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EXCEL - IDEA: XBRL DOCUMENT - ALTERA CORP | Financial_Report.xls |
10-Q - FORM 10-Q - ALTERA CORP | c03030e10vq.htm |
EX-31.1 - EXHIBIT 31.1 - ALTERA CORP | c03030exv31w1.htm |
EX-31.2 - EXHIBIT 31.2 - ALTERA CORP | c03030exv31w2.htm |
EX-32.2 - EXHIBIT 32.2 - ALTERA CORP | c03030exv32w2.htm |
EX-10.2 - EXHIBIT 10.2 - ALTERA CORP | c03030exv10w2.htm |
EX-32.1 - EXHIBIT 32.1 - ALTERA CORP | c03030exv32w1.htm |
Exhibit 10.20
ALTERA CORPORATION
2005 EQUITY INCENTIVE PLAN
(as amended May 6, 2010)
1. PURPOSE. The purpose of the Altera Corporation 2005 Equity Incentive Plan (the Plan) is
to provide incentives to attract, retain and motivate eligible persons whose present and potential
contributions are important to the success of the Company and its Subsidiaries by offering them an
opportunity to participate in the Companys future performance through awards of Options,
Restricted Stock, Stock Bonuses, Stock Appreciation Rights (SARs) and Restricted Stock Units
(RSUs). Capitalized terms not defined in the text are defined in Section 26.
2. SHARES SUBJECT TO THE PLAN.
2.1 Number of Shares Available. Subject to Sections 2.2 and 21, 28,000,000 Shares are
available for grant and issuance under the Plan plus any Shares remaining available for grant under
the Companys (i) 1998 Director Stock Option Plan and its (ii) 1996 Stock Option Plan
(collectively, the Prior Plans) on the Effective Date (as defined below). Shares subject to
Awards that are cancelled, forfeited, settled in cash or that expire by their terms, including
Shares subject to Awards granted under the Prior Plans that are outstanding on the Effective Date,
will be returned to the pool of Shares available for grant and issuance under the Plan. Any Award
other than an Option or a SAR shall reduce the number of Shares available for issuance by 2.25
Shares. Awards issued as an Option or a SAR shall reduce the number of Shares available for
issuance by the number of Shares underlying the Award, regardless of the number of Shares actually
issued upon exercise of the Award. No more than 3,000,000 Shares shall be issued as ISOs. The
Company may issue Shares that are authorized but unissued shares pursuant to the Awards granted
under the Plan. The Company will reserve and keep available a sufficient number of Shares to
satisfy the requirements of all outstanding Awards granted under the Plan.
2.2 Adjustment of Shares. If the number of outstanding Shares is changed by a stock
dividend, recapitalization, stock split, reverse stock split, subdivision, combination,
reclassification or similar change in the capital structure of the Company, without consideration,
then (a) the number of Shares reserved for issuance and future grant under the Plan set forth in
Section 2.1; (b) the Exercise Prices of and number of Shares subject to outstanding Options and
SARs; (c) the number of Shares subject to other outstanding Awards; (d) the maximum number of
shares that may be issued as ISOs set forth in Section 2.1; and (e) the maximum number of shares
that may be issued to an individual or to a new employee in any one fiscal year set forth in
Section 3, will be proportionately adjusted, subject to any required action by the Board or the
stockholders of the Company and compliance with applicable securities laws; provided that fractions
of a Share will not be issued but will either be replaced by a cash payment equal to the Fair
Market Value of such fraction of a Share or will be rounded up to the nearest whole Share, as
determined by the Committee; and provided further that the Exercise Price of any Option or SAR may
not be decreased to below the par value of the Shares.
3. ELIGIBILITY. ISOs may be granted only to employees (including officers and directors who
are also employees) of the Company or Subsidiary. All other Awards may be granted to employees,
officers, directors, consultants, independent contractors and advisors of the Company or
Subsidiary. The Committee (or its designee under 4.1(c)) will from time to time determine in its
sole discretion and designate the eligible persons who will be granted Awards under the Plan. The
Plan is discretionary in nature, and the grant of Awards by the Committee is voluntary and
occasional. A person may be granted more than one Award under the Plan. However, no person will be
eligible to receive more than 2,000,000 Shares issuable as Awards granted in any fiscal year, other
than new employees of the Company or Subsidiary (including new employees who are also officers and
directors of the Company or Subsidiary), who are eligible to receive up to a maximum of an
additional 2,000,000 Shares issuable as Awards granted in the calendar year in which they commence
their employment.
4. ADMINISTRATION.
4.1 Committee Authority. The Plan shall be administered by the Committee. Subject to
the general purposes, terms and conditions of the Plan, the Committee will have full power to
implement and carry out the Plan. Without limiting the previous sentence, the Committee will have
the authority to:
(a) | construe and interpret the Plan, any Award Agreement and any other agreement or document executed pursuant to the Plan; | ||
(b) | prescribe, amend and rescind rules and regulations relating to the Plan or any Award, including determining the forms and agreements used in connection with the Plan; provided that the Committee may delegate to the Companys legal department the authority to approve revisions to the forms and agreements used in connection with the Plan that are designed to facilitate Plan administration, and that are not inconsistent with the Plan or with any resolutions of the Committee relating to the Plan; | ||
(c) | select persons to receive Awards; provided that the Committee may delegate to one or more Executive Officers (who would also be considered officers under Delaware law) the authority to grant an Award under the Plan to Participants who are not Insiders; | ||
(d) | determine the terms of Awards; | ||
(e) | determine the number of Shares or other consideration subject to Awards; | ||
(f) | determine whether Awards will be granted singly, in combination, or in tandem with, in replacement of, or as alternatives to, other Awards under the Plan or any other incentive or compensation plan of the Company or any Subsidiary; | ||
(g) | grant waivers of Plan or Award conditions; | ||
(h) | determine the vesting, exercisability, transferability, and payment of Awards; | ||
(i) | correct any defect, supply any omission, or reconcile any inconsistency in the Plan, any Award or any Award Agreement; | ||
(j) | determine whether an Award has been earned; | ||
(k) | amend the Plan; | ||
(l) | to take any action consistent with the terms of the Plan, either before or after an Award has been granted, which it deems necessary or advisable to comply with any governmental laws or regulatory requirement of a foreign country, including, but not limited to, modifying or amending the terms and conditions governing any Awards or establishing any local country plans as sub-plans to this Plan; or | ||
(m) | make all other determinations necessary or advisable for the administration of the Plan. |
4.2 Committee Interpretation and Discretion. Any determination made by the Committee
with respect to any Award shall be made in its sole discretion at the time of grant of the Award
or, unless in contravention of any express term of the Plan or Award, at any later time, and such
determination shall be final and binding on the Company and all persons having an interest in any
Award under the Plan. Any dispute regarding the interpretation of the Plan or any Award Agreement
shall be submitted by the Participant or Company to the Committee for review. The resolution of
such a dispute by the Committee shall be final and binding on the Company and the Participant. The
Committee may delegate to one or more Executive Officers the authority to review and resolve
disputes with respect to Awards held by Participants who are not Insiders, and such resolution
shall be final and binding on the Company and the Participant.
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5. OPTIONS.
5.1 Grant of Options. The Committee may grant Options to Participants and will
determine (a) whether the Options will be ISOs or NSOs; (b) the number of Shares subject to the
Option, (c) the Exercise Price of the Option, (d) the period during which the Option may be
exercised, (e) the vesting and exercisability of the Option and (f) all other terms and conditions
of the Option, subject to the provisions of this Section 5 and the Plan. Options granted to
Non-Employee Directors pursuant to Section 10 hereof shall be governed by that Section. Each Option
granted under the Plan will be evidenced by an Award Agreement, which shall expressly identify the
Option as an ISO or NSO. The date of grant of an Option will be the date on which the Committee
makes the determination to grant the Option, unless the Committee otherwise specifies a later date.
5.2 Exercise Period; Expiration Date and Exercise. An Option will be exercisable
within the times or upon the occurrence of events determined by the Committee and set forth in the
Award Agreement governing such Option and subject to Company policies established by the Committee
(or by individuals to whom the Committee has delegated responsibility) from time to time. The
Committee may provide for Options to become exercisable at one time or from time to time,
periodically or otherwise (including, without limitation, upon the attainment during a Performance
Period of performance goals based on Performance Factors), in such number of Shares or percentage
of Shares subject to the Option as the Committee determines. The Award Agreement shall set forth
the Expiration Date; provided that no Option will be exercisable after the expiration of ten years
from the date the Option is granted; and provided further that no ISO granted to a Ten Percent
Stockholder will be exercisable after the expiration of five years from the date the Option is
granted.
5.3 Exercise Price. The Exercise Price of an Option will be determined by the
Committee when the Option is granted and may not be less than the Fair Market Value on the date of
grant; provided that the Exercise Price of any ISO granted to a Ten Percent Stockholder will not be
less than 110% of the Fair Market Value of the Shares on the date of grant.
5.4 Vesting and Termination.
(a) Vesting. Except as set forth in the Participants Award Agreement, any
Option granted to a Participant will cease to vest on the Participants Termination Date.
If the Participant does not exercise his or her Option within the time specified by the
Committee or as set forth in the Award Agreement, the Option shall terminate.
(b) Post-Termination Exercise Period. Subject to Section 22.4, following a
Participants Termination, the Participants Option may be exercised to the extent vested
and exercisable as set forth below:
(i) no later than 60 days after the Termination Date if a Participant is Terminated
for any reason except death or Disability, unless a different period of time period is
specifically set forth in the Participants Award Agreement; provided that no Option may be
exercised after the Expiration Date of the Option; or
(ii) no later than twelve months after the Termination Date in the case of Termination
due to Disability or death or if a Participant dies within 30 days of the Termination Date,
unless a different time period is specifically set forth in the Participants Award
Agreement; provided that no Option may be exercised after the Expiration Date of the
Option.
5.5 Limitations on ISOs. The aggregate Fair Market Value (determined as of the date of
grant) of Shares with respect to which ISOs are exercisable for the first time by a Participant
during any calendar year (under the Plan or under any other incentive stock option plan of the
Company or any Subsidiary) shall not exceed $100,000. If the Fair Market Value of Shares on the
date of grant with respect to which ISOs are exercisable for the first time by a Participant during
any calendar year exceeds $100,000, the Options for the first $100,000 worth of Shares to become
exercisable in that calendar year will be ISOs, and the Options for the Shares with a Fair Market
Value in excess of $100,000 that become exercisable in
that calendar year will be NSOs. If the Code is amended to provide for a different limit on
the Fair Market Value of Shares permitted to be subject to ISOs, such different limit shall be
automatically incorporated into the Plan and will apply to any Options granted after the effective
date of the Codes amendment.
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5.6 Notice of Disqualifying Dispositions of Shares Acquired on Exercise of an ISO. If
a Participant sells or otherwise disposes of any Shares acquired pursuant to the exercise of an ISO
on or before the later of (a) the date two years after the Date of Grant, and (b) the date one year
after the exercise of the ISO (in either case, a Disqualifying Disposition), the Company may
require the Participant to immediately notify the Company in writing of such Disqualifying
Disposition.
5.7 No Disqualification. Notwithstanding any other provision in the Plan, no term of
the Plan relating to ISOs will be interpreted, amended or altered, and no discretion or authority
granted under the Plan will be exercised, so as to disqualify the Plan under Section 422 of the
Code or, without the consent of the Participant affected, to disqualify any ISO under Section 422
of the Code. Any outstanding ISO that is modified, extended, renewed or otherwise altered shall be
treated in accordance with Section 424(h) of the Code and the regulations thereunder.
6. RESTRICTED STOCK AWARDS.
6.1 Awards of Restricted Stock. A Restricted Stock Award is an offer by the Company to
sell to a Participant Shares that are subject to restrictions. The Committee will determine to whom
an offer will be made, the number of Shares the person may purchase, the Purchase Price, the
restrictions under which the Shares will be subject and all other terms and conditions of the
Restricted Stock Award. A Participant accepts a Restricted Stock Award by signing and delivering to
the Company an Award Agreement with full payment of the Purchase Price within 30 days from the date
the Award Agreement was delivered to the Participant. If the Participant does not accept the
Restricted Stock Award within 30 days, then the offer of the Restricted Stock Award will terminate,
unless the Committee determines otherwise. Restricted Stock Awards will vest over a minimum of
three years as measured from the date of grant.
6.2 Purchase Price. The Purchase Price for a Restricted Stock Award will be determined
by the Committee and may be less than Fair Market Value (but not less than the par value of the
Shares) on the date the Restricted Stock Award is granted. Payment of the Purchase Price must be
made in accordance with Section 11 of the Plan and the Award Agreement, and in accordance with any
procedures established by the Company.
6.3 Termination. Except as set forth in the Participants Award Agreement, any
Restricted Stock Award will cease to vest on the Participants Termination Date.
7. STOCK BONUS AWARDS.
7.1 Awards of Stock Bonuses. A Stock Bonus Award is an award to a Participant of
Shares (which may consist of Restricted Stock or Restricted Stock Units) for services to be
rendered or for past services already rendered to the Company or any Subsidiary. No payment will be
required for Shares awarded pursuant to a Stock Bonus Award.
7.2 Form of Payment to Participant. The Stock Bonus Award shall be paid currently.
Payment may be made in the form of cash, whole Shares, or a combination thereof, based on the Fair
Market Value of the Shares earned under a Stock Bonus Award on the date of payment, and in either a
lump sum payment or in installments, all as the Committee determines.
7.3 Termination of Participant. Except as set forth in the Participants Award
Agreement, any Bonus Stock Award will cease to vest on the Participants Termination Date.
8. STOCK APPRECIATION RIGHTS.
8.1 Awards of SARs. A Stock Appreciation Right (SAR) is an award to a Participant
that may be settled in cash, or Shares (which may consist of Restricted Stock or RSUs), having a
value equal to the value determined by multiplying the difference between the Fair Market Value on
the date of exercise over the Exercise Price and the number of Shares with respect to which the SAR
is being settled. The SAR
may be granted for services to be rendered or for past services already rendered to the
Company, or any Subsidiary.
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8.2 Exercise Period and Expiration Date. A SAR will be exercisable within the times or
upon the occurrence of events determined by the Committee and set forth in the Award Agreement
governing such SAR. The Award Agreement shall set forth the Expiration Date; provided that no SAR
will be exercisable after the expiration of ten years from the date the SAR is granted.
8.3 Exercise Price. The Committee will determine the Exercise Price of the SAR when
the SAR is granted, and which may not be less than the Fair Market Value on the date of grant and
may be settled only in Shares.
8.4 Termination.
(a) Vesting. Any SAR granted to a Participant will cease to vest on the
Participants Termination Date. In the event a Participant is Terminated as a result of such
Participants Retirement, such Participants SARs shall, in the sole discretion of the
Committee, accelerate vesting or continue to vest, continue to become exercisable, and may be
exercised during such period of time as is determined by the Committee and as provided in the
Award Agreement (but in no event may the SAR be exercised after the expiration date of the
term of such SAR as set forth in the Award Agreement); if the Participant does not exercise
his or her SAR within the time specified by the Committee or as set forth in the Award
Agreement, the SAR shall terminate.
(b) Post-Termination Exercise Period. Subject to Section 22.4, following a
Participants Termination, the Participants SAR may be exercised to the extent vested and
exercisable as set forth below:
(i) no later than 60 days after the Termination Date if a Participant is Terminated for
any reason except death or Disability, unless a different period of time period is
specifically set forth in the Participants Award Agreement; provided that no SAR may be
exercised after the Expiration Date of the SAR; or
(ii) no later than twelve months after the Termination Date in the case of Termination
due to Disability or death or if a Participant dies within 30 days of the Termination Date,
unless a different time period is specifically set forth in the Participants Award Agreement;
provided that no SAR may be exercised after the Expiration Date of the SAR.
9. RESTRICTED STOCK UNITS.
9.1 Awards of Restricted Stock Units. An RSU is an award to a Participant covering a
number of Shares that may be settled in cash, or by issuance of those Shares for services to be
rendered or for past services already rendered to the Company or any Subsidiary. RSUs will vest
over a minimum of three years as measured from the date of grant.
9.2 Form and Timing of Settlement. To the extent permissible under applicable law, the
Committee may permit a Participant to defer payment under a RSU to a date or dates after the RSU is
earned, provided that the terms of the RSU and any deferral satisfy the requirements of
Section 409A of the Code (or any successor) and any regulations or rulings promulgated thereunder.
Payment may be made in the form of cash or whole Shares or a combination thereof in a lump sum
payment, all as the Committee determines.
10. AWARD GRANTS TO NON-EMPLOYEE DIRECTORS.
10.1 Eligibility. Non-Employee Directors are eligible to receive annual grants of any
type of Award, except ISOs, offered under this Plan pursuant to this Section 10. Notwithstanding
the limitations set forth below in Section 10.2, Non-Employee Directors are also eligible to
receive Awards pursuant to Sections 5, 6, 7, 8 and 9 hereof.
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10.2 Initial Grant. Each Non-Employee Director upon first becoming a member of the
Board may be granted, as determined by the Committee (i) up to a maximum number of Shares subject
to an RSU and/or Restricted Stock grant having an aggregate Fair Market Value equal to $300,000, as
measured on the date of grant, or (ii) up to a maximum aggregate number of 40,000 Shares subject to
an Option and/or SAR.
10.3
Succeeding Grant. Each Non-Employee Director may be granted on an annual basis, as
determined by the Committee (i) up to a maximum number of Shares subject to an RSU and/or
Restricted Stock grant having an aggregate Fair Market Value equal to $150,000, as measured on the
date of grant, or (ii) up to a maximum aggregate number of 20,000 Shares subject to an Option
and/or SAR.
10.4 Form and Timing of Settlement of RSUs. To the extent permissible under
applicable law, the Committee may permit a Non-Employee Director to defer payment under a RSU to a
date or dates after the RSU is earned, provided that the terms of the RSU and any deferral satisfy
the requirements of Section 409A of the Code (or any successor) and any regulations or rulings
promulgated thereunder. Payment may be made in the form of cash or whole Shares or a combination
thereof in a lump sum payment, all as the Committee determines.
10.5
Vesting and Exercisability. In the event of a Corporate Transaction, the vesting of all
Awards granted to Non-Employee Directors pursuant to this Section 10 will accelerate and such
Awards will become exercisable (to the extent applicable) in full prior to the consummation of such
event at such time and on such conditions as the Committee determines, and if such Awards are not
exercised (to the extent applicable) on or prior to the consummation of the Corporate Transaction,
they shall terminate.
10.5 Post-Termination Exercise Period. Except as provided in Section 10.5 or this
Section 10.5, each Option granted under this Section 10 shall expire ten years after its date of
grant. The date on which the Non-Employee Director ceases to be a member of the Board or a
consultant of the Company shall be referred to as the Non-Employee Director Termination Date for
purposes of this Section 10.5. An Option may be exercised after the Non-Employee Director
Termination Date only as set forth below:
(a) Termination Generally. If the Non-Employee Director ceases to be a member of the
Board or consultant of the Company for any reason except death, Disability or Non-Employee Director
Retirement, then each Option, to the extent then vested and exercisable pursuant to Section 10.4
above, then held by such Non-Employee Director may be exercised by the Non-Employee Director within
60 days after the Non-Employee Director Termination Date, unless a different period of time is
specifically set forth in the Non-Employee Directors Award Agreement; provided that no Option may
be exercised after its Expiration Date.
(b) Death or Disability. If the Non-Employee Director ceases to be a member of the
Board or consultant of the Company because of his or her Disability or death, then each Option
granted hereunder, to the extent then vested and exercisable, may be exercised no later than twelve
months after the Termination Date in the case of Termination due to Disability or death or if a
Participant dies within 30 days of the Termination Date, unless a longer time period is
specifically set forth in the Participants Award Agreement; provided that no Option may be
exercised after the Expiration Date of the Option.
11. PAYMENT FOR SHARE PURCHASES.
11.1 Payment. Payment for Shares purchased pursuant to the Plan may be made by any of
the following methods (or any combination of such methods) that are described in the applicable
Award Agreement and that are permitted by law:
(a) | in cash or cash equivalent (including by check); | ||
(b) | in the case of exercise by the Participant, a Participants guardian or legal representative or the authorized legal representative of a Participants heirs or legatees after a Participants death, by cancellation of indebtedness of the Company to the Participant; |
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(c) | by surrender of shares of the Companys Common Stock that either: (1) were obtained by the Participant or Authorized Transferee in the public market; or (2) if the shares were not obtained in the public market, they have been owned by the Participant or Authorized Transferee for more than six months and have been paid for within the meaning of SEC Rule 144; | ||
(d) | in the case of exercise by the Participant, Participants guardian or legal representative or the authorized legal representative of a Participants heirs or legatees after a Participants death, by waiver of compensation due or accrued to the Participant for services rendered; | ||
(e) | with respect only to purchases upon exercise of an Option, and provided that a public market for the Shares exists: |
(1) | through a same day sale commitment from the Participant or Authorized Transferee and an NASD Dealer meeting the requirements of the Companys same day sale procedures and in accordance with law; or | |||
(2) | through a margin commitment from the Participant or Authorized Transferee and an NASD Dealer meeting the requirements of the Companys margin procedures and in accordance with law. |
11.2 Issuance of Shares. Upon payment of the applicable Purchase Price or Exercise
Price and compliance with other conditions and procedures established by the Company for the
purchase of Shares, the Company shall issue the Shares registered in the name of the Participant or
Authorized Transferee and shall deliver certificates representing the Shares (in physical or
electronic form, as appropriate). The Shares may be subject to legends or other restrictions as
described in Section 15 of the Plan.
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12. WITHHOLDING TAXES.
12.1 Withholding Generally. Whenever Shares are to be issued in satisfaction of Awards
granted under the Plan, the Company may require the Participant to remit to the Company an amount
sufficient to satisfy minimum federal, state, local and foreign income or social security tax
withholding requirements prior to the delivery of any certificate(s) for the Shares. If a payment
in satisfaction of an Award is to be made in cash, the payment will be net of an amount sufficient
to minimum satisfy federal, state, local and foreign income or social security tax withholding
requirements.
12.2 Stock Withholding. When, under applicable tax laws, a Participant incurs income
or social security tax liability in connection with the grant, exercise, vesting or payment of any
Award that is subject to income or social security tax withholding and the Participant is obligated
to pay the Company the amount required to be withheld, the Committee may, in its sole discretion,
allow the Participant to satisfy the minimum withholding tax obligation by electing to have the
Company withhold from the Shares to be issued that number of whole Shares having a Fair Market
Value equal to the minimum amount required to be withheld, determined on the date that the amount
of tax to be withheld is to be determined. All elections by a Participant to have Shares withheld
for this purpose shall be made in accordance with the requirements established by the Committee and
be in writing in a form acceptable to the Committee.
13. PRIVILEGES OF STOCK OWNERSHIP. No Participant or Authorized Transferee will have any
rights as a stockholder of the Company with respect to any Shares until the Shares are issued to
the Participant or Authorized Transferee. After Shares are issued to the Participant or Authorized
Transferee, the Participant or Authorized Transferee will be a stockholder and have all the rights
of a stockholder with respect to the Shares including the right to vote and receive all dividends
or other distributions made or paid with respect to such Shares; provided, that if the Shares are
Restricted Stock, any new, additional or different securities the Participant or Authorized
Transferee may become entitled to receive with respect to the Shares by virtue of a stock dividend,
stock split or any other change in the corporate or capital structure of the Company will be
subject to the same restrictions as the Restricted Stock; provided further, that the Participant or
Authorized Transferee will have no right to retain such dividends or distributions with respect to
Shares that are repurchased at the Participants original Exercise Price or Purchase Price pursuant
to Section 15.
14. TRANSFERABILITY. As may be permitted by the Committee (and to the extent permitted by
applicable law and the terms of the Award Agreement), a Participant may transfer an Award to an
Authorized Transferee. Absent such permission, no Award and no interest therein, shall be sold,
pledged, assigned, hypothecated, transferred or disposed of in any manner other than by will or by
the laws of descent and distribution, and no Award may be made subject to execution, attachment or
similar process.
15. RESTRICTIONS ON SHARES. At the discretion of the Committee, the Company may reserve to
itself and/or its assignee(s) in the Award documentation a right to repurchase all or a portion of
a Participants Shares that are not Vested (as defined in the Award documentation), following the
Participants Termination, at any time within ninety days after the later of (a) the Participants
Termination Date or (b) the date the Participant purchases Shares under the Plan, for cash or
cancellation of purchase money indebtedness with respect to Shares, at the Participants original
Exercise Price or Purchase Price; provided that upon assignment of the right to repurchase, the
assignee must pay the Company cash equal to the excess of the Fair Market Value of the Shares over
the original Purchase Price.
16. CERTIFICATES. All certificates for Shares or other securities delivered under the Plan
(whether in physical or electronic form, as appropriate) will be subject to stock transfer orders,
legends and other restrictions that the Committee deems necessary or advisable, including without
limitation restrictions under any applicable federal, state or foreign securities law, or any
rules, regulations and other requirements of the SEC or any stock exchange or automated quotation
system on which the Shares may be listed.
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17. ESCROW. To enforce any restrictions on a Participants Shares, the Committee may require
the Participant to deposit all certificates representing Shares, together with stock powers or
other transfer instruments approved by the Committee, appropriately endorsed in blank, with the
Company or an agent designated by the Company, to hold in escrow until such restrictions have
lapsed or terminated, and the Committee may cause a legend or legends referencing such restrictions
to be placed on the certificates.
18. SECURITIES LAW AND OTHER REGULATORY COMPLIANCE. An Award shall not be effective unless the
Award is in compliance with all applicable state, federal and foreign securities laws, rules and
regulations of any governmental body, and the requirements of any stock exchange or automated
quotation system on which the Shares may then be listed, as they are in effect on the date of grant
of the Award and also on the date of exercise or other issuance. Notwithstanding any other
provision in the Plan, the Company shall have no obligation to issue or deliver certificates for
Shares under the Plan prior to (a) obtaining any approvals from governmental agencies that the
Company determines are necessary or advisable, and/or (b) completion of any registration or other
qualification of such shares under any state, federal or foreign law or ruling of any governmental
body that the Company determines to be necessary or advisable. The Company shall be under no
obligation to register the Shares with the SEC or to effect compliance with the registration,
qualification or listing requirements of any state, federal or foreign securities laws, stock
exchange or automated quotation system, and the Company shall have no liability for any inability
or failure to do so.
19. NO OBLIGATION TO EMPLOY. Nothing in the Plan or any Award granted under the Plan shall
confer or be deemed to confer on any Participant any right to continue in the employ of, or to
continue any other relationship with, the Company or any Subsidiary or limit in any way the right
of the Company or any Subsidiary to terminate a Participants employment or other relationship at
any time, with or without cause, as applicable laws allow.
20. REPRICING PROHIBITED; EXCHANGE AND BUYOUT OF AWARDS. The repricing of Options or SARs is
prohibited without prior stockholder approval. The Committee may authorize the Company, with prior
stockholder approval and the consent of the respective Participants, to issue new Option or SAR
Awards in exchange for the surrender and cancellation of any or all outstanding Awards. With prior
stockholder approval, the Committee may at any time buy from a Participant an Option previously
granted with payment in cash, Shares or other consideration, based on such terms and conditions as
the Committee and the Participant shall agree, provided that if payment is in cash, the Committee
may buy only an Option where the Fair Market Value of the Shares exceeds the Exercise Price.
21. CORPORATE TRANSACTIONS.
21.1 Assumption or Replacement of Awards by Successor. In the event of a Corporate
Transaction any or all outstanding Awards may be assumed or replaced by the successor corporation,
which assumption or replacement shall be binding on all Participants. In the alternative, the
successor corporation may substitute equivalent Awards or provide substantially similar
consideration to Participants as was provided to stockholders (after taking into account the
existing provisions of the Awards). The successor corporation may also issue, in place of
outstanding Shares of the Company held by the Participant, substantially similar shares or other
property subject to repurchase restrictions no less favorable to the Participant. In the event such
successor corporation, if any, refuses to assume or replace the Awards, as provided above, pursuant
to a Corporate Transaction or if there is no successor corporation due to a dissolution or
liquidation of the Company, such Awards shall immediately vest as to 100% of the Shares subject
thereto at such time and on such conditions as the Board shall determine and the Awards shall
expire at the closing of the transaction or at the time of dissolution or liquidation.
21.2 Other Treatment of Awards. Subject to any greater rights granted to Participants
under Section 21.1, in the event of a Corporate Transaction, any outstanding Awards shall be
treated as provided in the applicable agreement or plan of merger, consolidation, dissolution,
liquidation or sale of assets.
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21.3 Assumption of Awards by the Company. The Company, from time to time, also may
substitute or assume outstanding awards granted by another company, whether in connection with an
acquisition of such other company or otherwise, by either (a) granting an Award under the Plan in
substitution of such other companys award, or (b) assuming such award as if it had been
granted under the Plan if the terms of such assumed award could be applied to an Award granted
under the Plan. Such substitution or assumption shall be permissible if the holder of the
substituted or assumed award would have been eligible to be granted an Award under the Plan if the
other company had applied the rules of the Plan to such grant. In the event the Company assumes an
award granted by another company, the terms and conditions of such award shall remain unchanged
(except that the exercise price and the number and nature of Shares issuable upon exercise of any
such option will be adjusted appropriately pursuant to Section 424(a) of the Code). In the event
the Company elects to grant a new Option rather than assuming an existing option, such new Option
may be granted with a similarly adjusted Exercise Price. Shares subject to Awards granted to
substitute or assume outstanding awards granted by another company in connection with an
acquisition shall not reduce the number of Shares available for issuance under Section 2.1 of the
Plan.
22. OTHER PROVISIONS.
22.1 Distribution of Award Agreements and Plan. The Award Agreement, Plan and other
documents may be delivered in any manner (including electronic distribution or posting) that meets
applicable legal requirements.
22.2 Form of Award Agreement(s). Each Award granted under the Plan will be evidenced
by an Award Agreement, which will be in substantially a form (which need not be the same for each
Participant) that the Committee or an officer of the Company (pursuant to Section 4.1(b)) has from
time to time approved, and will comply with and be subject to the terms and conditions of the Plan.
22.3 Procedures for Exercising or Settling an Award. A Participant or Authorized
Transferee may exercise or settle Awards by following the procedures established by the Companys
stock administration department, as communicated and made available to Participants through the
Companys electronic mail system, intranet site or otherwise.
22.4 Black-out Periods and Post-Termination Exercisability. In the event a Participant
is prevented from exercising an Option or selling Shares or the Company is unable to settle an
Award due to any trading restrictions currently in effect with respect to the Companys Shares at
the time of such Participants Termination or during any post-termination exercise period, then any
post-termination exercise period shall be paused until such trading restriction lapses.
22.5 Limitations on Exercise. The Committee may specify a reasonable minimum number of
Shares that may be purchased on any exercise of an Option or SAR; provided that the minimum number
will not prevent a Participant from exercising an Option or SAR for the full number of Shares for
which it is then exercisable. An Option or a SAR may only be exercised by the personal
representative of a Participant or an Authorized Transferee or by the person or persons to whom a
Participants rights under the Option or SAR shall pass by such persons will or by the laws of
descent and distribution of the state of such persons domicile at the time of death, and then only
as and to the extent that such person was entitled to exercise the Option or SAR on the date of
death.
22.6 Terms of Awards. The Committee will determine an Awards terms, including,
without limitation: (a) the number of Shares deemed subject to the Award; (b) the time or times
during which the Award may be exercised and (c) such other terms and conditions as the Committee
deems appropriate. Awards may be subject to performance goals based on Performance Factors during
any Performance Period as may be set out in advance in the Participants Award Agreement. The
Committee may adjust the performance goals applicable to Awards to take into account changes in law
and accounting and to make such adjustments as the Committee deems necessary or appropriate to
reflect the impact of extraordinary or unusual items, events or circumstances.
22.7 Treatment of Awards Upon Retirement. Upon a Participants Retirement, and as
determined by the Committee (and as evidenced in the Award Agreement), Awards granted to such
Participant may accelerate, continue to vest, provide for an extended period of time in which to
exercise an Award upon Termination or contain such terms and conditions as the Committee deems
appropriate.
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23. ADOPTION, STOCKHOLDER APPROVAL AND TERM. The Plan was adopted by the Board on March 8,
2005. The Plan shall become effective upon approval by stockholders of the Company, consistent with
applicable laws. The Plan will terminate ten years following the earlier of (i) the date it was
adopted by the Board or (ii) the date it became effective upon approval by stockholders of the
Company, unless sooner terminated by the Board pursuant to Section 24.
24. AMENDMENT OR TERMINATION OF PLAN AND AWARDS. The Board may at any time terminate, amend or
suspend the Plan in any respect, including without limitation amendment of any form of Award
Agreement or instrument to be executed pursuant to the Plan. Notwithstanding the foregoing, neither
the Board nor the Committee shall, without the approval of the stockholders of the Company, amend
the Plan in any manner that requires such stockholder approval pursuant to the Code or the
regulations promulgated thereunder as such provisions apply to ISO plans, or pursuant to the
Exchange Act or any rule promulgated thereunder. The Committee may modify, extend or renew
outstanding Awards and authorize the grant of Awards in substitution thereof; provided that any
such action (including any amendment to the Plan) may not, without the written consent of a
Participant, impair any of a Participants rights under any Award previously granted.
25. NONEXCLUSIVITY OF THE PLAN; UNFUNDED PLAN. Neither the adoption of the Plan by the Board,
the submission of the Plan to the stockholders of the Company for approval, nor any provision of
the Plan shall be construed as creating any limitations on the power of the Board to adopt such
additional arrangements as it may deem desirable, including, without limitation, the granting of
stock options and bonuses otherwise than under the Plan, and such arrangements may be either
generally applicable or applicable only in specific cases. The Plan shall be unfunded. Neither the
Company nor the Board shall be required to segregate any assets that may at any time be represented
by Awards made pursuant to the Plan. Neither the Company, the Committee, nor the Board shall be
deemed to be a trustee of any amounts to be paid under the Plan.
26. DEFINITIONS. As used in the Plan, the following terms shall have the following meanings:
(a) Authorized Transferee means the permissible recipient, as authorized by this
Plan and the Committee, of an NSO that is transferred during the Participants lifetime by the
Participant by gift or domestic relations order. For purposes of this definition a permissible
recipient is: (i) a child, stepchild, grandchild, parent, stepparent, grandparent, spouse, former
spouse, sibling, niece, nephew, mother-in-law, father-in-law, son-in-law, daughter-in-law,
brother-in-law or sister-in-law of the Participant, including any such person with such
relationship to the Participant by adoption; (ii) any person (other than a tenant or employee)
sharing the Participants household; (iii) a trust in which the persons in (i) or (ii) have more
than fifty percent of the beneficial interest; (iv) a foundation in which the persons in (i) or
(ii) or the Participant control the management of assets; or (v) any other entity in which the
person in (i) or (ii) or the Participant own more than fifty percent of the voting interest.
(b) Award means any award under the Plan, including any Option, Stock Appreciation
Right, Restricted Stock, Restricted Stock Unit or Stock Bonus.
(c) Award Agreement means, with respect to each Award, the written agreement between
the Company and the Participant setting forth the terms and conditions of the Award.
(d) Board means the Board of Directors of the Company.
(e) Code means the United States Internal Revenue Code of 1986, as amended, and the
regulations promulgated thereunder.
(f) Committee means the Compensation Committee of the Board and such other committee
appointed by the Board to administer the Plan, including, without limitation, the Stock Option
Committee.
(g) Company means Altera Corporation, a corporation organized under the laws of the
State of Delaware, or any successor corporation.
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(h) Corporate Transaction means (a) a merger or consolidation in which the Company
is not the surviving corporation (other than a merger or consolidation with a wholly-owned
subsidiary, a
reincorporation of the Company in a different jurisdiction, or other transaction in which
there is no substantial change in the stockholders of the Company and the Awards granted under the
Plan are assumed or replaced by the successor corporation, which assumption shall be binding on all
Participants), (b) a dissolution or liquidation of the Company, (c) the sale of substantially all
of the assets of the Company, (d) a merger in which the Company is the surviving corporation but
after which the stockholders of the Company immediately prior to such merger (other than any
stockholder that merges, or which owns or controls another corporation that merges, with the
Company in such merger) cease to own their shares or other equity interest in the Company; or
(e) any other transaction which qualifies as a corporate transaction under Section 424(a) of the
Code wherein the stockholders of the Company give up all of their equity interest in the Company
(except for the acquisition, sale or transfer of all or substantially all of the outstanding shares
of the Company).
(i) Disability means a disability within the meaning of Section 22(e)(3) of the
Code.
(j) Effective Date means the date stockholders approve the Plan pursuant to
Section 22 of the Plan.
(k) Exchange Act means the United States Securities Exchange Act of 1934, as
amended, and the regulations promulgated thereunder.
(l) Executive Officer means a person who is an executive officer of the Company as
defined in Rule 3b-7 promulgated under the Exchange Act.
(m) Exercise Price means the price at which a Participant who holds an Option or SAR
may purchase the Shares issuable upon exercise of the Option or SAR.
(n) Expiration Date means the last date on which an Option or SAR may be exercised
as determined by the Committee.
(o) Fair Market Value means, as of any date, the value of a share of the Companys
Common Stock determined as follows:
(1) | if such Common Stock is then quoted on the NASDAQ National Market, its closing price on the NASDAQ National Market on such date; | ||
(2) | if such Common Stock is publicly traded and is then listed on a national securities exchange, the last reported sale price on such date or, if no such reported sale takes place on such date, the average of the closing bid and asked prices on the principal national securities exchange on which the Common Stock is listed or admitted to trading; | ||
(3) | if such Common Stock is publicly traded but is not quoted on the NASDAQ National Market nor listed or admitted to trading on a national securities exchange, the average of the closing bid and asked prices on such date, as reported by The Wall Street Journal, for the over-the-counter market; or | ||
(4) | if none of the foregoing is applicable, by the Board of Directors in good faith. |
(p) Insider means an officer or director of the Company or any other person whose
transactions in the Companys Common Stock are subject to Section 16 of the Exchange Act.
(q) ISO means an Incentive Stock Option within the meaning of the Code.
(r) NSO means a nonqualified stock option that does not qualify as an ISO.
(s) Option means an Award pursuant to Section 5 or, in the case of a Non-Employee
Director, Section 10 of the Plan.
(t) Non-Employee Director means a member of the Companys Board of Directors who is
not a current employee of the Company or any Subsidiary.
(u) Participant means a person who receives an Award under the Plan.
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(v) Performance Factors include, but are not limited to, some or all of the factors
selected by the Committee from among the measures below to determine whether performance goals
established by the Committee and applicable to Awards have been satisfied:
(1) | Net revenue and/or net revenue growth; | ||
(2) | Earnings before income taxes and amortization and/or earnings before income taxes and amortization growth; | ||
(3) | Operating income and/or operating income growth; | ||
(4) | Net income and/or net income growth; | ||
(5) | Earnings per share and/or earnings per share growth; | ||
(6) | Total stockholder return and/or total stockholder return growth; | ||
(7) | Return on equity; | ||
(8) | Operating cash flow return on income; | ||
(9) | Adjusted operating cash flow return on income; | ||
(10) | Economic value added; and | ||
(11) | Individual business objectives. |
(w) Performance Period means the period of service determined by the Committee, not
to exceed five years, during which years of service or performance is to be measured for the Award.
(x) Purchase Price means the price to be paid for Shares acquired under the Plan,
other than Shares acquired upon exercise of an Option or SAR.
(y) Restricted Stock Award means an award of Shares pursuant to Section 6 or, in the
case of a Non-Employee Director, Section 10 of the Plan.
(z) Restricted Stock Unit means an Award granted pursuant to Section 9 or, in the
case of a Non-Employee Director, Section 10 of the Plan.
(aa) Retirement means that the Committee has deemed a Participant retired within the
meaning of the applicable retirement policy applicable to Awards as determined from time to time by
the Compensation Committee of the Board.
(bb) SEC means the United States Securities and Exchange Commission.
(cc) Securities Act means the United States Securities Act of 1933, as amended, and
the regulations promulgated thereunder.
(dd) Shares means shares of the Companys Common Stock $0.01 par value, reserved for
issuance under the Plan, as adjusted pursuant to Sections 2 and 21, and any successor security.
(ee) Stock Appreciation Right means an Award granted pursuant to Section 8 or, in
the case of a Non-Employee Director, Section 10 of the Plan.
(ff) Stock Bonus means an Award granted pursuant to Section 7 of the Plan.
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(gg) Subsidiary means any corporation (other than the Company) in an unbroken chain
of corporations beginning with the Company if, at the time of granting of the Award, each of the
corporations other than the last corporation in the unbroken chain owns stock possessing 50% or
more of the total combined voting power of all classes of stock in one of the other corporations in
such chain.
(gg) Ten Percent Stockholder means any person who directly or by attribution owns
more than ten percent of the total combined voting power of all classes of stock of the Company or
any Subsidiary.
(ii) Termination or Terminated means, for purposes of the Plan with
respect to a Participant, that the Participant has ceased to provide services as an employee,
director, consultant, independent contractor or adviser to the Company or a Subsidiary; provided
that a Participant shall not be deemed to be Terminated if the Participant is on a Company approved
leave of absence; and provided further, that during any Company approved leave of absence, vesting
of Awards shall be suspended or continue in accordance with applicable Company policies. Subject to
the foregoing, the Committee shall have sole discretion to determine whether a Participant has
ceased to provide services and the effective date on which the Participant ceased to provide
services (the Termination Date); further, the Termination Date will not be extended by
any notice period mandated under local law.
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