SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Under the proxy rules of the SEC, a person who directly or indirectly has or shares voting power or investment power with respect to a
security is considered a beneficial owner of the security. Voting power is the power to vote or direct the voting of shares, and investment power is the power to dispose of or direct the disposition
of shares. Shares as to which voting power or investment power may be acquired within 60 days are also considered as beneficially owned under the proxy rules.
The
following table sets forth certain information as of February 28, 2014, regarding beneficial ownership of our Common Stock by: (i) each person who is known to us to own
beneficially more than five percent of our Common Stock; (ii) each of our current directors; (iii) each of the named executive officers in the Summary Compensation Table of this annual
report; and (iv) the total for our current directors and current executive officers as a group. The information on beneficial ownership in the table and the footnotes is based upon our records
and the most recent Schedule 13D or 13G filed by each such person or entity and information supplied to us by such person or entity. Unless otherwise indicated, each person has sole voting
power and sole investment power with respect to all shares beneficially owned, subject to community property laws where applicable. Shares subject to options which are exercisable within
60 days of February 28, 2014 are deemed to be outstanding and to be
beneficially owned by the person holding such options for the purpose of computing the percentage ownership of such person, but are not deemed to be outstanding and to be beneficially owned for the
purpose of computing the percentage ownership of any other person.
45
Table of Contents
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
|
|
|
|
|
|
|
|
|
|
|
Name or Group of Beneficial Owners
|
|
Number of
Shares
Beneficially
Owned
|
|
Options
Exercisable
in
60 days
|
|
Percentage of
Shares
Beneficially
Owned(1)
|
|
FMR LLC(2)
|
|
|
11,788,381
|
|
|
|
|
|
10.4
|
%
|
245 Summer Street
|
|
|
|
|
|
|
|
|
|
|
Boston, MA 02210
|
|
|
|
|
|
|
|
|
|
|
Waddell & Reed Financial(3)
|
|
|
8,923,029
|
|
|
|
|
|
7.9
|
%
|
6300 Lamar Avenue
|
|
|
|
|
|
|
|
|
|
|
Overland Park, KS 66202
|
|
|
|
|
|
|
|
|
|
|
PRIMECAP Management Company(4)
|
|
|
8,622,322
|
|
|
|
|
|
7.6
|
%
|
225 South Lake Avenue, #400
|
|
|
|
|
|
|
|
|
|
|
Pasadena, CA 91101
|
|
|
|
|
|
|
|
|
|
|
The Vanguard Group(5)
|
|
|
6,855,933
|
|
|
|
|
|
6.0
|
%
|
100 Vanguard Boulevard
|
|
|
|
|
|
|
|
|
|
|
Malvern, PA 19355
|
|
|
|
|
|
|
|
|
|
|
BlackRock, Inc(6)
|
|
|
6,272,165
|
|
|
|
|
|
5.5
|
%
|
40 East 52nd Street
|
|
|
|
|
|
|
|
|
|
|
New York, NY 10022
|
|
|
|
|
|
|
|
|
|
|
Ronald Black
|
|
|
325,716
|
|
|
302,321
|
|
|
*
|
|
Satish Rishi(7)
|
|
|
627,221
|
|
|
486,573
|
|
|
*
|
|
Martin Scott
|
|
|
425,552
|
|
|
365,097
|
|
|
*
|
|
Jae Kim
|
|
|
45,787
|
|
|
39,709
|
|
|
*
|
|
Kevin Donnelly
|
|
|
413,346
|
|
|
337,137
|
|
|
*
|
|
Laura Stark
|
|
|
382,627
|
|
|
320,257
|
|
|
*
|
|
J. Thomas Bentley(8)
|
|
|
196,613
|
|
|
92,917
|
|
|
*
|
|
Penelope A. Herscher(9)
|
|
|
100,799
|
|
|
60,000
|
|
|
*
|
|
Charles Kissner(10)
|
|
|
29,166
|
|
|
16,666
|
|
|
*
|
|
David Shrigley
|
|
|
126,613
|
|
|
60,000
|
|
|
*
|
|
Eric Stang(11)
|
|
|
86,613
|
|
|
40,000
|
|
|
*
|
|
All current directors and executive officers as a group (11 persons)
|
|
|
2,760,053
|
|
|
2,120,677
|
|
|
2.4
|
%
|
Shares Outstanding as of February 28, 2014
|
|
|
|
|
|
|
|
|
113,656,508
|
|
-
*
-
(Less
than 1%)
-
(1)
-
Percentage
of shares beneficially owned is based on 113,656,508 shares outstanding as of February 28, 2014.
-
(2)
-
As
reported on Schedule 13G/A on February 14, 2014. The Schedule 13G/A was filed jointly on behalf of FMR LLC, Edward C. Johnson
3d, Fidelity Management & Research Company and Fidelity Growth Company Fund in connection with the beneficial ownership of the Common Stock of Rambus Incorporated.
-
(3)
-
As
reported on Schedule 13G on February 7, 2014. The Schedule 13G was filed jointly on behalf of Waddell & Reed
Financial Inc., Waddell & Reed Financial Services, Inc., Waddell & Reed, Inc., Waddell & Reed Investment Management Company and Ivy Investment Management
Company in connection with the beneficial ownership of the Common Stock of Rambus Incorporated.
-
(4)
-
As
reported on Schedule 13G/A on February 14, 2014.
-
(5)
-
As
reported on Schedule 13G/A on February 12, 2014.
46
Table of Contents
-
(6)
-
As
reported on Schedule 13G/A on January 30, 2014.
-
(7)
-
Includes
700 shares held in custodial account for which Mr. Rishi serves as custodian and 3,000 shares held in trust for which Mr. Rishi
serves as a trustee.
-
(8)
-
Includes
76,613 shares held in trust for which Mr. Bentley serves as a trustee and 20,000 shares held in partnership for which Mr. Bentley
serves as a partner.
-
(9)
-
Includes
40,799 shares held in trust for which Ms. Herscher serves as a trustee.
-
(10)
-
Includes
12,500 shares held under an LLC for which Mr. Kissner serves as owner.
-
(11)
-
Includes
46,613 shares held in trust for which Mr. Stang serves as a trustee.
47
Table of Contents
EXECUTIVE OFFICERS OF THE COMPANY
Information regarding our executive officers and their ages and positions as of February 28, 2014, is contained in the table
below. Our executive officers are appointed by, and serve at the discretion of, our Board of Directors. There is no family relationship between any of our executive officers.
|
|
|
|
|
|
Ronald Black, Ph.D.
|
|
|
50
|
|
Chief Executive Officer and President. Dr. Black has served as our chief executive officer and president since June 2012 and as a director since July 2012. Dr. Black was previously the Managing Director of
R.D. Black & Company, a consulting firm, since August 2011. From September 2010 to August 2011, Dr. Black was the Chief Executive Officer of MobiWire, formerly Sagem Wireless, a privately-held mobile handset company headquartered
near Paris, France that offers products and services to original equipment manufacturers and mobile network operators in the mobile phone marketplace. From June 2009 to October 2010, Dr. Black served as Chairman and CEO of UPEK, Inc.
Dr. Black currently serves as a board member EnOcean GmbH, a German-based company that manufactures and markets energy harvesting technology, sensors, and radio frequency communication. From September 2010 to November 2012, he served as a
board member of AuthenTec, Inc., which he joined following the AuthenTec-UPEK merger in September 2010 and from 2007 to 2013, he served as a board member of Inside Contactless, a France-based company engaged in the semiconductors and information
technology industry. From September 2004 to June 2009, he was chief executive officer of Wavecom S.A., a publicly traded French wireless solutions company. Dr. Black holds a Bachelor of Science, a Masters of Science, and a Ph.D. in
materials science and engineering from Cornell University in Ithaca, N.Y.
|
Kevin Donnelly
|
|
|
52
|
|
Senior Vice President, GM, Memory & Interfaces. Mr. Donnelly joined us in 1993. Mr. Donnelly has served in his
current position since August 2012. From November 2008 to August 2012, Mr. Donnelly served as Senior Vice President, IP Strategy, from March 2006 to November 2008, as Senior Vice President, Engineering and from January 2005 to March 2006, as
co-vice president of Engineering. From October 2002 to January 2005 he served as vice president, Logic Interface Division. Mr. Donnelly held various engineering and management positions before becoming vice president, Logic Interface Division in
October 2002. Before joining us, Mr. Donnelly held engineering positions at National Semiconductor, Sipex, and Memorex, over an eight year period. He holds a B.S. in Electrical Engineering and Computer Sciences from the University of California,
Berkeley, and an M.S. in Electrical Engineering from San Jose State University.
|
48
Table of Contents
|
|
|
|
|
|
Jae Kim
|
|
|
43
|
|
Senior Vice President, General Counsel and Secretary. Mr. Kim has served as the senior vice president, general counsel and secretary since
February 2013 and as our vice president, corporate legal since joining us in July 2010. Prior to his tenure at Rambus, Mr. Kim held senior legal positions at Aricent Inc., a privately-held communications technology company and Electronics
for Imaging Inc., a digital printing technology company. Mr. Kim has also had significant experience in private practice with the law firm of Wilson Sonsini Goodrich & Rosati, P.C., where he advised high technology and emerging
growth companies on mergers and acquisitions, private financings, public offerings, securities compliance, public company reporting and corporate governance. Mr. Kim began his legal career as an attorney with the United States Securities and
Exchange Commission, Division of Corporation Finance, in Washington, DC. Mr. Kim is a member of both the California State Bar and New York State Bar, and received a J.D. from the American University, Washington College of Law, and his bachelor's
degree from Boston University.
|
Satish Rishi
|
|
|
54
|
|
Senior Vice President, Finance and Chief Financial Officer. Mr. Rishi joined us in his current position in April 2006. Prior
to joining us, Mr. Rishi held the position of executive vice president of Finance and chief financial officer of Toppan Photomasks, Inc., (formerly DuPont Photomasks, Inc.) one of the world's leading photomask providers, from November
2001 to April 2006. During his 27-year career, Mr. Rishi has held senior financial management positions at semiconductor and electronic manufacturing companies. He served as vice president and assistant treasurer at Dell Inc. Prior to Dell,
Mr. Rishi spent 13 years at Intel Corporation, where he held financial management positions both in the United States and overseas, including assistant treasurer. Mr. Rishi holds a B.S. with honors in Mechanical Engineering from Delhi
University in Delhi, India and an M.B.A. from the University of California at Berkeley's Haas School of Business. He also serves as a director of Measurement Specialties, Inc.
|
49
Table of Contents
|
|
|
|
|
|
Martin Scott, Ph.D.
|
|
|
58
|
|
Senior Vice President, Chief Technology Officer. Dr. Scott has served in his current position since August 2012. From August 2010 until
August 2012, Dr. Scott served as our Senior Vice President, GM, New Business Group and from December 2006 to August 2010, as our Senior Vice President, Engineering. Dr. Scott joined us from PMC-Sierra, Inc., a provider of broadband
communications and storage integrated circuits, where he was most recently vice president and general manager of its Microprocessor Products Division from March 2006. Dr. Scott was the vice president and general manager for the
I/O Solutions Division (which was purchased by PMC-Sierra) of Avago Technologies Limited, an analog and mixed signal semiconductor components and subsystem company, from October 2005 to March 2006. Dr. Scott held various positions at
Agilent Technologies, including as vice president and general manager for the I/O Solutions division from October 2004 to October 2005, when the division was purchased by Avago Technologies, vice president and general manager of the ASSP Division
from March 2002 until October 2004, and, before that, Network Products operation manager. Dr. Scott started his career in 1981 as a member of the technical staff at Hewlett Packard Laboratories and held various management positions at Hewlett
Packard and was appointed ASIC business unit manager in 1998. He earned a B.S. from Rice University and holds both an M.S. and Ph.D. from Stanford University.
|
Laura Stark
|
|
|
45
|
|
Senior Vice President, Corporate Strategy and M&A. Ms. Stark has served in her current position since August 2012. From
April 2008 to August 2012, Ms. Stark served as Senior Vice President, Corporate Development, from February 2005 to April 2008 as Senior Vice President, Platform Solutions and from October 2002 to February 2005 as vice president, Memory Interface
Division. Ms. Stark held various business and management positions before becoming vice president, Memory Interface Division in October 2002. Prior to joining us, Ms. Stark held various positions in the semiconductor products division of
Motorola, a communications equipment company, during a six year tenure, including technical sales engineer for the Apple sales team and field application engineer for the Sun and SGI sales teams. Ms. Stark holds a B.S. in Electrical Engineering
from the Massachusetts Institute of Technology.
|
50
Table of Contents
EXECUTIVE COMPENSATION
COMPENSATION DISCUSSION & ANALYSIS
This Compensation Discussion and Analysis ("CD&A") describes our 2013 compensation policies, programs, and decisions for our Named
Executive Officers ("NEOs"). Our named executive officers for 2013 were:
-
-
Ronald Black, Chief Executive Officer and President;
-
-
Satish Rishi, Senior Vice President, Finance and Chief Financial Officer;
-
-
Martin Scott, Senior Vice President and Chief Technology Officer;
-
-
Jae Kim, Senior Vice President, General Counsel, and Secretary; and
-
-
Kevin Donnelly, Senior Vice President, GM, Memory and Interfaces.
This
report is organized as follows:
-
1.
-
Executive
Summary
-
2.
-
Our
Compensation Philosophy
-
3.
-
NEO
compensation process
-
4.
-
Components
of NEO compensation
-
5.
-
Other
policies and elements of NEO compensation
EXECUTIVE SUMMARY
In 2013, we signed patent license agreements with customers for aggregate revenues of up to $1.2 billion to be paid over the
next ten years. We put behind us years of legal disputes, settling all outstanding litigation with SK hynix and Micron, and entering into license agreements with each of them, as we did with Samsung
in 2010. In addition, we re-signed Samsung and extended the term of the patent license to 2023. We also entered into license agreements with ST Microelectronics and LSI Logic which resolved all
outstanding litigation initiated in 2010 with the International Trade Commission. Our 2013 business results included:
-
-
$271.5 million in annual revenue;
-
-
Reduced marketing, general and administrative expenses by $36.2 million in 2013 compared to 2012;
-
-
Share price increase of 81% in 2013; and
-
-
Patent portfolio growth to, at year-end, 1,837 patents and 837 pending applications.
51
Table of Contents
The advisory vote on executive compensation at our 2013 annual meeting received 91% favorable votes from our shareholders. The
Compensation Committee is committed to ensuring that the Company's compensation programs are consistent with the Company's pay for performance philosophy and deliver appropriate results given Company
financial performance and business conditions. Based on discussions in 2013 with representative shareholders, we believe a majority of favorable votes were cast at our 2013 annual meeting to express
satisfaction with our pay for performance philosophy, our new executive leadership and the potential for the recovery of our stock price that did in fact begin in 2013. During the course of our 2013
proxy season, we continued to engage in ongoing discussions with institutional investors to gather input and feedback on our executive compensation program. Shareholder feedback will remain an
important input into the Compensation Committee's work on the compensation programs for the Company.
OUR COMPENSATION PHILOSOPHYPAY FOR PERFORMANCE
Our NEO compensation program is designed to align NEO compensation to business objectives and company financial performance and to
motivate NEOs to enhance long-term shareholder value. The principal components of our executive compensation in 2013 were equity incentive awards, base salary and annual variable cash incentive
awards. By allocating a significant portion of NEO total compensation to equity incentive compensation and variable pay, more than 72% for our CEO and at least 59% of our NEOs 2013 total actual direct
compensation was subject to the Company's financial performance and share price growth. 2013 equity incentive awards for our NEOs consisted primarily of time-based stock options. As a result, our
executives will realize value from these annual equity compensation grants only to the extent that our shareholders experience increases in share price. RSU grants were also made to our CEO and
General Counsel for specific reasons outlined later in this CD&A.
52
Table of Contents
The table below provides a summary of compensation for the NEOs over the last three years. In 2013, average NEO compensation increased
by 25%, while our stock price increased by 81%.
Total NEO Pay for Performance(1)
-
(1)
-
Excludes
CEO compensationit is non-comparable between the each of the years shown as Dr. Black received new hire stock options in 2012.
Total NEO compensation for each of the years shown in the chart is for individuals who are NEOs for the respective year and who are employed as of the respective fiscal year end.
53
Table of Contents
For 2013, we measured our annual financial performance using pro forma operating income (described in more detail in the "Components of
NEO Compensation" section). Pro forma operating income is a non-GAAP measure that we believe is a meaningful measure of the Company's core financial performance that supports our short-term and
long-term business objectives. The total 2013 NEO annual CIP incentive payout pool was funded at 130% of the target bonus amount pursuant to the CIP.
Alignment of Annual Bonus Payments with Performance
2012-2013
54
Table of Contents
Since the pay mix for our NEOs is heavily weighted towards options, our NEOs experience growth in the realizable value of their awards
only when the share price increases. We define realizable value of an option as the difference between the current share price and the exercise price of the option and we define realizable value of an
RSU as simply the share price, rather than the grant date fair value (GDFV) as calculated for the Grants of Plan Based Awards Table.
From
January 2, 2013 to December 31, 2013, our stock price increased 81% (from a closing price on NASDAQ of $5.24 on January 2, 2013 to a closing price on NASDAQ of
$9.47 on December 31, 2013). The chart below shows the percentage change in the daily closing price of a share of our common stock on NASDAQ from January 2, 2013 through
December 31, 2013, using the January 2, 2013 closing price as the base price.
Rambus Stock Price Percentage Change
1/2/2013 - 12/31/2013
55
Table of Contents
The
realizable value of our NEOs option awards has increased accordingly. The chart below illustrates how the realizable value from the FY2012 annual option awards as of
December 31, 2013 is lower than the reported GDFV while the realizable value of the FY2013 annual option awards as of December 31, 2013 is higher than the reported GDFV. In total, the
sum of the GDFV ($6.21 per option) aligns to the realizable value as of December 31, 2013 ($6.17 per option), signifying that the awards are delivering approximately the value that was reported
in the proxy as compensation. We believe that this relationship is appropriate given the increase in share price during 2013.
Realizable Value of Annual Option Awards
NEO COMPENSATION PROCESS
The Compensation Committee is responsible for determining and approving CEO compensation, approving compensation recommendations for
NEOs, recommending to the Board changes to the non-employee director compensation program, approving the overall levels of equity to be granted each year, and determining the amount of funding that
will be available for CIP, among other duties expressed in its charter. In performing these duties, the Compensation Committee evaluates the performance of the CEO, and reviews and evaluates the
existing NEO compensation programs. The Compensation Committee has the authority to obtain advice and assistance from internal or external compensation consultants, attorneys, accountants, and other
advisers. In 2013, the Compensation Committee continued to retain Semler Brossy Consulting Group, LLC (SBCG) to assist in evaluating executive and director compensation. SBCG reports directly
to the Compensation Committee, and works collaboratively with management and the Compensation Committee. Pursuant to SEC rules, the Compensation Committee has assessed the independence of SBCG, and
concluded that no conflict of interest exists that would prevent SBCG from independently representing the Compensation Committee. SBCG does not perform other services for the Company, and will not do
so without the prior consent of the Compensation Committee. SBCG meets with the Compensation Committee outside the presence of management.
56
Table of Contents
In
2013, the Compensation Committee considered several factors to ensure that compensation packages were consistent with our pay for performance philosophy and that we remain competitive
in the market for talent. Market compensation levels and individual leadership and performance assessments were
important factors considered in the decision-making process. Additional factors considered included job scope, individual skills/experience, relative importance of the individual's role, internal pay
equity, historical pay levels and equity holdings, and recent Company performance.
In
2013, the Compensation Committee reviewed comprehensive performance assessments of the NEOs and conducted a review of the CEO's performance. This assessment included pre-established
strategic objectives and review of direct feedback from managers, peers and subordinates. The Compensation Committee also held an annual joint meeting with the Corporate Governance/Nominating
Committee to review and discuss Company leadership development, performance objectives and emergency and long-term succession planning.
Each year, the CEO and the Senior Vice President of Human Resources present to the Compensation Committee annual performance reviews
and compensation recommendations for the NEOs. Management personnel works with SBCG to prepare compensation information and assessments.
In
addition, once the Compensation Committee determines the amount of funding available for CIP, the CEO allocates this funding to each operating or business unit of the Company. The CEO
then measures the operating or business unit's achievement levels against the unit's specific performance milestones in relation to the Company's overall performance targets, and recommends a specific
CIP award for each NEO. The Compensation Committee reviews and approves the CEO's proposed CIP award for each NEO.
Each year, SBCG, together with senior members of our Human Resources department, defines and assesses the appropriateness of a group of
similarly situated companies, referred to as the Compensation Peer Group, for purposes of assisting the Compensation Committee to determine whether the total compensation opportunity available to our
NEOs is appropriate and competitive. The Compensation Committee reviews and approves the Compensation Peer Group as recommended by management and SBCG. The 2013 Compensation Peer Group consisted of 16
companies selected based on a number of key attributes, including revenue, technological complexity, industry and business characteristics, market capitalization and number of employees.
|
|
|
|
|
Applied Micro Circuits Corporation
|
|
Integrated Device Technology, Inc.
|
|
Ruckus Wireless Inc.
|
Cavium Networks, Inc.
|
|
Integrated Silicon Solution
|
|
Semtech Corporation
|
Cymer, Inc.
|
|
Monolithic Power Systems
|
|
Silicon Image, Inc.
|
DSP Group, Inc.
|
|
InterDigital, Inc.
|
|
Silicon Laboratories Inc.
|
FormFactor, Inc.
|
|
OmniVision Technologies, Inc.
|
|
Tessera Technologies, Inc.
|
|
|
PMC-Sierra, Inc.
|
|
|
The
Compensation Committee also reviewed data from the Radford Select Executive Compensation Report to supplement the publicly available Compensation Peer Group data.
The
Board of Directors annually evaluates the independence of its members as well as the members of its committees.
57
Table of Contents
COMPONENTS OF NEO COMPENSATION
The Company's executive compensation program consists of the following components:
-
-
Annual Base Salary
-
-
Annual Variable Cash CompensationCorporate Incentive Plan (CIP)
-
-
Equity Incentive Compensation
The Compensation Committee evaluates base salaries for the NEOs on an annual basis. The Compensation Committee considers a number of
factors, including the NEO's salary history, current compensation levels, responsibilities, experience, individual and Company performance, and market information when determining and approving NEO
salary increases. The Compensation Committee also reviews potential changes in CIP and equity payouts when considering changes in base salary.
For
2013, the Compensation Committee approved no increases in the base salary for our NEOs.
For
2014, the Compensation Committee approved an increase in the base salary for Mr. Kim to reflect superior individual performance as well as a recent upward trend in
compensation levels for general counsels among our peers. No other NEOs received increases in base salary levels for 2014.
For 2013, the CIP provided cash incentives to NEOs based upon the achievement of specific levels of Company performance. The CIP is
used for all eligible employees at the Company. The total target opportunity for NEOs under the 2013 CIP was based on Company performance as measured against the established operating targets.
For
2013, the Compensation Committee approved no increases in target annual cash incentives for our NEOs.
For
2014, the Compensation Committee approved increases in target annual cash incentives for Dr. Black, Mr. Donnelly and Mr. Kim. These increases were made to
reflect individual performance as well as recent market trends.
We used pro forma operating income as the measurement of the Company's financial performance for the purposes of the 2013 CIP. Pro
forma operating income is a non-GAAP measure that consists of GAAP operating income, excluding stock-based compensation expense, amortization expense, costs of restatement and related legal expenses,
certain acquisition related expenses, retention bonuses and certain other one-time or extraordinary expenses or credits. One-time or extraordinary expense or income items may be excluded at the
Compensation Committee's discretion. The Company believes that pro forma operating income provided a meaningful measure of core financial performance and supports our short-term and long-term business
objectives.
In
2013, the NEOs participated in the 2013 CIP for their annual variable cash compensation on the same terms as other participants.
2013 pro forma operating income was $98.8 million, above the annual target of $76.0 million. Based on the Company's
financial performance, the CIP was funded at 130% of target. CIP payouts for NEOs ranged from 121% to 175% of target.
58
Table of Contents
2013 CIP Payouts
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2013 CIP Target
|
|
2013 CIP Payouts
|
|
Executive
|
|
2013 CIP
Target
|
|
% of
Base
Salary
|
|
Total 2013
CIP Payout
|
|
% of Total
Target
CIP
|
|
Ronald Black
|
|
$
|
515,000
|
|
|
100.0
|
%
|
$
|
669,500
|
|
|
130.0
|
%
|
Satish Rishi
|
|
$
|
280,000
|
|
|
86.2
|
%
|
$
|
364,000
|
|
|
130.0
|
%
|
Martin Scott
|
|
$
|
310,000
|
|
|
92.5
|
%
|
$
|
375,100
|
|
|
121.0
|
%
|
Jae Kim
|
|
$
|
200,000
|
|
|
72.7
|
%
|
$
|
350,000
|
|
|
175.0
|
%
|
Kevin Donnelly
|
|
$
|
220,000
|
|
|
73.3
|
%
|
$
|
295,900
|
|
|
134.5
|
%
|
The Compensation Committee reviews market information, external competitive circumstances, overall ownership and vesting schedules of
existing equity held by the NEO and each NEO's performance and contribution during the completed fiscal year to determine annual equity awards.
The Compensation Committee annually evaluates the structure of the equity compensation program, including the type of awards used and
the allocation of stock options and restricted stock units to ensure that grants appropriately support our strategic and financial objectives.
NEO
annual equity awards granted in February 2013 were in the form of stock options, moving away from the previous practice of an allocation between stock options and RSUs. In
determining these grants, the Compensation Committee considered a number of factors, consistent with the approach described above, including particular focus on individual performance and the stock
price levels.
NEO
annual equity awards granted in February 2014 were in the form of stock options. In determining these grants, the Compensation Committee considered, among other factors, each NEO's
performance in 2013, as well as the significant increase in our stock price during this period.
Dr. Black received an award of 44,292 RSUs in February 2013, pursuant to the Compensation Committee's request that
Dr. Black's 2012 CIP payout be denominated in RSUs instead of cash.
Mr. Kim
received an award of 5,000 RSUs in February 2013, prior to his appointment as General Counsel. This award was an annual award in his former position as Vice President of
Corporate Legal.
OTHER POLICIES AND ELEMENTS OF NEO COMPENSATION
We do not provide any perquisites to NEOs that are not generally available to the broad employee population (certain exceptions are
discussed below). Our NEOs are eligible to participate in our 401(k) plan, our health and welfare benefits, our Employee Stock Purchase Plan and our User-Owned Personal Computing Devices reimbursement
program, on the same terms as other eligible employees.
The Compensation Committee updated our stock ownership guidelines on July 25, 2013. Our executives are required to hold 50% of
shares realized upon vesting or exercise of equity awards until they reach the required levels of 5x base salary for the CEO and 3x base salary for the other executive
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officers.
For purposes of these guidelines, ownership includes shares owned outright, unvested restricted stock and restricted stock units, and the value of vested and unexercised stock options. All
of our NEOs were in compliance with this policy in 2013.
As stated in our Code of Business Conduct and Ethics, all of our employees and directors are prohibited from engaging in hedging
transactions in Rambus shares, such as short sales and purchases of put options.
Annual equity awards are granted at the closing price on February 1st of each year. If February 1st is not
a trading day, the grants become effective and are priced as of the next trading day. The number of shares and key award terms of awards to NEOs are approved by the Compensation Committee prior to the
February 1st award date.
The Compensation Committee reserves the right to reduce or withhold future compensation based on any required restatement or
adjustment, and to determine the extent to which recovery of prior compensation may be pursued in the event of future adjustments caused by fraud on the part of an executive of Rambus. The
Compensation Committee will adopt a policy that complies with the requirements of the Dodd-Frank Wall Street Reform and Consumer Protection Act when such rules are promulgated.
Under Section 162(m) of the Internal Revenue Code, a corporation cannot deduct compensation it pays to its Chief Executive
Officer and certain other executive officers in excess of $1 million. Compensation that qualifies as "performance-based," however, is excluded from the $1 million limit if, among other
requirements, the compensation is payable only upon attainment of pre-established, objective performance goals under a plan that has been approved by the corporation's shareholders. The Compensation
Committee considers the potential future effects of Section 162(m) when determining NEO compensation. All of the stock options granted to our NEOs are intended to qualify under
Section 162(m) as performance-based compensation. Nonetheless, from time to time, the Compensation Committee does approve compensation to our NEOs that does not satisfy the requirements of
Section 162(m) when it believes that other considerations outweigh the tax deductibility of the compensation. For example, earned RSUs and annual variable cash awards paid to our NEOs under our
current annual incentive plan may not be deductible in the future, as these awards may not qualify as "performance-based compensation" for purposes of Section 162(m). We believe these awards
and payouts were appropriate in 2013 for retention purposes in light of individual performance as well as market compensation trends, as discussed in this CD&A. The Compensation Committee intends to
continue evaluating all of our executive compensation and may qualify such compensation as performance based compensation under Section 162(m) to the extent applicable, and so long as the
Compensation Committee determines that doing so is in the Company's best interests.
The Compensation Committee annually reviews the elements of named executive compensation to determine whether any portion of the
overall program encourages excessive risk taking. The Committee's current assessment is that although the majority of compensation provided to our NEOs is performance-based, our compensation programs
do not encourage excessive or unnecessary risk taking.
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The
Committee believes that the design of these compensation programs encourages our NEOs to remain focused on both short-term and long-term strategic goals.
Other best practice principles reflected in our compensation programs include:
-
-
No cash payments upon termination or change-in-control to our NEOs, other than the CEO. Outstanding equity awards may vest
upon a "double-trigger" termination in the event of a change-in-control.
-
-
Dr. Black's employment agreement with the Company includes, among other terms, certain payments for
Dr. Black in the event of his termination, a change of control of the Company, or both. The Compensation Committee believed that including these provisions in Dr. Black's employment
agreement was appropriate given the context of changes in the Company's leadership at that time.
-
-
We generally do not provide perquisites or tax gross-ups to any of our executive officers. However, the Company provided
reimbursements to Dr. Black during the first eight months of his employment with the Company for reasonable travel costs to and from his residence. See "Executive Compensation
TablesSummary Compensation Table" in this Proxy Statement.
OTHER MATTERS
The Board does not know of any other matters to be presented at the Annual Meeting. If any additional matters are properly presented or
otherwise allowed to be considered at the Annual Meeting, the persons named in the enclosed proxy will have discretion to vote shares they represent in accordance with their own judgment on such
matters.
It
is important that your shares be represented at the meeting, regardless of the number of shares which you hold. You are, therefore, urged to execute and return, at your earliest
convenience, the accompanying proxy card in the envelope which has been enclosed.
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BY ORDER OF THE BOARD OF DIRECTORS
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Sunnyvale, California
March 14, 2014
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Appendix A
RAMBUS INC.
2006 EQUITY INCENTIVE PLAN
(as amended and restated April 26, 2012)
1.
Purposes of the Plan.
The purposes of this Plan are:
-
-
to attract and retain the best available personnel for positions of substantial responsibility,
-
-
to provide incentives to individuals who perform services to the Company, and
-
-
to promote the success of the Company's business.
The
Plan permits the grant of Incentive Stock Options, Nonstatutory Stock Options, Restricted Stock, Restricted Stock Units, Stock Appreciation Rights, Performance Units, Performance
Shares and other stock or cash awards as the Administrator may determine.
2.
Definitions.
As used herein, the following definitions will apply:
(a) "
Administrator
" means the Committees that 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, Restricted Stock, Restricted Stock Units,
Stock Appreciation Rights, Performance Units, Performance Shares and other stock or cash awards 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) "
Board
" means the Board of Directors of the Company.
(f) "
Change in Control
" means the occurrence of any of the following events:
(i) Any
"person" (as such term is used in Sections 13(d) and 14(d) of the Exchange Act) becomes the "beneficial owner" (as defined in Rule 13d-3 of the
Exchange Act), directly or indirectly, of securities of the Company representing fifty percent (50%) or more of the total voting power represented by the Company's then outstanding voting securities;
or
(ii) The
consummation of the sale or disposition by the Company of all or substantially all of the Company's assets;
(iii) A
change in the composition of the Board occurring within a two-year period, as a result of which fewer than a majority of the directors are Incumbent Directors.
"Incumbent Directors" means directors who either (A) are Directors as of the effective date of the Plan, or (B) are elected, or nominated for election, to the Board with the affirmative
votes of at least a majority of the Incumbent Directors at the time of such election or nomination (but will not include an individual whose election or nomination is in connection with an actual or
threatened proxy contest relating to the election of directors to the Company); or
(iv) The
consummation of a merger or consolidation of the Company with any other corporation, other than a merger or consolidation which would result in the voting
securities
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of
the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity or its parent) at
least fifty percent (50%) of the total voting power represented by the voting securities of the Company or such surviving entity or its parent outstanding immediately after such merger or
consolidation.
(g) "
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.
(h) "
Committee
" means a committee of independent, Outside Directors appointed by the Board in accordance with
Section 4 hereof.
(i) "
Common Stock
" means the common stock of the Company.
(j) "
Company
" means Rambus Inc., a Delaware corporation, or any successor thereto.
(k) "
Consultant
" means any person, including an advisor, engaged by the Company or a Parent or Subsidiary to render services
to such entity.
(l) "
Determination Date
" means the latest possible date that will not jeopardize the qualification of an Award granted under
the Plan as "performance-based compensation" under Section 162(m) of the Code.
(m) "
Director
" means a member of the Board.
(n) "
Disability
" means total and permanent disability as defined in Section 22(e)(3) of the Code, provided that in the
case of Awards other than Incentive Stock Options, 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.
(o) "
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.
(p) "
Exchange Act
" means the Securities Exchange Act of 1934, as amended.
(q) "
Fair Market Value
" means, as of any date, the value of Common Stock as the Administrator may determine in good faith by
reference to the price of such stock on any established stock exchange or a national market system on the day of determination if the Common Stock is so listed on any established stock exchange or a
national market system. If the Common Stock is not listed on any established stock exchange or a national market system, the value of the Common Stock as the Administrator may determine in good faith.
(r) "
Fiscal Year
" means the fiscal year of the Company.
(s) "
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.
(t) "
Inside Director
" means a Director who is an Employee.
(u) "
Nonstatutory Stock Option
" means an Option that by its terms does not qualify or is not intended to qualify as an
Incentive Stock Option.
(v) "
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.
(w) "
Option
" means a stock option granted pursuant to the Plan.
(x) "
Outside Director
" means a Director who is not an Employee.
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(y) "
Parent
" means a "parent corporation," whether now or hereafter existing, as defined in Section 424(e) of the
Code.
(z) "
Participant
" means the holder of an outstanding Award.
(aa) "
Performance Period
" means any Fiscal Year of the Company or such other period as determined by the Administrator in its
sole discretion.
(bb) "
Performance Share
" means an Award denominated in Shares which may be earned in whole or in part upon attainment of
Performance Goals or other vesting criteria as the Administrator may determine pursuant to Section 10.
(cc) "
Performance Unit
" means an Award which may be earned in whole or in part upon attainment of Performance Goals or other
vesting criteria as the Administrator may determine and which may be settled for cash, Shares or other securities or a combination of the foregoing 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 2006 Equity Incentive Plan.
(ff) "
Restricted Stock
" means Shares issued pursuant to a Restricted Stock award under Section 7 of the Plan, or
issued pursuant to the early exercise of an Option.
(gg) "
Restricted Stock Unit
" means a bookkeeping entry representing an amount equal to the Fair Market Value of one Share,
granted pursuant to Section 8. Each Restricted Stock Unit represents an unfunded and unsecured obligation of the Company.
(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) "
Service Provider
" means an Employee, Director or Consultant.
(kk) "
Share
" means a share of the Common Stock, as adjusted in accordance with Section 15 of the Plan.
(ll) "
Stock Appreciation Right
" means an Award, granted alone or in connection with an Option, that pursuant to
Section 9 is designated as a Stock Appreciation Right.
(mm) "
Subsidiary
" means a "subsidiary corporation," whether now or hereafter existing, as defined in Section 424(f) of
the Code.
(nn) "
Successor Corporation
" has the meaning given to such term in Section 15(c) of the Plan.
3.
Stock Subject to the Plan.
(a)
Stock Subject to the Plan.
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 21,400,000 Shares. The Shares may be authorized, but unissued, or reacquired Common Stock.
(b)
Full Value Awards.
Any Shares subject to Awards granted with an exercise price less than the Fair Market
Value on the date of grant of such Awards will be counted against the numerical limits of this Section 3 as 1.5 Shares for every one Share subject thereto. Further, if Shares acquired pursuant
to any such Award are forfeited or repurchased by the Company and
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would
otherwise return to the Plan pursuant to Section 3(c), 1.5 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, or, with
respect to Restricted Stock, Restricted Stock Units, Performance Shares or Performance Units, 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). With
respect to Stock Appreciation Rights, all of the Shares covered by the Award (that is, Shares actually issued pursuant to a Stock Appreciation Right, as well as the Shares that represent payment of
the exercise price) shall cease to be available under the Plan. However, 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, Performance Shares or Performance Units 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 tax and exercise price of an Award will not become available for
future grant or sale under the Plan. To the extent an Award under the Plan is paid out in cash rather than Shares, such cash payment will not result in reducing the number of Shares available for
issuance under the Plan. Notwithstanding the foregoing and, subject to adjustment provided in Section 15, the maximum
number of Shares that may be issued upon the exercise of Incentive Stock Options shall equal the aggregate Share number stated in Section 3(a), plus, to the extent allowable under
Section 422 of the Code, any Shares that become available for issuance under the Plan under this Section 3(c).
(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)
General Administration; Multiple Administrative Bodies.
The Plan will be administered by a Committee or
Committees as determined by the Board, which will be constituted to satisfy Applicable Laws. Different Committees with respect to different groups of Service Providers may administer the Plan.
(ii)
Section 162(m).
To the extent desirable to qualify Awards granted hereunder as "performance-based
compensation" within the meaning of Section 162(m) of the Code, the Plan will be administered by a Committee of two or more "outside directors" within the meaning of Section 162(m) of
the Code.
(iii)
Rule 16b-3.
To the extent desirable to qualify transactions hereunder as exempt under
Rule 16b-3, the transactions contemplated hereunder will be structured to satisfy the requirements for exemption under Rule 16b-3.
(b)
Powers of the Administrator.
Subject to the provisions of the Plan, the Administrator will have the
authority, in its discretion:
(i) to
determine the Fair Market Value;
(ii) to
select the Service Providers 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;
(iv) to
construe and interpret the terms of the Plan and Awards granted pursuant to the Plan;
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(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;
(vi) to
modify or amend each Award (subject to Section 20(c) of the Plan);
(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
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
(ix) 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.
Nonstatutory Stock Options, Restricted Stock, Restricted Stock Units, Stock Appreciation Rights,
Performance Units, Performance Shares and such other cash or stock awards as the Administrator determines may be granted to Service Providers. Incentive Stock Options may be granted only to Employees.
6.
Stock Options.
(a)
Limitations.
Each Option will be designated in the Award Agreement as either an Incentive Stock Option or a
Nonstatutory Stock Option. However, notwithstanding such designation, to the extent that
the aggregate Fair Market Value of the Shares with respect to which Incentive Stock Options are exercisable for the first time by the Participant during any calendar year (under all plans of the
Company and any Parent or Subsidiary) exceeds $100,000, such Options will be treated as Nonstatutory Stock Options. For purposes of this Section 6(a), Incentive Stock Options will be taken into
account in the order in which they were granted. The Fair Market Value of the Shares will be determined as of the time the Option with respect to such Shares is granted.
(b)
Number of Shares.
The Administrator will have complete discretion to determine the number of Shares subject
to Options granted to any Participant, provided that during any Fiscal Year, no Participant will be granted Options covering more than 1,000,000 Shares. Notwithstanding the foregoing limitation, in
connection with a Participant's initial service as an Employee, an Employee may be granted Options covering up to an additional 1,000,000 Shares.
(c)
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. Moreover, in the case of an Incentive Stock Option granted to a Participant who, at the time the
Incentive Stock Option is granted, owns stock representing more than ten percent (10%) of the total combined voting power of all classes of stock of the Company or any Parent or Subsidiary, the term
of the Incentive Stock Option will be five (5) years from the date of grant or such shorter term as may be provided in the Award Agreement.
(d)
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. In addition, in the case of an Incentive Stock Option granted to an
Employee who, at the time the Incentive Stock Option is granted, owns stock representing more than ten percent (10%) of the voting power of all
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classes
of stock of the Company or any Parent or Subsidiary, the per Share exercise price will be no less than 110% of the Fair Market Value per Share on the date of grant. The exercise price for an
Option may not be reduced without the consent of the Company's stockholders. This will include, without limitation, a repricing of the Option as well as an Option exchange program whereby the
Participant agrees to cancel an existing Option in exchange for an Option, Stock Appreciation Right or other Award.
(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.
(e)
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 specify 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 an applicable withholding taxes). 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 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 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.
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(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.
7.
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 Service Providers 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. Notwithstanding the foregoing
sentence, during any Fiscal Year no Participant will receive more than an aggregate of 200,000 Shares of Restricted Stock; provided, however, that in connection with a Participant's initial service as
an Employee, an Employee may be granted an aggregate of up to an additional 300,000 Shares of Restricted Stock. Unless the Administrator 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 7, 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 7, 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. The Administrator, in its discretion,
may accelerate the time at which any restrictions will lapse or be removed; provided, however, Shares of Restricted Stock will not vest more rapidly than one-third (1/3
rd
) of the
total number of Shares of Restricted Stock subject to an Award each year from the date of grant, unless the Administrator determines that the Award is to vest upon the achievement of performance
criteria and the period for measuring such performance will cover at least twelve (12) months; provided, further, that the Administrator may grant Awards of Restricted Stock, Restricted Stock
Units and Performance Units/Shares covering up to 5% of the total number of Shares reserved for issuance under the Plan that do not satisfy the forgoing vesting requirements. Notwithstanding the
foregoing sentence, the Administrator, in its sole discretion, may provide at the time of or following the date of grant for accelerated vesting for an Award of Restricted Stock (provided, however,
that the number of Shares subject or issuable pursuant to
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Awards
of Restricted Stock, Restricted Stock Units and Performance Units/Shares eligible for such accelerated vesting shall not exceed 5% of the total number of Shares reserved for issuance under the
Plan) or for accelerated vesting upon or in connection with a Change in Control (including any vesting
acceleration provided for in Section 15(c)) or upon or in connection with a Participant's termination of service due to death, Disability or retirement.
(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 otherwise provided in the Award Agreement. 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.
8.
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 8(d), may be left to the
discretion of the Administrator. Notwithstanding the anything to the contrary in this subsection (a), during any fiscal year of the Company, no Participant will receive more than an aggregate
of 200,000 Restricted Stock Units; provided, however, that in connection with a Participant's initial service as an Employee, an Employee may be granted an aggregate of up to an additional 300,000
Restricted Stock Units.
(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. Each Award of Restricted Stock Units 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; provided, however, that, an
Award of Restricted Stock Units will not vest more rapidly than one-third (1/3
rd
) of the total number of Restricted Stock Units subject to an Award each year from the date of grant,
unless the Administrator determines that the Award is to vest upon the achievement of performance criteria and the period for measuring such performance will cover at least twelve (12) months;
provided, further, that the Administrator may grant Awards of Restricted Stock, Restricted Stock Units and Performance Units/Shares covering up to 5% of the total number of Shares reserved for
issuance under the Plan that do not satisfy the forgoing vesting requirements. Notwithstanding the foregoing sentence, the Administrator, in its sole discretion, may provide at the time of or
following the date of grant for accelerated vesting for an Award of
Restricted Stock Units (provided, however, that the number of Shares subject or issuable pursuant to Awards of Restricted Stock, Restricted Stock Units and Performance Units/Shares eligible for such
accelerated vesting shall not exceed 5% of the total number of Shares reserved for issuance under the Plan) or for accelerated vesting upon or in connection with a Change in Control (including any
vesting acceleration provided for in Section 15(c)) or upon or in connection with a Participant's termination of service due to death, Disability or retirement.
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(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. Notwithstanding the foregoing, at any time after the grant of Restricted Stock Units, the Administrator, in its sole discretion, may
reduce or waive any vesting criteria that must be met to receive a payout.
(d)
Form and Timing of Payment.
Payment of earned Restricted Stock Units 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.
9.
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 Service Providers 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 Participant, provided that during any Fiscal Year, no Participant will be granted Stock Appreciation Rights covering more than 1,000,000 Shares. Notwithstanding the
foregoing limitation, in connection with a Participant's initial service as an Employee, an Employee may be granted Stock Appreciation Rights covering up to an additional 1,000,000 Shares.
(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 one hundred percent (100%) of the
Fair Market Value of a Share on the date of grant. The exercise price for a Stock Appreciation Right may not be reduced without the consent of the Company's stockholders. This will include, without
limitation, a repricing of the Stock Appreciation Right as well as an exchange program whereby the Participant agrees to cancel an existing Stock Appreciation Right in exchange for an Option, Stock
Appreciation Right or other Award.
(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(e) 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
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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.
10.
Performance Units and Performance Shares.
(a)
Grant of Performance Units/Shares.
Performance Units and Performance Shares may be granted to Service
Providers 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
Performance Units/Shares granted to each Participant provided that during any Fiscal Year, (i) no Participant will receive Performance Units having an initial value greater than $2,000,000, and
(ii) no Participant will receive more than 200,000 Performance Shares. Notwithstanding the foregoing limitation, in connection with a Participant's initial service as an Employee, an Employee
may be granted up to an additional 300,000 Performance Shares.
(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. 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 (including, without limitation, continued status as a Service Provider) in its discretion which, depending on the extent to which they are met, will determine the number or value of
Performance Units/Shares that will be paid out to the Participant. Each Award of Performance Units/Shares will be evidenced by an Award Agreement that will specify the Performance Period, and such
other terms and conditions as the Administrator, in its sole discretion, will determine; provided, however, that Performance Units/Shares will not vest more rapidly than one-third
(1/3
rd
) of the total number of Performance Units/Shares subject to an Award each year from the date of grant, unless the Administrator determines that the Award is to vest upon the
achievement of performance criteria and the period for measuring such performance will cover at least twelve (12) months; provided, further, that the Administrator may grant Awards of
Restricted Stock, Restricted Stock Units and Performance Units/Shares covering up to 5% of the total number of Shares reserved for issuance under the Plan that do not satisfy the forgoing vesting
requirements. Notwithstanding the foregoing sentence, the Administrator, in its sole discretion, may provide at the time of or following the date of grant for accelerated vesting for an Award of
Performance Units/Shares (provided, however, that the number of Shares subject or issuable pursuant to Awards of Restricted Stock, Restricted Stock Units and Performance Units/Shares eligible for such
accelerated vesting shall not exceed 5% of the total number of Shares reserved for issuance under the Plan) or for accelerated vesting upon or in connection with a Change in Control (including any
vesting acceleration provided for in Section 15(c)) or upon or in connection with a Participant's termination of service due to death, Disability or retirement.
(d)
Earning of Performance Units/Shares.
After the applicable Performance Period has ended, the holder of
Performance Units/Shares will be entitled to receive a payout of the number of Performance Units/Shares 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/Share, the Administrator, in its sole discretion, may
reduce or waive any performance objectives or other vesting provisions for such Performance Unit/Share.
(e)
Form and Timing of Payment of Performance Units/Shares.
Payment of earned Performance Units/Shares 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 Units/
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Shares
in the form of cash, in Shares (which have an aggregate Fair Market Value equal to the value of the earned Performance Units/Shares at the close of the applicable Performance Period) or in a
combination thereof.
(f)
Cancellation of Performance Units/Shares.
On the date set forth in the Award Agreement, all unearned or
unvested Performance Units/Shares will be forfeited to the Company, and again will be available for grant under the Plan.
11.
Performance Goals.
The granting and/or vesting of Awards of Restricted Stock, Restricted Stock Units,
Performance Shares and Performance Units and other incentives under the Plan may be made subject to the attainment of performance goals relating to one or more business criteria within the meaning of
Section 162(m) of the Code and may provide for a targeted level or levels of achievement ("
Performance Goals
") including cash flow; cash
position; earnings before interest and taxes; earnings before interest, taxes, depreciation and amortization; earnings per Share; economic profit; economic value added; equity or stockholder's equity;
market share; net income; net profit; net sales; operating earnings; operating income; profit before tax; ratio of debt to debt plus equity; ratio of operating earnings to capital spending; sales
growth; return on net assets; or total return to stockholders. Any Performance Goals may be used to measure the performance of the Company as a whole or an business unit of the Company and may be
measured relative to a peer group or index. The Performance Goals may differ from Participant to Participant and from Award to Award. Prior to the Determination Date, the Administrator will determine
whether any significant element(s) will be included in or excluded from the calculation of any Performance Goal with respect to any Participant. In all other respects, Performance Goals will be
calculated in accordance with the Company's financial statements, generally accepted accounting principles, or under a methodology established by the Administrator prior to the issuance of an Award.
12.
Leaves of Absence.
Unless the Administrator provides otherwise, or except as otherwise required by
Applicable Laws, vesting of Awards granted hereunder on or after July 17, 2007, will be suspended starting on the 30
th
consecutive day of any unpaid leave of absence
approved by the Company, with such suspension of vesting terminating upon the Participant's resumption of service with the Company. 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. For purposes of Incentive Stock Options, no such leave may exceed ninety (90) days, unless reemployment upon expiration of such leave is guaranteed by statute or contract. If
reemployment upon expiration of a leave of absence approved by the Company is not so guaranteed, then three (3) months following the 91st day of such leave any Incentive Stock Option
held by the Participant will cease to be treated as an Incentive Stock Option and will be treated for tax purposes as a Nonstatutory Stock Option.
13.
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.
14.
Awards to Outside Directors
(a)
General.
All grants of Awards to Outside Directors pursuant to this Section 14 will be automatic and
nondiscretionary and will be made in accordance with the following provisions, except as otherwise provided herein.
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(b)
Granting of Awards.
(i)
Initial Award.
Each Outside Director who becomes an Outside Director after the effective date of this Plan
will be automatically granted a Nonstatutory Stock Option to purchase 40,000 Shares (the "
Initial Award
") on the date on which such person first becomes
an Outside Director, whether through election by the stockholders of the Company or appointment by the Board to fill a vacancy; provided, however, that an Inside Director who ceases to be an Inside
Director but who remains a Director will not receive an Initial Award.
(ii)
Subsequent Awards.
Each Outside Director will be automatically granted an Award of Restricted Stock Units
on October 1 of each year;
provided
that he or she is then an Outside Director (a "
Subsequent
Award
"). The number of Restricted Stock Units subject to the Subsequent Award will be determined in the sole discretion of the Board or the Administrator on or prior to the
Award becoming effective on the applicable October 1 grant date.
(c)
Terms of Initial Award.
The terms of the Initial Award will be as follows:
(i) The
term of the Initial Award will be ten (10) years.
(ii) The
exercise price per Share will be 100% of the Fair Market Value per Share on the date of grant. In the event that the date of grant is not a trading day, the
exercise price per Share will be the Fair Market Value on the next trading day immediately following the date of grant.
(iii) Subject
to the provisions of Section 15, 12.5% of the Shares subject to the Initial Award will vest six (6) months after the date of grant, and
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48
of the Shares subject to the Initial Award will vest each month thereafter so that 100% of the Shares subject to the Initial Award will be vested four (4) years from the
grant date, subject to the Outside Director remaining a Service Provider through each such vesting date.
(d)
Subsequent Award.
The terms of each Subsequent Award will be as follows:
(i) Subject
to the provisions of Section 15, the Subsequent Award will vest and become payable as to 100% of the Restricted Stock Units subject to the Award on the
twelve (12) month anniversary of the date of grant, subject to the Outside Director remaining a Service Provider through such vesting date. Notwithstanding the foregoing, at any time after the
grant of the Subsequent Award, the Administrator, in its sole discretion, may reduce or waive any vesting criteria that must be met to receive a payout of the Restricted Stock Units subject to the
Subsequent Award.
(ii) To
the extent not in conflict with the terms of this Section 14, the other terms and conditions of the Plan will apply to any Subsequent Awards.
(e)
Adjustments.
The Administrator in its discretion may change and otherwise revise the terms of Awards granted
under this Section 14, including, without limitation, the number of Shares and/or the types of Awards to be granted, for Awards granted on or after the date the Administrator determines to make
any such change or revision.
(f)
Other Awards.
Nothing in this Section 14 will limit the ability of the Administrator to grant all
types of Awards under the Plan (including Options) to Outside Directors in addition to the Awards that are granted to them under this Section 14.
15.
Adjustments; Dissolution or Liquidation; Merger or Change in 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,
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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 intended to be made available under the Plan, may (in its sole
discretion) 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, and the numerical Share limits
set forth in Sections 3, 6, 7, 8, 9, 10 and 14.
(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)
Change in Control.
In the event of a Change in Control, each outstanding Award will be assumed or an
equivalent option or right substituted by the successor corporation or a Parent or Subsidiary of the successor corporation (the "
Successor
Corporation
"). In the event that the Successor Corporation refuses to assume or substitute for the Award, the Participant will fully vest in and have the right to exercise all
of his or her outstanding Options and Stock Appreciation Rights, including Shares as to which such Awards would not otherwise be vested or exercisable, all restrictions on Restricted Stock will lapse,
and, with respect to Restricted Stock Units, Performance Shares and Performance Units, all Performance Goals or other vesting criteria will be deemed achieved at target levels and all other terms and
conditions met. In addition, if an Option or Stock Appreciation Right is not assumed or substituted for in the event of a Change in Control, the Administrator will notify the Participant in writing or
electronically that the Option or Stock Appreciation Right will be fully vested and 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.
With
respect to Awards granted to Outside Directors that are assumed or substituted for, if on the date of or following such assumption or substitution the Participant's status as a
Director or a director of the Successor Corporation, as applicable, is terminated other than upon a voluntary resignation by the Participant, then the Participant will fully vest in and have the right
to exercise Options and/or Stock Appreciation Rights as to all of the Shares subject thereto, including Shares as to which such Awards would not otherwise be vested or exercisable, all restrictions on
Restricted Stock will lapse, and, with
respect to Restricted Stock Units, Performance Shares and Performance Units, all Performance Goals or other vesting criteria will be deemed achieved at target levels and all other terms and conditions
met.
For
the purposes of this subsection (c), an Award will be considered assumed if, following the Change in Control, the Award confers the right to purchase or receive, for each
Share subject to the Award immediately prior to the Change in Control, the consideration (whether stock, cash, or other securities or property) or, in the case of a Stock Appreciation Right upon the
exercise of which the Administrator determines to pay cash or a Performance Share or Performance Unit which the Administrator can determine to pay in cash, the fair market value of the consideration
received in the merger or Change in Control by holders of Common Stock for each Share held on the effective date of the transaction (and if holders were offered a choice of consideration, the type of
consideration chosen by the holders of a majority of the outstanding Shares); provided, however, that if such consideration received in the Change in Control is not solely common stock of the
Successor Corporation, 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 Performance Share or Performance Unit, for each Share subject to such Award (or in the case of Performance Units, the number of implied shares determined by dividing the value of
the Performance Units by the per share consideration received by holders of Common Stock in the Change in Control),
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to
be solely common stock of the Successor Corporation equal in fair market value to the per share consideration received by holders of Common Stock in the Change in 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 in Control corporate structure will not be deemed to invalidate an otherwise valid Award assumption.
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) (a) paying cash, (b) electing to have the
Company withhold otherwise deliverable cash or Shares having a Fair Market Value equal to the amount required to be withheld, (c) delivering to the Company already-owned Shares having a Fair
Market Value equal to the amount required to be withheld, or (d) 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 the Shares to be withheld or delivered will be determined
as of the date that the taxes are required to be withheld.
17.
No Effect on Employment or Service.
Neither the Plan nor any Award will confer upon a Participant any right
with respect to continuing the Participant's relationship as a Service Provider with the Company, nor will they interfere in any way with the Participant's right or the Company'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.
Subject to Section 23 of the 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 Board or the Administrator may at any time amend, alter, suspend or terminate
the Plan.
(b)
Stockholder Approval.
The Company will obtain stockholder approval of any Plan amendment to the extent
necessary and desirable to comply with Applicable Laws.
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(c)
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 of an Award, the Company may require the person
exercising such Award to represent and warrant at the time of any such exercise that the Shares are being purchased only for investment and without any present intention to sell or distribute such
Shares if, in the opinion of counsel for the Company, such a representation is required.
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.
23.
Stockholder Approval.
The Plan will be subject to approval by the stockholders of the Company within twelve
(12) months after the date the Plan is adopted. Such stockholder approval will be obtained in the manner and to the degree required under Applicable Laws.
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Appendix B
RAMBUS INC.
2006 EMPLOYEE STOCK PURCHASE PLAN
(as amended and restated April 26, 2012)
The
following constitutes the provisions of the 2006 Employee Stock Purchase Plan of Rambus Inc.
1.
Purpose.
The purpose of the Plan is to provide Employees with an opportunity to purchase Common Stock through
accumulated Contributions (as defined in Section 2(h) below). It is the intention of the Company to have the Plan qualify as an "employee stock purchase plan" under Section 423 of the
Code. The provisions of the Plan, accordingly, will be construed so as to extend and limit Plan participation in a uniform and nondiscriminatory basis consistent with the requirements of
Section 423 of the Code.
2.
Definitions.
(a) "
Administrator
" means the Board or any committee designated by the Board to administer the Plan pursuant to
Section 14.
(b) "
Board
" means the Board of Directors of the Company.
(c) "
Change of Control
" means the occurrence of any of the following events:
(i) Any
"person" (as such term is used in Sections 13(d) and 14(d) of the Exchange Act) becomes the "beneficial owner" (as defined in Rule 13d-3 of the
Exchange Act), directly or indirectly, of securities of the Company representing fifty percent (50%) or more of the total voting power represented by the Company's then outstanding voting securities;
or
(ii) The
consummation of the sale or disposition by the Company of all or substantially all of the Company's assets; or
(iii) The
consummation of a merger or consolidation of the Company, with any other corporation, other than a merger or consolidation which would result in the voting
securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity or its
parent) at least fifty percent (50%) of the total voting power represented by the voting securities of the Company, or such surviving entity or its parent outstanding immediately after such merger or
consolidation; or
(iv) A
change in the composition of the Board occurring within a two (2)-year period, as a result of which fewer than a majority of the Directors are Incumbent Directors.
"Incumbent Directors" means Directors who either (A) are Directors as of the effective date of the Plan (pursuant to Section 23 hereof), or (B) are elected, or nominated for
election, to the Board with the affirmative votes of at least a majority of those Incumbent Directors at the time of such election or nomination (but will not include an individual whose election or
nomination is in connection with an actual or threatened proxy contest relating to the election of Directors of the Company).
(d) "
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.
(e) "
Common Stock
" means the common stock of the Company.
(f) "
Company
" means Rambus Inc., a Delaware corporation.
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(g) "
Compensation
" means an Employee's base straight time gross earnings, but exclusive of payments for overtime, shift
premium, incentive compensation, incentive payments, bonuses and other compensation.
(h) "
Contributions
" means the payroll deductions and other additional payments to the Company that the Company may permit to
be made by a participant to fund the exercise of options granted pursuant to the Plan.
(i) "
Designated Subsidiary
" means any Subsidiary that has been designated by the Administrator from time to time in its sole
discretion as eligible to participate in the Plan.
(j) "
Director
" means a member of the Board.
(k) "
Employee
" means any individual who is a common law employee of an Employer and is customarily employed for at least
twenty (20) hours per week and more than five (5) months in any calendar year by the Employer, or any lesser number of hours per week and/or number of months in any calendar year
established by the Administrator (if required under applicable local law) for purposes of any separate Offering. For purposes of the Plan, the employment relationship will be treated as continuing
intact while the individual is on sick leave or other leave of absence that the Employer approves. Where the period of leave exceeds three (3) months and the individual's right to reemployment
is not guaranteed either by statute or by contract, the employment relationship will be deemed to have terminated three (3) months and (1) day following the start of such leave. The
Administrator, in its discretion, from time to time may, prior to an Enrollment Date for all options to be granted on such Enrollment Date, determine (on a uniform and nondiscriminatory basis) that
the definition of Employee will or will not include an individual if he or she: (1) has not completed at least two years of service since his or her last hire date (or such lesser period of
time as may be determined by the Administrator in its discretion), (2) customarily works not more than twenty (20) hours per week (or such lesser period of time as may be determined by
the Administrator in its discretion), (3) customarily works not more than five (5) months per calendar year (or such lesser period of time as may be determined by the Administrator in
its discretion), or (4) is a highly compensated employee under Section 414(q) of the Code with compensation above a certain level or who is an officer or subject to the disclosure
requirements of Section 16(a) of the Exchange Act, provided the exclusion is applied with respect to
each Offering in an identical manner to all highly compensated individuals of the Employer whose Employees are participating in that Offering.
(l) "
Employer
" means any one or all of the Company and its Designated Subsidiaries.
(m) "
Enrollment Date
" means the first Trading Day of each Offering Period.
(n) "
Exchange Act
" means the Securities Exchange Act of 1934, as amended, including the rules and regulations promulgated
thereunder.
(o) "
Exercise Date
" means the first Trading Day on or after May 1 and November 1 of each year.
(p) "
Fair Market Value
" means, as of any date, the value of Common Stock determined as follows:
(i) If
the Common Stock is listed on any established stock exchange or a national market system, including without limitation the Nasdaq Global Select Market, the Nasdaq
Global Market or the Nasdaq Capital Market of The Nasdaq Stock Market, its Fair Market Value will be the closing sales price for the Common Stock (or the closing bid, if no sales were reported) as
quoted on such exchange or system on the date of determination, as reported in
The Wall Street Journal
or such other source as the Administrator deems
reliable, or;
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(ii) If
the Common Stock is regularly quoted by a recognized securities dealer but selling prices are not reported, its Fair Market Value will be the mean of the closing bid
and asked prices for the Common Stock on the date of determination, 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, its Fair Market Value will be determined in good faith by the Administrator.
(q) "
Offering
" means an offer under the Plan of an option that may be exercised during an Offering Period as further
described in Section 4. For purposes of this Plan, the Administrator may designate separate Offerings under the Plan (the terms of which need not be identical) in which Employees of one or more
Employers will participate, even if the dates of the applicable Offering Periods of each such Offering are identical.
(r) "
Offering Periods
" means the periods of approximately six (6) months during which an option granted pursuant to
the Plan may be exercised, commencing on the first Trading Day on or after May 1 and November 1 of each year and terminating on the first Trading Day on or after the May 1 and
November 1 Offering Period commencement date approximately six (6) months later. The duration and timing of Offering Periods may be changed pursuant to Section 4 of this Plan.
(s) "
Parent
" means a "parent corporation," whether now or hereafter existing, as defined in Section 424(e) of the
Code.
(t) "
Plan
" means this 2006 Employee Stock Purchase Plan.
(u) "
Purchase Price
" means an amount equal to eighty-five percent (85%) of the Fair Market Value of a share of Common Stock
on the Enrollment Date or on the Exercise Date, whichever is lower; provided however, that the Purchase Price may be adjusted by the Administrator pursuant to Section 20.
(v) "
Subsidiary
" means a "subsidiary corporation," whether now or hereafter existing, as defined in Section 424(f) of
the Code.
(w) "
Trading Day
" means a day on which the U.S. national stock exchanges and the Nasdaq System are open for trading.
3.
Eligibility.
(a)
Offering Periods.
Any individual who is an Employee as of the Enrollment Date of any Offering Period will be
eligible to participate in such Offering Period, subject to the requirements of Section 5. Employees who are citizens or residents of a non-U.S. jurisdiction may be excluded from participation
in the Plan or an Offering if the participation of such Employees is prohibited under the laws of the applicable jurisdiction or if complying with the laws of the applicable jurisdiction would cause
the Plan or an Offering to violate Section 423 of the Code.
(b)
Limitations.
Any provisions of the Plan to the contrary notwithstanding, no Employee will be granted an
option under the Plan (i) to the extent that, immediately after the grant, such Employee (or any other person whose stock would be attributed to such Employee pursuant to Section 424(d)
of the Code) would own capital stock of the Company or any Parent or Subsidiary of the Company and/or hold outstanding options to purchase such stock possessing five percent (5%) or more of the total
combined voting power or value of all classes of the capital stock of the Company or of any Parent or Subsidiary of the Company, or (ii) to the extent that his or her rights to purchase stock
under all employee stock purchase plans (as defined in Section 423 of the Code) of the Company or any Parent or Subsidiary of the Company accrues at a rate which exceeds twenty-five thousand
dollars ($25,000) worth of stock (determined at the Fair Market Value of the stock at the time such option is granted) for each calendar year in which such option is
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outstanding
at any time, as determined in accordance with Section 423 of the Code and the regulations thereunder.
4.
Offering Periods.
The Plan will be implemented by consecutive Offering Periods with a new Offering Period
commencing on the first Trading Day on or after May 1 and November 1 of each year, or on such other date as the Administrator will determine, and continuing thereafter until terminated
in accordance with Section 20. The Administrator will have the power to change the duration of Offering Periods (including the commencement dates thereof) with respect to future offerings
without stockholder approval if such change is announced prior to the scheduled beginning of the first Offering Period to be affected thereafter.
5.
Participation.
An Employee who is eligible to participate in the Plan pursuant to Section 3(a) may
become a participant by (i) submitting to the Company's payroll office (or its designee), on or before a date prescribed by the Administrator prior to an applicable Enrollment Date, a properly
completed subscription agreement authorizing Contributions in the form provided by the Administrator for such purpose, or (ii) following an electronic or other enrollment procedure prescribed
by the Administrator.
6.
Contributions.
(a) At
the time a participant enrolls in the Plan pursuant to Section 5, he or she will elect to have payroll deductions made on each payday or other Contributions
(to the extent permitted by the Administrator) made during the Offering Period in an amount not exceeding fifteen percent (15%) of
the Compensation which he or she receives on each such payday. The Administrator, in its sole discretion, may permit all participants in a specified Offering to contribute amounts to the Plan through
payment by cash, check or other means set forth in the subscription agreement prior to each Exercise Date of each Offering Period, provided that payment through means other than payroll deductions
shall be permitted only if the participant has not already had the maximum permitted amount withheld through payroll deductions during the Offering Period. A participant's subscription agreement shall
remain in effect for successive Offering Periods unless terminated as provided in Section 10 hereof.
(b) Payroll
deductions authorized by a participant will commence on the first payday following the Enrollment Date and will end on the last payday in the Offering Period to
which such authorization is applicable, unless sooner terminated by the participant as provided in Section 10.
(c) All
Contributions made for a participant will be credited to his or her account under the Plan and will be made in whole percentages only. A participant may not make any
additional payments into such account.
(d) A
participant may discontinue his or her participation in the Plan as provided in Section 10, or may increase or decrease the rate of his or her Contributions
during the Offering Period by (i) properly completing and submitting to the Company's payroll office (or its designee), on or before a date prescribed by the Administrator prior to an
applicable Exercise Date, a new subscription agreement authorizing the change in Contribution rate in the form provided by the Administrator for such purpose, or (ii) following an electronic or
other procedure prescribed by the Administrator; provided, however, that unless the Administrator provides otherwise, a participant may reduce, but not increase, his or her Contribution rate during an
Offering Period for that Offering Period (it being understood that a participant may increase the Contribution rate for future Offering Periods prior to the commencement of any such Offering Period).
If a participant has not followed such procedures to change the rate of Contributions, the rate of his or her Contributions will continue at the originally elected rate throughout the Offering Period
and future Offering Periods (unless terminated as provided in Section 10). The Administrator may, in
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its
sole discretion, limit the nature and/or number of Contribution rate changes that may be made by participants during any Offering Period. Any change in payroll deduction rate made pursuant to this
Section 6(d) will be effective as of the first full payroll period following five (5) business days after the date on which the change is made by the participant (unless the
Administrator, in its sole discretion, elects to process a given change in payroll deduction rate more quickly).
(e) Notwithstanding
the foregoing, to the extent necessary to comply with Section 423(b)(8) of the Code and Section 3(b), a participant's Contributions may be
decreased to zero percent (0%) at any time during an Offering Period. Subject to Section 423(b)(8) of the Code and Section 3(b) hereof, Contributions will recommence at the rate
originally elected by the participant effective as of the beginning of the first Offering Period which is scheduled to end in the following calendar year, unless terminated by the participant as
provided in Section 10.
(f) Notwithstanding
any provisions to the contrary in the Plan, the Administrator may allow Employees to participate in the Plan via cash contributions instead of payroll
deductions if (i) payroll deductions are not permitted under applicable local law, and (ii) the Administrator determines that cash contributions are permissible under Section 423
of the Code.
(g) At
the time the option is exercised, in whole or in part, or at the time some or all of the Company's Common Stock issued under the Plan is disposed of, the participant
must make adequate provision for the Company's federal, state, or other tax withholding obligations, if any, which arise upon the exercise of the option or the disposition of the Common Stock. At any
time, the Company may, but will not be obligated to, withhold from the participant's compensation the amount necessary for the Company to meet applicable withholding obligations, including any
withholding required to make available to the Company any tax deductions or benefits attributable to the sale or early disposition of Common Stock by the Employee. In addition, the Company or the
Employer, may, but will not be obligated to, withhold from the proceeds of the sale of Common Stock or any other method of withholding the Company or the Employer deems appropriate to the extent
permitted by U.S. Treasury Regulation Section 1.423-2(f).
7.
Grant of Option.
On the Enrollment Date of each Offering Period, each Employee participating in such Offering
Period will be granted an option to purchase on the Exercise Date(s) of such Offering Period (at the applicable Purchase Price) up to a number of shares of Common Stock determined by dividing such
participant's Contributions accumulated prior to such Exercise Date and retained in the participant's account as of the Exercise Date by the applicable Purchase Price; provided that in no event will a
participant be permitted to purchase during each Offering Period more than five thousand (5,000) shares of Common Stock (subject to any adjustment pursuant to Section 19), and provided further
that such purchase will be subject to the limitations set forth in Sections 3(b) and 13. The Employee may accept the grant of such option with respect to any Offering Period under the Plan, by
electing to participate in the Plan in accordance with the requirements of Section 5. The Administrator may, for future Offering Periods, increase or decrease, in its absolute discretion, the
maximum number of shares of Common Stock that a participant may purchase during each Offering Period. Exercise of the option will occur as provided in Section 8, unless the participant has
withdrawn pursuant to Section 10. The option will expire on the last day of the Offering Period.
8.
Exercise of Option.
(a) Unless
a participant withdraws from the Plan as provided in Section 10, his or her option for the purchase of shares of Common Stock will be exercised
automatically on the Exercise Date, and the maximum number of full shares subject to the option will be purchased for such participant at the applicable Purchase Price with the accumulated
Contributions in his or her account. No fractional shares of Common Stock will be purchased; any Contributions accumulated in a participant's account which are not sufficient to purchase a full share
will be returned to the participant. Any other funds left over in a participant's account after the Exercise Date will be returned to the participant. During a participant's lifetime, a participant's
option to purchase shares hereunder is exercisable only by him or her.
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(b) Notwithstanding
any contrary Plan provision, if the Administrator determines that, on a given Exercise Date, the number of shares of Common Stock with respect to which
options are to be exercised may exceed (i) the number of shares of Common Stock that were available for sale under the Plan on the Enrollment Date of the applicable Offering Period, or
(ii) the number of shares of Common Stock available for sale under the Plan on such Exercise Date, the Administrator may in its sole discretion (x) provide that the Company will make a
pro rata allocation of the shares of Common Stock available for purchase on such Enrollment Date or Exercise Date, as applicable, in as uniform a manner as will be practicable and as it will determine
in its sole discretion to be equitable among all participants exercising options to purchase Common Stock on such Exercise Date, and either (x) continue any Offering Period then in effect, or
(y) terminate any Offering Period then in effect pursuant to Section 20. The Company may make pro rata allocation of the shares of Common Stock available on the Enrollment Date of any
applicable Offering Period pursuant to the preceding sentence, notwithstanding any authorization of additional shares of Common Stock for issuance under the Plan by the Company's stockholders
subsequent to such Enrollment Date.
9.
Delivery.
As soon as administratively practicable after each Exercise Date on which a
purchase of shares of Common Stock occurs, the Company will arrange the delivery to each participant, as appropriate, the shares purchased upon exercise of his or her option in a form determined by
the Administrator (in its sole discretion) and pursuant to rules established by the Administrator. No participant will have any voting, dividend, or other stockholder rights with respect to shares of
Common Stock subject to any option granted under the Plan until such shares have been purchased and delivered to the participant as provided in this Section 9.
10.
Withdrawal.
(a) Under
procedures established by the Administrator, a participant may withdraw all but not less than all the Contributions credited to his or her account and not yet used
to exercise his or her option under the Plan at any time by (i) submitting to the Company's payroll office (or its designee) a written notice of withdrawal in the form prescribed by the
Administrator for such purpose, or (ii) following an electronic or other withdrawal procedure prescribed by the Administrator. All of the participant's Contributions credited to his or her
account will be paid to such participant as promptly as practicable after the effective date of his or her withdrawal and such participant's option for the Offering Period will be automatically
terminated, and no further Contributions for the purchase of shares will be made for such Offering Period. If a participant withdraws from an Offering Period, Contributions will not resume at the
beginning of the succeeding Offering Period unless the participant re-enrolls in the Plan in accordance with the provisions of Section 5.
(b) A
participant's withdrawal from an Offering Period will not have any effect upon his or her eligibility to participate in any similar plan which may hereafter be adopted
by the Company or in succeeding Offering Periods which commence after the termination of the Offering Period from which the participant withdraws.
11.
Termination of Employment.
Upon a participant's ceasing to be an Employee, for any reason, he or she will be
deemed to have elected to withdraw from the Plan and the Contributions credited to such participant's account during the Offering Period but not yet used to purchase shares of Common Stock under the
Plan will be returned to such participant or, in the case of his or her death, to the person or persons entitled thereto under Section 15, and such participant's option will be automatically
terminated. The preceding sentence notwithstanding, a participant who receives payment in lieu of notice of termination of employment will be treated as continuing to be an Employee for the
participant's customary number of hours per week of employment during the period in which the participant is subject to such payment in lieu of notice.
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12.
Interest.
No interest will accrue on the Contributions of a participant in the Plan, except as may be
required by applicable law, as determined by the Company, and if so required by the laws of a particular jurisdiction, shall apply to all participants in the relevant Offering except to the extent
otherwise permitted by U.S. Treasury Regulation Section 1.423-2(f).
13.
Stock.
(a) Subject
to adjustment upon changes in capitalization of the Company as provided in Section 19, the maximum number of shares of Common Stock which will be made
available for sale under the Plan will be 3,100,000 shares of Common Stock.
(b) Shares
of Common Stock to be delivered to a participant under the Plan will be registered in the name of the participant or in the name of the participant and his or her
spouse.
14.
Administration.
The Board or a committee of members of the Board who will be appointed from time to time by,
and will serve at the pleasure of, the Board, will administer the Plan. The Administrator will have full and exclusive discretionary authority to construe, interpret and apply the terms of the Plan,
to designate separate Offerings under the Plan, to determine eligibility, to adjudicate all disputed claims filed under the Plan and to establish such procedures that it deems necessary for
administration of the Plan (including, without limitation, to adopt such procedures and sub-plans as are necessary or appropriate to permit the participation in the Plan by employees who are foreign
nationals or employed outside the United States). Unless otherwise determined by the Administrator, the Employees eligible to participate in each such sub-plan will participate in a separate Offering.
The Administrator, in its sole discretion and on such terms and conditions as it may provide, may delegate to one or more individuals all or any part of its authority and powers under the Plan. Every
finding, decision and determination made by the Administrator (or its designee) will, to the full extent permitted by law, be final and binding upon all parties.
15.
Designation of Beneficiary.
(a) A
participant may designate a beneficiary who is to receive any shares of Common Stock and cash, if any, from the participant's account under the Plan in the event of
such participant's death subsequent to an Exercise Date on which the option is exercised but prior to delivery to such participant of such shares and cash. In addition, a participant may designate a
beneficiary who is to receive any cash from the participant's account under the Plan in the event of such participant's death prior to exercise of the option. If a participant is married and the
designated beneficiary is not the spouse, spousal consent will be required for such designation to be effective.
(b) The
participant may change such designation of beneficiary at any time by written notice. In the event of the death of a participant and in the absence of a beneficiary
validly designated under the Plan who is living at the time of such participant's death, the Company will deliver such shares and/or cash to the executor or administrator of the estate of the
participant, or if no such executor or administrator has been appointed (to the knowledge of the Company), the Company, in its discretion, may deliver such shares and/or cash to the spouse or to any
one or more dependents or relatives of the participant, or if no spouse, dependent or relative is known to the Company, then to such other person as the Company may designate.
(c) All
beneficiary designations under this Section 15 will be made in such form and manner as the Administrator may prescribe from time to time. Notwithstanding
Sections 15(a) and (b) above, the Company and/or the Administrator may decide not to permit such designations by participants in non-U.S. jurisdictions to the extent permitted by U.S.
Treasury Regulation Section 1.423-2(f).
16.
Transferability.
Neither Contributions credited to a participant's account nor any rights with regard to the
exercise of an option or to receive shares of Common Stock under the Plan may be
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assigned,
transferred, pledged or otherwise disposed of in any way (other than by will, the laws of descent and distribution or as provided in Section 15) by the participant. Any such attempt
at assignment, transfer, pledge or other disposition will be without effect, except that the Company may treat such act as an election to withdraw from an Offering Period in accordance with
Section 10.
17.
Use of Funds.
The Company may use all Contributions received or held by the Company under the Plan for any
corporate purpose, and the Company will not be obligated to segregate such Contributions, except under Offerings in which applicable local law requires that Contributions to the Plan by participants
be segregated from the Company's general corporate funds and/or deposited with an independent third party for participants in non-U.S. jurisdictions. Until shares of Common Stock are issued under the
Plan (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company), a participant will only have the rights of an unsecured creditor with
respect to such shares.
18.
Reports.
Individual accounts will be maintained for each participant in the Plan. Statements of account will
be given to participating Employees at least annually, which statements will set forth the amounts of Contributions, the Purchase Price, the number of shares of Common Stock purchased and the
remaining cash balance, if any.
19.
Adjustments, Dissolution, Liquidation or Change of Control.
(a)
Adjustments.
In the event that any dividend or other distribution (whether in the form of cash, Common
Stock, other securities, or other property), recapitalization, stock split, reverse stock split, reorganization, merger, consolidation, split-up, spin-off, combination, repurchase, or exchange of
Common Stock or other securities of the Company, or other change in the corporate structure of the Company affecting the Common Stock such that an adjustment is appropriate in order to prevent
dilution or enlargement of the benefits or potential benefits intended to be made available under the Plan, the Administrator will adjust the number and class of Common Stock which may be delivered
under the Plan, the Purchase Price per share and the number of shares of Common Stock covered by each option under the Plan which has not yet been exercised, and the numerical limits of
Sections 7 and 13.
(b)
Dissolution or Liquidation.
In the event of the proposed dissolution or liquidation of the Company, any
Offering Period then in progress will be shortened by setting a new Exercise Date (the "New Exercise Date"), and will terminate immediately prior to the consummation of such proposed dissolution or
liquidation, unless provided otherwise by the Board. The New Exercise Date will be before the date of the Company's proposed dissolution or liquidation. The Board will notify each participant in
writing or electronically, at least ten (10) business days prior to the New Exercise Date, that the Exercise Date for the participant's option has been changed to the New Exercise Date and that
the participant's option will be exercised automatically on the New Exercise Date, unless prior to such date the participant has withdrawn from the Offering Period as provided in Section 10.
(c)
Change of Control.
In the event of a Change of Control, each outstanding option will be assumed or an
equivalent option substituted by the successor corporation or a Parent or Subsidiary of the successor corporation. In the event that the successor corporation refuses to assume or substitute for the
option, any Offering Period then in progress will be shortened by setting a new Exercise Date (the "New Exercise Date") and any Offering Period then in progress will end on the New Exercise Date. The
New Exercise Date will be before the date of the Company's proposed Change of Control. The Board will notify each participant in writing or electronically, at least ten (10) business days prior
to the New Exercise Date, that the Exercise Date for the participant's option has been changed to the New Exercise Date and that the participant's option will be exercised automatically on the New
Exercise Date, unless prior to such date the participant has withdrawn from the Offering Period as provided in Section 10.
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20.
Amendment or Termination.
(a) The
Administrator may at any time and for any reason terminate or amend the Plan. Except as provided in Section 19, no such termination can affect options
previously granted under the Plan, provided that an Offering Period may be terminated by the Administrator on any Exercise Date if the Administrator determines that the termination or suspension of
the Plan is in the best interests of the Company and its stockholders. Except as provided in Section 19 and this Section 20, no amendment may make any change in any option theretofore
granted which adversely affects the rights of any participant. To the extent necessary to comply with Section 423 of the Code (or any successor rule or provision or any other applicable law,
regulation or stock exchange rule), the Company will obtain stockholder approval in such a manner and to such a degree as required.
(b) Without
stockholder consent and without regard to whether any participant rights may be considered to have been "adversely affected," the Administrator will be entitled
to change the Offering Periods, designate separate Offerings, limit the frequency and/or number of changes in the amount withheld during an Offering Period, establish the exchange ratio applicable to
amounts withheld in a currency other than U.S. dollars, permit Contributions in excess of the amount designated by a participant in order to adjust for delays or mistakes in the Company's processing
of properly completed withholding elections, establish reasonable waiting and adjustment periods and/or accounting and crediting procedures to ensure that amounts applied toward the purchase of Common
Stock for each participant properly correspond with Contribution amounts, and establish such other limitations or procedures as the Administrator determines in its sole discretion advisable which are
consistent with the Plan.
(c) In
the event the Administrator determines that the ongoing operation of the Plan may result in unfavorable financial accounting consequences, the Board may, in its
discretion and, to the extent necessary or desirable, modify, amend or terminate the Plan to reduce or eliminate such accounting consequence including, but not limited to:
(i) amending
the Plan to conform with the safe harbor definition under Statement of Financial Accounting Standards Codification Topic 718 (or any successor thereto),
including with respect to an Offering Period underway at the time;
(ii) altering
the Purchase Price for any Offering Period including an Offering Period underway at the time of the change in Purchase Price;
(iii) shortening
any Offering Period so that such Offering Period ends on a new Exercise Date, including an Offering Period underway at the time of the Board action;
(iv) reducing
the maximum percentage of Compensation a participant may elect to set aside as Contributions; and
(v) reducing
the maximum number of Shares a participant may purchase during any Offering Period.
Such
modifications or amendments will not require stockholder approval or the consent of any Plan participants.
21.
Notices.
All notices or other communications by a participant to the Company under or in connection with the
Plan will be deemed to have been duly given when received in the form and manner specified by the Company at the location, or by the person, designated by the Company for the receipt thereof.
22.
Conditions Upon Issuance of Shares.
Shares of Common Stock will not be issued with respect to an option
under the Plan unless the exercise of such option and the issuance and delivery of such
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shares
pursuant thereto will comply with all applicable provisions of law, domestic or foreign, including, without limitation, the Securities Act of 1933, as amended, including the rules and
regulations promulgated thereunder, the Exchange Act, and the requirements of any stock exchange upon which the shares may then be listed, and will be further subject to the approval of counsel for
the Company with respect to such compliance.
As
a condition to the exercise of an option, the Company may require the person exercising such option to represent and warrant at the time of any such exercise that the shares are being
purchased only for investment and without any present intention to sell or distribute such shares if, in the opinion of counsel for the Company, such a representation is required by any of the
aforementioned applicable provisions of law.
23.
Term of Plan.
The Plan will become effective upon the earlier to occur of its adoption by the Board or its
approval by the stockholders of the Company. It will continue in effect for a term of ten (10) years, unless sooner terminated under Section 20.
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SAMPLE SUBSCRIPTION AGREEMENT
RAMBUS INC.
2006 EMPLOYEE STOCK PURCHASE PLAN
SUBSCRIPTION AGREEMENT
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Original Application
Change in Payroll Deduction Rate
Change of Beneficiary(ies)
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Offering Date:
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1.
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hereby elects to participate in the Rambus Inc. 2006 Employee Stock Purchase Plan (the "Plan") and
subscribes to purchase shares of the Company's Common Stock in accordance with this Subscription Agreement and the Plan.
2.
I
hereby authorize payroll deductions from each paycheck in the amount of
% of my Compensation on each payday
(from 1 to 15%) during the Offering Period in accordance with the Plan. (Please note that no fractional percentages are permitted.)
3.
I
understand that said payroll deductions will be accumulated for the purchase of shares of Common Stock at the applicable Purchase Price determined in
accordance with the Plan. I understand that if I do not withdraw from an Offering Period, any accumulated payroll deductions will be used to automatically exercise my option.
4.
I
have received a copy of the complete Plan. I understand that my participation in the Plan is in all respects subject to the terms of the Plan. I understand
that my ability to exercise the option under this Subscription Agreement is subject to stockholder approval of the Plan.
5.
Shares
of Common Stock purchased for me under the Plan should be issued in the name(s) of Employee or Employee and Spouse only.
6.
I
understand that if I dispose of any shares received by me pursuant to the Plan within 2 years after the Enrollment Date (the first day of the
Offering Period during which I purchased such shares) or one year after the Exercise Date, I will be treated for federal income tax purposes as having received ordinary income at the time of such
disposition in an amount equal to the excess of the fair market value of the shares at the time such shares were purchased by me over the price which I paid for the shares.
I
hereby agree to notify the Company in writing within 30 days after the date of any disposition of my shares and I will make adequate provision for Federal, state or other tax withholding
obligations, if any, which arise upon the disposition of the Common Stock
. The Company may, but will not be obligated to, withhold from my compensation the amount necessary to
meet any applicable withholding obligation including any withholding necessary to make available to the Company any tax deductions or benefits attributable to sale or early disposition of Common Stock
by me. If I dispose of such shares at any time after the expiration of the 2-year and 1-year holding periods, I understand that I will be treated for federal income tax purposes as having received
income only at the time of such disposition, and that such income will be taxed as ordinary income only to the extent of an amount equal to the lesser of (1) the excess of the fair market value
of the shares at the time of such disposition over the purchase price which I paid for the shares, or (2) 15% of the fair market value of the shares on the first day of the Offering Period. The
remainder of the gain, if any, recognized on such disposition will be taxed as capital gain.
7.
I
hereby agree to be bound by the terms of the Plan. The effectiveness of this Subscription Agreement is dependent upon my eligibility to participate in the
Plan.
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-
8.
-
In
the event of my death, I hereby designate the following as my beneficiary(ies) to receive all payments and/or shares due me under the Plan:
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NAME: (Please print)
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(First)
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(Middle)
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(Last)
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Relationship
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Percentage Benefit
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(Address)
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NAME: (please print)
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(First)
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(Middle)
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(Last)
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Relationship
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Percentage of Benefit
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(Address)
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Employee's Social Security Number:
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Employee's Address:
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I
UNDERSTAND THAT THIS SUBSCRIPTION AGREEMENT WILL REMAIN IN EFFECT THROUGHOUT SUCCESSIVE OFFERING PERIODS UNLESS TERMINATED BY ME.
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Dated:
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Signature of Employee
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Spouse's Signature
(If beneficiary other than spouse)
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SAMPLE WITHDRAWAL NOTICE
RAMBUS INC.
2006 EMPLOYEE STOCK PURCHASE PLAN
NOTICE OF WITHDRAWAL
The
undersigned participant in the Offering Period of the Rambus Inc. 2006 Employee Stock Purchase Plan which began on
,
(the "Enrollment
Date") hereby notifies the Company that he or she hereby withdraws from the Offering Period.
He or she hereby directs the Company to pay to the undersigned as promptly as practicable all the payroll deductions credited to his or her account with respect to such Offering Period. The
undersigned understands and agrees that his or her option for such Offering Period will be automatically terminated. The undersigned understands further that no further payroll deductions will be made
for the purchase of shares in the current Offering Period and the undersigned will be eligible to participate in succeeding Offering Periods only by delivering to the Company a new Subscription
Agreement.
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Name and Address of Participant:
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Signature:
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Date:
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ANNUAL MEETING
OF STOCKHOLDERS APRIL 24, 2014 9:00 a.m. Pacific Time
www.virtualshareholdermeeting.com/RMBS2014 Important Notice Regarding the
Availability of Proxy Materials for the Annual Meeting: The Notice and Proxy
Statement and Annual Report are available at www.proxyvote.com. M67317-P48464
Rambus Inc. PROXY FOR THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD APRIL 24,
2014. THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF RAMBUS
INC. The undersigned stockholder of Rambus Inc., a Delaware corporation (the
"Company"), hereby acknowledges receipt of the Notice of Annual
Meeting of Stockholders and accompanying Proxy Statement, each dated March
14, 2014, and hereby appoints Ronald Black and Jae Kim, and each of them as
proxies and attorneys-in-fact, each with full power of substitution to
represent the undersigned at the Annual Meeting of Stockholders of Rambus
Inc. to be held on April 24, 2014 at 9:00 a.m. Pacific Time, at
www.virtualshareholdermeeting.com/RMBS2014 and at any adjournment or postponement
thereof, and to vote all shares of common stock of the Company held of record
by the undersigned as hereinafter specified upon the proposals listed on the
reverse side. THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER
DIRECTED HEREIN. IF NO SPECIFICATION IS MADE, THIS PROXY WILL BE VOTED
"FOR" PROPOSALS 1, 2, 3, 4 AND 5 ON THE REVERSE SIDE AND, AS THE
PROXIES DEEM ADVISABLE, ON SUCH OTHER MATTERS AS MAY PROPERLY COME BEFORE THE
MEETING OR MAY OTHERWISE BE ALLOWED TO BE CONSIDERED AT THE MEETING. IN ORDER
TO ASSURE YOUR REPRESENTATION AT THE ANNUAL MEETING OF STOCKHOLDERS, PLEASE
MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY IN THE ENCLOSED
ENVELOPE. SEE REVERSE SIDE SEE REVERSE SIDE CONTINUED AND TO BE SIGNED ON
REVERSE SIDE
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TO VOTE, MARK
BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: KEEP THIS PORTION FOR YOUR
RECORDS DETACH AND RETURN THIS PORTION ONLY THIS PROXY CARD IS VALID ONLY
WHEN SIGNED AND DATED. Signature (Joint Owners) Date Signature [PLEASE SIGN
WITHIN BOX] Date VOTE BY INTERNET Before The Meeting - Go to
www.proxyvote.com Use the Internet to transmit your voting instructions and
for electronic delivery of information up until 11:59 P.M. Eastern Time the
day before the cut-off date or meeting date. Have your proxy card in hand
when you access the web site and follow the instructions to obtain your
records and to create an electronic voting instruction form. During The
Meeting - Go to www.virtualshareholdermeeting.com/RMBS2014 You may attend the
Meeting via the Internet and vote during the Meeting. Have the information
that is printed in the box marked by the arrow available and follow the
instructions. VOTE BY PHONE - 1-800-690-6903 Use any touch-tone telephone to
transmit your voting instructions up until 11:59 P.M. Eastern Time the day
before the cut-off date or meeting date. Have your proxy card in hand when
you call and then follow the instructions. VOTE BY MAIL Mark, sign and date
your proxy card and return it in the postage-paid envelope we have provided or
return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY
11717. ATTN: SECRETARY 1050 ENTERPRISE WAY, SUITE 700 SUNNYVALE, CALIFORNIA
94089 M67316-P48464 RAMBUS INC. The Board of Directors unanimously recommends
a "For" vote on Proposals 1, 2, 3, 4 and 5. 1. Election of
Directors For Against Abstain Nominees: ! ! ! 1a. J. Thomas Bentley ! ! ! 1b.
Charles Kissner ! ! ! 1c. David Shrigley For Against Abstain ! ! ! 2.
Advisory vote to approve named executive officer compensation. ! ! ! 3. Approval
of an amendment to the 2006 Equity Incentive Plan to increase the number of
shares of common stock of the Company reserved for issuance thereunder by
10,000,000 shares. ! ! ! 4. Approval of an amendment to the 2006 Employee
Stock Purchase Plan to increase the number of shares of common stock of the
Company reserved for issuance thereunder by 1,500,000 shares. ! ! ! 5.
Ratification of PricewaterhouseCoopers LLP as our independent registered
public accounting firm for the fiscal year ending December 31, 2014. Please
sign exactly as your name appears above. When shares are registered in the
names of two or more persons, whether as joint tenants, as community property
or otherwise, both or all of such persons should sign. When signing as
attorney, executor, administrator, trustee, guardian or in another fiduciary
capacity, please give full title as such. If a corporation, please sign in
full corporate name by President or other authorized person. If a
partnership, please sign in partnership's name by authorized person.
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