NEUROCRINE BIOSCIENCES, INC. Restricted Stock Unit Agreement Grant Notice
EXHIBIT
10.3
NEUROCRINE BIOSCIENCES, INC.
2003 INCENTIVE STOCK PLAN
Grant Notice
Neurocrine Biosciences, Inc. (the “Company”) hereby grants you, [ ] (the
“Employee”), an award of Restricted Stock Units (“RSUs”) under the Company’s 2003 Incentive Stock
Plan, as amended (the “Plan”), the terms of which are hereby incorporated by reference. The date
of this Restricted Stock Unit Agreement, which includes Appendix A attached hereto and incorporated
herein (the “Agreement”), is September 26, 2006 (the “Effective Date”). Subject to the remaining
terms of this Agreement and of the Plan, the principal features of this award are as follows:
Number of RSUs:
Vesting of RSUs: The RSUs will vest according to the following schedule:
So long as you remain in Continuous Status as an Employee or Consultant through each such date,
1/3rd of the RSUs shall vest on each of the thirteen (13), twenty-four (24) and
thirty-six (36) month anniversaries of the Effective Date, so that the RSUs will become fully
vested on the thirty-six (36) month anniversary of the Effective Date (the “Vesting Schedule”).
The RSUs are also subject to the vesting conditions set forth in paragraph 4 of the attached
Appendix A.
Unless otherwise defined herein or in Appendix A, capitalized terms herein or in
Appendix A shall have the defined meanings ascribed to them in the Plan.
Your signature below indicates your agreement and understanding that this award is subject to all
of the terms and conditions contained in this Agreement (including Appendix A) and the
Plan. For example, important additional information on vesting and forfeiture of the RSUs is
contained in Paragraphs 4 through 6 of Appendix A. PLEASE BE SURE TO READ ALL OF APPENDIX
A, WHICH CONTAINS THE SPECIFIC TERMS AND CONDITIONS OF THIS AGREEMENT.
| NEUROCRINE BIOSCIENCES, INC. | EMPLOYEE | |||||||
| Xxx Xxxxxxxx | [NAME] | |||||||
| Address: | ||||||||
VP and CFO |
||||||||
Date:
9/26/06
|
Date: | |||||||
APPENDIX A
TERMS AND CONDITIONS OF RESTRICTED STOCK UNITS
1. Grant. The Company hereby grants to the Employee under the Plan an award of that
number of RSUs set forth on the first page of this Agreement, subject to all of the terms and
conditions in this Agreement and the Plan.
2. Plan Governs. The RSUs are issued pursuant to, and the terms of this Agreement are
subject to, all terms and provisions of the Plan, including without limitation Section 15 of the
Plan. Except as provided in paragraph 4(b) below, in the event of a conflict between one or more
provisions of this Agreement and one or more provisions of the Plan, the provisions of the Plan
will govern.
3. Company’s Obligation to Pay. Each RSU has a value equal to the fair market value
of a share of Common Stock on the date the shares subject thereto are distributed. Unless and
until the RSUs will have vested in the manner set forth in paragraphs 4 and 5, the Employee will
have no right to payment of any such RSUs. Prior to actual payment of any vested RSUs, such RSUs
will represent an unsecured obligation of the Company, payable (if at all) only from the general
assets of the Company. Nothing contained in this Agreement, and no action taken pursuant to its
provisions, shall create or be construed to create a trust of any kind or fiduciary relationship
between Employee and the Company or any other person.
4. Vesting.
(a) Subject to paragraph 5, the RSUs awarded by this Agreement will vest in the Employee
according to the Vesting Schedule set forth on the first page of this Agreement, subject to the
Employee’s remaining in Continuous Status as an Employee or Consultant through such vesting periods
or dates.
(b) Notwithstanding anything to the contrary set forth in the Plan, the vesting of the RSUs
awarded by this Agreement shall not accelerate in accordance with Section 9(d) of the Plan in
connection with a termination of Employee’s Continuous Status as an Employee as a result of
Employee’s retirement from the Company.
(c) In the event of a Change in Control of the Company approved by the majority of the members
of the Board on the Board prior to the commencement of such Change in Control, the RSUs shall be
assumed or an equivalent award or right substituted by the successor corporation or a Parent or
Subsidiary of the successor corporation; provided, however, in the event that within one year of
the date of the completion of the Change in Control, the successor corporation or a Parent or
Subsidiary of the successor corporation terminates the Employee without Cause, the RSUs shall
become immediately fully vested. In the event that the successor corporation refuses to assume or
substitute the RSUs, the RSUs shall become immediately fully vested and the shares subject to the
RSUs shall be issued to Employee immediately prior to the Change in Control, provided that such
transaction also qualifies as a change in the ownership or effective control of the Company, or in
the ownership of a substantial portion of the assets of the Company, in each case for purposes of
Section 409A(a)(2)(A)(v) of the Internal Revenue Code and the regulations and other guidance
thereunder (“Section 409A Change of Control”).
(d) In the event of a Change in Control which is not approved by the majority of the members
of the Board on the Board prior to the commencement of a Change in Control, the RSUs shall
immediately fully vest. In the event that the successor corporation refuses to assume or
substitute the RSUs, the shares subject to the RSUs shall be issued to Employee immediately prior
to the Change in Control , provided that such transaction also qualifies as a Section 409A Change
of Control.
(e) The RSUs shall be considered assumed if, following the Change in Control, the RSUs confer
the right to receive, for each Share of Common Stock subject to the RSUs immediately prior to the
Change in Control, the consideration (whether stock, cash, or other securities or property)
received in the Change in Control by holders of Common Stock for each Share held on the effective
date of the transaction (and if holders were offered a choice of consideration, the type of
consideration chosen by the holders of a majority of the outstanding Shares); provided, however,
that if such consideration received in the Change in Control is not solely common stock of the
successor corporation or its Parent, the Board may, with the consent of the successor corporation,
provide for the consideration to be issued pursuant to the RSUs, for each Share of Common Stock
subject to the RSUs, to be solely common stock of the successor corporation or its Parent equal in
fair market value to the per share consideration received by holders of Common Stock in the Change
in Control.
5. Forfeiture upon Termination as Service Provider. Notwithstanding any contrary
provision of this Agreement, if the Employee terminates Continuous Status as an Employee or
Consultant for any or no reason, the then-unvested RSUs awarded by this Agreement will thereupon be
forfeited at no cost to the Company and the Employee shall have no further rights thereunder. To
the extent not already paid, RSUs that vest in accordance with the Vesting Schedule shall be paid
following the Employee’s termination of Continuous Status as an Employee or Consultant in
accordance with paragraph 6 or 8 below, as applicable.
6. Issuance after Vesting. If Employee does not elect to defer his or her
distribution of the shares subject to the RSUs in accordance with paragraph 8 below, shares of
Common Stock subject to any RSUs that vest in accordance with the Vesting Schedule will be issued
to the Employee (or in the event of the Employee’s death, to his or her estate) in whole shares of
Common Stock on each of the thirteen (13), twenty-four (24) and thirty-six (36) month anniversaries
of the Effective Date (each a “Vesting Distribution Date”), in each case not later than ten (10)
days following each Vesting Distribution Date, with respect to shares of Common Stock subject to
those RSUs that have vested on each such date.
7. Tax Withholding. On or before the time Employee receives a distribution of shares
of Common Stock pursuant to the RSUs, or at any time thereafter as requested by the Company, the
Employee must make adequate provision, as determined by the Company, for any sums required to
satisfy the federal, state, local and foreign tax withholding obligations of the Company or a
Subsidiary, if any, which arise in connection with the vesting and/or issuance of the shares
subject to the RSUs. Unless the tax withholding obligations of the Company and/or any Subsidiary
are satisfied, the Company shall have no obligation to issue the shares of Common Stock subject to
the RSU. If the Employee does not satisfy the tax withholding obligations of the Company and/or
any Subsidiary within thirty (30) days following receipt of notice from the Company, then the RSU
will automatically terminate and the Employee will not be issued any shares pursuant to the RSU.
8. Deferral Election.
(a) Election Whether to Defer Distribution of RSU Shares. Each Employee must elect
whether to defer his or her distribution of the RSU shares to a date following the Vesting
Distribution Date in accordance with paragraph 8(b) or 8(c) below, as applicable. Employees who
are not eligible to participate in the Amended and Restated Neurocrine Biosciences, Inc.
Nonqualified Deferred Compensation Plan (the “Deferred Compensation Plan”), as amended, must make
an election pursuant to paragraph 8(b) below. Employees who are eligible to participate in the
Deferred Compensation Plan (“Selected Employees”) must make an election pursuant to paragraph 8(c)
below. If an Employee does not make a valid, timely election pursuant to paragraph 8(b) or 8(c)
below, as applicable, the Employee will be deemed to have affirmatively elected not to defer his or
her distribution of the RSU shares, and the shares will be delivered to Employee in accordance with
paragraph 6.
(b) Standard Deferral Election. Employees who are not Selected Employees must make an
election whether to defer receipt of the RSU shares pursuant to the terms and conditions of the
Standard Deferral Election Agreement attached hereto as Exhibit A. Subject to a valid
deferral election made within thirty (30) days following the Effective Date, the Employee may elect
to defer the timing of the receipt of shares under this Agreement and have such shares issued at a
later date pursuant to the terms and conditions of the Standard Deferral Election Agreement. Such
deferral elections must also comply with the requirements of Section 409A of the Internal Revenue
Code of 1986, as amended (the “Code”), and the related Treasury Regulations or other guidance
issued thereunder.
(c) Deferral Election Under Deferred Compensation Plan by Selected Employees.
Selected Employees must make an election whether to defer receipt of the RSU shares pursuant to the
terms and conditions of the Deferred Compensation Plan Deferral Election Agreement attached hereto
as Exhibit B. Subject to a valid deferral election made within thirty (30) days following
the Effective Date, Selected Employees may elect to defer the timing of the receipt of the shares
under this Agreement and have such shares issued at a later date pursuant to the terms and
conditions of the Deferred Compensation Plan and the Deferred Compensation Plan Deferral Election
Agreement. Such deferral elections must also comply with the requirements of Section 409A of the
Internal Revenue Code of 1986, as amended (the “Code”), and the related Treasury Regulations or
other guidance issued thereunder. To make a valid deferral election pursuant to this paragraph
8(c), Employee must also complete a Deferred Compensation Plan Beneficiary Designation form, in
substantially the form attached hereto as Exhibit C.
(d) Deferred Distribution Date. The date upon which the shares of Common Stock are
scheduled to be delivered pursuant to any deferral election made under this paragraph 8 is the
“Deferred Distribution Date.” Shares of Common Stock subject to any RSUs that are subject to any
deferral election made under this paragraph 8 will be issued to the Employee (or in the event of
the Employee’s death, to his or her estate) in whole shares of Common Stock in each case not later
than ten (10) days following the Deferred Distribution Date
9. Delay in Issuance of Shares. Notwithstanding anything to the contrary set forth
herein, if the Company determines that the Employee’s sale of shares of Common Stock on the date
the shares subject to the RSUs are scheduled to be delivered, whether on the Vesting Distribution
Date or a Deferred Distribution Date selected pursuant to paragraph 8 above (in either case, the
“Original Distribution Date”) would violate its policy regarding xxxxxxx xxxxxxx of the Company’s
stock, as determined by the Company in accordance with such policy, then such shares shall not be
delivered on such Original Distribution Date and shall instead be delivered as soon as practicable
on or after the earliest date on which the Employee could sell such shares pursuant to such policy;
provided, however, that in no event shall the delivery of the shares be delayed pursuant to this
provision beyond the later of: (1) December 31st of the same calendar year of the Original
Distribution Date, or (2) the 15th day of the third calendar month following the Original
Distribution Date.
10. Rights as Stockholder. Neither the Employee nor any person claiming under or
through the Employee will have any of the rights or privileges of a stockholder of the Company in
respect of any shares of Common Stock deliverable hereunder unless and until certificates
representing such shares of Common Stock will have been issued, recorded on the records of the
Company or its transfer agents or registrars, and delivered to the Employee.
11. No Effect on Employment. This Agreement is not an employment contract, and
nothing herein shall be deemed to create in any way whatsoever any obligation on the Employee’s
part to continue in the employ of the Company, or of the Company to continue the Employee’s
employment with the Company. The Employee’s employment with the Company is on an at will basis
only. The Company will have the right, which is hereby expressly reserved, to terminate or change
the terms of the employment of the Employee at any time for any reason whatsoever, with or without
good cause.
12. Address for Notices. Any notice to be given to the Company under the terms of
this Agreement will be addressed to the Company at its principal place of business (attention:
General Counsel), or at such other address as the Company may hereafter designate in writing. Any
notices provided for in this Agreement or the Plan shall be given in writing and shall be deemed
effectively given upon receipt or, in the case of notices delivered by the Company to the Employee,
five (5) days after deposit in the United States mail, postage prepaid, addressed to the Employee
at the address specified on the first page of this Agreement or at such other address as the
Employee may hereafter designate by written notice to the Company.
13. Transferability. Unless determined otherwise by the Board, this grant and the
rights and privileges conferred hereby, including without limitation the shares of Common Stock
issuable following the vesting of the RSUs, will not be sold, pledged, assigned, hypothecated,
transferred, or disposed of in any manner (whether by operation of law or otherwise) and will not
be subject to sale under execution, attachment or similar process until, with respect to whole
shares of Common Stock issuable following the vesting of the RSUs, such shares are issued pursuant
to paragraph 6 or 8 above. Upon any attempt to sell, pledge, assign, hypothecate, transfer, or
dispose of this grant, or any right or privilege conferred hereby, or upon any attempted sale under
any execution, attachment or similar process, this grant and the rights and privileges conferred
hereby immediately will become null and void.
14. Binding Agreement. Subject to the limitations on the transferability of this
grant contained herein, this Agreement will be binding upon and inure to the benefit of the heirs,
legatees, legal representatives, successors and assigns of the parties hereto.
15. Additional Conditions to Issuance of Stock. If at any time the Company will
determine, in its discretion, that the listing, registration or qualification of the shares of
Common Stock upon any securities exchange or under any state or federal law, or the consent or
approval of any governmental regulatory authority, is necessary or desirable as a condition to the
issuance of shares of Common Stock to the Employee (or his or her estate), such issuance will not
occur unless and until such listing, registration, qualification, consent or approval will have
been effected or obtained free of any conditions not acceptable to the Company. The Company will
make all reasonable efforts to meet the requirements of any such state or federal law or securities
exchange and to obtain any such consent or approval of any such governmental authority.
16. Committee Authority. The Committee will have the power to interpret the Plan and
this Agreement and to adopt such rules for the administration, interpretation and application of
the Plan and 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
will be final and binding upon Employee, the Company and all other interested persons. No member
of the Committee will be personally liable for any action, determination or interpretation made in
good faith with respect to the Plan or this Agreement.
17. Captions. Captions provided herein are for convenience only and are not to serve
as a basis for interpretation or construction of this Agreement.
18. Agreement Severable. In the event that any provision in this Agreement will be
held invalid or unenforceable, such provision will be severable from, and such invalidity or
unenforceability will not be construed to have any effect on, the remaining provisions of this
Agreement.
19. Amendment. The Committee may amend, terminate or revoke this Agreement in any
respect to the extent determined necessary or desirable by the Committee in its discretion to
comply with the requirements of Section 409A of the Code and the Treasury Regulations or other
guidance issued thereunder. Employee expressly understands and agrees that no additional consent
of Employee shall be required in connection with such amendment, termination or revocation.
EXHIBIT A
Standard Deferral Election Agreement
Please complete this Standard Deferral Election Agreement (“Election Agreement”) and return a
signed copy to Xxxxx Xxx no later than the thirtieth (30th) day following the Effective
Date as indicated on your Restricted Stock Unit Agreement.
| I. | Deferral Election (check one) | |
| Election to Defer: |
| ___ | Employee hereby irrevocably elects to defer receipt of the shares of Common Stock associated with the RSUs provided for in the Grant Notice and Appendix A thereto, to which this Exhibit A is attached, until the fifth anniversary of the Effective Date. |
| Decline: |
| ___ | Employee hereby irrevocably elects not to defer receipt of the shares of Common Stock associated with the RSUs provided for in the Grant Notice and Appendix A thereto, to which this Exhibit A is attached (shares will be issued to Employee as the RSU award vests in accordance with the Restricted Stock Unit Agreement). |
| II. | Terms and Conditions of Deferral Election |
If Employee elects to defer receipt of the shares subject to the RSU pursuant to this Election
Agreement, by signing this Election Agreement, Employee hereby acknowledges his or her
understanding and acceptance of each of the following:
| 1. | Acceleration of Issuance of Shares Upon Termination of Continuous Status as an Employee or Consultant. In the event of Employee’s termination of Continuous Status as an Employee or Consultant prior to the fifth anniversary of the Effective Date that qualifies as a “separation from service” within the meaning of Code Section 409A(a)(2)(A)(i) and the regulations and other guidance promulgated thereunder, then any vested shares of Common Stock subject to the RSUs shall instead be delivered to Employee on the date of his or her termination of Continuous Status as an Employee or Consultant. | |
| 2. | Acceleration of Issuance of Shares Upon Change in Control. Notwithstanding Employee’s deferral election pursuant to this Election Agreement, in the event that a successor corporation refuses to assume or substitute the RSUs in connection with a Change in Control, the shares subject to the RSUs shall instead be issued to Employee immediately prior to the Change in Control to the extent provided in paragraph 4 of the Appendix. | |
| 3. | Delay in Distribution for Specified Employees. Notwithstanding anything to the contrary set forth herein, if at the time the shares of Common Stock would otherwise be issued to Employee as a result of termination of Continuous Status as an Employee or Consultant, Employee is subject to the distribution limitations contained in Section 409A of the Code applicable to “specified employees,” share issuances resulting from a termination of Continuous Status as an Employee or Consultant shall not be made before the date which is six (6) months following the date of termination of Continuous Status as an Employee or Consultant, or, if earlier, the date of Employee’s death that occurs within such six (6) month period. | |
| 4. | Delay in Distribution for Insiders. Notwithstanding the foregoing election, as described in paragraph 9 of the Appendix to the RSU Agreement, the distribution of shares may be delayed if the Company determines that Employee’s sale of the shares on such date would violate the Company’s policy regarding xxxxxxx xxxxxxx of the Company’s stock, as determined by the Company in accordance with such policy. | |
| 5. | Effective Election. In order for the foregoing deferral election to become effective, this Election Agreement must be submitted by Employee to Xxxxx Xxx on or before thirty (30) days following the Effective Date of the RSUs. | |
| 6. | Withholding. The Company shall require that Employee make adequate provision for any federal, state, or local tax required by law to be withheld prior to the issuance of the shares of Common Stock. | |
| 7. | Nonassignable. Employee’s rights and interests under this Election Agreement may not be assigned, pledged, or transferred. | |
| 8. | Termination of this Election Agreement. The Company reserves the right to terminate this Election Agreement at any time. In such case, any vested shares of Common Stock granted to Employee pursuant to the Restricted Stock Unit Agreement may be issued to Employee immediately, to the extent permitted by Section 409A of the Code and the regulations and other guidance promulgated thereunder. |
| 9. | Bookkeeping Account. The Company will establish a bookkeeping account to reflect the number of shares of Common Stock that Employee may acquire pursuant to the RSUs and the fair market value of such shares of Common Stock that are subject to this Election Agreement. | |
| 10. | Governing Law. This Election Agreement shall be construed and administered according to the internal laws of the State of California, without regard to its conflicts of laws principles. | |
| III. | Authorization and Signature |
By completing and executing this Election Agreement, Employee authorizes the Company to defer or
not defer, as applicable, the issuance of the shares subject to the RSU award. Employee
acknowledges that the Company has not made any representations concerning future performance of the
Company’s Common Stock. Further, Employee has not relied upon advice from the Company in making
Employee’s election. By executing this Election Agreement, the Employee hereby acknowledges his or
her understanding of and agreement with all the terms and provisions set forth herein.
| Employee | Neurocrine Biosciences, Inc. | |||||||
| By: | ||||||||
| Name: | ||||||||
| Title: | ||||||||
Date:
|
Date: | |||||||
EXHIBIT B
Deferred Compensation Plan Deferral Election Agreement (RSU Awards)
Please complete this Deferred Compensation Plan Deferral Election Agreement (“Election Agreement”)
and return a signed copy to Xxxxx Xxx no later than the thirtieth (30th) day following
the Effective Date as indicated on your Restricted Stock Unit Agreement (“RSU Agreement”).
Defined terms not explicitly defined in this Election Agreement but defined in the Company’s 2003
Incentive Stock Plan (“Plan”), the Company’s Amended and Restated Nonqualified Deferred
Compensation Plan (“Deferred Compensation Plan”), or your RSU Agreement shall have the same
definitions as in such documents.
| I. | Deferral Election (check one) | |
| Election to Defer: |
| ___ | Employee hereby irrevocably elects to defer receipt of the shares of Common Stock associated with the RSUs provided for in the Grant Notice and Appendix A thereto, to which this Exhibit B is attached, in accordance with the terms of the Deferred Compensation Plan. |
| Decline: |
| ___ | Employee hereby irrevocably elects not to defer receipt of the shares of Common Stock associated with the RSUs provided for in the Grant Notice and Appendix A thereto, to which this Exhibit B is attached (shares will be issued to Employee as the RSU award vests in accordance with the RSU Agreement). |
If Employee elects above to defer receipt of the shares subject to the RSUs, Employee must complete
Deferral Alternative #1 (Termination of Service). Selecting Deferral Alternative #2 is optional.
If Employee selects Deferral Alternative #2, Employee must also complete the applicable portion
that follows such selection.
All Employees Who Elect To Defer Receipt Of Their RSUs Must Complete This Section
Deferral Alternative #1 (Termination of Service):
| o | Employee elects to receive the vested shares of Common Stock associated with the RSUs upon his or her termination of service. |
PLEASE NOTE: The above election will apply in the event of Employee’s termination of
service for any reason, including due to Employee’s Death, Disability or Retirement. The
shares subject to the RSUs will be issued in a single lump sum upon termination of
service. However, for termination of service distributions Employee may (but is not
required to) instead elect annual installment distribution of the shares, as follows:
| o | Employee elects to receive the vested shares of Common Stock associated with the RSUs upon his or her termination of service in substantially equal annual installments as follows: |
| o | annual installments (elect 2-15) | ||
| PLEASE NOTE: The above election to receive a distribution of shares in annual installments instead of a lump sum will only apply if the number of shares subject to each annual installment is at least 2,500 shares. If the number of shares to be distributed pursuant to any annual installment would be less than 2,500 shares, the shares subject to the RSUs will be issued in a single lump sum upon termination of service. | |||
Completion Of This Section Is Optional
Deferral Alternative #2: (Specified Date(S) — Check boxes that apply)
| o | Employee elects to receive the vested shares of Common Stock associated with the RSUs on the following specified dates (must be year 2013 or later) for the following number of shares: | |||||||||||||
| A. | o | |||||||||||||
| Number of shares | Month | Day | Year | |||||||||||
| B. | o | |||||||||||||
| Number of shares | Month | Day | Year | |||||||||||
| C. | o | |||||||||||||
| Number of shares | Month | Day | Year | |||||||||||
| D. | o | |||||||||||||
| Number of shares | Month | Day | Year | |||||||||||
PLEASE NOTE: If Employee’s Retirement, Death, Disability, or
Termination of Employment occurs before the elected specified date(s), the
shares will not be issued to Employee on the specified date(s) elected above,
but will instead be issued to Employee in accordance with Employee’s deferral
election under Alternative #1 (Termination of Service). Employee may elect up
to four separate specified dates, and may not elect that fewer than 5,000 shares
be issued to Employee on any specified date.
II. Election Conditions
The following conditions apply to the foregoing deferral election:
| 1. | Employee may elect a Deferred Distribution Date that occurs after the date of vesting of the RSUs. The “Deferred Distribution Date” is the date as of which Employee will receive the shares of vested Common Stock associated with the RSUs that Employee elects to defer. Unless Employee timely elects otherwise on this Election Agreement, such shares will be issued to Employee on or about the date or dates upon which they vest as indicated in the RSU Agreement. Notwithstanding the foregoing, as described in paragraph 9 of the Appendix to the RSU Agreement, the distribution of such shares may be delayed if the Company determines that Employee’s sale of the shares on such date would violate the Company’s policy regarding xxxxxxx xxxxxxx of the Company’s stock, as determined by the Company in accordance with such policy. | ||
| 2. | Employee may elect as the Deferred Distribution Date a termination of Employee’s service that qualifies as a “separation from service” for purposes of Section 409A of the Code. | ||
| 3. | As an alternative to 2 above, Employee may elect up to four different specified dates as Deferred Distribution Dates. However, if prior to such Deferred Distribution Date, there is a termination of Employee’s service with the Company that is a “separation from service” for purposes of Section 409A of the Code, Employee will receive all shares of vested Common Stock associated with the RSUs in accordance with Employee’s election under Deferral Alternative #1, notwithstanding any deferral election Employee makes on this Election Agreement under Alternative #2 to receive shares on a specified date. | ||
| 4. | If no Deferred Distribution Date is elected, then the issuance of vested Common Stock will occur upon or about the vesting date(s) as indicated in the RSU Agreement. | ||
| 5. | Notwithstanding anything to the contrary set forth herein, if at the time the shares of Common Stock would otherwise be issued to Employee as a result of termination of service, Employee is subject to the distribution limitations contained in Section 409A of the Code applicable to “specified employees,” share issuances resulting from a termination of service shall not be made before the date which is six (6) months following the date of termination of Employee’s service, or, if earlier, the date of Employee’s death that occurs within such six (6) month period. |
| 6. | Notwithstanding anything to the contrary that may be set forth in Section 4.6 of the Deferred Compensation Plan, and notwithstanding Employee’s deferral election pursuant to this Election Agreement, in the event that a successor corporation refuses to assume or substitute the RSUs in connection with a Change in Control (as defined in the 2003 Incentive Stock Plan), the shares subject to the RSUs shall instead be issued to Employee immediately prior to the Change in Control to the extent provided in paragraph 4 of the Appendix. |
III. Acknowledgement
Employee further acknowledges and agrees as follows:
| 1. | In order for the foregoing deferral election to become effective, this Election Agreement must be submitted by Employee to Xxxxx Xxx on or before thirty (30) days following the Effective Date of the RSUs. | ||
| 2. | The Company shall require that Employee make adequate provision for any federal, state, or local tax required by law to be withheld prior to the issuance of the shares of Common Stock. | ||
| 3. | Employee’s rights and interests under this Election Agreement may not be assigned, pledged, or transferred. | ||
| 4. | The Company reserves the right to terminate this Election Agreement at any time. In such case, any vested shares of Common Stock granted to Employee pursuant to the RSU Agreement may be issued to Employee immediately, to the extent permitted by Section 409A of the Code and the regulations and other guidance promulgated thereunder. | ||
| 5. | The Company will establish a bookkeeping account to reflect the number of shares of Common Stock that Employee may acquire pursuant to the RSUs and the fair market value of such shares of Common Stock that are subject to this Election Agreement. | ||
| 6. | This Election Agreement shall be construed and administered according to the internal laws of the State of California, without regard to its conflicts of laws principles. |
IV. Authorization and Signature
By completing and executing this Election Agreement, Employee authorizes the Company to defer or
not defer, as applicable, the issuance of the shares subject to the RSU award. Employee
acknowledges that the Company has not made any representations concerning future performance of the
Company’s Common Stock. Further, Employee has not relied upon advice from the Company in making
Employee’s election. Additionally, Employee acknowledges that the terms of the Deferred
Compensation Plan document, as reasonably interpreted by the Company, governs all aspects of this
election. By executing this Election Agreement, the Employee hereby acknowledges his or her
understanding of and agreement with all the terms and provisions set forth herein.
Exhibit C
Beneficiary Designation
Personal Information
Last
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First | Middle Initial | Social Security Number | |||
| I hereby designate the following Beneficiary(ies) to receive any benefit payable under the Plan by reason of my death, as provided in the Plan document. | ||||||
| Primary Beneficiary(ies) | ||||||
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Percentage | |||||
Relationship to Participant
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Social Security Number | |||||
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Percentage | |||||
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Social Security Number | |||||
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Percentage | |||||
Relationship to Participant
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Social Security Number | |||||
Beneficiary
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Percentage | |||||
Relationship to Participant
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Social Security Number | |||||
| Contingent Beneficiary(ies) | ||||||
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Social Security Number | |||||
Beneficiary
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Percentage | |||||
Relationship to Participant
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Social Security Number | |||||
| Please Sign Below | ||||||
If no percentage is indicated, all beneficiaries will be deemed to have an equal interest in
the benefits payable under the Plan.
