Niagen Bioscience, Inc 8-K, filed Jun 22, 2020
Niagen Bioscience, Inc. (NAGE)
8-K
2020-06-22
For: 2020-06-19
View Original
Added on
April 10, 2026
About this 8-K
Niagen Bioscience, Inc filed this 8-K on June 22, 2020, reporting on events of June 19, 2020.
Items reported
- Item 5.02: Director or officer change, or executive pay
- Item 5.07: Shareholder vote results
- Item 9.01: Financial statements and exhibits
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
____________
FORM 8-K
CURRENT
REPORT
PURSUANT TO SECTION 13 OR
15(d) OF THE
SECURITIES
EXCHANGE ACT OF 1934
Date of
Report (Date of earliest event reported): June 19, 2020
CHROMADEX CORPORATION
(Exact name of registrant as specified in its
charter)
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Delaware
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001-37752
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26-2940963
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(State
or other jurisdiction of incorporation)
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(Commission
File Number)
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(IRS
Employer Identification No.)
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10900 Wilshire Blvd. Suite 600, Los Angeles, California
90024
(Address
of principal executive offices, including zip code)
(310) 388-6706
(Registrant's telephone number, including area
code)
Check
the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant
under any of the following provisions:
[
] Written communications
pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
[
] Soliciting material
pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
[
] Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17
CFR 240.14d-2(b))
[
] Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17
CFR 240.13e-4(c))
Securities
registered pursuant to Section 12(b) of the Act:
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Title
of each class
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Trading
Symbol(s)
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Name of
each exchange on which registered
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Common
Stock, par value $0.001 per share
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CDXC
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The
Nasdaq Capital Market
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Indicate by check
mark whether the registrant is an emerging growth company as
defined in Rule 405 of the
Securities Act of 1933 (§230.405 of this chapter) or
Rule 12b-2 of the
Securities Exchange Act of 1934 (§240.12b-2 of this
chapter).
Emerging growth
company ☐
If an
emerging growth company, indicate by check mark if the registrant
has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided
pursuant to Section 13(a) of the Exchange Act. ☐
Item
5.02
Departure
of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of
Certain Officers.
(e) The
Board of Directors of ChromaDex Corporation (the
“Company”) previously approved an amendment to the
ChromaDex Corporation 2017 Equity Incentive Plan, as amended (as
amended, the “Amended 2017 Plan”), subject to approval
by the stockholders of the Company. On June 19, 2020, the
stockholders of the Company approved the Amended 2017
Plan.
A
detailed summary of the material terms and conditions of the
Amended 2017 Plan is set forth under the heading “Proposal 2:
Approval of an Amendment to the 2017 Equity Incentive Plan”
in the Company’s definitive proxy statement for the
Company’s 2020 Annual Meeting of Stockholders filed with the
Securities and Exchange Commission on April 21, 2020 (the
“Proxy Statement”), which is incorporated herein by
reference. The foregoing description of the Amended 2017 Plan and
the summary of the Amended 2017 Plan included in the Proxy
Statement are not complete and are qualified in their entirety by
reference to the full text of the Amended 2017 Plan, which is filed
herewith as Exhibit 99.1.
Item
5.07
Submission
of Matters to a Vote of Security Holders.
Set
forth below are the results of the matters submitted for a vote of
stockholders at the Company’s 2020 Annual Meeting of
Stockholders held on June 19, 2020.
Proposal 1 — Election of directors.
The
following directors were elected to serve until the Company’s
2021 Annual Meeting of Stockholders and until his or her successor is elected, or, if
sooner, until such director’s death, resignation or
removal.
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Director Elected
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For
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Withheld
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Broker Non-Votes
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Frank L. Jaksch
Jr.
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34,540,947
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51,963
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13,290,040
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Stephen
Block
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34,457,360
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135,550
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13,290,040
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|
Jeff
Baxter
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34,370,989
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221,921
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13,290,040
|
|
Robert
Fried
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34,497,284
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95,626
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13,290,040
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Kurt
Gustafson
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33,107,285
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1,485,625
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13,290,040
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Steven
Rubin
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29,592,796
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5,000,114
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13,290,040
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Wendy
Yu
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34,506,411
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86,499
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13,290,040
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Tony
Lau
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34,470,297
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122,613
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13,290,040
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Proposal 2 — Approval of the amendment to the Company’s
2017 Equity Incentive Plan, as amended, to, among other things,
increase the aggregate number of shares of common stock authorized
for issuance under such plan by 5.5 million shares.
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||||||
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For
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Against
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Abstain
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Broker Non-Votes
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28,625,173
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4,551,934
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1,415,803
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13,290,040
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Proposal 3 — Ratification of the appointment of Marcum LLP as
the Company's independent registered public accounting firm for the
fiscal year ending December 31, 2020.
|
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For
|
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Against
|
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Abstain
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Broker Non-Votes
|
|
46,170,910
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1,697,911
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14,129
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0
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Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
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Exhibit Number
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Description
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ChromaDex
Corporation 2017 Equity Incentive Plan, as amended.
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SIGNATURES
Pursuant to the
requirements of the Securities Exchange Act of 1934, the registrant
has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
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CHROMADEX CORPORATION
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Dated:
June 22, 2020
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By:
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/s/
Kevin M. Farr
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Name:
Kevin M. Farr
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Chief
Financial Officer
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Exhibit 99.1
ChromaDex Corporation
AMENDED 2017 Equity Incentive Plan
Adopted by the Board of Directors: April 6, 2017
Approved by the Stockholders: June 20, 2017
Amended by the Board of Directors: January 21, 2018
Amended by the Board of Directors: April 24, 2018
Approved by the Stockholders June 22, 2018
Amended by the Board of Directors: April 16, 2020
Approved by the Stockholders June 19, 2020
1.
General.
(a) Successor
to and Continuation of Prior Plan. The Plan is intended as the successor to and
continuation of the ChromaDex Corporation Second Amended and
Restated 2007 Equity Incentive Plan, (the
“2007
Plan”). Following the
Effective Date, no additional awards may be granted under the 2007
Plan. In addition, from and after 12:01 a.m. Pacific Time
on the Effective Date, all outstanding
awards granted under the 2007 Plan and the ChromaDex, Inc. 2000
Non-Qualified Incentive Stock Option Plan (the
“2000
Plan” and together with
the 2007 Plan, the “Prior
Plans”) will remain
subject to the terms of the 2007 Plan or 2000 Plan, as
applicable; provided,
however, that the following
shares of Common Stock subject to any outstanding stock award granted under the
Prior Plans (collectively, the “Prior
Plans’ Returning
Shares”) will immediately
be added to the Share Reserve (as defined in Section 3(a)) as and
when such shares become Prior Plans’ Returning Shares and
become available for issuance pursuant to Awards granted under this
Plan: (i) any shares subject to such stock award that are
not issued because such stock award or any portion thereof expires
or otherwise terminates without all of the shares covered by such
stock award having been issued; (ii) any shares subject to such
stock award that are not issued because such stock award or any
portion thereof is settled in cash; (iii) any shares issued
pursuant to such stock award that are forfeited back to or
repurchased by the Company because of the failure to meet a
contingency or condition required for the vesting of such shares;
and (iv) any shares that are reacquired, withheld (or not issued)
to satisfy a tax withholding obligation in connection with an award
or to satisfy the purchase price or exercise price of a stock
award. All Awards granted on or after
12:01 a.m. Pacific Time on the
Effective Date will be subject to the terms of this
Plan.
(b) Eligible
Award Recipients. Employees,
Directors and Consultants are eligible to receive Awards. The
persons eligible to receive Inducement Awards are Employees who
meet the criteria set forth in Section 3(f).
(c) Available
Awards. The Plan provides for
the grant of the following types of Awards: (i) Incentive Stock
Options; (ii) Nonstatutory Stock Options; (iii) Stock Appreciation
Rights; (iv) Restricted Stock Awards; (v) Restricted Stock Unit
Awards; (vi) Performance Stock Awards; (vii) Inducement Awards; and
(viii) Other Stock Awards.
(d) Purpose.
The Plan, through the granting of Awards, is intended to help the
Company secure and retain the services of eligible award
recipients, provide incentives for such persons to exert maximum
efforts for the success of the Company and any Affiliate and
provide a means by which the eligible recipients may benefit from
increases in value of the Common Stock.
2.
Administration.
(a) Administration
by Board. The Board will administer the Plan. The Board may
delegate administration of the Plan to a Committee or Committees,
as provided in Section 2(c). Notwithstanding anything to the
contrary set forth herein, only an Inducement Committee has the
power to grant Inducement Awards.
(b) Powers
of Board. The Board will have the power, subject to, and
within the limitations of, the express provisions of the
Plan:
(i) To
determine: (A) who will be granted Awards; (B) when and how each
Award will be granted; (C) what type of Award will be granted; (D)
the provisions of each Award (which need not be identical),
including when a Participant will be permitted to exercise or
otherwise receive cash or Common Stock under the Award; (E) the
number of shares of Common Stock subject to, or the cash value of,
an Award; and (F) the Fair Market Value applicable to a Stock
Award.
(ii) To
construe and interpret the Plan and Awards granted under it, and to
establish, amend and revoke rules and regulations for
administration of the Plan and Awards. The Board, in the exercise
of these powers, may correct any defect, omission or inconsistency
in the Plan or in any Award Agreement, in a manner and to the
extent it will deem necessary or expedient to make the Plan or
Award fully effective.
(iii) To
settle all controversies regarding the Plan and Awards granted
under it.
(iv) To
accelerate, in whole or in part, the time at which an Award may be
exercised or vest (or at which cash or shares of Common Stock may
be issued).
(v) To
suspend or terminate the Plan at any time. Except as otherwise
provided in the Plan (including Section 2(b)(viii)) or an Award
Agreement, suspension or termination of the Plan will not
materially impair a Participant’s rights under an outstanding
Award without his or her written consent.
(vi)
To amend the Plan in any respect the Board deems necessary or
advisable, including, without limitation, by adopting amendments
relating to Incentive Stock Options and certain nonqualified
deferred compensation under Section 409A of the Code and/or to make
the Plan or Awards granted under the Plan compliant with the
requirements for Incentive Stock Options or exempt from or
compliant with the requirements for nonqualified deferred
compensation under Section 409A of the Code, subject to the
limitations, if any, of applicable law. If required by applicable
law or listing requirements, and except as provided in
Section 9(a) relating to Capitalization Adjustments, the
Company will seek stockholder approval of any amendment of the Plan
that (A) materially increases the number of shares of Common
Stock available for issuance under the Plan, (B) materially
expands the class of individuals eligible to receive Awards under
the Plan, (C) materially increases the benefits accruing to
Participants under the Plan, (D) materially reduces the price at
which shares of Common Stock may be issued or purchased under the
Plan, or (E) materially expands the types of Awards available
for issuance under the Plan. Except as otherwise provided in the
Plan (including Section 2(b)(viii)) or an Award Agreement, no
amendment of the Plan will materially impair a Participant’s
rights under an outstanding Award without his or her written
consent.
2
(vii) To
submit any amendment to the Plan for stockholder approval,
including, but not limited to, amendments to the Plan intended to
satisfy the requirements of (A) Section 422 of the Code regarding
incentive stock options or (B) Rule 16b-3.
(viii) To
approve forms of Award Agreements for use under the Plan and to
amend the terms of any one or more outstanding Awards, including,
but not limited to, amendments to provide terms more favorable to
the Participant than previously provided in the Award Agreement,
subject to any specified limits in the Plan that are not subject to
Board discretion; provided,
however, that except as otherwise provided in the Plan
(including this Section 2(b)(viii)) or an Award Agreement, the
Board may not amend the terms of an outstanding Award if the Board,
in its sole discretion, determines that the amendment, taken as a
whole, will materially impair the Participant’s rights under
such Award without his or her written consent.
Notwithstanding the
foregoing or anything in the Plan to the contrary, unless
prohibited by applicable law, the Board may amend the terms of any
outstanding Award or the Plan, or may suspend or terminate the
Plan, without the affected Participant’s consent, (A) to
maintain the qualified status of the Award as an Incentive Stock
Option under Section 422 of the Code, (B) to change the terms of an
Incentive Stock Option, if such change results in impairment of the
Award solely because it impairs the qualified status of the Award
as an Incentive Stock Option under Section 422 of the Code,
(C) to clarify the manner of exemption from, or to bring the
Award or the Plan into compliance with, Section 409A of the Code,
or (D) to comply with other applicable laws or listing
requirements.
(ix) Generally,
to exercise such powers and to perform such acts as the Board deems
necessary or expedient to promote the best interests of the Company
and that are not in conflict with the provisions of the Plan or
Awards.
(x) To
adopt such procedures and sub-plans as are necessary or appropriate
to permit participation in the Plan by Employees, Directors or
Consultants who are foreign nationals or employed outside the
United States (provided that Board approval will not be necessary
for immaterial modifications to the Plan or any Award Agreement
that are required for compliance with the laws of the relevant
foreign jurisdiction).
(i) General.
The Board may delegate some or all of
the administration of the Plan to a Committee or Committees. If
administration of the Plan is delegated to a Committee, the
Committee will have, in connection with the administration of the
Plan, the powers theretofore possessed by the Board that have been
delegated to the Committee, including the power to delegate to a
subcommittee of the Committee any of the administrative powers the
Committee is authorized to exercise (and references in this Plan to
the Board will thereafter be to the Committee or subcommittee, as
applicable). Any delegation of administrative powers will be
reflected in resolutions, not inconsistent with the provisions of
the Plan, adopted from time to time by the Board or Committee (as
applicable). The Committee may, at any time, abolish the
subcommittee and/or revest in the Committee any powers delegated to
the subcommittee. The Board may retain the authority to
concurrently administer the Plan with the Committee and may, at any
time, revest in the Board some or all of the powers previously
delegated.
3
(ii) Rule
16b-3 Compliance. The Committee
may consist solely of two (2) or more Non-Employee Directors, in
accordance with Rule 16b-3.
(iii) Inducement
Awards. Notwithstanding any
other provision of the Plan to the contrary, all Inducement Awards
must be granted by an Inducement Committee.
(d) Delegation
to an Officer. The Board may delegate to one (1) or more
Officers the authority to do one or both of the following: (i)
designate Employees who are not Officers to be recipients of
Options and SARs (and, to the extent permitted by applicable law,
other Stock Awards) and, to the extent permitted by applicable law,
the terms of such Awards; and (ii) determine the number of shares
of Common Stock to be subject to such Stock Awards granted to such
Employees; provided,
however, that the Board resolutions regarding such
delegation will specify the total number of shares of Common Stock
that may be subject to the Stock Awards granted by such Officer and
that such Officer may not grant a Stock Award to himself or
herself. Any such Stock Awards will be granted on the form of Award
Agreement most recently approved for use by the Committee or the
Board, unless otherwise provided in the resolutions approving the
delegation of authority. The Board may not delegate authority to an
Officer who is acting solely in the capacity of an Officer (and not
also as a Director) to determine the Fair Market Value pursuant to
Section 13(z)(iii).
(e) Effect
of Board’s Decision. All determinations,
interpretations and constructions made by the Board in good faith
will not be subject to review by any person and will be final,
binding and conclusive on all persons.
(f) Cancellation
and Re-Grant of Stock Awards. Neither the Board nor any
Committee will have the authority to (i) reduce the exercise or
strike price of any outstanding Option or SAR under the Plan or
(ii) cancel any outstanding Option or SAR that has an exercise or
strike price greater than the then-current Fair Market Value of the
Common Stock in exchange for cash or other Stock Awards under the
Plan, unless the stockholders of the Company have approved such an
action within twelve (12) months prior to such an
event.
(g) Dividends
and Dividend Equivalents. Dividends or dividend equivalents
may be paid or credited, as applicable, with respect to any shares
of Common Stock subject to a Stock Award, as determined by the
Board and contained in the applicable Stock Award Agreement;
provided, however, that (i)
no dividends or dividend equivalents may be paid with respect to
any such shares before the date such shares have vested under the
terms of such Stock Award Agreement, (ii) any dividends or dividend
equivalents that are credited with respect to any such shares will
be subject to all of the terms and conditions applicable to such
shares under the terms of such Stock Award Agreement (including,
but not limited to, any vesting conditions), and (iii) any
dividends or dividend equivalents that are credited with respect to
any such shares will be forfeited to the Company on the date, if
any, such shares are forfeited to or repurchased by the Company due
to a failure to meet any vesting conditions under the terms of such
Stock Award Agreement.
4
3.
Shares Subject to the Plan.
(i) Subject
to Section 9(a) relating to Capitalization Adjustments, the
aggregate number of shares of Common Stock that may be issued
pursuant to Stock Awards from and after the Effective Date will not
exceed 20,793,960 shares, which is the sum of (A) 3,000,000 shares
approved by the Board in April 2017 and subsequently approved by
the Company’s stockholders, plus (B) an additional 6,000,000
shares approved by the Board in April 2018 and subsequently
approved by the Company’s stockholders, plus (C) an
additional 5,500,000 shares approved by the Board in April 2020 and
subsequently approved by the Company’s stockholders, plus (D)
the Prior Plans’ Returning Shares, if any, which become
available for grant under this Plan from time to time (such
aggregate number of shares described in (A), (B), (C), and (D)
above, the “Share
Reserve”), plus (E) 500,000 shares approved by the
Board in January 2018 that may be issued pursuant to Inducement
Awards granted under Section 3(f) of the Plan.
(ii)
If a Stock Award or any portion thereof (i) expires or otherwise
terminates without all of the shares covered by such Stock Award
having been issued or (ii) is settled in cash (i.e., the
Participant receives cash rather than stock), such expiration,
termination or settlement will not reduce (or otherwise offset) the
number of shares of Common Stock that may be available for issuance
under the Plan. If any shares of Common Stock issued pursuant to a
Stock Award are forfeited back to or repurchased by the Company
because of the failure to meet a contingency or condition required
to vest such shares in the Participant, then the shares that are
forfeited or repurchased will revert to and again become available
for issuance under the Plan. Notwithstanding the foregoing, any
Inducement Shares that become available for issuance under the Plan
pursuant to this subsection 3(a) will only become available for
issuance pursuant to Inducement Awards.
(iii) The
number of shares of Common Stock available for issuance under the
Plan will be reduced by: (A) one share for each share of Common
Stock issued pursuant to an Appreciation Award granted under the
Plan and (B) 1.5 shares for each share of Common Stock issued
pursuant to a Full Value Award granted under the Plan. The number
of shares of Common Stock available for issuance under the Plan
will be increased by: (A) one share for each Returning Share
subject to an Appreciation Award and (B) 1.5 shares share for each
Returning Share subject to a Full Value Award.
(iv) For
clarity, the Share Reserve limit in Section 3(a) is a limit on the
number of shares of Common Stock that may be issued pursuant to
Stock Awards and does not limit the granting of Awards, except that
the Company will keep available at all times the number of shares
of Common Stock reasonably required to satisfy its obligations to
issue shares pursuant to such Awards. Shares may be issued in
connection with a merger or acquisition as permitted by, as
applicable, NASDAQ Listing Rule 5635(c), NYSE Listed Company Manual
Section 303A.08, NYSE American Company Guide Section 711 or other
applicable rule, and such issuance will not reduce the number of
shares available for issuance under the Plan.
5
(b) Shares
Not Available For Subsequent Issuance. The following shares
of Common Stock will not become available again for issuance under
the Plan: (i) any shares that are reacquired or withheld (or not
issued) by the Company to satisfy the exercise or purchase price of
an Appreciation Award or a Full Value Award (including any shares
subject to such award that are not delivered because such award is
exercised through a reduction of shares subject to such award
(i.e., “net exercised”)); (ii) any shares that are
reacquired or withheld (or not issued) by the Company to satisfy a
tax withholding obligation in connection with an Appreciation Award
or a Full Value Award; and (iii) any shares repurchased by the
Company on the open market with the proceeds of the exercise or
purchase price of an Appreciation Award or a Full Value
Award.
(c) Incentive
Stock Option Limit. Subject to the Share Reserve and Section
9(a) relating to Capitalization Adjustments, the aggregate maximum
number of shares of Common Stock that may be issued pursuant to the
exercise of Incentive Stock Options will be 23,087,920 shares of
Common Stock.
(d) Reserved.
(e) Limits
on Grants to Non-Employee Directors. The maximum number of
shares of Common Stock subject to Stock Awards granted under the
Plan or otherwise during any one calendar year to any Non-Employee
Director, taken together with any cash fees paid by the Company to
such Non-Employee Director during such calendar year for service on
the Board, will not exceed six hundred thousand dollars ($600,000)
in total value (calculating the value of any such Stock Awards
based on the grant date fair value of such Stock Awards for
financial reporting purposes), or, with respect to the calendar
year in which a Non-Employee Director is first appointed or elected
to the Board, nine hundred thousand dollars
($900,000).
(f) Inducement
Shares. This subsection 3(f) will apply with respect to the
shares reserved under this Plan by action of the Board (or a
committee thereof) to be used exclusively for the grant of
Inducement Awards in compliance with NASDAQ Listing Rule 5635(c)(4)
(the “Inducement
Shares”). Notwithstanding anything to the contrary in
this Plan, an Inducement Award may be granted only to an Employee
who has not previously been an Employee or a non-Employee Director
of the Company or an Affiliate, or following a bona fide period of
non-employment, as an inducement material to the individual’s
entering into employment with the Company within the meaning of
Rule 5635(c)(4) of the NASDAQ Listing Rules.
(g) Source
of Shares. The stock issuable under the Plan will be shares
of authorized but unissued or reacquired Common Stock, including
shares repurchased by the Company on the open market or
otherwise.
6
4.
Eligibility.
(a) Eligibility
for Specific Stock Awards. Incentive Stock Options may be
granted only to employees of the Company or a “parent
corporation” or “subsidiary corporation” thereof
(as such terms are defined in Sections 424(e) and 424(f) of the
Code). Stock Awards other than Incentive Stock Options may be
granted to Employees, Directors and Consultants; provided, however, that Stock Awards
may not be granted to Employees, Directors and Consultants who are
providing Continuous Service only to any “parent” of
the Company, as such term is defined in Rule 405, unless (i) the
stock underlying such Stock Awards is treated as “service
recipient stock” under Section 409A of the Code (for example,
because the Stock Awards are granted pursuant to a corporate
transaction such as a spin off transaction) or (ii) the Company, in
consultation with its legal counsel, has determined that such Stock
Awards are otherwise exempt from or alternatively comply with
Section 409A of the Code.
(b) Ten
Percent Stockholders. A Ten Percent Stockholder will not be
granted an Incentive Stock Option unless the exercise price of such
Option is at least one hundred ten percent (110%) of the Fair
Market Value on the date of grant and the Option is not exercisable
after the expiration of five (5) years from the date of
grant.
Each
Option or SAR Agreement will be in such form and will contain such
terms and conditions as the Board deems appropriate. All Options
will be separately designated Incentive Stock Options or
Nonstatutory Stock Options at the time of grant, and, if
certificates are issued, a separate certificate or certificates
will be issued for shares of Common Stock purchased on exercise of
each type of Option. If an Option is not specifically designated as
an Incentive Stock Option, or if an Option is designated as an
Incentive Stock Option but some portion or all of the Option fails
to qualify as an Incentive Stock Option under the applicable rules,
then the Option (or portion thereof) will be a Nonstatutory Stock
Option. The terms and conditions of separate Option or SAR
Agreements need not be identical; provided, however, that each Award
Agreement will conform to (through incorporation of the provisions
hereof by reference in the applicable Award Agreement or otherwise)
the substance of each of the following provisions:
(a) Term.
Subject to the provisions of Section 4(b) regarding Ten Percent
Stockholders, no Option or SAR will be exercisable after the
expiration of ten (10) years from the date of its grant or such
shorter period specified in the Award Agreement.
(b) Exercise
Price. Subject to the provisions of Section 4(b) regarding
Ten Percent Stockholders, the exercise or strike price of each
Option or SAR will be not less than one hundred percent (100%) of
the Fair Market Value of the Common Stock subject to the Option or
SAR on the date the Award is granted. Notwithstanding the
foregoing, an Option or SAR may be granted with an exercise or
strike price lower than one hundred percent (100%) of the Fair
Market Value of the Common Stock subject to the Award if such Award
is granted pursuant to an assumption of or substitution for another
option or stock appreciation right pursuant to a Corporate
Transaction and in a manner consistent with the provisions of
Section 409A of the Code and, if applicable, Section 424(a) of the
Code. Each SAR will be denominated in
shares of Common Stock equivalents.
(c) Purchase
Price for Options. The purchase price of Common Stock
acquired pursuant to the exercise of an Option may be paid, to the
extent permitted by applicable law and as determined by the Board
in its sole discretion, by any combination of the methods of
payment set forth below. The Board will have the authority to grant
Options that do not permit all of the following methods of payment
(or that otherwise restrict the ability to use certain methods) and
to grant Options that require the consent of the Company to use a
particular method of payment. The permitted methods of payment are
as follows:
7
(i) by
cash (including electronic funds transfers), check, bank draft or
money order payable to the Company;
(ii) pursuant
to a program developed under Regulation T as promulgated by the
Federal Reserve Board that, prior to the issuance of the stock
subject to the Option, results in either the receipt of cash (or
check) by the Company or the receipt of irrevocable instructions to
pay the aggregate exercise price to the Company from the sales
proceeds;
(iii) by
delivery to the Company (either by actual delivery or attestation)
of shares of Common Stock;
(iv) if
an Option is a Nonstatutory Stock Option, by a “net
exercise” arrangement pursuant to which the Company will
reduce the number of shares of Common Stock issuable upon exercise
by the largest whole number of shares with a Fair Market Value that
does not exceed the aggregate exercise price; provided, however, that the Company
will accept a cash or other payment from the Participant to the
extent of any remaining balance of the aggregate exercise price not
satisfied by such reduction in the number of whole shares to be
issued. Shares of Common Stock will no longer be subject to an
Option and will not be exercisable thereafter to the extent that
(A) shares issuable upon exercise are used to pay the exercise
price pursuant to the “net exercise,” (B) shares are
delivered to the Participant as a result of such exercise, and (C)
shares are withheld to satisfy tax withholding obligations;
or
(v) in
any other form of legal consideration that may be acceptable to the
Board and specified in the applicable Award Agreement.
(d) Exercise
and Payment of a SAR. To exercise any outstanding SAR, the
Participant must provide written notice of exercise to the Company
in compliance with the provisions of the Award Agreement evidencing
such SAR. The appreciation distribution payable on the exercise of
a SAR will be not greater than an amount equal to the excess of
(A) the aggregate Fair Market Value (on the date of the
exercise of the SAR) of a number of shares of Common Stock equal to
the number of Common Stock equivalents in which the Participant is
vested under such SAR, and with respect to which the Participant is
exercising the SAR on such date, over (B) the aggregate strike
price of the number of Common Stock equivalents with respect to
which the Participant is exercising the SAR on such date. The
appreciation distribution may be paid in Common Stock, in cash, in
any combination of the two or in any other form of consideration,
as determined by the Board and contained in the Award Agreement
evidencing such SAR.
(e) Transferability
of Options and SARs. The Board may, in its sole discretion,
impose such limitations on the transferability of Options and SARs
as the Board will determine. In the absence of such a determination
by the Board to the contrary, the restrictions set forth in this
Section 5(e) on the transferability of Options and SARs will apply.
Notwithstanding the foregoing or anything in the Plan or a Stock
Award Agreement to the contrary, no Option or SAR may be
transferred to any financial institution without prior stockholder
approval.
8
(i) Restrictions
on Transfer. An Option or SAR will not be transferable,
except by will or by the laws of descent and distribution (or
pursuant to Sections 5(e)(ii) and 5(e)(iii)), and will be
exercisable during the lifetime of the Participant only by the
Participant. The Board may permit transfer of the Option or SAR in
a manner that is not prohibited by applicable tax and securities
laws. Except as explicitly provided in the Plan, neither an Option
nor a SAR may be transferred for consideration.
(ii) Domestic
Relations Orders. Subject to the approval of the Board or a
duly authorized Officer, an Option or SAR may be transferred
pursuant to the terms of a domestic relations order, official
marital settlement agreement or other divorce or separation
instrument as permitted by Treasury Regulations Section
1.421-1(b)(2). If an Option is an Incentive Stock Option, such
Option may be deemed to be a Nonstatutory Stock Option as a result
of such transfer.
(iii) Beneficiary
Designation. Subject to the approval of the Board or a duly
authorized Officer, a Participant may, by delivering written notice
to the Company, in a form approved by the Company (or the
designated broker), designate a third party who, upon the death of
the Participant, will thereafter be entitled to exercise the Option
or SAR and receive the Common Stock or other consideration
resulting from such exercise. In the absence of such a designation,
upon the death of the Participant, the executor or administrator of
the Participant’s estate will be entitled to exercise the
Option or SAR and receive the Common Stock or other consideration
resulting from such exercise. However, the Company may prohibit
designation of a beneficiary at any time, including due to any
conclusion by the Company that such designation would be
inconsistent with the provisions of applicable laws.
(f)
Vesting Generally.
The total number of shares of Common Stock subject to an Option or
SAR may vest and become exercisable in periodic installments that
may or may not be equal. The Option or SAR may be subject to such
other terms and conditions on the time or times when it may or may
not be exercised (which may be based on the satisfaction of
Performance Goals or other criteria) as the Board may deem
appropriate. The vesting provisions of individual Options or SARs
may vary. The provisions of this Section 5(f) are subject to any
Option or SAR provisions governing the minimum number of shares of
Common Stock as to which an Option or SAR may be
exercised.
(g) Termination
of Continuous Service. Except
as otherwise provided in the applicable Award Agreement or other
written agreement between a Participant and the Company or an
Affiliate, if a Participant’s Continuous Service terminates
(other than for Cause and other than upon the Participant’s
death or Disability), the Participant may exercise his or her
Option or SAR (to the extent that the Participant was entitled to
exercise such Option or SAR as of the date of termination of
Continuous Service), but only within such period of time ending on
the earlier of (i) the date that is three (3) months following such
termination of Continuous Service (or such longer or shorter period
specified in the Award Agreement), and (ii) the expiration of the
term of the Option or SAR as set forth in the Award Agreement. If,
after such termination of Continuous Service, the Participant does
not exercise his or her Option or SAR (as applicable) within the
applicable time frame, the Option or SAR (as applicable) will
terminate.
9
(h) Extension
of Termination Date. Except as
otherwise provided in the applicable Award Agreement or other
written agreement between a Participant and the Company or an
Affiliate, if the exercise of an Option or SAR following the
termination of a Participant’s Continuous Service (other than
for Cause and other than upon the Participant’s death or
Disability) would be prohibited at any time solely because the
issuance of shares of Common Stock would violate the registration
requirements under the Securities Act, then the Option or SAR will
terminate on the earlier of (i) the expiration of a total period of
time (that need not be consecutive) equal to the applicable
post-termination exercise period after the termination of the
Participant’s Continuous Service during which the exercise of
the Option or SAR would not be in violation of such registration
requirements, or (ii) the expiration of the term of the Option or
SAR as set forth in the applicable Award Agreement. In addition,
except as otherwise provided in the applicable Award Agreement or
other written agreement between a Participant and the Company or an
Affiliate, if the sale of any Common Stock received upon exercise
of an Option or SAR following the termination of a
Participant’s Continuous Service (other than for Cause) would
violate the Company’s insider trading policy, then the Option
or SAR will terminate on the earlier of (i) the expiration of a
total period of time (that need not be consecutive) equal to the
applicable post-termination exercise period after the termination
of the Participant’s Continuous Service during which the sale
of the Common Stock received upon exercise of the Option or SAR
would not be in violation of the Company’s insider trading
policy, or (ii) the expiration of the term of the Option or SAR as
set forth in the applicable Award Agreement.
(i) Disability
of Participant. Except as
otherwise provided in the applicable Award Agreement or other
written agreement between a Participant and the Company or an
Affiliate, if a Participant’s Continuous Service terminates
as a result of the Participant’s Disability, the Participant
may exercise his or her Option or SAR (to the extent that the
Participant was entitled to exercise such Option or SAR as of the
date of termination of Continuous Service), but only within such
period of time ending on the earlier of (i) the date that is twelve
(12) months following such termination of Continuous Service (or
such longer or shorter period specified in the Award
Agreement), and (ii) the
expiration of the term of the Option or SAR as set forth in the
Award Agreement. If, after such termination of Continuous Service,
the Participant does not exercise his or her Option or SAR (as
applicable) within the applicable time frame, the Option or SAR (as
applicable) will terminate.
(j) Death
of Participant. Except
as otherwise provided in the applicable Award Agreement or other
written agreement between a Participant and the Company or an
Affiliate, if (i) a Participant’s Continuous Service
terminates as a result of the Participant’s death, or (ii) a
Participant dies within the period (if any) specified in the Award
Agreement for exercisability after the termination of the
Participant’s Continuous Service (for a reason other than
death), then the Participant’s Option or SAR may be exercised
(to the extent that the Participant was entitled to exercise such
Option or SAR as of the date of death) by the Participant’s
estate, by a person who acquired the right to exercise the Option
or SAR by bequest or inheritance, or by a person designated to
exercise the Option or SAR upon the Participant’s death, but
only within such period of time ending on the earlier of (i) the
date that is eighteen (18) months following the date of death (or
such longer or shorter period specified in the Award Agreement),
and (ii) the expiration of the term of the Option or SAR as set
forth in the Award Agreement. If, after the Participant’s
death, the Option or SAR (as applicable) is not exercised within
the applicable time frame, the Option or SAR (as applicable) will
terminate.
10
(k) Termination
for Cause. Except as explicitly
provided otherwise in the applicable Award Agreement or other
individual written agreement between a Participant and the Company
or an Affiliate, if a Participant’s Continuous Service is
terminated for Cause, the Participant’s Option or SAR will
terminate immediately upon such termination of Continuous Service,
and the Participant will be prohibited from exercising his or her
Option or SAR from and after the time of such termination of
Continuous Service.
(l) Non-Exempt
Employees. If an Option or SAR is granted to an Employee who
is a non-exempt employee for purposes of the Fair Labor Standards
Act of 1938, as amended, the Option or SAR will not be first
exercisable for any shares of Common Stock until at least
six (6) months following the date of grant of the Option or
SAR (although the Award may vest prior to such date). Consistent
with the provisions of the Worker Economic Opportunity Act, (i) if
such non-exempt employee dies or suffers a Disability, (ii) upon a
Corporate Transaction in which such Option or SAR is not assumed,
continued or substituted, (iii) upon a Change in Control, or (iv)
upon the Participant’s retirement (as such term may be
defined in the Participant’s Award Agreement, in another
written agreement between the Participant and the Company or an
Affiliate, or, if no such definition, in accordance with the
Company’s then current employment policies and guidelines),
the vested portion of any Options and SARs may be exercised earlier
than six (6) months following the date of grant. The foregoing
provision is intended to operate so that any income derived by a
non-exempt employee in connection with the exercise or vesting of
an Option or SAR will be exempt from his or her regular rate of
pay. To the extent permitted and/or required for compliance with
the Worker Economic Opportunity Act to ensure that any income
derived by a non-exempt employee in connection with the exercise,
vesting or issuance of any shares under any other Stock Award will
be exempt from the employee’s regular rate of pay, the
provisions of this Section 5(l) will apply to all Stock Awards and
are hereby incorporated by reference into such Stock Award
Agreements.
(a) Restricted
Stock Awards. Each Restricted Stock Award Agreement will be
in such form and will contain such terms and conditions as the
Board deems appropriate. To the extent
consistent with the Company’s bylaws, at the
Board’s election, shares of Common Stock underlying a
Restricted Stock Award may be (i) held in book entry form subject
to the Company’s instructions until any restrictions relating
to the Restricted Stock Award lapse, or (ii) evidenced by a
certificate, which certificate will be held in such form and manner
as determined by the Board. The terms and conditions of separate
Restricted Stock Award Agreements need not be identical;
provided, however, that
each Restricted Stock Award Agreement will conform to (through
incorporation of the provisions hereof by reference in the
applicable Award Agreement or otherwise) the substance of each of
the following provisions:
(i) Consideration.
A Restricted Stock Award may be awarded in consideration for (A)
cash (including electronic funds transfers), check, bank draft or
money order payable to the Company, (B) past services to the
Company or an Affiliate, or (C) any other form of legal
consideration (including future services) that may be acceptable to
the Board, in its sole discretion, and permissible under applicable
law.
11
(ii) Vesting.
Shares of Common Stock awarded under a Restricted Stock Award
Agreement may be subject to forfeiture to or repurchase by the
Company in accordance with a vesting schedule to be determined by
the Board.
(iii) Termination
of Continuous Service. If a Participant’s Continuous
Service terminates, the Company may receive through a forfeiture
condition or a repurchase right any or all of the shares of Common
Stock held by the Participant that have not vested as of the date
of such termination under the terms of the Participant’s
Restricted Stock Award Agreement.
(iv) Transferability.
Rights to acquire shares of Common Stock under a Restricted Stock
Award Agreement will be transferable by the Participant only upon
such terms and conditions as are set forth in the Restricted Stock
Award Agreement, as the Board will determine in its sole
discretion, so long as Common Stock awarded under the Restricted
Stock Award Agreement remains subject to the terms of the
Restricted Stock Award Agreement. Notwithstanding the foregoing or
anything in the Plan or a Restricted Stock Award Agreement to the
contrary, no Restricted Stock Award may be transferred to any
financial institution without prior stockholder
approval.
(v) Dividends.
A Restricted Stock Award Agreement may provide that any dividends
paid on Restricted Stock will be subject to the same vesting and
forfeiture restrictions as apply to the shares subject to the
Restricted Stock Award to which they relate.
(b) Restricted
Stock Unit Awards. Each
Restricted Stock Unit Award Agreement will be in such form and will
contain such terms and conditions as the Board deems appropriate.
The terms and conditions of separate Restricted Stock Unit Award
Agreements need not be identical; provided, however, that each
Restricted Stock Unit Award Agreement
will conform to (through incorporation of the provisions hereof by
reference in the applicable Award Agreement or
otherwise) the substance of each of
the following provisions:
(i) Consideration.
At the time of grant of a Restricted
Stock Unit Award, the Board will determine the consideration, if
any, to be paid by the Participant upon delivery of each share of
Common Stock subject to the Restricted Stock Unit Award. The
consideration to be paid (if any) by the Participant for each share
of Common Stock subject to a Restricted Stock Unit Award may be
paid in any form of legal consideration that may be acceptable to
the Board, in its sole discretion, and permissible under applicable
law.
(ii) Vesting.
At the time of the grant of a
Restricted Stock Unit Award, the Board may impose such restrictions
on or conditions to the vesting of the Restricted Stock Unit Award
as it, in its sole discretion, deems
appropriate.
(iii) Payment.
A Restricted Stock Unit Award may be
settled by the delivery of shares of Common Stock, their cash
equivalent, any combination thereof or in any other form of
consideration, as determined by the Board and contained in the
Restricted Stock Unit Award Agreement.
12
(iv) Additional
Restrictions. At the time of
the grant of a Restricted Stock Unit Award, the Board, as it deems
appropriate, may impose such restrictions or conditions that delay
the delivery of the shares of Common Stock (or their cash
equivalent) subject to the Restricted Stock Unit Award to a time
after the vesting of the Restricted Stock Unit
Award.
(v) Dividend
Equivalents. Dividend
equivalents may be credited in respect of shares of Common Stock
covered by a Restricted Stock Unit Award, as determined by the
Board and contained in the Restricted Stock Unit Award Agreement.
At the sole discretion of the Board, such dividend equivalents may
be converted into additional shares of Common Stock covered by the
Restricted Stock Unit Award in such manner as determined by the
Board. Any additional shares covered by the Restricted Stock Unit
Award credited by reason of such dividend equivalents will be
subject to all of the same terms and conditions of the underlying
Restricted Stock Unit Award Agreement to which they
relate.
(vi) Termination
of Continuous Service. Except
as otherwise provided in the applicable Restricted Stock Unit Award
Agreement or other written agreement between a Participant and the
Company or an Affiliate, if a Participant’s Continuous
Service terminates, any portion of the Participant’s
Restricted Stock Unit Award that has not vested as of the
date of such termination will be
forfeited upon such termination.
(c) Performance
Awards.
(i) Performance
Stock Awards. A Performance Stock Award is a Stock Award
that is payable (including that may be granted, vest or be
exercised) contingent upon the attainment during a Performance
Period of specified Performance Goals. A Performance Stock Award
may, but need not, require the Participant’s completion of a
specified period of Continuous Service. The length of any
Performance Period, the Performance Goals to be achieved during the
Performance Period, and the measure of whether and to what degree
such Performance Goals have been attained will be conclusively
determined by the Board, in its sole discretion. In addition, to
the extent permitted by applicable law and the applicable Award
Agreement, the Board may determine that cash may be used in payment
of Performance Stock Awards.
(ii) Board
Discretion. With respect to any Performance Stock Award, the
Board retains the discretion to (A) reduce or eliminate the
compensation or economic benefit due upon attainment of the
Performance Goals on the basis of any considerations as the Board,
in its sole discretion, may determine and (B) define the manner of
calculating the Performance Criteria it selects to use for a
Performance Period.
(d) Other
Stock Awards. Other forms of Stock Awards valued in whole or
in part by reference to, or otherwise based on, Common Stock,
including the appreciation in value thereof (e.g., options or stock appreciation
rights with an exercise price or strike price less than one hundred
percent (100%) of the Fair Market Value of the Common Stock at the
time of grant) may be granted either alone or in addition to Stock
Awards granted under Section 5 and this Section 6. Subject to the
provisions of the Plan, the Board will have sole and complete
authority to determine the persons to whom and the time or times at
which such Other Stock Awards will be granted, the number of shares
of Common Stock (or the cash equivalent thereof) to be granted
pursuant to such Other Stock Awards and all other terms and
conditions of such Other Stock Awards.
13
7.
Covenants of the Company.
(a) Availability
of Shares. The Company will keep available at all times the
number of shares of Common Stock reasonably required to satisfy
then-outstanding Stock Awards.
(b) Securities
Law Compliance. The Company will seek to obtain from each
regulatory commission or agency having jurisdiction over the Plan
the authority required to grant Stock Awards and to issue and sell
shares of Common Stock upon exercise of the Stock Awards;
provided, however, that
this undertaking will not require the Company to register under the
Securities Act the Plan, any Stock Award or any Common Stock issued
or issuable pursuant to any such Stock Award. If, after reasonable
efforts and at a reasonable cost, the Company is unable to obtain
from any such regulatory commission or agency the authority that
counsel for the Company deems necessary for the lawful issuance and
sale of Common Stock under the Plan, the Company will be relieved
from any liability for failure to issue and sell Common Stock upon
exercise of such Stock Awards unless and until such authority is
obtained. A Participant will not be eligible for the grant of an
Award or the subsequent issuance of cash or Common Stock pursuant
to the Award if such grant or issuance would be in violation of any
applicable securities law.
(c) No
Obligation to Notify or Minimize Taxes. The Company will
have no duty or obligation to any Participant to advise such holder
as to the time or manner of exercising a Stock Award. Furthermore,
the Company will have no duty or obligation to warn or otherwise
advise such holder of a pending termination or expiration of an
Award or a possible period in which the Award may not be exercised.
The Company has no duty or obligation to minimize the tax
consequences of an Award to the holder of such Award.
8.
Miscellaneous.
(a) Use
of Proceeds from Sales of Common Stock. Proceeds from the
sale of shares of Common Stock issued pursuant to Stock Awards will
constitute general funds of the Company.
(b) Corporate
Action Constituting Grant of Awards. Corporate action
constituting a grant by the Company of an Award to any Participant
will be deemed completed as of the date of such corporate action,
unless otherwise determined by the Board, regardless of when the
instrument, certificate or letter evidencing the Award is
communicated to, or actually received or accepted by, the
Participant. In the event that the corporate records (e.g., Board consents, resolutions or
minutes) documenting the corporate action constituting the grant
contain terms (e.g.,
exercise price, vesting schedule or number of shares) that are
inconsistent with those in the Award Agreement or related grant
documents as a result of a clerical error in the papering of the
Award Agreement or related grant documents, the corporate records
will control and the Participant will have no legally binding right
to the incorrect term in the Award Agreement or related grant
documents.
14
(c) Stockholder
Rights. No Participant will be deemed to be the holder of,
or to have any of the rights of a holder with respect to, any
shares of Common Stock subject to an Award unless and until (i)
such Participant has satisfied all requirements for exercise of, or
the issuance of shares of Common Stock under, the Award pursuant to
its terms, and (ii) the issuance of the Common Stock subject to
such Award has been entered into the books and records of the
Company.
(d) No
Employment or Other Service Rights. Nothing in the Plan, any Award Agreement or any
other instrument executed thereunder or in connection with any
Award granted pursuant thereto will confer upon any
Participant any right to continue to serve the Company or an
Affiliate in the capacity in effect at the time the Award was
granted or will affect the right of the Company or an Affiliate to
terminate (i) the employment of an Employee with or without notice
and with or without cause, (ii) the service of a Consultant
pursuant to the terms of such Consultant’s agreement with the
Company or an Affiliate, or (iii) the service of a Director
pursuant to the bylaws of the Company or an Affiliate, and any
applicable provisions of the corporate law of the state in which
the Company or the Affiliate is incorporated, as the case may
be.
(e) Change
in Time Commitment. In the event a Participant’s
regular level of time commitment in the performance of his or her
services for the Company or any Affiliate is reduced (for example,
and without limitation, if the Participant is an Employee of the
Company and the Employee has a change in status from a full-time
Employee to a part-time Employee or takes an extended leave of
absence) after the date of grant of any Award to the Participant,
the Board has the right in its sole discretion to (i) make a
corresponding reduction in the number of shares or cash amount
subject to any portion of such Award that is scheduled to vest or
become payable after the date of such change in time commitment,
and (ii) in lieu of or in combination with such a reduction, extend
the vesting or payment schedule applicable to such Award. In the
event of any such reduction, the Participant will have no right
with respect to any portion of the Award that is so reduced or
extended.
(f) Incentive
Stock Option Limitations. To the extent that the aggregate
Fair Market Value (determined at the time of grant) of Common Stock
with respect to which Incentive Stock Options are exercisable for
the first time by any Participant during any calendar year (under
all plans of the Company and any Affiliates) exceeds one hundred
thousand dollars ($100,000) (or such other limit established in the
Code) or otherwise does not comply with the rules governing
Incentive Stock Options, the Options or portions thereof that
exceed such limit (according to the order in which they were
granted) or otherwise do not comply with such rules will be treated
as Nonstatutory Stock Options, notwithstanding any contrary
provision of the applicable Option Agreement(s).
15
(g) Investment
Assurances. The Company may require a Participant, as a
condition of exercising or acquiring Common Stock under any Award,
(i) to give written assurances satisfactory to the Company as to
the Participant’s knowledge and experience in financial and
business matters and/or to employ a purchaser representative
reasonably satisfactory to the Company who is knowledgeable and
experienced in financial and business matters and that he or she is
capable of evaluating, alone or together with the purchaser
representative, the merits and risks of exercising the Award, and
(ii) to give written assurances satisfactory to the Company stating
that the Participant is acquiring Common Stock subject to the Award
for the Participant’s own account and not with any present
intention of selling or otherwise distributing the Common Stock.
The foregoing requirements, and any assurances given pursuant to
such requirements, will be inoperative if (A) the issuance of the
shares upon the exercise or acquisition of Common Stock under the
Stock Award has been registered under a then currently effective
registration statement under the Securities Act, or (B) as to any
particular requirement, a determination is made by counsel for the
Company that such requirement need not be met in the circumstances
under the then applicable securities laws. The Company may, upon
advice of counsel to the Company, place legends on stock
certificates issued under the Plan as such counsel deems necessary
or appropriate in order to comply with applicable securities laws,
including, but not limited to, legends restricting the transfer of
the Common Stock.
(h) Withholding
Obligations. Unless prohibited
by the terms of an Award Agreement, the Company may, in its sole
discretion, satisfy any federal, state or local tax withholding
obligation relating to an Award by any of the following means or by
a combination of such means: (i) causing the Participant to tender
a cash payment; (ii) withholding shares of Common Stock from the
shares of Common Stock issued or otherwise issuable to the
Participant in connection with the Stock Award; provided, however,
that no shares of Common Stock are
withheld with a value exceeding the minimum amount of tax required
to be withheld by law (or such lesser amount as may be necessary to
avoid classification of the Stock Award as a liability for
financial accounting purposes); (iii) withholding cash from an
Award settled in cash; (iv) withholding payment from any amounts
otherwise payable to the Participant; or (v) by such other method
as may be set forth in the Award Agreement.
(i) Electronic
Delivery. Any reference herein to a “written”
agreement or document will include any agreement or document
delivered electronically, filed publicly at www.sec.gov (or any
successor website thereto) or posted on the Company’s
intranet (or other shared electronic medium controlled by the
Company to which the Participant has access).
(j) Deferrals.
To the extent permitted by applicable law, the Board, in its sole
discretion, may determine that the delivery of Common Stock or the
payment of cash, upon the exercise, vesting or settlement of all or
a portion of any Award may be deferred and may establish programs
and procedures for deferral elections to be made by Participants.
Deferrals by Participants will be made in accordance with Section
409A of the Code. Consistent with Section 409A of the Code, the
Board may provide for distributions while a Participant is still an
employee or otherwise providing services to the Company. The Board
is authorized to make deferrals of Awards and determine when, and
in what annual percentages, Participants may receive payments,
including lump sum payments, following the Participant’s
termination of Continuous Service, and implement such other terms
and conditions consistent with the provisions of the Plan and in
accordance with applicable law.
16
(k) Section
409A Compliance. Unless otherwise expressly provided for in
an Award Agreement, the Plan and Award Agreements will be
interpreted to the greatest extent possible in a manner that makes
the Plan and the Awards granted hereunder exempt from Section 409A
of the Code, and, to the extent not so exempt, in compliance with
Section 409A of the Code. If the Board determines that any Award
granted hereunder is not exempt from and is therefore subject to
Section 409A of the Code, the Award Agreement evidencing such Award
will incorporate the terms and conditions necessary to avoid the
consequences specified in Section 409A(a)(1) of the Code and to the
extent an Award Agreement is silent on terms necessary for
compliance, such terms are hereby incorporated by reference into
the Award Agreement. Notwithstanding anything to the contrary in
this Plan (and unless the Award Agreement specifically provides
otherwise), if the shares of Common Stock are publicly traded, and
if a Participant holding an Award that constitutes “deferred
compensation” under Section 409A of the Code is a
“specified employee” for purposes of Section 409A of
the Code, no distribution or payment of any amount that is due
because of a “separation from service” (as defined in
Section 409A of the Code without regard to alternative definitions
thereunder) will be issued or paid before the date that is six (6)
months following the date of the Participant’s
“separation from service” or, if earlier, the date of
the Participant’s death, unless such distribution or payment
may be made in a manner that complies with Section 409A of the
Code, and any amounts so deferred will be paid in a lump sum on the
day after such six (6) month period elapses, with the balance paid
thereafter on the original schedule.
(l) Clawback/Recovery.
All Awards granted under the Plan will be subject to recoupment in
accordance with any clawback policy that the Company is required to
adopt pursuant to the listing standards of any national securities
exchange or association on which the Company’s securities are
listed or as is otherwise required by the Dodd-Frank Wall Street
Reform and Consumer Protection Act or other applicable law. In
addition, the Board may impose such other clawback, recovery or
recoupment provisions in an Award Agreement as the Board determines
necessary or appropriate, including, but not limited to, a
reacquisition right in respect of previously acquired shares of
Common Stock or other cash or property upon the occurrence of
Cause. No recovery of compensation under such a clawback policy
will be an event giving rise to a right to resign for “good
reason” or “constructive termination” (or similar
term) under any agreement with the Company.
9.
Adjustments upon Changes in Common Stock; Other Corporate
Events.
(a) Capitalization
Adjustments. In the event of a Capitalization Adjustment,
the Board will appropriately and proportionately adjust: (i) the
class(es) and maximum number of securities subject to the Plan
pursuant to Section 3(a) and 3(f); (ii) the class(es) and maximum
number of securities that may be issued pursuant to the exercise of
Incentive Stock Options pursuant to Section 3(c); (iii) the
class(es) and maximum number of securities that may be awarded to
any Non-Employee Director pursuant to Section 3(e); and (iv) the
class(es) and number of securities and price per share of stock
subject to outstanding Stock Awards. The Board will make such
adjustments, and its determination will be final, binding and
conclusive.
(b) Dissolution
or Liquidation. Except as otherwise provided in the
applicable Stock Award Agreement or other written agreement between a Participant and
the Company or an Affiliate, in the event of a dissolution
or liquidation of the Company, all outstanding Stock Awards (other
than Stock Awards consisting of vested and outstanding shares of
Common Stock not subject to a forfeiture condition or the
Company’s right of repurchase) will terminate immediately
prior to the completion of such dissolution or liquidation, and the
shares of Common Stock subject to a forfeiture condition or the
Company’s right of repurchase may be reacquired or
repurchased by the Company notwithstanding the fact that the holder
of such Stock Award is providing Continuous Service; provided, however, that the Board may,
in its sole discretion, cause some or all Stock Awards to become
fully vested, exercisable and/or no longer subject to forfeiture or
repurchase (to the extent such Stock Awards have not previously
expired or terminated) before the dissolution or liquidation is
completed but contingent on its completion.
17
(c) Corporate
Transactions. In the event of a Corporate Transaction,
notwithstanding any other provision of the Plan, the Board may take
one or more of the following actions with respect to Stock Awards,
contingent upon the closing or consummation of the Corporate
Transaction, unless otherwise provided in the instrument evidencing
the Stock Award, in any other written agreement between the Company
or any Affiliate and the Participant or in any director
compensation policy of the Company, or unless otherwise expressly
provided by the Board at the time of grant of the Stock
Award:
(i) arrange
for the surviving corporation or acquiring corporation (or the
surviving or acquiring corporation’s parent company) to
assume or continue the Stock Award or to substitute a similar stock
award for the Stock Award (including, but not limited to, an award
to acquire the same consideration paid to the stockholders of the
Company pursuant to the Corporate Transaction);
(ii) arrange
for the assignment of any reacquisition or repurchase rights held
by the Company in respect of Common Stock issued pursuant to the
Stock Award to the surviving corporation or acquiring corporation
(or the surviving or acquiring corporation’s parent
company);
(iii) accelerate
the vesting, in whole or in part, of the Stock Award (and, if
applicable, the time at which the Stock Award may be exercised) to
a date prior to the effective time of such Corporate Transaction as
the Board determines (or, if the Board does not determine such a
date, to the date that is five (5) days prior to the effective date
of the Corporate Transaction), with such Stock Award terminating if
not exercised (if applicable) at or prior to the effective time of
the Corporate Transaction; provided, however, that the Board may
require Participants to complete and deliver to the Company a
notice of exercise before the effective date of a Corporate
Transaction, which exercise is contingent upon the effectiveness of
such Corporate Transaction;
(iv) arrange
for the lapse, in whole or in part, of any reacquisition or
repurchase rights held by the Company with respect to the Stock
Award;
(v) cancel
or arrange for the cancellation of the Stock Award, to the extent
not vested or not exercised prior to the effective time of the
Corporate Transaction, and pay such cash consideration (including
no consideration) as the Board, in its sole discretion, may
consider appropriate; and
(vi) cancel
or arrange for the cancellation of the Stock Award, to the extent
not vested or not exercised prior to the effective time of the
Corporate Transaction, in exchange for a payment, in such form as
may be determined by the Board equal to the excess, if any, of
(A) the per share amount payable to holders of Common Stock in
connection with the Corporate Transaction, over (B) the per
share exercise price under the applicable Award. For clarity, this
payment may be zero ($0) if the value of the property is equal to
or less than the exercise price. In addition, any escrow, holdback,
earnout or similar provisions in the definitive agreement for the
Corporate Transaction may apply to such payment to the same extent
and in the same manner as such provisions apply to the holders of
Common Stock.
18
The
Board need not take the same action or actions with respect to all
Stock Awards or portions thereof or with respect to all
Participants. The Board may take different actions with respect to
the vested and unvested portions of a Stock Award.
(d) Change
in Control. A Stock Award may be subject to additional
acceleration of vesting and exercisability upon or after a
qualifying termination of Continuous Service that occurs in
connection with Change in Control as may be provided in the Stock
Award Agreement for such Stock Award, in any other written
agreement between the Company or any Affiliate and the Participant
or in any director compensation policy of the Company, but in the
absence of such provision, no such acceleration will
occur.
10.
Termination or Suspension of the Plan.
(a) The
Board may suspend or terminate the Plan at any time. No Incentive
Stock Option may be granted after the tenth (10th)
anniversary of the earlier of (i) the Adoption Date or (ii) the
date the Plan is approved by the stockholders of the Company. No
Awards may be granted under the Plan while the Plan is suspended or
after it is terminated.
(b) No
Impairment of Rights. Suspension or termination of the Plan
will not materially impair rights and obligations under any Award
granted while the Plan is in effect except with the written consent
of the affected Participant or as otherwise permitted in the Plan
(including Section 2(b)(viii)) or an Award Agreement.
11.
Effective Date of Plan.
This
Plan will become effective on the Effective Date.
12.
Choice of Law.
The
laws of the State of California will govern all questions
concerning the construction, validity and interpretation of this
Plan, without regard to that state’s conflict of laws
rules.
13.
Definitions.
As used in the Plan, the following definitions will apply to the
capitalized terms indicated below:
(a) “Adoption
Date” means April 6, 2017, which is the date the Plan
was adopted by the Board.
(b) “Affiliate”
means, at the time of determination, any “parent” or
“subsidiary” of the Company as such terms are defined
in Rule 405. The Board will have the authority to determine the
time or times at which “parent” or
“subsidiary” status is determined within the foregoing
definition.
(c) “Appreciation
Award” means an Option or
SAR granted under the Plan or the Prior Plans, in each case with
respect to which the exercise or strike price is at least 100% of
the Fair Market Value of the Common Stock subject to the Option or
SAR, as applicable, on the date of grant.
19
(d)
“Award” or
“Stock
Award” means any right to
receive Common Stock granted under the Plan, including an Incentive
Stock Option, a Nonstatutory Stock Option, a Stock Appreciation
Right, a Restricted Stock Award, a Restricted Stock Unit Award, a
Performance Stock Award or any Other Stock
Award.
(e) “Award
Agreement” or “Stock Award
Agreement” means a
written agreement between the Company and a Participant evidencing
the terms and conditions of a Stock Award grant. Each Stock Award
Agreement will be subject to the terms and conditions of the
Plan.
(f) “Board”
means the Board of Directors of the Company.
(g) “Capital
Stock” means each and every class of common stock of
the Company, regardless of the number of votes per
share.
(h) “Capitalization
Adjustment” means any change that is made in, or other
events that occur with respect to, the Common Stock subject to the
Plan or subject to any Stock Award after the Adoption Date without
the receipt of consideration by the Company through merger,
consolidation, reorganization, recapitalization, reincorporation,
stock dividend, dividend in property other than cash, large
nonrecurring cash dividend, stock split, reverse stock split,
liquidating dividend, combination of shares, exchange of shares,
change in corporate structure or any similar equity restructuring
transaction, as that term is used in Statement of Financial
Accounting Standards Board Accounting Standards Codification Topic
718 (or any successor thereto). Notwithstanding the foregoing, the
conversion of any convertible securities of the Company will not be
treated as a Capitalization Adjustment.
(i) “Cause” will
have the meaning ascribed to such term in any written agreement
between a Participant and the Company
or an Affiliate defining such term and, in the absence of
such agreement, such term means, with respect to a Participant, the
occurrence of any of the following events: (i) such Participant has
breached his or her employment or service contract with the Company
or an Affiliate, (ii) such Participant has engaged in disloyalty to
the Company or an Affiliate, including, without limitation, fraud,
embezzlement, theft, commission of a felony or proven dishonesty,
(iii) such Participant has disclosed trade secrets or confidential
information of the Company or an Affiliate to persons not entitled
to receive such information, (iv) such Participant has breached any
written non-competition, non-solicitation, invention assignment or
confidentiality agreement between the Participant and the Company
or an Affiliate or (v) such Participant has engaged in such other
behavior detrimental to the interests of the Company or an
Affiliate as the Company determines. The determination that a
termination of the Participant’s Continuous Service is either
for Cause or without Cause will be made by the Company, in its sole
discretion. Any determination by the Company that the Continuous
Service of a Participant was terminated with or without Cause for
the purposes of outstanding Awards held by such Participant will
have no effect upon any determination of the rights or obligations
of the Company or such Participant for any other
purpose.
20
(j) “Change
in Control” means the occurrence, in a single
transaction or in a series of related transactions, of any one or
more of the following events:
(i) any
Exchange Act Person becomes the Owner, directly or indirectly, of
securities of the Company representing more than fifty percent
(50%) of the combined voting power of the Company’s then
outstanding securities other than by virtue of a merger,
consolidation or similar transaction. Notwithstanding the
foregoing, a Change in Control will not be deemed to occur (A) on
account of the acquisition of securities of the Company directly
from the Company, (B) on account of the acquisition of securities
of the Company by an investor, any affiliate thereof or any other
Exchange Act Person that acquires the Company’s securities in
a transaction or series of related transactions the primary purpose
of which is to obtain financing for the Company through the
issuance of equity securities, or (C) solely because the level of
Ownership held by any Exchange Act Person (the “Subject
Person”) exceeds the designated percentage threshold
of the outstanding voting securities as a result of a repurchase or
other acquisition of voting securities by the Company reducing the
number of shares outstanding, provided that if a Change in Control
would occur (but for the operation of this sentence) as a result of
the acquisition of voting securities by the Company, and after such
share acquisition, the Subject Person becomes the Owner of any
additional voting securities that, assuming the repurchase or other
acquisition had not occurred, increases the percentage of the then
outstanding voting securities Owned by the Subject Person over the
designated percentage threshold, then a Change in Control will be
deemed to occur;
(ii) there
is consummated a merger, consolidation or similar transaction
involving (directly or indirectly) the Company and, immediately
after the consummation of such merger, consolidation or similar
transaction, the stockholders of the Company immediately prior
thereto do not Own, directly or indirectly, either (A) outstanding
voting securities representing more than fifty percent (50%) of the
combined outstanding voting power of the surviving Entity in such
merger, consolidation or similar transaction or (B) more than fifty
percent (50%) of the combined outstanding voting power of the
parent of the surviving Entity in such merger, consolidation or
similar transaction, in each case in
substantially the same proportions as their Ownership of the
outstanding voting securities of the Company immediately prior to
such transaction;
(iii) there
is consummated a sale, lease, exclusive license or other
disposition of all or substantially all of the consolidated assets
of the Company and its Subsidiaries, other than a sale, lease,
license or other disposition of all or substantially all of the
consolidated assets of the Company and its Subsidiaries to an
Entity, more than fifty percent (50%) of the combined voting power
of the voting securities of which are Owned by stockholders of the
Company in substantially the same proportions as their Ownership of
the outstanding voting securities of the Company immediately prior
to such sale, lease, license or other disposition; or
21
(iv) individuals
who, on the Adoption Date, are members of the Board (the
“Incumbent
Board”) cease for any reason to constitute at least a
majority of the members of the Board; provided, however, that if the
appointment or election (or nomination for election) of any new
Board member was approved or recommended by a majority vote of the
members of the Incumbent Board then still in office, such new
member will, for purposes of this Plan, be considered as a member
of the Incumbent Board.
Notwithstanding the
foregoing definition or any other provision of this Plan, (A) the
term Change in Control will not include a sale of assets, merger or
other transaction effected exclusively for the purpose of changing
the domicile of the Company, and (B) the definition of Change in
Control (or any analogous term) in an individual written agreement
between a Participant and the Company
or an Affiliate will supersede the foregoing definition with
respect to Awards subject to such agreement; provided, however, that (1) if no
definition of Change in Control (or any analogous term) is set
forth in such an individual written agreement, the foregoing
definition will apply; and (2) no Change in Control (or any
analogous term) will be deemed to occur with respect to Awards
subject to such an individual written agreement without a
requirement that the Change in Control (or any analogous term)
actually occur. If required for compliance with Section 409A of the
Code, in no event will an event be deemed a Change in Control if
such event is not also a “change in the ownership of”
the Company, a “change in the effective control of” the
Company, or a “change in the ownership of a substantial
portion of the assets of” the Company, each as determined
under Treasury Regulations Section 1.409A-3(i)(5) (without regard
to any alternative definition thereunder). The Board may, in its
sole discretion and without a Participant’s consent, amend
the definition of “Change in Control” to conform to the
definition of a “change in control event” under Section
409A of the Code and the regulations thereunder.
(k) “Code”
means the Internal Revenue Code of 1986, as amended, including any
applicable regulations and guidance thereunder.
(l) “Committee”
means a committee of one (1) or more Directors to whom authority
has been delegated by the Board in accordance with Section
2(c).
(m) “Common
Stock” means the common stock of the
Company.
(n) “Company”
means ChromaDex Corporation, a Delaware corporation.
(o) “Consultant”
means any person, including an advisor, who is (i) engaged by the
Company or an Affiliate to render consulting or advisory services
and is compensated for such services, or (ii) serving as a
member of the board of directors of an Affiliate and is compensated
for such services. However, service
solely as a Director, or payment of a fee for such service, will
not cause a Director to be considered a “Consultant”
for purposes of the Plan. Notwithstanding
the foregoing, a person is treated as a Consultant under this Plan
only if a Form S-8 Registration
Statement under the Securities Act is available to register either
the offer or the sale of the Company’s securities to such
person.
22
(p) “Continuous
Service” means that the Participant’s service
with the Company or an Affiliate, whether as an Employee, Director
or Consultant, is not interrupted or terminated. A change in the
capacity in which the Participant renders service to the Company or
an Affiliate as an Employee, Director or Consultant or a change in
the Entity for which the Participant renders such service, provided
that there is no interruption or termination of the
Participant’s service with the Company or an Affiliate, will
not terminate a Participant’s Continuous Service;
provided, however,
that if the Entity for
which a Participant is rendering services ceases to qualify as an
Affiliate, as determined by the Board, in its sole discretion, such
Participant’s Continuous Service will be considered to have
terminated on the date such Entity ceases to qualify as an
Affiliate. For example, a change in status from an Employee of the
Company to a Consultant of an Affiliate or to a Director will not
constitute an interruption of Continuous Service. To the extent
permitted by law, the Board or the chief executive officer of the
Company, in that party’s sole discretion, may determine
whether Continuous Service will be considered interrupted in the
case of (i) any leave of absence approved by the Board or chief
executive officer, including sick leave, military leave or any
other personal leave, or (ii) transfers between the Company, an
Affiliate, or their successors. Notwithstanding the foregoing, a
leave of absence will be treated as Continuous Service for purposes
of vesting in an Award only to such extent as may be provided in
the Company’s leave of absence policy, in the written terms
of any leave of absence agreement or policy applicable to the
Participant, or as otherwise required by law.
(q) “Corporate
Transaction” means the consummation, in a single
transaction or in a series of related transactions, of any one or
more of the following events:
(i) a
sale or other
disposition of all or substantially all, as determined by the
Board, in its sole discretion, of the consolidated assets of the
Company and its Subsidiaries;
(ii) a
sale or other disposition of more than fifty percent (50%) of the
outstanding securities of the Company;
(iii) a
merger, consolidation or similar transaction following which the
Company is not the surviving corporation; or
(iv) a
merger, consolidation or similar transaction following which the
Company is the surviving corporation but the shares of Common Stock
outstanding immediately preceding the merger, consolidation or
similar transaction are converted or exchanged by virtue of the
merger, consolidation or similar transaction into other property,
whether in the form of securities, cash or otherwise.
If
required for compliance with Section 409A of the Code, in no event
will an event be deemed a Corporate Transaction if such event is
not also a “change in the ownership of” the Company, a
“change in the effective control of” the Company, or a
“change in the ownership of a substantial portion of the
assets of” the Company, each as determined under Treasury
Regulations Section 1.409A-3(i)(5) (without regard to any
alternative definition thereunder). The Board may, in its sole
discretion and without a Participant’s consent, amend the
definition of “Corporate Transaction” to conform to the
definition of a “change in control event” under Section
409A of the Code and the regulations thereunder.
(r) “Director”
means a member of the Board.
(s) “Disability”
means, with respect to a Participant, the inability of such
Participant to engage in any substantial gainful activity by reason
of any medically determinable physical or mental impairment that
can be expected to result in death or that has lasted or can be
expected to last for a continuous period of not less than twelve
(12) months, as provided in Sections 22(e)(3) and 409A(a)(2)(c)(i)
of the Code, and will be determined by the Board on the basis of
such medical evidence as the Board deems warranted under the
circumstances.
(t) “Effective
Date” means the effective date of this Plan document,
which is the date of the annual meeting of stockholders of the
Company held in 2017, provided that this Plan is approved by the
Company’s stockholders at such meeting.
23
(u) “Employee”
means any person employed by the Company or an Affiliate. However,
service solely as a Director, or payment of a fee for such
services, will not cause a Director to be considered an
“Employee” for purposes of the
Plan.
(v) “Entity”
means a corporation, partnership, limited liability company or
other entity.
(w) “Exchange
Act” means the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated
thereunder.
(x) “Exchange
Act Person” means any
natural person, Entity or “group” (within the meaning
of Section 13(d) or 14(d) of the Exchange Act), except that
“Exchange Act Person” will not include (i) the Company
or any Subsidiary of the Company, (ii) any employee benefit plan of
the Company or any Subsidiary of the Company or any trustee or
other fiduciary holding securities under an employee benefit plan
of the Company or any Subsidiary of the Company, (iii) an
underwriter temporarily holding securities pursuant to an offering
of such securities, (iv) an Entity Owned, directly or indirectly,
by the stockholders of the Company in substantially the same
proportions as their Ownership of stock of the Company,
or (v) any natural person, Entity or
“group” (within the meaning of Section 13(d) or 14(d)
of the Exchange Act) that, as of the Effective Date, is the Owner,
directly or indirectly, of securities of the Company representing
more than fifty percent (50%) of the combined voting power of the
Company’s then outstanding securities.
(y) “Fair
Market Value” means, as of any date, the value of the
Common Stock determined as follows:
(i) If
the Common Stock is listed on any established stock exchange or
traded on any established market, the Fair Market Value of a share
of Common Stock will be, unless otherwise determined by the Board,
the closing sales price for such stock as quoted on such exchange
or market (or the exchange or market with the greatest volume of
trading in the Common Stock) on the date of determination, as
reported in a source the Board deems reliable.
(ii) Unless
otherwise provided by the Board, if there is no closing sales price
for the Common Stock on the date of determination, then the Fair
Market Value will be the closing sales price on the last preceding
date for which such quotation exists.
(iii) In
the absence of such markets for the Common Stock, the Fair Market
Value will be determined by the Board in good faith and in a manner
that complies with Sections 409A and 422 of the Code.
(z) “Full
Value Award” means an Award granted under the Plan or
an award granted under the Prior Plans in each case that is not an
Appreciation Award.
(aa)
“Incentive Stock
Option” means an option granted pursuant to Section 5
that is intended to be, and that qualifies as, an “incentive
stock option” within the meaning of Section 422 of the
Code.
(bb)
“Inducement Award” means a Stock
Award, other than an Incentive Stock Option, granted pursuant to
Section 3(f) of the Plan.
24
(cc) “Inducement
Committee” means a Committee
consisting of the majority of the Company’s independent
directors or the Company’s independent compensation
committee, in either case in accordance with NASDAQ Listing Rule
5635(c)(4).
(dd) “Non-Employee
Director” means a Director who either (i) is
not a current employee or officer of the Company or an Affiliate,
does not receive compensation, either directly or indirectly, from
the Company or an Affiliate for services rendered as a consultant
or in any capacity other than as a Director (except for an amount
as to which disclosure would not be required under Item 404(a) of
Regulation S-K promulgated pursuant to the Securities Act
(“Regulation
S-K”)), does not possess an interest in any other
transaction for which disclosure would be required under Item
404(a) of Regulation S-K, and is not engaged in a business
relationship for which disclosure would be required pursuant to
Item 404(b) of Regulation S-K, or (ii) is otherwise considered
a “non-employee director” for purposes of Rule
16b-3.
(ee)
“Nonstatutory Stock
Option” means an option granted pursuant to Section 5
that does not qualify as an Incentive Stock Option.
(ff)
“Officer” means
a person who is an officer of the Company within the meaning of
Section 16 of the Exchange Act.
(gg) “Option”
means an Incentive Stock Option or a Nonstatutory Stock Option to
purchase shares of Common Stock granted pursuant to the
Plan.
(hh)
“Option
Agreement” means a written agreement between the
Company and a holder of an
Option evidencing the terms and conditions of an Option
grant. Each Option Agreement will be subject to the terms and
conditions of the Plan.
(ii) “Other
Stock Award” means an award based in whole or in part
by reference to the Common Stock which is granted pursuant to the
terms and conditions of Section 6(d).
(jj)
“Other Stock
Award Agreement” means
a written agreement between the Company and a holder of an Other
Stock Award evidencing the terms and conditions of an Other Stock
Award grant. Each Other Stock Award Agreement will be subject to
the terms and conditions of the Plan.
(kk)
“Own,” “Owned,” “Owner,” “Ownership” means
a person or Entity will be deemed to “Own,” to have
“Owned,” to be the “Owner” of, or to have
acquired “Ownership” of securities if such person or
Entity, directly or indirectly, through any contract, arrangement,
understanding, relationship or otherwise, has or shares voting
power, which includes the power to vote or to direct the voting,
with respect to such securities.
25
(ll) “Participant”
means a person to whom an Award is granted pursuant to the Plan or,
if applicable, such other person who holds an outstanding
Award.
(mm) “Performance
Criteria” means the one or more criteria that the
Board will select for purposes of establishing the Performance
Goals for a Performance Period. The Performance Criteria that will
be used to establish such Performance Goals may be based on any one
of, or combination of, the following as determined by the Board:
(i) cash flow; (ii) earnings (including gross margin, earnings
before interest and taxes, earnings before taxes, earnings before
interest, taxes, depreciation, amortization and charges for
stock-based compensation, earnings before interest, taxes,
depreciation and amortization, earnings before interest, taxes and
depreciation and net earnings); (iii) earnings per share; (iv)
growth in earnings or earnings per share; (v) stock price; (vi)
return on equity or average stockholder equity; (vii) total
stockholder return or growth in total stockholder return either
directly or in relation to a comparative group; (viii) return on
capital; (ix) return on assets or net assets; (x) revenue, growth
in revenue or return on sales; (xi) income or net income; (xii)
operating income, (xiii) net operating income or net operating
income after tax; (xiv) operating profit or net operating profit;
(xv) operating margin; (xvi) return on operating revenue or return
on operating profit; (xvii) regulatory filings; (xviii) regulatory
approvals, litigation or regulatory resolution goals; (xix) other
operational, regulatory or departmental objectives; (xx) budget
comparisons; (xxi) growth in stockholder value relative to
established indexes, or another peer group or peer group index;
(xxiii) development and implementation of strategic plans and/or
organizational restructuring goals; (xxiv) development and
implementation of risk and crisis management programs; (xxv)
improvement in workforce diversity; (xxvi) compliance requirements
and compliance relief; (xxvii) safety goals; (xxviii) productivity
goals; (xxix) workforce management and succession planning goals;
(xxx) economic value added (including typical adjustments
consistently applied from generally accepted accounting principles
required to determine economic value added performance measures);
(xxxi) measures of customer satisfaction, employee satisfaction or
staff development; (xxxii) development or marketing collaborations,
formations of joint ventures or partnerships or the completion of
other similar transactions intended to enhance the Company’s
revenue or profitability or enhance its customer base; (xxxiii)
merger and acquisitions; (xxxiv) implementation or completion of
projects or processes (including, without limitation, clinical
trial initiation, clinical trial enrollment and dates, clinical
trial results, regulatory filing submissions, regulatory filing
acceptances, regulatory or advisory committee interactions,
regulatory approvals, new and supplemental indications for existing
products, and product supply); (xxxv) initiation of phases of
clinical trials and/or studies by specific dates; (xxxvi)
acquisition of new customers, including institutional accounts;
(xxxvii) customer retention and/or repeat order rate; (xxxviii)
number of institutional customer accounts (xxxix) budget
management; (xl) improvements in sample and test processing times;
(xli) regulatory milestones; (xlii) progress of internal research
or clinical programs; (xliii) progress of partnered programs;
(xliv) partner satisfaction; (xlv) milestones related to samples
received and/or tests run; (xlvi) expansion of sales in additional
geographies or markets; (xlvii) research progress, including the
development of programs; (xlviii) submission to, or approval by, a
regulatory body (including, but not limited to the U.S. Food and
Drug Administration) of an applicable filing or a product; (xlix)
timely completion of clinical trials; (l) milestones related to
samples received and/or tests or panels run; (li) expansion of
sales in additional geographies or markets; (lii) research
progress, including the development of programs; (liii) patient
samples processed and billed; (liv) sample processing operating
metrics (including, without limitation, failure rate maximums and
reduction of repeat rates); (lv) strategic partnerships or
transactions (including in-licensing and out-licensing of
intellectual property; (lvi) and other similar criteria consistent
with the foregoing; and (lvii) other measures of performance
selected by the Board.
26
(nn) “Performance
Goals” means, for a Performance Period, the one or
more goals established by the Board for the Performance Period
based upon the Performance Criteria. Performance Goals may be based
on a Company-wide basis, with respect to one or more business
units, divisions, Affiliates, or business segments, and in either
absolute terms or relative to the performance of one or more
comparable companies or the performance of one or more relevant
indices. Unless specified otherwise by the Board (i) in the Award
Agreement at the time the Award is granted or (ii) in such other
document setting forth the Performance Goals at the time the
Performance Goals are established, the Board will appropriately
make adjustments in the method of calculating the attainment of
Performance Goals for a Performance Period as follows: (1) to
exclude restructuring and/or other nonrecurring charges; (2) to
exclude exchange rate effects; (3) to exclude the effects of
changes to generally accepted accounting principles; (4) to exclude
the effects of any statutory adjustments to corporate tax rates;
(5) to exclude the effects of items that are unusual in nature or
occur infrequently as determined under generally accepted
accounting principles; (6) to exclude the dilutive effects of
acquisitions or joint ventures; (7) to assume that any business
divested by the Company achieved performance objectives at targeted
levels during the balance of a Performance Period following such
divestiture; (8) to exclude the effect of any change in the
outstanding shares of common stock of the Company by reason of any
stock dividend or split, stock repurchase, reorganization,
recapitalization, merger, consolidation, spin-off, combination or
exchange of shares or other similar corporate change, or any
distributions to common stockholders other than regular cash
dividends; (9) to exclude the effects of stock based compensation
and the award of bonuses under the Company’s bonus plans;
(10) to exclude costs incurred in connection with potential
acquisitions or divestitures that are required to be expensed under
generally accepted accounting principles; and (11) to exclude the
goodwill and intangible asset impairment charges that are required
to be recorded under generally accepted accounting principles. In
addition, the Board retains the discretion to reduce or eliminate
the compensation or economic benefit due upon attainment of
Performance Goals and to define the manner of calculating the
Performance Criteria it selects to use for such Performance Period.
Partial achievement of the specified criteria may result in the
payment or vesting corresponding to the degree of achievement as
specified in the Stock Award Agreement.
(oo) “Performance
Period” means the period of time selected by the Board
over which the attainment of one or more Performance Goals will be
measured for the purpose of determining a Participant’s right
to and the payment of a Performance Stock Award. Performance
Periods may be of varying and overlapping duration, at the sole
discretion of the Committee (or Board, if applicable).
(pp) “Performance
Stock Award” means a Stock Award granted under the
terms and conditions of Section 6(c)(i).
(qq) “Plan”
means this ChromaDex Corporation Amended 2017 Equity Incentive
Plan.
(rr) “Restricted
Stock Award” means an
award of shares of Common Stock which is granted pursuant to the
terms and conditions of Section 6(a).
(ss) “Restricted
Stock Award Agreement”
means a written agreement between the Company and a holder of a
Restricted Stock Award evidencing the terms and conditions of a
Restricted Stock Award grant. Each Restricted Stock Award Agreement
will be subject to the terms and conditions of the
Plan.
(tt) “Restricted
Stock Unit Award” means
a right to receive shares of Common Stock which is granted pursuant
to the terms and conditions of Section 6(b).
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(uu) “Restricted
Stock Unit Award Agreement” means a
written agreement between the Company and a holder of a Restricted
Stock Unit Award evidencing the terms and conditions of a
Restricted Stock Unit Award grant. Each Restricted Stock Unit Award
Agreement will be subject to the terms and conditions of the
Plan.
(vv) “Rule
16b-3” means Rule 16b-3 promulgated under the Exchange
Act or any successor to Rule 16b-3, as in effect from time to
time.
(ww) “Rule
405” means Rule 405 promulgated under the Securities
Act.
(xx)
“Securities
Act” means the Securities Act of 1933, as
amended.
(yy) “Stock
Appreciation Right” or “SAR” means
a right to receive the appreciation on Common Stock that is granted
pursuant to the terms and conditions of Section 5.
(zz) “Stock
Appreciation Right Agreement” or “SAR Agreement”
means a written agreement between the Company and a holder of a
Stock Appreciation Right evidencing the terms and conditions of a
Stock Appreciation Right grant. Each Stock Appreciation Right
Agreement will be subject to the terms and conditions of the
Plan.
(aaa) “Subsidiary”
means, with respect to the Company, (i) any corporation of which
more than fifty percent (50%) of the outstanding capital stock
having ordinary voting power to elect a majority of the board of
directors of such corporation (irrespective of whether, at the
time, stock of any other class or classes of such corporation will
have or might have voting power by reason of the happening of any
contingency) is at the time, directly or indirectly, Owned by the
Company, and (ii) any partnership, limited liability company or
other entity in which the Company has a direct or indirect interest
(whether in the form of voting or participation in profits or
capital contribution) of more than fifty percent
(50%).
(bbb) “Ten
Percent Stockholder” means a person who Owns (or is
deemed to Own pursuant to Section 424(d) of the Code) stock
possessing more than ten percent (10%) of the total combined voting
power of all classes of stock of the Company or any
Affiliate.
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