Exhibit 10.2
(HEARTWARE LOGO) [c04300c0430001.gif]
Restricted Stock Units Notice
under the
HeartWare International, Inc.
2008 Stock Incentive Plan

         
Name of Grantee:
       
 
 
 
   

This Notice evidences the award of restricted stock units (each, an “RSU,” and
collectively, the “RSUs”) of HeartWare International, Inc., a Delaware
corporation (the “Company”), that have been granted to you pursuant to the
HeartWare International, Inc. 2008 Stock Incentive Plan (the “Plan”) and
conditioned upon your agreement to the terms of the attached Restricted Stock
Units Agreement (the “Agreement”). This Notice constitutes part of and is
subject to the terms and provisions of the Agreement and the Plan, which are
incorporated by reference herein. Each RSU is equivalent in value to one share
of the Company’s Common Stock and represents the Company’s commitment to issue
one share of the Company’s Common Stock at a future date, subject to the terms
of the Agreement and the Plan.

         
Grant Date:
       
 
 
 
   

Number of RSUs:
       
 
 
 
   

Vesting Schedule: All of the RSUs are nonvested and forfeitable as of the Grant
Date. So long as your Service (as defined in the Agreement) is continuous from
the Grant Date through the applicable date upon which vesting is scheduled to
occur:

  •  
33.3% of the RSUs will vest and become nonforfeitable on the first anniversary
of the Grant Date; and

  •  
33.3% of the RSUs will vest and become nonforfeitable on each subsequent
anniversary of the Grant Date through the third anniversary of such date.

To the extent not already vested or previously forfeited, your RSUs will become
100% vested and nonforfeitable as of the effective date of a Change in Control
or liquidation or dissolution of the Company and as of the date of your death or
your ceasing to be employed by the Company or an Affiliate by reason of
Disability or Retrenchment (as all such foregoing capitalized terms are defined
in the Agreement). Except in the case of your cessation of Service in connection
with a Change in Control or your death, Disability or Retrenchment, none of the
RSUs will become vested and nonforfeitable after your Service ceases.

             
 
HeartWare International, Inc.
     
 
Date    

I acknowledge that I have carefully read the Agreement and the prospectus for
the Plan. I agree to be bound by all of the provisions set forth in those
documents. I also consent to electronic delivery of all notices or other
information with respect to the RSUs or the Company.

             
 
Signature of Grantee
     
 
Date    

Standard RSU Agreement — US (2009)

 

 

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Restricted Stock Units Agreement
under the
HeartWare International, Inc.
2008 Stock Incentive Plan
1. Terminology. Unless otherwise provided in this Agreement, capitalized terms
used herein are defined in the Glossary at the end of this Agreement.
2. Vesting. All of the RSUs are nonvested and forfeitable as of the Grant Date.
So long as your Service is continuous from the Grant Date through the applicable
date upon which vesting is scheduled to occur, the RSUs will become vested and
nonforfeitable in accordance with the vesting schedule set forth in the Notice.
Vesting upon achievement of performance criteria, if applicable, requires a
declaration by the Company that an RSU has vested, but does not require any
action or election by you. The Company will advise you in writing when any of
your RSUs have vested. Except for the circumstances, if any, described on the
Notice, none of the RSUs will become vested and nonforfeitable after your
Service ceases.
3. Termination of Employment or Service. Unless otherwise provided on the
Notice, if your Service with the Company ceases for any reason, all RSUs that
are not then vested and nonforfeitable will be forfeited to the Company
immediately and automatically upon such cessation without payment of any
consideration therefore and you will have no further right, title or interest in
or to such RSUs or the underlying shares of Common Stock.
4. Restrictions on Transfer. Neither this Agreement nor any of the RSUs may be
assigned, transferred, pledged, hypothecated or disposed of in any way, whether
by operation of law or otherwise, and the RSUs shall not be subject to
execution, attachment or similar process. All rights with respect to this
Agreement and the RSUs shall be exercisable during your lifetime only by you or
your guardian or legal representative. Notwithstanding the foregoing, the RSUs
may be transferred upon your death by last will and testament or under the laws
of descent and distribution.
5. Settlement of RSUs.
(a) Manner of Settlement. You are not required to make any monetary payment
(other than applicable tax withholding, if required) as a condition to
settlement of the RSUs. The Company will issue to you, in settlement of your
RSUs and subject to the provisions of Section 6 below, the number of whole
shares of Common Stock that equals the number of whole RSUs that become vested,
and such vested RSUs will terminate and cease to be outstanding upon such
issuance of the shares. Upon issuance of such shares, the Company will determine
the form of delivery (e.g., a stock certificate or electronic entry evidencing
such shares) and may deliver such shares on your behalf electronically to the
Company’s designated stock plan administrator or such other broker-dealer as the
Company may choose at its sole discretion, within reason. Any share certificates
delivered will, unless the sale of the shares is registered or an exemption from
registration is available under applicable federal and state law, bear a legend
restricting transferability of such shares.
(b) Timing of Settlement. Your RSUs will be settled by the Company, via the
issuance of Common Stock as described herein, on the date that the RSUs become
vested and nonforfeitable. However, if a scheduled issuance date falls on a
Saturday, Sunday or federal holiday, such issuance date shall instead fall on
the next following day that the principal executive offices of the Company are
open for business. Notwithstanding the foregoing, in the event that (i) you are
subject to the Company’s policy permitting officers and directors to sell shares
only during certain “window” periods, in effect from time to time or you are
otherwise prohibited from selling shares of the Company’s Common Stock in the
public market and any shares covered by your RSUs are scheduled to be issued on
a day (the “Original Distribution Date”) that does not occur during an open
“window period” applicable to you, as determined by the Company in accordance
with such policy, or does not occur on a date when you are otherwise permitted
to sell shares of the Company’s Common Stock in the open market, (ii) the shares
covered by your RSUs are not covered by a contract, instruction or plan that
complies with Rule 10b5-1 of the Securities Exchange Act of 1934, as amended
(the “Exchange Act”), and (iii) the Company elects to satisfy its tax
withholding obligations by any of the
Standard RSU Agreement — US (2009)

 

 

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methods set forth in clause (iii), (iv) or (v) of Section 6 below, then such
shares shall not be issued and delivered on such Original Distribution Date and
shall instead be issued and delivered on the first business day of the next
occurring open “window period” applicable to you pursuant to such policy
(regardless of whether you are still providing continuous services at such time)
or the next business day when you are not prohibited from selling shares of the
Company’s Common Stock in the open market, but in no event later than the
fifteenth day of the third calendar month of the calendar year following the
calendar year in which the Original Distribution Date occurs. In all cases, the
issuance and delivery of shares under this Agreement is intended to comply with
Treasury Regulation 1.409A-1(b)(4) and shall be construed and administered in
such a manner.
6. Tax Withholding. On or before the time you receive a distribution of the
shares subject to your RSUs, or at any time thereafter as requested by the
Company, you hereby authorize any required withholding from the Common Stock
issuable to you and otherwise agree to make adequate provision in cash for any
sums required to satisfy the federal, state, local and foreign tax withholding
obligations of the Company or any Affiliate which arise in connection with your
RSUs (the “Withholding Taxes”). Additionally, the Company may, in its sole
discretion, satisfy all or any portion of the Withholding Taxes obligation
relating to your RSUs by any of the following means or by a combination of such
means: (i) withholding from any compensation otherwise payable to you by the
Company; (ii) causing you to tender a cash payment; (iii) delivering to a
broker, determined by the Company in its sole discretion, the number of shares
issued or otherwise issuable to you in connection with the RSUs necessary to
cover the amount of Withholding Taxes and any “usual and customary” brokerage
commissions (the “Sale to Cover Shares”) so that the broker can sell such shares
on your behalf on the Australian Securities Exchange or the NASDAQ Stock Market
and deliver the proceeds of such sale to the Company to be used to fund the
payment of the Withholding Taxes (a “Sale to Cover Election”); (iv) permitting
you to enter into a “same day sale” commitment with a broker-dealer that is a
member of the Financial Industry Regulatory Authority (a “FINRA Dealer”) whereby
you irrevocably elect to sell a portion of the shares to be delivered under the
Agreement to satisfy the Withholding Taxes and whereby the FINRA Dealer
irrevocably commits to forward the proceeds necessary to satisfy the Withholding
Taxes directly to the Company; or (v) withholding shares of Common Stock from
the shares of Common Stock issued or otherwise issuable to you in connection
with the RSUs with a Fair Market Value (measured as of the date shares of Common
Stock are issued to you pursuant to Section 5) equal to the amount of such
Withholding Taxes; provided, however, that the number of such shares of Common
Stock so withheld shall not exceed, by more than the Fair Market Value of one
share of Common Stock, the amount necessary to satisfy the Company’s required
tax withholding obligations using the minimum statutory withholding rates for
federal, state, local and foreign tax purposes, including payroll taxes, that
are applicable to supplemental taxable income. By accepting this award of RSUs,
in the event the Company, in its sole discretion, makes a Sale to Cover
Election, you hereby (a) authorize the Company to deliver the Sale to Cover
Shares to a brokerage account opened either in your name, the name of the
Company as the nominal holder of the Sale to Cover Shares for your benefit or in
such manner as is suggested by the broker; (b) authorize the broker to sell, on
your behalf, the Sale to Cover Shares on the Australian Securities Exchange or
the NASDAQ Stock at the market price per share at the time of such sale under
the same or similar methods, terms and conditions as the broker has then agreed
to sell other shares of the Common Stock in its capacity as “sales service
agent” (or an agent thereof) to the Company and to deliver the proceeds to the
Company to be used to fund the payment of the Withholding Taxes; (c) grant to
the Company an irrevocable limited power of attorney to: execute, on your
behalf, any and all documents that may be required by the broker in connection
with the Sale to Cover Election; prepare, file and execute, on your behalf, any
Form 144 filings (a “Form 144 Filing”) or other documents that it believes may
be necessary and/or desirable to demonstrate compliance with the “safe harbor”
provisions of Rule 144 (“Rule 144”) promulgated pursuant to the Securities Act
of 1933, as amended (the “Securities Act”); and prepare, execute and file, on
your behalf, any documents that it believes may be necessary or desirable to
demonstrate that your sale of the Sale to Cover Shares satisfies the “safe
harbor” provisions of Regulation S promulgated pursuant to the Securities Act
(“Regulation S”); (d) agree to execute as soon as possible upon request any
account opening or other documents required by the Company or the broker to
evidence your consent to the Sale to Cover Election; (e) agree to promptly
furnish to the Company any information that the Company reasonably requests to
assist the Company complete any Form 144 Filing; and (f) agree to promptly
furnish to the Company any written representations and/or covenants that the
Company reasonably requests in order to have removed any restrictive legends
affixed to the Sale to Cover Shares. You further agree to take any and all
actions required of you by the Company to assist you, the Company, the sales
service agent or the broker to demonstrate that your sale of the Sale to Cover
Shares
Standard RSU Agreement — US (2009)

 

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satisfies the “safe harbor” provisions of Rule 144, Regulation S and/or any
other exemptions from the registration requirements of Section 5 of the
Securities Act and any applicable U.S. state laws. You further acknowledge that
the foregoing written instruction is intended to constitute a written
instruction pursuant to Rule 10b5-1 of the Exchange Act. You shall be
responsible for payment of any brokerage commission relating to the Sale to
Cover Shares. By accepting this award of RSUs, you hereby expressly agree that
the Company shall not be liable to you and you agree to indemnify and hold the
Company harmless from any acts it takes in furtherance of the consummation of
the Sale to Cover Election as generally described above. Unless the tax
withholding obligations of the Company and/or any Affiliate are satisfied, the
Company shall have no obligation to deliver to you any Common Stock. In the
event the Company’s obligation to withhold arises prior to the delivery to you
of Common Stock or it is determined after the delivery of Common Stock to you
that the amount of the Company’s withholding obligation was greater than the
amount withheld by the Company, you agree to indemnify and hold the Company
harmless from any failure by the Company to withhold the proper amount.
7. Adjustments for Corporate Transactions and Other Events.
(a) Stock Dividend, Stock Split and Reverse Stock Split. Upon a stock dividend
of, or stock split or reverse stock split affecting, the Common Stock, the
number of outstanding RSUs shall, without further action of the Administrator,
be adjusted to reflect such event; provided, however, that any fractional RSUs
resulting from any such adjustment shall be eliminated. Adjustments under this
paragraph will be made by the Administrator, whose determination as to what
adjustments, if any, will be made and the extent thereof will be final, binding
and conclusive.
(b) Merger, Consolidation and Other Events. If the Company shall be the
surviving or resulting corporation in any merger or consolidation and the Common
Stock shall be converted into other securities, the RSUs shall pertain to and
apply to the securities to which a holder of the number of shares of Common
Stock subject to the RSUs would have been entitled. If the stockholders of the
Company receive by reason of any distribution in total or partial liquidation or
pursuant to any merger of the Company or acquisition of its assets, securities
of another entity, or other property (including cash), then the rights of the
Company under this Agreement shall inure to the benefit of the Company’s
successor, and this Agreement shall apply to the securities or other property
(including cash) to which a holder of the number of shares of Common Stock
subject to the RSUs would have been entitled, in the same manner and to the same
extent as the RSUs.
8. Non-Guarantee of Employment or Service Relationship. Nothing in the Plan or
this Agreement shall alter your at-will or other employment status or other
service relationship with the Company, nor be construed as a contract of
employment or service relationship between the Company and you, or as a
contractual right of you to continue in the employ of, or in a service
relationship with, the Company for any period of time, or as a limitation of the
right of the Company to discharge you at any time with or without cause or
notice and whether or not such discharge results in the forfeiture of any
nonvested and forfeitable RSUs or any other adverse effect on your interests
under the Plan.
9. Rights as Stockholder. You shall not have any of the rights of a stockholder
with respect to any shares of Common Stock that may be issued in settlement of
the RSUs until such shares of Common Stock have been issued to you. No
adjustment shall be made for dividends, distributions, or other rights for which
the record date is prior to the date such shares are issued, except as provided
in Section 7(d) of the Plan.
10. The Company’s Rights. The existence of the RSUs shall not affect in any way
the right or power of the Company or its stockholders to make or authorize any
or all adjustments, recapitalizations, reorganizations, or other changes in the
Company’s capital structure or its business, or any merger or consolidation of
the Company, or any issue of bonds, debentures, preferred or other stocks with
preference ahead of or convertible into, or otherwise affecting the Common Stock
or the rights thereof, or the dissolution or liquidation of the Company, or any
sale or transfer of all or any part of the Company’s assets or business, or any
other corporate act or proceeding, whether of a similar character or otherwise.
Standard RSU Agreement — US (2009)

 

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11. Restrictions on Issuance of Shares. The issuance of shares of Common Stock
upon settlement of the RSUs shall be subject to and in compliance with all
applicable requirements of federal, state, or foreign law with respect to such
securities. No shares of Common Stock may be issued hereunder if the issuance of
such shares would constitute a violation of any applicable federal, state, or
foreign securities laws or other law or regulations or the requirements of any
stock exchange or market system upon which the Common Stock may then be listed.
The inability of the Company to obtain from any regulatory body having
jurisdiction the authority, if any, deemed by the Company’s legal counsel to be
necessary to the lawful issuance of any shares subject to the RSUs shall relieve
the Company of any liability in respect of the failure to issue such shares as
to which such requisite authority shall not have been obtained. As a condition
to the settlement of the RSUs, the Company may require you to satisfy any
qualifications that may be necessary or appropriate, to evidence compliance with
any applicable law or regulation, and to make any representation or warranty
with respect thereto as may be requested by the Company.
12. Notices. All notices and other communications made or given pursuant to this
Agreement shall be given in writing and shall be deemed effectively given upon
receipt or, in the case of notices delivered by the Company to you, five
(5) days after deposit in the United States mail, postage prepaid, addressed to
you at the last address you provided to the Company, or in the case of notices
delivered to the Company by you, addressed to the Administrator, care of the
Company for the attention of its Secretary at its principal executive office or,
in either case, if the receiving party consents in advance, transmitted and
received via telecopy or via such other electronic transmission mechanism as may
be available to the parties. Notwithstanding the foregoing, the Company may, in
its sole discretion, decide to deliver any documents related to participation in
the Plan and this award of RSUs by electronic means or to request your consent
to participate in the Plan or accept this award of RSUs by electronic means. You
hereby consent to receive such documents by electronic delivery and, if
requested, to agree to participate in the Plan through an on-line or electronic
system established and maintained by the Company or another third party
designated by the Company.
13. Entire Agreement. This Agreement, together with the relevant Notice, contain
the entire agreement between the parties with respect to the RSUs granted
hereunder. Any oral or written agreements, representations, warranties, written
inducements, or other communications made prior to the execution of this
Agreement with respect to the RSUs granted hereunder shall be void and
ineffective for all purposes.
14. Amendment. This Agreement may be amended from time to time by the
Administrator in its discretion; provided, however, that this Agreement may not
be modified in a manner that would have a materially adverse effect on the RSUs
as determined in the discretion of the Administrator, except as provided in the
Plan or in a written document signed by each of the parties hereto.
15. 409A Savings Clause. This Agreement and the RSUs granted hereunder are
intended to fit within the “short-term deferral” exemption from Section 409A of
the Code as set forth in Treasury Regulation Section 1.409A-1(b)(4). In
administering this Agreement, the Company shall interpret this Agreement in a
manner consistent with such exemption. Notwithstanding the foregoing, if it is
determined that the RSUs fail to satisfy the requirements of the short-term
deferral rule and are otherwise deferred compensation subject to Section 409A,
and if you are a “Specified Employee” (within the meaning set forth
Section 409A(a)(2)(B)(i) of the Code) as of the date of your separation from
service (within the meaning of Treasury Regulation Section 1.409A-1(h)), then
the issuance of any shares that would otherwise be made upon the date of the
separation from service or within the first six (6) months thereafter will not
be made on the originally scheduled date(s) and will instead be issued in a lump
sum on the date that is six (6) months and one day after the date of the
separation from service, but if and only if such delay in the issuance of the
shares is necessary to avoid the imposition of additional taxation on you in
respect of the shares under Section 409A of the Code. Each installment of shares
that vests is intended to constitute a “separate payment” for purposes of
Section 409A of the Code and Treasury Regulation Section 1.409A-2(b)(2).
Standard RSU Agreement — US (2009)

 

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16. No Obligation to Minimize Taxes. The Company has no duty or obligation to
minimize the tax consequences to you of this award of RSUs and shall not be
liable to you for any adverse tax consequences to you arising in connection with
this award. You are hereby advised to consult with your own personal tax,
financial and/or legal advisors regarding the tax consequences of this award and
by signing the Notice, you have agreed that you have done so or knowingly and
voluntarily declined to do so.
17. Conformity with Plan. This Agreement is intended to conform in all respects
with, and is subject to all applicable provisions of, the Plan. Inconsistencies
between this Agreement and the Plan shall be resolved in accordance with the
terms of the Plan. In the event of any ambiguity in this Agreement or any
matters as to which this Agreement is silent, the Plan shall govern. A copy of
the Plan is available upon request to the Administrator.
18. No Funding. This Agreement constitutes an unfunded and unsecured promise by
the Company to issue shares of Common Stock in the future in accordance with its
terms. You have the status of a general unsecured creditor of the Company as a
result of receiving the grant of RSUs.
19. Effect on Other Employee Benefit Plans. The value of the RSUs subject to
this Agreement shall not be included as compensation, earnings, salaries, or
other similar terms used when calculating your benefits under any employee
benefit plan sponsored by the Company or any Affiliate, except as such plan
otherwise expressly provides. The Company expressly reserves its rights to
amend, modify, or terminate any of the Company’s or any Affiliate’s employee
benefit plans.
20. Governing Law. The validity, construction, and effect of this Agreement, and
of any determinations or decisions made by the Administrator relating to this
Agreement, and the rights of any and all persons having or claiming to have any
interest under this Agreement, shall be determined exclusively in accordance
with the laws of the State of Delaware, without regard to its provisions
concerning the applicability of laws of other jurisdictions. Any suit with
respect hereto will be brought in the federal or state courts in the district
which includes the city or town in which the Company’s principal executive
office is located, and you hereby agree and submit to the personal jurisdiction
and venue thereof.
21. Headings. The headings in this Agreement are for reference purposes only and
shall not affect the meaning or interpretation of this Agreement.
22. Electronic Delivery of Documents. By your signing the Notice, you
(i) consent to the electronic delivery of this Agreement, all information with
respect to the Plan and the RSUs, and any reports of the Company provided
generally to the Company’s stockholders; (ii) acknowledge that you may receive
from the Company a paper copy of any documents delivered electronically at no
cost to you by contacting the Company by telephone or in writing; (iii) further
acknowledge that you may revoke your consent to the electronic delivery of
documents at any time by notifying the Company of such revoked consent by
telephone, postal service or electronic mail; and (iv) further acknowledge that
you understand that you are not required to consent to electronic delivery of
documents.
23. No Future Entitlement. By your signing the Notice, you acknowledge and agree
that: (i) the grant of a restricted stock unit award is a one-time benefit which
does not create any contractual or other right to receive future grants of
restricted stock units, or compensation in lieu of yed stock units, even if
restricted stock units have been granted repeatedly in the past; (ii) all
determinations with respect to any such future grants and the terms thereof will
be at the sole discretion of the Committee; (iii) the value of the restricted
stock units is an extraordinary item of compensation which is outside the scope
of your employment contract, if any; (iv) the value of the restricted stock
units is not part of normal or expected compensation or salary for any purpose,
including, but not limited to, calculating any termination, severance,
resignation, redundancy, end of service payments or similar payments, or
bonuses, long-service awards, pension or retirement benefits; (v) the vesting of
the restricted stock units ceases upon termination of Service with the Company
or transfer of employment from the Company, or other cessation of eligibility
for any reason, except as may otherwise be explicitly provided in this
Agreement; (vi) the Company does not guarantee any future value of the
restricted stock units; and (vii) no claim or entitlement to compensation or
damages arises if the restricted stock units decrease or do not increase in
value and you irrevocably release the Company from any such claim that does
arise.
Standard RSU Agreement — US (2009)

 

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24. Personal Data. For the exclusive purpose of implementing, administering and
managing the restricted stock units, you, by execution of the Notice, consent to
the collection, receipt, use, retention and transfer, in electronic or other
form, of your personal data by and among the Company and its third party
vendors. You understand that personal data (including but not limited to, name,
home address, telephone number, employee number, employment status, social
security number, tax identification number, date of birth, nationality, job and
payroll location, data for tax withholding purposes and shares awarded,
cancelled, vested and unvested) may be transferred to third parties assisting in
the implementation, administration and management of the restricted stock units
and you expressly authorize such transfer as well as the retention, use, and the
subsequent transfer of the data by the recipient(s). You understand that these
recipients may be located in your country or elsewhere, and that the recipient’s
country may have different data privacy laws and protections than your country.
You understand that data will be held only as long as is necessary to implement,
administer and manage the restricted stock units. You understand that you may,
at any time, request a list with the names and addresses of any potential
recipients of the personal data, view data, request additional information about
the storage and processing of data, require any necessary amendments to data or
refuse or withdraw the consents herein, in any case without cost, by contacting
in writing the Company’s Secretary. You understand, however, that refusing or
withdrawing your consent may affect your ability to accept a restricted stock
unit award.
{Glossary begins on next page}
Standard RSU Agreement — US (2009)

 

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GLOSSARY
(a) “Administrator” means the Board of Directors of HeartWare International,
Inc. or such committee or committees appointed by the Board to administer the
Plan.
(b) “Affiliate” means any entity, whether now or hereafter existing, which
controls, is controlled by, or is under common control with HeartWare
International, Inc. (including but not limited to joint ventures, limited
liability companies, and partnerships). For this purpose, “control” means
ownership of 50% or more of the total combined voting power or value of all
classes of stock or interests of the entity.
(c) “Agreement” means this document, as amended from time to time, together with
the Plan which is incorporated herein by reference.
(d) “Change in Control” means: a (i) Change in Ownership of the Company,
(ii) Change in Effective Control of the Company, or (iii) Change in the
Ownership of Assets of the Company, all as described herein and construed in
accordance with Code section 409A.
(i) A Change in Ownership of the Company shall occur on the date that any one
Person acquires, or Persons Acting as a Group acquire, ownership of the capital
stock of the Company that, together with the stock held by such Person or Group,
constitutes more than 50% of the total fair market value or total voting power
of the capital stock of the Company. However, if any one Person is, or Persons
Acting as a Group are, considered to own more than 50% of the total fair market
value or total voting power of the capital stock of the Company, the acquisition
of additional stock by the same Person or Persons Acting as a Group is not
considered to cause a Change in Ownership of the Company or to cause a Change in
Effective Control of the Company (as described below). An increase in the
percentage of capital stock owned by any one Person, or Persons Acting as a
Group, as a result of a transaction in which the Company acquires its stock in
exchange for property will be treated as an acquisition of stock.
(ii) A Change in Effective Control of the Company shall occur on the date a
majority of members of the Company’s Board is replaced during any 12-month
period by directors whose appointment or election is not endorsed by a majority
of the members of the Company’s Board before the date of the appointment or
election.
(iii) A Change in the Ownership of Assets of the Company shall occur on the date
that any one Person acquires, or Persons Acting as a Group acquire (or has or
have acquired during the 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 51% of the total gross fair
market value of all of the assets of the Company immediately before such
acquisition or acquisitions. For this purpose, 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.
The following rules of construction apply in interpreting the definition of
Change in Control:
(A) A Person means any individual, entity or group within the meaning of
Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended,
other than employee benefit plans sponsored or maintained by the Company and by
entities controlled by the Company or an underwriter of the capital stock of the
Company in a registered public offering.
(B) Persons will be considered to be Persons Acting as a Group (or 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
corporation. If a Person owns stock in both corporations that enter into a
merger, consolidation, purchase or acquisition of stock, or similar transaction,
such shareholder is considered to be acting as a Group with other shareholders
only with respect to the ownership in that corporation before the transaction
giving rise to the change and not with respect to the ownership interest in the
other corporation. Persons will not be considered to be acting as a Group solely
because they purchase assets of the same corporation at the same time or
purchase or own stock of the same corporation at the same time, or as a result
of the same public offering.
Standard RSU Agreement — US (2009)

 

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(C) A Change in Control shall not include a transfer to a related person as
described in Code section 409A or a public offering of capital stock of the
Company.
(D) For purposes of this definition of Change in Control, Code section 318(a)
applies to determine stock ownership. Stock underlying a vested option is
considered owned by the individual who holds the vested option (and the stock
underlying an unvested option is not considered owned by the individual who
holds the unvested option). For purposes of the preceding sentence, however, if
a vested option is exercisable for stock that is not substantially vested (as
defined by Treasury Regulation section 1.83-3(b) and (j)), the stock underlying
the option is not treated as owned by the individual who holds the option.
(e) “Code” means the Internal Revenue Code of 1986, as amended, and the Treasury
regulations and other guidance promulgated thereunder.
(f) “Common Stock” means the common stock, US$.001 par value per share, of
HeartWare International, Inc.
(g) “Company” means HeartWare International, Inc. and its Affiliates, except
where the context otherwise requires. For purposes of determining whether a
Change in Control has occurred, Company shall mean only HeartWare International,
Inc.
(h) “Disability” means your permanent inability, by reason of physical
condition, mental illness or accident, to perform substantially all of the
duties of the position in which you have been employed or appointed (as
determined by the Administrator).
(i) “Fair Market Value” has the meaning set forth in the Plan. The Plan
generally defines Fair Market Value to mean the closing price per share of
Common Stock on the relevant date on the principal exchange or market on which
the Common Stock is then listed or admitted to trading or, if no sale is
reported for that date, the last preceding Business Day on which a sale was
reported.
(j) “Grant Date” means the effective date of a grant of RSUs made to you as set
forth in the relevant Notice.
(k) “Notice” means the statement, letter or other written notification provided
to you by the Company setting forth the terms of a grant of RSUs made to you.
(l) “Plan” means the HeartWare International, Inc. 2008 Stock Incentive Plan, as
amended from time to time.
(m) “Retrenchment” means a termination of your employment where the employer
company has made a definite decision expressly for the purpose of this provision
that the employer no longer wishes the job you have been doing to be done by
anyone and this is not due to ordinary or customary turnover of labour or your
performance or any breach of your terms of employment, and includes a situation
where:
(i) you cease to be employed by the Company because the employer company ceases
to be an Affiliate of the Company; or
(ii) the business in which you are engaged is transferred outside the Company
and its Affiliates.
Standard RSU Agreement — US (2009)

 

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(n) “RSU” means the Company’s commitment to issue one share of Common Stock at a
future date, subject to the terms of the Agreement and the Plan.
(o) “Service” means your employment, service as a non-executive director, or
other service relationship with the Company and its Affiliates. Your Service
will be considered to have ceased with the Company and its Affiliates if,
immediately after a sale, merger, or other corporate transaction, the trade,
business, or entity with which you are employed or otherwise have a service
relationship is not HeartWare International, Inc. or an Affiliate of HeartWare
International, Inc.
(p) “You” or “Your” means the recipient of the RSUs as reflected on the
applicable Notice. Whenever the word “you” or “your” is used in any provision of
this Agreement under circumstances where the provision should logically be
construed, as determined by the Administrator, to apply to the estate, personal
representative, or beneficiary to whom the RSUs may be transferred by will or by
the laws of descent and distribution, the words “you” and “your” shall be deemed
to include such person.
{End of Agreement}
Standard RSU Agreement — US (2009)

 

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