Exhibit 10.5

 

Vericel Corporation 2019 Omnibus Incentive Plan
Restricted Stock Unit Award Agreement for Company Employees

 

Name of Participant:

 

No. of Restricted Stock Units:

 

Grant Date:

 

Vesting Start Date:

 

Pursuant to the Vericel Corporation 2019 Omnibus Incentive Plan as amended
through the date hereof (the “Plan”), Vericel Corporation (the “Company”) hereby
grants an award of the number of Restricted Stock Units listed above (an
“Award”) to the Participant named above.  Each Restricted Stock Unit shall
relate to one share of common stock, no par value per share (each, a “Share”) of
the Company.

 

1.                                      Restrictions on Transfer of Award.  This
Award may not be sold, transferred, pledged, assigned or otherwise encumbered or
disposed of by the Participant, and any Shares issuable with respect to the
Award may not be sold, transferred, pledged, assigned or otherwise encumbered or
disposed of until (i) the Restricted Stock Units have vested as provided in
Paragraph 2 of this Agreement and (ii) Shares have been issued to the
Participant in accordance with the terms of the Plan and this Agreement.

 

2.                                      Vesting of Restricted Stock Units.  The
restrictions and conditions of Paragraph 1 of this Agreement shall lapse as to
25% of the number of Restricted Stock Units on each of the first four
anniversaries of the Vesting Start Date (each such date, a “Vesting Date”),
provided that the Participant remains an employee of the Company or an Affiliate
on the relevant Vesting Date.  Subject to the terms of the Plan, the Committee
may at any time accelerate the vesting schedule specified in this Paragraph 2.

 

3.                                      Termination of Employment.  Subject to
the discretion of the Committee to permit continued vesting of the Restricted
Stock Units, if the Participant’s employment with the Company and its Affiliates
terminates for any reason prior to the satisfaction of the vesting conditions
set forth in Paragraph 2 above, any Restricted Stock Units that have not vested
as of such date shall automatically and without notice terminate and be
forfeited, and neither the Participant nor any of his or her successors, heirs,
assigns, or personal representatives will thereafter have any further rights or
interests in such unvested Restricted Stock Units.

 

4.                                      Issuance of Shares.  As soon as
practicable following each Vesting Date (but in no event later than two and
one-half months after the end of the year in which the Vesting Date occurs), the
Company shall issue to the Participant the number of Shares equal to the
aggregate number of Restricted Stock Units that have vested pursuant to
Paragraph 2 of this Agreement on such date and the Participant shall thereafter
have all the rights of a stockholder of the Company with respect to such Shares.

 

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5.                                      Change in Control.

 

(a)                                 Effect on Award.  In the event of a Change
in Control, to the extent the successor company (or a subsidiary or parent
thereof) does not assume or substitute for the Award on substantially the same
terms and conditions, the Award shall (i) vest and become nonforfeitable on the
day prior to the date of the Change in Control if the Participant is then
employed by the Company or an Affiliate and (ii) terminate on the date of the
Change in Control.  In the event of a Change in Control, to the extent the
successor company (or a subsidiary or parent thereof) assumes or substitutes for
the Award on substantially the same terms and conditions (which may include
providing for settlement in the common stock of the successor company (or a
subsidiary or parent thereof)), if within twelve (12) months following the date
of the Change in Control the Participant’s employment is terminated by the
Company or an Affiliate (or the successor company or a subsidiary or parent
thereof) without Cause or by the Participant for Good Reason, the Award shall
become fully vested and nonforfeitable on the date the Participant’s employment
is terminated.

 

(b)                                 Cause.  For purposes of this Agreement,
except as otherwise provided in paragraph (d) of this Section, “Cause” shall
mean a determination by the Committee that the Participant has (i) materially
breached his or her employment or service contract with the Company, (ii) been
engaged in disloyalty to the Company or an Affiliate, including, without
limitation, fraud, embezzlement, theft, commission of a felony or proven
dishonesty in the course of his or her employment or service, which will
materially harm the interests of the Company or the Affiliate, (iii) disclosed
trade secrets or confidential information of the Company to persons not entitled
to receive such information, (iv) breached any written noncompetition or
nonsolicitation agreement between the Participant and the Company or an
Affiliate in a manner which the Committee determines will cause material harm to
the interests of the Company or an Affiliate, or (v) engaged in such other
behavior materially detrimental to the interests of the Company, in each case as
the Committee determines.  The Committee’s determination of the reason for
termination of the Participant’s employment shall be conclusive and binding on
the Participant and his or her representatives or legatees.

 

(c)                                  Good Reason.  For purposes of this
Agreement, except as otherwise provided in paragraph (d) of this Section, “Good
Reason” shall mean (i) a reduction by the Company or an Affiliate or a successor
company (or a subsidiary or parent thereof) of more than 10% in Participant’s
rate of annual base salary as in effect immediately prior to such Change in
Control; (ii) a reduction by the Company or an Affiliate or a successor company
(or a subsidiary or parent thereof) of more than 10% of the Participant’s
individual annual target or bonus opportunity, except under circumstances where
the Company or an Affiliate or a successor company (or a subsidiary or parent
thereof) implement changes to the bonus structure of similarly situated
employees, including but not limited to changes to the bonus structure designed
to integrate the Company’s or Affiliate’s personnel with other personnel of the
successor company (or an subsidiary or parent thereof); (iii) a significant and
substantial reduction by the Company or an Affiliate or a successor company (or
a subsidiary or parent thereof) of the Participant’s responsibilities and
authority, as compared with the Participant’s responsibilities and authority in
effect immediately preceding the Change in Control; or (iv) any requirement of
the Company or an Affiliate or a successor company (or a subsidiary or parent
thereof) that Participant be based anywhere more than fifty (50) miles from
Participant’s primary office location at the time of the Change in Control;
provided the Participant provides at least

 

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ninety (90) days’ notice to the Company following the initial occurrence of any
such event and the Company fails to cure such event within thirty (30) days
thereafter.

 

(d)                                 Other Agreement or Plan.  The provisions of
this Section (including the definitions of Cause and Good Reason), shall be
superseded by the specific provisions, if any, of a written employment or
severance agreement between the Participant and the Company or a severance plan
of the Company covering the Participant, including a change in control severance
agreement or plan, to the extent such a provision provides a greater benefit to
the Participant.

 

6.                                      Incorporation of Plan.  Notwithstanding
anything herein to the contrary, this Agreement shall be subject to and governed
by all the terms and conditions of the Plan, including the powers of the
Committee set forth in Section 4.2 of the Plan.  Capitalized terms in this
Agreement shall have the meaning specified in the Plan, unless a different
meaning is specified herein.

 

7.                                      Tax Withholding.   The Participant
shall, not later than the date as of which the receipt of this Award becomes a
taxable event for Federal income tax purposes, pay to the Company or make
arrangements satisfactory to the Committee for payment of any Federal, state,
and local taxes required by law to be withheld on account of such taxable
event.  Unless otherwise determined by the Committee, the Company shall cause
the required tax withholding obligation to be satisfied by withholding from
Shares to be issued to the Participant a number of Shares with an aggregate Fair
Market Value that would satisfy the withholding amount due.

 

8.                                      Section 409A of the Code.  This
Agreement shall be interpreted in such a manner that all provisions relating to
the settlement of the Award are exempt from the requirements of Section 409A of
the Code as “short-term deferrals” as described in Section 409A of the Code.

 

9.                                      Severability.  If any provision of this
Agreement shall be held unlawful or otherwise invalid or unenforceable in whole
or in part by a court of competent jurisdiction, such provision shall (i) be
deemed limited to the extent that such court of competent jurisdiction deems it
lawful, valid and/or enforceable and as so limited shall remain in full force
and effect, and (ii) not affect any other provision of this Agreement or part
thereof, each of which shall remain in full force and effect.

 

10.                               Governing Law.  This Agreement shall be
governed by, and interpreted in accordance with, the laws of the State of
Michigan, other than its conflict of laws principles.

 

11.                               Headings.  The headings in this Agreement are
for reference purposes only and shall not affect the meaning or interpretation
of this Agreement.

 

12.                               Notices.  All notices required or permitted
under this Agreement shall be in writing and shall be sufficiently made or given
if hand delivered or mailed by registered or certified mail, postage prepaid. 
Notice by mail shall be deemed delivered on the date on which it is postmarked.

 

Notices to the Company should be addressed to:

 

Vericel Corporation

64 Sidney Street

 

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Cambridge, MA 02139

Attention: Chief Financial Officer

 

Notice to the Participant should be addressed to the Participant at the
Participant’s address as it appears on the Company’s records.

 

The Company or the Participant may by writing to the other party, designate a
different address for notices.  If the receiving party consents in advance,
notice may be transmitted and received via telecopy or via such other electronic
transmission mechanism as may be available to the parties.  Such notices shall
be deemed delivered when received.

 

13.                               No Obligation to Continue Employment.  Neither
the Company nor any Affiliate is obligated by or as a result of the Plan or this
Agreement to continue the Participant in employment and neither the Plan nor
this Agreement shall interfere in any way with the right of the Company or any
Affiliate to terminate the employment of the Participant at any time.

 

14.                               Entire Agreement; Modification.  The Agreement
contains the entire agreement between the parties with respect to the subject
matter contained herein and may not be modified, except as provided in the Plan
or in a written document signed by each of the parties hereto, and may be
rescinded only by a written agreement signed by both parties.

 

15.                               Data Privacy Consent.  In order to administer
the Plan and this Agreement and to implement or structure future equity grants,
the Company, its subsidiaries and affiliates and certain agents thereof
(together, the “Relevant Companies”) may process any and all personal or
professional data, including but not limited to Social Security or other
identification number, home address and telephone number, date of birth and
other information that is necessary or desirable for the administration of the
Plan and/or this Agreement (the “Relevant Information”).  By entering into this
Agreement, the Participant (i) authorizes the Company to collect, process,
register and transfer to the Relevant Companies all Relevant Information;
(ii) waives any privacy rights the Participant may have with respect to the
Relevant Information; (iii) authorizes the Relevant Companies to store and
transmit such information in electronic form; and (iv) authorizes the transfer
of the Relevant Information to any jurisdiction in which the Relevant Companies
consider appropriate.  The Participant shall have access to, and the right to
change, the Relevant Information.  Relevant Information will only be used in
accordance with applicable law.

 

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