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): February 1, 2016
BOINGO WIRELESS, INC .
(Exact name of registrant as specified in its charter)
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Delaware |
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001-35155 |
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95-4856877 |
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(State or other jurisdiction
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(Commission
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(IRS Employer
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10960 Wilshire Blvd., 23
rd
Floor
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90024 |
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(Address of principal executive offices) |
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(Zip Code) |
Registrant’s telephone number, including area code: (310) 586-5180
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 ( see General Instruction A.2. below):
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers
(e) The Compensation Committee (the “Committee”) of the Board of Directors of Boingo Wireless, Inc. (the “Company”) approved various matters related to the long-term incentive award program for our named executive officers, effective on February 1, 2016, as described below. As in prior years, we continue to operate our long-term incentive award program through time-based and performance-based restricted stock units (RSUs) granted under our 2011 Equity Incentive Plan, as amended.
2016 Long-Term Incentive Compensation Decisions for our Chief Executive Officer and Chief Financial Officer
After considering input the Company received from a number of investors that our Chief Executive Officer and Chief Financial Officer should each cease selling shares of Company stock in the market on a quarterly basis, which sales they had been undertaking primarily to cover taxes arising upon vesting of equity awards, and after separately concluding that it is appropriate in designing our 2016 long-term incentive compensation program to emphasize longer-term business and retention planning than it has in the past in order to drive toward the desired level of Company growth and profitability, the Compensation Committee determined to change the structure and grant cycle that applies to RSUs granted to David Hagan, our CEO, and Peter Hovenier, our CFO. The Committee believes the changes made, including the new structure for the Company’s 2016 long-term equity award program for our CEO and CFO, focuses these officers on accomplishing the Company’s overall long-term corporate and strategic goals, eliminates intervening quarterly vesting dates that force them to sell shares in the market to cover taxes triggered upon vesting, and strengthens the Company’s ability to retain our senior management team over the next three years.
The Committee worked with Messrs. Hagan and Hovenier, as well as outside advisors, to structure an arrangement whereby they each agreed to amend their outstanding RSUs granted in 2014 and 2015 to delay the vesting of each such award in consideration of receiving 2016 RSU grants that encompass the number of shares that might otherwise have been granted in annual installments over 2016, 2017 and 2018. Specifically, Mr. Hagan and Mr. Hovenier have each agreed, effective as of February 1, 2016, to extend the vesting that applies to his previously-granted time-based and performance-based RSUs such that the portions of RSUs granted to each officer in 2014 and scheduled to vest in quarterly installments between June 2016 and March 2017 will instead “cliff vest” on March 1, 2017, and the portions of RSUs granted in 2015 and scheduled to vest in quarterly installments between June 2016 and March 2018 will instead “cliff vest” on March 1, 2018. As contemplated in Messrs. Hagan’s and Hovenier’s employment agreements with the Company, these amended RSUs remain subject to vesting acceleration upon certain involuntary employment termination scenarios. The form of Vesting Extension Agreement for Messrs. Hagan and Hovenier is attached as Exhibit 99.1.
Effective as of February 1, 2016, the Committee approved the grant of time-based RSUs to Messrs. Hagan and Hovenier that “cliff vest” upon continuous service through February 1, 2019, as well as the grant of performance-based RSUs that vest upon the achievement of performance objectives and continuous service through February 1, 2019. Fifty percent of the performance objectives relate to average revenue growth over the two-year period ending on December 31, 2017, as compared with revenue in the year ending on December 31, 2015. The remaining fifty percent of the performance objectives relate to achievement of earnings before interest taxes, depreciation, and amortization divided by total revenue, or EBITDA margin, during 2017. The performance objectives are subject to under- or over-achievement on a sliding scale, with 50% of the target number of shares vesting upon minimum achievement, and up to a maximum of 150% of the target number of shares vesting upon maximum achievement, with straight-line interpolation applied between performance increments. Following achievement of the performance objectives to establish the number of RSUs eligible to vest, Messrs. Hagan and Hovenier must remain in service through February 1, 2019 in order to vest in any of the earned performance-based RSUs.
The performance-based RSUs provide for vesting acceleration or deemed vesting achievement upon certain circumstances. Upon a change in control of the Company prior to the date that the Committee determines achievement of performance objectives, achievement will be deemed to occur at 100% of target, and accordingly
100% of the target-level performance-based RSUs will be eligible to vest over continuous service thereafter through February 1, 2019. Upon a change in control after the date that the Committee determines achievement, the number of performance-based RSUs that are eligible to vest will be determined on the basis of actual achievement (subject to time-based vesting thereafter through February 1, 2019). In addition, as contemplated in their respective employment agreements, Messrs. Hagan and Hovenier are eligible to receive partial or full vesting of all their RSUs in connection with certain involuntary termination scenarios.
The Committee approved 585,195 time-based RSUs and 585,195 performance-based RSUs (assuming at-target achievement) for Mr. Hagan, and 390,130 time-based RSUs and 390,130 performance-based RSUs (assuming at-target achievement) for Mr. Hovenier. As a result of these RSU grants, the Committee does not intend to grant additional equity awards to Messrs. Hagan and Hovenier until 2019.
The performance-based RSUs are evidenced by the form of Restricted Stock Unit Agreement (2016 Performance Stock Units) attached as Exhibit 99.2 to this Form 8-K.
Item 9.01. Financial Statements and Exhibits
(d) Exhibits
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Exhibit
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Description |
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99.1 |
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Form of Vesting Extension Agreement. |
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99.2 |
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Notice of Restricted Stock Unit Award and Restricted Stock Unit Agreement (2016 Performance Stock Units) under 2011 Equity Incentive Plan. |
SIGNATURE
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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BOINGO WIRELESS, INC. |
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Date: February 3, 2016 |
By: |
/s/ Peter Hovenier |
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Peter Hovenier |
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Chief Financial Officer |
Exhibit 99.1
VESTING EXTENSION AGREEMENT
THIS VESTING EXTENSION AGREEMENT is entered into as of February 1, 2016, by BOINGO WIRELESS, INC. , a Delaware corporation (the “ Company ”), and [ ] (the “ Executive ”).
RECITALS
WHEREAS , on March 3, 2014, the Company granted Executive restricted stock units (“ RSUs ”) covering [ ] shares of the Company’s Common Stock under the Company’s 2011 Equity Incentive Plan (the “ Plan ”) and a Notice of Stock Unit Award and Stock Unit Agreement, with such RSUs vesting in a series of 12 successive equal quarterly installments over Executive’s continuous Service (as defined in the Plan) measured from March 1, 2014, and becoming fully vested upon continuous Service through March 1, 2017 (the “ 2014 Service RSUs ”);
WHEREAS , on March 3, 2014, the Company granted Executive RSUs covering [ ] shares of the Company’s Common Stock under the Plan and a Notice of Stock Unit Award (Performance Stock Units) and Stock Unit Agreement, with only [ ] of such RSUs (80% of the original grant) eligible to vest based on the determination of annual revenue growth during the fiscal year ended December 31, 2014, and such RSUs vesting with respect to 33 1 / 3 % of the shares on March 1, 2015, and with respect to the balance in a series of 8 successive equal quarterly installments over Executive’s continuous Service measured from March 1, 2015, and becoming fully vested upon continuous Service through March 1, 2017 (the “ 2014 Performance RSUs ”);
WHEREAS , on February 27, 2015, the Company granted Executive RSUs covering [ ] shares of the Company’s Common Stock under the Plan and a Notice of Stock Unit Award and Stock Unit Agreement, with such RSUs vesting in a series of 12 successive equal quarterly installments over Executive’s continuous Service measured from March 1, 2015, and becoming fully vested upon continuous Service through March 1, 2018 (the “ 2015 Service RSUs ”);
WHEREAS , on February 27, 2015, the Company granted Executive RSUs covering [ ] shares of the Company’s Common Stock under the Plan and a Notice of Stock Unit Award (Performance Stock Units) and Stock Unit Agreement, with all [ ] of such RSUs (100% of the original grant) eligible to vest based on the determination of annual revenue growth during the fiscal year ended December 31, 2015, and such RSUs vesting with respect to 33 1 / 3 % of the shares on March 1, 2016, and with respect to the balance in a series of 8 successive equal quarterly installments over Executive’s continuous Service measured from March 1, 2016, and becoming fully vested upon continuous Service through March 1, 2018 (the “ 2015 Performance RSUs ” and together with the 2014 Service RSUs, 2014 Performance RSUs, and 2015 Service RSUs, the “ Awards ”);
WHEREAS , as of March 2, 2016, the 2014 Service RSUs will remain unvested with respect to [ ] shares of the Company’s Common Stock, the 2014 Performance RSUs will remain unvested with respect to [ ] shares of the Company’s Common Stock, the 2015 Service RSUs will remain unvested with respect to [ ] shares of the Company’s Common Stock, and the
2015 Performance RSUs will remain unvested with respect to [ ] shares of the Company’s Common Stock;
WHEREAS , based on the approximate current value of [$ ] per share of the Company’s Common Stock, as of March 2, 2016, the unvested portion of the 2014 Service RSUs is estimated to have a value of [$ ], the unvested portion of the 2014 Performance RSUs is estimated to have a value of [$ ], the unvested portion of the 2015 Service RSUs is estimated to have a value of [$ ], the unvested portion of the 2015 Performance RSUs is estimated to have a value of [$ ], with the Awards having a combined estimated value of [$ ];
WHEREAS , for Federal income tax purposes, the Awards are deemed to be subject to a “substantial risk of forfeiture” until the Executive satisfies the requirement to provide continuous Service to the Company through each vesting date originally specified for each of the Awards;
WHEREAS , Treasury Regulation Section 1.409A-1(d)(1) provides that an extension of a substantial risk of forfeiture beyond the date on which the employee otherwise could have elected to receive the amount on account of its original vesting schedule is disregarded, unless the present value of the amount subject to the substantial risk of forfeiture is materially greater than the amount the employee could have received absent the newly-imposed substantial risk of forfeiture;
WHEREAS , in exchange for a new award of RSUs from the Company covering [ ] shares of the Company’s Common Stock (the “ New Award ”), with a present value of [$ ] based on the [$ ] approximate current value of the Company’s Common Stock, the Executive has consented to amend the Awards so that all amounts originally scheduled to vest after March 1, 2016 will not become vested until the last day each such Award would have vested under its original terms; and
WHEREAS , the New Award is intended to provide the Executive with the opportunity to receive an amount of compensation that is materially greater, on a present value basis, than the present value of the compensation the Executive would otherwise be entitled to elect to receive under the original vesting schedule applicable to the Awards, within the meaning of Treasury Regulation Section 1.409A-1(d)(1).
* * * * *
NOW, THEREFORE , in consideration of the mutual promises and covenants set forth herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereby agree as follows:
1. In exchange for the right to receive the New Award, the vesting schedule of the Awards, respectively, be and hereby is amended as follows:
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Number of
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Original
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New
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2014 Service RSUs |
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[ ] |
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June 1, 2016 |
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March 1, 2017 |
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[ ] |
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September 1, 2016 |
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March 1, 2017 |
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[ ] |
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December 1, 2016 |
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March 1, 2017 |
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[ ] |
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March 1, 2017 |
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March 1, 2017 |
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2014 Performance RSUs |
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[ ] |
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June 1, 2016 |
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March 1, 2017 |
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[ ] |
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September 1, 2016 |
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March 1, 2017 |
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[ ] |
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December 1, 2016 |
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March 1, 2017 |
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[ ] |
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March 1, 2017 |
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March 1, 2017 |
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2015 Service RSUs |
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[ ] |
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June 1, 2016 |
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March 1, 2018 |
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[ ] |
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September 1, 2016 |
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March 1, 2018 |
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[ ] |
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December 1, 2016 |
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March 1, 2018 |
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[ ] |
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March 1, 2017 |
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March 1, 2018 |
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[ ] |
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June 1, 2017 |
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March 1, 2018 |
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[ ] |
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September 1, 2017 |
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March 1, 2018 |
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[ ] |
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December 1, 2017 |
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March 1, 2018 |
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[ ] |
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March 1, 2018 |
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March 1, 2018 |
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2015 Performance RSUs |
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[ ] |
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June 1, 2016 |
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March 1, 2018 |
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[ ] |
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September 1, 2016 |
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March 1, 2018 |
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[ ] |
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December 1, 2016 |
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March 1, 2018 |
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[ ] |
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March 1, 2017 |
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March 1, 2018 |
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[ ] |
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June 1, 2017 |
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March 1, 2018 |
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[ ] |
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September 1, 2017 |
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March 1, 2018 |
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[ ] |
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December 1, 2017 |
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March 1, 2018 |
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[ ] |
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March 1, 2018 |
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March 1, 2018 |
2. As a result of the foregoing amendment, the Executive will need to provide continuous Service (as defined in the Plan) through March 1, 2017 in order to vest in all shares subject to the 2014 Service RSUs and 2014 Performance RSUs, and will need to provide continuous Service (as defined in the Plan) through March 1, 2018 in order to vest in all shares subject to the 2015 Service RSUs and 2015 Performance RSUs. [Notwithstanding the foregoing, should the Executive experience an Involuntary Termination (as defined in the letter agreement
between the Executive and the Company (the “Employment Agreement”)), either prior to a Change in Control (as defined in the Employment Agreement) or more than 12 months after such a Change in Control, the percentage of the 2014 Service RSUs and 2015 Service RSUs and the percentage of 2014 Performance RSUs and 2015 Performance RSUs (determined at 100% of target if before the date that the Company’s Compensation Committee determines achievement of such award (such date, the “Determination Date”), and on the basis of actual achievement if on or after the Determination Date) that will vest will be equal to the quotient obtained by dividing the (i) the number of whole quarters of continuous service between the original vesting commencement date associated with the Award and the date of the Involuntary Termination after giving the Executive credit for an additional [ ] quarters of continuous service following the original vesting commencement date associated with the Award, by (ii) 12; provided that no more than the total number of 2014 Service RSUs and 2015 Service RSUs and the total number of 2014 Performance RSUs and 2015 Performance RSUs (determined at 100% of target if before the Determination Date, and on the basis of actual achievement if on or after the Determination Date) will vest in connection with such Involuntary Termination. Should the Executive experience an Involuntary Termination (as defined in the Employment Agreement) within 12 months following a Change in Control (as defined in the Employment Agreement), the Executive will receive full service credit under the Awards, and will be fully vested in the 2014 Service RSUs and 2015 Service RSUs and fully vested in the 2014 Performance RSUs and 2015 Performance RSUs (determined at 100% of target if before the Determination Date, and on the basis of actual achievement if on or after the Determination Date).]
3. The parties intend that this Vesting Extension Agreement and the Awards amended hereunder continue to remain exempt from the requirements of Section 409A of the Internal Revenue Code of 1986, as amended, to the extent consistent with the provisions hereof. This Vesting Extension Agreement shall be construed, administered, and governed in a manner consistent with this intent.
IN WITNESS WHEREOF, each of the parties has executed this Vesting Extension Agreement as of the day and year first above written.
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[ ] |
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BOINGO WIRELESS, INC. |
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By: |
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Title: |
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Exhibit 99.2
PERFORMANCE-BASED VESTING
BOINGO WIRELESS, INC.
2011 EQUITY INCENTIVE PLAN
NOTICE OF RESTRICTED STOCK UNIT AWARD
(2016 PERFORMANCE STOCK UNITS)
You have been granted restricted stock units (“ RSUs ”) representing shares of common stock of Boingo Wireless, Inc. (the “ Company ”) on the following terms:
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Name of Recipient: |
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«Name» |
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Grant Date: |
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«DateGrant» |
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Number of RSUs with Vesting Subject to Revenue Growth Metrics (as described below): |
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«RevenueRSUs» (the “ Revenue RSUs ”) |
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Number of RSUs with Vesting Subject to EBITDA Margin (as described below): |
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«EBITDARSUs» (the “ EBITDA RSUs ”) |
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Maximum Number of RSUs Subject to Award: |
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«AwardRSUs» (the “ Award RSUs ”) |
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Deadline for Performance Goal Achievement: |
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December 31, 2017 (the “ Deadline ”) |
You and the Company agree that the RSUs are granted under and governed by the terms and conditions of the 2011 Equity Incentive Plan (the “ Plan ”) and the Restricted Stock Unit Agreement, both of which have been made available to you and are made a part of this document. Terms not otherwise defined herein shall have the meaning set forth in the Plan.
You further agree to accept electronically all documents relating to the Plan or this award (including, without limitation, prospectuses required by the Securities and Exchange Commission) and all other documents that the Company is required to deliver to its security holders (including, without limitation, annual reports and proxy statements). You also agree that the Company may deliver these documents by posting them on a website maintained by the Company or by a third party under contract with the Company.
You further agree to comply with the Company’s Securities Trading Policy when selling shares of the Company’s common stock.
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RECIPIENT |
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BOINGO WIRELESS, INC. |
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By: |
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Title: |
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PERFORMANCE-BASED VESTING
BOINGO WIRELESS, INC.
2011 EQUITY INCENTIVE PLAN
RESTRICTED STOCK UNIT AGREEMENT
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Grant of RSUs |
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Subject to all of the terms and conditions set forth in the Notice of Restricted Stock Unit Award (the “ Grant Notice ”), this Agreement and the Plan, the Company has granted to you the Award RSUs set forth in the Grant Notice.
All capitalized terms used in this Agreement shall have the meanings assigned in this Agreement, the Grant Notice or the Plan. |
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Revenue Growth Metrics |
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Provided that your Service continues through the Deadline, you will vest in a percentage of the Revenue RSUs, contingent upon the Company’s achievement of an average revenue growth rate over the two consecutive fiscal years beginning January 1, 2016 and ending December 31, 2017 (the “ Performance Period ”), as compared with the revenue in the fiscal year ended December 31, 2015, as follows: |
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Revenue Growth in the
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Percentage of
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Less than [ ]% |
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[ |
]% |
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[ ]% or more, but less than [ ]% |
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[ |
]% |
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[ ]% or more |
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]% |
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EBITDA Margin Metrics |
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Provided that your Service continues through the Deadline, you will vest in a percentage of the EBITDA RSUs, contingent upon the Company’s achievement of EBITDA margin at the end of the last fiscal year in the Performance Period, as follows: |
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EBITDA Margin at End of
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Percentage of
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Less than [ ]% |
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[ |
]% |
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[ ]% or more, but less than [ ]% |
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[ |
]% |
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[ ]% or more |
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[ |
]% |
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Determination of Performance Goals |
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Except as otherwise provided herein, no Award RSUs will vest unless and until the above-referenced performance goals (each, a “ Performance Goal ”) have (a) occurred and have been certified by the Committee (the date of such determination, the “ Determination Date ”), and (b) your Service continues through the Deadline. A Performance Goal will not be deemed satisfied or achieved until the Committee, having sufficient information on which to base its conclusion, determines that it has been satisfied or achieved. |
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Revenue growth and EBITDA margin rate will be determined in accordance with U.S. GAAP, except that the Committee reserves the discretion to make adjustments to the Performance Goals by excluding the effects of any of the following events: (a) asset write-downs, (b) litigation, claims, judgments or settlements, (c) the effect of changes in tax laws, accounting principles or other laws or provisions affecting reported results, (d) accruals for reorganization and restructuring programs, and (e) extraordinary, unusual or non-recurring items, that may occur between the Grant Date and the Determination Date. Straight-line interpolation will be used for amounts between any increments set forth in the tables above.
To the extent that a Performance Goal has not been achieved by the Deadline, with such achievement certified by the Committee not later than March 1st of the year following the Deadline, then any remaining unvested Award RSUs corresponding to the Performance Goal will be forfeited. The Award RSUs shall in all events terminate and cease to remain outstanding after March 15th of the year following the Deadline.
No more than 150% of the Revenue RSUs and 150% of the EBITDA RSUs may vest in total under this award. |
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Service-Based Vesting Conditions |
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[Provided that you remain in continuous Service, 66 2 / 3 % of the Revenue RSUs and 66 2 / 3 % of the EBITDA RSUs will vest on the Determination Date; an additional 8 1 / 3 % of the Revenue RSUs and 8 1 / 3 % of the EBITDA RSUs will vest on May 1, 2018, and an additional 8 1 / 3 % of the Revenue RSUs and EBITDA RSUs, respectively, will vest when you complete each quarterly period of continuous Service thereafter.] [Should you remain in continuous Service through February 1, 2019, 100% of the Revenue RSUs and 100% of the EBITDA RSUs will vest on such date.] |
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Vesting Acceleration |
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No RSUs will vest after your Service has terminated for any reason, except as otherwise provided or as set forth in any written agreement signed by you and the Company.
Should a Change in Control occur prior to the Determination Date (after the Deadline, but no later than March 15, 2018), achievement shall be deemed to occur at target, and 100% of the Revenue RSUs and 100% of the EBITDA RSUs will be eligible to vest over your continuous Service thereafter. Should a Change in Control occur on or after the Determination Date, the number of Revenue RSUs and EBITDA RSUs will be determined on the basis of actual achievement, and you will be eligible to vest over your continuous Service thereafter based.
Should you experience an Involuntary Termination (as defined in a letter agreement between you and the Company (the “ Employment Agreement ”)) either prior to a Change in Control or more than 12 months after such a Change in Control, the percentage of Revenue RSUs and EBITDA RSUs (determined at 100% of target if before the Determination Date, and on the basis of actual achievement if on or after the Determination Date) that will vest will be equal to the quotient obtained by dividing the (i) the number of whole months of your continuous Service between February 1, 2016 and the date of the Involuntary Termination after giving you credit for an additional [_] months of continuous Service, by (ii) 36; provided that no more than the total number of Revenue RSUs and EBITDA RSUs (determined at 100% of target if before the Determination Date, and on the basis of actual achievement if on or after the Determination Date) will vest in connection with such Involuntary Termination. Should you experience an Involuntary Termination (as defined in the Employment Agreement) within 12 months following a Change in Control, you will receive full service credit under the RSUs, and will be fully vested in the Revenue RSUs and EBITDA RSUs (determined at 100% of target if before the Determination Date, and on the basis of actual achievement if on or after the Determination Date). |
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Forfeiture |
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If your Service terminates for any reason, then your RSUs will be forfeited to the extent that they have not vested before the termination date and do not vest as a result of the termination of your Service. This means that any RSUs that have not vested under this Agreement will be cancelled immediately. You receive no payment for RSUs that are forfeited. The Company determines when your Service terminates for this purpose. |
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Leaves of Absence and Part-Time Work |
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For purposes of this award, your Service does not terminate when you go on a military leave, a sick leave or another bona fide leave of absence, if the leave was approved by the Company in writing and if continued crediting of Service is required by applicable law, the Company’s leave of absence policy, or the terms of your leave. But your Service terminates when the approved leave ends, unless you immediately return to active work. |
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If you go on a leave of absence, then the vesting schedule specified in the Grant Notice may be adjusted in accordance with the Company’s leave of absence policy or the terms of your leave. If you commence working on a part-time basis, the Company may adjust the vesting schedule so that the rate of vesting is commensurate with your reduced work schedule. |
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Settlement of RSUs |
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Each RSU may be settled on the first Permissible Trading Day that occurs on or after the day when the RSU vests. However, each RSU must be settled not later than March 15th of the calendar year following the calendar year in which the RSU vests.
At the time of settlement, you will receive one share of the Company’s common stock for each vested RSU. But the Company, at its sole discretion, may substitute an equivalent amount of cash if the distribution of stock is not reasonably practicable due to the requirements of applicable law. The amount of cash will be determined on the basis of the market value of the Company’s common stock at the time of settlement.
No fractional shares will be issued upon settlement. |
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“Permissible Trading Day” |
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“Permissible Trading Day” means a day that satisfies each of the following requirements:
· The Nasdaq Global Market is open for trading on that day;
· You are permitted to sell shares of the Company’s common stock on that day without incurring liability under Section 16(b) of the Securities Exchange Act of 1934, as amended;
· Either (a) you are not in possession of material non-public information that would make it illegal for you to sell shares of the Company’s common stock on that day under Rule 10b-5 of the Securities and Exchange Commission or (b) Rule 10b5-1 of the Securities and Exchange Commission is applicable;
· Under the Company’s Securities Trading Policy , you are permitted to sell shares of the Company’s common stock on that day; and
· You are not prohibited from selling shares of the Company’s common stock on that day by a written agreement between you and the Company or a third party. |
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Section 409A |
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This paragraph applies only if the Company determines that you are a “specified employee,” as defined in the regulations under Code Section 409A at the time of your “separation from service,” as defined in Treasury Regulation Section 1.409A-1(h) and it is determined that settlement of these RSUs is not exempt from Code Section 409A. If this paragraph applies, then any RSUs that otherwise would have been settled during the first six months following your “separation from service” will instead be settled on the first business day following the earlier of (i) the six-month anniversary of your separation from service, or (ii) your death. |
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Nature of RSUs |
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No payment is required for the RSUs that you are receiving. Your RSUs are mere bookkeeping entries and represent the Company’s unfunded and unsecured promise to issue shares of common stock (or distribute cash) to you on a future date. As a holder of RSUs, you have no rights other than the rights of a general creditor of the Company. |
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No Voting Rights or Dividends |
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Your RSUs carry neither voting rights nor rights to cash dividends. You have no rights as a stockholder of the Company unless and until your RSUs are settled by issuing shares of the Company’s common stock. |
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RSUs Nontransferable |
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You may not sell, transfer, assign, pledge or otherwise dispose of any RSUs. For instance, you may not use your RSUs as security for a loan. |
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Beneficiary Designation |
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You may dispose of your RSUs in a written beneficiary designation. A beneficiary designation must be filed with the Company on the proper form. It will be recognized only if it has been received at the Company’s headquarters before your death. If you file no beneficiary designation or if none of your designated beneficiaries survives you, then your estate will receive any vested RSUs that you hold at the time of your death. |
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Withholding Taxes |
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No stock certificates or cash will be distributed to you unless you have made arrangements satisfactory to the Company for the payment of any withholding taxes that are due as a result of the vesting or settlement of RSUs. At the discretion of the Company, these arrangements may include (a) payment in cash, (b) payment from the proceeds of the sale of shares through a Company-approved securities broker, (c) withholding shares of Company stock that otherwise would be issued to you when the RSUs are settled with a fair market value no greater than the minimum amount required to be withheld by law, (d) surrendering shares that you previously acquired with a fair market value no greater than the minimum amount required to be withheld by law, or (e) withholding cash from other compensation. The fair market value of withheld or surrendered shares, determined as of the date when taxes otherwise would have been withheld in cash, will be applied to the withholding taxes.
To the extent you fail to make satisfactory arrangements for the payment of any required withholding taxes, you will permanently forfeit the applicable RSUs. |
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Restrictions on Resale |
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You agree not to sell any shares at a time when applicable laws, Company policies or an agreement between the Company and its underwriters prohibit a sale. This restriction will apply as long as your Service continues and for such period of time after the termination of your Service as the Company may specify. |
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Notices |
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Any notices provided for in this award or the Plan shall be given in writing and shall be deemed effectively given upon receipt or, in the case of notices delivered by the Company to you, five (5) days after deposit in the United States mail, postage prepaid, addressed to you at the last address you provided to the Company. Notwithstanding the foregoing, the Company may, in its sole discretion, decide to deliver any documents related to participation in the Plan and this award by electronic means or to request your consent to participate in the Plan by electronic means. You hereby consent to receive such documents by electronic delivery and, if requested, to agree to participate in the Plan through an on-line or electronic system established and maintained by the Company or another third party designated by the Company. |
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Retention Rights |
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Your award or this Agreement does not give you the right to be retained by the Company or a subsidiary of the Company in any capacity. The Company and its subsidiaries reserve the right to terminate your Service at any time, with or without cause. |
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Adjustments |
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In the event of a stock split, a stock dividend or a similar change in Company stock, the number of your RSUs will be adjusted accordingly, as the Company may determine pursuant to the Plan. |
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Effect of Significant Corporate Transactions |
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If the Company is a party to a merger, consolidation, or certain change in control transactions, then your RSUs will be subject to the applicable provisions of Article 9 of the Plan, provided that any action taken must either (a) preserve the exemption of your RSUs from Section 409A of the Code or (b) comply with Section 409A of the Code. |
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Applicable Law |
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This Agreement will be interpreted and enforced under the laws of the State of Delaware (without regard to its choice-of-law provisions). |
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The Plan and Other Agreements |
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The text of the Plan is incorporated in this Agreement by reference. In the event of any conflict between the terms and conditions of the Plan and the terms and conditions of this Agreement, the terms and conditions of the Plan will prevail.
The Plan, this Agreement and the Grant Notice constitute the entire understanding between you and the Company regarding this award. Any prior agreements, commitments or negotiations concerning this award are superseded. This Agreement may be amended only by another written agreement between the parties. |