Acquisition Equity Incentive Plan – JDS Uniphase Corp.
JDS UNIPHASE CORPORATION
2005 ACQUISITION EQUITY INCENTIVE PLAN
as amended May 2, 2010
1. Purpose of the Plan. The purpose of this Plan is to provide
incentives to attract eligible persons whose potential contributions are
important to the success of the Company by offering them an opportunity to
participate in the Company153s future performance.
2. Definitions. As used herein, the following definitions shall apply:
(a) “Administrator” means any Committee appointed by the Board in
accordance with Applicable Law to administer the Plan.
(b) “Affiliate” and “Associate” shall have the respective
meanings ascribed to such terms in Rule 12b-2 promulgated under the Exchange
Act.
(c) “Applicable Laws” means the legal requirements relating to the
Plan and the Awards under applicable provisions of federal securities laws,
state corporate and securities laws, the Code, the rules of any applicable stock
exchange or national market system, and the rules of any non-U.S. jurisdiction
applicable to Awards granted to residents therein.
(d) “Assumed” means that pursuant to a Corporate Transaction either
(i) the Award is expressly affirmed by the Company or (ii) the contractual
obligations represented by the Award are expressly assumed (and not simply by
operation of law) by the successor entity or its Parent in connection with the
Corporate Transaction with appropriate adjustments to the number and type of
securities of the successor entity or its Parent subject to the Award and the
exercise or purchase price thereof which preserves the compensation element of
the Award existing at the time of the Corporate Transaction as determined in
accordance with the instruments evidencing the agreement to assume the Award.
(e) “Award” means the grant of an Option, SAR, Dividend Equivalent
Right, Restricted Stock, Restricted Stock Unit, Performance Unit, or other right
or benefit under the Plan.
(f) “Award Agreement” means the written agreement evidencing the grant
of an Award executed by the Company and the Grantee, including any amendments
thereto.
(g) “Board” means the Board of Directors of the Company.
(h) “Cause” means, with respect to the termination by the Company or a
Related Entity of the Grantee153s Continuous Active Service, that such termination
is for “Cause” as such term is expressly defined in a then-effective written
agreement between the Grantee and the Company or such Related Entity, or in the
absence of such then-effective written agreement and definition, is based on, in
the determination of the Administrator, the Grantee153s: (i) performance of any
act or failure to perform any act in bad faith and to the detriment of the
Company or a Related Entity; (ii) dishonesty, intentional misconduct, material
violation of any
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applicable Company or Related Entity policy, or material breach of any
agreement with the Company or a Related Entity; or (iii) commission of a crime
involving dishonesty, breach of trust, or physical or emotional harm to any
person.
(i) “Change in Control” means a change in ownership or control of the
Company effected through either of the following transactions:
(i) the direct or indirect acquisition by any person or related group of
persons (other than an acquisition from or by the Company or by a
Company-sponsored employee benefit plan or by a person that directly or
indirectly controls, is controlled by, or is under common control with, the
Company) of beneficial ownership (within the meaning of Rule 13d-3 of the
Exchange Act) of securities possessing more than fifty percent (50%) of the
total combined voting power of the Company153s outstanding securities pursuant to
a tender or exchange offer made directly to the Company153s stockholders which a
majority of the Continuing Directors who are not Affiliates or Associates of the
offeror do not recommend such stockholders accept, or
(ii) a change in the composition of the Board over a period of thirty-six
(36) months or less such that a majority of the Board members (rounded up to the
next whole number) ceases, by reason of one or more contested elections for
Board membership, to be comprised of individuals who are Continuing Directors.
(j) “Code” means the Internal Revenue Code of 1986, as amended.
(k) “Committee” means any committee composed of members of the Board
appointed by the Board to administer the Plan.
(l) “Common Stock” means the common stock of the Company.
(m) “Company” means JDS Uniphase Corporation, a
Delaware corporation.
(n) “Consultant” means any person (other than an Employee or a
Director, solely with respect to rendering services in such person153s capacity as
a Director) who is engaged by the Company or any Related Entity to render
consulting or advisory services to the Company or such Related Entity.
(o) “Continuing Directors” means members of the Board who either (i)
have been Board members continuously for a period of at least thirty-six (36)
months or (ii) have been Board members for less than thirty-six (36) months and
were elected or nominated for election as Board members by at least a majority
of the Board members described in clause (i) who were still in office at the
time such election or nomination was approved by the Board.
(p) “Continuous Active Service” means that the provision of services
to the Company or a Related Entity in any capacity of Employee, Director or
Consultant is not interrupted or terminated. In jurisdictions requiring notice
in advance of an effective termination as an Employee, Director or Consultant,
Continuous Active Service shall be deemed terminated upon the actual cessation
of providing services to the Company or a Related Entity notwithstanding any
required notice period that must be fulfilled before a termination as an
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Employee, Director or Consultant can be effective under Applicable Laws.
Continuous Active Service shall not be considered interrupted in the case of (i)
any approved leave of absence, (ii) transfers among the Company, any Related
Entity, or any successor, in any capacity of Employee, Director or Consultant,
or (iii) any change in status as long as the individual remains in the service
of the Company or a Related Entity in any capacity of Employee, Director or
Consultant (except as otherwise provided in the Award Agreement). An approved
leave of absence shall include sick leave, military leave, or any other
authorized personal leave.
(q) “Corporate Transaction” means any of the following transactions:
(i) a merger or consolidation in which the Company is not the surviving
entity, except for a transaction the principal purpose of which is to change the
state in which the Company is incorporated;
(ii) the sale, transfer or other disposition of all or substantially all of
the assets of the Company;
(iii) the complete liquidation or dissolution of the Company;
(iv) any reverse merger or series of related transactions culminating in a
reverse merger (including, but not limited to, a tender offer followed by a
reverse merger) in which the Company is the surviving entity but in which
securities possessing more than forty percent (40%) of the total combined voting
power of the Company153s outstanding securities are transferred to a person or
persons different from those who held such securities immediately prior to such
merger or the initial transaction culminating in such merger but excluding any
such transaction or series of related transactions that the Administrator
determines shall not be a Corporate Transaction; or
(v) acquisition in a single or series of related transactions by any person
or related group of persons (other than the Company or by a Company-sponsored
employee benefit plan) of beneficial ownership (within the meaning of Rule 13d-3
of the Exchange Act) of securities possessing more than fifty percent (50%) of
the total combined voting power of the Company153s outstanding securities but
excluding any such transaction or series of related transactions that the
Administrator determines shall not be a Corporate Transaction.
(r) “Covered Employee” means an Employee who is a “covered employee”
under Section 162(m)(3) of the Code.
(s) “Director” means a member of the Board or the board of directors
of any Related Entity.
(t) “Disability” means as defined under the long-term disability
policy of the Company or the Related Entity to which the Grantee provides
services regardless of whether the Grantee is covered by such policy. If the
Company or the Related Entity to which the Grantee provides service does not
have a long-term disability plan in place, “Disability” means that a Grantee is
unable to carry out the responsibilities and functions of the position held by
the Grantee by reason of any medically determinable physical or mental
impairment for a period of
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not less than ninety (90) consecutive days. A Grantee will not be considered
to have incurred a Disability unless he or she furnishes proof of such
impairment sufficient to satisfy the Administrator in its discretion.
(u) “Dividend Equivalent Right” means a right entitling the Grantee to
compensation measured by dividends paid with respect to Common Stock.
(v) “Employee” means any person, including an Officer or Director, who
is in the employ of the Company or any Related Entity, subject to the control
and direction of the Company or any Related Entity as to both the work to be
performed and the manner and method of performance. The payment of a director153s
fee by the Company or a Related Entity shall not be sufficient to constitute
“employment” by the Company.
(w) “Exchange Act” means the Securities Exchange Act of 1934, as
amended.
(x) “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 National Market
or The Nasdaq SmallCap 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
(or, if no closing sales price or closing bid was reported on that date, as
applicable, on the last trading date such closing sales price or closing bid was
reported), as reported in The Wall Street Journal or such other source as the
Administrator deems reliable;
(ii) If the Common Stock is regularly quoted on an automated quotation system
(including the OTC Bulletin Board) or by a recognized securities dealer, but
selling prices are not reported, the Fair Market Value of a share of Common
Stock shall be the mean between the high bid and low asked prices for the Common
Stock on the date of determination (or, if no such prices were reported on that
date, on the last date such prices were reported), 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 of the
type described in (i) and (ii), above, the Fair Market Value thereof shall be
determined by the Administrator in good faith.
(y) “Grantee” means an Employee, who receives an Award under the Plan.
(z) “Immediate Family” means any child, stepchild, grandchild, parent,
stepparent, grandparent, spouse, former spouse, sibling, niece, nephew,
mother-in-law, father-in-law, son-in law, daughter-in-law, brother-in-law, or
sister-in-law, including adoptive relationships, any person sharing the
Grantee153s household (other than a tenant or employee), a trust in which these
persons (or the Grantee) have more than fifty percent (50%) of the beneficial
interest, a foundation in which these persons (or the Grantee) control the
management of assets,
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and any other entity in which these persons (or the Grantee) own more than
fifty percent (50%) of the voting interests.
(aa) “Non-Qualified Stock Option” means an Option not intended to
qualify as an Incentive Stock Option.
(bb) “Officer” means a person who is an officer of the Company or a
Related Entity within the meaning of Section 16 of the Exchange Act and the
rules and regulations promulgated thereunder.
(cc) “Option” means an option to purchase Shares pursuant to an Award
Agreement granted under the Plan.
(dd) “Parent” means a “parent corporation”, whether now or hereafter
existing, as defined in Section 424(e) of the Code.
(ee) “Performance-Based Compensation” means compensation qualifying as
“performance-based compensation” under Section 162(m) of the Code.
(ff) “Performance Units” means an Award which may be earned in whole
or in part based upon attainment of performance criteria established by the
Administrator and which may be settled for cash, Shares or other securities or a
combination of cash, Shares or other securities as established by the
Administrator.
(gg) “Plan” means this 2005 Acquisition Equity Incentive Plan.
(hh) “Related Entity” means any Parent or Subsidiary of the Company
and any business, corporation, partnership, limited liability company or other
entity in which the Company or a Parent or a Subsidiary of the Company holds a
substantial ownership interest, directly or indirectly.
(ii) “Replaced” means that pursuant to a Corporate Transaction the
Award is replaced with a comparable stock award or a cash incentive program of
the Company, the successor entity (if applicable) or Parent of either of them
which preserves the compensation element of such Award existing at the time of
the Corporate Transaction and provides for subsequent payout in accordance with
the same (or a more favorable) vesting schedule applicable to such Award. The
determination of Award comparability shall be made by the Administrator and its
determination shall be final, binding and conclusive.
(jj) “Restricted Stock” means Shares issued under the Plan to the
Grantee for such consideration, if any, and subject to such restrictions on
transfer, rights of first refusal, repurchase provisions, forfeiture provisions,
and other terms and conditions as established by the Administrator.
(kk) “Restricted Stock Unit” means an interest in the Company
represented by a Share, which is subject to such restrictions on transfer,
rights of first refusal, repurchase provisions, forfeiture provisions, and other
terms and conditions as established by the Administrator.
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(ll) “Rule 16b-3” means Rule 16b-3 promulgated under the Exchange Act
or any successor thereto.
(mm) “SAR” means a stock appreciation right entitling the Grantee to
Shares, as established by the Administrator, measured by appreciation in the
value of Common Stock.
(nn) “Share” means a share of the Common Stock.
(oo) “Subsidiary” means a “subsidiary corporation”, whether now or
hereafter existing, as defined in Section 424(f) of the Code.
3. Stock Subject to the Plan.
(a) Subject to the provisions of Section 10 below, the maximum aggregate
number of Shares which may be issued pursuant to all Awards is 2,800,000(1)
Shares. The Shares to be issued pursuant to Awards may be authorized, but
unissued, or reacquired Common Stock.
(b) Any Shares covered by an Award (or portion of an Award) which is
forfeited, canceled or expires (whether voluntarily or involuntarily) shall be
deemed not to have been issued for purposes of determining the maximum aggregate
number of Shares which may be issued under the Plan. Shares that actually have
been issued under the Plan pursuant to an Award shall not be returned to the
Plan and shall not become available for future issuance under the Plan, except
that if unvested Shares are forfeited, or repurchased by the Company at the
lower of their original purchase price or their Fair Market Value at the time of
repurchase, such Shares shall become available for future grant under the Plan.
4. Administration of the Plan.
(a) Plan Administrator.
(i) Administration with Respect to Directors and Officers. With
respect to grants of Awards who are also Officers or Directors of the Company,
the Plan shall be administered by a Committee designated by the Board, which
Committee shall be constituted in such a manner as to satisfy the Applicable
Laws and to permit such grants and related transactions under the Plan to be
exempt from Section 16(b) of the Exchange Act in accordance with Rule 16b-3.
Once appointed, such Committee shall continue to serve in its designated
capacity until otherwise directed by the Board.
(ii) Administration With Respect to Consultants and Other Employees.
With respect to grants of Awards to Employees who are neither Directors nor
Officers of the Company, the Plan shall be administered by a Committee
designated by the Board, which Committee shall be constituted in such a manner
as to satisfy the Applicable Laws. Once appointed, such Committee shall continue
to serve in its designated capacity until otherwise
(1) 16,000,000 Shares originally authorized for issuance. On October 16,
2006, the Company153s Common Stock was subject to an 8:1 reverse split, in
connection with which the number of Shares authorized for issuance was
automatically reduced to 2,000,000 Shares. On May 2, 2010, the Board approved an
increase of 800,000 Shares to the total number of Shares authorized for
issuance.
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directed by the Board. The Board may authorize one or more Officers to grant
such Awards and may limit such authority as the Board determines from time to
time.
(iii) Administration With Respect to Covered Employees.
Notwithstanding the foregoing, grants of Awards to any Covered Employee intended
to qualify as Performance-Based Compensation shall be made only by a Committee
(or subcommittee of a Committee) which is comprised solely of two or more
Directors eligible to serve on a committee making Awards qualifying as
Performance-Based Compensation. In the case of such Awards granted to Covered
Employees, references to the “Administrator” or to a “Committee” shall be deemed
to be references to such Committee or subcommittee.
(iv) Administration Errors. In the event an Award is granted in a
manner inconsistent with the provisions of this subsection (a), such Award shall
be presumptively valid as of its grant date to the extent permitted by the
Applicable Laws.
(b) Powers of the Administrator. Subject to Applicable Laws and the
provisions of the Plan (including any other powers given to the Administrator
hereunder), and except as otherwise provided by the Board, the Administrator
shall have the authority, in its discretion:
(i) to select the Employees, to whom Awards may be granted from time to time
hereunder;
(ii) to determine whether and to what extent Awards are granted hereunder;
(iii) to determine the number of Shares or the amount of other consideration
to be covered by each Award granted hereunder;
(iv) to approve forms of Award Agreements for use under the Plan;
(v) to determine the terms and conditions of any Award granted hereunder;
(vi) to amend the terms of any outstanding Award granted under the Plan,
provided that (A) any amendment that would adversely affect the Grantee153s rights
under an outstanding Award shall not be made without the Grantee153s written
consent, (B) the reduction of the exercise price of any Option awarded under the
Plan shall be subject to stockholder approval and (C) canceling an Option at a
time when its exercise price exceeds the Fair Market Value of the underlying
Shares, in exchange for another Award shall be subject to stockholder approval,
unless the cancellation and exchange occurs in connection with a Corporate
Transaction;
(vii) to construe and interpret the terms of the Plan and Awards, including
without limitation, any notice of award or Award Agreement, granted pursuant to
the Plan;
(viii) to establish additional terms, conditions, rules or procedures to
accommodate the rules or laws of applicable non-U.S. jurisdictions and to afford
Grantees
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favorable treatment under such rules or laws; provided, however, that no
Award shall be granted under any such additional terms, conditions, rules or
procedures with terms or conditions which are inconsistent with the provisions
of the Plan; and
(ix) to take such other action, not inconsistent with the terms of the Plan,
as the Administrator deems appropriate.
(c) Indemnification. In addition to such other rights of
indemnification as they may have as members of the Board or as Officers or
Employees of the Company or a Related Entity, members of the Board and any
Officers or Employees of the Company or a Related Entity to whom authority to
act for the Board, the Administrator or the Company is delegated shall be
defended and indemnified by the Company to the extent permitted by law on an
after-tax basis against all reasonable expenses, including attorneys153 fees,
actually and necessarily incurred in connection with the defense of any claim,
investigation, action, suit or proceeding, or in connection with any appeal
therein, to which they or any of them may be a party by reason of any action
taken or failure to act under or in connection with the Plan, or any Award
granted hereunder, and against all amounts paid by them in settlement thereof
(provided such settlement is approved by the Company) or paid by them in
satisfaction of a judgment in any such claim, investigation, action, suit or
proceeding, except in relation to matters as to which it shall be adjudged in
such claim, investigation, action, suit or proceeding that such person is liable
for gross negligence, bad faith or intentional misconduct; provided, however,
that within thirty (30) days after the institution of such claim, investigation,
action, suit or proceeding, such person shall offer to the Company, in writing,
the opportunity at the Company153s expense to handle and defend the same.
5. Eligibility. Awards only may be granted to Employees. An Employee
who has been granted an Award may, if otherwise eligible, be granted additional
Awards. Awards may be granted to such Employees who are residing in non-U.S.
jurisdictions as the Administrator may determine from time to time.
6. Terms and Conditions of Awards.
(a) Type of Awards. The Administrator is authorized under the Plan to
award any type of arrangement to an Employee that is not inconsistent with the
provisions of the Plan and that by its terms involves or might involve the
issuance of (i) Shares, (ii) cash or (iii) an Option or similar right with a
fixed or variable price related to the Fair Market Value of the Shares and with
an exercise or conversion privilege related to the passage of time, the
occurrence of one or more events, or the satisfaction of performance criteria or
other conditions. Such awards include, without limitation, Options, Restricted
Stock, Performance Units and an Award may consist of one such security or
benefit, or two (2) or more of them in any combination or alternative.
(b) Designation of Award. Each Award shall be designated in the Award
Agreement. In the case of an Option, the Option shall be designated as a
Non-Qualified Stock Option.
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(c) Conditions of Award. Subject to the terms of the Plan, the
Administrator shall determine the provisions, terms, and conditions of each
Award including, but not limited to, the Award vesting schedule, repurchase
provisions, rights of first refusal, forfeiture provisions, form of payment
(cash, Shares, or other consideration) upon settlement of the Award, payment
contingencies, and satisfaction of any performance criteria. The performance
criteria established by the Administrator may be based on any one of, or
combination of, the following: (i) increase in share price, (ii) earnings per
share, (iii) total stockholder return, (iv) operating margin, (v) gross margin,
(vi) return on equity, (vii) return on assets, (viii) return on investment, (ix)
operating income, (x) net operating income, (xi) pre-tax profit, (xii) cash
flow, (xiii) revenue, (xiv) expenses, (xv) earnings before interest, taxes and
depreciation, (xvi) economic value added, (xvii) market share, (xviii) personal
management objectives, and (xix) other measures of performance selected by the
Administrator. Partial achievement of the specified criteria may result in a
payment or vesting corresponding to the degree of achievement as specified in
the Award Agreement.
(d) Deferral of Award Payment. The Administrator may establish one or
more programs under the Plan to permit selected Grantees the opportunity to
elect to defer receipt of consideration upon exercise of an Award, satisfaction
of performance criteria, or other event that absent the election would entitle
the Grantee to payment or receipt of Shares or other consideration under an
Award. The Administrator may establish the election procedures, the timing of
such elections, the mechanisms for payments of, and accrual of interest or other
earnings, if any, on amounts, Shares or other consideration so deferred, and
such other terms, conditions, rules and procedures that the Administrator deems
advisable for the administration of any such deferral program.
(e) Separate Programs. The Administrator may establish one or more
separate programs under the Plan for the purpose of issuing particular forms of
Awards to one or more classes of Grantees on such terms and conditions as
determined by the Administrator from time to time.
(f) Individual Limitations on Awards. The maximum number of Shares
with respect to which Awards may be granted to any Grantee in any fiscal year of
the Company shall be six hundred twenty-five thousand (625,000) Shares. The
foregoing limitation shall be adjusted proportionately in connection with any
change in the Company153s capitalization pursuant to Section 10, below. To the
extent required by Section 162(m) of the Code or the regulations thereunder, in
applying the foregoing limitation with respect to a Grantee, if any Awards are
canceled, the canceled Awards shall continue to count against the maximum number
of Shares with respect to which Awards may be granted to the Grantee. For this
purpose, the repricing of an Option (or in the case of a SAR, the base amount on
which the stock appreciation is calculated is reduced to reflect a reduction in
the Fair Market Value of the Common Stock) shall be treated as the cancellation
of the existing Option or SAR and the grant of a new Option or SAR. If the
vesting or receipt of Shares under the Award is deferred to a later date, any
amount (whether denominated in Shares or cash) paid in addition to the original
number of Shares subject to the Award will not be treated as an increase in the
number of Shares subject to the Award if the additional amount is based either
on a reasonable rate of interest or on one or more predetermined actual
investments such that the amount payable by the Company at the later date
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will be based on the actual rate of return of a specific investment
(including any decrease as well as any increase in the value of an investment).
(g) Early Exercise. The Award Agreement may, but need not, include a
provision whereby the Grantee may elect at any time while an Employee, Director
or Consultant to exercise any part or all of the Award prior to full vesting of
the Award. Any unvested Shares received pursuant to such exercise may be subject
to a repurchase right in favor of the Company or a Related Entity or to any
other restriction the Administrator determines to be appropriate.
(h) Term of Award. The term of each Award shall be the term stated in
the Award Agreement, provided, however, that the term of an Award shall be no
more than eight (8) years from the date of grant thereof.
(i) Transferability of Awards. Awards shall be transferable by will
and by the laws of descent and distribution, and during the lifetime of the
Grantee, by gift or pursuant to a domestic relations order to members of the
Grantee153s Immediate Family to the extent and in the manner determined by the
Administrator. Notwithstanding the foregoing, the Grantee may designate a
beneficiary of the Grantee153s Award in the event of the Grantee153s death on a
beneficiary designation form provided by the Administrator.
(j) Time of Granting Awards. The date of grant of an Award shall for
all purposes be the date on which the Administrator makes the determination to
grant such Award, or such later date as is determined by the Administrator.
7. Award Exercise or Purchase Price, Consideration and Taxes.
(a) Exercise or Purchase Price. The exercise or purchase price, if
any, for an Award shall be as follows:
(i) In the case of a Non-Qualified Stock Option, the per Share exercise price
shall be not less than one hundred percent (100%) of the Fair Market Value per
Share on the date of grant.
(ii) In the case of Awards intended to qualify as Performance-Based
Compensation, the exercise or purchase price, if any, shall be not less than one
hundred percent (100%) of the Fair Market Value per Share on the date of grant.
(iii) In the case of other Awards, such price as is determined by the
Administrator.
(b) Consideration. Subject to Applicable Laws, the consideration to be
paid for the Shares to be issued upon exercise or purchase of an Award including
the method of payment, shall be determined by the Administrator. In addition to
any other types of consideration the Administrator may determine, the
Administrator is authorized to accept as consideration for Shares issued under
the Plan the following, provided that the portion of the consideration equal to
the par value of the Shares must be paid in cash or other legal consideration
permitted by the Delaware General Corporation Law:
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(i) cash;
(ii) check;
(iii) surrender of Shares or delivery of a properly executed form of
attestation of ownership of Shares as the Administrator may require (including
withholding of Shares otherwise deliverable upon exercise of the Award) which
have a Fair Market Value on the date of surrender or attestation equal to the
aggregate exercise price of the Shares as to which said Award shall be
exercised, provided, however, that Shares acquired under the Plan or any other
equity compensation plan or agreement of the Company must have been held by the
Grantee for a period of more than six (6) months;
(iv) with respect to Options, payment through a broker-dealer sale and
remittance procedure pursuant to which the Grantee (A) shall provide written
instructions to a Company designated brokerage firm to effect the immediate sale
of some or all of the purchased Shares and remit to the Company sufficient funds
to cover the aggregate exercise price payable for the purchased Shares and (B)
shall provide written directives to the Company to deliver the certificates for
the purchased Shares directly to such brokerage firm in order to complete the
sale transaction; or
(v) any combination of the foregoing methods of payment.
(c) Taxes. No Shares shall be delivered under the Plan to any Grantee
or other person until such Grantee or other person has made arrangements
acceptable to the Administrator for the satisfaction of any non-U.S., federal,
state, or local income and employment tax withholding obligations, including,
without limitation, obligations incident to the receipt of Shares or the
disqualifying disposition of Shares received on exercise of an Incentive Stock
Option. Upon exercise of an Award the Company shall withhold or collect from
Grantee an amount sufficient to satisfy such tax obligations.
8. Exercise of Award.
(a) Procedure for Exercise; Rights as a Stockholder.
(i) Any Award granted hereunder shall be exercisable at such times and under
such conditions as determined by the Administrator under the terms of the Plan
and specified in the Award Agreement.
(ii) An Award shall be deemed to be exercised when written notice of such
exercise has been given to the Company in accordance with the terms of the Award
by the person entitled to exercise the Award and full payment for the Shares
with respect to which the Award is exercised, including, to the extent selected,
use of the broker-dealer sale and remittance procedure to pay the purchase price
as provided in Section 7(b)(iv).
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(b) Exercise of Award Following Termination of Continuous Active
Service.
(i) An Award may not be exercised after the termination date of such Award
set forth in the Award Agreement and may be exercised following the termination
of a Grantee153s Continuous Active Service only to the extent provided in the
Award Agreement.
(ii) Where the Award Agreement permits a Grantee to exercise an Award
following the termination of the Grantee153s Continuous Active Service for a
specified period, the Award shall terminate to the extent not exercised on the
last day of the specified period or the last day of the original term of the
Award, whichever occurs first.
9. Conditions Upon Issuance of Shares.
(a) Shares shall not be issued pursuant to the exercise of an Award unless
the exercise of such Award and the issuance and delivery of such Shares pursuant
thereto shall comply with all Applicable Laws, and shall be further subject to
the approval of counsel for the Company with respect to such compliance.
(b) As a condition to the exercise of an Award, the Company may require the
person exercising such Award to represent and warrant at the time of any such
exercise that the Shares are being purchased only for investment and without any
present intention to sell or distribute such Shares if, in the opinion of
counsel for the Company, such a representation is required by any Applicable
Laws.
10. Adjustments Upon Changes in Capitalization. Subject to any
required action by the stockholders of the Company, the number of Shares covered
by each outstanding Award, and the number of Shares which have been authorized
for issuance under the Plan but as to which no Awards have yet been granted or
which have been returned to the Plan, the exercise or purchase price of each
such outstanding Award, the maximum number of Shares with respect to which
Awards may be granted to any Grantee in any fiscal year of the Company, as well
as any other terms that the Administrator determines require adjustment shall be
proportionately adjusted for (i) any increase or decrease in the number of
issued Shares resulting from a stock split, reverse stock split, stock dividend,
combination or reclassification of the Shares, or similar transaction affecting
the Shares, (ii) any other increase or decrease in the number of issued Shares
effected without receipt of consideration by the Company, or (iii) as the
Administrator may determine in its discretion, any other transaction with
respect to Common Stock including a corporate merger, consolidation, acquisition
of property or stock, separation (including a spin-off or other distribution of
stock or property), reorganization, liquidation (whether partial or complete) or
any similar transaction; 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
and the Administrator153s determination shall be final, binding and conclusive.
Except as the Administrator determines, 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 hereof shall be made with respect to,
the number or price of Shares subject to an Award.
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11. Corporate Transactions.
(a) Termination of Award to Extent Not Assumed in Corporate
Transaction. Effective upon the consummation of a Corporate Transaction, all
outstanding Awards under the Plan shall terminate. However, all such Awards
shall not terminate to the extent they are Assumed in connection with the
Corporate Transaction.
(b) Acceleration of Award Upon Corporate Transaction. Except as
provided otherwise in an individual Award Agreement, in the event of a Corporate
Transaction, for the portion of each Award that is neither Assumed nor Replaced,
such portion of the Award shall automatically become fully vested and
exercisable and be released from any repurchase or forfeiture rights (other than
repurchase rights exercisable at fair market value) for all of the Shares at the
time represented by such portion of the Award, immediately prior to the
specified effective date of such Corporate Transaction.
12. Effective Date and Term of Plan. The Plan shall become effective
upon its adoption by the Board. It shall continue in effect for a term of ten
(10) years unless sooner terminated. Subject to Applicable Laws, Awards may be
granted under the Plan upon its becoming effective.
13. Amendment, Suspension or Termination of the Plan.
(a) The Board may at any time amend, suspend or terminate the Plan; provided,
however, that no such amendment shall be made without the approval of the
Company153s stockholders to the extent such approval is required by Applicable
Laws, or if such amendment would change any of the provisions of Section
4(b)(vi) or this Section 13(a).
(b) No Award may be granted during any suspension of the Plan or after
termination of the Plan.
(c) No suspension or termination of the Plan (including termination of the
Plan under Section 12, above) shall adversely affect any rights under Awards
already granted to a Grantee.
14. Reservation of Shares.
(a) The Company, during the term of the Plan, will at all times reserve and
keep available such number of Shares as shall be sufficient to satisfy the
requirements of the Plan.
(b) The inability of the Company to obtain authority from any regulatory body
having jurisdiction, which authority is deemed by the Company153s counsel to be
necessary to the lawful issuance and sale of any Shares hereunder, shall relieve
the Company of any liability in respect of the failure to issue or sell such
Shares as to which such requisite authority shall not have been obtained.
15. No Effect on Terms of Employment/Consulting Relationship. The Plan
shall not confer upon any Grantee any right with respect to the Grantee153s
Continuous Active Service, nor
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shall it interfere in any way with his or her right or the right of the
Company or any Related Entity to terminate the Grantee153s Continuous Active
Service at any time, with or without Cause, and with or without notice. The
ability of the Company or any Related Entity to terminate the employment of a
Grantee who is employed at will is in no way affected by its determination that
the Grantee153s Continuous Active Service has been terminated for Cause for the
purposes of this Plan.
16. No Effect on Retirement and Other Benefit Plans. Except as
specifically provided in a retirement or other benefit plan of the Company or a
Related Entity, Awards shall not be deemed compensation for purposes of
computing benefits or contributions under any retirement plan of the Company or
a Related Entity, and shall not affect any benefits under any other benefit plan
of any kind or any benefit plan subsequently instituted under which the
availability or amount of benefits is related to level of compensation. The Plan
is not a “Retirement Plan” or “Welfare Plan” under the Employee Retirement
Income Security Act of 1974, as amended.
17. Unfunded Obligation. Grantees shall have the status of general
unsecured creditors of the Company. Any amounts payable to Grantees pursuant to
the Plan shall be unfunded and unsecured obligations for all purposes,
including, without limitation, Title I of the Employee Retirement Income
Security Act of 1974, as amended. Neither the Company nor any Related Entity
shall be required to segregate any monies from its general funds, or to create
any trusts, or establish any special accounts with respect to such obligations.
The Company shall retain at all times beneficial ownership of any investments,
including trust investments, which the Company may make to fulfill its payment
obligations hereunder. Any investments or the creation or maintenance of any
trust or any Grantee account shall not create or constitute a trust or fiduciary
relationship between the Administrator, the Company or any Related Entity and a
Grantee, or otherwise create any vested or beneficial interest in any Grantee or
the Grantee153s creditors in any assets of the Company or a Related Entity. The
Grantees shall have no claim against the Company or any Related Entity for any
changes in the value of any assets that may be invested or reinvested by the
Company with respect to the Plan.
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