Exhibit
10.1
POLYCOM, INC.
2004 EQUITY INCENTIVE
PLAN
(May 27, 2009 Restatement)
SECTION 1
BACKGROUND AND PURPOSE
1.1 Background and Effective
Date . The Plan permits the grant of Nonqualified Stock
Options, Incentive Stock Options, SARs, Restricted Stock,
Performance Units, and Performance Shares. The Plan was effective
as of June 2, 2004 upon approval by an affirmative vote of the
holders of a majority of the Shares that are present in person or
by proxy and entitled to vote at the 2004 Annual Meeting of
Stockholders of the Company. This amended and restated Plan is
effective as of May 27, 2009, subject to approval by an
affirmative vote of the holders of a majority of the Shares that
are present in person or by proxy and entitled to vote at the 2009
Annual Meeting of Stockholders of the Company.
1.2 Purpose of the Plan
. The Plan is intended to attract, motivate, and retain
(a) employees of the Company and its Subsidiaries,
(b) consultants who provide significant services to the
Company and its Subsidiaries, and (c) directors of the Company
who are employees of neither the Company nor any Subsidiary. The
Plan also is designed to encourage stock ownership by Participants,
thereby aligning their interests with those of the Company’s
shareholders and to permit the payment of compensation that
qualifies as performance-based compensation under
Section 162(m) of the Code.
SECTION 2
DEFINITIONS
The following words and phrases
shall have the following meanings unless a different meaning is
plainly required by the context:
2.1 “1934 Act”
means the Securities Exchange Act of 1934, as amended. Reference to
a specific section of the 1934 Act or regulation thereunder shall
include such section or regulation, any valid regulation
promulgated under such section, and any comparable provision of any
future legislation or regulation amending, supplementing or
superseding such section or regulation.
2.2 “Award”
means, individually or collectively, a grant under the Plan of
Incentive Stock Options, Nonqualified Stock Options, SARs,
Restricted Stock, Restricted Stock Units, Performance Units, or
Performance Shares.
2.3 “Award
Agreement” means the written agreement setting forth the
terms and conditions applicable to each Award granted under the
Plan.
2.4 “Board” or
“Board of Directors” means the Board of
Directors of the Company.
2.5 “Code” means
the Internal Revenue Code of 1986, as amended. Reference to a
specific section of the Code or regulation thereunder shall include
such section or regulation, any valid regulation promulgated under
such section, and any comparable provision of any future
legislation or regulation amending, supplementing or superseding
such section or regulation.
2.6 “Committee”
means the committee appointed by the Board (pursuant to
Section 3.1) to administer the Plan.
2.7 “Company”
means Polycom, Inc., a Delaware corporation, or any successor
thereto.
2.8 “Consultant”
means any consultant, independent contractor, or other person who
provides significant services to the Company or its Subsidiaries,
but who is neither an Employee nor a Director.
2.9 “Director”
means any individual who is a member of the Board of Directors of
the Company.
2.10 “Disability”
means a permanent disability in accordance with a policy or
policies established by the Committee (in its discretion) from time
to time.
2.11 “Earnings Per
Share” means as to any Performance Period, the
Company’s Profit After Tax, divided by a weighted average
number of common shares outstanding and dilutive common equivalent
shares deemed outstanding, determined in accordance with generally
accepted accounting principles.
2.12 “Employee”
means any employee of the Company or of a Subsidiary, whether such
employee is so employed at the time the Plan is adopted or becomes
so employed subsequent to the adoption of the Plan.
2.13 “Exchange
Program” means a program established by the Committee
under which outstanding Awards are amended to provide for a lower
Exercise Price or surrendered or cancelled in exchange for
(a) Awards with a lower Exercise Price, (b) a different
type of Award, (c) cash, or (d) a combination of (a),
(b) and/or (c). Notwithstanding the preceding, the term
Exchange Program does not include any (i) action described in
Section 4.3, nor (ii) transfer or other disposition
permitted under Section 12.7.
2.14 “Exercise
Price” means the price at which a Share may be purchased
by a Participant pursuant to the exercise of an Option.
2.15 “Fair Market
Value” means the closing per share selling price for
Shares on Nasdaq on the relevant date, or if there were no sales on
such date, average of the closing sales prices on the immediately
following and preceding trading dates, in either case as reported
by The Wall Street Journal or such other source selected in the
discretion of the Committee (or its delegate). Notwithstanding the
preceding, for federal, state, and local income tax reporting
purposes, fair market value shall be determined by the Committee
(or its delegate) in accordance with uniform and nondiscriminatory
standards adopted by it from time to time.
2.16 “Fiscal
Year” means the fiscal year of the Company.
2.17 “Grant Date”
means, with respect to an Award, the date that the Award was
granted. The Grant Date of an Award shall not be earlier than the
date the Award is approved by the Committee.
2.18 “Incentive Stock
Option” means an Option to purchase Shares that is
designated as an Incentive Stock Option and is intended to meet the
requirements of Section 422 of the Code.
2.19 “Nonemployee
Director” means a Director who is an employee of neither
the Company nor of any Subsidiary.
2.20 “Nonqualified Stock
Option” means an option to purchase Shares that is not
intended to be an Incentive Stock Option.
2.21 “Option”
means an Incentive Stock Option or a Nonqualified Stock
Option.
2.22
“Participant” means an Employee, Consultant, or
Nonemployee Director who has an outstanding Award.
2.23 “Performance
Goals” means the goal(s) (or combined goal(s)) determined
by the Committee (in its discretion) to be applicable to a
Participant with respect to an Award. As determined by the
Committee, the Performance Goals applicable to an Award may provide
for a targeted level or levels of achievement using one or more of
the following measures: (a) Earnings Per Share,
(b) Profit After Tax, (c) Return on Equity,
(d) Revenue, and (e) Total Shareholder Return. The
Performance Goals may differ from Participant to Participant and
from Award to Award. Any criteria used may be measured, as
applicable, (i) in absolute terms, (ii) in relative terms
(including, but not limited to, passage of time and/or against
another company or companies), (iii) on a per-share basis,
(iv) against the performance of the Company as a whole or a
business unit of the Company and/or (v) on a pre-tax or
after-tax basis. Prior to the Determination Date, the Committee
shall determine whether any element(s) or item(s) shall be included
in or excluded from the calculation of any Performance Goal with
respect to any Participants.
2.24 “Performance
Period” means any Fiscal Year or such longer period as
determined by the Committee in its sole discretion.
2.25 “Performance
Share” means an Award granted to a Participant pursuant
to Section 9.
2.26 “Performance
Unit” means an Award granted to a Participant pursuant to
Section 8.
2.27 “Period of
Restriction” means the period during which the transfer
of Shares of Restricted Stock are subject to restrictions and
therefore, the Shares are subject to a substantial risk of
forfeiture. As provided in Section 7, such restrictions may be
based on the passage of time, the achievement of target levels of
performance, or the occurrence of other events as determined by the
Committee, in its discretion.
2.28 “Plan” means
the Polycom, Inc. 2004 Equity Incentive Plan, as set forth in this
instrument and as hereafter amended from time to time.
2.29 “Profit After
Tax” means as to any Performance Period, the
Company’s income after taxes, determined in accordance with
generally accepted accounting principles.
2.30 “Restricted
Stock” means an Award granted to a Participant pursuant
to Section 7.
2.31 “Restricted Stock
Unit or RSU” means an Award granted to a
Participant pursuant to Section 10.
2.32 “Retirement”
means, in the case of an Employee or a Nonemployee Director a
Termination of Service occurring in accordance with a policy or
policies established by the Committee (in its discretion) from time
to time. With respect to a Consultant, no Termination of Service
shall be deemed to be on account of
“Retirement.”
2.33 “Return on
Equity” means as to any Performance Period, the
percentage equal to the Company’s Profit After Tax divided by
average stockholder’s equity, determined in accordance with
generally accepted accounting principles.
2.34 “Revenue”
means as to any Performance Period, the Company’s net
revenues generated from third parties, determined in accordance
with generally accepted accounting principles.
2.35 “ Rule
16b-3” means Rule 16b-3 promulgated under the 1934 Act,
and any future regulation amending, supplementing or superseding
such regulation.
2.36 “Section 16
Person” means a person who, with respect to the Shares,
is subject to Section 16 of the 1934 Act.
2.37 “Shares”
means the shares of common stock of the Company.
2.38 “Stock Appreciation
Right” or “SAR” means an Award,
granted alone or in connection with a related Option, that pursuant
to Section 6 is designated as an SAR.
2.39 “Subsidiary”
means any corporation in an unbroken chain of corporations
beginning with the Company as the corporation at the top of the
chain, but only if each of the corporations below the Company
(other than the last corporation in the unbroken chain) then owns
stock possessing fifty percent (50%) or more of the total
combined voting power of all classes of stock in one of the other
corporations in such chain.
2.40 “Termination of
Service” means (a) in the case of an Employee, a
cessation of the employee-employer relationship between the
Employee and the Company or a Subsidiary for any reason, including,
but not by way of limitation, a termination by resignation,
discharge, death, Disability, Retirement, or the disaffiliation of
a Subsidiary, but excluding any such termination where there is a
simultaneous reemployment by the Company or a Subsidiary;
(b) in the case of a Consultant, a cessation of the service
relationship between the Consultant and the Company or a Subsidiary
for any reason, including, but not by way of limitation, a
termination by resignation, discharge, death, Disability, or the
disaffiliation of a Subsidiary, but excluding any such termination
where there is a simultaneous re-engagement of the consultant by
the Company or a Subsidiary; and (c) in the case of a
Nonemployee Director, a cessation of the Director’s service
on the Board for any reason, including, but not by way of
limitation, a termination by resignation, death, Disability,
Retirement or non-reelection to the Board.
2.41 “Total Shareholder
Return” means as to any Performance Period, the total
return (change in share price plus reinvestment of any dividends)
of a Share.
SECTION 3
ADMINISTRATION
3.1 The Committee . The
Plan shall be administered by the Committee. The Committee shall
consist of not less than two (2) Directors who shall be
appointed from time to time by, and shall serve at the pleasure of,
the Board of Directors. The Committee shall be comprised solely of
Directors who are (a) “outside directors” under
Section 162(m), and (b) “non-employee
directors” under Rule 16b-3.
3.2 Authority of the
Committee. It shall be the duty of the Committee to
administer the Plan in accordance with the Plan’s provisions.
The Committee shall have all powers and discretion necessary or
appropriate to administer the Plan and to control its operation,
including, but not limited to, the power to (a) determine
which Employees, Consultants and directors shall be granted Awards,
(b) prescribe the terms and conditions of the Awards,
(c) interpret the Plan and the Awards, (d) adopt such
procedures and subplans as are necessary or appropriate to permit
participation in the Plan by Employees, Consultants and Directors
who are foreign nationals or employed outside of the United States,
(e) adopt rules for the administration, interpretation and
application of the Plan as are consistent therewith, and
(f) interpret, amend or revoke any such rules. Notwithstanding
the preceding, the Committee shall not implement an Exchange
Program without the approval of the holders of a majority of the
Shares that are present in person or by proxy and entitled to vote
at any Annual or Special Meeting of Stockholders of the Company.
Notwithstanding any contrary provision of the Plan, if the
Company’s stockholders approve the option exchange program
described in the proxy statement with respect to the
Company’s 2009 Annual Meeting of Stockholders under which
outstanding Options may be surrendered or cancelled (and therefore
made available for future grant under Section 4.2) in exchange
for a lesser number of Awards (the “Exchange”), the
Committee may, in its sole discretion, commence the Exchange within
twelve (12) months after the date of such Annual
Meeting.
3.3 Delegation by the
Committee . The Committee, in its sole discretion and on
such terms and conditions as it may provide, may delegate all or
any part of its authority and powers under the Plan to one or more
Directors or officers of the Company, except that the Committee may
not delegate all or any part of its authority under the Plan with
respect to Awards granted to a Nonemployee Director.
Notwithstanding the foregoing, with respect to
Awards that are intended to qualify as
performance-based compensation under Section 162(m) of the
Code, the Committee may not delegate its authority and powers with
respect to such Awards if such delegation would cause the Awards to
fail to so qualify.
3.4 Decisions Binding
. All determinations and decisions made by the Committee, the
Board, and any delegate of the Committee pursuant to the provisions
of the Plan shall be final, conclusive, and binding on all persons,
and shall be given the maximum deference permitted by
law.
SECTION 4
SHARES SUBJECT TO THE PLAN
4.1 Number of Shares
. Subject to adjustment as provided in Section 4.3, the
total number of Shares available issuance under the Plan shall
equal the sum of (a) 16,100,000, (b) the number of Shares
(not to exceed 2,700,000) that remain available for grant under the
Company’s 1996 Stock Incentive Plan as of June 2, 2004,
and (c) any Shares (not to exceed 11,991,366) that otherwise
would have been returned to the 1996 Stock Incentive Plan after
June 1, 2004 on account of the expiration, cancellation or
forfeiture of awards granted under the 1996 Stock Incentive Plan.
Shares granted under the Plan may be either authorized but unissued
Shares or treasury Shares.
4.2 Lapsed Awards . If
an Award is settled in cash, or is cancelled, terminates, expires,
or lapses for any reason, any Shares subject to such Award again
shall be available to be the subject of an Award, except as
determined by the Committee.
4.3 Adjustments in Awards and
Authorized Shares . In the event that any dividend or
other distribution (whether in the form of cash, Shares, other
securities, or other property), recapitalization, stock split,
reverse stock split, reorganization, merger, consolidation,
split-up, spin-off, combination, repurchase, or exchange of Shares
or other securities of the Company, or other change in the
corporate structure of the Company affecting the Shares such that
an adjustment is determined by the Committee (in its sole
discretion) to be appropriate in order to prevent dilution or
enlargement of the benefits or potential benefits intended to be
made available under the Plan, then the Committee shall, in such
manner as it may deem equitable, adjust the number and class of
Shares which may be delivered under the Plan, the number and class
of Shares which may be added annually to the Shares reserved under
the Plan, the number, class, and price of Shares subject to
outstanding Awards, and the numerical limits of Sections 5.1,
6.1, 7.1, 8.1, 9.1, 10.1 and 11.2. Notwithstanding the preceding,
the number of Shares subject to any Award always shall be a whole
number.
4.4 Full Value Awards
. Beginning on May 27, 2009, grants of Restricted Stock,
Restricted Stock Units, Performance Shares and Performance Units
under the Plan shall count against the numerical limits in
Section 4.1 of the Plan as 1.5 Shares for every one Share
subject thereto, excluding any Awards granted pursuant to the
Exchange. Awards granted pursuant to the Exchange shall count
against the numerical limits in Section 4.1 of the Plan as one
Share for every one Share subject thereto. Also, beginning on May
27, 2009, if Shares acquired pursuant to Restricted Stock,
Restricted Stock Units, Performance Shares and Performance Units
are forfeited to the Company and otherwise would return to the Plan
pursuant to Section 4.2 of the Plan, 1.5 times the number of
Shares so forfeited shall become available for issuance.
SECTION 5
STOCK OPTIONS
5.1 Grant of Options
. Subject to the terms and provisions of the Plan, Options may
be granted to Employees, Directors and Consultants at any time and
from time to time as determined by the Committee in its sole
discretion. The Committee, in its sole discretion, shall determine
the number of Shares subject to each Option, provided that during
any Fiscal Year, no Participant shall be granted Options (and/or
SARs) covering
more than a total of 750,000 Shares.
Notwithstanding the foregoing, during the Fiscal Year in which a
Participant first becomes an Employee, he or she may be granted
Options (and/or SARs) to purchase up to a total of an additional
750,000 Shares. The Committee may grant Incentive Stock Options,
Nonqualified Stock Options, or a combination thereof.
5.2 Award Agreement
. Each Option shall be evidenced by an Award Agreement that
shall specify the Exercise Price, the expiration date of the
Option, the number of Shares covered by the Option, any conditions
to exercise the Option, and such other terms and conditions as the
Committee, in its discretion, shall determine. The Award Agreement
shall also specify whether the Option is intended to be an
Incentive Stock Option or a Nonqualified Stock Option.
5.3 Exercise Price
. Subject to the provisions of this Section 5.3, the
Exercise Price for each Option shall be determined by the Committee
in its sole discretion.
5.3.1 Nonqualified Stock
Options. The Exercise Price of each Nonqualified Stock option
shall be determined by the Committee in its discretion but shall be
not less than one hundred percent (100%) of the Fair Market
Value of a Share on the Grant Date.
5.3.2 Incentive Stock
Options. In the case of an Incentive Stock Option, the Exercise
Price shall be not less than one hundred percent (100%) of the
Fair Market Value of a Share on the Grant Date; provided, however,
that if on the Grant Date, the Employee (together with persons
whose stock ownership is attributed to the Employee pursuant to
Section 424(d) of the Code) owns stock possessing more than
10% of the total combined voting power of all classes of stock of
the Company or any of its Subsidiaries, the Exercise Price shall be
not less than one hundred and ten percent (110%) of the Fair
Market Value of a Share on the Grant Date.
5.3.3 Substitute Options.
Notwithstanding the provisions of Section 5.3.2, in the event
that the Company or a Subsidiary consummates a transaction
described in Section 424(a) of the Code (e.g., the acquisition
of property or stock from an unrelated corporation), persons who
become Employees, Nonemployee Directors or Consultants on account
of such transaction may be granted Options in substitution for
options granted by their former employer. If such substitute
Options are granted, the Committee, in its sole discretion and
consistent with Section 424(a) of the Code, may determine that
such substitute Options shall have an exercise price less than one
hundred percent (100%) of the Fair Market Value of the Shares
on the Grant Date.
5.4 Expiration of
Options.
5.4.1 Expiration Dates. Each
Option shall terminate no later than the first to occur of the
following events:
(a) The date for termination of the
Option set forth in the written Award Agreement; or
(b) The expiration of ten
(10) years from the Grant Date.
5.4.2 Death of Participant.
Notwithstanding Section 5.4.1, if a Participant dies prior to
the expiration of his or her Options, the Committee, in its
discretion, may provide that his or her Options shall be
exercisable for up to three (3) years after the date of death.
With respect to extensions that were not included in the original
terms of the Option but were provided by the Committee after the
date of grant, if at the time of any such extension, the exercise
price per Share of the Option is less than the Fair Market Value of
a Share, the extension shall, unless otherwise determined by the
Committee, be limited to the earlier of (1) the maximum term
of the Option as set by its originals terms, or (2) ten
(10) years from the Grant Date.
5.4.3 Committee Discretion.
Subject to the ten and thirteen-year limits of Sections 5.4.1
and 5.4.2, the Committee, in its sole discretion, (a) shall
provide in each Award Agreement when each Option expires and
becomes unexercisable, and (b) may, after an Option is
granted, extend the maximum term of the Option (subject to
Section 5.8.4 regarding Incentive Stock Options). With respect
to the Committee’s authority in
Section 5.4.3(b), if, at the
time of any such extension, the exercise price per Share of the
Option is less than the Fair Market Value of a Share, the extension
shall, unless otherwise determined by the Committee, be limited to
the earlier of (1) the maximum term of the Option as set by
its originals terms, or (2) ten (10) years from the Grant
Date. Unless otherwise determined by the Committee, any extension
of the term of an Option pursuant to this Section 5.4.3 shall
comply with Section 409A of the Code to the extent
applicable.
5.5 Exercisability of
Options. Options granted under the Plan shall be
exercisable at such times and be subject to such restrictions and
conditions as the Committee shall determine in its sole discretion.
After an Option is granted, the Committee, in its sole discretion,
may accelerate the exercisability of the Option.
5.6 Payment. Options
shall be exercised by the Participant giving notice and following
such procedures as the Company (or its designee) may specify from
time to time. Exercise of an Option also requires that the
Participant make arrangements satisfactory to the Company for full
payment of the Exercise Price for the Shares. All exercise notices
shall be given in the form and manner specified by the Company from
time to time.
The Exercise Price shall be payable
to the Company in full in cash or its equivalent. The Committee, in
its sole discretion, also may permit exercise (a) by tendering
previously acquired Shares having an aggregate Fair Market Value at
the time of exercise equal to the total Exercise Price, or
(b) by any other means which the Committee, in its sole
discretion, determines to both provide legal consideration for the
Shares, and to be consistent with the purposes of the Plan. As soon
as practicable after receipt of a notification of exercise
satisfactory to the Company and full payment for the Shares
purchased, the Company shall deliver to the Participant (or the
Participant’s designated broker), Share certificates (which
may be in book entry form) representing such Shares.
5.7 Restrictions on Share
Transferability. The Committee may impose such
restrictions on any Shares acquired pursuant to the exercise of an
Option as it may deem advisable, including, but not limited to,
restrictions related to applicable federal securities laws, the
requirements of any national securities exchange or system upon
which Shares are then listed or traded, or any blue sky or state
securities laws.
5.8 Certain Additional Provisions
for Incentive Stock Options .
5.8.1 Exercisability. The
aggregate Fair Market Value (determined on the Grant Date(s)) of
the Shares with respect to which Incentive Stock Options are
exercisable for the first time by any Employee during any calendar
year (under all plans of the Company and its Subsidiaries) shall
not exceed $100,000.
5.8.2 Termination of Service.
No Incentive Stock Option may be exercised more than three
(3) months after the Participant’s Termination of
Service for any reason other than Disability or death, unless
(a) the Participant dies during such three-month period,
and/or (b) the Award Agreement or the Committee permits later
exercise (in which case the Option instead may be deemed to be a
Nonqualified Stock Option). No Incentive Stock Option may be
exercised more than one (1) year after the Participant’s
Termination of Service on account of Disability, unless
(a) the Participant dies during such one-year period, and/or
(b) the Award Agreement or the Committee permit later exercise
(in which case the option instead may be deemed to be a
Nonqualified Stock Option).
5.8.3 Employees Only.
Incentive Stock Options may be granted only to persons who are
Employees on the Grant Date.
5.8.4 Expiration. No
Incentive Stock Option may be exercised after the expiration of ten
(10) years from the Grant Date; provided, however, that if the
Option is granted to an Employee who, together with persons whose
stock ownership is attributed to the Employee pursuant to
Section 424(d) of the Code, owns stock possessing more than
10% of the total combined voting power of all classes of the stock
of the Company or any of its Subsidiaries, the Option may not be
exercised after the expiration of five (5) years from the
Grant Date.
SECTION 6
STOCK APPRECIATION RIGHTS
6.1 Grant of SARs.
Subject to the terms and conditions of the Plan, a SAR may be
granted to Employees, Directors and Consultants at any time and
from time to time as shall b
