Document:

PODD_EX10.15_2014.09.03-10Q

Exhibit 10.15

INCENTIVE STOCK OPTION AGREEMENT
UNDER THE INSULET CORPORATION SECOND AMENDED AND RESTATED
2007 STOCK OPTION AND INCENTIVE PLAN

Name of Optionee:    
No. of Option Shares:    
Option Exercise Price per Share:     
Grant Date:    
Expiration Date:     
    
Pursuant to the Insulet Corporation Second Amended and Restated 2007 Stock Option and Incentive Plan as amended through the date hereof (the “Plan”), Insulet Corporation  (the “Company”) hereby grants to the Optionee named above an option (the “Stock Option”) to purchase on or prior to the Expiration Date specified above all or part of the number of shares of Common Stock, par value $0.001 per share (the “Stock”), of the Company specified above at the Option Exercise Price per Share specified above subject to the terms and conditions set forth herein and in the Plan.
1.Exercisability Schedule.  No portion of this Stock Option may be exercised until such portion shall have become exercisable.  Except as set forth below, and subject to the discretion of the Administrator (as defined in Section 2 of the Plan) to accelerate the exercisability schedule hereunder, this Stock Option shall be vested and exercisable as follows: 25% of the number of Option Shares as set forth above shall become vested and exercisable on the first anniversary of the Grant Date and the remaining number of Option Shares set forth above shall become vested and exercisable in 12 equal quarterly installments thereafter so long as the Optionee remains an employee of the Company or a Subsidiary on such vesting dates.  Once exercisable, this Stock Option shall continue to be exercisable at any time or times prior to the close of business on the Expiration Date, subject to the provisions hereof and of the Plan.
2.Manner of Exercise.
(a)The Optionee may exercise this Stock Option only in the following manner:  from time to time on or prior to the Expiration Date of this Stock Option, the Optionee may give written notice to the Administrator of his or her election to purchase some or all of the Option Shares purchasable at the time of such notice.  This notice shall specify the number of Option Shares to be purchased.
Payment of the purchase price for the Option Shares may be made by one or more of the following methods:  (i) in cash, by certified or bank check or other instrument acceptable to the Administrator; (ii) through the delivery (or attestation to the ownership) of shares of Stock that have been purchased by the Optionee on the open market or that are beneficially owned by the Optionee and are not then subject to any restrictions under any Company plan and that otherwise satisfy any holding periods as may be required by the Administrator; (iii) by the Optionee delivering to the Company a properly executed exercise notice together with irrevocable instructions to a broker to promptly deliver to the Company cash or a check payable and acceptable to the Company to pay the option purchase price, provided that in the event the Optionee chooses to pay the option purchase price as so provided, the Optionee and the broker shall comply with such procedures and enter into such agreements of indemnity and other agreements as the Administrator shall prescribe as a condition of such payment procedure; or (iv) a combination of (i), (ii) and (iii) above.  Payment instruments will be received subject to collection.
The transfer to the Optionee on the records of the Company or of the transfer agent of the Option Shares will be contingent upon (i) the Company’s receipt from the Optionee of the full purchase price for the Option Shares, as set forth above, (ii) the fulfillment of any other requirements contained herein or in the Plan or in any other agreement or provision of laws, and (iii) the receipt by the Company of any agreement, statement or other evidence that the Company may require to satisfy itself that the issuance of Stock to be purchased pursuant to the exercise of Stock Options under the Plan and any subsequent resale of the shares of Stock will be in compliance with applicable laws and regulations.  In the event the Optionee chooses to pay the purchase price by previously-owned shares of Stock through the attestation method, the number of shares of Stock transferred to the Optionee upon the exercise of the Stock Option shall be net of the Shares attested to.
(b)The shares of Stock purchased upon exercise of this Stock Option shall be transferred to the Optionee on the records of the Company or of the transfer agent upon compliance to the satisfaction of the Administrator with all requirements under applicable laws or regulations in connection with such transfer and with the requirements hereof and of the Plan.  The determination of the Administrator as to such compliance shall be final and binding on the Optionee.  The 

Optionee shall not be deemed to be the holder of, or to have any of the rights of a holder with respect to, any shares of Stock subject to this Stock Option unless and until this Stock Option shall have been exercised pursuant to the terms hereof, the Company or the transfer agent shall have transferred the shares to the Optionee, and the Optionee’s name shall have been entered as the stockholder of record on the books of the Company.  Thereupon, the Optionee shall have full voting, dividend and other ownership rights with respect to such shares of Stock.
(c)The minimum number of shares with respect to which this Stock Option may be exercised at any one time shall be 100 shares, unless the number of shares with respect to which this Stock Option is being exercised is the total number of shares subject to exercise under this Stock Option at the time.
(d)Notwithstanding any other provision hereof or of the Plan, no portion of this Stock Option shall be exercisable after the Expiration Date hereof.
3.Termination of Employment.  If the Optionee’s employment by the Company or a Subsidiary (as defined in the Plan) is terminated, the period within which to exercise the Stock Option may be subject to earlier termination as set forth below.
(a)Termination Due to Death.  If the Optionee’s employment terminates by reason of the Optionee’s death, any portion of this Stock Option outstanding on such date shall become fully exercisable and may thereafter be exercised by the Optionee’s legal representative or legatee for a period of 12 months from the date of death or until the Expiration Date, if earlier.
(b)Termination Due to Disability.  If the Optionee’s employment terminates by reason of the Optionee’s disability (as determined by the Administrator), any portion of this Stock Option outstanding on such date shall become fully exercisable and may thereafter be exercised by the Optionee for a period of 12 months from the date of termination or until the Expiration Date, if earlier.
(c)Termination for Cause.  If the Optionee’s employment terminates for Cause (as defined below), any portion of this Stock Option outstanding on such date shall terminate immediately and be of no further force and effect.  
(d)Other Termination.  If the Optionee’s employment terminates for any reason other than the Optionee’s death, the Optionee’s disability, or Cause, and unless otherwise determined by the Administrator, any portion of this Stock Option outstanding on such date may be exercised, to the extent exercisable on the date of termination, for a period of three months from the date of termination or until the Expiration Date, if earlier.  Any portion of this Stock Option that is not exercisable on the date of termination shall terminate immediately and be of no further force or effect. 
(e)Termination in Connection with a Sale Event.  If the Optionee’s employment is terminated by the Company without Cause within 24 months after a Sale Event, this Stock Option shall immediately become 100% vested and exercisable as of the date of such termination.
For purposes hereof, “Cause” shall mean the occurrence of any one or more of the following events: (i) conduct by the Optionee constituting a material act of willful misconduct in connection with the performance of Optionee’s duties to the Company, including, without limitation, misappropriation of funds or property of the Company or any of its subsidiaries or affiliates other than the occasional, customary and de minimis use of Company property for personal purposes; or (ii) the commission by the Optionee of any felony or a misdemeanor involving moral turpitude, deceit, dishonesty or fraud, or any conduct by the Optionee that would reasonably be expected to result in material injury to the Company or any of its subsidiaries and affiliates if he were retained in his position; or (iii) willful and deliberate material non-performance by the Optionee of his duties to the Company (other than by reason of the Optionee’s physical or mental illness, incapacity or disability) which has continued for more than 30 days following written notice of such non-performance from the Company; or  (iv) a breach by the Optionee of any of the provisions contained any agreements between Optionee and the Company relating to noncompetition, nonsolicitation, nondisclosure and/or assignment of inventions; or (v) a material violation by the Optionee of the Company’s employment policies which has continued following written notice of such violation from the Company; or (vi) willful failure to cooperate with a bona fide internal investigation or an investigation by regulatory or law enforcement authorities, after being instructed by the Company to cooperate, or the willful destruction or failure to preserve documents or other materials known to be relevant to such investigation or the willful inducement of others to fail to cooperate or to produce documents or other materials in connection with such investigation.  For purposes of clauses (i), (iii) or (vi) hereof, no act, or failure to act, on Optionee’s part shall be deemed “willful” unless done, or omitted to be done, by the Optionee without reasonable belief that the Optionee’s act or failure to act, was in the best interest of the Company and its subsidiaries and affiliates.

The Administrator’s determination of the reason for termination of the Optionee’s employment shall be conclusive and binding on the Optionee and his or her representatives or legatees.
4.Incorporation of Plan.  Notwithstanding anything herein to the contrary, this Stock Option shall be subject to and governed by all the terms and conditions of the Plan, including the powers of the Administrator set forth in Section 2(b) of the Plan.  Capitalized terms in this Agreement shall have the meaning specified in the Plan, unless a different meaning is specified herein.
5.Transferability.  This Agreement is personal to the Optionee, is non-assignable and is not transferable in any manner, by operation of law or otherwise, other than by will or the laws of descent and distribution.  This Stock Option is exercisable, during the Optionee’s lifetime, only by the Optionee, and thereafter, only by the Optionee’s legal representative or legatee.
6.Status of the Stock Option.  This Stock Option is intended to qualify as an “incentive stock option” under Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”), but the Company does not represent or warrant that this Stock Option qualifies as such.  The Optionee should consult with his or her own tax advisors regarding the tax effects of this Stock Option and the requirements necessary to obtain favorable income tax treatment under Section 422 of the Code, including, but not limited to, holding period requirements.  To the extent any portion of this Stock Option does not so qualify as an “incentive stock option,” such portion shall be deemed to be a non-qualified stock option.  If the Optionee intends to dispose or does dispose (whether by sale, gift, transfer or otherwise) of any Option Shares within the one-year period beginning on the date after the transfer of such shares to him or her, or within the two-year period beginning on the day after the grant of this Stock Option, he or she will so notify the Company within 30 days after such disposition.
7.Tax Withholding.  The Optionee shall, not later than the date as of which the exercise of this Stock Option becomes a taxable event for Federal income tax purposes, pay to the Company or make arrangements satisfactory to the Administrator for payment of any Federal, state, and local taxes required by law to be withheld on account of such taxable event.  The Company shall have the authority to cause the minimum required tax withholding obligation to be satisfied, in whole or in part, by withholding from shares of Stock to be issued to the Optionee a number of shares of Stock with an aggregate Fair Market Value that would satisfy the withholding amount due. 
8.No Obligation to Continue Employment.  Neither the Company nor any Subsidiary is obligated by or as a result of the Plan or this Agreement to continue the Optionee in employment and neither the Plan nor this Agreement shall interfere in any way with the right of the Company or any Subsidiary to terminate the employment of the Optionee at any time.
9.Integration.  This Agreement constitutes the entire agreement between the parties with respect to this Stock Option and supersedes all prior agreements and discussions between the parties concerning such subject matter.
10.Data Privacy Consent.  In order to administer the Plan and this Agreement and to implement or structure future equity grants, the Company, its subsidiaries and affiliates and certain agents thereof (together, the “Relevant Companies”) may process any and all personal or professional data, including but not limited to Social Security or other identification number, home address and telephone number, date of birth and other information that is necessary or desirable for the administration of the Plan and/or this Agreement (the “Relevant Information”).  By entering into this Agreement, the Optionee (i) authorizes the Company to collect, process, register and transfer to the Relevant Companies all Relevant Information; (ii) waives any privacy rights the Optionee may have with respect to the Relevant Information; (iii) authorizes the Relevant Companies to store and transmit such information in electronic form; and (iv) authorizes the transfer of the Relevant Information to any jurisdiction in which the Relevant Companies consider appropriate.  The Optionee shall have access to, and the right to change, the Relevant Information.  Relevant Information will only be used in accordance with applicable law.
11.Notices.  Notices hereunder shall be mailed or delivered to the Company at its principal place of business and shall be mailed or delivered to the Optionee at the address on file with the Company or, in either case, at such other address as one party may subsequently furnish to the other party in writing.

12.Clawback.  The Grantee agrees and acknowledges that the entire Award, whether or not vested or exercised, shall be subject to the terms and provisions of the Company’s Policy for Recoupment of Incentive Compensation, when adopted. The Company’s Policy for Recoupment of Incentive Compensation shall have substantially the terms and provisions as set forth in Exhibit A.
	
			
	 
	 
	INSULET COPRORATION

	 
	 
	 

	 
	 
	 

	 
	 
	By: Patrick J. Sullivan

	 
	 
	Title: Chief Executive Officer

	 
	 
	 

	 
	 
	 

	 
	 
	Optionee Name

	 
	 
	Optionee Acceptance Date

	 
	 
	 

EXHIBIT A
INSULET CORPORATION
Policy for Recoupment of Incentive Compensation1 
Definitions
As used herein, the following terms have the following meaning:
“Covered Officer” means any officer of the Company whom the Board of Directors has previously determined is subject to the reporting requirements of Section 16 of the Securities Exchange Act of 1934.  This policy shall apply to persons who were Covered Officers during the relevant period but are no longer employees of the Company at the time the determination to recoup compensation is made.
“Incentive Compensation” means annual cash bonus and long term equity incentive compensation (i.e., employee stock options and restricted stock units).
Policy
If Insulet Corporation (the “Company”) is required to restate any of its financial statements due to both (i) the material non-compliance of the Company with any financial reporting requirement and (ii) misconduct of a Covered Officer, then the Compensation Committee may require any Covered Officer to repay to the Company that part of the Incentive Compensation received by that Covered Officer during the one-year period preceding the publication of the restated financial statement that the Compensation Committee determines was in excess of the amount that such Covered Officer would have received had such Incentive Compensation been calculated based on the financial results reported in the restated financial statement.
The Compensation Committee may take into account any factors it deems reasonable in determining whether to seek recoupment of previously paid Incentive Compensation and how much compensation to recoup from individual Covered Officers (which need not be the same amount or proportion for every Covered Officer), including any determination by the Compensation Committee regarding which Covered Officer engaged in misconduct or was responsible in whole or in part for the events that led to the financial restatement.  The amount and form of the compensation to be recouped shall be determined by the Compensation Committee in its discretion, and recoupment of compensation paid as annual cash bonuses or long term incentives may be made, in the Compensation Committee’s discretion, through cancellation of vested or unvested stock options, cancellation of unvested restricted stock units and/or cash repayment.
This policy will be amended to conform with the mandatory clawback requirements of the Dodd-Frank Wall Street Reform and Consumer Protection Act once rules implementing such requirements are finalized. 

1Adopted by the Board of Directors on [_______________], 2014.EXHIBIT
10.1 

 

SECOND
AMENDMENT TO
CREDIT AGREEMENT

AND
WAIVER
OF DEFAULT

 

 

THIS
 SECOND AMENDMENT
TO CREDIT
AGREEMENT  AND
WAIVER OF DEFAULT (this
"Amendment")
is entered
into as
of November
3, 2014, by
and
between ZAGG, INC,
a Nevada
corporation ("Borrower"),
and WELLS FARGO
BANK, NATIONAL
ASSOCIATION ("Bank").

 

RECITALS

 

WHEREAS,
Borrower is
currently indebted
to Bank (the
"Loan")
pursuant to
the terms and
conditions of
that certain Credit
Agreement between Borrower and Bank dated
as of
December 7, 2012
, as
amended from time to time
("Credit
Agreement").

 

WHEREAS,
 ZAGG
 INTELLECTUAL
PROPERTYHOLDING
CO.,
INC.,  a
Nevada corporation ("Zagg
IP"),
ZAGG RETAIL, INC.,
a Nevada corporation ("Retail"),
IFROGZ INC., a Utah
corporation ("iFrogz"),
and ZAGG LLC, a Nevada
limited liability company ("ZAGG LLC" and, together
with Zagg IP, Retail,
iFrogz , and ZAGG
LLC, individually and
collectively, as the
context requires, the "Guarantor"),
each executed a Continuing Guaranty
dated as of December
7, 2012 in
favor of Bank, each as amended from time to
time (collectively, the "Guaranties").

 

WHEREAS,
the Loan
is secured
by that certain
(i) Security
Agreement dated
as of
December 7, 2012
by and between
Borrower and Bank; (ii)
that certain
General Pledge Agreement
dated as
of December 7,
2012 by and
between Borrower
and Bank; (iii)     Third
Party Security Agreement
dated as of
December 7, 2012 by and
between iFrogz and
Bank; (iv) Third
Party Security Agreement dated as of
December 7, 2012 by and
between Zagg IP and
Bank; (v) Third Party Security Agreement
dated as of December 7,
2012 by and between Retail and Bank; (vi)
Third Party Security
Agreement dated as of December 7,
2012 by and between
ZAGG LLC and Bank;
and (vii) Third Party
General Pledge Agreement dated as
of December 7, 2012
by and between iFrogz
and Bank , each as
amended from time
to time (collectively , the "Security
Agreements ").

 

WHEREAS,
Borrower is
in default of certain
provisions of the Credit
Agreement.

 

WHEREAS,
Bank and
Borrower have
agreed to
certain changes in
the
terms
and conditions set forth in
the Credit Agreement
and have agreed
to amend
the Credit Agreement to reflect said
changes.

 

NOW,
THEREFORE, for
valuable consideration
, the
receipt and suffic
iency
of which are
hereby acknowledged, the
parties hereto agree
that the
Credit Agreement sha ll
be amended as fo
llows:

 

1.                 
Line of Credit
Reduction. Section 1.1(a)
is hereby amended
by deleting "Sixty Million
Dollars ($60,000,000)"
as the
maximum principal amount
available under the Line of Credit, and
by substituting
for said amount
"Twenty-Five
Million Dollars ($25,000,000)," with such change
to be effective upon
the execution and
delivery to Bank of a
Second Modification to Promissory
Note dated as
of the date
hereof and all other contracts , instruments
and documents
required by Bank
to evidence
such change.

 

    	1

    	 

    

 

2.                   
Financial
Covenants .
 Section
4.9 Financial Condition
is
hereby deleted
in its entirety,
and the
following substituted
therefore:

 

"SECTION
4.9.FINANCIALCONDITION.Maintain

Borrower's
financial condition as
follows using GAAP
consistently applied and used
consistently with prior
practices (except to
the extent
modified by
the
definitions herein) ,
with compliance
determined commencing
with Borrower's financial
statements for the
period ending
December 31, 2013.

 

(a)               
Total Liabilities
divided by Tangible
Net Worth
("Leverage
Ratio")
not greater
than 1.25 to
1.00 at
each calendar quarter end,
with "Total
Liabilities" defined as
the aggregate
of current
liabilities and
non-current
liabilities, and with
"Tangible Net Worth" defined
as the
aggregate of total stockholders'
equity less any
intangible assets
(including goodwill) and
less any
loans or advances
to, or investments
in, any related
entities or
individuals, including the note
receivable from
Lorence A.
Harmer  (the
"Harmer Note").

 

(b)               
Adjusted EBITDA
as of
each quarter
end, determined
on a
rolling 4-quarter
basis,
of not
less than the following
:

 

	Quarter
    Ending	Minimum
    Adjusted EBITDA
	 	 
	December 31,
    2014	$15,000,000
	 	 
	March 31,
    2015	$17
    ,500,000
	 	 
	June 30,
    2015	$20,000,000
	 	 
	September 30,
    2015 and thereafter	$30,000,000

 

with
"Adjusted EBITDA"
defined as net
profit after tax
plus tax expenses (net
of deferred tax
expense), interest
expense (net of capitalized interest expense),
depreciation expense,
amortization expense,
non-cash stock-based compensation ,
Harmer-Related Expenses,
non-cash
losses on the equity investment in
HzO,
and other expenses
as Bank may
approve in
writing in the future in its sole discretion, and
with "Harmer-Related
Expenses" defined
as non-cash impairment charges on the Harmer Note not to
exceed One Million Two
Hundred Thousand
Dollars ($1,200,000) in the aggregate.

 

(c)               
Asset Test Ratio
not less than
2.00
to 1.00
as of each calendar
quarter end.
For purposes
of this covenant, the following terms have the following meanings:

 

(i)                 
"Asset
Test
Ratio"
means the
balance sheet line
item for
net accounts receivable
balance, plus total inventory not
 to  exceed Twelve Million Five
Hundred Thousand Dollars ($12,500,000)
, all
 divided by  Funded Debt.

 

    	2

    	 

    

 

 

(ii)                
"Funded Debt" means
the sum
of all
obligations for borrowed
money
(including subordinated
debt) ,
the current
portion of long
term debt, all
other noncurrent long
term debt ,
and
all Line
of Credit balances per the quarterly
financial statement
plus all
capital lease obligations .

 

(d)                
Borrower shall
not incur two
(2) consecutive quarterly losses
."

 

(e)                
From January
1, 2014,
Borrower shall
not repurchase treasury stock
in an
aggregate amount
greater than Fifteen
 Million
 Dollars  ($15,000,000) 
in any
 consecutive
 twelve

(12)
month period.

 

3.                  
Waiver of
Default. Borrower
has notified
Bank that
Borrower has
failed to meet the
Adjusted EBITDA
requirement
of Section 4 .9(b)
of the Credit Agreement for
the fiscal quarter ending
September 30,
2014. Subject
to the terms
and conditions
set forth
herein, Bank has
decided to waive its default rights with respect to this breach. This
waiver applies only to the specific
instance described above. It
is not a waiver
of any subsequent
breach of the same
provision of the Credit Agreement, nor is
it a waiver of any breach of any
other provision of
the Credit Agreement.

 

4.                  
.  Conditions
 Precedent.  This
 Amendment
 shall
 not
 become effective 
until the  following 
conditions  have  been 
completed  and proof  of their completion
 has been provided to Bank:

 

(a)               
At or prior
to the execution
and delivery
of this Amendment, Borrower
and Guarantor,
as applicable, shall
have executed and delivered, or caused to be executed
and delivered,
to Bank, each
in form
and substance satisfactory to Bank,
such other documents, instruments,
resolutions, subordinations, and
other agreements as Bank may
require in its sole discretion, including, without limitation,
a Second
Modification to Promissory Note.

 

5.                  
Fees and
Expenses.
In consideration
of the changes
set forth herein
and as a condition
to the effectiveness
hereof, immediately upon signing
this Amendment Borrower shall pay to Bank
(a) all
reasonable legal fees and expenses incurred
by Bank in connection herewith or with
the Loan and the Loan Documents accrued
and unpaid as of the date
hereof; and (b) all other reasonable
costs and expenses
incurred by Bank in connection with this
Amendment.

 

6.                  
Effect  on
 Credit  Agreement.Except
as specifically provided
herein, all terms and
conditions of the
Credit Agreement remain in full force and 
effect, without waiver or modification
. All
terms defined in the Credit Agreement shall have the same meaning when used
in this Amendment .
This Amendment and the Credit Agreement shall be
read together,  as one document

.

    	3

    	 

    

7.                  
Representationsand Warranties.Borrowerherebyremakesall
representations
and warranties
contained in the
Credit Agreement and
reaffirms all covenants
set forth
therein .
Borrower further
certifies that as
of the date
of this Amendment,
and after giving
effect to
the waiver contained in Paragraph 3 above,
there exists
no Event
of Default
as defined in the
Credit Agreement ,
nor any
condition, act or
event which
with the giving of notice or the passage of time or both would
constitute any
such Event of Default.

 

[Signature
Page Follows]

 

    	4

    	 

    

 

IN
WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed as of the day and year first written above.

 

 

 

 

GUARANTORS’
CONSENT AND REAFFIRMATION

 

Each
of the undersigned guarantors of all indebtedness of ZAGG, INC, a Nevada corporation, to WELLS FARGO BANK, NATIONAL ASSOCIATION
hereby: (i) consents to the foregoing Amendment; (ii) reaffirms its obligations under its respective Continuing Guaranty; (iii)
reaffirms its waivers of each and every one of the defenses to such obligations as set forth in its respective Continuing Guaranty;
and (iv) reaffirms that its obligations under its respective Continuing Guaranty are separate and distinct from the obligations
of any other party under said Amendment and the other Loan Documents described herein.

 

 

 

5

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