Exhibit 10.2
CONEXANT SYSTEMS, INC.
2004 NEW-HIRE EQUITY INCENTIVE PLAN
ADOPTED: FEBRUARY 6, 2004
AMENDED: FEBRUARY 18, 2010
1. PURPOSES.
     (a) GENERAL PURPOSE. The Company, by means of the Plan, seeks to retain the
services of persons not previously an employee or director of the Company, or
following a bona fide period of non-employment, as an inducement material to the
individual’s entering into employment with the Company within the meaning of
Rule 4350(i)(1)(A) of the NASD Marketplace Rules, and to provide incentives for
such persons to exert maximum efforts for the success of the Company and its
Affiliates.
     (b) ELIGIBLE STOCK AWARD RECIPIENTS. The persons eligible to receive Stock
Awards are the Employees of the Company and its Affiliates.
     (c) AVAILABLE STOCK AWARDS. The purpose of the Plan is to provide a means
by which eligible recipients of Stock Awards may be given an opportunity to
benefit from increases in value of the Common Stock through the granting of the
following Stock Awards: (i) Options, (ii) Restricted Stock Awards, (iii) Stock
Appreciation Rights (iv) Phantom Stock Awards and (v) Other Stock Awards.
2. DEFINITIONS.
     (a) “AFFILIATE” means any parent corporation or subsidiary corporation of
the Company, whether now or hereafter existing, as those terms are defined in
Sections 424(e) and (f), respectively, of the Code.
     (b) “BOARD” means the Board of Directors of the Company.
     (c) “CAPITALIZATION ADJUSTMENT” has the meaning ascribed to that term in
Section 11(a).
     (b) “CAUSE” means, with respect to a particular Participant (i) a felony
conviction of such Participant; (ii) the commission by such Participant of an
act of fraud or embezzlement against the Company or an Affiliate; (iii) such
Participant’s willful misconduct or gross negligence materially detrimental to
the Company or an Affiliate; (iv) such Participant’s continued failure to
implement reasonable requests or directions received in the course of his
service as an Employee; (v) such Participant’s wrongful dissemination or use of
confidential or proprietary information; or (vi) the intentional and habitual
neglect by such Participant of his or her duties to the Company or an Affiliate.

 

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     (e) “CHANGE IN CONTROL” means such event as is defined in Article III,
Section 13(I)(1) of the Company’s By-Laws, as amended from time to time.
     (f) “CODE” means the Internal Revenue Code of 1986, as amended.
     (g) “COMMITTEE” means the Compensation and Management Development Committee
of the Board of Directors as it may be comprised from time to time or such other
Committee of the Board of Directors designated by the Board of Directors to
administer the Plan.
     (h) “COMMON STOCK” means the common stock of the Company, or any security
of the Company issued in substitution, exchange or lieu thereof.
     (i) “COMPANY” means Conexant Systems, Inc., a Delaware corporation, or any
successor corporation.
     (j) “CONSULTANT” means any person, including an advisor, (i) engaged by the
Company or an Affiliate to render consulting or advisory services and who is
compensated for such services or (ii) serving as a member of the Board of
Directors of an Affiliate and who is compensated for such services. However, the
term “Consultant” shall not include Directors who are not compensated by the
Company for their services as Directors, and the payment of a director’s fee by
the Company for services as a Director shall not cause a Director to be
considered a “Consultant” for purposes of the Plan.
     (k) “CONTINUOUS SERVICE” means that the Participant’s service with the
Company or an Affiliate, whether as an Employee, Director or Consultant, is not
interrupted or terminated. A change in the capacity in which the Participant
renders service to the Company or an Affiliate as an Employee, Consultant or
Director or a change in the entity for which the Participant renders such
service, provided that there is no interruption or termination of the
Participant’s service with the Company or an Affiliate, shall not terminate a
Participant’s Continuous Service. For example, a change in status from an
Employee of the Company to a Consultant of an Affiliate or a Director shall not
constitute an interruption of Continuous Service. The Board or the chief
executive officer of the Company, in that party’s sole discretion, may determine
whether Continuous Service shall be considered interrupted in the case of any
leave of absence approved by that party, including sick leave, military leave or
any other personal leave. Notwithstanding the foregoing, an approved leave of
absence shall be treated as Continuous Service for purposes of vesting in a
Stock Award only to such extent as may be provided in the Company’s leave of
absence policy or in the written terms of the Participant’s leave of absence.
     (l) “CORPORATE TRANSACTION” means the occurrence, in a single transaction
or in a series of related transactions, of any one or more of the following
events:
          (i) a sale or other disposition of all or substantially all, as
determined by the Board in its discretion, of the consolidated assets of the
Company and its Subsidiaries;
          (ii) a sale or other disposition of at least ninety percent (90%) of
the outstanding securities of the Company;
          

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          (iii) a merger, consolidation or similar transaction following which
the Company is not the surviving corporation; or
          (iv) a merger, consolidation or similar transaction following which
the Company is the surviving corporation but the shares of Common Stock
outstanding immediately preceding the merger, consolidation or similar
transaction are converted or exchanged by virtue of the merger, consolidation or
similar transaction into other property, whether in the form of securities, cash
or otherwise.
     (m) “DIRECTOR” means a member of the Board of Directors of the Company.
     (n) “DISABILITY” means, with respect to a Participant, such Participant’s
permanent and total disability within the meaning of the Company’s long-term
disability plan, as it may be amended from time to time, or, if there is no such
plan, as determined by the Committee.
     (o) “EMPLOYEE” means any person employed by the Company or an Affiliate.
Service as a Director or payment of a director’s fee by the Company or an
Affiliate shall not be sufficient to constitute “employment” by the Company or
an Affiliate. Subject to the exclusions set forth below, the term “Employee”
shall include only an individual who was hired (and advised that he or she was
being hired) directly by the Company or an Affiliate as a regular employee and
who performs regular employment services directly for the Company or an
Affiliate. Exclusions: The term “Employee” as used in the Plan shall not include
an individual who works, or who was hired to work, or who was advised that he or
she works: (1) as an independent contractor or an employee of an independent
contractor; or (2) as a temporary employee, regardless of the length of time
that he or she works at the Company or an Affiliate; or (3) through a temporary
employment agency, job placement agency, or other third party; or (4) as part of
an employee leasing arrangement between the Company or an Affiliate and any
third party, unless the Company determines that such individual has to be
permitted to participate in the Plan pursuant to local laws. For the purposes of
the Plan, the exclusions described above shall remain in effect even if the
described individual could otherwise be construed as an employee under any
applicable common law or is subsequently determined under applicable laws to be
an employee.
     (p) “ENTITY” means a corporation, partnership or other entity.
     (q) “EXCHANGE ACT” means the Securities Exchange Act of 1934, as amended.
     (r) “EXCHANGE ACT PERSON” means any natural person, Entity or “group”
(within the meaning of Section 13(d) or 14(d) of the Exchange Act), except that
“Exchange Act Person” shall not include (A) the Company or any Subsidiary of the
Company, (B) any employee benefit plan of the Company or any Subsidiary of the
Company or any trustee or other fiduciary holding securities under an employee
benefit plan of the Company or any Subsidiary of the Company, (C) an underwriter
temporarily holding securities pursuant to an offering of such securities, or
(D) an Entity Owned, directly or indirectly, by the shareowners of the Company
in substantially the same proportions as their Ownership of stock of the
Company.

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     (s) “FAIR MARKET VALUE” means, as of any date, the value of the Common
Stock determined as follows:
          (i) If the Common Stock is listed on any established stock exchange or
traded on the Nasdaq National Market or the Nasdaq SmallCap Market, the Fair
Market Value of a share of Common Stock shall be the closing sales price for
such stock (or the closing bid, if no sales were reported) as quoted on such
exchange or market (or the exchange or market with the greatest volume of
trading in the Common Stock) on the relevant date or, if no shares are traded on
such date, then on the last market trading day prior to the relevant date.
          (ii) In the absence of such markets for the Common Stock, the Fair
Market Value shall be determined in good faith by the Board.
     (t) “NON-EMPLOYEE DIRECTOR” means a Director who either (i) is not a
current Employee or Officer of the Company or its parent or a subsidiary, does
not receive compensation, either directly or indirectly, from the Company or its
parent or a subsidiary, for services rendered as a consultant or in any capacity
other than as a Director (except for an amount as to which disclosure would not
be required under Item 404(a) of Regulation S-K promulgated pursuant to the
Securities Act (“Regulation S-K”)), does not possess an interest in any other
transaction for which disclosure would be required under Item 404(a) of
Regulation S-K and is not engaged in a business relationship for which
disclosure would be required pursuant to Item 404(b) of Regulation S-K; or (ii)
is otherwise considered a “non-employee director” for purposes of Rule 16b-3.
     (u) “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.
     (v) “OPTION” means a nonstatutory stock option granted pursuant to the Plan
that is not intended to qualify as an incentive stock option under Section 422
of the Code and the regulations promulgated thereunder.
     (w) “OPTION AGREEMENT” means an agreement between the Company and an
Optionholder evidencing the terms and conditions of an individual Option grant.
Each Option Agreement shall be subject to the terms and conditions of the Plan.
     (x) “OPTIONHOLDER” means a person to whom an Option is granted pursuant to
the Plan or, if applicable, such other person who holds an outstanding Option.
     (y) “OTHER STOCK AWARD” means an award based in whole or in part by
reference to the Common Stock which is granted pursuant to the terms and
conditions of Section 7(d).
     (z) “OTHER STOCK AWARD AGREEMENT” means an agreement between the Company
and a holder of an Other Stock Award evidencing the terms and conditions of an
individual Other Stock Award grant. Each Other Stock Award Agreement shall be
subject to the terms and conditions of the Plan.

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     (aa) “OWN,” “OWNED,” “OWNER,” “OWNERSHIP” A person or Entity shall be
deemed to “Own,” to have “Owned,” to be the “Owner” of, or to have acquired
“Ownership” of securities if such person or Entity, directly or indirectly,
through any contract, arrangement, understanding, relationship or otherwise, has
or shares voting power, which includes the power to vote or to direct the
voting, with respect to such securities.
     (bb) “PARTICIPANT” means a person to whom a Stock Award is granted pursuant
to the Plan or, if applicable, such other person who holds an outstanding Stock
Award.
     (cc) “PHANTOM STOCK AWARD” means a right to receive shares of Common Stock
which is granted pursuant to the terms and conditions of Section 7(b).
     (dd) “PHANTOM STOCK AWARD AGREEMENT” means an agreement between the Company
and a holder of a Phantom Stock Award evidencing the terms and conditions of an
individual Phantom Stock Award grant. Each Phantom Stock Award Agreement shall
be subject to the terms and conditions of the Plan.
     (ee) “PLAN” means this Conexant Systems, Inc. 2004 New-Hire Equity
Incentive Plan.
     (ff) “RESTRICTED STOCK AWARD” means an award of shares of Common Stock
which is granted pursuant to the terms and conditions of Section 7(a).
     (gg) “RESTRICTED STOCK AWARD AGREEMENT” means an agreement between the
Company and a holder of a Restricted Stock Award evidencing the terms and
conditions of an individual Restricted Stock Award grant. Each Restricted Stock
Award Agreement shall be subject to the terms and conditions of the Plan.
     (hh) “RULE 16b-3” means Rule 16b-3 promulgated under the Exchange Act or
any successor to Rule 16b-3, as in effect from time to time.
     (ii) “SECURITIES ACT” means the Securities Act of 1933, as amended.
     (jj) “STOCK APPRECIATION RIGHT” means a right to receive the appreciation
of Common Stock that is granted pursuant to the terms and conditions of
Section 7(c).
     (kk) “STOCK APPRECIATION RIGHT AGREEMENT” means an agreement between the
Company and a holder of a Stock Appreciation Right evidencing the terms and
conditions of an individual Stock Appreciation Right grant. Each Stock
Appreciation Right Agreement shall be subject to the terms and conditions of the
Plan.
     (ll) “STOCK AWARD” means any right granted under the Plan, including an
Option, a Restricted Stock Award, Phantom Stock, a Stock Appreciation Right and
an Other Stock Award.
     (mm) “STOCK AWARD AGREEMENT” means an agreement between the Company and a
holder of a Stock Award evidencing the terms and conditions of an individual
Stock Award grant. Each Stock Award Agreement shall be subject to the terms and
conditions of the Plan.

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     (nn) “SUBSIDIARY” means, with respect to the Company, (i) any corporation
of which more than fifty percent (50%) of the outstanding capital stock having
ordinary voting power to elect a majority of the board of directors of such
corporation (irrespective of whether, at the time, stock of any other class or
classes of such corporation shall have or might have voting power by reason of
the happening of any contingency) is at the time, directly or indirectly, Owned
by the Company, and (ii) any partnership in which the Company has a direct or
indirect interest (whether in the form of voting or participation in profits or
capital contribution) of more than fifty percent (50%).
3. ADMINISTRATION.
     (a) ADMINISTRATION BY BOARD. The Board shall administer the Plan unless and
until the Board delegates administration to a committee, as provided in
Section 3(c).
     (b) POWERS OF BOARD. The Board shall have the power, subject to, and within
the limitations of, the express provisions of the Plan:
          (i) Subject to Section 5 herein, to determine from time to time which
of the persons eligible under the Plan shall be granted Stock Awards; when and
how each Stock Award shall be granted; what type or combination of types of
Stock Award shall be granted; the provisions of each Stock Award granted (which
need not be identical), including the time or times when a person shall be
permitted to receive Common Stock pursuant to a Stock Award; and the number of
shares of Common Stock with respect to which a Stock Award shall be granted to
each such person.
          (ii) To construe and interpret the Plan and Stock Awards granted under
it, and to establish, amend and revoke rules and regulations for its
administration. The Board, in the exercise of this power, may correct any
defect, omission or inconsistency in the Plan or in any Stock Award Agreement,
in a manner and to the extent it shall deem necessary or expedient to make the
Plan fully effective.
          (iii) To amend the Plan or a Stock Award as provided in Section 12.
          (iv) To terminate or suspend the Plan as provided in Section 13.
          (v) Generally, to exercise such powers and to perform such acts as the
Board deems necessary or expedient to promote the best interests of the Company
and that are not in conflict with the provisions of the Plan.
          (vi) To adopt such procedures and sub-plans as are necessary or
appropriate to permit or facilitate participation in the Plan by employees who
are foreign nationals or employed outside the United States.
     (c) DELEGATION TO COMMITTEE.
          (i) GENERAL. The Plan shall initially be administered by the
Committee. The Committee shall have, in connection with the administration of
the Plan, the powers possessed by
          

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the Board, including the power to delegate to a subcommittee any of the
administrative powers the Committee is authorized to exercise (and references in
this Plan to the Board shall thereafter be to the Committee or subcommittee),
subject, however, to such resolutions, not inconsistent with the provisions of
the Plan, as may be adopted from time to time by the Board. The Board may
delegate administration of the Plan to a different committee or committees of
one (1) or more members of the Board, and the term “committee” shall apply to
any person or persons to whom such authority has been delegated. The Board may
retain the power to jointly administer the Plan with the Committee or may
abolish the Committee at any time and revest in the Board the administration of
the Plan.
          (ii) RULE 16b-3 COMPLIANCE. In the discretion of the Board, the
Committee may consist solely of two or more Non-Employee Directors, in
accordance with Rule 16b-3.
     (d) EFFECT OF BOARD’S DECISION. All determinations, interpretations and
constructions made by the Board in good faith shall not be subject to review by
any person and shall be final, binding and conclusive on all persons.
4. SHARES SUBJECT TO THE PLAN.
     (a) SHARE RESERVE. Subject to the provisions of Section 11(a) relating to
Capitalization Adjustments, the shares of Common Stock that may be issued
pursuant to Stock Awards shall not exceed in the aggregate twelve million
(12,000,000) shares of Common Stock, plus an annual increase, if any, to be
added on the first day of the fiscal year of the Company for a period of ten
(10) years, commencing on the first day of the fiscal year that begins in 2004
and ending on (and including) the first day of the fiscal year that begins in
2013. Such annual increase, if any, shall equal such number of shares as would
cause the total shares of Common Stock then available for issuance under the
Plan to equal ten million (10,000,000) shares. Notwithstanding the foregoing,
the Board may act, prior to the first day of any fiscal year of the Company and
in lieu of the automatic increase described in the prior sentence, to increase
the share reserve by such number of shares of Common Stock as the Board shall
determine, which number shall be less than the number of shares described above.
Notwithstanding the foregoing, on and after February 18, 2010, the annual
increase described in this Section 4(a) shall no longer be effective.
     (b) REVERSION OF SHARES TO THE SHARE RESERVE. If any Stock Award shall for
any reason expire or otherwise terminate, in whole or in part, without having
been exercised in full, or if any shares of Common Stock issued to a Participant
pursuant to a Stock Award are forfeited back to or repurchased by the Company,
including, but not limited to, any repurchase or forfeiture caused by the
failure to meet a contingency or condition required for the vesting of such
shares, then the shares of Common Stock not acquired under such Stock Award, or
forfeited back to or repurchase by the Company, shall revert to and again become
available for issuance under the Plan. If any shares subject to a Stock Award
are not delivered to a Participant because such shares are withheld for the
payment of taxes or the Stock Award is exercised through a reduction of shares
subject to the Stock Award (i.e., “net exercised”), then the number of shares
that are not delivered to the Participant as a result thereof shall revert to
and again become available for issuance under the Plan. If the exercise price of
any Stock Award is satisfied by tendering shares of Common Stock held by the
Participant (either by actual delivery or

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attestation), then the number of shares so tendered shall revert to and again
become available for issuance under the Plan.
     (c) SOURCE OF SHARES. The shares of Common Stock subject to the Plan may be
unissued shares or reacquired shares, bought on the market or otherwise.
5. ELIGIBILITY. Persons eligible for Stock Awards shall consist of Employees
whose potential contribution, in the judgment of the Committee, will benefit the
future success of the Company and/or an Affiliate. Stock Awards may be granted
only to persons not previously an Employee or Director of the Company, or
following a bona fide period of non-employment, as an inducement material to the
individual’s entering into employment with the Company within the meaning of
Rule 4350(i)(1)(A) of the NASD Marketplace Rules. In addition, notwithstanding
any other provision of the Plan to the contrary, all Stock Awards must be
granted either by a majority of the Company’s independent directors or a
committee comprised of a majority of independent directors.
6. OPTION PROVISIONS.
     Each Option shall be in such form and shall contain such terms and
conditions as the Board shall deem appropriate. All Options shall be designated
as nonstatutory stock options at the time of grant. The provisions of separate
Options need not be identical, but each Option shall include (through
incorporation of provisions hereof by reference in the Option or otherwise) the
substance of each of the following provisions:
     (a) TERM. The Board shall determine the term of an Option.
     (b) EXERCISE PRICE OF AN OPTION. The Board, in its discretion, shall
determine the exercise price of each Option.
     (c) CONSIDERATION. The purchase price of Common Stock acquired pursuant to
an Option shall be paid, to the extent permitted by applicable law, either
(i) in cash at the time the Option is exercised or (ii) at the discretion of the
Board (1) by delivery to the Company of other Common Stock, (2) by a “net
exercise” of the Option (as further described below) or (3) in any other form of
legal consideration that may be acceptable to the Board. Unless otherwise
specifically provided in the Option, the purchase price of Common Stock acquired
pursuant to an Option that is paid by delivery to the Company of other Common
Stock acquired, directly or indirectly from the Company, shall be paid only by
shares of the Common Stock of the Company that have been held for more than six
(6) months (or such longer or shorter period of time required to avoid a charge
to earnings for financial accounting purposes).
     In the case of a “net exercise” of an Option, the Company will not require
a payment of the exercise price of the Option from the Participant but will
reduce the number of shares of Common Stock issued upon the exercise by the
largest number of whole shares that has a Fair Market Value that does not exceed
the aggregate exercise price. With respect to any remaining balance of the
aggregate exercise price, the Company shall accept a cash payment from the
Participant. The shares of Common Stock so used to pay the exercise price of an
Option under a

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“net exercise” will be considered to have resulted from the exercise of the
Option, and accordingly, the Option will not again be exercisable with respect
to such shares, the shares actually delivered to the Participant, and any shares
withheld for purposes of tax withholding.
     (d) TRANSFERABILITY OF AN OPTION. An Option shall be transferable to the
extent provided in the Option Agreement. If the Option does not provide for
transferability, then the Option shall not be transferable except by (a) will,
(b) the laws of descent and distribution, or (c) upon dissolution of the
Optionholder’s marriage pursuant to a U.S. domestic relations order. Also,
except with respect to a transfer made pursuant to a U.S. domestic relations
order, during the Optionholder’s lifetime, only the Optionholder is entitled to
exercise his or her Option. Notwithstanding the foregoing, the Option Agreement
may provide that, by delivering written notice to the Company, in a form
satisfactory to the Company, an Optionholder may designate a third party who, in
the event of such Optionholder’s death, shall thereafter be entitled to exercise
the Option.
     (e) VESTING GENERALLY. The total number of shares of Common Stock subject
to an Option may, but need not, vest and therefore become exercisable in
periodic installments that may, but need not, be equal. The Option may be
subject to such other terms and conditions on the time or times when it may be
exercised (which may be based on performance or other criteria) as the Board may
deem appropriate. The vesting provisions of individual Options may vary. The
provisions of this Section 6(d) are subject to any Option provisions governing
the minimum number of shares of Common Stock as to which an Option may be
exercised.
     (f) TERMINATION OF CONTINUOUS SERVICE. In the event that an Optionholder’s
Continuous Service terminates (for reasons other than Cause or upon the
Optionholder’s death), the Optionholder may exercise his or her Option (to the
extent that the Optionholder was entitled to exercise such Option as of the date
of termination) but only within such period of time ending on the earlier of
(i) the date three (3) months following the termination of the Optionholder’s
Continuous Service (or such longer or shorter period specified in the Option
Agreement) or (ii) the expiration of the term of the Option as set forth in the
Option Agreement. If, after termination, the Optionholder does not exercise his
or her Option within the time specified in the Option Agreement, the Option
shall terminate.
     (g) EXTENSION OF TERMINATION DATE. An Optionholder’s Option Agreement may
also provide that if the exercise of the Option following the termination of the
Optionholder’s Continuous Service (for reasons other than Cause or upon the
Optionholder’s death or Disability) would be prohibited at any time solely
because the issuance of shares of Common Stock would violate the registration
requirements under the Securities Act, then the Option shall terminate on the
earlier of (i) the expiration of the term of the Option set forth in the Option
Agreement or (ii) the expiration of a period of three (3) months after the
termination of the Optionholder’s Continuous Service during which the exercise
of the Option would not be in violation of such registration requirements.
     (h) DEATH OF OPTIONHOLDER. In the event that an Optionholder’s Continuous
Service terminates as a result of the Optionholder’s death, then the Option may
be exercised (to the extent the Optionholder was entitled to exercise such
Option as of the date of death) by the

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Optionholder’s estate, by a person who acquired the right to exercise the Option
by bequest or inheritance or by a person designated to exercise the option upon
the Optionholder’s death pursuant to Section 6(c), but only within the period
ending on the earlier of (1) the date thirty-six (36) months following the date
of death (or such longer or shorter period specified in the Option Agreement) or
(2) the expiration of the term of such Option as set forth in the Option
Agreement. If, after death, the Option is not exercised within the time
specified herein, the Option shall terminate.
     (i) TERMINATION FOR CAUSE. In the event an Optionholder’s Continuous
Service is terminated for Cause, the Option shall terminate upon the termination
date of such Optionholder’s Continuous Service and the Optionholder shall be
prohibited from exercising his or her Option from and after the time of such
termination.
     (j) EARLY EXERCISE. The Option may, but need not, include a provision
whereby the Optionholder may elect at any time before the Optionholder’s
Continuous Service terminates to exercise the Option as to any part or all of
the shares of Common Stock subject to the Option prior to the full vesting of
the Option. Any unvested shares of Common Stock so purchased may be subject to a
repurchase option in favor of the Company or to any other restriction the Board
determines to be appropriate. The Company will not exercise its repurchase
option until at least six (6) months (or such longer or shorter period of time
required to avoid a charge to earnings for financial accounting purposes) have
elapsed following exercise of the Option unless the Board otherwise specifically
provides in the Option.
7. PROVISIONS OF STOCK AWARDS OTHER THAN OPTIONS.
     (a) RESTRICTED STOCK AWARDS. Each Restricted Stock Award agreement shall be
in such form and shall contain such terms and conditions as the Board shall deem
appropriate. At the Board’s election, shares of Common Stock may be (i) held in
book entry form subject to the Company’s instructions until any restrictions
relating to the Restricted Stock Award lapse; or (ii) evidenced by a
certificate, which certificate shall be held in such form and manner as
determined by the Board. The terms and conditions of Restricted Stock Award
Agreements may change from time to time, and the terms and conditions of
separate Restricted Stock Award Agreements need not be identical, provided,
however, that each Restricted Stock Award Agreement shall include (through
incorporation of the provisions hereof by reference in the agreement or
otherwise) the substance of each of the following provisions:
          (i) PURCHASE PRICE. At the time of the grant of a Restricted Stock
Award, the Board will determine the price to be paid by the Participant for each
share subject to the Restricted Stock Award. To the extent required by
applicable law, the price to be paid by the Participant for each share of the
Restricted Stock Award will not be less than the par value of a share of Common
Stock. A Restricted Stock Award may be awarded as a stock bonus (i.e., with no
cash purchase price to be paid) to the extent permissible under applicable law.
          (ii) CONSIDERATION. At the time of the grant of a Restricted Stock
Award, the Board will determine the consideration permissible for the payment of
the purchase price of the Restricted Stock Award. The purchase price of Common
Stock acquired pursuant to the
          

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Restricted Stock Award shall be paid either: (i) in cash at the time of
purchase; (ii) by services rendered or to be rendered to the Company; or (iii)
in any other form of legal consideration that may be acceptable to the Board in
its discretion.
          (iii) VESTING. Shares of Common Stock acquired under a Restricted
Stock Award may, but need not, be subject to a share repurchase option in favor
of the Company in accordance with a vesting schedule to be determined by the
Board.
          (iv) TERMINATION OF PARTICIPANT’S CONTINUOUS SERVICE. In the event
that a Participant’s Continuous Service terminates, the Company shall have the
right, but not the obligation, to repurchase or otherwise reacquire for no
consideration any or all of the shares of Common Stock held by the Participant
that have not vested as of the date of termination under the terms of the
Restricted Stock Award Agreement. At the Board’s election, the repurchase right
may be at the least of: (i) the Fair Market Value on the relevant date; or
(ii) the Participant’s original cost. The Company will not exercise its
repurchase option until at least six (6) months (or such longer or shorter
period of time required to avoid a charge to earnings for financial accounting
purposes) have elapsed following the purchase of the restricted stock unless
otherwise determined by the Board or provided in the Restricted Stock Award
Agreement.
          (v) TRANSFERABILITY. Rights to purchase or receive shares of Common
Stock granted under a Restricted Stock Award shall be transferable by the
Participant only upon such terms and conditions as are set forth in the
Restricted Stock Award Agreement, as the Board shall determine in its
discretion, and so long as Common Stock awarded under the Restricted Stock Award
remains subject to the terms of the Restricted Stock Award Agreement.
     (b) PHANTOM STOCK. Each Phantom Stock Award Agreement shall be in such form
and shall contain such terms and conditions as the Board shall deem appropriate.
The terms and conditions of the Phantom Stock Award Agreements may change from
time to time, and the terms and conditions of separate Phantom Stock Award
Agreements need not be identical, provided, however, that each Phantom Stock
Award Agreement shall include (through incorporation of the provisions hereof by
reference in the agreement or otherwise) the substance of each of the following
provisions:
          (i) CONSIDERATION. At the time of grant of a Phantom Stock Award, the
Board will determine the consideration, if any, to be paid by the Participant
upon delivery of each share of Common Stock subject to the Phantom Stock Award.
To the extent required by applicable law, the consideration to be paid by the
Participant for each share of Common Stock subject to a Phantom Stock Award will
not be less than the par value of a share of Common Stock. Such consideration
may be paid in any form permitted under applicable law.
          (ii) VESTING. At the time of the grant of a Phantom Stock Award, the
Board may impose such restrictions or conditions to the vesting of the Phantom
Stock Award as it, in its absolute discretion, deems appropriate.
          (iii) ADDITIONAL RESTRICTIONS. At the time of the grant of Phantom
Stock Award, the Board, as it deems appropriate, may impose such restrictions or
conditions that delay
          

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the delivery of shares of Common Stock subject to a Phantom Stock Award after
the vesting of such Award, with such terms to be contained in the Phantom Stock
Award Agreement.
          (iv) PAYMENT. Phantom Stock Awards may be settled in Common Stock or
in cash or any combination of the two, or in any other form of consideration as
determined by the Board and contained in the Phantom Stock Award Agreement.
          (v) DIVIDEND EQUIVALENTS. Dividend equivalents may be credited in
respect of shares of Common Stock covered by a Phantom Stock Award, as
determined by the Board and contained in the Phantom Stock Award Agreement. At
the discretion of the Board, such dividend equivalents may be converted into
additional shares of Common Stock covered by the Phantom Stock Award in such
manner as determined by the Board. Any additional shares covered by the Phantom
Stock Award credited by reason of such dividend equivalents will be subject to
all the terms and conditions of the underlying Phantom Stock Award Agreement to
which they relate.
          (vi) TERMINATION OF PARTICIPANT’S CONTINUOUS SERVICE. Except as
otherwise provided in the applicable Phantom Stock Award Agreement, such portion
of the Phantom Stock Award that has not vested will be forfeited upon the
Participant’s termination of service for any reason.
     (c) STOCK APPRECIATION RIGHTS. Each Stock Appreciation Right Agreement
shall be in such form and shall contain such terms and conditions as the Board
shall deem appropriate. The terms and conditions of Stock Appreciation Right
Agreements may change from time to time, and the terms and conditions of
separate Stock Appreciation Right Agreements need not be identical, but each
Stock Appreciation Right Agreement shall include (through incorporation of
provisions hereof by reference in the agreement or otherwise) the substance of
each of the following provisions:
          (i) STRIKE PRICE AND CALCULATION OF APPRECIATION. Each Stock
Appreciation Right will be denominated in share of Common Stock equivalents. The
appreciation distribution payable on the exercise of a Stock Appreciation Right
will be not greater than an amount equal to the excess of (A) the aggregate Fair
Market Value (on the date of the exercise of the Stock Appreciation Right) of a
number of shares of Common Stock equal to the number of share of Common Stock
equivalents in which the Participant is vested under such Stock Appreciation
Right and with respect to which the Participant is exercising the Stock
Appreciation Right on such date, over (B) an amount that will be determined by
the Committee at the time of grant of the Stock Appreciation Right.
          (ii) VESTING. At the time of the grant of a Stock Appreciation Right,
the Board may impose such restrictions or conditions to the vesting of such
Stock Appreciate Right as it, in its absolute discretion, deems appropriate.
          (iii) EXERCISE. To exercise any outstanding Stock Appreciation Right,
the Participant must provide notice of exercise to the Company in compliance
with the provisions of the Stock Appreciation Right Agreement evidencing such
Stock Appreciation Right.
          

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          (iv) PAYMENT. The appreciation distribution in respect of a Stock
Appreciation Right may be paid in Common Stock, in cash, or any combination of
the two, or in any other form of consideration as determined by the Board and
contained in the Stock Appreciation Right Agreement evidencing such Stock
Appreciation Right.
          (v) TERMINATION OF CONTINUOUS SERVICE. In the event that a
Participant’s Continuous Service terminates, the Participant may exercise his or
her Stock Appreciation Right (to the extent that the Participant was entitled to
exercise such Stock Appreciation Right as of the date of termination) but only
within such period of time ending on the earlier of (i) the date three (3)
months following the termination of the Participant’s Continuous Service (or
such longer or shorter period specified in the Stock Appreciation Right
Agreement) or (ii) the expiration of the term of the Stock Appreciation Right as
set forth in the Stock Appreciation Right Agreement. If, after termination, the
Participant does not exercise his or her Stock Appreciation Right within the
time specified in the Stock Appreciation Right Agreement, the Stock Appreciation
Right shall terminate.
     (d) OTHER STOCK AWARDS. Other forms of Stock Awards valued in whole or in
part by reference to, or otherwise based on, Common Stock may be granted either
alone or in addition to Stock Awards provided for under Section 6 and the
preceding provisions of this Section 7. Subject to the provisions of the Plan,
the Board shall have sole and complete authority to determine the persons to
whom and the time or times at which such Other Stock Awards will be granted, the
number of shares of Common Stock (or the cash equivalent thereof) to be granted
pursuant to such Awards and all other terms and conditions of such Awards.
8. SECURITIES LAW COMPLIANCE.
     The Company shall seek to obtain from each regulatory commission or agency
having jurisdiction over the Plan such authority as may be required to grant
Stock Awards and to issue and sell shares of Common Stock upon exercise of the
Stock Awards; provided, however, that this undertaking shall not require the
Company to register under the Securities Act the Plan, any Stock Award or any
Common Stock issued or issuable pursuant to any such Stock Award. If, after
reasonable efforts, the Company is unable to obtain from any such regulatory
commission or agency the authority which counsel for the Company deems necessary
for the lawful issuance and sale of Common Stock under the Plan, the Company
shall be relieved from any liability for failure to issue and sell Common Stock
upon exercise of such Stock Awards unless and until such authority is obtained.
9. USE OF PROCEEDS FROM STOCK.
     Proceeds from the sale of Common Stock pursuant to Stock Awards shall
constitute general funds of the Company.
10. MISCELLANEOUS.
     (a) ACCELERATION OF EXERCISABILITY AND VESTING. The Board shall have the
power to accelerate the time at which a

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Stock Award may first be exercised or the time during which a Stock Award or any
part thereof will vest in accordance with the Plan, notwithstanding the
provisions in the Stock Award stating the time at which it may first be
exercised or the time during which it will vest.
     (b) SHAREOWNER RIGHTS. No Participant shall be deemed to be the holder of,
or to have any of the rights of a holder with respect to, any shares of Common
Stock subject to such Stock Award unless and until such shares of Common Stock
have been issued to the Participant and such Participant has satisfied all
requirements with respect to the Stock Award pursuant to its terms.
     (c) NO EMPLOYMENT OR OTHER SERVICE RIGHTS. Nothing in the Plan or any
instrument executed or Stock Award granted pursuant thereto shall confer upon
any Participant any right to continue to serve the Company or an Affiliate in
the capacity in effect at the time the Stock Award was granted or shall affect
the right of the Company or an Affiliate to terminate (i) the employment of an
Employee with or without notice and with or without cause, (ii) the service of a
Consultant pursuant to the terms of such Consultant’s agreement with the Company
or an Affiliate or (iii) the service of a Director pursuant to the Bylaws of the
Company or an Affiliate, and any applicable provisions of the corporate law of
the state in which the Company or the Affiliate is incorporated, as the case may
be.
     (d) INVESTMENT ASSURANCES. The Company may require a Participant, as a
condition of exercising or acquiring Common Stock under any Stock Award, (i) to
give written assurances satisfactory to the Company as to the Participant’s
knowledge and experience in financial and business matters and/or to employ a
purchaser representative reasonably satisfactory to the Company who is
knowledgeable and experienced in financial and business matters and that he or
she is capable of evaluating, alone or together with the purchaser
representative, the merits and risks of exercising the Stock Award; and (ii) to
give written assurances satisfactory to the Company stating that the Participant
is acquiring Common Stock subject to the Stock Award for the Participant’s own
account and not with any present intention of selling or otherwise distributing
the Common Stock. The foregoing requirements, and any assurances given pursuant
to such requirements, shall be inoperative if (1) the issuance of the shares of
Common Stock upon the exercise or acquisition of Common Stock under the Stock
Award has been registered under a then currently effective registration
statement under the Securities Act or (2) as to any particular requirement, a
determination is made by counsel for the Company that such requirement need not
be met in the circumstances under the then applicable securities laws. The
Company may, upon advice of counsel to the Company, place legends on stock
certificates issued under the Plan as such counsel deems necessary or
appropriate in order to comply with applicable securities laws, including, but
not limited to, legends restricting the transfer of the Common Stock.
     (e) WITHHOLDING OBLIGATIONS. To the extent provided by the terms of a Stock
Award Agreement, the Participant may, with the approval of the Committee,
satisfy any federal, state or local tax withholding obligation relating to the
exercise or acquisition of Common Stock under a Stock Award by any of the
following means (in addition to the Company’s right to withhold from any
compensation paid to the Participant by the Company) or by a combination of such
means: (i) tendering a cash payment; (ii) authorizing the Company to withhold
shares of Common Stock

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from the shares of Common Stock otherwise issuable to the Participant as a
result of the exercise or acquisition of Common Stock under the Stock Award;
provided, however, that no shares of Common Stock are withheld with a value
exceeding the minimum amount of tax required to be withheld by law (or such
lesser amount as may be necessary to avoid variable award accounting); or (iii)
delivering to the Company owned and unencumbered shares of Common Stock.
11. ADJUSTMENTS UPON CHANGES IN STOCK.
     (a) CAPITALIZATION ADJUSTMENTS. If any change is made in, or other event
occurs with respect to, the Common Stock subject to the Plan or subject to any
Stock Award without the receipt of consideration by the Company (through merger,
consolidation, reorganization, recapitalization, reincorporation, stock
dividend, dividend in property other than cash, stock split, liquidating
dividend, combination of shares, exchange of shares, change in corporate
structure or other transaction not involving the receipt of consideration by the
Company (each a “Capitalization Adjustment”), the Plan will be appropriately
adjusted in the class(es) and maximum number of securities subject to the Plan
pursuant to Sections 4(a) and 4(b) and the maximum number of securities subject
to award to any person pursuant to Section 5(c), and the outstanding Stock
Awards will be appropriately adjusted in the class(es) and number of securities
and price per share of Common Stock subject to such outstanding Stock Awards.
The Board shall make such adjustments, and its determination shall be final,
binding and conclusive. (The conversion of any convertible securities of the
Company shall not be treated as a transaction “without receipt of consideration”
by the Company.)
     (b) DISSOLUTION OR LIQUIDATION. In the event of a dissolution or
liquidation of the Company, then all outstanding Stock Awards shall terminate
immediately prior to the completion of such dissolution or liquidation.
     (c) CORPORATE TRANSACTION. In the event of a Corporate Transaction, any
surviving corporation or acquiring corporation may assume or continue any or all
Stock Awards outstanding under the Plan or may substitute similar stock awards
for Stock Awards outstanding under the Plan (it being understood that similar
stock awards include, but are not limited to, awards to acquire the same
consideration paid to the shareowners or the Company, as the case may be,
pursuant to the Corporate Transaction), and any reacquisition or repurchase
rights held by the Company in respect of Common Stock issued pursuant to Stock
Awards may be assigned by the Company to the successor of the Company (or the
successor’s parent company), if any, in connection with such Corporate
Transaction. In the event that any surviving corporation or acquiring
corporation does not assume or continue any or all such outstanding Stock Awards
or substitute similar stock awards for such outstanding Stock Awards, then with
respect to Stock Awards that have been not assumed, continued or substituted and
that are held by Participants whose Continuous Service has not terminated prior
to the effective time of the Corporate Transaction, the vesting of such Stock
Awards (and, if applicable, the time at which such Stock Awards may be
exercised) shall (contingent upon the effectiveness of the Corporate
Transaction) be accelerated in full to a date prior to the effective time of
such Corporate Transaction as the Board shall determine (or, if the Board shall
not determine such a date, to the date that is five (5) days prior to the
effective time of the Corporate Transaction), such Stock Awards shall terminate
if not exercised (if applicable) at or prior to such effective time, and any
reacquisition or

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repurchase rights held by the Company with respect to such Stock Awards held by
Participants whose Continuous Service has not terminated shall (contingent upon
the effectiveness of the Corporate Transaction) lapse. With respect to any other
Stock Awards outstanding under the Plan that have not been assumed, continued or
substituted, the vesting of such Stock Awards (and, if applicable, the time at
which such Stock Award may be exercised) shall not be accelerated, unless
otherwise provided in a written agreement between the Company or any Affiliate
and the holder of such Stock Award, and such Stock Awards shall terminate if not
exercised (if applicable) prior to the effective time of the Corporate
Transaction.
     (d) CHANGE IN CONTROL. A Stock Award held by any Participant whose
Continuous Service has not terminated prior to the effective time of a Change in
Control may be subject to additional acceleration of vesting and exercisability
upon or after such event as may be provided in the Stock Award Agreement for
such Stock Award or as may be provided in any other written agreement between
the Company or any Affiliate and the Participant, but in the absence of such
provision, no such acceleration shall occur.
12. AMENDMENT OF THE PLAN AND STOCK AWARDS.
     (a) AMENDMENT OF PLAN. The Board at any time, and from time to time, may
amend the Plan. However, except as provided in Section 11(a) relating to
Capitalization Adjustments, no amendment shall be effective unless approved by
the shareowners of the Company to the extent shareowner approval is necessary to
satisfy applicable law.
     (b) NO IMPAIRMENT OF RIGHTS. Rights under any Stock Award granted before
amendment of the Plan shall not be impaired by any amendment of the Plan unless
(i) the Company requests the consent of the Participant and (ii) the Participant
consents in writing.
     (c) AMENDMENT OF STOCK AWARDS. The Board at any time, and from time to
time, may amend the terms of any one or more Stock Awards; provided, however,
that the rights under any Stock Award shall not be impaired by any such
amendment unless (i) the Company requests the consent of the Participant and
(ii) the Participant consents in writing.
13. TERMINATION OR SUSPENSION OF THE PLAN.
     (a) PLAN TERM. The Board may suspend or terminate the Plan at any time. No
Stock Awards may be granted under the Plan while the Plan is suspended or after
it is terminated.
     (b) NO IMPAIRMENT OF RIGHTS. Suspension or termination of the Plan shall
not impair rights and obligations under any Stock Award granted while the Plan
is in effect except with the consent of the Participant.
14. EFFECTIVE DATE OF PLAN.
The Plan shall become effective as determined by the Board.
15. CHOICE OF LAW.

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     The laws of the State of Delaware shall govern all questions concerning the
construction, validity and interpretation of this Plan, without regard to such
state’s conflict of laws rules.

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