Exhibit 10.52
PACKETEER, INC.
1999 STOCK INCENTIVE
PLAN
Amended and Restated Effective as
of December 12, 2007
ARTICLE ONE
GENERAL
PROVISIONS
This 1999 Stock Incentive Plan is
intended to promote the interests of Packeteer, Inc., a Delaware
corporation, by providing eligible persons in the
Corporation’s service with the opportunity to acquire a
proprietary interest, or otherwise increase their proprietary
interest, in the Corporation as an incentive for them to remain in
such service.
Capitalized terms shall have the
meanings assigned to such terms in the attached
Appendix.
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II.
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STRUCTURE OF
THE PLAN
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A. The Plan shall be divided into
four separate equity programs:
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the Discretionary Option/SAR
Program under which eligible persons may, at the discretion of the
Plan Administrator, be granted Options and/or Stock Appreciation
Rights;
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the Restricted Stock/Restricted
Stock Unit Program under which eligible persons may, at the
discretion of the Plan Administrator, be granted Restricted Stock
Purchase Rights, Restricted Stock Bonuses and/or Restricted Stock
Units;
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the Performance Award Program
under which eligible persons may, at the discretion of the Plan
Administrator, be granted Performance Shares and/or Performance
Units; and
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the Automatic Non-Employee
Director Grant Program under which eligible non-employee Board
members shall automatically receive grants of Restricted Stock Unit
Awards at designated intervals over their period of continued Board
service.
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B. The provisions of Articles One
and Six shall apply to all equity programs under the Plan and shall
govern the interests of all persons under the Plan.
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III.
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ADMINISTRATION OF THE PLAN
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A. The Primary Committee shall have
sole and exclusive authority to administer the Discretionary
Option/SAR Grant Program, Restricted Stock/Restricted Stock Unit
Program and Performance Award Program with respect to
Section 16 Insiders and Covered Employees. Administration of
the Discretionary Option/SAR Grant Program, Restricted
Stock/Restricted Stock Unit Program and Performance Award Program
with respect to all other persons eligible to participate in those
programs may, at the Board’s discretion, be vested in the
Primary Committee or a Secondary Committee, or the Board may retain
the power to administer those programs with respect to all such
persons. However, any Awards granted to members of the Primary
Committee under the Discretionary Option/SAR Grant Program,
Restricted Stock/Restricted Stock Unit Program or Performance Award
Program shall be made by a disinterested majority of the
Board.
B. The Board may, in its discretion
by resolution adopted by the Board, authorize one or more officers
of the Corporation to grant one or more Awards of Options, SARs
and/or Restricted Stock Units under the Discretionary Option/SAR
Grant Program and the Restricted Stock/Restricted Stock Unit
Program, without further approval of the Board or the Primary or
Secondary Committee, to any Employee, other than a person who, at
the time of such grant, is a Section 16 Insider or a Covered
Employee, and to determine the number and vesting terms of the
shares of Common Stock or Restricted Stock Units to be subject to
such Awards; provided, however, that (1) no Employee shall be
granted in any calendar year Option or SAR Awards for more than
50,000 shares of Common Stock or Restricted Stock Unit Awards for
more than 25,000 such units, (2) the number of shares of
Common Stock or Restricted Stock Units subject to each such Option,
SAR or Restricted Stock Unit Award shall comply with guidelines
established from time to time by the Board or the Primary
Committee, and (3) each such Option, SAR and Restricted Stock
Unit Award shall be subject to the terms and conditions of the
appropriate standard form of Award Agreement approved by the Board
or the Primary Committee and shall conform to the provisions of the
Plan and such other guidelines as shall be established from time to
time by the Board or the Primary Committee. Any officer or officers
so authorized by the Board shall be deemed the Plan Administrator
solely for the purpose of granting such Option, SAR and Restricted
Stock Unit Awards.
C. Members of the Primary Committee
or any Secondary Committee shall serve for such period of time as
the Board may determine and may be removed by the Board at any
time. The Board may also at any time terminate the functions of any
Secondary Committee and any officer delegated authority pursuant to
Section III.B above and reassume all powers and authority
previously delegated to such committee or officer.
D. Except for an officer delegated
limited authority pursuant to Section III.B above, each Plan
Administrator shall, within the scope of its administrative
functions under the Plan, have full power and authority (subject to
the provisions of the Plan) to establish such rules and regulations
as it may deem appropriate for proper administration of the
Discretionary Option/SAR Grant Program, Restricted Stock/Restricted
Stock Unit Program and Performance Award Program and to make such
determinations under, and issue such interpretations of, the
provisions of those programs and any outstanding Awards thereunder
as it may deem necessary or advisable. Decisions of the Plan
Administrator within the scope of its administrative functions
under the Plan shall be final and binding on all parties who have
an interest in the Discretionary Option/SAR Grant Program,
Restricted Stock/Restricted Stock Unit Program or Performance Award
Program under its jurisdiction or any Award thereunder.
2.
E. Service on the Primary Committee
or the Secondary Committee shall constitute service as a Board
member, and members of each such committee shall accordingly be
entitled to full indemnification and reimbursement as Board members
for their service on such committee. No member of the Primary
Committee or the Secondary Committee shall be liable for any act or
omission made in good faith with respect to the Plan or any Awards
under the Plan.
F. Administration of the Automatic
Non-Employee Director Grant Program shall be self-executing in
accordance with the terms of that program, and no Plan
Administrator shall exercise any discretionary functions with
respect to any Restricted Stock Unit Awards made under that
program.
A. The persons eligible to
participate in the Discretionary Option/SAR Grant Program,
Restricted Stock/Restricted Stock Unit Program and Performance
Award Program are as follows:
(i) Employees,
(ii) non-employee members of the
Board or the board of directors of any Parent or Subsidiary,
and
(iii) consultants and other
independent advisors who provide services to the Corporation (or
any Parent or Subsidiary).
B. Except for an officer delegated
limited authority pursuant to Section III.B above, each Plan
Administrator shall, within the scope of its administrative
jurisdiction under the Plan, have full authority to determine with
respect to Awards granted under the Discretionary Option/SAR Grant
Program, Restricted Stock/Restricted Stock Unit Program and
Performance Award Program (i) the type of Award to be granted,
(ii) which eligible persons are to receive such Awards,
(iii) the time or times when those Awards are to be granted,
(iv) the number of shares to be covered by each such Award,
(v) the exercise or purchase price, if any, under each such
Award, (vi) the timing, terms and conditions of the
exercisability or vesting (if any) of each such Award or any shares
acquired pursuant thereto, (vii) the maximum term for which
the Award is to remain outstanding, (viii) the Performance
Measures, Performance Period, Performance Award Formula and
Performance Goals applicable to any Award and the extent to which
such Performance Goals have been attained, (ix) the effect of
the Participant’s termination of Service on any of the
foregoing, and (x) all other terms, conditions and
restrictions applicable to any Award or Shares acquired pursuant
thereto not inconsistent with the terms of the Plan.
C. The individuals who shall be
eligible to participate in the Automatic Non-Employee Director
Grant Program shall be limited to (i) those individuals who
first become non-employee Board members on or after the
Underwriting Date, whether through appointment by the Board or
election by the Corporation’s stockholders, and
(ii) those individuals who continue
3.
to serve as non-employee Board members at one or
more Annual Stockholders Meetings held after the Underwriting Date.
A non-employee Board member who has previously been an Employee
shall not be eligible to receive the initial
automatic grant of a Restricted Stock Unit Award under the
Automatic Non-Employee Director Grant Program at the time he or she
first becomes a non-employee Board member, but shall be eligible to
receive one or more annual automatic grants of a Restricted Stock
Unit Award under the Automatic Non-Employee Director Grant Program
while he or she continues to serve as a non-employee Board
member.
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V.
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STOCK
SUBJECT TO THE PLAN
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A. The stock issuable under the Plan
shall be shares of authorized but unissued or reacquired Common
Stock, including shares repurchased by the Corporation on the open
market. The number of shares of Common Stock reserved for issuance
over the term of the Plan shall not exceed the sum of
(i) 3,845,917 shares plus (ii) the additional shares of
Common Stock automatically added to the share reserve each year
pursuant to the provisions of Section V. B. of this Article
One.
B. The number of shares of Common
Stock available for issuance under the Plan shall automatically
increase on the first trading day of January each calendar year
during the term of the Plan, beginning with calendar year 2000, by
an amount equal to five percent (5 %) of the total number of shares
of Common Stock outstanding on the last trading day in December of
the immediately preceding calendar year, but in no event shall any
such annual increase exceed 3,000,000 shares.
C. No Participant may be granted
Options or Freestanding SARs for more than 1,000,000 shares of
Common Stock in the aggregate per calendar year. No Participant may
be granted Restricted Stock Awards or Awards of Restricted Stock
Units intended, in either case, to result in the payment of
Performance-Based Compensation for more than 500,000 shares of
Common Stock in the aggregate per calendar year. No Participant may
be granted Performance Shares intended to result in the payment of
Performance-Based Compensation for more than 150,000 shares of
Common Stock in the aggregate for each year contained in the
Performance Period with respect to such Award. No Participant may
be granted Performance Units intended to result in the payment of
Performance-Based Compensation for more than $1,500,000 for each
year contained in the Performance Period with respect to such
Award.
D. Shares of Common Stock subject to
outstanding Options (including Options incorporated into this Plan
from the Predecessor Plan) or Freestanding SARs shall be available
for subsequent issuance under the Plan to the extent those Options
or Freestanding SARs expire or terminate for any reason prior to
exercise in full. Unvested shares issued under the Plan and
subsequently forfeited, cancelled or repurchased by the Corporation
at the original issue price paid per share and unvested shares
subject to Restricted Stock Unit Awards or Performance Share Awards
cancelled prior to settlement shall be added back to the number of
shares of Common Stock reserved for issuance under the Plan and
shall accordingly be available for reissuance through one or more
subsequent Awards granted under the Plan. However, should the
exercise price of an Option under the Plan be paid with shares of
Common Stock or should shares of Common Stock otherwise issuable
under the Plan be withheld by the Corporation in satisfaction of
the withholding taxes incurred in connection with the exercise,
vesting or
4.
settlement of an Award under the Plan, then the
number of shares of Common Stock available for issuance under the
Plan shall be reduced by the gross number of shares for which the
Award is exercised, becomes vested or is settled, and not by the
net number of shares of Common Stock issued to the holder of such
Award. Shares of Common Stock underlying one or more SARs exercised
under the Plan shall not be available for subsequent
issuance under the Plan.
E. If any change is made to the
Common Stock by reason of any stock split, stock dividend,
recapitalization, combination of shares, exchange of shares or
other change affecting the outstanding Common Stock as a class
without the Corporation’s receipt of consideration,
appropriate adjustments shall be made by the Plan Administrator to
(i) the maximum number and/or class of securities issuable
under the Plan, (ii) the maximum number and/or class of
securities for which any one person may be granted one or more
Awards under the Plan within a specified period of time as provided
in Section V.C of this Article One, (iii) the number
and/or class of securities for which grants are subsequently to be
made under the Automatic Non-Employee Director Grant Program to new
and continuing non-employee Board members, (iv) the number
and/or class of securities and the exercise price per share in
effect under each outstanding Option and SAR under the Plan,
(v) the number and/or class of securities in effect under each
outstanding Restricted Stock Award, Restricted Stock Unit Award and
Performance Share Award under the Plan, (vi) the number and/or
class of securities and price per share in effect under each
outstanding Option incorporated into this Plan from the Predecessor
Plan and (vii) the maximum number and/or class of securities
by which the share reserve is to increase automatically each
calendar year pursuant to the provisions of Section V.B. of this
Article One. Such adjustments to the outstanding Awards are to be
effected in a manner which shall preclude the enlargement or
dilution of rights and benefits under such Awards. The adjustments
determined by the Plan Administrator shall be final, binding and
conclusive.
5.
ARTICLE TWO
DISCRETIONARY OPTION/SAR GRANT
PROGRAM
Each Option shall be evidenced by an
Award Agreement in the form approved by the Plan Administrator;
provided , however, that the Award Agreement shall comply
with the terms specified below. Each Award Agreement evidencing an
Incentive Option shall, in addition, be subject to the provisions
of the Plan applicable to such Options.
A. Exercise Price
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1. The exercise price per share
shall be fixed by the Plan Administrator but shall not be less than
one hundred percent (100%) of the Fair Market Value per share
of Common Stock on the Option grant date.
2. The exercise price shall become
immediately due upon exercise of the Option and shall, subject to
the provisions of the Award Agreement evidencing the Option, be
payable in one or more of the forms specified below:
(i) cash or check made payable to
the Corporation,
(ii) shares of Common Stock held for
the requisite period (if any) necessary to avoid a charge to the
Corporation’s earnings for financial reporting purposes and
valued at Fair Market Value on the Exercise Date, or
(iii) to the extent the Option is
exercised for vested shares, through a special sale and remittance
procedure pursuant to which the Participant shall concurrently
provide irrevocable instructions to (a) a
Corporation-designated brokerage firm to effect the immediate sale
of the purchased shares and remit to the Corporation, out of the
sale proceeds available on the settlement date, sufficient funds to
cover the aggregate exercise price payable for the purchased shares
plus all applicable Federal, state and local income and employment
taxes required to be withheld by the Corporation by reason of such
exercise and (b) the Corporation to deliver the certificates
for the purchased shares directly to such brokerage firm in order
to complete the sale.
Except to the extent such sale and
remittance procedure is utilized, payment of the exercise price for
the purchased shares must be made on the Exercise Date.
B. Exercise and Term of
Options . Each Option shall be exercisable at such time or
times, during such period and for such number of shares as shall be
determined by the Plan Administrator and set forth in the Award
Agreement evidencing the Option. However, no Option shall have a
term in excess of ten (10) years measured from the Option
grant date.
6.
C. Effect of Termination of
Service .
1. The following provisions shall
govern the exercise of any Options held by the Participant at the
time of cessation of Service or death:
(i) Any Option outstanding at the
time of the Participant’s cessation of Service for any reason
shall remain exercisable for such period of time thereafter as
shall be determined by the Plan Administrator and set forth in the
Award Agreement evidencing the Option, but no such Option shall be
exercisable after the expiration of the Option term.
(ii) Any Option held by the
Participant at the time of death and exercisable in whole or in
part at that time may be subsequently exercised by the personal
representative of the Participant’s estate or by the person
or persons to whom the Option is transferred pursuant to the
Participant’s will or in accordance with the laws of descent
and distribution or by the Participant’s designated
beneficiary or beneficiaries of that Option.
(iii) Should the Participant’s
Service be terminated for Misconduct, then all outstanding Options
held by the Participant shall terminate immediately and cease to be
outstanding.
(iv) During the applicable
post-Service exercise period, the Option may not be exercised in
the aggregate for more than the number of vested shares for which
the Option is exercisable on the date of the Participant’s
cessation of Service. Upon the expiration of the applicable
exercise period or (if earlier) upon the expiration of the Option
term, the Option shall terminate and cease to be outstanding for
any vested shares for which the Option has not been exercised.
However, the Option shall, immediately upon the Participant’s
cessation of Service, terminate and cease to be outstanding to the
extent the Option is not otherwise at that time exercisable for
vested shares.
2. The Plan Administrator shall have
complete discretion, exercisable either at the time an Option is
granted or at any time while the Option remains outstanding,
to:
(i) extend the period of time for
which the Option is to remain exercisable following the
Participant’s cessation of Service from the limited exercise
period otherwise in effect for that Option to such greater period
of time as the Plan Administrator shall deem appropriate, but in no
event beyond the expiration of the Option term, and/or
(ii) permit the Option to be
exercised, during the applicable post-Service exercise period, not
only with respect to the number of vested shares of Common Stock
for which such Option is exercisable at the time of the
Participant’s cessation of Service but also with respect to
one or more additional installments in which the Participant would
have vested had the Participant continued in Service.
7.
D. Stockholder Rights
. The holder of an Option shall have no stockholder rights with
respect to the shares subject to the Option until such person shall
have exercised the Option, paid the exercise price and become a
holder of record of the purchased shares.
E. Repurchase Rights .
The Plan Administrator shall have the discretion to grant Options
which are exercisable for unvested shares of Common Stock. Should
the Participant cease Service while holding such unvested shares,
the Corporation shall have the right to repurchase, at the exercise
price paid per share, any or all of those unvested shares. The
terms upon which such repurchase right shall be exercisable
(including the period and procedure for exercise and the
appropriate vesting schedule for the purchased shares) shall be
established by the Plan Administrator and set forth in the document
evidencing such repurchase right.
F. Limited Transferability of
Options . During the lifetime of the Participant, Incentive
Options shall be exercisable only by the Participant and shall not
be assignable or transferable other than by will or by the laws of
descent and distribution following the Participant’s death.
However, a Non-Statutory Option may, in connection with the
Participant’s estate plan, be assigned in whole or in part
during the Participant’s lifetime to one or more members of
the Participant’s immediate family or to a trust established
exclusively for one or more such family members. The assigned
portion may only be exercised by the person or persons who acquire
a proprietary interest in the Option pursuant to the assignment.
The terms applicable to the assigned portion shall be the same as
those in effect for the Option immediately prior to such assignment
and shall be set forth in such documents issued to the assignee as
the Plan Administrator may deem appropriate. Notwithstanding the
foregoing, the Participant may also designate one or more persons
as the beneficiary or beneficiaries of his or her outstanding
Options under this Article Two, and those Options shall, in
accordance with such designation, automatically be transferred to
such beneficiary or beneficiaries upon the Participant’s
death while holding those Options. Such beneficiary or
beneficiaries shall take the transferred Options subject to all the
terms and conditions of the applicable agreement evidencing each
such transferred Option, including (without limitation) the limited
time period during which the Option may be exercised following the
Participant’s death.
The terms specified below shall be
applicable to all Incentive Options. Except as modified by the
provisions of this Section II, all the provisions of Articles One,
Two and Six shall be applicable to Incentive Options. Options which
are specifically designated as Non-Statutory Options when issued
under the Plan shall not be subject to the terms of this
Section II.
A. Eligibility .
Incentive Options may only be granted to Employees.
B. Dollar Limitation .
The aggregate Fair Market Value of the shares of Common Stock
(determined as of the respective date or dates of grant) for which
one or more Options granted to any Employee under the Plan (or any
other Option plan of the Corporation or any Parent or Subsidiary)
may for the first time become exercisable as Incentive Options
during any one calendar year shall not exceed the sum of One
Hundred Thousand Dollars ($100,000).
8.
To the extent the Employee holds two (2) or
more such Options which become exercisable for the first time in
the same calendar year, the foregoing limitation on the
exercisability of such Options as Incentive Options shall be
applied on the basis of the order in which such Options are
granted.
C. 10% Stockholder .
If any Employee to whom an Incentive Option is granted is a 10%
Stockholder, then the exercise price per share shall not be less
than one hundred ten percent (110%) of the Fair Market Value
per share of Common Stock on the Option grant date, and the Option
term shall not exceed five (5) years measured from the Option
grant date.
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III.
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STOCK
APPRECIATION RIGHTS
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Each SAR shall be evidenced by an
Award Agreement in the form approved by the Plan Administrator;
provided , however, that the Award Agreement shall comply
with the terms specified below.
A. Types of SARs
Authorized . A SAR may be a Freestanding SAR granted
independently of any Option, a Tandem SAR granted in tandem with
all or any portion of a related Option, or a Limited SAR granted to
a Section 16 Insider with respect to an outstanding Option. A
Tandem SAR or a Limited SAR may be granted either concurrently with
the grant of the related Option or at any time thereafter prior to
the complete exercise, termination, expiration or cancellation of
such related Option.
B. Terms and Conditions of
Freestanding SARs .
1. Exercise Price. The
exercise price per share subject to a Freestanding SAR shall be
fixed by the Plan Administrator but shall not be less than one
hundred percent (100%) of the Fair Market Value per share of
Common Stock on the grant date.
2. Exercisability and Term of
Freestanding SARs. Each Freestanding SAR shall be exercisable
at such time or times, during such period and for such number of
shares as shall be determined by the Plan Administrator and set
forth in the Award Agreement evidencing such Award. However, no
Freestanding SAR shall have a term in excess of ten (10) years
measured from the grant date.
3. Exercise of Freestanding SARs
and Settlement in Stock. Upon the exercise (or deemed exercise
pursuant to paragraph 5 below) of a Freestanding SAR authorizing
settlement solely in shares of stock, the Participant (or the
Participant’s legal representative or other person who
acquired the right to exercise such SAR by reason of the
Participant’s death) shall be entitled to receive payment of
an amount for each share with respect to which such SAR is
exercised equal to the excess, if any, of the Fair Market Value of
a share of Common Stock on the Exercise Date of such SAR over the
exercise price. Payment of such amount shall be made in whole
shares of Common Stock as soon as practicable following the
Exercise Date. The number of shares to be issued shall be
determined on the basis of the Fair Market Value of a share of
Common Stock on the Exercise Date of the Freestanding
SAR.
9.
4. Exercise of Freestanding SARs
and Settlement in Cash. Subject to the provisions of Section I
of Article Six with respect to Code Section 409A, the Plan
Administrator may grant Freestanding SARs that provide for payment
in cash. The Exercise Date(s) applicable to any such SAR shall be
established in compliance with the provisions of Section I of
Article Six with respect to Code Section 409A either by the
Plan Administrator in granting such SAR, or, if permitted by the
Plan Administrator, by an advance election of the Participant in a
manner complying with the requirements of Code Section 409A.
Upon the exercise (or deemed exercise pursuant to paragraph 5
below) of any such Freestanding SAR, the Participant (or the
Participant’s legal representative or other person who
acquired the right to exercise such SAR by reason of the
Participant’s death) shall be entitled to receive payment of
an amount for each share with respect to which such SAR is
exercised equal to the excess, if any, of the Fair Market Value of
a share of Common Stock on the Exercise Date of such SAR over the
exercise price. Payment of such amount shall be made in cash as
soon as practicable following the Exercise Date.
5. Deemed Exercise of
Freestanding SARs. If, on the date on which a Freestanding SAR
would otherwise terminate or expire, such SAR by its terms remains
exercisable immediately prior to such termination or expiration
and, if so exercised, would result in a payment to the holder of
such SAR, then any portion of such SAR which has not previously
been exercised shall automatically be deemed to be exercised as of
such date with respect to such portion.
6. Effect of Termination of
Service. Subject to earlier termination of a Freestanding SAR
as otherwise provided herein and unless otherwise provided by the
Plan Administrator in the Award Agreement evidencing such SAR, a
Freestanding SAR shall be exercisable after a Participant’s
termination of Service only during the applicable time period
determined in accordance with Section I.C of this Article Two
(treating the SAR as if it were an Option) and thereafter shall
terminate.
C. Terms and Conditions of
Tandem SARs .
1. One or more Participants may be
granted the right, exercisable upon such terms as the Plan
Administrator may establish, to elect between the exercise of the
underlying Option for shares of Common Stock and the surrender of
that Option in exchange for a distribution from the Corporation in
an amount equal to the excess of (a) the Fair Market Value (on
the Option surrender date) of the number of shares in which the
Participant is at the time vested under the surrendered Option (or
surrendered portion thereof) over (b) the aggregate exercise
price payable for such shares.
2. No such Option surrender shall be
effective unless it is approved by the Plan Administrator, either
at the time of the actual Option surrender or at any earlier time.
If the surrender is so approved, then the distribution to which the
Participant shall be entitled shall be made solely in whole shares
of Common Stock valued at Fair Market Value on the Option surrender
date.
3. If the surrender of an Option is
not approved by the Plan Administrator, then the Participant shall
retain whatever rights the Participant had under the surrendered
Option (or surrendered portion thereof) on the Option surrender
date and may exercise such rights at any time prior to the
later of (a) five (5) business days after the
receipt of
10.
the rejection notice or (b) the
last day on which the Option is otherwise exercisable in accordance
with the terms of the Award Agreement evidencing such Option, but
in no event may such rights be exercised more than ten
(10) years after the Option grant date.
D. Terms and Conditions of
Limited SARs .
1. Subject to the provisions of
Section I of Article Six with respect to Code Section 409A,
one or more Section 16 Insiders may be granted Limited SARs
with respect to their outstanding Options.
2. Upon the occurrence of a Hostile
Take-Over, each individual holding one or more Options with such a
Limited SAR shall have the unconditional right (exercisable for a
thirty (30)-day period following such Hostile Take-Over) to
surrender each such Option to the Corporation. In return for the
surrendered Option, the Participant shall receive a cash
distribution from the Corporation in an amount equal to the excess
of (A) the Take-Over Price of the shares of Common Stock at
the time subject to such Option (whether or not the Participant is
otherwise vested in those shares) over (B) the aggregate
exercise price payable for those shares. Such cash distribution
shall be paid within five (5) days following the Option
surrender date.
3. At the time such Limited SAR is
granted, the Plan Administrator shall pre-approve any subsequent
exercise of that right in accordance with the terms of this
Paragraph D. Accordingly, no further approval of the Plan
Administrator or the Board shall be required at the time of the
actual Option surrender and cash distribution.
E. Stockholder Rights
. The holder of an SAR shall have no stockholder rights with
respect to the shares subject to the SAR until such person shall
have exercised the SAR and become a holder of record of the shares
issued in payment of such SAR.
F. Limited Transferability of
SARs . During the lifetime of the Participant, an SAR shall
be exercisable only by the Participant and shall not be assignable
or transferable other than by will or by the laws of descent and
distribution following the Participant’s death. However, a
Tandem SAR related to a Non-Statutory Option or a Freestanding SAR
to be settled in shares of Common Stock may, in connection with the
Participant’s estate plan, be assigned in whole or in part
during the Participant’s lifetime to one or more members of
the Participant’s immediate family or to a trust established
exclusively for one or more such family members. The assigned
portion may only be exercised by the person or persons who acquire
a proprietary interest in the Freestanding SAR or both the Tandem
SAR and related Non-Statutory Option pursuant to the assignment.
The terms applicable to the assigned portion shall be the same as
those in effect for the SAR immediately prior to such assignment
and shall be set forth in such documents issued to the assignee as
the Plan Administrator may deem appropriate. Notwithstanding the
foregoing, the Participant may also designate one or more persons
as the beneficiary or beneficiaries of his or her outstanding SARs
under this Article Two, and those SARs shall, in accordance with
such designation, automatically be transferred to such beneficiary
or beneficiaries upon the Participant’s death while holding
those SARs. Such beneficiary or beneficiaries shall take the
transferred SARs subject to all the terms and conditions of the
applicable agreement evidencing each such transferred SAR,
including (without limitation) the limited time period during which
the SAR may be exercised following the Participant’s
death.
11.
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IV.
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CORPORATE
TRANSACTION/CHANGE IN CONTROL
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A. In the event of any Corporate
Transaction, each outstanding Option and SAR shall automatically
accelerate so that each such Award shall, immediately prior to the
effective date of the Corporate Transaction, become fully
exercisable for the total number of shares of Common Stock at the
time subject to such Award and may be exercised for any or all of
those shares as fully vested shares of Common Stock. However, an
outstanding Option or SAR shall not become exercisable on
such an accelerated basis if and to the extent: (i) such Award
is, in connection with the Corporate Transaction, to be assumed by
the successor corporation (or parent thereof) or (ii) subject
to compliance with the provisions of Section I of Article Six with
respect to Code Section 409A, such Award is to be replaced
with a cash incentive program of the successor corporation which
preserves the spread existing at the time of the Corporate
Transaction on any shares for which the Award is not otherwise at
that time exercisable and provides for subsequent payout in
accordance with the same exercise/vesting schedule applicable to
those Award shares or (iii) the acceleration of such Award is
subject to other limitations imposed by the Plan Administrator at
the time of the Award grant.
B. All outstanding repurchase rights
shall automatically terminate, and the shares of Common Stock
subject to those terminated rights shall immediately vest in full,
in the event of any Corporate Transaction, except to the extent:
(i) those repurchase rights are to be assigned to the
successor corporation (or parent thereof) in connection with such
Corporate Transaction or (ii) such accelerated vesting is
precluded by other limitations imposed by the Plan Administrator at
the time the repurchase right is issued.
C. Immediately following the
consummation of the Corporate Transaction, all outstanding Options
and SARs (other than a Limited SAR to the extent provided by
Section III.F of this Article Two) shall terminate and cease to be
outstanding, except to the extent assumed by the successor
corporation (or parent thereof).
D. Each Option and SAR which is
assumed in connection with a Corporate Transaction shall be
appropriately adjusted, immediately after such Corporate
Transaction, to apply to the number and class of securities which
would have been issued to the Participant had such Award been
exercised immediately prior to such Corporate Transaction. If the
holders of Common Stock receive cash consideration in connection
with the Corporate Transaction, the assumed Option or SAR may be
adjusted, at the option of the successor corporation, to apply to
the number of shares of its common stock with a fair market value
equivalent to the cash consideration paid per share of Common Stock
in such Corporate Transaction. Appropriate adjustments to reflect
such Corporate Transaction shall also be made to (i) the
exercise price per share under each outstanding Option and SAR,
provided the aggregate exercise price for such securities
shall remain the same, (ii) the maximum number and/or class of
securities available for issuance over the remaining term of the
Plan and (iii) the maximum number and/or class of securities
for which any one person may be granted Awards under the Plan per
calendar year and (iv) the maximum number and/or class of
securities by which the share reserve is to increase automatically
each calendar year. All such adjustments shall be made in
compliance with the requirements of Code Sections 409A, 422 and 424
and any related guidance issued by the U.S. Treasury Department, if
applicable.
12.
E. The Plan Administrator shall have
the discretionary authority to structure one or more outstanding
Options or SARs under the Discretionary Option/SAR Grant Program so
that those Awards shall, immediately prior to the effective date of
such Corporate Transaction, become fully exercisable for the total
number of shares of Common Stock at the time subject to those
Awards and may be exercised for any or all of those shares as fully
vested shares of Common Stock, whether or not those Awards are to
be assumed in the Corporate Transaction. In addition, the Plan
Administrator shall have the discretionary authority to structure
one or more of the Corporation’s repurchase rights under the
Discretionary Option/SAR Grant Program so that those rights shall
not be assignable in connection with such Corporate Transaction and
shall accordingly terminate upon the consummation of such Corporate
Transaction, and the shares subject to those terminated rights
shall thereupon vest in full.
F. The Plan Administrator shall have
full power and authority to structure one or more outstanding
Options or SARs under the Discretionary Option/SAR Grant Program so
that those Awards shall become fully exercisable for the total
number of shares of Common Stock at the time subject to those
Awards in the event the Participant’s Service is subsequently
terminated by reason of an Involuntary Termination within a
designated period (not to exceed eighteen (18) months)
following the effective date of any Corporate Transaction in which
those Awards are assumed and do not otherwise accelerate. Any
Options or SARs so accelerated shall remain exercisable for fully
vested shares until the earlier of (i) the expiration
of the Award term or (ii) the expiration of the one
(1) year period measured from the effective date of the
Involuntary Termination. In addition, the Plan Administrator may
structure one or more of the Corporation’s repurchase rights
so that those rights shall immediately terminate with respect to
any shares held by the Participant at the time of his or her
Involuntary Termination, and the shares subject to those terminated
repurchase rights shall accordingly vest in full at that
time.
G. The Plan Administrator shall have
the discretionary authority to structure one or more outstanding
Options or SARs under the Discretionary Option/SAR Grant Program so
that those Awards shall, immediately prior to the effective date of
a Change in Control, become fully exercisable for the total number
of shares of Common Stock at the time subject to those Awards and
may be exercised for any or all of those shares as fully vested
shares of Common Stock. In addition, the Plan Administrator shall
have the discretionary authority to structure one or more of the
Corporation’s repurchase rights under the Discretionary
Option/SAR Grant Program so that those rights shall terminate
automatically upon the consummation of such Change in Control, and
the shares subject to those terminated rights shall thereupon vest
in full. Alternatively, the Plan Administrator may condition the
automatic acceleration of one or more outstanding Options or SARs
under the Discretionary Option/SAR Grant Program and the
termination of one or more of the Corporation’s outstanding
repurchase rights under such program upon the subsequent
termination of the Participant’s Service by reason of an
Involuntary Termination within a designated period (not to exceed
eighteen (18) months) following the effective date of such
Change in Control. Each Option or SAR so accelerated shall remain
exercisable for fully vested shares until the earlier of
(i) the expiration of the Award term or (ii) the
expiration of the one (1) year period measured from the
effective date of Participant’s cessation of
Service.
13.
H. The portion of any Incentive
Option accelerated in connection with a Corporate Transaction or
Change in Control shall remain exercisable as an Incentive Option
only to the extent the applicable One Hundred Thousand Dollar
($100,000) limitation is not exceeded. To the extent such dollar
limitation is exceeded, the accelerated portion of such Option
shall be exercisable as a Nonstatutory Option under the Federal tax
laws.
I. The outstanding Options and SARs
shall in no way affect the right of the Corporation to adjust,
reclassify, reorganize or otherwise change its capital or business
structure or to merge, consolidate, dissolve, liquidate or sell or
transfer all or any part of its business or assets.
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V.
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PROHIBITION
OF OPTION OR SAR REPRICING WITHOUT STOCKHOLDER
APPROVAL
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Without the affirmative vote of
holders of a majority of the shares of Common Stock cast in person
or by proxy at a meeting of the stockholders of the Corporation at
which a quorum representing a majority of all outstanding shares of
Common Stock is present or represented by proxy, the Plan
Administrator shall not approve a program providing for either
(a) the cancellation of outstanding Options or SARs and the
grant in substitution therefore of new Options or SARs having a
lower exercise price or (b) the amendment of outstanding
Options or SARs to reduce the exercise price thereof. This
paragraph shall not be construed to apply to “issuing or
assuming a stock option in a transaction to which section 424(a)
applies,” within the meaning of Code
Section 424.
14.
ARTICLE THREE
RESTRICTED STOCK/RESTRICTED
STOCK UNIT PROGRAM
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I.
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RESTRICTED
STOCK AWARDS
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Shares of Common Stock may be issued
under the Restricted Stock/Restricted Stock Unit Program through
direct and immediate issuances without any intervening Option or
SAR Award. Restricted Stock Awards shall be evidenced by Award
Agreements specifying whether the Award is a Restricted Stock Bonus
or a Restricted Stock Purchase Right and the number of shares of
Common Stock subject to the Award, in such form as the Plan
Administrator shall from time to time establish. Award Agreements
evidencing Restricted Stock Awards may incorporate all or any of
the terms of the Plan by reference and shall comply with and be
subject to the following terms and conditions:
A. Types of Restricted Stock
Awards Authorized . Restricted Stock Awards may be in the
form of either a Restricted Stock Bonus or a Restricted Stock
Purchase Right. Restricted Stock Awards may be granted upon such
conditions as the Plan Administrator shall determine, including,
without limitation, upon the attainment of one or more Performance
Goals described in Section I.D of Article Four. If either the grant
or vesting of a Restricted Stock Award is to be contingent upon the
attainment of one or more Performance Goals and is to result in the
payment of Performance-Based Compensation, the Plan Administrator
shall follow procedures substantially equivalent to those set forth
in Sections I.C through I.E.1 of Article Four.
B. Purchase Price .
The purchase price for shares of Common Stock issuable under each
Restricted Stock Purchase Right shall be established by the Plan
Administrator in its discretion. No monetary payment (other than
applicable tax withholding) shall be required as a condition of
receiving shares of Common Stock pursuant to a Restricted Stock
Bonus, the consideration for which shall be services actually
rendered to the Corporation (or any Parent or Subsidiary) or for
its benefit. Notwithstanding the foregoing, if required by
applicable state corporations law, the Participant shall furnish
consideration in the form of cash or past services rendered to the
Corporation (or any Parent or Subsidiary) or for its benefit having
a value not less than the par value of the shares of Common Stock
subject to such Restricted Stock Award.
C. Purchase Period . A
Restricted Stock Purchase Right shall be exercisable within a
period established by the Plan Administrator, which shall in no
event exceed thirty (30) days from the effective date of the
grant of the Restricted Stock Purchase Right.
D. Payment of Purchase
Price . Payment of the purchase price for the number of
shares of Common Stock being purchased pursuant to any Restricted
Stock Purchase Right shall be made (a) in cash or cash
equivalent or by check made payable to the Corporation or
(b) by past services rendered to the Corporation (or any
Parent or Subsidiary) or for its benefit.
15.
E. Vesting Provisions
.
1. Shares of Common Stock issued
pursuant to a Restricted Stock Award may, in the discretion of the
Plan Administrator, be fully and immediately vested upon issuance
or may vest in one or more installments over the
Participant’s period of Service or upon attainment of
specified performance objectives, including, without limitation,
Performance Goals described in Section I.D of Article Four. The
elements of the vesting schedule applicable to any unvested shares
of Common Stock issued pursuant to a Restricted Stock Award shall
be determined by the Plan Administrator and incorporated into the
Award Agreement.
2. Any new, substituted or
additional securities or other property (including money paid other
than as a regular cash dividend) which the Participant may have the
right to receive with respect to the Participant’s unvested
shares of Common Stock by reason of any stock dividend, stock
split, recapitalization, combination of shares, exchange of shares
or other change affecting the outstanding Common Stock as a class
without the Corporation’s receipt of consideration shall be
issued subject to (i) the same vesting requirements applicable
to the Participant’s unvested shares of Common Stock and
(ii) such escrow arrangements as the Plan Administrator shall
deem appropriate.
3. The Participant shall have full
stockholder rights with respect to any shares of Common Stock
issued to the Participant pursuant to a Restricted Stock Award,
whether or not the Participant’s interest in those shares is
vested. Accordingly, the Participant shall have the right to vote
such shares and to receive any regular cash dividends paid on such
shares.
4. Should the Participant cease to
remain in Service while holding one or more unvested shares of
Common Stock issued pursuant to a Restricted Stock Award or should
the performance objectives or Performance Goals not be attained
with respect to one or more such unvested shares of Common Stock,
then those shares shall be immediately surrendered to the
Corporation for cancellation, and the Participant shall have no
further stockholder rights with respect to those shares. To the
extent the surrendered shares were previously issued to the
Participant for consideration paid in cash or cash equivalent, the
Corporation shall repay to the Participant the cash consideration
paid for the surrendered shares.
5. The Plan Administrator may in its
discretion waive the surrender and cancellation of one or more
unvested shares of Common Stock which would otherwise occur upon
the cessation of the Participant’s Service or the
non-attainment of the performance objectives or Performance Goals
applicable to those shares. Such waiver shall result in the
immediate vesting of the Participant’s interest in the shares
of Common Stock as to which the waiver applies. Such waiver may be
effected at any time, whether before or after the
Participant’s cessation of Service or the attainment or
non-attainment of the applicable performance objectives or
Performance Goals.
16.
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II.
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RESTRICTED
STOCK UNIT AWARDS
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Subject to the provisions of Section
I of Article Six with respect to Code Section 409A, shares of
Common Stock may be issued under the Restricted Stock/Restricted
Stock Unit Program on a deferred basis through the grant of
Restricted Stock Units. Restricted Stock Unit Awards shall be
evidenced by Award Agreements specifying the number of shares of
Common Stock subject to the Award, in such form as the Plan
Administrator shall from time to time establish. Award Agreements
evidencing Restricted Stock Unit Awards may incorporate all or any
of the terms of the Plan by reference and shall comply with and be
subject to the following terms and conditions:
A. Grant of Restricted Stock
Unit Awards . Restricted Stock Unit Awards may be granted
upon such conditions as the Plan Administrator shall determine,
including, without limitation, upon the attainment of one or more
Performance Goals described in Section I.D of Article Four. If
either the grant or vesting of a Restricted Stock Unit Award is to
be contingent upon the attainment of one or more Performance Goals,
the Plan Administrator shall follow procedures substantially
equivalent to those set forth in Sections I.C through I.E.1 of
Article Four.
B. Pur
