Document:

Exhibit 10.11

 

Grant No.:        

 

NEXTCURE, INC.

2019 OMNIBUS INCENTIVE PLAN

RESTRICTED STOCK UNIT AGREEMENT

COVER SHEET

 

NextCure, Inc., a Delaware corporation (the “Company”), hereby grants Restricted Stock Units (“RSUs”) for shares of its common stock, par value $0.001 (the “Stock”), to the individual named below as Grantee, subject to the vesting and other conditions set forth in the attachment.  Additional terms and conditions of the grant are set forth in this cover sheet and in the attachment (collectively, the “Agreement”) and in the Company’s 2019 Omnibus Incentive Plan (as it may be amended from time to time, the “Plan”).

 

Grant Date:                                

 

Name of Grantee:                                

 

Number of RSUs Covered by Grant:                                

 

Vesting Start Date:                                

 

Vesting Schedule:                                

 

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 has been provided or made available to you.  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 with the Plan.  Certain capitalized terms used in this Agreement are defined in the Plan and have the meaning set forth in the Plan.

 

	
Grantee:
    	
 
    	
 
    	
 
    
	
 
    	
(Signature)
    	
(Date)
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Company:
    	
 
    	
 
    	
 
    
	
 
    	
(Signature)
    	
(Date)
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Name:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Title:
    	
 
    	
 
    

 

 

Attachment

 

This document is not a stock certificate or a negotiable instrument.

 

 

NEXTCURE, INC.

2019 OMNIBUS INCENTIVE PLAN

 

RESTRICTED STOCK UNIT AGREEMENT

 

	
Restricted Stock Units
    	
 
    	
This grant is an   award of RSUs in the number set forth on the cover sheet. Each RSU represents   the right to receive one share of Stock, subject to the vesting conditions   and other terms and conditions described herein. Your RSUs may not be sold,   assigned, transferred, pledged or otherwise encumbered, whether voluntarily   or by operation of law, except by will or the laws of descent and   distribution. If you attempt to do any of these things, you will immediately   and automatically forfeit your RSUs.
    
	
 
    	
 
    	
 
    
	
Vesting
    	
 
    	
Your RSUs shall   vest in accordance with the vesting schedule set forth on the cover sheet of   this Agreement; provided, however, that for purposes of vesting, fractional   numbers of RSUs shall be rounded to the nearest whole number, and you may not   vest in more than the number of RSUs covered by this grant.

 

Unless the   termination of your Service triggers accelerated vesting or other treatment   of your RSUs pursuant to the terms of this Agreement or the Plan, you shall   immediately and automatically forfeit your unvested RSUs to the Company in   the event your Service terminates for any reason.
    
	
 
    	
 
    	
 
    
	
Change in Control
    	
 
    	
In the event of a   Change in Control, your RSUs will be treated in the manner provided in   Sections 16.3 or 16.4 of the Plan, as applicable.
    
	
 
    	
 
    	
 
    
	
Forfeiture of Unvested RSUs
    	
 
    	
In the event that   your Service terminates for any reason other than death or Disability, you   will forfeit to the Company all of your unvested RSUs.
    
	
 
    	
 
    	
 
    
	
Termination due to Death or   Disability
    	
 
    	
If your Service is   terminated due to your death or Disability, the unvested portion of your   grant shall become immediately vested.
    
	
 
    	
 
    	
 
    
	
Issuance
    	
 
    	
The issuance of the   Stock underlying your vested RSUs shall be made within forty-five (45) days   after the applicable vesting date of your RSUs. Any such issuance shall be   evidenced in such a manner as the Company, in its discretion, will deem   appropriate, including, without limitation, book-entry, direct registration   or issuance of one or more stock certificates.
    
	
 
    	
 
    	
 
    
	
Leaves of Absence
    	
 
    	
For purposes of this   Agreement, 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, in all other cases, your Service will be treated as   terminating ninety (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.
    
	
 
    	
 
    	
 
    
	
Dividend Equivalent Rights
    	
 
    	
If the Company declares one or more cash dividends   on the Stock during the period commencing on the Grant Date and ending on and   including the day immediately preceding the day on which the shares of Stock   subject to the vested RSUs are issued to you, then, on the date each such   dividend is paid to the holders of Stock, you will be credited with dividend   equivalents in an amount equal to the product of (i) the amount of the   dividend declared and paid per share of Stock and (ii) the number of   RSUs granted to you under this Agreement that are outstanding as of the   record date of such dividend. The dividend equivalents that are credited to   you in respect of each cash dividend will be deemed to have been reinvested   into additional RSUs (rounded to the nearest whole unit) as of the dividend   payment date based on the closing price of the Stock on the dividend payment   date. Any such additional RSUs shall be subject to the same terms and   conditions which apply to the underlying RSUs to which they relate and shall   vest or be forfeited, as applicable, at the same time as the underlying RSUs   to which they relate. The foregoing does not obligate the Company to pay   dividends on the Stock and nothing in the Plan or in this Agreement shall be   interpreted as creating such an obligation.

 

Notwithstanding anything to the contrary in this   Agreement, if the RSUs are scheduled to vest and be settled between a   dividend record date and a dividend payment date, then dividend equivalents   with respect to such dividend will be credited to you, will be deemed to have   been reinvested into additional RSUs (rounded to the nearest whole unit), and   will be paid to you on the earlier of (i) the dividend payment date for   such dividend and (ii) March 15th following the date on which the   underlying RSUs vest.
    

 

 

	
Withholding Taxes
    	
 
    	
You agree as a condition of this Agreement that you   will make acceptable arrangements to pay any withholding or other taxes that   may be due relating to the RSUs and the issuance of shares of Stock or cash   with respect to the RSUs. In the event that the Company determines that any   federal, state, local, or foreign tax or withholding payment is required   relating to the RSUs and/or the issuance of shares of Stock or cash with   respect to the RSUs, the Company shall have the right to (i) require you   to tender a cash payment, (ii) deduct from payments of any kind   otherwise due to you, or (iii) withhold the delivery of vested shares of   Stock otherwise deliverable under this Agreement to meet such obligations.

 

Any shares of Stock so withheld will have an aggregate   Fair Market Value not exceeding the minimum amount of tax required to be   withheld by applicable laws; provided, however, for so long as Accounting   Standards Update 2016-09 or a similar rule is otherwise in effect, the   Board or the Committee has full discretion to choose, or to allow you to   elect, to withhold a number of shares of Stock having an aggregate Fair   Market Value that is greater than the applicable minimum required statutory   withholding obligation (but such withholding may in no event be in excess of   the maximum statutory withholding amount(s) in your relevant tax   jurisdictions).

 

You agree that the Company or any Affiliate shall be   entitled to use whatever method it may deem appropriate to recover such   taxes. You further agree that the Company or any Affiliate may, as it   reasonably considers necessary, amend or vary this Agreement to facilitate   such recovery of taxes.
    
	
 
    	
 
    	
 
    
	
Retention Rights
    	
 
    	
Neither the RSUs   nor this Agreement gives you the right to be retained or employed by the   Company (or any Affiliate) in any capacity. Unless otherwise specified in any   written employment or other agreement between the Company or any Affiliate   and you, the Company (and any Affiliate) reserves the right to terminate your   Service at any time and for any reason.
    
	
 
    	
 
    	
 
    
	
Shareholder Rights
    	
 
    	
You have no rights   as a shareholder of the Company until shares of Stock underlying the RSUs   have been issued to you upon vesting of the RSUs and either a certificate   evidencing the shares of Stock has been issued to you or an appropriate entry   has been made on the Company’s books. Except as described in the Plan, no   adjustments are made for dividends or other rights if the applicable record   date occurs before an appropriate book entry is made (or your certificate is   issued).
    

 

 

	
Forfeiture of Rights
    	
 
    	
If you should take   actions in violation or breach of or in conflict with any agreement   prohibiting solicitation of employees or clients of the Company or any   Affiliate, any non-competition obligation with respect to the Company or any   Affiliate, any Company policy or procedure, any other agreement with or   obligation to the Company or any Affiliate, or any confidentiality obligation   with respect to the Company or any Affiliate, the Company has the right to   cause an immediate forfeiture of your unvested RSUs.

 

Without limiting   the generality of the foregoing, if, during your Service or the twelve (12)   month period following the termination of your Service for any reason, you   should take actions in competition with the Company, the Company shall have   the right, in its sole discretion, to cause a forfeiture of your unvested   RSUs, and, with respect to those shares of Stock that were issued to you in   respect of RSUs that vested during the period commencing on the date that is   twelve (12) months prior to your termination of Service and ending on (and   including) the date of your termination of Service, the Company shall have   the right, in its sole discretion, to require you to make a cash payment to   the Company (or to forfeit shares of Stock to the Company) in an amount   determined as follows: (1) for any shares of Stock that you have sold   prior to receiving notice from the Company, the amount will be the proceeds   received from the sale(s), and (2) for any shares of Stock that you   still own, the amount will be the number of shares of Stock owned times the   Fair Market Value of the shares of Stock on the date you receive notice from   the Company (provided, that, the Company may require you to satisfy your   payment obligations hereunder either by forfeiting and returning to the   Company such shares of Stock or any other shares of Stock or making a cash   payment or a combination of these methods, as determined by the Company in   its sole discretion).

 

Unless otherwise   specified in an employment or other agreement between the Company or any   Affiliate and you, you take actions in competition with the Company or any   Affiliate 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 competes with any business in which the   Company or any Affiliate is engaged during your employment or other   relationship with the Company or any Affiliate or at the time of
    

 

 

	
 
    	
 
    	
your termination   of Service.

 

If it is ever   determined by the Board that your actions have constituted wrongdoing that   contributed to any material misstatement or omission from any report or   statement filed by the Company with the U.S. Securities and Exchange   Commission, gross misconduct, breach of fiduciary duty to the Company, or   fraud, then the RSUs shall be immediately forfeited; provided, however, that   if the RSUs have vested within two (2) years prior to the Board’s   determination, you shall be required to pay to the Company an amount equal to   the aggregate Fair Market Value of the shares acquired upon such vesting at   the date of the Board’s determination.
    
	
 
    	
 
    	
 
    
	
Clawback
    	
 
    	
Your RSUs are   subject to mandatory repayment by you to the Company to the extent you are or   in the future become subject to (i) any Company or Affiliate “clawback”   or recoupment policy that is adopted to comply with the requirements of any   Applicable Laws, or (ii) any Applicable Laws which impose mandatory   recoupment, under circumstances set forth in such Applicable Laws.
    
	
 
    	
 
    	
 
    
	
Adjustments
    	
 
    	
In the event of a   stock split, reverse stock split, stock dividend, recapitalization,   combination or reclassification of shares, spin-off, or other similar change   in capitalization or event, the number of shares subject to the RSUs covered   by this grant may be adjusted pursuant to Section 16 of the Plan. Your RSUs   shall be subject to the terms of any applicable agreement of merger,   liquidation or reorganization in the event the Company is subject to such   corporate activity in accordance with the terms of the Plan.
    
	
 
    	
 
    	
 
    
	
Applicable Law
    	
 
    	
This Agreement   will be interpreted and enforced under the laws 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.
    
	
 
    	
 
    	
 
    
	
The Plan
    	
 
    	
The text of the   Plan is incorporated into this Agreement by reference.

 

This Agreement and   the Plan constitute the entire understanding between you and the Company   regarding this grant of RSUs. Any prior agreements, commitments or   negotiations concerning this grant are superseded; except that any written   employment, consulting, confidentiality, non-solicitation, non-competition,   and/or severance agreement between you and the Company or any Affiliate shall   supersede this Agreement with respect to its
    

 

 

	
 
    	
 
    	
subject matter.
    
	
 
    	
 
    	
 
    
	
Data Privacy
    	
 
    	
In order to   administer the Plan, the Company may 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   grant, you give explicit consent to the Company to 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 grantees, to the United States, to   transferees who shall include the Company and other persons who are   designated by the Company to administer the Plan.
    
	
 
    	
 
    	
 
    
	
Consent to Electronic Delivery
    	
 
    	
By accepting the   option, you consent to receive documents related to the option by electronic   delivery (including e-mail or reference to a website or other URL) and, if   requested, agree to participate in the Plan through an on-line or electronic   system established and maintained by the Company or another third party   designated by the Company, and your consent shall remain in effect throughout   your term of Service and thereafter until you withdraw such consent in   writing to the Company.
    
	
 
    	
 
    	
 
    
	
Code   Section 409A
    	
 
    	
The   RSUs granted under this Agreement are intended to be exempt from, or to   comply with, Code Section 409A to the extent subject thereto, and,   accordingly, to the maximum extent permitted, this Agreement will be   interpreted and administered to be in compliance with Code Section 409A.   Notwithstanding anything to the contrary in the Plan or this Agreement,   neither the Company, any Affiliates, the Board, nor the Committee will have   any obligation to take any action to prevent the assessment of any excise tax   or penalty on you under Code Section 409A, and neither the Company, any   Affiliates, the Board, nor the Committee will have any liability to you for   such tax or penalty.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
For   purposes of this Agreement, a termination of Service only occurs upon an   event that would be a Separation from Service.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Notwithstanding   anything in this Agreement to the contrary, if at the time of the Grantee’s   Separation from Service, (i) the Grantee is a specified employee (within   the meaning of Code
    

 

 

	
 
    	
 
    	
Section 409A   and using the identification methodology selected by the Company from time to   time), and (ii) the Company makes a good faith determination that an   amount payable on account of such separation from service to the Grantee   constitutes deferred compensation (within the meaning of Code   Section 409A) the payment of which is required to be delayed pursuant to   the six (6)-month delay rule set forth in Code Section 409A in   order to avoid taxes or penalties under Section 409A (the “Delay Period”), then the Company will not pay such amount   on the otherwise scheduled payment date but will instead pay it in a lump sum   on the first payroll date after such Delay Period (or upon the Grantee’s   death, if earlier), without interest thereupon.
    
	
 
    	
 
    	
 
    
	
Severability
    	
 
    	
If   any provision of this Agreement is held invalid or unenforceable by any court   of competent jurisdiction, the other provisions of this Agreement will remain   in full force and effect. Any provision of this Agreement held invalid or   unenforceable only in part or degree will remain in full force and effect to   the extent not held invalid or unenforceable.
    

 

By signing the cover sheet of this Agreement, you agree to all of the terms and conditions described above and in the Plan.Exhibit 10.12

 

 

NEXTCURE, INC.

 

2019 EMPLOYEE STOCK PURCHASE PLAN

 

 

 

NEXTCURE, INC.

2019 EMPLOYEE STOCK PURCHASE PLAN

 

1.                                      PURPOSE AND INTERPRETATION

 

(a)                                 The purpose of the NextCure, Inc. 2019 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      , 2019, and was approved by the Company’s stockholders on      , 2019.

 

(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 to administer the Plan.

 

(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 NextCure, 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 the Stock is declared effective by the United States Securities and Exchange Commission.

 

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(h)                                 “Eligible Compensation” shall mean, unless otherwise established by the Administrator prior to the start of an Offering Period, regular base compensation (including any shift differentials), but excludes any bonus, overtime payment, sales commission, contributions to any Code Section 125 or 401(k) plan, the cost of employee benefits paid for by the Company or a Participating Affiliate, education or tuition reimbursements, imputed income arising under any Company or Participating Affiliate group insurance or benefit program, traveling expense reimbursements, business and moving expense reimbursements, income received in connection with stock options and other equity awards, or other form of extra compensation.

 

(i)                                     “Eligible Employee” shall mean a natural person who is an employee (including an officer) of the Company or a Participating Affiliate 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

 

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preceding such date, or, if no sale of the shares of Stock is reported for such Trading Day, on the next 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)                                 “NGM” shall mean the Nasdaq Global Market.

 

(o)                                 “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.

 

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

 

(q)                                 “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.

 

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

 

(s)                                   “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 6(c) 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.

 

(t)                                    “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.

 

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

 

(v)                                 “Plan” shall mean this NextCure, Inc. 2019 Employee Stock Purchase Plan, as it may be amended from time to time.

 

(w)                               “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.

 

(x)                                 “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 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 NGM (or, if the Stock ceases to trade on the NGM, on the

 

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principal national securities exchange on which the Stock is then trading) 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).

 

(y)                                 “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.

 

(z)                                  “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.

 

(aa)                          “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.

 

(bb)                          “Trading Day” shall mean a day on which the NGM (or, if the Stock ceases to trade on the NGM, the principal national securities exchange on which the Stock is then trading) 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 two hundred forty thousand (240,000) 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, 2020 and continuing until the expiration of the Plan,

 

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in an amount equal to the least of (i) one percent (1%) of the total number of shares of Stock outstanding on December 31st of the preceding calendar year, (ii) four hundred eighty thousand (480,000) shares of Stock (subject to adjustment as provided in Section 12) and (iii) a number of shares of Stock determined by the Administrator.  For the avoidance of doubt, 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.  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.

 

(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;

 

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(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 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 respective 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.

 

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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.

 

(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, unless otherwise established by the Administrator prior to the start of an Offering Period, 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

 

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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 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.  Unless otherwise established by the Administrator prior to the start of an Offering Period, the Plan shall have two (2) Offering Periods (with concurrent Purchase Periods) that commence each calendar year, and each Offering Period shall be of approximately six (6) months’ duration, with the first such Offering Period beginning on the first Trading Day of April and ending on the last Trading Day of the immediately following September, and the second such Offering Period beginning on the first Trading Day of October and ending on the last Trading Day of the immediately following March.

 

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(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 NGM (or, if the Stock ceases to trade on the NGM, on the principal national securities exchange on which the Stock is then trading) 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).

 

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 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, 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).  Notwithstanding any provisions of the Plan to the contrary, 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.

 

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(b)                                 Limit on Number of Shares Purchased.  Notwithstanding Section 8(a) or Section 9(a), in no event may a Participant purchase more than five thousand (5,000) 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 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.

 

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(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 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

 

12

 

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 Effective Date, the number and kinds of shares that may be purchased under the Plan (including, for the avoidance of doubt, the numerical limits of Sections 3(a) and 9(b)) 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 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

 

13

 

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       , 2019), (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, materially impair any rights of a Participant that have vested at the time of such amendment, suspension, or termination.  The effectiveness of any amendment to the Plan shall be contingent on approval of such amendment by the Company’s stockholders to the extent provided by the Board or required by applicable law.

 

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 or within one (1) year from the date the shares of Stock 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.

 

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(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.

 

(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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