INCENTIVE STOCK OPTION
AGREEMENT
CARDIOVASCULAR SYSTEMS, INC.
AMENDED AND RESTATED 2007 EQUITY INCENTIVE PLAN
THIS AGREEMENT,
made effective as of this
day of
,
, by and between Cardiovascular Systems, Inc., a Delaware
corporation (the “Company”), and
(“Participant”).
WHEREAS,
Participant on the date hereof is a key employee or officer of the
Company or one of its Subsidiaries; and
WHEREAS, the
Company wishes to grant an incentive stock option to Participant to
purchase shares of the Company’s Common Stock pursuant to the
Company’s Amended and Restated 2007 Equity Incentive Plan
(the “Plan”); and
WHEREAS, the
Administrator of the Plan has authorized the grant of an incentive
stock option to Participant and has determined that, as of the
effective date of this Agreement, the fair market value of the
Company’s Common Stock is $
per share;
NOW, THEREFORE, in
consideration of the premises and of the mutual covenants herein
contained, the parties hereto agree as follows:
1.
Grant of Option . The Company hereby grants to
Participant on the date set forth above (the “Date of
Grant”), the right and option (the “Option”) to
purchase all or portions of an aggregate of
(
) shares of Common Stock at a per share price of $
on the terms and conditions set forth herein, and subject to
adjustment pursuant to Section 14 of the Plan. This Option is
intended to be an incentive stock option within the meaning of
Section 422, or any successor provision, of the Internal
Revenue Code of 1986, as amended (the “Code”), and the
regulations thereunder, to the extent permitted under Code
Section 422(d).
2.
Duration and Exercisability .
a.
General . The term during which this Option may be
exercised shall terminate on
,
, except as otherwise provided in Paragraphs 2(b) through 2(d)
below. This Option shall become exercisable according to the
following schedule:
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Cumulative Percentage
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Vesting Date
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of Shares
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Once the Option
becomes exercisable to the extent of one hundred percent (100%) of
the aggregate number of shares specified in Paragraph 1,
Participant may continue to exercise this Option under the terms
and conditions of this Agreement until the termination of the
Option as provided herein. If Participant does not purchase upon an
exercise of this Option the full number of shares which Participant
is then entitled to purchase, Participant may purchase upon any
subsequent exercise prior to this Option’s termination such
previously unpurchased shares in addition to those Participant is
otherwise entitled to purchase.
b.
Termination of Employment (other than Disability or
Death) . If Participant’s employment with the Company
or any Subsidiary is terminated for any reason other than
disability or death, this Option shall completely terminate on the
earlier of (i) the close of business on the three-month
anniversary date of such termination of employment, and
(ii) the expiration date of this Option stated in Paragraph
2(a) above. In such period following the termination of
Participant’s employment, this Option shall be exercisable
only to the extent the Option was exercisable on the vesting date
immediately preceding such termination of employment, but had not
previously been exercised. To the extent this Option was not
exercisable upon such termination of employment, or if Participant
does not exercise the Option within the time specified in this
Paragraph 2(b), all rights of Participant under this Option
shall be forfeited.
c.
Disability . If Participant’s employment
terminates because of disability (as defined in Code
Section 22(e), or any successor provision), this Option shall
terminate on the earlier of (i) the close of business on the
twelve-month anniversary date of such termination of employment,
and (ii) the expiration date of this Option stated in
Paragraph 2(a) above. In such period following the termination of
Participant’s employment, this Option shall be exercisable
only to the extent the Option was exercisable on the vesting date
immediately preceding such termination of employment, but had not
previously been exercised. To the extent this Option was not
exercisable upon such termination of employment, or if Participant
does not exercise the Option within the time specified in this
Paragraph 2(c), all rights of Participant under this Option
shall be forfeited.
d.
Death . In the event of Participant’s death,
this Option shall terminate on the earlier of (i) the close of
business on the twelve-month anniversary of the date of
Participant’s death, and (ii) the expiration date of
this Option stated in Paragraph 2(a) above. In such period
following Participant’s death, this Option may be exercised
by the person or persons to whom Participant’s rights under
this Option shall have passed by Participant’s will or by the
laws of descent and distribution only to the extent the Option was
exercisable on the vesting date immediately preceding the date of
Participant’s death, but had not previously been exercised.
To the extent this Option was not exercisable upon the date of
Participant’s death, or if such person or persons fail to
exercise this
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Option within
the time specified in this Paragraph 2(d), all rights under
this Option shall be forfeited.
a.
General . The Option may be exercised only by
Participant (or other proper party in the event of death or
incapacity), subject to the conditions of the Plan and subject to
such other administrative rules as the Administrator may deem
advisable, by delivering within the option period written notice of
exercise to the Company at its principal office. The notice shall
state the number of shares as to which the Option is being
exercised and shall be accompanied by payment in full of the option
price for all shares designated in the notice. The exercise of the
Option shall be deemed effective upon receipt of such notice by the
Company and upon payment that complies with the terms of the Plan
and this Agreement. The Option may be exercised with respect to any
number or all of the shares as to which it can then be exercised
and, if partially exercised, may be so exercised as to the
unexercised shares any number of times during the option period as
provided herein.
b.
Form of Payment . Subject to the approval of the
Administrator, payment of the option price by Participant shall be
in the form of cash, personal check, certified check or previously
acquired shares of Common Stock of the Company, or any combination
thereof. Any stock so tendered as part of such payment shall be
valued at its Fair Market Value as provided in the Plan. For
purposes of this Agreement, “previously acquired shares of
Common Stock” shall include shares of Common Stock that are
already owned by Participant at the time of exercise.
c.
Stock Transfer Records . As soon as practicable after
the effective exercise of all or any part of the Option,
Participant shall be recorded on the stock transfer books of the
Company as the owner of the shares purchased, and the Company shall
deliver to Participant one or more duly issued stock certificates
evidencing such ownership. All requisite original issue or transfer
documentary stamp taxes shall be paid by the Company.
a.
Employment or Other Relationship; Rights as
Shareholder . This Agreement shall not confer on
Participant any right with respect to the continuance of employment
or any other relationship with the Company or any of its
Subsidiaries, nor will it interfere in any way with the right of
the Company to terminate such employment or relationship.
Participant shall have no rights as a shareholder with respect to
shares subject to this Option until such shares have been issued to
Participant upon exercise of this Option. No adjustment shall be
made for dividends (ordinary or extraordinary, whether in cash,
securities or other property), distributions or other rights for
which the record date is prior to the date such shares are issued,
except as provided in Section 14 of the Plan.
b.
Securities Law Compliance . The exercise of all or
any parts of this Option shall only be effective at such time as
counsel to the Company shall have determined that the issuance and
delivery of Common Stock pursuant to such exercise will not violate
any state or federal securities or other laws. Participant may be
required by the Company, as a condition
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of the
effectiveness of any exercise of this Option, to agree in writing
that all Common Stock to be acquired pursuant to such exercise
shall be held, until such time that such Common Stock is registered
and freely tradable under applicable state and federal securities
laws, for Participant’s own account without a view to any
further distribution thereof, that the certificates for such shares
shall bear an appropriate legend to that effect and that such
shares will be not transferred or disposed of except in compliance
with applicable state and federal securities laws.
c.
Mergers, Recapitalizations, Stock Splits, Etc. Except
as otherwise specifically provided in any employment, change of
control, severance or similar agreement executed
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