AVOCENT CORPORATION
2008 INDUCEMENT EQUITY INCENTIVE PLAN
1. Purposes of the Plan. The purposes of this Plan are:
-- to provide a material inducement for the best available employees
to join the Company, and
-- to promote the success of the Company's business.
The Plan permits the grant of Nonstatutory Stock Options, Stock
Appreciation Rights, Restricted Stock, Restricted Stock Units, Performance
Shares, Performance Units, Deferred Stock Units and Dividend Equivalents as the
Administrator may determine.
2. Definitions. As used herein, the following definitions will apply:
(a) "Administrator" means the Board or any of its Committees as will
be administering the Plan, in accordance with Section 4 of the Plan.
(b) "Applicable Laws" means the requirements relating to the
administration of equity-based awards under U.S. state corporate laws, U.S.
federal and state securities laws, the Code, any stock exchange or quotation
system on which the Common Stock is listed or quoted and the applicable laws of
any foreign country or jurisdiction where Awards are, or will be, granted under
the Plan.
(c) "Award" means, individually or collectively, a grant under the
Plan of Options, Stock Appreciation Rights, Restricted Stock, Restricted Stock
Units, Performance Shares, Performance Units, Deferred Stock Units and Dividend
Equivalents as the Administrator may determine.
(d) "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.
(e) "Awarded Stock" means the Common Stock subject to an Award.
(f) "Board" means the Board of Directors of the Company.
(g) "Change of Control" means the occurrence of any of the following
events:
(i) Any person (other than the Company) or more than one person
acting as a group (a "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 Plan,
"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 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.
(iii) The closing of any transaction involving:
a) any consolidation, merger, or other reorganization 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, consolidation, or other
reorganization 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 subsection 2(g)(iii)(a) and 2(g)(iii)(b) above, the term
"Change of 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.
(h) "Code" means the Internal Revenue Code of 1986, as amended. Any
reference to a section of the Code herein will be a reference to any successor
or amended section of the Code.
(i) "Committee" means a committee of Directors or of other
individuals satisfying Applicable Laws appointed by the Board, or the
compensation committee of the Board, in accordance with Section 4 hereof.
(j) "Common Stock" means the common stock of the Company.
(k) "Company" means Avocent Corporation, a Delaware corporation, or
any successor thereto.
(l) "Consultant" means any person, including an advisor, engaged by
the Company or a Parent or Subsidiary to render services to such entity.
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(m) "Deferred Stock Unit" means a deferred stock unit Award granted
to a Participant pursuant to Section 11. (n) "Director" means a member of the
Board.
(o) "Disability" means total and permanent disability as defined in
Section 22(e)(3) of the Code, provided that the Administrator in its discretion
may determine whether a permanent and total disability exists in accordance with
uniform and non-discriminatory standards adopted by the Administrator from time
to time.
(p) "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. Unless otherwise determined by the
Administrator, the Dividend Equivalent for each Share subject to an Award will
only be paid to a Participant on the vesting date for such Share or such other
date as may be required by Applicable Laws.
(q) "Employee" means any person, including Officers and Directors,
employed by the Company or any Parent or Subsidiary of the Company. Neither
service as a Director nor payment of a director's fee by the Company will be
sufficient to constitute "employment" by the Company.
(r) "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
(s) "Exchange Program" means a program under which (i) outstanding
Awards are surrendered or cancelled in exchange for awards of the same type
(which may have higher or lower exercise prices and different terms), awards of
a different type, and/or cash, (ii) Participants would have the opportunity to
transfer any outstanding Awards to a financial institution or other person or
entity selected by the Administrator, and/or (iii) the exercise price of an
outstanding Award is reduced. The Administrator will determine the terms and
conditions of any Exchange Program in its sole discretion.
(t) "Fair Market Value" means, as of any date, the value of the
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 System ("Nasdaq") System, the Fair Market Value of a Share
of Common Stock will be the closing sales price for such stock as quoted on such
system or exchange (or the exchange with the greatest volume of trading in
Common Stock) on the day of determination (or, if no closing sales price is
reported for the relevant date, on the last trading day for which a closing
sales price is reported), 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 will be the mean between the high bid and low asked
prices for the Common Stock on the day of determination (or, if no bids and asks
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were reported on that date, as applicable, on the last trading date such bids
and asks were reported), as reported in The Wall Street Journal or such other
source as the Administrator deems reliable; or
(iii) In the absence of an established market for the Common
Stock, the Fair Market Value will be determined in good faith by the
Administrator.
(u) "Incentive Stock Option" means an Option that by its terms
qualifies and is otherwise intended to qualify as an incentive stock option
within the meaning of Section 422 of the Code and the regulations promulgated
thereunder.
(v) "Nonstatutory Stock Option" means an Option that by its terms
does not qualify or is not intended to qualify as an Incentive Stock Option.
(w) "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.
(x) "Option" means a stock option granted pursuant to Section 6 of
the Plan. An option under this Plan will only be a Nonstatutory Stock Option.
(y) "Outside Director" means a Director who is not an Employee.
(z) "Parent" means a "parent corporation," whether now or hereafter
existing, as defined in Section 424(e) of the Code.
(aa) "Participant" means the holder of an outstanding Award.
(bb) "Performance Share" means a performance share Award granted to a
Participant pursuant to Section 10.
(cc) "Performance Unit" means a performance unit Award granted to a
Participant pursuant to Section 10.
(dd) "Period of Restriction" means the period during which the
transfer of Shares of Restricted Stock are subject to restrictions and
therefore, the Shares are subject to a substantial risk of forfeiture. Such
restrictions may be based on the passage of time, the achievement of target
levels of performance, or the occurrence of other events as determined by the
Administrator.
(ee) "Plan" means this 2008 Inducement Equity Incentive Plan.
(ff) "Restricted Stock" means Shares issued pursuant to an Award of
Restricted Stock under Section 8 of the Plan.
(gg) "Restricted Stock Unit" means a bookkeeping entry representing an
amount equal to the Fair Market Value of one Share, granted pursuant to Section
9. Each Restricted Stock Unit represents an unfunded and unsecured obligation of
the Company.
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(hh) "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.
(ii) "Section 16(b)" means Section 16(b) of the Exchange Act.
(jj) "Section 409A" means Section 409A of the Code and any proposed or
final Treasury Regulations and Internal Revenue Service guidance that has been
promulgated or may be promulgated thereunder from time to time.
(kk) "Service Provider" means an Employee, Director, or Consultant.
(ll) "Share" means a share of the Common Stock, as adjusted in
accordance with Section 15 of the Plan.
(mm) "Stock Appreciation Right" means an Award, granted alone or in
connection with an Option, that pursuant to Section 7 is designated as a Stock
Appreciation Right.
(nn) "Subsidiary" means a "subsidiary corporation," whether now or
hereafter existing, as defined in Section 424(f) of the Code.
3. Stock Subject to the Plan.
(a) Subject to the provisions of Section 15 of the Plan, the maximum
aggregate number of Shares that may be awarded and sold under the Plan is Seven
Hundred Thousand (700,000) Shares. The Shares may be authorized, but unissued,
or reacquired Common Stock.
(b) Full Value Awards. Any Shares subject to Awards other than
Options or Stock Appreciation Rights will be counted against the numerical
limits of this Section 3 as two (2) Shares for every one (1) Share subject
thereto. Further, if Shares acquired pursuant to any such Award are forfeited or
repurchased by the Company and would otherwise return to the Plan pursuant to
Section 3(c), two (2) times the number of Shares so forfeited or repurchased
will return to the Plan and will again become available for issuance
(c) Lapsed Awards. If an Award expires or becomes unexercisable
without having been exercised in full, is surrendered pursuant to an Exchange
Program or, with respect to Restricted Stock, Restricted Stock Units or
Performance Shares, is forfeited to or repurchased by the Company, the
unpurchased Shares (or for Awards other than Options and Stock Appreciation
Rights, the forfeited or repurchased Shares) which were subject thereto will
become available for future grant or sale under the Plan (unless the Plan has
terminated). Upon exercise of a Stock Appreciation Right settled in Shares, the
gross number of Shares covered by the portion of the Award so exercised will
cease to be available under the Plan. Shares that have actually been issued
under the Plan under any Award will not be returned to the Plan and will not
become available for future distribution under the Plan; provided, however, that
if unvested Shares of Restricted Stock, Restricted Stock Units or Performance
Shares are repurchased by the Company or are forfeited to the Company, such
Shares will become available for future grant under the Plan. Shares used to pay
the withholding tax related to an Award or to pay for the exercise price of an
Award will not become available for future grant or sale under the Plan. To the
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extent an Award under the Plan is paid out in cash rather than Shares, such cash
payment will not result in reducing the number of Shares available for issuance
under the Plan. Any payout of Performance Units or Dividend Equivalents, because
they are payable only in cash, will not reduce the number of Shares available
for issuance under the Plan. Conversely, any forfeiture of Performance Units or
Dividend Equivalents will not increase the number of Shares available for
issuance under the Plan.
(d) Share Reserve. The Company, during the term of this Plan, will at
all times reserve and keep available such number of Shares as will be sufficient
to satisfy the requirements of the Plan.
4. Administration of the Plan.
(a) Procedure.
(i) Multiple Administrative Bodies. Different Committees with
respect to different groups of Service Providers may administer the Plan.
(ii) Rule 16b-3. To the extent desirable to qualify transactions
hereunder as exempt under Rule 16b-3, the transactions contemplated hereunder
will be structured to satisfy the requirements for exemption under Rule 16b-3.
(iii) Other Administration. Other than as provided above, the
Plan will be administered by (A) the Board or (B) a Committee, which committee
will 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 will have the authority, in its
discretion:
(i) to determine the Fair Market Value;
(ii) to select the Employees to whom Awards may be granted
hereunder;
(iii) 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 Awards may be exercised (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 relating thereto,
based in each case on such factors as the Administrator will determine;
(iv) to construe and interpret the terms of the Plan and Awards
granted pursuant to the Plan;
(v) 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 satisfying applicable foreign laws or for
qualifying for preferred tax treatment under applicable foreign laws;
(vi) to modify or amend each Award (subject to Section 20(b) of
the Plan);
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(vii) 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;
(viii) to determine whether Dividend Equivalents will be granted
in connection with another Award;
(ix) to determine the terms and conditions of an Exchange Program
and with the approval of the Company's stockholders, to institute an Exchange
Program;
(x) to allow a Participant to defer the receipt of the payment
of cash or the delivery of Shares that would otherwise be due to such
Participant under an Award pursuant to such procedures as the Administrator may
determine; and
(xi) to approve forms of agreements for use under the Plan;
(xii) 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 will be final and binding on all
Participants and any other holders of Awards.
5. Eligibility. Awards may be granted to Employees so long as the
following requirements are met: (a) the Employee was not previously an Employee
or Director, or the Employee is returning to the employment of the Company
following a bona-fide period of non-employment; and (b) the grant of an Award
under the Plan is a material inducement to the Employee's decision to enter into
the employment of the Company. Notwithstanding the foregoing, an Employee may be
granted an Award in connection with a merger, acquisition or similar
transaction, to the extent permitted by the Nasdaq rules governing stockholder
approval of inducement equity compensation plans.
6. Stock Options.
(a) Term of Option. The Administrator will determine the term of each
Option in its sole discretion; provided, however, that the term will be no more
than ten (10) years from the date of grant thereof.
(b) Option Exercise Price and Consideration.
(i) Exercise Price. The per share exercise price for the Shares
to be issued pursuant to exercise of an Option will be determined by the
Administrator, but will be no less than 100% of the Fair Market Value per Share
on the date of grant. Notwithstanding the foregoing, Options may be granted with
a per Share exercise price of less than 100% of the Fair Market Value per Share
on the date of grant pursuant to a transaction described in, and in a manner
consistent with, Section 424(a) of the Code.
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(ii) Waiting Period and Exercise Dates. At the time an Option is
granted, the Administrator will fix the period within which the Option may be
exercised and will determine any conditions that must be satisfied before the
Option may be exercised.
(iii) Form of Consideration. The Administrator will determine the
acceptable form(s) of consideration for exercising an Option, including the
method of payment, to the extent permitted by Applicable Laws. Such
consideration may consist of, without limitation, (1) cash, (2) check, (3)
promissory note, to the extent permitted by Applicable Laws, (4) other Shares,
provided that such Shares have a Fair Market Value on the date of surrender
equal to the aggregate exercise price of the Shares as to which such Option
shall be exercised and provided that accepting such Shares, in the sole
discretion of the Administrator, shall not result in any adverse accounting
consequences to the Company, (5) consideration received by the Company under a
cashless exercise program implemented by the Company in connection with the
Plan, (6) by net exercise, (7) such other consideration and method of payment
for the issuance of Shares to the extent permitted by Applicable Laws, or (8)
any combination of the foregoing methods of payment. In making its determination
as to the type of consideration to accept, the Administrator shall consider if
acceptance of such consideration may be reasonably expected to benefit the
Company.
(c) Exercise of Option.
(i) Procedure for Exercise; Rights as a Stockholder. Any Option
granted hereunder will 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 Award Agreement. An Option may not be exercised for a fraction of a
Share.
An Option will be deemed exercised when the Company receives: (i)
notice of exercise (in such form as the Administrator specifies from time to
time) from the person entitled to exercise the Option, and (ii) full payment for
the Shares with respect to which the Option is exercised (together with any
applicable withholding taxes). Full payment may consist of any consideration and
method of payment authorized by the Administrator and permitted by the Award
Agreement and the Plan. Shares issued upon exercise of an Option will be issued
in the name of the Participant or, if requested by the Participant, in the name
of the Participant and his or her spouse. Until the Shares are 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 will exist with respect to the Shares
subject to an Option, notwithstanding the exercise of the Option. The Company
will issue (or cause to be issued) such Shares 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 Shares are issued, except as provided
in Section 15 of the Plan.
(ii) Termination of Relationship as a Service Provider. If a
Participant ceases to be a Service Provider, other than upon the Participant's
termination as the result of the Participant's death or Disability, the
Participant may exercise his or her Option within such period of time as is
specified in the Award 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 Award Agreement). In the absence of a specified
time in the Award Agreement, the Option will remain exercisable for three (3)
months following the Participant's termination. Unless otherwise provided by the
Administrator, if on the date of termination the Participant is not vested as to
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his or her entire Option, the Shares covered by the unvested portion of the
Option will 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 will terminate, and the Shares covered by such Option will revert to the
Plan.
(iii) Disability of Participant. 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
Award 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 Award Agreement). In the absence of a specified time in the Award
Agreement, the Option will remain exercisable for twelve (12) months following
the Participant's termination. Unless otherwise provided by the Administrator,
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 will
revert to the Plan. If after termination the Participant does not exercise his
or her Option within the time specified herein, the Option will terminate, and
the Shares covered by such Option will revert to the Plan.
(iv) 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 Award Agreement to the extent that
the Option is vested on the date of death (but in no event may the option be
exercised later than the expiration of the term of such Option as set forth in
the Award 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
Award Agreement, the Option will remain exercisable for twelve (12) months
following Participant's death. Unless otherwise provided by the Administrator,
if at the time of death Participant is not vested as to his or her entire
Option, the Shares covered by the unvested portion of the Option will
immediately revert to the Plan. If the Option is not so exercised within the
time specified herein, the Option will terminate, and the Shares covered by such
Option will revert to the Plan.
(v) Other Termination. A Participant's Award Agreement may also
provide that if the exercise of the Option following the termination of
Participant's status as a Service Provider (other than upon the Participant's
death or Disability) would result in liability under Section 16(b), then the
Option will terminate on the earlier of (A) the expiration of the term of the
Option set forth in the Award Agreement, or (B) the 10th day after the last date
on which such exercise would result in such liability under Section 16(b), but
in no event later than the original full term of the Option. Finally, a
Participant's Award Agreement may also provide that if the exercise of the
Option following the termination of the Participant's status as a Service
Provider (other than upon the Participant's death or Disability) would be
prohibited at any time solely because the issuance of Shares would violate the
registration requirements under the Securities Act, then the Option will
terminate on the earlier of (A) the expiration of the term of the Option, or (B)
the expiration of a period of three (3) months after the termination of the
Participant's status as a Service Provider during which the exercise of the
Option would not be in violation of such registration requirements.
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7. Stock Appreciation Rights.
(a) Grant of Stock Appreciation Rights. Subject to the terms and
conditions of the Plan, a Stock Appreciation Right may be granted to Employees
at any time and from time to time as will be determined by the Administrator, in
its sole discretion.
(b) Number of Shares. The Administrator will have complete discretion
to determine the number of Stock Appreciation Rights granted to any Employee.
(c) Exercise Price and Other Terms. The Administrator, subject to the
provisions of the Plan, will have complete discretion to determine the terms and
conditions of Stock Appreciation Rights granted under the Plan, provided,
however, that the exercise price will be not less than 100% of the Fair Market
Value of a Share on the date of grant.
(d) Stock Appreciation Right Agreement. Each Stock Appreciation Right
grant will be evidenced by an Award Agreement that will specify the exercise
price, the term of the Stock Appreciation Right, the conditions of exercise, and
such other terms and conditions as the Administrator, in its sole discretion,
will determine.
(e) Expiration of Stock Appreciation Rights. A Stock Appreciation
Right granted under the Plan will expire upon the date determined by the
Administrator, in its sole discretion, and set forth in the Award Agreement;
provided, however, that the term will be no more than ten (10) years from the
date of grant thereof. Notwithstanding the foregoing, the rules of Section 6(c)
also will apply to Stock Appreciation Rights.
(f) Payment of Stock Appreciation Right Amount. Upon exercise of a
Stock Appreciation Right, a Participant will 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 Stock
Appreciation Right is exercised.
(iii) At the discretion of the Administrator, the payment upon
Stock Appreciation Right exercise may be in cash, in Shares of equivalent value,
or in some combination thereof, as specified in the Award Agreement.
8. Restricted Stock.
(a) Grant of Restricted Stock. Subject to the terms and provisions of
the Plan, the Administrator, at any time and from time to time, may grant Shares
of Restricted Stock to Employees in such amounts as the Administrator, in its
sole discretion, will determine.
(b) Restricted Stock Agreement. Each Award of Restricted Stock will
be evidenced by an Award Agreement that will specify the Period of Restriction,
the number of Shares granted, and such other terms and conditions as the
Administrator, in its sole discretion, will determine. Unless the Administrator
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determines otherwise, Shares of Restricted Stock will be held by the Company as
escrow agent until the restrictions on such Shares have lapsed.
(c) Transferability. Except as provided in this Section 8, Shares of
Restricted Stock may not be sold, transferred, pledged, assigned, or otherwise
alienated or hypothecated until the end of the applicable Period of Restriction.
(d) Other Restrictions. The Administrator, in its sole discretion,
may impose such other restrictions on Shares of Restricted Stock as it may deem
advisable or appropriate.
(e) Removal of Restrictions. Except as otherwise provided in this
Section 8, Shares of Restricted Stock covered by each Restricted Stock grant
made under the Plan will be released from escrow as soon as practicable after
the last day of the Period of Restriction or at such other time as the
Administrator may determine. The Administrator, in its discretion, may
accelerate the time at which any restrictions will lapse or be removed.
(f) Voting Rights. During the Period of Restriction, Service
Providers holding Shares of Restricted Stock granted hereunder may exercise full
voting rights with respect to those Shares, unless the Administrator determines
otherwise.
(g) Dividends and Other Distributions. During the Period of
Restriction, Service Providers holding Shares of Restricted Stock will be
entitled to receive all dividends and other distributions paid with respect to
such Shares unless the Administrator provides otherwise. If any such dividends
or distributions are paid in Shares, the Shares will be subject to the same
restrictions on transferability and forfeitability as the Shares of Restricted
Stock with respect to which they were paid.
(h) Return of Restricted Stock to Company. On the date set forth in
the Award Agreement, the Restricted Stock for which restrictions have not lapsed
will revert to the Company and again will become available for grant under the
Plan.
9. Restricted Stock Units.
(a) Grant. Restricted Stock Units may be granted at any time and from
time to time as determined by the Administrator. Each Restricted Stock Unit
grant will be evidenced by an Award Agreement that will specify such other terms
and conditions as the Administrator, in its sole discretion, will determine,
including all terms, conditions, and restrictions related to the grant, the
number of Restricted Stock Units and the form of payout, which, subject to
Section 9(d), may be left to the discretion of the Administrator.
(b) Vesting Criteria and Other Terms. The Administrator will 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 status as a Service
Provider), or any other basis determined by the Administrator in its discretion.
After the grant of Restricted Stock Units, the Administrator, in its sole
discretion, may reduce or waive any restrictions for such Restricted Stock
Units. Each Award of Restricted Stock Units will be evidenced by an Award
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Agreement that will specify the vesting criteria, and such other terms and
conditions as the Administrator, in its sole discretion will determine. The
Administrator, in its discretion, may accelerate the time at which any
restrictions will lapse or be removed.
(c) Earning Restricted Stock Units. Upon meeting the applicable
vesting criteria, the Participant will be entitled to receive a payout as
specified in the Award Agreement.
(d) Form and Timing of Payment. Payment of earned Restricted Stock
Units will be made as soon as practicable after the date(s) set forth in the
Award Agreement. The Administrator, in its sole discretion, may pay earned
Restricted Stock Units in cash, Shares, or a combination thereof. Shares
represented by Restricted Stock Units that are fully paid in cash again will be
available for grant under the Plan.
(e) Cancellation. On the date set forth in the Award Agreement, all
unearned Restricted Stock Units will be forfeited to the Company.
10. Performance Units and Performance Shares.
(a) Grant of Performance Units and Performance Shares. Performance
Units and Performance Shares may be granted to Employees at any time and from
time to time, as will be determined by the Administrator, in its sole
discretion. The Administrator will have complete discretion in determining the
number of Shares subject to a Performance Unit and/or Performance Shares granted
to each Participant. Each Award of Performance Units or Performance Shares will
be evidenced by an Award Agreement that will specify the vesting criteria and
such other terms and conditions as the Administrator, in its sole discretion,
will determine.
(b) Value of Performance Units/Shares. Each Performance Unit will
have an initial value that is established by the Administrator on or before the
date of grant and will represent an unfunded and unsecured obligation of the
Company. Each Performance Share will have an initial value equal to the Fair
Market Value of a Share on the date of grant.
(c) Performance Objectives and Other Terms. The Administrator will
set performance objectives or other vesting provisions, which, depending on the
extent to which the objectives or other criteria are met, will determine the
number of Performance Units or Performance Shares, as applicable, that will be
paid out. 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 status as a Service Provider), or any other basis
determined by the Administrator in its discretion.
(d) Earning of Performance Units and Performance Shares. After the
applicable performance period has ended, the holder of Performance Units or
Performance Shares, as applicable, will be entitled to receive a payout of the
number of Performance Units or Performance Shares, as applicable, earned by the
Participant over the performance period, to be determined as a function of the
extent to which the corresponding performance objectives or other vesting
provisions have been achieved. After the grant of a Performance Unit or
Performance Share, the Administrator, in its sole discretion, may reduce or
waive any performance objectives or other vesting provisions for such
Performance Units or Performance Share, as applicable.
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(e) Form and Timing of Payment of Performance Units and Performance
Shares. Payment of earned Performance Units or Performance Shares, as
applicable, will be made as soon as practicable after the expiration of the
applicable performance period. The Administrator, in its sole discretion, may
pay earned Performance Shares and Performance Units in the form of cash, in
Shares (which have an aggregate Fair Market Value equal to the value of the
earned Performance Shares or Performance Units, as applicable, at the close of
the applicable performance period) or in a combination thereof.
(f) Cancellation of Performance Units and Performance Shares. On the
date set forth in the Award Agreement, all unearned or unvested Performance
Units and Performance Shares will be forfeited to the Company, and again will be
available for grant under the Plan.
11. Deferred Stock Units. 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 will remain subject to
the claims of the Company's general creditors until distributed to the
Participant.
12. Leaves of Absence; Transfer Between Locations. Unless the
Administrator provides otherwise or as otherwise required by Applicable Laws,
vesting of Awards granted hereunder will be suspended during any unpaid leave of
absence. A Service Provider will 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, or any Subsidiary.
13. Part-Time Service. Unless the Administrator provides otherwise or
except as otherwise required by Applicable Laws, any service-based vesting of
Awards granted hereunder will 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 will be
proportionately re-adjusted prospectively in the event that the Employee
subsequently becomes regularly scheduled to work additional hours of service.
14. 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
Participant, only by the Participant. If the Administrator makes an Award
transferable, such Award will contain such additional terms and conditions as
the Administrator deems appropriate; provided, however, that in no event may an
Award be transferred to a third party for value, without the prior approval of
the Company's stockholders.
15. Adjustments; Dissolution or Liquidation; Merger or Change of Control.
(a) Adjustments. In the event that any dividend or other distribution
(whether in the form of cash, Shares, other securities, or other property),
recapitalization, stock split, reverse stock split, reorganization, merger,
consolidation, split-up, spin-off, combination, repurchase, or exchange of
Shares or other securities of the Company, or other change in the corporate
structure of the Company affecting the Shares occurs, the Administrator, in
order to prevent diminution or enlargement of the benefits or potential benefits
-13-
intended to be made available under the Plan, will adjust the number and class
of Shares that may be delivered under the Plan and/or the number, class, and
price of Shares covered by each outstanding Award.
(b) Dissolution or Liquidation. In the event of the proposed
dissolution or liquidation of the Company, the Administrator will notify each
Participant as soon as practicable prior to the effective date of such proposed
transaction. To the extent it has not been previously exercised, an Award will
terminate immediately prior to the consummation of such proposed action.
(c) Merger or Change of Control. In the event of a merger or Change
of Control, each outstanding Award will be treated as the Administrator
determines without a Participant's consent, including, without limitation, that
(i) Awards will be assumed, or substantially equivalent Awards will be
substituted, by the acquiring or succeeding corporation (or an affiliate
thereof) with appropriate adjustments as to the number and kind of shares and
prices; (ii) upon written notice to a Participant, that the Participant's Awards
will terminate immediately prior to the consummation of such merger or Change of
Control; (iii) outstanding Awards will vest and become exercisable, realizable,
or payable, or restrictions applicable to an Award will lapse, in whole or in
part prior to or upon consummation of such merger or Change of Control, and, to
the extent the Administrator determines, terminate upon the effectiveness of
such merger of Change of Control; (iv) (A) the termination of an Award in
exchange for an amount of cash and/or property, if any, equal to the amount that
would have been attained upon the exercise of such Award or realization of the
Participant's rights as of the date of the occurrence of the transaction (and,
for the avoidance of doubt, if as of the date of the occurrence of the
transaction the Administrator determines in good faith that no amount would have
been attained upon the exercise of such Award or realization of the
Participant's rights, then such Award may be terminated by the Company without
payment), or (B) the replacement of such Award with other rights or property
selected by the Administrator in its sole discretion; or (v) any combination of
the foregoing. In taking any of the actions permitted under this subsection
15(c), the Administrator will not be obligated to treat all Awards, all Awards
held by a Participant, or all Awards of the same type, similarly.
In the event that the successor corporation does not assume or substitute
for the Award (or portion thereof), the Participant will fully vest in and have
the right to exercise all of his or her outstanding Options and Stock
Appreciation Rights, including Shares as to which such Awards would not
otherwise be vested or exercisable, all restrictions on Restricted Stock and
Restricted Stock Units will lapse, and, with respect to Awards with
performance-based vesting, all performance goals or other vesting criteria will
be deemed achieved at one hundred percent (100%) of target levels and all other
terms and conditions met. In addition, if an Option or Stock Appreciation Right
is not assumed or substituted in the event of a merger or Change of Control, the
Administrator will notify the Participant in writing or electronically that the
Option or Stock Appreciation Right will be exercisable for a period of time
determined by the Administrator in its sole discretion, and the Option or Stock
Appreciation Right will terminate upon the expiration of such period.
For the purposes of this subsection 15(c), an Award will be considered
assumed if, following the merger or Change of Control, the Award confers the
right to purchase or receive, for each Share subject to the Award immediately
prior to the merger or Change of Control, the consideration (whether stock,
cash, or other securities or property) received in the merger or Change of
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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 merger or 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 an Option or
Stock Appreciation Right or upon the payout of a Restricted Stock Unit, for each
Share subject to such 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 merger or Change of
Control.
Notwithstanding anything in this Section 15(c) to the contrary, an Award
that vests, is earned or paid-out upon the satisfaction of one or more
performance goals will not be considered assumed if the Company or its successor
modifies any of such performance goals without the Participant's consent;
provided, however, a modification to such performance goals only to reflect the
successor corporation's post-Change of Control corporate structure will not be
deemed to invalidate an otherwise valid Award assumption.
Notwithstanding anything in this Section 15(c) to the contrary, if a
payment under an Award Agreement is subject to Section 409A and if the change of
control definition contained in the Award Agreement does not comply with the
definition of "change of control" for purposes of a distribution under Section
409A, then any payment of an amount that is otherwise accelerated under this
Section will be delayed until the earliest time that such payment would be
permissible under Section 409A without triggering any penalties applicable under
Section 409A.
16. Tax Withholding
(a) Withholding Requirements. Prior to the delivery of any Shares or
cash pursuant to an Award (or exercise thereof), the Company will have the power
and the right to deduct or withhold, or require a Participant to remit to the
Company, an amount sufficient to satisfy federal, state, local, foreign or other
taxes (including the Participant's FICA obligation) required to be withheld with
respect to such Award (or exercise thereof).
(b) Withholding Arrangements. The Administrator, in its sole
discretion and pursuant to such procedures as it may specify from time to time,
may permit a Participant to satisfy such tax withholding obligation, in whole or
in part by (without limitation) (i) paying cash, (ii) electing to have the
Company withhold otherwise deliverable cash or Shares having a Fair Market Value
equal to the minimum amount required to be withheld, (iii) delivering to the
Company already-owned Shares having a Fair Market Value equal to the amount
required to be withheld, provided the delivery of such Shares will not result in
any (or additional) adverse accounting consequences as the Administrator in its
sole discretion determines, or (iv) selling a sufficient number of Shares
otherwise deliverable to the Participant through such means as the Administrator
may determine in its sole discretion (whether through a broker or otherwise)
equal to the amount required to be withheld. The amount of the withholding
requirement will be deemed to include any amount which the Administrator agrees
may be withheld at the time the election is made, not to exceed the amount
determined by using the maximum federal, state or local marginal income tax
rates applicable to the Participant with respect to the Award on the date that
the amount of tax to be withheld is to be determined. The Fair Market Value of
-15-
the Shares to be withheld or delivered will be determined as of the date that
the taxes are required to be withheld.
17. No Employment Rights. Neither the Plan nor any Award will confer upon
a Participant any right with respect to continuing the Participant's
relationship as an Employee or other Service Provider, nor will they interfere
in any way with the Participant's right or the Company's or Parent's or
Subsidiary's right to terminate such relationship at any time, with or without
cause, to the extent permitted by Applicable Laws.
18. Date of Grant. The date of grant of an Award will 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 will be provided to each Participant within a
reasonable time after the date of such grant.
19. Term of Plan. The Plan will become effective upon its adoption by the
Board. It will continue in effect for a term of ten (10) years unless terminated
earlier under Section 20 of the Plan.
20. Amendment and Termination of the Plan.
(a) Amendment and Termination. The Administrator may at any time
amend, alter, suspend or terminate the Plan.
(b) Effect of Amendment or Termination. No amendment, alteration,
suspension, or termination of the Plan will impair the rights of any
Participant, unless mutually agreed otherwise between the Participant and the
Administrator, which agreement must be in writing and signed by the Participant
and the Company. Termination of the Plan will not affect the Administrator's
ability to exercise the powers granted to it hereunder with respect to Awards
granted under the Plan prior to the date of such termination.
21. Conditions Upon Issuance of Shares.
(a) Legal Compliance. Shares will not be issued pursuant to the
exercise of an Award unless the exercise of such Award and the issuance and
delivery of such Shares will comply with Applicable Laws and will 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
payout of an Award, the Company may require the person exercising such Award to
represent and warrant at the time of any such exercise or payout that the Shares
are being purchased or received 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.
22. 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, will relieve the Company of any liability in respect of
the failure to issue or sell such Shares as to which such requisite authority
will not have been obtained.
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AVOCENT CORPORATION
2008 INDUCEMENT EQUITY INCENTIVE PLAN
NOTICE OF GRANT OF RESTRICTED STOCK UNITS
Unless otherwise defined herein, the terms defined in the Plan shall have
the same defined meanings in this Notice of Grant of Restricted Stock Units.
You have been granted the number of Restricted Stock Units set forth on the
Notice of Grant of Award and Award Agreement (the "Cover Page") to which this
Notice of Grant of Restricted Stock Units is attached. Each such Unit is
equivalent to one Share of Common Stock of the Company for purposes of
determining the number of Shares subject to this Award. None of the Restricted
Stock Units will be issued (nor will you have the rights of a stockholder with
respect to the underlying shares) until the vesting conditions described below
are satisfied. Additional terms of this grant are as follows:
The Vesting Schedule for your Award is set forth on the Cover Page, and
[INSERT VESTING SCHEDULE], provided you are employed as a Service Provider by
the Company or a Parent or Subsidiary of the Company on each such date.
[Notwithstanding the foregoing, all Restricted Stock Units awarded to you shall
be deemed and treated as fully earned and the vesting of all such Restricted
Stock Units shall be deemed and treated as fully accelerated to the same extent
and on the same terms and conditions as provided in [any employment agreement
entered into on or prior to the date of grant of this Award] [OR] [the
employment agreement dated [__________]] by and between you and the Company (or
any of its Subsidiaries).] [OR [ADD OTHER VESTING ACCELERATION PROVISION]]
[BRACKETED PROVISION TO BE INCLUDED FOR GRANTS WITH VESTING ACCELERATION AS
APPROPRIATE.]
You acknowledge and agree that this agreement and the vesting schedule set
forth herein does 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 shall not interfere with your right or the Company's right to terminate
your relationship as a Service Provider at any time, with or without cause.
You hereby agree to accept as binding, conclusive and final all decisions
or interpretations of the Administrator upon any questions relating to the Plan
and this Award.
By your signature and the signature of the Company's representative on the
Cover Page, you and the Company agree that the Cover Page, this Notice of Grant
of Restricted Stock Units, the form of Restricted Stock Unit Agreement attached
as Exhibit A hereto, and the 2008 Inducement Equity Incentive Plan constitute
your entire agreement with respect to this Award and may not be modified
adversely to your interest except by means of a writing signed by the Company
and you.
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EXHIBIT A
---------
AVOCENT CORPORATION
2008 INDUCEMENT EQUITY INCENTIVE PLAN
RESTRICTED STOCK UNIT AGREEMENT
1. Grant. The Company hereby grants to the Employee an award of
Restricted Stock Units ("RSUs"), as set forth in the Notice of Grant of
Restricted Stock Units and subject to the terms and conditions in this Agreement
and the Company's 2008 Inducement Equity Incentive Plan (the "Plan"). Unless
otherwise defined herein, the terms defined in the Plan shall have the same
defined meanings in this Restricted Stock Unit Agreement.
2. Company's Obligation. Each RSU represents the right to receive a
Share on the vesting date (or at such later time indicated in this Agreement).
Unless and until the RSUs vest in the manner set forth in paragraph 3 or Section
15 of the Plan, the Employee will have no right to receive Shares under such
RSUs. Prior to actual distribution of Shares pursuant to any vested RSUs, such
RSUs will represent an unsecured obligation of the Company, payable (if at all)
only from the general assets of the Company.
3. Vesting Schedule and Issuance of Shares.
(a) Subject to paragraphs 4 and 11, and Section 15 of the Plan, the
RSUs awarded by this Agreement will vest as to the number of RSUs, and on the
dates shown, on the Notice of Grant (each a "Vesting Date"), [In addition, the
RSUs awarded under this Agreement will be subject to any vesting of some or all
of the RSUs awarded by this Agreement to the same extent and on the same terms
and conditions as provided in [any employment agreement entered into on or prior
to the date of grant of this Award] [OR] [the employment agreement dated
[_______]]by and between Employee and the Company (or any of its Subsidiaries),]
[OR [ADD OTHER VESTING ACCELERATION PROVISION]] but only if the Employee will
have been continuously a Service Provider from the date the RSUs awarded by this
Agreement were granted until the date such vesting occurs. If the Employee is
not a Service Provider on such date(s), the Award shall terminate, as set forth
in paragraph 4. [BRACKETED PROVISION TO BE INCLUDED FOR AWARDS WITH ACCELERATED
VESTING AS APPROPRIATE.]
(b) As soon as practical upon or following each Vesting Date (but,
except as provided in this Agreement, in no event later than two and one-half (2
1/2) months following the end of the Company's taxable year in which the
applicable Vesting Date occurs), one Share shall be issued for each RSU that
vests on such Vesting Date, subject to the terms and provisions of the Plan and
this Agreement.
(c) (i) If the Administrator, in its discretion, accelerates the
vesting of the balance, or some lesser portion of the balance, of the Award, the
payment of such accelerated portion of the Award shall be made as soon as
practicable after the new vesting date, but, except as provided in this
Agreement, in no event later than two and one-half (2 1/2) months following the
end of the Company's taxable year in which the applicable Vesting Date occurs;
provided, however, if the Award is "deferred compensation" within the meaning of
-18-
Section 409A, the payment of such accelerated portion of the Award nevertheless
shall be made at the same time or times as if such Award had vested in
accordance with the vesting schedule set forth in paragraph 3(a), including any
necessary application of paragraph 8 (whether or not the Employee remains
employed by the Company or a Parent or Subsidiary of the Company as of such
date(s)), unless an earlier payment date, in the judgment of the Administrator,
would not cause the Employee to incur an additional tax under Section 409A, in
which case, payment of such accelerated Award shall be made within two and
one-half (2 1/2) months following the earliest permissible payment date that
would not cause the Employee to incur an additional tax under Section 409A,
subject to paragraph 8 with respect to specified employees. Notwithstanding the
foregoing, any delay in payment pursuant to this paragraph 3(c) will cease upon
the Employee's death and such payment will be made as soon as practicable after
the date of Employee's death. For purposes of this Agreement, "Section 409A"
means Section 409A of the Internal Revenue Code of 1986, as amended, and any
proposed, temporary or final Treasury Regulations and Internal Revenue Service
guidance thereunder, as each may be amended from time to time.
(ii) If the vesting of all or a portion of this Award accelerates
pursuant to Section 15(c) of the Plan in the event of a Change of Control that
is not a "change in control" within the meaning of Section 409A, the timing of
payment rules that apply to discretionary accelerations under paragraph 3(c)(i)
shall also apply.
(d) No fractional Shares shall be issued under this Agreement.
4. Forfeiture upon Termination as Service Provider. Except as provided in
paragraph 3, if the Employee terminates service as a Service Provider for any or
no reason prior to vesting, the unvested RSUs awarded by this Agreement will
thereupon be forfeited and automatically transferred to and reacquired by the
Company at no cost to the Company and the Employee's right to acquire any Shares
hereunder will immediately terminate.
5. Payments after Death. Any distribution or delivery to be made to the
Employee under this Agreement will, if the Employee is then deceased, be made to
the administrator or executor of the Employee's estate. Any such administrator
or executor 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.
6. Withholding of Taxes. The Company (or the employing Parent or
Subsidiary) will withhold from the number of Shares otherwise issuable under
this Award a number of Shares that have an aggregative market value sufficient
to pay the minimum statutorily required federal, state and local tax withholding
obligations, unless the Company, in its sole discretion, requires the Employee
to make alternate arrangements satisfactory to the Company for such withholdings
in advance of the arising of any withholding obligations. Shares will be valued
at their Fair Market Value when the taxable event occurs. The number of Shares
withheld pursuant to this paragraph 6 will be rounded up to the nearest whole
Share, with no refund provided for any value of the Shares withheld in excess of
the tax obligation as a result of such rounding, all pursuant to such procedures
as the Administrator may specify from time to time.
Notwithstanding any contrary provision of this Agreement, no Shares will be
issued unless and until income, employment and other taxes which the Company
-19-
determines must be withheld or collected with respect to such Shares have been
withheld or collected. In addition and to the maximum extent permitted by law,
the Company (or the employing Parent or Subsidiary) has the right to retain
without notice from salary or other amounts payable to the Employee, cash having
a sufficient value to satisfy any tax withholding obligations that the Company
determines cannot be satisfied through the withholding of otherwise deliverable
Shares. All income and other taxes related to the RSUs and any Shares delivered
in payment thereof are the sole responsibility of the Employee.
7. Rights as Stockholder. Neither the Employee nor any person claiming
under or through the Employee will have any of the rights or privileges of a
stockholder of the Company in respect of any Shares deliverable hereunder unless
and until certificates representing such Shares will have been issued, recorded
on the records of the Company or its transfer agents or registrars, and
delivered to the Employee or Employee's broker.
8. Code Section 409A. Notwithstanding anything in the Plan or this
Agreement to the contrary, if the vesting of the balance, or some lesser portion
of the balance, of the RSUs is accelerated in connection with the Employee's
termination as a Service Provider (provided that such termination is a
"separation from service" within the meaning of Section 409A, as determined by
the Company) and if (x) the Employee is a "specified employee" within the
meaning of Section 409A at the time of such termination and (y) the payment of
such accelerated RSUs will result in the imposition of additional tax under
Section 409A if paid to the Employee on or within the six (6) month period
following the Employee's termination as a Service Provider, then the payment of
such accelerated Awards will not be made until the date six (6) months and one
(1) day following the date of the Employee's termination as a Service Provider,
unless the Employee dies following his or her termination as a Service Provider,
in which case the RSUs will be paid in Shares to the Employee's estate as soon
as practicable following his or her death. It is the intent of this Agreement to
comply with the requirements of Section 409A so that none of the RSUs provided
under this Agreement or Shares issuable thereunder will be subject to the
additional tax imposed under Section 409A, and any ambiguities herein will be
interpreted to so comply.
9. No Effect on Employment. The Employee's employment with the Company
and its Subsidiaries is on an at-will basis only. Accordingly, the terms of the
Employee's employment with the Company and its Subsidiaries will be determined
from time to time by the Company or the Subsidiary employing the Employee (as
the case may be), and the Company or the Subsidiary will have the right, which
is hereby expressly reserved, to terminate or change the terms of the employment
of the Employee at any time for any reason whatsoever, with or without good
cause or notice.
10. Address for Notices. Any notice to be given to the Company under the
terms of this Agreement will be addressed to the Company at 4991 Corporate
Drive, Huntsville, AL 35805, Attn: Stock Administration, or at such other
address as the Company may hereafter designate in writing or electronically.
11. Changes in RSUs. In the event that as a result of a stock or
extraordinary cash dividend, stock split, distribution, reclassification,
recapitalization, combination of Shares or the adjustment in capital stock of
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the Company or otherwise, or as a result of a merger, consolidation, spin-off or
other corporate transaction or event, the RSUs will be increased, reduced or
otherwise affected, and by virtue of any such event the Employee will in his or
her capacity as owner of unvested RSUs which have been awarded to him or her
(the "Prior RSUs") be entitled to new or additional or different shares of
stock, cash or other securities or property (other than rights or warrants to
purchase securities); such new or additional or different shares, cash or
securities or property will thereupon be considered to be unvested RSUs and will
be subject to all of the conditions and restrictions that were applicable to the
Prior RSUs pursuant to this Agreement and the Plan. If the Employee receives
rights or warrants with respect to any Prior RSUs, such rights or warrants may
be held or exercised by the Employee, 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
unvested RSUs and will be subject to all of the conditions and restrictions
which were applicable to the Prior RSUs pursuant to the Plan and 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; provided,
however, that the payment of such accelerated new or additional awards shall be
made in accordance with the timing of payment rules under paragraph 3(c)(i). If
the vesting of all or a portion of such new or additional award accelerates
pursuant to Section 15(c) of the Plan in the event of a Change of Control that
is not a "change in control" within the meaning of Section 409A, the timing of
payment rules that apply to discretionary accelerations under paragraph 3(c)(i)
shall also apply.
12. Grant is Not Transferable. Except to the limited extent provided in
paragraph 5, this grant and the rights and privileges conferred hereby will not
be transferred, assigned, pledged or hypothecated in any way (whether by
operation of law or otherwise) and will not be subject to sale under execution,
attachment or similar process. Upon any attempt to transfer, assign, pledge,
hypothecate or otherwise dispose of this grant, or any right or privilege
conferred hereby, or upon any attempted sale under any execution, attachment or
similar process, this grant and the rights and privileges conferred hereby
immediately will become null and void.
13. Binding Agreement. Subject to the limitation on the transferability of
this grant contained herein, this Agreement will be binding upon and inure to
the benefit of the heirs, legatees, legal representatives, successors and
assigns of the parties hereto.
14. Restrictions on Sale of Securities. The Shares issued as payment for
vested RSUs under this Agreement will be registered under U.S. federal
securities laws and will be freely tradable upon receipt. However, the
Employee's subsequent sale of the Shares may be subject to any market
blackout-period that may be imposed by the Company and must comply with the
Company's insider trading policies, and any other applicable securities laws.
15. Additional Conditions to Issuance of Stock. If at any time the Company
will determine, in its discretion, that the listing, registration or
qualification of the Shares upon any securities exchange or under any state or
federal law, or the consent or approval of any governmental regulatory authority
is necessary or desirable as a condition to the issuance of Shares to the
Employee (or his or her estate), such issuance will not occur unless and until
such listing, registration, qualification, consent or approval will have been
-21-
effected or obtained free of any conditions not acceptable to the Company. The
Company will make all reasonable efforts to meet the requirements of any such
state or federal law or securities exchange and to obtain any such consent or
approval of any such governmental authority.
16. Plan Governs. This Agreement and the Notice of Grant are subject to
all terms and provisions of the Plan. In the event of a conflict between one or
more provisions of this Agreement or the Notice of Grant and one or more
provisions of the Plan, the provisions of the Plan will govern.
17. Administrator Authority. The Administrator will have the power to
interpret the Plan and this Agreement and to adopt such rules for the
administration, interpretation and application of the Plan as are consistent
therewith and to interpret or revoke any such rules (including, but not limited
to, the determination of whether or not any RSUs have vested). All actions taken
and all interpretations and determinations made by the Administrator in good
faith will be final and binding upon Employee, the Company and all other
interested persons. No member of the Administrator will be personally liable for
any action, determination or interpretation made in good faith with respect to
the Plan or this Agreement.
18. Stock Ownership Guidelines. Employee understands and acknowledges that
this Agreement and the right to receive Shares under this RSU Award is subject
to the terms and conditions of the Avocent Corporation Restricted Stock,
Performance Shares, and Stock Ownership General Guidelines as in effect from
time to time and as construed by the Administrator.
19. Captions. Captions provided herein are for convenience only and are
not to serve as a basis for interpretation and construction of this Agreement.
20. Agreement Severable. In the event that any provision of this Agreement
becomes or is declared by a court of competent jurisdiction to be illegal,
unenforceable or void, this Agreement will continue in full force and effect.
21. Modifications to the Agreement. This Agreement constitutes the entire
understanding of the parties on the subjects covered. The Employee expressly
warrants that he or she is not accepting this Agreement in reliance on any
promises, representations, or inducements other than those contained herein.
Modifications to this Agreement or the Plan can be made only in an express
written contract executed by a duly authorized officer of the Company.
Notwithstanding anything to the contrary in the Plan or this Agreement, the
parties agree to work in good faith to revise this Agreement as necessary to
comply with Section 409A or to otherwise avoid imposition of any additional tax
or income recognition under Section 409A in connection to this Award of RSUs.
22. Amendment, Suspension or Termination of the Plan. By accepting this
Award, the Employee expressly warrants that he or she has received an Award of
RSUs under the Plan, and has received, read and understood a description of the
Plan. The Employee understands that the Plan is discretionary in nature and may
be amended, suspended or terminated by the Company at any time.
23. Governing Law. This Agreement shall be governed by the laws of the
State of Alabama, without giving effect to the conflict of law principles
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thereof. For purposes of litigating any dispute that arises under this Award of
RSUs or this Agreement, the parties hereby submit to and consent to the
jurisdiction of the State of Alabama, and agree that such litigation shall be
conducted in the courts of Madison County, Alabama, or the federal courts for
the United States for the Northern District of Alabama, and no other courts,
where this Award of RSUs is made and/or to be performed.
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AVOCENT CORPORATION
2008 INDUCEMENT EQUITY INCENTIVE PLAN
NOTICE OF GRANT OF PERFORMANCE SHARES
Unless otherwise defined herein, the terms defined in the Plan shall have
the same defined meanings in this Notice of Grant.
Name: _______________________
You have been granted _________ Performance Shares. Each such Share is
equivalent to one Share of Common Stock of the Company for purposes of
determining the number of Shares subject to this award. None of the Performance
Shares will be issued to you (nor will you have the rights of a stockholder with
respect to the underlying shares) until the vesting conditions described below
are satisfied. Additional terms of this grant are as follows:
Date of Grant: __________
Vesting Schedule: The Performance Share award to you specified above will be
earned based on [INSERT VESTING SCHEDULE], provided you are employed as a
Service Provider by the Company or a Parent or Subsidiary on each such date.
[Notwithstanding the foregoing, [and even if the financial performance of the
Company for ______ has not then been determined,] all Performance Shares awarded
to you shall be deemed and treated as fully earned and the vesting of all such
Performance Shares shall be deemed and treated as fully accelerated to the same
extent [at the same deemed level of achievement] and on the same terms and
conditions as provided in [any employment agreement entered into on or prior to
the date of grant of this Award] [OR] [the employment agreement dated [______]]
by and between you and the Company (or any of its Subsidiaries).] [OR [ADD OTHER
VESTING ACCELERATION PROVISION]] [BRACKETED PROVISION TO BE INCLUDED FOR GRANTS
WITH VESTING ACCELERATION AS APPROPRIATE.]
You acknowledge and agree that this agreement and the vesting schedule set
forth herein does 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 shall not interfere with your right or the Company's right to terminate
your relationship as a Service Provider at any time, with or without cause.
You hereby agree to accept as binding, conclusive and final all decisions
or interpretations of the Administrator upon any questions relating to the Plan
and this Award.
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By your signature and the signature of the Company's representative below,
you and the Company agree that this Notice of Grant, the form of Performance
Share Agreement attached as Exhibit A hereto and the 2008 Inducement Equity
Incentive Plan constitute your entire agreement with respect to this Award and
may not be modified adversely to your interest except by means of a writing
signed by the Company and you.
GRANTEE: AVOCENT CORPORATION
- ------------------------------- ------------------------------------
Signature By
- -------------------------------- ------------------------------------
Print Name Title
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EXHIBIT A
---------
AVOCENT CORPORATION
2008 INDUCEMENT EQUITY INCENTIVE PLAN
PERFORMANCE SHARE AGREEMENT
1. Grant. The Company hereby grants to the Employee an award of
Performance Shares, as set forth in the Notice of Grant of Performance Shares
and subject to the terms and conditions in this Agreement and the Company's 2008
Inducement Equity Incentive Plan (the "Plan"). Unless otherwise defined herein,
the terms defined in the Plan shall have the same defined meanings in this
Performance Share Agreement.
2. Company's Obligation. Each Performance Share represents the right to
receive a Share on the vesting date (or at such later time indicated in this
Agreement). Unless and until the Performance Shares vest in the manner set forth
in paragraph 3 or Section 15 of the Plan, the Employee will have no right to
receive Shares under such Performance Share. Prior to actual distribution of
Shares pursuant to any vested Performance Shares, such Performance Shares will
represent an unsecured obligation of the Company, payable (if at all) only from
the general assets of the Company.
3. Vesting Schedule and Issuance of Shares.
(a) Subject to paragraphs 4 and 11, and subject to Section 15 of the
Plan, the Performance Shares awarded by this Agreement will vest as to the
number of Shares, and on the dates shown, on the Notice of Grant (each a
"Vesting Date"), [In addition, [and even if the financial performance of the
Company for _______ has not then been determined,] the Performance Shares
awarded under this Agreement will be deemed and treated as fully earned and the
vesting of all such Performance Shares shall be deemed and treated as fully
accelerated to the same extent [at the same deemed level of achievement] and on
the same terms and conditions as provided in [any employment agreement entered
into on or prior to the date of grant of this Award] [OR] [the employment
agreement dated [________]] by and between Employee and the Company (or any of
its Subsidiaries),] [OR [ADD OTHER VESTING ACCELERATION PROVISION]] but only if
the Employee will have been continuously a Service Provider from the date the
Performance Shares awarded by this Agreement were granted until the date such
vesting occurs. If the Employee is not a Service Provider on such date(s), the
Award shall terminate, as set forth in paragraph 4. [BRACKETED PROVISION TO BE
INCLUDED FOR AWARDS WITH ACCELERATED VESTING AS APPROPRIATE.]
(b) As soon as practical upon or following each Vesting Date (but,
except as provided in this Agreement, in no event later than two and one-half (2
1/2) months following the end of the Company's taxable year in which the
applicable Vesting Date occurs), one Share shall be issued for each Performance
Share that vests on such Vesting Date, subject to the terms and provisions of
the Plan and this Agreement.
(c) (i) If the Administrator, in its discretion, accelerates the
vesting of the balance, or some lesser portion of the balance, of the Award, the
payment of such accelerated portion of the Award shall be made as soon as
practicable after the new vesting date, but, except as provided in this
-26-
Agreement, in no event later than two and one-half (2 1/2) months following the
end of the Company's taxable year in which the applicable Vesting Date occurs;
provided, however, if the Award is "deferred compensation" within the meaning of
Section 409A, the payment of such accelerated portion of the Award nevertheless
shall be made at the same time or times as if such Award had vested in
accordance with the vesting schedule set forth in paragraph 3(a), including any
necessary application of paragraph 8 (whether or not the Employee remains
employed by the Company or a Parent or Subsidiary of the Company as of such
date(s)), unless an earlier payment date, in the judgment of the Administrator,
would not cause the Employee to incur an additional tax under Section 409A, in
which case, payment of such accelerated Award shall be made within two and
one-half (2 1/2) months following the earliest permissible payment date that
would not cause the Employee to incur an additional tax under Section 409A,
subject to paragraph 8 with respect to specified employees. Notwithstanding the
foregoing, any delay in payment pursuant to this paragraph 3(c) will cease upon
the Employee's death and such payment will be made as soon as practicable after
the date of Employee's death. For purposes of this Agreement, "Section 409A"
means Section 409A of the Internal Revenue Code of 1986, as amended, and any
proposed, temporary or final Treasury Regulations and Internal Revenue Service
guidance thereunder, as each may be amended from time to time.
(ii) If the vesting of all or a portion of this Award accelerates
pursuant to Section 15(c) of the Plan in the event of a Change of Control that
is not a "change in control" within the meaning of Section 409A, the timing of
payment rules that apply to discretionary accelerations under paragraph 3(c)(i)
shall also apply.
(d) No fractional Shares shall be issued under this Agreement.
4. Forfeiture upon Termination as Service Provider. Except as set forth
in paragraph 3, if the Employee terminates service as a Service Provider for any
or no reason prior to vesting, the unvested Performance Shares awarded by this
Agreement will thereupon be forfeited and automatically transferred to and
reacquired by the Company at no cost to the Company and the Employee's right to
acquire any Shares hereunder will immediately terminate.
5. Payments after Death. Any distribution or delivery to be made to the
Employee under this Agreement will, if the Employee is then deceased, be made to
the administrator or executor of the Employee's estate. Any such administrator
or executor 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.
6. Withholding of Taxes. The Company (or the employing Parent or
Subsidiary) will withhold from the number of Shares otherwise issuable under
this Award a number of Shares that have an aggregative market value sufficient
to pay the minimum statutorily required federal, state and local tax withholding
obligations, unless the Company, in its sole discretion, requires the Employee
to make alternate arrangements satisfactory to the Company for such withholdings
in advance of the arising of any withholding obligations. Shares will be valued
at their Fair Market Value when the taxable event occurs. The number of Shares
withheld pursuant to this paragraph 6 will be rounded up to the nearest whole
Share, with no refund provided for any value of the Shares withheld in excess of
-27-
the tax obligation as a result of such rounding, all pursuant to such procedures
as the Administrator may specify from time to time.
Notwithstanding any contrary provision of this Agreement, no Shares will be
issued unless and until income, employment and other taxes which the Company
determines must be withheld or collected with respect to such Shares have been
withheld or collected. In addition and to the maximum extent permitted by law,
the Company (or the employing Parent or Subsidiary) has the right to retain
without notice from salary or other amounts payable to the Employee, cash having
a sufficient value to satisfy any tax withholding obligations that the Company
determines cannot be satisfied through the withholding of otherwise deliverable
Shares. All income and other taxes related to the Performance Shares and any
Shares delivered in payment thereof are the sole responsibility of the Employee.
7. Rights as Stockholder. Neither the Employee nor any person claiming
under or through the Employee will have any of the rights or privileges of a
stockholder of the Company in respect of any Shares deliverable hereunder unless
and until certificates representing such Shares will have been issued, recorded
on the records of the Company or its transfer agents or registrars, and
delivered to the Employee or Employee's broker.
8. Code Section 409A. Notwithstanding anything in the Plan or this
Agreement to the contrary, if the vesting of the balance, or some lesser portion
of the balance, of the Performance Shares is accelerated in connection with the
Employee's termination as a Service Provider (provided that such termination is
a "separation from service" within the meaning of Section 409A, as determined by
the Company) and if (x) the Employee is a "specified employee" within the
meaning of Section 409A at the time of such termination and (y) the payment of
such accelerated Performance Shares will result in the imposition of additional
tax under Section 409A if paid to the Employee on or within the six (6) month
period following the Employee's termination as a Service Provider, then the
payment of such accelerated Awards will not be made until the date six (6)
months and one (1) day following the date of the Employee's termination as a
Service Provider, unless the Employee dies following his or her termination as a
Service Provider, in which case the Performance Shares will be paid in Shares to
the Employee's estate as soon as practicable following his or her death. It is
the intent of this Agreement to comply with the requirements of Section 409A so
that none of the Performance Shares provided under this Agreement or Shares
issuable thereunder will be subject to the additional tax imposed under Section
409A, and any ambiguities herein will be interpreted to so comply.
9. No Effect on Employment. The Employee's employment with the Company
and its Subsidiaries is on an at-will basis only. Accordingly, the terms of the
Employee's employment with the Company and its Subsidiaries will be determined
from time to time by the Company or the Subsidiary employing the Employee (as
the case may be), and the Company or the Subsidiary will have the right, which
is hereby expressly reserved, to terminate or change the terms of the employment
of the Employee at any time for any reason whatsoever, with or without good
cause or notice.
10. Address for Notices. Any notice to be given to the Company under the
terms of this Agreement will be addressed to the Company at 4991 Corporate
Drive, Huntsville, AL 35805, Attn: Stock Administration, or at such other
address as the Company may hereafter designate in writing or electronically.
-28-
11. Changes in Performance Shares. In the event that as a result of a
stock or extraordinary cash dividend, stock split, distribution,
reclassification, recapitalization, combination of Shares or the adjustment in
capital stock of the Company or otherwise, or as a result of a merger,
consolidation, spin-off or other corporate transaction or event, the Performance
Shares will be increased, reduced or otherwise affected, and by virtue of any
such event the Employee will in his or her capacity as owner of unvested
Performance Shares which have been awarded to him or her (the "Prior Performance
Shares") be entitled to new or additional or different shares of stock, cash or
other securities or property (other than rights or warrants to purchase
securities); such new or additional or different shares, cash or securities or
property will thereupon be considered to be unvested Performance Shares and will
be subject to all of the conditions and restrictions that were applicable to the
Prior Performance Shares pursuant to this Agreement and the Plan. If the
Employee receives rights or warrants with respect to any Prior Performance
Shares, such rights or warrants may be held or exercised by the Employee,
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 unvested Performance Shares and will be
subject to all of the conditions and restrictions which were applicable to the
Prior Performance Shares pursuant to the Plan and 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; provided,
however, that the payment of such accelerated new or additional awards shall be
made in accordance with the timing of payment rules under paragraph 3(c)(i). If
the vesting of all or a portion of such new or additional award accelerates
pursuant to Section 15(c) of the Plan in the event of a Change of Control that
is not a "change in control" within the meaning of Section 409A, the timing of
payment rules that apply to discretionary accelerations under paragraph 3(c)(i)
shall also apply.
12. Grant is Not Transferable. Except to the limited extent provided in
paragraph 5, this grant and the rights and privileges conferred hereby will not
be transferred, assigned, pledged or hypothecated in any way (whether by
operation of law or otherwise) and will not be subject to sale under execution,
attachment or similar process. Upon any attempt to transfer, assign, pledge,
hypothecate or otherwise dispose of this grant, or any right or privilege
conferred hereby, or upon any attempted sale under any execution, attachment or
similar process, this grant and the rights and privileges conferred hereby
immediately will become null and void.
13. Binding Agreement. Subject to the limitation on the transferability of
this grant contained herein, this Agreement will be binding upon and inure to
the benefit of the heirs, legatees, legal representatives, successors and
assigns of the parties hereto.
14. Restrictions on Sale of Securities. The Shares issued as payment for
vested Performance Shares under this Agreement will be registered under U.S.
federal securities laws and will be freely tradable upon receipt. However, the
Employee's subsequent sale of the Shares may be subject to any market
blackout-period that may be imposed by the Company and must comply with the
Company's insider trading policies, and any other applicable securities laws.
15. Additional Conditions to Issuance of Stock. If at any time the Company
will determine, in its discretion, that the listing, registration or
qualification of the Shares upon any securities exchange or under any state or
federal law, or the consent or approval of any governmental regulatory authority
-29-
is necessary or desirable as a condition to the issuance of Shares to the
Employee (or his or her estate), such issuance will not occur unless and until
such listing, registration, qualification, consent or approval will have been
effected or obtained free of any conditions not acceptable to the Company. The
Company will make all reasonable efforts to meet the requirements of any such
state or federal law or securities exchange and to obtain any such consent or
approval of any such governmental authority.
16. Plan Governs. This Agreement and the Notice of Grant are subject to
all terms and provisions of the Plan. In the event of a conflict between one or
more provisions of this Agreement or the Notice of Grant and one or more
provisions of the Plan, the provisions of the Plan will govern.
17. Administrator Authority. The Administrator will have the power to
interpret the Plan and this Agreement and to adopt such rules for the
administration, interpretation and application of the Plan as are consistent
therewith and to interpret or revoke any such rules (including, but not limited
to, the determination of whether or not any Performance Shares have vested). All
actions taken and all interpretations and determinations made by the
Administrator in good faith will be final and binding upon Employee, the Company
and all other interested persons. No member of the Administrator will be
personally liable for any action, determination or interpretation made in good
faith with respect to the Plan or this Agreement.
18. Stock Ownership Guidelines. Employee understands and acknowledges that
this Agreement and the right to receive Shares under this Performance Share
Award is subject to the terms and conditions of the Avocent Corporation
Restricted Stock, Performance Shares, and Stock Ownership General Guidelines as
in effect from time to time and as construed by the Administrator.
19. Captions. Captions provided herein are for convenience only and are
not to serve as a basis for interpretation and construction of this Agreement.
20. Agreement Severable. In the event that any provision of this Agreement
becomes or is declared by a court of competent jurisdiction to be illegal,
unenforceable or void, this Agreement will continue in full force and effect.
21. Modifications to the Agreement. This Agreement constitutes the entire
understanding of the parties on the subjects covered. The Employee expressly
warrants that he or she is not accepting this Agreement in reliance on any
promises, representations, or inducements other than those contained herein.
Modifications to this Agreement or the Plan can be made only in an express
written contract executed by a duly authorized officer of the Company.
Notwithstanding anything to the contrary in the Plan or this Agreement, the
parties agree to work in good faith to revise this Agreement as necessary to
comply with Section 409A or to otherwise avoid imposition of any additional tax
or income recognition under Section 409A in connection to this Award of
Performance Shares.
22. Amendment, Suspension or Termination of the Plan. By accepting this
Award, the Employee expressly warrants that he or she has received an Award of
Performance Shares under the Plan, and has received, read and understood a
description of the Plan. The Employee understands that the Plan is discretionary
in nature and may be amended, suspended or terminated by the Company at any
time.
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23. Governing Law. This Agreement shall be governed by the laws of the
State of Alabama, without giving effect to the conflict of law principles
thereof. For purposes of litigating any dispute that arises under this Award of
RSUs or this Agreement, the parties hereby submit to and consent to the
jurisdiction of the State of Alabama, and agree that such litigation shall be
conducted in the courts of Madison County, Alabama, or the federal courts for
the United States for the Northern District of Alabama, and no other courts,
where this Award of RSUs is made and/or to be performed.
-31-