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EXHIBIT
10.26
2006 GRANT AGREEMENT
– US EXECUTIVES
R ESMED I
NC .
T ERMS
OF S TOCK O
PTION
This document sets forth the terms of a
Stock Option (the “Option”) granted by ResMed Inc., a
Delaware corporation (the “Company”), pursuant to a
Summary of Stock Option Grant (“Summary”) displayed at
the Web site of the Company’s option plan administrator. The
Summary, which specifies the person to whom the Option is granted
(“Grantee”) and other specific details of the grant,
and the electronic acceptance of the Summary at the Web site of the
Company’s option plan administrator are incorporated herein
by reference.
| A. |
Grantee is an employee of the Company or a Subsidiary of the
Company. |
| B. |
In consideration of services to be performed, Company desires
to afford Grantee an opportunity to purchase shares of its Common
Stock in accordance with the ResMed Inc. 2006 Incentive Award Plan,
as the same may be amended or restated from time to time (the
“Plan”), as hereinafter provided. |
| C. |
Any capitalized terms not otherwise defined herein shall have
the meaning accorded them under the Plan or in the Summary, as
applicable. |
NOW, THEREFORE, in consideration of the
mutual covenants hereinafter set forth and for other good and
valuable consideration, the parties hereto, intending to be legally
bound, agree as follows:
| 1. |
Grant of Option . Company hereby irrevocably grants to
Grantee the right and option (the “Option”) to purchase
all or any part of the aggregate number of shares of the Common
Stock of Company specified in the Summary (the “Option
Shares”) at the Option Price specified in the Summary (the
“Option Price”), during the period and subject to the
conditions set forth in this agreement and in the
Summary. |
| 2. |
Option Period . The Option Period begins on the Grant
Date specified in the Summary and ends on the Expiration Date
specified in the Summary, subject to earlier termination of the
Option Period in accordance with Section 6 hereof. Any vested
portion of the Option shall be exercised in accordance with the
provisions of Sections 3, 4, 5 and 6 hereof during the Option
Period. All rights to exercise the Option, and the Option Period,
shall terminate on the Expiration Date or such earlier date
specified in Section 6 hereof. |
| 3. |
Option Vesting and Acceleration . The Option shall vest
and become exercisable in accordance with the Vesting Schedule
specified in the Summary. Vesting of the Option, however, shall
terminate upon the Grantee’s Termination of Employment.
Notwithstanding the Vesting Schedule specified in the Summary, in
the event of a Change of Control, the Option shall be and become
fully vested and exercisable as of the date of such Change of
Control. For these purposes, Change of Control shall have the
definition set forth in Section 23 hereof. |
| 4. |
Exercise of Option . Except as provided in
Section 9, this Option shall be exercisable during the Option
Period in accordance with the Vesting Schedule (as the same may be
modified by Section 3 hereof) and at the Option Price per
share specified on the Summary. The installments provided for in
the Summary are cumulative, such that each installment that vests
but is not exercised, may be carried forward and exercised in any
future year during the Option Period. |
| 5. |
Manner of Exercise . Exercise of the Option shall be by
written notice as directed by the Company, details of which will be
provided to you. The notice shall be accompanied by payment in full
in cash, check, or a combination thereof, in the aggregate amount
of the Option Price specified in the Summary multiplied by the
number of shares to be purchased by Grantee through such exercise,
plus payment of all applicable withholding taxes. In addition, the
Option Price and associated tax withholding obligations may be paid
through the delivery of a notice that the Grantee has placed a
market sell order with a broker with respect to the shares of
Common Stock then issuable upon exercise of the Option, and the
broker timely pays a sufficient portion of the net proceeds of the
sale to the Company in satisfaction of the Option exercise price
and tax withholding obligations. |
| 6. |
Rights in Event of Death or Termination of Employment
. |
| |
(a) |
If Grantee dies while employed by the Company or a Subsidiary,
or within the first year after Termination of Employment, without
having fully exercised the Option, the executors, administrators,
legatees or distributees of Grantee’s estate shall have the
right, for a period of one year after the date of Grantee’s
death, to exercise the vested, unexercised and unexpired portion,
if any, of the Option as of the date of Grantee’s death, in
whole or in part, to the same extent that Grantee could have
exercised the Option immediately before Grantee’s death,
except that the Option may not be exercised under this subsection
6(a) after the Expiration Date. |
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(b) |
In the event of Grantee’s Termination of Employment for
any reason, and after giving effect to Section 3 regarding
Option acceleration, if applicable, the then vested, unexercised
and unexpired portion, if any, of Grantee’s Option as of the
date of Termination of Employment may be exercised until the
earlier of (i) the first anniversary of such Termination of
Employment, or (ii) the Expiration Date specified in the
Summary. After this date, the Option shall be automatically
cancelled and the Option Period shall terminate. |
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(c) |
For purposes of this Section 6, the employment
relationship of an employee of the Company will be treated as
continuing intact while he is on military or sick leave or other
bona fide leave of absence if such leave does not exceed ninety
days, so long as his right to re-employment is guaranteed either by
statute or by contract, or in any other circumstance as may be
required by law. |
| 7. |
Transferability of Option . |
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(a) |
Subject to subsection 7(b), the Option is not transferable by
Grantee other than by will or by the laws of descent and
distribution in the event of the Grantee’s death, in which
event the Option may be exercised by the heirs or legal
representatives of the Grantee as provided in Section 6
hereof. The Option may be exercised during the lifetime of the
Grantee only by the Grantee. Any attempt at assignment, transfer,
pledge or disposition of the Option contrary to the provisions
hereof or the levy of any execution, attachment or similar process
upon the Option shall be null and void and without effect. Any
exercise of the Option by a person other than the Grantee shall be
accompanied by appropriate proofs of the right of such person to
exercise the Option. |
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(b) |
Notwithstanding the foregoing provisions of subsection 7(a),
the Administrator, in its sole discretion, may permit the transfer
of a non-qualified option held by the Grantee (i) pursuant to
a DRO, or (ii) by gift or contribution to a Permitted
Transferee. Any Option that has been so transferred shall continue
to be subject to all of the terms and conditions as applicable to
the original Grantee, and the transferee shall execute any and all
such documents requested by the Administrator in connection with
the transfer, including without limitation to evidence the transfer
and to satisfy any requirements for an exemption for the transfer
under applicable federal and state securities laws. |
| 8. |
Changes in Capital Structure . The number of Option
Shares covered by this Option and the Option Price shall be
equitably adjusted in the event (the “Event”) of
(i) the payment of any dividend or the making of any
distribution of Common Stock to holders of record of Common Stock,
(ii) any stock split, combination of shares, recapitalization
or other similar change; (iii) the merger or consolidation of
the Company into or with any other corporation; or (iv) the
reorganization, dissolution, liquidation or winding up of the
Company, and the Grantee shall be entitled to receive such new,
additional or other shares of stock of any class, or other property
(including cash), as Grantee would have been entitled to receive as
a matter of law in connection with such Event had Grantee held the
Option Shares on the record date set for such Event. In addition,
upon such change, the Option Price of the Option Shares or other
securities subject to any unexercised portions of this Option shall
be adjusted proportionately so that Grantee shall have the right to
purchase the number of Option Shares (as adjusted) under this
Option at an Option Price (as adjusted) which Grantee could
purchase for the total purchase price applicable to the unexercised
portion of this Option immediately prior to suc |
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