Initial Public Offering (IPO): Registration Statement (General Form) — Form S-1
Filing Table of Contents
Document/Exhibit Description Pages Size
1: S-1 Cynosure, Inc. Form S-1 HTML 1.11M
18: COVER ¶ Comment-Response or Cover Letter to the SEC HTML 5K
2: EX-3.1 EX-3.1 Certificate of Incorporation of the 21 58K
Registrant, as Amended
3: EX-3.2 EX-3.2 Form of Restated Certificate of 19 77K
Incorporation of the Registrant
4: EX-3.3 EX-3.3 Bylaws of the Registrant 16 53K
5: EX-3.4 EX-3.4 Form of Amended and Restated Bylaws of the 21 100K
Registrant
6: EX-10.1 EX-10.1 1992 Stock Option Plan 12 43K
15: EX-10.10 EX-10.10 Lease, Dated January 31, 2005 46 244K
7: EX-10.2 EX-10.2 2004 Stock Option Plan, as Amended 11 56K
8: EX-10.3 EX-10.3 2005 Stock Incentive Plan 13 65K
9: EX-10.4 EX-10.4 Employment Agreement, Dated September 2003 11 40K
10: EX-10.5 EX-10.5 Employment Agreement, Dated January 1, 9 38K
2003
11: EX-10.6 EX-10.6 Employment Agreement, Dated September 2003 10 38K
12: EX-10.7 EX-10.7 Exclusive Distribution Agreement 14 46K
13: EX-10.8 EX-10.8 Exclusive Distribution Agreement 16 50K
14: EX-10.9 EX-10.9 Promissory Note, Dated October 1, 2004 3 20K
16: EX-21.1 EX-21.1 Subsidiaries of the Registrant 1 6K
17: EX-23.1 EX-23.1 Consent of Ernst & Young LLP 1 7K
‘EX-10.3’ — EX-10.3 2005 Stock Incentive Plan
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EXHIBIT 10.3
CYNOSURE, INC.
2005 STOCK INCENTIVE PLAN
1. Purpose
The purpose of this 2005 Stock Incentive Plan (the "Plan") of Cynosure,
Inc., a Delaware corporation (the "Company"), is to advance the interests of the
Company's stockholders by enhancing the Company's ability to attract, retain and
motivate persons who are expected to make important contributions to the Company
and by providing such persons with equity ownership opportunities and
performance-based incentives that are intended to align their interests with
those of the Company's stockholders. Except where the context otherwise
requires, the term "Company" shall include any of the Company's present or
future parent or subsidiary corporations as defined in Sections 424(e) or (f) of
the Internal Revenue Code of 1986, as amended, and any regulations promulgated
thereunder (the "Code") and any other business venture (including, without
limitation, joint venture or limited liability company) in which the Company has
a controlling interest, as determined by the Board of Directors of the Company
(the "Board").
2. Eligibility
All of the Company's employees, officers, directors, consultants and
advisors are eligible to receive options, stock appreciation rights, restricted
stock, restricted stock units and other stock-based awards (each, an "Award")
under the Plan. Each person who receives an Award under the Plan is deemed a
"Participant".
3. Administration and Delegation
(a) Administration by Board of Directors. The Plan will be administered
by the Board. The Board shall have authority to grant Awards and to adopt, amend
and repeal such administrative rules, guidelines and practices relating to the
Plan as it shall deem advisable. The Board may correct any defect, supply any
omission or reconcile any inconsistency in the Plan or any Award in the manner
and to the extent it shall deem expedient to carry the Plan into effect and it
shall be the sole and final judge of such expediency. All decisions by the Board
shall be made in the Board's sole discretion and shall be final and binding on
all persons having or claiming any interest in the Plan or in any Award. No
director or person acting pursuant to the authority delegated by the Board shall
be liable for any action or determination relating to or under the Plan made in
good faith.
(b) Appointment of Committees. To the extent permitted by applicable
law, the Board may delegate any or all of its powers under the Plan to one or
more committees or subcommittees of the Board (a "Committee"). All references in
the Plan to the "Board" shall mean the Board or a Committee of the Board or the
officers referred to in Section 3(c) to the extent that the Board's powers or
authority under the Plan have been delegated to such Committee or officers.
(c) Delegation to Officers. To the extent permitted by applicable law,
the Board may delegate to one or more officers of the Company the power to grant
Awards to employees or
officers of the Company or any of its present or future subsidiary corporations
and to exercise such other powers under the Plan as the Board may determine,
provided that the Board shall fix the terms of the Awards to be granted by such
officers (including the exercise price of such Awards, which may include a
formula by which the exercise price will be determined) and the maximum number
of shares subject to Awards that the officers may grant; provided further,
however, that no officer shall be authorized to grant Awards to any "executive
officer" of the Company (as defined by Rule 3b-7 under the Securities Exchange
Act of 1934, as amended (the "Exchange Act")) or to any "officer" of the Company
(as defined by Rule 16a-1 under the Exchange Act).
4. Stock Available for Awards
(a) Number of Shares. Subject to adjustment under Section 10, Awards
may be made under the Plan for up to the number of shares of Class A Common
Stock, par value 0.001 per share, of the Company (the "Class A Common Stock")
that is equal to the sum of:
(1) 500,000 shares of Class A Common Stock; plus
(2) such additional number of shares of Class A Common Stock (up to
100,000 shares) as is equal to the sum of (x) the number of shares of Class B
Common Stock reserved for issuance under the Company's 2004 Stock Option Plan
(the "Existing Plan") that remain available for grant under the Existing Plan
immediately prior to the closing of the Company's initial public offering and
(y) the number of shares of Class B Common Stock subject to awards granted under
the Existing Plan which awards expire, terminate or are otherwise surrendered,
canceled, forfeited or repurchased by the Company at their original issuance
price pursuant to a contractual repurchase right (subject, however, in the case
of Incentive Stock Options (as hereinafter defined) to any limitations of the
Code); plus
(3) an annual increase to be added on the first day of each of the
Company's fiscal years during the period beginning in fiscal year 2006 and
ending on the second day of fiscal year 2015 equal to the lesser of (i) 300,000
shares of Class A Common Stock, (ii) 2.5% of the aggregate number of shares of
Class A Common Stock and Class B Common Stock, par value 0.001 per share, of the
Company (the "Class B Common Stock", and together with the Class A Common Stock,
the "Common Stock") outstanding on such date or (iii) an amount determined by
the Board.
Notwithstanding clause (3) above, in no event shall the number of
shares available under this Plan be increased as set forth in clause (3) to the
extent such increase, in addition to any other increases proposed by the Board
in the number of shares available for issuance under all other employee or
director stock plans, would result in the total number of shares then available
for issuance under all employee and director stock plans exceeding 25% of the
outstanding shares of the Company on the first day of the applicable fiscal
year.
If any Award expires or is terminated, surrendered or canceled without
having been fully exercised or is forfeited in whole or in part (including as
the result of shares of Class A Common Stock subject to such Award being
repurchased by the Company at the original issuance price pursuant to a
contractual repurchase right) or results in any Class A Common Stock not being
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issued, the unused Class A Common Stock covered by such Award shall again be
available for the grant of Awards under the Plan. Further, shares of Class A
Common Stock tendered to the Company by a Participant to exercise an Award shall
be added to the number of shares of Class A Common Stock available for the grant
of Awards under the Plan. However, in the case of Incentive Stock Options (as
hereinafter defined), the foregoing provisions shall be subject to any
limitations under the Code. Shares issued under the Plan may consist in whole or
in part of authorized but unissued shares or treasury shares.
(b) Per-Participant Limit. Subject to adjustment under Section 10, for
Awards granted after the Class A Common Stock is registered under the Securities
Exchange Act of 1934 (the "Exchange Act"), the maximum number of shares of Class
A Common Stock with respect to which Awards may be granted to any Participant
under the Plan shall be 250,000 per calendar year. The per-Participant limit
described in this Section 4(b) shall be construed and applied consistently with
Section 162(m) of the Code or any successor provision thereto, and the
regulations thereunder ("Section 162(m)").
5. Stock Options
(a) General. The Board may grant options to purchase Class A Common
Stock (each, an "Option") and determine the number of shares of Class A Common
Stock to be covered by each Option, the exercise price of each Option and the
conditions and limitations applicable to the exercise of each Option, including
conditions relating to applicable federal or state securities laws, as it
considers necessary or advisable. An Option which is not intended to be an
Incentive Stock Option (as hereinafter defined) shall be designated a
"Nonstatutory Stock Option".
(b) Incentive Stock Options. An Option that the Board intends to be an
"incentive stock option" as defined in Section 422 of the Code (an "Incentive
Stock Option") shall only be granted to employees of the Company, any of the
Company's present or future parent or subsidiary corporations as defined in
Sections 424(e) or (f) of the Code, and any other entities the employees of
which are eligible to receive Incentive Stock Options under the Code, and shall
be subject to and shall be construed consistently with the requirements of
Section 422 of the Code. The Company shall have no liability to a Participant,
or any other party, if an Option (or any part thereof) that is intended to be an
Incentive Stock Option is not an Incentive Stock Option or for any action taken
by the Board pursuant to Section 11(f), including without limitation the
conversion of an Incentive Stock Option to a Nonstatutory Stock Option.
(c) Exercise Price. The Board shall establish the exercise price of
each Option and specify such exercise price in the applicable option agreement.
(d) Duration of Options. Each Option shall be exercisable at such times
and subject to such terms and conditions as the Board may specify in the
applicable option agreement.
(e) Exercise of Option. Options may be exercised by delivery to the
Company of a written notice of exercise signed by the proper person or by any
other form of notice (including electronic notice) approved by the Board
together with payment in full as specified in Section 5(f) for the number of
shares for which the Option is exercised. Shares of Class A Common
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Stock subject to the Option will be delivered by the Company following exercise
either as soon as practicable or, subject to such conditions as the Board shall
specify, on a deferred basis (with the Company's obligation to be evidenced by
an instrument providing for future delivery of the deferred shares at the time
or times specified by the Board).
(f) Payment Upon Exercise. Class A Common Stock purchased upon the
exercise of an Option granted under the Plan shall be paid for as follows:
(1) in cash or by check, payable to the order of the Company;
(2) except as the Board may otherwise provide in an option
agreement, by (i) delivery of an irrevocable and unconditional undertaking by a
creditworthy broker to deliver promptly to the Company sufficient funds to pay
the exercise price and any required tax withholding or (ii) delivery by the
Participant to the Company of a copy of irrevocable and unconditional
instructions to a creditworthy broker to deliver promptly to the Company cash or
a check sufficient to pay the exercise price and any required tax withholding;
(3) when the Class A Common Stock is registered under the Exchange
Act, by delivery of shares of Class A Common Stock owned by the Participant
valued at their fair market value as determined by (or in a manner approved by)
the Board ("Fair Market Value"), provided (i) such method of payment is then
permitted under applicable law, (ii) such Class A Common Stock, if acquired
directly from the Company, was owned by the Participant for such minimum period
of time, if any, as may be established by the Board in its discretion and (iii)
such Class A Common Stock is not subject to any repurchase, forfeiture,
unfulfilled vesting or other similar requirements;
(4) to the extent permitted by applicable law and by the Board, by
(i) delivery of a promissory note of the Participant to the Company on terms
determined by the Board, or (ii) payment of such other lawful consideration as
the Board may determine; or
(5) by any combination of the above permitted forms of payment.
(g) Substitute Options. In connection with a merger or consolidation of
an entity with the Company or the acquisition by the Company of property or
stock of an entity, the Board may grant Options in substitution for any options
or other stock or stock-based awards granted by such entity or an affiliate
thereof. Substitute Options may be granted on such terms as the Board deems
appropriate in the circumstances, notwithstanding any limitations on Options
contained in the other sections of this Section 5 or in Section 2. Substitute
Options shall not count against the overall share limit set forth in Section
4(a), except as may be required by reason of Section 422 and related provisions
of the Code.
(h) Repricing of Options. The Board may, without stockholder approval,
amend any outstanding Option granted under the Plan to provide an exercise price
per share that is lower than the then-current exercise price per share of such
outstanding Option. The Board may also, without stockholder approval, cancel any
outstanding option (whether or not granted under the Plan) and grant in
substitution therefor new Awards under the Plan covering the same or a different
number of shares of Class A Common Stock and having an exercise price per share
lower than the then-current exercise price per share of the cancelled option.
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6. Restricted Stock; Restricted Stock Units.
(a) General. The Board may grant Awards entitling recipients to acquire
shares of Class A Common Stock ("Restricted Stock"), subject to the right of the
Company to repurchase all or part of such shares at their issue price or other
stated or formula price (or to require forfeiture of such shares if issued at no
cost) from the recipient in the event that conditions specified by the Board in
the applicable Award are not satisfied prior to the end of the applicable
restriction period or periods established by the Board for such Award. Instead
of granting Awards for Restricted Stock, the Board may grant Awards entitling
the recipient to receive shares of Class A Common Stock to be delivered at the
time such shares of Class A Common Stock vest ("Restricted Stock Units")
(Restricted Stock and Restricted Stock Units are each referred to herein as a
"Restricted Stock Award").
(b) Terms and Conditions. The Board shall determine the terms and
conditions of a Restricted Stock Award, including the conditions for repurchase
(or forfeiture) and the issue price, if any.
(c) Stock Certificates. Any stock certificates issued in respect of a
Restricted Stock Award shall be registered in the name of the Participant and,
unless otherwise determined by the Board, deposited by the Participant, together
with a stock power endorsed in blank, with the Company (or its designee). At the
expiration of the applicable restriction periods, the Company (or such designee)
shall deliver the certificates no longer subject to such restrictions to the
Participant or if the Participant has died, to the beneficiary designated, in a
manner determined by the Board, by a Participant to receive amounts due or
exercise rights of the Participant in the event of the Participant's death (the
"Designated Beneficiary"). In the absence of an effective designation by a
Participant, "Designated Beneficiary" shall mean the Participant's estate.
7. Other Stock-Based Awards
Other Awards of shares of Class A Common Stock, and other Awards that
are valued in whole or in part by reference to, or are otherwise based on,
shares of Class A Common Stock or other property, may be granted hereunder to
Participants ("Other Stock Unit Awards"), including without limitation Awards
entitling recipients to receive shares of Class A Common Stock to be delivered
in the future. Such Other Stock Unit Awards shall also be available as a form of
payment in the settlement of other Awards granted under the Plan or as payment
in lieu of compensation to which a Participant is otherwise entitled. Other
Stock Unit Awards may be paid in shares of Class A Common Stock or cash, as the
Board shall determine. Subject to the provisions of the Plan, the Board shall
determine the conditions of each Other Stock Unit Award, including any purchase
price applicable thereto.
8. Adjustments for Changes in Class A Common Stock and Certain Other Events.
(a) Changes in Capitalization. In the event of any stock split, reverse
stock split, stock dividend, recapitalization, combination of shares,
reclassification of shares, spin-off or other similar change in capitalization
or event, or any distribution to holders of Class A Common Stock other than an
ordinary cash dividend, (i) the number and class of securities available under
this Plan, (ii) the per-Participant limit set forth in Section 4(b), (iii) the
number and class of
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securities and exercise price per share of each outstanding Option and each
Option issuable under Section 6, (iv) the share- and per-share provisions of
each Stock Appreciation Right, (v) the repurchase price per share subject to
each outstanding Restricted Stock Award, and (vi) the share- and
per-share-related provisions of each outstanding Other Stock Unit Award, shall
be appropriately adjusted by the Company (or substituted Awards may be made, if
applicable) to the extent determined by the Board.
(b) Reorganization and Change in Control Events
(1) Definitions
(a) A "Reorganization Event" shall mean:
(i) any merger or consolidation of the
Company with or into another entity
as a result of which all of the
Common Stock of the Company is
converted into or exchanged for the
right to receive cash, securities or
other property or is cancelled;
(ii) any exchange of all of the Common
Stock of the Company for cash,
securities or other property
pursuant to a share exchange
transaction; or
(iii) any liquidation or dissolution of
the Company.
(b) A "Change in Control Event" shall mean:
(i) the acquisition by an individual,
entity or group (within the meaning
of Section 13(d)(3) or 14(d)(2) of
the Exchange Act) (a "Person") of
beneficial ownership of any capital
stock of the Company if, after such
acquisition, such Person
beneficially owns (within the
meaning of Rule 13d-3 promulgated
under the Exchange Act) 50% or more
of either (x) the aggregate number
of shares of Common Stock
then-outstanding (the "Outstanding
Company Common Stock") or (y) the
combined voting power of the
then-outstanding securities of the
Company entitled to vote generally
in the election of directors
(excluding, prior to the "Operative
Date" (as defined in the Company's
Certificate of Incorporation),
"Class B Directors" (as defined in
the Company's Certificate of
Incorporation)) (the "Outstanding
Company Voting Securities");
provided, however, that for
purposes of this subsection (i),
the following acquisitions shall
not constitute a Change in Control
Event: (A) any acquisition directly
from the Company (excluding an
acquisition pursuant to the
exercise, conversion or exchange of
any security exercisable for,
convertible into or exchangeable
for common stock or voting
securities of the Company, unless
the Person exercising, converting or
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exchanging such security
acquired such security directly
from the Company or an underwriter
or agent of the Company), (B) any
acquisition by any employee benefit
plan (or related trust) sponsored
or maintained by the Company or any
corporation controlled by the
Company, or (C) any acquisition by
any corporation pursuant to a
Business Combination (as defined
below) which complies with clauses
(x) and (y) of subsection (iii) of
this definition; or
(ii) such time as the Continuing
Directors (as defined below) do not
constitute a majority of the Board
(or, if applicable, the Board of
Directors of a successor
corporation to the Company), where
the term "Continuing Director"
means at any date a member of the
Board (x) who was a member of the
Board on the date of the initial
adoption of this Plan by the Board
or (y) who was nominated or elected
subsequent to such date by at least
a majority of the directors who
were Continuing Directors at the
time of such nomination or election
or whose election to the Board was
recommended or endorsed by at least
a majority of the directors who
were Continuing Directors at the
time of such nomination or
election; provided, however, that
there shall be excluded from this
clause (y) any individual whose
initial assumption of office
occurred as a result of an actual
or threatened election contest with
respect to the election or removal
of directors or other actual or
threatened solicitation of proxies
or consents, by or on behalf of a
person other than the Board; or
(iii) the consummation of a merger,
consolidation, reorganization,
recapitalization or share exchange
involving the Company or a sale or
other disposition of all or
substantially all of the assets of the
Company (a "Business Combination"),
unless, immediately following such
Business Combination, each of the
following two conditions is satisfied:
(x) all or substantially all of the
individuals and entities who were the
beneficial owners of the Outstanding
Company Common Stock and Outstanding
Company Voting Securities immediately
prior to such Business Combination
beneficially own, directly or
indirectly, more than 50% of the
then-outstanding shares of common stock
and the combined voting power of the
then-outstanding securities entitled to
vote generally in the election of
directors (excluding, prior to the
Operative Date, Class B Directors),
respectively, of the resulting or
acquiring corporation in such Business
Combination
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(which shall include, without
limitation, a corporation which as a
result of such transaction owns the
Company or substantially all of the
Company's assets either directly or
through one or more subsidiaries)
(such resulting or acquiring
corporation is referred to herein
as the "Acquiring Corporation") in
substantially the same proportions
as their ownership of the
Outstanding Company Common Stock
and Outstanding Company Voting
Securities, respectively,
immediately prior to such Business
Combination and (y) no Person
(excluding any employee benefit
plan (or related trust) maintained
or sponsored by the Company or by
the Acquiring Corporation)
beneficially owns, directly or
indirectly, 50% or more of the
then-outstanding shares of common
stock of the Acquiring Corporation,
or of the combined voting power of
the then-outstanding securities of
such corporation entitled to vote
generally in the election of
directors (excluding, prior to the
Operative Date, Class B Directors)
(except to the extent that such
ownership existed prior to the
Business Combination); or
(iv) the liquidation or dissolution of
the Company.
(c) "Good Reason" shall mean any significant
diminution in the Participant's title,
authority, or responsibilities from and after
such Reorganization Event or Change in
Control Event, as the case may be, or any
reduction in the annual cash compensation
payable to the Participant from and after
such Reorganization Event or Change in
Control Event, as the case may be, or the
relocation of the place of business at which
the Participant is principally located to a
location that is greater than 50 miles from
its location immediately prior to such
Reorganization Event or Change in Control
Event.
(d) "Cause" shall mean any (i) willful failure by
the Participant, which failure is not cured
within 30 days of written notice to the
Participant from the Company, to perform his
or her material responsibilities to the
Company, (ii) willful misconduct by the
Participant which affects the business
reputation of the Company, (iii) material
breach by the Participant of any employment,
confidentiality, non-competition or
non-solicitation agreement with the Company,
(iv) conviction or plea of nolo contendere
(no contest) by the Participant to a felony,
or (v) commission by the Participant of any
act involving fraud, theft or dishonesty with
respect to the Company's business or
affairs.. The Participant shall be considered
to have been discharged for "Cause" if the
Company
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determines, within 30 days after the
Participant's resignation, that discharge for
Cause was warranted.
(2) Effect on Options
(a) Reorganization Event. Upon the occurrence of
a Reorganization Event (regardless of whether
such event also constitutes a Change in
Control Event), or the execution by the
Company of any agreement with respect to a
Reorganization Event (regardless of whether
such event will result in a Change in Control
Event), the Board shall provide that all
outstanding Options shall be assumed, or
equivalent options shall be substituted, by
the acquiring or succeeding corporation (or
an affiliate thereof); provided, however,
that if such Reorganization Event also
constitutes a Change in Control Event, except
to the extent specifically provided to the
contrary in the instrument evidencing any
Option or any other agreement between a
Participant and the Company, such assumed or
substituted options shall become immediately
exercisable in full if, on or prior to the
date that is eighteen months after the date
of the consummation of the Reorganization
Event, the Participant's employment with the
Company or the acquiring or succeeding
corporation is terminated for Good Reason by
the Participant or is terminated without
Cause by the Company or the acquiring or
succeeding corporation. For purposes hereof,
an Option shall be considered to be assumed
if, following consummation of the
Reorganization Event, the Option confers the
right to purchase, for each share of Common
Stock subject to the Option immediately prior
to the consummation of the Reorganization
Event, the consideration (whether cash,
securities or other property) received as a
result of the Reorganization Event by holders
of Common Stock for each share of Common
Stock held immediately prior to the
consummation of the Reorganization Event (and
if holders were offered a choice of
consideration, the type of consideration
chosen by the holders of a majority of the
outstanding shares of Common Stock);
provided, however, that if the consideration
received as a result of the Reorganization
Event is not solely common stock of the
acquiring or succeeding corporation (or an
affiliate thereof), the Company may, with the
consent of the acquiring or succeeding
corporation, provide for the consideration to
be received upon the exercise of Options to
consist solely of common stock of the
acquiring or succeeding corporation (or an
affiliate thereof) equivalent in value (as
determined by the Board) to the per share
consideration received by holders of
outstanding shares of Common Stock as a
result of the Reorganization Event.
Notwithstanding the foregoing, if
the acquiring or succeeding corporation (or
an affiliate thereof) does not agree to
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assume, or substitute for, such Options, or
in the event of a liquidation or dissolution
of the Company, the Board shall, upon
written notice to the Participants, provide
that all then unexercised Options will
become exercisable in full as of a specified
time prior to the Reorganization Event and
will terminate immediately prior to the
consummation of such Reorganization Event,
except to the extent exercised by the
Participants before the consummation of such
Reorganization Event; provided, however,
that in the event of a Reorganization Event
under the terms of which holders of Common
Stock will receive upon consummation thereof
a cash payment for each share of Common
Stock surrendered pursuant to such
Reorganization Event (the "Acquisition
Price"), then the Board may instead provide
that all outstanding Options shall terminate
upon consummation of such Reorganization
Event and that each Participant shall
receive, in exchange therefor, a cash
payment equal to the amount (if any) by
which (A) the Acquisition Price multiplied
by the number of shares of Common Stock
subject to such outstanding Options (whether
or not then exercisable), exceeds (B) the
aggregate exercise price of such Options.
(b) Change in Control Event that is not a
Reorganization Event. Upon the occurrence of
a Change in Control Event that does not also
constitute a Reorganization Event, except to
the extent specifically provided to the
contrary in the instrument evidencing any
Option or any other agreement between a
Participant and the Company, each
then-outstanding Option shall continue to
become vested in accordance with the original
vesting schedule set forth in such Option;
provided, however, that each such Option
shall become immediately exercisable in full
if, on or prior to the date that is eighteen
months after the date of the consummation of
the Change in Control Event, the
Participant's employment with the Company or
the acquiring or succeeding corporation is
terminated for Good Reason by the Participant
or is terminated without Cause by the Company
or the acquiring or succeeding corporation.
(3) Effect on Restricted Stock Awards
(a) Reorganization Event that is not a Change in
Control Event. Upon the occurrence of a
Reorganization Event that is not a Change in
Control Event, the repurchase and other
rights of the Company under each outstanding
Restricted Stock Award shall inure to the
benefit of the Company's successor and shall
apply to the cash, securities or other
property which the Common Stock was
converted into or exchanged for pursuant to
such Reorganization Event in the same manner
and to the same extent as they applied to
the Common Stock subject to such Restricted
Stock Award.
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(b) Change in Control Event. Upon the occurrence
of a Change in Control Event (regardless of
whether such event also constitutes a
Reorganization Event), except to the extent
specifically provided to the contrary in the
instrument evidencing any Restricted Stock
Award or any other agreement between a
Participant and the Company, each
then-outstanding Restricted Stock Award shall
continue to become free from conditions or
restrictions in accordance with the original
schedule set forth in such Restricted Stock
Award; provided, however, that each such
Restricted Stock Award shall immediately
become free from all conditions or
restrictions if, on or prior to the date that
is eighteen months after the date of the
consummation of the Change in Control Event,
the Participant's employment with the Company
or the acquiring or succeeding corporation is
terminated for Good Reason by the Participant
or is terminated without Cause by the Company
or the acquiring or succeeding corporation.
(4) Effect on Other Stock Unit Awards
The Board may specify in an Award at the time of the grant the
effect of a Reorganization Event and Change in Control Event on any Other Stock
Unit Award.
9. General Provisions Applicable to Awards
(a) Transferability of Awards. Except as the Board may otherwise
determine or provide in an Award, Awards shall not be sold, assigned,
transferred, pledged or otherwise encumbered by the person to whom they are
granted, either voluntarily or by operation of law, except by will or the laws
of descent and distribution or, other than in the case of an Incentive Stock
Option, pursuant to a qualified domestic relations order, and, during the life
of the Participant, shall be exercisable only by the Participant. References to
a Participant, to the extent relevant in the context, shall include references
to authorized transferees.
(b) Documentation. Each Award shall be evidenced in such form (written,
electronic or otherwise) as the Board shall determine. Each Award may contain
terms and conditions in addition to those set forth in the Plan.
(c) Board Discretion. Except as otherwise provided by the Plan, each
Award may be made alone or in addition or in relation to any other Award. The
terms of each Award need not be identical, and the Board need not treat
Participants uniformly.
(d) Termination of Status. The Board shall determine the effect on an
Award of the disability, death, retirement, authorized leave of absence or other
change in the employment or other status of a Participant and the extent to
which, and the period during which, the Participant, or the Participant's legal
representative, conservator, guardian or Designated Beneficiary, may exercise
rights under the Award.
(e) Withholding. Each Participant shall pay to the Company, or make
provision satisfactory to the Company for payment of, any taxes required by law
to be withheld in
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connection with an Award to such Participant. Except as the Board may otherwise
provide in an Award, for so long as the Class A Common Stock is registered under
the Exchange Act, Participants may satisfy such tax obligations in whole or in
part by delivery of shares of Class A Common Stock, including shares retained
from the Award creating the tax obligation, valued at their Fair Market Value;
provided, however, except as otherwise provided by the Board, that the total tax
withholding where stock is being used to satisfy such tax obligations cannot
exceed the Company's minimum statutory withholding obligations (based on minimum
statutory withholding rates for federal and state tax purposes, including
payroll taxes, that are applicable to such supplemental taxable income). Shares
surrendered to satisfy tax withholding requirements cannot be subject to any
repurchase, forfeiture, unfulfilled vesting or other similar requirements. The
Company may, to the extent permitted by law, deduct any such tax obligations
from any payment of any kind otherwise due to a Participant.
(f) Amendment of Award. The Board may amend, modify or terminate any
outstanding Award, including but not limited to, substituting therefor another
Award of the same or a different type, changing the date of exercise or
realization, and converting an Incentive Stock Option to a Nonstatutory Stock
Option, provided that the Participant's consent to such action shall be required
unless the Board determines that the action, taking into account any related
action, would not materially and adversely affect the Participant.
(g) Conditions on Delivery of Stock. The Company will not be obligated
to deliver any shares of Class A Common Stock pursuant to the Plan or to remove
restrictions from shares previously delivered under the Plan until (i) all
conditions of the Award have been met or removed to the satisfaction of the
Company, (ii) in the opinion of the Company's counsel, all other legal matters
in connection with the issuance and delivery of such shares have been satisfied,
including any applicable securities laws and any applicable stock exchange or
stock market rules and regulations, and (iii) the Participant has executed and
delivered to the Company such representations or agreements as the Company may
consider appropriate to satisfy the requirements of any applicable laws, rules
or regulations.
(h) Acceleration. The Board may at any time provide that any Award
shall become immediately exercisable in full or in part, free of some or all
restrictions or conditions, or otherwise realizable in full or in part, as the
case may be.
10. Miscellaneous
(a) No Right To Employment or Other Status. No person shall have any
claim or right to be granted an Award, and the grant of an Award shall not be
construed as giving a Participant the right to continued employment or any other
relationship with the Company. The Company expressly reserves the right at any
time to dismiss or otherwise terminate its relationship with a Participant free
from any liability or claim under the Plan, except as expressly provided in the
applicable Award.
(b) No Rights As Stockholder. Subject to the provisions of the
applicable Award, no Participant or Designated Beneficiary shall have any rights
as a stockholder with respect to any shares of Class A Common Stock to be
distributed with respect to an Award until becoming the record holder of such
shares. Notwithstanding the foregoing, in the event the Company effects a
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split of the Class A Common Stock by means of a stock dividend and the exercise
price of and the number of shares subject to such Option are adjusted as of the
date of the distribution of the dividend (rather than as of the record date for
such dividend), then an optionee who exercises an Option between the record date
and the distribution date for such stock dividend shall be entitled to receive,
on the distribution date, the stock dividend with respect to the shares of Class
A Common Stock acquired upon such Option exercise, notwithstanding the fact that
such shares were not outstanding as of the close of business on the record date
for such stock dividend.
(c) Effective Date and Term of Plan. The Plan shall become effective on
the date on which the Securities and Exchange Commission declares the
registration statement on Form S-1 for the initial public offering of the
Company's Class A Common Stock effective (the "Effective Date"). No Awards shall
be granted under the Plan after the completion of 10 years from the earlier of
(i) the Effective Date or (ii) the date the Plan was approved by the Company's
stockholders, but Awards previously granted may extend beyond that date.
(d) Amendment of Plan. The Board may amend, suspend or terminate the
Plan or any portion thereof at any time; provided, however, that, to the extent
determined by the Board, no amendment requiring stockholder approval under any
applicable legal, regulatory or listing requirement shall become effective until
such stockholder approval is obtained.
(e) Authorization of Sub-Plans. The Board may from time to time
establish one or more sub-plans under the Plan for purposes of satisfying
applicable blue sky, securities or tax laws of various jurisdictions. The Board
shall establish such sub-plans by adopting supplements to this Plan containing
(i) such limitations on the Board's discretion under the Plan as the Board deems
necessary or desirable or (ii) such additional terms and conditions not
otherwise inconsistent with the Plan as the Board shall deem necessary or
desirable. All supplements adopted by the Board shall be deemed to be part of
the Plan, but each supplement shall apply only to Participants within the
affected jurisdiction and the Company shall not be required to provide copies of
any supplement to Participants in any jurisdiction which is not the subject of
such supplement.
(f) Compliance with Code Section 409A. No Award shall provide for
deferral of compensation that does not comply with Section 409A of the Code,
unless the Board, at the time of grant, specifically provides that the Award is
not intended to comply with Section 409A of the Code.
(g) Governing Law. The provisions of the Plan and all Awards made
hereunder shall be governed by and interpreted in accordance with the laws of
the State of Delaware, excluding choice-of-law principles of the law of such
state that would require the application of the laws of a jurisdiction other
than such state.
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