2000 Stock Incentive Plan - WebEx Communications Inc.
WEBEX COMMUNICATIONS, INC.
2000 STOCK INCENTIVE PLAN
(Adopted by the Board on March 29, 2000)
(Amended by the Board on October 24, 2003)
TABLE OF CONTENTS
-----------------
Page
----
SECTION 1. ESTABLISHMENT AND PURPOSE. 1
SECTION 2. DEFINITIONS. 1
(a) "Affiliate" 1
(b) "Award" 1
(c) "Board of Directors" 1
(d) "Change in Control" 1
(e) "Code" 2
(f) "Committee" 2
(g) "Company" 2
(h) "Consultant" 2
(i) "Employee" 3
(j) "Exchange Act" 3
(k) "Exercise Price" 3
(l) "Fair Market Value" 3
(m) "ISO" 3
(n) "Nonstatutory Option" or "NSO" 3
(o) "Offeree" 3
(p) "Option" 3
(q) "Optionee" 3
(r) "Outside Director" 3
(s) "Parent" 3
(t) "Participant" 4
(u) "Plan" 4
(v) "Purchase Price" 4
(w) "Restricted Share" 4
(x) "Restricted Share Agreement" 4
(y) "SAR" 4
(z) "SAR Agreement" 4
(aa) "Service" 4
(bb) "Share" 4
(cc) "Stock" 4
(dd) "Stock Option Agreement" 4
(ee) "Stock Purchase Agreement" 4
(ff) "Stock Unit" 4
(gg) "Stock Unit Agreement" 4
(hh) "Subsidiary" 4
(ii) "Total and Permanent Disability" 5
SECTION 3. ADMINISTRATION. 5
(a) Committee Composition 5
(b) Committee for Non-Officer Grants 5
(c) Committee Procedures 5
(d) Committee Responsibilities 5
SECTION 4. ELIGIBILITY. 7
(a) General Rule. 7
(b) Outside Directors. 7
(b) Limitation On Grants 8
(c) Ten-Percent Stockholders 8
(d) Attribution Rules 8
(e) Outstanding Stock 8
SECTION 5. STOCK SUBJECT TO PLAN. 8
(a) Basic Limitation 8
(b) Annual Increase in Shares 8
(c) Additional Shares 9
(d) Dividend Equivalents 9
SECTION 6. RESTRICTED SHARES 9
(a) Restricted Stock Agreement 9
(b) Payment for Awards 9
(c) Vesting 9
(d) Voting and Dividend Rights 10
SECTION 7. OTHER TERMS AND CONDITIONS OF AWARDS OR SALES. 10
(a) Duration of Offers and Nontransferability of Rights 10
(b) Purchase Price 10
(c) Withholding Taxes 10
(d) Restrictions on Transfer of Shares 10
SECTION 8. TERMS AND CONDITIONS OF OPTIONS. 10
(a) Stock Option Agreement 10
(b) Number of Shares 11
(c) Exercise Price 11
(d) Withholding Taxes 11
(e) Exercisability and Term 11
(f) Nontransferability 11
(g) Exercise of Options Upon Termination of Service 11
(h) Effect of Change in Control 12
(i) Leaves of Absence 12
(j) No Rights as a Stockholder 12
(k) Modification, Extension and Renewal of Options 12
(l) Restrictions on Transfer of Shares 12
(m) Buyout Provisions 13
SECTION 9. PAYMENT FOR SHARES. 13
(a) General Rule 13
(b) Surrender of Stock 13
(c) Services Rendered 13
(d) Cashless Exercise 13
(e) Exercise/Pledge 13
(f) Promissory Note 13
(g) Other Forms of Payment 13
SECTION 10. STOCK APPRECIATION RIGHTS. 14
(a) SAR Agreement 14
(b) Number of Shares 14
(c) Exercise Price 14
(d) Exercisability and Term 14
(e) Effect of Change in Control 14
(f) Exercise of SARs 14
(i) Modification or Assumption of SARs 15
SECTION 11. STOCK UNITS. 15
(a) Stock Unit Agreement 15
(b) Payment for Awards 15
(c) Vesting Conditions 15
(d) Voting and Dividend Rights 16
(e) Form and Time of Settlement of Stock Units 16
(f) Death of Recipient 16
(g) Creditors' Rights 16
SECTION 12. ADJUSTMENT OF SHARES. 16
(a) Adjustments 16
(b) Dissolution or Liquidation 17
(c) Reorganizations 17
(d) Reservation of Rights 17
SECTION 13. DEFERRAL OF AWARDS. 18
SECTION 14. AWARDS UNDER OTHER PLANS. 18
SECTION 15. PAYMENT OF DIRECTOR'S FEES IN SECURITIES. 18
(a) Effective Date 18
(b) Elections to Receive NSOs, Restricted Shares or Stock Units 19
(c) Number and Terms of NSOs, Restricted Shares or Stock Units 19
SECTION 16. LEGAL AND REGULATORY REQUIREMENTS. 19
SECTION 17. WITHHOLDING TAXES. 19
(a) General 19
(b) Share Withholding 19
SECTION 18. LIMITATION ON PARACHUTE PAYMENTS. 19
(a) Scope of Limitation 19
(b) Basic Rule 19
(c) Reduction of Payments 20
(d) Overpayments and Underpayments 20
(e) Related Corporations 20
SECTION 19. NO EMPLOYMENT RIGHTS. 21
SECTION 20. DURATION AND AMENDMENTS. 21
(a) Term of the Plan 21
(b) Right to Amend or Terminate the Plan 21
(c) Effect of Amendment or Termination 21
SECTION 21. EXECUTION. 21
WEBEX COMMUNICATIONS, INC.
--------------------------
2000 STOCK INCENTIVE PLAN
-------------------------
(Adopted by the Board on March 29, 2000)
SECTION 1. ESTABLISHMENT AND PURPOSE.
The Plan was adopted by the Board of Directors effective March 29, 2000. The
purpose of the Plan is to promote the long-term success of the Company and
the creation of stockholder value by (a) encouraging Employees, Outside
Directors and Consultants to focus on critical long-range objectives, (b)
encouraging the attraction and retention of Employees, Outside Directors and
Consultants with exceptional qualifications and (c) linking Employees,
Outside Directors and Consultants directly to stockholder interests through
increased stock ownership. The Plan seeks to achieve this purpose by
providing for Awards in the form of Restricted Shares, Stock Units, Options
(which may constitute incentive stock options or nonstatutory stock options)
or stock appreciation rights.
SECTION 2. DEFINITIONS.
(a) "Affiliate" shall mean any entity other than a Subsidiary, if the
Company and/or one of more Subsidiaries own not less than fifty percent (50%)
of such entity.
(b) "Award" shall mean any award of an Option, a SAR, a Restricted Share or
a Stock Unit under the Plan.
(c) "Board of Directors" shall mean the Board of Directors of the Company,
as constituted from time to time.
(d) "Change in Control" shall mean the occurrence of either of the
following events:
(i) A change in the composition of the Board of Directors, as a result of
which fewer than two-thirds of the incumbent directors are directors who
either:
(A) Had been directors of the Company on the "look-back" date" (as
defined
below) (the "original directors"); or
(B) Were elected, or nominated for election, to the Board of Directors
with
the affirmative votes of at least a majority of the aggregate of the original
directors who were still in office at the time of the election or nomination
and the directors whose election or nomination was previously so approved
(the "continuing directors"); or
(ii) Any "person" (as such term is used in Sections 13(d) and 14(d) of the
Exchange Act) who by the acquisition or aggregation of securities, is or
becomes the beneficial owner (as defined in Rule 13d-3 under the Exchange
Act), directly or indirectly, of securities of the Company representing fifty
percent (50%) or more of the combined voting power of the Company's then out-
standing securities ordinarily (and apart from rights accruing under special
circumstances) having the right to vote at elections of directors (the "Base
Capital Stock"); except that any change in the relative beneficial ownership
of the Company's securities by any person resulting solely from a reduction
in the aggregate number of outstanding shares of Base Capital Stock, and any
decrease thereafter in such person's ownership of securities, shall be
disregarded until such person increases in any manner, directly or
indirectly, such person's beneficial ownership of any securities of the
Company. For purposes of this Subsection (d)(ii), the term "person" shall
exclude a trustee or other fiduciary holding securities under an employee
benefit plan maintained by the Company or a Parent or Subsidiary; or
(iii) The consummation of a merger or consolidation of the Corporation
with or into another entity or any other corporate reorganization, if persons
who were not stockholders of the Company immediately prior to such merger,
consolidation or other reorganization own immediately after such merger,
consolidation or other reorganization 50% or more of the voting power of the
outstanding securities of each of (A) the continuing or surviving entity and
(B) any direct or indirect parent corporation of such continuing or surviving
entity; or
(iv) The sale, transfer or other disposition of all or substantially all of
the Company's assets.
For purposes of subsection (d)(i) above, the term "look-back" date shall mean
the later of (1) March 29, 2000 or (2) the date 24 months prior to the date
of the event that may constitute a Change in Control.
A transaction shall not constitute a Change in Control if its sole purpose is
to change the state of the Company's incorporation or to create a holding
company that will be owned in substantially the same proportions by the
persons who held the Company's securities immediately before such
transaction.
(e) "Code" shall mean the Internal Revenue Code of 1986, as amended.
(f) "Committee" shall mean the committee designated by the Board of
Directors, which is authorized to administer the Plan, as described in
Section 3 hereof. The Committee shall have membership composition which
enables the Options or other rights granted under the Plan to qualify for
exemption under Rule 16b-3 with respect to persons who are subject to Section
16 of the Exchange Act.
(g) "Company" shall mean Webex Communications, Inc., a Delaware
corporation.
(h) "Consultant" shall mean a consultant or advisor who provides bona fide
services to the Company, a Parent, a Subsidiary or an Affiliate as an
independent contractor. Service as a Consultant shall be considered
employment for all purposes of the Plan, except as provided in the second
sentence of Section 4(a) and Section 4(b).
(i) "Employee" shall mean (i) any individual who is a common-law employee
of the Company or of a Subsidiary; (ii) a member of the Board of Directors,
including (without limitation) an Outside Director, or an affiliate of a
member the Board of Directors; (iii) a member of the board of directors of a
Subsidiary; or (iv) an independent contractor or advisor who performs
services for the Company or a Subsidiary. Service as a member of the Board
of Directors, a member of the board of directors of a Subsidiary or as an
independent contractor or advisor shall be considered employment for all
purposes of the Plan except the second sentence of Section 4(a) and Section
4(b).
(j) "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
(k) "Exercise Price" shall mean, in the case of an Option, the amount for
which one Common Share may be purchased upon exercise of such Option, as
specified in the applicable Stock Option Agreement. "Exercise Price," in the
case of a SAR, shall mean an amount, as specified in the applicable SAR
Agreement, which is subtracted from the Fair Market Value of one Common Share
in determining the amount payable upon exercise of such SAR.
(l) "Fair Market Value" shall mean (i) the closing price of a Share on the
principal exchange which the Shares are trading, on the date on which the
Fair Market Value is determined (if Fair Market Value is determined on a date
which the principal exchange is closed, Fair Market Value shall be determined
on the last immediately preceding trading day), or (ii) if the Shares are not
traded on an exchange but are quoted on the Nasdaq National Market or a
successor quotation system, the closing price on the date on which the Fair
Market Value is determined, or (iii) if the Shares are not traded on an
exchange or quoted on the Nasdaq National Market or a successor quotation
system, the fair market value of a Share, as determined by the Committee in
good faith. Such determination shall be conclusive and binding on all
persons.
(m) "ISO" shall mean an employee incentive stock option described in Code
Section 422.
(n) "Nonstatutory Option" or "NSO" shall mean an employee stock option that
is not an ISO.
(o) "Offeree" shall mean an individual to whom the Committee has offered
the right to acquire Shares under the Plan (other than upon exercise of an
Option).
(p) "Option" shall mean an ISO or Nonstatutory Option granted under the
Plan and entitling the holder to purchase Shares.
(q) "Optionee" shall mean an individual or estate who holds an Option or
SAR.
(r) "Outside Director" shall mean a member of the Board of Directors who is
not a common-law employee of the Company or of a Subsidiary. Service as an
Outside Director shall be considered employment for all purposes of the Plan,
except as provided in the second sentence of Section 4(a).
(s) "Parent" shall mean any corporation (other than the Company) in an
unbroken chain of corporations ending with the Company, if each of the
corporations other than the Company owns stock possessing fifty percent (50%)
or more of the total combined voting power of all classes of stock in one of
the other corporations in such chain. A corporation that attains the status
of a Parent on a date after the adoption of the Plan shall be a parent
commencing as of such date.
(t) "Participant" shall mean an individual or estate who holds an Award.
(u) "Plan" shall mean this 2000 Stock Incentive Plan of WebEx
Communications, Inc., as amended from time to time.
(v) "Purchase Price" shall mean the consideration for which one Share may
be acquired under the Plan (other than upon exercise of an Option), as
specified by the Committee.
(w) "Restricted Share" shall mean a Share awarded under the Plan.
(x) "Restricted Share Agreement " shall mean the agreement between the
Company and the recipient of a Restricted Share which contains the terms,
conditions and restrictions pertaining to such Restricted Shares.
(y) "SAR" shall mean a stock appreciation right granted under the Plan.
(z) "SAR Agreement" shall mean the agreement between the Company and an
Optionee which contains the terms, conditions and restrictions pertaining to
his or her SAR.
(aa) "Service" shall mean service as an Employee.
(bb) "Share" shall mean one share of Stock, as adjusted in accordance with
Section 12 (if applicable).
(cc) "Stock" shall mean the Common Stock of the Company.
(dd) "Stock Option Agreement" shall mean the agreement between the Company
and an Optionee that contains the terms, conditions and restrictions
pertaining to his Option.
(ee) "Stock Purchase Agreement" shall mean the agreement between the Company
and an Offeree who acquires Shares under the Plan that contains the terms,
conditions and restrictions pertaining to the acquisition of such Shares.
(ff) "Stock Unit" shall mean a bookkeeping entry representing the equivalent
of one Share, as awarded under the Plan.
(gg) "Stock Unit Agreement" shall mean the agreement between the Company and
the recipient of a Stock Unit which contains the terms, conditions and
restrictions pertaining to such Stock Unit.
(hh) "Subsidiary" shall mean any corporation, if the Company and/or one or
more other Subsidiaries own not less than fifty percent (50%) of the total
combined voting power of all classes of outstanding stock of such
corporation. A corporation that attains the status of a Subsidiary on a date
after the adoption of the Plan shall be considered a Subsidiary commencing as
of such date.
(ii) "Total and Permanent Disability" shall mean that the Optionee is unable
to engage in any substantial gainful activity by reason of any medically
determinable physical or mental impairment that can be expected to result in
death or that has lasted, or can be expected to last, for a continuous period
of not less than twelve (12) months.
SECTION 3. ADMINISTRATION.
(a) Committee Composition. The Plan shall be administered by the
Committee. The Committee shall consist of two or more directors of the
Company, who shall satisfy the requirements of Rule 16b-3 (or its successor)
under the Exchange Act with respect to the grant of Awards to persons who are
officers or directors of the Company under Section 16 of the Exchange Act or
the Board itself.
(b) Committee for Non-Officer Grants. The Board may also appoint one or
more separate committees of the Board, each composed of one or more directors
of the Company who need satisfy the requirements of Section 3(a), who may
administer the Plan with respect to Employees who are not considered officers
or directors of the Company under Section 16 of the Exchange Act, may grant
Awards under the Plan to such Employees and may determine all terms of such
grants. Within the limitations of the preceding sentence, any reference in
the Plan to the Committee shall include such committee or committees
appointed pursuant to the preceding sentence.
(c) Committee Procedures. The Board of Directors shall designate one of
the members of the Committee as chairman. The Committee may hold meetings at
such times and places as it shall determine. The acts of a majority of the
Committee members present at meetings at which a quorum exists, or acts
reduced to or approved in writing by all Committee members, shall be valid
acts of the Committee.
(d) Committee Responsibilities. Subject to the provisions of the Plan, the
Committee shall have full authority and discretion to take the following
actions:
(i) To interpret the Plan and to apply its provisions;
(ii) To adopt, amend or rescind rules, procedures and forms relating to the
Plan;
(iii) To authorize any person to execute, on behalf of the Company, any
instrument required to carry out the purposes of the Plan;
(iv) To determine when Shares are to be awarded or offered for sale and
when Options are to be granted under the Plan;
(v) To select the Offerees and Optionees;
(vi) To determine the number of Shares to be offered to each Offeree or to
be made subject to each Option;
(vii) To prescribe the terms and conditions of each award or sale of
Shares, including (without limitation) the Purchase Price, the vesting of the
award (including accelerating the vesting of awards) and to specify the
provisions of the Stock Purchase Agreement relating to such award or sale;
(viii) To prescribe the terms and conditions of each Option, including
(without limitation) the Exercise Price, the vesting or duration of the
Option (including accelerating the vesting of the Option), to determine
whether such Option is to be classified as an ISO or as a Nonstatutory
Option, and to specify the provisions of the Stock Option Agreement relating
to such Option;
(ix) To amend any outstanding Stock Purchase Agreement or Stock Option
Agreement, subject to applicable legal restrictions and to the consent of the
Offeree or Optionee who entered into such agreement;
(x) To prescribe the consideration for the grant of each Option or other
right under the Plan and to determine the sufficiency of such consideration;
(xi) To determine the disposition of each Option or other right under the
Plan in the event of an Optionee's or Offeree's divorce or dissolution of
marriage;
(xii) To determine whether Options or other rights under the Plan will be
granted in replacement of other grants under an incentive or other
compensation plan of an acquired business;
(xiii) To correct any defect, supply any omission, or reconcile any
inconsistency in the Plan, any Stock Option Agreement or any Stock Purchase
Agreement; and
(xiv) To take any other actions deemed necessary or advisable for the
administration of the Plan.
Subject to the requirements of applicable law, the Committee may designate
persons other than members of the Committee to carry out its responsibilities
and may prescribe such conditions and limitations as it may deem appropriate,
except that the Committee may not delegate its authority with regard to the
selection for participation of or the granting of Options or other rights
under the Plan to persons subject to Section 16 of the Exchange Act. All
decisions, interpretations and other actions of the Committee shall be final
and binding on all Offerees, all Optionees, and all persons deriving their
rights from an Offeree or Optionee. No member of the Committee shall be
liable for any action that he has taken or has failed to take in good faith
with respect to the Plan, any Option, or any right to acquire Shares under
the Plan.
SECTION 4. ELIGIBILITY.
(a) General Rule. Only Employees shall be eligible for the grant of
Restricted Shares, Stock Units, NSOs or SARs. In addition, only individuals
who are employed as common-law employees by the Company, a Parent or a
Subsidiary shall be eligible for the grant of ISOs. In addition, an Employee
who owns more than ten percent (10%) of the total combined voting power of
all classes of outstanding stock of the Company or any of its Parents or
Subsidiaries shall not be eligible for the grant of an ISO unless the
requirements set forth in Section 422(c)(6) of the Code are satisfied.
(b) Outside Directors. Any other provision of the Plan notwithstanding,
the participation of Outside Directors in the Plan shall be subject to the
following restrictions:
(i) Outside Directors shall only be eligible for the grant of Restricted
Shares, Stock Units, Nonstatutory Options and SARs.
(ii) Each Outside Director shall automatically be granted a Nonstatutory
Option to purchase 60,000 Shares (subject to adjustment under Section 12) as
a result of their appointment as an Outside Director on, or after, the
effectiveness of the Company's initial public offering of the Stocks. In
addition, on the first business day following the conclusion of each regular
annual meeting of the Company's stockholders occurring after 2000 and
following the meeting at which they were appointed, each Outside Director who
will continue serving as a member of the Board thereafter, and who has been a
member of the Board for at least six months as of the annual meeting, shall
receive a Nonstatutory Option to purchase 25,000 Shares (subject to
adjustment under Section 12). Each Outside Director who serves as chairman
of a committee of the Board will be granted a Nonstatutory Option to purchase
30,000 Shares for each such position held and each Outside Director who
serves as a member of a committee of the Board (other than the chairman) will
be granted a Nonstatutory Option to purchase 10,000 Shares for each such
position held (all subject to adjustment under Section 12). Vesting of such
grants will terminate upon conclusion of service for the respective
positions. In the event an Outside Director remains as a committee chairman
or member after the initial Option grant for such chairmanship or membership
has vested in full, such Outside Director shall receive an additional Option
grant of of 30,000 Shares for a chairman or 10,000 Shares for a member, which
will vest in the same manner as the initial Option grant for such position.
(iii) The Exercise Price of all Nonstatutory Options granted to an
Outside Director under this Section 4(b) shall be equal to one hundred
percent (100%) of the Fair Market Value of a Share on the date of grant,
payable in one of the forms described in Section 9(a), (b) and (d).
(iv) Each Option granted under Section 4(b)(ii) prior to August 14, 2002,
shall become exercisable in four equal annual installments on each of the
first four annual anniversaries of the date of grant. Each Option granted
under Section 4(b)(ii) on or after August 14, 2002, shall become exercisable
in 48 equal monthly installments on each of the first 48 monthly
anniversaries of the date of the grant. Notwithstanding the foregoing, each
Outside Director's initial Option grant and any additional Option grants
shall become exercisable in full in the event that a Change in Control occurs
with respect to the Company.
(v) All Nonstatutory Options granted to an Outside Director under this
Section 4(b) shall terminate on the earliest of (A) the tenth (10th)
anniversary of the date of grant of such Options or (B) the date twelve (12)
months after the termination of such Outside Director's service for any
reason.
(b) Limitation On Grants. No Employee shall be granted Options to purchase
more than one million (1,000,000) Shares in any fiscal year of the Company
(subject to adjustment in accordance with Section 12).
(c) Ten Percent Stockholders. An Employee who owns more than ten percent
(10%) of the total combined voting power of all classes of outstanding stock
of the Company or any of its Subsidiaries shall not be eligible for the grant
of an ISO unless such grant satisfies the requirements of Code Section
422(c)(6).
(d) Attribution Rules. For purposes of Subsection (d) above, in
determining stock ownership, an Employee shall be deemed to own the stock
owned, directly or indirectly, by or for such Employee's brothers, sisters,
spouse, ancestors and lineal descendants. Stock owned, directly or
indirectly, by or for a corporation, partnership, estate or trust shall be
deemed to be owned proportionately by or for its shareholders, partners or
beneficiaries.
(e) Outstanding Stock. For purposes of Subsection 4(d) above, "outstanding
stock" shall include all stock actually issued and outstanding immediately
after the grant. "Outstanding stock" shall not include shares authorized for
issuance under outstanding options held by the Employee or by any other
person.
SECTION 5. STOCK SUBJECT TO PLAN.
(a) Basic Limitation. Shares offered under the Plan shall be authorized
but unissued Shares or treasury Shares. The maximum aggregate number of
Options, SARs, Stock Units and Restricted Shares awarded under the Plan shall
not exceed nine million (9,000,000) Shares, plus the additional Shares
described in Sections (b) and (c). The limitation of this Section 5(a) shall
be subject to adjustment pursuant to Section 12.
(b) Annual Increase in Shares. As of January 1 of each year, commencing
with the year 2001, the aggregate number of Options, SARs, Stock Units and
Restricted Shares that may be awarded under the Plan shall automatically
increase by a number equal to the lesser of (i) five million five hundred
thousand (5,500,000) shares, (ii) eight percent (8%) of the outstanding
shares of Stock of the Company on such date or (iii) a lesser amount
determined by the Board. The aggregate number of Shares that may be issued
under the Plan shall at all times be subject to adjustment pursuant to Section
12. The number of Shares that are subject to Options or other rights
outstanding at any time under the Plan shall not exceed the number of Shares
that then remain available for issuance under the Plan. The Company, during
the term of the Plan, shall at all times reserve and keep available
sufficient Shares to satisfy the requirements of the Plan.
(c) Additional Shares. If Restricted Shares or Shares issued upon the
exercise of Options are forfeited, then such Shares shall again become
available for Awards under the Plan. If Stock Units, Options or SARs are
forfeited or terminate for any other reason before being exercised, then the
corresponding Shares shall again become available for Awards under the Plan.
If Stock Units are settled, then only the number of Shares (if any) actually
issued in settlement of such Stock Units shall reduce the number available
under Section 5(a) and the balance shall again become available for Awards
under the Plan. If SARs are exercised, then only the number of Shares (if
any) actually issued in settlement of such SARs shall reduce the number
available in Section 5(a) and the balance shall again become available for
Awards under the Plan. The foregoing notwithstanding, the aggregate number
of Shares that may be issued under the Plan upon the exercise of ISOs shall
not be increased when Restricted Shares or other Shares are forfeited.
(d) Dividend Equivalents. Any dividend equivalents paid or credited under
the Plan shall not be applied against the number of Restricted Shares, Stock
Units, Options or SARs available for Awards, whether or not such dividend
equivalents are converted into Stock Units.
SECTION 6. RESTRICTED SHARES
(a) Restricted Stock Agreement. Each grant of Restricted Shares under the
Plan shall be evidenced by a Restricted Stock Agreement between the recipient
and the Company. Such Restricted Shares shall be subject to all applicable
terms of the Plan and may be subject to any other terms that are not
inconsistent with the Plan. The provisions of the various Restricted Stock
Agreements entered into under the Plan need not be identical.
(b) Payment for Awards. Subject to the following sentence, Restricted
Shares may be sold or awarded under the Plan for such consideration as the
Committee may determine, including (without limitation) cash, cash
equivalents, full-recourse promissory notes, past services and future
services. To the extent that an Award consists of newly issued Restricted
Shares, the Award recipient shall furnish consideration with a value not less
than the par value of such Restricted Shares in the form of cash, cash
equivalents, or past services rendered to the Company (or a Parent or
Subsidiary), as the Committee may determine.
(c) Vesting. Each Award of Restricted Shares may or may not be subject to
vesting. Vesting shall occur, in full or in installments, upon satisfaction
of the conditions specified in the Restricted Stock Agreement. The Committee
may include among such conditions the requirement that the performance of the
Company or a business unit of the Company for a specified period of one (1)
or more years equal or exceed a target determined in advance by the
Committee. Such performance shall be determined by the Company's independent
auditors. Such target shall be based on one or more of the criteria set
forth in Appendix A. The Committee shall determine such target not later
than the 90th day of such period. In no event shall the number of Restricted
Shares which are subject to performance based vesting conditions exceed five
hundred thousand (500,000) Shares subject to adjustment in accordance with
Section 12. A Restricted Stock Agreement may provide for accelerated vesting
in the event of the Participant's death, disability or retirement or other
events. The Committee may determine, at the time of granting Restricted
Shares of thereafter, that all or part of such Restricted Shares shall become
vested in the event that a Change in Control occurs with respect to the
Company.
(d) Voting and Dividend Rights. The holders of Restricted Shares awarded
under the Plan shall have the same voting, dividend and other rights as the
Company's other stockholders. A Restricted Stock Agreement, however, may
require that the holders of Restricted Shares invest any cash dividends
received in additional Restricted Shares. Such additional Restricted Shares
shall be subject to the same conditions and restrictions as the Award with
respect to which the dividends were paid.
SECTION 7. OTHER TERMS AND CONDITIONS OF AWARDS OR SALES.
(a) Duration of Offers and Nontransferability of Rights. Any right to
acquire Shares under the Plan (other than an Option) shall automatically
expire if not exercised by the Offeree within thirty (30) days after the
grant of such right was communicated to him by the Committee. Such right
shall not be transferable and shall be exercisable only by the Offeree to
whom such right was granted.
(b) Purchase Price. The Purchase Price shall be determined by the
Committee at its sole discretion. The Purchase Price shall be payable in one
of the forms described in Sections 9(a), (b) or (c).
(c) Withholding Taxes. As a condition to the purchase of Shares, the
Offeree shall make such arrangements as the Committee may require for the
satisfaction of any federal, state or local withholding tax obligations that
may arise in connection with such purchase.
(d) Restrictions on Transfer of Shares. Any Shares awarded or sold under
the Plan shall be subject to such special forfeiture conditions, rights of
repurchase, rights of first refusal and other transfer restrictions as the
Committee may determine. Such restrictions shall be set forth in the
applicable Stock Purchase Agreement and shall apply in addition to any
general restrictions that may apply to all holders of Shares.
(e) Sub Plan for France. Any Options granted to Employees that are subject
to taxation in France shall be subject to the terms and conditions of the Sub
Plan for France, which is an Addendum to the Plan. The additional terms and
conditions of the Sub Plan for France are to be read in conjunction with the
rules of the Plan. Conflicts of interpretation between the Plan and Sub Plan
for France shall be resolved in favor of the Sub Plan for France only with
respect to Options granted to Employees that are subject to taxation in
France.
SECTION 8. TERMS AND CONDITIONS OF OPTIONS.
(a) Stock Option Agreement. Each grant of an Option under the Plan shall
be evidenced by a Stock Option Agreement between the Optionee and the
Company. Such Option shall be subject to all applicable terms and conditions
of the Plan and may be subject to any other terms and conditions which are
not inconsistent with the Plan and which the Committee deems appropriate for
inclusion in a Stock Option Agreement. The Stock Option Agreement shall
specify whether the Option is an ISO or an NSO. The provisions of the
various Stock Option Agreements entered into under the Plan need not be
identical. Options may be granted in consideration of a reduction in the
Optionee's other compensation. A Stock Option Agreement may provide that a
new Option will be granted automatically to the Optionee when he or she
exercises a prior Option and pays the Exercise Price in a form described in
Section 9.
(b) Number of Shares. Each Stock Option Agreement shall specify the number
of Shares that are subject to the Option and shall provide for the adjustment
of such number in accordance with Section 12. Options granted to an Optionee
in a single fiscal year of the Company shall not cover more than one million
(1,000,000) Shares.
(c) Exercise Price. Each Stock Option Agreement shall specify the Exercise
Price. The Exercise Price of an ISO shall not be less than one hundred
percent (100%) of the Fair Market Value of a Share on the date of grant,
except as otherwise provided in Section 4(d). Subject to the foregoing in
this Section 8(c), the Exercise Price under any Option shall be determined by
the Committee at its sole discretion. The Exercise Price shall be payable in
one of the forms described in Sections 9.
(d) Withholding Taxes. As a condition to the exercise of an Option, the
Optionee shall make such arrangements as the Committee may require for the
satisfaction of any federal, state or local withholding tax obligations that
may arise in connection with such exercise. The Optionee shall also make
such arrangements as the Committee may require for the satisfaction of any
federal, state or local withholding tax obligations that may arise in
connection with the disposition of Shares acquired by exercising an Option.
(e) Exercisability and Term. Each Stock Option Agreement shall specify the
date when all or any installment of the Option is to become exercisable. The
Stock Option Agreement shall also specify the term of the Option; provided
that the term of an ISO shall in no event exceed ten (10) years from the date
of grant (five (5) years for Employees described in Section 4(d)). A Stock
Option Agreement may provide for accelerated exercisability in the event of
the Optionee's death, disability, or retirement or other events and may
provide for expiration prior to the end of its term in the event of the
termination of the Optionee's service. Options may be awarded in combination
with SARs, and such an Award may provide that the Options will not be
exercisable unless the related SARs are forfeited. Subject to the foregoing
in this Section 8(e), the Committee at its sole discretion shall determine
when all or any installment of an Option is to become exercisable and when an
Option is to expire.
(f) Nontransferability. During an Optionee's lifetime, his Option(s) shall
be exercisable only by him and shall not be transferable. In the event of an
Optionee's death, his Option(s) shall not be transferable other than by will
or by the laws of descent and distribution.
(g) Exercise of Options Upon Termination of Service. Each Stock Option
Agreement shall set forth the extent to which the Optionee shall have the
right to exercise the Option following termination of the Optionee's Service
with the Company and its Subsidiaries, and the right to exercise the Option
of any executors or administrators of the Optionee's estate or any person who
has acquired such Option(s) directly from the Optionee by bequest or
inheritance. Such provisions shall be determined in the sole discretion of
the Committee, need not be uniform among all Options issued pursuant to the
Plan, and may reflect distinctions based on the reasons for termination of
Service.
(h) Effect of Change in Control. The Committee may determine, at the time
of granting an Option or thereafter, that such Option shall become
exercisable as to all or part of the Shares subject to such Option in the
event that a Change in Control occurs with respect to the Company, subject to
the following limitations:
(i) In the case of an ISO, the acceleration of exercisability shall not
occur without the Optionee's written consent.
(ii) If the Company and the other party to the transaction constituting a
Change in Control agree that such transaction is to be treated as a "pooling
of interests" for financial reporting purposes, and if such transaction in
fact is so treated, then the acceleration of exercisability shall not occur
to the extent that the Company's independent accountants and such other
party's independent accountants separately determine in good faith that such
acceleration would preclude the use of "pooling of interests" accounting.
(i) Leaves of Absence. An Employee's Service shall cease when such
Employee ceases to be actively employed by, or a consultant or adviser to,
the Company (or any subsidiary) as determined in the sole discretion of the
Board of Directors. For purposes of Options, Service does not terminate when
an Employee goes on a bona fide leave of absence, that was approved by the
Company in writing, if the terms of the leave provide for continued service
crediting, or when continued service crediting is required by applicable law.
However, for purposes of determining whether an Option is entitled to ISO
status, an Employee's Service will be treated as terminating ninety (90) days
after such Employee went on leave, unless such Employee's right to return to
active work is guaranteed by law or by a contract. Service terminates in any
event when the approved leave ends, unless such Employee immediately returns
to active work. The Company determines which leaves count toward Service,
and when Service terminates for all purposes under the Plan.
(j) No Rights as a Stockholder. An Optionee, or a transferee of an
Optionee, shall have no rights as a stockholder with respect to any Shares
covered by his Option until the date of the issuance of a stock certificate
for such Shares. No adjustments shall be made, except as provided in Section
12.
(k) Modification, Extension and Renewal of Options. Within the limitations
of the Plan, the Committee may modify, extend or renew outstanding options or
may accept the cancellation of outstanding options (to the extent not previ-
ously exercised), whether or not granted hereunder, in return for the grant
of new Options for the same or a different number of Shares and at the same
or a different exercise price. The foregoing notwithstanding, no modifi-
cation of an Option shall, without the consent of the Optionee, impair his
rights or increase his obligations under such Option.
(l) Restrictions on Transfer of Shares. Any Shares issued upon exercise of
an Option shall be subject to such special forfeiture conditions, rights of
repurchase, rights of first refusal and other transfer restrictions as the
Committee may determine. Such restrictions shall be set forth in the appli-
cable Stock Option Agreement and shall apply in addition to any general
restrictions that may apply to all holders of Shares.
(m) Buyout Provisions. The Committee may at any time (a) offer to buy out
for a payment in cash or cash equivalents an Option previously granted or (b)
authorize an Optionee to elect to cash out an Option previously granted, in
either case at such time and based upon such terms and conditions as the
Committee shall establish.
SECTION 9. PAYMENT FOR SHARES.
(a) General Rule. The entire Exercise Price of Shares issued under the
Plan shall be payable in lawful money of the United States of America at the
time when such Shares are purchased, except as provided in Subsections 9(b)
through 9(g) below.
(b) Surrender of Stock. To the extent that a Stock Option Agreement so
provides, payment may be made all or in part by surrendering, or attesting to
the ownership of, Shares which have already been owned by the Optionee or his
representative for more than twelve (12) months. Such Shares shall be valued
at their Fair Market Value on the date when the new Shares are purchased
under the Plan. The Optionee shall not surrender, or attest to the ownership
of, Shares in payment of the Exercise Price if such action would cause the
Company to recognize compensation expense (or additional compensation
expense) with respect to the Option for financial reporting purposes.
(c) Services Rendered. At the discretion of the Committee, Shares may be
awarded under the Plan in consideration of services rendered to the Company
or a Subsidiary prior to the award. If Shares are awarded without the
payment of a Purchase Price in cash, the Committee shall make a determination
(at the time of the award) of the value of the services rendered by the
Offeree and the sufficiency of the consideration to meet the requirements of
Section 6(c).
(d) Cashless Exercise. To the extent that a Stock Option Agreement so
provides, payment may be made all or in part by delivery (on a form
prescribed by the Committee) of an irrevocable direction to a securities
broker to sell Shares and to deliver all or part of the sale proceeds to the
Company in payment of the aggregate Exercise Price.
(e) Exercise/Pledge. To the extent that a Stock Option Agreement so
provides, payment may be made all or in part by delivery (on a form
prescribed by the Committee) of an irrevocable direction to a securities
broker or lender to pledge Shares, as security for a loan, and to deliver all
or part of the loan proceeds to the Company in payment of the aggregate
Exercise Price.
(f) Promissory Note. To the extent that a Stock Option Agreement so
provides, payment may be made all or in part by delivering (on a form
prescribed by the Company) a full-recourse promissory note. However, the par
value of the Common Shares being purchased under the Plan, if newly issued,
shall be paid in cash or cash equivalents.
(g) Other Forms of Payment. To the extent that a Stock Option Agreement so
provides, payment may be made in any other form that is consistent with
applicable laws, regulations and rules.
SECTION 10. STOCK APPRECIATION RIGHTS.
(a) SAR Agreement. Each grant of a SAR under the Plan shall be evidenced
by a SAR Agreement between the Optionee and the Company. Such SAR shall be
subject to all applicable terms of the Plan and may be subject to any other
terms that are not inconsistent with the Plan. The provisions of the various
SAR Agreements entered into under the Plan need not be identical. SARs may
be granted in consideration of a reduction in the Optionee's other
compensation.
(b) Number of Shares. Each SAR Agreement shall specify the number of
Shares to which the SAR pertains and shall provide for the adjustment of such
number in accordance with Section 12. SARs granted to any Optionee in a
single calendar year shall in no event pertain to more than one million
(1,000,000) Shares, except that SARs granted to a new Employee in the fiscal
year of the Company in which his or her service as an Employee first
commences shall not pertain to more than five hundred thousand (500,000)
Shares. The limitations set forth in the preceding sentence shall be subject
to adjustment in accordance with Section 12.
(c) Exercise Price. Each SAR Agreement shall specify the Exercise Price.
A SAR Agreement may specify an Exercise Price that varies in accordance with
a predetermined formula while the SAR is outstanding.
(d) Exercisability and Term. Each SAR Agreement shall specify the date
when all or any installment of the SAR is to become exercisable. The SAR
Agreement shall also specify the term of the SAR. A SAR Agreement may
provide for accelerated exercisability in the event of the Optionee's death,
disability or retirement or other events and may provide for expiration prior
to the end of its term in the event of the termination of the Optionee's
service. SARs may be awarded in combination with Options, and such an Award
may provide that the SARs will not be exercisable unless the related Options
are forfeited. A SAR may be included in an ISO only at the time of grant but
may be included in an NSO at the time of grant or thereafter. A SAR granted
under the Plan may provide that it will be exercisable only in the event of a
Change in Control.
(e) Effect of Change in Control. The Committee may determine, at the time
of granting a SAR or thereafter, that such SAR shall become fully exercisable
as to all Common Shares subject to such SAR in the event that a Change in
Control occurs with respect to the Company, subject to the following
sentence. If the Company and the other party to the transaction constituting
a Change in Control agree that such transaction is to be treated as a
"pooling of interests" for financial reporting purposes, and if such
transaction in fact is so treated, then the acceleration of exercisability
shall not occur to the extent that the Company's independent accountants and
such other party's independent accountants separately determine in good faith
that such acceleration would preclude the use of "pooling of interests"
accounting.
(f) Exercise of SARs. Upon exercise of a SAR, the Optionee (or any person
having the right to exercise the SAR after his or her death) shall receive
from the Company (a) Shares, (b) cash or (c) a combination of Shares and
cash, as the Committee shall determine. The amount of cash and/or the Fair
Market Value of Shares received upon exercise of SARs shall, in the
aggregate, be equal to the amount by which the Fair Market Value (on the date
of surrender) of the Shares subject to the SARs exceeds the Exercise Price.
If, on the date when a SAR expires, the Exercise Price under such SAR is less
than the Fair Market Value on such date but any portion of such SAR has not
been exercised or surrendered, then such SAR shall automatically be deemed to
be exercised as of such date with respect to such portion.
(g) Special Holding Period. To the extent required by Section 16 of the
Exchange Act or any rule thereunder, an SAR shall not be exercised for cash
unless both it and the related Option have been outstanding for more than six
months.
(h) Special Exercise Window. To the extent required by Section 16 of the
Exchange Act or any rule thereunder, an SAR may only be exercised for cash
during a period which (a) begins on the third business day following a date
when the Company's quarterly summary statement of sales and earnings is
released to the public and (b) ends at the close of trading on the last
business day prior to the 16th day of the third month of the fiscal quarter
in which the earnings are released. This Section 10(h) shall not apply to if
the exercise occurs automatically on the date when the related Option
expires, and the Committee may determine that it shall not apply to limited
SARs that are exercisable only in the event of a Change in Control.
(i) Modification or Assumption of SARs. Within the limitations of the
Plan, the Committee may modify, extend or assume outstanding SARs or may
accept the cancellation of outstanding SARs (whether granted by the Company
or by another issuer) in return for the grant of new SARs for the same or a
different number of shares and at the same or a different exercise price.
The foregoing notwithstanding, no modification of a SAR shall, without the
consent of the Optionee, may alter or impair his or her rights or obligations
under such SAR.
SECTION 11. STOCK UNITS.
(a) Stock Unit Agreement. Each grant of Stock Units under the Plan shall
be evidenced by a Stock Unit Agreement between the recipient and the Company.
Such Stock Units shall be subject to all applicable terms of the Plan and may
be subject to any other terms that are not inconsistent with the Plan. The
provisions of the various Stock Unit Agreements entered into under the Plan
need not be identical. Stock Units may be granted in consideration of a
reduction in the recipient's other compensation.
(b) Payment for Awards. To the extent that an Award is granted in the form
of Stock Units, no cash consideration shall be required of the Award
recipients.
(c) Vesting Conditions. Each Award of Stock Units may or may not be
subject to vesting. Vesting shall occur, in full or in installments, upon
satisfaction of the conditions specified in the Stock Unit Agreement. A
Stock Unit Agreement may provide for accelerated vesting in the event of the
Participant's death, disability or retirement or other events. The Committee
may determine, at the time of granting Stock Units or thereafter, that all or
part of such Stock Units shall become vested in the event that a Change in
Control occurs with respect to the Company, except as provided in the next
following sentence. If the Company and the other party to the transaction
constituting a Change in Control agree that such transaction is to be treated
as a "pooling of interests" for financial reporting purposes, and if such
transaction in fact is so treated, then the acceleration of vesting shall not
occur to the extent that the Company's independent accountants and such other
party's independent accountants separately determine in good faith that such
acceleration would preclude the use of "pooling of interests" accounting.
(d) Voting and Dividend Rights. The holders of Stock Units shall have no
voting rights. Prior to settlement or forfeiture, any Stock Unit awarded
under the Plan may, at the Committee's discretion, carry with it a right to
dividend equivalents. Such right entitles the holder to be credited with an
amount equal to all cash dividends paid on one Share while the Stock Unit is
outstanding. Dividend equivalents may be converted into additional Stock
Units. Settlement of dividend equivalents may be made in the form of cash,
in the form of Shares, or in a combination of both. Prior to distribution,
any dividend equivalents which are not paid shall be subject to the same
conditions and restrictions as the Stock Units to which they attach.
(e) Form and Time of Settlement of Stock Units. Settlement of vested Stock
Units may be made in the form of (a) cash, (b) Shares or (c) any combination
of both, as determined by the Committee. The actual number of Stock Units
eligible for settlement may be larger or smaller than the number included in
the original Award, based on predetermined performance factors. Methods of
converting Stock Units into cash may include (without limitation) a method
based on the average Fair Market Value of Shares over a series of trading
days. Vested Stock Units may be settled in a lump sum or in installments.
The distribution may occur or commence when all vesting conditions applicable
to the Stock Units have been satisfied or have lapsed, or it may be deferred
to any later date. The amount of a deferred distribution may be increased by
an interest factor or by dividend equivalents. Until an Award of Stock Units
is settled, the number of such Stock Units shall be subject to adjustment
pursuant to Section 12.
(f) Death of Recipient. Any Stock Units Award that becomes payable after
the recipient's death shall be distributed to the recipient's beneficiary or
beneficiaries. Each recipient of a Stock Units Award under the Plan shall
designate one or more beneficiaries for this purpose by filing the prescribed
form with the Company. A beneficiary designation may be changed by filing
the prescribed form with the Company at any time before the Award recipient's
death. If no beneficiary was designated or if no designated beneficiary
survives the Award recipient, then any Stock Units Award that becomes payable
after the recipient's death shall be distributed to the recipient's estate.
(g) Creditors' Rights. A holder of Stock Units shall have no rights other
than those of a general creditor of the Company. Stock Units represent an
unfunded and unsecured obligation of the Company, subject to the terms and
conditions of the applicable Stock Unit Agreement.
SECTION 12. ADJUSTMENT OF SHARES.
(a) Adjustments. In the event of a subdivision of the outstanding Stock, a
declaration of a dividend payable in Shares, a declaration of a dividend
payable in a form other than Shares in an amount that has a material effect
on the price of Shares, a combination or consolidation of the outstanding
Stock (by reclassification or otherwise) into a lesser number of Shares, a
recapitalization, a spin-off or a similar occurrence, the Committee shall
make such adjustments as it, in its sole discretion, deems appropriate in one
or more of:
(i) The number of Options, SARs, Restricted Shares and Stock Units
available for future Awards under Section 5;
(ii) The limitations set forth in Sections 4(c), 8(b) and 10(b);
(iii) The number of NSOs to be granted to Outside Directors under
Section 4(b);
(iv) The number of Shares covered by each outstanding Option and SAR;
(v) The Exercise Price under each outstanding Option and SAR; or
(vi) The number of Stock Units included in any prior Award which has not
yet been settled.
Except as provided in this Section 12, a Participant shall have no rights by
reason of any issue by the Company of stock of any class or securities
convertible into stock of any class, any subdivision or consolidation of
shares of stock of any class, the payment of any stock dividend or any other
increase or decrease in the number of shares of stock of any class.
(b) Dissolution or Liquidation. To the extent not previously exercised or
settled, Options, SARs and Stock Units shall terminate immediately prior to
the dissolution or liquidation of the Company.
(c) Reorganizations. In the event that the Company is a party to a merger
or other reorganization, outstanding Awards shall be subject to the agreement
of merger or reorganization. Such agreement shall provide for:
(i) The continuation of the outstanding Awards by the Company, if the
Company is a surviving corporation;
(ii) The assumption of the outstanding Awards by the surviving corporation
or its parent or subsidiary;
(iii) The substitution by the surviving corporation or its parent or
subsidiary of its own awards for the outstanding Awards;
(iv) Full exercisability or vesting and accelerated expiration of the
outstanding Awards; or
(v) Settlement of the full value of the outstanding Awards in cash or cash
equivalents followed by cancellation of such Awards.
(d) Reservation of Rights. Except as provided in this Section 12, an
Optionee or Offeree shall have no rights by reason of any subdivision or
consolidation of shares of stock of any class, the payment of any dividend or
any other increase or decrease in the number of shares of stock of any class.
Any issue by the Company of shares of stock of any class, or securities
convertible into shares of stock of any class, shall not affect, and no
adjustment by reason thereof shall be made with respect to, the number or
Exercise Price of Shares subject to an Option. The grant of an Option
pursuant to the Plan shall not affect in any way the right or power of the
Company to make adjustments, reclassifications, reorganizations or changes of
its capital or business structure, to merge or consolidate or to dissolve,
liquidate, sell or transfer all or any part of its business or assets.
SECTION 13. DEFERRAL OF AWARDS.
The Committee (in its sole discretion) may permit or require a Participant
to:
(i) Have cash that otherwise would be paid to such Participant as a result
of the exercise of a SAR or the settlement of Stock Units credited to a
deferred compensation account established for such Participant by the
Committee as an entry on the Company's books;
(ii) Have Shares that otherwise would be delivered to such Participant as a
result of the exercise of an Option or SAR converted into an equal number of
Stock Units; or
(iii) Have Shares that otherwise would be delivered to such Participant as
a result of the exercise of an Option or SAR or the settlement of Stock Units
converted into amounts credited to a deferred compensation account
established for such Participant by the Committee as an entry on the
Company's books. Such amounts shall be determined by reference to the Fair
Market Value of such Shares as of the date when they otherwise would have
been delivered to such Participant.
A deferred compensation account established under this Section 13 may be
credited with interest or other forms of investment return, as determined by
the Committee. A Participant for whom such an account is established shall
have no rights other than those of a general creditor of the Company. Such
an account shall represent an unfunded and unsecured obligation of the
Company and shall be subject to the terms and conditions of the applicable
agreement between such Participant and the Company. If the deferral or
conversion of Awards is permitted or required, the Committee (in its sole
discretion) may establish rules, procedures and forms pertaining to such
Awards, including (without limitation) the settlement of deferred compensa-
tion accounts established under this Section 13.
SECTION 14. AWARDS UNDER OTHER PLANS.
The Company may grant awards under other plans or programs. Such awards may
be settled in the form of Shares issued under this Plan. Such Shares shall
be treated for all purposes under the Plan like Shares issued in settlement
of Stock Units and shall, when issued, reduce the number of Shares available
under Section 5.
SECTION 15. PAYMENT OF DIRECTOR'S FEES IN SECURITIES.
(a) Effective Date. No provision of this Section 15 shall be effective
unless and until the Board has determined to implement such provision.
(b) Elections to Receive NSOs, Restricted Shares or Stock Units. An
Outside Director may elect to receive his or her annual retainer payments
and/or meeting fees from the Company in the form of cash, NSOs, Restricted
Shares or Stock Units, or a combination thereof, as determined by the Board.
Such NSOs, Restricted Shares and Stock Units shall be issued under the Plan.
An election under this Section 15 shall be filed with the Company on the
prescribed form.
(c) Number and Terms of NSOs, Restricted Shares or Stock Units. The number
of NSOs, Restricted Shares or Stock Units to be granted to Outside Directors
in lieu of annual retainers and meeting fees that would otherwise be paid in
cash shall be calculated in a manner determined by the Board. The terms of
such NSOs, Restricted Shares or Stock Units shall also be determined by the
Board.
SECTION 16. LEGAL AND REGULATORY REQUIREMENTS.
Shares shall not be issued under the Plan unless the issuance and delivery of
such Shares complies with (or is exempt from) all applicable requirements of
law, including (without limitation) the Securities Act of 1933, as amended,
the rules and regulations promulgated thereunder, state securities laws and
regulations and the regulations of any stock exchange on which the Company's
securities may then be listed, and the Company has obtained the approval or
favorable ruling from any governmental agency which the Company determines is
necessary or advisable.
SECTION 17. WITHHOLDING TAXES.
(a) General. To the extent required by applicable federal, state, local or
foreign law, a Participant or his or her successor shall make arrangements
satisfactory to the Company for the satisfaction of any withholding tax
obligations that arise in connection with the Plan. The Company shall not be
required to issue any Shares or make any cash payment under the Plan until
such obligations are satisfied.
(b) Share Withholding. The Committee may permit a Participant to satisfy
all or part of his or her withholding or income tax obligations by having the
Company withhold all or a portion of any Shares that otherwise would be
issued to him or her or by surrendering all or a portion of any Shares that
he or she previously acquired. Such Shares shall be valued at their Fair
Market Value on the date when taxes otherwise would be withheld in cash.
SECTION 18. LIMITATION ON PARACHUTE PAYMENTS.
(a) Scope of Limitation. This Section 18 shall apply to an Award unless
the Committee, at the time of making an Award under the Plan or at any time
thereafter, specifies in writing that such Award shall not be subject to this
Section 18. If this Section 18 applies to an Award, it shall supersede any
contrary provision of the Plan or of any Award granted under the Plan.
(b) Basic Rule. In the event that the independent auditors most recently
selected by the Board (the "Auditors") determine that any payment or transfer
by the Company under the Plan to or for the benefit of a Participant (a
"Payment") would be nondeductible by the Company for federal income tax
purposes because of the provisions concerning "excess parachute payments" in
Section 280G of the Code, then the aggregate present value of all Payments
shall be reduced (but not below zero) to the Reduced Amount. For purposes of
this Section 18, the "Reduced Amount" shall be the amount, expressed as a
present value, which maximizes the aggregate present value of the Payments
without causing any Payment to be nondeductible by the Company because of
Section 280G of the Code.
(c) Reduction of Payments. If the Auditors determine that any Payment
would be nondeductible by the Company because of Section 280G of the Code,
then the Company shall promptly give the Participant notice to that effect
and a copy of the detailed calculation thereof and of the Reduced Amount, and
the Participant may then elect, in his or her sole discretion, which and how
much of the Payments shall be eliminated or reduced (as long as after such
election the aggregate present value of the Payments equals the Reduced
Amount) and shall advise the Company in writing of his or her election within
ten (10) days of receipt of notice. If no such election is made by the
Participant within such ten (10) day period, then the Company may elect which
and how much of the Payments shall be eliminated or reduced (as long as after
such election the aggregate present value of the Payments equals the Reduced
Amount) and shall notify the Participant promptly of such election. For
purposes of this Section 18, present value shall be determined in accordance
with Section 280G(d)(4) of the Code. All determinations made by the Auditors
under this Section 18 shall be binding upon the Company and the Participant
and shall be made within sixty (60) days of the date when a Payment becomes
payable or transferable. As promptly as practicable following such
determination and the elections hereunder, the Company shall pay or transfer
to or for the benefit of the Participant such amounts as are then due to him
or her under the Plan and shall promptly pay or transfer to or for the
benefit of the Participant in the future such amounts as become due to him or
her under the Plan.
(d) Overpayments and Underpayments. As a result of uncertainty in the
application of Section 280G of the Code at the time of an initial
determination by the Auditors hereunder, it is possible that Payments will
have been made by the Company that should not have been made (an
"Overpayment") or that additional Payments that will not have been made by
the Company could have been made (an "Underpayment"), consistent in each case
with the calculation of the Reduced Amount hereunder. In the event that the
Auditors, based upon the assertion of a deficiency by the Internal Revenue
Service against the Company or the Participant that the Auditors believe has
a high probability of success, determine that an Overpayment has been made,
such Overpayment shall be treated for all purposes as a loan to the
Participant which he or she shall repay to the Company, together with
interest at the applicable federal rate provided in Section 7872(f)(2) of the
Code; provided, however, that no amount shall be payable by the Participant
to the Company if and to the extent that such payment would not reduce the
amount subject to taxation under Section 4999 of the Code. In the event that
the Auditors determine that an Underpayment has occurred, such Underpayment
shall promptly be paid or transferred by the Company to or for the benefit of
the Participant, together with interest at the applicable federal rate
provided in Section 7872(f)(2) of the Code.
(e) Related Corporations. For purposes of this Section 18, the term
"Company" shall include affiliated corporations to the extent determined by
the Auditors in accordance with Section 280G(d)(5) of the Code.
SECTION 19. NO EMPLOYMENT RIGHTS.
No provision of the Plan, nor any right or Option granted under the Plan,
shall be construed to give any person any right to become, to be treated as,
or to remain an Employee. The Company and its Subsidiaries reserve the right
to terminate any person's Service at any time and for any reason, with or
without notice.
SECTION 20. DURATION AND AMENDMENTS.
(a) Term of the Plan. The amended and restated Plan, as set forth herein,
shall terminate automatically ten years after its adoption and may be
terminated on any earlier date pursuant to Subsection (b) below.
(b) Right to Amend or Terminate the Plan. The Board of Directors may amend
the Plan at any time and from time to time. Rights and obligations under any
Option granted before amendment of the Plan shall not be materially impaired
by such amendment, except with consent of the person to whom the Option was
granted. An amendment of the Plan shall be subject to the approval of the
Company's stockholders only to the extent required by applicable laws,
regulations or rules.
(c) Effect of Amendment or Termination. No Shares shall be issued or sold
under the Plan after the termination thereof, except upon exercise of an
Option granted prior to such termination. The termination of the Plan, or
any amendment thereof, shall not affect any Share previously issued or any
Option previously granted under the Plan.
SECTION 21. EXECUTION.
To record the adoption of the amended and restated Plan by the Board of
Directors effective as of March 29, 2000, the Company has caused its
authorized officer to execute the same.
WEBEX COMMUNICATIONS, INC.
By:________________________
Subrah S. Iyar
Chief Executive Officer
ADDENDUM
--------
WEBEX COMMUNICATIONS, INC.
2002 STOCK INCENTIVE PLAN
SUB FOR FRANCE
Additional Terms and Conditions for Employees Subject to Taxation in France
The additional terms and conditions detailed below are to be read in
conjunction with the rules of the Plan. The terms used herein are defined in
the Stock Option Agreement for employees subject to the laws in France. Any
terms not specifically defined in the Stock Option Agreement for employees
subject to the laws in France have the same meaning as defined in the Plan.
1. Notwithstanding any other provision of the Plan, options may only be
granted to individuals (hereafter the "beneficiaries" or "Participants"):
having an employment contract with the French subsidiary or a Group
company as defined below, upon the date of grant;
and/or to the non-employed directors having a management function [the
"president-directeur general", the "directeur-general", the "members of the
"directoire"] of the French subsidiary or a Group company as defined below,
upon the date of grant.
Options may not be issued under the French Sub Plan to employees or
executives owning upon the date of grant more than ten percent (10%) of the
Company's capital shares.
A Group company is a company having the following capital links with
the granting Company:
At least 10% of the French subsidiary capital is held, directly or
indirectly, by the granting Company, or
the French subsidiary directly or indirectly holds at least 10% of the
granting Company's capital, or
at least 50% of the French subsidiary's capital is held, directly or
indirectly by a company which holds, directly or indirectly, at least 50% of
the granting Company's capital.
2. Notwithstanding any other provision of the Plan, the Board can set the
exercise price of any options granted under this sub-plan as the greater of
fair market value on the date of grant or 80% of the average stock exchange
price during the twenty days preceding the related grant or 80% of the
average repurchase price of its own shares held by the Company to be
allocated to beneficiaries.
3. Notwithstanding any other provision of the Plan, options granted within
a twenty (20) day period following a distribution of dividends or a capital
increase of the Company shall not be deemed to have been granted under this
Sub-Plan.
4. Notwithstanding any other provision of the Plan, options granted within
the following time periods shall be deemed not to have been granted under
this Sub-Plan:
- during the period of time between the ten stock exchange sessions
preceding and following the date consolidated accounts are made public, or if
no consolidated accounts, the date of publication of annual accounts, and
- during the period of time between the date the Company becomes aware of
information which would have a significant impact on the Company's shares and
the date after the end of ten stock exchange sessions following the date upon
which the information is made public (pursuant to Article 70 of the bill
modifying the last paragraph of Article 208-1 of law n"66-537 of 24 July
1966).
5. Notwithstanding any other provision of the Plan, unless otherwise
agreed by the Board or the applicable Committee, options will be exercisable
under the vesting schedule set out in the Stock Option agreement for
employees subject to the laws in France. Notwithstanding any other provision
of the Plan, the Board is authorized to unilaterally accelerate, reduce, lift
or cancel vesting of any option granted under this Sub Plan, as may be
necessary or desirable to comply with the French applicable social or tax
laws. Furthermore, the Board or the applicable Committee has the discretion
to impose a restriction of up to three years on the sale of shares issued as
a result of an option exercise.
6. Notwithstanding any other provision of the Plan, the exercise price
shall remain unchanged. The exercise price can only be adjusted upon the
occurrence of the events specified under July 24, 1966 corporate law (section
208-5) in accordance with French law.
7. The total number of options granted and remaining unexercised
(outstanding options) will never cover a number of shares exceeding one-third
of the share capital of Webex Corporation, Inc.