Exhibit 10.1
NETGEAR, INC.
2003 EMPLOYEE STOCK PURCHASE
PLAN
(amended March 23,
2009)
The following constitute the
provisions of the Employee Stock Purchase Plan of NETGEAR,
Inc.
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 of the
Company through accumulated payroll deductions. It is the intention
of the Company to have the Plan qualify as an “Employee Stock
Purchase Plan” under Section 423 of the Code, although
the Company makes no undertaking or representation to maintain such
qualification. In addition, this Plan document authorizes the grant
of options under a non-423(b) Plan (“Non-423(b)
Component”) which do not qualify under Section 423(b) of
the Code. The provisions of the Plan, accordingly, shall be
construed so as to extend and limit participation in a uniform and
nondiscriminatory basis consistent with the requirements of
Section 423 unless the offering is made under the Non-423(b)
Component of the Plan.
2. Definitions .
(a) “ Administrator
” shall mean the Board or any Committee designated by the
Board to administer the Plan pursuant to
Section 14.
(b) “ Board ”
shall mean the Board of Directors of the Company.
(c) “ Change of Control
” shall mean the occurrence of any of the following
events:
(i) Any “person” (as
such term is used in Sections 13(d) and 14(d) of the Exchange Act)
becomes the “beneficial owner” (as defined in Rule
13d-3 of the Exchange Act), directly or indirectly, of securities
of the Company representing fifty percent (50%) or more of the
total voting power represented by the Company’s then
outstanding voting securities;
(ii) The consummation of the sale or
disposition by the Company of all or substantially all of the
Company’s assets;
(iii) 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; or
(iv) A change in the composition of
the Board, as a result of which fewer than a majority of the
Directors are Incumbent Directors. “Incumbent
Directors” shall mean Directors who either (A) are
Directors of the Company, as applicable, as of the date hereof, or
(B) are elected, or nominated for election, to the Board with
the affirmative votes of at least a majority of those Directors
whose election or nomination was not in connection with any
transaction described in subsections (i), (ii) or
(iii) or in connection with an actual or threatened proxy
contest relating to the election of Directors of the
Company.
(d) “ Code ”
shall mean the Internal Revenue Code of 1986, as
amended.
(e) “ Code
Section 423(b) Plan ” shall mean an employee stock
purchase plan which is designed to meet the requirements set forth
in Section 423(b) of the Code, as amended. The provisions of
the Code Section 423(b) Plan should be construed, administered
and enforced in accordance with Section 423(b).
(f) “ Committee ”
means a committee appointed by the Board.
(g) “ Common Stock
” shall mean the common stock of the Company.
(h) “ Company ”
shall mean NETGEAR, Inc., a Delaware corporation.
(i) “ Compensation
” shall mean all base straight time gross earnings,
commissions, overtime and shift premiums, but exclusive of payments
for incentive compensation, bonuses and other
compensation.
(j) “ Designated
Subsidiary ” shall mean any Subsidiary selected by the
Administrator as eligible to participate in the Plan.
(k) “ Director ”
shall mean a member of the Board.
(l) “ Eligible Employee
” shall mean any individual who is a common law employee of
the Company or any Designated Subsidiary and whose customary
employment with the Company or Designated Subsidiary is at least
twenty (20) hours per week and more than five (5) months
in any calendar year except for certain employees of certain
Designated Subsidiaries that are participating in the Non-423(b)
Component of the Plan that the Administrator may, from time to
time, designate as ineligible to participate in the Plan. For
purposes of the Plan, the employment relationship shall be treated
as continuing intact while the individual is on sick leave or other
leave of absence approved by the Company. Where the period of leave
exceeds three (3) months and the individual’s right to
reemployment is not guaranteed either by statute or by contract,
the employment relationship shall be deemed to have terminated
three (3) months and one (1) day following the
commencement of such leave.
(m) “ Exchange Act
” shall mean the Securities Exchange Act of 1934, as
amended.
(n) “ Exercise Date
” shall mean January 31 and July 31 of each year,
or the immediately preceding Trading Day if January 31 or
July 31 is not a Trading Day.
(o) “ Fair Market Value
” shall mean, 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 shall 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 Board deems reliable;
(ii) If the Common Stock is
regularly quoted by a recognized securities dealer but selling
prices are not reported, its Fair Market Value shall 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 Board deems reliable; or
(iii) In the absence of an
established market for the Common Stock, the Fair Market Value
thereof shall be determined in good faith by the Board.
(p) “ Offering Date
” shall mean the first Trading Day of each Offering
Period.
(q) “ Offering Periods
” shall mean the periods of approximately six (6) months
during which an option granted pursuant to the Plan may be
exercised, commencing on February 1 and August 1 of each
year and
terminating on the following January 31 and
July 31, or the immediately preceding Trading Day if
January 31 or July 31 is not a Trading Day. The duration
and timing of Offering Periods may be changed pursuant to
Section 4 of this Plan.
(r) “ Parent ”
shall mean a “parent corporation,” whether now or
hereafter existing, as defined in Section 424(e) of the
Code.
(s) “ Plan ”
shall mean this Employee Stock Purchase Plan, which includes a Code
Section 423(b) Plan and a Non-423(b) Component.
(t) “ Purchase Price
” shall mean 85% of the Fair Market Value of a share of
Common Stock on the Exercise Date; provided however, that the
Purchase Price may be adjusted by the Administrator pursuant to
Section 20.
(u) “ Subsidiary
” shall mean a “subsidiary corporation,” whether
now or hereafter existing, as defined in Section 424(f) of the
Code.
(v) “ Trading Day
” shall mean a day on which national stock exchanges and the
Nasdaq System are open for trading.
3. Eligibility .
(a) Offering Periods . Any
Eligible Employee on a given Offering Date shall be eligible to
participate in the Plan.
(b) Limitations . Any
provisions of the Plan to the contrary notwithstanding, no Eligible
Employee shall 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 five percent (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 the Company accrues at a rate which exceeds
Twenty-Five Thousand Dollars ($25,000) worth of stock (determined
at the Fair Market Value of the shares at the time such option is
granted) for each calendar year in which such option is outstanding
at any time, as determined in accordance with Section 423 of
the Code and the regulations thereunder.
4. Offering Periods . The
Plan shall be implemented by consecutive Offering Periods with a
new Offering Period commencing on February 1 and August 1
of each year, or on such other date as the Board shall determine,
and continuing thereafter until terminated in accordance with
Section 20 hereof. The Board shall have the power to change
the duration of Offering Periods (including the commencement dates
thereof) with respect to future offerings without shareholder
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 become a participant in the Plan by
completing a subscription agreement authorizing payroll deductions
in the form of Exhibit A to this Plan and filing it with the
Company’s payroll office prior to the applicable Offering
Date.
6. Payroll Deductions
.
(a) At the time a participant files
his or her subscription agreement, he or she shall elect to have
payroll deductions made on each pay day during the Offering Period
in an amount not exceeding 10% 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 shall have the payroll deductions made on such day
applied to his or her account under the new Offering Period. A
participant’s subscription agreement shall remain in effect
for successive Offering Periods unless terminated as provided in
Section 10 hereof.
(b) Payroll deductions for a
participant shall commence on the first payday following the
Offering Date and shall end on the last payday in the Offering
Period to which such authorization is applicable, unless sooner
terminated by the participant as provided in Section 10
hereof.
(c) All payroll deductions made for
a participant shall be credited to his or her account under the
Plan and shall 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
hereof, or may increase or decrease the rate of his or her payroll
deductions during the Offering Period by completing or filing with
the Company a new subscription agreement authorizing a change in
payroll deduction rate. The Administrator may, in its discretion,
limit the nature and/or number of participation rate changes during
any Offering Period. The change in rate shall be effective with the
first full payroll period following five (5) business days
after the Company’s receipt of the new subscription agreement
unless the Company elects to process a given change in
participation more quickly.
(e) Notwithstanding the foregoing,
to the extent necessary to comply with Section 423(b)(8) of
the Code and Section 3(b) hereof, a participant’s
payroll deductions may be decreased to zero percent (0%) at any
time during an Offering Period. Payroll deductions shall recommence
at the rate originally elected by the participant effective as of
the beginning of the first Offering Period which is scheduled to
end in the following calendar year, unless terminated by the
participant as provided in Section 10 hereof.
(f) At the time the option is
exercised, in whole or in part, or at the time some or all of the
Company’s Common Stock issued under the Plan is disposed of,
the participant must make adequate provision for the
Company’s federal, state, or other tax liability payable to
any authority, national insurance, social security or other tax
withholding obligations, if any, which arise upon the exercise of
the option or the disposition of the Common Stock. At any time, the
Company or the employing Designated Subsidiary, as applicable, may,
but shall not be obligated to, withhold from the
participant’s compensation the amount necessary for the
Company to meet applicable withholding obligations, including any
withholding required to make available to the Company or the
employing Designated Subsidiary, as applicable, any tax deductions
or benefits attributable to sale or early disposition of Common
Stock by the Eligible Employee.
7. Grant of Option . On the
Offering Date of each Offering Period, each Eligible Employee
participating in such Offering Period shall be granted an option to
purchase on each Exercise Date during such Offering Period (at the
applicable Purchase Price) up to a number of shares of the
Company’s Common Stock determined by dividing such Eligible
Employee’s payroll deductions accumulated prior to such
Exercise Date and retained in the participant’s account as of
the Exercise Date by the applicable Purchase Price; provided that
in no event shall an Eligible Employee be permitted to purchase
during each Offering Period more than 10,000 shares of the
Company’s Common Stock (subject to any adjustment pursuant to
Section 19), and provided further that such purchase shall be
subject to the limitations set forth in Sections 3(b) and 13
hereof. The Eligible Employee may accept the grant of such option
by turning in a completed Subscription Agreement (attached hereto
as Exhibit A ) to the Company on or prior to an Offering
Date. The Administrator may, for future Offering Periods, increase
or decrease, in its absolute discretion, the maximum number of
shares of the Company’s Common Stock an Eligible Employee may
purchase during each Offering Period. Exercise of the option shall
occur as provided in Section 8 hereof, unless the participant
has withdrawn pursuant to Section 10 hereof. The option shall
expire on the last day of the Offering Period.
8. Exercise of Option
.
(a) Unless a participant withdraws
from the Plan as provided in Section 10 hereof, his or her
option for the purchase of shares shall be exercised automatically
on the Exercise Date, and the maximum number of full shares subject
to the option shall be purchased for such participant at the
applicable Purchase Price with the accumulated payroll deductions
in his or her account. No fractional shares shall be purchased; any
payroll deductions accumulated in a participant’s account
which are not sufficient to purchase a full share shall be retained
in the participant’s account for the subsequent Offering
Period, subject to earlier withdrawal by the participant as
provided in Section 10 hereof. Any other funds left over in a
participant’s account after the Exercise Date shall be
returned to the participant. During a participant’s lifetime,
a participant’s option to purchase shares hereunder is
exercisable only by him or her.
(b) If the Administrator determines
that, on a given Exercise Date, the number of shares with respect
to which options are to be exercised may exceed (i) the number
of shares of Common Stock that were available for sale under the
Plan on the Offering Date of the applicable Offering Period, or
(ii) the number of shares available for sale under the Plan on
such Exercise Date, the Administrator may in its sole discretion
(x) provide that the Company shall make a pro rata allocation
of the shares of Common Stock available for purchase on such
Offering Date or Exercise Date, as applicable, in as uniform a
manner as shall be practicable and as it shall determine in its
sole discretion to be equitable among all participants exercising
options to purchase Common Stock on such Exercise Date, and
continue all Offering Periods then in effect, or (y) provide
that the Company shall make a pro rata allocation of the shares
available for purchase on such Offering Date or Exercise Date, as
applicable, in as uniform a manner as shall be practicable and as
it shall determine in its sole discretion to be equitable among all
participants exercising options to purchase Common Stock on such
Exercise Date, and terminate any or all Offering Periods then in
effect pursuant to Section 20 hereof. The Company may make a
pro rata allocation of the shares available on the Offering Date of
any applicable Offering Period pursuant to the preceding sentence,
notwithstanding any authorization of additional shares for issuance
under the Plan by the Company’s shareholders subsequent to
such Offering Date.
9. Delivery . As soon as
reasonably practicable after each Exercise Date on which a purchase
of shares occurs, the Company shall arrange the delivery to each
participant the shares purchased upon exercise of his or her option
in a form determined by the Administrator, including by means of
electronic notice.
10. Withdrawal .
(a) A participant may withdraw all
but not less than all the payroll deductions credited to his or her
account and not yet used to exercise his or her option under the
Plan at any time prior to the Exercise Date for an
