3COM CORPORATION
Exhibit 10.4
3COM CORPORATION
2003 STOCK PLAN
PERFORMANCE ACCELERATED VESTING
RESTRICTED STOCK (PAVRS) AGREEMENT
THIS STOCK GRANT AGREEMENT (the “Award Agreement”) is made on <<date>>, by and between 3Com Corporation (the “Company”), and <<recipient>> (the “Participant”).
The Company desires to issue and the Participant desires to acquire shares of the Common Stock as herein described, pursuant to the Company’s 2003 Stock Plan (the “Plan”), on the terms and conditions set forth in this Award Agreement and the Plan, which is incorporated herein by reference. Unless otherwise defined herein, capitalized terms shall have the meaning given to them in the Plan.
IT IS AGREED between the parties as follows:
1. Issuance of Shares. On the effective date of this Award Agreement as set forth above (the “Grant Date”), the Company shall issue to Participant, subject to the provisions hereof and the Plan, <<insert number>> shares of Common Stock (the “Shares”) in consideration for the Participant’s past service with the Company.
No Shares shall be issued pursuant to this Award Agreement if the issuance and delivery of such Shares would constitute a violation of any applicable federal or state securities law or other law or regulation, or would fail to satisfy the requirements of any stock exchange upon which the Shares may then be listed. As a condition to the issuance and delivery of the Shares, the Company may require the Participant to satisfy any qualifications that may be necessary or appropriate, to evidence compliance with any applicable law or regulation and to make any representation or warranty with respect thereto as may be requested by the Company.
2. Administration. All questions of interpretation concerning this Award Agreement shall be determined by the Administrator. All determinations by the Administrator shall be final and binding upon all persons having an interest in this Award Agreement.
3. Vesting and Unvested Share Reacquisition Right.
(a) Vesting.
[ENTER VESTING HERE OR REFERENCE EXHIBIT]
(b) One Year Holding Requirement. The PAVRS granted to a Participant are subject to a holding period requirement of one (1) year when accelerated vesting occurs. If the acceleration fails to take place, the Shares vesting four (4) years from grant (cliff vesting) do not require the Participant to maintain a one (1)-year post vesting holding period.
[(c) Tandem Cash Award. A tandem cash award will be made to the Participant when the Shares vest. The cash award is designed to assist the Participant in paying the tax liability due upon vesting. The amount of tax liability will be “grossed-up” and calculated using the Participant’s marginal rate for federal and applicable state income taxes and the then current Medicare tax rate. The actual tandem cash award will be based on the lesser of the value of the restricted stock at grant or at vesting. The award will not result in a check being directly issued to the Participant. Rather, the transaction will be made by payroll entries to the Participant’s income account and the appropriate tax authorities. If the value of the Vested Shares
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significantly exceed the value of the Participant’s cash award, it may be necessary to surrender the minimum number of Shares to fully meet the Participant’s tax obligation. In this case, the one (1)-year holding period requirement will not apply to Shares surrendered to satisfy taxes in excess of the value of the tandem cash award. The tandem cash award is provided upon acceleration or in four (4) years if cliff vesting occurs.]
(d) Unvested Share Reacquisition Right. In the event the Participant’s Service Provider relationship with the Company is terminated for any reason, with or without cause, the Company shall automatically reacquire Shares that are not then Vested Shares (the “Unvested Shares”) and the Participant shall not be entitled to any payment therefor (the “Unvested Share Reacquisition Right”).
(e) Change in Control. Subject to Section 14(c) of the Plan, in the event of a Change in Control (as defined in the Plan), Shares shall be assumed or an equivalent award substituted by the successor corporation or a Parent or Subsidiary of the successor corporation, and the Unvested Share Reacquisition Right attached to such Shares shall continue in full force and effect. In the event that the successor corporation refuses to assume or substitute for the Shares, the Participant shall fully vest in such Shares, including Shares as to which he or she would not otherwise be vested.
(f) Parachute Payment. In the event that the acceleration of the vesting of any Unvested Shares pursuant to Section 3(e) above will result in a “parachute payment” as defined in Section 280G of the Code, notwithstanding Section 3(e), the extent to which vesting will be accelerated in connection with a Change in Control shall not exceed the amount of vesting which produces the greatest after-tax benefit to the Participant, as determined by the Company in a fair and equitable manner.
4. Legends. The Company may at any time place legends referencing the Unvested Share Reacquisition Right set forth in Section 3 above and any applicable federal and/or state securities law restrictions on all certificates representing Shares subject to the provisions of this Award Agreement. The Participant shall, at the request of the Company, promptly present to the Company any and all certificates representing Shares acquired under this Award Agreement in the possession of the participant in order to carry out the provisions of this Section 4. Unless otherwise specified by the Company, legends placed on such certificates may include, but shall not be limited to, the following:
“THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO RESTRICTIONS SET FORTH IN THIS AWARD AGREEMENT BETWEEN THE CORPORATION AND THE REGISTERED HOLDER, OR SUCH HOLDER’S PREDECESSOR IN INTEREST, A COPY OF WHICH IS ON FILE AT THE PRINCIPAL OFFICE OF THE CORPORATION.”
5. Escrow.
(a) Establishment of Escrow. To insure that the Shares subject to the Unvested Share Reacquisition Right will be available for reacquisition, the Company may require the Participant to deposit the certificate or certificates evidencing the Unvested Shares with an escrow agent designated by the Company under the terms and conditions of an escrow agreement approved by the Company. If the Company does not require such deposit as a condition of the issuance of Shares to the Participant, the Company reserves the right at any time to require the Participant to so deposit the Unvested Share certificate or certificates in escrow. The Company shall bear the expenses of the escrow.
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(b) Delivery of Shares to Participant. As soon as practicable after the expiration of the Unvested Share Reacquisition Right, the escrow agent shall deliver to the Participant the Shares no longer subject to such restriction.
6. Transfers in Violation of Award Agreement. The Company shall not be required (a) to transfer on its books any Shares which are sold or transferred in violation of any of the provisions set forth in this Award Agreement, or (b) to treat as the owner of the Shares or to accord the right to vote as such owner or to pay dividends to any transferee to whom the Shares shall have been so transferred.
7. Rights as a Stockholder or Employee. The Participant shall have no rights as a stockholder with respect to the Shares until such time the Shares are issued to the Participant in the form of a certificate or certificates for the Shares. Except as provided in Section 14(a) of the Plan, no adjustment shall be made for dividends or distributions or other rights for which the record date is prior to the date such certificate or certificates are issued. Nothing in the Plan or in this Award Agreement shall confer upon the Participant any right to continue as a Service Provider or to interfere in any way with any right of the Company to terminate the Participant’s Service Provider relationship at any time.
8. Further Instruments. The parties hereto agree to execute such further instruments and to take such further action as may reasonably be necessary to carry out the intent of this Award Agreement.
9. Notice. Any notice required or permitted hereunder shall be given in writing and shall be deemed effectively given upon personal delivery or upon electronic delivery, or upon delivery by certified mail, addressed to the other party hereto at the address shown below such party’s signature or at such other address as such party may designate by ten (10) days advance written notice to all other parties hereto.
10. Binding Effect. This Award Agreement shall inure to the benefit of the successors and assigns of the Company and, subject to the restrictions on transfer herein set forth, be binding upon the Participant and the Participant’s heirs, executors, administrators, successors and assigns.
11. Withholding. At the time that this Award Agreement is executed, or at any time thereafter as determined by the Company, the Company shall have the right to withhold the applicable minimum withholding taxes, including but not limited to federal tax, state tax, foreign taxes or social taxes, if any, which arise in connection with the acquisition of Shares pursuant to the Plan, including, without limitation, obligations arising upon (i) the transfer, in whole or in part, of any Shares, (ii) the lapse of any restriction with respect to any Shares acquired pursuant to the Plan, or (iii) the filing of an election to recognize a tax liability. The Participant authorizes the Company to withhold from the Participant’s compensation such amounts as may be necessary to satisfy the minimum applicable tax withholding obligations arising in connection with the issuance of the Shares pursuant to the Plan. The Company shall have no obligation to issue a certificate as to the Shares and/or to release the Shares from escrow until applicable withholding obligations have been satisfied.
12. Trade for Taxes (Swap). Please circle election below if you wish to trade Shares to satisfy the minimum required tax withholding in excess of the tandem cash amount determined upon the date of vesting outlined in Section 12 above. The remaining amount due after the trade, less than the value of one Share, will be deducted from your cash compensation. If you wish to change your election during the life of the Award Agreement, please contact stock administration a minimum of thirty (30) days prior to the applicable vesting date.
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TRADE SHARES FOR TAXES DUE (please circle one): |
YES |
NO |
If you do not wish to trade Shares for taxes, select “no” above, you must provide payment to stock administration within fifteen (15) days from date of vesting. If payment is not provided within fifteen (15) days after applicable taxes are due, stock administration will have the authority and discretion to (i) trade Shares to satisfy such applicable taxes or (ii) to withhold the entire tax obligation from your compensation.
13. Broker. Please select one of the following brokers. Your Shares will be deposited directly into your brokerage account when vested and the applicable withholding obligations have been satisfied.
SELECT BROKER (please circle): E*Trade-Retail Account / Xxxxx Xxxxxx / BofA Securities
14. Certificate Registration. The certificate or certificates for the Shares acquired pursuant to this Award Agreement shall be registered in the name of the Participant.
15. Integrated Agreement. This Award Agreement and the Plan constitute the entire understanding and agreement of the Participant and the Company with respect to the subject matter contained herein, and there are no agreements, understandings, restrictions, representations, or warranties among the Participant and the Company other than those set forth or provided for herein or therein.
16. Governing Law. This Award Agreement is governed by the internal substantive laws, but not the choice of law rules, of California.
17. Data Privacy. By entering into this Award Agreement, and as a condition of the grant of the Shares, the Participant consents to the collection, use and transfer of personal data as described in this Section. The Participant understands that the Company and its subsidiaries hold certain personal information about the Participant including, but not limited to, the Participant’s name, home address and telephone number, date of birth, social security number or equivalent tax identification number, salary, nationality, job title, any shares of stock or directorships held in the Company, details of all Shares or other entitlements to Shares awarded, cancelled, exercised, vested, unvested or outstanding in the Participant’s favour, for the purpose of managing and administering the Plan (“Data”). The Participant further understands that the Company and/or its subsidiaries will transfer Data amongst themselves as necessary for the purposes of implementation, administration, and management of the Participant’s participation in the Plan, and that the Company and/or its subsidiaries may each further transfer Data to any third parties assisting the Company in the implementation, administration and management of the Plan (“Data Recipients”). The Participant understands that these Data Recipients may be located in the Participant’s country of residence, the European Economic Area, or elsewhere, such as the United States. The Participant authorizes the Data Recipients to receive, possess, use, retain and transfer Data in electronic or other form, for the purposes of implementing, administering and managing the Participant’s participation in the Plan, including any transfer of such Data, as may be required for the administration of the Plan and/or the subsequent holding of Shares on the Participant’s behalf, to a broker or third party with whom the Shares acquired upon vest may be deposited. The Participant understands that he or she may, at any time, review the Data, require any necessary amendments to it or withdraw the consent herein in writing by contacting the Company. The Participant further understands that withdrawing consent may affect the Participant’s ability to participate in the Plan.
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