As filed with the Securities and Exchange Commission on June 17, 1998.
Registration No. 333- __________
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
The Spectranetics Corporation
(Exact name of Registrant as specified in its charter)
Delaware 84-0997049
(State or other jurisdiction of I.R.S. Employer Identification No.)
incorporation or organization)
96 Talamine Court
Colorado Springs, Colorado 80907
(719) 633-8333
(Address of principal executive offices and telephone number)
1997 Equity Participation Plan of The Spectranetics Corporation
Nonqualified Stock Option Agreement dated as of April 17, 1996
Nonqualified Stock Option Agreement dated as of March 3, 1997
(Full title of the plans)
James P. McCluskey Christopher L. Kaufman, Esq.
The Spectranetics Corporation Kimberly L. Wilkinson, Esq.
96 Talamine Court Latham & Watkins
Colorado Springs, Colorado 80907 505 Montgomery St., Suite 1900
(719) 633-8333 San Francisco, California 94111
(Name, address and telephone number, (415) 395-8087
including area code, of agent for (Copies of all correspondence)
service)
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
- - ---------------------------------------------------------------------------------------------------------------
Proposed
maximum
Title of securities to be registered Amount to offering Proposed maximum Amount of
be price per aggregate registration
registered(1) unit(2) offering price(2) fee
- - ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $.001 par value 3,175,000 $3.172 $10,070,100.00 $2,971.00
shares
Preferred Stock Purchase Rights(3) 3,175,000 (3) (3) (3)
Rights
- - ---------------------------------------------------------------------------------------------------------------
</TABLE>
Cover continued on next page.
<PAGE>
(1) The 1997 Equity Participation Plan of The Spectranetics Corporation (the
"Plan") authorizes the issuance of a maximum of 2,500,000 shares of Common
Stock, par value $.001 (the "Common Stock") of The Spectranetics
Corporation (the "Company") upon the exercise of options, stock
appreciation rights and other awards, all of which are being registered
hereunder. The NonQualified Stock Option Agreement dated as of April 17,
1996 (the "April Agreement") and the NonQualified Stock Option Agreement
dated as of March 3, 1997 (the "March Agreement") authorize the issuance of
100,000 shares of Common Stock and 575,000 shares of Common Stock,
respectively, all of which are being registered hereunder. Options have
been granted with respect to 1,234,500, 100,000 and 575,000 shares,
respectively of Common Stock pursuant to the Plan, the April Agreement and
the March Agreement, respectively.
(2) Estimated solely for purposes of calculating the registration fee pursuant
to Rule 457(h) of the Securities Act of 1933, as amended (the "Act"). The
Proposed Maximum Offering Price Per Share is the per share exercise price
of the options granted with respect to the 1,234,500 shares, 100,000 shares
and 575,000 shares, respectively, and the average of the high and low
prices of the Common Stock as listed on the Nasdaq National Market System
on June 11, 1998 (which were $2.969 and $2.875, respectively) with respect
to the remaining shares of Common Stock available for issuance.
(3) Rights are attached to and trade with the Common Stock of the Company. The
value attributable to such Rights, if any, is reflected in the market price
of the Common Stock.
Proposed sale to take place as soon after the effective date of the
Registration Statement as options granted under the Plan are exercised.
Page 2
<PAGE>
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
The information called for in Part I (Items 1 and 2) of Form S-8 is not
being filed with or included in this Form S-8 (by incorporation by reference or
otherwise) in accordance with the rules and regulations of the Securities and
Exchange Commission (the "Commission").
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Certain Documents by Reference
The following documents filed with the Commission are incorporated herein
by reference:
(a) Annual Report on Form 10-K for the fiscal year ended December 31,
1997;
(b) Quarterly Report on Form 10-Q for the quarter ended March 31, 1998;
(c) The description of the Company's Common Stock set forth under the
caption "Description of Registrant's Securities to be Registered"
included in its Form 8-A Registration Statement (File No. 000-19711),
which was declared effective by the Commission on December 5, 1991,
including any subsequently filed amendments and reports updating such
description; and
(d) All other reports filed pursuant to Section 13(a) or 15(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"),
since the end of the fiscal year covered by the registration document
referred to in (a) above.
In addition to the foregoing documents, all documents subsequently filed by
the Company pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Securities
Exchange Act of 1934, as amended, prior to the filing of a post-effective
amendment which indicates that all securities offered hereby have been sold or
which deregisters all securities then remaining unsold, shall be deemed to be
incorporated by reference herein and to be a part hereof from the date of the
filing of such reports and documents. Any statement contained in a document
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Registration Statement to the extent that a statement
contained herein or in any other subsequently filed document which also is or is
deemed to be incorporated by reference herein modifies or supersedes such
statement. Any such statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this Registration
Statement.
Item 4. Description of Securities.
Not applicable.
Item 5. Interests of Named Experts and Counsel.
Not applicable.
Item 6. Indemnification of Officers and Directors.
The Company's Certificate of Incorporation ("Certificate of Incorporation")
provides that to the fullest extent permitted by the Delaware General
Corporation Law ("Delaware Law") a director of the Company shall not be liable
to the Company or its shareholders for monetary damages for breach of fiduciary
duty as a director. Under current Delaware law, liability of a director may not
be limited (i) for any breach of the director's duty of loyalty to the Company
or its shareholders, (ii) for acts or omissions not in good faith or that
involve intentional misconduct or
Page 3
<PAGE>
a knowing violation of law, (iii) in respect of certain unlawful dividend
payments or stock redemptions or repurchases and (iv) for any transaction from
which the director derives an improper personal benefit. The effect of the
provision of the Company's Certificate of Incorporation is to eliminate the
rights of the Company and its shareholders (through shareholder's derivative
suits on behalf of the Company) to recover monetary damages against a director
for breach of the fiduciary duty of care as a director (including breaches
resulting from negligent or grossly negligent behavior) except in the situations
described in clauses (i) through (iv) above. This provision does not limit or
eliminate the rights of the Company or any shareholder to seek nonmonetary
relief such as an injunction or rescission in the event of a breach of a
director's duty of care. In addition, the Company's Certificate of Incorporation
and Bylaws provide that the Company shall indemnify its directors, officers,
employees and agents to the fullest extent permitted by Delaware Law.
In addition, the Company has entered into agreements (the "Indemnification
Agreements") with each of the directors of the Company pursuant to which the
Company agrees to indemnify such director from claims, liabilities, damages,
expenses, losses, costs, penalties or amounts paid in settlement incurred by
such director and arising out of his capacity as a director, officer, employee
and/or agent of the Company to the maximum extent provided by applicable law. In
addition, each director is entitled to an advance of expenses to the maximum
extent authorized or permitted by law to meet the obligations idemnified
against.
To the extent that the Board of Directors or the shareholders of the
Company may in the future wish to limit or repeal the ability of the Company to
indemnify directors and officers, such repeal or limitation may not be effective
as to directors who are currently parties to the Indemnification Agreements,
because their rights to full protection are contractually assured by the
Indemnification Agreements. It is anticipated that similar contracts may be
entered into, from time to time, with future officers and directors of the
Company.
Item 7. Exemption from Registration Claimed.
Not applicable.
Item 8. Exhibits.
4(a) The 1997 Equity Participation Plan of The Spectranetics Corporation.
4(b) NonQualified Stock Option Agreement dated as of April 17, 1996,
between the Company and Emile J. Geisenheimer.
4(c) NonQualified Stock Option Agreement dated as of March 3, 1997, between
the Company and Joseph A. Largey.
4(d) Form of NonQualified Stock Option Agreement for Officers.
4(e) Form of NonQualified Stock Option Agreement for Employees.
4(f) Form of NonQualfied Stock Option Agreement for Independent Directors.
4(g) Form of Incentive Stock Option Agreement for Officers.
4(h) Form of Incentive Stock Option Agreement for Employees.
4(i) Rights Agreement dated as of May 6, 1996, between the Company and
Norwest Bank Minnesota N.A., as Rights Agent (incorporated by
reference to Exhibit 4 filed with the Company's Current Report on Form
8-K filed on May 6, 1996).
5 Opinion of Latham & Watkins.
23(a) Consent of KPMG Peat Marwick LLP.
23(b) Consent of Latham & Watkins (included in Exhibit 5).
Item 9. Undertakings.
Page 4
<PAGE>
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement: (i) to include any
prospectus required by Section 10(a)(3) of the Act unless the information
required to be included in a post-effective amendment is contained in a periodic
report filed by the Registration pursuant to Section 13 or Section 15(d) of the
Exchange Act which is incorporated by reference in this Registration Statement;
(ii) to reflect in the prospectus any facts or events arising after the
effective date of this Registration Statement (or the most recent post-effective
amendment to this Registration Statement) which, individually or in the
aggregate, represent a fundamental change in the information set forth in this
Registration Statement unless the information required to be included in a
post-effective amendment is contained in a periodic report filed by the
Registrant pursuant to Section 13 or Section 15(d) of the Exchange Act which is
incorporated by reference in this Registration Statement; and (iii) to include
any material information with respect to the plan of distribution not previously
disclosed in this Registration Statement or any material change to such
information in this Registration Statement.
Provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the Company pursuant to
Section 13 or Section 15(d) of the Exchange Act which is incorporated by
reference in this Registration Statement.
(2) That, for the purpose of determining any liability under the Act, each
such post-effective amendment shall be deemed to be a new registration statement
relating to the securites offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.
Page 5
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Colorado Springs, State of Colorado, on the 17th day
of June, 1998.
THE SPECTRANETICS CORPORATION
By: /s/ Joseph A. Largey
------------------------------
Joseph A. Largey, President and
Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons in the
capacities and on the date indicated.
<TABLE>
<CAPTION>
Signature Title Date
<S> <C> <C>
/s/ Joseph A. Largey President and Chief June 17, 1998
- - -----------------------------------------
Joseph A. Largey Executive Officer, Director
(Principal Executive Officer)
/s/ James P. McCluskey Vice President, Finance June 17, 1998
- - -----------------------------------------
James P. McCluskey (Principal Financial and
Accounting Officer)
/s/ Emile J. Geisenheimer Director and Chairman of June 17, 1998
- - -----------------------------------------
Emile J. Geisenheimer the Board of Directors
Director
- - -----------------------------------------
Cornelius C. Bond, Jr.
/s/ Gary R. Bang Director June 17, 1998
- - -----------------------------------------
Gary R. Bang
/s/ James A. Lent Director June 17, 1998
- - -----------------------------------------
James A. Lent
/s/ Joseph A Ruggio, M.D. Director June 17, 1998
- - -----------------------------------------
Joseph A. Ruggio, M.D.
/s/ John G. Schulte Director June 17, 1998
- - -----------------------------------------
John G. Schulte
</TABLE>
Page 6
<PAGE>
EXHIBIT INDEX
4(a) The 1997 Equity Participation Plan of The Spectranetics Corporation.
4(b) NonQualified Stock Option Agreement dated as of April 17, 1996,
between the Company and Emile J. Geisenheimer.
4(c) NonQualified Stock Option Agreement dated as of March 3, 1997,
between the Company and Joseph A. Largey.
4(d) Form of NonQualified Stock Option Agreement for Officers.
4(e) Form of NonQualified Stock Option Agreement for Employees.
4(f) Form of NonQualfied Stock Option Agreement for Independent
Directors.
4(g) Form of Incentive Stock Option Agreement for Officers.
4(h) Form of Incentive Stock Option Agreement for Employees.
4(i) Rights Agreement dated as of May 6, 1996, between the Company and
Norwest Bank Minnesota N.A., as Rights Agent (incorporated by
reference to Exhibit 4 filed with the Company's Current Report on
Form 8-K filed on May 6, 1996).
5 Opinion of Latham & Watkins.
23(a) Consent of KPMG Peat Marwick LLP.
23(b) Consent of Latham & Watkins (included in Exhibit 5).
Page 7
Exhibit 4(a)
<PAGE>
THE 1997 EQUITY PARTICIPATION PLAN
OF
THE SPECTRANETICS CORPORATION
The Spectranetics Corporation, a Delaware corporation, has adopted The 1997
Equity Participation Plan of The Spectranetics Corporation (the "Plan"),
effective June 9, 1997, for the benefit of its eligible employees, consultants
and directors. The Plan consists of two plans, one for the benefit of Employees
(as such term is defined below) and consultants and one for the benefit of
Independent Directors (as such term is defined below).
The purposes of this Plan are as follows:
(1) To provide an additional incentive for directors, Employees and
consultants to further the growth, development and financial success of the
Company by personally benefiting through the ownership of Company stock and/or
rights which recognize such growth, development and financial success.
(2) To enable the Company to obtain and retain the services of directors,
Employees and consultants considered essential to the long range success of the
Company by offering them an opportunity to own stock in the Company and/or
rights which will reflect the growth, development and financial success of the
Company.
ARTICLE I.
DEFINITIONS
1.1. General. Wherever the following terms are used in this Plan they shall
have the meanings specified below, unless the context clearly indicates
otherwise.
1.2. Board. "Board" shall mean the Board of Directors of the Company.
1.3. Change in Control. "Change in Control" shall mean a change in
ownership or control of the Company effected through either of the following
transactions:
(a) any person or related group of persons (other than the Company or a
person that directly or indirectly controls, is controlled by, or is under
common control with, the Company) directly or indirectly acquires beneficial
ownership (within the meaning of Rule 13d-3 under the Exchange Act) of
securities possessing more than fifty percent (50%) of the total combined voting
power of the Company's outstanding securities pursuant to a tender or exchange
offer made directly to the Company's stockholders which the Board does not
recommend such stockholders to accept; or
<PAGE>
(b) there is a change in the composition of the Board over a period of
thirty-six (36) consecutive months (or less) such that a majority of the Board
members (rounded up to the nearest whole number) ceases, by reason of one or
more proxy contests for the election of Board members, to be comprised of
individuals who either (i) have been Board members continuously since the
beginning of such period or (ii) have been elected or nominated for election as
Board members during such period by at least a majority of the Board members
described in clause (i) who were still in office at the time such election or
nomination was approved by the Board.
1.4. Code. "Code" shall mean the Internal Revenue Code of 1986, as amended.
1.5. Committee. "Committee" shall mean the Compensation Committee of the
Board, or another committee of the Board, appointed as provided in Section 8.1.
1.6. Common Stock. "Common Stock" shall mean the common stock of the
Company, par value $.001 per share, and any equity security of the Company
issued or authorized to be issued in the future, but excluding any preferred
stock and any warrants, options or other rights to purchase Common Stock. Debt
securities of the Company convertible into Common Stock shall be deemed equity
securities of the Company.
1.7. Company. "Company" shall mean The Spectranetics Corporation, a
Delaware corporation.
1.8. Corporate Transaction. "Corporate Transaction" shall mean any of the
following stockholder-approved transactions to which the Company is a party:
(a) a merger or consolidation in which the Company is not the surviving
entity, except for a transaction the principal purpose of which is to change the
State in which the Company is incorporated, form a holding company or effect a
similar reorganization as to form whereupon this Plan and all Options are
assumed by the successor entity;
(b) the sale, transfer, exchange or other disposition of all or
substantially all of the assets of the Company, in complete liquidation or
dissolution of the Company in a transaction not covered by the exceptions to
clause (a), above; or
(c) any reverse merger in which the Company is the surviving entity but in
which securities possessing more than fifty percent (50%) of the total combined
voting power of the Company's outstanding securities are transferred or issued
to a person or persons different from those who held such securities immediately
prior to such merger.
1.9. Director. "Director" shall mean a member of the Board.
1.10. Employee. "Employee" shall mean any officer or other employee (as
defined in accordance with Section 3401(c) of the Code) of the Company, or of
any corporation which is a Subsidiary.
1.11. Exchange Act. "Exchange Act" shall mean the Securities Exchange Act
of 1934, as amended.
1.12. Fair Market Value. "Fair Market Value" of a share of Common Stock as
of a given date shall be (i) the closing price of a share of Common Stock on the
principal exchange on
2
<PAGE>
which shares of Common Stock are then trading, if any (or as reported on any
composite index which includes such principal exchange), on the trading day
previous to such date, or if shares were not traded on the trading day previous
to such date, then on the next preceding date on which a trade occurred, or (ii)
if Common Stock is not traded on an exchange but is quoted on NASDAQ or a
successor quotation system, the closing price for the Common Stock on such date
as reported by NASDAQ or such successor quotation system; or (iii) if Common
Stock is not publicly traded on an exchange and not quoted on NASDAQ or a
successor quotation system, the Fair Market Value of a share of Common Stock as
established by the Committee (or the Board, in the case of Options granted to
Independent Directors) acting in good faith.
1.13. Grantee. "Grantee" shall mean an Employee or consultant granted a
Stock Appreciation Right under this Plan.
1.14. Incentive Stock Option. "Incentive Stock Option" shall mean an option
which conforms to the applicable provisions of Section 422 of the Code and which
is designated as an Incentive Stock Option by the Committee.
1.15. Independent Director. "Independent Director" shall mean a member of
the Board who is not an Employee of the Company.
1.16. Non-Qualified Stock Option. "Non-Qualified Stock Option" shall mean
an Option which is not designated as an Incentive Stock Option by the Committee.
1.17. Option. "Option" shall mean a stock option granted under Article III
of this Plan. An Option granted under this Plan shall, as determined by the
Committee, be either a Non-Qualified Stock Option or an Incentive Stock Option;
provided, however, that Options granted to Independent Directors and consultants
shall be Non-Qualified Stock Options.
1.18. Optionee. "Optionee" shall mean an Employee, consultant or
Independent Director granted an Option under this Plan.
1.19. Plan. "Plan" shall mean The 1997 Equity Participation Plan of The
Spectranetics Corporation.
1.20. QDRO. "QDRO" shall mean a qualified domestic relations order as
defined by the Code or Title I of the Employee Retirement Income Security Act of
1974, as amended, or the rules thereunder.
1.21. Restricted Stock. "Restricted Stock" shall mean Common Stock awarded
under Article VI of this Plan.
1.22. Restricted Stockholder. "Restricted Stockholder" shall mean an
Employee or consultant granted an award of Restricted Stock under Article VI of
this Plan.
1.23. Rule 16b-3. "Rule 16b-3" shall mean that certain Rule 16b-3 under the
Exchange Act, as such Rule may be amended from time to time.
1.24. Section 162(m) Participant. "Section 162(m) Participant" shall mean
any Employee designated by the Committee as a Employee whose compensation for
the fiscal year in which the Employee is so designated or a future fiscal year
may be subject to the limit on deductible compensation imposed by Section 162(m)
of the Code.
3
<PAGE>
1.25. Stock Appreciation Right. "Stock Appreciation Right" shall mean a
stock appreciation right granted under Article VII of this Plan.
1.26. Subsidiary. "Subsidiary" shall mean any corporation in an unbroken
chain of corporations beginning with the Company if each of the corporations
other than the last corporation in the unbroken chain then owns stock possessing
50 percent or more of the total combined voting power of all classes of stock in
one of the other corporations in such chain.
1.27. Termination of Consultancy. "Termination of Consultancy" shall mean
the time when the engagement of an Optionee, Grantee or Restricted Stockholder
as a consultant to the Company or a Subsidiary is terminated for any reason,
with or without cause, including, but not by way of limitation, by resignation,
discharge, death or retirement; but excluding terminations where there is a
simultaneous commencement of employment with the Company or any Subsidiary. The
Committee, in its absolute discretion, shall determine the effect of all matters
and questions relating to Termination of Consultancy, including, but not by way
of limitation, the question of whether a Termination of Consultancy resulted
from a discharge for good cause, and all questions of whether particular leaves
of absence constitute Terminations of Consultancy. Notwithstanding any other
provision of this Plan, the Company or any Subsidiary has an absolute and
unrestricted right to terminate a consultant's service at any time for any
reason whatsoever, with or without cause, except to the extent expressly
provided otherwise in writing.
1.28. Termination of Directorship. "Termination of Directorship" shall mean
the time when an Optionee who is an Independent Director ceases to be a Director
for any reason, including, but not by way of limitation, a termination by
resignation, failure to be elected, death or retirement. The Board, in its sole
and absolute discretion, shall determine the effect of all matters and questions
relating to Termination of Directorship with respect to Independent Directors.
1.29. Termination of Employment. "Termination of Employment" shall mean the
time when the employee-employer relationship between an Optionee, Grantee or
Restricted Stockholder and the Company or any Subsidiary is terminated for any
reason, with or without cause, including, but not by way of limitation, a
termination by resignation, discharge, death, disability or retirement; but
excluding (i) terminations where there is a simultaneous reemployment or
continuing employment of an Optionee, Grantee or Restricted Stockholder by the
Company or any Subsidiary, (ii) at the discretion of the Committee, terminations
which result in a temporary severance of the employee-employer relationship, and
(iii) at the discretion of the Committee, terminations which are followed by the
simultaneous establishment of a consulting relationship by the Company or a
Subsidiary with the former employee. The Committee, in its absolute discretion,
shall determine the effect of all matters and questions relating to Termination
of Employment, including, but not by way of limitation, the question of whether
a Termination of Employment resulted from a discharge for good cause, and all
questions of whether particular leaves of absence constitute Terminations of
Employment; provided, however, that, unless otherwise determined by the
Committee in its discretion, a leave of absence, change in status from an
employee to an independent contractor or other change in the employee-employer
relationship shall constitute a Termination of Employment if, and to the extent
that, such leave of absence, change in status or other change interrupts
employment for the purposes of Section 422(a)(2) of the Code and the then
applicable regulations and revenue rulings under said Section. Notwithstanding
any other provision of this Plan, the Company or any Subsidiary has an absolute
and unrestricted right to terminate an Employee's employment at any time for any
reason whatsoever, with or without cause, except to the extent expressly
provided otherwise in writing.
4
<PAGE>
ARTICLE II.
SHARES SUBJECT TO PLAN
2.1. Shares Subject to Plan. The shares of stock subject to Options, awards
of Restricted Stock or Stock Appreciation Rights shall be Common Stock,
initially shares of the Company's Common Stock, par value $.001 per share. The
aggregate number of such shares which may be issued upon exercise of such
options or rights or upon any such awards under the Plan shall not exceed Two
Million Five Hundred (2,500,000). The shares of Common Stock issuable upon
exercise of such options or rights or upon any such awards may be either
previously authorized but unissued shares or treasury shares.
2.2. Add-back of Options and Other Rights. If any Option, or other right to
acquire shares of Common Stock under any other award under this Plan, expires or
is canceled without having been fully exercised, or is exercised in whole or in
part for cash rather than Common Stock as permitted by this Plan, the number of
shares subject to such Option or other right but as to which such Option or
other right was not exercised prior to its expiration, cancellation or exercise
for cash may again be optioned, granted or awarded hereunder, subject to the
limitations of Section 2.1. Furthermore, any shares subject to Options or other
awards which are adjusted pursuant to Section 9.3 and become exercisable with
respect to shares of stock of another corporation shall be considered canceled
and may again be optioned, granted or awarded hereunder, subject to the
limitations of Section 2.1. Shares of Common Stock which are delivered by the
Optionee or Grantee or withheld by the Company upon the exercise of any Option
or other award under this Plan, in payment of the exercise price thereof, may
again be optioned, granted or awarded hereunder, subject to the limitations of
Section 2.1. If any share of Restricted Stock is forfeited by the Grantee or
repurchased by the Company pursuant to Section 6.6 hereof, such share may again
be optioned, granted or awarded hereunder, subject to the limitations of Section
2.1. Notwithstanding the provisions of this Section 2.2, no shares of Common
Stock may again be optioned, granted or awarded if such action would cause an
Incentive Stock Option to fail to qualify as an incentive stock option under
Section 422 of the Code.
ARTICLE III.
GRANTING OF OPTIONS
3.1. Eligibility. Any Employee or consultant selected by the Committee
pursuant to Section 3.4(a)(i) shall be eligible to be granted an Option. Each
Independent Director of the Company shall be eligible to be granted Options at
the times and in the manner set forth in Sections 3.4(d) and (e).
3.2. Disqualification for Stock Ownership. No person may be granted an
Incentive Stock Option under this Plan if such person, at the time the Incentive
Stock Option is granted, owns stock possessing more than ten percent (10%) of
the total combined voting power of all classes of stock of the Company or any
then existing Subsidiary or parent corporation (within the meaning of Section
422 of the Code) unless such Incentive Stock Option conforms to the applicable
provisions of Section 422 of the Code.
3.3. Qualification of Incentive Stock Options. No Incentive Stock Option
shall be granted to any person who is not an Employee.
3.4. Granting of Options
5
<PAGE>
(a) The Committee shall from time to time, in its absolute discretion, and
subject to applicable limitations of this Plan:
(i) Determine which Employees or consultants (including Employees or
consultants who have previously received Options or other awards under this
Plan) in its opinion should be granted Options;
(ii) Determine the number of shares to be subject to such Options
granted to the selected Employees or consultants;
(iii) Subject to Section 3.3, determine whether such Options are to be
Incentive Stock Options or Non-Qualified Stock Options and whether such
Options are to qualify as performance-based compensation as described in
Section 162(m)(4)(C) of the Code; and
(iv) Determine the terms and conditions of such Options, consistent
with this Plan; provided, however, that the terms and conditions of Options
intended to qualify as performance-based compensation as described in
Section 162(m)(4)(C) of the Code shall include, but not be limited to, such
terms and conditions as may be necessary to meet the applicable provisions
of Section 162(m) of the Code.
(b) Upon the selection of a Employee or consultant to be granted an Option,
the Committee shall instruct the Secretary of the Company to issue the Option
and may impose such conditions on the grant of the Option as it deems
appropriate. Without limiting the generality of the preceding sentence, the
Committee may, in its discretion and on such terms as it deems appropriate,
require as a condition on the grant of an Option to an Employee or consultant
that the Employee or consultant surrender for cancellation some or all of the
unexercised Options, awards of Restricted Stock, Stock Appreciation Rights or
other rights which have been previously granted to him under this Plan or
otherwise. An Option, the grant of which is conditioned upon such surrender, may
have an option price lower (or higher) than the exercise price of such
surrendered Option or other award, may cover the same (or a lesser or greater)
number of shares as such surrendered Option or other award, may contain such
other terms as the Committee deems appropriate, and shall be exercisable in
accordance with its terms, without regard to the number of shares, price,
exercise period or any other term or condition of such surrendered Option or
other award.
(c) Any Incentive Stock Option granted under this Plan may be modified by
the Committee to disqualify such option from treatment as an "incentive stock
option" under Section 422 of the Code.
(d) Each person who becomes an Independent Director shall be granted on the
date of his election or appointment as an Independent Director an Option to
purchase 75,000 shares of Common Stock.
(e) Each Independent Director who has (i) received a grant pursuant to
Section 3.4(d) or pursuant to the Company's Stock Option Plan For Outside
Directors which was adopted by the Board on April 19, 1995 and (ii) served at
least three years as an Independent Director shall be granted on the third
anniversary of the date of such grant, and each third anniversary thereafter (so
long as he is an Independent Director at the close of business on such date), an
Option to purchase an additional 75,000 shares of Common Stock.
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ARTICLE IV.
TERMS OF OPTIONS
4.1. Option Agreement. Each Option shall be evidenced by a written Stock
Option Agreement, which shall be executed by the Optionee and an authorized
officer of the Company and which shall contain such terms and conditions as the
Committee (or the Board, in the case of Options granted to Independent
Directors) shall determine, consistent with this Plan. Stock Option Agreements
evidencing Options intended to qualify as performance-based compensation as
described in Section 162(m)(4)(C) of the Code shall contain such terms and
conditions as may be necessary to meet the applicable provisions of Section
162(m) of the Code. Stock Option Agreements evidencing Incentive Stock Options
shall contain such terms and conditions as may be necessary to meet the
applicable provisions of Section 422 of the Code.
4.2. Option Price. The price per share of the shares subject to each Option
shall be set by the Committee; provided, however, that such price shall be no
less than the par value of a share of Common Stock, unless otherwise permitted
by applicable state law, and (i) in the case of Incentive Stock Options and
Options intended to qualify as performance-based compensation as described in
Section 162(m)(4)(C) of the Code, such price shall not be less than 100% of the
Fair Market Value of a share of Common Stock on the date the Option is granted;
(ii) in the case of Incentive Stock Options granted to an individual then owning
(within the meaning of Section 424(d) of the Code) more than 10% of the total
combined voting power of all classes of stock of the Company or any Subsidiary
or parent corporation thereof (within the meaning of Section 422 of the Code)
such price shall not be less than 110% of the Fair Market Value of a share of
Common Stock on the date the Option is granted; and (iii) in the case of Options
granted to Independent Directors, such price shall equal 100% of the Fair Market
Value of a share of Common Stock on the date the Option is granted.
4.3. Option Term. The term of an Option shall be set by the Committee in
its discretion; provided, however, that, (i) in the case of Options granted to
Independent Directors, the term shall be ten (10) years from the date the Option
is granted, without variation or acceleration hereunder except as provided in
Sections 4.4 and 9.3 and subject to Section 5.6, and (ii) in the case of
Incentive Stock Options, the term shall not be more than ten (10) years from the
date the Incentive Stock Option is granted, or five (5) years from such date if
the Incentive Stock Option is granted to an individual then owning (within the
meaning of Section 424(d) of the Code) more than 10% of the total combined
voting power of all classes of stock of the Company or any Subsidiary or parent
corporation thereof (within the meaning of Section 422 of the Code). Except as
limited by requirements of Section 422 of the Code and regulations and rulings
thereunder applicable to Incentive Stock Options, the Committee may extend the
term of any outstanding Option in connection with any Termination of Employment
or Termination of Consultancy of the Optionee, or amend any other term or
condition of such Option relating to such a termination.
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4.4. Option Vesting
(a) The period during which the right to exercise an Option in whole or in
part vests in the Optionee shall be set by the Committee and the Committee may
determine that an Option may not be exercised in whole or in part for a
specified period after it is granted; provided, however, that, unless the
Committee otherwise provides in the terms of the Option or otherwise, no Option
shall be exercisable by any Optionee who is then subject to Section 16 of the
Exchange Act within the period ending six months and one day after the date the
Option is granted; and provided, further, that Options granted to Independent
Directors shall become exercisable on the following schedule: Beginning on the
first anniversary of the date of grant, up to 33% of the shares covered by the
Option; beginning on the second anniversary of the date of grant, up to 66% of
such shares; and beginning on the third anniversary of the date of grant, up to
100% of such shares, without variation or acceleration hereunder except as
provided in this Section 4.4 and Section 9.3. Notwithstanding the foregoing, an
Option held by an Independent Director shall become immediately exercisable in
full upon the death or disability of such Independent Director or upon an
unsuccessful attempt by such Independent Director to win re-election to the
Board after nomination for election at the recommendation of the Board. At any
time after grant of an Option, the Committee may, in its sole and absolute
discretion and subject to whatever terms and conditions it selects, accelerate
the period during which an Option vests.
(b) No portion of an Option which is unexercisable at Termination of
Employment or Termination of Consultancy, as applicable, shall thereafter become
exercisable, except as may be otherwise provided by the Committee in the case of
Options granted to Employees or consultants either in the Stock Option Agreement
or by action of the Committee following the grant of the Option.
(c) To the extent that the aggregate Fair Market Value of stock with
respect to which "incentive stock options" (within the meaning of Section 422 of
the Code, but without regard to Section 422(d) of the Code) are exercisable for
the first time by an Optionee during any calendar year (under the Plan and all
other incentive stock option plans of the Company and any Subsidiary) exceeds
$100,000, such Options shall be treated as Non-Qualified Options to the extent
required by Section 422 of the Code. The rule set forth in the preceding
sentence shall be applied by taking Options into account in the order in which
they were granted. For purposes of this Section 4.4(c), the Fair Market Value of
stock shall be determined as of the time the Option with respect to such stock
is granted.
4.5. Consideration. In consideration of the granting of an Option, the
Optionee shall agree, in the written Stock Option Agreement, to remain in the
employ of (or to consult for or to serve as an Independent Director of, as
applicable) the Company or any Subsidiary for a period of at least one year (or
such shorter period as may be fixed in the Stock Option Agreement or by action
of the Committee following grant of the Option) after the Option is granted (or,
in the case of an Independent Director, until the next annual meeting of
stockholders of the Company). Nothing in this Plan or in any Stock Option
Agreement hereunder shall confer upon any Optionee any right to continue in the
employ of, or as a consultant for, the Company or any Subsidiary, or as a
director of the Company, or shall interfere with or restrict in any way the
rights of the Company and any Subsidiary, which are hereby expressly reserved,
to discharge any Optionee at any time for any reason whatsoever, with or without
good cause.
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ARTICLE V.
EXERCISE OF OPTIONS
5.1. Partial Exercise. An exercisable Option may be exercised in whole or
in part. However, an Option shall not be exercisable with respect to fractional
shares and the Committee (or the Board, in the case of Options granted to
Independent Directors) may require that, by the terms of the Option, a partial
exercise be with respect to a minimum number of shares.
5.2. Manner of Exercise. All or a portion of an exercisable Option shall be
deemed exercised upon delivery of all of the following to the Secretary of the
Company or his office:
(a) A written notice complying with the applicable rules established by the
Committee (or the Board, in the case of Options granted to Independent
Directors) stating that the Option, or a portion thereof, is exercised. The
notice shall be signed by the Optionee or other person then entitled to exercise
the Option or such portion;
(b) Such representations and documents as the Committee (or the Board, in
the case of Options granted to Independent Directors), in its absolute
discretion, deems necessary or advisable to effect compliance with all
applicable provisions of the Securities Act of 1933, as amended, and any other
federal or state securities laws or regulations. The Committee or Board may, in
its absolute discretion, also take whatever additional actions it deems
appropriate to effect such compliance including, without limitation, placing
legends on share certificates and issuing stop-transfer notices to agents and
registrars;
(c) In the event that the Option shall be exercised pursuant to Section 9.1
by any person or persons other than the Optionee, appropriate proof of the right
of such person or persons to exercise the Option; and
(d) Full cash payment to the Secretary of the Company for the shares with
respect to which the Option, or portion thereof, is exercised. However, the
Committee (or the Board, in the case of Options granted to Independent
Directors), may in its discretion (i) allow a delay in payment up to thirty (30)
days from the date the Option, or portion thereof, is exercised; (ii) allow
payment, in whole or in part, through the delivery of shares of Common Stock
owned by the Optionee, duly endorsed for transfer to the Company with a Fair
Market Value on the date of delivery equal to the aggregate exercise price of
the Option or exercised portion thereof; (iii) allow payment, in whole or in
part, through the surrender of shares of Common Stock then issuable upon
exercise of the Option having a Fair Market Value on the date of Option exercise
equal to the aggregate exercise price of the Option or exercised portion
thereof; (iv) allow payment, in whole or in part, through the delivery of
property of any kind which constitutes good and valuable consideration; (v)
allow payment, in whole or in part, through the delivery of a full recourse
promissory note bearing interest (at no less than such rate as shall then
preclude the imputation of interest under the Code) and payable upon such terms
as may be prescribed by the Committee or the Board; (vi) allow payment, in whole
or in part, through the delivery of a notice that the Optionee has placed a
market sell order with a broker with respect to shares of Common Stock then
issuable upon exercise of the Option, and that the broker has been directed to
pay a sufficient portion of the net proceeds of the sale to the Company in
satisfaction of the Option exercise price; or (vii) allow payment through any
combination of the consideration provided in the foregoing subparagraphs (ii),
(iii), (iv), (v) and (vi). In the case of a promissory note, the Committee (or
the Board, in the case of Options granted to Independent Directors) may also
prescribe the form of
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such note and the security to be given for such note. The Option may not be
exercised, however, by delivery of a promissory note or by a loan from the
Company when or where such loan or other extension of credit is prohibited by
law.
5.3. Conditions to Issuance of Stock Certificates. The Company shall not be
required to issue or deliver any certificate or certificates for shares of stock
purchased upon the exercise of any Option or portion thereof prior to
fulfillment of all of the following conditions:
(a) The admission of such shares to listing on all stock exchanges on which
such class of stock is then listed;
(b) The completion of any registration or other qualification of such
shares under any state or federal law, or under the rulings or regulations of
the Securities and Exchange Commission or any other governmental regulatory body
which the Committee or Board shall, in its absolute discretion, deem necessary
or advisable;
(c) The obtaining of any approval or other clearance from any state or
federal governmental agency which the Committee (or Board, in the case of
Options granted to Independent Directors) shall, in its absolute discretion,
determine to be necessary or advisable;
(d) The lapse of such reasonable period of time following the exercise of
the Option as the Committee (or Board, in the case of Options granted to
Independent Directors) may establish from time to time for reasons of
administrative convenience; and
(e) The receipt by the Company of full payment for such shares, including
payment of any applicable withholding tax.
5.4. Rights as Stockholders. The holders of Options shall not be, nor have
any of the rights or privileges of, stockholders of the Company in respect of
any shares purchasable upon the exercise of any part of an Option unless and
until certificates representing such shares have been issued by the Company to
such holders.
5.5. Ownership and Transfer Restrictions. The Committee (or Board, in the
case of Options granted to Independent Directors), in its absolute discretion,
may impose such restrictions on the ownership and transferability of the shares
purchasable upon the exercise of an Option as it deems appropriate. Any such
restriction shall be set forth in the respective Stock Option Agreement and may
be referred to on the certificates evidencing such shares. The Committee may
require the Employee to give the Company prompt notice of any disposition of
shares of Common Stock acquired by exercise of an Incentive Stock Option within
(i) two years from the date of granting such Option to such Employee or (ii) one
year after the transfer of such shares to such Employee. The Committee may
direct that the certificates evidencing shares acquired by exercise of an Option
refer to such requirement to give prompt notice of disposition.
5.6. Limitations on Exercise of Options Granted to Independent Directors.
No Option granted to an Independent Director may be exercised to any extent by
anyone after the first to occur of the following events:
(a) The expiration of three (3) years from the date of the Optionee's
death;
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(b) the expiration of three (3) years from the date of the Optionee's
Termination of Directorship by reason of his permanent and total disability
(within the meaning of Section 22(e)(3) of the Code);
(c) the expiration of three (3) years from the date of the Optionee's
retirement from the Board or an unsuccessful attempt to win re-election to the
Board after nomination for election at the recommendation of the Board;
(d) the expiration of twelve (12) months from the date of the Optionee's
Termination of Directorship for any reason other than such Optionee's death, his
permanent and total disability, retirement from the Board or an unsuccessful
attempt to win re-election to the Board after nomination for election at the
recommendation of the Board; or
(e) The expiration of ten (10) years from the date the Option was granted.
ARTICLE VI.
AWARD OF RESTRICTED STOCK
6.1. Award of Restricted Stock.
(a) The Committee may from time to time, in its absolute discretion:
(b) Select from among the Employees or consultants (including Employees or
consultants who have previously received other awards under this Plan) such of
them as in its opinion should be awarded Restricted Stock; and
(c) Determine the purchase price, if any, and other terms and conditions
applicable to such Restricted Stock, consistent with this Plan.
(d) The Committee shall establish the purchase price, if any, and form of
payment for Restricted Stock; provided, however, that such purchase price shall
be no less than the par value of the Common Stock to be purchased, unless
otherwise permitted by applicable state law. In all cases, legal consideration
shall be required for each issuance of Restricted Stock.
(e) Upon the selection of a Employee or consultant to be awarded Restricted
Stock, the Committee shall instruct the Secretary of the Company to issue such
Restricted Stock and may impose such conditions on the issuance of such
Restricted Stock as it deems appropriate.
6.2. Restricted Stock Agreement. Restricted Stock shall be issued only
pursuant to a written Restricted Stock Agreement, which shall be executed by the
selected Employee or consultant and an authorized officer of the Company and
which shall contain such terms and conditions as the Committee shall determine,
consistent with this Plan.
6.3. Consideration. As consideration for the issuance of Restricted Stock,
in addition to payment of any purchase price, the Restricted Stockholder shall
agree, in the written Restricted Stock Agreement, to remain in the employ of, or
to consult for, the Company or any Subsidiary for a period of at least one year
after the Restricted Stock is issued (or such shorter period as may be fixed in
the Restricted Stock Agreement or by action of the Committee following grant of
the Restricted Stock). Nothing in this Plan or in any Restricted Stock Agreement
hereunder shall confer on any Restricted Stockholder any right to continue in
the employ of, or as a consultant for, the Company or any Subsidiary
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or shall interfere with or restrict in any way the rights of the Company and any
Subsidiary, which are hereby expressly reserved, to discharge any Restricted
Stockholder at any time for any reason whatsoever, with or without good cause.
6.4. Rights as Stockholders. Upon delivery of the shares of Restricted
Stock to the escrow holder pursuant to Section 6.7, the Restricted Stockholder
shall have, unless otherwise provided by the Committee, all the rights of a
stockholder with respect to said shares, subject to the restrictions in his
Restricted Stock Agreement, including the right to receive all dividends and
other distributions paid or made with respect to the shares; provided, however,
that in the discretion of the Committee, any extraordinary distributions with
respect to the Common Stock shall be subject to the restrictions set forth in
Section 6.5.
6.5. Restrictions. All shares of Restricted Stock issued under this Plan
(including any shares received by holders thereof with respect to shares of
Restricted Stock as a result of stock dividends, stock splits or any other form
of recapitalization) shall, in the terms of each individual Restricted Stock
Agreement, be subject to such restrictions as the Committee shall provide, which
restrictions may include, without limitation, restrictions concerning voting
rights and transferability and restrictions based on duration of employment with
the Company, Company performance and individual performance; provided, however,
that, unless the Committee otherwise provides in the terms of the Restricted
Stock Agreement or otherwise, no share of Restricted Stock granted to a person
subject to Section 16 of the Exchange Act shall be sold, assigned or otherwise
transferred until at least six months and one day have elapsed from the date on
which the Restricted Stock was issued, and provided, further, that by action
taken after the Restricted Stock is issued, the Committee may, on such terms and
conditions as it may determine to be appropriate, remove any or all of the
restrictions imposed by the terms of the Restricted Stock Agreement. Restricted
Stock may not be sold or encumbered until all restrictions are terminated or
expire. Unless provided otherwise by the Committee, if no consideration was paid
by the Restricted Stockholder upon issuance, a Restricted Stockholder's rights
in unvested Restricted Stock shall lapse upon Termination of Employment or, if
applicable, upon Termination of Consultancy with the Company.
6.6. Repurchase of Restricted Stock. The Committee shall provide in the
terms of each individual Restricted Stock Agreement that the Company shall have
the right to repurchase from the Restricted Stockholder the Restricted Stock
then subject to restrictions under the Restricted Stock Agreement immediately
upon a Termination of Employment or, if applicable, upon a Termination of
Consultancy between the Restricted Stockholder and the Company, at a cash price
per share equal to the price paid by the Restricted Stockholder for such
Restricted Stock; provided, however, that provision may be made that no such
right of repurchase shall exist in the event of a Termination of Employment or
Termination of Consultancy without cause, or following a change in control of
the Company or because of the Restricted Stockholder's retirement, death or
disability, or otherwise.
6.7. Escrow. The Secretary of the Company or such other escrow holder as
the Committee may appoint shall retain physical custody of each certificate
representing Restricted Stock until all of the restrictions imposed under the
Restricted Stock Agreement with respect to the shares evidenced by such
certificate expire or shall have been removed.
6.8. Legend. In order to enforce the restrictions imposed upon shares of
Restricted Stock hereunder, the Committee shall cause a legend or legends to be
placed on certificates representing all shares of Restricted Stock that are
still subject to restrictions under Restricted Stock Agreements, which legend or
legends shall make appropriate reference to the conditions imposed thereby.
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6.9. Provisions Applicable to Section 162(m) Participants.
(a) Notwithstanding anything in the Plan to the contrary, the Committee may
grant Restricted Stock awards to a Section 162(m) Participant that vest upon the
attainment of performance targets for the Company which are related to one or
more of the following performance goals: (i) pre-tax income, (ii) operating
income, (iii) cash flow, (iv) earnings per share, (v) return on equity, (vi)
return on invested capital or assets and (vii) cost reductions or savings.
(b) To the extent necessary to comply with the performance-based
compensation requirements of Section 162(m)(4)(C) of the Code, with respect to
Restricted Stock which may be granted to one or more Section 162(m)
Participants, no later than ninety (90) days following the commencement of any
fiscal year in question or any other designated fiscal period (or such other
time as may be required or permitted by Section 162(m) of the Code), the
Committee shall, in writing, (i) designate one or more Section 162(m)
Participants, (ii) select the performance goal or goals applicable to the fiscal
year or other designated fiscal period, (iii) establish the various targets and
bonus amounts which may be earned for such fiscal year or other designated
fiscal period and (iv) specify the relationship between performance goals and
targets and the amounts to be earned by each Section 162(m) Participant for such
fiscal year or other designated fiscal period. Following the completion of each
fiscal year or other designated fiscal period, the Committee shall certify in
writing whether the applicable performance targets have been achieved for such
fiscal year or other designated fiscal period. In determining the amount earned
by a Section 162(m) Participant, the Committee shall have the right to reduce
(but not to increase) the amount payable at a given level of performance to take
into account additional factors that the Committee may deem relevant to the
assessment of individual or corporate performance for the fiscal year or other
designated fiscal period.
ARTICLE VII.
STOCK APPRECIATION RIGHTS
7.1. Grant of Stock Appreciation Rights. A Stock Appreciation Right may be
granted to any Employee or consultant selected by the Committee. A Stock
Appreciation Right may be granted (i) in connection and simultaneously with the
grant of an Option, (ii) with respect to a previously granted Option, or (iii)
independent of an Option. A Stock Appreciation Right shall be subject to such
terms and conditions not inconsistent with this Plan as the Committee shall
impose and shall be evidenced by a written Stock Appreciation Right Agreement,
which shall be executed by the Grantee and an authorized officer of the Company.
The Committee, in its discretion, may determine whether a Stock Appreciation
Right is to qualify as performance-based compensation as described in Section
162(m)(4)(C) of the Code and Stock Appreciation Right Agreements evidencing
Stock Appreciation Rights intended to so qualify shall contain such terms and
conditions as may be necessary to meet the applicable provisions of Section
162(m) of the Code. Without limiting the generality of the foregoing, the
Committee may, in its discretion and on such terms as it deems appropriate,
require as a condition of the grant of a Stock Appreciation Right to an Employee
or consultant that the Employee or consultant surrender for cancellation some or
all of the unexercised Options, awards of Restricted Stock, Stock Appreciation
Rights or other rights which have been previously granted to him under this Plan
or otherwise. A Stock Appreciation Right, the grant of which is conditioned upon
such surrender, may have an exercise price lower (or higher) than the exercise
price of the surrendered Option or other award, may cover the same (or a lesser
or greater) number of shares as such surrendered Option or other award, may
contain such other terms as the Committee deems appropriate, and shall be
exercisable in accordance with its terms, without regard to the
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number of shares, price, exercise period or any other term or condition of such
surrendered Option or other award.
7.2. Coupled Stock Appreciation Rights.
(a) A Coupled Stock Appreciation Right ("CSAR") shall be related to a
particular Option and shall be exercisable only when and to the extent the
related Option is exercisable.
(b) A CSAR may be granted to the Grantee for no more than the number of
shares subject to the simultaneously or previously granted Option to which it is
coupled.
(c) A CSAR shall entitle the Grantee (or other person entitled to exercise
the Option pursuant to this Plan) to surrender to the Company unexercised a
portion of the Option to which the CSAR relates (to the extent then exercisable
pursuant to its terms) and to receive from the Company in exchange therefor an
amount determined by multiplying the difference obtained by subtracting the
Option exercise price from the Fair Market Value of a share of Common Stock on
the date of exercise of the CSAR by the number of shares of Common Stock with
respect to which the CSAR shall have been exercised, subject to any limitations
the Committee may impose.
7.3. Independent Stock Appreciation Rights.
(a) An Independent Stock Appreciation Right ("ISAR") shall be unrelated to
any Option and shall have a term set by the Committee. An ISAR shall be
exercisable in such installments as the Committee may determine. An ISAR shall
cover such number of shares of Common Stock as the Committee may determine;
provided, however, that unless the Committee otherwise provides in the terms of
the ISAR or otherwise, no ISAR granted to a person subject to Section 16 of the
Exchange Act shall be exercisable until at least six months have elapsed from
(but excluding) the date on which the Option was granted. The exercise price per
share of Common Stock subject to each ISAR shall be set by the Committee. An
ISAR is exercisable only while the Grantee is an Employee or consultant;
provided that the Committee may determine that the ISAR may be exercised
subsequent to Termination of Employment or Termination of Consultancy without
cause, or following a change in control of the Company, or because of the
Grantee's retirement, death or disability, or otherwise.
(b) An ISAR shall entitle the Grantee (or other person entitled to exercise
the ISAR pursuant to this Plan) to exercise all or a specified portion of the
ISAR (to the extent then exercisable pursuant to its terms) and to receive from
the Company an amount determined by multiplying the difference obtained by
subtracting the exercise price per share of the ISAR from the Fair Market Value
of a share of Common Stock on the date of exercise of the ISAR by the number of
shares of Common Stock with respect to which the ISAR shall have been exercised,
subject to any limitations the Committee may impose.
7.4. Payment and Limitations on Exercise.
(a) Payment of the amount determined under Section 7.2(c) and 7.3(b) above
shall be in cash, in Common Stock (based on its Fair Market Value as of the date
the Stock Appreciation Right is exercised) or a combination of both, as
determined by the Committee. To
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the extent such payment is effected in Common Stock it shall be made subject to
satisfaction of all provisions of Section 5.3 above pertaining to Options.
(b) Grantees of Stock Appreciation Rights may be required to comply with
any timing or other restrictions with respect to the settlement or exercise of a
Stock Appreciation Right, including a window-period limitation, as may be
imposed in the discretion of the Board or Committee.
7.5. Consideration. In consideration of the granting of a Stock
Appreciation Right, the Grantee shall agree, in the written Stock Appreciation
Right Agreement, to remain in the employ of, or to consult for, the Company or
any Subsidiary for a period of at least one year after the Stock Appreciation
Right is granted (or such shorter period as may be fixed in the Stock
Appreciation Right Agreement or by action of the Committee following grant of
the Restricted Stock). Nothing in this Plan or in any Stock Appreciation Right
Agreement hereunder shall confer on any Grantee any right to continue in the
employ of, or as a consultant for, the Company or any Subsidiary or shall
interfere with or restrict in any way the rights of the Company and any
Subsidiary, which are hereby expressly reserved, to discharge any Grantee at any
time for any reason whatsoever, with or without good cause.
ARTICLE VIII.
ADMINISTRATION
8.1. Compensation Committee. The Compensation Committee (or another
committee or a subcommittee of the Board assuming the functions of the Committee
under this Plan) shall consist solely of two or more Independent Directors
appointed by and holding office at the pleasure of the Board, each of whom is
both a "non-employee director" as defined by Rule 16b-3 and an "outside
director" for purposes of Section 162(m) of the Code. Appointment of Committee
members shall be effective upon acceptance of appointment. Committee members may
resign at any time by delivering written notice to the Board. Vacancies in the
Committee may be filled by the Board.
8.2. Duties and Powers of Committee. It shall be the duty of the Committee
to conduct the general administration of this Plan in accordance with its
provisions. The Committee shall have the power to interpret this Plan and the
agreements pursuant to which Options, awards of Restricted Stock or Stock
Appreciation Rights are granted or awarded, and to adopt such rules for the
administration, interpretation, and application of this Plan as are consistent
therewith and to interpret, amend or revoke any such rules. Notwithstanding the
foregoing, the full Board, acting by a majority of its members in office, shall
conduct the general administration of the Plan with respect to Options granted
to Independent Directors. Any such grant or award under this Plan need not be
the same with respect to each Optionee, Grantee or Restricted Stockholder. Any
such interpretations and rules with respect to Incentive Stock Options shall be
consistent with the provisions of Section 422 of the Code. In its absolute
discretion, the Board may at any time and from time to time exercise any and all
rights and duties of the Committee under this Plan except with respect to
matters which under Rule 16b-3 or Section 162(m) of the Code, or any regulations
or rules issued thereunder, are required to be determined in the sole discretion
of the Committee.
8.3. Majority Rule; Unanimous Written Consent. The Committee shall act by a
majority of its members in attendance at a meeting at which a quorum is present
or by a memorandum or other written instrument signed by all members of the
Committee.
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8.4. Compensation; Professional Assistance; Good Faith Actions. Members of
the Committee shall receive such compensation for their services as members as
may be determined by the Board. All expenses and liabilities which members of
the Committee incur in connection with the administration of this Plan shall be
borne by the Company. The Committee may, with the approval of the Board, employ
attorneys, consultants, accountants, appraisers, brokers, or other persons. The
Committee, the Company and the Company's officers and Directors shall be
entitled to rely upon the advice, opinions or valuations of any such persons.
All actions taken and all interpretations and determinations made by the
Committee or the Board in good faith shall be final and binding upon all
Optionees, Grantees, Restricted Stockholders, the Company and all other
interested persons. No members of the Committee or Board shall be personally
liable for any action, determination or interpretation made in good faith with
respect to this Plan, Options, awards of Restricted Stock or Stock Appreciation
Rights and all members of the Committee and the Board shall be fully protected
by the Company in respect of any such action, determination or interpretation.
ARTICLE IX.
MISCELLANEOUS PROVISIONS
9.1. Not Transferable. Options, Restricted Stock awards or Stock
Appreciation Rights under this Plan may not be sold, pledged, assigned, or
transferred in any manner other than by will or the laws of descent and
distribution or pursuant to a QDRO, unless and until such rights or awards have
been exercised, or the shares underlying such rights or awards have been issued,
and all restrictions applicable to such shares have lapsed. No Option,
Restricted Stock award or Stock Appreciation Right or interest or right therein
shall be liable for the debts, contracts or engagements of the Optionee, Grantee
or Restricted Stockholder or his successors in interest or shall be subject to
disposition by transfer, alienation, anticipation, pledge, encumbrance,
assignment or any other means whether such disposition be voluntary or
involuntary or by operation of law by judgment, levy, attachment, garnishment or
any other legal or equitable proceedings (including bankruptcy), and any
attempted disposition thereof shall be null and void and of no effect, except to
the extent that such disposition is permitted by the preceding sentence.
During the lifetime of the Optionee or Grantee, only he may exercise an
Option or other right or award (or any portion thereof) granted to him under the
Plan, unless it has been disposed of pursuant to a QDRO. After the death of the
Optionee or Grantee, any exercisable portion of an Option or other right or
award may, prior to the time when such portion becomes unexercisable under the
Plan or the applicable Stock Option Agreement or other agreement, be exercised
by his personal representative or by any person empowered to do so under the
deceased Optionee's or Grantee's will or under the then applicable laws of
descent and distribution.
9.2. Amendment, Suspension or Termination of this Plan. Except as otherwise
provided in this Section 9.2, this Plan may be wholly or partially amended or
otherwise modified, suspended or terminated at any time or from time to time by
the Board or the Committee. However, without approval of the Company's
stockholders given within twelve months before or after the action by the Board
or the Committee, no action of the Board or the Committee may, except as
provided in Section 9.3, increase the limits imposed in Section 2.1 on the
maximum number of shares which may be issued under this Plan, and no action of
the Board or the Committee may be taken that would otherwise require stockholder
approval as a matter of applicable law, regulation or rule. No amendment,
suspension or termination of this Plan shall, without the consent of the holder
of Options, Restricted Stock awards or Stock Appreciation Rights alter or impair
any rights or obligations under any Options, Restricted Stock awards or Stock
Appreciation Rights theretofore granted or awarded, unless the award itself
otherwise
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expressly so provides. No Options, Restricted Stock or Stock Appreciation Rights
may be granted or awarded during any period of suspension or after termination
of this Plan, and in no event may any Incentive Stock Option be granted under
this Plan after the first to occur of the following events:
(a) The expiration of ten years from the date the Plan is adopted by the
Board; or
(b) The expiration of ten years from the date the Plan is approved by the
Company's stockholders under Section 9.4.
9.3. Changes in Common Stock or Assets of the Company, Acquisition or
Liquidation of the Company and Other Corporate Events.
(a) Subject to Section 9.3(e), in the event that the Committee (or the
Board, in the case of Options granted to Independent Directors) determines that
any dividend or other distribution (whether in the form of cash, Common Stock,
other securities, or other property), recapitalization, reclassification, stock
split, reverse stock split, reorganization, merger, consolidation, split-up,
spin-off, combination, repurchase, liquidation, dissolution, or sale, transfer,
exchange or other disposition of all or substantially all of the assets of the
Company (including, but not limited to, a Corporate Transaction or Change in
Control), or exchange of Common Stock or other securities of the Company,
issuance of warrants or other rights to purchase Common Stock or other
securities of the Company, or other similar corporate transaction or event, in
the Committee's sole discretion (or in the case of Options granted to
Independent Directors, the Board's sole discretion), affects the Common Stock
such that an adjustment is determined by the Committee to be appropriate in
order to prevent dilution or enlargement of the benefits or potential benefits
intended to be made available under the Plan or with respect to an Option,
Restricted Stock award or Stock Appreciation Right then the Committee (or the
Board, in the case of Options granted to Independent Directors) shall, in such
manner as it may deem equitable, adjust any or all of
(i) the number and kind of shares of Common Stock (or other securities
or property) with respect to which Options, or Stock Appreciation Rights
may be granted under the Plan, or which may be granted as Restricted Stock
(including, but not limited to, adjustments of the limitations in Section
2.1 on the maximum number and kind of shares which may be issued),
(ii) the number and kind of shares of Common Stock (or other
securities or property) subject to outstanding Options or Stock
Appreciation Rights and in the number and kind of shares of outstanding
Restricted Stock, and
(iii) the grant or exercise price with respect to any Option or Stock
Appreciation Right.
(b) Subject to Sections 9.3(b)(vii) and 9.3(e), in the event of any
Corporate Transaction, Change in Control or other transaction or event described
in Section 9.3(a) or any unusual or nonrecurring transactions or events
affecting the Company, any affiliate of the Company, or the financial statements
of the Company or any affiliate, or of changes in applicable laws, regulations,
or accounting principles, the Committee (or the Board, in the case of Options
granted to
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Independent Directors) in its discretion is hereby authorized to take any one or
more of the following actions whenever the Committee (or the Board, in the case
of Options granted to Independent Directors) determines that such action is
appropriate in order to prevent dilution or enlargement of the benefits or
potential benefits intended to be made available under the Plan or with respect
to any option, right or other award under this Plan, to facilitate such
transactions or events or to give effect to such changes in laws, regulations or
principles:
(i) In its sole and absolute discretion, and on such terms and
conditions as it deems appropriate, the Committee (or the Board, in the
case of Options granted to Independent Directors) may provide, either by
the terms of the agreement or by action taken prior to the occurrence of
such transaction or event and either automatically or upon the optionee's
request, for either the purchase of any such Option, Stock Appreciation
Right or any Restricted Stock for an amount of cash equal to the amount
that could have been attained upon the exercise of such option, right or
award or realization of the optionee's rights had such option, right or
award been currently exercisable or payable or fully vested or the
replacement of such option, right or award with other rights or property
selected by the Committee (or the Board, in the case of Options granted to
Independent Directors) in its sole discretion;
(ii) In its sole and absolute discretion, the Committee (or the Board,
in the case of Options granted to Independent Directors) may provide,
either by the terms of such Option, Stock Appreciation Right or Restricted
Stock or by action taken prior to the occurrence of such transaction or
event that it cannot be exercised after such event;
(iii) In its sole and absolute discretion, and on such terms and
conditions as it deems appropriate, the Committee (or the Board, in the
case of Options granted to Independent Directors) may provide, either by
the terms of such Option, Stock Appreciation Right or Restricted Stock or
by action taken prior to the occurrence of such transaction or event, that
for a specified period of time prior to such transaction or event, such
option, right or award shall be exercisable as to all shares covered
thereby, notwithstanding anything to the contrary in (i) Section 4.4 or
(ii) the provisions of such Option, Stock Appreciation Right or Restricted
Stock;
(iv) In its sole and absolute discretion, and on such terms and
conditions as it deems appropriate, the Committee (or the Board, in the
case of Options granted to Independent Directors) may provide, either by
the terms of such Option, Stock Appreciation Right or Restricted Stock or
by action taken prior to the occurrence of such transaction or event, that
upon such event, such option, right or award be assumed by the successor or
survivor corporation, or a parent or subsidiary thereof, or shall be
substituted for by similar options, rights or awards covering the stock of
the successor or survivor corporation, or a parent or subsidiary thereof,
with appropriate adjustments as to the number and kind of shares and
prices;
(v) In its sole and absolute discretion, and on such terms and
conditions as it deems appropriate, the Committee (or the Board, in the
case of Options granted to Independent Directors) may make adjustments in
the number and type of shares of Common Stock (or other securities or
property) subject to outstanding Options or Stock Appreciation Rights and
in the number and kind of outstanding Restricted Stock and/or in the terms
and conditions of (including the grant or exercise price), and the criteria
included in, outstanding options, rights and awards and options, rights and
awards which may be granted in the future;
(vi) In its sole and absolute discretion, and on such terms and
conditions as it deems appropriate, the Committee may provide either by the
terms of a Restricted Stock award or by action taken prior to the
occurrence of such event that, for a specified period of time prior to such
event, the restrictions imposed under a Restricted Stock Agreement upon
some
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or all shares of Restricted Stock may be terminated, and, in the case of
Restricted Stock, some or all shares of such Restricted Stock may cease to
be subject to repurchase under Section 6.6 or forfeiture under Section 6.5
after such event; and
(vii) None of the foregoing discretionary actions taken under Section
9.3(b) shall be permitted with respect to Options granted under Sections
3.4(d) and (e) to Independent Directors to the extent that such discretion
would be inconsistent with applicable exemptive conditions of Rule 16b-3.
(c) In the event of a Change in Control or a Corporate Transaction, to the
extent that the Board does not have the ability under Rule 16b-3 to take or to
refrain from taking the discretionary actions set forth in Section 9.3(b)(iii)
above, each Option granted to an Independent Director shall, immediately prior
to the effective date of the Corporate Transaction or Change in Control,
automatically become fully exercisable for all of the shares of Common Stock at
the time subject to such rights or fully vested, as applicable, and may be
exercised for any or all of those shares as fully vested shares of Common Stock.
(d) Subject to Section 9.3(e) and 9.8, the Committee (or the Board, in the
case of Options granted to Independent Directors) may, in its discretion,
include such further provisions and limitations in any Option, Stock
Appreciation Right or Restricted Stock agreement or certificate, as it may deem
equitable and in the best interests of the Company.
(e) With respect to Options and Stock Appreciation Rights which are granted
to Section 162(m) Participants and are intended to qualify as performance-based
compensation under Section 162(m)(4)(C), no adjustment or action described in
this Section 9.3 or in any other provision of the Plan shall be authorized to
the extent that such adjustment or action would cause the Plan to violate
Section 422(b)(1) of the Code or would cause such option or stock appreciation
right to fail to so qualify under Section 162(m)(4)(C), as the case may be, or
any successor provisions thereto. Furthermore, no such adjustment or action
shall be authorized to the extent such adjustment or action would result in
short-swing profits liability under Section 16 or violate the exemptive
conditions of Rule 16b-3 unless the Committee (or the Board, in the case of
Options granted to Independent Directors) determines that the option or other
award is not to comply with such exemptive conditions. The number of shares of
Common Stock subject to any option, right or award shall always be rounded to
the next whole number.
9.4. Approval of Plan by Stockholders. This Plan will be submitted for the
approval of the Company's stockholders within twelve months after the date of
the Board's initial adoption of this Plan. Options and Stock Appreciation Rights
may be awarded prior to such stockholder approval, provided that such Options
and Stock Appreciation Rights shall not be exercisable and such Restricted Stock
shall not vest prior to the time when this Plan is approved by the stockholders,
and provided further that if such approval has not been obtained at the end of
said twelve-month period, all Options and Stock Appreciation Rights previously
granted and all Restricted Stock previously awarded under this Plan shall
thereupon be canceled and become null and void.
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9.5. Tax Withholding. The Company shall be entitled to require payment in
cash or deduction from other compensation payable to each Optionee, Grantee or
Restricted Stockholder of any sums required by federal, state or local tax law
to be withheld with respect to the issuance, vesting or exercise of any Option,
Restricted Stock or Stock Appreciation Right. The Committee (or the Board, in
the case of Options granted to Independent Directors) may in its discretion and
in satisfaction of the foregoing requirement allow such Optionee, Grantee or
Restricted Stockholder to elect to have the Company withhold shares of Common
Stock otherwise issuable under such Option or other award (or allow the return
of shares of Common Stock) having a Fair Market Value equal to the sums required
to be withheld.
9.6. Loans. The Committee may, in its discretion, extend one or more loans
to Employees in connection with the exercise or receipt of an Option or Stock
Appreciation Right granted under this Plan or the issuance of Restricted Stock
awarded under this Plan. The terms and conditions of any such loan shall be set
by the Committee.
9.7. Forfeiture Provisions. Pursuant to its general authority to determine
the terms and conditions applicable to awards under the Plan, the Committee (or
the Board, in the case of Options granted to Independent Directors) shall have
the right (to the extent consistent with the applicable exemptive conditions of
Rule 16b-3) to provide, in the terms of Options or other awards made under the
Plan, or to require the recipient to agree by separate written instrument, that
(i) any proceeds, gains or other economic benefit actually or constructively
received by the recipient upon any receipt or exercise of the award, or upon the
receipt or resale of any Common Stock underlying such award, must be paid to the
Company, and (ii) the award shall terminate and any unexercised portion of such
award (whether or not vested) shall be forfeited, if (a) a Termination of
Employment, Termination of Consultancy or Termination of Directorship occurs
prior to a specified date, or within a specified time period following receipt
or exercise of the award, or (b) the recipient at any time, or during a
specified time period, engages in any activity in competition with the Company,
or which is inimical, contrary or harmful to the interests of the Company, as
further defined by the Committee (or the Board, as applicable).
9.8. Limitations Applicable to Section 16 Persons and Performance-Based
Compensation. Notwithstanding any other provision of this Plan, this Plan, and
any Option or Stock Appreciation Right granted, or Restricted Stock awarded, to
any individual who is then subject to Section 16 of the Exchange Act, shall be
subject to any additional limitations set forth in any applicable exemptive rule
under Section 16 of the Exchange Act (including any amendment to Rule 16b-3 of
the Exchange Act) that are requirements for the application of such exemptive
rule. To the extent permitted by applicable law, the Plan, Options, Stock
Appreciation Rights and Restricted Stock granted or awarded hereunder shall be
deemed amended to the extent necessary to conform to such applicable exemptive
rule. Furthermore, notwithstanding any other provision of this Plan, any Option
or Stock Appreciation Right which is granted to a Section 162(m) Participant and
is intended to qualify as performance-based compensation as described in Section
162(m)(4)(C) of the Code shall be subject to any additional limitations set
forth in Section 162(m) of the Code (including any amendment to Section 162(m)
of the Code) or any regulations or rulings issued thereunder that are
requirements for qualification as performance-based compensation as described in
Section 162(m)(4)(C) of the Code, and this Plan shall be deemed amended to the
extent necessary to conform to such requirements.
9.9. Effect of Plan Upon Options and Compensation Plans. The adoption of
this Plan shall not affect any other compensation or incentive plans in effect
for the Company or any Subsidiary. Nothing in this Plan shall be construed to
limit the right of the Company (i) to establish any other forms of incentives or
compensation for Employees, Directors or Consultants of the Company or any
Subsidiary or (ii) to grant or assume options or other rights otherwise than
under this Plan in connection with any proper corporate purpose including but
not by way of limitation, the grant or assumption of
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options in connection with the acquisition by purchase, lease, merger,
consolidation or otherwise, of the business, stock or assets of any corporation,
partnership, limited liability company, firm or association.
9.10. Compliance with Laws. This Plan, the granting and vesting of Options,
Restricted Stock awards and Stock Appreciation Rights under this Plan and the
issuance and delivery of shares of Common Stock and the payment of money under
this Plan or under Options, Stock Appreciation Rights or Restricted Stock
awarded hereunder are subject to compliance with all applicable federal and
state laws, rules and regulations (including but not limited to state and
federal securities law and federal margin requirements) and to such approvals by
any listing, regulatory or governmental authority as may, in the opinion of
counsel for the Company, be necessary or advisable in connection therewith. Any
securities delivered under this Plan shall be subject to such restrictions, and
the person acquiring such securities shall, if requested by the Company, provide
such assurances and representations to the Company as the Company may deem
necessary or desirable to assure compliance with all applicable legal
requirements. To the extent permitted by applicable law, the Plan, Options,
Restricted Stock awards, and Stock Appreciation Rights granted or awarded
hereunder shall be deemed amended to the extent necessary to conform to such
laws, rules and regulations.
9.11. Titles. Titles are provided herein for convenience only and are not
to serve as a basis for interpretation or construction of this Plan.
9.12. Governing Law. This Plan and any agreements hereunder shall be
administered, interpreted and enforced under the internal laws of the State of
Colorado without regard to conflicts of laws thereof.
* * *
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I hereby certify that the foregoing Plan was duly adopted by the Board of
Directors of The Spectranetics Corporation on April 14, 1997, and approved by
Shareholders on June 9, 1997.
Executed on this 9th day of June, 1997.
_______________________________
Secretary
22
Exhibit 4(b)
<PAGE>
NONQUALIFIED STOCK OPTION AGREEMENT
THIS AGREEMENT, dated as of April 17, 1996, is made by and between The
Spectranetics Corporation, a Delaware corporation hereinafter referred to as
"Company," and Emile Geisenheimer, a consultant of the Company or Subsidiary of
the Company, hereinafter referred to as "Optionee":
WHEREAS, the Company wishes to afford the Optionee the opportunity to
purchase shares of its $.001 par value Common Stock in return for the services
he has rendered as a consultant to the Company; and
WHEREAS, the Board has determined that it would be to the advantage and
best interest of the Company and its shareholders to grant the Non-Qualified
Option provided for herein to the Optionee as an inducement to enter into or
remain in the service of the Company or its Subsidiaries and as an incentive for
increased efforts during such service, and has advised the Company thereof and
instructed the undersigned officers to issue said Option;
NOW, THEREFORE, in consideration of the mutual covenants herein contained
and other good and valuable consideration, receipt of which is hereby
acknowledged, the parties hereto do hereby agree as follows:
ARTICLE I
DEFINITIONS
Whenever the following terms are used in this Agreement, they shall have
the meaning specified below unless the context clearly indicates to the
contrary. The masculine pronoun shall include the feminine and neuter, and the
singular the plural, where the context so indicates.
Section I.1 - "Board" shall mean the Board of Directors of the Company.
Section I.2 - "Code" shall mean the Internal Revenue Code of 1986, as amended.
Section I.3 - "Committee" shall mean the Compensation Committee of the Board, or
a subcommittee of the Board.
Section I.4 - "Common Stock" shall mean the common stock of the Company, par
value $.001 per share, and any equity security of the Company issued or
authorized to be issued in the future, but excluding any warrants, options or
other rights to purchase Common Stock. Debt securities of the Company
convertible into Common Stock shall be deemed equity securities of the Company.
Section I.5 - "Company" shall mean The Spectranetics Corporation, a Delaware
corporation.
<PAGE>
Section I.6 - "Director" shall mean a member of the Board.
Section I.7 - "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
Section I.8 - "Fair Market Value" of a share of Common Stock as of a given date
shall be (i) the closing price of a share of Common Stock on the principal
exchange on which such shares of Common Stock are then trading, if any, on such
date, or if shares were not traded on such date, then on the closest preceding
date on which a trade occurred, or (ii) if Common Stock is not traded on an
exchange, the closing price for the Common Stock on such date as reported by
NASDAQ or, if NASDAQ is not then in existence, by its successor quotation
system; or (iii) if Common Stock is not publicly traded, the Fair Market Value
of a share of Common Stock as established by the Committee acting in good faith.
Section I.9 - "Option" shall mean a non-qualified stock option granted under
this Agreement.
Section I.10 - "Optionee" shall mean the consultant granted an Option under this
Agreement.
Section I.11 - "Rule 16b-3" shall mean that certain Rule 16b-3 under the
Exchange Act, as such Rule may be amended from time to time.
Section I.12 - "Secretary" shall mean the Secretary of the Company.
Section I.13 - "Securities Act" shall mean the Securities Act of 1933, as
amended.
Section I.14 - "Subsidiary" shall mean any corporation in an unbroken chain of
corporations beginning with the Company if each of the corporations other than
the last corporation in the unbroken chain then owns stock possessing 50 percent
or more of the total combined voting power of all classes of stock in one of the
other corporations in such chain.
ARTICLE II
GRANT OF OPTION
Section II.1 - Grant of Option
In consideration of the Optionee's agreement to consult for the Company or
its Subsidiaries for a period of at least one year after the option is granted
and for other good and valuable consideration, on the date hereof the Company
irrevocably grants to the Optionee the option to purchase any part or all of an
aggregate of 100,000 shares of its $.001 par value Common Stock upon the terms
and conditions set forth in this Agreement.
Section II.2 - Purchase Price
The purchase price of the shares of stock covered by the Option shall be
$4.655 per share without commission or other charge.
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Section 2.3 - Consideration to Company
In consideration of the granting of this Option by the Company, the
Optionee agrees to render faithful and efficient services to the Company or a
Subsidiary, with such duties and responsibilities as the Company shall from time
to time prescribe, for a period of at least one (1) year from the date this
Option is granted. Nothing in this Agreement shall confer upon any Optionee any
right to continue in the employ of, or as a consultant for, the Company or any
Subsidiary, or as a director of the Company, or shall interfere with or restrict
in any way the rights of the Company and any Subsidiary, which are hereby
expressly reserved, to discharge the Optionee at any time for any reason
whatsoever, with or without good cause.
Section II.3 - Adjustments in Option
(a) In the event that the outstanding shares of the stock subject to the
Option are changed into or exchanged for a different number or kind of shares of
the Company or other securities of the Company, or of another corporation, by
reason of reorganization, merger, consolidation, recapitalization,
reclassification, stock splitup, stock dividend or combination of shares, the
Committee shall make an appropriate and equitable adjustment in the number and
kind of shares as to which the Option, or portions thereof then unexercised,
shall be exercisable, to the end that after such event the Optionee's
proportionate interest shall be maintained as before the occurrence of such
event. Such adjustment in the Option may include any necessary corresponding
adjustment in the Option price per share, but shall be made without change in
the total price applicable to the unexercised portion of the Option (except for
any change in the aggregate price resulting from rounding-off of share
quantities or prices). Any such adjustment made by the Committee shall be final
and binding upon the Optionee, the Company and all other interested persons.
(b) Notwithstanding the foregoing, in the event of such a reorganization,
merger, consolidation, recapitalization, reclassification, stock splitup, stock
dividend or combination, or other adjustment or event which results in shares of
Common Stock being exchanged for or converted into cash, securities or other
property, the Company will have the right to terminate this Agreement as of the
date of the exchange or conversion, in which case the options granted under this
Agreement shall become the right to receive such cash, securities or other
property, net of any applicable exercise price.
(c) In the event of a "spin-off" or other substantial distribution of
assets of the Company which has a material diminutive effect upon the Fair
Market Value of the Company's Common Stock, the Board may in its discretion make
an appropriate and equitable adjustment to the Option to reflect such
diminution.
ARTICLE III
PERIOD OF EXERCISABILITY
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Section III.1 - Commencement of Exercisability
(a) The Option may be exercised by the Optionee to purchase the total
number of shares specified in Section 2.1 as follows:
(i) One-half of the total number of shares shall become exercisable on
the first anniversary date of the grant date; and
(ii) One-half of the total number of shares shall become exercisable
on the second anniversary date of the grant date.
Section III.2 - Duration of Exercisability
The installments provided for in Section 3.1 are cumulative. Each such
installment which becomes exercisable pursuant to Section 3.1 shall remain
exercisable until it becomes unexercisable under Section 3.3.
Section III.3 - Expiration of Option
The Option may not be exercised to any extent by anyone after the first to
occur of the following events:
(a) The expiration of ten (10) years from the date the Option was granted;
or
(b) The effective date of either the merger or consolidation of the Company
with or into another corporation, the exchange of all or substantially all of
the assets of the Company for the securities of another corporation, the
acquisition by another corporation or person of all or substantially all of the
Company's assets or fifty percent (50%) or more of the Company's then
outstanding voting stock, or the liquidation or dissolution of the Company,
unless the Committee waives this provision in connection with such transaction.
At least ten (10) days prior to the effective date of such merger,
consolidation, exchange, acquisition, liquidation or dissolution, the Committee
shall give the Optionee notice of such event if the Option has then neither been
fully exercised nor become unexercisable under this Section 3.3.
Section III.4 - Acceleration of Exercisability
In the event of the merger or consolidation of the Company with or into
another corporation, the exchange of all or substantially all of the assets of
the Company for the securities of another corporation, the acquisition by
another corporation or person of all or substantially all of the Company's
assets or fifty percent (50%) or more of the Company's then outstanding voting
stock, or the liquidation or dissolution of the Company, the Committee may, in
its absolute discretion and upon such terms and conditions as it deems
appropriate, provide by resolution, adopted prior to such event and incorporated
in the notice referred to in Section 3.3(e), that at some time prior to the
effective date of such event this Option shall be exercisable as to all the
shares covered hereby, notwithstanding that this Option may not yet have become
fully
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exercisable under Section 3.1(a); provided, however, that this acceleration of
exercisability shall not take place if:
(a) This Option becomes unexercisable under Section 3.3 prior to said
effective date; or
(b) In connection with such an event, provision is made for an assumption
of this Option or a substitution therefor of a new option by an employer
corporation or a parent or subsidiary of such corporation.
The Committee may make such determinations and adopt such rules and
conditions as it, in its absolute discretion, deems appropriate in connection
with such acceleration of exercisability, including, but not by way of
limitation, provisions to ensure that any such acceleration and resulting
exercise shall be conditioned upon the consummation of the contemplated
corporate transaction.
None of the foregoing discretionary terms of this Section shall be
permitted to the extent that such discretion would be inconsistent with the
requirements of Rule 16b-3.
ARTICLE IV
EXERCISE OF OPTION
Section IV.1 - Person Eligible to Exercise
During the lifetime of the Optionee, only he may exercise the Option or any
portion thereof. After the death of the Optionee, any exercisable portion of the
Option may, prior to the time when the Option becomes unexercisable under
Section 3.3, be exercised by his personal representative or by any person
empowered to do so under the Optionee's will or under the then applicable laws
of descent and distribution.
Section IV.2 - Partial Exercise
Any exercisable portion of the Option or the entire Option, if then wholly
exercisable, may be exercised in whole or in part at any time prior to the time
when the Option or portion thereof becomes unexercisable under Section 3.3;
provided, however, that each partial exercise shall be for not less than one
hundred (100) shares (or the minimum installment set forth in Section 3.1, if a
smaller number of shares) and shall be for whole shares only.
Section IV.3 - Manner of Exercise
The Option, or any exercisable portion thereof, may be exercised solely by
delivery to the Secretary or his office of all of the following prior to the
time when the Option or such portion becomes unexercisable under Section 3.3:
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(a) Notice in writing signed by the Optionee or the other person then
entitled to exercise the Option or portion, stating that the Option or portion
is thereby exercised, such notice complying with all applicable rules
established by the Committee or the Board; and
(b) (i) Full payment (in cash) for the shares with respect to which such
Option or portion is exercised; or
(ii) With the consent of the Committee, payment delayed for up to
thirty (30) days from the date the Option, or portion thereof, is
exercised; or
(iii) With the consent of the Committee, (A) shares of the Company's
Common Stock owned by the Optionee duly endorsed for transfer to the
Company or (B) subject to the timing requirements of Section 4.4, shares of
the Company's Common Stock issuable to the Optionee upon exercise of the
Option, with a Fair Market Value on the date of Option exercise equal to
the aggregate purchase price of the shares with respect to which such
Option or portion is exercised;
(c) A bona fide written representation and agreement, in a form
satisfactory to the Committee or the Board, signed by the Optionee or other
person then entitled to exercise such Option or portion, stating that the shares
of stock are being acquired for his own account, for investment and without any
present intention of distributing or reselling said shares or any of them except
as may be permitted under the Securities Act and then applicable rules and
regulations thereunder, and that the Optionee or other person then entitled to
exercise such Option or portion will indemnify the Company against and hold it
free and harmless from any loss, damage, expense or liability resulting to the
Company if any sale or distribution of the shares by such person is contrary to
the representation and agreement referred to above. The Committee may, in its
absolute discretion, take whatever additional actions it deems appropriate to
insure the observance and performance of such representation and agreement and
to effect compliance with the Securities Act and any other federal or state
securities laws or regulations. Without limiting the generality of the
foregoing, the Committee may require an opinion of counsel acceptable to it to
the effect that any subsequent transfer of shares acquired on an Option exercise
does not violate the Securities Act, and may issue stop-transfer orders covering
such shares. Share certificates evidencing stock issued on exercise of this
Option shall bear an appropriate legend referring to the provisions of this
subsection (c) and the agreements herein. The written representation and
agreement referred to in the first sentence of this subsection (c) shall,
however, not be required if the shares to be issued pursuant to such exercise
have been registered under the Securities Act, and such registration is then
effective in respect of such shares; and
(d) Full payment to the Company (or other employer corporation) of all
amounts which, under federal, state or local tax law, it is required to withhold
upon exercise of the Option; with the consent of the Committee, (i) shares of
the Company's Common Stock owned by the Optionee duly endorsed for transfer, or
(ii) subject to the timing requirements of Section 4.4, shares of the Company's
Common Stock issuable to the Optionee upon exercise of the Option, having a Fair
Market Value at the date of Option exercise equal to the sums required to be
withheld, may be used to make all or part of such payment; and
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<PAGE>
(e) In the event the Option or portion shall be exercised pursuant to
Section 4.1 by any person or persons other than the Optionee, appropriate proof
of the right of such person or persons to exercise the Option.
Section IV.4 - Certain Timing Requirements
Shares of the Company's Common Stock issuable to the Optionee upon exercise
of the Option may be used to satisfy the Option price or the tax withholding
consequences of such exercise only (i) during the period beginning on the third
(3rd) business day following the date of release of the quarterly or annual
summary statement of sales and earnings of the Company and ending on the twelfth
(12th) business day following such date or (ii) pursuant to an irrevocable
written election by the Optionee to use shares of the Company's Common Stock
issuable to the Optionee upon exercise of the Option to pay all or part of the
Option price or the withholding taxes (subject to the approval of the Committee)
made at least six (6) months prior to the payment of such Option price or
withholding taxes.
Section IV.5 - Conditions to Issuance of Stock Certificates
The shares of stock deliverable upon the exercise of the Option, or any
portion thereof, may be either previously authorized but unissued shares or
issued shares which have then been reacquired by the Company. Such shares shall
be fully paid and nonassessable. The Company shall not be required to issue or
deliver any certificate or certificates for shares of stock purchased upon the
exercise of the Option or portion thereof prior to fulfillment of all of the
following conditions:
(a) The admission of such shares to listing on all stock exchanges on which
such class of stock is then listed; and
(b) The completion of any registration or other qualification of such
shares under any state or federal law or under rulings or regulations of the
Securities and Exchange Commission or of any other governmental regulatory body,
which the Committee or Board shall, in its absolute discretion, deem necessary
or advisable; and
(c) The obtaining of any approval or other clearance from any state or
federal governmental agency which the Committee or Board shall, in its absolute
discretion, determine to be necessary or advisable; and
(d) The receipt by the Company of full payment for such shares, including
payment of all amounts which, under federal, state or local tax law, it is
required to withhold upon exercise of the Option; and
(e) The receipt by the Company of representations from the Optionee to the
effect that, upon exercise of the Option, he will acquire the optioned shares
for his own account for investment and not with any intent or view to any
distribution, resale or other disposition of the optioned shares, and such
further representations and agreements as the Company may
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<PAGE>
reasonably determine to be necessary or appropriate to assure and to evidence
compliance with the requirements of the Act; and
(f) The lapse of such reasonable period of time following the exercise of
the Option as the Committee or Board may from time to time establish for reasons
of administrative convenience.
Section IV.6 - Registration of Shares
The Company may, in its discretion, file and maintain effective with the
Securities and Exchange Commission a Registration Statement on Form S-8 under
the Securities Act of 1933, as amended (the "Act"), covering the sale of the
optioned shares to Optionee upon exercise of the Option.
Section IV.7 - Rights as Shareholder
The holder of the Option shall not be, nor have any of the rights or
privileges of, a shareholder of the Company in respect of any shares purchasable
upon the exercise of any part of the Option unless and until certificates
representing such shares shall have been issued by the Company to such holder.
ARTICLE V
OTHER PROVISIONS
Section V.1 - Administration
The Committee shall have the power to interpret this Agreement and to adopt
such rules for the administration, interpretation and application of this
Agreement as are consistent therewith and to interpret or revoke any such rules.
All actions taken and all interpretations and determinations made by the
Committee in good faith shall be final and binding upon the Optionee, the
Company and all other interested persons. No member of the Committee shall be
personally liable for any action, determination or interpretation made in good
faith with respect to this Agreement. In its absolute discretion, the Board may
at any time and from time to time exercise any and all rights and duties of the
Committee under this Agreement except with respect to matters which under Rule
16b-3 or Section 162(m) of the Code, or any regulations or rules issued
thereunder, are required to be determined in the sole discretion of the
Committee.
Section V.2 - Option Not Transferable
Neither the Option nor any interest or right therein or part thereof shall
be liable for the debts, contracts or engagements of the Optionee or his
successors in interest or shall be subject to disposition by transfer,
alienation, anticipation, pledge, encumbrance, assignment or any other means
whether such disposition be voluntary or involuntary or by operation of law by
judgment, levy, attachment, garnishment or any other legal or equitable
proceedings (including bankruptcy), and any attempted disposition thereof shall
be null and void and of no effect;
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provided, however, that this Section 5.2 shall not prevent transfers by will or
by the applicable laws of descent and distribution.
Section V.3 - Shares to Be Reserved
The Company shall at all times during the term of the Option reserve and
keep available such number of shares of stock as will be sufficient to satisfy
the requirements of this Agreement.
Section V.4 - Notices
Any notice to be given under the terms of this Agreement to the Company
shall be addressed to the Company in care of its Secretary, and any notice to be
given to the Optionee shall be addressed to him at the address given beneath his
signature hereto. By a notice given pursuant to this Section 5.4, either party
may hereafter designate a different address for notices to be given to him. Any
notice which is required to be given to the Optionee shall, if the Optionee is
then deceased, be given to the Optionee's personal representative if such
representative has previously informed the Company of his status and address by
written notice under this Section 5.4. Any notice shall be deemed duly given
when enclosed in a properly sealed envelope or wrapper addressed as aforesaid,
deposited (with postage prepaid) in a post office or branch post office
regularly maintained by the United States Postal Service.
Section V.5 - Titles
Titles are provided herein for convenience only and are not to serve as a
basis for interpretation or construction of this Agreement.
Section V.6 - Construction
This Agreement shall be administered, interpreted and enforced under the
laws of the State of Colorado.
Section V.7 - Conformity to Securities Laws
The Optionee acknowledges that this Agreement is intended to conform to the
extent necessary with all provisions of the Securities Act and the Exchange Act
and any and all regulations and rules promulgated by the Securities and Exchange
Commission thereunder, including without limitation Rule 16b-3. Notwithstanding
anything herein to the contrary, this Agreement shall be administered, and the
Option is granted and may be exercised, only in such a manner as to conform to
such laws, rules and regulations. To the extent permitted by applicable law,
this Agreement shall be deemed amended to the extent necessary to conform to
such laws, rules and regulations.
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IN WITNESS WHEREOF, this Agreement has been executed and delivered by the
parties hereto.
THE SPECTRANETICS CORPORATION
By /s/ James P.McCluskey
_______________________________
Vice President, Finance
/s/ Emile J. Geisenheimer
_______________________________________
Optionee
_______________________________________
_______________________________________
Address
Optionee's Taxpayer
Identification Number:
_______________________________________
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Exhibit 4 (c)
<PAGE>
NON-QUALIFIED STOCK OPTION AGREEMENT
THIS AGREEMENT, dated as of March 3, 1997 (the "Agreement"), is made by and
between The Spectranetics Corporation, a Delaware corporation hereinafter
referred to as "Company," and Joseph A. Largey, an employee of the Company or
Subsidiary of the Company, hereinafter referred to as "Optionee":
WHEREAS, the Company wishes to afford the Optionee the opportunity to
purchase shares of its $.001 par value Common Stock in return for the services
he has rendered as an employee to the Company; and
WHEREAS, the Board has determined that it would be to the advantage and
best interest of the Company and its shareholders to grant the Non-Qualified
Option provided for herein to the Optionee as an inducement to enter into or
remain in the service of the Company or its Subsidiaries and as an incentive for
increased efforts during such service, and has advised the Company thereof and
instructed the undersigned officers to issue said Option;
NOW, THEREFORE, in consideration of the mutual covenants herein contained
and other good and valuable consideration, receipt of which is hereby
acknowledged, the parties hereto do hereby agree as follows:
ARTICLE I.
DEFINITIONS
Whenever the following terms are used in this Agreement, they shall have
the meaning specified below unless the context clearly indicates to the
contrary. The masculine pronoun shall include the feminine and neuter, and the
singular the plural, where the context so indicates.
Section 1.1. Board
"Board" shall mean the Board of Directors of the Company.
Section 1.2. Change in Control
"Change in Control" shall mean a change in ownership or control of the
Company effected through either of the following transactions:
(a) any person or related group of persons (other than the Company or a
person that directly or indirectly controls, is controlled by, or is under
common control with, the Company) directly or indirectly acquires beneficial
ownership (within the meaning of Rule 13d-3 under the Exchange Act) of
securities possessing more than fifty percent (50%) of the total combined voting
power of the Company's outstanding securities pursuant to a tender or exchange
offer made directly to the Company's stockholders which the Board does not
recommend such stockholders to accept; or
<PAGE>
(b) there is a change in the composition of the Board over a period of
thirty-six (36) consecutive months (or less) such that a majority of the Board
members (rounded up to the nearest whole number) ceases, by reason of one or
more proxy contests for the election of Board members, to be comprised of
individuals who either (i) have been Board members continuously since the
beginning of such period or (ii) have been elected or nominated for election as
Board members during such period by at least a majority of the Board members
described in clause (i) who were still in office at the time such election or
nomination was approved by the Board.
Section 1.3. Code
"Code" shall mean the Internal Revenue Code of 1986, as amended.
Section 1.4. Committee
"Committee" shall mean the Compensation Committee of the Board, or a
subcommittee of the Board.
Section 1.5. Common Stock
"Common Stock" shall mean the common stock of the Company, par value $.001
per share, and any equity security of the Company issued or authorized to be
issued in the future, but excluding any warrants, options or other rights to
purchase Common Stock. Debt securities of the Company convertible into Common
Stock shall be deemed equity securities of the Company.
Section 1.6. Company
"Company" shall mean The Spectranetics Corporation, a Delaware corporation.
Section 1.7. Corporate Transaction
"Corporate Transaction" shall mean any of the following
stockholder-approved transactions to which the Company is a party:
(a) a merger or consolidation in which the Company is not the surviving
entity, except for a transaction the principal purpose of which is to change the
State in which the Company is incorporated, form a holding company or effect a
similar reorganization as to form whereupon this Option is assumed by the
successor entity;
(b) the sale, transfer, exchange or other disposition of all or
substantially all of the assets of the Company, in complete liquidation or
dissolution of the Company in a transaction not covered by the exceptions to
clause (a), above; or
(c) any reverse merger in which the Company is the surviving entity but in
which securities possessing more than fifty percent (50%) of the total combined
voting power of the Company's outstanding securities are transferred or issued
to a person or persons different from those who held such securities immediately
prior to such merger.
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Section 1.8. Director
"Director" shall mean a member of the Board.
Section 1.9. Exchange Act
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended.
Section 1.10. Fair Market Value
"Fair Market Value" of a share of Common Stock as of a given date shall be
(i) the closing price of a share of Common Stock on the principal exchange on
which such shares of Common Stock are then trading, if any, on such date, or if
shares were not traded on such date, then on the closest preceding date on which
a trade occurred, or (ii) if Common Stock is not traded on an exchange, the
closing price for the Common Stock on such date as reported by NASDAQ or, if
NASDAQ is not then in existence, by its successor quotation system; or (iii) if
Common Stock is not publicly traded, the Fair Market Value of a share of Common
Stock as established by the Committee acting in good faith.
Section 1.11. Option
"Option" shall mean a non-qualified stock option granted under this
Agreement.
Section 1.12. Optionee
"Optionee" shall mean the consultant granted an Option under this
Agreement.
Section 1.13. Rule 16b-3
"Rule 16b-3" shall mean that certain Rule 16b-3 under the Exchange Act, as
such Rule may be amended from time to time.
Section 1.14. Secretary
"Secretary" shall mean the Secretary of the Company.
Section 1.15. Securities Act
"Securities Act" shall mean the Securities Act of 1933, as amended.
Section 1.16. Subsidiary
"Subsidiary" shall mean any corporation in an unbroken chain of
corporations beginning with the Company if each of the corporations other than
the last corporation in the unbroken chain then owns stock possessing 50 percent
or more of the total combined voting power of all classes of stock in one of the
other corporations in such chain.
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Section 1.17. Termination of Employment
"Termination of Employment" shall mean the time when the employee-employer
relationship between the Optionee and the Company or any Subsidiary is
terminated for any reason, including, but not by way of limitation, a
termination by resignation, discharge, death, disability or retirement; but
excluding (i) terminations where there is a simultaneous reemployment,
continuing employment of an Optionee by the Company or any Subsidiary, (ii) at
the discretion of the Committee, terminations which result in a temporary
severance of the employee-employer relationship, and (iii) at the discretion of
the Committee, terminations which are followed by the simultaneous establishment
of a consulting relationship by the Company or a Subsidiary with the former
employee. The Committee, in its absolute discretion, shall determine the effect
of all matters and questions relating to Termination of Employment, including,
but not by way of limitation, the question of whether a Termination of
Employment resulted from a discharge for good cause, and all questions of
whether particular leaves of absence constitute Terminations of Employment.
Notwithstanding any other provision of this Plan, the Company or any Subsidiary
has an absolute and unrestricted right to terminate an Employee's employment at
any time for any reason whatsoever, with or without cause, except to the extent
expressly provided otherwise in writing.
ARTICLE II.
GRANT OF OPTION
Section 2.1. Grant of Option
In consideration of the Optionee's agreement to consult for the Company or
its Subsidiaries for a period of at least one year after the option is granted
and for other good and valuable consideration, on the date hereof the Company
irrevocably grants to the Optionee the option to purchase any part or all of an
aggregate of 575,000 shares of its $.001 par value Common Stock upon the terms
and conditions set forth in this Agreement.
Section 2.2. Purchase Price
The purchase price of the shares of stock covered by the Option shall be
$3.3125 per share without commission or other charge.
Section 2.3. Consideration to Company
In consideration of the granting of this Option by the Company, the
Optionee agrees to render faithful and efficient services to the Company or a
Subsidiary, with such duties and responsibilities as the Company shall from time
to time prescribe, for a period of at least one (1) year from the date this
Option is granted. Nothing in this Agreement shall confer upon any Optionee any
right to continue in the employ of, or as a consultant for, the Company or any
Subsidiary, or as a director of the Company, or shall interfere with or restrict
in any way the rights of the Company and any Subsidiary, which are hereby
expressly reserved, to discharge the Optionee at any time for any reason
whatsoever, with or without good cause.
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Section 2.4. Adjustments in Option
(a) In the event that the outstanding shares of the stock subject to the
Option are changed into or exchanged for a different number or kind of shares of
the Company or other securities of the Company, or of another corporation, by
reason of reorganization, merger, consolidation, recapitalization,
reclassification, stock splitup, stock dividend or combination of shares, the
Committee shall make an appropriate and equitable adjustment in the number and
kind of shares as to which the Option, or portions thereof then unexercised,
shall be exercisable, to the end that after such event the Optionee's
proportionate interest shall be maintained as before the occurrence of such
event. Such adjustment in the Option may include any necessary corresponding
adjustment in the Option price per share, but shall be made without change in
the total price applicable to the unexercised portion of the Option (except for
any change in the aggregate price resulting from rounding-off of share
quantities or prices). Any such adjustment made by the Committee shall be final
and binding upon the Optionee, the Company and all other interested persons.
(b) Notwithstanding the foregoing, in the event of such a reorganization,
merger, consolidation, recapitalization, reclassification, stock splitup, stock
dividend or combination, or other adjustment or event which results in shares of
Common Stock being exchanged for or converted into cash, securities or other
property, the Company will have the right to terminate this Agreement as of the
date of the exchange or conversion, in which case the Option granted under this
Agreement shall become the right to receive such cash, securities or other
property, net of any applicable exercise price.
(c) In the event of a "spin-off" or other substantial distribution of
assets of the Company which has a material diminutive effect upon the Fair
Market Value of the Company's Common Stock, the Board may in its discretion make
an appropriate and equitable adjustment to the Option to reflect such
diminution.
ARTICLE III.
PERIOD OF EXERCISABILITY
Section 3.1. Commencement of Exercisability
(a) The Option may be exercised by the Optionee to purchase the total
number of shares specified in Section 2.1 as follows:
(i) 25,000 shares shall be exercisable as of the date of this
Agreement;
(ii) 137,512 shares shall become exercisable on March 3, 1998; and
(iii) An additional 11,458 shares shall become exercisable on the
third day of each month thereafter.
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(b) No portion of the Option which is unexercisable at Termination of
Employment, as applicable, shall thereafter become exercisable.
Section 3.2. Duration of Exercisability
The installments provided for in Section 3.1 are cumulative. Each such
installment which becomes exercisable pursuant to Section 3.1 shall remain
exercisable until it becomes unexercisable under Section 3.3.
Section 3.3. Expiration of Option
The Option may not be exercised to any extent by anyone after the first to
occur of the following events:
(a) The expiration of ten (10) years from the date the Option was granted;
or
(b) The expiration of three (3) months from the date of the Optionee's
Termination of Employment unless such Termination of Employment results from his
death, retirement, disability or discharge not for good cause; or
(c) The expiration of one (1) year from the date of the Optionee's
Termination of Employment by reason of his death, disability, retirement or
discharge not for good cause, unless the Optionee dies within said three-month
period; or
(d) The effective date of either the merger or consolidation of the Company
with or into another corporation, the exchange of all or substantially all of
the assets of the Company for the securities of another corporation, the
acquisition by another corporation or person of all or substantially all of the
Company's assets or fifty percent (50%) or more of the Company's then
outstanding voting stock, or the liquidation or dissolution of the Company,
unless the Committee waives this provision in connection with such transaction.
At least ten (10) days prior to the effective date of such merger,
consolidation, exchange, acquisition, liquidation or dissolution, the Committee
shall give the Optionee notice of such event if the Option has then neither been
fully exercised nor become unexercisable under this Section 3.3.
Section 3.4. Acceleration of Exercisability
Notwithstanding the foregoing Section 3.1,
(a) In the event of any Change in Control or Corporate Transaction, the
Option shall, immediately prior to the effective date of such event,
automatically become fully exercisable for all of the shares of Common Stock at
the time subject to the Option, and may be exercised for any or all of those
shares as fully-vested shares of Common Stock; provided, however, that, if and
to the extent the Option is, in connection with a Change in Control or Corporate
Transaction, either to be assumed by the successor or survivor corporation (or
parent thereof) or to be replaced with a comparable right with respect to shares
of the capital stock of the successor or survivor corporation (or parent
thereof), the Option shall, immediately prior to the effective date of the
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<PAGE>
Change in Control or Corporate Transaction, automatically become exercisable for
only seventy percent (70%) of the unvested shares of Common Stock at the time
subject to the Option.
(b) In the event of Optionee's constructive termination (including, without
limitation, any demotion) within one (1) year of a Change in Control or
Corporate Transaction, the Option shall automatically become fully exercisable
for all of the shares of Common Stock at the time subject to the Option, and may
be exercised for any or all of those shares as fully-vested shares of Common
Stock.
(c) The Committee may make such determinations and adopt such rules and
conditions as it, in its absolute discretion, deems appropriate in connection
with such acceleration of exercisability, including, but not by way of
limitation, provisions to ensure that any such acceleration and resulting
exercise shall be conditioned upon the consummation of the contemplated
corporate transaction, and determinations regarding whether provisions for
assumption or substitution have been made as referenced in subsection (a) above.
ARTICLE IV.
EXERCISE OF OPTION
Section 4.1. Person Eligible to Exercise
During the lifetime of the Optionee, only he may exercise the Option or any
portion thereof. After the death of the Optionee, any exercisable portion of the
Option may, prior to the time when the Option becomes unexercisable under
Section 3.3, be exercised by his personal representative or by any person
empowered to do so under the Optionee's will or under the then applicable laws
of descent and distribution.
Section 4.2. Partial Exercise
Any exercisable portion of the Option or the entire Option, if then wholly
exercisable, may be exercised in whole or in part at any time prior to the time
when the Option or portion thereof becomes unexercisable under Section 3.3;
provided, however, that each partial exercise shall be for not less than one
hundred (100) shares (or the minimum installment set forth in Section 3.1, if a
smaller number of shares) and shall be for whole shares only.
Section 4.3. Manner of Exercise
The Option, or any exercisable portion thereof, may be exercised solely by
delivery to the Secretary or his office of all of the following prior to the
time when the Option or such portion becomes unexercisable under Section 3.3:
(a) Notice in writing signed by the Optionee or the other person then
entitled to exercise the Option or portion, stating that the Option or portion
is thereby exercised, such notice complying with all applicable rules
established by the Committee or the Board; and
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<PAGE>
(b) (i) Full payment (in cash) for the shares with respect to which such
Option or portion is exercised; or
(ii) With the consent of the Committee, payment delayed for up to
thirty (30) days from the date the Option, or portion thereof, is
exercised; or
(iii) With the consent of the Committee, (A) shares of the Company's
Common Stock owned by the Optionee duly endorsed for transfer to the
Company or (B) subject to the timing requirements of Section 4.4, shares of
the Company's Common Stock issuable to the Optionee upon exercise of the
Option, with a Fair Market Value on the date of Option exercise equal to
the aggregate purchase price of the shares with respect to which such
Option or portion is exercised;
(c) A bona fide written representation and agreement, in a form
satisfactory to the Committee or the Board, signed by the Optionee or other
person then entitled to exercise such Option or portion, stating that the shares
of stock are being acquired for his own account, for investment and without any
present intention of distributing or reselling said shares or any of them except
as may be permitted under the Securities Act and then applicable rules and
regulations thereunder, and that the Optionee or other person then entitled to
exercise such Option or portion will indemnify the Company against and hold it
free and harmless from any loss, damage, expense or liability resulting to the
Company if any sale or distribution of the shares by such person is contrary to
the representation and agreement referred to above. The Committee may, in its
absolute discretion, take whatever additional actions it deems appropriate to
insure the observance and performance of such representation and agreement and
to effect compliance with the Securities Act and any other federal or state
securities laws or regulations. Without limiting the generality of the
foregoing, the Committee may require an opinion of counsel acceptable to it to
the effect that any subsequent transfer of shares acquired on an Option exercise
does not violate the Securities Act, and may issue stop-transfer orders covering
such shares. Share certificates evidencing stock issued on exercise of this
Option shall bear an appropriate legend referring to the provisions of this
subsection (c) and the agreements herein. The written representation and
agreement referred to in the first sentence of this subsection (c) shall,
however, not be required if the shares to be issued pursuant to such exercise
have been registered under the Securities Act, and such registration is then
effective in respect of such shares; and
(d) Full payment to the Company (or other employer corporation) of all
amounts which, under federal, state or local tax law, it is required to withhold
upon exercise of the Option; with the consent of the Committee, (i) shares of
the Company's Common Stock owned by the Optionee duly endorsed for transfer, or
(ii) subject to the timing requirements of Section 4.4, shares of the Company's
Common Stock issuable to the Optionee upon exercise of the Option, having a Fair
Market Value at the date of Option exercise equal to the sums required to be
withheld, may be used to make all or part of such payment; and
(e) In the event the Option or portion shall be exercised pursuant to
Section 4.1 by any person or persons other than the Optionee, appropriate proof
of the right of such person or persons to exercise the Option.
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<PAGE>
Section 4.4. Certain Timing Requirements
Shares of the Company's Common Stock issuable to the Optionee upon exercise
of the Option may be used to satisfy the Option price or the tax withholding
consequences of such exercise only (i) during the period beginning on the third
(3rd) business day following the date of release of the quarterly or annual
summary statement of sales and earnings of the Company and ending on the twelfth
(12th) business day following such date or (ii) pursuant to an irrevocable
written election by the Optionee to use shares of the Company's Common Stock
issuable to the Optionee upon exercise of the Option to pay all or part of the
Option price or the withholding taxes (subject to the approval of the Committee)
made at least six (6) months prior to the payment of such Option price or
withholding taxes.
Section 4.5. Conditions to Issuance of Stock Certificates
The shares of stock deliverable upon the exercise of the Option, or any
portion thereof, may be either previously authorized but unissued shares or
issued shares which have then been reacquired by the Company. Such shares shall
be fully paid and nonassessable. The Company shall not be required to issue or
deliver any certificate or certificates for shares of stock purchased upon the
exercise of the Option or portion thereof prior to fulfillment of all of the
following conditions:
(a) The admission of such shares to listing on all stock exchanges on which
such class of stock is then listed; and
(b) The completion of any registration or other qualification of such
shares under any state or federal law or under rulings or regulations of the
Securities and Exchange Commission or of any other governmental regulatory body,
which the Committee or Board shall, in its absolute discretion, deem necessary
or advisable; and
(c) The obtaining of any approval or other clearance from any state or
federal governmental agency which the Committee or Board shall, in its absolute
discretion, determine to be necessary or advisable; and
(d) The receipt by the Company of full payment for such shares, including
payment of all amounts which, under federal, state or local tax law, it is
required to withhold upon exercise of the Option; and
(e) The receipt by the Company of representations from the Optionee to the
effect that, upon exercise of the Option, he will acquire the optioned shares
for his own account for investment and not with any intent or view to any
distribution, resale or other disposition of the optioned shares, and such
further representations and agreements as the Company may reasonably determine
to be necessary or appropriate to assure and to evidence compliance with the
requirements of the Act; and
(f) The lapse of such reasonable period of time following the exercise of
the Option as the Committee or Board may from time to time establish for reasons
of administrative convenience.
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Section 4.6. Registration of Shares
The Company may, in its discretion, file and maintain effective with the
Securities and Exchange Commission a Registration Statement on Form S-8 under
the Securities Act of 1933, as amended (the "Act"), covering the sale of the
optioned shares to Optionee upon exercise of the Option.
Section 4.7. Rights as Shareholder
The holder of the Option shall not be, nor have any of the rights or
privileges of, a shareholder of the Company in respect of any shares purchasable
upon the exercise of any part of the Option unless and until certificates
representing such shares shall have been issued by the Company to such holder.
ARTICLE V.
OTHER PROVISIONS
Section 5.1. Administration
The Committee shall have the power to interpret this Agreement and to adopt
such rules for the administration, interpretation and application of this
Agreement as are consistent therewith and to interpret or revoke any such rules.
All actions taken and all interpretations and determinations made by the
Committee in good faith shall be final and binding upon the Optionee, the
Company and all other interested persons. No member of the Committee shall be
personally liable for any action, determination or interpretation made in good
faith with respect to this Agreement. In its absolute discretion, the Board may
at any time and from time to time exercise any and all rights and duties of the
Committee under this Agreement except with respect to matters which under Rule
16b-3 or Section 162(m) of the Code, or any regulations or rules issued
thereunder, are required to be determined in the sole discretion of the
Committee.
Section 5.2. Option Not Transferable
Neither the Option nor any interest or right therein or part thereof shall
be liable for the debts, contracts or engagements of the Optionee or his
successors in interest or shall be subject to disposition by transfer,
alienation, anticipation, pledge, encumbrance, assignment or any other means
whether such disposition be voluntary or involuntary or by operation of law by
judgment, levy, attachment, garnishment or any other legal or equitable
proceedings (including bankruptcy), and any attempted disposition thereof shall
be null and void and of no effect; provided, however, that this Section 5.2
shall not prevent transfers by will or by the applicable laws of descent and
distribution.
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<PAGE>
Section 5.3. Shares to Be Reserved
The Company shall at all times during the term of the Option reserve and
keep available such number of shares of stock as will be sufficient to satisfy
the requirements of this Agreement.
Section 5.4. Notices
Any notice to be given under the terms of this Agreement to the Company
shall be addressed to the Company in care of its Secretary, and any notice to be
given to the Optionee shall be addressed to him at the address given beneath his
signature hereto. By a notice given pursuant to this Section 5.4, either party
may hereafter designate a different address for notices to be given to him. Any
notice which is required to be given to the Optionee shall, if the Optionee is
then deceased, be given to the Optionee's personal representative if such
representative has previously informed the Company of his status and address by
written notice under this Section 5.4. Any notice shall be deemed duly given
when enclosed in a properly sealed envelope or wrapper addressed as aforesaid,
deposited (with postage prepaid) in a post office or branch post office
regularly maintained by the United States Postal Service.
Section 5.5. Titles
Titles are provided herein for convenience only and are not to serve as a
basis for interpretation or construction of this Agreement.
Section 5.6. Construction
This Agreement shall be administered, interpreted and enforced under the
laws of the State of Colorado.
Section 5.7. Conformity to Securities Laws
The Optionee acknowledges that this Agreement is intended to conform to the
extent necessary with all provisions of the Securities Act and the Exchange Act
and any and all regulations and rules promulgated by the Securities and Exchange
Commission thereunder, including without limitation Rule 16b-3. Notwithstanding
anything herein to the contrary, this Agreement shall be administered, and the
Option is granted and may be exercised, only in such a manner as to conform to
such laws, rules and regulations. To the extent permitted by applicable law,
this Agreement shall be deemed amended to the extent necessary to conform to
such laws, rules and regulations.
11
<PAGE>
IN WITNESS WHEREOF, this Agreement has been executed and delivered by the
parties hereto.
THE SPECTRANETICS CORPORATION
By /s/ Joseph A. Largey
______________________________
President
By /s/ James P. McCluskey
______________________________
Secretary
/s/ Joseph A. Largey
______________________________
Optionee
______________________________
______________________________
Address
Optionee's Taxpayer
Identification Number:
______________________________
12
Exhibit 4(d)
<PAGE>
NON-QUALIFIED STOCK OPTION AGREEMENT
(for Executive Officers)
THIS AGREEMENT, dated ____________, 199_, is made by and between The
Spectranetics Corporation, a Delaware corporation hereinafter referred to as the
"Company," and _________________________, an employee of the Company or a
Subsidiary of the Company, hereinafter referred to as "Employee":
WHEREAS, the Company wishes to afford the Employee the opportunity to
purchase shares of its $0.001 par value Common Stock; and
WHEREAS, the Company wishes to carry out the Plan (the terms of which are
hereby incorporated by reference and made a part of this Agreement); and
WHEREAS, the Committee, appointed to administer the Plan, has determined
that it would be to the advantage and best interest of the Company and its
shareholders to grant the non-qualified stock option provided for herein to the
Employee as an inducement to enter into or remain in the service of the Company
or its Subsidiaries and as an incentive for increased efforts during such
service, and has advised the Company thereof and instructed the undersigned
officers to issue said Option;
NOW, THEREFORE, in consideration of the mutual covenants herein contained
and other good and valuable consideration, receipt of which is hereby
acknowledged, the parties hereto do hereby agree as follows:
ARTICLE I.
DEFINITIONS
Whenever the following terms are used in this Agreement, they shall have
the meaning specified below unless the context clearly indicates to the
contrary. The masculine pronoun shall include the feminine and neuter, and the
singular the plural, where the context so indicates. All capitalized terms used
herein without definition shall have the meanings ascribed to such terms in the
Plan.
Section 1.1. Board
"Board" shall mean the Board of Directors of the Company.
Section 1.2. Code
"Code" shall mean the Internal Revenue Code of 1986, as amended.
Section 1.3. Committee
"Committee" shall mean the Compensation Committee of the Board, or another
committee of the Board, appointed as provided in Section 8.1 of the Plan.
Section 1.4. Company
"Company" shall mean The Spectranetics Corporation, a Delaware corporation.
<PAGE>
Section 1.5. Constructive Termination
"Constructive Termination" shall mean (i) any material change in the
nature, or material diminution in the status, of Employee's duties to or
position with the Company; (ii) reduction of Employee's annual base salary as in
effect on the date of a Change in Control or Corporate Transaction; (iii)
relocation of Employee's principal place of employment to any place more than 35
miles from the office Employee theretofore regularly occupied or (iv)
termination of Employee's employment by the Company for reasons other than (a)
willful misfeasance or willful nonfeasance of duty or breach of trust by
Employee, of which Employee is specifically notified in writing by the Company
or (b) conviction of a felony or misdemeanor by a court of competent
jurisdiction resulting in imprisonment for a period of more than 30 days.
Section 1.6. Exchange Act
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended.
Section 1.7. Option
"Option" shall mean the non-qualified option to purchase Common Stock of
the Company granted under this Agreement.
Section 1.8. Plan
"Plan" shall mean The 1997 Equity Participation Plan of The Spectranetics
Corporation.
Section 1.9. Rule 16b-3
"Rule 16b-3" shall mean that certain Rule 16b-3 under the Exchange Act, as
such Rule may be amended from time to time.
Section 1.10. Secretary
"Secretary" shall mean the Secretary of the Company.
Section 1.11. Securities Act
"Securities Act" shall mean the Securities Act of 1933, as amended.
Section 1.12. Subsidiary
"Subsidiary" shall mean any corporation in an unbroken chain of
corporations beginning with the Company if each of the corporations other than
the last corporation in the unbroken chain then owns stock possessing fifty
percent (50%) or more of the total combined voting power of all classes of stock
in one (1) of the other corporations in such chain.
Section 1.13. Termination of Employment
"Termination of Employment" shall mean the time when the employee-employer
relationship between the Employee and the Company or any Subsidiary is
terminated for any reason, with or without cause, including, but not by way of
limitation, a termination by resignation, discharge, death,
2
<PAGE>
disability or retirement; but excluding (i) terminations where there is a
simultaneous reemployment or continuing employment of the Employee by the
Company or any Subsidiary, (ii) at the discretion of the Committee, terminations
which result in a temporary severance of the employee-employer relationship and
(iii) at the discretion of the Committee, terminations which are followed by the
simultaneous establishment of a consulting relationship by the Company or a
Subsidiary with the former employee. The Committee, in its absolute discretion,
shall determine the effect of all matters and questions relating to Termination
of Employment, including, but not by way of limitation, the question of whether
a Termination of Employment resulted from a discharge for good cause, and all
questions of whether particular leaves of absence constitute Terminations of
Employment. Notwithstanding any other provision of this Agreement or of the
Plan, the Company or any Subsidiary has an absolute and unrestricted right to
terminate the Employee's employment at any time for any reason whatsoever, with
or without cause, except to the extent expressly provided otherwise in writing.
ARTICLE II.
GRANT OF OPTION
Section 2.1. Grant of Option
In consideration of the Employee's agreement to remain in the employ of the
Company or its Subsidiaries and for other good and valuable consideration, on
the date hereof the Company irrevocably grants to the Employee the option to
purchase any part or all of an aggregate of ________ shares of its $0.001 par
value Common Stock upon the terms and conditions set forth in this Agreement.
Section 2.2. Purchase Price
The purchase price of the shares of stock covered by the Option shall be
$_____ per share without commission or other charge.
Section 2.3. Consideration
In consideration of the granting of this Option by the Company, the
Employee agrees to render faithful and efficient services to the Company or a
Subsidiary, with such duties and responsibilities as the Company shall from time
to time prescribe, for a period of at least one (1) year from the date this
Option is granted. Nothing in this Agreement or in the Plan shall confer upon
the Employee any right to continue in the employ of the Company or any
Subsidiary, or as a director of the Company, or shall interfere with or restrict
in any way the rights of the Company and its Subsidiaries, which are hereby
expressly reserved, to discharge the Employee at any time for any reason
whatsoever, with or without cause.
Section 2.4. Adjustments in Option
The Committee shall make adjustments with respect to the Option in
accordance with the provisions of Section 9.3 of the Plan.
3
<PAGE>
ARTICLE III.
PERIOD OF EXERCISABILITY
Section 3.1. Commencement of Exercisability
(a) Subject to subsection (b) and Sections 3.4 and 5.6, the Option shall
become exercisable in cumulative installments as follows:
(i) Twenty-five percent (25%) of the total number of shares covered by
the Option shall become exercisable on the first anniversary of the date
the Option is granted; and
(ii) Thereafter, an additional six and one-quarter percent (6.25%) of
the total number of shares shall become exercisable every third month on
the day of the month that the option was granted.
(b) No portion of the Option which is unexercisable at Termination of
Employment shall thereafter become exercisable.
Section 3.2. Duration of Exercisability
The installments provided for in Section 3.1 are cumulative. Each such
installment which becomes exercisable pursuant to Section 3.1 shall remain
exercisable until it becomes unexercisable under Section 3.3.
Section 3.3. Expiration of Option
The Option may not be exercised to any extent by anyone after the first to
occur of the following events:
(a) The expiration of ten (10) years from the date the Option was granted;
or
(b) The expiration of three (3) months from the date of the Employee's
Termination of Employment unless such Termination of Employment results from his
death, retirement or disability (within the meaning of Section 22(e)(3) of the
Code); or
(c) The expiration of one (1) year from the date of the Employee's
Termination of Employment by reason of his death, retirement or disability
(within the meaning of Section 22(e)(3) of the Code)[; or]
(d) The effective date of either the merger or consolidation of the Company
with or into another corporation, or the exchange of all or substantially all of
the assets of the Company for the securities of another corporation, or the
acquisition by another corporation or person of all or substantially all of the
Company's assets or fifty percent (50%) or more of the Company's then
outstanding voting stock, or the liquidation or dissolution of the Company,
unless the Option is, in connection with such transaction, to be assumed by the
successor or survivor corporation (or a parent or subsidiary thereof) or unless
the Committee waives this provision in connection with such transaction. At
least ten (10) days prior to the effective date of such merger, consolidation,
exchange, acquisition, liquidation or dissolution, the Committee shall give the
Employee notice of such event if the Option has then neither been fully
exercised nor become unexercisable under this Section 3.3.
4
<PAGE>
Section 3.4. Acceleration of Exercisability
Notwithstanding the foregoing Section 3.1,
(a) In the event of any Change in Control or Corporate Transaction, the
Option shall, immediately prior to the effective date of the Change in Control
or Corporate Transaction, automatically become fully exercisable for all of the
shares of Common Stock at the time subject to the Option, and may be exercised
for any or all of those shares as fully-vested shares of Common Stock; provided,
however, that, if and to the extent the Option is, in connection with the Change
in Control or Corporate Transaction, either to be assumed by the successor or
survivor corporation (or parent thereof) or to be replaced with a comparable
right with respect to shares of the capital stock of the successor or survivor
corporation (or parent thereof), the Option shall, immediately prior to the
effective date of the Change in Control or Corporate Transaction, automatically
become immediately exercisable for fifty percent (50%) of the unvested shares of
Common Stock at the time subject to the Option. The remaining unvested shares of
Common Stock at the time subject to the Option shall vest according to the
schedule set forth in Section 3.1 above.
(b) In the event of any Constructive Termination of the Employee within one
(1) year of a Change in Control or Corporate Transaction, the Option shall
automatically become fully exercisable for all of the shares of Common Stock at
the time subject to the Option, and may be exercised for any or all of those
shares as fully-vested shares of Common Stock.
(c) The Committee may make such determinations and adopt such rules and
conditions as it, in its absolute discretion, deems appropriate in connection
with such acceleration of exercisability, including, but not by way of
limitation, provisions to ensure that any such acceleration and resulting
exercise shall be conditioned upon the consummation of the contemplated
corporate transaction, and determinations regarding whether provisions for
assumption or substitution have been made as referenced in subsection (a) above.
ARTICLE IV.
EXERCISE OF OPTION
Section 4.1. Person Eligible to Exercise
During the lifetime of the Employee, only he may exercise the Option or any
portion thereof. After the death of the Employee, any exercisable portion of the
Option may, prior to the time when the Option becomes unexercisable under
Section 3.3, be exercised by his personal representative or by any person
empowered to do so under the deceased Employee's will or under the then
applicable laws of descent and distribution.
Section 4.2. Partial Exercise
Any exercisable portion of the Option or the entire Option, if then wholly
exercisable, may be exercised in whole or in part at any time prior to the time
when the Option or portion thereof becomes unexercisable under Section 3.3;
provided, however, that each partial exercise shall be for not less than one
hundred (100) shares (or the minimum installment set forth in Section 3.1, if a
smaller number of shares) and shall be for whole shares only.
5
<PAGE>
Section 4.3. Manner of Exercise
The Option, or any exercisable portion thereof, may be exercised solely by
delivery to the Secretary or his office of all of the following prior to the
time when the Option or such portion becomes unexercisable under Section 3.3:
(a) A written notice complying with the applicable rules established by the
Committee stating that the Option, or a portion thereof, is exercised. The
notice shall be signed by the Employee or other person then entitled to exercise
the Option or such portion; and
(b)
(i) Full cash payment to the Secretary of the Company for the shares
with respect to which such Option or portion is exercised; or
(ii) With the consent of the Committee, (A) shares of the Company's
Common Stock owned by the Employee, duly endorsed for transfer to the
Company, with a Fair Market Value on the date of delivery equal to the
aggregate exercise price of the Option or exercised portion thereof, or (B)
shares of the Company's Common Stock issuable to the Employee upon exercise
of the Option, with a Fair Market Value on the date of exercise of the
Option or any portion thereof equal to the aggregate exercise price of the
Option or exercised portion thereof; or
(iii) With the consent of the Committee, a full recourse promissory
note bearing interest (at no less than such rate as shall then preclude the
imputation of interest under the Code or successor provision) and payable
upon such terms as may be prescribed by the Committee. The Committee may
also prescribe the form of such note and the security to be given for such
note. The Option may not be exercised, however, by delivery of a promissory
note or by a loan from the Company when or where such loan or other
extension of credit is prohibited by law; or
(iv) With the consent of the Committee, property of any kind which
constitutes good and valuable consideration; or
(v) With the consent of the Committee, a notice that the Employee has
placed a market sell order with a broker with respect to shares of the
Company's Common Stock then issuable upon exercise of the Option, and that
the broker has been directed to pay a sufficient portion of the net
proceeds of the sale to the Company in satisfaction of the Option exercise
price; or
(vi) With the consent of the Committee, any combination of the
consideration provided in the foregoing subparagraphs (i), (ii), (iii),
(iv) and (v); and
(c) A bona fide written representation and agreement, in a form
satisfactory to the Committee, signed by the Employee or other person then
entitled to exercise such Option or portion, stating that the shares of stock
are being acquired for his own account, for investment and without any present
intention of distributing or reselling said shares or any of them except as may
be permitted under the Securities Act and then applicable rules and regulations
thereunder, and that the Employee or other person then entitled to exercise such
Option or portion will indemnify the Company against and hold it free and
harmless from any loss, damage, expense or liability resulting to the Company if
any sale or distribution of
6
<PAGE>
the shares by such person is contrary to the representation and agreement
referred to above. The Committee may, in its absolute discretion, take whatever
additional actions it deems appropriate to insure the observance and performance
of such representation and agreement and to effect compliance with the
Securities Act and any other federal or state securities laws or regulations.
Without limiting the generality of the foregoing, the Committee may require an
opinion of counsel acceptable to it to the effect that any subsequent transfer
of shares acquired on an Option exercise does not violate the Securities Act,
and may issue stop-transfer orders covering such shares. Share certificates
evidencing stock issued on exercise of this Option shall bear an appropriate
legend referring to the provisions of this subsection (c) and the agreements
herein. The written representation and agreement referred to in the first
sentence of this subsection (c) shall, however, not be required if the shares to
be issued pursuant to such exercise have been registered under the Securities
Act, and such registration is then effective in respect of such shares; and
(d) Full payment to the Company (or other employer corporation) of all
amounts which, under federal, state or local tax law, it is required to withhold
upon exercise of the Option; with the consent of the Committee, (i) shares of
the Company's Common Stock owned by the Employee, duly endorsed for transfer,
with a Fair Market Value on the date of delivery equal to the sums required to
be withheld, or (ii) shares of the Company's Common Stock issuable to the
Employee upon exercise of the Option with a Fair Market Value on the date of
exercise of the Option or any portion thereof equal to the sums required to be
withheld, may be used to make all or part of such payment; and
(e) In the event the Option or portion shall be exercised pursuant to
Section 4.1 by any person or persons other than the Employee, appropriate proof
of the right of such person or persons to exercise the Option.
Section 4.4. Conditions to Issuance of Stock Certificates
The shares of stock deliverable upon the exercise of the Option, or any
portion thereof, may be either previously authorized but unissued shares or
issued shares which have then been reacquired by the Company. Such shares shall
be fully paid and nonassessable. The Company shall not be required to issue or
deliver any certificate or certificates for shares of stock purchased upon the
exercise of the Option or portion thereof prior to fulfillment of all of the
following conditions:
(a) The admission of such shares to listing on all stock exchanges on which
such class of stock is then listed; and
(b) The completion of any registration or other qualification of such
shares under any state or federal law or under rulings or regulations of the
Securities and Exchange Commission or of any other governmental regulatory body,
which the Committee shall, in its absolute discretion, deem necessary or
advisable; and
(c) The obtaining of any approval or other clearance from any state or
federal governmental agency which the Committee shall, in its absolute
discretion, determine to be necessary or advisable; and
(d) The receipt by the Company of full payment for such shares, including
payment of all amounts which, under federal, state or local tax law, the Company
(or other employer corporation) is required to withhold upon exercise of the
Option; and
7
<PAGE>
(e) The lapse of such reasonable period of time following the exercise of
the Option as the Committee may from time to time establish for reasons of
administrative convenience.
Section 4.5. Rights as Shareholder
The Employee shall not be, nor have any of the rights or privileges of, a
shareholder of the Company in respect of any shares purchasable upon the
exercise of any part of the Option unless and until certificates representing
such shares shall have been issued by the Company to such Employee.
ARTICLE V.
OTHER PROVISIONS
Section 5.1. Administration
The Committee shall have the power to interpret the Plan and this Agreement
and to adopt such rules for the administration, interpretation and application
of the Plan as are consistent therewith and to interpret, amend or revoke any
such rules. All actions taken and all interpretations and determinations made by
the Committee in good faith shall be final and binding upon the Employee, the
Company and all other interested persons. No member of the Committee shall be
personally liable for any action, determination or interpretation made in good
faith with respect to the Plan or the Option. In its absolute discretion, the
Board may at any time and from time to time exercise any and all rights and
duties of the Committee under the Plan and this Agreement except with respect to
matters which under Rule 16b-3 or Section 162(m) of the Code, or any regulations
or rules issued thereunder, are required to be determined in the sole discretion
of the Committee.
Section 5.2. Option Not Transferable
Neither the Option nor any interest or right therein or part thereof shall
be sold, pledged, assigned, or transferred in any manner other than by will or
the laws of descent and distribution, unless and until such Option has been
exercised, or the shares underlying such Option have been issued, and all
restrictions applicable to such shares have lapsed. Neither the Option nor any
interest or right therein or part thereof shall be liable for the debts,
contracts or engagements of the Employee or his successors in interest or shall
be subject to disposition by transfer, alienation, anticipation, pledge,
encumbrance, assignment or any other means whether such disposition be voluntary
or involuntary or by operation of law by judgment, levy, attachment, garnishment
or any other legal or equitable proceedings (including bankruptcy), and any
attempted disposition thereof shall be null and void and of no effect, except to
the extent that such disposition is permitted by the preceding sentence.
Section 5.3. Shares to Be Reserved
The Company shall at all times during the term of the Option reserve and
keep available such number of shares of stock as will be sufficient to satisfy
the requirements of this Agreement.
Section 5.4. Notices
Any notice to be given under the terms of this Agreement to the Company
shall be addressed to the Company in care of its Secretary, and any notice to be
given to the Employee shall be addressed to him at the address given beneath his
signature hereto. By a notice given pursuant to this Section 5.4, either party
may hereafter designate a different address for notices to be given to him. Any
8
<PAGE>
notice which is required to be given to the Employee shall, if the Employee is
then deceased, be given to the Employee's personal representative if such
representative has previously informed the Company of his status and address by
written notice under this Section 5.4. Any notice shall be deemed duly given
when enclosed in a properly sealed envelope or wrapper addressed as aforesaid,
deposited (with postage prepaid) in a post office or branch post office
regularly maintained by the United States Postal Service; provided, however,
that any notice to be given by the Employee relating to the exercise of the
Option or any portion thereof shall be deemed duly given upon receipt by the
Secretary or his office.
Section 5.5. Titles
Titles are provided herein for convenience only and are not to serve as a
basis for interpretation or construction of this Agreement.
Section 5.6. Shareholder Approval
The Plan will be submitted for approval by the Company's shareholders
within twelve (12) months after the date the Plan was initially adopted by the
Board. This Option may not be exercised to any extent by anyone prior to the
time when the Plan is approved by the shareholders, and if such approval has not
been obtained by the end of said twelve-month period, this Option shall
thereupon be cancelled and become null and void.
Section 5.7. Construction
This Agreement shall be administered, interpreted and enforced under the
internal laws of the State of Colorado without regard to conflicts of laws
thereof.
Section 5.8. Conformity to Securities Laws
The Employee acknowledges that the Plan is intended to conform to the
extent necessary with all provisions of the Securities Act and the Exchange Act
and any and all regulations and rules promulgated by the Securities and Exchange
Commission thereunder, including, without limitation, the applicable exemptive
conditions of Rule 16b-3. Notwithstanding anything herein to the contrary, the
Plan shall be administered, and the Option is granted and may be exercised, only
in such a manner as to conform to such laws, rules and regulations. To the
extent permitted by applicable law, the Plan and this Agreement shall be deemed
amended to the extent necessary to conform to such laws, rules and regulations.
Section 5.9. Amendments
This Agreement and the Plan may be amended without the consent of the
Employee provided that such amendment would not impair any rights of the
Employee under this Agreement. No amendment of this Agreement shall, without the
consent of the Employee, impair any rights of the Employee under this Agreement.
9
<PAGE>
IN WITNESS WHEREOF, this Agreement has been executed and delivered by the
parties hereto.
THE SPECTRANETICS CORPORATION
By ___________________________
Name:
Title:
_______________________________
Employee
_______________________________
_______________________________
_______________________________
Address
Employee's Taxpayer
Identification Number:
_______________________________
10
Exhibit 4(e)
<PAGE>
NON-QUALIFIED STOCK OPTION AGREEMENT
THIS AGREEMENT, dated ____________, 199_, is made by and between The
Spectranetics Corporation, a Delaware corporation hereinafter referred to as the
"Company," and _________________________, an employee of the Company or a
Subsidiary of the Company, hereinafter referred to as "Employee":
WHEREAS, the Company wishes to afford the Employee the opportunity to
purchase shares of its $0.001 par value Common Stock; and
WHEREAS, the Company wishes to carry out the Plan (the terms of which are
hereby incorporated by reference and made a part of this Agreement); and
WHEREAS, the Committee, appointed to administer the Plan, has determined
that it would be to the advantage and best interest of the Company and its
shareholders to grant the non-qualified stock option provided for herein to the
Employee as an inducement to enter into or remain in the service of the Company
or its Subsidiaries and as an incentive for increased efforts during such
service, and has advised the Company thereof and instructed the undersigned
officers to issue said Option;
NOW, THEREFORE, in consideration of the mutual covenants herein contained
and other good and valuable consideration, receipt of which is hereby
acknowledged, the parties hereto do hereby agree as follows:
ARTICLE I.
DEFINITIONS
Whenever the following terms are used in this Agreement, they shall have
the meaning specified below unless the context clearly indicates to the
contrary. The masculine pronoun shall include the feminine and neuter, and the
singular the plural, where the context so indicates. All capitalized terms used
herein without definition shall have the meanings ascribed to such terms in the
Plan.
Section 1.1. Board
"Board" shall mean the Board of Directors of the Company.
Section 1.2. Code
"Code" shall mean the Internal Revenue Code of 1986, as amended.
Section 1.3. Committee
"Committee" shall mean the Compensation Committee of the Board, or another
committee of the Board, appointed as provided in Section 8.1 of the Plan.
<PAGE>
Section 1.4. Company
"Company" shall mean The Spectranetics Corporation, a Delaware corporation.
Section 1.5. Exchange Act
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended.
Section 1.6. Option
"Option" shall mean the non-qualified option to purchase Common Stock of
the Company granted under this Agreement.
Section 1.7. Plan
"Plan" shall mean The 1997 Equity Participation Plan of The Spectranetics
Corporation.
Section 1.8. Rule 16b-3
"Rule 16b-3" shall mean that certain Rule 16b-3 under the Exchange Act, as
such Rule may be amended from time to time.
Section 1.9. Secretary
"Secretary" shall mean the Secretary of the Company.
Section 1.10. Securities Act
"Securities Act" shall mean the Securities Act of 1933, as amended.
Section 1.11. Subsidiary
"Subsidiary" shall mean any corporation in an unbroken chain of
corporations beginning with the Company if each of the corporations other than
the last corporation in the unbroken chain then owns stock possessing fifty
percent (50%) or more of the total combined voting power of all classes of stock
in one (1) of the other corporations in such chain.
Section 1.12. Termination of Employment
"Termination of Employment" shall mean the time when the employee-employer
relationship between the Employee and the Company or any Subsidiary is
terminated for any reason, with or without cause, including, but not by way of
limitation, a termination by resignation, discharge, death, disability or
retirement; but excluding (i) terminations where there is a simultaneous
reemployment or continuing employment of the Employee by the Company or any
Subsidiary, (ii) at the discretion of the Committee, terminations which result
in a temporary severance of the employee-employer relationship and (iii) at the
discretion of the Committee, terminations which are followed by the simultaneous
establishment of a consulting relationship by
2
<PAGE>
the Company or a Subsidiary with the former employee. The Committee, in its
absolute discretion, shall determine the effect of all matters and questions
relating to Termination of Employment, including, but not by way of limitation,
the question of whether a Termination of Employment resulted from a discharge
for good cause, and all questions of whether particular leaves of absence
constitute Terminations of Employment. Notwithstanding any other provision of
this Agreement or of the Plan, the Company or any Subsidiary has an absolute and
unrestricted right to terminate the Employee's employment at any time for any
reason whatsoever, with or without cause, except to the extent expressly
provided otherwise in writing.
ARTICLE II.
GRANT OF OPTION
Section 2.1. Grant of Option
In consideration of the Employee's agreement to remain in the employ of the
Company or its Subsidiaries and for other good and valuable consideration, on
the date hereof the Company irrevocably grants to the Employee the option to
purchase any part or all of an aggregate of ________ shares of its $0.001 par
value Common Stock upon the terms and conditions set forth in this Agreement.
Section 2.2. Purchase Price
The purchase price of the shares of stock covered by the Option shall be
$_____ per share without commission or other charge.
Section 2.3. Consideration
In consideration of the granting of this Option by the Company, the
Employee agrees to render faithful and efficient services to the Company or a
Subsidiary, with such duties and responsibilities as the Company shall from time
to time prescribe, for a period of at least one (1) year from the date this
Option is granted. Nothing in this Agreement or in the Plan shall confer upon
the Employee any right to continue in the employ of the Company or any
Subsidiary, or as a director of the Company, or shall interfere with or restrict
in any way the rights of the Company and its Subsidiaries, which are hereby
expressly reserved, to discharge the Employee at any time for any reason
whatsoever, with or without cause.
Section 2.4. Adjustments in Option
The Committee shall make adjustments with respect to the Option in
accordance with the provisions of Section 9.3 of the Plan.
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<PAGE>
ARTICLE III.
PERIOD OF EXERCISABILITY
Section 3.1. Commencement of Exercisability
(a) Subject to subsection (b) and Sections 3.4 and 5.6, the Option shall
become exercisable in cumulative installments as follows:
(i) Twenty-five percent (25%) of the total number of shares covered by
the Option shall become exercisable on the first anniversary of the date
the Option is granted; and
(ii) An additional six and one-quarter percent (6.25%) of the total
number of shares shall become exercisable at the end of each subsequent
calendar quarter.
(b) No portion of the Option which is unexercisable at Termination of
Employment shall thereafter become exercisable.
Section 3.2. Duration of Exercisability
The installments provided for in Section 3.1 are cumulative. Each such
installment which becomes exercisable pursuant to Section 3.1 shall remain
exercisable until it becomes unexercisable under Section 3.3.
Section 3.3. Expiration of Option
The Option may not be exercised to any extent by anyone after the first to
occur of the following events:
(a) The expiration of ten (10) years from the date the Option was granted;
or
(b) The expiration of three (3) months from the date of the Employee's
Termination of Employment unless such Termination of Employment results from his
death or disability (within the meaning of Section 22(e)(3) of the Code); or
(c) The expiration of one (1) year from the date of the Employee's
Termination of Employment by reason of his death or disability (within the
meaning of Section 22(e)(3) of the Code); or
Section 3.4. Acceleration of Exercisability
(a) Notwithstanding the foregoing Section 3.1, in the event of any Change
in Control or Corporate Transaction, the Option shall, immediately prior to the
effective date of the Change in Control or Corporate Transaction, automatically
become fully exercisable for all of the shares of Common Stock at the time
subject to the Option, and may be exercised for any or all of those shares as
fully-vested shares of Common Stock. However, the Option shall not so
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accelerate if and to the extent the Option is, in connection with the Change in
Control or Corporate Transaction, either to be assumed by the successor or
survivor corporation (or parent thereof) or to be replaced with a comparable
right with respect to shares of the capital stock of the successor or survivor
corporation (or parent thereof).
(b) The Committee may make such determinations and adopt such rules and
conditions as it, in its absolute discretion, deems appropriate in connection
with such acceleration of exercisability, including, but not by way of
limitation, provisions to ensure that any such acceleration and resulting
exercise shall be conditioned upon the consummation of the contemplated
corporate transaction, and determinations regarding whether provisions for
assumption or substitution have been made as referenced in subsection (a) above.
ARTICLE IV.
EXERCISE OF OPTION
Section 4.1. Person Eligible to Exercise
During the lifetime of the Employee, only he may exercise the Option or any
portion thereof. After the death of the Employee, any exercisable portion of the
Option may, prior to the time when the Option becomes unexercisable under
Section 3.3, be exercised by his personal representative or by any person
empowered to do so under the deceased Employee's will or under the then
applicable laws of descent and distribution.
Section 4.2. Partial Exercise
Any exercisable portion of the Option or the entire Option, if then wholly
exercisable, may be exercised in whole or in part at any time prior to the time
when the Option or portion thereof becomes unexercisable under Section 3.3;
provided, however, that each partial exercise shall be for not less than one
hundred (100) shares (or the minimum installment set forth in Section 3.1, if a
smaller number of shares) and shall be for whole shares only.
Section 4.3. Manner of Exercise
The Option, or any exercisable portion thereof, may be exercised solely by
delivery to the Secretary or his office of all of the following prior to the
time when the Option or such portion becomes unexercisable under Section 3.3:
(a) A written notice complying with the applicable rules established by the
Committee stating that the Option, or a portion thereof, is exercised. The
notice shall be signed by the Employee or other person then entitled to exercise
the Option or such portion; and
(b)
(i) Full cash payment to the Secretary of the Company for the shares
with respect to which such Option or portion is exercised; or
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<PAGE>
(ii) With the consent of the Committee, (A) shares of the Company's
Common Stock owned by the Employee, duly endorsed for transfer to the
Company, with a Fair Market Value on the date of delivery equal to the
aggregate exercise price of the Option or exercised portion thereof, or (B)
shares of the Company's Common Stock issuable to the Employee upon exercise
of the Option, with a Fair Market Value on the date of exercise of the
Option or any portion thereof equal to the aggregate exercise price of the
Option or exercised portion thereof; or
(iii) With the consent of the Committee, a full recourse promissory
note bearing interest (at no less than such rate as shall then preclude the
imputation of interest under the Code or successor provision) and payable
upon such terms as may be prescribed by the Committee. The Committee may
also prescribe the form of such note and the security to be given for such
note. The Option may not be exercised, however, by delivery of a promissory
note or by a loan from the Company when or where such loan or other
extension of credit is prohibited by law; or
(iv) With the consent of the Committee, property of any kind which
constitutes good and valuable consideration; or
(v) With the consent of the Committee, a notice that the Employee has
placed a market sell order with a broker with respect to shares of the
Company's Common Stock then issuable upon exercise of the Option, and that
the broker has been directed to pay a sufficient portion of the net
proceeds of the sale to the Company in satisfaction of the Option exercise
price; or
(vi) With the consent of the Committee, any combination of the
consideration provided in the foregoing subparagraphs (i), (ii), (iii),
(iv) and (v); and
(c) A bona fide written representation and agreement, in a form
satisfactory to the Committee, signed by the Employee or other person then
entitled to exercise such Option or portion, stating that the shares of stock
are being acquired for his own account, for investment and without any present
intention of distributing or reselling said shares or any of them except as may
be permitted under the Securities Act and then applicable rules and regulations
thereunder, and that the Employee or other person then entitled to exercise such
Option or portion will indemnify the Company against and hold it free and
harmless from any loss, damage, expense or liability resulting to the Company if
any sale or distribution of the shares by such person is contrary to the
representation and agreement referred to above. The Committee may, in its
absolute discretion, take whatever additional actions it deems appropriate to
insure the observance and performance of such representation and agreement and
to effect compliance with the Securities Act and any other federal or state
securities laws or regulations. Without limiting the generality of the
foregoing, the Committee may require an opinion of counsel acceptable to it to
the effect that any subsequent transfer of shares acquired on an Option exercise
does not violate the Securities Act, and may issue stop-transfer orders covering
such shares. Share certificates evidencing stock issued on exercise of this
Option shall bear an appropriate legend referring to the provisions of this
subsection (c) and the agreements herein. The written representation and
agreement referred to in the first sentence of this subsection (c) shall,
however,
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not be required if the shares to be issued pursuant to such exercise have been
registered under the Securities Act, and such registration is then effective in
respect of such shares; and
(d) Full payment to the Company (or other employer corporation) of all
amounts which, under federal, state or local tax law, it is required to withhold
upon exercise of the Option; with the consent of the Committee, (i) shares of
the Company's Common Stock owned by the Employee, duly endorsed for transfer,
with a Fair Market Value on the date of delivery equal to the sums required to
be withheld, or (ii) shares of the Company's Common Stock issuable to the
Employee upon exercise of the Option with a Fair Market Value on the date of
exercise of the Option or any portion thereof equal to the sums required to be
withheld, may be used to make all or part of such payment; and
(e) In the event the Option or portion shall be exercised pursuant to
Section 4.1 by any person or persons other than the Employee, appropriate proof
of the right of such person or persons to exercise the Option.
Section 4.4. Conditions to Issuance of Stock Certificates
The shares of stock deliverable upon the exercise of the Option, or any
portion thereof, may be either previously authorized but unissued shares or
issued shares which have then been reacquired by the Company. Such shares shall
be fully paid and nonassessable. The Company shall not be required to issue or
deliver any certificate or certificates for shares of stock purchased upon the
exercise of the Option or portion thereof prior to fulfillment of all of the
following conditions:
(a) The admission of such shares to listing on all stock exchanges on which
such class of stock is then listed; and
(b) The completion of any registration or other qualification of such
shares under any state or federal law or under rulings or regulations of the
Securities and Exchange Commission or of any other governmental regulatory body,
which the Committee shall, in its absolute discretion, deem necessary or
advisable; and
(c) The obtaining of any approval or other clearance from any state or
federal governmental agency which the Committee shall, in its absolute
discretion, determine to be necessary or advisable; and
(d) The receipt by the Company of full payment for such shares, including
payment of all amounts which, under federal, state or local tax law, the Company
(or other employer corporation) is required to withhold upon exercise of the
Option; and
(e) The lapse of such reasonable period of time following the exercise of
the Option as the Committee may from time to time establish for reasons of
administrative convenience.
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<PAGE>
Section 4.5. Rights as Shareholder
The Employee shall not be, nor have any of the rights or privileges of, a
shareholder of the Company in respect of any shares purchasable upon the
exercise of any part of the Option unless and until certificates representing
such shares shall have been issued by the Company to such Employee.
ARTICLE V.
OTHER PROVISIONS
Section 5.1. Administration
The Committee shall have the power to interpret the Plan and this Agreement
and to adopt such rules for the administration, interpretation and application
of the Plan as are consistent therewith and to interpret, amend or revoke any
such rules. All actions taken and all interpretations and determinations made by
the Committee in good faith shall be final and binding upon the Employee, the
Company and all other interested persons. No member of the Committee shall be
personally liable for any action, determination or interpretation made in good
faith with respect to the Plan or the Option. In its absolute discretion, the
Board may at any time and from time to time exercise any and all rights and
duties of the Committee under the Plan and this Agreement except with respect to
matters which under Rule 16b-3 or Section 162(m) of the Code, or any regulations
or rules issued thereunder, are required to be determined in the sole discretion
of the Committee.
Section 5.2. Option Not Transferable
Neither the Option nor any interest or right therein or part thereof shall
be sold, pledged, assigned, or transferred in any manner other than by will or
the laws of descent and distribution, unless and until such Option has been
exercised, or the shares underlying such Option have been issued, and all
restrictions applicable to such shares have lapsed. Neither the Option nor any
interest or right therein or part thereof shall be liable for the debts,
contracts or engagements of the Employee or his successors in interest or shall
be subject to disposition by transfer, alienation, anticipation, pledge,
encumbrance, assignment or any other means whether such disposition be voluntary
or involuntary or by operation of law by judgment, levy, attachment, garnishment
or any other legal or equitable proceedings (including bankruptcy), and any
attempted disposition thereof shall be null and void and of no effect, except to
the extent that such disposition is permitted by the preceding sentence.
Section 5.3. Shares to Be Reserved
The Company shall at all times during the term of the Option reserve and
keep available such number of shares of stock as will be sufficient to satisfy
the requirements of this Agreement.
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Section 5.4. Notices
Any notice to be given under the terms of this Agreement to the Company
shall be addressed to the Company in care of its Secretary, and any notice to be
given to the Employee shall be addressed to him at the address given beneath his
signature hereto. By a notice given pursuant to this Section 5.4, either party
may hereafter designate a different address for notices to be given to him. Any
notice which is required to be given to the Employee shall, if the Employee is
then deceased, be given to the Employee's personal representative if such
representative has previously informed the Company of his status and address by
written notice under this Section 5.4. Any notice shall be deemed duly given
when enclosed in a properly sealed envelope or wrapper addressed as aforesaid,
deposited (with postage prepaid) in a post office or branch post office
regularly maintained by the United States Postal Service; provided, however,
that any notice to be given by the Employee relating to the exercise of the
Option or any portion thereof shall be deemed duly given upon receipt by the
Secretary or his office.
Section 5.5. Titles
Titles are provided herein for convenience only and are not to serve as a
basis for interpretation or construction of this Agreement.
Section 5.6. Shareholder Approval
The Plan will be submitted for approval by the Company's shareholders
within twelve (12) months after the date the Plan was initially adopted by the
Board. This Option may not be exercised to any extent by anyone prior to the
time when the Plan is approved by the shareholders, and if such approval has not
been obtained by the end of said twelve-month period, this Option shall
thereupon be cancelled and become null and void.
Section 5.7. Construction
This Agreement shall be administered, interpreted and enforced under the
internal laws of the State of Colorado without regard to conflicts of laws
thereof.
Section 5.8. Conformity to Securities Laws
The Employee acknowledges that the Plan is intended to conform to the
extent necessary with all provisions of the Securities Act and the Exchange Act
and any and all regulations and rules promulgated by the Securities and Exchange
Commission thereunder, including, without limitation, the applicable exemptive
conditions of Rule 16b-3. Notwithstanding anything herein to the contrary, the
Plan shall be administered, and the Option is granted and may be exercised, only
in such a manner as to conform to such laws, rules and regulations. To the
extent permitted by applicable law, the Plan and this Agreement shall be deemed
amended to the extent necessary to conform to such laws, rules and regulations.
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Section 5.9. Amendments
This Agreement and the Plan may be amended without the consent of the
Employee provided that such amendment would not impair any rights of the
Employee under this Agreement. No amendment of this Agreement shall, without the
consent of the Employee, impair any rights of the Employee under this Agreement.
IN WITNESS WHEREOF, this Agreement has been executed and delivered by the
parties hereto.
THE SPECTRANETICS CORPORATION
By ___________________________
Name:
Title:
___________________________________
Employee
___________________________________
___________________________________
___________________________________
Address
Employee's Taxpayer
Identification Number:
___________________________________
10
Exhibit 4(f)
<PAGE>
NON-QUALIFIED STOCK OPTION AGREEMENT
FOR INDEPENDENT DIRECTORS
THIS AGREEMENT, dated ____________, 199_, is made by and between The
Spectranetics Corporation, a Delaware corporation hereinafter referred to as the
"Company," and _________________________, a member of the Board of Directors of
the Company who is not an officer or employee of the Company or a Subsidiary of
the Company, hereinafter referred to as the "Independent Director":
WHEREAS, the Company wishes to afford the Independent Director the
opportunity to purchase shares of its $0.001 par value Common Stock; and
WHEREAS, the Company wishes to carry out the Plan (the terms of which are
hereby incorporated by reference and made a part of this Agreement); and
WHEREAS, the Board has determined that it would be to the advantage and
best interest of the Company and its shareholders to grant the non-qualified
stock option provided for herein to the Independent Director as an inducement to
enter into or remain in the service of the Company or its Subsidiaries and as an
incentive for increased efforts during such service, and has advised the Company
thereof and instructed the undersigned officers to issue said Option;
NOW, THEREFORE, in consideration of the mutual covenants herein contained
and other good and valuable consideration, receipt of which is hereby
acknowledged, the parties hereto do hereby agree as follows:
ARTICLE I.
DEFINITIONS
Whenever the following terms are used in this Agreement, they shall have
the meaning specified below unless the context clearly indicates to the
contrary. The masculine pronoun shall include the feminine and neuter, and the
singular the plural, where the context so indicates. All capitalized terms used
herein without definition shall have the meanings ascribed to such terms in the
Plan.
Section 1.1. Board
"Board" shall mean the Board of Directors of the Company.
Section 1.2. Code
"Code" shall mean the Internal Revenue Code of 1986, as amended.
Section 1.3. Company
"Company" shall mean The Spectranetics Corporation, a Delaware corporation.
Section 1.4. Exchange Act
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended.
<PAGE>
Section 1.5. Option
"Option" shall mean the non-qualified option to purchase Common Stock of
the Company granted under this Agreement.
Section 1.6. Plan
"Plan" shall mean The 1997 Equity Participation Plan of The Spectranetics
Corporation.
Section 1.7. Rule 16b-3
"Rule 16b-3" shall mean that certain Rule 16b-3 under the Exchange Act, as
such Rule may be amended from time to time.
Section 1.8. Secretary
"Secretary" shall mean the Secretary of the Company.
Section 1.9. Securities Act
"Securities Act" shall mean the Securities Act of 1933, as amended.
Section 1.10. Subsidiary
"Subsidiary" shall mean any corporation in an unbroken chain of
corporations beginning with the Company if each of the corporations other than
the last corporation in the unbroken chain then owns stock possessing fifty
percent (50%) or more of the total combined voting power of all classes of stock
in one (1) of the other corporations in such chain.
Section 1.11. Termination of Directorship
"Termination of Directorship" shall mean the time when the Independent
Director ceases to be a Director for any reason, including, but not by way of
limitation, a termination by resignation, failure to be elected, death or
retirement. The Board, in its sole and absolute discretion, shall determine the
effect of all matters and questions relating to a Termination of Directorship.
ARTICLE II.
GRANT OF OPTION
Section 2.1. Grant of Option
In consideration of the Independent Director's agreement to serve as a
Director of the Company and for other good and valuable consideration, on the
date hereof the Company irrevocably grants to the Independent Director the
option to purchase any part or all of an aggregate of ________ shares of its
$0.001 par value Common Stock upon the terms and conditions set forth in this
Agreement.
Section 2.2. Purchase Price
The purchase price of the shares of stock covered by the Option shall be
$_____ per share without commission or other charge.
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Section 2.3. Consideration
In consideration of the granting of this Option by the Company, the
Independent Director agrees to serve as a Director of the Company until the next
annual meeting of stockholders of the Company. Nothing in this Agreement or in
the Plan shall confer upon the Independent Director any right to continue as a
director of the Company.
Section 2.4. Adjustments in Option
The Board shall make adjustments with respect to the Option in accordance
with the provisions of Section 9.3 of the Plan.
ARTICLE III.
PERIOD OF EXERCISABILITY
Section 3.1. Commencement of Exercisability
(a) Subject to subsection (b) and Section 5.6, the Option shall become
exercisable in installments as follows:
(i) Beginning on the first anniversary of the date of grant, up to 33%
of the shares covered by the Option;
(ii) Beginning on the second anniversary of the date of grant, up to
66% of such shares; and
(iii) Beginning on the third anniversary of the date of grant, up to
100% of such shares.
(b) Notwithstanding the foregoing, an Option held by an Independent
Director shall become immediately exercisable in full upon the death or
disability of such Independent Director, upon an unsuccessful attempt by such
Independent Director to win re-election to the Board after nomination for
election at the recommendation of the Board, or in the event of a Corporate
Transaction or Change of Control as provided in Section 3.3.
Section 3.2. Expiration of Option
The Option may not be exercised to any extent by anyone after the first to
occur of the following events:
(a) The expiration of three (3) years from the date of the Independent
Director's death;
(b) The expiration of three (3) years from the date of the Independent
Director's Termination of Directorship by reason of his permanent and total
disability (within the meaning of Section 22(e)(3) of the Code);
(c) The expiration of three (3) years from the date of the Independent
Director's retirement from the Board or an unsuccessful attempt to win
re-election to the Board after nomination for election at the recommendation of
the Board;
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(d) The expiration of twelve (12) months from the date of the Independent
Director's Termination of Directorship for any reason other than such
Independent Director's death, his permanent and total disability, retirement
from the Board or an unsuccessful attempt to win re-election to the Board after
nomination for election at the recommendation of the Board; or
(e) The expiration of ten (10) years from the date the Option was granted
[; or]
Section 3.3. Acceleration of Exercisability
(a) Notwithstanding the foregoing Section 3.2, in the event of any Change
in Control or Corporate Transaction, the Option shall, immediately prior to the
effective date of the Change in Control or Corporate Transaction, automatically
become fully exercisable for all of the shares of Common Stock at the time
subject to the Option, and may be exercised for any or all of those shares as
fully-vested shares of Common Stock.
(b) The Board may make such determinations and adopt such rules and
conditions as it, in its absolute discretion, deems appropriate in connection
with such acceleration of exercisability, including, but not by way of
limitation, provisions to ensure that any such acceleration and resulting
exercise shall be conditioned upon the consummation of the contemplated
corporate transaction.
ARTICLE IV.
EXERCISE OF OPTION
Section 4.1. Person Eligible to Exercise
During the lifetime of the Independent Director, only he may exercise the
Option or any portion thereof. After the death of the Independent Director, any
exercisable portion of the Option may, prior to the time when the Option becomes
unexercisable under Section 3.2, be exercised by his personal representative or
by any person empowered to do so under the deceased Independent Director's will
or under the then applicable laws of descent and distribution.
Section 4.2. Partial Exercise
Any exercisable portion of the Option or the entire Option, if then wholly
exercisable, may be exercised in whole or in part at any time prior to the time
when the Option or portion thereof becomes unexercisable under Section 3.2;
provided, however, that each partial exercise shall be for not less than one
hundred (100) shares (or the minimum installment set forth in Section 3.1, if a
smaller number of shares) and shall be for whole shares only.
Section 4.3. Manner of Exercise
The Option, or any exercisable portion thereof, may be exercised solely by
delivery to the Secretary or his office of all of the following prior to the
time when the Option or such portion becomes unexercisable under Section 3.2:
(a) A written notice complying with the applicable rules established by the
Board stating that the Option, or a portion thereof, is exercised. The notice
shall be signed by the Independent Director or other person then entitled to
exercise the Option or such portion; and
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(b)
(i) Full cash payment to the Secretary of the Company for the shares
with respect to which such Option or portion is exercised; or
(ii) With the consent of the Board, (A) shares of the Company's Common
Stock owned by the Independent Director, duly endorsed for transfer to the
Company, with a Fair Market Value on the date of delivery equal to the
aggregate exercise price of the Option or exercised portion thereof, or (B)
shares of the Company's Common Stock issuable to the Independent Director
upon exercise of the Option, with a Fair Market Value on the date of
exercise of the Option or any portion thereof equal to the aggregate
exercise price of the Option or exercised portion thereof; or
(iii) With the consent of the Board, a full recourse promissory note
bearing interest (at no less than such rate as shall then preclude the
imputation of interest under the Code or successor provision) and payable
upon such terms as may be prescribed by the Board. The Board may also
prescribe the form of such note and the security to be given for such note.
The Option may not be exercised, however, by delivery of a promissory note
or by a loan from the Company when or where such loan or other extension of
credit is prohibited by law; or
(iv) With the consent of the Board, property of any kind which
constitutes good and valuable consideration; or
(v) With the consent of the Board, a notice that the Independent
Director has placed a market sell order with a broker with respect to
shares of the Company's Common Stock then issuable upon exercise of the
Option, and that the broker has been directed to pay a sufficient portion
of the net proceeds of the sale to the Company in satisfaction of the
Option exercise price; or
(vi) With the consent of the Board, any combination of the
consideration provided in the foregoing subparagraphs (i), (ii), (iii),
(iv) and (v); and
(c) A bona fide written representation and agreement, in a form
satisfactory to the Board, signed by the Independent Director or other person
then entitled to exercise such Option or portion, stating that the shares of
stock are being acquired for his own account, for investment and without any
present intention of distributing or reselling said shares or any of them except
as may be permitted under the Securities Act and then applicable rules and
regulations thereunder, and that the Independent Director or other person then
entitled to exercise such Option or portion will indemnify the Company against
and hold it free and harmless from any loss, damage, expense or liability
resulting to the Company if any sale or distribution of the shares by such
person is contrary to the representation and agreement referred to above. The
Board may, in its absolute discretion, take whatever additional actions it deems
appropriate to insure the observance and performance of such representation and
agreement and to effect compliance with the Securities Act and any other federal
or state securities laws or regulations. Without limiting the generality of the
foregoing, the Board may require an opinion of counsel acceptable to it to the
effect that any subsequent transfer of shares acquired on an Option exercise
does not violate the Securities Act, and may issue stop-transfer orders covering
such shares. Share certificates evidencing stock issued on exercise of this
Option shall bear an appropriate legend referring to the provisions of this
subsection (c) and the agreements herein. The written representation and
agreement referred to in the first sentence of this subsection (c) shall,
however, not be required if the shares to be issued pursuant to such exercise
have been registered under the Securities Act, and such registration is then
effective in respect of such shares; and
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(d) Full payment to the Company (or other employer corporation) of all
amounts which, under federal, state or local tax law, it is required to withhold
upon exercise of the Option; with the consent of the Board, (i) shares of the
Company's Common Stock owned by the Independent Director, duly endorsed for
transfer, with a Fair Market Value on the date of delivery equal to the sums
required to be withheld, or (ii) shares of the Company's Common Stock issuable
to the Independent Director upon exercise of the Option with a Fair Market Value
on the date of exercise of the Option or any portion thereof equal to the sums
required to be withheld, may be used to make all or part of such payment; and
(e) In the event the Option or portion shall be exercised pursuant to
Section 4.1 by any person or persons other than the Independent Director,
appropriate proof of the right of such person or persons to exercise the Option.
Section 4.4. Conditions to Issuance of Stock Certificates
The shares of stock deliverable upon the exercise of the Option, or any
portion thereof, may be either previously authorized but unissued shares or
issued shares which have then been reacquired by the Company. Such shares shall
be fully paid and nonassessable. The Company shall not be required to issue or
deliver any certificate or certificates for shares of stock purchased upon the
exercise of the Option or portion thereof prior to fulfillment of all of the
following conditions:
(a) The admission of such shares to listing on all stock exchanges on which
such class of stock is then listed; and
(b) The completion of any registration or other qualification of such
shares under any state or federal law or under rulings or regulations of the
Securities and Exchange Commission or of any other governmental regulatory body,
which the Board shall, in its absolute discretion, deem necessary or advisable;
and
(c) The obtaining of any approval or other clearance from any state or
federal governmental agency which the Board shall, in its absolute discretion,
determine to be necessary or advisable; and
(d) The receipt by the Company of full payment for such shares, including
payment of all amounts which, under federal, state or local tax law, the Company
(or other employer corporation) is required to withhold upon exercise of the
Option; and
(e) The lapse of such reasonable period of time following the exercise of
the Option as the Board may from time to time establish for reasons of
administrative convenience.
Section 4.5. Rights as Shareholder
The Independent Director shall not be, nor have any of the rights or
privileges of, a shareholder of the Company in respect of any shares purchasable
upon the exercise of any part of the Option unless and until certificates
representing such shares shall have been issued by the Company to such
Independent Director.
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<PAGE>
ARTICLE V.
OTHER PROVISIONS
Section 5.1. Administration
The Board shall conduct the general administration of the Plan with respect
to the Option granted under this Agreement. All actions taken and all
interpretations and determinations made by the Board in good faith shall be
final and binding upon the Independent Director, the Company and all other
interested persons. No member of the Board shall be personally liable for any
action, determination or interpretation made in good faith with respect to the
Plan or the Option. In its absolute discretion, the Board may at any time and
from time to time exercise any and all rights and duties of the Board under the
Plan and this Agreement except with respect to matters which under Rule 16b-3 or
Section 162(m) of the Code, or any regulations or rules issued thereunder, are
required to be determined in the sole discretion of the Board.
Section 5.2. Option Not Transferable
Neither the Option nor any interest or right therein or part thereof shall
be sold, pledged, assigned, or transferred in any manner other than by will or
the laws of descent and distribution, unless and until such Option has been
exercised, or the shares underlying such Option have been issued, and all
restrictions applicable to such shares have lapsed. Neither the Option nor any
interest or right therein or part thereof shall be liable for the debts,
contracts or engagements of the Independent Director or his successors in
interest or shall be subject to disposition by transfer, alienation,
anticipation, pledge, encumbrance, assignment or any other means whether such
disposition be voluntary or involuntary or by operation of law by judgment,
levy, attachment, garnishment or any other legal or equitable proceedings
(including bankruptcy), and any attempted disposition thereof shall be null and
void and of no effect, except to the extent that such disposition is permitted
by the preceding sentence.
Section 5.3. Shares To Be Reserved
The Company shall at all times during the term of the Option reserve and
keep available such number of shares of stock as will be sufficient to satisfy
the requirements of this Agreement.
Section 5.4. Notices
Any notice to be given under the terms of this Agreement to the Company
shall be addressed to the Company in care of its Secretary, and any notice to be
given to the Independent Director shall be addressed to him at the address given
beneath his signature hereto. By a notice given pursuant to this Section 5.4,
either party may hereafter designate a different address for notices to be given
to him. Any notice which is required to be given to the Independent Director
shall, if the Independent Director is then deceased, be given to the Independent
Director's personal representative if such representative has previously
informed the Company of his status and address by written notice under this
Section 5.4. Any notice shall be deemed duly given when enclosed in a properly
sealed envelope or wrapper addressed as aforesaid, deposited (with postage
prepaid) in a post office or branch post office regularly maintained by the
United States Postal Service; provided, however, that any notice to be given by
the Independent Director relating to the exercise of the Option or any portion
thereof shall be deemed duly given upon receipt by the Secretary or his office.
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<PAGE>
Section 5.5. Titles
Titles are provided herein for convenience only and are not to serve as a
basis for interpretation or construction of this Agreement.
Section 5.6. Shareholder Approval
The Plan will be submitted for approval by the Company's shareholders
within twelve (12) months after the date the Plan was initially adopted by the
Board. This Option may not be exercised to any extent by anyone prior to the
time when the Plan is approved by the shareholders, and if such approval has not
been obtained by the end of said twelve-month period, this Option shall
thereupon be cancelled and become null and void.
Section 5.7. Construction
This Agreement shall be administered, interpreted and enforced under the
internal laws of the State of Colorado without regard to conflicts of laws
thereof.
Section 5.8. Conformity to Securities Laws
The Independent Director acknowledges that the Plan is intended to conform
to the extent necessary with all provisions of the Securities Act and the
Exchange Act and any and all regulations and rules promulgated by the Securities
and Exchange Commission thereunder, including, without limitation, the
applicable exemptive conditions of Rule 16b-3. Notwithstanding anything herein
to the contrary, the Plan shall be administered, and the Option is granted and
may be exercised, only in such a manner as to conform to such laws, rules and
regulations. To the extent permitted by applicable law, the Plan and this
Agreement shall be deemed amended to the extent necessary to conform to such
laws, rules and regulations.
Section 5.9. Amendments
This Agreement and the Plan may be amended without the consent of the
Independent Director provided that such amendment would not impair any rights of
the Independent Director under this Agreement. No amendment of this Agreement
shall, without the consent of the Independent Director, impair any rights of the
Independent Director under this Agreement.
IN WITNESS WHEREOF, this Agreement has been executed and delivered by the
parties hereto.
THE SPECTRANETICS CORPORATION
By ___________________________
Name:
Title:
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<PAGE>
________________________________________
Independent Director
________________________________________
________________________________________
________________________________________
Address
Independent Director's Taxpayer
Identification Number:
________________________________________
9
Exhibit 4(g)
<PAGE>
INCENTIVE STOCK OPTION AGREEMENT
(for Executive Officers)
THIS AGREEMENT, dated ____________, 199_, is made by and between The
Spectranetics Corporation, a Delaware corporation hereinafter referred to as the
"Company," and ____________________, an executive officer of the Company or a
Subsidiary of the Company, hereinafter referred to as "Employee":
WHEREAS, the Company wishes to afford the Employee the opportunity to
purchase shares of its $0.001 par value Common Stock; and
WHEREAS, the Company wishes to carry out the Plan (the terms of which are
hereby incorporated by reference and made a part of this Agreement); and
WHEREAS, the Committee, appointed to administer the Plan, has determined
that it would be to the advantage and best interest of the Company and its
shareholders to grant the Incentive Stock Option provided for herein to the
Employee as an inducement to enter into or remain in the service of the Company
or its Subsidiaries and as an incentive for increased efforts during such
service, and has advised the Company thereof and instructed the undersigned
officers to issue said Option;
NOW, THEREFORE, in consideration of the mutual covenants herein contained
and other good and valuable consideration, receipt of which is hereby
acknowledged, the parties hereto do hereby agree as follows:
ARTICLE I.
DEFINITIONS
Whenever the following terms are used in this Agreement, they shall have
the meaning specified below unless the context clearly indicates to the
contrary. The masculine pronoun shall include the feminine and neuter, and the
singular the plural, where the context so indicates. All capitalized terms used
herein without definition shall have the meanings ascribed to such terms in the
Plan.
Section 1.1. Board
"Board" shall mean the Board of Directors of the Company.
Section 1.2. Code
"Code" shall mean the Internal Revenue Code of 1986, as amended.
Section 1.3. Committee
"Committee" shall mean the Compensation Committee of the Board, or another
committee of the Board, appointed as provided in Section 8.1 of the Plan.
Section 1.4. Company
"Company" shall mean The Spectranetics Corporation, a Delaware corporation.
<PAGE>
Section 1.5. Constructive Termination
"Constructive Termination" shall mean (i) any material change in the
nature, or material diminution in the status, of Employee's duties to or
position with the Company; (ii) reduction of Employee's annual base salary as in
effect on the date of a Change in Control or Corporate Transaction; (iii)
relocation of Employee's principal place of employment to any place more than 35
miles from the office Employee theretofore regularly occupied or (iv)
termination of Employee's employment by the Company for reasons other than (a)
willful misfeasance or willful nonfeasance of duty or breach of trust by
Employee, of which Employee is specifically notified in writing by the Company
or (b) conviction of a felony or misdemeanor by a court of competent
jurisdiction resulting in imprisonment for a period of more than 30 days.
Section 1.6. Exchange Act
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended.
Section 1.7. Option
"Option" shall mean the incentive stock option to purchase Common Stock of
the Company granted under this Agreement.
Section 1.8. Plan
"Plan" shall mean The 1997 Equity Participation Plan of The Spectranetics
Corporation.
Section 1.9. Rule 16b-3
"Rule 16b-3" shall mean that certain Rule 16b-3 under the Exchange Act, as
such Rule may be amended from time to time.
Section 1.10. Secretary
"Secretary" shall mean the Secretary of the Company.
Section 1.11. Securities Act
"Securities Act" shall mean the Securities Act of 1933, as amended.
Section 1.12. Subsidiary
"Subsidiary" shall mean any corporation in an unbroken chain of
corporations beginning with the Company if each of the corporations other than
the last corporation in the unbroken chain then owns stock possessing fifty
percent (50%) or more of the total combined voting power of all classes of stock
in one (1) of the other corporations in such chain.
Section 1.13. Termination of Employment
"Termination of Employment" shall mean the time when the employee-employer
relationship between the Employee and the Company or any Subsidiary is
terminated for any reason, with or without cause, including, but not by way of
limitation, a termination by resignation, discharge, death,
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<PAGE>
disability or retirement; but excluding (i) terminations where there is a
simultaneous reemployment or continuing employment of the Employee by the
Company or any Subsidiary, (ii) at the discretion of the Committee, terminations
which result in a temporary severance of the employee-employer relationship, and
(iii) at the discretion of the Committee, terminations which are followed by the
simultaneous establishment of a consulting relationship by the Company or a
Subsidiary with the former employee. The Committee, in its absolute discretion,
shall determine the effect of all matters and questions relating to Termination
of Employment, including, but not by way of limitation, the question of whether
a Termination of Employment resulted from a discharge for good cause, and all
questions of whether particular leaves of absence constitute Terminations of
Employment; provided, however, that, unless otherwise determined by the
Committee in its discretion, a leave of absence, change in status from an
employee to an independent contractor or other change in the employee-employer
relationship shall constitute a Termination of Employment if, and to the extent
that, such leave of absence, change in status or other change interrupts
employment for the purposes of Section 422(a)(2) of the Code and the then
applicable regulations and revenue rulings under said Section. Notwithstanding
any other provision of this Agreement or of the Plan, the Company or any
Subsidiary has an absolute and unrestricted right to terminate the Employee's
employment at any time for any reason whatsoever, with or without cause, except
to the extent expressly provided otherwise in writing.
ARTICLE II.
GRANT OF OPTION
Section 2.1. Grant of Option
In consideration of the Employee's agreement to remain in the employ of the
Company or its Subsidiaries and for other good and valuable consideration, on
the date hereof the Company irrevocably grants to the Employee the option to
purchase any part or all of an aggregate of ________ shares of its $0.001 par
value Common Stock upon the terms and conditions set forth in this Agreement.
Section 2.2. Purchase Price
The purchase price of the shares of stock covered by the Option shall be
$_____ per share without commission or other charge.
Section 2.3. Consideration
In consideration of the granting of this Option by the Company, the
Employee agrees to render faithful and efficient services to the Company or a
Subsidiary, with such duties and responsibilities as the Company shall from time
to time prescribe, for a period of at least one (1) year from the date this
Option is granted. Nothing in this Agreement or in the Plan shall confer upon
the Employee any right to continue in the employ of the Company or any
Subsidiary, or as a director of the Company, or shall interfere with or restrict
in any way the rights of the Company and its Subsidiaries, which are hereby
expressly reserved, to discharge the Employee at any time for any reason
whatsoever, with or without cause.
Section 2.4. Adjustments in Option
The Committee shall make adjustments with respect to the Option in
accordance with the provisions of Section 9.3 of the Plan; provided, however,
that each such adjustment shall be made in such
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<PAGE>
manner as not to constitute a "modification" within the meaning of Section
424(h)(3) of the Code, unless the Employee consents to an adjustment which would
constitute such a "modification."
ARTICLE III.
PERIOD OF EXERCISABILITY
Section 3.1. Commencement of Exercisability
(a) Subject to subsection (b) and Sections 3.4, 3.5 and 5.6, the Option
shall become exercisable in cumulative installments as follows:
(i) Twenty-five percent (25%) of the total number of shares covered by
the Option shall become exercisable on the first anniversary of the date
the Option is granted; and
(ii) Thereafter, an additional six and one-quarter percent (6.25%) of
the total number of shares shall become exercisable every third month on
the day of the month that the option was granted.
(b) No portion of the Option which is unexercisable at Termination of
Employment shall thereafter become exercisable.
Section 3.2. Duration of Exercisability
The installments provided for in Section 3.1 are cumulative. Each such
installment which becomes exercisable pursuant to Section 3.1 shall remain
exercisable until it becomes unexercisable under Section 3.3.
Section 3.3. Expiration of Option
The Option may not be exercised to any extent by anyone after the first to
occur of the following events:
(a) The expiration of ten (10) years from the date the Option was granted;
or
(b) If the Employee owned (within the meaning of Section 424(d) of the
Code), at the time the Option was granted, more than ten percent (10%) of the
total combined voting power of all classes of stock of the Company or any
Subsidiary or parent corporation thereof (within the meaning of Section 422 of
the Code), the expiration of five (5) years from the date the Option was
granted; or
(c) The expiration of three (3) months from the date of the Employee's
Termination of Employment unless such Termination of Employment results from his
death, retirement or disability (within the meaning of Section 22(e)(3) of the
Code); or
(d) The expiration of one (1) year from the date of the Employee's
Termination of Employment by reason of his death, retirement or disability
(within the meaning of Section 22(e)(3) of the Code); or
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<PAGE>
(e) The effective date of either the merger or consolidation of the Company
with or into another corporation, or the exchange of all or substantially all of
the assets of the Company for the securities of another corporation, or the
acquisition by another corporation or person of all or substantially all of the
Company's assets or fifty percent (50%) or more of the Company's then
outstanding voting stock, or the liquidation or dissolution of the Company,
unless the Option is, in connection with such transaction, to be assumed by the
successor or survivor corporation (or a parent or subsidiary thereof) or unless
the Committee waives this provision in connection with such transaction. At
least ten (10) days prior to the effective date of such merger, consolidation,
exchange, acquisition, liquidation or dissolution, the Committee shall give the
Employee notice of such event if the Option has then neither been fully
exercised nor become unexercisable under this Section 3.3.
Section 3.4. Acceleration of Exercisability
Notwithstanding the foregoing Section 3.1,
(a) In the event of any Change in Control or Corporate Transaction, the
Option shall, immediately prior to the effective date of the Change in Control
or Corporate Transaction, automatically become fully exercisable for all of the
shares of Common Stock at the time subject to the Option, and may be exercised
for any or all of those shares as fully-vested shares of Common Stock; provided,
however, that, if and to the extent the Option is, in connection with the Change
in Control or Corporate Transaction, either to be assumed by the successor or
survivor corporation (or parent thereof) or to be replaced with a comparable
right with respect to shares of the capital stock of the successor or survivor
corporation (or parent thereof), the Option shall, immediately prior to the
effective date of the Change in Control or Corporate Transaction, automatically
become immediately exercisable for fifty percent (50%) of the unvested shares of
Common Stock at the time subject to the Option. The remaining unvested shares of
Common Stock at the time subject to the Option shall vest according to the
schedule set forth in Section 3.1 above.
(b) In the event of any Constructive Termination of the Employee within one
(1) year of a Change in Control or Corporate Transaction, the Option shall
automatically become fully exercisable for all of the shares of Common Stock at
the time subject to the Option, and may be exercised for any or all of those
shares as fully-vested shares of Common Stock.
(c) The Committee may make such determinations and adopt such rules and
conditions as it, in its absolute discretion, deems appropriate in connection
with such acceleration of exercisability, including, but not by way of
limitation, provisions to ensure that any such acceleration and resulting
exercise shall be conditioned upon the consummation of the contemplated
corporate transaction, and determinations regarding whether provisions for
assumption or substitution have been made as referenced in subsection (a) above.
Section 3.5. Special Tax Consequences
The Employee acknowledges that, to the extent that the aggregate Fair
Market Value of stock with respect to which "incentive stock options" (within
the meaning of Section 422 of the Code, but without regard to Section 422(d) of
the Code), including the Option, are exercisable for the first time by the
Employee during any calendar year (under the Plan and all other incentive stock
option plans of the Company, any Subsidiary and any parent corporation thereof
(within the meaning of Section 422 of the
5
<PAGE>
Code)) exceeds $100,000, such options shall be treated as non-qualified stock
options to the extent required by Section 422 of the Code. The Employee further
acknowledges that the rule set forth in the preceding sentence shall be applied
by taking options into account in the order in which they were granted. For
purposes of these rules, the Fair Market Value of stock shall be determined as
of the time the option with respect to such stock is granted.
ARTICLE IV.
EXERCISE OF OPTION
Section 4.1. Person Eligible to Exercise
During the lifetime of the Employee, only he may exercise the Option or any
portion thereof. After the death of the Employee, any exercisable portion of the
Option may, prior to the time when the Option becomes unexercisable under
Section 3.3, be exercised by his personal representative or by any person
empowered to do so under the deceased Employee's will or under the then
applicable laws of descent and distribution.
Section 4.2. Partial Exercise
Any exercisable portion of the Option or the entire Option, if then wholly
exercisable, may be exercised in whole or in part at any time prior to the time
when the Option or portion thereof becomes unexercisable under Section 3.3;
provided, however, that each partial exercise shall be for not less than one
hundred (100) shares (or the minimum installment set forth in Section 3.1, if a
smaller number of shares) and shall be for whole shares only.
Section 4.3. Manner of Exercise
The Option, or any exercisable portion thereof, may be exercised solely by
delivery to the Secretary or his office of all of the following prior to the
time when the Option or such portion becomes unexercisable under Section 3.3:
(a) A written notice complying with the applicable rules established by the
Committee stating that the Option, or a portion thereof, is exercised. The
notice shall be signed by the Employee or other person then entitled to exercise
the Option or such portion; and
(b)
(i) Full cash payment to the Secretary of the Company for the shares
with respect to which such Option or portion is exercised; or
(ii) With the consent of the Committee, (A) shares of the Company's
Common Stock owned by the Employee, duly endorsed for transfer to the
Company, with a Fair Market Value on the date of delivery equal to the
aggregate exercise price of the Option or exercised portion thereof, or (B)
shares of the Company's Common Stock issuable to the Employee upon exercise
of the Option, with a Fair Market Value on the date of exercise of the
Option or any portion thereof equal to the aggregate exercise price of the
Option or exercised portion thereof; or
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<PAGE>
(iii) With the consent of the Committee, a full recourse promissory
note bearing interest (at no less than such rate as shall then preclude the
imputation of interest under the Code or successor provision) and payable
upon such terms as may be prescribed by the Committee. The Committee may
also prescribe the form of such note and the security to be given for such
note. The Option may not be exercised, however, by delivery of a promissory
note or by a loan from the Company when or where such loan or other
extension of credit is prohibited by law; or
(iv) With the consent of the Committee, property of any kind which
constitutes good and valuable consideration; or
(v) With the consent of the Committee, a notice that the Employee has
placed a market sell order with a broker with respect to shares of the
Company's Common Stock then issuable upon exercise of the Option, and that
the broker has been directed to pay a sufficient portion of the net
proceeds of the sale to the Company in satisfaction of the Option exercise
price; or
(vi) With the consent of the Committee, any combination of the
consideration provided in the foregoing subparagraphs (i), (ii), (iii),
(iv) and (v); and
(c) A bona fide written representation and agreement, in a form
satisfactory to the Committee, signed by the Employee or other person then
entitled to exercise such Option or portion, stating that the shares of stock
are being acquired for his own account, for investment and without any present
intention of distributing or reselling said shares or any of them except as may
be permitted under the Securities Act and then applicable rules and regulations
thereunder, and that the Employee or other person then entitled to exercise such
Option or portion will indemnify the Company against and hold it free and
harmless from any loss, damage, expense or liability resulting to the Company if
any sale or distribution of the shares by such person is contrary to the
representation and agreement referred to above. The Committee may, in its
absolute discretion, take whatever additional actions it deems appropriate to
insure the observance and performance of such representation and agreement and
to effect compliance with the Securities Act and any other federal or state
securities laws or regulations. Without limiting the generality of the
foregoing, the Committee may require an opinion of counsel acceptable to it to
the effect that any subsequent transfer of shares acquired on an Option exercise
does not violate the Securities Act, and may issue stop-transfer orders covering
such shares. Share certificates evidencing stock issued on exercise of this
Option shall bear an appropriate legend referring to the provisions of this
subsection (c) and the agreements herein. The written representation and
agreement referred to in the first sentence of this subsection (c) shall,
however, not be required if the shares to be issued pursuant to such exercise
have been registered under the Securities Act, and such registration is then
effective in respect of such shares;
(d) Full payment to the Company (or other employer corporation) of all
amounts which, under federal, state or local tax law, it is required to withhold
upon exercise of the Option; with the consent of the Committee, (i) shares of
the Company's Common Stock owned by the Employee, duly endorsed for transfer,
with a Fair Market Value on the date of delivery equal to the sums required to
be withheld, or (ii) shares of the Company's Common Stock issuable to the
Employee upon exercise of the Option with a Fair Market Value on the date of
exercise of the Option or any portion thereof equal to the sums required to be
withheld, may be used to make all or part of such payment; and
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<PAGE>
(e) In the event the Option or portion shall be exercised pursuant to
Section 4.1 by any person or persons other than the Employee, appropriate proof
of the right of such person or persons to exercise the Option.
Section 4.4. Conditions to Issuance of Stock Certificates
The shares of stock deliverable upon the exercise of the Option, or any
portion thereof, may be either previously authorized but unissued shares or
issued shares which have then been reacquired by the Company. Such shares shall
be fully paid and nonassessable. The Company shall not be required to issue or
deliver any certificate or certificates for shares of stock purchased upon the
exercise of the Option or portion thereof prior to fulfillment of all of the
following conditions:
(a) The admission of such shares to listing on all stock exchanges on which
such class of stock is then listed; and
(b) The completion of any registration or other qualification of such
shares under any state or federal law or under rulings or regulations of the
Securities and Exchange Commission or of any other governmental regulatory body
which the Committee shall, in its absolute discretion, deem necessary or
advisable; and
(c) The obtaining of any approval or other clearance from any state or
federal governmental agency which the Committee shall, in its absolute
discretion, determine to be necessary or advisable; and
(d) The receipt by the Company of full payment for such shares, including
payment of all amounts which, under federal, state or local tax law, the Company
(or other employer corporation) is required to withhold upon exercise of the
Option; and
(e) The lapse of such reasonable period of time following the exercise of
the Option as the Committee may from time to time establish for reasons of
administrative convenience.
Section 4.5. Rights as Shareholder
The Employee shall not be, nor have any of the rights or privileges of, a
shareholder of the Company in respect of any shares purchasable upon the
exercise of any part of the Option unless and until certificates representing
such shares shall have been issued by the Company to such Employee.
ARTICLE V.
OTHER PROVISIONS
Section 5.1. Administration
The Committee shall have the power to interpret the Plan and this Agreement
and to adopt such rules for the administration, interpretation and application
of the Plan as are consistent therewith and to interpret, amend or revoke any
such rules. All actions taken and all interpretations and determinations made by
the Committee in good faith shall be final and binding upon the Employee, the
Company and all other interested persons. No member of the Committee shall be
personally liable for any action, determination or interpretation made in good
faith with respect to the Plan or the Option. Any such
8
<PAGE>
interpretations and rules with respect to incentive stock options shall be
consistent with the provisions of Section 422 of the Code. In its absolute
discretion, the Board may at any time and from time to time exercise any and all
rights and duties of the Committee under the Plan and this Agreement except with
respect to matters which under Rule 16b-3 or Section 162(m) of the Code, or any
regulations or rules issued thereunder, are required to be determined in the
sole discretion of the Committee.
Section 5.2. Option Not Transferable
Neither the Option nor any interest or right therein or part thereof shall
be sold, pledged, assigned, or transferred in any manner other than by will or
the laws of descent and distribution, unless and until such Option has been
exercised, or the shares underlying such Option have been issued, and all
restrictions applicable to such shares have lapsed. Neither the Option nor any
interest or right therein or part thereof shall be liable for the debts,
contracts or engagements of the Employee or his successors in interest or shall
be subject to disposition by transfer, alienation, anticipation, pledge,
encumbrance, assignment or any other means whether such disposition be voluntary
or involuntary or by operation of law by judgment, levy, attachment, garnishment
or any other legal or equitable proceedings (including bankruptcy), and any
attempted disposition thereof shall be null and void and of no effect, except to
the extent that such disposition is permitted by the preceding sentence.
Section 5.3. Shares to Be Reserved
The Company shall at all times during the term of the Option reserve and
keep available such number of shares of stock as will be sufficient to satisfy
the requirements of this Agreement.
Section 5.4. Notices
Any notice to be given under the terms of this Agreement to the Company
shall be addressed to the Company in care of its Secretary, and any notice to be
given to the Employee shall be addressed to him at the address given beneath his
signature hereto. By a notice given pursuant to this Section 5.4, either party
may hereafter designate a different address for notices to be given to him. Any
notice which is required to be given to the Employee shall, if the Employee is
then deceased, be given to the Employee's personal representative if such
representative has previously informed the Company of his status and address by
written notice under this Section 5.4. Any notice shall be deemed duly given
when enclosed in a properly sealed envelope or wrapper addressed as aforesaid,
deposited (with postage prepaid) in a post office or branch post office
regularly maintained by the United States Postal Service; provided, however,
that any notice to be given by the Employee relating to the exercise of the
Option or any portion thereof shall be deemed duly given upon receipt by the
Secretary or his office.
Section 5.5. Titles
Titles are provided herein for convenience only and are not to serve as a
basis for interpretation or construction of this Agreement.
Section 5.6. Shareholder Approval
The Plan will be submitted for approval by the Company's shareholders
within twelve (12) months after the date the Plan was initially adopted by the
Board. This Option may not be exercised to any extent by anyone prior to the
time when the Plan is approved by the shareholders, and if such approval has not
been obtained by the end of said twelve-month period, this Option shall
thereupon be cancelled and become null and void.
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<PAGE>
Section 5.7. Notification of Disposition
The Employee shall give prompt notice to the Company of any disposition or
other transfer of any shares of stock acquired under this Agreement if such
disposition or transfer is made (a) within two (2) years from the date of
granting the Option with respect to such shares or (b) within one (1) year after
the transfer of such shares to him. Such notice shall specify the date of such
disposition or other transfer and the amount realized, in cash, other property,
assumption of indebtedness or other consideration, by the Employee in such
disposition or other transfer.
Section 5.8. Construction
This Agreement shall be administered, interpreted and enforced under the
internal laws of the State of Colorado without regard to conflicts of laws
thereof..
Section 5.9. Conformity to Securities Laws
The Employee acknowledges that the Plan is intended to conform to the
extent necessary with all provisions of the Securities Act and the Exchange Act
and any and all regulations and rules promulgated by the Securities and Exchange
Commission thereunder, including, without limitation, the applicable exemptive
conditions of Rule 16b-3. Notwithstanding anything herein to the contrary, the
Plan shall be administered, and the Option is granted and may be exercised, only
in such a manner as to conform to such laws, rules and regulations. To the
extent permitted by applicable law, the Plan and this Agreement shall be deemed
amended to the extent necessary to conform to such laws, rules and regulations.
Section 5.10. Amendments
This Agreement and the Plan may be amended without the consent of the
Employee provided that such amendment would not impair any rights of the
Employee under this Agreement. No amendment of this Agreement shall, without the
consent of the Employee, impair any rights of the Employee under this Agreement.
IN WITNESS WHEREOF, this Agreement has been executed and delivered by the
parties hereto.
THE SPECTRANETICS CORPORATION
By ___________________________
Name:
Title:
____________________________
Employee
____________________________
____________________________
Address
Employee's Taxpayer
Identification Number:
____________________________
10
Exhibit 4(h)
<PAGE>
INCENTIVE STOCK OPTION AGREEMENT
THIS AGREEMENT, dated ____________, 199_, is made by and between The
Spectranetics Corporation, a Delaware corporation hereinafter referred to as the
"Company," and ____________________, an employee of the Company or a Subsidiary
of the Company, hereinafter referred to as "Employee":
WHEREAS, the Company wishes to afford the Employee the opportunity to
purchase shares of its $0.001 par value Common Stock; and
WHEREAS, the Company wishes to carry out the Plan (the terms of which are
hereby incorporated by reference and made a part of this Agreement); and
WHEREAS, the Committee, appointed to administer the Plan, has determined
that it would be to the advantage and best interest of the Company and its
shareholders to grant the Incentive Stock Option provided for herein to the
Employee as an inducement to enter into or remain in the service of the Company
or its Subsidiaries and as an incentive for increased efforts during such
service, and has advised the Company thereof and instructed the undersigned
officers to issue said Option;
NOW, THEREFORE, in consideration of the mutual covenants herein contained
and other good and valuable consideration, receipt of which is hereby
acknowledged, the parties hereto do hereby agree as follows:
ARTICLE I.
DEFINITIONS
Whenever the following terms are used in this Agreement, they shall have
the meaning specified below unless the context clearly indicates to the
contrary. The masculine pronoun shall include the feminine and neuter, and the
singular the plural, where the context so indicates. All capitalized terms used
herein without definition shall have the meanings ascribed to such terms in the
Plan.
Section 1.1. Board
"Board" shall mean the Board of Directors of the Company.
Section 1.2. Code
"Code" shall mean the Internal Revenue Code of 1986, as amended.
Section 1.3. Committee
"Committee" shall mean the Compensation Committee of the Board, or another
committee of the Board, appointed as provided in Section 8.1 of the Plan.
Section 1.4. Company
"Company" shall mean The Spectranetics Corporation, a Delaware corporation.
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Section 1.5. Exchange Act
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended.
Section 1.6. Option
"Option" shall mean the incentive stock option to purchase Common Stock of
the Company granted under this Agreement.
Section 1.7. Plan
"Plan" shall mean The 1997 Equity Participation Plan of The Spectranetics
Corporation.
Section 1.8. Rule 16b-3
"Rule 16b-3" shall mean that certain Rule 16b-3 under the Exchange Act, as
such Rule may be amended from time to time.
Section 1.9. Secretary
"Secretary" shall mean the Secretary of the Company.
Section 1.10. Securities Act
"Securities Act" shall mean the Securities Act of 1933, as amended.
Section 1.11. Subsidiary
"Subsidiary" shall mean any corporation in an unbroken chain of
corporations beginning with the Company if each of the corporations other than
the last corporation in the unbroken chain then owns stock possessing fifty
percent (50%) or more of the total combined voting power of all classes of stock
in one (1) of the other corporations in such chain.
Section 1.12. Termination of Employment
"Termination of Employment" shall mean the time when the employee-employer
relationship between the Employee and the Company or any Subsidiary is
terminated for any reason, with or without cause, including, but not by way of
limitation, a termination by resignation, discharge, death, disability or
retirement; but excluding (i) terminations where there is a simultaneous
reemployment or continuing employment of the Employee by the Company or any
Subsidiary, (ii) at the discretion of the Committee, terminations which result
in a temporary severance of the employee-employer relationship, and (iii) at the
discretion of the Committee, terminations which are followed by the simultaneous
establishment of a consulting relationship by the Company or a Subsidiary with
the former employee. The Committee, in its absolute discretion, shall determine
the effect of all matters and questions relating to Termination of Employment,
including, but not by way of limitation, the question of whether a Termination
of Employment resulted from a discharge for good cause, and all questions of
whether particular leaves of absence constitute Terminations of Employment;
provided, however, that, unless otherwise determined by the Committee in its
discretion, a leave of absence, change in status from an employee to an
independent contractor or other change in the employee-employer relationship
shall constitute a Termination of
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Employment if, and to the extent that, such leave of absence, change in status
or other change interrupts employment for the purposes of Section 422(a)(2) of
the Code and the then applicable regulations and revenue rulings under said
Section. Notwithstanding any other provision of this Agreement or of the Plan,
the Company or any Subsidiary has an absolute and unrestricted right to
terminate the Employee's employment at any time for any reason whatsoever, with
or without cause, except to the extent expressly provided otherwise in writing.
ARTICLE II.
GRANT OF OPTION
Section 2.1. Grant of Option
In consideration of the Employee's agreement to remain in the employ of the
Company or its Subsidiaries and for other good and valuable consideration, on
the date hereof the Company irrevocably grants to the Employee the option to
purchase any part or all of an aggregate of ________ shares of its $0.001 par
value Common Stock upon the terms and conditions set forth in this Agreement.
Section 2.2. Purchase Price
The purchase price of the shares of stock covered by the Option shall be
$_____ per share without commission or other charge.
Section 2.3. Consideration
In consideration of the granting of this Option by the Company, the
Employee agrees to render faithful and efficient services to the Company or a
Subsidiary, with such duties and responsibilities as the Company shall from time
to time prescribe, for a period of at least one (1) year from the date this
Option is granted. Nothing in this Agreement or in the Plan shall confer upon
the Employee any right to continue in the employ of the Company or any
Subsidiary, or as a director of the Company, or shall interfere with or restrict
in any way the rights of the Company and its Subsidiaries, which are hereby
expressly reserved, to discharge the Employee at any time for any reason
whatsoever, with or without cause.
Section 2.4. Adjustments in Option
The Committee shall make adjustments with respect to the Option in
accordance with the provisions of Section 9.3 of the Plan; provided, however,
that each such adjustment shall be made in such manner as not to constitute a
"modification" within the meaning of Section 424(h)(3) of the Code, unless the
Employee consents to an adjustment which would constitute such a "modification."
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ARTICLE III.
PERIOD OF EXERCISABILITY
Section 3.1. Commencement of Exercisability
(a) Subject to subsection (b) and Sections 3.4, 3.5 and 5.6, the Option
shall become exercisable in cumulative installments as follows:
(i) Twenty-five percent (25%) of the total number of shares covered by
the Option shall become exercisable on the first anniversary of the date
the Option is granted; and
(ii) Thereafter, an additional six and one-quarter percent (6.25%) of
the total number of shares shall become exercisable every third month on
the day of the month that the option was granted.
(b) No portion of the Option which is unexercisable at Termination of
Employment shall thereafter become exercisable.
Section 3.2. Duration of Exercisability
The installments provided for in Section 3.1 are cumulative. Each such
installment which becomes exercisable pursuant to Section 3.1 shall remain
exercisable until it becomes unexercisable under Section 3.3.
Section 3.3. Expiration of Option
The Option may not be exercised to any extent by anyone after the first to
occur of the following events:
(a) The expiration of ten (10) years from the date the Option was granted;
or
(b) If the Employee owned (within the meaning of Section 424(d) of the
Code), at the time the Option was granted, more than ten percent (10%) of the
total combined voting power of all classes of stock of the Company or any
Subsidiary or parent corporation thereof (within the meaning of Section 422 of
the Code), the expiration of five (5) years from the date the Option was
granted; or
(c) The expiration of three (3) months from the date of the Employee's
Termination of Employment unless such Termination of Employment results from his
death, retirement or disability (within the meaning of Section 22(e)(3) of the
Code); or
(d) The expiration of one (1) year from the date of the Employee's
Termination of Employment by reason of his death, retirement or disability
(within the meaning of Section 22(e)(3) of the Code); or
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(e) The effective date of either the merger or consolidation of the Company
with or into another corporation, or the exchange of all or substantially all of
the assets of the Company for the securities of another corporation, or the
acquisition by another corporation or person of all or substantially all of the
Company's assets or fifty percent (50%) or more of the Company's then
outstanding voting stock, or the liquidation or dissolution of the Company,
unless the Option is, in connection with such transaction, to be assumed by the
successor or survivor corporation (or a parent or subsidiary thereof) or unless
the Committee waives this provision in connection with such transaction. At
least ten (10) days prior to the effective date of such merger, consolidation,
exchange, acquisition, liquidation or dissolution, the Committee shall give the
Employee notice of such event if the Option has then neither been fully
exercised nor become unexercisable under this Section 3.3.
Section 3.4. Acceleration of Exercisability
(a) Notwithstanding the foregoing Section 3.1, in the event of any Change
in Control or Corporate Transaction, the Option shall, immediately prior to the
effective date of the Change in Control or Corporate Transaction, automatically
become fully exercisable for all of the shares of Common Stock at the time
subject to the Option, and may be exercised for any or all of those shares as
fully-vested shares of Common Stock. However, the Option shall not so accelerate
if and to the extent the Option is, in connection with the Change in Control or
Corporate Transaction, either to be assumed by the successor or survivor
corporation (or parent thereof) or to be replaced with a comparable right with
respect to shares of the capital stock of the successor or survivor corporation
(or parent thereof).
(b) The Committee may make such determinations and adopt such rules and
conditions as it, in its absolute discretion, deems appropriate in connection
with such acceleration of exercisability, including, but not by way of
limitation, provisions to ensure that any such acceleration and resulting
exercise shall be conditioned upon the consummation of the contemplated
corporate transaction, and determinations regarding whether provisions for
assumption or substitution have been made as referenced in subsection (a) above.
Section 3.5. Special Tax Consequences
The Employee acknowledges that, to the extent that the aggregate Fair
Market Value of stock with respect to which "incentive stock options" (within
the meaning of Section 422 of the Code, but without regard to Section 422(d) of
the Code), including the Option, are exercisable for the first time by the
Employee during any calendar year (under the Plan and all other incentive stock
option plans of the Company, any Subsidiary and any parent corporation thereof
(within the meaning of Section 422 of the Code)) exceeds $100,000, such options
shall be treated as non-qualified stock options to the extent required by
Section 422 of the Code. The Employee further acknowledges that the rule set
forth in the preceding sentence shall be applied by taking options into account
in the order in which they were granted. For purposes of these rules, the Fair
Market Value of stock shall be determined as of the time the option with respect
to such stock is granted.
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ARTICLE IV.
EXERCISE OF OPTION
Section 4.1. Person Eligible to Exercise
During the lifetime of the Employee, only he may exercise the Option or any
portion thereof. After the death of the Employee, any exercisable portion of the
Option may, prior to the time when the Option becomes unexercisable under
Section 3.3, be exercised by his personal representative or by any person
empowered to do so under the deceased Employee's will or under the then
applicable laws of descent and distribution.
Section 4.2. Partial Exercise
Any exercisable portion of the Option or the entire Option, if then wholly
exercisable, may be exercised in whole or in part at any time prior to the time
when the Option or portion thereof becomes unexercisable under Section 3.3;
provided, however, that each partial exercise shall be for not less than one
hundred (100) shares (or the minimum installment set forth in Section 3.1, if a
smaller number of shares) and shall be for whole shares only.
Section 4.3. Manner of Exercise
The Option, or any exercisable portion thereof, may be exercised solely by
delivery to the Secretary or his office of all of the following prior to the
time when the Option or such portion becomes unexercisable under Section 3.3:
(a) A written notice complying with the applicable rules established by the
Committee stating that the Option, or a portion thereof, is exercised. The
notice shall be signed by the Employee or other person then entitled to exercise
the Option or such portion; and
(b)
(i) Full cash payment to the Secretary of the Company for the shares
with respect to which such Option or portion is exercised; or
(ii) With the consent of the Committee, (A) shares of the Company's
Common Stock owned by the Employee, duly endorsed for transfer to the
Company, with a Fair Market Value on the date of delivery equal to the
aggregate exercise price of the Option or exercised portion thereof, or (B)
shares of the Company's Common Stock issuable to the Employee upon exercise
of the Option, with a Fair Market Value on the date of exercise of the
Option or any portion thereof equal to the aggregate exercise price of the
Option or exercised portion thereof; or
(iii) With the consent of the Committee, a full recourse promissory
note bearing interest (at no less than such rate as shall then preclude the
imputation of interest under the Code or successor provision) and payable
upon such terms as may be prescribed by the Committee. The Committee may
also prescribe the form of such note and the security to be given for such
note. The Option may not be exercised, however, by
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delivery of a promissory note or by a loan from the Company when or where
such loan or other extension of credit is prohibited by law; or
(iv) With the consent of the Committee, property of any kind which
constitutes good and valuable consideration; or
(v) With the consent of the Committee, a notice that the Employee has
placed a market sell order with a broker with respect to shares of the
Company's Common Stock then issuable upon exercise of the Option, and that
the broker has been directed to pay a sufficient portion of the net
proceeds of the sale to the Company in satisfaction of the Option exercise
price; or
(vi) With the consent of the Committee, any combination of the
consideration provided in the foregoing subparagraphs (i), (ii), (iii),
(iv) and (v); and
(c) A bona fide written representation and agreement, in a form
satisfactory to the Committee, signed by the Employee or other person then
entitled to exercise such Option or portion, stating that the shares of stock
are being acquired for his own account, for investment and without any present
intention of distributing or reselling said shares or any of them except as may
be permitted under the Securities Act and then applicable rules and regulations
thereunder, and that the Employee or other person then entitled to exercise such
Option or portion will indemnify the Company against and hold it free and
harmless from any loss, damage, expense or liability resulting to the Company if
any sale or distribution of the shares by such person is contrary to the
representation and agreement referred to above. The Committee may, in its
absolute discretion, take whatever additional actions it deems appropriate to
insure the observance and performance of such representation and agreement and
to effect compliance with the Securities Act and any other federal or state
securities laws or regulations. Without limiting the generality of the
foregoing, the Committee may require an opinion of counsel acceptable to it to
the effect that any subsequent transfer of shares acquired on an Option exercise
does not violate the Securities Act, and may issue stop-transfer orders covering
such shares. Share certificates evidencing stock issued on exercise of this
Option shall bear an appropriate legend referring to the provisions of this
subsection (c) and the agreements herein. The written representation and
agreement referred to in the first sentence of this subsection (c) shall,
however, not be required if the shares to be issued pursuant to such exercise
have been registered under the Securities Act, and such registration is then
effective in respect of such shares;
(d) Full payment to the Company (or other employer corporation) of all
amounts which, under federal, state or local tax law, it is required to withhold
upon exercise of the Option; with the consent of the Committee, (i) shares of
the Company's Common Stock owned by the Employee, duly endorsed for transfer,
with a Fair Market Value on the date of delivery equal to the sums required to
be withheld, or (ii) shares of the Company's Common Stock issuable to the
Employee upon exercise of the Option with a Fair Market Value on the date of
exercise of the Option or any portion thereof equal to the sums required to be
withheld, may be used to make all or part of such payment; and
(e) In the event the Option or portion shall be exercised pursuant to
Section 4.1 by any person or persons other than the Employee, appropriate proof
of the right of such person or persons to exercise the Option.
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Section 4.4. Conditions to Issuance of Stock Certificates
The shares of stock deliverable upon the exercise of the Option, or any
portion thereof, may be either previously authorized but unissued shares or
issued shares which have then been reacquired by the Company. Such shares shall
be fully paid and nonassessable. The Company shall not be required to issue or
deliver any certificate or certificates for shares of stock purchased upon the
exercise of the Option or portion thereof prior to fulfillment of all of the
following conditions:
(a) The admission of such shares to listing on all stock exchanges on which
such class of stock is then listed; and
(b) The completion of any registration or other qualification of such
shares under any state or federal law or under rulings or regulations of the
Securities and Exchange Commission or of any other governmental regulatory body
which the Committee shall, in its absolute discretion, deem necessary or
advisable; and
(c) The obtaining of any approval or other clearance from any state or
federal governmental agency which the Committee shall, in its absolute
discretion, determine to be necessary or advisable; and
(d) The receipt by the Company of full payment for such shares, including
payment of all amounts which, under federal, state or local tax law, the Company
(or other employer corporation) is required to withhold upon exercise of the
Option; and
(e) The lapse of such reasonable period of time following the exercise of
the Option as the Committee may from time to time establish for reasons of
administrative convenience.
Section 4.5. Rights as Shareholder
The Employee shall not be, nor have any of the rights or privileges of, a
shareholder of the Company in respect of any shares purchasable upon the
exercise of any part of the Option unless and until certificates representing
such shares shall have been issued by the Company to such Employee.
ARTICLE V.
OTHER PROVISIONS
Section 5.1. Administration
The Committee shall have the power to interpret the Plan and this Agreement
and to adopt such rules for the administration, interpretation and application
of the Plan as are consistent therewith and to interpret, amend or revoke any
such rules. All actions taken and all interpretations and determinations made by
the Committee in good faith shall be final and binding upon the Employee, the
Company and all other interested persons. No member of the Committee shall be
personally liable for any action, determination or interpretation made in good
faith with respect to the Plan or the Option. Any such interpretations and rules
with respect to incentive stock options shall be consistent with the provisions
of Section 422 of the Code. In its absolute discretion, the Board may at any
time and from time to time
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exercise any and all rights and duties of the Committee under the Plan and this
Agreement except with respect to matters which under Rule 16b-3 or Section
162(m) of the Code, or any regulations or rules issued thereunder, are required
to be determined in the sole discretion of the Committee.
Section 5.2. Option Not Transferable
Neither the Option nor any interest or right therein or part thereof shall
be sold, pledged, assigned, or transferred in any manner other than by will or
the laws of descent and distribution, unless and until such Option has been
exercised, or the shares underlying such Option have been issued, and all
restrictions applicable to such shares have lapsed. Neither the Option nor any
interest or right therein or part thereof shall be liable for the debts,
contracts or engagements of the Employee or his successors in interest or shall
be subject to disposition by transfer, alienation, anticipation, pledge,
encumbrance, assignment or any other means whether such disposition be voluntary
or involuntary or by operation of law by judgment, levy, attachment, garnishment
or any other legal or equitable proceedings (including bankruptcy), and any
attempted disposition thereof shall be null and void and of no effect, except to
the extent that such disposition is permitted by the preceding sentence.
Section 5.3. Shares to Be Reserved
The Company shall at all times during the term of the Option reserve and
keep available such number of shares of stock as will be sufficient to satisfy
the requirements of this Agreement.
Section 5.4. Notices
Any notice to be given under the terms of this Agreement to the Company
shall be addressed to the Company in care of its Secretary, and any notice to be
given to the Employee shall be addressed to him at the address given beneath his
signature hereto. By a notice given pursuant to this Section 5.4, either party
may hereafter designate a different address for notices to be given to him. Any
notice which is required to be given to the Employee shall, if the Employee is
then deceased, be given to the Employee's personal representative if such
representative has previously informed the Company of his status and address by
written notice under this Section 5.4. Any notice shall be deemed duly given
when enclosed in a properly sealed envelope or wrapper addressed as aforesaid,
deposited (with postage prepaid) in a post office or branch post office
regularly maintained by the United States Postal Service; provided, however,
that any notice to be given by the Employee relating to the exercise of the
Option or any portion thereof shall be deemed duly given upon receipt by the
Secretary or his office.
Section 5.5. Titles
Titles are provided herein for convenience only and are not to serve as a
basis for interpretation or construction of this Agreement.
Section 5.6. Shareholder Approval
The Plan will be submitted for approval by the Company's shareholders
within twelve (12) months after the date the Plan was initially adopted by the
Board. This Option may not be exercised to any extent by anyone prior to the
time when the Plan is approved by the shareholders, and if such approval has not
been obtained by the end of said twelve-month period, this Option shall
thereupon be cancelled and become null and void.
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Section 5.7. Notification of Disposition
The Employee shall give prompt notice to the Company of any disposition or
other transfer of any shares of stock acquired under this Agreement if such
disposition or transfer is made (a) within two (2) years from the date of
granting the Option with respect to such shares or (b) within one (1) year after
the transfer of such shares to him. Such notice shall specify the date of such
disposition or other transfer and the amount realized, in cash, other property,
assumption of indebtedness or other consideration, by the Employee in such
disposition or other transfer.
Section 5.8. Construction
This Agreement shall be administered, interpreted and enforced under the
internal laws of the State of Colorado without regard to conflicts of laws
thereof..
Section 5.9. Conformity to Securities Laws
The Employee acknowledges that the Plan is intended to conform to the
extent necessary with all provisions of the Securities Act and the Exchange Act
and any and all regulations and rules promulgated by the Securities and Exchange
Commission thereunder, including, without limitation, the applicable exemptive
conditions of Rule 16b-3. Notwithstanding anything herein to the contrary, the
Plan shall be administered, and the Option is granted and may be exercised, only
in such a manner as to conform to such laws, rules and regulations. To the
extent permitted by applicable law, the Plan and this Agreement shall be deemed
amended to the extent necessary to conform to such laws, rules and regulations.
Section 5.10. Amendments
This Agreement and the Plan may be amended without the consent of the
Employee provided that such amendment would not impair any rights of the
Employee under this Agreement. No amendment of this Agreement shall, without the
consent of the Employee, impair any rights of the Employee under this Agreement.
IN WITNESS WHEREOF, this Agreement has been executed and delivered by the
parties hereto.
THE SPECTRANETICS CORPORATION
By ___________________________
Name:
Title:
__________________________________
Employee
__________________________________
__________________________________
Address
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Employee's Taxpayer
Identification Number:
__________________________________
11
[LETTERHEAD OF LATHAM & WATKINS]
June 17, 1998
The Spectranetics Corporation
96 Talamine Court
Colorado Springs, CO 80907
Ladies and Gentlemen:
At your request we have examined the Registration Statement on Form S-8
(the "Registration Statement") to be filed by you with the Securities and
Exchange Commission in connection with the registration under the Securities Act
of 1933, as amended, of 1,200,000 shares (the "Shares") of common stock, $.001
par value, of The Spectranetics Corporation (the "Company") issuable upon
exercise of options and other awards granted under the 1997 Equity Participation
Plan of The Spectranetics Corporation, as amended (the "Incentive Plan"), the
Nonqualified Stock Option Agreement dated as of April 17, 1996 (the "April
Agreement") and the Nonqualified Stock Option Agreement dated as of March 3,
1997 (the "March Agreement").
We have examined such matters of fact and questions of law as we have
considered appropriate for purposes of rendering the opinions expressed below.
We are opining herein as to the effect on the subject transaction of only
the General Corporation Law of the State of Delaware and we express no opinion
with respect to the applicability thereto or the effect thereon of any other
laws or as to any matters of municipal law or any other local agencies within
any state.
Subject to the foregoing and in reliance thereon it is our opinion that
upon the exercise of options and other awards granted pursuant to the Incentive
Plan, the April Agreement and the March Agreement, and the issuance and sale of
the Shares, each in the manner contemplated by the Incentive Plan, the April
Agreement, the March Agreement and the Registration Statement, and subject to
the Company completing all action and proceedings required on its part to be
taken prior to the issuance of the Shares pursuant to the terms of the
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Incentive Plan, the April Agreement, the March Agreement and the Registration
Statement, including, without limitation, collection of required payment for the
Shares, the Shares will be validly issued, fully paid and nonassessable
securities of the Company.
We consent to your filing this opinion as an exhibit to the Registration
Statement.
Very truly yours,
/s/ LATHAM & WATKINS
Consent of Independent Auditors
The Board of Directors
The Spectranetics Corporation:
We consent to the use of our reports incorporated herein by reference.
/s/ KPMG Peat Marwick LLP
Denver, Colorado
June 15, 1998
