As filed with the Securities and Exchange Commission on May 13, 2011
Registration No. 333-
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
CADENCE DESIGN SYSTEMS, INC.
(Exact name of registrant as specified in its charter)
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Delaware
(State or other jurisdiction of incorporation or organization)
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77-0148231
(I.R.S. Employer Identification No.)
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2655 Seely Avenue, Building 5
San Jose, California 95134
(Address of Principal Executive Offices) (Zip Code)
Amended and Restated 2000 Equity Incentive Plan
(Full title of the plan)
James J. Cowie, Esq.
Senior Vice President, General Counsel and Secretary
Cadence Design Systems, Inc.
2655 Seely Avenue, Building 5
San Jose, California 95134
(Name and address of agent for service)
(408) 943-1234
(Telephone number, including area code, of agent for service)
Copy to:
Stewart L. McDowell, Esq.
Gibson, Dunn & Crutcher LLP
555 Mission Street, Suite 3000
San Francisco, California 94105
(415) 393-8200
Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.
See the definitions of large accelerated filer, accelerated filer and smaller reporting company in Rule 12b-2 of the Exchange Act.
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Large accelerated filer
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Accelerated filer
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Non-accelerated filer
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Smaller reporting company
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(Do not check if a smaller reporting company)
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CALCULATION OF REGISTRATION FEE
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Title of securities
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Amount
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Proposed maximum
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Proposed maximum
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Amount of
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to be registered
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to be registered (1)
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offering price per share (2)
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aggregate offering price (2)
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registration fee
(2)
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Common Stock, par value $0.01 per share
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14,614,561 shares
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$10.34
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$151,114,561.00
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$17,545.00
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(1)
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This Registration Statement shall also cover any additional shares of
common stock which become issuable under the Amended and Restated 2000 Equity
Incentive Plan (the Plan) by reason of any stock dividend, stock split,
recapitalization or other similar transaction effected without the receipt of
consideration which results in an increase in the number of the outstanding
shares of Cadence Design Systems, Inc. (the Registrant) common stock.
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(2)
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Calculated solely for purposes of calculating the amount of the
registration fee under Rules 457(c) and (h) of the Securities Act of 1933, as
amended. The price per share and aggregate offering price are based upon the
average of the high and low prices of common stock of the Registrant on May
6, 2011, as reported on the NASDAQ Global Select Market.
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TABLE OF CONTENTS
NOTE
REGISTRATION OF ADDITIONAL SHARES AND INCORPORATION OF CERTAIN INFORMATION BY REFERENCE PURSUANT TO GENERAL INSTRUCTION E OF FORM S-8
This Registration Statement on Form S-8 is filed by Cadence Design Systems, Inc., a Delaware
corporation (the Registrant), relating to 14,614,561 shares of its common stock, par value $0.01
per share (the Common Stock), issuable to eligible employees and consultants of the Registrant
and its affiliates under the Registrants Amended and Restated 2000 Equity Incentive Plan (the
Plan). On March 27, 2000, the Registrant filed with the Securities and Exchange Commission,
Registration Statements on Form S-8 (Registration No. 333-33330 and No. 333-101692), amended on
November 14, 2000 by Post-Effective Amendment No. 1 to Form S-8 Registration Statement
(Registration No. 333-69589) (together, the Prior Registration Statements) relating to shares of
Common Stock issuable to eligible employees and consultants of the Registrant and its affiliates
under the Plan. The Prior Registration Statements are currently effective. This Registration
Statement relates to securities of the same class as those to which the Prior Registration
Statements relate and is submitted in accordance with Section E of the General Instructions to Form
S-8 regarding Registration of Additional Securities.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 8. Exhibits.
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Exhibit Number
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Exhibit Description
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5.1
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Opinion and consent of Gibson, Dunn & Crutcher LLP.
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23.1
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Consent of Independent Registered Public Accounting Firm.
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23.2
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Consent of Gibson, Dunn & Crutcher LLP (contained in Exhibit 5.1).
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24.1
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Power of Attorney (included on the signature page to this Registration Statement on Form
S-8).
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99.1
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The Registrants Amended and Restated 2000 Equity Incentive Plan.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant certifies that it
has reasonable grounds to believe that it meets all of the requirements for filing on Form S-8, and
has duly caused this registration statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the city of San Jose, state of California, on this 10th day of May,
2011.
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CADENCE DESIGN SYSTEMS, INC.
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By:
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/s/ Lip-Bu Tan
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Lip-Bu Tan
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President, Chief Executive Officer and Director
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POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes
and appoints Lip-Bu Tan, Geoffrey G. Ribar and James J. Cowie, and each of them, his true and
lawful attorney-in-fact and agent, with full power of substitution and resubstitution, for him and
in his name, place and stead, in any and all capacities, to sign any and all amendments (including
post-effective amendments) to this Registration Statement, and to file the same, with all exhibits
thereto, and other documents in connection therewith, with the Securities and Exchange Commission,
granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite and necessary to be done in connection
therewith, as fully to all intents and purposes as he might or could do in person, hereby ratifying
and confirming all that said attorneys-in-fact and agents, or any of them, or their or his
substitutes or substitute, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this registration statement has
been signed by the following persons in the capacities and on the date indicated.
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Signature
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Title
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Date
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/s/ Lip-Bu Tan
Lip-Bu Tan
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President, Chief Executive Officer and Director
(Principal Executive Officer)
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May 10, 2011
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/s/ Geoffrey G. Ribar
Geoffrey G. Ribar
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Senior Vice President and Chief Financial
Officer
(Principal Financial Officer and Principal
Accounting Officer)
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May 10, 2011
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/s/ Dr. John B. Shoven
Dr. John B. Shoven
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Chairman of the Board of Directors
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May 10, 2011
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/s/ Susan L. Bostrom
Susan L. Bostrom
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Director
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May 10, 2011
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/s/ Donald L. Lucas
Donald L. Lucas
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Director
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May 10, 2011
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/s/ Dr. Alberto Sangiovanni-Vincentelli
Dr. Alberto Sangiovanni-Vincentelli
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Director
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May 10, 2011
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/s/ George M. Scalise
George M. Scalise
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Director
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May 10, 2011
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/s/ Roger S. Siboni
Roger S. Siboni
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Director
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May 10, 2011
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/s/ John A.C. Swainson
John A.C. Swainson
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Director
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May 10, 2011
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EXHIBIT INDEX
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Exhibit Number
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Exhibit Description
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5.1
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Opinion and consent of Gibson, Dunn & Crutcher LLP.
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23.1
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Consent of Independent Registered Public Accounting Firm.
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23.2
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Consent of Gibson, Dunn & Crutcher LLP (contained in Exhibit 5.1).
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24.1
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Power of Attorney (included on the signature page to this Registration Statement on Form
S-8).
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99.1
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The Registrants Amended and Restated 2000 Equity Incentive Plan.
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Exhibit 99.1
CADENCE DESIGN SYSTEMS, INC.
AMENDED AND RESTATED 2000 EQUITY INCENTIVE PLAN
Adopted January 1, 2000
Amended and Restated February 2, 2007
Amended July 30, 2007 (stockholder approval not required)
Amended and Restated March 16, 2011 (approved by stockholders)
Termination Date: March 16, 2021
1. Purposes of the Plan.
The purposes of the Plan are to attract and retain the best
available personnel for positions of substantial responsibility, to provide additional incentive to
the Employees and Consultants of the Company and its Affiliates, and to promote the success of the
Companys business.
2. Definitions.
As used herein, the following definitions shall apply:
(a)
Affiliate
shall mean any parent corporation or subsidiary corporation of the Company,
whether now or hereafter existing, as those terms are defined in Sections 424(e) and (f),
respectively, of the Code.
(b)
Board
shall mean the Committee, if one has been appointed, or the Board of Directors, if
no Committee is appointed.
(c)
Board of Directors
shall mean the Board of Directors of the Company.
(d)
Code
shall mean the U.S. Internal Revenue Code of 1986, as amended, and the Treasury
Regulations promulgated thereunder.
(e)
Committee
shall mean the Committee appointed by the Board of Directors in accordance
with paragraph (a) of Section 4 of the Plan, if one is appointed.
(f)
Common Stock
shall mean the common stock of the Company.
(g)
Company
shall mean
Cadence Design Systems, Inc.
, a Delaware corporation.
(h)
Consultant
shall mean any consultant, independent contractor or adviser rendering
services to the Company or an Affiliate (provided that such person renders bona fide services not
in connection with the offering and sale of securities in capital raising transactions). However,
the term Consultant shall not include members of the Board of Directors.
(i)
Continuous Status as an Employee or Consultant
shall mean the absence of any
interruption or termination of service, whether as an Employee or Consultant. The Board or the
chief executive officer of the Company shall determine whether Continuous
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Status as an Employee or Consultant shall be considered interrupted in the case of: (i) any
approved leave of absence, including sick leave, military leave, or any other personal leave; or
(ii) transfers between the Company, Affiliates or their successors. Continuous Status as an
Employee or Consultant shall not be deemed to have terminated merely because of a change in the
capacity in which the Participant renders service to the Company or any Affiliate, provided that
there is no interruption or termination thereof.
(j)
Employee
shall mean any person employed by the Company or any Affiliate.
(k)
Exchange Act
shall mean the Securities Exchange Act of 1934, as amended, and the rules
and regulations promulgated thereunder.
(l)
Fair Market Value
means the closing price of the Common Stock on such date, as reported
on the NASDAQ Global Select Market or such other primary national exchange on which the Common
Stock is listed. In the event the Common Stock is not listed on an exchange as described in the
previous sentence, Fair Market Value with respect to any relevant date shall be determined in good
faith by the Board.
(m)
Incentive Stock
means shares of Common Stock granted to a Participant pursuant to
Section 10 hereof.
(n)
Incentive Stock Option
shall mean an Option intended to qualify as an incentive stock
option within the meaning of Section 422 of the Code.
(o)
Nonstatutory Stock Option
shall mean an Option not intended to qualify as an incentive
stock option within the meaning of Section 422 of the Code.
(p)
Option
shall mean a stock option granted pursuant to the Plan, which may be either an
Incentive Stock Option or a Nonstatutory Stock Option, at the discretion of the Board and as
reflected in the terms of the applicable Stock Award Agreement.
(q)
Optioned Stock
shall mean the Common Stock subject to an Option.
(r)
Parent
shall mean a parent corporation of the Company, whether now or hereafter
existing, as defined in Section 424(e) of the Code.
(s)
Participant
shall mean an Employee or Consultant who receives a Stock Award.
(t)
Plan
shall mean this Amended and Restated 2000 Equity Incentive Plan, as amended from
time to time.
(u)
Prior Plans
shall mean the Cadence Design Systems, Inc. 1993 Nonstatutory Stock
Incentive Plan, as amended, and the Cadence Design Systems, Inc. 1997 Nonstatutory Stock Incentive
Plan, as amended.
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(v)
Restricted Stock Unit
means a Stock Award granted to a Participant pursuant to Section
10 hereof pursuant to which shares of Common Stock or cash in lieu thereof may be issued in the
future.
(w)
Securities Act
means the Securities Act of 1933, as amended, and the rules and
regulations promulgated thereunder.
(x)
Share
shall mean a share of Common Stock, as may be adjusted in accordance with Section
12 of the Plan.
(y)
Stock Award
shall mean any right granted under the Plan, including an Option, an award
of Incentive Stock or a Restricted Stock Unit.
(z)
Stock Award Agreement
means a written agreement between the Company and a holder of a
Stock Award or other instrument evidencing the terms and conditions of an individual Stock Award
grant. Each Stock Award Agreement shall be subject to the terms and conditions of the Plan.
(aa)
Subsidiary
shall mean a subsidiary corporation of the Company, whether now or
hereafter existing, as defined in Section 424(f) of the Code.
3. Stock Subject to the Plan.
(a) Share Reserve.
Subject to the provisions of Sections 3(b) and 12, the Common Stock that
may be issued pursuant to Stock Awards shall not exceed in the aggregate 57,500,000 shares of
Common Stock, together with reserved shares of Common Stock that are not subject to a grant or as
to which the Stock Award granted has been forfeited under the Prior Plans as of March 16, 2011.
(b) Reversion of Shares to the Share Reserve.
If any Stock Award shall for any reason expire
or otherwise terminate, in whole or in part, without having vested or been exercised in full, the
shares of Common Stock not acquired under such Stock Award shall revert to and again become
available for issuance under the Plan. If the Company repurchases any unvested shares of Common
Stock acquired pursuant to a Stock Award, such repurchased shares of Common Stock shall revert to
and again become available for issuance under the Plan. Additionally, Shares subject to a Stock
Award under this Plan may not again be made available for issuance under this Plan if such shares
are: (i) shares used to pay the exercise price of an Option, (ii) shares delivered to or withheld
by the Company to pay the withholding taxes related to a Stock Award or (iii) shares repurchased on
the open market with the proceeds of an Option exercise.
(c) Source of Shares.
The shares of Common Stock subject to the Plan may be unissued shares
or reacquired shares, bought on the market or otherwise.
(d) Tax Code Limits.
The aggregate number of Shares that may be issued pursuant to the
exercise of Incentive Stock Options granted under this Plan shall not exceed
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57,500,000, which number shall be calculated and adjusted pursuant to Section 12 only to the
extent that such calculation or adjustment will not affect the status of any option intended to
qualify as an Incentive Stock Option under Section 422 of the Code.
4. Administration of the Plan.
(a) Procedure
. The Plan shall be administered by the Board of Directors. The Board of
Directors may appoint a Committee consisting of one or more members of the Board of Directors to
administer the Plan on behalf of the Board of Directors, subject to such terms and conditions as
the Board of Directors may prescribe. In such event, any references in the Plan to the Board of
Directors shall be deemed to refer to the Committee. Once appointed, the Committee shall continue
to serve until otherwise directed by the Board of Directors. From time to time the Board of
Directors may increase or decrease the size of the Committee and appoint additional members
thereof, remove members (with or without cause), and appoint new members in substitution therefor,
fill vacancies however caused and remove all members of the Committee, and thereafter directly
administer the Plan. Notwithstanding anything in this Section 4 to the contrary, at any time the
Board of Directors or the Committee may delegate to a committee of one or more members of the Board
of Directors the authority to grant Stock Awards to all Employees and Consultants or any portion or
class thereof. In addition, the Board of Directors or the Committee may by resolution authorize
one or more officers of the Company to perform any or all tasks that the Board is authorized and
empowered to do or perform under the Plan, to the extent permitted by applicable law, and for all
purposes under the Plan, such officer or officers shall be treated as the Board; provided, however,
that the resolution so authorizing such officer or officers shall specify the maximum number of
Shares per Stock Award (if any) and the total number of Shares (if any) such officer or officers
may award pursuant to such delegated authority, and any such Stock Award shall be subject to the
form of Stock Award Agreement theretofore approved by the Board of Directors or the Committee. No
such officer shall designate himself or herself as a recipient of any Stock Awards granted under
authority delegated to such officer.
(b) Powers of the Board
. Subject to the provisions of the Plan, the Board shall have the
authority, in its discretion: (i) to grant Stock Awards under the Plan; (ii) to determine the
exercise, sales or purchase price per share of Stock Awards to be granted, which exercise price
shall be determined in accordance with Sections 8(a) and 10(c) of the Plan, as applicable; (iii) to
determine the Employees or Consultants to whom, and the time or times at which, Stock Awards shall
be granted, the number of Shares to be represented by each Stock Award, and the terms of such Stock
Awards; (iv) to interpret the Plan; (v) to prescribe, amend and rescind rules and regulations
relating to the Plan; (vi) to determine the terms and provisions of each Stock Award granted (which
need not be identical) in accordance with the Plan, and, with the consent of the holder thereof
with respect to any adverse change, modify or amend each Stock Award; (vii) to accelerate or defer
(the latter with the consent of the Participant) the exercise date and vesting of any Stock Award;
(viii) to adopt any sub-plan to the Plan for grants of Stock Awards to Employees residing outside
the United States to comply with tax, securities or other non-U.S. legal requirements or to provide
favorable tax treatment for Stock Awards; (ix) to authorize any person to execute on behalf of the
Company any instrument required to
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effectuate the grant of a Stock Award previously granted by the Board; and (x) to make all
other determinations deemed necessary or advisable for the administration of the Plan. The Board,
in the exercise of this power, may correct any defect, omission or inconsistency in the Plan or in
any Stock Award Agreement, in a manner and to the extent it shall deem necessary or expedient to
make the Plan fully effective.
(c) Effect of Boards Decision
. All decisions, determinations and interpretations of the
Board shall be final and binding on all Participants and any other holders of any Stock Awards
granted under the Plan.
5. Eligibility.
Stock Awards may be granted only to Employees or Consultants. An Employee or
Consultant who has been granted a Stock Award may, if he or she is otherwise eligible, be granted
an additional Stock Award. Notwithstanding the foregoing, no Employee or Consultant who is an
executive officer of the Company within the meaning of Section 16 of the Exchange Act, who is a
member of the Board of Directors or who beneficially owns 10% or more of the Companys Common Stock
shall be entitled to receive the grant of a Stock Award under the Plan unless the Stock Award will
be granted to a person not previously employed by the Company as a material inducement to such
persons becoming an employee of the Company. Incentive Stock Options may only be granted to
Employees. The aggregate Fair Market Value (determined at the time the Option is granted) of the
stock with respect to which Incentive Stock Options are exercisable for the first time by such
individual during any calendar year (under the Plan or under any other incentive stock option plan
of the Company or any Parent or Subsidiary of the Company) shall not exceed $100,000. To the
extent that the grant of an Option exceeds this limit, the portion of the Option that exceeds such
limit shall be treated as a Nonstatutory Stock Option.
The Plan shall not confer upon any Participant any right with respect to continuation of
employment or consultancy by the Company or any Affiliate, as applicable, nor shall it interfere in
any way with the Participants right or the Companys or any Affiliates right to terminate the
Participants employment at any time, except as provided otherwise in an employment agreement or
under applicable law, or the Participants consultancy pursuant to the terms of the Consultants
agreement with the Company or any Affiliate.
6. Term of the Plan.
The Plan became effective upon its adoption by the Board of Directors on
March 16, 2011. The Plan shall continue in effect until the tenth anniversary of its adoption by
the Board of Directors unless sooner terminated under Section 14 of the Plan.
7. Term of Option; Vesting Provisions.
(a) Option Term
. The term of each Option shall be seven (7) years from the date of grant
thereof or such shorter term as may be provided in the applicable Stock Award Agreement.
(b) Vesting Provisions.
The terms on which each Option shall vest shall be determined by the
Board in its discretion, and shall be set forth in the Stock Award Agreement relating to each such
Option. Without limiting the discretion of the Board, vesting provisions
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may include time-based vesting or vesting based on achievement of performance or other
criteria. The provisions of this Section 7(b) are subject to any Option provisions governing the
minimum number of Shares as to which an Option may be exercised.
8. Option Exercise Price and Consideration.
(a) Exercise Price
. The per Share exercise price for the Shares to be issued pursuant to
exercise of an Option shall be such price as is determined by the Board, but shall be subject to
the following:
(i)
In the case of an Incentive Stock Option, the per Share exercise price shall be no less
than 100% of the Fair Market Value per Share on the date of grant.
(ii)
In the case of a Nonstatutory Stock Option, the per Share exercise price shall not be
less than 100% of the Fair Market Value per Share on the date of grant.
(iii)
Notwithstanding the provisions of Section 8(a), an Option (whether an Incentive Stock
Option or Nonstatutory Stock Option) may be granted with an exercise price lower than set forth in
this Section 8(a) if such Option is granted pursuant to an assumption or substitution for another
option in a manner satisfying the provisions of Section 424(a) of the Code.
(b) Consideration
. Subject to applicable law, the consideration to be paid for the Shares to
be issued upon exercise of an Option, including the method of payment, shall be determined by the
Board and may consist entirely of cash, check, promissory note, shares of Common Stock having a
Fair Market Value on the date of exercise equal to the aggregate exercise price of the Shares as to
which said Option shall be exercised, or any combination of such methods of payment, or such other
consideration and method of payment for the issuance of Shares as may be determined by the Board.
In making its determination as to the type of consideration to accept, the Board shall consider if
acceptance of such consideration may be reasonably expected to benefit the Company.
(c) No Repricing without Stockholder Approval.
Other than in connection with a change in the
Companys capitalization (as described in Section 12), the Company shall not, without stockholder
approval, (i) reduce the exercise price of such Option, (ii) exchange such Option for cash, another
Stock Award or a new Option with a lower exercise price or (iii) otherwise reprice such Option.
9. Exercise of Options
.
(a) Procedure for Exercise; Rights as a Stockholder
. Any Option granted hereunder shall be
exercisable at such times and under such conditions as determined by the Board, including
performance criteria with respect to the Company and/or the Participant, and as shall be
permissible under the terms of the Plan.
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An Option may not be exercised for a fraction of a Share.
An Option shall be deemed to be exercised when written notice of such exercise has been given
to the Company in accordance with the terms of the Option by the person entitled to exercise the
Option and full payment for the Shares with respect to which the Option is exercised has been
received by the Company. Full payment may, as authorized by the Board, consist of any
consideration and method of payment allowable under Section 8(b) of the Plan. Until the issuance
(as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer
agent of the Company) of the stock certificate evidencing such Shares, no right to vote or receive
dividends or any other rights as a stockholder shall exist with respect to the Optioned Stock,
notwithstanding the exercise of the Option. No adjustment will be made for a dividend or other
right for which the record date is prior to the date the stock certificate is issued, except as
provided in Section 12 of the Plan.
Exercise of an Option in any manner shall result in a decrease in the number of Shares that
thereafter may be available, both for purposes of the Plan and for sale under the Option, by the
number of Shares as to which the Option is exercised.
(b) Termination of Status as an Employee or Consultant
. If a Participant ceases to serve as
an Employee or Consultant for any reason other than death or disability, the Participant may, but
only within such period of time ending on the earlier of (i) three (3) months (or such other period
of time as is determined by the Board) after the date the Participant ceases to be an Employee or
Consultant or (ii) the expiration of the term of the Option, exercise the Option to the extent that
the Participant was entitled to exercise it at the date of such termination. To the extent that
the Participant was not entitled to exercise the Option at the date of such termination, or if the
Participant does not exercise such Option (which the Participant was entitled to exercise) within
the time specified herein, the Option shall terminate.
(c) Extension of Termination Date.
A Participants Stock Award Agreement may also provide
that if the exercise of the Option following the termination of the Participants Continuous
Service as an Employee or Consultant (other than upon the Participants death or disability) would
be prohibited at any time solely because the issuance of Shares would violate the registration
requirements under the Securities Act, then the Option shall terminate on the expiration of a
period of three (3) months after the termination of the Participants Continuous Service as an
Employee or Consultant during which the exercise of the Option would not be in violation of such
registration requirements.
(d) Death of Participant
. In the event of the death of a Participant during the term of the
Option who is at the time of the Participants death an Employee or Consultant and who shall have
been in Continuous Status as an Employee or Consultant since the date of grant of the Option, the
Option may be exercised at any time within the period of time ending on the earlier of (i) twelve
(12) months (or such other period of time as is determined by the Board) following the date of
death or (ii) the expiration of the term of the Option, by the Participants estate or by a person
who acquired the right to exercise the Option by bequest or inheritance, to the extent that the
Participant was entitled to exercise it at the date of such termination. To the extent that the
Participant was not entitled to exercise the Option at the date of such termination,
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or if the Option is not exercised (to the extent the Participant was entitled to exercise)
within the time specified herein, the Option shall terminate.
(e) Disability of Participant
. In the event of the disability of a Participant during the
term of the Option who is at the time of his or her disability an Employee or Consultant and who
shall have been in Continuous Status as an Employee or Consultant since the date of grant of the
Option, the Participant (or the Participants legal guardian or conservator) may, but only within
the period of time ending on the earlier of (i) twelve (12) months (or such other period of time as
is determined by the Board) after the date the Participant ceases to be an Employee or Consultant
on account of such disability or (ii) the expiration of the term of the Option, exercise the Option
to the extent that the Participant was entitled to exercise it at the date of such termination. To
the extent that the Participant was not entitled to exercise the Option at the date of such
termination, or if the Participant does not exercise such Option (which the Participant was
entitled to exercise) within the time specified herein, the Option shall terminate.
10. Incentive Stock and Restricted Stock Units.
(a) General.
Incentive Stock is an award or issuance of shares of Common Stock under the
Plan, the grant, issuance, retention, vesting and/or transferability of which is subject during
specified periods of time to such conditions (including continued service or performance
conditions) and terms as the Board deems appropriate. Restricted Stock Units are awards
denominated in units of Shares under which the issuance of Shares is subject to such conditions
(including continued employment or performance criteria) and terms as the Board deems appropriate.
Unless determined otherwise by the Board, each Restricted Stock Unit will be equal to one Share and
will entitle a Participant to either the issuance of Shares or payment of an amount of cash
determined with reference to the value of Shares.
(b) Stock Award Agreement.
Each Stock Award Agreement relating to Incentive Stock or
Restricted Stock Units shall contain provisions regarding (i) the number of shares of Common Stock
subject to such award or a formula for determining such number, (ii) the purchase price of the
Shares, if any, and the means of payment for the Shares, (iii) the performance criteria, if any,
and level of achievement of these criteria that shall determine the number of Shares granted,
issued, retainable and/or vested, (iv) such terms and conditions on the grant, issuance, vesting
and/or forfeiture of the Shares as may be determined from time to time by the Board, (v)
restrictions on the transferability of the Shares and (vi) such further terms and conditions in
each case not inconsistent with the Plan as may be determined from time to time by the Board.
Shares of Incentive Stock may be issued in the name of the Participant and held by the Participant
or held by the Company, in each case as the Board may provide.
(c) Sales Price.
Subject to the requirements of applicable law, the Board shall determine the
price, if any, at which shares of Incentive Stock or Shares underlying Restricted Stock Units shall
be sold or awarded to a Participant, which price may vary from time to time and among Participants
and which may be above or below the Fair Market Value of such shares at the date of grant or
issuance.
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(d) Share Vesting.
The grant, issuance, retention and/or vesting of shares of Incentive Stock
and Restricted Stock Units, as applicable, shall be at such time and in such installments as
determined by the Board. The Board shall have the right to make the timing of the grant and/or the
issuance, ability to retain and/or vesting of shares of Incentive Stock and Restricted Stock Units
subject to continued service, passage of time and/or such performance criteria as deemed
appropriate by the Board. Notwithstanding the foregoing, the Board may accelerate vesting (in a
Stock Award Agreement or otherwise) of any Stock Award in the event of a Participants termination
of service as an Employee or Consultant, a Change in Control or other similar event.
(e) Transferability.
Shares of Incentive Stock and Restricted Stock Units shall be
transferable by the Participant only upon such terms and conditions as are set forth in the
applicable Stock Award Agreement, as the Board shall determine in its discretion, so long as the
Incentive Stock or Restricted Stock Units, as applicable, awarded under the Stock Award Agreement
remains subject to the terms of the Stock Award Agreement.
(f) Discretionary Adjustments.
Notwithstanding satisfaction of any performance goals, the
number of shares granted, issued, retainable and/or vested under an award of Incentive Stock or
Restricted Stock Units, as applicable, on account of either financial performance or personal
performance evaluations may be reduced by the Board on the basis of such further considerations as
the Board shall determine.
(g) Voting Rights.
Unless otherwise determined by the Board, Participants holding shares of
Incentive Stock granted hereunder may exercise full voting rights with respect to those shares
during the period of restriction. With respect to Shares underlying Restricted Stock Units,
Participants shall have no voting rights unless and until such Shares are reflected as issued and
outstanding shares on the Companys stock ledger.
(h) Dividends and Distributions.
Participants in whose name an Award of Incentive Stock is
granted shall be entitled to receive all dividends and other distributions paid with respect to the
Shares underlying such Award, unless determined otherwise by the Board. Participants in whose name
an Award of Restricted Stock Units is granted shall not be entitled to receive dividends or other
distributions paid with respect to the Shares underlying such Award, unless determined otherwise by
the Board. The Board will determine whether any such dividends or distributions will be
automatically reinvested in additional Shares or will be payable in cash; provided that such
additional Shares and/or cash shall be subject to the same restrictions and vesting conditions as
the Award with respect to which they were distributed. Notwithstanding anything herein to the
contrary, in no event shall dividends or dividend equivalents be currently payable with respect to
unvested or unearned Awards subject to performance criteria.
11. Non-Transferability of Stock Awards.
Except as otherwise expressly provided in the terms
of the applicable Stock Award Agreement, a Stock Award may not be sold, pledged, assigned,
hypothecated, transferred or otherwise disposed of in any manner other than by will or by the laws
of descent or distribution and may be exercised, during the lifetime of the Participant, only by
the Participant or the Participants legal representative. Notwithstanding the
9
foregoing, the Participant may, by delivering written notice to the Company, in a form
satisfactory to the Company, designate a third party who, in the event of the death of the
Participant, shall thereafter be entitled to exercise the Stock Award.
12. Adjustments upon Changes in Capitalization or Change in Control.
The number of Shares
covered by each outstanding Stock Award, and the number of Shares which have been authorized for
issuance under the Plan but as to which no Stock Awards have yet been granted or which have been
returned to the Plan upon cancellation, expiration, forfeiture or other termination of a Stock
Award, as well as the price per Share covered by each such outstanding Stock Award, shall be
equitably adjusted for any increase or decrease in the number of issued shares of Common Stock
resulting from a stock split or the payment of a stock dividend with respect to the Common Stock or
any other increase or decrease in the number of issued shares of Common Stock effected without
receipt of consideration by the Company; provided, however, that conversion of any convertible
securities of the Company shall not be deemed to have been effected without receipt of
consideration. Such adjustments shall be made by the Board, whose determination in that respect
shall be final, binding and conclusive. Except as expressly provided herein, no issuance by the
Company of shares of stock of any class, or securities convertible into shares of stock of any
class, shall affect, and no adjustment by reason thereof shall be made with respect to, the number
or price of shares of Common Stock subject to a Stock Award. Such adjustment shall be designed to
comply with Section 409A and 424 of the Code or, except as otherwise expressly provided in Section
3(d) of this Plan, may be designed to treat the Shares available under the Plan and subject to
Awards as if they were all outstanding on the record date for such event or transaction or to
increase the number of such Shares to reflect a deemed reinvestment in Shares of the amount
distributed to the Companys securityholders.
For purposes of the Plan, a Change in Control shall be deemed to occur upon the consummation
of any one of the following events: (a) a sale of all or substantially all of the assets of the
Company; (b) a merger or consolidation in which the Company is not the surviving corporation (other
than a transaction the principal purpose of which is to change the state of the Companys
incorporation or a transaction in which the voting securities of the Company are exchanged for
beneficial ownership of at least 50% of the voting securities of the controlling acquiring
corporation); (c) a merger or consolidation in which the Company is the surviving corporation and
less than 50% of the voting securities of the Company that are outstanding immediately after the
consummation of such transaction are beneficially owned, directly or indirectly, by the persons who
owned such voting securities immediately prior to such transaction; (d) any transaction or series
of related transactions after which any person (as such term is defined in Section 13(d)(3) of the
Exchange Act), other than any employee benefit plan (or related trust) sponsored or maintained by
the Company or any subsidiary of the Company, becomes the beneficial owner of voting securities of
the Company representing 40% or more of the combined voting power of all of the voting securities
of the Company; (e) during any period of two consecutive years, individuals who at the beginning of
such period constitute the membership of the Companys Board of Directors (Incumbent Directors)
cease for any reason to have authority to cast at least a majority of the votes which all directors
on the Board of Directors are entitled to cast, unless the election, or the nomination for election
by the Companys stockholders, of a new director was approved by a vote of at least two-thirds of
the
10
votes entitled to be cast by the Incumbent Directors, in which case such director shall also
be treated as an Incumbent Director in the future; or (f) the liquidation or dissolution of the
Company.
In the event of a Change in Control, then: (a) any surviving or acquiring corporation shall
assume Stock Awards outstanding under the Plan or shall substitute similar awards (including an
option to acquire the same consideration paid to stockholders in the transaction described in this
Section 12 for those outstanding Options under the Plan), or (b) in the event any surviving or
acquiring corporation refuses to assume such Stock Awards or to substitute similar awards for those
outstanding under the Plan, (i) with respect to Stock Awards held by persons then performing
services as Employees or Consultants, the vesting of such Stock Awards and the time during which
such Stock Awards may be exercised shall be accelerated prior to such event and the Stock Awards
terminated if not exercised after such acceleration and at or prior to such event, and (ii) with
respect to any other Options outstanding under the Plan, such Options shall be terminated if not
exercised prior to such event.
13. Miscellaneous
.
(a) Acceleration of Exercisability and Vesting.
The Board shall have the power to accelerate
the time at which a Stock Award may first be exercised or the time during which a Stock Award or
any part thereof will vest in accordance with the Plan, notwithstanding the provisions in the Stock
Award stating the time at which it may first be exercised or the time during which it will vest.
If the Board, at its sole discretion, permits acceleration as to all or any part of a Stock Award,
the aggregate Fair Market Value (determined at the time Stock Award is granted) of stock with
respect to which Incentive Stock Options first become exercisable in the year of such dissolution,
liquidation, sale of assets or merger cannot exceed $100,000. Any remaining accelerated Incentive
Stock Options shall be treated as Nonstatutory Stock Options.
(b) Additional Restrictions on Stock Awards.
Either at the time a Stock Award is granted or
by subsequent action, the Board may, but need not, impose such restrictions, conditions or
limitations as it determines appropriate as to the timing and manner of any resales by a
Participant or other subsequent transfers by an Participant of any Shares issued under a Stock
Award, including without limitation (i) restrictions under an insider trading policy, (ii)
restrictions designed to delay and/or coordinate the timing and manner of sales by Participants,
and (iii) restrictions as to the use of a specified brokerage firm for such resales or other
transfers.
(c) Stockholder Rights.
No Participant shall be deemed to be the holder of, or to have any of
the rights of a holder with respect to, any shares of Common Stock subject to a Stock Award unless
and until such Participant has satisfied all requirements for exercise and/or vesting of the Stock
Award pursuant to its terms and said Shares have been issued to the Participant.
(d) Investment Assurances.
The Company may require a Participant, as a condition to
exercising or acquiring Common Stock under any Stock Award, (i) to give written assurances
satisfactory to the Company as to the Participants knowledge and experience in
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financial and
business matters and/or to employ a purchaser representative reasonably
satisfactory to the Company who is knowledgeable and experienced in financial and business
matters and that he or she is capable of evaluating, alone or together with the purchaser
representative, the merits and risks of the Stock Award; and (ii) to give written assurances
satisfactory to the Company stating that the Participant is acquiring Common Stock subject to the
Stock Award for the Participants own account and not with any present intention of selling or
otherwise distributing the Common Stock. The foregoing requirements, and any assurances given
pursuant to such requirements, shall be inoperative if (1) the issuance of the shares of Common
Stock upon exercise of the Option or acquisition of Common Stock under the Plan has been registered
under a then currently effective registration statement under the Securities Act or (2) as to any
particular requirement, a determination is made by counsel for the Company that such requirement
need not be met in the circumstances under the then applicable securities laws. The Company may,
upon advice of counsel to the Company, place legends on stock certificates issued under the Plan as
such counsel deems necessary or appropriate in order to comply with applicable securities laws,
including, but not limited to, legends restricting the transfer of the Common Stock represented
thereby.
(e) Withholding Obligations.
To the extent provided by the terms of a Stock Award Agreement,
the Participant may satisfy any federal, state, local or foreign income, social insurance, payment
on account or other tax withholding obligation relating to a Stock Award by any of the following
means (in addition to the Companys right to withhold from any compensation paid to the Participant
by the Company or an Affiliate) or by a combination of such means: (i) tendering a cash payment;
(ii) authorizing the Company to withhold shares of Common Stock from the shares of Common Stock
otherwise issuable to the Participant as a result of the Stock Award, provided, however, that no
shares of Common Stock are withheld with a value exceeding the minimum amount of tax required to be
withheld by law; or (iii) delivering to the Company owned and unencumbered shares of Common Stock.
14. Amendment and Termination of the Plan
.
(a) Amendment and Termination.
The Board may at any time terminate the Plan or amend the Plan
from time to time in such respects as the Board may deem advisable; provided, however, that no
amendment shall be effective unless approved by the stockholders of the Company to the extent
stockholder approval is necessary for the Plan to satisfy any listing requirements of any
securities exchange or national market system on which the Common Stock is traded or any other
applicable law.
(b) Effect of Amendment or Termination.
Any such amendment or termination of the Plan shall
not adversely affect Stock Awards already granted and such Stock Awards shall remain in full force
and effect as if the Plan had not been amended or terminated, unless mutually agreed otherwise
between the Participant and the Board, which agreement must be in writing and signed by the
Participant and the Company.
15. Conditions Upon Issuance of Shares.
Shares shall not be issued pursuant to a Stock Award
unless the exercise of the Option, if applicable, and the issuance and delivery of such Shares
pursuant the Stock Award shall comply with all relevant provisions of the law,
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including without
limitation, the Securities Act, the Exchange Act and the requirements of any
stock exchange or national market system upon which the Shares may then be listed, foreign
securities and exchange control laws and shall be further subject to the approval of counsel for
the Company with respect to such compliance.
16. Liability of Company
. The Company and any Affiliate which is in existence or hereafter
comes into existence shall not be liable to a Participant or other persons as to:
(a)
The non-issuance or sale of Shares as to which the Company has been unable to obtain from
any regulatory body having jurisdiction the authority deemed by the Companys counsel to be
necessary to the lawful issuance and sale of any Shares hereunder; or
(b)
Any tax consequence expected, but not realized, by any Participant or other person due to
the receipt, exercise or settlement of any Stock Award granted hereunder.
17. Reservation of Shares.
The Company, during the term of the Plan, will at all times
reserve and keep available such number of Shares as shall be sufficient to satisfy the requirements
of the Plan. The Companys inability to obtain authority from any regulatory body having
jurisdiction, which authority is deemed by the Companys counsel to be necessary for the lawful
issuance and sale of any Shares hereunder, shall relieve the Company of any liability in respect of
the failure to issue or sell such Shares as to which such requisite authority shall not have been
obtained.
18. Stock Award Agreement.
All Stock Awards shall be evidenced by written award agreements in
such form as the Board shall approve.
19. Choice of Law.
The law of the State of Delaware, without regard to its conflict of laws
rules, shall govern all questions concerning the construction, validity and interpretation of the
Plan.
20. Section 409A
. It is intended that any Stock Awards issued to U.S. taxpayers pursuant to
this Plan and any Stock Award Agreement shall not constitute deferrals of compensation within the
meaning of Section 409A of the Code and, as a result, shall not be subject to the requirements of
Section 409A of the Code. The Plan and each Stock Award Agreement or other written document
establishing the terms and conditions of a Stock Award are to be interpreted and administered in a
manner consistent with these intentions. However, no guarantee or commitment is made that the
Plan, any Stock Award Agreement or any other written document establishing the terms and conditions
of a Stock Award shall be administered in accordance with the requirements of Section 409A of the
Code, with respect to amounts that are subject to such requirements, or that the Plan, any Stock
Award Agreement or any other written document establishing the terms and conditions of a Stock
Award shall be administered in a manner that avoids the application of Section 409A of the Code,
with respect to amounts that are not subject to such requirements.
21. Required Delay in Payment on Account of a Separation from Service
. Notwithstanding any
other provision in this Plan, any Stock Award Agreement or any other
13
written document establishing
the terms and conditions of a Stock Award, if any Stock Award
recipient is a specified employee (as defined in Treasury Regulations Section 1.409A-1(i)),
as of the date of his or her Separation from Service (as defined in authoritative IRS guidance
under Section 409A of the Code), then, to the extent required by Treasury Regulations Section
1.409A-3(i)(2), any payment made to the Stock Award recipient on account of his or her Separation
from Service shall not be made before a date that is six months after the date of his or her
Separation from Service. The Board may elect any of the methods of applying this rule that are
permitted under Treasury Regulations Section 1.409A-3(i)(2)(ii).
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