Attached files
file | filename |
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10-Q - FORM 10-Q - CONEXANT SYSTEMS INC | a56035e10vq.htm |
EX-32 - EX-32 - CONEXANT SYSTEMS INC | a56035exv32.htm |
EX-10.6 - EX-10.6 - CONEXANT SYSTEMS INC | a56035exv10w6.htm |
EX-31.2 - EX-31.2 - CONEXANT SYSTEMS INC | a56035exv31w2.htm |
EX-31.1 - EX-31.1 - CONEXANT SYSTEMS INC | a56035exv31w1.htm |
EX-10.3 - EX-10.3 - CONEXANT SYSTEMS INC | a56035exv10w3.htm |
EX-10.1.1 - EX-10.1.1 - CONEXANT SYSTEMS INC | a56035exv10w1w1.htm |
EX-10.6.5 - EX-10.6.5 - CONEXANT SYSTEMS INC | a56035exv10w6w5.htm |
EX-10.6.2 - EX-10.6.2 - CONEXANT SYSTEMS INC | a56035exv10w6w2.htm |
EX-10.1.3 - EX-10.1.3 - CONEXANT SYSTEMS INC | a56035exv10w1w3.htm |
EX-10.1.2 - EX-10.1.2 - CONEXANT SYSTEMS INC | a56035exv10w1w2.htm |
EX-10.6.3 - EX-10.6.3 - CONEXANT SYSTEMS INC | a56035exv10w6w3.htm |
EX-10.6.4 - EX-10.6.4 - CONEXANT SYSTEMS INC | a56035exv10w6w4.htm |
EX-10.6.1 - EX-10.6.1 - CONEXANT SYSTEMS INC | a56035exv10w6w1.htm |
EX-10.3.1 - EX-10.3.1 - CONEXANT SYSTEMS INC | a56035exv10w3w1.htm |
Exhibit 10.2
CONEXANT SYSTEMS, INC.
2004 NEW-HIRE EQUITY INCENTIVE PLAN
ADOPTED: FEBRUARY 6, 2004
AMENDED: FEBRUARY 18, 2010
AMENDED: FEBRUARY 18, 2010
1. PURPOSES.
(a) GENERAL PURPOSE. The Company, by means of the Plan, seeks to
retain the services of persons not previously an employee or director of the
Company, or following a bona fide period of non-employment, as an inducement
material to the individuals entering into employment with the Company within
the meaning of Rule 4350(i)(1)(A) of the NASD Marketplace Rules, and to provide
incentives for such persons to exert maximum efforts for the success of the
Company and its Affiliates.
(b) ELIGIBLE STOCK AWARD RECIPIENTS. The persons eligible to
receive Stock Awards are the Employees of the Company and its Affiliates.
(c) AVAILABLE STOCK AWARDS. The purpose of the Plan is to provide
a means by which eligible recipients of Stock Awards may be given an opportunity
to benefit from increases in value of the Common Stock through the granting of
the following Stock Awards: (i) Options, (ii) Restricted Stock Awards, (iii)
Stock Appreciation Rights (iv) Phantom Stock Awards and (v) Other Stock Awards.
2. DEFINITIONS.
(a) AFFILIATE means any parent corporation or subsidiary
corporation of the Company, whether now or hereafter existing, as those terms
are defined in Sections 424(e) and (f), respectively, of the Code.
(b) BOARD means the Board of Directors of the Company.
(c) CAPITALIZATION ADJUSTMENT has the meaning ascribed to that
term in Section 11(a).
(b) CAUSE means, with respect to a particular Participant (i) a
felony conviction of such Participant; (ii) the commission by such Participant
of an act of fraud or embezzlement against the Company or an Affiliate; (iii)
such Participants willful misconduct or gross negligence materially detrimental
to the Company or an Affiliate; (iv) such Participants continued failure to
implement reasonable requests or directions received in the course of his
service as an Employee; (v) such Participants wrongful dissemination or use of
confidential or proprietary information; or (vi) the intentional and habitual
neglect by such Participant of his or her duties to the Company or an Affiliate.
(e) CHANGE IN CONTROL means such event as is defined in Article
III, Section 13(I)(1) of the Companys By-Laws, as amended from time to time.
(f) CODE means the Internal Revenue Code of 1986, as amended.
(g) COMMITTEE means the Compensation and Management Development
Committee of the Board of Directors as it may be comprised from time to time or
such other Committee of the Board of Directors designated by the Board of
Directors to administer the Plan.
(h) COMMON STOCK means the common stock of the Company, or any
security of the Company issued in substitution, exchange or lieu thereof.
(i) COMPANY means Conexant Systems, Inc., a Delaware
corporation, or any successor corporation.
(j) CONSULTANT means any person, including an advisor, (i)
engaged by the Company or an Affiliate to render consulting or advisory services
and who is compensated for such services or (ii) serving as a member of the
Board of Directors of an Affiliate and who is compensated for such services.
However, the term Consultant shall not include Directors who are not
compensated by the Company for their services as Directors, and the payment of a
directors fee by the Company for services as a Director shall not cause a
Director to be considered a Consultant for purposes of the Plan.
(k) CONTINUOUS SERVICE means that the Participants service with
the Company or an Affiliate, whether as an Employee, Director or Consultant, is
not interrupted or terminated. A change in the capacity in which the Participant
renders service to the Company or an Affiliate as an Employee, Consultant or
Director or a change in the entity for which the Participant renders such
service, provided that there is no interruption or termination of the
Participants service with the Company or an Affiliate, shall not terminate a
Participants Continuous Service. For example, a change in status from an
Employee of the Company to a Consultant of an Affiliate or a Director shall not
constitute an interruption of Continuous Service. The Board or the chief
executive officer of the Company, in that partys sole discretion, may determine
whether Continuous Service shall be considered interrupted in the case of any
leave of absence approved by that party, including sick leave, military leave or
any other personal leave. Notwithstanding the foregoing, an approved leave of
absence shall be treated as Continuous Service for purposes of vesting in a
Stock Award only to such extent as may be provided in the Companys leave of
absence policy or in the written terms of the Participants leave of absence.
(l) CORPORATE TRANSACTION means the occurrence, in a single
transaction or in a series of related transactions, of any one or more of the
following events:
(i) a sale or other disposition of all or substantially
all, as determined by the Board in its discretion, of the consolidated assets of
the Company and its Subsidiaries;
(ii) a sale or other disposition of at least ninety
percent (90%) of the outstanding securities of the Company;
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(iii) a merger, consolidation or similar transaction
following which the Company is not the surviving corporation; or
(iv) a merger, consolidation or similar transaction
following which the Company is the surviving corporation but the shares of
Common Stock outstanding immediately preceding the merger, consolidation or
similar transaction are converted or exchanged by virtue of the merger,
consolidation or similar transaction into other property, whether in the form of
securities, cash or otherwise.
(m) DIRECTOR means a member of the Board of Directors of the
Company.
(n) DISABILITY means, with respect to a Participant, such
Participants permanent and total disability within the meaning of the Companys
long-term disability plan, as it may be amended from time to time, or, if there
is no such plan, as determined by the Committee.
(o) EMPLOYEE means any person employed by the Company or an
Affiliate. Service as a Director or payment of a directors fee by the Company
or an Affiliate shall not be sufficient to constitute employment by the
Company or an Affiliate. Subject to the exclusions set forth below, the term
Employee shall include only an individual who was hired (and advised that he
or she was being hired) directly by the Company or an Affiliate as a regular
employee and who performs regular employment services directly for the Company
or an Affiliate. Exclusions: The term Employee as used in the Plan shall not
include an individual who works, or who was hired to work, or who was advised
that he or she works: (1) as an independent contractor or an employee of an
independent contractor; or (2) as a temporary employee, regardless of the length
of time that he or she works at the Company or an Affiliate; or (3) through a
temporary employment agency, job placement agency, or other third party; or (4)
as part of an employee leasing arrangement between the Company or an Affiliate
and any third party, unless the Company determines that such individual has to
be permitted to participate in the Plan pursuant to local laws. For the purposes
of the Plan, the exclusions described above shall remain in effect even if the
described individual could otherwise be construed as an employee under any
applicable common law or is subsequently determined under applicable laws to be
an employee.
(p) ENTITY means a corporation, partnership or other entity.
(q) EXCHANGE ACT means the Securities Exchange Act of 1934, as
amended.
(r) EXCHANGE ACT PERSON means any natural person, Entity or
group (within the meaning of Section 13(d) or 14(d) of the Exchange Act),
except that Exchange Act Person shall not include (A) the Company or any
Subsidiary of the Company, (B) any employee benefit plan of the Company or any
Subsidiary of the Company or any trustee or other fiduciary holding securities
under an employee benefit plan of the Company or any Subsidiary of the Company,
(C) an underwriter temporarily holding securities pursuant to an offering of
such securities, or (D) an Entity Owned, directly or indirectly, by the
shareowners of the Company in substantially the same proportions as their
Ownership of stock of the Company.
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(s) FAIR MARKET VALUE means, as of any date, the value of the
Common Stock determined as follows:
(i) If the Common Stock is listed on any established
stock exchange or traded on the Nasdaq National Market or the Nasdaq SmallCap
Market, the Fair Market Value of a share of Common Stock shall be the closing
sales price for such stock (or the closing bid, if no sales were reported) as
quoted on such exchange or market (or the exchange or market with the greatest
volume of trading in the Common Stock) on the relevant date or, if no shares are
traded on such date, then on the last market trading day prior to the relevant
date.
(ii) In the absence of such markets for the Common Stock,
the Fair Market Value shall be determined in good faith by the Board.
(t) NON-EMPLOYEE DIRECTOR means a Director who either (i) is not
a current Employee or Officer of the Company or its parent or a subsidiary, does
not receive compensation, either directly or indirectly, from the Company or its
parent or a subsidiary, for services rendered as a consultant or in any capacity
other than as a Director (except for an amount as to which disclosure would not
be required under Item 404(a) of Regulation S-K promulgated pursuant to the
Securities Act (Regulation S-K)), does not possess an interest in any other
transaction for which disclosure would be required under Item 404(a) of
Regulation S-K and is not engaged in a business relationship for which
disclosure would be required pursuant to Item 404(b) of Regulation S-K; or (ii)
is otherwise considered a non-employee director for purposes of Rule 16b-3.
(u) OFFICER means a person who is an officer of the Company
within the meaning of Section 16 of the Exchange Act and the rules and
regulations promulgated thereunder.
(v) OPTION means a nonstatutory stock option granted pursuant to
the Plan that is not intended to qualify as an incentive stock option under
Section 422 of the Code and the regulations promulgated thereunder.
(w) OPTION AGREEMENT means an agreement between the Company and
an Optionholder evidencing the terms and conditions of an individual Option
grant. Each Option Agreement shall be subject to the terms and conditions of the
Plan.
(x) OPTIONHOLDER means a person to whom an Option is granted
pursuant to the Plan or, if applicable, such other person who holds an
outstanding Option.
(y) OTHER STOCK AWARD means an award based in whole or in part
by reference to the Common Stock which is granted pursuant to the terms and
conditions of Section 7(d).
(z) OTHER STOCK AWARD AGREEMENT means an agreement between the
Company and a holder of an Other Stock Award evidencing the terms and conditions
of an individual Other Stock Award grant. Each Other Stock Award Agreement shall
be subject to the terms and conditions of the Plan.
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(aa) OWN, OWNED, OWNER, OWNERSHIP A person or Entity shall
be deemed to Own, to have Owned, to be the Owner of, or to have acquired
Ownership of securities if such person or Entity, directly or indirectly,
through any contract, arrangement, understanding, relationship or otherwise, has
or shares voting power, which includes the power to vote or to direct the
voting, with respect to such securities.
(bb) PARTICIPANT means a person to whom a Stock Award is granted
pursuant to the Plan or, if applicable, such other person who holds an
outstanding Stock Award.
(cc) PHANTOM STOCK AWARD means a right to receive shares of
Common Stock which is granted pursuant to the terms and conditions of Section
7(b).
(dd) PHANTOM STOCK AWARD AGREEMENT means an agreement between the
Company and a holder of a Phantom Stock Award evidencing the terms and
conditions of an individual Phantom Stock Award grant. Each Phantom Stock Award
Agreement shall be subject to the terms and conditions of the Plan.
(ee) PLAN means this Conexant Systems, Inc. 2004 New-Hire Equity
Incentive Plan.
(ff) RESTRICTED STOCK AWARD means an award of shares of Common
Stock which is granted pursuant to the terms and conditions of Section 7(a).
(gg) RESTRICTED STOCK AWARD AGREEMENT means an agreement between
the Company and a holder of a Restricted Stock Award evidencing the terms and
conditions of an individual Restricted Stock Award grant. Each Restricted Stock
Award Agreement shall be subject to the terms and conditions of the Plan.
(hh) RULE 16b-3 means Rule 16b-3 promulgated under the Exchange
Act or any successor to Rule 16b-3, as in effect from time to time.
(ii) SECURITIES ACT means the Securities Act of 1933, as amended.
(jj) STOCK APPRECIATION RIGHT means a right to receive the
appreciation of Common Stock that is granted pursuant to the terms and
conditions of Section 7(c).
(kk) STOCK APPRECIATION RIGHT AGREEMENT means an agreement
between the Company and a holder of a Stock Appreciation Right evidencing the
terms and conditions of an individual Stock Appreciation Right grant. Each Stock
Appreciation Right Agreement shall be subject to the terms and conditions of the
Plan.
(ll) STOCK AWARD means any right granted under the Plan,
including an Option, a Restricted Stock Award, Phantom Stock, a Stock
Appreciation Right and an Other Stock Award.
(mm) STOCK AWARD AGREEMENT means an agreement between the Company
and a holder of a Stock Award evidencing the terms and conditions of an
individual Stock Award grant. Each Stock Award Agreement shall be subject to the
terms and conditions of the Plan.
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(nn) SUBSIDIARY means, with respect to the Company, (i) any
corporation of which more than fifty percent (50%) of the outstanding capital
stock having ordinary voting power to elect a majority of the board of directors
of such corporation (irrespective of whether, at the time, stock of any other
class or classes of such corporation shall have or might have voting power by
reason of the happening of any contingency) is at the time, directly or
indirectly, Owned by the Company, and (ii) any partnership in which the Company
has a direct or indirect interest (whether in the form of voting or
participation in profits or capital contribution) of more than fifty percent
(50%).
3. ADMINISTRATION.
(a) ADMINISTRATION BY BOARD. The Board shall administer the Plan
unless and until the Board delegates administration to a committee, as provided
in Section 3(c).
(b) POWERS OF BOARD. The Board shall have the power, subject to,
and within the limitations of, the express provisions of the Plan:
(i) Subject to Section 5 herein, to determine from time
to time which of the persons eligible under the Plan shall be granted Stock
Awards; when and how each Stock Award shall be granted; what type or combination
of types of Stock Award shall be granted; the provisions of each Stock Award
granted (which need not be identical), including the time or times when a person
shall be permitted to receive Common Stock pursuant to a Stock Award; and the
number of shares of Common Stock with respect to which a Stock Award shall be
granted to each such person.
(ii) To construe and interpret the Plan and Stock Awards
granted under it, and to establish, amend and revoke rules and regulations for
its administration. The Board, in the exercise of this power, may correct any
defect, omission or inconsistency in the Plan or in any Stock Award Agreement,
in a manner and to the extent it shall deem necessary or expedient to make the
Plan fully effective.
(iii) To amend the Plan or a Stock Award as provided in
Section 12.
(iv) To terminate or suspend the Plan as provided in
Section 13.
(v) Generally, to exercise such powers and to perform
such acts as the Board deems necessary or expedient to promote the best
interests of the Company and that are not in conflict with the provisions of the
Plan.
(vi) To adopt such procedures and sub-plans as are
necessary or appropriate to permit or facilitate participation in the Plan by
employees who are foreign nationals or employed outside the United States.
(c) DELEGATION TO COMMITTEE.
(i) GENERAL. The Plan shall initially be administered by
the Committee. The Committee shall have, in connection with the administration
of the Plan, the powers possessed by
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the Board, including the power to delegate to a subcommittee any of the
administrative powers the Committee is authorized to exercise (and references in
this Plan to the Board shall thereafter be to the Committee or subcommittee),
subject, however, to such resolutions, not inconsistent with the provisions of
the Plan, as may be adopted from time to time by the Board. The Board may
delegate administration of the Plan to a different committee or committees of
one (1) or more members of the Board, and the term committee shall apply to
any person or persons to whom such authority has been delegated. The Board may
retain the power to jointly administer the Plan with the Committee or may
abolish the Committee at any time and revest in the Board the administration of
the Plan.
(ii) RULE 16b-3 COMPLIANCE. In the discretion of the
Board, the Committee may consist solely of two or more Non-Employee Directors,
in accordance with Rule 16b-3.
(d) EFFECT OF BOARDS DECISION. All determinations,
interpretations and constructions made by the Board in good faith shall not be
subject to review by any person and shall be final, binding and conclusive on
all persons.
4. SHARES SUBJECT TO THE PLAN.
(a) SHARE RESERVE. Subject to the provisions of Section 11(a)
relating to Capitalization Adjustments, the shares of Common Stock that may be
issued pursuant to Stock Awards shall not exceed in the aggregate twelve million
(12,000,000) shares of Common Stock, plus an annual increase, if any, to be
added on the first day of the fiscal year of the Company for a period of ten
(10) years, commencing on the first day of the fiscal year that begins in 2004
and ending on (and including) the first day of the fiscal year that begins in
2013. Such annual increase, if any, shall equal such number of shares as would
cause the total shares of Common Stock then available for issuance under the
Plan to equal ten million (10,000,000) shares. Notwithstanding the foregoing,
the Board may act, prior to the first day of any fiscal year of the Company and
in lieu of the automatic increase described in the prior sentence, to increase
the share reserve by such number of shares of Common Stock as the Board shall
determine, which number shall be less than the number of shares described above.
Notwithstanding the foregoing, on and after February 18, 2010, the annual increase
described in this Section 4(a) shall no longer be effective.
(b) REVERSION OF SHARES TO THE SHARE RESERVE. If any Stock Award
shall for any reason expire or otherwise terminate, in whole or in part, without
having been exercised in full, or if any shares of Common Stock issued to a
Participant pursuant to a Stock Award are forfeited back to or repurchased by
the Company, including, but not limited to, any repurchase or forfeiture caused
by the failure to meet a contingency or condition required for the vesting of
such shares, then the shares of Common Stock not acquired under such Stock
Award, or forfeited back to or repurchase by the Company, shall revert to and
again become available for issuance under the Plan. If any shares subject to a
Stock Award are not delivered to a Participant because such shares are withheld
for the payment of taxes or the Stock Award is exercised through a reduction of
shares subject to the Stock Award (i.e., net exercised), then the number of
shares that are not delivered to the Participant as a result thereof shall
revert to and again become available for issuance under the Plan. If the
exercise price of any Stock Award is satisfied by tendering shares of Common
Stock held by the Participant (either by actual delivery or
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attestation), then the number of shares so tendered shall revert to and again
become available for issuance under the Plan.
(c) SOURCE OF SHARES. The shares of Common Stock subject to the
Plan may be unissued shares or reacquired shares, bought on the market or
otherwise.
5. ELIGIBILITY. Persons eligible for Stock Awards shall consist of
Employees whose potential contribution, in the judgment of the Committee, will
benefit the future success of the Company and/or an Affiliate. Stock Awards may
be granted only to persons not previously an Employee or Director of the
Company, or following a bona fide period of non-employment, as an inducement
material to the individuals entering into employment with the Company within
the meaning of Rule 4350(i)(1)(A) of the NASD Marketplace Rules. In addition,
notwithstanding any other provision of the Plan to the contrary, all Stock
Awards must be granted either by a majority of the Companys independent
directors or a committee comprised of a majority of independent directors.
6. OPTION PROVISIONS.
Each Option shall be in such form and shall contain such terms and
conditions as the Board shall deem appropriate. All Options shall be designated
as nonstatutory stock options at the time of grant. The provisions of separate
Options need not be identical, but each Option shall include (through
incorporation of provisions hereof by reference in the Option or otherwise) the
substance of each of the following provisions:
(a) TERM. The Board shall determine the term of an Option.
(b) EXERCISE PRICE OF AN OPTION. The Board, in its discretion,
shall determine the exercise price of each Option.
(c) CONSIDERATION. The purchase price of Common Stock acquired
pursuant to an Option shall be paid, to the extent permitted by applicable law,
either (i) in cash at the time the Option is exercised or (ii) at the discretion
of the Board (1) by delivery to the Company of other Common Stock, (2) by a net
exercise of the Option (as further described below) or (3) in any other form of
legal consideration that may be acceptable to the Board. Unless otherwise
specifically provided in the Option, the purchase price of Common Stock acquired
pursuant to an Option that is paid by delivery to the Company of other Common
Stock acquired, directly or indirectly from the Company, shall be paid only by
shares of the Common Stock of the Company that have been held for more than six
(6) months (or such longer or shorter period of time required to avoid a charge
to earnings for financial accounting purposes).
In the case of a net exercise of an Option, the Company will not
require a payment of the exercise price of the Option from the Participant but
will reduce the number of shares of Common Stock issued upon the exercise by the
largest number of whole shares that has a Fair Market Value that does not exceed
the aggregate exercise price. With respect to any remaining balance of the
aggregate exercise price, the Company shall accept a cash payment from the
Participant. The shares of Common Stock so used to pay the exercise price of an
Option under a
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net exercise will be considered to have resulted from the exercise of the
Option, and accordingly, the Option will not again be exercisable with respect
to such shares, the shares actually delivered to the Participant, and any shares
withheld for purposes of tax withholding.
(d) TRANSFERABILITY OF AN OPTION. An Option shall be transferable
to the extent provided in the Option Agreement. If the Option does not provide
for transferability, then the Option shall not be transferable except by (a)
will, (b) the laws of descent and distribution, or (c) upon dissolution of the
Optionholders marriage pursuant to a U.S. domestic relations order. Also,
except with respect to a transfer made pursuant to a U.S. domestic relations
order, during the Optionholders lifetime, only the Optionholder is entitled to
exercise his or her Option. Notwithstanding the foregoing, the Option Agreement
may provide that, by delivering written notice to the Company, in a form
satisfactory to the Company, an Optionholder may designate a third party who, in
the event of such Optionholders death, shall thereafter be entitled to exercise
the Option.
(e) VESTING GENERALLY. The total number of shares of Common Stock
subject to an Option may, but need not, vest and therefore become exercisable in
periodic installments that may, but need not, be equal. The Option may be
subject to such other terms and conditions on the time or times when it may be
exercised (which may be based on performance or other criteria) as the Board may
deem appropriate. The vesting provisions of individual Options may vary. The
provisions of this Section 6(d) are subject to any Option provisions governing
the minimum number of shares of Common Stock as to which an Option may be
exercised.
(f) TERMINATION OF CONTINUOUS SERVICE. In the event that an
Optionholders Continuous Service terminates (for reasons other than Cause or
upon the Optionholders death), the Optionholder may exercise his or her Option
(to the extent that the Optionholder was entitled to exercise such Option as of
the date of termination) but only within such period of time ending on the
earlier of (i) the date three (3) months following the termination of the
Optionholders Continuous Service (or such longer or shorter period specified in
the Option Agreement) or (ii) the expiration of the term of the Option as set
forth in the Option Agreement. If, after termination, the Optionholder does not
exercise his or her Option within the time specified in the Option Agreement,
the Option shall terminate.
(g) EXTENSION OF TERMINATION DATE. An Optionholders Option
Agreement may also provide that if the exercise of the Option following the
termination of the Optionholders Continuous Service (for reasons other than
Cause or upon the Optionholders death or Disability) would be prohibited at any
time solely because the issuance of shares of Common Stock would violate the
registration requirements under the Securities Act, then the Option shall
terminate on the earlier of (i) the expiration of the term of the Option set
forth in the Option Agreement or (ii) the expiration of a period of three (3)
months after the termination of the Optionholders Continuous Service during
which the exercise of the Option would not be in violation of such registration
requirements.
(h) DEATH OF OPTIONHOLDER. In the event that an Optionholders
Continuous Service terminates as a result of the Optionholders death, then the
Option may be exercised (to the extent the Optionholder was entitled to exercise
such Option as of the date of death) by the
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Optionholders estate, by a person who acquired the right to exercise the Option
by bequest or inheritance or by a person designated to exercise the option upon
the Optionholders death pursuant to Section 6(c), but only within the period
ending on the earlier of (1) the date thirty-six (36) months following the date
of death (or such longer or shorter period specified in the Option Agreement) or
(2) the expiration of the term of such Option as set forth in the Option
Agreement. If, after death, the Option is not exercised within the time
specified herein, the Option shall terminate.
(i) TERMINATION FOR CAUSE. In the event an Optionholders
Continuous Service is terminated for Cause, the Option shall terminate upon the
termination date of such Optionholders Continuous Service and the Optionholder
shall be prohibited from exercising his or her Option from and after the time of
such termination.
(j) EARLY EXERCISE. The Option may, but need not, include a
provision whereby the Optionholder may elect at any time before the
Optionholders Continuous Service terminates to exercise the Option as to any
part or all of the shares of Common Stock subject to the Option prior to the
full vesting of the Option. Any unvested shares of Common Stock so purchased may
be subject to a repurchase option in favor of the Company or to any other
restriction the Board determines to be appropriate. The Company will not
exercise its repurchase option until at least six (6) months (or such longer or
shorter period of time required to avoid a charge to earnings for financial
accounting purposes) have elapsed following exercise of the Option unless the
Board otherwise specifically provides in the Option.
7. PROVISIONS OF STOCK AWARDS OTHER THAN OPTIONS.
(a) RESTRICTED STOCK AWARDS. Each Restricted Stock Award agreement
shall be in such form and shall contain such terms and conditions as the Board
shall deem appropriate. At the Boards election, shares of Common Stock may be
(i) held in book entry form subject to the Companys instructions until any
restrictions relating to the Restricted Stock Award lapse; or (ii) evidenced by
a certificate, which certificate shall be held in such form and manner as
determined by the Board. The terms and conditions of Restricted Stock Award
Agreements may change from time to time, and the terms and conditions of
separate Restricted Stock Award Agreements need not be identical, provided,
however, that each Restricted Stock Award Agreement shall include (through
incorporation of the provisions hereof by reference in the agreement or
otherwise) the substance of each of the following provisions:
(i) PURCHASE PRICE. At the time of the grant of a
Restricted Stock Award, the Board will determine the price to be paid by the
Participant for each share subject to the Restricted Stock Award. To the extent
required by applicable law, the price to be paid by the Participant for each
share of the Restricted Stock Award will not be less than the par value of a
share of Common Stock. A Restricted Stock Award may be awarded as a stock bonus
(i.e., with no cash purchase price to be paid) to the extent permissible under
applicable law.
(ii) CONSIDERATION. At the time of the grant of a
Restricted Stock Award, the Board will determine the consideration permissible
for the payment of the purchase price of the Restricted Stock Award. The
purchase price of Common Stock acquired pursuant to the
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Restricted Stock Award shall be paid either: (i) in cash at the time of
purchase; (ii) by services rendered or to be rendered to the Company; or (iii)
in any other form of legal consideration that may be acceptable to the Board in
its discretion.
(iii) VESTING. Shares of Common Stock acquired under a
Restricted Stock Award may, but need not, be subject to a share repurchase
option in favor of the Company in accordance with a vesting schedule to be
determined by the Board.
(iv) TERMINATION OF PARTICIPANTS CONTINUOUS SERVICE. In
the event that a Participants Continuous Service terminates, the Company shall
have the right, but not the obligation, to repurchase or otherwise reacquire for
no consideration any or all of the shares of Common Stock held by the
Participant that have not vested as of the date of termination under the terms
of the Restricted Stock Award Agreement. At the Boards election, the repurchase
right may be at the least of: (i) the Fair Market Value on the relevant date; or
(ii) the Participants original cost. The Company will not exercise its
repurchase option until at least six (6) months (or such longer or shorter
period of time required to avoid a charge to earnings for financial accounting
purposes) have elapsed following the purchase of the restricted stock unless
otherwise determined by the Board or provided in the Restricted Stock Award
Agreement.
(v) TRANSFERABILITY. Rights to purchase or receive shares
of Common Stock granted under a Restricted Stock Award shall be transferable by
the Participant only upon such terms and conditions as are set forth in the
Restricted Stock Award Agreement, as the Board shall determine in its
discretion, and so long as Common Stock awarded under the Restricted Stock Award
remains subject to the terms of the Restricted Stock Award Agreement.
(b) PHANTOM STOCK. Each Phantom Stock Award Agreement shall be in
such form and shall contain such terms and conditions as the Board shall deem
appropriate. The terms and conditions of the Phantom Stock Award Agreements may
change from time to time, and the terms and conditions of separate Phantom Stock
Award Agreements need not be identical, provided, however, that each Phantom
Stock Award Agreement shall include (through incorporation of the provisions
hereof by reference in the agreement or otherwise) the substance of each of the
following provisions:
(i) CONSIDERATION. At the time of grant of a Phantom
Stock Award, the Board will determine the consideration, if any, to be paid by
the Participant upon delivery of each share of Common Stock subject to the
Phantom Stock Award. To the extent required by applicable law, the consideration
to be paid by the Participant for each share of Common Stock subject to a
Phantom Stock Award will not be less than the par value of a share of Common
Stock. Such consideration may be paid in any form permitted under applicable
law.
(ii) VESTING. At the time of the grant of a Phantom Stock
Award, the Board may impose such restrictions or conditions to the vesting of
the Phantom Stock Award as it, in its absolute discretion, deems appropriate.
(iii) ADDITIONAL RESTRICTIONS. At the time of the grant of
Phantom Stock Award, the Board, as it deems appropriate, may impose such
restrictions or conditions that delay
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the delivery of shares of Common Stock subject to a Phantom Stock Award after
the vesting of such Award, with such terms to be contained in the Phantom Stock
Award Agreement.
(iv) PAYMENT. Phantom Stock Awards may be settled in
Common Stock or in cash or any combination of the two, or in any other form of
consideration as determined by the Board and contained in the Phantom Stock
Award Agreement.
(v) DIVIDEND EQUIVALENTS. Dividend equivalents may be
credited in respect of shares of Common Stock covered by a Phantom Stock Award,
as determined by the Board and contained in the Phantom Stock Award Agreement.
At the discretion of the Board, such dividend equivalents may be converted into
additional shares of Common Stock covered by the Phantom Stock Award in such
manner as determined by the Board. Any additional shares covered by the Phantom
Stock Award credited by reason of such dividend equivalents will be subject to
all the terms and conditions of the underlying Phantom Stock Award Agreement to
which they relate.
(vi) TERMINATION OF PARTICIPANTS CONTINUOUS SERVICE.
Except as otherwise provided in the applicable Phantom Stock Award Agreement,
such portion of the Phantom Stock Award that has not vested will be forfeited
upon the Participants termination of service for any reason.
(c) STOCK APPRECIATION RIGHTS. Each Stock Appreciation Right
Agreement shall be in such form and shall contain such terms and conditions as
the Board shall deem appropriate. The terms and conditions of Stock Appreciation
Right Agreements may change from time to time, and the terms and conditions of
separate Stock Appreciation Right Agreements need not be identical, but each
Stock Appreciation Right Agreement shall include (through incorporation of
provisions hereof by reference in the agreement or otherwise) the substance of
each of the following provisions:
(i) STRIKE PRICE AND CALCULATION OF APPRECIATION. Each
Stock Appreciation Right will be denominated in share of Common Stock
equivalents. The appreciation distribution payable on the exercise of a Stock
Appreciation Right will be not greater than an amount equal to the excess of (A)
the aggregate Fair Market Value (on the date of the exercise of the Stock
Appreciation Right) of a number of shares of Common Stock equal to the number of
share of Common Stock equivalents in which the Participant is vested under such
Stock Appreciation Right and with respect to which the Participant is exercising
the Stock Appreciation Right on such date, over (B) an amount that will be
determined by the Committee at the time of grant of the Stock Appreciation
Right.
(ii) VESTING. At the time of the grant of a Stock
Appreciation Right, the Board may impose such restrictions or conditions to the
vesting of such Stock Appreciate Right as it, in its absolute discretion, deems
appropriate.
(iii) EXERCISE. To exercise any outstanding Stock
Appreciation Right, the Participant must provide notice of exercise to the
Company in compliance with the provisions of the Stock Appreciation Right
Agreement evidencing such Stock Appreciation Right.
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(iv) PAYMENT. The appreciation distribution in respect of
a Stock Appreciation Right may be paid in Common Stock, in cash, or any
combination of the two, or in any other form of consideration as determined by
the Board and contained in the Stock Appreciation Right Agreement evidencing
such Stock Appreciation Right.
(v) TERMINATION OF CONTINUOUS SERVICE. In the event that
a Participants Continuous Service terminates, the Participant may exercise his
or her Stock Appreciation Right (to the extent that the Participant was entitled
to exercise such Stock Appreciation Right as of the date of termination) but
only within such period of time ending on the earlier of (i) the date three (3)
months following the termination of the Participants Continuous Service (or
such longer or shorter period specified in the Stock Appreciation Right
Agreement) or (ii) the expiration of the term of the Stock Appreciation Right as
set forth in the Stock Appreciation Right Agreement. If, after termination, the
Participant does not exercise his or her Stock Appreciation Right within the
time specified in the Stock Appreciation Right Agreement, the Stock Appreciation
Right shall terminate.
(d) OTHER STOCK AWARDS. Other forms of Stock Awards
valued in whole or in part by reference to, or otherwise based on, Common Stock
may be granted either alone or in addition to Stock Awards provided for under
Section 6 and the preceding provisions of this Section 7. Subject to the
provisions of the Plan, the Board shall have sole and complete authority to
determine the persons to whom and the time or times at which such Other Stock
Awards will be granted, the number of shares of Common Stock (or the cash
equivalent thereof) to be granted pursuant to such Awards and all other terms
and conditions of such Awards.
8. SECURITIES LAW COMPLIANCE.
The Company shall seek to obtain from each regulatory commission or
agency having jurisdiction over the Plan such authority as may be required to
grant Stock Awards and to issue and sell shares of Common Stock upon exercise of
the Stock Awards; provided, however, that this undertaking shall not require the
Company to register under the Securities Act the Plan, any Stock Award or any
Common Stock issued or issuable pursuant to any such Stock Award. If, after
reasonable efforts, the Company is unable to obtain from any such regulatory
commission or agency the authority which counsel for the Company deems necessary
for the lawful issuance and sale of Common Stock under the Plan, the Company
shall be relieved from any liability for failure to issue and sell Common Stock
upon exercise of such Stock Awards unless and until such authority is obtained.
9. USE OF PROCEEDS FROM STOCK.
Proceeds from the sale of Common Stock pursuant to Stock Awards shall
constitute general funds of the Company.
10. MISCELLANEOUS.
(a) ACCELERATION OF EXERCISABILITY AND VESTING. The Board shall
have the power to accelerate the time at which a
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Stock Award may first be exercised or the time during which a Stock Award or any
part thereof will vest in accordance with the Plan, notwithstanding the
provisions in the Stock Award stating the time at which it may first be
exercised or the time during which it will vest.
(b) SHAREOWNER RIGHTS. No Participant shall be deemed to be the
holder of, or to have any of the rights of a holder with respect to, any shares
of Common Stock subject to such Stock Award unless and until such shares of
Common Stock have been issued to the Participant and such Participant has
satisfied all requirements with respect to the Stock Award pursuant to its
terms.
(c) NO EMPLOYMENT OR OTHER SERVICE RIGHTS. Nothing in the Plan or
any instrument executed or Stock Award granted pursuant thereto shall confer
upon any Participant any right to continue to serve the Company or an Affiliate
in the capacity in effect at the time the Stock Award was granted or shall
affect the right of the Company or an Affiliate to terminate (i) the employment
of an Employee with or without notice and with or without cause, (ii) the
service of a Consultant pursuant to the terms of such Consultants agreement
with the Company or an Affiliate or (iii) the service of a Director pursuant to
the Bylaws of the Company or an Affiliate, and any applicable provisions of the
corporate law of the state in which the Company or the Affiliate is
incorporated, as the case may be.
(d) INVESTMENT ASSURANCES. The Company may require a Participant,
as a condition of exercising or acquiring Common Stock under any Stock Award,
(i) to give written assurances satisfactory to the Company as to the
Participants knowledge and experience in financial and business matters and/or
to employ a purchaser representative reasonably satisfactory to the Company who
is knowledgeable and experienced in financial and business matters and that he
or she is capable of evaluating, alone or together with the purchaser
representative, the merits and risks of exercising the Stock Award; and (ii) to
give written assurances satisfactory to the Company stating that the Participant
is acquiring Common Stock subject to the Stock Award for the Participants own
account and not with any present intention of selling or otherwise distributing
the Common Stock. The foregoing requirements, and any assurances given pursuant
to such requirements, shall be inoperative if (1) the issuance of the shares of
Common Stock upon the exercise or acquisition of Common Stock under the Stock
Award has been registered under a then currently effective registration
statement under the Securities Act or (2) as to any particular requirement, a
determination is made by counsel for the Company that such requirement need not
be met in the circumstances under the then applicable securities laws. The
Company may, upon advice of counsel to the Company, place legends on stock
certificates issued under the Plan as such counsel deems necessary or
appropriate in order to comply with applicable securities laws, including, but
not limited to, legends restricting the transfer of the Common Stock.
(e) WITHHOLDING OBLIGATIONS. To the extent provided by the terms
of a Stock Award Agreement, the Participant may, with the approval of the
Committee, satisfy any federal, state or local tax withholding obligation
relating to the exercise or acquisition of Common Stock under a Stock Award by
any of the following means (in addition to the Companys right to withhold from
any compensation paid to the Participant by the Company) or by a combination of
such means: (i) tendering a cash payment; (ii) authorizing the Company to
withhold shares of Common Stock
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from the shares of Common Stock otherwise issuable to the Participant as a
result of the exercise or acquisition of Common Stock under the Stock Award;
provided, however, that no shares of Common Stock are withheld with a value
exceeding the minimum amount of tax required to be withheld by law (or such
lesser amount as may be necessary to avoid variable award accounting); or (iii)
delivering to the Company owned and unencumbered shares of Common Stock.
11. ADJUSTMENTS UPON CHANGES IN STOCK.
(a) CAPITALIZATION ADJUSTMENTS. If any change is made in, or other
event occurs with respect to, the Common Stock subject to the Plan or subject to
any Stock Award without the receipt of consideration by the Company (through
merger, consolidation, reorganization, recapitalization, reincorporation, stock
dividend, dividend in property other than cash, stock split, liquidating
dividend, combination of shares, exchange of shares, change in corporate
structure or other transaction not involving the receipt of consideration by the
Company (each a Capitalization Adjustment), the Plan will be appropriately
adjusted in the class(es) and maximum number of securities subject to the Plan
pursuant to Sections 4(a) and 4(b) and the maximum number of securities subject
to award to any person pursuant to Section 5(c), and the outstanding Stock
Awards will be appropriately adjusted in the class(es) and number of securities
and price per share of Common Stock subject to such outstanding Stock Awards.
The Board shall make such adjustments, and its determination shall be final,
binding and conclusive. (The conversion of any convertible securities of the
Company shall not be treated as a transaction without receipt of consideration
by the Company.)
(b) DISSOLUTION OR LIQUIDATION. In the event of a dissolution or
liquidation of the Company, then all outstanding Stock Awards shall terminate
immediately prior to the completion of such dissolution or liquidation.
(c) CORPORATE TRANSACTION. In the event of a Corporate
Transaction, any surviving corporation or acquiring corporation may assume or
continue any or all Stock Awards outstanding under the Plan or may substitute
similar stock awards for Stock Awards outstanding under the Plan (it being
understood that similar stock awards include, but are not limited to, awards to
acquire the same consideration paid to the shareowners or the Company, as the
case may be, pursuant to the Corporate Transaction), and any reacquisition or
repurchase rights held by the Company in respect of Common Stock issued pursuant
to Stock Awards may be assigned by the Company to the successor of the Company
(or the successors parent company), if any, in connection with such Corporate
Transaction. In the event that any surviving corporation or acquiring
corporation does not assume or continue any or all such outstanding Stock Awards
or substitute similar stock awards for such outstanding Stock Awards, then with
respect to Stock Awards that have been not assumed, continued or substituted and
that are held by Participants whose Continuous Service has not terminated prior
to the effective time of the Corporate Transaction, the vesting of such Stock
Awards (and, if applicable, the time at which such Stock Awards may be
exercised) shall (contingent upon the effectiveness of the Corporate
Transaction) be accelerated in full to a date prior to the effective time of
such Corporate Transaction as the Board shall determine (or, if the Board shall
not determine such a date, to the date that is five (5) days prior to the
effective time of the Corporate Transaction), such Stock Awards shall terminate
if not exercised (if applicable) at or prior to such effective time, and any
reacquisition or
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repurchase rights held by the Company with respect to such Stock Awards held by
Participants whose Continuous Service has not terminated shall (contingent upon
the effectiveness of the Corporate Transaction) lapse. With respect to any other
Stock Awards outstanding under the Plan that have not been assumed, continued or
substituted, the vesting of such Stock Awards (and, if applicable, the time at
which such Stock Award may be exercised) shall not be accelerated, unless
otherwise provided in a written agreement between the Company or any Affiliate
and the holder of such Stock Award, and such Stock Awards shall terminate if not
exercised (if applicable) prior to the effective time of the Corporate
Transaction.
(d) CHANGE IN CONTROL. A Stock Award held by any Participant whose
Continuous Service has not terminated prior to the effective time of a Change in
Control may be subject to additional acceleration of vesting and exercisability
upon or after such event as may be provided in the Stock Award Agreement for
such Stock Award or as may be provided in any other written agreement between
the Company or any Affiliate and the Participant, but in the absence of such
provision, no such acceleration shall occur.
12. AMENDMENT OF THE PLAN AND STOCK AWARDS.
(a) AMENDMENT OF PLAN. The Board at any time, and from time to
time, may amend the Plan. However, except as provided in Section 11(a) relating
to Capitalization Adjustments, no amendment shall be effective unless approved
by the shareowners of the Company to the extent shareowner approval is necessary
to satisfy applicable law.
(b) NO IMPAIRMENT OF RIGHTS. Rights under any Stock Award granted
before amendment of the Plan shall not be impaired by any amendment of the Plan
unless (i) the Company requests the consent of the Participant and (ii) the
Participant consents in writing.
(c) AMENDMENT OF STOCK AWARDS. The Board at any time, and from
time to time, may amend the terms of any one or more Stock Awards; provided,
however, that the rights under any Stock Award shall not be impaired by any such
amendment unless (i) the Company requests the consent of the Participant and
(ii) the Participant consents in writing.
13. TERMINATION OR SUSPENSION OF THE PLAN.
(a) PLAN TERM. The Board may suspend or terminate the Plan at any
time. No Stock Awards may be granted under the Plan while the Plan is suspended
or after it is terminated.
(b) NO IMPAIRMENT OF RIGHTS. Suspension or termination of the Plan
shall not impair rights and obligations under any Stock Award granted while the
Plan is in effect except with the consent of the Participant.
14. EFFECTIVE DATE OF PLAN.
The Plan shall become effective as determined by the Board.
15. CHOICE OF LAW.
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The laws of the State of Delaware shall govern all questions concerning
the construction, validity and interpretation of this Plan, without regard to
such states conflict of laws rules.
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