EXHIBIT 10.11
PDT, INC.
STOCK COMPENSATION PLAN
STOCK RIGHTS AGREEMENT
THIS STOCK RIGHTS AGREEMENT (THE "AGREEMENT") is made and entered into at
Santa Barbara, California, on the date hereinafter set forth by and between PDT,
INC., a Delaware corporation, hereinafter called the "COMPANY" and the person
whose name is set forth on the signature page hereof, hereinafter called the
"HOLDER", who is a key employee or key non-employee of the Company or one of its
subsidiaries.
WHEREAS:
A. The Board of Directors of the Company (THE "BOARD") adopted on May 17,
1996, with subsequent stockholder approval, the PDT, Inc. Stock Compensation
Plan (THE "PLAN");
B. The Plan provides for the awarding of Performance Shares, Stock
Payments or Dividend Equivalent Rights of the Company's common stock, par value
$0.01 (THE "STOCK") under the Stock Rights Program ("THE STOCK RIGHTS PROGRAM")
by a committee to be appointed by the Board (THE "PLAN ADMINISTRATORS") to key
employees or non-employees of the Company or any subsidiary of the Company as
the Plan Administrators may determine, subject to terms, conditions or
restrictions as the Plan Administrators may deem appropriate, in accordance with
the terms and provisions of the Plan; and
C. The Plan Administrators have awarded, pursuant to the Stock Rights
Program, Performance Shares, Stock Payments or Dividend Equivalent Rights as
defined on the signature page hereof (THE "AWARD") to the Holder conditioned
upon the execution of this Agreement by the Company and the Holder setting forth
all the terms and conditions applicable to the Award as documented herein.
NOW, THEREFORE, in consideration of the mutual promise and covenant
contained herein, the parties hereto, intending to be legally bound hereby,
agree as follows:
1. THE AWARD. Under the terms and conditions of the Plan and as
hereinafter set forth, the Company, with the approval and at the direction of
the Plan Administrators, hereby grants to the Holder the Award as set forth on
the signature page hereof, on the Date of Grant set forth on the signature page
hereof, covering the number of shares of Stock or Dividend Equivalent Rights set
forth on the signature page hereof subject to the terms, conditions and
restrictions set forth in this Agreement. In the case of a Stock Payment, the
transfer of the Stock shall constitute a transfer of such property in connection
with the Holder's performance of service to the Company, which transfer is
intended to constitute a "transfer" for purposes of Section 83 of the Internal
Revenue Code (THE "CODE").
STOCK RIGHTS AGREEMENT
PDT, INC. STOCK COMPENSATION PLAN
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2. PERFORMANCE SHARES. If the Award specified on the signature page
hereof is for Performance Shares, the Performance Shares shall become payable to
the Holder based upon the achievement of Performance Objectives as defined in
the Plan and specifically stated on the signature page hereof. Each Performance
Objective hereunder shall satisfy the conditions for performance-based awards
under Article I, Section 17 of the Plan. Payment for the Performance Shares
shall be due upon the date specified on the signature page hereof (THE "PAYMENT
DATE") and payment for the Performance Shares may be made in full in cash or by
certified cashier's check payable to the order of the Company or, with the prior
written consent of Plan Administrators, by shares of the Company's Common Stock
or by the surrender of all or part of an Award, or in other property, rights or
credits deemed acceptable by the Plan Administrators or, with the prior written
consent of the Plan Administrators, by a combination of the foregoing. If any
portion of the purchase price is paid in shares of the Company's Common Stock,
those shares shall be tendered at their then Fair Market Value as determined by
the Plan Administrators in accordance with Article I, Section 22 of the Plan.
Payment in shares of Common Stock includes the automatic application of shares
of Common Stock received upon the exercise or settlement of this Award or other
option or award to satisfy the exercise or settlement price. During the period
beginning on the Date of Grant as set forth on the signature page hereof and
ending on the expiration date set forth on the signature page hereof (THE
"PERFORMANCE PERIOD"), the Holder's right to the Stock shall be subject to a
risk of forfeiture (which risk is intended to constitute a "substantial risk of
forfeiture" for purposes of Section 83 of the Code). The issuance of the Stock
shall become nonforfeitable upon the achievement of the Performance Objectives
specified on the signature page hereof within the Performance Period and upon
payment in full for the Performance Shares at a price per share as specified on
the signature page hereof.
3. STOCK PAYMENTS. If the Award specified on the signature page hereof
is a Stock Payment, the Stock Payment may be paid to the Holder as a bonus or
additional compensation or in lieu of the obligation of the Company or a
subsidiary to pay cash compensation under other compensatory arrangements. The
Holder will be required to pay an amount equal to the aggregate par value of the
Stock newly issued for the Stock Payment specified on the signature page hereof
prior to the expiration date specified on the signature page hereof. The Holder
shall have all the voting, dividend, liquidation and other rights with respect
to shares of Common Stock issued to the Holder as a Stock Payment (THE "SHARES")
upon the payment in full of the aggregate par value of the Stock and the Holder
becoming holder of record of such shares of Common Stock. If specified on the
signature page hereof, the Company shall cause the stock certificates evidencing
the Shares to bear an appropriate legend substantially in the following form:
THE TRANSFERABILITY OF THIS CERTIFICATE AND THE SHARES OF STOCK
REPRESENTED HEREBY ARE SUBJECT TO THE TERMS AND CONDITIONS OF THE PDT,
INC. STOCK RIGHTS AGREEMENT ENTERED INTO BETWEEN THE REGISTERED OWNER
HEREOF AND PDT, INC., A COPY OF WHICH IS ON FILE AT THE OFFICES OF
PDT, INC.
The obligation of the Company to deliver the Shares hereunder shall be
subject to the condition that, if at any time the Plan Administrators determine
in their sole discretion that the listing, registration or qualification of the
Shares upon any securities exchange or under any state or federal law, or the
consent or approval of any governmental regulatory body, is necessary or
desirable as a condition of, or in connection with, the Shares or the issuance
or purchase of the Shares, the Shares may not be released by the Company in
whole or in part unless such listing, registration, qualification,
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consent or approval shall have been effected or obtained free of any conditions
not acceptable to the Plan Administrators.
4. DIVIDEND EQUIVALENT RIGHTS. If the Award specified on the signature
page hereof is a Dividend Equivalent Right the signature page shall specify
whether the Dividend Equivalent Right is granted in tandem with the grant of an
option, stock appreciation rights, Restricted Shares or Performance Shares or
whether the Dividend Equivalent Right is independent of any other award. The
signature page hereof shall specify the number of shares of the Company's Common
Stock to which the Dividend Equivalent Right is granted (THE "NUMBER OF
RIGHTS"), the term during which the Dividend Equivalent Right is payable (THE
"DIVIDEND PERIOD"), the date on which the Dividend Equivalent Right is payable
to the Holder (THE "PAYMENT DATE") and whether the Payment is subject to such
employment, Performance Objectives or other conditions. The Payment may be made
by the Company to the Holder in cash or by shares of the Company's Common Stock
or by a combination of the foregoing. The total payment attributable to a share
of Common Stock subject to the number of Dividend Equivalent Rights specified on
the signature page hereof shall not exceed one hundred percent (100%) of the
equivalent dividends payable with respect to an outstanding share of Common
Stock during the Dividend Period, taking into account any assumed reinvestment
(including assumed reinvestment in shares of Common Stock) or interest earnings
on such Number of Rights in the case of a deferred payment, provided that such
percentage may increase to a maximum of two hundred percent (200%) if the
Dividend Equivalent Right is subject to a Performance Objective as described in
Article I, Section 17 of the Plan.
5. TERMINATION OF AWARD. Except as herein otherwise stated, this
Award, to the extent not theretofore awarded to the Holder, shall terminate
forthwith on the earliest of the following:
(a). If the Holder ceases to be employed by or provide service to the
Company or any subsidiary for any reason other than death or disability, the
Award shall immediately terminate and be of no further force and effect,
provided, however, that the Plan Administrators may, in their sole discretion,
allow the Holder to purchase any Performance Shares, to the extent earned on the
date of termination, at any time within three (3) months after the date of
termination, but in no event later than the expiration date specified under
subparagraph (d) hereof. If the Holder is terminated "for cause" under any
agreement between the Company and the Holder or under any policy of the Company,
the Award will terminate immediately upon the date of termination. In the case
of Dividend Equivalent Rights, the Plan Administrators may, in their sole
discretion, pay the Dividend Equivalent Rights earned during the Dividend Period
prior to the termination date if the Holder is terminated prior to the Payment
Date.
(b). If the Holder becomes disabled within the meaning of the
Internal Revenue Code of 1986, as amended, Section 422(e)(3) while employed by
the Company or any subsidiary, the Plan Administrators, in their sole
discretion, may allow the Holder to purchase any Performance Shares, to the
extent earned on the date of termination of employment, at any time within one
(1) year after the date of the termination of employment due to disability, but
in no event later than the expiration date specified under subparagraph (d)
hereof. In the case of Dividend Equivalent Rights, the Plan Administrators may,
in their sole discretion, pay the Dividend Equivalent Rights earned during the
Dividend Period prior to the termination date if the Holder is terminated prior
to the Payment Date.
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(c). If the Holder dies while employed by the Company or any
subsidiary, or within three (3) months after ceasing to be an employee thereof,
the Award shall expire one (1) year after the date of death, but in no event
later than the expiration date specified in subparagraph (d) hereof. During the
one (1) year period, any Performance Shares may be purchased, to the extent
earned and unpurchased on the date of death, by the person or persons whom the
Holder's rights under the Option shall pass by will or by laws of descent and
distribution and pursuant to Article I, Section 19 of the Plan, but only to the
extent that the Holder is entitled to purchase any Performance Shares at the
time of death.
(d) Ten (10) years from the Date of Grant specified on the signature
page hereof.
6. CHANGE OF CONTROL. If a Change of Control (as defined below) occurs
prior to the end of the Performance Period, in the case of an Award of
Performance Shares, or the end of a Dividend then from and after the
Acceleration Date (as defined below), the Restriction Period shall lapse,
whether or not the Performance Conditions have been met and certificates
representing such Shares shall be delivered to the Holder no later than the
fifth day following the Acceleration Date.
As defined herein, "CHANGE OF CONTROL" shall mean the occurrence of any of
the following: (i) any "person" or "group" (as such term is used in Sections
13(d) and 14(d)(2) of the Exchange Act), other than the Company, a trustee or
other fiduciary holding securities under an employee benefit plan of the Company
or a company owned, directly or indirectly, by the stockholders of the Company
in substantially the same proportions as their ownership of stock of the
Company), is or becomes the "beneficial owner" (as defined in Rule 13d-3 under
the Exchange Act), directly or indirectly, of securities of the Company
representing 20% or more of the total combined voting power represented by the
Company's then outstanding voting securities; or (ii) during any period of two
consecutive years, individuals who at the beginning of such period constitute
the Board and any new director (other than a director designated by a person who
has entered into an agreement with the Company to effect a transaction described
in clause (i), (iii) or (iv) of this definition) whose election by the Board or
nomination for election by the Company's stockholders was approved by a vote of
at least two-thirds (2/3) of the directors who either were directors at the
beginning of the two-year period or whose election or nomination for election
was previously so approved, cease for any reason to constitute a majority
thereof; (iii) any Reorganization as defined below; or (iv) the stockholders of
the Company adopt a plan of complete liquidation of the Company.
The term "REORGANIZATION" as used herein shall mean: (i) the approval by
the stockholders of the Company of any statutory merger, consolidation or share
exchange to which the Company is a party as a result of which the persons who
were stockholders of the Company immediately prior to the effective date of such
Reorganization shall have beneficial ownership of less than fifty percent (50%)
of the total combined voting power in the election of directors of the surviving
corporation following the effective date of such Reorganization; or (ii) the
approval by stockholders of an agreement for the sale or disposition by the
Company of all or substantially all of the assets of the Company.
For purposes of this definition of Reorganization, the term "sale or
disposition by the Company of all or substantially all of the assets of the
Company" shall mean a sale or other disposition transaction or series of related
transactions involving assets of the Company or any subsidiary thereof
(including the stock of any direct or indirect subsidiary of the Company) in
which the value of the assets or stock being sold or otherwise disposed of (as
measured by the purchase price being paid therefor or by such other method as
the Board of Directors of the Company determines is appropriate
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in a case where there is no readily ascertainable purchase price) constitutes
more than two-thirds of the fair market value of the Company (as hereinafter
defined). For purposes of the preceding sentence, the "fair market value of the
Company" shall be the aggregate market value of the outstanding shares of Common
Stock of the Company (on a fully diluted basis) plus the aggregate market value
of the Company's other outstanding equity securities. The aggregate market
value of the shares of Common Stock of the Company shall be determined by
multiplying the number of shares of the Company's Common Stock (on a fully
diluted basis) outstanding on the date of the execution and delivery of a
definitive agreement with respect to the transaction or series of related
transactions (the "Transaction Date") by the average closing price of the shares
of Common Stock of the Company for the ten trading days immediately preceding
the Transaction Date. The aggregate market value of any other equity securities
of the Company shall be determined in a manner similar to that prescribed in the
immediately preceding sentence for determining the aggregate market value of the
shares of Common Stock of the Company or by such other method as the Board shall
determine is appropriate.
As defined herein, "ACCELERATION DATE" shall mean the earliest date on
which any of the following events shall have first occurred: (i) the acquisition
described in clause (i) of the definition of Change of Control above; (ii) the
change in the composition of the Board of Directors of the Company described in
clause (ii) above; or (iii) the stockholder approval or adoption described in
clauses (iii) and (iv) above.
7. NONTRANSFERABILITY OF SHARES OR RIGHTS. If specified on the
signature page hereof, in the case of a Stock Payment, the Holder may not sell,
pledge, assign, transfer in any manner, exchange or otherwise encumber of make
subject to any creditor's process, whether voluntarily, involuntarily or by
operation of law, the Shares, other than by will or the laws of descent and
distribution pursuant to Article I, Section 19 of the Plan and any attempt to do
so shall be of no effect. In the case of Dividend Equivalent Rights, the Holder
may not sell, pledge, assign, transfer in any manner, exchange or otherwise
encumber of make subject to any creditor's process, whether voluntarily,
involuntarily or by operation of law, the Dividend Equivalent Rights, other than
by will or the laws of descent and distribution pursuant to Article I, Section
19 of the Plan and any attempt to do so shall be of no effect. In the case of
Performance Shares, any restrictions on transfer shall lapse at the end of the
Performance Period as defined above and upon payment in full for the Performance
Shares by the Holder.
8. COMPLIANCE WITH SECURITIES LAWS. No Shares to be awarded hereunder
shall be delivered to the Holder unless such delivery shall comply with all
applicable provisions of foreign, state and federal law including, without
limitation, the Securities Act of 1933, as amended, and the Exchange Act, and
the rules and regulations promulgated thereunder, and the requirements of any
stock exchange upon which the shares of Common Stock may then be listed. As a
condition of the delivery of any Shares hereunder to the Holder, the Plan
Administrators may require the Holder to furnish evidence satisfactory to the
Company, including a written and signed representation letter and consent to be
bound by any transfer restriction imposed by law, legend, condition or
otherwise, that the Shares are being purchased only for investment and without
any present intention to sell or distribute the Shares in violation of any state
or federal law, rule or regulation, if required by the Company. Further, the
Holder shall consent to the imposition of a legend on the Shares and the
imposition of stop-transfer instructions restricting their transferability as
may be required by the Plan Administrators in their discretion to ensure
compliance with such laws.
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9. CONTINUED EMPLOYMENT. The Holder may be required to agree in
writing, as a condition of receiving an Award hereunder, that he or she will
remain in the employment or service of the Company or its subsidiaries following
the Date of Grant for a period specified by the Plan Administrators, in their
discretion. Nothing in the Plan or in this Agreement shall confer upon the
Holder any right to continued employment by, or service to, the Company or its
subsidiaries or limit in any way the right of the Company or its subsidiaries at
any time to terminate or alter the terms of that employment or service
agreement. In the discretion of the Plan Administrators, the Holder may also be
required to agree to non-competition, non-disclosure, non-solicitation or any
other terms or provisions not inconsistent with the Plan in consideration of the
grant of the Award.
10. WITHHOLDING. The grant of the Award hereunder is subject to the
condition that if, at any time, the Company shall determine in its sole
discretion, that the satisfaction of withholding tax or other withholding
liabilities under any state or federal law is necessary or desirable as a
condition of, or in connection with, such grant of any Shares or rights pursuant
hereto, then in such event, the grant of the Award shall not be effective unless
such withholding shall have been effected or obtained in a manner acceptable to
the Company. At the Company's sole and complete discretion, the Company may,
from time to time unilaterally withhold or voluntarily accept shares of the
Company's Common Stock already issued to the Holder and/or stock subject to an
Award as defined in the Plan as the source of payment for such liabilities.
11. BINDING EFFECT; AMENDMENT. This Agreement shall be binding upon and
inure to the benefit of the heirs, executors, administrators and successors of
the parties hereto. The Agreement may be amended by the Plan Administrators at
any time (i) if the Plan Administrators determine, in their sole discretion,
that amendment is necessary or advisable in the light of any addition to or
change in the Internal Revenue Code of 1986 or in the regulations issued
thereunder, or any federal or state securities law or other law or regulation,
which change occurs after the Date of Grant and by its terms applies to the
Shares; or (ii) other than in the circumstances described in clause (i) above,
with the written consent of the Holder.
12. NOTICES. All notices, requests, demands and other communications
hereunder shall be in writing and shall be deemed to have been duly given if
delivered personally or by certified mail, return receipt requested, to the
Company's and the Holder's addresses as set forth on the signature page hereof.
13. INCORPORATION OF PLAN BY REFERENCE. This Agreement is granted
pursuant to the terms of the PDT, Inc. Stock Compensation Plan, the terms of
which are incorporated herein by reference and the Agreement shall, in all
respects, be interpreted in accordance with the Plan. The Plan Administrators
shall interpret and construe the Plan and the Agreement, and their
interpretations and determinations shall be conclusive and binding on the
parties hereto and any other person claiming an interest hereunder, with respect
to any issue arising hereunder or thereunder. In case of any conflict in the
terms of the Plan, or between the Plan and this Agreement, the provisions in the
Article of the Plan which specifically grants restricted shares shall control
those in a different Article and the provisions of the Plan shall control those
in this Agreement.
14. CHOICE OF LAW AND VENUE. This Agreement, the Plan and all related
documents shall be governed by, and construed in accordance with, the laws of
the State of California (except to the extent the provisions of Delaware
corporate law may be applicable). Acceptance of this Agreement shall be deemed
to constitute consent to the jurisdiction and venue of the Superior Court of
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Santa Xxxxxxx County, California and the United States District Court of the
Central District of California for all purposes in connection with any suit,
action or other proceeding relating to this Agreement, including the enforcement
of any rights under the Plan or any agreement or other document, and shall be
deemed to constitute consent to any process or notice of motion in connection
with such proceeding being served by certified or registered mail or personal
service within or without the State of California, provided a reasonable time
for appearance is allowed.
15. FORCE AND EFFECT. The various provisions of this Agreement are
severable in their entirety. Any determination of invalidity or
unenforceability of any one provision shall have no effect on the continuing
force and effect of the remaining provisions.
16. ENTIRE AGREEMENT. This Agreement and the Plan contain the entire
understanding of the parties and except as provided herein and in the Plan, this
Agreement shall not be modified or amended except in writing and duly signed by
the parties hereto. No waiver by either party of any default under this
Agreement shall be deemed a waiver of any later default.
IN WITNESS WHEREOF, the Company has caused its duly authorized officers to
execute this Stock Rights Agreement and the Holder has placed his or her
signature hereon, effective as of the Date of Grant.
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STOCK RIGHTS AGREEMENT: #SR. ____
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FOR PERFORMANCE SHARES ONLY:
DATE OF GRANT: PAYMENT DATE: EXPIRATION DATE:
____________________ ____________________ ____________________
NUMBER OF PERFORMANCE SHARES: HOLDER:
___________________ __________________________________
PERFORMANCE CONDITIONS:
_______________________________________________________________________________
SIGNATURES ON NEXT PAGE
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STOCK RIGHTS AGREEMENT: #SR. ____
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FOR STOCK PAYMENTS ONLY:
DATE OF GRANT: PAYMENT DATE: EXPIRATION DATE:
____________________ ____________________ ____________________
NUMBER OF SHARES: HOLDER:
___________________ _____________________________________________
RESTRICTION ON TRANSFER:
________________________________________________________________________________
SIGNATURES ON NEXT PAGE
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STOCK RIGHTS AGREEMENT: #SR. ____
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FOR DIVIDEND EQUIVALENT RIGHTS ONLY:
DATE OF GRANT: TERM OF DIVIDEND EQUIVALENT RIGHT:
____________________ _________________________
NUMBER OF SHARES: HOLDER:
___________________ __________________________________________
IN TANDEM WITH ANOTHER AWARD:
_____ (IF YES--IDENTIFY OTHER AWARD) _______________________________
DATE PAYABLE:
_______________________________________
CONDITIONS:
______ PERFORMANCE OBJECTIVES
______________________________________________________
______ CONTINUED EMPLOYMENT
______________________________________________________
______ OTHER CONDITIONS
______________________________________________________
SIGNATURES ON NEXT PAGE
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THE "COMPANY"
PDT, INC.
BY: _________________________________________
XXXX X. XXXXXXX, PH.D.
TITLE C.E.O. & CHAIRMAN
ADDRESS: 0000 XXXXXXXXX XXXXXX
XXXXX XXXXXXX, XXXXXXXXXX 00000
805/685-9880
ACCEPTED AND AGREED TO:
THE "HOLDER"
SIGNATURE: _____________________________________________
PRINTED NAME: ________________________________________
ADDRESS: _____________________________________________
_____________________________________________
SOCIAL SECURITY #: ___________________________________
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