This excerpt taken from the MLNX DEF 14A filed Apr 9, 2009.
Awards under the 2006 Plan
The 2006 Plan provides that the Committee may grant or issue incentive stock options (ISOs) and non-qualified stock options (NSOs), restricted stock, restricted stock units, stock bonus awards or performance-based awards. Each type of award may be awarded to participants in such amounts and subject to such terms and conditions as determined by the Committee. Each award will be set forth in a separate agreement with the person receiving the award and will indicate the type, terms and conditions of the award.
General Option Provisions. The term of options granted under the 2006 Plan may not exceed ten years. In the case of ISOs that are granted to persons who own more than 10% of the total combined voting power of our company, our subsidiaries or our parent at the time of grant, the term of the ISOs cannot exceed five years.
Unless the terms of the participants option agreement provide otherwise, if a participants service relationship with us or with any of our affiliates terminates for any reason other than for cause, death or disability, the participant may exercise any options vested as of the termination date up to three months from the termination date. Unless the
terms of the participants option agreement provide otherwise, if a participants service relationship with us ceases in the event of death or disability, the participant or participants estate may exercise any options vested as of the termination date for 12 months from the termination date. Unless the terms of the participants option agreement provide otherwise, if a participants service relationship with us or with any of our affiliates terminates for cause, all unvested options granted to such participant will immediately expire as of the termination date. In no event may an option be exercised after its expiration date.
The purchase price of ordinary shares acquired pursuant to the exercise of an option must generally be paid by cash or check, but other forms of legal consideration may be approved by the plan administrator.
The exercise price of an option is determined by the plan administrator at the time of grant. The per share exercise price of an ISO may not be less than 100% of the fair market value per share of the underlying ordinary shares at the time of grant of the ISO. ISOs granted to persons who own more than 10% of the total combined voting power of our company, our subsidiaries or our parent on the grant date must have a per share exercise price of no less than 110% of the fair market value per share of the underlying ordinary shares at the time of grant of the ISO.
General Restricted Stock Award Provisions. Participants who are granted restricted stock awards generally have all of the rights of a shareholder with respect to such shares, but such rights may be limited at the discretion of our Board. Restricted stock awards may be subject to vesting over time or upon achievement of milestones. Any unvested ordinary shares subject to restricted stock awards are generally forfeited upon termination of employment, unless our Board provides otherwise.
General Restricted Stock Unit Awards. Awards of restricted stock units are denominated in unit equivalent of ordinary shares. They are typically awarded to participants without payment of consideration, and are subject to vesting conditions based upon a vesting schedule or performance criteria established by the plan administrator. Unlike restricted stock, the ordinary shares underlying restricted stock unit awards will not be issued until the restricted stock units have vested, and recipients of restricted stock units generally will have no voting or dividend rights prior to the time the vesting conditions are satisfied. On the maturity date, the participant will receive one unrestricted, fully transferable ordinary share for each restricted stock unit not previously forfeited.
Section 102 Options and Shares Holding Period. Section 102 Options, any ordinary shares issued upon the exercise of Section 102 Options and any other ordinary shares that are received subsequently with respect to these options or ordinary shares, including bonus shares, must be issued to a trustee that is nominated by the plan administrator to serve as a trustee in accordance with Section 102 of the Israeli Tax Ordinance. These Section 102 Options and ordinary shares must be held by the trustee for the benefit of the participants for at least two years from the date of grant of the Section 102 Options, and the participant may not sell or otherwise transfer any of the ordinary shares held by the trustee until the holding period has lapsed without triggering adverse tax consequences.
Stock Bonus Awards. Stock bonus awards may be awarded to participants in such amounts and subject to such terms and conditions as determined by the Committee. The Committee may establish the exercise or purchase price, if any, of any stock bonus award but such price will not be less than the par value of an ordinary share on the date of grant. The Committee may determine that the participants may be awarded stock bonus awards in consideration for past services actually rendered to us for our benefit. A stock bonus award will only be exercisable or payable while the participant is an employee or consultant of us, but the Committee in its sole and absolute discretion may provide that a stock bonus award may be exercised or paid subsequent to a termination of employment or service or following a change of control of us or because of the participants retirement, death or disability or otherwise. All stock bonus awards shall be subject to the additional terms and conditions as determined by the Committee and as evidenced by an award agreement.
Performance-Based Awards. Performance-based awards include awards other than options which comply with U.S. Internal Revenue Service requirements under Section 162(m) of the U.S. Internal Revenue Code for performance-based compensation. They may provide for payments based upon net earnings (either before or after interest, taxes, depreciation and amortization), economic value-added, sales or revenue, net income (either before or after taxes), operating earnings, cash flow (including, but not limited to, operating cash flow and free cash flow), cash flow return on capital, return on net assets, return on stockholders equity, return on assets, return on capital, stockholder returns, return on sales, gross or net profit margin, productivity, expense, margins, operating efficiency,
customer satisfaction, working capital, earnings per share, price per share, and market share, any of which may be measured either in absolute terms or as compared to any incremental increase or as compared to results of a peer group, in each case over a period or periods determined by the plan administrator.