As filed with the Securities and Exchange Commission on August 15, 2013

Registration No. 333-     

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 


 

FORM S-8

 

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

 


 

MELLANOX TECHNOLOGIES, LTD.

(Exact Name of Registrant as Specified in Its Charter)

 


 

Israel

 

98-0233400

(State or Other Jurisdiction of
Incorporation or Organization)

 

(IRS Employer
Identification Number)

 

Mellanox Technologies, Ltd.
Beit Mellanox, Yokneam, Israel 20692

(Address of Principal Executive Offices including Zip Code)

 


 

Kotura, Inc. Second Amended and Restated 2003 Stock Plan

(Full Title of the Plan)

 


 

Jacob Shulman

Chief Financial Officer

Mellanox Technologies, Ltd.

350 Oakmead Parkway, Suite 100

Sunnyvale, California 94085

(408) 970-3400

 

Copy to:

Alan C. Mendelson, Esq.

Mark V. Roeder, Esq.

Latham & Watkins LLP

140 Scott Drive

Menlo Park, California 94025

(650) 328-4600

(Name and Address, Including Zip Code, and Telephone Number,
Including Area Code, of Agent for Service)

 


 

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.

 

 

Large accelerated filer   x

 

Accelerated filer   o

 

Non-accelerated filer   o

 

Smaller reporting company   o

 


 

CALCULATION OF REGISTRATION  FEE

 

Title of
Securities to be
Registered (1)

 

Amount
to be
Registered (2)

 

Proposed
Maximum
Offering

Price Per
Share

 

Proposed
Maximum
Aggregate
Offering
Price

 

Amount of
Registration
Fee

 

Ordinary Shares, nominal value NIS 0.0175 per share, to be issued under the Kotura, Inc. Second Amended and Restated 2003 Stock Plan (the “Plan”)

 

177,078 shares

(3)

$

37.58

(4)

$

6,654,592

(4)

$

907.69

 

 

(1)           Pursuant to Rule 416(c) under the Securities Act of 1933, as amended (the “Securities Act”), this Registration Statement also covers an indeterminate amount of interests to be offered or sold pursuant to the employee benefit plan described herein.

(2)           Pursuant to Rule 416(a) under the Securities Act, this Registration Statement shall also cover any additional ordinary shares which become issuable under the Plan by reason of any share dividend, share split, recapitalization or other similar transaction effected without the Registrant’s receipt of consideration which results in an increase in the number of the outstanding ordinary shares of the Registrant.

(3)           Represents 177,078 ordinary shares of the Registrant issuable pursuant to outstanding awards under the Plan that will be assumed by the Registrant pursuant to the Merger Agreement (as defined below).

(4)           Estimated solely for the purpose of calculating the registration fee pursuant to Rules 457(c) and 457(h) of the Securities Act. The offering price per share and aggregate offering price (a) for 31,653 ordinary shares of the Registrant issuable pursuant to outstanding stock options under the Plan that will be assumed by the Registrant, are based upon the weighted average exercise price of such options, as adjusted by the exchange ratio set forth in the Merger Agreement, and (b) for 145,425 ordinary shares of the Registrant issuable pursuant to outstanding restricted stock units under the Plan that will be assumed by the Registrant, are based on the average of the high ($42.39) and low ($41.14) prices for the Registrant’s ordinary shares reported by the Nasdaq Global Select Market on August 14, 2013.

 

Proposed sale to take place as soon after the registration statement is
declared effective as awards under the plan are exercised and/or vest.

 

 

 



 

EXPLANATORY NOTE

 

On May 14, 2013, Mellanox Technologies, Ltd. (the “Registrant,” “we,” “us” or “our”) and its wholly owned subsidiary Mellanox Technologies, Inc. (“MTI”) entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Kotura, Inc. (“Kotura”), Karate Sub, Inc., a wholly owned subsidiary of MTI (“Merger Sub”) and GF Private Equity Group, LLC, as the shareholder representative. Pursuant to the Merger Agreement, at the effective time of the acquisition (the “Effective Time”), Merger Sub will be merged with and into Kotura (the “Merger”), with Kotura continuing after the Merger as the surviving corporation and a wholly owned subsidiary of MTI. Pursuant to and subject to the terms of the Merger Agreement, at the Effective Time, the Registrant will assume the Plan and certain stock options and restricted stock units of Kotura granted under the Plan, and such assumed stock options and restricted stock units will be exercisable (or will become exercisable in accordance with their terms) for and cover, respectively, the Registrant’s ordinary shares, subject to the terms and conditions of the underlying award agreements. The aggregate number of the Registrant’s ordinary shares to be subject to such assumed stock options and restricted stock units will be 31,653 shares and 145,425 shares, respectively. The Registrant is filing this Registration Statement to register such shares under the Securities Act.

 

PART I

 

INFORMATION REQUIRED IN THE SECTION 10(A) PROSPECTUS

 

The information called for in Part I of Form S-8 is not being filed with or included in this Form S-8 (by incorporation by reference or otherwise) in accordance with the rules and regulations of the Securities and Exchange Commission (the “Commission”).

 

1



 

PART II

 

INFORMATION REQUIRED IN THE REGISTRATION STATEMENT

 

Item 3.                          Incorporation of Documents by Reference

 

The Commission allows us to “incorporate by reference” the information we file with them, which means that we can disclose important information to you by referring you to those documents. The information incorporated by reference is considered to be part of this Registration Statement, and later information filed with the Commission will update and supersede this information. The following documents filed by us with the Commission are incorporated herein by reference

 

(a)          the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2012 filed on February 25, 2013, including all material incorporated by reference therein;

 

(b)          the Registrant’s Quarterly Report on Form 10-Q for the three months ended March 31, 2013 filed on May 3, 2013;

 

(c)           the Registrant’s Quarterly Report on Form 10-Q for the three months ended June 30, 2013 filed on August 2, 2013;

 

(d)          the Registrant’s Current Reports on Form 8-K dated May 15, 2013, May 30, 2013 and June 3, 2013; and

 

(e)           the description of the Registrant’s ordinary shares contained in the Registration Statement on Form 8-A (File No. 001-33299) filed on February 6, 2007 under Section 12(g) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), including all material incorporated by reference therein and any subsequently filed amendments and reports updating such description.

 

All documents subsequently filed by the Registrant pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act after the date of this Registration Statement and prior to the filing of a post-effective amendment which indicates that all securities offered hereby have been sold or which deregisters all securities then remaining unsold, shall be deemed to be incorporated by reference herein and to be a part of this Registration Statement from the date of the filing of such documents except as to any portion of any future annual or quarterly report to shareholders or document or current report furnished under current items 2.02 or 7.01 of Form 8-K that is not deemed filed under such provision. Any statement contained in a document incorporated or deemed to be incorporated by reference herein shall be deemed to be modified or superseded for purposes of this Registration Statement to the extent that a statement contained in this Registration Statement, or in any other subsequently filed document which also is or is deemed to be incorporated by reference in this Registration Statement, modifies or supersedes such statement. Any such statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this Registration Statement.

 

Under no circumstances will any information filed under current items 2.02 or 7.01 of Form 8-K be deemed incorporated herein by reference unless such Form 8-K expressly provides to the contrary.

 

Item 4.                          Description of Securities

 

Not applicable.

 

Item 5.                          Interests of Named Experts and Counsel

 

Not applicable.

 

2



 

Item 6.                          Indemnification of Directors and Officers

 

The Israeli Companies Law, 1999 (the “Companies Law”) allows us to insure our office holders against the following liabilities incurred for acts performed as an office holder:

 

·                   a breach of duty of loyalty to the company, to the extent that the office holder acted in good faith and had a reasonable basis to believe that the act would not prejudice the company;

·                   a breach of duty of care to the company or to a third party; and

·                   a financial liability imposed on or incurred by the office holder in favor of a third party.

 

We cannot, however, indemnify, exculpate or insure our office holders against any of the following:

 

·                   a breach of duty of loyalty, except, with respect to indemnification and insurance, to the extent that the office holder acted in good faith and had a reasonable basis to believe that the act would not prejudice the company;

·                   a breach of duty of care committed intentionally or recklessly, excluding a breach arising out of the negligent conduct of the office holder;

·                   an act or omission committed with intent to derive illegal personal benefit; or

·                   a fine, civil fine, financial sanction or forfeit levied against the office holder.

 

An Israeli company may not exculpate an office holder from liability for a breach of the duty of loyalty of the office holder. The company may, however, approve an office holder’s act performed in breach of the duty of loyalty, provided that the office holder acted in good faith, the act or its approval does not harm the company and the office holder discloses the nature of his or her personal interest in the act and all material facts and documents a reasonable time before discussion of the approval. An Israeli company may exculpate an office holder in advance from liability to the company, in whole or in part, for a breach of duty of care, but only if a provision authorizing such exculpation is inserted in its articles of association. Our amended and restated articles of association include such a provision. An Israeli company may also not exculpate a director for liability arising out of a prohibited dividend or distribution to shareholders.

 

Pursuant to the Companies Law, we may undertake to indemnify an office holder for financial obligation imposed on an office holder in favor of another person pursuant to judgments, settlements or arbitrators’ awards approved by a court, provided that such undertaking is limited to events that the board of directors deemed foreseeable based on the company’s actual activities at the time of the approval by the board of the undertaking to indemnify, and provided further that the indemnification is limited to an amount or criteria determined by the board of directors as reasonable under the circumstances and that the indemnification undertaking states the foreseeable activities and the amount or criteria. In addition, we may undertake to indemnify an office holder against the following liabilities incurred for acts performed as an office holder:

 

·                   reasonable litigation expenses, including attorneys’ fees, incurred by the office holder as a result of an investigation or proceeding instituted against him or her by an authority authorized to conduct such investigation or proceeding, provided that (i) no indictment was filed against such office holder as a result of such investigation or proceeding and (ii) either (A) no financial liability was imposed upon him or her as a substitute for the criminal proceeding as a result of such investigation or proceeding or (B) if the financial liability was imposed, it was imposed with respect to an offense that does not require proof of criminal intent or in connection with financial sanction; and

 

·                   reasonable litigation expenses, including attorneys’ fees, incurred by the office holder or imposed by a court in proceedings instituted against him or her by the company, on its behalf or by a third party or in connection with criminal proceedings in which the office holder was acquitted or in which the office holder was convicted of an offense that does not require proof of criminal intent.

 

Under the Companies Law, exculpation, indemnification and insurance of office holders must be approved by our compensation committee and our board of directors and, in respect of our Chief Executive Officer and our directors, by our shareholders.

 

Our amended and restated articles of association allow us to indemnify and insure our office holders to the fullest extent permitted by the Companies Law and the Israeli Securities Law, 1968 (the “Securities Law”). In accordance with the Securities Law, we may not indemnify or insure our office holders for a proceeding instituted against such office holder pursuant to the provisions of Chapter H’3, H’4 and I’1 under the Securities Law. In accordance with our amended and restated articles of association we may insure and undertake to indemnify our office holders, subject to the provisions of the Companies Law and the Securities Law,  for (a) expenses, including reasonable litigation expenses and legal fees, incurred by our office holders as a result of a proceeding instituted against them in relation to (1) infringements that may impose financial sanction pursuant to the provisions of Chapter H’3 under the Securities Law or (2) administrative infringements pursuant to the provisions of Chapter H’4 under the Securities Law or (3) infringements pursuant to the provisions of Chapter I’1 under the Securities Law and (b) payments made to injured parties of such infringement under Section 52ND(a)(1)(a) of the Securities Law.

 

In addition, we have entered into agreements with each of our office holders undertaking to indemnify them to the fullest extent permitted by law and to indemnify venture capital funds that are or were affiliated with or represented by such office holders party to such agreements. Indemnification with respect to financial obligation incurred by the office holder as a result of judgments, settlements or arbitrators’ awards approved by a court is limited to an amount or criteria determined by the board of directors as reasonable under the circumstances, and to events determined as foreseeable by our board of directors based on the company’s activities. Insurance is subject to our discretion depending on its availability, effectiveness and cost.

 

Item 7.          Exemption from Registration Claimed

 

Not applicable.

 

3



 

Item 8.                          Exhibits

 

Exhibit
Number

 

Description

 

 

 

4.1

 

Mellanox Technologies, Ltd. Amended and Restated Articles of Association (as amended on May 16, 2011) (filed as Exhibit A to the Registrant’s Definitive Proxy Statement on Schedule 14A (File No. 001-33299) filed on April 11, 2011 and incorporated herein by reference)

 

 

 

4.2

 

Kotura, Inc. Second Amended and Restated 2003 Stock Plan

 

 

 

4.3

 

Form of Stock Option Agreement under the Kotura, Inc. Second Amended and Restated 2003 Stock Plan

 

 

 

4.4

 

Form of Restricted Stock Unit Award Agreement under the Kotura, Inc. Second Amended and Restated 2003 Stock Plan

 

 

 

5.1

 

Opinion of Herzog Fox & Neeman

 

 

 

23.1

 

Consent of PricewaterhouseCoopers LLP, Independent Registered Public Accounting Firm

 

 

 

23.2

 

Consent of Herzog Fox & Neeman (included in Exhibit 5.1)

 

 

 

24.1

 

Power of Attorney (included on the signature page of this Registration Statement)

 

4



 

Item 9.                          Undertakings

 

(a)                                  The undersigned Registrant hereby undertakes:

 

(1) To file, during any period in which offers or sales are being made, a post-effective amendment to this Registration Statement:

 

(i) To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933;

 

(ii) To reflect in the prospectus any facts or events arising after the effective date of this Registration Statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the Registration Statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than 20 percent change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective Registration Statement; and

 

(iii) To include any material information with respect to the plan of distribution not previously disclosed in the Registration Statement or any material change to such information in the Registration Statement; provided , however , that paragraphs (i) and (ii) do not apply if the Registration Statement is on Form S-8, and the information required to be included in a post-effective amendment by those paragraphs is contained in reports filed with or furnished to the Commission by the Registrant pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the Registration Statement.

 

(2) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

 

(3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.

 

(b)

 

The undersigned Registrant hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933, each filing of the Registrant’s annual report pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan’s annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in the Registration Statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

 

(h)

 

Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.

 

5



 

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 Sunnyvale, California on August 14, 2013.

 

 

MELLANOX TECHNOLOGIES, LTD.

 

 

 

By:

s/ Eyal Waldman

 

 

Eyal Waldman, President and Chief Executive Officer
(Principal Executive Officer)

 

POWER OF ATTORNEY

 

KNOW ALL PERSONS BY THESE PRESENT, that each person whose signature appears below constitutes and appoints Eyal Waldman and Jacob Shulman, and each of them, his or her true and lawful attorneys-in-fact and agents, each with full power of substitution and resubstitution, for him or her and in his or her 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 order to effectuate the same as fully, to all intents and purposes, as he or she might or could do in person, hereby ratifying and confirming all that each of said attorneys-in-fact and agents, or any of them, 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 indicated on the dates indicated.

 

Signature

 

Title

 

Date

 

 

 

 

 

/s/ Eyal Waldman

 

President, Chief Executive Officer
and Director
(Principal Executive Officer)

 

August 14, 2013

Eyal Waldman

 

 

 

 

/s/ Jacob Shulman

 

Chief Financial Officer
(Principal Financial and Accounting Officer)
Authorized Representative in the United States

 

August 15, 2013

Jacob Shulman

 

 

 

 

 

 

 

 

 

/s/ Dov Baharav

 

Director

 

August 15, 2013

Dov Baharav

 

 

 

 

 

 

 

 

 

/s/ Glenda Dorchak

 

Director

 

August 12, 2013

Glenda Dorchak

 

 

 

 

 

 

 

 

 

/s/ Irwin Federman

 

Director

 

August 15, 2013

Irwin Federman

 

 

 

 

 

 

 

 

 

/s/ Amal M. Johnson

 

Director

 

August 15, 2013

Amal M. Johnson

 

 

 

 

 

 

 

 

 

/s/ Tom Riordan

 

Director

 

August 15, 2013

Tom Riordan

 

 

 

 

 

 

 

 

 

/s/ Thomas Weatherford

 

Director

 

August 15, 2013

Thomas Weatherford

 

 

 

 

 

6



 

INDEX TO EXHIBITS

 

Exhibit
Number

 

Description

 

 

 

4.1

 

Mellanox Technologies, Ltd. Amended and Restated Articles of Association (as amended on May 16, 2011) (filed as Exhibit A to the Registrant’s Definitive Proxy Statement on Schedule 14A (File No. 001-33299) filed on April 11, 2011 and incorporated herein by reference)

 

 

 

4.2

 

Kotura, Inc. Second Amended and Restated 2003 Stock Plan

 

 

 

4.3

 

Form of Stock Option Agreement under the Kotura, Inc. Second Amended and Restated 2003 Stock Plan

 

 

 

4.4

 

Form of Restricted Stock Unit Award Agreement under the Kotura, Inc. Second Amended and Restated 2003 Stock Plan

 

 

 

5.1

 

Opinion of Herzog Fox & Neeman

 

 

 

23.1

 

Consent of PricewaterhouseCoopers LLP, Independent Registered Public Accounting Firm

 

 

 

23.2

 

Consent of Herzog Fox & Neeman (included in Exhibit 5.1)

 

 

 

24.1

 

Power of Attorney (included on the signature page of this Registration Statement)

 


Exhibit 4.2

 

KOTURA, INC.

 

SECOND AMENDED AND RESTATED
2003 STOCK PLAN

 

ORIGINALLY ADOPTED ON OCTOBER 27, 2003

 

AS AMENDED AND RESTATED ON OCTOBER 7, 2009 AND MAY 14, 2013

 



 

TABLE OF CONTENTS

 

 

Page No.

 

 

SECTION 1. ESTABLISHMENT AND PURPOSE

1

 

 

SECTION 2. ADMINISTRATION

1

 

 

 

 

 

(a)

Committees of the Board of Directors

1

 

(b)

Authority of the Board of Directors

1

 

 

SECTION 3. ELIGIBILITY

1

 

 

 

 

 

(a)

General Rule

1

 

(b)

Ten-Percent Shareholders

1

 

 

SECTION 4. STOCK SUBJECT TO PLAN

2

 

 

 

 

 

(a)

Basic Limitation

2

 

(b)

Additional Shares

2

 

 

SECTION 5. TERMS AND CONDITIONS OF AWARDS OR SALES

2

 

 

 

 

 

(a)

Stock Purchase Agreement

2

 

(b)

Duration of Offers and Nontransferability of Rights

2

 

(c)

Purchase Price

2

 

(d)

Withholding Taxes

2

 

(e)

Restrictions on Transfer of Shares and Minimum Vesting

2

 

 

SECTION 6. TERMS AND CONDITIONS OF RESTRICTED STOCK UNITS

3

 

 

 

 

 

(a)

RSU Agreement

3

 

(b)

Basic Term

3

 

(c)

Settlement

3

 

(d)

Termination of Service

3

 

(e)

Transferability of Restricted Stock Units

3

 

(f)

Withholding Taxes

3

 

(g)

No Rights as a Shareholder

3

 

 

SECTION 7. TERMS AND CONDITIONS OF OPTIONS

3

 

 

 

 

 

(a)

Stock Option Agreement

3

 

(b)

Number of Shares

4

 

(c)

Exercise Price

4

 

(d)

Exercisability

4

 

(e)

Basic Term

4

 

(f)

Termination of Service (Except by Death)

4

 

(g)

Leaves of Absence

5

 

i



 

 

(h)

Death of Optionee

5

 

(i)

Restrictions on Transfer of Shares and Minimum Vesting

5

 

(j)

Transferability of Options

5

 

(k)

Withholding Taxes

5

 

(l)

No Rights as a Shareholder

6

 

(m)

Modification, Extension and Assumption of Options

6

 

 

SECTION 8. PAYMENT FOR SHARES

6

 

 

 

 

 

(a)

General Rule

6

 

(b)

Surrender of Stock

6

 

(c)

Services Rendered

6

 

(d)

Promissory Note

6

 

(e)

Exercise/Sale

7

 

(f)

Exercise/Pledge

7

 

 

SECTION 9. ADJUSTMENT OF SHARES

7

 

 

 

 

 

(a)

General

7

 

(b)

Mergers and Consolidations

7

 

(c)

Reservation of Rights

8

 

 

SECTION 10. SECURITIES LAW REQUIREMENTS

9

 

 

 

 

 

(a)

General

9

 

(b)

Financial Reports

9

 

 

SECTION 11. NO RETENTION RIGHTS

9

 

 

SECTION 12. DURATION AND AMENDMENTS

9

 

 

 

 

 

(a)

Term of the Plan

9

 

(b)

Right to Amend or Terminate the Plan

9

 

(c)

Effect of Amendment or Termination

10

 

 

SECTION 13. SECTION 409A

10

 

 

SECTION 14. DEFINITIONS

10

 

ii



 

KOTURA, INC. SECOND AMENDED AND RESTATED 2003 STOCK PLAN

 

SECTION 1.  ESTABLISHMENT AND PURPOSE.

 

The purpose of the Plan is to offer selected persons an opportunity to acquire a proprietary interest in the success of the Company, or to increase such interest, by purchasing Shares of the Company’s Stock.  The Plan provides both for the direct award or sale of Shares, for the grant of Options to purchase Shares and for the grant of Restricted Stock Units.  Options granted under the Plan may include Nonstatutory Options as well as ISOs intended to qualify under Section 422 of the Code.

 

The Plan amends and restates in its entirety the First Amended Plan.  Capitalized terms are defined in Section 13.

 

SECTION 2.  ADMINISTRATION.

 

(a)                                  Committees of the Board of Directors .  The Plan may be administered by one or more Committees.  Each Committee shall consist of one or more members of the Board of Directors who have been appointed by the Board of Directors.  Each Committee shall have such authority and be responsible for such functions as the Board of Directors has assigned to it.  If no Committee has been appointed, the entire Board of Directors shall administer the Plan.  Any reference to the Board of Directors in the Plan shall be construed as a reference to the Committee (if any) to whom the Board of Directors has assigned a particular function.

 

(b)                                  Authority of the Board of Directors .  Subject to the provisions of the Plan, the Board of Directors shall have full authority and discretion to take any actions it deems necessary or advisable for the administration of the Plan.  All decisions, interpretations and other actions of the Board of Directors shall be final and binding on all Purchasers, all Grantees, all Optionees and all persons deriving their rights from a Purchaser, Grantee or Optionee.

 

SECTION 3.  ELIGIBILITY.

 

(a)                                  General Rule .  Only Employees, Outside Directors and Consultants shall be eligible for the grant of Nonstatutory Options or Restricted Stock Units or the direct award or sale of Shares.  Only Employees shall be eligible for the grant of ISOs.

 

(b)                                  Ten-Percent Shareholders .  A person who owns more than 10% of the total combined voting power of all classes of outstanding stock of the Company, its Parent or any of its Subsidiaries shall not be eligible for designation as an Optionee with respect to an ISO unless (i) the Exercise Price of such ISO is at least 110% of the Fair Market Value of a Share on the date of grant, and (ii) such ISO by its terms is not exercisable after the expiration of five years from the date of grant.  For purposes of this Subsection (b), in determining stock ownership, the attribution rules of Section 424(d) of the Code shall be applied.

 



 

SECTION 4.  STOCK SUBJECT TO PLAN.

 

(a)                                  Basic Limitation .  Not more than 9,230,000 Shares may be issued under the Plan (subject to Subsection (b) below and Section 9).  The number of Shares that are subject to Options, Restricted Stock Units or other rights outstanding at any time under the Plan shall not exceed the number of Shares that 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.  Shares offered under the Plan may be authorized but unissued Shares or treasury Shares.

 

(b)                                  Additional Shares .  In the event that Shares previously issued under the Plan are reacquired by the Company, such Shares shall be added to the number of Shares then available for issuance under the Plan.  In the event that an outstanding Option, Restricted Stock Unit or other right for any reason expires or is canceled under the Plan, the Shares allocable to the expired or cancelled and, if applicable, unexercised portion of such Option, Restricted Stock Unit or other right shall be added to the number of Shares then available for issuance under this Plan.

 

SECTION 5.  TERMS AND CONDITIONS OF AWARDS OR SALES.

 

(a)                                  Stock Purchase Agreement .  Each award or sale of Shares under the Plan (other than upon exercise of an Option or pursuant to the settlement of a Restricted Stock Unit) shall be evidenced by a Stock Purchase Agreement between the Purchaser and the Company.  Such award or sale 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 Board of Directors deems appropriate for inclusion in a Stock Purchase Agreement.  The provisions of the various Stock Purchase Agreements entered into under the Plan need not be identical.

 

(b)                                  Duration of Offers and Nontransferability of Rights .  Any right to acquire Shares under the Plan (other than an Option or Restricted Stock Unit) shall automatically expire if not exercised by the Purchaser within 30 days after the grant of such right was communicated to the Purchaser by the Company.  Such right shall not be transferable and shall be exercisable only by the Purchaser to whom such right was granted.

 

(c)                                   Purchase Price .  The Board of Directors shall determine the Purchase Price at its sole discretion.  The Purchase Price shall be payable in a form described in Section 8.

 

(d)                                  Withholding Taxes .  As a condition to the purchase of Shares, the Purchaser shall make such arrangements as the Board of Directors may require for the satisfaction of any federal, state, local or foreign withholding tax obligations that may arise in connection with such purchase.

 

(e)                                   Restrictions on Transfer of Shares and Minimum Vesting .  Any Shares awarded or sold under the Plan shall be subject to such special forfeiture conditions, rights of repurchase, rights of first refusal and other transfer restrictions as the Board of Directors may determine.  Such restrictions shall be set forth in the applicable Stock Purchase Agreement and shall apply in addition to any restrictions that may apply to holders of Shares generally.

 

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SECTION 6.  TERMS AND CONDITIONS OF RESTRICTED STOCK UNITS.

 

(a)                                  RSU Agreement .  Each award of Restricted Stock Units under the Plan shall be evidenced by an RSU Agreement between the Grantee and the Company.  Restricted Stock Units 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 Board of Directors deems appropriate for inclusion in an RSU Agreement.  The provisions of the various RSU Agreements entered into under the Plan need not be identical.

 

(b)                                  Basic Term .  The RSU Agreement shall specify the term of the Restricted Stock Units.  The term shall not exceed 10 years from the date of grant.  Subject to the preceding sentence, the Board of Directors at its sole discretion shall determine when an award of Restricted Stock Units is to expire.

 

(c)                                   Settlement .  Upon the vesting of a Restricted Stock Unit, the Grantee shall be entitled to receive from the Company one Share or an amount of cash or other property equal to the Fair Market Value of one Share on the settlement date, as provided in the applicable RSU Agreement.  The Committee may provide that settlement of Restricted Stock Units shall occur upon or as soon as reasonably practicable after the vesting of the Restricted Stock Units or shall instead be deferred, on a mandatory basis or at the election of the Grantee, in a manner that complies with Section 409A of the Code.

 

(d)                                  Termination of Service .  Except to the extent otherwise provided by the Committee in an RSU Agreement, if a Grantee’s Service terminates for any reason (including due to an Involuntary Termination), then the Grantee’s Restricted Stock Units (to the extent then-unvested) shall be forfeited and cancelled without consideration therefor.

 

(e)                                   Transferability of Restricted Stock Units .  Restricted Stock Units shall be transferable by the Grantee only by (i) a beneficiary designation, (ii) a will or (iii) the laws of descent and distribution, except as provided in the next sentence.  If the applicable RSU Agreement so provides, Restricted Stock Units shall also be transferable by gift or domestic relations order to a Family Member of the Grantee.

 

(f)                                    Withholding Taxes .  As a condition to the grant of an award of Restricted Stock Units and/or the issuance of Shares upon settlement of Restricted Stock Units, the Grantee shall make such arrangements as the Board of Directors may require for the satisfaction of any federal, state, local or foreign withholding tax obligations that may arise in connection with such grant and/or issuance, as applicable.

 

(g)                                   No Rights as a Shareholder .  A Grantee, or a transferee of a Grantee, shall have no rights as a shareholder with respect to any Shares covered by the Grantee’s Restricted Stock Units until the Shares underlying such Restricted Stock Units are issued to such person upon the settlement of such Restricted Stock Units.

 

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.  The

 

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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 Board of Directors deems appropriate for inclusion in a Stock Option Agreement.  The provisions of the various Stock Option Agreements entered into under the Plan need not be identical.

 

(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 9.  The Stock Option Agreement shall also specify whether the Option is an ISO or a Nonstatutory Option.

 

(c)                                   Exercise Price .  Each Stock Option Agreement shall specify the Exercise Price, which shall not be less than 100% of the Fair Market Value of a Share on the date of grant, and a higher percentage may be required by Section 3(b).  Subject to the preceding sentence, the Exercise Price under any Option shall be determined by the Board of Directors at its sole discretion.  The Exercise Price shall be payable in a form described in Section 8.

 

(d)                                  Exercisability .  Each Stock Option Agreement shall specify the date when all or any installment of the Option is to become exercisable.  No Option shall be exercisable unless the Optionee has delivered an executed copy of the Stock Option Agreement to the Company.  The Board of Directors shall determine the exercisability provisions of the Stock Option Agreement at its sole discretion.  All of an Optionee’s Options shall become exercisable in full if Section 9(b)(iv) applies.

 

(e)                                   Basic Term .  The Stock Option Agreement shall specify the term of the Option.  The term shall not exceed 10 years from the date of grant, and a shorter term may be required by Section 3(b).  Subject to the preceding sentence, the Board of Directors at its sole discretion shall determine when an Option is to expire.

 

(f)                                    Termination of Service (Except by Death) .  If an Optionee’s Service terminates for any reason other than the Optionee’s death, then the Optionee’s Options shall expire on the earliest of the following occasions:

 

(i)                                      The expiration date determined pursuant to Subsection (e) above;

 

(ii)                                   The date twelve months following the date of an Involuntary Termination occurring within eighteen months following a Change in Control;

 

(iii)                                The date 30 days after the termination of the Optionee’s Service for any reason other than Disability or as set forth under Subsection (f)(ii) above, or such later date as the Board of Directors may determine; or

 

(iv)                               The date six months after the termination of the Optionee’s Service by reason of Disability, or such later date as the Board of Directors may determine.

 

The Optionee may exercise all or part of the Optionee’s Options at any time before the expiration of such Options under the preceding sentence, but only to the extent that such Options had become exercisable before the Optionee’s Service terminated (or became exercisable as a result of the termination) and the underlying Shares had vested before the Optionee’s Service

 

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terminated (or vested as a result of the termination).  The balance of such Options shall lapse when the Optionee’s Service terminates.  In the event that the Optionee dies after the termination of the Optionee’s Service but before the expiration of the Optionee’s Options, all or part of such Options may be exercised (prior to expiration) by the executors or administrators of the Optionee’s estate or by any person who has acquired such Options directly from the Optionee by beneficiary designation, bequest or inheritance, but only to the extent that such Options had become exercisable before the Optionee’s Service terminated (or became exercisable as a result of the termination) and the underlying Shares had vested before the Optionee’s Service terminated (or vested as a result of the termination).

 

(g)                                   Leaves of Absence .  For purposes of Subsection (f) above, Service shall be deemed to continue while the Optionee is on a bona fide leave of absence, if such leave was approved by the Company in writing and if continued crediting of Service for this purpose is expressly required by the terms of such leave or by applicable law (as determined by the Company).

 

(h)                                  Death of Optionee .  If an Optionee dies while the Optionee is in Service, then the Optionee’s Options shall expire on the earlier of the following dates:

 

(i)                                      The expiration date determined pursuant to Subsection (e) above; or

 

(ii)                                   The date six months after the Optionee’s death, or such later date as the Board of Directors may determine.

 

All or part of the Optionee’s Options may be exercised at any time before the expiration of such Options under the preceding sentence by the executors or administrators of the Optionee’s estate or by any person who has acquired such Options directly from the Optionee by beneficiary designation, bequest or inheritance, but only to the extent that such Options had become exercisable before the Optionee’s death (or became exercisable as a result of the death) and the underlying Shares had vested before the Optionee’s death (or vested as a result of the Optionee’s death). The balance of such Options shall lapse when the Optionee dies.

 

(i)                                      Restrictions on Transfer of Shares and Minimum Vesting .  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 Board of Directors may determine.  Such restrictions shall be set forth in the applicable Stock Option Agreement and shall apply in addition to any restrictions that may apply to holders of Shares generally.

 

(j)                                     Transferability of Options .  An Option shall be transferable by the Optionee only by (i) a beneficiary designation, (ii) a will or (iii) the laws of descent and distribution, except as provided in the next sentence.  If the applicable Stock Option Agreement so provides, a Nonstatutory Option shall also be transferable by gift or domestic relations order to a Family Member of the Optionee.  An ISO may be exercised during the lifetime of the Optionee only by the Optionee or by the Optionee’s guardian or legal representative.

 

(k)                                  Withholding Taxes .  As a condition to the exercise of an Option, the Optionee shall make such arrangements as the Board of Directors may require for the satisfaction

 

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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 Board of Directors 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.

 

(l)                                      No Rights as a Shareholder .  An Optionee, or a transferee of an Optionee, shall have no rights as a shareholder with respect to any Shares covered by the Optionee’s Option until such person becomes entitled to receive such Shares by filing a notice of exercise and paying the Exercise Price pursuant to the terms of such Option.

 

(m)                              Modification, Extension and Assumption of Options .  Within the limitations of the Plan, the Board of Directors may modify, extend or assume outstanding Options or may accept the cancellation of outstanding Options (whether granted by the Company or another issuer) 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.  The foregoing notwithstanding, no modification of an Option shall, without the consent of the Optionee, impair the Optionee’s rights or increase the Optionee’s obligations under such Option.

 

SECTION 8.  PAYMENT FOR SHARES.

 

(a)                                  General Rule .  The entire Purchase Price or Exercise Price of Shares issued under the Plan shall be payable in cash or cash equivalents at the time when such Shares are purchased, except as otherwise provided in this Section 8.

 

(b)                                  Surrender of Stock .  At the discretion of the Board of Directors, all or any part of the Exercise Price may be paid by surrendering, or attesting to the ownership of, Shares that are already owned by the Optionee.  Such Shares shall be surrendered to the Company in good form for transfer and shall be valued at their Fair Market Value on the date when the Option is exercised.  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 Board of Directors, Shares may be awarded under the Plan in consideration of services rendered to the Company, a Parent or a Subsidiary prior to the award.

 

(d)                                  Promissory Note .  At the discretion of the Board of Directors, all or a portion of the Exercise Price or Purchase Price (as the case may be) of Shares issued under the Plan may be paid with a full-recourse promissory note; provided, however, that payment of any portion of the Exercise Price or Purchase Price by promissory note shall not be permitted where such loan would be prohibited by applicable laws, regulations and rules of the Securities and Exchange Commission and any other governmental agency having jurisdiction. However, the par value of the Shares, if newly issued, shall be paid in cash or cash equivalents.  The Shares shall be pledged as security for payment of the principal amount of the promissory note and interest thereon.  The interest rate payable under the terms of the promissory note shall not be less than the minimum rate (if any) required to avoid the imputation of additional interest under the Code.

 

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Subject to the foregoing, the Board of Directors (at its sole discretion) shall specify the term, interest rate, amortization requirements (if any) and other provisions of such note; provided, however, that each such note shall comply with all applicable laws, regulations and rules of the Board of Governors of the Federal Reserve System and any other governmental agency having jurisdiction.

 

(e)                                   Exercise/Sale .  To the extent that a Stock Option Agreement so provides, and if Stock is publicly traded, payment may be made all or in part by the delivery (on a form prescribed by the Company) of an irrevocable direction to a securities broker approved by the Company to sell Shares and to deliver all or part of the sales proceeds to the Company in payment of all or part of the Exercise Price and any withholding taxes.

 

(f)                                    Exercise/Pledge .  To the extent that a Stock Option Agreement so provides, and if Stock is publicly traded, payment may be made all or in part by the delivery (on a form prescribed by the Company) of an irrevocable direction to pledge Shares to a securities broker or lender approved by the Company, as security for a loan, and to deliver all or part of the loan proceeds to the Company in payment of all or part of the Exercise Price and any withholding taxes.

 

SECTION 9.  ADJUSTMENT OF SHARES.

 

(a)                                  General .  In the event of a subdivision of the outstanding Stock, a declaration of a dividend payable in Shares or a combination or consolidation of the outstanding Stock into a lesser number of Shares, corresponding adjustments shall automatically be made in each of (i) the number of Shares available for future grants under Section 4, (ii) the number of Shares covered by each outstanding Option and each outstanding Restricted Stock Unit and (iii) the Exercise Price under each outstanding Option.  In the event of a declaration of an extraordinary dividend payable in a form other than Shares in an amount that has a material effect on the Fair Market Value of the Stock, a recapitalization, a spin-off, a reclassification or a similar occurrence, the Board of Directors at its sole discretion may make appropriate adjustments in one or more of (i) the number of Shares available for future grants under Section 4, (ii) the number of Shares covered by each outstanding Option and/or each outstanding Restricted Stock Unit and/or (iii) the Exercise Price under each outstanding Option.

 

(b)                                  Mergers and Consolidations .  In the event that the Company is a party to a merger or consolidation, all outstanding Options and Restricted Stock Units shall be subject to the agreement of merger or consolidation.  Such agreement shall provide for one or more of the following:

 

(i)                                      The continuation of such outstanding Options and/or Restricted Stock Units by the Company (if the Company is the surviving corporation).

 

(ii)                                   The assumption of such outstanding Options and/or Restricted Stock Units by the surviving corporation or its parent, provided, that any such assumption of Options shall be conducted in a manner that complies with Section 424(a) of the Code (whether or not such Options are ISOs).

 

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(iii)                                The substitution by the surviving corporation or its parent of new options for such outstanding Options and/or Restricted Stock Units, provided, that any such substitution of Options shall be conducted in a manner that complies with Section 424(a) of the Code (whether or not such Options are ISOs).

 

(iv)                               Full exercisability of such outstanding Options and full vesting of the Shares subject to such Options and/or Restricted Stock Units, followed by the cancellation of such Options and/or Restricted Stock Units.  The full exercisability of such Options and full vesting of the Shares subject to such Options and/or Restricted Stock Units may be contingent on the closing of such merger or consolidation.  The Optionees shall be able to exercise such Options during a period of not less than five full business days preceding the closing date of such merger or consolidation, unless (A) a shorter period is required to permit a timely closing of such merger or consolidation and (B) such shorter period still offers the Optionees a reasonable opportunity to exercise such Options.  Any exercise of such Options during such period may be contingent on the closing of such merger or consolidation.

 

(v)                                  The cancellation of such outstanding Options and a payment to the Optionees equal to the excess of (A) the Fair Market Value of the Shares subject to such Options (whether or not such Options are then exercisable or such Shares are then vested) as of the closing date of such merger or consolidation over (B) their Exercise Price and/or the cancellation of such outstanding Restricted Stock Units and a payment to the Grantees equal to the Fair Market Value of the Shares subject to such Restricted Stock Units (whether or not such Shares are then vested).  Such payment shall be made in the form of cash, cash equivalents, or securities of the surviving corporation or its parent with a Fair Market Value equal to the required amount.  Such payment may be made in installments and may be deferred until the date or dates when such Options would have become exercisable or such Shares would have vested.  Such payment may be subject to vesting based on the Optionee’s or the Grantee’s continuing Service, provided that the vesting schedule shall not be less favorable to the Optionees or Grantees than the schedule under which such Options would have become exercisable or such Shares would have vested.  If the Exercise Price of the Shares subject to such Options exceeds the Fair Market Value of such Shares, then such Options may be cancelled without making a payment to the Optionees.  For purposes of this Paragraph (v), the Fair Market Value of any security shall be determined without regard to any vesting conditions that may apply to such security.

 

(c)                                   Reservation of Rights .  Except as provided in this Section 9, an Optionee, Grantee or Purchaser shall have no rights by reason of (i) any subdivision or consolidation of shares of stock of any class, (ii) the payment of any dividend or (iii) any other increase or decrease in the number of shares of stock of any class.  Any issuance 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, as applicable, of Shares subject to an Option or Restricted Stock Unit.  The grant of an Option or Restricted Stock Unit 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

 

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business structure, to merge or consolidate or to dissolve, liquidate, sell or transfer all or any part of its business or assets.

 

SECTION 10.  SECURITIES LAW REQUIREMENTS.

 

(a)                                  General .  Shares shall not be issued under the Plan unless the issuance and delivery of such Shares comply with (or are 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 or other securities market on which the Company’s securities may then be traded.

 

(b)                                  Financial Reports .  The Company each year shall furnish to Optionees, Grantees, Purchasers and shareholders who have received Stock under the Plan its balance sheet and income statement, unless such Optionees, Grantees, Purchasers or shareholders are key Employees whose duties with the Company assure them access to equivalent information.  Such balance sheet and income statement need not be audited.

 

SECTION 11.  NO RETENTION RIGHTS.

 

Nothing in the Plan or in any right, Restricted Stock Unit or Option granted under the Plan shall confer upon the Purchaser, Grantee or Optionee any right to continue in Service for any period of specific duration or interfere with or otherwise restrict in any way the rights of the Company (or any Parent or Subsidiary employing or retaining the Purchaser, Grantee or Optionee) or of the Purchaser, Grantee or Optionee, which rights are hereby expressly reserved by each, to terminate his or her Service at any time and for any reason, with or without cause.

 

SECTION 12.  DURATION AND AMENDMENTS.

 

(a)                                  Term of the Plan .  The First Amended Plan became effective on October 7, 2009.  This Plan, as amended and restated, shall become effective on the date of its adoption by the Board of Directors, subject to the approval of the Company’s shareholders.  If the shareholders fail to approve the Plan within 12 months after its adoption by the Board of Directors, then any grants, exercises or sales that have already occurred under the Plan shall be rescinded and no additional grants, exercises or sales shall thereafter be made under the Plan.  The Plan shall terminate automatically 10 years after the later of (i) its adoption by the Board of Directors or (ii) the most recent increase in the number of Shares reserved under Section 4 that was approved by the Company’s shareholders.  The Plan 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, suspend or terminate the Plan at any time and for any reason; provided, however, that any amendment of the Plan shall be subject to the approval of the Company’s shareholders if it (i) increases the number of Shares available for issuance under the Plan (except as provided in Section 9) or (ii) materially changes the class of persons who are eligible for the grant of ISOs.  Shareholder approval shall not be required for any other amendment of the Plan.  If the shareholders fail to approve an increase in the number of Shares reserved under Section 4 within 12 months after its adoption by the Board of Directors, then any grants, exercises or sales that

 

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have already occurred in reliance on such increase shall be rescinded and no additional grants, exercises or sales shall thereafter be made in reliance on such increase.

 

(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 or Restricted Stock Unit previously granted under the Plan.

 

SECTION 13.  SECTION 409A.

 

Options, Restricted Stock Units and sales or awards of Shares under the Plan are intended either to be exempt from the rules of Section 409A of the Code or to satisfy those rules, and the Plan and such awards shall be construed accordingly.  Granted rights may be modified at any time, in the Board of Director’s discretion, so as to increase the likelihood of exemption from or compliance with the rules of Section 409A of the Code.

 

SECTION 14.  DEFINITIONS.

 

(a)                                  Board of Directors ” shall mean the Board of Directors of the Company, as constituted from time to time.

 

(b)                                  Cause ” shall mean:

 

(i)                                      An unauthorized use or disclosure by the Optionee or Grantee of the Company’s confidential information or trade secrets;

 

(ii)                                   A material failure by the Optionee or Grantee to comply with the Company’s written policies or rules;

 

(iii)                                The Optionee’s or Grantee’s conviction of, or plea of “guilty” or “no contest” to, a felony under the laws of the United States or any state thereof; or

 

(iv)                               The Optionee’s or Grantee’s gross misconduct.

 

(c)                                   Change in Control ” shall mean (i) the consummation of a merger or consolidation of the Company with or into another entity or (ii) the dissolution, liquidation or winding up of the Company.  The foregoing notwithstanding, a merger or consolidation of the Company shall not constitute a “Change in Control” if immediately after such merger or consolidation a majority of the voting power of the capital stock of the continuing or surviving entity, or any direct or indirect parent corporation of such continuing or surviving entity, will be owned by the persons who were the Company’s shareholders immediately prior to such merger or consolidation in substantially the same proportions as their ownership of the voting power of the Company’s capital stock immediately prior to such merger or consolidation. Notwithstanding the foregoing, to the extent any amount constituting “nonqualified deferred compensation” subject to Section 409A of the Code would become payable under an Option or a sale or award of Shares by reason of a Change of Control, it shall become payable only if the event or circumstances constituting the Change of Control would also constitute a change in the

 

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ownership or effective control of the Company, or a change in the ownership of a substantial portion of the Company’s assets, within the meaning of subsection (a)(2)(A)(v) of Section 409A of the Code.

 

(d)                                  Code ” shall mean the Internal Revenue Code of 1986, as amended.

 

(e)                                   Committee ” shall mean a committee of the Board of Directors, as described in Section 2(a).

 

(f)                                    Company ” shall mean Kotura, Inc., a California corporation formerly known as Arroyo Optics, Inc.

 

(g)                                   Consultant ” shall mean a person who performs bona fide services for the Company, a Parent or a Subsidiary as a consultant or advisor, excluding Employees and Outside Directors.

 

(h)                                  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.

 

(i)                                      Employee ” shall mean any individual who is a common-law employee of the Company, a Parent or a Subsidiary.

 

(j)                                     Exercise Price ” shall mean the amount for which one Share may be purchased upon exercise of an Option, as specified by the Board of Directors in the applicable Stock Option Agreement.

 

(k)                                  Fair Market Value ” shall mean the fair market value of a Share, as determined by the Board of Directors in good faith; provided, however, that Fair Market Value shall be determined consistent with the requirements of Section 409A of the Code.  Such determination shall be conclusive and binding on all persons.

 

(l)                                      Family Member ” shall mean (i) any child, stepchild, grandchild, parent, stepparent, grandparent, spouse, former spouse, sibling, niece, nephew, mother-in-law, father-in- law, son-in-law, daughter-in-law, brother-in-law or sister-in-law, including adoptive relationships, (ii) any person sharing the Optionee’s or Grantee’s household (other than a tenant or employee), (iii) a trust in which persons described in Clause (i) or (ii) have more than 50% of the beneficial interest, (iv) a foundation in which persons described in Clause (i) or (ii) or the Optionee or Grantee control the management of assets and (v) any other entity in which persons described in Clause (i) or (ii) or the Optionee or Grantee own(s) more than 50% of the voting interests.

 

(m)                              First Amended Plan ” shall mean the Kotura, Inc. Amended and Restated 2003 Stock Plan.

 

(n)                                  Grantee ” shall mean a person who has been granted an award of Restricted Stock Units under the Plan.

 

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(o)                                  Involuntary Termination ” shall mean the termination of the Optionee’s or Grantee’s Service by reason of:

 

(i)                                      The involuntary discharge of the Optionee or Grantee by the Company (or the Parent or Subsidiary employing him or her) for reasons other than Cause; or

 

(ii)                                   The voluntary resignation of the Optionee or Grantee following (A) a change in the Optionee’s position with the Company (or the Parent or Subsidiary employing him or her) that materially reduces his or her level of authority or responsibility, (B) a reduction in the Optionee’s or Grantee’s base salary by more than 15% or (C) receipt of notice that the Optionee’s or Grantee’s principal workplace will be relocated more than 50 miles.

 

(p)                                  ISO ” shall mean an employee incentive stock option described in Section 422(b) of the Code.

 

(q)                                  Nonstatutory Option ” shall mean a stock option not described in Sections 422(b) or 423(b) of the Code.

 

(r)                                     Option ” shall mean an ISO or Nonstatutory Option granted under the Plan and entitling the holder to purchase Shares.

 

(s)                                    Optionee ” shall mean a person who holds an Option.

 

(t)                                     Outside Director ” shall mean a member of the Board of Directors who is not an Employee.

 

(u)                                  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 considered a Parent commencing as of such date.

 

(v)                                  Plan ” shall mean this Kotura, Inc. Second Amended and Restated 2003 Stock Plan.

 

(w)                                Purchase Price ” shall mean the consideration for which one Share may be acquired under the Plan (other than upon exercise of an Option or pursuant to the settlement of a Restricted Stock Unit), as specified by the Board of Directors.

 

(x)                                  Purchaser ” shall mean a person to whom the Board of Directors has offered the right to acquire Shares under the Plan (other than upon exercise of an Option or pursuant to the settlement of a Restricted Stock Unit).

 

(y)                                  Restricted Stock Unit ” shall mean an unfunded, unsecured right to receive, on the applicable settlement date, one Share or an amount in cash or other consideration

 

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determined by the Committee equal to the value thereof as of such payment date, which right may be subject to certain vesting conditions and other restrictions.

 

(z)                                   RSU Agreement ” shall mean the agreement between the Company and a Grantee that contains the terms, conditions and restrictions pertaining to the Grantee’s Restricted Stock Units.

 

(aa)                           Service ” shall mean service as an Employee, Outside Director or Consultant.

 

(bb)                           Share ” shall mean one share of Stock, as adjusted in accordance with Section 9 (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 the Optionee’s Option.

 

(ee)                             Stock Purchase Agreement ” shall mean the agreement between the Company and a Purchaser who acquires Shares under the Plan that contains the terms, conditions and restrictions pertaining to the acquisition of such Shares.

 

(ff)                               Subsidiary ” shall mean any corporation (other than the Company) in an unbroken chain of corporations beginning with the Company, if each of the corporations other than the last corporation in the unbroken chain 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 Subsidiary on a date after the adoption of the Plan shall be considered a Subsidiary commencing as of such date.

 

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Exhibit 4.3

 

KOTURA, INC. AMENDED AND RESTATED 2003 STOCK PLAN

 

NOTICE OF STOCK OPTION GRANT

 

You have been granted the following option to purchase shares of the Common Stock of Kotura, Inc. (the “Company”), a California corporation. :

 

Name of Optionee:

 

<<FirstName>> <<LastName>>

 

 

 

Total Number of Shares:

 

#,###

 

 

 

Type of Option:

 

Incentive Stock Option (ISO)

 

 

 

Exercise Price Per Share:

 

$#.##

 

 

 

Date of Grant:

 

Month/Day/Year

 

 

 

Date Exercisable:

 

Subject to the conditions set forth in the Stock Option Agreement attached below, this option may be exercised prior to its expiration at the time or times set forth under the heading “Vesting Schedule” below.

 

 

 

Vesting Commencement Date:

 

Month/Day/Year

 

 

 

Initial Vesting Date:

 

Month/Day/Year

 

 

 

Vested Shares :

Except as provided in the Stock Option Agreement, the number of Vested Shares (disregarding any resulting fractional share) as of any date is determined by multiplying the Number of Option Shares by the Vested Ratio determined as of such date as follows:

 

 

 

 

 

Vested Ratio

 

 

 

 

 

 

 

Prior to Initial Vesting Date

 

#

 

 

 

 

 

 

 

On Initial Vesting Date, provided the Optionee’s Service has not terminated prior to such date

 

#/#

 

 

 

 

 

 

 

Plus :

 

 

 

 

 

 

 

 

 

For each full month of the Optionee’s continuous Service from Initial Vesting Date until the Vested Ratio equals 1/1, an additional

 

#/##

 

 

By their signatures below, the Company and the Optionee agree that the Option is governed by this Notice and by the provisions of the Plan and the Stock Option Agreement, both of which are attached to and made a part of this document.  The Optionee acknowledges receipt of a copy of the Plan and the Stock Option Agreement, represents that the Optionee has read and is familiar with their provisions, and hereby accepts the Option subject to all of their terms and conditions.

 

Expiration Date:

 

Month/Day/Year.  This option expires earlier if the Optionee’s Service terminates earlier, as provided in Section 6 of the Stock Option Agreement.

 



 

By your signature and the signature of the Company’s representative below, you and the Company agree that this option is granted under and governed by the terms and conditions of the 2003 Stock Plan and the Stock Option Agreement, both of which are attached to and made a part of this document.

 

OPTIONEE:

 

KOTURA, INC.

 

 

 

 

 

 

 

 

By:

 

 

 

 

 

 

 

Title:

 

 



 

THE OPTION GRANTED PURSUANT TO THIS AGREEMENT AND THE SHARES ISSUABLE UPON THE EXERCISE THEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, PLEDGED, OR OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION THEREOF UNDER SUCH ACT OR AN OPINION OF COUNSEL, SATISFACTORY TO THE COMPANY AND ITS COUNSEL, THAT SUCH REGISTRATION IS NOT REQUIRED.

 

KOTURA, INC. 2003 STOCK PLAN:

STOCK OPTION AGREEMENT

 

SECTION 1.                          GRANT OF OPTION.

 

(a)                                  Option .  On the terms and conditions set forth in the Notice of Stock Option Grant and this Agreement, the Company grants to the Optionee on the Date of Grant the option to purchase at the Exercise Price the number of Shares set forth in the Notice of Stock Option Grant.  The Exercise Price is agreed to be at least 100% of the Fair Market Value per Share on the Date of Grant (110% of Fair Market Value if this option is designated as an ISO in the Notice of Stock Option Grant and Section 3(b) of the Plan applies).  This option is intended to be an ISO or an NSO, as provided in the Notice of Stock Option Grant.

 

(b)                                  $100,000 Limitation .  Even if this option is designated as an ISO in the Notice of Stock Option Grant, it shall be deemed to be an NSO to the extent (and only to the extent) required by the $100,000 annual limitation under Section 422(d) of the Code.

 

(c)                                   Stock Plan and Defined Terms .  This option is granted pursuant to the Plan, a copy of which the Optionee acknowledges having received.  The provisions of the Plan are incorporated into this Agreement by this reference.  Capitalized terms are defined in Section 14 of this Agreement.

 

SECTION 2.                          RIGHT TO EXERCISE.

 

(a)                                  Exercisability .  Subject to Subsection (b) below and the other conditions set forth in this Agreement, all or part of this option may be exercised prior to its expiration at the time or times set forth in the Notice of Stock Option Grant.  Shares purchased by exercising this option may be subject to the Right of Repurchase under Section 7.

 

(b)                                  Shareholder Approval .  Any other provision of this Agreement notwithstanding, no portion of this option shall be exercisable at any time prior to the approval of the Plan by the Company’s shareholders.

 



 

SECTION 3.                          NO TRANSFER OR ASSIGNMENT OF OPTION.

 

Except as otherwise provided in this Agreement, this option and the rights and privileges conferred hereby shall not be sold, pledged or otherwise transferred (whether by operation of law or otherwise) and shall not be subject to sale under execution, attachment, levy or similar process.

 

SECTION 4.                          EXERCISE PROCEDURES.

 

(a)                                  Notice of Exercise .  The Optionee or the Optionee’s representative may exercise this option by giving written notice to the Company pursuant to Section 13(c).  The notice shall specify the election to exercise this option, the number of Shares for which it is being exercised and the form of payment.  The person exercising this option shall sign the notice.  In the event that this option is being exercised by the representative of the Optionee, the notice shall be accompanied by proof (satisfactory to the Company) of the representative’s right to exercise this option.  The Optionee or the Optionee’s representative shall deliver to the Company, at the time of giving the notice, payment in a form permissible under Section 5 for the full amount of the Purchase Price.

 

(b)                                  Issuance of Shares .  After receiving a proper notice of exercise, the Company shall cause to be issued one or more certificates evidencing the Shares for which this option has been exercised.  Such Shares shall be registered (i) in the name of the person exercising this option, (ii) in the names of such person and his or her spouse as community property or as joint tenants with the right of survivorship or (iii) with the Company’s consent, in the name of a revocable trust.  In the case of Restricted Shares, the Company shall cause such certificates to be deposited in escrow under Section 7(c).  In the case of other Shares, the Company shall cause such certificates to be delivered to or upon the order of the person exercising this option.

 

(c)                                   Withholding Taxes .  In the event that the Company determines that it is required to withhold any tax as a result of the exercise of this option, the Optionee, as a condition to the exercise of this option, shall make arrangements satisfactory to the Company to enable it to satisfy all withholding requirements.  The Optionee shall also make arrangements satisfactory to the Company to enable it to satisfy any withholding requirements that may arise in connection with the vesting or disposition of Shares purchased by exercising this option.

 

SECTION 5.                          PAYMENT FOR STOCK.

 

(a)                                  Cash .  All or part of the Purchase Price may be paid in cash or cash equivalents.

 

(b)                                  Surrender of Stock .  All or any part of the Purchase Price may be paid by surrendering, or attesting to the ownership of, Shares that are already owned by the Optionee.  Such Shares shall be surrendered to the Company in good form for transfer and shall be valued at their Fair Market Value on the date when this option is exercised.  The Optionee shall not surrender, or attest to the ownership of, Shares in payment of the Purchase Price if such action would cause the Company to recognize compensation expense (or additional compensation expense) with respect to this option for financial reporting purposes.

 

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(c)                                   Exercise/Sale .  All or part of the Purchase Price and any withholding taxes may be paid by the delivery (on a form prescribed by the Company) of an irrevocable direction to a securities broker approved by the Company to sell Shares and to deliver all or part of the sales proceeds to the Company.  However, payment pursuant to this Subsection (c) shall be permitted only if (i) Stock then is publicly traded and (ii) such payment does not violate applicable law.

 

(d)                                  Exercise/Pledge .  All or part of the Purchase Price and any withholding taxes may be paid by the delivery (on a form prescribed by the Company) of an irrevocable direction to pledge Shares to a securities broker or lender approved by the Company, as security for a loan, and to deliver all or part of the loan proceeds to the Company.  However, payment pursuant to this Subsection (d) shall be permitted only if (i) Stock then is publicly traded and (ii) such payment does not violate applicable law.

 

SECTION 6.                          TERM AND EXPIRATION.

 

(a)                                  Basic Term .  This option shall in any event expire on the expiration date set forth in the Notice of Stock Option Grant, which date is 10 years after the Date of Grant (five years after the Date of Grant if this option is designated as an ISO in the Notice of Stock Option Grant and Section 3(b) of the Plan applies).

 

(b)                                  Termination of Service (Except by Death) .  If the Optionee’s Service terminates for any reason other than death, then this option shall expire on the earliest of the following occasions:

 

(i)                                      The expiration date determined pursuant to Subsection (a) above;

 

(ii)                                   The date twelve months following the date of an Involuntary Termination occurring within eighteen months following a Change in Control;

 

(iii)                                The date thirty days after the termination of the Optionee’s Service for any reason other than Disability or as set forth under Subsection (b)(ii) above; or

 

(iv)                               The date six months after the termination of the Optionee’s Service by reason of Disability.

 

The Optionee may exercise all or part of this option at any time before its expiration under the preceding sentence, but only to the extent that this option is exercisable for vested Shares on or before the date when the Optionee’s Service terminates.  When the Optionee’s Service terminates, this option shall expire immediately with respect to the number of Shares for which this option is not yet exercisable and the vesting of any Restricted Shares shall immediately cease (in other words, any then-outstanding Restricted Shares will be subject to the Company’s Right of Repurchase as is described in Section 7 below for the time period set forth therein regardless of the vesting schedule described in the attached Notice of Grant).  In the event that the Optionee dies after termination of Service but before the expiration of this option, all or part

 

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of this option may be exercised (prior to expiration) by the executors or administrators of the Optionee’s estate or by any person who has acquired this option directly from the Optionee by beneficiary designation, bequest or inheritance, but only to the extent that this option was exercisable for vested Shares on or before the date when the Optionee’s Service terminated.

 

(c)                                   Death of the Optionee .  If the Optionee dies while in Service, then this option shall expire on the earlier of the following dates:

 

(i)                                      The expiration date determined pursuant to Subsection (a) above; or

 

(ii)                                   The date six months after the Optionee’s death.

 

All or part of this option may be exercised at any time before its expiration under the preceding sentence by the executors or administrators of the Optionee’s estate or by any person who has acquired this option directly from the Optionee by beneficiary designation, bequest or inheritance, but only to the extent that this option is exercisable for vested Shares on or before the Optionee’s death.  When the Optionee dies, this option shall expire immediately with respect to the number of Shares for which this option is not yet exercisable and the vesting of any Restricted Shares shall immediately cease (in other words, any then-outstanding Restricted Shares will be subject to the Company’s Right of Repurchase as is described in Section 7 below for the time period set forth therein regardless of the vesting schedule described in the attached Notice of Grant).

 

(d)                                  Part-Time Employment and Leaves of Absence .  If the Optionee commences working on a part-time basis, then the Company may adjust the vesting schedule set forth in the Notice of Stock Option Grant in accordance with the Company’s part-time work policy or the terms of an agreement between the Optionee and the Company pertaining to his or her part-time schedule.  If the Optionee goes on a leave of absence, then the Company may adjust the vesting schedule set forth in the Notice of Stock Option Grant in accordance with the Company’s leave of absence policy or the terms of such leave.  Except as provided in the preceding sentence, Service shall be deemed to continue for any purpose under this Agreement while the Optionee is on a bona fide leave of absence, if (i) such leave was approved by the Company in writing and (ii) continued crediting of Service for such purpose is expressly required by the terms of such leave or by applicable law (as determined by the Company).  Service shall be deemed to terminate when such leave ends, unless the Optionee immediately returns to active work.

 

(e)                                   Notice Concerning ISO Treatment .  Even if this option is designated as an ISO in the Notice of Stock Option Grant, it ceases to qualify for favorable tax treatment as an ISO to the extent that it is exercised:

 

(i)                                      More than three months after the date when the Optionee ceases to be an Employee for any reason other than death or permanent and total disability (as defined in Section 22(e)(3) of the Code);

 

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(ii)                                   More than 12 months after the date when the Optionee ceases to be an Employee by reason of permanent and total disability (as defined in Section 22(e)(3) of the Code); or

 

(iii)                                More than three months after the date when the Optionee has been on a leave of absence for 90 days, unless the Optionee’s reemployment rights following such leave were guaranteed by statute or by contract.

 

SECTION 7.                          RIGHT OF REPURCHASE.

 

(a)                                  Scope of Repurchase Right .  Until they vest in accordance with the Notice of Stock Option Grant and Subsection (b) below, any Shares acquired under this Agreement shall be Restricted Shares and shall be subject to the Company’s Right of Repurchase.  The Company, however, may decline to exercise its Right of Repurchase or may exercise its Right of Repurchase only with respect to a portion of the Restricted Shares.  The Company may exercise its Right of Repurchase only during the Repurchase Period following the termination of the Optionee’s Service.  The Right of Repurchase may be exercised automatically under Subsection (d) below.  If the Right of Repurchase is exercised, the Company shall pay the Optionee an amount equal to the Exercise Price for each of the Restricted Shares being repurchased.

 

(b)                                  Lapse of Repurchase Right .  The Right of Repurchase shall lapse with respect to the Restricted Shares in accordance with the vesting schedule set forth in the Notice of Stock Option Grant.  In addition, if the Company is subject to a Change in Control before the Optionee’s Service terminates, then the Right of Repurchase shall lapse with respect to all of the remaining Restricted Shares.

 

(c)                                   Escrow .  Upon issuance, the certificate(s) for Restricted Shares shall be deposited in escrow with the Company to be held in accordance with the provisions of this Agreement.  Any additional or exchanged securities or other property described in Subsection (f) below shall immediately be delivered to the Company to be held in escrow.  All ordinary cash dividends on Restricted Shares (or on other securities held in escrow) shall be paid directly to the Optionee and shall not be held in escrow.  Restricted Shares, together with any other assets held in escrow under this Agreement, shall be (i) surrendered to the Company for repurchase upon exercise of the Right of Repurchase or the Right of First Refusal or (ii) released to the Optionee upon his or her request to the extent that the Shares have ceased to be Restricted Shares (but not more frequently than once every six months).  In any event, all Shares that have ceased to be Restricted Shares, together with any other vested assets held in escrow under this Agreement, shall be released within 90 days after the earlier of (i) the termination of the Optionee’s Service or (ii) the lapse of the Right of First Refusal.

 

(d)                                  Exercise of Repurchase Right .  The Company shall be deemed to have exercised its Right of Repurchase automatically for all Restricted Shares as of the commencement of the Repurchase Period, unless the Company during the Repurchase Period notifies the holder of the Restricted Shares pursuant to Section 13(c) that it will not exercise its Right of Repurchase for some or all of the Restricted Shares.  During the Repurchase Period, the Company shall pay to the holder of the Restricted Shares the purchase price determined under

 

5



 

Subsection (a) above for the Restricted Shares being repurchased.  Payment shall be made in cash or cash equivalents and/or by canceling indebtedness to the Company incurred by the Optionee in the purchase of the Restricted Shares.  The certificate(s) representing the Restricted Shares being repurchased shall be delivered to the Company properly endorsed for transfer.

 

(e)                                   Termination of Rights as Shareholder .  If the Right of Repurchase is exercised in accordance with this Section 7 and the Company makes available the consideration for the Restricted Shares being repurchased, then the person from whom the Restricted Shares are repurchased shall no longer have any rights as a holder of the Restricted Shares (other than the right to receive payment of such consideration).  Such Restricted Shares shall be deemed to have been repurchased pursuant to this Section 7, whether or not the certificate(s) for such Restricted Shares have been delivered to the Company or the consideration for such Restricted Shares has been accepted.

 

(f)                                    Additional or Exchanged Securities and Property .  In the event of a merger or consolidation of the Company with or into another entity, any other corporate reorganization, a stock split, the declaration of a stock dividend, the declaration of an extraordinary dividend payable in a form other than stock, a spin-off, an adjustment in conversion ratio, a recapitalization or a similar transaction affecting the Company’s outstanding securities, any securities or other property (including cash or cash equivalents) that are by reason of such transaction exchanged for, or distributed with respect to, any Restricted Shares shall immediately be subject to the Right of Repurchase.  Appropriate adjustments to reflect the exchange or distribution of such securities or property shall be made to the number and/or class of the Restricted Shares.  Appropriate adjustments shall also be made to the price per share to be paid upon the exercise of the Right of Repurchase, provided that the aggregate purchase price payable for the Restricted Shares shall remain the same.  In the event of a merger or consolidation of the Company with or into another entity or any other corporate reorganization, the Right of Repurchase may be exercised by the Company’s successor.

 

(g)                                   Transfer of Restricted Shares .  The Optionee shall not transfer, assign, encumber or otherwise dispose of any Restricted Shares without the Company’s written consent, except as provided in the following sentence.  The Optionee may transfer Restricted Shares to one or more members of the Optionee’s Immediate Family or to a trust established by the Optionee for the benefit of the Optionee and/or one or more members of the Optionee’s Immediate Family, provided in either case that the Transferee agrees in writing on a form prescribed by the Company to be bound by all provisions of this Agreement.  If the Optionee transfers any Restricted Shares, then this Agreement shall apply to the Transferee to the same extent as to the Optionee.

 

(h)                                  Assignment of Repurchase Right .  The Board of Directors may freely assign the Company’s Right of Repurchase, in whole or in part.  Any person who accepts an assignment of the Right of Repurchase from the Company shall assume all of the Company’s rights and obligations under this Section 7.

 

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SECTION 8.                          RIGHT OF FIRST REFUSAL.

 

(a)                                  Right of First Refusal .  In the event that the Optionee proposes to sell, pledge or otherwise transfer to a third party any Shares acquired under this Agreement, or any interest in such Shares, the Company shall have the Right of First Refusal with respect to all (and not less than all) of such Shares.  If the Optionee desires to transfer Shares acquired under this Agreement, the Optionee shall give a written Transfer Notice to the Company describing fully the proposed transfer, including the number of Shares proposed to be transferred, the proposed transfer price, the name and address of the proposed Transferee and proof satisfactory to the Company that the proposed sale or transfer will not violate any applicable federal or state securities laws.  The Transfer Notice shall be signed both by the Optionee and by the proposed Transferee and must constitute a binding commitment of both parties to the transfer of the Shares.  The Company shall have the right to purchase all, and not less than all, of the Shares on the terms of the proposal described in the Transfer Notice (subject, however, to any change in such terms permitted under Subsection (b) below) by delivery of a notice of exercise of the Right of First Refusal within 30 days after the date when the Transfer Notice was received by the Company.

 

(b)                                  Transfer of Shares .  If the Company fails to exercise its Right of First Refusal within 30 days after the date when it received the Transfer Notice, the Optionee may, not later than 90 days following receipt of the Transfer Notice by the Company, conclude a transfer of the Shares subject to the Transfer Notice on the terms and conditions described in the Transfer Notice, provided that any such sale is made in compliance with applicable federal and state securities laws and not in violation of any other contractual restrictions to which the Optionee is bound.  Any proposed transfer on terms and conditions different from those described in the Transfer Notice, as well as any subsequent proposed transfer by the Optionee, shall again be subject to the Right of First Refusal and shall require compliance with the procedure described in Subsection (a) above.  If the Company exercises its Right of First Refusal, the parties shall consummate the sale of the Shares on the terms set forth in the Transfer Notice within 60 days after the date when the Company received the Transfer Notice (or within such longer period as may have been specified in the Transfer Notice); provided, however, that in the event the Transfer Notice provided that payment for the Shares was to be made in a form other than cash or cash equivalents paid at the time of transfer, the Company shall have the option of paying for the Shares with cash or cash equivalents equal to the present value of the consideration described in the Transfer Notice.

 

(c)                                   Additional or Exchanged Securities and Property .  In the event of a merger or consolidation of the Company with or into another entity, any other corporate reorganization, a stock split, the declaration of a stock dividend, the declaration of an extraordinary dividend payable in a form other than stock, a spin-off, an adjustment in conversion ratio, a recapitalization or a similar transaction affecting the Company’s outstanding securities, any securities or other property (including cash or cash equivalents) that are by reason of such transaction exchanged for, or distributed with respect to, any Shares subject to this Section 8 shall immediately be subject to the Right of First Refusal.  Appropriate adjustments to reflect the exchange or distribution of such securities or property shall be made to the number and/or class of the Shares subject to this Section 8.

 

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(d)                                  Termination of Right of First Refusal .  Any other provision of this Section 8 notwithstanding, in the event that the Stock is readily tradable on an established securities market when the Optionee desires to transfer Shares, the Company shall have no Right of First Refusal, and the Optionee shall have no obligation to comply with the procedures prescribed by Subsections (a) and (b) above.

 

(e)                                   Permitted Transfers .  This Section 8 shall not apply to (i) a transfer by beneficiary designation, will or intestate succession or (ii) a transfer to one or more members of the Optionee’s Immediate Family or to a trust established by the Optionee for the benefit of the Optionee and/or one or more members of the Optionee’s Immediate Family, provided in either case that the Transferee agrees in writing on a form prescribed by the Company to be bound by all provisions of this Agreement.  If the Optionee transfers any Shares acquired under this Agreement, either under this Subsection (e) or after the Company has failed to exercise the Right of First Refusal, then this Agreement shall apply to the Transferee to the same extent as to the Optionee.

 

(f)                                    Termination of Rights as Shareholder .  If the Company makes available, at the time and place and in the amount and form provided in this Agreement, the consideration for the Shares to be purchased in accordance with this Section 8, then after such time the person from whom such Shares are to be purchased shall no longer have any rights as a holder of such Shares (other than the right to receive payment of such consideration in accordance with this Agreement).  Such Shares shall be deemed to have been purchased in accordance with the applicable provisions hereof, whether or not the certificate(s) therefor have been delivered as required by this Agreement.

 

(g)                                   Assignment of Right of First Refusal .  The Board of Directors may freely assign the Company’s Right of First Refusal, in whole or in part.  Any person who accepts an assignment of the Right of First Refusal from the Company shall assume all of the Company’s rights and obligations under this Section 8.

 

SECTION 9.                          LEGALITY OF INITIAL ISSUANCE.

 

No Shares shall be issued upon the exercise of this option unless and until the Company has determined that:

 

(a)                                  It and the Optionee have taken any actions required to register the Shares under the Securities Act or to perfect an exemption from the registration requirements thereof;

 

(b)                                  Any applicable listing requirement of any stock exchange or other securities market on which Stock is listed has been satisfied; and

 

(c)                                   Any other applicable provision of federal, state or foreign law has been satisfied.

 

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SECTION 10.                   NO REGISTRATION RIGHTS.

 

The Company may, but shall not be obligated to, register or qualify the sale of Shares under the Securities Act or any other applicable law.  The Company shall not be obligated to take any affirmative action in order to cause the sale of Shares under this Agreement to comply with any law.

 

SECTION 11.                   RESTRICTIONS ON TRANSFER.

 

(a)                                  Securities Law Restrictions .  Regardless of whether the offering and sale of Shares under the Plan have been registered under the Securities Act or have been registered or qualified under the securities laws of any state, the Company at its discretion may impose restrictions upon the sale, pledge or other transfer of such Shares (including the placement of appropriate legends on stock certificates or the imposition of stop-transfer instructions) if, in the judgment of the Company, such restrictions are necessary or desirable in order to achieve compliance with the Securities Act, the securities laws of any state or any other law.

 

(b)                                  Market Stand-Off .  In connection with any underwritten public offering by the Company of its equity securities pursuant to an effective registration statement filed under the Securities Act, including the Company’s initial public offering, the Optionee or a Transferee shall not directly or indirectly sell, make any short sale of, loan, hypothecate, pledge, offer, grant or sell any option or other contract for the purchase of, purchase any option or other contract for the sale of, or otherwise dispose of or transfer, or agree to engage in any of the foregoing transactions with respect to, any Shares acquired under this Agreement without the prior written consent of the Company or its underwriters.  Such restriction (the “Market Stand-Off”) shall be in effect for such period of time following the date of the final prospectus for the offering as may be requested by the Company or such underwriters.  In no event, however, shall such period exceed 180 days.  The Market Stand-Off shall in any event terminate two years after the date of the Company’s initial public offering.  In the event of the declaration of a stock dividend, a spin-off, a stock split, an adjustment in conversion ratio, a recapitalization or a similar transaction affecting the Company’s outstanding securities without receipt of consideration, any new, substituted or additional securities which are by reason of such transaction distributed with respect to any Shares subject to the Market Stand-Off, or into which such Shares thereby become convertible, shall immediately be subject to the Market Stand-Off.  In order to enforce the Market Stand-Off, the Company may impose stop-transfer instructions with respect to the Shares acquired under this Agreement until the end of the applicable stand-off period.  The Company’s underwriters shall be beneficiaries of the agreement set forth in this Subsection (b).  This Subsection (b) shall not apply to Shares registered in the public offering under the Securities Act, and the Optionee or a Transferee shall be subject to this Subsection (b) only if the directors and officers of the Company are subject to similar arrangements.

 

(c)                                   Investment Intent at Grant .  The Optionee represents and agrees that the Shares to be acquired upon exercising this option will be acquired for investment, and not with a view to the sale or distribution thereof.

 

(d)                                  Investment Intent at Exercise .  In the event that the sale of Shares under the Plan is not registered under the Securities Act but an exemption is available which requires

 

9



 

an investment representation or other representation, the Optionee shall represent and agree at the time of exercise that the Shares being acquired upon exercising this option are being acquired for investment, and not with a view to the sale or distribution thereof, and shall make such other representations as are deemed necessary or appropriate by the Company and its counsel.

 

(e)                                   Legends .  All certificates evidencing Shares purchased under this Agreement shall bear the following legend:

 

“THE SHARES REPRESENTED HEREBY MAY NOT BE SOLD, ASSIGNED, TRANSFERRED, ENCUMBERED OR IN ANY MANNER DISPOSED OF, EXCEPT IN COMPLIANCE WITH THE TERMS OF A WRITTEN AGREEMENT BETWEEN THE COMPANY AND THE REGISTERED HOLDER OF THE SHARES (OR THE PREDECESSOR IN INTEREST TO THE SHARES).  SUCH AGREEMENT GRANTS TO THE COMPANY CERTAIN RIGHTS OF FIRST REFUSAL UPON AN ATTEMPTED TRANSFER OF THE SHARES AND CERTAIN REPURCHASE RIGHTS UPON TERMINATION OF SERVICE WITH THE COMPANY.  THE SECRETARY OF THE COMPANY WILL UPON WRITTEN REQUEST FURNISH A COPY OF SUCH AGREEMENT TO THE HOLDER HEREOF WITHOUT CHARGE.”

 

All certificates evidencing Shares purchased under this Agreement in an unregistered transaction shall bear the following legend (and such other restrictive legends as are required or deemed advisable under the provisions of any applicable law):

 

“THE SHARES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, PLEDGED, OR OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION THEREOF UNDER SUCH ACT OR AN OPINION OF COUNSEL, SATISFACTORY TO THE COMPANY AND ITS COUNSEL, THAT SUCH REGISTRATION IS NOT REQUIRED.”

 

(f)                                    Removal of Legends .  If, in the opinion of the Company and its counsel, any legend placed on a stock certificate representing Shares sold under this Agreement is no longer required, the holder of such certificate shall be entitled to exchange such certificate for a certificate representing the same number of Shares but without such legend.

 

(g)                                   Administration .  Any determination by the Company and its counsel in connection with any of the matters set forth in this Section 11 shall be conclusive and binding on the Optionee and all other persons.

 

SECTION 12.                   ADJUSTMENT OF SHARES.

 

In the event of any transaction described in Section 8(a) of the Plan, the terms of this option (including, without limitation, the number and kind of Shares subject to this option and the Exercise Price) shall be adjusted as set forth in Section 8(a) of the Plan.  In the event that the Company is a party to a merger or consolidation, this option shall be subject to the agreement of merger or consolidation, as provided in Section 8(b) of the Plan.

 

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SECTION 13.                   MISCELLANEOUS PROVISIONS.

 

(a)                                  Rights as a Shareholder .  Neither the Optionee nor the Optionee’s representative shall have any rights as a shareholder with respect to any Shares subject to this option until the Optionee or the Optionee’s representative purchases such Shares in accordance with the terms hereof by filing a notice of exercise and paying the Purchase Price pursuant to Sections 4 and 5.

 

(b)                                  No Retention Rights .  Nothing in this option or in the Plan shall confer upon the Optionee any right to continue in Service for any period of specific duration or interfere with or otherwise restrict in any way the rights of the Company (or any Parent or Subsidiary employing or retaining the Optionee) or of the Optionee, which rights are hereby expressly reserved by each, to terminate his or her Service at any time and for any reason, with or without cause.

 

(c)                                   Notice .  Any notice required by the terms of this Agreement shall be given in writing.  It shall be deemed effective upon (i) personal delivery, (ii) deposit with the United States Postal Service, by registered or certified mail, with postage and fees prepaid or (iii) deposit with Federal Express Corporation, with shipping charges prepaid.  Notice shall be addressed to the Company at its principal executive office and to the Optionee at the address that he or she most recently provided to the Company in accordance with this Subsection (c).

 

(d)                                  Entire Agreement .  The Notice of Stock Option Grant, this Agreement and the Plan constitute the entire contract between the parties hereto with regard to the subject matter hereof.  They supersede any other agreements, representations or understandings (whether oral or written and whether express or implied) which relate to the subject matter hereof.

 

(e)                                   Choice of Law .  This Agreement shall be governed by, and construed in accordance with, the laws of the State of California, as such laws are applied to contracts entered into and performed in such State.

 

SECTION 14.                   DEFINITIONS.

 

(a)                                  Agreement ” shall mean this Stock Option Agreement.

 

(b)                                  Board of Directors ” shall mean the Board of Directors of the Company, as constituted from time to time or, if a Committee has been appointed, such Committee.

 

(c)                                   Change in Control ” shall mean (i) the consummation of a merger or consolidation of the Company with or into another entity or (ii) the dissolution, liquidation or winding up of the Company.  The foregoing notwithstanding, a merger or consolidation of the Company shall not constitute a “Change in Control” if immediately after such merger or consolidation a majority of the voting power of the capital stock of the continuing or surviving entity, or any direct or indirect parent corporation of such continuing or surviving entity, will be owned by the persons who were the Company’s shareholders immediately prior to such merger or consolidation in substantially the same proportions as their ownership of the voting power of the Company’s capital stock immediately prior to such merger or consolidation.  Notwithstanding the foregoing, to the extent any amount constituting “nonqualified deferred

 

11



 

compensation” subject to Section 409A of the Code would become payable under this Agreement by reason of a Change of Control, it shall become payable only if the event or circumstances constituting the Change of Control would also constitute a change in the ownership or effective control of the Company, or a change in the ownership of a substantial portion of the Company’s assets, within the meaning of subsection (a)(2)(A)(v) of Section 409A of the Code.

 

(d)                                  Code ” shall mean the Internal Revenue Code of 1986, as amended.

 

(e)                                   Committee ” shall mean a committee of the Board of Directors, as described in Section 2 of the Plan.

 

(f)                                    Company ” shall mean Kotura, Inc., a California corporation formerly known as Arroyo Optics, Inc.

 

(g)                                   Consultant ” shall mean a person who performs bona fide services for the Company, a Parent or a Subsidiary as a consultant or advisor, excluding Employees and Outside Directors.

 

(h)                                  Date of Grant ” shall mean the date specified in the Notice of Stock Option Grant, which date shall be the later of (i) the date on which the Board of Directors resolved to grant this option or (ii) the first day of the Optionee’s Service.

 

(i)                                      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.

 

(j)                                     Employee ” shall mean any individual who is a common-law employee of the Company, a Parent or a Subsidiary.

 

(k)                                  Exercise Price ” shall mean the amount for which one Share may be purchased upon exercise of this option, as specified in the Notice of Stock Option Grant.

 

(l)                                      Fair Market Value ” shall mean the fair market value of a Share, as determined by the Board of Directors in good faith; provided, however, that Fair Market Value shall be determined consistent with the requirements of Section 409A of the Code.  Such determination shall be conclusive and binding on all persons.

 

(m)                              Immediate Family ” shall mean any child, stepchild, grandchild, parent, stepparent, grandparent, spouse, sibling, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law or sister-in-law and shall include adoptive relationships.

 

(n)                                  ISO ” shall mean an employee incentive stock option described in Section 422(b) of the Code.

 

(o)                                  Notice of Stock Option Grant ” shall mean the document so entitled to which this Agreement is attached.

 

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(p)                                  NSO ” shall mean a stock option not described in Sections 422(b) or 423(b) of the Code.

 

(q)                                  Optionee ” shall mean the person named in the Notice of Stock Option Grant.

 

(r)                                     Outside Director ” shall mean a member of the Board of Directors who is not an Employee.

 

(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.

 

(t)                                     Plan ” shall mean the Kotura, Inc. Amended and Restated 2003 Stock Plan, as in effect on the Date of Grant.

 

(u)                                  Purchase Price ” shall mean the Exercise Price multiplied by the number of Shares with respect to which this option is being exercised.

 

(v)                                  Repurchase Period ” shall mean a period of 90 consecutive days commencing on the date when the Optionee’s Service terminates for any reason, including (without limitation) death or disability.

 

(w)                                Restricted Share ” shall mean a Share that is subject to the Right of Repurchase.

 

(x)                                  Right of First Refusal ” shall mean the Company’s right of first refusal described in Section 8.

 

(y)                                  Right of Repurchase ” shall mean the Company’s right of repurchase described in Section 7.

 

(z)                                   Securities Act ” shall mean the Securities Act of 1933, as amended.

 

(aa)                           Service ” shall mean service as an Employee, Outside Director or Consultant.

 

(bb)                           Share ” shall mean one share of Stock, as adjusted in accordance with Section 8 of the Plan (if applicable).

 

(cc)                             Stock ” shall mean the Common Stock of the Company.

 

(dd)                           Subsidiary ” shall mean any corporation (other than the Company) in an unbroken chain of corporations beginning with the Company, if each of the corporations other than the last corporation in the unbroken chain 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.

 

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(ee)                             Transferee ” shall mean any person to whom the Optionee has directly or indirectly transferred any Share acquired under this Agreement.

 

(ff)                               Transfer Notice ” shall mean the notice of a proposed transfer of Shares described in Section 8.

 

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Exhibit 4.4

 

KOTURA, INC.

 

RESTRICTED STOCK UNIT AWARD AGREEMENT

 

THIS RESTRICTED STOCK UNIT AWARD AGREEMENT (the “ Agreement ”), dated as of                             , 2013 (the “ Date of Grant ”), is made by and between Kotura, Inc., a California corporation (the “ Company ”), and                                        (the “ Grantee ”).

 

WHEREAS, the Company maintains the Second Amended and Restated 2003 Stock Plan (as amended from time to time, the “ Plan ”), pursuant to which the Company may grant Restricted Stock Units;

 

WHEREAS, the Company desires to grant to the Grantee the number of Restricted Stock Units provided for herein;

 

NOW, THEREFORE, in consideration of the recitals and the mutual agreements herein contained, the parties hereto agree as follows:

 

Section 1.               Grant of Restricted Stock Unit Award

 

(a)                                  Grant of Restricted Stock Units. The Company hereby grants to the Grantee                        Restricted Stock Units (the “ Award ”) on the terms and conditions set forth in this Agreement and as otherwise provided in the Plan.

 

(b)                                   Incorporation of Plan; Capitalized Terms. The provisions of the Plan are hereby incorporated herein by reference. Except as otherwise expressly set forth herein, this Agreement shall be construed in accordance with the provisions of the Plan and any capitalized terms not otherwise defined in this Agreement shall have the definitions set forth in the Plan. The Administrator shall have final authority to interpret and construe the Plan and this Agreement and to make any and all determinations thereunder, and its decision shall be binding and conclusive upon the Grantee and his/her legal representative in respect of any questions arising under the Plan or this Agreement.

 

Section 2.               Terms and Conditions of Award

 

The grant of Restricted Stock Units provided in Section 1(a) shall be subject to the following terms, conditions and restrictions:

 

(a)                                  Limitations on Rights Associated with Units. The Restricted Stock Units are bookkeeping entries only. The Grantee shall have no rights as a stockholder of the Company, no dividend rights and no voting rights with respect to the Restricted Stock Units.

 

(b)                                  Restrictions. Restricted Stock Units and any interest therein, may not be sold, assigned, transferred, pledged, hypothecated or otherwise disposed of, except by will or the laws of descent and distribution. Any attempt to dispose of any Restricted Stock Units in

 



 

contravention of the above restriction shall be null and void and without effect.  If Mellanox Technologies, Ltd does not acquire the majority of the shares in the Company, the Award shall be forfeited immediately and without payment of compensation to the Grantee.

 

(c)                                   Lapse of Restrictions. Except as may be otherwise provided herein, the Restricted Stock Units subject to the Award shall become vested and non-forfeitable with respect to (i)  fifteen percent (15%) of the total number of Restricted Stock Units subject to the Award on the first quarterly date to occur following the one (1)-year anniversary of [                      ] (the “ Vesting Commencement Date ”), (ii) thirty-five percent (35%) of the total number of Restricted Stock Units subject to the Award on the first quarterly date to occur following the two (2)-year anniversary of the Vesting Commencement Date, and (iii) six and a quarter percent (6.25%) of the Restricted Stock Units on each quarterly anniversary of the Vesting Commencement Date thereafter, in each case, subject to Grantee’s continued Service through each such date.  In the event of Grantee’s death, Restricted Stock Units that have not yet vested shall be forfeited immediately upon such death.

 

(d)                                  Timing and Manner of Payment of Restricted Stock Units. As soon as practicable after the date any Restricted Stock Units subject to the Award become vested and non-forfeitable (and in any event, not later than March 15 of the year following the year in which the vesting occurs) (the “ Payment Date ”), such Restricted Stock Units shall be paid by the Company delivering to the Grantee a number of Shares equal to the number of Restricted Stock Units that become vested and non-forfeitable upon that Payment Date. The Company shall issue the Shares either (i) in certificate form or (ii) in book entry form, registered in the name of the Grantee. Delivery of any certificates will be made to the Grantee’s last address reflected in the books and records of the Company and its affiliates unless the Company is otherwise instructed in writing by Grantee or his heirs or permissible assigns. Neither the Grantee nor any of the Grantee’s successors, heirs, assigns or personal representatives shall have any further rights or interests in any Restricted Stock Units that are so paid. Notwithstanding anything herein to the contrary, the Company shall have no obligation to issue Shares in payment of the Restricted Stock Units unless such issuance and such payment shall comply with all relevant provisions of law and the requirements of any stock exchange or other securities market on which the Shares are traded.

 

(e)                                   Termination of Service. In the event of the termination of Grantee’s Service prior to the lapsing of the restrictions in accordance with Section 2(c) hereof with respect to any of the Restricted Stock Units granted hereunder, such portion of the Restricted Stock Units held by Grantee shall be automatically forfeited by the Grantee as of the date of termination.  Neither the Grantee nor any of the Grantee’s successors, heirs, assigns or personal representatives shall have any rights or interests in any Restricted Stock Units that are so forfeited.

 

(f)                                    Corporate Transactions. The following provisions shall apply to the corporate transactions described below:

 

(i)            In the event of a proposed dissolution or liquidation of the Company, the Award (to the extent not yet vested as of such date) will terminate and be forfeited immediately prior to the consummation of such proposed transaction, unless otherwise provided by the Administrator.

 

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(ii)           In the event of a proposed sale of all or substantially all of the assets of the Company, or the merger of the Company with or into another corporation, the Award shall be assumed or substituted with an equivalent award by such successor corporation, parent or subsidiary of such successor corporation; provided that the Administrator may determine, in the exercise of its sole discretion in connection with a transaction that constitutes a permissible distribution event under Section 409A(a)(2)(v) of the Code, as applicable, that in lieu of such assumption or substitution, the Award shall be vested and non-forfeitable and any conditions or restrictions on the Award shall lapse, as to all or any part of the Award, including Restricted Stock Units as to which the Award would not otherwise be non-forfeitable.

 

(g)                                   Income Taxes. Except as provided in the next sentence, the Company shall withhold and/or reacquire a number of Shares issued in payment of (or otherwise issuable in payment of, as the case may be) the Restricted Stock Units having a Fair Market Value equal to all federal, state, local and foreign taxes that the Company determines it or the Grantee’s employer (the “ Employer ”) is required to withhold under applicable tax laws with respect to the Restricted Stock Units (with such withholding obligation determined based on any applicable minimum statutory withholding rates). In the event the Company cannot (under applicable legal, regulatory, listing or other requirements, or otherwise) satisfy such tax withholding obligation in such method, the Company may satisfy such withholding by any one or combination of the following methods: (i) by requiring the Grantee to pay such amount in cash or check; (ii) by deducting such amount out of any other compensation otherwise payable to the Grantee; and/or (iii) by allowing the Grantee to surrender Shares of the Company which (a) either have been owned by the Grantee for such period (if any) as may be required to avoid a charge to the Company’s earnings, and (b) have a Fair Market Value on the date of surrender equal to the amount required to be withheld. For these purposes, the Fair Market Value of the Shares to be withheld or repurchased, as applicable, shall be determined on the date that the amount of tax to be withheld is to be determined.

 

Section 3.               Miscellaneous

 

(a)                                  Notices. Any and all notices, designations, consents, offers, acceptances and any other communications provided for herein shall be given in writing and shall be delivered either personally or by registered or certified mail, postage prepaid, which shall be addressed, in the case of the Company to the Board of Directors of the Company at the principal office of the Company and, in the case of the Grantee, to the Grantee’s address appearing in the books and records of the Company or to the Grantee’s residence or to such other address as may be designated in writing by the Grantee or his heirs or permissible assigns.

 

(b)                                  No Right to Continued Employment. Nothing in the Plan or in this Agreement shall confer upon the Grantee any right to continue in the employ of the Company, a Parent, a Subsidiary or an affiliate or shall interfere with or restrict in any way the right of the Company, Parent, Subsidiary or an affiliate, which is hereby expressly reserved, to remove, terminate or discharge the Grantee at any time for any reason whatsoever, with or without Cause and with or without advance notice.

 

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(c)                                   Bound by Plan. By signing this Agreement, the Grantee acknowledges that he/she has received a copy of the Plan and has had an opportunity to review the Plan and agrees to be bound by all the terms and provisions of both the Plan and this Agreement.  In the event there is a contradiction between the terms of the Plan and this Agreement, the terms of the Plan shall control.

 

(d)                                  Successors. The terms of this Agreement shall be binding upon and inure to the benefit of the Company, its successors and assigns, and of the Grantee and the beneficiaries, executors, administrators, heirs and successors of the Grantee.

 

(e)                                   Invalid Provision. The invalidity or unenforceability of any particular provision thereof shall not affect the other provisions hereof, and this Agreement shall be construed in all respects as if such invalid or unenforceable provision had been omitted.

 

(f)                                    No Advice Regarding Grant.   The Company is not providing any tax, legal or financial advice, nor is the Company making any recommendations regarding Grantee’s participation in the Plan, or Grantee’s acquisition or sale of the underlying Shares.  Grantee is hereby advised to consult with his or her own personal tax, legal and financial advisors regarding his or her participation in the Plan before taking any action related to the Plan.  Grantee is relying solely on such advisors and not on any statements or representations of the Company or any of its agents.  Grantee understands that he or she (and not the Company) shall be responsible for his or her own tax liability that may arise as a result of this investment or the transactions contemplated by this Agreement.  Grantee has reviewed this Agreement in its entirety, has had an opportunity to obtain the advice of counsel prior to executing this Agreement and fully understands all provisions of this Agreement.

 

(g)                                   Data Privacy.  Grantee hereby explicitly and unambiguously consents to the collection, use and transfer, in electronic or other form, of his or her personal data as described in this Agreement and any other Award documentation by and among, as applicable, the Employer, the Company, its Parent or any Subsidiary for the exclusive purpose of implementing, administering and managing Grantee’s participation in the Plan.

 

Grantee understands that the Company and the Employer may hold certain personal information about him or her, including, but not limited to, his or her name, home address and telephone number, date of birth, social insurance number or other identification number, salary, nationality, job title, any shares or directorships held in the Company, details of all Restricted Stock Units or any other entitlement to shares awarded, canceled, exercised, vested, unvested or outstanding in his or her favor, for the exclusive purpose of implementing, administering and managing the Plan (“ Data ”).

 

Grantee understands that Data will be transferred to a Company—designated Plan broker, or such other stock plan service provider as may be selected by the Company in the future, which is assisting the Company with the implementation, administration and management of the Plan.  Grantee understands that the recipients of the Data may be located in the United States or elsewhere, and that the recipients’ country may have different data

 

4



 

privacy laws and protections than Grantee’s country.  Grantee understands that he or she may request a list with the names and addresses of any potential recipients of the Data by contacting the Company’s local human resources representative.  Grantee authorizes the Company, its Plan broker and any other possible recipients which may assist the Company (presently or in the future) with implementing, administering and managing the Plan to receive, possess, use, retain and transfer the Data, in electronic or other form, for the sole purpose of implementing, administering and managing Grantee’s participation in the Plan.  Grantee understands that Data will be held only as long as is necessary to implement, administer and manage his or her participation in the Plan.  Grantee understands that he or she may, at any time, view Data, request additional information about the storage and processing of Data, require any necessary amendments to Data or refuse or withdraw the consents herein, in any case without cost, by contacting in writing the Company’s local human resources representative.  Grantee understands, however, that refusing or withdrawing his or her consent may affect his or her ability to participate in the Plan.  For more information on the consequences of Grantee’s refusal to consent or withdrawal of consent, Grantee understands that he or she may contact the Company’s local human resources representative.

 

(h)                                  Compliance with Laws and Regulations.   The issuance and transfer of the Shares will be subject to and conditioned upon compliance by the Company and Grantee with all applicable state, federal and foreign laws and regulations and with all applicable requirements of any stock exchange or automated quotation system on which the Company’s common stock may be listed or quoted at the time of such issuance or transfer.  The Company shall not be required to issue or deliver any certificate or certificates for any Shares prior to the fulfillment of all of the following conditions: (i) the admission of the Shares to listing on all stock exchanges on which such Shares are then listed, (ii) the completion of any registration or other qualification of the shares under any state, federal, or local law or under rulings or regulations of the U.S. Securities and Exchange Commission or other governmental regulatory body, which the Company shall, in its sole and absolute discretion, deem necessary and advisable, (iii) the obtaining of any approval or other clearance from any governmental agency that the Company shall, in its absolute discretion, determine to be necessary or advisable, and (iv) the lapse of any such reasonable period of time following the date the Restricted Stock Units vest as the Company may from time to time establish for reasons of administrative convenience.

 

(i)                                      Nature of Grant.  In accepting the Restricted Stock Units, Grantee acknowledges that: (i) the grant of the Restricted Stock Units is voluntary and occasional and does not create any contractual or other right to receive future grants of Restricted Stock Units, or benefits in lieu of Restricted Stock Units even if Restricted Stock Units have been granted repeatedly in the past; (ii) all decisions with respect to future awards of Restricted Stock Units, if any, will be at the sole discretion of the Company; (iii) Grantee’s participation in the Plan is voluntary; (iv) Restricted Stock Units are extraordinary items that do not constitute regular compensation for services rendered to the Company or any Subsidiary, and that are outside the scope of Grantee’s employment or service contract, if any; (v) Restricted Stock Units are not part of normal or expected compensation or salary for any purposes, including, but not limited to, calculating any severance, resignation, redundancy or end of service payments, bonuses, long service awards, pension or retirement or welfare benefits or similar payments and in no event should be considered as compensation for, or relating in any way to, past services for the Company or any

 

5



 

Subsidiary; (vi) the future value of the underlying Shares is unknown and cannot be predicted with certainty; (vii) in consideration of the award of Restricted Stock Units, no claim or entitlement to compensation or damages shall arise from termination of the Restricted Stock Units or any diminution in value of the Restricted Stock Units or Shares received when the Restricted Stock Units vest resulting from termination of employment or service by the Company or any Subsidiary, and Grantee irrevocably releases the Company and/or the Subsidiary from any such claim that may arise; if, notwithstanding the foregoing, any such claim is found by a court of competent jurisdiction to have arisen, then, by signing this Agreement, Grantee shall be deemed irrevocably to have waived his or her entitlement to pursue such claim; (viii) the Plan is established voluntarily by the Company.

 

(j)                                     Language.   If Grantee has received the Agreement or any other Award documentation translated into a language other than English and if the meaning of the translated version is different than the English version, the English version will control.

 

(k)                                  Electronic Delivery.  The Company may, in its sole discretion, decide to deliver any documents related to current or future participation in the Plan by electronic means.  Grantee hereby consents to receive such documents by electronic delivery and agrees to participate in the Plan through an on-line or electronic system established and maintained by the Company or a third party designated by the Company.

 

(l)                                      Modifications. No change, modification or waiver of any provision of this Agreement shall be valid unless the same is in writing and signed by Grantee and a duly authorized officer of the Company.

 

(m)                              Entire Agreement. This Agreement and the Plan contain the entire agreement and understanding of the parties hereto with respect to the subject matter contained herein and therein and supersede all prior communications, representations and negotiations in respect thereto.

 

(n)                                  Governing Law. This Agreement and the rights of the Grantee hereunder shall be construed and determined in accordance with the laws of Delaware.  If any provision of the Agreement is determined by a court of law to be illegal or unenforceable, in whole or in part, that provision will be enforced to the maximum extent possible and the other provisions will remain fully effective and enforceable.

 

(o)                                  Compliance in Form and Operation.  This Agreement, the Restricted Stock Units and payments made pursuant to this Agreement are intended to comply with or qualify for an exemption from Section 409A of the Code and the Treasury Regulations thereunder (“ Section 409A ”) and shall be interpreted in a manner consistent with that intention.  Notwithstanding any other provision of this Agreement, the Company reserves the right, to the extent the Company deems necessary or advisable, in its sole discretion, to unilaterally amend the Plan and/or this Agreement to ensure that all Restricted Stock Units are awarded in a manner that qualifies for exemption from or complies with Section 409A; provided, however, that the Company makes no representations that the Restricted Stock Units will comply with or be exempt from Section 409A and makes no undertaking to preclude Section 409A from applying to this Restricted Stock Unit award.

 

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(p)                                  Headings. The headings of the Sections hereof are provided for convenience only and are not to serve as a basis for interpretation or construction, and shall not constitute a part, of this Agreement.

 

(q)                                  Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

 

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APPENDIX A

 

SPECIAL PROVISIONS FOR RESTRICTED STOCK UNITS

GRANTED TO PARTICIPANTS IN THE UNITED KINGDOM

 

1.                                       The following provision is inserted immediately after the last sentence of Section 1(b) of the Agreement:

 

This Agreement forms the rules of the employee share scheme applicable to the United Kingdom based employees of the Company and any Subsidiaries.  All awards granted to employees of the Company or any Subsidiaries who are based in the United Kingdom will be granted on similar terms.  This Agreement incorporates the terms of the Plan with the exception that in the United Kingdom only employees of the Company or any Subsidiaries are eligible to be granted Restricted Stock Units.  Other service providers who are not employees are not eligible to receive Restricted Stock Units in the United Kingdom.

 

2.                                       The following provision replaces Section 2(g) of the Agreement in its entirety:

 

(g)                                   Income Taxes. Except as provided in the next sentence, the Company shall withhold and/or reacquire a number of Shares issued in payment of (or otherwise issuable in payment of, as the case may be) the Restricted Stock Units having a Fair Market Value equal to all federal, state, local and foreign taxes, including employee’s and, at the discretion of the Company, employer’s national insurance contributions and other social security contributions, that the Company determines it or the Grantee’s employer (the “ Employer ”) is required or entitled to withhold under applicable tax laws with respect to the Restricted Stock Units (with such withholding obligation determined based on any applicable minimum statutory withholding rates). In the event the Company cannot (under applicable legal, regulatory, listing or other requirements, or otherwise) satisfy such tax withholding obligation in such method, the Company may satisfy such withholding by any one or combination of the following methods: (i) by requiring the Grantee to pay such amount in cash or check; (ii) by deducting such amount out of any other compensation otherwise payable to the Grantee; and/or (iii) by allowing the Grantee to surrender Shares of the Company which (a) either have been owned by the Grantee for such period (if any) as may be required to avoid a charge to the Company’s earnings, and (b) have a Fair Market Value on the date of surrender equal to the amount required to be withheld. For these purposes, the Fair Market Value of the Shares to be withheld or repurchased, as applicable, shall be determined on the date that the amount of tax to be withheld is to be determined.

 

3.                                       The following provision is inserted as Section 2(h) of the Agreement:

 

(h)                                  Tax Indemnity . The Grantee agrees to indemnify and keep indemnified the Company, any Subsidiary, any parent and his/her employing company, if different, from and against any liability for or obligation to pay any liability for income tax, employee’s National Insurance contributions and (at the discretion of the Company) employer’s National Insurance Contributions (or other similar obligations to pay tax and social security wherever in the world arising) that is attributable to (1) the acquisition by the Grantee of the Shares, or (2) the disposal of any Shares.

 

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4.                                       The following provision replaces the last paragraph of Section 3(g) of the Agreement in its entirety:

 

Grantee understands that Data will be transferred to a Company—designated Plan broker, or such other stock plan service provider as may be selected by the Company in the future, which is assisting the Company with the implementation, administration and management of the Plan.  Grantee understands that the recipients of the Data may be located in the United States or elsewhere outside the European Union, and that the recipients’ country may have different data privacy laws and protections than Grantee’s country.  Grantee understands that he or she may request a list with the names and addresses of any potential recipients of the Data by contacting the Company’s local human resources representative.  Grantee authorizes the Company, its Plan broker and any other possible recipients which may assist the Company (presently or in the future) with implementing, administering and managing the Plan to receive, possess, use, retain and transfer the Data, in electronic or other form, for the sole purpose of implementing, administering and managing Grantee’s participation in the Plan.  Grantee understands that Data will be held only as long as is necessary to implement, administer and manage his or her participation in the Plan.  Grantee understands that he or she may, at any time, view Data, request additional information about the storage and processing of Data, require any necessary amendments to Data or refuse or withdraw the consents herein, in any case without cost, by contacting in writing the Company’s local human resources representative.  Grantee understands, however, that refusing or withdrawing his or her consent may affect his or her ability to participate in the Plan.  For more information on the consequences of Grantee’s refusal to consent or withdrawal of consent, Grantee understands that he or she may contact the Company’s local human resources representative.

 

9



 

IN WITNESS WHEREOF, this Agreement has been executed and delivered by the parties hereto as of the          day of                       , 2013.

 

 

 

KOTURA, INC.

 

 

 

 

 

 

By:

 

 

 

 

 

Its:

 

 

 

GRANTEE ACKNOWLEDGES AND AGREES THAT NOTHING IN THIS AGREEMENT, NOR IN THE PLAN WHICH IS INCORPORATED HEREIN BY REFERENCE, SHALL CONFER UPON GRANTEE ANY RIGHT WITH RESPECT TO CONTINUATION OF SUCH EMPLOYMENT OR CONSULTANCY WITH THE COMPANY, NOR SHALL IT INTERFERE IN ANY WAY WITH GRANTEE’S RIGHT OR THE COMPANY’S RIGHT TO TERMINATE GRANTEE’S EMPLOYMENT OR CONSULTANCY AT ANY TIME, WITH OR WITHOUT CAUSE.

 

Grantee acknowledges receipt of a copy of the Plan and represents that he or she is familiar with the terms and provisions thereof.  Grantee hereby accepts this Agreement subject to all of the terms and provisions hereof.  Grantee has reviewed the Plan and this Agreement in their entirety, has had an opportunity to obtain the advice of counsel prior to executing this Agreement and fully understands all provisions of this Agreement.  Grantee hereby agrees to accept as binding, conclusive and final all decisions or interpretations of the Committee upon any questions arising under the Plan or this Agreement.  Grantee further agrees to notify the Company upon any change in the residence address indicated below.

 

 

GRANTEE:

 

 

 

 

 

[Insert Name]

 

 

 

 

Signature:

 

 

 

 

 

Printed

 

 

Name:

 

 

 

 

Address:

 

 

 

 

 

10


Exhibit 5.1

 

August  14, 2013

 

Mellanox Technologies, Ltd.

Beit Mellanox,

Yokneam, Israel

 

Dear Sirs,

 

Re: Registration Statement on Form S-8

 

We have acted as counsel for Mellanox Technologies, Ltd., a company organized under the laws of Israel (the “ Company ”), in connection with the Registration Statement on Form S-8 (the “ Registration Statement ”) being filed by the Company with the Securities and Exchange Commission under the Securities Act of 1933, as amended, for the purposes of registering 177,078 of its Ordinary Shares, nominal value New Israeli Shekel 0.0175 per share, that may be issued pursuant to restricted share units or stock options that have been, or may hereafter be, granted pursuant to the Kotura, Inc. Second Amended and Restated 2003 Stock Plan (the “ Plan ”) (such Ordinary Shares under the Plan shall be referred to herein as the “ Shares ”).

 

We have based this opinion upon our review of the following records, documents, instruments and certificates, as certified to us by an officer of the Company as being complete and in full force and effect as of the date of this opinion:

 

(a) The Amended and Restated Articles of Association of the Company, as amended.

 

(b) The Plan.

 

(c) Records certified to us by an officer of the Company as constituting all records of proceedings and actions of the Board of Directors of the Company relating to the adoption and approval of the Plan.

 

(d) Information certified to us by an officer of the Company as to the authorized share capital of the Company and the number of issued and outstanding ordinary shares of the Company as of June 30, 2013.

 

In connection with this opinion, we have, with your consent, assumed the authenticity of all records, documents and instruments mentioned above, submitted to us as originals, the genuineness of all signatures, the legal capacity of natural persons and the authenticity and conformity to the originals of all records, documents and instruments mentioned above, submitted to us as copies.

 

Our opinion is qualified to the extent that in the event of a share split, share dividend or other reclassification of the share capital effected subsequent to the date hereof, the number of Ordinary Shares issuable under the Plan may be adjusted automatically, as set forth in the terms of the Plan, such that the number of such shares, as so adjusted, may exceed the number of Company’s remaining authorized, but unissued Ordinary Shares following such adjustment.

 

Based upon the foregoing, and subject to the assumptions and qualifications expressed herein, we are of the opinion that the Shares have been duly and validly authorized for issuance and, when issued in accordance with the provisions of the Plan, and the related restricted stock units agreement or stock options agreement, as applicable, therein and thereto, will be fully paid and non-assessable.

 

We hereby consent to the filing of this opinion as an Exhibit to the Registration Statement. In giving this consent, we do not thereby admit that we come within the category of persons whose consent is required under Section 7 of the Securities Act of 1933, or the Rules and Regulations of the Securities and Exchange Commission thereunder.

 

The above opinion is based on facts existing on the date hereof and of which we are aware. We express no opinion as to any laws other than the laws of the State of Israel as the same are in force on the date hereof and we disclaim any opinion as to the laws of any other jurisdiction. We further disclaim any opinion as to any statute, rule, regulation, ordinance, order or other promulgation of any regional or local governmental body or as to any related judicial or administrative opinion.

 

This opinion is rendered to you and to purchasers of the Shares offered by you pursuant to the Plan and is solely for the benefit of you and such purchasers. This opinion may not be relied upon by any other person, firm, corporation or other entity without our prior written consent. We disclaim any obligation to advise you of any change of law that occurs, or any facts of which we become aware, after the date of this opinion.

 

 

Very truly yours,

 

 

 

/s/ HERZOG, FOX & NEEMAN

 

 

 

HERZOG, FOX & NEEMAN

 

 


Exhibit 23.1

 

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

We hereby consent to the incorporation by reference in this Registration Statement on Form S-8 of our report dated February 25, 2013 relating to the financial statements, financial statement schedule and the effectiveness of internal control over financial reporting, which appears in Mellanox Technologies, Ltd.’s Annual Report on Form 10-K for the year ended December 31, 2012.

 

 

/s/ PricewaterhouseCoopers LLP

 

 

San Jose, California
August 14, 2013