SYNOVIS LIFE TECHNOLOGIES,
INC.
2006 STOCK INCENTIVE PLAN
(as amended and restated as of December 11,
2008)
The purpose of the
Synovis Life Technologies, Inc. 2006 Stock Incentive Plan (the
“Plan”) is to advance the interests of Synovis Life
Technologies, Inc. (the “Company”) and its shareholders
by enabling the Company and its Subsidiaries to attract and retain
qualified individuals through opportunities for equity
participation in the Company, and to reward those individuals who
contribute to the achievement of the Company’ economic
objectives.
The following
terms will have the meanings set forth below, unless the context
clearly otherwise requires:
2.1 “
Board ” means the Board of Directors of the
Company.
2.2 “
Broker Exercise Notice ” means a written notice
pursuant to which a Participant, upon exercise of an Option,
irrevocably instructs a broker or dealer to sell a sufficient
number of shares or loan a sufficient amount of money to pay all or
a portion of the exercise price of the Option and/or any related
withholding tax obligations and remit such sums to the Company and
directs the Company to deliver stock certificates to be issued upon
such exercise directly to such broker or dealer or their
nominee.
2.3 “
Cause ” means (i) dishonesty, fraud,
misrepresentation, embezzlement or deliberate injury or attempted
injury, in each case related to the Company or any Subsidiary,
(ii) conviction of a gross misdemeanor or felony, or any other
offense that, in the opinion of the Committee, is likely to have a
material adverse effect upon the Company or its reputation,
(iii) any intentional and deliberate breach of a duty or
duties that, individually or in the aggregate, are material in
relation to the Participant’s overall duties, or
(iv) any breach of any confidentiality, non-compete or
non-solicitation agreement entered into with the Company or any
Subsidiary.
2.4 “
Change in Control ” means an event described in
Section 13.1 of the Plan; provided, however, if distribution
of an Incentive Award subject to Section 409A of the Code is
triggered by a Change in Control, the term Change in Control will
mean a change in the ownership or effective control of the Company,
or in the ownership of a substantial portion of the assets of the
Company, as such term is defined in Section 409A of the Code
and the regulations and rulings issued thereunder.
2.5 “
Code ” means the Internal Revenue Code of 1986, as
amended.
2.6 “
Committee ” means the group of individuals
administering the Plan, as provided in Section 3 of the
Plan.
2.7 “
Common Stock ” means the common stock of the Company,
par value $0.01 per share, or the number and kind of shares of
stock or other securities into which such Common Stock may be
changed in accordance with Section 4.3 of the Plan.
2.8 “
Disability ” means the disability of the Participant
such as would entitle the Participant to receive disability income
benefits pursuant to the long-term disability plan of the Company
or Subsidiary then covering the Participant or, if no such plan
exists or is applicable to the Participant, the permanent and total
disability of the Participant within the meaning of
Section 22(e)(3) of the Code; provided, however, if
distribution of an Incentive Award subject to Section 409A of
the Code is triggered by an Eligible Recipient’s Disability,
such term will mean that the Eligible Recipient is disabled as
defined by Section 409A of the Code and the regulations and
rulings issued thereunder.
2.9 “
Eligible Recipients ” means all employees (including,
without limitation, officers and directors who are also employees)
of the Company or any Subsidiary, and any non-employee directors,
consultants, advisors and independent contractors of the Company or
any Subsidiary.
2.10 “
Exchange Act ” means the Securities Exchange Act of
1934, as amended.
2.11 “
Fair Market Value ” means, with respect to the Common
Stock, as of any date: (i) the closing sale price of the Common
Stock as reported on the Nasdaq Global Market System or on any
national exchange (or, if no shares were traded on such date, as of
the next preceding date on which there was such a trade); or
(ii) if the Common Stock is not so listed, admitted to
unlisted trading privileges, or reported on any national exchange
or on the Nasdaq Global Market System, the closing sale price as of
such date at the end of the regular trading session, as reported by
the Nasdaq SmallCap Market, OTC Bulletin Board, the Bulletin Board
Exchange (BBX) or the Pink Sheets, LLC, or other comparable
service (or, if no shares were traded or quoted on such date, as of
the next preceding date on which there was such a trade or quote);
or (iii) if the Common Stock is not so listed or reported,
such price as the Committee determines in good faith by the
reasonable application of a reasonable valuation method, taking
into account all available information material to the value of the
Common Stock, and consistent with the definition of “fair
market value” under Section 409A of the Code.
2.12 “
Good Reason ,” unless otherwise defined in an
agreement evidencing an Incentive Award, means the occurrence of
any of the following in connection with a Change in Control:
(i) a substantial diminution in the Participant’s
authority, duties or responsibilities as in effect prior to the
Change in Control, (ii) a reduction by the Company in the
Participant’s base salary, or an adverse change in the form
or timing of the payment thereof, as in effect immediately prior to
the Change in Control or as thereafter increased, or (iii) the
Company’s requiring the Participant to be based at any office
or location that is more than fifty (50) miles further from
the office or location thereof immediately preceding the Change in
Control; provided, however, Good Reason shall not include any of
the circumstances or events described above unless (A) the
Participant has first provided written notice of such circumstance
or event to the Company or its successor and the Company or such
successor has not corrected such circumstance or event within
thirty (30) days thereafter; and (B) the Participant has
not otherwise consented to the occurrence in writing.
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2.13 “
Incentive Award ” means an Option, Stock Appreciation
Right, Restricted Stock Award, Stock Unit Award or Performance
Award granted to an Eligible Recipient pursuant to the
Plan.
2.14 “
Incentive Stock Option ” means a right to purchase
Common Stock granted to an Eligible Recipient pursuant to
Section 6 of the Plan that qualifies as an “incentive
stock option” within the meaning of Section 422 of the
Code.
2.15 “
Non-Statutory Stock Option ” means a right to purchase
Common Stock granted to an Eligible Recipient pursuant to
Section 6 of the Plan that does not qualify as an Incentive
Stock Option.
2.16 “
Option ” means an Incentive Stock Option or a
Non-Statutory Stock Option.
2.17 “
Participant ” means an Eligible Recipient who receives
one or more Incentive Awards under the Plan.
2.18 “
Performance Award ” means a right granted to an
Eligible Recipient pursuant to Section 10 of the Plan to
receive an amount of cash, a number of shares of Common Stock, or a
combination of both, contingent upon achievement of specified
objectives during a specified period.
2.19 “
Previously Acquired Shares ” means shares of Common
Stock that are already owned by the Participant, or with respect to
any Incentive Award, that are to be issued to the Participant upon
the grant, exercise or vesting of such Incentive Award.
2.20 “
Restricted Stock Award ” means an award of shares of
Common Stock granted to an Eligible Recipient pursuant to
Section 8 of the Plan that are subject to restrictions on
transferability and/or a risk of forfeiture.
2.21 “
Retirement ” means termination of employment or
service at age 55 or older and completion of at least ten years of
continuous service.
2.22 “
Securities Act ” means the Securities Act of 1933, as
amended.
2.23 “
Stock Appreciation Right ” means a right granted to an
Eligible Recipient pursuant to Section 7 of the Plan to
receive a payment from the Company, in the form of shares of Common
Stock, cash or a combination of both, equal to the difference
between the Fair Market Value of one or more shares of Common Stock
and a specified exercise price of such shares.
2.24 “
Stock Unit Award ” means a right granted to an
Eligible Recipient pursuant to Section 9 of the Plan to
receive the Fair Market Value of one or more shares of Common
Stock, payable in cash, shares of Common Stock, or a combination of
both, the payment, issuance, retention and /or vesting of which is
subject to the satisfaction of specified conditions, which may
include achievement of specified objectives.
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2.25 “
Subsidiary ” means any entity that is directly or
indirectly controlled by the Company or any entity in which the
Company has a significant equity interest, as determined by the
Committee.
2.26 “
Tax Date ” means the date any withholding tax
obligation arises under the Code for a Participant with respect to
an Incentive Award.
3.1 The
Committee . The Plan will be administered by the Board or by a
committee of the Board. So long as the Company has a class of its
equity securities registered under Section 12 of the Exchange
Act, any committee administering the Plan will consist solely of
two or more members of the Board who are “non-employee
directors” within the meaning of Rule 16b-3 under the
Exchange Act and who are “independent” as required by
the listing standards of the Nasdaq Stock Market (or other
applicable market or exchange on which the Company’s Common
Stock may be quoted or traded. Such a committee, if established,
will act by majority approval of the members (unanimous approval
with respect to action by written consent), and a majority of the
members of such a committee will constitute a quorum. As used in
the Plan, “Committee” will refer to the Board or to
such a committee, if established. To the extent consistent with
applicable corporate law of the Company’s jurisdiction of
incorporation, the Committee may delegate to any officers of the
Company the duties, power and authority of the Committee under the
Plan pursuant to such conditions or limitations as the Committee
may establish; provided, however, that only the Committee may
exercise such duties, power and authority with respect to Eligible
Recipients who are subject to Section 16 of the Exchange Act.
The Committee may exercise its duties, power and authority under
the Plan in its sole and absolute discretion without the consent of
any Participant or other party, unless the Plan specifically
provides otherwise. Each determination, interpretation or other
action made or taken by the Committee pursuant to the provisions of
the Plan will be conclusive and binding for all purposes and on all
persons, and no member of the Committee will be liable for any
action or determination made in good faith with respect to the Plan
or any Incentive Award granted under the Plan.
3.2 Authority
of the Committee .
(a) In accordance
with and subject to the provisions of the Plan, the Committee will
have the authority to determine all provisions of Incentive Awards
as the Committee may deem necessary or desirable and as consistent
with the terms of the Plan, including, without limitation, the
following: (i) the Eligible Recipients to be selected as
Participants; (ii) the nature and extent of the Incentive Awards to
be made to each Participant (including the number of shares of
Common Stock to be subject to each Incentive Award, any exercise
price, the manner in which Incentive Awards will vest or become
exercisable and whether Incentive Awards will be granted in tandem
with other Incentive Awards) and the form of written agreement, if
any, evidencing such Incentive Award; (iii) the time or times
when Incentive Awards will be granted; (iv) the duration of
each Incentive Award; and (v) the restrictions and other
conditions to which the payment or vesting of Incentive Awards may
be subject. In addition, the Committee will have the
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authority under
the Plan in its sole discretion to pay the economic value of any
Incentive Award in the form of cash, Common Stock or any
combination of both.
(b) Subject to
Section 3.2(d), below, the Committee will have the authority
under the Plan to amend or modify the terms of any outstanding
Incentive Award in any manner, including, without limitation, the
authority to modify the number of shares or other terms and
conditions of an Incentive Award, extend the term of an Incentive
Award, accelerate the exercisability or vesting or otherwise
terminate any restrictions relating to an Incentive Award, accept
the surrender of any outstanding Incentive Award or, to the extent
not previously exercised or vested, authorize the grant of new
Incentive Awards in substitution for surrendered Incentive Awards;
provided, however that the amended or modified terms are permitted
by the Plan as then in effect and that any Participant adversely
affected by such amended or modified terms has consented to such
amendment or modification.
(c) In the event
of (i) any reorganization, merger, consolidation,
recapitalization, liquidation, reclassification, stock dividend,
stock split, combination of shares, rights offering, extraordinary
dividend or divestiture (including a spin-off) or any other change
in corporate structure or shares; (ii) any purchase,
acquisition, sale, disposition or write-down of a significant
amount of assets or a significant business; (iii) any change
in accounting principles or practices, tax laws or other such laws
or provisions affecting reported results; (iv) any uninsured
catastrophic losses or extraordinary non-recurring items as
described in Accounting Principles Board Opinion No. 30 or in
management’s discussion and analysis of financial performance
appearing in the Company’s annual report to shareholders for
the applicable year; or (v) any other similar change, in each
case with respect to the Company or any other entity whose
performance is relevant to the grant or vesting of an Incentive
Award, the Committee (or, if the Company is not the surviving
corporation in any such transaction, the board of directors of the
surviving corporation) may, without the consent of any affected
Participant, amend or modify the vesting criteria of any
outstanding Incentive Award that is based in whole or in part on
the financial performance of the Company (or any Subsidiary or
division or other subunit thereof) or such other entity so as
equitably to reflect such event, with the desired result that the
criteria for evaluating such financial performance of the Company
or such other entity will be substantially the same (in the sole
discretion of the Committee or the board of directors of the
surviving corporation) following such event as prior to such event;
provided, however, that the amended or modified terms are permitted
by the Plan as then in effect.
(d)
Notwithstanding any other provision of this Plan other than
Section 4.3, the Committee may not, without prior approval of
the Company’s shareholders, seek to effect any re-pricing of
any previously granted, “underwater” Option or Stock
Appreciation Right by: (i) amending or modifying the terms of
the Option or Stock Appreciation Right to lower the exercise price;
(ii) canceling the underwater Option or Stock Appreciation
Right and granting either (A) replacement Options or Stock
Appreciation Rights having a lower exercise price;
(B) Restricted Stock Awards; or (C) Stock Unit Awards or
Performance Awards in exchange; or (iii) repurchasing
the
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underwater
Options or Stock Appreciation Rights and granting new Incentive
Awards under this Plan. For purposes of this Section 3.2(d),
Options and Stock Appreciation Rights will be deemed to be
“underwater” at any time when the Fair Market Value of
the Common Stock is less than the exercise price of the Option or
Stock Appreciation Right.
(e) In addition to
the authority of the Committee under Section 3.2(b) and
notwithstanding any other provision of the Plan, the Committee may,
in its sole discretion, amend the terms of the Plan or Incentive
Awards with respect to Participants resident outside of the United
States or employed by a non-U.S. Subsidiary in order to comply with
local legal requirements, to otherwise protect the Company’s
or Subsidiary’s interests, or to meet objectives of the Plan,
and may, where appropriate, establish one or more sub-plans
(including the adoption of any required rules and regulations) for
the purposes of qualifying for preferred tax treatment under
foreign tax laws. The Committee shall have no authority, however,
to take action pursuant to this Section 3.2(e): (i) to
reserve shares or grant Incentive Awards in excess of the
limitations provided in Section 4.1; (ii) to effect any
re-pricing in violation of Section 3.2(d); (iii) to grant
Options or Stock Appreciation Rights having an exercise price in
violation of Section 6.2 or 7.2, as the case may be; or
(iv) for which shareholder approval would then be required
pursuant to Section 422 of the Code or the rules of the Nasdaq
Stock Market (or other applicable market or exchange on which the
Company’s Common Stock may be quoted or traded).
(f)
Notwithstanding anything in this Plan to the contrary, the
Committee will determine whether an Incentive Award is subject to
the requirements of Section 409A of the Code and, if
determined to be subject to Section 409A of the Code, the
Committee will make such Incentive Award subject to such written
terms and conditions determined necessary or desirable to cause
such Incentive Award to comply in form with the requirements of
Section 409A of the Code. Further, the Plan, as it relates to
Incentive Awards that are subject to Section 409A of the Code,
will be administered in a manner that is intended to comply with
the requirements of Section 409A of the Code and any
regulations or rulings issued thereunder.
4. Shares
Available for Issuance.
4.1 Maximum
Number of Shares Available; Certain Restrictions on Awards .
Subject to adjustment as provided in Section 4.3 of the Plan,
the maximum number of shares of Common Stock that will be available
for issuance under the Plan will be the sum of:
(b) the number of
shares subject to outstanding awards under the Company’s 1995
Stock Incentive Plan as of the expiration of such plan on
December 18, 2005 which are not thereafter issued or which
have been issued but are subsequently forfeited and which would
otherwise have been available for further issuance under such plan,
assuming, however, that the provisions of Section 4.2 of the
Plan applied thereto;
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(c) the number of
shares issued or Incentive Awards granted under the Plan in
connection with the settlement, assumption or substitution of
outstanding awards or obligations to grant future awards as a
condition of the Company and/or any Subsidiary(ies) acquiring,
merging or consolidating with another entity; and
(d) the number of
shares that are unallocated and available for grant under a stock
plan assumed by the Company or any Subsidiary(ies) in connection
with the merger, consolidation, or acquisition of another entity by
the Company and/or any of its Subsidiaries, based on the applicable
exchange ratio and other transaction terms, but only to the extent
that such shares may be utilized by the Company or its Subsidiaries
following the transaction pursuant to the rules and regulations of
the Nasdaq Stock Market (or other applicable market or exchange on
which the Company’s Common Stock may be quoted or
traded).
Notwithstanding
any other provisions of the Plan to the contrary, (i) no
Participant in the Plan may be granted Options and Stock
Appreciation Rights relating to more than 50,000 shares of Common
Stock in the aggregate during any calendar year; (ii) no
Participant in the Plan may be granted Restricted Stock Awards,
Stock Unit Awards and Performance Awards relating to more than
25,000 shares of Common Stock in the aggregate during any calendar
year; and (iii) no more than 1,500,000 shares of Common Stock
may be issued pursuant to the exercise of Incentive Stock Options
granted under the Plan; provided, however, that the limits in
clauses (i) and (ii), above, will be 150,000 shares and 75,000
shares, respectively, as to a Participant who, during the calendar
year, is first appointed or elected as an officer, hired as an
employee, elected as a director or retained as a consultant by the
Company or who receives a promotion that results in an increase in
responsibilities or duties. All of the foregoing share limits are
subject, in each case, to adjustment as provided in
Section 4.3 of the Plan. The limits in clauses (i) and
(ii) will not apply, however, to the extent Incentive Awards
are granted as a result of the Company’s assumption or
substitution of like awards issued by any acquired, merged or
consolidated entity pursuant to the applicable transaction terms,
nor will any Incentive Stock Options issued in any such assumption
or substitution pursuant to applicable provisions of the Code count
towards the limit in clause (iii).
4.2 Accounting
for Incentive Awards . Shares of Common Stock that are issued
under the Plan or that are potentially issuable pursuant to
outstanding Incentive Awards will be applied to reduce the maximum
number of shares of Common Stock remaining available for issuance
under the Plan; provided, however, that the total number of shares
that may be issued under the Plan shall be reduced by one
additional share for each share issued pursuant to an Incentive
Award other than an Option or a Stock Appreciation Right, or
potentially issuable pursuant to an outstanding Incentive Award
other than an Option or a Stock Appreciation Right. All shares so
subtracted from the amount available under the Plan with respect to
an Incentive Award that lapses, expires, is forfeited (including
issued shares forfeited under a Restricted Stock Award) or for any
reason is terminated unexercised or unvested or is settled or paid
in cash or any form other than shares of Common Stock will
automatically again become available for issuance under the Plan;
provided, however, that (i) any shares which would have been issued
upon any exercise of an Option but for the fact that the exercise
price was paid by a “net exercise” pursuant to
Section 6.4(b) or the tender or attestation as to ownership of
Previously Acquired
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Shares will not
again become available for issuance under the Plan; and
(ii) shares covered by a Stock Appreciation Right, to the
extent exercised, will not again become available for issuance
under the Plan.
4.3 Adjustments
to Shares and Incentive Awards . In the event of any
reorganization, merger, consolidation, recapitalization,
liquidation, reclassification, stock dividend, stock split,
combination of shares, rights offering, divestiture or
extraordinary dividend (including a spin-off) or any other change
in the corporate structure or shares of the Company, the Committee
(or, if the Company is not the surviving corporation in any such
transaction, the board of directors of the surviving corporation)
will make appropriate adjustment (which determination will be
conclusive) as to the number and kind of securities or other
property (including cash) available for issuance or payment under
the Plan and, in order to prevent dilution or enlargement of the
rights of Participants, (a) the number and kind of securities
or other property (including cash) subject to outstanding Incentive
Awards, and (b) the exercise price of outstanding Options and
Stock Appreciation Rights.
Participants in
the Plan will be those Eligible Recipients who, in the judgment of
the Committee, have contributed, are contributing or are expected
to contribute to the achievement of economic objectives of the
Company or its Subsidiaries. Eligible Recipients may be granted
from time to time one or more Incentive Awards, singly or in
combination or in tandem with other Incentive Awards, as may be
determined by the Committee in its sole discretion. Incentive
Awards will be deemed to be granted as of the date specified in the
grant resolution of the Committee, which date will be the date of
any related agreement with the Participant.
6.1 Grant .
An Eligible Recipient may be granted one or more Options under the
Plan, and such Options will be subject to such terms and
conditions, consistent with the other provisions of the Plan, as
may be determined by the Committee in its sole discretion. The
Committee may designate whether an Option is to be considered an
Incentive Stock Option or a Non-Statutory Stock Option. To the
extent that any Incentive Stock Option granted under the Plan
ceases for any reason to qualify as an “incentive
stock
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