This excerpt taken from the HPQ 8-K filed Nov 23, 2005.
EDCP and does not select his or her means of payment in Section VII(A)(1) above within the prescribed time, then such Non-Employee Director shall not be permitted to participate in the EDCP for the applicable Plan Year.
B. Common Stock Payment.
1. Date of Payment. The shares constituting any Common Stock Payment shall be issued automatically one month after the beginning of each Plan Year (or, if such date is not a business day, on the next succeeding business day) (the Grant Date), with the first payment under this Plan commencing March 1, 1997. Each award of a Common Stock Payment shall be evidenced by an agreement which shall reflect the terms and conditions of the Common Stock Payment and such additional terms and conditions as may be determined by the Board or the Committee.
2. Number of Shares Subject to Common Stock Payment. The total number of shares of Common Stock included in each Common Stock Payment shall be determined by dividing the amount of the Annual Retainer that is to be paid in stock by the Fair Market Value (as defined in Section XII below) of a share of Common Stock on the Grant Date. It shall be rounded up to the largest number of whole shares determined as follows:
Any payment for a fractional share automatically shall be paid in cash based upon the Fair Market Value on the Grant Date of such fractional share.
3. Holding Period for Common Stock Payment Shares. If the Committee does not expressly exercise its discretion to change the vesting of the Common Stock Payment for a Plan Year, then the vesting of such Common Stock Payment shall be the same as the last Plan Year in which the Committee exercised its discretion. The shares of Common Stock included in each Common Stock Payment shall be deposited in certificate or book entry form in escrow with HPs Secretary until such shares vest. The Non-Employee Director shall retain all rights in the shares while they are held in escrow, including, but not limited to, voting rights and the right to receive dividends; provided, however, that the Non-Employee Director shall not have the right to pledge, sell or otherwise assign such shares until all restrictions pertaining to such shares are terminated. Promptly after the shares vest, HPs Secretary shall release the shares from escrow and deliver any applicable stock certificates to the Non-Employee Director or release any applicable restrictions on the Non-Employee Directors book entry account.
C. Option Payment.
Subject to Section VII.A. above, each Non-Employee Director may specify the amount of his Annual Retainer to be received in the form of a non-statutory option not entitled to special tax treatment under Section 422 of the Internal Revenue Code of 1986, as amended. Each option granted under this Plan shall be evidenced by a written agreement in such form as the Board or Committee shall from time to time approve, which Agreements shall comply with and be subject to the following terms and conditions and such additional terms and conditions as may be determined by the Board or Committee: