Exhibit 4 (c)
NON-QUALIFIED STOCK OPTION AGREEMENT
THIS AGREEMENT, dated as of March 3, 1997 (the "Agreement"), is made by and
between The Spectranetics Corporation, a Delaware corporation hereinafter
referred to as "Company," and Xxxxxx X. Xxxxxx, an employee of the Company or
Subsidiary of the Company, hereinafter referred to as "Optionee":
WHEREAS, the Company wishes to afford the Optionee the opportunity to
purchase shares of its $.001 par value Common Stock in return for the services
he has rendered as an employee to the Company; and
WHEREAS, the Board has determined that it would be to the advantage and
best interest of the Company and its shareholders to grant the Non-Qualified
Option provided for herein to the Optionee as an inducement to enter into or
remain in the service of the Company or its Subsidiaries and as an incentive for
increased efforts during such service, and has advised the Company thereof and
instructed the undersigned officers to issue said Option;
NOW, THEREFORE, in consideration of the mutual covenants herein contained
and other good and valuable consideration, receipt of which is hereby
acknowledged, the parties hereto do hereby agree as follows:
ARTICLE I.
DEFINITIONS
Whenever the following terms are used in this Agreement, they shall have
the meaning specified below unless the context clearly indicates to the
contrary. The masculine pronoun shall include the feminine and neuter, and the
singular the plural, where the context so indicates.
Section 1.1. Board
"Board" shall mean the Board of Directors of the Company.
Section 1.2. Change in Control
"Change in Control" shall mean a change in ownership or control of the
Company effected through either of the following transactions:
(a) any person or related group of persons (other than the Company or a
person that directly or indirectly controls, is controlled by, or is under
common control with, the Company) directly or indirectly acquires beneficial
ownership (within the meaning of Rule 13d-3 under the Exchange Act) of
securities possessing more than fifty percent (50%) of the total combined voting
power of the Company's outstanding securities pursuant to a tender or exchange
offer made directly to the Company's stockholders which the Board does not
recommend such stockholders to accept; or
(b) there is a change in the composition of the Board over a period of
thirty-six (36) consecutive months (or less) such that a majority of the Board
members (rounded up to the nearest whole number) ceases, by reason of one or
more proxy contests for the election of Board members, to be comprised of
individuals who either (i) have been Board members continuously since the
beginning of such period or (ii) have been elected or nominated for election as
Board members during such period by at least a majority of the Board members
described in clause (i) who were still in office at the time such election or
nomination was approved by the Board.
Section 1.3. Code
"Code" shall mean the Internal Revenue Code of 1986, as amended.
Section 1.4. Committee
"Committee" shall mean the Compensation Committee of the Board, or a
subcommittee of the Board.
Section 1.5. Common Stock
"Common Stock" shall mean the common stock of the Company, par value $.001
per share, and any equity security of the Company issued or authorized to be
issued in the future, but excluding any warrants, options or other rights to
purchase Common Stock. Debt securities of the Company convertible into Common
Stock shall be deemed equity securities of the Company.
Section 1.6. Company
"Company" shall mean The Spectranetics Corporation, a Delaware corporation.
Section 1.7. Corporate Transaction
"Corporate Transaction" shall mean any of the following
stockholder-approved transactions to which the Company is a party:
(a) a merger or consolidation in which the Company is not the surviving
entity, except for a transaction the principal purpose of which is to change the
State in which the Company is incorporated, form a holding company or effect a
similar reorganization as to form whereupon this Option is assumed by the
successor entity;
(b) the sale, transfer, exchange or other disposition of all or
substantially all of the assets of the Company, in complete liquidation or
dissolution of the Company in a transaction not covered by the exceptions to
clause (a), above; or
(c) any reverse merger in which the Company is the surviving entity but in
which securities possessing more than fifty percent (50%) of the total combined
voting power of the Company's outstanding securities are transferred or issued
to a person or persons different from those who held such securities immediately
prior to such merger.
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Section 1.8. Director
"Director" shall mean a member of the Board.
Section 1.9. Exchange Act
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended.
Section 1.10. Fair Market Value
"Fair Market Value" of a share of Common Stock as of a given date shall be
(i) the closing price of a share of Common Stock on the principal exchange on
which such shares of Common Stock are then trading, if any, on such date, or if
shares were not traded on such date, then on the closest preceding date on which
a trade occurred, or (ii) if Common Stock is not traded on an exchange, the
closing price for the Common Stock on such date as reported by NASDAQ or, if
NASDAQ is not then in existence, by its successor quotation system; or (iii) if
Common Stock is not publicly traded, the Fair Market Value of a share of Common
Stock as established by the Committee acting in good faith.
Section 1.11. Option
"Option" shall mean a non-qualified stock option granted under this
Agreement.
Section 1.12. Optionee
"Optionee" shall mean the consultant granted an Option under this
Agreement.
Section 1.13. Rule 16b-3
"Rule 16b-3" shall mean that certain Rule 16b-3 under the Exchange Act, as
such Rule may be amended from time to time.
Section 1.14. Secretary
"Secretary" shall mean the Secretary of the Company.
Section 1.15. Securities Act
"Securities Act" shall mean the Securities Act of 1933, as amended.
Section 1.16. Subsidiary
"Subsidiary" shall mean any corporation in an unbroken chain of
corporations beginning with the Company if each of the corporations other than
the last corporation in the unbroken chain then owns stock possessing 50 percent
or more of the total combined voting power of all classes of stock in one of the
other corporations in such chain.
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Section 1.17. Termination of Employment
"Termination of Employment" shall mean the time when the employee-employer
relationship between the Optionee and the Company or any Subsidiary is
terminated for any reason, including, but not by way of limitation, a
termination by resignation, discharge, death, disability or retirement; but
excluding (i) terminations where there is a simultaneous reemployment,
continuing employment of an Optionee by the Company or any Subsidiary, (ii) at
the discretion of the Committee, terminations which result in a temporary
severance of the employee-employer relationship, and (iii) at the discretion of
the Committee, terminations which are followed by the simultaneous establishment
of a consulting relationship by the Company or a Subsidiary with the former
employee. The Committee, in its absolute discretion, shall determine the effect
of all matters and questions relating to Termination of Employment, including,
but not by way of limitation, the question of whether a Termination of
Employment resulted from a discharge for good cause, and all questions of
whether particular leaves of absence constitute Terminations of Employment.
Notwithstanding any other provision of this Plan, the Company or any Subsidiary
has an absolute and unrestricted right to terminate an Employee's employment at
any time for any reason whatsoever, with or without cause, except to the extent
expressly provided otherwise in writing.
ARTICLE II.
GRANT OF OPTION
Section 2.1. Grant of Option
In consideration of the Optionee's agreement to consult for the Company or
its Subsidiaries for a period of at least one year after the option is granted
and for other good and valuable consideration, on the date hereof the Company
irrevocably grants to the Optionee the option to purchase any part or all of an
aggregate of 575,000 shares of its $.001 par value Common Stock upon the terms
and conditions set forth in this Agreement.
Section 2.2. Purchase Price
The purchase price of the shares of stock covered by the Option shall be
$3.3125 per share without commission or other charge.
Section 2.3. Consideration to Company
In consideration of the granting of this Option by the Company, the
Optionee agrees to render faithful and efficient services to the Company or a
Subsidiary, with such duties and responsibilities as the Company shall from time
to time prescribe, for a period of at least one (1) year from the date this
Option is granted. Nothing in this Agreement shall confer upon any Optionee any
right to continue in the employ of, or as a consultant for, the Company or any
Subsidiary, or as a director of the Company, or shall interfere with or restrict
in any way the rights of the Company and any Subsidiary, which are hereby
expressly reserved, to discharge the Optionee at any time for any reason
whatsoever, with or without good cause.
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Section 2.4. Adjustments in Option
(a) In the event that the outstanding shares of the stock subject to the
Option are changed into or exchanged for a different number or kind of shares of
the Company or other securities of the Company, or of another corporation, by
reason of reorganization, merger, consolidation, recapitalization,
reclassification, stock splitup, stock dividend or combination of shares, the
Committee shall make an appropriate and equitable adjustment in the number and
kind of shares as to which the Option, or portions thereof then unexercised,
shall be exercisable, to the end that after such event the Optionee's
proportionate interest shall be maintained as before the occurrence of such
event. Such adjustment in the Option may include any necessary corresponding
adjustment in the Option price per share, but shall be made without change in
the total price applicable to the unexercised portion of the Option (except for
any change in the aggregate price resulting from rounding-off of share
quantities or prices). Any such adjustment made by the Committee shall be final
and binding upon the Optionee, the Company and all other interested persons.
(b) Notwithstanding the foregoing, in the event of such a reorganization,
merger, consolidation, recapitalization, reclassification, stock splitup, stock
dividend or combination, or other adjustment or event which results in shares of
Common Stock being exchanged for or converted into cash, securities or other
property, the Company will have the right to terminate this Agreement as of the
date of the exchange or conversion, in which case the Option granted under this
Agreement shall become the right to receive such cash, securities or other
property, net of any applicable exercise price.
(c) In the event of a "spin-off" or other substantial distribution of
assets of the Company which has a material diminutive effect upon the Fair
Market Value of the Company's Common Stock, the Board may in its discretion make
an appropriate and equitable adjustment to the Option to reflect such
diminution.
ARTICLE III.
PERIOD OF EXERCISABILITY
Section 3.1. Commencement of Exercisability
(a) The Option may be exercised by the Optionee to purchase the total
number of shares specified in Section 2.1 as follows:
(i) 25,000 shares shall be exercisable as of the date of this
Agreement;
(ii) 137,512 shares shall become exercisable on March 3, 1998; and
(iii) An additional 11,458 shares shall become exercisable on the
third day of each month thereafter.
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(b) No portion of the Option which is unexercisable at Termination of
Employment, as applicable, shall thereafter become exercisable.
Section 3.2. Duration of Exercisability
The installments provided for in Section 3.1 are cumulative. Each such
installment which becomes exercisable pursuant to Section 3.1 shall remain
exercisable until it becomes unexercisable under Section 3.3.
Section 3.3. Expiration of Option
The Option may not be exercised to any extent by anyone after the first to
occur of the following events:
(a) The expiration of ten (10) years from the date the Option was granted;
or
(b) The expiration of three (3) months from the date of the Optionee's
Termination of Employment unless such Termination of Employment results from his
death, retirement, disability or discharge not for good cause; or
(c) The expiration of one (1) year from the date of the Optionee's
Termination of Employment by reason of his death, disability, retirement or
discharge not for good cause, unless the Optionee dies within said three-month
period; or
(d) The effective date of either the merger or consolidation of the Company
with or into another corporation, the exchange of all or substantially all of
the assets of the Company for the securities of another corporation, the
acquisition by another corporation or person of all or substantially all of the
Company's assets or fifty percent (50%) or more of the Company's then
outstanding voting stock, or the liquidation or dissolution of the Company,
unless the Committee waives this provision in connection with such transaction.
At least ten (10) days prior to the effective date of such merger,
consolidation, exchange, acquisition, liquidation or dissolution, the Committee
shall give the Optionee notice of such event if the Option has then neither been
fully exercised nor become unexercisable under this Section 3.3.
Section 3.4. Acceleration of Exercisability
Notwithstanding the foregoing Section 3.1,
(a) In the event of any Change in Control or Corporate Transaction, the
Option shall, immediately prior to the effective date of such event,
automatically become fully exercisable for all of the shares of Common Stock at
the time subject to the Option, and may be exercised for any or all of those
shares as fully-vested shares of Common Stock; provided, however, that, if and
to the extent the Option is, in connection with a Change in Control or Corporate
Transaction, either to be assumed by the successor or survivor corporation (or
parent thereof) or to be replaced with a comparable right with respect to shares
of the capital stock of the successor or survivor corporation (or parent
thereof), the Option shall, immediately prior to the effective date of the
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Change in Control or Corporate Transaction, automatically become exercisable for
only seventy percent (70%) of the unvested shares of Common Stock at the time
subject to the Option.
(b) In the event of Optionee's constructive termination (including, without
limitation, any demotion) within one (1) year of a Change in Control or
Corporate Transaction, the Option shall automatically become fully exercisable
for all of the shares of Common Stock at the time subject to the Option, and may
be exercised for any or all of those shares as fully-vested shares of Common
Stock.
(c) The Committee may make such determinations and adopt such rules and
conditions as it, in its absolute discretion, deems appropriate in connection
with such acceleration of exercisability, including, but not by way of
limitation, provisions to ensure that any such acceleration and resulting
exercise shall be conditioned upon the consummation of the contemplated
corporate transaction, and determinations regarding whether provisions for
assumption or substitution have been made as referenced in subsection (a) above.
ARTICLE IV.
EXERCISE OF OPTION
Section 4.1. Person Eligible to Exercise
During the lifetime of the Optionee, only he may exercise the Option or any
portion thereof. After the death of the Optionee, any exercisable portion of the
Option may, prior to the time when the Option becomes unexercisable under
Section 3.3, be exercised by his personal representative or by any person
empowered to do so under the Optionee's will or under the then applicable laws
of descent and distribution.
Section 4.2. Partial Exercise
Any exercisable portion of the Option or the entire Option, if then wholly
exercisable, may be exercised in whole or in part at any time prior to the time
when the Option or portion thereof becomes unexercisable under Section 3.3;
provided, however, that each partial exercise shall be for not less than one
hundred (100) shares (or the minimum installment set forth in Section 3.1, if a
smaller number of shares) and shall be for whole shares only.
Section 4.3. Manner of Exercise
The Option, or any exercisable portion thereof, may be exercised solely by
delivery to the Secretary or his office of all of the following prior to the
time when the Option or such portion becomes unexercisable under Section 3.3:
(a) Notice in writing signed by the Optionee or the other person then
entitled to exercise the Option or portion, stating that the Option or portion
is thereby exercised, such notice complying with all applicable rules
established by the Committee or the Board; and
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(b) (i) Full payment (in cash) for the shares with respect to which such
Option or portion is exercised; or
(ii) With the consent of the Committee, payment delayed for up to
thirty (30) days from the date the Option, or portion thereof, is
exercised; or
(iii) With the consent of the Committee, (A) shares of the Company's
Common Stock owned by the Optionee duly endorsed for transfer to the
Company or (B) subject to the timing requirements of Section 4.4, shares of
the Company's Common Stock issuable to the Optionee upon exercise of the
Option, with a Fair Market Value on the date of Option exercise equal to
the aggregate purchase price of the shares with respect to which such
Option or portion is exercised;
(c) A bona fide written representation and agreement, in a form
satisfactory to the Committee or the Board, signed by the Optionee or other
person then entitled to exercise such Option or portion, stating that the shares
of stock are being acquired for his own account, for investment and without any
present intention of distributing or reselling said shares or any of them except
as may be permitted under the Securities Act and then applicable rules and
regulations thereunder, and that the Optionee or other person then entitled to
exercise such Option or portion will indemnify the Company against and hold it
free and harmless from any loss, damage, expense or liability resulting to the
Company if any sale or distribution of the shares by such person is contrary to
the representation and agreement referred to above. The Committee may, in its
absolute discretion, take whatever additional actions it deems appropriate to
insure the observance and performance of such representation and agreement and
to effect compliance with the Securities Act and any other federal or state
securities laws or regulations. Without limiting the generality of the
foregoing, the Committee may require an opinion of counsel acceptable to it to
the effect that any subsequent transfer of shares acquired on an Option exercise
does not violate the Securities Act, and may issue stop-transfer orders covering
such shares. Share certificates evidencing stock issued on exercise of this
Option shall bear an appropriate legend referring to the provisions of this
subsection (c) and the agreements herein. The written representation and
agreement referred to in the first sentence of this subsection (c) shall,
however, not be required if the shares to be issued pursuant to such exercise
have been registered under the Securities Act, and such registration is then
effective in respect of such shares; and
(d) Full payment to the Company (or other employer corporation) of all
amounts which, under federal, state or local tax law, it is required to withhold
upon exercise of the Option; with the consent of the Committee, (i) shares of
the Company's Common Stock owned by the Optionee duly endorsed for transfer, or
(ii) subject to the timing requirements of Section 4.4, shares of the Company's
Common Stock issuable to the Optionee upon exercise of the Option, having a Fair
Market Value at the date of Option exercise equal to the sums required to be
withheld, may be used to make all or part of such payment; and
(e) In the event the Option or portion shall be exercised pursuant to
Section 4.1 by any person or persons other than the Optionee, appropriate proof
of the right of such person or persons to exercise the Option.
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Section 4.4. Certain Timing Requirements
Shares of the Company's Common Stock issuable to the Optionee upon exercise
of the Option may be used to satisfy the Option price or the tax withholding
consequences of such exercise only (i) during the period beginning on the third
(3rd) business day following the date of release of the quarterly or annual
summary statement of sales and earnings of the Company and ending on the twelfth
(12th) business day following such date or (ii) pursuant to an irrevocable
written election by the Optionee to use shares of the Company's Common Stock
issuable to the Optionee upon exercise of the Option to pay all or part of the
Option price or the withholding taxes (subject to the approval of the Committee)
made at least six (6) months prior to the payment of such Option price or
withholding taxes.
Section 4.5. Conditions to Issuance of Stock Certificates
The shares of stock deliverable upon the exercise of the Option, or any
portion thereof, may be either previously authorized but unissued shares or
issued shares which have then been reacquired by the Company. Such shares shall
be fully paid and nonassessable. The Company shall not be required to issue or
deliver any certificate or certificates for shares of stock purchased upon the
exercise of the Option or portion thereof prior to fulfillment of all of the
following conditions:
(a) The admission of such shares to listing on all stock exchanges on which
such class of stock is then listed; and
(b) The completion of any registration or other qualification of such
shares under any state or federal law or under rulings or regulations of the
Securities and Exchange Commission or of any other governmental regulatory body,
which the Committee or Board shall, in its absolute discretion, deem necessary
or advisable; and
(c) The obtaining of any approval or other clearance from any state or
federal governmental agency which the Committee or Board shall, in its absolute
discretion, determine to be necessary or advisable; and
(d) The receipt by the Company of full payment for such shares, including
payment of all amounts which, under federal, state or local tax law, it is
required to withhold upon exercise of the Option; and
(e) The receipt by the Company of representations from the Optionee to the
effect that, upon exercise of the Option, he will acquire the optioned shares
for his own account for investment and not with any intent or view to any
distribution, resale or other disposition of the optioned shares, and such
further representations and agreements as the Company may reasonably determine
to be necessary or appropriate to assure and to evidence compliance with the
requirements of the Act; and
(f) The lapse of such reasonable period of time following the exercise of
the Option as the Committee or Board may from time to time establish for reasons
of administrative convenience.
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Section 4.6. Registration of Shares
The Company may, in its discretion, file and maintain effective with the
Securities and Exchange Commission a Registration Statement on Form S-8 under
the Securities Act of 1933, as amended (the "Act"), covering the sale of the
optioned shares to Optionee upon exercise of the Option.
Section 4.7. Rights as Shareholder
The holder of the Option shall not be, nor have any of the rights or
privileges of, a shareholder of the Company in respect of any shares purchasable
upon the exercise of any part of the Option unless and until certificates
representing such shares shall have been issued by the Company to such holder.
ARTICLE V.
OTHER PROVISIONS
Section 5.1. Administration
The Committee shall have the power to interpret this Agreement and to adopt
such rules for the administration, interpretation and application of this
Agreement as are consistent therewith and to interpret or revoke any such rules.
All actions taken and all interpretations and determinations made by the
Committee in good faith shall be final and binding upon the Optionee, the
Company and all other interested persons. No member of the Committee shall be
personally liable for any action, determination or interpretation made in good
faith with respect to this Agreement. In its absolute discretion, the Board may
at any time and from time to time exercise any and all rights and duties of the
Committee under this Agreement except with respect to matters which under Rule
16b-3 or Section 162(m) of the Code, or any regulations or rules issued
thereunder, are required to be determined in the sole discretion of the
Committee.
Section 5.2. Option Not Transferable
Neither the Option nor any interest or right therein or part thereof shall
be liable for the debts, contracts or engagements of the Optionee or his
successors in interest or shall be subject to disposition by transfer,
alienation, anticipation, pledge, encumbrance, assignment or any other means
whether such disposition be voluntary or involuntary or by operation of law by
judgment, levy, attachment, garnishment or any other legal or equitable
proceedings (including bankruptcy), and any attempted disposition thereof shall
be null and void and of no effect; provided, however, that this Section 5.2
shall not prevent transfers by will or by the applicable laws of descent and
distribution.
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Section 5.3. Shares to Be Reserved
The Company shall at all times during the term of the Option reserve and
keep available such number of shares of stock as will be sufficient to satisfy
the requirements of this Agreement.
Section 5.4. Notices
Any notice to be given under the terms of this Agreement to the Company
shall be addressed to the Company in care of its Secretary, and any notice to be
given to the Optionee shall be addressed to him at the address given beneath his
signature hereto. By a notice given pursuant to this Section 5.4, either party
may hereafter designate a different address for notices to be given to him. Any
notice which is required to be given to the Optionee shall, if the Optionee is
then deceased, be given to the Optionee's personal representative if such
representative has previously informed the Company of his status and address by
written notice under this Section 5.4. Any notice shall be deemed duly given
when enclosed in a properly sealed envelope or wrapper addressed as aforesaid,
deposited (with postage prepaid) in a post office or branch post office
regularly maintained by the United States Postal Service.
Section 5.5. Titles
Titles are provided herein for convenience only and are not to serve as a
basis for interpretation or construction of this Agreement.
Section 5.6. Construction
This Agreement shall be administered, interpreted and enforced under the
laws of the State of Colorado.
Section 5.7. Conformity to Securities Laws
The Optionee acknowledges that this Agreement is intended to conform to the
extent necessary with all provisions of the Securities Act and the Exchange Act
and any and all regulations and rules promulgated by the Securities and Exchange
Commission thereunder, including without limitation Rule 16b-3. Notwithstanding
anything herein to the contrary, this Agreement shall be administered, and the
Option is granted and may be exercised, only in such a manner as to conform to
such laws, rules and regulations. To the extent permitted by applicable law,
this Agreement shall be deemed amended to the extent necessary to conform to
such laws, rules and regulations.
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IN WITNESS WHEREOF, this Agreement has been executed and delivered by the
parties hereto.
THE SPECTRANETICS CORPORATION
By /s/ Xxxxxx X. Xxxxxx
______________________________
President
By /s/ Xxxxx X. XxXxxxxxx
______________________________
Secretary
/s/ Xxxxxx X. Xxxxxx
______________________________
Optionee
______________________________
______________________________
Address
Optionee's Taxpayer
Identification Number:
______________________________
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