Document:

EXHIBIT 10.25

 

December 19, 2012

 

Alison Lawton

 

Dear Alison:

 

On behalf of OvaScience, Inc. (the “Company”), I am pleased to offer you employment with the Company.  The purpose of this letter is to summarize the terms of your employment with the Company, should you accept our offer.

 

1.                                      Employment.  You will be employed, effective January 21, 2013, to serve on a full-time basis as Chief Operating Officer of the Company.  In this role, you will report to the Company’s Chief Executive Officer, and have such duties and responsibilities as are customary for such position, including functional responsibility for Regulatory, Quality and Manufacturing and as are otherwise assigned to you from time to time by the Company. You agree to devote your full business time, best efforts, skill, knowledge, attention, and energies to the advancement of the Company’s business and interests and to the performance of your duties and responsibilities as an employee of the Company and not to engage in any other business activities without prior approval from the Company. However, notwithstanding the above, the Company hereby agrees that you may continue to serve as a member of the Board of Directors of Cubist Pharmaceuticals & Verastem, Inc.

 

2.                                      Compensation.  Your base salary will be $29,166.67 per month ($350,000 on an annualized basis), subject to applicable taxes and withholdings and will be reviewed for increase yearly at the sole discretion of the Board.  You will be eligible to receive an annual discretionary bonus award of up to 50% of your then current base salary.  The bonus award, if any, will be determined by the Board of Directors of the Company (the “Board”) in its sole discretion, based on goals to be determined by the Chief Executive Officer of the Company in consultation with the Board no later than 90 days after your start date and will be annually reviewed and determined every January thereafter during your employment with the Company.  Any bonus hereunder shall be paid no later than forty-five (45) days after the end of the year with respect to which such bonus is being awarded.  You must be an active employee of the Company on the date on which bonuses are distributed in order to receive any bonus award, because it also serves as an incentive to remain employed by the Company.

 

3.                                      Benefits.  You may participate in any and all bonus and benefit programs that the Company establishes and makes available to its employees from time to time, provided you are eligible under (and subject to all provisions of) the plan documents governing those programs. The benefits made available by the Company, and the rules, terms and conditions for participation in such benefit plans, may be changed by the Company at any time and from time to time without advance notice.

 

4.                                      Vacation.  You may be eligible for a maximum of four (4) weeks of vacation per calendar year to be taken at such times as may be approved by the Company.  The number of

 

 

vacation days for which you are eligible shall accrue at the rate of 1.7 days per month that you are employed during such calendar year.

 

5.                                      Stock Options.  Subject to the approval of the Board, the Company may grant to you an incentive stock option (the “Option”) under the Company’s 2012 Stock Incentive Plan (the “Plan”) for the purchase of an aggregate of 368,892 shares of Common Stock of the Company (subject to appropriate adjustments for stock splits, stock dividends, combinations, recapitalizations and similar transactions affecting the Common Stock of the Company after the date hereof) at a price per share equal to the fair market value at the time of Board approval.  The Option shall be subject to all terms, vesting schedules and other provisions set forth in the Plan and in a separate option agreement. The Option will be subject to a vesting schedule of 4 years, with 25% of the shares vesting on the first anniversary of your employment start date and 6.25% of the shares vesting each quarter thereafter. Notwithstanding anything in the plan or stock option agreement that says otherwise, if a Change in Control Event (as defined on Exhibit A attached hereto) occurs and, within one (1) year of such Change in Control Event, your employment is terminated by the Company (or any successor) without Cause (as defined on Exhibit A) or by you for Good Reason (as defined on Exhibit A), the vesting schedule of the Option shall be accelerated in full. You may be eligible to receive such future stock options grants as the Board shall deem appropriate.

 

6.                                      Severance Benefits Upon Termination by the Company Without “Cause” or by you for “Good Reason”.  If the Company terminates your employment without Cause (as defined on Exhibit A attached hereto) or you terminate your employment for Good Reason (as defined on Exhibit A), you shall be eligible to receive the following severance benefits: (a) severance pay in an amount equal to twelve (12) months of your base salary as in effect at the time of your termination, payable in accordance with the Company’s regular payroll procedures proportionately over a twelve (12) month period (such period, the “Severance Period”); provided that if you commence any full-time employment substantially similar to your employment hereunder (based upon responsibility, reporting and compensation) during the Severance Period, your severance amount shall be reduced such that the number of months of severance pay to which you will be entitled shall be equal to that number of months between the date your employment with the Company terminates and the date you commence such substantially similar new full-time employment, (b) should you be eligible for and elect to continue receiving group medical and dental insurance coverage under the law known as COBRA, the Company shall continue to pay on your behalf, through the earlier of (x) the last day of the Severance Period, or (y) the date that you become eligible for group health and/or dental insurance coverage from any new employer, that portion of the monthly premiums for such coverage that it pays for active and similarly situated employees receiving the same type of coverage, (c) subject to the effectiveness of your waiver and release agreement referenced below, an additional twelve (12) months of vesting of your then unvested options (unless your termination is due to a Change in Control Event, in which case your vesting of the Option described in paragraph 5 above shall be governed by that paragraph), and (d) a pro-rata share of the bonus, if any, that you would have received if you continued to be employed on the date the bonus was paid with respect to the fiscal year ending on or preceding the date of termination, as determined by the Company in its sole reasonable discretion.  No severance pay or other benefit hereunder shall be provided to you unless, within 60 days following the date of termination, you first execute and do not revoke a waiver and release agreement in a form substantially similar to that attached as Exhibit E, which

 

 

shall be given to you within three days following your termination, and which provides for a release of any and all claims that you have or might have against the Company (provided, however, that, without your consent, you shall not be required to release any rights to Severance Benefits that you may have under this offer letter, or any vested rights you may have as of the date of termination in any qualified retirement or pension plan of the Company, or any rights you may have to indemnification pursuant to any then-applicable Company by-laws or insurance policies).  The severance payments shall commence on the first payroll period following the date the waiver and release becomes effective (the “Payment Date”).  Notwithstanding the foregoing, if the 60th day following the date of termination occurs in the calendar year following the termination, then the Payment Date shall be no earlier than January 1 of such subsequent calendar year. The distribution of any severance payments shall be subject to the provisions of Exhibit B attached hereto.

 

7.                                      Notices.  Any purported termination of employment by the Company for Cause or by you for Good Reason shall be communicated to the other party through written notice, indicating the specific grounds for such termination.  Such notice, and all other communications which are required or may be given pursuant to the terms of this letter, shall be sufficient in all respects if given in writing and shall be deemed given (i) if delivered personally, on the date of delivery, (ii) if mailed by certified or registered mail, return receipt requested and postage prepaid, three (3) days after the mailing date, (iii) if sent via a nationally recognized overnight courier, on the next business day thereafter, or (iv) if sent via facsimile confirmed in writing to the recipient, or via email, on the next business day thereafter, in each case, if to the Company, at the Company’s principal place of business, and if to you at the most recent home address (and/or, as applicable, the most recent personal email address) which you have provided to the Company or to such other address or addresses as either party shall have designated in writing to the other party.

 

8.                                      Invention, Non-Disclosure, Non-Competition and Non-Solicitation.  As a condition of your employment with the Company, you will be required to execute an Invention and Non-Disclosure Agreement and a Non-Competition and Non-Solicitation Agreement in the forms attached as Exhibit C and Exhibit D.

 

9.                                      Other Agreements.  You represent that you are not bound by any employment contract, restrictive covenant or other restriction preventing you from entering into employment with or carrying out your responsibilities for the Company, or which is in any way inconsistent with the terms of this letter.

 

10.                               Proof of Legal Right to Work.  You agree to provide to the Company, within 3 days of your hire date, documentation of your eligibility to work in the United States, as required by the Immigration Reform and Control Act of 1986.  If you need to obtain a work visa in order to be eligible to work in the United States, your employment with the Company will be conditioned upon your obtaining a work visa in a timely manner as determined by the Company.

 

11.                               At-Will Employment.  This letter shall not be construed as an agreement, either express or implied, to employ you for any stated term, and shall in no way alter the Company’s policy of employment at will, under which both you and the Company remain free to terminate the employment relationship for any reason or no reason, with or without cause, at any time, with or without notice.  Similarly, nothing in this letter shall be construed as an agreement, either

 

 

express or implied, to pay you any compensation or grant you any benefit beyond the end of your employment with the Company, except as explicitly set forth in paragraph 6.

 

12.                               Company Policies and Procedures.  As an employee of the Company, you will be required to comply with all Company policies and procedures.  Further, the Company’s premises, including all workspaces, furniture, documents and other tangible materials, and all information technology resources of the Company (including, but not limited to, computers, data and other electronic files, and all internet and e-mail systems) are subject to oversight and inspection by the Company at any time.  Company employees should have no expectation of privacy with regard to any Company premises, materials, resources or information.

 

Please note that this offer letter is your formal offer of employment and supersedes any and all prior or contemporaneous agreements, discussions and understandings, whether written or oral, relating the subject matter of this letter or your employment with the Company.  The resolution of any disputes under this letter will be governed by Massachusetts law.  This offer letter shall be binding upon and shall inure to the benefit of the parties and their respective successors. You shall be indemnified pursuant to any Company D&O insurance policies and/or by-laws to the same extent as similarly situated Company employees.

 

If this letter correctly sets forth the terms under which you will be employed by the Company, please sign the enclosed duplicate of this letter in the space provided below and return it to me by December [insert new date], 2012.  If you do not accept this offer by December [insert new date], 2012, the offer will be deemed revoked.

 

	
 
    	
Very   Truly Yours,
    
	
 
    	
 
    
	
 
    	
OVASCIENCE, INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Michelle Dipp, MD Ph.D.
    
	
 
    	
 
    	
Chief Executive Officer
    

 

The foregoing correctly sets forth the terms of my at-will employment with OvaScience, Inc.  I am not relying on any representations other than as set forth above.

 

	
 
    	
 
    	
Date:
    	
 
    
	
Alison   Lawton
    	
 
    	
 
    	
 
    

 

 

Exhibit A

 

Definitions

 

“Cause” for termination shall be deemed to exist upon:

 

(A)                         a good faith finding by the Company (i) of repeated or willful failure of the employee, after written notice, to perform his or her reasonably assigned duties for the Company, or (ii) that the employee has engaged in dishonesty, gross negligence or misconduct, which dishonesty, gross negligence or misconduct has had a material adverse effect on the business or affairs of the Company;

 

(B)                         the conviction of the employee of, or the entry of a pleading of guilty or nolo contendere by the employee to, any crime involving moral turpitude or any felony; or

 

(C)                         a breach by the employee of any material provision of any invention and non-disclosure agreement or non-competition and non-solicitation agreement with the Company, which breach is not cured within ten days written notice thereof.

 

A “Change in Control Event” shall be deemed to exist upon the sale of all or substantially all of the outstanding shares of capital stock, assets or business of the Company, by merger, consolidation, sale of assets or otherwise (other than a transaction in which all or substantially all of the individuals and entities who were beneficial owners of the capital stock of the Company immediately prior to such transaction beneficially own, directly or indirectly, more than 50% of the outstanding securities (on an as-converted to Common Stock basis) entitled to vote generally in the election of directors of the (i) resulting, surviving or acquiring corporation in such transaction in the case of a merger, consolidation or sale of outstanding shares, or (ii) acquiring corporation in the case of a sale of assets).

 

“Good Reason” shall be deemed to exist upon:

 

(A)                         the relocation of the Company’s offices such that the employee’s daily commute is increased by at least 30 miles each way without the written consent of the employee;

 

(B)                         material reduction of the employee’s annual base salary without the prior consent of the employee (other than in connection with, and substantially proportionate to, reductions by the Company of the annual base salary of more than 50% of its employees); or

 

(C)                         material diminution in employee’s duties, authority or responsibilities without the prior consent of the employee, other than changes in duties, authority or responsibilities resulting from the employee’s misconduct;

 

provided, however, that any reduction in duties, authority or responsibilities or reduction in the level of management to which the employee reports resulting solely from a Change in Control which results in the Company being acquired by and made a part of a larger entity (as, for example, when a chief operating officer becomes an employee of the acquiring corporation following an acquisition but is not the chief operating officer of the acquiring corporation) shall not constitute Good Reason;

 

 

provided, further however, that no such event or condition shall constitute Good Reason unless (x) the employee gives the Company a written notice of termination for Good Reason not more than 90 days after the initial existence of the condition, (y) the grounds for termination if susceptible to correction are not corrected by the Company within 30 days of its receipt of such notice and (z) the employee’s termination of employment occurs within six months following the Company’s receipt of such notice.

 

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Exhibit B

 

Payments Subject to Section 409A

 

1.                                      Subject to this Exhibit B, payments or benefits during the Severance Period under this offer letter (“Severance Payments”) shall begin only upon the date of your “separation from service” (determined as set forth below) which occurs on or after the termination of your employment.  The following rules shall apply with respect to distribution of the Severance Payments, as applicable:

 

(a)                                  It is intended that each installment of the Severance Payments shall be treated as a separate “payment” for purposes of Section 409A of the Code and the guidance issued thereunder (“Section 409A”).  Neither the Company nor you shall have the right to accelerate or defer the delivery of any such Severance Payments except to the extent specifically permitted or required by Section 409A.

 

(b)                                  If, as of the date of your “separation from service” from the Company, you are not a “specified employee” (within the meaning of Section 409A), then each installment of the Severance Payments shall be made on the dates and terms set forth in the offer letter.

 

(c)                                   If, as of the date of your “separation from service” from the Company, you are a “specified employee” (within the meaning of Section 409A), then:

 

(i)                                     Each installment of the Severance Payments due under the offer letter that, in accordance with the dates and terms set forth herein, will in all circumstances, regardless of when your separation from service occurs, be paid within the Short-Term Deferral Period (as defined under Section 409A) shall be treated as a short-term deferral within the meaning of Treasury Regulation Section 1.409A-1(b)(4) to the maximum extent permissible under Section 409A and shall be made on the dates and terms set forth in the offer letter; and

 

(ii)                                  Each installment of the Severance Payments due under the offer letter that is not described in this Exhibit B, Section 1(c)(i) and that would, absent this subsection, be paid within the six-month period following your “separation from service” from the Company shall not be paid until the date that is six months and one day after such separation from service (or, if earlier, your death), with any such installments that are required to be delayed being accumulated during the six-month period and paid in a lump sum on the date that is six months and one day following your separation from service and any subsequent installments, if any, being paid in accordance with the dates and terms set forth herein; provided, however, that the preceding provisions of this sentence shall not apply to any installment of Severance Payments if and to the maximum extent that that such installment is deemed to be paid under a separation pay plan that does not provide for a deferral

 

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of compensation by reason of the application of Treasury Regulation 1.409A-1(b)(9)(iii) (relating to separation pay upon an involuntary separation from service).  Any installments that qualify for the exception under Treasury Regulation Section 1.409A-1(b)(9)(iii) must be paid no later than the last day of your second taxable year following the taxable year in which the separation from service occurs.

 

2.                                      The determination of whether and when your separation from service from the Company has occurred shall be made and in a manner consistent with, and based on the presumptions set forth in, Treasury Regulation Section 1.409A-1(h).  Solely for purposes of this Exhibit B, Section 2, “Company” shall include all persons with whom the Company would be considered a single employer under Section 414(b) and 414(c) of the Code.

 

3.                                      All reimbursements and in-kind benefits provided under the offer letter shall be made or provided in accordance with the requirements of Section 409A to the extent that such reimbursements or in-kind benefits are subject to Section 409A.

 

4.                                      The Company makes no representation or warranty and shall have no liability to you or to any other person if any of the provisions of the offer letter (including this Exhibit) are determined to constitute deferred compensation subject to Section 409A but that do not satisfy an exemption from, or the conditions of, that section

 

4EXHIBIT 10.26

 

OVASCIENCE, INC.

 

Restricted Stock Unit Agreement

Granted under 2012 Stock Incentive Plan

 

NOTICE OF GRANT

 

This Restricted Stock Unit Agreement (this “Agreement”) is made as of the Agreement Date between OvaScience, Inc. (the “Company”), a Delaware corporation, and the Participant.

 

	
I.
    	
Agreement   Date
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
Date:
    	
December 5,   2012
    
	
 
    	
 
    	
 
    
	
II.
    	
Participant   Information
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
Participant:
    	
Michelle   Dipp, M.D., Ph.D.
    
	
 
    	
Participant   Address:
    	
P.O. Box   990865
   Boston, MA 02199
    
	
 
    	
 
    	
 
    
	
III.
    	
Grant   Information
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
Grant   Date:
    	
December 5,   2012
    
	
 
    	
Restricted   Stock Units:
    	
128,205
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
IV.
    	
Vesting   Table
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
Vesting Date
    	
 
    	
RSUs that Vest
    	
 
    
	
 
    	
March 31, 2013 (the “First Vesting Date”)
    	
 
    	
12.5
    	
%
    
	
 
    	
Quarterly   on each Three-Month Anniversary of the First Vesting Date until   December 31, 2014
    	
 
    	
12.5
    	
%
    
							

 

This Agreement includes this Notice of Grant and the following General Terms and Conditions (attached as Exhibit A), which are expressly incorporated by reference in their entirety herein.

 

 

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the Agreement Date.

 

	
OVASCIENCE, INC.
    	
 
    	
PARTICIPANT
    
	
 
    	
 
    	
 
    	
 
    
	
By:
    	
 
    	
 
    	
 
    
	
Name:
    	
 
    	
 
    	
Name:   Michelle Dipp, M.D., Ph.D.
    
	
Title:
    	
 
    	
 
    	
 
    
					

 

 

Restricted Stock Unit Agreement

 

EXHIBIT A

 

GENERAL TERMS AND CONDITIONS

 

For valuable consideration, receipt of which is acknowledged, the parties hereto agree as follows:

 

1.                                      Grant of RSUs; Condition of Grant.  In consideration of services rendered to the Company by the Participant, the Company has granted to the Participant, subject to the terms and conditions set forth in this Agreement and in the Company’s 2012 Stock Incentive Plan (the “Plan”), an award of Restricted Stock Units (the “RSUs”), representing an award of the number of RSUs (the “Share Number”) set forth in the Notice of Grant that forms part of this Agreement (the “Notice of Grant”).  The RSUs entitle the Participant to receive, upon and subject to the vesting of the RSUs (as described in Section 2 below), one share of common stock, $0.001 par value per share, of the Company (the “Common Stock”) for each RSU that vests.  The shares of Common Stock that are issuable upon vesting of the RSUs are referred to in this Agreement as the “Shares.”

 

2.                                      Vesting of the RSUs; Issuance of Shares.

 

(a)                                 Vesting of the RSUs.  Subject to the other provisions of this Section 2, the RSUs shall vest in accordance with the Vesting Table set forth in the Notice of Grant (the “Vesting Table”).  Any fractional RSU resulting from the application of the percentages in the Vesting Table shall be rounded to the nearest whole number of RSUs.  Within thirty days of each vesting date shown in the Vesting Table (the “Vesting Dates”) or the events described in Section 2(b)(2) below, the Company will issue to the Participant, in certificated or uncertificated form, such number of Shares as is equal to the number of RSUs that vested on such Vesting Date or event, as applicable, and shall deliver such Shares to the Participant, or to the broker designated by the Participant.

 

(b)                                 Termination and Acceleration.

 

(1)                                 Termination of the Participant.  Except to the extent specifically otherwise provided herein, in the Plan or in another agreement between the Company and the Participant, upon the termination of the Participant’s employment as the full-time Chief Executive Officer of the Company for any reason or no reason, all RSUs that have not vested pursuant to Section 2(a) shall be automatically forfeited as of such termination.

 

(2)                                 Accelerated Vesting Upon Certain Terminations of Employment.  Notwithstanding Section 2(b)(1) above, in the event that the Participant’s employment as the full-time Chief Executive Officer of the Company is terminated by the Company without Cause, or the Participant terminates her position as full-time Chief Executive Officer of the Company for Good Reason, then the unvested portion of the RSU that would have otherwise vested during the six (6) month period following termination shall vest as of the date of termination.  “Cause” and “Good Reason” are each defined in Annex 1 attached hereto.

 

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(3)                                 Accelerated Vesting Upon Change of Control.  Notwithstanding Section 2(b)(1) above, upon a Change of Control the RSUs shall vest in full as of the date of such Change of Control and the Shares underlying the RSUs shall be delivered to the Participant on such date.  “Change of Control” is defined in Annex 1 attached hereto.

 

(4)                                 Release of Claims.  Notwithstanding the foregoing, the provisions of Section 2(b)(1) and Section 2(b)(2) above shall be conditioned upon the Participant’s execution and non-revocation of a reasonable release of claims (said release not to include new or other contractual obligations of any kind and not to extinguish any rights to indemnification or insurance coverage the Participant might possess) following the date of termination or resignation which provides for a release of any and all claims that Participant has or might have against the Company.

 

3.                                      Dividends.  The RSUs shall have no rights with respect to dividends declared by the Company with respect to its capital stock, provided that the foregoing shall not prohibit or otherwise limit the adjustment of the terms of this Agreement in accordance with Section 9 of the Plan.

 

4.                                      Taxes.

 

(a)                                 Acknowledgments;  No Section 83(b) Election.  The Participant acknowledges that she is responsible for obtaining the advice of the Participant’s own tax advisors with respect to the grant of the RSUs and the Shares upon vesting thereof and the Participant is relying solely on such advisors and not on any statements or representations of the Company or any of its agents with respect to the tax consequences relating to the RSUs or Shares.  The Participant understands that the Participant (and not the Company) shall be responsible for the Participant’s tax liability that may arise in connection with the acquisition, vesting and/or disposition of the RSUs and the Shares underlying the RSUs.  The Participant acknowledges that no election under Section 83(b) of the Internal Revenue Code, as amended, is available with respect to the issuance of the RSUs and the Shares underlying the RSUs.

 

(b)                                 Withholding.  As a condition to the granting of the RSUs and the vesting thereof, the Participant acknowledges and agrees that she is responsible for the payment of income and employee-side employment taxes (and any other taxes required to be withheld) payable in connection with the grant or vesting of, or otherwise in connection with, the RSUs.  Accordingly, the Participant agrees to remit to the Company or any applicable subsidiary an amount sufficient to pay such taxes.  Such payment shall be made to the Company or the applicable subsidiary of the Company in a form that is reasonably acceptable to the Company, as the Company may determine in its discretion.  The Company (i) shall, prior to the date the Common Stock commences trading on a national securities exchange (the “Trading Date”) and during any period in which the Participant is prohibited from selling Common Stock pursuant to a lockup agreement with the Company (and the Company has not consented to such sale) or with underwriters in connection with an offering (such lockup periods, the “Lockup Periods”), at the election of the Participant, and (ii) may, following the Trading Date and outside of any Lockup Period, in its discretion, retain and withhold from delivery at the time of vesting that number of shares of Common Stock having a fair market value equal to the statutory minimum withholding taxes owed by the Participant, which retained shares shall fund the payment of such taxes by the Company on behalf of the Participant.  Alternatively, the Company may require the Participant to provide a designated broker with irrevocable instructions directing the designated broker to,

 

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on the date of the designated broker’s receipt of any shares of Common Stock in accordance with Section 2, sell in accordance with ordinary principles of best execution that number of such shares of Common Stock as is necessary to yield net proceeds to the Participant equal to the amount of withholding taxes with respect to the income recognized by the Participant as a result of the vesting of the RSUs (based on the minimum statutory withholding rates for all tax purposes, including payroll and social taxes, that are applicable to such income) and remit such proceeds to the Company in satisfaction of such tax withholding obligations of the Company.

 

5.                                      Transferability.

 

(a)                                 Restrictions on Transfer. The Participant shall not sell, assign, transfer, pledge, hypothecate or otherwise encumber, by operation of law or otherwise, any RSUs, or any interest therein, until such RSUs have vested and the Shares underlying the RSUs have been issued.

 

(b)                                 Agreement in Connection with Initial Public Offering.  The Participant agrees, in connection with the initial underwritten public offering of the Common Stock pursuant to a registration statement under the Securities Act, (i) not to (a) offer, pledge, announce the intention to sell, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, or otherwise transfer or dispose of, directly or indirectly, any shares of Common Stock or any other securities of the Company or (b) enter into any swap or other agreement that transfers, in whole or in part, any of the economic consequences of ownership of shares of Common Stock or other securities of the Company, whether any transaction described in clause (a) or (b) is to be settled by delivery of securities, in cash or otherwise, during the period beginning on the date of the filing of such registration statement with the Securities and Exchange Commission and ending 180 days after the date of the final prospectus relating to the offering (plus up to an additional 34 days to the extent requested by the managing underwriters for such offering in order to address FINRA Rule 2711(f)(4) or any similar successor provision), except to the extent required to satisfy the tax withholding obligations set forth in Section 4(b) of this Agreement, and (ii) to execute any agreement reflecting clause (i) above as may be requested by the Company or the managing underwriters at the time of such offering.  The Company may impose stop-transfer instructions with respect to the shares of Common Stock or other securities subject to the foregoing restriction until the end of the “lock-up” period.

 

(c)                                  Agreement in Connection with Registration of Securities on Form 10.

 

(1)                                 The Participant agrees, in connection with the filing of a registration statement on Form 10 (the “Form 10”) relating to the registration pursuant to Section 12(g) of the Securities Exchange Act of 1934, as amended, of the Common Stock, (i) not to, without the consent of the Company, (a) offer, pledge, announce the intention to sell, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, or otherwise transfer or dispose of, directly or indirectly, any shares of Common Stock or any other securities of the Company or (b) enter into any swap or other agreement that transfers, in whole or in part, any of the economic consequences of ownership of shares of Common Stock or other securities of the Company, whether any transaction described in clause (a) or (b) is to be settled by delivery of securities, in cash or otherwise, during the period beginning on the date on which the Securities and Exchange Commission informs the Company that it has completed its review of the Form 10 and ending on

 

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the earlier of (x) 270 days following the date on which the Company’s Common Stock commences trading on a national securities exchange (the “Trading Date”), except to the extent required to satisfy the tax withholding obligations set forth in Section 4(b) of this Agreement, and (y) March 29, 2015, and (ii) to execute any agreement reflecting clause (i) above as may be requested by the Company.  The Company may impose stop-transfer instructions with respect to the shares of Common Stock or other securities subject to the foregoing restriction until the end of the “lock-up” period.

 

(2)                                 The foregoing provisions of Section 5(c)(1) shall not apply to (i) shares of Common Stock acquired in open market transactions after the Trading Date; (ii) transactions relating to shares of Common Stock purchased in accordance with clause (i) of this Section 5(c)(2); (iii) a repurchase of Common Stock by the Company at a price no greater than that originally paid by the Participant for such Common Stock and pursuant to an agreement containing vesting and/or repurchase provisions approved by a majority of the Board of Directors; (iv) a transfer of securities made for bona fide estate planning purposes, either during the Participant’s lifetime or on death by will or intestacy to her family members or any other person approved by the Board of Directors, or any custodian or trustee of any trust, partnership or limited liability company for the benefit of, or the ownership interests of which are owned wholly by, the Participant or any such family members, provided in all cases referred to in this clause (iv) that no consideration is actually paid for such transfer and (v) the receipt of a stock option, shares of restricted Common Stock or other awards, or the exercise of a stock option, granted under the Plan or another stock option plan approved by a majority of the Board of Directors.

 

6.                                      Reorganization Event.  In the event of a Reorganization Event, with respect to any outstanding and unvested RSUs (after taking into account any vesting in connection with such Reorganization Event), the Board shall use its best efforts to provide for the assumption or continuation of such unvested RSUs in accordance with Section 9(b)(2)(A)(i) of the Plan.

 

7.                                      Miscellaneous.

 

(a)                                 No Rights to Employment.  The Participant acknowledges and agrees that the grant of the RSUs and their vesting pursuant to Section 2 do not constitute an express or implied promise of continued employment for the vesting period of the RSUs, or for any period.

 

(b)                                 Section 409A.  This Agreement is intended to comply with or be exempt from the requirements of Section 409A of the Code and shall be construed consistently therewith.  In any event, the Company makes no representations or warranties and will have no liability to the Participant or to any other person, if any of the provisions of or payments under this Agreement are determined to constitute nonqualified deferred compensation subject to Section 409A of the Code but that do not satisfy the requirements of that Section.

 

(c)                                  Entire Agreement.  This Agreement and the Plan constitute the entire agreement between the parties, and supersede all prior agreements and understandings, relating to the subject matter of this Agreement; provided that any separate employment or severance agreement between the Company and the Participant that includes terms relating to the acceleration of vesting of equity awards shall not be superseded by this Agreement.  In the event of a conflict between the terms and provisions of the Plan and the terms and provisions of this Agreement, the Plan terms and provisions shall prevail.

 

4

 

(d)                                 Governing Law.  This Agreement shall be construed, interpreted and enforced in accordance with the internal laws of the State of Delaware, without regard to any applicable conflict of law principles.

 

(e)                                  Authority of Compensation Committee.  In making any decisions or taking any actions with respect to the matters covered by this Agreement, the Compensation Committee shall have all of the authority and discretion, and shall be subject to all of the protections, provided for in the Plan.  All decisions and actions by the Compensation Committee with respect to this Agreement shall be made in the Compensation Committee’s discretion and shall be final and binding on the Participant.

 

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Annex 1

 

Definitions

 

1.                                      For purposes of this Agreement, “Affiliates” shall mean all persons and entities directly or indirectly controlling, controlled by or under common control with the Company, where control may be by management authority, equity interest or otherwise.

 

2.                                      For purposes of this Agreement, the following shall constitute “Cause” for termination of employment:  (i) the Participant’s willful failure to perform, or gross negligence in the performance of, the Participant’s material duties and responsibilities to the Company and its Affiliates, which failure or negligence is not remedied within thirty (30) days of written notice thereof; (ii)                the Participant’s material breach of any material provision of this Agreement or any other agreement with the Company or any of its Affiliates, which breach is not remedied within thirty (30) days of written notice thereof; (iii)       fraud, embezzlement or other dishonesty with respect to the Company or any of its Affiliates, taken as a whole, which, in the case of such other dishonesty, causes or could reasonably be expected to cause material harm to the Company or any of its Affiliates, taken as a whole; or (iv) the Participant’s conviction of a felony.

 

3.                                      For purposes of this Agreement, “Change of Control” shall mean (i) the acquisition of beneficial ownership (as defined in Rule 13-3 under the Exchange Act) directly or indirectly by any “person” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act), of securities of the Company representing a majority or more of the combined voting power of the Company’s then outstanding securities, other than in an acquisition of securities for investment purposes pursuant to a bona fide financing of the Company; (ii) a merger or consolidation of the Company with any other corporation in which the holders of the voting securities of the Company prior to the merger or consolidation do not own more than 50% of the total voting securities of the surviving corporation; or (iii) the sale or disposition by the Company of all or substantially all of the Company’s assets other than a sale or disposition of assets to an Affiliate of the Company or a holder of securities of the Company; notwithstanding the foregoing, no transaction or series of transactions shall constitute a Change of Control unless such transaction or series of transactions constitutes a “change in control event” within the meaning of Treasury Regulation Section 1.409A-3(i)(5)(i).

 

4.                                      For purposes of this Agreement, “Good Reason” shall mean without the Participant’s consent, the occurrence of any one or more of the following events, provided (x) the Participant has furnished written notice to the Company of the condition giving rise to the claimed Good Reason no later than thirty (30) days following the occurrence of such condition, (y) the Company has failed to remedy the condition within thirty (30) days thereafter and (z) the Participant’s employment with the Company terminates within six months following the delivery of such notice:  (i)  a material diminution in the nature or scope of the Participant’s responsibilities, duties or authority, provided that in the absence of a Change of Control neither (x) the Company’s failure to continue the Participant’s appointment or election as a director or officer of any of its Affiliates, nor (y) any diminution in the nature or scope of the Participant’s responsibilities, duties or authority that is reasonably related to a diminution of the business of the Company or any of its Affiliates shall constitute “Good Reason”; (ii) a failure of the Company to provide the Participant the equity awards required to be granted in accordance with Section 3 of the letter agreement dated December 5, 2012 between the Company and the Participant after thirty (30) days’ notice during which the Company does not cure such failure; or

 

 

(iii) relocation of the Participant’s office more than fifty (50) miles from the location of the Company’s principal offices as of the Grant Date.

 

5.                                      For purposes of this Agreement, “Person” shall mean an individual, a corporation, an association, a partnership, an estate, a trust and any other entity or organization, other than the Company or any of its Affiliates.

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