Incentive Stock Option Agreement Under The Visicu, Inc. Equity Incentive Plan
Exhibit
10.2
Under The
Visicu, Inc. Equity Incentive Plan
1. Terminology. Capitalized terms used in this Agreement are defined in the
correlating Stock Option Notice and/or the Glossary at the end of the Agreement.
2. Exercise of Options.
(a) Exercisability. The Options will become exercisable in accordance with the
Exercisability Schedule set forth in the Stock Option Notice, so long as you are in the Service of
the Company from the Grant Date through the applicable exercisability dates. None of the Options
will become exercisable after your Service with the Company ceases, unless the Stock Option Notice
provides otherwise with respect to exercisability that arises as a result of your cessation of
Service.
(b) Right to Exercise. You may exercise the Options, to the extent exercisable, at
any time on or before 5:00 p.m. Eastern Time on the Expiration Date or the earlier termination of
the Options, unless otherwise provided under applicable law. Section 3 below describes certain
limitations on exercise of the Options that apply in the event of your death, Total and Permanent
Disability, or termination of Service. The Options may be exercised only in multiples of whole
Shares and may not be exercised at any one time as to fewer than one hundred Shares (or such lesser
number of Shares as to which the Options are then exercisable). No fractional Shares will be
issued under the Options.
(c) Exercise Procedure. In order to exercise the Options, you must provide the
following items to the Secretary of the Company or his or her delegate before the expiration or
termination of the Options:
| (i) | notice, in such manner and form as the Administrator may require from time to time, specifying the number of Shares to be purchased under the Options; | ||
| (ii) | full payment of the Exercise Price for the Shares or properly executed, irrevocable instructions, in such manner and form as the Administrator may require from time to time, to effectuate a broker-assisted cashless exercise, each in accordance with Section 2(d) of this Agreement; and | ||
| (iii) | an executed copy of any other agreements requested by the Administrator. |
An exercise will not be effective until the Secretary of the Company or his or her delegate
receives all of the foregoing items.
(d) Method of Payment. You may pay the Exercise Price by:
| (i) | delivery of cash, certified or cashier’s check, money order or other cash equivalent acceptable to the Administrator in its discretion; | ||
| (ii) | a broker-assisted cashless exercise in accordance with Regulation T of the Board of Governors of the Federal Reserve System through a brokerage firm approved by the Administrator; |
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| (iii) | subject to such limits as the Administrator may impose from time to time, tender (via actual delivery or attestation) to the Company of other shares of Common Stock of the Company which have a Fair Market Value on the date of tender equal to the Exercise Price, provided that tender of such shares will not result in the Company having to record a charge to earnings under United States generally accepted accounting principles then applicable to the Company; | ||
| (iv) | any other method approved by the Administrator; or | ||
| (v) | any combination of the foregoing. |
(e) Issuance of Shares upon Exercise. As soon as practicable after exercise of the
Options, the Company will deliver a share certificate to you, or deliver Shares electronically or
in certificate form to your designated broker on your behalf, for the Shares issued upon exercise.
Any share certificates delivered will, unless the Shares are registered or an exemption from
registration is available under applicable federal and state law, bear a legend restricting
transferability of such Shares.
3. Termination of Service.
(a) Termination of Unexercisable Options. If your Service with the Company ceases for
any reason, the Options that are then unexercisable, after giving effect to any exercise
acceleration provisions set forth on the Stock Option Notice, will terminate immediately upon such
cessation.
(b) Exercise Period Following Termination of Service. If your Service with the
Company ceases for any reason, the Options that are then exercisable, after giving effect to any
exercise acceleration provisions set forth on the Stock Option Notice, will terminate upon the
earliest of:
(i) the expiration of 90 days following such cessation;
(ii) the expiration of 12 months following such cessation, if your Service
ceases on account of your Total and Permanent Disability or death; or
(iii) the expiration of 12 months following your death, if your death occurs
during the periods described in clause (i) of this Section 3(b), as applicable; or
(iv) the Expiration Date.
In the event of your death, the exercisable Options may be exercised by your executor, personal
representative, or the person(s) to whom the Options are transferred by will or the laws of descent
and distribution.
(c) Changes in Status. If you cease to be a “common law employee” of the Company but
you continue to provide bona fide services to the Company following such cessation in a different
capacity, including without limitation as a director, consultant or independent contractor, then a
termination of Service shall not be deemed to have occurred for purposes of this Section 3 upon
such change in capacity. Notwithstanding the foregoing, the Options shall not be treated as
incentive stock options within the meaning of Code section 422 with respect to any exercise that
occurs more than three months after such cessation of the common law employee relationship (except
as otherwise permitted under Code section 421 or 422). In the event that your Service is with a
business, trade or entity that, after the Grant Date,
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ceases for any reason to be part or an Affiliate of the Company, your Service will be deemed
to have terminated for purposes of this Section 3 upon such cessation if your Service does not
continue uninterrupted immediately thereafter with the Company or an Affiliate of the Company.
4. Market Stand-Off Agreement. You agree that following the effective date of a
registration statement of the Company filed under the Securities Act of 1933, you, for the duration
specified by and to the extent requested by the Company and an underwriter of Common Stock or other
securities of the Company, shall not offer, sell, contract to sell, pledge or otherwise dispose of,
directly or indirectly, any equity securities of the Company, or any securities convertible into or
exchangeable or exercisable for such securities, enter into a transaction which would have the same
effect, or enter into any swap, hedge or other arrangement that transfers, in whole or in part, any
of the economic consequences of ownership of such securities, whether any such aforementioned
transaction is to be settled by delivery of such securities or other securities, in cash or
otherwise, or publicly disclose the intention to make any such offer, sale, pledge or disposition,
or to enter into any such transaction, swap, hedge or other arrangement, in each case during the
seven days prior to and the 180 days after the effectiveness of any underwritten offering of the
Company’s equity securities (or such longer or shorter period as may be requested in writing by the
managing underwriter and agreed to in writing by the Company) (the “Market Stand-Off Period”),
except as part of such underwritten registration if otherwise permitted. In addition, you agree to
execute any further letters, agreements and/or other documents requested by the Company or its
underwriters that are consistent with the terms of this Section 4. The Company may impose
stop-transfer instructions with respect to securities subject to the foregoing restrictions until
the end of such Market Stand-Off Period.
5. Nontransferability of Options. These Options are nontransferable otherwise than by
will or the laws of descent and distribution and during your lifetime, the Options may be exercised
only by you or, during the period you are under a legal disability, by your guardian or legal
representative. Except as provided above, the Options may not be assigned, transferred, pledged,
hypothecated or disposed of in any way (whether by operation of law or otherwise) and shall not be
subject to execution, attachment or similar process.
6. Qualified Nature of the Options.
(a) General Status. The Options are intended to qualify as incentive stock option
within the meaning of Code section 422 (“Incentive Stock Option”), to the fullest extent permitted
by Code section 422, and this Agreement shall be so construed. The Company, however, does not
warrant any particular tax consequences of the Options. Code section 422 provides limitations, not
set forth in this Agreement, respecting the treatment of the Options as Incentive Stock Options.
You should consult with your personal tax advisors in this regard.
(b) Code Section 422(d) Limitation. Pursuant to Code section 422(d), the aggregate
fair market value (determined as of the Grant Date) of shares of Common Stock with respect to which
all Incentive Stock Options first become exercisable by you in any calendar year under the Plan or
any other plan of the Company (and its parent and subsidiary corporations, within the meaning of
Code section 424(e) and (f), as may exist from time to time) may not exceed $100,000 or such other
amount as may be permitted from time to time under Code section 422. To the extent that such
aggregate fair market value exceeds $100,000 or other applicable amount in any calendar year, such
stock options will be treated as nonstatutory stock options with respect to the amount of aggregate
fair market value thereof that exceeds the Code section 422(d) limit. For this purpose, the
Incentive Stock Options will be taken into account in the order in which they were granted. In
such case, the Company may designate the shares of Common Stock that are to be treated as stock
acquired pursuant to the exercise of Incentive Stock Options and the shares of Common Stock that
are to be treated as stock acquired pursuant to nonstatutory stock options by issuing separate
certificates for such shares and identifying the certificates as such in the stock transfer records
of the Company.
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(c) Significant Stockholders. Notwithstanding anything in this Agreement or the Stock
Option Notice to the contrary, if you own, directly or indirectly through attribution, stock
possessing more than 10% of the total combined voting power of all classes of stock of the Company
or of any of its subsidiaries (within the meaning of Code section 424(f)) on the Grant Date, then
the Exercise Price is the greater of (a) the Exercise Price stated on the Stock Option Notice or
(b) 110% of the Fair Market Value of the Common Stock on the Grant Date, and the Expiration Date is
the last business day prior to the fifth anniversary of the Grant Date.
7. Withholding of Taxes. At the time the Options are exercised, in whole or in part,
or at any time thereafter as requested by the Company, you hereby authorize withholding from
payroll or any other payment of any kind due to you and otherwise agree to make adequate provision
for foreign, federal, state and local taxes required by law to be withheld, if any, which arise in
connection with the Options (including upon a disqualifying disposition within the meaning of Code
section 421(b)). The Company may require you to make a cash payment to cover any withholding tax
obligation as a condition of exercise of the Options or issuance of share certificates representing
Shares.
The Administrator may, in its sole discretion, permit you to satisfy, in whole or in part, any
withholding tax obligation which may arise in connection with the Options either by electing to
have the Company withhold from the Shares to be issued upon exercise that number of Shares, or by
electing to deliver to the Company already-owned shares, in either case having a Fair Market Value
equal to the amount necessary to satisfy the statutory minimum withholding amount due.
8. Adjustments. The Administrator may make various adjustments to your Options,
including adjustments to the number and type of securities subject to the Options and the Exercise
Price, in accordance with the terms of the Plan. In the event of any transaction resulting in a
Change in Control (as defined in the Plan) of the Company, the outstanding Options will terminate
upon the effective time of such Change in Control unless provision is made in connection with the
transaction for the continuation or assumption of such Options by, or for the substitution of the
equivalent awards of, the surviving or successor entity or a parent thereof. In the event of such
termination, you will be permitted, immediately before the Change in Control, to exercise or
convert all portions of such Options that are then exercisable or which become exercisable upon or
prior to the effective time of the Change in Control.
9. Company’s Right of First Refusal. Before you or any transferee (either being
sometimes referred to herein as the “Holder”) shall sell or otherwise transfer the Shares
(including a transfer by gift or operation of law), the Company or its assignee(s) shall have a
right of first refusal to purchase the Shares on the terms and conditions set forth in this Section
(the “Right of First Refusal”).
(a) Notice of Proposed Transfer. The Holder of the Shares shall deliver to the
Company a written notice (the “Notice”) stating: (i) the Holder’s bona fide intention to sell or
otherwise transfer such Shares; (ii) the name of each proposed purchaser or other transferee
(“Proposed Transferee”); (iii) the number of Shares to be transferred to each Proposed Transferee;
and (iv) the bona fide cash price or other consideration for which the Holder proposes to transfer
the Shares (the “Offered Price”), and the Holder shall offer the Shares at the Offered Price to the
Company or its assignee(s).
(b) Exercise of Right of First Refusal. At any time within thirty (30) days after
receipt of the Notice, the Company and/or its assignee(s) may, by giving written notice to the
Holder, elect to purchase all, but not less than all, of the Shares proposed to be transferred to
any one or more of the Proposed Transferees, at the purchase price determined in accordance with
subsection (c) below.
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(c) Purchase Price. The purchase price (“Purchase Price”) for the Shares purchased by
the Company or its assignee(s) under this Section shall be the Offered Price. If the Offered Price
includes consideration other than cash, the cash equivalent value of the non-cash consideration
shall be determined by the Board of Directors of the Company in good faith.
(d) Payment. Payment of the Purchase Price shall be made, at the option of the
Company or its assignee(s), in cash (by check), by cancellation of all or a portion of any
outstanding indebtedness of the Holder to the Company (or, in the case of repurchase by an
assignee, to the assignee), or by any combination thereof within 30 days after receipt of the
Notice or in the manner and at the times set forth in the Notice.
(e) Holder’s Right to Transfer. If all of the Shares proposed in the Notice to be
transferred to a given Proposed Transferee are not purchased by the Company and/or its assignee(s)
as provided in this Section, then the Holder may sell or otherwise transfer such Shares to that
Proposed Transferee at the Offered Price or at a higher price, provided that such sale or other
transfer is consummated within 120 days after the date of the Notice, that any such sale or other
transfer is effected in accordance with any applicable securities laws and that the Proposed
Transferee agrees in writing that the provisions of this Section shall continue to apply to the
Shares in the hands of such Proposed Transferee. If the Shares described in the Notice are not
transferred to the Proposed Transferee within such period, a new Notice shall be given to the
Company, and the Company and/or its assignees shall again be offered the Right of First Refusal
before any Shares held by the Holder may be sold or otherwise transferred.
(f) Exception for Certain Family Transfers. Anything to the contrary contained in
this Section notwithstanding, the transfer of any or all of the Shares during the Optionee’s
lifetime or on the Optionee’s death by will or intestacy to the Optionee’s immediate family or a
trust for the benefit of the Optionee’s immediate family shall be exempt from the provisions of
this Section. “Immediate Family” as used herein shall mean spouse, lineal descendant or
antecedent, father, mother, brother or sister. In such case, the transferee or other recipient
shall receive and hold the Shares so transferred subject to the provisions of this Section, and
there shall be no further transfer of such Shares except in accordance with the terms of this
Section.
(g) Termination of Right of First Refusal. The Right of First Refusal shall terminate
as to any Shares upon the first sale of Common Stock of the Company to the general public pursuant
to a registration statement filed with and declared effective by the Securities and Exchange
Commission under the Securities Act of 1933, as amended.
10. Non-Guarantee of Employment or Service Relationship. Nothing in the Plan or this
Agreement will alter your at-will or other employment status or other service relationship with the
Company, nor be construed as a contract of employment or service relationship between you and the
Company, or as a contractual right for you to continue in the employ of, or in a service
relationship with, the Company for any period of time, or as a limitation of the right of the
Company to discharge you at any time with or without Cause or notice and whether or not such
discharge results in the failure of any of the Options to become exercisable or any other adverse
effect on your interests under the Plan.
11. No Rights as a Stockholder. You shall not have any of the rights of a stockholder
with respect to the Shares until such Shares have been issued to you upon the due exercise of the
Options. No adjustment will be made for dividends or distributions or other rights for which the
record date is prior to the date such Shares are issued.
12. The Company’s Rights. The existence of the Options shall not affect in any way
the right or power of the Company or its stockholders to make or authorize any or all adjustments,
recapitalizations, reorganizations or other changes in the Company’s capital structure or its
business, or any merger or consolidation of the Company, or any issue of bonds, debentures,
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preferred or other stocks with preference ahead of or convertible into, or otherwise affecting
the Common Stock or the rights thereof, or the dissolution or liquidation of the Company, or any
sale or transfer of all or any part of the Company’s assets or business, or any other corporate act
or proceeding, whether of a similar character or otherwise.
13. Entire Agreement. This Agreement, together with the correlating Stock Option
Notice and the Plan, contain the entire agreement between you and the Company with respect to the
Option. Any oral or written agreements, representations, warranties, written inducements, or other
communications made prior to the execution of this Agreement with respect to the Options shall be
void and ineffective for all purposes.
14. Amendment. This Agreement may be amended from time to time by the Administrator
in its discretion; provided, however, that this Agreement may not be modified in a
manner that would have a materially adverse effect on the Options or Shares as determined in the
discretion of the Administrator, except as provided in the Plan or in a written document signed by
you and the Company.
15. Conformity with Plan. This Agreement is intended to conform in all respects with,
and is subject to all applicable provisions of, the Plan. Any conflict between the terms of this
Agreement and the Plan shall be resolved in accordance with the terms of the Plan. In the event of
any ambiguity in this Agreement or any matters as to which this Agreement is silent, the Plan shall
govern. A copy of the Plan is provided to you with this Agreement.
16. Entire Agreement; Governing Law. The Plan and this Option Agreement constitute
the entire agreement of the parties with respect to the subject matter hereof and supersede in
their entirety all prior undertakings and agreements of the Company and Optionee with respect to
the subject matter hereof, and may not be modified adversely to the Optionee’s interest except by
means of a writing signed by the Company and Optionee. This agreement is governed by the internal
substantive laws but not the choice of law rules of Maryland.
{Glossary begins on next page}
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GLOSSARY
(a) “Affiliate” means any entity, whether now or hereafter existing, which controls, is
controlled by, or is under common control with, Visicu, Inc.. For this purpose, “control” means
ownership of 50% or more of the total combined voting power or value of all classes of stock or
interests of the entity.
(b) “Change in Control” has the meaning provided in the Plan.
(c) “Company” includes Visicu, Inc. and its Affiliates, except where the context otherwise
requires. For purposes of determining whether a Change in Control has occurred, Company shall mean
only Visicu, Inc..
(d) “Fair Market Value” the meaning provided in the Plan.
(e) “Service” means your employment or other service relationship with the Company.
(f) “Shares” mean the shares of Common Stock underlying the Options.
(g) “Stock Option Notice” means the written notice evidencing the award of the Options that
correlates with and makes up a part of this Agreement.
(h) “Total and Permanent Disability” means the inability to engage in any substantial gainful
activity by reason of any medically determinable physical or mental impairment which can be
expected to result in death or which has lasted or can be expected to last for a continuous period
of not less than twelve months. The Administrator may require such proof of Total and Permanent
Disability as the Administrator in its sole discretion deems appropriate and the Administrator’s
good faith determination as to whether you are totally and permanently disabled will be final and
binding on all parties concerned.
(i) “You”; “Your”. “You” or “your” means the recipient of the award of Options as reflected
on the Stock Option Notice. Whenever the Agreement refers to “you” under circumstances where the
provision should logically be construed, as determined by the Administrator, to apply to your
estate, personal representative, or beneficiary to whom the Options may be transferred by will or
by the laws of descent and distribution, the word “you” shall be deemed to include such person.
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EXERCISE FORM
Administrator of Visicu, Inc. Equity Incentive Plan
c/o Office of the Corporate Secretary
Visicu, Inc.
c/o Office of the Corporate Secretary
Visicu, Inc.
Gentlemen:
I hereby exercise the Options granted to me on ___, ___, by Visicu, Inc.
(the “Company”), subject to all the terms and provisions of the applicable grant agreement and of
the Visicu, Inc. Equity Incentive Plan (the “Plan”), and notify you of my desire to purchase
___shares of Common Stock of the Company at a price of
$______ per share pursuant to
the exercise of said Options.
This will confirm my understanding with respect to the shares to be issued to me by reason of
this exercise of the Options (the shares to be issued pursuant hereto shall be collectively
referred to hereinafter as the “Shares”) as follows:
(a) I am purchasing the Shares for my own account for investment only, and not with a view to,
or for sale in connection with, any distribution of the Shares in violation of the Securities Act
of 1933 (the “Securities Act”), or any rule or regulation under the Securities Act.
(b) I understand that the Shares are being issued without registration under the Securities
Act, in reliance upon one or more exemptions contained in the Securities Act, and such reliance is
based in part on the above representation. I also understand that the Company is not obligated to
comply with the registration requirements of the Securities Act or with the requirements for an
exemption under Regulation A under the Securities Act for my benefit.
(c) I have had such opportunity as I deemed adequate to obtain from representatives of the
Company such information as is necessary to permit me to evaluate the merits and risks of my
investment in the Company.
(d) I have sufficient experience in business, financial and investment matters to be able to
evaluate the risks involved in the purchase of the Shares and to make an informed investment
decision with respect to such purchase.
(e) I can afford a complete loss of the value of the Shares and am able to bear the economic
risk of holding such Shares for an indefinite period.
(f) I understand that (i) the Shares have not been registered under the Securities Act and are
“restricted securities” within the meaning of Rule 144 under the Securities Act; (ii) the Shares
cannot be sold, transferred or otherwise disposed of unless they are subsequently registered under
the Securities Act or an exemption from registration is then available and, therefore, they may
need to be held indefinitely; and (iii) there is now no registration statement on file with the
Securities and Exchange Commission with respect to any stock of the Company and the Company has no
obligation or current intention to register the Shares under the Securities Act. As a condition to
any transfer of the Shares, I understand that the Company may require an opinion of counsel
satisfactory to the Company to the effect that such transfer does not require registration under
the Securities Act or any state securities law.
(g) I understand that the certificates for the Shares to be issued to me will bear a legend
substantially as follows:
The shares of stock represented by this certificate are subject to restrictions on
transfer, an option to purchase and a market stand-off agreement set forth in a
certain Incentive Stock Option Agreement (the “Agreement”) between the corporation and
the registered owner of this certificate (or his predecessor in interest), and no
transfer of such shares may be made without compliance with that Agreement. A copy of
that Agreement is available for inspection at the office of the corporation upon
appropriate request and without charge.
The securities represented by this stock certificate have not been registered under
the Securities Act of 1933 (the “Act”) or applicable state securities laws (the “State
Acts”), and shall not be sold, pledged, hypothecated, donated, or otherwise
transferred (whether or not for consideration) by the holder except upon the issuance
to the corporation of a favorable opinion of its counsel and/or submission to the
corporation of such other evidence as may be satisfactory to counsel for the
corporation, to the effect that any such transfer shall not be in violation of the Act
and the State Acts.
The Company will issue appropriate stop transfer instructions to its transfer agent.
(h) I am a party to a grant agreement, pursuant to which I have agreed to certain restrictions
on the transferability of the Shares and other matters relating thereto.
Total Amount Enclosed: $
Date: |
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| (Optionee) | ||||||||||
| Received by VISICU, INC. on | ||||||||||
| By: | ||||||||||
If the Shareholder resides in community property states (currently AZ, CA, ID, LA, NV, NM, TX, WA,
WI), the Shareholder’s spouse must execute the following:
Spouse Consent
The undersigned spouse of the Optionee has read, understands, and hereby approves the purchase
of shares of Common Stock pursuant to Incentive Stock Option Grant Agreement Under the Visicu, Inc.
Equity Incentive Plan between the Shareholder and the Company (the “Agreement”). In consideration
of the Company’s granting my spouse the right to purchase the shares as set forth in the
Agreements, the undersigned hereby agrees to be irrevocably bound by the Agreement and further
agrees that any community property interest shall similarly be bound by the Agreement. The
undersigned hereby appoints the Optionee as my attorney-in-fact with respect to any amendment or
exercise of any rights under the Agreement.
Date:
| Signature of Shareholder’s Spouse |
Address: