This excerpt taken from the MRVL DEF 14A filed Sep 14, 2007.
Each Eligible Outside Director will be automatically granted annually an Option to purchase 12,000 shares (the Annual Option Award). The Annual Option Award will be granted on the date of each annual general meeting of the companys shareholders (the Annual Meeting), beginning in 2007, provided that as of each such date, the Outside Director will have served on the board of directors for at least the preceding six months. It is the current intent of the board of directors to designate each incumbent Outside Director as an Eligible Outside Director when such director has, or will soon have, two or less unvested awards under the 1997 Directors Stock Option Plan. As such, our director Arturo Krueger has been designated as an Eligible Outside Director and would be eligible to receive an Annual Option Award upon approval of the 2007 Director Plan by the companys shareholders at the 2007 annual general meeting. It is anticipated that our directors Kuo Wei (Herbert) Chang and Dr. Paul R. Gray would be designated as Eligible Outside Directors in connection with the Annual Option Awards to be granted at the companys annual general meeting to occur in 2009.
Each Annual Option Award will vest and become exercisable as to 100% of the shares subject to the Annual Option Award on the one year anniversary of the date of grant, provided that the Outside Director
continues to serve as an employee, director or consultant through the relevant vesting date. Each Annual Option Award will have a term of 10 years.
Terms and Conditions of Options
The Administrator may add or change automatic Awards to include additional or different Awards of Options in such amounts as the Administrator, in its sole discretion, may determine. All Options awarded under the 2007 Director Plan (including those granted pursuant to the Initial Option Award and the Annual Option Award), will have a per share exercise price equal to one hundred percent (100%) of the fair market value per share of the companys common shares on the date of grant. As of September 6, 2007, the fair market value of one of our common shares was $16.41. An Option granted under the 2007 Director Plan will expire upon the date determined by the Administrator; provided, however, that the term of an Option may not exceed 10 years.
After a termination of service with the company, other than a termination due to the participants death or disability, the participant may exercise the vested portion of his or her Option for a period of six months following such termination. In no event may an Option be exercised later than the expiration of its term.
Awards of restricted stock are rights to acquire or purchase the companys common shares, which vest in accordance with the terms and conditions established by the Administrator in its sole discretion. Currently, Outside Directors will not receive Awards of restricted stock under the 2007 Director Plan. The Administrator may change or add automatic Awards granted pursuant to the 2007 Director Plan to include awards of restricted stock in such amounts as the Administrator may determine in its sole discretion. Each Award of restricted stock will be evidenced by an Award agreement that will specify the vesting criteria, the number of shares granted, and such other terms and conditions as the Administrator, in its sole discretion, will determine. The Award agreement will generally grant the company a right to repurchase or reacquire the shares upon the termination of the participants service with the company.
Restricted Stock Units
Awards of restricted stock units result in a payment to a participant only if the vesting criterion the Administrator establishes is satisfied. The Administrator may change or add automatic Awards granted pursuant to the 2007 Director Plan to include additional or different awards of restricted stock units in such amounts as the Administrator may determine in its sole discretion. Upon satisfying the applicable vesting criteria, the participant will be entitled to the payout specified in the Award agreement. The Administrator may set vesting criteria based upon the achievement of company-wide, business unit, or individual goals, including, but not limited to, continued employment or status as a service provider, or any other basis determined by the Administrator in its sole discretion. The Administrator, in its sole discretion, may pay earned restricted stock units in cash, shares, or a combination thereof. On the date set forth in the Award agreement, all unearned restricted stock units will be forfeited to the company.
Stock Appreciation Rights
The Administrator will be able to grant stock appreciation rights, which are the rights to receive the appreciation in fair market value of common shares between the exercise date and the date of grant. Currently, Outside Directors will not receive Awards of stock appreciation rights under the 2007 Director Plan. The Administrator may change or add automatic Awards granted pursuant to the 2007 Director Plan to include awards of stock appreciation rights in such amounts as the Administrator may determine in its sole discretion. The company can pay the appreciation in cash, shares, or combination thereof. Stock
appreciation rights will become exercisable at the times and on the terms established by the Administrator, subject to the terms of the 2007 Director Plan. The Administrator, subject to the terms of the 2007 Director Plan, will have complete discretion to determine the terms and conditions of stock appreciation rights granted under the 2007 Director Plan; provided, however, that the exercise price may not be less than 100% of the fair market value of a share on the date of grant.
Performance Units and Performance Shares
The Administrator may, in its discretion, grant performance units and performance shares entitling the participant to receive a settlement upon vesting of cash, shares, or a combination thereof. A performance unit will have an initial value that is established by the Administrator on or before the date of grant. A performance share will have an initial value equal to the fair market value of a share on the grant date. The Administrator will set performance objectives or other vesting provisions (including, continued status as a service provider) in its discretion which, depending on the extent to which they are met, will determine the number or value of performance units/shares that will be paid out to participants.
Acceleration of Awards
If the participants status as an employee, director or consultant terminates as a result of the participants death or disability, outstanding Awards issued pursuant to the 2007 Director Plan will become fully vested as of the date of such termination.
Transferability of Awards
Awards granted under the 2007 Director Plan 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.
Change of Control
In the event of a change of control of the company, each outstanding Award will be treated as the Administrator determines, including, 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; provided, however, that in all cases, upon a change of control, the participant will fully vest in and have the right to exercise all of his or her outstanding options or stock appreciation rights, including shares as to which such Awards would not otherwise be vested or exercisable, all restrictions on restricted stock, restricted stock units and any related dividend equivalents will lapse, and, with respect to Awards with performance-based vesting, all performance goals or other vesting criteria will be deemed achieved at target levels and all other terms and conditions met. The Administrator will not be required to treat all Awards similarly in the transaction.
Amendment and Termination of the 2007 Director Plan
The Administrator will have the authority to amend, alter, suspend or terminate the 2007 Director Plan, except that shareholder approval will be required for any amendment to the 2007 Director Plan to the extent required by any applicable laws. No amendment, alteration, suspension or termination of the 2007 Director Plan will impair the rights of any participant, unless mutually agreed otherwise between the participant and the Administrator and which agreement must be in writing and signed by the participant and the company. The Director Plan will terminate in October 2017, unless the board of directors terminates it sooner.