Attached files
file | filename |
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S-1 - FORM S-1 - ENDOCYTE INC | f56327orsv1.htm |
EX-3.1 - EX-3.1 - ENDOCYTE INC | f56327orexv3w1.htm |
EX-4.3 - EX-4.3 - ENDOCYTE INC | f56327orexv4w3.htm |
EX-4.2 - EX-4.2 - ENDOCYTE INC | f56327orexv4w2.htm |
EX-3.4 - EX-3.4 - ENDOCYTE INC | f56327orexv3w4.htm |
EX-4.4 - EX-4.4 - ENDOCYTE INC | f56327orexv4w4.htm |
EX-23.1 - EX-23.1 - ENDOCYTE INC | f56327orexv23w1.htm |
EX-10.7 - EX-10.7 - ENDOCYTE INC | f56327orexv10w7.htm |
EX-10.9 - EX-10.9 - ENDOCYTE INC | f56327orexv10w9.htm |
EX-10.3 - EX-10.3 - ENDOCYTE INC | f56327orexv10w3.htm |
EX-10.2 - EX-10.2 - ENDOCYTE INC | f56327orexv10w2.htm |
EX-10.5 - EX-10.5 - ENDOCYTE INC | f56327orexv10w5.htm |
EX-10.1 - EX-10.1 - ENDOCYTE INC | f56327orexv10w1.htm |
EX-10.10 - EX-10.10 - ENDOCYTE INC | f56327orexv10w10.htm |
Exhibit 10.4
ENDOCYTE, INC.
2010 EQUITY INCENTIVE PLAN
1. Purposes of the Plan. The purposes of this Plan are:
| to attract and retain the best available personnel for positions of substantial responsibility, | ||
| to provide additional incentive to Employees, Directors and Consultants, and | ||
| to promote the success of the Companys business. |
The Plan permits the grant of Incentive Stock Options, Nonstatutory Stock Options, Restricted
Stock, Restricted Stock Units, Stock Appreciation Rights, Performance Units and Performance Shares.
2. Definitions. As used herein, the following definitions will apply:
(a) Administrator means the Board or any of its Committees as will be administering
the Plan, in accordance with Section 4 of the Plan.
(b) Applicable Laws means the requirements relating to the administration of
equity-based awards under U.S. state corporate laws, U.S. federal and state securities laws, the
Code, any stock exchange or quotation system on which the Common Stock is listed or quoted and the
applicable laws of any foreign country or jurisdiction where Awards are, or will be, granted under
the Plan.
(c) Award means, individually or collectively, a grant under the Plan of Options,
Stock Appreciation Rights, Restricted Stock, Restricted Stock Units, Performance Units or
Performance Shares.
(d) Award Agreement means the written or electronic agreement setting forth the
terms and provisions applicable to each Award granted under the Plan. The Award Agreement is
subject to the terms and conditions of the Plan.
(e) Board means the Board of Directors of the Company.
(f) Change in Control means the occurrence of any of the following events:
(i) A change in the ownership of the Company which occurs on the date that any one person, or
more than one person acting as a group (Person), acquires ownership of the stock of the
Company that, together with the stock held by such Person, constitutes more than fifty percent
(50%) of the total voting power of the stock of the Company; provided, however, that for purposes
of this subsection, the acquisition of additional stock by any one Person, who is considered
to own more than fifty percent (50%) of the total voting power of the stock of the Company
will not be considered a Change in Control; or
(ii) A change in the effective control of the Company which occurs on the date that a majority
of members of the Board is replaced during any twelve (12) month period by Directors whose
appointment or election is not endorsed by a majority of the members of the Board prior to the date
of the appointment or election. For purposes of this clause (ii), if any Person is considered to
be in effective control of the Company, the acquisition of additional control of the Company by the
same Person will not be considered a Change in Control; or
(iii) A change in the ownership of a substantial portion of the Companys assets which occurs
on the date that any Person acquires (or has acquired during the twelve (12) month period ending on
the date of the most recent acquisition by such person or persons) assets from the Company that
have a total gross fair market value equal to or more than fifty percent (50%) of the total gross
fair market value of all of the assets of the Company immediately prior to such acquisition or
acquisitions; provided, however, that for purposes of this subsection (iii), the following will not
constitute a change in the ownership of a substantial portion of the Companys assets: (A) a
transfer to an entity that is controlled by the Companys stockholders immediately after the
transfer, or (B) a transfer of assets by the Company to: (1) a stockholder of the Company
(immediately before the asset transfer) in exchange for or with respect to the Companys stock, (2)
an entity, fifty percent (50%) or more of the total value or voting power of which is owned,
directly or indirectly, by the Company, (3) a Person, that owns, directly or indirectly, fifty
percent (50%) or more of the total value or voting power of all the outstanding stock of the
Company, or (4) an entity, at least fifty percent (50%) of the total value or voting power of which
is owned, directly or indirectly, by a Person described in this subsection (iii)(B)(3). For
purposes of this subsection (iii), gross fair market value means the value of the assets of the
Company, or the value of the assets being disposed of, determined without regard to any liabilities
associated with such assets.
For purposes of this definition, persons will be considered to be acting as a group if they
are owners of a corporation that enters into a merger, consolidation, purchase or acquisition of
stock, or similar business transaction with the Company.
Notwithstanding the foregoing, a transaction will not be deemed a Change in Control unless the
transaction qualifies as a change in control event within the meaning of Code Section 409A, as it
has been and may be amended from time to time, and any proposed or final Treasury Regulations and
Internal Revenue Service guidance that has been promulgated or may be promulgated thereunder from
time to time.
Further and for the avoidance of doubt, a transaction will not constitute a Change in Control
if: (i) its sole purpose is to change the state of the Companys incorporation, or (ii) its sole
purpose is to create a holding company that will be owned in substantially the same proportions by
the persons who held the Companys securities immediately before such transaction.
(g) Code means the Internal Revenue Code of 1986, as amended. Reference to a
specific section of the Code or regulation thereunder shall include such section or regulation, any
valid regulation promulgated under such section, and any comparable provision of any future
legislation or regulation amending, supplementing or superseding such section or regulation.
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(h) Committee means a committee of Directors or of other individuals satisfying
Applicable Laws appointed by the Board, or a duly authorized committee of the Board, in accordance
with Section 4 hereof.
(i) Common Stock means the common stock of the Company.
(j) Company means Endocyte, Inc., a Delaware corporation, or any successor thereto.
(k) Consultant means any person, including an advisor, engaged by the Company or a
Parent or Subsidiary to render services to such entity.
(l) Director means a member of the Board.
(m) Disability means total and permanent disability as defined in Section 22(e)(3)
of the Code, provided that in the case of Awards other than Incentive Stock Options, the
Administrator in its discretion may determine whether a permanent and total disability exists in
accordance with uniform and non-discriminatory standards adopted by the Administrator from time to
time.
(n) Employee means any person, including Officers and Directors, employed by the
Company or any Parent or Subsidiary of the Company. Neither service as a Director nor payment of a
directors fee by the Company will be sufficient to constitute employment by the Company.
(o) Exchange Act means the Securities Exchange Act of 1934, as amended.
(p) Exchange Program means a program under which (i) outstanding Awards are
surrendered or cancelled in exchange for Awards of the same type (which may have higher or lower
exercise prices and different terms), Awards of a different type, and/or cash, (ii) Participants
would have the opportunity to transfer any outstanding Awards to a financial institution or other
person or entity selected by the Administrator, and/or (iii) the exercise price of an outstanding
Award is increased or reduced. The Administrator will determine the terms and conditions of any
Exchange Program in its sole discretion.
(q) Fair Market Value means, as of any date, the value of Common Stock determined as
follows:
(i) If the Common Stock is listed on any established stock exchange or a national market
system, including without limitation the NASDAQ Global Select Market, the NASDAQ Global Market or
the NASDAQ Capital Market of The NASDAQ Stock Market, its Fair Market Value will be the closing
sales price for such stock (or the closing bid, if no sales were reported) as quoted on such
exchange or system on the day of determination, as reported in The Wall Street Journal or such
other source as the Administrator deems reliable;
(ii) If the Common Stock is regularly quoted by a recognized securities dealer but selling
prices are not reported, the Fair Market Value of a Share will be the mean between
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the high bid and low asked prices for the Common Stock on the day of determination, as
reported in The Wall Street Journal or such other source as the Administrator deems reliable;
(iii) For purposes of any Awards granted on the Registration Date, the Fair Market Value will
be the initial price to the public as set forth in the final prospectus included within the
registration statement in Form S-1 filed with the Securities and Exchange Commission for the
initial public offering of the Companys Common Stock; or
(iv) In the absence of an established market for the Common Stock, the Fair Market Value will
be determined in good faith by the Administrator.
(r) Fiscal Year means the fiscal year of the Company.
(s) Incentive Stock Option means an Option intended to qualify as an incentive stock
option within the meaning of Section 422 of the Code and the regulations promulgated thereunder.
(t) Inside Director means a Director who is an Employee.
(u) Nonstatutory Stock Option means an Option that by its terms does not qualify or
is not intended to qualify as an Incentive Stock Option.
(v) Officer means a person who is an officer of the Company within the meaning of
Section 16 of the Exchange Act and the rules and regulations promulgated thereunder.
(w) Option means a stock option granted pursuant to the Plan.
(x) Outside Director means a Director who is not an Employee.
(y) Parent means a parent corporation, whether now or hereafter existing, as
defined in Section 424(e) of the Code.
(z) Participant means the holder of an outstanding Award.
(aa) Performance Share means an Award denominated in Shares which may be earned in
whole or in part upon attainment of performance goals or other vesting criteria as the
Administrator may determine pursuant to Section 10.
(bb) Performance Unit means an Award which may be earned in whole or in part upon
attainment of performance goals or other vesting criteria as the Administrator may determine and
which may be settled for cash, Shares or other securities or a combination of the foregoing
pursuant to Section 10.
(cc) Period of Restriction means the period during which the transfer of Shares of
Restricted Stock are subject to restrictions and therefore, the Shares are subject to a substantial
risk of forfeiture. Such restrictions may be based on the passage of time, the achievement of
target levels of performance, or the occurrence of other events as determined by the Administrator.
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(dd) Plan means this 2010 Equity Incentive Plan.
(ee) Registration Date means the effective date of the first registration statement
that is filed by the Company and declared effective pursuant to Section 12(g) of the Exchange Act,
with respect to any class of the Companys securities.
(ff) Restricted Stock means Shares issued pursuant to a Restricted Stock award under
Section 7 of the Plan, or issued pursuant to the early exercise of an Option.
(gg) Restricted Stock Unit means a bookkeeping entry representing an amount equal to
the Fair Market Value of one Share, granted pursuant to Section 8. Each Restricted Stock Unit
represents an unfunded and unsecured obligation of the Company.
(hh) Rule 16b-3 means Rule 16b-3 of the Exchange Act or any successor to Rule 16b-3,
as in effect when discretion is being exercised with respect to the Plan.
(ii) Section 16(b) means Section 16(b) of the Exchange Act.
(jj) Service Provider means an Employee, Director or Consultant.
(kk) Share means a share of the Common Stock, as adjusted in accordance with Section
13 of the Plan.
(ll) Stock Appreciation Right means an Award, granted alone or in connection with an
Option, that pursuant to Section 9 is designated as a Stock Appreciation Right.
(mm) Subsidiary means a subsidiary corporation, whether now or hereafter existing,
as defined in Section 424(f) of the Code.
3. Stock Subject to the Plan.
(a) Stock Subject to the Plan. Subject to the provisions of Section 13 of the Plan,
the maximum aggregate number of Shares that may be issued under the Plan is 2,500,000 Shares, plus
(i) any Shares that, as of the Registration Date, have been reserved but not issued pursuant to any
awards granted under the Companys 1997 Stock Plan and 2007 Stock Plan (the Existing
Plans) and are not subject to any awards granted thereunder, and (ii) any Shares subject to
stock options or similar awards granted under the Existing Plans that expire or otherwise terminate
without having been exercised in full and Shares issued pursuant to awards granted under the
Existing Plan that are forfeited to or repurchased by the Company, with the maximum number of
Shares to be added to the Plan pursuant to clauses (i) and (ii) equal to 4,750,000 Shares. The
Shares may be authorized, but unissued, or reacquired Common Stock.
(b) Automatic Share Reserve Increase. The number of Shares available for issuance
under the Plan will be increased on the first day of each Fiscal Year beginning with the 2012
Fiscal Year, in an amount equal to the least of (i) 4,000,000 Shares, (ii) four percent (4%) of the
outstanding Shares on the last day of the immediately preceding Fiscal Year or (iii) such number of
Shares determined by the Board.
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(c) Lapsed Awards. If an Award expires or becomes unexercisable without having been
exercised in full, is surrendered pursuant to an Exchange Program, or, with respect to Restricted
Stock, Restricted Stock Units, Performance Units or Performance Shares, is forfeited to or
repurchased by the Company due to failure to vest, the unpurchased Shares (or for Awards other than
Options or Stock Appreciation Rights the forfeited or repurchased Shares), which were subject
thereto will become available for future grant or sale under the Plan (unless the Plan has
terminated). With respect to Stock Appreciation Rights, only Shares actually issued (i.e., the net
Shares issued) pursuant to a Stock Appreciation Right will cease to be available under the Plan;
all remaining Shares under Stock Appreciation Rights will remain available for future grant or sale
under the Plan (unless the Plan has terminated). Shares that have actually been issued under the
Plan under any Award will not be returned to the Plan and will not become available for future
distribution under the Plan; provided, however, that if Shares issued pursuant to Awards of
Restricted Stock, Restricted Stock Units, Performance Shares or Performance Units are repurchased
by the Company or are forfeited to the Company, such Shares will become available for future grant
under the Plan. Shares used to pay the exercise price of an Award or to satisfy the tax
withholding obligations related to an Award will become available for future grant or sale under
the Plan. To the extent an Award under the Plan is paid out in cash rather than Shares, such cash
payment will not result in reducing the number of Shares available for issuance under the Plan.
Notwithstanding the foregoing and, subject to adjustment as provided in Section 13, the maximum
number of Shares that may be issued upon the exercise of Incentive Stock Options will equal the
aggregate Share number stated in Section 3(a), plus, to the extent allowable under Section 422 of
the Code and the Treasury Regulations promulgated thereunder, any Shares that become available for
issuance under the Plan pursuant to Sections 3(b) and 3(c).
(d) Share Reserve. The Company, during the term of this Plan, will at all times
reserve and keep available such number of Shares as will be sufficient to satisfy the requirements
of the Plan.
4. Administration of the Plan.
(a) Procedure.
(i) Multiple Administrative Bodies. Different Committees with respect to different
groups of Service Providers may administer the Plan.
(ii) Section 162(m). To the extent that the Administrator determines it to be
desirable to qualify Awards granted hereunder as performance-based compensation within the
meaning of Section 162(m) of the Code, the Plan will be administered by a Committee of two (2) or
more outside directors within the meaning of Section 162(m) of the Code.
(iii) Rule 16b-3. To the extent desirable to qualify transactions hereunder as exempt
under Rule 16b-3, the transactions contemplated hereunder will be structured to satisfy the
requirements for exemption under Rule 16b-3.
(iv) Other Administration. Other than as provided above, the Plan will be
administered by (A) the Board or (B) a Committee, which committee will be constituted to satisfy
Applicable Laws.
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(b) Powers of the Administrator. Subject to the provisions of the Plan, and in the
case of a Committee, subject to the specific duties delegated by the Board to such Committee, the
Administrator will have the authority, in its discretion:
(i) to determine the Fair Market Value;
(ii) to select the Service Providers to whom Awards may be granted hereunder;
(iii) to determine the number of Shares to be covered by each Award granted hereunder;
(iv) to approve forms of Award Agreements for use under the Plan;
(v) to determine the terms and conditions, not inconsistent with the terms of the Plan, of any
Award granted hereunder. Such terms and conditions include, but are not limited to, the exercise
price, the time or times when Awards may be exercised (which may be based on performance criteria),
any vesting acceleration or waiver of forfeiture restrictions, and any restriction or limitation
regarding any Award or the Shares relating thereto, based in each case on such factors as the
Administrator will determine;
(vi) to determine the terms and conditions of any, and to institute any Exchange Program;
(vii) to construe and interpret the terms of the Plan and Awards granted pursuant to the Plan;
(viii) to prescribe, amend and rescind rules and regulations relating to the Plan, including
rules and regulations relating to sub-plans established for the purpose of satisfying applicable
foreign laws or for qualifying for favorable tax treatment under applicable foreign laws;
(ix) to modify or amend each Award (subject to Section 18 of the Plan), including but not
limited to the discretionary authority to extend the post-termination exercisability period of
Awards and to extend the maximum term of an Option (subject to Section 6(b) of the Plan regarding
Incentive Stock Options);
(x) to allow Participants to satisfy withholding tax obligations in such manner as prescribed
in Section 14 of the Plan;
(xi) to authorize any person to execute on behalf of the Company any instrument required to
effect the grant of an Award previously granted by the Administrator;
(xii) to allow a Participant to defer the receipt of the payment of cash or the delivery of
Shares that would otherwise be due to such Participant under an Award; and
(xiii) to make all other determinations deemed necessary or advisable for administering the
Plan.
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(c) Effect of Administrators Decision. The Administrators decisions, determinations
and interpretations will be final and binding on all Participants and any other holders of Awards.
5. Eligibility. Nonstatutory Stock Options, Stock Appreciation Rights, Restricted
Stock, Restricted Stock Units, Performance Shares and Performance Units may be granted to Service
Providers. Incentive Stock Options may be granted only to Employees.
6. Stock Options.
(a) Limitations. Each Option will be designated in the Award Agreement as either an
Incentive Stock Option or a Nonstatutory Stock Option. However, notwithstanding such designation,
to the extent that the aggregate Fair Market Value of the Shares with respect to which Incentive
Stock Options are exercisable for the first time by the Participant during any calendar year (under
all plans of the Company and any Parent or Subsidiary) exceeds one hundred thousand dollars
($100,000), such Options will be treated as Nonstatutory Stock Options. For purposes of this
Section 6(a), Incentive Stock Options will be taken into account in the order in which they were
granted. The Fair Market Value of the Shares will be determined as of the time the Option with
respect to such Shares is granted.
(b) Term of Option. The term of each Option will be stated in the Award Agreement.
In the case of an Incentive Stock Option, the term will be ten (10) years from the date of grant or
such shorter term as may be provided in the Award Agreement. Moreover, in the case of an Incentive
Stock Option granted to a Participant who, at the time the Incentive Stock Option is granted, owns
stock representing more than ten percent (10%) of the total combined voting power of all classes of
stock of the Company or any Parent or Subsidiary, the term of the Incentive Stock Option will be
five (5) years from the date of grant or such shorter term as may be provided in the Award
Agreement.
(c) Option Exercise Price and Consideration.
(i) Exercise Price. The per share exercise price for the Shares to be issued pursuant
to exercise of an Option will be determined by the Administrator, subject to the following:
(1) In the case of an Incentive Stock Option
(A) granted to an Employee who, at the time the Incentive Stock Option is granted, owns stock
representing more than ten percent (10%) of the voting power of all classes of stock of the Company
or any Parent or Subsidiary, the per Share exercise price will be no less than one hundred ten
percent (110%) of the Fair Market Value per Share on the date of grant.
(B) granted to any Employee other than an Employee described in paragraph (A) immediately
above, the per Share exercise price will be no less than one hundred percent (100%) of the Fair
Market Value per Share on the date of grant.
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(2) In the case of a Nonstatutory Stock Option, the per Share exercise price will be no less
than one hundred percent (100%) of the Fair Market Value per Share on the date of grant.
(3) Notwithstanding the foregoing, Options may be granted with a per Share exercise price of
less than one hundred percent (100%) of the Fair Market Value per Share on the date of grant
pursuant to a transaction described in, and in a manner consistent with, Section 424(a) of the
Code.
(ii) Waiting Period and Exercise Dates. At the time an Option is granted, the
Administrator will fix the period within which the Option may be exercised and will determine any
conditions that must be satisfied before the Option may be exercised.
(iii) Form of Consideration. The Administrator will determine the acceptable form of
consideration for exercising an Option, including the method of payment. In the case of an
Incentive Stock Option, the Administrator will determine the acceptable form of consideration at
the time of grant. Such consideration may consist entirely of: (1) cash; (2) check; (3) promissory
note, to the extent permitted by Applicable Laws, (4) other Shares, provided that such Shares have
a Fair Market Value on the date of surrender equal to the aggregate exercise price of the Shares as
to which such Option will be exercised and provided that accepting such Shares will not result in
any adverse accounting consequences to the Company, as the Administrator determines in its sole
discretion; (5) consideration received by the Company under a broker-assisted (or other) cashless
exercise program (whether through a broker or otherwise) implemented by the Company in connection
with the Plan; (6) by net exercise; (7) such other consideration and method of payment for the
issuance of Shares to the extent permitted by Applicable Laws; or (8) any combination of the
foregoing methods of payment.
(d) Exercise of Option.
(i) Procedure for Exercise; Rights as a Stockholder. Any Option granted hereunder
will be exercisable according to the terms of the Plan and at such times and under such conditions
as determined by the Administrator and set forth in the Award Agreement. An Option may not be
exercised for a fraction of a Share.
An Option will be deemed exercised when the Company receives: (i) a notice of exercise (in
such form as the Administrator may specify from time to time) from the person entitled to exercise
the Option, and (ii) full payment for the Shares with respect to which the Option is exercised
(together with applicable withholding taxes). Full payment may consist of any consideration and
method of payment authorized by the Administrator and permitted by the Award Agreement and the
Plan. Shares issued upon exercise of an Option will be issued in the name of the Participant or,
if requested by the Participant, in the name of the Participant and his or her spouse. Until the
Shares are issued (as evidenced by the appropriate entry on the books of the Company or of a duly
authorized transfer agent of the Company), no right to vote or receive dividends or any other
rights as a stockholder will exist with respect to the Shares subject to an Option, notwithstanding
the exercise of the Option. The Company will issue (or cause to be issued) such Shares promptly
after the Option is exercised. No adjustment will be made for a dividend or other right for which
the record date is prior to the date the Shares are issued, except as provided in Section 13 of the
Plan.
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Exercising an Option in any manner will decrease the number of Shares thereafter available,
both for purposes of the Plan and for sale under the Option, by the number of Shares as to which
the Option is exercised.
(ii) Termination of Relationship as a Service Provider. If a Participant ceases to be
a Service Provider, other than upon the Participants termination as the result of the
Participants death or Disability, the Participant may exercise his or her Option within such
period of time as is specified in the Award Agreement to the extent that the Option is vested on
the date of termination (but in no event later than the expiration of the term of such Option as
set forth in the Award Agreement). In the absence of a specified time in the Award Agreement, the
Option will remain exercisable for three (3) months following the Participants termination.
Unless otherwise provided by the Administrator, if on the date of termination the Participant is
not vested as to his or her entire Option, the Shares covered by the unvested portion of the Option
will revert to the Plan. If after termination the Participant does not exercise his or her Option
within the time specified by the Administrator, the Option will terminate, and the Shares covered
by such Option will revert to the Plan.
(iii) Disability of Participant. If a Participant ceases to be a Service Provider as
a result of the Participants Disability, the Participant may exercise his or her Option within
such period of time as is specified in the Award Agreement to the extent the Option is vested on
the date of termination (but in no event later than the expiration of the term of such Option as
set forth in the Award Agreement). In the absence of a specified time in the Award Agreement, the
Option will remain exercisable for twelve (12) months following the Participants termination.
Unless otherwise provided by the Administrator, if on the date of termination the Participant is
not vested as to his or her entire Option, the Shares covered by the unvested portion of the Option
will revert to the Plan. If after termination the Participant does not exercise his or her Option
within the time specified herein, the Option will terminate, and the Shares covered by such Option
will revert to the Plan.
(iv) Death of Participant. If a Participant dies while a Service Provider, the Option
may be exercised following the Participants death within such period of time as is specified in
the Award Agreement to the extent that the Option is vested on the date of death (but in no event
may the option be exercised later than the expiration of the term of such Option as set forth in
the Award Agreement), by the Participants designated beneficiary, provided such beneficiary has
been designated prior to Participants death in a form acceptable to the Administrator. If no such
beneficiary has been designated by the Participant, then such Option may be exercised by the
personal representative of the Participants estate or by the person(s) to whom the Option is
transferred pursuant to the Participants will or in accordance with the laws of descent and
distribution. In the absence of a specified time in the Award Agreement, the Option will remain
exercisable for twelve (12) months following Participants death. Unless otherwise provided by the
Administrator, if at the time of death Participant is not vested as to his or her entire Option,
the Shares covered by the unvested portion of the Option will immediately revert to the Plan. If
the Option is not so exercised within the time specified herein, the Option will terminate, and the
Shares covered by such Option will revert to the Plan.
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7. Restricted Stock.
(a) Grant of Restricted Stock. Subject to the terms and provisions of the Plan, the
Administrator, at any time and from time to time, may grant Shares of Restricted Stock to Service
Providers in such amounts as the Administrator, in its sole discretion, will determine.
(b) Restricted Stock Agreement. Each Award of Restricted Stock will be evidenced by
an Award Agreement that will specify the Period of Restriction, the number of Shares granted, and
such other terms and conditions as the Administrator, in its sole discretion, will determine.
Unless the Administrator determines otherwise, the Company as escrow agent will hold Shares of
Restricted Stock until the restrictions on such Shares have lapsed.
(c) Transferability. Except as provided in this Section 7 or the Award Agreement,
Shares of Restricted Stock may not be sold, transferred, pledged, assigned, or otherwise alienated
or hypothecated until the end of the applicable Period of Restriction.
(d) Other Restrictions. The Administrator, in its sole discretion, may impose such
other restrictions on Shares of Restricted Stock as it may deem advisable or appropriate.
(e) Removal of Restrictions. Except as otherwise provided in this Section 7, Shares
of Restricted Stock covered by each Restricted Stock grant made under the Plan will be released
from escrow as soon as practicable after the last day of the Period of Restriction or at such other
time as the Administrator may determine. The Administrator, in its discretion, may accelerate the
time at which any restrictions will lapse or be removed.
(f) Voting Rights. During the Period of Restriction, Service Providers holding Shares
of Restricted Stock granted hereunder may exercise full voting rights with respect to those Shares,
unless the Administrator determines otherwise.
(g) Dividends and Other Distributions. During the Period of Restriction, Service
Providers holding Shares of Restricted Stock will be entitled to receive all dividends and other
distributions paid with respect to such Shares, unless the Administrator provides otherwise. If
any such dividends or distributions are paid in Shares, the Shares will be subject to the same
restrictions on transferability and forfeitability as the Shares of Restricted Stock with respect
to which they were paid.
(h) Return of Restricted Stock to Company. On the date set forth in the Award
Agreement, the Restricted Stock for which restrictions have not lapsed will revert to the Company
and again will become available for grant under the Plan.
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8. Restricted Stock Units.
(a) Grant. Restricted Stock Units may be granted at any time and from time to time as
determined by the Administrator. After the Administrator determines that it will grant Restricted
Stock Units under the Plan, it will advise the Participant in an Award Agreement of the terms,
conditions, and restrictions related to the grant, including the number of Restricted Stock Units.
(b) Vesting Criteria and Other Terms. The Administrator will set vesting criteria in
its discretion, which, depending on the extent to which the criteria are met, will determine the
number of Restricted Stock Units that will be paid out to the Participant. The Administrator may
set vesting criteria based upon the achievement of Company-wide, business unit, or individual goals
(including, but not limited to, continued employment), or any other basis determined by the
Administrator in its discretion.
(c) Earning Restricted Stock Units. Upon meeting the applicable vesting criteria, the
Participant will be entitled to receive a payout as determined by the Administrator.
Notwithstanding the foregoing, at any time after the grant of Restricted Stock Units, the
Administrator, in its sole discretion, may reduce or waive any vesting criteria that must be met to
receive a payout.
(d) Form and Timing of Payment. Payment of earned Restricted Stock Units will be made
as soon as practicable after the date(s) determined by the Administrator and set forth in the Award
Agreement. The Administrator, in its sole discretion, may only settle earned Restricted Stock
Units in cash, Shares, or a combination of both.
(e) Cancellation. On the date set forth in the Award Agreement, all unearned
Restricted Stock Units will be forfeited to the Company.
9. Stock Appreciation Rights.
(a) Grant of Stock Appreciation Rights. Subject to the terms and conditions of the
Plan, a Stock Appreciation Right may be granted to Service Providers at any time and from time to
time as will be determined by the Administrator, in its sole discretion.
(b) Number of Shares. The Administrator will have complete discretion to determine
the number of Stock Appreciation Rights granted to any Service Provider.
(c) Exercise Price and Other Terms. The per share exercise price for the Shares to be
issued pursuant to exercise of a Stock Appreciation Right will be determined by the Administrator
and will be no less than one hundred percent (100%) of the Fair Market Value per Share on the date
of grant. Otherwise, the Administrator, subject to the provisions of the Plan, will have complete
discretion to determine the terms and conditions of Stock Appreciation Rights granted under the
Plan.
(d) Stock Appreciation Right Agreement. Each Stock Appreciation Right grant will be
evidenced by an Award Agreement that will specify the exercise price, the term of the Stock
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Appreciation Right, the conditions of exercise, and such other terms and conditions as the
Administrator, in its sole discretion, will determine.
(e) Expiration of Stock Appreciation Rights. A Stock Appreciation Right granted under
the Plan will expire upon the date determined by the Administrator, in its sole discretion, and set
forth in the Award Agreement. Notwithstanding the foregoing, the rules of Section 6(b) relating to
the maximum term and Section 6(d) relating to exercise also will apply to Stock Appreciation
Rights.
(f) Payment of Stock Appreciation Right Amount. Upon exercise of a Stock Appreciation
Right, a Participant will be entitled to receive payment from the Company in an amount determined
by multiplying:
(i) The difference between the Fair Market Value of a Share on the date of exercise over the
exercise price; times
(ii) The number of Shares with respect to which the Stock Appreciation Right is exercised.
At the discretion of the Administrator, the payment upon Stock Appreciation Right exercise may
be in cash, in Shares of equivalent value, or in some combination thereof.
10. Performance Units and Performance Shares.
(a) Grant of Performance Units/Shares. Performance Units and Performance Shares may
be granted to Service Providers at any time and from time to time, as will be determined by the
Administrator, in its sole discretion. The Administrator will have complete discretion in
determining the number of Performance Units and Performance Shares granted to each Participant.
(b) Value of Performance Units/Shares. Each Performance Unit will have an initial
value that is established by the Administrator on or before the date of grant. Each Performance
Share will have an initial value equal to the Fair Market Value of a Share on the date of grant.
(c) Performance Objectives and Other Terms. The Administrator will set performance
objectives or other vesting provisions (including, without limitation, continued status as a
Service Provider) in its discretion which, depending on the extent to which they are met, will
determine the number or value of Performance Units/Shares that will be paid out to the Service
Providers. The time period during which the performance objectives or other vesting provisions
must be met will be called the Performance Period. Each Award of Performance Units/Shares will
be evidenced by an Award Agreement that will specify the Performance Period, and such other terms
and conditions as the Administrator, in its sole discretion, will determine. The Administrator may
set performance objectives based upon the achievement of Company-wide, divisional, or individual
goals, applicable federal or state securities laws, or any other basis determined by the
Administrator in its discretion.
(d) Earning of Performance Units/Shares. After the applicable Performance Period has
ended, the holder of Performance Units/Shares will be entitled to receive a payout of the
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number of Performance Units/Shares earned by the Participant over the Performance Period, to
be determined as a function of the extent to which the corresponding performance objectives or
other vesting provisions have been achieved. After the grant of a Performance Unit/Share, the
Administrator, in its sole discretion, may reduce or waive any performance objectives or other
vesting provisions for such Performance Unit/Share.
(e) Form and Timing of Payment of Performance Units/Shares. Payment of earned
Performance Units/Shares will be made as soon as practicable after the expiration of the applicable
Performance Period. The Administrator, in its sole discretion, may pay earned Performance
Units/Shares in the form of cash, in Shares (which have an aggregate Fair Market Value equal to the
value of the earned Performance Units/Shares at the close of the applicable Performance Period) or
in a combination thereof.
(f) Cancellation of Performance Units/Shares. On the date set forth in the Award
Agreement, all unearned or unvested Performance Units/Shares will be forfeited to the Company, and
again will be available for grant under the Plan.
11. Leaves of Absence/Transfer Between Locations. Unless the Administrator provides
otherwise, vesting of Awards granted hereunder will be suspended during any unpaid leave of
absence. A Participant will not cease to be an Employee in the case of (i) any leave of absence
approved by the Company or (ii) transfers between locations of the Company or between the Company,
its Parent, or any Subsidiary. For purposes of Incentive Stock Options, no such leave may exceed
three (3) months, unless reemployment upon expiration of such leave is guaranteed by statute or
contract. If reemployment upon expiration of a leave of absence approved by the Company is not so
guaranteed, then six (6) months following the first (1st) day of such leave any
Incentive Stock Option held by the Participant will cease to be treated as an Incentive Stock
Option and will be treated for tax purposes as a Nonstatutory Stock Option.
12. Transferability of Awards. Unless determined otherwise by the Administrator, an
Award may not be sold, pledged, assigned, hypothecated, transferred, or disposed of in any manner
other than by will or by the laws of descent or distribution and may be exercised, during the
lifetime of the Participant, only by the Participant. If the Administrator makes an Award
transferable, such Award will contain such additional terms and conditions as the Administrator
deems appropriate.
13. Adjustments; Dissolution or Liquidation; Merger or Change in Control.
(a) Adjustments. In the event that any dividend or other distribution (whether in the
form of cash, Shares, other securities, or other property), recapitalization, stock split, reverse
stock split, reorganization, merger, consolidation, split-up, spin-off, combination, repurchase, or
exchange of Shares or other securities of the Company, or other change in the corporate structure
of the Company affecting the Shares occurs, the Administrator, in order to prevent diminution or
enlargement of the benefits or potential benefits intended to be made available under the Plan,
will adjust the number and class of Shares that may be delivered under the Plan and/or the number,
class, and price of Shares covered by each outstanding Award, and the numerical Share limits in
Section 3 of the Plan.
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(b) Dissolution or Liquidation. In the event of the proposed dissolution or
liquidation of the Company, the Administrator will notify each Participant as soon as practicable
prior to the effective date of such proposed transaction. To the extent it has not been previously
exercised, an Award will terminate immediately prior to the consummation of such proposed action.
(c) Change in Control. In the event of a merger or Change in Control, each
outstanding Award will be treated as the Administrator determines, including, without limitation,
that each Award be assumed or an equivalent option or right substituted by the successor
corporation or a Parent or Subsidiary of the successor corporation. The Administrator will not be
required to treat all Awards similarly in the transaction.
In the event that the successor corporation does not assume or substitute for the Award, the
Participant will fully vest in and have the right to exercise all of his or her outstanding Options
and Stock Appreciation Rights, including Shares as to which such Awards would not otherwise be
vested or exercisable, all restrictions on Restricted Stock and Restricted Stock Units will lapse,
and, with respect to Awards with performance-based vesting, all performance goals or other vesting
criteria will be deemed achieved at one hundred percent (100%) of target levels and all other terms
and conditions met. In addition, if an Option or Stock Appreciation Right is not assumed or
substituted in the event of a Change in Control, the Administrator will notify the Participant in
writing or electronically that the Option or Stock Appreciation Right will be exercisable for a
period of time determined by the Administrator in its sole discretion, and the Option or Stock
Appreciation Right will terminate upon the expiration of such period.
For the purposes of this subsection (c), an Award will be considered assumed if, following the
Change in Control, the Award confers the right to purchase or receive, for each Share subject to
the Award immediately prior to the Change in Control, the consideration (whether stock, cash, or
other securities or property) received in the Change in Control by holders of Common Stock for each
Share held on the effective date of the transaction (and if holders were offered a choice of
consideration, the type of consideration chosen by the holders of a majority of the outstanding
Shares); provided, however, that if such consideration received in the Change in Control is not
solely common stock of the successor corporation or its Parent, the Administrator may, with the
consent of the successor corporation, provide for the consideration to be received upon the
exercise of an Option or Stock Appreciation Right or upon the payout of a Restricted Stock Unit,
Performance Unit or Performance Share, for each Share subject to such Award, to be solely common
stock of the successor corporation or its Parent equal in fair market value to the per share
consideration received by holders of Common Stock in the Change in Control.
Notwithstanding anything in this Section 13(c) to the contrary, an Award that vests, is earned
or paid-out upon the satisfaction of one or more performance goals will not be considered assumed
if the Company or its successor modifies any of such performance goals without the Participants
consent; provided, however, a modification to such performance goals only to reflect the successor
corporations post-Change in Control corporate structure will not be deemed to invalidate an
otherwise valid Award assumption.
(d) Outside Director Awards. With respect to Awards granted to an Outside Director
that are assumed or substituted for, if on the date of or following such assumption or substitution
the Participants status as a Director or a director of the successor corporation, as
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applicable, is terminated other than upon a voluntary resignation by the Participant (unless
such resignation is at the request of the acquirer), then the Participant will fully vest in and
have the right to exercise Options and/or Stock Appreciation Rights as to all of the Shares
underlying such Award, including those Shares which would not otherwise be vested or exercisable,
all restrictions on Restricted Stock and Restricted Stock Units will lapse, and, with respect to
Performance Units and Performance Shares, all performance goals or other vesting criteria will be
deemed achieved at one hundred percent (100%) of target levels and all other terms and conditions
met.
14. Tax.
(a) Withholding Requirements. Prior to the delivery of any Shares or cash pursuant to
an Award (or exercise thereof), the Company will have the power and the right to deduct or
withhold, or require a Participant to remit to the Company, an amount sufficient to satisfy
federal, state, local, foreign or other taxes (including the Participants FICA obligation)
required to be withheld with respect to such Award (or exercise thereof).
(b) Withholding Arrangements. The Administrator, in its sole discretion and pursuant
to such procedures as it may specify from time to time, may permit a Participant to satisfy such
tax withholding obligation, in whole or in part by (without limitation) (a) paying cash, (b)
electing to have the Company withhold otherwise deliverable cash or Shares having a Fair Market
Value equal to the minimum statutory amount required to be withheld, or (c) delivering to the
Company already-owned Shares having a Fair Market Value equal to the minimum statutory amount
required to be withheld. The Fair Market Value of the Shares to be withheld or delivered will be
determined as of the date that the taxes are required to be withheld.
(c) Compliance With Code Section 409A. Awards will be designed and operated in such a
manner that they are either exempt from the application of, or comply with, the requirements of
Code Section 409A such that the grant, payment, settlement or deferral will not be subject to the
additional tax or interest applicable under Code Section 409A, except as otherwise determined in
the sole discretion of the Administrator. The Plan and each Award Agreement under the Plan is
intended to meet the requirements of Code Section 409A and will be construed and interpreted in
accordance with such intent, except as otherwise determined in the sole discretion of the
Administrator. To the extent that an Award or payment, or the settlement or deferral thereof, is
subject to Code Section 409A the Award will be granted, paid, settled or deferred in a manner that
will meet the requirements of Code Section 409A, such that the grant, payment, settlement or
deferral will not be subject to the additional tax or interest applicable under Code Section 409A.
15. No Effect on Employment or Service. Neither the Plan nor any Award will confer
upon a Participant any right with respect to continuing the Participants relationship as a Service
Provider with the Company, nor will they interfere in any way with the Participants right or the
Companys right to terminate such relationship at any time, with or without cause, to the extent
permitted by Applicable Laws.
16. Date of Grant. The date of grant of an Award will be, for all purposes, the date
on which the Administrator makes the determination granting such Award, or such other later date as
is determined by the Administrator. Notice of the determination will be provided to each
Participant within a reasonable time after the date of such grant.
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17. Term of Plan. Subject to Section 21 of the Plan, the Plan will become effective
upon the later to occur of (i) its adoption by the Board or (ii) immediately prior to the
Registration Date. It will continue in effect for a term of ten (10) years from the date adopted
by the Board, unless terminated earlier under Section 18 of the Plan.
18. Amendment and Termination of the Plan.
(a) Amendment and Termination. The Board may at any time amend, alter, suspend or
terminate the Plan.
(b) Stockholder Approval. The Company will obtain stockholder approval of any Plan
amendment to the extent necessary and desirable to comply with Applicable Laws.
(c) Effect of Amendment or Termination. No amendment, alteration, suspension or
termination of the Plan will impair the rights of any Participant, unless mutually agreed otherwise
between the Participant and the Administrator, which agreement must be in writing and signed by the
Participant and the Company. Termination of the Plan will not affect the Administrators ability
to exercise the powers granted to it hereunder with respect to Awards granted under the Plan prior
to the date of such termination.
19. Conditions Upon Issuance of Shares.
(a) Legal Compliance. Shares will not be issued pursuant to the exercise of an Award
unless the exercise of such Award and the issuance and delivery of such Shares will comply with
Applicable Laws and will be further subject to the approval of counsel for the Company with respect
to such compliance.
(b) Investment Representations. As a condition to the exercise of an Award, the
Company may require the person exercising such Award to represent and warrant at the time of any
such exercise that the Shares are being purchased only for investment and without any present
intention to sell or distribute such Shares if, in the opinion of counsel for the Company, such a
representation is required.
20. Inability to Obtain Authority. The inability of the Company to obtain authority
from any regulatory body having jurisdiction, which authority is deemed by the Companys counsel to
be necessary to the lawful issuance and sale of any Shares hereunder, will relieve the Company of
any liability in respect of the failure to issue or sell such Shares as to which such requisite
authority will not have been obtained.
21. Stockholder Approval. The Plan will be subject to approval by the stockholders of
the Company within twelve (12) months after the date the Plan is adopted by the Board. Such
stockholder approval will be obtained in the manner and to the degree required under Applicable
Laws.
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