UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): November 9, 2010
Cardica, Inc.
(Exact name of registrant as specified in its charter)
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Delaware
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000-51772
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94-3287832
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(State or other Jurisdiction of Incorporation)
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(Commission File Number)
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(IRS Employer Identification No.)
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900 Saginaw Drive, Redwood City, CA
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94063
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(Address of Principal Executive Offices)
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(Zip Code)
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Registrants telephone number, including area code:
(650) 364-9975
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(Former name or former address if changed since last report.)
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Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant
under any of the following provisions:
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Item 1.01 Entry into A Material Definitive Agreement.
On November 11, 2010, a Fourth Amendment to Lease was executed and delivered by Cardica, Inc.
(Cardica) and HCP LS REDWOOD CITY, LLC (the Landlord), which is effective as of November 11,
2010 (the Amendment). The Amendment amends Cardicas current lease (as amended to date, excluding
the Amendment, the Lease). Pursuant to the Amendment, the term of the Lease is extended four
years, through August 31, 2015. In connection with extended lease term, Cardica no longer has the
one time right of first offer with respect to a portion of the building, consisting of
approximately 10,000 rentable square feet. In addition to extending the term of the Lease, the
Amendment granted Cardica an improvement allowance of $5.00 per rentable square foot of the
premises (equal to a total of $148,070) to be used by Cardica in connection with the construction
of alterations and refurbishment of improvements in the premises, and set forth the base rent
during the extended term, which base rent is $51,824.50 per month from January 1, 2011 through
December 31, 2011, $53,305.20 per month from January 1, 2012 through December 31, 2012, $55,378.18
per month from January 1, 2013 through December 31, 2013, $59,228.00 per month from January 1, 2014
through December 31, 2014, and $62,189.40 per month from January 1, 2015 through August 31, 2015.
In addition, under the Amendment, the Landlord granted Cardica an option to further extend the
Lease for a period of two years beyond August 31, 2015 (the Option Term) and set forth the method
of determination of the annual rent payable by Cardica during the Option Term. Further, effective
as of January 1, 2011, the amount of the letter of credit required to be maintained by Cardica
under the Lease shall be reduced from $150,000 to $100,000. Except as set forth in the Amendment,
the Lease remains in full force and effect. The Amendment is filed as
10.30 to this report, and the
description of the material terms of the Amendment is qualified in its entirety by reference to
such exhibit.
Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain
Officers; Compensatory Arrangements of Certain Officers.
At Cardicas 2010 Annual Meeting of Stockholders held on November 9, 2010 (the Annual Meeting),
Cardicas stockholders, upon the recommendation of Cardicas Board of Directors (the Board),
approved an amendment to the Cardica, Inc. 2005 Equity Incentive Plan (the 2005 Plan) to increase
the number of shares of Cardicas Common Stock, par value $0.001 (Common Stock), authorized for
issuance under the 2005 Plan by 500,000 shares of Common Stock (the 2010 Amendment).
The 2005 Plan, which provides for the grant of incentive stock options, nonstatutory stock options,
stock purchase awards, stock bonus awards, stock appreciation rights, stock unit awards and other
forms of equity compensation that may be granted to Cardicas employees, non-employee directors and
consultants, was initially was adopted by the Board on October 13, 2005 and approved by Cardicas
stockholders on December 27, 2005. The 2005 Plan was previously amended by the Board on September
29, 2006, October 10, 2007, August 13, 2008 and October 1, 2009, which amendments were approved by
Cardicas stockholders on November 8, 2006, November 14, 2007, November 19, 2008 and November 11,
2009, respectively. The 2010 Amendment was adopted by the Board on September 22, 2010, subject to
stockholder approval. A more complete description of the 2005 Plan may be found in Cardicas
definitive proxy statement, filed with the Securities and Exchange Commission on October 15, 2010
(the Proxy Statement). That summary and the foregoing description are qualified in their entirety
by reference to the text of the 2005 Plan, as amended, which is filed as Exhibit 10.2 hereto and
incorporated into this Item 5.02 by reference.
Item 5.03 Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.
At the Annual Meeting, the stockholders of Cardica, upon the recommendation of the Board, approved
an amendment to the Companys Amended and Restated Certificate of Incorporation (the Charter) to
increase Cardicas authorized number of shares of Common Stock from 45,000,000 shares to 65,000,000
shares. The increase in Cardicas authorized number of shares of Common Stock was effected pursuant
to a Certificate of Amendment of Amended and Restated Certificate of Incorporation (the
Certificate of Amendment), filed with the Secretary of State of the State of Delaware on November
9, 2010 and November 15, 2010. A copy of the Certificate of Amendment is attached as Exhibit 3.1 hereto and is
incorporated into this Item 5.03 by reference.
Item 5.07 Submission of Matters to a Vote of Security Holders.
At the Annual Meeting held on November 9, 2010, the Companys stockholders approved the four
proposals listed below, which proposals are described in detail in the Proxy Statement. The final
votes on the proposals presented at the Annual Meeting are as follows:
Proposal 1:
Each of Bernard A. Hausen, M.D., Ph.D., Kevin T. Larkin, Richard P. Powers, Jeffrey L. Purvin, John
Simon, Ph.D. and William H. Younger, Jr. was elected as a director to hold office until the 2011
Annual Meeting of Stockholders and until his successor is elected and has qualified, or, if sooner,
until the directors death, resignation or removal by the following vote:
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Votes
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Votes
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Broker
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Nominee
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For
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Withheld
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Non-Votes
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Bernard A. Hausen, M.D., Ph.D.
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12,516,157
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165,292
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7,497,799
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Kevin T. Larkin
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12,441,868
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239,581
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7,497,799
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Richard P. Powers
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12,513,773
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167,676
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7,497,799
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Jeffrey L. Purvin
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12,438,781
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242,668
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7,497,799
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John Simon, Ph.D.
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12,517,367
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164,082
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7,497,799
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William H. Younger, Jr.
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12,442,875
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238,574
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7,497,799
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Proposal 2:
The proposal to approve the 2010 Amendment to the 2005 Plan as described in Item 5.02 above was
approved by the following vote:
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Votes
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Votes
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Broker
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For
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Against
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Abstentions
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Non-Votes
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12,026,893
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601,164
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53,392
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7,497,799
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Proposal 3:
The proposal to approve an amendment to the Charter to increase Cardicas authorized number of
shares of Common Stock as described in Item 5.03 above was approved by the following vote:
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Votes
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Votes
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For
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Against
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Abstentions
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19,158,672
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942,278
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78,298
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Proposal 4:
The proposal to ratify the selection by the audit committee of the Companys Board of Directors of
Ernst & Young LLP as the Companys independent registered public accounting firm for the fiscal
year ending June 30, 2011 was ratified by the following vote:
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Votes
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Votes
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For
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Against
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Abstentions
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19,928,667
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176,378
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74,203
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Item 9.01 Financial Statements and Exhibits.
(d)
Exhibits
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Exhibit No.
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Description
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3.1
(1)
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Certificate of
Amendment of Amended and Restated Certificate of Incorporation, filed
with the Secretary of State of the State of Delaware on
November 9, 2010.
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3.2
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Certificate of Correction of
Certificate of Amendment of Amended and Restated Certificate of
Incorporation, filed with the Secretary of State of the State of Delaware on
November 15, 2010.
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10.2
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Cardica, Inc. 2005 Equity Incentive Plan, as amended effective November 9, 2010.
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10.30
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Fourth Amendment to Lease dated November 11, 2010.
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(1)
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Filed
as an exhibit to the Companys Quarterly Report on Form 10-Q
filed with the Securities and Exchange Commission on
November 15, 2010 and incorporated herein by reference.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly
caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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Cardica, Inc.
(Registrant)
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Date: November 15, 2010
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/s/ Robert Y. Newell
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Robert Y. Newell, Chief Financial Officer
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INDEX OF EXHIBITS
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Exhibit No.
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Description
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3.1
(1)
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Certificate of
Amendment of Amended and Restated Certificate of Incorporation, filed
with the Secretary of State of the State of Delaware on
November 9, 2010.
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3.2
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Certificate of Correction of
Certificate of Amendment of Amended and Restated Certificate of
Incorporation, filed with the Secretary of State of the State of Delaware on
November 15, 2010.
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10.2
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Cardica, Inc. 2005 Equity Incentive Plan, as amended effective November 9, 2010.
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10.30
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Fourth Amendment to Lease dated November 11, 2010.
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(1)
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Filed
as an exhibit to the Companys Quarterly Report on Form 10-Q
filed with the Securities and Exchange Commission on
November 15, 2010 and incorporated herein by reference.
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Exhibit
10.2
2005 Equity Incentive Plan, As Amended
CARDICA, INC.
2005 EQUITY INCENTIVE PLAN
ADOPTED BY THE BOARD OF DIRECTORS: OCTOBER 13, 2005
APPROVED BY THE STOCKHOLDERS: DECEMBER 27, 2005
AS AMENDED BY THE BOARD OF DIRECTORS: SEPTEMBER 29, 2006
APPROVED BY THE STOCKHOLDERS: NOVEMBER 8, 2006
AS AMENDED BY THE BOARD OF DIRECTORS: OCTOBER 10, 2007
APPROVED BY THE STOCKHOLDERS: NOVEMBER 14, 2007
AS AMENDED BY THE BOARD OF DIRECTORS: AUGUST 13, 2008
APPROVED BY THE STOCKHOLDERS: NOVEMBER 19, 2008
AS AMENDED BY THE BOARD OF DIRECTORS: OCTOBER 1, 2009
APPROVED BY THE STOCKHOLDERS: NOVEMBER 11, 2009
AS AMENDED BY THE BOARD OF DIRECTORS: SEPTEMBER 22, 2010
APPROVED BY THE STOCKHOLDERS: NOVEMBER 9, 2010
TERMINATION DATE: OCTOBER 12, 2015
1.
GENERAL
.
(a)
Eligible Stock Award Recipients.
The persons eligible to receive Stock Awards are
Employees, Directors and Consultants.
(b)
Available Stock Awards.
The Plan provides for the grant of the following Stock Awards:
(i) Incentive Stock Options, (ii) Nonstatutory Stock Options, (iii) Stock Purchase Awards,
(iv) Stock Bonus Awards, (v) Stock Appreciation Rights, (vi) Stock Unit Awards, and (vii) Other
Stock Awards.
(c)
Purpose.
The Company, by means of the Plan, seeks to secure and retain the services of
the group of persons eligible to receive Stock Awards as set forth in Section 1(a), to provide
incentives for such persons to exert maximum efforts for the success of the Company and any
Affiliate and to provide a means by which such eligible recipients may be given an opportunity to
benefit from increases in value of the Common Stock through the granting of Stock Awards.
2.
DEFINITIONS
.
As used in the Plan, the following definitions shall apply to the capitalized terms indicated
below:
(a)
Affiliate
means (i) any corporation (other than the Company) in an unbroken chain of
corporations ending with the Company, provided each corporation in the unbroken chain (other than
the Company) owns, at the time of the determination, stock possessing fifty percent (50%) or more
of the total combined voting power of all classes of stock in one of the other corporations in such
chain, and (ii) any corporation (other than the Company) in an unbroken chain of corporations
beginning with the Company, provided each corporation (other than the last corporation) in the
unbroken chain owns, at the time of the determination, stock possessing fifty percent (50%) or more
of the total combined voting power of all classes of stock in one of the other corporations in such
chain. The Board shall have the authority to determine (i) the time or times at which the ownership
tests are applied, and (ii) whether Affiliate includes entities other than corporations within
the foregoing definition.
(b)
Board
means the Board of Directors of the Company.
(c)
Capitalization Adjustment
has the meaning ascribed to that term in Section 10(a).
(d)
Cause
means, with respect to a Participant, the occurrence of any of the following:
(i) such Participants commission of any felony or any crime involving fraud, dishonesty or moral
turpitude under the laws of the United States or any state thereof; (ii) such Participants
attempted commission of, or participation in, a fraud or act of dishonesty against the Company;
(iii) such Participants intentional, material violation of any material contract or agreement
between the Participant and the Company
or any statutory duty owed to the Company; (iv) such Participants unauthorized use or
disclosure of the Companys confidential information or trade secrets; or (v) such Participants
gross misconduct. The determination that a termination is for Cause shall be made by the Company in
its sole discretion. Any determination by the Company that the Continuous Service of a Participant
was terminated with or without Cause for the purposes of outstanding Stock Awards held by such
Participant shall have no effect upon any determination of the rights or obligations of the Company
or such Participant for any other purpose.
(e)
Change in Control
means the occurrence, in a single transaction or in a series of
related transactions, of any one or more of the following events:
(i)
any Exchange Act Person becomes the Owner, directly or indirectly, of securities of the
Company representing more than fifty percent (50%) of the combined voting power of the Companys
then outstanding securities other than by virtue of a merger, consolidation or similar transaction.
Notwithstanding the foregoing, a Change in Control shall not be deemed to occur (A) on account of
the acquisition of securities of the Company by an investor, any affiliate thereof or any other
Exchange Act Person from the Company in a transaction or series of related transactions the primary
purpose of which is to obtain financing for the Company through the issuance of equity securities
or (B) solely because the level of Ownership held by any Exchange Act Person (the
Subject Person
) exceeds the designated percentage threshold of the outstanding voting securities as a result of a
repurchase or other acquisition of voting securities by the Company reducing the number of shares
outstanding, provided that if a Change in Control would occur (but for the operation of this
sentence) as a result of the acquisition of voting securities by the Company, and after such share
acquisition, the Subject Person becomes the Owner of any additional voting securities that,
assuming the repurchase or other acquisition had not occurred, increases the percentage of the then
outstanding voting securities Owned by the Subject Person over the designated percentage threshold,
then a Change in Control shall be deemed to occur;
(ii)
there is consummated a merger, consolidation or similar transaction involving (directly
or indirectly) the Company and, immediately after the consummation of such merger, consolidation or
similar transaction, the stockholders of the Company immediately prior thereto do not Own, directly
or indirectly, either (A) outstanding voting securities representing more than fifty percent (50%)
of the combined outstanding voting power of the surviving Entity in such merger, consolidation or
similar transaction or (B) more than fifty percent (50%) of the combined outstanding voting power
of the parent of the surviving Entity in such merger, consolidation or similar transaction, in each
case in substantially the same proportions as their Ownership of the outstanding voting securities
of the Company immediately prior to such transaction;
(iii)
the stockholders of the Company approve or the Board approves a plan of complete
dissolution or liquidation of the Company, or a complete dissolution or liquidation of the Company
shall otherwise occur;
(iv)
there is consummated a sale, lease, exclusive license or other disposition of all or
substantially all of the consolidated assets of the Company and its Subsidiaries, other than a
sale, lease, license or other disposition of all or substantially all of the consolidated assets of
the Company and its Subsidiaries to an Entity, more than fifty percent (50%) of the combined voting
power of the voting securities of which are Owned by stockholders of the Company in substantially
the same proportions as their Ownership of the outstanding voting securities of the Company
immediately prior to such sale, lease, license or other disposition; or
(v)
individuals who, on the date this Plan is adopted by the Board, are members of the Board
(the
Incumbent Board
) cease for any reason to constitute at least a majority of the members of
the Board;
provided, however,
that if the appointment or election (or nomination for election) of
any new Board member was approved or recommended by a majority vote of the members of the Incumbent
Board then still in office, such new member shall, for purposes of this Plan, be considered as a
member of the Incumbent Board.
The term Change in Control shall not include a sale of assets, merger or other transaction
effected exclusively for the purpose of changing the domicile of the Company.
Notwithstanding the foregoing or any other provision of this Plan, the definition of Change in Control (or any
analogous term) in an individual written agreement between the Company or any Affiliate and the Participant shall
supersede the foregoing definition with respect to Stock Awards subject to such agreement;
provided, however,
that if
no definition of Change in Control or any analogous term is set forth in such an individual written agreement, the
foregoing definition shall apply.
(f)
Code
means the Internal Revenue Code of 1986, as amended.
(g)
Committee
means a committee of one (1) or more members of the Board to whom authority
has been delegated by the Board in accordance with Section 3(c).
(h)
Common Stock
means the common stock of the Company.
(i)
Company
means Cardica, Inc., a Delaware corporation.
(j)
Consultant
means any person, including an advisor, who is (i) engaged by the Company or
an Affiliate to render consulting or advisory services and is compensated for such services, or
(ii) serving as a member of the Board of Directors of an Affiliate and is compensated for such
services. However, service solely as a Director, or payment of a fee for such service, shall not
cause a Director to be considered a Consultant for purposes of the Plan.
(k)
Continuous Service
means that the Participants service with the Company or an
Affiliate, whether as an Employee, Director or Consultant, is not interrupted or terminated. A
change in the capacity in which the Participant renders service to the Company or an Affiliate as
an Employee, Consultant or Director or a change in the entity for which the Participant renders
such service, provided that there is no interruption or termination of the Participants service
with the Company or an Affiliate, shall not terminate a Participants Continuous Service;
provided, however
, if the corporation for which a Participant is rendering service ceases to
qualify as an Affiliate, as determined by the Board in its sole discretion, such Participants
Continuous Service shall be considered to have terminated on the date such corporation ceases to
qualify as an Affiliate. For example, a change in status from an employee of the Company to a
consultant of an Affiliate or to a Director shall not constitute an interruption of Continuous
Service. To the extent permitted by law, the Board or the chief executive officer of the Company,
in that partys sole discretion, may determine whether Continuous Service shall be considered
interrupted in the case of any leave of absence approved by that party, including sick leave,
military leave or any other personal leave. Notwithstanding the foregoing, a leave of absence shall
be treated as Continuous Service for purposes of vesting in a Stock Award only to such extent as
may be provided in the Companys leave of absence policy or in the written terms of the
Participants leave of absence.
(l)
Corporate Transaction
means the occurrence, in a single transaction or in a series of
related transactions, of any one or more of the following events:
(i)
a sale or other disposition of all or substantially all, as determined by the Board in its
sole discretion, of the consolidated assets of the Company and its Subsidiaries;
(ii)
a sale or other disposition of at least ninety percent (90%
)
of the outstanding
securities of the Company;
(iii)
the consummation of a merger, consolidation or similar transaction following which the
Company is not the surviving corporation; or
(iv)
the consummation of a merger, consolidation or similar transaction following which the
Company is the surviving corporation but the shares of Common Stock outstanding immediately
preceding the merger, consolidation or similar transaction are converted or exchanged by virtue of
the merger, consolidation or similar transaction into other property, whether in the form of
securities, cash or otherwise.
(m)
Covered Employee
means the chief executive officer and the four (4) other highest
compensated officers of the Company for whom total compensation is required to be reported to
stockholders under the Exchange Act, as determined for purposes of Section 162(m) of the Code.
(n)
Director
means a member of the Board.
(o)
Disability
means the permanent and total disability of a person within the meaning of
Section 22(e)(3) of the Code.
(p)
Employee
means any person employed by the Company or an Affiliate. However, service
solely as a Director, or payment of a fee for such services, shall not cause a Director to be
considered an Employee for purposes of the Plan.
(q)
Entity
means a corporation, partnership or other entity.
(r)
Exchange Act
means the Securities Exchange Act of 1934, as amended.
(s)
Exchange Act Person
means any natural person, Entity or group (within the meaning of
Section 13(d) or 14(d) of the Exchange Act), except that Exchange Act Person shall not include
(i) the Company or any Subsidiary of the Company,
(ii) any employee benefit plan of the Company or any Subsidiary of the Company or any trustee
or other fiduciary holding securities under an employee benefit plan of the Company or any
Subsidiary of the Company, (iii) an underwriter temporarily holding securities pursuant to an
offering of such securities, (iv) an Entity Owned, directly or indirectly, by the stockholders of
the Company in substantially the same proportions as their Ownership of stock of the Company; or
(v) any natural person, Entity or group (within the meaning of Section 13(d) or 14(d) of the
Exchange Act) that, as of the effective date of the Plan as set forth in Section 13, is the Owner,
directly or indirectly, of securities of the Company representing more than fifty percent (50%) of
the combined voting power of the Companys then outstanding securities.
(t)
Fair Market Value
means, as of any date, the value of the Common Stock determined as
follows:
(i)
If the Common Stock is listed on any established stock exchange or traded on the Nasdaq
Global Market (formerly the Nasdaq National Market) or the Nasdaq Capital Market (formerly the
Nasdaq SmallCap Market), the Fair Market Value of a share of Common Stock shall be the closing
sales price for such stock (or the closing bid, if no sales were reported) as quoted on such
exchange or market (or the exchange or market with the greatest volume of trading in the Common
Stock) on the date in question, as reported in
The Wall Street Journal
or such other source as
the Board deems reliable. Unless otherwise provided by the Board, if there is no closing sales
price (or closing bid if no sales were reported) for the Common Stock on the date in question, then
the Fair Market Value shall be the closing sales price (or closing bid if no sales were reported)
on the last preceding date for which such quotation exists.
(ii)
In the absence of such markets for the Common Stock, the Fair Market Value shall be
determined by the Board in good faith.
(u)
Incentive Stock Option
means an Option intended to qualify as an incentive stock option
within the meaning of Section 422 of the Code and the regulations promulgated thereunder.
(v)
IPO Date
means the date of the underwriting agreement between the Company and the
underwriter(s) managing the initial public offering of the Common Stock, pursuant to which the
Common Stock is priced for the initial public offering.
(w)
Non-Employee Director
means a Director who either (i) is not a current employee or
officer of the Company or an Affiliate, does not receive compensation, either directly or
indirectly, from the Company or an Affiliate for services rendered as a consultant or in any
capacity other than as a Director (except for an amount as to which disclosure would not be
required under Item 404(a) of Regulation S-K promulgated pursuant to the Securities Act
(Regulation S-K)
), does not possess an interest in any other transaction for which disclosure
would be required under Item 404(a) of Regulation S-K, and is not engaged in a business
relationship for which disclosure would be required pursuant to Item 404(b) of Regulation S-K; or
(ii) is otherwise considered a non-employee director for purposes of Rule 16b-3.
(x)
Nonstatutory Stock Option
means an Option not intended to qualify as an Incentive Stock
Option.
(y)
Officer
means a person who is an officer of the Company within the meaning of Section 16
of the Exchange Act and the rules and regulations promulgated thereunder.
(z)
Option
means an Incentive Stock Option or a Nonstatutory Stock Option to purchase shares
of Common Stock granted pursuant to the Plan.
(aa)
Option Agreement
means a written agreement between the Company and an Optionholder
evidencing the terms and conditions of an Option grant. Each Option Agreement shall be subject to
the terms and conditions of the Plan.
(bb)
Optionholder
means a person to whom an Option is granted pursuant to the Plan or, if
applicable, such other person who holds an outstanding Option.
(cc)
Other Stock Award
means an award based in whole or in part by reference to the Common
Stock which is granted pursuant to the terms and conditions of Section 7(f).
(dd)
Other Stock Award Agreement
means a written agreement between the Company and a holder
of an Other Stock Award evidencing the terms and conditions of an Other Stock Award grant. Each
Other Stock Award Agreement shall be subject to the terms and conditions of the Plan.
(ee)
Outside Director
means a Director who either (i) is not a current employee of the
Company or an affiliated corporation (within the meaning of Treasury Regulations promulgated
under Section 162(m) of the Code), is not a former employee of the Company or an affiliated
corporation who receives compensation for prior services (other than benefits under a
tax-qualified retirement plan) during the taxable year, has not been an officer of the Company or
an affiliated corporation, and does not receive remuneration from the Company or an affiliated
corporation, either directly or indirectly, in any capacity other than as a Director, or (ii) is
otherwise considered an outside director for purposes of Section 162(m) of the Code.
(ff)
Own, Owned, Owner, Ownership
A person or Entity shall be deemed to Own, to
have Owned, to be the Owner of, or to have acquired Ownership of securities if such person or
Entity, directly or indirectly, through any contract, arrangement, understanding, relationship or
otherwise, has or shares voting power, which includes the power to vote or to direct the voting,
with respect to such securities.
(gg)
Participant
means a person to whom a Stock Award is granted pursuant to the Plan or, if
applicable, such other person who holds an outstanding Stock Award.
(hh)
Performance Criteria
means the one or more criteria that the Board shall select for
purposes of establishing the Performance Goals for a Performance Period. The Performance Criteria
that shall be used to establish such Performance Goals may be based on any one of, or combination
of, the following: (i) earnings per share; (ii) earnings before interest, taxes and depreciation;
(iii) earnings before interest, taxes, depreciation and amortization (EBITDA); (iv) net earnings;
(v) return on equity; (vi) return on assets, investment, or capital employed; (vii) operating
margin; (viii) gross margin; (ix) operating income; (x) net income (before or after taxes);
(xi) net operating income; (xii) net operating income after tax; (xiii) pre- and after-tax income;
(xiv) pre-tax profit; (xv) operating cash flow; (xvi) sales or revenue targets; (xvii) increases in
revenue or product revenue; (xviii) expenses and cost reduction goals; (xix) improvement in or
attainment of expense levels; (xx) improvement in or attainment of working capital levels;
(xxi) economic value added; (xxii) market share; (xxiii) cash flow; (xxiv) cash flow per share;
(xxv) share price performance; (xxvi) debt reduction; (xxvii) implementation or completion of
projects or processes; (xxviii) customer satisfaction; (xxix) total stockholder return;
(xxx) stockholders equity; and (xxxi) other measures of performance selected by the Board. Partial
achievement of the specified criteria may result in the payment or vesting corresponding to the
degree of achievement as specified in the Stock Award Agreement. The Board shall, in its sole
discretion, define the manner of calculating the Performance Criteria it selects to use for such
Performance Period.
(ii)
Performance Goals
means, for a Performance Period, the one or more goals established by
the Board for the Performance Period based upon the Performance Criteria. Performance Goals may be
based on a Company-wide basis, with respect to one or more business units, divisions, Affiliates,
or business segments, and in either absolute terms or relative to the performance of one or more
comparable companies or a relevant index. The Board is authorized to make adjustments in the method
of calculating the attainment of Performance Goals for a Performance Period as follows: (i) to
exclude restructuring and/or other nonrecurring charges; (ii) to exclude exchange rate effects, as
applicable, for non-U.S. dollar denominated net sales and operating earnings; (iii) to exclude the
effects of changes to generally accepted accounting standards required by the Financial Accounting
Standards Board; (iv) to exclude the effects of any statutory adjustments to corporate tax rates;
and (v) to exclude the effects of any extraordinary items as determined under generally accepted
accounting principles. The Board also retains the discretion to reduce or eliminate the
compensation or economic benefit due upon attainment of Performance Goals.
(jj)
Performance Period
means the one or more periods of time, which may be of varying and
overlapping durations, as the Committee may select, over which the attainment of one or more
Performance Goals will be measured for the purpose of determining a Participants right to and the
payment of a Stock Award.
(kk)
Performance Stock Award
means an award of shares of Common Stock which is granted
pursuant to the terms and conditions of Section 7(e).
(ll)
Plan
means this Cardica, Inc. 2005 Equity Incentive Plan.
(mm)
Prior Plan
means the Companys 1997 Equity Incentive Plan in effect immediately prior
to the effective date of the Plan as set forth in Section 13.
(nn)
Rule 16b-3
means Rule 16b-3 promulgated under the Exchange Act or any successor to
Rule 16b-3, as in effect from time to time.
(oo)
Securities Act
means the Securities Act of 1933, as amended.
(pp)
Stock Appreciation Right
means a right to receive the appreciation on Common Stock that
is granted pursuant to the terms and conditions of Section 7(d).
(qq)
Stock Appreciation Right Agreement
means a written agreement between the Company and a
holder of a Stock Appreciation Right evidencing the terms and conditions of a Stock Appreciation
Right grant. Each Stock Appreciation Right Agreement shall be subject to the terms and conditions
of the Plan.
(rr)
Stock Award
means any right granted under the Plan, including an Option, a Stock
Purchase Award, Stock Bonus Award, a Stock Appreciation Right, a Stock Unit Award, Performance
Stock Award, or any Other Stock Award.
(ss)
Stock Award Agreement
means a written agreement between the Company and a Participant
evidencing the terms and conditions of a Stock Award grant. Each Stock Award Agreement shall be
subject to the terms and conditions of the Plan.
(tt)
Stock Bonus Award
means an award of shares of Common Stock which is granted pursuant to
the terms and conditions of Section 7(b).
(uu)
Stock Bonus Award Agreement
means a written agreement between the Company and a holder
of a Stock Bonus Award evidencing the terms and conditions of a Stock Bonus Award grant. Each Stock
Bonus Award Agreement shall be subject to the terms and conditions of the Plan.
(vv)
Stock Purchase Award
means an award of shares of Common Stock which is granted pursuant
to the terms and conditions of Section 7(a).
(ww)
Stock Purchase Award Agreement
means a written agreement between the Company and a
holder of a Stock Purchase Award evidencing the terms and conditions of a Stock Purchase Award
grant. Each Stock Purchase Award Agreement shall be subject to the terms and conditions of the
Plan.
(xx)
Stock Unit Award
means a right to receive shares of Common Stock which is granted
pursuant to the terms and conditions of Section 7(c).
(yy)
Stock Unit Award Agreement
means a written agreement between the Company and a holder
of a Stock Unit Award evidencing the terms and conditions of a Stock Unit Award grant. Each Stock
Unit Award Agreement shall be subject to the terms and conditions of the Plan.
(zz)
Subsidiary
means, with respect to the Company, (i) any corporation of which more than
fifty percent (50%) of the outstanding capital stock having ordinary voting power to elect a
majority of the board of directors of such corporation (irrespective of whether, at the time, stock
of any other class or classes of such corporation shall have or might have voting power by reason
of the happening of any contingency) is at the time, directly or indirectly, Owned by the Company,
and (ii) any partnership in which the Company has a direct or indirect interest (whether in the
form of voting or participation in profits or capital contribution) of more than fifty percent
(50%).
(aaa)
Ten Percent Stockholder
means a person who Owns (or is deemed to Own pursuant to
Section 424(d) of the Code) stock possessing more than ten percent (10%) of the total combined
voting power of all classes of stock of the Company or any Affiliate.
3.
ADMINISTRATION
.
(a)
Administration by Board.
The Board shall administer the Plan unless and until the Board
delegates administration of the Plan to a Committee, as provided in Section 3(c).
(b)
Powers of Board.
The Board shall have the power, subject to, and within the limitations
of, the express provisions of the Plan:
(i)
To construe and interpret the Plan and Stock Awards granted under it, and to establish,
amend and revoke rules and regulations for its administration. The Board, in the exercise of this
power, may correct any defect, omission or inconsistency in the Plan or in any Stock Award
Agreement, in a manner and to the extent it shall deem necessary or expedient to make the Plan
fully effective.
(ii)
To determine from time to time (1) which of the persons eligible under the Plan shall be
granted Stock Awards; (2) when and how each Stock Award shall be granted; (3) what type or
combination of types of Stock Award shall be granted; (4) the provisions of each Stock Award
granted (which need not be identical), including the time or times when a person shall be permitted
to receive cash or Common Stock pursuant to a Stock Award; and (5) the number of shares of Common
Stock with respect to which a Stock Award shall be granted to each such person.
(iii)
To accelerate the time at which a Stock Award may first be exercised or the time during
which a Stock Award or any part thereof will vest in accordance with the Plan, notwithstanding the
provisions in the Stock Award stating the time at which it may first be exercised or the time
during which it will vest.
(iv)
To amend the Plan or a Stock Award as provided in Section 11.
(v)
To terminate or suspend the Plan as provided in Section 12.
(vi)
Generally, to exercise such powers and to perform such acts as the Board deems necessary
or expedient to promote the best interests of the Company which are not in conflict with the
provisions of the Plan.
(vii)
To adopt such procedures and sub-plans as are necessary or appropriate to permit
participation in the Plan by Employees who are foreign nationals or employed outside the United
States.
(c)
Delegation to Committee.
(i)
General.
The Board may delegate some or all of the administration of the Plan to a
Committee or Committees. If administration is delegated to a Committee, the Committee shall have,
in connection with the administration of the Plan, the powers theretofore possessed by the Board
that have been delegated to the Committee, including the power to delegate to a subcommittee any of
the administrative powers the Committee is authorized to exercise (and references in this Plan to
the Board shall thereafter be to the Committee or subcommittee), subject, however, to such
resolutions, not inconsistent with the provisions of the Plan, as may be adopted from time to time
by the Board. The Board may retain the authority to concurrently administer the Plan with the
Committee and may, at any time, revest in the Board some or all of the powers previously delegated.
(ii)
Section
162(m)
and Rule 16b-3 Compliance.
In the sole discretion of the Board, the
Committee may consist solely of two (2) or more Outside Directors, in accordance with
Section 162(m) of the Code, and/or solely of two or more Non-Employee Directors, in accordance with
Rule 16b-3. In addition, the Board or the Committee, in its sole discretion, may (1) delegate to a
committee of one or more members of the Board who need not be Outside Directors the authority to
grant Stock Awards to eligible persons who are either (a) not then Covered Employees and are not
expected to be Covered Employees at the time of recognition of income resulting from such Stock
Award, or (b) not persons with respect to whom the Company wishes to comply with Section 162(m) of
the Code, and/or (2) delegate to a committee of one or more members of the Board who need not be
Non-Employee Directors the authority to grant Stock Awards to eligible persons who are not then
subject to Section 16 of the Exchange Act.
(d)
Delegation to an Officer.
The Board may delegate to one or more Officers of the Company
the authority to do one or both of the following (i) designate Officers and Employees of the
Company or any of its Subsidiaries to be recipients of Stock Awards and the terms thereof, and
(ii) determine the number of shares of Common Stock to be subject to such Stock Awards granted to
such Officers and Employees;
provided, however,
that the Board resolutions regarding such
delegation shall specify the total
number of shares of Common Stock that may be subject to the Stock Awards granted by such
Officer and that such Officer may not grant a Stock Award to himself or herself. Notwithstanding
anything to the contrary in this Section 3(d), the Board may not delegate to an Officer authority
to determine the Fair Market Value of the Common Stock pursuant to Section 2(t)(ii) above.
(e)
Effect of Boards Decision.
All determinations, interpretations and constructions made by
the Board in good faith shall not be subject to review by any person and shall be final, binding
and conclusive on all persons.
(f)
Cancellation and Re-Grant of Stock Awards.
Neither the Board nor any Committee shall have
the authority to: (i) reprice any outstanding Stock Awards under
the Plan, or (ii) cancel and re-grant any outstanding Stock Awards under the Plan, unless the
stockholders of the Company have approved such an action within a twelve (12) month period preceding or following such an event.
4.
SHARES SUBJECT TO THE PLAN
.
(a)
Share Reserve.
Subject to the provisions of Section 10(a) relating to Capitalization
Adjustments, the number of shares of Common Stock that may be issued pursuant to Stock Awards shall
not exceed, in the aggregate, 3,908,377 shares of Common Stock. Such share reserve consists of the
number of shares remaining available for future issuance under the Prior Plan as of immediately
prior to the termination of the Prior Plan, plus an additional 3,900,000 shares of Common Stock. In
addition, the share reserve shall be increased from time to time by the number of shares of Common
Stock that (i) are issuable pursuant to stock awards outstanding under the Companys Prior Plan as
of the effective date of the Plan (as set forth in Section 13), and (ii) but for the termination of
the Prior Plan as of the effective date of the Plan, would otherwise have reverted to the share
reserve of the Prior Plan.
(b)
Reversion of Shares to the Share Reserve.
If any Stock Award shall for any reason expire
or otherwise terminate, in whole or in part, without having been exercised in full, if any shares
of Common Stock issued to a Participant pursuant to a Stock Award are forfeited to or repurchased
by the Company, including, but not limited to, any repurchase or forfeiture caused by the failure
to meet a contingency or condition required for the vesting of such shares, or if any shares of
Common Stock are cancelled in accordance with the cancellation and regrant provisions of
Section 3(f), then the shares of Common Stock not issued under such Stock Award, or forfeited to or
repurchased by the Company, shall revert to and again become available for issuance under the Plan.
If any shares subject to a Stock Award are not delivered to a Participant because such shares are
withheld for the payment of taxes or the Stock Award is exercised through a reduction of shares
subject to the Stock Award (
i.e.
, net exercised), the number of shares that are not delivered
to the Participant shall remain available for issuance under the Plan. If the exercise price of any
Stock Award is satisfied by tendering shares of Common Stock held by the Participant (either by
actual delivery or attestation), then the number of shares so tendered shall remain available for
issuance under the Plan. Notwithstanding anything to the contrary in this Section 4(b), subject to
the provisions of Section 10(a) relating to Capitalization Adjustments the aggregate maximum number
of shares of Common Stock that may be issued pursuant to the exercise of Incentive Stock Options
shall be 3,408,377 shares of Common Stock plus the amount of any increase in the number of shares
that may be available for issuance pursuant to Stock Awards pursuant to Section 4(a).
(c)
Source of Shares.
The stock issuable under the Plan shall be shares of authorized but
unissued or reacquired Common Stock, including shares repurchased by the Company on the open
market.
5.
ELIGIBILITY
.
(a)
Eligibility for Specific Stock Awards.
Incentive Stock Options may be granted only to
Employees. Stock Awards other than Incentive Stock Options may be granted to Employees, Directors
and Consultants.
(b)
Ten Percent Stockholders.
A Ten Percent Stockholder shall not be granted an Incentive
Stock Option unless the exercise price of such Option is at least one hundred ten percent (110%) of
the Fair Market Value of the Common Stock on the date of grant and the Option is not exercisable
after the expiration of five (5) years from the date of grant.
(c)
Section
162(m)
Limitation on Annual Grants.
Subject to the provisions of Section 10(a)
relating to Capitalization Adjustments, at such time as the Company may be subject to the
applicable provisions of Section 162(m) of the Code, no Employee shall be eligible to be granted
Stock Awards whose value is determined by reference to an increase over an exercise or strike price
of
at least one hundred percent (100%) of the Fair Market Value of the Common Stock on the date
the Stock Award is granted covering more than two hundred thousand (200,000) shares of Common Stock
during any calendar year.
(d)
Consultants.
A Consultant shall not be eligible for the grant of a Stock Award if, at the
time of grant, a Form S-8 Registration Statement under the Securities Act
(Form S-8
) is not
available to register either the offer or the sale of the Companys securities to such Consultant
because of the nature of the services that the Consultant is providing to the Company, because the
Consultant is not a natural person, or because of any other rule governing the use of Form S-8.
6.
OPTION PROVISIONS
.
Each Option shall be in such form and shall contain such terms and conditions as the Board
shall deem appropriate. All Options shall be separately designated Incentive Stock Options or
Nonstatutory Stock Options at the time of grant, and, if certificates are issued, a separate
certificate or certificates shall be issued for shares of Common Stock purchased on exercise of
each type of Option. The provisions of separate Options need not be identical;
provided, however
,
that each Option Agreement shall include (through incorporation of provisions hereof by reference
in the Option or otherwise) the substance of each of the following provisions:
(a)
Term.
The Board shall determine the term of an Option;
provided, however
, that subject to
the provisions of Section 5(b) regarding Ten Percent Stockholders, no Incentive Stock Option shall
be exercisable after the expiration of ten (10) years from the date of grant.
(b)
Exercise Price of an Incentive Stock Option.
Subject to the provisions of Section 5(b)
regarding Ten Percent Stockholders, the exercise price of each Incentive Stock Option shall be not
less than one hundred percent (100%) of the Fair Market Value of the Common Stock subject to the
Option on the date the Option is granted. Notwithstanding the foregoing, an Incentive Stock Option
may be granted with an exercise price lower than that set forth in the preceding sentence if such
Option is granted pursuant to an assumption or substitution for another option in a manner
consistent with the provisions of Section 424(a) of the Code.
(c)
Exercise Price of a Nonstatutory Stock Option.
The exercise price of each Nonstatutory
Stock Option shall be not less than one hundred percent (100%) of the Fair Market Value of the
Common Stock subject to the Option on the date the Option is granted. Notwithstanding the
foregoing, a Nonstatutory Stock Option may be granted with an exercise price lower than that set
forth in the preceding sentence if such Option is granted pursuant to an assumption or substitution
for another option in a manner consistent with the provisions of Section 424(a) of the Code.
(d)
Consideration.
The purchase price of Common Stock acquired pursuant to the exercise of an
Option shall be paid, to the extent permitted by applicable law and as determined by the Board in
its sole discretion, by any combination of the methods of payment set forth below. The Board shall
have the authority to grant Options that do not permit all of the following methods of payment (or
otherwise restrict the ability to use certain methods) and to grant Options that require the
consent of the Company to utilize a particular method of payment. The methods of payment permitted
by this Section 6(d) are:
(i)
by cash or check;
(ii)
pursuant to a program developed under Regulation T as promulgated by the Federal Reserve
Board that, prior to the issuance of Common Stock, results in either the receipt of cash (or check)
by the Company or the receipt of irrevocable instructions to pay the aggregate exercise price to
the Company from the sales proceeds;
provided, however,
that such program is not in violation of
the prohibition on the extension of credit to the Companys executive officers and Directors under
Section 402 of the Sarbanes-Oxley Act of 2002, in the opinion of counsel acceptable to the Company;
(iii)
by delivery to the Company (either by actual delivery or attestation) of shares of
Common Stock;
(iv)
by a net exercise arrangement pursuant to which the Company will reduce the number of
shares of Common Stock issued upon exercise by the largest whole number of shares with a Fair
Market Value that does not exceed the aggregate exercise price;
provided, however,
the Company
shall accept a cash or other payment from the Participant to the extent of any remaining balance of
the aggregate exercise price not satisfied by such reduction in the number of whole shares to be
issued;
provided, however,
shares of Common Stock will no longer be outstanding under an Option
and will not be exercisable thereafter to
the extent that (i) shares are used to pay the exercise price pursuant to the net exercise,
(ii) shares are delivered to the Participant as a result of such exercise, and (iii) shares are
withheld to satisfy tax withholding obligations; or
(v)
according to a deferred payment or similar arrangement with the Optionholder;
provided,
however,
that interest shall compound at least annually and shall be charged at the minimum rate
of interest necessary to avoid (i) the imputation of interest income to the Company and
compensation income to the Optionholder under any applicable provisions of the Code, and (ii) the
classification of the Option as a liability for financial accounting purposes.
(e)
Transferability of Options.
The Board may, in its sole discretion, impose such
limitations on the transferability of Options as the Board shall determine. In the absence of such
a determination by the Board to the contrary, the following restrictions on the transferability of
Options shall apply:
(i)
Restrictions on Transfer.
An Option shall not be transferable except by will or by the
laws of descent and distribution and shall be exercisable during the lifetime of the Optionholder
only by the Optionholder.
(ii)
Domestic Relations Orders.
Notwithstanding the foregoing, an Option may be transferred
pursuant to a domestic relations order.
(iii)
Beneficiary Designation.
Notwithstanding the foregoing, the Optionholder may, by
delivering written notice to the Company, in a form provided by or otherwise satisfactory to the
Company, designate a third party who, in the event of the death of the Optionholder, shall
thereafter be the beneficiary of an Option with the right to exercise the Option and receive the
Common Stock or other consideration resulting from an Option exercise.
(f)
Vesting Generally.
The total number of shares of Common Stock subject to an Option may
vest and therefore become exercisable in periodic installments that may or may not be equal. The
Option may be subject to such other terms and conditions on the time or times when it may or may
not be exercised (which may be based on performance or other criteria) as the Board may deem
appropriate. The vesting provisions of individual Options may vary. The provisions of this
Section 6(f) are subject to any Option provisions governing the minimum number of shares of Common
Stock as to which an Option may be exercised.
(g)
Termination of Continuous Service.
In the event that an Optionholders Continuous Service
terminates (other than for Cause or upon the Optionholders death or Disability), the Optionholder
may exercise his or her Option (to the extent that the Optionholder was entitled to exercise such
Option as of the date of termination of Continuous Service) but only within such period of time
ending on the earlier of (i) the date three (3) months following the termination of the
Optionholders Continuous Service (or such longer or shorter period specified in the Option
Agreement), or (ii) the expiration of the term of the Option as set forth in the Option Agreement.
If, after termination of Continuous Service, the Optionholder does not exercise his or her Option
within the time specified herein or in the Option Agreement (as applicable), the Option shall
terminate.
(h)
Extension of Termination Date.
An Optionholders Option Agreement may provide that if the
exercise of the Option following the termination of the Optionholders Continuous Service (other
than upon the Optionholders death or Disability) would be prohibited at any time solely because
the issuance of shares of Common Stock would violate the registration requirements under the
Securities Act, then the Option shall terminate on the earlier of (i) the expiration of a period of
three (3) months after the termination of the Optionholders Continuous Service during which the
exercise of the Option would not be in violation of such registration requirements, or (ii) the
expiration of the term of the Option as set forth in the Option Agreement.
(i)
Disability of Optionholder.
In the event that an Optionholders Continuous Service
terminates as a result of the Optionholders Disability, the Optionholder may exercise his or her
Option (to the extent that the Optionholder was entitled to exercise such Option as of the date of
termination of Continuous Service), but only within such period of time ending on the earlier of
(i) the date twelve (12) months following such termination of Continuous Service (or such longer or
shorter period specified in the Option Agreement), or (ii) the expiration of the term of the Option
as set forth in the Option Agreement. If, after termination of Continuous Service, the Optionholder
does not exercise his or her Option within the time specified herein or in the Option Agreement (as
applicable), the Option shall terminate.
(j)
Death of Optionholder.
In the event that (i) an Optionholders Continuous Service
terminates as a result of the Optionholders death, or (ii) the Optionholder dies within the period
(if any) specified in the Option Agreement after the termination of the Optionholders Continuous
Service for a reason other than death, then the Option may be exercised (to the extent the
Optionholder was entitled to exercise such Option as of the date of death) by the
Optionholders estate, by a person who acquired the right to exercise the Option by bequest or
inheritance or by a person designated as the beneficiary of the Option upon the Optionholders
death, but only within the period ending on the earlier of (i) the date eighteen (18) months
following the date of death (or such longer or shorter period specified in the Option Agreement),
or (ii) the expiration of the term of such Option as set forth in the Option Agreement. If, after
the Optionholders death, the Option is not exercised within the time specified herein or in the
Option Agreement (as applicable), the Option shall terminate. If the Optionholder designates a
third party beneficiary of the Option in accordance with Section 6(e)(iii), then upon the death of
the Optionholder such designated beneficiary shall have the sole right to exercise the Option and
receive the Common Stock or other consideration resulting from the Option exercise.
(k)
Termination for Cause.
In the event that an Optionholders Continuous Service is
terminated for Cause, the Option shall terminate immediately and cease to remain outstanding.
7.
PROVISIONS OF STOCK AWARDS OTHER THAN OPTIONS
.
(a)
Stock Purchase Awards.
Each Stock Purchase Award Agreement shall be in such form and
shall contain such terms and conditions as the Board shall deem appropriate. At the Boards
election, shares of Common Stock may be (i) held in book entry form subject to the Companys
instructions until any restrictions relating to the Stock Purchase Award lapse; or (ii) evidenced
by a certificate, which certificate shall be held in such form and manner as determined by the
Board. The terms and conditions of Stock Purchase Award Agreements may change from time to time,
and the terms and conditions of separate Stock Purchase Award Agreements need not be identical;
provided, however,
that each Stock Purchase Award Agreement shall include (through incorporation
of the provisions hereof by reference in the agreement or otherwise) the substance of each of the
following provisions:
(i)
Purchase Price.
At the time of the grant of a Stock Purchase Award, the Board will
determine the price to be paid by the Participant for each share subject to the Stock Purchase
Award. To the extent required by applicable law, the price to be paid by the Participant for each
share of the Stock Purchase Award will not be less than the par value of a share of Common Stock.
(ii)
Consideration.
At the time of the grant of a Stock Purchase Award, the Board will
determine the consideration permissible for the payment of the purchase price of the Stock Purchase
Award. The purchase price of Common Stock acquired pursuant to the Stock Purchase Award shall be
paid either: (i) in cash or by check at the time of purchase, (ii) at the discretion of the Board,
according to a deferred payment or other similar arrangement with the Participant, (iii) by past or
future services rendered to the Company or an Affiliate, or (iv) in any other form of legal
consideration that may be acceptable to the Board in its sole discretion and permissible under
applicable law.
(iii)
Vesting.
Shares of Common Stock acquired under a Stock Purchase Award may be subject to
a share repurchase right or option in favor of the Company in accordance with a vesting schedule to
be determined by the Board.
(iv)
Termination of Participants Continuous Service.
In the event that a Participants
Continuous Service terminates, the Company shall have the right, but not the obligation, to
repurchase or otherwise reacquire, any or all of the shares of Common Stock held by the Participant
that have not vested as of the date of termination under the terms of the Stock Purchase Award
Agreement. At the Boards election, the price paid for all shares of Common Stock so repurchased or
reacquired by the Company may be at the lesser of: (i) the Fair Market Value on the relevant date,
or (ii) the Participants original cost for such shares. The Company shall not be required to
exercise its repurchase or reacquisition option until at least six (6) months (or such longer or
shorter period of time necessary to avoid classification of the Option as a liability for financial
accounting purposes) have elapsed following the Participants purchase of the shares of stock
acquired pursuant to the Stock Purchase Award unless otherwise determined by the Board or provided
in the Stock Purchase Award Agreement.
(v)
Transferability.
Rights to purchase or receive shares of Common Stock granted under a
Stock Purchase Award shall be transferable by the Participant only upon such terms and conditions
as are set forth in the Stock Purchase Award Agreement, as the Board shall determine in its sole
discretion, and so long as Common Stock awarded under the Stock Purchase Award remains subject to
the terms of the Stock Purchase Award Agreement.
(b)
Stock Bonus Awards.
Each Stock Bonus Award Agreement shall be in such form and shall
contain such terms and conditions as the Board shall deem appropriate. At the Boards election,
shares of Common Stock may be (i) held in book entry form subject to the Companys instructions
until any restrictions relating to the Stock Bonus Award lapse; or (ii) evidenced by a certificate,
which certificate shall be held in such form and manner as determined by the Board. The terms and
conditions of Stock Bonus Award
Agreements may change from time to time, and the terms and conditions of separate Stock Bonus
Award Agreements need not be identical,
provided, however
, that each Stock Bonus Award Agreement
shall include (through incorporation of provisions hereof by reference in the agreement or
otherwise) the substance of each of the following provisions:
(i)
Consideration.
A Stock Bonus Award may be awarded in consideration for (i) past or future
services rendered to the Company or an Affiliate, or (ii) any other form of legal consideration
that may be acceptable to the Board in its sole discretion and permissible under applicable law.
(ii)
Vesting.
Shares of Common Stock awarded under the Stock Bonus Award Agreement may be
subject to forfeiture to the Company in accordance with a vesting schedule to be determined by the
Board.
(iii)
Termination of Participants Continuous Service.
In the event a Participants
Continuous Service terminates, the Company may receive via a forfeiture condition, any or all of
the shares of Common Stock held by the Participant which have not vested as of the date of
termination of Continuous Service under the terms of the Stock Bonus Award Agreement.
(iv)
Transferability.
Rights to acquire shares of Common Stock under the Stock Bonus Award
Agreement shall be transferable by the Participant only upon such terms and conditions as are set
forth in the Stock Bonus Award Agreement, as the Board shall determine in its sole discretion, so
long as Common Stock awarded under the Stock Bonus Award Agreement remains subject to the terms of
the Stock Bonus Award Agreement.
(c)
Stock Unit Awards.
Each Stock Unit Award Agreement shall be in such form and shall
contain such terms and conditions as the Board shall deem appropriate. The terms and conditions of
Stock Unit Award Agreements may change from time to time, and the terms and conditions of separate
Stock Unit Award Agreements need not be identical,
provided, however,
that each Stock Unit Award
Agreement shall include (through incorporation of the provisions hereof by reference in the
agreement or otherwise) the substance of each of the following provisions:
(i)
Consideration.
At the time of grant of a Stock Unit Award, the Board will determine the
consideration, if any, to be paid by the Participant upon delivery of each share of Common Stock
subject to the Stock Unit Award. The consideration to be paid (if any) by the Participant for each
share of Common Stock subject to a Stock Unit Award may be paid in any form of legal consideration
that may be acceptable to the Board in its sole discretion and permissible under applicable law.
(ii)
Vesting.
At the time of the grant of a Stock Unit Award, the Board may impose such
restrictions or conditions to the vesting of the Stock Unit Award as it, in its sole discretion,
deems appropriate.
(iii)
Payment.
A Stock Unit Award may be settled by the delivery of shares of Common Stock,
their cash equivalent, any combination thereof or in any other form of consideration, as determined
by the Board and contained in the Stock Unit Award Agreement.
(iv)
Additional Restrictions.
At the time of the grant of a Stock Unit Award, the Board, as
it deems appropriate, may impose such restrictions or conditions that delay the delivery of the
shares of Common Stock (or their cash equivalent) subject to a Stock Unit Award after the vesting
of such Stock Unit Award.
(v)
Dividend Equivalents.
Dividend equivalents may be credited in respect of shares of Common
Stock covered by a Stock Unit Award, as determined by the Board and contained in the Stock Unit
Award Agreement. At the sole discretion of the Board, such dividend equivalents may be converted
into additional shares of Common Stock covered by the Stock Unit Award in such manner as determined
by the Board. Any additional shares covered by the Stock Unit Award credited by reason of such
dividend equivalents will be subject to all the terms and conditions of the underlying Stock Unit
Award Agreement to which they relate.
(vi)
Termination of Participants Continuous Service.
Except as otherwise provided in the
applicable Stock Unit Award Agreement, such portion of the Stock Unit Award that has not vested
will be forfeited upon the Participants termination of Continuous Service.
(d)
Stock Appreciation Rights.
Each Stock Appreciation Right Agreement shall be in such form
and shall contain such terms and conditions as the Board shall deem appropriate. The terms and
conditions of Stock Appreciation Right Agreements may
change from time to time, and the terms and conditions of separate Stock Appreciation Right
Agreements need not be identical;
provided, however
, that each Stock Appreciation Right Agreement
shall include (through incorporation of the provisions hereof by reference in the agreement or
otherwise) the substance of each of the following provisions:
(i)
Strike Price and Calculation of Appreciation.
Each Stock Appreciation Right will be
denominated in shares of Common Stock equivalents. The appreciation distribution payable on the
exercise of a Stock Appreciation Right will be not greater than an amount equal to the excess of
(i) the aggregate Fair Market Value (on the date of the exercise of the Stock Appreciation Right)
of a number of shares of Common Stock equal to the number of share of Common Stock equivalents in
which the Participant is vested under such Stock Appreciation Right, and with respect to which the
Participant is exercising the Stock Appreciation Right on such date, over (ii) an amount (the
strike price) that will be determined by the Board at the time of grant of the Stock Appreciation
Right.
(ii)
Vesting.
At the time of the grant of a Stock Appreciation Right, the Board may impose
such restrictions or conditions to the vesting of such Stock Appreciation Right as it, in its sole
discretion, deems appropriate.
(iii)
Exercise.
To exercise any outstanding Stock Appreciation Right, the Participant must
provide written notice of exercise to the Company in compliance with the provisions of the Stock
Appreciation Right Agreement evidencing such Stock Appreciation Right.
(iv)
Payment.
The appreciation distribution in respect to a Stock Appreciation Right may be
paid in Common Stock, in cash, in any combination of the two or in any other form of consideration,
as determined by the Board and contained in the Stock Appreciation Right Agreement evidencing such
Stock Appreciation Right.
(v)
Termination of Continuous Service.
In the event that a Participants Continuous Service
terminates, the Participant may exercise his or her Stock Appreciation Right (to the extent that
the Participant was entitled to exercise such Stock Appreciation Right as of the date of
termination) but only within such period of time ending on the earlier of (i) the date three
(3) months following the termination of the Participants Continuous Service (or such longer or
shorter period specified in the Stock Appreciation Right Agreement), or (ii) the expiration of the
term of the Stock Appreciation Right as set forth in the Stock Appreciation Right Agreement. If,
after termination, the Participant does not exercise his or her Stock Appreciation Right within the
time specified herein or in the Stock Appreciation Right Agreement (as applicable), the Stock
Appreciation Right shall terminate.
(e)
Performance Stock Awards.
A Performance Stock Award is any Stock Award that may be
granted, may vest, or may be exercised based upon service conditions, upon the attainment during a
Performance Period of certain Performance Goals, or both. The length of any Performance Period, the
Performance Goals to be achieved during the Performance Period, and the measure of whether and to
what degree such Performance Goals have been attained shall be conclusively determined by the Board
in its sole discretion. The maximum benefit to be received by any individual in any calendar year
attributable to Performance Stock Awards shall not exceed the value of two hundred thousand
(200,000) shares of Common Stock.
(f)
Other Stock Awards.
Other forms of Stock Awards valued in whole or in part by reference
to, or otherwise based on, Common Stock may be granted either alone or in addition to Stock Awards
provided for under Section 6 and the preceding provisions of this Section 7. Subject to the
provisions of the Plan, the Board shall have sole and complete authority to determine the persons
to whom and the time or times at which such Other Stock Awards will be granted, the number of
shares of Common Stock (or the cash equivalent thereof) to be granted pursuant to such Other Stock
Awards and all other terms and conditions of such Other Stock Awards.
8.
COVENANTS OF THE COMPANY
.
(a)
Availability of Shares.
During the terms of the Stock Awards, the Company shall keep
available at all times the number of shares of Common Stock required to satisfy such Stock Awards.
(b)
Securities Law Compliance.
The Company shall seek to obtain from each regulatory
commission or agency having jurisdiction over the Plan such authority as may be required to grant
Stock Awards and to issue and sell shares of Common Stock upon exercise of the Stock Awards;
provided, however,
that this undertaking shall not require the Company to register under the
Securities Act the Plan, any Stock Award or any Common Stock issued or issuable pursuant to any
such Stock Award. If, after reasonable efforts, the Company is unable to obtain from any such
regulatory commission or agency the authority that counsel for the Company
deems necessary for the lawful issuance and sale of Common Stock under the Plan, the Company
shall be relieved from any liability for failure to issue and sell Common Stock upon exercise of
such Stock Awards unless and until such authority is obtained.
9.
MISCELLANEOUS
.
(a)
Use of Proceeds.
Proceeds from the sale of shares of Common Stock pursuant to Stock
Awards shall constitute general funds of the Company.
(b)
Stockholder Rights.
No Participant shall be deemed to be the holder of, or to have any of
the rights of a holder with respect to, any shares of Common Stock subject to such Stock Award
unless and until such Participant has satisfied all requirements for exercise of the Stock Award
pursuant to its terms.
(c)
No Employment or Other Service Rights.
Nothing in the Plan, any Stock Award Agreement or
other instrument executed thereunder or any Stock Award granted pursuant thereto shall confer upon
any Participant any right to continue to serve the Company or an Affiliate in the capacity in
effect at the time the Stock Award was granted or shall affect the right of the Company or an
Affiliate to terminate (i) the employment of an Employee with or without notice and with or without
cause, (ii) the service of a Consultant pursuant to the terms of such Consultants agreement with
the Company or an Affiliate, or (iii) the service of a Director pursuant to the Bylaws of the
Company or an Affiliate, and any applicable provisions of the corporate law of the state in which
the Company or the Affiliate is incorporated, as the case may be.
(d)
Incentive Stock Option $100,000 Limitation.
To the extent that the aggregate Fair Market
Value (determined at the time of grant) of Common Stock with respect to which Incentive Stock
Options are exercisable for the first time by any Optionholder during any calendar year (under all
plans of the Company and any Affiliates) exceeds one hundred thousand dollars ($100,000), the
Options or portions thereof that exceed such limit (according to the order in which they were
granted) shall be treated as Nonstatutory Stock Options, notwithstanding any contrary provision of
the applicable Option Agreement(s).
(e)
Investment Assurances.
The Company may require a Participant, as a condition of
exercising or acquiring Common Stock under any Stock Award, (i) to give written assurances
satisfactory to the Company as to the Participants knowledge and experience in financial and
business matters and/or to employ a purchaser representative reasonably satisfactory to the Company
who is knowledgeable and experienced in financial and business matters and that he or she is
capable of evaluating, alone or together with the purchaser representative, the merits and risks of
exercising the Stock Award; and (ii) to give written assurances satisfactory to the Company stating
that the Participant is acquiring Common Stock subject to the Stock Award for the Participants own
account and not with any present intention of selling or otherwise distributing the Common Stock.
The foregoing requirements, and any assurances given pursuant to such requirements, shall be
inoperative if (i) the issuance of the shares upon the exercise or acquisition of Common Stock
under the Stock Award has been registered under a then currently effective registration statement
under the Securities Act, or (ii) as to any particular requirement, a determination is made by
counsel for the Company that such requirement need not be met in the circumstances under the then
applicable securities laws. The Company may, upon advice of counsel to the Company, place legends
on stock certificates issued under the Plan as such counsel deems necessary or appropriate in order
to comply with applicable securities laws, including, but not limited to, legends restricting the
transfer of the Common Stock.
(f)
Withholding Obligations.
To the extent provided by the terms of a Stock Award Agreement,
the Company may, in its sole discretion, satisfy any federal, state or local tax withholding
obligation relating to a Stock Award by any of the following means (in addition to the Companys
right to withhold from any compensation paid to the Participant by the Company) or by a combination
of such means: (i) causing the Participant to tender a cash payment; (ii) withholding shares of
Common Stock from the shares of Common Stock issued or otherwise issuable to the Participant in
connection with the Stock Award;
provided, however,
that no shares of Common Stock are withheld
with a value exceeding the minimum amount of tax required to be withheld by law (or such lower
amount as may be necessary to avoid classification of the Stock Award as a liability for financial
accounting purposes); or (iii) by such other method as may be set forth in the Stock Award
Agreement.
(g)
Electronic Delivery.
Any reference herein to a written agreement or document shall
include any agreement or document delivered electronically or posted on the Companys intranet.
10.
ADJUSTMENTS UPON CHANGES IN COMMON STOCK; CORPORATE TRANSACTIONS
.
(a)
Capitalization Adjustments.
If any change is made in, or other events occur with respect
to, the Common Stock subject to the Plan or subject to any Stock Award after the effective date of
the Plan set forth in Section 13 without the receipt of consideration by the Company (through
merger, consolidation, reorganization, recapitalization, reincorporation, stock dividend, dividend
in property other than cash, stock split, liquidating dividend, combination of shares, exchange of
shares, change in corporate structure or other transaction not involving the receipt of
consideration by the Company (each a
Capitalization Adjustment
)), the Board shall appropriately
adjust: (i) the class(es) and maximum number of securities subject to the Plan pursuant to
Section 4(a), (ii) the class(es) and number of securities subject to each outstanding stock award
under the Prior Plan that are added from time to time to the share reserve under the Plan pursuant
to Section 4(a), (iii) the class(es) and maximum number of securities that may be issued pursuant
to the exercise of Incentive Stock Options pursuant to Section 4(b), (iv) the class(es) and maximum
number of securities that may be awarded to any person pursuant to Sections 5(c) and 7(e), and
(v) the class(es) and number of securities and price per share of stock subject to outstanding
Stock Awards. The Board shall make such adjustments, and its determination shall be final, binding
and conclusive. (Notwithstanding the foregoing, the conversion of any convertible securities of the
Company shall not be treated as a transaction without receipt of consideration by the Company.)
(b)
Dissolution or Liquidation.
In the event of a dissolution or liquidation of the Company,
all outstanding Stock Awards (other than Stock Awards consisting of vested and outstanding shares
of Common Stock not subject to the Companys right of repurchase) shall terminate immediately prior
to the completion of such dissolution or liquidation, and the shares of Common Stock subject to the
Companys repurchase option may be repurchased by the Company notwithstanding the fact that the
holder of such Stock Award is providing Continuous Service,
provided, however,
that the Board
may, in its sole discretion, cause some or all Stock Awards to become fully vested, exercisable
and/or no longer subject to repurchase or forfeiture (to the extent such Stock Awards have not
previously expired or terminated) before the dissolution or liquidation is completed but contingent
on its completion.
(c)
Corporate Transaction.
The following provisions shall apply to Stock Awards in the event
of a Corporate Transaction unless otherwise provided in a written agreement between the Company or
any Affiliate and the holder of the Stock Award:
(i)
Stock Awards May Be Assumed.
In the event of a Corporate Transaction, any surviving
corporation or acquiring corporation (or the surviving or acquiring corporations parent company)
may assume or continue any or all Stock Awards outstanding under the Plan or may substitute similar
stock awards for Stock Awards outstanding under the Plan (including but not limited to, awards to
acquire the same consideration paid to the stockholders of the Company pursuant to the Corporate
Transaction), and any reacquisition or repurchase rights held by the Company in respect of Common
Stock issued pursuant to Stock Awards may be assigned by the Company to the successor of the
Company (or the successors parent company, if any), in connection with such Corporate Transaction.
A surviving corporation or acquiring corporation may choose to assume or continue only a portion of
a Stock Award or substitute a similar stock award for only a portion of a Stock Award. The terms of
any assumption, continuation or substitution shall be set by the Board in accordance with the
provisions of Section 3(b).
(ii)
Stock Awards Held by Current Participants.
In the event of a Corporate Transaction in
which the surviving corporation or acquiring corporation (or its parent company) does not assume or
continue such outstanding Stock Awards or substitute similar stock awards for such outstanding
Stock Awards, then with respect to Stock Awards that have not been assumed, continued or
substituted and that are held by Participants whose Continuous Service has not terminated prior to
the effective time of the Corporate Transaction (referred to as the
Current Participants
), the
vesting of such Stock Awards (and, if applicable, the time at which such Stock Awards may be
exercised) shall (contingent upon the effectiveness of the Corporate Transaction) be accelerated in
full to a date prior to the effective time of such Corporate Transaction as the Board shall
determine (or, if the Board shall not determine such a date, to the date that is five (5) days
prior to the effective time of the Corporate Transaction), and such Stock Awards shall terminate if
not exercised (if applicable) at or prior to the effective time of the Corporate Transaction, and
any reacquisition or repurchase rights held by the Company with respect to such Stock Awards shall
lapse (contingent upon the effectiveness of the Corporate Transaction). No vested Stock Unit Award
shall terminate pursuant to this Section 10(c)(ii) without being settled by delivery of shares of
Common Stock, their cash equivalent, any combination thereof, or in any other form of
consideration, as determined by the Board, prior to the effective time of the Corporate
Transaction.
(iii)
Stock Awards Held by Former Participants.
In the event of a Corporate Transaction in
which the surviving corporation or acquiring corporation (or its parent company) does not assume or
continue such outstanding Stock Awards or substitute similar stock awards for such outstanding
Stock Awards, then with respect to Stock Awards that have not been assumed, continued or
substituted and that are held by persons other than Current Participants, the vesting of such Stock
Awards (and, if applicable, the time at which such Stock Award may be exercised) shall not be
accelerated and such Stock Awards (other than a Stock Award consisting of vested and outstanding
shares of Common Stock not subject to the Companys right of repurchase) shall terminate if not
exercised (if
applicable) prior to the effective time of the Corporate Transaction;
provided, however,
that any reacquisition or repurchase rights held by the Company with respect to such Stock Awards
shall not terminate and may continue to be exercised notwithstanding the Corporate Transaction. No
vested Stock Unit Award shall terminate pursuant to this Section 10(c)(iii) without being settled
by delivery of shares of Common Stock, their cash equivalent, any combination thereof, or in any
other form of consideration, as determined by the Board, prior to the effective time of the
Corporate Transaction.
(iv)
Payment for Stock Awards in Lieu of Exercise.
Notwithstanding the foregoing, in the
event a Stock Award will terminate if not exercised prior to the effective time of a Corporate
Transaction, the Board may provide, in its sole discretion, that the holder of such Stock Award may
not exercise such Stock Award but will receive a payment, in such form as may be determined by the
Board, equal in value to the excess, if any, of (i) the value of the property the holder of the
Stock Award would have received upon the exercise of the Stock Award, over (ii) any exercise price
payable by such holder in connection with such exercise.
(d)
Change in Control.
A Stock Award may be subject to additional acceleration of vesting and
exercisability upon or after a Change in Control as may be provided in the Stock Award Agreement
for such Stock Award or as may be provided in any other written agreement between the Company or
any Affiliate and the Participant. A Stock Award may vest as to all or any portion of the shares
subject to the Stock Award (i) immediately upon the occurrence of a Change in Control, whether or
not such Stock Award is assumed, continued, or substituted by a surviving or acquiring entity in
the Change in Control, or (ii) in the event a Participants Continuous Service is terminated,
actually or constructively, within a designated period following the occurrence of a Change in
Control. In the absence of such provisions, no such acceleration shall occur.
11.
AMENDMENT OF THE PLAN AND STOCK AWARDS
.
(a)
Amendment of Plan.
Subject to the limitations, if any, of applicable law, the Board at
any time, and from time to time, may amend the Plan. However, except as provided in Section 10(a)
relating to Capitalization Adjustments, no amendment shall be effective unless approved by the
stockholders of the Company to the extent stockholder approval is necessary to satisfy applicable
law.
(b)
Stockholder Approval.
The Board, in its sole discretion, may submit any other amendment
to the Plan for stockholder approval, including, but not limited to, amendments to the Plan
intended to satisfy the requirements of Section 162(m) of the Code and the regulations thereunder
regarding the exclusion of performance-based compensation from the limit on corporate deductibility
of compensation paid to Covered Employees.
(c)
Contemplated Amendments.
It is expressly contemplated that the Board may amend the Plan
in any respect the Board deems necessary or advisable to provide eligible Employees with the
maximum benefits provided or to be provided under the provisions of the Code and the regulations
promulgated thereunder relating to Incentive Stock Options and/or to bring the Plan and/or
Incentive Stock Options granted under it into compliance therewith.
(d)
No Impairment of Rights.
Rights under any Stock Award granted before amendment of the
Plan shall not be impaired by any amendment of the Plan unless (i) the Company requests the consent
of the affected Participant, and (ii) such Participant consents in writing.
(e)
Amendment of Stock Awards.
The Board, at any time and from time to time, may amend the
terms of any one or more Stock Awards, including, but not limited to, amendments to provide terms
more favorable than previously provided in the Stock Award Agreement, subject to any specified
limits in the Plan that are not subject to Board discretion;
provided, however,
that the rights
under any Stock Award shall not be impaired by any such amendment unless (i) the Company requests
the consent of the affected Participant, and (ii) such Participant consents in writing.
12.
TERMINATION OR SUSPENSION OF THE PLAN
.
(a)
Plan Term.
The Board may suspend or terminate the Plan at any time. Unless sooner
terminated, the Plan shall terminate on the day before the tenth (10th) anniversary of the earlier
of (i) the date the Plan is adopted by the Board, or (ii) the date the Plan is approved by the
stockholders of the Company. No Stock Awards may be granted under the Plan while the Plan is
suspended or after it is terminated.
(b)
No Impairment of Rights.
Suspension or termination of the Plan shall not impair rights
and obligations under any Stock Award granted while the Plan is in effect except with the written
consent of the affected Participant.
13.
EFFECTIVE DATE OF PLAN
.
The Plan shall become effective on the IPO Date, but no Stock Award shall be exercised (or, in
the case of a Stock Purchase Award, Stock Bonus Award, Stock Unit Award, or Other Stock Award shall
be granted) unless and until the Plan has been approved by the stockholders of the Company, which
approval shall be within twelve (12) months before or after the date the Plan is adopted by the
Board.
14.
CHOICE OF LAW
.
The law of the State of Delaware shall govern all questions concerning the construction,
validity and interpretation of this Plan, without regard to that states conflict of laws rules.
Exhibit 10.30
FOURTH AMENDMENT TO LEASE
This FOURTH AMENDMENT TO LEASE (
Amendment
) is made and entered into as of November 11, 2010,
by and between HCP LS REDWOOD CITY, LLC, a Delaware limited liability company (
Landlord
), and
CARDICA, INC., a Delaware corporation (
Tenant
).
RECITALS
:
A. Landlord and Tenant are parties to that certain Office Lease dated April 25, 2003 (the
Office Lease
), pursuant to which Tenant currently leases approximately 29,614 rentable square
feet of space (the
Premises
) in the building (the
Building
) located at 900 Saginaw Drive,
Redwood City, California. The Office Lease, as amended by (i) the First Amendment dated January
21, 2004, (ii) the Second Amendment to Office Lease Agreement dated November 19, 2007, and (iii)
the Third Amendment to Office Lease Agreement dated as of November 17, 2009, is referred to herein
as the Lease.
B. The parties desire to amend the Lease on the terms and conditions set forth in this
Amendment.
AGREEMENT
:
NOW, THEREFORE, in consideration of the foregoing recitals and the mutual covenants contained
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.
Terms
. All capitalized terms when used herein shall have the same respective
meanings as are given such terms in the Lease unless expressly provided otherwise in this
Amendment
.
2.
Condition of the Premises
. Landlord and Tenant acknowledge that Tenant has been
occupying the Premises pursuant to the Lease, and therefore Tenant continues to accept the Premises
in its presently existing, as is condition.
3.
Extended Lease Term
. Pursuant to the Lease, the Lease Term is scheduled to expire
on August 31, 2011. Landlord and Tenant hereby agree to extend the Lease Term for a period of four
(4) years, from September 1, 2011, through August 31, 2015 (the
Extended Term
.), on the terms and
conditions set forth in this Amendment. The Right of First Offer set forth in Article II of
Exhibit F
to the Office Lease is hereby deleted and shall be of no further force or effect.
4.
Improvement Allowance
. Landlord hereby grants Tenant an improvement allowance
in the amount of $5.00 per rentable square foot of the Premises (i.e., $148,070.00) (the
Improvement Allowance
) to be used by Tenant in connection with the construction of alterations
and refurbishment of improvements (the
Improvements
) in the Premises. The Improvement Allowance
shall not be used by Tenant for any moving or relocation expenses, furniture or fixtures, or
personal property. Any Improvements shall be made by Tenant in accordance with the terms of
Section IX C
of the Office Lease, and shall be subject to the terms of
Section VIII
of the Office Lease. Landlord shall disburse the Improvement Allowance to Tenant following the
completion of the Improvements, and in accordance with Landlords reasonable and customary
disbursement procedures, which include the requirement that Tenant provide invoices and other
evidence of the costs incurred, and applicable lien waivers and releases. Notwithstanding the
foregoing, (i) Landlord shall have no obligation to pay the Improvement Allowance to Tenant until
after January 1, 2011, and (ii) any amount of the Improvement Allowance that has not been allocated
or disbursed on or before December 31, 2011, shall revert to Landlord and Tenant shall have no
further rights thereto. Landlord shall not charge a supervisory or construction management fee
relating to the Sublease Improvements, but Landlord shall be permitted to recover from Tenant or
deduct from the Improvement Allowance Landlords actual out-of-pocket fees paid by Landlord to
third party consultants or service providers which Landlord determines reasonably necessary to
facilitate its review and approval of the Improvements. Except as expressly provided above,
Landlord shall not be obligated to provide or pay for any improvement work or services related to
the improvement of the Premises.
5.
Rent
.
5.1
Base Rent
. Prior to January 1, 2011, Tenant shall continue to pay monthly
installments of Base Rent for the Premises in accordance with the terms of the Office Lease.
Commencing on January 1, 2011, and continuing through the Extended Term, Tenant shall pay monthly
installments of Base Rent for the Premises as follows:
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Monthly
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Annual
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Installment
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Monthly Rental Rate
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Calendar Year
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Base Rent
|
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of Base Rent
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per Square Foot
|
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2011
|
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$
|
621,894.00
|
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$
|
51,824.50
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$
|
1.75
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2012
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$
|
639,662.40
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$
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53,305.20
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$
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1.80
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2013
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$
|
664,538.16
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$
|
55,378.18
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$
|
1.87
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2014
|
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$
|
710,736.00
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$
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59,228.00
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$
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2.00
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2015
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$
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746,272.80
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$
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62,189.40
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$
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2.10
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5.2
Additional Rent
. Tenants Pro Rata Share, Tenants Monthly Expense and Tax
Payment and all other monetary obligations of Tenant under the Lease shall remain in full force and
effect, and shall not be modified by this Amendment.
6.
Option Right
. Landlord hereby grants to the originally named Tenant herein
(
Original Tenant
), one (1) option to extend the Lease Term for a period of two (2) years (the
Option Term
), which option shall be irrevocably exercised only by written notice delivered by
Tenant to Landlord not more than twelve (12) months nor less than nine (9) months prior to the
expiration of the Extended Term, provided that the following conditions
(
the
Option Conditions
)
are satisfied: (i) as of the date of delivery of such notice, Tenant is not in default under this
Lease, after the expiration of any applicable notice and cure period; (ii) as of the end of the
Lease Term, Tenant is not in default under this Lease, after the expiration of any applicable
notice and cure period; and (iii) the Lease then remains in full force and effect and Original
Tenant or a Permitted Assignee occupies the entire Premises at the time the option to extend is
exercised and as of the commencement of the Option Term. Landlord may, at Landlords option,
exercised in Landlords sole and absolute discretion, waive any of the Option Conditions in which
case the option, if otherwise properly exercised by Tenant, shall remain in full force and effect.
Upon the proper exercise of such option to extend, and provided that Tenant satisfies all of the
Option Conditions (except those, if any, which are waived by Landlord), the Lease Term, as it
applies to the Premises, shall be extended for a period of two (2) years. The rights contained in
this
Section 6
shall be personal to Original Tenant, and may not be exercised by any
assignee, sublessee or other transferee.
6.1
Option Rent
. The annual Rent payable by Tenant during the Option Term (the
Option Rent
) shall be equal to the Fair Rental Value, as that term is defined below, for the
Premises as of the commencement date of the Option Term. The
Fair Rental Value
, as used in this
Lease, shall be equal to the annual rent per rentable square foot (with appropriate consideration
given to any base year or expense stop applicable thereto), including any included period
increases in fixed rentals, at which tenants (pursuant to leases consummated within the twelve (12)
month period preceding the first day of the Option Term), are leasing non-sublease, non-encumbered,
non-equity space which is not significantly greater or smaller in size than the subject space, for
a comparable lease term, in an arms length transaction, which comparable space is located in the
Comparable Buildings, as that term is defined, below (transactions satisfying the foregoing
criteria shall be known as the
Comparable Transactions
), taking into consideration all relevant
factors, including the following concessions (the
Concessions
): (a) rental abatement
concessions, if any, being granted such tenants in connection with such comparable space; (b)
tenant improvements or allowances provided or to be provided for such comparable space, and taking
into account the value, if any, of the existing improvements in the subject space, such value to be
based upon the age, condition, design, quality of finishes and layout of the improvements and the
extent to which the same can be utilized by a general office user other than Tenant; and (c) other
reasonable monetary concessions being granted such tenants in connection with such comparable
space. The Concessions (A) shall be reflected in the effective rental rate (which effective rental
rate shall take into consideration the total dollar value of such Concessions as amortized on a
straight-line basis over the applicable term of the Comparable Transaction (in which case such
Concessions evidenced in the effective rental rate shall not be granted to Tenant)) payable by
Tenant, or (B) at Landlords election, all such Concessions shall be granted to Tenant in
kind. The term
Comparable Buildings
shall mean the Building and those other class A life
sciences buildings which are comparable to the Building in terms of age (based upon the date of
completion of construction or major renovation of to the building), quality of construction, level
of services and amenities, size and appearance, and are located in Redwood City, California and the
surrounding commercial area.
6.2
Determination of Option Rent
. In the event Tenant timely exercises an option to
extend the Lease Term, Landlord shall notify Tenant of Landlords determination of the Option Rent
on or before the Lease Expiration Date. If Tenant, on or before the date which is ten (10) days
following the date upon which Tenant receives Landlords determination of the Option Rent, in good
faith objects to Landlords determination of the Option Rent, then Landlord and Tenant shall
attempt to agree upon the Option Rent using their best good-faith efforts. If Landlord and Tenant
fail to reach agreement within ten (10) days following Tenants objection to the Option Rent (the
Outside Agreement Date
), then each party shall make a separate determination of the Option Rent,
as the case may be, within five (5) days, and such determinations shall be submitted to arbitration
in accordance with
Sections 6.2(a)
through 6
.2.7
, below. If Tenant fails to object
to Landlords determination of the Option Rent within the time period set forth herein, then Tenant
shall be deemed to have objected to Landlords determination of Option Rent.
(a) Landlord and Tenant shall each appoint one arbitrator who shall be, at the option
of the appointing party, a real estate broker, appraiser or attorney who shall have been
active over the five (5) year period ending on the date of such appointment in the leasing
or appraisal, as the case may be, of other class A life sciences buildings located in the
Redwood City market area. The determination of the arbitrators shall be limited solely to
the issue of whether Landlords or Tenants submitted Option Rent is the closest to the
actual Option Rent, taking into account the requirements of
Section 6.2
, above, as
determined by the arbitrators. Each such arbitrator shall be appointed within fifteen (15)
days after the Outside Agreement Date. Landlord and Tenant may consult with their selected
arbitrators prior to appointment and may select an arbitrator who is favorable to their
respective positions. The arbitrators so selected by Landlord and Tenant shall be deemed
Advocate Arbitrators
.
(b) The two (2) Advocate Arbitrators so appointed shall be specifically required
pursuant to an engagement letter within ten (10) days of the date of the appointment of the
last appointed Advocate Arbitrator to agree upon and appoint a third arbitrator (
Neutral
Arbitrator
) who shall be qualified under the same criteria set forth hereinabove for
qualification of the two Advocate Arbitrators, except that neither the Landlord or Tenant or
either parties Advocate Arbitrator may, directly or indirectly, consult with the Neutral
Arbitrator prior or subsequent to his or her appearance. The Neutral Arbitrator shall be
retained via an engagement letter jointly prepared by Landlords counsel and Tenants
counsel.
(c) The three arbitrators shall, within thirty (30) days of the appointment of the
Neutral Arbitrator, reach a decision as to whether the parties shall use
Landlords or Tenants submitted Option Rent, and shall notify Landlord and Tenant
thereof.
(d) The decision of the majority of the three arbitrators shall be binding upon
Landlord and Tenant.
(e) If either Landlord or Tenant fails to appoint an Advocate Arbitrator within
fifteen (15) days after the Outside Agreement Date, then either party may petition the
presiding judge of the Superior Court of San Mateo County to appoint such Advocate
Arbitrator subject to the criteria in
Section 5.2.7(b)
, above, or if he or she
refuses to act, either party may petition any judge having jurisdiction over the parties to
appoint such Advocate Arbitrator.
(f) If the two (2) Advocate Arbitrators fail to agree upon and appoint the Neutral
Arbitrator, then either party may petition the presiding judge of the Superior Court of San
Mateo County to appoint the Neutral Arbitrator, or if he or she refuses to act, either party
may petition any judge having jurisdiction over the parties to appoint such arbitrator.
(g) The cost of the Neutral Arbitrator shall be paid by Landlord and Tenant equally;
each party shall pay its own Advocate Arbitrator.
(h) In the event that the Option Rent shall not have been determined pursuant to the
terms hereof prior to the commencement of the Option Term, Tenant shall be required to pay
the Option Rent initially provided by Landlord to Tenant, and upon the final determination
of the Option Rent, the payments made by Tenant shall be reconciled with the actual amounts
of Option Rent due, and the appropriate party shall make any corresponding payment to the
other party.
7.
Letter of Credit
. Effective as of January 1, 2011, the amount of the Letter of
Credit required to be maintained by Tenant under the Lease shall be reduced to $100,000. Promptly
after such date, Landlord shall reasonably cooperate with Tenant in arranging for a reduction of
the Letter of Credit currently held by Landlord, or for the issuance of a replacement letter of
credit, so that the amount of the Letter of Credit held by Landlord is equal to such reduced
amount. Any charges or fees imposed by the issuer in connection with such reduction or replacement
of the Letter of Credit shall be paid by Tenant.
8.
Notices
. Notwithstanding anything to the contrary contained in the Lease, as of
the date of this Amendment, any Notices to Landlord must be sent, transmitted, or delivered, as the
case may be, to the following addresses:
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if to Landlord:
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HCP LS Redwood City, LLC
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c/o HCP, Inc.
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3760 Kilroy Airport Way, Suite 300
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Long Beach, CA 90806
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Attention: Legal Department
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and
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HCP Life Science Estates
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400 Oyster Point Boulevard, Suite 409
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South San Francisco, CA 94080
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Attention: Jon Bergschneider
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and
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Allen Matkins Leck Gamble Mallory & Natsis LLP
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1901 Avenue of the Stars
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Suite 1800
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Los Angeles, California 90067
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Attention: Anton N. Natsis, Esq.
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9.
Brokers
. Landlord and Tenant hereby warrant to each other that they have had no
dealings with any real estate broker or agent in connection with the negotiation of this Amendment
other than CB Richard Ellis and Jones Lang LaSalle (the
Brokers
), and that they know of no other
real estate broker or agent who is entitled to a commission in connection with this Amendment.
Each party agrees to indemnify and defend the other party against and hold the other party harmless
from any and all claims, demands, losses, liabilities, lawsuits, judgments, costs and expenses
(including without limitation reasonable attorneys fees) with respect to any leasing commission or
equivalent compensation alleged to be owing on account of any dealings with any real estate broker
or agent, other than the Brokers, occurring by, through, or under the indemnifying party. The
terms of this
Section 8
shall survive the expiration or earlier termination of the term of
the Lease, as hereby amended.
10.
No Further Modification
. Except as specifically set forth in this Amendment, all
of the terms and provisions of the Lease shall remain unmodified and in full force and effect.
IN WITNESS WHEREOF, this Amendment has been executed as of the day and year first above
written.
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LANDLORD
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HCP LS REDWOOD CITY, LLC,
a Delaware limited liability company
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By:
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/s/ Jonathan Bergschneider
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Name:
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Jonathan Bergschneider
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Its: Senior Vice President
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TENANT
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CARDICA, INC.,
a Delaware corporation
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By:
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/s/ Frederick M. Bauer
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Its: Vice President
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Date: 11/9/10
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By:
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/s/ Robert Y. Newell
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Its: CFO
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Date: 11/9/10
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