UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 OR 15(d) of The Securities Exchange Act of
1934
November
20, 2007
Date
of
Report (date of earliest event reported)
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MICRON
TECHNOLOGY, INC.
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(Exact
name of registrant as specified in its
charter)
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Delaware
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1-10658
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75-1618004
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(State
or other jurisdiction of incorporation)
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(Commission
File Number)
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(I.R.S.
Employer Identification No.)
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|||
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8000
South Federal Way
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Boise,
Idaho 83716-9632
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(Address
of principal executive offices)
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(208)
368-4000
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(Registrant’s
telephone number, including area code)
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Check
the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions (see General Instruction A.2. below):
c
Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
c
Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
c
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
c
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4c))
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Item
8.01.
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Other
Events
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On
November 20, 2007, the Compensation
Committee of the Board of Directors approved an amendment to the Company’s
proposed 2007 Equity Incentive Plan (the “2007 Plan”) to delete a subsection of
Section 5.2 that related to the Company’s ability to reuse shares not issued
upon the exercise of an option or stock appreciation right. The exact
language removed from the 2007 Plan read as follows:
“To
the extent that the full number of
Shares subject to an Option or SAR is not issued upon exercise of the Option
or
SAR for any reason, including by reason of net-settlement of the Award, only
the
number of Shares issued and delivered upon exercise of the Option or SAR shall
be considered for purposes of determining the number of Shares remaining
available for issuance pursuant to Awards granted under the Plan.”
The
2007 Plan, as amended, is being
submitted to the Company’s shareholders for approval at its 2007 Annual Meeting
of Shareholders on December 4, 2007, and will become effective only upon
shareholder approval.
A
copy of the 2007 Plan, as
amended, is included as Exhibit 99.1 to this Current Report on Form
8-K
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Item
9.01.
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Financial
Statements and Exhibits.
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(d) Exhibits.
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The
following exhibits are filed
herewith:
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Exhibit
No.
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Description
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99.1
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2007
Equity Incentive Plan
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2
SIGNATURE
Pursuant
to the requirements of the
Securities Exchange Act of 1934, the Registrant has duly caused this report
to
be signed on its behalf by the undersigned hereunto duly
authorized.
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MICRON
TECHNOLOGY, INC.
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||||||
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Date:
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November
20, 2007
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By:
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/s/
Roderic W. Lewis
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Name:
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Roderic
W. Lewis
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Title:
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Vice
President of Legal Affairs,
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General
Counsel & Corporate Secretary
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3
INDEX
TO EXHIBITS FILED WITH
THE
CURRENT REPORT ON FORM 8-K DATED NOVEMBER 20, 2007
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Exhibit
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Description
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99.1
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2007
Equity Incentive Plan
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4
EXHIBIT
99.1
MICRON
TECHNOLOGY, INC.
2007
EQUITY INCENTIVE PLAN
ARTICLE
1
PURPOSE
1.1. GENERAL. The
purpose of the Micron Technology, Inc. 2007 Equity Incentive Plan (the
"Plan") is to promote the success, and enhance the value, of Micron
Technology, Inc. (the "Company"), by linking the personal interests of
employees, non-employee directors and consultants of the Company or any
Affiliate (as defined below) to those of Company stockholders and by providing
such persons with an incentive for outstanding performance. The Plan is further
intended to provide flexibility to the Company in its ability to motivate,
attract, and retain the services of employees, non-employee directors and
consultants upon whose judgment, interest, and special effort the successful
conduct of the Company's operation is largely dependent. Accordingly, the
Plan
permits the grant of incentive awards from time to time to selected employees,
non-employee directors and consultants of the Company and its Affiliates;
provided, however, that no officer, including without limitation the chief
executive officer of the Company, is eligible to be a Participant in the
Plan.
ARTICLE
2
DEFINITIONS
2.1. DEFINITIONS. When
a word or phrase appears in this Plan with the initial letter capitalized,
and
the word or phrase does not commence a sentence, the word or phrase shall
generally be given the meaning ascribed to it in this Section or in
Section 1.1 unless a clearly different meaning is required by the context.
The following words and phrases shall have the following meanings:
(a) "Affiliate"
means (i) any Subsidiary or Parent, or (ii) an entity that directly or
through one or more intermediaries controls, is controlled by or is under
common
control with, the Company, as determined by the Committee.
(b) "Award"
means any Option, Stock Appreciation Right, Restricted Stock Award, Restricted
Stock Unit Award, Deferred Stock Unit Award, Performance Share, Dividend
Equivalent Award, Other Stock-Based Award, or any other right or interest
relating to Stock or cash, granted to a Participant under the Plan.
(c) "Award
Certificate" means a written document, in such form as the Committee prescribes
from time to time, setting forth the terms and conditions of an Award. Award
Certificates may be in the form of individual award agreements or certificates
or a program document describing the terms and provisions of an Awards or
series
of Awards under the Plan. The Committee may provide for the use of electronic,
internet or other non-paper Award Certificates, and the use of electronic,
internet or other non-paper means for the acceptance thereof and actions
thereunder by a Participant.
(d) "Board"
means the Board of Directors of the Company.
(e) "Change
in Control" means and includes the occurrence of any one of the following
events:
(i) individuals
who, on the Effective Date, constitute the Board of Directors of the Company
(the "Incumbent Directors") cease for any reason to constitute at least a
majority of such Board, provided that any person becoming a director after
the
Effective Date and whose election or nomination for election was approved
by a
vote of at least a majority of the Incumbent Directors then on the Board
shall
be an Incumbent Director; provided, however, that no
individual initially elected or nominated as a director of the Company as
a
result of an actual or threatened election contest with respect to the election
or removal of directors ("Election Contest") or other actual or threatened
solicitation of proxies or consents by or on behalf of any Person other than
the
Board ("Proxy Contest"), including by reason of any agreement
1
(ii) any
person is or becomes a "beneficial owner" (as defined in Rule 13d-3 under
the 1934 Act), directly or indirectly, of either (A) 35% or more of the
then-outstanding shares of common stock of the Company ("Company Common Stock")
or (B) securities of the Company representing 35% or more of the combined
voting power of the Company's then outstanding securities eligible to vote
for
the election of directors (the "Company Voting Securities"); provided,
however, that for purposes of this subsection (ii), the following
acquisitions shall not constitute a Change in Control: (w) an acquisition
directly from the Company, (x) an acquisition by the Company or a
Subsidiary of the Company, (y) an acquisition by any employee benefit plan
(or related trust) sponsored or maintained by the Company or any Subsidiary
of
the Company, or (z) an acquisition pursuant to a Non-Qualifying Transaction
(as defined in subsection (iii) below); or
(iii) the
consummation of a reorganization, merger, consolidation, statutory share
exchange or similar form of corporate transaction involving the Company or
a
Subsidiary (a "Reorganization"), or the sale or other disposition of all
or
substantially all of the Company's assets (a "Sale") or the acquisition of
assets or stock of another corporation (an "Acquisition"), unless immediately
following such Reorganization, Sale or Acquisition: (A) all or
substantially all of the individuals and entities who were the beneficial
owners, respectively, of the outstanding Company Common Stock and outstanding
Company Voting Securities immediately prior to such Reorganization, Sale
or
Acquisition beneficially own, directly or indirectly, more than 50% of,
respectively, the then outstanding shares of common stock and the combined
voting power of the then outstanding voting securities entitled to vote
generally in the election of directors, as the case may be, of the corporation
resulting from such Reorganization, Sale or Acquisition (including, without
limitation, a corporation which as a result of such transaction owns the
Company
or all or substantially all of the Company's assets or stock either directly
or
through one or more subsidiaries, the "Surviving Corporation") in substantially
the same proportions as their ownership, immediately prior to such
Reorganization, Sale or Acquisition, of the outstanding Company Common Stock
and
the outstanding Company Voting Securities, as the case may be, and (B) no
person (other than (x) the Company or any Subsidiary of the Company,
(y) the Surviving Corporation or its ultimate parent corporation, or
(z) any employee benefit plan or related trust) sponsored or maintained by
any of the foregoing is the beneficial owner, directly or indirectly, of
35% or
more of the total common stock or 35% or more of the total voting power of
the
outstanding voting securities eligible to elect directors of the Surviving
Corporation, and (C) at least a majority of the members of the board of
directors of the Surviving Corporation were Incumbent Directors at the time
of
the Board's approval of the execution of the initial agreement providing
for
such Reorganization, Sale or Acquisition (any Reorganization, Sale or
Acquisition which satisfies all of the criteria specified in (A), (B) and
(C) above shall be deemed to be a "Non-Qualifying Transaction");
or
(iv) approval
by the stockholders of the Company of a complete liquidation or dissolution
of
the Company.
(f)
"Code" means the Internal Revenue Code of 1986, as amended from time to time.
Reference to a specific Section of the Code or regulation thereunder shall
include such Section or regulation, any valid regulation promulgated under
such
Section, and any comparable provision of any future law, legislation or
regulation amending, supplementing or superseding such Section or
regulation.
(g) "Committee"
means the committee of the Board described in Article 4.
(h) "Company"
means Micron Technology, Inc., a Delaware corporation, or any successor
corporation.
(i)
"Continuous Status as a Participant" means the absence of any interruption
or
termination of service as an employee, officer, consultant or non-employee
director of the Company or any Affiliate, as applicable; provided, however,
that
for purposes of an Incentive Stock Option, or a Stock Appreciation Right
issued
in tandem with an Incentive Stock Option, "Continuous Status as a Participant"
means the absence of any interruption or termination of service as an employee
of the Company or any Parent or
2
(j)
"Covered Employee" means a covered employee as defined in Code
Section 162(m)(3).
(k) "Disability"
or "Disabled" has the same meaning as provided in the long-term disability
plan
or policy maintained by the Company or if applicable, most recently maintained,
by the Company or if applicable, an Affiliate, for the Participant, whether
or
not such Participant actually receives disability benefits under such plan
or
policy. If no long-term disability plan or policy was ever maintained on
behalf
of Participant or if the determination of Disability relates to an Incentive
Stock Option, or a Stock Appreciation Right issued in tandem with an Incentive
Stock Option, Disability means Permanent and Total Disability as defined
in
Section 22(e)(3) of the Code. Notwithstanding the foregoing, for any Awards
that constitute a nonqualified deferred compensation plan within the meaning
of
Section 409A(d) of the Code, Disability has the meaning given such term in
Section 409A of the Code. In the event of a dispute, the determination
whether a Participant is Disabled will be made by the Committee and may be
supported by the advice of a physician competent in the area to which such
Disability relates.
(l)
"Deferred Stock Unit" means a right granted to a Participant under
Article 11.
(m) "Dividend
Equivalent" means a right granted to a Participant under
Article 12.
(n) "Effective
Date" has the meaning assigned such term in Section 3.1.
(o) "Eligible
Participant" means an employee, consultant or non-employee director of the
Company or any Affiliate; provided, however, that no officer, including without
limitation the chief executive officer of the Company, is eligible to be
a
Participant in the Plan.
(p) "Exchange"
means the New York Stock Exchange or any other national securities exchange
or
national market system on which the Stock may from time to time be listed
or
traded.
(q) "Fair
Market Value" of the Stock, on any date, means: (i) if the Stock is listed
or traded on any Exchange, the closing sales price for such Stock (or the
closing bid, if no sales were reported) as quoted on such Exchange (or, if
more
than one Exchange, the Exchange with the greatest volume of trading in the
Stock) for such date, or if no sales or bids were reported for such date,
on the
last market trading day prior to the day of determination, as reported by
Market
Sweep, a service from Interactive Data Services, Inc., or such other source
as
the Committee deems reliable; (ii) if the Stock is quoted on the
over-the-counter market or is regularly quoted by a recognized securities
dealer, but selling prices are not reported, the Fair Market Value of the
Stock
shall be the mean between the high bid and low asked prices for the Stock
on
such date, or if no sales or bids were reported for such date, on the last
market trading day prior to the day of determination, as reported by Market
Sweep, a service from Interactive Data Services, Inc. or such other source
as
the Committee deems reliable, or (iii) in the absence of an established
market for the Stock, the Fair Market Value shall be determined by such other
method as the Committee determines in good faith to be reasonable and in
compliance with Code Section 409A.
(r)
"Full Value Award" means an Award other than in the form of an Option or
SAR,
and which is settled by the issuance of Stock.
(s) "Grant
Date" of an Award means the first date on which all necessary corporate action
has been taken to approve the grant of the Award as provided in the Plan,
or
such later date as is determined and
3
specified
as part of that authorization process. Notice of the grant shall be provided
to
the grantee within a reasonable time after the Grant Date.
(t)
"Incentive Stock Option" means an Option that is intended to be an incentive
stock option and meets the requirements of Section 422 of the Code or any
successor provision thereto.
(u) "Non-Employee
Director" means a director of the Company who is not a common law employee
of
the Company or an Affiliate.
(v) "Nonstatutory
Stock Option" means an Option that is not an Incentive Stock
Option.
(w)
"Option" means a right granted to a Participant under Article 7 of the Plan
to purchase Stock at a specified price during specified time periods. An
Option
may be either an Incentive Stock Option or a Nonstatutory Stock
Option.
(x)
"Other Stock-Based Award" means a right, granted to a Participant under
Article 13 that relates to or is valued by reference to Stock or other
Awards relating to Stock.
(y) "Parent"
means a corporation, limited liability company, partnership or other entity
which owns or beneficially owns a majority of the outstanding voting stock
or
voting power of the Company. Notwithstanding the above, with respect to an
Incentive Stock Option, Parent shall have the meaning set forth in
Section 424(e) of the Code.
(z)
"Participant" means a person who, as an employee, non-employee director or
consultant of the Company or any Affiliate, has been granted an Award under
the
Plan; provided that in the case of the death of a Participant, the term
"Participant" refers to a beneficiary designated pursuant to Section 14.5
or the legal guardian or other legal representative acting in a fiduciary
capacity on behalf of the Participant under applicable state law and court
supervision. Notwithstanding the foregoing, a Participant shall not include
the
chief executive officer or any other officers of the Company.
(aa)
"Performance Share" means any right granted to a Participant under
Article 9 to a unit to be valued by reference to a designated number of
Shares to be paid upon achievement of such performance goals as the Committee
establishes with regard to such Performance Share.
(bb) "Person"
means any individual, entity or group, within the meaning of
Section 3(a)(9) of the 1934 Act and as used in Section 13(d)(3) or
14(d)(2) of the 1934 Act.
(cc)
"Plan" means the Micron Technology, Inc. 2007 Equity Incentive Plan, as
amended from time to time.
(dd) "Qualified
Performance-Based Award" means an Award that is either (i) intended to
qualify for the Section 162(m) Exemption and is made subject to performance
goals based on Qualified Business Criteria as set forth in
Section 14.10(b), or (ii) an Option or SAR.
(ee) "Qualified
Business Criteria" means one or more of the Business Criteria listed in
Section 14.10(b) upon which performance goals for certain Qualified
Performance-Based Awards may be established by the Committee.
(ff) "Restricted
Stock Award" means Stock granted to a Participant under Article 10 that is
subject to certain restrictions and to risk of forfeiture.
(gg) "Restricted
Stock Unit Award" means the right granted to a Participant under Article 10
to receive shares of Stock (or the equivalent value in cash or other property
if
the Committee so provides) in the future, which right is subject to certain
restrictions and to risk of forfeiture.
4
(hh) "Section 162(m)
Exemption" means the exemption from the limitation on deductibility imposed
by
Section 162(m) of the Code that is set forth in Section 162(m)(4)(C)
of the Code or any successor provision thereto.
(ii)
"Shares" means shares of the Company's Stock. If there has been an adjustment
or
substitution pursuant to Section 15.1, the term "Shares" shall also include
any shares of stock or other securities that are substituted for Shares or
into
which Shares are adjusted pursuant to Section 15.1.
(jj)
"Stock" means the $.10 par value common stock of the Company and such other
securities of the Company as may be substituted for Stock pursuant to
Article 15.
(kk)
"Stock Appreciation Right" or "SAR" means a right granted to a Participant
under
Article 8 to receive a payment equal to the difference between the Fair
Market Value of a Share as of the date of exercise of the SAR over the base
price of the SAR, all as determined pursuant to Article 8.
(ll)
"Subsidiary" means any corporation, limited liability company, partnership
or
other entity of which a majority of the outstanding voting stock or voting
power
is beneficially owned directly or indirectly by the Company. Notwithstanding
the
above, with respect to an Incentive Stock Option, Subsidiary shall have the
meaning set forth in Section 424(f) of the Code.
(mm)
"1933 Act" means the Securities Act of 1933, as amended from time to
time.
(nn)
"1934 Act" means the Securities Exchange Act of 1934, as amended from time
to
time.
ARTICLE
3
EFFECTIVE
TERM OF PLAN
3.1. EFFECTIVE
DATE. The Plan shall be effective as of the date it is approved
by both the Board and the stockholders of the Company (the "Effective
Date").
3.2. TERMINATION
OF PLAN. The Plan shall terminate on the tenth anniversary of
the Effective Date unless earlier terminated as provided herein, which shall
continue to be governed by the applicable terms and conditions of this Plan.
The
termination of the Plan on such date shall not affect the validity of any
Award
outstanding on the date of termination. No Incentive Stock Options may be
granted more than ten years after the earlier of (a) adoption of this Plan
by the Board, or (b) the Effective Date.
ARTICLE
4
ADMINISTRATION
4.1. COMMITTEE. The
Plan shall be administered by a Committee appointed by the Board (which
Committee shall consist of at least two directors) or, at the discretion
of the
Board from time to time, the Plan may be administered by the Board. It is
intended that at least two of the directors appointed to serve on the Committee
shall be "non-employee directors" (within the meaning of Rule 16b-3
promulgated under the 1934 Act) and "outside directors" (within the meaning
of
Code Section 162(m)) and that any such members of the Committee who do not
so qualify shall abstain from participating in any decision to make or
administer Awards that are made to Eligible Participants who at the time
of
consideration for such Award (i) are persons subject to the short-swing
profit rules of Section 16 of the 1934 Act, or (ii) are reasonably
anticipated to become Covered Employees during the term of the Award. However,
the mere fact that a Committee member shall fail to qualify under either
of the
foregoing requirements or shall fail to abstain from such action shall not
invalidate any Award made by the Committee which Award is otherwise validly
made
under the Plan. The members of the Committee shall be appointed by, and may
be
changed at any time and from time to time in the discretion of, the Board.
The
Board may reserve to itself any or all of the authority and responsibility
of
the Committee under the Plan or may act as administrator of the Plan for
any and
all purposes. To the extent the Board has reserved any authority and
responsibility or during any time that the Board is acting as administrator
of
the Plan, it shall have all the powers of the Committee hereunder, and any
reference herein to the Committee (other than in this Section 4.1) shall
include the Board. To the extent any action of the Board under the Plan
conflicts with actions taken by the Committee, the actions of the Board shall
control.
5
4.2. ACTION
AND INTERPRETATIONS BY THE COMMITTEE. For purposes of
administering the Plan, the Committee may from time to time adopt rules,
regulations, guidelines and procedures for carrying out the provisions and
purposes of the Plan and make such other determinations, not inconsistent
with
the Plan, as the Committee may deem appropriate. The Committee's interpretation
of the Plan, any Awards granted under the Plan, any Award Certificate and
all
decisions and determinations by the Committee with respect to the Plan are
final, binding, and conclusive on all parties. Each member of the Committee
is
entitled to, in good faith, rely or act upon any report or other information
furnished to that member by any officer or other employee of the Company
or any
Affiliate, the Company's or an Affiliate's independent certified public
accountants, Company counsel or any executive compensation consultant or
other
professional retained by the Company to assist in the administration of the
Plan.
4.3. AUTHORITY
OF COMMITTEE. Except as provided below, the Committee has the
exclusive power, authority and discretion to:
(a) Grant
Awards;
(b) Designate
Participants;
(c) Determine
the type or types of Awards to be granted to each Participant;
(d) Determine
the number of Awards to be granted and the number of Shares or dollar amount
to
which an Award will relate;
(e) Determine
the terms and conditions of any Award granted under the Plan, including but
not
limited to, the exercise price, base price, or purchase price, any restrictions
or limitations on the Award, any schedule for lapse of forfeiture restrictions
or restrictions on the exercisability of an Award, and accelerations or waivers
thereof, based in each case on such considerations as the Committee in its
sole
discretion determines;
(f) Accelerate
the vesting, exercisability or lapse of restrictions of any outstanding Award,
in accordance with Article 14, based in each case on such considerations as
the Committee in its sole discretion determines;
(g) Determine
whether, to what extent, and under what circumstances an Award may be settled
in, or the exercise price of an Award may be paid in, cash, Stock, other
Awards,
or other property, or an Award may be canceled, forfeited, or
surrendered;
(h) Prescribe
the form of each Award Certificate, which need not be identical for each
Participant;
(i)
Decide all other matters that must be determined in connection with an
Award;
(j)
Establish, adopt or revise any rules, regulations, guidelines or procedures
as
it may deem necessary or advisable to administer the Plan;
(k) Make
all other decisions and determinations that may be required under the Plan
or as
the Committee deems necessary or advisable to administer the Plan;
(l)
Amend the Plan or any Award Certificate as provided herein; and
(m) Adopt
such modifications, procedures, and subplans as may be necessary or desirable
to
comply with provisions of the laws of non-U.S. jurisdictions in which the
Company or any Affiliate may operate, in order to assure the viability of
the
benefits of Awards granted to participants located in such other jurisdictions
and to meet the objectives of the Plan.
6
Notwithstanding
the foregoing, grants
of Awards to Non-Employee Directors hereunder shall be made only in accordance
with the terms, conditions and parameters of a plan, program or policy for
the
compensation of Non-Employee Directors as in effect from time to time, and
the
Committee may not make discretionary grants hereunder to Non-Employee
Directors.
Notwithstanding
the above, the Board
may, by resolution, expressly delegate to a special committee, consisting
of one
or more directors who may but need not be officers of the Company, the
authority, within specified parameters, to (i) designate officers,
employees and/or consultants of the Company or any of its Affiliates to be
recipients of Awards under the Plan, and (ii) to determine the number of
such Awards to be received by any such Participants; provided, however, that
such delegation of duties and responsibilities to an officer of the Company
may
not be made with respect to the grant of Awards to eligible participants
(a) who are subject to Section 16(a) of the 1934 Act at the Grant
Date, or (b) who as of the Grant Date are reasonably anticipated to be
become Covered Employees during the term of the Award. The acts of such
delegates shall be treated hereunder as acts of the Board and such delegates
shall report regularly to the Board and the Compensation Committee regarding
the
delegated duties and responsibilities and any Awards so granted.
4.4. AWARD
CERTIFICATES. Each Award shall be evidenced by an Award
Certificate. Each Award Certificate shall include such provisions, not
inconsistent with the Plan, as may be specified by the Committee.
ARTICLE
5
SHARES
SUBJECT TO THE PLAN
5.1. NUMBER
OF SHARES. Subject to adjustment as provided in Sections 5.2 and
15.1, the aggregate number of Shares reserved and available for issuance
pursuant to Awards granted under the Plan shall be 30,000,000; provided,
however, that each Share issued under the Plan pursuant to a Full Value Award
shall reduce the number of available Shares by two (2) shares. The maximum
number of Shares that may be issued upon exercise of Incentive Stock Options
granted under the Plan shall be 2,000,000.
5.2. SHARE
COUNTING. Shares covered by an Award shall be subtracted from
the Plan share reserve as of the date of grant, but shall be added back to
the
Plan share reserve in accordance with this Section 5.2.
(a) To
the extent that an Award is canceled, terminates, expires, is forfeited or
lapses for any reason, any unissued or forfeited Shares subject to the Award
will again be available for issuance pursuant to Awards granted under the
Plan.
(b) Shares
subject to Awards settled in cash will again be available for issuance pursuant
to Awards granted under the Plan.
(c) Substitute
Awards granted pursuant to Section 14.14 of the Plan shall not count
against the Shares otherwise available for issuance under the Plan under
Section 5.1.
5.3. STOCK
DISTRIBUTED. Any Stock distributed pursuant to an Award may
consist, in whole or in part, of authorized and unissued Stock, treasury
Stock
or Stock purchased on the open market.
5.4. LIMITATION
ON AWARDS. Notwithstanding any provision in the Plan to the
contrary (but subject to adjustment as provided in Section 15.1), the
maximum number of Shares with respect to one or more Options and/or SARs
that
may be granted during any one calendar year under the Plan to any one
Participant shall be 2,000,000. The maximum aggregate grant with respect
to
Awards of Restricted Stock, Restricted Stock Units, Deferred Stock Units,
Performance Shares or other Stock-Based Awards (other than Options or SARs)
granted in any one calendar year to any one Participant shall be
2,000,000.
ARTICLE
6
ELIGIBILITY
6.1. GENERAL. Awards
may be granted only to Eligible Participants; except that Incentive Stock
Options may be granted to only to Eligible Participants who are employees
of the
Company or a Parent or
7
Subsidiary
as defined in Section 424(e) and (f) of the Code. Eligible
Participants who are service providers to an Affiliate may be granted Options
or
SARs under this Plan only if the Affiliate qualifies as an "eligible issuer
of
service recipient stock" within the meaning of §1.409A-1(b)(5)(iii)(E) of the
final regulations under Code Section 409A.
ARTICLE
7
STOCK
OPTIONS
7.1. GENERAL. The
Committee is authorized to grant Options to Participants on the following
terms
and conditions:
(a) EXERCISE
PRICE. The exercise price per Share under an Option shall be determined by
the
Committee; provided that the exercise price for any Option (other than an
Option
issued as a substitute Award pursuant to Section 14.14) shall not be less
than the Fair Market Value as of the Grant Date.
(b) PROHIBITION
ON REPRICING. Except as otherwise provided in Section 15.1, the exercise
price of an Option may not be reduced, directly or indirectly by cancellation
and regrant or otherwise, without the prior approval of the shareholders
of the
Company.
(c) TIME
AND CONDITIONS OF EXERCISE. The Committee shall determine the time or times
at
which an Option may be exercised in whole or in part, subject to
Section 7.1(e). The Committee shall also determine the performance or other
conditions, if any, that must be satisfied before all or part of an Option
may
be exercised or vested.
(d) PAYMENT.
The Committee shall determine the methods by which the exercise price of
an
Option may be paid, the form of payment, including, without limitation, cash,
Shares, or other property (including "cashless exercise" arrangements), and
the
methods by which Shares shall be delivered or deemed to be delivered to
Participants.
(e) EXERCISE
TERM. Except for Nonstatutory Options granted to Participants outside the
United
States, no Option granted under the Plan shall be exercisable for more than
ten
years from the Grant Date.
(f) NO
DEFERRAL FEATURE. No Option shall provide for any feature for the deferral
of
compensation other than the deferral of recognition of income until the exercise
or disposition of the Option.
(g) SUSPENSION.
Any Participant who is also a participant in the Retirement at Micron ("RAM")
Section 401(k) Plan and who requests and receives a hardship distribution
from the RAM Plan, is prohibited from making, and must suspend, his or her
employee elective contributions and employee contributions including, without
limitation on the foregoing, the exercise of any Option granted from the
date of
receipt by that employee of the RAM hardship distribution.
7.2. INCENTIVE
STOCK OPTIONS. The terms of any Incentive Stock Options granted
under the Plan must comply with the requirements of Section 422 of the
Code. If all of the requirements of Section 422 of the Code are not met,
the Option shall automatically become a Nonstatutory Stock Option.
ARTICLE
8
STOCK
APPRECIATION RIGHTS
8.1. GRANT
OF STOCK APPRECIATION RIGHTS. The Committee is authorized to
grant Stock Appreciation Rights to Participants on the following terms and
conditions:
(a) RIGHT
TO PAYMENT. Upon the exercise of a Stock Appreciation Right, the
Participant to whom it is granted has the right to receive the excess, if
any,
of:
8
(1) The
Fair Market Value of one Share on the date of exercise; over
(2) The
base price of the Stock Appreciation Right as determined by the Committee,
which
shall not be less than the Fair Market Value of one Share on the Grant
Date.
(b) PROHIBITION
ON REPRICING. Except as otherwise provided in Section 15.1, the
base price of a SAR may not be reduced, directly or indirectly by cancellation
and regrant or otherwise, without the prior approval of the shareholders
of the
Company.
(c) EXERCISE
TERM. Except for SARs granted to Participants outside the United
States, no SAR shall be exercisable for more than ten years from the Grant
Date.
(d) NO
DEFERRAL FEATURE. No SAR shall provide for any feature for the
deferral of compensation other than the deferral of recognition of income
until
the exercise or disposition of the SAR.
(e) OTHER
TERMS. All awards of Stock Appreciation Rights shall be evidenced by
an Award Certificate. Subject to the limitations of this Article 8, the
terms, methods of exercise, methods of settlement, form of consideration
payable
in settlement, and any other terms and conditions of any Stock Appreciation
Right shall be determined by the Committee at the time of the grant of the
Award
and shall be reflected in the Award Certificate.
ARTICLE
9
PERFORMANCE
SHARES
9.1. GRANT
OF PERFORMANCE SHARES. The Committee is authorized to grant
Performance Shares to Participants on such terms and conditions as may be
selected by the Committee. The Committee shall have the complete discretion
to
determine the number of Performance Shares granted to each Participant, subject
to Section 5.4, and to designate the provisions of such Performance Shares
as provided in Section 4.3. All Performance Shares shall be evidenced by an
Award Certificate or a written program established by the Committee, pursuant
to
which Performance Shares are awarded under the Plan under uniform terms,
conditions and restrictions set forth in such written program.
9.2. PERFORMANCE
GOALS. The Committee may establish performance goals for
Performance Shares which may be based on any criteria selected by the Committee.
Such performance goals may be described in terms of Company-wide objectives
or
in terms of objectives that relate to the performance of the Participant,
an
Affiliate or a division, region, department or function within the Company
or an
Affiliate. If the Committee determines that a change in the business,
operations, corporate structure or capital structure of the Company or the
manner in which the Company or an Affiliate conducts its business, or other
events or circumstances render performance goals to be unsuitable, the Committee
may modify such performance goals in whole or in part, as the Committee deems
appropriate. If a Participant is promoted, demoted or transferred to a different
business unit or function during a performance period, the Committee may
determine that the performance goals or performance period are no longer
appropriate and may (i) adjust, change or eliminate the performance goals
or the applicable performance period as it deems appropriate to make such
goals
and period comparable to the initial goals and period, or (ii) make a cash
payment to the participant in amount determined by the Committee. The foregoing
two sentences shall not apply with respect to an Award of Performance Shares
that is intended to be a Qualified Performance-Based Award.
9.3. RIGHT
TO PAYMENT. The grant of a Performance Share to a Participant
will entitle the Participant to receive at a specified later time a specified
number of Shares, or the equivalent value in cash or other property, if the
performance goals established by the Committee are achieved and the other
terms
and conditions thereof are satisfied. The Committee shall set performance
goals
and other terms or conditions to payment of the Performance Shares in its
discretion which, depending on the extent to which they are met, will determine
the number of the Performance Shares that will be earned by the
Participant.
9.4. OTHER
TERMS. Performance Shares may be payable in cash, Stock, or
other property, and have such other terms and conditions as determined by
the
Committee and reflected in the Award Certificate.
9
ARTICLE
10
RESTRICTED
STOCK AND RESTRICTED STOCK UNIT AWARDS
10.1. GRANT
OF RESTRICTED STOCK AND RESTRICTED STOCK UNITS. Subject to the
terms and conditions of this Article 10, the Committee is authorized to
make Awards of Restricted Stock or Restricted Stock Units to Participants
in
such amounts and subject to such terms and conditions as may be selected
by the
Committee. An Award of Restricted Stock or Restricted Stock Units shall be
evidenced by an Award Certificate setting forth the terms, conditions, and
restrictions applicable to the Award.
10.2. ISSUANCE
AND RESTRICTIONS. Restricted Stock or Restricted Stock Units
shall be subject to such restrictions on transferability and other restrictions
as the Committee may impose (including, without limitation, limitations on
the
right to vote Restricted Stock or the right to receive dividends on the
Restricted Stock); provided, however, at a minimum, all Restricted Stock
and
Restricted Stock Units shall be subject to the restrictions set forth in
Section 14.4 for a period of no less than (a) one year from the date
of award with respect to Restricted Stock or Restricted Stock Units subject
to
restrictions that lapse based upon satisfaction of performance goals, and
(b) three years from the date of award with respect to Restricted Stock or
Restricted Stock Units subject to time-based restrictions that lapse based
upon
one's Continuous Status as a Participant. For avoidance of doubt, nothing
in the
foregoing shall preclude any applicable restriction, including those set
forth
in Section 14.4 hereof, from lapsing ratably, including, but not limited
to, roughly annual increments over three years, with respect to the Restricted
Stock or Restricted Stock Units referred to in Section 10.2(b). Moreover,
nothing in the foregoing shall preclude or be interpreted to preclude Awards
to
Non-employee Directors from containing a period of restriction shorter than
that
set forth above. Finally, nothing in this Section 10.2 shall be deemed or
interpreted to preclude the waiver, lapse or the acceleration of lapse, of
any
restrictions with respect to Restricted Stock or Restricted Stock Units in
accordance with or as permitted by Sections 14.7 through Section 14.9,
respectively, Article 15 or any other provision of the Plan. Subject to the
remaining terms and conditions of the Plan, these restrictions may lapse
separately or in combination at such times, under such circumstances, in
such
installments, upon the satisfaction of performance goals or otherwise, as
the
Committee determines at the time of the grant of the Award or thereafter.
Except
as otherwise provided in an Award Certificate or any special Plan document
governing an Award, the Participant shall have all of the rights of a
stockholder with respect to the Restricted Stock, and the Participant shall
have
none of the rights of a stockholder with respect to Restricted Stock Units
until
such time as Shares of Stock are paid in settlement of the Restricted Stock
Units.
10.3. FORFEITURE. Except
as otherwise determined by the Committee at the time of the grant of the
Award
or thereafter, upon termination of Continuous Status as a Participant during
the
applicable restriction period or upon failure to satisfy a performance goal
during the applicable restriction period, Restricted Stock or Restricted
Stock
Units that are at that time subject to restrictions shall be forfeited;
provided, however, that the Committee may provide in any Award Certificate,
subject to the terms and conditions of the Plan, that restrictions or forfeiture
conditions relating to Restricted Stock or Restricted Stock Units will be
waived
in whole or in part in the event of terminations resulting from specified
causes, including, but not limited to, death, Disability, or for the convenience
or in the best interests of the Company.
10.4. DELIVERY
OF RESTRICTED STOCK. Shares of Restricted Stock shall be
delivered to the Participant at the time of grant either by book-entry
registration or by delivering to the Participant, or a custodian or escrow
agent
(including, without limitation, the Company or one or more of its employees)
designated by the Committee, a stock certificate or certificates registered
in
the name of the Participant. If physical certificates representing shares
of
Restricted Stock are registered in the name of the Participant, such
certificates must bear an appropriate legend referring to the terms, conditions,
and restrictions applicable to such Restricted Stock.
10
ARTICLE
11
DEFERRED
STOCK UNITS
11.1. GRANT
OF DEFERRED STOCK UNITS. The Committee is authorized to grant
Deferred Stock Units to Participants subject to such terms and conditions
as may
be selected by the Committee. Deferred Stock Units shall entitle the Participant
to receive Shares of Stock (or the equivalent value in cash or other property
if
so determined by the Committee) at a future time as determined by the Committee,
or as determined by the Participant within guidelines established by the
Committee in the case of voluntary deferral elections. An Award of Deferred
Stock Units shall be evidenced by an Award Certificate setting forth the
terms
and conditions applicable to the Award.
ARTICLE
12
DIVIDEND
EQUIVALENTS
12.1. GRANT
OF DIVIDEND EQUIVALENTS. The Committee is authorized to grant
Dividend Equivalents to Participants subject to such terms and conditions
as may
be selected by the Committee. Dividend Equivalents shall entitle the Participant
to receive payments equal to dividends with respect to all or a portion of
the
number of Shares subject to an Award, as determined by the Committee. The
Committee may provide that Dividend Equivalents be paid or distributed when
accrued or be deemed to have been reinvested in additional Shares, or otherwise
reinvested. Unless otherwise provided in the applicable Award Certificate,
Dividend Equivalents will be paid or distributed no later than the 15th day of
the 3rd month
following
the later of (i) the calendar year in which the corresponding dividends
were paid to shareholders, or (ii) the first calendar year in which the
Participant's right to such Dividends Equivalents is no longer subject to
a
substantial risk of forfeiture.
ARTICLE
13
STOCK
OR OTHER STOCK-BASED AWARDS
13.1. GRANT
OF STOCK OR OTHER STOCK-BASED AWARDS. The Committee is
authorized, subject to limitations under applicable law, to grant to
Participants such other Awards that are payable in, valued in whole or in
part
by reference to, or otherwise based on or related to Shares, as deemed by
the
Committee to be consistent with the purposes of the Plan, including without
limitation Shares awarded purely as a "bonus" and not subject to any
restrictions or conditions, convertible or exchangeable debt securities,
other
rights convertible or exchangeable into Shares, and Awards valued by reference
to book value of Shares or the value of securities of or the performance
of
specified Parents or Subsidiaries. The Committee shall determine the terms
and
conditions of such Awards.
ARTICLE
14
PROVISIONS
APPLICABLE TO AWARDS
14.1. STAND-ALONE
AND TANDEM AWARDS. Awards granted under the Plan may, in the
discretion of the Committee, be granted either alone or in addition to, in
tandem with, any other Award granted under the Plan. Subject to
Section 16.2, awards granted in addition to or in tandem with other Awards
may be granted either at the same time as or at a different time from the
grant
of such other Awards.
14.2. TERM
OF AWARD. The term of each Award shall be for the period as
determined by the Committee, provided that in no event shall the term of
any
Incentive Stock Option or a Stock Appreciation Right granted in tandem with
the
Incentive Stock Option exceed a period of ten years from its Grant
Date.
14.3. FORM
OF PAYMENT FOR AWARDS. Subject to the terms of the Plan and any
applicable law or Award Certificate, payments or transfers to be made by
the
Company or an Affiliate on the grant or exercise of an Award may be made
in such
form as the Committee determines at or after the Grant Date, including without
limitation, cash, Stock, other Awards, or other property, or any combination,
and may be made in a single payment or transfer, in installments, or (except
with respect to Options or SARs) on a deferred basis, in each case determined
in
accordance with rules adopted by, and at the discretion of, the
Committee.
14.4. LIMITS
ON TRANSFER. No right or interest of a Participant in any
unexercised or restricted Award may be pledged, encumbered, or hypothecated
to
or in favor of any party other than the Company or an Affiliate, or
11
shall
be
subject to any lien, obligation, or liability of such Participant to any
other
party other than the Company or an Affiliate. No unexercised or restricted
Award
shall be assignable or transferable by a Participant other than by will or
the
laws of descent and distribution or, except in the case of an Incentive Stock
Option, pursuant to a domestic relations order that would satisfy
Section 414(p)(1)(A) of the Code if such Section applied to an Award under
the Plan; provided, however, that the Committee may (but need not) permit
other
transfers where the Committee concludes that such transferability (i) does
not result in accelerated taxation, (ii) does not cause any Option intended
to be an Incentive Stock Option to fail to be described in Code
Section 422(b), and (iii) is otherwise appropriate and desirable,
taking into account any factors deemed relevant, including without limitation,
state or federal tax or securities laws applicable to transferable
Awards.
14.5. BENEFICIARIES. Notwithstanding
Section 14.4, a Participant may, in the manner determined by the Committee,
designate a beneficiary to exercise the rights of the Participant and to
receive
any distribution with respect to any Award upon the Participant's death.
A
beneficiary, legal guardian, legal representative, or other person claiming
any
rights under the Plan is subject to all terms and conditions of the Plan
and any
Award Certificate applicable to the Participant, except to the extent the
Plan
and Award Certificate otherwise provide, and to any additional restrictions
deemed necessary or appropriate by the Committee. If no beneficiary has been
designated or survives the Participant, payment shall be made to the
Participant's estate. Subject to the foregoing, a beneficiary designation
may be
changed or revoked by a Participant at any time provided the change or
revocation is filed with the Committee.
14.6. STOCK
TRADING RESTRICTIONS. All Stock issuable under the Plan is
subject to any stop-transfer orders and other restrictions as the Committee
deems necessary or advisable to comply with federal or state securities laws,
rules and regulations and the rules of any national securities exchange or
automated quotation system on which the Stock is listed, quoted, or traded.
The
Committee may place legends on any Stock certificate or issue instructions
to
the transfer agent to reference restrictions applicable to the
Stock.
14.7. ACCELERATION
UPON A CHANGE IN CONTROL. Except as otherwise provided in the
Award Certificate or any special Plan document governing an Award, upon the
occurrence of a Change in Control, all outstanding Options, SARs, and other
Awards in the nature of rights that may be exercised shall become fully
exercisable, and all time-based vesting restrictions on outstanding Awards
shall
lapse. Except as otherwise provided in the Award Certificate or any special
Plan
document governing an Award, upon the occurrence of a Change in Control,
the
target payout opportunities attainable under all outstanding performance-based
Awards shall be deemed to have been fully earned as of the effective date
of the
Change in Control based upon an assumed achievement of all relevant performance
goals at the "target" level and there shall be prorata payout to Participants
within thirty (30) days following the effective date of the Change in
Control (or any later date required by Section 17.3 of the Plan) based upon
the length of time within the performance period that has elapsed prior to
the
Change in Control.
14.8. ACCELERATION
UPON DEATH OR DISABILITY. Except as otherwise provided in the
Award Certificate or any special Plan document governing an Award, upon the
Participant's death or Disability during his or her Continuous Status as
a
Participant, (i) all of such Participant's outstanding Options, SARs, and
other Awards in the nature of rights that may be exercised shall become fully
exercisable, (ii) all time-based vesting restrictions on the Participant's
outstanding Awards shall lapse, and (iii) the target payout opportunities
attainable under all of such Participant's outstanding performance-based
Awards
shall be deemed to have been fully earned as of the date of termination based
upon an assumed achievement of all relevant performance goals at the "target"
level and there shall be a prorata payout to the Participant or his or her
estate within thirty (30) days following the date of termination (or any
later date required by Section 17.3 of the Plan) based upon the length of
time within the performance period that has elapsed prior to the date of
termination. Any Awards shall thereafter continue or lapse in accordance
with
the other provisions of the Plan and the Awards Certificate. To the extent
that
this provision causes Incentive Stock Options to exceed the dollar limitation
set forth in Code Section 422(d), the excess Options shall be deemed to be
Nonstatutory Stock Options.
14.9. ACCELERATION
FOR ANY OTHER REASON. Regardless of whether an event has
occurred as described in Section 14.7 or 14.8 above, and subject to
Section 14.11 as to Qualified Performance-Based Awards, the Committee may
in its sole discretion at any time determine that all or a portion of a
Participant's Options, SARs, and other Awards in the nature of rights that
may
be exercised shall become fully or partially exercisable, that all or a part
of
the time-based vesting restrictions on all or a portion of the outstanding
Awards shall lapse, and/or that any
12
performance-based
criteria with respect to any Awards shall be deemed to be wholly or partially
satisfied, in each case, as of such date as the Committee may, in its sole
discretion, declare; provided, however, the Committee shall not exercise
such
discretion with respect to Full Value Awards comprised of Shares of Restricted
Stock or Restricted Stock Units which, in the aggregate, exceed five percent
(5%) of the aggregate number of Shares reserved and available for issuance
pursuant to Awards granted under the Plan; provided, further, that when
calculating whether the five percent (5%) maximum has been reached, the
Committee shall not count or consider any Shares of Restricted Stock or
Restricted Stock Units granted to Non-Employee Directors or regarding which
the
Committee accelerated vesting rights, waived restrictions or determined
performance-based criteria had been satisfied resulting from an event described
in Section 14.7, Article 15, a Participant's termination of employment
or separation from service resulting from death, Disability or for the
convenience or in the bests interests of the Company. The Committee may
discriminate among Participants and among Awards granted to a Participant
in
exercising its discretion pursuant to this Section 14.9.
14.10. EFFECT
OF ACCELERATION. If an Award is accelerated under
Section 14.7, Section 14.8 or Section 14.9, the Committee may, in
its sole discretion, provide (i) that the Award will expire after a
designated period of time after such acceleration to the extent not then
exercised, (ii) that the Award will be settled in cash rather than Stock,
(iii) that the Award will be assumed by another party to a transaction
giving rise to the acceleration or otherwise be equitably converted or
substituted in connection with such transaction, (iv) that the Award may be
settled by payment in cash or cash equivalents equal to the excess of the
Fair
Market Value of the underlying Stock, as of a specified date associated with
the
transaction, over the exercise price of the Award, or (v) any combination
of the foregoing. The Committee's determination need not be uniform and may
be
different for different Participants whether or not such Participants are
similarly situated. To the extent that such acceleration causes Incentive
Stock
Options to exceed the dollar limitation set forth in Code Section 422(d),
the excess Options shall be deemed to be Nonstatutory Stock
Options.
14.11. QUALIFIED
PERFORMANCE-BASED AWARDS.
(a) The
provisions of the Plan are intended to ensure that all Options and Stock
Appreciation Rights granted hereunder to any Covered Employee shall qualify
for
the Section 162(m) Exemption; provided that the exercise or base price of
such Award is not less than the Fair Market Value of the Shares on the Grant
Date.
(b) When
granting any other Award, the Committee may designate such Award as a Qualified
Performance-Based Award, based upon a determination that the recipient is
or may
be a Covered Employee with respect to such Award, and the Committee wishes
such
Award to qualify for the Section 162(m) Exemption. If an Award is so
designated, the Committee shall establish performance goals for such Award
within the time period prescribed by Section 162(m) of the Code based on
one or more of the following Qualified Business Criteria, which may be expressed
in terms of Company-wide objectives or in terms of objectives that relate
to the
performance of an Affiliate or a unit, division, region, department or function
within the Company or an Affiliate:
|
·
|
Gross
and/or net revenue (including whether in the aggregate or attributable
to
specific products)
|
|
·
|
Cost
of Goods Sold and Gross Margin
|
|
·
|
Costs
and expenses, including Research & Development and Selling,
General & Administrative
|
|
·
|
Income
(gross, operating, net, etc.)
|
|
·
|
Earnings,
including before interest, taxes, depreciation and amortization
(whether
in the aggregate or on a per share
basis
|
|
·
|
Cash
flows and share price
|
|
·
|
Return
on investment, capital, equity
|
13
|
·
|
Manufacturing
efficiency (including yield enhancement and cycle time reductions),
quality improvements and customer
satisfaction
|
|
·
|
Product
life cycle management (including product and technology design,
development, transfer, manufacturing introduction, and sales price
optimization and management)
|
|
·
|
Economic
profit or loss
|
|
·
|
Market
share
|
|
·
|
Employee
retention, compensation, training and development, including succession
planning
|
|
·
|
Objective
goals consistent with the Participant's specific duties and
responsibilities, designed to further the financial, operational
and other
business interests of the Company, including goals and objectives
with
respect to regulatory compliance
matters.
|
Performance
goals with respect to the
foregoing Qualified Business Criteria may be specified in absolute terms
(including completion of pre-established projects, such as the introduction
of
specified products), in percentages, or in terms of growth from period to
period
or growth rates over time as well as measured relative to an established
or
specially-created performance index of Company competitors, peers or other
members of high tech industries. Any member of an index that disappears during
a
measurement period shall be disregarded for the entire measurement period.
Performance Goals need not be based upon an increase or positive result under
a
business criterion and could include, for example, the maintenance of the
status
quo or the limitation of economic losses (measured, in each case, by reference
to a specific business criterion).
(c) Each
Qualified Performance-Based Award (other than an Option or SAR) shall be
earned,
vested and payable (as applicable) only upon the achievement of performance
goals established by the Committee based upon one or more of the Qualified
Business Criteria, together with the satisfaction of any other conditions,
including the condition as to continued employment as set forth in subsection
(g) below, as the Committee may determine to be appropriate; provided,
however, that the Committee may provide, in its sole and absolute discretion,
either in connection with the grant thereof or by amendment thereafter, that
achievement of such performance goals will be waived upon the death or
Disability of the Participant, or upon a Change in Control. In addition,
the
Committee has the right, in connection with the grant of a Qualified
Performance-Based Award, to exercise negative discretion to determine that
the
portion of such Award actually earned, vested and /or payable (as applicable)
shall be less than the portion that would be earned, vested and/or payable
based
solely upon application of the applicable performance goals. Performance
periods
established by the Committee for any such Qualified Performance-Based Award
may
be as short as ninety (90) days and may be any longer period.
(d) The
Committee may provide in any Qualified Performance-Based Award, at the time
the
performance goals are established, that any evaluation of performance shall
include, exclude or otherwise equitably adjust for any of the following events
that occurs during a performance period: (a) asset write-downs or
impairment charges; (b) litigation or claim judgments or settlements;
(c) the effect of changes in tax laws, accounting principles or other laws
or provisions affecting reported results; (d) accruals for reorganization
and restructuring programs; (e) extraordinary nonrecurring items as
described in Accounting Principles Board Opinion No. 30 and /or in
management's discussion and analysis of financial condition and results of
operations appearing in the Company's annual report to stockholders for the
applicable year; (f) acquisitions or divestitures; and (g) foreign
exchange gains and losses. To the extent such inclusions or exclusions affect
Awards to Covered Employees, they shall be prescribed in a form and at a
time
that meets the requirements of Code Section 162(m) for
deductibility.
(e) Any
payment of a Qualified Performance-Based Award granted with performance goals
pursuant to subsection (c) above shall be conditioned on the written
certification of the Committee in each case that
14
(f) Section 5.4
sets forth the maximum number of Shares that may be granted in any one-year
period to a Participant in designated forms of stock-based Awards.
(g) With
respect to a Participant who is an officer of the Company, any payment of
a
Qualified Performance-Based Award granted with performance goals pursuant
to
subsection (c) above shall be conditioned on the officer having remained
continuously employed by the Company or an Affiliate for the entire performance
or measurement period, including, as well, through the date of determination
and
certification of the payment of any such Award pursuant to subsection
(e) above (the "Certification Date"). For purposes of the Plan, with
respect to any given performance or measurement period, an officer of the
Company (i) who terminates employment (regardless of cause) or who
otherwise ceases to be an officer, prior to the Certification Date, and
(ii) who, pursuant to a separate contractual arrangement with the Company
is entitled to receive payments from the Company thereunder extending to
or
beyond such Certification Date as a result of such termination or cessation
in
officer status, shall be deemed to have been employed by the Company as an
officer through the Certification Date for purposes of payment
eligibility.
14.12. TERMINATION
OF EMPLOYMENT. Whether military, government or other service or
other leave of absence shall constitute a termination of employment shall
be
determined in each case by the Committee at its discretion, and any
determination by the Committee shall be final and conclusive. A Participant's
Continuous Status as a Participant shall not be deemed to terminate (i) in
a circumstance in which a Participant transfers from the Company to an
Affiliate, transfers from an Affiliate to the Company, or transfers from
one
Affiliate to another Affiliate, or (ii) in the discretion of the Committee
as specified at or prior to such occurrence, in the case of a spin-off, sale
or
disposition of the Participant's employer from the Company or any Affiliate.
To
the extent that this provision causes Incentive Stock Options to extend beyond
three months from the date a Participant is deemed to be an employee of the
Company, a Parent or Subsidiary for purposes of Sections 424(e) and 424(f)
of
the Code, the Options held by such Participant shall be deemed to be
Nonstatutory Stock Options.
14.13. FORFEITURE
EVENTS. The Committee may specify in an Award Certificate 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 of employment for cause, violation of
material Company or Affiliate 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 or any Affiliate.
14.14. SUBSTITUTE
AWARDS. The Committee may grant Awards under the Plan in
substitution for stock and stock-based awards held by employees of another
entity who become employees of the Company or an Affiliate as a result of
a
merger or consolidation of the former employing entity with the Company or
an
Affiliate or the acquisition by the Company or an Affiliate of property or
stock
of the former employing corporation. The Committee may direct that the
substitute awards be granted on such terms and conditions as the Committee
considers appropriate in the circumstances.
15
ARTICLE
15
CHANGES
IN CAPITAL STRUCTURE
15.1. MANDATORY
ADJUSTMENTS. In the event of a nonreciprocal transaction between
the Company and its stockholders that causes the per-share value of the Stock
to
change (including, without limitation, any stock dividend, stock split,
spin-off, rights offering, or large nonrecurring cash dividend), the
authorization limits under Section 5.1 and 5.4 shall be adjusted
proportionately, and the Committee shall make such adjustments to the Plan
and
Awards as it deems necessary, in its sole discretion, to prevent dilution
or
enlargement of rights immediately resulting from such transaction. Action
by the
Committee may include: (i) adjustment of the number and kind of shares that
may be delivered under the Plan; (ii) adjustment of the number and kind of
shares subject to outstanding Awards; (iii) adjustment of the exercise
price of outstanding Awards or the measure to be used to determine the amount
of
the benefit payable on an Award; and (iv) any other adjustments that the
Committee determines to be equitable. Without limiting the foregoing, in
the
event of a subdivision of the outstanding Stock (stock-split), a declaration
of
a dividend payable in Shares, or a combination or consolidation of the
outstanding Stock into a lesser number of Shares, the authorization limits
under
Section 5.1 and 5.4 shall automatically be adjusted proportionately, and
the Shares then subject to each Award shall automatically, without the necessity
for any additional action by the Committee, be adjusted proportionately without
any change in the aggregate purchase price therefor.
15.2. DISCRETIONARY
ADJUSTMENTS. Upon the occurrence or in anticipation of any
corporate event or transaction involving the Company (including, without
limitation, any merger, reorganization, recapitalization, combination or
exchange of shares, or any transaction described in Section 15.1), the
Committee may, in its sole discretion, provide (i) that Awards will be
settled in cash rather than Stock, (ii) that Awards will become immediately
vested and exercisable and will expire after a designated period of time
to the
extent not then exercised, (iii) that Awards will be assumed by another
party to a transaction or otherwise be equitably converted or substituted
in
connection with such transaction, (iv) that outstanding Awards may be
settled by payment in cash or cash equivalents equal to the excess of the
Fair
Market Value of the underlying Stock, as of a specified date associated with
the
transaction, over the exercise price of the Award, (v) that performance
targets and performance periods for Performance Awards will be modified,
consistent with Code Section 162(m) where applicable, or (vi) any
combination of the foregoing. The Committee's determination need not be uniform
and may be different for different Participants whether or not such Participants
are similarly situated.
15.3. GENERAL. Any
discretionary adjustments made pursuant to this Article 15 shall be subject
to the provisions of Section 16.2. To the extent that any adjustments made
pursuant to this Article 15 cause Incentive Stock Options to cease to
qualify as Incentive Stock Options, such Options shall be deemed to be
Nonstatutory Stock Options.
ARTICLE
16
AMENDMENT,
MODIFICATION AND TERMINATION
16.1. AMENDMENT,
MODIFICATION AND TERMINATION. The Board or the Committee may, at
any time and from time to time, amend, modify or terminate the Plan without
stockholder approval; provided, however, that if an amendment to the Plan
would,
in the reasonable opinion of the Board or the Committee, either
(i) materially increase the number of Shares available under the Plan,
(ii) expand the types of awards under the Plan, (iii) materially
expand the class of participants eligible to participate in the Plan,
(iv) materially extend the term of the Plan, or (v) otherwise
constitute a material change requiring stockholder approval under applicable
laws, policies or regulations or the applicable listing or other requirements
of
an Exchange, then such amendment shall be subject to stockholder approval;
and
provided, further, that the Board or Committee may condition any other amendment
or modification on the approval of stockholders of the Company for any reason,
including by reason of such approval being necessary or deemed advisable
to
(i) to comply with the listing or other requirements of an Exchange, or
(ii) to satisfy any other tax, securities or other applicable laws,
policies or regulations.
16.2. AWARDS
PREVIOUSLY GRANTED. At any time and from time to time, the
Committee may amend, modify or terminate any outstanding Award without approval
of the Participant; provided, however:
(a) Subject
to the terms of the applicable Award Certificate, such amendment, modification
or termination shall not, without the Participant's consent, reduce or diminish
the value of such Award
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(b) The
original term of an Option may not be extended without the prior approval
of the
stockholders of the Company;
(c) Except
as otherwise provided in Article 15, the exercise price of an Option may
not be reduced, directly or indirectly, without the prior approval of the
stockholders of the Company; and
(d) No
termination, amendment, or modification of the Plan shall adversely affect
any
Award previously granted under the Plan, without the written consent of the
Participant affected thereby. An outstanding Award shall not be deemed to
be
"adversely affected" by a Plan amendment if such amendment would not reduce
or
diminish the value of such Award determined as if the Award had been exercised,
vested, cashed in or otherwise settled on the date of such amendment (with
the
per-share value of an Option or Stock Appreciation Right for this purpose
being
calculated as the excess, if any, of the Fair Market Value as of the date
of
such amendment over the exercise or base price of such Award).
16.3. COMPLIANCE
AMENDMENTS. Notwithstanding anything in the Plan or in any Award
Certificate to the contrary, the Committee may amend the Plan or an Award
Certificate, to take effect retroactively or otherwise, as deemed necessary
or
advisable for the purpose of conforming the Plan or Award Certificate to
any
present or future law relating to plans of this or similar nature (including,
but not limited to, Section 409A of the Code), and to the administrative
regulations and rulings promulgated thereunder. By accepting an Award under
this
Plan, a Participant agrees to any amendment made pursuant to this
Section 16.3 to any Award granted under the Plan without further
consideration or action.
ARTICLE
17
GENERAL
PROVISIONS
17.1. NO
RIGHTS TO AWARDS; NON-UNIFORM DETERMINATIONS. No Participant or
any Eligible Participant shall have any claim to be granted any Award under
the
Plan. Neither the Company, its Affiliates nor the Committee is obligated
to
treat Participants or Eligible Participants uniformly, and determinations
made
under the Plan may be made by the Committee selectively among Eligible
Participants who receive, or are eligible to receive, Awards (whether or
not
such Eligible Participants are similarly situated).
17.2. NO
STOCKHOLDER RIGHTS. No Award gives a Participant any of the
rights of a stockholder of the Company unless and until Shares are in fact
issued to such person in connection with such Award.
17.3. SPECIAL
PROVISIONS RELATED TO SECTION 409A OF THE CODE.
(a) Notwithstanding
anything in the Plan or in any Award Certificate to the contrary, to the
extent
that any amount or benefit that would constitute non-exempt "deferred
compensation" for purposes of Section 409A of the Code would otherwise be
payable or distributable under the Plan or any Award Certificate by reason
of
the occurrence of a Change in Control, or the Participant's Disability or
separation from service, such amount or benefit will not be payable or
distributable to the Participant by reason of such circumstance unless
(i) the circumstances giving rise to such Change in Control, Disability or
separation from service meet any description or definition of "change in
control
event", "disability" or "separation from service", as the case may be, in
Section 409A of the Code and applicable regulations (without giving effect
to any elective provisions that may be available under such definition),
or
(ii) the payment or distribution of such amount or benefit would be exempt
from the application of Section 409A of the Code by reason of the
short-term deferral exemption or otherwise. This provision does not prohibit
the
vesting of any Award upon a Change in Control, Disability or separation
from service, however defined. If this provision prevents the payment or
distribution of any amount or benefit, such payment or distribution shall
be
made on the next earliest payment or distribution date or event specified
in the
Award Certificate that is permissible under Section 409A.
17
(b) If
any one or more Awards granted under the Plan to a Participant could qualify
for
any separation pay exemption described in Treas. Reg.
Section 1.409A-1(b)(9), but such Awards in the aggregate exceed the dollar
limit permitted for the separation pay exemptions, the Company (acting through
the Committee or the Company's President) shall determine which Awards or
portions thereof will be subject to such exemptions.
(c) Notwithstanding
anything in the Plan or in any Award Certificate to the contrary, if any
amount
or benefit that would constitute non-exempt "deferred compensation" for purposes
of Section 409A of the Code would otherwise be payable or distributable
under this Plan or any Award Certificate by reason of a Participant's separation
from service during a period in which the Participant is a Specified Employee
(as defined below), then, subject to any permissible acceleration of payment
by
the Committee under Treas. Reg. Section 1.409A-3(j)(4)(ii) (domestic
relations order), (j)(4)(iii) (conflicts of interest), or
(j)(4)(vi) (payment of employment taxes):
(i) if
the payment or distribution is payable in a lump sum, the Participant's right
to
receive payment or distribution of such non-exempt deferred compensation
will be
delayed until the earlier of the Participant's death or the first day of
the
seventh month following the Participant's separation from service;
and
(ii) if
the payment or distribution is payable over time, the amount of such non-exempt
deferred compensation that would otherwise be payable during the six-month
period immediately following the Participant's separation from service will
be
accumulated and the Participant's right to receive payment or distribution
of
such accumulated amount will be delayed until the earlier of the Participant's
death or the first day of the seventh month following the Participant's
separation from service, whereupon the accumulated amount will be paid or
distributed to the Participant and the normal payment or distribution schedule
for any remaining payments or distributions will resume.
For
purposes of this Plan, the term
"Specified Employee" has the meaning given such term in Code Section 409A
and the final regulations thereunder, provided, however, that, as
permitted in such final regulations, the Company's Specified Employees and
its
application of the six-month delay rule of Code
Section 409A(a)(2)(B)(i) shall be determined in accordance with rules
adopted by the Board or any committee of the Board, which shall be applied
consistently with respect to all nonqualified deferred compensation arrangements
of the Company, including this Plan.
17.4. WITHHOLDING. The
Company or any Affiliate shall have the authority and the right to deduct
or
withhold, or require a Participant to remit to the Company, an amount sufficient
to satisfy federal, state, and local taxes (including the Participant's FICA
obligation) required by law to be withheld with respect to any exercise,
lapse
of restriction or other taxable event arising as a result of the Plan. With
respect to withholding required upon any taxable event under the Plan, the
Committee may, at the time the Award is granted or thereafter, require or
permit
that any such withholding requirement be satisfied, in whole or in part,
by
withholding from the Award Shares having a Fair Market Value on the date
of
withholding equal to the minimum amount (and not any greater amount) required
to
be withheld for tax purposes, all in accordance with such procedures as the
Committee establishes. All such elections shall be subject to any restrictions
or limitations that the Committee, in its sole discretion, deems
appropriate.
17.5. NO
RIGHT TO CONTINUED SERVICE. Nothing in the Plan, any Award
Certificate or any other document or statement made with respect to the Plan,
shall interfere with or limit in any way the right of the Company or any
Affiliate to terminate any Participant's employment or status as an officer,
director or consultant at any time, nor confer upon any Participant any right
to
continue as an employee, officer, director or consultant of the Company or
any
Affiliate, whether for the duration of a Participant's Award or otherwise.
Neither an Award nor any benefits arising under this Plan shall constitute
an
employment contract with the Company or any Affiliate and, accordingly, subject
to Article 16, this Plan and the benefits hereunder may be terminated at
any time in the sole and exclusive discretion of the Board of Directors without
giving rise to any liability on the part of the Company or an of its
Affiliates.
18
17.6.
UNFUNDED STATUS OF AWARDS. The Plan is intended to be an
"unfunded" plan for incentive and deferred compensation. With respect to
any
payments not yet made to a Participant pursuant to an Award, nothing contained
in the Plan or any Award Certificate shall give the Participant any rights
that
are greater than those of a general creditor of the Company or any Affiliate.
This Plan is not intended to be subject to ERISA.
17.7.
RELATIONSHIP TO OTHER BENEFITS. No payment under the Plan
shall be taken into account in determining any benefits under any pension,
retirement, savings, profit sharing, group insurance, welfare or benefit
plan of
the Company or any Affiliate unless provided otherwise in such other
plan.
17.8.
EXPENSES. The expenses of administering the Plan shall be
borne by the Company and its Affiliates.
17.9.
TITLES AND HEADINGS. The titles and headings of the
Sections in the Plan are for convenience of reference only, and in the event
of
any conflict, the text of the Plan, rather than such titles or headings,
shall
control.
17.10.
GENDER AND NUMBER. Except where otherwise indicated by the
context, any masculine term used herein also shall include the feminine;
the
plural shall include the singular and the singular shall include the
plural.
17.11.
FRACTIONAL SHARES. No fractional Shares shall be issued and
the Committee shall determine, in its discretion, whether cash shall be given
in
lieu of fractional Shares or whether such fractional Shares shall be eliminated
by rounding up or down.
17.12.
GOVERNMENT AND OTHER REGULATIONS.
(a) Notwithstanding
any other provision of the Plan, no Participant who acquires Shares pursuant
to
the Plan may, during any period of time that such Participant is an affiliate
of
the Company (within the meaning of the rules and regulations of the Securities
and Exchange Commission under the 1933 Act), sell such Shares, unless such
offer
and sale is made (i) pursuant to an effective registration statement under
the 1933 Act, which is current and includes the Shares to be sold, or
(ii) pursuant to an appropriate exemption from the registration requirement
of the 1933 Act, such as that set forth in Rule 144 promulgated under the
1933 Act.
(b) Notwithstanding
any other provision of the Plan, if at any time the Committee shall determine
that the registration, listing or qualification of the Shares covered by
an
Award upon any Exchange or under any foreign, federal, state or local law
or
practice, or the consent or approval of any governmental regulatory body,
is
necessary or desirable as a condition of, or in connection with, the granting
of
such Award or the purchase or receipt of Shares thereunder, no Shares may
be
purchased, delivered or received pursuant to such Award unless and until
such
registration, listing, qualification, consent or approval shall have been
effected or obtained free of any condition not acceptable to the Committee.
Any
Participant receiving or purchasing Shares pursuant to an Award shall make
such
representations and agreements and furnish such information as the Committee
may
request to assure compliance with the foregoing or any other applicable legal
requirements. The Company shall not be required to issue or deliver any
certificate or certificates for Shares under the Plan prior to the Committee's
determination that all related requirements have been fulfilled. The Company
shall in no event be obligated to register any securities pursuant to the
1933
Act or applicable state or foreign law or to take any other action in order
to
cause the issuance and delivery of such certificates to comply with any such
law, regulation or requirement.
17.13.
GOVERNING LAW. To the extent not governed by federal law,
the Plan and all Award Certificates shall be construed in accordance with
and
governed by the laws of the State of Delaware.
17.14.
ADDITIONAL PROVISIONS. Each Award Certificate may contain
such other terms and conditions as the Committee may determine; provided
that
such other terms and conditions are not inconsistent with the provisions
of the
Plan.
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17.15. NO
LIMITATIONS ON RIGHTS OF COMPANY. The grant of any Award shall
not in any way affect the right or power of the Company to make adjustments,
reclassification or changes in its capital or business structure or to merge,
consolidate, dissolve, liquidate, sell or transfer all or any part of its
business or assets. The Plan shall not restrict the authority of the Company,
for proper corporate purposes, to draft or assume awards, other than under
the
Plan, to or with respect to any person. If the Committee so directs, the
Company
may issue or transfer Shares to an Affiliate, for such lawful consideration
as
the Committee may specify, upon the condition or understanding that the
Affiliate will transfer such Shares to a Participant in accordance with the
terms of an Award granted to such Participant and specified by the Committee
pursuant to the provisions of the Plan.
17.16. INDEMNIFICATION. Each
person who is or shall have been a member of the Committee, or of the Board,
or
an officer of the Company to whom authority was delegated in accordance with
Article 4 shall be indemnified and held harmless by the Company against and
from any loss, cost, liability, or expense that may be imposed upon or
reasonably incurred by him or her in connection with or resulting from any
claim, action, suit, or proceeding to which he or she may be a party or in
which
he or she may be involved by reason of any action taken or failure to act
under
the Plan and against and from any and all amounts paid by him or her in
settlement thereof, with the Company's approval, or paid by him or her in
satisfaction of any judgment in any such action, suit, or proceeding against
him
or her, provided he or she shall give the Company an opportunity, at its
own
expense, to handle and defend the same before he or she undertakes to handle
and
defend it on his or her own behalf, unless such loss, cost, liability, or
expense is a result of his or her own willful misconduct or except as expressly
provided by statute. The foregoing right of indemnification shall not be
exclusive of any other rights of indemnification to which such persons may
be
entitled under the Company's Certificate of Incorporation or Bylaws, as a
matter
of law, or otherwise, or any power that the Company may have to indemnify
them
or hold them harmless.
20