VMware 2012 Annual Report Download - page 122

the Plan or the applicable Award Terms or to interfere with or limit in any way the right of the Company or any such
Subsidiary or Affiliate to terminate such Grantee’s employment or service.
(d)
Cancellation and Rescission of Awards . The following provisions of this Section 7(d) applies to
Awards granted to (i) Grantees who are classified by the Company or a Subsidiary as an executive officer, senior officer,
or officer (collectively, “Officers”) of the Company or a Subsidiary, (ii) Grantees who are non-employee directors of the
Company, and (iii) certain other Grantees designated by the Committee or the Board to be subject to the terms of this
Section 7(d) (such designated Grantees together with Officers and non-employee directors are referred to collectively as
“Senior Grantees”). The Committee or the Board, in its sole discretion, may cancel, rescind, forfeit, suspend or
otherwise limit or restrict any unexpired Award at any time if the Senior Grantee engages in “Detrimental Activity” (as
defined below). Furthermore, in the event a Senior Grantee engages in Detrimental Activity at any time prior to or
during the six months after any exercise of an Award, lapse of a restriction under an Award or delivery of Common
Stock pursuant to an Award, such exercise, lapse or delivery may be rescinded until the later of (i) two years after such
exercise, lapse or delivery or (ii) two years after such Detrimental Activity. Upon such rescission, the Company at its
sole option may require the Senior Grantee to (i) deliver and transfer to the Company the shares of Stock received by the
Senior Grantee upon such exercise, lapse or delivery, (ii) pay to the Company an amount equal to any realized gain
received by the Senior Grantee from such exercise, lapse or delivery, (iii) pay to the Company an amount equal to the
market price (as of the exercise, lapse or delivery date) of the Stock acquired upon such exercise, lapse or delivery minus
the respective price paid upon exercise, lapse or delivery, if applicable or (iv) pay the Company an amount equal to any
cash awarded with respect to an Award. The Company will be entitled to set-off any such amount owed to the Company
against any amount owed to the Senior Grantee by the Company. Further, if the Company commences an action against
such Senior Grantee (by way of claim or counterclaim and including declaratory claims), in which it is preliminarily or
finally determined that such Senior Grantee engaged in Detrimental Activity or otherwise violated this Section 7(d), the
Senior Grantee must reimburse the Company for all costs and fees incurred in such action, including but not limited to,
the Company’s reasonable attorneys’ fees. As used in this Section 7(d), “Detrimental Activity”
includes: (i) the failure to
comply with the terms of the Plan or Award Terms; (ii) the failure to comply with any term set forth in the Company’s
Key Employee Agreement (irrespective of whether the Senior Grantee is a party to the Key Employee Agreement); (iii)
any activity that results in termination of the Senior Grantee’
s employment for Cause; (iv) a violation of any rule, policy,
procedure or guideline of the Company; or (v) the Senior Grantee being convicted of, or entering a guilty plea with
respect to a crime whether or not connected with the Company.
(e)
Taxes . The Company, any Subsidiary and any Affiliate is authorized to withhold from any Award
granted, any payment relating to an Award under the Plan, including from a distribution of Stock, or any other payment
to a Grantee, amounts of withholding and other taxes due in connection with any transaction involving an Award, and to
take such other action as the Committee may deem advisable to enable the Company and Grantees to satisfy obligations
for the payment of withholding taxes and other tax obligations relating to any Award. This authority includes authority
to withhold or receive Stock or other property and to make cash
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