CY » Topics » Adjustments to the 1994 and 1999 Stock Plans and Employee Qualified Stock Purchase Plan

This excerpt taken from the CY 8-K filed Aug 7, 2008.

Adjustments to the 1994 and 1999 Stock Plans and Employee Qualified Stock Purchase Plan

Consistent with and similar to the provisions in the Company’s 1994 and 1999 Stock Plans (together, the “Plans”) providing for automatic adjustment of service provider equity awards and share pools pursuant to a Company stock split or similar change in capitalization effected without receipt of consideration by the Company, the Board approved amendments to the Plans such that, immediately following the Proposed Spin-Off, the number of authorized but unissued shares reserved for issuance under each Plan, annual grant limits and automatic option grants, including automatic grants to Board members, will be proportionately increased to reflect the Proposed Spin-Off. The Board also approved amendments to outstanding option awards under the Plans designed to preserve the intrinsic value of outstanding options under the Plans to reflect the Proposed Spin-Off. The Board also approved adjustments to the number of shares underlying restricted stock unit (“RSU”) awards, including performance based RSU awards, and the number of shares underlying restricted stock to reflect the Proposed Spin-Off. In addition, all outstanding options under the Plans will be amended to permit, subject to timing limitations and at the Company’s discretion, both net exercise (that is, a portion of the shares subject to the option is surrendered as payment of the aggregate exercise price) and, following the record date for the Proposed Spin-Off, early exercise (that is, exercise of unvested shares subject to a stock restriction agreement).

The Board also approved certain adjustments with respect to its Employee Qualified Stock Purchase Plan (the “ESPP”) to offset the decrease in the Company’s common stock price resulting from the Proposed Spin-Off. These changes include a proportionate adjustment in the offering date price per share of Company common stock and maximum number of shares an ESPP participant may purchase.

The Board approved a limited loan program to qualified employees (which will not include officers and directors) that would assist holders of options to pay the exercise price for options to convert unvested options into unvested restricted shares. The program details will be finalized over the next few weeks and the Company may use a third-party financial institution in connection with the program. The loan program is expected to be limited to $50 million in aggregate loans and, because the loan proceeds will be used to fund payment to the Company for option exercises, is not expected to require any cash outlays on the part of the Company.

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