Common use of Vesting; Expiration of Restrictions Clause in Contracts

Vesting; Expiration of Restrictions. (i) Subject to the limitations contained in subparagraphs (c)(ii), (c)(iii) and (c)(iv) below, the Restricted Stock shall vest, and the Restrictions shall expire (such vesting and expiration and lapse of Restrictions, the “Vesting”): (1) For all shares of Restricted Stock granted in respect of Tendered Options that would have been vested through December 31, 2002, had such Tendered Options not been exchanged for Restricted Stock (the “Vested Options”), in equal installments on February 15, 2003 (the “First Installment Date”), May 15, 2003 (the “Second Installment Date”), August 15, 2003 (the “Third Installment Date”), November 15, 2003 (the “Fourth Installment Date”), February 15, 2004 (the “Fifth Installment Date”) and March 15, 2004 (the “Sixth Installment Date”). The First, Second, Third, Fourth, Fifth and Sixth Installment Dates are collectively referred to as the “Installment Dates” or individually as the “Installment Date.” (2) All shares of Restricted Stock granted in respect of Tendered Options that are not Vested Options and would have vested as of December 31, 2003 if such Tendered Options had not been exchanged for Restricted Stock (the “2003 Options”), shall vest, and the Restrictions thereon shall expire and lapse, over the same number of quarters of 2004 over which such 2003 Options would have vested had the 2003 Options not been exchanged, and the vesting dates for each applicable quarter shall be on the Fifth Installment Date, the Sixth Installment Date and on August 15, 2004 and November 15, 2004. (3) All shares of Restricted Stock granted in respect of Tendered Options that are neither Vested Options nor 2003 Options and which would have fully vested during 2004 (the “2004 Options”) had such 2004 Options not been exchanged for Registered Stock shall vest, and the Restrictions thereon shall expire and lapse, in equal installments on the Fifth Installment Date, the Sixth Installment Date and on the 15th of August 15, 2004 and November 15, 2004. (4) All shares of Restricted Stock granted in respect of Tendered Options other than Vested Options, the 2003 Options or the 2004 Options and which would have fully vested during 2005 (the “2005 Options”) shall vest, and the Restrictions thereon shall expire and lapse, in equal installments on the 15th of each February, May, August and November, starting in 2005, over the duration of the remaining original vesting period of the exchanged or cancelled 2005 Options, such that the Restricted Stock exchanged for 2005 Options will be fully vested as of the date such 2005 Options would have been fully vested if such 2005 Options were not exchanged or cancelled. (ii) The portion of Restricted Stock subject to Vesting on each Installment Date (the “Conditional Vesting Amount”), shall so Vest only if the “Target EPS Goals” or “Cumulative EPS Goals” (as each such term is defined below) have been met by the Company for each such Installment Date. (iii) In the event that the Target EPS Goals are not met by the Company for an Installment Date, the Conditional Vesting Amount subject to Vesting on such date shall not Vest, and such amount shall be carried forward to the next Installment Date (“Carried Forward Portion”). Any Carried Forward Portion carried over to another Installment Period shall vest in such Installment Period only if the Cumulative EPS Goals have been met for such Installment Period. All such Carried Forward Portions may continue to be carried forward until the Sixth Installment Date. (iv) In the event that the Target EPS Goals are not met by the Company for the Sixth Installment Date, the Conditional Vesting Amount subject to Vesting on such date, and the Conditional Vesting Amount carried over from any other prior Installment Date, shall not Vest and such Restricted Stock shall be returned to the Company for cancellation. (v) No fractional share shall vest at any time, and any fractional shares that are not vested as of the final vesting installment shall be combined and shall vest at that time. (vi) Notwithstanding the foregoing, and provided the Restricted Stock has not been forfeited pursuant to Section 2(c) of this Agreement, in the event of a Change in Control, as defined in the Plan, the vesting of the Restricted Stock shall be automatically accelerated immediately prior to the Change in Control such that the Restricted Stock will be vested to the same extent as the Restricted Stock would have been vested (in the absence of a Change in Control) as of the date one (1) year following the date of the Change in Control. (vii) As set forth above, the Vesting of the Restricted Stock granted in respect of Tendered Options shall be subject to the Company meeting earnings per share goals (as defined below, the “Target EPS Goals” or the “Cumulative EPS Goals,” together, the “EPS Goals”) for each respective Installment Date, as set forth in the chart below. The EPS Goals shall be calculated by the Board of Directors based on the total earnings of the Company (excluding expenses associated with: (i) purchased in process research and development; (ii) stock-based compensation expenses; (iii) amortization of acquired intangible assets; (iv) integration related charges; (v) restructuring charges; and (vi) other one time charges) divided by the number of shares then outstanding (as reported in the latest public filing of the Company with the Securities and Exchange Commission in the Company’s Quarterly Report on Form 10-Q, or Annual Report on Form 10-K).