PIXELWORKS, INC.
AMENDED AND RESTATED 2006 STOCK INCENTIVE PLAN
1. Purposes
of the Plan. The purposes
of this Stock Incentive Plan are to attract, retain and reward
individuals who can and do contribute to the Company’s
success by providing Employees and Consultants an opportunity to
share in the equity of the Company and to more closely align their
interests with the Company and its shareholders.
2.
Definitions. As used
herein, the following definitions shall apply:
2.1.
Administrator ” shall mean the Board or any of its
Committees appointed to administer the Plan, in accordance with
Section 4.1.
2.2.
“ Award ” shall mean an award of an Option, SAR
or Sale of Shares under the Plan.
2.3.
“ Award Agreement ” shall mean a written
agreement between the Company and a Grantee evidencing the terms
and conditions of an individual Award grant. The Award Agreement is
subject to the terms and conditions of the Plan.
2.4.
“ Board ” shall mean the Board of Directors of
the Company.
2.5.
“Code” shall mean the Internal Revenue Code of
1986, as amended.
2.6.
“Committee” shall mean a committee appointed by
the Board in accordance with Section 4.1 of the
Plan.
2.7.
“Common Stock” shall mean the common stock of
the Company.
2.8.
“Company” shall mean Pixelworks, Inc., an Oregon
corporation.
2.9.
“Consultant” shall mean any non-Employee who is
engaged by the Company or any Parent or Subsidiary to render
consulting services and is compensated for such consulting services
and any Director of the Company whether compensated for such
services or not.
2.10.
“Continuous Status as an Employee or Consultant”
shall mean the absence of any interruption or termination of
service as an Employee or Consultant. Continuous Status as an
Employee or Consultant shall not be considered interrupted in the
case of: (i) any sick leave, military leave, or any other
leave of absence approved by the Company; provided, however, that
for purposes of Incentive Stock Options, any such leave is for a
period of not more than ninety days or reemployment upon the
expiration of such leave is guaranteed by contract or statute,
provided, further, that on the ninety-first day of such leave
(where re-employment is not guaranteed by contract or statute) the
Grantee’s Incentive Stock Option shall automatically convert
to a Nonqualified Stock Option; or (ii) transfers between
locations of the Company or between the Company, its Parent, its
Subsidiaries or its successor.
2.11.
“Director” shall mean a member of the
Board.
2.12.
“Disability” shall mean total and permanent
disability as defined in Section 22(e)(3) of the Code.
2.13.
“Employee” shall mean any person, including
Officers and Directors, employed by the Company or any Parent or
Subsidiary. Neither the payment of a director’s fee by the
Company nor service as a Director or Consultant shall be sufficient
to constitute “employment” by the Company.
2.14.
“ Exchange Act ” shall mean the Securities
Exchange Act of 1934, as amended.
2.15.
“Fair Market Value” shall mean, as of any date,
the value of a Share determined as follows:
2.15.1.
If the Common Stock is listed on any established stock exchange or
a national market system, including without limitation the Nasdaq
National Market or the Nasdaq SmallCap Market of the Nasdaq Stock
Market, Fair Market Value shall be the closing sales price for a
Share (or the closing bid, if no sales were reported) as quoted on
such exchange or system on the date of determination, as reported
in The Wall Street Journal or such other source as the
Administrator deems reliable; provided, if the date of
determination 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 date of
determination, or such other appropriate day as shall be determined
by the Administrator, in its sole discretion;
2.15.2.
If the Common Stock is regularly quoted by a recognized securities
dealer but selling prices are not reported, Fair Market Value shall
be the mean between the high bid and low asked prices for a Share
on the date of determination, as reported in The Wall Street
Journal or such other source as the Administrator deems
reliable; provided, if the date of determination does not fall on a
day on which the Common Stock has been so quoted, the date on which
the Fair Market Value shall be established shall be
the last day on
which the Common Stock was so quoted prior to the date of
determination, or such other appropriate day as shall be determined
by the Administrator, in its sole discretion;
2.15.3.
In the absence of an established market for the Common Stock, the
Fair Market Value of a Share shall be determined in good faith by
the Administrator.
2.16.
“ Grantee ” shall mean an Employee or Consultant
who holds an Option or Stock Appreciation Right, or their permitted
successor or legal representative.
2.17.
“Incentive Stock Option” shall mean an Option
intended to qualify as an incentive stock option within the meaning
of Section 422 of the Code.
2.18.
“ Nonqualified Stock Option ” shall mean an
Option not intended to qualify as an incentive stock option within
the meaning of Section 422 of the Code.
2.19.
“ Notice of Grant ” shall mean a written notice
evidencing certain terms and conditions of an individual Award. The
Notice of Grant is part of the Award Agreement.
2.20.
“ Officer ” shall mean 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.
2.21.
“ Option ” shall mean an Incentive Stock Option
or a Nonqualified Stock Option granted pursuant to the
Plan.
2.22.
“ Optioned Stock ” shall mean the Shares subject
to an Option or Stock Appreciation Right.
2.23.
“ Parent ” shall mean a “parent
corporation,” whether now or hereafter existing, as defined
in Section 424(e) of the Code.
2.24.
“ Plan ” shall mean this Amended and Restated
2006 Stock Incentive Plan.
2.25.
“ Rule 16b-3 ” shall mean Rule 16b-3
of the Exchange Act or any successor to Rule 16b-3, as in
effect when discretion is being exercised with respect to the
Plan.
2.26.
“ Sale ” or “ Sold ” shall
include, with respect to the sale of Shares under the Plan, the
sale of Shares for any form of consideration specified in
Section 8.2, as well as a grant of Shares for consideration in
the form of past or future services. For purposes of clarity, a
“Sale“of Shares or Shares “Sold” shall
include, without limitation, awards of stock bonuses, restricted
stock, stock units, performance stock, performance units or similar
rights to acquire Shares, whether upon the passage of time, the
occurrence of one or more events, the satisfaction of performance
criteria or other conditions, or any combination
thereof.
2.27.
“ Share ” shall mean a share of the Common
Stock, as adjusted in accordance with Section 11 of the
Plan.
2.28.
“ Stock Appreciation Right ” or “
SAR” shall mean a right to receive from the Company,
with respect to each Share as to which the SAR is exercised,
payment in an amount equal to the excess of the Share’s Fair
Market Value on the exercise date over its Fair Market Value on the
date the SAR was granted. Such payment will be made solely in
Shares valued at Fair Market Value on the exercise date.
2.29.
“Subsidiary ” shall mean a “subsidiary
corporation,” whether now or hereafter existing, as defined
in Section 424(f) of the Code.
3. Stock
Subject to the Plan.
3.1. Subject to
the provisions of Section 3.2 below and the provisions of
Section 11 of the Plan, the maximum aggregate number of Shares
which may be subject to Awards under the Plan is 3,483,333 shares.
(All share limits in the Plan are presented after giving effect to
the Company’s 1-for-3 stock split in June 2008.) The
Shares may be authorized, but unissued, or reacquired Common Stock.
Shares issued in respect of any “full-value award”
granted under the Plan shall be counted against the foregoing share
limit for the Plan as 1.33 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 the Plan, 133 shares shall
be charged against the share limit in connection with that award.)
For this purpose, a “full-value award” means any Award
under the Plan that is not an Option or SAR.
3.2. If an Option
or SAR should expire, or become unexercisable for any reason, or is
otherwise terminated or forfeited, without having been exercised in
full, the Optioned Stock which was subject thereto shall, unless
the Plan shall have been terminated, become available for future
Option or SAR grants and/or Sales under the Plan. If any Shares
issued pursuant to a Sale or exercise of an Option or SAR shall be
reacquired, canceled or forfeited for any reason, such Shares shall
become available for future Option or SAR grants and/or Sales under
the Plan, unless the Plan shall have been terminated. If any
reacquired, canceled or forfeited Shares were originally issued
upon exercise of an Incentive Stock Option, then once so
reacquired, canceled or forfeited, such Shares shall not be
considered to have been issued for purposes of applying the
limitation set forth in Section 3.3 below. Notwithstanding the
foregoing, the following shares
of Stock may
not again be made available for issuance as awards under the Plan:
(i) shares of Stock not issued or delivered as a result of the
net settlement of an outstanding Option or SAR, (ii) shares of
Stock used to pay the exercise price or withholding taxes related
to an outstanding award, or (iii) shares of Stock repurchased
on the open market with the proceeds of the exercise price of an
Option.
3.3.
Notwithstanding any other provision of this Section 3, the
maximum number of Shares that may be issued upon the exercise of
Incentive Stock Options shall be 3,483,333.
4.
Administration of the Plan.
4.1.1. Multiple
Administrative Committees. If permitted by Rule 16b-3, the
Plan may be administered by different Committees with respect to
Directors, Officers who are not Directors, and Employees who are
neither Directors nor Officers.
4.1.2.
Administration With Respect to Directors and Officers Subject to
Section 16(b). With respect to Award grants to Employees
who are also Officers or Directors subject to Section 16(b) of the
Exchange Act, the Plan shall be administered by (A) the Board,
if the Board may administer the Plan in compliance with the rules
governing a plan intended to qualify as a discretionary plan under
Rule 16b-3, or (B) a Committee designated by the Board to
administer the Plan, which Committee shall be constituted to comply
with the rules, if any, governing a plan intended to qualify as a
discretionary plan under Rule 16b-3. Once appointed, such
Committee shall continue to serve in its designated capacity until
otherwise directed by the Board. From time to time the Board may
increase the size of the Committee and appoint additional members,
remove members (with or without cause) and substitute new members,
fill vacancies (however caused), and remove all members of the
Committee and thereafter directly administer the Plan, all to the
extent permitted by the rules, if any, governing a plan intended to
qualify as a discretionary plan under Rule 16b-3. With respect
to persons subject to Section 16 of the Exchange Act,
transactions under the Plan are intended to comply with all
applicable conditions of Rule 16b-3. To the extent any
provision of the Plan or action by the Administrator fails to so
comply, it shall be deemed null and void, to the extent permitted
by law and deemed advisable by the Administrator.
4.1.3.
Administration With Respect to Other Persons. With respect
to Award grants to Employees or Consultants who are neither
Directors nor Officers of the Company, the Plan shall be
administered by the Board or a Committee designated by the Board,
which Committee shall be constituted to satisfy the legal
requirements relating to the administration of stock option plans
under applicable corporate and securities laws and the Code. Once
appointed, such Committee shall serve in its designated capacity
until otherwise directed by the Board. The Board may increase the
size of the Committee and appoint additional members, remove
members (with or without cause) and substitute new members, fill
vacancies (however caused), and remove all members of the Committee
and thereafter directly administer the Plan, all to the extent
permitted by the legal requirements relating to the administration
of stock option plans under state corporate and securities laws and
the Code.
4.2. Powers of
the Administrator. Subject to the provisions of the Plan, and
in the case of a Committee, subject to the specific duties
delegated by the Board to such Committee, the Administrator shall
have the authority, in its discretion:
4.2.1. to grant
Awards or SARs;
4.2.2. to
authorize Sales of Shares hereunder;
4.2.3. to
determine, upon review of relevant information, the Fair Market
Value of a Share;
4.2.4. to
determine the exercise/purchase price per Share of Options or SARs
to be granted or Shares to be Sold, which exercise/purchase price
shall be determined in accordance with Section 8.1 of the
Plan;
4.2.5. to
determine the Employees or Consultants to whom, and the time or
times at which, Options or SARs shall be granted and the number of
Shares to be represented by each Option or SAR;
4.2.6. to
determine the Employees or Consultants to whom, and the time or
times at which, Shares shall be Sold and the number of Shares to be
Sold;
4.2.7. to
administer and interpret the Plan;
4.2.8. to
prescribe, amend and rescind rules and regulations relating to the
Plan;
4.2.9. to
determine the terms and provisions of each Option or SAR granted
(which need not be identical) and, with the consent of the holder
thereof, modify or amend each Option or SAR;
4.2.10. to
determine the terms and provisions of each Sale of Shares (which
need not be identical) and, with the consent of the purchaser
thereof, modify or amend each Sale;
4.2.11. to
accelerate (with the consent of the Grantee) the exercise date of
any Option;
4.2.12. to
accelerate (with the consent of the Grantee or purchaser of Shares)
the vesting restrictions applicable to Shares Sold or Options or
SARs granted under the Plan;
4.2.13. to
authorize any person to execute on behalf of the Company any
instrument required to effectuate the grant of an Option, SAR or
Sale of Shares previously granted or authorized by the
Administrator;
4.2.14. to
determine the transfer or vesting restrictions, repurchase rights
or other restrictions applicable to Shares issued under the
Plan;
4.2.15. to
establish, on a case-by-case basis, different terms and conditions
pertaining to exercise or vesting rights upon termination of
employment, but only at the time of an Option or SAR grant or Sale
of Shares;
4.2.16. to approve
forms for use under the Plan; and
4.2.17. to make
all other determinations deemed necessary or advisable for the
administration of the Plan.
Notwithstanding
any other provision herein, except in connection with a corporate
transaction involving the Company (including, without limitation,
any stock dividend, stock split, extraordinary cash dividend,
recapitalization, reorganization, merger, consolidation, split-up,
spin-off, combination, or exchange of shares), the terms of
outstanding awards may not be amended to reduce the exercise price
of outstanding Options or SARs or cancel outstanding Options or
SARs in exchange for cash, other awards or Options or SARs with an
exercise price that is less than the exercise price of the original
Options or SARs without stockholder approval.
4.3. Effect of
Administrator’s Decision. All decisions, determinations
and interpretations of the Administrator shall be fin
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