Attached files
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| EX-99.1 - EX.99.1 - 2010 STOCK INCENTIVE COMP PLAN - ULTICOM INC | mm06-0710_8ke991.htm |
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
FORM
8-K
CURRENT
REPORT
PURSUANT
TO SECTION 13 OR 15(D) OF
THE
SECURITIES EXCHANGE ACT OF 1934
Date of
Report (Date of earliest event reported):
June
3, 2010
ULTICOM,
INC.
(Exact
name of registrant as specified in its charter)
|
New
Jersey
|
0-30121
|
22-2050748
|
||
|
State
or Other Jurisdiction of Incorporation or Organization
|
(Commission
File
Number)
|
I.R.S.
Employer Identification No.
|
1020
Briggs Road,
Mount
Laurel, New Jersey
08054
(Address
of Principal Executive Offices)
(Zip
Code)
Registrant's
telephone number, including area code: (856) 787-2700
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions (see General Instruction A.2. below):
|
¨
|
Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
|
|
¨
|
Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
|
|
¨
|
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
|
|
¨
|
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
|
1
|
Item 5.02.
|
Departure
of Directors or Certain Officers; Election of Directors; Appointment of
CertainOfficers;
Compensatory Arrangements of Certain
Officers.
|
On April 19, 2010, the Board of
Directors of Ulticom, Inc. (the “Company” or “Ulticom”) approved the Ulticom,
Inc. 2010 Stock Incentive Compensation Plan (the “2010 Plan”), subject to
shareholder approval. The Company’s shareholders voted on and
approved the 2010 Plan at the Annual Meeting of Shareholders held on June 3,
2010.
The following is a summary of the
material terms of the 2010 Plan.
Purposes
The
purposes of the 2010 Plan are to assist Ulticom, its subsidiaries and affiliates
in attracting and retaining valued non-employee directors, employees and
consultants, to align their respective interests with shareholders’ interests
through equity-based compensation and to permit the granting of awards that are
intended to constitute performance-based compensation for certain executive
officers under Section 162(m) of the Internal Revenue Code. Options, stock
appreciation rights, restricted stock and other stock-based awards may be
granted under the 2010 Plan. Ulticom believes it is essential to obtain
authorization for the 2010 Plan in order to retain the ability to continue to
provide a market competitive incentive for retention and motivation of key
employees.
Administration
The
2010 Plan is administered by the Compensation Committee and, with respect to the
grant of awards, the Stock Option Subcommittee. Subject to certain
restrictions, the Compensation Committee may delegate its powers under the 2010
Plan to one or more of its members (including the Stock Option Subcommittee) or
members of the Board of Directors, one or more officers of Ulticom or any of its
subsidiaries or affiliates, and one or more agents or advisors such
administrative duties or powers as it may deem advisable. Subject to the
provisions of the 2010 Plan, the administrator of the 2010 Plan has authority in
its discretion to: (1) interpret and administer the 2010 Plan and awards
granted pursuant to the 2010 Plan; (2) select directors, employees and
consultants to whom awards may be granted; (3) determine the type, amount
and terms of awards; (4) clarify, construe or resolve any ambiguity in any
provision of the 2010 Plan or any award granted pursuant to the 2010 Plan; (5)
approve forms of agreement for use under the 2010 Plan; (6) accelerate or
waive vesting of awards granted pursuant to the 2010 Plan; (7) extend the
term or period of exercisability of any awards granted pursuant to the 2010
Plan; (8) modify the purchase price under any award granted pursuant to the
2010 Plan; and (9) modify or waive any terms or conditions applicable to
any award granted pursuant to the 2010 Plan.
Shares Subject to the 2010
Plan
The
stock subject to options and awards under the 2010 Plan is authorized but
unissued shares of our common stock or shares of treasury common stock. The
number of shares of common stock that may be issued under the 2010 Plan is
500,000 shares (and incentive stock options may be issued for the full
plan). In the event that any outstanding award under the 2010 Plan
expires, is forfeited, cancelled or otherwise terminated without the issuance of
shares or is otherwise settled for cash, the shares subject to such award, to
the extent of any such forfeiture, cancellation, expiration, termination or
settlement for cash, shall again be available for awards under the 2010
Plan.
Section 162(m)
Limitations
Section 162(m)
of the Internal Revenue Code generally disallows a tax deduction to public
companies for compensation in excess of $1 million paid to the chief
executive officer or any of the three other most highly compensated officers
(other than the chief executive officer or the chief financial officer). Certain
performance-based compensation is specifically exempt from the deduction limit
if it otherwise meets the requirements of Section 162(m). One of the
requirements for equity compensation plans is that there must be a limit to the
number of shares granted to any one individual under the plan during a specified
period. Accordingly, the 2010 Plan provides that no participant may receive
options, stock appreciation rights and performance-based compensation
denominated in shares during any fiscal year in excess of 250,000 shares, and no
participant may receive awards denominated in cash or property during any fiscal
year in excess of $3,000,000, in each case, subject to adjustments made in
accordance with the plan. Shareholder approval of this proposal will
constitute shareholder approval of this limitation for Section 162(m)
purposes.
2
Eligibility
Nonstatutory
stock options, or NSOs, stock appreciation rights, restricted stock, other
stock-based awards (other than incentive stock options) and performance-based
compensation (including any of the foregoing awards structured as such) may be
granted to employees and consultants, in each case, of Ulticom or any of its
subsidiaries or affiliates and members of the board of directors of Ulticom.
Incentive stock options, or ISOs, may be granted only to employees of Ulticom or
a subsidiary. Each option will be designated in the stock option agreement as
either an ISO or an NSO. As of January 31, 2010, we estimate that
approximately 200 employees, as well as our three independent directors,
were eligible to participate in the 2010 Plan.
Terms and Conditions of
Options
Exercise
Price. The exercise price for shares issued upon exercise of
options will be determined by the 2010 Plan administrator but may not be less
than 100% of the fair market value of the stock underlying the option on the
date the option is granted. The exercise price of ISOs granted to a 10% or
greater shareholder may not be less than 110% of the fair market value on the
date of grant.
Form of
Consideration. The means of payment for shares issued upon
exercise of an option will be specified in each option agreement. The 2010 Plan
permits payment to be made by cash, check, wire transfer, other shares of our
common stock (with some restrictions), through the delivery of irrevocable
instructions to a broker to sell shares of our common stock obtained upon the
exercise of the option and to deliver to us an amount out of the proceeds of
such sale equal to the exercise price for such shares of our common stock being
purchased, any combination of the foregoing or any other method of payment
determined by the 2010 Plan administrator to be consistent with applicable law
and the purpose of the plan.
Term of
Options. The term of an option may be no more than ten years
from the date of grant, except that the term of an ISO granted to a 10% or
greater shareholder may not exceed five years from the date of
grant.
Other
Provisions. The award agreement for each option grant may
contain other terms, provisions and conditions not inconsistent with the 2010
Plan, as may be determined by the 2010 Plan administrator. In this regard, an
award agreement may specify other events that may cause a participant’s rights,
payments and benefits with respect to an award to be subject to reduction,
cancellation, forfeiture, or recoupment, or which may affect any otherwise
applicable vesting or performance conditions of an award.
Terms and Conditions of Stock
Appreciation Rights
A stock
appreciation right is the right to receive, upon exercise thereof, the excess of
(a) the fair market value of a specified number of shares of common stock on the
date of exercise over (b) the grant price of the right as specified by the 2010
Plan administrator on the date of the grant. Stock appreciation rights may be
issued either alone, in addition to, or in tandem with, any options granted
under the 2010 Plan. The grant of a stock right under the 2010 Plan will be
evidenced by an award agreement.
Terms
and Conditions of Restricted Stock
An award
of restricted stock is a grant by the 2010 Plan administrator of a specified
number of shares of common stock to the participant, which shares are subject to
forfeiture upon the occurrence of specified events. An award of
restricted stock will be evidenced by an award agreement. The 2010
Plan administrator may condition the grant of restricted stock or the expiration
of the restriction period upon the participant’s achievement of one or more
performance goal(s) specified in the award agreement. Restricted
stock granted to employees or consultants shall have a minimum vesting period of
three years if they vest based on the passage of time and one year if they vest
based on the achievement of performance goals, in each case, subject to
acceleration of vesting as may be set forth in the applicable award agreement in
the event of death, disability, or change of control or as otherwise may be
determined in accordance with the 2010 Plan.
Other Stock-Based
Awards
The 2010
Plan administrator will have the right to grant other awards of shares of
Ulticom’s common stock or valued by reference to or based upon the
fair market value of Ulticom’s common stock, having such terms and conditions as
the 2010 Plan administrator may determine, including without limitation,
restricted stock units and other phantom awards. The 2010 Plan
administrator will determine to whom and when other stock-based awards will be
made, the number of shares to be awarded under (or otherwise related to) such
other stock-based awards, whether such other stock-based awards will be settled
in cash, shares or a combination of cash and shares, and all
3
other
terms and conditions of such awards. Other stock-based awards granted
to employees or consultants shall have a minimum vesting period of three years
if they vest based on the passage of time and one year if they vest based on the
achievement of performance goals, in each case, subject to acceleration of
vesting as may be set forth in the applicable award agreement in the event of
death, disability, or change of control or as otherwise may be determined in
accordance with the 2010 Plan.
Performance
Goals
Any
awards granted under the Plan may be granted so as to qualify for the
performance-based compensation exemption of Section 162(m) of the Code
(“Section 162(m) performance-based awards”). As determined by the 2010 Plan
administrator in its sole discretion, either the granting, vesting or payment of
such performance-based awards shall be based on achievement of performance goals
based on one or more performance measures as set forth in the 2010
Plan.
The
business criteria to be used for establishing performance goals under any
Section 162(m) performance-based award shall be as follows: (a) sales or
revenue; (b) earnings per share; (c) measurable achievement in quality,
operation and compliance initiatives; (d) objectively determinable measure of
non-financial operating and management performance objectives; (e) net earnings
(either before or after interest, taxes, depreciation and amortization); (f)
economic value-added; (g) net income (either before or after taxes); (h)
operating earnings; (i) cash flow (including, but not limited to, operating cash
flow and free cash flow); (j) cash flow return on capital; (k) return on net
assets; (l) return on shareholders’ equity; (m) return on assets; (n)
return on capital; (o) shareholder returns, dividends and/or other
distributions; (p) return on sales; (q) gross or net profit margin;
(r) productivity; (s) expenses; (t) margins; (u) operating efficiency;
(v) customer satisfaction; (w) measurable achievement in quality and
compliance initiatives; (x) working capital; (y) debt; (z) debt reduction; (aa)
price per share of stock; (bb) market share; (cc) completion of acquisitions;
(dd) business expansion; (ee) product diversification; and (ff) new or
expanded market penetration. The foregoing criteria shall have any
reasonable definitions that the 2010 Plan administrator may specify, which may
include or exclude any or all of the following items, as the 2010 Plan
administrator may specify: (pp) extraordinary, unusual or non-recurring items;
(qq) effects of changes in tax law, accounting principles or other such laws or
provisions affecting reported results; (rr) effects of currency fluctuations;
(ss) effects of financing activities (e.g., effect on earnings per share of
issuing convertible debt securities); (tt) expenses for restructuring,
productivity initiatives or new business initiatives; (uu) impairment of
tangible or intangible assets; (vv) litigation or claim judgments or
settlements; (ww) non-operating items; (xx) acquisition expenses; (yy)
discontinued operations; and (zz) effects of assets sales or
divestitures.
In
addition, Section 162(m) performance-based awards may use the foregoing business
criteria to measure the performance of Ulticom and/or any of its subsidiaries or
affiliates as a whole, any business unit or divisional unit thereof or any
combination thereof against any goal including past performance or compared to
the performance of a group of comparable companies or a published or special
index. Subject to Section 162(m) of the Internal Revenue Code, the
2010 Plan administrator may adjust the performance goals (including to prorate
goals and payments for a partial plan year) in the event of the following
occurrences: (i) non-recurring events, including divestitures, spin-offs, or
changes in accounting standards or polices; (ii) mergers and acquisitions; and
(iii) financing transactions, including selling accounts
receivable.
Section
162(m) performance-based awards may not be adjusted upward, however, the 2010
Plan administrator retains the discretion to adjust such awards downward, either
on a formula or discretionary basis or any combination, as determined by the
2010 Plan administrator.
Adjustments
Changes in
Capitalization. In the event of any corporate event or
transaction involving Ulticom, a subsidiary and/or an affiliate (including, but
not limited to, a change in the Shares of Ulticom or the capitalization of
Ulticom) such as a merger, consolidation, reorganization, recapitalization,
separation, stock dividend, stock split, reverse stock split, split up,
spin-off, combination of shares, exchange of shares, dividend in kind,
extraordinary cash dividend, amalgamation, or other like change in capital
structure (other than regular cash dividends to shareholders of Ulticom), or any
similar corporate event or transaction, the 2010 Plan administrator, to prevent
dilution or enlargement of participants’ rights under the 2010 Plan, shall
substitute or adjust, in its sole discretion, the number and kind of shares or
other property that may be issued under the 2010 Plan or under particular forms
of awards, the number and kind of shares or other property subject to
outstanding awards, the option exercise price, grant price or
4
purchase
price applicable to outstanding awards, the annual award limits, and/or other
value determinations applicable to the 2010 Plan or outstanding awards under the
2010 Plan.
Change in
Control. Unless the 2010 Plan administrator determines
otherwise at the time of grant of an award, upon the occurrence of a change of
control (as defined in the 2010 Plan) any outstanding awards under the 2010 Plan
(A) which are not assumed shall immediately prior to the occurrence of the
change of control vest in full, become exercisable and all restrictions lapse,
as may be applicable and (B) which are assumed shall vest in full, become
exercisable and all restrictions shall lapse, as may be applicable, to the
extent the participant’s employment or service, as applicable, is terminated
within a specified period of time following such change of control as determined
by the 2010 Plan administrator and set forth in the applicable award
agreement. In addition to the foregoing, the 2010 Plan administrator,
in its discretion, may provide for the continuation or assumption or
substitution of each outstanding award, accelerate the exercisability, vesting
and/or lapse of restrictions under outstanding awards, upon written notice,
provide that any outstanding awards must be exercised, to the extent
exercisable, during a reasonable period of time, or cancel awards for fair value
paid to the participant.
Limits on
Transferability
Unless
otherwise determined by the 2010 Plan administrator, an award granted under the
2010 Plan may not be transferred or assigned during a participant’s lifetime and
will not be transferable or assignable by the participant except in the event of
his death (subject to the applicable laws of descent and
distribution).
Amendment and Termination of the
2010 Plan and Awards
The 2010
Plan administrator may amend, modify or terminate the 2010 Plan or any portion
thereof or any award under the 2010 Plan at any time provided that, subject to
certain exceptions, the participant’s consent to such action must be obtained
unless the administrator determines that the action would not materially
diminish the rights of the participant under any award granted to such
participant under the 2010 Plan or is necessary to cause the award to comply
with applicable laws. Subject to certain exceptions, no such action shall be
made without the prior approval of Ulticom’s shareholders, (A) if such approval
is necessary to comply with any tax or regulatory requirement applicable to the
2010 Plan, (B) if such action increases the number of shares available under the
2010 Plan (other than an increase permitted under the 2010 Plan absent
shareholder approval), (C) to take account of any changes in applicable law, or
to obtain or maintain favorable tax, exchange, or regulatory treatment
(including, without limitation increases in the annual award limits) for
Ulticom, a subsidiary, and/or an affiliate or a change in eligibility
requirements under the 2010 Plan, or (D) for any action that results in a
reduction of the option exercise price or grant price per share, as applicable,
of any outstanding options or stock appreciation rights or cancellation of any
outstanding options or stock appreciation rights in exchange for cash, or for
other awards, such as other options or stock appreciation rights, with an option
exercise price or grant price per share, as applicable, that is less than such
price of the original options or stock appreciation rights.
Separation from
Service.
Notwithstanding any contrary provision
in the 2010 Plan or any award agreement, any payment(s) of nonqualified deferred
compensation that are otherwise required to be made under the 2010 Plan or any
award agreement to a specified employee (within the meaning of Section 409A of
the Internal Revenue Code) as a result of his or her separation from service
(within the meaning of Section 409A of the Internal Revenue Code), other than a
payment that is not subject to Section 409A of the Internal Revenue Code, shall
be delayed for the first six months following such separation from service and
shall instead be paid (in a manner set forth in the award agreement) on the date
that immediately follows the end of such six-month period (or, if earlier,
within 10 business days following the date of death of the specified employee)
(the “New Payment Date”) or as soon as administratively practicable thereafter,
but in no event later than the later of the end of the applicable
taxable year of the specified employee or the fifteenth day of the third
calendar month following the New Payment Date.
Tax Withholding
Ulticom
has the power and right to deduct or withhold automatically from any amount
deliverable under an award or otherwise, or require a participant to remit to
Ulticom, the amount necessary to satisfy all applicable taxes to be withheld
with respect to any taxable event arising under the 2010
Plan. Subject to the foregoing and the approval of the 2010 Plan
administrator, participants may elect to satisfy any withholding requirement, in
whole or in part, by having Ulticom withhold shares of Ulticom’s common stock
having a fair market value on the date the tax is to be determined equal to the
minimum statutory total tax that could be imposed.
5
Federal
Income Tax Consequences
Incentive Stock
Options — A participant who receives an ISO will generally recognize
no taxable income for regular federal income tax purposes upon either the grant
or the exercise of such ISO. However, when a participant exercises an ISO, the
difference between the fair market value of the shares purchased and the option
price of those shares will be includable in determining the participant’s
alternative minimum taxable income.
If the
shares are retained by the participant for at least one year from the date of
exercise and two years from the date of grant of the options, gain will be
taxable to the participant upon sale of the shares acquired upon exercise of the
ISO, as a long-term capital gain. In general, the adjusted basis for the shares
acquired upon exercise will be the option price paid with respect to such
exercise. Ulticom will not be entitled to a tax deduction arising from the
exercise of an ISO if the employee qualifies for such long-term capital gain
treatment.
Nonstatutory Stock Options (NSOs)
and Stock Appreciation Rights (SAR) — A participant will not
recognize taxable income for federal income tax purposes at the time an NSO or
SAR is granted. However, the participant will recognize compensation taxable as
ordinary income at the time of exercise for all shares that are not subject to a
substantial risk of forfeiture. The amount of such compensation will be the
difference between the option price for an NSO, or base price, for an SAR, and
the fair market value of the shares on the date of exercise of the NSO or cash
or shares received upon the exercise of the SAR. Ulticom will be entitled to a
deduction for federal income tax purposes at the same time and in the same
amount as the participant is deemed to have recognized income upon exercise of
the NSO or the SAR.
The
participant’s basis in any shares acquired upon the exercise of an NSO or SAR
will be adjusted by adding the amount so recognized as compensation to the
purchase price paid by the participant for the shares. The participant will
recognize gain or loss when he or she disposes of any shares obtained upon
exercise of an NSO or SAR settled in an amount equal to the difference between
the selling price and the participant’s tax basis in such shares. Such gain or
loss will be treated as long-term or short-term capital gain or loss, depending
upon the holding period.
Stock Rights — The
federal income tax consequences of a stock right will depend on how the award is
structured. A participant will recognize ordinary income on the grant of an
award of unrestricted Shares equal to the excess of the fair market of each
Share subject to the Stock Right over the purchase price paid by the
participant. If the award is structured as a restricted share award (i.e., with
transfer restrictions and a right of repurchase by Ulticom), then unless a
participant makes a voluntary filing under Section 83(b) of the Code to
recognize ordinary income on the date the award is granted, a participant
granted a restricted stock award will recognize ordinary income on the excess of
the fair market of each Share subject to the Stock Right over the purchase price
paid by the participant on the date restrictions lapse. Ulticom will be entitled
to a deduction for federal income tax purposes at the same time and in the same
amount as the participant recognizes income in respect of the
award.
Other Stock Based Awards other than
SARs — The tax consequences of other stock based awards depends upon
how the awards are structured. Generally, an award such as restricted stock
units will cause a participant to recognize income on the date the award is paid
or “constructively received” by the participant, provided the award complies
with Section 409A of the Code. Ulticom will be entitled to a
deduction for federal income tax purposes at the same time and in the same
amount as the participant recognizes income in respect of the
award.
The foregoing summary description of
the 2010 Plan is not intended to be complete and is qualified in its entirety by
reference to the actual terms of the 2010 Plan, which is attached hereto as
Exhibit 99.1 and incorporated herein by reference.
Item
5.07. Submission of Matters to a Vote of Security
Holders.
The Company held its annual meeting of
shareholders on June 3, 2010. At the meeting, the Company’s
shareholders elected the Company’s 9 nominees as directors who will serve as the
Board of Directors of Ulticom until the next annual meeting of shareholders, and
until their successors are elected and qualified. The Company’s
shareholders also approved the Ulticom, Inc. 2010 Stock Incentive Compensation
Plan and ratified the selection of Deloitte & Touche LLP as the Company’s
independent registered public accounting firm for fiscal year 2010.
6
The final
voting results for each matter submitted to a vote of shareholders at the
meeting were as follows:
Proposal No. 1: Election of
Directors
|
Nominee
|
Votes For
|
Votes Withheld
|
Abstentions
|
Broker Non-Votes
|
|
Paul
D. Baker
|
8,020,983
|
2,023,008
|
-
|
349,554
|
|
John
A. Bunyan
|
8,020,095
|
2,023,896
|
-
|
349,554
|
|
Michael
J. Chill
|
9,968,473
|
75,518
|
-
|
349,554
|
|
Andre
Dahan
|
7,961,525
|
2,082.466
|
-
|
349,554
|
|
Ron
Hiram
|
8,088,493
|
1,955,498
|
-
|
349,554
|
|
Joel
E. Legon
|
8,020,095
|
2,023,896
|
-
|
349,554
|
|
Rex
A. McWilliams
|
8,088,468
|
1,955,523
|
-
|
349,554
|
|
Shawn
K. Osborne
|
8,020,978
|
2,023,013
|
-
|
349,554
|
|
Shefali
A. Shah
|
7,961,475
|
2,082,516
|
-
|
349,554
|
Proposal No. 2: Approval of
the Ulticom, Inc. 2010 Stock Incentive Compensation Plan
|
Votes For
|
Votes Against
|
Abstentions
|
Broker Non-Votes
|
|
|
9,073,140
|
970,776
|
75
|
349,554
|
Proposal No. 3: Ratification
of the selection of Deloitte & Touche LLP as the Company’s independent
registered public accounting firm for fiscal year 2010
|
Votes For
|
Votes Against
|
Abstentions
|
Broker Non-Votes
|
|
|
10,239,221
|
154,155
|
169
|
0
|
|
Item 9.01.
|
Financial Statements and
Exhibits.
|
(d) Exhibits.
99.1 Ulticom,
Inc. 2010 Stock Incentive Compensation Plan.
7
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
|
ULTICOM,
INC.
|
||
|
Date: June
7, 2010
|
By:
|
/s/
Shawn K. Osborne
|
|
Name:
|
Shawn
K. Osborne
|
|
|
Title:
|
President
and
Chief
Executive Officer
|
|
8
EXHIBIT
INDEX
|
Exhibit No.
|
Description
|
|
99.1
|
Ulticom,
Inc. 2010 Stock Incentive Compensation
Plan
|
9