VMware 2007 Annual Report Download - page 102

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Section 4. Method of Participation
Generally
The periods January 1 to June 30 and July 1 to December 31 of each year shall be option periods. Each person who will be an eligible
employee on the first day of any option period may elect to participate in the Plan by executing and delivering, at least one business day prior to
such day, a payroll deduction authorization in accordance with Section 5. Such employee shall thereby become a participant (“participant”) on
the first day of such option period and shall remain a participant until his or her participation is terminated as provided in the Plan.
First Option Period
The first option period under the Plan will commence on the day on which VMware’s Form S-1 Registration Statement is declared
effective by the Securities and Exchange Commission and will end on December 31, 2007. Any individual who is an eligible employee
immediately prior to the first option period shall be automatically enrolled in the first option period at an amount equal to 2% of his or her
compensation. A participant in the first option period shall make payment for the purchase of shares by (A) making a lump sum cash payment to
the Company via check on or prior to December 31, 2007 for the amount of the purchase price for the shares being purchased (after which date
an participant wishing to continue participation in the Plan must participate on a payroll deduction basis unless the participant withdraws from
the Plan under Section 10), or (B) electing, after the effective date of the Form S-8 for the issuance of stock under the Plan, to have amounts
directly withheld from the participant’s compensation pursuant to Section 5 (which percentage need not equal the amount specified above).
To the extent that a participant purchases shares in respect of the first option period by delivering a check to the Company, such delivery
and purchase shall operate, unless the participant withdraws from the Plan pursuant to Section 10, as an election by the participant to continue
participating in the Plan on the payroll deduction basis described in Section 5 and the Company shall withhold from the participant’s
compensation beginning with the next option period at a contribution rate equal to the ratio that the aggregate purchase price paid for shares
purchased bears to the participant’s total compensation during the first option period (which rate shall not exceed the percentage specified in
Section 5).
Section 5. Payroll Deductions
The payroll deduction authorization shall request withholding, at a rate of not less than 2% nor more than 15% from the participant’s
compensation (subject to a maximum of $7,500 per option period), by means of substantially equal payroll deductions over the option period;
provided , however , that in the event any amount
2