Exhibit 99.1
Approved by the Board on
February 4, 2009
Approved by the stockholders May 27,
2009
VMWARE, INC.
2007 EQUITY AND INCENTIVE PLAN
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1.
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PURPOSE; TYPES
OF AWARDS; CONSTRUCTION.
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The purpose of the VMware, Inc. 2007
Equity and Incentive Plan is to attract, motivate and retain
employees and independent contractors of the Company and any
Subsidiary and Affiliate and non-employee directors of the Company,
any Subsidiary or any Affiliate. The Plan is also designed to
encourage stock ownership by such persons, thereby aligning their
interest 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. Pursuant to the provisions hereof, there may be granted
Options (including “incentive stock options” and
“non-qualified stock options”), and Other Stock-Based
Awards, including but not limited to Restricted Stock, Restricted
Stock Units, Stock Appreciation Rights (payable in shares) and
Other Cash-Based Awards.
The 2007 Equity and Incentive Plan
shall become effective as of the date of the adoption by the
Board.
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2.
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DEFINITIONS.
For purposes of the Plan, the following terms shall be defined as
set forth below:
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(a)
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“Adoption
Date” means the date that the Plan was adopted by the
Board.
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(b)
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“Affiliate” means an affiliate of
the Company, as defined in Rule 12b-2 promulgated under
Section 12 of the Exchange Act.
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(c)
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“Award” means individually or
collectively, a grant under the Plan of Options, Restricted Stock,
Restricted Stock Units or Other Stock-Based Awards or Other
Cash-Based Awards.
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(d)
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“Award
Terms” means any written agreement, contract, notice or other
instrument or document evidencing an Award.
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(e)
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“Board” means the Board of Directors
of the Company.
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(f)
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“Cause” shall have the meaning set
forth in the Grantee’s employment or other agreement with the
Company, any Subsidiary or any Affiliate, if any, provided that if
the Grantee is not a party to any such employment or other
agreement or such employment or other agreement does not contain a
definition of Cause, then Cause shall have the meaning set forth in
the Award Terms.
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(g)
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“Code” means the Internal Revenue
Code of 1986, as amended from time to time.
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(h)
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“Committee” means the Compensation
Committee of the Board. Unless other determined by the Board, the
Committee shall be comprised solely of directors who are
(a) “non-employee directors” under Rule 16b-3 of
the Exchange Act, (b) “outside directors” under
Section 162(m) of the Code and (c) who otherwise meet the
definition of “independent directors” pursuant to the
applicable requirements of any national stock exchange upon which
the Stock is listed. Any director appointed to the Committee who
does not meet the foregoing requirements shall recuse himself or
herself form all determinations pertaining to Rule 16b-3 of the
Exchange Act and Section 162(m) of the Code.
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(i)
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“Company” means VMware, Inc., a
corporation organized under the laws of the State of Delaware, or
any successor corporation.
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(j)
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“Covered
Employee” shall have the meaning set forth in
Section 162(m)(3) of the Code.
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(k)
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“Exchange
Act” means the Securities Exchange Act of 1934, as amended
from time to time, and as now or hereafter construed, interpreted
and applied by regulations, rulings and cases.
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(l)
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“Exchange
Offer” means the offer by the Company to exchange awards
issued under the Plan for awards of or with respect to the common
stock of Parent held by certain employees of the Company and its
Subsidiaries, as set forth in more detail in the Offer to Exchange
expected to be filed by the Company and Parent.
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(m)
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“Fair
Market Value” shall be the closing sales price per share of
Stock for the date of grant on the principal securities exchange on
which the Stock is traded or, if there is no such sale on the
relevant date, then on the last previous day on which a sale was
reported; if the Stock is not listed for trading on a national
securities exchange, the fair market value of Stock shall be
determined in good faith by the Board. For purposes of the exercise
price of Options granted in the Exchange Offer, Fair Market Value
shall mean the initial public offering price of the Stock as set
forth in the Company’s Form S-1 Registration
Statement.
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(n)
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“Grantee” means a person who, as an
employee or independent contractor of or non-employee director with
respect to the Company, a Subsidiary or an Affiliate, has been
granted an Award under the Plan.
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(o)
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“ISO” means any Option designated as
and intended to be and which qualifies as an incentive stock option
within the meaning of Section 422 of the Code.
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(p)
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“NQSO” means any Option that is
designated as a nonqualified stock option or which does not qualify
as an ISO.
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(q)
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“Option” means a right, granted to a
Grantee under Section 6(b)(i), to purchase shares of Stock. An
Option may be either an ISO or an NQSO.
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(r)
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“Other
Cash-Based Award” means a cash-based Award granted to a
Grantee under Section 6(b)(iv) hereof, including cash awarded
as a bonus or upon the attainment of Performance Goals or otherwise
as permitted under the Plan.
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(s)
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“Other
Stock-Based Award” means an Award granted to a Grantee
pursuant to Section 6(b)(iv) hereof, that may be denominated
or payable in, valued in whole or in part by reference to, or
otherwise based on, or related to, Stock, each of which may be
subject to the attainment of Performance Goals or a period of
continued employment or other terms and conditions as permitted
under the Plan.
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(t)
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“Parent” means EMC Corporation, a
Massachusetts corporation.
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(u)
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“Performance Goals”
means performance goals based on one or more of the following
criteria: (i) earnings including operating income, earnings
before or after taxes, earnings before or after interest,
depreciation, amortization, or extraordinary or special items or
book value per share (which may exclude nonrecurring items);
(ii) pre-tax income or after-tax income; (iii) earnings
per common share (basic or diluted); (iv) operating profit;
(v) revenue, revenue growth or rate of revenue growth;
(vi) return on assets (gross or net), return on investment,
return on capital, or return on equity; (vii) returns on sales
or revenues; (viii) operating expenses; (ix) stock price
appreciation; (x) cash flow, free cash flow, cash flow return
on investment (discounted or otherwise), net cash provided by
operations, or cash flow in excess of cost of capital;
(xi) implementation or completion of critical projects or
processes; (xii) economic value created;
(xiii) cumulative earnings per share growth;
(xiv) operating margin or profit margin; (xv) common
stock price or total stockholder return; (xvi) cost targets,
reductions and savings, productivity and efficiencies;
(xvii) strategic business criteria, consisting of one or more
objectives based on meeting specified market penetration,
geographic business expansion, customer satisfaction, employee
satisfaction, human resources management, supervision of
litigation, information technology, and goals relating to
acquisitions, divestitures, joint
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ventures and similar
transactions, and budget comparisons; (xviii) personal
professional objectives, including any of the foregoing performance
goals, the implementation of policies and plans, the negotiation of
transactions, the development of long term business goals,
formation of joint ventures, research or development
collaborations, and the completion of other corporate transactions;
and (xix) any combination of, or a specified increase in, any
of the foregoing. Where applicable, the Performance Goals may be
expressed in terms of attaining a specified level of the particular
criteria or the attainment of a percentage increase or decrease in
the particular criteria, and may be applied to one or more of the
Company, a Subsidiary or Affiliate, or a division or strategic
business unit of the Company, or may be applied to the performance
of the Company relative to a market index, a group of other
companies or a combination thereof, all as determined by the
Committee. The Performance Goals may include a threshold level of
performance below which no payment will be made (or no vesting will
occur), levels of performance at which specified payments will be
made (or specified vesting will occur), and a maximum level of
performance above which no additional payment will be made (or at
which full vesting will occur). Each of the foregoing Performance
Goals shall be determined in accordance with generally accepted
accounting principles and shall be subject to certification by the
Committee; provided that, to the extent an Award is intended to
satisfy the performance-based compensation exception to the limits
of Section 162(m) of the Code and then to the extent
consistent with such exception, the Committee shall have the
authority to make equitable adjustments to the Performance Goals in
recognition of unusual or non-recurring events affecting the
Company or any Subsidiary or Affiliate or the financial statements
of the Company or any Subsidiary or Affiliate, in response to
changes in applicable laws or regulations, or to account for items
of gain, loss or expense determined to be extraordinary or unusual
in nature or infrequent in occurrence or related to the disposal of
a segment of a business or related to a change in accounting
principles.
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(v)
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“Plan” means this VMware, Inc. 2007
Equity and Incentive Plan, as amended from time to time.
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(w)
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“Restricted Stock” means an Award of
shares of Stock to a Grantee under Section 6(b)(ii) that is
subject to certain restrictions and to a risk of
forfeiture.
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(x)
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“Restricted Stock Unit” means a
right granted to a Grantee under Section 6(b)(iii) of the Plan
to receive shares of Stock subject to certain restrictions and to a
risk of forfeiture.
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(y)
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“Rule
16b-3” means Rule 16b-3, as from time to time in effect
promulgated by the Securities and Exchange Commission under
Section 16 of the Exchange Act, including any successor to
such Rule.
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(z)
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“Stock” means shares of Class A
common stock, par value $0.01 per share, of the Company.
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(aa)
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“Stock
Appreciation Right” means an Award that entitles a Grantee
upon exercise to the excess of the Fair Market Value of the Stock
underlying the Award over the base price established in respect of
such Stock.
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(bb)
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“Subsidiary” means any corporation
in an unbroken chain of corporations beginning with the Company if,
at the time of granting of an Award, each of the corporations
(other than the last corporation in the unbroken chain) owns stock
possessing 50% or more of the total combined voting power of all
classes of stock in one of the other corporations in the
chain.
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(a) The Plan shall be administered
by the Committee or, at the discretion of the Board, the Board. In
the event the Board is the administrator of the Plan, references
herein to the Committee shall be deemed to include the Board. The
Board may from time to time appoint a member or members of the
Committee in substitution for or in addition to the member or
members then in office and may fill vacancies on the Committee
however caused. Subject to applicable law, the Board or the
Committee may delegate to a sub-committee or individual the ability
to grant Awards to employees who are not subject to potential
liability under Section 16(b) of the Exchange Act with respect
to transactions involving equity securities of the Company at the
time any such delegated authority is exercised.
(b) The decision of the Committee as
to all questions of interpretation and application of the Plan
shall be final, binding and conclusive on all persons. The
Committee shall have the authority in its discretion, subject to
and not inconsistent with the express provisions of the Plan, to
administer the Plan and to exercise all the power and authority
either specifically granted to it under the Plan or necessary or
advisable in the administration of the Plan, including without
limitation, the authority to grant Awards, to determine the persons
to whom and the time or times at which Awards shall be granted, to
determine the type and number of Awards to be granted, the number
of shares of Stock to which an Award may relate and the terms,
conditions, restrictions and Performance Goals relating to any
Award; to determine Performance Goals no later than such time as is
required to ensure that an underlying Award which is intended to
comply with the requirements of Section 162(m) of the Code so
complies; to determine whether, to what extent, and under what
circumstances an Award may be settled, cancelled, forfeited,
accelerated (including upon a “change in control”),
exchanged, or surrendered; to make adjustments in the terms and
conditions (including Performance Goals)
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applicable to Awards; to construe and interpret
the Plan and any Award; to prescribe, amend and rescind rules and
regulations relating to the Plan; to determine the terms and
provisions of the Award Terms (which need not be identical for each
Grantee); and to make all other determinations deemed necessary or
advisable for the administration of the Plan. The Committee may
correct any defect or supply any omission or reconcile any
inconsistency in the Plan or in any Award Terms granted hereunder
in the manner and to the extent it shall deem expedient to carry
the Plan into effect and shall be the sole and final judge of such
expediency. No Committee member shall be liable for any action or
determination made with respect to the Plan or any
Award.
(a) Awards may be granted to
officers, employees, independent contractors and non-employee
directors of the Company or of any of the Subsidiaries and
Affiliates; provided , that (i) ISOs may be granted
only to employees (including officers and directors who are also
employees) of the Company or any of its “related
corporations” (as defined in the applicable regulations
promulgated under the Code) and (ii) Awards may be granted
only to eligible employees who are not employed by the Company or a
Subsidiary if such employees perform substantial services for the
Company or a Subsidiary.
(b) No ISO shall be granted to any
employee of the Company or any of its Subsidiaries if such employee
owns, immediately prior to the grant of the ISO, stock representing
more than 10% of the voting power or more than 10% of the value of
all classes of stock of the Company or Parent or a Subsidiary,
unless the purchase price for the stock under such ISO shall be at
least 110% of its Fair Market Value at the time such ISO is granted
and the ISO, by its terms, shall not be exercisable more than five
years from the date it is granted. In determining the stock
ownership under this paragraph, the provisions of
Section 424(d) of the Code shall be controlling.
(c) No Award, except for Restricted
Stock, shall be granted to any employee or independent contractor
who is subject to Section 409A of the Code if such person is
an employee or independent contractor of an Affiliate that is not a
Subsidiary, unless such Award conforms to the requirements of
Section 409A.
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5.
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STOCK SUBJECT
TO THE PLAN.
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(a) The maximum number of shares of
Stock reserved for the grant or settlement of Awards under the Plan
(the “Share Limit”) shall be 100,000,000 (including the
number of shares of Stock expected to be issued under the Exchange
Offer) and shall be subject to adjustment as provided herein. The
aggregate number of shares of Stock made subject to Awards granted
during any fiscal year to any single individual shall not exceed
3,000,000. Such shares may, in whole or in part, be authorized but
unissued shares or shares that shall have been or may be reacquired
by the Company in the open market, in private transactions or
otherwise. If any shares subject to an Award are forfeited,
cancelled, exchanged or surrendered or if an Award otherwise
terminates or expires without a distribution of shares to the
Grantee, the shares of stock with respect to such Award shall, to
the extent of any such forfeiture, cancellation, exchange,
surrender, termination or expiration, again be available for Awards
under the Plan.
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