Attached files
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8-K - FORM 8-K - CONEXANT SYSTEMS INC | a60050e8vk.htm |
EX-10.2 - EX-10.2 - CONEXANT SYSTEMS INC | a60050exv10w2.htm |
Exhibit 10.1
CONEXANT HOLDINGS, INC.
2011 INCENTIVE COMPENSATION PLAN
CONEXANT HOLDINGS, INC.
2011 INCENTIVE COMPENSATION PLAN
TABLE OF CONTENTS
ARTICLE I PURPOSE |
1 | |||
ARTICLE II DEFINITIONS |
1 | |||
ARTICLE III ADMINISTRATION |
6 | |||
ARTICLE IV SHARE LIMITATION |
9 | |||
ARTICLE V ELIGIBILITY |
11 | |||
ARTICLE VI STOCK OPTIONS |
11 | |||
ARTICLE VII CHANGE IN CONTROL PROVISIONS |
15 | |||
ARTICLE VIII TERMINATION OR AMENDMENT OF PLAN |
16 | |||
ARTICLE IX COMPANY CALL RIGHTS; RIGHTS OF FIRST REFUSAL |
17 | |||
ARTICLE X UNFUNDED STATUS OF PLAN |
18 | |||
ARTICLE XI GENERAL PROVISIONS |
18 | |||
ARTICLE XII EFFECTIVE DATE OF PLAN |
22 | |||
ARTICLE XIII TERM OF PLAN |
22 | |||
ARTICLE XIV NAME OF PLAN |
22 |
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CONEXANT HOLDINGS, INC.
2011 INCENTIVE COMPENSATION PLAN
ARTICLE I
PURPOSE
PURPOSE
The purpose of this Conexant Holdings, Inc. 2011 Incentive Compensation Plan is to enhance the
profitability and value of the Company for the benefit of its stockholders by enabling the Company
to offer Eligible Individuals cash and stock-based incentives in order to attract, retain and
reward such individuals and strengthen the mutuality of interests between such individuals and the
Companys stockholders. The Plan is effective as of the date set forth in Article XII.
ARTICLE II
DEFINITIONS
DEFINITIONS
For purposes of this Plan, the following terms shall have the following meanings:
2.1 Acquisition Event has the meaning set forth in Section 4.2(d).
2.2 Affiliate means each of the following: (a) any Subsidiary; (b) any Parent; (c)
any corporation, trade or business (including, without limitation, a partnership or limited
liability company) which is directly or indirectly controlled 50% or more (whether by ownership of
stock, assets or an equivalent ownership interest or voting interest) by the Company or one of its
Affiliates; (d) any trade or business (including, without limitation, a partnership or limited
liability company) which directly or indirectly controls 50% or more (whether by ownership of
stock, assets or an equivalent ownership interest or voting interest) of the Company; and (e) any
other entity in which the Company or any of its Affiliates has a material equity interest and which
is designated as an Affiliate by resolution of the Committee.
2.3 Award means any award under the Plan of any Stock Option. All Awards shall be
granted by, confirmed by, and subject to (i) the terms of, a written agreement executed by the
Company and the Participant, and (ii) approval of the Committee.
2.4 Award Agreement means the written agreement setting forth the terms and
conditions applicable to an Award.
2.5 Board means the Board of Directors of the Company.
2.6 Cause means, unless otherwise determined by the Committee in the applicable
Award Agreement, with respect to a Participants Termination of Employment or Termination of
Consultancy, the following: (a) in the case where there is no employment agreement,
consulting agreement, change in control agreement or similar agreement in effect between the
Company or an Affiliate and the Participant at the time of the grant of the Award (or where there
is such an agreement but it does not define cause (or words of like import)), termination due to
such Participants (i) commission of a felony or any other act or omission involving dishonesty,
disloyalty, moral turpitude, willful misconduct or fraud with respect to the Company or any of its
Affiliates, (ii) conduct tending to bring the Company or any of its Affiliates into substantial
public disgrace or disrepute, (iii) substantial and repeated failure to perform his or her duties
or responsibilities as reasonably directed by the Board or its designees, (iv) breach of fiduciary
duty, gross negligence or willful misconduct with respect to the Company or any of its Affiliates,
(v) an act or omission aiding or abetting a competitor, supplier or customer of the Company or any
of its Subsidiaries to the disadvantage or detriment of the Company or any of its Subsidiaries, or
(vi) any other breach of any written agreement between such Participant and the Company or any
agreement involving the Company to which such Participant is bound (including, for the avoidance of
doubt, any written agreement governing the employment relationship between such Participant and the
Company or any of its subsidiaries), in each case as determined by the Committee in its sole
discretion; or (b) in the case where there is an employment agreement, consulting agreement, change
in control agreement or similar agreement in effect between the Company or an Affiliate and the
Participant at the time of the grant of the Award that defines cause (or words of like import),
cause as defined under such agreement; provided, however, that with regard to any agreement under
which the definition of cause only applies on occurrence of a change in control, such definition
of cause shall not apply until a change in control actually takes place and then only with regard
to a termination thereafter. With respect to a Participants Termination of Directorship, cause
means an act or failure to act that constitutes cause for removal of a director under applicable
Delaware law.
2.7 Change in Control has the meaning set forth in Section 7.2.
2.8 Change in Control Price has the meaning set forth in Section 7.1(b).
2.9 Code means the Internal Revenue Code of 1986, as amended. Any reference to any
section of the Code shall also be a reference to any successor provision and any Treasury
Regulation promulgated thereunder.
2.10 Committee means any committee of the Board duly authorized by the Board to
administer the Plan. If no committee is duly authorized by the Board to administer the Plan, the
term Committee shall be deemed to refer to the Board for all purposes under the Plan.
2.11 Common Stock means the Class A Common Stock, $0.01 par value per share, of the
Company, and such other series or class of common stock of the Company as the Board may designate
from time to time by duly promulgated resolution.
2.12 Company means Conexant Holdings, Inc., a Delaware corporation, and its
successors by operation of law.
2.13 Consultant means any natural person who is an advisor or consultant to the
Company or its Affiliates.
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2.14 Detrimental Activity means, unless otherwise determined by the Committee, in
the applicable Award Agreement: (a) the disclosure to anyone outside the Company or its
Affiliates, or the use in any manner other than in the furtherance of the Companys or its
Affiliates business, without written authorization from the Company, of any confidential
information, trade secrets or proprietary information, relating to the business of the Company or
its Affiliates that is acquired by a Participant prior to the Participants Termination; (b)
activity while employed or performing services that results, or if known could result, in the
Participants Termination that is classified by the Company as a termination for Cause; (c) any
attempt, directly or indirectly, to solicit, induce or hire (or the identification for
solicitation, inducement or hiring of) any employee of the Company or its Affiliates to be employed
by, or to perform services for, the Participant or any person or entity with which the Participant
is associated (including, but not limited to, due to the Participants employment by, consultancy
for, equity interest in, or creditor relationship with such person or entity) or any person or
entity from which the Participant receives direct or indirect compensation or fees as a result of
such solicitation, inducement or hire (or the identification for solicitation, inducement or hire)
without, in all cases, written authorization from the Company; (d) any attempt, directly or
indirectly, to solicit in a competitive manner any customer or prospective customer of the Company
or its Affiliates at the time of a Participants Termination, without, in all cases, written
authorization from the Company; (e) the Participants Disparagement, or inducement of others to do
so, of the Company or its Affiliates or their past and present officers, directors, employees or
products; (f) the rendering of services for any organization, or engaging, directly or indirectly,
in any business, which is competitive with the Company or its Affiliates, or the rendering of
services to such organization or business if such organization or business is otherwise prejudicial
to or in conflict with the interests of the Company or its Affiliates; provided, however, that
competitive activities shall only be those competitive with any business unit or Affiliate of the
Company with regard to which the Participant performed services at any time within the two years
prior to the Participants Termination; or (g) breach of any agreement between the Participant and
the Company or an Affiliate (including, without limitation, any employment agreement or
noncompetition or nonsolicitation agreement). For purposes of sub-sections (a), (c), (d) and (f)
above, the Board, the President or the Secretary of the Company shall have authority to provide the
Participant, except for himself or herself, with written authorization to engage in the activities
contemplated thereby and no other person shall have authority to provide the Participant with such
authorization.
2.15 Disability means, unless otherwise determined by the Committee in the
applicable Award Agreement, with respect to a Participants Termination, a permanent and total
disability as defined in Section 22(e)(3) of the Code. A Disability shall only be deemed to occur
at the time of the determination by the Committee of the Disability.
2.16 Disparagement means making comments or statements to the press, the Companys
or its Affiliates employees, consultants or any individual or entity with whom the Company or its
Affiliates has a business relationship which could reasonably be expected to adversely affect in
any manner: (a) the conduct of the business of the Company or its Affiliates (including, without
limitation, any products or business plans or prospects); or (b) the business reputation of the
Company or its Affiliates, or any of their products, or their past or present officers, directors
or employees.
2.17 Effective Date means the effective date of the Plan as defined in Article XII.
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2.18 Eligible Employee means each employee of the Company or an Affiliate.
2.19 Eligible Individual means an Eligible Employee, Non-Employee Director or
Consultant who is designated by the Committee in its discretion as eligible to receive Awards
subject to the conditions set forth herein.
2.20 Exchange Act means the Securities Exchange Act of 1934, as amended. Reference
to a specific section of the Exchange Act or regulation thereunder shall include such section or
regulation, any valid regulation or interpretation promulgated under such section, and any
comparable provision of any future legislation or regulation amending, supplementing or superseding
such section or regulation.
2.21 Fair Market Value means, for purposes of the Plan, unless otherwise required by
any applicable provision of the Code or any regulations issued thereunder, as of any date and
except as provided below: (a) the last sales price reported for the applicable Common Stock on the
applicable date as reported on the principal national securities exchange in the United States on
which it is then traded or (b) if the applicable Common Stock is not traded, listed or otherwise
reported or quoted, the price determined in good faith by the Committee in whatever manner it
considers appropriate. For purposes of the grant of any Award, the applicable date shall be the
trading day immediately prior to the date on which the Award is granted. For purposes of the
exercise of any Award, the applicable date shall be the date a notice of exercise is received by
the Committee or, if not a day on which the applicable market is open, the next day that it is
open.
2.22 Family Group means a Participants spouse, descendants (whether natural or
adopted) and any trust solely for the benefit of such Participant and/or such Participants spouse
or descendants.
2.23
Lead Underwriter has the meaning set forth in Section 11.20.
2.24
Lock-Up Period has the meaning set forth in Section 11.20.
2.25
Merger Event has the meaning set forth in Section 4.2(b).
2.26 Non-Employee Director means a director or a member of the Board of the Company
or any Affiliate who is not an active employee of the Company or any Affiliate.
2.27 Non-Qualified Stock Option means any Stock Option awarded under the Plan.
2.28 Other Extraordinary Event has the meaning set forth in Section 4.2(b).
2.29 Parent means any parent corporation of the Company within the meaning of
Section 424(e) of the Code.
2.30 Participant means an Eligible Individual to whom an Award has been granted
pursuant to the Plan.
2.31 Plan means this Conexant Holdings, Inc. 2011 Incentive Compensation Plan, as
amended from time to time.
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2.32 Registration Date means the date on which the Company sells its Common Stock in
a bona fide, firm commitment underwriting pursuant to a registration statement under the Securities
Act.
2.33 Reloads has the meaning set forth in Section 6.3(o).
2.34 Rule 16b-3 means Rule 16b-3 under Section 16(b) of the Exchange Act as then in
effect or any successor provision.
2.35 Section 4.2 Event has the meaning set forth in Section 4.2(b).
2.36 Section 409A of the Code means the nonqualified deferred compensation rules
under Section 409A of the Code and any applicable treasury regulations and other official guidance
thereunder.
2.37 Securities Act means the Securities Act of 1933, as amended and all rules and
regulations promulgated thereunder. Reference to a specific section of the Securities Act or
regulation thereunder shall include such section or regulation, any valid regulation or
interpretation promulgated under such section, and any comparable provision of any future
legislation or regulation amending, supplementing or superseding such section or regulation.
2.38 Stock Option or Option means any option to purchase shares of Common
Stock granted to Eligible Individuals granted pursuant to Article VI.
2.39 Subsidiary means any subsidiary corporation of the Company within the meaning
of Section 424(f) of the Code.
2.40 Termination means a Termination of Consultancy, Termination of Directorship or
Termination of Employment, as applicable.
2.41 Termination of Consultancy means: (a) that the Consultant is no longer acting
as a consultant to the Company or a Subsidiary; or (b) when an entity which is retaining a
Participant as a Consultant ceases to be a Subsidiary unless the Participant otherwise is, or
thereupon becomes, a Consultant to the Company or another Subsidiary at the time the entity ceases
to be a Subsidiary; or (c) when an entity which is retaining a Participant as a Consultant ceases
to be an Affiliate with respect to the Company or a Subsidiary. In the event that a Consultant
becomes an Eligible Employee or a Non-Employee Director upon the termination of his or her
consultancy, unless otherwise determined by the Committee, in its sole discretion, no Termination
of Consultancy shall be deemed to occur until such time as such Consultant is no longer a
Consultant, an Eligible Employee or a Non-Employee Director. Notwithstanding the foregoing, the
Committee may otherwise define Termination of Consultancy in the Award Agreement or, if no rights
of a Participant are reduced, may otherwise define Termination of Consultancy thereafter.
2.42 Termination of Directorship means that the Non-Employee Director has ceased to
be a director of the Company; except that if a Non-Employee Director becomes an Eligible Employee
or a Consultant upon the termination of his or her directorship, his or her ceasing to be a
director of the Company shall not be treated as a Termination of Directorship
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unless and until the Participant has a Termination of Employment or Termination of
Consultancy, as the case may be. Notwithstanding the foregoing, the Committee may otherwise define
Termination of Directorship in the Award Agreement, or if no rights of a Participant are reduced,
may otherwise define Termination of Directorship thereafter.
2.43 Termination of Employment means: (a) a termination of employment (for reasons
other than a military or personal leave of absence granted by the Company) of a Participant from
the Company and its Subsidiary; or (b) when an entity which is employing a Participant ceases to be
a Subsidiary, unless the Participant otherwise is, or thereupon becomes, employed by the Company or
another Subsidiary at the time the entity ceases to be a Subsidiary. In the event that an Eligible
Employee becomes a Consultant or a Non-Employee Director upon the termination of his or her
employment, unless otherwise determined by the Committee, in its sole discretion, no Termination of
Employment shall be deemed to occur until such time as such Eligible Employee is no longer an
Eligible Employee, a Consultant or a Non-Employee Director. Notwithstanding the foregoing, the
Committee may otherwise define Termination of Employment in the Award Agreement or, if no rights of
a Participant are reduced, may otherwise define Termination of Employment thereafter.
2.44 Transfer means: (a) when used as a noun, any direct or indirect transfer,
sale, assignment, pledge, hypothecation, encumbrance or other disposition (including the issuance
of equity in any entity), whether for value or no value and whether voluntary or involuntary
(including by operation of law), and (b) when used as a verb, to directly or indirectly transfer,
sell, assign, pledge, encumber, charge, hypothecate or otherwise dispose of (including the issuance
of equity in any entity) whether for value or for no value and whether voluntarily or involuntarily
(including by operation of law). Transferred and Transferable shall have a correlative
meaning.
ARTICLE III
ADMINISTRATION
ADMINISTRATION
3.1 The Committee. The Plan shall be administered and interpreted by the Committee.
To the extent required by applicable law, rule or regulation, it is intended that each member of
the Committee shall qualify as (a) a non-employee director under Rule 16b-3, (b) an outside
director under Code Section 162(m) and (c) an independent director under the rules of any
national securities exchange or national securities association, as applicable. If it is later
determined that one or more members of the Committee do not so qualify, actions taken by the
Committee prior to such determination shall be valid despite such failure to qualify. In the event
that any member of the Committee does not qualify as a non-employee director for purposes of
Section 16 of the Exchange Act, then all compensation that is intended to be exempt from Section 16
will also be approved by the Board or a subcommittee made up of members of the Board who qualify as
non-employee directors. In the event that any member of the Committee does not qualify as an
outside director for purposes of Section 162(m) of the Code, then all compensation that is
intended to be exempt from Section 162(m) of the Code will also be approved by a subcommittee made
up of members of the Board who qualify as outside directors.
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3.2 Grants of Awards. The Committee shall have full authority to grant, pursuant to
the terms of this Plan Stock Options to Eligible Individuals. In particular, the Committee shall
have the authority:
(a) to select the Eligible Individuals to whom Awards may from time to time be granted
hereunder;
(b) to determine whether and to what extent Awards are to be granted hereunder to one or more
Eligible Individuals;
(c) to determine the number of shares of Common Stock to be covered by each Award granted
hereunder;
(d) to determine the terms and conditions, not inconsistent with the terms of the Plan, of any
Award granted hereunder (including, but not limited to, the exercise or purchase price (if any),
any restriction or limitation, any vesting schedule or acceleration thereof, or any forfeiture
restrictions or waiver thereof, regarding any Award and the shares of Common Stock relating
thereto, based on such factors, if any, as the Committee shall determine, in its sole discretion);
(e) to determine whether, to what extent and under what circumstances grants of Awards under
the Plan are to operate on a tandem basis and/or in conjunction with or apart from other awards
made by the Company outside of this Plan;
(f) to determine whether and under what circumstances a Stock Option may be settled in cash
and/or Common Stock under Section 6.3(d);
(g) to determine whether to require a Participant, as a condition of the granting of any
Award, to not sell or otherwise dispose of shares acquired pursuant to the exercise of an Award for
a period of time as determined by the Committee, in its sole discretion, following the date of the
acquisition of such Award;
(h) to modify, extend or renew an Award, subject to Article VIII and Section 6.3(k); and
(i) solely to the extent permitted by applicable law, to determine whether, to what extent and
under what circumstances to provide loans (which may be on a recourse basis and shall bear interest
at the rate the Committee shall provide) to Participants in order to exercise Options under the
Plan.
3.3 Guidelines. Subject to Article VIII hereof, the Committee shall have the
authority to adopt, alter and repeal such administrative rules, guidelines and practices governing
the Plan and perform all acts, including the delegation of its responsibilities (to the extent
permitted by applicable law and applicable stock exchange rules), as it shall, from time to time,
deem advisable; to construe and interpret the terms and provisions of the Plan and any Award issued
under the Plan (and any agreements relating thereto); and to otherwise supervise the administration
of the Plan. The Committee may correct any defect, supply any omission or reconcile any
inconsistency in the Plan or in any agreement relating thereto in the manner and to
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the extent it shall deem necessary to effectuate the purpose and intent of the Plan. The
Committee may adopt special guidelines and provisions for persons who are residing in or employed
in, or subject to the taxes of, any domestic or foreign jurisdictions to comply with applicable tax
and securities laws of such domestic or foreign jurisdictions. Notwithstanding the foregoing, no
action of the Committee under this Section shall impair the rights of any Participant under an
Award Agreement or Award without the Participants consent. To the extent applicable, this Plan is
intended to comply with the applicable requirements of Rule 16b-3, and the Plan shall be limited,
construed and interpreted in a manner so as to comply therewith.
3.4 Decisions Final. Any decision, interpretation or other action made or taken in
good faith by or at the direction of the Company, the Board or the Committee (or any of its
members) arising out of or in connection with the Plan shall be within the absolute discretion of
all and each of them, as the case may be, and shall be final, binding and conclusive on the Company
and all employees and Participants and their respective heirs, executors, administrators,
successors and assigns.
3.5 Procedures. The Committee shall hold meetings, subject to the By-Laws of the
Company, at such times and places as it shall deem advisable, including, without limitation, by
telephone conference or by written consent to the extent permitted by applicable law. A majority
of the Committee members shall constitute a quorum. All determinations of the Committee shall be
made by a majority of its members. Any decision or determination reduced to writing and signed by
all of the Committee members in accordance with the By-Laws of the Company, shall be fully
effective as if it had been made by a vote at a meeting duly called and held. The Committee shall
keep minutes of its meetings and shall make such rules and regulations for the conduct of its
business as it shall deem advisable.
3.6 Designation of Consultants/Liability.
(a) The Committee may designate employees of the Company and professional advisors to assist
the Committee in the administration of the Plan and (to the extent permitted by applicable law and
applicable exchange rules) may grant authority to officers to grant Awards and/or execute
agreements or other documents on behalf of the Committee.
(b) The Committee may employ such legal counsel, consultants and agents as it may deem
desirable for the administration of the Plan and may rely upon any opinion received from any such
counsel or consultant and any computation received from any such consultant or agent. Expenses
incurred by the Committee or the Board in the engagement of any such counsel, consultant or agent
shall be paid by the Company. The Committee, its members and any person designated pursuant to
sub-section (a) above shall not be liable for any action or determination made in good faith with
respect to the Plan. To the maximum extent permitted by applicable law, no officer of the Company
or member or former member of the Committee or of the Board shall be liable for any action or
determination made in good faith with respect to the Plan or any Award granted under it.
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ARTICLE IV
SHARE LIMITATION
SHARE LIMITATION
4.1 Shares. (a) Subject to any increase or decrease pursuant to Section 4.2, the
aggregate number of shares of Common Stock that may be issued or used for reference purposes or
with respect to which Awards may be granted under the Plan shall not exceed twenty-five million
(25,000,000) shares. Such shares may be either authorized and unissued Common Stock or Common Stock
held in or acquired for the treasury of the Company or both. If any Option granted under the Plan
expires, terminates or is canceled for any reason without having been exercised in full, the number
of shares of Common Stock underlying any unexercised Award shall again be available for the purpose
of Awards under the Plan. In addition, any shares of Common Stock exchanged by a Participant or
withheld from a Participant as full or partial payment to the Company of the exercise price or tax
withholding upon exercise or payment of an Award under the Plan shall be added back to the
foregoing maximum share limitation and may be made subject to Awards under the Plan pursuant to
such limitation. Any Award under the Plan settled in cash shall not be counted against the
foregoing maximum share limitations.
4.2 Changes.
(a) The existence of the Plan and the Awards granted hereunder shall not affect in any way the
right or power of the Board or the stockholders of the Company to make or authorize (i) any
adjustment, recapitalization, reorganization or other change in the Companys capital structure or
its business, (ii) any merger or consolidation of the Company or any Affiliate, (iii) any issuance
of bonds, debentures, preferred or prior preference stock ahead of or affecting the Common Stock,
(iv) the dissolution or liquidation of the Company or any Affiliate, (v) any sale or transfer of
all or part of the assets or business of the Company or any Affiliate or (vi) any other corporate
act or proceeding.
(b) Subject to the provisions of Section 4.2(d), in the event of a dividend or other
distribution (whether in the form of cash, Common Stock, other securities, or other property) other
than regular cash dividends, recapitalization, stock split, reverse stock split, reorganization,
merger, consolidation, split-up, spin-off, combination, Change in Control or exchange of Common
Stock or other securities of the Company, or other corporate transaction or event affects the
Common Stock such that an adjustment is necessary or appropriate in order to prevent dilution or
enlargement of benefits or potential benefits intended to be made available under the Plan (a
Section 4.2 Event), the Committee shall equitably adjust (i) the number of shares of
Common Stock or other securities of the Company (or number and kind of other securities or
property) with respect to which Awards may be granted under the Plan, (ii) the maximum share
limitation applicable to each type of Award that may be granted to any individual participant in
any calendar year, (iii) the number of shares of Common Stock or other securities of the Company
(or number and kind of other securities or property) subject to outstanding Awards, and (iv) the
exercise price with respect to any Stock Option. Any such adjustment determined by the Committee
shall be final, binding and conclusive on the Company and all Participants and their respective
heirs, executors, administrators, successors and permitted assigns. If the Company enters into or
is involved in any merger, recapitalization, consolidation, reorganization, Change in Control or
other business combination with any person or entity (a Merger Event), the Committee may,
prior to such Merger Event and effective upon such Merger Event, take such action as it deems
appropriate, including, but not limited to, replacing Awards with substitute Awards in respect of
the shares, other securities or other property of the surviving corporation or any affiliate of the
surviving corporation on such terms and conditions, as to the number of shares, pricing and
9
otherwise, which shall substantially preserve the value, rights and benefits of any affected
Awards granted hereunder as of the date of the consummation of the Merger Event. Upon receipt by
any affected Participant of any such substitute Award (or payment) as a result of any such Merger
Event, such Participants affected Awards for which such substitute Awards (or payment) were
received shall be thereupon cancelled without the need for obtaining the consent of any such
affected Participant. In addition, subject to Section 4.2(d), if there shall occur any change in
the capital structure or the business of the Company that is not a Section 4.2 Event or Merger
Event (an Other Extraordinary Event), then the Committee, in its sole discretion, may
adjust any Award and make such other adjustments to the Plan. Except as expressly provided in this
Section 4.2 or in the applicable Award Agreement, a Participant shall have no rights by reason of
any Section 4.2 Event, Merger Event, or any Other Extraordinary Event.
(c) Fractional shares of Common Stock resulting from any adjustment in Awards pursuant to
Section 4.2(a) or 4.2(b) shall be aggregated until, and eliminated at, the time of exercise by
rounding-down for fractions less than one-half and rounding-up for fractions equal to or greater
than one-half. No cash settlements shall be made with respect to fractional shares eliminated by
rounding. Notice of any adjustment shall be given by the Committee to each Participant whose Award
has been adjusted and such adjustment (whether or not such notice is given) shall be effective and
binding for all purposes of the Plan.
(d) Unless otherwise expressly determined by the Committee in the applicable Award Agreement
or other written agreement approved by the Committee, in the event of a Merger Event in which the
Company is not the surviving entity or in the event of any transaction that results in the
acquisition of substantially all of the Companys outstanding Common Stock by a single person or
entity or by a group of persons and/or entities acting in concert, or in the event of the sale or
transfer of all or substantially all of the Companys assets (all of the foregoing being referred
to as an Acquisition Event), then:
(i) The Committee may, in its sole discretion, terminate all outstanding and unexercised
Stock Options (whether or not vested), effective as of the date of the Acquisition Event, by
delivering notice of termination to each Participant at least seven days prior to the date of
consummation of the Acquisition Event, in which case during the period from the date on which
such notice of termination is delivered to the consummation of the Acquisition Event, each such
Participant shall have the right to exercise in full all of his or her Awards that are then
outstanding and vested, but any such exercise may be indicated as contingent on the occurrence
of the Acquisition Event, and, provided that, if the Acquisition Event does not take place
within a specified period after giving such notice for any reason whatsoever, any such notice
and contingent exercise pursuant thereto shall be null and void. If an Acquisition Event occurs
but the Committee does not terminate the outstanding Awards pursuant to this Section 4.2(d),
then the provisions of Section 4.2(b) and Article VII shall apply.
(ii) Each Participant shall vote for, consent to and raise no objections against such
Acquisition Event. If the Acquisition Event is structured as (i) a Merger Event, each
Participant shall waive any dissenters rights, appraisal rights or similar rights in connection
with such merger or consolidation or (ii) a sale of capital stock, each Participant shall agree
to sell all of his or her Awards and rights to acquire Awards on the
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terms and conditions approved by the Board and/or the Committee. Each Participant shall
take all necessary or desirable actions in connection with the consummation of the Acquisition
Event or any public offering of the Common Stock as requested by the Company and/or the
Committee.
(iii) If the Company or the holders of the Companys securities enter into any negotiation
or transaction for which Rule 506 (or any similar rule then in effect) promulgated by the
Securities and Exchange Commission may be available with respect to such negotiation or
transaction (including a merger, consolidation or other reorganization), each Participant shall,
at the request of the Company, appoint a purchaser representative (as such term is defined in
Rule 501 promulgated by the Securities and Exchange Commission) reasonably acceptable to the
Company. If any Participant appoints a purchaser representative designated by the Company, the
Company shall pay the fees of such purchaser representative, but if any Participant declines to
appoint the purchaser representative designated by the Company, such Participant shall appoint
another purchaser representative, and such Participant shall be responsible for the fees of the
purchaser representative so appointed.
4.3 Minimum Purchase Price. Notwithstanding any provision of the Plan to the
contrary, if authorized but previously unissued shares of Common Stock are issued under the Plan,
such shares shall not be issued for a consideration that is less than as permitted under applicable
law.
ARTICLE V
ELIGIBILITY
ELIGIBILITY
5.1 General Eligibility. All current and prospective Eligible Individuals are
eligible to be granted Awards. Eligibility for the grant of Awards and actual participation in the
Plan shall be determined by the Committee in its sole discretion.
5.2 General Requirement. The vesting and exercise of Awards granted to a prospective
Eligible Individual are conditioned upon such individual actually becoming an Eligible Employee,
Consultant or Non-Employee Director, respectively.
ARTICLE VI
STOCK OPTIONS
STOCK OPTIONS
6.1 Options. Stock Options may be granted alone or in addition to other Awards (if
any) granted under the Plan. Each Stock Option granted under the Plan shall be a Non-Qualified
Stock Option.
6.2 Grants. The Committee shall have the authority to grant to any Eligible Employee
one or more Non-Qualified Stock Options. The Committee shall have the authority to grant any
Consultant or Non-Employee Director one or more Non-Qualified Stock Options.
6.3 Terms of Options. Options granted under the Plan shall be subject to the
following terms and conditions and shall be in such form and contain such additional terms and
conditions, not inconsistent with the terms of the Plan, as the Committee shall deem desirable:
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(a) Exercise Price. The exercise price per share of Common Stock subject to a Stock
Option shall be determined by the Committee at the time of grant.
(b) Stock Option Term. The term of each Stock Option shall be fixed by the Committee;
provided, however, that no Stock Option shall be exercisable after August 26, 2021.
(c) Exercisability. Unless otherwise provided by the Committee in accordance with the
provisions of this Section 6.3, Stock Options granted under the Plan shall be exercisable at such
time or times and subject to such terms and conditions as shall be determined by the Committee at
the time of grant. If the Committee provides, in its discretion, that any Stock Option is
exercisable subject to certain limitations (including, without limitation, that such Stock Option
is exercisable only in installments or within certain time periods), the Committee may waive such
limitations on the exercisability at any time at or after the time of grant in whole or in part
(including, without limitation, waiver of the installment exercise provisions or acceleration of
the time at which such Stock Option may be exercised), based on such factors, if any, as the
Committee shall determine, in its sole discretion. Unless otherwise determined by the Committee at
the time of grant, the Option agreement shall provide that (i) in the event that the Participant
engages in Detrimental Activity prior to any exercise of the Stock Option (whether vested or
unvested), all Stock Options held by the Participant shall thereupon terminate and expire, (ii) as
a condition of the exercise of a Stock Option, the Participant shall be required to certify (or
shall be deemed to have certified) at the time of exercise in a manner acceptable to the Company
that the Participant is in compliance with the terms and conditions of the Plan and that the
Participant has not engaged in, and does not intend to engage in, any Detrimental Activity, and
(iii) in the event that the Participant engages in Detrimental Activity during the one-year period
commencing on the date that the Stock Option is exercised or becomes vested, the Company shall be
entitled to recover from the Participant at any time within one year after such exercise or
vesting, and the Participant shall pay over to the Company, an amount equal to any gain realized as
a result of the exercise (whether at the time of exercise or thereafter).
(d) Method of Exercise. Subject to whatever installment exercise and waiting period
provisions apply under Section 6.3(c), to the extent vested, Stock Options may be exercised in
whole or in part at any time during the Option term, by giving written notice of exercise to the
Company specifying the number of shares of Common Stock to be purchased. Such notice shall be
accompanied by payment in full of the purchase price as follows: (i) in cash or by check, bank
draft or money order payable to the order of the Company; (ii) solely to the extent permitted by
applicable law, if the Common Stock is traded on a national securities exchange, and the Committee
authorizes, through a procedure whereby the Participant delivers irrevocable instructions to a
broker reasonably acceptable to the Committee to deliver promptly to the Company an amount equal to
the purchase price; or (iii) on such other terms and conditions as may be acceptable to the
Committee (including, without limitation, having the Company withhold shares of Common Stock
issuable upon exercise of the Stock Options or by payment in full or in part in the form of Common
Stock owned by the Participant based on the Fair Market Value of the Common Stock on the payment
date as determined by the Committee). No shares of Common Stock shall be issued until payment
therefore, as provided herein, has been made or provided for.
(e) Non-Transferability of Options. No Stock Option shall be Transferable by the
Participant other than by will or by the laws of descent and distribution, and all Stock Options
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shall be exercisable, during the Participants lifetime, only by the Participant.
Notwithstanding the foregoing, the Committee may determine, in its sole discretion, at the time of
grant or thereafter that a Non-Qualified Stock Option that is otherwise not Transferable pursuant
to this Section is Transferable to a Family Member in whole or in part and in such circumstances,
and under such conditions, as specified by the Committee. A Non-Qualified Stock Option that is
Transferred to a Family Member pursuant to the preceding sentence (i) may not be subsequently
Transferred otherwise than by will or by the laws of descent and distribution and (ii) remains
subject to the terms of this Plan and the applicable Award Agreement. Any shares of Common Stock
acquired upon the exercise of a Non-Qualified Stock Option by a permissible transferee of a
Non-Qualified Stock Option or a permissible transferee pursuant to a Transfer after the exercise of
the Non-Qualified Stock Option shall be subject to the terms of this Plan and the applicable Award
Agreement.
(f) Termination by Death or Disability. Unless otherwise determined by the Committee
at the time of grant, or if no rights of the Participant are reduced, thereafter, if a
Participants Termination is by reason of death or Disability, all Stock Options that are held by
such Participant that are vested and exercisable at the time of the Participants Termination may
be exercised by the Participant at any time within a period of six (6)-month from the date of such
Termination (or in the case of death, by the legal representative of the Participants estate), but
in no event beyond the expiration of the stated term of such Stock Options; provided, however,
that, in the case of a Termination due to Disability, if the Participant dies within such exercise
period, all unexercised Stock Options held by such Participant shall thereafter be exercisable, to
the extent to which they were exercisable at the time of death, for a period of one year from the
date of such death, but in no event beyond the expiration of the stated term of such Stock Options.
(g) Involuntary Termination Without Cause. Unless otherwise determined by the
Committee at the time of grant, or if no rights of the Participant are reduced, thereafter, if a
Participants Termination is by involuntary termination without Cause, all Stock Options that are
held by such Participant that are vested and exercisable at the time of the Participants
Termination may be exercised by the Participant at any time within a period of 30 days from the
date of such Termination, but in no event beyond the expiration of the stated term of such Stock
Options.
(h) Voluntary Termination. Unless otherwise determined by the Committee at the time
of grant, or if no rights of the Participant are reduced, thereafter, if a Participants
Termination is voluntary (other than a voluntary termination described in Section 6.3(i)(y)
hereof), all Stock Options that are held by such Participant that are vested and exercisable at the
time of the Participants Termination may be exercised by the Participant at any time within a
period of seven days from the date of such Termination, but in no event beyond the expiration of
the stated term of such Stock Options.
(i) Termination for Cause. Unless otherwise determined by the Committee at the time
of grant, or if no rights of the Participant are reduced, thereafter, if a Participants
Termination (x) is for Cause or (y) is a voluntary Termination (as provided in Section 6.3(h))
after the occurrence of an event that would be grounds for a Termination for Cause, all Stock
Options, whether vested or not vested, that are held by such Participant shall thereupon terminate
and expire as of the date of such Termination.
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(j) Unvested Stock Options. Unless otherwise determined by the Committee at the time
of grant, or if no rights of the Participant are reduced, thereafter, Stock Options that are not
vested as of the date of a Participants Termination for any reason shall terminate and expire as
of the date of such Termination.
(k) Form, Modification, Extension and Renewal of Stock Options. Subject to the terms
and conditions and within the limitations of the Plan, Stock Options shall be evidenced by such
form of agreement or grant as is approved by the Committee, and the Committee may (i) modify,
extend or renew outstanding Stock Options granted under the Plan (provided that the rights of a
Participant are not reduced without his or her consent), and (ii) accept the surrender of
outstanding Stock Options (up to the extent not theretofore exercised) and authorize the granting
of new Stock Options in substitution therefor (to the extent not theretofore exercised).
Notwithstanding anything herein to the contrary, unless otherwise provided in the Award Agreement,
the Committee may, at its sole and absolute discretion, (i) lower the strike price of a Stock
Option after it is granted, or take any other action with the effect of lowering the strike price
of a Stock Option after it is granted, or (ii) permit the cancellation of a Stock Option in
exchange for another Award.
(l)
Deferred Delivery of Common Stock. The Committee may in its discretion permit
Participants to defer delivery of Common Stock acquired pursuant to a Participants exercise of an
Option in accordance with the terms and conditions established by the Committee in the applicable
Award Agreement.
(m) Early Exercise. The Committee may elect to provide that a Stock Option include a
written provision whereby the Participant may elect at any time before the Participants
Termination to exercise the Stock Option as to any part or all of the shares of Common Stock
subject to the Stock Option prior to the full vesting of the Stock Option. 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 Committee determines to be appropriate.
(n) Cashing-Out of Stock Options. Unless otherwise provided in the Award Agreement,
on receipt of written notice of exercise, the Committee may elect to cash-out all or part of the
portion of the shares for which an Option is being exercised by paying the optionee an amount, in
cash or shares of Common Stock, equal to the excess of the Fair Market Value of the shares of
Common Stock over the exercise price multiplied by the number of shares of Common Stock for which
the Option is being exercised on the effective date of such cash-out.
(o) Other Terms and Conditions. Stock Options may contain such other provisions,
which shall not be inconsistent with any of the terms of the Plan, as the Committee shall deem
appropriate including, without limitation, permitting reloads such that the same number of Stock
Options are granted as the number of Stock Options exercised, shares used to pay for the exercise
price of Stock Options or shares used to pay withholding taxes (Reloads). With respect
to Reloads, the exercise price of the new Stock Option shall be the Fair Market Value on the date
of the reload and the term of the Stock Option shall be the same as the remaining term of the
Stock Options that are exercised, if applicable, or such other exercise price and term as
determined by the Committee.
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ARTICLE VII
CHANGE IN CONTROL PROVISIONS
CHANGE IN CONTROL PROVISIONS
7.1 Benefits. In the event of a Change in Control of the Company (as defined below),
and except as otherwise provided by the Committee in an Award Agreement, a Participants unvested
Award shall not vest and a Participants Award shall be treated in accordance with one of the
following methods as determined by the Committee:
(a) Awards, whether or not then vested, shall be continued, assumed, have new rights
substituted therefor or be treated in accordance with Section 4.2(d) hereof, as determined by the
Committee, and restrictions to which any Award granted prior to the Change in Control are subject
shall not lapse upon a Change in Control and the Award shall, where appropriate in the sole
discretion of the Committee, receive the same distribution as other Common Stock of the same class
or series on such terms as determined by the Committee; provided, however, that the Committee may
decide to award additional Awards in lieu of any cash distribution.
(b) The Committee, in its sole discretion, may provide for the purchase of any Awards by the
Company or an Affiliate for an amount of cash equal to the excess (if any) of the Change in Control
Price (as defined below) of the shares of Common Stock covered by such Awards, over the aggregate
exercise price of such Awards. For purposes of this Section 7.1, Change in Control Price
shall mean the highest price per share of Common Stock paid in any transaction related to a Change
in Control of the Company.
(c) Notwithstanding any other provision herein to the contrary, the Committee may, in its sole
discretion, provide for accelerated vesting or lapse of restrictions, of an Award at any time.
7.2 Change in Control. Unless otherwise determined by the Committee in the applicable
Award Agreement or other written agreement approved by the Committee, a Change in Control shall
be deemed to occur if:
(a) any person, as such term is used in Sections 13(d) and 14(d) of the Exchange Act (other
than the Company, any trustee or other fiduciary holding securities under any employee benefit plan
of the Company, or any company owned, directly or indirectly, by the stockholders of the Company in
substantially the same proportions as their ownership of Common Stock of the Company), becoming the
beneficial owner (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of
securities of the Company representing 50% or more of the combined voting power of the Companys
then outstanding securities;
(b) during any period of two consecutive years, individuals who at the beginning of such
period constitute the Board, and any new director (other than a director designated by a person who
has entered into an agreement with the Company to effect a transaction described in paragraph (a),
(c), or (d) of this Section 7.2 or a director whose initial assumption of office occurs as a result
of either an actual or threatened election contest (as such term is used in Rule 14a-11 of
Regulation 14A promulgated under the Exchange Act) or other actual or threatened solicitation of
proxies or consents by or on behalf of a person other than the
15
Board) whose election by the Board or nomination for election by the Companys stockholders
was approved by a vote of at least two-thirds of the directors then still in office who either were
directors at the beginning of the two-year period or whose election or nomination for election was
previously so approved, cease for any reason to constitute at least a majority of the Board;
(c) a merger or consolidation of the Company with any other corporation, other than a merger
or consolidation which would result in the voting securities of the Company outstanding immediately
prior thereto continuing to represent (either by remaining outstanding or by being converted into
voting securities of the surviving entity) more than 50% of the combined voting power of the voting
securities of the Company or such surviving entity outstanding immediately after such merger or
consolidation; provided, however, that a merger or consolidation effected to implement a
recapitalization of the Company (or similar transaction) in which no person (other than those
covered by the exceptions in Section 7.2(a)) acquires more than 50% of the combined voting power of
the Companys then outstanding securities shall not constitute a Change in Control of the Company;
or
(d) a complete liquidation or dissolution of the Company or the consummation of a sale or
disposition by the Company of all or substantially all of the Companys assets other than the sale
or disposition of all or substantially all of the assets of the Company to a person or persons who
beneficially own, directly or indirectly, 50% or more of the combined voting power of the
outstanding voting securities of the Company at the time of the sale.
7.3 Initial Public Offering not a Change in Control. Notwithstanding the foregoing,
for purposes of the Plan, the occurrence of the Registration Date or any change in the composition
of the Board within one year following the Registration Date shall not be considered a Change in
Control.
ARTICLE VIII
TERMINATION OR AMENDMENT OF PLAN
TERMINATION OR AMENDMENT OF PLAN
8.1 Termination or Amendment. Notwithstanding any other provision of the Plan, the
Board may at any time, and from time to time, amend, in whole or in part, any or all of the
provisions of the Plan (including any amendment deemed necessary to ensure that the Company may
comply with any regulatory requirement referred to in Article XI), or suspend or terminate it
entirely, retroactively or otherwise; provided, however, that, unless otherwise required by law or
specifically provided herein, the rights of a Participant with respect to Awards granted prior to
such amendment, suspension or termination, may not be impaired without the consent of such
Participant and; provided, further, that without the approval of the holders of the Companys
Common Stock entitled to vote in accordance with applicable law, no amendment may be made that
would (i) increase the aggregate number of shares of Common Stock that may be issued under the Plan
(except by operation of Section 4.2); (ii) change the classification of individuals eligible to
receive Awards under the Plan; or (iii) extend the maximum option period under Section 6.3.
Notwithstanding anything herein to the contrary, the Board may amend the Plan or any Award
Agreement at any time without a Participants consent to comply with applicable law.
The Committee may amend the terms of any Award theretofore granted, prospectively or
retroactively, but, subject to Article IV or as otherwise specifically provided herein, no such
16
amendment or other action by the Committee shall impair the rights of any holder without the
holders consent.
ARTICLE IX
COMPANY CALL RIGHTS; RIGHTS OF FIRST REFUSAL
COMPANY CALL RIGHTS; RIGHTS OF FIRST REFUSAL
9.1 Company Call Rights.
(a) In the event of a Participants Termination for Cause, a Participants voluntary
Termination after the occurrence of an event that would be grounds for a Termination for Cause, or
the discovery that a Participant engaged in Detrimental Activity, the Company may, at any time
following (i) the later of the date of Termination and the date that is more than one hundred
eighty (180) days following the date on which such Participant acquired the applicable shares of
Common Stock or (ii) such discovery that the Participant engaged in Detrimental Activity,
repurchase from the Participant such previously acquired shares of Common Stock at a repurchase
price equal to the lesser of (i) the original purchase price or exercise price (as applicable), if
any, and (ii) Fair Market Value as of the date of repurchase.
(b) In the event of a Participants Termination for any reason other than as described in
Section 9.1(a) above, the Company may, at any time following the later of (i) the date of
Termination and (ii) the date that is more than one hundred eighty (180) days following the date on
which such Participant acquired the applicable shares of Common Stock through the exercise, grant
or payment of an Award under the Plan, repurchase from the Participant any shares of Common Stock
at a repurchase price equal to Fair Market Value as of the date of repurchase.
(c) If the Company elects to exercise the rights under this Section 9.1, the Company shall do
so by delivering to the Participant a notice of such election, specifying the number of shares to
be purchased and the closing date and time of such purchase. Such closing shall take place within
thirty (30) days following such notice at the Companys principal executive offices. At such
closing, the Company shall pay the Participant the repurchase price as specified in this Section
9.1 in cash or by cancellation of indebtedness of the Participant. The Company will be entitled to
receive (and the Participant shall, and hereby does, deliver) customary representations and
warranties from the Participant regarding the Common Stock being repurchased including, but not
limited to, the representation that the Participant has good and marketable title to the Common
Stock to be repurchased free and clear of all liens, claims and other encumbrances.
(d) All repurchases shall be subject to applicable restrictions contained in the Delaware
General Corporation Law and in the Companys and its Subsidiaries debt financing agreements. If
any such restrictions prohibit the repurchase of Common Stock for cash, the Company shall have the
right to deliver, as payment of the repurchase price, a subordinated note or notes payable in up to
five equal annual installments beginning on the first anniversary of the repurchase closing and
bearing interest at a rate per annum equal to the greater of the prime rate then in effect and 5%
(provided that such notes shall accelerate and be payable in full once the Company is permitted to
repurchase the Common Stock or repay such notes under the debt financing agreements or, if earlier,
upon a Change in Control). Any such notes issued by the
17
Company shall be subject to any restrictive covenants in debt financing agreements to which
the Company is subject at the time of the repurchase closing. If any such restrictions prohibit
the repurchase of Common Stock for such subordinated notes, then the time periods provided herein
for repurchases shall be suspended, and the Company may make such repurchases as soon as it is
permitted to do so under such restrictions.
9.2 Right of First Refusal. No Participant shall, directly or indirectly, Transfer
any shares of Common Stock acquired by the Participant (or the Participants estate or legal
representative) pursuant to an Award under the Plan, unless in each such instance the Participant
(or the Participants estate or legal representative) shall have first offered the Common Stock
proposed to be Transferred pursuant to a bona fide offer by a third party to the Company. The
right of first refusal must be exercised by the Company by delivering to the Participant (or the
Participants estate or legal representative) written notice of such exercise within twenty (20)
business days of the Companys receipt of written notification of the proposed sale. Upon the
exercise of a right of first refusal, the Common Stock proposed to be sold shall be purchased by
the Company at the price per share offered to be paid by the prospective transferee, subject to
Section 9.1 hereof in the case of a Participants Termination. The notice of exercise of the right
of first refusal shall specify the date and location for the closing of such purchase.
ARTICLE X
UNFUNDED STATUS OF PLAN
UNFUNDED STATUS OF PLAN
The Plan is intended to constitute an unfunded plan for incentive and deferred compensation.
With respect to any payment as to which a Participant has a fixed and vested interest but which
are not yet made to a Participant by the Company, nothing contained herein shall give any such
Participant any right that is greater than those of a general unsecured creditor of the Company.
ARTICLE XI
GENERAL PROVISIONS
GENERAL PROVISIONS
11.1 Legend. The Committee may require each person receiving shares of Common Stock
pursuant to a Stock Option or other Award under the Plan to represent to and agree with the Company
in writing that the Participant is acquiring the shares without a view to distribution thereof. In
addition to any legend required by the Plan, the certificates for such shares may include any
legend that the Committee deems appropriate to reflect any restrictions on Transfer. All
certificates for shares of Common Stock delivered under the Plan shall be subject to such stop
transfer orders and other restrictions as the Committee may deem advisable under the rules,
regulations and other requirements of the Securities and Exchange Commission, any stock exchange
upon which the Common Stock is then listed or any national securities exchange system upon whose
system the Common Stock is then quoted, any applicable federal or state securities law, and any
applicable corporate law, and the Committee may cause a legend or legends to be put on any such
certificates to make appropriate reference to such restrictions.
11.2 Other Plans. Nothing contained in the Plan shall prevent the Board from adopting
other or additional compensation arrangements, subject to stockholder approval if such approval is
18
required, and such arrangements may be either generally applicable or applicable only in
specific cases.
11.3 No Right to Employment/Directorship/Consultancy. Neither the Plan nor the grant
of any Option or other Award hereunder shall give any Participant or other employee, Consultant or
Non-Employee Director any right with respect to continuance of employment, consultancy or
directorship by the Company or any Affiliate, nor shall there be a limitation in any way on the
right of the Company or any Affiliate by which an employee is employed or a Consultant or
Non-Employee Director is retained to terminate his or her employment, consultancy or directorship
at any time.
11.4 Withholding of Taxes. The Company shall have the right to deduct from any
payment to be made pursuant to the Plan, or to otherwise require, prior to the issuance or delivery
of shares of Common Stock or the payment of any cash hereunder, payment by the Participant of, any
federal, state or local taxes required by law to be withheld. Upon the vesting of Awards that are
taxable upon vesting, or upon making an election under Section 83(b) of the Code, a Participant
shall pay all required withholding to the Company. Any statutorily required withholding obligation
with regard to any Participant may be satisfied, subject to the consent of the Committee, by
reducing the number of shares of Common Stock otherwise deliverable or by delivering shares of
Common Stock already owned. Any fraction of a share of Common Stock required to satisfy such tax
obligations shall be disregarded and the amount due shall be paid instead in cash by the
Participant.
11.5 No Assignment of Benefits. No Award or other benefit payable under the Plan
shall, except as otherwise specifically provided by law or permitted by the Committee, be
Transferable in any manner, and any attempt to Transfer any such benefit shall be void, and any
such benefit shall not in any manner be liable for or subject to the debts, contracts, liabilities,
engagements or torts of any person who shall be entitled to such benefit, nor shall it be subject
to attachment or legal process for or against such person.
11.6 Listing and Other Conditions.
(a) Unless otherwise determined by the Committee, if and as long as the Common Stock is listed
on a national securities exchange or system sponsored by a national securities association, the
issuance of shares of Common Stock pursuant to an Award shall be conditioned upon such shares being
listed on such exchange or system.
(b) If at any time counsel to the Company shall be of the opinion that any sale or delivery of
shares of Common Stock pursuant to an Option or other Award is or may in the circumstances be
unlawful or result in the imposition of excise taxes on the Company under the statutes, rules or
regulations of any applicable jurisdiction, the Company shall have no obligation to make such sale
or delivery, or to make any application or to effect or to maintain any qualification or
registration under the Securities Act or otherwise, with respect to shares of Common Stock or
Awards, and the right to exercise any Option or other Award shall be suspended until, in the
opinion of said counsel, such sale or delivery shall be lawful or will not result in the imposition
of excise taxes on the Company.
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(c) Upon termination of any period of suspension under this Section 11.6, any Award affected
by such suspension which shall not then have expired or terminated shall be reinstated as to all
shares available before such suspension and as to shares which would otherwise have become
available during the period of such suspension, but no such suspension shall extend the term of any
Award.
(d) A Participant shall be required to supply the Company with certificates, representations
and information that the Company requests and otherwise cooperate with the Company in obtaining any
listing, registration, qualification, exemption, consent or approval the Company deems necessary or
appropriate.
11.7 Stockholders Agreement and Other Requirements. Notwithstanding anything herein
to the contrary, as a condition to the receipt of shares of Common Stock pursuant to an Award under
the Plan, to the extent required by the Committee, the Other Stockholder shall execute and deliver
a stockholders agreement or such other documentation that shall set forth certain restrictions on
transferability of the shares of Common Stock acquired upon exercise or purchase, and such other
terms as the Board or Committee shall from time to time establish. Such stockholders agreement or
other documentation shall apply to the Common Stock acquired under the Plan and covered by such
stockholders agreement or other documentation. The Company may require, as a condition of
exercise, the Other Stockholder to become a party to any other existing stockholder agreement (or
other agreement).
11.8 Governing Law. The Plan and actions taken in connection herewith shall be
governed and construed in accordance with the laws of the State of Delaware (regardless of the law
that might otherwise govern under applicable Delaware principles of conflict of laws).
11.9 Jurisdiction; Waiver of Jury Trial. Any suit, action or proceeding with respect
to the Plan or any Award Agreement, or any judgment entered by any court of competent jurisdiction
in respect of any thereof, shall be resolved only in the courts of the State of Delaware or the
United States District Court for the District of Delaware and the appellate courts having
jurisdiction of appeals in such courts. In that context, and without limiting the generality of
the foregoing, the Company and each Participant shall irrevocably and unconditionally (a) submit in
any proceeding relating to the Plan or any Award Agreement, or for the recognition and enforcement
of any judgment in respect thereof (a Proceeding), to the exclusive jurisdiction of the
courts of the State of Delaware, the court of the United States of America for the District of
Delaware, and appellate courts having jurisdiction of appeals from any of the foregoing, and agree
that all claims in respect of any such Proceeding shall be heard and determined in such Delaware
State court or, to the extent permitted by law, in such federal court, (b) consent that any such
Proceeding may and shall be brought in such courts and waives any objection that the Company and
each Participant may now or thereafter have to the venue or jurisdiction of any such Proceeding in
any such court or that such Proceeding was brought in an inconvenient court and agree not to plead
or claim the same, (c) waive all right to trial by jury in any Proceeding (whether based on
contract, tort or otherwise) arising out of or relating to the Plan or any Award Agreement, (d)
agree that service of process in any such Proceeding may be effected by mailing a copy of such
process by registered or certified mail (or any substantially similar form of mail), postage
prepaid, to such party, in the case of a Participant, at the Participants address shown in the
books and records of the Company or, in the case of the Company, at the Companys principal
20
offices, attention General Counsel, and (e) agree that nothing in the Plan shall affect the
right to effect service of process in any other manner permitted by the laws of the State of
Delaware.
11.10 Construction. Wherever any words are used in the Plan in the masculine gender
they shall be construed as though they were also used in the feminine gender in all cases where
they would so apply, and wherever words are used herein in the singular form they shall be
construed as though they were also used in the plural form in all cases where they would so apply.
11.11 Other Benefits. No Award granted or paid out under the Plan shall be deemed
compensation for purposes of computing benefits under any retirement plan of the Company or its
Affiliates nor affect any benefit under any other benefit plan now or subsequently in effect under
which the availability or amount of benefits is related to the level of compensation.
11.12 Costs. The Company shall bear all expenses of the Company, the Board and the
Committee associated with administering this Plan, including expenses of issuing Common Stock
pursuant to Awards hereunder.
11.13 No Right to Same Benefits. The provisions of Awards need not be the same with
respect to each Participant, and such Awards to individual Participants need not be the same in
subsequent years.
11.14 Death/Disability. The Committee may in its discretion require the transferee of
a Participant to supply it with written notice of the Participants death or Disability and to
supply it with a copy of the will (in the case of the Participants death) or such other evidence
as the Committee deems necessary to establish the validity of the transfer of an Award. The
Committee may also require that the agreement of the transferee to be bound by all of the terms and
conditions of the Plan.
11.15 Section 16(b) of the Exchange Act. All elections and transactions under the
Plan by persons subject to Section 16 of the Exchange Act involving shares of Common Stock are
intended to comply with any applicable exemptive condition under Rule 16b-3. The Committee may
establish and adopt written administrative guidelines, designed to facilitate compliance with
Section 16(b) of the Exchange Act, as it may deem necessary or proper for the administration and
operation of the Plan and the transaction of business thereunder.
11.16 Section 409A of the Code. Neither the Company nor any of its Affiliates makes
any representations with respect to the application of Section 409A of the Code to any Option
granted under the Plan and, by the acceptance of an Option, a Participant agrees to accept the
potential application of Section 409A of the Code to such Option and the tax consequences of the
issuance, vesting, ownership, modification, adjustment, exercise and disposition of such Option.
11.17 Successor and Assigns. The Plan shall be binding on all successors and
permitted assigns of a Participant, including, without limitation, the estate of such Participant
and the executor, administrator or trustee of such estate.
11.18 Severability of Provisions. If any provision of the Plan shall be held invalid
or unenforceable, such invalidity or unenforceability shall not affect any other provisions hereof,
and the Plan shall be construed and enforced as if such provisions had not been included.
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11.19 Payments to Minors, Etc. Any benefit payable to or for the benefit of a minor,
an incompetent person or other person incapable of receipt thereof shall be deemed paid when paid
to such persons guardian or to the party providing or reasonably appearing to provide for the care
of such person, and such payment shall fully discharge the Committee, the Board, the Company, its
Affiliates and their employees, agents and representatives with respect thereto.
11.20 Lock-Up Agreements. As a condition to the grant of an Award, if requested by
the Company and the lead underwriter of any public offering of the Common Stock (the Lead
Underwriter), a Participant shall irrevocably agree not to sell, contract to sell, grant any
option to purchase, transfer the economic risk of ownership in, make any short sale of, pledge or
otherwise transfer or dispose of, any interest in any Common Stock or any securities convertible
into, derivative of, or exchangeable or exercisable for, or any other rights to purchase or acquire
Common Stock (except Common Stock included in such public offering or acquired on the public market
after such offering) during such period of time following the effective date of a registration
statement of the Company filed under the Securities Act that the Lead Underwriter shall specify
(the Lock-Up Period). The Participant shall further agree to sign such documents as may
be requested by the Lead Underwriter to effect the foregoing and agree that the Company may impose
stop-transfer instructions with respect to Common Stock acquired pursuant to an Award until the end
of such Lock-Up Period.
11.21 Headings and Captions. The headings and captions herein are provided for
reference and convenience only, shall not be considered part of the Plan, and shall not be employed
in the construction of the Plan.
ARTICLE XII
EFFECTIVE DATE OF PLAN
EFFECTIVE DATE OF PLAN
The Plan shall become effective at 12:01 a.m. Eastern Time on August 26, 2011, which shall be
the date of its adoption by the Board, subject to the approval of the Plan by the stockholders of
the Company in accordance with the requirements of the laws of the State of Delaware.
ARTICLE XIII
TERM OF PLAN
TERM OF PLAN
No Award shall be granted pursuant to the Plan on or after the tenth anniversary of the
earlier of the date that the Plan is adopted or the date of stockholder approval, but Awards
granted prior to such tenth anniversary may extend beyond that date.
ARTICLE XIV
NAME OF PLAN
NAME OF PLAN
This Plan shall be known as the Conexant Holdings, Inc. 2011 Incentive Compensation Plan.
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