OSTEOTECH, INC. 2007 STOCK INCENTIVE PLAN PERFORMANCE-BASED RESTRICTED STOCK UNIT AGREEMENT (FOR EMPLOYEES) AgreementNumber
Exhibit 10.51
OSTEOTECH, INC.
2007 STOCK INCENTIVE PLAN
2007 STOCK INCENTIVE PLAN
AgreementNumber
THIS RESTRICTED STOCK UNIT AGREEMENT, is dated as of [dateandyear] (the “Grant Date”) by and
between Osteotech, Inc., a Delaware corporation (the “Company”), and [Name], an employee of the
Company or an employee of a subsidiary of the Company (the “Employee”) located at [Address],
pursuant to the Company’s 2007 Stock Incentive Plan (the “Plan”).
For good and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the Company and Employee hereby agree as follows:
| 1. | Grant of Stock Units. |
Subject to the terms and conditions of this Agreement and of the Plan, the Company hereby
grants to the Employee restricted stock units (as adjusted in accordance with the last sentence of
this paragraph, the “Stock Units”) covering [Units] shares (the “Shares”) of the Company’s common
stock (the “Common Stock”). Each Stock Unit represents one share of Common Stock. The number of
restricted stock units that will be issued to the Employee may be increased or decreased in
accordance with the terms and conditions set forth on Schedule A hereto.
| 2. | Vesting Schedule. |
(a) Subject to the limitations contained herein and in the Plan, the Stock Units shall vest,
and Shares shall be issued in accordance with Section 3 below, to the extent that both the
“Performance Conditions” (as defined below) and the “Service Requirement” (as defined below)
are satisfied.
(i) Performance Conditions. The Performance Conditions that must be
satisfied as a condition to the vesting of the Stock Units are set forth on Schedule
A attached hereto (the “Performance Conditions”).
(ii) Service Requirement. If the Employee has not ceased being an employee
of the Company or its subsidiaries prior to the close of business on the third
anniversary of the Grant Date (the “Service Requirement”), the Stock Units for which
the Employee has satisfied the Performance Conditions shall become fully vested on
that date. To the extent that the Performance Conditions and Service Requirement
are achieved, the appropriate number of Shares will be issued in accordance with
Section 3 below on the third anniversary of the Grant Date. Additional vesting may
apply under the circumstances specified in Section 4(c).
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(b) Except as otherwise provided for in this Agreement, if the Employee ceases to be employed
by the Company or its subsidiaries for any reason including as a result of the Employee’s death or
disability (within the meaning of Section 22(e)(3) of the Code) prior to the achievement of the
Performance Conditions and the Service Requirement, all Stock Units granted hereunder shall be
forfeited by, and no further rights shall accrue to, the Employee.
| 3. | Benefit Upon Vesting. |
Upon the vesting of the Stock Units, the Employee shall be entitled to receive, and the
Company shall issue to the Employee, a number of Shares equal to the number of Stock Units that
have vested on the third anniversary of the Grant Date subject to Section 7 below.
| 4. | Adjustment of Shares. |
(a) The number of shares issuable upon vesting of the Stock Units shall be adjusted
proportionately in order to prevent dilution or enlargement of the benefits or potential benefits
intended to be provided under the Stock Units upon the occurrence of a stock split or reverse stock
split of the Common Stock or a dividend payable to all holders of the Common Stock in shares of
Common Stock in accordance with the provisions of Section 10.2 of the Plan.
(b) In the event of a dissolution or liquidation of the Company all unvested Stock Units shall
terminate.
(c) In the event of a Change of Control (as defined in the Plan), the Stock Units shall be
subject to the definitive agreement governing the Change of Control. Such agreement, without the
Employee’s consent, may provide for:
(i) The continuation of the Stock Units (but in each case adjusted to reflect the transaction
terms) by the Company if the Company is the surviving corporation;
(ii) The assumption, substitution or replacement of the Stock Units with equivalent awards by
the surviving corporation or its parent (but in each case adjusted to reflect the transaction
terms);
(iii) Accelerated vesting of, and lapse of restrictions applicable to, the Stock Units; or
(iv) The settlement of the Stock Units (including the termination thereof) in cash.
Except for adjustments to reflect the transaction terms as referenced above or, to the extent the
Stock Units are subject to accelerated vesting or lapse of restrictions approved by the Board of
Directors or the Compensation Committee upon specific events or conditions (and then only to the
extent such acceleration benefits are reflected in the transaction agreement, this Agreement or
another written agreement between the Employee and the Company), any Stock Units that are assumed,
substituted, replaced with equivalent awards or continued shall continue following the
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transaction to be subject to the same vesting or other restrictions that applied to the original
Stock Units.
| 5. | Restrictions. |
Except as otherwise provided for in this Agreement or applicable law, the Stock Units or
rights granted hereunder may not be sold, pledged or otherwise transferred until the Stock Units
become vested in accordance with Section 2 and the Shares are issued under Section 3. The period
of time between the Grant Date and the date on which the Stock Units become vested is referred to
herein as the “Restriction Period.”
| 6. | No Stockholder Rights. |
Stock Units represent hypothetical shares of Common Stock. During the Restriction Period, the
Employee shall not be entitled to any of the rights or benefits generally accorded to stockholders
with respect to the Stock Units.
| 7. | Taxes. |
(a) The Employee shall be liable for any and all taxes of any nature and whether arising under
U.S., state, local or foreign laws, including withholding taxes, interest or penalties arising out
of this grant, the vesting of Stock Units hereunder, the transfer of Shares or other property in
settlement of the Stock Units, or any subsequent transfer or disposition of the Shares or such
property. In the event that the Company or the Employee’s employer, including any affiliate or
subsidiary qualified to deduct tax at source (the “Employer”), is required to withhold any amount
(including in connection with income tax, employment or payroll taxes, social security
contributions or other similar amounts, with such obligation in aggregate referred to herein as the
“Withholding Obligation”) as a result of any event occurring in connection with the Stock Unit, the
Employee shall make a cash payment in U.S. dollars to the Company as necessary to cover all
applicable Withholding Obligations at or prior to the time the event giving rise to the Withholding
Obligation occurs; provided that (i) the Company has the right to withhold a portion of the Shares
otherwise to be delivered upon vesting of the Stock Units having a Fair Market Value equal to the
amount of Withholding Obligation in accordance with such rules as the Company may from time to time
establish or (ii) the Company may establish alternative procedures to ensure satisfaction of all
applicable Withholding Obligations arising in connection with the Stock Units, including any means
described in Sections 6.4(b) and (c) of the Plan. The Employee will receive a cash refund for any
payment of cash or fraction of a surrendered share not necessary to satisfy the Withholding
Obligations.
(b) The Employee acknowledges and agrees that the ultimate liability for any tax-related item
legally due by Employee is and remains the Employee’s responsibility and that the Company and or
the Employer (i) make no representations nor undertakings regarding the treatment of any such tax
items in connection with any aspect of this grant of Stock Units, including the vesting of Stock
Units, subsequent payment of Common Stock and/or cash related to such Stock Units or the subsequent
sale or other disposition of any Common Stock acquired pursuant to such Stock Units; and (ii) do
not commit to structure the terms or any aspect of this
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grant of Stock Units to reduce or eliminate the Employee’s liability for such tax items. The
Company may refuse to deliver the benefit described in Section 3 if the Employee fails to comply
with the Employee’s obligations as set forth in this Section 7.
| 8. | Data Privacy Consent. |
The Employee hereby explicitly and unambiguously consents to the collection, use and transfer,
in electronic or other form, of the Employee’s personal data as described in this document by and
among, as applicable, the Employer, and the Company and its subsidiaries and affiliates for the
exclusive purpose of implementing, administering and managing the Employee’s participation in the
Plan. The Employee understands that the Company, its affiliates, its subsidiaries and the Employer
hold certain personal information about the Employee, including, but not limited to, name, home
address and telephone number, date of birth, social security or insurance number or other
identification number, salary, nationality, job title, any shares of stock or directorships held in
the Company, details of all options or any other entitlement to shares of stock awarded, canceled,
purchased, exercised, vested, unvested or outstanding in the Employee’s favor for the purpose of
implementing, managing and administering the Plan (“Data”). The Employee understands that the Data
may be transferred to any third parties assisting in the implementation, administration and
management of the Plan, that these recipients may be located in the Employee’s country or elsewhere
and that the recipient country may have different data privacy laws and protections than the
Employee’s country. The Employee understands that the Employee may request a list with the names
and addresses of any potential recipients of the Data by contacting the administrator of the Plan
as may be designated from time to time by the Company (the “Plan Administrator”). The Employee
authorizes the recipients to receive, possess, use, retain and transfer the Data, in electronic or
other form, for the purposes of implementing, administering and managing the Employee’s
participation in the Plan, including any requisite transfer of such Data, as may be required to a
broker or other third party with whom the Employee may elect to deposit any Common Stock acquired
under the Plan. If the Employee is a citizen or resident of a country which is a member of the
European Union, the Data will only be shared with third parties that are subject to the EU Privacy
directive as locally implemented, the Safe Harbor framework or other adequate certification. The
Employee understands that Data will be held only as long as is necessary to implement, administer
and manage participation in the Plan. The Employee understands that he or she may, at any time,
review Data in order to correct, change or delete inaccurate information, request additional
information about the storage and processing of the Data, require any necessary amendments to the
Data or refuse or withdraw the consents herein, in any case without cost, by contacting the Plan
Administrator in writing. The Employee understands that refusing or withdrawing consent may affect
the Employee’s ability to participate in the Plan. For more information on the consequences of
refusing to consent or withdrawing consent, the Employee understands that he or she may contact the
Plan Administrator at the Company.
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| 9. | Plan Information. |
The Employee acknowledges that the Employee has access to and is deemed to have received a
copy of the Plan from the Company and agrees to receive stockholder information, including copies
of any annual report, proxy statement and periodic report, from the Company’s website at
xxxx://xxx.xxxxxxxxx.xxx/xxxxxx.xxx. The Employee acknowledges that copies of the Plan, Plan
prospectus, Plan information and stockholder information are also available upon written or
telephonic request to the Plan Administrator.
| 10. | Employee Acknowledgments. |
By accepting this grant of Stock Units, the Employee acknowledges and agrees that the Plan is
established voluntarily by the Company, it is discretionary in nature and may be modified, amended,
suspended or terminated by the Company at any time unless otherwise provided in the Plan or this
Agreement. The Employee acknowledges that all decisions with respect to future grants, if any,
will be at the sole discretion of the Company. The Employee’s participation in the Plan shall not
create a right to further employment with Employer and shall not interfere with the ability of
Employer to terminate the Employee’s employment relationship at any time with or without cause and
it is expressly agreed and understood that employment is terminable at the will of either party,
insofar as permitted by law. The Employee agrees that Stock Units, stock unit grants and resulting
benefits are an extraordinary item that do not constitute compensation of any kind for services of
any kind rendered to the Company or the Employer and are outside the scope of the Employee’s
employment contract, if any, unless otherwise specifically provided in such employment contract.
Stock Units, stock unit grants and resulting benefits are not part of normal or expected
compensation or salary for any purposes, including, but not limited to calculating any severance,
resignation, termination, redundancy, end of service payments, bonuses, long-service awards,
pension or retirement benefits or similar payments insofar as permitted by law. This grant of
Stock Units will not be interpreted to form an employment contract or relationship with the
Company, the Employer or any subsidiary or affiliate of the Company. The Employee acknowledges
that the future value of the Shares is unknown, may increase or decrease from the date of grant or
vesting of the Stock Units and cannot be predicted with certainty. In consideration of this grant
of Stock Units, no claim or entitlement to compensation or damages shall arise from termination of
this grant of Stock Units or diminution in value of this grant of Stock Units resulting from the
Employee’s termination of employment by the Company or the Employer for any reason whatsoever and
whether or not in breach of any applicable laws. Upon the Employee’s termination of employment
(whether or not such termination constitutes a breach of local labor laws), the Employee’s right to
receive benefits shall be only as set forth in this Agreement and his or her termination of
employment shall be effective as of the date that the Employee is no longer actively employed and
will not be extended by any notice period mandated under local law (e.g., active employment would
not include a period of “garden leave” or similar period pursuant to local law); and the Board or
Compensation Committee shall have the exclusive discretion to determine when the Employee is no
longer actively employed for purposes of this grant of Stock Units. This entire Section 10 is
subject to any provision to the contrary set forth in an employment contract, if any, between the
Employee and the Company.
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| 11. | Notices. |
All notices or other communications which are required or permitted hereunder shall be deemed
to be sufficient if contained in a written instrument given by personal delivery, air courier or
registered or certified mail, postage prepaid, return receipt requested, addressed to such party at
the address set forth below or such other address as may thereafter be designated in a written
notice from such party to the other party:
If to the Company, to:
Attention: Chief Financial Officer
Osteotech, Inc.
00 Xxxxx Xxx
Xxxxxxxxx, Xxx Xxxxxx 00000
Osteotech, Inc.
00 Xxxxx Xxx
Xxxxxxxxx, Xxx Xxxxxx 00000
If to the Employee, to:
Address provided above
All such notices, advances and communications shall be deemed to have been delivered and
received (a) in the case of personal delivery, on the date of such delivery, (b) in the case of air
courier, on the business day after the date when sent and (c) in the case of mailing, on the third
business day following such mailing.
| 12. | Miscellaneous. |
(a) The Company shall not be required to treat as the owner of Stock Units, and associated
benefits hereunder, any transferee to whom such Stock Units or benefits shall have been so
transferred in violation of this Agreement.
(b) The Employee shall take whatever additional actions and execute whatever additional
documents the Company may deem necessary or advisable in order to carry out or effect one or more
of the obligations or restrictions imposed on the Employee pursuant to the express provisions of
this Agreement.
(c) The Plan is incorporated herein by reference. The Stock Units are issued pursuant to the
Plan and are subject to its terms. No waiver or breach of any condition of this Agreement shall be
deemed to be a waiver of any other or subsequent breach of condition, whether of like or different
nature. This Agreement is governed by the laws of the state of Delaware. In the event of any
conflict between the terms and provisions of the Plan and this Agreement, the Plan terms and
provisions shall govern. Capitalized terms used but not defined in this Agreement have the
meanings assigned to them in the Plan. Certain other important terms governing this Agreement are
contained in the Plan. This Agreement may be executed in counterparts, each of which shall be
deemed to be an original, but all of which together shall constitute one and the same instrument.
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(d) The provisions of this Agreement are severable and if any one or more provisions are
determined to be illegal or otherwise unenforceable, in whole or in part, the remaining provisions
shall nevertheless be binding and enforceable.
(e) This Agreement constitutes the entire agreement between the parties with respect to the
subject matter hereof and thereof, merging any and all prior agreements.
(f) To the extent the Company determines that this Agreement is subject to Code Section 409A,
but does not conform with the requirements thereof, the Company may at its sole discretion amend or
replace the Agreement to cause the Agreement to comply with Code Section 409A.
(g) To the extent that the Company in good faith determines that any payment provided for
hereunder (meaning, the vesting and obligation to issue any Shares hereunder) would otherwise
constitute a “deferral of compensation” resulting in additional tax under Code Section 409A and
that the Employee is a “key employee” (in each case as such terms are defined under Code Section
409A), no amounts shall be payable to the Employee pursuant hereto prior to the earliest of (a) the
Employee’s death following the date of Employee’s Termination, or (b) the date that is six months
following the date of the Employee’s “separation from service” with the Company (within the meaning
of Code Section 409A). For these purposes, each payment is hereby designated as a separate payment
and will not collectively be treated as a single payment.
[Signature Page Follows]
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IN WITNESS WHEREOF, the parties have caused this Agreement to be executed as of the date set forth
above.
| OSTEOTECH, INC. |
||||
| By: | ||||
| Name: | Xxx Xxxxx-Akyaw | |||
| Title: | President and Chief Executive Officer | |||
| By: | ||||
| [Name of Employee] | ||||
EMPLOYEE SHOULD RETAIN THIS AGREEMENT FOR HIS OR HER RECORDS
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SCHEDULE A
PERFORMANCE CONDITIONS APPLICABLE TO THE STOCK UNITS AND ADJUSTMENT OF STOCK UNITS
| Fiscal Year 2008 | ||||
DEPS Targets |
||||
Lower Bound |
90% of Budgeted DEPS | |||
Middle Bound |
100% of Budgeted DEPS | |||
Upper Bound |
160% of Budgeted DEPS | |||
Vesting Rules and Adjustment of Stock Units. The following rules shall apply in
connection with determining whether i) the number of Stock Units subject to the Restricted Stock
Unit Agreement to which this Schedule A is attached shall be increased or decreased, and ii) the
Performance Conditions have been satisfied with respect to the Stock Units:
| 1. | With respect to fiscal year 2008, the determination of DEPS shall be made by the Board (or any committee delegated such authority by the Board) promptly after the independent auditors of the Company have delivered their audit report. | ||
| 2. | No portion of the Stock Units shall satisfy the Performance Condition unless the Lower Bound DEPS target has been achieved. If the Lower Bound DEPS target is not achieved, the Stock Units shall immediately terminate. | ||
| 3. | If the Lower Bound DEPS target is achieved, 60% of the Stock Units shall satisfy the Performance Criteria and the remaining Stock Units shall immediately terminate. | ||
| 4. | If the Middle Bound DEPS target is achieved, 100% of the Stock Units shall satisfy the Performance Criteria. | ||
| 5. | If the Upper Bound DEPS target is achieved, i) the number of Stock Units subject to the Restricted Stock Unit Agreement to which this Schedule A is attached shall be increased by 50%, and ii) 100% of the Stock Units, as increased by 50%, shall satisfy the Performance Criteria. | ||
| 6. | In the event that actual DEPS for fiscal year 2008 falls between the Lower Bound and Middle Bound, the percentage of Stock Units that shall satisfy the Performance Criteria will be determined based on a straight line interpolation calculation. For example, if actual DEPS for fiscal year 2008 is exactly between the Lower Bound and Middle Bound DEPS targets (i.e., 95% of Budgeted DEPS), 80% of the Stock Units shall satisfy the Performance Criteria. |
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| 7. | In the event that actual DEPS for fiscal year 2008 falls between the Middle Bound and Upper Bound, i) the number of Stock Units subject to the Restricted Stock Unit Agreement to which this Schedule A is attached shall be increased based on a straight line interpolation calculation, and ii) 100% of the Stock Units, as increased, shall satisfy the Performance Criteria. For example, if actual DEPS for fiscal year 2008 is exactly between the Middle Bound and Upper Bound DEPS targets (i.e., 130% of Budgeted DEPS), i) the number of Stock Units subject to the Restricted Stock Unit Agreement to which this Schedule A is attached shall be increased by 25%, and ii) 100% of Stock Units, as increased, shall satisfy the Performance Criteria. |
“Budgeted DEPS” means budgeted diluted earning per share as set forth in the Company’s Board
approved budget for fiscal year 2008.
“DEPS” will equal, diluted earnings per share determined in accordance with GAAP for the Company’s
fiscal year 2008. As used in the preceding sentence “fiscal year” shall mean the Company’s fiscal
year ending on December 31, 2008, unless the Board shall otherwise adjust the Company’s fiscal
year. The DEPS Targets set forth above will be adjusted by the Board in good faith in the event
that the Board adjusts the Company’s fiscal year. Any such adjustment by the Board shall be final
and binding on all persons.
The DEPS Targets set forth herein will be adjusted by the Board in good faith to reflect each
acquisition or disposition by the Company or any of its subsidiaries subsequent to the Grant Date
of any business, operation, entity (including the acquisition of only a portion of an entity whose
results will be consolidated by the Company in accordance with GAAP), division of any entity or any
assets outside the ordinary course of business. Any such adjustment by the Board shall be final
and binding on all persons.
“GAAP” means generally accepted accounting principles as in effect from time to time.
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