Exhibit 10.4
EMULEX CORPORATION
2004 EMPLOYEE STOCK INCENTIVE PLAN
INCENTIVE STOCK OPTION AGREEMENT
This Incentive Stock Option Agreement is made and entered into by and
between Emulex Corporation, a Delaware corporation ("Company"), and the Employee
identified in the "Emulex Corporation Notice of Grant of Stock Option" ("Grant
Notice") which is attached hereto ("Optionee"), as of the "Grant Date" set forth
in the Grant Notice, with respect to the following facts:
A. The Company has adopted and the stockholders of the Company have
approved the Emulex Corporation 2004 Employee Stock Incentive Plan ("Plan")
pursuant to which the Company is authorized to grant stock options to employees
of the Company or its subsidiaries;
B. Optionee has received and reviewed a copy of the Plan; and
C. Optionee is an employee of the Company or a subsidiary.
NOW, THEREFORE, in consideration of the premises and intending to be
legally bound, the parties agree as follows:
1. GRANT OF STOCK OPTION. Subject to the terms and conditions set forth
herein, the Company hereby grants to Optionee an incentive stock option
("Option") to purchase from the Company, at the "Option Price Per Share" set
forth in the Grant Notice, the "Total Number of Shares" of the Company's
authorized and unissued or reacquired shares of common stock set forth in the
Grant Notice.
2. INCENTIVE STOCK OPTION. The Stock Option granted to Optionee pursuant
to this Agreement is intended to qualify as an "incentive stock option" under
Section 422 of the Internal Revenue Code of 1986, as amended ("Code").
3. ADMINISTRATION. The Plan provides that it shall be administered by the
Board of Directors of the Company ("Board") or by a committee ("Committee")
consisting of not less than two (2) individuals appointed by the Board. Subject
to the provisions of the Plan, the Plan Administrator shall have authority to
construe and interpret the Plan and this Agreement, to promulgate, amend, and
rescind rules and regulations relating to the administration of the Plan and
this Agreement, and to make all of the determinations necessary or advisable for
administration of the Plan and this Agreement. The interpretation and
construction by the Plan Administrator of any provision of this Agreement, shall
be final and binding upon all parties. No member of the Plan Administrator shall
be liable for any action or determination undertaken or made in good faith with
respect to the Plan or this Agreement.
4. TERM OF STOCK OPTION. Unless earlier exercised pursuant to Section 5
below, the Stock Option shall terminate on, and shall not be exercisable after,
the expiration of the earliest of (a) ten (10) years after the Grant Date set
forth in the Grant Notice or, if earlier, the Termination Date set forth in the
Grant Notice, (b) three (3) months after the date Optionee's employment with the
Company and its subsidiaries terminates, if such termination is for any reason
other than Disability (as defined in the Plan), death or cause, or (c) the date
the Optionee's employment with the Company and its subsidiaries terminates if
such termination is for cause as determined by the Plan Administrator, in its
sole discretion, or (d) one (1) year after the date Optionee's employment with
the Company and its subsidiaries terminates, if such termination is a result of
death or Disability, or death results within not more than three months of the
date on which the Optionee ceases to be an employee. Outstanding Options that
are not exercisable at the time Participant's employment with the Company and
its subsidiaries terminates for
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any reason (including upon the Optionholder's death or Disability) shall be
forfeited and expire at the close of business on the date of such termination.
Notwithstanding (a) above, in the case of a Stock Option granted at a time when
Optionee owns stock possessing more than 10% of the total combined voting power
of all classes of stock of the Company or any of its parent or subsidiary
corporations, the term set forth in (a) above, shall not be more than five years
after the Grant Date set forth in the Grant Notice.
5. EXERCISE.
5.1 EXERCISABILITY. Subject to the terms and conditions of this
Agreement, and unless otherwise defined in the Grant Notice, the Stock Option
shall become exercisable on a cumulative basis as to 25% of the Total Number of
Shares of Common Stock of the Company specified in the Grant Notice one year
after the Grant Date specified in the Grant Notice and an additional 6-1/4% of
such Total Number of Shares at any time after the end of each consecutive
calendar quarter thereafter, if Optionee is still employed by the Company or one
of its subsidiaries on such dates, until the Stock Option has become exercisable
with respect to the Total Number of Shares of Common Stock of the Company set
forth in the Grant Notice. The Stock Option may be exercised by Optionee with
respect to any shares of Common Stock of the Company covered by the Stock Option
at any time on or after the date on which the Stock Option becomes exercisable
with respect to such shares; provided that the other terms of this Agreement,
and any terms required by any broker used by the Optionee, are complied with.
Anything set forth in this Agreement to the contrary
notwithstanding, the Stock Option may not be exercised after the time Optionee
ceases to be an employee of the Company and its subsidiaries (irrespective of
the cause) except to the extent it would have been exercisable by Optionee at
such time.
5.2 NOTICE OF EXERCISE. Optionee shall exercise the Option by
delivering to the Company, either in person or by certified or registered mail,
written notice of election to exercise and payment in full of the purchase price
as provided in Subsection 5.3 of this Agreement. The written notice shall set
forth the whole number of shares with respect to which the Option is being
exercised.
5.3 PAYMENT OF PURCHASE PRICE. The purchase price for any shares of
common stock of the Company with respect to which Optionee exercises this Option
shall be paid in full at the time Optionee delivers to the Company the written
notice of election to exercise. The purchase price shall be paid in cash, by
certified bank check, or, at the discretion of the Plan Administrator, upon such
terms and conditions as the Plan Administrator shall approve, either (a) by
delivery to the Company of other Common Stock, duly endorsed for transfer to the
Company, with a Fair Market Value on the date of delivery equal to the exercise
price (or portion thereof) due for the number of shares being acquired, or by
means of attestation whereby the Participant identifies for delivery specific
shares of Common Stock, that have a Fair Market Value on the date of attestation
equal to the exercise price (or portion thereof) and receives a number of shares
of Common Stock equal to the difference between the number of shares thereby
purchased and the number of identified attestation shares of Common Stock (a
"STOCK FOR STOCK EXCHANGE"), provided that any shares of Common Stock used in a
Stock for Stock Exchange that have been acquired from the Company have been held
for more than six (6) months (or such longer or shorter period of time required
to avoid a charge to earnings for financial accounting purposes); (b) during any
period for which the Common Stock is publicly traded, by a copy of instructions
to a broker directing such broker to sell the Common Stock for which such Option
is exercised, and to remit to the Company the aggregate Exercise Price of such
Options (a "CASHLESS EXERCISE"); or (c) in any other form of legal consideration
that may be acceptable to the Administrator, including without limitation with a
full-recourse promissory note. However, if there is a stated par value of the
shares and applicable law requires, the par value of the shares, if newly
issued, shall be paid in cash or cash equivalents. Shares
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having a Fair Market Value at least equal to the principal amount of the loan
shall be pledged as security for payment of the principal amount of any
promissory note and interest thereon. Such pledge shall be evidenced by a pledge
agreement, the terms of which shall be determined by the Administrator, in its
discretion The interest rate payable under the terms of the promissory note
shall not be less than the minimum rate (if any) required to avoid the
imputation of additional interest under the Code. Subject to the foregoing, the
Administrator (at its sole discretion) shall specify the term, interest rate,
amortization requirements (if any) and other provisions of such note; provided,
however, that each loan shall comply with all applicable laws, regulations and
rules of the Board of Governors of the Federal Reserve System and any other
governmental agency having jurisdiction. In addition to the purchase price, the
optionee shall pay the amount of tax required to be withheld (if any) by the
Company or any parent or subsidiary corporation as a result of the exercise of
an Option. At the discretion of the Plan Administrator, upon such terms as the
Plan Administrator shall approve, the Optionee may pay all or a portion of the
tax withholding by (i) cash or bank check payable to the Company, (ii) cashless
exercise, (iii) stock-for-stock exercise, or (iv) a combination of (i), (ii) and
(iii). The Company, in its sole discretion, may extend and maintain, or arrange
for the extension and maintenance of, to the extent permitted by law, credit to
Optionee to finance payment of the purchase price on such terms as may be
approved by the Plan Administrator. Notwithstanding the forgoing, during any
period for which the Common Stock is publicly traded, a Cashless Exercise,
exercise with a promissory note or other transaction by a Director or executive
officer that involves or may involve a direct or indirect extension of credit or
arrangement of an extension of credit by the Company, or an Affiliate in
violation of section 402(a) of the Xxxxxxxx-Xxxxx Act (codified as Section 13(k)
of the Securities Exchange Act of 1934, 15 U.S.C. Section 78m(k)) shall be
prohibited with respect to any Award under this Plan.
6. ISSUANCE OF AND RESTRICTIONS ON SHARES. Promptly after the Company's
receipt of the written notice of election provided for in Subsection 5.2 above
and Optionee's payment in full of the purchase price, the Company shall deliver,
or cause to be delivered to Optionee (unless such certificates are pledged as
security for a promissory note or other loan from the Company), certificates for
the whole number of shares with respect to which the Stock Option is being
exercised by Optionee. Shares shall be registered in the name of Optionee. If
any law or regulation of the Securities and Exchange Commission or of any other
federal or state governmental body having jurisdiction shall require the Company
or Optionee to take any action prior to issuance to Optionee of the shares of
Common Stock of the Company specified in the written notice of election to
exercise, or if any listing agreement between the Company and any national
securities exchange requires such shares to be listed prior to issuance, the
date for the delivery of such shares shall be adjourned until the completion of
such action and/or such listing.
7. FRACTIONAL SHARES. In no event shall the Company be required to issue
fractional shares upon the exercise of any portion of the Stock Option.
8. RIGHTS AS A STOCKHOLDER. Optionee shall have no rights as a stockholder
of the Company with respect to any shares covered by the Stock Option until the
date of the issuance of a share certificate for such shares. No adjustment shall
be made for any dividends (ordinary or extraordinary, whether cash, securities,
or other property) or distributions or other rights for which the record date is
prior to the date such share certificate is issued, except as provided in
Section 9 below.
9. CAPITAL STRUCTURE ADJUSTMENTS. Except as otherwise provided herein,
appropriate and proportionate adjustments shall be made in the number and class
of shares subject to the Stock Option and the purchase price of such shares in
the event of a stock dividend (but only on Common Stock), stock split, reverse
stock split, recapitalization, reorganization, merger, consolidation,
separation, or like change in the capital structure of the Company. In the event
of a liquidation of the Company, or a merger, reorganization, or consolidation
of the Company with any other corporation in which the Company is not the
surviving corporation or the Company becomes a wholly owned subsidiary of
another corporation,
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any unexercised portion of this Stock Option shall be deemed cancelled unless
the surviving corporation in any such merger, reorganization, or consolidation
elects to assume this Stock Option or to use substitute options in place
thereof; provided, however, that, notwithstanding the foregoing, if such Stock
Options would otherwise be cancelled in accordance with the foregoing, the
Optionee shall have the right, exercisable during a ten-day period ending on the
fifth day prior to such liquidation, merger, or consolidation, to exercise this
Stock Option without regard to any restrictions on exercisability. To the extent
that the foregoing adjustments relate to stock or securities of the Company,
such adjustments shall be made by the Plan Administrator the determination of
which shall be final, binding, and conclusive, provided that the Stock Option
shall not be adjusted in a manner that causes it to fail to continue to qualify
as an incentive stock option within the meaning of Section 422 of the Code.
10. NO TRANSFER OF STOCK OPTION. Optionee may not transfer all or any part
of the Stock Option except by will or the laws of descent and distribution, and
the Stock Option shall not be exercisable during the lifetime of Optionee by any
person other than Optionee.
11. INVESTMENT REPRESENTATION. Optionee hereby represents and warrants to
the Company that he is acquiring the Stock Option and the Common Stock thereto
for his own account and not with a view to or for sale in connection with any
distribution thereof. Optionee hereby further represents and warrants to, and
agrees with, the Company that, if he exercises the Stock Option in whole or in
part at a time when there is not in effect under the Securities Act of 1933, as
amended, a registration statement covering the shares issuable upon exercise of
the Stock Option and available for delivery a prospectus meeting the
requirements of Section 10(a)(3) of said Act, that Optionee may be required, as
a condition of issuance of the shares of Common Stock of the Company covered by
the Stock Option, to represent to the Company that the shares issued pursuant to
the exercise of the Stock Option are being acquired for investment and without a
view to distribution thereof; and that in such case the Company may place a
legend on the certificate(s) evidencing the shares of the Common Stock of the
Company issued upon exercise of the Stock Option reflecting the fact that the
shares were acquired for investment and cannot be sold or transferred unless
registered under said Act or unless counsel for the Company is satisfied that
the circumstances of the proposed transfer do not require such registration. In
addition, the Company may place a legend on the certificates evidencing the
shares reflecting the fact that they are subject to restrictions on transfer
under the terms of Section 6 hereof.
12. GENERAL PROVISIONS.
12.1 ENTIRE AGREEMENT. This Agreement contains the entire
understanding between the parties with respect to the subject matter hereof, and
supersedes any and all prior written or oral agreements between the parties with
respect to the subject matter hereof. There are no representations, agreements,
arrangements, or understandings, either written or oral, between or among the
parties with respect to the subject matter hereof which are not set forth in
this Agreement.
12.2 GOVERNING LAW. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of California.
12.3 NOTICES. Any notice given pursuant to this Agreement may be
served personally on the party to be notified or may be mailed, with postage
thereon fully prepaid, by certified or registered mail, with return receipt
requested, addressed as set forth by the party's signature of this Agreement or
at such other address as such party may designate in writing from time to time.
Any notice given as provided in the preceding sentence shall be deemed delivered
when given, if personally served, or ten (10) business days after mailing, if
mailed.
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12.4 FURTHER ACTS. Each party to this Agreement agrees to perform
such further acts and to execute and deliver such other and additional documents
as may be reasonably necessary to carry out the provisions of this Agreement.
12.5 SEVERABILITY. If any term, provision, covenant, or condition of
this Agreement is held by a court of competent jurisdiction to be invalid,
illegal, or unenforceable for any reason, such invalidity, illegality, or
unenforceability shall not affect any of the other terms, provisions, covenants,
or conditions of this Agreement, each of which shall be binding and enforceable.
12.6 MODIFICATION AND AMENDMENT. This Agreement may not be modified,
extended, renewed or substituted without an amendment or other agreement in
writing signed by the parties to this Agreement.
12.7 NOTICE OF DISQUALIFYING DISPOSITION OF ISO SHARES. If
Participant sells or otherwise disposes of any of the shares of Common Stock
acquired pursuant to the exercise of this Option on or before the later of (a)
the date two (2) years after the Date of Grant, and (b) the date one (1) year
after transfer of such Shares to Participant upon exercise of the Option,
Participant shall immediately notify the Company in writing of such disposition.
11/04
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