Exhibit 10.5
BROCADE COMMUNICATIONS SYSTEMS,
INC.
2009 EMPLOYEE STOCK PURCHASE
PLAN
1. Purpose . The purpose of
the Plan is to provide employees of the Company and its Designated
Subsidiaries with an opportunity to purchase Common Stock through
accumulated payroll deductions. The Company’s intention is to
have the Plan qualify as an “employee stock purchase
plan” under Section 423 of the Code. The provisions of
the Plan, accordingly, will be construed so as to extend and limit
Plan participation in a uniform and nondiscriminatory basis
consistent with the requirements of Section 423 of the
Code.
2. Definitions .
(a) “ Administrator
” means the Board or any Committee designated by the Board to
administer the Plan pursuant to Section 14.
(b) “ Applicable Laws
” means the requirements relating to the administration of
equity-based awards under U.S. state corporate laws, U.S. federal
and state securities laws, the Code, any stock exchange or
quotation system on which the Common Stock is listed or quoted and
the applicable laws of any foreign country or jurisdiction where
Awards are, or will be, granted under the Plan.
(c) “ Board ”
means the Board of Directors of the Company.
(d) “ Change in Control
” means the occurrence of any of the following
events:
(i) Change in Ownership of the
Company . A change in the ownership of the Company which occurs
on the date that any one person, or more than one person acting as
a group (“ Person ”), acquires ownership of the
stock of the Company that, together with the stock held by such
Person, constitutes more than 50% of the total voting power of the
stock of the Company; or
(ii) Change in Effective Control
of the Company . If the Company has a class of securities
registered pursuant to Section 12 of the Exchange Act, a
change in the effective control of the Company which occurs on the
date that a majority of members of the Board is replaced during any
12 month period by Directors whose appointment or election is not
endorsed by a majority of the members of the Board prior to the
date of the appointment or election. For purposes of this clause
(ii), if any Person is considered to be in effective control of the
Company, the acquisition of additional control of the Company by
the same Person will not be considered a Change in Control;
or
(iii) Change in Ownership of a
Substantial Portion of the Company’s Assets . A change in
the ownership of a substantial portion of the Company’s
assets which occurs on the date that any Person acquires (or has
acquired during the 12 month period ending on the date of the most
recent acquisition by such person or persons) assets from the
Company that have a total gross fair market value equal to or more
than 50% of the total gross fair market value of all of the assets
of the Company immediately prior to such acquisition or
acquisitions. For purposes of this subsection (iii), gross fair
market value means the value of the assets of the Company, or the
value of the assets being disposed of, determined without regard to
any liabilities associated with such assets.
For purposes of this
Section 2(d), persons will be considered to be acting as a
group if they are owners of a corporation that enters into a
merger, consolidation, purchase or acquisition of stock, or similar
business transaction with the Company.
Notwithstanding the foregoing, a
transaction will not be deemed a Change in Control unless the
transaction qualifies as a change in control event within the
meaning of Code Section 409A, as it has been and may be
amended from time to time, and any proposed or final Treasury
Regulations and Internal Revenue Service guidance that has been
promulgated or may be promulgated thereunder from time to
time.
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Further and for the avoidance of
doubt, a transaction will not constitute a Change in Control if:
(i) its sole purpose is to change the state of the
Company’s incorporation, or (ii) its sole purpose is to
create a holding company that will be owned in substantially the
same proportions by the persons who held the Company’s
securities immediately before such transaction.
(e) “ Code ”
means the Internal Revenue Code of 1986, as amended. Reference to a
specific section of the Code or Treasury Regulation thereunder will
include such section or regulation, any valid regulation or other
official applicable guidance promulgated under such section, and
any comparable provision of any future legislation or regulation
amending, supplementing or superseding such section or
regulation.
(f) “ Committee ”
means a committee of the Directors or of other individuals
satisfying Applicable Laws appointed by the Board in accordance
with Section 14.
(g) “ Common Stock
” means the common stock of the Company.
(h) “ Company ”
means Brocade Communications Systems, Inc., a Delaware corporation,
or any successor thereto.
(i) “ Compensation
” means an Eligible Employee’s base straight time gross
earnings and commissions, inclusive of payments for overtime, shift
premium, incentive compensation, incentive payments, bonuses and
other cash compensation.
(j) “ Designated
Subsidiary ” means any Subsidiary that has been
designated by the Administrator from time to time in its sole
discretion as eligible to participate in the Plan.
(k) “ Director ”
means a member of the Board.
(l) “ Eligible Employee
” means any individual who is a common law employee of an
Employer and is customarily employed for at least 20 hours per week
and more than 5 months in any calendar year by the Employer. For
purposes of the Plan, the employment relationship will be treated
as continuing intact while the individual is on sick leave or other
leave of absence that the Employer approves. Where the period of
leave exceeds 90 days and the individual’s right to
reemployment is not guaranteed either by statute or by contract,
the employment relationship will be deemed to have terminated on
the 91st day of such leave. The Administrator, in its discretion,
from time to time may, prior to an Offering Date for all options to
be granted on such Offering Date, determine (on a uniform and
nondiscriminatory basis) that the definition of Eligible Employee
will or will not include an individual if he or she: (i) has
not completed at least 2 years of service since his or her last
hire date (or such lesser period of time as may be determined by
the Administrator in its discretion), (ii) customarily works
not more than 20 hours per week (or such lesser period of time as
may be determined by the Administrator in its discretion),
(iii) customarily works not more than 5 months per calendar
year (or such lesser period of time as may be determined by the
Administrator in its discretion), (iv) is an officer or other
manager, or (v) is a highly compensated employee under
Section 414(q) of the Code.
(m) “ Employer ”
means any one or all of the Company and its Designated
Subsidiaries.
(n) “ Exchange Act
” means the Securities Exchange Act of 1934, as amended,
including the rules and regulations promulgated
thereunder.
(o) “ Exercise Date
” means the last day of an Offering Period.
(p) “ Fair Market Value
” means, as of any date, the value of Common Stock determined
as follows:
(i) If the Common Stock is listed on
any established stock exchange or a national market system,
including without limitation the Nasdaq Global Select Market, the
Nasdaq Global Market or the Nasdaq Capital Market of The Nasdaq
Stock Market, its fair market value will be the closing sales price
for such stock (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;
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(ii) If the Common Stock is
regularly quoted by a recognized securities dealer but selling
prices are not reported, its fair market value will be the mean of
the closing bid and asked prices for the Common Stock on the date
of determination, as reported in The Wall Street Journal or
such other source as the Administrator deems reliable;
or
(iii) In the absence of an
established market for the Common Stock, the fair market value
thereof will be determined in good faith by the
Administrator.
(q) “ Fiscal Year
” means the fiscal year of the Company.
(r) “ New Exercise Date
” means a new Exercise Date by shortening any Offering Period
then in progress.
(s) “ Offering Date
” means the first Trading Day of each Offering
Period.
(t) “ Offering Period
” will mean a period of approximately 24 months, or such
shorter period of time as determined by the Administrator in its
sole discretion, during which an option granted pursuant to the
Plan may be exercised, (i) commencing on the first Trading Day
on or after June 1 of the initial year of the Plan and
terminating on the last Trading Day in the period, thereof, and
(ii) commencing on the first Trading Day after the Exercise
Date of the preceding Offering Period and terminating on the last
Trading Day in the period. The duration and timing of Offering
Periods may be changed pursuant to Sections 4 and
19.
(u) “ Parent ”
means a “parent corporation,” whether now or hereafter
existing, as defined in Section 424(e) of the Code.
(v) “ Participant
” means an Eligible Employee that participates in the
Plan.
(w) “ Plan ”
means this 2009 Employee Stock Purchase Plan.
(x) “ Purchase Period
” means the period during an Offering Period that shares of
Common Stock may be purchased on a Participant’s behalf in
accordance with the terms of the Plan. Unless the Administrator
provides otherwise, the Purchase Period will have the same duration
and coincide with the length of the Offering Period.
(y) “ Purchase Price
” means an amount equal to 85% of the Fair Market Value of a
share of Common Stock on the Offering Date or on the Exercise Date,
whichever is lower; provided, however, that the Purchase Price may
be determined for subsequent Offering Periods by the Administrator
subject to compliance with Section 423 of the Code (or any
successor rule or provision or any other applicable law, regulation
or stock exchange rule) or pursuant to Section 19.
(z) “ Subsidiary
” means a “subsidiary corporation,” whether now
or hereafter existing, as defined in Section 424(f) of the
Code.
(aa) “ Trading Day
” means a day on which the national stock exchange upon which
the Common Stock is listed is open for trading.
3. Eligibility .
(a) Offering Date . Any
Eligible Employee on a given Offering Date will be eligible to
participate in the Plan, subject to the requirements of
Section 5.
(b) Limitations . Any
provisions of the Plan to the contrary notwithstanding, no Eligible
Employee will be granted an option under the Plan (i) to the
extent that, immediately after the grant, such Eligible Employee
(or any other person whose stock would be attributed to such
Eligible Employee pursuant to Section 424(d) of the Code)
would own capital stock of the Company or any Parent or Subsidiary
of the Company and/or hold outstanding options to purchase such
stock possessing 5% or more of the total combined voting power or
value of all classes of the capital stock of the Company or of any
Parent or Subsidiary of the Company, or (ii) to the extent
that his or her rights to purchase stock under all employee stock
purchase plans (as defined in Section 423 of the Code) of the
Company or any Parent or Subsidiary of
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the Company accrues at a rate which
exceeds $25,000 worth of stock (determined at the Fair Market Value
of the stock at the time such option is granted) for each calendar
year in which such option is outstanding at any time.
4. Offering Periods . The
Plan will be implemented by consecutive Offering Periods with a new
Offering Period commencing on the first Trading Day on or after
June 1 and December 1 each year, or on such other date as
the Administrator will determine, and continuing thereafter until
terminated in accordance with Section 20. The Administrator
will have the power to change the duration of Offering Periods
(including the commencement dates thereof) with respect to future
offerings without stockholder approval if such change is announced
prior to the scheduled beginning of the first Offering Period to be
affected thereafter.
5. Participation . An
Eligible Employee may participate in the Plan pursuant to
Section 3(a) by (i) submitting to the Company’s
stock administration office (or its designee), on or before a date
determined by the Administrator prior to an applicable Offering
Date, a properly completed subscription agreement authorizing
payroll deductions in the form provided by the Administrator for
such purpose, or (ii) following an electronic or other
enrollment procedure determined by the Administrator.
6. Payroll Deductions
.
(a) At the time a Participant
enrolls in the Plan pursuant to Section 5, he or she will
elect to have payroll deductions made on each pay day during the
Offering Period in an amount not exceeding 15% of the Compensation
which he or she receives on each pay day during the Offering
Period; provided, however, that should a pay day occur on an
Exercise Date, a Participant will have the payroll deductions made
on such day applied to his or her account under the subsequent
Purchase or Offering Period. A Participant’s subscription
agreement will remain in effect for successive Offering Periods
unless terminated as provided in Section 10.
(b) Payroll deductions for a
Participant will commence on the first pay day following the
Offering Date and will end on the last pay day prior to the
Exercise Date of such Offering Period to which such authorization
is applicable, unless sooner terminated by the Participant as
provided in Section 10.
(c) All payroll deductions made for
a Participant will be credited to his or her account under the Plan
and will be withheld in whole percentages only. A Participant may
not make any additional payments into such account.
(d) A Participant may discontinue
his or her participation in the Plan as provided in
Section 10, or may increase or decrease the rate of his or
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