Exhibit 10.5
SPANSION INC. 2007 EQUITY
INCENTIVE PLAN
APPENDIX
1. Special Provisions for
Persons who are Israeli Taxpayers
1.1 This Appendix (the
“Appendix”) to the Spansion Inc. 2007 Equity Incentive
Plan (the “Plan”) is effective as of September 11,
2008 (the “Effective Date”).
1.2 The provisions specified
hereunder apply only to persons who are subject to taxation by the
State of Israel with respect to awards granted under the Plan
(“Awards”).
1.3 The purpose of this Appendix is
to establish certain rules and limitations applicable to Awards
that may be granted under the Plan from time to time, in compliance
with the securities and other applicable laws currently in force in
the State of Israel. Except as otherwise provided by this Appendix,
all Awards made pursuant to this Appendix shall be governed by the
terms of the Plan. This Appendix is applicable only to Awards made
after the Effective Date. This Appendix complies with, and is
subject to the ITO and Section 102.
1.4 The Plan and this Appendix shall
be read together. In any case of contradiction, whether explicit or
implied, between the provisions of this Appendix and the Plan, the
provisions of this Appendix shall govern.
1.5 This Appendix shall apply with
respect to the Awards described in Article 5 of the Plan, solely to
the extent that the Administrator shall determine that such Awards
are appropriate for Israeli taxpayers and consistent with the
requirements of the ITO and other applicable law, and subject to
the Administrator’s determination whether such Awards qualify
as 102 Trustee Awards.
1.6 To avoid doubt, for the purpose
of U.S. tax laws (to the extent applicable) Options granted under
this Appendix will be considered nonqualified stock options (an
option not intended to be an ISO) for the purposes of the (U.S.)
Code.
2.
Definitions
Capitalized terms not otherwise
defined herein shall have the meaning assigned to them in the Plan.
The following additional definitions will apply to Awards made
pursuant to this Appendix:
“3(i) Option” means an
option that is subject to taxation pursuant to Section 3(i) of
the ITO which has been granted to any person who is not an Eligible
102 Participant.
“102 Capital Gains
Track” means the tax alternative set forth in
Section 102(b)(2) of the ITO pursuant to which income
resulting from the sale of Shares is taxed as a capital
gain.
“102 Capital Gains Track
Award” means a 102 Trustee Award qualifying for the special
tax treatment under the 102 Capital Gains Track.
“102 Ordinary Income
Track” means the tax alternative set forth in
Section 102(b)(1) of the ITO pursuant to which income
resulting from the sale of shares is taxed as ordinary
income.
“102 Ordinary Income Track
Award” means a 102 Trustee Award qualifying for the ordinary
income tax treatment under the 102 Ordinary Income
Track.
“102 Trustee Award”
means an Award granted pursuant to Section 102(b) of the ITO
and held in trust by a Trustee for the benefit of the Participant,
and includes both 102 Capital Gains Track Awards and 102 Ordinary
Income Track Awardss.
“Affiliate” as used in
this Appendix, shall mean any affiliate that is an “employing
company” within the meaning of Section 102(a) of the
ITO.
“Award Agreement” means
an agreement, in written or electronic format, in a form determined
by the Administrator, between the Company and the recipient of an
Award evidencing terms and conditions consistent with the Plan and
the Appendix that are applicable to the Award.
“Controlling
Shareholder” as defined under Section 32(9) of the ITO,
means an individual who prior to the subject Award or as a result
of the exercise of any Option, holds or would hold, directly or
indirectly, in his name or with a relative (as defined in the ITO)
(i) 10% of the outstanding shares of the Company,
(ii) 10% of the voting power of the Company, (iii) the
right to hold or purchase 10% of the outstanding equity or voting
power, (iv) the right to obtain 10% of the
“profit” of the Company (as defined in the ITO), or
(v) the right to appoint a director of the Company.
“Election” means the
Corporation's choice of the type (as between capital gains track or
ordinary income track) of 102 Trustee Awards it will make under the
Plan, as filed with the ITA.
“Eligible 102
Participant” means an employee of an Affiliate or an
individual who is serving as a director or an office holder of an
Affiliate, who is not a Controlling Shareholder.
“Israeli Fair Market
Value” shall mean with respect to 102 Capital Gains Track
Awards only, for the sole purpose of determining tax liability
pursuant to Section 102(b)(3) of the ITO, if at the date of
grant the Company’s shares are listed on any established
stock exchange or a national market system or if the
Company’s shares will be registered for trading within ninety
(90) days following the grant date , the fair market value of
the shares at the grant date shall be determined in accordance with
the average value of the Company’s shares on the thirty
(30) trading days preceding the grant date or on the thirty
(30) trading days following the date of registration for
trading, as the case may be.
“ITA” means the Israeli
Tax Authorities.
“ITO” means the Israeli
Income Tax Ordinance (New Version) 1961 and the rules, regulations,
orders or procedures promulgated thereunder and any amendments
thereto, including specifically the Rules, all as may be amended
from time to time.
2
“Non-Trustee Award”
means an Award granted to an Eligible 102 Participant pursuant to
Section 102(c) of the ITO and not held in trust by a
Trustee.
“Option” means a right
to purchase shares granted under the Plan, and subject to the terms
specified in the Plan, the Appendix and the applicble Award
Agreement.
“Required Holding
Period” means the requisite period prescribed by the ITO and
the Rules, or such other period as may be required by the ITA, with
respect to 102 Trustee Awards, during which those awards must be
held by the Trustee for the benefit of the person to whom it was
granted. As of the Effective Date, the Required Holding Period for
102 Capital Gains Track Awards is 24 months from the date of
grant.
“Restricted Stock Unit”
(“RSU”) means a promise by the issuer of a share of
stock after all applicable restrictions, including vesting
restrictions, are met, and subject to the terms of the Plan, the
Appendix and the applicable Award Agreement.
“Rules” means the Income
Tax Rules (Tax Benefits in Share Issuance to Employees)
5763-2003.
“Section 102” shall mean
the provisions of Section 102 of the ITO, as amended from time
to time, including most recently by the Law Amending the Income Tax
Ordinance (Number 132), 2002, effective as of January 1, 2003
and the Law Amending the Income Tax Ordinance (Number 147),
2005.
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