Document:

Exhibit 10.17

 

Option No.:

 

 

OPTINOSE, INC.

2010 STOCK INCENTIVE PLAN

(AS AMENDED AND RESTATED AS OF SEPTEMBER 19, 2017)

 

NON-QUALIFIED STOCK OPTION AGREEMENT

 

OptiNose, Inc., a Delaware corporation (the “Company”), hereby grants an option to purchase shares of its common stock, $0.001 par value per share (the “Stock”), to the optionee named below (the “Option”).  The terms and conditions of the Option are set forth in this cover sheet, in the attachment (together with the cover sheet, the “Agreement”) and in the Company’s 2010 Stock Incentive Plan, as amended and restated as of September 19, 2017 (the “Plan”).

 

Grant Date:                       (the “Grant Date”)

 

Name of Optionee:

 

Number of Shares of Stock Covered by Option:

 

Option Price per Share:  $

 

Vesting Start Date:

 

Vesting Schedule: [           shares of Stock will be eligible to vest based on the passage of time as set forth herein][; and            shares of Stock will be eligible to vest based on the achievement of certain performance goals as set forth herein].

 

By signing this cover sheet, you agree to all of the terms and conditions described in this Agreement and in the Plan, a copy of which is also attached.  You acknowledge that you have carefully reviewed the Plan, and agree that the Plan will control in the event any provision of this Agreement should appear to be inconsistent.  Certain capitalized terms used in this Agreement are defined in the Plan, and have the respective meanings set forth in the Plan.

 

	
Optionee:
    	
 
    	
 
    
	
 
    	
(Signature)
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Company:
    	
 
    	
 
    
	
 
    	
(Signature)
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
Title:
    	
 
    	
 
    
				

 

Attachment

 

This is not a stock certificate or a negotiable instrument

 

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OPTINOSE, INC.

2010 STOCK INCENTIVE PLAN

(AS AMENDED AND RESTATED AS OF SEPTEMBER 19, 2017)

 

NON-QUALIFIED STOCK OPTION AGREEMENT

 

	
Non-Qualified Stock Option
    	
 
    	
This option is not intended to be an incentive stock   option under Section 422 of the Code and will be interpreted   accordingly.
    
	
 
    	
 
    	
 
    
	
Vesting
    	
 
    	
This Option is only exercisable before it expires   and then only with respect to the vested portion of the Option. Subject to   the preceding sentence, you may exercise this Option, in whole or in part, to   purchase a whole number of vested shares, by following the procedures set   forth in the Plan and below in this Agreement.

 

[Applicable time and/or performance-based vesting   conditions.]
    
	
 
    	
 
    	
 
    
	
Term
    	
 
    	
Your Option will expire in any event at the close of   business at Company headquarters on the day before the 10th anniversary of   the Grant Date, as shown on the cover sheet. Your Option will expire earlier   if your Service terminates, as described below.
    
	
 
    	
 
    	
 
    
	
Regular Termination
    	
 
    	
If your Service terminates for any reason other than   death, Disability or Cause, including voluntary termination for retirement,   then the vested portion of your Option will expire at the close of business   at Company headquarters on the [        day]   after your termination date. Any portion of your Option that is not   exercisable at the time of your termination date shall immediately terminate.
    
	
 
    	
 
    	
 
    
	
Termination for
   Cause
    	
 
    	
If your Service is terminated for Cause or for a   voluntary termination after the occurrence of an event that would be grounds   for a termination for Cause, then you shall immediately forfeit all rights to   your Option, whether vested or unvested, and the Option shall immediately   expire. In addition, notwithstanding any provision to the contrary in this   Agreement, if you engage in conduct that constitutes Cause after your   termination of Service, your Option shall immediately terminate.
    
	
 
    	
 
    	
 
    
	
Death
    	
 
    	
If your Service terminates because of your death,   then your vested Option will expire at the close of business at Company   headquarters [        months] after   the date of death. During that [        month]   period, your estate or heirs may exercise the vested portion of your Option.   Any portion of your Option that is not exercisable at the time of your   termination date shall immediately terminate.

 

In addition, if you die during the [         day]   period described in connection with a regular termination (i.e., a   termination of your Service not on account of your death, Disability or   Cause), and a vested 
    

 

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portion of your Option has not yet been exercised,   then your Option will instead expire [        months]   after your termination date. In such a case, during the period following your   death up to [        months] after   your termination date, your estate or heirs may exercise the vested portion   of your Option. Any portion of your Option that is not exercisable at the   time of your termination date shall immediately terminate.
    
	
 
    	
 
    	
 
    
	
Disability
    	
 
    	
If your Service terminates because of your   Disability, then your vested Option will expire at the close of business at   Company headquarters [        months]   after your termination date. Any portion of your Option that is not   exercisable at the time of your termination date shall immediately terminate.
    
	
 
    	
 
    	
 
    
	
Leaves of Absence
    	
 
    	
For purposes of this Option, your Service does not   terminate when you go on a bona fide   employee leave of absence that was approved by the Company in writing, if the   terms of the leave provide for continued Service crediting, or when continued   Service crediting is required by applicable law. However, your Service will   be treated as terminating 90 days after you went on employee leave, unless   your right to return to active work is guaranteed by law or by a contract.   Your Service terminates in any event when the approved leave ends unless you   immediately return to active employee work.

 

The Company determines, in its sole discretion,   which leaves count for this purpose, and when your Service terminates for all   purposes under the Plan. The Company’s decision is final and binding.
    
	
 
    	
 
    	
 
    
	
Notice of Exercise
    	
 
    	
When you wish to exercise this Option, you must   notify the Company by filing a Notice of Option Exercise in substantially the   form attached hereto as Exhibit A. Your notice must specify how   many shares of Stock you wish to purchase (in a parcel of at least 100   shares, unless a lesser number remains available for exercise under the   Option). Your notice must also specify how your shares of Stock should be   registered (e.g., in your name only or in your and your spouse’s names as   joint tenants with right of survivorship). The notice will be effective when   it is received by the Company.

 

If someone else wants to exercise this Option after   your death, that person must prove to the Company’s satisfaction that he or   she is entitled to do so.
    
	
 
    	
 
    	
 
    
	
Form of Payment
    	
 
    	
When you submit your notice of exercise, you must   include payment of the Option Price for the shares of Stock you are   purchasing. Payment may be made in one (or a combination) of the following   forms:

 

·                  Cash,   your personal check, a cashier’s check, a money order or another cash   equivalent acceptable to the Company.
    

 

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·                  By   surrendering to the Company shares of Stock. The value of the surrendered   shares, determined based on the Fair Market Value on the date of such   surrender, will be applied to the Option Price.

 

·                  To   the extent a public market for the Stock exists as determined by the Company,   by delivery (on a form acceptable to the Committee) of an irrevocable   direction to a licensed securities broker acceptable to the Company to sell   shares of Stock and to deliver all or part of the sale proceeds to the   Company in payment of the aggregate Option Price.

 

·                  [By   electing to have the Company withhold the number of shares of Stock that would   otherwise be issuable in an amount equal in value to the aggregate Option   Price.]
    
	
 
    	
 
    	
 
    
	
Withholding Taxes
    	
 
    	
The Company or an Affiliate, as the case may be,   shall have the right to deduct from payments of any kind otherwise due to you   any foreign, federal, state, or local taxes of any kind required by law to be   withheld with respect to the issuance of any shares of Stock upon the   exercise of this Option. At the time of such exercise, you shall pay to the   Company or the Affiliate, as the case may be, any amount that the Company or   the Affiliate may reasonably determine to be necessary to satisfy such   withholding obligation. Subject to the prior approval of the Company or the   Affiliate, which may be withheld by the Company or the Affiliate, as the case   may be, in its sole discretion, you may elect to satisfy such obligations, in   whole or in part, (i) by causing the Company or the Affiliate to   withhold shares of Stock otherwise issuable to you or (ii) by delivering   to the Company or the Affiliate shares of Stock already owned by you that are   not subject to any repurchase, forfeiture, unfulfilled vesting, or other   similar requirements. The shares of Stock so delivered or withheld shall have   an aggregate Fair Market Value equal to such withholding obligations. The   Fair Market Value of the shares of Stock used to satisfy such withholding   obligation shall be determined by the Board as of the date that the amount of   tax to be withheld is to be determined. The maximum number of shares of Stock   that may be withheld from this Option to satisfy any foreign, federal, state,   or local tax withholding requirements upon the exercise of this Option may   not exceed such number of shares of Stock having a Fair Market Value equal to   the minimum statutory amount (or, if permitted by the Company, such other   rate as will not cause adverse accounting consequences and is permitted under   applicable IRS withholding rules) required by the Company or the applicable   Affiliate to be withheld and paid to any such foreign, federal, state, or local   taxing authority with respect to such exercise.
    
	
 
    	
 
    	
 
    
	
Issuance
    	
 
    	
The issuance of the Stock upon the exercise of this   Option shall be evidenced in such a manner as the Company, in its discretion,   will 
    

 

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deem appropriate, including, without limitation,   book-entry, registration or issuance of one or more Stock certificates.
    
	
 
    	
 
    	
 
    
	
Transfer of Option
    	
 
    	
During your lifetime, only you (or, in the event of   your legal incapacity or incompetency, your guardian or legal representative)   may exercise this Option. You cannot transfer or assign this Option. For   instance, you may not sell this Option or use it as security for a loan. If   you attempt to do any of these things, this Option will immediately become   invalid. You may, however, dispose of this Option in your will or by grant to   certain Permitted Transferees (provided that such a disposition is in   compliance with Section 8.10 of the Plan), or it may be transferred upon   your death by the laws of descent and distribution.

 

Regardless of any marital property settlement   agreement, the Company is not obligated to honor a notice of exercise from   your spouse, nor is the Company obligated to recognize your spouse’s interest   in your Option in any other way.
    
	
 
    	
 
    	
 
    
	
Retention Rights
    	
 
    	
Neither your Option nor this Agreement constitutes   an agreement of employment or gives you the right to be retained by the   Company or an Affiliate in any capacity. Except as otherwise provided in any   applicable employment agreement between you and the Company, the Company and   its Affiliates reserve the right to terminate your Service at any time and   for any reason.
    
	
 
    	
 
    	
 
    
	
Stockholder Rights
    	
 
    	
You, or your estate or heirs, have no rights as a   stockholder of the Company until a certificate for your Option shares has   been issued (or an appropriate book entry has been made). No adjustments are   made for dividends or other rights if the applicable record date occurs   before your stock certificate is issued (or an appropriate book entry has   been made), except as described in the Plan.
    
	
 
    	
 
    	
 
    
	
Clawback
    	
 
    	
The Option is subject to mandatory repayment by you   to the Company to the extent you are or in the future become subject to   (x) any Company or Affiliate “clawback” or recoupment policy that is   adopted to comply with the requirements of any Applicable Laws, or   (y) any Applicable Laws which impose mandatory recoupment, under   circumstances set forth in such Applicable Laws.
    
	
 
    	
 
    	
 
    
	
Adjustments
    	
 
    	
In the event of a stock split, a stock dividend or a   similar change in the Stock, the number of shares covered by this Option and   the Option Price shall be adjusted (and rounded down to the nearest whole   number) if required pursuant to the Plan.
    
	
 
    	
 
    	
 
    
	
Applicable Law
    	
 
    	
This Agreement will be interpreted and enforced   under the laws of the State of Delaware, other than any conflicts or choice   of law rule or principle that might otherwise refer construction or   interpretation of this Agreement to the substantive law of another   jurisdiction.
    

 

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Forfeiture of Rights
    	
 
    	
If you should take actions in competition with the   Company, the Company shall have the right to cause a forfeiture of your   rights hereunder, including, but not limited to, the right to cause:   (i) a forfeiture of the Option, and (ii) with respect to the period   commencing twelve (12) months prior to your termination of Service with the   Company and ending twelve (12) months following such termination of Service   (A) a forfeiture of any gain recognized by you upon the exercise of the   Option or (B) a forfeiture of any Stock acquired by you upon the   exercise of the Option (but the Company will pay you the Option Price without   interest). Unless otherwise specified in an employment or other agreement   between the Company or an Affiliate and you, you take actions in competition   with the Company if you directly or indirectly, own, manage, operate, join or   control, or participate in the ownership, management, operation or control of,   or are a proprietor, director, officer, stockholder, member, partner or an   employee or agent of, or a consultant to any business, firm, corporation,   partnership or other entity which engages, directly or indirectly, in   research, developing, manufacturing, marketing, sale or licensing   pharmaceutical, medical device or specialty pharmaceutical products or   products in the healthcare sector; provided, however, being a   holder of less than 1% of the outstanding equity of a public company or   mutual fund shall not be deemed to be in competition with the Company.

 

If you are not a party to a non-competition and   confidentiality agreement with the Company on the date of this Agreement, you   will concurrently herewith enter into such non-competition and confidentiality   agreement in a form reasonably acceptable to the Company.
    
	
 
    	
 
    	
 
    
	
Data Privacy
    	
 
    	
In order to administer the Plan, the Company may   keep and process personal data about you. Such data includes but is not   limited to the information provided in this Agreement and any changes   thereto, other appropriate personal and financial data about you such as home   address and business addresses and other contact information, payroll   information and any other information that might be deemed appropriate by the   Company to facilitate the administration of the Plan.

 

By accepting this Option, you give explicit consent   to the Company to keep and process any such personal data. You also give   explicit consent to the Company to transfer any such personal data outside   the country in which you work or are employed, including, with respect to   non-U.S. resident optionees, to the United States, to transferees who shall   include the Company and other persons who are designated by the Company to   administer the Plan.
    

 

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Consent to Electronic Delivery
    	
 
    	
The Company may choose to deliver certain statutory   materials relating to the Plan in electronic form. By accepting this grant   you agree that the Company may deliver the Plan prospectus and the Company’s   annual report to you in an electronic format. If at any time you would prefer   to receive paper copies of these documents, as you are entitled to, you may   request paper copies of these documents.
    
	
 
    	
 
    	
 
    
	
Severability
    	
 
    	
The provisions of this Agreement are severable and   if any one or more provisions are determined to be illegal or otherwise   unenforceable, in whole or in part, the remaining provisions shall   nevertheless be binding and enforceable.
    
	
 
    	
 
    	
 
    
	
Waiver
    	
 
    	
No waiver of any breach or condition of this   Agreement shall be deemed to be a waiver of any other or subsequent breach or   condition whether of like or different nature.
    
	
 
    	
 
    	
 
    
	
Entire Agreement
    	
 
    	
The text of the Plan is incorporated in this   Agreement by reference.

 

This Agreement and the Plan (and the other   agreements or documents referred to herein or therein) constitute the entire   contract between the parties hereto with regard to the subject matter hereof.   They supersede any other agreements, representations or understandings (whether   oral or written and whether express or implied) which relate to the subject   matter hereof.
    
	
 
    	
 
    	
 
    
	
Code Section 409A
    	
 
    	
It is intended that this Option comply with   Section 409A of the Code (“Section 409”) or an exemption to   Section 409A. To the extent that the Company determines that you would   be subject to the additional taxes or penalties imposed on certain   non-qualified deferred compensation plans pursuant to Section 409A as a   result of any provision of this Agreement, such provision shall be deemed   amended to the minimum extent necessary to avoid application of such   additional tax. The nature of any such amendment shall be determined by the   Company. Notwithstanding anything to the contrary in this Agreement, neither   the Company, any Affiliate, the Board, nor the Committee will have any   liability to you for any excise tax or penalty imposed on you under   Section 409A.
    

 

By signing the cover sheet of this Agreement, you agree to all of the terms and conditions described above and in the Plan.

 

*   *   *   *

 

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Exhibit A

 

Form of Notice of Option Exercise

 

 

 

OptiNose, Inc.

1020 Stony Hill Road

Third Floor, Suite 300

Yardley, PA 19067

 

Dear Sir or Madam:

 

The undersigned (the “Purchaser”) elects to exercise his/her Option to purchase          shares of common stock, $0.001 par value per share (the “Stock”), of OptiNose, Inc. (the “Company”) under and pursuant to the Non-Qualified Stock Option Agreement dated as of                (the “Option Agreement”).

 

Purchaser herewith delivers to the Company the full purchase price for the Stock as follows.  (Check all that apply and complete as appropriate.  The total payment must equal the aggregate Option Price of the Stock.)

 

o cash in the amount of $          .

 

o check in the amount of $          .

 

o by surrender of shares of Stock owned by the individual with a value of $        represented by certificate(s) number        .

 

o by delivery (on a form acceptable to the Committee) of an irrevocable direction to a licensed securities broker acceptable to the Company to sell shares of Stock and to deliver all or part of the sale proceeds to the Company in payment of an amount equal to the aggregate Option Price of the Stock.

 

o [by electing to have the Company withhold the number of shares of Stock that would otherwise be issuable in an amount equal in value to the aggregate Option Price of the Stock.]

 

The name or names to be on the stock certificate or certificates issuable upon exercise and the address and Social Security Number of such person(s) is as follows:

 

	
Name:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Address:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Social Security Number:
    	
 
    	
 
    
				

 

The Plan and the Option Agreement are incorporated herein by reference.  This Notice of Option Exercise, the Plan and the Option Agreement constitute the entire agreement of the parties with respect to the subject matter hereof and supersede in their entirety all prior undertakings and agreements of the

 

 

Company and Purchaser with respect to the subject matter hereof, and may not be modified adversely to the Purchaser’s interest except by means of a writing signed by the Company and Purchaser.  This Notice of Option Exercise is governed by the internal substantive laws, but not the choice of law rules, of the State of Delaware.

 

	
Very truly yours,
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Date
    	
 
    	
PurchaserExhibit 10.18

 

 

OPTINOSE, INC.

 

2017 EMPLOYEE STOCK PURCHASE PLAN

 

 

 

OPTINOSE, INC.

2017 EMPLOYEE STOCK PURCHASE PLAN

 

1.                                      PURPOSE AND INTERPRETATION

 

(a)                                 The purpose of the OptiNose, Inc. 2017 Employee Stock Purchase Plan is to encourage and to enable Eligible Employees of the Company and its Participating Affiliates, through after-tax payroll deductions or periodic cash contributions, to acquire proprietary interests in the Company through the purchase and ownership of shares of Stock.  The Plan is intended to benefit the Company and its stockholders (a) by incentivizing Participants to contribute to the success of the Company and to operate and manage the Company’s business in a manner that will provide for the Company’s long-term growth and profitability and that will benefit its stockholders and other important stakeholders and (b) by encouraging Participants to remain in the employ of the Company or its Participating Affiliates. The Plan was adopted by the Board on September 19, 2017, and was approved by the Company’s stockholders on October 2, 2017.

 

(b)                                 The Plan and the Options granted under the Plan are intended to satisfy the requirements for an “employee stock purchase plan” under Code Section 423.  Notwithstanding the foregoing, the Company makes no undertaking to, nor representation that it will, maintain the qualified status of the Plan or any Options granted under the Plan.  In addition, Options that do not satisfy the requirements for an “employee stock purchase plan” under Code Section 423 may be granted under the Plan pursuant to the rules, procedures, or sub-plans adopted by the Administrator, in its sole discretion, for certain Eligible Employees.

 

2.                                      DEFINITIONS

 

(a)                                 “Account” shall mean a bookkeeping account established and maintained to record the amount of funds accumulated pursuant to the Plan with respect to a Participant for the purpose of purchasing shares of Stock under the Plan.

 

(b)                                 “Administrator” shall mean the Board, the Compensation Committee of the Board, or any other committee of the Board designated by the Board.

 

(c)                                  “Board” shall mean the Board of Directors of the Company.

 

(d)                                 “Code” shall mean the Internal Revenue Code of 1986, as amended, as now in effect or as hereafter amended, and any successor thereto.  References in the Plan to any Code Section shall be deemed to include, as applicable, regulations and guidance promulgated under such Code Section.

 

(e)                                  “Company” shall mean OptiNose, Inc., a Delaware corporation, and any successor thereto.

 

(f)                                   “Custodian” shall mean the third-party administrator designated by the Administrator from time to time.

 

(g)                                  “Effective Date” shall mean the date on which the Registration Statement covering the initial public offering of Stock is declared effective by the United States Securities and Exchange Commission.

 

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(h)                                 “Eligible Compensation” shall mean, unless otherwise determined by the Administrator, all compensation reportable on Form W-2, including, without limitation, base straight time gross earnings, commissions, payments for overtime, shift premiums, incentive compensation, and bonuses, plus any amounts contributed by the Participant pursuant to a salary reduction agreement to a qualified deferred compensation plan described in Section 401(k) of the Code or a cafeteria plan described in Section 125 of the Code maintained by the Company or a Participating Affiliate, but excluding non-cash fringe benefits, expense reimbursements, income realized as a result of participation in any stock option, stock purchase or similar plan, contributions by the Company or a Participating Affiliate to a qualified deferred compensation plan and severance.

 

(i)                                     “Eligible Employee” shall mean a natural person who has been an employee (including an officer) of the Company or a Participating Affiliate for at least one (1) month as of an Offering Date, except the following, who shall not be eligible to participate under the Plan: (i) an employee whose customary employment is twenty (20) hours or less per week, (ii) an employee whose customary employment is for not more than five (5) months in any calendar year, (iii) an employee who, after exercising his or her rights to purchase shares of Stock under the Plan, would own (directly or by attribution pursuant to Code Section 424(d)) shares of Stock (including shares that may be acquired under any outstanding Options) representing five percent (5%) or more of the total combined voting power of all classes of stock of the Company, (iv) an employee who is a citizen or resident of a foreign jurisdiction (without regard to whether such employee is also a U.S. citizen or resident alien), if the grant of an Option under the Plan or an Offering Period to such employee is prohibited under the laws of such foreign jurisdiction or compliance with the laws of such foreign jurisdiction would cause the Plan or an Offering Period to violate the requirements of Code Section 423 and (v) any other natural person whom the Administrator determines to exclude from an offering designated to satisfy the requirements of Code Section 423 provided such exclusion is permitted by Code Section 423 and the guidance issued thereunder.   The Administrator may, at any time in its sole discretion, if it deems it advisable to do so, exclude the participation of the employees of a particular Participating Affiliate from eligibility to participate in a future Offering Period. Notwithstanding the foregoing, for purposes of a Non-423(b) Offering under the Plan, if any, the Administrator shall have the authority, in its sole discretion, to establish a different definition of Eligible Employee as it may deem advisable or necessary.

 

(j)                                    “Enrollment Form” shall mean the agreement(s) between the Company and an Eligible Employee, in such written, electronic, or other format and/or pursuant to such written, electronic, or other process as may be established by the Administrator from time to time, pursuant to which an Eligible Employee elects to participate in the Plan or to which a Participant elects to make changes with respect to the Participant’s participation as permitted by the Plan.

 

(k)                                 “Enrollment Period” shall mean that period of time prescribed by the Administrator, which period shall conclude prior to the Offering Date, during which Eligible Employees may elect to participate in an Offering Period.  The duration and timing of Enrollment Periods may be changed or modified by the Administrator from time to time.

 

(l)                                     “Fair Market Value” shall mean the value of each share of Stock subject to the Plan on a given date determined as follows: (i) if on such date the shares of Stock are listed on an established national or regional stock exchange or are publicly traded on an established securities market, the Fair Market Value of the shares of Stock shall be the closing price of the shares of Stock on such exchange or in such market (the exchange or market selected by the Administrator if there is more than one such exchange or market) on such date or, if such date is not a Trading Day, on the Trading Day immediately preceding such date, or, if no sale of the shares of Stock is reported for such Trading Day, on the next

 

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preceding day on which any sale shall have been reported; or (ii) if the shares of Stock are not listed on such an exchange or traded on such a market, the Fair Market Value of the shares of Stock shall be determined by the Administrator in good faith.

 

(m)                             “Holding Period” shall have the meaning set forth in Section 10(c)(i).

 

(n)                                 “Non-423(b) Offering” shall mean the rules, procedures, or sub-plans, if any, adopted by the Administrator, in its sole discretion, as a part of the Plan, pursuant to which Options that do not satisfy the requirements for “employee stock purchase plans” that are set forth under Code Section 423 may be granted to Eligible Employees as a separate offering under the Plan.

 

(o)                                 “Offering Date” shall mean the first day of any Offering Period under the Plan.

 

(p)                                 “Offering Period” shall mean the period determined by the Administrator pursuant to Section 7, which period shall not exceed twenty-seven (27) months, during which payroll deductions or periodic cash contributions are accumulated for the purpose of purchasing Stock under the Plan.

 

(q)                                 “Option” shall mean the right granted to Participants to purchase shares of Stock pursuant to an offering under the Plan.

 

(r)                                    “Outstanding Election” shall mean a Participant’s then-current election to purchase shares of Stock in an Offering Period, or that part of such an election which has not been cancelled (including any voluntary cancellation under Section 5 and deemed cancellation under Section 11) prior to the close of business on the last Trading Day of the Offering Period (or if an Offering Period has multiple Purchase Periods, the last Trading Day of the Purchase Period) or such other date as determined by the Administrator.

 

(s)                                   “Participating Affiliate” shall mean any Subsidiary designated by the Administrator from time to time, in its sole discretion, whose employees may participate in the Plan or in a specific Offering Period under the Plan, if such employees otherwise qualify as Eligible Employees.

 

(t)                                    “Participant” shall mean an Eligible Employee who has elected to participate in the Plan pursuant to Section 5.

 

(u)                                 “Plan” shall mean this OptiNose, Inc. 2017 Employee Stock Purchase Plan, as it may be amended from time to time.

 

(v)                                 “Purchase Period” shall mean the period during an Offering Period designated by the Administrator on the last Trading Day of which purchases of Stock are made under the Plan.  An Offering Period may have one or more Purchase Periods.

 

(w)                               “Purchase Price” shall mean the purchase price at which shares of Stock may be purchased under the Plan, which shall be set by the Administrator from time to time; provided, however, that except as set forth in Section 7(b) of the Plan, the Purchase Price shall not be less than the lesser of eighty-five percent (85%) of the average of the high and low sales price of the Stock on the NASDAQ Global Market (or any other national securities exchange on which the Stock is listed) on the Offering Date or the last Trading Day of the Offering Period (or if an Offering Period has multiple Purchase Periods, on the last Trading Day of the Purchase Period).

 

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(x)                                 “Stock” shall mean the common stock, par value $0.001 per share, of the Company, or any security into which shares of Stock may be changed or for which shares of Stock may be exchanged as provided in Section 12.

 

(y)                                 “Subsidiary” shall mean any corporation (other than the Company) in an unbroken chain of corporations beginning with the Company if each of the corporations other than the last corporation in the unbroken chain owns stock possessing fifty percent (50%) or more of the total combined voting power of all classes of stock in one of the other corporations in such chain.  A corporation that attains the status of a Subsidiary on a date after the Effective Date shall be considered a Subsidiary commencing as of such date.

 

(z)                                  “Termination of Employment” shall mean, with respect to a Participant, a cessation of the employee-employer relationship between the Participant and the Company or a Participating Affiliate for any reason,

 

(i)                                     including, without limitation, (A) a termination by resignation, discharge, death, disability, retirement, or the disaffiliation of a Subsidiary, (B) unless otherwise determined or provided by the Administrator, a transfer of employment to a Subsidiary that is not a Participating Affiliate as of the first day immediately following the expiration of the then-current Offering Period (or if an Offering Period has multiple Purchase Periods, the then-current Purchase Period), and (C) a termination of employment where the individual continues to provide certain services to the Company or a Subsidiary in a non-employee role, but

 

(ii)                                  excluding (A) such termination of employment where there is a simultaneous reemployment of the Participant by the Company or a Participating Affiliate and (B) any bona fide and Company-approved or Participating Affiliate-approved leave of absence, such as family leave, medical leave, personal leave, and military leave, or such other leave that meets the requirements of Treasury Regulations section 1.421-1(h)(2); provided, however, where the period of leave exceeds three (3) months and the employee’s right to reemployment is not guaranteed either by statute or by contract, the employee-employer relationship will be deemed to have terminated on the first day immediately following such three (3)-month period.

 

(aa)                          “Trading Day” shall mean a day on which the NASDAQ Global Market (or any other national securities exchange on which the Stock is listed) is open for trading.

 

3.                                      SHARES SUBJECT TO THE PLAN

 

(a)                                 Share Reserve.  Subject to adjustment as provided in Section 12, the maximum number of shares of Stock that may be issued pursuant to Options granted under the Plan (including any Non-423(b) Offering established hereunder) is Fifty Thousand (50,000) shares.  In addition, the number of shares of Stock that may be issued pursuant to Options granted under the Plan shall automatically increase on January 1st of each year, commencing on January 1, 2018 and continuing until the expiration of the Plan, in an amount equal to one percent (1%) of the total number of shares of Stock outstanding on December 31st of the preceding calendar year.  Notwithstanding the foregoing, the Administrator may act prior to the first day of any calendar year to provide that there shall be no increase in the share reserve for such calendar year or that the increase in the share reserve for such calendar year shall be a lesser number of shares of Stock than would otherwise occur pursuant to the preceding sentence.  The shares of Stock reserved for issuance under the Plan may be authorized but unissued shares, treasury shares, or shares purchased on the open market.

 

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(b)                                 Participation Adjustment as a Result of the Share Reserve.  If the Administrator determines that the total number of shares of Stock remaining available under the Plan is insufficient to permit the number of shares of Stock to be purchased by all Participants on the last Trading Day of an Offering Period (or if an Offering Period has multiple Purchase Periods, on the last Trading Day of the Purchase Period) pursuant to Section 9, the Administrator shall make a participation adjustment, where the number of shares of Stock purchasable by all Participants shall be reduced proportionately in as uniform and equitable a manner as is reasonably practicable, as determined in the Administrator’s sole discretion.  After such adjustment, the Administrator shall refund in cash all affected Participants’ Account balances for such Offering Period as soon as practicable thereafter.

 

(c)                                  Applicable Law Limitations on the Share Reserve.  If the Administrator determines that some or all of the shares of Stock to be purchased by Participants on the last Trading Day of an Offering Period (or if an Offering Period has multiple Purchase Periods, the last Trading Day of the Purchase Period) would not be issued in accordance with applicable laws or any approval by any regulatory body as may be required or the shares of Stock would not be issued pursuant to an effective Form S-8 registration statement or that the issuance of some or all of such shares of Stock pursuant to a Form S-8 registration statement is not advisable due to the risk that such issuance will violate applicable laws, the Administrator may, without Participants’ consent, terminate any outstanding Offering Period and the Options granted thereunder and refund in cash all affected Participants’ Account balances for such Offering Period as soon as practicable thereafter.

 

4.                                      ADMINISTRATION

 

(a)                                 Generally.  The Plan shall be administered under the direction of the Administrator.  Subject to the express provisions of the Plan, the Administrator shall have full authority, in its sole discretion, to take any actions it deems necessary or advisable for the administration of the Plan, including, without limitation:

 

(i)                                     Interpreting and construing the Plan and Options granted under the Plan and the rules and regulations thereunder; prescribing, adopting, amending, suspending, waiving, and rescinding such rules and regulations as it deems appropriate to administer and implement the Plan, including amending any outstanding Option, as it may deem advisable or necessary to comply with applicable laws; correcting any defect or supplying any omission or reconciling any inconsistency in the Plan or Options granted under the Plan or any Enrollment Form; and making all other decisions and determinations necessary and advisable in administering the Plan, including, without limitation:

 

(ii)                                  Making determinations relating to eligibility;

 

(iii)                               Determining the Purchase Price;

 

(iv)                              Establishing the timing and length of Offering Periods and Purchase Periods;

 

(v)                                 Establishing minimum and maximum contribution rates;

 

(vi)                              Establishing new or changing existing limits on the number of shares of Stock a Participant may elect to purchase with respect to any Offering Period, if such limits are announced prior to the first Offering Period to be affected;

 

(vii)                           Adopting such rules, procedures, or sub-plans as may be deemed advisable or necessary to comply with the laws of countries other than the United States, to allow for tax-preferred

 

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treatment of the Options or otherwise to provide for the participation by Eligible Employees who reside outside of the United States, including determining which Eligible Employees are eligible to participate in the Non-423(b) Offering or other sub-plans established by the Administrator;

 

(viii)                        Establishing the exchange ratio applicable to amounts withheld in a currency other than U.S. dollars and permitting payroll withholding in excess of the amount designated by a Participant in order to adjust for delays or mistakes in the processing of properly completed Enrollment Forms; and

 

(ix)                              Furnishing to the Custodian such information as the Custodian may require.

 

The Administrator’s determinations under the Plan shall be final, binding, and conclusive upon all persons.

 

(b)                                 Custodian.  If the Administrator designates a Custodian for the Plan, the Custodian shall act as custodian under the Plan and shall perform such duties as requested by the Administrator in accordance with any agreement between the Company and the Custodian.  The Custodian shall establish and maintain, as agent for each Participant, an Account and any subaccounts as may be necessary or desirable for the administration of the Plan.

 

(c)                                  Other Administrative Provisions. The Company will furnish information to the Custodian from its records as directed by the Administrator, and such records will be conclusive on all persons unless determined by the Administrator to be incorrect.  Each Participant and other person claiming benefits under the Plan must furnish to the Company in writing an up-to-date mailing address and any other information as the Administrator or Custodian may reasonably request.  The Plan will be administered on a reasonable and nondiscriminatory basis, and Plan provisions and rules thereunder will apply in a uniform manner to all persons similarly situated.

 

(d)                                 No Liability.  Neither the Board, the Compensation Committee of the Board, any other committee of the Board, the Administrator or the Custodian, nor any of their agents or designees, shall be liable to any person (i) for any act, failure to act, or determination made in good faith with respect to the Plan or Options granted under the Plan or (ii) for any tax (including any interest and penalties) by reason of the failure of the Plan, an Option, or an Offering Period to satisfy the requirements of Code Section 423, the failure of the Participant to satisfy the requirements of Code Section 423, or otherwise asserted with respect to the Plan, Options granted under the Plan, or shares of Stock purchased or deemed purchased under the Plan.

 

5.                                      PARTICIPATION IN THE PLAN IN AN OFFERING PERIOD

 

(a)                                 Generally.  An Eligible Employee may become a Participant for an Offering Period under the Plan by completing the prescribed Enrollment Form and submitting such Enrollment Form to the Company (or the Company’s designee), in the format and pursuant to the process as prescribed by the Administrator, during the Enrollment Period prior to the commencement of the Offering Period to which it relates.  If properly completed and timely submitted, the Enrollment Form will become effective for the first Offering Period following submission of the Enrollment Form and all subsequent Offering Periods as provided by Section 5(b) until (i) it is terminated in accordance with Section 11, (ii) it is modified by filing another Enrollment Form in accordance with this Section 5(a) (including an election is made to cease payroll deductions or periodic cash contributions in accordance with Section 6(c)), or (iii) the Participant is otherwise ineligible to participate in the Plan or in a subsequent Offering Period.

 

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(b)                                 Automatic Re-Enrollment.  Following the end of each Offering Period, each Participant shall automatically be re-enrolled in the next Offering Period at the applicable rate of payroll deductions or periodic cash contributions in effect on the last Trading Day of the prior Offering Period or otherwise as provided under Section 6, unless (i) the Participant has experienced a Termination of Employment, or (ii) the Participant is otherwise ineligible to participate in the Plan or in the next Offering Period.  Notwithstanding the foregoing, the Administrator may require current Participants to complete and submit a new Enrollment Form at any time it deems necessary or desirable to facilitate Plan administration or for any other reason.

 

6.                                      PAYROLL DEDUCTIONS OR PERIODIC CASH CONTRIBUTIONS

 

(a)                                 Generally.  Each Participant’s Enrollment Form shall contain a payroll deduction authorization pursuant to which he or she shall elect to have a designated whole percentage of Eligible Compensation between one percent (1%) and fifteen percent (15%) deducted, on an after-tax basis, on each payday during the Offering Period and credited to the Participant’s Account for the purchase of shares of Stock pursuant to the offering.  The Administrator shall also have the authority, but not the obligation, to permit a Participant to elect to make periodic cash contributions, in lieu of payroll deductions, for the purchase of shares of Stock pursuant to the offering.  Notwithstanding the foregoing, if local law prohibits payroll deductions, a Participant may elect to participate in an Offering Period through contributions to his or her Account in a format and pursuant to a process acceptable to the Administrator.  In such event, any such Participant shall be deemed to participate in a separate offering under the Plan, unless the Administrator otherwise expressly provides.

 

(b)                                 Insufficiency of Contributions.  Subject to Section 6(e), if in any payroll period a Participant has no pay or his or her pay is insufficient (after other authorized deductions) to permit deduction of the full amount of his or her payroll deduction election, then (i) the payroll deduction election for such payroll period shall be reduced to the amount of pay remaining, if any, after all other authorized deductions, and (ii) the percentage or dollar amount of Eligible Compensation shall be deemed to have been reduced by the amount of the reduction in the payroll deduction election for such payroll period.  Deductions of the full amount originally elected by the Participant will recommence as soon as his or her pay is sufficient to permit such payroll deductions; provided, however, no additional amounts shall be deducted to satisfy the Outstanding Election.  If the Administrator authorizes a Participant to elect to make periodic cash contributions in lieu of payroll deductions, the failure of a Participant to make any such contributions shall reduce, to the extent of the deficiency in such payments, the number of shares purchasable under the Plan by the Participant.

 

(c)                                  Cessation after Offering Date.  A Participant may cease his or her payroll deductions or periodic cash contributions during an Offering Period by properly completing and timely submitting a new Enrollment Form to the Company (or the Company’s designee), in the format and pursuant to the process as prescribed by the Administrator, at any time prior to the last day of such Offering Period (or if an Offering Period has multiple Purchase Periods, the last day of such Purchase Period). Any such cessation in payroll deductions or periodic cash contributions shall be effective as soon as administratively practicable thereafter and shall remain in effect for successive Offering Periods as provided in Section 5(b) unless the Participant submits a new Enrollment Form for a later Offering Period in accordance with Section 5(a).  A Participant may only increase his or her rate of payroll deductions or periodic cash contributions in accordance with Section 6(d).

 

(d)                                 Modification Prior to Offering Date.  A Participant may increase or decrease his or her rate of payroll deductions or periodic cash contributions, to take effect on the Offering Date of the

 

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Offering Period following submission of the Enrollment Form, by properly completing and timely submitting a new Enrollment Form in accordance with Section 5(a).

 

(e)                                  Authorized Leave or Disability after Offering Date.  Subject to Section 11, if a Participant is absent from work due to an authorized leave of absence or disability (and has not experienced a Termination of Employment), such Participant shall have the right to elect (i) to remain a Participant in the Plan for the then-current Offering Period (or if an Offering Period has multiple Purchase Periods, the then-current Purchase Period) but to cease his or her payroll deductions or periodic cash contributions in accordance with Section 6(c), or (ii) to remain a Participant in the Plan for the then-current Offering Period (or if an Offering Period has multiple Purchase Periods, the then-current Purchase Period) but to authorize payroll deductions to be made from payments made by the Company or a Participating Affiliate to the Participant during such leave of absence or disability and to undertake to make additional cash payments to the Plan at the end of each payroll period during the Offering Period to the extent that the payroll deductions from payments made by the Company or a Participating Affiliate to such Participant are insufficient to meet such Participant’s Outstanding Election.  Neither the Company nor a Participating Affiliate shall advance funds to a Participant if the Participant’s payroll deductions and additional cash payments during the Participant’s leave of absence or disability are insufficient to fund the Participant’s Account at his or her Outstanding Election.

 

7.                                      OFFERING PERIODS AND PURCHASE PERIODS; PURCHASE PRICE

 

(a)                                 The Administrator shall determine from time to time, in its sole discretion, the Offering Periods and Purchase Periods under the Plan.  Each Offering Period shall consist of one or more Purchase Periods, as determined by the Administrator.

 

(b)                                 The Administrator shall determine from time to time, in its sole discretion, the Purchase Price of each share of Stock for an Offering Period.  Unless otherwise established by the Administrator prior to the start of an Offering Period, the Purchase Price shall be the lesser of eighty-five percent (85%) of the average of the high and low sales price of the Stock on the NASDAQ Global Market (or any other national securities exchange on which the Stock is listed) on the Offering Date or the last Trading Day of the Offering Period (or if an Offering Period has multiple Purchase Periods, on the last Trading Day of the Purchase Period); provided, however, that for the first Offering Period which shall commence on the Effective Date, the Purchase Price shall be eighty-five percent (85%) of the lesser of (i) the public offering price as specified in the final prospectus for the Company’s initial public offering and (ii) the average of the high and low sales price of the Stock on the NASDAQ Global Market (or any other national securities exchange on which the Stock is listed) on the last Trading Day of such Offering Period (or if such Offering Period has multiple Purchase Periods, on the last Trading Day of the applicable Purchase Period).

 

8.                                      GRANT OF OPTION

 

(a)                                 Grant of Option.  On each Offering Date, each Participant in such Offering Period shall automatically be granted an Option to purchase as many whole shares of Stock as the Participant will be able to purchase with the payroll deductions or periodic cash contributions credited to the Participant’s Account during the applicable Offering Period.

 

(b)                                 5% Owner Limit.  Notwithstanding any provisions of the Plan to the contrary, no Participant shall be granted an Option to purchase shares of Stock under the Plan if such Participant (or any other person whose Stock would be attributed to such Participant pursuant to Code Section 424(d)), immediately after such Option is granted, would own or hold Options to purchase shares of Stock

 

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possessing five percent (5%) or more of the total combined voting power or value of all classes of stock of the Company or any of its Subsidiaries.

 

(c)                                  Other Limitation.  The Administrator may determine, as to any Offering Period, that the offering shall not be extended to “highly compensated employees” within the meaning of Code Section 414(q).

 

9.                                      PURCHASE OF SHARES OF STOCK; PURCHASE LIMITATIONS

 

(a)                                 Purchase.  Unless the Participant’s participation in the Plan has otherwise been terminated as provided in Section 11, such Participant will be deemed to have automatically exercised his or her Option to purchase Stock on the last Trading Day of the Offering Period (or if an Offering Period has multiple Purchase Periods, the last Trading Day of the Purchase Period) for the maximum number of shares of Stock that may be purchased at the Purchase Price with the Participant’s Account balance at that time; provided, however, the number of shares of Stock purchased is subject to adjustment by Section 3, this Section 9, and Section 12.  The Administrator shall cause the amount credited to each Participant’s Account to be applied to such purchase, and the amount applied to purchase shares of Stock pursuant to an Option shall be deducted from the applicable Participant’s Account. Notwithstanding the foregoing, with respect to the first Offering Period which shall commence as of the Effective Date, the exercise of each Option shall be conditioned on the closing of the Company’s initial public offering on or before the last Trading Day of such Offering Period (or if such Offering Period has multiple Purchase Periods, the last Trading Day of the applicable Purchase Period). In the event (i) the Company’s initial public offering does not close on or before the last Trading Day of such Offering Period (or if such Offering Period has multiple Purchase Periods, the last Trading Day of the applicable Purchase Period) or (ii) the Administrator terminates the Plan prior to the closing of the Company’s initial public offering, then each Participant’s outstanding Options to purchase shares of Stock under the Plan shall automatically terminate, and the Administrator shall refund in cash the Participant’s Account balance as soon as practicable thereafter.

 

(b)                                 Limit on Number of Shares Purchased.  Notwithstanding Section 8(a) or Section 9(a), in no event may a Participant purchase more than Twenty Five Thousand (25,000) shares of Stock in any one Offering Period; provided, however, that the Administrator may, in its sole discretion, prior to the start of an Offering Period, set a different limit on the number of shares of Stock a Participant may purchase during such Offering Period.

 

(c)                                  Limit on Value of Shares Purchased.  Notwithstanding any provisions of the Plan to the contrary, excluding Options granted pursuant to any Non-423(b) Offering, no Participant shall be granted an Option to purchase shares of Stock under the Plan which permits the Participant’s rights to purchase shares under all “employee stock purchase plans” (described in Code Section 423) of the Company and its Subsidiaries to accrue at a rate which exceeds twenty-five thousand dollars ($25,000) of the aggregate Fair Market Value of such shares of Stock (determined at the time such Options are granted) for each calendar year in which such Options are outstanding at any time.

 

(d)                                 No Fractional Shares.  Notwithstanding any provisions of the Plan to the contrary, no Participant may exercise an Option to purchase less than one whole share of Stock, certificates representing fractional shares will not be delivered to Participants under any circumstances, and any Option to purchase less than one whole share of Stock shall be automatically terminated on the last Trading Day of the Offering Period (or if an Offering Period has multiple Purchase Periods, the last Trading Day of the Purchase Period).  Unless the Participant’s participation in the Plan has otherwise

 

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been terminated as provided in Section 11, the portion of a Participant’s Account balance remaining as a result of a Participant’s inability to exercise an Option to purchase less than one whole share of Stock shall be transferred to the Participant’s brokerage account.

 

10.                               STOCK ISSUANCE; STOCKHOLDER RIGHTS; AND SALES OF PLAN SHARES

 

(a)                                 Stock Issuance and Account Statements.  Shares of Stock purchased under the Plan will be held by the Custodian.  The Custodian may hold the shares of Stock purchased under the Plan by book entry or in the form of stock certificates in nominee names and may commingle shares held in its custody in a single account without identification as to individual Participants.  The Company shall cause the Custodian to deliver to each Participant a statement for each Offering Period during which the Participant purchases Stock under the Plan, which statement shall reflect, for each such Participant, (i) the transactions in his or her Account and the date thereof; (ii) the amount of payroll deductions withheld or periodic cash contributions made during the Offering Period; (iii) the number of shares of Stock purchased; (iv) the aggregate Purchase Price of the shares of Stock purchased; (v) the Purchase Price per share; (vi) the brokerage fees and commissions paid (if any); and (vii) the total number of shares of Stock held by the Custodian for the Participant as of the end of the Offering Period.

 

(b)                                 Stockholder Rights.  A Participant shall not be a stockholder or have any rights as a stockholder with respect to shares of Stock subject to the Participant’s Options under the Plan until the shares of Stock are purchased pursuant to the Options and such shares of Stock are transferred into the Participant’s name on the Company’s books and records.  No adjustment will be made for dividends or other rights for which the record date is prior to such time.  Following purchase of shares of Stock under the Plan and transfer of such shares of Stock into the Participant’s name on the Company’s books and records, a Participant shall become a stockholder with respect to the shares of Stock purchased during such Offering Period (or, if applicable, Purchase Period) and, except as otherwise provided in Section 10(c), shall thereupon have all dividend, voting, and other ownership rights incident thereto.

 

(c)                                  Sales of Plan Shares.  The Administrator shall have the right to require any or all of the following with respect to shares of Stock purchased under the Plan:

 

(i)                                     that a Participant may not request that all or part of the shares of Stock be reissued in the Participant’s own name and shares be delivered to the Participant until two (2) years (or such shorter period of time as the Administrator may designate) have elapsed since the Offering Date of the Offering Period in which the shares were purchased and one (1) year has elapsed since the day the shares were purchased (the “Holding Period”);

 

(ii)                                  that all sales of shares of Stock during the Holding Period applicable to such purchased shares be performed through a licensed broker acceptable to the Company; and

 

(iii)                               that Participants abstain from selling or otherwise transferring shares of Stock purchased pursuant to the Plan for a period lasting up to two (2) years from the date the shares of Stock were purchased pursuant to the Plan.

 

11.                               DEEMED CANCELLATION OR TERMINATION OF PARTICIPATION

 

(a)                                 Termination of Employment Other than Death.  In the event a Participant who holds outstanding Options to purchase shares of Stock under the Plan experiences a Termination of Employment for any reason other than death prior to the last Trading Day of the Offering Period, the Participant’s outstanding Options to purchase shares of Stock under the Plan shall automatically

 

11

 

terminate, and the Administrator shall refund in cash the Participant’s Account balance as soon as practicable thereafter.

 

(b)                                 Death.  In the event of the death of a Participant while the Participant holds outstanding Options to purchase shares of Stock under the Plan, the legal representatives of such Participant’s estate (or, if the Administrator permits a beneficiary designation, the beneficiary or beneficiaries most recently designated by the Participant prior to his or her death) may, within three (3) months after the Participant’s death (but no later than the last Trading Day of the Offering Period (or if an Offering Period has multiple Purchase Periods, the last Trading Day of the then-current Purchase Period)) by written notice to the Company (or the Company’s designee), elect one of the following alternatives.  In the event the Participant’s legal representatives (or, if applicable, beneficiary or beneficiaries) fail to deliver such written notice to the Company (or the Company’s designee) within the prescribed period, the alternative in Section 11(b)(ii) shall apply.

 

(i)                                     The Participant’s outstanding Options shall be reduced to the number of shares of Stock that may be purchased, as of the last day of the Offering Period (or if an Offering Period has multiple Purchase Periods, the last Trading Day of the then-current Purchase Period), with the amount then credited to the Participant’s Account; or

 

(ii)                                  The Participant’s Options to purchase shares of Stock under the Plan shall automatically terminate, and the Administrator shall refund in cash, to the Participant’s legal representatives, the Participant’s Account balance as soon as practicable thereafter.

 

(c)                                  Other Termination of Participation.  If a Participant ceases to be eligible to participate in the Plan for any reason, the Administrator shall refund in cash the affected Participant’s Account balance as soon as practicable thereafter.  Once terminated, participation may not be reinstated for the then-current Offering Period, but, if otherwise eligible, the Eligible Employee may elect to participate in a subsequent Offering Period in accordance with Section 5.

 

12.                               CHANGES IN CAPITALIZATION

 

(a)                                 Changes in Stock.  If the number of outstanding shares of Stock is increased or decreased or the shares of Stock are changed into or exchanged for a different number or kind of shares or other securities of the Company by reason of any recapitalization, reclassification, stock split, reverse stock split, spin-off, combination of shares, exchange of shares, stock dividend, or other distribution payable in capital stock, or other increase or decrease in such shares effected without receipt of consideration by the Company occurring after the date of adoption of the Plan by the Board (which was September 19, 2017), the number and kinds of shares that may be purchased under the Plan shall be adjusted proportionately and accordingly by the Administrator.  In addition, the number and kind of shares for which Options are outstanding shall be similarly adjusted so that the proportionate interest of a Participant immediately following such event shall, to the extent practicable, be the same as immediately prior to such event.  Any such adjustment in outstanding Options shall not change the aggregate Purchase Price payable by a Participant with respect to shares subject to such Options but shall include a corresponding proportionate adjustment in the Purchase Price per share.  Notwithstanding the foregoing, in the event of a spin-off that results in no change in the number of outstanding shares of Stock, the Company may, in such manner as the Company deems appropriate, adjust (i) the number and kind of shares for which Options are outstanding under the Plan and (ii) the Purchase Price per share.

 

(b)                                 Reorganization in Which the Company Is the Surviving Corporation.  Subject to Section 12(c), if the Company shall be the surviving corporation in any reorganization, merger, or consolidation

 

12

 

of the Company with one or more other corporations, all outstanding Options under the Plan shall pertain to and apply to the securities to which a holder of the number of shares of Stock subject to such Options would have been entitled immediately following such reorganization, merger, or consolidation, with a corresponding proportionate adjustment of the Purchase Price per share so that the aggregate Purchase Price thereafter shall be the same as the aggregate Purchase Price of the shares subject to such Options immediately prior to such reorganization, merger, or consolidation.

 

(c)                                  Reorganization in Which the Company Is Not the Surviving Corporation, Sale of Assets or Stock, and Other Corporate Transactions.  Upon any dissolution or liquidation of the Company, or upon a merger, consolidation, or reorganization of the Company with one or more other corporations in which the Company is not the surviving corporation, or upon a sale of all or substantially all of the assets of the Company to another corporation, or upon any merger or consolidation in which the Company is the surviving corporation that results in any person or entity owning more than fifty percent (50%) of the combined voting power of all classes of stock of the Company, the Plan and all Options outstanding hereunder shall terminate, except to the extent provision is made in writing in connection with such transaction for the continuation of the Plan and/or the assumption of the Options theretofore granted, or for the substitution for such Option of new rights covering the stock of a successor corporation, or a parent or subsidiary thereof, with appropriate adjustments as to the number and kinds of shares and purchase prices, in which event the Plan and rights theretofore granted shall continue in the manner and under the terms so provided.  In the event of any such termination of the Plan, the Offering Period and the Purchase Period shall be deemed to have ended on the last Trading Day prior to such termination, and in accordance with Section 9, the Options of each Participant then outstanding shall be deemed to be automatically exercised on such last Trading Day.  The Administrator shall send written notice of an event that will result in such a termination to all Participants at least five (5) days prior to the date upon which the Plan will be terminated.

 

(d)                                 Adjustments.  Adjustments under this Section 12 related to stock or securities of the Company shall be made by the Administrator, whose determination in that respect shall be final, binding, and conclusive.

 

(e)                                  No Limitations on Company.  The grant of an Option pursuant to the Plan shall not affect or limit in any way the right or power of the Company to make adjustments, reclassifications, reorganizations, or changes of its capital or business structure or to merge, consolidate, dissolve or liquidate, or to sell or transfer all or any part of its business or assets.

 

13.                               TERM; AMENDMENT, SUSPENSION, AND TERMINATION OF THE PLAN

 

(a)                                 Term.  The Plan shall be effective as of the Effective Date. The Plan shall, without further action of the Board, terminate on the first to occur of (i) the day before the tenth (10th) anniversary of the date of adoption of the Plan by the Board (which was September 19, 2017), (ii) the date determined in accordance with Section 12, and (iii) the date determined in accordance with Section 13(b).

 

(b)                                 Amendment, Suspension, and Termination of the Plan.  The Administrator may, at any time and from time to time, amend, suspend, or terminate the Plan or an Offering Period under the Plan; provided, however, that no amendment, suspension, or termination shall, without the consent of the Participant, impair any rights of a Participant that have vested at the time of such amendment, suspension, or termination.  Without approval of the stockholders of the Company, no amendment shall be made increasing the number of shares reserved for issuance under the Plan pursuant to Section 3 (except as provided in Section 12).

 

13

 

14.                               GENERAL PROVISIONS

 

(a)                                 Withholding of Taxes.  To the extent that a Participant recognizes ordinary income in connection with a sale or other transfer of any shares of Stock purchased under the Plan, the Company may withhold amounts needed to cover such taxes from any payments otherwise due and owing to the Participant or from shares that would otherwise be issued to the Participant under the Plan. Any Participant who sells or otherwise transfers shares of Stock purchased under the Plan within two (2) years after the beginning of the Offering Period in which the shares were purchased must, within ten (10) days of such transfer, notify the Company in writing of such transfer.

 

(b)                                 Options Not Transferable or Assignable.  A Participant’s Options under the Plan may not be sold, pledged, assigned, or transferred in any manner, whether voluntarily, by operation of law, or otherwise.  If a Participant sells, pledges, assigns, or transfers his or her Options in violation of this Section 14(a), such Options shall immediately terminate, and the Participant shall immediately receive a refund of the amount then credited to the Participant’s Account.  Any payment of cash or issuance of shares of Stock under the Plan may be made only to the Participant (or, in the event of the Participant’s death, to the Participant’s estate or, if the Administrator permits a beneficiary designation, the beneficiary or beneficiaries most recently designated by the Participant prior to his or her death).  During a Participant’s lifetime, only such Participant may exercise his or her Options under the Plan.

 

(c)                                  No Right to Continued Employment.  Neither the Plan nor any Option to purchase Stock under the Plan confers upon any Eligible Employee or Participant any right to continued employment with the Company or any of its Subsidiaries, nor will a Participant’s participation in the Plan restrict or interfere in any way with the right of the Company or any of its Subsidiaries to terminate the Participant’s employment at any time.

 

(d)                                 No Interest on Payments.  No interest shall be paid on sums withheld from a Participant’s pay or otherwise contributed for the purchase of shares of Stock under the Plan unless otherwise determined necessary by the Administrator.

 

(e)                                  Governmental Regulation.  The Company’s obligation to issue, sell, and deliver shares of Stock pursuant to the Plan is subject to such approval of any governmental authority and any national securities exchange or other market quotation system as may be required in connection with the authorization, issuance, or sale of such shares.

 

(f)                                   Rule 16b-3.  Transactions under this Plan are intended to comply with all applicable conditions of Rule 16b-3 or any successor provision under the Securities Exchange Act of 1934, as amended.  If any provision of the Plan or action by the Administrator fails to so comply, it shall be deemed null and void to the extent permitted by applicable law and deemed advisable by the Board.  Moreover, in the event the Plan does not include a provision required by Rule 16b-3 to be stated in the Plan, such provision (other than one relating to eligibility requirements or the price and amount of awards) shall be deemed automatically to be incorporated by reference into the Plan.

 

(g)                                  Payment of Plan Expenses.  The Company shall bear all costs of administering and carrying out the Plan.

 

(h)                                 Application of Funds.  All funds received or held by the Company under the Plan may be used for any corporate purpose until applied to the purchase of Stock and/or refunded to Participants.  Participants’ Accounts need not be segregated.

 

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(i)                                     Governing Law.  The validity and construction of the Plan and the Options granted hereunder shall be governed by, and construed and interpreted in accordance with, the laws of the State of Delaware (other than any conflicts or choice of law rule or principle that might otherwise refer construction or interpretation of the Plan and the Options granted under the Plan to the substantive laws of any other jurisdiction), except to the extent superseded by applicable U.S. federal laws.

 

*                                 *                                 *

 

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