<PAGE> 1
SCHEDULE 14A INFORMATION
(Rule 14a-101)
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF
THE SECURITIES EXCHANGE ACT OF 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only
(as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12
VIASAT, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE> 2
VIASAT, INC.
2290 COSMOS COURT
CARLSBAD, CALIFORNIA 92009
NOTICE OF ANNUAL MEETING OF
STOCKHOLDERS AND PROXY STATEMENT
To the Stockholders of ViaSat, Inc.
Notice is hereby given that the Annual Meeting of Stockholders of ViaSat,
Inc. (the "Company"), will be held at the Del Mar Hilton, 15575 Jimmy Durante
Boulevard, Del Mar, California on Wednesday, September 2, 1998 at 8:30 a.m. for
the following purposes:
1. To elect two directors for a three-year term to expire at the 2001
Annual Meeting of Stockholders. The present Board of Directors of the
Company has nominated and recommends for election as directors the
following two persons:
JEFFREY M. NASH
B. ALLEN LAY
2. To consider and vote upon a proposal to approve and adopt The 1996
Equity Participation Plan of ViaSat, Inc., as amended and restated
herein (the "Equity Plan").
3. To transact such other business as may properly come before the meeting
or any adjournment or postponement thereof.
The Board of Directors has fixed the close of business on July 6, 1998 as
the record date for the determination of stockholders entitled to notice of and
to vote at the Annual Meeting and at any adjournment or postponement thereof.
Accompanying this Notice of Annual Meeting is a proxy. WHETHER OR NOT YOU
EXPECT TO BE AT THE MEETING, PLEASE COMPLETE, SIGN AND DATE THE ENCLOSED PROXY
AND RETURN IT PROMPTLY.
BY ORDER OF THE BOARD OF DIRECTORS
/S/ MARK D. DANKBERG
Mark D. Dankberg
Chairman of the Board
and Chief Executive Officer
Carlsbad, California
July 27, 1998
<PAGE> 3
VIASAT, INC.
2290 COSMOS COURT
CARLSBAD, CALIFORNIA 92009
PROXY STATEMENT
The Board of Directors of the Company is soliciting the enclosed proxy for
use at the Annual Meeting of Stockholders to be held on September 2, 1998, at
8:30 a.m., at the Del Mar Hilton, 15575 Jimmy Durante Boulevard, Del Mar,
California. This Proxy Statement was first mailed to stockholders on or about
July 27, 1998.
All stockholders who find it convenient to do so are cordially invited to
attend the meeting in person. In any event, please complete, sign, date and
return the proxy in the enclosed envelope.
A proxy may be revoked by written notice to the Secretary of the Company at
any time prior to the voting of the proxy, or by executing a later proxy or by
attending the meeting and voting in person. Unrevoked proxies will be voted in
accordance with the instructions indicated in the proxies, or if there are no
such instructions, such proxies will be voted for the election of the Board's
nominees for director and for approval and adoption of the Equity Plan. Shares
represented by proxies that reflect abstentions or include "broker non-votes"
will be treated as present and entitled to vote for purposes of determining the
presence of a quorum. Abstentions and "broker non-votes" do not constitute a
vote "for" or "against" any matter and thus will be disregarded in the
calculation of "votes cast".
Stockholders of record at the close of business on July 6, 1998 will be
entitled to vote at the meeting. As of that date, 7,972,032 shares of common
stock, par value $.0001 per share ("Common Stock"), of the Company were
outstanding. Each share of Common Stock is entitled to one vote. A majority of
the outstanding shares of the Company, represented in person or by proxy at the
meeting, constitutes a quorum. A plurality of the votes cast at the meeting is
required to elect directors, and a majority of the votes cast at the meeting is
required to approve and adopt the Equity Plan.
The cost of preparing, assembling and mailing the Notice of Annual Meeting,
Proxy Statement and proxy will be borne by the Company.
PROPOSAL 1:
ELECTION OF DIRECTORS
The Board of Directors currently consists of five members. The Company's
Amended and Restated Certificate of Incorporation and Bylaws provide that the
Board of Directors shall be divided into three classes, as nearly equal in
number as possible, with staggered terms of office and provide that upon the
expiration of the term of office for a class of directors, nominees for such
class shall be elected for a term of three years or until their successors are
duly elected and qualified. At this meeting, two nominees for director are to be
elected as Class II directors for a three-year term expiring at the 2001 Annual
Meeting of Stockholders. The nominees are Jeffrey M. Nash and B. Allen Lay. The
one Class I and two Class III directors have two years and one year,
respectively, remaining on their terms in office. If no contrary indication is
made, proxies in the accompanying form are to be voted for Mr. Nash and Mr. Lay
or, in the event that Mr. Nash and/or Mr. Lay is not a candidate or is unable to
serve as a director at the time of the election (which is not currently
expected), for any nominee who shall be designated by the Board of Directors to
fill such vacancies. Mr. Nash and Mr. Lay are members of the present Board of
Directors.
<PAGE> 4
INFORMATION REGARDING DIRECTORS
Set forth below is certain information concerning the nominees to the Board
of Directors, as well as those directors whose terms are continuing after the
meeting.
NOMINEES FOR ELECTION TO THE BOARD OF DIRECTORS
FOR A THREE-YEAR TERM EXPIRING AT THE
2001 ANNUAL MEETING OF STOCKHOLDERS
<TABLE>
<CAPTION>
NAME AGE PRESENT POSITION WITH THE COMPANY
---- --- ---------------------------------
<S> <C> <C>
Jeffrey M. Nash............................. 50 Director
B. Allen Lay................................ 63 Director
</TABLE>
DR. JEFFREY M. NASH has been a director of the Company since 1987. Since
1994, he has been President of Digital Perceptions Inc., a consulting and
software development firm serving the defense, communications, general aviation
and commercial computer industries. From August 1995 to December 1997, he was
President, Chief Executive Officer and a director of TransTech Information
Management Systems, Inc., a privately-held company which produced software and
mobile systems for the towing and recovery industry. From 1989 to 1994, he was
the Chief Executive Officer and President of Visqus Corporation as well as
Conner Technology, Inc., both subsidiaries of Conner Peripherals, Inc. Dr. Nash
is currently a director of REMEC, Inc., a publicly-held company which
manufactures microwave multi-function modules, Tiernan Communications, Inc., a
privately-held company manufacturing high definition television equipment, Prisa
Networks, a privately-held company manufacturing fiber channel networking
products for high-end storage area networks and ORINCON Technology Inc., a
privately-held defense and commercial technical services and software company.
He also serves as a Director and Chairman of the Board for Esscor, Inc., a
privately-held electrical utility power plant simulator company.
B. ALLEN LAY has been a director of the Company since 1996. Since 1983, he
has been a General Partner of Southern California Ventures ("SCV"), a venture
capital company. Mr. Lay is currently a director of PairGain Technology, Inc., a
publicly-held telecommunications company, Kofax Imaging Systems, a publicly-held
document imaging systems company, Helisys, Inc., a publicly-held rapid
prototyping systems company, Physical Optics Corporation, a privately-held
optical systems company and Waveband Corporation, a privately-held milimeter
wave scanning antennas and sensor company.
MEMBERS OF THE BOARD OF DIRECTORS CONTINUING IN OFFICE
TERM EXPIRING AT THE
1999 ANNUAL MEETING OF STOCKHOLDERS
<TABLE>
<CAPTION>
NAME AGE PRESENT POSITION WITH THE COMPANY
---- --- ---------------------------------
<S> <C> <C>
Mark D. Dankberg........................... 43 Chairman, President and CEO
James F. Bunker............................ 64 Director
</TABLE>
MARK D. DANKBERG was a founder of the Company and has served as Chairman of
the Board, President and Chief Executive Officer of the Company since its
inception in May 1986. Prior to founding the Company, he was Assistant Vice
President of M/A-COM Linkabit, a manufacturer of satellite telecommunications
equipment, from 1979 to 1986 and Communications Engineer for Rockwell
International from 1977 to 1979. Mr. Dankberg holds B.S.E.E. and M.E.E. degrees
from Rice University.
JAMES F. BUNKER has been a director of the Company since February 1997. In
July 1998, Mr. Bunker was named President and Chief Executive Officer of
Objective Communications, Inc., a publicly-held desktop video conferencing
company. Since 1993, Mr. Bunker has served as President of Windsor Consulting
Group, a privately held emerging technology and business transition consulting
company. From 1991 to 1993, he served as President of the VideoCipher division
of General Instruments, Inc. Prior to 1991, Mr. Bunker held several
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<PAGE> 5
senior management positions at M/A-Com Linkabit. Mr. Bunker received a B.S.
degree in Electrical Engineering from Northeastern University and completed the
Sloan School Senior Executive Program.
TERM EXPIRING AT THE
2000 ANNUAL MEETING OF STOCKHOLDERS
<TABLE>
<CAPTION>
NAME AGE PRESENT POSITION WITH THE COMPANY
---- --- ---------------------------------
<S> <C> <C>
Robert W. Johnson........................... 48 Director
</TABLE>
DR. ROBERT W. JOHNSON has been a director of the Company since 1986. Dr.
Johnson has been self-employed as a private investor from 1988 to the present.
From 1983 to 1988, Dr. Johnson was a Principal of SCV. Dr. Johnson currently is
a director of STAC Inc., a publicly-held company which manufactures
semiconductors and software for data storage and communications, and TimeLine
Vista, a privately-held company which manufactures professional Audio equipment.
BOARD COMMITTEES AND MEETINGS
During the fiscal year ended March 31, 1998, the Board of Directors held
five meetings. In that year, each director attended at least 75% of the
aggregate of all meetings held by the Board of Directors and all meetings held
by all committees of the Board on which such director served.
The Company has an Audit Committee currently consisting of Messrs. Johnson
and Lay. The Audit Committee held one meeting subsequent to the completion of
the fiscal 1998 audit. The Audit Committee's responsibilities include, among
other things, reviewing the selection of independent certified public
accountants and meeting with the accountants regarding their management letters
and the annual audit.
The Company has a Compensation Committee currently consisting of Messrs.
Nash and Bunker. The Compensation Committee held two meetings during fiscal
1998. The responsibilities of the Compensation Committee include, among other
things, reviewing, approving and reporting to the Board the Company's
compensation policies with respect to its executive officers, reviewing the
Company's overall compensation policy and making recommendations with respect
thereto, and administering the Company's stock based compensation plans.
COMPENSATION OF DIRECTORS
Directors of the Company are reimbursed for expenses actually incurred in
attending meetings of the Board of Directors and its committees. Each
independent director at the time of initial election to the Board of Directors
is granted an option to purchase 7,500 shares of Common Stock and on the date of
each annual meeting is granted an option to purchase 4,000 shares of Common
Stock.
RECOMMENDATION OF THE BOARD OF DIRECTORS
The Board of Directors unanimously recommends a vote FOR the nominees
listed above. Proxies solicited by the Company will be so voted unless
stockholders specify otherwise on their proxy cards.
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<PAGE> 6
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding the ownership
of the Company's Common Stock as of July 6, 1998, by: (i) each director and
nominee for director; (ii) each of the Company's executive officers; (iii) all
executive officers and directors of the Company as a group; and (iv) all other
stockholders known by the Company to be beneficial owners of more than five
percent of its Common Stock. Unless otherwise indicated, the address for each of
the stockholders listed below is c/o ViaSat, Inc., 2290 Cosmos Court, Carlsbad,
California 92009.
<TABLE>
<CAPTION>
AMOUNT AND NATURE PERCENT
NAME OF BENEFICIAL OWNERSHIP(1) BENEFICIAL OWNED
---- -------------------------- ----------------
<S> <C> <C>
Mark D. Dankberg....................................... 828,799 10.36%
Steven R. Hart......................................... 612,047 7.67
Robert W. Johnson...................................... 267,482 3.35
Mark J. Miller......................................... 265,979 3.33
Thomas E. Carter (2)................................... 205,831 2.58
Gregory D. Monahan..................................... 200,040 2.50
B. Allen Lay (3)....................................... 178,159 2.23
Jeffrey M. Nash........................................ 171,440 2.15
Andrew M. Paul......................................... 73,864 .93
Robert L. Barrie....................................... 12,298 .15
James F. Bunker........................................ 4,834 .06
Frank Drdek............................................ -- --
All directors and executive officers as a group (12
persons)............................................. 2,820,773 34.82
</TABLE>
- ---------------
(1) Includes the following shares issuable upon the exercise of outstanding
stock options which are exercisable within 60 days of July 6, 1998 ("Option
Shares"): Mr. Dankberg -- 27,939 Option Shares; Mr. Hart -- 7,570 Option
Shares; Dr. Johnson -- 6,402 Option Shares; Mr. Miller -- 7,403 Option
Shares; Mr. Carter -- 15,490 Option Shares; Mr. Monahan -- 29,531 Option
Shares; Mr. Lay -- 6,402 Option Shares; Dr. Nash -- 6,402 Option Shares; Mr.
Paul -- 9,098 Option Shares; Mr. Barrie -- 10,000 Option Shares; and Mr.
Bunker -- 3,834 Option Shares.
(2) Includes (i) 1,466 shares of Common Stock held by Janna C. Carter Education
Trust, (ii) 1,466 shares of Common Stock held by Michelle L. Carter
Education Trust, and (iii) 1,466 shares of Common Stock held by Bradley T.
Carter Education Trust.
(3) Includes (i) 15,200 shares of Common Stock held by Lay Charitable Remainder
Unitrust, and (ii) 15,100 shares of Common Stock held by Lay Living Trust.
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<PAGE> 7
EXECUTIVE COMPENSATION AND OTHER INFORMATION
The information set forth below is submitted with respect to each of the
Company's executive and other principal officers.
<TABLE>
<CAPTION>
NAME AGE POSITION
---- --- --------
<S> <C> <C>
Mark D. Dankberg 43 Chairman of the Board, President and Chief Executive Officer
Gregory D. Monahan 52 Vice President, Chief Financial Officer and General Counsel
Thomas E. Carter 44 Vice President and General Manager of Electronics Systems
Group
Andrew M. Paul 42 Vice President -- Commercial Business Development
James P. Collins 54 Vice President -- Business Development of Electronics
Systems Group
Mark J. Miller 38 Vice President, Chief Technical Officer and Secretary
Steven R. Hart 44 Vice President -- Engineering and Chief Technical Officer
Robert L. Barrie 54 Vice President -- Operations
Frank J. Drdek 51 Vice President -- Human Resources
</TABLE>
Mr. Dankberg was a founder of the Company and has served as Chairman of the
Board, President and Chief Executive Officer of the Company since its inception
in May 1986. Prior to founding the Company, he was Assistant Vice President of
M/A-COM Linkabit, a manufacturer of satellite telecommunications equipment, from
1979 to 1986 and Communications Engineer for Rockwell International from 1977 to
1979. Mr. Dankberg holds B.S.E.E. and M.E.E. degrees from Rice University.
Mr. Monahan has served as Vice President, Chief Financial Officer and
General Counsel of the Company since December 1988. Prior to joining the
Company, Mr. Monahan was Assistant Vice President of M/A-COM Linkabit from 1978
to 1988. Mr. Monahan holds a J.D. degree from the University of San Diego and
B.S.M.E. and M.B.A. degrees from the University of California, Berkeley.
Dr. Carter has served as Vice President and General Manager of Electronics
Systems Group since March 1997 and as Vice President of Engineering since
November 1990. Prior to joining the Company, Dr. Carter served in several
positions including Business Area Manager, Program Manager and System
Engineering Department Manager in the Military Electronics and Avionics Division
of TRW Inc. Dr. Carter holds a Ph.D. in Electrical Engineering from the
University of Southern California and B.S.E.E. and M.S.E.E. degrees from Rice
University.
Mr. Paul has served as Vice President -- Commercial Business Development
since March 1997 and as Vice President -- Commercial Operations of the Company
since March 1993. Prior to joining the Company, Mr. Paul served as Vice
President and General Manager of the Western Region of Evernet Systems, Inc., a
computer network integrator, from 1992 to 1993. Previously, Mr. Paul was Vice
President of Sales at ComStream Corp. from 1989 to 1992. Mr. Paul holds a B.A.
degree from Stanford University.
Mr. Collins has served as Vice President -- Business Development of
Electronics Systems Group since March 1997 and Vice President of Business
Development since December 1988. Prior to joining the Company, Mr. Collins was
Assistant Vice President of M/A-COM Linkabit from 1982 to 1988. Mr. Collins was
a Director of Marketing while at General Dynamics from 1976 to 1982 and prior to
that served on active duty in the U.S. Army for ten years. Mr. Collins currently
serves in the U.S. Army Reserve as a Brigadier General. He holds a B.A. degree
from Hofstra University and an M.S. degree in Geodetic Science from Ohio State
University.
Mr. Miller was a founder of the Company and has served as Vice President
and Chief Technical Officer of the Company since 1993 and as Engineering Manager
and Secretary since 1986. Prior to joining the Company, Mr. Miller was a Staff
Engineer at M/A-COM Linkabit from 1983 to 1986. Mr. Miller holds a B.S.E.E.
degree from the University of California, San Diego and a M.S.E.E. degree from
the University of California, Los Angeles.
Mr. Hart was a founder of the Company and has served as Vice
President -- Engineering and Chief Technical Officer since March 1997, as Vice
President and Chief Technical Officer since 1993 and as
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<PAGE> 8
Engineering Manager since 1986. Prior to joining the Company, Mr. Hart was a
Staff Engineer and Manager at M/A-COM Linkabit from 1982 to 1986. Mr. Hart holds
a B.S. in Mathematics from the University of Nevada, Las Vegas and a M.A. in
Mathematics from the University of California, San Diego.
Mr. Barrie joined the Company in January 1997 as Vice President of
Operations. Prior to joining the Company, Mr. Barrie was Vice President of
Operations at Pacific Communications Sciences Inc. from 1987 to 1996. Mr. Barrie
served in several positions at OAK Communications, Inc. from 1980 to 1986
including Vice President -- Program Management. Mr. Barrie was a Vice President
at LaPointe Industries from 1969 to 1980. Mr. Barrie holds a B.S. degree in
Business from Charter Oak State College and a M.B.A. from National University.
Mr. Drdek joined the Company in February 1998 as the Vice President of
Human Resources. Prior to joining the Company, Mr. Drdek served as Vice
President of Human Resources at Proxima Corporation from January 1992 to
February 1998. Mr. Drdek's previous experience includes serving as Vice
President of Human Resources for Topaz/Square D Corporation and Director of
Human Resources for NCR Corporation and Caterpillar Corporation. Mr. Drdek holds
a B.S. degree in Business Administration from San Diego State University and a
business teaching credential from Palomar College.
EXECUTIVE COMPENSATION
The following table sets forth certain summary information concerning
compensation paid by the Company to or on behalf of the Company's Chief
Executive Officer and each of the Company's other four most highly compensated
executive officers in fiscal 1998, 1997, and 1996. Unless otherwise indicated,
all references in this Proxy Statement to a fiscal year refer to the fiscal year
ending on March 31. For example, references to fiscal 1998 refer to the fiscal
year beginning on April 1, 1997 and ending on March 31, 1998.
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
AWARDS
FISCAL YEAR ------------
COMPENSATION NUMBER OF
------------------ SECURITIES
FISCAL UNDERLYING ALL OTHER
NAME YEAR SALARY BONUS OPTIONS COMPENSATION (1)
---- ------ -------- ------- ------------ ----------------
<S> <C> <C> <C> <C> <C>
Mark D. Dankberg 1998 $218,000 $81,000 15,000 $4,969
Chairman, President 1997 190,865 35,000 14,670 4,969
and CEO 1996 165,000 35,000 14,670 5,726
Thomas E. Carter 1998 159,600 24,400 4,000 4,846
Vice President -- General Manager 1997 140,000 10,000 2,934 4,846
of Electronics Systems Group 1996 131,000 10,000 40,343 4,723
Andrew M. Paul 1998 152,431 5,000 -- 2,460
Vice President -- Commercial 1997 135,000 19,000 5,868 2,460
Business Development 1996 125,938 5,000 8,802 2,274
Robert L. Barrie 1998 140,000 15,000 -- --
Vice President -- Operations 1997 28,194 -- 50,000 --
Gregory D. Monahan 1998 137,599 10,000 2,000 4,837
Vice President, CFO and 1997 130,998 8,000 11,003 4,837
General Counsel 1996 124,000 8,000 14,670 4,703
</TABLE>
- ---------------
(1) All other compensation consists of Company matching 401(k) contributions.
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<PAGE> 9
The following table sets forth certain summary information concerning
individual grants of stock options made during fiscal 1998 to each of the
Company's executive officers named in the Summary Compensation Table.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
INDIVIDUAL GRANTS VALUE AT ASSUMED
-------------------------------------------------------- ANNUAL RATES OF
NUMBER OF % OF TOTAL STOCK PRICE
SECURITIES OPTIONS APPRECIATION FOR
UNDERLYING GRANTED TO EXERCISE OR OPTION TERM(1)
OPTIONS EMPLOYEES IN BASE PRICE EXPIRATION ---------------------
NAME GRANTED FISCAL YEAR 1998 PER SHARE DATE 5% 10%
---- ---------- ---------------- ----------- ---------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Mark D. Dankberg 15,000 5.57% $14.03 5/28/07 $101,076 $285,603
Thomas Carter 4,000 1.48 12.75 5/28/07 32,704 81,281
Andrew M. Paul -- -- -- -- -- --
Robert L. Barrie -- -- -- -- -- --
Gregory D. Monahan 2,000 0.74 12.75 5/28/07 16,037 40,640
</TABLE>
- ---------------------------
(1) These amounts represent assumed rates of appreciation in the price of the
Common Stock during the terms of the options in accordance with rates
specified in applicable federal securities regulations. Actual gains, if
any, on stock option exercises will depend on the future price of the Common
Stock and overall stock market conditions. There is no representation that
the rates of appreciation reflected in this table will be achieved.
The following table sets forth certain information concerning exercises of
stock options by each of the Company's executive officers named in the Summary
Compensation Table during fiscal 1998, and the number of options and value of
unexercised options held by each such person at March 31, 1998.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
NUMBER OF UNDERLYING UNEXERCISED IN-THE-MONEY
SHARES OPTIONS AT YEAR-END OPTIONS AT YEAR-END(1)
ACQUIRED VALUE --------------------------- ---------------------------
NAME ON EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- ---------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Mark D. Dankberg -- -- 15,404 28,936 $234,910 $253,655
Thomas Carter 72,251 $1,202,575 1,027 18,009 14,028 244,401
Andrew M. Paul 18,482 242,794 4,404 6,454 74,556 95,368
Robert L. Barrie -- -- 10,000 40,000 70,000 280,000
Gregory D. Monahan -- -- 20,612 13,552 334,381 179,815
</TABLE>
- ---------------------------
(1) The dollar values have been calculated by determining the difference between
the fair market value of the securities underlying the options and the
exercise price at March 31, 1998.
COMPENSATION PLANS
401(k) Plan. The Company has established a tax-qualified employee savings
and retirement plan (the "401(k) Plan") effective January 1990 covering all
employees who have been employed by the Company for at least 90 days and who are
at least 21 years of age. Pursuant to the 401(k) Plan, employees may elect to
reduce their current compensation by not less than 1.0% nor more than 15.0% of
eligible compensation and have the amount of such reduction contributed to the
401(k) Plan. The 401(k) Plan permits, but does not require, additional cash
contributions to the 401(k) Plan by the Company. The trustee under the 401(k)
Plan invests the assets of the 401(k) Plan in designated investment options. The
401(k) Plan is intended to qualify under Section 401 of the Internal Revenue
Code (the "Code") so that contributions to the 401(k) Plan, and
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<PAGE> 10
income earned on plan contributions, are not taxable to employees until
withdrawn from the 401(k) Plan, and so that contributions by the Company are
deductible by the Company when made for income tax purposes.
Employee Stock Purchase Plan. The Company has established the ViaSat, Inc.
Employee Stock Purchase Plan (the "Employee Stock Purchase Plan") to assist
employees of the Company in acquiring a stock ownership interest in the Company
and to encourage them to remain in the employment of the Company. The Employee
Stock Purchase Plan is intended to qualify under Section 423 of the Code. A
maximum of 250,000 shares of Common Stock are reserved for issuance under the
Employee Stock Purchase Plan. The Employee Stock Purchase Plan permits eligible
employees to purchase Common Stock at a discount through payroll deductions
during specified six-month offering periods. No employee may purchase more than
$25,000 worth of stock in any calendar year. The price of shares purchased under
the Employee Stock Purchase Plan will be equal to 85% of the fair market value
of the Common Stock on the first or last day of the offering period, whichever
is lower. The Employee Stock Purchase Plan is administered by the Compensation
Committee. As of March 31, 1998, an aggregate of 52,092 shares of Common Stock
at prices ranging from $7.65 to $11.42 were purchased under the Employee Stock
Purchase Plan.
1993 Stock Option Plan. In 1993, the Company adopted the ViaSat, Inc. 1993
Stock Option Plan (the "1993 Stock Option Plan") to enable key employees,
consultants and non-employee directors of the Company to acquire a proprietary
interest in the Company, and thus to create in such persons an increased
interest in and a greater concern for the welfare of the Company. The 1993 Stock
Option Plan provided for aggregate option grants of up to 733,500 shares. As of
March 31, 1998, options to purchase an aggregate of 217,843 shares of Common
Stock at prices ranging from $0.34 to $4.50 were outstanding under the 1993
Stock Option Plan. No additional grants will be made under the 1993 Stock Option
Plan.
1996 Equity Participation Plan. In November, 1996 the Company adopted The
1996 Equity Participation Plan of ViaSat, Inc. (the "Equity Plan") to update and
replace the 1993 Stock Option Plan. The Equity Plan provides for the grant to
executive officers, other key employees, consultants and non-employee directors
of the Company of a broad variety of stock-based compensation alternatives such
as nonqualified stock options, incentive stock options, restricted stock and
performance awards. For a discussion of the material terms of the Equity Plan,
see "Proposal 2: Approval of the Equity Plan." As of March 31, 1998, options to
purchase an aggregate of 438,475 shares of Common Stock at prices ranging from
$9.00 to $18.81 were outstanding under the Equity Plan.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION.
During fiscal 1998, the Compensation Committee was comprised of Messrs.
Nash and Bunker. No interlocking relationship exists between any member of the
Compensation Committee and any member of any other company's board of directors
or compensation committee.
REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee (the "Committee") is responsible for
administering the Company's compensation policies and practices and approves all
elements of compensation for executive officers. The Committee reports regularly
to the Board of Directors on its activities. In general, the compensation
policies adopted by the Committee were designed to: (i) attract and retain
executives capable of leading the Company to meet its business objectives and
(ii) motivate the Company's executives to enhance long-term stockholder value.
Executive Officer Compensation
The Company's executive compensation program is comprised of base salary,
annual cash incentive bonus and long-term incentive compensation in the form of
stock option grants at current market prices.
The Company's compensation program for executive officers is designed to
provide a total compensation level (including both annual and long-term
incentives) that is competitive with survey companies. For executive officers
recently recruited by the Company, annual compensation rates and long-term
incentive
8
<PAGE> 11
awards reflect amounts necessary to attract them to the Company. The
compensation program is benchmarked by using surveys of companies in the high
technology industry with similar revenues and/or prospects. These companies,
which are representative of the firms the Company competes with for executive
talent and have jobs similar to those at the Company in magnitude, complexity
and scope of responsibility, form the basis for the survey group used by the
Committee.
Components of Executive Compensation
BASE SALARY is established by the Committee based on an executive's job
responsibilities, level of experience, individual performance and contribution
to the business, and information obtained from surveys. The Committee believes
that the executives' base salaries are at competitive levels relative to the
various markets from which the Company attracts its executive talent.
ANNUAL CASH INCENTIVE BONUS is established by the Committee at the end of
the fiscal year and is based on the Company's performance, individual
performance, and compensation surveys. Bonuses awarded in prior years are also
taken into consideration. The bonuses are at risk and are not arithmetically
derived using a bonus formula.
LONG-TERM INCENTIVES include awards of stock options, restricted stock, and
performance awards. The objective for the awards is to align closely executive
interests with the longer term interests of stockholders. These awards, which
are at risk and dependent on the creation of incremental stockholder value or
the attainment of cumulative financial targets over several years, represent a
significant portion of the total compensation opportunity provided for the
executive officers. Award sizes are based on individual performance, level of
responsibility, the individual's potential to make significant contributions to
the Company, and award levels at companies in the survey group. Long-term
incentives granted in prior years are also taken into consideration. For fiscal
1998, the Committee determined that the only form of long-term incentive awards
would be stock options. There were no restricted stock or performance awards
granted during fiscal 1998.
Compensation for the Chairman and Chief Executive Officer
Mr. Dankberg continues to provide outstanding personal leadership as the
Chief Executive Officer of the Company. Under Mr. Dankberg's direction, the
Company has achieved twelve consecutive years of internally generated revenue
growth and eleven consecutive years of profitability, and is well positioned to
benefit from its successes in developing and deploying products which utilize
Demand Assigned Multiple Access satellite networking technology. The Company's
fiscal 1998 achievements in revenue growth, order backlog, product development
and shipments were consistent with the Company's objectives. During fiscal 1998,
Mr. Dankberg earned a base salary of $218,000. In light of the leadership he
demonstrated during the year, in May 1997, the Committee granted Mr. Dankberg a
stock option to purchase 15,000 shares of Common Stock at $14.03 per share (110%
of the fair market value at the time of grant), and the Committee determined
that Mr. Dankberg should receive a $81,000 bonus.
Deductibility of Compensation in Excess of $1 Million Per Year
Section 162(m) of the Code, enacted in 1993, generally disallows a tax
deduction to public companies for compensation in excess of $1 million paid to a
company's Chief Executive Officer and any of its four other most highly
compensated executive officers. Qualifying performance-based compensation is not
subject to the deduction limit if certain requirements are met. For 1998 and
1999, the Company does not anticipate that there will be nondeductible
compensation for the Company positions in question. The Committee plans to
continue to review the matter for 1999 and future years in order to determine
the extent of possible modification to the Company's compensation arrangements.
Compensation Committee
Jeffrey M. Nash
James W. Bunker
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<PAGE> 12
PERFORMANCE GRAPH
The following graph shows the value of an investment of $100 in cash on
December 3, 1996 in (i) the Company's Common Stock, (ii) The NASDAQ
Telecommunications Index and (iii) The NASDAQ Composite Index.
COMPARISON OF CUMULATIVE TOTAL RETURNS
PERFORMANCE REPORT FOR
VIASAT, INC.
<TABLE>
<CAPTION>
MEASUREMENT PERIOD NASDAQ TELECOM NASDAQ
(FISCAL YEAR COVERED) VIASAT INDEX COMPOSITE INDEX
<S> <C> <C> <C>
12/3/96 100 100 100
12/31/96 100 102.39 99.32
3/31/97 104.17 95.72 93.99
6/30/97 161.11 117.95 110.94
9/30/97 230.56 137.29 129.69
12/31/97 151.44 145.26 120.81
3/31/98 197.22 184.15 141.22
</TABLE>
PROPOSAL 2:
APPROVAL OF THE EQUITY PLAN
At the Annual Meeting, the stockholders of the Company will be asked to
consider and vote upon a proposal to approve and adopt The 1996 Equity
Participation Plan of ViaSat, Inc., as amended and restated herein (the "Equity
Plan"). The Equity Plan was initially adopted by the Company's Board of
Directors and stockholders in November 1996.
DESCRIPTION OF THE PLAN
General Nature and Purpose. The Equity Plan was adopted (i) to further the
growth, development and financial success of the Company by providing additional
incentives to certain of its key employees who have been or will be given
responsibility for the management or administration of the Company's business
affairs, by assisting them to become owners of capital stock of the Company and
thus to benefit directly from its growth, development and financial success, and
(ii) to enable the Company to retain the services of the type of professional,
technical and managerial employees considered essential to the long-range
success of the Company, by providing and offering them the opportunity to become
owners of capital stock of the Company. The Equity Plan provides for the grant
to executive officers, other key employees, consultants and non-
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<PAGE> 13
employee directors of the Company of a broad variety of stock-based compensation
alternatives such as nonqualified stock options, incentive stock options,
restricted stock and performance awards.
The principal features of the Equity Plan are summarized below, but the
summary is qualified in its entirety by reference to the full text of the Equity
Plan which is set forth as Exhibit A to this Proxy Statement.
Administration. The Equity Plan is administered by the Compensation
Committee of the Board of Directors. In addition to administering the Equity
Plan, the Compensation Committee is also authorized to adopt, amend and rescind
rules relating to the administration of the Equity Plan.
Eligibility. Any employee or consultant selected by the Compensation
Committee is eligible to receive options under the Equity Plan. The Compensation
Committee, in its absolute discretion, will determine among the eligible
participants the individuals to whom options, restricted stock purchase rights
and performance awards are to be granted and the number of shares to be subject
thereto and the terms and conditions thereof.
Grant of Options. The Compensation Committee will from time to time, in its
absolute discretion, determine the number of shares to be subject to options
granted to selected employees and consultants, determine whether such options
are to be incentive stock options or non-qualified stock options, and determine
the terms and conditions of such options, consistent with the Equity Plan.
During the term of the Equity Plan, a person who is initially elected to
the Board and who is a non-employee director at the time of such initial
election automatically shall be granted an option to purchase 7,500 shares of
Common Stock on the date of such initial election and an option to purchase
4,000 shares of Common Stock on the date of each annual meeting of stockholders
after such initial election at which directors are elected to the Board.
Purchase Price of Optioned Shares. The price per share of the shares
subject to each option shall be set by the Compensation Committee; provided,
however, that such price shall be no less than the par value of a share of
Common Stock, unless otherwise permitted by applicable state law, and in the
case of incentive stock options and options intended to qualify as
performance-based compensation the price shall not be less than 100% of the fair
market value of a share of Common Stock on the date the option is granted. In
the case of incentive stock options granted to an individual then owning more
than 10% of the total combined voting power of all classes of stock of the
Company or any subsidiary or parent corporation thereof such price shall not be
less than 110% of the fair market value of a share of Common Stock on the date
the option is granted.
Terms of Options. Options granted under the Equity Plan may not be
exercised more then ten years after the date of grant, although the Compensation
Committee may grant options having shorter terms. The term shall not exceed five
years in the case of incentive stock options granted to an individual then
owning more than 10% of the total combined voting power of all classes of stock
of the Company. Except as limited by the Equity Plan or applicable law, the
Compensation Committee may extend the term of any outstanding option in
connection with any termination of employment or termination of consultancy of
the optionee, or amend any other term or condition of such option relating to
such a termination.
Exercise of Options. Upon the exercise of an option under the Equity Plan,
the optionee must make full cash payment to the Secretary of the Company for the
shares with respect to which the option, or portion thereof, is exercised.
However, the Compensation Committee may in its discretion allow various forms of
payment which are described in detail in the Equity Plan.
Other Stock Awards. The Equity Plan allows for various other awards
including restricted stock, performance awards, dividend equivalents, deferred
stock, stock payments, and stock appreciation rights ("SARs"). There have been
no such awards granted since the inception of the Equity Plan.
Amendment of the Plan. The Equity Plan may be wholly or partially amended
or otherwise modified, suspended or terminated at any time or from time to time
by the Board or the Compensation Committee. However, without approval of the
stockholders of the Company, the Equity Plan may not be amended to (i) increase
the maximum number of shares issuable upon exercise of options granted under the
Equity Plan
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<PAGE> 14
and (ii) no action of the Board or the Compensation Committee may be taken that
would otherwise require stockholder approval as a matter of applicable law,
regulation or rule.
Grants in 1997 and 1998. Options to purchase 175,000 and 269,450 shares of
Common Stock were granted under the Equity Plan during the fiscal years ended
March 31, 1997 and 1998, respectively. See "Option Grants in Last Fiscal Year"
table above for a list of the options granted to each of the Company's named
executive officers in fiscal 1998.
PROPOSED AMENDMENT TO THE EQUITY PLAN
A total of 750,000 shares of Common Stock are currently reserved for
issuance under the Equity Plan. The Board of Directors recommends an amendment
to the Equity Plan to increase the number of shares available for issuance under
the Equity Plan to 1,250,000.
As of July 6, 1998, options to purchase an aggregate of 570,976 shares of
Common Stock had been issued under the Equity Plan. Accordingly, only 179,024
shares of Common Stock were available for the issuance of new options. The Board
of Directors believes that increasing the number of shares available for
issuance under the Equity Plan is necessary in order for the Compensation
Committee to have sufficient flexibility to carry out its responsibilities to
(i) establish compensation programs that attract, motivate and retain executive
and other key employees of the Company and (ii) administer such programs in a
manner that benefits the long-term interests of the Company and its
stockholders.
REQUIRED VOTE TO APPROVE THE EQUITY PLAN AS RECOMMENDED BY THE BOARD OF
DIRECTORS
The affirmative vote of a majority of the shares present in person or
represented by proxy and entitled to vote at the meeting is required to approve
and adopt the Equity Plan. The Board of Directors unanimously recommends that
the stockholders vote FOR approval and adoption of the Equity Plan. Proxies
solicited by the Board of Directors will be so voted unless stockholders specify
otherwise on their proxy cards.
RELATIONSHIP WITH INDEPENDENT ACCOUNTANTS
The Company's financial statements for the year ended March 31, 1998 have
been examined by Price Waterhouse LLP. Representatives of Price Waterhouse LLP
are expected to be available at the meeting to respond to appropriate questions
and to make a statement if they desire to do so. The Company will select
independent accountants for the current year sometime after the meeting.
SECTION 16(A) REPORTING
Under Section 16(a) of the Securities Exchange Act of 1934, as amended,
directors, executive officers and beneficial owners of 10% or more of the Common
Stock ("Reporting Persons") are required to report to the Securities and
Exchange Commission on a timely basis the initiation of their status as a
Reporting Person and any changes with respect to their beneficial ownership of
the Common Stock. Based solely on its review of such forms received by it, or
written representations from certain Reporting Persons that no such forms were
required, the Company is aware of the following instances of noncompliance, or
late compliance, with such filing requirements during fiscal 1998 by its
directors, executive officers and beneficial owners of 10% or more of the Common
Stock: In June 1998, certain of the Company's executive officers and directors
filed a late Form 5 to report certain transactions.
STOCKHOLDER PROPOSALS
Any proposal of a stockholder of the Company intended to be presented at
the next Annual Meeting of Stockholders of the Company must be received by the
Secretary of the Company not later than March 22, 1999 to be considered for
inclusion in the Company's proxy statement and form of proxy relating to that
meeting. In addition, pursuant to a new rule of the Securities and Exchange
Commission which became effective on June 29, 1998, if the Company has not
received notice by June 5, 1999 of any matter a stockholder
12
<PAGE> 15
intends to propose for a vote at the next Annual Meeting of Stockholders, then a
proxy solicited by the Board of Directors may be voted on such matter in the
discretion of the proxy holder, without discussion of the matter in the proxy
statement soliciting such proxy and without such matter appearing as a separate
item on the proxy card.
OTHER MATTERS
The Company does not know of any business other than that described herein
which will be presented for consideration or action by the stockholders at the
meeting. If, however, any other business shall properly come before the meeting,
shares represented by proxies will be voted in accordance with the best judgment
of the persons named therein or their substitutes.
ANNUAL REPORT TO STOCKHOLDERS
The Company's Annual Report to Stockholders is being mailed with this Proxy
Statement to stockholders of record on July 6, 1998. Upon request, the Company
will furnish the Annual Report to any stockholder.
BY ORDER OF THE BOARD OF DIRECTORS
LOGO
Mark D. Dankberg
Chairman of the Board
and Chief Executive Officer
Carlsbad, California
July 27, 1998
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<PAGE> 16
EXHIBIT A
THE 1996 EQUITY PARTICIPATION PLAN
OF
VIASAT, INC.
ViaSat, Inc., a Delaware corporation, has adopted The 1996 Equity
Participation Plan of ViaSat, Inc. (the "Plan"), effective October 24, 1996, for
the benefit of its eligible employees, consultants and directors. The Plan
consists of two plans, one for the benefit of key Employees (as such term is
defined below) and consultants and one for the benefit of Independent Directors
(as such term is defined below).
The purposes of this Plan are as follows:
(1) To provide an additional incentive for directors, key Employees
and consultants to further the growth, development and financial success of
the Company by personally benefiting through the ownership of Company stock
and/or rights which recognize such growth, development and financial
success.
(2) To enable the Company to obtain and retain the services of
directors, key Employees and consultants considered essential to the long
range success of the Company by offering them an opportunity to own stock
in the Company and/or rights which will reflect the growth, development and
financial success of the Company.
ARTICLE I
DEFINITIONS
1.1 General. Wherever the following terms are used in this Plan they shall
have the meanings specified below, unless the context clearly indicates
otherwise.
1.2 Award Limit. "Award Limit" shall mean Five Hundred Thousand (500,000)
shares of Common Stock.
1.3 Board. "Board" shall mean the Board of Directors of the Company.
1.4 Change in Control. "Change in Control" shall mean a change in
ownership or control of the Company effected through either of the following
transactions:
(a) any person or related group of persons (other than the Company or
a person that directly or indirectly controls, is controlled by, or is
under common control with, the Company) directly or indirectly acquires
beneficial ownership (within the meaning of Rule 13d-3 under the Exchange
Act) of securities possessing more than fifty percent (50%) of the total
combined voting power of the Company's outstanding securities pursuant to a
tender or exchange offer made directly to the Company's stockholders which
the Board does not recommend such stockholders to accept; or
(b) there is a change in the composition of the Board over a period of
thirty-six (36) consecutive months (or less) such that a majority of the
Board members (rounded up to the nearest whole number) ceases, by reason of
one or more proxy contests for the election of Board members, to be
comprised of individuals who either (i) have been Board members
continuously since the beginning of such period or (ii) have been elected
or nominated for election as Board members during such period by at least a
majority of the Board members described in clause (i) who were still in
office at the time such election or nomination was approved by the Board.
1.5 Code. "Code" shall mean the Internal Revenue Code of 1986, as amended.
1.6 Committee. "Committee" shall mean the Compensation Committee of the
Board, or another committee of the Board, appointed as provided in Section 9.1.
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1.7 Common Stock. "Common Stock" shall mean the common stock of the
Company, par value $0.0001 per share, and any equity security of the Company
issued or authorized to be issued in the future, but excluding any preferred
stock and any warrants, options or other rights to purchase Common Stock. Debt
securities of the Company convertible into Common Stock shall be deemed equity
securities of the Company.
1.8 Company. "Company" shall mean ViaSat, Inc., a Delaware corporation.
1.9 Corporate Transaction. "Corporate Transaction" shall mean any of the
following stockholder-approved transactions to which the Company is a party:
(a) a merger or consolidation in which the Company is not the
surviving entity, except for a transaction the principal purpose of which
is to change the State in which the Company is incorporated, form a holding
company or effect a similar reorganization as to form whereupon this Plan
and all Options are assumed by the successor entity;
(b) the sale, transfer, exchange or other disposition of all or
substantially all of the assets of the Company, in complete liquidation or
dissolution of the Company in a transaction not covered by the exceptions
to clause (a), above; or
(c) any reverse merger in which the Company is the surviving entity
but in which securities possessing more than fifty percent (50%) of the
total combined voting power of the Company's outstanding securities are
transferred or issued to a person or persons different from those who held
such securities immediately prior to such merger.
1.10 Deferred Stock. "Deferred Stock" shall mean Common Stock awarded
under Article VII of this Plan.
1.11 Director. "Director" shall mean a member of the Board.
1.12 Dividend Equivalent. "Dividend Equivalent" shall mean a right to
receive the equivalent value (in cash or Common Stock) of dividends paid on
Common Stock, awarded under Article VII of this Plan.
1.13 Employee. "Employee" shall mean any officer or other employee (as
defined in accordance with Section 3401(c) of the Code) of the Company, or of
any corporation which is a Subsidiary.
1.14 Exchange Act. "Exchange Act" shall mean the Securities Exchange Act
of 1934, as amended.
1.15 Fair Market Value. "Fair Market Value" of a share of Common Stock as
of a given date shall be (i) the closing price of a share of Common Stock on the
principal exchange on which shares of Common Stock are then trading, if any (or
as reported on any composite index which includes such principal exchange), on
the trading day previous to such date, or if shares were not traded on the
trading day previous to such date, then on the next preceding date on which a
trade occurred, or (ii) if Common Stock is not traded on an exchange but is
quoted on NASDAQ or a successor quotation system, the mean between the closing
representative bid and asked prices for the Common Stock on the trading day
previous to such date as reported by NASDAQ or such successor quotation system;
or (iii) if Common Stock is not publicly traded on an exchange and not quoted on
NASDAQ or a successor quotation system, the Fair Market Value of a share of
Common Stock as established by the Committee (or the Board, in the case of
Options granted to Independent Directors) acting in good faith.
1.16 Grantee. "Grantee" shall mean an Employee or consultant granted a
Performance Award, Dividend Equivalent, Stock Payment or Stock Appreciation
Right, or an award of Deferred Stock, under this Plan.
1.17 Incentive Stock Option. "Incentive Stock Option" shall mean an option
which conforms to the applicable provisions of Section 422 of the Code and which
is designated as an Incentive Stock Option by the Committee.
1.18 Independent Director. "Independent Director" shall mean a member of
the Board who is not an Employee of the Company.
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1.19 Non-Qualified Stock Option. "Non-Qualified Stock Option" shall mean
an Option which is not designated as an Incentive Stock Option by the Committee.
1.20 Option. "Option" shall mean a stock option granted under Article III
of this Plan. An Option granted under this Plan shall, as determined by the
Committee, be either a Non-Qualified Stock Option or an Incentive Stock Option;
provided, however, that Options granted to Independent Directors and consultants
shall be Non-Qualified Stock Options.
1.21 Optionee. "Optionee" shall mean an Employee, consultant or
Independent Director granted an Option under this Plan.
1.22 Performance Award. "Performance Award" shall mean a cash bonus, stock
bonus or other performance or incentive award that is paid in cash, Common Stock
or a combination of both, awarded under Article VII of this Plan.
1.23 Plan. "Plan" shall mean The 1996 Equity Participation Plan of ViaSat,
Inc.
1.24 QDRO. "QDRO" shall mean a qualified domestic relations order as
defined by the Code or Title I of the Employee Retirement Income Security Act of
1974, as amended, or the rules thereunder.
1.25 Restricted Stock. "Restricted Stock" shall mean Common Stock awarded
under Article VI of this Plan.
1.26 Restricted Stockholder. "Restricted Stockholder" shall mean an
Employee or consultant granted an award of Restricted Stock under Article VI of
this Plan.
1.27 Rule 16b-3. "Rule 16b-3" shall mean that certain Rule 16b-3 under the
Exchange Act, as such Rule may be amended from time to time.
1.28 Stock Appreciation Right. "Stock Appreciation Right" shall mean a
stock appreciation right granted under Article VIII of this Plan.
1.29 Stock Payment. "Stock Payment" shall mean (i) a payment in the form
of shares of Common Stock, or (ii) an option or other right to purchase shares
of Common Stock, as part of a deferred compensation arrangement, made in lieu of
all or any portion of the compensation, including without limitation, salary,
bonuses and commissions, that would otherwise become payable to a key Employee
or consultant in cash, awarded under Article VII of this Plan.
1.30 Subsidiary. "Subsidiary" shall mean any corporation in an unbroken
chain of corporations beginning with the Company if each of the corporations
other than the last corporation in the unbroken chain then owns stock possessing
50 percent or more of the total combined voting power of all classes of stock in
one of the other corporations in such chain.
1.31 Termination of Consultancy. "Termination of Consultancy" shall mean
the time when the engagement of an Optionee, Grantee or Restricted Stockholder
as a consultant to the Company or a Subsidiary is terminated for any reason,
with or without cause, including, but not by way of limitation, by resignation,
discharge, death or retirement; but excluding terminations where there is a
simultaneous commencement of employment with the Company or any Subsidiary. The
Committee, in its absolute discretion, shall determine the effect of all matters
and questions relating to Termination of Consultancy, including, but not by way
of limitation, the question of whether a Termination of Consultancy resulted
from a discharge for good cause, and all questions of whether particular leaves
of absence constitute Terminations of Consultancy. Notwithstanding any other
provision of this Plan, the Company or any Subsidiary has an absolute and
unrestricted right to terminate a consultant's service at any time for any
reason whatsoever, with or without cause, except to the extent expressly
provided otherwise in writing.
1.32 Termination of Directorship. "Termination of Directorship" shall mean
the time when an Optionee who is an Independent Director ceases to be a Director
for any reason, including, but not by way of limitation, a termination by
resignation, failure to be elected, death or retirement. The Board, in its sole
and
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absolute discretion, shall determine the effect of all matters and questions
relating to Termination of Directorship with respect to Independent Directors.
1.33 Termination of Employment. "Termination of Employment" shall mean the
time when the employee-employer relationship between an Optionee, Grantee or
Restricted Stockholder and the Company or any Subsidiary is terminated for any
reason, with or without cause, including, but not by way of limitation, a
termination by resignation, discharge, death, disability or retirement; but
excluding (i) terminations where there is a simultaneous reemployment or
continuing employment of an Optionee, Grantee or Restricted Stockholder by the
Company or any Subsidiary, (ii) at the discretion of the Committee, terminations
which result in a temporary severance of the employee-employer relationship, and
(iii) at the discretion of the Committee, terminations which are followed by the
simultaneous establishment of a consulting relationship by the Company or a
Subsidiary with the former employee. The Committee, in its absolute discretion,
shall determine the effect of all matters and questions relating to Termination
of Employment, including, but not by way of limitation, the question of whether
a Termination of Employment resulted from a discharge for good cause, and all
questions of whether particular leaves of absence constitute Terminations of
Employment; provided, however, that, unless otherwise determined by the
Committee in its discretion, a leave of absence, change in status from an
employee to an independent contractor or other change in the employee-employer
relationship shall constitute a Termination of Employment if, and to the extent
that, such leave of absence, change in status or other change interrupts
employment for the purposes of Section 422(a)(2) of the Code and the then
applicable regulations and revenue rulings under said Section. Notwithstanding
any other provision of this Plan, the Company or any Subsidiary has an absolute
and unrestricted right to terminate an Employee's employment at any time for any
reason whatsoever, with or without cause, except to the extent expressly
provided otherwise in writing.
ARTICLE II
SHARES SUBJECT TO PLAN
2.1 Shares Subject to Plan.
(a) The shares of stock subject to Options, awards of Restricted Stock,
Performance Awards, Dividend Equivalents, awards of Deferred Stock, Stock
Payments or Stock Appreciation Rights shall be Common Stock, initially shares of
the Company's Common Stock, par value $0.0001 per share. The aggregate number of
such shares which may be issued upon exercise of such options or rights or upon
any such awards under the Plan shall not exceed one million two hundred fifty
thousand (1,250,000). The shares of Common Stock issuable upon exercise of such
options or rights or upon any such awards may be either previously authorized
but unissued shares or treasury shares.
(b) The maximum number of shares which may be subject to Options or Stock
Appreciation Rights granted under the Plan to any individual in any fiscal year
shall not exceed the Award Limit. To the extent required by Section 162(m) of
the Code, shares subject to Options which are canceled continue to be counted
against the Award Limit and if, after grant of an Option, the price of shares
subject to such Option is reduced, the transaction is treated as a cancellation
of the Option and a grant of a new Option and both the Option deemed to be
canceled and the Option deemed to be granted are counted against the Award
Limit. Furthermore, to the extent required by Section 162(m) of the Code, if,
after grant of a Stock Appreciation Right, the base amount on which stock
appreciation is calculated is reduced to reflect a reduction in the Fair Market
Value of the Company's Common Stock, the transaction is treated as a
cancellation of the Stock Appreciation Right and a grant of a new Stock
Appreciation Right and both the Stock Appreciation Right deemed to be canceled
and the Stock Appreciation Right deemed to be granted are counted against the
Award Limit.
2.2 Add-back of Options and Other Rights. If any Option, or other right to
acquire shares of Common Stock under any other award under this Plan, expires or
is canceled without having been fully exercised, or is exercised in whole or in
part for cash as permitted by this Plan, the number of shares subject to such
Option or other right but as to which such Option or other right was not
exercised prior to its expiration, cancellation or
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exercise may again be optioned, granted or awarded hereunder, subject to the
limitations of Section 2.1. Furthermore, any shares subject to Options or other
awards which are adjusted pursuant to Section 10.3 and become exercisable with
respect to shares of stock of another corporation shall be considered canceled
and may again be optioned, granted or awarded hereunder, subject to the
limitations of Section 2.1. Shares of Common Stock which are delivered by the
Optionee or Grantee or withheld by the Company upon the exercise of any Option
or other award under this Plan, in payment of the exercise price thereof, may
again be optioned, granted or awarded hereunder, subject to the limitations of
Section 2.1. If any share of Restricted Stock is forfeited by the Grantee or
repurchased by the Company pursuant to Section 6.6 hereof, such share may again
be optioned, granted or awarded hereunder, subject to the limitations of Section
2.1. Notwithstanding the provisions of this Section 2.2, no shares of Common
Stock may again be optioned, granted or awarded if such action would cause an
Incentive Stock Option to fail to qualify as an incentive stock option under
Section 422 of the Code.
ARTICLE III
GRANTING OF OPTIONS
3.1 Eligibility. Any Employee or consultant selected by the Committee
pursuant to Section 3.4(a)(i) shall be eligible to be granted an Option. Each
Independent Director of the Company shall be eligible to be granted Options at
the times and in the manner set forth in Section 3.4(d).
3.2 Disqualification for Stock Ownership. No person may be granted an
Incentive Stock Option under this Plan if such person, at the time the Incentive
Stock Option is granted, owns stock possessing more than ten percent (10%) of
the total combined voting power of all classes of stock of the Company or any
then existing Subsidiary or parent corporation (within the meaning of Section
422 of the Code) unless such Incentive Stock Option conforms to the applicable
provisions of Section 422 of the Code.
3.3 Qualification of Incentive Stock Options. No Incentive Stock Option
shall be granted to any person who is not an Employee.
3.4 Granting of Options
(a) The Committee shall from time to time, in its absolute discretion, and
subject to applicable limitations of this Plan:
(i) Determine which Employees are key Employees and select from among
the key Employees or consultants (including Employees or consultants who
have previously received Options or other awards under this Plan) such of
them as in its opinion should be granted Options;
(ii) Subject to the Award Limit, determine the number of shares to be
subject to such Options granted to the selected key Employees or
consultants;
(iii) Subject to Section 3.3, determine whether such Options are to be
Incentive Stock Options or Non-Qualified Stock Options and whether such
Options are to qualify as performance-based compensation as described in
Section 162(m)(4)(C) of the Code; and
(iv) Determine the terms and conditions of such Options, consistent
with this Plan; provided, however, that the terms and conditions of Options
intended to qualify as performance-based compensation as described in
Section 162(m)(4)(C) of the Code shall include, but not be limited to, such
terms and conditions as may be necessary to meet the applicable provisions
of Section 162(m) of the Code.
(b) Upon the selection of a key Employee or consultant to be granted an
Option, the Committee shall instruct the Secretary of the Company to issue the
Option and may impose such conditions on the grant of the Option as it deems
appropriate. Without limiting the generality of the preceding sentence, the
Committee may, in its discretion and on such terms as it deems appropriate,
require as a condition on the grant of an Option to an Employee or consultant
that the Employee or consultant surrender for cancellation some or all of the
unexercised Options, awards of Restricted Stock or Deferred Stock, Performance
Awards, Stock Appreciation Rights, Dividend Equivalents or Stock Payments or
other rights which have been previously
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granted to him under this Plan or otherwise. An Option, the grant of which is
conditioned upon such surrender, may have an option price lower (or higher) than
the exercise price of such surrendered Option or other award, may cover the same
(or a lesser or greater) number of shares as such surrendered Option or other
award, may contain such other terms as the Committee deems appropriate, and
shall be exercisable in accordance with its terms, without regard to the number
of shares, price, exercise period or any other term or condition of such
surrendered Option or other award.
(c) Any Incentive Stock Option granted under this Plan may be modified by
the Committee to disqualify such option from treatment as an "incentive stock
option" under Section 422 of the Code.
(d) During the term of the Plan, each person who is an Independent Director
as of the date of the consummation of the initial public offering of Common
Stock automatically shall be granted (i) an Option to purchase Seven Thousand
Five Hundred (7,500) shares of Common Stock (subject to adjustment as provided
in Section 10.3) on the date of such initial public offering and (ii) an Option
to purchase Four Thousand (4,000) shares of Common Stock (subject to adjustment
as provided in Section 10.3) on the date of each annual meeting of stockholders
after such initial public offering at which directors are elected to the Board.
During the term of the Plan, a person who is initially elected to the Board
after the consummation of the initial public offering of Common Stock and who is
an Independent Director at the time of such initial election automatically shall
be granted (i) an Option to purchase Seven Thousand Five Hundred (7,500) shares
of Common Stock (subject to adjustment as provided in Section 10.3) on the date
of such initial election and (ii) an Option to purchase Four Thousand (4,000)
shares of Common Stock (subject to adjustment as provided in Section 10.3) on
the date of each annual meeting of stockholders after such initial election at
which directors are elected to the Board. Members of the Board who are employees
of the Company who subsequently retire from the Company and remain on the Board
will not receive an initial Option grant pursuant to clause (i) of the preceding
sentence, but to the extent that they are otherwise eligible, will receive,
after retirement from employment with the Company, Options as described in
clause (ii) of the preceding sentence. All of the foregoing Option grants
authorized by this Section 3.4(d) are subject to stockholder approval of the
Plan.
ARTICLE IV
TERMS OF OPTIONS
4.1 Option Agreement. Each Option shall be evidenced by a written Stock
Option Agreement, which shall be executed by the Optionee and an authorized
officer of the Company and which shall contain such terms and conditions as the
Committee (or the Board, in the case of Options granted to Independent
Directors) shall determine, consistent with this Plan. Stock Option Agreements
evidencing Options intended to qualify as performance-based compensation as
described in Section 162(m)(4)(C) of the Code shall contain such terms and
conditions as may be necessary to meet the applicable provisions of Section
162(m) of the Code. Stock Option Agreements evidencing Incentive Stock Options
shall contain such terms and conditions as may be necessary to meet the
applicable provisions of Section 422 of the Code.
4.2 Option Price. The price per share of the shares subject to each Option
shall be set by the Committee; provided, however, that such price shall be no
less than the par value of a share of Common Stock, unless otherwise permitted
by applicable state law, and (i) in the case of Incentive Stock Options and
Options intended to qualify as performance-based compensation as described in
Section 162(m)(4)(C) of the Code, such price shall not be less than 100% of the
Fair Market Value of a share of Common Stock on the date the Option is granted;
(ii) in the case of Incentive Stock Options granted to an individual then owning
(within the meaning of Section 424(d) of the Code) more than 10% of the total
combined voting power of all classes of stock of the Company or any Subsidiary
or parent corporation thereof (within the meaning of Section 422 of the Code)
such price shall not be less than 110% of the Fair Market Value of a share of
Common Stock on the date the Option is granted; and (iii) in the case of Options
granted to Independent Directors, such price shall equal 100% of the Fair Market
Value of a share of Common Stock on the date the Option is granted; provided,
however, that the price of each share subject to each Option granted to
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Independent Directors on the date of the initial public offering of Common Stock
shall equal the initial public offering price (net of underwriting discounts and
commissions) per share of Common Stock.
4.3 Option Term. The term of an Option shall be set by the Committee in
its discretion; provided, however, that, (i) in the case of Options granted to
Independent Directors, the term shall be ten (10) years from the date the Option
is granted, without variation or acceleration hereunder, but subject to Section
5.6, and (ii) in the case of Incentive Stock Options, the term shall not be more
than ten (10) years from the date the Incentive Stock Option is granted, or five
(5) years from such date if the Incentive Stock Option is granted to an
individual then owning (within the meaning of Section 424(d) of the Code) more
than 10% of the total combined voting power of all classes of stock of the
Company or any Subsidiary or parent corporation thereof (within the meaning of
Section 422 of the Code). Except as limited by requirements of Section 422 of
the Code and regulations and rulings thereunder applicable to Incentive Stock
Options, the Committee may extend the term of any outstanding Option in
connection with any Termination of Employment or Termination of Consultancy of
the Optionee, or amend any other term or condition of such Option relating to
such a termination.
4.4 Option Vesting
(a) The period during which the right to exercise an Option in whole or in
part vests in the Optionee shall be set by the Committee and the Committee may
determine that an Option may not be exercised in whole or in part for a
specified period after it is granted; provided, however, that, unless the
Committee otherwise provides in the terms of the Option or otherwise, no Option
shall be exercisable by any Optionee who is then subject to Section 16 of the
Exchange Act within the period ending six months and one day after the date the
Option is granted; and provided, further, that Options granted to Independent
Directors shall become exercisable in cumulative annual installments of 33 1/3%
on each of the first, second and third anniversaries of the date of Option
grant, without variation or acceleration hereunder except as provided in Section
10.3(b). At any time after grant of an Option, the Committee may, in its sole
and absolute discretion and subject to whatever terms and conditions it selects,
accelerate the period during which an Option (except an Option granted to an
Independent Director) vests.
(b) No portion of an Option which is unexercisable at Termination of
Employment, Termination of Directorship or Termination of Consultancy, as
applicable, shall thereafter become exercisable, except as may be otherwise
provided by the Committee in the case of Options granted to Employees or
consultants either in the Stock Option Agreement or by action of the Committee
following the grant of the Option.
(c) To the extent that the aggregate Fair Market Value of stock with
respect to which "incentive stock options" (within the meaning of Section 422 of
the Code, but without regard to Section 422(d) of the Code) are exercisable for
the first time by an Optionee during any calendar year (under the Plan and all
other incentive stock option plans of the Company and any Subsidiary) exceeds
$100,000, such Options shall be treated as Non-Qualified Options to the extent
required by Section 422 of the Code. The rule set forth in the preceding
sentence shall be applied by taking Options into account in the order in which
they were granted. For purposes of this Section 4.4(c), the Fair Market Value of
stock shall be determined as of the time the Option with respect to such stock
is granted.
4.5 Consideration. In consideration of the granting of an Option, the
Optionee shall agree, in the written Stock Option Agreement, to remain in the
employ of (or to consult for or to serve as an Independent Director of, as
applicable) the Company or any Subsidiary for a period of at least one year (or
such shorter period as may be fixed in the Stock Option Agreement or by action
of the Committee following grant of the Option) after the Option is granted (or,
in the case of an Independent Director, until the next annual meeting of
stockholders of the Company). Nothing in this Plan or in any Stock Option
Agreement hereunder shall confer upon any Optionee any right to continue in the
employ of, or as a consultant for, the Company or any Subsidiary, or as a
director of the Company, or shall interfere with or restrict in any way the
rights of the Company and any Subsidiary, which are hereby expressly reserved,
to discharge any Optionee at any time for any reason whatsoever, with or without
good cause.
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ARTICLE V
EXERCISE OF OPTIONS
5.1 Partial Exercise. An exercisable Option may be exercised in whole or
in part. However, an Option shall not be exercisable with respect to fractional
shares and the Committee (or the Board, in the case of Options granted to
Independent Directors) may require that, by the terms of the Option, a partial
exercise be with respect to a minimum number of shares.
5.2 Manner of Exercise. All or a portion of an exercisable Option shall be
deemed exercised upon delivery of all of the following to the Secretary of the
Company or his office:
(a) A written notice complying with the applicable rules established
by the Committee (or the Board, in the case of Options granted to
Independent Directors) stating that the Option, or a portion thereof, is
exercised. The notice shall be signed by the Optionee or other person then
entitled to exercise the Option or such portion;
(b) Such representations and documents as the Committee (or the Board,
in the case of Options granted to Independent Directors), in its absolute
discretion, deems necessary or advisable to effect compliance with all
applicable provisions of the Securities Act of 1933, as amended, and any
other federal or state securities laws or regulations. The Committee or
Board may, in its absolute discretion, also take whatever additional
actions it deems appropriate to effect such compliance including, without
limitation, placing legends on share certificates and issuing stop-transfer
notices to agents and registrars;
(c) In the event that the Option shall be exercised pursuant to
Section 10.1 by any person or persons other than the Optionee, appropriate
proof of the right of such person or persons to exercise the Option; and
(d) Full cash payment to the Secretary of the Company for the shares
with respect to which the Option, or portion thereof, is exercised.
However, the Committee (or the Board, in the case of Options granted to
Independent Directors), may in its discretion (i) allow a delay in payment
up to thirty (30) days from the date the Option, or portion thereof, is
exercised; (ii) allow payment, in whole or in part, through the delivery of
shares of Common Stock owned by the Optionee, duly endorsed for transfer to
the Company with a Fair Market Value on the date of delivery equal to the
aggregate exercise price of the Option or exercised portion thereof; (iii)
allow payment, in whole or in part, through the surrender of shares of
Common Stock then issuable upon exercise of the Option having a Fair Market
Value on the date of Option exercise equal to the aggregate exercise price
of the Option or exercised portion thereof; (iv) allow payment, in whole or
in part, through the delivery of property of any kind which constitutes
good and valuable consideration; (v) allow payment, in whole or in part,
through the delivery of a full recourse promissory note bearing interest
(at no less than such rate as shall then preclude the imputation of
interest under the Code) and payable upon such terms as may be prescribed
by the Committee or the Board; (vi) allow payment, in whole or in part,
through the delivery of a notice that the Optionee has placed a market sell
order with a broker with respect to shares of Common Stock then issuable
upon exercise of the Option, and that the broker has been directed to pay a
sufficient portion of the net proceeds of the sale to the Company in
satisfaction of the Option exercise price; or (vii) allow payment through
any combination of the consideration provided in the foregoing
subparagraphs (ii), (iii), (iv), (v) and (vi). In the case of a promissory
note, the Committee (or the Board, in the case of Options granted to
Independent Directors) may also prescribe the form of such note and the
security to be given for such note. The Option may not be exercised,
however, by delivery of a promissory note or by a loan from the Company
when or where such loan or other extension of credit is prohibited by law.
5.3 Conditions to Issuance of Stock Certificates. The Company shall not be
required to issue or deliver any certificate or certificates for shares of stock
purchased upon the exercise of any Option or portion thereof prior to
fulfillment of all of the following conditions:
(a) The admission of such shares to listing on all stock exchanges on
which such class of stock is then listed;
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(b) The completion of any registration or other qualification of such
shares under any state or federal law, or under the rulings or regulations
of the Securities and Exchange Commission or any other governmental
regulatory body which the Committee or Board shall, in its absolute
discretion, deem necessary or advisable;
(c) The obtaining of any approval or other clearance from any state or
federal governmental agency which the Committee (or Board, in the case of
Options granted to Independent Directors) shall, in its absolute
discretion, determine to be necessary or advisable;
(d) The lapse of such reasonable period of time following the exercise
of the Option as the Committee (or Board, in the case of Options granted to
Independent Directors) may establish from time to time for reasons of
administrative convenience; and
(e) The receipt by the Company of full payment for such shares,
including payment of any applicable withholding tax.
5.4 Rights as Stockholders. The holders of Options shall not be, nor have
any of the rights or privileges of, stockholders of the Company in respect of
any shares purchasable upon the exercise of any part of an Option unless and
until certificates representing such shares have been issued by the Company to
such holders.
5.5 Ownership and Transfer Restrictions. The Committee (or Board, in the
case of Options granted to Independent Directors), in its absolute discretion,
may impose such restrictions on the ownership and transferability of the shares
purchasable upon the exercise of an Option as it deems appropriate. Any such
restriction shall be set forth in the respective Stock Option Agreement and may
be referred to on the certificates evidencing such shares. The Committee may
require the Employee to give the Company prompt notice of any disposition of
shares of Common Stock acquired by exercise of an Incentive Stock Option within
(i) two years from the date of granting such Option to such Employee or (ii) one
year after the transfer of such shares to such Employee. The Committee may
direct that the certificates evidencing shares acquired by exercise of an Option
refer to such requirement to give prompt notice of disposition.
5.6 Limitations on Exercise of Options Granted to Independent
Directors. No Option granted to an Independent Director may be exercised to any
extent by anyone after the first to occur of the following events:
(a) The expiration of twelve (12) months from the date of the
Optionee's death;
(b) the expiration of twelve (12) months from the date of the
Optionee's Termination of Directorship by reason of his permanent and total
disability (within the meaning of Section 22(e)(3) of the Code);
(c) the expiration of three (3) months from the date of the Optionee's
Termination of Directorship for any reason other than such Optionee's death
or his permanent and total disability, unless the Optionee dies within said
three-month period; or
(d) The expiration of ten (10) years from the date the Option was
granted.
ARTICLE VI
AWARD OF RESTRICTED STOCK
6.1 Award of Restricted Stock
(a) The Committee may from time to time, in its absolute discretion:
(i) Select from among the key Employees or consultants (including
Employees or consultants who have previously received other awards under
this Plan) such of them as in its opinion should be awarded Restricted
Stock; and
(ii) Determine the purchase price, if any, and other terms and
conditions applicable to such Restricted Stock, consistent with this Plan.
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(b) The Committee shall establish the purchase price, if any, and form of
payment for Restricted Stock; provided, however, that such purchase price shall
be no less than the par value of the Common Stock to be purchased, unless
otherwise permitted by applicable state law. In all cases, legal consideration
shall be required for each issuance of Restricted Stock.
(c) Upon the selection of a key Employee or consultant to be awarded
Restricted Stock, the Committee shall instruct the Secretary of the Company to
issue such Restricted Stock and may impose such conditions on the issuance of
such Restricted Stock as it deems appropriate.
6.2 Restricted Stock Agreement. Restricted Stock shall be issued only
pursuant to a written Restricted Stock Agreement, which shall be executed by the
selected key Employee or consultant and an authorized officer of the Company and
which shall contain such terms and conditions as the Committee shall determine,
consistent with this Plan.
6.3 Consideration. As consideration for the issuance of Restricted Stock,
in addition to payment of any purchase price, the Restricted Stockholder shall
agree, in the written Restricted Stock Agreement, to remain in the employ of, or
to consult for, the Company or any Subsidiary for a period of at least one year
after the Restricted Stock is issued (or such shorter period as may be fixed in
the Restricted Stock Agreement or by action of the Committee following grant of
the Restricted Stock). Nothing in this Plan or in any Restricted Stock Agreement
hereunder shall confer on any Restricted Stockholder any right to continue in
the employ of, or as a consultant for, the Company or any Subsidiary or shall
interfere with or restrict in any way the rights of the Company and any
Subsidiary, which are hereby expressly reserved, to discharge any Restricted
Stockholder at any time for any reason whatsoever, with or without good cause.
6.4 Rights as Stockholders. Upon delivery of the shares of Restricted
Stock to the escrow holder pursuant to Section 6.7, the Restricted Stockholder
shall have, unless otherwise provided by the Committee, all the rights of a
stockholder with respect to said shares, subject to the restrictions in his
Restricted Stock Agreement, including the right to receive all dividends and
other distributions paid or made with respect to the shares; provided, however,
that in the discretion of the Committee, any extraordinary distributions with
respect to the Common Stock shall be subject to the restrictions set forth in
Section 6.5.
6.5 Restriction. All shares of Restricted Stock issued under this Plan
(including any shares received by holders thereof with respect to shares of
Restricted Stock as a result of stock dividends, stock splits or any other form
of recapitalization) shall, in the terms of each individual Restricted Stock
Agreement, be subject to such restrictions as the Committee shall provide, which
restrictions may include, without limitation, restrictions concerning voting
rights and transferability and restrictions based on duration of employment with
the Company, Company performance and individual performance; provided, however,
that, unless the Committee otherwise provides in the terms of the Restricted
Stock Agreement or otherwise, no share of Restricted Stock granted to a person
subject to Section 16 of the Exchange Act shall be sold, assigned or otherwise
transferred until at least six months and one day have elapsed from the date on
which the Restricted Stock was issued, and provided, further, that by action
taken after the Restricted Stock is issued, the Committee may, on such terms and
conditions as it may determine to be appropriate, remove any or all of the
restrictions imposed by the terms of the Restricted Stock Agreement. Restricted
Stock may not be sold or encumbered until all restrictions are terminated or
expire. Unless provided otherwise by the Committee, if no consideration was paid
by the Restricted Stockholder upon issuance, a Restricted Stockholder's rights
in unvested Restricted Stock shall lapse upon Termination of Employment or, if
applicable, upon Termination of Consultancy with the Company.
6.6 Repurchase of Restricted Stock. The Committee shall provide in the
terms of each individual Restricted Stock Agreement that the Company shall have
the right to repurchase from the Restricted Stockholder the Restricted Stock
then subject to restrictions under the Restricted Stock Agreement immediately
upon a Termination of Employment or, if applicable, upon a Termination of
Consultancy between the Restricted Stockholder and the Company, at a cash price
per share equal to the price paid by the Restricted Stockholder for such
Restricted Stock; provided, however, that provision may be made that no such
right of repurchase shall exist in the event of a Termination of Employment or
Termination of Consultancy
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without cause, or following a change in control of the Company or because of the
Restricted Stockholder's retirement, death or disability, or otherwise.
6.7 Escrow. The Secretary of the Company or such other escrow holder as
the Committee may appoint shall retain physical custody of each certificate
representing Restricted Stock until all of the restrictions imposed under the
Restricted Stock Agreement with respect to the shares evidenced by such
certificate expire or shall have been removed.
6.8 Legend. In order to enforce the restrictions imposed upon shares of
Restricted Stock hereunder, the Committee shall cause a legend or legends to be
placed on certificates representing all shares of Restricted Stock that are
still subject to restrictions under Restricted Stock Agreements, which legend or
legends shall make appropriate reference to the conditions imposed thereby.
ARTICLE VII
PERFORMANCE AWARDS, DIVIDEND EQUIVALENTS,
DEFERRED STOCK, STOCK PAYMENTS
7.1 Performance Awards. Any key Employee or consultant selected by the
Committee may be granted one or more Performance Awards. The value of such
Performance Awards may be linked to the market value, book value, net profits or
other measure of the value of Common Stock or other specific performance
criteria determined appropriate by the Committee, in each case on a specified
date or dates or over any period or periods determined by the Committee, or may
be based upon the appreciation in the market value, book value, net profits or
other measure of the value of a specified number of shares of Common Stock over
a fixed period or periods determined by the Committee. In making such
determinations, the Committee shall consider (among such other factors as it
deems relevant in light of the specific type of award) the contributions,
responsibilities and other compensation of the particular key Employee or
consultant.
7.2 Equivalents. Any key Employee or consultant selected by the Committee
may be granted Dividend Equivalents based on the dividends declared on Common
Stock, to be credited as of dividend payment dates, during the period between
the date an Option, Stock Appreciation Right, Deferred Stock or Performance
Award is granted, and the date such Option, Stock Appreciation Right, Deferred
Stock or Performance Award is exercised, vests or expires, as determined by the
Committee. Such Dividend Equivalents shall be converted to cash or additional
shares of Common Stock by such formula and at such time and subject to such
limitations as may be determined by the Committee. With respect to Dividend
Equivalents granted with respect to Options intended to be qualified
performance-based compensation for purposes of Section 162(m) of the Code, such
Dividend Equivalents shall be payable regardless of whether such Option is
exercised.
7.3 Stock Payments. Any key Employee or consultant selected by the
Committee may receive Stock Payments in the manner determined from time to time
by the Committee. The number of shares shall be determined by the Committee and
may be based upon the Fair Market Value, book value, net profits or other
measure of the value of Common Stock or other specific performance criteria
determined appropriate by the Committee, determined on the date such Stock
Payment is made or on any date thereafter.
7.4 Deferred Stock. Any key Employee or consultant selected by the
Committee may be granted an award of Deferred Stock in the manner determined
from time to time by the Committee. The number of shares of Deferred Stock shall
be determined by the Committee and may be linked to the market value, book
value, net profits or other measure of the value of Common Stock or other
specific performance criteria determined to be appropriate by the Committee, in
each case on a specified date or dates or over any period or periods determined
by the Committee. Common Stock underlying a Deferred Stock award will not be
issued until the Deferred Stock award has vested, pursuant to a vesting schedule
or performance criteria set by the Committee. Unless otherwise provided by the
Committee, a Grantee of Deferred Stock shall have no rights as a Company
stockholder with respect to such Deferred Stock until such time as the award has
vested and the Common Stock underlying the award has been issued.
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7.5 Performance Award Agreement, Dividend Equivalent Agreement, Deferred
Stock Agreement, Stock Payment Agreement. Each Performance Award, Dividend
Equivalent, award of Deferred Stock and/or Stock Payment shall be evidenced by a
written agreement, which shall be executed by the Grantee and an authorized
Officer of the Company and which shall contain such terms and conditions as the
Committee shall determine, consistent with this Plan.
7.6 Term. The term of a Performance Award, Dividend Equivalent, award of
Deferred Stock and/or Stock Payment shall be set by the Committee in its
discretion.
7.7 Exercise Upon Termination of Employment. A Performance Award, Dividend
Equivalent, award of Deferred Stock and/or Stock Payment is exercisable or
payable only while the Grantee is an Employee or consultant; provided that the
Committee may determine that the Performance Award, Dividend Equivalent, award
of Deferred Stock and/or Stock Payment may be exercised or paid subsequent to
Termination of Employment or Termination of Consultancy without cause, or
following a change in control of the Company, or because of the Grantee's
retirement, death or disability, or otherwise.
7.8 Payment on Exercise. Payment of the amount determined under Section
7.1 or 7.2 above shall be in cash, in Common Stock or a combination of both, as
determined by the Committee. To the extent any payment under this Article VII is
effected in Common Stock, it shall be made subject to satisfaction of all
provisions of Section 5.3.
7.9 Consideration. In consideration of the granting of a Performance
Award, Dividend Equivalent, award of Deferred Stock and/or Stock Payment, the
Grantee shall agree, in a written agreement, to remain in the employ of, or to
consult for, the Company or any Subsidiary for a period of at least one year
after such Performance Award, Dividend Equivalent, award of Deferred Stock
and/or Stock Payment is granted (or such shorter period as may be fixed in such
agreement or by action of the Committee following such grant). Nothing in this
Plan or in any agreement hereunder shall confer on any Grantee any right to
continue in the employ of, or as a consultant for, the Company or any Subsidiary
or shall interfere with or restrict in any way the rights of the Company and any
Subsidiary, which are hereby expressly reserved, to discharge any Grantee at any
time for any reason whatsoever, with or without good cause.
ARTICLE VIII
STOCK APPRECIATION RIGHTS
8.1 Grant of Stock Appreciation Rights. A Stock Appreciation Right may be
granted to any key Employee or consultant selected by the Committee. A Stock
Appreciation Right may be granted (i) in connection and simultaneously with the
grant of an Option, (ii) with respect to a previously granted Option, or (iii)
independent of an Option. A Stock Appreciation Right shall be subject to such
terms and conditions not inconsistent with this Plan as the Committee shall
impose and shall be evidenced by a written Stock Appreciation Right Agreement,
which shall be executed by the Grantee and an authorized officer of the Company.
The Committee, in its discretion, may determine whether a Stock Appreciation
Right is to qualify as performance-based compensation as described in Section
162(m)(4)(C) of the Code and Stock Appreciation Right Agreements evidencing
Stock Appreciation Rights intended to so qualify shall contain such terms and
conditions as may be necessary to meet the applicable provisions of Section
162(m) of the Code. Without limiting the generality of the foregoing, the
Committee may, in its discretion and on such terms as it deems appropriate,
require as a condition of the grant of a Stock Appreciation Right to an Employee
or consultant that the Employee or consultant surrender for cancellation some or
all of the unexercised Options, awards of Restricted Stock or Deferred Stock,
Performance Awards, Stock Appreciation Rights, Dividend Equivalents or Stock
Payments, or other rights which have been previously granted to him under this
Plan or otherwise. A Stock Appreciation Right, the grant of which is conditioned
upon such surrender, may have an exercise price lower (or higher) than the
exercise price of the surrendered Option or other award, may cover the same (or
a lesser or greater) number of shares as such surrendered Option or other award,
may contain such other terms as the Committee deems appropriate, and shall be
exercisable in
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accordance with its terms, without regard to the number of shares, price,
exercise period or any other term or condition of such surrendered Option or
other award.
8.2 Coupled Stock Appreciation Rights
(a) A Coupled Stock Appreciation Right ("CSAR") shall be related to a
particular Option and shall be exercisable only when and to the extent the
related Option is exercisable.
(b) A CSAR may be granted to the Grantee for no more than the number of
shares subject to the simultaneously or previously granted Option to which it is
coupled.
(c) A CSAR shall entitle the Grantee (or other person entitled to exercise
the Option pursuant to this Plan) to surrender to the Company unexercised a
portion of the Option to which the CSAR relates (to the extent then exercisable
pursuant to its terms) and to receive from the Company in exchange therefor an
amount determined by multiplying the difference obtained by subtracting the
Option exercise price from the Fair Market Value of a share of Common Stock on
the date of exercise of the CSAR by the number of shares of Common Stock with
respect to which the CSAR shall have been exercised, subject to any limitations
the Committee may impose.
8.3 Independent Stock Appreciation Rights
(a) An Independent Stock Appreciation Right ("ISAR") shall be unrelated to
any Option and shall have a term set by the Committee. An ISAR shall be
exercisable in such installments as the Committee may determine. An ISAR shall
cover such number of shares of Common Stock as the Committee may determine;
provided, however, that unless the Committee otherwise provides in the terms of
the ISAR or otherwise, no ISAR granted to a person subject to Section 16 of the
Exchange Act shall be exercisable until at least six months have elapsed from
(but excluding) the date on which the Option was granted. The exercise price per
share of Common Stock subject to each ISAR shall be set by the Committee. An
ISAR is exercisable only while the Grantee is an Employee or consultant;
provided that the Committee may determine that the ISAR may be exercised
subsequent to Termination of Employment or Termination of Consultancy without
cause, or following a change in control of the Company, or because of the
Grantee's retirement, death or disability, or otherwise.
(b) An ISAR shall entitle the Grantee (or other person entitled to exercise
the ISAR pursuant to this Plan) to exercise all or a specified portion of the
ISAR (to the extent then exercisable pursuant to its terms) and to receive from
the Company an amount determined by multiplying the difference obtained by
subtracting the exercise price per share of the ISAR from the Fair Market Value
of a share of Common Stock on the date of exercise of the ISAR by the number of
shares of Common Stock with respect to which the ISAR shall have been exercised,
subject to any limitations the Committee may impose.
8.4 Payment and Limitations on Exercise
(a) Payment of the amount determined under Section 8.2(c) and 8.3(b) above
shall be in cash, in Common Stock (based on its Fair Market Value as of the date
the Stock Appreciation Right is exercised) or a combination of both, as
determined by the Committee. To the extent such payment is effected in Common
Stock it shall be made subject to satisfaction of all provisions of Section 5.3
above pertaining to Options.
(b) Grantees of Stock Appreciation Rights may be required to comply with
any timing or other restrictions with respect to the settlement or exercise of a
Stock Appreciation Right, including a window-period limitation, as may be
imposed in the discretion of the Board or Committee.
8.5 Consideration. In consideration of the granting of a Stock
Appreciation Right, the Grantee shall agree, in the written Stock Appreciation
Right Agreement, to remain in the employ of, or to consult for, the Company or
any Subsidiary for a period of at least one year after the Stock Appreciation
Right is granted (or such shorter period as may be fixed in the Stock
Appreciation Right Agreement or by action of the Committee following grant of
the Restricted Stock). Nothing in this Plan or in any Stock Appreciation Right
Agreement hereunder shall confer on any Grantee any right to continue in the
employ of, or as a consultant for, the Company or any Subsidiary or shall
interfere with or restrict in any way the rights of the Company and any
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Subsidiary, which are hereby expressly reserved, to discharge any Grantee at any
time for any reason whatsoever, with or without good cause.
ARTICLE IX
ADMINISTRATION
9.1 Compensation Committee. Prior to the Company's initial registration of
Common Stock under Section 12 of the Exchange Act, the Compensation Committee
shall consist of the entire Board. Following such registration, the Compensation
Committee (or another committee or a subcommittee of the Board assuming the
functions of the Committee under this Plan) shall consist solely of two or more
Independent Directors appointed by and holding office at the pleasure of the
Board, each of whom is both a "non-employee director" as defined by Rule 16b-3
and an "outside director" for purposes of Section 162(m) of the Code.
Appointment of Committee members shall be effective upon acceptance of
appointment. Committee members may resign at any time by delivering written
notice to the Board. Vacancies in the Committee may be filled by the Board.
9.2 Duties and Powers of Committee. It shall be the duty of the Committee
to conduct the general administration of this Plan in accordance with its
provisions. The Committee shall have the power to interpret this Plan and the
agreements pursuant to which Options, awards of Restricted Stock or Deferred
Stock, Performance Awards, Stock Appreciation Rights, Dividend Equivalents or
Stock Payments are granted or awarded, and to adopt such rules for the
administration, interpretation, and application of this Plan as are consistent
therewith and to interpret, amend or revoke any such rules. Notwithstanding the
foregoing, the full Board, acting by a majority of its members in office, shall
conduct the general administration of the Plan with respect to Options granted
to Independent Directors. Any such grant or award under this Plan need not be
the same with respect to each Optionee, Grantee or Restricted Stockholder. Any
such interpretations and rules with respect to Incentive Stock Options shall be
consistent with the provisions of Section 422 of the Code. In its absolute
discretion, the Board may at any time and from time to time exercise any and all
rights and duties of the Committee under this Plan except with respect to
matters which under Rule 16b-3 or Section 162(m) of the Code, or any regulations
or rules issued thereunder, are required to be determined in the sole discretion
of the Committee.
9.3 Majority Rule; Unanimous Written Consent. The Committee shall act by a
majority of its members in attendance at a meeting at which a quorum is present
or by a memorandum or other written instrument signed by all members of the
Committee.
9.4 Compensation; Professional Assistance; Good Faith Actions. Members of
the Committee shall receive such compensation for their services as members as
may be determined by the Board. All expenses and liabilities which members of
the Committee incur in connection with the administration of this Plan shall be
borne by the Company. The Committee may, with the approval of the Board, employ
attorneys, consultants, accountants, appraisers, brokers, or other persons. The
Committee, the Company and the Company's officers and Directors shall be
entitled to rely upon the advice, opinions or valuations of any such persons.
All actions taken and all interpretations and determinations made by the
Committee or the Board in good faith shall be final and binding upon all
Optionees, Grantees, Restricted Stockholders, the Company and all other
interested persons. No members of the Committee or Board shall be personally
liable for any action, determination or interpretation made in good faith with
respect to this Plan, Options, awards of Restricted Stock or Deferred Stock,
Performance Awards, Stock Appreciation Rights, Dividend Equivalents or Stock
Payments, and all members of the Committee and the Board shall be fully
protected by the Company in respect of any such action, determination or
interpretation.
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ARTICLE X
MISCELLANEOUS PROVISIONS
10.1 Not Transferable. Options, Restricted Stock awards, Deferred Stock
awards, Performance Awards, Stock Appreciation Rights, Dividend Equivalents or
Stock Payments under this Plan may not be sold, pledged, assigned, or
transferred in any manner other than by will or the laws of descent and
distribution or pursuant to a QDRO, unless and until such rights or awards have
been exercised, or the shares underlying such rights or awards have been issued,
and all restrictions applicable to such shares have lapsed. No Option,
Restricted Stock award, Deferred Stock award, Performance Award, Stock
Appreciation Right, Dividend Equivalent or Stock Payment or interest or right
therein shall be liable for the debts, contracts or engagements of the Optionee,
Grantee or Restricted Stockholder or his successors in interest or shall be
subject to disposition by transfer, alienation, anticipation, pledge,
encumbrance, assignment or any other means whether such disposition be voluntary
or involuntary or by operation of law by judgment, levy, attachment, garnishment
or any other legal or equitable proceedings (including bankruptcy), and any
attempted disposition thereof shall be null and void and of no effect, except to
the extent that such disposition is permitted by the preceding sentence.
During the lifetime of the Optionee or Grantee, only he may exercise an
Option or other right or award (or any portion thereof) granted to him under the
Plan, unless it has been disposed of pursuant to a QDRO. After the death of the
Optionee or Grantee, any exercisable portion of an Option or other right or
award may, prior to the time when such portion becomes unexercisable under the
Plan or the applicable Stock Option Agreement or other agreement, be exercised
by his personal representative or by any person empowered to do so under the
deceased Optionee's or Grantee's will or under the then applicable laws of
descent and distribution.
10.2 Amendment, Suspension or Termination of this Plan. Except as
otherwise provided in this Section 10.2, this Plan may be wholly or partially
amended or otherwise modified, suspended or terminated at any time or from time
to time by the Board or the Committee. However, without approval of the
Company's stockholders given within twelve months before or after the action by
the Board or the Committee, no action of the Board or the Committee may, except
as provided in Section 10.3, increase the limits imposed in Section 2.1 on the
maximum number of shares which may be issued under this Plan or modify the Award
Limit, and no action of the Board or the Committee may be taken that would
otherwise require stockholder approval as a matter of applicable law, regulation
or rule. No amendment, suspension or termination of this Plan shall, without the
consent of the holder of Options, Restricted Stock awards, Deferred Stock
awards, Performance Awards, Stock Appreciation Rights, Dividend Equivalents or
Stock Payments, alter or impair any rights or obligations under any Options,
Restricted Stock awards, Deferred Stock awards, Performance Awards, Stock
Appreciation Rights, Dividend Equivalents or Stock Payments theretofore granted
or awarded, unless the award itself otherwise expressly so provides. No Options,
Restricted Stock, Deferred Stock, Performance Awards, Stock Appreciation Rights,
Dividend Equivalents or Stock Payments may be granted or awarded during any
period of suspension or after termination of this Plan, and in no event may any
Incentive Stock Option be granted under this Plan after the first to occur of
the following events:
(a) The expiration of ten years from the date the Plan is adopted by
the Board; or
(b) The expiration of ten years from the date the Plan is approved by
the Company's stockholders under Section 10.4.
10.3 Changes in Common Stock or Assets of the Company, Acquisition or
Liquidation of the Company and Other Corporate Events
(a) Subject to Section 10.3(d), in the event that the Committee (or the
Board, in the case of Options granted to Independent Directors) determines that
any dividend or other distribution (whether in the form of cash, Common Stock,
other securities, or other property), recapitalization, reclassification, stock
split, reverse stock split, reorganization, merger, consolidation, split-up,
spin-off, combination, repurchase, liquidation, dissolution, or sale, transfer,
exchange or other disposition of all or substantially all of the assets of the
Company (including, but not limited to, a Corporate Transaction), or exchange of
Common Stock or other
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securities of the Company, issuance of warrants or other rights to purchase
Common Stock or other securities of the Company, or other similar corporate
transaction or event, in the Committee's sole discretion (or in the case of
Options granted to Independent Directors, the Board's sole discretion), affects
the Common Stock such that an adjustment is determined by the Committee to be
appropriate in order to prevent dilution or enlargement of the benefits or
potential benefits intended to be made available under the Plan or with respect
to an Option, Restricted Stock award, Performance Award, Stock Appreciation
Right, Dividend Equivalent, Deferred Stock award or Stock Payment, then the
Committee (or the Board, in the case of Options granted to Independent
Directors) shall, in such manner as it may deem equitable, adjust any or all of
(i) the number and kind of shares of Common Stock (or other securities
or property) with respect to which Options, Performance Awards, Stock
Appreciation Rights, Dividend Equivalents or Stock Payments may be granted
under the Plan, or which may be granted as Restricted Stock or Deferred
Stock (including, but not limited to, adjustments of the limitations in
Section 2.1 on the maximum number and kind of shares which may be issued
and adjustments of the Award Limit),
(ii) the number and kind of shares of Common Stock (or other
securities or property) subject to outstanding Options, Performance Awards,
Stock Appreciation Rights, Dividend Equivalents, or Stock Payments, and in
the number and kind of shares of outstanding Restricted Stock or Deferred
Stock, and
(iii) the grant or exercise price with respect to any Option,
Performance Award, Stock Appreciation Right, Dividend Equivalent or Stock
Payment.
(b) Subject to Sections 10.3(b)(vii) and 10.3(d), in the event of any
Corporate Transaction or other transaction or event described in Section 10.3(a)
or any unusual or nonrecurring transactions or events affecting the Company, any
affiliate of the Company, or the financial statements of the Company or any
affiliate, or of changes in applicable laws, regulations, or accounting
principles, the Committee (or the Board, in the case of Options granted to
Independent Directors) in its discretion is hereby authorized to take any one or
more of the following actions whenever the Committee (or the Board, in the case
of Options granted to Independent Directors) determines that such action is
appropriate in order to prevent dilution or enlargement of the benefits or
potential benefits intended to be made available under the Plan or with respect
to any option, right or other award under this Plan, to facilitate such
transactions or events or to give effect to such changes in laws, regulations or
principles:
(i) In its sole and absolute discretion, and on such terms and
conditions as it deems appropriate, the Committee (or the Board, in the
case of Options granted to Independent Directors) may provide, either by
the terms of the agreement or by action taken prior to the occurrence of
such transaction or event and either automatically or upon the optionee's
request, for either the purchase of any such Option, Performance Award,
Stock Appreciation Right, Dividend Equivalent, or Stock Payment, or any
Restricted Stock or Deferred Stock for an amount of cash equal to the
amount that could have been attained upon the exercise of such option,
right or award or realization of the optionee's rights had such option,
right or award been currently exercisable or payable or fully vested or the
replacement of such option, right or award with other rights or property
selected by the Committee (or the Board, in the case of Options granted to
Independent Directors) in its sole discretion;
(ii) In its sole and absolute discretion, the Committee (or the Board,
in the case of Options granted to Independent Directors) may provide,
either by the terms of such Option, Performance Award, Stock Appreciation
Right, Dividend Equivalent, or Stock Payment, or Restricted Stock or
Deferred Stock or by action taken prior to the occurrence of such
transaction or event that it cannot be exercised after such event;
(iii) In its sole and absolute discretion, and on such terms and
conditions as it deems appropriate, the Committee (or the Board, in the
case of Options granted to Independent Directors) may provide, either by
the terms of such Option, Performance Award, Stock Appreciation Right,
Dividend Equivalent, or Stock Payment, or Restricted Stock or Deferred
Stock or by action taken prior to the occurrence of such transaction or
event, that for a specified period of time prior to such transaction or
event, such option, right or award shall be exercisable as to all shares
covered thereby, notwithstanding anything to
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the contrary in (i) Section 4.4 or (ii) the provisions of such Option,
Performance Award, Stock Appreciation Right, Dividend Equivalent, or Stock
Payment, or Restricted Stock or Deferred Stock;
(iv) In its sole and absolute discretion, and on such terms and
conditions as it deems appropriate, the Committee (or the Board, in the
case of Options granted to Independent Directors) may provide, either by
the terms of such Option, Performance Award, Stock Appreciation Right,
Dividend Equivalent, or Stock Payment, or Restricted Stock or Deferred
Stock or by action taken prior to the occurrence of such transaction or
event, that upon such event, such option, right or award be assumed by the
successor or survivor corporation, or a parent or subsidiary thereof, or
shall be substituted for by similar options, rights or awards covering the
stock of the successor or survivor corporation, or a parent or subsidiary
thereof, with appropriate adjustments as to the number and kind of shares
and prices;
(v) In its sole and absolute discretion, and on such terms and
conditions as it deems appropriate, the Committee (or the Board, in the
case of Options granted to Independent Directors) may make adjustments in
the number and type of shares of Common Stock (or other securities or
property) subject to outstanding Options, Performance Awards, Stock
Appreciation Rights, Dividend Equivalents, or Stock Payments, and in the
number and kind of outstanding Restricted Stock or Deferred Stock and/or in
the terms and conditions of (including the grant or exercise price), and
the criteria included in, outstanding options, rights and awards and
options, rights and awards which may be granted in the future;
(vi) In its sole and absolute discretion, and on such terms and
conditions as it deems appropriate, the Committee may provide either by the
terms of a Restricted Stock award or Deferred Stock award or by action
taken prior to the occurrence of such event that, for a specified period of
time prior to such event, the restrictions imposed under a Restricted Stock
Agreement or a Deferred Stock Agreement upon some or all shares of
Restricted Stock or Deferred Stock may be terminated, and, in the case of
Restricted Stock, some or all shares of such Restricted Stock may cease to
be subject to repurchase under Section 6.6 or forfeiture under Section 6.5
after such event; and
(vii) None of the foregoing discretionary actions taken under this
Section 10.3(b) shall be permitted with respect to Options granted under
Section 3.4(d) to Independent Directors to the extent that such discretion
would be inconsistent with the applicable exemptive conditions of Rule
16b-3. In the event of a Change in Control or a Corporate Transaction, to
the extent that the Board does not have the ability under Rule 16b-3 to
take or to refrain from taking the discretionary actions set forth in
Section 10.3(b)(iii) above, each Option granted to an Independent Director
shall be exercisable as to all shares covered thereby upon such Change in
Control or during the five days immediately preceding the consummation of
such Corporate Transaction and subject to such consummation,
notwithstanding anything to the contrary in Section 4.4 or the vesting
schedule of such Options. In the event of a Corporate Transaction, to the
extent that the Board does not have the ability under Rule 16b-3 to take or
to refrain from taking the discretionary actions set forth in Section
10.3(b)(ii) above, no Option granted to an Independent Director may be
exercised following such Corporate Transaction unless such Option is, in
connection with such Corporate Transaction, either assumed by the successor
or survivor corporation (or parent or subsidiary thereof) or replaced with
a comparable right with respect to shares of the capital stock of the
successor or survivor corporation (or parent or subsidiary thereof).
(c) Subject to Section 10.3(d) and 10.8, the Committee (or the Board, in
the case of Options granted to Independent Directors) may, in its discretion,
include such further provisions and limitations in any Option, Performance
Award, Stock Appreciation Right, Dividend Equivalent, or Stock Payment, or
Restricted Stock or Deferred Stock agreement or certificate, as it may deem
equitable and in the best interests of the Company.
(d) With respect to Incentive Stock Options and Options and Stock
Appreciation Rights intended to qualify as performance-based compensation under
Section 162(m), no adjustment or action described in this Section 10.3 or in any
other provision of the Plan shall be authorized to the extent that such
adjustment or action would cause the Plan to violate Section 422(b)(1) of the
Code or would cause such option or stock appreciation right to fail to so
qualify under Section 162(m), as the case may be, or any successor provisions
thereto. Furthermore, no such adjustment or action shall be authorized to the
extent such adjustment or action would result in short-swing profits liability
under Section 16 or violate the exemptive conditions of Rule 16b-3
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unless the Committee (or the Board, in the case of Options granted to
Independent Directors) determines that the option or other award is not to
comply with such exemptive conditions. The number of shares of Common Stock
subject to any option, right or award shall always be rounded to the next whole
number.
10.4 Approval of Plan by Stockholders. This Plan will be submitted for the
approval of the Company's stockholders within twelve months after the date of
the Board's initial adoption of this Plan. Options, Performance Awards, Stock
Appreciation Rights, Dividend Equivalents or Stock Payments may be granted and
Restricted Stock or Deferred Stock may be awarded prior to such stockholder
approval, provided that such Options, Performance Awards, Stock Appreciation
Rights, Dividend Equivalents or Stock Payments shall not be exercisable and such
Restricted Stock or Deferred Stock shall not vest prior to the time when this
Plan is approved by the stockholders, and provided further that if such approval
has not been obtained at the end of said twelve-month period, all Options,
Performance Awards, Stock Appreciation Rights, Dividend Equivalents or Stock
Payments previously granted and all Restricted Stock or Deferred Stock
previously awarded under this Plan shall thereupon be canceled and become null
and void.
10.5 Tax Withholding. The Company shall be entitled to require payment in
cash or deduction from other compensation payable to each Optionee, Grantee or
Restricted Stockholder of any sums required by federal, state or local tax law
to be withheld with respect to the issuance, vesting or exercise of any Option,
Restricted Stock, Deferred Stock, Performance Award, Stock Appreciation Right,
Dividend Equivalent or Stock Payment. The Committee (or the Board, in the case
of Options granted to Independent Directors) may in its discretion and in
satisfaction of the foregoing requirement allow such Optionee, Grantee or
Restricted Stockholder to elect to have the Company withhold shares of Common
Stock otherwise issuable under such Option or other award (or allow the return
of shares of Common Stock) having a Fair Market Value equal to the sums required
to be withheld.
10.6 Loans. The Committee may, in its discretion, extend one or more loans
to key Employees in connection with the exercise or receipt of an Option,
Performance Award, Stock Appreciation Right, Dividend Equivalent or Stock
Payment granted under this Plan, or the issuance of Restricted Stock or Deferred
Stock awarded under this Plan. The terms and conditions of any such loan shall
be set by the Committee.
10.7 Forfeiture Provisions. Pursuant to its general authority to determine
the terms and conditions applicable to awards under the Plan, the Committee (or
the Board, in the case of Options granted to Independent Directors) shall have
the right (to the extent consistent with the applicable exemptive conditions of
Rule 16b-3) to provide, in the terms of Options or other awards made under the
Plan, or to require the recipient to agree by separate written instrument, that
(i) any proceeds, gains or other economic benefit actually or constructively
received by the recipient upon any receipt or exercise of the award, or upon the
receipt or resale of any Common Stock underlying such award, must be paid to the
Company, and (ii) the award shall terminate and any unexercised portion of such
award (whether or not vested) shall be forfeited, if (a) a Termination of
Employment, Termination of Consultancy or Termination of Directorship occurs
prior to a specified date, or within a specified time period following receipt
or exercise of the award, or (b) the recipient at any time, or during a
specified time period, engages in any activity in competition with the Company,
or which is inimical, contrary or harmful to the interests of the Company, as
further defined by the Committee (or the Board, as applicable).
10.8 Limitations Applicable to Section 16 Persons and Performance-Based
Compensation. Notwithstanding any other provision of this Plan, this Plan, and
any Option, Performance Award, Stock Appreciation Right, Dividend Equivalent or
Stock Payment granted, or Restricted Stock or Deferred Stock awarded, to any
individual who is then subject to Section 16 of the Exchange Act, shall be
subject to any additional limitations set forth in any applicable exemptive rule
under Section 16 of the Exchange Act (including any amendment to Rule 16b-3 of
the Exchange Act) that are requirements for the application of such exemptive
rule. To the extent permitted by applicable law, the Plan, Options, Performance
Awards, Stock Appreciation Rights, Dividend Equivalents, Stock Payments,
Restricted Stock and Deferred Stock granted or awarded hereunder shall be deemed
amended to the extent necessary to conform to such applicable exemptive rule.
Furthermore, notwithstanding any other provision of this Plan, any Option or
Stock Appreciation Right intended to qualify as performance-based compensation
as described in Section 162(m)(4)(C) of the Code shall be subject to
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any additional limitations set forth in Section 162(m) of the Code (including
any amendment to Section 162(m) of the Code) or any regulations or rulings
issued thereunder that are requirements for qualification as performance-based
compensation as described in Section 162(m)(4)(C) of the Code, and this Plan
shall be deemed amended to the extent necessary to conform to such requirements.
10.9 Effect of Plan Upon Options and Compensation Plans. The adoption of
this Plan shall not affect any other compensation or incentive plans in effect
for the Company or any Subsidiary. Nothing in this Plan shall be construed to
limit the right of the Company (i) to establish any other forms of incentives or
compensation for Employees, Directors or Consultants of the Company or any
Subsidiary or (ii) to grant or assume options or other rights otherwise than
under this Plan in connection with any proper corporate purpose including but
not by way of limitation, the grant or assumption of options in connection with
the acquisition by purchase, lease, merger, consolidation or otherwise, of the
business, stock or assets of any corporation, partnership, limited liability
company, firm or association.
10.10 Compliance with Laws. This Plan, the granting and vesting of
Options, Restricted Stock awards, Deferred Stock awards, Performance Awards,
Stock Appreciation Rights, Dividend Equivalents or Stock Payments under this
Plan and the issuance and delivery of shares of Common Stock and the payment of
money under this Plan or under Options, Performance Awards, Stock Appreciation
Rights, Dividend Equivalents or Stock Payments granted or Restricted Stock or
Deferred Stock awarded hereunder are subject to compliance with all applicable
federal and state laws, rules and regulations (including but not limited to
state and federal securities law and federal margin requirements) and to such
approvals by any listing, regulatory or governmental authority as may, in the
opinion of counsel for the Company, be necessary or advisable in connection
therewith. Any securities delivered under this Plan shall be subject to such
restrictions, and the person acquiring such securities shall, if requested by
the Company, provide such assurances and representations to the Company as the
Company may deem necessary or desirable to assure compliance with all applicable
legal requirements. To the extent permitted by applicable law, the Plan,
Options, Restricted Stock awards, Deferred Stock awards, Performance Awards,
Stock Appreciation Rights, Dividend Equivalents or Stock Payments granted or
awarded hereunder shall be deemed amended to the extent necessary to conform to
such laws, rules and regulations.
10.11 Titles. Titles are provided herein for convenience only and are not
to serve as a basis for interpretation or construction of this Plan.
10.12 Governing Law. This Plan and any agreements hereunder shall be
administered, interpreted and enforced under the internal laws of the State of
California without regard to conflicts of laws thereof.
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PROXY PROXY
VIASAT, INC.
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS
SEPTEMBER 2, 1998
The undersigned stockholder(s) of VIASAT, INC. (the "Company") hereby
constitutes and appoints Mark D. Dankberg and Greg D. Monahan, and each of
them, attorneys and proxies of the undersigned, each with power of
substitution, to attend, vote and act for the undersigned at the Annual Meeting
of Stockholders of the Company to be held on September 2, 1998, and at any
adjournment or postponement thereof, according to the number of shares of
common stock of the Company which the undersigned may be entitled to vote, and
with all powers which the undersigned would possess if personally present, as
follows:
THIS PROXY WILL BE VOTED FOR THE ELECTION AS DIRECTORS OF THE NOMINEES SET
FORTH IN THE NOTICE OF ANNUAL MEETING AND PROXY STATEMENT, AND FOR APPROVAL AND
ADOPTION OF THE EQUITY PLAN, UNLESS THE CONTRARY IS INDICATED IN THE
APPROPRIATE PLACE.
(continued on reverse side)
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-- FOLD AND DETACH HERE --
<PAGE> 36
ViaSat, Inc.
PLEASE MARK VOTE IN OVAL IN THE FOLLOWING MANNER USING DARK INK ONLY. /X/
1. Election of Directors:
For Withheld Abstain
Jeffrey M. Nash / / / /
B. Allen Lay / / / /
2. Approval and adoption of the Equity Plan, as
described in the accompanying Proxy Statement. / / / / / /
In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the meeting.
The undersigned revokes any prior proxy at such meeting and ratifies all that
said attorneys and proxies, or any of them, may lawfully do by virtue hereof.
Receipt of the Notice of Annual Meeting of Stockholders and Proxy Statement is
hereby acknowledged.
Dated: ------------------------, 1998
-------------------------------------
-------------------------------------
(Signature(s) of stockholders)
Please sign exactly as name appears
herein. When shares are held by joint
tenants, both should sign; when signing as
an attorney, executor, administrator, trustee
or guardian, give full title as such. If a
corporation, sign in full corporate name by
President or other authorized officer. If a
partnership, sign in partnership name by
authorized partner.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF VIASAT, INC.
PLEASE COMPLETE, SIGN, DATE AND MAIL PROMPTLY IN THE
POSTAGE-PAID ENVELOPE ENCLOSED
- -----------------------------------------------------------------------------
FOLD AND DETACH HERE
