Filed by the
Registrant ☒ Filed by a Party other than the
Registrant ☐
You are cordially invited to attend the 2017 Annual Meeting of Stockholders of salesforce.com, inc. on Tuesday, June 6, 2017 at 2:00 p.m. local time at 350
Mission Street, San Francisco, California 94105.
At this years meeting, we will vote on the election of directors, amendments to our 2013 Equity Incentive
Plan and our 2004 Employee Stock Purchase Plan to increase the number of shares authorized for grant thereunder and the ratification of the selection of Ernst & Young LLP as Salesforces independent registered public accounting firm.
We will also conduct a non-binding advisory vote to approve the compensation of Salesforces named executive officers, as well as a non-binding advisory vote on the frequency of future advisory votes to approve named executive officer
compensation. If properly presented at the meeting, we will also consider one stockholder proposal as described in the Notice of 2017 Annual Meeting of Stockholders and Proxy Statement. Finally, we will transact such other business as may properly
come before the meeting and stockholders will have an opportunity to ask questions.
Your vote is important. Whether or not you plan to attend the Annual Meeting,
please vote as soon as possible. You may vote over the Internet, by telephone or by mailing a completed proxy card (if you request printed copies of the proxy materials to be mailed to you). Your vote by proxy will ensure your representation at the
Annual Meeting regardless of whether you attend the meeting. Details regarding admission to the Annual Meeting and the business to be conducted are described in the accompanying Notice of 2017 Annual Meeting of Stockholders and Proxy Statement.
Thank you for your ongoing support of Salesforce. We look forward to seeing you at the Annual Meeting.
NOTICE IS HEREBY GIVEN that the 2017 Annual Meeting of Stockholders (the Annual Meeting) of salesforce.com, inc., a Delaware
corporation (Salesforce), will be held on Tuesday, June 6, 2017 at 2:00 p.m. local time at 350 Mission Street, San Francisco, California 94105 for the following purposes:
The foregoing items of business are more fully described in the Proxy Statement accompanying this
Notice. We also will transact any other business that may properly come before the Annual Meeting, but are not aware of any such additional matters.
Stockholders at the close of business on April 12, 2017 and their proxies are entitled to attend and vote at the Annual Meeting and
any and all adjournments, continuations or postponements thereof.
All stockholders are invited to attend the Annual Meeting in
person. Any stockholder attending the Annual Meeting may vote even if such stockholder returned a proxy. You will need to bring your Notice of Internet Availability of Proxy Materials, or other proof of ownership of Salesforce common stock as of the
record date, as well as photo identification, to enter the Annual Meeting.
U.S. Securities and Exchange Commission rules allow
companies to furnish proxy materials to their stockholders over the Internet. This expedites stockholders receipt of proxy materials, lowers the annual meeting costs and conserves natural resources. Thus, we are mailing stockholders a Notice
of Internet Availability of Proxy Materials, rather than a paper copy of the Proxy Statement and our 2017 Annual Report. The Notice of Internet Availability of Proxy Materials contains instructions on how to access our proxy materials online, vote
and (if desired) obtain a paper copy of our proxy materials.
This Notice, the Notice of Internet Availability of Proxy Materials,
the Proxy Statement and the 2017 Annual Report are first being made available to stockholders on April 26, 2017.
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PROPOSAL 7 STOCKHOLDER PROPOSAL REQUESTING, ON AN ADVISORY
BASIS, ACTION TO
ALLOW STOCKHOLDERS TO REQUEST SPECIAL MEETINGS OF
STOCKHOLDERS
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PROPOSAL 7 STOCKHOLDER PROPOSAL REQUESTING, ON AN ADVISORY BASIS, ACTION TO ALLOW STOCKHOLDERS TO REQUEST
SPECIAL MEETINGS OF STOCKHOLDERS
The Company has been advised that James McRitchie and Myra K. Young, 9295 Yorkship Court, Elk Grove, CA, 95758, beneficial
owners of 35 shares of the Companys common stock, intend to submit the proposal set forth below at the Annual Meeting:
RESOLVED
: The shareholders of
Salesforce.com Inc. (CRM or Company) hereby request that the Board of Directors take the
steps necessary to amend our bylaws and each appropriate governing document to give holders in the aggregate of 15% of our outstanding common stock the power to call a special shareowner meeting.
This proposal does not impact our boards current power to call a special meeting.
Supporting Statement
by Stockholder Proponent
Delaware law allows 10% of company shares to call a special meeting. A shareholder right to call a special meeting is a way
to bring an important matter to the attention of both management and shareholders outside the annual meeting cycle. This is important because there could be 15-months between annual meetings.
A shareholder right to act by written consent and to call a special meeting are two complimentary ways to bring an important matter to the attention of both management
and shareholders outside the annual meeting cycle. Both are associated with increased governance quality and shareholder value. Our Company offers no right of shareholders to act by written consent or to call a special meeting.
Currently, more than 60% of the companies in the S&P 500 have adopted company bylaws, articles of incorporation, or charter provisions to allow shareholders to call a
special meeting.
This proposal topic won more than 87% support at Illinois Tool Works in 2015. It may be possible to adopt this proposal by
simply incorporating something similar to the following text into our governing documents:
Special meetings of stockholders, for any purpose or
purposes, unless otherwise prescribed by statute, may be called by the Chairman of the Board or the President, and shall be called by the Chairman of the Board or President or Secretary upon the order in writing of a majority of or by resolution of
the Board of Directors, or at the request in writing of stockholders owning 15% of the entire capital stock of the Corporation issued and outstanding and entitled to vote.
We urge the Board to join the mainstream of major U.S. companies and establish a right for shareholders owning 15% of our outstanding common sock [sic] to call a special
meeting.
Please vote for: Special Shareowner MeetingsProposal 7
The Companys
Statement of Opposition
The Board of Directors recommends a vote AGAINST Proposal 7 for the following reasons:
We have a history of regularly reviewing and pro-actively embracing appropriate corporate governance practices, reinforcing our Boards accountability to
stockholders, as well as pursuing productive engagement with our stockholders. As a result, we understand that the ability to call special stockholder meetings between annual meetings is a topic of interest to some stockholders and a topic about
which stockholder perspectives vary. We intend to gather additional views from stockholders as we study the topic further. However, we are concerned that this proposal, which advocates a relatively low ownership threshold for triggering the ability
to call special meetings, could result in misuse by enabling a small group of stockholders to pursue narrow special interests that may not be in the best interests of all stockholders. For that reason, and other reasons outlined below, we recommend
a vote against this proposal.
In evaluating this stockholder proposal, our Board considered the relatively low ownership threshold proposed and the
context of the Companys ownership base. In particular, given existing concentration in ownership of the Companys stock, a low number of stockholders could satisfy the proposed threshold and use the right to advocate special interest
agendas.
The Board also considered:
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the significant costs and resources required to convene a special meeting,
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the potential for a special meeting to divert Board and executive management attention away from managing the business on behalf of all stockholders,
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the strong governance practices we already have in place,
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the fact that our Bylaws already provide stockholders a mechanism for bringing business before the Companys annual stockholder meeting each year, and
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2017 Proxy Statement
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PROPOSAL 7 STOCKHOLDER PROPOSAL REQUESTING, ON AN ADVISORY BASIS,
ACTION TO
ALLOW STOCKHOLDERS TO REQUEST SPECIAL MEETINGS OF
STOCKHOLDERS (CONTINUED)
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the opportunities stockholders have to engage in regular, substantive dialogue with the Company to communicate their views and offer feedback.
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The Board believes it is important to strike an appropriate balance between providing stockholders meaningful rights and protecting against misuse of those rights. We
recognize that the Board is accountable to our stockholders, and we believe our governance practices demonstrate and promote our accountability and advance the creation of stockholder value over the long term. We have also consistently provided
stockholders with opportunities to deliver direct feedback through an extensive stockholder engagement program, covering more than 50% of shares outstanding in calendar year 2016. This program is in addition to other substantive stockholder rights
and strong corporate governance practices, which include:
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Annual election of directors
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Majority voting for directors
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Ongoing Board refreshment, including the addition of six new directors since June 2013
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A predominantly independent Board, with over 80% of our directors qualifying as independent
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Lead Independent Director with robust role
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Rigorous director selection and evaluation process
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Limit on outside directorships
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Fully independent committees
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Comprehensive risk oversight by full Board and committees
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Stock ownership policy for directors and executive officers
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Holding advisory stockholder votes on executive compensation annually
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Our Board regularly reviews developments in
corporate governance and thoughtfully evaluates which practices would serve the best interests of the Company and its stockholders. Our active stockholder engagement process informs the Boards actions. Accordingly, while we do not support this
proposal and recommend voting against it, we intend to seek stockholder input regarding this topic to obtain more perspective than a binary For or Against vote can provide.
In summary, in light of the Companys existing corporate governance practices and its commitment to engage with stockholders on this topic, and in consideration of
the potential for misuse that could arise under the particular terms for special meetings that this proposal advocates, the Board recommends that stockholders vote
AGAINST
Proposal 7.
Vote Required and
Board of Directors Recommendation
For the foregoing reasons, the Board believes that this proposal is not in the best interests of the Company or our
stockholders, and recommends that you vote
AGAINST
Proposal 7.
Approval of this proposal requires the affirmative vote of a majority of the votes cast.
The Board of Directors Recommends a Vote AGAINST Proposal 7.
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2017 Proxy Statement
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PROCEDURAL MATTERS
General
The Board is soliciting your vote with this Proxy Statement and proxy card for use at the Annual Meeting, to be held on
Tuesday, June 6, 2017 at 2:00 p.m. local time and for any adjournment or postponement of the Annual Meeting. The Annual Meeting will be held at 350 Mission Street, San Francisco, California 94105. You will need to bring proof of ownership of
Salesforce common stock
as of the record date, as well as photo identification, to enter the Annual Meeting. Our Annual Report for fiscal 2017, including our financial statements for fiscal 2017, is also enclosed or
available online at the same website as this Proxy Statement. These proxy materials are first being made available to stockholders on April 26, 2017.
Stockholders Entitled
to Vote; Record Date
As of the close of business on April 12, 2017, the record date for determination of stockholders entitled to vote at
the Annual Meeting, there were outstanding 711,338,412 shares of common stock of the Company, all of which are entitled to vote with respect to all matters to be acted upon at the Annual Meeting. Each stockholder is entitled to one vote for
each share of our common stock held by such stockholder. All valid proxies received before the Annual Meeting will be voted according to the instructions thereon.
Stockholders of record may vote at the Annual Meeting:
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over the Internet at www.proxyvote.com;
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by telephone at 1-800-690-6903;
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by mail (if you requested printed copies of the proxy materials to be mailed to you) by completing, signing and dating the enclosed proxy card and returning it in the enclosed postage-prepaid envelope; or
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by attending the Annual Meeting.
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Stockholders who hold shares in street name should refer to the voting instructions from
their brokerage firm, bank, trust or other organization provided with these proxy materials.
Quorum; Abstentions;
Broker Non-Votes
The Companys Bylaws provide that the holders of a majority of the issued and outstanding shares of the capital stock
of the Company entitled to vote at the Annual Meeting, present in person or represented by proxy, constitutes a quorum for the transaction of business. Shares that are authorized to be voted on or to abstain on any matter presented at the Annual
Meeting, or that are held by stockholders who are present at the Annual Meeting, are counted as present and entitled to vote and are therefore included for purposes of determining whether a quorum is present at the Annual Meeting.
In the election of directors, abstentions are not counted in determining whether the votes cast for a nominee exceed the votes cast against such nominees election.
For Proposal 2, under NYSE rules, abstentions are treated as votes that are cast but are not counted as being in favor of the proposal. For Proposals 3-7, abstentions are not counted in determining whether the proposal receives the affirmative vote
of a majority of the votes cast.
If you hold your Salesforce common stock through a broker, the broker may be prevented from voting shares held in your
brokerage account if you have not given the broker voting instructions with respect to your shares (resulting in what is referred to as a broker non-vote). Thus, if you hold your Salesforce common stock through a broker, it is important
that you vote your shares to ensure that they are represented on all matters presented at the Annual Meeting. If you hold your common stock through a broker and you do not instruct your broker how to vote on Proposals 1, 2, 3, 5, 6 or 7, your vote
will be considered a broker non-vote and no votes will be cast on your behalf with respect to those Proposals. Broker non-votes will not be counted as votes cast in determining the voting outcomes of Proposals 1, 2, 3, 5, 6 and 7.
Your broker will have discretion to vote your shares on Proposal 4, the ratification of the appointment of the Companys independent registered public accounting
firm, if you fail to provide voting instructions.
Voting; Revocability
of Proxies
Voting at the Annual Meeting.
You are entitled to attend and participate in the Annual Meeting only if you were a stockholder as of the close of business on April 12, 2017 or if you hold a valid proxy for the
Annual Meeting. Stockholders as of the record date, April 12, 2017, must bring the Internet Notice or other proof of ownership, as well as photo identification, for entrance to the
Annual Meeting. Those stockholders whose shares are held beneficially through a brokerage firm, bank, trust or other similar organization (that is, in street name) also may attend and
vote at the Annual Meeting by obtaining a legal proxy provided by their broker, bank or other organization and bringing that legal proxy to the Annual Meeting.
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2017 Proxy Statement
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PROCEDURAL MATTERS (CONTINUED)
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We encourage stockholders to vote well before the Annual Meeting, even if they plan to attend, by completing proxies online
or by telephone, or by mailing their proxy cards. If a stockholder attends the Annual Meeting and validly submits his or her vote, any previous votes that were submitted by the stockholder will be superseded by the vote that such stockholder validly
casts at the Annual Meeting. Attendance at the Annual Meeting in and of itself will not revoke any prior votes that a stockholder may have cast. For directions to attend the Annual Meeting, please contact Investor Relations by telephone at
(415) 536-6250.
Voting of proxies; Discretionary
voting.
Stockholders may vote over the Internet, by telephone, by mail, or by attending the meeting, as described above. All shares entitled to vote and represented by properly
executed proxy cards received prior to the Annual Meeting, and not revoked, will be voted at the Annual Meeting in accordance with the instructions indicated on those proxy cards. The telephone and Internet voting procedures are designed to
authenticate the stockholders identity, to allow stockholders to vote their shares and confirm that their voting instructions have been properly recorded. If you vote by telephone or over the Internet, you do not need to complete and mail your
proxy card. If you do not provide specific voting instructions on a properly executed proxy card or when voting over the phone or Internet, your shares will be voted as recommended by the Board.
If any other matters are properly presented for consideration at the Annual Meeting, including, among other things, consideration of a motion to adjourn the Annual
Meeting to another time or place, the persons named in the proxy card and acting thereunder will have discretion to vote on those matters in accordance with their best judgment.
Effect of not casting your vote.
If you hold
your shares in street name, it is critical that you cast your vote if you want it to count in the election of directors, the amendment of our 2013 Equity Incentive Plan, the amendment of our 2004 Employee Stock Purchase Plan, the advisory vote to
approve named executive officer compensation, the advisory vote on the
frequency of future advisory votes to approve named executive officer compensation, and the stockholder proposal requesting, on an advisory basis, action to allow stockholders to request special
meetings of stockholders (Proposals 1, 2, 3, 5, 6 and 7 in this Proxy Statement). Your bank or broker will have discretion to vote any uninstructed shares on the ratification of the appointment of the Companys independent registered public
accounting firm (Proposal 4 in this Proxy Statement).
If you are a stockholder of record, it is also critical that you cast your vote. If you do not cast your vote,
no votes will be cast on your behalf on any of the items of business at the Annual Meeting.
Revocability of
proxy.
You may revoke or change your proxy by:
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entering a new vote by telephone or over the Internet;
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filing with the Secretary of the Company, at or before the taking of the vote at the Annual Meeting, a written notice of revocation or a duly executed proxy card, in either case dated later than the prior proxy card
relating to the same shares; or
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attending and voting at the Annual Meeting (although attendance at the Annual Meeting will not in and of itself revoke a proxy).
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Any written notice of revocation or subsequent proxy card must be received by the Secretary of the Company prior to the taking of the vote at the Annual Meeting. Such
written notice of revocation or subsequent proxy card should be hand delivered to the Secretary of the Company or should be sent to the Companys principal executive offices, salesforce.com, inc., The Landmark @ One Market, Suite 300, San
Francisco, California 94105, Attention: Corporate Secretary.
If a broker, bank or other nominee holds your shares, you must contact them in order to find out how to
revoke or change your vote.
Expenses of
Solicitation
The Company will bear the entire cost of solicitation. In addition, the Company may arrange with brokerage houses and other
custodians, nominees and fiduciaries to forward solicitation materials to the beneficial owners of the stock held of record by such persons, and the Company will reimburse them for their reasonable out-of-pocket expenses. The Company may use the
services of the Companys directors, officers, employees and
others to solicit proxies, personally or by telephone, without additional compensation. The Company has retained Morrow Sodali LLC, 470 West Ave., Stamford, Connecticut, 06902, a proxy
solicitation firm, for assistance in connection with the Annual Meeting at a cost of approximately $15,000, plus reasonable out-of-pocket expenses.
Procedure for
Introducing Business or Director Nominations at our 2018 Annual Meeting of Stockholders
Stockholders of record may introduce business or nominate directors for election at an annual meeting of stockholders
provided that the stockholder satisfies the advance notice requirements set forth in the Companys Bylaws. Among other things, the advance notice provisions require stockholders to give timely notice of business they propose to introduce and of
any
director nomination they propose to make in proper written form to the Secretary of the Company at salesforce.com, inc., The Landmark @ One Market, Suite 300, San Francisco, California 94105,
Attention: Corporate Secretary. To be timely for our 2018 Annual Meeting of Stockholders, such notice must be received no earlier than February 10, 2018 and no later than March 12, 2018.
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2017 Proxy Statement
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PROCEDURAL MATTERS (CONTINUED)
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However, if the date of the 2018 Annual Meeting of Stockholders is advanced by more than 30 days prior to, or delayed by more than 60 days after, the one-year anniversary of the date of the 2017
Annual Meeting, then notice must be received no earlier than the close of business on the 120th day prior to the 2018 Annual Meeting of Stockholders and not later than the close of business on the later of the 90th day prior to such annual meeting,
or the 10th day following the day on which public announcement of the date of such annual meeting is first made. If a stockholder does not also comply with the requirements of Rule 14a-4(c)(2) under the Exchange Act, we may exercise discretionary
voting authority under proxies that we solicit to vote in accordance with our best judgment on any business presented by a stockholder at our 2018 Annual Meeting.
In
addition, our Bylaws contain proxy access provisions that permit a stockholder or group of stockholders to include director candidates that they intend to nominate in our annual meeting proxy statement and on our proxy card, provided
that the stockholder ownership, notice and other requirements set forth in our Bylaws are satisfied. To be timely for our 2018 Annual Meeting of Stockholders, the required notice under the proxy access provisions of our Bylaws must be received by
the Corporate Secretary at the address set forth above not earlier than November 27, 2017 and not later than December 27, 2017. However, if the date of the 2018 Annual Meeting of Stockholders is advanced by more than 30 days prior to, or
delayed by more than 60 days after, the one-year anniversary of the date of the 2017 Annual Meeting, then notice under the proxy access provisions must be received no earlier than the close of business on the 120th day prior to the 2018 Annual
Meeting of Stockholders and not later than the close of business on the later of the 90th day prior to such annual meeting, or the 10th day following the day on which public announcement of the date of such annual meeting is first made.
Any stockholder proposal submitted for inclusion in the Companys proxy statement for the 2018 Annual Meeting of
Stockholders pursuant to Rule 14a-8 of the Exchange Act should be addressed to the Secretary of the Company at the address set forth above and must be received at our principal executive offices not later than December 27, 2017. In the event
the date of the annual meeting is moved by more than 30 days from the one-year anniversary of the date of the 2017 Annual Meeting, then notice must be received within a reasonable time before the Company begins to make its proxy materials available.
Upon such an occurrence, the Company will publicly announce the deadline for submitting a proposal by means of disclosure in a press release or in a document filed with the SEC.
The requirements for providing advance notice of business or nominations as summarized above are qualified in their entirety by our Bylaws and, in the case of stockholder
proposals submitted for inclusion in our proxy statement, Rule 14a-8, which we recommend that you read in order to comply with the applicable requirements. Failure to timely deliver notice in accordance with our Bylaws or Rule 14a-8, or to satisfy
the other requirements of our Bylaws and Rule 14a-8, may result in a proposal or nomination not being presented at our annual meeting of stockholders. You may contact the Companys Secretary at our principal executive offices for a copy of our
current Bylaws, including the relevant provisions regarding the requirements for making stockholder proposals and nominating director candidates, or you may refer to the copy of our bylaws most recently filed with the SEC and available at
www.sec.gov
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Delivery of Proxy
Materials
To receive current and future proxy materials in either paper or electronic form, please contact Investor Relations at
(415) 536-6250 or investor@salesforce.com.
The SEC has adopted rules that permit companies and intermediaries such as brokers to satisfy delivery requirements
for proxy statements with respect to two or more stockholders sharing the same address by delivering a single proxy statement addressed to those stockholders, unless the Company has received contrary instructions from one or more of the
stockholders. This process, which is commonly referred to as householding, potentially provides extra convenience for
stockholders and cost savings for companies. The Company and some brokers household proxy materials, delivering a single set of materials per household, even if more than one stockholder resides
in that household. If your proxy statement is being householded and you would like to receive separate copies, or if you are receiving multiple copies and would like to receive a single copy, please contact Investor Relations at (415) 536-6250
or investor@salesforce.com, or write to salesforce.com, inc., The Landmark @ One Market, Suite 300, San Francisco, California 94105, Attention: Investor Relations.
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2017 Proxy Statement
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TRANSACTION OF OTHER BUSINESS
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TRANSACTION OF OTHER BUSINESS
The Board of Directors knows of no other matters that will be presented for consideration at the Annual Meeting. If any other matters are properly brought before the
Annual Meeting, it is the intention of the persons named in the accompanying proxy to vote on such matters in accordance with their best judgment.
By Order of the Board of Directors
Amy E. Weaver
President, Legal, General Counsel and Secretary
April 26, 2017
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2017 Proxy Statement
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SALESFORCE.COM, INC.
AMENDED AND RESTATED 2013 EQUITY INCENTIVE PLAN
1.
Purposes of the Plan
. The purposes of this Plan are:
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to attract and retain the best available personnel for positions of substantial responsibility,
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to provide incentive to Employees, Directors and Consultants, and
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to promote the success of the Companys business.
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The Plan permits the grant of Incentive Stock
Options, Nonstatutory Stock Options, Restricted Stock, Restricted Stock Units, Stock Appreciation Rights, Performance Bonus Awards, Performance Units and Performance Shares.
2.
Definitions
. As used herein, the following definitions will apply:
(a)
Administrator
means the Board or any of its Committees as will be administering the
Plan, in accordance with Section 4 of the Plan.
(b)
Affiliate
means any
corporation or any other entity (including, but not limited to, partnerships and joint ventures) controlling, controlled by, or under common control with the Company.
(c)
Applicable Laws
means the requirements relating to the administration of
equity-based awards under U.S. state corporate laws, U.S. federal and state securities laws, the Code, any stock exchange or quotation system on which the Common Stock is listed or quoted and the applicable laws of any foreign country or
jurisdiction where Awards are, or will be, granted under the Plan.
(d)
Award
means, individually or collectively, a grant under the Plan of Options, Stock Appreciation Rights, Restricted Stock, Restricted Stock Units, Performance Bonus Awards, Performance Units or Performance Shares.
(e)
Award Agreement
means the written or electronic agreement setting forth the terms
and provisions applicable to each Award granted under the Plan. The Award Agreement is subject to the terms and conditions of the Plan.
(f)
Award Transfer Program
means any program instituted by the Administrator that would
permit Participants the opportunity to transfer for value any outstanding Awards to a financial institution or other person or entity approved by the Administrator. A transfer for value shall not be deemed to occur under this Plan where
an Award is transferred by a Participant for bona fide estate planning purposes to a trust or other testamentary vehicle approved by the Administrator.
(g)
Board
means the Board of Directors of the Company.
(h)
Cause
means, unless otherwise defined by the Participants Award Agreement or
contract of employment or service, any of the following: (i) the Participants theft, dishonesty, or falsification of any Participating Company documents or records; (ii) the Participants improper use or disclosure of a
Participating Companys confidential or proprietary information; (iii) any action by the Participant which has a detrimental effect on a Participating Companys reputation or business; (iv) the Participants failure or
inability to perform any reasonable assigned duties after written notice from a Participating Company of, and a reasonable opportunity to cure, such failure or inability; (v) any material breach by the Participant of any employment or service
agreement between the Participant and a Participating Company, which breach is not cured pursuant to the terms of such agreement; or (vi) the Participants conviction (including any plea of guilty or nolo contendere) of any criminal act
which impairs the Participants ability to perform his or her duties with a Participating Company.
(i)
Change in Control
means the occurrence of any of the following events:
(i) A change in the ownership of the Company which occurs on the date that any one person, or more than
one person acting as a group (
Person
), acquires ownership of the stock of the Company that, together with the stock held by such Person, constitutes more than fifty percent (50%) of the total voting power of the stock of the
Company; provided, however, that for purposes of this clause (i), (1) the acquisition of beneficial ownership of additional stock by any one Person who is considered to beneficially own more than fifty percent (50%) of the total voting
power of the stock of the Company will not be considered a Change in Control; and (2) if the stockholders of the Company immediately before such change in ownership continue to retain immediately after the change in ownership, in substantially
the same proportions as their ownership of shares of the Companys voting stock immediately prior to the change in ownership, direct or indirect beneficial ownership of fifty percent (50%) or more of the total voting power of the stock of
the Company, such event shall not be considered a Change in Control under this clause (i). For this purpose, indirect beneficial ownership shall include, without limitation, an interest resulting from ownership of the voting securities of one
or more corporations or other business entities which own the Company, as the case may be, either directly or through one or more subsidiary corporations or other business entities; or
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2017 Proxy Statement
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A-1
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(ii) A change in the effective control of the Company which
occurs on the date that a majority of members of the Board is replaced during any twelve (12) month period by Directors whose appointment or election is not endorsed by a majority of the members of the Board prior to the date of the appointment
or election. For purposes of this subsection (ii), if any Person is considered to be in effective control of the Company, the acquisition of additional control of the Company by the same Person will not be considered a Change in Control; or
(iii) A change in the ownership of a substantial portion of the Companys assets which occurs
on the date that any Person acquires (or has acquired during the twelve (12) month period ending on the date of the most recent acquisition by such person or persons) assets from the Company that have a total gross fair market value equal to or
more than fifty percent (50%) of the total gross fair market value of all of the assets of the Company immediately prior to such acquisition or acquisitions; provided, however, that for purposes of this subsection (iii), the following will
not constitute a change in the ownership of a substantial portion of the Companys assets: (A) a transfer to an entity that is controlled by the Companys stockholders immediately after the transfer, or (B) a transfer of assets
by the Company to: (1) a stockholder of the Company (immediately before the asset transfer) in exchange for or with respect to the Companys stock, (2) an entity, fifty percent (50%) or more of the total value or voting power of
which is owned, directly or indirectly, by the Company, (3) a Person, that owns, directly or indirectly, fifty percent (50%) or more of the total value or voting power of all the outstanding stock of the Company, or (4) an entity, at
least fifty percent (50%) of the total value or voting power of which is owned, directly or indirectly, by a Person described in this subsection (iii)(B)(3). For purposes of this subsection (iii), gross fair market value means the value of
the assets of the Company, or the value of the assets being disposed of, determined without regard to any liabilities associated with such assets.
For purposes of this definition, Persons will be considered to be acting as a group if they are owners of a corporation that enters into a merger,
consolidation, purchase or acquisition of stock, or similar business transaction with the Company.
Notwithstanding the foregoing, a transaction will
not be deemed a Change in Control unless the transaction qualifies as a change in control event within the meaning of Section 409A.
Further and
for the avoidance of doubt, a transaction will not constitute a Change in Control if: (i) its sole purpose is to change the jurisdiction of the Companys incorporation, or (ii) its sole purpose is to create a holding company that will
be owned in substantially the same proportions by the persons who held the Companys securities immediately before such transaction.
(j)
Code
means the Internal Revenue Code of 1986, as amended. Reference to a specific
section of the Code or regulation thereunder shall include such section or regulation, any valid regulation promulgated under such section, and any comparable provision of any future legislation or regulation amending, supplementing or superseding
such section or regulation.
(k)
Committee
means a committee of Directors or of
other individuals satisfying Applicable Laws appointed by the Board, or a duly authorized committee of the Board, in accordance with Section 4 hereof.
(l)
Common Stock
means the common stock of the Company.
(m)
Company
means salesforce.com, inc., a Delaware corporation, or any successor
thereto.
(n)
Consultant
means any natural person, including an advisor, engaged by
the Company or a Parent or Subsidiary or other Affiliate to render services to such entity.
(o)
Determination Date
means the latest possible date that will not jeopardize the
qualification of an Award granted under the Plan as performance-based compensation under Section 162(m) of the Code.
(p)
Director
means a member of the Board.
(q)
Disability
means total and permanent disability as defined in Section 22(e)(3)
of the Code, provided that in the case of Awards other than Incentive Stock Options, the Administrator in its discretion may determine whether a permanent and total disability exists in accordance with uniform and
non-discriminatory
standards adopted by the Administrator from time to time.
(r)
Dividend Equivalent
means a credit, made at the discretion of the
Administrator or as otherwise provided by the Plan, to the account of a Participant in an amount equal to the cash dividends paid on one Share for each Share represented by an Award held by such Participant.
(s)
Employee
means any person, including Officers and Directors, employed by the
Company or any Parent or Subsidiary or other Affiliate of the Company. Neither service as a Director nor payment of a directors fee by the Company will be sufficient to constitute employment by the Company or an Affiliate. The
Company shall determine in good faith and in the exercise of its discretion whether an individual has become or has ceased to be an Employee and the effective date of such individuals employment or
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termination of employment, as the case may be. For purposes of an individuals rights, if any, under the Plan as of the time of the Companys determination, all such determinations by
the Company shall be final, binding and conclusive, notwithstanding that the Company or any court of law or governmental agency subsequently makes a contrary determination.
(t)
Exchange Act
means the Securities Exchange Act of 1934, as amended.
(u)
Exchange Program
means a program under which (i) outstanding awards are
surrendered or cancelled in exchange for awards of the same type (which may have higher or lower exercise prices and different terms), awards of a different type, and/or cash, (ii) Participants would have the opportunity to participate in an
Award Transfer Program, and/or (iii) the exercise price of an outstanding Award is reduced. The Administrator will determine the terms and conditions of any Exchange Program in its sole discretion.
(v)
Fair Market Value
means, as of any date, the value of Common Stock determined as
follows:
(i) If the Common Stock is listed on any established stock exchange or a national market
system, including without limitation the New York Stock Exchange, NASDAQ Global Select Market, the NASDAQ Global Market or the NASDAQ Capital Market of The NASDAQ Stock Market, its Fair Market Value will be the closing sales price for such stock (or
the mean of the closing bid and asked prices for the Common Stock, if no sales were reported) as quoted on such exchange or system on the day of determination, as reported in The Wall Street Journal or such other source as the Administrator deems
reliable. If the relevant date does not fall on a day on which the Common Stock has traded on such securities exchange or market system, the date on which the Fair Market Value shall be established shall be the last day on which the Common Stock was
so traded prior to the relevant date, or such other appropriate day as shall be determined by the Administrator, in its discretion;
(ii) If the Common Stock is regularly quoted by a recognized securities dealer but selling prices are not
reported, the Fair Market Value of a Share will be the mean between the high bid and low asked prices for the Common Stock on the day of determination (or, if no bids and asks were reported on that date, as applicable, on the last trading date such
bids and asks were reported), as reported in The Wall Street Journal or such other source as the Administrator deems reliable; or
(iii) In the absence of an established market for the Common Stock, the Fair Market Value will be
determined in good faith by the Administrator.
(w)
Fiscal Year
means the fiscal
year of the Company.
(x)
Fiscal Quarter
means a fiscal quarter within a Fiscal
Year of the Company.
(y)
Incentive Stock Option
means an Option that by its terms
qualifies and is otherwise intended to qualify as an incentive stock option within the meaning of Section 422 of the Code and the regulations promulgated thereunder.
(z)
Inside Director
means a Director who is an Employee.
(aa)
Nonstatutory Stock Option
means an Option that by its terms does not qualify or is
not intended to qualify as an Incentive Stock Option.
(bb)
Officer
means a person
who is an officer of the Company within the meaning of Section 16 of the Exchange Act and the rules and regulations promulgated thereunder.
(cc)
Option
means a stock option granted pursuant to the Plan.
(dd)
Outside Director
means a Director who is not an Employee.
(ee)
Parent
means a parent corporation, whether now or hereafter existing,
as defined in Section 424(e) of the Code.
(ff)
Participant
means the holder
of an outstanding Award.
(gg)
Participating Company
means the Company or any
Affiliate.
(hh)
Performance-Based Award
means any Award that are subject to the
terms and conditions set forth in Section 13. All Performance-Based Awards are intended to qualify as qualified performance-based compensation under Section 162(m) of the Code.
(ii)
Performance Bonus Award
means a cash award set forth in Section 12.
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(jj)
Performance Goals
means the
goal(s) (or combined goal(s)) determined by the Administrator (in its discretion) to be applicable to a Participant with respect to an Award. As determined by the Administrator, the Performance Goals applicable to an Award may provide for a targeted
level or levels of achievement using one or more of the following measures:
(i) revenue;
(ii) gross margin;
(iii) operating margin;
(iv) operating income;
(v) operating profit or net operating profit;
(vi) pre-tax
profit;
(vii) earnings (which may include earnings before interest, taxes and depreciation, earnings before taxes
and net earnings);
(viii) net income;
(ix) cash flow (including operating cash flow or free cash flow);
(x) expenses;
(xi) the market price of the Common Stock;
(xii) earnings per share;
(xiii) return on stockholder equity;
(xiv) return on capital;
(xv) return on assets or net assets;
(xvi) return on equity;
(xvii) return on investment;
(xviii) economic value added;
(xix) number of customers;
(xx) stock price;
(xxi) growth in stockholder value relative to the moving average on the S&P 500 Index or another
index;
(xxii) market share;
(xxiii) contract awards or backlog;
(xxiv) overhead or other expense reduction;
(xxv) credit rating;
(xxvi) objective customer indicators;
(xxvii) new product invention or innovation;
(xxviii) attainment of research and development milestones; and
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(xxix) improvements in productivity.
The Performance Goals may differ from Participant to Participant and from Award to Award. Any criteria used may be measured, as applicable, (i) in
absolute terms, (ii) in combination with another Performance Goal or Goals (for example, but not by way of limitation, as a ratio or matrix), (iii) in relative terms (including, but not limited to, results for other periods, passage of
time and/or against another company or companies or an index or indices), (iv) on a
per-share
or
per-capita
basis, (v) against the performance of the Company
as a whole or a segment of the Company (including, but not limited to, any combination of the Company and any subsidiary, division, joint venture, Affiliate and/or other segment) and/or (vi) on a
pre-tax
or
after-tax
basis. Prior to the Determination Date, the Administrator shall determine whether any significant element(s) or item(s) shall be included in or excluded from the calculation of any Performance
Goal with respect to any Participants (for example, but not by way of limitation, the effect of mergers and acquisitions). As determined in the discretion of the Administrator prior to the Determination Date, achievement of Performance Goals for a
particular Award may be calculated in accordance with the Companys financial statements, prepared in accordance with generally accepted accounting principles (
GAAP
), or on a basis other than GAAP, including as adjusted for
certain costs, expenses, gains and losses to provide
non-GAAP
measures of operating results.
(kk)
Performance Period
means the time period determined by the Administrator in its sole
discretion during which the performance objectives must be met.
(ll)
Performance
Share
means an Award denominated in Shares which may be earned in whole or in part upon attainment of performance goals or other vesting criteria as the Administrator may determine pursuant to Section 11.
(mm)
Performance Unit
means an Award which may be earned in whole or in part upon
attainment of performance goals or other vesting criteria as the Administrator may determine and which may be settled for cash, Shares or other securities or a combination of the foregoing pursuant to Section 11.
(nn)
Plan
means this 2013 Equity Incentive Plan.
(oo)
Restricted Stock
means Shares issued pursuant to a Restricted Stock award under
Section 8 of the Plan, or issued pursuant to the early exercise of an Option.
(pp)
Restricted Stock Unit
means a bookkeeping entry representing an amount equal to
the Fair Market Value of one Share, granted pursuant to Section 9. Each Restricted Stock Unit represents an unfunded and unsecured obligation of the Company.
(qq)
Rule
16b-3
means
Rule 16b-3
of the Exchange Act or any successor to
Rule 16b-3,
as in effect when discretion is being exercised with respect to the Plan.
(rr)
Section
16(b)
means Section 16(b) of the Exchange Act.
(ss)
Section
409A
means Section 409A of the Code, and any
proposed, temporary or final Treasury Regulations and Internal Revenue Service guidance thereunder, as each may be amended from time to time.
(tt)
Securities Act
means the Securities Act of 1933, as amended.
(uu)
Service Provider
means an Employee, Director or Consultant. The Company shall
determine in good faith and in the exercise of its discretion whether an individual has become or has ceased to be a Service Provider and the effective date of such individuals status as, or cessation of status as, a Service Provider. For
purposes of an individuals rights, if any, under the Plan as of the time of the Companys determination, all such determinations by the Company shall be final, binding and conclusive, notwithstanding that the Company or any court of law
or governmental agency subsequently makes a contrary determination.
(vv)
Share
means a share of the Common Stock, as adjusted in accordance with Section 16 of the Plan.
(ww)
Stock Appreciation Right
or
SAR
means an Award, granted alone
or in connection with an Option, that pursuant to Section 10 is designated as a Stock Appreciation Right.
(xx)
Subsidiary
means a subsidiary corporation, whether now or hereafter
existing, as defined in Section 424(f) of the Code.
(yy)
Tax Obligations
means tax and social insurance liability obligations and requirements in connection with the Awards, including, without limitation, (a) all federal, state, and local taxes (including the Participants Federal Insurance Contributions Act
(FICA) obligation) that are required to be withheld by the Company or the employing Affiliate, (b) the Participants and, to the extent required by the Company (or Affiliate), the Companys (or Affiliates) fringe benefit tax
liability, if any, associated with the grant, vesting, or exercise of
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an Award or sale of Shares, and (c) any other Company (or Affiliate) taxes the responsibility for which the Participant has, or has agreed to bear, with respect to such Award (or exercise
thereof or issuance of Shares thereunder).
3.
Stock Subject to the Plan
.
(a)
Stock Subject to the Plan
. Subject to the provisions of Section 16 of the Plan, the
maximum aggregate number of Shares that may be issued under the Plan is 122,000,000, plus (i) any Shares that, as of the date stockholders initially approve the Plan, have been reserved but not issued pursuant to any awards granted under the
2004 Equity Incentive Plan (the
2004
Plan
) and/or the 2004 Outside Directors Stock Plan (the
Director Plan
and, together with the 2004 Plan, the
Prior Plans
and each, a
Prior
Plan
) and are not subject to any awards granted thereunder, with the Shares subject to the awards referenced in this clause (i) credited to the aggregate number of Shares that may be awarded under the Plan as one (1) Share for
every one (1) Share subject thereto, and (ii) any Shares subject to stock options or other awards granted under the Prior Plans that, after the date stockholders initially approve the Plan, expire or otherwise terminate without having been
vested or exercised in full, Shares issued pursuant to awards granted under the Prior Plans that, after the date stockholders initially approve the Plan, are forfeited to or repurchased by the Company due to failure to vest, and Shares subject to
awards granted under a Prior Plan that, after the date stockholders initially approve the Plan, would have, but for the termination of the applicable Prior Plan, again become available for future use under the terms of such Prior Plan (as
applicable), with the Shares subject to those of the awards referenced in this clause (ii) that are stock options and/or stock appreciation rights credited to the aggregate number of Shares that may be awarded under the Plan as one
(1) Share for every one (1) Share subject thereto, and the Shares subject to those of the awards referenced in this clause (ii) that are awards other than stock options or stock appreciation rights credited to the aggregate number of
Shares that may be awarded under the Plan as two and
fifteen-one
hundredths (2.15) Shares for every one (1) Share subject thereto. Notwithstanding the foregoing, the maximum number of Shares to be
added to the Plan pursuant to clause (i) of the prior sentence shall be equal to 23,800,000 Shares and the maximum number of Shares to be added to the Plan pursuant to clause (ii) of the prior sentence shall be equal to 54,332,000 Shares.
The Shares may be authorized, but unissued, or reacquired Common Stock. Any Shares subject to Awards of Options or Stock Appreciation Rights shall be counted against the numerical limits of this Section 3 as one (1) Share for every one
(1) Share subject thereto. Any Shares subject to Awards granted under the Plan other than Options or Stock Appreciation Rights shall be counted against the numerical limits of this Section 3 as two and
fifteen-one
hundredths (2.15) Shares for every one (1) Share subject thereto and shall be counted as two and
fifteen-one
hundredths (2.15) Shares for
every one (1) Share returned to or deemed not issued from the Plan pursuant to this Section 3. The Shares may be authorized, but unissued, or reacquired Common Stock.
(b)
Lapsed Awards
. If an Award expires or becomes unexercisable without having been exercised in
full, is surrendered pursuant to an Exchange Program, or, with respect to Restricted Stock, Restricted Stock Units, Performance Units or Performance Shares, is forfeited to or repurchased by the Company due to failure to vest, the unpurchased Shares
(or for Awards other than Options or Stock Appreciation Rights the forfeited or repurchased Shares), which were subject thereto will become available for future grant or sale under the Plan (unless the Plan has terminated). Upon exercise of a Stock
Appreciation Right settled in Shares, the gross number of Shares covered by the portion of the Award so exercised, whether or not actually issued pursuant to such exercise will cease to be available under the Plan. Shares that have actually been
issued under the Plan under any Award will not be returned to the Plan and will not become available for future distribution under the Plan; provided, however, that if Shares issued pursuant to Awards of Restricted Stock, Restricted Stock Units,
Performance Shares or Performance Units are repurchased by the Company or are forfeited to the Company due to failure to vest, such Shares will become available for future grant under the Plan. Notwithstanding the foregoing, Shares used to pay the
exercise price or purchase of an Award other than an Option or SAR or to satisfy the tax withholding obligations related to an Award other than an Option or SAR will become available for future grant and/or sale under the Plan; Shares used to pay
the exercise price or purchase of an Option or SAR or to satisfy the tax withholding obligations related to an Option or SAR will not become available for future grant or sale under the Plan. To the extent an Award under the Plan is paid out in cash
rather than Shares, whether pursuant to a Performance Bonus Award or other Award, such cash payment will not result in reducing the number of Shares available for issuance under the Plan. Notwithstanding anything in the Plan or any Award Agreement
to the contrary, Shares actually issued pursuant to Awards transferred under any Award Transfer Program will not be again available for grant under the Plan. Notwithstanding the foregoing and, subject to adjustment as provided in Section 16,
the maximum number of Shares that may be issued upon the exercise of Incentive Stock Options will equal the aggregate Share number stated in Section 3(a), plus, to the extent allowable under Section 422 of the Code and the Treasury
Regulations promulgated thereunder, any Shares that become available for issuance under the Plan pursuant to this Section 3(b).
(c)
Share Reserve
. The Company, during the term of this Plan, will at all times reserve and keep
available such number of Shares as will be sufficient to satisfy the requirements of the Plan.
4.
Administration
of the Plan
.
(a)
Procedure
.
(i)
Multiple Administrative Bodies
. Different Committees with respect to different groups of
Service Providers may administer the Plan.
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(ii)
Section
162(m)
. To the extent
that the Administrator determines it to be desirable to qualify Awards granted hereunder as performance-based compensation within the meaning of Section 162(m) of the Code, the Plan will be administered by a Committee of two
(2) or more outside directors within the meaning of Section 162(m) of the Code.
(iii)
Rule
16b-3
. To the extent
desirable to qualify transactions hereunder as exempt under
Rule 16b-3,
the transactions contemplated hereunder will be structured to satisfy the requirements for exemption under
Rule 16b-3.
(iv)
Other Administration
. Other than as
provided above, the Plan will be administered by (A) the Board or (B) a Committee, which committee will be constituted to satisfy Applicable Laws. The Administrator may, in its discretion and to the extent permitted by Applicable Laws,
delegate to a Committee, including but not limited to, comprised of one or more Officers, the authority to grant one or more Awards, without further approval of the Administrator, on such terms and conditions as the Administrator, in its discretion,
deems appropriate. To the extent of any delegation by the Administrator, references to the Administrator in the Plan and any Award Agreement shall be deemed also to include reference to the applicable delegate(s).
(v)
Delegation of Authority for
Day-to-Day
Administration; Authority of Officers
. Except to the extent prohibited by Applicable Law, the Administrator may delegate to one or more individuals the
day-to-day
administration of the Plan and any of the functions assigned to it in this Plan. Such delegation may be revoked at any time. Any Officer shall have the authority to
act on behalf of the Company with respect to any matter, right, obligation, determination or election which is the responsibility of or which is allocated to the Company herein, provided the Officer has apparent authority with respect to such
matter, right, obligation, determination or election.
(b)
Powers of the Administrator
. Subject
to the provisions of the Plan, and in the case of a Committee, subject to the specific duties delegated by the Board to such Committee, the Administrator will have the authority, in its discretion:
(i) to determine the Fair Market Value;
(ii) to select the Service Providers to whom Awards may be granted hereunder;
(iii) to determine the number of Shares to be covered by each Award granted hereunder;
(iv) to approve forms of Award Agreements for use under the Plan;
(v) to determine the terms and conditions, not inconsistent with the terms of the Plan, of any Award
granted hereunder. Such terms and conditions include, but are not limited to, the exercise price, the method of payment for Shares purchased under any Award, the method for satisfaction of any tax withholding obligation arising in connection with an
Award, the time or times when Awards may be exercised (which may be based on performance criteria), subject to any minimum vesting requirements set forth in the Plan, any vesting acceleration or waiver of forfeiture restrictions, and any restriction
or limitation regarding any Award or the Shares relating thereto, based in each case on such factors as the Administrator will determine;
(vi) to determine the terms and conditions of any Exchange Program and/or Award Transfer Program and with
the consent of the Companys stockholders, to institute an Exchange Program and/or Award Transfer Program (provided that the Administrator may not institute an Exchange Program and/or Award Transfer Program without first receiving the consent
of the Companys stockholders);
(vii) to construe and interpret the terms of the Plan and
Awards granted pursuant to the Plan;
(viii) to prescribe, amend and rescind rules and regulations
relating to the Plan, including rules and regulations relating to
sub-plans
established for the purpose of satisfying applicable foreign laws and/or for qualifying for favorable tax treatment under applicable
foreign laws;
(ix) to modify or amend each Award (subject to Section 22 of the Plan), including
but not limited to the discretionary authority to extend the post-termination exercisability period of Awards and to extend the maximum term of an Option (subject to Section 7(b) of the Plan regarding Incentive Stock Options);
(x) to allow Participants to satisfy withholding tax obligations in such manner as prescribed in
Section 18 of the Plan;
(xi) to authorize any person to execute on behalf of the Company any
instrument required to effect the grant of an Award previously granted by the Administrator pursuant to such procedures as the Administrator may determine;
(xii) to allow a Participant, in compliance with all Applicable Laws including, but not limited to,
Section 409A, to defer the receipt of the payment of cash or the delivery of Shares that would otherwise be due to such Participant under an Award; and
(xiii) to determine whether Awards will be settled in Shares, cash or in any combination thereof;
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(xiv) to impose such restrictions, conditions or limitations
as it determines appropriate as to the timing and manner of any resales by a Participant or other subsequent transfers by the Participant of any Shares issued as a result of or under an Award, including without limitation, (A) restrictions
under an insider trading policy, and (B) restrictions as to the use of a specified brokerage firm for such resales or other transfers;
(xv) to require that the Participants rights, payments and benefits with respect to an Award
(including amounts received upon the settlement or exercise of an Award) shall be subject to reduction, cancellation, forfeiture or recoupment upon the occurrence of certain specified events, in addition to any otherwise applicable vesting or
performance conditions of an Award, as may be specified in an Award Agreement at the time of the Award, or later if (A) Applicable Laws require the Company to adopt a policy requiring such reduction, cancellation, forfeiture or recoupment, or
(B) pursuant to an amendment of an outstanding Award; and
(xvi) to correct any defect, supply
any omission or reconcile any inconsistency in the Plan or any Award Agreement and to make all other determinations and take such other actions with respect to the Plan or any Award deemed necessary or advisable for administering the Plan.
(c)
Effect of Administrators Decision
. The Administrators decisions, determinations and
interpretations will be final and binding on all Participants and any other holders of Awards and shall be given the maximum deference permitted by law.
5.
Eligibility
. Nonstatutory Stock Options, Stock Appreciation Rights, Restricted Stock, Restricted Stock Units,
Performance Shares and Performance Units may be granted to Service Providers. Performance Bonus Awards may be granted only to Employees. Incentive Stock Options may be granted only to Employees of the Company or Parent or Subsidiary of the Company.
6.
Limitations
.
(a)
Incentive Stock Options
. Each Option will be designated in the Award Agreement as either an
Incentive Stock Option or a Nonstatutory Stock Option. However, notwithstanding such designation, to the extent that the aggregate Fair Market Value of the Shares with respect to which Incentive Stock Options are exercisable for the first time by
the Participant during any calendar year (under all plans of the Company and any Parent or Subsidiary) exceeds one hundred thousand dollars ($100,000), such Options will be treated as Nonstatutory Stock Options. If the Code is amended to provide for
a different limitation from that set forth in this Section, such different limitation shall be deemed incorporated herein effective as of the date and with respect to such Options as required or permitted by such amendment to the Code. Further, if
for any reason an Option (or portion thereof) designated as an Incentive Stock Option shall not qualify as an Incentive Stock Option, then, to the extent of such nonqualification, such Option (or portion thereof) shall be regarded as a Nonstatutory
Stock Option granted under the Plan. For purposes of this Section 6(a), Incentive Stock Options will be taken into account in the order in which they were granted. The Fair Market Value of the Shares will be determined as of the time the Option
with respect to such Shares is granted.
(b)
Section
162(m) Limitations
. The
following limitations shall apply to Awards under the Plan: subject to adjustment as provided in Section 16, during any Fiscal Year, no Employee will be granted:
(i) Options and/or SARs covering more than a total of 20,000,000 Shares; provided, however, that in
connection with his or her initial employment, an Employee may be granted Options and/or SARs covering up to a total of 8,000,000 additional Shares in the Fiscal Year in which his or her service as an Employee first commences;
(ii) Restricted Stock and/or Restricted Stock Units and/or Performance Shares covering more than
10,000,000 Shares; provided, however, that in connection with his or her initial employment, an Employee may be granted Restricted Stock, Restricted Stock Units and/or Performance Shares covering up to a total of 4,000,000 additional Shares in the
Fiscal Year in which his or her service as an Employee first commences;
(iii) Performance Units
having an initial value greater than $15,000,000; provided, however, that in connection with his or her initial employment, an Employee may be granted additional Performance Units in the Fiscal Year in which his or her service as an Employee first
commences having an initial value no greater than $5,000,000; and
(iv) Performance Bonus Awards that
could result in such Employee receiving more than $10,000,000 in any one Fiscal Year.
(v) If an
Award is cancelled in the same Fiscal Year in which it was granted (other than in connection with a transaction described in Section 16(c)), the cancelled Award will be counted against the limits set forth in this subsection (b).
(c)
Outside Director Award Limitations
. Subject to adjustment as provided in Section 16, no
Outside Director may be granted, in any Fiscal Year, Awards covering more than 60,000 Shares. Any Awards granted to an individual while he or she was an Employee, or while he or she was a Consultant but not an Outside Director, shall not count for
purposes of this limitation.
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(d)
Minimum Vesting
. Notwithstanding anything in the
Plan to the contrary, equity-based Awards granted under the Plan may not become exercisable, vest or be settled, in whole or in part, prior to the
one-year
anniversary of the date of grant, except that the
Administrator may provide that Awards become exercisable, vest or settle prior to such date in the event of the Participants death or Disability or in the event of a transaction described in Section 15(c). Notwithstanding the foregoing, up to
5% of the sum of (a) the number of Shares available for future grants on the date the Board approved this amended and restated version of the Plan, plus (b) the increase in the number of Shares available for grant under the Plan (as
described in Section 3(a)) approved by the Companys stockholders at the 2017 annual meeting, may be issued pursuant to Awards subject to any, or no, vesting conditions, as the Administrator determines appropriate.
7.
Stock Options
.
(a)
Grant of Option
. Subject to the terms and conditions of the Plan, Option may be granted to
Service Providers at any time and from time to time as will be determined by the Administrator, in its sole discretion. Subject to Section 6 and the other terms and conditions of the Plan, the Administrator will have complete discretion to
determine the number of Shares granted to any Service Provider. Each Option shall be evidenced by an Award Agreement (which may be in electronic form) that shall specify the exercise price, the expiration date of the Option, the number of Shares
covered by the Option, any conditions to exercise the Option, and such other terms and conditions as the Administrator, in its discretion, shall determine.
(b)
Term of Option
. The term of each Option will be stated in the Award Agreement; provided,
however, that the term will be no more than seven (7) years from the date of grant hereof. In the case of an Incentive Stock Option, the term will be seven (7) years from the date of grant or such shorter term as may be provided in the
Award Agreement. Moreover, in the case of an Incentive Stock Option granted to a Participant who, at the time the Incentive Stock Option is granted, owns stock representing more than ten percent (10%) of the total combined voting power of all
classes of stock of the Company or any Parent or Subsidiary, the term of the Incentive Stock Option will be five (5) years from the date of grant or such shorter term as may be provided in the Award Agreement.
(c)
Option Exercise Price and Consideration
.
(i)
Exercise Price
. The per share exercise price for the Shares to be issued pursuant to exercise
of an Option will be determined by the Administrator, subject to the following:
(1) In the case of
an Incentive Stock Option
(A) granted to an Employee who, at the time the Incentive Stock Option is
granted, owns stock representing more than ten percent (10%) of the voting power of all classes of stock of the Company or any Parent or Subsidiary, the per Share exercise price will be no less than one hundred ten percent (110%) of the
Fair Market Value per Share on the date of grant.
(B) granted to any Employee other than an Employee
described in paragraph (A) immediately above, the per Share exercise price will be no less than one hundred percent (100%) of the Fair Market Value per Share on the date of grant.
(2) In the case of a Nonstatutory Stock Option, the per Share exercise price will be no less than one
hundred percent (100%) of the Fair Market Value per Share on the date of grant.
(3) Notwithstanding the foregoing, Options may be granted with a per Share exercise price of less than
one hundred percent (100%) of the Fair Market Value per Share on the date of grant pursuant to a transaction described in, and in a manner consistent with, Section 424(a) of the Code.
(ii)
Waiting Period and Exercise Dates
. Subject to Section 6 and the other terms and
conditions of the Plan, at the time an Option is granted, the Administrator will fix the period within which the Option may be exercised and will determine any conditions that must be satisfied before the Option may be exercised.
(iii)
Form of Consideration
. The Administrator will determine the acceptable form of consideration
for exercising an Option, including the method of payment. In the case of an Incentive Stock Option, the Administrator will determine the acceptable form of consideration at the time of grant. Such consideration may consist entirely of, without
limitation: (1) cash; (2) check; (3) promissory note, to the extent permitted by Applicable Laws, (4) other Shares, provided that such Shares have a Fair Market Value on the date of surrender equal to the aggregate exercise price
of the Shares as to which such Option will be exercised and provided that accepting such Shares will not result in any adverse accounting consequences to the Company, as the Administrator determines in its sole discretion; (5) consideration
received by the Company under a cashless exercise program (whether through a broker, net exercise program or otherwise) implemented by the Company in connection with the Plan; (6) by reduction in the amount of any Company liability to the
Participant, (7) by net exercise; (8) such other consideration and method of payment for the issuance of Shares to the extent permitted by Applicable Laws; or (9) any combination of the foregoing methods of payment.
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(d)
Exercise of Option
.
(i)
Procedure for Exercise; Rights as a Stockholder
. Any Option granted hereunder will be
exercisable according to the terms of the Plan and at such times and under such conditions as determined by the Administrator and set forth in the Award Agreement. An Option may not be exercised for a fraction of a Share.
An Option will be deemed exercised when the Company receives: (i) a notice of exercise (in such form as the Administrator may specify from time to
time) from the person entitled to exercise the Option, and (ii) full payment for the Shares with respect to which the Option is exercised (together with applicable withholding taxes). Full payment may consist of any consideration and method of
payment authorized by the Administrator and permitted by the Award Agreement and the Plan. Shares issued upon exercise of an Option will be issued in the name of the Participant or, if requested by the Participant, in the name of the Participant and
his or her spouse. Until the Shares are issued (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company), no right to vote or receive dividends, Dividend Equivalents or any other rights
as a stockholder will exist with respect to the Shares subject to an Option, notwithstanding the exercise of the Option. The Company will issue (or cause to be issued) such Shares promptly after the Option is exercised. No adjustment will be made
for a dividend, Dividend Equivalent or other right for which the record date is prior to the date the Shares are issued, except as provided in Section 16 of the Plan.
Exercising an Option in any manner will decrease the number of Shares thereafter available, both for purposes of the Plan and for sale under the Option,
by the number of Shares as to which the Option is exercised.
(ii)
Termination of Relationship as
a Service Provider
. If a Participant ceases to be a Service Provider, other than upon the Participants termination as the result of the Participants death or Disability or as a result of a termination for Cause, the Participant may
exercise his or her Option within such period of time as is specified in the Award Agreement to the extent that the Option is vested on the date of termination (but in no event later than the expiration of the term of such Option as set forth in the
Award Agreement). In the absence of a specified time in the Award Agreement, the Option will remain exercisable for ninety (90) days following the Participants termination. Unless otherwise provided by the Administrator, if on the date of
termination the Participant is not vested as to his or her entire Option, the Shares covered by the unvested portion of the Option will revert to the Plan. If after termination the Participant does not exercise his or her Option within the time
specified by the Administrator, the Option will terminate, and the Shares covered by such Option will revert to the Plan.
(iii)
Disability of Participant
. If a Participant ceases to be a Service Provider as a result of
the Participants Disability, the Participant may exercise his or her Option within such period of time as is specified in the Award Agreement to the extent the Option is vested on the date of termination (but in no event later than the
expiration of the term of such Option as set forth in the Award Agreement). In the absence of a specified time in the Award Agreement, the Option will remain exercisable for twelve (12) months following the Participants termination.
Unless otherwise provided by the Administrator, if on the date of termination the Participant is not vested as to his or her entire Option, the Shares covered by the unvested portion of the Option will revert to the Plan. If after termination the
Participant does not exercise his or her Option within the time specified herein, the Option will terminate, and the Shares covered by such Option will revert to the Plan.
(iv)
Death of Participant
. If a Participant dies while a Service Provider, the Option may be
exercised following the Participants death within such period of time as is specified in the Award Agreement to the extent that the Option is vested on the date of death (but in no event may the option be exercised later than the expiration of
the term of such Option as set forth in the Award Agreement), by the personal representative of the Participants estate or by the person(s) to whom the Option is transferred pursuant to the Participants will or in accordance with the
laws of descent and distribution. In the absence of a specified time in the Award Agreement, the Option will remain exercisable for twelve (12) months following Participants death. Unless otherwise provided by the Administrator, if at the
time of death Participant is not vested as to his or her entire Option, the Shares covered by the unvested portion of the Option will immediately revert to the Plan. If the Option is not so exercised within the time specified herein, the Option will
terminate, and the Shares covered by such Option will revert to the Plan. The Participants status as a Service Provider shall be deemed to have terminated on account of death if the Participant dies within ninety (90) days (or such longer
period of time as determined by the Administrator, in its discretion) after the Participants termination as a Service Provider.
(v)
Termination for Cause
. Notwithstanding any other provision of the Plan to the contrary, if the
Participants status as a Service Provider is terminated for Cause, the Option shall terminate and cease to be exercisable immediately upon such termination as a Service Provider.
(e)
Extension if Exercise Prevented by Law
. Notwithstanding the foregoing, other than termination
of Service for Cause, if the exercise of an Option within the applicable time periods set forth in Section 7(d) is prevented by the provisions of Section 27 below, the Option shall remain exercisable until ninety (90) days (or such
longer period of time as determined by the Administrator, in its discretion) after the date the Participant is notified by the Company that the Option is exercisable, but in no event later than the expiration of the term of such Option as set forth
in the Award Agreement.
(f)
Extension if Participant Subject to
Section
16(b)
. Notwithstanding the foregoing, other than termination of Service for Cause, if a sale within the applicable time periods set forth in Section 7(d) of shares acquired upon the exercise of the Option would
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subject the Participant to suit under Section 16(b) of the Exchange Act, the Option shall remain exercisable until the earliest to occur of (i) the tenth (10th) day following the
date on which a sale of such shares by the Participant would no longer be subject to such suit, (ii) the expiration of the term of such Option as set forth in the Award Agreement.
8.
Restricted Stock
.
(a)
Grant of Restricted Stock
. Subject to Section 6 and the other terms and conditions of the
Plan, the Administrator, at any time and from time to time, may grant Shares of Restricted Stock to Service Providers in such amounts as the Administrator, in its sole discretion, will determine.
(b)
Restricted Stock Agreement
. Subject to Section 6 and the other terms and conditions of the
Plan, each Award of Restricted Stock will be evidenced by an Award Agreement (which may be in electronic form) that will specify any vesting conditions, the number of Shares granted, and such other terms and conditions as the Administrator, in its
sole discretion, will determine. Unless the Administrator determines otherwise, the Company as escrow agent will hold Shares of Restricted Stock until the restrictions on such Shares, if any, have lapsed.
(c)
Transferability
. Except as provided in this Section 8, Section 15 or the Award
Agreement, Shares of Restricted Stock may not be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated until the end of the applicable vesting period (if any).
(d)
Other Restrictions
. The Administrator, in its sole discretion, may impose such other
restrictions on Shares of Restricted Stock as it may deem advisable or appropriate.
(i)
General
Restrictions
. Subject to Section 6 and the other terms and conditions of the Plan, the Administrator may set restrictions based upon continued employment or service, the achievement of specific performance objectives (Company-wide,
departmental, divisional, business unit, or individual), applicable federal or state securities laws, or any other basis determined by the Administrator in its discretion.
(ii)
Section
162(m) Performance Restrictions
. For purposes of qualifying grants
of Restricted Stock as performance-based compensation under Section 162(m) of the Code, the Administrator, in its discretion, may set restrictions based upon the achievement of Performance Goals. The Performance Goals shall be set
by the Administrator on or before the Determination Date. In granting Restricted Stock which is intended to qualify under Section 162(m) of the Code, the Administrator shall follow any procedures determined by it from time to time to be
necessary or appropriate to ensure qualification of the Restricted Stock under Section 162(m) of the Code (e.g., in determining the Performance Goals and certifying in writing whether the applicable Performance Goals have been achieved after
the completion of the applicable Performance Period).
(e)
Removal of Restrictions
. Except as
otherwise provided in this Section 8, Shares of Restricted Stock covered by each Restricted Stock grant made under the Plan will be released from escrow as soon as practicable after the last day of the vesting period or at such other time as
the Administrator may determine. The Administrator, in its discretion, may establish procedures regarding the release of Shares from escrow and/or removal of legends, as necessary or appropriate to minimize administrative burdens on the Company.
(f)
Legend on Certificates
. The Administrator, in its discretion, may require that one or more
legends be place on the certificates representing Restricted Stock to give appropriate notice of the applicable restrictions.
(g)
Voting Rights
. During the vesting period, Service Providers holding Shares of Restricted Stock
granted hereunder may exercise full voting rights with respect to those Shares, unless the Administrator determines otherwise.
(h)
Dividends and Other Distributions
. During the vesting period, Participants holding Shares of
Restricted Stock will be entitled to receive all dividends and other distributions paid with respect to such Shares, unless the Administrator provides otherwise. Notwithstanding anything herein to the contrary, dividends or other distributions
credited/payable in connection with Shares of Restricted Stock that are not yet vested will be subject to the same restrictions and risk of forfeiture as the underlying Award and will not be paid until the underlying Award vests.
(i)
Return of Restricted Stock to Company
. On the date set forth in the Award Agreement, the
Restricted Stock for which restrictions have not lapsed will revert to the Company and, subject to Section 3, again will become available for grant under the Plan.
9.
Restricted Stock Units
.
(a)
Grant
. Subject to Section 6 and the other terms and conditions of the Plan, the
Administrator, at any time and from time to time, may grant Restricted Stock Units to Service Providers in such amounts as the Administrator, in its sole discretion, will determine.
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(b)
Award Agreement
. Subject to Section 6 and the
other terms and conditions of the Plan, each Award of Restricted Stock Units will be evidenced by an Award Agreement (which may be in electronic form) that will specify any vesting conditions, the number of Restricted Stock Units granted, and such
other terms and conditions as the Administrator, in its sole discretion, will determine.
(c)
Vesting Criteria and Other Terms
. Subject to Section 6 and the other terms and conditions
of the Plan, the Administrator will set vesting criteria (if any) in its discretion, which, depending on the extent to which the criteria are met, will determine the number of Restricted Stock Units that will be paid out to the Participant.
(i)
General Restrictions
. Subject to Section 6 and the other terms and conditions of the
Plan, the Administrator may set vesting criteria based upon continued employment or service, the achievement of specific performance objectives (Company-wide, departmental, divisional, business unit, or individual goals (including, but not limited
to, continued employment or service), applicable federal or state securities laws or any other basis determined by the Administrator in its discretion.
(ii)
Section
162(m) Performance Restrictions
. For purposes of qualifying grants
of Restricted Stock Units as performance-based compensation under Section 162(m) of the Code, the Administrator, in its discretion, may set restrictions based upon the achievement of Performance Goals. The Performance Goals shall be
set by the Administrator on or before the Determination Date. In granting Restricted Stock Units that are intended to qualify under Section 162(m) of the Code, the Administrator shall follow any procedures determined by it from time to time to
be necessary or appropriate to ensure qualification of the Restricted Stock Units under Section 162(m) of the Code (e.g., in determining the Performance Goals and certifying in writing whether the applicable Performance Goals have been achieved
after the completion of the applicable Performance Period).
(d)
Earning Restricted Stock
Units
. Upon meeting the applicable vesting criteria, the Participant will be entitled to receive a payout as determined by the Administrator.
(e)
Form and Timing of Payment
. Payment of earned Restricted Stock Units will be made as soon as
practicable after the date(s) determined by the Administrator and set forth in the Award Agreement; provided, however, that the timing of payment shall in all cases comply with Section 409A to the extent applicable to the Award. The
Administrator, in its sole discretion, may settle earned Restricted Stock Units in cash, Shares, or a combination of both.
(f)
Cancellation
. On the date set forth in the Award Agreement, all unearned Restricted Stock Units
will be forfeited to the Company and, subject to Section 3, again will become available for grant under the Plan.
(g)
Voting Rights, Dividend Equivalents and Distributions
. Participants shall have no voting rights
with respect to Shares represented by Restricted Stock Units until the date of the issuance of such Shares (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company). However, the
Administrator, in its discretion, may provide in the Award Agreement evidencing any Restricted Stock Unit Award that the Participant shall be entitled to receive Dividend Equivalents with respect to the payment of cash dividends on Shares having a
record date prior to the date on which the Restricted Stock Units held by such Participant are settled or forfeited. Such Dividend Equivalents, if any, shall be accrued by crediting the Participant with additional whole Restricted Stock Units as of
the date of payment of such cash dividends on Shares. The number of additional Restricted Stock Units (rounded to the nearest whole number) to be so credited shall be determined by dividing (a) the amount of cash dividends paid on such date
with respect to the number of Shares represented by the Restricted Stock Units previously credited to the Participant by (b) the Fair Market Value per Share on such date. Such additional Restricted Stock Units shall be subject to the same terms
and conditions, including but not limited to vesting conditions, and shall be settled in the same manner and at the same time as the Restricted Stock Units originally subject to the Restricted Stock Unit Award. For the avoidance of doubt, such
additional Restricted Stock Units will not be paid prior to the time that the original Award vests. Settlement of Dividend Equivalents may be made in cash, Shares, or a combination thereof as determined by the Administrator. In the event of a
dividend or distribution paid in Shares or any other adjustment made upon a change in the capital structure of the Company as described in Section 16 appropriate adjustments shall be made in the Participants Restricted Stock Unit Award so
that it represents the right to receive upon settlement any and all new, substituted or additional securities or other property (other than normal cash dividends) to which the Participant would be entitled by reason of the Shares issuable upon
settlement of the Award, and all such new, substituted or additional securities or other property shall be immediately subject to the same vesting conditions as are applicable to the Award.
10.
Stock Appreciation Rights
.
(a)
Grant of Stock Appreciation Rights
. Subject to the terms and conditions of the Plan, a Stock
Appreciation Right may be granted to Service Providers at any time and from time to time as will be determined by the Administrator, in its sole discretion.
(b)
Number of Shares
. Subject to Section 6 and the other terms and conditions of the Plan, the
Administrator will have complete discretion to determine the number of Stock Appreciation Rights granted to any Service Provider.
(c)
Exercise Price and Other Terms
. The per share exercise price for the Shares to be issued
pursuant to exercise of a Stock Appreciation Right will be determined by the Administrator and will be no less than one hundred percent (100%) of the Fair Market Value
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per Share on the date of grant. Notwithstanding the foregoing, Stock Appreciation Rights may be granted with a per Share exercise price of less than one hundred percent (100%) of the Fair
Market Value per Share on the date of grant pursuant to a transaction described in, and in a manner consistent with, Section 424(a) of the Code. Otherwise, the Administrator, subject to the provisions of the Plan, will have complete discretion
to determine the terms and conditions of Stock Appreciation Rights granted under the Plan. Until Shares are issued in respect of a Stock Appreciation Right (as evidenced by the appropriate entry on the books of the Company or of a duly authorized
transfer agent of the Company), no right to vote or receive dividends, Dividend Equivalents or any other rights as a stockholder will exist with respect to the Shares subject to a Stock Appreciation Right.
(d)
Stock Appreciation Right Agreement
. Subject to Section 6 and the other terms and
conditions of the Plan, each Stock Appreciation Right grant will be evidenced by an Award Agreement (which may be in electronic form) that will specify the exercise price, the term of the Stock Appreciation Right, the conditions of exercise, and
such other terms and conditions as the Administrator, in its sole discretion, will determine.
(e)
Expiration of Stock Appreciation Rights
. A Stock Appreciation Right granted under the Plan will
expire upon the date determined by the Administrator, in its sole discretion, and set forth in the Award Agreement. Notwithstanding the foregoing, the rules of Section 7(b) relating to the maximum term and Sections 7(d), 7(e) and 7(f)
relating to exercise also will apply to Stock Appreciation Rights.
(f)
Payment of Stock
Appreciation Right Amount
. Upon exercise of a Stock Appreciation Right, a Participant will be entitled to receive payment from the Company in an amount determined by multiplying:
(i) The difference between the Fair Market Value of a Share on the date of exercise over the exercise
price; times
(ii) The number of Shares with respect to which the Stock Appreciation Right is
exercised.
At the discretion of the Administrator, the payment upon Stock Appreciation Right exercise may be in cash, in Shares of equivalent value,
or in some combination thereof.
11.
Performance Units and Performance Shares
.
(a)
Grant of Performance Units/Shares
. Subject to the terms and conditions of the Plan, Performance
Units and Performance Shares may be granted to Service Providers at any time and from time to time, as will be determined by the Administrator, in its sole discretion. Subject to Section 6 and the other terms and conditions of the Plan, the
Administrator will have complete discretion in determining the number of Performance Units and/or Performance Shares granted to each Participant.
(b)
Award Agreement
. Subject to Section 6 and the other terms and conditions of the Plan, each
Award of Performance Shares and Performance Units will be evidenced by an Award Agreement (which may be in electronic form) that will specify any vesting conditions, the number of Performance Shares or Performance Units, as applicable, granted, and
such other terms and conditions as the Administrator, in its sole discretion, will determine.
(c)
Value of Performance Units/Shares
. Each Performance Unit will have an initial value that is
established by the Administrator on or before the date of grant. Each Performance Share will have an initial value equal to the Fair Market Value of a Share on the date of grant.
(d)
Performance Objectives and Other Terms
. Subject to Section 6 and the other terms and
conditions of the Plan, the Administrator will set performance objectives or other vesting provisions (including, without limitation, continued status as a Service Provider) (if any) in its discretion which, depending on the extent to which they are
met, will determine the number or value of Performance Units or Performance Shares, as applicable, that will be paid out to the Service Providers. The time period during which the performance objectives or other vesting provisions must be met will
be called the Performance Period. Each Award of Performance Units and Performance Shares will be evidenced by an Award Agreement that will specify the Performance Period, and such other terms and conditions as the Administrator, in its
sole discretion, will determine.
(i)
General Restrictions
. Subject to Section 6 and the
other terms and conditions of the Plan, the Administrator may set vesting criteria based upon continued employment or service, the achievement of specific performance objectives (Company-wide, departmental, divisional, business unit, or individual
goals (including, but not limited to, continued employment or service), applicable federal or state securities laws or any other basis determined by the Administrator in its discretion.
(ii)
Section
162(m) Performance Restrictions
. For purposes of qualifying grants
of Performance Shares and/or Performance Units as performance-based compensation under Section 162(m) of the Code, the Administrator, in its discretion, may set restrictions based upon the achievement of Performance Goals. The
Performance Goals shall be set by the Administrator on or before the Determination Date. In granting Performance Shares and/or Performance Units that are intended to qualify under Section 162(m) of the Code, the Administrator shall follow any
procedures determined by it from time to time to be necessary or
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appropriate to ensure qualification of the Performance Shares and/or Performance Units under Section 162(m) of the Code (e.g., in determining the Performance Goals and certifying in writing
whether the applicable Performance Goals have been achieved after the completion of the applicable Performance Period).
(e)
Earning of Performance Units/Shares
. After the applicable Performance Period has ended, the
holder of Performance Units or Performance Shares, as applicable, will be entitled to receive a payout of the number of Performance Units or Performance Shares, as applicable, earned by the Participant over the Performance Period, to be determined
as a function of the extent to which the corresponding performance objectives or other vesting provisions have been achieved.
(f)
Form and Timing of Payment of Performance Units/Shares
. Payment of earned Performance Units and
Performance Shares will be made as soon as practicable after the expiration of the applicable Performance Period or as otherwise determined by the Administrator; provided, however, that the timing of payment shall in all cases comply with
Section 409A to the extent applicable to the Award. The Administrator, in its sole discretion, may pay earned Performance Units and Performance Shares in the form of cash, in Shares or in a combination thereof.
(g)
Cancellation of Performance Units/Shares
. On the date set forth in the Award Agreement, all
unearned or unvested Performance Units or Performance Shares, as applicable, will be forfeited to the Company, and, subject to Section 3, again will be available for grant under the Plan.
(h)
Voting Rights, Dividend Equivalents and Distributions
. Participants shall have no voting rights
with respect to Shares represented by Performance Units and/or Performance Shares until the date of the issuance of such Shares (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the
Company). However, the Administrator, in its discretion, may provide in the Award Agreement evidencing any Award of Performance Shares that the Participant shall be entitled to receive Dividend Equivalents with respect to the payment of cash
dividends on Shares having a record date prior to the date on which the Performance Shares are settled or forfeited. Such Dividend Equivalents, if any, shall be accrued by crediting the Participant with additional whole Performance Shares as of the
date of payment of such cash dividends on Shares. The number of additional Performance Units or Performance Shares, as applicable, (rounded to the nearest whole number) to be so credited shall be determined by dividing (a) the amount of cash
dividends paid on such date with respect to the number of Shares represented by the Performance Shares previously credited to the Participant by (b) the Fair Market Value per Share on such date. Such additional Performance Shares shall be
subject to the same terms and conditions, including but not limited to vesting conditions, and shall be settled in the same manner and at the same time (or as soon thereafter as practicable) as the Performance Units or Performance Shares, as
applicable, originally subject to the Award of Performance Units or Performance Shares, as applicable. For the avoidance of doubt, such additional Performance Shares will not be paid prior to the time that the original Award vests. Settlement of
Dividend Equivalents may be made in cash, Shares, or a combination thereof as determined by the Administrator, and may be paid on the same basis as settlement of the related Performance Share. Dividend Equivalents shall not be paid with respect to
Performance Units. In the event of a dividend or distribution paid in Shares or any other adjustment made upon a change in the capital structure of the Company as described in Section 16 appropriate adjustments shall be made in the
Participants Award of Performance Shares so that it represents the right to receive upon settlement any and all new, substituted or additional securities or other property (other than normal cash dividends) to which the Participant would be
entitled by reason of the Shares issuable upon settlement of the Award, and all such new, substituted or additional securities or other property shall be immediately subject to the same vesting conditions as are applicable to the Award.
12.
Performance Bonus Awards
.
(a)
Grant of Performance Bonus Awards
. Subject to the terms and conditions of the Plan, Performance
Bonus Awards may be granted to Employees at any time and from time to time, as will be determined by the Administrator, in its sole discretion, in the form of a cash bonus payable upon the attainment of Performance Goals and/or other performance
objectives that are established by the Administrator, in each case on a specified date or dates or over any period or periods determined by the Administrator. Any such Performance Bonus Award paid to an Employee who would be considered a
covered employee within the meaning of Section 162(m) of the Code (hereinafter a
Covered Employee
) will be based upon objectively determinable bonus formulas established in accordance with Section 13.
(b) Subject to Section 6 and the other terms and conditions of the Plan, the Administrator will have
complete discretion to determine the amount of the cash bonus that could be earned under a Performance Bonus Award.
13.
Terms
and Conditions of Any Performance-Based Award.
(a)
Purpose
. The purpose of this
Section 13 is to provide the Administrator the ability to qualify Awards (other than Options and SARs) that are granted pursuant to the Plan as qualified performance-based compensation under Section 162(m) of the Code. If the
Administrator, in its discretion, decides to grant a Performance-Based Award subject to Performance Goals to a Covered Employee, the provisions of this Section 13 will control over any contrary provision in the Plan; provided, however, that the
Administrator may in its discretion grant Awards to such Covered Employees that are based on Performance Goals or other specific criteria or goals but that do not satisfy the requirements of this Section 13.
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(b)
Applicability
. This Section 13 will apply to
those Covered Employees which are selected by the Administrator to receive any Award subject to Performance Goals. The designation of a Covered Employee as being subject to Section 162(m) of the Code will not in any manner entitle the Covered
Employee to receive an Award under the Plan. Moreover, designation of a Covered Employee subject to Section 162(m) of the Code for a particular Performance Period will not require designation of such Covered Employee in any subsequent
Performance Period and designation of one Covered Employee will not require designation of any other Covered Employee in such period or in any other period.
(c)
Procedures with Respect to Performance-Based Awards
. To the extent necessary to comply with the
performance-based compensation requirements of Section 162(m) of the Code, with respect to any Award granted subject to Performance Goals, no later than the Determination Date, the Administrator will, in writing, (a) designate one or more
Participants who are Covered Employees, (b) select the Performance Goals applicable to the Performance Period, (c) establish the Performance Goals, and amounts or methods of computation of such Awards, as applicable, which may be earned
for such Performance Period, and (d) specify the relationship between Performance Goals and the amounts or methods of computation of such Awards, as applicable, to be earned by each Covered Employee for such Performance Period. Following the
completion of each Performance Period, the Administrator will certify in writing whether the applicable Performance Goals have been achieved for such Performance Period. In determining the amounts earned by a Covered Employee, the Administrator will
have the right to reduce or eliminate (but not to increase) the amount payable at a given level of performance to take into account additional factors that the Administrator may deem relevant to the assessment of individual or corporate performance
for the Performance Period.
(d)
Payment of Performance Based Awards
. Unless otherwise provided
in the applicable Award Agreement, a Covered Employee must be employed by the Company or a Related Entity on the day a Performance-Based Award for such Performance Period is paid to the Covered Employee. Furthermore, a Covered Employee will be
eligible to receive payment pursuant to a Performance-Based Award for a Performance Period only if the Performance Goals for such period are achieved, unless otherwise permitted by Section 162(m) of the Code and determined by the Administrator.
(e)
Additional Limitations
. Notwithstanding any other provision of the Plan, any Award which
is granted to a Covered Employee and is intended to constitute qualified performance based compensation under Section 162(m) of the Code will be subject to any additional limitations set forth in the Code (including any amendment to
Section 162(m)) or any regulations and ruling issued thereunder that are requirements for qualification as qualified performance-based compensation as described in Section 162(m) of the Code, and the Plan will be deemed amended to the
extent necessary to conform to such requirements.
14.
Leaves of Absence/Transfer Between Locations
. Unless the
Administrator provides otherwise or as otherwise required by Applicable Law, vesting of Awards granted hereunder will be suspended during any unpaid personal leave of absence other than a Company-approved sabbatical, such that vesting shall cease on
the first day of any such unpaid personal leave of absence and shall only recommence upon return to active service. A Participant will not cease to be an Employee in the case of (i) any leave of absence approved by the Company or
(ii) transfers between locations of the Company or between the Company, its Parent, or any Subsidiary. For purposes of Incentive Stock Options, no such leave may exceed three (3) months, unless reemployment upon expiration of such leave is
guaranteed by statute or contract. If reemployment upon expiration of a leave of absence approved by the Company is not so guaranteed, then six (6) months following the first (1
st
) day
of such leave any Incentive Stock Option held by the Participant will cease to be treated as an Incentive Stock Option and will be treated for tax purposes as a Nonstatutory Stock Option.
15.
Transferability of Awards
.
(a) Unless determined otherwise by the Administrator, an Award may not be sold, pledged, assigned,
hypothecated, transferred, or disposed of in any manner other than by will or by the laws of descent or distribution and may be exercised, during the lifetime of the Participant, only by the Participant (or the Participants guardian or legal
representative). If the Administrator makes an Award transferable, such Award will contain such additional terms and conditions as the Administrator deems appropriate. Notwithstanding anything to the contrary in the Plan, in no event will the
Administrator have the right to determine and implement the terms and conditions of any Award Transfer Program without stockholder approval.
16.
Adjustments; Dissolution or Liquidation; Merger or Change in Control.
(a)
Adjustments
. In the event that any dividend or other distribution (whether in the form of cash,
Shares, other securities, or other property, but excepting normal cash dividends), recapitalization, stock split, reverse stock split, reorganization, reincorporation, reclassification, merger, consolidation,
split-up,
split-off,
spin-off,
combination, repurchase, or exchange of Shares or other securities of the Company, or other change
in the corporate structure of the Company affecting the Shares occurs, the Administrator, in order to prevent diminution or enlargement of the benefits or potential benefits intended to be made available under the Plan, will adjust the number and
class of shares of stock that may be delivered under the Plan and/or the number, class, and price of shares of stock covered by each outstanding Award, the numerical Share limits in Section 3 of the Plan and the per person numerical Share
limits in Section 6. Notwithstanding the preceding, the number of Shares subject to any Award always shall be a whole number. Any fractional share resulting from an adjustment pursuant to this Section 16(a) shall be rounded down to the
nearest whole number, and in no event may the exercise or purchase price under any Award be decreased to an amount less than the par value, if any, of the stock subject to such Award.
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(b)
Dissolution or Liquidation
. In the event of the
proposed dissolution or liquidation of the Company, the Administrator will notify each Participant as soon as practicable prior to the effective date of such proposed transaction. To the extent it has not been previously exercised (with respect to
an Option or SAR) or vested (with respect to an Award other than an Option or SAR), an Award will terminate immediately prior to the consummation of such proposed action.
(c)
Change in Control
. In the event of a merger of the Company with or into another corporation or
other entity or a Change in Control, each outstanding Award will be treated as the Administrator determines (subject to the provisions of the following paragraph), including, without limitation, that each Award be assumed or an equivalent option or
right substituted by the successor corporation or a Parent or Subsidiary of the successor corporation. The Administrator will not be required to treat all Awards similarly in the transaction.
In the event that the successor corporation does not assume or substitute for the Award, the Participant will fully vest in and have the right to
exercise all of his or her outstanding Options and Stock Appreciation Rights, including Shares as to which such Awards would not otherwise be vested or exercisable, all restrictions on Restricted Stock and Restricted Stock Units will lapse, and,
with respect to Awards with performance-based vesting, unless determined otherwise by the Administrator, all performance goals or other vesting criteria will be deemed achieved at one hundred percent (100%) of target levels and all other terms
and conditions met. In addition, if an Option or Stock Appreciation Right is not assumed or substituted in the event of a Change in Control, the Administrator will notify the Participant in writing or electronically that the Option or Stock
Appreciation Right will be exercisable for a period of time determined by the Administrator in its sole discretion, and the Option or Stock Appreciation Right will terminate upon the expiration of such period.
For the purposes of this subsection (c), an Award will be considered assumed if, following the Change in Control, the Award confers the right to
purchase or receive, for each Share subject to the Award immediately prior to the Change in Control, the consideration (whether stock, cash, or other securities or property) received in the Change in Control by holders of Common Stock for each Share
held on the effective date of the transaction (and if holders were offered a choice of consideration, the type of consideration chosen by the holders of a majority of the outstanding Shares); provided, however, that if such consideration received in
the Change in Control is not solely common stock of the successor corporation or its Parent, the Administrator may, with the consent of the successor corporation, provide for the consideration to be received upon the exercise of an Option or Stock
Appreciation Right or upon the payout of a Restricted Stock Unit, Performance Unit or Performance Share, for each Share subject to such Award, to be solely common stock of the successor corporation or its Parent equal in fair market value to the per
share consideration received by holders of Common Stock in the Change in Control.
Notwithstanding anything in this Section 16(c) to the
contrary, an Award that vests, is earned or
paid-out
upon the satisfaction of one or more performance goals will not be considered assumed if the Company or its successor modifies any of such performance goals
without the Participants consent; provided, however, a modification to such performance goals only to reflect the successor corporations post-Change in Control corporate structure will not be deemed to invalidate an otherwise valid Award
assumption.
(d)
Outside Director Awards
. With respect to Awards granted to an Outside Director
that are assumed or substituted for, if on the date of or following such assumption or substitution the Participants status as a Director or a director of the successor or acquiring corporation, as applicable, is terminated other than upon a
voluntary resignation by the Participant (unless such resignation is at the request of the acquirer), then the Participant will fully vest in and have the right to exercise Options and/or Stock Appreciation Rights as to all of the Shares underlying
such Award, including those Shares which would not otherwise be vested or exercisable, all restrictions on Restricted Stock and Restricted Stock Units will lapse, and, with respect to Awards with performance-based vesting, unless determined
otherwise by the Administrator, all performance goals or other vesting criteria will be deemed achieved at one hundred percent (100%) of target levels and all other terms and conditions met.
17.
Deferrals
. The Administrator, in its sole discretion, may permit a Participant to defer receipt of the payment of cash or
the delivery of Shares that would otherwise be due to such Participant under an Award. Any such deferral elections shall be subject to such rules and procedures as shall be determined by the Administrator in its sole discretion and, unless otherwise
expressly determined by the Administrator, shall comply with the requirements of Section 409A.
18.
Tax
.
(a)
Withholding Requirements
. Prior to the delivery of any Shares or cash pursuant to an Award (or
exercise thereof) or such earlier time as any Tax Obligations are due, the Company will have the power and the right to deduct or withhold, or require a Participant to remit to the Company, an amount sufficient to satisfy all Tax Obligations.
(b)
Withholding Arrangements
. The Administrator, in its sole discretion and pursuant to such
procedures as it may specify from time to time, may designate the method or methods by which a Participant may satisfy such Tax Obligations. As determined by the Administrator in its discretion from time to time, these methods may include one or
more of the following (a) paying cash, (b) having the Company withhold otherwise deliverable cash or Shares having a Fair Market Value equal to the minimum statutory amount required to be withheld or remitted, (c) delivering to the
Company already-owned Shares having a Fair Market Value equal to the minimum statutory amount required to be withheld or remitted, (d) selling a sufficient number of Shares otherwise deliverable to the Participant through such means as the
Administrator may determine in its sole discretion (whether through a broker or otherwise) equal to the Tax Obligations required to be withheld or remitted, (e) retaining from salary or other amounts payable to the Participant cash having a
sufficient value to
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satisfy the Tax Obligations, or (f) any other means which the Administrator, in its sole discretion, determines to both comply with Applicable Laws, and to be consistent with the purposes of
the Plan. The amount of Tax Obligations will be deemed to include any amount that the Administrator agrees may be withheld at the time the election is made, not to exceed the amount determined by using the maximum federal, state or local marginal
income tax rates applicable to the Participant or the Company, as applicable, with respect to the Award on the date that the amount of tax or social insurance liability to be withheld or remitted is to be determined. The Fair Market Value of the
Shares to be withheld or delivered shall be determined as of the date that the Tax Obligations are required to be withheld.
(c)
Compliance With Section
409A
. Awards will be designed and operated in such a
manner that they are either exempt from the application of, or comply with, the requirements of Section 409A such that the grant, payment, settlement or deferral will not be subject to the additional tax or interest applicable under
Section 409A, except as otherwise determined in the sole discretion of the Administrator. Each payment or benefit under this Plan and under each Award Agreement is intended to constitute a separate payment for purposes of
Section 1.409A-2(b)(2)
of the Treasury Regulations. The Plan, each Award and each Award Agreement under the Plan is intended to be exempt from or otherwise meet the requirements of Section 409A and
will be construed and interpreted, including but not limited with respect to ambiguities and/or ambiguous terms, in accordance with such intent, except as otherwise specifically determined in the sole discretion of the Administrator. To the extent
that an Award or payment, or the settlement or deferral thereof, is subject to Section 409A the Award will be granted, paid, settled or deferred in a manner that will meet the requirements of Section 409A, such that the grant, payment,
settlement or deferral will not be subject to the additional tax or interest applicable under Section 409A.
19.
No Effect
on Employment or Service
. Neither the Plan nor any Award will confer upon a Participant any right with respect to continuing the Participants relationship as a Service Provider with the Company, nor will they interfere in any way with the
Participants right or the Companys right to terminate such relationship at any time, with or without cause, to the extent permitted by Applicable Laws.
20.
Date of Grant
. The date of grant of an Award will be, for all purposes, the date on which the Administrator makes the
determination granting such Award, or such other later date as is determined by the Administrator. Notice of the determination will be provided to each Participant within a reasonable time after the date of such grant.
21.
Term of Plan
. Subject to Section 30 of the Plan, the Plan will become effective upon its approval by the
Companys stockholders. It will continue in effect for a term of ten (10) years from the date of the initial Board action to adopt the Plan unless terminated earlier under Section 22 of the Plan.
22.
Amendment and Termination of the Plan
.
(a)
Amendment and Termination
. The Administrator may at any time amend, alter, suspend or terminate
the Plan.
(b)
Stockholder Approval
. The Company will obtain stockholder approval of any Plan
amendment to the extent necessary and desirable to comply with Applicable Laws.
(c)
Effect of
Amendment or Termination
. No amendment, alteration, suspension or termination of the Plan will impair the rights of any Participant, unless mutually agreed otherwise between the Participant and the Administrator, which agreement must be in
writing and signed by the Participant and the Company. Termination of the Plan will not affect the Administrators ability to exercise the powers granted to it hereunder with respect to Awards granted under the Plan prior to the date of such
termination.
23.
Construction
. Captions and titles contained herein are for convenience only and shall not affect the
meaning or interpretation of any provision of the Plan. Except when otherwise indicated by the context, the singular shall include the plural and the plural shall include the singular. Use of the term or is not intended to be exclusive,
unless the context clearly requires otherwise.
24.
Severability
. If any one or more of the provisions (or any part
thereof) of this Plan shall be held invalid, illegal or unenforceable in any respect, such provision shall be modified so as to make it valid, legal and enforceable, and the validity, legality and enforceability of the remaining provisions (or any
part thereof) of the Plan shall not in any way be affected or impaired thereby.
25.
Fractional Shares
. The Company shall
not be required to issue fractional shares upon the exercise or settlement of any Award.
26.
Unfunded Obligation
.
Participants shall have the status of general unsecured creditors of the Company. Any amounts payable to Participants pursuant to the Plan shall be unfunded and unsecured obligations for all purposes, including, without limitation, Title I of
the Employee Retirement Income Security Act of 1974. No Participating Company shall be required to segregate any monies from its general funds, or to create any trusts, or establish any special accounts with respect to such obligations. The Company
shall retain at all times beneficial ownership of any investments, including trust investments, which the Company may make to fulfill its payment obligations hereunder. Any investments or the creation or maintenance of any trust or any Participant
account shall not create or constitute a trust or fiduciary relationship between the Administrator or any Participating Company and a Participant, or otherwise create any vested or beneficial interest in any Participant or the Participants
creditors in any assets of any Participating Company. The Participants shall have no claim against any Participating Company for any changes in the value of any assets which may be invested or reinvested by the Company with respect to the Plan.
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27.
Conditions Upon Issuance of Shares
.
(a)
Legal Compliance
. The granting of Awards and the issuance and delivery of Shares under the Plan
shall be subject to all Applicable Laws, rule and regulations, and to such approvals by any governmental agencies or national securities exchanges as may be required. Shares will not be issued pursuant to the exercise or vesting of an Award unless
the exercise or vesting of such Award and the issuance and delivery of such Shares will comply with Applicable Laws, rules and regulations and will be further subject to the approval of counsel for the Company with respect to such compliance.
(b)
Investment Representations
. As a condition to the exercise of an Award, the Company may require
the person exercising such Award to represent and warrant at the time of any such exercise that the Shares are being purchased only for investment and without any present intention to sell or distribute such Shares if, in the opinion of counsel for
the Company, such a representation is required.
28.
Inability to Obtain Authority
. The inability of the Company to obtain
authority from any regulatory body having jurisdiction or to complete or comply with the requirements of any registration or other qualification of the Shares under any state, federal or foreign law or under the rules and regulations of the
Securities and Exchange Commission, the stock exchange on which Shares of the same class are then listed, or any other governmental or regulatory body, which authority, registration, qualification or rule compliance is deemed by the Companys
counsel to be necessary or advisable for the issuance and sale of any Shares hereunder, will relieve the Company of any liability in respect of the failure to issue or sell such Shares as to which such requisite authority, registration,
qualification or rule compliance will not have been obtained.
29.
Forfeiture Events
. To the extent applicable, Awards
shall be subject to any recovery, recoupment, clawback and/or other forfeiture policy maintained by the Company from time to time. The Administrator may specify in an Award Agreement that the Participants rights, payments, and benefits with
respect to an Award shall be subject to reduction, cancellation, forfeiture, or recoupment upon the occurrence of certain specified events, in addition to any otherwise applicable vesting or performance conditions of an Award. Such events may
include, but shall not be limited to, fraud, breach of a fiduciary duty, restatement of financial statements as a result of fraud or willful errors or omissions, termination of employment for cause, violation of material Company and/or Subsidiary
policies, breach of
non-competition,
confidentiality, or other restrictive covenants that may apply to the Participant, or other conduct by the Participant that is detrimental to the business or reputation of
the Company and/or its Subsidiaries. The Administrator may also require the application of this Section with respect to any Award previously granted to a Participant even without any specified terms being included in any applicable Award Agreement
to the extent required under Applicable Laws.
30.
Stockholder Approval
. The Plan will be subject to approval by the
stockholders of the Company within twelve (12) months after the date the Plan is adopted by the Board. Such stockholder approval will be obtained in the manner and to the degree required under Applicable Laws.
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salesforce.com, inc.
Amended and Restated 2004 Employee Stock Purchase Plan
1.
E
STABLISHMENT
, P
URPOSE
AND
T
ERM
OF
P
LA
N
.
1.1
Establishment.
The salesforce.com, inc. 2004 Employee Stock Purchase Plan was established
effective as of the effective date of the initial registration by the Company of its Stock under Section 12 of the Exchange Act (the
Effective Date
).
1.2
Purpose.
The purpose of the Plan is to advance the interests of the Company and its
stockholders by providing an incentive to attract, retain and reward Eligible Employees of the Participating Company Group and by motivating such persons to contribute to the growth and profitability of the Participating Company Group. The Plan
provides such Eligible Employees with an opportunity to acquire a proprietary interest in the Company through the purchase of Stock. The Company intends that the Plan qualify as an employee stock purchase plan under Section 423 of
the Code, including any amendments or replacements of such section (the
Section 423(b) Plan
), although the Company makes no undertaking nor representation to maintain such qualification, and the Plan shall be so construed.
In addition, this Plan document authorizes the grant of rights to purchase Stock that do not qualify under Section 423(b) of the Code (the
Non-Section 423(b) Plan
) pursuant to rules, procedures or sub-plans
adopted by the Board designed to achieve tax, securities law or other Company compliance objectives in particular locations outside the United States. References to the Plan include the Section 423(b) Plan and the Non-Section 423(b) Plan
components.
If grants are intended to be made under the Non-Section 423(b) Plan component, they will be designated as such by the Board at or
prior to the time of grant.
1.3
Term of Plan.
The Plan shall continue in effect until its
termination by the Board.
2.
D
EFINITIONS
AND
C
ONSTRUCTION
.
2.1
Definitions.
Any term
not expressly defined in the Plan but defined for purposes of Section 423 of the Code shall have the same definition herein for purposes of the Section 423(b) Plan and, unless specifically defined otherwise therein, for the
Non-Section 423 Plan. Whenever used herein, the following terms shall have their respective meanings set forth below:
(a)
Applicable Laws
means the requirements relating to the
administration of equity-based awards under U.S. state corporate laws, U.S. federal and state securities laws, the Code, any stock exchange or quotation system on which the Common Stock is listed or quoted and the applicable laws of any non-U.S.
country or jurisdiction where Purchase Rights are, or will be, granted under the Plan.
(b)
Board
means the Board of Directors of
the Company. If one or more Committees have been appointed by the Board to administer the Plan, Board also means such Committee(s). Until and unless the Board of Directors of the Company determines otherwise, the Compensation Committee
of the Board is deemed appointed by the Board to administer the Plan and shall have all powers of the Board under the Plan (provided, however, that this is delegation is non-exclusive such that the Board of Directors shall also be entitled to
exercise all powers of the Board under the Plan).
(c)
Code
means the U.S. Internal Revenue
Code of 1986, as amended, and any applicable regulations promulgated thereunder. Reference to a specific section of the Code or U.S. Treasury Regulation thereunder will include such section or regulation, any valid regulation or other official
applicable guidance promulgated under such section, and any comparable provision of any future legislation or regulation amending, supplementing or superseding such section or regulation.
(d)
Committee
means the Compensation Committee or other committee
of the Board or of other individuals satisfying Applicable Laws appointed by the Board, or by the Compensation Committee of the Board, duly appointed to administer the Plan and having such powers as specified by the Board. Unless the powers of the
Committee have been specifically limited, the Committee shall have all of the powers of the Board granted herein, including, without limitation, the power to amend or terminate the Plan at any time, subject to the terms of the Plan and any
applicable limitations imposed by law.
(e)
Company
means salesforce.com, inc., a
Delaware corporation, or any successor corporation thereto.
(f)
Compensation
means, with respect to any
Offering Period, base wages or salary, overtime, bonuses, commissions, shift differentials, payments for paid time off and payments in lieu of notice. Compensation shall not include any compensation not included above. The Board, in its discretion,
may, on a uniform and nondiscriminatory basis under each Offering, establish a different definition of Compensation for a subsequent Offering Period.
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(g)
Contributions
means the payroll deductions and other additional payments that the Company may permit to be made by a Participant to fund the exercise of Purchase Rights granted pursuant to the Plan.
(h)
Eligible Employee
means an Employee who
meets the requirements set forth in Section 5 for eligibility to participate in the Plan.
(i)
Employee
means a person treated as an
employee of a Participating Company for purposes of Section 423 of the Code. A Participant shall be deemed to have ceased to be an Employee either upon an actual termination of employment or upon the corporation employing the Participant during
an Offering Period ceasing to be a Participating Company under the ESPP or, until and unless determined otherwise by the Board, upon the corporation employing the Participant during an Offering Period ceasing to be a Participating Company in the
applicable Offering in which the Participant is participating. For purposes of the Plan, an individual shall not be deemed to have ceased to be an Employee while on any military leave, sick leave, or other bona fide leave of absence approved by the
Company (or the employing Participating Company) or which is legally protected under Applicable Laws, in each case of three (3) months or less. If an individuals leave of absence exceeds three (3) months, the individual shall be
deemed to have ceased to be an Employee on the day immediately following the expiry of three (3) months of such leave unless the individuals right to reemployment is guaranteed either by statute or by contract. Notwithstanding the
foregoing, the Board may establish different rules to govern when a Participant ceases to be an Employee pursuant to the second sentence of this paragraph and to otherwise govern transfers of employment among Participating Companies including,
without limitation, transfers of employment between Section 423(b) Plan and Non-Section 423(b) Plan Participating Companies and between any separate Offerings established under the Plan, consistent with the applicable requirements of
Section 423 of the Code.
(j)
Exchange Act
means the
Securities Exchange Act of 1934, as amended, including the rules and regulations promulgated thereunder.
(k)
Fair Market Value
means, as of any date:
(i) If the Stock is then listed on a national or regional securities exchange or market system or is
regularly quoted by a recognized securities dealer, the closing sale price of a share of Stock (or the mean of the closing bid and asked prices if the Stock is so quoted instead) as quoted on the New York Stock Exchange or such other national or
regional securities exchange or market system constituting the primary market for the Stock, or by such recognized securities dealer, as reported in The Wall Street Journal or such other source as the Company deems reliable. If the relevant date
does not fall on a day on which the Stock has traded on such securities exchange or market system or has been quoted by such securities dealer, the date on which the Fair Market Value is established shall be the last day on which the Stock was so
traded or quoted prior to the relevant date, or such other appropriate day as determined by the Board, in its discretion.
(ii) If, on the relevant date, the Stock is not then listed on a national or regional securities exchange
or market system or regularly quoted by a recognized securities dealer, the Fair Market Value of a share of Stock shall be as determined in good faith by the Board.
(l)
Non-Section 423(b) Plan
means an
employee stock purchase plan which does not meet the requirements set forth in Section 423(b) of the Code, as amended.
(m)
Offering
means an offering of Stock as
provided in Section 6, including any separate Offerings under the Section 423(b) Plan and any separate Offerings under the Non-Section 423(b) Plan as may be designated by the Board (the terms of which need not be identical) in which
Eligible Employees of one or more Participating Companies will participate. Until and unless the Board determines otherwise, the Employees participating in the Non-Section 423(b) Plan will not participate in the same Offering or Offerings as
Employees participating in the Section 423(b) Plan, even if the dates of the applicable Offering Period for the Non-Section 423(b) Plan component and one or more Offerings under the Section 423(b) Plan component are identical.
(n)
Offering Date
means, for any Offering,
the first day of the Offering Period.
(o)
Offering
Period
means an Offering Period established in accordance with Section 6.
(p)
Parent Corporation
means any present or
future parent corporation of the Company, as defined in Section 424(e) of the Code.
(q)
Participant
means an Eligible Employee
who has become a participant in an Offering Period in accordance with Section 7 and remains a participant in accordance with the Plan.
(r)
Participating Company
means the Company
and any Parent Corporation or Subsidiary Corporation designated by the Board as a corporation the Employees of which may, if Eligible Employees, participate in the Plan. The Board shall have the sole and absolute discretion to determine from time to
time which Parent Corporations or Subsidiary Corporations shall be Participating Companies. The Board may determine that some or all Employees of any Participating Company shall participate in the Non-Section 423(b) Plan.
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(s)
Participating Company
Group
means, at any point in time, the Company and all other corporations collectively which are then Participating Companies.
(t)
Plan
means the salesforce.com, inc. 2004
Employee Stock Purchase Plan, which includes a Section 423(b) Plan and a Non-Section 423(b) Plan.
(u)
Purchase Date
means, for any Purchase
Period, the first Trading Day on or after June 15 and December 15 of each Purchase Period.
(v)
Purchase Period
means a Purchase Period
established in accordance with Section 6.
(w)
Purchase
Price
means the price at which a share of Stock may be purchased under the Plan, as determined in accordance with Section 9.
(x)
Purchase Right
means an option granted
to a Participant pursuant to the Plan to purchase such shares of Stock as provided in Section 8, which the Participant may or may not exercise during the Offering Period in which such option is outstanding. Such option arises from the right of
a Participant to withdraw any accumulated payroll deductions of the Participant not previously applied to the purchase of Stock under the Plan and to terminate participation in the Plan at any time during an Offering Period.
(y)
Section 423(b) Plan
means an employee stock purchase plan which is designed to meet the requirements set forth in Section 423(b) of the Code, as amended. The provisions of the Section 423(b) Plan shall be construed, administered and enforced in
accordance with Section 423(b) of the Code.
(z)
Stock
means the common stock of the
Company, as adjusted from time to time in accordance with Section 4.2.
(aa)
Subscription Agreement
means an agreement in such form and
provided in such manner as specified by the Company from time to time (in its discretion and on a uniform and nondiscriminatory basis), including through an electronic or other enrollment procedure prescribed by the Company, stating an
Employees election to participate in the Plan and authorizing payroll deductions under the Plan from the Employees Compensation. The form and content of the Subscription Agreement may, in the Companys discretion, be similar to the
form attached hereto in Appendix A.
(bb)
Subscription
Date
means the last business day prior to the Offering Date of an Offering Period or such earlier date as the Company shall establish.
(cc)
Subsidiary Corporation
means any
present or future subsidiary corporation of the Company, as defined in Section 424(f) of the Code.
(dd)
Trading Day
means a day on which the
national stock exchanges and the Nasdaq System are open for trading.
(ee)
U.S. Treasury
Regulations
means the Treasury regulations of the Code. Reference to a specific Treasury Regulation or Section of the Code shall include such Treasury Regulation or Section, any valid regulation promulgated under such
Section, and any comparable provision of any future legislation or regulation amending, supplementing or superseding such Section or regulation.
2.2
Construction
. Captions and titles contained herein are for convenience only and shall not
affect the meaning or interpretation of any provision of the Plan. Except when otherwise indicated by the context, the singular shall include the plural and the plural shall include the singular. Use of the term or is not intended to be
exclusive, unless the context clearly requires otherwise.
3.
A
DMINISTRATION
.
3.1
Administration by the Board.
The Plan shall be administered by the Board. All questions of
interpretation of the Plan, of any form of agreement or other document employed by the Company in the administration of the Plan, or of any Purchase Right shall be determined by the Board, and such determinations shall be final, binding and
conclusive upon all persons having an interest in the Plan or the Purchase Right, unless fraudulent or made in bad faith, and shall be given the maximum deference permitted by law. Subject to the provisions of the Plan, the Board shall determine all
of the relevant terms and conditions of Purchase Rights; provided, however, that, with respect to the Section 423(b) Plan, all Participants granted Purchase Rights pursuant to an Offering shall have the same rights and privileges within the
meaning of Section 423(b)(5) of the Code and the U.S. Treasury Regulations thereunder.
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2017 Proxy Statement
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B-3
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Notwithstanding any provision to the contrary in the Plan, and, with respect to the Section 423(b)
Plan, to the extent permissible under Section 423 of the Code and U.S. Treasury Regulations promulgated thereunder (and other Internal Revenue Service guidance), the Board may adopt rules or procedures relating to the operation and
administration of the Plan to accommodate the specific requirements of local laws and procedures for jurisdictions outside of the United States. Without limiting the generality of the foregoing, the Board is specifically authorized to adopt rules
and procedures regarding eligibility to participate, handling of Contributions, making of Contributions to the Plan, defining eligible Compensation, establishment of bank or trust accounts to hold Contributions, conversion of local currency,
obligations to pay payroll tax, determination of beneficiary designation requirements, withholding procedures and handling of stock certificates which vary with local requirements. The Board also is authorized to determine that, to the extent
permitted by U.S. Treasury Regulation
Section 1.423-2(f),
the terms of a Purchase Right granted under the Plan or an Offering to citizens or residents of a non-U.S. jurisdiction will be less favorable
than the terms of Purchase Rights granted under the same Offering to employees resident solely in the U.S.
The Board may also adopt rules,
procedures or sub-plans applicable to particular Participating Companies or locations, which sub-plans may be designed to be outside the scope of Section 423 of the Code. The rules of such sub-plans may take precedence over other provisions of
this Plan, with the exception of Section 2.1(r), Section 4.1 and Section 4.2, but unless otherwise superseded by the terms of such sub-plan, the provisions of this Plan shall govern the operation of such sub-plan. To the extent
inconsistent with the requirements of Section 423, such sub-plan shall be considered part of the Non-Section 423(b) Plan, and rights granted thereunder shall not be required by the terms of the Plan to comply with Section 423 of the
Code. Unless otherwise determined by the Board, the Employee eligible to participate in each sub-plan will participate in a separate Offering.
Any
and all actions, decisions and determinations taken or made by the Board in the exercise of its discretion pursuant to the Plan or any agreement thereunder (other than determining questions of interpretation pursuant to the second sentence of this
Section 3.1) shall be final, binding and conclusive upon all persons having an interest therein. All expenses incurred in connection with the administration of the Plan shall be paid by the Company.
3.2
Authority of Officers.
Any officer of the Company shall have the authority to act on behalf of
the Company with respect to any matter, right, obligation, determination or election that is the responsibility of or that is allocated to the Company herein, provided that the officer has apparent authority with respect to such matter, right,
obligation, determination or election.
3.3
Policies and Procedures Established by the
Company
. Without regard to whether any Participants Purchase Right may be considered adversely affected, the Company may, from time to time, consistent with the Plan and, with respect to the Section 423(b) Plan, the requirements of
Section 423 of the Code, establish, change or terminate such rules, guidelines, policies, procedures, limitations, or adjustments as deemed advisable by the Company, in its discretion, for the proper administration of the Plan, including,
without limitation, to (a) establish a minimum Contribution amount required for participation in an Offering, (b) limit the frequency and/or number of changes permitted in the rate of Contribution during an Offering, (c) designate
separate Offerings, (d) terminate or change the Offering Periods or Purchase Periods, (e) establish the exchange ratio applicable to amounts withheld in a currency other than U.S. dollars, (f) establish reasonable waiting and
adjustment periods and/or accounting and crediting procedures to ensure that amounts applied toward the purchase of Stock for each Participant properly correspond with Contribution amounts, (g) permit Contributions greater than or less than the
amount designated by a Participant in order to adjust for the Companys delay or mistake in processing a Subscription Agreement or in otherwise effecting a Participants election under the Plan or, for purposes of the Section 423(b)
Plan, as advisable to comply with the requirements of Section 423 of the Code, (h) determine the date and manner by which the Fair Market Value of a share of Stock is determined for purposes of administration of the Plan, and
(i) establish such other limitations or procedures as the Board determines in its sole discretion advisable that are consistent with the Plan. With respect to the Section 423(b) Plan, all such actions by the Company shall be taken
consistent with the requirement under Section 423(b)(5) of the Code that all Participants granted Purchase Rights pursuant to an Offering shall have the same rights and privileges within the meaning of such section.
3.4
Indemnification
. In addition to such other rights of indemnification as they may have as
members of the Board or officers or employees of the Participating Company Group, members of the Board and any officers or employees of the Participating Company Group to whom authority to act for the Board or the Company is delegated shall be
indemnified by the Company against all reasonable expenses, including attorneys fees, actually and necessarily incurred in connection with the defense of any action, suit or proceeding, or in connection with any appeal therein, to which they
or any of them may be a party by reason of any action taken or failure to act under or in connection with the Plan, or any right granted hereunder, and against all amounts paid by them in settlement thereof (provided such settlement is approved by
independent legal counsel selected by the Company) or paid by them in satisfaction of a judgment in any such action, suit or proceeding, except in relation to matters as to which it shall be adjudged in such action, suit or proceeding that such
person is liable for gross negligence, bad faith or intentional misconduct in duties; provided, however, that within sixty (60) days after the institution of such action, suit or proceeding, such person shall offer to the Company, in writing,
the opportunity at its own expense to handle and defend the same.
4.
S
HARES
S
UBJECT
TO
P
LAN
.
4.1
Maximum Number of Shares Issuable.
Subject to adjustment as provided in Section 4.2, the
maximum aggregate number of shares of Stock that may be issued under the Plan shall be twenty-seven million (27,000,000), and shall consist of
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authorized but unissued or reacquired shares of Stock, or any combination thereof. For avoidance of doubt, the limitation set forth in this section may be used to satisfy purchases of shares of
Stock under either the Section 423(b) Plan or the Non-Section 423(b) Plan. If an outstanding Purchase Right for any reason expires or is terminated or canceled without the issuance of shares of Stock thereunder, the shares of Stock
allocable to the unexercised portion of that Purchase Right shall again be available for issuance under the Plan.
4.2
Adjustments for Changes in Capital Structure.
Subject to any required action by the
stockholders of the Company, in the event of any change in the Stock effected without receipt of consideration by the Company, whether through merger, consolidation, reorganization, reincorporation, recapitalization, reclassification, stock
dividend, stock split, reverse stock split, split-up, split-off, spin-off, combination of shares, exchange of shares, or similar change in the capital structure of the Company, or in the event of payment of a dividend or distribution to the
stockholders of the Company in a form other than Stock (excepting normal cash dividends) that has a material effect on the Fair Market Value of shares of Stock, appropriate adjustments shall be made in the number and class of shares subject to the
Plan, the limit on the shares which may be purchased by any Participant during an Offering (as described in Sections 8.1) and each Purchase Right, and in the Purchase Price in order to prevent dilution or enlargement of Participants
rights under the Plan. For purposes of the foregoing, conversion of any convertible securities of the Company shall not be treated as effected without receipt of consideration by the Company. Any fractional share resulting from an
adjustment pursuant to this Section 4.2 shall be rounded down to the nearest whole number, and in no event may the Purchase Price be decreased to an amount less than the par value, if any, of the stock subject to the Purchase Right. The
adjustments determined by the Board pursuant to this Section 4.2 shall be final, binding and conclusive.
5.
E
LIGIBILITY
.
5.1
Employees Eligible to Participate.
Each Employee of a Participating Company is eligible to
participate in the Plan and shall be deemed an Eligible Employee, except the following:
(a) Any
Employee who is customarily employed by the Participating Company Group for twenty (20) hours or less per week; or
(b) Any Employee who is customarily employed by the Participating Company Group for not more than five
(5) months in any calendar year.
Notwithstanding the foregoing, the Board, in its discretion, from time to time may, prior to an Offering Date
for all Purchase Rights to be granted on such Offering Date in an Offering, to the extent permitted by Section 423 of the Code and the regulations thereunder, determine (for each Offering under the Section 423(b) Plan, on a uniform and
nondiscriminatory basis or as otherwise permitted by Treasury Regulation
Section 1.423-2)
that the definition of Eligible Employee will or will not include an individual if he or she: (i) has not
completed at least two (2) years of service since his or her last hire date (or, with respect to a decision to include an individual, such lesser period of time as may be determined by the Board in its discretion), (ii) customarily works
not more than twenty (20) hours per week (or, with respect to a decision to include an individual, such lesser period of time as may be determined by the Board in its discretion), (iii) customarily works not more than five (5) months
per calendar year (or, with respect to a decision to include an individual, such lesser period of time as may be determined by the Board in its discretion), (iv) is a highly compensated employee within the meaning of Section 414(q) of the
Code, or (v) is a highly compensated employee within the meaning of Section 414(q) of the Code with compensation above a certain level or is an officer or subject to the disclosure requirements of Section 16(a) of the Exchange Act,
provided the exclusion is applied with respect to each Offering under the Section 423(b) Plan in an identical manner to all highly compensated individuals of the employing Participating Companies whose Employees are participating in that
Offering. Each exclusion shall be applied with respect to an Offering under the Section 423(b) Plan in a manner complying with U.S. Treasury Regulation
Section 1.423-2(e).
Such exclusions may be
applied with respect to an Offering under the Non-Section 423(b) Plan without regard to the limitations of Treasury Regulation
Section 1.423-2.
Further, the Board, in its discretion, may, prior to an Offering Date for an Offering under the Non-Section 423(b) Plan, determine to exclude from
Plan participation some or all Employees of a Participating Company designated to participate in such Non-Section 423(b) Plan Offering. Finally, Employees who are citizens or residents of a non-U.S. jurisdiction (without regard to whether
they also are citizens or residents of the United States or resident aliens (within the meaning of Section 7701(b)(1)(A) of the Code)) may be excluded from participation in the Plan or an Offering if the participation of such Employees is
prohibited under the laws of the applicable jurisdiction or if complying with the laws of the applicable jurisdiction would cause the Plan or an Offering to violate Section 423 of the Code.
5.2
Exclusion of Certain Stockholders.
Notwithstanding any provision of the Plan to the contrary,
no Employee shall be treated as an Eligible Employee and granted a Purchase Right under the Plan if, immediately after such grant, the Employee would own or hold options to purchase stock of the Company or of any Parent Corporation or Subsidiary
Corporation possessing five percent (5%) or more of the total combined voting power or value of all classes of stock of such corporation or a related corporation, as determined in accordance with Section 423(b)(3) of the Code and the
applicable U.S. Treasury Regulations of Section 423 of the Code. For purposes of this Section 5.2, the attribution rules of Section 424(d) of the Code shall apply in determining the stock ownership of such Employee.
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2017 Proxy Statement
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5.3
Determination by Company.
The Company shall
determine in good faith and in the exercise of its discretion whether an individual has become or has ceased to be an Employee or an Eligible Employee and the effective date of such individuals attainment or termination of such status, as the
case may be. For purposes of an individuals participation in or other rights, if any, under the Plan as of the time of the Companys determination, all such determinations by the Company shall be final, binding and conclusive,
notwithstanding that the Company or any court of law or governmental agency subsequently makes a contrary determination.
6.
O
FFERINGS
.
The Board previously determined that no Offerings would commence under the Plan until further approval by the Board. Beginning on December 15,
2011, the Plan shall be implemented by consecutive, overlapping Offering Periods of approximately twelve (12) months duration (individually, an
Offering Period
) commencing on the first Trading Day on or
after June 15 and December 15 of each year and ending on the first Trading Day on or after June 15 and December 15, respectively. Notwithstanding the foregoing, the Board may establish additional or alternative sequential or
overlapping Offering Periods, a different duration for one or more Offerings or Offering Periods or different commencing, purchase or ending dates for such Offering Periods with respect to future offerings without stockholder approval if such change
is announced prior to the scheduled beginning of the first Offering Period to be affected thereafter; provided, however, that no Offering Period may have a duration exceeding twenty-seven (27) months. Unless and until the Board determines
otherwise in its discretion, each Offering Period shall consist of two (2) consecutive purchase periods each having a duration of approximately six (6) months (individually, a
Purchase Period
),
commencing on one Purchase Date and ending with the next Purchase Date, except that the first Purchase Period of any Offering Period will commence on the Offering Date and end with the next Purchase Date. Further, if the Board so determines,
Eligible Employees of the Company and/or of any Participating Company will be deemed to participate in a separate Offering under the Section 423(b) Plan, even if the dates of the applicable Offering Period of each such Offering are identical,
provided that the terms of participation are the same within each separate Offering, as determined in accordance with the requirements of Section 423 of the Code.
7.
P
ARTICIPATION
IN
THE
P
LAN
.
7.1
Initial
Participation.
An Eligible Employee may become a Participant in an Offering Period by delivering or submitting a properly completed Subscription Agreement in such form and manner prescribed by the Company by the Subscription Date established by
the Company for that Offering Period. An Eligible Employee who does not deliver or submit a properly completed Subscription Agreement on or before the Subscription Date for an Offering Period shall not participate in the Plan for that Offering
Period or for any subsequent Offering Period unless the Eligible Employee subsequently delivers or submits a properly completed Subscription Agreement on or before the Subscription Date for such subsequent Offering Period. An Employee who becomes an
Eligible Employee after the Offering Date of an Offering Period shall not be eligible to participate in that Offering Period but may participate in any subsequent Offering Period provided the Employee is still an Eligible Employee as of the Offering
Date of such subsequent Offering Period.
7.2
Continued Participation.
A Participant shall
automatically participate in the next Offering Period commencing immediately after (including an Offering Period beginning the same day) the last Purchase Date of each Offering Period in which the Participant participates provided that the
Participant remains an Eligible Employee on the Offering Date of the new Offering Period and has not either (a) withdrawn from the Plan pursuant to Section 12.1, (b) decreased his or her rate of Contributions to zero percent (0%) for
the then-current Offering Period pursuant to Section 10.3, or (c) terminated employment as provided in Section 13. A Participant who may automatically participate in a subsequent Offering Period, as provided in this Section, is not
required to deliver or submit any additional Subscription Agreement for the subsequent Offering Period in order to continue participation in the Plan. However, a Participant may deliver or submit a new Subscription Agreement for a subsequent
Offering Period in accordance with the procedures set forth in Section 7.1 if the Participant desires to change any of the elections contained in the Participants then effective Subscription Agreement.
8.
R
IGHT
TO
P
URCHASE
S
HARES
.
8.1
Grant of Purchase
Right.
Except as otherwise provided below, on the Offering Date of each Offering Period, each Participant in such Offering Period shall be granted automatically a Purchase Right consisting of an option to purchase on each Purchase Date during
such Offering Period (at the applicable Purchase Price) up to a maximum of that number of whole shares of Stock determined by dividing Twelve Thousand Five Hundred Dollars ($12,500) by the Fair Market Value of a Share of Stock on the Offering Date
of such Offering Period, subject to adjustment under Section 4.2 above; as a result, in no event will a Participant be eligible to purchase during any Offering Period that number of whole shares of Stock determined by dividing Twenty-Five
Thousand Dollars ($25,000) by the Fair Market Value of a Share of Stock on the Offering Date of such Offering Period, subject to adjustment under Section 4.2 above. The Board may, in its discretion and prior to the Offering Date of any Offering
Period, (i) change the maximum number of shares of Stock that may be purchased by a Participant in such Offering Period or on any Purchase Date within an Offering Period or (ii) specify a maximum aggregate number of shares that may be
purchased by all Participants in an Offering Period or on any Purchase Date within an Offering Period. Further, the Board may limit the number or value of the shares of Stock made available for purchase in a qualified period (
e.g.,
twelve
(12) month period) by Participants in specified countries, locations or Participating Companies, if necessary to avoid securities law filings, achieve tax objectives or to meet other Company compliance objectives in
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particular locations outside the United States, provided that any such limitation is imposed under the Non-Section 423(b) Plan or, with respect to any Offering under the Section 423(b)
Plan, is imposed on an equal basis to all Participants under such Offering or as otherwise permitted in accordance with Section 423 of the Code and the U.S. Treasury Regulations thereunder. No Purchase Right shall be granted on an Offering Date
to any person who is not, on such Offering Date, an Eligible Employee.
8.2
Calendar Year Purchase
Limitation.
Notwithstanding any provision of the Plan to the contrary, no Participant shall be granted a Purchase Right which permits his or her right to purchase shares of Stock under the Plan to accrue at a rate which, when aggregated with
such Participants rights to purchase shares under all other employee stock purchase plans of a Participating Company intended to meet the requirements of Section 423 of the Code, exceeds Twenty-Five Thousand Dollars ($25,000) in Fair
Market Value (or such other limit, if any, as may be imposed by the Code) for each calendar year in which such Purchase Right is outstanding at any time. For purposes of the preceding sentence, the Fair Market Value of shares purchased during a
given Offering Period shall be determined as of the Offering Date for such Offering Period. The limitation described in this Section shall be applied in conformance with Section 423(b)(8) of the Code and the applicable U.S. Treasury
Regulations thereunder.
9.
P
URCHASE
P
RICE
.
The Purchase Price at which each share of Stock may be acquired in an
Offering Period upon the exercise of all or any portion of a Purchase Right shall be established by the Board; provided, however, that the Purchase Price on each Purchase Date shall not be less than
eighty-five
percent (85%) of the lesser of (a) the Fair Market Value of a share of Stock on the Offering Date of the Offering Period or (b) the Fair Market Value of a share of Stock on the
Purchase Date. Subject to adjustment as provided below or in Section 23 and unless otherwise provided by the Board, the Purchase Price for each Offering Period shall be
eighty-five
percent (85%) of
the lesser of (a) the Fair Market Value of a share of Stock on the Offering Date of the Offering Period or (b) the Fair Market Value of a share of Stock on the Purchase Date. Notwithstanding the foregoing, in the event that (i) the
stockholders of the Company approve an amendment to the Plan to increase the maximum aggregate number of shares of Stock issuable under the Plan in accordance with Section 4.1, (ii) all or any portion of such additional shares of Stock
(the
Additional Shares
) are to be issued pursuant to an Offering Period in progress at the time of such stockholder approval and (iii) the Fair Market value per share of Stock on the date of such
stockholder approval (the
Approval Date
) is greater than the Fair Market value per share of Stock on the Offering Date of such Offering Period, then, the Board may, in its discretion and without the consent of
any Participant, adjust the Purchase Price for such Offering Period to be an amount equal to
eighty-five
percent (85%) (or such other percentage as in effect prior to such adjustment) of the lesser of
(a) the Fair Market Value of a share of Stock on the Approval Date or (b) the Fair Market Value of a share of Stock on the Purchase Date.
10.
A
CCUMULATION
OF
P
URCHASE
P
RICE
T
HROUGH
P
AYROLL
D
EDUCTION
.
Except as provided in
Section 10.4, shares of Stock acquired pursuant to the exercise of all or any portion of a Purchase Right may be paid for only by means of payroll deductions from the Participants Compensation accumulated during the Offering Period for
which such Purchase Right was granted, subject to the following:
10.1
Amount of Payroll
Deductions.
Except as otherwise provided herein, the amount to be deducted under the Plan from a Participants Compensation or other Contributions (to the extent permitted by the Board) made on each pay day during an Offering Period shall
be determined by the Participants Subscription Agreement. The Subscription Agreement shall set forth the percentage of the Participants Compensation to be deducted or other Contributions made on each pay day during an Offering Period in
whole percentages of not less than two percent (2%) (except as a result of an election pursuant to Section 10.3 to stop payroll deductions during an Offering) or more than fifteen percent (15%) of the Compensation which he or she
receives on each pay day during the Offering Period; provided, however, that should a pay day occur on a Purchase Date, a Participant will have any payroll deductions made on such day applied to his or her account under the subsequent Purchase
Period or Offering Period. The Board may change the foregoing limits on payroll deductions effective as of any Offering Date. A Participants Subscription Agreement will remain in effect for successive Offering Periods unless terminated as
provided in Section 12 hereof.
10.2
Commencement of Contributions.
Payroll deductions
for a Participant shall commence on the first pay day on or following the Offering Date and shall end on the last pay day prior to the end of the Offering Period unless sooner altered or terminated as provided herein.
10.3
Election to Change or Stop Contributions.
During an Offering Period, a Participant may elect
to decrease the rate of or to stop Contributions of his or her Compensation by delivering or submitting to the Company an amended Subscription Agreement or following such other procedure prescribed by the Company to authorize such change and
completed on or before a date established by the Company from time to time in a nondiscriminatory manner and announced to the Participants. Such election to change or stop contributions will be implemented prior to the beginning of the first pay
period for which such election is to be effective as established by the Company from time to time and announced to the Participants. A Participant who elects, effective following the first pay day of an Offering Period, to decrease the rate of his
or her Contributions to zero percent (0%) shall nevertheless remain a Participant in the current Offering Period assuming he or she remains otherwise eligible, and unless such Participant withdraws from the Plan as provided in Section 12.1;
provided, however, that if such decrease of a Participants rate of Contributions to zero percent (0%) occurs
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during the first Purchase Period during and Offering Period, he or she shall remain in such first Purchase Period (assuming he or she remains otherwise eligible and unless such Participant
withdraws from the Plan as provided in Section 12.1) through the purchase of shares of Stock on the Purchase Date for such Purchase Period but automatically shall be deemed to withdraw from the second Purchase Period in such Offering Period.
The Board may, in its sole discretion, limit the nature and/or number of Contribution rate changes that may be made by Participants during any Offering Period or Purchase Period and may establish such other conditions or limitations as it deems
appropriate for Plan administration. Until and unless determined otherwise by the Board, a Participant may elect one decrease to his or her rate of Contributions per Purchase Period, but no increases to his or her rate of Contributions per Offering
Period or Purchase Period.
10.4
Alternative Contributions.
The Board, in its discretion, may
permit Participants in a specified Offering under the Section 423(b) Plan or in an Offering under the Non-Section 423(b) to make Contributions to the Plan through cash, check or other means in lieu of payroll deductions set forth in the
Subscription Agreement prior to each Purchase Date of each Purchase Period; provided, however, that, with respect to Offerings under the Section 423(b) Plan, payment through means other than payroll deductions shall be permitted only if the
Participant has not already had the maximum permitted amount withheld through payroll deductions during the Purchase Period or Offering Period and such other payment means meet the requirements of and are permissible under Section 423(b) and
the U.S. Treasury Regulations thereunder. Unless otherwise required by the context, references to payroll deductions in this Plan shall be construed as including such alternative Contributions as may be permitted by the Board.
10.5
Administrative Suspension of Contributions.
The Company may, in its sole discretion, suspend
a Participants Contributions under the Plan as the Company deems advisable to avoid accumulating Contributions in excess of the amount that could reasonably be anticipated to purchase the maximum number of shares of Stock permitted
(a) under the Participants Purchase Right or (b) during a calendar year under the limit set forth in Section 8.2. Unless the Participant has either withdrawn from the Plan as provided in Section 12.1 or has ceased to be an
Eligible Employee, Contributions shall be resumed at the rate specified in the Participants then effective Subscription Agreement either (i) at the beginning of the next Offering Period if the reason for suspension was due to clause
(a) in the preceding sentence or (ii) at the beginning of the next Offering Period having a first Purchase Date that falls within the subsequent calendar year if the reason for suspension was clause (b) in the preceding sentence.
10.6
Participant Accounts.
Individual bookkeeping accounts shall be maintained for each
Participant. All of a Participants Contributions shall be credited to such Participants Plan account and shall be deposited with the general funds of the Company. All such Contributions received or held by the Company may be used by the
Company for any corporate purpose. The Company will not be obligated to segregate such Contributions, unless otherwise required under Applicable Laws in which case, any alternative method of deposit shall apply with respect to any Offering under the
Section 423 Plan, on a uniform and non-discriminatory manner to all Participants under such Offering or as otherwise permitted in accordance with Section 423 of the Code and the U.S. Treasury Regulations thereunder, or shall apply under
the Non-Section 423(b) Plan. Until the shares of Stock are issued (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company), a Participant will only have the rights of an unsecured
creditor with respect to such shares of Stock, and no right to vote or receive dividends or any other rights as a stockholder will exist with respect to such shares of Stock.
10.7
No Interest Paid.
Interest shall not be paid on sums deducted from a Participants
Compensation pursuant to the Plan or otherwise credited to the Participants Plan account, unless payment of interest is required under Applicable Law, as determined by the Company, in which case either (i) with respect to any Offering
under the Section 423(b) Plan in which any Participant is subject to such Applicable Law requirement, the payment of interest shall apply to all Participants in such Offering except to the extent otherwise permitted by U.S. Treasury Regulation
Section 1.423-2(f),
or (ii) with respect to any Offering under the Non-Section 423(b) Plan, the payment of interest shall apply as determined by the Company.
11.
P
URCHASE
OF
S
HARES
.
11.1
Exercise of
Purchase Right.
On each Purchase Date of an Offering Period, each Participant who has not withdrawn from the Plan and whose participation in the Offering has not otherwise terminated before such Purchase Date shall automatically acquire pursuant
to the exercise of the Participants Purchase Right the number of whole shares of Stock determined by dividing (a) the total amount of the Participants payroll deductions accumulated in the Participants Plan account during the
Offering Period and not previously applied toward the purchase of Stock by (b) the Purchase Price, subject to the limitations in Section 8 above. In addition, no fractional shares of Stock will be purchased. No shares of Stock shall be
purchased on a Purchase Date on behalf of a Participant whose participation in the Offering or the Plan has terminated before such Purchase Date.
11.2
Pro Rata Allocation of Shares.
If the number of shares of Stock which might be purchased by
all Participants on a Purchase Date exceeds the number of shares of Stock available in the Plan as provided in Section 4.1 or the maximum aggregate number of shares of Stock that may be purchased on such Purchase Date pursuant to a limit
established by the Board pursuant to Section 8.1, the Company shall make a pro rata allocation of the shares available in as uniform a manner as practicable and as the Company determines to be equitable among all Participants exercising
Purchase Rights to purchase Stock on such Purchase Date and may either continue all Offering Periods then in effect or terminate any or all Offering Periods then in effect pursuant to Section 24. Any fractional share resulting from such pro
rata allocation to any Participant shall be disregarded.
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11.3
Delivery of Certificates.
As soon as practicable
after each Purchase Date, the Company shall arrange the delivery to each Participant of the shares acquired by the Participant on such Purchase Date by electronic or other means determined by the Company in its sole discretion and pursuant to rules
established by the Board. The Company may permit or require that shares be deposited directly with a broker designated by the Company or to a designated agent of the Company, and the Company may utilize electronic or automated methods of share
transfer. The Company may require that shares be retained with such broker or agent for a designated period of time and/or may establish procedures to permit tracking of disqualifying dispositions of such shares. Shares to be delivered to a
Participant under the Plan shall be registered in the name of the Participant, or, if requested by the Participant, in the name of the Participant and his or her spouse, or, if applicable, in the names of the heirs of the Participant.
11.4
Return of Cash Balance.
Any cash balance remaining in a Participants Plan account
following any Purchase Date shall be refunded to the Participant as soon as practicable after such Purchase Date, without interest. Notwithstanding the foregoing, the Committee may, in its discretion and to the extent permissible under
Section 423 of the Code and U.S. Treasury Regulations promulgated thereunder (and other Internal Revenue Service guidance), determine that, if the Contributions to be returned to a Participant pursuant to the preceding sentence is less than the
amount that would have been necessary to purchase an additional whole share of Stock on such Purchase Date, the Company shall retain the cash balance in the Participants Plan account to be applied toward the purchase of shares of Stock in the
subsequent Offering Period, subject to earlier withdrawal by the Participant as provided in Section 12.
11.5
Tax Withholding.
At the time a Participants Purchase Right is exercised, in whole or in
part, or at the time a Participant disposes of some or all of the shares of Stock he or she acquires under the Plan (or any other time that a taxable event related to the Plan occurs), the Participant shall make adequate provision for the U.S.
federal, state, local and or any other tax liability payable to any authority including taxes imposed by jurisdictions outside of the U.S., national insurance, social security or other tax withholding obligations, if any, of the Participating
Company Group which arise upon exercise of the Purchase Right or upon such disposition of shares (or any other time that a taxable event related to the Plan occurs), as applicable. The Participating Company Group may, but shall not be obligated to,
withhold from the Participants compensation or any other payments due the Participant the amount necessary to meet such withholding obligations or withhold from the proceeds of the sale of shares of Stock or any other method of withholding the
Participating Company Group deems appropriate to the extent permitted by U.S. Treasury Regulation
Section 1.423-2(f),
including any withholding required to make available to the Company or the employing
Participating Company any tax deductions or benefit attributable to the sale or early disposition of shares of Stock by the Participant.
11.6
Expiration of Purchase Right.
Any portion of a Participants Purchase Right remaining
unexercised after the end of the Offering Period to which the Purchase Right relates shall expire immediately upon the end of the Offering Period.
11.7
Provision of Reports and Stockholder Information to Participants.
Individual accounts shall
be maintained for each Participant in the Plan. Each Participant who has exercised all or part of his or her Purchase Right shall receive, at least annually, a report of such Participants Plan account setting forth the Contributions credited
to his or her Plan account, the number of shares of Stock purchased, the Purchase Price for such shares, the date of purchase and the cash balance, if any, remaining. The report required by this Section may be delivered in such form and by such
means, including by electronic transmission, as the Company may determine. In addition, each Participant shall be provided any information required by Applicable Laws.
12.
W
ITHDRAWAL
FROM
P
LAN
.
12.1
Voluntary
Withdrawal from the Plan.
A Participant may withdraw from the Plan by delivering or submitting to the Company a notice of withdrawal on a form and in such manner and in such time frame as provided by the Company for this purpose (which may, in
the Companys discretion, be similar to the form notice of withdrawal attached hereto in Appendix A). Such withdrawal may be elected at any time prior to the end of an Offering Period; provided, however, that if a Participant withdraws from the
Plan after a Purchase Date, the withdrawal shall not affect shares of Stock acquired by the Participant on such Purchase Date. A Participant who voluntarily withdraws from the Plan is prohibited from resuming participation in the Plan in the same
Offering from which he or she withdrew, but may participate in any subsequent Offering by again satisfying the requirements of Sections 5 and 7.1. The Company may impose, from time to time, a requirement that the notice of withdrawal from the Plan
be on file with the Company for a reasonable period prior to the effectiveness of the Participants withdrawal.
12.2
Return of Payroll Deductions.
Upon a Participants voluntary withdrawal from the Plan
pursuant to Section 12.1, the Participants accumulated Plan account balance which has not been applied toward the purchase of shares of Stock shall be refunded to the Participant as soon as practicable after the withdrawal, without the
payment of any interest (subject to Section 10.7 above), and the Participants interest in the Plan and the Offering shall terminate. Such amounts to be refunded in accordance with this Section may not be applied to any other Offering
under the Plan. A Participants withdrawal from the Plan will not have any effect upon his or her eligibility to participate in any similar plan which may hereafter be adopted by the Company or in any Offering Periods which commence after the
termination of the Offering Period during which the Participant withdrew.
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13.
T
ERMINATION
OF
E
MPLOYMENT
OR
E
LIGIBILITY
.
Upon a
Participants ceasing, prior to a Purchase Date, to be an Employee for any reason, including retirement, disability or death, or upon the failure of a Participant to remain an Eligible Employee, the Participants participation in the Plan
shall terminate immediately. In such event, the Participants Plan account balance which has not been applied toward the purchase of shares shall, as soon as practicable, be returned to the Participant or, in the case of the Participants
death, to the executor or administrator of the Participants estate, or if no such executor or administrator has been appointed (to the knowledge of the Company), the Company, in its discretion, may deliver the Participants Plan account
balance to the spouse or to any one or more dependents or relatives of the Participant, or if no spouse, dependent or relative is known to the Company, then to such other person as the Company may designate, and all of the Participants rights
under the Plan shall terminate. Interest shall not be paid on sums returned pursuant to this Section 13. A Participant whose participation has been so terminated may again become eligible to participate in the Plan by satisfying the
requirements of Sections 5 and 7.1.
14.
C
HANGE
IN
C
ONTROL
.
14.1
Definitions.
(a) An
Ownership Change Event
shall be deemed to have
occurred if any of the following occurs with respect to the Company: (i) the direct or indirect sale or exchange in a single or series of related transactions by the stockholders of the Company of more than fifty percent (50%) of the
voting stock of the Company; (ii) a merger or consolidation in which the Company is a party; (iii) the sale, exchange, or transfer of all or substantially all of the assets of the Company; or (iv) a liquidation or dissolution of the
Company.
(b) A
Change in Control
shall mean an Ownership
Change Event or a series of related Ownership Change Events (collectively, the
Transaction
) wherein the stockholders of the Company immediately before the Transaction do not retain immediately after the
Transaction, in substantially the same proportions as their ownership of shares of the Companys voting stock immediately before the Transaction, direct or indirect beneficial ownership of more than fifty percent (50%) of the total
combined voting power of the outstanding voting securities of the Company or, in the case of a Transaction described in Section 14.1(a)(iii), the corporation or other business entity to which the assets of the Company were transferred (the
Transferee
), as the case may be. For purposes of the preceding sentence, indirect beneficial ownership shall include, without limitation, an interest resulting from ownership of the voting securities of one or
more corporations or other business entities which own the Company or the Transferee, as the case may be, either directly or through one or more subsidiary corporations or other business entities. The Board shall have the right to determine whether
multiple sales or exchanges of the voting securities of the Company or multiple Ownership Change Events are related, and its determination shall be final, binding and conclusive.
14.2
Effect of Change in Control on Purchase Rights.
In the event of a Change in Control, the
surviving, continuing, successor, or purchasing corporation or parent thereof, as the case may be (the
Acquiring Corporation
), may, without the consent of any Participant, assume the Companys rights and
obligations under the Plan. If the Acquiring Corporation elects not to assume the Companys rights and obligations under the Plan, the Purchase Date of the then current Offering Period shall be accelerated to a date before the date of the
Change in Control specified by the Board, but the number of shares of Stock subject to outstanding Purchase Rights shall not be adjusted. All Purchase Rights which are neither assumed by the Acquiring Corporation in connection with the Change in
Control nor exercised as of the date of the Change in Control shall terminate and cease to be outstanding effective as of the date of the Change in Control.
15.
N
ONTRANSFERABILITY
OF
P
URCHASE
R
IGHTS
.
Neither Contributions or other amounts credited to a Participants
Plan account nor a Participants Purchase Right may be assigned, transferred, pledged or otherwise disposed of in any manner other than by will or the laws of descent and distribution. Any such attempted assignment, transfer, pledge or other
disposition shall be without effect, except that the Company may treat such act as an election to withdraw from the Plan as provided in Section 12.1. A Purchase Right shall be exercisable during the lifetime of the Participant only by the
Participant.
16.
C
OMPLIANCE
WITH
L
AW
.
The issuance of shares under the Plan shall be subject to compliance with
all applicable requirements of federal, state and foreign law with respect to such securities, including the requirements of any securities exchange or market system upon which the Stock may then be listed. A Purchase Right may not be exercised if
the issuance of shares upon such exercise would constitute a violation of any applicable federal, state or foreign securities laws or other law or regulations or the requirements of any securities exchange or market system upon which the Stock may
then be listed. In addition, no Purchase Right may be exercised unless (a) a registration statement under the Securities Act of 1933, as amended, shall at the time of exercise of the Purchase Right be in effect with respect to the shares
issuable upon exercise of the Purchase Right, or (b) in the opinion of legal counsel to the Company, the shares issuable upon exercise of the Purchase Right may be issued in accordance with the terms of an applicable exemption from the
registration requirements of said Act. The inability of the Company to obtain from any regulatory body having jurisdiction the authority, if any, deemed by the Companys legal counsel to be necessary to the lawful issuance and sale of any
shares under the Plan, or the
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approval of any securities exchange or market system upon which the Stock may then be listed, if any, deemed by the Companys legal counsel to be necessary to the issuance and sale of any
shares under the Plan in compliance with the requirements of such securities exchange or market system, shall relieve the Company of any liability in respect of the failure to issue or sell such shares as to which such requisite authority or
approval shall not have been obtained. As a condition to the exercise of a Purchase Right, 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.
17.
R
IGHTS
AS
A
S
TOCKHOLDER
AND
E
MPLOYEE
.
A Participant shall have no rights as a stockholder
by virtue of the Participants participation in the Plan until the date of the issuance of the shares purchased pursuant to the exercise of the Participants Purchase Right (as evidenced by the appropriate entry on the books of the Company
or of a duly authorized transfer agent of the Company). No adjustment shall be made for dividends, distributions or other rights for which the record date is prior to the date such shares are issued, except as provided in Section 4.2. Nothing
herein shall confer upon a Participant any right to continue in the employ of the Participating Company Group or interfere in any way with any right of the Participating Company Group to terminate the Participants employment at any time.
18.
L
EGENDS
.
The Company may at any time place legends or other identifying symbols referencing any applicable federal, state or foreign securities law restrictions
or any provision convenient in the administration of the Plan on some or all of the certificates representing shares of Stock issued under the Plan. The Participant shall, at the request of the Company, promptly present to the Company any and all
certificates representing shares acquired pursuant to a Purchase Right in the possession of the Participant in order to carry out the provisions of this Section. Unless otherwise specified by the Company, legends placed on such certificates may
include but shall not be limited to the following:
THE SHARES EVIDENCED BY THIS CERTIFICATE WERE ISSUED BY THE CORPORATION TO THE REGISTERED HOLDER UPON THE
PURCHASE OF SHARES UNDER AN EMPLOYEE STOCK PURCHASE PLAN AS DEFINED IN SECTION 423 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED. THE TRANSFER AGENT FOR THE SHARES EVIDENCED HEREBY SHALL NOTIFY THE CORPORATION IMMEDIATELY OF ANY TRANSFER OF
THE SHARES BY THE REGISTERED HOLDER HEREOF. THE REGISTERED HOLDER SHALL HOLD ALL SHARES PURCHASED UNDER THE PLAN IN THE REGISTERED HOLDERS NAME (AND NOT IN THE NAME OF ANY NOMINEE).
19.
N
OTIFICATION
OF
D
ISPOSITION
OF
S
HARES
.
The Company may require the Participant to give the Company prompt
notice of any disposition of shares acquired by exercise of a Purchase Right. The Company may require that until such time as a Participant disposes of shares acquired upon exercise of a Purchase Right, the Participant shall hold all such shares in
the Participants name (or, if elected by the Participant, in the name of the Participant and his or her spouse but not in the name of any nominee) until the later of two years after the date of grant of such Purchase Right or one year after
the date of exercise of such Purchase Right. The Company may direct that the certificates evidencing shares acquired by exercise of a Purchase Right refer to such requirement to give prompt notice of disposition.
20.
N
OTICES
.
All notices or other communications by a Participant to the Company under or in connection with the Plan shall be deemed to have been duly given when
received in the form specified by the Company at the location, or by the person, designated by the Company for the receipt thereof.
21.
C
ODE
S
ECTION
409A.
The Section 423(b) Plan is exempt from the application of Section 409A of the Code. The Non-Section 423(b) Plan is intended to be exempt
from the application of Section 409A of the Code under the short-term deferral exception and any ambiguities shall be construed and interpreted in accordance with such intent. Except as provided in Section 22, in the case of a Participant
who would otherwise be subject to Section 409A of the Code, to the extent the Board determines that a Purchase Right or the exercise, payment, settlement or deferral thereof is subject to Section 409A of the Code, the Purchase Right shall
be granted, exercised, paid, settled or deferred in a manner that will comply with Section 409A of the Code, including U.S. Treasury Regulations promulgated thereunder (and other Internal Revenue Service guidance) and any ambiguities shall be
construed and interpreted in accordance with such intent. Anything in the foregoing to the contrary notwithstanding, the Company shall have no liability to a Participant or any other party if the Purchase Right that is intended to be exempt from or
compliant with Section 409A of the Code is not so exempt or compliant or for any action taken by the Board with respect thereto.
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22.
T
AX
-Q
UALIFICATION
.
Although the Company may endeavor to (a) qualify a Purchase Right for favorable tax treatment under the laws of the United States or jurisdictions
outside of the United States or (b) avoid adverse tax treatment (e.g., under Section 409A of the Code), the Company makes no representation to that effect and expressly disavows any covenant to maintain favorable or avoid unfavorable tax
treatment, anything to the contrary in this Plan, including Section 21, notwithstanding. The Company shall be unconstrained in its corporate activities without regard to the potential negative tax impact on Participants under the Plan.
23.
A
UTOMATIC
T
RANSFER
TO
L
OW
P
RICE
O
FFERING
P
ERIOD
.
To the extent permitted by Applicable Laws, if the Fair
Market Value of the Stock on any Purchase Date in an Offering Period is lower than the Fair Market Value of the Stock on the Offering Date of such Offering Period, then all Participants in such Offering Period, excluding those Participants who have
decreased their rate of Contributions to zero percent (0%) during such Offering Period pursuant to Section 10.3, will be automatically withdrawn from such Offering Period immediately after the exercise of their Purchase Right on such Purchase
Date and automatically re-enrolled in the immediately following Offering Period (including an Offering Period beginning the same day) as of the first day thereof.
24.
A
MENDMENT
OR
T
ERMINATION
OF
THE
P
LAN
.
24.1 The Board may at
any time and for any reason amend, suspend or terminate the Plan, or any part thereof, except that (a) no such amendment shall affect Purchase Rights previously granted under the Plan unless expressly provided by the Board and (b) no such
amendment may adversely affect a Purchase Right previously granted under the Plan without the consent of the Participant, except to the extent permitted by the Plan or as may be necessary to qualify the Section 423(b) Plan as an employee stock
purchase plan pursuant to Section 423 of the Code or to comply with any applicable law, regulation or rule. If the Plan is terminated, the Board, in its discretion, may elect to terminate all outstanding Offering Periods either immediately or
upon completion of the purchase of shares of Stock on the next Purchase Date (which may be sooner than originally scheduled, if determined by the Board in its discretion), or may elect to permit Offering Periods to expire in accordance with their
terms (and subject to any adjustment pursuant to Section 4.2 and/or Section 14). If the Offering Periods are terminated prior to expiration, all amounts then credited to Participants accounts that have not been used to purchase
shares of Stock will be returned to the Participants (without interest thereon, except as otherwise required under Applicable Laws, as further set forth in Section 10.7 hereof) as soon as administratively practicable. In addition, an amendment
to the Plan must be approved by the stockholders of the Company within twelve (12) months of the adoption of such amendment if such amendment would authorize the sale of more shares than are then authorized for issuance under the Plan or would
change the definition of the corporations that may be designated by the Board as Participating Companies.
24.2 Notwithstanding the foregoing, in the event that the Board determines that continuation of the Plan
or an Offering would result in unfavorable financial accounting consequences to the Company, the Board may, in its discretion and without the consent of any Participant, including with respect to an Offering Period then in progress:
(a) terminate the Plan or any Offering Period, (b) accelerate the Purchase Date of any Purchase Period or Offering Period, (c) reduce the discount applicable in determining the Purchase Price of any Offering Period, (d) amend the
Plan to conform with the safe harbor definition under the Financial Accounting Standards Board Accounting Standards Codification Topic 718 (or any successor thereto), (e) alter the Purchase Price for any Offering Period or Purchase Period,
(f) reduce the maximum number of shares of Stock that may be purchased in any Offering Period, (g) reduce the maximum percentage of Compensation a Participant may elect to set aside as Contributions or (e) take any combination of the
foregoing actions.
25.
M
ISCELLANEOUS
.
25.1
Governing Law
. The Plan shall be governed by, and construed in accordance with, the laws of
the State of California (except its choice-of-law provisions).
25.2
Severability
. If any
provision of the Plan is or becomes or is deemed to be invalid, illegal, or unenforceable for any reason in any jurisdiction or as to any Participant, such invalidity, illegality or unenforceability shall not affect the remaining parts of the Plan,
and the Plan shall be construed and enforced as to such jurisdiction or Participant as if the invalid, illegal or unenforceable provision had not been included.
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APPENDIX A
FORMS OF
SUBSCRIPTION AGREEMENT
AND
NOTICE OF WITHDRAWAL
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B-13
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SALESFORCE.COM, INC.
2004 EMPLOYEE STOCK PURCHASE PLAN
SUBSCRIPTION
AGREEMENT
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NAME (Please print):
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(Last)
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(First)
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(Middle)
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TM
Original application for the Offering Period
beginning (date):
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TM
Change in payroll deduction rate effective with the pay period beginning (date):
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TM
Stop payroll deductions effective with the pay period beginning
(date):
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I elect to participate in the 2004 Employee Stock Purchase Plan (the
Plan
) of salesforce.com, inc. (the
Company
) and to subscribe to purchase shares of the Companys Stock in accordance with this Subscription Agreement, including the Additional Terms and Conditions of
Participation set forth in an addendum hereto (the
Addendum
), and the Plan.
I authorize payroll deductions of
percent (in whole percentages not less than 2%, unless an election to stop deductions is being made, or more than 15%) of my
Compensation
on each pay day
throughout the
Offering Period
in accordance with the Plan. I understand that these payroll deductions will be accumulated for the purchase of shares of Stock at the applicable purchase price determined in accordance with the Plan. Except as
otherwise provided by the Plan, I will automatically purchase shares on each
Purchase Date
unless I withdraw from the Plan by giving written notice on a form provided by the Company or unless my eligibility or employment terminates.
I understand that I will not be able to increase my contribution percentage above during a Purchase Period or Offering Period, and that I may only
decrease my contribution percentage once per Purchase Period.
I understand that I will automatically participate in each subsequent Offering that
commences immediately after the last day of an Offering in which I am participating until I withdraw from the Plan by giving written notice on a form provided by the Company or my eligibility or employment terminates.
I agree to make adequate provision for the federal, state, local and foreign tax withholding obligations, if any, which arise upon my purchase of shares
under the Plan and/or my disposition of shares. The Company may withhold from my compensation the amount necessary to meet such withholding obligations, or using any other method specified in the Addendum.
I agree that, unless otherwise permitted by the Company, until I dispose of shares I purchase under the Plan, I will hold such shares in the name(s)
entered above (and not in the name of any nominee) until the later of (i) two years after the first day of the Offering Period in which I purchased the shares and (ii) one year after the Purchase Date on which I purchased the shares. This
restriction only applies to the name(s) in which shares are held and does
not
affect my ability to dispose of Plan shares.
I agree that I
will notify the Global Equity Plan Services Group of the Company in writing within 30 days after any sale, gift, transfer or other disposition of any kind prior to the end of the periods referred to in the preceding paragraph (a Disqualifying
Disposition) of any shares I purchased under the Plan. If I do not respond within 30 days of the date of a Disqualifying Disposition Survey delivered to me by certified mail, the Company is authorized to treat my nonresponse as my notice to
the Company of a Disqualifying Disposition and to compute and report to the Internal Revenue Service the ordinary income I must recognize upon such Disqualifying Disposition.
II.
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PARTICIPANT DECLARATION
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Any election I have made on this form revokes all prior elections with
regard to this form.
I am familiar with the provisions of the Plan and agree to participate in the Plan subject to all of its provisions and subject
to the Additional Terms and Conditions of Participation set forth in the Addendum to this Subscription Agreement. I understand that the Board of Directors of the Company reserves the right to terminate the Plan or to amend the Plan and my right to
purchase stock under the Plan to the extent provided by the Plan or the Addendum. I understand that the effectiveness of this Subscription Agreement is dependent upon my eligibility to participate in the Plan.
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Date:
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Signature of Participant
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2017 Proxy Statement
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SALESFORCE.COM, INC.
2004 EMPLOYEE STOCK PURCHASE PLAN
NOTICE OF
WITHDRAWAL
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NAME (Please print):
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(Last)
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(First)
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(Middle)
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I elect to withdraw from the salesforce.com, inc. 2004 Employee Stock Purchase Plan (the
Plan
) and the
Offering which began on (date)
and in which I am participating (the
Current Offering
).
I understand that I am terminating immediately my interest in the Plan and the Current Offering, and that no further payroll deductions will be made
(provided I have given sufficient notice before the next pay day). My payroll deductions not previously used to purchase shares will
not
be used to purchase shares in the Current Offering, but instead will be paid to me as soon as
practicable. I understand that I will not participate in the Plan unless I elect to become a participant in another Offering by filing a new Subscription Agreement with the Company. I understand that I will receive no interest on the amounts paid to
me from my Plan account, and that I may not apply such amounts to any other Offering under the Plan or any other employee stock purchase plan of the Company.
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B-15
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TABLE OF CONTENTS
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Page
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1.
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Establishment, Purpose and Term of Plan
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B-1
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1.1 Establishment
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B-1
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1.2 Purpose
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B-1
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1.3 Term of Plan
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B-1
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2.
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Definitions and Construction
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B-1
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2.1 Definitions
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B-1
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2.2 Construction
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B-3
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3.
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Administration
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B-3
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3.1 Administration by the Board
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B-3
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3.2 Authority of Officers
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B-4
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3.3 Policies and Procedures Established by the Company
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B-4
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3.4 Indemnification
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B-4
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4.
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Shares Subject to Plan
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B-4
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4.1 Maximum Number of Shares Issuable
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B-4
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4.2 Adjustments for Changes in Capital Structure
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B-5
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5.
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Eligibility
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B-5
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5.1 Employees Eligible to Participate
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B-5
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5.2 Exclusion of Certain Stockholders
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B-5
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5.3 Determination by Company
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B-6
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6.
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Offerings
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B-6
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7.
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Participation in the Plan
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B-6
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7.1 Initial Participation
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B-6
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7.2 Continued Participation
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B-6
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8.
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Right to Purchase Shares
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B-6
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8.1 Grant of Purchase Right
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B-6
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8.2 Calendar Year Purchase Limitation
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B-7
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9.
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Purchase Price
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B-7
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10.
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Accumulation of Purchase Price through Payroll Deduction
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B-7
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10.1 Amount of Payroll Deductions
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B-7
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10.2 Commencement of Payroll Deductions
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B-7
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10.3 Election to Change or Stop Contributions
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B-7
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10.4 Alternative Contributions
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B-8
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10.5 Administrative Suspension of Contribution
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B-8
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10.6 Participant Accounts
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B-8
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10.7 No Interest Paid
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B-8
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11.
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Purchase of Shares
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B-8
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11.1 Exercise of Purchase Right
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B-8
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11.2 Pro Rata Allocation of Shares
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B-8
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11.3 Delivery of Certificates
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B-9
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11.4 Return of Cash Balance
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B-9
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11.5 Tax Withholding
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B-9
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11.6 Expiration of Purchase Right
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B-9
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11.7 Provision of Reports and Stockholder Information to
Participants
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B-9
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12.
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Withdrawal from Plan
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B-9
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12.1 Voluntary Withdrawal from the Plan
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B-9
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12.2 Return of Payroll Deductions
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B-9
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13.
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Termination of Employment or Eligibility
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B-10
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14.
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Change in Control
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B-10
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14.1 Definitions
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B-10
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14.2 Effect of Change in Control on Purchase Rights
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B-10
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15.
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Nontransferability of Purchase Rights
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B-10
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16.
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Compliance with Law
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B-10
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B-16
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2017 Proxy Statement
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TABLE OF CONTENTS (CONTINUED)
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Page
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17.
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Rights as a Stockholder and Employee
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B-11
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18.
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Legends
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B-11
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19.
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Notification of Disposition of Shares
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B-11
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20.
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Notices
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B-11
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21.
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Code Section 409A
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B-11
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22.
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Tax Qualification
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B-12
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23.
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Automatic Transfer to Low Price Offering Period
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B-12
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24.
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Amendment or Termination of the Plan
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B-12
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25.
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Miscellaneous
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B-12
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2017 Proxy Statement
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B-17
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www.salesforce.com | facebook /salesforce | Twitter @salesforce
Copyright (c) 2017, salesforce.com, inc. All rights reserved. Salesforce and salesforce.com are registered trademarks of salesforce.com, inc.
Salesforce owns other registered and unregistered trademarks. Other names used herein may be trademarks of their respective owners.
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VOTE BY INTERNET - www.proxyvote.com
Use the Internet to transmit your voting instructions and
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electronic voting instruction form.
ELECTRONIC DELIVERY OF FUTURE PROXY MATERIALS
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electronically via e-mail or the Internet. To sign up for electronic delivery, please follow the instructions above to vote using the Internet and, when prompted, indicate that you agree to receive or access proxy materials electronically in future
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Use any touch-tone telephone to transmit your voting instructions up until 11:59 p.m. Eastern Time the day before the cut-off
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Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge,
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