Netgear 2012 Annual Report Download - page 93

Table of Contents NETGEAR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
Note 11. Employee Benefit Plans
2000 Stock Option Plan
In April 2000, the Company adopted the 2000 Stock Option Plan (the “2000 Plan”).
The 2000 Plan provides for the granting of stock options to
employees and consultants of the Company. Options granted under the 2000 Plan may be either incentive stock options (“ISOs”)
or nonqualified
stock options (“NSOs”).
ISOs may be granted only to Company employees (including officers and directors who are also employees). NSOs may be
granted to Company employees, directors and consultants. A total of 7,350,000
shares of Common Stock have been reserved for issuance under the
2000 Plan.
Options under the 2000 Plan may be granted for periods of up to ten years
, provided, however, that (i) the exercise price of an ISO and NSO
shall not be less than the estimated fair value of the underlying stock on the date of grant and (ii) the exercise price of an ISO and NSO granted to a
10% shareholder shall not be less than 110%
of the estimated fair value of the underlying stock on the date of grant. To date, options granted
generally vest over four years .
As discussed below, in April 2003, all remaining shares reserved but not issued under the 2000 Plan were transferred to the 2003 Stock Plan.
2003 Stock Plan
In April 2003, the Company adopted the 2003 Stock Plan (the “2003 Plan”).
The 2003 Plan provides for the granting of stock options to
employees and consultants of the Company. Options granted under the 2003 Plan may be either ISOs or NSOs. ISOs may be granted only to
Company employees (including officers and directors who are also employees). NSOs may be granted to Company employees, directors and
consultants. The Company has reserved 750,000
shares of Common Stock plus any shares which were reserved but not issued under the 2000 Plan as
of the date of the approval of the 2003 Plan. The number of shares which were reserved but not issued under the 2000 Plan that were transferred to
the Company’s 2003 Plan were 615,290 , which when combined with the shares reserved for the Company’s 2003 Plan total 1,365,290
shares
reserved under the Company’
s 2003 Plan as of the date of transfer. Any options cancelled under either the 2000 Plan or the 2003 Plan are returned to
the pool available for grant. As of December 31, 2012 , 55,513 shares were reserved for future grants under the Company’s 2003 Plan.
Options under the 2003 Plan may be granted for periods of up to ten years
, provided, however, that (i) the exercise price of an ISO and NSO
shall not be less than the estimated fair value of the underlying stock on the date of grant and (ii) the exercise price of an ISO and NSO granted to a
10% shareholder shall not be less than 110%
of the estimated fair value of the underlying stock on the date of grant. To date, options granted
generally vest over four years , with the first tranche vesting at the end of 12 months
and the remaining shares underlying the option vesting monthly
over the remaining three years
. In fiscal 2005, certain options granted under the 2003 Plan immediately vested and were exercisable on the date of
grant, and the shares underlying such options were subject to a resale restriction which expires at a rate of 25% per year.
2006 Long Term Incentive Plan
In April 2006, the Company adopted the 2006 Long Term Incentive Plan (the “2006 Plan”), which was approved by the Company’
s
stockholders at the 2006 Annual Meeting of Stockholders on May 23, 2006. The 2006 Plan provides for the granting of stock options, stock
appreciation rights, restricted stock, performance awards and other stock awards, to eligible directors, employees and consultants of the Company.
Upon the adoption of the 2006 Plan, the Company reserved 2,500,000
shares of common stock for issuance under the 2006 Plan. In June 2008, the
Company adopted amendments to the 2006 Plan which increased the number of shares of the Company’
s common stock that may be issued under the
2006 plan by an additional 2,500,000
shares. In July 2010, the Company adopted amendments to the 2006 Plan which increased the number of shares
of the Company’s common stock that may be issued under the 2006 plan by an additional 1,500,000
shares. In June 2012, the Company adopted
amendments to the 2006 Plan which increased the number of shares of the Company’
s common stock that may be issued under the 2006 plan by an
additional 3,000,000
shares. In addition, RSUs granted under the 2006 Plan on or after June 6, 2012 are counted against shares authorized under the
plan as 1.58 shares of common stock for each share subject to such award. As of December 31, 2012 , 2,695,054
shares were reserved for future
grants under the 2006 Plan.
Options granted under the 2006 Plan may be either ISOs or NSOs. ISOs may be granted only to Company employees (including officers and
directors who are also employees). NSOs may be granted to Company employees, directors and consultants. Options may be granted for periods of
up to ten years, provided, however, that (i) the exercise price of an ISO and NSO shall not be less than the estimated fair value of the underlying
stock on the date of grant and (ii) the exercise price of an ISO and NSO
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