Exhibit
10.45
NETWORK EQUIPMENT
TECHNOLOGIES, INC.
2008 EQUITY INCENTIVE
PLAN
1.
Purposes of the Plan.
The purpose of this Plan
is to encourage ownership in Network Equipment Technologies, Inc.,
a Delaware corporation (the “ Company ”), by key
personnel whose long-term employment or other service relationship
with the Company is considered essential to the Company’s
continued progress and, thereby, encourage recipients to act in the
stockholders’ interest and share in the Company’s
success.
2.
Definitions.
As used herein, the
following definitions shall apply:
(a)
“ Administrator”
means the Board, any Committees, or such delegates of
the Board as shall be administering the Plan in accordance with
Section of the Plan.
(b)
“ Affiliate”
means any entity that is directly or indirectly
controlled by the Company or any entity in which the Company has a
significant ownership interest as determined by the
Administrator.
(c)
“Applicable
Laws” means the requirements
relating to the administration of stock option and stock award
plans under U.S. federal and state laws, any stock exchange or
quotation system on which the Company has listed or submitted for
quotation the Common Stock to the extent provided under the terms
of the Company's agreement with such exchange or quotation system
and, with respect to Awards subject to the laws of any foreign
jurisdiction where Awards are, or will be, granted under the Plan,
the laws of such jurisdiction.
(d)
“Automatic Director
Option” means a Nonstatutory Stock Option
that is automatically granted to an Outside Director at times and
subject to the terms and conditions as provided for under
Section .
(e)
“Award”
means a
Stock Award or Option granted in accordance with the terms of the
Plan.
(f)
“Awardee”
means an
Employee, Consultant or Director of the Company or any Affiliate
who has been granted an Award under the Plan.
(g)
“Award
Agreement” means a Stock Award
Agreement and/or Option Agreement, which may be in written or
electronic format, in such form and with such terms and conditions
as may be specified by the Administrator, evidencing the terms and
conditions of an individual Award. Each Award Agreement is
subject to the terms and conditions of the Plan.
(h)
“Board”
means the
Board of Directors of the Company.
(i)
“Change in
Control” means, unless such term
or an equivalent term is otherwise defined with respect to an Award
by the Awardee’s Option Agreement, Stock Award Agreement or
written contract of employment or service, the occurrence of any of
the following:
(i)
a “Corporate
Transaction,” meaning either:
(1)
the sale, lease, conveyance or
other disposition of all or substantially all of the
Company’s assets to any “person” (as such term is
used in Section 13(d) of the Exchange Act), entity or group of
persons acting in concert; or
(2)
a merger, consolidation or other
transaction of the Company with or into any other corporation,
entity or person, other than a transaction in which the holders of
at least 50% of the shares of capital stock of the Company
outstanding immediately prior thereto continue to hold (either by
voting securities remaining outstanding or by their being converted
into voting securities of the surviving entity or its controlling
entity) at least 50% of the total voting power represented by the
voting securities of the Company or such surviving entity (or its
controlling entity) outstanding immediately after such transaction;
or
(ii)
any person or group of
persons becoming the “beneficial owner” (as defined in
Rule 13d-3 under the Exchange Act), directly or indirectly, of
securities of the Company representing 50% or more of the total
voting power represented by the Company’s then outstanding
voting securities; or
(iii)
a contest for the
election or removal of members of the Board that results in the
removal from the Board of at least 50% of the incumbent members of
the Board.
(j)
“Code”
means the
United States Internal Revenue Code of 1986, as amended.
(k)
“Committee”
means the
compensation committee of the Board or a committee of Directors
appointed by the Board in accordance with Section of the
Plan.
(l)
“Common
Stock” means the common stock
of the Company.
(m)
“Company”
means
Network Equipment Technologies, Inc., a Delaware corporation, or
its successor.
(n)
“Consultant”
means any person
engaged by the Company or any Affiliate to render services to such
entity as an advisor or consultant.
(o)
“Conversion
Award” has the meaning set
forth in Section of the Plan.
(p)
“Director”
means a
member of the Board.
(q)
“Effective
Date” means the date the Company’s
stockholders approve the Plan.
(r)
“Employee”
means a
regular, active employee of the Company or any Affiliate, including
an Officer and/or Inside Director. The Administrator shall
determine whether or not the chairman of the Board qualifies as an
“Employee.” Within the limitations of Applicable Law,
the Administrator shall have the discretion to determine the effect
upon an Award and upon an individual's status as an Employee in the
case of (i) any individual who is classified by the Company or
its Affiliate as leased from or otherwise employed by a third party
or as intermittent or temporary, even if any such classification is
changed retroactively as a result of an audit, litigation or
otherwise, (ii) any leave of absence approved by the Company
or an Affiliate, (iii) any transfer between locations of
employment with the Company or an Affiliate or between the Company
and any Affiliate or between any Affiliates, (iv) any change
in the Awardee's status from an Employee to a Consultant or
Director, and (v) at the request of the Company or an
Affiliate an Employee becomes employed by any partnership, joint
venture or corporation not meeting the requirements of an Affiliate
in which the Company or an Affiliate is a party.
(s)
“Exchange
Act” means the Securities
Exchange Act of 1934, as amended.
(t)
“Fair Market
Value” means, as of any date,
the value of a share of Common Stock or other property as
determined by the Administrator, in its discretion subject to
the following:
(i)
If, on such date, the
Common Stock is listed on a national or regional securities
exchange or market system, including without limitation the New
York Stock Exchange, the Fair Market Value of a share of Common
Stock shall be the closing price on such date of a share of Common
Stock (or the mean of the closing bid and asked prices of a share
of Common Stock if the stock is so quoted instead) as quoted on
such exchange or market system constituting the primary market for
the Common Stock, as reported in The Wall Street Journal or
such other source as the Administrator deems reliable. If the
relevant date does not fall on a day on which the Common Stock has
traded on such securities exchange or market system, the date on
which the Fair Market Value shall be established shall be the last
day on which the Common Stock was so traded prior to the relevant
date, or such other appropriate day as shall be determined by the
Administrator, in its discretion.
(ii)
If, on such date, the
Common Stock is not listed on a national or regional securities
exchange or market system, the Fair Market Value of a share of
Common Stock shall be as determined by the Administrator in good
faith using a reasonable application of a reasonable valuation
method without regard to any restriction other than a restriction
which, by its terms, will never lapse.
(u)
“Grant Date”
means, for
all purposes, the date on which the Administrator approves the
grant of an Award, or such other date as is determined by the
Administrator, provided that in the case of any Incentive Stock
Option, the grant date shall be the later of the date on which the
Administrator makes the determination granting such Incentive Stock
Option or the date of commencement of the Awardee's employment
relationship with the Company.
(v)
“Incentive Stock
Option” means an Option intended
to qualify as an incentive stock option within the meaning of
Section 422 of the Code and the regulations promulgated
thereunder.
(w)
“Nonstatutory Stock
Option” means an Option not intended
to qualify as an Incentive Stock Option.
(x)
“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.
(y)
“Option”
means a
right granted under Section 8 to purchase a number of Shares
at such exercise price, at such times, and on such other terms and
conditions as are specified in the agreement or other documents
evidencing the Option (the “ Option Agreement
”). Both Options intended to qualify as Incentive Stock
Options and Nonstatutory Stock Options may be granted under the
Plan.
(z)
“Outside
Director” means a Director who is not an
Employee.
(aa)
“Participant”
means the
Awardee or any person (including any estate) to whom an Award has
been assigned or transferred as permitted hereunder.
(bb)
“Plan”
means this
Network Equipment Technologies, Inc. 2008 Equity Incentive
Plan.
(cc)
“ Prior Plans
” means the Company’s 1993 Stock Option
Plan, as amended and the Company’s 1997 Stock Option Program,
as amended.
(dd)
“Qualifying Performance
Criteria” shall have the meaning set forth in
Section 13(b) of the Plan.
(ee)
“Share”
means a
share of the Common Stock, as adjusted in accordance with
Section of the Plan.
(ff)
“Stock Appreciation
Right” means a right to receive
cash and/or shares of Common Stock based on a change in the Fair
Market Value of a specific number of shares of Common Stock between
the grant date and the exercise date granted under Section 11.
(gg)
“Stock
Award” means an award or
issuance of Shares, Stock Units, Stock Appreciation Rights or other
similar awards made under Section 11 of the Plan, the grant,
issuance, retention, vesting, settlement, and/or transferability of
which is subject during specified periods of time to such
conditions (including continued employment or performance
conditions) and terms as are expressed in the agreement or other
documents evidencing the Award (the “ Stock Award
Agreement ”).
(hh)
“Stock Unit”
means a
bookkeeping entry representing an amount equivalent to the Fair
Market Value of one Share (or a fraction or multiple of such
value), payable in cash, property or Shares. Stock Units
represent an unfunded and unsecured obligation of the Company,
except as otherwise provided for by the Administrator.
(ii)
“Subsidiary”
means any
company (other than the Company) in an unbroken chain of companies
beginning with the Company, provided each company in the unbroken
chain (other than the Company) owns, at the time of determination,
stock possessing 50% or more of the total combined voting power of
all classes of stock in one of the other companies in such
chain.
(jj)
“Termination of
Employment” shall mean ceasing to be
an Employee, Consultant or Director, as determined in the sole
discretion of the Administrator. However, for Incentive Stock
Option purposes, Termination of Employment will occur when the
Awardee ceases to be an employee (as determined in accordance with
Section 3401(c) of the Code and the regulations promulgated
thereunder) of the Company or one of its Subsidiaries. The
Administrator shall determine whether any corporate transaction,
such as a sale or spin-off of a division or business unit, or a
joint venture, shall be deemed to result in a Termination of
Employment.
(kk)
“Total and Permanent
Disability” shall have the meaning
set forth in Section 22(e)(3) of the Code.
3.
Stock Subject to the Plan.
(a)
Aggregate Number of
Shares. Subject to the
provisions of Section of the Plan, the number of Shares that
may be sold or issued under the Plan is 1,200,000 shares of Common
Stock, reduced share-for-share by the number of shares of Common
Stock granted or subject to awards granted under either of the
Prior Plans during the period commencing on March 29, 2008 and
ending on August 8, 2008. The number of Shares that may be
sold or issued under the Plan shall also include up to an
additional 5,303,155 shares of Common Stock subject to outstanding
awards under the Prior Plans as of March 28, 2008 that become
available for re-issuance as provided in subsection
below.
(b)
Counting of Award
Shares. Any Shares that are subject to
Awards granted under the Plan other than Options or Stock
Appreciation Rights shall be counted against the Plan limit as one
and one half (1.5) Shares for every one (1) Share granted (the
“ Award Ratio ”). Shares that are subject to
Options or Stock Appreciation Rights granted under the Plan shall
be counted against the Plan limit on a share-for-share basis. With
regard to Stock Appreciation Rights, the number of Shares counted
against the Plan limit shall be determined on the basis of the
gross number of Shares exercised and not the net number of Shares
delivered.
(c)
Shares Available for
Re-Issuance .
(i)
Re-grant of Cancelled
Shares. Shares subject to or issued
pursuant to Awards granted under the Plan, as well as Shares
subject to or issued pursuant to outstanding awards under the Prior
Plans as of March 28, 2008, that are settled in cash, cancelled,
terminate, expire, lapse, or are forfeited for any reason
(including Shares repurchased by the Company upon the
Awardee’s failure to vest in or otherwise earn the Shares),
shall be available for re-grant under the Plan. For each Share
subject to any such award other than stock options or stock
appreciation rights, the number of Shares that become available for
re-grant shall be multiplied by the Award Ratio set forth in
Section.
(ii)
No Re-grant of Shares
Used for Payment. If an
Awardee pays the exercise or purchase price of an Award granted
under the Plan or the Prior Plans through the tender of Shares, or
if Shares are tendered or withheld to satisfy any Company
withholding obligations, the number of Shares so tendered or
withheld (whether issued under the Plan or the Prior Plans) shall
not become available for re-issuance under the
Plan.
(d)
Code Section 162(m) Share
Limits. Subject to
the provisions of Section of the Plan, the aggregate number
of Shares subject to Awards granted under this Plan during any
fiscal year to any one Awardee shall not exceed 600,000, except
that in connection with his or her first commencing service with
the Company or an Affiliate, an Awardee may be granted Awards
covering up to an additional 400,000 Shares during the year in
which such service commences. Notwithstanding anything to the
contrary in the Plan, the limitations set forth in this Section 3
shall be
subject to adjustment under Section of the Plan only to the extent that such
adjustment will not affect the status of any Award intended to
qualify as “performance based compensation” under Code
Section 162(m).
4.
Administration of the Plan.
(a)
Procedure .
(i)
Multiple
Administrative Bodies. The Plan
shall be administered by the Board, a Committee and/or other
delegates approved by the Board consistent with Applicable
Law.
(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, Awards to “covered employees” within the
meaning of Section 162(m) of the Code or Employees that the
Committee determines may be “covered employees” in the
future shall be made by a Committee of two 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 promulgated under the Exchange Act
(“Rule 16b-3”), Awards to Officers and Directors
shall be made by the entire Board or a Committee of two or more
“non-employee directors” within the meaning of
Rule 16b-3.
(iv)
Other
Administration. Except
to the extent prohibited by Applicable Law, the Board or a
Committee may delegate to an authorized officer or officers of the
Company the power to approve Awards to persons eligible to receive
Awards under the Plan who are not (A) subject to
Section 16 of the Exchange Act or (B) at the time of such
approval, “covered employees” under Section 162(m)
of the Code.
(v)
Delegation of
Authority for the Day-to-Day Administration of the Plan.
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.
(vi)
Securities
Exchange . The Plan
will be administered in a manner that complies with any applicable
securities exchange (or market system) listing
requirements.
(b)
Powers of the
Administrator. Subject to
the provisions of the Plan and, in the case of a Committee or
delegates acting as the Administrator, subject to the specific
duties delegated to such Committee or delegates, the Administrator
shall have the authority, in its discretion:
(i)
to select the Employees,
Consultants and Directors of the Company or its Affiliates to whom
Awards are to be granted hereunder;
(ii)
to determine the number
of shares of Common Stock to be covered by each Award granted
hereunder;
(iii)
to determine the type of
Award to be granted to the selected Employees, Consultants and
Directors;
(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 and/or purchase price (if
applicable), the time or times when an Award may be exercised
(which may or may not be based on performance criteria), the
vesting schedule, any vesting and/or exercisability acceleration or
waiver of forfeiture restrictions, the acceptable forms of
consideration, the term, and any restriction or limitation
regarding any Award or the Shares relating thereto, based in each
case on such factors as the Administrator, in its sole discretion,
shall determine and may be established at the time an Award is
granted or thereafter;
(vi)
to correct
administrative errors;
(vii)
to construe and
interpret the terms of the Plan (including sub-plans and Plan
addenda) and Awards granted pursuant to the Plan;
(viii)
to adopt rules and
procedures relating to the operation and administration of the Plan
to accommodate the specific requirements of local laws and
procedures. Without limiting the generality of the foregoing,
the Administrator is specifically authorized (A) to adopt the
rules and procedures regarding the conversion of local currency,
withholding procedures and handling of stock certificates which
vary with local requirements and (B) to adopt sub-plans and
Plan addenda as the Administrator deems desirable, to accommodate
foreign laws, regulations and practice;
(ix)
to prescribe, amend and
rescind rules and regulations relating to the Plan, including rules
and regulations relating to sub-plans and Plan addenda;
(x)
to modify or amend each
Award, including, but not limited to, the acceleration of vesting
and/or exercisability, provided, however, that any such amendment
is subject to Section of the Plan and except as set forth in
that Section, may not impair any outstanding Award unless agreed to
in writing by the Participant;
(xi)
to allow Participants to
satisfy withholding tax amounts by electing to have the Company
withhold from the Shares to be issued upon exercise of an Option or
vesting of a Stock Award that number of Shares having a Fair Market
Value equal to the amount required to be withheld. The Fair
Market Value of the Shares to be withheld shall be determined in
such manner and on such date that the Administrator shall determine
or, in the absence of provision otherwise, on the date that the
amount of tax to be withheld is to be determined. All
elections by a Participant to have Shares withheld for this purpose
shall be made in such form and under such conditions as the
Administrator may provide;
(xii)
to authorize conversion
or substitution under the Plan of any or all stock options, stock
appreciation rights or other stock awards held by service providers
of an entity acquired by the Company (the “ Conversion
Awards ”). Any conversion or substitution shall be
effective as of the close of the merger, acquisition or other
transaction. The Conversion Awards may be Nonstatutory Stock
Options or Incentive Stock Options, as determined by the
Administrator, with respect to options granted by the acquired
entity; provided, however, that with respect to the conversion of
stock appreciation rights in the acquired entity, the Conversion
Awards shall be Nonstatutory Stock Options. Unless otherwise
determined by the Administrator at the time of conversion or
substitution, all Conversion Awards shall have the same terms and
conditions as Awards generally granted by the Company under the
Plan;
(xiii)
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;
(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
or under any other Company policy relating to Company stock and
stock ownership and (B) restrictions as to the use of a
specified brokerage firm for such resales or other
transfers;
(xv)
to provide, either at
the time an Award is granted or by subsequent action, that an Award
shall contain as a term thereof, a right, either in tandem with the
other rights under the Award or as an alternative thereto, of the
Participant to receive, without payment to the Company, a number of
Shares, cash or a combination thereof, the amount of which is
determined by reference to the value of the Award;
(xvi)
to make all other
determinations deemed necessary or advisable for administering the
Plan and any Award granted hereunder.
(c)
Effect of Administrator's
Decision. All
decisions, determinations and interpretations by the Administrator
regarding the Plan, any rules and regulations under the Plan and
the terms and conditions of any Award granted hereunder, shall be
final and binding on all Participants and on all other persons.
The Administrator shall consider such factors as it deems
relevant, in its sole and absolute discretion, to making such
decisions, determinations and interpretations including, without
limitation, the recommendations or advice of any officer or other
employee of the Company and such attorneys, consultants and
accountants as it may select.
5.
Eligibility.
Awards may be granted to
Employees, Consultants and Directors of the Company or any of its
Affiliates; provided that Incentive Stock Options may be granted
only to Employees of the Company or of a Subsidiary of the
Company.
6.
Term of Plan.
The Plan shall become
effective on the Effective Date, and subject to earlier termination
by the Administrator under Section 15 of the Plan, shall remain in
effect thereafter. However, in the absence of further
approval by stockholders of the Company, no Incentive Stock Option
shall be granted more than ten (10) years from the Effective Date
of the Plan.
7.
Term of Award.
The term of each Award
shall be determined by the Administrator and stated in the Award
Agreement. In the case of Options and Stock Appreciation
Rights, the term shall be seven (7) years from the Grant Date
or such shorter term as may be provided in the Award Agreement;
provided that an Incentive Stock Option granted to an Employee who
on the Grant Date owns stock representing more than ten percent
(10%) of the voting power of all classes of stock of the Company or
any Subsidiary shall have a term of no more than five (5) years
from the Grant Date.
8.
Options.
The Administrator may
grant an Option or provide for the grant of an Option, either from
time to time in the discretion of the Administrator or
automatically upon the occurrence of specified events, including,
without limitation, the achievement of performance goals, the
satisfaction of an event or condition within the control of the
Awardee or within the control of others.
(a)
Option Agreement.
Each Option
Agreement shall contain provisions regarding (i) the number of
Shares that may be issued upon exercise of the Option,
(ii) the type of Option, (iii) the exercise price of the
Shares and the means of payment for the Shares, (iv) the term
of the Option, (v) such terms and conditions on the vesting
and/or exercisability of an Option as may be determined from time
to time by the Administrator, (vi) restrictions on the
transfer of the Option or the Shares issued upon exercise of the
Option and forfeiture provisions and (vii) such further terms
and conditions, in each case not inconsistent with this Plan as may
be determined from time to time by the Administrator.
(b)
Exercise Price.
The per
Share exercise price for the Shares to be issued pursuant to
exercise of an Option shall be determined by the Administrator, but
in any case shall be no less than one hundred percent (100%) of the
Fair Market Value per Share on the Grant Date. The foregoing
provision shall not preclude the issuance of Conversion Awards
granted in substitution and/or conversion of options of an acquired
entity at a per Share exercise price of less than 100% of the Fair
Market Value per Share on the date of such substitution and/or
conversion.
(c)
Vesting Period and Exercise
Dates. Options
granted under this Plan shall vest and/or be exercisable at such
time and in such installments during the period prior to the
expiration of the Option's term as determined by the Administrator.
The Administrator shall have the right to make the timing of
the ability to exercise any Option granted under this Plan subject
to continued employment, the passage of time and/or such
performance requirements as deemed appropriate by the
Administrator. In the discretion of the Administrator, an Option
may be fully vested and immediately exercisable upon issuance
At any time after the grant of an Option, the Administrator
may reduce or eliminate any restrictions surrounding any
Participant's right to exercise all or part of the
Option.
(d)
Form of Consideration.
The
Administrator shall determine the acceptable form of consideration
for exercising an Option, including the method of payment, either
through the terms of the Option Agreement or at the time of
exercise of an Option. Acceptable forms of consideration may
include:
(i)
cash;
(ii)
check or wire transfer
(denominated in U.S. Dollars);
(iii)
subject to the Company's
discretion to refuse for any reason and at any time to accept such
consideration and subject to any conditions or limitations
established by the Administrator, other Shares held by the
Participant which have a Fair Market Value on the date of
surrender equal to the aggregate exercise price of the Shares as to
which said Option shall be exercised;
(iv)
consideration received
by the Company under a broker-assisted sale and remittance program
acceptable to the Administrator;
(v)
cashless “net
exercise” arrangement pursuant to which the Company will
reduce the number of Shares issued upon exercise by the largest
whole number of Shares having an aggregate Fair Market Value that
does not exceed the aggregate exercise price; provided that the
Company shall accept a cash or other payment from the Participant
to the extent of any remaining balance of the exercise price not
satisfied by such reduction in the number o
