AMENDED AND RESTATED
QLOGIC CORPORATION
2005 PERFORMANCE INCENTIVE PLAN
(Amended and Restated Effective July 16, 2009)
The purpose of
this QLogic Corporation 2005 Performance Incentive Plan (this
“ Plan ”) of QLogic Corporation, a Delaware
corporation (the “ Corporation ”), is to promote
the success of the Corporation and to increase stockholder value by
providing an additional means through the grant of awards to
attract, motivate, retain and reward selected employees and other
eligible persons.
The
Administrator (as such term is defined in Section 3.1) may
grant awards under this Plan only to those persons that the
Administrator determines to be Eligible Persons. An “
Eligible Person ” is any person who is either:
(a) an officer (whether or not a director) or employee of the
Corporation or one of its Subsidiaries; (b) a director of the
Corporation or one of its Subsidiaries; or (c) an individual
consultant or advisor who renders or has rendered bona fide
services (other than services in connection with the offering or
sale of securities of the Corporation or one of its Subsidiaries in
a capital-raising transaction or as a market maker or promoter of
securities of the Corporation or one of its Subsidiaries) to the
Corporation or one of its Subsidiaries and who is selected to
participate in this Plan by the Administrator; provided, however,
that a person who is otherwise an Eligible Person under clause
(c) above may participate in this Plan only if such
participation would not adversely affect either the
Corporation’s eligibility to use Form S-8 to register under
the Securities Act of 1933, as amended (the “ Securities
Act ”), the offering and sale of shares issuable under
this Plan by the Corporation or the Corporation’s compliance
with any other applicable laws. An Eligible Person who has been
granted an award (a “ participant ”) may, if
otherwise eligible, be granted additional awards if the
Administrator shall so determine. As used herein, “
Subsidiary ” means any corporation or other entity a
majority of whose outstanding voting stock or voting power is
beneficially owned directly or indirectly by the Corporation; and
“ Board ” means the Board of Directors of the
Corporation.
|
|
3.1
|
|
The Administrator
. This Plan shall be
administered by and all awards under this Plan shall be authorized
by the Administrator. The “ Administrator ”
means the Board or one or more committees appointed by the Board or
another committee (within its delegated authority) to administer
all or certain aspects of this Plan. Any such committee shall be
comprised solely of one or more directors or such number of
directors as may be required under applicable law. A committee may
delegate some or all of its authority to another committee so
constituted. The Board or a committee comprised solely of directors
may also delegate, to the extent permitted by Section 157(c) of the
Delaware General Corporation Law and any other applicable law, to
one or more officers of the Corporation, its powers under this Plan
(a) to designate the officers and employees of the Corporation
and its Subsidiaries who will receive grants of awards under this
Plan, and (b) to determine the number of shares subject to,
and the other terms and conditions of, such awards. The Board may
delegate different levels of authority to different committees with
administrative and grant authority under this Plan. Unless
otherwise provided in the Bylaws of the Corporation or the
applicable charter of any Administrator: (a) a majority of the
members of the acting Administrator shall constitute a quorum, and
(b) the vote of a majority of the members present assuming the
presence of a quorum or the unanimous written consent of the
members of the Administrator shall constitute action by the acting
Administrator.
|
|
|
|
|
|
|
|
|
|
With respect to awards intended to
satisfy the requirements for performance-based compensation under
Section 162(m) of the Internal Revenue Code of 1986, as amended
(the “ Code ”), this Plan shall be administered
by a committee consisting solely of two or more outside directors
(as this requirement is applied under Section 162(m) of the Code);
provided, however, that the failure to satisfy such requirement
shall not affect the validity of the action of any committee
otherwise duly authorized and acting in the
|
matter. Award
grants, and transactions in or involving awards, intended to be
exempt under Rule 16b-3 under the Securities Exchange Act of
1934, as amended (the “ Exchange Act ”), must be
duly and timely authorized by the Board or a committee consisting
solely of two or more non-employee directors (as this requirement
is applied under Rule 16b-3 promulgated under the Exchange
Act). To the extent required by any applicable listing agency, this
Plan shall be administered by a committee composed entirely of
independent directors (within the meaning of the applicable listing
agency).
|
|
3.2
|
|
Powers of the
Administrator . Subject to the express provisions
of this Plan, the Administrator is authorized and empowered to do
all things necessary or desirable in connection with the
authorization of awards and the administration of this Plan (in the
case of a committee or delegation to one or more officers, within
the authority delegated to that committee or person(s)), including,
without limitation, the authority to:
|
|
|
(a)
|
|
determine eligibility and, from
among those persons determined to be eligible, the particular
Eligible Persons who will receive an award under this
Plan;
|
|
|
|
|
|
|
|
(b)
|
|
grant awards to Eligible Persons,
determine the price at which securities will be offered or awarded
and the number of securities to be offered or awarded to any of
such persons, determine the other specific terms and conditions of
such awards consistent with the express limits of this Plan,
establish the installments (if any) in which such awards shall
become exercisable or shall vest (which may include, without
limitation, performance and/or time-based schedules), or determine
that no delayed exercisability or vesting is required, establish
any applicable performance targets, and establish the events of
termination or reversion of such awards;
|
|
|
|
|
|
|
|
(c)
|
|
approve the forms of award
agreements (which need not be identical either as to type of award
or among participants);
|
|
|
|
|
|
|
|
(d)
|
|
construe and interpret this Plan and
any agreements defining the rights and obligations of the
Corporation, its Subsidiaries, and participants under this Plan,
further define the terms used in this Plan, and prescribe, amend
and rescind rules and regulations relating to the administration of
this Plan or the awards granted under this Plan;
|
|
|
|
|
|
|
|
(e)
|
|
cancel, modify, or waive the
Corporation’s rights with respect to, or modify, discontinue,
suspend, or terminate any or all outstanding awards, subject to any
required consent under Section 8.6.5;
|
|
|
|
|
|
|
|
(f)
|
|
accelerate or extend the vesting or
exercisability or extend the term of any or all outstanding awards
(in the case of options or stock appreciation rights, within the
maximum ten-year term of such awards) in such circumstances as the
Administrator may deem appropriate (including, without limitation,
in connection with a termination of employment or services or other
events of a personal nature) subject to any required consent under
Section 8.6.5 (for purposes of clarity and without limiting
the generality of this provision, the Administrator’s
authority hereunder shall extend to any awards granted to
non-employee directors of the Corporation under Appendix A of
this Plan prior to August 28, 2008);
|
|
|
|
|
|
|
|
(g)
|
|
adjust the number of shares of
Common Stock subject to any award, adjust the price of any or all
outstanding awards or otherwise change previously imposed terms and
conditions, in such circumstances as the Administrator may deem
appropriate, in each case subject to Sections 4 and 8.6, and
provided that in no case (except due to an adjustment contemplated
by Section 7 or any repricing that may be approved by
stockholders) shall such an adjustment constitute a repricing (by
amendment, cancellation and regrant, exchange or other means) of
the per share exercise or base price of any option or stock
appreciation right;
|
|
|
|
|
|
|
|
(h)
|
|
determine the date of grant of an
award, which may be a designated date after but not before the date
of the Administrator’s action (unless otherwise designated by
the Administrator, the date of grant of an award shall be the date
upon which the Administrator took the action granting an
award);
|
|
|
(i)
|
|
determine whether, and the extent to
which, adjustments are required pursuant to Section 7 hereof
and authorize the termination, conversion, substitution or
succession of awards upon the occurrence of an event of the type
described in Section 7;
|
|
|
|
|
|
|
|
(j)
|
|
acquire or settle (subject to
Sections 7 and 8.6) rights under awards in cash, stock of
equivalent value, or other consideration; and
|
|
|
|
|
|
|
|
(k)
|
|
determine the fair market value of
the Common Stock or awards under this Plan from time to time and/or
the manner in which such value will be determined.
|
|
|
3.3
|
|
Binding
Determinations . Any action taken by, or inaction
of, the Corporation, any Subsidiary, or the Administrator relating
or pursuant to this Plan and within its authority hereunder or
under applicable law shall be within the absolute discretion of
that entity or body and shall be conclusive and binding upon all
persons. Neither the Board nor any Board committee, nor any member
thereof or person acting at the direction thereof, shall be liable
for any act, omission, interpretation, construction or
determination made in good faith in connection with this Plan (or
any award made under this Plan), and all such persons shall be
entitled to indemnification and reimbursement by the Corporation in
respect of any claim, loss, damage or expense (including, without
limitation, attorneys’ fees) arising or resulting therefrom
to the fullest extent permitted by law and/or under any directors
and officers liability insurance coverage that may be in effect
from time to time.
|
|
|
|
|
|
|
|
3.4
|
|
Reliance on Experts
. In making any
determination or in taking or not taking any action under this
Plan, the Board or a committee, as the case may be, may obtain and
may rely upon the advice of experts, including employees and
professional advisors to the Corporation. No director, officer or
agent of the Corporation or any of its Subsidiaries shall be liable
for any such action or determination taken or made or omitted in
good faith.
|
|
|
|
|
|
|
|
3.5
|
|
Delegation
. The Administrator may
delegate ministerial, non-discretionary functions to individuals
who are officers or employees of the Corporation or any of its
Subsidiaries or to third parties.
|
4. SHARES OF
COMMON STOCK SUBJECT TO THE PLAN; SHARE LIMITS
|
|
4.1
|
|
Shares Available
. Subject to the
provisions of Section 7.1, the capital stock that may be
delivered under this Plan shall be shares of the
Corporation’s authorized but unissued Common Stock and any
shares of its Common Stock held as treasury shares. For purposes of
this Plan, “ Common Stock ” means the common
stock of the Corporation and such other securities or property as
may become the subject of awards under this Plan, or may become
subject to such awards, pursuant to an adjustment made under
Section 7.1.
|
|
|
|
|
|
|
|
4.2
|
|
Share Limits
. The maximum number of
shares of Common Stock that may be delivered pursuant to awards
granted to Eligible Persons under this Plan (the “ Share
Limit ”) is equal to the sum of: (i) 25,100,000
shares of Common Stock, plus (ii) the number of any shares
subject to stock options granted under the Corporation’s
Stock Awards Plan (the “ Prior Plan ”) and
outstanding as of the date of stockholder approval of this Plan
(the “ Stockholder Approval Date ”) which
expire, or for any reason are cancelled or terminated, after the
Stockholder Approval Date without being exercised; provided, that
in no event shall the Share Limit exceed 45,401,584 shares (which
is the sum of the 25,100,000 shares set forth above, plus the
aggregate number of shares subject to options previously granted
and outstanding under the Prior Plan as of the Effective
Date).
|
|
|
|
|
|
|
|
|
|
Shares issued on or after
August 28, 2008 in respect of any “Full-Value
Award” granted under this Plan shall be counted against the
foregoing Share Limit as 1.75 shares for every one share issued in
connection with such award. (For example, if a stock bonus of 100
shares of Common Stock is granted under this Plan, 175 shares shall
be charged against the Share Limit in connection with that award.)
For this purpose, a “ Full-Value Award ” means
any award under this Plan that is not a stock option grant or a
stock appreciation right grant.
|
|
|
|
|
|
|
|
|
|
The
following limits also apply with respect to awards granted under
this Plan:
|
|
|
(a)
|
|
The
maximum number of shares of Common Stock that may be delivered
pursuant to options qualified as incentive stock options granted
under this Plan is 40,000,000 shares.
|
|
|
|
|
|
|
|
(b)
|
|
The
maximum number of shares of Common Stock subject to those options
and stock appreciation rights that are granted during any calendar
year to any individual under this Plan is 4,000,000
shares.
|
|
|
|
|
|
|
|
(c)
|
|
Additional limits with respect to
Performance-Based Awards are set forth in
Section 5.2.3.
|
|
|
|
|
Each of the foregoing numerical
limits is subject to adjustment as contemplated by Section 4.3,
Section 7.1, and Section 8.10.
|
|
|
|
|
|
|
|
4.3
|
|
Awards Settled in Cash, Reissue of
Awards and Shares . To the extent that an award is
settled in cash or a form other than shares of Common Stock, the
shares that would have been delivered had there been no such cash
or other settlement shall not be counted against the shares
available for issuance under this Plan. In the event that shares of
Common Stock are delivered in respect of a dividend equivalent
right, only the number of shares delivered with respect to the
award shall be counted against the share limits of this Plan. To
the extent that shares of Common Stock are delivered pursuant to
the exercise of a stock appreciation right or stock option, the
number of underlying shares as to which the exercise related shall
be counted against the applicable share limits under
Section 4.2, as opposed to only counting the shares actually
issued. (For purposes of clarity, if a stock appreciation right
relates to 100,000 shares and is exercised at a time when the
payment due to the participant is 15,000 shares, 100,000 shares
shall be charged against the applicable share limits under
Section 4.2 with respect to such exercise.) Shares that are
subject to or underlie awards which expire or for any reason are
cancelled or terminated, are forfeited, fail to vest, or for any
other reason are not paid or delivered under this Plan shall again
be available for subsequent awards under this Plan. Shares that are
exchanged by a participant or withheld by the Corporation as full
or partial payment in connection with any award under this Plan, as
well as any shares exchanged by a participant or withheld by the
Corporation or one of its Subsidiaries to satisfy the tax
withholding obligations related to any award, shall not be
available for subsequent awards under this Plan. Refer to
Section 8.10 for application of the foregoing share limits
with respect to assumed awards. The foregoing adjustments to the
share limits of this Plan are subject to any applicable limitations
under Section 162(m) of the Code with respect to awards intended as
performance-based compensation thereunder.
|
|
|
|
|
|
|
|
4.4
|
|
Reservation of Shares; No Fractional
Shares; Minimum Issue . The Corporation shall at all times
reserve a number of shares of Common Stock sufficient to cover the
Corporation’s obligations and contingent obligations to
deliver shares with respect to awards then outstanding under this
Plan (exclusive of any dividend equivalent obligations to the
extent the Corporation has the right to settle such rights in
cash). No fractional shares shall be delivered under this Plan. The
Administrator may pay cash in lieu of any fractional shares in
settlements of awards under this Plan. No fewer than 100 shares may
be purchased on exercise of any award (or, in the case of stock
appreciation or purchase rights, no fewer than 100 rights may be
exercised at any one time) unless the total number purchased or
exercised is the total number at the time available for purchase or
exercise under the award.
|
|
|
5.1
|
|
Type and Form of
Awards .
The Administrator shall determine the type or types of award(s) to
be made to each selected Eligible Person. Awards may be granted
singly, in combination or in tandem. Awards also may be made in
combination or in tandem with, in replacement of, as alternatives
to, or as the payment form for grants or rights under any other
employee or compensation plan of the Corporation or one of its
Subsidiaries. The types of awards that may be granted under this
Plan are:
|
5.1.1
Stock Options . A
stock option is the grant of a right to purchase a specified number
of shares of Common Stock during a specified period as determined
by the Administrator. An option may be intended as an incentive
stock option within the meaning of Section 422 of the Code (an
“ ISO ”) or a nonqualified stock option (an
option not intended to be an ISO). The award agreement for an
option will indicate if the option is intended as an ISO; otherwise
it will be deemed to be a nonqualified stock option. The maximum
term of each option (ISO or nonqualified) shall be ten
(10) years. The per share exercise price for each option shall
be not less than 100% of the fair market value of a share of Common
Stock on the date of grant of the option. When an option is
exercised, the exercise price for the shares to be purchased shall
be paid in full in cash or such other method permitted by the
Administrator consistent with Section 5.5.
5.1.2
Additional Rules Applicable to ISOs
. To the extent that the aggregate
fair market value (determined at the time of grant of the
applicable option) of stock with respect to which ISOs first become
exercisable by a participant in any calendar year exceeds $100,000,
taking into account both Common Stock subject to ISOs under this
Plan and stock subject to ISOs under all other plans of the
Corporation or one of its Subsidiaries (or any parent or
predecessor corporation to the extent required by and within the
meaning of Section 422 of the Code and the regulations
promulgated thereunder), such options shall be treated as
nonqualified stock options. In reducing the number of options
treated as ISOs to meet the $100,000 limit, the most recently
granted options shall be reduced first. To the extent a reduction
of simultaneously granted options is necessary to meet the $100,000
limit, the Administrator may, in the manner and to the extent
permitted by law, designate which shares of Common Stock are to be
treated as shares acquired pursuant to the exercise of an ISO. ISOs
may only be granted to employees of the Corporation or one of its
subsidiaries (for this purpose, the term “subsidiary”
is used as defined in Section 424(f) of the Code, which generally
requires an unbroken chain of ownership of at least 50% of the
total combined voting power of all classes of stock of each
subsidiary in the chain beginning with the Corporation and ending
with the subsidiary in question). There shall be imposed in any
award agreement relating to ISOs such other terms and conditions as
from time to time are required in order that the option be an
“incentive stock option” as that term is defined in
Section 422 of the Code. No ISO may be granted to any person
who, at the time the option is granted, owns (or is deemed to own
under Section 424(d) of the Code) shares of outstanding Common
Stock possessing more than 10% of the total combined voting power
of all classes of stock of the Corporation, unless the exercise
price of such option is at least 110% of the fair market value of
the stock subject to the option and such option by its terms is not
exercisable after the expiration of five years from the date such
option is granted.
5.1.3
Stock Appreciation Rights . A stock appreciation right or “
SAR ” is a right to receive a payment, in cash and/or
Common Stock, equal to the excess of the fair market value of a
specified number of shares of Common Stock on the date the SAR is
exercised over the fair market value of a share of Common Stock on
the date the SAR was granted (the “ base price
”) as set forth in the applicable award agreement. The
maximum term of an SAR shall be ten (10) years.
5.1.4
Other Awards . The
other types of awards that may be granted under this Plan include:
(a) stock bonuses, restricted stock, performance stock, stock
units, phantom stock, dividend equivalents, or similar rights to
purchase or acquire shares, whether at a fixed or variable price or
ratio related to the Common Stock, upon the passage of time, the
occurrence of one or more events, or the satisfaction of
performance criteria or other conditions, or any combination
thereof; (b) any similar securities with a value derived from
the value of or related to the Common Stock and/or returns thereon;
or (c) cash awards granted consistent with Section 5.2
below.
|
|
5.2
|
|
Section 162(m)
Performance-Based Awards . Without limiting the generality of
the foregoing, any of the types of awards listed in
Section 5.1.4 above may be granted as awards intended to
satisfy the requirements for “performance-based
compensation” within the meaning of Section 162(m) of the
Code (“ Performance-Based Awards ”). The grant,
vesting, exercisability or payment of Performance-Based Awards may
depend (or, in the case of stock options and SARs, may also depend)
on the degree of achievement of one or more performance goals
relative to a pre-established targeted level or level using one or
more of the Business Criteria set forth below (on an absolute or
relative basis) for the Corporation on a consolidated basis or for
one or more of the Corporation’s subsidiaries, segments,
divisions or business units, or any combination of the foregoing.
Any stock option or SAR intended as a Performance-Based Award shall
be subject only to the requirements of Section 5.2.1 and 5.2.3 in
order for such award to satisfy the requirements for
“performance-based compensation” under Section 162(m)
of the Code. Any other Performance-Based Award shall be subject to
all of the following provisions of this
Section 5.2.
|
5.2.1
Class; Administrator . The eligible class of persons for
Performance-Based Awards under this Section 5.2 shall be
officers and employees of the Corporation or one of its
Subsidiaries. The Administrator approving Performance-Based Awards
or making any certification required pursuant to Section 5.2.4
must be constituted as provided in Section 3.1 for awards that are
intended as performance-based compensation under Section 162(m) of
the Code.
5.2.2
Performance Goals . The specific performance goals for
Performance-Based Awards (other than stock options or SARs intended
as a Performance-Based Award) shall be, on an absolute or relative
basis, established based on one or more of the following business
criteria (“ Business Criteria ”) as selected by
the Administrator in its sole discretion: earnings per share, cash
flow (which means cash and cash equivalents derived from either net
cash flow from operations or net cash flow from operations,
financing and investing activities), total stockholder return,
gross revenue, revenue growth, operating income (before or after
taxes), net earnings (before or after interest, taxes, depreciation
and/or amortization), return on equity or on assets or on net
investment, cost containment or reduction, the fair market value of
a share of Common Stock, or any combination thereof. These terms
are used as applied under generally accepted accounting principles
or in the financial reporting of the Corporation or of its
Subsidiaries. To qualify awards as performance-based under
Section 162(m), the applicable Business Criterion (or Business
Criteria, as the case may be) and specific performance goal or
goals (“targets”) must be established and approved by
the Administrator during the first 90 days of the performance
period (and, in the case of performance periods of less than one
year, in no event after 25% or more of the performance period has
elapsed) and while performance relating to such target(s) remains
substantially uncertain within the meaning of Section 162(m) of the
Code. Performance targets shall be adjusted to mitigate the
unbudgeted impact of material, unusual or nonrecurring gains and
losses, accounting changes or other extraordinary events not
foreseen at the time the targets were set unless the Administrator
provides otherwise at the time of establishing the targets. The
applicable performance measurement period may not be less than
three months nor more than 10 years.
5.2.3
Form of Payment; Maximum Performance-Based Award
. Grants or awards under
this Section 5.2 may be paid in cash or shares of Common Stock or
any combination thereof. The maximum aggregate payment which may be
made pursuant to Performance-Based Awards that are payable or
relate to shares of Common Stock (including, without limitation,
stock options and SARs, whether payable in cash or stock) and that
are granted to any one participant in any one calendar year is
4,000,000 shares of Common Stock (or cash of equivalent value at
the time of payment), either individually or in the aggregate,
subject to adjustment as provided in Section 7.1. The
aggregate amount of compensation that may be paid to any one
participant in respect of all Performance-Based Awards payable only
in cash and not related to shares of Common Stock and granted to
that participant in any one calendar year shall not exceed
$5,000,000. Awards that are cancelled during the year shall be
counted against these limits to the extent permitted by Section
162(m) of the Code.
5.2.4
Certification of Payment . Before any Performance-Based Award under this
Section 5.2 (other than stock options and SARs) is paid and to
the extent required to qualify the award as performance-based
compensation within the meaning of Section 162(m) of the Code, the
Administrator must certify in writing that the performance
target(s) and any other material terms of the Performance-Based
Award were in fact timely satisfied.
5.2.5
Reservation of Discretion . The Administrator will have the discretion to
determine the res
|
