Brocade’s Compensation Committee of the board of directors have adopted the 2013 Inducement Award Plan. The plan reserves 2,400,000 shares of common stock, subject to adjustment for stock dividends, stock splits, or other changes in the common stock or capital structure, solely for the granting of inducement stock options, restricted stock units and other awards. The plan was adopted by the Board of Directors in accordance with NASDAQ Rule 5635(c)(4).
Under the plan, Brocade has granted options to purchase 2,400,000 shares of its common stock to Lloyd Carney in connection with his appointment as CEO. The grant was made as of January 16, 2013 at an exercise price of $5.66 per share, which was the closing price of Brocade’s common stock on the date of grant. The options have a term of 7 years and will vest as to 25% of the shares on the first anniversary of Mr. Carney’s start date and 1/48 of the shares will vest each month thereafter, subject to Mr. Carney’s continued employment with the Company.
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