{"id":38364,"date":"2015-09-17T11:25:58","date_gmt":"2015-09-17T16:25:58","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-legal\/contracts\/uncategorized\/1999-stock-option-and-incentive-plan-red-hat-inc.html"},"modified":"2015-09-17T11:25:58","modified_gmt":"2015-09-17T16:25:58","slug":"1999-stock-option-and-incentive-plan-red-hat-inc","status":"publish","type":"corporate_contracts","link":"https:\/\/corporate.findlaw.com\/contracts\/compensation\/1999-stock-option-and-incentive-plan-red-hat-inc.html","title":{"rendered":"1999 Stock Option and Incentive Plan &#8211; Red Hat Inc."},"content":{"rendered":"<pre>                             RED HAT, INC.\n\n                      1999 STOCK OPTION AND INCENTIVE PLAN\n\n1.       PURPOSE AND ELIGIBILITY\n\n         The purpose of this 1999 Stock Option and Incentive Plan (the \"PLAN\")\nof Red Hat, Inc. (the \"COMPANY\") is to provide stock options and other equity\ninterests in the Company (each an \"AWARD\") to employees, officers, directors,\nconsultants and advisors of the Company and its Subsidiaries, all of whom are\neligible to receive Awards under the Plan. Any person to whom an Award has been\ngranted under the Plan is called a \"PARTICIPANT.\" Additional definitions are\ncontained in Section 8.\n\n2.       ADMINISTRATION\n\n         a. ADMINISTRATION BY BOARD OF DIRECTORS. The Plan will be administered\nby the Board of Directors of the Company (the \"BOARD\"). The Board, in its sole\ndiscretion, shall have the authority to grant and amend Awards, to adopt, amend\nand repeal rules relating to the Plan and to interpret and correct the\nprovisions of the Plan and any Award. All decisions by the Board shall be final\nand binding on all interested persons. Neither the Company nor any member of the\nBoard shall be liable for any action or determination relating to the Plan.\n\n         b. APPOINTMENT OF COMMITTEES. To the extent permitted by applicable\nlaw, the Board may delegate any or all of its powers under the Plan to one or\nmore committees or subcommittees of the Board (a \"COMMITTEE\"). All references in\nthe Plan to the \"BOARD\" shall mean such Committee or the Board.\n\n         c. DELEGATION TO EXECUTIVE OFFICERS. To the extent permitted by\napplicable law, the Board may delegate to one or more executive officers of the\nCompany the power to grant Awards and exercise such other powers under the Plan\nas the Board may determine, PROVIDED THAT the Board shall fix the maximum number\nof Awards to be granted and the maximum number of shares issuable to any one\nParticipant pursuant to Awards granted by such executive officers.\n\n3.       STOCK AVAILABLE FOR AWARDS\n\n         a. NUMBER OF SHARES. Subject to adjustment under Section 3(c), the\naggregate number of shares of Common Stock, $.0001 par value, of the Company\n(the \"COMMON STOCK\") that may be issued pursuant to the Plan is 6,500,000\nshares. If any Award expires, or is terminated, surrendered or forfeited, in\nwhole or in part, the unissued Common Stock covered by such Award shall again be\navailable for the grant of Awards under the Plan.\n\n         b. PER-PARTICIPANT LIMIT. Subject to adjustment under Section 3(c), no\nParticipant may be granted Awards during any one fiscal year to purchase more\nthan 3,250,000 shares of Common Stock.\n                                      -2-\n\n\n\n         C. ADJUSTMENT TO COMMON STOCK. In the event of any stock split, stock\ndividend, extraordinary cash dividend, recapitalization, reorganization, merger,\nconsolidation, combination, exchange of shares, liquidation, spin-off, split-up,\nor other similar change in capitalization or event (not including the Company's\nstock dividend approved by the Board of Directors on June 2, 1999), (i) the\nnumber and class of securities available for Awards under the Plan and the\nper-Participant share limit, (ii) the number and class of securities, vesting\nschedule and exercise price per share subject to each outstanding Option, (iii)\nthe repurchase price per security subject to repurchase, and (iv) the terms of\neach other outstanding stock-based Award shall be adjusted by the Company (or\nsubstituted Awards may be made) to the extent the Board shall determine, in good\nfaith, that such an adjustment (or substitution) is appropriate.\n\n4.       STOCK OPTIONS\n\n         a. GENERAL. The Board may grant options to purchase Common Stock (each,\nan \"OPTION\" and determine the number of shares of Common Stock to be covered by\neach Option, the exercise price of each Option and the conditions and\nlimitations applicable to the exercise of each Option and the Common Stock\nissued upon the exercise of each Option, including vesting provisions,\nrepurchase provisions and restrictions relating to applicable federal or state\nsecurities laws, as it considers advisable.\n\n         b. INCENTIVE STOCK OPTIONS. An Option that the Board intends to be an\n\"incentive stock option\" as defined in Section 422 of the Code (an \"INCENTIVE\nSTOCK OPTION\") shall be granted only to employees of the Company and shall be\nsubject to and shall be construed consistently with the requirements of Section\n422 of the Code. The Board and the Company shall have no liability if an Option\nor any part thereof that is intended to be an Incentive Stock Option does not\nqualify as such. An Option or any part thereof that does not qualify as an\nIncentive Stock Option is referred to herein as a \"NONSTATUTORY STOCK OPTION\".\n\n         c. EXERCISE PRICE. The Board shall establish the exercise price (or\ndetermine the method by which the exercise price shall be determined) at the\ntime each Option is granted and specify it in the applicable option agreement.\n\n         d. DURATION OF OPTIONS. Each Option shall be exercisable at such times\nand subject to such terms and conditions as the Board may specify in the\napplicable option agreement.\n\n         e. EXERCISE OF OPTION. Options may be exercised only by delivery to the\nCompany of a written notice of exercise signed by the proper person together\nwith payment in full as specified in Section 4(f) for the number of shares for\nwhich the Option is exercised.\n\n         f. PAYMENT UPON EXERCISE. Common Stock purchased upon the exercise of\nan Option shall be paid for by one or any combination of the following forms of\npayment:\n\n                  (i)  by check payable to the order of the Company;\n\n                  (ii) except as otherwise explicitly provided in the applicable\noption agreement, and only if the Common Stock is then publicly traded, delivery\nof an irrevocable and\n\n\n                                      -3-\n\n\nunconditional undertaking by a creditworthy broker to deliver promptly to the\nCompany sufficient funds to pay the exercise price, or delivery by the\nParticipant to the Company of a copy of irrevocable and unconditional\ninstructions to a creditworthy broker to deliver promptly to the Company cash or\na check sufficient to pay the exercise price; or\n\n                  (iii) to the extent explicitly provided in the applicable\noption agreement, by (x) delivery of shares of Common Stock owned by the\nParticipant valued at fair market value (as determined by the Board or as\ndetermined pursuant to the applicable option agreement), (y) delivery of a\npromissory note of the Participant to the Company (and delivery to the Company\nby the Participant of a check in an amount equal to the par value of the shares\npurchased), or (z) payment of such other lawful consideration as the Board may\ndetermine.\n\n5.       RESTRICTED STOCK\n\n         A. GRANTS. The Board may grant Awards entitling recipients to acquire\nshares of Common Stock, subject to (i) delivery to the Company by the\nParticipant of a check in an amount at least equal to the par value of the\nshares purchased, and (ii) the right of the Company to repurchase all or part of\nsuch shares at their issue price or other stated or formula price from the\nParticipant in the event that conditions specified by the Board in the\napplicable Award are not satisfied prior to the end of the applicable\nrestriction period or periods established by the Board for such Award (each, a\n\"RESTRICTED STOCK AWARD\").\n\n         B. TERMS AND CONDITIONS. The Board shall determine the terms and\nconditions of any such Restricted Stock Award. Any stock certificates issued in\nrespect of a Restricted Stock Award shall be registered in the name of the\nParticipant and, unless otherwise determined by the Board, deposited by the\nParticipant, together with a stock power endorsed in blank, with the Company (or\nits designee). After the expiration of the applicable restriction periods, the\nCompany (or such designee) shall deliver the certificates no longer subject to\nsuch restrictions to the Participant or, if the Participant has died, to the\nbeneficiary designated by a Participant, in a manner determined by the Board, to\nreceive amounts due or exercise rights of the Participant in the event of the\nParticipant's death (the \"DESIGNATED BENEFICIARY\"). In the absence of an\neffective designation by a Participant, Designated Beneficiary shall mean the\nParticipant's estate.\n\n6.       OTHER STOCK-BASED AWARDS\n\n         The Board shall have the right to grant other Awards based upon the\nCommon Stock having such terms and conditions as the Board may determine,\nincluding, without limitation, the grant of shares based upon certain\nconditions, the grant of securities convertible into Common Stock and the grant\nof stock appreciation rights, phantom stock awards or stock units.\n\n7.       GENERAL PROVISIONS APPLICABLE TO AWARDS\n\n         a. TRANSFERABILITY OF AWARDS. Except as the Board may otherwise\ndetermine or provide in an Award, Awards shall not be sold, assigned,\ntransferred, pledged or otherwise encumbered by the person to whom they are\ngranted, either voluntarily or by operation of law, except by will or the laws\nof descent and distribution, and, during the life of the Participant, shall\n\n\n                                      -4-\n\n\nbe exercisable only by the Participant. References to a Participant, to the\nextent relevant in the context, shall include references to authorized\ntransferees.\n\n         b. DOCUMENTATION. Each Award under the Plan shall be evidenced by a\nwritten instrument in such form as the Board shall determine or as executed by\nan officer of the Company pursuant to authority delegated by the Board. Each\nAward may contain terms and conditions in addition to those set forth in the\nPlan PROVIDED THAT such terms and conditions do not contravene the provisions of\nthe Plan.\n\n         c. BOARD DISCRETION. The terms of each type of Award need not be\nidentical, and the Board need not treat Participants uniformly.\n\n         d. TERMINATION OF STATUS. The Board shall determine the effect on an\nAward of the disability, death, retirement, authorized leave of absence or other\nchange in the employment or other status of a Participant and the extent to\nwhich, and the period during which, the Participant, or the Participant's legal\nrepresentative, conservator, guardian or Designated Beneficiary, may exercise\nrights under the Award.\n\n         e. ACQUISITION OF THE COMPANY\n\n                  (i) CONSEQUENCES OF AN ACQUISITION. Unless otherwise expressly\nprovided in the applicable Option or Award, upon the occurrence of an\nAcquisition, the Board or the board of directors of the surviving or acquiring\nentity (as used in this Section 7(e)(i), also the \"BOARD\", shall, as to\noutstanding Awards (on the same basis or on different bases, as the Board shall\nspecify), make appropriate provision for the continuation of such Awards by the\nCompany or the assumption of such Awards by the surviving or acquiring entity\nand by substituting on an equitable basis for the shares then subject to such\nAwards either (a) the consideration payable with respect to the outstanding\nshares of Common Stock in connection with the Acquisition, (b) shares of stock\nof the surviving or acquiring corporation or (c) such other securities as the\nBoard deems appropriate, the fair market value of which (as determined by the\nBoard in its sole discretion) shall not materially differ from the fair market\nvalue of the shares of Common Stock subject to such Awards immediately preceding\nthe Acquisition. In addition to or in lieu of the foregoing, with respect to\noutstanding Options, the Board may, upon written notice to the affected\noptionees, provide that one or more Options must be exercised, to the extent\nthen exercisable or to be exercisable as a result of the Acquisition, within a\nspecified number of days of the date of such notice, at the end of which period\nsuch Options shall terminate; or terminate one or more Options in exchange for a\ncash payment equal to the excess of the fair market value (as determined by the\nBoard in its sole discretion) of the shares subject to such Options (to the\nextent then exercisable or to be exercisable as a result of the Acquisition)\nover the exercise price thereof.\n\n                  (ii) ACQUISITION DEFINED. An \"Acquisition\" shall mean: (x) any\nmerger or consolidation after which the voting securities of the Company\noutstanding immediately prior thereto represent (either by remaining outstanding\nor by being converted into voting securities of the surviving or acquiring\nentity) less than 50% of the combined voting power of the voting securities of\nthe Company or such surviving or acquiring entity outstanding immediately after\n                                      -5-\n\n\nsuch event; or (y) any sale of all or substantially all of the assets or capital\nstock of the Company (other than in a spin-off or similar transaction) or (z)\nany other acquisition of the business of the Company, as determined by the\nBoard.\n\n                  (iii) ASSUMPTION OF OPTIONS UPON CERTAIN EVENTS. In connection\nwith a merger or consolidation of an entity with the Company or the acquisition\nby the Company of property or stock of an entity, the Board may grant Awards\nunder the Plan in substitution for stock and stock-based awards issued by such\nentity or an affiliate thereof. The substitute Awards shall be granted on such\nterms and conditions as the Board considers appropriate in the circumstances.\n\n                  (iv) POOLING-OF INTERESTS-ACCOUNTING. If the Company proposes\nto engage in an Acquisition intended to be accounted for as a\npooling-of-interests, and in the event that the provisions of this Plan or of\nany Award hereunder, or any actions of the Board taken in connection with such\nAcquisition, are determined by the Company's or the acquiring company's\nindependent public accountants to cause such Acquisition to fail to be accounted\nfor as a pooling-of-interests, then such provisions or actions shall be amended\nor rescinded by the Board, without the consent of any Participant, to be\nconsistent with pooling-of-interests accounting treatment for such Acquisition.\n\n                  (v) PARACHUTE AWARDS. If, in connection with an\nAcquisition, a tax under Section 4999 of the Code would be imposed on the\nParticipant (after taking into account the exceptions set forth in Sections\n280G(b)(4) and 280G(b)(5) of the Code), then the number of Awards which shall\nbecome exercisable, realizable or vested as provided in such section shall be\nreduced (or delayed), to the minimum extent necessary, so that no such tax\nwould be imposed on the Participant (the Awards not becoming so accelerated,\nrealizable or vested, the \"PARACHUTE AWARDS\"; PROVIDED, HOWEVER, that if the\n\"AGGREGATE PRESENT VALUE\" of the Parachute Awards would exceed the tax that,\nbut for this sentence, would be imposed on the Participant under Section 4999\nof the Code in connection with the Acquisition, then the Awards shall become\nimmediately exercisable, realizable and vested without regard to the\nprovisions of this sentence. For purposes of the preceding sentence, the\n\"AGGREGATE PRESENT VALUE\" of an Award shall be calculated on an after-tax\nbasis (other than taxes imposed by Section 4999 of the Code) and shall be\nbased on economic principles rather than the principles set forth under\nSection 280G of the Code and the regulations promulgated thereunder. All\ndeterminations required to be made under this Section 7(e)(v) shall be made\nby the Company.\n\n         f. WITHHOLDING. Each Participant shall pay to the Company, or make\nprovisions satisfactory to the Company for payment of, any taxes required by law\nto be withheld in connection with Awards to such Participant no later than the\ndate of the event creating the tax liability. The Board may allow Participants\nto satisfy such tax obligations in whole or in part by transferring shares of\nCommon Stock, including shares retained from the Award creating the tax\nobligation, valued at their fair market value (as determined by the Board or as\ndetermined pursuant to the applicable option agreement). The Company may, to the\nextent permitted by law, deduct any such tax obligations from any payment of any\nkind otherwise due to a Participant.\n\n                                      -6-\n\n\n         g. AMENDMENT OF AWARDS. The Board may amend, modify or terminate any\noutstanding Award including, but not limited to, substituting therefor another\nAward of the same or a different type, changing the date of exercise or\nrealization, and converting an Incentive Stock Option to a Nonstatutory Stock\nOption, PROVIDED THAT, except as otherwise provided in Section 7(e)(iv), the\nParticipant's consent to such action shall be required unless the Board\ndetermines that the action, taking into account any related action, would not\nmaterially and adversely affect the Participant.\n\n         h. CONDITIONS ON DELIVERY OF STOCK. The Company will not be obligated\nto deliver any shares of Common Stock pursuant to the Plan or to remove\nrestrictions from shares previously delivered under the Plan until (i) all\nconditions of the Award have been met or removed to the satisfaction of the\nCompany, (ii) in the opinion of the Company's counsel, all other legal matters\nin connection with the issuance and delivery of such shares have been satisfied,\nincluding any applicable securities laws and any applicable stock exchange or\nstock market rules and regulations, and (iii) the Participant has executed and\ndelivered to the Company such representations or agreements as the Company may\nconsider appropriate to satisfy the requirements of any applicable laws, rules\nor regulations.\n\n         i. ACCELERATION. The Board may at any time provide that any Options\nshall become immediately exercisable in full or in part, that any Restricted\nStock Awards shall be free of some or all restrictions, or that any other\nstock-based Awards may become exercisable in full or in part or free of some or\nall restrictions or conditions, or otherwise realizable in full or in part, as\nthe case may be, despite the fact that the foregoing actions may (i) cause the\napplication of Sections 280G and 4999 of the Code if a change in control of the\nCompany occurs, or (ii) disqualify all or part of the Option as an Incentive\nStock Option.\n\n8.       MISCELLANEOUS\n\n         a.  DEFINITIONS.\n\n                  (i) \"COMPANY\" for purposes of eligibility under the Plan,\nshall include any present or future subsidiary corporations of Red Hat, Inc., as\ndefined in Section 424(f) of the Code (a \"SUBSIDIARY\"), and any present or\nfuture parent corporation of Red Hat, Inc., as defined in Section 424(e) of the\nCode. For purposes of Awards other than Incentive Stock Options, the term\n\"COMPANY\" shall include any other business venture in which the Company has a\ndirect or indirect significant interest, as determined by the Board in its sole\ndiscretion.\n\n                  (ii) \"CODE\" means the Internal Revenue Code of 1986, as\namended, and any regulations promulgated thereunder.\n\n                  (iii) \"EMPLOYEE\" for purposes of eligibility under the Plan\nshall include a person to whom an offer of employment has been extended by the\nCompany.\n\n         b. NO RIGHT TO EMPLOYMENT OR OTHER STATUS. No person shall have any\nclaim or right to be granted an Award, and the grant of an Award shall not be\nconstrued as giving a Participant the right to continued employment or any other\nrelationship with the Company.\n\n\n                                      -7-\n\n\nThe Company expressly reserves the right at any time to dismiss or otherwise\nterminate its relationship with a Participant free from any liability or claim\nunder the Plan.\n\n         c. NO RIGHTS AS STOCKHOLDER. Subject to the provisions of the\napplicable Award, no Participant or Designated Beneficiary shall have any rights\nas a stockholder with respect to any shares of Common Stock to be distributed\nwith respect to an Award until becoming the record holder thereof.\n\n         d. EFFECTIVE DATE AND TERM OF PLAN. The Plan shall become effective\nupon adoption by the Board. No Awards shall be granted under the Plan after\nthe completion of ten years from the date on which the Plan was adopted by\nthe Board, but Awards previously granted may extend beyond that date.\n\n         e. AMENDMENT OF PLAN. The Board may amend, suspend or terminate the\nPlan or any portion thereof at any time.\n\n         f. GOVERNING LAW. The provisions of the Plan and all Awards made\nhereunder shall be governed by and interpreted in accordance with the laws of\nDelaware, without regard to any applicable conflicts of law.\n\nAdopted by the Board of Directors on June 2, 1999.\nApproved by the stockholders on June 3, 1999.\n\n<\/pre>\n","protected":false},"template":"","meta":{"_acf_changed":false,"_stopmodifiedupdate":true,"_modified_date":"","_cloudinary_featured_overwrite":false},"corporate_contracts_companies":[8659],"corporate_contracts_industries":[9510],"corporate_contracts_types":[9539,9545],"class_list":["post-38364","corporate_contracts","type-corporate_contracts","status-publish","hentry","corporate_contracts_companies-red-hat-inc","corporate_contracts_industries-technology__programming","corporate_contracts_types-compensation","corporate_contracts_types-compensation__esp"],"acf":[],"_links":{"self":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts\/38364","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts"}],"about":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/types\/corporate_contracts"}],"wp:attachment":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/media?parent=38364"}],"wp:term":[{"taxonomy":"corporate_contracts_companies","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_companies?post=38364"},{"taxonomy":"corporate_contracts_industries","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_industries?post=38364"},{"taxonomy":"corporate_contracts_types","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_types?post=38364"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}