As filed with the United States Securities and Exchange Commission on May 20, 2019
Registration No. 333-
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
Hanger, Inc.
(Exact name of registrant as specified in its charter)
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Delaware
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84-0904275
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(State or other jurisdiction of incorporation or
organization)
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(I.R.S. Employer Identification Number)
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10910 Domain Drive, Suite 300
Austin, Texas
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78758
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(Address of principal executive offices)
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(Zip code)
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Hanger, Inc. 2019 Omnibus Incentive Plan
(Full title of plan)
Thomas E. Hartman
Senior Vice President, Secretary & General Counsel
Hanger, Inc.
10910 Domain Drive, Suite 300
Austin, Texas 78758
(512) 777-3740
(Name, address and telephone number of agent for service)
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Large accelerated filer
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Accelerated filer
x
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Non-accelerated filer
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Smaller reporting
company
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Emerging growth
company
o
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act.
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CALCULATION OF REGISTRATION FEE
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Title of Securities
to be Registered
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Amount to
be Registered (1)
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Proposed
Maximum
Offering Price
Per Share (2)
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Proposed
Maximum
Aggregate
Offering Price (2)
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Amount of
Registration Fee
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Common Stock, $0.01 par value
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2,615,961 shares
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$19.03
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$49,781,737.83
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$6,034.00
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(1)
The shares of common stock, $0.01 par value per share (“Common Stock”), of Hanger, Inc. (the “Company”) registered hereby consist of (a) 2,025,000 shares reserved for issuance pursuant to the Hanger, Inc. 2019 Omnibus Incentive Plan (the “2019 Plan”), (b) 242,936 shares that remained available for future grants under the Hanger, Inc. 2016 Omnibus Incentive Plan (the “2016 Plan”) when the 2019 Plan was approved and that, under the terms of the 2019 Plan, became available for future grants under the 2019 Plan and (c) 348,025 shares that were subject to outstanding awards under the 2016 Plan when the 2019 Plan was approved but that are expected to become available for grant under the 2019 Plan as a result of future forfeitures. Pursuant to Rule 416 under the Securities Act of 1933, as amended (the “Securities Act”), this registration statement also covers an indeterminate number of additional shares of Common Stock that may become issuable in accordance with the adjustment and anti-dilution provisions of the 2019 Plan.
(2)
Determined in accordance with Rules 457(c) and 457(h) under the Securities Act, the registration fee calculation is based on the average of the high and low prices of a share of Common Stock as reported on the New York Stock Exchange on May 13, 2019.
EXPLANATORY NOTE
The shareholders of Hanger, Inc. (the “Company”) approved the Hanger, Inc. 2019 Omnibus Incentive Plan (the “2019 Plan”) on May 17, 2019 (the “Effective Date”). As provided in the 2019 Plan, 2,025,000 shares of common stock of the Company, $0.01 par value per share (“Common Stock”), are available for issuance thereunder. In addition, the number of shares of Common Stock available for issuance under the 2019 Plan will be increased by (a) the number of shares that remained available for future grants under the Hanger, Inc. 2016 Omnibus Incentive Plan (the “2016 Plan”) on the Effective Date and (b) the number of shares that were subject to outstanding awards under the 2016 Plan that would have again become available for new grants under the terms of the 2016 Plan if the 2016 Plan had remained in effect (taking into account the 2016 Plan’s provisions concerning termination or expiration, if any, and subject to exceptions specified in the 2016 Plan). The Company’s authority to grant new awards under the 2016 Plan terminated upon shareholder approval of the 2019 Plan on the Effective Date.
The purpose of this registration statement (this “Registration Statement”) is to register (a) the 2,025,000 shares being registered for the first time pursuant to the 2019 Plan, (b) the 242,936 shares (the “Currently Available 2016 Plan Shares”) that remained available for future grants under the 2016 Plan on the Effective Date and (c) the 348,025 shares (the “Expected Available 2016 Plan Shares”) that were subject to outstanding awards under the 2016 Plan on the Effective Date but that are expected to become available for grant under the 2019 Plan as a result of future forfeitures. The Currently Available 2016 Plan Shares and the Expected Available 2016 Plan Shares were previously registered on a Registration Statement on Form S-8, filed with the Securities and Exchange Commission (the “SEC”) on November 20, 2018 (Registration Statement No. 333-228448).
PART I
INFORMATION
REQUIRED IN THE SECTION 10(a) PROSPECTUS
The information called for in Part I of Form S-8 is not being filed with or included in this Registration Statement (by incorporation by reference or otherwise) in accordance with the rules and regulations of the SEC. The documents constituting Part I of this Registration Statement will be sent or given to participants in the 2019 Plan as specified by Rule 428(b)(1) under the Securities Act of 1933, as amended (the “Securities Act”).
PART II
INFORMATION REQUIRED IN REGISTRATION STATEMENT
Item 3.
Incorporation of Documents by Reference
The following documents previously filed by the Company with the SEC pursuant to the Securities Exchange Act of 1934, as amended (the “Exchange Act”), are incorporated in this Registration Statement by reference and are deemed to be a part hereof:
(a)
The Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2018
;
(b)
The Company’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2019;
(c)
The Company’s Current Reports on Form 8-K filed
March 14, 2019
(to the extent filed rather than furnished);
March 20, 2019
; and
May 8, 2019
(to the extent filed rather than furnished); and
(d)
The description of the Company’s Common Stock, par value $.01 per share, contained in the Company’s Registration Statement on Form 8-A, as filed on September 10, 2018 under Section 12(b) of the Exchange Act, and any amendments or reports filed for the purpose of updating such description.
In addition, all other documents subsequently filed by the Company after the date of this Registration Statement pursuant to Section 13(a), 13(c), 14 and 15(d) of the Exchange Act prior to the filing of a post-effective amendment to this Registration Statement that indicates that all securities offered hereby have been sold or which deregisters all securities then remaining unsold, shall be deemed to be incorporated by reference in this Registration Statement and to be a part hereof from the date of filing of such documents.
Any statement contained in a document incorporated or deemed incorporated by reference herein shall be deemed to be modified or superseded for the purpose of this Registration Statement to the extent that a statement contained herein or in any subsequently filed document which also is, or is deemed to be, incorporated herein by reference modifies or supersedes such statement. Any such statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this Registration Statement.
The Company hereby undertakes to provide without charge to each person who has received a copy of the prospectus to which this Registration Statement relates, upon the written or oral request of any such person, a copy of any or all the documents that have been or may be incorporated by reference into this Registration Statement, other than exhibits to such documents (unless such exhibits are incorporated therein by reference).
Item 4.
Description of Securities.
Not applicable.
Item 5.
Interests of Named Experts and Counsel.
None.
Item 6.
Indemnification of Directors and Officers
In its certificate of incorporation, the Company has adopted the provisions of Section 102(b)(7) of the Delaware General Corporation Law (the “Delaware Law”), which enables a corporation in its original certificate of incorporation or an amendment thereto to eliminate or limit the personal liability of a director for monetary damages for breach of the director’s fiduciary duty, except (i) for any breach of the director’s duty of loyalty to the corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) pursuant to Section 174 of the Delaware Law (providing for liability of directors for unlawful payment of dividends or unlawful stock purchases or redemptions) or (iv) for any transaction from which a director will personally receive a benefit in money, property or services to which the director is not legally entitled.
The Company’s amended and restated bylaws (the “Bylaws”) also include provisions relating to indemnification. Under these provisions, the Company will indemnify each person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding,
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whether civil, criminal, administrative or investigative (other than an action by or in the right of the Company), by reason of the fact that such person is or was, or has agreed to become, a director or officer of the Company, or is, or was serving, or has agreed to serve, at the request of the Company, as a director, officer, trustee, general partner, managing member, fiduciary, board of directors’ committee member, employee, or agent of, or in a similar capacity with, another corporation, limited liability company, partnership, joint venture, trust, employee benefit plan, or other enterprise (each, an “Indemnitee”), or by reason of any action alleged to have been taken or omitted in such capacity, against all expenses (including attorneys’ fees), liabilities, losses, judgments, fines, excise taxes and penalties arising under the Employee Retirement Income Security Act of 1974, as amended, and amounts paid in settlement actually and reasonably incurred by or on behalf of the Indemnitee in connection with such action, suit, or proceeding and any appeal therefrom, if the Indemnitee acted in good faith and in a manner that the Indemnitee reasonably believed to be in, or not opposed to, the best interests of the Company, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his or her conduct was unlawful. Except in certain circumstances specified in the Bylaws, the Company will not indemnify an Indemnitee seeking indemnification in connection with a proceeding (or part thereof) initiated by the Indemnitee unless the initiation thereof was approved by the Board of Directors of the Company.
The Company will also indemnify any Indemnitee who was or is a party or is threatened to be made a party to any threatened, pending, or completed action or suit by or in the right of the Company to procure a judgment in its favor by reason of the fact that the Indemnitee is or was, or has agreed to become, a director or officer of the Company, or is or was serving, or has agreed to serve, at the request of the Company, as a director, officer, trustee, general partner, managing member, fiduciary, board of directors’ committee member, employee, or agent of, or in a similar capacity with, another corporation, limited liability company, partnership, joint venture, trust, employee benefit plan or other enterprise, or by reason of any action alleged to have been taken or omitted in such capacity, against all expenses (including attorneys’ fees) actually and reasonably incurred by or on behalf of the Indemnitee in connection with such action, suit, or proceeding and any appeal therefrom, if the Indemnitee acted in good faith and in a manner that the Indemnitee reasonably believed to be in, or not opposed to, the best interests of the Company, except that no indemnification will be made in respect of any claim, issue, or matter as to which the Indemnitee shall have been adjudged to be liable to the Company, unless, and only to the extent, that the Court of Chancery of the State of Delaware or the court in which such action or suit was brought determines upon application that, despite the adjudication of such liability but in view of all the circumstances of the case, the Indemnitee is fairly and reasonably entitled to indemnity for such expenses (including attorneys’ fees) which the Court of Chancery of State of Delaware or such other court deems proper.
To the extent that an Indemnitee has been successful, on the merits or otherwise, in defense of any action, suit, investigation, or proceeding referred to above, or in defense of any claim, issue, or matter therein, or on appeal from any such action, suit, investigation, or proceeding, an Indemnitee will be indemnified against all expenses (including attorneys’ fees) actually and reasonably incurred by or on behalf of the Indemnitee in connection therewith.
The Bylaws also specify procedures to be followed in connection with any claim for indemnification and provide for the advancement of certain expenses in specified circumstances.
Item 7.
Exemption from Registration Claimed
Not applicable.
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Item 8.
Exhibits
Item 9.
Undertakings
(a)
The undersigned Company hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the Securities Act;
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(ii) To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the SEC pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20 percent change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement; and
(iii) To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement;
provided, however
, that paragraphs (a)(1)(i) and (a)(1)(ii) of this section do not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in reports filed with or furnished to the SEC by the Company pursuant to Section 13 or Section 15(d) of the Exchange Act that are incorporated by reference in this Registration Statement; and
(2) That, for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered herein, and the offering of such securities at that time shall be deemed to be the initial
bona fide
offering thereof.
(3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.
(b)
The undersigned Company hereby undertakes that, for purposes of determining any liability under the Securities Act to any purchaser, each filing of the Company’s annual report pursuant to Section 13(a) or Section 15(d) of the Exchange Act that is incorporated by reference in this Registration Statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
(c)
Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the Company pursuant to the foregoing provisions, or otherwise, the Company has been advised that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Company of expenses incurred or paid by a director, officer or controlling person of the Company in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Company will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-8 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Austin, State of Texas, on May 20, 2019.
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HANGER, INC.
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By:
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/s/ Vinit K. Asar
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Vinit K. Asar
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Chief Executive Officer
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POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints VINIT K. ASAR, and/or THOMAS E. KIRALY and/or THOMAS E. HARTMAN as his or her true and lawful attorneys-in-fact and agents, each acting alone, with full powers of substitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any or all amendments (including post-effective amendments) to this Registration Statement, and to file the same, with exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, each acting alone, full power and authority to do and perform to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, each acting alone, or his substitute or substitutes, may lawfully do or cause to be done by virtue thereof.
Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the date indicated.
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SIGNATURE
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TITLE
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DATE
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/s/ Vinit K. Asar
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Chief Executive Officer and Director
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May 20, 2019
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Vinit K. Asar
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(Principal Executive Officer)
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/s/ Thomas E. Kiraly
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Executive Vice President and Chief Financial Officer
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May 20, 2019
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Thomas E. Kiraly
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(Principal Financial Officer)
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/s/
Gabrielle B. Adams
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Vice President—Chief Accounting Officer
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May 20, 2019
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Gabrielle B. Adams
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(Principal Accounting Officer)
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/s/
Asif Ahmad
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Director
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May 20, 2019
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Asif Ahmad
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/s/ Christopher B. Begley
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Director
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May 20, 2019
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Christopher B. Begley
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/s/ John T. Fox
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Director
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May 20, 2019
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John T. Fox
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/s/ Thomas C. Freyman
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Director
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May 20, 2019
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Thomas C. Freyman
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[Signature Page to S-8 Registration Statement]
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SIGNATURE
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TITLE
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DATE
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/s/ Stephen E. Hare
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Director
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May 20, 2019
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Stephen E. Hare
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/s/ Cynthia L. Lucchese
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Director
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May 20, 2019
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Cynthia L. Lucchese
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/s/ Richard R. Pettingill
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Director
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May 20, 2019
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Richard R. Pettingill
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/s/ Kathryn M. Sullivan
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Director
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May 20, 2019
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Kathryn M. Sullivan
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[Signature Page to S-8 Registration Statement]
Exhibit 4.4
HANGER, INC.
Restricted Stock Unit Agreement for Employees
THIS AGREEMENT (this “Agreement”) is made by and between HANGER, INC., a Delaware corporation (the “Company”), and the employee (the “Employee”) identified on the Company’s online electronic list of persons to whom a grant of restricted stock units has been made by the Company.
W I T N E S S E T H
:
WHEREAS, the Company desires to award to the Employee restricted stock units relating to the Company’s common stock, par value $.01 per share (the “Common Stock”), under the Company’s 2019 Omnibus Incentive Plan (the “Plan”) in consideration for the Employee’s service to the Company and its Affiliates.
NOW, THEREFORE, the parties hereto, intending to be legally bound, do agree as follows:
1.
Award of Restricted Stock Units
.
Subject to the terms and conditions of this Agreement and the Plan, the Employee is granted restricted stock units relating to the number of shares of Common Stock as set forth on the Company’s online electronic list as being granted to the Employee (hereinafter such units are referred to as the “Restricted Stock Units”) as of the date shown on the Company’s online electronic list as being the date of grant to the Employee (the “Grant Date”).
2.
Restricted Stock Units Non-Assignable and Non-Transferable
. Each Restricted Stock Unit and all rights under this Agreement shall be non-assignable and non-transferable other than by will or the laws of descent and distribution in accordance with the Plan and may not be sold, pledged, hypothecated, assigned or transferred, except only as to such shares of Common Stock, if any, which have been issued in settlement of the Restricted Stock Units upon vesting pursuant to the terms of the Plan and this Agreement. The foregoing prohibition against transfer or assignment, together with the obligation to forfeit the Restricted Stock Units upon termination of service with the Company and/or its Affiliates as set forth in Section 3 of this Agreement are herein collectively referred to as the “Forfeiture Restrictions.” The Forfeiture Restrictions shall be binding upon and enforceable against any transferee of the Restricted Stock Units.
3.
Termination of Employment.
In the event the Employee, while employed with the Company or its Affiliates, becomes totally and permanently disabled (within the meaning of Code Section 409A) or dies, each of the then unvested Restricted Stock Units will immediately vest in full as of the date of such total and permanent disability or death. In the event of the Employee’s termination of employment with the Company or its Affiliates for Cause (as defined in the Plan) or in the event of termination of employment by the Employee, any then unvested Restricted Stock Units shall be forfeited and cancelled as of the date of such termination of employment. In the event of the Employee’s termination of employment with the Company or its Affiliates other than by reason of total and permanent disability or death, termination for Cause, or termination of employment by the Employee, any then unvested Restricted Stock Units shall be forfeited and cancelled as of the date that is ninety (90) days after the date of such termination of employment
unless such unvested Restricted Stock Units vest on or before that date which is ninety (90) days after such termination of employment. Notwithstanding the foregoing, in the event of the Employee’s termination of employment following a change of control, Section 17(c) of the Plan applies. Notwithstanding the foregoing, if the Employee has in effect an employment agreement that requires that the Restricted Stock Units be treated differently than as described herein upon a specific type of termination, then the terms of the Employee’s employment agreement shall apply in lieu of the provisions hereof.
4.
Vesting of Restricted Stock Units.
Subject to Section 3, the Restricted Stock Units are subject to vesting at the rate of twenty-five percent (25%) of the total number of Restricted Stock Units subject to this Agreement on each of the first four anniversaries of the Grant Date, provided that the Employee has been continuously employed by the Company and/or its Affiliates from the Grant Date through each such anniversary of the Grant Date.
5.
Issuance of Shares
. As soon as practicable (but not more than thirty (30) days) after Restricted Stock Units vest under this Agreement (subject to any six-month delay to the extent required to comply with the provisions of Code Section 409A applicable to specified employees), the Company shall issue a number of shares of Common Stock to the Employee equal to the number of Restricted Stock Units that have vested. The Company shall issue a certificate or certificates evidencing such shares of Common Stock in the name of the Employee or shall make an appropriate book entry.
6.
Limitation of Rights
.
(a)
No Right to Continue as an Employee
. Neither the Plan nor the grant of the Restricted Stock Units shall constitute or be evidence of any agreement or understanding, express or implied, that the Employee has a right to continue as an employee of the Company or any of its subsidiaries for any period of time, or at any particular rate of compensation.
(b)
No Stockholder’s Rights as to Restricted Stock Units
. The Employee shall have no rights as a stockholder with respect to the shares of Common Stock subject to Restricted Stock Units granted hereunder until the date such shares are issued to the Employee, and no adjustment will be made for any dividends or other rights for which the record date is prior to the date of the vesting of the Restricted Stock Units. After Restricted Stock Units have vested, the Employee will be entitled to receive shares of Common Stock subject to the Restricted Stock Units that have vested and shall be entitled to receive a payment equal to any dividends or other rights for which the record date is on or after the vesting of the Restricted Stock Units.
(c)
Restrictions on Sales of Shares
. By accepting the grant of the Restricted Stock Units, the Employee agrees not to sell any shares of Common Stock acquired in connection with the Restricted Stock Units other than as set forth in the Plan and at a time when applicable laws, Company policies or an agreement between the Company and its underwriters do not prohibit a sale.
7.
Taxes
. The Employee (and not the Company or any Affiliate) shall be responsible for the Employee’s federal, state, local or foreign tax liability and any of the Employee’s other tax consequences that may arise as a result of the transactions contemplated by this Agreement. The
Employee shall rely solely on the determinations of the Employee’s own tax advisors or the Employee’s own determinations, and not on any statements or representations by the Company or any of its agents, with regard to all such tax matters. To the extent that the receipt, vesting or settlement of the Restricted Stock Units, or other event, results in income to the Employee for federal, state or local income tax purposes, the Employee shall deliver to the Company or its Affiliate at the time the Company or its Affiliate is obligated to withhold taxes in connection with such receipt, vesting, settlement or other event, as the case may be, such amount as the Company or its Affiliate requires to meet its withholding obligation under applicable tax laws or regulations, and if the Employee fails to do so, the Company shall not be obligated to deliver any shares of Common Stock to the Employee and shall have the right and authority to deduct or withhold from other compensation payable to the Employee an amount sufficient to satisfy its withholding obligations.
8.
Incorporation by Reference.
The terms of the Plan to the extent not stated herein are expressly incorporated herein by reference and in the event of any conflict between this Agreement and the Plan, the terms of the Plan shall govern, control and supersede over the provisions of this Agreement. Capitalized terms used in this Agreement and not defined shall have the meanings given in the Plan.
9.
Entire Agreement
. The Plan and this Agreement constitute the entire understanding of the parties with respect to the subject matter hereof and supersede in their entirety all prior undertakings and agreements of the Company and Employee with respect to the subject matter hereof. Employee expressly warrants that Employee is not accepting this Agreement in reliance on any promises, representations, or inducements other than those contained herein.
All of the terms and conditions of this Agreement are hereby confirmed, ratified, approved and accepted by the Company and by the Employee, who has accepted this Agreement and its terms pursuant to Employee’s electronic submission of Employee’s confirmation of this Agreement in accordance with the instructions contained on the online website maintained for the benefit of the Company for grants of restricted stock units by the Company.
Exhibit 4.5
HANGER, INC.
Non-Qualified Stock Option Agreement for Employees
THIS AGREEMENT (this “Agreement”) is made by and between HANGER, INC., a Delaware corporation (the “Company”), and the optionee (the “Optionee”) identified on the Company’s online electronic list of persons to whom an option has been granted by the Company.
W I T N E S S E T H
:
WHEREAS, the Company desires to grant to the Optionee a non-qualified stock option under the Company’s 2019 Omnibus Incentive Plan (the “Plan”) to purchase shares of the Company’s common stock, par value $.01 per share (the “Common Stock”), in consideration for the Optionee’s service to the Company.
NOW, THEREFORE, the parties hereto, intending to be legally bound, do agree as follows:
1.
Grant of Option
. Subject to the terms and conditions of this Agreement and the Plan, the Company hereby grants to the Optionee the right and option to purchase from the Company all or part of the number of shares of Common Stock as set forth on the Company’s online electronic list as being granted to the Optionee effective as of the date shown on the Company’s online electronic list as being the date of grant to the Optionee (the “Grant Date”). This option is not intended to constitute an incentive stock option within the meaning of Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”).
2.
Option Price and Time of Exercise
. The per-share purchase price at which the shares subject to option hereunder may be purchased by Optionee pursuant to the Optionee’s exercise of this option shall be the closing sale price per share of the Common Stock on the New York Stock Exchange on the date preceding the Grant Date. The Optionee’s right to exercise this option shall vest as to twenty-five percent (25%) of the shares of Common Stock underlying the option at the end of each of the first four years following the Grant Date. The right to exercise this option shall be cumulative to the extent not theretofore exercised. The option shall also vest at such times and in such amounts as is required by the terms of the Optionee’s employment agreement with the Company. The right to exercise the option shall in all events expire, except as provided in Paragraph 5 below, on the tenth anniversary of the Grant Date (the “Grant Expiration Date”).
3.
Method of Exercise and Payment for Shares
. This option shall be exercised by the methods set forth in the instructions relating thereto as contained on the Company’s online website from which the Optionee has received notice as to the grant of this option by the Company to the Optionee. No fractional shares of Common Stock shall be issued pursuant to the grant of this option, but in lieu therefore, the cash value of such fraction shall be paid.
4.
Option Non-Assignable and Non-Transferable
. This option and all rights hereunder shall be non-assignable and non-transferable other than by will or the laws of descent and distribution and shall be exercisable during the Optionee’s lifetime only by the Optionee or the Optionee’s guardian or legal representative.
5.
Termination of Employment
. In the event the Optionee dies before the expiration of this option, the Optionee’s estate, or the person or persons to whom the Optionee’s rights under this option shall pass by will or the laws of descent and distribution, may exercise this option, to the extent exercisable at the date of death, at any time within ninety (90) days following the Optionee’s death (but in any event before the Grant Expiration Date). In the event that the Optionee’s employment is terminated as a result of the Optionee’s permanent and total disability (as determined under the terms of the Company’s long term disability plan), the Optionee may exercise this option, to the extent exercisable on the date of such termination, at any time within ninety (90) days following such termination (but in any event before the Grant Expiration Date). In the event the Optionee ceases to be employed by the Company or an Affiliate by reason of termination of employment other than for Cause (as defined in the Plan), other than for permanent or total disability or other than for the voluntary termination of employment by the Optionee, the Optionee may exercise this option, to the extent exercisable on the date of such termination of employment, at any time within thirty (30) days following the date of such termination of employment (but in any event before the Grant Expiration Date), unless otherwise provided herein. For clarity, any portion of the option not vested as of the date of termination shall be forfeited. If the Optionee’s employment is otherwise terminated for Cause or by reason of the voluntary termination of employment by the Optionee, this option shall immediately terminate on the date of such termination of employment. Notwithstanding the foregoing, in the event of the Optionee’s termination of employment following a change of control, Section 17(c) of the Plan applies. Notwithstanding the foregoing, if the Optionee has in effect an employment agreement that requires that the option be treated differently than as described herein upon a specific type of termination, then the terms of the Optionee’s employment agreement shall apply in lieu of the provisions hereof.
6.
Limitation of Rights
.
(a)
No Right to Continue as an Employee
. Neither the Plan nor the grant of the option shall constitute or be evidence of any agreement or understanding, express or implied, that the Optionee has a right to continue as an employee of the Company or any of its Affiliates for any period of time, or at any particular rate of compensation.
(b)
No Stockholder’s Rights for Options
. The Optionee shall have no rights as a stockholder with respect to the shares covered by this option until the date of the issuance of a stock certificate therefor, and no adjustment will be made for any dividends or other rights for which the record date is prior to the date such certificate is issued.
(c)
Restrictions on Sales of Shares
. By accepting the grant of this option, the Optionee agrees not to sell any shares of Common Stock acquired upon exercise of this option other than as set forth in the Plan and at a time when applicable laws, Company policies or an agreement between the Company and its underwriters do not prohibit a sale.
7.
Taxes
. The Optionee (and not the Company or any Affiliate) shall be responsible for the Optionee’s federal, state, local or foreign tax liability and any of the Optionee’s other tax consequences that may arise as a result of the transactions contemplated by this Agreement. The
Optionee shall rely solely on the determinations of the Optionee’s own tax advisors or the Optionee’s own determinations, and not on any statements or representations by the Company or any of its agents, with regard to all such tax matters. To the extent that the receipt, vesting or exercise of this option, or other event, results in income to the Optionee for federal, state or local income tax purposes, the Optionee shall deliver to the Company or its Affiliate at the time the Company or its Affiliate is obligated to withhold taxes in connection with such receipt, vesting, exercise or other event, as the case may be, such amount as the Company or its Affiliate requires to meet its withholding obligation under applicable tax laws or regulations, and if the Optionee fails to do so, the Company shall not be obligated to deliver any shares of Common Stock to the Optionee and shall have the right and authority to deduct or withhold from other compensation payable to the Optionee an amount sufficient to satisfy its withholding obligations.
8.
Incorporation by Reference
. The terms of the Plan to the extent not stated herein are expressly incorporated herein by reference and in the event of any conflict between this Agreement and the Plan, the terms of the Plan shall govern, control and supersede over the provisions of this Agreement. Capitalized terms used in this Agreement and not defined shall have the meanings given in the Plan.
9.
Entire Agreement
. The Plan and this Agreement constitute the entire understanding of the parties with respect to the subject matter hereof and supersede in their entirety all prior undertakings and agreements of the Company and the Optionee with respect to the subject matter hereof. The Optionee expressly warrants that the Optionee is not accepting this Agreement in reliance on any promises, representations, or inducements other than those contained herein.
All of the terms and conditions of this Agreement are hereby confirmed, ratified, approved and accepted by the Company and by the Optionee, who has accepted this Agreement and its terms pursuant to the Optionee’s electronic submission of the Optionee’s confirmation of this Agreement in accordance with the online instructions relating thereto as set forth on the Company’s online website relating to options.
Exhibit 4.6
HANGER, INC.
Performance Share Unit and Restricted Stock Unit Agreement
THIS AGREEMENT (this “Agreement”) is made by and between HANGER, INC., a Delaware corporation (the “Company”), and (the “Employee”) this day of (the “Grant Date”).
W I T N E S S E T H
:
WHEREAS, the Company desires to award to the Employee restricted stock units relating to the Company’s common stock, par value $.01 per share (the “Common Stock”) and performance share units representing the potential to earn additional shares of Common Stock based on the achievement of certain performance criteria, under the Company’s 2019 Omnibus Incentive Plan (the “Plan”) in consideration for the Employee’s service to the Company and its Affiliates.
NOW, THEREFORE, the parties hereto, intending to be legally bound, do agree as follows:
1.
Awards
.
(a)
Awards of Time-Vesting Restricted Stock Units
. Subject to the terms and conditions of this Agreement and the Plan, the Employee is granted restricted stock units relating to shares of Common Stock (hereinafter such units are referred to as the “Time-Vesting Restricted Stock Units”).
(b)
Performance Share Units
. Subject to the terms and conditions of this Agreement and the Plan, the Employee is granted Performance Share Units relating to shares of Common Stock with the following terms and conditions as of the Grant Date:
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·
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Performance Period:
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[ ]
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·
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Performance Measure:
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[ ]
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·
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Performance Goal:
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You will be eligible to earn Performance Share Units (“Earned Performance Share Units”) based on the following achievement of the Performance Measure (with the percentage of shares earned calculated on a straight-line basis for results between the Threshold and Target, and between Target and Maximum results). Achievement of the Performance Goal and the number of Earned Performance Share Units shall be determined by the Committee.
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Result*
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Percent of Performance Share
Units Earned*
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Threshold
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25
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%
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Target
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100
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%
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Maximum
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150
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%
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*Performance results are determined to two decimal points. The number of Performance Shares Units earned will be rounded up to the nearest whole share.
After the Performance Period is complete, the Earned Performance Share Units will continue to be subject to the same vesting requirements and other terms and conditions as the Time-Vesting
Restricted Stock Units. Hereafter, any reference to Restricted Stock Units will include any Earned Performance Share Units as well as the Time-Vesting Restricted Stock Units.
2.
Restricted Stock Units Non-Assignable and Non-Transferable
. Each Restricted Stock Unit and all rights under this Agreement shall be non-assignable and non-transferable other than by will or the laws of descent and distribution in accordance with the Plan and may not be sold, pledged, hypothecated, assigned or transferred, except only as to such shares of Common Stock, if any, which have been issued in settlement of the Restricted Stock Units upon vesting pursuant to the terms of the Plan and this Agreement. The foregoing prohibition against transfer or assignment, together with the obligation to forfeit the Restricted Stock Units upon (i) termination of service with the Company and/or its Affiliates as set forth in Section 3 of this Agreement and/or (ii) a breach by Employee of the confidentiality provisions as set forth in Section 9 of this Agreement, are herein collectively referred to as the “Forfeiture Restrictions.” The Forfeiture Restrictions shall be binding upon and enforceable against any transferee of the Restricted Stock Units.
3.
Termination of Employment.
(a)
Performance Share Units
. If, prior to the end of the Performance Period, the Company or its Affiliate terminates the Employee’s employment or service without Cause (as defined in the Plan), or if the Employee’s employment or service terminates due to death or as a result of the Employee becoming totally and permanently disabled (within the meaning of Code Section 409A), then the Performance Share Units will immediately vest in full, calculated as if target performance had been met, and any Performance Shares Units eligible to be earned if above-target performance was met shall be forfeited. If the Employee’s employment terminates for any other reason prior to the end of the Performance Period, then all of the Performance Share Units will be forfeited. If termination occurs following the end of the Performance Period, the provisions of subsection (b) shall apply.
(b)
Restricted Stock Units
. In the event the Employee, while employed with the Company or its Affiliates, becomes totally and permanently disabled (within the meaning of Code Section 409A) or dies, each of the then unvested Restricted Stock Units will immediately vest in full as of the date of such total and permanent disability or death. In the event of the Employee’s termination of employment with the Company or its Affiliates for Cause (as defined in the Plan) or in the event of termination of employment by the Employee, any then unvested Restricted Stock Units shall be forfeited and cancelled as of the date of such termination of employment. In the event of the Employee’s termination of employment with the Company or its Affiliates other than by reason of total and permanent disability or death, termination for Cause, or termination of employment by the Employee, any then unvested Restricted Stock Units shall be forfeited and cancelled as of the date that is ninety (90) days after the date of such termination of employment unless such unvested Restricted Stock Units vest on or before that date which is ninety (90) days after such termination of employment. Notwithstanding the foregoing, in the event of the Employee’s termination of employment following a change of control, Section 17(c) of the Plan applies. Notwithstanding the foregoing, if the Employee has in effect an employment agreement that requires that the Restricted Stock Units be treated
2
differently than as described herein upon a specific type of termination, then the terms of the Employee’s employment agreement shall apply in lieu of the provisions hereof.
4.
Vesting of Restricted Stock Units.
Subject to Section 3, the Restricted Stock Units are subject to vesting at the rate of twenty-five percent (25%) of the total number of Restricted Stock Units subject to this Agreement on each of the first four anniversaries of the Grant Date, provided that the Employee has been continuously employed by the Company and/or its Affiliates from the Grant Date through each such anniversary of the Grant Date.
5.
Issuance of Shares.
As soon as practicable (but not more than thirty (30) days) after Restricted Stock Units vest under this Agreement (subject to any six-month delay to the extent required to comply with the provisions of Code Section 409A applicable to specified employees), the Company shall issue a number of shares of Common Stock to the Employee equal to the number of Restricted Stock Units that have vested. The Company shall issue a certificate or certificates evidencing such shares of Common Stock in the name of the Employee or shall make an appropriate book entry.
6.
Limitation of Rights
.
(a)
No Right to Continue as an Employee
. Neither the Plan nor the grant of the Restricted Stock Units shall constitute or be evidence of any agreement or understanding, express or implied, that the Employee has a right to continue as an employee of the Company or any of its Affiliates for any period of time, or at any particular rate of compensation.
(b)
No Stockholder’s Rights as to Restricted Stock Units
. The Employee shall have no rights as a stockholder with respect to the shares of Common Stock subject to Restricted Stock Units granted hereunder until the date such shares are issued to the Employee, and no adjustment will be made for any dividends or other rights for which the record date is prior to the date of the vesting of the Restricted Stock Units. After Restricted Stock Units have vested, the Employee will be entitled to receive shares of Common Stock subject to the Restricted Stock Units that have vested and shall be entitled to receive a payment equal to any dividends or other rights for which the record date is on or after the vesting of the Restricted Stock Units.
(c)
Restrictions on Sales of Shares
. By accepting the grant of the Restricted Stock Units, the Employee agrees not to sell any shares of Common Stock acquired in connection with the Restricted Stock Units other than as set forth in the Plan and at a time when applicable laws, Company policies or an agreement between the Company and its underwriters do not prohibit a sale.
7.
Taxes.
The Employee (and not the Company or any Affiliate) shall be responsible for the Employee’s federal, state, local or foreign tax liability and any of the Employee’s other tax consequences that may arise as a result of the transactions contemplated by this Agreement. The Employee shall rely solely on the determinations of the Employee’s own tax advisors or the Employee’s own determinations, and not on any statements or representations by the Company or any of its agents, with regard to all such tax matters. To the extent that the receipt, vesting or settlement of the Restricted Stock Units, or other event, results in income to the Employee for federal, state or local income tax purposes, the Employee shall deliver to the
3
Company or its Affiliate at the time the Company or its Affiliate is obligated to withhold taxes in connection with such receipt, vesting, settlement or other event, as the case may be, such amount as the Company or its Affiliate requires to meet its withholding obligation under applicable tax laws or regulations,
and if the Employee fails to do so, the Company shall not be obligated to deliver any shares of Common Stock to the Employee and shall have the right and authority to deduct or withhold from other compensation payable to the Employee an amount sufficient to satisfy its withholding obligations.
8.
Incorporation by Reference.
The terms of the Plan to the extent not stated herein are expressly incorporated herein by reference and in the event of any conflict between this Agreement and the Plan, the terms of the Plan shall govern, control and supersede over the provisions of this Agreement. Capitalized terms used in this Agreement and not defined shall have the meanings given in the Plan.
9.
Confidentiality.
(a)
Acknowledgment of Confidentiality
. The Employee acknowledges that the information, observations, data, and Trade Secrets, including, without limitation, protected health information, as defined by the Health Insurance Portability and Accountability Act of 1996, as amended (“PHI”) (collectively, “Confidential Information”) concerning the business or affairs of the Company to be obtained by the Employee during the course of his or her employment with the Company and its Affiliates are the property of the Company. The Employee agrees that the Employee will not disclose to any unauthorized person or entity or use for the Employee’s own account any of such Confidential Information without the written consent of the Chairman or President of the Company, unless and to the extent that the aforementioned matters become generally known to and available for use by the public other than as a result of the Employee’s acts or omissions to act or become known to the Employee lawfully outside the scope of the Employee’s employment with the Company or its Affiliates. The Employee agrees to preserve for the Company’s exclusive use and deliver to the Company at the termination of the Employee’s employment, or at any other time the Company may request, all equipment and property of the Company and its Affiliates, including PHI (including, without limitation, tools, computers, mobile communication devices, and furniture) and all memoranda, data, notes, plans, records, reports, and other documents, whether in electronic, written, or other form (and copies thereof), relating to the business of the Company or its Affiliates which the Employee may then possess or have under the Employee’s control. Following the delivery of all such items to the Company, the Employee shall delete all remaining copies or images of such items from every mode of storage media, including cloud storage, with respect to which the Employee has access or control. “Trade Secret” shall mean information, including a formula, pattern, compilation, program, device, method, technique, process, financial data, or list of actual or potential customers or suppliers that (i) derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use, and (ii) is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.
4
(b)
Limits on Confidentiality Requirements
.
i. Nothing in this Agreement is intended to discourage or restrict the Employee from communicating with, or making a report with, any governmental authority regarding a good faith belief of any violations of law or regulations based on information that the Employee acquired through lawful means in the course of the Employee’s employment, including such disclosures protected or required by any whistleblower law or regulation of the Securities and Exchange Commission, the Department of Labor, or any other appropriate governmental authority.
ii. Nothing in this Agreement is intended to discourage or restrict The Employee from reporting any theft of Trade Secrets pursuant to the Defend Trade Secrets Act of 2016 (the “DTSA”) or other applicable state or federal law. The DTSA prohibits retaliation against an employee because of whistleblower activity in connection with the disclosure of Trade Secrets, so long as any such disclosure is made either (I) in confidence to an attorney or a federal, state, or local government official and solely to report or investigate a suspected violation of the law, or (II) under seal in a complaint or other document filed in a lawsuit or other proceeding.
If the Employee believes that any employee or any third party has misappropriated or improperly used or disclosed Trade Secrets or Confidential Information, the Employee should report such activity through the Company’s Open Door Policy (as provided in the Employee Handbook) or Compliance Hotline. This Agreement is in addition to and not in lieu of any obligations to protect the Company’s Trade Secrets and Confidential Information pursuant to any employment agreement, non-compete agreement, non-solicitation agreement, confidentiality agreement, the Employee Handbook, and the Code of Business Conduct and Ethics for Directors and Employees. Nothing in this Agreement shall limit, curtail, or diminish the Company’s or its Affiliates’ statutory rights under the DTSA, any applicable state law regarding trade secrets or common law.
10.
Entire Agreement
. The Plan and this Agreement constitute the entire understanding of the parties with respect to the subject matter hereof and supersede in their entirety all prior undertakings and agreements of the Company and Employee with respect to the subject matter hereof. Employee expressly warrants that Employee is not accepting this Agreement in reliance on any promises, representations, or inducements other than those contained herein.
BY SIGNING BELOW AND ACCEPTING THIS AGREEMENT, YOU AGREE TO ALL OF THE TERMS AND CONDITIONS DESCRIBED HEREIN AND IN THE PLAN.
HANGER, INC.
5
Exhibit 4.7
HANGER, INC.
Restricted Stock Unit Agreement for Non-Employee Directors
THIS AGREEMENT (this “Agreement”) is made by and between HANGER, INC., a Delaware corporation (the “Company”), and the non-employee director (the “Non-Employee Director”) identified on the Company’s online electronic list of persons to whom a grant of restricted stock units has been made by the Company.
W I T N E S S E T H
:
WHEREAS, the Company desires to award to the Non-Employee Director restricted stock units relating to the Company’s common stock, par value $.01 per share (the “Common Stock”), under the Company’s 2019 Omnibus Incentive Plan (the “Plan”) in consideration for the Non-Employee Director’s service as a member of the Board of Directors of the Company (the “Board”).
NOW, THEREFORE, the parties hereto, intending to be legally bound, do agree as follows:
1.
Award of Restricted Stock Units
.
Subject to the terms and conditions of this Agreement and the Plan, the Non-Employee Director is granted restricted stock units relating to the number of shares of Common Stock as set forth on the Company’s online electronic list as being granted to the Employee (hereinafter such units are referred to as the “Restricted Stock Units”) as of the date shown on the Company’s online electronic list as being the date of grant to the Non-Employee Director (the “Grant Date”).
2.
Restricted Stock Units Non-Assignable and Non-Transferable
. Each Restricted Stock Unit and all rights under this Agreement shall be non-assignable and non-transferable other than by will or the laws of descent and distribution in accordance with the Plan and may not be sold, pledged, hypothecated, assigned or transferred, except only as to such shares of Common Stock, if any, which have been issued in settlement of the Restricted Stock Units upon vesting pursuant to the terms of the Plan and this Agreement. The foregoing prohibition against transfer or assignment, together with the obligation to forfeit the Restricted Stock Units upon termination of service on the Board as set forth in Section 3 of this Agreement, are herein collectively referred to as the “Forfeiture Restrictions.” The Forfeiture Restrictions shall be binding upon and enforceable against any transferee of the Restricted Stock Units.
3.
Termination of Membership on the Board of Directors.
In the event of termination of the Non-Employee Director’s membership on the Board by reason of total and permanent disability (within the meaning of Code Section 409A), death or Retirement, each of the then unvested Restricted Stock Units will immediately vest in full as of the date of such termination. “Retirement” means the Non-Employee Director’s termination of service on the Board after having served continuously as a director for at least five (5) years and after having given the Company written notice of the director’s intent to retire no less than one (1) year prior to the date of such termination. In the event of the termination of the Non-Employee Director’s membership on the Board other than by reason of total and permanent disability, death or Retirement, any then unvested Restricted Stock Units shall be forfeited and cancelled as of the date which is ninety (90) days after such date of termination of service unless such unvested
Restricted Stock Units vest on or before that date which is ninety (90) days after such termination of service. Notwithstanding the foregoing, in the event the Non-Employee Director’s membership on the Board terminates following a change of control, Section 17(c) of the Plan applies.
4.
Lapse of Forfeiture Restrictions.
Subject to Section 3, the Restricted Stock Units will vest in full on the first anniversary of the Grant Date, provided that the Non-Employee Director has continuously served on the Board from the Grant Date through such anniversary of the Grant Date.
5.
Issuance of Shares
. As soon as practicable (but not more than thirty (30) days) after Restricted Stock Units vest under this Agreement, the Company shall issue a number of shares of Common Stock to the Non-Employee Director equal to the number of Restricted Stock Units that have vested. For the avoidance of doubt, in the case of Retirement, the Restricted Stock Units shall be deemed to vest for purposes of this Section 5 when the risk of forfeiture lapses, even if Retirement does not occur until a later date. The Company shall issue a certificate or certificates evidencing such shares of Common Stock in the name of the Non-Employee Director or shall make an appropriate book entry.
6.
Limitation of Rights
.
(a)
No Right to Continue as a Director
. Neither the Plan nor the grant of the Restricted Stock Units shall constitute or be evidence of any agreement or understanding, express or implied, that the Non-Employee Director has a right to continue as a member of the Board for any period of time, or at any particular rate of compensation.
(b)
No Stockholder’s Rights as to Restricted Stock Units
. The Non-Employee Director shall have no rights as a stockholder with respect to the shares of Common Stock subject to Restricted Stock Units granted hereunder until the date such shares are issued to the Non-Employee Director, and no adjustment will be made for any dividends or other rights for which the record date is prior to the date of the vesting of the Restricted Stock Units. After Restricted Stock Units have vested, the Non-Employee Director will be entitled to receive shares of Common Stock subject to the Restricted Stock Units that have vested and shall be entitled to receive a payment equal to any dividends or other rights for which the record date is on or after the vesting of the Restricted Stock Units.
(c)
Restrictions on Sales of Shares
. By accepting the grant of the Restricted Stock Units, the Non-Employee Director agrees not to sell any shares of Common Stock acquired in connection with the Restricted Stock Units other than as set forth in the Plan and at a time when applicable laws, Company policies or an agreement between the Company and its underwriters do not prohibit a sale.
7.
Taxes
. The Non-Employee Director (and not the Company or any Affiliate) shall be responsible for the Non-Employee Director’s federal, state, local or foreign tax liability and any of the Non-Employee Director’s other tax consequences that may arise as a result of the transactions contemplated by this Agreement. The Non-Employee Director shall rely solely on the determinations of the Non-Employee Director’s own tax advisors or the Non-Employee Director’s own determinations, and not on any statements or representations by the Company or
any of its agents, with regard to all such tax matters.
8.
Incorporation by Reference.
The terms of the Plan to the extent not stated herein are expressly incorporated herein by reference and in the event of any conflict between this Agreement and the Plan, the terms of the Plan shall govern, control and supersede over the provisions of this Agreement. Capitalized terms used in this Agreement and not defined shall have the meanings given in the Plan.
9.
Entire Agreement
. The Plan and this Agreement constitute the entire understanding of the parties with respect to the subject matter hereof and supersede in their entirety all prior undertakings and agreements of the Company and the Non-Employee Director with respect to the subject matter hereof. The Non-Employee Director expressly warrants that the Non-Employee Director is not accepting this Agreement in reliance on any promises, representations, or inducements other than those contained herein.
All of the terms and conditions of this Agreement are hereby confirmed, ratified, approved and accepted by the Company and by the Non-Employee Director, who has accepted this Agreement and its terms pursuant to the Non-Employee Director’s electronic submission of the Non-Employee Director’s confirmation of this Agreement in accordance with the instructions contained on the online website maintained for the benefit of the Company for grants of restricted stock units by the Company.
Exhibit 4.8
HANGER, INC.
Non-Employee Director Non-Qualified Stock Option Agreement
THIS AGREEMENT (this “Agreement”) is made by and between HANGER, INC., a Delaware corporation (the “Company”), and the optionee (the “Optionee”) identified on the Company’s online electronic list of persons to whom an option has been granted by the Company.
W I T N E S S E T H
:
WHEREAS, the Company desires to grant to the Optionee a stock option under the Company’s 2019 Omnibus Incentive Plan (the “Plan”) to purchase shares of the Company’s common stock, par value $.01 per share (the “Common Stock”), in consideration for the Optionee’s service as a member of the Board of Directors of the Company (the “Board”).
NOW, THEREFORE, the parties hereto, intending to be legally bound, do agree as follows:
1.
Grant of Option
. Subject to the terms and conditions of this Agreement and the Plan, the Company hereby grants to the Optionee the right and option to purchase from the Company all or part of the number of shares of Common Stock as set forth on the Company’s online electronic list as being granted to the Optionee effective as of the date shown on the Company’s online electronic list as being the date of grant to the Optionee (the “Grant Date”). This option is not intended to qualify as an incentive stock option within the meaning of Section 422 of the Internal Revenue Code of 1986, as amended.
2.
Option Price and Time of Exercise
. The per-share purchase price at which the shares subject to option may be purchased by the Optionee pursuant to the exercise of this option shall be the closing sale price per share of the Common Stock on the New York Stock Exchange on the date preceding the Grant Date. Notwithstanding any provisions of the Plan to the contrary, the Optionee and the Company agree that the Optionee’s right to exercise this option shall vest as to one-third (1/3) of the shares of Common Stock underlying the option at the end of each of the first three (3) years following the Grant Date. The right to exercise the option shall be cumulative to the extent not theretofore exercised. The right to exercise the option shall in all events expire, except as provided in Paragraph 5 below, on the tenth anniversary of the Grant Date (the “Grant Expiration Date”).
3.
Method of Exercise and Payment for Shares
. This option shall be exercised by the methods set forth in the instructions relating thereto as contained on the Company’s online website from which the Optionee has received notice as to the grant of this option by the Company to the Optionee. No fractional shares of Common Stock shall be issued pursuant to the grant of this option, but in lieu thereof, the cash value of such fraction shall be paid.
4.
Option Non-Assignable and Non-Transferable
. This option and all rights hereunder shall be non-assignable and non-transferable other than by will or the laws of descent and distribution and shall be exercisable during the Optionee’s lifetime only by the Optionee or the Optionee’s guardian or legal representative.
5.
Exercise After Termination of Membership on the Board of Directors.
In the event of termination of the Optionee’s membership on the Board by reason of total and permanent disability [or Retirement], this option will immediately vest and become exercisable in full at any time within one year after such disability, but in no event after the Grant Expiration Date. [“Retirement” means the Non-Employee Director’s termination of service on the Board after having served continuously as a director for at least five (5) years and after having given the Company written notice of the director’s intent to retire no less than one (1) year prior to the date of such termination.] In the event of termination of the Optionee’s membership on the Board by reason of the death of the Optionee, the option shall immediately vest and become exercisable in full by the Optionee’s estate, or the person or persons to whom the Optionee’s rights under this option shall pass by will or the laws of descent and distribution, at any time within one year after death, but in no event after the Grant Expiration Date. In the event of the termination of the Optionee’s membership on the Board other than by reason of total and permanent disability[, Retirement] or death, this option will be exercisable, to the extent exercisable on the date of such termination, at any time within ninety (90) days after such termination, but in no event after the Grant Expiration Date. For clarity, any portion of the option not vested as of the date of termination shall be forfeited. Notwithstanding the foregoing, in the event the Optionee’s membership on the Board terminates following a change of control, Section 17(c) of the Plan applies.
6.
Limitation of Rights
.
(a)
No Right to Continue as a Director
. Neither the Plan nor this option shall constitute or be evidence of any agreement or understanding, express or implied, that the Optionee has a right to continue as a member of the Company’s Board for any period of time, or at any particular rate of compensation.
(b)
No Stockholder’s Rights for Options
. The Optionee shall have no rights as a stockholder with respect to the shares covered by this option until the date of the issuance of a stock certificate therefor, and no adjustment will be made for any dividends or other rights for which the record date is prior to the date such certificate is issued.
(c)
Restrictions on Sales of Shares
. By accepting the grant of this option, the Optionee agrees not to sell any shares of Common Stock acquired upon exercise of this option other than as set forth in the Plan and at a time when applicable laws, Company policies or an agreement between the Company and its underwriters do not prohibit a sale.
7.
Taxes
. The Optionee (and not the Company or any Affiliate) shall be responsible for the Optionee’s federal, state, local or foreign tax liability and any of the Optionee’s other tax consequences that may arise as a result of the transactions contemplated by this Agreement. The Optionee shall rely solely on the determinations of the Optionee’s own tax advisors or the Optionee’s own determinations, and not on any statements or representations by the Company or any of its agents, with regard to all such tax matters.
8.
Incorporation by Reference
. The terms of the Plan to the extent not stated herein are expressly incorporated herein by reference and in the event of any conflict between this
Agreement and the Plan, the terms of the Plan shall govern, control and supersede over the provisions of this Agreement. Capitalized terms used in this Agreement and not defined shall have the meanings given in the Plan.
9.
Entire Agreement
. The Plan and this Agreement constitute the entire understanding of the parties with respect to the subject matter hereof and supersede in their entirety all prior undertakings and agreements of the Company and the Optionee with respect to the subject matter hereof. The Optionee expressly warrants that the Optionee is not accepting this Agreement in reliance on any promises, representations, or inducements other than those contained herein.
All of the terms and conditions of this Agreement are hereby confirmed, ratified, approved and accepted by the Company and by the Optionee, who has accepted this Agreement and its terms pursuant to the Optionee’s electronic submission of the Optionee’s confirmation of this Agreement in accordance with the online instructions relating thereto as set forth on the Company’s online website relating to options.
