Document:

exv10w6

Exhibit 10.6

EQUITY INCENTIVE PLAN

	1.	 	Purpose.
	 
	 	 	The purpose of the 2008 Equity Incentive Plan is to further align the interests of employees
and directors with those of the shareholders by providing incentive compensation
opportunities tied to the performance of the Common Stock and by promoting increased ownership of
the Common Stock by such individuals. The Plan is also intended to advance the interests
of the Company and its shareholders by attracting, retaining and motivating key personnel upon
whose judgment, initiative and effort the successful conduct of the Company’s business is largely
dependent.

	2.	 	Definitions.

	2.1	 	Wherever the following capitalized terms are used in the Plan, they shall have the
meanings specified below:

	 	(a)	 	“Affiliate” means (i) any entity that would be treated as an “affiliate” of the Company for
purposes of Rule 12b-2 under the Exchange Act and (ii) any joint venture or other entity
in which the Company has a direct or indirect beneficial ownership interest representing at least
one-third (1/3) of the aggregate voting power of the equity interests of such entity or one-third
(1/3) of the aggregate fair market value of the equity interests of such
entity, as determined by the Committee.
	 
	 	(b)	 	“Award” means an award of a Stock Option, Stock Appreciation Right, Restricted Stock
Award, Stock Unit Award, Stock Award, Performance Stock Award, Tax Bonus Award or any other cash
payment granted under the Plan.
	 
	 	(c)	 	“Award Agreement” means a written agreement entered into between the Company and a Participant
setting forth the terms and conditions of an Award granted to a Participant.
	 
	 	(d)	 	“Board” means the Board of Directors of the Company.
	 
	 	(e)	 	“Code” means the Internal Revenue Code of 1986, as amended.
	 
	 	(f)	 	“Common Stock” means the Company’s common stock.
	 
	 	(g)	 	“Committee” means the Board, the Compensation Committee of the Board, or such other
committee of the Board appointed by the Board to administer the Plan, as applicable.
	 
	 	(h)	 	“Company” means KHD Humboldt Wedag International Ltd., a British Columbia, Canada corporation.
	 
	 	(i)	 	“Continuing Director” means, as of any date of determination, any member of the Board
of
Directors of the Company who (i) was a member of such Board on the effective date of the Plan or
(ii) was nominated for election or elected to such Board with the affirmative vote of a
majority of
the Continuing Directors who were members of such Board at the time of such nomination or
election.
	 
	 	(j)	 	“Date of Grant” means the date on which an Award under the Plan is made by the
Committee, or such later date as the Committee may specify to be the effective date of an Award.

 

 

	 	(k)	 	“Disability” means a Participant being considered “disabled” within the meaning of
Section
409A(a)(2)(C) of the Code or such other applicable law, unless otherwise provided in an Award
Agreement.
	 
	 	(l)	 	“Eligible Person” means any person who is an employee, director, officer or consultant of
the Company or any Affiliate or any person to whom an offer of employment with the Company or any
Affiliate is extended, as determined by the Committee. 
	 
	 	(m)	 	  “Exchange Act” means the
Securities Exchange Act of 1934, as amended.
	 
	 	(n)	 	“Fair Market Value” of a share of Common Stock as of a given date shall be
determined by such methods or procedures as shall be established from time to time by the Committee
in good faith and in accordance with applicable law. Unless otherwise determined by the Committee,
the Fair Market Value of the Common Stock shall mean the mean of the high and low sales prices of
the Common Stock on the relevant date as reported on the stock exchange or market on which the
Common Stock is primarily traded, or if no sale is made on such date, then the Fair Market
Value is the weighted average of the mean of the high and low sales prices of the Common Stock
on the next preceding day and the next succeeding day on which such sales were made, as
reported on the stock exchange or market on which the Common Stock is primarily traded. If the
Common Stock is not listed on any stock exchange or quotation system on the date as of
which Fair Market Value is to be determined, the Committee shall determine in good faith
the Fair Market Value in whatever manner it considers appropriate. 
	 
	 	(o)	 	 “Incentive
Stock Option” means a Stock Option granted under Section 6 hereof that is intended
to meet the requirements of Section 422 of the Code and the regulations
thereunder.
	 
	 	(p)	 	“Nonqualified Stock Option” means a Stock Option granted under Section 6 hereof
that is not an Incentive Stock Option.
	 
	 	(q)	 	“Participant” means any Eligible Person who holds an outstanding Award under the
Plan.
	 
	 	(r)	 	“Performance Stock Award” means an award payable in shares of Common Stock, cash or any
combination of shares or cash if the performance of the Company or its Affiliates during
the period meets certain performance goals specified by the Committee. 
	 
	 	(s)	 	  “Plan”
means the 2008 Equity Incentive Plan as set forth herein, as amended from time to time.
	 
	 	(t)	 	“Restricted Stock Award” means a grant of shares of Common Stock to an Eligible
Person under Section 8 hereof that are issued subject to such vesting and transfer
restrictions as the Committee shall determine and set forth in an Award Agreement.
	 
	 	(u)	 	“Stock Award” means a grant of shares of Common Stock to an Eligible Person under
Section 10 hereof that are issued free of transfer restrictions and forfeiture conditions.
	 
	 	(v)	 	“Stock Appreciation Right” means a contractual right granted to an Eligible
Person under Section 7 hereof entitling such Eligible Person to receive a payment,
representing the difference between the base price per share of the right and the Fair Market
Value of a share of Common Stock, at such time, and subject to such conditions, as are set
forth in the Plan and the applicable Award Agreement.
	 
	 	(w)	 	“Stock Option” means a contractual right granted to an Eligible Person under Section
6 hereof to purchase shares of Common Stock at such time and price, and subject to such
conditions, as are set forth in the Plan and the applicable Award Agreement.

2

 

	 	(x)	 	“Stock Unit Award” means a contractual right granted to an Eligible Person under
Section 9 hereof representing notional unit interests equal in value to a share of Common
Stock to be paid or distributed at such times, and subject to such conditions, as set forth in
the Plan and the applicable Award Agreement.
	 
	 	(y)	 	“Tax Bonus Award” means a payment in cash in the year in which an amount is included in the
gross income of a Participant in respect of an Award of an amount equal to the federal, foreign,
if any, and applicable state and local income and employment tax liabilities payable by the
Participant as a result of (i) the amount included in gross income in respect of the Award and (ii)
the payment of the amount in clause (i) and the amount in this clause
(ii). For purposes of determining the amount to be paid to the Participant pursuant to
the preceding sentence, the Participant shall be deemed to pay federal, foreign, if any, and state
and local income taxes at the highest marginal rate of tax imposed upon ordinary income for the
year in which an amount in respect of the Award is included in gross income, after giving
effect to any deductions therefrom or credits available with respect to the payment of any
such taxes.

	3.	 	Administration.

	3.1	 	The Plan shall be administered by the Board or, at the discretion of the Board, by a
committee which may be comprised of one or more members of the Board. Any such
committee designated by the Board, and the Board itself acting in its
capacity as administrator of the Plan, is referred to herein as the “Committee.” Any action
of the Committee in administering the Plan shall be final, conclusive and binding on all
persons, including the Company, its Subsidiaries, employees, Participants, persons claiming rights
from or through Participants and stockholders of the Company. No member of the Committee shall
be liable for any action or determination made in good faith by the Committee with respect to
the Plan or any Award thereunder.
	 
	3.2	 	The Committee shall have such powers and authority as may be necessary or appropriate for the
Committee to carry out its functions as described in the Plan. Subject to the express
limitations of the Plan, the Committee shall have authority in its discretion to determine
the Eligible Persons to whom, and the time or times at which, Awards may be granted, the number of
shares, units or other rights subject to each Award, the exercise, base or purchase price of an
Award (if any), the time or times at which an Award will become vested, exercisable or payable, the
performance goals and other conditions of an Award, the duration of the Award, and all other
terms of the Award. Subject to the terms of the Plan, the Committee shall have the authority
to amend the terms of an Award in any manner that is not inconsistent with the Plan,
provided that no such action shall adversely affect the rights of a Participant with respect to
an outstanding Award without the Participant’s consent. The Committee shall also
have discretionary authority to interpret the Plan, to make factual determinations under the Plan,
and to make all other determinations necessary or advisable for Plan administration, including,
without limitation, to correct any defect, to supply any omission or to reconcile any
inconsistency in the Plan or any Award Agreement hereunder. The Committee may prescribe, amend, and
rescind rules and regulations relating to the Plan. The Committee’s determinations under the Plan
need not be uniform and may be made by the Committee selectively among Participants and
Eligible Persons, whether or not such persons are similarly situated. The Committee shall, in
its discretion, consider such factors as it deems relevant in making its interpretations,
determinations and actions under the Plan including, without limitation, the recommendations or
advice of any officer or employee of the Company or such attorneys, consultants, accountants or
other advisors as it may select. All interpretations, determinations and actions by the Committee
shall be final, conclusive, and binding upon all parties.
	 
	3.3	 	The Committee shall have the right, from time to time, to delegate to one or more officers of
the Company the authority of the Committee to grant and determine the terms and conditions of
Awards granted under the Plan, subject to the requirements of applicable laws and such other
limitations as the Committee shall determine. In no event shall any such delegation of authority be
permitted with respect to Awards to any members of the Board or to any Eligible Person who is
subject to Rule 16b-3 under the Exchange Act or Section 162(m) of the Code. The Committee shall
also be permitted to delegate, to any appropriate officer or employee of the
Company, responsibility for performing certain ministerial functions under the Plan. In the
event that the Committee’s authority is delegated to officers or employees in accordance with
the

3

 

	 	 	foregoing, all provisions of the Plan relating to the Committee shall be interpreted in a
manner consistent with the foregoing by treating any such reference as a reference to such officer
or employee for such purpose. Any action undertaken in accordance with the Committee’s delegation
of authority hereunder shall have the same force and effect as if such action was undertaken
directly by the Committee and shall be deemed for all purposes of the Plan to have been taken by
the Committee.

	4.	 	Shares Subject to the Plan.

	4.1	 	Subject to adjustment pursuant to Section 4.2 hereof, the maximum aggregate number of shares of
Common Stock that may be issued and sold under all Awards granted under the Plan shall be equal to
1,500,000 shares of Common Stock. Shares of Common Stock issued and sold under the Plan may be
either authorized but unissued shares or shares held in the Company’s treasury. To the extent
that any Award involving the issuance of shares of Common Stock is forfeited, cancelled,
returned to the Company for failure to satisfy vesting requirements or other conditions of the
Award, or otherwise terminates without an issuance of shares of Common Stock being made thereunder,
the shares of Common Stock covered thereby will no longer be counted against the foregoing maximum
share limitations and may again be made subject to Awards under the Plan pursuant to such
limitations. Any Awards or portions thereof that are settled in cash and not in shares of
Common Stock shall not be counted against the foregoing maximum share limitations.
	 
	4.2	 	If there shall occur any change with respect to the outstanding shares of Common Stock by
reason of any recapitalization, reclassification, stock dividend, extraordinary dividend, stock
split, reverse stock split or other distribution with respect to the shares of Common Stock, or any
merger, reorganization, consolidation, combination, spin-off or other similar corporate change, or
any other change affecting the Common Stock, the Committee may, in the manner and to the extent
that it deems appropriate and equitable to the Participants and consistent with the
terms of the Plan, cause an adjustment to be made in (i) the
maximum number and kind of
shares provided in Section 4.1 hereof, (ii) the number and kind of shares
of Common Stock, units, or other rights subject to then outstanding Awards, (iii) the exercise
or base price for each share or unit or other right subject to then outstanding Awards, and
(iv) any other terms of an Award that are affected by the event. Notwithstanding the foregoing, in
the case of Incentive Stock Options, any such adjustments shall, to the extent practicable, be
made in a manner consistent with the requirements of Section 424(a) of the Code.
	 
	5.	 	Participation and Awards.
	 
	5.1	 	All Eligible Persons are eligible to be designated by the Committee to receive Awards and
become Participants under the Plan. The Committee has the authority, in its discretion, to
determine and designate from time to time those Eligible Persons who are to be granted
Awards, the types of Awards to be granted and the number of shares of Common Stock or units subject
to Awards granted under the Plan. In selecting Eligible Persons to be Participants and in
determining the type and amount of Awards to be granted under the Plan, the Committee shall
consider any and all factors that it deems relevant or appropriate.
	 
	5.2	 	The Committee shall determine the terms and conditions of all Awards granted to Participants in
accordance with its authority under Section 3.2 hereof. An Award may consist of one type of right
or benefit hereunder or of two or more such rights or benefits granted in tandem or in the
alternative. In the case of any fractional share or unit resulting from the grant, vesting, payment
or crediting of dividends or dividend equivalents under an Award, the Committee shall have the
discretionary authority to (i) disregard such fractional share or unit, (ii) round
such fractional share or unit to the nearest lower or higher whole share or unit, or (iii)
convert such fractional share or unit into a right to receive a cash payment. To the
extent deemed necessary by the Committee, an Award shall be evidenced by an Award Agreement
as described in Section 13.1 hereof.

4

 

	6.	 	Stock Options.
	 
	6.1	 	A Stock Option may be granted to any Eligible Person selected by the Committee. Subject to the
provisions of Section 6.8 hereof and Section 422 of the Code, each Stock Option shall be
designated, in the discretion of the Committee, as an Incentive Stock Option or as a Nonqualified
Stock Option.
	 
	6.2	 	The exercise price per share of a Stock Option shall not be less than 100 percent of the Fair
Market Value of the shares of Common Stock on the Date of Grant, provided that the Committee may in
its discretion specify for any Stock Option an exercise price per share that is higher than the
Fair Market Value on the Date of Grant.
	 
	6.3	 	The Committee shall in its discretion prescribe the time or times at which, or the
conditions upon which, a Stock Option or portion thereof shall become vested and/or exercisable,
and may accelerate the vesting or exercisability of any Stock Option at any time.
	 
	6.4	 	The Committee shall in its discretion prescribe in an Award Agreement the period during which a
vested Stock Option may be exercised, provided that the maximum term of a Stock Option shall be ten
years from the Date of Grant.
	 
	6.5	 	Subject to Section 6.8 hereof with respect to Incentive Stock Options, the Stock Option of
any Participant will terminate according to the provisions of the Award Agreement.
	 
	6.6	 	Subject to such terms and conditions as shall be specified in an Award Agreement, a Stock
Option may be exercised in whole or in part at any time during the term thereof by notice in the
form required by the Company, together with payment of the aggregate exercise price therefor and
applicable withholding tax. Payment of the exercise price shall be made in the manner set forth
in the Award Agreement, unless otherwise provided by the Committee: (i) in cash or
by cash equivalent acceptable to the Committee, (ii) by payment in shares of Common Stock that have
been held by the Participant for at least six months (or such period as the Committee may deem
appropriate, for accounting purposes or otherwise) valued at the Fair Market Value of such
shares on the date of exercise, (iii) through an open-market, broker-assisted sales
transaction pursuant to which the Company is promptly delivered the amount of proceeds necessary to
satisfy the exercise price, (iv) by a combination of the methods described above or (v) by
such other method as may be approved by the Committee and set forth in the Award Agreement. In
addition to and at the time of payment of the exercise price, the Participant shall pay to the
Company the full amount of any and all applicable income tax, employment tax and other amounts
required to be withheld in connection with such exercise, payable under such of the methods
described above for the payment of the exercise price as may be approved by the Committee and
set forth in the Award Agreement.
	 
	6.7	 	All Stock Options shall be nontransferable except (i) upon the Participant’s death, in
accordance with Section 13.2 hereof or (ii) in the case of Nonqualified Stock Options only, for
the transfer of all or part of the Stock Option to a Participant’s “family member” (as defined for
purposes of the Form S-8 registration statement under the Securities Act of 1933), as may be
approved by the Committee in its discretion at the time of proposed transfer. The transfer of a
Nonqualified Stock Option may be subject to such terms and conditions as the Committee may in
its discretion impose from time to time. Subsequent transfers of a Nonqualified
Stock Option shall be prohibited other than in accordance with Section 13.2 hereof.
	 
	6.8	 	Additional Rules for Incentive Stock Options.

	 	(a)	 	An Incentive Stock Option may only be granted to an Eligible Person who is considered an
employee for purposes of Treasury Regulation §1.421-7(h) with respect to the Company or any
Affiliate that qualifies as a “subsidiary corporation” with respect to the Company for
purposes of Section 424(f) of the Code.
	 
	 	(b)	 	An Award of an Incentive Stock Option may provide that such Stock Option may be exercised
not later than 3 months following termination of employment of the Participant with the Company and

5

 

	 	 	 	all Subsidiaries, or not later than one year following a permanent and total disability within
the meaning of Section 22(e)(3) of the Code, as and to the extent determined by the Committee
to comply with the requirements of Section 422 of the Code.
	 
	 	(c)	 	Any Incentive Stock Option granted hereunder shall contain such additional terms and
conditions, not inconsistent with the terms of the Plan, as are deemed necessary or desirable
by the Committee, which terms, together with the terms of the Plan, shall be intended and
interpreted to cause such Incentive Stock Option to qualify as an “incentive stock option”
under Section 422 of the Code. An Award Agreement for an Incentive Stock Option may provide
that such Stock Option shall be treated as a Nonqualified Stock Option to the extent that certain
requirements applicable to “incentive stock options” under the Code shall not be satisfied. An
Incentive Stock Option shall by its terms be nontransferable other than by will or by the
laws of descent and distribution, and shall be exercisable during the lifetime of a Participant
only by such Participant.
	 
	 	(d)	 	If shares of Common Stock acquired by exercise of an Incentive Stock Option are disposed of
within two years following the Date of Grant or one year following the transfer of such shares to
the Participant upon exercise, the Participant shall, promptly following such disposition, notify
the Company in writing of the date and terms of such disposition and provide such other information
regarding the disposition as the Company may reasonably require.

	7.	 	Stock Appreciation Rights.
	 
	7.1	 	A Stock Appreciation Right may be granted to any Eligible Person selected by the Committee.
Stock Appreciation Rights may be granted on a basis that allows for the exercise of the right by
the Participant or that provides for the automatic payment of the right upon a specified date
or event. Stock Appreciation Rights shall be exercisable or payable at such time or times and
upon conditions as may be approved by the Committee, provided that the Committee may accelerate
the exercisability or payment of a Stock Appreciation Right at any time.
	 
	7.2	 	A Stock Appreciation Right may be granted without any related Stock Option and may be subject
to such vesting and exercisability requirements as specified by the Committee in an Award
Agreement. A Stock Appreciation Right will be exercisable or payable at such time or times as
determined by the Committee, provided that the maximum term of a Stock Appreciation Right shall be
ten years from the Date of Grant. The base price of a Stock Appreciation Right granted without any
related Stock Option shall be determined by the Committee in its sole discretion;
provided, however. that the base price per share of any such freestanding Stock Appreciation
Right shall not be less than 100 percent of the Fair Market Value of the shares of Common Stock on
the Date of Grant.
	 
	7.3	 	A Stock Appreciation Right may be granted in tandem with a Stock Option, either at the time of
grant or at any time thereafter during the term of the Stock Option. A tandem Stock Option/Stock
Appreciation Right will entitle the holder to elect, as to all or any portion of the number of
shares subject to such Stock Option/Stock Appreciation Right, to exercise either the Stock Option
or the Stock Appreciation Right, resulting in the reduction of the corresponding number of shares
subject to the right so exercised as well as the tandem right not so exercised. A Stock
Appreciation Right granted in tandem with a Stock Option hereunder shall have a base price per
share equal to the per share exercise price of the Stock Option, will be vested and exercisable
at the same time or times that a related Stock Option is vested and exercisable, and will
expire no later than the time at which the related Stock Option expires.
	 
	7.4	 	A Stock Appreciation Right will entitle the holder, upon exercise or other payment of the Stock
Appreciation Right, as applicable, to receive an amount determined by multiplying: (i) the excess
of the Fair Market Value of a share of Common Stock on the date of exercise or payment of the Stock
Appreciation Right over the base price of such Stock Appreciation Right, by (ii) the
number of shares as to which such Stock Appreciation Right is exercised or paid. Subject to the
requirements of Section 409A of the Code, payment of the amount determined under the foregoing may
be made, as approved by the Committee and set forth in the Award Agreement, in shares of Common
Stock valued at their Fair Market

6

 

	 	 	Value on the date of exercise or payment, in cash, or in a combination of shares of Common Stock
and cash, subject to applicable tax withholding requirements.
	 
	8.	 	Restricted Stock Awards.
	 
	8.1	 	A Restricted Stock Award may be granted to any Eligible Person selected by the Committee.
The Committee may require the payment by the Participant of a specified purchase price in
connection with any Restricted Stock Award.
	 
	8.2	 	The restrictions imposed on shares granted under a Restricted Stock Award shall lapse in
accordance with the vesting requirements specified by the Committee in the Award Agreement,
provided that the Committee may accelerate the vesting of a Restricted Stock Award at any time. If
the vesting requirements of a Restricted Stock Award shall not be satisfied, the Award shall be
forfeited and the shares of Common Stock subject to the Award shall be returned to the Company.
	 
	8.3	 	Shares granted under any Restricted Stock Award may not be transferred, assigned or subject to
any encumbrance, pledge, or charge until all applicable restrictions
are removed or have expired, unless otherwise allowed by the Committee. Failure to satisfy any applicable restrictions shall
result in the subject shares of the Restricted Stock Award being forfeited and returned to the
Company. The Committee may require in an Award Agreement that certificates representing the shares
granted under a Restricted Stock Award bear a legend making appropriate reference to the
restrictions imposed, and that certificates representing the shares granted or sold under a
Restricted Stock Award will remain in the physical custody of an escrow holder until all
restrictions are removed or have expired.
	 
	8.4	 	Subject to the foregoing provisions of this Section 8 and the applicable Award Agreement, the
Participant shall have all rights of a shareholder with respect to the shares granted to the
Participant under a Restricted Stock Award, including the right to vote the shares and receive all
dividends and other distributions paid or made with respect thereto. The Committee may provide in
an Award Agreement for the payment of dividends and distributions to the Participant at such times
as paid to shareholders generally or at the times of vesting or other payment of the Restricted
Stock Award.
	 
	8.5	 	If a Participant makes an election pursuant to Section 83(b) of the Code with respect to a
Restricted Stock Award, the Participant shall file, within 30 days following the Date of
Grant, a copy of such election with the Company and with the Internal Revenue Service, in
accordance with the regulations under Section 83 of the Code. The Committee may provide in an
Award Agreement that the Restricted Stock Award is conditioned upon the Participant’s making or
refraining from making an election with respect to the Award under Section 83(b) of the Code.
	 
	9.	 	Stock Unit Awards.
	 
	9.1	 	A Stock Unit Award may be granted to any Eligible Person selected by the Committee. The
value of each stock unit under a Stock Unit Award is equal to the Fair Market Value of the Common
Stock on the applicable date or time period of determination, as specified by the Committee. A
Stock Unit Award shall be subject to such restrictions and conditions as the Committee shall
determine. A Stock Unit Award may be granted together with a dividend equivalent right with
respect to the shares of Common Stock subject to the Award, which may be accumulated and may be
deemed reinvested in additional stock units, as determined by the Committee in its discretion.
	 
	9.2	 	On the Date of Grant, the Committee shall in its discretion determine any vesting requirements
with respect to a Stock Unit Award, which shall be set forth in the Award Agreement,
provided that the Committee may accelerate the vesting of a Stock Unit Award at any time. A
Stock Unit Award may also be granted on a fully vested basis, with a deferred payment date.
	 
	9.3	 	A Stock Unit Award shall become payable to a Participant at the time or times determined by the
Committee and set forth in the Award Agreement, which may be upon or following the
vesting of the

7

 

	 	 	Award. Payment of a Stock Unit Award may be made, at the discretion of the Committee, in cash
or in shares of Common Stock, or in a combination thereof, subject to applicable tax withholding
requirements. Any cash payment of a Stock Unit Award shall be made based upon the Fair Market
Value of the Common Stock, determined on such date or over such time period as determined by the
Committee.
	 
	9.4	 	The Participant shall not have any rights as a shareholder with respect to the
shares subject to a Stock Unit Award until such time as shares of Common Stock are
delivered to the Participant pursuant to the terms of the Award Agreement.
	 
	10.	 	Stock Awards, Performance Stock Awards and Tax Bonus Awards.
	 
	10.1	 	A Stock Award may be granted to any Eligible Person selected by the Committee. A Stock Award
may be granted for past services, in lieu of bonus or other cash compensation, as directors’
compensation or for any other valid purpose as determined by the Committee. A Stock
Award granted to an Eligible Person represents shares of Common Stock that are issued without
restrictions on transfer and other incidents of ownership and free of forfeiture conditions,
except as otherwise provided in the Plan and the Award Agreement. The Committee may,
in connection with any Stock Award, require the payment of a specified
purchase price.
	 
	10.2	 	Subject to the foregoing provisions of this Section 10 and the applicable Award Agreement,
upon the issuance of the Common Stock under a Stock Award the Participant shall have all
rights of a shareholder with respect to the shares of Common Stock, including the right to vote
the shares and receive all dividends and other distributions paid or made with respect thereto.
	 
	10.3	 	A Performance Stock Award may be granted to any Eligible Person selected by the Committee. The
Committee shall determine and include in a Performance Stock Award the period of time for which a
Performance Stock Award is made. The Committee also shall establish performance objectives to be
met by the Company or its Affiliates as a condition to payment of the Performance Stock Award.
The performance goals may include share price, pre-tax profits, earnings per share, return on
stockholders’ equity, return on assets, sales, net income or any combination of the foregoing or,
solely for a Performance Stock Award not intended to constitute “performance-based
compensation” under Section 162(m) of the Code, any other financial or other measurement
established by the Committee. The performance goals may include minimum and optimum objectives or
a single set of objectives.
	 
	10.4	 	The Committee shall establish the method of calculating the amount of payment to be made under
a Performance Stock Award if the performance goals are met, including the fixing of a maximum
payment. The Performance Stock Award shall be expressed in terms of
shares of Common Stock. The
Committee shall determine, in accordance with the terms of such Performance Stock Award, whether
all, none or any portion of a Performance Stock Award shall be paid. The Committee, in its
discretion, may elect to make payment in shares of Common Stock, cash or a combination of shares
and cash. The Committee may establish rules and procedures to permit a grantee to defer
recognition of income upon the attainment of a Performance Stock Award.
	 
	10.5	 	As to any Performance Stock Award not intended to constitute “performance-based compensation”
under Section 162(m) of the Code, at any time, the Committee may revise the performance goals and
the computation of payment if unforeseen events occur which have a substantial effect on the
performance of the Company or its Affiliates and which, in the judgment of the Committee, make
the application of the performance goals unfair unless a revision is made.
	 
	10.6	 	The Committee is authorized, subject to limitations under applicable law, to grant to
Participants Tax Bonus Awards and other cash payments, whether awarded separately or as a
supplement to any other award. The Committee shall determine the terms and conditions of such
awards.

8

 

	11.	 	Change in Control.
	 
	11.1	 	Except to the extent an Award Agreement provides for a different result (in
which case the Award Agreement will govern and this Section 11 of the Plan shall not be
applicable), notwithstanding anything elsewhere in the Plan or any rules adopted by the
Committee pursuant to the Plan to the contrary, if a Triggering Event shall occur within the
12-month period beginning with a Change in Control of the Company, then, effective immediately
prior to such Triggering Event, (i) each outstanding Stock Option and Stock Appreciation Right,
to the extent that it shall not otherwise have become vested and exercisable, shall automatically
become fully and immediately vested and exercisable, without regard to any otherwise applicable
vesting requirement, (ii) each Restricted Stock Award shall become fully and immediately vested
and all forfeiture and transfer restrictions thereon shall lapse, (iii) each outstanding Stock Unit
Award shall become immediately and fully vested and payable, (iv) each outstanding Performance
Stock Award shall become immediately payable, and (v) each Tax Bonus Award shall become
immediately payable.
	 
	11.2	 	Definitions

	 	(a)	 	For purposes of this Section 11 and Section 12.2 hereof, the term “Cause” shall mean
a determination by the Committee that a Participant (i) has been convicted of, or entered a plea
of nolo contendere to, a crime that constitutes a felony under
Federal or state law, (ii) has
engaged in willful gross misconduct in the performance of the Participant’s duties
to the Company or an Affiliate, (iii) has committed a material breach of any written
agreement with the Company or any Affiliate with respect to
confidentiality, noncompetition,
nonsolicitation or similar restrictive covenant, or (iv) has engaged in any other conduct which
would constitute cause under any applicable laws. Subject to the first sentence of
Section 11.1 hereof, in the event that a Participant is a party to an employment
agreement with the Company or any Affiliate that defines a termination on account of “Cause” (or
a term having similar meaning), such definition shall apply as the definition of a termination on
account of “Cause” for purposes hereof, but only to the extent that such definition provides the
Participant with greater rights. A termination on account of Cause shall be communicated by
written notice to the Participant, and shall be deemed to occur on the date such notice is
delivered to the Participant
	 
	 	(b)	 	For purposes of this Section 11, a “Change in Control” shall be deemed to have occurred upon:

	 	(i)	 	the occurrence of (A) an acquisition by any individual, entity or group (within the meaning
of Section l3(d)(3) or 14(d)(2) of the Exchange Act) (a “Person”) of beneficial ownership (within
the meaning of Rule 13d-3 promulgated under the Exchange Act) of a percentage of the combined
voting power of the then outstanding voting securities of the Company entitled to vote generally
in the election of directors (the “Company Voting Securities”) (but excluding (1) any acquisition
directly from the Company (other than an acquisition by virtue of the exercise of a conversion
privilege of a security that was not acquired directly from the Company), (2) any acquisition by
the Company or an Affiliate and (3) any acquisition by an employee benefit plan (or related
trust) sponsored or maintained by the Company or any Affiliate) (an “Acquisition”) that is thirty
percent (30%) or more of the Company Voting Securities; and (B) the termination of
employment, within six (6) months following the Acquisition, of the individual who is the Chief
Executive Officer of the Company immediately prior to the Acquisition, for any reason other than
death, Disability, Cause, or voluntary resignation (but excluding any termination that
constitutes a Constructive Termination or any resignation that was requested by the Board or any
such Person (or its employees or representatives) that completes an Acquisition);
	 
	 	(ii)	 	at any time during a period of two (2) consecutive years or less, individuals who at the
beginning of such period constitute the Board (and any new directors whose election by the Board
or nomination for election by the Company’s shareholders was approved by a vote of at least
two-thirds (2/3) of the directors then still in office who either were

9

 

	 	 	 	directors at the beginning of the period or whose election or nomination for election was
so approved) cease for any reason (except for death, Disability or voluntary retirement) to
constitute a majority thereof:
	 
	 	(iii)	 	an Acquisition that is fifty percent (50%) or more of the Company Voting Securities;
	 
	 	(iv)	 	the consummation of a merger, consolidation, reorganization or similar corporate
transaction, whether or not the Company is the surviving company in such transaction, other than
a merger, consolidation, or reorganization that would result in the Persons who are beneficial
owners of the Company Voting Securities outstanding immediately prior thereto continuing to
beneficially own, directly or indirectly, in substantially the same proportions, at least fifty
percent (50%) of the combined voting power of the Company Voting Securities (or the voting
securities of the surviving entity) outstanding immediately after such merger, consolidation
or reorganization;
	 
	 	(v)	 	the sale or other disposition of all or substantially all of the assets of the Company;
	 
	 	(vi)	 	the approval by the shareholders of the Company of a complete liquidation or dissolution of
the Company; or
	 
	 	(vii)	 	the occurrence of any transaction or event, or series of transactions or events, designated
by the Board in a duly adopted resolution as representing a change in the effective control
of the business and affairs of the Company, effective as of the date
specified in any such resolution.

	 	 	 	Notwithstanding the foregoing, the preceding events shall not be deemed to be a Change of
Control if, prior to any transaction or transactions causing such change, a majority of the
Continuing Directors shall have voted not to treat such transaction or transactions as resulting in
a Change of Control.
	 
	 	(c)	 	For purposes of this Section 11, a “Constructive Termination” shall mean a termination of
employment by a Participant within sixty (60) days following the
occurrence of any one or more
of the following events without the Participant’s written consent (i) any reduction in
position, title (for Vice Presidents or above), overall responsibilities, level of
authority, level of reporting (for Vice Presidents or above), base compensation, annual
incentive compensation opportunity, aggregate employee benefits or (ii) a request that the
Participant’s location of employment be relocated by more than fifty (50) miles. Subject to the
first sentence of Section 11.1 hereof, in the event that a Participant is a party to an
employment agreement with the Company or any Affiliate (or a successor entity) that defines a
termination on account of “Constructive Termination,” “Good Reason” or “Breach of Agreement” (or
a term having a similar meaning), such definition shall apply as the definition of
“Constructive Termination” for purposes hereof in lieu of the foregoing, but
only to the extent that such definition provides the Participant with greater rights. A
Constructive Termination shall be communicated by written notice to the Committee, and shall be
deemed to occur on the date such notice is delivered to the Committee, unless the circumstances
giving rise to the Constructive Termination are cured within five (5) days of such notice.
	 
	 	(d)	 	For purposes of this Section 11, a “Triggering Event” shall mean (i) the termination of Service
of a Participant by the Company or an Affiliate (or any successor thereof) other than on account
of death, Disability or Cause, (ii) the occurrence of a Constructive Termination or (iii) any
failure by the Company (or a successor entity) to assume, replace, convert or otherwise
continue any Award in connection with the Change in Control (or another corporate transaction or
other change effecting the Common Stock) on the same terms and conditions as applied immediately
prior to such transaction, except for equitable adjustments to reflect changes in the Common
Stock pursuant to Section 4.3 hereof.

10

 

	11.3	 	In the event that the vesting of Awards together with all other payments and the value of
any benefit received or to be received by a Participant would result in all or a
portion of such payment being subject to the excise tax under Section 4999 of the Code, then
the Participant’s payment shall be either (i) the full payment or (ii) such lesser amount
that would result in no portion of the payment being subject to excise tax under
Section 4999 of the Code (the “Excise Tax”), whichever of the foregoing amounts, taking into
account the applicable Federal, state, and local employment taxes, income taxes, and the Excise
Tax, results in the receipt by the Participant, on an after-tax basis, of the greatest
amount of the payment notwithstanding that all or some portion of the payment may be taxable under
Section 4999 of the Code. All determinations required to be made
under this Section 11 shall be
made by any nationally recognized accounting firm which is the Company’s outside auditor
immediately prior to the event triggering the payments that are subject to the Excise Tax (the
“Accounting Firm”). The Company shall cause the Accounting Firm to provide detailed supporting
calculations of its determinations to the Company and the Participant. All fees and expenses of the
Accounting Firm shall be borne solely by the Company. The Accounting
Firm’s determinations
must be made with substantial authority (within the meaning of Section 6662 of the
Code). For the purposes of all calculations under Section 280G of the Code and the application of
this Section 11.3, all determinations as to present value shall be made using 120 percent of the
applicable Federal rate (determined under Section 1274(d) of the Code) compounded semiannually, as
in effect on December 30, 2004.
	 
	12.	 	Forfeirture Events.
	 
	12.1	 	The Committee may specify in an Award Agreement at the time of the Award that the
Participant’s rights, payments and benefits with respect to an Award shall be
subject to reduction, cancellation, forfeiture or recoupment upon the occurrence of certain
specified events, in addition to any otherwise applicable vesting or performance conditions of an
Award. Such events shall include, but shall not be limited to, termination for cause, violation of
material Company policies, breach of noncompetition, confidentiality or other
restrictive covenants that may apply to the Participant, or other conduct by the
Participant that is detrimental to the business or reputation of the Company.
	 
	12.2	 	Unless otherwise provided by the Committee and set forth in an Award Agreement, if a
Participant’s employment with the Company or any Affiliate shall
be terminated for cause, the Company may, in its sole discretion, immediately terminate such Participant’s right to any further
payments, vesting or exercisability with respect to any Award in its entirety. The Company
shall have the power to determine whether the Participant has been terminated for cause and the date upon which such termination for cause
occurs. Any such determination shall be final, conclusive and binding
upon the Participant. In addition, if the Company shall reasonably determine that a Participant has committed or may have
committed any act which could constitute the basis for a termination of such Participant’s
employment for cause, the Company may suspend the Participant’s rights to exercise any option,
receive any payment or vest in any right with respect to any Award pending a determination by
the Company of whether an act has been committed which could constitute the basis for a
termination for “cause” as provided in this Section 12.2.
	 
	13.	 	General Provisions.
	 
	13.1	 	To the extent deemed necessary by the Committee, an Award under the Plan shall be evidenced by
an Award Agreement in a written or electronic form approved by the Committee setting forth the
number of shares of Common Stock or units subject to the Award, the exercise price, base
price, or purchase price of the Award, the time or times at which an Award will become vested,
exercisable or payable and the term of the Award. The Award Agreement may also set forth the effect
on an Award of termination of Service under certain circumstances. The Award Agreement shall
be subject to and incorporate, by reference or otherwise, all of the applicable terms and
conditions of the Plan, and may also set forth other terms and conditions applicable to the Award
as determined by the Committee consistent with the limitations of the Plan. Award Agreements
evidencing Incentive Stock Options shall contain such terms and conditions as may be necessary
to meet the applicable provisions of Section 422 of the Code. The grant of an Award under the Plan
shall not confer any rights upon the Participant holding such Award other than such terms, and
subject to such conditions, as are specified in the Plan as being applicable to such type of Award
(or to all Awards) or as are expressly set forth in the Award Agreement. The Committee need not
require the

11

 

	 	 	execution of an Award Agreement by a Participant, in which case, acceptance of the Award by the
Participant shall constitute agreement by the Participant to the terms, conditions, restrictions
and limitations set forth in the Plan and the Award Agreement as well as the administrative
guidelines of the Company in effect from time to time.
	 
	13.2	 	Except as provided in Section 6.7 hereof, Awards under the Plan shall not be assignable or
transferable by the Participant, except by will or by the laws of descent and distribution, and
shall not be subject in any manner to assignment, alienation, pledge, encumbrance or charge.
Notwithstanding the foregoing, the Committee may provide in the terms of an Award Agreement that
the Participant shall have the right to designate a beneficiary or beneficiaries who shall be
entitled to any rights, payments or other benefits specified under an Award following the
Participant’s death. During the lifetime of a Participant, an Award shall be exercised only by such
Participant or such Participant’s guardian or legal representative. In the event of a Participant’s
death, an Award may to the extent permitted by the Award Agreement be exercised by the
Participant’s beneficiary as designated by the Participant in the manner prescribed by the
Committee or, in the absence of an authorized beneficiary designation, by the legatee of such Award
under the Participant’s will or by the Participant’s estate in accordance with the Participant’s
will or the laws of descent and distribution, in each case in the same manner and to the same
extent that such Award was exercisable by the Participant on the date of the Participant’s death.
	 
	13.3	 	The Committee may in its discretion permit a Participant to defer the receipt of payment of
cash or delivery of shares of Common Stock that would otherwise be due to the Participant by virtue
of the exercise of a right or the satisfaction of vesting or other conditions with respect to an
Award. If any such deferral is to be permitted by the Committee, the Committee shall
establish rules and procedures relating to such deferral in a manner intended to comply with the
requirements of Section 409A of the Code, including, without limitation, the time when an election
to defer may be made, the time period of the deferral and the events that would result in payment
of the deferred amount, the interest or other earnings attributable to the deferral and the method
of funding, if any, attributable to the deferred amount.
	 
	13.4	 	A Participant shall have no rights as a holder of shares of Common Stock with respect to any
unissued securities covered by an Award until the date the Participant becomes the holder of record
of such securities. Except as provided in Section 4.3 hereof, no adjustment or other provision
shall be made for dividends or other shareholder rights, except to the extent that the Award
Agreement provides for dividend payments or dividend equivalent rights.
	 
	13.5	 	Nothing in the Plan, in the grant of any Award or in any Award Agreement shall confer upon any
Eligible Person any right to continue employment or a contractual relationship with the Company or
any of its Affiliates, or interfere in any way with the right of the
Company or any of its
Affiliates to terminate the Participant’s employment or other service relationship for any reason
at any time.
	 
	13.6	 	No shares of Common Stock will be issued or transferred pursuant to an Award unless and until
all then applicable requirements imposed by Federal and state securities and other laws, rules and
regulations and by any regulatory agencies having jurisdiction, and by any exchanges upon which the
shares of Common Stock may be listed, have been fully met. As a condition precedent to the issuance
of shares pursuant to the grant or exercise of an Award, the Company may require the Participant to
take any reasonable action to meet such requirements. The Committee may impose such conditions on
any shares of Common Stock issuable under the Plan as it may deem advisable, including, without
limitation, restrictions under the Securities Act of 1933, as amended, under the requirements of
any exchange upon which such shares of the same class are then listed, and under any blue sky or
other securities laws applicable to such shares. The Committee may also require the Participant to
represent and warrant at the time of issuance or transfer that the shares of Common Stock are being
acquired only for investment purposes and without any current intention to sell or distribute such
shares.
	 
	13.7	 	The Participant shall be responsible for payment of any taxes or similar charges required by
law to be withheld from an Award or an amount paid in satisfaction of an Award, which shall be paid
by the Participant on or prior to the payment or other event that results in taxable income in
respect of an Award.

12

 

	 	 	The Award Agreement may specify the manner in which the withholding obligation shall be
satisfied with respect to the particular type of Award.
	 
	13.8	 	The adoption of the Plan and any reservation of shares of Common Stock or cash amounts by the
Company to discharge its obligations hereunder shall not be deemed to create a
trust or other funded arrangement. Except upon the issuance of Common Stock pursuant to an
Award, any rights of a Participant under the Plan shall be those of a general unsecured creditor of
the Company, and neither a Participant nor the Participant’s permitted transferees or estate shall
have any other interest in any assets of the Company by virtue of the Plan. Notwithstanding the
foregoing, the Company shall have the right to implement or set aside funds in a grantor
trust, subject to the claims of the Company’s creditors or otherwise, to discharge
its obligations under the Plan.
	 
	13.9	 	The adoption of the Plan shall not affect any other share incentive or other compensation
plans in effect for the Company or any Affiliate, nor shall the Plan preclude the Company from
establishing any other forms of share incentive or other compensation or benefit program for
employees of the Company or any Affiliate. The amount of any compensation deemed to be received by
a Participant pursuant to an Award shall not constitute includable compensation for purposes of
determining the amount of benefits to which a Participant is entitled under any other compensation
or benefit plan or program of the Company or an Affiliate, including, without limitation,
under any pension or severance benefits plan, except to the extent specifically provided by the
terms of any such plan.
	 
	13.10	 	The Plan shall be binding upon the Company, its transferees and assigns, and the Participant,
the Participant’s executor, administrator and permitted transferees and beneficiaries.
	 
	13.11	 	 If any provision of the Plan or any Award Agreement shall be determined to be illegal or
unenforceable by any court of law in any jurisdiction, the remaining provisions hereof and
thereof shall be severable and enforceable in accordance with their
terms, and all provisions shall
remain enforceable in any other jurisdiction.
	 
	13.12	 	The Committee may adopt, amend and terminate such arrangements and grant such Awards, not
inconsistent with the intent of the Plan, as it may deem necessary or desirable to comply with any
tax, securities, regulatory or other laws of other jurisdictions with respect to Awards that may be
subject to such laws. The terms and conditions of such Awards may vary from the terms and
conditions that would otherwise be required by the Plan solely to the extent the Committee deems
necessary for such purpose. Moreover, the Board may approve such supplements to or amendments,
restatements or alternative versions of the Plan, not inconsistent with the intent of the
Plan, as it may consider necessary or appropriate for such purposes, without thereby
affecting the terms of the Plan as in effect for any other purpose.
	 
	13.13	 	Nothing contained in the Plan shall be construed to limit the right of the Committee to grant
Awards under the Plan in connection with the acquisition, whether by purchase, merger,
consolidation or other corporate transaction, of the business or assets of any
corporation or other entity. Without limiting the foregoing, the Committee may grant
Awards under the Plan to an employee or director of another corporation who becomes an
Eligible Person by reason of any such corporate transaction in substitution for awards
previously granted by such corporation or entity to such person. The terms and conditions of
the substitute Awards may vary from the terms and conditions that would otherwise be required by
the Plan solely to the extent the Committee deems necessary for such purpose.
	 
	13.14	 	The Plan and all rights hereunder shall be subject to and interpreted in accordance with
the laws of the Province of British Columbia, without reference to the principles of conflicts of
laws, and to applicable securities and other laws.
	 
	14.	 	Effective Date; Amendment and Termination.
	 
	14.1	 	The Plan shall become effective following its adoption by the Board. The term of the Plan
shall be ten (10) years from the date of adoption by the Board, subject to Section 14.3 hereof.

13

 

	14.2	 	The Board may at any time and from time to time and in any respect, amend or modify the
Plan. The Board may seek the approval of any amendment or modification by the Company’s
shareholders to the extent it deems necessary or advisable in its discretion
for purposes of compliance with Section 162(m) or Section 422 of the Code, the listing
requirements of any stock exchange or securities market or for any other purpose. No amendment or
modification of the Plan shall adversely affect any Award theretofore granted without the consent
of the Participant or the permitted transferee of the Award.
	 
	14.3	 	The Plan shall terminate on the tenth anniversary of the date of its adoption by the Board.
The Board may, in its discretion and at any earlier date, terminate the Plan. Notwithstanding the
foregoing, no termination of the Plan shall adversely affect any Award theretofore granted without
the consent of the Participant or the permitted transferee of the Award.

14exhibit_10-1.htm

Exhibit 10.1

SANDISK CORPORATION

CHANGE OF CONTROL EXECUTIVE BENEFITS AGREEMENT

 

This Change of Control Executive Benefits Agreement (“Agreement”) is made and entered into effective as of _____________________, 2010 (the “Effective Date”) by and between SanDisk Corporation, a Delaware corporation (the “Company”), and ______________ (the “Executive”).

 

W I T N E S S E T H:

 

WHEREAS, the Company and the Executive are parties to a change of control executive benefits agreement as most recently amended on December 15, 2008 (the “Superseded Agreement”) and wish to restate, supersede and replace the Superseded Agreement with this Agreement.

 

WHEREAS, the Executive is employed by the Company in a key position and has made and is expected to continue to make major contributions to the profitability, growth and financial strength of the Company.

 

WHEREAS, the Company considers the continued availability of the Executive’s services, managerial skills and business experience to be in the best interest of the Company and its stockholders, and desires to assure the continued services of the Executive on behalf of the Company without (a) the distraction of the Executive occasioned by the possibility of a change of control of the Company and (b) the possibility that the Executive would seek other employment following the announcement of a change of control of the Company and if such announced transaction were not consummated, the Company would be seriously harmed.

 

NOW, THEREFORE, in consideration of these premises, the parties agree that the following shall constitute the agreement between the Company and the Executive:

 

1. Definitions.  Whenever the following terms are used in this Agreement, they shall have the meaning specified below unless the context clearly indicates to the contrary:

 

1.01 “Administrator” shall mean the Board or its delegate.

 

1.02 “Board” shall mean the Board of Directors of the Company.

 

1.03 “Cause” shall mean (i) fraud or other willful misconduct with respect to the Company’s business, (ii) gross negligence in the performance of duties, or (iii) conviction or plea of nolo contendere to a felony.

 

1.04 “Change of Control” means the occurrence of any of the following events:

 

(a) Any “person” (as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended) becomes the “beneficial owner” (as defined in Rule 13d-3 under said Act), directly or indirectly, of securities of the Company representing fifty percent (50%) or more of  the then outstanding shares of common stock of the Company or the total voting power represented by the Company’s then outstanding voting securities (other than pursuant to a Business Combination which is covered by clause (c) below);

 

  

- 1 -

  

(b) The consummation of the sale or other disposition (including in whole or in part through licensing arrangement(s)) of all or substantially all of the Company’s assets, other than sales, other dispositions or licenses of assets made to a parent or a wholly-owned subsidiary of the Company, or an entity under common control with the Company;

 

(c) The consummation of a reorganization, merger, statutory share exchange or consolidation or similar transaction involving the Company or the acquisition of assets or stock of another entity by the Company or any of its subsidiaries, or a series of related such transactions (each, a “Business Combination”), in each case unless following such Business Combination (i) the voting securities of the Company outstanding immediately prior thereto continue to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity or any entity (a “Parent”) that, as a result of such transaction, owns the Company or the surviving entity or all or substantially all of the Company’s or surviving entity’s assets directly or through one or more subsidiaries) at least fifty percent (50%) of the total voting power represented by the voting securities of the Company or such surviving entity or Parent outstanding immediately after such Business Combination; (ii) no person (excluding any entity resulting from such Business Combination or a Parent or any employee benefit plan (or related trust) of the Company or such entity resulting from such Business Combination or Parent) beneficially owns, directly or indirectly, 50% or more of, respectively, the then-outstanding shares of common stock of the entity resulting from such Business Combination or the total voting power of the then-outstanding voting securities of such entity, except to the extent that the ownership in excess of 50% existed prior to the Business Combination; and (iii) at least a majority of the members of the board of directors of the entity resulting from such Business Combination or the Parent thereof were members of the Incumbent Board (as defined below) at the time of the execution of the initial agreement or of the action of the Board providing for such Business Combination;

 

(d) Individuals who, as of the Effective Date, constitute the Board (the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a director subsequent to the Effective Date whose appointment, election, or nomination for election by the Company’s stockholders, was approved by a vote of at least two-thirds of the directors then comprising the Incumbent Board (including for these purposes, the new members whose appointment, election or nomination was so approved, without counting the member and his or her predecessor twice) shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board; or

 

  

- 2 -

  

(e) Approval by the stockholders of the Company of a complete liquidation or dissolution of the Company other than in the context of a transaction or series of related transactions that would not constitute a Change of Control under clause (c) above.

 

1.05 A “Change of Control Termination” shall mean a termination of employment which occurs at any time during the period commencing three (3) months before the occurrence of a Change of Control and ending eighteen (18) months after such Change of Control (the “Protected Period”) where (a) the Company or a party effecting a Change of Control of the Company terminates the Executive’s employment without Cause, other than as the result of the Executive’s death or Permanent Disability, or (b) the Executive resigns with Good Reason.

 

1.06 “Code” shall mean the Internal Revenue Code of 1986, as amended.

 

1.07 “Date of Termination” following a Change of Control shall mean the dates, as the case may be, for the following events: (a) if the Executive’s employment is terminated by death, the date of death; (b) if the Executive’s employment is terminated due to a Permanent Disability, thirty (30) days after the Notice of Termination is given (provided that the Executive shall not have returned to the performance of his or her duties on a full-time basis during such period); (c) if the Executive’s employment is terminated pursuant to a termination for Cause, the date specified in the Notice of Termination; (d) if the Executive’s employment is terminated by a Change of Control Termination, the date specified in the Notice of Termination; and (e) if the Executive’s employment is terminated for any other reason, fifteen (15) days after delivery of the Notice of Termination unless otherwise agreed by the Executive and the Company.

 

1.08 “Disability” shall mean that the Executive is unable, by reason of injury, illness or other physical or mental impairment, to perform the essential functions of the position for which the Executive is employed, even with a reasonable accommodation, which inability is certified by a licensed physician reasonably selected by the Company.

 

1.09 “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.

 

1.10 “Good Reason” shall mean the occurrence of any of the following, without the Executive’s express written consent, within a Protected Period:

 

  

- 3 -

  

(a) The assignment to the Executive of any positions, duties, responsibilities or status adversely inconsistent or diminutive, in comparison with, or having less authority than, the Executive’s positions, duties, responsibilities or status with the Company immediately prior to the Protected Period (including, without limitation, retaining such position, duties, responsibilities or status when the Company is not a publicly traded company or not the ultimate parent entity of the group or when the Company has consummated a transaction constituting a “Change of Control” under Section 1.04(b) above);

 

(b) An alteration in the nature of the Executive’s reporting responsibilities, titles, or offices with the Company from those in effect immediately prior to the Protected Period (including, without limitation, retaining such reporting responsibilities, titles or offices with the Company when the Company is not a publicly traded company or not the ultimate parent entity of the group or when the Company has consummated a transaction constituting a “Change of Control” under Section 1.04(b) above);

 

(c) Any removal of the Executive from, or any failure to reelect the Executive to, any such positions, except in connection with a termination of the employment of the Executive for Cause, Permanent Disability, or as a result of the Executive’s death;

 

(d) A reduction by the Company in the Executive’s base salary or annual target bonus in effect immediately prior to the Protected Period;

 

(e) Any breach by the Company of any provision of this Agreement;

 

(f) The requirement by the Company that the Executive’s principal place of employment be relocated more than thirty (30) miles from his or her principal place of employment immediately prior to the Protected Period; or

 

(g) The Company’s failure to obtain a satisfactory agreement from any successor to assume and agree to perform the Company’s obligations under this Agreement, as contemplated in Section 9.02(b) hereof.

 

1.11 “Notice of Termination” shall mean a written notice which shall indicate the termination provision(s) relied upon.

 

1.12 “Permanent Disability” shall mean if, as a result of the Executive’s Disability, the Executive shall have been absent from his or her duties with the Company on a full-time basis for a total of six (6) months of any consecutive eight (8) month period.

 

  

- 4 -

  

1.13 “Separation from Service” means the date upon which the Executive dies, retires, or otherwise has a termination of employment with the Company that constitutes a “separation from service” within the meaning of Treasury Regulation Section 1.409A-1(h)(1), without regard to the optional alternative definitions available thereunder.  To the greatest extent permissible consistent with Section 409A, a Separation from Service shall include any termination of the employee-employer relationship between the Executive and the Company for any reason, voluntary or involuntary, with or without Cause, including, without limitation, a termination by reason of resignation (whether for Good Reason or otherwise), discharge (with or without Cause), Permanent Disability, death or retirement.

 

1.14 “Willful” shall mean not in good faith and without reasonable belief that an act or omission was in the best interest of the Company.

 

2. Term.  This Agreement shall be effective until either mutually terminated by the parties or upon a termination of Executive’s employment that does not constitute a Change of Control Termination, subject to a maximum term of four (4) years from the Effective Date.

 

3. Vesting of Performance Shares Upon A Change Of Control.  For purposes of this Agreement, “Performance Shares” means any equity award (including without limitation stock options, stock appreciation rights, restricted stock, and restricted stock units, whether payable in cash or stock), the vesting of which is contingent upon the attainment during a specified performance measuring period (the “Performance Period”) of pre-determined individual or Company goals (including without limitation performance goals based on financial indicators such as earnings per share, net income, revenue, or cash flows) (the “Performance Goals”).   Upon the occurrence of a Change of Control, for purposes of the Executive’s vesting in any Performance Shares granted to the Executive by the Company that are outstanding immediately prior to but have not vested as of the date of the Change of Control, the Executive shall be deemed to have met the Performance Goals as of the end of the Performance Period if the Executive remains an employee of the Company as of the end of the Performance Period.  Accordingly (subject to such continued employment and subject to earlier vesting as provided in Section 5.01(b)), (i) any Performance Shares which vest solely as a result of meeting the Performance Goals shall be deemed to be vested as of the end of the Performance Period, and (ii) any Performance Shares that do not vest solely by meeting the Performance Goals shall continue to vest in accordance with the terms of the applicable award agreement by assuming the Performance Goal is met.  (For example, if a Performance Share requires that a Performance Goal be met as well as that the Executive remain an employee of the Company for an additional service year after the Performance Period, the Performance Share will vest at the end of that service year if the Executive remains an employee through the end of that service year, and without regard to whether the Performance Goal was actually met.)

 

  

- 5 -

  

4. Termination of Employment of Executive.

 

4.01 Good Reason.  Notwithstanding anything contained in any employment agreement between the Executive and the Company to the contrary, during the term of this Agreement the Executive may terminate his or her employment with the Company for Good Reason and be entitled to the benefits set forth in Section 5, provided that the Executive gives written notice to the Administrator advising the Company of such resignation and the reason for such resignation within sixty (60) days after the time he or she becomes aware of the existence of facts or circumstances constituting Good Reason.

 

4.02 Notice of Termination.  Any termination of the Executive’s employment by the Company or by the Executive (other than termination based on the Executive’s death) following a Change of Control shall be communicated by the terminating party in a Notice of Termination to the other party hereto.

 

5. Compensation and Benefits Upon Termination of Employment.

 

5.01 Severance Benefits.  If there is a Change of Control Termination, then the Executive shall receive the following severance benefits.  The severance benefits set forth below shall be in addition to any amounts owed to Executive as earned but unpaid wages through the Date of Termination and accrued but unused vacation through the Date of Termination:

 

(a) In lieu of any further severance payments to the Executive except as expressly contemplated hereunder, payment in cash as severance pay to the Executive an amount equal to one and one-half (1.5) times the sum of the Executive’s annual base salary plus annual target bonus in effect for the calendar year in which the Change of Control Termination occurs.  For purposes of this Agreement, base salary shall be defined as the greater of (x) the Executive’s base salary at the time of the Change of Control or (y) the Executive’s base salary at the time of the Change of Control Termination.  Such cash payments shall be payable in a single sum, within ten (10) business days following the Executive’s Separation from Service.

 

(b) Any stock options or other stock awards (which term includes without limitation stock appreciation rights, restricted stock, Performance Shares, and restricted stock units, whether payable in cash or stock for purposes of this Agreement) granted to the Executive by the Company that are outstanding immediately prior to but have not vested as of the date of the Change of Control Termination shall become 100%  vested as of the date of the Change of Control Termination and any option or similar award may be exercised by the Executive for one (1) year (notwithstanding any term of the option providing for exercise within a shorter period after termination) following the Date of Termination (subject to the maximum term of the option (generally ten years from the date of grant of the option) and further subject to any right that the Company may have to terminate the options in connection with the Change of Control).

 

  

- 6 -

  

(c) The Executive shall be deemed to have elected to continue medical coverage pursuant to the Consolidated Omnibus Budget Reconciliation Act (“COBRA”) (including, if applicable, coverage for the Executive’s eligible dependents).  The continuation coverage shall be the same as in effect immediately prior to the Date of Termination or reasonably equivalent coverage if the same coverage is not available. The Company will pay or reimburse the Executive for the premiums charged for continuation coverage.  The Company’s obligation to make any payment or reimbursement pursuant to this Section 5.01(c) shall commence with continuation coverage for the month following the month in which the Executive’s Separation from Service occurs and shall cease with continuation coverage for the eighteenth month following the month in which the Executive’s Separation from Service occurs (or, if earlier, shall cease upon the date the Executive becomes eligible for coverage under the health plan of a future employer).

 

(d) For a period of twelve (12) months following Executive’s Date of Termination, the Company shall, at the Company’s expense, provide for executive-level outplacement services to Executive, if requested, which shall include at least the following services: (i) resume assistance, (ii) career evaluation and assessment, (iii) individual career counseling, (iv) access to one or more on-line employment databases (with research assistance provided), and (v) administrative support provided Monday through Friday, except for scheduled holidays.

 

(e) Limitation on Payments.  If upon or following a Change of Control the tax imposed by Section 4999 of the Code, or any similar or successor tax, (the “Excise Tax”) would apply absent this Section 5.01(e), because of the Change of Control, to any payments, benefits and/or amounts received by Executive as severance benefits or otherwise, including, without limitation, any amounts received or deemed received, within the meaning of any provision of the Code, by Executive as a result of (and not by way of limitation) any automatic vesting, lapse of restrictions and/or accelerated target or performance achievement provisions, or otherwise, applicable to outstanding grants or awards to Executive under any of the Company’s equity incentive plans or agreements (collectively, the “Total Payments”), then Executive’s benefits under this Agreement shall be either (a) delivered in full, or (b) delivered as to such lesser extent which would result in no portion of such benefits being subject to the Excise Tax, whichever of the foregoing amounts, taking into account the applicable federal, state and local income taxes and the Excise Tax, results in the receipt by Executive on an after-tax basis, of the greatest amount of benefits, notwithstanding that all or some portion of such benefits may be taxable under Section 4999 of the Code.  Unless the Executive elects otherwise, the Company shall reduce or eliminate the Total Payments by first reducing or eliminating any cash severance benefits, then by reducing or eliminating any accelerated vesting of stock options, then by reducing or eliminating any accelerated vesting of other equity-based awards, then by reducing or eliminating any other remaining Total Payments.

 

  

- 7 -

  

Any determination required under this section shall be made in writing by the Company’s independent public accountants (the “Accountants”), whose determination shall be conclusive and binding upon the Executive and the Company for all purposes.  For purposes of making the calculations required by this section, the Accountants may make reasonable assumptions and approximations concerning applicable taxes and may rely on reasonable, good faith interpretations concerning the application of Sections 280G and 4999 of the Code.  The Company and the Executive shall furnish to the Accountants such information and documents as the Accountants may reasonably request in order to make a determination under this section.  The Company shall bear all costs the Accountants may reasonably incur in connection with any calculations contemplated by this section.

 

(f) Specified Employees.  Notwithstanding any provision of this Agreement to the contrary, if the Executive is a “specified employee” within the meaning of Treasury Regulation Section 1.409A-l(i) as of the date of the Executive’s Separation from Service, the Executive shall not be entitled to any payment or benefit (i) pursuant to Section 5.01(a) or (ii) with respect to any restricted stock unit that vests pursuant to Section 5.01(b) until the earlier of (1) the date which is six (6) months after the Executive’s Separation from Service for any reason other than death, or (2) the date of the Executive’s death.  Any amounts otherwise payable to the Executive upon or in the six (6) month period following the Executive’s Separation from Service that are not so paid by reason of this Section 5.01(f) shall be paid (without interest) on the first business day after the date that is six (6) months after the Executive’s Separation from Service (or, if earlier, as soon as  practicable, and in all events within ten (10) business days, after the date of the Executive’s death).  The payment timing provisions of this Section 5.01(f) shall only apply if, and to the extent, required to avoid the imputation of any tax, penalty or interest pursuant to Section 409A of the Code.  It is the intent of the parties that this Section 5.01(f) shall not be construed to require or permit a delay in the payment or provision of any benefit or reimbursement under this Agreement other than (x) the payment under Section 5.01(a), and (y) the payment with respect to any restricted stock unit that vests pursuant to Section 5.01(b).  Without limiting the generality of the foregoing sentence, the parties intend that the equity vesting provided in Section 5.01(b) (other than with respect to restricted stock units) and the payment or provision of the benefits and reimbursements provided in Section 5.01(c) and Section 5.01(d) shall not be subject to the delay described in this Section 5.01(f).

 

  

- 8 -

  

(g) Any payment or reimbursement of expenses required to be made to the Executive pursuant to Section 5.01(c) or Section 5.01(d) shall be made promptly, and if the Executive is required under the terms of the applicable plan or program to request such payment or reimbursement, no more than ten (10) business days following the date of such request.  In order to comply with Section 409A of the Code, to the extent that any payment or reimbursement of expenses made to the Executive pursuant to Section 5.01(c) or Section 5.01(d) is taxable to the Executive, any such payment or reimbursement shall be made to the Executive no later than the earlier of (i) the deadline set forth in the preceding sentence, or (ii) the last day of the Executive’s taxable year following the taxable year in which the related expense was incurred.  The foregoing sentence shall not be construed to require or permit a delay in any such payment or reimbursement.  The Executive’s right to any such payment or reimbursement or any benefit pursuant to Section 5.01(c) or Section 5.01(d) is not subject to liquidation or exchange for another benefit and the amount of such benefits that the Executive receives in one taxable year shall not affect the amount of such benefits that the Executive receives in any other taxable year.

 

(h) Immediately prior to the occurrence of a Change of Control, the Company shall fund, to the extent it has not done so, a sum equal to the present value on the date of the Change of Control of (i) any amounts that are or could reasonably be expected to become payable to the Executive under the provisions of Section 5.01(a) in the event of a Change of Control Termination of the Executive, (ii) an amount representing restricted stock units that could become vested under the provisions of Section 5.01(b) in the event of a Change of Control Termination of the Executive, and (iii) an amount representing a good faith estimate of expenses of the trust in the event that the Company does not timely pay such expenses. Such funding shall be made by establishing and irrevocably funding a trust for the benefit of the Executive.  The funding representing restricted stock units referred to in clause (ii) above shall (x) be in an amount equal to the consideration paid in the Change of Control for each share of the Company’s common stock times the number of shares represented by the Executive’s unvested restricted stock units, and (y) in the Company’s discretion, be deposited in the form of cash or the in-kind consideration paid in the Change of Control, or a combination thereof.  The trustee of such trust shall be instructed to pay out any such amounts as and to the extent such amounts become payable in accordance with the terms of this Agreement. Payments by the trust to the Executive shall, to the extent thereof, discharge the Company’s obligation to pay benefits under Sections 5.01(a) and 5.01(b).  The Company shall remain obligated to pay the Executive any benefits under this Agreement that are not paid to the Executive from the trust.  The trust shall be a grantor trust described in Section 671 of the Code. Assets of the trust shall be used only to provide the benefits under Sections 5.01(a) and 5.01(b), except that the assets of the trust shall be available to the Company’s creditors in the event of the Company’s insolvency.  The trust shall not terminate until the date on which all payments and benefits to be funded out of the trust have been satisfied and discharged in full.  Upon termination of the trust any assets remaining in the trust shall be returned to the Company.  Notwithstanding the foregoing, the Company shall not fund the trust if, at the time such funding would otherwise have been required under this Section 5.01(h), regulations, rulings or other official guidance published by the Internal Revenue Service provide that such funding would reasonably be expected to result in a transfer of property under Code Section 409A(b)(2) (relating to restrictions on assets in connection with a change in an employer’s financial health).

 

  

- 9 -

  

6. No Mitigation.  The Executive shall not be required to mitigate the amount of any payments provided for by this Agreement by seeking employment or otherwise, nor shall the amount of any cash payments or benefits provided under this Agreement be reduced by any compensation or benefits earned by the Executive after his or her Date of Termination.  Notwithstanding the foregoing, if the Executive is entitled, by operation of any applicable law, to unemployment compensation benefits or benefits under the Worker Adjustment and Retraining Act of 1988 (known as the “WARN” Act) in connection with the termination of his or her employment in addition to amounts required to be paid to him or her under this Agreement, then to the extent permitted by applicable statutory law governing severance payments or notice of termination of employment, the Company shall be entitled to offset the amounts payable hereunder by the amounts of any such statutorily mandated payments.

 

7. Limitation on Rights.

 

7.01 No Employment Contract.  This Agreement shall not be deemed to create a contract of employment between the Company and the Executive and shall not create any right in the Executive to continue in the Company’s employment for any specific period of time.  This Agreement shall not restrict the right of the Company to terminate the employment of Executive for any reason, or no reason at all, or restrict the right of the Executive to terminate his or her employment.

 

7.02 No Other Exclusions.  This Agreement shall not be construed to exclude the Executive from participation in any other compensation or benefit programs in which he or she is specifically eligible to participate either prior to or following the Effective Date of this Agreement, or any such programs that generally are available to other executive personnel of the Company.

 

  

- 10 -

  

8. Dispute Resolution.

 

8.01 Arbitration.  Any controversy arising out of or relating to this Agreement, its enforcement, arbitrability or interpretation, or because of an alleged breach, default, or misrepresentation in connection with any of its provisions, or any other controversy arising out of or relating in any way to the subject matter contained herein, shall be submitted to final and binding arbitration.  Any arbitration hereunder shall be in Santa Clara County, California before a sole arbitrator selected from Judicial Arbitration and Mediation Services, Inc., or its successor (“JAMS”), or if JAMS is no longer able to supply the arbitrator, such arbitrator shall be selected from the American Arbitration Association, and shall be conducted in accordance with the provisions of California Code of Civil Procedure §§ 1280 et seq. as the exclusive forum for the resolution of such dispute.  Pursuant to California Code of Civil Procedure § 1281.8, provisional injunctive relief may, but need not, be sought by either party to this Agreement in a court of law while arbitration proceedings are pending, and any provisional injunctive relief granted by such court shall remain effective until the matter is finally determined by the Arbitrator.  Final resolution of any dispute through arbitration may include any remedy or relief which the Arbitrator deems just and equitable, including any and all remedies provided by applicable state or federal statutes.  At the conclusion of the arbitration, the Arbitrator shall issue a written decision that sets forth the essential findings and conclusions upon which the Arbitrator’s award or decision is based.  Any award or relief granted by the Arbitrator hereunder shall be final and binding on the parties hereto and may be enforced by any court of competent jurisdiction.  The parties acknowledge and agree that they are hereby waiving any rights to trial by jury in any action, proceeding or counterclaim brought by either of the parties against the other in connection with any matter whatsoever arising out of or in any way connected with this Agreement or the subject matter contained herein.  The parties further agree that in any proceeding to enforce the terms of this Agreement, the nonprevailing party shall pay (1) the prevailing party’s reasonable attorneys’ fees and costs incurred in connection with resolution of the dispute in addition to any other relief granted, and (2) all costs of the arbitration, including, but not limited to, the arbitrator’s fees, court reporter fees, and any and all other administrative costs of the arbitration, and that the nonprevailing party promptly shall reimburse the prevailing party for any portion of such costs previously paid by the prevailing party.  The arbitrator shall resolve any dispute as to the reasonableness of any fee or cost.

 

  

- 11 -

  

9. Miscellaneous.

 

9.01 Administration.  The Administrator shall administer this Agreement and the benefits provided for herein.

 

9.02 Assignment and Binding Effect.

 

(a) No right or interest to or in this Agreement, or any payment or benefit to the Executive under this Agreement shall be assignable by the Executive except by will or the laws of descent and distribution.  No right, benefit or interest of the Executive hereunder shall be subject to anticipation, alienation, sale, assignment, encumbrance, charge, pledge, hypothecation or set off in respect of any claim, debt or obligation, or to execution, attachment, levy or similar process or assignment by operation of law.  Any attempt, voluntarily or involuntarily, to effect any action specified in the immediately preceding sentences shall, to the full extent permitted by law, be null, void and of no effect; provided, however, that this provision shall not preclude the Executive from designating one or more beneficiaries to receive any amount that may be payable to the Executive under this Agreement after his or her death and shall not preclude the legal representatives of the Executive’s estate from assigning any right hereunder to the person or persons entitled thereto under his or her will, or, in the case of intestacy, to the person or persons entitled thereto under the laws of intestacy applicable to his or her estate.  However, this Agreement shall be assignable by the Company to, binding upon and inure to the benefit of any successor of the Company, and any successor shall be deemed substituted for the Company upon the terms and subject to the conditions hereof.

 

(b) The Company will require any successor (whether by purchase of assets, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company to expressly assume and agree to perform all of the obligations of the Company under this Agreement (including the obligation to cause any subsequent successor to also assume the obligations of this Agreement) unless such assumption occurs by operation of law.

 

9.03 No Waiver.  No waiver of any term, provision or condition of this Agreement, whether by conduct or otherwise, in any one or more instances shall be deemed or construed as a further or continuing waiver of any such term, provision or condition or as a waiver of any other term, provision or condition of this Agreement.  Without limiting the generality of the foregoing, the failure by Executive to exercise his or her right to terminate his or her employment for Good Reason under Section 4.01 above shall not operate as a waiver by Executive of his or her right to terminate for Good Reason based upon any subsequent act or omission of the Company that constitutes Good Reason.

 

  

- 12 -

  

9.04 Rules of Construction.

 

(a) This Agreement has been executed in, and shall be governed by and construed in accordance with the laws of the State of California without regard to the principles of conflict of laws.

 

(b) Captions contained in this Agreement are for convenience of reference only and shall not be considered or referred to in resolving questions of interpretation with respect to this Agreement.

 

(c) If any provision of this Agreement is held to be illegal, invalid or unenforceable under any present or future law, and if the rights or obligations of any party hereto will not be materially or adversely affected thereby, (i) such provision will be fully severable, (ii) this Agreement will be construed and enforced as if such illegal, invalid or unenforceable provision had never comprised a part hereof, (iii) the remaining provisions of this Agreement will remain in full force and effect and will not be affected by the illegal, invalid or unenforceable provision or by its severance herefrom and (iv) in lieu of such illegal, invalid or unenforceable provision, there will be added automatically as a part of this Agreement a legal, valid and enforceable provision as similar in terms to such illegal, invalid or unenforceable provision as may be possible.

 

(d) Each party has cooperated in the drafting and preparation of this Agreement.  Hence, in any construction to be made of this Agreement, the same shall not be construed against any party on the basis that the party was the drafter.

 

(e) It is intended that any amounts payable under this Agreement shall either be exempt from or comply with Section 409A of the Code (including the Treasury regulations and other published guidance relating thereto) so as not to subject the Executive to payment of any additional tax, penalty or interest imposed under Section 409A. The provisions of this Agreement shall be construed and interpreted to avoid the imputation of any such additional tax, penalty or interest under Section 409A yet preserve (to the nearest extent reasonably possible) the intended benefit payable to the Executive. The Executive shall be solely responsible for his or her own tax liability with respect to payment made or benefits provided pursuant to this Agreement. Notwithstanding anything else contained herein to the contrary, nothing in this Agreement is intended to constitute, nor does it constitute, tax advice, and in all cases, the Executive should obtain and rely solely on the tax advice provided by the Executive’s own independent tax advisors (and not the Company, any of the Company’s affiliates, or any officer, employee or agent of the Company or any of its affiliates).

 

  

- 13 -

  

9.05 Notices.  Any notice required or permitted by this Agreement shall be in writing, delivered by hand or sent by registered or certified mail, return receipt requested, postage prepaid, or by a nationally recognized courier service (regularly providing proof of delivery) or by facsimile or telecopy, addressed to the Board and the Company and, if other than the Board, the Administrator, at the Company’s then principal office, or to the Executive at the address set forth in the records of the Company, as the case may be, or to such other address or addresses the Company or the Executive may from time to time specify in writing.  Notices shall be deemed given:  (i) when delivered if delivered personally (including by courier); (ii) on the third day after mailing, if mailed, postage prepaid, by registered or certified mail (return receipt requested); (iii) on the day after mailing if sent by a nationally recognized overnight delivery service which maintains records of the time, place, and recipient of delivery; and (iv) upon receipt of a confirmed transmission, if sent by telecopy or facsimile transmission.

 

9.06 Modification.  This Agreement may be modified only by an instrument in writing signed by the Executive and an authorized representative of the Company.

 

9.07 Entire Agreement.  This Agreement constitutes the entire agreement between the Company and the Executive concerning the subject matter hereof, and supersedes all other agreements, whether written or oral, with respect to such subject matter (including, but not limited to, the Superseded Agreement).  This is an integrated agreement.

 

9.08 Counterparts.  This Agreement may be executed in counterparts, and each counterpart, when executed, shall have the efficacy of a signed original.  Photographic copies of such signed counterparts may be used in lieu of the originals for any purpose.

 

9.09 Good Faith Determinations.  No member of the Board shall be liable, with respect to this Agreement, for any act, whether of commission or omission, taken by any other member of the Board or by any officer, agent, or employee of the Company, nor, excepting circumstances involving his or her own bad faith, for anything done or omitted to be done by himself or herself.  The Company shall indemnify and hold harmless each member of the Board from and against any liability or expense hereunder, except in the case of such member’s own bad faith.

 

 

	
SANDISK CORPORATION, 

a Delaware corporation

 

 

	EXECUTIVE
	
By: ______________________________________

	______________________________________
	
Name: 

 

	
Name:

 

	 
Title:

 

	 
	 Date: 	Date:

 

 

                                                                          

 

 

                                                               

 

                                                                         

 

                                                                          

 

 

 

 

 

- 14 -

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00179-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00179-of-00352.parquet"}]]