Exhibit 10.3
QLOGIC CORPORATION
2005 PERFORMANCE INCENTIVE PLAN
(As Assumed by Cavium, Inc. Effective August 16, 2016 (the “Plan Assumption
Date”)
1. PURPOSE OF PLAN
The purpose of this QLogic Corporation 2005 Performance Incentive Plan (this
“Plan”) of QLogic Corporation, a Delaware corporation, is to promote the success
of the Corporation and to increase stockholder value by providing an additional
means through the grant of awards to attract, motivate, retain and reward
selected employees and other eligible persons. From and following the Plan
Assumption Date, all reference in this Plan to the Corporation shall be
construed as references to Cavium, Inc., a Delaware corporation.
2. ELIGIBILITY
The Administrator (as such term is defined in Section 3.1) may grant awards
under this Plan only to those persons that the Administrator determines to be
Eligible Persons. An “Eligible Person” is any person who is either: (a) an
officer (whether or not a director) or employee of the Corporation or one of its
Subsidiaries; (b) a director of the Corporation or one of its Subsidiaries; or
(c) an individual consultant or advisor who renders or has rendered bona fide
services (other than services in connection with the offering or sale of
securities of the Corporation or one of its Subsidiaries in a capital-raising
transaction or as a market maker or promoter of securities of the Corporation or
one of its Subsidiaries) to the Corporation or one of its Subsidiaries and who
is selected to participate in this Plan by the Administrator; provided, however,
that a person who is otherwise an Eligible Person under clause (c) above may
participate in this Plan only if such participation would not adversely affect
either the Corporation’s eligibility to use Form S-8 to register under the
Securities Act of 1933, as amended (the “Securities Act”), the offering and sale
of shares issuable under this Plan by the Corporation or the Corporation’s
compliance with any other applicable laws. An Eligible Person who has been
granted an award (a “participant”) may, if otherwise eligible, be granted
additional awards if the Administrator shall so determine. As used herein,
“Subsidiary” means any corporation or other entity a majority of whose
outstanding voting stock or voting power is beneficially owned directly or
indirectly by the Corporation; and “Board” means the Board of Directors of the
Corporation.
From and following the Plan Assumption Date, Eligible Person does not include
any individual who was providing services to Cavium, Inc. prior to the Plan
Assumption Date.
3. PLAN ADMINISTRATION
 

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3.1
The Administrator. This Plan shall be administered by and all awards under this
Plan shall be authorized by the Administrator. The “Administrator” means the
Board or one or more committees appointed by the Board or another committee
(within its delegated authority) to administer all or certain aspects of this
Plan. Any such committee shall be comprised solely of one or more directors or
such number of directors as may be required under applicable law. A committee
may delegate some or all of its authority to another committee so constituted.
The Board or a committee comprised solely of directors may also delegate, to the
extent permitted by Section 157(c) of the Delaware General Corporation Law and
any other applicable law, to one or more officers of the Corporation, its powers
under this Plan (a) to designate the officers and employees of the Corporation
and its Subsidiaries who will receive grants of awards under this Plan, and
(b) to determine the number of shares subject to, and the other terms and
conditions of, such awards. The Board may delegate different levels of authority
to different committees with administrative and grant authority under this Plan.
Unless otherwise provided in the Bylaws of the Corporation or the applicable
charter of any Administrator: (a) a majority of the members of the acting
Administrator shall constitute a quorum, and (b) the vote of a majority of the
members present assuming the presence of a quorum or the unanimous written
consent of the members of the Administrator shall constitute action by the
acting Administrator. From and following the Plan Assumption Date, the
“Administrator” means the Compensation Committee of the Board of Directors of
Cavium, Inc. and the “Board” means the Board of Directors of Cavium, Inc.

 
With respect to awards intended to satisfy the requirements for
performance-based compensation under Section 162(m) of the Internal Revenue Code
of 1986, as amended (the “Code”), this Plan shall be administered by a committee
consisting solely of two or more outside directors (as this requirement is
applied under Section 162(m) of the Code); provided, however, that the failure
to satisfy such requirement shall not affect the validity of the action of any
committee otherwise duly authorized and acting in the matter. Award grants, and
transactions in or involving awards, intended to be exempt under
Rule 16b-3 under the Securities Exchange Act of 1934, as amended (the “Exchange
Act”), must be duly and timely authorized by the Board or a committee consisting
solely of two or more non-employee directors (as this requirement is applied
under Rule 16b-3 promulgated under the Exchange Act). To the extent required by
any applicable listing agency, this Plan shall be administered by a committee
composed entirely of independent directors (within the meaning of the applicable
listing agency).
 
 
3.2
Powers of the Administrator. Subject to the express provisions of this Plan, the
Administrator is authorized and empowered to do all things necessary or
desirable in connection with the authorization of awards and the administration
of this Plan (in the case of a committee or delegation to one or more officers,
within the authority delegated to that committee or person(s)), including,
without limitation, the authority to:

 
 
(a)
determine eligibility and, from among those persons determined to be eligible,
the particular Eligible Persons who will receive an award under this Plan;

 
 
(b)
grant awards to Eligible Persons, determine the price at which securities will
be offered or awarded and the number of securities to be offered or awarded to
any of such persons, determine the other specific terms and conditions of such
awards consistent with the express limits of this Plan, establish the
installments (if any) in which such awards shall become exercisable or shall
vest (which may include, without limitation, performance and/or time-based
schedules), or determine that no delayed exercisability or vesting is required,
establish any applicable performance targets, and establish the events of
termination or reversion of such awards;

 
 
(c)
approve the forms of award agreements (which need not be identical either as to
type of award or among participants);

 

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(d)
construe and interpret this Plan and any agreements defining the rights and
obligations of the Corporation, its Subsidiaries, and participants under this
Plan, further define the terms used in this Plan, and prescribe, amend and
rescind rules and regulations relating to the administration of this Plan or the
awards granted under this Plan;

 
 
(e)
cancel, modify, or waive the Corporation’s rights with respect to, or modify,
discontinue, suspend, or terminate any or all outstanding awards, subject to any
required consent under Section 8.6.5;

 
 
(f)
accelerate or extend the vesting or exercisability or extend the term of any or
all outstanding awards (in the case of options or stock appreciation rights,
within the maximum ten-year term of such awards) in such circumstances as the
Administrator may deem appropriate (including, without limitation, in connection
with a termination of employment or services or other events of a personal
nature) subject to any required consent under Section 8.6.5 (for purposes of
clarity and without limiting the generality of this provision, the
Administrator’s authority hereunder shall extend to any awards granted
to non-employee directors of the Corporation under Appendix A of this Plan prior
to August 28, 2008);

 
 
(g)
adjust the number of shares of Common Stock subject to any award, adjust the
price of any or all outstanding awards or otherwise change previously imposed
terms and conditions, in such circumstances as the Administrator may deem
appropriate, in each case subject to Sections 4 and 8.6 (and subject to
the no-repricing provision below);

 
 
(h)
determine the date of grant of an award, which may be a designated date after
but not before the date of the Administrator’s action (unless otherwise
designated by the Administrator, the date of grant of an award shall be the date
upon which the Administrator took the action granting an award);
 
(i)
determine whether, and the extent to which, adjustments are required pursuant to
Section 7 hereof and authorize the termination, conversion, substitution or
succession of awards upon the occurrence of an event of the type described in
Section 7;

 
 
(j)
acquire or settle (subject to Sections 7 and 8.6) rights under awards in cash,
stock of equivalent value, or other consideration (subject to
the no-repricing provision below); and

 
 
(k)
determine the fair market value of the Common Stock or awards under this Plan
from time to time and/or the manner in which such value will be determined.

Notwithstanding the foregoing and except for an adjustment pursuant to
Section 7.1 or a repricing approved by stockholders, in no case may the
Administrator (1) amend an outstanding stock option or SAR to reduce the
exercise price or base price of the award, (2) cancel, exchange, or surrender an
outstanding stock option or SAR in exchange for cash or other awards for the
purpose of repricing the award, or (3) cancel, exchange, or surrender an
outstanding stock option or SAR in exchange for an option or SAR with an
exercise or base price that is less than the exercise or base price of the
original award.
 

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3.3
Binding Determinations. Any action taken by, or inaction of, the Corporation,
any Subsidiary, or the Administrator relating or pursuant to this Plan and
within its authority hereunder or under applicable law shall be within the
absolute discretion of that entity or body and shall be conclusive and binding
upon all persons. Neither the Board nor any Board committee, nor any member
thereof or person acting at the direction thereof, shall be liable for any act,
omission, interpretation, construction or determination made in good faith in
connection with this Plan (or any award made under this Plan), and all such
persons shall be entitled to indemnification and reimbursement by the
Corporation in respect of any claim, loss, damage or expense (including, without
limitation, attorneys’ fees) arising or resulting therefrom to the fullest
extent permitted by law and/or under any directors and officers liability
insurance coverage that may be in effect from time to time.

 
 
3.4
Reliance on Experts. In making any determination or in taking or not taking any
action under this Plan, the Board or a committee, as the case may be, may obtain
and may rely upon the advice of experts, including employees and professional
advisors to the Corporation. No director, officer or agent of the Corporation or
any of its Subsidiaries shall be liable for any such action or determination
taken or made or omitted in good faith.

 
 
3.5
Delegation. The Administrator may delegate
ministerial, non-discretionary functions to individuals who are officers or
employees of the Corporation or any of its Subsidiaries or to third parties.

4. SHARES OF COMMON STOCK SUBJECT TO THE PLAN; SHARE LIMITS
 
 
4.1
Shares Available. Subject to the provisions of Section 7.1, the capital stock
that may be delivered under this Plan shall be shares of the Corporation’s
authorized but unissued Common Stock and any shares of its Common Stock held as
treasury shares. For purposes of this Plan, “Common Stock” means the common
stock of the Corporation and such other securities or property as may become the
subject of awards under this Plan, or may become subject to such awards,
pursuant to an adjustment made under Section 7.1.

 
 
4.2
Share Limits. The maximum number of shares of Cavium, Inc. Common Stock that may
be delivered pursuant to awards granted to Eligible Persons under this Plan (the
“Share Limit”) is equal to the sum of: (i) 3,612,039 shares of Common Stock,
plus (ii) the number of any shares subject to stock options and stock units
granted under the Plan and outstanding as of the Plan Assumption Date which
expire, or for any reason are cancelled or terminated, after that date without
being exercised or settled, as applicable; provided, that in no event shall the
Share Limit exceed 4,914,143 shares (which is the sum of the 3,612,039 shares
set forth above, plus the aggregate number of shares subject to options and
stock units previously granted and outstanding under the Plan as of the Plan
Assumption Date).

 
Shares issued in respect of any “Full-Value Award” granted under this Plan shall
be counted against the foregoing Share Limit as 1.75 shares for every one share
issued in connection with such award. (For example, if a stock bonus of 100
shares of Common Stock is granted under this Plan, 175 shares shall be charged
against the Share Limit in connection with that award.) For this purpose, a
“Full-Value Award” means any award under this Plan that is not a stock option
grant or a stock appreciation right grant.
The following limits also apply with respect to awards granted under this Plan:
 
 
(a)
The maximum number of shares of Common Stock that may be delivered pursuant to
options qualified as incentive stock options granted under this Plan is
12,700,000 shares.

 

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(b)
The maximum number of shares of Common Stock subject to those options and stock
appreciation rights that are granted during any calendar year to any individual
under this Plan is 1,270,000 shares.

 
 
(c)
Additional limits with respect to Performance-Based Awards are set forth in
Section 5.2.3.

Each of the foregoing numerical limits is subject to adjustment as contemplated
by Section 4.3, Section 7.1, and Section 8.10.
 
 
4.3
Awards Settled in Cash, Reissue of Awards and Shares. Except as provided in the
next sentence, shares that are subject to or underlie awards granted under this
Plan which expire or for any reason are cancelled or terminated, are forfeited,
fail to vest, or for any other reason are not paid or delivered under this Plan
shall again be available for subsequent awards under this Plan. Shares that are
exchanged by a participant or withheld by the Corporation as full or partial
payment in connection with any stock option or SAR granted under this Plan, as
well as any shares exchanged by a participant or withheld by the Corporation or
one of its Subsidiaries to satisfy the tax withholding obligations related to
any stock option or SAR granted under this Plan, shall not be available for
subsequent awards under this Plan. Shares that are exchanged by a participant or
withheld by the Corporation as full or partial payment in connection with any
Full-Value Award granted under this Plan, as well as any shares exchanged by a
participant or withheld by the Corporation or one of its Subsidiaries to satisfy
the tax withholding obligations related to any Full-Value Award granted under
this Plan, shall be available for subsequent awards under this Plan, provided
that any one (1) share so exchanged or withheld in connection with any
Full-Value Award shall be credited as one and three-fourths (1.75) shares when
determining the number of shares that shall again become available for
subsequent awards under this Plan if, upon grant, the shares underlying the
related Full-Value Award were counted as one and three-fourths (1.75) shares
against the Share Limit. To the extent that an award granted under this Plan is
settled in cash or a form other than shares of Common Stock, the shares that
would have been delivered had there been no such cash or other settlement shall
not be counted against the shares available for issuance under this Plan. In the
event that shares of Common Stock are delivered in respect of a dividend
equivalent right granted under this Plan, the number of shares delivered with
respect to the award shall be counted against the share limits of this Plan. To
the extent that shares of Common Stock are delivered pursuant to the exercise of
a stock appreciation right or stock option granted under this Plan, the number
of underlying shares as to which the exercise related shall be counted against
the applicable share limits under Section 4.2, as opposed to only counting the
shares issued. (For purposes of clarity, if a stock appreciation right relates
to 100,000 shares and is exercised at a time when the payment due to the
participant is 15,000 shares, 100,000 shares shall be charged against the
applicable share limits under Section 4.2 with respect to such exercise.) Refer
to Section 8.10 for application of the foregoing share limits with respect to
assumed awards. The foregoing adjustments to the share limits of this Plan are
subject to any applicable limitations under Section 162(m) of the Code with
respect to awards intended as performance-based compensation thereunder.

 
 
4.4
Reservation of Shares; No Fractional Shares; Minimum Issue. The Corporation
shall at all times reserve a number of shares of Common Stock sufficient to
cover the Corporation’s obligations and contingent obligations to deliver shares
with respect to awards then outstanding under this Plan (exclusive of any
dividend equivalent obligations to the extent the Corporation has the right to
settle such rights in cash). No fractional shares shall be delivered under this
Plan. The Administrator may pay cash in lieu of any fractional shares in
settlements of awards under this Plan. No fewer than 100 shares may be purchased
on exercise of any award (or, in the case of stock appreciation or purchase
rights, no fewer than 100 rights may be exercised at any one time) unless the
total number purchased or exercised is the total number at the time available
for purchase or exercise under the award.

 

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5. AWARDS
 
 
5.1
Type and Form of Awards. The Administrator shall determine the type or types of
award(s) to be made to each selected Eligible Person. Awards may be granted
singly, in combination or in tandem. Awards also may be made in combination or
in tandem with, in replacement of, as alternatives to, or as the payment form
for grants or rights under any other employee or compensation plan of the
Corporation or one of its Subsidiaries. The types of awards that may be granted
under this Plan are (subject, in each case, to the no-repricing provisions of
Section 3.2):

5.1.1 Stock Options. A stock option is the grant of a right to purchase a
specified number of shares of Common Stock during a specified period as
determined by the Administrator. An option may be intended as an incentive stock
option within the meaning of Section 422 of the Code (an “ISO”) or a
nonqualified stock option (an option not intended to be an ISO). The award
agreement for an option will indicate if the option is intended as an ISO;
otherwise it will be deemed to be a nonqualified stock option. The maximum term
of each option (ISO or nonqualified) shall be ten (10) years. The per share
exercise price for each option shall be not less than 100% of the fair market
value of a share of Common Stock on the date of grant of the option. When an
option is exercised, the exercise price for the shares to be purchased shall be
paid in full in cash or such other method permitted by the Administrator
consistent with Section 5.5.
5.1.2 Additional Rules Applicable to ISOs. To the extent that the aggregate fair
market value (determined at the time of grant of the applicable option) of stock
with respect to which ISOs first become exercisable by a participant in any
calendar year exceeds $100,000, taking into account both Common Stock subject to
ISOs under this Plan and stock subject to ISOs under all other plans of the
Corporation or one of its Subsidiaries (or any parent or predecessor corporation
to the extent required by and within the meaning of Section 422 of the Code and
the regulations promulgated thereunder), such options shall be treated as
nonqualified stock options. In reducing the number of options treated as ISOs to
meet the $100,000 limit, the most recently granted options shall be reduced
first. To the extent a reduction of simultaneously granted options is necessary
to meet the $100,000 limit, the Administrator may, in the manner and to the
extent permitted by law, designate which shares of Common Stock are to be
treated as shares acquired pursuant to the exercise of an ISO. ISOs may only be
granted to employees of the Corporation or one of its subsidiaries (for this
purpose, the term “subsidiary” is used as defined in Section 424(f) of the Code,
which generally requires an unbroken chain of ownership of at least 50% of the
total combined voting power of all classes of stock of each subsidiary in the
chain beginning with the Corporation and ending with the subsidiary in
question). There shall be imposed in any award agreement relating to ISOs such
other terms and conditions as from time to time are required in order that the
option be an “incentive stock option” as that term is defined in Section 422 of
the Code. No ISO may be granted to any person who, at the time the option is
granted, owns (or is deemed to own under Section 424(d) of the Code) shares of
outstanding Common Stock possessing more than 10% of the total combined voting
power of all classes of stock of the Corporation, unless the exercise price of
such option is at least 110% of the fair market value of the stock subject to
the option and such option by its terms is not exercisable after the expiration
of five years from the date such option is granted.
5.1.3 Stock Appreciation Rights. A stock appreciation right or “SAR” is a right
to receive a payment, in cash and/or Common Stock, equal to the excess of the
fair market value of a specified number of shares of Common Stock on the date
the SAR is exercised over the fair market value of a share of Common Stock on
the date the SAR was granted (the “base price”) as set forth in the applicable
award agreement. The maximum term of an SAR shall be ten (10) years.
5.1.4 Other Awards; Dividend Equivalent Rights. The other types of awards that
may be granted under this Plan include: (a) stock bonuses, restricted stock,
performance stock, stock units, phantom stock or similar rights to purchase or
acquire shares, whether at a fixed or variable price or ratio related to the
Common Stock, upon the passage of time, the occurrence of one or more

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events, or the satisfaction of performance criteria or other conditions, or any
combination thereof; (b) any similar securities with a value derived from the
value of or related to the Common Stock and/or returns thereon; or (c) cash
awards. Dividend equivalent rights may be granted as a separate award or in
connection with another award under this Plan; provided, however, that dividend
equivalent rights may not be granted in connection with a stock option or SAR
granted under this Plan. In addition, any dividends and/or dividend equivalents
as to the unvested portion of a restricted stock award that is subject to
performance-based vesting requirements or the unvested portion of a stock unit
award that is subject to performance-based vesting requirements will be subject
to termination and forfeiture to the same extent as the corresponding portion of
the award to which they relate.
 
 
5.2
Section 162(m) Performance-Based Awards. Without limiting the generality of the
foregoing, any of the types of awards listed in Section 5.1.4 above may be
granted as awards intended to satisfy the requirements for “performance-based
compensation” within the meaning of Section 162(m) of the Code
(“Performance-Based Awards”). The grant, vesting, exercisability or payment of
Performance-Based Awards may depend (or, in the case of stock options and SARs,
may also depend) on the degree of achievement of one or more performance goals
relative to a pre-established targeted level using one or more of the Business
Criteria set forth below (on an absolute or relative basis) for the Corporation
on a consolidated basis or for one or more of the Corporation’s subsidiaries,
segments, divisions or business units, or any combination of the foregoing. Any
stock option or SAR intended as a Performance-Based Award shall be subject only
to the requirements of Section 5.2.1 and 5.2.3 in order for such award to
satisfy the requirements for “performance-based compensation” under
Section 162(m) of the Code. Any other Performance-Based Award shall be subject
to all of the following provisions of this Section 5.2.

5.2.1 Class; Administrator. The eligible class of persons for Performance-Based
Awards under this Section 5.2 shall be officers and employees of the Corporation
or one of its Subsidiaries. The Administrator approving Performance-Based Awards
or making any certification required pursuant to Section 5.2.4 must be
constituted as provided in Section 3.1 for awards that are intended as
performance-based compensation under Section 162(m) of the Code.
5.2.2 Performance Goals. The specific performance goals for Performance-Based
Awards (other than stock options or SARs intended as a Performance-Based Award)
shall be, on an absolute or relative basis, established based on one or more of
the following business criteria (“Business Criteria”) as selected by the
Administrator in its sole discretion: earnings per share, cash flow (which means
cash and cash equivalents derived from either net cash flow from operations or
net cash flow from operations, financing and investing activities), total
stockholder return, gross revenue, revenue growth, operating income (before or
after taxes), net earnings (before or after interest, taxes, depreciation and/or
amortization), return on equity or on assets or on net investment, cost
containment or reduction, the fair market value of a share of Common Stock, or
any combination thereof. These terms are used as applied under generally
accepted accounting principles or in the financial reporting of the Corporation
or of its Subsidiaries. To qualify awards as performance-based under
Section 162(m), the applicable Business Criterion (or Business Criteria, as the
case may be) and specific performance goal or goals (“targets”) must be
established and approved by the Administrator during the first 90 days of the
performance period (and, in the case of performance periods of less than one
year, in no event after 25% or more of the performance period has elapsed) and
while performance relating to such target(s) remains substantially uncertain
within the meaning of Section 162(m) of the Code. The terms of the
Performance-Based Awards may specify the manner, if any, in which performance
targets shall be adjusted to mitigate the unbudgeted impact of material, unusual
or nonrecurring gains and losses, accounting changes or other items specified by
the Administrator at the time of establishing the targets. The applicable
performance measurement period may not be less than three months nor more than
10 years.
5.2.3 Form of Payment; Maximum Performance-Based Award. Grants or awards under
this Section 5.2 may be paid in cash or shares of Common Stock or any
combination thereof. Grants of

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Qualifying Options and Qualifying SARs to any one participant in any one
calendar year shall be subject to the limit set forth in Section 4.2(b). The
maximum number of shares of Common Stock which may be subject to
Performance-Based Awards (including Performance-Based Awards payable in shares
of Common Stock and Performance-Based Awards payable in cash where the amount of
cash payable upon or following vesting of the award is determined with reference
to the fair market value of a share of Common Stock at such time) that are
granted to any one participant in any one calendar year shall not exceed
4,000,000 shares (counting such shares on a one-for-one basis for this purpose),
either individually or in the aggregate, subject to adjustment as provided in
Section 7.1; provided that this limit shall not apply to Qualifying Options and
Qualifying SARs (which are covered by the limit of Section 4.2(b)). The
aggregate amount of compensation to be paid to any one participant in respect of
all Performance-Based Awards payable only in cash (excluding cash awards covered
by the preceding sentence where the cash payment is determined with reference to
the fair market value of a share of Common Stock upon
or following the vesting of the award) and granted to that participant in any
one calendar year shall not exceed $5,000,000. Awards that are cancelled during
the year shall be counted against these limits to the extent required by
Section 162(m) of the Code.
5.2.4 Certification of Payment. Before any Performance-Based Award under this
Section 5.2 (other than stock options and SARs) is paid and to the extent
required to qualify the award as performance-based compensation within the
meaning of Section 162(m) of the Code, the Administrator must certify in writing
that the performance target(s) and any other material terms of the
Performance-Based Award were in fact timely satisfied.
5.2.5 Reservation of Discretion. The Administrator will have the discretion to
determine the restrictions or other limitations of the individual awards granted
under this Section 5.2 including the authority to reduce awards, payouts or
vesting or to pay no awards, in its sole discretion, if the Administrator
preserves such authority at the time of grant by language to this effect in its
authorizing resolutions or otherwise.
5.2.6 Expiration of Grant Authority. As required pursuant to Section 162(m) of
the Code and the regulations promulgated thereunder, the Administrator’s
authority to grant new awards that are intended to qualify as performance-based
compensation within the meaning of Section 162(m) of the Code (other than stock
options and SARs) shall terminate upon the first meeting of the Corporation’s
stockholders that occurs in the fifth year following the year in which the
Corporation’s stockholders first approve this Plan, subject to any subsequent
extension that may be approved by stockholders.
 
 
5.3
Award Agreements. Each award shall be evidenced by either (1) a written award
agreement in a form approved by the Administrator and executed by the
Corporation by an officer duly authorized to act on its behalf, or (2) an
electronic notice of award grant in a form approved by the Administrator and
recorded by the Corporation (or its designee) in an electronic recordkeeping
system used for the purpose of tracking award grants under this Plan generally
(in each case, an “award agreement”), as the Administrator may provide and, in
each case and if required by the Administrator, executed or otherwise
electronically accepted by the recipient of the award in such form and manner as
the Administrator may require. The Administrator may authorize any officer of
the Corporation (other than the particular award recipient) to execute any or
all award agreements on behalf of the Corporation. The award agreement shall set
forth the material terms and conditions of the award as established by the
Administrator consistent with the express limitations of this Plan.

 

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5.4
Deferrals and Settlements. Payment of awards may be in the form of cash, Common
Stock, other awards or combinations thereof as the Administrator shall
determine, and with such restrictions as it may impose. The Administrator may
also permit participants to elect to defer the issuance of shares or the
settlement of awards in cash under such rules and procedures as it may establish
under this Plan. The Administrator may also provide that deferred settlements
include the payment or crediting of interest or other earnings on the deferral
amounts, or the payment or crediting of dividend equivalents where the deferred
amounts are denominated in shares.

 
 
5.5
Consideration for Common Stock or Awards. The purchase price for any award
granted under this Plan or the Common Stock to be delivered pursuant to an
award, as applicable, may be paid by means of any lawful consideration as
determined by the Administrator, including, without limitation, one or a
combination of the following methods:

 
 
•
 
services rendered by the recipient of such award;

 
 
•
 
cash, check payable to the order of the Corporation, or electronic funds
transfer;

 
 
•
 
notice and third party payment in such manner as may be authorized by the
Administrator;

 
 
•
 
the delivery of previously owned shares of Common Stock;

 
 
•
 
by a reduction in the number of shares otherwise deliverable pursuant to the
award; or

 
 
•
 
subject to such procedures as the Administrator may adopt, pursuant to a
“cashless exercise” with a third party who provides financing for the purposes
of (or who otherwise facilitates) the purchase or exercise of awards.

In no event shall any shares newly-issued by the Corporation be issued for less
than the minimum lawful consideration for such shares or for consideration other
than consideration permitted by applicable state law. In the event that the
Administrator allows a participant to exercise an award by delivering shares of
Common Stock previously owned by such participant and unless otherwise expressly
provided by the Administrator, any shares delivered which were initially
acquired by the participant from the Corporation (upon exercise of a stock
option or otherwise) must have been owned by the participant at least six months
as of the date of delivery. Shares of Common Stock used to satisfy the exercise
price of an option shall be valued at their fair market value on the date of
exercise. The Corporation will not be obligated to deliver any shares unless and
until it receives full payment of the exercise or purchase price therefor and
any related withholding obligations under Section 8.5 and any other conditions
to exercise or purchase have been satisfied. Unless otherwise expressly provided
in the applicable award agreement, the Administrator may at any time eliminate
or limit a participant’s ability to pay the purchase or exercise price of any
award or shares by any method other than cash payment to the Corporation.
 

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5.6
Definition of Fair Market Value. For purposes of this Plan, “fair market value”
shall mean, unless otherwise determined or provided by the Administrator in the
circumstances, the closing price (in regular trading) for a share of Common
Stock on the NASDAQ Stock Market (the “Market”) for the date in question or, if
no sales of Common Stock were reported on the Market on that date, the closing
price (in regular trading) for a share of Common Stock on the Market for the
next preceding day on which sales of Common Stock were reported on the
Market. The Administrator may, however, provide with respect to one or more
awards that the fair market value shall equal the closing price (in regular
trading) for a share of Common Stock on the Market on the last trading day
preceding the date in question or the average of the high and low trading prices
of a share of Common Stock on the Market for the date in question or the most
recent trading day. If the Common Stock is no longer listed or is no longer
actively traded on the Market as of the applicable date, the fair market value
of the Common Stock shall be the value as reasonably determined by the
Administrator for purposes of the award in the circumstances. The Administrator
also may adopt a different methodology for determining fair market value with
respect to one or more awards if a different methodology is necessary or
advisable to secure any intended favorable tax, legal or other treatment for the
particular award(s) (for example, and without limitation, the Administrator may
provide that fair market value for purposes of one or more awards will be based
on an average of closing prices (or the average of high and low daily trading
prices) for a specified period preceding the relevant date).

 
 
5.7
Transfer Restrictions.

5.7.1 Limitations on Exercise and Transfer. Unless otherwise expressly provided
in (or pursuant to) this Section 5.7 or required by applicable law, (a) all
awards are non-transferable and shall not be subject in any manner to sale,
transfer, anticipation, alienation, assignment, pledge, encumbrance or charge;
(b) awards shall be exercised only by the participant; and (c) amounts payable
or shares issuable pursuant to any award shall be delivered only to (or for the
account of) the participant.
5.7.2 Exceptions. The Administrator may permit awards to be exercised by and
paid to, or otherwise transferred to, other persons or entities pursuant to such
conditions and procedures, including limitations on subsequent transfers, as the
Administrator may, in its sole discretion, establish in writing. Any permitted
transfer shall be subject to compliance with applicable federal and state
securities laws and shall not be for value (other than nominal consideration,
settlement of marital property rights, or for interests in an entity in which
more than 50% of the voting interests are held by the Eligible Person or by the
Eligible Person’s family members).
 
5.7.3 Further Exceptions to Limits on Transfer. The exercise and transfer
restrictions in Section 5.7.1 shall not apply to:
 
 
(a)
transfers to the Corporation,

 
 
(b)
the designation of a beneficiary to receive benefits in the event of the
participant’s death or, if the participant has died, transfers to or exercise by
the participant’s beneficiary, or, in the absence of a validly designated
beneficiary, transfers by will or the laws of descent and distribution,

 
 
(c)
subject to any applicable limitations on ISOs and subject to such rules as the
Administrator may adopt, transfers to a family member (or former family member)
pursuant to a domestic relations order,

 
 
(d)
if the participant has suffered a disability, permitted transfers or exercises
on behalf of the participant by his or her legal representative, or

 

--------------------------------------------------------------------------------

 
(e)
the authorization by the Administrator of “cashless exercise” procedures with
third parties who provide financing for the purpose of (or who otherwise
facilitate) the exercise of awards consistent with applicable laws and the
express authorization of the Administrator.

 
 
5.8
International Awards. One or more awards may be granted to Eligible Persons who
provide services to the Corporation or one of its Subsidiaries outside of the
United States. Any awards granted to such persons may be granted pursuant to the
terms and conditions of any applicable sub-plans, if any, appended to this Plan
and approved by the Administrator.

6. EFFECT OF TERMINATION OF SERVICE ON AWARDS
 
 
6.1
General. The Administrator shall establish the effect of a termination of
employment or service on the rights and benefits under each award under this
Plan and in so doing may make distinctions based upon, inter alia, the cause of
termination and type of award. If the participant is not an employee of the
Corporation or one of its Subsidiaries and provides other services to the
Corporation or one of its Subsidiaries, the Administrator shall be the sole
judge for purposes of this Plan (unless a contract or the award otherwise
provides) of whether the participant continues to render services to the
Corporation or one of its Subsidiaries and the date, if any, upon which such
services shall be deemed to have terminated.

 
 
6.2
Events Not Deemed Terminations of Service. Unless the express policy of the
Corporation or one of its Subsidiaries, or the Administrator, otherwise
provides, the employment relationship shall not be considered terminated in the
case of (a) sick leave, (b) military leave, or (c) any other leave of absence
authorized by the Corporation or one of its Subsidiaries, or the Administrator;
provided that, unless reemployment upon the expiration of such leave is
guaranteed by contract or law or the Administrator otherwise provides, such
leave is for a period of not more than three months. In the case of any employee
of the Corporation or one of its Subsidiaries on an approved leave of absence,
continued vesting of the award while on leave from the employ of the Corporation
or one of its Subsidiaries may be suspended until the employee returns to
service, unless the Administrator otherwise provides or applicable law otherwise
requires. In no event shall an award be exercised after the expiration of the
term set forth in the award agreement.

 
 
6.3
Effect of Change of Subsidiary Status. For purposes of this Plan and any award,
if an entity ceases to be a Subsidiary of the Corporation a termination of
employment or service shall be deemed to have occurred with respect to each
Eligible Person in respect of such Subsidiary who does not continue as an
Eligible Person in respect of the Corporation or another Subsidiary that
continues as such after giving effect to the transaction or other event giving
rise to the change in status unless the Subsidiary that is sold, spun-off or
otherwise divested (or its successor or a direct or indirect parent of such
Subsidiary or successor) assumes the Eligible Person’s award(s) in connection
with such transaction.

 

7. ADJUSTMENTS; ACCELERATION
 

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7.1
Adjustments. Subject to Section 7.2, upon (or, as may be necessary to effect the
adjustment, immediately prior to): any reclassification, recapitalization, stock
split (including a stock split in the form of a stock dividend) or reverse stock
split; any merger, combination, consolidation, conversion or other
reorganization; any spin-off, split-up, or similar extraordinary dividend
distribution in respect of the Common Stock; or any exchange of Common Stock or
other securities of the Corporation, or any similar, unusual or extraordinary
corporate transaction in respect of the Common Stock; then the Administrator
shall equitably and proportionately adjust (1) the number and type of shares of
Common Stock (or other securities) that thereafter may be made the subject of
awards (including the specific share limits, maximums and numbers of shares set
forth elsewhere in this Plan), (2) the number, amount and type of shares of
Common Stock (or other securities or property) subject to any outstanding
awards, (3) the grant, purchase, or exercise price (which term includes the base
price of any SAR or similar right) of any outstanding awards, and/or (4) the
securities, cash or other property deliverable upon exercise or payment of any
outstanding awards, in each case to the extent necessary to preserve (but not
increase) the level of incentives intended by this Plan and the then-outstanding
awards.

Unless otherwise expressly provided in the applicable award agreement, upon (or,
as may be necessary to effect the adjustment, immediately prior to) any event or
transaction described in the preceding paragraph or a sale of all or
substantially all of the business or assets of the Corporation as an entirety,
the Administrator shall equitably and proportionately adjust the performance
standards applicable to any then-outstanding performance-based awards to the
extent necessary to preserve (but not increase) the level of incentives intended
by this Plan and the then-outstanding performance-based awards.
It is intended that, if possible, any adjustments contemplated by the preceding
two paragraphs be made in a manner that satisfies applicable U.S. legal, tax
(including, without limitation and as applicable in the circumstances,
Section 424 of the Code, Section 409A of the Code and Section 162(m) of the
Code) and accounting (so as to not trigger any charge to earnings with respect
to such adjustment) requirements.
Without limiting the generality of Section 3.3, any good faith determination by
the Administrator as to whether an adjustment is required in the circumstances
pursuant to this Section 7.1, and the extent and nature of any such adjustment,
shall be conclusive and binding on all persons.
 

--------------------------------------------------------------------------------

 
7.2
Corporate Transactions - Assumption and Termination of Awards. Upon the
occurrence of any of the following: any merger, combination, consolidation,
conversion or other reorganization in connection with which the Corporation does
not survive (or does not survive as a public company in respect of its Common
Stock); any exchange of Common Stock or other securities of the Corporation in
connection with which the Corporation does not survive (or does not survive as a
public company in respect of its Common Stock); a sale of all or substantially
all the business, stock or assets of the Corporation in connection with which
the Corporation does not survive (or does not survive as a public company in
respect of its Common Stock); a dissolution of the Corporation; or any other
event in which the Corporation does not survive (or does not survive as a public
company in respect of its Common Stock); then the Administrator may make
provision for a cash payment in settlement of, or for the termination,
assumption, substitution or exchange of any or all outstanding share-based
awards or the cash, securities or property deliverable to the holder of any or
all outstanding share-based awards, based upon, to the extent relevant under the
circumstances, the distribution or consideration payable to holders of the
Common Stock upon or in respect of such event. Upon the occurrence of any event
described in the preceding sentence, then, unless the Administrator has made a
provision for the substitution, assumption, exchange or other continuation or
settlement of the award or the award would otherwise continue in accordance with
its terms in the circumstances: (1) unless otherwise provided in the applicable
award agreement, each then-outstanding option and SAR shall become fully vested,
all shares of restricted stock then outstanding shall fully vest free of
restrictions, and each other award granted under this Plan that is then
outstanding shall become payable to the holder of such award; and (2) each award
shall terminate upon the related event; provided that the holder of an option or
SAR shall be given reasonable advance notice of the impending termination and a
reasonable opportunity to exercise his or her outstanding vested options and
SARs (after giving effect to any accelerated vesting required in the
circumstances) in accordance with their terms before the termination of such
awards (except that in no case shall more than ten days’ notice of the impending
termination be required and any acceleration of vesting and any exercise of any
portion of an award that is so accelerated may be made contingent upon the
actual occurrence of the event).

 
Without limiting the preceding paragraph, in connection with any event referred
to in the preceding paragraph or any change in control event defined in any
applicable award agreement, the Administrator may, in its discretion, provide
for the accelerated vesting of any award or awards as and to the extent
determined by the Administrator in the circumstances.
The Administrator may adopt such valuation methodologies for outstanding awards
as it deems reasonable in the event of a cash or property settlement and, in the
case of options, SARs or similar rights, but without limitation on other
methodologies, may base such settlement solely upon the excess if any of the per
share amount payable upon or in respect of such event over the exercise or base
price of the award.
In any of the events referred to in this Section 7.2, the Administrator may take
such action contemplated by this Section 7.2 prior to such event (as opposed to
on the occurrence of such event) to the extent that the Administrator deems the
action necessary to permit the participant to realize the benefits intended to
be conveyed with respect to the underlying shares. Without limiting the
generality of the foregoing, the Administrator may deem an acceleration and/or
termination to occur immediately prior to the applicable event and, in such
circumstances, will reinstate the original terms of the award if an event giving
rise to an acceleration and/or termination does not occur.
Without limiting the generality of Section 3.3, any good faith determination by
the Administrator pursuant to its authority under this Section 7.2 shall be
conclusive and binding on all persons.
 

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7.3
Other Acceleration Rules. The Administrator may override the provisions of
Section 7.2 by express provision in the award agreement and may accord any
Eligible Person a right to refuse any acceleration, whether pursuant to the
award agreement or otherwise, in such circumstances as the Administrator may
approve. The portion of any ISO accelerated in connection with an event referred
to in Section 7.2 (or such other circumstances as may trigger accelerated
vesting of the award) shall remain exercisable as an ISO only to the extent the
applicable $100,000 limitation on ISOs is not exceeded. To the extent exceeded,
the accelerated portion of the option shall be exercisable as a nonqualified
stock option under the Code.

8. OTHER PROVISIONS
 
 
8.1
Compliance with Laws. This Plan, the granting and vesting of awards under this
Plan, the offer, issuance and delivery of shares of Common Stock, the acceptance
of promissory notes and/or the payment of money under this Plan or under awards
are subject to compliance with all applicable federal and state laws, rules and
regulations (including but not limited to state and federal securities law,
federal margin requirements) and to such approvals by any listing, regulatory or
governmental authority as may, in the opinion of counsel for the Corporation, be
necessary or advisable in connection therewith. The person acquiring any
securities under this Plan will, if requested by the Corporation or one of its
Subsidiaries, provide such assurances and representations to the Corporation or
one of its Subsidiaries as the Administrator may deem necessary or desirable to
assure compliance with all applicable legal and accounting requirements.

 
 
8.2
No Rights to Award. No person shall have any claim or rights to be granted an
award (or additional awards, as the case may be) under this Plan, subject to any
express contractual rights (set forth in a document other than this Plan) to the
contrary.

 
 
8.3
No Employment/Service Contract. Nothing contained in this Plan (or in any other
documents under this Plan or in any award) shall confer upon any Eligible Person
or other participant any right to continue in the employ or other service of the
Corporation or one of its Subsidiaries, constitute any contract or agreement of
employment or other service or affect an employee’s status as an employee at
will, nor shall interfere in any way with the right of the Corporation or one of
its Subsidiaries to change a person’s compensation or other benefits, or to
terminate his or her employment or other service, with or without cause. Nothing
in this Section 8.3, however, is intended to adversely affect any express
independent right of such person under a separate employment or service contract
other than an award agreement.

 

 
8.4
Plan Not Funded. Awards payable under this Plan shall be payable in shares or
from the general assets of the Corporation, and no special or separate reserve,
fund or deposit shall be made to assure payment of such awards. No participant,
beneficiary or other person shall have any right, title or interest in any fund
or in any specific asset (including shares of Common Stock, except as expressly
otherwise provided) of the Corporation or one of its Subsidiaries by reason of
any award hereunder. Neither the provisions of this Plan (or of any related
documents), nor the creation or adoption of this Plan, nor any action taken
pursuant to the provisions of this Plan shall create, or be construed to create,
a trust of any kind or a fiduciary relationship between the Corporation or one
of its Subsidiaries and any participant, beneficiary or other person. To the
extent that a participant, beneficiary or other person acquires a right to
receive payment pursuant to any award hereunder, such right shall be no greater
than the right of any unsecured general creditor of the Corporation.

 

--------------------------------------------------------------------------------

 
8.5
Tax Withholding. Upon any exercise, vesting, or payment of any award or upon the
disposition of shares of Common Stock acquired pursuant to the exercise of an
ISO prior to satisfaction of the holding period requirements of Section 422 of
the Code, or upon any other tax withholding event with respect to an award, the
Corporation or one of its Subsidiaries shall have the right at its option to:

 
 
(a)
require the participant (or the participant’s personal representative or
beneficiary, as the case may be) to pay or provide for payment of at least the
minimum amount of any taxes which the Corporation or one of its Subsidiaries may
be required to withhold with respect to such award event or payment; or

 
 
(b)
deduct from any amount otherwise payable in cash (whether related to the award
or otherwise) to the participant (or the participant’s personal representative
or beneficiary, as the case may be) the minimum amount of any taxes which the
Corporation or one of its Subsidiaries may be required to withhold with respect
to such award event or payment.

In any case where a tax is required to be withheld in connection with the
delivery of shares of Common Stock under this Plan, the Administrator may in its
sole discretion (subject to Section 8.1) require or grant (either at the time of
the award or thereafter) to the participant the right to elect, pursuant to such
rules and subject to such conditions as the Administrator may establish, that
the Corporation reduce the number of shares to be delivered by (or otherwise
reacquire) the appropriate number of shares, valued in a consistent manner at
their fair market value or at the sales price in accordance with authorized
procedures for cashless exercises, necessary to satisfy the minimum applicable
withholding obligation on exercise, vesting or payment. In no event shall the
shares withheld exceed the minimum whole number of shares required for tax
withholding under applicable law. The Corporation may, with the Administrator’s
approval, accept one or more promissory notes from any Eligible Person in
connection with taxes required to be withheld upon the exercise, vesting or
payment of any award under this Plan; provided that any such note shall be
subject to terms and conditions established by the Administrator and the
requirements of applicable law.
 
 
8.6
Effective Date, Termination and Suspension, Amendments.

8.6.1 Effective Date. This Plan originally became effective as of June 9, 2005,
the date of its approval by the Board of Directors of QLogic Corporation (the
“Effective Date”) and was approved by the stockholders of QLogic Corporation on
August 23, 2005. This Plan was assumed by Cavium, Inc. as of the Plan Assumption
Date in connection with its acquisition of QLogic Corporation. Unless earlier
terminated by the Board of Directors or Compensation Committee of Cavium, Inc.,
this Plan shall terminate at the close of business on July 10, 2024. After the
termination of this Plan either upon such stated expiration date or its earlier
termination by the Board, no additional awards may be granted under this Plan,
but previously granted awards (and the authority of the Administrator with
respect thereto, including the authority to amend such awards) shall remain
outstanding in accordance with their applicable terms and conditions and the
terms and conditions of this Plan.
8.6.2 Board Authorization. The Board may, at any time, terminate or, from time
to time, amend, modify or suspend this Plan, in whole or in part. No awards may
be granted during any period that the Board suspends this Plan.
 
8.6.3 Stockholder Approval. To the extent then required by applicable law or any
applicable listing agency or required under Sections 162, 422 or 424 of the Code
to preserve the intended tax consequences of this Plan, or deemed necessary or
advisable by the Board, any amendment to this Plan shall be subject to
stockholder approval.

--------------------------------------------------------------------------------

8.6.4 Amendments to Awards. Without limiting any other express authority of the
Administrator under (but subject to) the express limits of this Plan, the
Administrator by agreement or resolution may waive conditions of or limitations
on awards to participants that the Administrator in the prior exercise of its
discretion has imposed, without the consent of a participant, and (subject to
the requirements of Sections 3.2 and 8.6.5) may make other changes to the terms
and conditions of awards. Any amendment or other action that would constitute a
repricing of an award is subject to the limitations set forth in Section 3.2.
8.6.5 Limitations on Amendments to Plan and Awards. No amendment, suspension or
termination of this Plan or amendment of any outstanding award agreement shall,
without written consent of the participant, affect in any manner materially
adverse to the participant any rights or benefits of the participant or
obligations of the Corporation under any award granted under this Plan prior to
the effective date of such change. Changes, settlements and other actions
contemplated by Section 7 shall not be deemed to constitute changes or
amendments for purposes of this Section 8.6.
 
 
8.7
Privileges of Stock Ownership. Except as otherwise expressly authorized by the
Administrator or this Plan, a participant shall not be entitled to any privilege
of stock ownership as to any shares of Common Stock not actually delivered to
and held of record by the participant. No adjustment will be made for dividends
or other rights as a stockholder for which a record date is prior to such date
of delivery.

 
 
8.8
Governing Law; Construction; Severability.

8.8.1 Choice of Law. This Plan, the awards, all documents evidencing awards and
all other related documents shall be governed by, and construed in accordance
with the laws of the State of Delaware.
8.8.2 Severability. If a court of competent jurisdiction holds any provision
invalid and unenforceable, the remaining provisions of this Plan shall continue
in effect.
8.8.3 Plan Construction.
 
 
(a)
Rule 16b-3. It is the intent of the Corporation that the awards and transactions
permitted by awards be interpreted in a manner that, in the case of participants
who are or may be subject to Section 16 of the Exchange Act, qualify, to the
maximum extent compatible with the express terms of the award, for exemption
from matching liability under Rule 16b-3 promulgated under the Exchange Act.
Notwithstanding the foregoing, the Corporation shall have no liability to any
participant for Section 16 consequences of awards or events under awards if an
award or event does not so qualify.

 
 
(b)
Section 162(m). Awards under Section 5.1.4 to persons described in Section 5.2
that are either granted or become vested, exercisable or payable based on
attainment of one or more performance goals related to the Business Criteria, as
well as stock options and SARs intended as Performance-Based Awards granted to
persons described in Section 5.2, that are approved by a committee composed
solely of two or more outside directors (as this requirement is applied under
Section 162(m) of the Code) shall be deemed to be intended as performance-based
compensation within the meaning of Section 162(m) of the Code unless such
committee provides otherwise at the time of grant of the award. It is the
further intent of the Corporation that (to the extent the Corporation or one of
its Subsidiaries or awards under this Plan may be or become subject to
limitations on deductibility under Section 162(m) of the Code) any such awards
and any other Performance-Based Awards under Section 5.2 that are granted to or
held by a person subject to Section 162(m) will qualify as performance-based
compensation or otherwise be exempt from deductibility limitations under
Section 162(m).

 

--------------------------------------------------------------------------------

 
8.9
Captions. Captions and headings are given to the sections and subsections of
this Plan solely as a convenience to facilitate reference. Such headings shall
not be deemed in any way material or relevant to the construction or
interpretation of this Plan or any provision thereof.

 
 
8.10
Stock-Based Awards in Substitution for Stock Options or Awards Granted by Other
Corporation. Awards may be granted to Eligible Persons in substitution for or in
connection with an assumption of employee stock options, SARs, restricted stock
or other stock-based awards granted by other entities to persons who are or who
will become Eligible Persons in respect of the Corporation or one of its
Subsidiaries, in connection with a distribution, merger or other reorganization
by or with the granting entity or an affiliated entity, or the acquisition by
the Corporation or one of its Subsidiaries, directly or indirectly, of all or a
substantial part of the stock or assets of the employing entity. The awards so
granted need not comply with other specific terms of this Plan, provided the
awards reflect only adjustments giving effect to the assumption or substitution
consistent with the conversion applicable to the Common Stock in the transaction
and any change in the issuer of the security. Any shares that are delivered and
any awards that are granted by, or become obligations of, the Corporation, as a
result of the assumption by the Corporation of, or in substitution for,
outstanding awards previously granted by an acquired company (or previously
granted by a predecessor employer (or direct or indirect parent thereof) in the
case of persons that become employed by the Corporation or one of its
Subsidiaries in connection with a business or asset acquisition or similar
transaction) shall not be counted against the Share Limit or other limits on the
number of shares available for issuance under this Plan.

 
 
8.11
Non-Exclusivity of Plan. Nothing in this Plan shall limit or be deemed to limit
the authority of the Board or the Administrator to grant awards or authorize any
other compensation, with or without reference to the Common Stock, under any
other plan or authority.

 
 
8.12
No Corporate Action Restriction. The existence of this Plan, the award
agreements and the awards granted hereunder shall not limit, affect or restrict
in any way the right or power of the Board or the stockholders of the
Corporation to make or authorize: (a) any adjustment, recapitalization,
reorganization or other change in the capital structure or business of the
Corporation or any Subsidiary, (b) any merger, amalgamation, consolidation or
change in the ownership of the Corporation or any Subsidiary, (c) any issue of
bonds, debentures, capital, preferred or prior preference stock ahead of or
affecting the capital stock (or the rights thereof) of the Corporation or any
Subsidiary, (d) any dissolution or liquidation of the Corporation or any
Subsidiary, (e) any sale or transfer of all or any part of the assets or
business of the Corporation or any Subsidiary, or (f) any other corporate act or
proceeding by the Corporation or any Subsidiary. No participant, beneficiary or
any other person shall have any claim under any award or award agreement against
any member of the Board or the Administrator, or the Corporation or any
employees, officers or agents of the Corporation or any Subsidiary, as a result
of any such action.

 
 
8.13
Other Company Benefit and Compensation Programs. Payments and other benefits
received by a participant under an award made pursuant to this Plan shall not be
deemed a part of a participant’s compensation for purposes of the determination
of benefits under any other employee welfare or benefit plans or arrangements,
if any, provided by the Corporation or any Subsidiary, except where the
Administrator expressly otherwise provides or authorizes in writing. Awards
under this Plan may be made in addition to, in combination with, as alternatives
to or in payment of grants, awards or commitments under any other plans or
arrangements of the Corporation or its Subsidiaries.

 

--------------------------------------------------------------------------------

 
8.14
Clawback Policy. The awards granted under this Plan are subject to the terms of
the Corporation’s recoupment, clawback or similar policy as it may be in effect
from time to time, as well as any similar provisions of applicable law, any of
which could in certain circumstances require repayment or forfeiture of awards
or any shares of Common Stock or other cash or property received with respect to
the awards (including any value received from a disposition of the shares
acquired upon payment of the awards).

 

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CAVIUM, INC.
QLOGIC CORPORATION 2005 PERFORMANCE INCENTIVE PLAN
(AS ASSUMED BY CAVIUM, INC. ON AUGUST 16, 2016)
OPTION GRANT NOTICE
Cavium, Inc. (the “Company”) hereby grants to Participant an Option under the
QLogic Corporation 2005 Performance Incentive Plan (the “Plan”), as assumed by
the Company on August 16, 2016, to purchase the number of shares of Common Stock
of the Company (the “Shares”) set forth below at the exercise price set forth
below.  This Option is subject to all of the terms and conditions set forth in
this Option Grant Notice (the “Grant Notice”) and in the Option Agreement (the
“Agreement”) and the Plan, both of which are attached hereto and incorporated
herein in their entirety.  Capitalized terms not explicitly defined in this
Grant Notice but defined in the Plan or the Agreement will have the same
definitions as in the Plan or the Agreement.
 
 
 
Participant:
 
Option Number:
 
Date of Grant:
 
Vesting Commencement Date:
 
Number of Shares Subject to Option:
 
Exercise Price (Per Share):
 
Total Exercise Price:
 
Expiration Date:
 

 
 
 
 
 
 
Type of Grant:
☐
Incentive Stock Option
☐
Nonstatutory Stock Option

 
Exercise Schedule:
 
Same as Vesting Schedule
 
 
 
Vesting Schedule:
 
Subject to Section 1 of the Agreement, this Option will vest as follows:
_____________.

 
Payment:
 
By one or a combination of the following items (as described in the Agreement):
 
☒
By cash, check, bank draft or money order payable to the Company

Additional Terms/Acknowledgements: Participant acknowledges receipt of, and
understands and agrees to, this Grant Notice, the Agreement, the Plan and the
prospectus for the Plan.  Participant further acknowledges that as of the Date
of Grant, this Grant Notice, the Agreement and the Plan set forth the entire
understanding between Participant and the Company regarding this Option and
supersede all prior oral and written agreements, promises and/or representations
regarding this Option, with the exception, if applicable, of (i) any written
employment, offer letter or severance agreement, or any written severance plan
or policy specifying the terms that should govern this Option and (ii) the
Company’s Stock Ownership Guidelines.  By accepting this Option, Participant
consents to receive this Grant Notice, the Agreement, the Plan, the prospectus
for the Plan and any other Plan-related documents by electronic delivery and to
participate in the Plan through an on-line or electronic system established and
maintained by the Company or another third party designated by the
Company.  Participant’s acceptance of this

--------------------------------------------------------------------------------

Option, and Participant’s acknowledgement and agreement with the terms set forth
in this paragraph, will be evidenced by Participant’s signature below or by
electronic acceptance or authentication in a form authorized by the Company.
 
☒
Pursuant to a Regulation T Program if the Common Stock is publicly traded

 
☒
By delivery of already-owned Shares if the Common Stock is publicly traded

 
☒
If and only to the extent this Option is a Nonstatutory Stock Option, and
subject to the Company’s consent at the time of exercise, by a “net exercise”
arrangement

 
 
Cavium, Inc.
 
Participant
 
 
 
 
 
 
 
By:
 
 
 
 
 
 
 
 
Signature
 
Signature
Title:
 
 
 
Date:
 
 
Date:
 
 
 
 
 
 

 
ATTACHMENTS:  Option Agreement, QLogic Corporation 2005 Performance Incentive
Plan, Prospectus
 

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CAVIUM, INC.
QLOGIC CORPORATION 2005 PERFORMANCE INCENTIVE PLAN
(AS ASSUMED BY CAVIUM, INC. ON AUGUST 16, 2016)
OPTION AGREEMENT
(INCENTIVE STOCK OPTION OR NONSTATUTORY STOCK OPTION)
Pursuant to the accompanying Option Grant Notice (the “Grant Notice”) and this
Option Agreement (the “Agreement”), Cavium, Inc. (the “Company”) has granted you
an Option under the QLogic Corporation 2005 Performance Incentive Plan (the
“Plan”) to purchase the number of shares of Company Common Stock set forth in
the Grant Notice at the exercise price set forth in the Grant Notice.  This
Option is granted to you effective as of the date of grant set forth in the
Grant Notice (the “Date of Grant”).  Capitalized terms not explicitly defined in
this Agreement but defined in the Plan or the Grant Notice will have the same
definitions as in the Plan or the Grant Notice.  Certain capitalized terms used
in this Agreement are defined in Section 21 of this Agreement.
1. VESTING.  This Option will vest, if at all, in accordance with the vesting
schedule set forth in the Grant Notice, provided that vesting will cease upon
the termination of your continued employment or service with the Company or a
Subsidiary thereof (“Continuous Service”).  A change in the capacity of your
employment or service (e.g., from employee to consultant) without a break in
service will not constitute a termination of your Continuous Service for
purposes of this Option.
2. NUMBER OF SHARES AND EXERCISE PRICE.  The number of shares of Common Stock
subject to this Option and the exercise price per share of this Option, each as
set forth in the Grant Notice, will be adjusted for capitalization adjustments,
if any, as provided in Section 7.1 of the Plan.
3. EXERCISE RESTRICTION FOR NON-EXEMPT EMPLOYEES.  If you are an employee
eligible for overtime compensation under the Fair Labor Standards Act of 1938,
as amended (that is, a “Non-Exempt Employee”), then except as otherwise provided
in the Plan, you may not exercise this Option until you have completed at least
six months of Continuous Service following the Date of Grant, even if you have
already been an employee for more than six months.  Consistent with the
provisions of the Worker Economic Opportunity Act, you may exercise this Option
as to any vested portion earlier than six months following the Date of Grant in
the case of (i) your death or Disability, (ii) a Corporate Transaction in which
this Option is not assumed, continued or substituted, or (iii) your “retirement”
(as defined in a written agreement between you and the Company or a Subsidiary,
or, if no such definition, in accordance with the Company’s then current
employment policies and guidelines).
4. METHOD OF PAYMENT.  You must pay the full amount of the exercise price for
the shares of Common Stock you wish to purchase.  You may pay the exercise price
in cash or by check, bank draft or money order payable to the Company or in any
other manner permitted by the Grant Notice, which may include one or more of the
following:
(a) Provided that at the time of exercise the Common Stock is publicly traded,
pursuant to a program developed under Regulation T as promulgated by the Federal
Reserve Board that, prior to the issuance of Common Stock, results in either the
receipt of cash (or check) by the Company or the receipt of irrevocable
instructions to pay the aggregate exercise price to the Company from the sales
proceeds.  This manner of payment is also known as a “broker-assisted exercise,”
“same day sale,” or “sell to cover.”
(b) Provided that at the time of exercise the Common Stock is publicly traded,
by delivery to the Company (either by actual delivery or attestation) of
already-owned shares of Common Stock that are owned free and clear of any liens,
claims, encumbrances or security interests, with a Fair Market Value on the date
of exercise that does not exceed the aggregate exercise price.  You must pay any
remaining balance of the aggregate exercise price not satisfied by such delivery
in cash or other permitted form of payment.  “Delivery” for these purposes, in
the sole discretion of the Company at the time you exercise this Option, will
include delivery to the Company of your attestation of ownership of such shares
of Common Stock in a form approved by the Company.  You may not exercise this
Option by delivery

--------------------------------------------------------------------------------

to the Company of Common Stock if doing so would violate the provisions of any
law, regulation or agreement restricting the redemption of the Company’s stock.
(c) If this Option is a Nonstatutory Stock Option, subject to the consent of the
Company at the time of exercise, by a “net exercise” arrangement pursuant to
which the Company will reduce the number of shares of Common Stock otherwise
issuable to you upon exercise of this Option by the largest number of whole
shares of Common Stock with a Fair Market Value on the date of exercise that
does not exceed the aggregate exercise price.  You must pay any remaining
balance of the aggregate exercise price not satisfied by such “net exercise” in
cash or other permitted form of payment.  Shares of Common Stock will no longer
be outstanding under this Option and will not be exercisable thereafter if those
shares (i) are used to pay the exercise price pursuant to a “net exercise,” (ii)
are delivered to you as a result of such exercise, or (iii) are withheld to
satisfy tax withholding obligations.
5. WHOLE SHARES; MINIMUM EXERCISE.  You may exercise this Option only for whole
shares of Common Stock.  No fewer than 100 shares of Common Stock (subject to
adjustment under Section 7.1 of the Plan) may be exercised at any one time,
unless the number purchased is the total number at the time exercisable under
the Option.
6. SECURITIES LAW COMPLIANCE.  You may not exercise this Option unless either
(i) the shares of Common Stock issuable upon such exercise are registered under
the Securities Act or (ii) the Company has determined that such exercise and
issuance would be exempt from the registration requirements of the Securities
Act.  This Option also must comply with all other applicable laws and
regulations governing this Option, and you may not exercise this Option if the
Company determines that such exercise would not be in material compliance with
such laws and regulations (including any restrictions on exercise required for
compliance with Treasury Regulations Section 1.401(k)-1(d)(3), if applicable).
7. TERM.  You may not exercise this Option before the Date of Grant or after the
expiration of its term.  The term of this Option expires, subject to the
provisions of Section 7.2 of the Plan permitting earlier termination of this
Option in connection with a Corporate Transaction, upon the earliest of the
following:
(a) immediately upon the termination of your Continuous Service if such
termination is for Cause;
(b) three months after the termination of your Continuous Service if such
termination is for any reason other than Cause, your Disability or your death
(except as otherwise provided in Section 7(d) below); provided, however, that if
(i) you are a Non-Exempt Employee, (ii) your Continuous Service terminates
within six months after the Date of Grant, and (iii) you have vested in a
portion of this Option as of the time of your termination of Continuous Service,
then this Option will not expire until the earlier of (x) the later of (A) the
date that is seven months after the Date of Grant, and (B) the date that is
three months after the termination of your Continuous Service, and (y) the
Expiration Date set forth in the Grant Notice;
(c) 12 months after the termination of your Continuous Service if such
termination is due to your Disability (except as otherwise provided in Section
7(d) below);
(d) 18 months after your death if either your Continuous Service terminates due
to your death or you die within three months after your Continuous Service
terminates for any reason other than Cause;
(e) the Expiration Date set forth in the Grant Notice; or
(f) the day before the tenth anniversary of the Date of Grant.
If this Option is an Incentive Stock Option, note that to obtain the federal
income tax advantages associated with an Incentive Stock Option, the Code
requires that at all times beginning on the Date of Grant and ending on the day
three months before the date of exercise of this Option, you must be an employee
of the Company or a Subsidiary, except in the event of your death or
Disability.  The Company has provided for extended exercisability of this Option
under certain circumstances for your benefit but cannot guarantee that this
Option will necessarily be treated as an

--------------------------------------------------------------------------------

Incentive Stock Option if you continue to provide services to the Company or a
Subsidiary as a consultant or director after your employment terminates or if
you otherwise exercise this Option more than three months after the date your
employment with the Company or a Subsidiary terminates.
 
8. EXERCISE.
(a) You may exercise the vested portion of this Option during its term by (i)
(A) delivering a Notice of Exercise (in a form designated by the Company), or
(B) making the required electronic election with the Company’s designated
broker, and (ii) paying the exercise price and any applicable withholding taxes
to the Company’s stock plan administrator, or to such other person as the
Company may designate, together with such additional documents as the Company
may then require.
(b) By exercising this Option, you agree that, as a condition to any exercise of
this Option, the Company may require you to enter into an arrangement providing
for the payment by you to the Company of any tax withholding obligation of the
Company arising by reason of (i) the exercise of this Option, (ii) the lapse of
any substantial risk of forfeiture to which the shares of Common Stock are
subject at the time of exercise, or (iii) the disposition of shares of Common
Stock acquired upon such exercise.
(c) If this Option is an Incentive Stock Option, by exercising this Option, you
agree that you will notify the Company in writing within 15 days after the date
of any disposition of any of the shares of Common Stock issued upon exercise of
this Option that occurs within two years after the Date of Grant or within one
year after such shares of Common Stock are transferred upon exercise of this
Option.
9. TRANSFERABILITY.  Except as otherwise provided in this Section 9, this Option
is not transferable, except by will or by the laws of descent and distribution,
and is exercisable during your life only by you.  
(a) Domestic Relations Orders.  Upon receiving written permission from the Board
or its duly authorized designee, and provided that you and the designated
transferee enter into transfer and other agreements required by the Company, you
may transfer this Option pursuant to the terms of a domestic relations order,
official marital settlement agreement or other divorce or separation instrument
as permitted by applicable law that contains the information required by the
Company to effectuate the transfer.  You are encouraged to discuss with the
Company’s General Counsel the proposed terms of any such transfer prior to
finalizing such domestic relations order, marital settlement agreement or other
divorce or separation instrument to help ensure the required information is
contained within the domestic relations order, marital settlement agreement or
other divorce or separation instrument.  If this Option is an Incentive Stock
Option, this Option may be deemed to be a Nonstatutory Stock Option as a result
of such transfer.
(b) Beneficiary Designation.  Upon receiving written permission from the Board
or its duly authorized designee, you may, by delivering written notice to the
Company, in a form approved by the Company and any broker designated by the
Company to handle option exercises, designate a third party who, upon your
death, will thereafter be entitled to exercise this Option and receive the
Common Stock or other consideration resulting from such exercise.  In the
absence of such a designation, upon your death, the executor or administrator of
your estate will be entitled to exercise this Option and receive, on behalf of
your estate, the Common Stock or other consideration resulting from such
exercise.
10. OPTION NOT A SERVICE CONTRACT.  Your Option is not an employment or service
contract, and nothing in your Option shall be deemed to create in any way
whatsoever any obligation on your part to continue in the service of the Company
or any Subsidiary, or on the part of the Company or any Subsidiary to continue
such service.  In addition, nothing in this Option will obligate the Company or
a Subsidiary, their respective stockholders, boards of directors, officers or
employees to continue any relationship that you might have as an employee,
director or consultant for the Company or a Subsidiary.

--------------------------------------------------------------------------------

11. TAX WITHHOLDING OBLIGATIONS.
(a) At the time you exercise this Option, in whole or in part, and at any time
thereafter as requested by the Company, you hereby authorize withholding from
payroll and any other amounts payable to you, and otherwise agree to make
adequate provision for (including by means of a “same day sale” pursuant to a
program developed under Regulation T as promulgated by the Federal Reserve Board
to the extent permitted by the Company), any sums required to satisfy the
federal, state, local and foreign tax withholding obligations of the Company or
any Subsidiary which arise in connection with this Option.
(b) If this Option is a Nonstatutory Stock Option, then upon your request and
subject to the consent of the Company at the time of exercise, the Company may
withhold from fully vested shares of Common Stock otherwise issuable to you upon
exercise of this Option a number of whole shares of Common Stock with a Fair
Market Value on the date of exercise that does not exceed the minimum amount of
tax required to be withheld by law (or such other amount as may be necessary to
avoid classification of this Option as a liability for financial accounting
purposes).  
(c) You may not exercise this Option unless the tax withholding obligations of
the Company and/or any Subsidiary are satisfied.  Accordingly, you may not be
able to exercise this Option when desired even though this Option is vested, and
the Company will have no obligation to issue a certificate for any shares of
Common Stock unless such obligations are satisfied.
12. TAX CONSEQUENCES.  The Company has no duty or obligation to minimize the tax
consequences to you of this Option and will not be liable to you for any adverse
tax consequences to you arising in connection with this Option.  You acknowledge
that this Option is exempt from Section 409A of the Code only if the exercise
price per share set forth in the Grant Notice is at least equal to the “fair
market value” per share of the Common Stock on the Date of Grant and there is no
other impermissible deferral of compensation associated with the Option.  You
are hereby advised to consult with your own personal tax, financial and/or legal
advisors regarding the tax consequences of this Option and by accepting this
Option, you have agreed that you have done so or knowingly and voluntarily
declined to do so.  
13. NOTICES.  Any notices provided for in this Agreement or the Plan will be
given in writing (including electronically) and will be deemed effectively given
upon receipt or, in the case of notices delivered by mail by the Company to you,
five days after deposit in the United States mail, postage prepaid, addressed to
you at the last address you provided to the Company.  The Company may, in its
sole discretion, decide to deliver any documents related to this Option or
participation in the Plan by electronic means or to request your consent to
participate in the Plan by electronic means.  By accepting this Option, you
consent to receive such documents by electronic delivery and to participate in
the Plan through an on-line or electronic system established and maintained by
the Company or another third party designated by the Company.
14. GOVERNING PLAN DOCUMENT.  This Option is subject to all the provisions of
the Plan, the provisions of which are hereby made a part of this Option, and is
further subject to all interpretations, amendments, rules and regulations which
may from time to time be promulgated and adopted pursuant to the Plan.  Except
as otherwise expressly provided in the Grant Notice or this Agreement, in the
event of any conflict between the terms in the Grant Notice or this
Agreement and the terms of the Plan, the terms of the Plan will control.  In
addition, your option (and any compensation paid or shares issued under your
option) is subject to recoupment in accordance with The Dodd–Frank Wall Street
Reform and Consumer Protection Act and any implementing regulations thereunder,
any clawback policy adopted by the Company and any compensation recovery policy
otherwise required by applicable law.
15. OTHER DOCUMENTS.  You hereby acknowledge receipt of and the right to receive
a document providing the information required by Rule 428(b)(1) promulgated
under the Securities Act, which includes the Plan prospectus.  In addition, you
acknowledge receipt of the Company’s policy permitting certain individuals to
sell shares of Common Stock only during certain “window” periods in effect from
time to time and the Company’s insider trading policy.
16. EFFECT ON OTHER EMPLOYEE BENEFIT PLANS.  The value of this Option will not
be included as compensation, earnings, salaries, or other similar terms used
when calculating your benefits under any employee

--------------------------------------------------------------------------------

benefit plan sponsored by the Company or any Subsidiary, except as such plan
otherwise expressly provides.  The Company expressly reserves its rights to
amend, modify, or terminate any of the Company’s or any Subsidiary’s employee
benefit plans.
17. STOCKHOLDER RIGHTS. You will not have voting or any other rights as a
stockholder of the Company with respect to the shares of Common Stock to be
issued pursuant to this Option until such shares are issued to you.  Upon such
issuance, you will obtain full voting and other rights as a stockholder of the
Company.  Nothing contained in this Agreement, and no action taken pursuant to
its provisions, will create or be construed to create a trust of any kind or a
fiduciary relationship between you and the Company or any other person.
18. SEVERABILITY.  If any part of this Agreement or the Plan is declared by any
court or governmental authority to be unlawful or invalid, such unlawfulness or
invalidity will not invalidate any portion of this Agreement or the Plan not
declared to be unlawful or invalid.  Any Section of this Agreement (or part of
such a Section) so declared to be unlawful or invalid will, if possible, be
construed in a manner which will give effect to the terms of such Section or
part of a Section to the fullest extent possible while remaining lawful and
valid.
19. AMENDMENT.  Any amendment to this Agreement must be in writing, signed by a
duly authorized representative of the Company.  Notwithstanding anything in the
Plan to the contrary, the Board reserves the right to amend this Agreement in
any way it may deem necessary or advisable to carry out the purpose of the grant
as a result of any change in applicable laws or regulations or any future law,
regulation, interpretation, ruling, or judicial decision.
20. MISCELLANEOUS.
(a) The rights and obligations of the Company under this Option will be
transferable to any one or more persons or entities, and all covenants and
agreements hereunder will inure to the benefit of, and be enforceable by, the
Company’s successors and assigns.
(b) You agree upon request to execute any further documents or instruments
necessary or desirable in the sole determination of the Company to carry out the
purposes or intent of this Option.
(c) You acknowledge and agree that you have reviewed this Option in its
entirety, have had an opportunity to obtain the advice of counsel prior to
executing and accepting this Option, and fully understand all provisions of this
Option.
(d) This Agreement will be subject to all applicable laws, rules, and
regulations, and to such approvals by any governmental agencies or national
securities exchanges as may be required.
(e) All obligations of the Company under the Plan and this Agreement will be
binding on any successor to the Company, whether the existence of such successor
is the result of a direct or indirect purchase, merger, consolidation, or
otherwise, of all or substantially all of the business and/or assets of the
Company.
21. DEFINITIONS.  The following terms used in this Agreement have the following
meanings:
(a) “Cause” will have the meaning ascribed to such term in any written
agreement between you and the Company or a Subsidiary defining such term and, in
the absence of such agreement, such term means the occurrence of one or more of
the following: (i) your refusal to follow a reasonable and lawful direction of
the Board or the chief executive officer of the Company after thirty (30) days
written notice from the Company or a Subsidiary specifying the nature of your
refusal and demanding that such refusal be remedied, provided that such notice
will not be required if such refusal cannot be remedied and provided further
that if you remedy such refusal, Cause will not exist; (ii) your conviction of a
felony or any crime involving moral turpitude; or (iii) your material breach of
your fiduciary or contractual obligations to the Company or a Subsidiary after
thirty (30) days written notice from the Company or a Subsidiary specifying the
nature of your breach and demanding that such breach be remedied, provided that
such notice will not be required if such breach cannot be remedied and provided
further that if you remedy such breach, Cause will not exist under this
provision.  The determination that a termination of your Continuous Service is
either for Cause or

--------------------------------------------------------------------------------

without Cause will be made by the Company, in its sole discretion.  Any
determination by the Company that your Continuous Service was terminated with or
without Cause for the purposes of the Option will have no effect upon any
determination of the rights or obligations of the Company or you for any other
purpose.
(b) “Corporate Transaction” means a transaction involving the Company as
described in Section 7.2 of the Plan.
(c) “Disability” means your inability 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, as provided in
Sections 22(e)(3) and 409A(a)(2)(c)(i) of the Code, and will be determined by
the Board on the basis of such medical evidence as the Board deems warranted
under the circumstances.
(d) “Fair Market Value” means, as of any date, the value of the Common Stock
determined as follows:
(i) Unless otherwise provided by the Board, if the Common Stock is listed on any
established stock exchange or traded on any established market, then the Fair
Market Value of a share of Common Stock will be the closing sales price for such
stock as quoted on such exchange or market (or the exchange or market with the
greatest volume of trading in the Common Stock) on the date of determination, as
reported in a source the Board deems reliable.
(ii) Unless otherwise provided by the Board, if there is no closing sales price
for the Common Stock on the date of determination, then the Fair Market Value of
a share of Common Stock will be the closing sales price for such stock on the
last preceding date for which such quotation exists.
(iii) In the absence of such markets for the Common Stock, the Fair Market Value
of a share of Common Stock will be determined by the Board in good faith and in
a manner that complies with Sections 409A and 422 of the Code.
*      *     *
This Option Agreement will be deemed to be accepted by you upon your acceptance
of the Option Grant Notice to which it is attached.
 
 

--------------------------------------------------------------------------------

CAVIUM, INC.
QLOGIC CORPORATION 2005 PERFORMANCE INCENTIVE PLAN
(AS ASSUMED BY CAVIUM, INC. ON AUGUST 16, 2016)
RESTRICTED STOCK UNIT AWARD GRANT NOTICE
Cavium, Inc. (the “Company”) hereby grants to Participant a Restricted Stock
Unit Award (the “Award”) under the QLogic Corporation 2005 Performance Incentive
Plan, as assumed by the Company on August 16, 2016, (the “Plan”) for the number
of restricted stock units (the “RSUs”) set forth below.  This Award is subject
to all of the terms and conditions set forth in this Restricted Stock Unit Award
Grant Notice (the “Grant Notice”) and in the Restricted Stock Unit Award
Agreement (the “Agreement”) and the Plan, both of which are attached hereto and
incorporated herein in their entirety.  Capitalized terms not explicitly defined
in this Grant Notice but defined in the Plan or the Agreement will have the same
definitions as in the Plan or the Agreement.
 
Participant:
 
Date of Grant:
 
Vesting Commencement Date:
 
Number of RSUs Subject to Award:
 

 
Vesting Schedule:
Subject to Section 2 of the Agreement, this Award will vest as
follows:             .

Mandatory Sale to Cover Withholding Taxes: As a condition for acceptance of this
Award, to the fullest extent permitted under the Plan and applicable law,
withholding taxes will be satisfied through the sale of a number of the shares
subject to the Award as determined in accordance with Section 10 of the Award
Agreement and the remittance of the cash proceeds to the Company. Under the
Award Agreement, the Company is authorized and directed by the Participant to
make payment from the cash proceeds of this sale directly to the appropriate
taxing authorities in an amount equal to the taxes required to be withheld. The
mandatory sale of shares to cover withholding taxes is imposed by the Company on
the Participant in connection with the receipt of this Award, and it is intended
to comply with the requirements of Rule 10b5-1(c)(1)(i)(B) under the Exchange
Act and be interpreted to meet the requirements of Rule 10b5-1(c).
Issuance Schedule:
Subject to any change upon a capitalization adjustments, if any, as provided in
Section 7.1 of the Plan, one share of Common Stock will be issued for each RSU
that vests at the time set forth in Section 6 of the Agreement.

Additional Terms/Acknowledgements:  Participant acknowledges receipt of, and
understands and agrees to, this Grant Notice, the Agreement, the Plan and the
prospectus for the Plan.  Participant further acknowledges that as of the Date
of Grant, this Grant Notice, the Agreement and the Plan set forth the entire
understanding between Participant and the Company regarding this Award and
supersede all prior oral and written agreements, promises and/or representations
regarding this Award, with the exception, if applicable, of (i) any written
employment, offer letter or severance agreement, or any written severance plan
or policy specifying the terms that should govern this Award and (ii) the
Company’s Stock Ownership Guidelines.  By accepting this Award, Participant
consents to receive this Grant Notice, the Agreement, the Plan, the prospectus
for the Plan and any other Plan-related documents by electronic delivery and to
participate in the Plan through an on-line or electronic system established and
maintained by the Company or another third party designated by the
Company.  Participant’s acceptance of this Award, and Participant’s
acknowledgement and agreement with the terms set forth in this paragraph, will
be evidenced by Participant’s signature below or by electronic acceptance or
authentication in a form authorized by the Company.

--------------------------------------------------------------------------------

 
Cavium, Inc.
 
Participant
 
 
 
 
 
By:
 
 
 
 
 
 
Signature
 
Signature
 
 
 
 
 
 
 
Title:
 
 
 
Date:
 
 
Date:
 
 
 
 
 
 

 
ATTACHMENTS:
Restricted Stock Unit Award Agreement, QLogic Corporation 2005 Performance
Incentive Plan, Prospectus

 
 
 
 

--------------------------------------------------------------------------------

CAVIUM, INC.
QLOGIC CORPORATION 2005 PERFORMANCE INCENTIVE PLAN
(AS ASSUMED BY CAVIUM, INC. ON AUGUST 16, 2016)
RESTRICTED STOCK UNIT AWARD AGREEMENT
Pursuant to the accompanying Restricted Stock Unit Award Grant Notice (the
“Grant Notice”) and this Restricted Stock Unit Award Agreement (the
“Agreement”), Cavium, Inc. (the “Company”) has granted you a Restricted Stock
Unit Award (the “Award”) under the QLogic Corporation 2005 Performance Incentive
Plan (the “Plan”) for the number of restricted stock units (the “Restricted
Stock Units”) set forth in the Grant Notice.  This Award is granted to you
effective as of the date of grant set forth in the Grant Notice (the “Date of
Grant”).  Capitalized terms not explicitly defined in this Agreement but defined
in the Plan or the Grant Notice will have the same definitions as in the Plan or
the Grant Notice.  Certain capitalized terms used in this Agreement are defined
in Section 21 of this Agreement.
1. GRANT OF THE AWARD.  This Award represents your right to be issued on a
future date (as set forth in Section 6) one share of Common Stock for each
Restricted Stock Unit subject to this Award that vests in accordance with the
Grant Notice and this Agreement.  This Award was granted in consideration of
your services to the Company or a Subsidiary thereof.
2. VESTING.  This Award will vest, if at all, in accordance with the vesting
schedule set forth in the Grant Notice, provided that vesting will cease upon
the termination of your continuous service with the Company or a Subsidiary
thereof (“Continuous Service”).  Upon such termination of your Continuous
Service, you will forfeit (at no cost to the Company) any Restricted Stock Units
subject to this Award that have not vested as of the date of such termination
and you will have no further right, title or interest in such Restricted Stock
Units.  A change in the capacity of your employment or service (e.g., from
employee to consultant) without a break in service will not constitute a
termination of your Continuous Service for purposes of this Award.
3. NUMBER OF RESTRICTED STOCK UNITS AND SHARES OF COMMON STOCK.
(a) The number of Restricted Stock Units subject to this Award, as set forth in
the Grant Notice, will be adjusted for capitalization adjustments, if any, as
provided in Section 7.1 of the Plan.
(b) Any additional Restricted Stock Units and any shares of Common Stock, cash
or other property that become subject to this Award pursuant to this Section 3
will be subject, in a manner determined by the Board, to the same forfeiture
restrictions, restrictions on transferability, and time and manner of issuance
as applicable to the other Restricted Stock Units subject to this Award to which
they relate.
(c) No fractional shares or rights for fractional shares of Common Stock will be
created pursuant to this Section 3.  Any fractional shares that may be created
by the adjustments referred to in this Section 3 will be rounded down to the
nearest whole share.
4. SECURITIES LAW COMPLIANCE.  You will not be issued any shares of Common Stock
in respect of this Award unless either (i) such shares are registered under the
Securities Act or (ii) the Company has determined that such issuance would be
exempt from the registration requirements of the Securities Act.  This Award
also must comply with all other applicable laws and regulations governing this
Award, and you will not receive any shares of Common Stock in respect of this
Award if the Company determines that such receipt would not be in material
compliance with such laws and regulations.
5. TRANSFERABILITY.  Except as otherwise provided in this Section 5, this Award
is not transferable, except by will or by the laws of descent and distribution
and prior to the time that shares of Common Stock in respect of this Award have
been issued to you, you may not transfer, pledge, sell or otherwise dispose of
any portion of the Restricted Stock Units or the shares of Common Stock in
respect of this Award.  For example, you may not use any shares of

--------------------------------------------------------------------------------

Common Stock that may be issued in respect of this Award as security for a loan,
nor may you transfer, pledge, sell or otherwise dispose of such shares.  This
restriction on transfer will lapse upon issuance to you of the shares of Common
Stock in respect of this Award.  
(a) Domestic Relations Orders.  Upon receiving written permission from the Board
or its duly authorized designee, and provided that you and the designated
transferee enter into transfer and other agreements required by the Company, you
may transfer your right to receive any distribution of Common Stock or other
consideration under this Award, pursuant to the terms of a domestic relations
order, official marital settlement agreement or other divorce or separation
instrument as permitted by applicable law that contains the information required
by the Company to effectuate the transfer.  You are encouraged to discuss with
the Company’s General Counsel the proposed terms of any such transfer prior to
finalizing such domestic relations order, marital settlement agreement or other
divorce or separation instrument to help ensure the required information is
contained within the domestic relations order, marital settlement agreement or
other divorce or separation instrument.
6. DATE OF ISSUANCE.  
(a) The issuance of shares in respect of the Restricted Stock Units is intended
to comply with Treasury Regulations Section 1.409A-1(b)(4) and will be construed
and administered in such a manner. Subject to the satisfaction of the
withholding obligations set forth in this Agreement, in the event one or more
Stock Units vests, the Company shall issue to you one (1) share of Common Stock
for each Stock Unit that vests on the applicable vesting date(s) (subject to any
adjustment under Section 3 above). The issuance date determined by this
paragraph is referred to as the “Original Issuance Date”.
(b) If the Original Issuance Date falls on a date that is not a business day,
delivery shall instead occur on the next following business day. In addition,
if:
(i) the Original Issuance Date does not occur (1) during an “open window period”
applicable to you, as determined by the Company in accordance with the Company’s
then-effective policy on trading in Company securities, or (2) on a date when
you are otherwise permitted to sell shares of Common Stock on an established
stock exchange or stock market (including but not limited to under a previously
established Company-approved 10b5-1 trading plan or pursuant to the mandatory
“same day sale” commitment described in section 10(d) hereof), and
(ii) the Company decides, prior to the Original Issuance Date, (1) not to
satisfy the Withholding Taxes by withholding shares of Common Stock from the
shares otherwise due, on the Original Issuance Date, to you under this Award,
and (2) not to permit you to pay your Withholding Taxes in cash,
then the shares that would otherwise be issued to you on the Original Issuance
Date will not be delivered on such Original Issuance Date and will instead be
delivered on the first business day when you are not prohibited from selling
shares of the Company’s Common Stock in the open public market, but in no event
later than December 31 of the calendar year in which the Original Issuance Date
occurs (that is, the last day of your taxable year in which the Original
Issuance Date occurs), or, if and only if permitted in a manner that complies
with Treasury Regulations Section 1.409A-1(b)(4), no later than the date that is
the 15th day of the third calendar month of the applicable year following the
year in which the shares of Common Stock under this Award are no longer subject
to a “substantial risk of forfeiture” within the meaning of Treasury Regulations
Section 1.409A-1(d).
(c) The form of delivery (e.g., a stock certificate or electronic entry
evidencing such shares) shall be determined by the Company.
7. DIVIDENDS. You will receive no benefit or adjustment to this Award with
respect to any cash dividend, stock dividend or other distribution except as
provided in the Plan with respect to a capitalization adjustment.  
8. RESTRICTIVE LEGENDS.  The shares of Common Stock issued in respect of this
Award will be endorsed with appropriate legends, if any, as determined by the
Company.

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9. AWARD NOT A SERVICE CONTRACT.  Your Award is not an employment or service
contract, and nothing in your Award shall be deemed to create in any way
whatsoever any obligation on your part to continue in the service of the Company
or any Subsidiary, or on the part of the Company or any Subsidiary to continue
such service.  In addition, nothing in this Award will obligate the Company or a
Subsidiary, their respective stockholders, boards of directors, officers or
employees to continue any relationship that you might have as an employee,
director or consultant for the Company or a Subsidiary.
10. WITHHOLDING TAXES.  
(a) On each vesting date, and on or before the time you receive a distribution
of the shares underlying your Restricted Stock Units, and at any other time as
reasonably requested by the Company in accordance with applicable tax laws, you
agree to make adequate provision for any sums required to satisfy the federal,
state, local and foreign tax withholding obligations of the Company or any
Subsidiary that arise in connection with your Award (the “Withholding Taxes”).
Specifically, pursuant to section 10(d), you have agreed to a “same day sale”
commitment with a broker-dealer that is a member of the Financial Industry
Regulatory Authority (a “FINRA Dealer”) whereby you have (except in the case of
officers, as set forth below),  irrevocably agreed to sell a portion of the
shares to be delivered in connection with your Restricted Stock Units to satisfy
the Withholding Taxes and whereby the FINRA Dealer committed to forward the
proceeds necessary to satisfy the Withholding Taxes directly to the Company
and/or its Subsidiaries.  If, for any reason, such “same day  sale” commitment
pursuant to section 10(d) does not result in sufficient proceeds to satisfy the
Withholding Taxes, or you are an officer and have provided notice to the Company
at least five business days prior to a vesting date of your election to opt out
of the “same day sale” commitment under section 10(d) with respect to such
vesting date, the Company or a Subsidiary may, in its sole discretion, satisfy
all or any portion of the Withholding Taxes relating to your Award by any of the
following means or by a combination of such means: (i) withholding from any
compensation otherwise payable to you by the Company or a Subsidiary; (ii)
causing you to tender a cash payment (which may be in the form of a check,
electronic wire transfer or other method permitted by the Company); or (iii)
subject to the approval of the independent members of the Board, withholding
shares of Common Stock from the shares of Common Stock issued or otherwise
issuable to you in connection with your Restricted Stock Units with a Fair
Market Value (measured as of the date shares of Common Stock are issued to you)
equal to the amount of such Withholding Taxes; provided, however, that the
number of such shares of Common Stock so withheld will not exceed the amount
necessary to satisfy the Company’s required tax withholding obligations using
the minimum statutory withholding rates for federal, state, local and foreign
tax purposes, including payroll taxes, that are applicable to supplemental
taxable income.
(b) Unless the tax withholding obligations of the Company and/or any Subsidiary
are satisfied, the Company shall have no obligation to deliver to you any Common
Stock.
(c) In the event the Company’s obligation to withhold arises prior to the
delivery to you of Common Stock or it is determined after the delivery of Common
Stock to you that the amount of the Company’s withholding obligation was greater
than the amount withheld by the Company, you agree to indemnify and hold the
Company harmless from any failure by the Company to withhold the proper amount.
 
(d) You hereby acknowledge and agree to the following:
 
i)
I hereby appoint E*Trade Financial Corporate Services as my agent (the “Agent”),
and authorize the Agent, to:

11. TAX CONSEQUENCES.  The Company has no duty or obligation to minimize the tax
consequences to you of this Award and will not be liable to you for any adverse
tax consequences to you arising in connection with this Award.  You are hereby
advised to consult with your own personal tax, financial and/or legal advisors
regarding the tax consequences of this Award and by accepting this Award, you
have agreed that you have done so or knowingly and voluntarily declined to do
so.

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(1)
Sell on the open market at the then prevailing market price(s), on my behalf, as
soon as practicable on or after each date on which the Restricted Stock Units
vest, the number (rounded up to the next whole number) of the shares of Common
Stock to be delivered to me in connection with the vesting of those Restricted
Stock Units sufficient to generate proceeds to cover (1) the Withholding Taxes
that I am required to pay pursuant to the Plan and this Award Agreement as a
result of the Restricted Stock Units vesting (or being issued, as applicable)
and (2) all applicable fees and commissions due to, or required to be collected
by, the Agent with respect thereto; and

 
(2)
Remit any remaining funds to me.

 
ii)
I hereby authorize the Company and the Agent to cooperate and communicate with
one another to determine the number of shares of Common Stock that must be sold
pursuant to this Section 10(d).

 
iii)
I understand that the Agent may effect sales as provided in this Section 10(d)
in one or more sales and that the average price for executions resulting from
bunched orders will be assigned to my account. In addition, I acknowledge that
it may not be possible to sell shares of Common Stock as provided by in this
Section 10(d) due to (i) a legal or contractual restriction applicable to me or
the Agent, (ii) a market disruption, or (iii) rules governing order execution
priority on the national exchange where the Common Stock may be traded. In the
event of the Agent’s inability to sell shares of Common Stock, I will continue
to be responsible for the timely payment to the Company of all federal, state,
local and foreign taxes that are required by applicable laws and regulations to
be withheld, including but not limited to those amounts specified in this
Section 10(d).

 
iv)
I acknowledge that regardless of any other term or condition of this Section
10(d), the Agent will not be liable to me for (a) special, indirect, punitive,
exemplary, or consequential damages, or incidental losses or damages of any
kind, or (b) any failure to perform or for any delay in performance that results
from a cause or circumstance that is beyond its reasonable control.

 
v)
I hereby agree to execute and deliver to the Agent any other agreements or
documents as the Agent reasonably deems necessary or appropriate to carry out
the purposes and intent of this Section 10(d). The Agent is a third-party
beneficiary of this Section 10(d).

 
vi)
This Section 10(d) shall terminate not later than the date on which all
withholding taxes arising in connection with the vesting of my Award have been
satisfied.

 
vii)
Officers may, on notice delivered five or more business days prior to a vesting
date, opt out of the “same day sale” commitment under this section 10(d) with
respect to such vesting date  provided alternate arrangements acceptable to the
Company to satisfy the withholding taxes payable on such vesting date have been
made, as described in section 10(a).

12. NOTICES.  Any notices provided for in this Agreement or the Plan will be
given in writing (including electronically) and will be deemed effectively given
upon receipt or, in the case of notices delivered by mail by the Company to you,
five days after deposit in the United States mail, postage prepaid, addressed to
you at the last address you provided to the Company.  The Company may, in its
sole discretion, decide to deliver any documents related to this Award or
participation in the Plan by electronic means or to request your consent to
participate in the Plan by electronic means.  By accepting this Award, you
consent to receive such documents by electronic delivery and to participate in
the Plan through an on-line or electronic system established and maintained by
the Company or another third party designated by the Company.
 
13. GOVERNING PLAN DOCUMENT.  This Award is subject to all the provisions of the
Plan, the provisions of which are hereby made a part of this Award, and is
further subject to all interpretations, amendments, rules and regulations which
may from time to time be promulgated and adopted pursuant to the Plan.  Except
as otherwise expressly provided in the Grant Notice or this Agreement, in the
event of any conflict between the terms in the Grant Notice or this
Agreement and the terms of the Plan, the terms of the Plan will control.

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14. OTHER DOCUMENTS.  You hereby acknowledge receipt of and the right to receive
a document providing the information required by Rule 428(b)(1) promulgated
under the Securities Act, which includes the Plan prospectus.  In addition, you
acknowledge receipt of the Company’s policy permitting certain individuals to
sell shares of Common Stock only during certain “window” periods in effect from
time to time and the Company’s insider trading policy.
15. EFFECT ON OTHER EMPLOYEE BENEFIT PLANS.  The value of this Award will not be
included as compensation, earnings, salaries, or other similar terms used when
calculating your benefits under any employee benefit plan sponsored by the
Company or any Subsidiary, except as such plan otherwise expressly
provides.  The Company expressly reserves its rights to amend, modify, or
terminate any of the Company’s or any Subsidiary’s employee benefit plans.
16. STOCKHOLDER RIGHTS. You will not have voting or any other rights as a
stockholder of the Company with respect to the shares of Common Stock to be
issued pursuant to this Award until such shares are issued to you.  Upon such
issuance, you will obtain full voting and other rights as a stockholder of the
Company.  Nothing contained in this Agreement, and no action taken pursuant to
its provisions, will create or be construed to create a trust of any kind or a
fiduciary relationship between you and the Company or any other person.
17. SEVERABILITY.  If any part of this Agreement or the Plan is declared by any
court or governmental authority to be unlawful or invalid, such unlawfulness or
invalidity will not invalidate any portion of this Agreement or the Plan not
declared to be unlawful or invalid. Any Section of this Agreement (or part of
such a Section) so declared to be unlawful or invalid will, if possible, be
construed in a manner which will give effect to the terms of such Section or
part of a Section to the fullest extent possible while remaining lawful and
valid.
18. AMENDMENT.  Any amendment to this Agreement must be in writing, signed by a
duly authorized representative of the Company.  Notwithstanding anything in the
Plan to the contrary, the Board reserves the right to amend this Agreement in
any way it may deem necessary or advisable to carry out the purpose of the grant
as a result of any change in applicable laws or regulations or any future law,
regulation, interpretation, ruling, or judicial decision.
19. UNSECURED OBLIGATION.  This Award is unfunded, and as a holder of vested
Restricted Stock Units, you will be considered an unsecured creditor of the
Company with respect to the Company’s obligation, if any, to issue shares of
Common Stock or other property pursuant to this Agreement.
20. COMPLIANCE WITH SECTION 409A OF THE CODE.  This Award is intended to comply
with the “short-term deferral” rule set forth in Treasury Regulations Section
1.409A-1(b)(4).  However, if (i) this Award fails to satisfy the requirements of
the short-term deferral rule and is otherwise not exempt from, and therefore
deemed to be deferred compensation subject to, Section 409A of the Code, (ii)
you are deemed by the Company at the time of your “separation from service” (as
such term is defined in Treasury Regulations Section 1.409A-1(h) without regard
to any alternative definition thereunder) to be a “specified employee” for
purposes of Section 409A(a)(2)(B)(i) of the Code, and (iii) any of the payments
set forth herein are issuable upon such separation from service, then to the
extent delayed commencement of any portion of such payments is required to avoid
a prohibited distribution under Section 409A(a)(2)(B)(i) of the Code and the
related adverse taxation under Section 409A of the Code, such payments will not
be provided to you prior to the earliest of (a) the date that is six months and
one day after the date of such separation from service, (b) the date of your
death, or (c) such earlier date as permitted under Section 409A of the Code
without the imposition of adverse taxation.  Upon the first business day
following the expiration of such applicable Code Section 409A(a)(2)(B)(i)
period, all payments deferred pursuant to this Section 20 will be paid in a lump
sum to you, and any remaining payments due will be paid as otherwise provided
herein.  Each installment of Restricted Stock Units that vests under this Award
is a “separate payment” for purposes of Treasury Regulations Section
1.409A-2(b)(2).
21. DEFINITIONS.  The following terms used in this Agreement have the following
meanings:
(a) “Fair Market Value” means, as of any date, the value of the Common Stock
determined as follows:
(i) Unless otherwise provided by the Board, if the Common Stock is listed on any
established stock exchange or traded on any established market, then the Fair
Market Value of a share of Common Stock will be

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the closing sales price for such stock as quoted on such exchange or market (or
the exchange or market with the greatest volume of trading in the Common Stock)
on the date of determination, as reported in a source the Board deems reliable.
(ii) Unless otherwise provided by the Board, if there is no closing sales price
for the Common Stock on the date of determination, then the Fair Market Value of
a share of Common Stock will be the closing sales price for such stock on the
last preceding date for which such quotation exists.
(iii) In the absence of such markets for the Common Stock, the Fair Market Value
of a share of Common Stock will be determined by the Board in good faith and in
a manner that complies with Sections 409A and 422 of the Code.
22. MISCELLANEOUS.
(a) The rights and obligations of the Company under this Award will be
transferable to any one or more persons or entities, and all covenants and
agreements hereunder will inure to the benefit of, and be enforceable by, the
Company’s successors and assigns.
(b) You agree upon request to execute any further documents or instruments
necessary or desirable in the sole determination of the Company to carry out the
purposes or intent of this Award.
(c) You acknowledge and agree that you have reviewed this Award in its entirety,
have had an opportunity to obtain the advice of counsel prior to executing and
accepting this Award, and fully understand all provisions of this Award.
(d) This Agreement will be subject to all applicable laws, rules, and
regulations, and to such approvals by any governmental agencies or national
securities exchanges as may be required.
(e) All obligations of the Company under the Plan and this Agreement will be
binding on any successor to the Company, whether the existence of such successor
is the result of a direct or indirect purchase, merger, consolidation, or
otherwise, of all or substantially all of the business and/or assets of the
Company.
*      *      *
This Restricted Stock Unit Award Agreement will be deemed to be accepted by you
upon your acceptance of the Restricted Stock Unit Award Grant Notice to which it
is attached.