EXHIBIT 99.11
AVOCENT CORPORATION
2005 EQUITY INCENTIVE PLAN
1. Purposes of the Plan. The purposes of this Equity Incentive Plan are:
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o to attract and retain the best available personnel for positions
of substantial responsibility,
o to provide additional incentive to Service Providers, and
o to promote the success of the Company's business.
Awards granted under the Plan may be Incentive Stock Options,
Nonstatutory Stock Options, Restricted Stock, Restricted Stock Units, Stock
Appreciation Rights, Performance Shares, Performance Units, Deferred Stock Units
or Dividend Equivalents, as determined by the Administrator at the time of
grant.
2. Definitions. As used herein, the following definitions shall apply:
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(a) "Administrator" means the Board or any of its Committees as shall
be administering the Plan, in accordance with Section 4 of the Plan.
(b) "Annual Revenue" means the Company's or a business unit's net
sales for the Fiscal Year, determined in accordance with generally accepted
accounting principles.
(c) "Applicable Laws" means the requirements relating to the
administration of equity compensation plans under U.S. state corporate laws,
U.S. federal and state securities laws, the Code, any stock exchange or
quotation system on which the Shares are listed or quoted and the applicable
laws of any other country or jurisdiction where Awards are granted under the
Plan.
(d) "Award" means, individually or collectively, a grant under the
Plan of Options, Restricted Stock, Restricted Stock Units, Stock Appreciation
Rights, Performance Shares, Performance Units, Deferred Stock Units or Dividend
Equivalents.
(e) "Award Agreement" means the written or electronic agreement
setting forth the terms and provisions applicable to each Award granted under
the Plan. The Award Agreement is subject to the terms and conditions of the
Plan.
(f) "Awarded Stock" means the Common Stock subject to an Award. (g)
"Board" means the Board of Directors of the Company.
(h) "Cash Position" means the Company's level of cash and cash
equivalents.
(i) "Change of Control" means the occurrence of any of the following
events, in one or a series of related transactions:
(i) Any person acquires beneficial ownership of the Company's
securities and is or thereby becomes a beneficial owner of securities entitling
such person to exercise twenty-five percent (25%) or more of the combined voting
power of the Company's then outstanding stock. For purposes of this Amendment,
"beneficial ownership" shall be determined in accordance with Regulation 13D
under the Securities Exchange Act of 1934, or any similar successor regulation
or rule; and the term "person" shall include any natural person, corporation,
partnership, trust, or association, or any group or combination thereof, whose
ownership of the Company's securities would be required to be reported under
such Regulation 13D, or any similar successor regulation or rule.
(ii) Within any twenty-four (24) month period, the individuals
who were Directors of the Company at the beginning of any such period, together
with any other Directors first elected as directors of the Company pursuant to
nominations approved or ratified by at least two-thirds (2/3) of the Directors
in office immediately prior to any such election, cease to constitute a majority
of the Board of Directors of the Company.
(iii) The Company's stockholders approve:
a) any consolidation or merger of the Company in which the
Company is not the continuing or surviving corporation or pursuant to which
shares of the Company common stock would be converted into cash, securities or
other property, other than a merger or consolidation of the Company in which the
holders of the Company's common stock immediately prior to the merger or
consolidation have substantially the same proportionate ownership and voting
control of the surviving corporation immediately after the merger or
consolidation; or
b) any sale, lease, exchange, liquidation or other
transfer (in one transaction or a series of transactions) of all or
substantially all of the assets of the Company.
Notwithstanding subparagraphs (i)(iii)(1) and (b)(iii)(2) above, the term
"Change in Control" shall not include a consolidation, merger, or other
reorganization if upon consummation of such transaction all of the outstanding
voting stock of the Company is owned, directly or indirectly, by a holding
company, and the holders of the Company's common stock immediately prior to the
transaction have substantially the same proportionate ownership and voting
control of such holding company after such transaction.
(j) "Code" means the Internal Revenue Code of 1986, as amended.
(k) "Committee" means a Committee appointed by the Board in
accordance with Section 4 of the Plan.
(l) "Common Stock" means the Common Stock of the Company.
(m) "Company" means Avocent Corporation.
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(n) "Consultant" means any person, including an advisor, engaged by
the Company or a Parent or Subsidiary to render services and who is compensated
for such services.
(o) "Deferred Stock Unit" means a deferred stock unit Award granted
to a Participant pursuant to Section 15.
(p) "Director" means a member of the Board.
(q) "Disability" means total and permanent disability as defined in
Section 22(e)(3) of the Code.
(r) "Dividend Equivalent" means a credit, payable in cash, made at
the discretion of the Administrator, to the account of a Participant in an
amount equal to the cash dividends paid on one Share for each Share represented
by an Award held by such Participant. The Dividend Equivalent for each Share
subject to an Award shall only be paid to a Participant on the vesting date for
such Share.
(s) "Earnings Per Share" means as to any Fiscal Year, the Company's
or a business unit's Net Income, divided by a weighted average number of common
shares outstanding and dilutive common equivalent shares deemed outstanding,
determined in accordance with generally accepted accounting principles.
(t) "Employee" means any person, including Officers and Directors,
employed by the Company or any Parent or Subsidiary of the Company. A Service
Provider shall not cease to be an Employee in the case of (i) any leave of
absence approved by the Company or (ii) transfers between locations of the
Company or between the Company, its Parent, any Subsidiary, or any successor.
For purposes of Incentive Stock Options, no such leave may exceed ninety days,
unless reemployment upon expiration of such leave is guaranteed by statute or
contract. If reemployment upon expiration of a leave of absence approved by the
Company is not so guaranteed, then three (3) months following the 91st day of
such leave any Incentive Stock Option held by the Participant shall cease to be
treated as an Incentive Stock Option and shall be treated for tax purposes as a
Nonstatutory Stock Option.
(u) "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
(v) "Fair Market Value" means, as of any date, the value of Common
Stock determined as follows:
(i) If the Common Stock is listed on any established stock
exchange or a national market system, including without limitation the Nasdaq
National Market of the National Association of Securities Dealers, Inc.
Automated Quotation ("Nasdaq") System, the Fair Market Value of a Share of
Common Stock shall be the closing sales price for such stock (or the closing
bid, if no sales were reported) as quoted on such system or exchange (or the
exchange with the greatest volume of trading in Common Stock) on the day of
determination, as reported in The Wall Street Journal or such other source as
the Administrator deems reliable;
(ii) If the Common Stock is quoted on the Nasdaq System (but not
on the Nasdaq National Market thereof) or is regularly quoted by a recognized
securities dealer but selling prices are not reported, the Fair Market Value of
a Share of Common Stock shall be the mean between the high bid and low asked
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prices for the Common Stock on the last market trading day prior to the day of
determination, as reported in The Wall Street Journal or such other source as
the Administrator deems reliable;
(iii) In the absence of an established market for the Common
Stock, the Fair Market Value shall be determined in good faith by the
Administrator.
(w) "Fiscal Year" means a fiscal year of the Company.
(x) "Incentive Stock Option" means an Option intended to qualify as
an incentive stock option within the meaning of Section 422 of the Code and the
regulations promulgated thereunder.
(y) "Net Income" means as to any Fiscal Year, the income after taxes
of the Company for the Fiscal Year determined in accordance with generally
accepted accounting principles.
(z) "Nonstatutory Stock Option" means an Option not intended to
qualify as an Incentive Stock Option.
(aa) "Notice of Grant" means a written or electronic notice evidencing
certain terms and conditions of an individual Award. The Notice of Grant is part
of the Option Agreement.
(bb) "Officer" means a person who is an officer of the Company within
the meaning of Section 16 of the Exchange Act and the rules and regulations
promulgated thereunder.
(cc) "Operating Cash Flow" means the Company's or a business unit's
sum of Net Income plus depreciation and amortization less capital expenditures
plus changes in working capital comprised of accounts receivable, inventories,
other current assets, trade accounts payable, accrued expenses, product
warranty, advance payments from customers and long-term accrued expenses,
determined in accordance with generally acceptable accounting principles.
(dd) "Operating Income" means the Company's or a business unit's
income from operations prior to intangible amortization, merger-related
expenses, impairment charges, and any other unusual items, determined in
accordance with generally accepted accounting principles.
(ee) "Operational Earnings Per Share" means as to any Fiscal Year, the
Company's or a business unit's Operating Income, divided by a weighted average
number of common shares outstanding and dilutive common equivalent shares deemed
outstanding, determined in accordance with generally accepted accounting
principles.
(ff) "Option" means a stock option granted pursuant to the Plan.
(gg) "Option Agreement" means a written or electronic agreement
between the Company and a Participant evidencing the terms and conditions of an
individual Option grant. The Option Agreement is subject to the terms and
conditions of the Plan.
(hh) "Parent" means a "parent corporation", whether now or hereafter
existing, as defined in Section 424(e) of the Code.
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(ii) "Participant" means the holder of an outstanding Award granted
under the Plan.
(jj) "Performance Goals" means the goal(s) (or combined goal(s))
determined by the Administrator (in its discretion) to be applicable to a
Participant with respect to an Award. As determined by the Administrator, the
Performance Goals applicable to an Award may provide for a targeted level or
levels of achievement using one or more of the following measures: (a) Annual
Revenue, (b) Cash Position, (c) Earnings Per Share, (d) Net Income, (e)
Operating Cash Flow, (f) Operating Income, (g) Operational Earnings Per Share,
(h) Return on Assets, (i) Return on Equity, (j) Return on Sales, (k) Company
share price, and (l) Total Stockholder Return. The Performance Goals may differ
from Participant to Participant and from Award to Award. The Administrator shall
appropriately adjust any evaluation of performance under a Performance Goal to
exclude (i) any extraordinary non-recurring items as described in Accounting
Principles Board Opinion No. 30 and/or in management's discussion and analysis
of financial conditions and results of operations appearing in the Company's
annual report to stockholders for the applicable year, or (ii) the effect of any
changes in accounting principles affecting the Company's or a business units'
reported results.
(kk) "Performance Share" means a performance share Award granted to a
Participant pursuant to Section 13.
(ll) "Performance Unit" means a performance unit Award granted to a
Participant pursuant to Section 14.
(mm) "Plan" means this 2005 Equity Incentive Plan.
(nn) "Restricted Stock" means Shares granted pursuant to Section 11 of
the Plan.
(oo) "Restricted Stock Unit" means an Award granted pursuant to
Section 12 of the Plan.
(pp) "Return on Assets" means the percentage equal to the Company's or
a business unit's Operating Income before incentive compensation, divided by
average net Company or business unit, as applicable, assets, determined in
accordance with generally accepted accounting principles.
(qq) "Return on Equity" means the percentage equal to the Company's
Net Income divided by average stockholder's equity, determined in accordance
with generally accepted accounting principles.
(rr) "Return on Sales" means the percentage equal to the Company's or
a business unit's Operating Income before incentive compensation, divided by the
Company's or the business unit's, as applicable, revenue, determined in
accordance with generally accepted accounting principles.
(ss) "Rule 16b-3" means Rule 16b-3 of the Exchange Act or any
successor to Rule 16b-3, as in effect when discretion is being exercised with
respect to the Plan.
(tt) "Section 16(b)" means Section 16(b) of the Securities Exchange
Act of 1934, as amended.
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(uu) "Service Provider" means an Employee, Consultant or Director.
(vv) "Share" means a share of the Common Stock, as adjusted in
accordance with Section 19 of the Plan.
(ww) "Stock Appreciation Right" or "SAR" means an Award granted
pursuant to Section 10 hereof.
(xx) "Subsidiary" means a "subsidiary corporation," whether now or
hereafter existing, as defined in Section 424(f) of the Code.
(yy) "Total Stockholder Return" means the total return (change in
share price plus reinvestment of any dividends) of a Share.
3. Stock Subject to the Plan.
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(a) Stock Subject to Plan. Subject to the provisions of Section 19 of
the Plan, the maximum aggregate number of Shares which may be issued under the
Plan is 2,500,000 Shares, plus any Shares remaining available for issuance under
the Company's stock option plans on the date of the Company's 2005 Annual
Meeting of Stockholders plus any Shares subject to any outstanding options under
the Company's stock option plans on the date of the Company's 2005 Annual
Meeting of Stockholders that subsequently expire unexercised. The Shares may be
authorized, but unissued, or reacquired Common Stock.
(b) Full Value Awards. Any Shares subject to Options or SARs shall be
counted against the numerical limits of this Section 3 as one Share for every
Share subject thereto. Any Shares subject to Restricted Stock, Performance
Shares or Restricted Stock Units with a per share or unit purchase price lower
than 100% of Fair Market Value on the date of grant shall be counted against the
numerical limits of this Section 3 as two Shares for every one Share subject
thereto. To the extent that a Share that was subject to an Award that counted as
two Shares against the Plan reserve pursuant to the preceding sentence is
recycled back into the Plan under Section 3(c) below, the Plan shall be credited
with two Shares.
(c) Lapsed Awards. If an Award expires or becomes unexercisable
without having been exercised in full, or, with respect to Restricted Stock,
Performance Shares or Restricted Stock Units, is forfeited to or repurchased by
the Company, the unpurchased Shares (or for Awards other than Options and SARs,
the forfeited or repurchased shares) which were subject thereto shall become
available for future grant or sale under the Plan (unless the Plan has
terminated). With respect to SARs, Shares issued pursuant to an SAR as well as
the Shares withheld to pay the exercise price shall cease to be available under
the Plan. Shares that have actually been issued under the Plan under any Award
shall not be returned to the Plan and shall not become available for future
distribution under the Plan; provided, however, that if Shares of Restricted
Stock, Performance Shares or Restricted Stock Units are repurchased by the
Company at their original purchase price or are forfeited to the Company, such
Shares shall become available for future grant under the Plan. Shares used to
pay the exercise price of an Option shall not become available for future grant
or sale under the Plan. Shares used to satisfy tax withholding obligations shall
not become available for future grant or sale under the Plan. To the extent an
Award under the Plan is paid out in cash rather than stock, such cash payment
shall not reduce the number of Shares available for issuance under the Plan. Any
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payout of Performance Units or Dividend Equivalents, because they are payable
only in cash, shall not reduce the number of Shares available for issuance under
the Plan. Conversely, any forfeiture of Performance Units or Dividend
Equivalents shall not increase the number of Shares available for issuance under
the Plan.
4. Administration of the Plan.
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(a) Procedure.
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(i) Multiple Administrative Bodies. The Plan may be administered
by different Committees with respect to different groups of Service Providers.
(ii) Section 162(m). To the extent that the Administrator
determines it to be desirable to qualify Options granted hereunder as
"performance-based compensation" within the meaning of Section 162(m) of the
Code, the Plan shall be administered by a Committee of two or more "outside
directors" within the meaning of Section 162(m) of the Code.
(iii) Rule 16b-3. To the extent desirable to qualify transactions
hereunder as exempt under Rule 16b-3, the transactions contemplated hereunder
shall be structured to satisfy the requirements for exemption under Rule 16b-3.
(iv) Other Administration. Other than as provided above, the Plan
shall be administered by (A) the Board or (B) a Committee, which committee shall
be constituted to satisfy Applicable Laws.
(b) Powers of the Administrator. Subject to the provisions of the
Plan, and in the case of a Committee, subject to the specific duties delegated
by the Board to such Committee, the Administrator shall have the authority, in
its discretion:
(i) to determine the Fair Market Value of the Common Stock, in
accordance with Section 2(v) of the Plan;
(ii) to select the Service Providers to whom Awards may be
granted hereunder;
(iii) to determine whether and to what extent Awards or any
combination thereof, are granted hereunder;
(iv) to determine the number of shares of Common Stock or
equivalent units to be covered by each Award granted hereunder;
(v) to approve forms of agreement for use under the Plan;
(vi) to determine the terms and conditions, not inconsistent with
the terms of the Plan, of any award granted hereunder. Such terms and conditions
include, but are not limited to, the exercise price, the time or times when
Options or SARs may be exercised or other Awards vest (which may be based on
performance criteria), any vesting acceleration or waiver of forfeiture
restrictions, and any restriction or limitation regarding any Award or the
shares of Common Stock relating thereto, based in each case on such factors as
the Administrator, in its sole discretion, shall determine;
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(vii) to construe and interpret the terms of the Plan and Awards;
(viii) to prescribe, amend and rescind rules and regulations
relating to the Plan, including rules and regulations relating to sub-plans
established for the purpose of qualifying for preferred tax treatment under
foreign tax laws;
(ix) to modify or amend each Award (subject to Section 21(c) of
the Plan), including the discretionary authority to extend the post-termination
exercisability period of Options and SARs longer than is otherwise provided for
in the Plan;
(x) to authorize any person to execute on behalf of the Company
any instrument required to effect the grant of an Award previously granted by
the Administrator;
(xi) to allow Participants to satisfy withholding tax obligations
by electing to have the Company withhold from the Shares or cash to be issued
upon exercise or vesting of an Award (or distribution of a Deferred Stock Unit)
that number of Shares or cash having a Fair Market Value equal to the minimum
amount required to be withheld (but no more). The Fair Market Value of any
Shares to be withheld shall be determined on the date that the amount of tax to
be withheld is to be determined. All elections by a Participant to have Shares
or cash withheld for this purpose shall be made in such form and under such
conditions as the Administrator may deem necessary or advisable;
(xii) to determine whether Dividend Equivalents will be granted
in connection with another Award;
(xiii) to determine the terms and restrictions applicable to
Awards; and
(xiv) to make all other determinations deemed necessary or
advisable for administering the Plan.
(c) Effect of Administrator's Decision. The Administrator's
decisions, determinations and interpretations shall be final and binding on all
Participants and any other holders of Awards.
5. Eligibility. Restricted Stock, Restricted Stock Units, Performance
Shares, Performance Units, Stock Appreciation Rights, Deferred Stock Units,
Dividend Equivalents and Nonstatutory Stock Options may be granted to Service
Providers. Incentive Stock Options may be granted only to Employees.
6. No Employment Rights. Neither the Plan nor any Award shall confer upon
a Participant any right with respect to continuing the Participant's employment
with the Company or its Subsidiaries, nor shall they interfere in any way with
the Participant's right or the Company's or Subsidiary's right, as the case may
be, to terminate such employment at any time, with or without cause or notice.
7. Code Section 162(m) Provisions.
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(a) Option and SAR Annual Share Limit. No Participant shall be
granted, in any Fiscal Year, Options and Stock Appreciation Rights to purchase
more than 400,000 Shares; provided, however, that such limit shall be 1,200,000
Shares in the Participant's first Fiscal Year of Company service.
(b) Restricted Stock, Restricted Stock Units and Performance Share
Annual Limit. No Participant shall be granted, in any Fiscal Year, more than
200,000 Shares of Restricted Stock, Restricted Stock Units or Performance Shares
(which may include related Dividend Equivalent grants); provided, however, that
such limit shall be 600,000 Shares in the Participant's first Fiscal Year of
Company service.
(c) Performance Units Annual Limit. No Participant shall receive
Performance Units, in any Fiscal Year, having an initial value greater than
$1,000,000, provided, however, that such limit shall be $3,000,000 in the
Participant's first Fiscal Year of Company service.
(d) Section 162(m) Performance Restrictions. For purposes of
qualifying grants of Restricted Stock, Restricted Stock Units, Performance
Shares or Performance Units as "performance-based compensation" under Section
162(m) of the Code, the Administrator, in its discretion, may set restrictions
based upon the achievement of Performance Goals. The Performance Goals shall be
set by the Administrator on or before the latest date permissible to enable the
Restricted Stock, Restricted Stock Units, Performance Shares or Performance
Units to qualify as "performance-based compensation" under Section 162(m) of the
Code. In granting Restricted Stock, Restricted Stock Units, Performance Shares
or Performance Units which are intended to qualify under Section 162(m) of the
Code, the Administrator shall follow any procedures determined by it from time
to time to be necessary or appropriate to ensure qualification of the Award
under Section 162(m) of the Code (e.g., in determining the Performance Goals).
(e) Changes in Capitalization. The numerical limitations in Sections
7(a) and (b) shall be adjusted proportionately in connection with any change in
the Company's capitalization as described in Section 19(a).
8. Term of Plan. The Plan shall continue in effect for a term of ten (10)
years following the date upon which the Board approved the Plan in 2005.
9. Stock Options.
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(a) Term . The term of each Option shall be stated in the Notice of
Grant; provided, however, that the term shall be ten (10) years from the date of
grant or such shorter term as may be provided in the Notice of Grant. Moreover,
in the case of an Incentive Stock Option granted to a Participant who, at the
time the Incentive Stock Option is granted, owns stock representing more than
ten percent (10%) of the voting power of all classes of stock of the Company or
any Parent or Subsidiary, the term of the Incentive Stock Option shall be five
(5) years from the date of grant or such shorter term as may be provided in the
Notice of Grant.
(b) Option Exercise Price. The per share exercise price for the
Shares to be issued pursuant to exercise of an Option shall be determined by the
Administrator and shall be no less than 100% of the Fair Market Value per share
on the date of grant; provided, however, that in the case of an Incentive Stock
Option granted to an Employee who, at the time the Incentive Stock Option is
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granted, owns stock representing more than ten percent (10%) of the voting power
of all classes of stock of the Company or any Parent or Subsidiary, the per
Share exercise price shall be no less than 110% of the Fair Market Value per
Share on the date of grant.
(c) No Repricing. The exercise price for an Option may not be reduced
without the consent of the Company's stockholders. This shall include, without
limitation, a repricing of the Option as well as an Option exchange program
whereby the Participant agrees to cancel an existing Option in exchange for an
Option, SAR or other Award.
(d) Waiting Period and Exercise Dates. At the time an Option is
granted, the Administrator shall fix the period within which the Option may be
exercised and shall determine any conditions which must be satisfied before the
Option may be exercised. In so doing, the Administrator may specify that an
Option may not be exercised until the completion of a service period or until
performance milestones are satisfied.
(e) Form of Consideration. The Administrator shall determine the
acceptable form of consideration for exercising an Option, including the method
of payment. In the case of an Incentive Stock Option, the Administrator shall
determine the acceptable form of consideration at the time of grant. Subject to
Applicable Laws, such consideration may consist entirely of:
(i) cash;
(ii) check;
(iii) other Shares which (A) in the case of Shares acquired upon
exercise of an option, have been owned by the Participant for more than six
months on the date of surrender, and (B) have a Fair Market Value on the date of
surrender equal to the aggregate exercise price of the Shares as to which said
Option shall be exercised;
(iv) delivery of a properly executed exercise notice together
with such other documentation as the Administrator and the broker, if
applicable, shall require to effect an exercise of the Option and delivery to
the Company of the sale proceeds required to pay the exercise price;
(v) any combination of the foregoing methods of payment; or
(vi) such other consideration and method of payment for the
issuance of Shares to the extent permitted by Applicable Laws.
(f) Exercise of Option; Rights as a Stockholder. Any Option granted
hereunder shall be exercisable according to the terms of the Plan and at such
times and under such conditions as determined by the Administrator and set forth
in the Option Agreement.
An Option may not be exercised for a fraction of a Share.
An Option shall be deemed exercised when the Company receives: (i) written
or electronic notice of exercise (in accordance with the Option Agreement) from
the person entitled to exercise the Option, and (ii) full payment for the Shares
with respect to which the Option is exercised. Full payment may consist of any
consideration and method of payment authorized by the Administrator and
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permitted by the Option Agreement and the Plan. Shares issued upon exercise of
an Option shall be issued in the name of the Participant. Until the stock
certificate evidencing such Shares is issued (as evidenced by the appropriate
entry on the books of the Company or of a duly authorized transfer agent of the
Company), no right to vote or receive dividends or any other rights as a
stockholder shall exist with respect to the optioned stock, notwithstanding the
exercise of the Option. The Company shall issue (or cause to be issued) such
stock certificate promptly after the Option is exercised. No adjustment will be
made for a dividend or other right for which the record date is prior to the
date the stock certificate is issued, except as provided in Section 19 of the
Plan.
Exercising an Option in any manner shall decrease the number of Shares
thereafter available for sale under the Option, by the number of Shares as to
which the Option is exercised.
(g) Termination of Relationship as a Service Provider. If a
Participant ceases to be a Service Provider, other than upon the Participant's
death or Disability, the Participant may exercise his or her Option within such
period of time as is specified in the Option Agreement to the extent that the
Option is vested on the date of termination (but in no event later than the
expiration of the term of such Option as set forth in the Option Agreement). In
the absence of a specified time in the Option Agreement, the Option shall remain
exercisable for three months following the Participant's termination. If, on the
date of termination, the Participant is not vested as to his or her entire
Option, the Shares covered by the unvested portion of the Option shall revert to
the Plan. If, after termination, the Participant does not exercise his or her
Option within the time specified by the Administrator, the Option shall
terminate, and the Shares covered by such Option shall revert to the Plan.
(h) Disability. If a Participant ceases to be a Service Provider as a
result of the Participant's Disability, the Participant may exercise his or her
Option within such period of time as is specified in the Option Agreement to the
extent the Option is vested on the date of termination (but in no event later
than the expiration of the term of such Option as set forth in the Option
Agreement). In the absence of a specified time in the Option Agreement, the
Option shall remain exercisable for twelve (12) months following the
Participant's termination. If, on the date of termination, the Participant is
not vested as to his or her entire Option, the Shares covered by the unvested
portion of the Option shall revert to the Plan. If, after termination, the
Participant does not exercise his or her Option within the time specified
herein, the Option shall terminate, and the Shares covered by such Option shall
revert to the Plan.
(i) Death of Participant. If a Participant dies while a Service
Provider, the Option may be exercised following the Participant's death within
such period of time as is specified in the Option Agreement (but in no event may
the option be exercised later than the expiration of the term of such Option as
set forth in the Option Agreement), by the Participant's designated beneficiary,
provided such beneficiary has been designated prior to Participant's death in a
form acceptable to the Administrator. If no such beneficiary has been designated
by the Participant, then such Option may be exercised by the personal
representative of the Participant's estate or by the person(s) to whom the
Option is transferred pursuant to the Participant's will or in accordance with
the laws of descent and distribution. In the absence of a specified time in the
Option Agreement, the Option shall remain exercisable for twelve (12) months
following Participant's death. If the Option is not so exercised within the time
specified herein, the Option shall terminate, and the Shares covered by such
Option shall revert to the Plan.
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(j) ISO $100,000 Rule. Each Option shall be designated in the Notice
of Grant as either an Incentive Stock Option or a Nonstatutory Stock Option.
However, notwithstanding such designations, to the extent that the aggregate
Fair Market Value:
(i) of Shares subject to a Participant's Incentive Stock Options
granted by the Company, any Parent or Subsidiary, which
(ii) become exercisable for the first time during any calendar
year (under all plans of the Company or any Parent or Subsidiary) exceeds
$100,000, such excess Options shall be treated as Nonstatutory Stock Options.
For purposes of this Section 9(j), Incentive Stock Options shall be taken into
account in the order in which they were granted, and the Fair Market Value of
the Shares shall be determined as of the time of grant.
10. Stock Appreciation Rights.
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(a) Grant of SARs. Subject to the terms and conditions of the Plan,
SARs may be granted to Participants at any time and from time to time as shall
be determined by the Administrator, in its sole discretion. The Administrator
shall have complete discretion to determine the number of SARs granted to any
Participant.
(b) Exercise Price and other Terms. The per share exercise price for
the Shares to be issued pursuant to exercise of an SAR shall be determined by
the Administrator and shall be no less than 100% of the Fair Market Value per
share on the date of grant. Otherwise, subject to Section 7(a) of the Plan, the
Administrator, subject to the provisions of the Plan, shall have complete
discretion to determine the terms and conditions of SARs granted under the Plan;
provided, however, that no SAR may have a term of more than ten (10) years from
the date of grant.
(c) No Repricing. The exercise price for the Shares or cash to be
issued pursuant to an already granted SAR may not be changed without the consent
of the Company's stockholders. This shall include, without limitation, a
repricing of the SAR as well as an SAR exchange program whereby the Participant
agrees to cancel an existing SAR in exchange for an Option, SAR or other Award.
(d) Payment of SAR Amount. Upon exercise of a SAR, a Participant
shall be entitled to receive payment from the Company in an amount determined by
multiplying:
(i) The difference between the Fair Market Value of a Share on
the date of exercise over the exercise price; times
(ii) The number of Shares with respect to which the SAR is
exercised.
(e) Payment upon Exercise of SAR. At the discretion of the
Administrator, and as specified in the Award Agreement, payment for a SAR may be
in cash, Shares or a combination thereof.
(f) SAR Agreement. Each SAR grant shall be evidenced by an Award
Agreement that shall specify the exercise price, the term of the SAR, the
conditions of exercise, whether it may be settled in cash, Shares or a
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combination thereof, and such other terms and conditions as the Administrator,
in its sole discretion, shall determine.
(g) Expiration of SARs. A SAR granted under the Plan shall expire
upon the date determined by the Administrator, in its sole discretion, and set
forth in the Award Agreement.
(h) Termination of Relationship as a Service Provider. If a
Participant ceases to be a Service Provider, other than upon the Participant's
death or Disability termination, the Participant may exercise his or her SAR
within such period of time as is specified in the SAR Agreement to the extent
that the SAR is vested on the date of termination (but in no event later than
the expiration of the term of such SAR as set forth in the SAR Agreement). In
the absence of a specified time in the SAR Agreement, the SAR shall remain
exercisable for three months following the Participant's termination. If, on the
date of termination, the Participant is not vested as to his or her entire SAR,
the Shares covered by the unvested portion of the SAR shall revert to the Plan.
If, after termination, the Participant does not exercise his or her SAR within
the time specified by the Administrator, the SAR shall terminate, and the Shares
covered by such SAR shall revert to the Plan.
(i) Disability. If a Participant ceases to be a Service Provider as a
result of the Participant's Disability, the Participant may exercise his or her
SAR within such period of time as is specified in the SAR Agreement to the
extent the SAR is vested on the date of termination (but in no event later than
the expiration of the term of such SAR as set forth in the SAR Agreement). In
the absence of a specified time in the SAR Agreement, the SAR shall remain
exercisable for twelve (12) months following the Participant's termination. If,
on the date of termination, the Participant is not vested as to his or her
entire SAR, the Shares covered by the unvested portion of the SAR shall revert
to the Plan. If, after termination, the Participant does not exercise his or her
SAR within the time specified herein, the SAR shall terminate, and the Shares
covered by such SAR shall revert to the Plan.
(j) Death of Participant. If a Participant dies while a Service
Provider, the SAR may be exercised following the Participant's death within such
period of time as is specified in the SAR Agreement (but in no event may the SAR
be exercised later than the expiration of the term of such SAR as set forth in
the SAR Agreement), by the Participant's designated beneficiary, provided such
beneficiary has been designated prior to Participant's death in a form
acceptable to the Administrator. If no such beneficiary has been designated by
the Participant, then such SAR may be exercised by the personal representative
of the Participant's estate or by the person(s) to whom the SAR is transferred
pursuant to the Participant's will or in accordance with the laws of descent and
distribution. In the absence of a specified time in the SAR Agreement, the SAR
shall remain exercisable for twelve (12) months following Participant's death.
If the SAR is not so exercised within the time specified herein, the SAR shall
terminate, and the Shares covered by such SAR shall revert to the Plan.
11. Restricted Stock.
-----------------
(a) Grant of Restricted Stock. Subject to the terms and conditions of
the Plan, Restricted Stock may be granted to Participants at any time as shall
be determined by the Administrator, in its sole discretion. Subject to Section
7(b) hereof, the Administrator shall have complete discretion to determine (i)
the number of Shares subject to a Restricted Stock award granted to any
-13-
Participant, and (ii) the conditions that must be satisfied, which typically
will be based principally or solely on continued services but may include a
performance-based component, upon which is conditioned the grant, vesting or
issuance of Restricted Stock.
(b) Other Terms. The Administrator, subject to the provisions of the
Plan, shall have complete discretion to determine the terms and conditions of
Restricted Stock granted under the Plan. Restricted Stock grants shall be
subject to the terms, conditions, and restrictions determined by the
Administrator at the time the stock or the restricted stock unit is awarded. The
Administrator may require the recipient to sign a Restricted Stock Award
agreement as a condition of the award. Any certificates representing the Shares
of stock awarded shall bear such legends as shall be determined by the
Administrator.
(c) Restricted Stock Award Agreement. Each Restricted Stock grant
shall be evidenced by an agreement that shall specify the purchase price (if
any) and such other terms and conditions as the Administrator, in its sole
discretion, shall determine; provided; however, that if the Restricted Stock
grant has a purchase price, such purchase price must be paid no more than ten
(10) years following the date of grant.
12. Restricted Stock Units.
-----------------------
(a) Grant. Restricted Stock Units may be granted at any time and from
time to time as determined by the Administrator. Subject to Section 7(b) hereof,
the Administrator shall have complete discretion to determine (i) the number of
Shares subject to a Restricted Stock Unit award granted to any Participant, and
(ii) the conditions that must be satisfied, which typically will be based
principally or solely on continued service but may include a performance-based
component, upon which is conditioned the grant or vesting of Restricted Stock
Units. Restricted Stock Units shall be granted in the form of units to acquire
Shares. Each such unit shall be the equivalent of one Share for purposes of
determining the number of Shares subject to an Award. Until the Shares are
issued, no right to vote or receive dividends or any other rights as a
stockholder shall exist with respect to the units to acquire Shares.
(b) Vesting Criteria and Other Terms. The Administrator shall set
vesting criteria in its discretion, which, depending on the extent to which the
criteria are met, will determine the number of Restricted Stock Units that will
be paid out to the Participant. The Administrator may set vesting criteria based
upon the achievement of Company-wide, business unit, or individual goals
(including, but not limited to, continued employment), or any other basis
determined by the Administrator in its discretion.
(c) Earning Restricted Stock Units. Upon meeting the applicable
vesting criteria, the Participant shall be entitled to receive a payout as
specified in the Restricted Stock Unit Award Agreement. Notwithstanding the
foregoing, at any time after the grant of Restricted Stock Units, the
Administrator, in its sole discretion, may reduce or waive any vesting criteria
that must be met to receive a payout.
(d) Form and Timing of Payment. Payment of earned Restricted Stock
Units shall be made as soon as practicable after the date(s) set forth in the
Restricted Stock Unit Award Agreement. The Administrator shall pay earned
Restricted Stock Units in Shares.
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(e) Cancellation. On the date set forth in the Restricted Stock Unit
Award Agreement, all unearned Restricted Stock Units shall be forfeited to the
Company.
13. Performance Shares.
-------------------
(a) Grant of Performance Shares. Subject to the terms and conditions
of the Plan, Performance Shares may be granted to Participants at any time as
shall be determined by the Administrator, in its sole discretion. Subject to
Section 7(b) hereof, the Administrator shall have complete discretion to
determine (i) the number of Shares subject to a Performance Share award granted
to any Participant, and (ii) the conditions that must be satisfied, which
typically will be based principally or solely on achievement of performance
milestones but may include a service-based component, upon which is conditioned
the grant or vesting of Performance Shares. Performance Shares shall be granted
in the form of units to acquire Shares. Each such unit shall be the equivalent
of one Share for purposes of determining the number of Shares subject to an
Award. Until the Shares are issued, no right to vote or receive dividends or any
other rights as a stockholder shall exist with respect to the units to acquire
Shares.
(b) Other Terms. The Administrator, subject to the provisions of the
Plan, shall have complete discretion to determine the terms and conditions of
Performance Shares granted under the Plan. Performance Share grants shall be
subject to the terms, conditions, and restrictions determined by the
Administrator at the time the stock is awarded, which may include such
performance-based milestones as are determined appropriate by the Administrator.
The Administrator may require the recipient to sign a Performance Shares
agreement as a condition of the award. Any certificates representing the Shares
of stock awarded shall bear such legends as shall be determined by the
Administrator.
(c) Performance Share Award Agreement. Each Performance Share grant
shall be evidenced by an agreement that shall specify such other terms and
conditions as the Administrator, in its sole discretion, shall determine.
14. Performance Units.
------------------
(a) Grant of Performance Units. Performance Units are similar to
Performance Shares, except that they shall be settled in a cash equivalent to
the Fair Market Value of the underlying Shares, determined as of the vesting
date. Subject to the terms and conditions of the Plan, Performance Units may be
granted to Participants at any time and from time to time as shall be determined
by the Administrator, in its sole discretion. The Administrator shall have
complete discretion to determine the conditions that must be satisfied, which
typically will be based principally or solely on achievement of performance
milestones but may include a service-based component, upon which is conditioned
the grant or vesting of Performance Units. Performance Units shall be granted in
the form of units to acquire Shares. Each such unit shall be the cash equivalent
of one Share of Common Stock. No right to vote or receive dividends or any other
rights as a stockholder shall exist with respect to Performance Units or the
cash payable thereunder.
(b) Number of Performance Units. Subject to Section 7(c) hereof, the
Administrator will have complete discretion in determining the number of
Performance Units granted to any Participant.
-15-
(c) Other Terms. The Administrator, subject to the provisions of the
Plan, shall have complete discretion to determine the terms and conditions of
Performance Units granted under the Plan. Performance Unit grants shall be
subject to the terms, conditions, and restrictions determined by the
Administrator at the time the grant is awarded, which may include such
performance-based milestones as are determined appropriate by the Administrator.
The Administrator may require the recipient to sign a Performance Unit agreement
as a condition of the award. Any certificates representing the units awarded
shall bear such legends as shall be determined by the Administrator.
(d) Performance Unit Award Agreement. Each Performance Unit grant
shall be evidenced by an agreement that shall specify such terms and conditions
as the Administrator, in its sole discretion, shall determine.
15. Deferred Stock Units.
---------------------
(a) Description. Deferred Stock Units shall consist of a Restricted
Stock, Restricted Stock Unit, Performance Share or Performance Unit Award that
the Administrator, in its sole discretion permits to be paid out in installments
or on a deferred basis, in accordance with rules and procedures established by
the Administrator. Deferred Stock Units shall remain subject to the claims of
the Company's general creditors until distributed to the Participant.
(b) 162(m) Limits. Deferred Stock Units shall be subject to the
annual 162(m) limits applicable to the underlying Restricted Stock, Restricted
Stock Unit, Performance Share or Performance Unit Award as set forth in Section
7 hereof.
16. Leaves of Absence. Unless the Administrator provides otherwise or
except as otherwise required by Applicable Laws, vesting of Awards granted
hereunder shall cease commencing on the first day of any unpaid leave of absence
and shall only recommence upon return to active service.
17. Part-Time Service. Unless the Administrator provides otherwise or
except as otherwise required by Applicable Laws, any service-based vesting of
Awards granted hereunder shall be extended on a proportionate basis in the event
an Employee transitions to a work schedule under which they are customarily
scheduled to work on less than a full-time basis, or if not on a full-time work
schedule, to a schedule requiring fewer hours of service. Such vesting shall be
proportionately re-adjusted prospectively in the event that the Employee
subsequently becomes regularly scheduled to work additional hours of service.
18. Non-Transferability of Awards. Unless determined otherwise by the
Administrator, an Award may not be sold, pledged, assigned, hypothecated,
transferred, or disposed of in any manner other than by will or by the laws of
descent or distribution and may be exercised, during the lifetime of the
recipient, only by the recipient. If the Administrator makes an Award
transferable, such Award shall contain such additional terms and conditions as
the Administrator deems appropriate. Notwithstanding any action by the
Administrator to make an Award transferable, no transfer for value or
consideration shall be made without the prior approval of the Company's
stockholders.
-16-
19. Adjustments Upon Changes in Capitalization, Dissolution or Liquidation
or Change of Control.
(a) Changes in Capitalization. Subject to any required action by the
stockholders of the Company, the number of shares of Common Stock covered by
each outstanding Award, the number of shares of Common Stock which have been
authorized for issuance under the Plan but as to which no Awards have yet been
granted or which have been returned to the Plan upon cancellation or expiration
of an Award, as well as the price per share of Common Stock covered by each such
outstanding Award and the 162(m) fiscal year share issuance limits under
Sections 7(a) and (b) hereof shall be proportionately adjusted for any increase
or decrease in the number of issued shares of Common Stock resulting from a
stock split, reverse stock split, stock dividend, combination or
reclassification of the Common Stock, or any other increase or decrease in the
number of issued shares of Common Stock effected without receipt of
consideration by the Company; provided, however, that conversion of any
convertible securities of the Company shall not be deemed to have been "effected
without receipt of consideration." Such adjustment shall be made by the
Compensation Committee, whose determination in that respect shall be final,
binding and conclusive. Except as expressly provided herein, no issuance by the
Company of shares of stock of any class, or securities convertible into shares
of stock of any class, shall affect, and no adjustment by reason thereof shall
be made with respect to, the number or price of shares of Common Stock subject
to an Award.
(b) Dissolution or Liquidation. In the event of the proposed
dissolution or liquidation of the Company, the Administrator shall notify each
Participant as soon as practicable prior to the effective date of such proposed
transaction. The Administrator in its discretion may provide for a Participant
to have the right to exercise his or her Option or SAR until ten (10) days prior
to such transaction as to all of the Awarded Stock covered thereby, including
Shares as to which the Award would not otherwise be exercisable. In addition,
the Administrator may provide that any Company repurchase option or forfeiture
rights applicable to any Award shall lapse 100%, and that any Award vesting
shall accelerate 100%, provided the proposed dissolution or liquidation takes
place at the time and in the manner contemplated. To the extent it has not been
previously exercised (with respect to Options and SARs) or vested (with respect
to other Awards), an Award will terminate immediately prior to the consummation
of such proposed action.
(c) Change of Control.
(i) Stock Options and SARs. In the event of a Change of Control,
each outstanding Option and SAR shall be assumed or an equivalent option or SAR
substituted by the successor corporation or a Parent or Subsidiary of the
successor corporation. In the event that the successor corporation refuses to
assume or substitute for the Option or SAR, the Participant shall fully vest in
and have the right to exercise the Option or SAR as to all of the Awarded Stock,
including Shares as to which it would not otherwise be vested or exercisable. If
an Option or SAR becomes fully vested and exercisable in lieu of assumption or
substitution in the event of a Change of Control, the Administrator shall notify
the Participant in writing or electronically that the Option or SAR shall be
fully vested and exercisable for a period of fifteen (15) days from the date of
such notice, and the Option or SAR shall terminate upon the expiration of such
period. For the purposes of this paragraph, the Option or SAR shall be
considered assumed if, following the Change of Control, the option or stock
appreciation right confers the right to purchase or receive, for each Share of
Awarded Stock subject to the Option or SAR immediately prior to the Change of
-17-
Control, the consideration (whether stock, cash, or other securities or
property) received in the Change of Control by holders of Common Stock for each
Share held on the effective date of the transaction (and if holders were offered
a choice of consideration, the type of consideration chosen by the holders of a
majority of the outstanding Shares); provided, however, that if such
consideration received in the Change of Control is not solely common stock of
the successor corporation or its Parent, the Administrator may, with the consent
of the successor corporation, provide for the consideration to be received upon
the exercise of the Option or SAR, for each Share of Awarded Stock subject to
the Option or SAR, to be solely common stock of the successor corporation or its
Parent equal in fair market value to the per share consideration received by
holders of Common Stock in the Change of Control.
(ii) Restricted Stock, Restricted Stock Units, Performance
Shares, Performance Units, Dividend Equivalents and Deferred Stock Units. In the
event of a Change of Control, each outstanding Restricted Stock, Restricted
Stock Unit, Performance Share, Performance Unit, Dividend Equivalent and
Deferred Stock Unit award (and any related Dividend Equivalent) shall be assumed
or an equivalent Restricted Stock, Restricted Stock Unit, Performance Share,
Performance Unit, Dividend Equivalent and Deferred Stock Unit award substituted
by the successor corporation or a Parent or Subsidiary of the successor
corporation. In the event that the successor corporation refuses to assume or
substitute for the Restricted Stock, Restricted Stock Unit, Performance Share,
Performance Unit, Dividend Equivalent or Deferred Stock Unit award, the
Participant shall fully vest in the Restricted Stock, Restricted Stock Unit,
Performance Share, Performance Unit, Dividend Equivalent or Deferred Stock Unit
including as to Shares (or with respect to Performance Units and Dividend
Equivalents, the cash equivalent thereof) which would not otherwise be vested.
For the purposes of this paragraph, a Restricted Stock, Restricted Stock Units,
Performance Share, Performance Unit, Dividend Equivalent and Deferred Stock Unit
award shall be considered assumed if, following the Change of Control, the award
confers the right to purchase or receive, for each Share (or with respect to
Performance Units and Dividend Equivalents, the cash equivalent thereof) subject
to the Award immediately prior to the Change of Control, the consideration
(whether stock, cash, or other securities or property) received in the Change of
Control by holders of Common Stock for each Share held on the effective date of
the transaction (and if holders were offered a choice of consideration, the type
of consideration chosen by the holders of a majority of the outstanding Shares);
provided, however, that if such consideration received in the Change of Control
is not solely common stock of the successor corporation or its Parent, the
Administrator may, with the consent of the successor corporation, provide for
the consideration to be received, for each Share and each unit/right to acquire
a Share subject to the Award, to be solely common stock of the successor
corporation or its Parent equal in fair market value to the per share
consideration received by holders of Common Stock in the Change of Control.
20. Date of Grant. The date of grant of an Award shall be, for all
purposes, the date on which the Administrator makes the determination granting
such Award, or such other later date as is determined by the Administrator.
Notice of the determination shall be provided to each Participant within a
reasonable time after the date of such grant.
-18-
21. Amendment and Termination of the Plan.
(a) Amendment and Termination. The Board may at any time amend,
alter, suspend or terminate the Plan; provided, however, that the Board may not
materially amend the Stock Plan without obtaining stockholder approval.
(b) Stockholder Approval. The Company shall obtain stockholder
approval of any Plan amendment to the extent necessary and desirable to comply
with Section 422 of the Code (or any successor rule or statute or other
applicable law, rule or regulation, including the requirements of any exchange
or quotation system on which the Common Stock is listed or quoted). Such
stockholder approval, if required, shall be obtained in such a manner and to
such a degree as is required by the applicable law, rule or regulation.
(c) Effect of Amendment or Termination. No amendment, alteration,
suspension or termination of the Plan shall impair the rights of any
Participant, unless mutually agreed otherwise between the Participant and the
Administrator, which agreement must be in writing (or electronic format) and
signed by the Participant and the Company.
22. Conditions Upon Issuance of Shares.
(a) Legal Compliance. Shares shall not be issued pursuant to the
exercise of an Award unless the exercise of the Award or the issuance and
delivery of such Shares (or with respect to Performance Units and Dividend
Equivalents, the cash equivalent thereof) shall comply with Applicable Laws and
shall be further subject to the approval of counsel for the Company with respect
to such compliance.
(b) Investment Representations. As a condition to the exercise or
receipt of an Award, the Company may require the person exercising or receiving
such Award to represent and warrant at the time of any such exercise or receipt
that the Shares are being purchased only for investment and without any present
intention to sell or distribute such Shares if, in the opinion of counsel for
the Company, such a representation is required.
23. Liability of Company.
(a) Inability to Obtain Authority. The inability of the Company to
obtain authority from any regulatory body having jurisdiction, which authority
is deemed by the Company's counsel to be necessary to the lawful issuance and
sale of any Shares hereunder, shall relieve the Company of any liability in
respect of the failure to issue or sell such Shares as to which such requisite
authority shall not have been obtained.
(b) Grants Exceeding Allotted Shares. If the Awarded Stock covered by
an Award exceeds, as of the date of grant, the number of Shares which may be
issued under the Plan without additional stockholder approval, such Award shall
be void with respect to such excess Awarded Stock, unless stockholder approval
of an amendment sufficiently increasing the number of Shares subject to the Plan
is timely obtained in accordance with Section 21(b) of the Plan.
-19-
24. Reservation of Shares. The Company, during the term of this Plan, will
at all times reserve and keep available such number of Shares as shall be
sufficient to satisfy the requirements of the Plan.
-20-
AVOCENT CORPORATION
2005 EQUITY INCENTIVE PLAN
STOCK OPTION AWARD AGREEMENT
Unless otherwise defined herein, the terms defined in the Avocent
Corporation 2005 Equity Incentive Plan (the "Plan") will have the same defined
meanings in this Award Agreement.
1. NOTICE OF STOCK OPTION GRANT
Name:
-----------------------------------------------
Address:
--------------------------------------------
You have been granted an option to purchase Common Stock of the
Company, subject to the terms and conditions of the Plan and this
Award Agreement, as follows:
Grant Number
---------------------------
Date of Grant
---------------------------
Vesting Commencement Date
---------------------------
Exercise Price per Share $
---------------------------
Total Number of Shares Granted
---------------------------
Total Exercise Price $
---------------------------
Type of Option: Incentive Stock Option
------
Nonstatutory Stock Option
------
Term/Expiration Date:
---------------------------
Vesting Schedule:
-----------------
Subject to accelerated vesting as set forth below or in the Plan, this
Option may be exercised, in whole or in part, in accordance with the following
schedule:
[____% of the Shares subject to the Option will vest _________ months after
the Vesting Commencement Date, and ______ of the Shares subject to the Option
will vest as follows _______________, subject to Participant continuing to be a
Service Provider through each such date.]
Termination Period:
-------------------
This Option shall be exercisable for three (3) months after Participant
ceases to be a Service Provider, unless such termination is due to Participant's
death or Disability. If Participant ceases to be a Service Provider due to
Participant's death or Disability, this Option shall be exercisable for one (1)
year after Participant ceases to be Service Provider. Notwithstanding the
foregoing, in no event may this Option be exercised after the Term/Expiration
Date as provided above and may be subject to earlier termination as provided in
Section 19(c) of the Plan.
2. AGREEMENT
(a) Grant of Option.
The Administrator hereby grants to individual named in the Notice
of Grant attached as Part I of this Agreement (the "Participant") an option (the
"Option") to purchase the number of Shares, as set forth in the Notice of Grant,
at the exercise price per share set forth in the Notice of Grant (the "Exercise
Price"), subject to the terms and conditions of the Plan, which is incorporated
herein by reference. Subject to Section 19(c) of the Plan, in the event of a
conflict between the terms and conditions of the Plan and the terms and
conditions of this Award Agreement, the terms and conditions of the Plan will
prevail.
If designated in the Notice of Grant as an Incentive Stock Option
("ISO"), this Option is intended to qualify as an Incentive Stock Option under
Section 422 of the Code. However, if this Option is intended to be an Incentive
Stock Option, to the extent that it exceeds the $100,000 rule of Code Section
422(d) it will be treated as a Nonstatutory Stock Option ("NSO").
(b) Exercise of Option.
(i) Right to Exercise. This Option is exercisable during its
term in accordance with the Vesting Schedule set out in the Notice of Grant and
the applicable provisions of the Plan and this Award Agreement.
(ii) Method of Exercise. This Option is exercisable by delivery
of an exercise notice, in the form attached as Exhibit A (the "Exercise
Notice"), which will state the election to exercise the Option, the number of
Shares in respect of which the Option is being exercised (the "Exercised
Shares"), and such other representations and agreements as may be required by
the Company pursuant to the provisions of the Plan. The Exercise Notice will be
completed by Participant and delivered to the Company. The Exercise Notice will
be accompanied by payment of the aggregate Exercise Price as to all Exercised
Shares together with any applicable withholding taxes. This Option will be
deemed to be exercised upon receipt by the Company of such fully executed
Exercise Notice accompanied by such aggregate Exercise Price.
No Shares will be issued pursuant to the exercise of this Option
unless such issuance and exercise comply with Applicable Laws. Assuming such
compliance, for income tax purposes the Exercised Shares will be considered
transferred to Participant on the date the Option is exercised with respect to
such Exercised Shares.
-2-
(c) Method of Payment.
Payment of the aggregate Exercise Price will be by any of the
following, or a combination thereof, at the election of Participant:
(i) cash;
(ii) check;
(iii) other Shares which (A) in the case of Shares acquired upon
exercise of an option, have been owned by the Participant for more than six
months on the date of surrender, and (B) have a Fair Market Value on the date of
surrender equal to the aggregate exercise price of the Shares as to which said
Option shall be exercised
(iv) delivery of a properly executed exercise notice together
with such other documentation as the Administrator and the broker, if
applicable, shall require to effect an exercise of the Option and delivery to
the Company of the sale proceeds required to pay the exercise price;
(v) any combination of the foregoing methods of payment; or
(vi) such other consideration and method of payment for the
issuance of Shares to the extent permitted by Applicable Laws.
(d) Non-Transferability of Option.
This Option may not be transferred in any manner otherwise than
by will or by the laws of descent or distribution and may be exercised during
the lifetime of Participant only by Participant. Notwithstanding the foregoing
sentence, if this Option has been classified as a Nonstatutory Stock Option,
Participant may, in a manner and in accordance with terms specified by the
Administrator, transfer this Option to Participant's spouse, former spouse or
dependent pursuant to a court-approved domestic relations order which relates to
the provision of child support, alimony payments or marital property rights. The
terms of the Plan and this Award Agreement will be binding upon the executors,
administrators, heirs, successors and assigns of Participant.
(e) Term of Option.
This Option may be exercised only within the term set out in the
Notice of Grant, and may be exercised during such term only in accordance with
the Plan and the terms of this Award Agreement.
(f) Tax Obligations.
(i) Withholding Taxes. Participant agrees to make appropriate
arrangements with the Company (or the Parent or Subsidiary employing or
retaining Participant) for the satisfaction of all Federal, state, and local
income and employment tax withholding requirements applicable to the Option
exercise. Participant acknowledges and agrees that the Company may refuse to
honor the exercise and refuse to deliver Shares if such withholding amounts are
not delivered at the time of exercise
-3-
(ii) Notice of Disqualifying Disposition of ISO Shares. If the
Option granted to Participant herein is an ISO, and if Participant sells or
otherwise disposes of any of the Shares acquired pursuant to the ISO on or
before the later of (1) the date two years after the Grant Date, or (2) the date
one year after the date of exercise, Participant will immediately notify the
Company in writing of such disposition. Participant agrees that Participant may
be subject to income tax withholding by the Company on the compensation income
recognized by Participant.
(g) Entire Agreement; Governing Law.
The Plan is incorporated herein by reference. The Plan and this
Award Agreement constitute the entire agreement of the parties with respect to
the subject matter hereof and supersede in their entirety all prior undertakings
and agreements of the Company and Participant with respect to the subject matter
hereof, and may not be modified adversely to Participant's interest except by
means of a writing signed by the Company and Participant. This Award Agreement
is governed by the internal substantive laws, but not the choice of law rules,
of Alabama.
(h) NO GUARANTEE OF CONTINUED SERVICE.
PARTICIPANT ACKNOWLEDGES AND AGREES THAT THE VESTING OF SHARES
PURSUANT TO THE VESTING SCHEDULE HEREOF IS EARNED ONLY BY CONTINUING AS A
SERVICE PROVIDER AT THE WILL OF THE COMPANY (AND NOT THROUGH THE ACT OF BEING
HIRED, BEING GRANTED AN OPTION OR PURCHASING SHARES HEREUNDER). PARTICIPANT
FURTHER ACKNOWLEDGES AND AGREES THAT THIS AGREEMENT, THE TRANSACTIONS
CONTEMPLATED HEREUNDER AND THE VESTING SCHEDULE SET FORTH HEREIN DO NOT
CONSTITUTE AN EXPRESS OR IMPLIED PROMISE OF CONTINUED ENGAGEMENT AS A SERVICE
PROVIDER FOR THE VESTING PERIOD, FOR ANY PERIOD, OR AT ALL, AND WILL NOT
INTERFERE WITH PARTICIPANT'S RIGHT OR THE COMPANY'S RIGHT TO TERMINATE
PARTICIPANT'S RELATIONSHIP AS A SERVICE PROVIDER AT ANY TIME, WITH OR WITHOUT
CAUSE.
By Participant's signature and the signature of the Company's
representative below, Participant and the Company agree that this Option is
granted under and governed by the terms and conditions of the Plan and this
Award Agreement. Participant has reviewed the Plan and this Award Agreement in
their entirety, has had an opportunity to obtain the advice of counsel prior to
executing this Award Agreement and fully understands all provisions of the Plan
and Award Agreement. Participant hereby agrees to accept as binding, conclusive
and final all decisions or interpretations of the Administrator upon any
questions relating to the Plan and Award Agreement. Participant further agrees
to notify the Company upon any change in the residence address indicated below.
PARTICIPANT: AVOCENT CORPORATION
By:
- ------------------------------------ ----------------------------------
Signature
Title:
- ------------------------------------ -------------------------------
Print Name
Residence Address:
------------------
-4-
EXHIBIT A
AVOCENT CORPORATION
2005 EQUITY INCENTIVE PLAN
EXERCISE NOTICE
Avocent Corporation
[ADDRESS]
Attention:
-------------
1. Exercise of Option. Effective as of today, ________________, _____,
the undersigned ("Purchaser") hereby elects to purchase ______________ shares
(the "Shares") of the Common Stock of Avocent Corporation (the "Company") under
and pursuant to the 2005 Equity Incentive Plan (the "Plan") and the Award
Agreement dated ________ (the "Award Agreement"). The purchase price for the
Shares will be $_____________, as required by the Award Agreement.
2. Delivery of Payment. Purchaser herewith delivers to the Company the
full purchase price for the Shares and any required withholding taxes to be paid
in connection with the exercise of the Option.
3. Representations of Purchaser. Purchaser acknowledges that Purchaser
has received, read and understood the Plan and the Award Agreement and agrees to
abide by and be bound by their terms and conditions.
4. Rights as Stockholder. Until the issuance (as evidenced by the
appropriate entry on the books of the Company or of a duly authorized transfer
agent of the Company) of the Shares, no right to vote or receive dividends or
any other rights as a stockholder will exist with respect to the Optioned Stock,
notwithstanding the exercise of the Option. The Shares so acquired will be
issued to Participant as soon as practicable after exercise of the Option. No
adjustment will be made for a dividend or other right for which the record date
is prior to the date of issuance, except as provided in Section 19 of the Plan.
5. Tax Consultation. Purchaser understands that Purchaser may suffer
adverse tax consequences as a result of Purchaser's purchase or disposition of
the Shares. Purchaser represents that Purchaser has consulted with any tax
consultants Purchaser deems advisable in connection with the purchase or
disposition of the Shares and that Purchaser is not relying on the Company for
any tax advice.
6. Entire Agreement; Governing Law. The Plan and Award Agreement are
incorporated herein by reference. This Agreement, the Plan and the Award
Agreement constitute the entire agreement of the parties with respect to the
subject matter hereof and supersede in their entirety all prior undertakings and
agreements of the Company and Purchaser with respect to the subject matter
hereof, and may not be modified adversely to the Purchaser's interest except by
means of a writing signed by the Company and Purchaser. This agreement is
governed by the internal substantive laws, but not the choice of law rules, of
Alabama.
Submitted by: Accepted by:
PARTICIPANT: AVOCENT CORPORATION
By:
- ------------------------------------ ----------------------------------
Signature
Title:
- ------------------------------------ -------------------------------
Print Name
Residence Address: Date Received:
------------------ -----------------------
- ------------------------------------
-2-
AVOCENT CORPORATION
2005 EQUITY INCENTIVE PLAN
NOTICE OF GRANT
Unless otherwise defined herein, the terms defined in the Avocent
Corporation 2005 Equity Incentive Plan (the "Plan") shall have the same defined
meanings in this Notice of Grant.
You have been granted a Stock Appreciation Right subject to the terms and
conditions of the Plan and the attached Stock Appreciation Right Agreement (the
"Award Agreement"), as follows:
Grant Number
-----------------------------
Date of Grant
-----------------------------
Vesting Commencement Date
-----------------------------
Exercise Price per Share $
-----------------------------
Total Number of Shares Granted
-----------------------------
Expiration Date:
-----------------------------
Vesting Schedule:
-----------------
This Stock Appreciation Right shall vest, in whole or in part, in
accordance with the following schedule:
[____% of the Shares subject to the Stock Appreciation Right will vest
_________ months after the Vesting Commencement Date, and ______ of the Shares
subject to the Stock Appreciation Right will vest as follows _______________,
subject to Participant continuing to be a Service Provider through each such
date.
Termination Period:
-------------------
This Stock Appreciation Right shall be exercisable for three (3) months
after Participant ceases to be a Service Provider, unless such termination is
due to Participant's death or Disability. If Participant ceases to be a Service
Provider due to Participant's death or Disability, this Stock Appreciation Right
shall be exercisable for one (1) year after Participant ceases to be Service
Provider. Notwithstanding the foregoing, in no event may this Stock Appreciation
Right be exercised after the Term/Expiration Date as provided above and may be
subject to earlier termination as provided in Section 19(c) of the Plan.
The Stock Appreciation Right evidenced by this Notice of Grant is part of
and subject in all respects to the terms and conditions of the attached Award
Agreement, the terms of which are hereby incorporated herein by reference as if
set forth herein in full, and the Plan (a copy of which has been made available
to you by the Company).
AVOCENT CORPORATION
2005 EQUITY INCENTIVE PLAN
STOCK APPRECIATION RIGHT AGREEMENT
1. Grant of Stock Appreciation Right. The Administrator hereby grants to
the Participant (the "Participant") named in the Notice of Grant attached to
(and part of) this Stock Appreciation Right Agreement, a Stock Appreciation
Right (the "Stock Appreciation Right") to purchase the number of Shares as set
forth in the Notice of Grant, at the exercise price per share set forth in the
Notice of Grant (the "Exercise Price"), subject to the terms and conditions of
the Avocent Corporation 2005 Equity Incentive Plan (the "Plan") which is
incorporated herein by reference (the Plan and the Notice of Grant together with
this Stock Appreciation Right Agreement are herein referred to as the "Award
Agreement" or the "Stock Appreciation Right Agreement"). Subject to Section
19(c) of the Plan, in the event of a conflict between the terms and conditions
of the Plan and the terms and conditions of this Award Agreement, the terms and
conditions of the Plan shall prevail. Unless otherwise defined herein, the terms
defined in the Plan shall have the same defined meanings in this Award
Agreement.
2. Exercise of Stock Appreciation Right. This Stock Appreciation Right is
exercisable by delivery of an exercise notice, in the form attached as Exhibit A
(the "Exercise Notice") or such other form or manner as the Administrator may
determine, which shall state the election to exercise the Stock Appreciation
Right and the number of Shares in respect of which the Stock Appreciation Right
is being exercised (the "Exercised Shares"). The Exercise Notice will be
completed by Participant and delivered to the Company in such form and manner as
the Administrator may determine. This Stock Appreciation Right shall be deemed
to be exercised upon receipt by the Company of such fully executed Exercise
Notice together with any applicable withholding taxes.
Upon exercising the Stock Appreciation Right, the Participant shall receive
from the Company, for each Share exercised, an amount equal to (i) the Fair
Market Value of the Common Stock as of the date of such exercise, minus (ii) the
Exercise Price set forth in the Notice of Grant. Until Shares are issued in
respect of the exercise of this Stock Appreciation Right in accordance with Plan
Section 10(a), the Participant shall not have any of the rights or privileges of
a stockholder of the Company in respect of any of the Shares covered by this
Stock Appreciation Right.
The Company's obligation arising upon the exercise of this Stock
Appreciation Right shall be paid 100% in Shares. Shares withheld to satisfy
withholding obligations shall also be valued at its Fair Market Value on the
date of exercise. Any fractional Share due to a Participant upon exercise shall
be rounded down to the nearest whole Share.
3. Non-Transferability of Stock Appreciation Right. This Stock
Appreciation Right may not be transferred in any manner otherwise than by will
or by the laws of descent or distribution and may be exercised during the
lifetime of Participant only by Participant. Notwithstanding the foregoing
sentence, Participant may, in a manner and in accordance with terms specified by
the Administrator, transfer this Stock Appreciation Right to Participant's
spouse, former spouse or dependent pursuant to a court-approved domestic
relations order which relates to the provision of child support, alimony
payments or marital property rights. The terms of the Plan and this Award
Agreement will be binding upon the executors, administrators, heirs, successors
and assigns of Participant.
4. Withholding Taxes. Participant agrees to make appropriate arrangements
with the Company (or the Parent or Subsidiary employing or retaining
Participant) for the satisfaction of all Federal, state, and local income and
employment tax withholding requirements applicable to the Option exercise.
Participant acknowledges and agrees that the Company may refuse to honor the
exercise and refuse to deliver Shares if such withholding amounts are not
delivered at the time of exercise.
5. No Effect on Continued Service. PARTICIPANT ACKNOWLEDGES AND AGREES
THAT THE VESTING OF SHARES PURSUANT TO THE VESTING SCHEDULE HEREOF IS EARNED
ONLY BY CONTINUING AS A SERVICE PROVIDER AT THE WILL OF THE COMPANY (AND NOT
THROUGH THE ACT OF BEING HIRED, BEING GRANTED AN OPTION OR PURCHASING SHARES
HEREUNDER). PARTICIPANT FURTHER ACKNOWLEDGES AND AGREES THAT THIS AGREEMENT, THE
TRANSACTIONS CONTEMPLATED HEREUNDER AND THE VESTING SCHEDULE SET FORTH HEREIN DO
NOT CONSTITUTE AN EXPRESS OR IMPLIED PROMISE OF CONTINUED ENGAGEMENT AS A
SERVICE PROVIDER FOR THE VESTING PERIOD, FOR ANY PERIOD, OR AT ALL, AND WILL NOT
INTERFERE WITH PARTICIPANT'S RIGHT OR THE COMPANY'S RIGHT TO TERMINATE
PARTICIPANT'S RELATIONSHIP AS A SERVICE PROVIDER AT ANY TIME, WITH OR WITHOUT
CAUSE.
6. Entire Agreement; Governing Law. The Plan is incorporated herein by
reference. The Plan, this Award Agreement and the Notice of Grant constitute the
entire agreement of the parties with respect to the subject matter hereof and
supersede in their entirety all prior undertakings and agreements of the Company
and Participant with respect to the subject matter hereof, and may not be
modified adversely to the Participant's interest except by means of a writing
signed by the Company and Participant. This Award Agreement is governed by
Alabama law except for that body of law pertaining to conflict of laws.
By Participant's signature and the signature of the Company's
representative below, Participant and the Company agree that this Stock
Appreciation Right is granted under and governed by the terms and conditions of
the Plan and this Award Agreement. Participant has reviewed the Plan and this
Award Agreement in their entirety, has had an opportunity to obtain the advice
of counsel prior to executing this Award Agreement and fully understands all
provisions of the Plan and Award Agreement. Participant hereby agrees to accept
as binding, conclusive and final all decisions or interpretations of the
Administrator upon any questions relating to the Plan and Award Agreement.
Participant further agrees to notify the Company upon any change in the
residence address indicated below.
PARTICIPANT: AVOCENT CORPORATION
By:
- ------------------------------------ ----------------------------------
Signature
Title:
- ------------------------------------ -------------------------------
Print Name
Residence Address:
------------------
- ------------------------------------
-2-
EXHIBIT A
---------
AVOCENT CORPORATION
2005 EQUITY INCENTIVE PLAN
STOCK APPRECIATION RIGHT AGREEMENT
EXERCISE NOTICE
Avocent Corporation
[Address]
Attention: Stock Plan Administration
1. Exercise of Stock Appreciation Right. Effective as of today,
________________, 20__, the undersigned ("Participant") hereby elects to
exercise ______________ Shares under and pursuant to the Avocent Corporation
2005 Equity Incentive Plan (the "Plan") and the Stock Appreciation Right
Agreement dated __________________, 20__ (the "Award Agreement"). Unless
otherwise defined herein, the terms defined in the Plan shall have the same
defined meanings in this Exercise Notice.
2. Representations of Participant. Participant acknowledges that
Participant has received, read and understood the Plan and the Award Agreement
and agrees to abide by and be bound by their terms and conditions.
3. Tax Consultation. Participant understands that Participant may suffer
adverse tax consequences as a result of Participant's exercise hereunder.
Participant represents that Participant has consulted with any tax consultants
Participant deems advisable in connection with the purchase or disposition of
the Shares and that Participant is not relying on the Company for any tax
advice.
4. Entire Agreement; Governing Law. The Notice of Grant, the Plan and the
Award Agreement are incorporated herein by reference. This Exercise Notice, the
Notice of Grant, the Plan and the Award Agreement constitute the entire
agreement of the parties with respect to the subject matter hereof and supersede
in their entirety all prior undertakings and agreements of the Company and
Participant with respect to the subject matter hereof, and may not be modified
adversely to the Participant's interest except by means of a writing signed by
the Company and Participant. This Award Agreement is governed by Alabama law
except for that body of law pertaining to conflict of laws.
Submitted by: Accepted by:
PARTICIPANT: AVOCENT CORPORATION
By:
- ------------------------------------ ----------------------------------
Signature
Title:
- ------------------------------------ -------------------------------
Print Name
Residence Address:
------------------
- ------------------------------------
AVOCENT CORPORATION
2005 EQUITY INCENTIVE PLAN
RESTRICTED STOCK AWARD AGREEMENT
Unless otherwise defined herein, the terms defined in the Avocent
Corporation 2005 Equity Incentive Plan ("Plan") will have the same defined
meanings in this Restricted Stock Award Agreement (the "Agreement").
1. NOTICE OF RESTRICTED STOCK AWARD
Name:
-----------------------------------------------
Address:
--------------------------------------------
The undersigned Participant (as defined below) has been granted a right to
purchase shares of Common Stock, subject to the terms and conditions of the Plan
and this Agreement, as follows:
Grant Number
---------------------------
Date of Grant
---------------------------
Vesting Commencement Date
---------------------------
Exercise Price Per Share $0.001
---------------------------
Total Number of Shares
---------------------------
Expiration Date
---------------------------
YOU MUST EXERCISE THIS RESTRICTED STOCK AWARD BEFORE THE EXPIRATION DATE OR
IT WILL TERMINATE AND YOU WILL HAVE NO FURTHER RIGHT TO PURCHASE THE SHARES.
Non-Transferability of Right to Acquire Common Stock.
- -----------------------------------------------------
This Award of Restricted Stock may not be transferred in any manner
otherwise than by will or by the laws of descent or distribution and may be
exercised during the lifetime of Participant only by Participant. The terms of
the Plan and this Agreement will be binding upon the executors, administrators,
heirs, successors and assigns of the Participant.
2. AGREEMENT
1. Sale of Stock. The Company hereby agrees to sell to the
individual named in the Notice of Grant of Restricted Stock (the "Participant"),
and the Participant hereby agrees to purchase the number of Shares set forth in
the Notice of Grant of Restricted Stock, at the exercise price per share set
forth in the Notice of Grant of Restricted Stock (the "Exercise Price"), and
subject to the terms and conditions of the Plan, which are incorporated herein
by reference.
2. Payment of Purchase Price. Participant herewith delivers to the
Company the aggregate Exercise Price for the Shares by cash or check, together
with any and all withholding taxes due in connection with the purchase of the
Shares.
3. [Repurchase Option.
-------------------
(a) In the event Participant ceases to be a Service Provider for
any or no reason (including death or Disability), the Company will, upon the
date of such termination (as reasonably fixed and determined by the Company),
have an irrevocable, exclusive option for a period of ninety (90) days from such
date to reacquire up to that number of Shares which constitute the Unreleased
Shares (as defined in Section 4) at the Exercise Price per share, if any (the
"Repurchase Price") (the "Repurchase Option").
(b) The Repurchase Option will be exercised by the Company by
delivering written notice to the Participant or the Participant's executor (with
a copy to the Escrow Holder (as defined in Section 6)) AND, at the Company's
option, (i) by delivering to the Participant or the Participant's executor a
check in the amount of the aggregate Repurchase Price, or (ii) by the Company
canceling an amount of the Participant's indebtedness to the Company equal to
the aggregate Repurchase Price, or (iii) by a combination of (i) and (ii) so
that the combined payment and cancellation of indebtedness equals such aggregate
Repurchase Price; provided, however, that if the Participant paid no
consideration for the Shares, all such Shares will thereupon be forfeited and
automatically transferred to and reacquired by the Company at no cost to the
Company. Upon delivery of such notice and the payment of the aggregate
Repurchase Price, if any, in the ways described above, the Company will become
the legal and beneficial owner of the Unreleased Shares being repurchased and
all rights and interests therein or relating thereto, and the Company will have
the right to retain and transfer to its own name the number of Unreleased Shares
being repurchased by the Company.
(c) Whenever the Company will have the right to reacquire the
Unreleased Shares hereunder, the Company may designate and assign one or more
employees, officers, directors or shareholders of the Company or other persons
or organizations to exercise all or a part of the Company's Repurchase Option to
purchase all or a part of the Unreleased Shares. If the Fair Market Value of the
Unreleased Shares to be repurchased on the date of such designation or
assignment (the "Repurchase FMV") exceeds the aggregate Repurchase Price of the
Unreleased Shares, then each such designee or assignee will pay the Company cash
equal to the difference between the Repurchase FMV and the aggregate Repurchase
Price of Unreleased Shares to be purchased.
(d) If the Company or its assignee does not elect to exercise
the Repurchase Option conferred above by giving the requisite notice within
ninety (90) days following Participant's termination as a Service Provider, the
Repurchase Option will terminate.]
OR
-2-
3. [Reacquisition Right. In the event the Purchaser ceases to be a
Service Provider for any or no reason (including death or Disability) before all
of the Shares of Restricted Stock are released from the Company's Reacquisition
Right (see Section 4), all such Shares will thereupon be forfeited and
automatically transferred to and reacquired by the Company at no cost to the
Company (the "Reacquisition Right"). The Purchaser will not be entitled to a
refund of the price paid for any Shares of Restricted Stock returned to the
Company pursuant to this Section 3. Upon such termination, the Company will
become the legal and beneficial owner of the Shares of Restricted Stock being
forfeited and reacquired by the Company and all rights and interests therein or
relating thereto, and the Company will have the right to retain and transfer to
its own name the number of Shares of Restricted Stock being reacquired by the
Company.]
4. [Release of Shares From Repurchase Option.
------------------------------------------
(a) Subject to any accelerated vesting provisions in the Plan, [__%
of the Shares will be released from the Company's Repurchase Option ________
months following the Vesting Commencement Date (as set forth in the Notice of
Grant of Restricted Stock) and ____ of the Shares will be released each month
thereafter on the same day of the month as the Date of Grant], provided that the
Purchaser continues to be a Service Provider through such date. (b) Any of the
Shares which have not yet been released from the Company's Repurchase Option are
referred to herein as "Unreleased Shares."
OR
4. [Release of Shares From Reacquisition Right. (c) Vesting Schedule.
Subject to any accelerated vesting provisions in the Plan, [__% of the Shares
will be released from the Company's Reacquisition Right ______ months following
the Vesting Commencement Date (as set forth in the Notice of Grant of Restricted
Stock) and _________ of the Shares will be released each month thereafter on the
same day of the month as the Date of Grant], provided that the Purchaser
continues to be a Service Provider through such date. (d) Any of the Shares that
have not yet been released from the Reacquisition Right are referred to herein
as "Unreleased Shares."]
5. Restriction on Transfer. Except for the escrow described in Section 5
or transfer of the Shares to the Company or its assignees contemplated by this
Agreement, none of the Shares or any beneficial interest therein will be
transferred, encumbered or otherwise disposed of in any way until the release of
such Shares from the Company's [Repurchase Option/Reacquisition Right] in
accordance with the provisions of this Agreement, other than by will or the laws
of descent and distribution. Any distribution or delivery to be made to the
Participant under this Agreement will, if the Participant is then deceased, be
made to the Participant's designated beneficiary, or if no beneficiary survives
the Participant, to the administrator or executor of the Participant's estate.
Any such transferee must furnish the Company with (a) written notice of his or
her status as transferee, and (b) evidence satisfactory to the Company to
establish the validity of the transfer and compliance with any laws or
regulations pertaining to said transfer.
-3-
6. Escrow of Shares.
-----------------
(a) All Shares of Restricted Stock will, upon execution of this
Agreement, be delivered and deposited with an escrow holder designated by the
Company (the "Escrow Holder"). The Shares of Restricted Stock and stock
assignment attached hereto as Exhibit A-1 will be held by the Escrow Holder
until such time as the Company's [Repurchase Option/Reacquisition Right] expires
or the date the Participant's status as a Service Provider terminates.
(b) The Escrow Holder will not be liable for any act it may do or
omit to do with respect to holding the Unreleased Shares in escrow while acting
in good faith and in the exercise of its judgment.
(c) Upon the date the Participant's status as a Service Provider
terminates for any reason, the Escrow Holder, upon receipt of written notice of
such termination, will take all steps necessary to accomplish the transfer of
the Unreleased Shares to the Company. The Participant hereby appoints the Escrow
Holder with full power of substitution, as the Participant's true and lawful
attorney-in-fact with irrevocable power and authority in the name and on behalf
of the Participant to take any action and execute all documents and instruments,
including, without limitation, stock powers which may be necessary to transfer
the certificate or certificates evidencing such Unreleased Shares to the Company
upon such termination.
(d) When a portion of the Shares has been released from the
[Repurchase Option/Reacquisition Right], upon request, the Escrow Holder will
take all steps necessary to accomplish the transfer of the Unreleased Shares to
the Participant.
(e) Subject to the terms hereof, the Participant will have all the
rights of a shareholder with respect to the Shares while they are held in
escrow, including without limitation, the right to vote the Shares and to
receive any cash dividends declared thereon.
(f) In the event of any merger, reorganization, consolidation,
recapitalization, separation, liquidation, stock dividend, split-up, share
combination, or other change in the corporate structure of the Company affecting
the Common Stock, the Shares of Restricted Stock will be increased, reduced or
otherwise changed, and by virtue of any such change the Participant will in his
capacity as owner of Unreleased Shares that have been awarded to him be entitled
to new or additional or different shares of stock, cash or securities (other
than rights or warrants to purchase securities); such new or additional or
different shares, cash or securities will thereupon be considered to be
Unreleased Shares and will be subject to all of the conditions and restrictions
which were applicable to the Unreleased Shares pursuant to this Agreement. If
the Participant receives rights or warrants with respect to any Unreleased
Shares, such rights or warrants may be held or exercised by the Participant,
provided that until such exercise any such rights or warrants and after such
exercise any shares or other securities acquired by the exercise of such rights
or warrants will be considered to be Unreleased Shares and will be subject to
all of the conditions and restrictions which were applicable to the Unreleased
Shares pursuant to this Agreement. The Administrator in its absolute discretion
at any time may accelerate the vesting of all or any portion of such new or
additional shares of stock, cash or securities, rights or warrants to purchase
securities or shares or other securities acquired by the exercise of such rights
or warrants.
-4-
(g) The Company may instruct the transfer agent for its Common Stock
to place a legend on the certificates representing the Restricted Stock or
otherwise note its records as to the restrictions on transfer set forth in this
Agreement.
7. Withholding of Taxes. Notwithstanding any contrary provision of this
Agreement, no certificate representing the Shares of Restricted Stock may be
released from the escrow established pursuant to Section 6, unless and until
satisfactory arrangements (as determined by the Administrator) will have been
made by the Participant with respect to the payment of income and employment
taxes which the Company determines must be withheld with respect to such Shares.
The Administrator, in its sole discretion and pursuant to such procedures as it
may specify from time to time, may permit the Participant to satisfy such tax
withholding obligation, in whole or in part by one or more of the following: (a)
paying cash, [(b) electing to have the Company withhold otherwise deliverable
Shares having a Fair Market Value equal to the minimum amount required to be
withheld, (c) delivering to the Company already vested and owned Shares having a
Fair Market Value equal to the amount required to be withheld], or (d) selling a
sufficient number of such Shares otherwise deliverable to Participant through
such means as the Company may determine in its sole discretion (whether through
a broker or otherwise) equal to the amount required to be withheld. If the
Participant fails to make satisfactory arrangements for the payment of any
required tax withholding obligations hereunder at the time any applicable Shares
otherwise are scheduled to vest pursuant to Section 4, the Participant will
permanently forfeit such shares and the shares will be returned to the Company
at no cost to the Company.
8. General Provisions.
-------------------
(a) This Agreement will be governed by the internal substantive laws,
but not the choice of law rules of Alabama. This Agreement, subject to the terms
and conditions of the Plan and the Notice of Grant, represents the entire
agreement between the parties with respect to the purchase of the Shares by the
Participant. Subject to Section 19(c) of the Plan, in the event of a conflict
between the terms and conditions of the Plan and the terms and conditions of
this Agreement, the terms and conditions of the Plan will prevail. Unless
otherwise defined herein, the terms defined in the Plan will have the same
defined meanings in this Agreement.
(b) Any notice, demand or request required or permitted to be given
by either the Company or the Participant pursuant to the terms of this Agreement
will be in writing and will be deemed given when delivered personally or
deposited in the U.S. mail, First Class with postage prepaid, and addressed to
the parties at the addresses of the parties set forth at the end of this
Agreement or such other address as a party may request by notifying the other in
writing.
Any notice to the Escrow Holder will be sent to the Company's address with
a copy to the other party hereto.
(c) The rights of the Company under this Agreement will be
transferable to any one or more persons or entities, and all covenants and
agreements hereunder will inure to the benefit of, and be enforceable by the
Company's successors and assigns. The rights and obligations of the Participant
under this Agreement may only be assigned with the prior written consent of the
Company.
-5-
(d) Either party's failure to enforce any provision of this Agreement
will not in any way be construed as a waiver of any such provision, nor prevent
that party from thereafter enforcing any other provision of this Agreement. The
rights granted both parties hereunder are cumulative and will not constitute a
waiver of either party's right to assert any other legal remedy available to it.
(e) The Participant agrees upon request to execute any further
documents or instruments necessary or desirable to carry out the purposes or
intent of this Agreement.
(f) Participant acknowledges and agrees that the vesting of Shares of
Restricted Stock pursuant to Section 4 hereof is earned only by continuing as a
Service Provider at the will of the Company (and not through the act of being
hired or purchasing Shares hereunder). Participant further acknowledges and
agrees that this Agreement, the transactions contemplated hereunder and the
vesting schedule set forth herein do not constitute an express or implied
promise of continued engagement as a Service Provider for the vesting period,
for any period, or at all, and will not interfere with the Participant's right
or the Company's right to terminate the Participant's relationship as a Service
Provider at any time, with or without cause.
By Participant's signature below, Participant represents that he or she is
familiar with the terms and provisions of the Plan, and hereby accepts this
Agreement subject to all of the terms and provisions thereof. Participant has
reviewed the Plan and this Agreement in their entirety, has had an opportunity
to obtain the advice of counsel prior to executing this Agreement and fully
understands all provisions of this Agreement. Participant agrees to accept as
binding, conclusive and final all decisions or interpretations of the
Administrator upon any questions arising under the Plan or this Agreement.
Participant further agrees to notify the Company upon any change in the
residence indicated in the Notice of Grant.
PARTICIPANT: AVOCENT CORPORATION
By:
- ------------------------------------ ----------------------------------
Signature
Title:
- ------------------------------------ -------------------------------
Print Name
Residence Address:
------------------
- ------------------------------------
-6-
EXHIBIT A-1
-----------
ASSIGNMENT SEPARATE FROM CERTIFICATE
FOR VALUE RECEIVED I, __________________________, hereby sell, assign and
transfer unto Avocent Corporation _____________ shares of the Common Stock of
Avocent Corporation standing in my name of the books of said corporation
represented by Certificate No. _____ herewith and do hereby irrevocably
constitute and appoint ______________________________ to transfer the said stock
on the books of the within named corporation with full power of substitution in
the premises.
This Stock Assignment may be used only in accordance with the Restricted
Stock Award Agreement between Avocent Corporation and the undersigned dated
______________, ____ (the "Agreement").
Dated: _______________, _____ Signature:
-------------------------------
INSTRUCTIONS: Please do not fill in any blanks other than the signature line.
The purpose of this assignment is to enable the Company to exercise its
[Repurchase Option/Reacquisition Right] as set forth in the Agreement, without
requiring additional signatures on the part of the Participant.