3COM CORPORATION
STAND ALONE RESTRICTED STOCK AGREEMENT
3Com Corporation
has granted Eileen Nelson (the “Participant”)
Restricted Stock shares in accordance with the Participant’s
offer letter dated May 20, 2008 — Revised (the “
Offer Letter ”), subject to the following terms and
conditions as set forth in this Award Agreement. The
“Effective Date” of this Award Agreement shall be
June 3, 2008.
1.
Definitions; Vesting and Reacquisition Rights . As
used herein, the following definitions shall apply:
(a) “
Administrator ” means the Board or any of its
Committees as shall be administering the Award.
(b) “
Applicable Laws ” means the requirements relating to
the administration of restricted stock plans 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 any other applicable laws.
(c) “
Award ” means, individually or collectively, the grant
of Restricted Stock under this Award Agreement and Notice of Grant
of Restricted Stock.
(d) “
Award Agreement ” means this Stand Alone Restricted
Stock Agreement between the Company and the Participant evidencing
the terms and conditions of this Award.
(e) “
Board ” means the Board of Directors of 3Com
Corporation.
(f) “
Change of Control ” shall have the meaning ascribed
thereto (or to any similar definition such as “Change in
Control”) in the Management Retention Agreement between the
Company and the Participant effective as of May 20, 2008, as
amended from time to time.
(g) “
Code ” means the U.S. Internal Revenue Code of 1986,
as amended.
(h) “
Committee ” means a committee, which may consist of
one or more persons whom may or may not be Board members, as is
consistent with the Applicable Laws, appointed by the
Board.
(i) “
Common Stock ” means the common stock of the
Company.
(j) “
Company ” shall mean 3Com Corporation and any
successor corporation thereto.
(k) “
Consultant ” means any person, including an advisor,
engaged by the Company or a Parent or Subsidiary as an independent
contractor to render services to such entity.
(l) “
Date of Restricted Stock Grant ” shall mean the
“Date of Grant” as set forth in the Notice of
Grant.
(m) “
Director ” means a member 3Com’s Board of
Directors.
(n) “
Employee ” means any person, including Officers and
Directors, employed by the Company or any Parent or Subsidiary of
the Company. A Service Provider shall not cease to be an Employee
in the case of (i) any leave of absence approved by the
Company or any leave for which a return to employment is guaranteed
under Applicable Laws, or (ii) transfers between locations of
the Company or between the Company, its Parent, any Subsidiary, or
any successor. Neither service as a Director nor payment of a
director’s fee by the Company shall be sufficient to
constitute “employment”
-1-
(o) “
Exchange Act ” means the Securities Exchange Act of
1934, as amended.
(p) “
Initial Vesting Date ” shall be the date occurring one
(1) year after the Date of Restricted Stock Grant.
(q) “
Notice of Grant ” shall mean the “NOTICE OF
GRANT OF RESTRICTED STOCK”. The Notice of Grant is part of
this Award Agreement.
(r) “
Number of Restricted Stock ” shall mean the
“Total Number of Restricted Stock Granted” as set forth
in the Notice of Grant.
(s) “
Offer Letter ” shall have the meaning ascribed thereto
in the first paragraph of this Agreement.
(t) “
Officer ” means a person who is an officer of the
Company within the meaning of Section 16 of the Exchange Act
and the rules and regulations promulgated thereunder.
(u) “
Parent ” means a “parent corporation,”
whether now or hereafter existing, as defined in Section 424(e) of
the Code.
(v) “
Restricted Stock ” means shares of Common Stock or
units/rights to acquire shares of Common Stock granted pursuant to
this Agreement that are subject to vesting, as adjusted in
accordance with this Agreement.
(w) “
Service Provider ” means an Employee, Director or
Consultant.
(x) “
Subsidiary ” means a “subsidiary
corporation”, whether now or hereafter existing, as defined
in Section 424(f) of the Code and also include partnerships,
limited liability companies and other entities that are at least
30% owned by the Company.
Vesting, Restrictions on Unvested Shares and Unvested Share
Reacquisition Right .
Vesting . Subject to the terms and conditions of this Award
Agreement, and provided that the Participant remains a Service
Provider through each vesting date, the Restricted Stock shall
become “ Vested Shares ” for purposes of this
Award Agreement in three (3) equal, annual installments,
commencing on the Initial Vesting Date. Until the shares of
Restricted Stock vest and become Vested Shares, which unvested
shares shall be called Unvested Shares (as defined below), neither
the Unvested Shares, nor any right with respect to the Unvested
Shares of Restricted Stock under this Agreement, may be sold,
assigned, transferred, pledged, hypothecated (by operation of law
or otherwise) or otherwise conveyed or encumbered and shall not be
subject to execution, attachment or similar process. Any attempted
sale, assignment, transfer, pledge, hypothecation or other
conveyance or encumbrance shall be void and unenforceable against
the Company or any affiliate of the Company. Upon becoming Vested
Shares, such restrictions shall lapse. A legend or legends may be
affixed to share certificates representing the Restricted Stock
evidencing these restrictions.
Notwithstanding
the foregoing, the Participant shall receive accelerated vesting
with respect to all or a portion of the Participant’s then
outstanding unvested portion of the Award, subject to the terms and
conditions specified in the Management Retention Agreement (“
MRA ”) and the Severance Benefits Agreement (“
SBA ”), as the same may be amended from time to time,
each by and between the Company and the Participant effective
May 20, 2008.
Unvested Share Reacquisition Right . In the event that the
Participant’s Service Provider relationship with the Company
is terminated for any reason, with or without cause, the Company
shall automatically reacquire all shares of Restricted Stock that
are not Vested Shares as of the termination date
2
(the “
Unvested Shares ”) without any action on the part of
Participant, who shall forfeit such shares immediately, and the
Participant shall not be entitled to any payment therefor (the
“ Unvested Share Reacquisition Right
”).
2.
Leaves of Absence . Unless the Administrator provides
otherwise or as otherwise required by Applicable Laws, the
Restricted Stock shall cease to vest on the 91
st day of any unpaid leave of absence and shall
only recommence upon the Participant’s return to active
service.
3.
Rights as a Shareholder or Employee . The Participant
shall have no rights as a stockholder with respect to the shares of
Restricted Stock until such time as the shares are issued to the
Participant in the form of a certificate or certificates or other
appropriate means as determined by the Company in its discretion.
Except as provided in this Agreement, no adjustment shall be made
for dividends or distributions or other rights for which the record
date is prior to the date such shares are issued.
4. No
Guarantee of Continued Service . THE PARTICIPANT
ACKNOWLEDGES AND AGREES THAT THE VESTING OF SHARES PURSUANT TO THE
VESTING SCHEDULE HEREOF IS EARNED ONLY BY CONTINUING AS AN EMPLOYEE
OR OTHER SERVICE PROVIDER AT THE WILL OF THE COMPANY (NOT THROUGH
THE ACT OF BEING HIRED, BEING GRANTED THE RESTRICTED STOCK OR
ACQUIRING SHARES HEREUNDER). THE PARTICIPANT FURTHER ACKNOWLEDGES
AND AGREES THAT THIS AWARD AGREEMENT, THE TRANSACTIONS CONTEMPLATED
HEREUNDER AND THE VESTING SCHEDULE SET FORTH HEREIN DO NOT
CONSTITUTE AN EXPRESS OR IMPLIED PROMISE OF CONTINUED ENGAGEMENT AS
AN EMPLOYEE OR OTHER SERVICE PROVIDER FOR THE VESTING PERIOD, FOR
ANY PERIOD, OR AT ALL, AND SHALL NOT INTERFERE IN ANY WAY WITH THE
PARTICIPANT’S RIGHT OR THE COMPANY’S RIGHT TO TERMINATE
THE PARTICIPANT’S RELATIONSHIP AS AN EMPLOYEE OR OTHER
SERVICE PROVIDER OF THE COMPANY AT ANY TIME, WITH OR WITHOUT CAUSE
OR NOTICE.
5.
Adjustments Upon Changes in Capitalization, Dissolution,
Liquidation or Change of Control .
(a)
Changes in Capitalization . Subject to any required action
by the stockholders of the Company, the number of shares of Common
Stock covered by each outstanding Award, as well as the price per
share of Common Stock covered by each such outstanding Award, shall
be proportionately adjusted for any increase or decrease in the
number of issued shares of Common Stock resulting from a stock
split, reverse stock split, stock dividend, combination or
reclassification of the Common Stock, or any other increase or
decrease in the number of issued shares of Common Stock effected
without receipt of consideration by the Company; provided, however,
that conversion of any convertible securities of the Company shall
not be deemed to have been “effected without receipt of
consideration.” Such adjustment shall be made by the
Administrator, whose determination in that respect shall be final,
binding and conclusive. Except as expressly provided herein, no
issuance by the Company of shares of stock of any class, or
securities convertible into shares of stock of any class, shall
affect, and no adjustment by reason thereof shall be made with
respect to, the number or price of shares of Common Stock subject
to an Award.
(b)
Dissolution or Liquidation . In the event of the proposed
dissolution or liquidation of the Company, the Administrator shall
notify the Participant as soon as practicable prior to the
effective date of such proposed transaction. The Administrator in
its discretion may provide for the Participant to have the right to
exercise his Award until ten (10) days prior to such
transaction as to all of
3
the stock
covered thereby, including shares of Restricted Stock as to which
the Award would not otherwise be vested or exercisable. In
addition, the Administrator may provide that any Company repurchase
option or forfeiture applicable to any shares covered by the Award
shall lapse as to all such shares, provided
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