EXHIBIT 99.2
INVITROGEN CORPORATION
RESTRICTED STOCK AGREEMENT
Invitrogen Corporation (the "COMPANY") has granted to Xxxxxxx X. Xxxxxx
(the "PARTICIPANT") an Award consisting of Shares subject to the terms and
conditions set forth in this Restricted Stock Agreement (the "AGREEMENT"). The
Award has been granted pursuant to the employment agreement entered into between
the Company and the Participant and as an essential and material inducement to
the Participant accepting employment with the Company. By signing this
Agreement, the Participant: (a) represents that the Participant has read and is
familiar with the terms and conditions of the Award and this Agreement, (b)
accepts the Award subject to all of the terms and conditions of this Agreement,
(c) agrees to accept as binding, conclusive and final all decisions or
interpretations of the Board upon any questions arising under this Agreement,
and (d) acknowledges receipt of a copy of this Agreement.
1. DEFINITIONS AND CONSTRUCTION.
1.1 DEFINITIONS. Whenever used herein, the following terms shall
have their respective meanings set forth below:
(a) "DATE OF GRANT" the Employment Date, as defined in the
Employment Agreement.
(b) "AWARD" means a total of 75,000 shares of Stock granted to
the Participant pursuant to the terms and conditions of this Agreement.
(c) "BOARD" means the Board of Directors of the Company. If
one or more Committees have been appointed by the Board to administer this
Agreement, "BOARD" also means such Committee(s).
(d) "CAUSE" shall have the meaning ascribed thereto under the
Employment Agreement, and its existence shall be determined consistent with any
such determination made thereunder.
(e) "CHANGE-IN-CONTROL AGREEMENT" means the Change-in-Control
Agreement entered into between the Company and the Participant dated as of May
26, 2003.
(f) "CODE" means the Internal Revenue Code of 1986, as
amended, and any applicable regulations promulgated thereunder.
(g) "COMMITTEE" means the Compensation and Organization
Committee or other committee of the Board duly appointed to administer the
Agreement and having such powers as shall be specified by the Board. If no
committee of the Board has been appointed to administer the Agreement, the Board
shall exercise all of the powers of the Committee granted herein, and, in any
event, the Board may in its discretion exercise any or all of such powers.
(h) "COMPANY" means Invitrogen Corporation, a Delaware
corporation, or any successor corporation thereto.
(i) "EMPLOYMENT AGREEMENT" means that certain employment
agreement entered into by and between the Company and the Participant dated as
of May 26, 2003, and made a part hereof.
(j) "EXCHANGE ACT" means the Securities Exchange Act of 1934,
as amended.
(k) "FAIR MARKET VALUE" means, as of any date, the value of a
share of Stock or other property as determined by the Board, in its discretion,
or by the Company, in its discretion, if such determination is expressly
allocated to the Company herein, subject to the following:
(i) If, on such date, the Stock is listed on a national
or regional securities exchange or market system, the Fair Market Value of a
share of Stock shall be the closing price of a share of Stock (or the mean of
the closing bid and asked prices of a share of Stock if the Stock is so quoted
instead) as quoted on the Nasdaq National Market, The Nasdaq SmallCap Market or
such other national or regional securities exchange or market system
constituting the primary market for the Stock, as reported in The Wall Street
Journal or such other source as the Company deems reliable. If the relevant date
does not fall on a day on which the Stock has traded on such securities exchange
or market system, the date on which the Fair Market Value shall be established
shall be the last day on which the Stock was so traded prior to the relevant
date, or such other appropriate day as shall be determined by the Board, in its
discretion.
(ii) If, on such date, the Stock is not listed on a
national or regional securities exchange or market system, the Fair Market Value
of a share of Stock shall be as determined by the Board in good faith without
regard to any restriction other than a restriction which, by its terms, will
never lapse.
(l) "GOOD REASON" shall have the meaning ascribed thereto
under the Employment Agreement.
(m) "PARENT CORPORATION" means any present or future "parent
corporation" of the Company, as defined in Section 424(e) of the Code.
(n) "PARTICIPANT" means Xxxxxxx X. Xxxxxx.
(o) "PARTICIPATING COMPANY" means the Company or any Parent
Corporation or Subsidiary Corporation.
(p) "PARTICIPATING COMPANY GROUP" means, at any point in time,
all corporations collectively which are then Participating Companies.
-2-
(q) "RESTRICTION PERIOD" means the period established in
accordance with Section 3 during which shares subject the Award are subject to
Vesting Conditions.
(r) "SECURITIES ACT" means the Securities Act of 1933, as
amended.
(s) "SERVICE" means the Participant's employment or service
with the Participating Company Group, whether in the capacity of an Employee, a
director or a consultant. The Participant's Service shall not be deemed to have
terminated merely because of a change in the capacity in which the Participant
renders service to the Participating Company Group or change in the
Participating Company for which the Participant renders Service, provided that
there is no interruption or termination of the Participant's Service.
Furthermore, the Participant's Service with the Participating Company Group
shall not be deemed to have terminated if the Participant takes any military
leave, sick leave, or other bona fide leave of absence approved by the Company.
The Participant's Service shall be deemed to have terminated either upon an
actual termination of Service or upon the corporation for which the Participant
performs Service ceasing to be a Participating Company. Subject to the
foregoing, the Company, in its sole discretion, shall determine whether the
Participant's Service has terminated and the effective date of such termination.
(t) "SHARES" means the shares of Stock granted pursuant to
this Agreement and such other or additional securities or property to which the
Participant may become entitled pursuant to Section 7.
(u) "STOCK" means the common stock of the Company, as adjusted
from time to time in accordance with Section 4.2.
(v) "SUBSIDIARY CORPORATION" means any present or future
"subsidiary corporation" of the Company, as defined in Section 424(f) of the
Code.
(w) "VESTING CONDITIONS" mean those conditions established in
accordance with Section 3 of this Agreement prior to the satisfaction of which
shares subject to the Award remain subject to forfeiture or a repurchase option
in favor of the Company.
1.2 CONSTRUCTION. Captions and titles contained herein are for
convenience only and shall not affect the meaning or interpretation of any
provision of this Agreement. Except when otherwise indicated by the context, the
singular shall include the plural and the plural shall include the singular. Use
of the term "or" is not intended to be exclusive, unless the context clearly
requires otherwise.
2. THE AWARD.
2.1 GRANT AND ISSUANCE OF SHARES. On the Date of Grant, the
Participant will acquire and the Company will issue, subject to the provisions
of this Agreement, a number of Shares equal to the Award provided by this
Agreement. As a condition to the issuance of the Shares, the Participant shall
execute and deliver to the Company along with this Agreement (a) the Joint
Escrow Instructions in the form attached to this Agreement and (b) the
Assignment
-3-
Separate from Certificate duly endorsed (with date and number of shares blank)
in the form attached to this Agreement.
2.2 NO MONETARY PAYMENT REQUIRED. The Participant is not required to
make any monetary payment (other than applicable tax withholding, if any) as a
condition to receiving the Shares, the consideration for which shall be past
services actually rendered and/or future services to be rendered to the Company
or for its benefit.
2.3 CERTIFICATE REGISTRATION. The certificate for the Shares shall
be registered in the name of the Participant, or, if applicable, in the names of
the heirs of the Participant.
2.4 ISSUANCE OF SHARES IN COMPLIANCE WITH LAW. The issuance of the
Shares shall be subject to compliance with all applicable requirements of
federal, state or foreign law with respect to such securities. No Shares shall
be issued hereunder if their issuance would constitute a violation of any
applicable federal, state or foreign securities laws or other law or regulations
or the requirements of any stock exchange or market system upon which the Stock
may then be listed. The inability of the Company to obtain from any regulatory
body having jurisdiction the authority, if any, deemed by the Company's legal
counsel to be necessary to the lawful issuance of any Shares shall relieve the
Company of any liability in respect of the failure to issue such Shares as to
which such requisite authority shall not have been obtained. As a condition to
the issuance of the Shares, the Company may require the Participant to satisfy
any qualifications that may be necessary or appropriate, to evidence compliance
with any applicable law or regulation and to make any representation or warranty
with respect thereto as may be requested by the Company. Within 90 days after
the Date of Grant, the Company shall register under the Securities Act of 1933
and other applicable laws the Shares granted under this Award for reoffer and
resale by the Participant on a Form X-0, Xxxx X-0 or other appropriate
registration statement which shall remain effective for so long as the
Participant shall own the Shares.
3. VESTING CONDITIONS.
3.1 VESTING SCHEDULE. Fifty percent (50%) of the Shares granted
under this Award shall vest on the second anniversary of the Date of Grant,
provided that the Participant's Service to the Participating Company Group has
not terminated prior to such date. The remaining fifty percent (50%) of the
Shares granted under this Award shall vest on the fourth anniversary of the Date
of Grant, provided that as of that date the Participant has not terminated
Service with the Participating Company Group. Except as provided in Section 3.2,
no additional Shares will become vested following the Participant's termination
of Service for any reason.
3.2 ACCELERATION OF VESTING.
(a) DEATH OR DISABILITY. If the Participant's Service with the
Participating Company Group is terminated because of the Disability or death of
the Participant, a number of the Shares granted under this Award shall vest,
upon such termination of Service, equal to the number of Shares that would have
become vested had the Participant's Service continued for an additional twelve
(12) months. The Participant's Service shall be deemed to
-4-
have terminated on account of death if the Participant dies within three (3)
months after the Participant's termination of Service other than upon a
termination for "Cause".
(b) TERMINATION WITHOUT CAUSE OR WITH GOOD REASON. If the
Participant's Service with the Participating Company Group is terminated by the
Participating Company Group without Cause or by the Participant with Good
Reason, a number of the Shares granted under this Award shall vest, upon such
termination of Service, equal to the number of Shares that would have become
vested had the Participant's Service continued for an additional eighteen (18)
months.
3.3 EFFECT OF VESTING. Shares that are not vested ("UNVESTED
SHARES") shall be subject to the reacquisition rights set forth in Section 4.1
below.
4. COMPANY REACQUISITION RIGHT.
4.1 GRANT OF COMPANY REACQUISITION RIGHT. In the event that (a) the
Participant's Service terminates for any reason or no reason, with or without
Cause, or (b) the Participant, the Participant's legal representative, or other
holder of the Shares, attempts to sell, exchange, transfer, pledge, or otherwise
dispose of (other than pursuant to a "Change in Control" as defined in the
Change-in-Control Agreement (hereinafter a "CHANGE IN CONTROL")), including,
without limitation, any transfer to a nominee or agent of the Participant, any
Unvested Shares, the Company shall automatically reacquire the Unvested Shares,
and the Participant shall not be entitled to any payment therefor (the "COMPANY
REACQUISITION RIGHT"). For purposes of this Section, Unvested Shares shall be
determined after giving effect to the provisions of Section 3.2.
4.2 CHANGE IN CONTROL. Upon the occurrence of a Change in Control,
any and all new, substituted or additional securities or other property to which
the Participant is entitled by reason of the Participant's ownership of Unvested
Shares shall be immediately subject to the Company Reacquisition Right and
included in the terms "Shares," "Stock," and "Unvested Shares" for all purposes
of the Company Reacquisition Right with the same force and effect as the
Unvested Shares immediately prior to the Change in Control.
5. TAX MATTERS.
5.1 TAX WITHHOLDING. At the time this Agreement is executed, or at
any time thereafter as requested by the Company, the Participant hereby
authorizes withholding from any amounts payable to the Participant, and
otherwise agrees to make adequate provision for, any sums required to satisfy
the federal, state, local and foreign tax withholding obligations of the
Company, if any, which arise in connection with the Award, including, without
limitation, obligations arising upon (a) the transfer of Shares to the
Participant, (b) the lapsing of any Vesting Conditions with respect to any
Shares, (c) the filing of an election to recognize tax liability, or (d) the
transfer by the Participant of any Shares. Except as provided below, the Company
shall have no obligation to deliver the Shares or to release any Shares from an
escrow established pursuant to this Agreement until the tax withholding
obligations of the Company have been satisfied by the Participant. The
Participant shall have the right to satisfy, in whole or in part, any
withholding tax obligation which may arise in connection with the Award by
electing
-5-
to have the Company withhold from the Shares to be delivered to the Participant
on the Date of Grant or withdraw Shares from any escrow established pursuant to
this Agreement, or by delivering to the Company already-owned shares of Stock,
in either case having a Fair Market Value equal to the amount necessary to
satisfy the statutory minimum withholding amount due.
5.2 ELECTION UNDER SECTION 83(B) OF THE CODE.
(a) The Participant understands that Section 83 of the Code
taxes as ordinary income the difference between the amount paid for the Shares,
if anything, and the Fair Market Value of the Shares as of the date on which the
Shares are "substantially vested," within the meaning of Section 83. In this
context, "substantially vested" means that the right of the Company to reacquire
the Shares pursuant to the Company Reacquisition Right has lapsed. The
Participant understands that he or she may elect to have his or her taxable
income determined at the time he or she acquires the Shares rather than when and
as the Company Reacquisition Right lapses by filing an election under Section
83(b) of the Code with the Internal Revenue Service no later than thirty (30)
days after the date of acquisition of the Shares. The Participant understands
that failure to make a timely filing under Section 83(b) will result in his or
her recognition of ordinary income, as the Company Reacquisition Right lapses,
on the difference between the purchase price, if anything, and the Fair Market
Value of the Shares at the time such restrictions lapse. The Participant further
understands, however, that if Shares with respect to which an election under
Section 83(b) has been made are forfeited to the Company pursuant to its Company
Reacquisition Right, such forfeiture will be treated as a sale on which there is
realized a loss equal to the excess (if any) of the amount paid (if any) by the
Participant for the forfeited Shares over the amount realized (if any) upon
their forfeiture. If the Participant has paid nothing for the forfeited Shares
and has received no payment upon their forfeiture, the Participant understands
that he or she will be unable to recognize any loss on the forfeiture of the
Shares even though the Participant incurred a tax liability by making an
election under Section 83(b).
(b) The Participant understands that he or she should consult
with his or her tax advisor regarding the advisability of filing with the
Internal Revenue Service an election under Section 83(b) of the Code, which must
be filed no later than thirty (30) days after the date of the acquisition of the
Shares pursuant to this Agreement. Failure to file an election under Section
83(b), if appropriate, may result in adverse tax consequences to the
Participant. The Participant acknowledges that he or she has been advised to
consult with a tax advisor regarding the tax consequences to the Participant of
the acquisition of Shares hereunder. ANY ELECTION UNDER SECTION 83(b) THE
PARTICIPANT WISHES TO MAKE MUST BE FILED NO LATER THAN 30 DAYS AFTER THE DATE ON
WHICH THE PARTICIPANT ACQUIRES THE SHARES. THIS TIME PERIOD CANNOT BE EXTENDED.
THE PARTICIPANT ACKNOWLEDGES THAT TIMELY FILING OF A SECTION 83(b) ELECTION IS
THE PARTICIPANT'S SOLE RESPONSIBILITY, EVEN IF THE PARTICIPANT REQUESTS THE
COMPANY OR ITS REPRESENTATIVE TO FILE SUCH ELECTION ON HIS OR HER BEHALF.
(c) The Participant will notify the Company in writing if the
Participant files an election pursuant to Section 83(b) of the Code. The Company
intends, in the event it does not receive from the Participant evidence of such
filing, to claim a tax deduction for
-6-
any amount which would otherwise be taxable to the Participant in the absence of
such an election.
6. ESCROW.
6.1 ESTABLISHMENT OF ESCROW. To ensure that Shares subject to the
Company Reacquisition Right will be available for reacquisition, the Participant
agrees to deliver to and deposit with an escrow agent designated by the Company
the certificate evidencing the Shares, together with an Assignment Separate from
Certificate with respect to such certificate duly endorsed (with date and number
of shares blank) in the form attached to this Agreement, to be held by the agent
under the terms and conditions of the Joint Escrow Instructions in the form
attached to this Agreement (the "ESCROW"). The Company shall bear the expenses
of the Escrow.
6.2 DELIVERY OF SHARES TO PARTICIPANT. As soon as practicable after
the expiration of the Company's Reacquisition Right, the Company shall give to
the escrow agent a written notice directing the escrow agent to deliver such
Shares to the Participant. As soon as practicable after receipt of such notice,
the escrow agent shall deliver to the Participant the Shares specified in such
notice, and the Escrow shall terminate with respect to such Shares.
7. ADJUSTMENTS FOR CHANGES IN CAPITAL STRUCTURE.
In the event of any stock dividend, stock split, reverse stock
split, recapitalization, merger, combination, exchange of shares,
reclassification, or similar change in the capital structure of the Company,
appropriate adjustments shall be made in the number and class of shares subject
to this Agreement. Any and all new, substituted or additional securities or
other property to which Participant is entitled by reason of his or her
ownership of the Shares will be immediately subject to the provisions of this
Agreement and the Escrow on the same basis as all Shares originally acquired
hereunder and will be included in the terms "Shares" and "Stock" for all
purposes of this Agreement and the Escrow with the same force and effect as the
Shares presently subject thereto. The adjustments determined by the Board
pursuant to this Section 7 shall be final, binding and conclusive.
8. CHANGE IN CONTROL.
In the event of a Change in Control, any Unvested Shares may also
become vested to the extent provided by the Change-in-Control Agreement.
9. LEGENDS.
The Company may at any time place legends referencing the Company
Reacquisition Right and any applicable federal, state or foreign securities law
restrictions on all certificates representing the Shares. The Participant shall,
at the request of the Company, promptly present to the Company any and all
certificates representing the Shares in the possession of the Participant in
order to carry out the provisions of this Section.
-7-
10. TRANSFERS IN VIOLATION OF AGREEMENT.
No Shares may be sold, exchanged, transferred (including, without
limitation, any transfer to a nominee or agent of the Participant), assigned,
pledged, hypothecated or otherwise disposed of, including by operation of law,
in any manner which violates any of the provisions of this Agreement and, except
pursuant to a "Change in Control" as defined in the Change-in-Control Agreement,
until the date on which such shares become Vested Shares, and any such attempted
disposition shall be void. The Company shall not be required (a) to transfer on
its books any Shares which will have been transferred in violation of any of the
provisions set forth in this Agreement or (b) to treat as owner of such Shares
or to accord the right to vote as such owner or to pay dividends to any
transferee to whom such Shares will have been so transferred. In order to
enforce its rights under this Section, the Company shall be authorized to give a
stop transfer instruction with respect to the Shares to the Company's transfer
agent.
11. RIGHTS AS A STOCKHOLDER.
The Participant shall have no rights as a stockholder with respect
to any Shares subject to the Award until the date of the issuance of a
certificate for such Shares (as evidenced by the appropriate entry on the books
of the Company or of a duly authorized transfer agent of the Company). No
adjustment shall be made for dividends, distributions or other rights for which
the record date is prior to the date such certificate is issued, except as
provided in Section 7. Subject to the provisions of this Agreement, the
Participant shall be entitled to all rights and privileges of a stockholder of
the Company with respect to Shares deposited in the Escrow pursuant to Section
6.
12. RIGHT TO CONTINUED SERVICE WITH THE COMPANY.
Nothing in this Agreement shall confer upon the Participant any
right to continue in the Service of the Company or interfere in any way with any
right of the Company to terminate the Participant's Service at any time.
13. MISCELLANEOUS PROVISIONS.
13.1 ADMINISTRATION. All questions of interpretation concerning this
Agreement shall be determined by the Board. All determinations by the Board
shall be final and binding upon all persons having an interest in the Award. Any
officer of the Company shall have the authority to act on behalf of the Company
with respect to any matter, right, obligation, or election which is the
responsibility of or which is allocated to the Company herein, provided the
officer has apparent authority with respect to such matter, right, obligation,
or election.
13.2 AMENDMENT. The Board may amend this Agreement at any time;
provided, however, that no such amendment may adversely affect the Participant's
rights under this Agreement without the consent of the Participant. No amendment
or addition to this Agreement shall be effective unless in writing.
-8-
13.3 NONTRANSFERABILITY OF THE AWARD. The right to acquire Shares
pursuant to the Award may not be assigned or transferred in any manner except by
will or by the laws of descent and distribution. During the lifetime of the
Participant, all rights with respect to this Award shall be exercisable only by
the Participant.
13.4 FURTHER INSTRUMENTS. The parties hereto agree to execute such
further instruments and to take such further action as may reasonably be
necessary to carry out the intent of this Agreement.
13.5 BINDING EFFECT. This Agreement shall inure to the benefit of
the successors and assigns of the Company and, subject to the restrictions on
transfer set forth herein, be binding upon the Participant and the Participant's
heirs, executors, administrators, successors and assigns.
13.6 NOTICES. Any notice required or permitted hereunder shall be
given in writing and shall be deemed effectively given (except to the extent
that this Agreement provides for effectiveness only upon actual receipt of such
notice) upon personal delivery or upon deposit in the United States Post Office,
by registered or certified mail, with postage and fees prepaid, addressed to the
other party at the address shown below that party's signature in this Agreement
or at such other address as such party may designate in writing from time to
time to the other party.
13.7 INTEGRATED AGREEMENT. This Agreement constitutes the entire
understanding and agreement of the Participant and the Company with respect to
the subject matter contained herein and there are no agreements (other than the
Employment Agreement and any applicable Change-in-Control Agreement currently in
effect) understandings, restrictions, representations, or warranties among the
Participant and the Participating Company Group with respect to such subject
matter other than those as set forth or provided for herein or therein.
13.8 APPLICABLE LAW. The Agreement shall be governed by the laws of
the State of California as such laws are applied to agreements between
California residents entered into and to be performed entirely within the State
of California.
13.9 COUNTERPARTS. This Agreement may be executed in counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
-9-
By their signatures below, the Company and the Participant agree that the
Award is governed by the provisions of this Agreement. The Participant
acknowledges receipt of a copy of this Agreement, and represents that the
Participant has read and is familiar with the provisions of the Agreement, and
hereby accepts the Award subject to all applicable terms and conditions.
INVITROGEN CORPORATION PARTICIPANT
By:
--------------------------------- ------------------------------------
C. Xxxx Xxxxxx Xxxxxxx X. Xxxxxx
Its: Chief Financial Officer Date:
Date: -------------------------------
--------------------------------
Address: Invitrogen Corporation Address:
ATTN: General Counsel 0000 Xxxxxxxxxx Xxxx
and Chief Financial Officer Xxxxxxxxxx, Xxxxxxxxx 00000
0000 Xxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
ATTACHMENTS: Joint Escrow Instructions and Assignment Separate from Certificate
-10-
