Grants and Stock Units.<\/strong> Subject to
\nadjustment pursuant to Section 11, no Key Employee shall receive Stock Grants or
\nStock Units during any Fiscal Year covering, in the aggregate, in excess of
\n5,000,000 Shares.<\/p>\n(iv) Limits on Awards to Non-Employee Directors.<\/strong> Subject to
\nadjustment pursuant to Section 11, no Non-Employee Director shall receive Awards
\nduring any Fiscal Year covering, in the aggregate, in excess of 50,000 Shares;
\nprovided that any Shares received pursuant to an election under Section 4(h)
\nshall not count against such limit.<\/p>\nSECTION 6.<\/strong> TERMS AND CONDITIONS OF
\nOPTIONS<\/u>.<\/strong><\/p>\n(a) Stock Option Agreement. Each Grant of an Option under the Plan shall be
\nevidenced and governed exclusively by a Stock Option Agreement between the
\nOptionee and the Company. Such Option shall be subject to all applicable terms
\nand conditions of the Plan and may be subject to any other terms and conditions
\nthat are not inconsistent with the Plan and that the Committee deems appropriate
\nfor inclusion in a Stock Option Agreement (including without limitation any
\nperformance conditions). The provisions of the various Stock Option Agreements
\nentered into under the Plan need not be identical. The Stock Option Agreement
\nshall also specify whether the Option is an ISO or an NSO.<\/p>\n (b) Number of Shares. Each Stock Option Agreement shall specify the number of
\nShares that are subject to the Option and shall be subject to adjustment of such
\nnumber in accordance with Section 11.<\/p>\n (c) Exercise Price. An Option153s Exercise Price shall be established by the
\nCommittee and set forth in a Stock Option Agreement. The Exercise Price of an
\nOption shall not be less than 100% of the Fair Market Value (110% for ISO grants
\nto 10-Percent Shareholders) on the date of Grant.<\/p>\n (d) Exercisability and Term. Each Stock Option Agreement shall specify the
\ndate when all or any installment of the Option is to become exercisable. The
\nStock Option Agreement shall also specify the term of the Option; provided that
\nthe term of an Option shall in no event exceed ten years from the date of Grant.
\nUnless the applicable Stock Option Agreement provides otherwise, each Option
\nshall vest and become exercisable with respect to 20% of the Shares subject to
\nthe Option upon completion of one year of Service measured from the vesting
\ncommencement date, the balance of the Shares subject to the Option shall vest
\nand become exercisable in forty-eight equal installments upon completion of each
\nmonth of Service thereafter, and the term of the Option shall be ten years from
\nthe date of Grant. A Stock Option Agreement may provide for accelerated vesting
\nin the event of the Participant153s death, Disability, or other events.
\nNotwithstanding any other provision of the Plan, no Option can be exercised
\nafter the expiration date provided in the applicable Stock Option Agreement and
\nno Option may provide that, upon exercise of the Option, a new Option will
\nautomatically be granted.<\/p>\n<\/p>\n -11-<\/p>\n<\/p>\n
\n(e) Modifications or Assumption of Options. Within the limitations of the
\nPlan, the Committee may modify, extend or assume outstanding options or may
\naccept the cancellation of outstanding options (whether granted by the Company
\nor by another issuer) in return for the grant of new Options for the same or a
\ndifferent number of Shares, at the same or a different Exercise Price, and with
\nthe same or different vesting provisions. Notwithstanding the preceding sentence
\nor anything to the contrary herein, the Committee may not Re-Price outstanding
\nOptions unless there is approval by the Company shareholders and, unless a
\nmodification is necessary or desirable to comply with any applicable law,
\nregulation or rule, such modification of an Option shall not, without the
\nconsent of the Optionee, impair his or her rights or obligations under such
\nOption.<\/p>\n (f) Assignment or Transfer of Options. Except as otherwise provided in the
\napplicable Stock Option Agreement and then only to the extent permitted by
\napplicable law, no Option shall be transferable by the Optionee other than by
\nwill or by the laws of descent and distribution. Except as otherwise provided in
\nthe applicable Stock Option Agreement, an Option may be exercised during the
\nlifetime of the Optionee only by the Optionee or by the guardian or legal
\nrepresentative of the Optionee. No Option or interest therein may be assigned,
\npledged or hypothecated by the Optionee during his or her lifetime, whether by
\noperation of law or otherwise, or be made subject to execution, attachment or
\nsimilar process.<\/p>\n SECTION 7. <\/strong>PAYMENT FOR OPTION SHARES<\/u>.
\n<\/strong><\/p>\nThe entire Exercise Price of Shares issued upon exercise of Options shall be
\npayable in cash at the time when such Shares are purchased, except as follows
\nand if so provided for in an applicable Stock Option Agreement:<\/p>\n (i) Surrender of Stock. Payment for all or any part of the Exercise Price or
\nOptions may be made with Shares which have already been owned by the Optionee;
\nprovided that the Committee may, in its sole discretion, require that Shares
\ntendered for payment be previously held by the Optionee for a minimum duration.
\nSuch Shares shall be valued at their Fair Market Value.<\/p>\n (ii) Cashless Exercise. Payment for all or any part of the Exercise Price may
\nbe made through Cashless Exercise at the Committee153s sole discretion.<\/p>\n (iii) Other Forms of Payment. Payment for all or any part of the Exercise
\nPrice may be made in any other form that is consistent with applicable laws,
\nregulations and rules and approved by the Committee.<\/p>\n In the case of an ISO granted under the Plan, payment shall be made only
\npursuant to the express provisions of the applicable Stock Option Agreement. The
\nStock Option Agreement may specify that payment may be made in any form(s)
\ndescribed in this<\/p>\n<\/p>\n -12-<\/p>\n<\/p>\n
\nSection 7. In the case of an NSO granted under the Plan, the Committee may,
\nin its discretion at any time, accept payment in any form(s) described in this
\nSection 7.<\/p>\n SECTION 8. <\/strong>TERMS AND CONDITIONS OF STOCK APPRECIATION
\nRIGHTS<\/u>. <\/strong><\/p>\n(a) SAR Agreement. Each Grant of a SAR under the Plan shall be evidenced and
\ngoverned exclusively by a SAR Agreement between the Participant and the Company.
\nSuch SAR shall be subject to all applicable terms and conditions of the Plan and
\nmay be subject to any other terms and conditions that are not inconsistent with
\nthe Plan and that the Committee deems appropriate for inclusion in a SAR
\nAgreement (including without limitation any performance conditions). A SAR
\nAgreement may provide for a maximum limit on the amount of any payout
\nnotwithstanding the Fair Market Value on the date of exercise of the SAR. The
\nprovisions of the various SAR Agreements entered into under the Plan need not be
\nidentical. SARs may be granted in consideration of a reduction in the
\nParticipant153s compensation.<\/p>\n (b) Number of Shares. Each SAR Agreement shall specify the number of Shares
\nto which the SAR pertains and shall be subject to adjustment of such number in
\naccordance with Section 11.<\/p>\n (c) Exercise Price. Each SAR Agreement shall specify the Exercise Price which
\nshall be established by the Committee. The Exercise Price of a SAR shall not be
\nless than 100% of the Fair Market Value on the date of Grant.<\/p>\n (d) Exercisability and Term. Each SAR Agreement shall specify the date when
\nall or any installment of the SAR is to become exercisable. The SAR Agreement
\nshall also specify the term of the SAR which shall not exceed ten years from the
\ndate of Grant. Unless the applicable SAR Agreement provides otherwise, each SAR
\nshall vest and become exercisable with respect to 20% of the Shares subject to
\nthe SAR upon completion of one year of Service measured from the vesting
\ncommencement date, the balance of the Shares subject to the SAR shall vest and
\nbecome exercisable in forty-eight equal installments upon completion of each
\nmonth of Service thereafter, and the term of the SAR shall be ten years from the
\ndate of Grant. A SAR Agreement may provide for accelerated vesting in the event
\nof the Participant153s death, Disability, or other events. SARs may be awarded in
\ncombination with Options or Stock Grants, and such an Award shall provide that
\nthe SARs will not be exercisable unless the related Options or Stock Grants are
\nforfeited. A SAR may be included in an ISO only at the time of Grant but may be
\nincluded in an NSO at the time of Grant or at any subsequent time, but not later
\nthan six months before the expiration of such NSO. No SAR may provide that, upon
\nexercise of the SAR, a new SAR will automatically be granted.<\/p>\n (e) Exercise of SARs. If, on the date when a SAR expires, the Exercise Price
\nunder such SAR is less than the Fair Market Value on such date but any portion
\nof such SAR has not been exercised or surrendered, then such SAR shall
\nautomatically be deemed to be exercised as of such date with respect to such
\nportion. Upon exercise of a SAR, the<\/p>\n<\/p>\n -13-<\/p>\n<\/p>\n
\nParticipant (or any person having the right to exercise the SAR) shall
\nreceive from the Company (i) Shares, (ii) cash or (iii) any combination of
\nShares and cash, as the Committee shall determine at the time of Grant of the
\nSAR, in its sole discretion. The amount of cash and\/or the Fair Market Value of
\nShares received upon exercise of SARs shall, in the aggregate, be equal to the
\namount by which the Fair Market Value (on the date of exercise) of the Shares
\nsubject to the SARs exceeds the Exercise Price of those Shares.<\/p>\n (f) Modification or Assumption of SARs. Within the limitations of the Plan,
\nthe Committee may modify, extend or assume outstanding stock appreciation rights
\nor may accept the cancellation of outstanding stock appreciation rights
\n(including stock appreciation rights granted by another issuer) in return for
\nthe grant of new SARs for the same or a different number of Shares, at the same
\nor a different Exercise Price, and with the same or different vesting
\nprovisions. Notwithstanding the preceding sentence or anything to the contrary
\nherein, the Committee may not Re-Price outstanding SARs unless there is approval
\nby the Company shareholders and, unless a modification is necessary or desirable
\nto comply with any applicable law, regulation or rule, such modification of a
\nSAR shall not, <\/strong>without the consent of the Participant, impair
\nhis or her rights or obligations under such SAR.<\/p>\n(g) Assignment or Transfer of SARs. Except as otherwise provided in the
\napplicable SAR Agreement and then only to the extent permitted by applicable
\nlaw, no SAR shall be transferable by the Participant other than by will or by
\nthe laws of descent and distribution. Except as otherwise provided in the
\napplicable SAR Agreement, a SAR may be exercised during the lifetime of the
\nParticipant only by the Participant or by the guardian or legal representative
\nof the Participant. No SAR or interest therein may be assigned, pledged or
\nhypothecated by the Participant during his or her lifetime, whether by operation
\nof law or otherwise, or be made subject to execution, attachment or similar
\nprocess.<\/p>\n SECTION 9.<\/strong> TERMS AND CONDITIONS FOR STOCK
\nGRANTS<\/u>.<\/strong><\/p>\n(a) Amount and Form of Awards. Awards under this Section 9 may be granted in
\nthe form of a Stock Grant. Each Stock Grant Agreement shall specify the number
\nof Shares to which the Stock Grant pertains and shall be subject to adjustment
\nof such number in accordance with Section 11. A Stock Grant may also be awarded
\nin combination with NSOs, and such an Award may provide that the Stock Grant
\nwill be forfeited in the event that the related NSOs are exercised.<\/p>\n (b) Stock Grant Agreement. Each Stock Grant awarded under the Plan shall be
\nevidenced and governed exclusively by a Stock Grant Agreement between the
\nParticipant and the Company. Each Stock Grant shall be subject to all applicable
\nterms and conditions of the Plan and may be subject to any other terms and
\nconditions that are not inconsistent with the Plan and that the Committee deems
\nappropriate for inclusion in the applicable Stock Grant Agreement (including
\nwithout limitation any performance<\/p>\n<\/p>\n -14-<\/p>\n<\/p>\n
\nconditions). The provisions of the various Stock Grant Agreements entered
\ninto under the Plan need not be identical.<\/p>\n (c) Payment for Stock Grants. Stock Grants may be issued with or without cash
\nconsideration or any other form of legally permissible consideration approved by
\nthe Committee.<\/p>\n (d) Vesting Conditions. Each Stock Grant may or may not be subject to
\nvesting. Any such vesting provision may provide that Shares shall vest based on
\nService over time or shall vest, in full or in installments, upon satisfaction
\nof performance conditions specified in the Stock Grant Agreement which may
\ninclude Performance Goals pursuant to Section 4(e). Unless the applicable Stock
\nGrant Agreement provides otherwise, each Stock Grant shall vest with respect to
\n20% of the Shares subject to the Stock Grant upon completion of each year of
\nService on each of the first through fifth annual anniversaries of the vesting
\ncommencement date. A Stock Grant Agreement may provide for accelerated vesting
\nin the event of the Participant153s death, Disability, or other events.<\/p>\n (e) Assignment or Transfer of Stock Grants. Except as provided in the
\napplicable Stock Grant Agreement, and then only to the extent permitted by
\napplicable law, a Stock Grant awarded under the Plan shall not be anticipated,
\nassigned, attached, garnished, optioned, transferred or made subject to any
\ncreditor153s process, whether voluntarily, involuntarily or by operation of law.
\nAny act in violation of this Section 9(e) shall be void. However, this
\nSection 9(e) shall not preclude a Participant from designating a beneficiary who
\nwill receive any vested outstanding Stock Grant Awards in the event of the
\nParticipant153s death, nor shall it preclude a transfer of vested Stock Grant
\nAwards by will or by the laws of descent and distribution.<\/p>\n (f) Voting and Dividend Rights. The holder of a Stock Grant awarded under the
\nPlan shall have the same voting, dividend and other rights as the Company153s
\nother shareholders. A Stock Grant Agreement, however, may require that the
\nholder of such Stock Grant invest any cash dividends received in additional
\nShares subject to the Stock Grant. Such additional Shares subject to the Stock
\nGrant shall be subject to the same conditions and restrictions as the Stock
\nGrant with respect to which the dividends were paid. Such additional Shares
\nsubject to the Stock Grant shall not reduce the number of Shares available for
\nissuance under Section 5.<\/p>\n (g) Modification or Assumption of Stock Grants. Within the limitations of the
\nPlan, the Committee may modify or assume outstanding stock grants or may accept
\nthe cancellation of outstanding stock grants (including stock granted by another
\nissuer) in return for the grant of new Stock Grants for the same or a different
\nnumber of Shares and with the same or different vesting provisions.
\nNotwithstanding the preceding sentence or anything to the contrary herein, the
\nCommittee may not modify an outstanding Stock Grant such that the modification
\nshall, without the consent of the Participant, impair his or her rights or
\nobligations under such Stock Grant, unless such modification is necessary or
\ndesirable to comply with any applicable law, regulation or rule.<\/p>\n<\/p>\n -15-<\/p>\n<\/p>\n
\nSECTION 10. <\/strong>TERMS AND CONDITIONS OF STOCK
\nUNITS<\/u>.<\/strong><\/p>\n(a) Stock Unit Agreement. Each grant of Stock Units under the Plan shall be
\nevidenced and governed exclusively by a Stock Unit Agreement between the
\nParticipant and the Company. Such Stock Units shall be subject to all applicable
\nterms and conditions of the Plan and may be subject to any other terms and
\nconditions that are not inconsistent with the Plan and that the Committee deems
\nappropriate for inclusion in the applicable Stock Unit Agreement (including
\nwithout limitation any performance conditions). The provisions of the various
\nStock Unit Agreements entered into under the Plan need not be identical. Stock
\nUnits may be granted in consideration of a reduction in the Participant153s other
\ncompensation.<\/p>\n (b) Number of Shares. Each Stock Unit Agreement shall specify the number of
\nShares to which the Stock Unit Grant pertains and shall be subject to adjustment
\nof such number in accordance with Section 11.<\/p>\n (c) Payment for Stock Units. Stock Units shall be issued without
\nconsideration.<\/p>\n (d) Vesting Conditions. Each Award of Stock Units may or may not be subject
\nto vesting. Any such vesting provision may provide that Shares shall vest based
\non Service over time or shall vest, in full or in installments, upon
\nsatisfaction of performance conditions specified in the Stock Unit Agreement
\nwhich may include Performance Goals pursuant to Section 4(e). Unless the
\napplicable Stock Unit Agreement provides otherwise, each Stock Unit shall vest
\nwith respect to 20% of the Shares subject to the Stock Unit upon completion of
\neach year of Service on each of the first through fifth annual anniversaries of
\nthe vesting commencement date. A Stock Unit Agreement may provide for
\naccelerated vesting in the event of the Participant153s death, Disability, or
\nother events.<\/p>\n (e) Voting and Dividend Rights. The holders of Stock Units shall have no
\nvoting rights. Prior to settlement or forfeiture, any Stock Unit awarded under
\nthe Plan may, at the Committee153s discretion, carry with it a right to dividend
\nequivalents. Such right entitles the holder to be credited with an amount equal
\nto all cash dividends paid on one Share while the Stock Unit is outstanding.
\nDividend equivalents may be converted into additional Stock Units. Settlement of
\ndividend equivalents may be made in the form of cash, in the form of Shares, or
\nin a combination of both. Prior to distribution, any dividend equivalents which
\nare not paid shall be subject to the same conditions and restrictions as the
\nStock Units to which they attach.<\/p>\n (f) Form and Time of Settlement of Stock Units. Settlement of vested Stock
\nUnits may be made in the form of (a) cash, (b) Shares or (c) any combination of
\nboth, as determined by the Committee at the time of the grant of the Stock
\nUnits, in its sole discretion. Methods of converting Stock Units into cash may
\ninclude (without limitation) a method based on the average Fair Market Value of
\nShares over a series of trading days. Vested Stock Units may be settled in a
\nlump sum or in installments. The distribution may occur or commence when the
\nvesting conditions applicable to the Stock Units have been<\/p>\n<\/p>\n -16-<\/p>\n<\/p>\n
\nsatisfied or have lapsed, or it may be deferred, in accordance with
\napplicable law, to any later date. The amount of a deferred distribution may be
\nincreased by an interest factor or by dividend equivalents. Until an Award of
\nStock Units is settled, the number of such Stock Units shall be subject to
\nadjustment pursuant to Section 11.<\/p>\n (g) Creditors153 Rights. A holder of Stock Units shall have no rights other
\nthan those of a general creditor of the Company. Stock Units represent an
\nunfunded and unsecured obligation of the Company, subject to the terms and
\nconditions of the applicable Stock Unit Agreement.<\/p>\n (h) Modification or Assumption of Stock Units. Within the limitations of the
\nPlan, the Committee may modify or assume outstanding stock units or may accept
\nthe cancellation of outstanding stock units (including stock units granted by
\nanother issuer) in return for the grant of new Stock Units for the same or a
\ndifferent number of Shares and with the same or different vesting provisions.
\nNotwithstanding the preceding sentence or anything to the contrary herein, the
\nCommittee may not modify an outstanding Stock Unit such that the modification
\nshall, without the consent of the Participant, impair his or her rights or
\nobligations under such Stock Unit, unless such modification is necessary or
\ndesirable to comply with any applicable law, regulation or rule.<\/p>\n (i) Assignment or Transfer of Stock Units. Except as provided in the
\napplicable Stock Unit Agreement, and then only to the extent permitted by
\napplicable law, Stock Units shall not be anticipated, assigned, attached,
\ngarnished, optioned, transferred or made subject to any creditor153s process,
\nwhether voluntarily, involuntarily or by operation of law. Any act in violation
\nof this Section 10(i) shall be void. However, this Section 10(i) shall not
\npreclude a Participant from designating a beneficiary who will receive any
\noutstanding vested Stock Units in the event of the Participant153s death, nor
\nshall it preclude a transfer of vested Stock Units by will or by the laws of
\ndescent and distribution.<\/p>\n SECTION 11.<\/strong> PROTECTION AGAINST
\nDILUTION<\/u>.<\/strong><\/p>\n(a) Adjustments. In the event of a subdivision of the outstanding Shares, a
\ndeclaration of a dividend payable in Shares, a declaration of a dividend payable
\nin a form other than Shares in an amount that has a material effect on the price
\nof Shares, a combination or consolidation of the outstanding Shares (by
\nreclassification or otherwise) into a lesser number of Shares, a
\nrecapitalization, a spin-off or a similar occurrence, the Committee shall make
\nappropriate adjustments to the following:<\/p>\n (i) the number of Shares and the kind of shares or securities available for
\nfuture Awards under Section 5;<\/p>\n (ii) the limits on Awards specified in Section 5;<\/p>\n<\/p>\n -17-<\/p>\n<\/p>\n
\n(iii) the number of Shares and the kind of shares or securities covered by
\neach outstanding Award; or<\/p>\n (iv) the Exercise Price under each outstanding SAR or Option.<\/p>\n (b) Participant Rights. Except as provided in this Section 11, a Participant
\nshall have no rights by reason of any issue by the Company of stock of any class
\nor securities convertible into stock of any class, any subdivision or
\nconsolidation of shares of stock of any class, the payment of any stock dividend
\nor any other increase or decrease in the number of shares of stock of any class.
\nIf by reason of an adjustment pursuant to this Section 11 a Participant153s Award
\ncovers additional or different shares of stock or securities, then such
\nadditional or different shares and the Award in respect thereof shall be subject
\nto all of the terms, conditions and restrictions which were applicable to the
\nAward and the Shares subject to the Award prior to such adjustment.<\/p>\n (c) Fractional Shares. Any adjustment of Shares pursuant to this Section 11
\nshall be rounded down to the nearest whole number of Shares. Under no
\ncircumstances shall the Company be required to authorize or issue fractional
\nshares and no consideration shall be provided as a result of any fractional
\nshares not being issued or authorized.<\/p>\n SECTION 12.<\/strong> EFFECT OF A CORPORATE
\nTRANSACTION<\/u>.<\/strong><\/p>\n(a) Corporate Transaction. In the event that the Company is a party to a
\nCorporate Transaction, outstanding Awards shall be subject to the applicable
\nagreement of merger, reorganization, or sale of assets. Such agreement may
\nprovide, without limitation, for the assumption or substitution of outstanding
\nOptions, SARs, or Stock Units by the surviving corporation or its parent, for
\nthe assumption of outstanding Stock Grant Agreements by the surviving
\ncorporation or its parent, for the replacement of outstanding Options, SARs, and
\nStock Units with a cash incentive program of the surviving corporation which
\npreserves the spread existing on the unvested portions of such outstanding
\nAwards at the time of the transaction and provides for subsequent payout in
\naccordance with the same vesting provisions applicable to those Awards, for
\naccelerated vesting of outstanding Awards, or for the cancellation of
\noutstanding Options, SARs, and Stock Units, with or without consideration, in
\nall cases without the consent of the Participant.<\/p>\n (b) Acceleration. The Committee may determine, at the time of grant of an
\nAward or thereafter, that such Award shall become fully vested as to all Shares
\nsubject to such Award in the event that a Corporate Transaction or a Change in
\nControl occurs. Unless otherwise provided in the applicable Award agreement, in
\nthe event that a Corporate Transaction occurs and any outstanding Options, SARs
\nor Stock Units are not assumed, substituted, or replaced with a cash incentive
\nprogram pursuant to Section 12(a) or any outstanding Stock Grant Agreements are
\nnot assumed pursuant to Section 12(a), then such Awards shall fully vest and be
\nfully exercisable immediately prior to such Corporate Transaction. Immediately
\nfollowing the consummation of a Corporate Transaction, all<\/p>\n<\/p>\n -18-<\/p>\n<\/p>\n
\noutstanding Options, SARs and Stock Units shall terminate and cease to be
\noutstanding, except to the extent that they are assumed by the surviving
\ncorporation or its parent.<\/p>\n (c) Dissolution. To the extent not previously exercised or settled, Options,
\nSARs and Stock Units shall terminate immediately prior to the dissolution or
\nliquidation of the Company.<\/p>\n SECTION 13. <\/strong>LIMITATIONS ON RIGHTS<\/u>. <\/strong>\n<\/p>\n(a) No Entitlements. A Participant153s rights, if any, in respect of or in
\nconnection with any Award is derived solely from the discretionary decision of
\nthe Company to permit the individual to participate in the Plan and to benefit
\nfrom a discretionary Award. By accepting an Award under the Plan, a Participant
\nexpressly acknowledges that there is no obligation on the part of the Company to
\ncontinue the Plan and\/or grant any additional Awards. Any Award granted
\nhereunder is not intended to be compensation of a continuing or recurring
\nnature, or part of a Participant153s normal or expected compensation, and in no
\nway represents any portion of a Participant153s salary, compensation, or other
\nremuneration for purposes of pension benefits, severance, redundancy,
\nresignation or any other purpose.<\/p>\n Neither the Plan nor any Award granted under the Plan shall be deemed to give
\nany individual a right to remain an employee, consultant or director of the
\nCompany, a Parent, a Subsidiary or an Affiliate. The Company and its Parents and
\nSubsidiaries and Affiliates reserve the right to terminate the Service of any
\nperson at any time, and for any reason, subject to applicable laws, the
\nCompany153s Articles of Incorporation and Bylaws and a written employment
\nagreement (if any), and such terminated person shall be deemed irrevocably to
\nhave waived any claim to damages or specific performance for breach of contract
\nor dismissal, compensation for loss of office, tort or otherwise with respect to
\nthe Plan or any outstanding Award that is forfeited and\/or is terminated by its
\nterms or to any future Award.<\/p>\n (b) Shareholders153 Rights. A Participant shall have no dividend rights, voting
\nrights or other rights as a shareholder with respect to any Shares covered by
\nhis or her Award prior to the issuance of such Shares (as evidenced by an
\nappropriate entry on the books of the Company or a duly authorized transfer
\nagent of the Company). No adjustment shall be made for cash dividends or other
\nrights for which the record date is prior to the date when such Shares are
\nissued, except as expressly provided in Section 11.<\/p>\n (c) Regulatory Requirements. Any other provision of the Plan notwithstanding,
\nthe obligation of the Company to issue Shares or other securities under the Plan
\nshall be subject to all applicable laws, rules and regulations and such approval
\nby any regulatory body as may be required. The Company reserves the right to
\nrestrict, in whole or in part, the delivery of Shares or other securities
\npursuant to any Award prior to the satisfaction of all legal requirements
\nrelating to the issuance of such Shares or other securities, to<\/p>\n<\/p>\n -19-<\/p>\n<\/p>\n
\ntheir registration, qualification or listing or to an exemption from
\nregistration, qualification or listing.<\/p>\n SECTION 14. <\/strong>WITHHOLDING TAXES<\/u>. <\/strong><\/p>\n (a) General. A Participant shall make arrangements satisfactory to the
\nCompany for the satisfaction of any withholding tax obligations that arise in
\nconnection with his or her Award. The Company shall not be required to issue any
\nShares or make any cash payment under the Plan until such obligations are
\nsatisfied.<\/p>\n (b) Share Withholding. If a public market for the Company153s Shares exists,
\nthe Committee may permit a Participant to satisfy all or part of his or her
\nwithholding or income tax obligations by having the Company withhold all or a
\nportion of any Shares that otherwise would be issued to him or her or by
\nsurrendering or attesting to all or a portion of any Shares that he or she
\npreviously acquired. Such Shares shall be valued based on the value of the
\nactual trade or, if there is none, the Fair Market Value as of the previous day.
\nAny payment of taxes by assigning Shares to the Company may be subject to
\nrestrictions, including, but not limited to, any restrictions required by rules
\nof the SEC. The Committee may, in its discretion, also permit a Participant to
\nsatisfy withholding or income tax obligations related to an Award through
\nCashless Exercise or through a sale of Shares underlying the Award.<\/p>\n SECTION 15. <\/strong>DURATION AND AMENDMENTS<\/u>.
\n<\/strong><\/p>\n(a) Term of the Plan. The Plan shall become effective upon its approval by
\nCompany shareholders. The Plan shall terminate at the Company153s 2012 Annual
\nMeeting of Shareholders and may be terminated on any earlier date pursuant to
\nthis Section 15.<\/p>\n (b) Right to Amend or Terminate the Plan. The Board may amend or terminate
\nthe Plan at any time and for any reason. The termination of the Plan, or any
\namendment thereof, shall not impair the rights or obligations of any Participant
\nunder any Award previously granted under the Plan without the Participant153s
\nconsent, unless such modification is necessary or desirable to comply with any
\napplicable law, regulation or rule. No Awards shall be granted under the Plan
\nafter the Plan153s termination. An amendment of the Plan shall be subject to the
\napproval of the Company153s shareholders only to the extent such approval is
\notherwise required by applicable laws, regulations or rules.<\/p>\n<\/p>\n -20-<\/p>\n<\/p>\n
\nSECTION 16. <\/strong>EXECUTION<\/u>. <\/strong><\/p>\nTo record the adoption of the Plan by the Board, the Company has caused its
\nduly authorized officer to execute this Plan on behalf of the Company.<\/p>\n<\/p>\n \n\n\n| <\/td>\n | <\/td>\n | <\/td>\n<\/tr>\n | \nCISCO SYSTEMS, INC.<\/strong><\/td>\n<\/tr>\n\n| <\/td>\n | <\/td>\n<\/tr>\n | \n| \n By:<\/p>\n<\/td>\n | <\/td>\n | <\/td>\n<\/tr>\n | \n| <\/td>\n | <\/td>\n | \n Mark Chandler<\/p>\n<\/td>\n<\/tr>\n | \n| \n Title:<\/p>\n<\/td>\n | <\/td>\n | \n Senior Vice President, Legal Services, General Counsel and Secretary<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n -21-<\/p>\n<\/p>\n
\n(For Grants Prior to September 2008) <\/strong><\/p>\nCISCO SYSTEMS, INC. <\/strong><\/p>\nNOTICE OF GRANT OF STOCK OPTION <\/u><\/strong><\/p>\nNotice is hereby given of the following option grant (the “Option”) made to
\npurchase shares of Cisco Systems, Inc. (the “Company”) common stock:<\/p>\n Optionee: <\/p>\n <\/u><\/p>\n Grant Date: <\/p>\n <\/u><\/p>\n \n\n\n| <\/td>\n | <\/td>\n | <\/td>\n | <\/td>\n | <\/td>\n | <\/td>\n | <\/td>\n<\/tr>\n | \n| \n Type of Option:<\/p>\n<\/td>\n | <\/td>\n | <\/u><\/p>\n Incentive Stock Option<\/p>\n<\/td>\n | <\/td>\n | <\/td>\n | <\/td>\n | <\/td>\n<\/tr>\n | \n| <\/td>\n | <\/td>\n | <\/u><\/p>\n Nonstatutory Stock Option<\/p>\n<\/td>\n | <\/td>\n | <\/td>\n | <\/td>\n | <\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n Grant Number: <\/p>\n <\/u><\/p>\n Number of Option Shares: <\/p>\n <\/u>
\nshares<\/p>\n Exercise Price: $ <\/u> per share<\/p>\n Vesting Commencement Date: <\/p>\n <\/u><\/p>\n Expiration Date: <\/p>\n <\/u><\/p>\n Exercise Schedule <\/u><\/strong><\/p>\nThe Option shall vest and become exercisable with respect to (i) twenty
\npercent (20%) of the Option Shares upon Optionee153s completion of one (1) year of
\nService measured from the Vesting Commencement Date and (ii) the balance of the
\nOption Shares in a series of forty-eight (48) successive equal monthly
\ninstallments upon Optionee153s completion of each additional month of Service over
\nthe forty-eight (48)-month period measured from the first annual anniversary of
\nthe Vesting Commencement Date. In no event shall the Option vest and become
\nexercisable for any additional Option Shares after Optionee153s cessation of
\nService.<\/p>\n Should Optionee request a reduction to his or her work commitment to less
\nthan thirty (30) hours per week, then the Committee shall have the right, to
\nextend the period over which the Option shall thereafter vest and become
\nexercisable for the Option Shares during the remainder of the Option term. The
\ndecision whether or not to approve Optionee153s request for any reduced work
\ncommitment shall be at the sole discretion of the Company. In no event shall any
\nextension of the Exercise Schedule for the Option Shares result in the extension
\nof the Expiration Date of the Option.<\/p>\n Optionee understands and agrees that the Option is offered subject to and in
\naccordance with the terms of the Cisco Systems, Inc. 2005 Stock Incentive Plan
\n(the “Plan”). Optionee further agrees to be bound by the terms of the Plan and
\nthe terms of the Option as set forth in the Stock Option Agreement attached
\nhereto.<\/p>\n No Employment or Service Contract<\/u><\/strong>. Nothing in this
\nNotice or in the attached Stock Option Agreement or in the Plan shall confer
\nupon Optionee any right to continue in Service for any period of specific
\nduration or interfere with or otherwise restrict in any way the rights of the
\nCompany (or any Parent or Subsidiary employing or retaining Optionee) or of
\nOptionee, which rights are hereby expressly reserved by each, to terminate
\nOptionee153s Service at any time for any reason, with or without cause.<\/p>\nDefinitions<\/u><\/strong>. All capitalized terms in this Notice
\nshall have the meaning assigned to them in this Notice, the attached Stock
\nOption Agreement or the Plan.<\/p>\n<\/p>\n
\nSTOCK OPTION AGREEMENT <\/u><\/strong><\/p>\nRecitals <\/u><\/strong><\/p>\nA. The Board has adopted the Plan for the purpose of retaining the services
\nof selected Employees, non-employee members of the Board or of the board of
\ndirectors of any Parent or Subsidiary and Consultants and other independent
\nadvisors who provide services to the Company (or any Parent or Subsidiary).<\/p>\n B. Optionee is to render valuable services to the Company (or a Parent or
\nSubsidiary), and this Agreement is executed pursuant to, and is intended to
\ncarry out the purposes of, the Plan in connection with the Company153s grant of an
\noption to Optionee.<\/p>\n C. All capitalized terms in this Agreement shall have the meaning assigned to
\nthem in this Agreement, the attached Notice of Grant of Stock Option (the ”
\nNotice”), or the Plan.<\/p>\n NOW, THEREFORE<\/strong>, it is hereby agreed as follows:<\/p>\n1.<\/strong> Grant of Option<\/u><\/strong>. The Company
\nhereby grants to Optionee, as of the Grant Date, an option to purchase up to the
\nnumber of Option Shares specified in the Notice. The Option Shares shall be
\npurchasable from time to time during the Option term specified in Paragraph 2 at
\nthe Exercise Price specified in the Notice.<\/p>\n2.<\/strong> Option Term<\/u><\/strong>. This Option shall
\nhave a maximum term of nine (9) years measured from the Grant Date and shall
\naccordingly expire at the close of business on the Expiration Date, unless
\nsooner terminated in accordance with Paragraph 4, 5 or 6.<\/p>\n3.<\/strong> Non-Transferability<\/u><\/strong>. This Option
\nshall not be anticipated, assigned, attached, garnished, optioned, transferred
\nor made subject to any creditor153s process, whether voluntarily or involuntarily
\nor by operation of law. Notwithstanding the foregoing, should the Optionee die
\nwhile holding this Option, then this Option shall be transferred in accordance
\nwith Optionee153s will or the laws of descent and distribution.<\/p>\n4.<\/strong> Dates of Exercise<\/u><\/strong>. This Option
\nshall vest and become exercisable for the Option Shares in one or more
\ninstallments as specified in the Notice. As the Option becomes exercisable for
\nsuch installments, those installments shall accumulate and the Option shall
\nremain exercisable for the accumulated installments until the Expiration Date or
\nsooner termination of the Option term under Paragraph 5 or 6. As an
\nadministrative matter, the exercisable portion of this Option may only be
\nexercised until the close of the Nasdaq Global Select Market on the Expiration
\nDate or the earlier termination date under Paragraph 5 or 6 or, if such date is
\nnot a trading day on the Nasdaq Global Select Market, the last trading day
\nbefore such date. Any later attempt to exercise this Option will not be honored.
\nFor example, if Optionee ceases to remain in Service as provided in Paragraph
\n5(i) and the date three (3) months from the date of cessation is Monday, July 4
\n(a holiday on which the Nasdaq Global Select Market is closed), Optionee must
\nexercise the exercisable portion of this Option by 4 pm Eastern Daylight Time on
\nFriday, July 1.<\/p>\n<\/p>\n
\n5.<\/strong> Cessation of Service<\/u><\/strong>. The Option
\nterm specified in Paragraph 2 shall terminate (and this Option shall cease to be
\noutstanding) prior to the Expiration Date should any of the following provisions
\nbecome applicable:<\/p>\n(i) Should Optionee cease to remain in Service for any reason (other than
\ndeath, Disability or Cause) while this Option is outstanding, then Optionee
\nshall have a period of three (3) months (commencing with the date of such
\ncessation of Service) during which to exercise this Option, but in no event
\nshall this Option be exercisable at any time after the Expiration Date.<\/p>\n (ii) If Optionee dies while this Option is outstanding, then the personal
\nrepresentative of Optionee153s estate or the person or persons to whom the Option
\nis transferred pursuant to Optionee153s will or in accordance with the laws of
\ndescent and distribution shall have the right to exercise this Option. Such
\nright shall lapse, and this Option shall cease to be outstanding, upon the
\nearlier of (A) the expiration of the eighteen (18)- month period measured from
\nthe date of Optionee153s death or (B) the Expiration Date.<\/p>\n (iii) Should Optionee cease Service by reason of Disability while this Option
\nis outstanding, then Optionee shall have a period of eighteen (18) months
\n(commencing with the date of such cessation of Service) during which to exercise
\nthis Option, but in no event shall this Option be exercisable at any time after
\nthe Expiration Date.<\/p>\n (iv) Optionee153s date of cessation of Service shall mean the date upon which
\nOptionee ceases active performance of services for the Company following the
\nprovision of such notification of termination or resignation from Service and
\nshall be determined solely by this Agreement and without reference to any other
\nagreement, written or oral, including Optionee153s contract of employment, and
\nshall not otherwise include any period of notice of termination of employment,
\nwhether expressed or implied.<\/p>\n (v) During the limited period of post-Service exercisability, this Option may
\nnot be exercised in the aggregate for more than the number of vested Option
\nShares for which the Option is exercisable at the time of Optionee153s cessation
\nof Service. Upon the expiration of such limited exercise period or (if earlier)
\nupon the Expiration Date, this Option shall terminate and cease to be
\noutstanding for any vested Option Shares for which the Option has not been
\nexercised. However, this Option shall, immediately upon Optionee153s cessation of
\nService for any reason, terminate and cease to be outstanding with respect to
\nany Option Shares in which Optionee is not otherwise at that time vested or for
\nwhich this Option is not otherwise at that time exercisable.<\/p>\n (vi) Should Optionee153s Service be terminated for Cause or should Optionee
\notherwise engage in activities constituting Cause while this Option is
\noutstanding, then this Option shall terminate immediately and cease to remain
\noutstanding. In the event Optionee153s Service with the Company is suspended
\npending an investigation of whether Optionee153s Service will be terminated for
\nCause, all Optionee153s rights under the Option, including the right to exercise
\nthe Option, shall be suspended during the investigation period.<\/p>\n<\/p>\n 2<\/p>\n<\/p>\n
\n6.<\/strong> Special Acceleration of Option<\/strong><\/u>\n<\/p>\n(a) This Option, to the extent outstanding at the time of a Corporate
\nTransaction but not otherwise fully vested and exercisable, shall automatically
\naccelerate so that this Option shall, immediately prior to the effective date of
\nthe Corporate Transaction, become vested and exercisable for all of the Option
\nShares at the time subject to this Option and may be exercised for any or all of
\nthose Option Shares as fully-vested Shares. No such acceleration of this Option,
\nhowever, shall occur if and to the extent: (i) this Option is, in connection
\nwith the Corporate Transaction, either assumed by the successor corporation (or
\nparent thereof) or replaced with a comparable option to purchase shares of the
\ncapital stock of the successor corporation (or parent thereof) or (ii) this
\nOption is replaced with a cash incentive program of the successor corporation
\nwhich preserves the spread existing on the unvested Option Shares at the time of
\nthe Corporate Transaction (the excess of the Fair Market Value of those Option
\nShares over the aggregate Exercise Price payable for such Shares) and provides
\nfor subsequent pay-out in accordance with the same Exercise Schedule set forth
\nin the Notice. The determination of option comparability under clause (i) shall
\nbe made by the Committee, and such determination shall be final, binding and
\nconclusive.<\/p>\n (b) Immediately following the effective date of the Corporate Transaction,
\nthis Option shall terminate and cease to be outstanding, except to the extent
\nassumed by the successor corporation (or parent thereof) in connection with the
\nCorporate Transaction.<\/p>\n (c) If this Option is assumed in connection with a Corporate Transaction,
\nthen the Committee shall appropriately adjust the number of shares and the kind
\nof shares or securities covered by the Option and the Exercise Price immediately
\nafter such Corporate Transaction, provided the aggregate Exercise Price shall
\nremain the same.<\/p>\n (d) This Option, to the extent outstanding at the time of a Change in Control
\nbut not otherwise fully vested and exercisable, shall automatically accelerate
\nso that this Option shall, immediately prior to the effective date of the Change
\nin Control, become vested and exercisable for all of the Option Shares at the
\ntime subject to this Option and may be exercised for any or all of those Option
\nShares as fully-vested Shares. This Option shall remain so exercisable until the
\nExpiration Date or sooner termination of the Option term.<\/p>\n (e) This Agreement shall not in any way affect the right of the Company to
\nadjust, reclassify, reorganize or otherwise change its capital or business
\nstructure or to merge, consolidate, dissolve, liquidate or sell or transfer all
\nor any part of its business or assets.<\/p>\n<\/p>\n 3<\/p>\n<\/p>\n
\n7.<\/strong> Adjustment in Option Shares<\/u><\/strong>. In
\nthe event of a subdivision of the outstanding Shares, a declaration of a
\ndividend payable in Shares, a declaration of a dividend payable in a form other
\nthan Shares in an amount that has a material effect on the price of Shares, a
\ncombination or consolidation of the outstanding Shares (by reclassification or
\notherwise) into a lesser number of Shares, a recapitalization, a spin-off or a
\nsimilar occurrence, appropriate adjustments shall be made to (i) the total
\nnumber and\/or kind of shares or securities subject to this Option and (ii) the
\nExercise Price in order to reflect such change and thereby preclude a dilution
\nor enlargement of benefits hereunder.<\/p>\n8.<\/strong> Shareholder Rights<\/u><\/strong>. The holder of
\nthis Option shall not have any shareholder rights with respect to the Option
\nShares until such person shall have exercised the Option, paid the Exercise
\nPrice and become a holder of record of the purchased Shares.<\/p>\n9.<\/strong> Manner of Exercising Option<\/u><\/strong>.<\/p>\n(a) In order to exercise this Option with respect to all or any part of the
\nOption Shares for which this Option is at the time exercisable, Optionee (or any
\nother person or persons exercising the Option) must take the following actions:\n<\/p>\n (i) Pay the aggregate Exercise Price for the purchased Shares in one or more
\nof the following forms:<\/p>\n (A) cash or check which, in the Company153s sole discretion, shall be made
\npayable to a Company-designated brokerage firm or the Company;<\/p>\n (B) as permitted by applicable law, through a special sale and remittance
\nprocedure pursuant to which Optionee (or any other person or persons exercising
\nthe Option) shall concurrently provide irrevocable written instructions (I) to a
\nCompany-designated brokerage firm (or in the case of an executive officer or
\nBoard member of the Company, an Optionee-designated brokerage firm) to effect
\nthe immediate sale of the purchased Shares and remit to the Company, out of the
\nsale proceeds available on the settlement date, sufficient funds to cover the
\naggregate Exercise Price payable for the purchased Shares plus, if applicable,
\nthe amount necessary to satisfy the Company153s withholding obligations at the
\nminimum statutory withholding rates and (II) to the Company to deliver the
\ncertificates for the purchased Shares directly to such brokerage firm in order
\nto complete the sale transaction; and<\/p>\n (C) a promissory note payable to the Company, but only to the extent
\nauthorized by the Committee in accordance with Paragraph 13.<\/p>\n (ii) Furnish to the Company appropriate documentation that the person or
\npersons exercising the Option (if other than Optionee) have the right to
\nexercise this Option.<\/p>\n (iii) Make appropriate arrangements with the Company (or Parent or Subsidiary
\nemploying or retaining Optionee) for the satisfaction of all tax withholding
\nrequirements applicable to the Option exercise.<\/p>\n<\/p>\n 4<\/p>\n<\/p>\n
\n(b) As soon as practical after the exercise date, the Company shall issue to
\nor on behalf of Optionee (or any other person or persons exercising this Option)
\nthe purchased Option Shares (as evidenced by an appropriate entry on the books
\nof the Company or a duly authorized transfer agent of the Company), subject to
\nthe appropriate legends and\/or stop transfer instructions.<\/p>\n (c) In no event may this Option be exercised for any fractional Shares.<\/p>\n (d) Notwithstanding any other provisions of the Plan, this Agreement or any
\nother agreement to the contrary, if at the time this Option is exercised,
\nOptionee is indebted to the Company (or any Parent or Subsidiary) for any
\nreason, the following actions shall be taken, as deemed appropriate by the
\nCommittee:<\/p>\n (i) any Shares to be issued upon such exercise shall automatically be pledged
\nagainst Optionee153s outstanding indebtedness; and<\/p>\n (ii) if this Option is exercised in accordance with subparagraph 9(a)(i)(B)
\nabove, the after tax proceeds of the sale of Optionee153s Shares shall
\nautomatically be applied to the outstanding balance of Optionee153s indebtedness.\n<\/p>\n 10.<\/strong> Compliance with Laws and
\nRegulations<\/u><\/strong>.<\/p>\n(a) The exercise of this Option and the issuance of the Option Shares upon
\nsuch exercise shall be subject to compliance by the Company and Optionee with
\nall applicable laws, regulations and rules relating thereto, including all
\napplicable regulations of any stock exchange (or the Nasdaq Global Select
\nMarket, if applicable) on which the Shares may be listed for trading at the time
\nof such exercise and issuance.<\/p>\n (b) The inability of the Company to obtain approval from any regulatory body
\nhaving authority deemed by the Company to be necessary to the lawful issuance
\nand sale of any Shares pursuant to this Option shall relieve the Company of any
\nliability with respect to the non-issuance or sale of the Shares as to which
\nsuch approval shall not have been obtained. The Company, however, shall use its
\nbest efforts to obtain all such approvals.<\/p>\n 11.<\/strong> Successors and Assigns<\/u><\/strong>. Except
\nto the extent otherwise provided in Paragraphs 3 and 6, the provisions of this
\nAgreement shall inure to the benefit of, and be binding upon, the Company and
\nits successors and assigns and Optionee, Optionee153s assigns and the legal
\nrepresentatives, heirs and legatees of Optionee153s estate.<\/p>\n12.<\/strong> Notices<\/u><\/strong>. Any notice required or
\npermitted under the terms of this Agreement shall be in writing and shall be
\ndeemed sufficient when delivered personally or sent by confirmed email,
\ntelegram, or fax or forty-eight (48) hours after being deposited in the U.S.
\nmail, as certified or registered mail, with postage prepaid, and addressed to
\nthe Company at the Company153s principal corporate offices or to the Optionee at
\nthe address maintained for the Optionee in the Company153s records or, in either
\ncase, as subsequently modified by written notice to the other party.<\/p>\n<\/p>\n5<\/p>\n<\/p>\n
\n13.<\/strong> Financing<\/u><\/strong>. The Committee may, in
\nits absolute discretion and without any obligation to do so, permit Optionee to
\npay the Exercise Price for the purchased Option Shares by delivering a
\nfull-recourse promissory note payable to the Company. The terms of any such
\npromissory note (including the interest rate, the requirements for collateral
\nand the terms of repayment) shall be established by the Committee in its sole
\ndiscretion.<\/p>\n14.<\/strong> Construction<\/u><\/strong>. The Notice, this
\nAgreement, and the Option evidenced hereby (a) are made and granted pursuant to
\nthe Plan and are in all respects limited by and subject to the terms of the
\nPlan, and (b) constitute the entire agreement between Optionee and the Company
\non the subject matter hereof and supercede all proposals, written or oral, and
\nall other communications between the parties related to the subject matter. All
\ndecisions of the Committee with respect to any question or issue arising under
\nthe Notice, this Agreement or the Plan shall be conclusive and binding on all
\npersons having an interest in this Option.<\/p>\n15.<\/strong> Governing Law<\/u><\/strong>. The
\ninterpretation, performance and enforcement of this Agreement shall be governed
\nby the laws of the State of California without resort to the conflict of laws
\nprinciples thereof.<\/p>\n16. <\/strong>Excess Shares<\/u><\/strong>. If the Option
\nShares covered by this Agreement exceed, as of the Grant Date, the number of
\nShares which may without shareholder approval be issued under the Plan, then
\nthis Option shall be void with respect to those excess shares, unless
\nshareholder approval of an amendment sufficiently increasing the number of
\nShares issuable under the Plan is obtained in accordance with the provisions of
\nthe Plan and all applicable laws, regulations and rules.<\/p>\n17.<\/strong> Additional Terms Applicable to an Incentive
\nStock Options<\/u><\/strong>. In the event this Option is designated an Incentive
\nStock Option in the Notice, the following terms and conditions shall also apply
\nto the Option:<\/p>\n(a) This Option shall cease to qualify for favorable tax treatment as an
\nIncentive Stock Option if (and to the extent) this Option is exercised for one
\nor more Option Shares: (A) more than three (3) months after the date Optionee
\nceases to be an Employee for any reason other than death or Disability or
\n(B) more than twelve (12) months after the date Optionee ceases to be an
\nEmployee by reason of Disability.<\/p>\n (b) Even if this Option is designated as an Incentive Stock Option, if the
\nShares subject to this Option (and all other Incentive Stock Options granted to
\nOptionee by the Company or any Parent or Subsidiary, including under other plans
\nof the Company) that first become exercisable in any calendar year have an
\naggregate Fair Market Value (determined for each Share as of the date of grant
\nof the option covering such Share) in excess of $100,000, the Shares in excess
\nof $100,000 shall be treated as subject to a Nonstatutory Stock Option in
\naccordance all applicable laws, regulations and rules.<\/p>\n<\/p>\n 6<\/p>\n<\/p>\n
\n18.<\/strong> Leave of Absence<\/u>. <\/strong>Unless
\notherwise determined by the Committee, the following provisions shall apply upon
\nthe Optionee153s commencement of an authorized leave of absence:<\/p>\n(a) The Exercise Schedule in effect under the Notice shall be frozen as of
\nthe first day of the authorized leave, and this Option shall not become
\nexercisable for any additional installments of the Option Shares during the
\nperiod Optionee remains on such leave.<\/p>\n (b) If the Option is designated as an Incentive Stock Option in the Notice
\nand if the leave of absence continues for more than ninety (90) days, then this
\nOption shall automatically convert to a Nonstatutory Stock Option at the end of
\nthe three (3)-month period measured from the ninety-first (91st) day of such
\nleave, unless the Optionee153s right to return to active work is guaranteed by law
\nor by a contract.<\/p>\n (c) In no event shall this Option become exercisable for any additional
\nOption Shares or otherwise remain outstanding if Optionee does not resume
\nService prior to the Expiration Date of the Option term.<\/p>\n 19.<\/strong> Further Instruments<\/u><\/strong>. The parties
\nagree to execute such further instruments and to take such further action as may
\nbe reasonably necessary to carry out the purposes and intent of this Agreement.\n<\/p>\n20.<\/strong> Authorization to Release Necessary Personal
\nInformation<\/u><\/strong>.<\/p>\n(a) Optionee hereby authorizes and directs Optionee153s employer to collect,
\nuse and transfer in electronic or other form, any personal information (the
\n“Data”) regarding Optionee153s employment, the nature and amount of Optionee153s
\ncompensation and the fact and conditions of Optionee153s participation in the Plan
\n(including, but not limited to, Optionee153s name, home address, telephone number,
\ndate of birth, social security number (or any other social or national
\nidentification number), salary, nationality, job title, number of Shares held
\nand the details of all options or any other entitlement to Shares awarded,
\ncancelled, exercised, vested, unvested or outstanding) for the purpose of
\nimplementing, administering and managing Optionee153s participation in the Plan.
\nOptionee understands that the Data may be transferred to the Company or any of
\nits Subsidiaries, or to any third parties assisting in the implementation,
\nadministration and management of the Plan, including any requisite transfer to a
\nbroker or other third party assisting with the exercise of Options under the
\nPlan or with whom Shares acquired upon exercise of this Option or cash from the
\nsale of such shares may be deposited. Optionee acknowledges that recipients of
\nthe Data may be located in different countries, and those countries may have
\ndata privacy laws and protections different from those in the country of
\nOptionee153s residence. Furthermore, Optionee acknowledges and understands that
\nthe transfer of the Data to the Company or any of its Subsidiaries, or to any
\nthird parties is necessary for Optionee153s participation in the Plan.<\/p>\n (b) Optionee may at any time withdraw the consents herein, by<\/p>\n<\/p>\n 7<\/p>\n<\/p>\n
\ncontacting Optionee153s local human resources representative in writing.
\nOptionee further acknowledges that withdrawal of consent may affect Optionee153s
\nability to exercise or realize benefits from the Option, and Optionee153s ability
\nto participate in the Plan.<\/p>\n 21.<\/strong> No Entitlement or Claims for
\nCompensation<\/u><\/strong>.<\/p>\n(a) Optionee153s rights, if any, in respect of or in connection with this
\nOption or any other Award is derived solely from the discretionary decision of
\nthe Company to permit Optionee to participate in the Plan and to benefit from a
\ndiscretionary Award. By accepting this Option, Optionee expressly acknowledges
\nthat there is no obligation on the part of the Company to continue the Plan
\nand\/or grant any additional Awards to Optionee. This Option is not intended to
\nbe compensation of a continuing or recurring nature, or part of Optionee153s
\nnormal or expected compensation, and in no way represents any portion of a
\nOptionee153s salary, compensation, or other remuneration for purposes of pension
\nbenefits, severance, redundancy, resignation or any other purpose.<\/p>\n (b) Neither the Plan nor this Option or any other Award granted under the
\nPlan shall be deemed to give Optionee a right to remain an Employee, Consultant
\nor director of the Company, a Parent or a Subsidiary or an Affiliate. The
\nCompany and its Parents and Subsidiaries and Affiliates reserve the right to
\nterminate the Service of Optionee at any time, with or without cause, and for
\nany reason, subject to applicable laws, the Company153s Articles of Incorporation
\nand Bylaws and a written employment agreement (if any), and Optionee shall be
\ndeemed irrevocably to have waived any claim to damages or specific performance
\nfor breach of contract or dismissal, compensation for loss of office, tort or
\notherwise with respect to the Plan, this Option or any outstanding Award that is
\nforfeited and\/or is terminated by its terms or to any future Award.<\/p>\n (c) Optionee agrees that the Company may require Options granted hereunder be
\nexercised with, and the Option Shares held by, a broker designated by the
\nCompany. In addition, Optionee agrees that his or her rights hereunder shall be
\nsubject to set-off by the Company for any valid debts the Optionee owes to the
\nCompany.<\/p>\n<\/p>\n 8<\/p>\n<\/p>\n
\nCISCO SYSTEMS, INC. <\/strong><\/p>\nNOTICE OF GRANT OF STOCK OPTION <\/u><\/strong><\/p>\nNotice is hereby given of the following option grant (the “Option”) made to
\npurchase shares of Cisco Systems, Inc. (the “Company”) common stock:<\/p>\n Optionee: <\/p>\n <\/u><\/p>\n Grant Date: <\/p>\n <\/u><\/p>\n Type of Option: U.S. Nonstatutory Stock Option<\/p>\n Grant Number: <\/p>\n <\/u><\/p>\n Number of Option Shares: <\/p>\n <\/u> shares<\/p>\n Exercise Price: $ <\/u> per share<\/p>\n First Vest Date: <\/p>\n <\/u>\n<\/p>\n Expiration Date: <\/p>\n <\/u><\/p>\n Exercise Schedule<\/u><\/strong>. So long as Optionee153s Service
\ncontinues, the Option shall vest and become exercisable with respect to
\n(i) <\/u> percent ( <\/u>%) of the option shares, as
\nset forth above (the “Option Shares”) on the First Vest Date as set forth above
\nand (ii) the balance of the Option Shares in <\/u>
\ninstallments upon Optionee153s completion of each additional
\n <\/u> of Service over the <\/u>
\nperiod measured from the <\/u> First Vest Date. In no
\nevent shall the Option vest and become exercisable for any additional Option
\nShares after Optionee153s cessation of Service.<\/p>\nShould Optionee request a reduction to his or her work commitment to less
\nthan thirty (30) hours per week, then the Company shall have the right to extend
\nthe period over which the Option shall thereafter vest and become exercisable
\nfor the Option Shares during the remainder of the Option term to the extent
\npermitted under local law. In no event shall any extension of the exercise
\nschedule, as set forth above (“Exercise Schedule”) for the Option Shares result
\nin the extension of the expiration date, as set forth above, (“Expiration Date”)
\nof the Option.<\/p>\n Optionee understands and agrees that the Option is offered subject to and in
\naccordance with the terms of the Cisco Systems, Inc. 2005 Stock Incentive Plan
\n(the “Plan”). Optionee further agrees to be bound by the terms of the Plan and
\nthe terms of the Option as set forth in the Stock Option Agreement (the
\n“Agreement”) attached hereto.<\/p>\n No Employment or Service Contract<\/u><\/strong>. Nothing in this
\nNotice or in the attached Agreement or in the Plan shall confer upon Optionee
\nany right to continue in Service for any period of specific duration or
\ninterfere with or otherwise restrict in any way the rights of the Company (or
\nany Parent, Subsidiary or Affiliate employing or retaining Optionee) or of
\nOptionee, which rights are hereby expressly reserved by each, to terminate
\nOptionee153s Service at any time for any reason, with or without cause to the
\nextent permissible under local law.<\/p>\nDefinitions<\/u><\/strong>. All capitalized terms in this Notice
\nshall have the meaning assigned to them in this Notice, the attached Agreement
\nor the Plan.<\/p>\n<\/p>\n
\nSTOCK OPTION AGREEMENT <\/u><\/strong><\/p>\nRecitals <\/u><\/strong><\/p>\nA. The Board has adopted the Plan for the purpose of retaining the services
\nof selected Employees, non-employee members of the Board and Consultants.<\/p>\n B. Optionee is to render valuable services to the Company (or a Parent,
\nSubsidiary or Affiliate), and this Agreement is executed pursuant to, and is
\nintended to carry out the purposes of, the Plan in connection with the Company153s
\ngrant of an option to Optionee.<\/p>\n C. All capitalized terms in this Agreement shall have the meaning assigned to
\nthem in this Agreement, the attached Notice of Grant of Stock Option (the
\n“Notice”), or the Plan.<\/p>\n NOW, THEREFORE<\/strong>, it is hereby agreed as follows:<\/p>\n1.<\/strong> Grant of Option<\/u><\/strong>. The Company
\nhereby grants to Optionee, as of the grant date, as set forth in the Notice,
\n(the “Grant Date”) an option to purchase up to the number of Option Shares
\nspecified in the Notice. The Option Shares shall be purchasable from time to
\ntime during the Option term specified in Paragraph 2 at the Exercise Price
\nspecified in the Notice.<\/p>\n2. <\/strong>Option Term<\/u><\/strong>. This Option shall
\nhave a maximum term of <\/u> years [not to exceed ten (10)
\nyears] measured from the Grant Date and shall accordingly expire at the close of
\nbusiness on the Expiration Date, unless sooner terminated in accordance with
\nParagraph 4, 5 or 6.<\/p>\n3. <\/strong>Non-Transferability<\/u><\/strong>. This Option
\nshall not be anticipated, assigned, attached, garnished, optioned, transferred
\nor made subject to any creditor153s process, whether voluntarily or involuntarily
\nor by operation of law. Notwithstanding the foregoing, should the Optionee die
\nwhile holding this Option, then this Option shall be transferred in accordance
\nwith Optionee153s will or the laws of descent and distribution.<\/p>\n4. <\/strong>Dates of Exercise<\/u><\/strong>. This Option
\nshall vest and become exercisable for the Option Shares in one or more
\ninstallments as specified in the Notice. As the Option becomes exercisable for
\nsuch installments, those installments shall accumulate and the Option shall
\nremain exercisable for the accumulated installments until the Expiration Date or
\nsooner termination of the Option term under Paragraph 5 or 6. As an
\nadministrative matter, the exercisable portion of this Option may only be
\nexercised until the close of the Nasdaq Global Select Market on the Expiration
\nDate or the earlier termination date under Paragraph 5 or 6 or, if such date is
\nnot a trading day on the Nasdaq Global Select Market, the last trading day
\nbefore such date. Any later attempt to exercise this Option will not be honored.
\nFor example, if Optionee ceases to remain in Service as provided in Paragraph
\n5(i) and the date three (3) months from the date of cessation is Monday, July 4
\n(a holiday on which the Nasdaq Global Select Market is closed), Optionee must
\nexercise the exercisable portion of this Option by 4:00 p.m. Eastern Daylight
\nTime on Friday, July 1.<\/p>\n<\/p>\n
\n5.<\/strong> Cessation of Service<\/u><\/strong>. The Option
\nterm specified in Paragraph 2 shall terminate (and this Option shall cease to be
\noutstanding) prior to the Expiration Date should any of the following provisions
\nbecome applicable:<\/p>\n(i) Should Optionee cease to remain in Service for any reason (other than
\ndeath, Disability or Cause and whether or not in breach of local labor laws)
\nwhile this Option is outstanding, then Optionee shall have a period of three
\n(3) months (commencing with the date of such cessation of Service) during which
\nto exercise this Option, but in no event shall this Option be exercisable at any
\ntime after the Expiration Date.<\/p>\n (ii) If Optionee dies while this Option is outstanding, then the Optionee153s
\ndesignated beneficiary or, if no beneficiary was designated or properly
\ndesignated or, if no designated beneficiary survives the Optionee, the
\nOptionee153s estate (to the extent reasonably determinable) or other individual or
\nentity entitled to receive the Option under applicable local law shall have the
\nright to exercise this Option. Such right shall lapse, and this Option shall
\ncease to be outstanding, upon the earlier of (A) the expiration of the eighteen
\n(18) month period measured from the date of Optionee153s death or (B) the
\nExpiration Date. Optionee may only make a beneficiary designation with respect
\nto this Option if the Company has approved a process or procedure for such
\nbeneficiary designation for the local jurisdiction within which Optionee
\nperforms services for the Company or a Parent, Subsidiary or Affiliate. If no
\nsuch beneficiary designation process or procedure has been approved by the
\nCompany, then, in the event of Optionee153s death, this Option may only be
\nexercised by the Optionee153s estate (to the extent reasonably determinable) or
\nother individual or entity entitled to receive the Option under applicable local
\nlaw.<\/p>\n (iii) Should Optionee cease Service by reason of Disability while this Option
\nis outstanding, then Optionee shall have a period of eighteen (18) months
\n(commencing with the date of such cessation of Service) during which to exercise
\nthis Option, but in no event shall this Option be exercisable at any time after
\nthe Expiration Date.<\/p>\n (iv) During the limited period of post-Service exercisability, this Option
\nmay not be exercised in the aggregate for more than the number of vested Option
\nShares for which the Option is exercisable at the date the Optionee ceases to
\nactively provide Service (not extended by any notice period mandated under local
\nlaw). Upon the expiration of such limited exercise period or (if earlier) upon
\nthe Expiration Date, this Option shall terminate and cease to be outstanding for
\nany vested Option Shares for which the Option has not been exercised. However,
\nthis Option shall, immediately as of the date the Optionee ceases to actively
\nprovide Service for any reason, terminate and cease to be outstanding with
\nrespect to any Option Shares in which Optionee is not otherwise at that time
\nvested or for which this Option is not otherwise at that time exercisable.<\/p>\n (v) Should Optionee153s Service be terminated for Cause or should Optionee
\notherwise engage in activities constituting Cause while this Option is<\/p>\n<\/p>\n 2<\/p>\n<\/p>\n
\noutstanding, then this Option shall terminate immediately and cease to remain
\noutstanding. In the event Optionee153s Service is suspended pending an
\ninvestigation of whether Optionee153s Service will be terminated for Cause, all
\nOptionee153s rights under the Option, including the right to exercise the Option,
\nshall be suspended during the investigation period.<\/p>\n (vi) For purposes of this Paragraph 5, in the event of Optionee153s cessation
\nof Service, Optionee153s right to receive additional options or to vest in the
\nOption will end as of the date the Optionee is no longer actively providing
\nService and will not be extended by any notice period mandated under local law
\n(e.g<\/em>., active Service would not include any period of “garden leave” or
\nsimilar period pursuant to local law); the Company shall have the exclusive
\ndiscretion to determine when an Optionee is no longer actively providing Service
\nfor purposes of this Option.<\/p>\n6.<\/strong> Special Acceleration of
\nOption<\/u><\/strong>.<\/strong><\/p>\n(a) This Option, to the extent outstanding at the time of a Corporate
\nTransaction but not otherwise fully vested and exercisable, shall automatically
\naccelerate so that this Option shall, immediately prior to the effective date of
\nthe Corporate Transaction, become vested and exercisable for all of the Option
\nShares at the time subject to this Option and may be exercised for any or all of
\nthose Option Shares as fully-vested Shares. No such acceleration of this Option,
\nhowever, shall occur if and to the extent: (i) this Option is, in connection
\nwith the Corporate Transaction, either assumed by the successor corporation (or
\nparent thereof) or replaced with a comparable option to purchase shares of the
\ncapital stock of the successor corporation (or parent thereof) or (ii) this
\nOption is replaced with a cash incentive program of the successor corporation
\nwhich preserves the spread existing on the unvested Option Shares at the time of
\nthe Corporate Transaction (the excess of the Fair Market Value of those Option
\nShares over the aggregate Exercise Price payable for such Shares) and provides
\nfor subsequent pay-out in accordance with the same Exercise Schedule set forth
\nin the Notice. The determination of option comparability under clause (i) shall
\nbe made by the Committee, and such determination shall be final, binding and
\nconclusive.<\/p>\n (b) Immediately following the effective date of the Corporate Transaction,
\nthis Option shall terminate and cease to be outstanding, except to the extent
\nassumed by the successor corporation (or parent thereof) in connection with the
\nCorporate Transaction.<\/p>\n (c) If this Option is assumed in connection with a Corporate Transaction,
\nthen the Committee shall appropriately adjust the number of shares and the kind
\nof shares or securities covered by the Option and the Exercise Price immediately
\nafter such Corporate Transaction, provided the aggregate Exercise Price shall
\nremain the same.<\/p>\n (d) This Option, to the extent outstanding at the time of a Change in Control
\nbut not otherwise fully vested and exercisable, shall automatically accelerate
\nso that this Option shall, immediately prior to the effective date of the Change
\nin Control,<\/p>\n<\/p>\n 3<\/p>\n<\/p>\n
\nbecome vested and exercisable for all of the Option Shares at the time
\nsubject to this Option and may be exercised for any or all of those Option
\nShares as fully-vested Shares. This Option shall remain so exercisable until the
\nExpiration Date or sooner termination of the Option term.<\/p>\n (e) This Agreement shall not in any way affect the right of the Company to
\nadjust, reclassify, reorganize or otherwise change its capital or business
\nstructure or to merge, consolidate, dissolve, liquidate or sell or transfer all
\nor any part of its business or assets.<\/p>\n 7.<\/strong> Adjustment in Option Shares<\/u><\/strong>. In
\nthe event of a subdivision of the outstanding Shares, a declaration of a
\ndividend payable in Shares, a declaration of a dividend payable in a form other
\nthan Shares in an amount that has a material effect on the price of Shares, a
\ncombination or consolidation of the outstanding Shares (by reclassification or
\notherwise) into a lesser number of Shares, a recapitalization, a spin-off or a
\nsimilar occurrence, appropriate adjustments shall be made to (i) the total
\nnumber and\/or kind of shares or securities subject to this Option and (ii) the
\nExercise Price in order to reflect such change and thereby preclude a dilution
\nor enlargement of benefits hereunder.<\/p>\n8.<\/strong> Shareholder Rights<\/u><\/strong>. The holder of
\nthis Option shall not have any shareholder rights with respect to the Option
\nShares until such person shall have exercised the Option, paid the Exercise
\nPrice and become a holder of record of the purchased Shares.<\/p>\n9.<\/strong> Manner of Exercising Option<\/u><\/strong>.<\/p>\n(a) In order to exercise this Option with respect to all or any part of the
\nOption Shares for which this Option is at the time exercisable, Optionee (or any
\nother person or persons exercising the Option) must take the following actions:\n<\/p>\n (i) Pay the aggregate Exercise Price for the purchased Shares in one or more
\nof the following forms:<\/p>\n (A) cash or check which, in the Company153s sole discretion, shall be made
\npayable to a Company-designated brokerage firm or the Company; and<\/p>\n (B) as permitted by applicable law, through a special sale and remittance
\nprocedure pursuant to which Optionee (or any other person or persons exercising
\nthe Option) shall concurrently provide irrevocable written instructions (I) to a
\nCompany-designated brokerage firm (or in the case of an executive officer or
\nBoard member of the Company, an Optionee-designated brokerage firm) to effect
\nthe immediate sale of the purchased Shares and remit to the Company, out of the
\nsale proceeds available on the settlement date, sufficient funds to cover the
\naggregate Exercise Price payable for the purchased Shares plus, if applicable,
\nthe amount necessary to satisfy the Company153s (or a Parent153s, Subsidiary153s or
\nAffiliate153s) withholding obligations<\/p>\n<\/p>\n 4<\/p>\n<\/p>\n
\n(including income tax, social taxes or insurance contributions, payroll tax,
\npayment on account or other tax items related to Optionee153s participation in the
\nPlan and legally applicable to Optionee (“Tax-Related Items”)) and (II) to the
\nCompany to deliver the purchased Shares directly to such brokerage firm in order
\nto complete the sale transaction.<\/p>\n (ii) Furnish to the Company appropriate documentation that the person or
\npersons exercising the Option (if other than Optionee) have the right to
\nexercise this Option.<\/p>\n (iii) Make appropriate arrangements with the Company (or a Parent, Subsidiary
\nor Affiliate employing or retaining Optionee) for the satisfaction of all
\nwithholding or other obligations related to Tax-Related Items applicable to the
\nOption grant, vesting, exercise or the sale of Shares, as applicable.<\/p>\n (b) As soon as practical after the exercise date, the Company shall issue to
\nor on behalf of Optionee (or any other person or persons exercising this Option)
\nthe purchased Option Shares, (as evidenced by an appropriate entry on the books
\nof the Company or a duly authorized transfer agent of the Company), subject to
\nthe appropriate legends and\/or stop transfer instructions.<\/p>\n (c) In no event may this Option be exercised for any fractional Shares.<\/p>\n (d) Notwithstanding any other provisions of the Plan, this Agreement or any
\nother agreement to the contrary, if at the time this Option is exercised,
\nOptionee is indebted to the Company (or any Parent, Subsidiary or Affiliate) for
\nany reason, the following actions shall be taken, as deemed appropriate by the
\nCommittee:<\/p>\n (i) any Shares to be issued upon such exercise shall automatically be pledged
\nagainst Optionee153s outstanding indebtedness; and<\/p>\n (ii) if this Option is exercised in accordance with subparagraph 9(a)(i)(B)
\nabove, the after tax proceeds of the sale of Optionee153s Shares shall
\nautomatically be applied to the outstanding balance of Optionee153s indebtedness.\n<\/p>\n 10.<\/strong> Responsibility for Taxes<\/u><\/strong>.<\/p>\n(a) Optionee authorizes the Company and\/or the Optionee153s employer (the
\n“Employer”) or their respective agents, at their discretion, to satisfy any
\nobligations related to Tax-Related Items by one or a combination of the
\nfollowing: (1) withholding all applicable Tax-Related Items from Optionee153s
\nwages or other cash compensation paid to Optionee by the Company and\/or the
\nEmployer; (2) withholding from proceeds of the sale of Shares acquired upon
\nexercise of the Option either through a voluntary sale (specifically including
\nwhere this Option is exercised in accordance with subparagraph 9(a)(i)(B) above)
\nor through a mandatory sale arranged by the Company (on Optionee153s behalf
\npursuant to this authorization); or (3) withholding of Shares that would
\notherwise be issued upon exercise of the Option. To avoid financial accounting
\ncharges under applicable accounting guidance, the Company may withhold or
\naccount for Tax-Related<\/p>\n<\/p>\n 5<\/p>\n<\/p>\n
\nItems by considering applicable minimum statutory withholding rates or may
\ntake any other action required to avoid financial accounting charges under
\napplicable accounting guidance. Finally, Optionee must pay to the Company or the
\nEmployer any amount of Tax-Related Items that the Company or the Employer may be
\nrequired to withhold or account for as a result of Optionee153s participation in
\nthe Plan or Optionee153s purchase of Shares that cannot be satisfied by the means
\npreviously described. The Company may refuse to honor the exercise and refuse to
\nissue or deliver the Shares or the proceeds of the sale of the Shares if
\nOptionee fails to comply with Optionee153s obligations in connection with the
\nTax-Related Items as described in this Paragraph.<\/p>\n (b) Regardless of any action the Company or the Employer takes with respect
\nto any or all Tax-Related Items, Optionee acknowledges that the ultimate
\nliability for all Tax-Related Items is and remains Optionee153s responsibility and
\nmay exceed the amount actually withheld by the Company or the Employer. Optionee
\nfurther acknowledges that the Company and\/or the Employer (1) make no
\nrepresentations or undertakings regarding the treatment of any Tax-Related Items
\nin connection with any aspect of the Option, including the grant, vesting or
\nexercise of the Option, the subsequent sale of Shares acquired pursuant to such
\nexercise and the receipt of any dividends; and (2) do not commit to and are
\nunder no obligation to structure the terms of the grant or any aspect of the
\nOption to reduce or eliminate Optionee153s liability for Tax-Related Items or
\nachieve any particular tax result. Further, if Optionee becomes subject to
\ntaxation in more than one jurisdiction between the Grant Date and the date of
\nany relevant taxable event, Optionee acknowledges that the Company and\/or the
\nEmployer (or former employer, as applicable) may be required to withhold or
\naccount for Tax-Related Items in more than one jurisdiction.<\/p>\n 11.<\/strong> Compliance with Laws and
\nRegulations<\/u><\/strong>.<\/p>\n(a) The exercise of this Option and the issuance of the Option Shares upon
\nsuch exercise shall be subject to compliance by the Company and Optionee with
\nall applicable laws, regulations and rules relating thereto, including all
\napplicable regulations of any stock exchange (or the Nasdaq Global Select
\nMarket, if applicable) on which the Shares may be listed for trading at the time
\nof such exercise and issuance and all applicable foreign laws.<\/p>\n (b) The inability of the Company to obtain approval from any regulatory body
\nhaving authority deemed by the Company to be necessary to the lawful issuance
\nand sale of any Shares pursuant to this Option shall relieve the Company of any
\nliability with respect to the non-issuance or sale of the Shares as to which
\nsuch approval shall not have been obtained.<\/p>\n 12.<\/strong> Successors and Assigns<\/u><\/strong>. Except
\nto the extent otherwise provided in Paragraphs 3, 5 and 6, the provisions of
\nthis Agreement shall inure to the benefit of, and be binding upon, the Company
\nand its successors and assigns and Optionee, Optionee153s assigns and the legal
\nrepresentatives, heirs and legatees of Optionee153s estate.<\/p>\n<\/p>\n6<\/p>\n<\/p>\n
\n13.<\/strong> | | | |