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Exhibit
10.3
[FORM OF NON-OFFICER
PERFORMANCE SHARE AGREEMENT]
POLYCOM,
INC.
PERFORMANCE SHARE
AGREEMENT
[NAME]
Employee ID Number:
[Number]
NOTICE OF
GRANT
Polycom, Inc. (the
“Company”) hereby grants you, [Name] (the
“Employee”), an award of Performance Shares under the
Company’s 2004 Equity Incentive Plan (the
“Plan”). The date of this Performance Share Agreement
(the “Agreement”) is [DATE] (the “Grant
Date”). Subject to the provisions of Appendix A
(attached), Appendix B (attached) and of the Plan, the principal
features of this award are as follows:
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Target Number of
Performance Shares:
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[________] |
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| Performance Period: |
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[INSERT PERFORMANCE PERIOD] |
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| Performance Matrix: |
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The
number of Performance Shares in which you may vest in accordance
with the Vesting Schedule will depend upon achievement of
[INSERT DESCRIPTION OF PERFORMANCE GOALS] and will be
determined in accordance with the Performance Matrix, attached
hereto as Appendix B. |
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| Vesting
Schedule: |
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[INSERT DESCRIPTION OF VESTING SCHEDULE]* |
IMPORTANT
:
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Except as otherwise provided in Appendix A, Employee will not
vest in the Performance Shares unless he or she is employed by the
Company or one of its Subsidiaries through the applicable vesting
date. |
Your signature below
indicates your agreement and understanding that this award is
subject to all of the terms and conditions contained in
Appendix A, Appendix B and the Plan. For example, important
additional information on vesting and forfeiture of the Performance
Shares is contained in paragraphs 3 through 5 and
paragraph 7 of Appendix A. PLEASE BE SURE TO READ ALL OF
APPENDIX A, WHICH CONTAINS THE SPECIFIC TERMS AND CONDITIONS OF
THIS AGREEMENT.
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| POLYCOM, INC. |
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EMPLOYEE |
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| [NAME] |
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[NAME] |
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| [TITLE] |
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| Date: ___________, 200_ |
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Date: ___________, 200_ |
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APPENDIX A
TERMS AND CONDITIONS OF
PERFORMANCE SHARES
1. Grant . The Company
hereby grants to the Employee under the Plan an award of the Target
Number of Performance Shares set forth on the Notice of Grant,
subject to all of the terms and conditions in this Agreement and
the Plan. The number of Performance Shares in which the Employee
may vest shall depend upon achievement of [INSERT DESCRIPTION OF
PERFORMANCE GOALS] for the Performance Period and shall be
determined in accordance with the Performance Matrix, attached
hereto as Appendix B. In accordance with the Performance Matrix,
the number of the Performance Shares in which the Employee may vest
will range [INSERT APPLICABLE RANGE] . The number of such
Shares shall be determined by the Committee following the end of
the Performance Period and the review and approval of the
Company’s earnings results by the Company’s Audit
Committee, in accordance with the following rules. [INSERT
APPLICABLE RULES] . When Shares are paid to the Employee in
payment for the Performance Shares, par value will be deemed paid
by the Employee for each Performance Share by past services
rendered by the Employee, and will be subject to the appropriate
tax withholdings. Unless otherwise defined herein, capitalized
terms used herein shall have the meanings ascribed to them in the
Plan.
(a) As used herein,
[INSERT APPLICABLE DEFINITIONS] .
2. Company’s
Obligation to Pay . Each Performance Share has a value equal to
the Fair Market Value of a Share on the date that the Performance
Share is granted. Unless and until the Performance Shares have
vested in the manner set forth in paragraphs 3 through 5, the
Employee will have no right to payment of such Performance Shares.
Prior to actual payment of any vested Performance Shares, such
Performance Shares will represent an unsecured obligation. Payment
of any vested Performance Shares shall be made in whole Shares
only.
3. Vesting Schedule/Period
of Restriction . Except as provided in paragraphs 4 and 5, and
subject to paragraph 7, the Performance Shares awarded by this
Agreement shall vest in accordance with the vesting provisions set
forth on the first page of this Agreement. Performance Shares shall
not vest in the Employee in accordance with any of the provisions
of this Agreement unless the Employee shall have been continuously
employed by the Company or by one of its Subsidiaries from the
Grant Date until the date the Performance Shares are otherwise
scheduled to vest.
4. Modifications to
Vesting Schedule .
(a) Vesting upon Leave of
Absence. In the event that the Employee takes an authorized
leave of absence (“LOA”), the Performance Shares
awarded by this Agreement that are scheduled to vest shall be
modified as follows:
(i) if the duration of the
Employee’s LOA is sixty (60) days or less, the vesting
schedule set forth on the first page of this Agreement shall not be
affected by the Employee’s LOA.
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(ii) if the duration of the
Employee’s LOA is greater than sixty (60) days, the
scheduled vesting of any Performance Shares awarded by this
Agreement that are not then vested shall be deferred for a period
of time equal to the duration of the Employee’s
LOA.
(b) Death or Disability of
Employee . In the event that the Employee incurs a Termination
of Service due to his or her death or Disability, the Performance
Shares subject to this Performance Share award shall vest on the
date of the Employee’s death or Disability as follows:
[INSERT DESCRIPTION OF VESTING CONDITIONS]
In the event that any
applicable law limits the Company’s ability to accelerate the
vesting of this award of Performance Shares, this paragraph 4(b)
shall be limited to the extent required to comply with applicable
law.
(c) Retirement of
Employee . In the event that the Employee incurs a Termination
of Service due to his or her Retirement, the Performance Shares
subject to this Performance Share award shall vest on the date of
the Employee’s Retirement as follows: [INSERT DESCRIPTION
OF VESTING CONDITIONS]
In the event that any
applicable law limits the Company’s ability to accelerate the
vesting of this award of Performance Shares, this paragraph 4(c)
shall be limited to the extent required to comply with applicable
law.
For purposes of this
Agreement, “Retirement” means Termination of Service
after attaining either (a) age sixty-five (65), or
(b) age fifty-five (55) plus a number of Years of Service
so that the sum of the Employee’s age and Years of Service is
at least sixty-five (65). For this purpose, the Employee’s
“Years of Service” equals the number of full months
from the Employee’s latest hire date with the Company (or any
Subsidiary) to the date of Termination of Service, divided by
12.
(d) Change in
Control.
(i) In the event of a Change
in Control, this award shall be subject to the definitive agreement
governing such Change in Control. Such agreement, without the
Employee’s consent and notwithstanding any provision to the
contrary in this Agreement or the Plan, must provide for one of the
following: (a) the assumption of this award by the surviving
corporation or its parent; (b) the substitution by the
surviving corporation or its parent of an award with substantially
the same terms as this award; or (c) the cancellation of this
award after payment to the Employee in Shares of an amount equal to
the Performance Shares subject to this award at the time of the
Change in Control. In the event the definitive agreement does not
provide for one of the foregoing alternatives with respect to the
treatment of this award, this award shall have the treatment
specified in clause (c) of the preceding sentence. The
Committee may, in its sole discretion, accelerate the vesting of
this award in connection with any of the foregoing alternatives.
For purposes of this Agreement, “Change in Control”
means the occurrence of any of the following events: (a) any
“person” (as such term is used in Sections 13(d) and
14(d) of the 1934 Act) becomes the “beneficial owner”
(as defined in Rule 13d-3 of the 1934 Act), directly or indirectly,
of securities of the
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Company representing more
than fifty percent (50%) of the total voting power represented
by the Company’s then outstanding voting securities;
(b) the consummation of the sale or disposition by the Company
of all or substantially all of the Company’s assets;
(c) a change in the composition of the Board occurring within
a one-year period, as a result of which fewer than a majority of
the directors are Incumbent Directors; or (d) the consummation
of a merger or consolidation of the Company with any other
corporation, other than a merger or consolidation which would
result in the voting securities of the Company outstanding
immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities
of the surviving entity or its parent) at least fifty percent
(50%) of the total voting power represented by the voting
securities of the Company or such surviving entity or its parent
outstanding immediately after such merger or consolidation.
“Incumbent Directors” means directors who either
(A) are Directors as of the effective date of the Plan, or
(B) are elected, or nominated for election, to the Board with
the affirmative votes of at least a majority of the Directors at
the time of such election or nomination (but will not include an
individual whose election or nomination is in connection with an
actual or threatened proxy contest relating to the election of
directors to the Company).
(ii) Notwithstanding anything
herein to the contrary, in the event the Employee incurs a
Termination of Service within twelve (12) months following a
Change in Control on account of a termination by the Company (or
any Subsidiary) for any reason other than Misconduct or on account
of a termination by the Employee for Good Reason, then this award
immediately will vest in one hundred percent (100%) of the
Performance Shares subject to this Performance Share
award.
For purposes of this
Agreement, “Good Reason” means, without the
Employee’s written consent, (a) a relocation of the
Employee’s principal place of employment by more than fifty
(50) miles from the location immediately prior to the Change
in Control, (b) a reduction in the Employee’s base
salary by more than 10% or a material reduction in the
Employee’s kind or level of benefits (not including base
salary, incentive compensation or equity compensation) that, in
either instance, is not applied to all similarly situated
employees, or (c) a change in the Employee’s duties that
is materially inconsistent with the Employee’s education,
professional training and experience at the Company.
For purposes of this
Agreement, “Misconduct” means (a) the commission
of any act of fraud, embezzlement or dishonesty by the Employee,
(b) the Employee’s conviction of, or plea of nolo
contendre to, a felony, (c) any unauthorized use or disclosure
by the Employee of confidential information or trade secrets of the
Company or of any Subsidiary, or (d) any other intentional
misconduct by the Employee adversely affecting the business or
affairs of the Company or of any Subsidiary in a material manner.
The preceding definition shall not be deemed to be inclusive of all
the acts or omissions that the Company (or any Subsidiary) may
consider as grounds for the dismissal or discharge of the Employee
or any other individual in the service of the Company (or any
Subsidiary).
(iii) In the event of a
Change in Control during the Performance Period, the Performance
Period shall be deemed to end immediately prior to the Change in
Control. The number of Performance Shares in which the Employee
shall be entitled to vest in accordance with the terms of this
Agreement and the Vesting Schedule set forth on the Notice of Grant
shall be determined by the Committee (as in existence prior to the
Change in Control) and shall be the sum of
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(A) and (B) below. For
this purpose, the Target Number of Performance Shares shall be
allocated on a pro rata basis between (i) the Company’s
fiscal quarter(s) within the Performance Period that were completed
prior to the Change in Control (the “Completed Period”)
and (ii) the remaining fiscal quarter(s) within the
Performance Period (the “Remaining Period”).
(A) With respect to the
Target Number of Performance Shares allo
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