| þ | Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
| o | Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
|
Delaware
(State or other jurisdiction of incorporation or organization) |
68-0328265
(I.R.S. Employer Identification Number) |
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
(Unaudited)
Table of Contents
(Unaudited)
Three Months Ended
Nine Months Ended
September 30,
September 30,
2006
2005
2006
2005
$
3,748
$
2,135
$
9,869
$
4,983
53
66
160
194
3,801
2,201
10,029
5,177
1,532
866
4,449
2,093
2,269
1,335
5,580
3,084
1,628
1,513
5,145
4,346
4,023
2,588
9,773
5,680
1,167
1,114
4,093
3,344
6,818
5,215
19,011
13,370
(4,549
)
(3,880
)
(13,431
)
(10,286
)
352
208
719
420
5
5
20
—
357
213
739
420
$
(4,192
)
$
(3,667
)
$
(12,692
)
$
(9,866
)
$
(0.10
)
$
(0.10
)
$
(0.32
)
$
(0.30
)
42,626
35,813
39,124
33,223
Table of Contents
Nine Months Ended
September 30,
2006
2005
$
(12,692
)
$
(9,866
)
1,708
1,225
1,076
67
(1,381
)
(956
)
153
(3,347
)
(27
)
(145
)
(1,434
)
1,249
(12,597
)
(11,773
)
(11,159
)
(10,733
)
10,441
15,714
(809
)
(2,989
)
—
(500
)
(1,527
)
1,492
18,753
15,497
319
164
934
95
20,006
15,756
3
(116
)
5,885
5,359
8,191
4,831
$
14,076
$
10,190
Table of Contents
(IN THOUSANDS, EXCEPT PER SHARE, PER UNIT AND NUMBER OF YEARS)
(Unaudited)
Table of Contents
(IN THOUSANDS, EXCEPT PER SHARE, PER UNIT, AND NUMBER OF YEARS)
(Continued)
(Unaudited)
Table of Contents
(IN THOUSANDS, EXCEPT PER SHARE, PER UNIT, AND NUMBER OF YEARS)
(Continued)
(Unaudited)
Nine Months Ended
September 30,
2006
5.5
68.8%-77.3
%
4.6%-5.0
%
0.0
%
1)
Estimated based on historical experience.
2)
Volatility based on historical experience over a period equivalent to the expected life
in years.
3)
Based on the US Treasury constant maturity interest rate with a term consistent with
the expected life of the options granted.
4)
The Company does not pay dividends on its common stock and the Company currently does
not have any plans to pay or declare any cash dividends.
Weighted
Weighted
Average
Average
Exercise
Remaining
Aggregate
Price per
Contractual
Intrinsic
Shares
Share
Life (Years)
Value
2,678
$
4.53
1,126
3.75
(316
)
2.95
(166
)
4.74
(6
)
2.50
3,316
$
4.41
7.73
$
1,154
1,470
$
4.48
5.99
$
650
2,866
$
4.44
7.49
$
1,015
Table of Contents
(IN THOUSANDS, EXCEPT PER SHARE, PER UNIT, AND NUMBER OF YEARS)
(Continued)
(Unaudited)
Three Months
Nine Months
Ended
Ended
September 30,
September 30,
2006
2006
$
123
$
485
124
304
92
255
4
35
$
343
$
1,079
Table of Contents
(IN THOUSANDS, EXCEPT PER SHARE, PER UNIT, AND NUMBER OF YEARS)
(Continued)
(Unaudited)
Three Months
Ended
September 30,
2005
$
(3,667
)
(648
)
$
(4,315
)
$
(0.10
)
$
(0.12
)
Nine Months
Ended
September 30,
2005
$
(9,866
)
(1,514
)
$
(11,380
)
$
(0.30
)
$
(0.34
)
Table of Contents
(IN THOUSANDS, EXCEPT PER SHARE, PER UNIT, AND NUMBER OF YEARS)
(Continued)
(Unaudited)
Table of Contents
(IN THOUSANDS, EXCEPT PER SHARE, PER UNIT, AND NUMBER OF YEARS)
(Continued)
(Unaudited)
September 30, 2006
December 31, 2005
Gross
Gross
Unrealized
Unrealized
Holding
Fair
Holding
Fair
Cost
Gain
Value
Cost
Loss
Value
$
0
$
0
$
0
$
5,573
$
(14
)
$
5,559
9,699
1
9,700
3,406
(6
)
3,400
$
9,699
$
1
$
9,700
$
8,979
$
(20
)
$
8,959
Table of Contents
(IN THOUSANDS, EXCEPT PER SHARE, PER UNIT, AND NUMBER OF YEARS)
(Continued)
(Unaudited)
September 30,
December 31,
2006
2005
$
1,421
$
3,885
2,896
1,361
3,014
2,126
$
7,331
$
7,372
Table of Contents
(IN THOUSANDS, EXCEPT PER SHARE, PER UNIT, AND NUMBER OF YEARS)
(Continued)
(Unaudited)
Three Months
Nine Months
Ended September 30,
Ended September 30,
2006
2005
2006
2005
$
3,376
$
1,581
$
8,269
$
3,099
258
538
1,136
1,807
114
16
464
77
$
3,748
$
2,135
$
9,869
$
4,983
Three Months
Nine Months
Ended September 30,
Ended September 30,
2006
2005
2006
2005
$
(4,192
)
$
(3,667
)
$
(12,692
)
$
(9,866
)
9
(6
)
23
14
(9
)
(79
)
3
(116
)
$
(4,192
)
$
(3,752
)
$
(12,666
)
$
(9,968
)
Table of Contents
(IN THOUSANDS, EXCEPT PER SHARE, PER UNIT, AND NUMBER OF YEARS)
(Continued)
(Unaudited)
September 30, 2006
December 31, 2005
$
14,050
$
14,050
(6,088
)
(5,034
)
7,962
9,016
2,708
2,708
$
10,670
$
11,724
$
4,631
$
4,631
$
351
$
1,405
$
1,405
$
1,405
$
1,405
$
1,405
Table of Contents
(IN THOUSANDS, EXCEPT PER SHARE, PER UNIT, AND NUMBER OF YEARS)
(Continued)
(Unaudited)
Table of Contents
(IN THOUSANDS, EXCEPT PER SHARE, PER UNIT AND NUMBER OF YEARS)
(Unaudited)
Table of Contents
Item 2.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
Table of Contents
Item 2.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Continued).
Table of Contents
Item 2.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Continued).
Table of Contents
Item 2.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Continued).
Table of Contents
Item 2.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Continued).
Table of Contents
Item 2.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Continued).
•
continued market acceptance of the Powerlink System;
•
our ability to successfully expand our commercial launch of the Powerlink System;
•
the development of sales and marketing resources;
•
the success of our research and development programs for future products;
•
the clinical trial and regulatory approval processes for future products;
•
the costs involved in intellectual property rights enforcement or litigation;
•
the level of hospital reimbursement for ELG procedures and other competitive
factors;
•
viability of our sole manufacturing facility through unforeseen natural or other
disasters;
•
reliance on a sole-source supplier for a key raw material; and
•
the establishment of collaborative relationships with other parties.
Table of Contents
Item 2.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Continued).
Table of Contents
Table of Contents
26
Form of Stock Option Agreement under the 2006 Stock Incentive Plan.
Form of Restricted Stock Award Agreement under the 2006 Stock Incentive Plan.
Second Amendment to Supply Agreement, dated September 8, 2006, between Endologix, Inc. and Bard
Peripheral Vascular, Inc.
Certification of Chief Executive Officer Pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange
Act of 1934.
Certification of Chief Financial Officer Pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange
Act of 1934.
Certification of Chief Executive Officer Pursuant to Rule 13a-14(b)/15d-14(b) of the Securities Exchange
Act of 1934 and 18 U.S.C. Section 1350.
Certification of Chief Financial Officer Pursuant to Rule 13a-14(b)/15d-14(b) of the Securities Exchange
Act of 1934 and 18 U.S.C. Section 1350.
Table of Contents
27
ENDOLOGIX, INC.
/s/ Paul McCormick
(Principal Executive Officer)
/s/ Robert J. Krist
(Principal Financial and Accounting Officer)
Table of Contents
28
Form of Stock Option Agreement under the 2006 Stock Incentive Plan.
Form of Restricted Stock Award Agreement under the 2006 Stock Incentive Plan.
Second Amendment to Supply Agreement, dated September 8, 2006, between Endologix, Inc. and Bard
Peripheral Vascular, Inc.
Certification of Chief Executive Officer Pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange
Act of 1934.
Certification of Chief Financial Officer Pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange
Act of 1934.
Certification of Chief Executive Officer Pursuant to Rule 13a-14(b)/15d-14(b) of the Securities Exchange
Act of 1934 and 18 U.S.C. Section 1350.
Certification of Chief Financial Officer Pursuant to Rule 13a-14(b)/15d-14(b) of the Securities Exchange
Act of 1934 and 18 U.S.C. Section 1350.
EXHIBIT 10.1
Option Number: _______________
Optionee ID Number: __________
ENDOLOGIX, INC.
STOCK OPTION AGREEMENT
UNDER
2006 STOCK INCENTIVE PLAN
TYPE OF OPTION (CHECK ONE): [ ] INCENTIVE [ ] NONQUALIFIED
This STOCK OPTION AGREEMENT (the "Agreement") is entered into as of __________, 200_, by and between Endologix, Inc., a Delaware corporation ("Company"), and _______________ ("Optionee") pursuant to the Company's 2006 Stock Incentive Plan (the "Plan"). Any capitalized term not defined herein shall have the meaning ascribed to it in the Plan.
RECITALS:
Optionee is an employee or director of the Company, and in connection therewith has rendered services for and on behalf of the Company or any Affiliated Company.
The Company desires to issue Optionee options to purchase shares of the Common Stock of the Company for the consideration set forth herein to provide an incentive for Optionee to remain in the service of the Company and to exert added effort towards its growth and success.
NOW, THEREFORE, in consideration of the mutual covenants hereinafter set forth, and for other good and valuable consideration, the parties agree as follows:
1. GRANT OF OPTION. The Company hereby grants to Optionee an option ("Option") to purchase all or any portion of a total of _________________ (__________) shares ("Shares") of the Common Stock of the Company at a purchase price of ($_____) per share ("Exercise Price"), subject to the terms and conditions set forth herein and the provisions of the Plan. If the box marked "Incentive" above is checked, then this Option is intended to qualify as an "incentive stock option" as defined in Section 422 of the Internal Revenue Code of l986, as amended (the "Code"). If this Option fails in whole or in part to qualify as an incentive stock option, or if the box marked "Nonqualified" is checked, then this Option shall to that extent constitute a nonqualified stock option.
2. VESTING OF OPTION. The right to exercise this Option shall vest in installments, and this Option shall be exercisable from time to time in whole or in part as to any vested installment, in accordance with the vesting schedule as provided in the Notice of Grant.
No additional Shares shall vest after, and the portion of the Option related to such additional shares shall terminate upon, the date of termination of Optionee's "Continuous Service" (as defined in Section 3 below), but this Option shall continue to be exercisable in accordance with Section 3 hereof with respect to that number of shares that have vested as of the date of termination of Optionee's Continuous Service.
3. TERM OF OPTION. Optionee's right to exercise this Option shall terminate upon the first to occur of the following:
(a) the expiration of ten (10) years from the date of this Agreement;
(b) the expiration of ninety (90) days from the date of termination of Optionee's Continuous Service if such termination occurs for any reason other than permanent disability or death; provided, however, that if Optionee dies during such ninety-day period the provisions of Section 3(d) below shall apply;
(c) the expiration of one year from the date of termination of Optionee's Continuous Service if such termination is due to permanent disability (as defined in Section 22(e)(3) of Code) of the Optionee;
(d) the expiration of one year from the date of termination of Optionee's Continuous Service if such termination is due to Optionee's death or if death occurs during the ninety (90) day period following termination of Optionee's Continuous Service pursuant to Section 3(b) above, as the case may be; or
(e) upon the consummation of a Change in Control, unless otherwise provided pursuant to Section 9 below.
As used herein, the term "Continuous Service" means (i) employment by either the Company or any parent or subsidiary corporation of the Company, or by any successor entity following a Change in Control, which is uninterrupted except for paid vacations or sick days in accordance with Company policy, as applicable, or (ii) service as a member of the Board of Directors of the Company until Optionee resigns, is removed from office, or Optionee's term of office expires and he or she is not reelected. The Optionee's Continuous Service shall not terminate merely because of a change in the capacity in which the Optionee renders service to the Company or a corporation or subsidiary corporation described in clause (i) above. For example, a change in the Optionee's status from an employee to a Non-Employee Director will not constitute an interruption of the Optionee's Continuous Service, provided there is no interruption in the Optionee's performance of such services.
4. EXERCISE OF OPTION. On or after the vesting of any portion of this Option in accordance with Sections 2 or 9 hereof, and until termination of the right to exercise this Option in accordance with Section 3 above, the portion of this Option which has vested may be exercised in whole or in part by the Optionee (or, after his or her death, by the person designated in Section 5 below) upon delivery of the following to the Company at its principal executive offices:
(a) a written notice of exercise which identifies this Agreement and states the number of Shares then being purchased (but no fractional Shares may be purchased) unless the Company has established other procedures;
(b) a check or cash in the amount of the Exercise Price (or payment of the Exercise Price in such other form of lawful consideration as the Administrator may approve from time to time under the provisions of Section 5.3 of the Plan);
(c) a check or cash in the amount reasonably requested by the Company to satisfy the Company's withholding obligations under federal, state or other applicable tax laws with respect to the taxable income, if any, recognized by the Optionee in connection with the exercise of this Option (unless the Company and Optionee shall have made other arrangements for deductions or withholding from Optionee's wages, bonus or other compensation payable to Optionee, or, if permitted by the Administrator in its discretion, by the withholding of Shares issuable upon exercise of this Option or the delivery of Shares owned by the Optionee, provided such arrangements satisfy the requirements of applicable tax laws); and
(d) a letter, if requested by the Company, in such form and substance as the Company may require, setting forth the investment intent of the Optionee, or person designated in Section 5 below, as the case may be.
5. DEATH OF OPTIONEE; NO ASSIGNMENT. The rights of the Optionee under this Agreement may not be assigned or transferred except by will or by the laws of descent and distribution, and may be exercised during the lifetime of the Optionee only by the Optionee. Any attempt to sell, pledge, assign, hypothecate, transfer or dispose of this Option in contravention of this Agreement or the Plan shall be void and shall have no effect. If the Optionee's Continuous Service terminates as a result of his or her death, and provided Optionee's rights hereunder shall have vested pursuant to Section 2 hereof, Optionee's legal representative, his or her legatee, or the person who acquired the right to exercise this Option by reason of the death of the Optionee (individually, a "Successor") shall succeed to the Optionee's rights and obligations under this Agreement. After the death of the Optionee, only a Successor may exercise this Option.
6. REPRESENTATIONS AND WARRANTIES OF OPTIONEE. Optionee acknowledges receipt of a copy of the Plan and understands that all rights and obligations connected with this Option are set forth in this Agreement and in the Plan.
7. LIMITATION ON COMPANY'S LIABILITY FOR NONISSUANCE. The Company agrees to use its reasonable best efforts to obtain from any applicable regulatory agency such authority or approval as may be required in order to issue and sell the Shares to the Optionee pursuant to this Option. Inability of the Company to obtain, from any such regulatory agency, authority or approval deemed by the Company's counsel to be necessary for the lawful issuance and sale of the Shares hereunder and under the Plan shall relieve the Company of any liability in respect of the nonissuance or sale of such Shares as to which such requisite authority or approval shall not have been obtained.
8. ADJUSTMENTS UPON CHANGES IN CAPITAL STRUCTURE. In the event that the outstanding shares of Common Stock of the Company are hereafter increased or decreased or changed into or exchanged for a different number or kind of shares or other securities of the Company by reason of a recapitalization, stock split, combination of shares, reclassification, stock dividend or other change in the capital structure of the Company, then appropriate adjustment shall be made by the Administrator to the number of Shares subject to the unexercised portion of this Option and to the Exercise Price per share, in order to preserve, as nearly as practical, but not to increase, the benefits of the Optionee under this Option, in accordance with the provisions of Section 4.2 of the Plan.
9. CHANGE IN CONTROL. In the event of a Change in Control (as defined in
Section 2.6 of the Plan) of the Company:
(a) The right to exercise this Option shall accelerate automatically and vest in full (notwithstanding the provisions of Section 2 above) effective as of immediately prior to the consummation of the Change in Control unless this Option is to be assumed by the acquiring or successor entity (or parent thereof) or a new option or New Incentives are to be issued in exchange therefor, as provided in subsection (b) below. If vesting of this Option will accelerate pursuant to the preceding sentence, the Administrator in its discretion may provide, in connection with the Change in Control transaction, for the purchase or exchange of this Option for an amount of cash or other property having a value equal to the difference (or "spread") between: (x) the value of the cash or other property that the Optionee would have received pursuant to the Change in Control transaction in exchange for the Shares issuable upon exercise of this Option had this Option been exercised immediately prior to the Change in Control, and (y) the aggregate Exercise Price for such Shares. If the vesting of this Option will accelerate pursuant to this subsection (a), then the Administrator shall cause written notice of the Change in Control transaction to be given to the Optionee not less than fifteen (15) days prior to the anticipated effective date of the proposed transaction.
(b) Notwithstanding the foregoing, the vesting of this Option shall
not accelerate if and to the extent that: (i) this Option (including the
unvested portion thereof) is to be assumed by the acquiring or successor entity
(or parent thereof) or a new option of comparable value is to be issued in
exchange therefor pursuant to the terms of the Change in Control transaction, or
(ii) this Option (including the unvested portion thereof) is to be replaced by
the acquiring or successor entity (or parent thereof) with other incentives of
comparable value under a new incentive program ("New Incentives") containing
such terms and provisions as the Administrator in its discretion may consider
equitable. If this Option is assumed, or if a new option of comparable value is
issued in exchange therefor, then this Option or the new option shall be
appropriately adjusted, concurrently with the Change in Control, to apply to the
number and class of securities or other property that the Optionee would have
received pursuant to the Change in Control transaction in exchange for the
Shares issuable upon exercise of this Option had this Option been exercised
immediately prior to the Change in Control, and appropriate adjustment also
shall be made to the Exercise Price such that the aggregate Exercise Price of
this Option or the new option shall remain the same as nearly as practicable.
(c) If the provisions of subsection (b) above apply, then this Option,
the new option or the New Incentives shall continue to vest in accordance with
the provisions of Section 2 hereof and shall continue in effect for the
remainder of the term of this Option in accordance with the provisions of
Section 3 hereof. However, in the event of an Involuntary Termination (as
defined below) of Optionee's Continuous Service within twelve (12) months
following such Change in Control, then vesting of this Option, the new option or
the New Incentives shall accelerate in full automatically effective upon such
Involuntary Termination.
For purposes of this Section 9, the following terms shall have the meanings set forth below:
(i) "Cause" shall mean (A) the commission of any act of fraud, embezzlement or dishonesty by Optionee which materially and adversely affects the business of the Company, the acquiring or successor entity (or parent or any subsidiary thereof), (B) any unauthorized use or disclosure by Optionee of confidential information or trade secrets of the
Company, the acquiring or successor entity (or parent or any subsidiary thereof), (C) the continued refusal or omission by the Optionee to perform any material duties required of him if such duties are consistent with duties customary for the position held with the Company, the acquiring or successor entity (or parent or any subsidiary thereof), (D) any material act or omission by the Optionee involving malfeasance or gross negligence in the performance of Optionee's duties to, or material deviation from any of the policies or directives of, the Company or the acquiring or successor entity (or parent or any subsidiary thereof), (E) conduct on the part of Optionee which constitutes the breach of any statutory or common law duty of loyalty to the Company, the acquiring or successor entity (or parent or any subsidiary thereof), or (F) any illegal act by Optionee which materially and adversely affects the business of the Company, the acquiring or successor entity (or parent or any subsidiary thereof), or any felony committed by Optionee, as evidenced by conviction thereof. The provisions of this Section shall not limit the grounds for the dismissal or discharge of Optionee or any other individual in the service of the Company, the acquiring or successor entity (or parent or any subsidiary thereof).
(ii) "Involuntary Termination" shall mean the termination of Optionee's Continuous Service by reason of:
(A) Optionee's involuntary dismissal or discharge by the Company, or by the acquiring or successor entity (or parent or any subsidiary thereof employing the Optionee) for reasons other than Cause (as defined above), or
(B) Optionee's voluntary resignation within thirty (30) days following (x) a change in Optionee's position with the Company, the acquiring or successor entity (or parent or any subsidiary thereof) which materially reduces Optionee's duties and responsibilities or the level of management to which Optionee reports, (y) a reduction in Optionee's level of compensation (including base salary, fringe benefits and target bonus under any performance based bonus or incentive programs) by more than ten percent (10%), or (z) a relocation of Optionee's principal place of employment by more than thirty (30) miles, provided and only if such change, reduction or relocation is effected without Optionee's written consent.
In the event that the Optionee is a party to an employment agreement or other similar agreement with the Company or any Affiliated Company that defines a termination on account of "Cause" or "Involuntary Termination" (or terms having similar meanings), such definitions shall apply as the definitions of a termination on account of "Cause" or pursuant to an "Involuntary Termination" for purposes hereof, but only to the extent that such definition provides the Optionee with greater rights.
10. NO EMPLOYMENT CONTRACT CREATED. Neither the granting of this Option nor the exercise hereof shall be construed as granting to the Optionee any right with respect to continuance of employment by, or other service provider relationship with, the Company or any of its subsidiaries. The right of the Company or any of its subsidiaries to terminate at will the Optionee's employment at any time (whether by dismissal, discharge or otherwise), with or without cause, is specifically reserved.
11. RIGHTS AS STOCKHOLDER. The Optionee (or transferee of this option by will or by the laws of descent and distribution) shall have no rights as a stockholder with respect to any Shares
covered by this Option until the date of the issuance of a stock certificate or certificates to him or her for such Shares, notwithstanding the exercise of this Option.
12. "MARKET STAND-OFF" AGREEMENT. Optionee agrees that, if requested by the Company or the managing underwriter of any proposed public offering of the Company's securities (including any acquisition transaction where Company securities will be used as all or part of the purchase price), Optionee will not sell or otherwise transfer or dispose of any Shares held by Optionee without the prior written consent of the Company or such underwriter, as the case may be, during such period of time, not to exceed 180 days following the effective date of the registration statement filed by the Company with respect to such offering, as the Company or the underwriter may specify.
13. INTERPRETATION. This Option is granted pursuant to the terms of the Plan, and shall in all respects be interpreted in accordance therewith. The Administrator shall interpret and construe this Option and the Plan, and any action, decision, interpretation or determination made in good faith by the Administrator shall be final and binding on the Company and the Optionee. As used in this Agreement, the term "Administrator" shall refer to the committee of the Board of Directors of the Company appointed to administer the Plan, and if no such committee has been appointed, the term Administrator shall mean the Board of Directors.
14. NOTICES. All notices, requests, demands and other communications required or permitted under this Agreement shall be in writing and shall be deemed to have been duly given and effective (i) when delivered by hand, (ii) when otherwise delivered against receipt therefor, or (iii) three (3) business days after being mailed if sent by registered or certified mail, postage prepaid, return receipt requested. Any notice shall be addressed to the parties as follows or at such other address as a party may designate by notice given to the other party in the manner set forth herein:
(a) if to the Company:
Endologix, Inc.
11 Studebaker
Irvine, CA 92618
Attention: Chief Financial Officer
(b) if to the Optionee, at the address shown on the signature page of this Agreement or at his most recent address as shown in the employment or stock records of the Company.
15. APPLICABLE LAW. This Agreement shall be construed in accordance with the laws of the State of California without reference to choice of law principles, as to all matters, including, but not limited to, matters of validity, construction, effect or performance.
16. SEVERABILITY. Should any provision or portion of this Agreement be held to be unenforceable or invalid for any reason, the remaining provisions and portions of this Agreement shall be unaffected by such holding.
17. COUNTERPARTS. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original and all of which together shall be deemed one instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written.
THE COMPANY: OPTIONEE:
ENDOLOGIX, INC.
By:
--------------------------------- ----------------------------------------
Name:
------------------------------- ----------------------------------------
Title: [Print Name]
------------------------------
Address:
----------------------------------------
----------------------------------------
|
EXHIBIT 10.2
Restricted Stock Award Number: _______________
Purchase ID Number: ________________
ENDOLOGIX, INC.
RESTRICTED STOCK AWARD AGREEMENT
UNDER
2006 STOCK INCENTIVE PLAN
THIS RESTRICTED STOCK AWARD AGREEMENT (the "Agreement") is entered into as of __________, 200_ by and between __________ (hereinafter referred to as "Purchaser") and Endologix, Inc., a Delaware corporation (hereinafter referred to as the "Company"), pursuant to the Company's 2006 Stock Incentive Plan (the "Plan"). Any capitalized term not defined herein shall have the same meaning ascribed to it in the Plan.
RECITALS:
A. Purchaser is an employee or director of the Company, and in connection therewith has rendered services for and on behalf of the Company or any Affiliated Company.
B. The Company desires to issue shares of the Company's Common Stock to Purchaser for the consideration set forth herein to provide an incentive for Purchaser to remain in the service of the Company and to exert added effort towards its growth and success.
NOW, THEREFORE, in consideration of the mutual covenants hereinafter set forth, and for other good and valuable consideration, the parties agree as follows:
1. ISSUANCE OF SHARES. The Company hereby offers to issue to Purchaser an aggregate of __________ (__________) shares of Common Stock of the Company (the "Shares") on the terms and conditions herein set forth. Unless this offer is earlier revoked in writing by the Company, Purchaser shall have ten (10) days from the date of the delivery of this Agreement to Purchaser to accept the offer of the Company by executing and delivering to the Company two (2) copies of this Agreement, without condition or reservation of any kind whatsoever, together with the consideration to be delivered by Purchaser pursuant to Section 2 below, if applicable.
2. CONSIDERATION. The purchase price for the Shares shall be __________ ($_____) per share, or a total of _____________ ($__________).
3. VESTING OF SHARES.
(A) Subject to Section 3(b) below, the Shares acquired hereunder shall vest and become "Vested Shares" as follows:
[INSERT VESTING SCHEDULE, EITHER TIME-BASED OR PERFORMANCE-BASED]
No additional shares shall vest after the date of termination of Purchaser's Continuous Service.
As used herein, the term "Continuous Service" means (i) employment by either the Company or any parent or subsidiary corporation of the Company, or by any successor entity following a Change in Control, which is uninterrupted except for paid vacations or sick days in accordance with
Company policy, as applicable, or (ii) service as a member of the Board of Directors of the Company until Purchaser resigns, is removed from office, or Purchaser's term of office expires and he or she is not reelected. The Purchaser's Continuous Service shall not terminate merely because of a change in the capacity in which the Purchaser renders service to the Company or a corporation or subsidiary corporation described in clause (i) above. For example, a change in the Purchaser's status from an employee to a Non-Employee Director will not constitute an interruption of the Purchaser's Continuous Service, provided there is no interruption in the Purchaser's performance of such services.
(B) Notwithstanding Section 3(a) above, if Purchaser holds Shares at the time a Change in Control occurs, the acquiring or successor entity (or parent thereof) does not agree to provide for the continuance or assumption of this Agreement or the substitution for this Agreement of a new agreement of comparable value covering shares of a successor corporation (with appropriate adjustments as to the number and kind of shares and the purchase price), then all "Repurchase Rights" (as defined in Section 4 below) shall automatically terminate immediately prior to the consummation of such Change in Control and the Shares subject to those terminated Repurchase Rights shall immediately vest in full. Notwithstanding the foregoing sentence, if pursuant to a Change in Control the acquiring or successor entity (or parent thereof) provides for the continuance or assumption of this Agreement or the substitution for this Agreement of a new agreement of comparable value covering shares of a successor corporation (with appropriate adjustments as to the number and kind of shares and the purchase price), then the Repurchase Rights shall not terminate and vesting of the Shares shall not accelerate in connection with such Change in Control to the extent this Agreement is continued, assumed or substituted for; provided, however, if Purchaser's Continuous Service is terminated without Cause or pursuant to an Involuntary Termination (as defined below) within twelve (12) months following such Change in Control, all Repurchase Rights shall terminate and vesting of the Shares or any substituted shares shall accelerate in full automatically effective upon such termination. For purposes of this Section 3, the following terms shall have the meanings set forth below:
(I) "Cause" shall mean (A) the commission of any act of fraud, embezzlement or dishonesty by Purchaser which materially and adversely affects the business of the Company, the acquiring or successor entity (or parent or any subsidiary thereof), (B) any unauthorized use or disclosure by Purchaser of confidential information or trade secrets of the Company, the acquiring or successor entity (or parent or any subsidiary thereof), (C) the continued refusal or omission by the Purchaser to perform any material duties required of him if such duties are consistent with duties customary for the position held with the Company, the acquiring or successor entity (or parent or any subsidiary thereof), (D) any material act or omission by the Purchaser involving malfeasance or gross negligence in the performance of Purchaser's duties to, or material deviation from any of the policies or directives of, the Company or the acquiring or successor entity (or parent or any subsidiary thereof), (E) conduct on the part of Purchaser which constitutes the breach of any statutory or common law duty of loyalty to the Company, the acquiring or successor entity (or parent or any subsidiary thereof), or (F) any illegal act by Purchaser which materially and adversely affects the business of the Company, the acquiring or successor entity (or parent or any subsidiary thereof), or any felony committed by Purchaser, as evidenced by conviction thereof. The provisions of this Section shall not limit the grounds for the dismissal or discharge of Purchaser or any other individual in the service of the Company, the acquiring or successor entity (or parent or any subsidiary thereof).
(II) "Involuntary Termination" shall mean the termination of Purchaser's Continuous Service by reason of:
(A) Purchaser's involuntary dismissal or discharge by the Company, or by the acquiring or successor entity (or parent or any subsidiary thereof employing the Purchaser) for reasons other than Cause (as defined above), or
(B) Purchaser's voluntary resignation within thirty
(30) days following (x) a change in Purchaser's position with the Company, the
acquiring or successor entity (or parent or any subsidiary thereof) which
materially reduces Purchaser's duties and responsibilities or the level of
management to which Purchaser reports, (y) a reduction in Purchaser's level of
compensation (including base salary, fringe benefits and target bonus under any
performance based bonus or incentive programs) by more than ten percent (10%),
or (z) a relocation of Purchaser's principal place of employment by more than
thirty (30) miles, provided and only if such change, reduction or relocation is
effected without Purchaser's written consent.
In the event that the Purchaser is a party to an employment agreement or other similar agreement with the Company or any Affiliated Company that defines a termination on account of "Cause" or "Involuntary Termination" (or terms having similar meanings), such definitions shall apply as the definitions of a termination on account of "Cause" or pursuant to an "Involuntary Termination" for purposes hereof, but only to the extent that such definition provides the Purchaser with greater rights.
4. RECONVEYANCE UPON TERMINATION OF SERVICE.
(A) REPURCHASE RIGHT. The Company shall have the right (but not the obligation) to repurchase all or any part of the Unvested Shares (the "Repurchase Right") in the event that the Purchaser's Continuous Service terminates for any reason. Upon exercise of the Repurchase Right, the Purchaser shall be obligated to sell his or her Unvested Shares to the Company, as provided in this Section 4. If the Purchase Price paid for the Shares is zero, then upon termination of Continuous Service Purchaser shall be obligated to transfer his or her Unvested Shares to the Company without consideration.
(B) CONSIDERATION FOR REPURCHASE RIGHT. The repurchase price of the Unvested Shares (the "Repurchase Price") shall be equal to the Purchase Price, if any, of such Unvested Shares.
(C) PROCEDURE FOR EXERCISE OF RECONVEYANCE OPTION. For sixty (60) days after the Termination Date or other event described in this Section 4, the Company may exercise the Repurchase Right by giving Purchaser and/or any other person obligated to sell written notice of the number of Unvested Shares which the Company desires to purchase. The Repurchase Price for the Unvested Shares shall be payable, at the option of the Company, by check or by cancellation of all or a portion of any outstanding indebtedness of Purchaser to the Company, or by any combination thereof.
(D) NOTIFICATION AND SETTLEMENT. In the event that the Company has elected to exercise the Repurchase Right as to part or all of the Unvested Shares within the period described above, Purchaser or such other person shall deliver to the Company certificate(s) representing the Unvested Shares to be acquired by the Company within thirty (30) days following
the date of the notice from the Company. The Company shall deliver to Purchaser against delivery of the Unvested Shares, checks of the Company payable to Purchaser and/or any other person obligated to transfer the Unvested Shares in the aggregate amount of the Repurchase Price, if any, to be paid as set forth in paragraph 4(b) above.
(E) DEPOSIT OF UNVESTED SHARES. Purchaser shall deposit with the Company certificates representing the Unvested Shares, together with a duly executed stock assignment separate from certificate in blank, which shall be held by the Secretary of the Company. Purchaser shall be entitled to vote and to receive dividends and distributions on all such deposited Unvested Shares.
(F) TERMINATION. The provisions of this Section 4 shall automatically terminate in accordance with Section 3(b) above.
(G) ASSIGNMENT. The Company may assign its Repurchase Right under this Section 4 without the consent of the Purchaser.
5. RESTRICTIONS ON UNVESTED SHARES. Unvested Shares may not be sold, transferred, pledged, or otherwise disposed of, except that such Unvested Shares may be transferred to a trust established for the sole benefit of the Purchaser and/or his or her spouse, children or grandchildren. Any Unvested Shares that are transferred as provided herein remain subject to the terms and conditions of this Agreement.
6. ADJUSTMENTS UPON CHANGES IN CAPITAL STRUCTURE. In the event that the outstanding Shares of Common Stock of the Company are hereafter increased or decreased or changed into or exchanged for a different number or kind of shares or other securities of the Company by reason of a recapitalization, stock split, combination of shares, reclassification, stock dividend, or other change in the capital structure of the Company, then Purchaser shall be entitled to new or additional or different shares of stock or securities, in order to preserve, as nearly as practical, but not to increase, the benefits of Purchaser under this Agreement, in accordance with the provisions of Section 4.2 of the Plan. Such new, additional or different shares shall be deemed "Shares" for purposes of this Agreement and subject to all of the terms and conditions hereof.
7. SHARES FREE AND CLEAR. All Shares purchased by the Company (or otherwise returned to the Company) pursuant to this Agreement shall be delivered by Purchaser free and clear of all claims, liens and encumbrances of every nature (except the provisions of this Agreement and any conditions concerning the Shares relating to compliance with applicable federal or state securities laws), and the purchaser thereof shall acquire full and complete title and right to all of such Shares, free and clear of any claims, liens and encumbrances of every nature (again, except for the provisions of this Agreement and such securities laws).
8. LIMITATION OF COMPANY'S LIABILITY FOR NONISSUANCE; UNPERMITTED TRANSFERS.
(A) The Company agrees to use its reasonable best efforts to obtain from any applicable regulatory agency such authority or approval as may be required in order to issue and sell the Shares to Purchaser pursuant to this Agreement. The inability of the Company to obtain, from any such regulatory agency, authority or approval deemed by the Company's counsel to be necessary for the lawful issuance and sale of the Shares hereunder and under the Plan shall relieve
the Company of any liability in respect of the nonissuance or sale of such Shares as to which such requisite authority or approval shall not have been obtained.
(B) The Company shall not be required to: (i) transfer on its books any Shares of the Company which shall have been sold or transferred in violation of any of the provisions set forth in this Agreement, or (ii) treat as owner of such shares or to accord the right to vote as such owner or to pay dividends to any transferee to whom such shares shall have been so transferred.
9. NOTICES. All notices, requests, demands and other communications required or permitted under this Agreement shall be in writing and shall be deemed to have been duly given and effective (i) when delivered by hand, (ii) when otherwise delivered against receipt therefor, or (iii) three (3) business days after being mailed if sent by registered or certified mail, postage prepaid, return receipt requested. Any notice shall be addressed to the parties as follows or at such other address as a party may designate by notice given to the other party in the manner set forth herein:
(A) if to the Company:
Endologix, Inc.
11 Studebaker
Irvine, CA 92618
Attention: Chief Financial Officer
(B) if to the Purchaser, at the address shown on the signature page of this Agreement or at his most recent address as shown in the employment or stock records of the Company.
10. BINDING OBLIGATIONS. All covenants and agreements herein contained by or on behalf of any of the parties hereto shall bind and inure to the benefit of the parties hereto and their permitted successors and assigns.
11. CAPTIONS AND SECTION HEADINGS. Captions and section headings used herein are for convenience only, and are not part of this Agreement and shall not be used in construing it.
12. AMENDMENT. This Agreement may not be amended, waived, discharged, or terminated other than by written agreement of the parties.
13. ENTIRE AGREEMENT. This Agreement and the Plan constitute the entire agreement between the parties with respect to the subject matter hereof and supersede all prior or contemporaneous written or oral agreements and understandings of the parties, either express or implied.
14. ASSIGNMENT. Purchaser shall have no right, without the prior written consent of the Company, to (i) sell, assign, mortgage, pledge or otherwise transfer any interest or right created hereby, or (ii) delegate his or her duties or obligations under this Agreement. This Agreement is made solely for the benefit of the parties hereto, and no other person, partnership, association or corporation shall acquire or have any right under or by virtue of this Agreement.
15. SEVERABILITY. Should any provision or portion of this Agreement be held to be unenforceable or invalid for any reason, the remaining provisions and portions of this Agreement shall be unaffected by such holding.
16. COUNTERPARTS. This Agreement may be executed in one or more counterparts, all of which taken together shall constitute one agreement and any party hereto may execute this Agreement by signing any such counterpart. This Agreement shall be binding upon Purchaser and the Company at such time as the Agreement, in counterpart or otherwise, is executed by Purchaser and the Company.
17. APPLICABLE LAW. This Agreement shall be construed in accordance with the laws of the State of California without reference to choice of law principles, as to all matters, including, but not limited to, matters of validity, construction, effect or performance.
18. NO AGREEMENT TO EMPLOY. Nothing in this Agreement shall affect any right with respect to continuance of employment by the Company or any of its subsidiaries. The right of the Company or any of its subsidiaries to terminate at will the Purchaser's employment at any time (whether by dismissal, discharge or otherwise), with or without cause, is specifically reserved, subject to any other written employment agreement to which the Company and Purchaser may be a party.
19. "MARKET STAND-OFF" AGREEMENT. Purchaser agrees that, if requested by the Company or the managing underwriter of any proposed public offering of the Company's securities (including any acquisition transaction where Company securities will be used as all or part of the purchase price), Purchaser will not sell or otherwise transfer or dispose of any Shares held by Purchaser without the prior written consent of the Company or such underwriter, as the case may be, during such period of time, not to exceed 180 days following the effective date of the registration statement filed by the Company with respect to such offering, as the Company or the underwriter may specify.
20. TAX ELECTIONS. Purchaser understands that Purchaser (and not the
Company) shall be responsible for the Purchaser's own tax liability that may
arise as a result of the acquisition of the Shares. Purchaser acknowledges that
Purchaser has considered the advisability of all tax elections in connection
with the purchase of the Shares, including the making of an election under
Section 83(b) under the Internal Revenue Code of 1986, as amended ("Code");
Purchaser further acknowledges that the Company has no responsibility for the
making of such Section 83(b) election. In the event Purchaser determines to make
a Section 83(b) election, Purchaser agrees to timely provide a copy of the
election to the Company as required under the Code.
21. ATTORNEYS' FEES. If any party shall bring an action in law or equity against another to enforce or interpret any of the terms, covenants and provisions of this Agreement, the prevailing party in such action shall be entitled to recover reasonable attorneys' fees and costs.
[Signature Page Follows]
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written.
THE COMPANY: PURCHASER:
ENDOLOGIX, INC.
By:
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Name:
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Title: [Print Name]
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Address:
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CONSENT AND RATIFICATION OF SPOUSE
The undersigned, the spouse of _____________________, a party to the attached Restricted Stock Award Agreement (the "Agreement"), dated as of _______________, hereby consents to the execution of said Agreement by such party; and ratifies, approves, confirms and adopts said Agreement, and agrees to be bound by each and every term and condition thereof as if the undersigned had been a signatory to said Agreement, with respect to the Shares (as defined in the Agreement) made the subject of said Agreement in which the undersigned has an interest, including any community property interest therein.
I also acknowledge that I have been advised to obtain independent counsel to represent my interests with respect to this Agreement but that I have declined to do so and I hereby expressly waive my right to such independent counsel.
Exhibit 10.6.2
SECOND AMENDMENT TO SUPPLY AGREEMENT
This Second Amendment to Supply Agreement (this "Second Amendment") is entered into as of September 8, 2006 by and between Bard Peripheral Vascular, Inc. (formerly known as IMPRA, Inc. and referred to herein as "BPV"), a subsidiary of C. R. Bard, Inc., with offices at 1625 W. 3rd Street, Tempe, AZ 85281, and Endologix, Inc. a Delaware corporation, with offices at 11 Studebaker, Irvine, CA 92618 ("Endologix").
R E C I T A L S
WHEREAS, BPV and Endologix are parties to that certain Supply Agreement dated February 12, 1999 (the "Supply Agreement"), as amended by the Amendment to Supply Agreement dated January 17, 2002 (the "First Amendment"); and
WHEREAS, BPV and Endologix desire to amend the Supply Agreement on the terms and conditions set forth herein solely to modify the minimum purchase requirements of Components for the remainder of 2006 and all of 2007.
AGREEMENT
In consideration of the foregoing premises, the mutual covenants and agreements set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:
1. Definitions. For purposes of this Second Amendment, unless otherwise set forth herein, capitalized terms established in the Supply Agreement and/or First Amendment shall be applied herein as defined therein.
2. Amendments.
(a) The last sentence of Section (B) of Article IV of the Supply Agreement (as set forth in the First Amendment) provided that the minimum purchase requirements of Components by Endologix for each of the calendar years 2004 through 2007 would be a number of units of Components not less than 115% of the previous year's minimum purchase requirements or actual purchases, whichever is higher. The parties now desire to amend the Supply Agreement to provide for minimum purchase requirements of Components by Endologix of a specified dollar amount of Components (instead of units of Components) solely for the remainder of 2006 and all of 2007. Therefore, the last sentence of Section (B) of Article IV of the Supply Agreement (as set forth in the First Amendment) is hereby deleted and is replaced with the following:
"The minimum purchases of Components by Endologix for calendar year 2006 shall be an aggregate of Two Million Five Hundred Thousand Dollars ($2,500,000.00) (i.e., an amount of units of Components whose aggregate purchase price equals or exceeds $2,500,000.00). The purchase of Components for the remainder of 2006 shall be spread evenly among the remaining months of 2006 (i.e., approximately $500,000.00 per month). The minimum purchases of Components by Endologix for the calendar year 2007 shall be an aggregate of Two Million Eight Hundred Seventy-Five Thousand Dollars ($2,875,000.00) (i.e., an amount of units of Components whose aggregate purchase price equals or exceeds $2,875,000.00). The purchase of Components by Endologix in 2007 shall be in a minimum quarterly amount of $600,000.00 until the aggregate minimum purchase of $2875,000.00 for 2007 is met. Purchase of Components by Endologix in 2006 and 2007 may be in any mix of product codes as set forth on Exhibit C attached to the First Amendment.
(b) Endologix has provided to BPV purchase orders for Components for the remaining months of 2006 in connection with the execution of this Second Amendment in accordance with the terms of subsection 2(a) of this Second Amendment.
3. Miscellaneous
(a) Entire Agreement. The Supply Agreement, as amended by the First Amendment and this Second Amendment, constitutes the entire agreement between the parties pertaining to the subject matter hereof and supersedes all prior agreements, understandings, negotiations and discussions whether oral or written of the parties.
(b) Counterparts. This Second Amendment may be executed in one or more counterparts, each of which shall be deemed an original instrument and all of which together will constitute one and the same instrument. The exchange of copies of this Second Amendment and of signature pages by facsimile transmission shall constitute effective execution and delivery of this Second Amendment as to the parties and may be used in lieu of the original for all purposes. Signatures of parties transmitted by facsimile shall be deemed to be their original signatures for any purpose whatsoever.
(c) Effect of Second Amendment. Except as provided in this Second Amendment, the Supply Agreement (as amended by the First Amendment) shall remain unchanged and shall continue in full force and effect. In the event of a conflict between this Second Amendment and the Supply Agreement (as amended by the First Amendment), the terms of this Second Amendment shall govern and control.
(d) Performance. The price and minimum purchase requirements for Components are set forth in Section 2.a. of the First Amendment and Section 2.a. of this Second Amendment, respectively. Payment terms are 30 days from date of shipment. During each specified period in 2006 and 2007, Endologix agrees that it will purchase and take delivery of the applicable minimum purchase requirements set forth in Section 2.a. of this Second Amendment. If, at the end of any such period, Endologix has not purchased and taken delivery of such
minimum purchase requirements, other than due to BPV's inability to produce and deliver Components ordered by Endologix, BPV may, at its option, invoice Endologix for the difference between the minimum purchase requirements and the value of the lesser quantity of the Components that Endologix actually purchased and took delivery of during such period. Endologix will pay any such invoice within thirty (30) days of its receipt. The failure of Endologix to pay any such invoice will be deemed to be a material breach of the Supply Agreement.
IN WITNESS WHEREOF, the parties have caused this Amendment to be duly executed and delivered by their respective duly authorized officers as of the date first written above.
Bard Peripheral Vascular, Inc. Endologix, Inc.
By: /s/ By: /s/ Robert J. Krist
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President Chief Financial Officer
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| 1. | I have reviewed this quarterly report on Form 10-Q of the Company; | |
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; | |
| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; | |
| 4. | The registrant’s other certifying officer and I, are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f) for the registrant and we have: |
| a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | ||
| b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external reporting purposes in accordance with generally accepted accounting principals; | ||
| c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | ||
| d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
| 5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions): |
| a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and | ||
| b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
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Date: November 9, 2006
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By: | /s/ Paul McCormick | ||||
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President and Chief Executive Officer |
| 1. | I have reviewed this quarterly report on Form 10-Q of the Company; |
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
| 4. | The registrant’s other certifying officer and I, are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f) for the registrant and we have: |
| a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | ||
| b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external reporting purposes in accordance with generally accepted accounting principals; | ||
| c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | ||
| d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
| 5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions): |
| a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and | ||
| b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
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Date: November 9, 2006
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By: | /s/ Robert J. Krist | ||||
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Chief Financial Officer |
| (1) | The Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2006 complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m(a) or 780(d)); and | ||
| (2) | The information contained in such Quarterly Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
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Date: November 9, 2006
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By: | /s/ Paul McCormick | ||||
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President and Chief Executive Officer |
| (1) | The Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2006 complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m(a) or 780(d)); and | ||
| (2) | The information contained in such Quarterly Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
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Date: November 9, 2006
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By: | /s/ Robert J. Krist | ||||
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Chief Financial Officer |