Exhibit 99.4
THIRD AMENDED AND RESTATED
INTELLON CORPORATION
2000 EMPLOYEE INCENTIVE PLAN
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BACKGROUND AND PURPOSE |
Intellon Corporation (the Corporation) hereby establishes the Amended and Restated Intellon
Corporation 2000 Employee Incentive Plan (the Plan). The purpose of this Plan is to enable the
Corporation to attract and retain key employees and consultants to provide them with an incentive
to maintain and enhance the Corporations long-term performance record. It is intended that this
purpose will best be achieved by granting eligible employees incentive stock options (ISOs),
eligible employees and consultants non-qualified stock options (NQSOs), and eligible employees
and consultants restricted stock grants under this Plan pursuant to the rules set forth in Sections
83, 162(m), 421 and 422 of the Internal Revenue Code of 1986, as amended (the Code).
The Plan shall be administered by a Committee of the Corporations Board of Directors (the
Committee). This Committee shall consist of at least two members of the Corporations Board of
Directors (the Board) each of whom shall, unless the Board determines otherwise, meet the
requirements for a Non-Employee Director as set forth in Rule 16b-3(b)(3) or any successor
provision, promulgated pursuant to the Securities Exchange Act of 1934, as amended (the Exchange
Act), and the requirements for an outside director as set form in Code Section 162(m) and the
regulations thereunder. Subject to the provisions of the Plan, the Committee shall possess the
authority, in its discretion, (a) to determine the key employees of the Corporation to whom, and
the time or times at which, ISOs, NQSOs (ISOs and NQSOs are collectively referred to as options),
and restricted stock grants (all three types of grants are collectively referred to as awards)
shall be granted; (b) to determine at the time of grant whether an award will be an ISO, a NQSO, a
restricted stock grant or a combination of these awards and the number of shares to be subject to
each award; (c) to prescribe the form of the award agreements and any appropriate terms and
conditions applicable to the awards and to make any amendments to such agreements or awards; (d) to
interpret the Plan; (e) to make and amend rules and regulations relating to the Plan; and (f) to
make all other determinations necessary or advisable for the administration of the Plan. The
Committees determinations shall be conclusive and binding. No member of the Committee shall be
liable for any action taken or decision made in good faith relating to the Plan or any award
granted hereunder.
Awards of ISOs may be granted under the Plan only to key employees of the Corporation and its
subsidiaries (which shall include all corporations of which greater than fifty percent (50%) of the
voting stock is owned by the Corporation directly or through one or more corporations of which
greater than fifty percent (50%) of the voting stock is so owned and which are consolidated with
the Corporation for purposes of financial reporting), and awards of NQSOs and restricted stock
awards may be granted under the Plan only to key employees and consultants of the Corporation and
its subsidiaries (which shall include all corporations of which greater than fifty percent (50%) of
the voting stock is owned by the Corporation directly or through one or more corporations of which
greater than fifty percent (50%) of the voting stock is so owned and which are consolidated with
the Corporation for purposes of financial reporting), which key employees and consultants have the
capability of making a substantial contribution to the success of the Corporation and its
subsidiaries.
The total number of shares of the Corporations Common Stock (par value of $.0001 per share)
available in the aggregate for awards under this Plan at any time is equal to 22,903,119 (the
Maximum Share Amount). The Maximum Share Amount shall be subject to substitution or adjustment as
provided in Section 10 of the Plan. Shares to be granted or issued under the Plan may be authorized
and unissued shares or may be treasury shares.
The total number of shares of the Corporations Common Stock available in the aggregate for
awards under this Plan at any time with respect to which ISOs may be granted shall not exceed
22,903,119 of the Corporations Common Stock (subject to substitution or adjustment as provided in
Section 10 under this Plan).
If an award expires, terminates or is canceled without being exercised or becoming vested, new
awards may thereafter be granted under the Plan covering such shares unless Rule 16b-3 provides
otherwise. No award may be granted more than 10 years after the effective date of the Plan.
5. |
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TERMS AND CONDITIONS OF ISOS |
Each ISO granted under the Plan shall be evidenced by an ISO option agreement in such form as
the Committee shall approve from time to time, which agreement shall conform with this Plan and
contain the following terms and conditions:
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(a) |
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Exercise Price. The exercise price under each option shall be equal to
or greater than the fair market value of the Common Stock at the time
such option is granted. If an option is granted to an employee who at
the time of grant owns stock possessing more than ten percent of the
total combined voting power of all classes of stock of the Corporation
(a 10-percent Shareholder), the purchase price shall be at least 110
percent of the fair market value of the stock subject to the option. |
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(b) |
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Duration of Option. The Committee shall establish a period within
which the option must be exercised provided that each option by its
terms shall not be exercisable after the expiration of ten years from
the date such option is granted. In the case of an option granted to a
10-percent Shareholder, the option by its terms shall not be
exercisable after the expiration of five years from the date such
option is granted. Any option that remains unexercised after the
latest date it could have been exercised under any provision of this
Plan shall be forfeited as of such date. |
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(c) |
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Options Nontransferable. Each option by its terms shall not be
transferable by the participant otherwise than by will or the laws of
descent and distribution and shall be exercisable, during the
participants lifetime, only by the participant, the participants
guardian or the participants legal representative, |
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(d) |
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Exercise Terms. Each option granted under the Plan shall become
exercisable at such time and upon the attainment of such goals as may
be specified by the Committee at the time of grant, which conditions
may vary from one grant to another. Options may be partially exercised
from time to time during the period extending from the time they first
become exercisable until a date established by the Committee which
shall not extend beyond the tenth anniversary (fifth anniversary for a
10-percent Shareholder) of the date of grant. |
No outstanding option may be exercised by any person if the employee to whom the option is
granted is, or at any time after the date of grant has been, engaged, directly or indirectly in
conduct that competes with the Corporation or any affiliated company. The Committee has the sole
discretion to determine whether an employees actions constitute competition with the Corporation
or any affiliated company. The Committee may impose such other terms and conditions on the
exercise of options as it deems appropriate to serve the purposes for which this Plan has been
established.
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(e) |
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Maximum Value of ISO Shares. No ISO shall be granted to an employee
under this Plan or any other ISO plan of the Corporation or its
subsidiaries to purchase shares as to which the aggregate fair market
value (determined as of the date of grant) of the Common Stock which
first become exercisable by the employee in any calendar year exceeds
$100,000. |
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(f) |
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Payment of Exercise Price. An option shall be exercised upon written
notice to the Corporation accompanied by payment in full for the shares being acquired. The payment shall be made in cash, by check or,
if the option agreement so permits, by delivery of shares of Common
Stock of the Corporation beneficially owned by the participant, duly
assigned to the Corporation with the assignment guaranteed by a bank,
trust company or member firm of the New York Stock Exchange, or by a
combination of the foregoing. Any such shares so delivered shall be
deemed to have a value per share equal to the fair market value of the shares on such date and must have been held by the participant for
more than six months. |
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TERMS AND CONDITIONS FOR NQSOS |
Each NQSO granted under the Plan shall be evidenced by a NQSO option agreement in such form as
the Committee shall approve from time to time, which agreement shall conform to this Plan and
contain the same terms and conditions as the ISO option agreement except that:
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(a) |
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Exercise Price. The Committee may grant a NQSO having an exercise
price that is less than, equal to or greater than the fair market
value of the Corporations Common Stock at the time the option is
granted; however, the exercise price of a NQSO that is intended to
qualify as performance-based compensation under Code Section 162(m)
shall equal the fair market value of the Corporations Common Stock on
the date of grant; |
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(b) |
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Percentage Restriction Not Applicable. The 10-percent Shareholder
restrictions in Sections 5(a), 5(b) and 5(d) and the maximum value of
share rules of Section 5(e) shall not apply to NQSO grants; |
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(c) |
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Duration of Option. The Committee shall establish a period within
which the option must be exercised and the requirement in Sections
5(b) and 5(d) that the each option by its terms must be exercised
within ten years from the date such option is granted (five years for
10-percent Shareholders) shall not apply; |
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(d) |
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Option Transfer. A NQSO may be transferred, to the extent permitted
under the option agreement or any administrative procedure adopted by
the Committee, by gift to family members or entities beneficially
owned by family members or other permitted transferees, in which case
the option may be exercised by the participants permitted transferee
under this section; |
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(e) |
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Exercise Terms. Each option granted under the Plan shall become
exercisable at such time and upon the attainment of such goals as may
be specified by the Committee at the time of grant, which conditions
may vary from one grant to another. Options may be partially exercised
from time to time during the period extending from the time they first
become exercisable until the expiration date of the option. |
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No outstanding option may be exercised by any person if the recipient to whom the option is
granted is, or at any time after the date of grant has been, engaged, directly or indirectly in
conduct that competes with the Corporation or any affiliated company. The Committee has the sole
discretion to determine whether a recipients actions constitute competition with the Corporation
or any affiliated company. The Committee may impose such other terms and conditions on the
exercise of options as it deems appropriate to serve the purposes for which this Plan has been
established. |
To the extent an option initially designated as an ISO exceeds the value limit of Section
5(e), it shall be deemed a NQSO and shall otherwise remain in full force and effect.
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TERMS AND CONDITIONS OF RESTRICTED STOCK GRANTS |
The Committee may, evidenced by such written agreement as the Committee shall from time to
time prescribe, grant to an eligible employee or consultant a specified number of shares of the
Corporations Common Stock which shall vest only after the attainment of the relevant restrictions
described below (restricted stock). Such restricted stock shall have an appropriate restrictive
legend affixed thereto. A restricted stock grant shall be subject to the following conditions and
restrictions:
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(a) |
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Restricted stock may not be sold or otherwise transferred by the
participant until ownership vests, provided however, to the extent
required for the restricted stock grant to be exempt under Rule 16b-3
of the Exchange Act, the restricted stock must be held by the
participant for at least six months following the date of vesting. |
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(b) |
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Ownership shall vest only following satisfaction of one or more of the
following criteria as the Committee may prescribe: |
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(i) |
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the passage of an amount of time, as the Committee in its discretion may provide, from the date of grant. |
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(ii) |
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the attainment of performance-based goals established by the
Committee as of the date of grant. The Committee may establish such
performance goals based on one or more targets, including but not
limited to the following: |
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total shareholder return |
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earnings per share growth |
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cash flow growth |
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return on equity |
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sales growth |
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increased market penetration |
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customer growth |
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(iii) |
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any other conditions the Committee may prescribe, including a non-compete requirement. |
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(c) |
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Unless the Committee shall determine otherwise, the Committee shall
grant and administer all performance-based awards under (b)(ii) above
with the intent of meeting the criteria of Code Section 162(m) for
performance-based compensation. In order to meet these criteria, the
outcome of all targeted goals shall be substantially uncertain on the
date of grant; the goals shall be established no later than 90 days
following the commencement of service to which the goals relate; the
minimum period for attaining each performance goal shall be one year;
and the Committee shall certify at the conclusion of the performance
period whether the performance-based goals have been attained. Such
certification may be made by noting the attainment of the goals in the
minutes of the Committees meetings. The maximum value of restricted
stock awards that may be granted to any participant in a calendar year
shall not exceed $10,000,000 (measured by the difference between the
amount the participant must pay for the restricted shares and the fair
market value of the shares on the date of the award). |
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(d) |
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Except as otherwise determined by the Committee, all rights and title
to restricted stock granted to a participant under the Plan shall
terminate and be forfeited to the Corporation upon failure to fulfill
all conditions and restrictions applicable to such restricted stock. |
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(e) |
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Except for the restrictions set forth in this Plan and those specified
by the Committee in any restricted stock agreement, a holder of
restricted stock shall possess all the rights of a holder of the
Corporations Common Stock, (including voting and dividend rights);
provided, however, that prior to vesting, the certificates
representing such shares of restricted stock (and the amount of any
dividends issued with respect thereto) shall be held by the
Corporation for the benefit of the participant and the participant
shall deliver to the Corporation a stock power executed in blank
covering such shares. As the shares vest, certificates representing
such shares shall be released to the participant. |
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(f) |
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All other provisions of the Plan not inconsistent with this section
shall apply to restricted stock or the holder thereof, as appropriate,
unless otherwise determined by the Committee. |
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GENERAL RESTRICTION ON ISSUANCE OF STOCK CERTIFICATES |
The Corporation shall not be required to deliver any certificate upon the grant, vesting or
exercise of any award until it has been furnished with such opinion, representation or other
document as it may reasonably deem necessary to ensure compliance with any law or regulation of the
Securities and Exchange Commission or any other governmental authority having jurisdiction under
this Plan. Certificates delivered upon such grant, vesting or exercise may bear a legend
restricting transfer absent such compliance. Each award shall be subject to the requirement that,
if at any time the Committee shall determine, in its discretion, that the listing, registration or
qualification of the shares subject to such award upon any securities exchange or under any state
or federal law, or the consent or approval of any governmental regulatory body, is necessary or
desirable as a condition of, or in connection with, the granting of such awards or the issue or
purchase of shares thereunder, such awards may not vest or be exercised in whole or in part unless
such listing, registration, qualification, consent or approval shall have been effected or obtained
free of any conditions not acceptable to the Committee in the exercise of its reasonable judgment.
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IMPACT OF TERMINATION OF EMPLOYMENT |
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(a) |
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If the employment of a participant terminates by reason of death or
permanent physical disability (as determined by the Committee) at a
time at which 40% or more of the participants award had vested, then
all of such participants unvested awards shall become immediately
vested and exercisable upon the participants termination date. If the
employment of a participant terminates by reason of death or permanent
physical disability (as determined by the Committee) at a time at
which less than 40% of the participants award had vested, then only
such participants vested awards shall be vested and exercisable upon
the participants termination date. Any vested portion of an option
may be exercised by the participant or, in the event of the
participants death, by the participants personal representative any
time prior to the earlier of the expiration date of the option or the
expiration of 12 months after the date of termination. |
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(b) |
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Reserved. |
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(c) |
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Upon termination of a participants employment for cause, any vested
option may not be exercised after termination of employment and any
unvested award shall be forfeited. For purposes of this Section 9 and
Section 16, cause shall mean (i) the participants theft or
embezzlement, or attempted theft or embezzlement, of money or property
of the Corporation or any affiliate, the participants perpetration or
attempted perpetration of fraud, or the participants participation in
a fraud or attempted fraud, on the Corporation or any affiliate, or
the participants unauthorized appropriation of, or attempt to
misappropriate, any tangible or intangible assets or property of the
Corporation or any affiliate; (ii) any act or acts of disloyalty,
misconduct or moral turpitude by the participant which the Board
determines in good faith has been or is likely to be demonstrably
injurious to the interest, property, operations, business or
reputation of the Corporation or any affiliate, or the participants
conviction of a crime other than minor traffic violations or other
similar minor offenses; (iii) the participants intentional refusal or
willful failure (other than by reason of disability as determined in
Section 9(a)) to carry out instructions by his superiors; or (iv) the
participants breach of any confidentiality, non-solicitation or
non-compete agreement with the Corporation or any affiliate. |
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(d) |
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Upon termination of a participants employment for any reason other
than the events described in Sections 9(a) or (c) above, any vested
option that was exercisable immediately preceding termination may be
exercised at any time prior to the earlier of the expiration date of
the option or the expiration of three months after the date of such
termination. Any unvested award shall be forfeited upon any such
termination of the participants employment. |
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(e) |
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Miscellaneous Termination Provisions |
Notwithstanding the foregoing, the Committee has the authority to prescribe different rules that
apply upon the termination of employment of a particular participant or group of participants,
which shall be memorialized in the participants original or amended award agreement or similar
document; provided, however, that such authority shall not include the ability to extend the
exercise period of any NQSO to a date later than the later of the 15th day of the third month
following the date at which, or December 31 of the calendar year in which, the NQSO would otherwise expire. Unless otherwise determined by the
Committee, an authorized leave of absence shall not constitute a termination of employment for
purposes of this Plan.
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An option that remains unexercised after the latest date it could have been exercised under any of
the foregoing provisions shall be forfeited.
In the event of any change in the Common Stock of the Corporation by reason of any stock
dividend, stock split, recapitalization, reorganization, merger, consolidation, split-up,
combination, or exchange of shares, or of any similar change affecting the Common Stock, the number
and kind of shares authorized under Section 4, the number and kind of shares which thereafter are
subject to an award under the Plan and the number and kind of shares set forth in options under
outstanding agreements and unvested shares set forth in awards under outstanding agreements and the
price per share thereunder shall be adjusted automatically consistent with such change to prevent
substantial dilution or enlargement of the rights granted to, or available for, participants in the
Plan.
A participants benefits under the terms of this Plan shall be subject to such federal, state
and local income and employment tax withholdings as benefits of this type are normally subject.
Whenever the Corporation proposes or is required to issue or transfer shares of Common Stock under
the Plan, or whenever restricted stock vests, the Corporation shall have the right to require the
recipient to remit to the Corporation an amount sufficient to satisfy any federal, state and/or
local income and employment withholding tax requirements prior to the delivery of any certificate
or certificates for such shares or to take any other appropriate action to satisfy such withholding
requirements. Notwithstanding the foregoing, subject to such rules as the Committee may promulgate
and compliance with any requirements under Rule 16b-3, the recipient, may satisfy such obligation
in whole or in part by electing to have the Corporation withhold shares of Common Stock from the
shares to which the recipient is otherwise entitled, provided that the amount of such withholding
shall not exceed the Corporations statutory withholding requirements.
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NO EMPLOYMENT OR CONSULTANT RIGHTS |
The Plan and any awards granted under the Plan shall not confer upon any participant any right
with respect to continuance as an employee or consultant of the Corporation or any subsidiary, nor
shall they interfere in any way with the right of the Corporation or any subsidiary to terminate
the participants position as an employee or consultant at any time.
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RIGHTS AS A SHAREHOLDER |
The recipient of any option under the Plan shall have no rights as a shareholder with respect
thereto unless and until certificates for the underlying shares of Common Stock are issued to the
recipient. The recipient of a restricted stock grant shall have all rights of a shareholder except
as otherwise limited by the terms of this Plan or award agreement.
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STOCKHOLDERS AGREEMENT |
The Board, in its discretion, may include provisions in the agreement evidencing a recipients
award of an option or restricted stock grant under the Plan that requires as a condition to a
participants exercise of any option or receipt of a restricted stock grant that the participant
must enter into a Shareholders Agreement with the Corporation in form and substance acceptable to
the Board.
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AMENDMENT AND DISCONTINUANCE |
This Plan may be amended, modified or terminated by the Committee or by the shareholders of
the Corporation, except that the Committee may not, without approval of a majority of the
shareholders present in person or by proxy entitled to vote thereon, increase the maximum number of
shares as to which awards may be granted under the Plan, increase the number of awards that may be
granted per year per participant, change the class of eligible persons, or modify or terminate the
Plan in a manner that requires shareholder approval under applicable law, without obtaining such
approval. Notwithstanding the foregoing, to the extent permitted by law, the Committee may amend
the Plan without the approval of shareholders. Except as required by law, no amendment,
modification, or termination of the Plan may, without the written consent of a participant to whom
any award shall theretofore have been granted, adversely affect the rights of such participant
under such award.
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(a) |
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Notwithstanding other provision of the Plan, in the event of a change
in control of the Corporation (as defined in subsection (b) below),
(i) the vesting schedule of each option holder shall be accelerated by
one year; or (ii) a minimum of 50% of all of a participants options
(meaning all options ever granted and not canceled including those
already vested), starting with the options granted under the earliest
options grant to the participant, shall become immediately vested,
whichever is greater. Additionally, notwithstanding any other
provision of the Plan and unless directed otherwise by a resolution of
the Committee adopted prior to and specifically relating to the
occurrence of a change in control, if there is a change in control and
a participants employment or consulting relationship is terminated by
the Corporation, its subsidiaries or their successors (other than a
termination for cause) upon such change in control or at any time
during the one year period after such change of control occurs, all of
a participants unvested awards will become immediately vested and
exercisable on the participants termination date. For purposes of
this paragraph (a) terminated by the Company means either the
participant has been fired or otherwise terminated by the Corporation,
its subsidiaries or their successors, or the participant has elected
to resign or terminate his contractual relationship with the
Corporation, its subsidiaries or their successors within 90 days after
any of the following: |
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(i) |
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a material reduction in the participants total
compensation (which will include salary, bonus,
consulting fee, commission structure or stock options
and other equity-based compensation) without the
participants written consent (it being understood
that a change in the form or measure of compensation
such as a change from salary-based to commission-based
compensation, or a rearrangement of the participants
compensation package to include a different
combination of salary, bonus, commission, options,
and/or incentive equity, will not by itself constitute
such a material reduction); |
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(ii) |
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a relocation of the participating employees place of employment to
a site at least 100 miles away from the participating employees
employment site immediately before the change in control without the
participating employees written consent; or |
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(iii) |
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a material reduction in the participating employees job authority
and responsibilities without the participating employees written
consent. |
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For purposes of this section, change in control means: |
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(i) |
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there shall be consummated |
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any consolidation or merger of the Corporation in which the
Corporation is not the continuing or surviving corporation or pursuant
to which any shares of the Corporations common stock are to be
converted into cash, securities or other property, provided that the
consolidation or merger is not with a corporation which was a
wholly-owned subsidiary of the Corporation immediately before the
consolidation or merger and provided that the shareholders of the
Corporation immediately prior to the consolidation or merger do not
own 50% or more of the outstanding common stock of the surviving
corporation immediately after the consolidation or merger; or |
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any sale, lease, exchange or other transfer (in one transaction or a
series of related transactions) of all, or substantially all, of the
assets of the Corporation (other than to one or more directly or
indirectly wholly-owned subsidiaries of the Corporation); or |
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the shareholders of the Corporation approve any plan or proposal for
the liquidation or dissolution of the Corporation; or |
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(iii) |
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any person (as such term is used in Sections 13(d) and 14(d) of the
Exchange Act), shall become the beneficial owner (within the meaning
of Rule 13d-3 under the Exchange Act), directly or indirectly, of
50% or more of the Corporations then outstanding common stock,
provided that such person shall not be a wholly-owned subsidiary of
the Corporation immediately before it becomes such 50% beneficial
owner; or |
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(iv) |
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individuals who constitute the Board on the
effective date of this Plan (the Incumbent
Board) cease for any reason to constitute at
least a majority thereof, provided that any person
becoming a director subsequent to the effective
date of this Plan whose election, or nomination
for election by the Corporations shareholders,
was approved by a vote of at least three quarters
of the directors comprising the Incumbent Board
(either by a specific vote or by approval of the
proxy statement of the Corporation in which such
person is named as a nominee for director, without
objection to such nomination) shall be, for
purposes of this clause (iv), considered as though
such person were, and shall be deemed to be, a
member of the Incumbent Board. |
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(c) |
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For purposes of this paragraph termination for cause shall have the meaning set forth at Section 9, |
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The effective date of this Plan is October 1, 2000.
Any terms or provisions used herein which are defined in Sections 83, 162(m), 421, or 422 of
the Internal Revenue Code as amended, or the regulations thereunder or corresponding provisions of
subsequent laws and regulations in effect at the time options are made hereunder, shall have the
meanings as therein defined.
To the extent not inconsistent with the provisions of the Internal Revenue Code that relate to
options, this Plan and any option agreement adopted pursuant to it shall be construed under the
laws of the State of Delaware.
This Plan, and any option agreements and restricted stock agreements adopted pursuant to it,
shall be construed in a manner to avoid the imposition upon payments hereunder of interest and
additional tax under Section 409A(a)(l)(B) of the Internal Revenue Code. Without limiting the scope
of the previous sentence, with respect to any payment hereunder subject to Section 409A,
distributions on account of a separation from service may not be made to an employee if he or she
is a Specified Employee within the meaning of Section 409A(a)(2)(B)(i) before the date which is
six (6) months after the date of the separation from service (or, if earlier, the date of death of
the employee).
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INTELLON CORPORATION
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By: |
/s/ Charles E. Harris
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Charles E. Harris |
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Chairman and CEO |
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