EXHIBIT
99.1
LIVEPERSON,
INC.
2009
STOCK INCENTIVE PLAN
The
purpose of this 2009 Stock Incentive Plan (the “
Plan
”) of
LivePerson, Inc., a Delaware corporation (the “
Company
”),
is to advance the interests of the Company’s stockholders by enhancing the
Company’s ability to attract, retain and motivate persons who are expected to
make important contributions to the Company and by providing such persons with
equity ownership opportunities and performance-based incentives that are
intended to better align the interests of such persons with those of the
Company’s stockholders. Except where the context otherwise requires, the term
“
Company
”
shall include any of the Company’s present or future parent or subsidiary
corporations as defined in Sections 424(e) or (f) of the Internal Revenue Code
of 1986, as amended, and any regulations thereunder (the “
Code
”) and
any other business venture (including, without limitation, joint venture or
limited liability company) in which the Company has a controlling interest, as
determined by the Board of Directors of the Company (the “
Board
”).
All of
the Company’s employees, officers, and directors are eligible to be granted
options, stock appreciation rights (“
SARs
”),
restricted stock, restricted stock units (“
RSUs
”) and
other stock-and cash-based awards (each, an “
Award
”)
under the Plan. Consultants and advisors to the Company (as such terms are
defined and interpreted for purposes of Form S-8 (or any successor form)) are
also eligible to be granted Awards. Each person who is granted an Award under
the Plan is deemed a “
Participant
.”
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Administration
and Delegation
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(a)
Administration by Board of
Directors
. The Plan will be administered by the Board. The
Board shall have authority to grant Awards and to adopt, amend and repeal such
administrative rules, guidelines and practices relating to the Plan as it shall
deem advisable. The Board may construe and interpret the terms of the Plan and
any Award agreements entered into under the Plan. The Board may correct any
defect, supply any omission or reconcile any inconsistency in the Plan or any
Award in the manner and to the extent it shall deem expedient to carry the Plan
into effect and it shall be the sole and final judge of such expediency. All
decisions by the Board shall be made in the Board’s sole discretion and shall be
final and binding on all persons having or claiming any interest in the Plan or
in any Award.
(b)
Appointment of
Committees
. To the extent permitted by applicable law, the
Board may delegate any or all of its powers under the Plan to one or more
committees or subcommittees of the Board (a “
Committee
”).
All references in the Plan to the “
Board
”
shall mean the Board or a Committee of the Board or the officers referred to in
Section 3(c) to the extent that the Board’s powers or authority under the Plan
have been delegated to such Committee or officers.
(c)
Delegation to
Officers
. To the extent permitted by applicable law, the Board
may delegate to one or more officers of the Company the power to grant Options
and other Awards that constitute rights under Delaware law (subject to any
limitations under the Plan) to employees or officers of the Company or any of
its present or future subsidiary corporations and to exercise such other powers
under the Plan as the Board may determine, provided that the Board shall fix the
terms of the Awards to be granted by such officers (including the exercise price
of the Awards, which may include a formula by which the exercise price will be
determined) and the maximum number of shares subject to such Awards that the
officers may grant; provided further, however, that no officer shall be
authorized to grant Awards to any “executive officer” of the Company (as defined
by Rule 3b-7 under the Securities Exchange Act of 1934, as amended (the “
Exchange
Act
”)) or to any “officer” of the Company (as defined by Rule 16a-1 under
the Exchange Act). The Board may not delegate authority under this Section 3(c)
to grant restricted stock, unless Delaware law then permits such
delegation.
(d)
Awards to Non-Employee
Directors
. Discretionary Awards to non-employee directors will
only be granted and administered by a Committee, all of the members of which are
independent as defined by Section 4200(a)(15) of the Nasdaq Marketplace
Rules.
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Stock
Available for Awards
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(a)
Number of Shares; Share
Counting
.
(1)
Number of
Shares
. Subject to adjustment under Section 9, Awards may be
made under the Plan for up to the number of shares of common stock, $0.001 par
value per share, of the Company (the “Common Stock”) that is equal to the sum
of:
(A)
6,000,000 shares of Common Stock; plus
(B) such
additional number of shares of Common Stock as is equal to the sum of (x) the
number of shares of Common Stock reserved for issuance under the Company’s
Amended and Restated 2000 Stock Incentive Plan (the “Existing Plan”) that remain
available for grant under the Existing Plan on the date that the Company
stockholders approve this Plan and (y) the number of shares of Common Stock
subject to awards granted under the Existing Plan which awards expire, terminate
or are otherwise surrendered, canceled, forfeited or repurchased by the Company
at their original issuance price pursuant to a contractual repurchase right,
subject, however, in the case of Incentive Stock Options (as hereinafter
defined) to any limitations of the Code; provided that in no event shall the sum
of (x) and (y) above exceed 13,567,744.
(2)
Fungible Share
Pool
. Subject to adjustment under Section 9, any Award that is
not a Full-Value Award shall be counted against the share limits specified in
Sections 4(a)(1) and 4(b)(2) as one share for each share of Common Stock subject
to such Award and any Award that is a Full-Value Award shall be counted against
the share limits specified in Sections 4(a)(1) and 4(b)(2) as two shares for
each one share of Common Stock subject to such Full-Value Award. “Full-Value
Award” means any Restricted Stock Award or other Stock-Based Award with a per
share price or per unit purchase price lower than 100% of Fair Market Value (as
defined below) on the date of grant. To the extent a share that was subject to
an Award that counted as one share is returned to the Plan pursuant to Section
4(a)(3), each applicable share reserve will be credited with one share. To the
extent that a share that was subject to an Award that counts as two shares is
returned to the Plan pursuant to Section 4(a)(3), each applicable share reserve
will be credited with two shares.
(3)
Share
Counting
. For purposes of counting the number of shares
available for the grant of Awards under the Plan and under the sublimits
contained in Sections 4(b)(2), (i) all shares of Common Stock covered by
independent SARs shall be counted against the number of shares available for the
grant of Awards;
provided,
however
, that independent SARs that may be settled only in cash shall not
be so counted; (ii) if any Award (A) expires or is terminated, surrendered or
canceled without having been fully exercised or is forfeited in whole or in part
(including as the result of shares of Common Stock subject to such Award being
repurchased by the Company at the original issuance price pursuant to a
contractual repurchase right) or (B) results in any Common Stock not being
issued (including as a result of an independent SAR that was settleable either
in cash or in stock actually being settled in cash), the unused Common Stock
covered by such Award shall again be available for the grant of Awards;
provided, however
, in the
case of Incentive Stock Options (as hereinafter defined), the foregoing shall be
subject to any limitations under the Code; and provided further, in the case of
independent SARs, that the full number of shares subject to any stock-settled
SAR shall be counted against the shares available under the Plan and against the
sublimits listed in the first clause of this Section in proportion to the
portion of the SAR actually exercised regardless of the number of shares
actually used to settle such SAR upon exercise; (iii) shares of Common Stock
delivered (either by actual delivery, attestation, or net exercise) to the
Company by a Participant to (A) purchase shares of Common Stock upon the
exercise of an Award or (B) satisfy tax withholding obligations (including
shares retained from the Award creating the tax obligation) shall not be added
back to the number of shares available for the future grant of Awards;
and
(iv)
shares of Common Stock repurchased by the Company on the open market using the
proceeds from the exercise of an Award shall not increase the number of shares
available for future grant of Awards.
(b)
Sub-limits
. Subject
to adjustment under Section 9, the following sub-limits on the number of shares
subject to Awards shall apply:
(1)
Section 162(m) Per-Participant
Limit
. The maximum number of shares of Common Stock with
respect to which Awards may be granted to any Participant under the Plan shall
be one million (1,000,000) per calendar year. For purposes of the foregoing
limit, the combination of an Option in tandem with a SAR (as each is hereafter
defined) shall be treated as a single Award. The per Participant limit described
in this Section 4(b)(1) shall be construed and applied consistently with Section
162(m) of the Code or any successor provision thereto, and the regulations
thereunder (“
Section
162(m)
”).
(2)
Limit on Awards to
Directors
. The maximum number of shares with respect to which
Awards may be granted to directors who are not employees of the Company at the
time of grant shall be 5% of the maximum number of authorized shares set forth
in Section 4(a)(1).
(c)
Substitute
Awards
. In connection with a merger or consolidation of an
entity with the Company or the acquisition by the Company of property or stock
of an entity, the Board may grant Awards in substitution for any options or
other stock or stock-based awards granted by such entity or an affiliate
thereof. Substitute Awards may be granted on such terms as the Board deems
appropriate in the circumstances, notwithstanding any limitations on Awards
contained in the Plan. Substitute Awards shall not count against the overall
share limit set forth in Section 4(a)(1) or any sublimits contained in the Plan,
except as may be required by reason of Section 422 and related provisions of the
Code.
(a)
General
. The Board
may grant options to purchase Common Stock (each, an “
Option
”)
and determine the number of shares of Common Stock to be covered by each Option,
the exercise price of each Option and the conditions and limitations applicable
to the exercise of each Option, including conditions relating to applicable
federal or state securities laws, as it considers necessary or advisable. An
Option that is not intended to be an Incentive Stock Option (as hereinafter
defined) shall be designated a “
Nonstatutory
Stock Option
.”
(b)
Incentive Stock
Options
. An Option that the Board intends to be an “incentive
stock option” as defined in Section 422 of the Code (an “
Incentive Stock
Option
”) shall only be granted to employees of LivePerson, Inc., any of
LivePerson, Inc.’s present or future parent or subsidiary corporations as
defined in Sections 424(e) or (f) of the Code, and any other entities the
employees of which are eligible to receive Incentive Stock Options under the
Code, and shall be subject to and shall be construed consistently with the
requirements of Section 422 of the Code. The Company shall have no liability to
a Participant, or any other party, if an Option (or any part thereof) that is
intended to be an Incentive Stock Option is not an Incentive Stock Option or if
the Company converts an Incentive Stock Option to a Nonstatutory Stock
Option.
(c)
Exercise
Price
. The Board shall establish the exercise price of each
Option and specify the exercise price in the applicable option agreement. The
exercise price shall be not less than 100% of the Fair Market Value (as defined
below) on the date the Option is granted; provided that if the Board approves
the grant of an Option with an exercise price to be determined on a future date,
the exercise price shall be not less than 100% of the Fair Market Value on such
future date.
(d)
Duration of
Options
. Each Option shall be exercisable at such times and
subject to such terms and conditions as the Board may specify in the applicable
option agreement;
provided,
however
, that no Option will be granted with a term in excess of 10
years.
(e)
Exercise of
Option
. Options may be exercised by delivery to the Company of
a written notice of exercise signed by the proper person or by any other form of
notice (including electronic notice) approved by the Company, together with
payment in full as specified in Section 5(f) for the number of shares for which
the Option is exercised. Shares of Common Stock subject to the Option will be
delivered by the Company as soon as practicable following exercise.
(f)
Payment Upon
Exercise
. Common Stock purchased upon the exercise of an
Option granted under the Plan shall be paid for as follows:
(1) in
cash or by check, payable to the order of the Company;
(2)
except as may otherwise be provided in the applicable option agreement, by (i)
delivery of an irrevocable and unconditional undertaking by a creditworthy
broker to deliver promptly to the Company sufficient funds to pay the exercise
price and any required tax withholding or (ii) delivery by the Participant to
the Company of a copy of irrevocable and unconditional instructions to a
creditworthy broker to deliver promptly to the Company cash or a check
sufficient to pay the exercise price and any required tax
withholding;
(3) to
the extent provided for in the applicable option agreement or approved by the
Board, in its sole discretion, by delivery (either by actual delivery or
attestation) of shares of Common Stock owned by the Participant valued at their
fair market value as determined by (or in a manner approved by) the Board
(“
Fair
Market Value
”), provided (i) such method of payment is then permitted
under applicable law, (ii) such Common Stock, if acquired directly from the
Company, was owned by the Participant for such minimum period of time, if any,
as may be established by the Board in its discretion and (iii) such Common Stock
is not subject to any repurchase, forfeiture, unfulfilled vesting or other
similar requirements;
(4) to
the extent provided for in the applicable Nonstatutory Stock Option agreement or
approved by the Board in its sole discretion, by delivery of a notice of “net
exercise” to the Company, as a result of which the Participant would receive the
number of shares of Common Stock underlying the Option so exercised reduced by
the number of shares of Common Stock equal to the aggregate exercise price of
the Option divided by the Fair Market Value on the date of
exercise;
(5) to
the extent permitted by applicable law and provided for in the applicable Option
agreement or approved by the Board, in its sole discretion, by (i) delivery of a
promissory note of the Participant to the Company on terms determined by the
Board, or (ii) payment of such other lawful consideration as the Board may
determine; or
(6) by
any combination of the above permitted forms of payment.
(g)
Limitation on
Repricing
. Unless such action is approved by the Company’s
stockholders: (1) no outstanding Option granted under the Plan may be amended to
provide an exercise price per share that is lower than the then-current exercise
price per share of such outstanding Option (other than adjustments pursuant to
Section 9) and (2) the Board may not cancel any outstanding option (whether or
not granted under the Plan) and grant in substitution therefor new Awards under
the Plan covering the same or a different number of shares of Common Stock and
having an exercise price per share lower than the then-current exercise price
per share of the cancelled option.
6.
Stock
Appreciation Rights
(a)
General
. The Board
may grant Awards consisting of SARs entitling the holder, upon exercise, to
receive an amount of Common Stock or cash or a combination thereof (such form to
be determined by the Board) determined by reference to appreciation, from and
after the date of grant, in the Fair Market Value of a share of Common Stock
over the measurement price established pursuant to Section 6(c). The date as of
which such appreciation is determined shall be the exercise date.
(b)
Grants
. SARs may
be granted in tandem with, or independently of, Options granted under the
Plan.
(1)
Tandem
Awards
. When SARs are expressly granted in tandem with
Options, (i) the SAR will be exercisable only at such time or times, and to the
extent, that the related Option is exercisable (except to the extent designated
by the Board in connection with a Reorganization Event) and will be exercisable
in accordance with the procedure required for exercise of the related Option;
(ii) the SAR will terminate and no longer be exercisable upon the termination or
exercise of the related Option, except to the extent designated by the Board in
connection with a Reorganization Event and except that a SAR granted with
respect to less than the full number of shares covered by an Option will not be
reduced until the number
of shares
as to which the related Option has been exercised or has terminated exceeds the
number of shares not covered by the SAR; (iii) the Option will terminate and no
longer be exercisable upon the exercise of the related SAR; and (iv) the SAR
will be transferable only with the related Option.
(2)
Independent
SARs
. A SAR not expressly granted in tandem with an Option
will become exercisable at such time or times, and on such conditions, as the
Board may specify in the SAR Award.
(c)
Measurement
Price
. The Board shall establish the measurement price of each
SAR and specify it in the applicable SAR agreement. The measurement price shall
not be less than 100% of the Fair Market Value on the date the SAR is granted;
provided that if the Board approves the grant of a SAR with a measurement price
to be determined on a future date, the measurement price shall be not less than
100% of the Fair Market Value on such future date.
(d)
Duration of
SARs
. Each SAR shall be exercisable at such times and subject
to such terms and conditions as the Board may specify in the applicable SAR
agreement;
provided,
however
, that no SAR will be granted with a term in excess of 10
years.
(e)
Exercise of
SARs
. SARs may be exercised by delivery to the Company of a
written notice of exercise signed by the proper person or by any other form of
notice (including electronic notice) approved by the Company, together with any
other documents required by the Board.
(f)
Limitation on
Repricing
. Unless such action is approved by the Company’s
stockholders: (1) no outstanding SAR granted under the Plan may be amended to
provide an exercise price per share that is lower than the then-current exercise
price per share of such outstanding SAR (other than adjustments pursuant to
Section 9) and (2) the Board may not cancel any outstanding SAR (whether or not
granted under the Plan) and grant in substitution therefor new Awards under the
Plan covering the same or a different number of shares of Common Stock and
having an exercise price per share lower than the then-current exercise price
per share of the cancelled SAR.
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Restricted
Stock; Restricted Stock Units
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(a)
General
. The Board
may grant Awards entitling recipients to acquire shares of Common Stock (“
Restricted
Stock
”), subject to the right of the Company to repurchase all or part of
such shares at their issue price or other stated or formula price (or to require
forfeiture of such shares if issued at no cost) from the recipient in the event
that conditions specified by the Board in the applicable Award are not satisfied
prior to the end of the applicable restriction period or periods established by
the Board for such Award. Instead of granting Awards for Restricted Stock, the
Board may grant Awards entitling the recipient to receive shares of Common Stock
or cash to be delivered at the time such Award vests (“
Restricted Stock
Units
”) (Restricted Stock and Restricted Stock Units are each referred to
herein as a “
Restricted Stock
Award
”).
(b)
Terms and Conditions for All
Restricted Stock Awards
. The Board shall determine the terms
and conditions of a Restricted Stock Award, including the conditions for vesting
and repurchase (or forfeiture) and the issue price, if any. Restricted Stock
Awards that vest solely based on the passage of time shall be zero percent
vested prior to the first anniversary of the date of grant (or, in the case of
Awards to non-employee directors, if earlier, the date of the first annual
meeting held after the date of grant), no more than one-third vested prior to
the second anniversary of the date of grant (or, in the case of Awards to
non-employee directors, if earlier, the date of the second annual meeting held
after the date of grant), and no more than two-thirds vested prior to the third
anniversary of the date of grant (or, in the case of Awards to non-employee
directors, if earlier, the date of the third annual meeting held after the date
of grant). Restricted Stock Awards that do not vest solely based on the passage
of time shall not vest prior to the first anniversary of the date of grant (or,
in the case of Awards to non-employee directors, if earlier, the date of the
first annual meeting held after the date of grant). The two foregoing sentences
shall not apply to (1) Performance Awards granted pursuant to Section 10(i) or
(2) Restricted Stock Awards and Other Stock-Based Awards granted, in the
aggregate, for up to 5% of the maximum number of authorized shares set forth in
Section 4(a)(1). Notwithstanding any other provision of this Plan (other than
Section 10(i), if applicable), the Board may, in its discretion, either at the
time a Restricted Stock Award is made or at any time thereafter, waive its right
to repurchase shares of Common Stock (or waive the forfeiture thereof) or remove
or modify any part or all of the restrictions applicable to the Restricted Stock
Award, provided that the Board may only exercise such rights in extraordinary
circumstances
which
shall include, without limitation, death, disability or retirement of the
Participant; or a merger, consolidation, sale, reorganization, recapitalization,
or change in control of the Company.
(c)
Additional Provisions Relating to
Restricted Stock
.
(1)
Dividends
. Participants
holding shares of Restricted Stock will be entitled to all ordinary cash
dividends paid with respect to such shares, unless otherwise provided by the
Board. Unless otherwise provided by the Board, if any dividends or distributions
are paid in shares, or consist of a dividend or distribution to holders of
Common Stock other than an ordinary cash dividend, the shares, cash or other
property will be subject to the same restrictions on transferability and
forfeitability as the shares of Restricted Stock with respect to which they were
paid. Each dividend payment will be made no later than the end of the calendar
year in which the dividends are paid to shareholders of that class of stock or,
if later, the 15th day of the third month following the date the dividends are
paid to shareholders of that class of stock.
(2)
Stock
Certificates
. The Company may require that any stock
certificates issued in respect of shares of Restricted Stock shall be deposited
in escrow by the Participant, together with a stock power endorsed in blank,
with the Company (or its designee). At the expiration of the applicable
restriction periods, the Company (or such designee) shall deliver the
certificates no longer subject to such restrictions to the Participant or if the
Participant has died, to the beneficiary designated, in a manner determined by
the Board, by a Participant to receive amounts due or exercise rights of the
Participant in the event of the Participant’s death (the “
Designated
Beneficiary
”). In the absence of an effective designation by a
Participant, “
Designated
Beneficiary
” shall mean the Participant’s estate.
(d)
Additional Provisions Relating to
Restricted Stock Units
.
(1)
Settlement
. Upon
the vesting of and/or lapsing of any other restrictions (i.e., settlement) with
respect to each Restricted Stock Unit, the Participant shall be entitled to
receive from the Company one share of Common Stock or an amount of cash equal to
the Fair Market Value of one share of Common Stock, as provided in the
applicable Award agreement. The Board may, in its discretion, provide that
settlement of Restricted Stock Units shall be deferred, on a mandatory basis or
at the election of the Participant in a manner that complies with Code Section
409A.
(2)
Voting Rights
. A
Participant shall have no voting rights with respect to any Restricted Stock
Units.
(3)
Dividend
Equivalents
. To the extent provided by the Board, in its sole
discretion, a grant of Restricted Stock Units may provide Participants with the
right to receive an amount equal to any dividends or other distributions
declared and paid on an equal number of outstanding shares of Common Stock
(“
Dividend
Equivalents
”). Dividend Equivalents may be paid currently or credited to
an account for the Participants, may be settled in cash and/or shares of Common
Stock and may be subject to the same restrictions on transfer and forfeitability
as the Restricted Stock Units with respect to which paid, as determined by the
Board in its sole discretion, subject in each case to such terms and conditions
as the Board shall establish, in each case to be set forth in the applicable
Award agreement.
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Other
Stock-Based and Cash-Based Awards.
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(a)
General
. Other
Awards of shares of Common Stock, and other Awards that are valued in whole or
in part by reference to, or are otherwise based on, shares of Common Stock or
other property, may be granted hereunder to Participants (“
Other
Stock-Based-Awards
”), including without limitation Awards entitling
recipients to receive shares of Common Stock to be delivered in the future. Such
Other Stock-Based Awards shall also be available as a form of payment in the
settlement of other Awards granted under the Plan or as payment in lieu of
compensation to which a Participant is otherwise entitled. Other Stock-Based
Awards may be paid in shares of Common Stock or cash, as the Board shall
determine. The Company may also grant Performance Awards or other Awards
denominated in cash rather than shares of Common Stock (“
Cash-Based
Awards
”).
(b)
Terms and
Conditions
. Subject to the provisions of the Plan, the Board
shall determine the terms and conditions of each Other Stock-Based Award or
Cash-Based Awards, including any purchase price applicable thereto. Other
Stock-Based Awards that vest solely based on the passage of time shall be zero
percent vested prior to the first anniversary of the date of grant (or, in the
case of Awards to non-employee directors, if earlier, the date of the first
annual meeting held after the date of grant), no more than one-third vested
prior to the second anniversary of the date of grant (or, in the case of Awards
to non-employee directors, if earlier, the date of the second annual meeting
held after the date of grant), and no more than two-thirds vested prior to the
third anniversary of the date of grant (or, in the case of Awards to
non-employee directors, if earlier, the date of the third annual meeting held
after the date of grant). Other Stock-Based Awards that do not vest solely based
on the passage of time shall not vest prior to the first anniversary of the date
of grant (or, in the case of Awards to non-employee directors, if earlier, the
date of the first annual meeting held after the date of grant). The two
foregoing sentences shall not apply to (1) Performance Awards granted pursuant
to Section 10(i) or (2) Restricted Stock Awards and Other Stock-Based Awards
granted, in the aggregate, for up to 5% of the maximum number of authorized
shares set forth in Section 4(a)(1). Notwithstanding any other provision of this
Plan (other than Section 10(i), if applicable), the Board may, in its
discretion, either at the time a Other Stock-Based Award is made or at any time
thereafter, waive its right to repurchase shares of Common Stock (or waive the
forfeiture thereof) or remove or modify any part or all of the restrictions
applicable to the Other Stock-Based Award, provided that the Board may only
exercise such rights in extraordinary circumstances which shall include, without
limitation, death, disability or retirement of the Participant; or a merger,
consolidation, sale, reorganization, recapitalization, or change in control of
the Company.
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Adjustments
for Changes in Common Stock and Certain Other
Events
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(a)
Changes in
Capitalization
. In the event of any stock split, reverse stock
split, stock dividend, recapitalization, combination of shares, reclassification
of shares, spin-off or other similar change in capitalization or event, or any
dividend or distribution to holders of Common Stock other than an ordinary cash
dividend, (i) the number and class of securities available under the Plan, (ii)
the sub-limits and share counting rules set forth in Sections 4(a) and 4(b) and
the minimum vesting rules of Sections 7(b) and 8(b) (iii) the number and class
of securities and exercise price per share of each outstanding Option, (iv) the
share- and per-share provisions and the measurement price of each SAR, (v) the
number of shares subject to and the repurchase price per share subject to each
outstanding Restricted Stock Award and (vi) the share- and per-share-related
provisions and the purchase price, if any, of each outstanding Other Stock-Based
Award, shall be equitably adjusted by the Company (or substituted Awards may be
made, if applicable) in the manner determined by the Board. Without limiting the
generality of the foregoing, in the event the Company effects a split of the
Common Stock by means of a stock dividend and the exercise price of and the
number of shares subject to an outstanding Option are adjusted as of the date of
the distribution of the dividend (rather than as of the record date for such
dividend), then an optionee who exercises an Option between the record date and
the distribution date for such stock dividend shall be entitled to receive, on
the distribution date, the stock dividend with respect to the shares of Common
Stock acquired upon such Option exercise, notwithstanding the fact that such
shares were not outstanding as of the close of business on the record date for
such stock dividend.
(b)
Reorganization
Events
.
(1)
Definition
. A
“
Reorganization
Event
” shall mean: (a) any merger or consolidation of the Company with or
into another entity as a result of which all of the Common Stock of the Company
is converted into or exchanged for the right to receive cash, securities or
other property or is cancelled, (b) any transfer or disposition of all of the
Common Stock of the Company for cash, securities or other property pursuant to a
share exchange or other transactions or (c) any liquidation or dissolution of
the Company.
(2)
Consequences of a Reorganization
Event on Awards Other than Restricted Stock Awards
. In
connection with a Reorganization Event, the Board may take any one or more of
the following actions as to all or any (or any portion of) outstanding Awards
other than Restricted Stock Awards on such terms as the Board determines: (i)
provide that Awards shall be assumed, or substantially equivalent Awards shall
be substituted, by the acquiring or succeeding corporation (or an affiliate
thereof), (ii) upon written notice to a Participant, provide that the
Participant’s unexercised Awards will terminate immediately prior to the
consummation
of such Reorganization Event unless exercised by the Participant within a
specified period following the date of such notice, (iii) provide that
outstanding Awards shall become exercisable, realizable, or deliverable, or
restrictions applicable to an Award shall lapse, in whole or in part prior to or
upon such Reorganization Event, (iv) in the event of a Reorganization Event
under the terms of which holders of Common Stock will receive upon consummation
thereof a cash payment for each share surrendered in the Reorganization Event
(the “
Acquisition
Price
”), make or provide for a cash payment to a Participant equal to the
excess, if any, of (A) the Acquisition Price times the number of shares of
Common Stock subject to the Participant’s Awards (to the extent the exercise
price does not exceed the Acquisition Price) over (B) the aggregate exercise
price of all such outstanding Awards and any applicable tax withholdings, in
exchange for the termination of such Awards, (v) provide that, in connection
with a liquidation or dissolution of the Company, Awards shall convert into the
right to receive liquidation proceeds (if applicable, net of the exercise price
thereof and any applicable tax withholdings) and (vi) any combination of the
foregoing. In taking any of the actions permitted under this Section 9(b), the
Board shall not be obligated by the Plan to treat all Awards, all Awards held by
a Participant, or all Awards of the same type, identically.
For
purposes of clause (i) above, an Option shall be considered assumed if,
following consummation of the Reorganization Event, the Option confers the right
to purchase, for each share of Common Stock subject to the Option immediately
prior to the consummation of the Reorganization Event, the consideration
(whether cash, securities or other property) received as a result of the
Reorganization Event by holders of Common Stock for each share of Common Stock
held immediately prior to the consummation of the Reorganization Event (and if
holders were offered a choice of consideration, the type of consideration chosen
by the holders of a majority of the outstanding shares of Common Stock);
provided, however
, that if
the consideration received as a result of the Reorganization Event is not solely
common stock of the acquiring or succeeding corporation (or an affiliate
thereof), the Company may, with the consent of the acquiring or succeeding
corporation, provide for the consideration to be received upon the exercise of
Options to consist solely of common stock of the acquiring or succeeding
corporation (or an affiliate thereof) equivalent in value (as determined by the
Board) to the per share consideration received by holders of outstanding shares
of Common Stock as a result of the Reorganization Event.
(3)
Consequences of a Reorganization
Event on Restricted Stock Awards
. Upon the occurrence of a
Reorganization Event other than a liquidation or dissolution of the Company, the
repurchase and other rights of the Company under each outstanding Restricted
Stock Award shall inure to the benefit of the Company’s successor and shall,
unless the Board determines otherwise, apply to the cash, securities or other
property which the Common Stock was converted into or exchanged for pursuant to
such Reorganization Event in the same manner and to the same extent as they
applied to the Common Stock subject to such Restricted Stock Award;
provided
,
however
, that the Board may
provide for termination or deemed satisfaction of such repurchase or other
rights under the instrument evidencing any Restricted Stock Award or any other
agreement between a Participant and the Company, either initially or by
amendment. Upon the occurrence of a Reorganization Event involving the
liquidation or dissolution of the Company, except to the extent specifically
provided to the contrary in the instrument evidencing any Restricted Stock Award
or any other agreement between a Participant and the Company, all restrictions
and conditions on all Restricted Stock Awards then outstanding shall
automatically be deemed terminated or satisfied.
|
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General
Provisions Applicable to Awards
|
(a)
Transferability of
Awards
. Awards shall not be sold, assigned, transferred,
pledged or otherwise encumbered by the person to whom they are granted, either
voluntarily or by operation of law, except by will or the laws of descent and
distribution or, other than in the case of an Incentive Stock Option, pursuant
to a qualified domestic relations order, and, during the life of the
Participant, shall be exercisable only by the Participant;
provided, however
, that the
Board may permit or provide in an Award for the gratuitous transfer of the Award
by the Participant to or for the benefit of any immediate family member, family
trust or other entity established for the benefit of the Participant and/or an
immediate family member thereof if, with respect to such proposed transferee,
the Company would be eligible to use a Form S-8 for the registration of the sale
of the
Common Stock subject to such Award under the Securities Act of 1933, as amended;
provided, further, that the Company shall not be required to recognize any such
transfer until such time as the Participant and such permitted transferee shall,
as a condition to such transfer, deliver to the Company a written instrument in
form and substance satisfactory to the Company confirming that such transferee
shall be bound by all of the terms and conditions of the Award. References to a
Participant, to the extent relevant in the context, shall include references to
authorized transferees.
(b)
Documentation
. Each
Award shall be evidenced in such form (written, electronic or otherwise) as the
Board shall determine. Each Award may contain terms and conditions in addition
to those set forth in the Plan.
(c)
Board
Discretion
. Except as otherwise provided by the Plan, each
Award may be made alone or in addition or in relation to any other Award. The
terms of each Award need not be identical, and the Board need not treat
Participants uniformly.
(d)
Termination of
Status
. The Board shall determine the effect on an Award of
the disability, death, termination or other cessation of employment, authorized
leave of absence or other change in the employment or other status of a
Participant and the extent to which, and the period during which, the
Participant, or the Participant’s legal representative, conservator, guardian or
Designated Beneficiary, may exercise rights under the Award.
(e)
Withholding
. The
Participant must satisfy all applicable federal, state, and local or other
income and employment tax withholding obligations before the Company will
deliver stock certificates or otherwise recognize ownership of Common Stock
under an Award. The Company may decide to satisfy the withholding obligations
through additional withholding on salary or wages. If the Company elects not to
or cannot withhold from other compensation, the Participant must pay the Company
the full amount, if any, required for withholding or have a broker tender to the
Company cash equal to the withholding obligations. Payment of withholding
obligations is due before the Company will issue any shares on exercise or
release from forfeiture of an Award or, if the Company so requires, at the same
time as is payment of the exercise price unless the Company determines
otherwise. If provided for in an Award or approved by the Board in its sole
discretion, a Participant may satisfy such tax obligations in whole or in part
by delivery (either by actual delivery or attestation) of shares of Common
Stock, including shares retained from the Award creating the tax obligation,
valued at their Fair Market Value;
provided, however
, except as
otherwise provided by the Board, that the total tax withholding where stock is
being used to satisfy such tax obligations cannot exceed the Company’s minimum
statutory withholding obligations (based on minimum statutory withholding rates
for federal and state tax purposes, including payroll taxes, that are applicable
to such supplemental taxable income). Shares used to satisfy tax withholding
requirements cannot be subject to any repurchase, forfeiture, unfulfilled
vesting or other similar requirements.
(f)
Amendment of
Award
. The Board may amend, modify or terminate any
outstanding Award, including but not limited to, substituting therefor another
Award of the same or a different type, changing the date of exercise or
realization, and converting an Incentive Stock Option to a Nonstatutory Stock
Option. The Participant’s consent to such action shall be required unless (i)
the Board determines that the action, taking into account any related action,
would not materially and adversely affect the Participant’s rights under the
Plan or (ii) the change is permitted under Section 9 hereof.
(g)
Conditions on Delivery of
Stock
. The Company will not be obligated to deliver any shares
of Common Stock pursuant to the Plan or to remove restrictions from shares
previously delivered under the Plan until (i) all conditions of the Award have
been met or removed to the satisfaction of the Company, (ii) in the opinion of
the Company’s counsel, all other legal matters in connection with the issuance
and delivery of such shares have been satisfied, including any applicable
securities laws and any applicable stock exchange or stock market rules and
regulations, and (iii) the Participant has executed and delivered to the Company
such representations or agreements as the Company may consider appropriate to
satisfy the requirements of any applicable laws, rules or
regulations.
(h)
Acceleration
. Except
as otherwise provided in Sections 7(b), 8(b) and 10(i), the Board may at any
time provide that any Award shall become immediately exercisable in full or in
part, free of some or all restrictions or conditions, or otherwise realizable in
full or in part, as the case may be.
(i)
Performance
Awards
.
(1)
Grants
. Restricted
Stock Awards and Other Stock-Based Awards under the Plan may be made subject to
the achievement of performance goals pursuant to this Section 10(i) (“
Performance
Awards
”), subject to the limit in Section 4(b)(1) on shares covered by
such grants. Subject to Section 10(i)(4), no Performance Awards shall vest prior
to the first anniversary of the date of grant. Performance Awards can also
provide for cash payments of up to $1 million per calendar year per
individual.
(2)
Committee
. Grants
of Performance Awards to any Covered Employee intended to qualify as
“performance-based compensation” under Section 162(m) (“
Performance-Based
Compensation
”) shall be made only by a Committee (or subcommittee of a
Committee) comprised solely of two or more directors eligible to serve on a
committee making Awards qualifying as “performance-based compensation” under
Section 162(m). In the case of such Awards granted to Covered Employees,
references to the Board or to a Committee shall be treated as referring to such
Committee or subcommittee. “
Covered
Employee
” shall mean any person who is, or whom the Committee, in its
discretion, determines may be, a “covered employee” under Section 162(m)(3) of
the Code.
(3)
Performance
Measures
. For any Award that is intended to qualify as
Performance-Based Compensation, the Committee shall specify that the degree of
granting, vesting and/or payout shall be subject to the achievement of one or
more objective performance measures established by the Committee, which shall be
based on the relative or absolute attainment of specified levels of one or any
combination of the following: net income, earnings before or after discontinued
operations, interest, taxes, depreciation and/or amortization, operating profit
before or after discontinued operations and/or taxes, sales, sales growth,
earnings growth, cash flow or cash position, gross margins, stock price, market
share, return on sales, assets, equity or investment, improvement of financial
ratings, achievement of balance sheet or income statement objectives, total
shareholder return, or strategic or operational goals. Such goals may reflect
absolute entity or business unit performance or a relative comparison to the
performance of a peer group of entities or other external measure of the
selected performance criteria and may be absolute in their terms or measured
against or in relationship to other companies comparably, similarly or otherwise
situated. The Committee may specify that such performance measures shall be
adjusted to exclude any one or more of (i) extraordinary items, (ii) gains or
losses on the dispositions of discontinued operations, (iii) the cumulative
effects of changes in accounting principles, (iv) the writedown of any asset,
and (v) charges for restructuring and rationalization programs. Such performance
measures: (i) may vary by Participant and may be different for different Awards;
(ii) may be particular to a Participant or the department, branch, line of
business, subsidiary or other unit in which the Participant works and may cover
such period as may be specified by the Committee; and (iii) shall be set by the
Committee within the time period prescribed by, and shall otherwise comply with
the requirements of, Section 162(m). Awards that are not intended to qualify as
Performance-Based Compensation may be based on these or such other performance
measures as the Board may determine.
(4
)
Adjustments
. Notwithstanding any provision of the Plan, with
respect to any Performance Award that is intended to qualify as
Performance-Based Compensation, the Committee may adjust downwards, but not
upwards, the cash or number of Shares payable pursuant to such Award, and the
Committee may not waive the achievement of the applicable performance measures
except in the case of the death or disability of the Participant or a change in
control of the Company.
(5)
Other
. The
Committee shall have the power to impose such other restrictions on Performance
Awards as it may deem necessary or appropriate to ensure that such Awards
satisfy all requirements for Performance-Based Compensation.
(a)
No Right To Employment or Other
Status
. No person shall have any claim or right to be granted
an Award, and the grant of an Award shall not be construed as giving a
Participant the right to continued employment or any other relationship with the
Company. The Company expressly reserves the right at any time to dismiss or
otherwise terminate its relationship with a Participant free from any liability
or claim under the Plan, except as expressly provided in the applicable
Award.
(b)
No Rights As
Stockholder
. Except with respect to Restricted Stock Awards or
as otherwise explicitly provided in the applicable Award, no Participant or
Designated Beneficiary shall have any rights as a stockholder with respect to
any shares of Common Stock to be distributed with respect to an Award until
becoming the record holder of such shares.
(c)
Effective Date and Term of
Plan
. The Plan shall become effective on the date the Plan is
approved by the Company’s stockholders (the “
Effective
Date
”). No Awards shall be granted under the Plan after the expiration of
10 years from the Effective Date, but Awards previously granted may extend
beyond that date.
(d)
Amendment of
Plan
. The Board may amend, suspend or terminate the Plan or
any portion thereof at any time provided that (i) to the extent required by
Section 162(m), no Award granted to a Participant that is intended to comply
with Section 162(m) after the date of such amendment shall become exercisable,
realizable or vested, as applicable to such Award, unless and until the
Company’s stockholders approve such amendment if required by Section 162(m)
(including the vote required under Section 162(m)); (ii) no amendment that would
require stockholder approval under the rules of NASDAQ Stock Market (“
NASDAQ
”)
may be made effective unless and until the Company’s stockholders approve such
amendment; and (iii) if the NASDAQ amends its corporate governance rules so that
such rules no longer require stockholder approval of NASDAQ “material
amendments” to equity compensation plans, then, from and after the effective
date of such amendment to the NASDAQ rules, no amendment to the Plan (A)
materially increasing the number of shares authorized under the Plan (other than
pursuant to Section 4(c) or 9), (B) expanding the types of Awards that may be
granted under the Plan, or (C) materially expanding the class of participants
eligible to participate in the Plan shall be effective unless and until the
Company’s stockholders approve such amendment. In addition, if at any time the
approval of the Company’s stockholders is required as to any other modification
or amendment under Section 422 of the Code or any successor provision with
respect to Incentive Stock Options, the Board may not effect such modification
or amendment without such approval. Unless otherwise specified in the amendment,
any amendment to the Plan adopted in accordance with this Section 11(d) shall
apply to, and be binding on the holders of, all Awards outstanding under the
Plan at the time the amendment is adopted, provided the Board determines that
such amendment does not materially and adversely affect the rights of
Participants under the Plan. No Award shall be made that is conditioned upon
stockholder approval of any amendment to the Plan.
(e)
Authorization of
Sub-Plans
. The Board may from time to time establish one or
more sub-plans under the Plan for purposes of satisfying applicable securities
or tax laws of various jurisdictions. The Board shall establish such sub-plans
by adopting supplements to the Plan containing (i) such limitations on the
Board’s discretion under the Plan as the Board deems necessary or desirable or
(ii) such additional terms and conditions not otherwise inconsistent with the
Plan as the Board shall deem necessary or desirable. All supplements adopted by
the Board shall be deemed to be part of the Plan, but each supplement shall
apply only to Participants within the affected jurisdiction and the Company
shall not be required to provide copies of any supplement to Participants in any
jurisdiction which is not the subject of such supplement.
(f)
Non U.S.
Employees
. Awards may be granted to Participants who are
non-U.S. citizens or residents employed outside the United States, or both, on
such terms and conditions different from those applicable to Awards to
Participants employed in the United States as may, in the judgment of the Board,
be necessary or desirable in order to recognize differences in local law or tax
policy. The Board also may impose conditions on the exercise or vesting of
Awards in order to minimize the Board’s obligation with respect to tax
equalization for Participants on assignments outside their home country. The
Board may approve such supplements to or amendments, restatements or alternative
versions of the Plan as it may consider necessary or appropriate for such
purposes, without thereby affecting the terms of this Plan as in effect for any
other
purpose,
and the Secretary or other appropriate officer of the Company may certify any
such document as having been approved and adopted in the same manner as this
Plan.
(g)
Compliance with Section 409A of the
Code
. Except as provided in individual Award agreements
initially or by amendment, if and to the extent any portion of any payment,
compensation or other benefit provided to a Participant in connection with his
or her employment termination is determined to constitute “nonqualified deferred
compensation” within the meaning of Section 409A of the Code and the Participant
is a specified employee as defined in Section 409A(a)(2)(B)(i) of the Code, as
determined by the Company in accordance with its procedures, by which
determination the Participant (through accepting the Award) agrees that he or
she is bound, such portion of the payment, compensation or other benefit shall
not be paid before the day that is six months plus one day after the date of
“separation from service” (as determined under Code Section 409A) (the “
New Payment
Date
”), except as Code Section 409A may then permit. The aggregate of any
payments that otherwise would have been paid to the Participant during the
period between the date of separation from service and the New Payment Date
shall be paid to the Participant in a lump sum on such New Payment Date, and any
remaining payments will be paid on their original schedule.
The
Company makes no representations or warranty and shall have no liability to the
Participant or any other person if any provisions of or payments, compensation
or other benefits under the Plan are determined to constitute nonqualified
deferred compensation subject to Code Section 409A but do not to satisfy the
conditions of that section.
(h)
Limitations on Liability
.
Notwithstanding any other provisions of the Plan, no individual acting as a
director, officer, other employee, or agent of the Company will be liable to any
Participant, former Participant, spouse, beneficiary, or any other person for
any claim, loss, liability, or expense incurred in connection with the Plan, nor
will such individual be personally liable with respect to the Plan because of
any contract or other instrument he or she executes in his or her capacity as a
director, officer, other employee, or agent of the Company. The Company will
indemnify and hold harmless each director, officer, other employee, or agent of
the Company to whom any duty or power relating to the administration or
interpretation of the Plan has been or will be delegated, against any cost or
expense (including attorneys’ fees) or liability (including any sum paid in
settlement of a claim with the Board’s approval) arising out of any act or
omission to act concerning this Plan unless arising out of such person’s own
fraud or bad faith.
(i)
Governing Law
. The
provisions of the Plan and all Awards made hereunder shall be governed by and
interpreted in accordance with the laws of the State of Delaware, excluding
choice-of-law principles of the law of such state that would require the
application of the laws of a jurisdiction other than such state.