Document:

EX-10.25

Exhibit 10.25

STOCK APPRECIATION RIGHTS AGREEMENT

CARDIOVASCULAR SYSTEMS, INC.

AMENDED AND RESTATED 2007 EQUITY INCENTIVE PLAN

     THIS AGREEMENT, made effective as of this ___ day of                     , 20___, by and between
Cardiovascular Systems, Inc. a Delaware corporation (the “Company”), and                     
(“Participant”).

WITNESSETH:

     WHEREAS, Participant on the date hereof is a key employee, officer, director of or consultant
or advisor to the Company or one of its Subsidiaries; and

     WHEREAS, the Company wishes to grant a stock appreciation right to Participant to pursuant to
the Company’s Amended and Restated 2007 Equity Incentive Plan (the “Plan”); and

     WHEREAS, the Administrator of the Plan has authorized the grant of a stock appreciation right
to Participant and has determined that, as of the effective date of this Agreement, the fair market
value of the Company’s Common Stock is
$           per share;

     NOW, THEREFORE, in consideration of the premises and of the mutual covenants herein contained,
the parties hereto agree as follows:

     1. Grant of SAR. The Company hereby grants to Participant on the date set forth above
(the “Date of Grant”), stock appreciation rights (the “SAR”) with respect to an aggregate of (                    )
shares of Common Stock at an exercise price of
$           per share on the terms and
conditions set forth herein, and subject to
adjustment pursuant to Article IV of the Plan. [This SAR is granted in tandem with the
                     Option granted to Participant on                     , 20___ (the “Tandem Option”). ]

     2. Duration and Exercisability. The term during which this SAR may be exercised shall
terminate on                          , ____, except as otherwise provided in
Paragraphs 2(b) through 2(d) below. This SAR shall vest and become exercisable according to the
following schedule:

 

 

	 	 	 
	Vesting Date	 	Cumulative Percentage of Shares
	 	 	 

Once the SAR becomes exercisable to the extent of one hundred percent (100%) of the aggregate
number of shares specified in Paragraph 1, Participant may continue to exercise this SAR under the
terms and conditions of this Agreement until the termination of the SAR as provided herein. If
Participant does not exercise this SAR with respect to the full number of shares for which
Participant is then entitled to exercise this SAR, Participant may, upon any subsequent exercise
prior to this SAR’s termination, exercise this SAR for such previously unexercised portion.

          b. Termination of Relationship (Other than Disability or Death). If Participant
ceases to be [an employee] [a consultant] [a nonemployee director] of the Company or any Subsidiary
for any reason other than disability or death, this SAR shall completely terminate on the earlier
of (i) the close of business on the three-month anniversary date of such termination of employment,
and (ii) the expiration date of this SAR stated in Paragraph 2(a) above. In such period following
the termination of Participant’s employment, this SAR shall be exercisable only to the extent the
SAR was exercisable on the vesting date immediately preceding such termination of employment, but
had not previously been exercised. To the extent this SAR was not exercisable upon such
termination of employment, or if Participant does not exercise the SAR within the time specified in
this Paragraph 2(b), all rights of Participant under this SAR shall be forfeited.

          c. Disability. If Participant ceases to be [an employee] [a consultant] [a
nonemployee director] of the Company or any Subsidiary because of disability (as defined in Code
Section 22(e), or any successor provision), this SAR shall terminate on the earlier of (i) the
close of business on the twelve-month anniversary date of such termination of employment, and (ii)
the expiration date of this SAR stated in Paragraph 2(a) above. In such period following the
termination of Participant’s employment, this SAR shall be exercisable only to the extent the SAR
was exercisable on the vesting date immediately preceding such termination of employment, but had
not previously been exercised. To the extent this SAR was not exercisable upon such termination of
employment, or if Participant does not exercise the SAR within the time specified in this Paragraph
2(c), all rights of Participant under this SAR shall be forfeited.

          d. Death. In the event of Participant’s death, this SAR shall terminate on the
earlier of (i) the close of business on the twelve-month anniversary date of the date of
Participant’s

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death, and (ii) the expiration date of this SAR stated in Paragraph 2(a) above. In such period
following Participant’s death, this SAR shall be exercisable by the person or persons to whom
Participant’s rights under this SAR shall have passed by Participant’s will or by the laws of
descent and distribution only to the extent the SAR was exercisable on the vesting date immediately
preceding the date of Participant’s death, but had not previously been exercised. To the extent
this SAR was not exercisable upon the date of Participant’s death, or if such person or persons do
not exercise this SAR within the time specified in this Paragraph 2(d), all rights under this SAR
shall be forfeited.

     3. Manner of Exercise; Payment

          a. General. This SAR may be exercised only by Participant (or other proper party in
the event of death or incapacity), subject to the conditions of the Plan and subject to such other
administrative rules as the Administrator may deem advisable, by delivering written notice of
exercise to the Company at its principal office. The notice shall state the number of shares as to
which this SAR is being exercised. The exercise of this SAR shall be deemed effective upon receipt
of such notice by the Company, and the date of such receipt shall be the “date of exercise” for all
purposes under this Agreement. This SAR may be exercised with respect to any number or all of the
shares as to which it can then be exercised and, if partially exercised, may be so exercised as to
the unexercised shares any number of times during the term of this SAR as provided herein.

          b. Form of Payment. Upon the exercise of all or a portion of this SAR, Participant
shall be entitled to [a cash payment] [that number of shares of Stock calculated using such Stock’s
Fair Market Value as of the date of exercise and having an aggregate Fair Market Value] equal to
(i) the excess of (A) the per share Fair Market Value of the Company’s Common Stock as of the date
of exercise over (B) the per share exercise price specified in Paragraph 1 above, multiplied by
(ii) the number of shares specified in the Participant’s notice of exercise.

          c. Stock Transfer Records. As soon as practicable after the effective exercise of all
or any part of this SAR, Participant shall be recorded on the stock transfer books of the Company
as the owner of the shares purchased, and the Company shall deliver to Participant one or more duly
issued stock certificates evidencing such ownership. All requisite original issue or transfer
documentary stamp taxes shall be paid by the Company.

          [d. Cancellation of Tandem Option or SAR. Notwithstanding anything in this Agreement
to the contrary, the exercise of all or a portion of this SAR shall result in the cancellation of
the corresponding right to purchase a like number of shares under the Tandem Option, and the
exercise of all or a portion of the Tandem Option shall result in the cancellation of the
corresponding right to exercise this SAR for a like number of shares. The Participant may not
simultaneously exercise this SAR for a corresponding number of shares purchased through the
exercise of the Tandem Option.]

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     4. Miscellaneous.

          a. Employment or Other Relationship; Rights as Shareholder. This Agreement shall not
confer on Participant any right with respect to continuance of employment or any other relationship
by the Company or any of its Subsidiaries, nor will it interfere in any way with the right of the
Company to terminate such employment or relationship. Participant shall have no rights as a
shareholder with respect to shares subject to this SAR until such shares, if any, have been issued
to Participant. No adjustment shall be made for dividends (ordinary or extraordinary, whether in
cash, securities or other property), distributions or other rights for which the record date is
prior to the date such shares are issued, except as provided in Section 14 of the Plan.

          b. Securities Law Compliance. The exercise of all or any parts of this SAR shall only
be effective at such time as counsel to the Company shall have determined that the issuance and
delivery of Common Stock pursuant to such exercise will not violate any state or federal securities
or other laws. Participant may be required by the Company, as a condition of the effectiveness of
any exercise of this SAR, to agree in writing that all Common Stock to be acquired pursuant to such
exercise shall be held, until such time that such Common Stock is registered and freely tradable
under applicable state and federal securities laws, for Participant’s own account without a view to
any further distribution thereof, that the certificates for such shares shall bear an appropriate
legend to that effect and that such shares will be not transferred or disposed of except in
compliance with applicable state and federal securities laws.

          c. Mergers, Recapitalizations, Stock Splits, Etc. Except as otherwise specifically
provided in any employment, change of control, severance or similar agreement executed by the
Participant and the Company, pursuant and subject to Section 14 of the Plan, certain changes in the
number or character of the Common Stock of the Company (through sale, merger, consolidation,
exchange, reorganization, divestiture (including a spin-off), liquidation, recapitalization, stock
split, stock dividend or otherwise) shall result in an adjustment, reduction or enlargement, as
appropriate, in Participant’s rights with respect to any unexercised portion of this SAR
(i.e., Participant shall have such “anti-dilution” rights under this SAR with respect to
such events, but shall not have “preemptive” rights).

          d. Shares Reserved. The Company shall at all times during the term of this SAR
reserve and keep available such number of shares as will be sufficient to satisfy the requirements
of this Agreement.

          e. Withholding Taxes. In order to permit the Company to comply with all applicable
federal or state income tax laws or regulations, the Company may take such action as it deems
appropriate to insure that, if necessary, all applicable federal and state payroll, income or other
taxes are withheld from any amounts payable by the Company to Participant. If the Company is
unable to withhold such federal and state taxes, for whatever reason, Participant hereby agrees to
pay to the Company an amount equal to the amount the Company would otherwise be required to
withhold under federal or state law. Subject to such rules as the Administrator may adopt, the
Administrator may, in its sole discretion, permit Participant to satisfy such withholding tax
obligations, in whole or in part by delivering shares of Common Stock received pursuant to this SAR
having a Fair Market Value, as of the date the amount of tax

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to be withheld is determined under applicable tax law, equal to the minimum amount required to be
withheld for tax purposes. Participant’s request to deliver shares for purposes of such
withholding tax obligations shall be made on or before the date that triggers such obligations or,
if later, the date that the amount of tax to be withheld is determined under applicable tax law.
Participant’s request shall be approved by the Administrator and otherwise comply with such rules
as the Administrator may adopt to assure compliance with Rule 16b-3 or any successor provision, as
then in effect, of the General Rules and Regulations under the Securities and Exchange Act of 1934,
if applicable.

          f. Nontransferability. During the lifetime of Participant, this SAR shall be
exercisable only by Participant or by the Participant’s guardian or other legal representative, and
shall not be assignable or transferable by Participant, in whole or in part, other than by will or
by the laws of descent and distribution.

          g. 2007 Equity Incentive Plan. The SAR evidenced by this Agreement is granted
pursuant to the Plan, a copy of which Plan has been made available to Participant and is hereby
incorporated into this Agreement. This Agreement is subject to and in all respects limited and
conditioned as provided in the Plan. All defined terms of the Plan shall have the same meaning
when used in this Agreement. The Plan governs this SAR and the Participant and, in the event of
any questions as to the construction of this Agreement or in the event of a conflict between the
Plan and this Agreement, the Plan shall govern, except as the Plan otherwise provides.

          h. Lockup Period Limitation. Participant agrees that in the event the Company advises
Participant that it plans an underwritten public offering of its Common Stock in compliance with
the Securities Act of 1933, as amended, and that the underwriter(s) seek to impose restrictions
under which certain shareholders may not sell or contract to sell or grant any option to buy or
otherwise dispose of part or all of their stock purchase rights of the underlying Common Stock,
Participant hereby agrees that for a period not to exceed 180 days from the prospectus, Participant
will not sell or contract to sell or grant an option to buy or otherwise dispose of this Option or
any of the underlying shares of Common Stock without the prior written consent of the
underwriter(s) or its representative(s).

          i. Blue Sky Limitation. Notwithstanding anything in this Agreement to the contrary, in
the event the Company makes any public offering of its securities and it is determined that it is
necessary to reduce the number of issued but unexercised stock purchase rights so as to comply with
any state securities or Blue Sky law limitations with respect thereto, and such determination is
affirmed by the Board of Directors, unless the Board of Directors determines otherwise, (i) the
exercisability of this SAR and the date on which this SAR must be exercised shall be accelerated,
provided that the Company agrees to give Participant 15 days’ prior written notice of such
acceleration, and (ii) any portion of this SAR or any other option granted to Participant pursuant
to the Plan which is not exercised prior to or contemporaneously with such public offering shall be
canceled. Notice shall be deemed given when delivered personally or when deposited in the United
States mail, first class postage prepaid and addressed to Participant at the address of Participant
on file with the Company.

5

 

          j. Accounting Compliance. Participant agrees that, if a merger, reorganization,
liquidation or other “transaction” as defined in Section 14 of the Plan occurs and Participant is
an “affiliate” of the Company or any Affiliate (as defined in applicable legal and accounting
principles) at the time of such transaction, Participant will comply with all requirements of Rule
145 of the Securities Act of 1933, as amended, and the requirements of such other legal or
accounting principles, and will execute any documents necessary to ensure such compliance.

          k. Stock Legend. The Administrator may require that the certificates for any shares
of Common Stock purchased by Participant (or, in the case of death, Participant’s successors) shall
bear an appropriate legend to reflect the restrictions of Paragraph 4(b) and Paragraphs 4(g)
through 4(i) of this Agreement; provided, however, that failure to so endorse any of such
certificates shall not render invalid or inapplicable Paragraph 4(b) or Paragraphs 4(g) through
4(i).

          l. Scope of Agreement. This Agreement shall bind and inure to the benefit of the
Company and its successors and assigns and Participant and any successor or successors of
Participant permitted by Paragraph 2 or Paragraph 4(e) above.

          m. Arbitration. Any dispute arising out of or relating to this Agreement or the
alleged breach of it, or the making of this Agreement, including claims of fraud in the inducement,
shall be discussed between the disputing parties in a good faith effort to arrive at a mutual
settlement of any such controversy. If, notwithstanding, such dispute cannot be resolved, such
dispute shall be settled by binding arbitration. Judgment upon the award rendered by the
arbitrator may be entered in any court having jurisdiction thereof. The arbitrator shall be a
retired state or federal judge or an attorney who has practiced securities or business litigation
for at least 10 years. If the parties cannot agree on an arbitrator within 20 days, any party may
request that the chief judge of the District Court for Hennepin County, Minnesota, select an
arbitrator. Arbitration will be conducted pursuant to the provisions of this Agreement, and the
commercial arbitration rules of the American Arbitration Association, unless such rules are
inconsistent with the provisions of this Agreement. Limited civil discovery shall be permitted for
the production of documents and taking of depositions. Unresolved discovery disputes may be
brought to the attention of the arbitrator who may dispose of such dispute. The arbitrator shall
have the authority to award any remedy or relief that a court of this state could order or grant;
provided, however, that punitive or exemplary damages shall not be awarded. The arbitrator may
award to the prevailing party, if any, as determined by the arbitrator, all of its costs and fees,
including the arbitrator’s fees, administrative fees, travel expenses, out-of-pocket expenses and
reasonable attorneys’ fees. Unless otherwise agreed by the parties, the place of any arbitration
proceedings shall be Hennepin County, Minnesota.

          n. Right to Amend. The Company hereby reserves the right to amend this Agreement
without Participant’s consent to the extent necessary or desirable to comply with the requirements
of Code Section 409A and the regulations, notices and other guidance of general application issued
thereunder.

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     ACCORDINGLY, the parties hereto have caused this Agreement to be executed on the day and year
first above written.

	 	 	 	 	 
	 	CARDIOVASCULAR SYSTEMS, INC.

 	 
	 	By:  	
 	 
	 	 	Its:  	 	 
	 
	 
	 	Participant 	 
	 

7EX-10.1

Exhibit 10.1

FORM OF AGREEMENT REGARDING SEVERANCE ARRANGEMENTS

May  , 2009

     Re: Severance Arrangements.

Dear       :

     As we have discussed, due to recent regulatory developments adversely affecting Northfield’s
business and the company’s limited financial resources, Northfield’s board of directors has
authorized management to pursue an orderly winding up of the company’s business. Northfield is
accordingly terminating the current employment relationship of each of our executive officers. As
a result, your employment as an officer and employee of Northfield will terminate as of May 8,
2009.

     Under the terms of your [severance protection][executive employment] agreement with
Northfield, the termination of your employment will be deemed an involuntary termination without
cause. Therefore, you will be entitled to certain severance benefits under your agreement. Your
severance benefits are summarized on the attached schedule.

     Northfield has previously advised you and its other executive officers that the company’s
available cash resources are not currently sufficient to permit the immediate payment in full of
the severance benefits due to Northfield’s executive officers. We have accordingly agreed that you
will receive on the next regular scheduled payroll payment of your unused PTO plus your normal
earnings through May 8. You agree to defer receipt of the remainder of your severance payment
until such time as Northfield is able to sell or otherwise dispose of its owned manufacturing
facility in Mt. Prospect, Illinois.

     Northfield has advised you that the deferred severance payments due to you and the company’s
other executive officers totals $3,146,853, which includes payment of health insurance. You
understand that Northfield cannot guarantee that the proceeds from the sale or other disposition of
its manufacturing facility will be sufficient to permit payment in full of the deferred severance
payments due to you and Northfield’s other executive officers. You and the other executive officers
have therefore each agreed that, to the extent such sale proceeds are insufficient to pay in full
all of the deferred severance amounts, Northfield will pay each executive his or her pro rata share
of the available proceeds, determined based on the respective amounts of the deference severance
payments due to each executive officer.

     This will confirm that to the extent you are entitled to subsidized COBRA coverage under the
terms of your agreement, but such coverage is not available because of the discontinuation of
Northfield’s health insurance plan, Northfield will make a cash payment to you equal to the
employer portion of the premium for you and your covered dependents for your current coverage under
our existing health insurance plan, determined as of the time the coverage ceases. These payments
will continue for the period that you would otherwise have been entitled to subsidized COBRA
benefits under the terms of your agreement.

     Any payments and other benefits provided to you in accordance with this letter agreement will
be subject to tax withholding to the extent required by law.

 

 

     If you agree with the foregoing arrangements, please sign that enclosed counterpart of this
letter agreement and return it to the undersigned.

NORTHFIELD LABORATORIES INC.

                                                            

Agreed and accepted this May ___, 2009:

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