VMware 2010 Annual Report Download - page 124

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(i) Options . The Committee is authorized to grant Options to Grantees on the following terms and conditions:
(A) The Award Terms evidencing the grant of an Option under the Plan shall designate the Option as an ISO or an
NQSO.
(B) The exercise price per share of Stock purchasable under an Option shall be determined by the Committee, but in no
event shall the exercise price of an Option per share of Stock be less than the Fair Market Value of a share of Stock as of the date of grant of
such Option. The purchase price of Stock as to which an Option is exercised shall be paid in full at the time of exercise; payment may be made in
cash, which may be paid by check, or other instrument acceptable to the Company, or, with the consent of the Committee, in shares of Stock,
valued at the Fair Market Value on the date of exercise (including shares of Stock that otherwise would be distributed to the Grantee upon
exercise of the Option), or if there were no sales on such date, on the next preceding day on which there were sales or (if permitted by the
Committee and subject to such terms and conditions as it may determine) by surrender of outstanding Awards under the Plan, or the Committee
may permit such payment of exercise price by any other method it deems satisfactory in its discretion. In addition, subject to applicable law and
pursuant to procedures approved by the Committee, payment of the exercise price may be made pursuant to a broker-assisted cashless exercise
procedure. Any amount necessary to satisfy applicable federal, state or local tax withholding requirements shall be paid promptly upon
notification of the amount due. The Committee may permit the minimum amount of tax withholding to be paid in shares of Stock previously
owned by the employee, or a portion of the shares of Stock that otherwise would be distributed to such employee upon exercise of the Option, or
a combination of cash and shares of such Stock.
(C) Options shall be exercisable over the exercise period (which shall not exceed ten years from the date of grant), at
such times and upon such conditions as the Committee may determine, as reflected in the Award Terms; provided that, the Committee shall have
the authority to accelerate the exercisability of any outstanding Option at such time and under such circumstances as it, in its sole discretion,
deems appropriate.
(D) Upon the termination of a Grantee’s employment or service with the Company and its Subsidiaries or Affiliates, the
Options granted to such Grantee, to the extent that they are exercisable at the time of such termination, shall remain exercisable for such period
as may be provided in the applicable Award Terms, but in no event following the expiration of their term. The treatment of any Option that is
unexercisable as of the date of such termination shall be as set forth in the applicable Award Terms.
(E) Options may be subject to such other conditions, as the Committee may prescribe in its discretion or as may be
required by applicable law.
(F) Notwithstanding anything to the contrary herein, grants of Options may be made hereunder which have the terms
and conditions set forth in the Exchange Offer.
7