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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 participant’s option agreement
provide otherwise, if a participant’s 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
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terms of the participant’s option agreement provide
otherwise, if a participant’s service relationship with us
ceases in the event of death or disability, the participant or
participant’s estate may exercise any options vested as of
the termination date for 12 months from the termination
date. Unless the terms of the participant’s option
agreement provide otherwise, if a participant’s 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
participant’s 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,
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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.
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