Document:

Exhibit 10.2

 

EXECUTIVE SEVERANCE AGREEMENT

 

This Executive Severance Agreement (“Agreement”) is between Carlisle Companies Incorporated, a Delaware corporation (the “Corporation”), and                                                                             (“Executive”).

 

RECITALS

 

The Board of Directors of the Corporation has approved the execution of severance agreements with certain key executives of the Corporation and its subsidiaries.

 

Should the Corporation receive any proposal from a third person concerning a possible business combination with, or acquisition of equity securities of the Corporation, the Board believes it imperative that the Corporation and the Board be able to rely upon Executive to continue in his position and rely upon his advice without concern that he might be distracted by the personal uncertainties and risks created by such a proposal.

 

Should the Corporation receive any such proposals, in addition to Executive’s regular duties, he may be called upon to assist in the assessment of such proposals, advise management and the Board as to whether such proposals would be in the best interests of the Corporation and its shareholders, and take such other actions as the Board might determine to be appropriate.

 

To assure the Corporation that it will have the continued dedication of Executive and the availability of his advice and counsel notwithstanding the possibility, threat or occurrence of a bid to take over control of the Corporation, and to induce Executive to remain in the employ of the Corporation, and for other good and valuable consideration, the Corporation and Executive agree as follows:

 

In the event a third person begins a tender or exchange offer, circulates a proxy to shareholders, or takes other steps to effect a Change of Control of the Corporation (as defined below), Executive agrees that he will not voluntarily leave the employ of the Corporation, and will render the services contemplated in the recitals to this Agreement until the third person has abandoned or terminated his efforts to effect a Change of Control or until a Change of Control has occurred.

 

In the event of Executive’s Separation from Service (as defined below) due to termination of Executive’s employment by the Corporation (excluding for Cause, death or disability) or Executive’s resignation for Good Reason (as defined below), in either case within three (3) years after a Change of Control of the Corporation (as defined below), the Corporation will provide:

 

A.            Cash Payment.  On or before Executive’s last day of employment with the Corporation, the Corporation will pay to Executive as compensation for services rendered to the Corporation a lump sum cash amount (subject to any applicable payroll or other taxes required to be withheld) equal to three (3) times the highest annual compensation (including base salary and

 

 

annual cash bonus) paid or payable to Executive by the Corporation for any of the three (3) years ending with the date of Executive’s Separation from Service.

 

B.            Stock Options and Restricted Stock.  Any outstanding but unexercised stock options held by Executive under any of the Corporation’s equity compensation plans and programs will be immediately exercisable, and any unvested restricted stock held by Executive under any of the Corporation’s equity compensation plans and programs will be immediately vested and free of all restrictions.  In addition all such stock options will continue to be exercisable for the remaining original term thereof.

 

C.            Special Retirement Benefits.  Executive will be eligible to receive “Special Retirement Benefits” so that the total retirement benefits he receives will approximate the retirement benefits he would have received had he continued in the employ of the Corporation for three (3) years following his Separation from Service.  These benefits will include all ancillary benefits, such as early retirement, supplemental retirement and survivor rights and benefits available at retirement.  If Executive’s credited service with the Corporation plus three (3) years would result in vested benefits and/or eligibility for ancillary benefits under the Corporation’s pension plans, the amount payable to Executive or his beneficiaries shall equal the excess of the amount specified in clause (i) over that in (ii) below:

 

(i)            The benefits that would be paid to Executive or his beneficiaries, if the three (3) years following his Separation from Service are added to his credited service under the Corporation’s pension plans, and his earnings during such period are equal to the amount of the cash payment specified in Paragraph A;

 

(ii)           The benefit that is payable to Executive or his beneficiaries under the Corporation’s pension plans.

 

The Special Retirement Benefits are provided on an unfunded basis and are not intended to meet the qualification requirements of Section 401 of the Code.  The Special Retirement Benefits shall be payable solely from the general assets of the Corporation or its appropriate affiliate.

 

D.            Other Provisions.

 

(i)            Insurance and Other Special Benefits.  Executive’s participation in the life, accident and health insurance plans of the Corporation, and in fringe benefits provided Executive prior to the Change of Control or his Separation from Service, shall be continued, or equivalent benefits provided, by the Corporation, at no direct cost to him, for a period of three (3) years from the date of his Separation from Service.

 

(ii)           Relocation Assistance.  Should Executive move his residence in order to pursue other business opportunities within two (2) years of his Separation from Service, he will be reimbursed for any expenses incurred in that relocation (including taxes payable on the reimbursement) which are not reimbursed by another employer.  Benefits under this provision will include the assistance in selling Executive’s home which was

 

 

customarily provided by the Corporation to transferred executives prior to the Change of Control.

 

(iii)          Incentive Compensation.  Any awards previously made to Executive under any long-term incentive programs of the Corporation and not previously paid shall immediately vest on the date of his Separation from Service and shall be paid on that date and included as compensation in the year paid.

 

(iv)          Savings and Other Plans.  Executive’s participation in any applicable savings, retirement, profit sharing, stock option, and/or restricted stock plan of the Corporation or any of its subsidiaries shall continue only through his Separation from Service.  Any terminating distribution and/or vested rights under such Plans shall be governed by the terms of those respective Plans.

 

(v)           Continuing Obligations.  Executive shall retain in confidence any confidential information known to him concerning the Corporation and its business so long as such information is not publicly disclosed.

 

E.            Definition of Good Reason.  For the purpose of this Agreement, “Good Reason” for termination by Executive of Executive’s employment shall mean the occurrence (without Executive’s express written consent) of any the following (i) a material adverse change in Executive’s title, duties or responsibilities (including reporting responsibilities); (ii) a material reduction by the Corporation in Executive’s annual base salary; (iii) a material change in the incentive compensation plans of the Corporation that results in a material impairment of Executive’s opportunity to earn incentive compensation; (iv) a change of more than 50 miles in the geographic location in which Executive must perform services for the Corporation; or (v) the failure of the Corporation to pay Executive any material compensation when due.  Executive’s right to terminate Executive’s employment for Good Reason shall not be affected by Executive’s incapacity due to physical or mental illness.  Executive’s continued employment shall not constitute consent to, or a waiver of rights with respect to, any act or failure to act constituting Good Reason hereunder.

 

For purposes of any determination regarding the existence of Good Reason, any claim by Executive that Good Reason exists shall be presumed to be correct unless the Corporation establishes by clear and convincing evidence that Good Reason does not exist.

 

F.             Definition of Cause.  For the purpose of this Agreement, “Cause” means: (i) the conviction of or plea of no contest by Executive to a felony or to a misdemeanor where active imprisonment is imposed, (ii) the deliberate neglect of, willful misconduct in the performance of, or continued failure to substantially perform, Executive’s material duties as an employee of the Corporation; (iii) Executive’s deliberate and material violation of any Corporation policy; or (iv) Executive’s deliberate breach of fiduciary duties owed to the Corporation; provided, that the Corporation provides written notice to Executive of the occurrence of any circumstance or event described in clauses (ii), (iii), or (iv), and Executive has failed to remedy such circumstance or event within thirty (30) days following Executive’s receipt of such notice.

 

 

G.            Definition of Change of Control.  For the purpose of this Agreement, a “Change of Control” shall be deemed to have taken place if:

 

(i)            any third person, including a “group” as defined in Section 13(d)(3) of the Securities Exchange Act of 1934, acquires shares of the Corporation having 20% or more of the total number of votes that may be cast for the election of Directors of the Corporation; or

 

(ii)           as the result of any cash tender or exchange offer, merger or other business combination, sale of assets or contested election, or any combination of the foregoing transactions, the persons who were directors of the Corporation before the transaction shall cease to constitute a majority of the Board of Directors of the Corporation or any successor to the Corporation.

 

H.            Definition of Separation from Service.  For the purpose of this Agreement, “Separation from Service” means the termination of Executive’s employment with the Corporation (including its subsidiaries), provided such termination also constitutes a separation from service under Section 409A of the Code.

 

I.             Reduction of Payments.

 

(i)            Anything in this Agreement to the contrary notwithstanding, in the event that any payment or benefit received or to be received by Executive in connection with a Change in Control or the termination of Executive’s employment (whether pursuant to the terms of this Agreement or any other plan, arrangement or agreement with the Corporation, any person whose actions result in a Change in Control or any person affiliated with the Corporation or such person) (all such payments and benefits, the “Total Payments”) would not be deductible (in whole or part), by the Corporation, an affiliate or person making such payment or providing such benefit as a result of Section 280G of the Code, then the portion of the Total Payments due under this Agreement (the “Agreement Payments”) shall be reduced if, and only if, such reduction results in Executive’s receipt, on an after-tax basis, of a greater amount of the Total Payments after taking into account all applicable federal, state and local employment taxes, income taxes and the Excise Tax (all computed at the highest applicable marginal rate).  Any reduction in the Agreement Payments required by this Paragraph I(i) shall first reduce the cash payments due under Paragraph A (if necessary, to zero), and all other Agreement Payments shall thereafter be reduced (if necessary, to zero); provided, however, that Executive may elect to have noncash Agreement Payments reduced (or eliminated) prior to any reduction of cash Agreement Payments.

 

(ii)           For purposes of this Paragraph I, (i) no portion of the Total Payments the receipt or enjoyment of which Executive shall have waived at such time and in such manner as not to constitute a “payment” within the meaning of Section 280G(b) of the Code shall be taken into account, (ii) no portion of the Total Payments shall be taken into account which, in the opinion of tax counsel reasonably acceptable to Executive and selected by the accounting firm which was, immediately prior to the Change in Control,

 

 

the Corporation’s independent auditor (the “Auditor”), does not constitute a “parachute payment” within the meaning of Section 280G(b)(2) of the Code, including by reason of Section 280G(b)(4)(A) of the Code, and (iii) the value of any noncash benefit or any deferred payment or benefit included in the Total Payments shall be determined by the Auditor in accordance with the principles of Sections 280G(d)(3) and (4) of the Code.

 

J.             Compliance with Code Section 409A.  Notwithstanding anything in this Agreement to the contrary, if any amount or benefit that the Corporation determines would constitute non-exempt “deferred compensation” for purposes of Section 409A of the Code would otherwise be payable or distributable under this Agreement by reason of Executive’s Separation from Service, then to the extent necessary to comply with Code Section 409A:

 

(i)            if the payment or distribution is payable in a lump sum, Executive’s right to receive payment or distribution of such non-exempt deferred compensation will be delayed until the earlier of Executive’s death or the first day of the seventh month following Executive’s Separation from Service; and

 

(ii)           if the payment or distribution is payable over time, the amount of such non-exempt deferred compensation that would otherwise be payable during the six (6) month period immediately following Executive’s Separation from Service will be accumulated and Executive’s right to receive payment or distribution of such accumulated amount will be delayed until the earlier of Executive’s death or the first day of the seventh month following Executive’s Separation from Service and paid on the earlier of such dates, without interest, and the normal payment or distribution schedule for any remaining payments or distributions will commence.

 

To the extent any expense reimbursement or in-kind benefit to which Executive is or may be entitled to receive under this Agreement constitutes non-exempt “deferred compensation” for purposes of Section 409A of the Code, then (i) such reimbursement shall be paid to Executive as soon as administratively practicable after Executive submits a valid claim for reimbursement, but in no event later than the last day of Executive’s taxable year following the taxable year in which the expense was incurred, (ii) the amount of expenses eligible for reimbursement, or in-kind benefits provided, during any taxable year of Executive shall not affect the expenses eligible for reimbursement, or in-kind benefits to be provided, in any other taxable year of Executive, and (iii) Executive’s right to reimbursement or in-kind benefits shall not be subject to liquidation or exchange for another benefit.

 

K.            General.

 

(i)            Indemnification.  If litigation shall be brought to enforce or interpret any provision contained in this Agreement, the Corporation indemnifies Executive for his reasonable attorney fees and disbursements incurred in such litigation, and agrees to pay pre-judgment interest on any money judgment obtained by Executive calculated at the prime interest rate in effect from time to time from the date that payment(s) to him should have been made under this Agreement.

 

 

(ii)           Payment Obligations Absolute.  Except as provided in Paragraph K(vi), upon the occurrence of a Change of Control, the Corporation’s obligation to pay Executive the compensation and to make the arrangements provided in this Agreement shall be absolute and unconditional and shall not be affected by any circumstances, including, without limitation, any set-off, counterclaim, recoupment, defense or other right which the Corporation may have against him or anyone else.  All amounts payable by the Corporation under this Agreement shall be paid without notice or demand.  Except as expressly provided in this Agreement, the Corporation waives all rights which it may now have or may hereafter have conferred upon it, by statute or otherwise, to terminate, cancel or rescind this Agreement in whole or in part.  Every payment made under this Agreement by the Corporation shall be final and the Corporation will not seek to recover all or any part of such payment from Executive or anyone else who may be entitled to the payments for any reason whatsoever.

 

(iii)          Successors.  This Agreement shall be binding upon and inure to the benefit of Executive and his estate, and the Corporation and any successor of the Corporation, but neither this Agreement nor any rights arising hereunder may be assigned or pledged by Executive.

 

(iv)          Severability.  Any provision in this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective only to the extent of such prohibition or unenforceability without invalidating or affecting the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

 

(v)           Controlling Law.  This Agreement shall in all respects be governed by, and construed in accordance with, the laws of the State of Delaware.

 

(vi)          Modification or Termination.  At any time prior to a Change of Control, the Board of Directors of the Corporation may, in its absolute discretion, and without the consent of Executive, amend, modify or terminate this Agreement upon written notice to Executive. The Board may also terminate this Agreement at any time with respect to Executive if Executive is directly or indirectly affiliated (as defined in Rule 12b-2 of the Securities Exchange Act of 1934) with the “group” which has consummated a Change of Control under Paragraph G(i).

 

 

The parties have executed this Agreement as of                 ,      .

 

	
 
    	
CARLISLE   COMPANIES INCORPORATED
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:Exhibit

Exhibit 10.1

Summary of the Brocade Communications Systems, Inc.
2009 Stock Plan (the “Stock Plan”)
(As amended and restated on April 11, 2017)1 

The following is a summary of the principal features of the Stock Plan and its operation. The summary is qualified in its entirety by reference to the Stock Plan itself set forth in Appendix A. 
General
The Stock Plan provides for the grant of the following types of incentive awards: (i) stock options, (ii) restricted stock, (iii) restricted stock units, (iv) stock appreciation rights, (v) performance units and performance shares, and (vi) and other stock or cash awards. Each of these is referred to individually as an “Award.” Those who will be eligible for Awards under the Stock Plan include employees, directors and consultants who provide services to the Company and any parent or subsidiary. As of December 31, 2016, approximately 5,200 employees, consultants and directors would be eligible to be selected to participate in the Stock Plan. The Stock Plan will remain in effect for a term of 10 years from the date of its initial adoption in 2009.
Number of Shares of Common Stock Available Under the Stock Plan
Initially, the Board reserved 48 million shares of Common Stock for issuance under the Stock Plan, plus any shares subject to stock options or similar awards granted under the Company’s 1999 Plan, the Company’s 1999 Nonstatutory Stock Option Plan and the 2001 McDATA Equity Incentive Plan that expire or otherwise terminate without having been exercised in full and shares issued pursuant to awards granted under the Company’s 1999 Stock Plan, the Company’s 1999 Nonstatutory Stock Option Plan and the 2001 McDATA Equity Incentive Plan that are forfeited to or repurchased by the Company, with the maximum number of Shares to be added to the Stock Plan pursuant to this clause equal to 40,335,624 shares. The shares may be authorized, but unissued, or reacquired Common Stock. In 2012, shareholders approved an increase of 35,000,000 in the number of shares reserved for issuance under the Stock Plan for an aggregate reserve of 83,000,000 shares. In 2015, shareholders approved an increase of 29,500,000 in the number of shares reserved for issuance under the Stock Plan for an aggregate reserve of 112,500,000 shares. We are asking shareholders to approve an increase of 16,000,000 in the number of shares reserved for issuance under the Stock Plan (resulting in an aggregate reserve of 128,500,000 shares).
Shares subject to full-value awards count against the share reserve as 2.03 shares for every share subject to a full-value award. To the extent that a share that was subject to a full-value award is returned to the Stock Plan, the Stock Plan reserve will be credited with 2.03 shares that will thereafter be available for issuance under the Stock Plan.
If an Award expires or becomes unexercisable without having been exercised in full, or, with respect to full-value awards, is forfeited to or repurchased by the Company, the unpurchased shares (or for full-value awards, the forfeited or repurchased shares) will become available for future grant or sale under the Stock Plan (unless the Stock Plan has terminated). With respect to stock appreciation rights, all shares subject to a stock appreciation right will cease to be available under the Stock Plan, other than shares forfeited due to failure to vest which will become available for future grant or sale under the Stock Plan (unless the Stock Plan has terminated). Shares that have actually been issued under the Stock Plan under any Award will not be returned to the Stock Plan and will not become available for future distribution under the Stock Plan, except that if shares issued pursuant to full-value awards are repurchased by the Company or forfeited to the Company, such shares will become available for future grant under the Stock Plan.
Shares used to pay the exercise price of an Award or satisfy the tax withholding obligations related to an Award will not become available for future grant or sale under the Stock Plan. To the extent an Award is paid out in cash rather than shares, such cash payment will not reduce the number of shares available for issuance under the Stock Plan.
If we increase or decrease the number of issued shares of Common Stock by means of a stock split, reverse stock split, stock dividend, reorganization, merger, consolidation, split-up, spin-off, combination or reclassification of the Common Stock, repurchase, or exchange of shares or other securities of the Company, or, in the Board’s sole discretion, other change in our corporate structure affecting our Common Stock, subject to any required action by shareholders, the Administrator will proportionately adjust the number of shares covered by each outstanding Award, the number of shares available for issuance under the Stock Plan and the price per share covered by each outstanding Award.

		
	1 
	The contents of this document appear on pages 24-28 of Brocade's definitive proxy statement on Schedule 14A filed with the Securities and Exchange Commission on February 23, 2017 and are incorporated by reference into Brocade’s Current Report on Form 8-K to which this document is attached as Exhibit 10.1

1

Administration of the Stock Plan
The Board, or a committee of directors or of other individuals intended to satisfy applicable laws and appointed by the Board (referred to herein as the “Administrator”), will administer the Stock Plan. To make grants to certain officers and key employees, the members of the committee are intended to qualify as “non-employee directors” under Rule 16b-3 of the Securities Exchange Act of 1934, and as “outside directors” under Code Section 162(m) so that the Company can receive a federal tax deduction for certain compensation paid under the Stock Plan. Subject to the terms of the Stock Plan, the Administrator has the sole discretion to select the employees, consultants, and directors who will receive Awards, determine the terms and conditions of Awards, to interpret the provisions of the Stock Plan and outstanding Awards, and to take other appropriate actions as provided under the Stock Plan. In addition, the Administrator may not amend any Award to reduce the exercise price of that Award or cancel any outstanding Award in exchange for cash or other Awards with a lower exercise price than the original Award, unless such action is approved by shareholders.

Options
The Administrator is able to grant nonstatutory stock options and incentive stock options under the Stock Plan. The Administrator determines the number of shares subject to each option, although the Stock Plan provides that a participant may not receive options for more than 3,000,000 shares in any fiscal year, except in connection with his or her initial service with the Company, in which case he or she may be granted an option to purchase up to an additional 3,000,000 shares.
The Administrator determines the exercise price of options granted under the Stock Plan, provided the exercise price must be at least equal to the fair market value of our Common Stock on the date of grant (except for options granted in replacement of options held by employees of companies that are acquired by the Company). In addition, the exercise price of an incentive stock option granted to any participant who owns more than 10% of the total voting power of all classes of our outstanding stock must be at least 110% of the fair market value of the Common Stock on the grant date.
The term of an option may not exceed seven years, except that, with respect to any participant who owns 10% of the voting power of all classes of the Company’s outstanding capital stock, the term of an incentive stock option may not exceed five years.
After a termination of service with us, a participant will be able to exercise the vested portion of his or her option for the period of time stated in the Award agreement (except as otherwise expressly provided for). If no such period of time is stated in the participant’s Award agreement, the participant will generally be able to exercise his or her option for three months (or 12 months in the case of death or disability) following his or her termination of service. In no event may an option be exercised later than the expiration of its seven year (or shorter) term.
Restricted Stock
Awards of restricted stock are rights to acquire or purchase shares of our Common Stock, which vest in accordance with the terms and conditions established by the Administrator in its sole discretion. The Award agreement will generally grant us a right to repurchase or reacquire the unvested shares upon the termination of the participant’s service with the Company for any reason (including death or disability). The Administrator will determine the number of shares granted pursuant to an Award of restricted stock, but no participant will be granted a right to purchase or acquire more than 3,000,000 shares of restricted stock during any fiscal year, except that a participant may be granted up to an additional 3,000,000 shares of restricted stock in connection with his or her initial service with us.
Restricted Stock Units
Awards of restricted stock units result in a payment to a participant only if the vesting criteria the Administrator establishes are satisfied. Upon satisfying the applicable vesting criteria, the participant will be entitled to the payout specified in the Award agreement. The Administrator, in its sole discretion, may pay earned restricted stock units in cash, shares, or a combination thereof. On the date set forth in the Award agreement, all unearned restricted stock units will be forfeited to us. The Administrator determines the number of restricted stock units granted to any participant, but no participant may be granted more than 3,000,000 restricted stock units during any fiscal year, except that the participant may be granted up to an additional 3,000,000 restricted stock units in connection with his or her initial service with us.

2

Stock Appreciation Rights
The Administrator will be able to grant stock appreciation rights, which are the rights to receive the appreciation in fair market value of Common Stock between the exercise date and the date of grant. We can pay the appreciation in cash, Common Stock of equivalent value, or a combination thereof. Stock appreciation rights will become exercisable at the times and on the terms established by the Administrator, subject to the terms of the Stock Plan. The Administrator, subject to the terms of the Stock Plan, will have complete discretion to determine the terms and conditions of stock appreciation rights granted under the Stock Plan; provided, however, that the exercise price may not be less than 100% of the fair market value of a share on the date of grant. The term of a stock appreciation right may not exceed seven years. No participant will be granted stock appreciation rights covering more than 3,000,000 shares during any fiscal year, except that a participant may be granted stock appreciation rights covering up to an additional 3,000,000 shares in connection with his or her initial service with us.
After termination of service with us, a participant will be able to exercise the vested portion of his or her stock appreciation right for the period of time stated in the Award agreement (except as otherwise expressly provided for). If no such period of time is stated in a participant’s Award agreement, a participant will generally be able to exercise his or her stock appreciation right for three months (or 12 months in the case of death or disability) following his or her termination of service. In no event will a stock appreciation right be exercised later than the expiration of its term.
Performance Units and Performance Shares
The Administrator will be able to grant performance units and performance shares, which are Awards that will result in a payment to a participant only if the performance goals or other vesting criteria the Administrator may establish are achieved or the Awards otherwise vest. The Administrator will establish performance or other vesting criteria in its sole discretion, which, depending on the extent to which they are met, will determine the number and/or the value of performance units and performance shares to be paid out to participants.
Notwithstanding the foregoing, after the grant of performance units or shares, the Administrator, in its sole discretion, may reduce or waive any performance objectives or other vesting provisions for such performance units or shares. During any fiscal year, no participant will receive more than 3,000,000 performance shares and no participant will receive performance units having an initial value greater than $15,000,000, except that a participant may be granted performance shares covering up to an additional 3,000,000 performance shares in connection with his or her initial service with us. Performance units will have an initial dollar value established by the Administrator on or before the date of grant. Performance shares will have an initial value equal to the fair market value of a share of the Company’s Common Stock on the grant date.
Performance Goals
The granting and/or vesting of full-value awards and other incentives under the Stock Plan may be made subject to the attainment of performance goals relating to one or more business criteria and may provide for a targeted level or levels of achievement including: cash position, company free cash flow, earnings per share, earnings before interest, taxes, depreciation and amortization, gross margin, internal rate of return, net cash provided by operations, net income, operating cash flow, operating expenses, operating income, profit before tax, return on assets, return on equity, return on gross fixed assets, return on investment, return on sales, revenue, revenue growth, and total shareholder return. The performance goals may differ from participant to participant and from Award to Award. Any criteria used may be measured in absolute terms, measured in terms of growth, compared to another company or companies, measured against the market and/or applicable market indices, measured against the performance of the Company as a whole or a segment of the Company, and/or measured on a pre-tax or post-tax basis, if applicable.
Transferability of Awards
Awards granted under the Stock Plan are generally not transferable, and all rights with respect to an Award granted to a participant generally will be available during a participant’s lifetime only to the participant. Additionally, the Administrator may not determine and implement the terms and conditions of any program that would permit participants the opportunity to transfer for value any outstanding Awards to a financial institution or other person without shareholder approval.

3

Merger or Change in Control
In the event of a merger or change in control of the Company, each outstanding Award will be assumed or an equivalent option or right substituted by the successor corporation or a parent or subsidiary of the successor corporation. In the event that the successor corporation refuses to assume or substitute for the Award, the participant will fully vest in and have the right to exercise all of his or her outstanding options or stock appreciation rights, including shares as to which such Awards that would not otherwise be vested or exercisable, all restrictions on restricted stock will lapse, all restricted stock units will fully vest, and, with respect to Awards with performance-based vesting, all performance goals or other vesting criteria will be deemed achieved at 100% of target levels and all other terms and conditions met unless otherwise expressly provided for in the Award agreement. In addition, if an Award becomes fully vested and exercisable in lieu of assumption or substitution in the event of a change of control, the Administrator will notify the participant in writing or electronically that the Award will be fully vested and exercisable for a period of time determined by the Administrator in its sole discretion, and the Award will terminate upon the expiration of such period.
For a discussion of the treatment of Awards granted under the Stock Plan under the terms of the merger agreement with Broadcom, refer to the section of this proxy statement entitled “Compensation Discussion and Analysis—Individual Compensation Elements—Long-Term Incentive Compensation—Treatment of Equity Awards Upon Consummation of the Proposed Merger with Broadcom”.

Amendment and Termination of the Stock Plan
The Board will have the authority to amend, alter, suspend or terminate the Stock Plan, except that shareholder approval will be required for any amendment to the Stock Plan to the extent required by any applicable laws. No amendment, alteration, suspension or termination of the Stock Plan will impair the rights of any participant, unless mutually agreed otherwise between the participant and the Administrator and which agreement must be in writing and signed by the participant and the Company. The Stock Plan will terminate in 2019, unless the Board terminates it earlier. 
Incentive Compensation Recoupment
In the event that material accounting errors occur that require correction of the Company’s issued financial statements, whether or not such errors result from fraud or intentional misconduct by executives, the Compensation Committee of the Board shall have the discretion to seek repayment of cash or equity incentive compensation erroneously paid or granted to the CEO or any of the executives of the Company who report directly to the CEO if the amount of such compensation would have been lower had it been calculated based upon financial statements free of such accounting errors. In determining whether to pursue such repayment, the Compensation Committee will take into account certain considerations, including without limitation the feasibility and expense of recoupment, any pending legal action and the amount of time since the occurrence of the accounting error requiring correction. In addition, the Company is required to disclose the results of the Compensation Committee’s determination to pursue recovery, as well as the reasons for any determination not to pursue recovery, in the first proxy statement filed following the determination.

4

Granted to Employees, Consultants and Directors
The number of Awards that an employee, director or consultant may receive under the Stock Plan is at the discretion of the Administrator and therefore cannot be determined in advance. The following table sets forth (i) the aggregate number of restricted stock units and/or performance stock units granted under the Existing Stock Plan during fiscal 2016, and (ii) the dollar value of such restricted stock units and/or performance stock units. There were no grants of stock options, restricted stock, stock appreciation rights, or performance shares under the Existing Stock Plan during fiscal 2016.

	
							
	Name of Individual or Group
	Number
of Stock
Units (#)
	 
	Dollar Value
of Stock
Units ($)

	Lloyd A. Carney
	638,200
	

	 
	$
	4,542,750
	

	Chief Executive Officer
	 
	 
	 

	Daniel W. Fairfax
	110,000
	

	 
	$
	806,300
	

	Senior Vice President and Chief Financial Officer
	 
	 
	 

	Jeffrey P. Lindholm
	110,000
	

	 
	$
	806,300
	

	Senior Vice President, Worldwide Sales
	 
	 
	 

	Ken K. Cheng
	110,000
	

	 
	$
	806,300
	

	Chief Technology Officer and Senior Vice President, Corp. Dev. and Emerging Business
	 
	 
	 

	Gale E. England
	90,000
	

	 
	$
	659,700
	

	Chief Operating Officer and Senior Vice President, Operations
	 
	 
	 

	All executive officers, as a group
	1,128,200
	

	 
	$
	8,134,450
	

	All directors who are not executive officers, as a group
	5,000
	

	 
	$
	48,550
	

	All employees who are not executive officers, as a group
	8,337,360
	

	 
	$
	70,702,440
	

5

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