UNITED STATES
SECURITIES AND EXCHANGE
COMMISSION
Washington, D.C.
20549
___________________
FORM 8-K
___________________
CURRENT
REPORT
Pursuant to Section 13 or
15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of
earliest event reported): August 31, 2015
___________________
Quantum
Corporation
(Exact name of registrant
as specified in its charter)
___________________
Delaware
(State or other
jurisdiction of incorporation)
1-13449 |
94-2665054 |
(Commission File No.) |
(IRS Employer Identification
No.) |
224 Airport
Parkway
San Jose, CA 95110
(Address of principal
executive offices and zip code)
Registrants telephone
number, including area code: (408) 944-4000
___________________
Check the appropriate box
below if the Form 8-K filing is intended to simultaneously satisfy the filing
obligation of the registrant under any of the following provisions (see General
Instruction A.2. below):
☐ |
|
Written communications pursuant to Rule 425 under the Securities
Act (17 CFR 230.425) |
☐ |
|
Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12) |
☐ |
|
Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b)) |
☐ |
|
Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c)) |
Item 5.02 Departure of
Directors or Certain Officers; Election of Directors; Appointment of Certain
Officers; Compensatory Arrangements of Certain Officers.
Approval of Amendment to
Long-Term Incentive Plan at Annual Meeting
At the annual meeting of
stockholders (the Annual Meeting) of Quantum Corporation (the Company) held
on August 31, 2015, the stockholders of the Company approved and ratified an
amendment to the 2012 Long-Term Incentive Plan (the Plan) to increase the number of shares of Common Stock
available for issuance under the Plan by 8,750,000 shares.
The terms and conditions of
the Plan are described in the Companys definitive proxy statement, filed with
the Securities and Exchange Commission on July 21, 2015. The Plan is
filed as Exhibit 10.1 hereto and is incorporated by reference herein.
Item
5.07. Submission of Matters to a Vote of Security
Holders.
The following is a brief
description of each matter submitted to a vote at the Annual Meeting held on
August 31, 2015, as well as the number of votes with respect to each matter. For
more information about these proposals, please refer to the Companys Proxy
Statement filed with the Securities and Exchange Commission on July 21, 2015.
Proposal 1
The stockholders elected
the nine nominees for director recommended by the Companys Board of Directors
(the Board) to the Board to serve until the next Annual Meeting or until their
successors are elected and duly qualified, as set forth below:
Nominee |
|
For |
|
Against |
|
Abstain |
|
Broker
Non-Votes |
Robert J.
Andersen |
|
179,150,484 |
|
2,392,718 |
|
276,817 |
|
50,369,394 |
Paul R. Auvil III |
|
177,042,224 |
|
4,545,756 |
|
232,039 |
|
50,369,394 |
Philip
Black |
|
178,739,864 |
|
2,848,396 |
|
231,759 |
|
50,369,394 |
Louis DiNardo |
|
177,796,994 |
|
3,791,506 |
|
231,519 |
|
50,369,394 |
Dale L.
Fuller |
|
179,198,598 |
|
2,389,902 |
|
231,519 |
|
50,369,394 |
Jon W. Gacek |
|
177,284,256 |
|
4,305,825 |
|
229,938 |
|
50,369,394 |
David A.
Krall |
|
178,718,668 |
|
2,870,059 |
|
231,292 |
|
50,369,394 |
Gregg J. Powers |
|
179,029,997 |
|
2,558,745 |
|
231,277 |
|
50,369,394 |
David E.
Roberson |
|
178,710,182 |
|
2,878,316 |
|
231,521 |
|
50,369,394 |
Proposal 2
The stockholders ratified
the appointment of PricewaterhouseCoopers LLP as the independent registered
public accounting firm of the Company for the fiscal year ending March 31, 2016,
as set forth below:
For |
|
Against |
|
Abstain |
|
Broker Non-Votes |
230,127,154 |
|
2,004,059 |
|
58,200 |
|
-- |
Proposal 3
The stockholders voted for
the adoption of a resolution approving, on an advisory basis, the compensation
of the Companys named executive officers, as set forth below:
For |
|
Against |
|
Abstain |
|
Broker Non-Votes |
175,754,455 |
|
5,938,539 |
|
127,025 |
|
50,369,394 |
Proposal 4
The stockholders approved
and ratified an amendment to the Companys 2012 Long-Term Incentive Plan to
increase the number of shares of Common Stock available for issuance under the
Plan by 8,750,000 shares, as set forth below:
For |
|
Against |
|
Abstain |
|
Broker Non-Votes |
141,916,724 |
|
39,764,040 |
|
139,255 |
|
50,369,394 |
Item 9.01 Financial
Statements and Exhibits.
(d) Exhibits
Exhibit |
|
Description |
10.1 |
|
Quantum
Corporation 2012 Long-Term Incentive Plan |
SIGNATURE
Pursuant to the requirements
of the Securities Exchange Act of 1934, the registrant has duly caused this
report to be signed on its behalf by the undersigned hereunto duly
authorized.
|
QUANTUM CORPORATION |
|
|
|
|
|
|
|
By: |
/s/ Shawn D.
Hall |
|
|
Shawn D. Hall |
|
|
Senior Vice President, General |
|
|
Counsel and Secretary |
|
|
|
Dated: August 31, 2015 |
|
|
EXHIBIT
INDEX
Exhibit |
|
Description |
10.1 |
|
Quantum
Corporation 2012 Long-Term Incentive Plan |
Exhibit 10.1
Amendment to the
Companys 2012 Long-Term Incentive Plan
QUANTUM CORPORATION
2012 LONG-TERM INCENTIVE
PLAN
(August 31, 2015 Amendment
and Restatement)
1. Background and Purposes of the Plan. This amended and restated Plan is effective as
of August 31, 2015, subject to approval by an affirmative vote of the holders of
a majority of Shares that are present in person or by proxy and entitled to vote
at the 2014 Annual Meeting of Stockholders of the Company. The Plan was formerly
known as the 1993 Long-Term Incentive Plan.
The purposes of this Plan
are:
● |
to attract and retain
the best available Employees, Directors and Consultants for positions of
substantial responsibility, |
● |
to provide incentive
to Employees, Directors and Consultants, and |
● |
to promote the
success of the Companys business. |
The Plan permits the grant
of Incentive Stock Options, Nonstatutory Stock Options, Restricted Stock,
Restricted Stock Units, Stock Appreciation Rights, Performance Units and
Performance Shares.
2. Definitions. As used
herein, the following definitions will apply:
(a) Administrator means the
Board or any of its Committees as will be administering the Plan, in accordance
with Section 4 of the Plan.
(b) Applicable
Laws means the requirements
relating to the administration of equity-based awards under U.S. state corporate
laws, U.S. federal and state securities laws, the Code, any stock exchange or
quotation system on which the Common Stock is listed or quoted and the
applicable laws of any foreign country or jurisdiction where Awards are, or will
be, granted under the Plan.
(c) Award means, individually or collectively, a grant
under the Plan of Options, Stock Appreciation Rights, Restricted Stock,
Restricted Stock Units, Performance Units or Performance Shares.
(d) Award
Agreement means the written or
electronic agreement setting forth the terms and provisions applicable to each
Award granted under the Plan. The Award Agreement is subject to the terms and
conditions of the Plan.
1
(e) Award Transfer
Program means any program
instituted by the Administrator that would permit Participants the opportunity
to transfer for value any outstanding Awards to a financial institution or other
person or entity approved by the Administrator. A transfer for value shall not
be deemed to occur under this Plan where an Award is transferred by a
Participant not for consideration and for bona fide estate planning purposes to
a trust or other entity approved by the Administrator and for the benefit of the
Participants family.
(f) Board means the Board of Directors of the Company.
(g) Change in
Control means the occurrence of
any of the following events:
(i) A
change in the ownership of the Company that occurs on the date
that any one person, or more than one person acting as a group (Person), acquires ownership of the stock of the Company that, together with
the stock held by such Person, constitutes more than fifty percent (50%) of the
total voting power of the stock of the Company; provided, however, that for
purposes of this subsection, the acquisition of additional stock by any one
Person, who is considered to own more than fifty percent (50%) of the total
voting power of the stock of the Company at the time of the acquisition of the
additional stock will not be considered a Change in Control; or
(ii) A
change in the effective control of the Company which occurs on the date that a
majority of members of the Board is replaced during any twelve (12) month period
by Directors whose appointment or election is not endorsed by a majority of the
members of the Board prior to the date of the appointment or election. For
purposes of this clause (ii), if any Person is considered to be in effective
control of the Company, the acquisition of additional control of the Company by
the same Person will not be considered a Change in Control; or
(iii) A
change in the ownership of a substantial portion of the Companys assets which
occurs on the date that any Person acquires (or has acquired during the twelve
(12) month period ending on the date of the most recent acquisition by such
person or persons) assets from the Company that have a total gross fair market
value equal to or more than fifty percent (50%) of the total gross fair market
value of all of the assets of the Company immediately prior to such acquisition
or acquisitions; provided, however, that for purposes of this subsection (iii),
the following will not constitute a change in the ownership of a substantial
portion of the Companys assets: (A) a transfer to an entity that is controlled
by the Companys stockholders immediately after the transfer, or (B) a transfer
of assets by the Company to: (1) a stockholder of the Company (immediately
before the asset transfer) in exchange for or with respect to the Companys
stock, (2) an entity, fifty percent (50%) or more of the total value or voting
power of which is owned, directly or indirectly, by the Company, (3) a Person,
that owns, directly or indirectly, fifty percent (50%) or more of the total
value or voting power of all the outstanding stock of the Company, or (4) an
entity, at least fifty percent (50%) of the total value or voting power of which
is owned, directly or indirectly, by a Person described in this subsection
(iii)(B)(3). For purposes of this subsection (iii), gross fair market value
means the value of the assets of the Company, or the value of the assets being
disposed of, determined without regard to any liabilities associated with such
assets.
For purposes of this
definition, persons will be considered to be acting as a group if they are
owners of a corporation that enters into a merger, consolidation, purchase or
acquisition of stock, or similar business transaction with the Company.
2
Notwithstanding the
foregoing, a transaction will not be deemed a Change in Control unless the
transaction qualifies as a change in control event within the meaning of Section
409A.
Further and for the
avoidance of doubt, a transaction will not constitute a Change in Control if:
(i) its sole purpose is to change the state of the Companys incorporation, or
(ii) its sole purpose is to create a holding company that will be owned in
substantially the same proportions by the persons who held the Companys
securities immediately before such transaction.
(h) Code means the Internal Revenue Code of 1986, as
amended. Reference to a specific section of the Code or regulation thereunder
shall include such section or regulation, any valid regulation promulgated under
such section, and any comparable provision of any future legislation or
regulation amending, supplementing or superseding such section or regulation.
(i) Committee means a committee of Directors or of other
individuals satisfying Applicable Laws appointed by the Board, or a duly
authorized committee of the Board, in accordance with Section 4 hereof.
(j) Common
Stock means the common stock of
the Company.
(k) Company means Quantum Corporation, a Delaware
corporation, or any successor thereto.
(l) Consultant means any natural person, including an advisor,
engaged by the Company or a Parent or Subsidiary to render services to such
entity in a capacity other than as an Employee or Director; provided, however,
that a Consultant will include only those persons to whom the issuance of Shares
may be registered under Form S-8 under the Securities Act of 1933, as
amended.
(m) Determination
Date means the latest possible
date that will not jeopardize the qualification of an Award granted under the
Plan as performance-based compensation under Section 162(m) of the Code.
(n) Director means a member of the Board.
(o) Disability means total and permanent disability as defined
in Section 22(e)(3) of the Code, provided that in the case of Awards other than
Incentive Stock Options, the Administrator in its discretion may determine
whether a permanent and total disability exists in accordance with uniform and
non-discriminatory standards adopted by the Administrator from time to
time.
(p) Employee means any person, including Officers and
Directors, employed by the Company or any Parent or Subsidiary of the Company.
Neither service as a Director nor payment of a directors fee by the Company
will be sufficient to constitute employment by the Company.
(q) Exchange
Act means the Securities
Exchange Act of 1934, as amended.
3
(r) Exchange
Program means a program under
which (i) outstanding awards are surrendered or cancelled in exchange for awards
of the same type (which may have higher or lower exercise prices and different
terms), awards of a different type, and/or cash, (ii) Participants would have
the opportunity to participate in an Award Transfer Program, and/or (iii) the
exercise price of an outstanding Award is reduced. The Administrator will
determine the terms and conditions of any Exchange Program in its sole
discretion.
(s) Fair Market
Value means, as of any date, the
value of Common Stock determined as follows:
(i) If the
Common Stock is listed on any established stock exchange or a national market
system, including without limitation the New York Stock Exchange, the NASDAQ
Global Select Market, the NASDAQ Global Market or the NASDAQ Capital Market of
The NASDAQ Stock Market, its Fair Market Value will be the closing sales price
for such stock (or the closing bid, if no sales were reported) as quoted on such
exchange or system on the day of determination, as reported in The Wall Street Journal or such other source as the Administrator deems
reliable;
(ii) If the
Common Stock is regularly quoted by a recognized securities dealer but selling
prices are not reported, the Fair Market Value of a Share will be the mean
between the high bid and low asked prices for the Common Stock on the day of
determination (or, if no bids and asks were reported on that date, as
applicable, on the last trading date such bids and asks were reported), as
reported in The Wall Street
Journal or such other source as
the Administrator deems reliable; or
(iii) In the
absence of an established market for the Common Stock, the Fair Market Value
will be determined in good faith by the Administrator.
(t) Fiscal
Year means the fiscal year of
the Company.
(u) Incentive Stock
Option means an Option that by
its terms qualifies and is otherwise intended to qualify as an incentive stock
option within the meaning of Section 422 of the Code and the regulations
promulgated thereunder.
(v) Nonstatutory Stock
Option means an Option that by
its terms does not qualify or is not intended to qualify as an Incentive Stock
Option.
(w) Officer means a person who is an officer of the Company
within the meaning of Section 16 of the Exchange Act and the rules and
regulations promulgated thereunder.
(x) Option means a stock option granted pursuant to the
Plan.
(y) Outside
Director means a Director who is
not an Employee or Consultant.
(z) Parent means a parent corporation, whether now or
hereafter existing, as defined in Section 424(e) of the Code.
(aa) Participant means the
holder of an outstanding Award.
4
(bb) Performance-Based
Award means any Award that is
subject to the terms and conditions set forth in Section 10 of the Plan. All
Performance-Based Awards are intended to qualify as qualified performance-based
compensation under Section 162(m) of the Code.
(cc) Performance
Goals means the goal(s) (or
combined goal(s)) determined by the Administrator (in its discretion) to be
applicable to a Participant with respect to an Award. As determined by the
Administrator, the Performance Goals applicable to an Award may provide for a
targeted level or levels of achievement using one or more of the following
measures: (a) cash flow, (b) customer satisfaction, (c) earnings per share, (d)
expense control, (e) margin, (f) market share, (g) operating profit, (h) product
development and/or quality, (i) profit, (j) return on capital, (k) return on
equity, (l) revenue and (m) total shareholder return. Any Performance Goal used
may be measured (1) in absolute terms, (2) in combination with another
Performance Goal or Goals (for example, but not by way of limitation, as a ratio
or matrix), (3) in relative terms (including, but not limited to, as compared to
results for other periods of time, against financial metrics, and/or against
another company, companies or an index or indices), (4) on a per-share or
per-capita basis, (5) against the performance of the Company as a whole or a
specific business unit(s), business segment(s) or product(s) of the Company,
and/or (6) on a pre-tax or after-tax basis. Prior to the Determination Date, the
Committee, in its discretion, will determine whether any significant element(s)
or item(s) will be included in or excluded from the calculation of any
Performance Goal with respect to any Participants (for example, but not by way
of limitation, the effect of mergers and acquisitions). As determined in the
discretion of the Committee prior to the Determination Date, achievement of
Performance Goals for a particular Award may be calculated in accordance with
the Companys financial statements, prepared in accordance with generally
accepted accounting principles, or as adjusted for certain costs, expenses,
gains and losses to provide non-GAAP measures of operating results.
(dd) Performance Period means
any Fiscal Year (or period of four (4) consecutive fiscal quarters) or such
longer period as determined by the Administrator in its sole discretion during
which the performance objectives must be met.
(ee) Performance
Share means an Award denominated
in Shares which may be earned in whole or in part upon attainment of performance
goals or other vesting criteria as the Administrator may determine pursuant to
Section 10 of the Plan.
(ff) Performance
Unit means an Award which may be
earned in whole or in part upon attainment of performance goals or other vesting
criteria as the Administrator may determine and which may be settled for cash,
Shares or other securities or a combination of the foregoing pursuant to Section
10 of the Plan.
(gg) Period of
Restriction means the period
during which Restricted Stock Units, Performance Shares, Performance Units
and/or the transfer of Shares of Restricted Stock are subject to restrictions
and therefore, the Shares are subject to a substantial risk of forfeiture. Such
restrictions may be based on the passage of time, continued service, the
achievement of target levels of performance, the achievement of Performance
Goals, or the occurrence of other events as determined by the Administrator.
Notwithstanding any contrary provision of the Plan (but subject to the following
sentence), the Period of Restriction for such an Award shall expire in full no
earlier than (a) the third (3rd) annual anniversary of the grant date if the
vesting period expires solely as the
5
result of continued
employment or service, and (b) the first (1st) annual anniversary of the grant
date if expiration of the vesting period is conditioned on achievement of
performance objectives and does not expire solely as the result of continued
employment or service. The preceding minimum vesting periods shall not apply
with respect to Awards to Directors, or to an Award if determined by the
Administrator (in its discretion): (a) due to death, Disability, or major
capital change, or (b) with respect to Awards other than Options and SARs
covering, in the aggregate, no more than five percent (5%) of the shares
reserved for issuance under the Plan.
(hh) Plan means this 2012 Long-Term Incentive Plan.
(ii) Restricted
Stock means Shares issued
pursuant to a Restricted Stock award under Section 7 of the Plan, or issued
pursuant to the early exercise of an Option.
(jj) Restricted Stock
Unit means a bookkeeping entry
representing an amount equal to the Fair Market Value of one Share, granted
pursuant to Section 8 of the Plan. Each Restricted Stock Unit represents an
unfunded and unsecured obligation of the Company.
(kk) Rule 16b-3 means Rule 16b-3 of the Exchange Act or any
successor to Rule 16b-3, as in effect when discretion is being exercised with
respect to the Plan.
(ll) Section
16(b) means Section 16(b) of the
Exchange Act.
(mm) Section
409A means Section 409A of the
Code, and any proposed, temporary or final Treasury Regulations and Internal
Revenue Service guidance thereunder, as each may be amended from time to time.
(nn) Service
Provider means an Employee,
Director or Consultant.
(oo) Share means a share of the Common Stock, as adjusted
in accordance with Section 13 of the Plan.
(pp) Stock Appreciation
Right or SAR means an Award, granted alone or in connection with an Option, that
pursuant to Section 9 of the Plan is designated as a Stock Appreciation Right.
(qq) Subsidiary means a subsidiary corporation or company,
whether now or hereafter existing, as defined in Section 424(f) of the Code.
3. Stock Subject to the Plan.
(a) Stock Subject to the Plan.
Subject to the provisions of Section 13 of the Plan, the maximum aggregate
number of Shares that may be issued under the Plan shall equal 39,250,000
Shares. However, of the number of Shares set forth in the immediately preceding
sentence, up to 5,000,000 Shares (the Prior Plan Cap) shall
consist exclusively of any shares used to pay the exercise price or purchase
price of an award or to satisfy the tax withholding obligations related to an
award granted under the Companys 1993 Long-Term Incentive Plan or the Companys
Nonemployee Director Equity Incentive Plan on or before August 14, 2012, that
otherwise would have been returned to the Companys 1993 Long-Term Incentive
Plan or the Companys
6
Nonemployee Director Equity
Incentive Plan after August 14, 2012 (the Prior Plan Shares). If the actual number of Prior Plan Shares is
less than the Prior Plan Cap, then the total number of Shares in the first
sentence of this Section 3(a) shall be correspondingly reduced by the difference
between the Prior Plan Cap minus the actual number of Prior Plan Shares. The
Shares may be authorized, but unissued, or reacquired Common Stock.
Lapsed
Awards. If an Award expires or
becomes unexercisable without having been exercised in full, is surrendered
pursuant to an Exchange Program, or, with respect to Restricted Stock,
Restricted Stock Units, Performance Units or Performance Shares, is forfeited to
or repurchased by the Company due to failure to vest, the unpurchased Shares (or
for Awards other than Options or Stock Appreciation Rights the forfeited or
repurchased Shares), which were subject thereto will become available for future
grant or sale under the Plan (unless the Plan has terminated). Upon exercise of
a Stock Appreciation Right settled in Shares, the gross number of Shares covered
by the portion of the Award so exercised, whether or not actually issued
pursuant to such exercise will cease to be available under the Plan. Shares that
have actually been issued under the Plan under any Award will not be returned to
the Plan and will not become available for future distribution under the Plan;
provided, however, that if Shares issued pursuant to Awards of Restricted Stock,
Restricted Stock Units, Performance Shares or Performance Units are repurchased
by the Company or are forfeited to the Company, such Shares will become
available for future grant under the Plan. Shares used to pay the exercise price
or purchase price of an Award will not become available for future grant or sale
under the Plan. Shares used to satisfy the tax withholding obligations related
to Restricted Stock awards, Restricted Stock units, Performance Units or
Performance Shares will become available for future grant or sale under the
Plan. Shares used to satisfy the tax withholding obligations under an Option or
Stock Appreciation Right will not become available for future grant or sale
under the Plan. To the extent an Award under the Plan is paid out in cash rather
than Shares, such cash payment will not result in reducing the number of Shares
available for issuance under the Plan. Shares purchased in the open market with
proceeds from option exercises will not be added to the Share reserve under the
Plan. Notwithstanding anything in the Plan or any Award Agreement to the
contrary, Shares actually issued pursuant to Awards transferred under any Award
Transfer Program will not be again available for grant under the Plan.
Notwithstanding the foregoing and, subject to adjustment as provided in Section
13 of the Plan, the maximum number of Shares that may be issued upon the
exercise of Incentive Stock Options will equal the aggregate Share number stated
in Section 3(a) of the Plan, plus, to the extent allowable under Section 422 of
the Code and the Treasury Regulations promulgated thereunder, any Shares that
become available for issuance under the Plan pursuant to this Section
3(b).
(b) Share Reserve. The
Company, during the term of this Plan, will at all times reserve and keep
available such number of Shares as will be sufficient to satisfy the
requirements of the Plan.
4. Administration of the Plan.
(a) Procedure.
(i) Multiple Administrative Bodies. Different Committees with respect to different groups of Service
Providers may administer the Plan.
7
(ii) Section 162(m). To the
extent that the Administrator determines it to be desirable to qualify Awards
granted hereunder as performance-based compensation within the meaning of
Section 162(m) of the Code, the Plan will be administered by a Committee of two
(2) or more outside directors within the meaning of Section 162(m) of the
Code.
(iii) Rule 16b-3. To the extent
desirable to qualify transactions hereunder as exempt under Rule 16b-3, the
transactions contemplated hereunder will be structured to satisfy the
requirements for exemption under Rule 16b-3.
(iv) Other Administration.
Other than as provided above, the Plan will be administered by (A) the Board or
(B) a Committee, which committee will be constituted to satisfy Applicable
Laws.
(v) Delegation of Authority for Day-to-Day Administration. Except to the extent prohibited by Applicable
Law, the Administrator may delegate to one or more individuals the day-to-day
administration of the Plan and any of the functions assigned to it in this Plan.
Such delegation may be revoked at any time.
(b) Powers of the Administrator. Subject to the provisions of the Plan, and in the case of a Committee,
subject to the specific duties delegated by the Board to such Committee, the
Administrator will have the authority, in its discretion:
(i) to
determine the Fair Market Value;
(ii) to
select the Service Providers to whom Awards may be granted hereunder;
(iii) to
determine the number of Shares to be covered by each Award granted hereunder;
(iv) to
approve forms of Award Agreements for use under the Plan;
(v) to
determine the terms and conditions, not inconsistent with the terms of the Plan,
of any Award granted hereunder. Such terms and conditions include, but are not
limited to, the exercise price, the time or times when Awards may be exercised
(which may be based on performance criteria), any vesting acceleration or waiver
of forfeiture restrictions, and any restriction, limitation or requirement
regarding any Award or the Shares covered thereby (for example, but not by way
of limitation, any holding period or ownership requirement), based in each case
on such factors as the Administrator (in its discretion) shall determine;
(vi) to
determine the terms and conditions of any Exchange Program and/or Award Transfer
Program and with the consent of the Companys stockholders, to institute an
Exchange Program and/or Award Transfer Program (provided that the Administrator
may not implement an Exchange Program and/or Award Transfer Program without
first receiving the consent of the Companys stockholders);
(vii) to
construe and interpret the terms of the Plan and Awards granted pursuant to the
Plan;
8
(viii) to
prescribe, amend and rescind rules and regulations relating to the Plan,
including rules and regulations relating to sub-plans established for the
purpose of satisfying or facilitating compliance with applicable foreign laws
and/or for qualifying for favorable tax treatment under applicable foreign laws;
(ix) to
modify or amend each Award (subject to Section 18 of the Plan), including but
not limited to the discretionary authority to extend the post-termination
exercisability period of Awards and to extend the maximum term of an Option
(subject to Section 6(b) of the Plan regarding Incentive Stock Options);
(x) to
allow Participants to satisfy withholding tax obligations in such manner as
prescribed in Section 14 of the Plan;
(xi) to
authorize any person to execute on behalf of the Company any instrument required
to effect the grant of an Award previously granted by the Administrator pursuant
to such procedures as the Administrator may determine;
(xii) to
allow a Participant, in compliance with all Applicable Laws including, but not
limited to, Section 409A, to defer the receipt of the payment of cash or the
delivery of Shares that would otherwise be due to such Participant under an
Award; and
(xiii) to
determine whether Awards will be settled in Shares, cash or in any combination
thereof;
(xiv) to
impose such restrictions, conditions or limitations as it determines appropriate
as to the timing and manner of any resales by a Participant or other subsequent
transfers by the Participant of any Shares issued as a result of or under an
Award, including without limitation, (A) restrictions under an insider trading
policy, and (B) restrictions as to the use of a specified brokerage firm for
such resales or other transfers;
(xv) to
require that the Participants rights, payments and benefits with respect to an
Award (including amounts received upon the settlement or exercise of an Award)
shall be subject to reduction, cancellation, forfeiture or recoupment upon the
occurrence of certain specified events, in addition to any otherwise applicable
vesting or performance conditions of an Award, as may be specified in an Award
Agreement at the time of the Award, or later if (A) Applicable Laws require the
Company to adopt a policy requiring such reduction, cancellation, forfeiture or
recoupment, or (B) pursuant to an amendment of an outstanding Award; and
(xvi) to
make all other determinations deemed necessary or advisable for administering
the Plan.
(c) Effect of Administrators Decision. The Administrators decisions, determinations and interpretations will
be final and binding on all Participants and any other holders of Awards and
shall be given the maximum deference permitted by law.
5. Eligibility. Nonstatutory
Stock Options, Stock Appreciation Rights, Restricted Stock, Restricted Stock Units,
Performance Shares and Performance Units may be granted to Service Providers.
Incentive Stock Options may be granted only to Employees.
9
6. Stock Options.
(a) Limitations.
(i) Each
Option will be designated in the Award Agreement as either an Incentive Stock
Option or a Nonstatutory Stock Option. However, notwithstanding such
designation, to the extent that the aggregate Fair Market Value of the Shares
with respect to which Incentive Stock Options are exercisable for the first time
by the Participant during any calendar year (under all plans of the Company and
any Parent or Subsidiary) exceeds one hundred thousand dollars ($100,000), such
Options will be treated as Nonstatutory Stock Options. For purposes of this
Section 6(a), Incentive Stock Options will be taken into account in the order in
which they were granted. The Fair Market Value of the Shares will be determined
as of the time the Option with respect to such Shares is granted.
(ii) The
Administrator will have complete discretion to determine the number of Shares
subject to an Option granted to any Participant, provided that, subject to the
provisions of Section 13, during any Fiscal Year, the number of Shares covered
by Options granted to any one Service Provider will not exceed more than two
million five hundred thousand (2,500,000) Shares; provided, however, that in
connection with his or her initial service, a Service Provider may be granted
Options covering up to an additional two million five hundred thousand
(2,500,000) Shares in the Fiscal Year in which his or her service as a Service
Provider first commences.
(b) Term of Option. The term
of each Incentive Stock Option or Nonstatutory Stock Option will be stated in
the Award Agreement; provided, however, that the term will be no more than seven
(7) years from the date of grant hereof. Moreover, in the case of an Incentive
Stock Option granted to a Participant who, at the time the Incentive Stock
Option is granted, owns stock representing more than ten percent (10%) of the
total combined voting power of all classes of stock of the Company or any Parent
or Subsidiary, the term of the Incentive Stock Option will be five (5) years
from the date of grant or such shorter term as may be provided in the Award
Agreement.
(c) Option Exercise Price and Consideration.
(i) Exercise Price. The per
share exercise price for the Shares to be issued pursuant to exercise of an
Option will be determined by the Administrator, subject to the following:
(1) In the
case of an Incentive Stock Option
(A) granted to an Employee
who, at the time the Incentive Stock Option is granted, owns stock representing
more than ten percent (10%) of the voting power of all classes of stock of the
Company or any Parent or Subsidiary, the per Share exercise price will be no
less than one hundred ten percent (110%) of the Fair Market Value per Share on
the date of grant.
(B) granted to any Employee
other than an Employee described in paragraph (A) immediately above, the per
Share exercise price will be no less than one hundred percent (100%) of the Fair
Market Value per Share on the date of grant.
10
(2) In the
case of a Nonstatutory Stock Option, the per Share exercise price will be no
less than one hundred percent (100%) of the Fair Market Value per Share on the
date of grant.
(3) Notwithstanding the foregoing, Options may be granted with a per Share
exercise price of less than one hundred percent (100%) of the Fair Market Value
per Share on the date of grant pursuant to a transaction described in, and in a
manner consistent with, Section 424(a) of the Code.
(ii) Waiting Period and Exercise Dates. At the time an Option is granted, the Administrator will fix the period
within which the Option may be exercised and will determine any conditions that
must be satisfied before the Option may be exercised.
(iii) Form of Consideration. The
Administrator will determine the acceptable form of consideration for exercising
an Option, including the method of payment. In the case of an Incentive Stock
Option, the Administrator will determine the acceptable form of consideration at
the time of grant. Such consideration may consist entirely of, without
limitation: (1) cash; (2) check; (3) promissory note, to the extent permitted by
Applicable Laws, (4) other Shares, provided that such Shares have a Fair Market
Value on the date of surrender equal to the aggregate exercise price of the
Shares as to which such Option will be exercised and provided that accepting
such Shares will not result in any adverse accounting consequences to the
Company, as the Administrator determines in its sole discretion; (5)
consideration received by the Company under a cashless exercise program (whether
through a broker, net exercise program or otherwise) implemented by the Company
in connection with the Plan; (6) by reduction in the amount of any Company
liability to the Participant, (7) by net exercise; (8) such other consideration
and method of payment for the issuance of Shares to the extent permitted by
Applicable Laws; or (9) any combination of the foregoing methods of payment.
(d) Exercise of Option.
(i) Procedure for Exercise; Rights as a Stockholder. Any Option granted hereunder will be exercisable
according to the terms of the Plan and at such times and under such conditions
as determined by the Administrator and set forth in the Award Agreement. An
Option may not be exercised for a fraction of a Share.
An Option will be deemed
exercised when the Company receives: (i) a notice of exercise (in such form as
the Administrator may specify from time to time) from the person entitled to
exercise the Option, and (ii) full payment for the Shares with respect to which
the Option is exercised (together with applicable withholding taxes). Full
payment may consist of any consideration and method of payment authorized by the
Administrator and permitted by the Award Agreement and the Plan. Shares issued
upon exercise of an Option will be issued in the name of the Participant or, if
requested by the Participant, in the name of the Participant and his or her
spouse. Until the Shares are issued (as evidenced by the appropriate entry on
the books of the Company or of a duly authorized transfer agent of the Company),
no right to vote or receive dividends or any other rights as a stockholder will
exist with respect to the Shares subject to an Option, notwithstanding the
exercise of the Option. The Company will issue (or cause to be issued) such
Shares promptly after
11
the Option is exercised. No
adjustment will be made for a dividend or other right for which the record date
is prior to the date the Shares are issued, except as provided in Section 13 of
the Plan.
Exercising an Option in any
manner will decrease the number of Shares thereafter available, both for
purposes of the Plan and for sale under the Option, by the number of Shares as
to which the Option is exercised.
(ii) Termination of Relationship as a Service Provider. If a Participant ceases to be a Service
Provider, other than upon the Participants termination as the result of the
Participants death or Disability, the Participant may exercise his or her
Option within such period of time as is specified in the Award Agreement (but in
no event later than the expiration of the term of such Option as set forth in
the Award Agreement). In the absence of a specified time in the Award Agreement,
the Option will remain exercisable for three (3) months following the
Participants termination. Unless otherwise provided by the Administrator, if on
the date of termination the Participant is not vested as to his or her entire
Option, the Shares covered by the unvested portion of the Option will be
forfeited and revert to the Plan. If after termination the Participant does not
exercise his or her Option within the time specified by the Award Agreement,
this Plan or the Administrator, the Option will terminate, and the Shares
covered by such Option will revert to the Plan.
(iii) Disability of Participant.
If a Participant ceases to be a Service Provider as a result of the
Participants Disability, the Participant may exercise his or her Option within
such period of time as is specified in the Award Agreement (but in no event
later than the expiration of the term of such Option as set forth in the Award
Agreement). In the absence of a specified time in the Award Agreement, the
Option will remain exercisable for twelve (12) months following the
Participants termination. Unless otherwise provided by the Administrator, if on
the date of termination the Participant is not vested as to his or her entire
Option, the Shares covered by the unvested portion of the Option will be
forfeited and revert to the Plan. If after termination the Participant does not
exercise his or her Option within the time specified herein, the Option will
terminate, and the Shares covered by such Option will revert to the Plan.
(iv) Death of Participant. If a
Participant dies while a Service Provider, the Option may be exercised following
the Participants death within such period of time as is specified in the Award
Agreement (but in no event may the option be exercised later than the expiration
of the term of such Option as set forth in the Award Agreement), by the
Participants designated beneficiary, provided such designation has been
permitted by the Administrator and provided a beneficiary has been designated
prior to Participants death in a form acceptable to the Administrator. If a
beneficiary designation has not been permitted by the Administrator or if no
beneficiary has been designated by the Participant, then such Option may be
exercised by the personal representative of the Participants estate or by the
person(s) to whom the Option is transferred pursuant to the Participants will
or in accordance with the laws of descent and distribution. In the absence of a
specified time in the Award Agreement, the Option will remain exercisable for
twelve (12) months following Participants death. Unless otherwise provided by
the Administrator, if at the time of death Participant is not vested as to his
or her entire Option, the Shares covered by the unvested portion of the Option
will be forfeited and immediately revert to the Plan. If the Option is not so
exercised within the time specified herein, the Option will terminate, and the
Shares covered by such Option will revert to the Plan.
12
7. Restricted Stock.
(a) Grant of Restricted Stock.
Subject to the terms and provisions of the Plan, the Administrator, at any time
and from time to time, may grant Shares of Restricted Stock to Service Providers
in such amounts as the Administrator, in its sole discretion, will determine;
provided, that, subject to the provisions of Section 13 of the Plan, during any
Fiscal Year, the number of Shares of Restricted Stock granted to any one Service
Provider will not exceed more than one million (1,000,000) Shares; provided,
however, that in connection with his or her initial service, a Service Provider
may be granted an additional one million (1,000,000) Shares of Restricted Stock
in the Fiscal Year in which his or her service as a Service Provider first
commences.
(b) Restricted Stock Agreement. Each Award of Restricted Stock will be evidenced by an Award Agreement
that will specify the Period of Restriction, the number of Shares granted, and
such other terms and conditions as the Administrator, in its sole discretion,
will determine. Unless the Administrator determines otherwise, the Company as
escrow agent will hold Shares of Restricted Stock until the restrictions on such
Shares have lapsed.
(c) Transferability. Except as
provided in this Section 7 or the Award Agreement, Shares of Restricted Stock
may not be sold, transferred, pledged, assigned, or otherwise alienated or
hypothecated until the end of the applicable Period of Restriction.
(d) Other Restrictions. The
Administrator, in its sole discretion, may impose such other restrictions on
Shares of Restricted Stock as it may deem advisable or appropriate.
(i) General Restrictions. The
Administrator may set restrictions based upon continued employment or service,
the achievement of specific performance objectives (Company-wide, departmental,
divisional, business unit, or individual), applicable federal or state
securities laws, or any other basis determined by the Administrator in its
discretion.
(ii) Section 162(m) Performance Restrictions. For purposes of qualifying grants of Restricted
Stock as performance-based compensation under Section 162(m) of the Code, the
Administrator, in its discretion, may set restrictions based upon the
achievement of Performance Goals. The Performance Goals shall be set by the
Administrator on or before the Determination Date. In granting Restricted Stock
which is intended to qualify under Section 162(m) of the Code, the Administrator
shall follow any procedures determined by it from time to time to be necessary
or appropriate to ensure qualification of the Restricted Stock under Section
162(m) of the Code (e.g., in determining the Performance Goals and certifying in
writing whether the applicable Performance Goals have been achieved after the
completion of the applicable Performance Period).
(e) Removal of Restrictions.
Except as otherwise provided in this Section 7, Shares of Restricted Stock
covered by each Restricted Stock grant made under the Plan will be released from
escrow as soon as practicable after the last day of the Period of Restriction or
at such other time as the Administrator may determine. The Administrator, in its
discretion, may accelerate the time at which any restrictions will lapse or be
removed.
(f) Voting Rights. During the
Period of Restriction, Service Providers holding Shares of Restricted Stock
granted hereunder may exercise full voting rights with respect to those Shares,
unless the Administrator determines otherwise.
13
(g) Dividends and Other Distributions. During the Period of Restriction, Service Providers holding Shares of
Restricted Stock will be entitled to receive all dividends and other
distributions paid with respect to such Shares, unless the Administrator
provides otherwise. If any such dividends or distributions are paid in Shares,
the Shares will be subject to the same restrictions on transferability and
forfeitability as the Shares of Restricted Stock with respect to which they were
paid.
(h) Return of Restricted Stock to Company. On the date set forth in the Award Agreement,
the Restricted Stock for which restrictions have not lapsed will revert to the
Company and, subject to Section 3, again will become available for grant under
the Plan.
8. Restricted Stock Units.
(a) Grant. Subject to the
terms and provisions of the Plan, the Administrator, at any time and from time
to time, may grant Restricted Stock Units to Service Providers in such amounts
as the Administrator, in its sole discretion, will determine; provided, that
subject to the provisions of Section 13 of the Plan, during any Fiscal Year, the
number of Restricted Stock Units granted to any one Service Provider will not
exceed more than one million (1,000,000); provided, however, that in connection
with his or her initial service, a Service Provider may be granted an additional
one million (1,000,000) Restricted Stock Units in the Fiscal Year in which his
or her service as a Service Provider first commences. After the Administrator
determines that it will grant Restricted Stock Units under the Plan, it will
advise the Participant in an Award Agreement of the terms, conditions, and
restrictions related to the grant, including the number of Restricted Stock
Units.
(b) Vesting Criteria and Other Terms. The Administrator will set vesting criteria in its discretion, which,
depending on the extent to which the criteria are met, will determine the number
of Restricted Stock Units that will be paid out to the Participant.
(i) General Restrictions. The
Administrator may set vesting criteria based upon continued employment or
service, the achievement of specific performance objectives (Company-wide,
departmental, divisional, business unit, or individual goals (including, but not
limited to, continued employment or service), applicable federal or state
securities laws or any other basis determined by the Administrator in its
discretion.
(ii) Section 162(m) Performance Restrictions. For purposes of qualifying grants of Restricted
Stock Units as performance-based compensation under Section 162(m) of the
Code, the Administrator, in its discretion, may set restrictions based upon the
achievement of Performance Goals. The Performance Goals shall be set by the
Administrator on or before the Determination Date. In granting Restricted Stock
Units that are intended to qualify under Section 162(m) of the Code, the
Administrator shall follow any procedures determined by it from time to time to
be necessary or appropriate to ensure qualification of the Restricted Stock
Units under Section 162(m) of the Code (e.g., in determining the Performance
Goals and certifying in writing whether the applicable Performance Goals have
been achieved after the completion of the applicable Performance Period).
14
(c) Earning Restricted Stock Units. Upon meeting the applicable vesting criteria, the Participant will be
entitled to receive a payout as determined by the Administrator. Notwithstanding
the foregoing, at any time after the grant of Restricted Stock Units, the
Administrator, in its sole discretion, may reduce or waive any vesting criteria
that must be met to receive a payout.
(d) Form and Timing of Payment. Payment of earned Restricted Stock Units will be made as soon as
practicable after the date(s) determined by the Administrator and set forth in
the Award Agreement; provided, however, that the timing of payment shall in all
cases comply with Section 409A to the extent applicable to the Award. The
Administrator, in its sole discretion, may only settle earned Restricted Stock
Units in cash, Shares, or a combination of both.
(e) Cancellation. On the date
set forth in the Award Agreement, all unearned Restricted Stock Units will be
forfeited to the Company and, subject to Section 3 of the Plan, again will
become available for grant under the Plan.
9. Stock Appreciation Rights.
(a) Grant of Stock Appreciation Rights. Subject to the terms and conditions of the Plan, a Stock Appreciation
Right may be granted to Service Providers at any time and from time to time as
will be determined by the Administrator, in its sole discretion.
(b) Number of Shares. The
Administrator will have complete discretion to determine the number of Stock
Appreciation Rights granted to any Service Provider, provided that, subject to
the provisions of Section 13, during any Fiscal Year, the number of Shares
covered by Stock Appreciation Rights granted to any one Service Provider will
not exceed more than two million five hundred thousand (2,500,000) Shares;
provided, however, that in connection with his or her initial service, a Service
Provider may be granted SARs covering up to an additional two million five
hundred thousand (2,500,000) Shares in the Fiscal Year in which his or her
service as a Service Provider first commences.
(c) Exercise Price and Other Terms. The per share exercise price for the Shares to be issued pursuant to
exercise of a Stock Appreciation Right will be determined by the Administrator
and will be no less than one hundred percent (100%) of the Fair Market Value per
Share on the date of grant. Otherwise, the Administrator, subject to the
provisions of the Plan, will have complete discretion to determine the terms and
conditions of Stock Appreciation Rights granted under the Plan.
(d) Stock Appreciation Right Agreement. Each Stock Appreciation Right grant will be evidenced by an Award
Agreement that will specify the exercise price, the term of the Stock
Appreciation Right, the conditions of exercise, and such other terms and
conditions as the Administrator, in its sole discretion, will determine.
(e) Expiration of Stock Appreciation Rights. A Stock Appreciation Right granted under the
Plan will expire upon the date determined by the Administrator, in its sole
discretion, and set forth in the Award Agreement. Notwithstanding the foregoing,
the rules of Section 6(b) of the Plan relating to the maximum term and Section
6(d) of the Plan relating to exercise also will apply to Stock Appreciation
Rights.
15
(f) Payment of Stock Appreciation Right Amount. Upon exercise of a Stock Appreciation Right, a
Participant will be entitled to receive payment from the Company in an amount
determined by multiplying:
(i) The
difference between the Fair Market Value of a Share on the date of exercise over
the exercise price; times
(ii) The
number of Shares with respect to which the Stock Appreciation Right is
exercised.
At the discretion of the
Administrator, the payment upon Stock Appreciation Right exercise may be in
cash, in Shares of equivalent value, or in some combination thereof.
10. Performance Units and Performance Shares.
(a) Grant of Performance Units/Shares. Subject to the terms and conditions of the Plan, Performance Units and
Performance Shares may be granted to Service Providers at any time and from time
to time, as will be determined by the Administrator, in its sole discretion. The
Administrator will have complete discretion in determining the number of
Performance Units and Performance Shares granted to each Participant; provided,
that subject to the provisions of Section 13 of the Plan, during any Fiscal
Year, (a) the number of Performance Shares granted to any one Service Provider
will not exceed more than one million (1,000,000); provided, however, that in
connection with his or her initial service, a Service Provider may be granted an
additional one million (1,000,000) Performance Shares in the Fiscal Year in
which his or her service as a Service Provider first commences, and (b) no
Service Provider will receive Performance Units having an initial value greater
than ten million dollars ($10,000,000); provided, however, that in connection
with his or her initial service, a Service Provider may be granted additional
Performance Units in the Fiscal Year in which his or her service as a Service
Provider first commences having an initial value no greater than ten million
dollars ($10,000,000).
(b) Value of Performance Units/Shares. Each Performance Unit will have an initial value that is established by
the Administrator on or before the date of grant. Each Performance Share will
have an initial value equal to the Fair Market Value of a Share on the date of
grant.
(c) Performance Objectives and Other Terms. The Administrator will set performance
objectives or other vesting provisions (including, without limitation, continued
status as a Service Provider) in its discretion which, depending on the extent
to which they are met, will determine the number or value of Performance
Units/Shares that will be paid out to the Service Providers. The time period
during which the performance objectives or other vesting provisions must be met
will be called the Performance Period. Each Award of Performance Units/Shares
will be evidenced by an Award Agreement that will specify the Performance
Period, and such other terms and conditions as the Administrator, in its sole
discretion, will determine.
(i) General Restrictions. The
Administrator may set vesting criteria based upon continued employment or
service, the achievement of specific performance objectives (Company-wide,
departmental, divisional, business unit, or individual goals (including, but not
16
limited to, continued
employment or service), applicable federal or state securities laws or any other
basis determined by the Administrator in its discretion.
(ii) Section 162(m) Performance Restrictions. For purposes of qualifying grants of Performance
Shares and/or Performance Units as performance-based compensation under
Section 162(m) of the Code, the Administrator, in its discretion, may set
restrictions based upon the achievement of Performance Goals. The Performance
Goals shall be set by the Administrator on or before the Determination Date. In
granting Performance Shares and/or Performance Units that are intended to
qualify under Section 162(m) of the Code, the Administrator shall follow any
procedures determined by it from time to time to be necessary or appropriate to
ensure qualification of the Performance Shares and/or Performance Units under
Section 162(m) of the Code (e.g., in determining the Performance Goals and
certifying in writing whether the applicable Performance Goals have been
achieved after the completion of the applicable Performance Period).
(d) Earning of Performance Units/Shares. After the applicable Performance Period has
ended, the holder of Performance Units/Shares will be entitled to receive a
payout of the number of Performance Units/Shares earned by the Participant over
the Performance Period, to be determined as a function of the extent to which
the corresponding performance objectives or other vesting provisions have been
achieved. After the grant of a Performance Unit/Share, the Administrator, in its
sole discretion, may reduce or waive any performance objectives or other vesting
provisions for such Performance Unit/Share.
(e) Form and Timing of Payment of Performance Units/Shares. Payment of earned Performance Units/Shares will
be made as soon as practicable after the expiration of the applicable
Performance Period or as otherwise determined by the Administrator; provided,
however, that the timing of payment shall in all cases comply with Section 409A
to the extent applicable to the Award. The Administrator, in its sole
discretion, may pay earned Performance Units/Shares in the form of cash, in
Shares (which have an aggregate Fair Market Value equal to the value of the
earned Performance Units/Shares at the close of the applicable Performance
Period) or in a combination thereof. No right to receive any ordinary cash
dividends will exist with respect to any unvested Shares under the Performance
Units/Shares. In the event of any extraordinary cash dividend payable with
respect to Shares, the extraordinary cash dividends payable with respect to the
unvested Shares under the Performance Units/Shares, if any (as determined in
accordance with Section 13 and/or other applicable provisions of the Plan), will
be subject to the same restrictions on vesting, transferability and
forfeitability as the Shares subject to the Performance Shares/Units with
respect to which the dividends are payable.
(f) Cancellation of Performance Units/Shares. On the date set forth in the Award Agreement,
all unearned or unvested Performance Units/Shares will be forfeited to the
Company, and, subject to Section 3 of the Plan, again will be available for
grant under the Plan.
11. Leaves of Absence/Transfer Between Locations. If determined by the Administrator (in its
discretion and on a case-by-case basis) or as otherwise required by Applicable
Law, vesting of Awards granted hereunder will be suspended during any unpaid
leave of absence, such that vesting shall cease on the first day of any unpaid
leave of absence and shall only recommence upon return to active service. A
Participant will not cease to be an Employee in the case of (i) any leave of
absence
17
approved by the Company or
(ii) transfers between locations of the Company or between the Company, its
Parent, or any Subsidiary. For purposes of Incentive Stock Options, no such
leave may exceed three (3) months, unless reemployment upon expiration of such
leave is guaranteed by statute or contract. If reemployment upon expiration of a
leave of absence approved by the Company is not so guaranteed, then six (6)
months following the first (1st) day of such leave any Incentive
Stock Option held by the Participant will cease to be treated as an Incentive
Stock Option and will be treated for tax purposes as a Nonstatutory Stock
Option.
12. Transferability of Awards.
Unless determined otherwise by the Administrator, an Award may not be sold,
pledged, assigned, hypothecated, transferred, or disposed of in any manner other
than by will or by the laws of descent or distribution and may be exercised,
during the lifetime of the Participant, only by the Participant. If the
Administrator makes an Award transferable, such Award will contain such
additional terms and conditions as the Administrator deems appropriate.
Notwithstanding anything to the contrary in the Plan, in no event will the
Administrator have the right to determine and implement the terms and conditions
of any Award Transfer Program without stockholder approval.
13. Adjustments; Dissolution or Liquidation; Merger or Change in
Control.
(a) Adjustments. In the event
that any dividend or other distribution (whether in the form of cash, Shares,
other securities, or other property), recapitalization, stock split, reverse
stock split, reorganization, merger, consolidation, split-up, spin-off,
combination, repurchase, or exchange of Shares or other securities of the
Company, or other change in the corporate structure of the Company affecting the
Shares occurs, the Administrator, in order to prevent diminution or enlargement
of the benefits or potential benefits intended to be made available under the
Plan, will adjust the number and class of Shares that may be delivered under the
Plan and/or the number, class, and price of Shares covered by each outstanding
Award, the numerical Share limits in Section 3 of the Plan and the per person
numerical Share limits in Sections 6(a), 7(a), 8(a), 9(b) and 10(a) of the Plan.
Notwithstanding the preceding, the number of Shares subject to any Award always
shall be a whole number.
(b) Dissolution or Liquidation. In the event of the proposed dissolution or liquidation of the Company,
the Administrator will notify each Participant as soon as practicable prior to
the effective date of such proposed transaction. To the extent it has not been
previously exercised (with respect to an Option or SAR) or vested (with respect
to an Award other than an Option or SAR), an Award will terminate immediately
prior to the consummation of such proposed action.
(c) Merger or Change in Control. In the event of a merger of the Company with or into another
corporation or other entity or a Change in Control, each outstanding Award will
be treated as the Administrator determines, including, without limitation, that
each Award be assumed or an equivalent option or right substituted by the
successor corporation or a Parent or Subsidiary of the successor corporation.
The Administrator will not be required to treat all Awards similarly in the
transaction.
In the event that the
successor corporation does not assume or substitute for the Award, the
Participant will fully vest in and have the right to exercise all of his or her
outstanding
18
Options and Stock
Appreciation Rights, including Shares as to which such Awards would not
otherwise be vested or exercisable, all restrictions on Restricted Stock and
Restricted Stock Units will lapse, and, with respect to Awards with
performance-based vesting, all performance goals or other vesting criteria will
be deemed achieved at one hundred percent (100%) of target levels and all other
terms and conditions met. In addition, if an Option or Stock Appreciation Right
is not assumed or substituted in the event of a merger or Change in Control, the
Administrator will notify the Participant in writing or electronically that the
Option or Stock Appreciation Right will be exercisable for a period of time
determined by the Administrator in its sole discretion, and the Option or Stock
Appreciation Right will terminate upon the expiration of such period.
For the purposes of this
subsection (c), an Award will be considered assumed if, following the merger or
Change in Control, the Award confers the right to purchase or receive, for each
Share subject to the Award immediately prior to the transaction, the
consideration (whether stock, cash, or other securities or property) received in
the transaction by holders of Common Stock for each Share held on the effective
date of the transaction (and if holders were offered a choice of consideration,
the type of consideration chosen by the holders of a majority of the outstanding
Shares); provided, however, that if such consideration received in the
transaction is not solely common stock of the successor corporation or its
Parent, the Administrator may, with the consent of the successor corporation,
provide for the consideration to be received upon the exercise of an Option or
Stock Appreciation Right or upon the payout of a Restricted Stock Unit,
Performance Unit or Performance Share, for each Share subject to such Award, to
be solely common stock of the successor corporation or its Parent equal in fair
market value to the per share consideration received by holders of Common Stock
in the transaction.
Notwithstanding anything in
this Section 13(c) to the contrary, an Award that vests, is earned or paid-out
upon the satisfaction of one or more performance goals will not be considered
assumed if the Company or its successor modifies any of such performance goals
without the Participants consent; provided, however, a modification to such
performance goals only to reflect the successor corporations post-transaction
corporate structure will not be deemed to invalidate an otherwise valid Award
assumption.
(d) Outside Director Awards.
With respect to Awards granted to an Outside Director that are assumed or
substituted for, if on the date of or following such assumption or substitution
the Participants status as a Director or a director of the successor
corporation, as applicable, is terminated other than upon a voluntary
resignation by the Participant (unless such resignation is at the request of the
acquirer), then the Participant will fully vest in and have the right to
exercise Options and/or Stock Appreciation Rights as to all of the Shares
underlying such Award, including those Shares which would not otherwise be
vested or exercisable, all restrictions on Restricted Stock and Restricted Stock
Units will lapse, and, with respect to Awards with performance-based vesting,
all performance goals or other vesting criteria will be deemed achieved at one
hundred percent (100%) of target levels and all other terms and conditions met.
14. Tax.
(a) Withholding Requirements.
Prior to the delivery of any Shares or cash pursuant to an Award (or exercise
thereof) or such earlier time as any tax withholding obligations are due, the
Company will have the power and the right to deduct or withhold, or require a
Participant to
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remit to the Company, an
amount sufficient to satisfy federal, state, local, foreign or other taxes
(including the Participants FICA obligations) required to be withheld with
respect to such Award (or exercise thereof).
(b) Withholding Arrangements.
The Administrator, in its sole discretion and pursuant to such procedures as it
may specify from time to time, may permit a Participant to satisfy such tax
withholding obligations, in whole or in part by (without limitation) (a) paying
cash, (b) electing to have the Company withhold otherwise deliverable cash or
Shares having a Fair Market Value equal to the minimum statutory amount required
to be withheld or such other amount as will not result in any adverse accounting
consequences to the Company, as the Administrator determines in its sole
discretion, or (c) delivering to the Company already-owned Shares having a Fair
Market Value equal to the minimum statutory amount required to be withheld or
such other amount as will not result in any adverse accounting consequences to
the Company, as the Administrator determines in its sole discretion. The Fair
Market Value of the Shares to be withheld or delivered will be determined as of
the date that the taxes are required to be withheld.
(c) Compliance With Section 409A. Awards will be designed and operated in such a manner that they are
either exempt from the application of, or comply with, the requirements of
Section 409A such that the grant, payment, settlement or deferral will not be
subject to the additional tax or interest applicable under Section 409A, except
as otherwise determined in the sole discretion of the Administrator. Each
payment or benefit under this Plan and under each Award Agreement is intended to
constitute a separate payment for purposes of Section 1.409A-2(b)(2) of the
Treasury Regulations. The Plan, each Award and each Award Agreement under the
Plan is intended to be exempt from or otherwise meet the requirements of Section
409A and will be construed and interpreted, including but not limited with
respect to ambiguities and/or ambiguous terms, in accordance with such intent,
except as otherwise specifically determined in the sole discretion of the
Administrator. To the extent that an Award or payment, or the settlement or
deferral thereof, is subject to Section 409A the Award will be granted, paid,
settled or deferred in a manner that will meet the requirements of Section 409A,
such that the grant, payment, settlement or deferral will not be subject to the
additional tax or interest applicable under Section 409A.
15. No
Effect on Employment or Service.
Neither the Plan nor any Award will confer upon a Participant any right with
respect to continuing the Participants relationship as a Service Provider with
the Company, nor will they interfere in any way with the Participants right or
the Companys right to terminate such relationship at any time, with or without
cause, to the extent permitted by Applicable Laws.
16. Date of Grant. The date of
grant of an Award will be, for all purposes, the date on which the Administrator
makes the determination granting such Award, or such other later date as is
determined by the Administrator. Notice of the determination will be provided to
each Participant within a reasonable time after the date of such grant.
17. Term of Plan. Subject to
Section 23 of the Plan, the Plan will become effective upon
its approval by the Companys stockholders. It will continue in effect for a
term of ten (10) years from the date of the initial Board action to adopt the
Plan unless terminated earlier under Section 18 of
the Plan.
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18. Amendment and Termination of the Plan.
(a) Amendment and Termination.
The Administrator may at any time amend, alter, suspend or terminate the
Plan.
(b) Stockholder Approval. The
Company will obtain stockholder approval of any Plan amendment to the extent
necessary and desirable to comply with Applicable Laws.
(c) Effect of Amendment or Termination. No amendment, alteration, suspension or termination of the Plan will
impair the rights of any Participant, unless mutually agreed otherwise between
the Participant and the Administrator, which agreement must be in writing and
signed by the Participant and the Company. Termination of the Plan will not
affect the Administrators ability to exercise the powers granted to it
hereunder with respect to Awards granted under the Plan prior to the date of
such termination.
19. Compliance with Applicable Laws. The terms of the Plan are subject to Applicable Laws and shall be
interpreted in such a manner as to comply with Applicable Laws.
20. Conditions Upon Issuance of Shares.
(a) Legal Compliance. The
granting of Awards and the issuance and delivery of Shares under the Plan shall
be subject to all Applicable Laws, rule and regulations, and to such approvals
by any governmental agencies or national securities exchanges as may be
required. Shares will not be issued pursuant to the exercise or vesting of an
Award and the Company may not permit the exercise or vesting of an Award unless
the exercise or vesting of such Award and the issuance and delivery of such
Shares will comply with Applicable Laws, rules and regulations and will be
further subject to the approval of counsel for the Company with respect to such
compliance.
(b) Investment Representations. As a condition to the exercise of an Award, the Company may require the
person exercising such Award to represent and warrant at the time of any such
exercise that the Shares are being purchased only for investment and without any
present intention to sell or distribute such Shares if, in the opinion of
counsel for the Company, such a representation is required.
21. Inability to Obtain Authority. The inability of the Company to obtain authority from any regulatory
body having jurisdiction or to complete or comply with the requirements of any
registration or other qualification of the Awards and/or Shares under any state,
federal or foreign law or under the rules and regulations of the Securities and
Exchange Commission, the stock exchange on which Shares of the same class are
then listed, or any other governmental or regulatory body, which authority,
registration, qualification or rule compliance is deemed by the Companys
counsel to be necessary or advisable for the grant, exercise or vesting of
Awards or the issuance and sale of any Shares hereunder, will relieve the
Company of any liability in respect of the failure to grant Awards, to allow
exercise or vesting of Awards or to issue or sell such Shares as to which such
requisite authority, registration, qualification or rule compliance will not
have been obtained.
22. Forfeiture Events. The
Administrator may specify in an Award Agreement that the Participants rights,
payments, and benefits with respect to an Award shall be subject to reduction,
cancellation, forfeiture, or recoupment upon the occurrence of certain specified
events, in addition to
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any otherwise applicable
vesting or performance conditions of an Award. Such events may include, but
shall not be limited to, fraud, breach of a fiduciary duty, restatement of
financial statements as a result of fraud or willful errors or omissions,
termination of employment for cause, violation of material Company and/or
Subsidiary policies, breach of non-competition, confidentiality, or other
restrictive covenants that may apply to the Participant, or other conduct by the
Participant that is detrimental to the business or reputation of the Company
and/or its Subsidiaries. The Administrator may also require the application of
this Section with respect to any Award previously granted to a Participant even
without any specified terms being included in any applicable Award Agreement to
the extent required under Applicable Laws.
23. Stockholder Approval. The
Plan will be subject to approval by the stockholders of the Company within
twelve (12) months after the date the Plan is adopted by the Board. Such
stockholder approval will be obtained in the manner and to the degree required
under Applicable Laws.
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