Exhibit 99.1
ATHEROS COMMUNICATIONS, INC.
2004 STOCK INCENTIVE PLAN
(Adopted by the Board on January 14, 2004 and amended and restated on December 13, 2008)
Table of Contents
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SECTION 1. ESTABLISHMENT AND PURPOSE |
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SECTION 2. DEFINITIONS |
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(a)Affiliate |
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(b)Award |
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(c)Board of Directors |
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(d)Change in Control |
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(e)Code |
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(f)Committee |
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(g)Company |
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(h)Consultant |
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(i)Employee |
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(j)Exchange Act |
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(k)Exercise Price |
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(l)Fair Market Value |
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(m)ISO |
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(n)Nonstatutory Option or NSO |
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(o)Offeree |
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(p)Option |
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(q)Optionee |
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(r)Outside Director |
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(s)Parent |
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(t)Participant |
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(u)Plan |
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(v)Purchase Price |
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(w)Restricted Share |
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(x)Restricted Share Agreement |
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(y)SAR |
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(z)SAR Agreement |
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(aa)Service |
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(bb)Share |
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(cc)Stock |
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(dd)Stock Option Agreement |
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(ee)Stock Unit |
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(ff)Stock Unit Agreement |
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(gg)Subsidiary |
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(hh)Total and Permanent Disability |
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SECTION 3. ADMINISTRATION |
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(a) Committee Composition |
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(b) Committee for Non-Officer Grants |
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(c) Committee Procedures |
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(d) Committee Responsibilities |
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SECTION 4. ELIGIBILITY |
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(a) General Rule |
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(b) Automatic Grants to Outside Directors |
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(c) Ten-Percent Stockholders |
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(d) Attribution Rules |
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(e) Outstanding Stock |
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SECTION 5. STOCK SUBJECT TO PLAN |
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(a) Basic Limitation |
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(b) Award Limitation |
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(c) Additional Shares |
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SECTION 6. RESTRICTED SHARES |
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(a) Restricted Stock Agreement |
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(b) Payment for Awards |
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(c) Vesting |
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(d) Voting and Dividend Rights |
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(e) Restrictions on Transfer of Shares |
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SECTION 7. TERMS AND CONDITIONS OF OPTIONS |
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(a) Stock Option Agreement |
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(b) Number of Shares |
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(c) Exercise Price |
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(d) Withholding Taxes |
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(e) Exercisability and Term |
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(f) Exercise of Options |
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(g) Effect of Change in Control |
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(h) Leaves of Absence |
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(i) No Rights as a Stockholder |
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(j) Modification, Extension and Renewal of Options |
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(k) Restrictions on Transfer of Shares |
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(l) Buyout Provisions |
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SECTION 8. PAYMENT FOR SHARES |
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(a) General Rule |
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(b) Surrender of Stock |
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(c) Services Rendered |
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(d) Cashless Exercise |
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(e) Exercise/Pledge |
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(f) Promissory Note |
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(g) Other Forms of Payment |
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(h) Limitations under Applicable Law |
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SECTION 9. STOCK APPRECIATION RIGHTS |
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(a) SAR Agreement |
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(b) Number of Shares |
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(c) Exercise Price |
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(d) Exercisability and Term |
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(e) Effect of Change in Control |
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(f) Exercise of SARs |
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(g) Modification or Assumption of SARs |
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SECTION 10. STOCK UNITS |
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(a) Stock Unit Agreement |
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(b) Payment for Awards |
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(c) Vesting Conditions |
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(d) Voting and Dividend Rights |
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(e) Form and Time of Settlement of Stock Units |
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(f) Death of Recipient |
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(g) Creditors Rights |
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SECTION 11. ADJUSTMENT OF SHARES |
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(a) Adjustments |
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(b) Dissolution or Liquidation |
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(c) Reorganizations |
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(d) Reservation of Rights |
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SECTION 12. DEFERRAL OF AWARDS |
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SECTION 13. AWARDS UNDER OTHER PLANS |
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SECTION 14. PAYMENT OF DIRECTORS FEES IN SECURITIES |
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(a) Effective Date |
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(b) Elections to Receive NSOs, Restricted Shares or Stock Units |
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(c) Number and Terms of NSOs, Restricted Shares or Stock Units |
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SECTION 15. LEGAL AND REGULATORY REQUIREMENTS |
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SECTION 16. WITHHOLDING TAXES |
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(a) General |
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(b) Share Withholding |
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SECTION 17. LIMITATION ON PARACHUTE PAYMENTS |
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(a) Scope of Limitation |
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(b) Basic Rule |
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(c) Reduction of Payments |
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(d) Related Corporations |
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SECTION 18. NO EMPLOYMENT RIGHTS |
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SECTION 19. QUALIFYING PERFORMANCE CRITERIA |
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SECTION 20. DURATION AND AMENDMENTS |
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(a) Term of the Plan |
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(b) Right to Amend or Terminate the Plan |
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(c) Effect of Amendment or Termination |
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SECTION 21. EXECUTION |
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ATHEROS COMMUNICATIONS, INC.
2004 STOCK INCENTIVE PLAN
SECTION 1. ESTABLISHMENT AND PURPOSE.
The Plan was adopted by the Board of Directors on January 14, 2004, effective as of the date
of the initial offering of Stock to the public pursuant to a registration statement filed by the
Company with the Securities and Exchange Commission. The purpose of the Plan is to promote the
long-term success of the Company and the creation of stockholder value by (a) encouraging
Employees, Outside Directors and Consultants to focus on critical long-range objectives, (b)
encouraging the attraction and retention of Employees, Outside Directors and Consultants with
exceptional qualifications and (c) linking Employees, Outside Directors and Consultants directly to
stockholder interests through increased stock ownership. The Plan seeks to achieve this purpose by
providing for Awards in the form of restricted shares, stock units, options (which may constitute
incentive stock options or nonstatutory stock options) or stock appreciation rights.
SECTION 2. DEFINITIONS.
(a) Affiliate shall mean any entity other than a Subsidiary, if the Company and/or one of
more Subsidiaries own not less than 50% of such entity.
(b) Award shall mean any award of an Option, a SAR, a Restricted Share or a Stock Unit under
the Plan.
(c) Board of Directors shall mean the Board of Directors of the Company, as constituted from
time to time.
(d) Change in Control shall mean the occurrence of any of the following events:
(i) A change in the composition of the Board of Directors occurs, as a result of which fewer
than one-half of the incumbent directors are directors who either:
(A) Had been directors of the Company on the look-back date (as defined below) (the
original directors); or
(B) Were elected, or nominated for election, to the Board of Directors with the affirmative
votes of at least a majority of the aggregate of the original directors who were still in office at
the time of the election or nomination and the directors whose election or nomination was
previously so approved (the continuing directors); or
(ii) Any person (as defined below) who by the acquisition or aggregation of securities, is
or becomes the beneficial owner (as defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of securities of the Company representing 50% or more of the combined voting power of
the Companys then outstanding securities ordinarily (and apart from rights accruing under special
circumstances) having the right to vote at elections of directors (the
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Base Capital Stock);
except that any change in the relative beneficial ownership of the Companys securities by any
person resulting solely from a reduction in the aggregate number of outstanding shares of Base
Capital Stock, and any decrease thereafter in such persons ownership of securities, shall be
disregarded until such person increases in any manner, directly or indirectly, such persons
beneficial ownership of any securities of the Company; or
(iii) The consummation of a merger or consolidation of the Company with or into another entity
or any other corporate reorganization, if persons who were not stockholders of the Company
immediately prior to such merger, consolidation or other reorganization own immediately after such
merger, consolidation or other reorganization 50% or more of the voting power of the outstanding
securities of each of (A) the continuing or surviving entity and (B) any direct or indirect parent
corporation of such continuing or surviving entity; or
(iv) The sale, transfer or other disposition of all or substantially all of the Companys
assets.
For purposes of subsection (d)(i) above, the term look-back date shall mean the later of (1)
January 14, 2004 or (2) the date 24 months prior to the date of the event that may constitute a
Change in Control.
For purposes of subsection (d)(ii)) above, the term person shall have the same meaning as
when used in Sections 13(d) and 14(d) of the Exchange Act but shall exclude (1) a trustee or other
fiduciary holding securities under an employee benefit plan maintained by the Company or a Parent
or Subsidiary and (2) a corporation owned directly or indirectly by the stockholders of the Company
in substantially the same proportions as their ownership of the Stock.
Any other provision of this Section 2(d) notwithstanding, a transaction shall not constitute a
Change in Control if its sole purpose is to change the state of the Companys incorporation or to
create a holding company that will be owned in substantially the same proportions by the persons
who held the Companys securities immediately before such transaction, and a Change in Control
shall not be deemed to occur if the Company files a registration statement with the Securities and
Exchange Commission for the initial offering of Stock to the public.
(e) Code shall mean the Internal Revenue Code of 1986, as amended.
(f) Committee shall mean the Compensation Committee as designated by the Board of Directors,
which is authorized to administer the Plan, as described in Section 3 hereof.
(g) Company shall mean Atheros Communications, Inc.
(h) Consultant shall mean a consultant or advisor who provides bona fide services to the
Company, a Parent, a Subsidiary or an Affiliate as an independent contractor or a member of the
board of directors of a Parent or a Subsidiary who is not an Employee. Service as a Consultant
shall be considered Service for all purposes of the Plan.
(i) Employee shall mean any individual who is a common-law employee of the Company, a Parent
or a Subsidiary.
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(j) Exchange Act shall mean the Securities Exchange Act of 1934, as amended.
(k) Exercise Price shall mean, in the case of an Option, the amount for which one Common
Share may be purchased upon exercise of such Option, as specified in the applicable Stock Option
Agreement. Exercise Price, in the case of a SAR, shall mean an amount, as specified in the
applicable SAR Agreement, which is subtracted from the Fair Market Value of one Common Share in
determining the amount payable upon exercise of such SAR.
(l) Fair Market Value with respect to a Share, shall mean the market price of one Share of
Stock, determined by the Committee as follows:
(i) If the Stock was traded over-the-counter on the date in question but was not traded on The
Nasdaq Stock Market, then the Fair Market Value shall be equal to the last transaction price quoted
for such date by the OTC Bulletin Board or, if not so quoted, shall be equal to the mean between
the last reported representative bid and asked prices quoted for such date by the principal
automated inter-dealer quotation system on which the Stock is quoted or, if the Stock is not quoted
on any such system, by the Pink Sheets published by the National Quotation Bureau, Inc.;
(ii) If the Stock was traded on The Nasdaq Stock Market, then the Fair Market Value shall be
equal to the last reported sale price quoted for such date by The Nasdaq Stock Market;
(iii) If the Stock was traded on a United States stock exchange on the date in question, then
the Fair Market Value shall be equal to the closing price reported for such date by the applicable
composite-transactions report; and
(iv) If none of the foregoing provisions is applicable, then the Fair Market Value shall be
determined by the Committee in good faith on such basis as it deems appropriate.
In all cases, the determination of Fair Market Value by the Committee shall be conclusive and
binding on all persons.
(m) ISO shall mean an employee incentive stock option described in Section 422 of the Code.
(n) Nonstatutory Option or NSO shall mean an employee stock option that is not an ISO.
(o) Offeree shall mean an individual to whom the Committee has offered the right to acquire
Shares under the Plan (other than upon exercise of an Option).
(p) Option shall mean an ISO or Nonstatutory Option granted under the Plan and entitling the
holder to purchase Shares.
(q) Optionee shall mean an individual or estate who holds an Option or SAR.
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(r) Outside Director shall mean a member of the Board of Directors who is not a common-law
employee of, or paid consultant to, the Company, a Parent or a Subsidiary. Service as an Outside
Director shall be considered Service for all purposes of the Plan, except as provided in Section
4(a).
(s) Parent shall mean any corporation (other than the Company) in an unbroken chain of
corporations ending with the Company, if each of the corporations other than the Company owns stock
possessing 50% or more of the total combined voting power of all classes of stock in one of the
other corporations in such chain. A corporation that attains the status of a Parent on a date after
the adoption of the Plan shall be a Parent commencing as of such date.
(t) Participant shall mean an individual or estate who holds an Award.
(u) Plan shall mean this 2004 Stock Incentive Plan of Atheros Communications, Inc.,
as amended from time to time.
(v) Purchase Price shall mean the consideration for which one Share may be acquired under
the Plan (other than upon exercise of an Option), as specified by the Committee.
(w) Restricted Share shall mean a Share awarded under the Plan.
(x) Restricted Share Agreement shall mean the agreement between the Company and the
recipient of a Restricted Share which contains the terms, conditions and restrictions pertaining to
such Restricted Shares.
(y) SAR shall mean a stock appreciation right granted under the Plan.
(z) SAR Agreement shall mean the agreement between the Company and an Optionee which
contains the terms, conditions and restrictions pertaining to his or her SAR.
(aa) Service shall mean service as an Employee, Consultant or Outside Director.
(bb) Share shall mean one share of Stock, as adjusted in accordance with Section 8 (if
applicable).
(cc) Stock shall mean the Common Stock of the Company.
(dd) Stock Option Agreement shall mean the agreement between the Company and an Optionee
that contains the terms, conditions and restrictions pertaining to his Option.
(ee) Stock Unit shall mean a bookkeeping entry representing the equivalent of one Share, as
awarded under the Plan.
(ff) Stock Unit Agreement shall mean the agreement between the Company and the recipient of
a Stock Unit which contains the terms, conditions and restrictions pertaining to such Stock Unit.
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(gg) Subsidiary shall mean any corporation, if the Company and/or one or more other
Subsidiaries own not less than 50% of the total combined voting power of all classes of outstanding
stock of such corporation. A corporation that attains the status of a Subsidiary on a date after
the adoption of the Plan shall be considered a Subsidiary commencing as of such date.
(hh) Total and Permanent Disability shall mean that the Optionee is unable to engage in any
substantial gainful activity by reason of any medically determinable physical or mental impairment
that can be expected to result in death or that has lasted, or can be expected to last, for a
continuous period of not less than 12 months.
SECTION 3. ADMINISTRATION.
(a) Committee Composition. The Plan shall be administered by the Committee. The Committee
shall consist of two or more directors of the Company, who shall be appointed by the Board. In
addition, the composition of the Committee shall satisfy (i) such requirements as the Securities
and Exchange Commission may establish for administrators acting under plans intended to qualify for
exemption under Rule 16b-3 (or its successor) under the Exchange Act; and (ii) such requirements as
the Internal Revenue Service may establish for outside directors acting under plans intended to
qualify for exemption under Section 162(m)(4)(C) of the Code.
(b) Committee for Non-Officer Grants. The Board may also appoint one or more separate
committees of the Board, each composed of one or more directors of the Company who need not satisfy
the requirements of Section 3(a), who may administer the Plan with respect to Employees who are not
considered officers or directors of the Company under Section 16 of the Exchange Act, may grant
Awards under the Plan to such Employees and may determine all terms of such grants. Within the
limitations of the preceding sentence, any reference in the Plan to the Committee shall include
such committee or committees appointed pursuant to the preceding sentence. The Board of Directors
may also authorize one or more officers of the Company to designate Employees, other
than officers under Section 16 of the Exchange Act, to receive Awards and/or to determine the
number of such Awards to be received by such persons; provided, however, that the Board of
Directors shall specify the total number of Awards that such officers may so award.
(c) Committee Procedures. The Board of Directors shall designate one of the members of the
Committee as chairman. The Committee may hold meetings at such times and places as it shall
determine. The acts of a majority of the Committee members present at meetings at which a quorum
exists, or acts reduced to or approved in writing by all Committee members, shall be valid acts of
the Committee.
(d) Committee Responsibilities. Subject to the provisions of the Plan, the Committee shall
have full authority and discretion to take the following actions:
(i) To interpret the Plan and to apply its provisions;
(ii) To adopt, amend or rescind rules, procedures and forms relating to the Plan;
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(iii) To authorize any person to execute, on behalf of the Company, any instrument required to
carry out the purposes of the Plan;
(iv) To determine when Shares are to be awarded or offered for sale and when Options are to be
granted under the Plan;
(v) To select the Offerees and Optionees;
(vi) To determine the number of Shares to be offered to each Offeree or to be made subject to
each Option;
(vii) To prescribe the terms and conditions of each award or sale of Shares, including
(without limitation) the Purchase Price, the vesting of the award (including accelerating the
vesting of awards, either at the time of the award or sale or thereafter, without the consent of
the Offeree or Optionee) and to specify the provisions of the Restricted Stock Agreement relating
to such award or sale;
(viii) To prescribe the terms and conditions of each Option, including (without limitation)
the Exercise Price, the vesting or duration of the Option (including accelerating the vesting of
the Option), to determine whether such Option is to be classified as an ISO or as a Nonstatutory
Option, and to specify the provisions of the Stock Option Agreement relating to such Option;
(ix) To amend any outstanding Restricted Stock Agreement or Stock Option Agreement, subject to
applicable legal restrictions and to the consent of the Offeree or Optionee
who entered into such agreement if the Offerees or Optionees rights or obligations would be
adversely affected;
(x) To prescribe the consideration for the grant of each Option or other right under the Plan
and to determine the sufficiency of such consideration;
(xi) To determine the disposition of each Option or other right under the Plan in the event of
an Optionees or Offerees divorce or dissolution of marriage;
(xii) To determine whether Options or other rights under the Plan will be granted in
replacement of other grants under an incentive or other compensation plan of an acquired business;
(xiii) To correct any defect, supply any omission, or reconcile any inconsistency in the Plan,
any Stock Option Agreement or any Restricted Stock Agreement; and
(xiv) To take any other actions deemed necessary or advisable for the administration of the
Plan.
Subject to the requirements of applicable law, the Committee may designate persons other than
members of the Committee to carry out its responsibilities and may prescribe such conditions and
limitations as it may deem appropriate, except that the Committee may not delegate its authority
with regard to the selection for participation of or the granting of Options or other
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rights under
the Plan to persons subject to Section 16 of the Exchange Act. All decisions, interpretations and
other actions of the Committee shall be final and binding on all Offerees, all Optionees, and all
persons deriving their rights from an Offeree or Optionee. No member of the Committee shall be
liable for any action that he has taken or has failed to take in good faith with respect to the
Plan, any Option, or any right to acquire Shares under the Plan.
SECTION 4. ELIGIBILITY.
(a) General Rule. Only Employees shall be eligible for the grant of ISOs. Only Employees,
Consultants and Outside Directors shall be eligible for the grant of Restricted Shares, Stock
Units, Nonstatutory Options or SARs.
(b) Automatic Grants to Outside Directors
(i) Each Outside Director who first joins the Board of Directors after the effective date of
the Plan, and who was not previously an Employee, shall receive a Nonstatutory Option, subject to
approval of the Plan by the Companys stockholders, to purchase 37,500 Shares (subject to
adjustment under Section 11) on the first business day after his or her election to the Board of
Directors. Twenty-five percent (25%) of the Shares subject to each Option
granted under this Section 4(b)(i) shall vest and become exercisable on the first anniversary
of the date of grant. The balance of the Shares subject to such Option (i.e. the remaining
seventy-five percent (75%)) shall vest and become exercisable monthly over a three-year period
beginning on the day which is one month after the first anniversary of the date of grant, at a
monthly rate of 2.0833% of the total number of Shares subject to such Options. Notwithstanding the
foregoing, each such Option shall become vested if a Change in Control occurs with respect to the
Company during the Optionees Service.
(ii) On the first business day following the conclusion of each regular annual meeting of the
Companys stockholders, commencing with the annual meeting occurring after the adoption of the
Plan, each Outside Director who was not elected to the Board for the first time at such meeting and
who will continue serving as a member of the Board of Directors thereafter shall receive an Option
to purchase 7,500 Shares (subject to adjustment under Section 11), provided that such Outside
Director has served on the Board of Directors for at least six months. Each Option granted under
the proceeding sentence of this Section 4(b)(ii) to a director first elected to the Board on or
after November 1, 2003 shall vest and become exercisable ratably over forty-eight months. Each
Option granted under this Section 4(b)(ii) to a director who was first elected to the Board prior
to November 1, 2003 shall vest and become exercisable ratably over 12 months. Notwithstanding the
foregoing, each Option granted under this Section 4(b)(ii) shall become vested if a Change in
Control occurs with respect to the Company during the Optionees Service.
(iii) The Exercise Price of all Nonstatutory Options granted to an Outside Director under this
Section 4(b) shall be equal to 100% of the Fair Market Value of a Share on the date of grant,
payable in one of the forms described in Section 8(a), (b) or (d).
(iv) All Nonstatutory Options granted to an Outside Director under this Section 4(b) shall
terminate on the earlier of (A) the day before the tenth anniversary of the date
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of grant of such
Options or (B) the date twelve months after the termination of such Outside Directors Service for
any reason; provided, however, that any such Options that are not vested upon the termination of
the Outside Directors Service for any reason shall terminate immediately and may not be exercised.
(c) Ten-Percent Stockholders. An Employee who owns more than 10% of the total combined voting
power of all classes of outstanding stock of the Company, a Parent or Subsidiary shall not be
eligible for the grant of an ISO unless such grant satisfies the requirements of Section 422(c)(5)
of the Code.
(d) Attribution Rules. For purposes of Section 4(c) above, in determining stock ownership, an
Employee shall be deemed to own the stock owned, directly or indirectly, by or for such Employees
brothers, sisters, spouse, ancestors and lineal descendants. Stock owned, directly or indirectly,
by or for a corporation, partnership, estate or trust shall be deemed to be owned proportionately
by or for its stockholders, partners or beneficiaries.
(e) Outstanding Stock. For purposes of Section 4(c) above, outstanding stock shall include all stock actually
issued and outstanding immediately after the grant. Outstanding stock shall not include shares
authorized for issuance under outstanding options held by the Employee or by any other person.
SECTION 5. STOCK SUBJECT TO PLAN.
(a) Basic Limitation. Shares offered under the Plan shall be authorized but unissued Shares
or treasury Shares. The maximum aggregate number of Options, SARs, Stock Units and Restricted
Shares awarded under the Plan shall not exceed 2,250,000 Shares, plus (x) any Shares remaining
available for grant of awards under the Companys 1998 Stock Incentive Plan on the effective date
of the Plan (including Shares subject to outstanding options under the Companys 1998 Stock
Incentive Plan on the effective date of this Plan that are subsequently forfeited or terminate for
any other reason before being exercised and unvested Shares that are forfeited pursuant to such
plan after the effective date of this Plan) and (y) an annual increase on the first day of each
fiscal year during the term of the Plan, beginning January 1, 2005, in each case in an amount equal
to the lesser of (i) 3,750,000 Shares, (ii) 5% of the outstanding Shares on the last day of the
immediately preceding year, or (iii) an amount determined by the Board. The limitations of this
Section 5(a) shall be subject to adjustment pursuant to Section 11. The number of Shares that are
subject to Options or other rights outstanding at any time under the Plan shall not exceed the
number of Shares which then remain available for issuance under the Plan. The Company, during the
term of the Plan, shall at all times reserve and keep available sufficient Shares to satisfy the
requirements of the Plan.
(b) Award Limitation. Subject to the provisions of Section 11, no Participant may receive
Options or SARs under the Plan in any calendar year that relate to more than 937,500 Shares, except
that grants to a Participant in the calendar year in which his or her service first commences shall
not relate to more than 2,250,000 Shares. Subject to the provisions of Section 11, no Participant
may receive Restricted Shares or Stock Units under the Plan in any calendar year that relate to
more than 937,500 Shares, except that grants to a Participant in the calendar year in which his or
her service first commences shall not relate to more than 2,250,000 Shares.
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(c) Additional Shares. If Restricted Shares or Shares issued upon the exercise of Options are
forfeited, then such Shares shall again become available for Awards under the Plan. If Stock Units,
Options or SARs are forfeited or terminate for any other reason before being exercised, then the
corresponding Shares shall again become available for Awards under the Plan. If Stock Units are
settled, then only the number of Shares (if any) actually issued in settlement of such Stock Units
shall reduce the number available under Section 5(a) and the balance shall again become available
for Awards under the Plan. If SARs are exercised, then only the number of Shares (if any) actually
issued in settlement of such SARs shall reduce the number available in Section 5(a) and the balance
shall again become available for Awards under the Plan.
SECTION 6. RESTRICTED SHARES.
(a) Restricted Stock Agreement. Each grant of Restricted Shares under the Plan shall be
evidenced by a Restricted Stock Agreement between the recipient and the Company. Such Restricted
Shares shall be subject to all applicable terms of the Plan and may be subject to any other terms
that are not inconsistent with the Plan. The provisions of the various Restricted Stock Agreements
entered into under the Plan need not be identical.
(b) Payment for Awards. Subject to the following sentence, Restricted Shares may be sold or
awarded under the Plan for such consideration as the Committee may determine, including (without
limitation) cash, cash equivalents, full-recourse promissory notes, past services and future
services. To the extent that an Award consists of newly issued Restricted Shares, the Award
recipient shall furnish consideration with a value not less than the par value of such Restricted
Shares in the form of cash, cash equivalents, or past services rendered to the Company (or a Parent
or Subsidiary), as the Committee may determine.
(c) Vesting. Each Award of Restricted Shares may or may not be subject to vesting. Vesting
shall occur, in full or in installments, upon satisfaction of the conditions specified in the
Restricted Stock Agreement. A Restricted Stock Agreement may provide for accelerated vesting in the
event of the Participants death, disability or retirement or other events. The Committee may
determine, at the time of granting Restricted Shares of thereafter, that all or part of such
Restricted Shares shall become vested in the event that a Change in Control occurs with respect to
the Company.
(d) Voting and Dividend Rights. The holders of Restricted Shares awarded under the Plan shall
have the same voting, dividend and other rights as the Companys other stockholders. A Restricted
Stock Agreement, however, may require that the holders of Restricted Shares invest any cash
dividends received in additional Restricted Shares. Such additional Restricted Shares shall be
subject to the same conditions and restrictions as the Award with respect to which the dividends
were paid.
(e) Restrictions on Transfer of Shares. Restricted Shares shall be subject to such rights of
repurchase, rights of first refusal or other restrictions as the Committee may determine. Such
restrictions shall be set forth in the applicable Restricted Stock Agreement and shall apply in
addition to any general restrictions that may apply to all holders of Shares.
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SECTION 7. TERMS AND CONDITIONS OF OPTIONS.
(a) Stock Option Agreement. Each grant of an Option under the Plan shall be evidenced by a
Stock Option Agreement between the Optionee and the Company. Such Option shall be subject to all
applicable terms and conditions of the Plan and may be subject to any other terms and conditions
which are not inconsistent with the Plan and which the Committee deems appropriate for inclusion in
a Stock Option Agreement. The Stock Option Agreement shall specify whether the Option is an ISO or
an NSO. The provisions of the various Stock Option Agreements entered into under the Plan need not
be identical. Options may be granted in consideration of a reduction in the Optionees other
compensation.
(b) Number of Shares. Each Stock Option Agreement shall specify the number of Shares that are
subject to the Option and shall provide for the adjustment of such number in accordance with
Section 11.
(c) Exercise Price. Each Stock Option Agreement shall specify the Exercise Price. The
Exercise Price of an ISO shall not be less than 100% of the Fair Market Value of a Share on the
date of grant, except as otherwise provided in 4(c), and the Exercise Price of an NSO shall not be
less 85% of the Fair Market Value of a Share on the date of grant. Notwithstanding the foregoing, a
Stock Option Agreement may specify that the exercise price of an NSO may vary in accordance with a
predetermined formula. Subject to the foregoing in this Section 7(c), the Exercise Price under any
Option shall be determined by the Committee at its sole discretion. The Exercise Price shall be
payable in one of the forms described in Section 8.
(d) Withholding Taxes. As a condition to the exercise of an Option, the Optionee shall make
such arrangements as the Committee may require for the satisfaction of any federal, state, local or
foreign withholding tax obligations that may arise in connection with such exercise. The Optionee
shall also make such arrangements as the Committee may require for the satisfaction of any federal,
state, local or foreign withholding tax obligations that may arise in connection with the
disposition of Shares acquired by exercising an Option.
(e) Exercisability and Term. Each Stock Option Agreement shall specify the date when all or
any installment of the Option is to become exercisable. The Stock Option Agreement shall also
specify the term of the Option; provided that the term of an ISO shall in no event exceed 10 years
from the date of grant (five years for Employees described in Section 4(c). A Stock Option
Agreement may provide for accelerated exercisability in the event of the Optionees death,
disability, or retirement or other events and may provide for expiration prior to the end of its
term in the event of the termination of the Optionees Service. Options may be awarded in
combination with SARs, and such an Award may provide that the Options will not be exercisable
unless the related SARs are
forfeited. Subject to the foregoing in this Section 7(e), the Committee at its sole discretion
shall determine when all or any installment of an Option is to become exercisable and when an
Option is to expire.
(f) Exercise of Options. Upon Termination of Service. Each Stock Option Agreement shall set
forth the extent to which the Optionee shall have the right to exercise the Option following
termination of the Optionees Service with the Company and its Subsidiaries, and the right to
exercise the Option of any executors or administrators of the Optionees estate or
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any person who
has acquired such Option(s) directly from the Optionee by bequest or inheritance. Such provisions
shall be determined in the sole discretion of the Committee, need not be uniform among all Options
issued pursuant to the Plan, and may reflect distinctions based on the reasons for termination of
Service.
(g) Effect of Change in Control. The Committee may determine, at the time of granting an
Option or thereafter, that such Option shall become exercisable as to all or part of the Shares
subject to such Option in the event that a Change in Control occurs with respect to the Company.
(h) Leaves of Absence. An Employees Service shall cease when such Employee ceases to be
actively employed by, or a Consultant to, the Company (or any subsidiary) as determined in the sole
discretion of the Board of Directors. For purposes of Options, Service does not terminate when an
Employee goes on a bona fide leave of absence, that was approved by the Company in writing, if the
terms of the leave provide for continued service crediting, or when continued service crediting is
required by applicable law. However, for purposes of determining whether an Option is entitled to
ISO status, an Employees Service will be treated as terminating 90 days after such Employee went
on leave, unless such Employees right to return to active work is guaranteed by law or by a
contract. Service terminates in any event when the approved leave ends, unless such Employee
immediately returns to active work. The Company determines which leaves count toward Service, and
when Service terminates for all purposes under the Plan.
(i) No Rights as a Stockholder. An Optionee, or a transferee of an Optionee, shall have no
rights as a stockholder with respect to any Shares covered by his Option until the date of the
issuance of a stock certificate for such Shares. No adjustments shall be made, except as provided
in Section 11.
(j) Modification, Extension and Renewal of Options. Within the limitations of the Plan, the
Committee may modify, extend or renew outstanding options or may accept the cancellation of
outstanding options (to the extent not previously exercised), whether or not granted hereunder, in
return for the grant of new Options for the same or a different number of Shares and at the same or
a different exercise price, or in return for the grant of the same or a different number of Shares.
The foregoing notwithstanding,
no modification of an Option shall, without the consent of the Optionee, adversely affect his
or her rights or obligations under such Option.
(k) Restrictions on Transfer of Shares. Any Shares issued upon exercise of an Option shall be
subject to such special forfeiture conditions, rights of repurchase, rights of first refusal and
other transfer restrictions as the Committee may determine. Such restrictions shall be set forth in
the applicable Stock Option Agreement and shall apply in addition to any general restrictions that
may apply to all holders of Shares.
(l) Buyout Provisions. The Committee may at any time (a) offer to buy out for a payment in
cash or cash equivalents an Option previously granted or (b) authorize an Optionee to elect to cash
out an Option previously granted, in either case at such time and based upon such terms and
conditions as the Committee shall establish.
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SECTION 8. PAYMENT FOR SHARES.
(a) General Rule. The entire Exercise Price or Purchase Price of Shares issued under the Plan
shall be payable in lawful money of the United States of America at the time when such Shares are
purchased, except as provided in Section 8(b) through Section 8(g) below.
(b) Surrender of Stock. To the extent that a Stock Option Agreement so provides, payment may
be made all or in part by surrendering, or attesting to the ownership of, Shares which have already
been owned by the Optionee or his representative. Such Shares shall be valued at their Fair Market
Value on the date when the new Shares are purchased under the Plan. The Optionee shall not
surrender, or attest to the ownership of, Shares in payment of the Exercise Price if such action
would cause the Company to recognize compensation expense (or additional compensation expense) with
respect to the Option for financial reporting purposes.
(c) Services Rendered. At the discretion of the Committee, Shares may be awarded under the
Plan in consideration of services rendered to the Company or a Subsidiary prior to the award. If
Shares are awarded without the payment of a Purchase Price in cash, the Committee shall make a
determination (at the time of the award) of the value of the services rendered by the Offeree and
the sufficiency of the consideration to meet the requirements of Section 6(b).
(d) Cashless Exercise. To the extent that a Stock Option Agreement so provides, payment may be made all or in part
by delivery (on a form prescribed by the Committee) of an irrevocable direction to a securities
broker to sell Shares and to deliver all or part of the sale proceeds to the Company in payment of
the aggregate Exercise Price.
(e) Exercise/Pledge. To the extent that a Stock Option Agreement so provides, payment may be
made all or in part by delivery (on a form prescribed by the Committee) of an irrevocable direction
to a securities broker or lender to pledge Shares, as security for a loan, and to deliver all or
part of the loan proceeds to the Company in payment of the aggregate Exercise Price.
(f) Promissory Note. To the extent that a Stock Option Agreement or Restricted Stock
Agreement so provides, payment may be made all or in part by delivering (on a form prescribed by
the Company) a full-recourse promissory note. However, the par value of the Common Shares being
purchased under the Plan, if newly issued, shall be paid in cash or cash equivalents.
(g) Other Forms of Payment. To the extent that a Stock Option Agreement or Restricted Stock
Agreement so provides, payment may be made in any other form that is consistent with applicable
laws, regulations and rules.
(h) Limitations under Applicable Law. Notwithstanding anything herein or in a Stock Option
Agreement or Restricted Stock Agreement to the contrary, payment may not be made in any form that
is unlawful, as determined by the Committee in its sole discretion.
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SECTION 9. STOCK APPRECIATION RIGHTS.
(a) SAR Agreement. Each grant of a SAR under the Plan shall be evidenced by a SAR Agreement
between the Optionee and the Company. Such SAR shall be subject to all applicable terms of the Plan
and may be subject to any other terms that are not inconsistent with the Plan. The provisions of
the various SAR Agreements entered into under the Plan need not be identical. SARs may be granted
in consideration of a reduction in the Optionees other compensation.
(b) Number of Shares. Each SAR Agreement shall specify the number of Shares to which the SAR
pertains and shall provide for the adjustment of such number in accordance with Section 11.
(c) Exercise Price. Each SAR Agreement shall specify the Exercise Price. A SAR Agreement may
specify an Exercise Price that varies in accordance with a predetermined formula while the SAR is
outstanding.
(d) Exercisability and Term. Each SAR Agreement shall specify the date when all or any
installment of the SAR is to become exercisable. The SAR Agreement shall also specify the term of
the SAR. A SAR Agreement may provide for accelerated exercisability in the event of the Optionees
death, disability or retirement or other events and may provide for expiration prior to the end of
its term in the event of the termination of the Optionees service. SARs may be awarded in
combination with Options, and such an Award may provide that the SARs will not be exercisable
unless the related Options are forfeited. A SAR may be included in an ISO only at the time of grant
but may be included in an NSO at the time of grant or thereafter. A SAR granted under the Plan may
provide that it will be exercisable only in the event of a Change in Control.
(e) Effect of Change in Control. The Committee may determine, at the time of granting a SAR or
thereafter, that such SAR shall become fully exercisable as to all Common Shares subject to such
SAR in the event that a Change in Control occurs with respect to the Company.
(f) Exercise of SARs. Upon exercise of a SAR, the Optionee (or any person having the right to
exercise the SAR after his or her death) shall receive from the Company (a) Shares, (b) cash or (c)
a combination of Shares and cash, as the Committee shall determine. The amount of cash and/or the
Fair Market Value of Shares received upon exercise of SARs shall, in the aggregate, be equal to the
amount by which the Fair Market Value (on the date of surrender) of the Shares subject to the SARs
exceeds the Exercise Price.
(g) Modification or Assumption of SARs. Within the limitations of the Plan, the Committee may
modify, extend or assume outstanding SARs or may accept the cancellation of outstanding SARs
(whether granted by the Company or by another issuer) in return for the grant of new SARs for the
same or a different number of shares and at the same or a different exercise price. The foregoing
notwithstanding, no modification of a SAR shall, without the consent of the holder, may alter or
impair his or her rights or obligations under such SAR.
SECTION 10. STOCK UNITS.
(a) Stock Unit Agreement. Each grant of Stock Units under the Plan shall be evidenced by a Stock Unit Agreement
between the recipient and the Company. Such Stock Units
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shall be subject to all applicable terms of
the Plan and may be subject to any other terms that are not inconsistent with the Plan. The
provisions of the various Stock Unit Agreements entered into under the Plan need not be identical.
Stock Units may be granted in consideration of a reduction in the recipients other compensation.
(b) Payment for Awards. To the extent that an Award is granted in the form of Stock Units, no
cash consideration shall be required of the Award recipients.
(c) Vesting Conditions. Each Award of Stock Units may or may not be subject to vesting.
Vesting shall occur, in full or in installments, upon satisfaction of the conditions specified in
the Stock Unit Agreement. A Stock Unit Agreement may provide for accelerated vesting in the event
of the Participants death, disability or retirement or other events. The Committee may determine,
at the time of granting Stock Units or thereafter, that all or part of such Stock Units shall
become vested in the event that a Change in Control occurs with respect to the Company.
(d) Voting and Dividend Rights. The holders of Stock Units shall have no voting rights.
Prior to settlement or forfeiture, any Stock Unit awarded under the Plan may, at the Committees
discretion, carry with it a right to dividend equivalents. Such right entitles the holder to be
credited with an amount equal to all cash dividends paid on one Share while the Stock Unit is
outstanding. Dividend equivalents may be converted into additional Stock Units. Settlement of
dividend equivalents may be made in the form of cash, in the form of Shares, or in a combination of
both. Prior to distribution, any dividend equivalents which are not paid shall be subject to the
same conditions and restrictions (including without limitation, any forfeiture conditions) as the
Stock Units to which they attach.
(e) Form and Time of Settlement of Stock Units. Settlement of vested Stock Units may be made
in the form of (a) cash, (b) Shares or (c) any combination of both, as determined by the Committee.
The actual number of Stock Units eligible for settlement may be larger or smaller than the number
included in the original Award, based on predetermined performance factors. Methods of converting
Stock Units into cash may include (without limitation) a method based on the average Fair Market
Value of Shares over a series of trading days. Vested Stock Units may be settled in a lump sum or
in installments. The distribution may occur or commence when all vesting conditions applicable to
the Stock Units have been satisfied or have lapsed, or it may be deferred to any later date. The
amount of a deferred distribution may be increased by an interest factor or by dividend
equivalents. Until an Award of Stock Units is settled, the number of such Stock Units shall be
subject to adjustment pursuant to Section 11.
(f) Death of Recipient. Any Stock Units Award that becomes payable after the recipients death shall be distributed
to the recipients beneficiary or beneficiaries. Each recipient of a Stock Units Award under the
Plan shall designate one or more beneficiaries for this purpose by filing the prescribed form with
the Company. A beneficiary designation may be changed by filing the prescribed form with the
Company at any time before the Award recipients death. If no beneficiary was designated or if no
designated beneficiary survives the Award recipient, then any Stock Units Award that becomes
payable after the recipients death shall be distributed to the recipients estate.
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(g) Creditors Rights. A holder of Stock Units shall have no rights other than those of a
general creditor of the Company. Stock Units represent an unfunded and unsecured obligation of the
Company, subject to the terms and conditions of the applicable Stock Unit Agreement.
SECTION 11. ADJUSTMENT OF SHARES.
(a) Adjustments. Adjustments. In the event of a subdivision of the outstanding Stock, a
declaration of a dividend payable in Shares, a declaration of a dividend payable in a form other
than Shares in an amount that has a material effect on the price of Shares, a combination or
consolidation of the outstanding Stock (by reclassification or otherwise) into a lesser number of
Shares, a recapitalization, a spin-off or a similar occurrence, the Committee shall equitably and
proportionally adjust as necessary:
(i) |
|
The number of Options, SARs, Restricted Shares and Stock Units available for future Awards
under Section 5; |
|
(ii) |
|
The limitations set forth in Sections 5(a) and (b); |
|
(iii) |
|
The number of NSOs to be granted to Outside Directors under Section 4(b); |
|
(iv) |
|
The number of Shares covered by each outstanding Option and SAR; |
|
(v) |
|
The Exercise Price under each outstanding Option and SAR; or |
|
(vi) |
|
The number of Stock Units included in any prior Award which has not yet been settled. |
Except as provided in this Section 11, a Participant shall have no rights by reason of any issue by
the Company of stock of any class or securities convertible into stock of any class, any
subdivision or consolidation of shares of stock of any class, the payment of any stock dividend or
any other increase or decrease in the number of shares of stock of any class.
(b) Dissolution or Liquidation. To the extent not previously exercised or settled, Options, SARs and Stock Units shall
terminate immediately prior to the dissolution or liquidation of the Company.
(c) Reorganizations. In the event that the Company is a party to a merger or other
reorganization, outstanding Awards shall be subject to the agreement of merger or reorganization.
Such agreement shall provide for:
(i) The continuation of the outstanding Awards by the Company, if the Company is a surviving
corporation;
(ii) The assumption of the outstanding Awards by the surviving corporation or its parent or
subsidiary;
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(iii) The substitution by the surviving corporation or its parent or subsidiary of its own
awards for the outstanding Awards;
(iv) Full exercisability or vesting and accelerated expiration of the outstanding Awards; or
(v) Settlement of the full value of the outstanding Awards in cash or cash equivalents
followed by cancellation of such Awards.
(d) Reservation of Rights. Except as provided in this Section 11, an Optionee or Offeree
shall have no rights by reason of any subdivision or consolidation of shares of stock of any class,
the payment of any dividend or any other increase or decrease in the number of shares of stock of
any class. Any issue by the Company of shares of stock of any class, or securities convertible into
shares of stock of any class, shall not affect, and no adjustment by reason thereof shall be made
with respect to, the number or Exercise Price of Shares subject to an Option. The grant of an
Option pursuant to the Plan shall not affect in any way the right or power of the Company to make
adjustments, reclassifications, reorganizations or changes of its capital or business structure, to
merge or consolidate or to dissolve, liquidate, sell or transfer all or any part of its business or
assets.
SECTION 12. DEFERRAL OF AWARDS.
The Committee (in its sole discretion) may permit or require a Participant to:
Have cash that otherwise would be paid to such Participant as a result of the exercise of a
SAR or the settlement of Stock Units credited to a deferred compensation account established for
such Participant by the Committee as an entry on the Companys books;
Have Shares that otherwise would be delivered to such Participant as a result of the exercise
of an Option or SAR converted into an equal number of Stock Units; or
Have Shares that otherwise would be delivered to such Participant as a result of the exercise
of an Option or SAR or the settlement of Stock Units converted into amounts credited to a deferred
compensation account established for such Participant by the Committee as an entry on the Companys
books. Such amounts shall be determined by reference to the Fair Market Value of such Shares as of
the date when they otherwise would have been delivered to such Participant.
A deferred compensation account established under this Section 12 may be credited with
interest or other forms of investment return, as determined by the Committee. A Participant for
whom such an account is established shall have no rights other than those of a general creditor of
the Company. Such an account shall represent an unfunded and unsecured obligation of the Company
and shall be subject to the terms and conditions of the applicable agreement between such
Participant and the Company. If the deferral or conversion of Awards is permitted or required, the
Committee (in its sole discretion) may establish rules, procedures and forms pertaining to such
Awards, including (without limitation) the settlement of deferred compensation accounts established
under this Section 12.
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SECTION 13. AWARDS UNDER OTHER PLANS.
The Company may grant awards under other plans or programs. Such awards may be settled in the
form of Shares issued under this Plan. Such Shares shall be treated for all purposes under the Plan
like Shares issued in settlement of Stock Units and shall, when issued, reduce the number of Shares
available under Section 5.
SECTION 14. PAYMENT OF DIRECTORS FEES IN SECURITIES.
(a) Effective Date. No provision of this Section 14 shall be effective unless and until the
Board has determined to implement such provision.
(b) Elections to Receive NSOs, Restricted Shares or Stock Units. An Outside Director may
elect to receive his or her annual retainer payments and/or meeting fees from the Company in the
form of cash, NSOs, Restricted Shares or Stock Units, or a combination thereof, as determined by
the Board. Such NSOs, Restricted Shares and Stock
Units shall be issued under the Plan. An election under this Section 14 shall be filed with
the Company on the prescribed form.
(c) Number and Terms of NSOs, Restricted Shares or Stock Units. The number of NSOs,
Restricted Shares or Stock Units to be granted to Outside Directors in lieu of annual retainers and
meeting fees that would otherwise be paid in cash shall be calculated in a manner determined by the
Board. The terms of such NSOs, Restricted Shares or Stock Units shall also be determined by the
Board.
SECTION 15. LEGAL AND REGULATORY REQUIREMENTS.
Shares shall not be issued under the Plan unless the issuance and delivery of such Shares
complies with (or is exempt from) all applicable requirements of law, including (without
limitation) the Securities Act of 1933, as amended, the rules and regulations promulgated
thereunder, state securities laws and regulations and the regulations of any stock exchange on
which the Companys securities may then be listed, and the Company has obtained the approval or
favorable ruling from any governmental agency which the Company determines is necessary or
advisable.
SECTION 16. WITHHOLDING TAXES.
(a) General. To the extent required by applicable federal, state, local or foreign law, a
Participant or his or her successor shall make arrangements satisfactory to the Company for the
satisfaction of any withholding tax obligations that arise in connection with the Plan. The
Company shall not be required to issue any Shares or make any cash payment under the Plan until
such obligations are satisfied.
(b) Share Withholding. The Committee may permit a Participant to satisfy all or part of his
or her withholding or income tax obligations by having the Company withhold all or a portion of any
Shares that otherwise would be issued to him or her or by surrendering all or a portion of any
Shares that he or she previously acquired. Such Shares shall be valued at their Fair Market Value
on the date when taxes otherwise would be withheld in cash. In no event may
-17-
a Participant have
Shares withheld that would otherwise be issued to him or her in excess of the number necessary to
satisfy the legally required minimum tax withholding.
SECTION 17. LIMITATION ON PARACHUTE PAYMENTS.
(a) Scope of Limitation. This Section 17 shall apply to an Award only if the independent
auditors most recently selected by the Board (the Auditors) determine that the after-tax value of
such Award to the Optionee or Offeree, taking into account the effect of all federal, state and
local income taxes, employment taxes and excise taxes applicable to the Optionee or Offeree
(including the excise tax under section 4999 of the Code), will be greater after the application of
this Section 17 than it was before application of this Section 17.
(b) Basic Rule. In the event that the Auditors determine that any payment or transfer by the
Company under the Plan to or for the benefit of a Participant (a Payment) would be nondeductible
by the Company for federal income tax purposes because of the provisions concerning excess
parachute payments in Section 280G of the Code, then the aggregate present value of all Payments
shall be reduced (but not below zero) to the Reduced Amount. For purposes of this Section 17, the
Reduced Amount shall be the amount, expressed as a present value, which maximizes the aggregate
present value of the Payments without causing any Payment to be nondeductible by the Company
because of Section 280G of the Code.
(c) Reduction of Payments. If the Auditors determine that any Payment would be nondeductible
by the Company because of Section 280G of the Code, then the Company shall promptly give the
Participant notice to that effect and a copy of the detailed calculation thereof and of the Reduced
Amount. The Company shall eliminate or reduce the Payments in the order that provides the maximum
economic benefit to the Participant (as long as after such elimination or reduction the aggregate
present value of the Payments equals the Reduced Amount). For purposes of this Section 17, present
value shall be determined in accordance with Section 280G(d)(4) of the Code. All determinations
made by the Auditors under this Section 17 shall be binding upon the Company and the Participant
and shall be made within 60 days of the date when a Payment becomes payable or transferable. As
promptly as practicable following such determination, the Company shall pay or transfer to or for
the benefit of the Participant such amounts as are then due to him or her under the Plan and shall
promptly pay or transfer to or for the benefit of the Participant in the future such amounts as
become due to him or her under the Plan.
(d) Related Corporations. For purposes of this Section 17, the term Company shall include
affiliated corporations to the extent determined by the Auditors in accordance with Section
280G(d)(5) of the Code.
SECTION 18. NO EMPLOYMENT RIGHTS.
No provision of the Plan, nor any right or Option granted under the Plan, shall be construed
to give any person any right to become, to be treated as, or to remain an Employee.
The Company and its Subsidiaries reserve the right to terminate any persons Service at any
time and for any reason, with or without notice.
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SECTION 19. QUALIFYING PERFORMANCE CRITERIA.
The number of Shares or other benefits granted, issued, retainable and/or vested under an
Award may be made subject to the attainment of performance goals for a specified period of time
relating to one or more of the following performance criteria, either individually, alternatively
or in any combination, applied to either the Company as a whole or to a business unit or
Subsidiary, either individually, alternatively or in any combination, and measured either annually
or cumulatively over a period of years, on an absolute basis or relative to a pre-established
target, to previous years results or to a designated comparison group or index, in each case as
specified by the Committee in the Award: (a) cash flow, (b) earnings per share, (c) earnings before
interest, taxes and amortization, (d) return on equity, (e) total stockholder return, (f) share
price performance, (g) return on capital, (h) return on assets or net assets, (i) revenue, (j)
income or net income, (k) operating income or net operating income, (l) operating profit or net
operating profit, (m) operating margin or profit margin, (n) return on operating revenue, (o)
return on invested capital, or (p) market segment shares (Qualifying Performance Criteria). The
Committee may appropriately adjust any evaluation of performance under a Qualifying Performance
Criteria to exclude any of the following events that occurs during a performance period: (i) asset
write-downs, (ii) litigation or claim judgments or settlements, (iii) the effect of changes in tax
law, accounting principles or other such laws or provisions affecting reported results, (iv)
accruals for reorganization and restructuring programs and (v) any extraordinary nonrecurring items
as described in Accounting Principles Board Opinion No. 30 and/or in managements discussion and
analysis of financial condition and results of operations appearing in the Companys annual report
to stockholders for the applicable year. If applicable, the Committee shall determine the
Qualifying Performance Criteria not later than the 90th day of the performance period, and shall
determine and certify, for each Participant, the extent to which the Qualifying Performance
Criteria have been met. The Committee may not in any event increase the amount of compensation
payable under the Plan upon the attainment of a Qualifying Performance Goal to a Participant who is
a covered employee within the meaning of Section 162(m) of the Code.
SECTION 20. DURATION AND AMENDMENTS.
(a) Term of the Plan. The Plan, as set forth herein, shall terminate automatically on January
13, 2014 and may be terminated on any earlier date pursuant to Subsection (b) below.
(b) Right to Amend or Terminate the Plan. The Board of Directors may amend the Plan at any
time and from time to time. Rights and obligations under any Option granted before amendment of the
Plan shall not be materially impaired by such amendment, except with consent of the person to whom
the Option was
granted. An amendment of the Plan shall be subject to the approval of the Companys
stockholders only to the extent required by applicable laws, regulations or rules.
(c) Effect of Amendment or Termination. No Shares shall be issued or sold under the Plan
after the termination thereof, except upon exercise of an Option granted prior to such termination.
The termination of the Plan, or any amendment thereof, shall not affect any Share previously issued
or any Option previously granted under the Plan.
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SECTION 21. EXECUTION.
To record the adoption of this amendment and restatement of this Plan by the Board of
Directors on March 19, 2008, the Company has caused its authorized officer to execute the same.
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ATHEROS COMMUNICATIONS, INC.
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By: |
/s/ Bruce P. Johnson
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Name: |
Bruce P. Johnson |
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Title: |
Assistant Secretary |
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