T
|
No
fee required.
|
£
|
Fee
computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
|
|
1.
|
Title
of each class of securities to which transaction
applies:
|
|
2.
|
Aggregate
number of securities to which transaction
applies:
|
|
3.
|
Per
unit price or other underlying value of transaction computed pursuant to
Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is
calculated and state how it was
determined):
|
|
4.
|
Proposed
maximum aggregate value of
transaction:
|
|
5.
|
Total
fee paid:
|
£
|
Fee
paid previously with preliminary
materials.
|
|
1.
|
Amount
Previously Paid:
|
|
2.
|
Form,
Schedule or Registration Statement
No.:
|
|
3.
|
Filing
Party:
|
|
4.
|
Date
Filed:
|
|
1.
|
Elect
seven (7) Directors to serve until the next Annual Meeting or until their
successors are duly elected and
qualified.
|
|
2.
|
Ratify
and approve amendments to the 2003 Stock Plan, which
include: an increase of 1.2 million shares of the common stock
issuable thereunder; permitting Outside Directors to receive restricted
stock awards, or restricted stock units; and moving the date of the grant
of refresher stock options for Outside Directors from January 15 to the
date of the Company’s regularly scheduled Annual
Meeting.
|
|
3.
|
Ratify
and approve an increase of 500,000 shares of the common stock issuable
under the 2002 Employee Stock Purchase
Plan.
|
|
4.
|
Ratify
the appointment of PricewaterhouseCoopers LLP as the independent
registered public accounting firm of Plantronics for fiscal year
2009.
|
|
5.
|
Transact
such other business as may properly come before the Annual Meeting or any
adjournment thereof.
|
|
·
|
FOR
each of the nominees for the Board of Directors listed in this Proxy
Statement. In an uncontested election, any nominee
for Director who receives a greater number of votes “withheld” for his or
her election than votes “for” such election (a “Majority Withheld Vote”)
shall promptly tender his or her resignation following certification of
the shareholder vote. The Nominating and Corporate Governance
Committee shall promptly consider the resignation offer and, based on the
circumstances that led to the Majority Withheld Vote, if known, make a
recommendation to the Board of Directors. The Board of Directors will act
on the Nominating and Corporate Governance Committee’s recommendation
within 60 days following certification of the shareholder
vote.
|
|
·
|
FOR
the ratification and approval of amendments to the 2003 Stock Plan, which
include an increase of 1.2 million shares of common stock issuable
thereunder.
|
|
·
|
FOR
the ratification and approval of an increase of 500,000 shares of common
stock issuable under the 2002 Employee Stock Purchase
Plan.
|
|
·
|
FOR
the appointment of PricewaterhouseCoopers LLP, independent registered
public accounting firm, to audit the consolidated financial statements of
Plantronics for its fiscal year
2009.
|
|
•
|
You
may vote by telephone;
|
|
•
|
You
may vote over the Internet;
and
|
|
•
|
You
may also vote in person at the Annual
Meeting.
|
|
•
|
Finally,
you may request a proxy card from us, and indicate your vote by
completing, signing and dating the card where indicated and by mailing or
otherwise returning the card in the enclosed prepaid
envelope.
|
|
•
|
By
mail addressed to:
|
|
•
|
By
calling (831) 426-5858 or (800) 544-4660 and asking for Investor
Relations.
|
|
•
|
By
leaving a message on the Investor Relations portal of our Website
at:
|
Name of
Nominee
|
Age
|
Positions With
Plantronics
|
Director
Since
|
|||
Marv
Tseu (1)(2)(3)(5)
|
60
|
Director
and Chair of the Board
|
1999
|
|||
Ken
Kannappan
|
48
|
Director,
President and Chief Executive Officer
|
1999
|
|||
Brian
Dexheimer(5)
|
45
|
Director
|
2008
|
|||
Gregg
Hammann (2)(3)
|
45
|
Director
|
2005
|
|||
John Hart (1)(3)(5) |
62
|
Director |
2006
|
|||
Marshall
Mohr (1)(2)
|
52
|
Director
|
2005
|
|||
Roger
Wery (1)(4)(5)
|
47
|
Director
|
2001
|
(1)
|
Member
of the Nominating and Corporate Governance
Committee
|
(2)
|
Member
of the Audit Committee
|
(3)
|
Member
of the Compensation Committee
|
(4)
|
Member
of the Mergers and Acquisitions
Committee
|
(5)
|
Member
of the Strategy Committee
|
Name
|
Fees Earned or Paid in Cash
|
Stock Awards
|
Option Awards (1) (2) (3)
|
Non-Equity Incentive Plan
Compensation
|
Change in Pension Value and Nonqualified Deferred
Compensation Earnings
|
All Other Compensation
|
Total
|
|||||||||||
Marv Tseu
|
$ | 65,000 | $ | 1,182 | $ | 66,182 | ||||||||||||
Gregg Hammann
|
38,000 | 1,182 | 39,182 | |||||||||||||||
John Hart
|
38,000 | 1,182 | 39,182 | |||||||||||||||
Marshall Mohr
|
42,000 | 1,182 | 43,182 | |||||||||||||||
Trude Taylor
|
35,000 | 1,182 | 36,182 | |||||||||||||||
Roger Wery
|
35,000 | 1,182 | 36,182 |
|
(1)
|
This
amount represents the dollar amount recognized for financial statement
reporting purposes, disregarding estimated forfeitures, with respect to
the fiscal year.
|
|
(2)
|
The
grant date fair value of each option award computed in accordance with FAS
123R is $23,338.
|
|
(3)
|
The
aggregate number of option awards outstanding at fiscal year end for each
director are: Marv Tseu 36,000 shares; John Hart 18,000 shares;
Gregg Hammann 21,000 shares; Marshall Mohr 21,000 shares; Trude Taylor
Estate 23,250 shares; and Roger Wery 33,000
shares.
|
|
·
|
The
difference between the fair market value of a share on the date of
exercise over the exercise price;
times
|
|
·
|
The
number of shares with respect to which the stock appreciation right is
exercised.
|
Average Per Share Exercise
Price
|
Number of Options Granted
|
Restricted Stock Awards (4)
|
||||||||||
Ken
Kannappan
|
$ | 27.58 | 20,000 | $ | 799,737 | |||||||
Director,
President and CEO
|
||||||||||||
Barbara
Scherer
|
27.58 | 8,000 | 385,618 | |||||||||
Senior
Vice President and CFO
|
||||||||||||
Philip
Vanhoutte
|
27.58 | 4,000 | 319,280 | |||||||||
Managing
Director - EMEA
|
||||||||||||
Don
Houston
|
27.58 | 6,000 | 467,228 | |||||||||
Senior
Vice President Sales
|
||||||||||||
Joyce
Shimizu
|
27.58 | 3,200 | 314,985 | |||||||||
Vice
President & General Manager – Home & Home Office
|
||||||||||||
Executive
Group (1)
|
27.58 | 41,200 | 2,286,848 | |||||||||
Non-Executive
Director Group (2)
|
20.28 | 15,000 | 0 | |||||||||
Non-Executive
Officer Employee Group (3)
|
26.94 | 715,535 | 3,216,474 |
(1)
|
The
Executive Group is composed of the Named Executive
Officers.
|
(2)
|
The
Non-Executive Director Group is composed of all Plantronics Board of
Directors except Ken Kannappan.
|
(3)
|
The
Non-Executive Officer Employee Group is composed of all Plantronics
employees worldwide minus the Executive Group. The Non-Executive Officer
Employee Group average per share exercise price is calculated as a
weighted average.
|
(4)
|
Based
on market value of Plantronics common stock at March 29, 2008 of $19.10,
net of consideration paid ($0.01), multiplied by the number of unvested
restricted stock award shares at year
end.
|
Name and Position
|
Number of Shares Purchased
|
Average Per Share Purchase
Price
|
||||||
Ken
Kannappan
|
1,416 | $ | 16.25 | |||||
Director,
President and CEO
|
||||||||
Barbara
Scherer
|
1,094 | $ | 16.31 | |||||
Senior
Vice President and CFO
|
||||||||
Philip
Vanhoutte
|
0 | N/A | ||||||
Managing
Director – EMEA
|
||||||||
Don
Houston
|
1,416 | $ | 16.25 | |||||
Senior
Vice President Sales
|
||||||||
Joyce
Shimizu
|
0 | N/A | ||||||
Vice
President & General Manager—Home & Home Office
|
||||||||
All
executive officers, as a group (1)
|
13,209 | $ | 16.27 | |||||
All
directors who are not executive officers, as a group (2)
|
0 | N/A | ||||||
All
employees who are not executive officers, as a group (3)
|
225,635 | $ | 16.31 |
|
(1)
|
The
executive group is composed of all Executive
Officers.
|
|
(2)
|
The
non-executive director group is composed of all Plantronics Board of
Directors except Ken Kannappan. Directors who are not employees of the
Company are not eligible to participate in the
ESPP.
|
|
(3)
|
The
non-executive officer employee group is composed of all Plantronics
employees worldwide minus the executive group. The non-executive officer
employee group average per share exercise price is calculated as a
weighted average.
|
(a)
|
(b)
|
(c)
|
||||||||||
Plan
Category
|
Number of securities to be issued upon exercise of
outstanding options, warrants and rights
|
Weighted-average exercise price of outstanding
options, warrants and rights
|
Number of securities remaining available for
future issuance under equity compensation plans(excluding securities
reflected in column (a))
|
|||||||||
Equity
compensation plans approved by security holders(1)
|
8,510,157 | (3) | $ | 26.28 | 2,396,889 | (4) | ||||||
Equity
compensation plans not approved by security holders(2)
|
51,082 | 33.49 | N/A | |||||||||
Total
|
8,561,239 | $ | 26.32 | 2,107,359 |
(1)
|
Includes
the 1993 Stock Option Plan, the 1993 Director Stock Option Plan, the 2003
Stock Plan and the 2002 Employee Stock Purchase Plan but does not include
the additional 1.2 million shares for which stockholder approval is being
sought at this Annual Meeting for the 2003 Stock Plan or the 500,000
shares for which stockholder approval is being sought at this Annual
Meeting for the 2002 Employee Stock Purchase
Plan.
|
(2)
|
Granted
as a material inducement of employment to current and former employees of
Altec Lansing in connection with the Plantronics’ acquisition of Altec
Lansing. The material features of this plan are substantially
the same as those of Plantronics’ 2003 Stock Plan and are fully described
in the Form S-8 filed by Plantronics with the SEC on August 18, 2005 and
in Note 12 to the Consolidated Financial Statements contained in our
Annual Report on Form 10-K for the fiscal year ended March 31,
2008.
|
(3)
|
Excludes
purchase rights accruing under the 2002
ESPP.
|
(4)
|
Consists
of shares available for future issuance under the 1993 Stock Option Plan,
the 1993 Director Stock Option Plan, the 2003 Stock Plan and the 2002
ESPP.
|
Fiscal
Year ended March 31, 2007
|
$ | 2,923,746 | ||
Fiscal
Year ended March 31, 2008
|
$ | 2,314,915 | ||
Amounts
are accumulated based on the fiscal year for which the service is provided
and not the year in which the services are rendered. Certain amounts have
been estimated pending completion of statutory audits or accumulation of
actual billing information.
|
||||
Audit-Related Fees. The
aggregate fees billed to us in fiscal 2008 for professional services
rendered by PricewaterhouseCoopers LLP for advisory work of Section 404 of
the Sarbanes Oxley Act of 2002 were:
|
||||
Fiscal
Year ended March 31, 2007
|
$ | 34,824 | ||
Fiscal
Year ended March 31, 2008
|
$ | 0 | ||
Tax Fees. The aggregate
fees billed to us in each of fiscal 2007 and fiscal 2008 for professional
services rendered by PricewaterhouseCoopers LLP for tax compliance, tax
advice and tax planning were:
|
||||
Fiscal
Year ended March 31, 2007
|
$ | 204,986 | ||
Fiscal
Year ended March 31, 2008
|
$ | 220,906 |
Fiscal
Year ended March 31, 2007
|
$ | 3,900 | ||
Fiscal
Year ended March 31, 2008
|
$ | 3,900 |
Name and Address of Beneficial
Owner (1)
|
Amount
and Nature of Beneficial Ownership (2)
|
Percentage
of Class (3)
|
|||
FMR
Corp. (4)
|
|||||
82
Devonshire Street
|
|||||
Boston, Massachusetts 02109
|
6,119,431 | 12.6 | % | ||
PRIMECAP
Management Company (5)
|
|||||
225
South Lake Ave., Suite 400
|
|||||
Pasadena,
CA 91101-3005
|
5,880,750 | 12.1 | % | ||
Barclays
Global Investors (Deutschland) AG (6)
|
|||||
Apianstrasse
6
|
|||||
D-85774
|
|||||
Unterfohring,
Germany
|
2,909,745 | 6.0 | % | ||
Ken
Kannappan
|
1,193,222 | 2.4 | % | ||
Barbara
Scherer
|
304,278 | * | |||
Don
Houston
|
282,672 | * | |||
Philip
Vanhoutte
|
172,666 | * | |||
Joyce
Shimizu
|
156,883 | * | |||
Marv
Tseu
|
35,624 | * | |||
Roger
Wery
|
26,624 | * | |||
Estate
of Trude Taylor
|
23,250 | * | |||
Gregg
Hammann
|
14,624 | * | |||
Marshall
Mohr
|
11,624 | * | |||
John
Hart
|
7,687 | * | |||
Brian
Dexheimer
|
0 | * | |||
All
Directors and All Executive Officers as a group (22
persons)
|
2,855,915 | 5.2 | % |
|
(1)
|
Unless
otherwise indicated, the address for each person and entity named in the
table is c/o Plantronics, Inc., 345 Encinal Street, Santa Cruz, CA
95060.
|
(2)
|
Includes
stock underlying stock options held by Directors and Named Executive
Officers that are exercisable within 60 days of April 30, 2008, as
follows: Mr. Kannappan, 1,096,555 shares; Ms. Scherer, 256,333 shares; Mr.
Houston, 237,666 shares; Mr. Vanhoutte, 146,666; Ms. Shimizu, 136,083
shares; Mr. Tseu, 29,624 shares; Mr. Wery, 26,624 shares; the Estate of
Trude Taylor, 23,250 shares; Mr. Hammann, 14,624 shares; Mr. Mohr, 11,624
shares; and Mr. Hart, 7,687 shares. All Directors and All
Executive Officers as a group (22 persons), 2,336,659
shares.
|
(3)
|
For
each person and group included in the table, percentage ownership is
calculated by dividing the number of shares beneficially owned by such
person or group as described above by the sum of the 48,939,788 shares of
common stock outstanding on April 30, 2008 and the number of shares of
common stock that such person or group had the right to acquire on or
within 60 days of April 30, 2008 as set forth in footnote (2)
above.
|
(4)
|
As
of December 31, 2007, FMR Corp. claims sole dispositive power as to
6,119,431 shares and sole voting power as to 3,600 of these shares.
Information provided herein is based solely upon FMR Corp.’s Schedule 13G
filed on February 13, 2008.
|
(5)
|
As
of December 31, 2007, PRIMECAP Management Company (“PRIMECAP”) claims sole
dispositive power as to 5,880,750 shares and neither sole nor shared
voting power over these shares, based solely upon PRIMECAP’s Schedule 13G
filed on February 9, 2008. PRIMECAP has informed Plantronics
that 4,701,500 of theses 5,880,750 shares were held by Vanguard Chester
Funds – Vanguard PRIMECAP Fund, which is managed by
PRIMECAP. In Amendment 14 to Schedule 13G filed February 27,
2008, Vanguard Chester Funds – Vanguard PRIMECAP Fund, 100 Vanguard Blvd.,
Malvern, PA 19355, reported that, as of February 27, 2008 it
had sole voting power over 4,701,500 of these shares and neither sole nor
shared dispositive power over any of these
shares.
|
(6)
|
As
of December 31, 2007, Barclays Global Investors (Deutschland) AG, claims
sole dispositive power as to 2,909,745 shares and sole voting power as to
2,620,583 shares. Information provided herein is based solely
upon Barclays Global Investors (Deutschland) AG’s Schedule 13G filed on
January 10, 2008.
|
|
·
|
Attract
highly qualified executives to Plantronics and motivate such individuals
to perform at their highest levels
|
|
·
|
Reward
outstanding performance
|
|
·
|
Retain
executives whose skills are essential for building Plantronics’ business
and for long-term value creation
|
|
·
|
Annually
establish incentives for executives that are directly tied to the overall
financial performance of Plantronics as well as to individual performance
goals
|
|
·
|
Implement
short- and long-term incentives to align executive efforts with
stockholder value creation and foster a sense of ownership in
Plantronics
|
|
·
|
Provide
a total compensation package that is competitive with the compensation
paid to executives in similar positions at comparable
companies.
|
|
·
|
Base
salaries, which are established based on the scope of our executives’
responsibilities, considering competitive market compensation paid by
other companies for similar positions. Base salaries are
targeted near the median of the range of salaries for executives in
similar positions with similar responsibilities at comparable
companies;
|
|
·
|
Short-term
incentive bonuses in the form of quarterly bonuses under the Executive
Incentive Plan focus the executives on business group/unit level and
individual objectives, and the annual bonus under the Executive Incentive
Plan is directly linked to earnings per share and asset utilization
objectives. The value of these short-term cash incentives is generally
targeted between the 65th
and 75th percentile
as needed to achieve competitive target total cash compensation
levels.
|
|
·
|
Target
total cash compensation is the sum of base salary and short-term incentive
bonuses and is generally targeted at the 62.5 percentile, which is halfway
between the median and the 75th
percentile;
|
|
·
|
Long-term
equity incentives in the form of stock options or shares of restricted
stock that align executive compensation incentives with the interests of
Plantronics’ stockholders;
|
|
·
|
TDC
is the sum of target cash compensation and long-term incentives and is
generally targeted at the 62.5 percentile;
and
|
|
·
|
Compensation
and employee benefits generally available to employees of
Plantronics.
|
|
·
|
Evaluated
the competitive positioning of Company's named executive officers’ base
salaries, annual incentive and long-term incentive compensation relative
to its primary peers and the broader
industry.
|
|
·
|
Advised
the Committee on Chief Executive Officer and other named executive officer
target award levels within the annual and long-term incentive program and,
as needed, on actual compensation
actions.
|
|
·
|
Provided
ongoing advice on the design of Company's annual and long-term incentive
plans;
|
|
·
|
Briefed
the Committee on executive compensation trends among Company's peers and
broader industry;
|
|
·
|
Advised
the Committee as requested on the performance measures and performance
targets for the annual and long-term
programs;
|
|
·
|
Reviewed
tally sheets of total compensation developed internally by the
Company;
|
|
·
|
Assisted
with the preparation of the Compensation Discussion and Analysis for this
proxy statement.
|
|
·
|
Radford
Executive Compensation Survey for companies with $200 million to $1
billion in annual revenue. The companies (100+) that participate in this
survey are primarily high-tech firms. These firms are deemed to
be the most likely firms to attract Plantronics executive talent or from
which Plantronics would hire executive
talent.
|
|
·
|
Mercer’s
US Benchmark Database which includes companies (100+) of various
industries and generally have annual revenue in the $500 million to $1.5
billion range. This survey provides compensation data for executives from
companies in general industry, not just high technology
firms.
|
|
·
|
Mercer’s
Global Disclosure Database, which contains data from recent proxy
statement disclosures. Mercer provided proxy data for firms (480+ firms
from all industries and 25+ firms from the Tech Hardware and Equipment
industry) with annual revenue in the $400 million to $1.6 billion range.
This data was primarily used in determining long-term incentive targets
for NEOs. Stock options are valued using Black-Scholes, and all
other long-term equity vehicles are valued using the fair market value
stock price on the date of grant.
|
Metric
|
Weighting
|
Minimum
|
Target
|
Maximum
|
||||||||||||
Award
Multiplier
|
0.5 | x | 1.0 | x | 2.0 | x | ||||||||||
Share
1-year
|
75 | % | $ | 1.00 | $ | 1.12 | $ | 1.44 | ||||||||
Asset
Utilization
|
25 | % | 2.61 | 2.78 | 3.00 |
Metric
|
FY08
Total
|
Weight
|
Payout
Earned
|
Weighted
Payout
|
||||||||||||
GAAP EPS
|
$ | 1.39 | 75 | % | 184 | % | 138 | % | ||||||||
Asset
Utilization
|
2.77 | 25 | % | 94 | % | 24 | % | |||||||||
Total
|
162 | % |
|
·
|
Attract
and retain highly qualified
executives.
|
|
·
|
Align
the interests of the executives with the interests of Plantronics’
stockholders. Stock options and restricted stock constitute a
significant portion of Plantronics’ incentive compensation program. For
example, in fiscal 2008 approximately 36% of the CEO’s TDC consisted of
stock options and restricted stock
awards.
|
|
·
|
Encourage
employees to remain with Plantronics. Stock options and restricted stock
granted under the Stock Plan incorporate time-based vesting
schedules.
|
|
·
|
reviewing
Mercer’s LTI as a percent of base salary recommendation for each
executive’s position;
|
|
·
|
using
Plantronics’s Black-Scholes value and a recent fair market stock price for
Plantronics stock; the price that was used was $28.00 per
share;
|
|
·
|
weighing
the executive’s past performance, future contribution potential and other
compensation elements the executive received, and
then
|
|
·
|
splitting
the total LTI award into stock options and restricted
stock. The actual split varied by executive based on the CEO’s
assessment and recommendation and the Committee’s approval. The CEO’s
equity grant was determined by the Committee without the CEO being
present.
|
|
·
|
Continued
cash payment equal to 75% of his average cash compensation earned in the
four fiscal quarters immediately prior to his termination
date.
|
|
·
|
Continued
coverage of the Company’s Benefits which include the group medical/dental
plan and Exec-u-care medical reimbursement insurance program, the
company’s disability, life or other group insurance benefits and the
Automobile Expense Reimbursement
Program.
|
Name and Principal Position
|
Fiscal Year
|
Salary ($)
|
Bonus ($)
|
Stock Awards ($) (1)
|
Option Awards($) (2)
|
Non- Equity Incentive Plan Compensation ($)
(3)
|
Change in Pension Value and Nonqualified Deferred
Compensation Earnings
|
All Other Compensation ($) (4)
(5)
|
Total ($)
|
|||||||||||||||
Ken Kannappan
|
2008
|
613,500 | 43,428 | 26,968 | 723,318 | 33,497 | 1,440,711 | |||||||||||||||||
Director, President and CEO
|
2007
|
550,001 | 57,057 | 99,018 | 147,013 | 34,425 | 887,514 | |||||||||||||||||
Barbara Scherer,
|
2008
|
367,500 | 17,371 | 10,787 | 311,099 | 27,551 | 734,308 | |||||||||||||||||
Senior VP Finance & Administration and
CFO
|
2007
|
292,108 | 8,605 | 16,218 | 101,239 | 28,531 | 446,701 | |||||||||||||||||
Philip Vanhoutte,
|
2008
|
368,958 | 11,581 | 5,394 | 234,088 | 53,711 | 673,732 | |||||||||||||||||
Managing Director - EMEA
|
2007
|
305,332 | 12,047 | 8,109 | 121,758 | 42,742 | (6) | 489,988 | ||||||||||||||||
Don Houston,
|
2008
|
320,000 | 14,476 | 8,090 | 271,099 | 35,570 | 649,235 | |||||||||||||||||
Senior Vice President –
Sales
|
2007
|
259,960 | 25,815 | 8,109 | 91,879 | 34,319 | 419,682 | |||||||||||||||||
Joyce Shimizu,
|
2008
|
290,000 | 14,476 | 4,315 | 189,950 | 34,128 | 532,869 | |||||||||||||||||
VP & General Manager – Home & Home
Office
|
2007
|
261,414 | 10,326 | 6,487 | 107,102 | 28,785 | 414,114 |
(1)
|
Stock
awards reported are amounts recognized for financial statement reporting
purposes with respect to the fiscal year in accordance with FAS 123R,
disregarding estimated forfeitures. Refer to Footnote No.
2 – Significant Accounting Policies, Stock-Based Compensation Expense and
Footnote No. 12 – Stockholders’ Equity to the Company’s financial
statements contained in the Company’s Form 10-K filed May 27, 2008 for
assumptions made in valuation.
|
(2)
|
Option
awards reported are amounts recognized for financial statement reporting
purposes with respect to the fiscal year in accordance with FAS 123R,
disregarding estimated forfeitures. Refer to Footnote No. 2 –
Significant Accounting Policies, Stock-Based Compensation Expense and
Footnote No. 12 – Stockholders’ Equity to the to the Company’s financial
statements contained in the Company’s Form 10-K filed May 27, 2008 for
assumptions made in valuation.
|
(3)
|
Amounts
shown are the sum of the components
a-d:
|
|
a)
|
the
following payments by Plantronics under the Quarterly Profit Sharing Plan
for each executive in fiscal 2007: Mr. Kannappan ($36,021), Ms. Scherer
($19,125), Mr. Vanhoutte ($20,742), Mr. Houston ($17,112) and Ms. Shimizu
($17,234). In fiscal 2008, the Quarterly Profit Sharing Plan
was discontinued for executive officers including the
NEO’s.
|
|
b)
|
the
following payments by Plantronics under the Over Achievement Bonus Plan
for each executive in fiscal 2007: Mr. Kannappan ($0), Ms.
Scherer ($0), Mr. Vanhoutte ($0), Mr. Houston ($0) and Ms. Shimizu
($0). In fiscal 2008, the Over Achievement Bonus Plan was
discontinued for executive officers including the
NEO’s.
|
|
c)
|
the
following payments by Plantronics under the Regular Bonus Plan for each
executive in fiscal 2007 respectively: Mr. Kannappan ($110,992), Ms.
Scherer ($82,114), Mr. Vanhoutte ($100,660), Mr. Houston ($74,767) and Ms.
Shimizu ($89,868). In fiscal 2008, the Regular Bonus Plan was
replaced by the Quarterly Incentive Plan. The following
payments were made under the Quarterly Incentive Plan
respectively: Mr. Kannappan ($276,076), Ms. Scherer ($117,610),
Mr. Vanhoutte ($86,701), Mr. Houston ($102,619) and Ms. Shimizu
($72,500).
|
|
d)
|
the
following payments by Plantronics under the Supplemental Bonus Plan for
each executive in fiscal 2007: Mr. Kannappan ($0), Ms. Scherer ($0), Mr.
Vanhoutte ($0), Mr. Houston ($0) and Ms. Shimizu ($0). In
fiscal 2008, the Supplemental Bonus Plan was replaced by the Annual
Incentive Plan. The following payments were made under the
Annual Incentive Plan respectively: Mr. Kannappan ($447,242),
Ms. Scherer ($193,489), Mr. Vanhoutte ($147,387), Mr. Houston ($168,480)
and Ms. Shimizu ($117,450).
|
(4)
|
Amounts
shown include company contributions or other allocations to defined
contribution plans for benefits such as employer 401(k) contributions,
401(k) match payments, pension contributions (for Mr. Vanhoutte),
Restricted Stock Award dividends and insurance
premiums.
|
(5)
|
Includes
contributions for the Defined Compensation Program, a supplemental benefit
program available only to vice presidents and above to reimburse
participants for items such as medical co-payments, legal or financial
planning services, and a car allowance. For Mr. Vanhoutte it
also includes a gym membership and office
allowance.
|
(6)
|
This
amount includes a $19,692 non-US pension and a $26,816 car allowance paid
to Mr. Vanhoutte.
|
Name |
Grant Date (1)
|
Compen-sation Committee Approval
Date
|
Estimated Future Payouts Under Non-Equity
Incentive Plan Awards
|
Estimated Future Payouts Under Equity Incentive
Plan Awards
|
All Other Stock Awards: Number of Shares of Stock
or Units (#)
|
All Other Option Awards: Number of Securities
Underlying Options (#) (2)
|
Exercise or Base Price of Option Awards
($/Sh)
|
Grant Date Fair Value of Stock
Awards
|
Grant Date Fair Value of Option
Awards
|
|||||||||||||||||||||||||||
Threshold ($)
|
Target ($)
|
Maximum ($)
|
Threshold ($)
|
Target ($)
|
Maximum ($)
|
|||||||||||||||||||||||||||||||
Ken Kannappan(3)
|
10/26/07
|
9/27/07
|
15,000 | 20,000 | $ | 27.58 | $ | 413,550 | $ | 190,690 | ||||||||||||||||||||||||||
Barbara Scherer
|
10/26/07
|
9/27/07
|
6,000 | 8,000 | 27.58 | 165,420 | 76,276 | |||||||||||||||||||||||||||||
Phillip Vanhoutte
|
10/26/07
|
9/27/07
|
4,000 | 4,000 | 27.58 | 110,280 | 38,138 | |||||||||||||||||||||||||||||
Don Houston
|
10/26/07
|
9/27/07
|
5,000 | 6,000 | 27.58 | 137,850 | 57,207 | |||||||||||||||||||||||||||||
Joyce Shimizu
|
10/26/07
|
9/27/07
|
5,000 | 3,200 | 27.58 | 137,850 | 30,510 |
|
(1)
|
Pursuant
to the policy of the Compensation Committee, stock options are granted
three days after quarterly financial results are
announced.
|
|
(2)
|
33.3%
of the shares subject to the option vest on the 1-year anniversary of the
grant, and 1/36 of the shares subject to the option vest each month
thereafter.
|
|
(3)
|
Please
see discussion of acceleration of equity grants on page 41 under
Mr. Kannappan’s Employment
Agreement.
|
Option Awards
|
Stock Awards
|
|||||||||||||||
Name
|
Number of Shares Acquired on
Exercise
|
Value Realized on Exercise
|
Number of Shares Acquired on
Vesting
|
Value Realized on Vesting
|
||||||||||||
Ken Kannappan
|
77,600 | $ | 811,501 | 14,504 | $ | 351,110 | ||||||||||
Barbara Scherer
|
88,125 | 1,171,542 | 5,200 | 129,242 | ||||||||||||
Philip Vanhoutte
|
4,400 | 110,206 | ||||||||||||||
Don Houston
|
30,000 | 433,860 | 6,400 | 157,184 | ||||||||||||
Joyce Shimizu
|
12,750 | 134,222 | 3,800 | 97,918 |
Option Awards
|
Stock Awards
|
||||||||||||||||||||||||
Number of Securities Underlying Unexercised
Options (#) Exercisable
|
Number of Securities Underlying Unexercised
Options (#) Unexercisable
|
Equity Incentive Plan Awards: Number of Securities
Underlying Unexercised Unearned Options (#)
|
Option Exercise Price ($)
|
Option Expiration Date
|
Number of Shares or Units of Stock That Have Not
Vested (#)
|
Market Value of Shares or Units of Stock That Have
Not Vested ($)
|
Equity Incentive Plan Awards: Number of Unearned
Shares, Units or Other Rights That Have Not Vested
(#)
|
Equity Incentive Plan Awards: Market or Payout
Value of Unearned Shares, Units or Other Rights That Have Not Vested
($)
|
|||||||||||||||||
Ken Kannappan (1)
|
150,000 | 0 | 19.92 |
11/6/2008
|
|||||||||||||||||||||
120,000 | 0 | 21.00 |
6/24/2009
|
|
|||||||||||||||||||||
120,000 | 0 | 35.46 |
6/29/2010
|
||||||||||||||||||||||
150,000 | 0 | 17.49 |
6/22/2011
|
||||||||||||||||||||||
190,000 | 0 | 21.35 |
11/1/2011
|
||||||||||||||||||||||
150,000 | 0 | 16.50 |
7/15/2012
|
||||||||||||||||||||||
90,000 | 10,000 | 26.90 |
9/3/2013
|
||||||||||||||||||||||
50,000 | 0 | 40.48 |
9/22/2011
|
||||||||||||||||||||||
14,500 | 9,500 | 27.16 |
10/19/2012
|
||||||||||||||||||||||
47,221 | 52,779 | 20.44 |
10/27/2013
|
||||||||||||||||||||||
0 | 20,000 | 27.58 |
10/26/2014
|
41,893 | 799,737 | ||||||||||||||||||||
Barbara Scherer (2)
|
30,000 | 0 | 21.75 |
2/8/2009
|
|||||||||||||||||||||
30,000 | 0 | 24.46 |
2/4/2010
|
||||||||||||||||||||||
25,000 | 0 | 30.00 |
2/13/2011
|
||||||||||||||||||||||
45,000 | 0 | 17.49 |
6/22/2011
|
||||||||||||||||||||||
45,000 | 0 | 16.50 |
7/15/2012
|
||||||||||||||||||||||
36,000 | 4,000 | 26.90 |
9/3/2013
|
||||||||||||||||||||||
35,000 | 0 | 40.48 |
9/22/2011
|
||||||||||||||||||||||
7,083 | 12,917 | 20.44 |
10/27/2013
|
||||||||||||||||||||||
0 | 8,000 | 27.58 |
10/26/2014
|
20,200 | 385,618 | ||||||||||||||||||||
Philip Vanhoutte (3)
|
90,000 | 10,000 | 25.84 |
9/22/2013
|
|||||||||||||||||||||
45,000 | 5,000 | 25.84 |
9/22/2013
|
||||||||||||||||||||||
3,541 | 6,459 | 20.44 |
10/27/2013
|
||||||||||||||||||||||
0 | 4,000 | 27.58 |
10/26/2014
|
16,725 | 319,280 | ||||||||||||||||||||
Don Houston (4)
|
30,000 | 0 | 21.75 |
2/8/2009
|
|||||||||||||||||||||
30,000 | 0 | 24.46 |
2/4/2010
|
||||||||||||||||||||||
10,000 | 0 | 38.75 |
9/15/2010
|
||||||||||||||||||||||
25,000 | 0 | 30.00 |
2/13/2011
|
||||||||||||||||||||||
40,000 | 0 | 17.49 |
6/22/2011
|
||||||||||||||||||||||
40,000 | 0 | 16.50 |
7/15/2012
|
||||||||||||||||||||||
27,000 | 3,000 | 26.90 |
9/3/2013
|
||||||||||||||||||||||
30,000 | 0 | 40.48 |
9/22/2011
|
||||||||||||||||||||||
3,541 | 6,459 | 20.44 |
10/27/2013
|
||||||||||||||||||||||
0 | 6,000 | 27.58 |
10/26/2014
|
24,475 | 467,228 | ||||||||||||||||||||
Joyce Shimizu (5)
|
39,000 | 0 | 21.88 |
5/6/2009
|
|||||||||||||||||||||
45,000 | 0 | 35.46 |
6/29/2010
|
||||||||||||||||||||||
22,500 | 2,500 | 26.90 |
9/3/2013
|
||||||||||||||||||||||
25,000 | 0 | 40.48 |
9/22/2011
|
||||||||||||||||||||||
2,833 | 5,167 | 20.44 |
10/27/2013
|
||||||||||||||||||||||
0 | 3,200 | 27.58 |
10/26/2014
|
16,500 | 314,985 |
(1)
|
The
first 6 options listed for Mr. Kannappan are fully
vested. The remaining 5 options vest, in the order given, on
9/3/08, 3/8/05, 10/19/09, 10/27/09 and
10/26/10.
|
(2)
|
The
first 5 options listed for Ms. Scherer are fully
vested. The remaining 4 options vest, in the order given, on
9/3/08, 3/8/05, 10/27/10 and
10/26/10.
|
(3)
|
Mr.
Vanhoutte’s options vest, in the order given, on 9/22/08, 9/22/08,
10/27/10 and 10/26/10.
|
(4)
|
The
first 6 options listed for Mr. Houston are fully
vested. The remaining 4 options vest, in the order given, on
9/3/08, 3/8/05, 10/27/10 and
10/26/10.
|
(5)
|
The
first 2 options listed for Ms. Shimizu are fully
vested. The remaining 4 options vest, in the order given, on
9/3/08, 3/8/05, 10/27/10 and
10/26/10.
|
Executive Benefits and Payments Upon
Separation
|
Voluntary Termination on
3/31/2008
|
Involuntary Not For Cause Termination on
3/31/2008
|
For Cause Termination on
3/31/2008
|
Involuntary for Certain Reasons Termination on
3/31/2008
|
Death or Disability on
3/31/2008
|
|||||||||||||||
Compensation (1)
|
$ | 1,002,613 | $ | 1,002,613 | - | $ | 1,002,613 | $ | 1,002,613 | |||||||||||
Benefits
|
Standard
medical, disability or life insurance (2)
|
Standard
medical, disability or life insurance (2)
|
Standard
medical, disability or life insurance (2)
|
Standard
medical, disability or life insurance (2)
|
Executive Benefits and Payments Upon Separation
Following a Change of Control
|
Voluntary Termination on
3/31/2008
|
Involuntary Not For Cause Termination on
3/31/2008
|
For Cause Termination on
3/31/2008
|
Involuntary for Certain Reasons Termination on
3/31/2008
|
Death or Disability on
3/31/2008
|
|||||||||||||||
Compensation (1)
|
- | $ | 187,500 | - | $ | 187,500 | $ | 187,500 | ||||||||||||
Benefits
|
- |
Standard
medical, disability or life insurance (2)
|
Standard
medical, disability or life insurance (2)
|
Standard
medical, disability or life insurance(2)
|
Executive Benefits
and Payments Upon Separation
|
Voluntary Termination on
3/31/2008
|
Involuntary Not For Cause Termination on
3/31/2008
|
For Cause Termination on
3/31/2008
|
Involuntary for Certain Reasons Termination on
3/31/2008
|
Death or Disability on
3/31/2008
|
|||||||||||||||
Compensation (1)
|
$ | 186,224 | - | $ | 186,224 | - | - | |||||||||||||
Benefits
|
Executive Benefits
and Payments Upon Separation Following a Change
of Control
|
Voluntary Termination on
3/31/2008
|
Involuntary Not For Cause Termination on
3/31/2008
|
For Cause Termination on
3/31/2008
|
Involuntary for Certain Reasons Termination on
3/31/2008
|
Death or Disability on
3/31/2008
|
|||||||||||||||
Compensation (1)
|
- | $ | 170,000 | - | $ | 170,000 | $ | 170,000 | ||||||||||||
Benefits
|
Standard
medical, disability or life insurance (2)
|
Standard
medical, disability or life insurance (2)
|
Standard
medical, disability or life insurance (2)
|
Executive Benefits
and Payments Upon Separation Following a Change
of Control
|
Voluntary Termination on
3/31/2008
|
Involuntary Not For Cause Termination on
3/31/2008
|
For Cause Termination on
3/31/2008
|
Involuntary for Certain Reasons Termination on
3/31/2008
|
Death or Disability on
3/31/2008
|
|||||||||||||||
Compensation (1)
|
- | $ | 145,000 | - | $ | 145,000 | $ | 145,000 | ||||||||||||
Benefits
|
Standard
medical, disability or life insurance (2)
|
Standard
medical, disability or life insurance (2)
|
Standard
medical, disability or life insurance (2)
|
For
the Board of Directors
|
|
/s/
Rich Pickard
|
|
Rich
Pickard
|
|
Secretary
|
|
·
|
Reviewed
and discussed Plantronics’ audited financial statements for the fiscal
year ended March 31, 2008 with Plantronics’ management, which has primary
responsibility for the financial
statements;
|
|
·
|
Discussed
with PricewaterhouseCoopers LLP, Plantronics’ independent registered
public accounting firm, the materials required to be discussed by
statement on Auditing Standard No.
61;
|
|
·
|
Received
and reviewed the written disclosures and the letter from
PricewaterhouseCoopers LLP required by Independent Standards Board
Standard No. 1 and has discussed with PricewaterhouseCoopers LLP its
independence; and
|
The
Audit Committee
|
|
Gregg
Hammann
|
|
Marshall
Mohr (Chair)
|
|
Marv
Tseu
|
Members
of the Compensation Committee:
|
|
Gregg
Hammann (Chair)
|
|
John
Hart
|
|
Marv
Tseu
|
SECTION
1.
|
PURPOSES
AND DEFINITIONS
|
|
1.1
|
Purposes of the
Plan. The purposes of this 2003 Stock Plan
are:
|
|
(A)
|
to
attract and retain the best available personnel for positions of
substantial responsibility,
|
|
(B)
|
to
provide additional incentive to Employees, Directors and Consultants,
and
|
|
(C)
|
to
promote the success of the Company’s
business.
|
|
1.2
|
The
Plan permits the grant of Incentive Stock Options, Nonstatutory Stock
Options, Restricted Stock Awards, Stock Appreciation Rights, and
Restricted Stock Units, as determined by the Administrator at the time of
grant.
|
|
1.3
|
Definitions. As
used herein, the following definitions shall
apply:
|
|
(A)
|
“Administrator”
means the Board or any Committees as shall be administering the Plan, in
accordance with Section 2.2.
|
|
(B)
|
“Annual Revenue”
means the Company’s or a business unit’s net sales for the Fiscal Year,
determined in accordance with generally accepted accounting
principles.
|
|
(C)
|
“Applicable
Laws” means the requirements relating to the administration of
equity based awards under U.S. state corporate laws, U.S. federal and
state securities laws, the Code, any stock exchange or quotation system on
which the Common Stock is listed or quoted and the applicable laws of any
foreign country or jurisdiction where Awards are, or will be, granted
under the Plan.
|
|
(D)
|
“Award” means,
individually or collectively, a grant under the Plan of Options,
Restricted Stock Awards, SARs, and Restricted Stock
Units.
|
|
(E)
|
“Award
Agreement” means the written or electronic agreement setting forth
the terms and provisions applicable to each Award granted under the Plan
and shall include an Option Agreement and a Restricted Stock Award
Agreement, as applicable. The Award Agreement is subject to the terms and
conditions of the Plan.
|
|
(F)
|
“Board” means
the Board of Directors of the
Company.
|
|
(G)
|
“Cash Position”
means the Company’s level of cash and cash
equivalents.
|
|
(H)
|
“Change in
Control” means the occurrence of any of the following
events:
|
|
(i)
|
Any
“person” (as such term is used in Sections 13(d) and 14(d) of the Exchange
Act) becomes the “beneficial owner” (as defined in Rule 13d3 of the
Exchange Act), directly or indirectly, of securities of the Company
representing fifty percent (50%) or more of the total voting power
represented by the Company’s then outstanding voting securities;
or
|
|
(ii)
|
The
consummation of the sale or disposition by the Company of all or
substantially all of the Company’s
assets;
|
|
(iii)
|
A
change in the composition of the Board occurring within a two-year period,
as a result of which fewer than a majority of the Directors are Incumbent
Directors. “Incumbent Directors” means Directors who either (A)
are Directors as of the effective date of the Plan, or (B) are elected, or
nominated for election, to the Board with the affirmative votes of at
least a majority of the Incumbent Directors at the time of such election
or nomination (but will not include an individual whose election or
nomination is in connection with an actual or threatened proxy contest
relating to the election of Directors to the Company);
or
|
|
(iv)
|
The
consummation of a merger or consolidation of the Company with any other
corporation, other than a merger or consolidation which would result in
the voting securities of the Company outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by being
converted into voting securities of the surviving entity or its parent) at
least fifty percent (50%) of the total voting power represented by the
voting securities of the Company or such surviving entity or its parent
outstanding immediately after such merger or
consolidation.
|
|
(I)
|
“Code” means the
Internal Revenue Code of 1986, as
amended.
|
|
(J)
|
“Committee”
means a committee of individuals appointed by the Board in accordance with
Section 2.2.
|
|
(K)
|
“Common Stock”
means the common stock of the
Company.
|
|
(L)
|
“Company” means
Plantronics, Inc., a Delaware
corporation.
|
|
(M)
|
“Consultant”
means any natural person, including an advisor, engaged by the Company or
a Parent or Subsidiary to render services to such
entity.
|
|
(N)
|
“Determination
Date” means the latest possible date that will not jeopardize the
qualification of an Award granted under the Plan as “performance-based
compensation” under Section 162(m) of the
Code.
|
|
(O)
|
“Director” means
a member of the Board.
|
|
(P)
|
“Disability”
means total and permanent disability as defined in Section 22(e)(3) of the
Code.
|
|
(Q)
|
“Earnings Per
Share” means as to any Fiscal Year, the Company’s or a business
unit’s Net Income, divided by a weighted average number of common shares
outstanding and dilutive common equivalent shares deemed outstanding,
determined in accordance with generally accepted accounting
principles.
|
|
(R)
|
“Employee” means
any person, including Officers and Directors, employed by the Company or
any Parent or Subsidiary of the Company. Neither service as a
Director nor payment of a Director’s fee by the Company shall be
sufficient to constitute “employment” by the
Company.
|
|
(S)
|
“Exchange Act”
means the Securities Exchange Act of 1934, as
amended.
|
|
(T)
|
“Fair Market
Value” means, as of any date, the value of Common Stock
determined as follows:
|
|
(i)
|
If
the Common Stock is listed on any established stock exchange or a
national market system, including without limitation the New York Stock
Exchange (NYSE), its Fair Market Value shall be the closing sales price
for such stock (or the closing bid, if no sales were reported) as quoted
on such exchange or system for the day of determination, as reported in
The Wall Street Journal or such other source as the Administrator deems
reliable;
|
|
(ii)
|
If
the Common Stock is regularly quoted by a recognized securities dealer but
selling prices are not reported, the Fair Market Value of a Share of
Common Stock shall be the mean between the high bid and low asked prices
for the Common Stock on the day of determination, as reported in The
Wall Street Journal or such other source as the Administrator deems
reliable; or
|
|
(iii)
|
In
the absence of an established market for the Common Stock, the Fair Market
Value shall be determined in good faith by the
Administrator.
|
|
(U)
|
“Fiscal Year”
means the fiscal year of the
Company.
|
|
(V)
|
“Incentive Stock
Option” means an Option intended to qualify as an incentive stock
option within the meaning of Section 422 of the Code and the regulations
promulgated thereunder.
|
|
(W)
|
“Individual Performance
Objective” means any individual Company business-related objective
that is objectively determinable within the meaning of Code Section 162(m)
and the Treasury Regulations promulgated thereunder. Individual
Performance Objectives shall include, but not be limited to, improvement
in customer satisfaction, opening of additional retail stores, and similar
objectively determinable performance objectives related to the
Participant’s job responsibilities with the
Company.
|
|
(X)
|
“Net Income”
means as to any Fiscal Year, the income after taxes of the Company for the
Fiscal Year determined in accordance with generally accepted accounting
principles.
|
|
(Y)
|
“Nonstatutory Stock
Option” means an Option not intended to qualify as an Incentive
Stock Option.
|
|
(Z)
|
“Notice of
Grant” means a written or electronic notice evidencing certain
terms and conditions of the grant of an individual Option or a Restricted
Stock Award. The Notice of Grant is part of the agreement
evidencing the terms and conditions of a specific
grant.
|
|
(AA)
|
“Officer” means
a person who is an officer of the Company within the meaning of Section 16
of the Exchange Act and the rules and regulations promulgated
thereunder.
|
|
(BB)
|
“Operating Cash
Flow” means the Company’s or a business unit’s sum of Net Income
plus depreciation and amortization less capital expenditures plus changes
in working capital comprised of accounts receivable, inventories, other
current assets, trade accounts payable, accrued expenses, product
warranty, advance payments from customers and long-term accrued expenses,
determined in accordance with generally acceptable accounting
principles.
|
|
(CC)
|
“Operating
Income” means the Company’s or a business unit’s income from
operations determined in accordance with generally accepted accounting
principles.
|
|
(DD)
|
“Option” means a
stock option granted pursuant to the Plan, as evidenced by a Notice of
Grant.
|
|
(EE)
|
“Option
Agreement” means an agreement between the Company and a Participant
evidencing the terms and conditions of an individual Option
grant. The Option Agreement is subject to the terms and
conditions of the Plan.
|
|
(FF)
|
“Optioned Stock”
means the Common Stock subject to an
Award.
|
|
(GG)
|
“Outside
Director” means a Director who is not an
Employee.
|
|
(HH)
|
“Parent” means a
“parent corporation,” whether now or hereafter existing, as defined in
Section 424(e) of the Code.
|
|
(II)
|
“Participant”
means the holder of an outstanding Award granted under the
Plan.
|
|
(JJ)
|
“Performance
Goals” will have the meaning set forth in Section 7.1 of the
Plan.
|
|
(KK)
|
“Performance
Period” means any Fiscal Year of the Company or such other period
as determined by the Administrator in its sole
discretion.
|
|
(LL)
|
“Plan” means
this 2003 Stock Plan, as amended and
restated.
|
|
(MM)
|
“Restricted
Stock” means shares of Common Stock acquired pursuant to a grant of
Restricted Stock Award or the early exercise of an
Option.
|
|
(NN)
|
“Restricted Stock
Award” means a grant of Restricted Stock pursuant to the Plan, as
evidenced by a Notice of Grant.
|
|
(OO)
|
“Restricted Stock Award
Agreement” means a written agreement between the Company and a
Participant evidencing the terms and restrictions applying to stock
granted under a Restricted Stock Award. The Restricted Stock
Award Agreement is subject to the terms and conditions of the Plan and the
Notice of Grant.
|
|
(PP)
|
“Restricted Stock
Unit” means an Award granted to a Participant pursuant to Section
6.
|
|
(QQ)
|
“Retirement”
unless otherwise defined in the Award Agreement or in a written
employment, services or other agreement between the Participant and the
Company or any Parent or Subsidiary of the Company, will have such meaning
as the Administrator may determine, or, if not so defined, will mean
termination of Participant’s status as a Service Provider after he or she
reaches age 55 and has completed at least ten (10) years of employment or
service with the Company or any Parent or Subsidiary of the Company;
provided, however, that with respect to Outside Directors who are granted
Options pursuant to Section 3.2 hereof, “Retirement” will mean termination
of an Outside Director’s status as a Director when (i) the Outside
Director’s age is 55 or over and he or she has continuously been a
Director for at least seven (7) years on the date of such termination or
(ii) the Outside Director has continuously been a Director for at least
ten (10) years from the date of such
termination.
|
|
(RR)
|
“Return on
Assets” means the percentage equal to the Company’s or a business
unit’s Operating Income before incentive compensation, divided by average
net Company or business unit, as applicable, assets, determined in
accordance with generally accepted accounting
principles.
|
|
(SS)
|
“Return on
Equity” means the percentage equal to the Company’s Net Income
divided by average shareholder’s equity, determined in accordance with
generally accepted accounting
principles.
|
|
(TT)
|
“Return on
Sales” means the percentage equal to the Company’s or a business
unit’s Operating Income before incentive compensation, divided by the
Company’s or the business unit’s, as applicable, revenue, determined in
accordance with generally accepted accounting
principles.
|
|
(UU)
|
“Rule 16b-3”
means Rule 16b-3 of the Exchange Act or any successor to Rule 16b-3, as in
effect when discretion is being exercised with respect to the
Plan.
|
|
(VV)
|
“Section 16(b)”
means Section 16(b) of the Exchange
Act.
|
|
(WW)
|
“Securities Act”
means the Securities Act of 1933, as
amended.
|
|
(XX)
|
“Service
Provider” means an Employee, Director or
Consultant.
|
|
(YY)
|
“Share” means a
share of the Common Stock, as adjusted in accordance with Section
8.4.
|
|
(ZZ)
|
“Stock Appreciation
Right” or “SAR” means an
Award, granted alone or in connection with an Option, that pursuant to
Section 5 is designated as an SAR.
|
|
(AAA)
|
“Subsidiary”
means a “subsidiary corporation”, whether now or hereafter existing, as
defined in Section 424(f) of the
Code.
|
|
(BBB)
|
“Total Stockholder
Return” means the total return (change in share price plus
reinvestment of any dividends) of a share of the Company’s common
stock.
|
SECTION
2.
|
ADMINISTRATION
|
|
2.1
|
Stock Subject to the
Plan.
|
|
(A)
|
Subject
to the provisions of Section 8.4, the maximum aggregate number of Shares
that may be optioned and sold under the Plan is 8,000,000
Shares. The Shares may be authorized, but unissued, or
reacquired Common Stock.
|
|
(B)
|
Any
Shares subject to Awards granted with an exercise price less than the Fair
Market Value on the date of grant of such Awards will be counted against
the numerical limits of Section 2.1(D) as 2.5 Shares for every one Share
subject thereto. Further, if Shares acquired pursuant to any
such Award are forfeited or repurchased by the Company and would otherwise
return to the Plan pursuant to Section 2.1(A), 2.5 times the number of
Shares so forfeited or repurchased will return to the Plan and will again
become available for issuance.
|
|
(C)
|
Shares
will not be deemed to have been issued pursuant to the Plan with respect
to any portion of an Award that is settled in cash. With
respect to SARs, all of the Shares for which the Award is exercised (that
is, Shares actually issued pursuant to a SAR, as well as the Shares that
represent payment of the exercise price) will cease to be available under
the Plan. Shares used to pay the tax and exercise price of an
Award will not become available for future grant or sale under the
Plan.
|
|
(D)
|
If
an Award expires or becomes unexercisable without having been exercised in
full, or with respect to Restricted Stock or Restricted Stock Units, is
forfeited to or repurchased by the Company, the unpurchased Shares (or for
Awards other than Options and SARs, the forfeited or repurchased Shares)
which were subject thereto shall become available for future grant or sale
under the Plan (unless the Plan has terminated); provided,
however, that Shares that have actually been issued under the Plan,
whether upon exercise or of an Award or issuance with respect thereto,
shall not be returned to the Plan and shall not become available for
future distribution under the Plan, except that if unvested Shares of
Restricted Stock or Restricted Stock Units are repurchased by or forfeited
to the Company, such Shares shall become available for future grant under
the Plan.
|
|
2.2
|
Administration of the
Plan.
|
|
(A)
|
Procedure.
|
|
(i)
|
Multiple
Administrative Bodies. Different Committees with respect
to different groups of Service Providers may administer the
Plan.
|
|
(ii)
|
Section
162(m). To the extent that the Administrator determines
it to be desirable to qualify Awards as “performance based compensation”
within the meaning of Section 162(m) of the Code, the Plan shall be
administered by a Committee of two or more “outside directors” within the
meaning of Section 162(m) of the
Code.
|
|
(iii)
|
Rule
16b-3. To the extent desirable to qualify transactions
hereunder as exempt under Rule 16b-3, the transactions contemplated
hereunder shall be structured to satisfy the requirements for exemption
under Rule 16b-3.
|
|
(iv)
|
Other
Administration. Other than as provided above, the Plan
shall be administered by (A) the Board or (B) a Committee, which committee
shall be constituted to satisfy Applicable
Laws.
|
|
(B)
|
Powers of the
Administrator. Subject to the provisions of the Plan,
and in the case of a Committee, subject to the specific duties delegated
by the Board to such Committee, the Administrator shall have the
authority, in its discretion:
|
|
(i)
|
to
determine the Fair Market Value;
|
|
(ii)
|
to
select the Service Providers to whom Awards may be granted
hereunder;
|
|
(iii)
|
to
determine the number of shares of Common Stock to be covered by each Award
granted hereunder;
|
|
(iv)
|
to
approve forms of agreement for use under the
Plan;
|
|
(v)
|
to
determine the terms and conditions of any Award in accordance with the
provisions of the Plan; provided, however, that the Administrator will not
permit any Participant to issue a promissory note in order to exercise or
otherwise acquire Shares pursuant to an
Award;
|
|
(vi)
|
to
construe and interpret the terms of the Plan and Awards granted pursuant
to the Plan;
|
|
(vii)
|
to
prescribe, amend and rescind rules and regulations relating to the Plan,
including rules and regulations relating to subplans established for the
purpose of satisfying applicable foreign
laws;
|
|
(viii)
|
to
modify or amend each Award (subject to Section 8.6(C)), including the
discretionary authority to extend the post-termination exercisability
period of Awards longer than is otherwise provided for in the
Plan;
|
|
(ix)
|
to
allow Participants to satisfy withholding tax obligations by electing to
have the Company withhold from the Shares to be issued upon exercise of an
Award that number of Shares having a Fair Market Value equal to the
minimum amount required to be withheld. The Fair Market Value
of the Shares to be withheld shall be determined on the date that the
amount of tax to be withheld is to be determined. All elections
by the Participant to have Shares withheld for this purpose shall be made
in such form and under such conditions as the Administrator may deem
necessary or advisable;
|
|
(x)
|
to
authorize any person to (i) make decisions, determinations and
interpretations on behalf of the Administrator to the extent allowed under
Applicable Laws, and (ii) execute on behalf of the Company any instrument
required to effect the grant of an Award previously granted by the
Administrator; and
|
|
(xi)
|
to
make all other determinations deemed necessary or advisable for
administering the Plan.
|
|
(C)
|
Effect of
Administrator’s Decision. The Administrator’s decisions,
determinations and interpretations, and those of any person authorized by
the Administrator to make decisions, determinations and interpretations on
behalf of the Administrator, shall be final and binding on all
Participants and any other holders of
Awards.
|
|
2.3
|
Eligibility. Nonstatutory
Stock Options may be granted to Service Providers provided, that, Outside
Directors may only be granted Nonstatutory Stock Options granted pursuant
to Section 3.2. Incentive Stock Options may be granted only to
Employees. Stock Appreciation Rights, Restricted Stock Awards
and Restricted Stock Units may be granted only to Employees, outside
Directors and Consultants.
|
SECTION
3.
|
STOCK
OPTIONS
|
|
3.1
|
Limitations.
|
|
(A)
|
Each
Option shall be designated in the Award Agreement as either an Incentive
Stock Option or a Nonstatutory Stock Option. However,
notwithstanding such designation, to the extent that the aggregate Fair
Market Value of the Shares with respect to which Incentive Stock Options
are exercisable for the first time by the Participant during any calendar
year (under all plans of the Company and any Parent or Subsidiary) exceeds
$100,000, such Options shall be treated as Nonstatutory Stock
Options. For purposes of this Section 3.1, Incentive Stock
Options shall be taken into account in the order in which they were
granted. The Fair Market Value of the Shares shall be
determined as of the time the Option with respect to such Shares is
granted.
|
|
(B)
|
The following
limitations shall apply to grants of
Options:
|
|
(i)
|
No
Participant shall be granted, in any Fiscal Year of the Company, Options
to purchase more than 500,000
Shares.
|
|
(ii)
|
In
connection with his or her initial employment, a Participant may be
granted Options to purchase up to an additional 500,000 Shares, which
shall not count against the limit set forth in Section
3.1(B)(i).
|
|
(iii)
|
The
foregoing limitations shall be adjusted proportionately in connection with
any change in the Company’s capitalization as described in Section
8.4.
|
|
(iv)
|
If
an Option is cancelled in the same Fiscal Year of the Company in which it
was granted (other than in connection with a transaction described in
Section 8.4), the cancelled Option will be counted against the limits set
forth in Sections 3.1(B)(i) and
(ii).
|
|
3.2
|
Grants of Options to
Outside Directors.
|
|
(A)
|
Procedure for
Grants. All grants of Options to Outside Directors under this Plan
shall be automatic and non-discretionary and shall be made strictly in
accordance with the following
provisions:
|
|
(i)
|
No
person shall have any discretion to select which Outside Directors shall
be granted Options or to determine the number of Shares to be covered by
Options granted to Outside
Directors.
|
|
(ii)
|
All
Options granted pursuant to this Section shall be Nonstatutory Stock
Options and, except as otherwise provided herein, shall be subject to the
other terms and conditions of the
Plan.
|
|
(iii)
|
Each
person who first becomes an Outside Director following the effective date
of this Plan shall be automatically granted an option to purchase 12,000
Shares (the “First Option”) on the date on which such person first becomes
an Outside Director, whether through election by the stockholders of the
Company or appointment by the Board to fill a
vacancy.
|
|
(iv)
|
After
the First Option has been granted to an Outside Director, such Outside
Director shall thereafter be automatically granted an Option to purchase
3,000 Shares (a “Subsequent Option”) on the date of the Company’s annual
stockholders’ meeting of each year, provided the Outside Director will
continue to be an Outside Director through the applicable date and, if on
such date, he or she shall have served on the Board for at least the
preceding six (6) months.
|
|
(v)
|
Notwithstanding
the provisions of subsections (iii) and (iv) hereof, in the event that a
grant would cause the number of Shares subject to outstanding Awards plus
the number of Shares previously purchased upon exercise of an Award to
exceed the number of Shares available for issuance under the Plan, then
each such automatic grant shall be for that number of Shares determined by
dividing the total number of Shares remaining available for grant by the
number of Outside Directors on the automatic grant date. Any further
grants shall then be deferred until such time, if any, as additional
Shares become available for grant under the Plan through action of the
stockholders to increase the number of Shares which may be issued under
the Plan or through cancellation or expiration of Options previously
granted hereunder.
|
|
(B)
|
The terms of an Option
granted to an Outside Director shall be as
follows:
|
|
(i)
|
the
term of the Option shall be seven (7)
years;
|
|
(ii)
|
the
Option shall be exercisable only while the Outside Director remains a
Director; provided, however, that for Options granted under this Section
3.2 on or after July 21, 2004, if an Outside Director ceases to be a
Director as a result of the Outside Director’s death, Disability or
Retirement, the Outside Director may exercise his or her Option granted
pursuant to this Section 3.2 within one year of such termination (but in
no event later than the expiration of the term of such Option as set forth
in the Award Agreement) and if on the date of such termination the Outside
Director is not vested as to his or her entire Option, the Shares covered
by the unvested portion of the Option will revert to the
Plan;
|
|
(iii)
|
the
exercise price per Share shall be 100% of the Fair Market Value per Share
on the date of grant of the Option;
and
|
|
(iv)
|
subject
to accelerated vesting upon a merger or Change in Control as specified in
Section 8.4(C), the Option shall vest and become exercisable as to 25% of
the Shares subject to the Option on the first anniversary of the date of
grant of the Option and shall vest and become exercisable as to 6.25% of
the Shares subject to the Option at the end of each three-month period
thereafter, if on such dates Participant has remained in continuous status
as a Director.
|
|
(C)
|
The
Plan shall not confer upon any Outside Director any right with respect to
continuation of service as a Director or nomination to serve as a
Director, nor shall it interfere in any way with any rights which the
Director or the Company may have to terminate his or her directorship at
any time.
|
|
3.3
|
Term of
Option. The term of each Option shall be seven (7) years
from the date of grant or such shorter term as may be provided in the
Award Agreement. Moreover, in the case of an Incentive Stock
Option granted to a Participant who, at the time the Option is granted,
owns stock representing more than ten percent (10%) of the total combined
voting power of all classes of stock of the Company or any Parent or
Subsidiary, the term of the Incentive Stock Option shall be five (5) years
from the date of grant or such shorter term as may be provided in the
Award Agreement.
|
|
3.4
|
Option Exercise Price
and Consideration.
|
|
(A)
|
Exercise
Price. The per Share exercise price for the Shares to be
issued pursuant to exercise of an Option shall be determined by the
Administrator, subject to the
following:
|
|
(i)
|
In
the case of an Incentive Stock
Option
|
|
(1)
|
granted
to an Employee who, at the time the Incentive Stock Option is granted,
owns stock representing more than ten percent (10%) of the voting power of
all classes of stock of the Company or any Parent or Subsidiary, the per
Share exercise price shall be no less than 110% of the Fair Market Value
per Share on the date of grant.
|
|
(2)
|
granted
to any Employee other than an Employee described in Section 3.4(A)(i)(1),
the per Share exercise price shall be no less than 100% of the Fair Market
Value per Share on the date of
grant.
|
|
(ii)
|
In
the case of a Nonstatutory Stock Option, the per Share exercise price
shall be no less than 100% of the Fair Market Value per Share on the date
of grant.
|
|
3.5
|
Waiting Period and
Exercise Dates. At the time an Option is granted, the
Administrator shall fix the period within which the Option may be
exercised and shall determine any conditions that must be satisfied
before the Option may be exercised.
|
|
3.6
|
Form of
Consideration. The Administrator shall determine the
acceptable form of consideration for exercising an Option, including the
method of payment. In the case of an Incentive Stock Option,
the Administrator shall determine the acceptable form of consideration at
the time of grant. Such consideration may consist, subject to
Applicable Laws, entirely of:
|
|
(A)
|
cash;
|
|
(B)
|
check;
|
|
(C)
|
other
Shares, including reservation by the Company of Shares issuable to the
Participant upon exercise of an Option, which have a Fair Market Value on
the date of surrender or reservation equal to the aggregate exercise price
of the Shares as to which such Option shall be
exercised;
|
|
(D)
|
consideration
received by the Company under a cashless exercise program implemented by
the Company in connection with the
Plan;
|
|
(E)
|
a
reduction in the amount of any Company liability to the Participant,
including any liability attributable to the Participant’s participation in
any Company sponsored deferred compensation program or
arrangement;
|
|
(F)
|
any
combination of the foregoing methods of payment;
or
|
|
(G)
|
such
other consideration and method of payment for the issuance of Shares to
the extent permitted by Applicable Laws; provided, however, that the
issuance of a promissory note will not be a permissible form of
consideration under the Plan.
|
|
3.7
|
Exercise of
Option.
|
|
(A)
|
Procedure for
Exercise; Rights as a Stockholder. Any Option granted
hereunder shall be exercisable according to the terms of the Plan and at
such times and under such conditions as determined by the Administrator
and set forth in the Award Agreement. An Option may not be
exercised for a fraction of a
Share.
|
|
(i)
|
An
Option shall be deemed exercised when the Company receives: (x) written or
electronic notice of exercise (in accordance with the Award Agreement)
from the person entitled to exercise the Option, and (y) full payment for
the Shares with respect to which the Option is exercised (together with
applicable withholding taxes). Full payment may consist of any
consideration and method of payment authorized by the Administrator and
permitted by the Award Agreement and the Plan. Shares issued
upon exercise of an Option shall be issued in the name of the Participant
or, if requested by the Participant, in the name of the Participant and
his or her spouse. Until the Shares are issued (as evidenced by
the appropriate entry on the books of the Company or of a duly authorized
transfer agent of the Company), no right to vote or receive dividends or
any other rights as a stockholder shall exist with respect to the Optioned
Stock, notwithstanding the exercise of the Option. The Company
shall issue (or cause to be issued) such Shares promptly after the Option
is exercised. No adjustment will be made for a dividend or
other right for which the record date is prior to the date the Shares are
issued, except as provided in Section
8.4.
|
|
(ii)
|
Exercising
an Option in any manner shall decrease the number of Shares thereafter
available, both for purposes of the Plan and for sale under the Option, by
the number of Shares as to which the Option is
exercised.
|
|
(B)
|
Termination of
Relationship as a Service Provider. If a Participant
ceases to be a Service Provider, other than upon the Participant’s death
or Disability, the Participant may exercise his or her Option within such
period of time as is specified in the Award Agreement to the extent that
the Option is vested on the date of termination (but in no event later
than the expiration of the term of such Option as set forth in the Award
Agreement). In the absence of a specified time in the Award
Agreement, the Option shall remain exercisable for three (3) months
following the Participant’s termination. If, on the date of
termination, the Participant is not vested as to his or her entire Option,
the Shares covered by the unvested portion of the Option shall revert to
the Plan. If, after termination, the Participant does not
exercise his or her Option within the time specified by the Administrator,
the Option shall terminate, and the Shares covered by such Option shall
revert to the Plan.
|
|
(C)
|
Disability of
Participant. If a Participant ceases to be a Service
Provider as a result of the Participant’s Disability, the Participant may
exercise his or her Option within such period of time as is specified in
the Award Agreement (of at least six (6) months) to the extent the Option
is vested on the date of termination (but in no event later than the
expiration of the term of such Option as set forth in the Award
Agreement). In the absence of a specified time in the Award
Agreement, the Option shall remain exercisable for twelve (12) months
following the Participant’s termination. If, on the date of
termination, the Participant is not vested as to his or her entire
Option, the Shares covered by the unvested portion of the Option shall
revert to the Plan. If, after termination, the Participant does
not exercise his or her Option within the time specified herein, the
Option shall terminate, and the Shares covered by such Option shall revert
to the Plan.
|
|
(D)
|
Death of
Participant. If a Participant dies while a Service
Provider, the Option may be exercised following the Participant’s death
within such period of time as is specified in the Award Agreement to the
extent that the Option is vested on the date of death (but in no event may
the option be exercised later than the expiration of the term of such
Option as set forth in the Award Agreement), by the Participant’s
designated beneficiary, provided such beneficiary has been designated
prior to the Participant’s death in a form acceptable to the
Administrator. If no such beneficiary has been designated by
the Participant, then such Option may be exercised by the personal
representative of the Participant’s estate or by the person(s) to whom the
Option is transferred pursuant to the Participant’s will or in accordance
with the laws of descent and distribution. In the absence of a
specified time in the Award Agreement, the Option shall remain exercisable
for twelve (12) months following the Participant’s death. If,
at the time of death, a Participant is not vested as to his or her entire
Option, the Shares covered by the unvested portion of the Option shall
immediately revert to the Plan. If the Option is not so
exercised within the time specified herein, the Option shall terminate,
and the Shares covered by such Option shall revert to the
Plan.
|
|
(E)
|
Retirement of
Participant. If a Participant ceases to be a Service
Provider as a result of his or her Retirement, the Participant may
exercise his or her Option within such period of time as is specified in
the Award Agreement, to the extent the Option is vested on the date of
Retirement (but in no event later than the expiration of the term of such
Option as set forth in the Option Agreement). In the absence of
a specified time in the Award Agreement, for Options granted on or after
July 21, 2004, the Option shall remain exercisable for twelve (12) months
following the Participant’s termination. If, on the date of
Retirement, the Participant is not vested as to his or her entire Option,
the Shares covered by the unvested portion of the Option shall revert to
the Plan. If, after his or her Retirement, the Participant does
not exercise his or her Option within the time specified herein, the
Option shall terminate, and the Shares covered by such Option shall revert
to the Plan.
|
SECTION
4.
|
RESTRICTED
STOCK AWARDS
|
|
4.1
|
Restricted Stock
Awards. Restricted Stock Awards may be issued either alone, in
addition to, or in tandem with other Awards granted under the Plan and/or
cash awards made outside of the Plan. After the Administrator
determines that it will offer Restricted Stock Awards under the Plan, it
shall advise the offeree in writing or electronically, by means of a
Notice of Grant, of the terms, conditions and restrictions related to the
offer, including the number of Shares that the offeree shall be entitled
to purchase, the price to be paid, and the time within which the offeree
must accept such offer. The offer shall be accepted by
execution of a Restricted Stock Award Agreement in the form determined by
the Administrator.
|
|
4.2
|
Term of Restricted
Stock Awards. The term of each Restricted Stock Award
shall be stated in the Restricted Stock Award Agreement. Shares
of Common Stock issued pursuant to a Restricted Stock Award may, in the
discretion of the Administrator, vest over the Participant’s period of
service or upon attainment of specified performance
objectives. Notwithstanding the foregoing, subject to Section
8.4(C), a Restricted Stock Award may not vest at a rate faster than one
year following the date of grant. If a Restricted Stock Award
is not
subject to achievement of performance goals then, subject to Section
8.4(C), such Award willfully vest over a period of at least three (3)
years from the date of grant.
|
|
4.3
|
Limitation on
Restricted Stock Award Grants. No Participant shall
receive Restricted Stock Awards in any Fiscal Year of the Company having
an aggregate initial value greater than
$1,000,000.
|
|
4.4
|
Repurchase
Option. Unless the Administrator determines otherwise,
the Restricted Stock Award Agreement shall grant the Company a right of
forfeiture or repurchase option exercisable upon the voluntary or
involuntary termination of the Participant’s service with the Company for
any reason (including death or Disability). The forfeiture
right or repurchase option shall lapse as the Restricted Stock Award
vests.
|
|
4.5
|
Other
Provisions. The Restricted Stock Award Agreement shall
contain such other terms, provisions and conditions not inconsistent with
the Plan as may be determined by the Administrator in its sole
discretion.
|
|
4.6
|
Rights as a
Stockholder. Once the Restricted Stock Award is
exercised, the Participant shall have the rights equivalent to those of a
stockholder, and shall be a stockholder when his or her purchase is
entered upon the records of the duly authorized transfer agent of the
Company. No adjustment will be made for a dividend or other
right for which the record date is prior to the date the Restricted Stock
Award is exercised, except as provided in Section
8.4.
|
|
4.7
|
Cancellation of
Restricted Stock Award. On the date set forth in the
Restricted Stock Award Agreement, all unearned or unvested Restricted
Stock shall be forfeited to the
Company.
|
|
4.8
|
Restricted Stock
Awards for Outside Directors. At each regularly
scheduled Annual Meeting of Stockholders of the Company, Outside Directors
who have continuously served in such capacity since the date six months
preceding the date of the Annual Meeting shall receive a grant of 2,000
shares of Restricted Stock (or to the extent determined by the
Administrator, Restricted Stock Units). The vesting of the
Restricted Stock Awards granted hereunder may not occur at a rate faster
than one year following the date of grant. If a Restricted
Stock Award is not subject to achievement of performance goals, then
subject to 8.4(C), such award will fully vest over a period of at least
three (3) years from the date of
grant.
|
SECTION
5.
|
STOCK
APPRECIATION RIGHTS
|
|
5.1
|
Stock Appreciation
Rights.
|
|
(A)
|
Grant of SARs.
Subject to the terms and conditions of the Plan, a SAR may be granted to
Service Providers at any time and from time to time as will be determined
by the Administrator, in its sole
discretion.
|
|
(B)
|
Number of
Shares. The Administrator will have complete discretion to
determine the number of SARs granted to any Service Provider, provided
that during any Fiscal Year, no Participant will be granted SARs covering
more than 500,000 Shares. Notwithstanding the foregoing limitation, in
connection with a Participant’s initial service as an Employee, an
Employee may be granted SARs covering up to an additional 500,000
Shares.
|
|
(C)
|
Exercise Price and
Other Terms. The Administrator will have complete discretion to
determine the terms and conditions of SARs granted under the Plan, subject
to the provisions of the Plan and the following
limitations:
|
|
(i)
|
the
term of an SAR may not exceed seven (7) years from the date of
grant;
|
|
(ii)
|
the
exercise price of an SAR must be at least 100% of the Fair Market Value
per Share on the date of grant; and
|
|
(iii)
|
the
maximum payment any Participant may be entitled to receive pursuant to
subsection (F) below shall not exceed 100% of the exercise price of the
underlying SAR.
|
|
(D)
|
SAR Agreement.
Each SAR grant will be evidenced by an Award Agreement that will specify
the exercise price, the term of the SAR, the conditions of exercise, and
such other terms and conditions as the Administrator, in its sole
discretion, will determine.
|
|
(E)
|
Expiration of
SARs. An SAR granted under the Plan will expire upon the date
determined by the Administrator, in its sole discretion, and set forth in
the Award Agreement; provided, that, the term of the SAR shall not exceed
seven (7) years. Notwithstanding the foregoing, the rules of Sections
3.7(B), (C), and (D) also will apply to
SARs.
|
|
(F)
|
Payment of SAR
Amount. Subject to the limitation set out in Section 5.1 (C)(iii)
above, upon the exercise of an SAR, a Participant will be entitled to
receive payment from the Company in an amount determined by
multiplying:
|
|
(i)
|
The
difference between the Fair Market Value of a Share on the date of
exercise over the exercise price;
times
|
|
(ii)
|
The
number of Shares with respect to which the SAR is
exercised.
|
SECTION
6.
|
RESTRICTED
STOCK UNITS
|
|
6.1
|
Grant of Restricted
Stock Units. Restricted Stock Units may be granted to Service
Providers at any time and from time to time, as will be determined by the
Administrator, in its sole discretion. The Administrator will have
complete discretion in determining the number of Restricted Stock Units
granted to each Participant, provided that during any Fiscal Year no
Participant will receive Restricted Stock Units having an initial value
greater than $1,000,000.
|
|
6.2
|
Value of Restricted
Stock. Each Restricted Stock Unit will have an initial value that
is established by the Administrator on or before the date of
grant.
|
|
6.3
|
Vesting. Subject
to Section 8.4(C), a Restricted Stock Unit may not vest at a rate faster
than one year following the date of grant. If a Restricted
Stock Unit is not subject to achievement of performance goals then,
subject to Section 8.4(C), such award willfully vest over a period of at
least three (3) years from the date of
grant
|
|
6.4
|
Performance Objectives
and Other Terms. The Administrator will set performance objectives
(including, without limitation, continued service) in its discretion
which, depending on the extent to which they are met, will determine the
number or value of Restricted Stock Units that will be paid out to the
Participants. Each Award of Restricted Stock Units will be
evidenced by an Award Agreement that will specify the Performance Period,
and such other terms and conditions as the Administrator, in its sole
discretion, will determine.
|
|
6.5
|
Earning of Restricted
Stock Units. After the applicable Performance Period has ended, the
holder of Restricted Stock Units will be entitled to receive a payout of
the number of Restricted Stock Units earned by the Participant over the
Performance Period, to be determined as a function of the extent to which
the corresponding performance objectives or other vesting provisions have
been achieved. After the grant of a Restricted Stock Unit, the
Administrator, in its sole discretion, may reduce or waive any performance
objectives or other vesting provisions for such Restricted Stock
Unit.
|
|
6.6
|
Form and Timing of
Payment of Restricted Stock Units. Payment of earned Restricted
Stock Units will be made as soon as practicable after the expiration of
the applicable Performance Period. The Administrator, in its sole
discretion, may pay earned Restricted Stock Units in the form of cash, in
Shares (which have an aggregate Fair Market Value equal to the value of
the earned Restricted Stock Units at the close of the applicable
Performance Period) or in a combination
thereof.
|
|
6.7
|
Cancellation of
Restricted Stock Units. On the date set forth in the Award
Agreement, all unearned or unvested Restricted Stock Units will be
forfeited to the Company, and again will be available for grant under the
Plan.
|
SECTION
7.
|
PERFORMANCE
GOALS
|
|
Performance
Goals. The granting and/or vesting of Restricted Stock
Awards or Restricted Stock Units may be made subject to the attainment of
performance goals relating to one or more business criteria within the
meaning of Section 162(m) of the Code and may provide for a targeted level
or levels of achievement (“Performance
Goals”) including one or more of the following measures: (a) Annual
Revenue, (b) Cash Position, (c) Earnings Per Share, (d) Individual
Performance Objectives (e) Net Income, (f) Operating Cash Flow, (g)
Operating Income, (h) Return on Assets, (i) Return on Equity, (j) Return
on Sales, and (k) Total Stockholder Return. Any Performance
Goals may be used to measure the performance of the Company as a whole or
a business unit of the Company and may be measured relative to a peer
group or index. The Performance Goals may differ from
Participant to Participant and from Award to Award. Any
criteria used may be (i) measured in absolute terms, (ii) compared to
another company or companies, (iii) measured against the performance of
the Company as a whole or a segment of the Company and/or (iv) measured on
a pre-tax or post-tax basis (if applicable). Prior to the
Determination Date, the Administrator will determine whether any
significant element(s) will be included in or excluded from the
calculation of any Performance Goal with respect to any
Participant.
|
SECTION
8.
|
GENERAL
PROVISIONS
|
|
8.1
|
Term of
Plan. Subject to Section 8.11, the Plan shall become
effective on September 24, 2003. It shall continue in effect
for a term of ten (10) years unless terminated earlier under Section
8.6.
|
|
8.2
|
Transferability of
Awards. Unless determined otherwise by the
Administrator, an Award may not be sold, pledged, assigned, hypothecated,
transferred, or disposed of in any manner other than by will or by the
laws of descent or distribution and may be exercised, during the lifetime
of the Participant, only by the Participant. If the
Administrator, in its sole discretion, makes an Award transferable, such
Award may only be transferred (i) by will, (ii) by the laws of descent and
distribution, or (iii) to family members (as such term is defined in the
general instructions to Form S-8 under the Securities Act of 1933, or any
successor thereto) through gifts or domestic relations orders, as
permitted by the instructions to Form S-8 of the Securities Act of
1933.
|
|
8.3
|
Leaves of
Absence. Unless the Administrator provides otherwise, vesting of
Awards granted hereunder will not be suspended during any unpaid leave of
absence. A Service Provider will not cease to be an Employee in the case
of (i) any leave of absence approved by the Company or (ii) transfers
between locations of the Company or between the Company, its Parent, or
any Subsidiary. For purposes of Incentive Stock Options, no
such leave may exceed ninety (90) days, unless reemployment upon
expiration of such leave is guaranteed by statute or contract. If
reemployment upon expiration of a leave of absence approved by the Company
is not so guaranteed, then three (3) months following the 91st day of such
leave any Incentive Stock Option held by the Participant will cease to be
treated as an Incentive Stock Option and will be treated for tax purposes
as a Nonstatutory Stock Option.
|
|
8.4
|
Adjustments Upon
Changes in Capitalization, Merger or Change in
Control.
|
|
(A)
|
Changes in
Capitalization. Subject to any required action by the
stockholders of the Company, the number of Shares that have been
authorized for issuance under the Plan but as to which no Awards have yet
been granted or which have been returned to the Plan upon cancellation or
expiration of an Award, and the number of Shares as well as the price per
Share covered by each outstanding Award, and the numerical Share limits in
Sections 2, 3, 4, 5, and 6, shall be proportionately adjusted for any
change in, or increase or decrease in the number of issued Shares,
resulting from a stock split, reverse stock split, stock dividend,
combination or reclassification of the Common Stock, or any other change,
or increase or decrease in the number of issued Shares, effected without
receipt of consideration by the Company; provided, however, that
conversion of any convertible securities of the Company shall not be
deemed to have been “effected without receipt of
consideration.” The Board shall make such adjustment, whose
determination in that respect shall be final, binding and
conclusive. Except as expressly provided herein, no issuance by
the Company of shares of stock of any class, or securities convertible
into shares of stock of any class, shall affect, and no adjustment by
reason thereof shall be made with respect to, the number or price of
Shares subject to an Award.
|
|
(B)
|
Dissolution or
Liquidation. In the event of the proposed dissolution or
liquidation of the Company, the Administrator shall notify each
Participant as soon as practicable prior to the effective date of such
proposed transaction. The Administrator in its discretion may
provide for the Participant to have the right to exercise his or her Award
prior to such transaction as to all of the Shares covered thereby,
including Shares as to which the Award would not otherwise be
exercisable. In addition, the Administrator may provide that
any Company repurchase option applicable to any Shares purchased upon
exercise of an Award shall lapse as to all such Shares, provided the
proposed dissolution or liquidation takes place at the time and in the
manner contemplated. To the extent it has not been previously
exercised, or earned, an Award will terminate immediately prior to the
consummation of such proposed
action.
|
|
(C)
|
Merger or Change in
Control.
|
|
(i)
|
Awards. In
the event of a merger of the Company with or into another corporation, or
a Change in Control, each outstanding Award shall be assumed or an
equivalent award substituted by the successor corporation or a Parent or
Subsidiary of the successor
corporation.
|
|
(1)
|
In
the event that the successor corporation refuses to assume or substitute
for the Award, the Participant shall fully vest in and have the right to
exercise his or her Option, Restricted Stock Award, or Stock Appreciation
Right as to all of the Shares, including Shares as to which it would not
otherwise be vested or exercisable, and all restrictions on Restricted
Stock will lapse and all performance goals or other vesting criteria with
respect to Restricted Stock Units will be deemed achieved at target levels
and all other terms and conditions met. In addition, if an
Option, Restricted Stock Award, or Stock Appreciation Right becomes fully
vested and exercisable in lieu of assumption or substitution in the event
of a merger or Change in Control, the Administrator shall notify the
Participant in writing or electronically that the Option, Restricted Stock
Award, or Stock Appreciation Right shall be fully vested and exercisable
for a period of not less than fifteen (15) days from the date of such
notice, and the Option, Restricted Stock Award, or Stock Appreciation
Right shall terminate upon the expiration of such
period.
|
|
(2)
|
For
the purposes of this Section 8.4(C)(i), an Award shall be considered
assumed if, following the merger or Change in Control, the Award confers
the right to purchase or receive, for each Share subject to the Award
immediately prior to the merger or Change in Control (and in the case of
Restricted Stock Units, for each implied Share determined by dividing the
value of the Restricted Stock Unit by the per Share consideration received
by holders of Common Stock in the merger or Change in Control), an amount
of consideration (whether stock, cash, or other securities or property)
equal to the fair market value of the consideration received in the merger
or Change in Control by holders of Common Stock for each Share held on the
effective date of the transaction (and if holders were offered a choice of
consideration, the type of consideration chosen by the holders of a
majority of the outstanding Shares); provided, however, that if such
consideration received in the merger or Change in Control is not solely
common stock of the successor corporation or its Parent, the Administrator
may, with the consent of the successor corporation, provide for the
consideration to be received upon the exercise of the Option, Restricted
Stock Award, or Stock Appreciation Right, for each Share subject to such
Award (or in the case of Restricted Stock Units, the number of implied
shares determined by dividing the value of the Restricted Stock Units by
the per Share consideration received by holders of Common Stock in the
merger or Change in Control), to be solely common stock of the successor
corporation or its Parent equal in fair market value to the per Share
consideration received by holders of Common Stock in the merger or Change
in Control.
|
|
(3)
|
Notwithstanding
anything in Section 8.4(C)(i)(2) to the contrary, an Award that vests, is
earned or paid-out upon the satisfaction of one or more performance goals
will not be considered assumed if the Company or its successor modifies
any of such performance goals without the Participant’s consent; provided,
however, a modification to such performance goals only to reflect the
successor corporation’s post-merger or post-asset sale corporate structure
will not be deemed to invalidate an otherwise valid Award
assumption.
|
|
(D)
|
Outside Director
Option and Restricted Stock Grants. Notwithstanding
anything in Section 8.4(C)(i) to the contrary, in the event of a merger of
the Company with or into another corporation, or a Change in Control, in
which an Outside Director is terminated or asked to resign, Options
granted to such Outside Director under Section 3.2, and Restricted Stock
Awards granted to such Outside Director under Section 4.8, shall vest 100%
immediately prior to such merger or Change in Control. In the
event of a merger or Change in Control in which an Outside Director is not
terminated or asked to resign, such Outside Director’s Options granted
under Section 3.2 and Restricted Stock Awards granted under Section 4.8
shall be treated under the terms of Section
8.4(C)(i).
|
|
8.5
|
Date of
Grant. The date of grant of an Award shall be, for all
purposes, the date on which the Administrator makes the determination
granting such Award or such other later date as is determined by the
Administrator. Notice of the determination shall be provided to
each Participant within a reasonable time after the date of such
grant.
|
|
8.6
|
Amendment and
Termination of the Plan.
|
|
(A)
|
Amendment and
Termination. The Board may at any time amend, alter,
suspend or terminate the Plan.
|
|
(B)
|
Stockholder
Approval. The Company shall obtain stockholder approval
of any Plan amendment to the extent necessary and desirable to comply with
Applicable Laws. Additionally, notwithstanding anything in the
Plan to the contrary, the Board may not, without the approval of the
Company’s stockholders:
|
|
(i)
|
materially
increase the number of shares of Common Stock issuable under the Plan,
except for permissible adjustments in the event of certain changes in the
Company’s capitalization as set forth in Section
8.4(A);
|
|
(ii)
|
materially
modify the requirements for eligibility to participate in the Plan,
or
|
|
(iii)
|
reprice
Options issued under the Plan by lowering the exercise price of a
previously granted Award, by canceling outstanding Options and issuing
replacements, or by otherwise replacing existing Options with substitute
Options with a lower exercise
price.
|
|
(C)
|
Effect of Amendment or
Termination. No amendment, alteration, suspension or
termination of the Plan shall impair the rights of any Participant, unless
mutually agreed otherwise between the Participant and the Administrator,
which agreement must be in writing and signed by the Participant and the
Company. Termination of the Plan shall not affect the
Administrator’s ability to exercise the powers granted to it hereunder
with respect to Awards granted under the Plan prior to the date of such
termination.
|
|
8.7
|
Conditions Upon
Issuance of Shares.
|
|
(A)
|
Legal
Compliance. Shares shall not be issued pursuant to the
exercise of an Award unless the exercise of such Award and the issuance
and delivery of such Shares shall comply with Applicable Laws and shall be
further subject to the approval of counsel for the Company with respect to
such compliance.
|
|
(B)
|
Investment
Representations. As a condition to the exercise of an
Award, the Company may require the person exercising such Award to
represent and warrant at the time of any such exercise that the Shares are
being purchased only for investment and without any present intention to
sell or distribute such Shares if, in the opinion of counsel for the
Company, such a representation is
required.
|
|
8.8
|
Inability to Obtain
Authority. The inability of the Company to obtain
authority from any regulatory body having jurisdiction, which authority is
deemed by the Company’s counsel to be necessary to the lawful issuance and
sale of any Shares hereunder, shall relieve the Company of any liability
in respect of the failure to issue or sell such Shares as to which such
requisite authority shall not have been
obtained.
|
|
8.9
|
Reservation of
Shares. The Company, during the term of this Plan, will
at all times reserve and keep available such number of Shares as shall be
sufficient to satisfy the requirements of the
Plan.
|
|
8.10
|
Participant’s
Relationship with Company. Neither the Plan nor any
Award shall confer upon the Participant any right with respect to
continuing the Participant’s relationship as a Service Provider with the
Company, nor shall they interfere in any way with the Participant’s right
or the Company’s right to terminate such relationship at any time, with or
without cause.
|
|
8.11
|
Stockholder
Approval. The Plan shall be subject to approval by the
stockholders of the Company within twelve (12) months after the date the
Plan is adopted. Such stockholder approval shall be obtained in
the manner and to the degree required under Applicable
Laws.
|