UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): April 12, 2005
NATIONAL SEMICONDUCTOR CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 1-6453 95-2095071
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(State of Incorporation) (Commission (I.R.S. Employer
File Number) Identification Number)
2900 SEMICONDUCTOR DRIVE, P.O. BOX 58090
SANTA CLARA, CALIFORNIA 95052-8090
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(Address of Principal Executive Offices)
(408) 721-5000
(Registrant's telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
[ ] Written communication pursuant to Rule 425 under the securities Act (17 CFR
230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Act (17
CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Act (17
CFR 240.14a-12)
NATIONAL SEMICONDUCTOR CORPORATION
Table of Contents
Page
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Section 1 - Registrant's Business and Operations
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Item 1.01 Entry into a Material Definitive Agreement 3
Item 1.02 Termination of Material Definitive Agreement 3
Section 9 - Financial Statements and Exhibits
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Item 9.01 Financial Statements and Exhibits 4
Exhibits:
10.1 Management Contract or Compensatory Plan or Arrangement: Form of
Option Grant Agreement under 2005 Executive Officer Equity Plan.
10.2 Management Contract or Compensatory Plan or Arrangement: Form of
Performance Share Unit Award Agreement under 2005 Executive Officer
Equity Plan.
Signature 4
NATIONAL SEMICONDUCTOR CORPORATION
Item 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT
The stockholders of National Semiconductor Corporation ("National" or the
"Company") approved the 2005 Executive Officer Equity Plan ("EOEP") at the
Company's annual stockholders meeting held on October 1, 2004. A copy of the
EOEP was filed with the SEC with the Company's 2004 Form 10-K. Under SEC rules,
the EOEP is considered a material agreement of the Company. On April 12, 2005,
the Compensation Committee of the Company's Board of Directors approved the form
of the option grant agreement and the form of the performance share unit award
agreement to be used in connection with grants of options and performances share
units under the EOEP. To date, no awards or grants have been made under the
EOEP. A copy of the form of the option grant agreement is attached hereto as
Exhibit 10.1 and a copy of the form of the performance share unit award is
attached hereto as Exhibit 10.2.
Item 1.02 TERMINATION OF MATERIAL DEFINITIVE AGREEMENT
National also offers the Director Deferral Plan ("Plan") to its directors. Under
SEC rules, the Plan is considered a material agreement of the Company. The Plan
allowed directors to defer payment of their director retainer fees until
termination of service as a director or a date preselected by the participating
director. On April 13, 2005, the Company's Board of Directors terminated the
Plan. No directors have ever participated in the Plan.
Item 9.01 FINANCIAL STATEMENTS AND EXHIBITS
Exhibits
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Exhibit No. Description of Exhibit
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10.1 Management Contract or Compensatory Plan or Arrangement:
Form of Option Grant Agreement under 2005 Executive Officer
Equity Plan.
10.2 Management Contract or Compensatory Plan or Arrangement:
Form of Performance Share Unit Award Agreement under 2005
Executive Officer Equity Plan.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
NATIONAL SEMICONDUCTOR CORPORATION
//S// JOHN M. CLARK III
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Dated: April 14, 2005 John M. Clark III
Senior Vice President
Signing on behalf of the registrant
Exhibit 10.1
National Semiconductor Corporation
Notice of Grant of Stock Option and Option Agreement
You have been granted a Non-Qualified Stock Option under National Semiconductor
Corporation's 2005 Executive Officer Equity Plan.
Option Grant Date:
Option Price:
Number of Shares:
Vesting Schedule:
Plan under which option granted: 2005 Executive Officer Equity Plan
Performance Conditions
(if applicable):
Option Term:
Option Number:
Except in certain instances, vesting on options ceases upon termination of
employment. After termination, vested options generally may be exercised within
3 months although certain exceptions apply. Consult the Plan and Prospectus for
details.
The option is subject to the terms and conditions of this non-qualified Stock
Option Agreement, the additional terms and conditions of the Stock Option
Agreement, the Company's 2005 Executive Officer Equity Plan, and the related
Prospectus. These documents may be accessed on the intranet at the National
Semiconductor Corporate Human Resources website,
www-hr.nsc.com/Site_Map/site_map.html. Hard copies are available upon request
from Stock Administration, Mail Stop C1-640, 2900 Semiconductor Drive, Santa
Clara, CA 95051, stock.administration@nsc.com.
The exercise of a stock option has tax implications. Consult the Prospectus and
your tax adviser for details.
PLEASE NOTE: The granting of stock options is solely at the Company's
discretion. There is no guarantee that you will be granted options in the
future. In addition, the Company is not responsible for and does not guarantee
that you will be able to achieve any particular sales price in connection with
your stock option exercise.
By agreeing to accept this Agreement, you confirm that you have received copies
of and agree to be bound by the terms and conditions of the Plan, Additional
Terms of the Stock Option Agreement, and Prospectus. In particular, you should
note that by accepting this Agreement, you consent to the collection, use and
transfer of personal data about you as described in the Additional Terms of the
Stock Option Agreement. This option cannot be exercised unless you have accepted
this Agreement.
ADDITIONAL TERMS AND CONDITIONS - STOCK OPTIONS
2005 EXECUTIVE OFFICER EQUITY PLAN
Rev. 2/05
1. If performance requirements have been established for the exercisability
of the Option, the Option may not be exercised until the Committee certifies in
writing that the performance requirements have been satisfied. If no performance
requirements have been established for the exercisability of the Option, the
Option shall be exercisable in accordance with the Vesting Schedule.
2. Except as permitted under Section 10.1.1 of the Plan, the Option shall
terminate and may not be exercised if the Optionee ceases to be employed by the
Company, or any of its subsidiaries, prior to Optionee's completion of six
months of continuous employment following the date the Option was granted. If
Optionee's employment terminates after such six month period, the Option shall
terminate and may not be exercised except as follows:
(a) If Optionee's continuous employment terminates for any reason other
than (i) Retirement, (ii) Disability, or (iii) death, Optionee may
exercise the Option to the extent that Optionee was entitled to
exercise it at the date of such termination at any time within a
period of three (3) months following the date of such termination. If
Optionee shall die during such three (3) month period without having
exercised the Option, the person or persons to whom the Optionee's
rights under the Option shall pass by will or by the laws of descent
or distribution may exercise the Option within a period of one year
following Optionee's death but only to the extent the Option was
exercisable at the date of Optionee's termination;
(b) If Optionee's continuous employment is terminated by (i) Retirement,
(ii) Disability, or (iii) death, any applicable performance conditions
shall be waived at the time of termination and the Option may be
exercised as provided in the Vesting Schedule (subject to the
accelerated vesting provisions of Paragraph 3 hereof) at any time
within a period of five (5) years following the date of such
termination by Optionee, or in the event of Optionee's death, by the
person or persons to whom Optionee's rights under the Option shall
pass by will or by the laws of descent or distribution; provided,
however, that if Optionee shall become employed by or provide services
in any manner to a competitor of the Company or any subsidiary, the
Option shall terminate immediately and may not be exercised.
3. If Optionee has completed at least six months of continuous employment
following the date the Option was granted and Optionee's continuous employment
is terminated by (i) death; or (ii) Retirement or Disability and Optionee dies
within three (3) years following the date of such termination, the Option shall
be fully exercisable upon Optionee's death notwithstanding any performance
conditions and the installment exercise provisions of the Vesting Schedule.
4. Nothing contained in Paragraph 2 or Paragraph 3 hereof is intended to
extend the stated term of the Option, and in no event may the Option be
exercised after the Option Term has expired.
5. The Option is exercisable, during the lifetime of the Optionee, only by
the Optionee. The Option may not be sold, pledged, assigned or transferred in
any manner otherwise than by will or the laws of descent and distribution, and
shall not be subject to attachment or similar process. Any attempted sale,
pledge, assignment, transfer or other disposition of the Option contrary to the
provisions hereof and the levy of any attachment or similar process upon the
Option shall be null and void and without effect.
6. In the event there is any change in the shares of the Company through
the declaration of stock dividends or a stock split-up, or through any
recapitalization resulting in share split-up, or combinations or exchanges of
shares, or otherwise, the number of shares subject to the Option and the
purchase price of such shares shall be appropriately adjusted by the Committee.
No fractional shares shall be issued upon any exercise of the Option.
7. Subject to the terms and conditions of this Agreement, the Option may be
exercised by giving notice to the Company at such location and in such form as
that the Company may designate. Such notice shall (i) state the election to
exercise the Option and the number of full shares in respect of which it is
being exercised, and (ii) be signed by the person or persons so exercising the
Option and, in the event the Option is being exercised (pursuant to Paragraph 2
hereof) by any person or persons other than the Optionee, be accompanied by
appropriate proof of the right of such person or persons to exercise the Option.
Such notice may be in electronic form and shall be accompanied by payment of the
full purchase price for such shares, whereupon the Company shall issue and
deliver, or cause to be issued and delivered a certificate or certificates,
which may be in book entry form, representing such shares as soon as practicable
after such notice is received. The purchase price for such shares must be paid
in full in cash, or paid in full in Common Stock of the Company held by the
Optionee for at least six months or a combination of cash and Common Stock held
for at least six months by the Optionee. The payment of all or part of the
applicable withholding taxes due upon exercise of an Option, up to the highest
marginal rates then in effect, may be made by the withholding of shares
otherwise issuable upon exercise of the Option. Option shares withheld in
payment of taxes or shares owned by Optionee that are delivered in payment of
taxes shall be valued at the opening price of the Company's Common Stock on the
New York Stock Exchange on the date of exercise, or if the Exchange is not open
or there are no reported sales of the Common Stock on the exercise date, the
opening price on the last preceding date for which sales are reported. The
certificate or certificates for the shares as to which the Option shall have
been so exercised shall be registered in the name of the person or persons so
exercising the Option and shall be delivered as aforesaid to or upon the written
order of the person or persons exercising the Option. The date of the exercise
of the Option will be the date on which the aforesaid notice, properly executed
and accompanied as aforesaid, is received by the Company. All shares that shall
be purchased upon the exercise of the Option as provided herein shall be fully
paid and nonassessable. Until the certificate or certificates have been issued
as aforesaid, the person or persons exercising the Option shall possess no
rights of a record holder with respect to any of such shares.
8. The Company will seek to obtain from each regulatory commission or
agency having jurisdiction such authority as may be required to issue and sell
the shares of stock subject to the Option. Inability of the Company to obtain
from any such regulatory commission or agency authority which counsel for the
Company deems necessary for the lawful issuance and sale of its stock to satisfy
the Option shall relieve the Company from any liability for failure to issue and
sell stock to satisfy the Option pending the time when such authority is
obtained or is obtainable.
9. By entering into this Agreement and accepting the grant of the Option
evidenced hereby, Optionee acknowledges that: (i) the Plan is discretionary in
nature and may be amended, suspended or terminated by the Company at any time;
(ii) the grant of the Option is a one-time benefit which does not create any
contractual or other right to receive future grants of options, or benefits in
lieu of options; (iii) all determinations with respect to any such future
grants, including, but not limited to, the times when options shall be granted,
the number of shares subject to each option, the option price, and the time or
times when each option shall be exercisable, will be at the sole discretion of
the Company and the Committee; (iv) the Optionee's receipt of this Option shall
not create a right to further employment with the Company and shall not
interfere with the ability of the Company to terminate the Optionee's employment
relationship at any time with or without cause; (v) the Optionee's participation
in the Plan is voluntary; (vi) the value of the Option is an extraordinary item
of compensation which is outside the scope of the Optionee's employment
contract, if any; (vii) the Option is not part of normal or expected
compensation for purposes of calculating any severance, resignation, redundancy,
end of service payments, bonuses, long-service awards, pension or retirement
benefits or similar payments; (viii) the future value of the underlying shares
is unknown and cannot be predicted with certainty; and (ix) if the underlying
shares do not increase in value, the Option will have no value.
10. For Optionees employed at international locations: The Company and/or
the Optionee's employer will assess its requirements regarding tax, social
insurance and any other payroll tax (Tax-Related Items") withholding and
reporting in connection with the Option, including the grant, vesting or
exercise of the Option or sale of shares acquired pursuant to such exercise.
These requirements may change from time to time as laws or interpretations
change. Regardless of the actions of the Company and/or the Optionee's employer
in this regard, the Optionee hereby acknowledges and agrees that the ultimate
liability for any and all Tax-Related Items is and remains his or her
responsibility and liability and that the Company and/or the Optionee's employer
(i) makes no representations nor undertakings regarding treatment of any
Tax-Related Items in connection with any aspect of the Option grant, including
the grant, vesting or exercise of the Option and the subsequent sale of shares
acquired pursuant to such exercise; and (ii) does not commit to structure the
terms of the grant or any aspect of the Option to reduce or eliminate the
Optionee's liability regarding Tax-Related Items. In the event that the Company
and/or the Optionee's employer must withhold any Tax-Related Items as a result
of the grant, vesting, or exercise of the Option or sale of shares, the Optionee
agrees to make arrangements satisfactory to the Company and/or the Optionee's
employer to satisfy all withholding requirements. The Optionee authorizes the
Company and/or the Optionee's employer to withhold all applicable Tax-Related
Items legally due from the Optionee from his or her wages or other cash
compensation paid him or her by the Company and/or the Optionee's employer or
from proceeds from the sale of shares.
11. As a condition of the grant of the Option, the Optionee consents to the
collection, use and transfer of personal data as described in this Paragraph 11.
The Optionee understands that the Company and its subsidiaries hold certain
personal information about the Optionee, including the Optionee's name, home
address and telephone number, date of birth, social security number or
identification number, salary, nationality, job title, any shares of stock or
directorships held in the Company, details of all options or any other
entitlement to shares of stock awarded, cancelled, exercised, vested, unvested
or outstanding in the Optionee's favor, for the purpose of managing and
administering the Plan ("Data"). The Optionee further understands that the
Company and/or its subsidiaries will transfer Data amongst themselves as
necessary for the purpose of implementation, administration and management of
the Optionee's participation in the Plan, and that the Company and/or any of its
subsidiaries may each further transfer Data to any third parties assisting the
Company in the implementation, administration and management of the Plan. The
Optionee understands that these recipients may be located in the European
Economic Area, or elsewhere, such as the United States. The Optionee authorizes
them to receive, possess, use, retain and transfer the Data, in electronic or
other form, for the purposes of implementing, administering and managing the
Optionee's participation in the Plan, including any requisite transfer to a
broker or other third party with whom the Optionee may elect to deposit any
shares of stock acquired upon exercise of the Option, such Data as may be
required for the administration of the Plan and/or the subsequent holding of
shares of stock on his or her behalf. The Optionee understands that he or she
may, at any time, view Data, require any necessary amendments to it or withdraw
the consents herein in writing by contacting his or her local Human Resources
representative. Withdrawal of consent may, however, affect Optionee's ability to
exercise or realize benefits from the Option.
12. Capitalized terms not defined herein or in the Notice of Grant of Stock
Option and Agreement shall have the meaning ascribed to them in the Plan.
Moreover, as used in this Option Agreement, the following terms shall have the
meanings set forth in this Paragraph 12:
(a) "subsidiary": any corporation in which the Company controls, directly
or indirectly, 50% or more of the combined voting power of all classes
of stock;
(b) "continuous employment": the absence of any interruption or
termination of employment by the Company or any of its subsidiaries.
Employment shall not be considered interrupted in the case of
transfers between payroll locations of the Company and/or its
subsidiaries, or in the case of sick leave or any other leave of
absence approved by the Company.
13. This Option Agreement shall be governed by the laws of the State of
California.
14. This Option is granted pursuant to the Company's 2005 Executive Officer
Equity Plan (the "Plan"), a copy of which is available in electronic form on the
Company's Human Resources website or in hard copy from the Stock Administration
department and by reference incorporated herein. In the event of any
inconsistency between the terms hereof and the provisions of the Plan, the Plan
shall govern.
Exhibit 10.2
National Semiconductor Corporation
Performance Share Unit Award Agreement
Performance Share Unit targets have been established for you under National
Semiconductor Corporation's 2005 Executive Officer Equity Plan.
Target Number of Units:
Performance Conditions:
Performance Period:
Vesting Period:
The establishment of Performance Share Unit targets is subject to the terms
and conditions of this Performance Share Unit Agreement, the additional terms
and conditions of the Performance Share Unit Agreement, the Company's 2005
Executive Officer Equity Plan, and the Prospectus for the Plan. These documents
may be accessed on the intranet at the National Semiconductor Corporate Human
Resources website, www-hr.nsc.com/sit-map/site-map.html. Hard copies are
available upon request from Stock Administration, Mail Stop C1-640, 2900
Semiconductor Drive, Santa Clara, CA 95051, Stock.administration@nsc.com.
----------------------------
The issuance of stock in payment of a Performance Share Unit award has tax
implications. Consult the Prospectus and your tax adviser for details.
PLEASE NOTE: The granting of Performance Share Unit targets is solely at
the Company's discretion. There is no guarantee that you will actually receive
shares of common stock in payment of Performance Share Unit awards unless
performance is achieved or that you will receive other target awards of
Performance Share Units in the future. In addition, the Company is not
responsible for and does not guarantee that you will be able to achieve any
particular result in connection with your Performance Share Units.
By accepting the Performance Share Units, you confirm that you have
received copies of and agree to be bound by the terms and conditions of the
Plan, Additional Terms of the Performance Share Unit Agreement, and Prospectus.
In particular, you should note that, you consent to the collection, use and
transfer of personal data about you as described in the Additional Terms of the
Performance Share Unit Agreement.
ADDITIONAL TERMS AND CONDIDITIONS
PERFORMANCE SHARE UNITS
2005 EXECUTIVE OFFICER EQUITY PLAN
1. Performance requirements have been established for the Performance Share
Units. Shares of Common Stock will not be issued until the Committee certifies
in writing that the performance requirements have been satisfied. In addition to
the performance requirements, any applicable vesting requirements must have been
satisfied before any Awards will be paid.
2. A target number of Performance Share Units have been established for each
Participant. The target shall constitute the total number of Performance Share
Units that may be achieved at a performance level of 100%. In the event a
Participant changes positions during the performance period, the Committee has
the discretion to adjust the target number of Performance Share Units to reflect
the Committee's assessment of the level of responsibilities associated with the
Participant's new position.
3. Performance conditions and associated weights will be established by the
Committee within ninety (90) days after the start of the performance period,
which at a minimum shall be two years. Each performance condition will define
the source for scoring and the measurement metric. Performance conditions and
their associated weights may change from one performance period to another
performance period to reflect the Company's financial, operational and strategic
goals.
4. The actual Award amount may vary from the target number of Performance Share
Units, depending on actual achievement on performance conditions.
5. Awards will be determined at the end of the performance period if a threshold
performance level on the performance conditions of 50% has been achieved. At the
time of Award determination, the actual number of Performance Share Units earned
will be determined, based on achievement on applicable performance conditions.
The Committee must determine the performance level achieved and certify in
writing that the performance ratings and other applicable conditions have been
satisfied before Awards can be paid. The actual number of Performance Share
Units that may be earned by any one Participant for any one performance period
may range from 50% to 150% of the established target and may not exceed 375,000.
The Committee reserves the right to reduce an Award to reflect a Participant's
absence from work during a performance period. Awards will be paid in shares of
Common Stock equal to the number of Performance Share Units that has been earned
after the Committee has approved the Award and any applicable vesting period
thereafter has been satisfied. Any fractional share numbers will be rounded down
to the next whole number.
6. Except as permitted under Section 10.1.2 of the Plan, in order to be eligible
to receive payment of a Performance Share Unit Award, a Participant must be
employed by the Company on the last working day of the performance period and
continue to be employed during any applicable vesting period. A Participant
whose employment has terminated prior to such date or dates will forfeit an
Award, except as provided below:
(a) If a Participant's continuous employment is terminated during the
performance period by Disability, Retirement or death, the Participant
will be entitled to receive an Award reflecting the Participant's
performance and actual period of full time employment during the
performance period.
(b) If a Participant's continuous employment is terminated by reason of
Disability, Retirement or death during the vesting period after Awards
have been determined at the end of the performance period, the
Participant will be entitled to receive full payment of the Award at
the time of termination.
(c) Unless local law or regulation provides otherwise, payments of Awards
made upon termination of employment by death shall be made to the
persons to whom the Participant's rights pass by will or the laws of
descent or distribution.
(d) If an Award has been paid early as a result of termination of
employment by Retirement and the Participant shall become employed by
or provide services in any manner to a competitor of the Company or
any subsidiary, the Participant shall repay the Award to the Company.
7. Prior to the actual payment of Awards, Performance Share Units may not be
sold, pledged, assigned or transferred in any manner and shall not be subject to
attachment or similar process. Any attempted sale, pledge, assignment, transfer
or other disposition of the Performance Share Unit contrary to the provisions
hereof and the levy of any attachment or similar process upon the Performance
Share Unit shall be null and void and without effect.
8. In the event there is any change in the shares of the Company through the
declaration of stock dividends or a stock split-up, or through any
recapitalization resulting in share split-up, or combinations or exchanges of
shares, or otherwise, the number of Performance Share Units outstanding shall be
appropriately adjusted by the Committee. Any fractional share numbers will be
rounded down to the next whole number.
9. Taxes due on payment of a Performance Share Unit Award shall be paid through
the withholding of shares otherwise issuable upon payment of the Award. At the
Participant's option, the Participant may elect to pay the taxes due in (i)
cash, (ii) Common Stock of the Company held by the Participant at least six
months, or (iii) a combination of cash and Common Stock held by the Participant
at least six months. Common Stock used to pay taxes (whether through stock
withholding or delivery by the Participant) shall be valued at the opening price
of the Company's Common Stock on the New York Stock Exchange on the date of
payment or, if the Exchange is not open or there are no reported sales of the
Common Stock on the payment date, the opening price on the last preceding date
for which sales are reported. The certificate or certificates for the shares
issued in payment of a Performance Share Unit, which may be in book entry form,
shall be registered in the name of and delivered to the Participant. All shares
that shall be delivered in payment of a Performance Share Unit Award shall be
fully paid and nonassessable. Until the certificate or certificates have been
issued as aforesaid, the Participant shall possess no rights of a record holder
with respect to any such shares.
10. The Company will seek to obtain from each regulatory commission or agency
having jurisdiction such authority as may be required to issue the shares of
stock in payment of Performance Share Unit Awards. Inability of the Company to
obtain from any such regulatory commission or agency authority which counsel for
the Company deems necessary for the lawful issuance of its stock shall relieve
the Company from any liability for failure to issue stock in payment of
Performance Share Unit Awards pending the time when such authority is obtained
or is obtainable.
11. By accepting the Performance Share Units, Participant acknowledges that: (i)
the Plan is discretionary in nature and may be amended, suspended or terminated
by the Company at any time; (ii) the grant of Performance Share Units is a
one-time benefit which does not create any contractual or other right to receive
future grants of Performance Share Units, or benefits in lieu of Performance
Share Units; (iii) all determinations with respect to any such future grants,
including, but not limited to, the times when Performance Share Units shall be
granted and the number of Performance Share Units, will be at the sole
discretion of the Company and the Committee; (iv) the Participant's receipt of
this Performance Share Unit shall not create a right to further employment with
the Company and shall not interfere with the ability of the Company to terminate
the Participant's employment relationship at any time with or without cause; (v)
the Participant's participation in the Plan is voluntary; (vi) the value of the
Performance Share Unit is an extraordinary item of compensation which is outside
the scope of the Participant's employment contract, if any; (vii) the
Performance Share Unit is not part of normal or expected compensation for
purposes of calculating any severance, resignation, redundancy, end of service
payments, bonuses, long-service awards, pension or retirement benefits or
similar payments; and (viii) the future value of the underlying shares is
unknown and cannot be predicted with certainty.
12. For Participants employed at international locations: The Company and/or the
Participant's employer will assess its requirements regarding tax, social
insurance and any other payroll tax (Tax-Related Items") withholding and
reporting in connection with the Performance Share Unit. These requirements may
change from time to time as laws or interpretations change. Regardless of the
actions of the Company and/or the Participant's employer in this regard, the
Participant hereby acknowledges and agrees that the ultimate liability for any
and all Tax-Related Items is and remains his or her responsibility and liability
and that the Company and/or the Participant's employer (i) makes no
representations nor undertakings regarding treatment of any Tax-Related Items in
connection with any aspect of the grant of Performance Share Units; and (ii)
does not commit to structure the terms of the grant or any aspect of the
Performance Share Unit to reduce or eliminate the Participant's liability
regarding Tax-Related Items. In the event that the Company and/or the
Participant's employer must withhold any Tax-Related Items as a result of the
Performance Share Unit, the Participant agrees to make arrangements satisfactory
to the Company and/or the Participant's employer to satisfy all withholding
requirements. The Participant authorizes the Company and/or the Participant's
employer to withhold all applicable Tax-Related Items legally due from the
Participant from his or her wages or other cash compensation paid him or her by
the Company and/or the Participant's employer.
13. As a condition of the grant of the Performance Share Unit, the Participant
consents to the collection, use and transfer of personal data as described in
this Paragraph 13. The Participant understands that the Company and its
subsidiaries hold certain personal information about the Participant, including
the Participant's name, home address and telephone number, date of birth, social
security number or identification number, salary, nationality, job title, any
shares of stock or directorships held in the Company, details of all Performance
Share Units or any other entitlement to shares of stock awarded, cancelled,
exercised, vested, unvested or outstanding in the Participant's favor, for the
purpose of managing and administering the Plan ("Data"). The Participant further
understands that the Company and/or its subsidiaries will transfer Data amongst
themselves as necessary for the purpose of implementation, administration and
management of the Participant's participation in the Plan, and that the Company
and/or any of its subsidiaries may each further transfer Data to any third
parties assisting the Company in the implementation, administration and
management of the Plan. The Participant understands that these recipients may be
located in the European Economic Area, or elsewhere, such as the United States.
The Participant authorizes them to receive, possess, use, retain and transfer
the Data, in electronic or other form, for the purposes of implementing,
administering and managing the Participant's participation in the Plan,
including any requisite transfer to a broker or other third party with whom the
Participant may elect to deposit any shares of stock acquired upon payment of a
Performance Share Unit, such Data as may be required for the administration of
the Plan and/or the subsequent holding of shares of stock on his or her behalf.
The Participant understands that he or she may, at any time, view Data, require
any necessary amendments to it or withdraw the consents herein in writing by
contacting his or her local Human Resources representative. Withdrawal of
consent may, however, affect Participant's ability to exercise or realize
benefits from the Performance Share Unit.
14. Capitalized Terms not defined herein or in the Notice of Grant of
Performance Share Unit and Agreement shall have the meaning ascribed to them in
the Plan. Moreover, as used in this Agreement, the following specific terms
shall have the meanings set forth in this Paragraph 14:
(c) "subsidiary": any corporation in which the Company controls, directly
or indirectly, 50% or more of the combined voting power of all classes
of stock;
(d) "continuous employment": the absence of any interruption or
termination of employment by the Company or any of its subsidiaries.
Employment shall not be considered interrupted in the case of
transfers between payroll locations of the Company and/or its
subsidiaries, or in the case of sick leave or any other leave of
absence approved by the Company;
15. This Agreement shall be governed by the laws of the State of California.
16. Performance Share Units are granted pursuant to the Company's 2005 Executive
Officer Equity Plan (the "Plan"), a copy of which is available in electronic
form on the Company's Human Resources website or in hard copy from the Stock
Administration department and by reference incorporated herein. In the event of
any inconsistency between the terms hereof and the provisions of the Plan, the
Plan shall govern.