Exhibit 10.15
FOUNDRY NETWORKS, INC.
2006 STOCK INCENTIVE PLAN

 

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TABLE OF CONTENTS

                              Page SECTION 1.    INTRODUCTION     1   SECTION 2.
   DEFINITIONS     1  
 
  (a)   “Affiliate”     1  
 
  (b)   “Award”     1  
 
  (c)   “Award Agreement”     1  
 
  (d)   “Board”     1  
 
  (e)   “Cashless Exercise”     1  
 
  (f)   “Cause”     2  
 
  (g)   “Change in Control”     2  
 
  (h)   “Code”     2  
 
  (i)   “Committee”     2  
 
  (j)   “Common Stock”     3  
 
  (k)   “Company”     3  
 
  (l)   “Consultant”     3  
 
  (m)   “Covered Employees”     3  
 
  (n)   “Director”     3  
 
  (o)   “Disability”     3  
 
  (p)   “Employee”     3  
 
  (q)   “Exchange Act”     3  
 
  (r)   “Exercise Price”     3  
 
  (s)   “Fair Market Value”     3  
 
  (t)   “Fiscal Year”     4  
 
  (u)   “Incentive Stock Option” or “ISO”     4  
 
  (v)   “Key Service Provider”     4  
 
  (w)   “Non-Employee Director”     4  
 
  (x)   “Nonstatutory Stock Option” or “NSO”     4  
 
  (y)   “Option”     4  
 
  (z)   “Optionee”     4  
 
  (aa)   “Parent”     4  
 
  (bb)   “Participant”     4  
 
  (cc)   “Performance Goals”     4  
 
  (dd)   “Performance Period”     5  

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TABLE OF CONTENTS

                              Page
 
  (ee)   “Plan”     5  
 
  (ff)   “Re-Price”     5  
 
  (gg)   “SAR Agreement”     5  
 
  (hh)   “SEC”     5  
 
  (ii)   “Section 16 Persons”     5  
 
  (jj)   “Securities Act”     5  
 
  (kk)   “Service”     5  
 
  (ll)   “Share”     5  
 
  (mm)   “Stock Appreciation Right” or “SAR”     5  
 
  (nn)   “Stock Grant”     5  
 
  (oo)   “Stock Grant Agreement”     5  
 
  (pp)   “Stock Option Agreement”     6  
 
  (qq)   “Stock Unit”     6  
 
  (rr)   “Stock Unit Agreement”     6  
 
  (ss)   “Subsidiary”     6  
 
  (tt)   “10-Percent Stockholder”     6   SECTION 3.       ADMINISTRATION     6
 
 
  (a)   Committee Composition     6  
 
  (b)   Authority of the Committee     6  
 
  (c)   Indemnification     7   SECTION 4.       GENERAL     8  
 
  (a)   General Eligibility     8  
 
  (b)   Incentive Stock Options     8  
 
  (c)   Restrictions on Shares     8  
 
  (d)   Beneficiaries     8  
 
  (e)   Performance Conditions     8  
 
  (f)   No Rights as a Stockholder     8  
 
  (g)   Termination of Service     8   SECTION 5.       SHARES SUBJECT TO PLAN
AND SHARE LIMITS     9  
 
  (a)   Basic Limitation     9  
 
  (b)   Additional Shares     9  
 
  (c)   Dividend Equivalents     9  

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TABLE OF CONTENTS

                              Page
 
  (d)   Share Limits     9  
 
      (i)Limits on Options     9  
 
      (ii)Limits on SARs     9  
 
      (iii)Limits on Stock Grants and Stock Units     10   SECTION 6.      
TERMS AND CONDITIONS OF OPTIONS     10  
 
  (a)   Stock Option Agreement     10  
 
  (b)   Number of Shares     10  
 
  (c)   Exercise Price     10  
 
  (d)   Exercisability and Term     10  
 
  (e)   Payment for Option Shares     10  
 
      (i)Surrender of Stock     10  
 
      (ii)Cashless Exercise     10  
 
      (iii)Other Forms of Payment     11  
 
  (f)   Modifications or Assumption of Options     11  
 
  (g)   Assignment or Transfer of Options     11   SECTION 7.       TERMS AND
CONDITIONS OF STOCK APPRECIATION RIGHTS     11  
 
  (a)   SAR Agreement     11  
 
  (b)   Number of Shares     11  
 
  (c)   Exercise Price     12  
 
  (d)   Exercisability and Term     12  
 
  (e)   Exercise of SARs     12  
 
  (f)   Modification or Assumption of SARs     12  
 
  (g)   Assignment or Transfer of SARs     12   SECTION 8.       TERMS AND
CONDITIONS FOR STOCK GRANTS     13  
 
  (a)   Time, Amount and Form of Awards     13  
 
  (b)   Stock Grant Agreement     13  
 
  (c)   Payment for Stock Grants     13  
 
  (d)   Vesting Conditions     13  
 
  (e)   Assignment or Transfer of Stock Grants     13  
 
  (f)   Voting and Dividend Rights     13  
 
  (g)   Modification or Assumption of Stock Grants     14  

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TABLE OF CONTENTS

                              Page SECTION 9.       TERMS AND CONDITIONS OF
STOCK UNITS     14  
 
  (a)   Stock Unit Agreement     14  
 
  (b)   Number of Shares     14  
 
  (c)   Payment for Awards     14  
 
  (d)   Vesting Conditions     14  
 
  (e)   Form and Time of Settlement of Stock Units     14  
 
  (f)   Voting and Dividend Rights     14  
 
  (g)   Creditors’ Rights     15  
 
  (h)   Modification or Assumption of Stock Units     15  
 
  (i)   Assignment or Transfer of Stock Units     15   SECTION 10.      
PROTECTION AGAINST DILUTION     15  
 
  (a)   Adjustments     15  
 
  (b)   Participant Rights     16  
 
  (c)   Fractional Shares     16   SECTION 11.       EFFECT OF A CHANGE IN
CONTROL     16  
 
  (a)   Change in Control     16  
 
  (b)   Acceleration     16  
 
  (c)   Dissolution     16   SECTION 12.       LIMITATIONS ON RIGHTS     16  
 
  (a)   Participant Rights     16  
 
  (b)   Stockholders’ Rights     17  
 
  (c)   Regulatory Requirements     17   SECTION 13.       WITHHOLDING TAXES    
17  
 
  (a)   General     17  
 
  (b)   Share Withholding     17   SECTION 14.       DURATION AND AMENDMENTS    
18  
 
  (a)   Term of the Plan     18  
 
  (b)   Right to Amend or Terminate the Plan     18  

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FOUNDRY NETWORKS, INC.
2006 STOCK INCENTIVE PLAN
SECTION 1. INTRODUCTION.
On April 28, 2006, the Board adopted this Foundry Networks, Inc. 2006 Stock
Incentive Plan, which shall become effective upon its approval by the Company’s
stockholders (the “Effective Date”). If this Plan is approved by the Company’s
stockholders, this Plan will supersede the 1996 Stock Plan effective as of the
Effective Date such that no further awards shall be made under the 1996 Stock
Plan on or after such date. However, this Plan will not, in any way, affect
awards under the 1996 Stock Plan that are outstanding as of the Effective Date.
If the Company’s stockholders do not approve this Plan, no Awards will be made
under this Plan and the 1996 Stock Plan will continue in effect in accordance
with its terms.
The purpose of this Plan is to promote the long-term success of the Company and
the creation of stockholder value by offering Key Service Providers the
opportunity to share in such long-term success by acquiring a proprietary
interest in the Company.
The Plan seeks to achieve this purpose by providing for discretionary long-term
incentive Awards in the form of Options (which may be Incentive Stock Options or
Nonstatutory Stock Options), Stock Appreciation Rights, Stock Grants and Stock
Units.
The Plan shall be governed by, and construed in accordance with, the laws of the
State of California (except its choice-of-law provisions). Capitalized terms
shall have the meaning provided in Section 2 unless otherwise provided in this
Plan or any related Award Agreement.
SECTION 2. DEFINITIONS.
(a) “Affiliate” means any entity other than a Subsidiary, if the Company and/or
one or more Subsidiaries own not less than 50% of such entity.
(b) “Award” means an Option, SAR, Stock Grant or Stock Unit.
(c) “Award Agreement” means any Stock Option Agreement, SAR Agreement, Stock
Grant Agreement or Stock Unit Agreement.
(d) “Board” means the Board of Directors of the Company, as constituted from
time to time.
(e) “Cashless Exercise” means, to the extent that a Stock Option Agreement so
provides and as permitted by applicable law, a program approved by the Committee
in which payment of the aggregate Exercise Price and/or satisfaction of any
applicable tax withholding obligations may be made all or in part by delivery
(on a form prescribed by

 

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the Committee) of an irrevocable direction to a securities broker to sell Shares
subject to an Option and to deliver all or part of the sale proceeds to the
Company.
(f) “Cause” means, except as may otherwise be provided in a Participant’s
employment agreement or Award Agreement, (i) Participant’s willful failure to
perform his or her duties and responsibilities to the Company or material
violation of a written Company policy; (ii) Participant’s commission of any act
of fraud, embezzlement, dishonesty or any other willful misconduct that has
caused or is reasonably expected to result in material injury to the Company;
(iii) unauthorized use or disclosure by Participant of any proprietary
information or trade secrets of the Company or any other party to whom the
Participant owes an obligation of nondisclosure as a result of his or her
relationship with the Company; or (iv) Participant’s willful breach of any of
his or her obligations under any written agreement or covenant with the Company.
The determination as to whether a Participant is being terminated for Cause
shall be made in good faith by the Committee and shall be conclusive and binding
on the Participant. The foregoing definition does not in any way limit the
Company’s ability to terminate a Participant’s Service at any time as provided
in Section 12(a), and the term “Company” will be interpreted to include any
Subsidiary, Parent, Affiliate, or any successor thereto, if appropriate.
(g) “Change in Control” means the consummation of any of the following
transactions:
(i) The sale of all or substantially all of the Company’s assets;
(ii) The merger of the Company with or into another corporation in which
securities possessing more than 50% of the total combined voting power of the
Company are transferred to a person or persons different from the persons
holding those securities immediately prior to such transaction; or
(iii) The acquisition, directly or indirectly, by any person or related group of
persons (other than the Company or a person that directly or indirectly
controls, is controlled by, or is under common control with, the Company) of
beneficial ownership (within the meaning of Rule 13d-3 of the Exchange Act) of
securities of the Company representing more than 50% of the total combined
voting power of the Company’s then outstanding securities pursuant to a tender
or exchange offer made directly to the Company’s stockholders which the Board
does not recommend such stockholders accept.
A transaction shall not constitute a Change in Control if its sole purpose is to
change the state of the Company’s incorporation or to create a holding company
that will be owned in substantially the same proportions by the persons who held
the Company’s securities immediately before such transactions.
(h) “Code” means the Internal Revenue Code of 1986, as amended, and the
regulations and interpretations promulgated thereunder.
(i) “Committee” means a committee described in Section 3.

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(j) “Common Stock” means the Company’s common stock.
(k) “Company” means Foundry Networks, Inc., a Delaware corporation.
(l) “Consultant” means an individual who provides bona fide services to the
Company, a Parent, a Subsidiary or an Affiliate, other than as an Employee,
Director or Non-Employee Director.
(m) “Covered Employees” means those persons who are subject to the limitations
of Code Section 162(m).
(n) “Director” means a member of the Board who is also an Employee.
(o) “Disability” means that the Participant is classified as disabled under the
long-term disability policy of the Company or, if no such policy applies, the
Participant is unable to engage in any substantial gainful activity by reason of
any medically determinable physical or mental impairment which can be expected
to result in death or which has lasted or can be expected to last for a
continuous period of not less than 12 months.
(p) “Employee” means any individual who is a common-law employee of the Company,
a Parent, a Subsidiary or an Affiliate.
(q) “Exchange Act” means the Securities Exchange Act of 1934, as amended.
(r) “Exercise Price” means, in the case of an Option, the amount for which a
Share may be purchased upon exercise of such Option, as specified in the
applicable Stock Option Agreement. “Exercise Price,” in the case of a SAR, means
an amount, as specified in the applicable SAR Agreement, which is subtracted
from the Fair Market Value in determining the amount payable upon exercise of
such SAR.
(s) “Fair Market Value” means the market price of a Share as determined in good
faith by the Committee. Such determination shall be conclusive and binding on
all persons. The Fair Market Value shall be determined by the following:
(i) If the Shares are admitted to trading on any established national stock
exchange or market system, including without limitation the NASDAQ National
Market System, on the date in question, then the Fair Market Value shall be
equal to the closing sales price for such Shares as quoted on such national
exchange or system on such date; or
(ii) if the Shares are admitted to quotation on NASDAQ or are regularly quoted
by a recognized securities dealer but selling prices are not reported on the
date in question, then the Fair Market Value shall be equal to the mean between
the bid and asked prices of the Shares reported for such date.
In each case, the applicable price shall be the price reported in The Wall
Street Journal or such other source as the Committee deems reliable;

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provided, however, that if there is no such reported price for the Shares for
the date in question, then the Fair Market Value shall be equal to the price
reported on the last preceding date for which such price exists. If neither
(i) or (ii) are applicable, then the Fair Market Value shall be determined by
the Committee in good faith on such basis as it deems appropriate.
(t) “Fiscal Year” means the Company’s fiscal year.
(u) “Incentive Stock Option” or “ISO” means an incentive stock option described
in Code Section 422.
(v) “Key Service Provider” means an Employee, Director, Non-Employee Director or
Consultant who has been selected by the Committee to receive an Award under the
Plan.
(w) “Non-Employee Director” means a member of the Board who is not an Employee.
(x) “Nonstatutory Stock Option” or “NSO” means a stock option that is not an
ISO.
(y) “Option” means an ISO or NSO granted under the Plan entitling the Optionee
to purchase Shares.
(z) “Optionee” means an individual, estate or other entity that holds an Option.
(aa) “Parent” means any corporation (other than the Company) in an unbroken
chain of corporations ending with the Company, if each of the corporations other
than the Company owns stock possessing 50% or more of the total combined voting
power of all classes of stock in one of the other corporations in such chain. A
corporation that attains the status of a Parent on a date after the adoption of
the Plan shall be considered a Parent commencing as of such date.
(bb) “Participant” means an individual or estate or other entity that holds an
Award.
(cc) “Performance Goals” means one or more objective measurable performance
goals established by the Committee with respect to a Performance Period based
upon one or more factors, including, but not limited to: (i) operating income;
(ii) earnings before interest, taxes, depreciation and amortization;
(iii) earnings; (iv) cash flow; (v) market share; (vi) sales or revenue;
(vii) expenses; (viii) cost of goods sold; (ix) profit/loss or profit margin;
(x) working capital; (xi) return on equity or assets; (xii) earnings per share;
(xiii) economic value added; (xiv) price/earnings ratio; (xv) debt or
debt-to-equity; (xvi) accounts receivable; (xvii) writeoffs; (xviii) cash;
(xix) assets; (xx) liquidity; (xxi) operations; (xxii) intellectual property
(e.g., patents); (xxiii) product development; (xxiv) regulatory activity;
(xxv) manufacturing, production or inventory; (xxvi) mergers and acquisitions or
divestitures; and/or (xxvii) financings, each with respect to the Company and/or
one or more of its Parent, Subsidiaries, Affiliates or operating units. Awards
issued to persons who are not Covered Employees may take into account other
factors.

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(dd) “Performance Period” means any period not exceeding 36 months as determined
by the Committee, in its sole discretion. The Committee may establish different
Performance Periods for different Participants, and the Committee may establish
concurrent or overlapping Performance Periods.
(ee) “Plan” means this Foundry Networks, Inc. 2006 Stock Incentive Plan as it
may be amended from time to time.
(ff) “Re-Price” means that the Company has lowered or reduced the Exercise Price
of outstanding Options and/or outstanding SARs for any Participant(s) in a
manner described by Item 402(i)(1) of SEC Regulation S-K (or its successor
provision).
(gg) “SAR Agreement” means the agreement described in Section 7 evidencing a
Stock Appreciation Right.
(hh) “SEC” means the Securities and Exchange Commission.
(ii) “Section 16 Persons” means those officers, directors or other persons who
are subject to 16 of the Exchange Act.
(jj) “Securities Act” means the Securities Act of 1933, as amended.
(kk) “Service” means service as an Employee, Director, Non-Employee Director or
Consultant. A Participant’s Service does not terminate if he or she is an
Employee and goes on a bona fide leave of absence that was approved by the
Company in writing and the terms of the leave provide for continued service
crediting, or when continued service crediting is required by applicable law.
However, for purposes of determining whether an Option is entitled to continuing
ISO status, an Employee’s Service will be treated as terminating 90 days after
such Employee went on leave, unless such Employee’s right to return to active
work is guaranteed by law or by a contract. Service terminates in any event when
the approved leave ends, unless such Employee immediately returns to active
work. Further, unless otherwise determined by the Committee, a Participant’s
Service will not terminate merely because of a change in the capacity in which
the Participant provides service to the Company, a Parent, Subsidiary or
Affiliate, or a transfer between entities (the Company or any Parent,
Subsidiary, or Affiliate); provided that there is no interruption or other
termination of Service.
(ll) “Share” means one share of Common Stock.
(mm) “Stock Appreciation Right” or “SAR” means a stock appreciation right
awarded under the Plan.
(nn) “Stock Grant” means Shares awarded under the Plan.
(oo) “Stock Grant Agreement” means the agreement described in Section 8
evidencing a Stock Grant.

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(pp) “Stock Option Agreement” means the agreement described in Section 6
evidencing an Option.
(qq) “Stock Unit” means a bookkeeping entry representing the equivalent of one
Share awarded under the Plan.
(rr) “Stock Unit Agreement” means the agreement described in Section 9
evidencing a Stock Unit.
(ss) “Subsidiary” means any corporation (other than the Company) in an unbroken
chain of corporations beginning with the Company, if each of the corporations
other than the last corporation in the unbroken chain owns stock possessing 50%
or more of the total combined voting power of all classes of stock in one of the
other corporations in such chain. A corporation that attains the status of a
Subsidiary on a date after the adoption of the Plan shall be considered a
Subsidiary commencing as of such date.
(tt) “10-Percent Stockholder” means an individual who owns more than 10% of the
total combined voting power of all classes of outstanding stock of the Company,
its Parent or any of its Subsidiaries. In determining stock ownership, the
attribution rules of Code Section 424(d) shall be applied.
SECTION 3. ADMINISTRATION.
(a) Committee Composition. The Board or a Committee appointed by the Board shall
administer the Plan. The Committee shall generally have membership composition
which enables (i) Awards to Section 16 Persons to qualify as exempt from
liability under Section 16(b) of the Exchange Act and (ii) Awards to Covered
Employees to qualify as performance-based compensation as provided under Code
Section 162(m). However, the Board may also appoint one or more separate
Committees, each composed of one or more directors of the Company who need not
qualify under Rule 16b-3 or Code Section 162(m), that may administer the Plan
with respect to Key Service Providers who are not Section 16 Persons or Covered
Employees, respectively, may grant Awards under the Plan to such Key Service
Providers and may determine all terms of such Awards. Members of any such
Committee shall serve for such period of time as the Board may determine and
shall be subject to removal by the Board at any time. The Board may also at any
time terminate the functions of the Committee and reassume all powers and
authority previously delegated to the Committee.
Notwithstanding the foregoing, the Board shall administer the Plan with respect
to all Awards granted to Non-Employee Directors.
The Board and any Committee appointed to administer the plan is referred to
herein as the “Committee”.
(b) Authority of the Committee. Subject to the provisions of the Plan, the
Committee shall have the full authority, in its sole discretion, to take any
actions it deems necessary or advisable for the administration of the Plan. Such
actions shall include:

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  (i)   selecting Key Service Providers who are to receive Awards under the
Plan;     (ii)   determining the type, number, vesting requirements and other
features and conditions of such Awards;     (iii)   amending any outstanding
Awards;     (iv)   accelerating the vesting, or extending the post-termination
exercise term, of Awards at any time and under such terms and conditions as it
deems appropriate;     (v)   interpreting the Plan and any Award Agreement;    
(vi)   correcting any defect, supplying any omission or reconciling any
inconsistency in the Plan or any Award Agreement;     (vii)   adopting such
rules or guidelines as it deems appropriate to implement the Plan;     (viii)  
making all other decisions relating to the operation of the Plan; and     (ix)  
adopting such plans or subplans as may be deemed necessary or appropriate to
provide for the participation by employees of the Company, its Parent,
Subsidiaries and Affiliates who reside outside of the U.S., which plans and/or
subplans shall be attached hereto as Appendices.

The Committee’s determinations under the Plan shall be final and binding on all
persons.
(c) Indemnification. To the maximum extent permitted by applicable law, each
member of the Committee shall be indemnified and held harmless by the Company
against and from (i) any loss, cost, liability, or expense that may be imposed
upon or reasonably incurred by him or her in connection with or resulting from
any claim, action, suit, or proceeding to which he or she may be a party or in
which he or she may be involved by reason of any action taken or failure to act
under the Plan or any Award Agreement, and (ii) from any and all amounts paid by
him or her in settlement thereof, with the Company’s approval, or paid by him or
her in satisfaction of any judgment in any such claim, action, suit, or
proceeding against him or her, provided he or she shall give the Company an
opportunity, at its own expense, to handle and defend the same before he or she
undertakes to handle and defend it on his or her own behalf. The foregoing right
of indemnification shall not be exclusive of any other rights of indemnification
to which such persons may be entitled under the Company’s Articles of
Incorporation or Bylaws, by contract, as a matter of law, or otherwise, or under
any power that the Company may have to indemnify them or hold them harmless.

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SECTION 4. GENERAL.
(a) General Eligibility. Only Employees, Directors, Non-Employee Directors and
Consultants shall be eligible to participate in the Plan.
(b) Incentive Stock Options. Only Key Service Providers who are Employees of the
Company, a Parent or a Subsidiary shall be eligible for the grant of ISOs. In
addition, a Key Service Provider who is a 10-Percent Stockholder shall not be
eligible for the grant of an ISO unless the requirements set forth in Code
Section 422(c)(5) are satisfied.
(c) Restrictions on Shares. Any Shares issued pursuant to an Award shall be
subject to such rights of repurchase, rights of first refusal and other transfer
restrictions as the Committee may determine, in its sole discretion. Such
restrictions shall apply in addition to any restrictions that may apply to
holders of Shares generally and shall also comply to the extent necessary with
applicable law. In no event shall the Company be required to issue fractional
Shares under this Plan.
(d) Beneficiaries. Unless stated otherwise in an Award Agreement and then only
to the extent permitted by applicable law, a Participant may designate one or
more beneficiaries with respect to an Award by timely filing the prescribed form
with the Company. A beneficiary designation may be changed by filing the
prescribed form with the Company at any time before the Participant’s death. If
no beneficiary was designated or if no designated beneficiary survives the
Participant, then after a Participant’s death any vested Award(s) shall be
transferred or distributed to the Participant’s estate.
(e) Performance Conditions. The Committee may, in its discretion, include
performance conditions in an Award. If performance conditions are included in
Awards to Covered Employees and such Awards are intended to qualify as
“performance-based compensation” under Code Section 162(m), then such Awards
will be subject to the achievement of Performance Goals with respect to a
Performance Period established by the Committee. Such Awards shall be granted
and administered pursuant to the requirements of Code Section 162(m). Before any
Shares underlying an Award or any Award payments are released to a Covered
Employee with respect to a Performance Period, the Committee shall certify in
writing that the Performance Goals for such Performance Period have been
satisfied. Awards with performance conditions that are granted to Key Service
Providers who are not Covered Employees need not comply with the requirements of
Code Section 162(m).
(f) No Rights as a Stockholder. A Participant, or a transferee of a Participant,
shall have no rights as a stockholder with respect to any Common Stock covered
by an Award until such person has satisfied all of the terms and conditions to
receive such Common Stock, has satisfied any applicable withholding or tax
obligations relating to the Award and the Shares have been issued (as evidenced
by an appropriate entry on the books of the Company or a duly authorized
transfer agent of the Company).
(g) Termination of Service. Unless the applicable Award Agreement or, with
respect to a Participant who resides in the U.S., the applicable employment
agreement provides

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otherwise, the following rules shall govern the vesting, exercisability and term
of outstanding Awards held by a Participant in the event of termination of such
Participant’s Service (in all cases subject to the maximum term of the Option
and/or SAR as applicable): (i) upon termination of Service for any reason, all
unvested portions of any outstanding Awards shall be immediately forfeited
without consideration and the vested portions of any outstanding Stock Units
shall be settled upon termination; (ii) if Service is terminated for Cause, then
all unexercised Options and/or SARs, unvested portions of Stock Units and
unvested portions of Stock Grants shall terminate and be forfeited immediately
without consideration; (iii) if Service is terminated for any reason other than
for Cause, death or Disability, then the vested portion of his or her
then-outstanding Options and/or SARs may be exercised by such Participant or his
or her personal representative within 3 months after the date of such
termination; or (iv) if Service is terminated due to death or Disability, the
vested portion of his or her then-outstanding Options and/or SARs may be
exercised within 12 months after the date of such termination.
SECTION 5. SHARES SUBJECT TO PLAN AND SHARE LIMITS.
(a) Basic Limitation. The stock issuable under the Plan shall be authorized but
unissued Shares or treasury shares. The aggregate number of Shares reserved for
Awards under the Plan is 26,000,000 Shares, subject to adjustment pursuant to
Section 10. Shares issued as Stock Grants or pursuant to Stock Units will count
against the Shares available for issuance under the Plan as 2.3 Shares for every
1 Share issued in connection with the Award.
(b) Additional Shares. If Awards are forfeited or are terminated for any reason
before vesting or being exercised, then the Shares underlying such Awards shall
again become available for Awards under the Plan. SARs to be settled in Shares
shall be counted in full against the number of Shares available for issuance
under the Plan, regardless of the number of Shares issued upon settlement of the
SARs. If Awards are settled in cash, the Shares that would have been delivered
had there been no cash settlement shall not be counted against the Shares
available for issuance under the Plan.
(c) Dividend Equivalents. Any dividend equivalents distributed under the Plan
shall not reduce the number of Shares available for Awards.
(d) Share Limits.
(i) Limits on Options. No Key Service Provider shall receive Options during any
Fiscal Year covering in excess of 3,000,000 Shares, subject to adjustment
pursuant to Section 10. The aggregate maximum number of Shares that may be
issued in connection with ISOs shall be 26,000,000 Shares, subject to adjustment
pursuant to Section 10.
(ii) Limits on SARs. No Key Service Provider shall receive SARs during any
Fiscal Year covering in excess of 3,000,000 Shares, subject to adjustment
pursuant to Section 10.

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(iii) Limits on Stock Grants and Stock Units. No Key Service Provider shall
receive Stock Grants or Stock Units during any Fiscal Year covering, in the
aggregate, in excess of 1,500,000 Shares, subject to adjustment pursuant to
Section 10.
SECTION 6. TERMS AND CONDITIONS OF OPTIONS.
(a) Stock Option Agreement. Each Option granted under the Plan shall be
evidenced and governed exclusively by a Stock Option Agreement between the
Optionee and the Company. Such Option shall be subject to all applicable terms
and conditions of the Plan and may be subject to any other terms and conditions
that are not inconsistent with the Plan and that the Committee deems appropriate
for inclusion in a Stock Option Agreement. The provisions of the various Stock
Option Agreements entered into under the Plan need not be identical. The Stock
Option Agreement shall specify whether the Option is an ISO or an NSO.
(b) Number of Shares. Each Stock Option Agreement shall specify the number of
Shares that are subject to the Option, which number is subject to adjustment in
accordance with Section 10.
(c) Exercise Price. Each Stock Option Agreement shall specify the Option’s
Exercise Price which shall be established by the Committee and is subject to
adjustment in accordance with Section 10. The Exercise Price of an Option shall
not be less than 100% of the Fair Market Value (110% for an ISO granted to a
10-Percent Stockholder) on the date of grant.
(d) Exercisability and Term. Each Stock Option Agreement shall specify the date
when all or any installment of the Option is to become exercisable and may
include performance conditions or Performance Goals pursuant to Section 4(e).
The Stock Option Agreement shall also specify the maximum term of the Option;
provided that the maximum term of an Option shall in no event exceed 5 years
from the date of grant. A Stock Option Agreement may provide for accelerated
vesting in the event of the Participant’s death, Disability or other events.
Notwithstanding any other provision of the Plan or the Stock Option Agreement,
no Option can be exercised after the expiration date provided in the applicable
Stock Option Agreement.
(e) Payment for Option Shares. The Exercise Price of an Option shall be paid in
cash at the time of exercise, except as follows and if so provided for in the
applicable Stock Option Agreement:
(i) Surrender of Stock. Payment of all or any part of the Exercise Price may be
made with Shares which have already been owned by the Optionee; provided that
the Committee may, in its sole discretion, require that Shares tendered for
payment be previously held by the Optionee for a minimum duration (e.g., to
avoid financial accounting charges to the Company’s earnings).
(ii) Cashless Exercise. Payment of all or a part of the Exercise Price may be
made through Cashless Exercise.

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(iii) Other Forms of Payment. Payment may be made in any other form that is
consistent with applicable laws, regulations and rules and approved by the
Committee.
In the case of an ISO granted under the Plan, except to the extent permitted by
applicable law, payment shall be made only pursuant to the express provisions of
the applicable Stock Option Agreement. In the case of an NSO granted under the
Plan, the Committee may, in its discretion at any time, accept payment in any
form(s) described in this Section 6(e).
(f) Modifications or Assumption of Options. Within the limitations of the Plan,
the Committee may modify, extend or assume outstanding options or may accept the
cancellation of outstanding options (whether granted by the Company or by
another issuer) in return for the grant of new Options for the same or a
different number of Shares and at the same or a different Exercise Price.
Notwithstanding the preceding sentence or anything to the contrary, no
modification of an Option shall, without the consent of the Optionee, impair his
or her rights or obligations under such Option and, unless there is approval by
the Company stockholders, the Committee may not Re-Price outstanding Options.
(g) Assignment or Transfer of Options. Except as otherwise provided in the
applicable Stock Option Agreement and then only to the extent such transfer is
otherwise permitted by applicable law and is not a transfer for value (unless
such transfer for value is approved in advance by the Company’s stockholders),
no Option shall be transferable by the Optionee other than by will or by the
laws of descent and distribution. Except as otherwise provided in the applicable
Stock Option Agreement, an Option may be exercised during the lifetime of the
Optionee only or by the guardian or legal representative of the Optionee. No
Option or interest therein may be assigned, pledged or hypothecated by the
Optionee during his or her lifetime, whether by operation of law or otherwise,
or be made subject to execution, attachment or similar process.
SECTION 7. TERMS AND CONDITIONS OF STOCK APPRECIATION RIGHTS.
(a) SAR Agreement. Each SAR granted under the Plan shall be evidenced by a SAR
Agreement between the Participant and the Company. Such SAR shall be subject to
all applicable terms of the Plan and may be subject to any other terms that are
not inconsistent with the Plan. A SAR Agreement may provide for a maximum limit
on the amount of any payout notwithstanding the Fair Market Value on the date of
exercise of the SAR. The provisions of the various SAR Agreements entered into
under the Plan need not be identical. SARs may be granted in consideration of a
reduction in the Participant’s compensation.
(b) Number of Shares. Each SAR Agreement shall specify the number of Shares to
which the SAR pertains, which number is subject to adjustment in accordance with
Section 10.

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(c) Exercise Price. Each SAR Agreement shall specify the Exercise Price, which
is subject to adjustment in accordance with Section 10. A SAR Agreement may
specify an Exercise Price that varies in accordance with a predetermined formula
while the SAR is outstanding. The Exercise Price of a SAR shall not be less than
100% of the Fair Market Value on the date of grant.
(d) Exercisability and Term. Each SAR Agreement shall specify the date when all
or any installment of the SAR is to become exercisable and may include
performance conditions or Performance Goals pursuant to Section 4(e). The SAR
Agreement shall also specify the maximum term of the SAR which shall not exceed
5 years from the date of grant. A SAR Agreement may provide for accelerated
exercisability in the event of the Participant’s death, Disability or other
events. SARs may be awarded in combination with Options or Stock Grants, and
such an Award shall provide that the SARs will not be exercisable unless the
related Options or Stock Grants are forfeited. A SAR may be included in an ISO
only at the time of grant but may be included in an NSO at the time of grant or
at any subsequent time, but not later than six months before the expiration of
such NSO. Notwithstanding any other provision of the Plan or the SAR Agreement,
no SAR can be exercised after the expiration date provided in the applicable SAR
Agreement.
(e) Exercise of SARs. If, on the date when a SAR expires, the Exercise Price
under such SAR is less than the Fair Market Value on such date but any vested
portion of such SAR has not been exercised or surrendered, then such SAR shall
automatically be deemed to be exercised as of such date with respect to such
vested portion. Upon exercise of a SAR, the Participant (or any person having
the right to exercise the SAR after Participant’s death) shall receive from the
Company (i) Shares, (ii) cash or (iii) any combination of Shares and cash, as
the Committee shall determine at the time of grant of the SAR, in its sole
discretion. The amount of cash and/or the Fair Market Value of Shares received
upon exercise of SARs shall, in the aggregate, be equal to the amount by which
the Fair Market Value (on the date of surrender) of the Shares subject to the
SARs exceeds the Exercise Price of the Shares.
(f) Modification or Assumption of SARs. Within the limitations of the Plan, the
Committee may modify, extend or assume outstanding SARs or may accept the
cancellation of outstanding stock appreciation rights (including stock
appreciation rights granted by another issuer) in return for the grant of new
SARs for the same or a different number of Shares and at the same or a different
Exercise Price. Notwithstanding the preceding sentence or anything to the
contrary, no modification of a SAR shall, without the consent of the
Participant, impair his or her rights or obligations under such SAR and, unless
there is approval by the Company stockholders, the Committee may not Re-Price
outstanding SARs.
(g) Assignment or Transfer of SARs. Except as otherwise provided in the
applicable SAR Agreement and then only to the extent such transfer is otherwise
permitted by applicable law and is not a transfer for value (unless such
transfer for value is approved in advance by the Company’s stockholders), no SAR
shall be transferable by the Participant other than by will or by the laws of
descent and distribution. Except as otherwise

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provided in the applicable SAR Agreement, a SAR may be exercised during the
lifetime of the Participant only or by the guardian or legal representative of
the Participant. No SAR or interest therein may be assigned, pledged or
hypothecated by the Participant during his or her lifetime, whether by operation
of law or otherwise, or be made subject to execution, attachment or similar
process.
SECTION 8. TERMS AND CONDITIONS FOR STOCK GRANTS.
(a) Time, Amount and Form of Awards. Awards under this Section 8 may be granted
in the form of a Stock Grant. A Stock Grant may be awarded in combination with
NSOs, and such an Award may provide that the Stock Grant will be forfeited in
the event that the related NSOs are exercised.
(b) Stock Grant Agreement. Each Stock Grant awarded under the Plan shall be
evidenced and governed exclusively by a Stock Grant Agreement between the
Participant and the Company. Each Stock Grant shall be subject to all applicable
terms and conditions of the Plan and may be subject to any other terms and
conditions that are not inconsistent with the Plan that the Committee deems
appropriate for inclusion in the applicable Stock Grant Agreement. The
provisions of the Stock Grant Agreements entered into under the Plan need not be
identical.
(c) Payment for Stock Grants. Stock Grants may be issued with or without cash
consideration under the Plan.
(d) Vesting Conditions. Each Stock Grant may or may not be subject to vesting.
Vesting shall occur, in full or in installments, upon satisfaction of the
conditions specified in the Stock Grant Agreement which may include performance
conditions or Performance Goals pursuant to Section 4(e). A Stock Grant
Agreement may provide for accelerated vesting in the event of the Participant’s
death, Disability, or other events.
(e) Assignment or Transfer of Stock Grants. Except as otherwise provided in the
applicable Stock Grant Agreement and then only to the extent such transfer is
otherwise permitted by applicable law and is not a transfer for value (unless
such transfer for value is approved in advance by the Company’s stockholders),
no unvested Stock Grant shall be transferable other than by will or by the laws
of descent and distribution. Except as otherwise provided in the applicable
Stock Grant Agreement, no unvested Stock Grant or interest therein may be
anticipated, assigned, attached, garnished, optioned, transferred or made
subject to any creditor’s process, whether voluntarily, involuntarily or by
operation of law. Any act in violation of this Section 8(e) shall be void.
(f) Voting and Dividend Rights. The holder of a Stock Grant awarded under the
Plan shall have the same voting, dividend and other rights as the Company’s
other stockholders. A Stock Grant Agreement, however, may require that the
holder of such Stock Grant invest any cash dividends received in additional
Shares subject to the Stock Grant. Such additional Shares and any Shares
received as a dividend pursuant to the Stock Grant shall be subject to the same
conditions and restrictions as the Stock Grant

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with respect to which the dividends were paid. Such additional Shares subject to
the Stock Grant shall not reduce the number of Shares available for issuance
under Section 5.
(g) Modification or Assumption of Stock Grants. Within the limitations of the
Plan, the Committee may modify or assume outstanding Stock Grants or may accept
the cancellation of outstanding stock grants (including stock granted by another
issuer) in return for the grant of new Stock Grants for the same or a different
number of Shares. Notwithstanding the preceding sentence or anything to the
contrary, no modification of a Stock Grant shall, without the consent of the
Participant, impair his or her rights or obligations under such Stock Grant.
SECTION 9. TERMS AND CONDITIONS OF STOCK UNITS.
(a) Stock Unit Agreement. Each Stock Unit granted under the Plan shall be
evidenced by a Stock Unit Agreement between the Participant and the Company.
Such Stock Units shall be subject to all applicable terms of the Plan and may be
subject to any other terms that are not inconsistent with the Plan. The
provisions of the various Stock Unit Agreements entered into under the Plan need
not be identical. Stock Units may be granted in consideration of a reduction in
the Participant’s other compensation.
(b) Number of Shares. Each Stock Unit Agreement shall specify the number of
Shares to which the Stock Unit pertains, which number is subject to adjustment
in accordance with Section 10.
(c) Payment for Awards. To the extent that an Award is granted in the form of
Stock Units, no cash consideration shall be required of the Award recipients.
(d) Vesting Conditions. Each Stock Unit may or may not be subject to vesting.
Vesting shall occur, in full or in installments, upon satisfaction of the
conditions specified in the Stock Unit Agreement which may include performance
conditions or Performance Goals pursuant to Section 4(e). A Stock Unit Agreement
may provide for accelerated vesting in the event of the Participant’s death,
Disability, or other events.
(e) Form and Time of Settlement of Stock Units. Settlement of vested Stock Units
may be made in the form of (a) cash, (b) Shares or (c) any combination of both,
as determined by the Committee at the time of the grant of the Stock Units, in
its sole discretion. Methods of converting Stock Units into cash may include
(without limitation) a method based on the average Fair Market Value of Shares
over a series of trading days. Vested Stock Units may be settled in a lump sum
or in installments. The distribution may occur or commence when the vesting
conditions applicable to the Stock Units have been satisfied or have lapsed, or
it may be deferred, in accordance with applicable law, to any later date. The
amount of a deferred distribution may be increased by an interest factor or by
dividend equivalents.
(f) Voting and Dividend Rights. The holders of Stock Units shall have no voting
rights. Prior to settlement or forfeiture, any Stock Unit awarded under the Plan
may, at the Committee’s discretion, carry with it a right to dividend
equivalents. Such right

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entitles the holder to be credited with an amount equal to all cash dividends
paid on one Share while the Stock Unit is outstanding. Dividend equivalents may
be converted into additional Stock Units. Settlement of dividend equivalents may
be made in the form of cash, in the form of Shares, or in a combination of both.
Prior to distribution, any dividend equivalents which are not paid shall be
subject to the same conditions and restrictions as the Stock Units to which they
attach.
(g) Creditors’ Rights. A holder of Stock Units shall have no rights other than
those of a general creditor of the Company. Stock Units represent an unfunded
and unsecured obligation of the Company, subject to the terms and conditions of
the applicable Stock Unit Agreement.
(h) Modification or Assumption of Stock Units. Within the limitations of the
Plan, the Committee may modify or assume outstanding Stock Units or may accept
the cancellation of outstanding stock units (including stock units granted by
another issuer) in return for the grant of new Stock Units for the same or a
different number of Shares. Notwithstanding the preceding sentence or anything
to the contrary, no modification of a Stock Unit shall, without the consent of
the Participant, impair his or her rights or obligations under such Stock Unit.
(i) Assignment or Transfer of Stock Units. Except as provided in the applicable
Stock Unit Agreement and then only to the extent such transfer is otherwise
permitted by applicable law and is not a transfer for value (unless such
transfer for value is approved in advance by the Company’s stockholders), Stock
Units shall not be transferable other than by will or by the laws of descent and
distribution. Except as otherwise provided in the applicable Stock Unit
Agreement, no Stock Unit or interest therein may be anticipated, assigned,
attached, garnished, optioned, transferred or made subject to any creditor’s
process, whether voluntarily, involuntarily or by operation of law. Any act in
violation of this Section 9(i) shall be void.
SECTION 10. PROTECTION AGAINST DILUTION.
(a) Adjustments. In the event of a subdivision of the outstanding Shares, a
declaration of a dividend payable in Shares, a declaration of a dividend payable
in a form other than Shares in an amount that has a material effect on the price
of Shares, a combination or consolidation of the outstanding Shares (by
reclassification or otherwise) into a lesser number of Shares, a
recapitalization, a spin-off or a similar occurrence, the Committee shall make
such adjustments as it, in its sole discretion, deems appropriate in one or more
of:
(i) the number of Shares and the kind of shares or securities available for
future Awards under Section 5;
(ii) the limits on Awards specified in Section 5;
(iii) the number of Shares and the kind of shares or securities covered by each
outstanding Award; or

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(iv) the Exercise Price under each outstanding SAR or Option.
(b) Participant Rights. Except as provided in this Section 10, a Participant
shall have no rights by reason of any issue by the Company of stock of any class
or securities convertible into stock of any class, any subdivision or
consolidation of shares of stock of any class, the payment of any stock dividend
or any other increase or decrease in the number of shares of stock of any class.
If by reason of an adjustment pursuant to this Section 10 a Participant’s Award
covers additional or different shares of stock or securities, then such
additional or different shares and the Award in respect thereof shall be subject
to all of the terms, conditions and restrictions which were applicable to the
Award and the Shares subject to the Award prior to such adjustment.
(c) Fractional Shares. Any adjustment of Shares pursuant to this Section 10
shall be rounded down to the nearest whole number of Shares. Under no
circumstances shall the Company be required to authorize or issue fractional
shares and no consideration shall be provided as a result of any fractional
shares not being issued or authorized.
SECTION 11. EFFECT OF A CHANGE IN CONTROL.
(a) Change in Control. In the event that the Company is a party to a Change in
Control, outstanding Awards shall be subject to the applicable agreement of
merger or reorganization. Such agreement may provide, without limitation, for
the assumption of outstanding Awards by the surviving corporation or its parent,
for their continuation by the Company (if the Company is a surviving
corporation), for accelerated vesting or for their cancellation with or without
consideration, in all cases without the consent of the Participant.
(b) Acceleration. Notwithstanding the foregoing, the Committee may determine, at
the time of grant of an Award or thereafter, that such Award shall become vested
and exercisable, in full or in part, in the event that the Company is a party to
a Change in Control.
(c) Dissolution. To the extent not previously exercised or settled, Options,
SARs and Stock Units shall terminate immediately prior to the dissolution or
liquidation of the Company.
SECTION 12. LIMITATIONS ON RIGHTS.
(a) Participant Rights. A Participant’s rights, if any, in respect of or in
connection with any Award is derived solely from the discretionary decision of
the Company to permit the individual to participate in the Plan and to benefit
from a discretionary Award. By accepting an Award under the Plan, a Participant
expressly acknowledges that there is no obligation on the part of the Company to
continue the Plan and/or grant any additional Awards. Any Award granted
hereunder is not intended to be compensation of a continuing or recurring
nature, or part of a Participant’s normal or expected compensation, and in no
way represents any portion of a Participant’s salary,

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compensation, or other remuneration for purposes of pension benefits, severance,
redundancy, resignation or any other purpose.
Neither the Plan nor any Award granted under the Plan shall be deemed to give
any individual a right to remain an employee, consultant or director of the
Company, a Parent, a Subsidiary or an Affiliate. The Company and its Parent,
Subsidiaries and Affiliates reserve the right to terminate the Service of any
person at any time, and for any reason, subject to applicable laws, the
Company’s Articles of Incorporation and Bylaws and any applicable written
employment agreement (if any), and such terminated person shall be deemed
irrevocably to have waived any claim to damages or specific performance for
breach of contract or dismissal, compensation for loss of office, tort or
otherwise with respect to the Plan or any outstanding Award that is forfeited
and/or is terminated by its terms or to any future Award.
(b) Stockholders’ Rights. Except as provided in Section 9(f), a Participant
shall have no dividend rights, voting rights or other rights as a stockholder
with respect to any Shares covered by his or her Award prior to the issuance of
such Shares (as evidenced by an appropriate entry on the books of the Company or
a duly authorized transfer agent of the Company). No adjustment shall be made
for cash dividends or other rights for which the record date is prior to the
date when such Shares are issued, except as expressly provided in Sections 9(f)
and 10.
(c) Regulatory Requirements. Any other provision of the Plan notwithstanding,
the obligation of the Company to issue Shares or other securities under the Plan
shall be subject to all applicable laws, rules and regulations and such approval
by any regulatory body as may be required. The Company reserves the right to
restrict, in whole or in part, the delivery of Shares or other securities
pursuant to any Award prior to the satisfaction of all legal requirements
relating to the issuance of such Shares or other securities, to their
registration, qualification or listing or to an exemption from registration,
qualification or listing.
SECTION 13. WITHHOLDING TAXES.
(a) General. A Participant shall make arrangements satisfactory to the Company
for the satisfaction of any withholding tax obligations that arise in connection
with his or her Award. The Company shall not be required to issue any Shares or
make any cash payment under the Plan until such obligations are satisfied.
(b) Share Withholding. The Committee may permit a Participant to satisfy all or
part of his or her withholding or income tax obligations by Cashless Exercise,
by having the Company withhold all or a portion of any Shares that otherwise
would be issued to him or her or by surrendering all or a portion of any Shares
that he or she previously acquired; provided that Shares withheld or previously
owned Shares that are tendered shall not exceed the amount necessary to satisfy
the Company’s tax withholding obligations at the minimum statutory withholding
rates, including, but not limited to, U.S. federal and state income taxes,
payroll taxes and foreign taxes, if applicable, unless the previously owned

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Shares have been held for the minimum duration necessary to avoid financial
accounting charges under applicable accounting guidance or as otherwise
permitted by the Committee in its sole and absolute discretion. Any payment of
taxes by assigning Shares to the Company may be subject to restrictions,
including, but not limited to, any restrictions required by rules of the SEC.
SECTION 14. DURATION AND AMENDMENTS.
(a) Term of the Plan. The Plan shall become effective upon its approval by the
Company’s stockholders. The Plan shall terminate on December 31, 2009 and may be
terminated on any earlier date pursuant to this Section 14.
(b) Right to Amend or Terminate the Plan. The Board may amend or terminate the
Plan at any time and for any reason. Any such termination of the Plan, or any
amendment thereof, shall not impair any Award previously granted under the Plan.
No Awards shall be granted under the Plan after the Plan’s termination. An
amendment of the Plan shall be subject to the approval of the Company’s
stockholders only to the extent such approval is required by applicable laws,
regulations or rules.

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