Form of Performance Share Agreement
PCTEL, INC.
1997 STOCK PLAN
This Performance Share Agreement (the “Agreement”), dated August ___, 2007, is effective
as of March 16, 2007 (the “Date of Grant”), between PCTEL, INC. (hereinafter called the “Company”)
and (hereinafter called the “Participant”). This Agreement is
intended to memorialize the authorization by the Company’s board of directors made on the Date of
Grant of the incentive provided for herein. Unless otherwise defined herein, the terms defined in
the amended and restated 1997 Stock Plan (the “Plan”) will have the same defined meanings in this
Agreement.
1. Award Grant. Subject to the terms and conditions set forth herein, the Company has
awarded to Participant as of the Date of Grant a target number of Performance Shares
under the Plan. The performance goals for the stock grant consist of (i) targeted annual revenue
growth of the Company and (ii) targeted annual pro forma net income growth of the Company, subject
to these and other explanatory terms and conditions as have been adopted and approved by the Board
of Directors on the Date of Grant and communicated in writing to Participant (the “Performance
Share Award Program”). The performance period for achieving these goals is the four-year fiscal
period beginning January 1, 2007 and ending December 31, 2010 (the “Performance Period”), with
performance determinations upon the completion of each year within the Performance Period, and for
the entire four years within the Performance Period, in accordance with the Performance Share
Award Program. Depending on the level of achievement, the actual number of Performance Shares to
be awarded may be increased or decreased from the targeted amount. The maximum number of
Performance Shares that may be awarded to Participant based on the overachievement of the
performance goals is .
2. Obligation to Pay. Each Performance Share represents the right to receive one
share to the extent it is earned in accordance with the Performance Share Award Program. Unless
and until the Performance Shares are earned in the manner set forth in the Performance Share Award
Program, Participant will have no right to payment of such Performance Shares. Prior to actual
payment of any earned Performance Shares, such Performance Shares will represent an unsecured
obligation.
Notwithstanding the foregoing provisions of this Section 2, in the event the Company (or the
Subsidiary employing Participant) terminates Participant as a Service Provider without “Cause” or
Participant voluntarily resigns for “Good Reason”, or Participant ceases to be a Service Provider
as the result of Participant’s death or “Disability”, the Performance Shares shall vest in
accordance with the terms of Participant’s Employment Agreement with the Company. The definitions
used in this paragraph shall have the meanings given them in such agreement, as may be modified
from time to time.
In addition, notwithstanding the foregoing provisions of this Section 2, in the event of a
Change in Control that occurs during the Performance Period while Participant is a Service
Provider, the Performance Shares will vest in accordance with the terms of Participant’s Management
Retention Agreement with the Company.
Subject to the foregoing acceleration provisions and any such provisions set forth in the
Plan, in the event Participant ceases to be a Service Provider for any or no reason before
Participant earns and vests the Performance Shares pursuant to this Agreement, the award of
Performance Shares and Participant’s right to acquire any Performance Shares hereunder will
immediately terminate.
3. Administrator Discretion. The Administrator, in its discretion, may accelerate the
vesting of the balance, or some lesser portion of the balance, of the Performance Shares at any
time, subject to the terms of the Plan. If so accelerated, such Performance Shares will be
considered as having vested as of the date specified by the Administrator. If the Administrator,
in its discretion, accelerates the vesting of the balance, or some lesser portion of the balance,
of the Performance Shares, the payment of such accelerated Performance Shares nevertheless shall be
made at the same time or times as if such Performance Shares had vested in accordance with the
vesting schedule set forth in Section 1 herein and the Performance Share Award Program (whether or
not Participant remains employed by the
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Company or by one of its Subsidiaries as of such date(s)), unless an earlier payment date, in
the judgment of the Administrator, would not cause Participant to incur an additional tax under
Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”) and the final
regulations and any other guidance promulgated thereunder (“Section 409A”).
4. Payment after Earning. Any Performance Shares that are earned or are deemed earned
in accordance with the Performance Share Award Program will be paid to Participant (or in the
event of Participant’s death, to his or her estate) in whole Performance Shares, subject to
Participant satisfying any applicable tax withholding obligations as set forth in Section 9.
Participant will not be required to make any additional monetary payment (other than applicable tax
withholding, if any) upon settlement of the award.
5. Payments after Death. Any distribution or delivery to be made to Participant under
this Agreement will, if Participant is then deceased, be made to Participant’s designated
beneficiary, or if no beneficiary survives Participant, the administrator or executor of
Participant’s estate. Any such transferee must furnish the Company with (a) written notice of his
or her status as transferee, and (b) evidence satisfactory to the Company to establish the validity
of the transfer and compliance with any laws or regulations pertaining to said transfer.
6. Section 409A. Notwithstanding anything to the contrary in this Agreement, if
Participant is a “specified employee” within the meaning of Section 409A at the time of his
termination, and the Performance Shares payable to Participant, if any, pursuant to this Agreement,
when considered together with any other severance payments or separation benefits which may be
considered deferred compensation under Section 409A (together, the “Deferred Compensation
Separation Benefits”) will not and could not under any circumstances, regardless of when such
termination occurs, be paid in full by the fifteenth day of the third month of the Company’s fiscal
year following Participant’s termination, then only that portion of the Deferred Compensation
Separation Benefits which do not exceed the Section 409A Limit (as defined below) may be made
within the first six (6) months following Participant’s termination of employment in accordance
with the payment schedule applicable to each such payment or benefit. For these purposes, each
severance payment is hereby designated as a separate payment and will not collectively be treated
as a single payment. Any portion of the Deferred Compensation Separation Benefits in excess of the
Section 409A Limit shall accrue and, to the extent such portion of the Deferred Compensation
Separation Benefits would otherwise have been payable within the first six (6) months following
Participant’s termination of employment, will become payable on the first payroll date that occurs
on or after the date six (6) months and one (1) day following the date of Participant’s termination
of employment. All subsequent Deferred Compensation Separation Benefits, if any, will be payable
in accordance with the payment schedule applicable to each payment or benefit.
This provision is intended to comply with the requirements of Section 409A so that none of the
Performance Shares to be provided hereunder will be subject to the additional tax imposed under
Section 409A, and any ambiguities herein will be interpreted to so comply. The Company and
Participant agree to work together in good faith to consider amendments to this Agreement and to
take such reasonable actions which are necessary, appropriate or desirable to avoid imposition of
any additional tax or income recognition prior to actual payment to Participant under Section 409A.
For purposes of this Agreement, “Section 409A Limit” shall mean the lesser of two (2) times:
(i) Participant’s annualized compensation based upon the annual rate of pay paid to Participant
during the Company’s taxable year preceding the Company’s taxable year of Participant’s termination
of employment as determined under Treasury Regulation 1.409A-1(b)(9)(iii)(A)(1) and any Internal
Revenue Service guidance issued with respect thereto; or (ii) the maximum amount that may be taken
into account under a qualified plan pursuant to Section 401(a)(17) of the Code for the year in
which Participant’s employment is terminated.
7. Rights as Stockholder. Except as set forth in Section 5, neither Participant nor
any person claiming under or through Participant will have any of the rights or privileges of a
stockholder of the Company in respect of any Performance Shares deliverable hereunder, unless and
until certificates representing the Performance Shares will have been issued, recorded on the
records of the Company or its transfer agents or registrars, and delivered to Participant.
8. Effect on Employment. Participant acknowledges and agrees that the earning and
vesting of Performance Shares pursuant to Section 2 hereof is accomplished only by the achievement
of the goals and Participant’s
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continuing to be a Service Provider through the applicable Performance Period (and not through
the act of being hired or acquiring Performance Shares hereunder). Participant further
acknowledges and agrees that this Agreement, the transactions contemplated hereunder and the
earning and vesting provisions set forth herein do not constitute an express or implied promise of
Participant continuing to be a Service Provider for any period, or at all, and will not interfere
with the Participant’s right or the right of the Company (or the Affiliate employing Participant)
to terminate Participant as a Service Provider at any time, with or without cause.
9. Tax Withholding. Notwithstanding any contrary provision of this Agreement, no
certificate representing Performance Shares will be issued to Participant, unless and until
satisfactory arrangements (as determined by the Administrator) will have been made by Participant
with respect to the payment of income, employment and other taxes which the Company determines must
be withheld with respect to such Performance Shares so issuable. All income, employment and other
taxes related to the Performance Share Award and any Performance Shares delivered in payment
thereof are the sole responsibility of Participant. The Administrator, in its sole discretion and
pursuant to such procedures as it may specify from time to time, may permit Participant to satisfy
such tax withholding obligation, in whole or in part by one or more of the following (without
limitation): (a) paying cash, (b) electing to have the Company withhold otherwise deliverable
Performance Shares having a Fair Market Value equal to the amount required to be withheld, (c)
delivering to the Company already vested and owned Performance Shares having a Fair Market Value
equal to the amount required to be withheld, or (d) selling a sufficient number of such
Performance Shares otherwise deliverable to Participant through such means as the Company may
determine in its sole discretion (whether through a broker or otherwise) equal to the amount
required to be withheld. If Participant fails to make satisfactory arrangements for the payment of
any required tax withholding obligations hereunder at the time any applicable Performance Shares
otherwise are scheduled to vest pursuant to Section 2, Participant will permanently forfeit such
Performance Shares and the Performance Shares will be returned to the Company at no cost to the
Company.
10. Additional Conditions to Issuance of Stock. If at any time the Company will
determine, in its discretion, that the listing, registration or qualification of the Performance
Shares upon any securities exchange or under any state or federal law, or the consent or approval
of any governmental regulatory authority is necessary or desirable as a condition to the issuance
of Performance Shares to Participant (or his estate), such issuance will not occur unless and until
such listing, registration, qualification, consent or approval will have been effected or obtained
free of any conditions not acceptable to the Company. Where the Company determines that the
delivery of the payment of any Performance Shares will violate federal securities laws or other
applicable laws, the Company will defer delivery until the earliest date at which the Company
reasonably anticipates that the delivery of Performance Shares will no longer cause such violation.
The Company will make all reasonable efforts to meet the requirements of any such state or federal
law or securities exchange and to obtain any such consent or approval of any such governmental
authority.
11. Restrictions on Sale of Securities. Subject to Section 10, the Performance Shares
awarded under this Agreement will be registered under the federal securities laws and will be
freely tradable upon receipt. However, Participant’s subsequent sale of the Performance Shares
will be subject to any market blackout-period that may be imposed by the Company and must comply
with the Company’s xxxxxxx xxxxxxx policies, and any other applicable securities laws.
12. Successors. Subject to the limitation on the transferability of this grant
contained herein, this Agreement will be binding upon and inure to the benefit of the heirs,
legatees, legal representatives, successors and assigns of the parties hereto.
13. Address for Notices. Any notice to be given to the Company under the terms of
this Agreement will be addressed to the Company, in care of its General Counsel at PCTEL, Inc.,
0000 Xxxx Xxxxxxx Xxxx Xxxxx 000, Xxxxxxx, XX 00000, or at such other address as the Company may
hereafter designate in writing.
14. Transferability. Except to the limited extent provided in Section 5, this grant
and the rights and privileges conferred hereby will not be transferred, assigned, pledged or
hypothecated in any way (whether by operation of law or otherwise) and will not be subject to sale
under execution, attachment or similar process. Upon any attempt to transfer, assign, pledge,
hypothecate or otherwise dispose of this grant, or any right or privilege conferred hereby, or
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upon any attempted sale under any execution, attachment or similar process, this grant and the
rights and privileges conferred hereby immediately will become null and void.
15. Plan Governs. This Agreement is subject to all terms and provisions of the Plan.
In the event of a conflict between one or more provisions of this Agreement and one or more
provisions of the Plan, the provisions of the Plan will govern, unless otherwise provided in
Participant’s Employment Agreement or Management Retention Agreement.
16. Administrator Authority. The Administrator will have the power to interpret the
Plan and this Agreement and to adopt such rules for the administration, interpretation and
application of the Plan as are consistent therewith and to interpret or revoke any such rules
(including, but not limited to, the determination of whether or not any Performance Shares have
been earned and vested). All actions taken and all interpretations and determinations made by the
Administrator in good faith will be final and binding upon Participant, the Company and all other
interested persons. No member of the Administrator will be personally liable for any action,
determination or interpretation made in good faith with respect to the Plan or this Agreement.
17. Electronic Delivery. The Company may, in its sole discretion, decide to deliver
any documents related to Performance Shares awarded under the Plan or future Performance Shares
that may be awarded under the Plan by electronic means or request Participant’s consent to
participate in the Plan by electronic means. Participant hereby consents to receive such documents
by electronic delivery and agrees to participate in the Plan through an on-line or electronic
system established and maintained by the Company or another third party designated by the Company.
18. Captions. Captions provided herein are for convenience only and are not to serve
as a basis for interpretation or construction of this Agreement.
19. Agreement Severable. In the event that any provision in this Agreement will be
held invalid or unenforceable, such provision will be severable from, and such invalidity or
unenforceability will not be construed to have any effect on, the remaining provisions of this
Agreement.
20. Entire Agreement. This Agreement constitutes the entire understanding of the
parties on the subjects covered. The Participant expressly warrants that he or she is not
executing this Agreement in reliance on any promises, representations, or inducements other than
those contained herein.
21. Modifications to the Agreement. This Agreement constitutes the entire
understanding of the parties on the subjects covered. The Participant expressly warrants that he
or she is not accepting this Agreement in reliance on any promises, representations, or inducements
other than those contained herein. Modifications to this Agreement can be made only in an express
written contract executed by a duly authorized officer of the Company.
22. Amendment, Suspension or Termination of the Plan. By accepting this award, the
Participant expressly warrants that he or she has received a right to purchase stock under the
Plan, and has received, read and understood a description of the Plan. The Participant understands
that the Plan is discretionary in nature and may be modified, suspended or terminated by the
Company at any time.
23. Governing Law. This Agreement shall be governed by the laws of the State of
Illinois, without giving effect to the conflict of law principles thereof. For purposes of
litigating any dispute that arises under this award of Performance Shares or this Agreement, the
parties hereby submit to and consent to the jurisdiction of the State of Illinois, and agree that
such litigation shall be conducted in the courts of Xxxx County, Illinois, or the federal courts
for the United States located in or around Xxxx County, Illinois, and no other courts, where this
award of Performance Shares is made and/or to be performed.
IN WITNESS WHEREOF, the parties have signed this Agreement effective as of the date and year
indicated above.
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| PCTEL, INC. | ||||||||
| By: | ||||||||
ACCEPTED |
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| Participant | ||||||||
| PRINT NAME: | ||||||||
DATE: |
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