As filed with the Securities and Exchange Commission on February 20, 2025
Registration No. 333-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
INSMED INCORPORATED
(Exact name of registrant as specified in its charter)
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Virginia
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54-1972729
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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700 US Highway 202/206
Bridgewater, New Jersey 08807
(Address of Principal Executive Offices including zip code)
Insmed Incorporated 2025 Inducement Plan
(Full title of the plan)
Michael A. Smith, Esq.
Insmed Incorporated
Chief Legal Officer
700 US Highway 202/206
Bridgewater, New Jersey 08807
(908) 977-9900
(Name, address, including zip code, and telephone number, including area code, of agent for service)
Copies of all communications, including all communications sent to the agent for service, should be sent to:
Michael J. Riella, Esq.
Covington & Burling LLP
One CityCenter
850 Tenth St. NW
Washington, DC 20001
(202) 662-6000
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated
filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act:
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Large accelerated
filer ☒
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Accelerated filer ☐
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Non-accelerated filer ☐
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Smaller reporting
company ☐
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Emerging Growth
Company ☐
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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. ☐
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
| Item 1. |
Plan Information.
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Not required to be filed as part of this Registration Statement pursuant to the Note to Part I of Form S-8.
| Item 2. |
Registrant Information and Employee Plan Annual Information.
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Not required to be filed as part of this Registration Statement pursuant to the Note to Part I of Form S-8.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
| Item 3. |
Incorporation of Documents by Reference.
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The following documents, which have previously been filed by the Registrant with the Securities and Exchange Commission (the “Commission”), are incorporated by reference herein and shall be deemed to be a part hereof:
(1) The Registrant’s Annual Report on Form 10-K for the year ended December 31, 2024, filed with the Commission on February 20, 2025;
(2) The Registrant’s Current Report on
Form 8-K, filed with the Commission on February 6, 2025 (solely with respect to
Item 8.01); and
In addition, subsequent to the date of this Registration Statement and prior to the filing of a post-effective amendment hereto that indicates all securities offered hereunder have been sold or deregisters all securities
then remaining unsold, all reports and other documents filed by the Registrant pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act shall be deemed to be incorporated by reference herein and to be a part hereof from the date of filing of
such documents; provided, however, that no information furnished (but not filed) under Item 2.02 or Item 7.01 of any Current Report on Form 8-K shall be incorporated by reference except to the extent
specified in such Current Report on Form 8-K.
For purposes of this Registration Statement, any statement contained in a document incorporated or deemed to be incorporated herein by reference shall be deemed to be modified or superseded to the extent that a
statement contained herein or in any subsequently filed document that also is incorporated or is deemed to be incorporated herein by reference modifies or supersedes such statement. Any statement so modified or superseded shall not be deemed, except
as so modified or superseded, to constitute a part of this Registration Statement.
| Item 4. |
Description of Securities.
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Not applicable.
| Item 5. |
Interests of Named Experts and Counsel.
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Not applicable.
| Item 6. |
Indemnification of Directors and Officers.
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The Virginia Stock Corporation Act (the “VSCA”) permits, and the Registrant’s Articles of Incorporation require, indemnification of the Registrant’s directors and officers in a variety of circumstances, which may include
indemnification for liabilities under the Securities Act. Under the VSCA, a Virginia corporation is generally authorized to indemnify its directors and officers in civil or criminal actions if they acted in good faith and believed their conduct to be
in the best interests of the corporation and, in the case of criminal actions, had no reasonable cause to believe that the conduct was unlawful, or if they engaged in conduct for which broader indemnification has been made permissible or obligatory
by the Registrant. The VSCA requires such indemnification, unless limited by a corporation’s articles of incorporation, when a director or officer entirely prevails in the defense of any proceeding to which he or she was a party because he or she is
or was a director or officer of the corporation. The VSCA provides that a corporation may make any other or further indemnity (including indemnity with respect to a proceeding by or in the right of the corporation), and may make additional provision
for advances and reimbursement of expenses, if authorized by its articles of incorporation or shareholder-adopted bylaw or resolution, except an indemnity against willful misconduct or a knowing violation of the criminal law. The Registrant’s
Articles of Incorporation require indemnification of directors and officers with respect to certain liabilities, expenses and other amounts imposed upon them because of having been a director or officer, except in the case of willful misconduct or a
knowing violation of criminal law.
The VSCA establishes a statutory limit on liability of directors and officers of a corporation for damages assessed against them in a suit brought by or in the right of the corporation or brought by or on behalf of the
corporation’s shareholders and authorizes a corporation to specify a lower monetary limit on liability (including the elimination of liability for monetary damages) in the corporation’s articles of incorporation or shareholder-approved bylaws;
however, the liability of a director or officer shall not be limited if such director or officer engaged in willful misconduct or a knowing violation of the criminal law or of any federal or state securities law, including, without limitation, any
unlawful insider trading or manipulation of the market for any security. As permitted by the VSCA, the Registrant’s Articles of Incorporation provide that no director or officer of the Registrant shall be liable to the Registrant or the Registrant’s
shareholders for monetary damages with respect to any transaction, occurrence or course of conduct, except for liability resulting from such person’s having engaged in willful misconduct or a knowing violation of the criminal law or any federal or
state securities law.
Certain directors and officers have been granted contractual indemnification rights under separate indemnification agreements with the Registrant, pursuant to which they will be entitled to indemnification from the
Registrant under certain circumstances. Additionally, the employment agreements the Registrant has entered into with its executive officers provide for indemnification to the fullest extent permitted by law from and against any and all claims,
damages, expenses (including attorneys’ fees), judgments, penalties, fines, settlements, and all other liabilities incurred or paid by the executive officer in connection with the investigation, defense, prosecution, settlement or appeal of any
threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative in nature, and to which the executive officer was or is a party or is threatened to be made a party by reason of the fact that he or
she is or was an officer, employee or agent of the Registrant, or by reason of anything done or not done by him or her in any such capacity or capacities, provided that such executive officer acted in good faith, in a manner that was not grossly
negligent or that constituted willful misconduct and in a manner he or she reasonably believed to be in or not opposed to the Registrant’s best interests, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his
or her conduct was unlawful. The Registrant also carries insurance on behalf of directors, officers, employees or agents that may cover liabilities under the Securities Act.
| Item 7. |
Exemption From Registration Claimed.
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Not applicable.
A list of exhibits included in this Registration Statement is set forth on the Exhibit Index and is incorporated herein by reference.
(a) The undersigned Registrant 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;
(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 Commission pursuant to Rule 424(b) if, in the
aggregate, the changes in volume and price represent no more than 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) 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 Commission by the Registrant pursuant to Section 13 or Section 15(d) of the Exchange Act that are incorporated by reference in the Registration Statement;
(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 therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof; and
(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 Registrant hereby undertakes that, for purposes of determining any liability under the Securities Act, each filing of the Registrant’s annual
report pursuant to Section 13(a) or Section 15(d) of the Exchange Act (and, where applicable, each filing of an employee benefit plan’s annual report pursuant to Section 15(d) of the Exchange Act) that is
incorporated by reference in the 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 Registrant pursuant to the foregoing provisions, or
otherwise, the Registrant has been advised that in the opinion of the Commission 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 Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant 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 Registrant 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.
EXHIBIT INDEX
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Exhibit No.
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Exhibit Description
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Insmed Incorporated 2025 Inducement Plan.
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Opinion of Hunton Andrews Kurth LLP.
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Consent of Hunton Andrews Kurth LLP (included in Exhibit 5.1).
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Consent of Ernst & Young LLP, Independent Registered Public Accounting Firm.
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Power of Attorney (included on signature page hereto).
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Filing Fee Table.
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* Filed herewith.
SIGNATURES
Pursuant to the requirements of the Securities Act, 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 Bridgewater, State of New Jersey, on February 20, 2025.
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INSMED INCORPORATED
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By:
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/s/ William H. Lewis
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William H. Lewis
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Chair and Chief Executive Officer
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KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Michael A. Smith his or her true and lawful attorney with power of substitution and resubstitution to sign in
his or her name, place and stead in any and all such capacities the Registration Statement and any and all amendments and supplements thereto (including post-effective amendments) and documents in connection therewith, and to file the same with the
Commission, said attorney to have full power and authority to do and perform, in the name of and on behalf of each of said officers and directors of the Registrant who shall have executed such a power of attorney, every act whatsoever which such
attorney may deem necessary or desirable to be done in connection therewith, as fully and to all intents and purposes as such officer or director of the Registrant might or could do in person.
Pursuant to the requirements of the Securities Act, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.
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Signature
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Title
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Date
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/s/ William H. Lewis
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Chief Executive Officer; Chair of the Board of Directors
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February 20, 2025
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William H. Lewis
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(Principal Executive Officer)
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/s/ Sara Bonstein
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Chief Financial Officer
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February 20, 2025
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Sara Bonstein
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(Principal Financial Officer, Principal Accounting Officer)
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*
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Director
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February 20, 2025
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Alfred F. Altomari
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*
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Director
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February 20, 2025
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Elizabeth McKee Anderson
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*
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Director
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February 20, 2025
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David R. Brennan
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*
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Director
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February 20, 2025
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Clarissa Desjardins, Ph.D.
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*
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Director
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February 20, 2025
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Leo Lee
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*
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Director
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February 20, 2025
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David W.J. McGirr
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*
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Director
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February 20, 2025
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Carol A. Schafer
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*
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Director
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February 20, 2025
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Melvin Sharoky, M.D.
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Michael A. Smith
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Attorney-in-Fact
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Exhibit 4.1
INSMED INCORPORATED
2025 INDUCEMENT PLAN
The purpose of the Plan is to provide equity compensation to certain eligible individuals in order to induce such individuals to enter into employment with the Company or its
Subsidiaries. The Plan is intended to meet the requirements of a plan providing for inducement grants under Rule 5635(c)(4) of the Nasdaq Listing Rules and shall be administered in accordance with such intent. The Plan provides for the grant of
Options and Restricted Stock Units, any of which may be performance-based, as determined by the Administrator.
As used in the Plan, the following terms shall have the meanings set forth below:
a. “Administrator” means the Administrator of the Plan in accordance with Section 6 of the Plan.
b. “Affiliate” means any entity in which the Company has a substantial direct or indirect equity interest, as
determined by the Committee from time to time.
c. “Act” means the Securities Exchange Act of 1934, as amended from time to time, or any successor thereto.
d. “Award” means an Option or Restricted Stock Unit granted to a Participant pursuant to the provisions of the
Plan.
e. “Award Agreement” means any written or electronic agreement or other instrument evidencing any Award, which
may (but need not) require execution or acknowledgment by a Participant.
f. “Board” means the Board of Directors of the Company.
g. “Change in Control” means the occurrence of any one of the following:
1. any Person becomes the beneficial owner (as such term is defined in Rule 13d-3 under the
Act) of at least 50% of (A) the value of the then outstanding shares of Common Stock (the “Outstanding Company Common Stock”) and/or (B) the combined voting power of the then outstanding voting securities of the Company entitled to vote generally
in the election of directors (the “Outstanding Company Voting Securities”) (the foregoing beneficial ownership hereinafter being referred to as a “Controlling Interest”); provided, however, that for purposes of this definition, the following
acquisitions shall not constitute or result in a Change in Control: (v) any acquisition directly from the Company; (w) any acquisition by the Company; (x) any acquisition by any Person that as of the Effective Date has beneficial ownership of a
Controlling Interest; (y) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or an Affiliate; or (z) any acquisition by any corporation pursuant to a transaction which complies with clauses (A),
(B) and (C) of subsection (3) below; or
2. during any period of two consecutive years (not including any period prior to the
Effective Date) individuals who constitute the Board on the Effective Date (the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a director subsequent to the
Effective Date whose election, or nomination for election by the Company’s shareholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such individual were a member
of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs after the Effective Date as a result of an actual or threatened election contest with respect to the election or removal of
directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board; or
3. consummation of a reorganization, merger, statutory share
exchange, or consolidation or similar corporate transaction involving the Company or any of its subsidiaries, a sale or other disposition of all or substantially all of the assets of the Company, or the acquisition of assets or stock of another
entity by the Company or any of its subsidiaries (each a “Business Combination”), in each case, unless, following such Business Combination, (A) all or substantially all of the Persons who were the beneficial owners, respectively, of the
Outstanding Company Common Stock and Outstanding Company Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than 50% of the then outstanding shares of common stock and the combined voting
power of the then outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the corporation resulting from such Business Combination (including, without limitation, a corporation which as a result
of such transaction owns the Company or all or substantially all of the Company’s assets either directly or through one or more subsidiaries) (such resulting or acquiring corporation is referred to herein as the “Acquiring Corporation”) in
substantially the same proportions as their ownership, immediately prior to such Business Combination of the Outstanding Company Common Stock and Outstanding Company Voting Securities, as the case may be, (B) no Person (excluding the Acquiring
Corporation or any employee benefit plan (or related trust) of the Company or such Acquiring Corporation) beneficially owns, directly or indirectly, more than 50% of the then outstanding shares of common stock of the corporation resulting from such
Business Combination or the combined voting power of the then outstanding voting securities of such corporation except to the extent that such ownership existed prior to the Business Combination, and (C) at least a majority of the members of the
Board of the corporation resulting from such Business Combination were members of the Incumbent Board at the time of the execution of the initial agreement, or of the action of the Board, providing for such Business Combination; or
4. the complete liquidation or dissolution of the Company.
Notwithstanding the foregoing, to the extent an Award provides for deferred compensation under Section 409A of the Code and payment is made upon a Change in Control, no event or transaction will
constitute a Change in Control hereunder unless it also constitutes a “change in control event” under Section 409A of the Code.
h. “Code” means the Internal Revenue Code of 1986, as amended from time to time, or any successor thereto, and
the rulings and regulations issued thereunder.
i. “Committee” means the Compensation Committee of the Board (or any successor committee).
j. “Common Stock” means the common stock of the Company, par value $0.01 per share, or such other class or kind
of shares or other securities as may be applicable under Section 12 of the Plan.
k. “Company” means Insmed Incorporated, a Virginia corporation, and except as utilized in the definition of
Change in Control, any successor corporation.
l. “Dividend Equivalents” mean an amount payable in cash or Common Stock, as determined by the Administrator,
with respect to a Restricted Stock Unit Award equal to what would have been received if the shares underlying the Award had been owned by the Participant.
m. “Effective Date” has the meaning set forth in Section 4 of the Plan.
n. “Eligible Individual” means an individual who becomes an employee of the Company or its Subsidiaries and who
either (i) was not previously an employee or director of the Company or any of its Subsidiaries, or (ii) incurred a bona fide period of non-employment as determined under Rule 5635(c)(4) of the Nasdaq Listing Rules.
o. “Fair Market Value” means as of any date, the value of the Common Stock determined as follows: (i) if the
Common Stock is listed on any established stock exchange, system or market, the closing price for the Common Stock on such date (or if Common Stock was not traded on such exchange, system, or market on such date, then on the next preceding date on
which shares of Common Stock were traded) as quoted on such exchange, system or market as reported in the Wall Street Journal or such other source as the Administrator deems reliable; and (ii) in the absence of an established market for the Common
Stock, as determined in good faith by the Administrator by the reasonable application of a reasonable valuation method, taking into account factors consistent with Treas. Reg. § 409A-1(b)(5)(iv)(B) as the Administrator deems appropriate.
p. “Option” means a stock option awarded under Section 8 of the Plan.
q. “Participant” means any individual described in Section 3 of the Plan to whom Awards have been granted and
any authorized transferee of such individual.
r. “Person” shall have the meaning given in Section 3(a)(9) of the Act, as modified and used in Sections 13(d)
and 14(d) thereof, except that such term shall not include (i) the Company or any of its Affiliates, (ii) a trustee or other fiduciary holding securities under an employee benefit plan of the Company or any of its Subsidiaries, (iii) an underwriter
temporarily holding securities pursuant to an offering of such securities, or (iv) a corporation owned, directly or indirectly, by the shareholders of the Company in substantially the same proportions as their ownership of stock of the Company.
s. “Plan” means the Insmed Incorporated 2025 Inducement Plan as set forth herein and as amended from time to
time.
t. “Restricted Stock Unit” means an Award denominated in units of Common Stock under which the issuance of
shares of Common Stock (or cash payment in lieu thereof) is subject to such conditions (including continued employment or performance conditions) and terms as the Administrator deems appropriate.
u. “Separation from Service” means the termination of Participant’s employment with the Company and all
Subsidiaries that constitutes a “separation from service” within the meaning of Section 409A of the Code.
v. “Share Pool” has the meaning set forth in Section 5(a) of the Plan.
w. “Subsidiary” means any entity in which the Company, directly or indirectly, possesses 50% or more of the total
combined voting power of all classes of its equity interests.
Awards under the Plan may be granted only to Eligible Individuals as an inducement to become an employee of the Company or its Subsidiaries. Notwithstanding the foregoing, a
person who would otherwise be eligible to receive an Award under the Plan shall not be eligible in any jurisdiction where such person’s participation in the Plan would be unlawful.
| 4. |
Effective Date and Termination of Plan
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The Plan was adopted by the Board on February 19, 2025 (the “Effective Date”) and shall expire on tenth anniversary of such date. Notwithstanding the foregoing, the Plan may be
terminated at such earlier time as the Board may determine. Termination of the Plan will not affect the rights and obligations of the Participants and the Company arising under Awards theretofore granted.
| 5. |
Shares Subject to the Plan and to Awards
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a. Aggregate Limits. The aggregate number
of shares of Common Stock issuable under the Plan shall be 1,000,000 (the “Share Pool”). On the grant date of an Award, the Share Pool shall be reduced by 1 share of Common Stock for each share subject to an Award. The aggregate number of shares of
Common Stock available for grant under the Plan and the number of shares of Common Stock subject to Awards outstanding shall be subject to adjustment as provided in Section 12 of the Plan. The shares of Common Stock issued pursuant to Awards
granted under the Plan may be shares that are authorized and unissued or shares that were reacquired by the Company, including shares purchased in the open market.
b. Issuance of Shares. The Share Pool shall be increased when and to the
extent that an Award is canceled, terminates unearned, expires, is forfeited, or lapses for any reason, or an Award is settled in cash without the delivery of shares to the Participant, such that any shares of Common Stock subject to such Award
shall again be available for the grant of an Award pursuant to the Plan. Notwithstanding anything to the contrary contained herein, shares subject to an Award shall not again be made available for issuance or delivery under the Plan if such shares
are (a) shares tendered in payment of an Option or (b) shares delivered or withheld by the Company to satisfy any tax withholding obligation. The payment of Dividend Equivalents in cash in conjunction with any outstanding Awards shall not be
counted against the shares available for issuance under the Plan. Any shares of Common Stock with respect to Awards issued under the Plan that again become available for future grants pursuant to this Section 5 shall be added back to the Share Pool
as 1 share for each share subject to an Award.
| 6. |
Administration of the Plan
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a. Administrator of the Plan. The Plan shall be administered by the
Administrator, which shall be the Committee, or, in the absence of the Committee, the Board itself. Except as otherwise set forth in the Plan, any power of the Administrator may also be exercised by the Board. To the extent that any permitted
action taken by the Board conflicts with action taken by the Administrator, the Board action shall control.
b. Powers of Administrator. Subject to the express provisions of the
Plan, the Administrator shall be authorized and empowered to do all things that it determines to be necessary or appropriate in connection with the administration of the Plan, including, without limitation:
1. to prescribe, amend and rescind rules and regulations relating to the Plan and to define
terms not otherwise defined herein;
2. to determine which persons are eligible to receive Awards under the Plan, to which of such
persons, if any, Awards shall be granted hereunder, and the timing of any such Awards;
3. to prescribe and amend the terms of the Award Agreements, to grant Awards and determine the
terms and conditions thereof; provided that, notwithstanding the foregoing or anything in the Plan to the contrary, the grant of each Award must be approved by the Committee or a majority of the Company’s
independent directors (as defined in Rule 5605(a)(2) of the Nasdaq Listing Rules) in order to comply with the exemption from the shareholder approval requirement for “inducement grants” provided under Rule 5635(c)(4) of the Nasdaq Listing Rules;
4. to establish and verify the extent of satisfaction of any performance goals or other
conditions applicable to the grant, issuance, retention, vesting, exercisability, or settlement of any Award;
5. to prescribe and amend the terms of or form of any document or notice required to be
delivered to the Company by Participants under the Plan;
6. to determine the extent to which adjustments are required pursuant to Section 12 of the
Plan;
7. to interpret and construe the Plan, any rules and regulations under the Plan and the terms
and conditions of any Award granted hereunder, and to make exceptions to any such provisions if the Administrator, in good faith, determines that it is appropriate to do so;
8. to approve corrections in the documentation or administration of any Award; and
9. to make all other determinations deemed necessary or advisable for the administration of
the Plan.
The Administrator may, in its sole and absolute discretion, without amendment to the Plan but subject to the limitations otherwise set forth in Section 16 of the Plan, waive or amend the operation
of Plan provisions respecting exercise after termination of employment or service to the Company or a Subsidiary. The Administrator may, in its sole and absolute discretion and, except as otherwise provided in Section 16 of the Plan, waive, settle or
adjust any of the terms of any Award so as to avoid unanticipated consequences or address unanticipated events (including any temporary closure of an applicable stock exchange, disruption of communications, or natural catastrophe).
c. Determinations by the Administrator. All decisions, determinations
and interpretations by the Administrator regarding the Plan, any rules and regulations under the Plan and the terms and conditions of or operation of any Award granted hereunder, shall be final and binding on all Participants, beneficiaries, heirs,
assigns or other persons holding or claiming rights under the Plan or any Award. The Administrator shall consider such factors as it deems relevant, in its sole and absolute discretion, to making such decisions, determinations, and interpretations
including, without limitation, the recommendations or advice of any officer or other employee of the Company and such attorneys, consultants, and accountants as it may select. Members of the Board and members of the Committee acting under the Plan
shall be fully protected in relying in good faith upon the advice of counsel and shall incur no liability except for gross negligence or willful misconduct in the performance of their duties.
d. Delegation of Authority. To the maximum extent permitted by
applicable law, the Committee may by resolution delegate to a committee of one or more members of the Board or one or more officers of the Company the authority to perform any or all things that the Administrator is authorized and empowered to do
or perform under the Plan, and for all purposes under the Plan, such officer or officers shall be treated as the Administrator; provided, that the Committee may not delegate any authority that would cause Awards under the Plan to fail to comply
with the exemption from the shareholder approval requirement for “inducement grants” provided under Rule 5635(c)(4) of the Nasdaq Listing Rules; provided, further, that in no event shall an officer of the Company be delegated the authority to amend
Awards held by individuals who are subject to Section 16 of the Act or who report directly to such officer. In addition, the Administrator may delegate any or all aspects of the day-to-day administration of the Plan to one or more officers or
employees of the Company or any Subsidiary, and/or to one or more agents.
a. Terms Set Forth in Award Agreement. The terms and conditions of each
Award shall be set forth in an Award Agreement in a form approved by the Administrator for such Award, which Award Agreement may contain such terms and conditions as specified from time to time by the Administrator, provided such terms and
conditions do not conflict with the Plan. The Award Agreement for any Award, as applicable, shall include the time or times at or within which and the consideration, if any, for which any shares of Common Stock may be acquired from the Company. The
terms of Awards may vary among Participants, and the Plan does not impose upon the Administrator any requirement to make Awards subject to uniform terms. Accordingly, the terms of individual Award Agreements may vary.
b. Separation from Service. Subject to the express provisions of the
Plan, the Administrator shall specify before, at, or after the time of grant of an Award the provisions governing the effect(s) upon an Award of a Participant’s Separation from Service or other termination of service.
c. Rights of a Shareholder. A Participant shall have no rights as a
shareholder with respect to shares of Common Stock covered by an Award until the date the Participant becomes the holder of record of such shares of Common Stock. No adjustment shall be made for dividends or other rights for which the record date
is prior to such date, except as provided in Section 9(b) or Section 12 of the Plan or as otherwise provided by the Administrator.
d. No Payment of Dividends Prior to Vesting. Notwithstanding
anything in the Plan to the contrary, to the extent a Participant is eligible to receive dividends or Dividend Equivalents with respect to an Award granted under the Plan, such dividends or Dividend Equivalents shall in no case be paid to the
Participant before the vesting of the portion of the Award to which such dividends or Dividend Equivalents relate.
a. Grant, Term and Price. The grant,
issuance, retention, vesting, and/or settlement of any Option shall occur at such time and be subject to such terms and conditions as determined by the Administrator or under criteria established by the Administrator, which may include conditions
based on continued employment, passage of time, attainment of age and/or service requirements, and/or satisfaction of performance conditions. Each Option shall be a non-qualified stock option that is not intended to qualify as an “incentive stock
option” within the meaning of Section 422 of the Code. The term of an Option shall in no event be greater than ten years; provided, however, the term of an Option shall be automatically extended if, at the time of its scheduled expiration, the
Participant holding such Option is prohibited by law or the Company’s insider trading policy from exercising the Option, which extension shall expire on the thirtieth (30th) day following the date such prohibition no longer applies. The
Administrator will establish the price at which Common Stock may be purchased upon exercise of an Option, which, in no event will be less than the Fair Market Value of such shares on the date of grant. The exercise price of any Option may be paid
in cash or such other method as determined by the Administrator, including an irrevocable commitment by a broker to pay over such amount from a sale of the Shares issuable under an Option, the delivery of previously owned shares of Common Stock or
withholding of shares of Common Stock deliverable upon exercise.
b. No Repricing without Shareholder Approval. Other than in connection
with a change in the Company’s capitalization (as described in Section 12 of the Plan), at any time when the exercise price of an Option is above the Fair Market Value of a share of Common Stock, the Company shall not, without shareholder approval,
(i) reduce the exercise price of such Option, (ii) exchange such Option for cash, another Award, or a new Option with a lower exercise or base price, or (iii) otherwise reprice such Option.
c. No Reload Grants. Options shall not be granted under the Plan in
consideration for and shall not be conditioned upon the delivery of shares of Common Stock to the Company in payment of the exercise price and/or tax withholding obligation under any other employee stock option.
d. No Shareholder Rights. Participants shall have no voting rights and
will have no rights to receive dividends or Dividend Equivalents in respect of an Option or any shares of Common Stock subject to an Option until the Participant has become the holder of record of such shares.
| 9. |
Restricted Stock Units
|
a. Vesting and Performance Conditions. The grant, issuance, retention,
vesting, and/or settlement of any Restricted Stock Unit Award shall occur at such time and be subject to such terms and conditions as determined by the Administrator or under criteria established by the Administrator, which may include conditions
based on continued employment, passage of time, attainment of age and/or service requirements, and/or satisfaction of performance conditions.
b. Dividends and Distributions. Unless
otherwise provided in the Award Agreement, during the period prior to shares being issued in the name of a Participant under any Restricted Stock Unit Award, the Company shall pay or accrue Dividend Equivalents on each date dividends on Common
Stock are paid, subject to such conditions as the Administrator may deem appropriate. The time and form of any such payment of Dividend Equivalents shall be specified in the Award Agreement. Notwithstanding anything herein to the contrary, in no
event will dividends or Dividend Equivalents be paid in either cash or shares with respect to any Restricted Stock Unit Award prior to the time specified in Section 7(d).
c. Voting Rights. Participants shall have no voting rights with respect
to shares of Common Stock underlying Restricted Stock Units unless and until such shares are reflected as issued and outstanding shares on the Company’s stock ledger.
| 10. |
Deferral of Payment and Section 409A
|
The Administrator may, in an Award Agreement or otherwise, provide for the deferred delivery of shares of Common Stock upon settlement, vesting or other events with respect to
Restricted Stock Units. Notwithstanding anything herein to the contrary, the Administrator may, in its sole and absolute discretion, deny any deferral of the delivery of shares of Common Stock or any other payment with respect to any Award if the
Administrator determines, in its sole and absolute discretion, that the deferral would result in the imposition of the additional tax under Section 409A(a)(1)(B) of the Code. The Plan and each Award Agreement shall be interpreted such that each Award
complies with, or is exempt from, Section 409A of the Code. However, the Company shall have no liability to a Participant, or any other party, if an Award that is intended to be exempt from, or compliant with, Section 409A of the Code is not so
exempt or compliant or for any action taken by the Administrator or the Board.
| 11. |
Conditions and Restrictions Upon Securities Subject to Awards
|
The Administrator may provide that the Common Stock issued upon exercise of an Option or otherwise subject to or issued under an Award shall be subject to such further
agreements, restrictions, conditions or limitations as the Administrator in its discretion may specify prior to the exercise of such Option or the grant, vesting or settlement of such Award, including without limitation, conditions on vesting or
transferability, forfeiture or repurchase provisions and method of payment for the Common Stock issued upon exercise, vesting or settlement of such Award (including the actual or constructive surrender of Common Stock already owned by the
Participant), or payment of taxes arising in connection with an Award. Without limiting the foregoing, such restrictions may address the timing and manner of any resales by the Participant or other subsequent transfers by the Participant of any
shares of Common Stock issued under an Award, including without limitation (i) restrictions under an insider trading policy or pursuant to applicable law, (ii) restrictions designed to delay and/or coordinate the timing and manner of sales by the
Participant and holders of other Company equity compensation arrangements, (iii) restrictions as to the use of a specified brokerage firm for such resales or other transfers, and (iv) provisions requiring Common Stock be sold on the open market or to
the Company in order to satisfy tax withholding or other obligations.
| 12. |
Adjustment of and Changes in the Stock; Change in Control
|
a. Adjustments Upon Certain Unusual or Nonrecurring Events. The number
and kind of shares of Common Stock available for issuance under the Plan (including under any Awards then outstanding), and the number and kind of shares of Common Stock subject to the limits set forth in Section 5 of the Plan, shall be equitably
adjusted by the Administrator to reflect any reorganization, reclassification, combination of shares, stock split, reverse stock split, spin-off, dividend or distribution of securities, property or cash (other than regular, quarterly cash
dividends), or any other event or transaction that affects the number or kind of shares of Common Stock outstanding. Such adjustment may be designed to treat the shares of Common Stock available under the Plan and subject to Awards as if they were
all outstanding on the record date for such event or transaction or to increase the number of such shares of Common Stock to reflect a deemed reinvestment in shares of Common Stock of the amount distributed to the Company’s security holders. The
terms of any outstanding Award shall also be equitably adjusted by the Administrator as to price, number or kind of shares of Common Stock subject to such Award, vesting, and other terms to reflect the foregoing events, which adjustments need not
be uniform as between different Awards or different types of Awards. No fractional shares of Common Stock shall be issued pursuant to such an adjustment.
b. Adjustments Upon Other Events. In the event there shall be any
other change in the number or kind of outstanding shares of Common Stock, or any stock or other securities into which such Common Stock shall have been changed, or for which it shall have been exchanged, by reason of a Change in Control, other
merger, consolidation or otherwise, then the Administrator shall determine the appropriate and equitable adjustment to be effected, which adjustments need not be uniform between different Awards or different types of Awards. In addition, in the
event of such change described in this paragraph, the Administrator may accelerate the time or times at which any Award may be exercised, consistent with and as otherwise permitted under Section 409A of the Code, and may provide for cancellation of
such accelerated Awards that are not exercised within a time prescribed by the Administrator in its sole and absolute discretion.
c. Change in Control. Unless otherwise provided in the applicable
Award Agreement, in the event of a Change in Control after the Effective Date, unless provision is made in connection with the Change in Control for (i) assumption of Awards previously granted or (ii) substitution for such Awards of new awards
covering stock of a successor corporation or its “parent corporation” (as defined in Section 424(e) of the Code) or “subsidiary corporation” (as defined in Section 424(f) of the Code) with appropriate adjustments as to the number and kinds of
shares and the exercise prices, if applicable, or unless the Administrator exercises its discretion to provide for the treatment described in subparagraph (e) below, (A) the Administrator shall make an adjustment to any or all Awards as the
Administrator deems appropriate to reflect such Change in Control or (B) (1) in the case of an Option, the Participant shall have the ability to exercise such Option, including any portion of the Option not previously exercisable, and the
unexercised portion of such Option shall be cancelled upon consummation of the Change in Control; (2) in the case of an Award subject to performance conditions, the Participant shall have the right to receive a payment based on performance through
a date determined by the Administrator prior to the Change in Control (unless such performance cannot be determined, in which case the Participant shall have the right to receive a payment equal to the target amount payable); and (3) in the case of
outstanding Restricted Stock Units not subject to performance conditions, all conditions to the grant, issuance, retention, vesting, or transferability of or any other restrictions applicable to, such Award shall immediately lapse. The Administrator shall not be obligated to treat all Participants, all Awards, all Awards held by a Participant, all portions of a single Award, or all Awards of the same type identically.
d. Termination Following a Change in Control. Unless otherwise
expressly provided for in the Award Agreement or another contract, including an employment agreement, or under the terms of a transaction constituting a Change in Control, the following shall occur upon a Participant’s involuntary termination of
employment within twenty-four (24) months following a Change in Control, provided that such termination does not result from the Participant’s termination for disability, cause or gross misconduct: (i) in the case of an Option, each Option shall
immediately become exercisable and shall remain exercisable for three (3) years following such termination (or until the expiration of such Option, if earlier); (ii) in the case of an Award subject to performance conditions, the Participant shall
have the right to receive a payment based on performance through a date determined by the Administrator prior to the Change in Control (unless such performance cannot be determined, in which case the Participant shall have the right to receive a
payment equal to the target amount payable); and (iii) in the case of outstanding Restricted Stock Units not subject to performance conditions, all conditions to the grant, issuance, retention, vesting or transferability of, or any other
restrictions applicable to, such Award shall immediately lapse.
e. In the event of a Change in Control, the Administrator may in its discretion provide that outstanding
Awards, whether vested or unvested, shall be cancelled in exchange for cash and/or other consideration with a value equal to (i) for Restricted Stock Units, the Fair Market Value of the shares of Common Stock underlying such Award on the date of
such Change in Control or (ii) for Options, the excess, if any, of the Fair Market Value of the shares of Common Stock underlying such Award on the date of such Change in Control over the aggregate exercise price; provided
that, if the Fair Market Value of a share of Common Stock on such date does not exceed the per share exercise price, the Administrator may cancel such Option for no consideration.
f. The Company shall notify Participants holding Awards subject to any adjustments pursuant to this Section 12
of such adjustment, but (whether or not notice is given) such adjustment shall be effective and binding for all purposes of the Plan.
No Award may be sold, transferred for value, pledged, assigned, or otherwise alienated or hypothecated by a Participant other than by will or the laws of descent and
distribution; provided, however, that a Participant may, with the prior approval of the Company’s Chief Legal Officer or Chief Financial Officer or any designee of the Company’s Chief Legal Officer or Chief Financial Officer (provided that no such
person may approve a transfer under this Section by such person) and subject to applicable laws, rules, and regulations and such terms and conditions as the Company’s Chief Legal Officer or Chief Financial Officer or such designee, as applicable,
shall specify, transfer an Award, for no consideration, to a family member (as defined in the General Instructions to Form S-8 under the Securities Act of 1933) of the Participant, in each case, with respect to whom such Award or the exercise thereof
(as applicable) is covered by an effective registration statement under the Securities Act of 1933 (collectively, the “Permitted Transferees”). Any Award transferred to a Permitted Transferee shall be further transferable only by will or the laws of
descent and distribution or, for no consideration, to another Permitted Transferee of the Participant. During the Participant’s lifetime, each Option shall be exercisable only by the Participant or by his or her Permitted Transferee to whom such
Option has been transferred in accordance with this paragraph; provided, however, that outstanding Options may be exercised following the Participant’s death by the Participant’s beneficiaries, any such Permitted Transferee or as permitted by the
Administrator.
| 14. |
Compliance with Laws and Regulations
|
The Plan, the grant, issuance, vesting, exercise, and settlement of Awards hereunder, and the obligation of the Company to sell, issue or deliver shares of Common Stock under
such Awards, shall be subject to all applicable foreign, federal, state and local laws, rules and regulations, stock exchange rules and regulations, and to such approvals by any governmental or regulatory agency as may be required. The Company shall
not be required to register in a Participant’s name or deliver Common Stock prior to the completion of any registration or qualification of such shares under any foreign, federal, state, or local law or any ruling or regulation of any government body
which the Administrator shall determine to be necessary or advisable. To the extent the Company is unable to or the Committee deems it infeasible to obtain authority from any regulatory body having jurisdiction, which authority is deemed by the
Company’s counsel to be necessary to the lawful issuance and sale of any shares of Common Stock hereunder, the Company and its Subsidiaries shall be relieved of any liability with respect to the failure to issue or sell such shares of Common Stock as
to which such requisite authority shall not have been obtained. No Option shall be exercisable and no Common Stock shall be issued and/or transferable under any other Award unless a registration statement with respect to the Common Stock underlying
such Option is effective and current or the Company has determined that such registration is unnecessary.
In the event an Award is granted to or held by a Participant who is employed or providing services outside the United States, the Administrator may, in its sole and absolute
discretion, modify the provisions of the Plan or of such Award as they pertain to such individual to comply with applicable foreign law or practice, to recognize differences in local law, currency or tax policy, or to foster and promote achievement
of the purposes of the Plan locally. The Administrator may also amend the terms of Awards and impose conditions on the grant, issuance, exercise, vesting, settlement, or retention of Awards in order to comply with such foreign law or practice, to
achieve such purposes, and/or to minimize the Company’s obligations with respect to tax equalization for Participants employed outside their home country.
To the extent required by applicable federal, state, local or foreign law, the Administrator may and/or a Participant shall make arrangements satisfactory to the Company for the
satisfaction of any withholding tax obligations that arise with respect to any Award, or the issuance or sale of any shares of Common Stock. The Company shall not be required to recognize any Participant rights under an Award, to issue shares of
Common Stock or to recognize the disposition of such shares of Common Stock until such obligations are satisfied. To the extent permitted or required by the Administrator, these obligations may or shall be satisfied by the Company withholding cash
from any compensation otherwise payable to or for the benefit of a Participant, the Company withholding a portion of the shares of Common Stock that otherwise would be issued to a Participant under such Award or any other award held by the
Participant or by the Participant tendering to the Company cash or, if allowed by the Administrator, shares of Common Stock.
| 16. |
Amendment of the Plan or Awards
|
The Board may amend, alter, or discontinue the Plan and the Administrator may amend or alter any agreement or other document evidencing an Award made under the Plan but, except
as provided pursuant to the provisions of Section 12 of the Plan, no such amendment shall, without the approval of the shareholders of the Company, amend the Plan in any manner requiring shareholder approval by law or the rules of any stock exchange
or market or quotation system on which the Common Stock is traded, listed, or quoted.
No amendment or alteration to the Plan or an Award or Award Agreement shall be made which would impair the rights of the holder of an Award, without such holder’s consent,
provided that no such consent shall be required if the Administrator determines in its sole and absolute discretion and prior to the date of any Change in Control that such amendment or alteration either (i) is required or advisable in order for the
Company, the Plan, or the Award to satisfy any law or regulation or to meet the requirements of or avoid adverse financial accounting consequences under any accounting standard, or (ii) is not reasonably likely to significantly diminish the benefits
provided under such Award, or that any such diminishment has been adequately compensated.
| 17. |
No Liability of Company
|
The Company, any Subsidiary or Affiliate which is in existence or hereafter comes into existence, the Board and the Administrator shall not be liable to a Participant or any
other person as to: (a) the non-issuance or sale of shares of Common Stock as to which the Company has been unable to obtain from any regulatory body having jurisdiction the authority deemed by the Company’s counsel to be necessary for the lawful
issuance and sale of any shares of Common Stock hereunder; and (b) any tax consequence expected, but not realized, by any Participant or other person due to the receipt, exercise, or settlement of any Award granted hereunder.
| 18. |
Non-Exclusivity of Plan
|
The adoption of the Plan by the Board shall not be construed as creating any limitations on the power of the Board or the Committee to adopt such other incentive arrangements as
either may deem desirable, including without limitation, the granting of inducement or retention shares or stock options other than under the Plan, and such arrangements may be either generally applicable or applicable only in specific cases.
The Plan and any agreements or other documents hereunder shall be interpreted and construed in accordance with the laws of the Commonwealth of Virginia (without regard to any
rule or principle of conflicts of laws that otherwise would result in the application of the substantive laws of another jurisdiction) and applicable federal law. Any reference in the Plan or in the agreement or other document evidencing any Awards
to a provision of law or to a rule or regulation shall be deemed to include any successor law, rule, or regulation of similar effect or applicability.
| 20. |
No Right to Employment or Continued Service
|
Nothing in the Plan or an Award Agreement shall interfere with or limit in any way the right of the Company, its Subsidiaries and/or its Affiliates to terminate any Participant’s
employment or service for the Company at any time or for any reason not prohibited by law, nor shall the Plan or an Award itself confer upon any Participant any right to continue his or her employment or service for any specified period of time.
Neither an Award nor any benefits arising under the Plan shall constitute an employment contract with the Company, any Subsidiary and/or its Affiliates. Subject to Sections 4 and 16 of the Plan, the Plan and the benefits hereunder may be terminated
at any time in the sole and absolute discretion of the Board without giving rise to any liability on the part of the Company, its Subsidiaries, and/or its Affiliates.
| 21. |
Forfeiture upon Termination of Employment or Service
|
Except as otherwise provided by the Administrator in the Award Agreement, unvested Awards shall be forfeited immediately if the Participant terminates his or her employment or
service with the Company, a Subsidiary, or an Affiliate for any reason.
| 22. |
Specified Employee Delay
|
To the extent any payment under the Plan is considered deferred compensation subject to the restrictions contained in Section 409A of the Code, such payment may not be made to a
specified employee (as determined in accordance with a uniform policy adopted by the Company with respect to all arrangements subject to Section 409A of the Code) upon Separation from Service before the date that is six months after the specified
employee’s Separation from Service (or, if earlier, the specified employee’s death). Any payment that would otherwise be made during this period of delay shall be accumulated and paid on the sixth month plus one day following the specified employee’s
Separation from Service (or, if earlier, as soon as administratively practicable after the specified employee’s death).
| 23. |
No Liability of Committee Members
|
No member of the Committee shall be personally liable by reason of any contract or other instrument executed by such member or on his or her behalf in his or her capacity as a
member of the Committee nor for any mistake of judgment made in good faith, and the Company shall indemnify and hold harmless each member of the Committee and each other employee, officer, or director of the Company to whom any duty or power relating
to the administration or interpretation of the Plan may be allocated or delegated, against any cost or expense (including counsel fees) or liability (including any sum paid in settlement of a claim) arising out of any act or omission to act in
connection with the Plan unless arising out of such person’s own fraud or willful bad faith; provided, however, that approval of the Board shall be required for the payment of any amount in settlement of a claim against any such person. The foregoing
right of indemnification shall not be exclusive of any other rights of indemnification to which such persons may be entitled under the Company’s Articles of Incorporation or Bylaws, as a matter of law, or otherwise, or any power that the Company may
have to indemnify them or hold them harmless.
If any provision of the Plan or any Award is or becomes or is deemed to be invalid, illegal, or unenforceable in any jurisdiction or as to any Person or Award, or would
disqualify the Plan or any Award under any law deemed applicable by the Administrator, such provision shall be construed or deemed amended to conform to the applicable laws, or if it cannot be construed or deemed amended without, in the determination
of the Administrator, materially altering the intent of the Plan or the Award, such provision shall be stricken as to such jurisdiction, Person, or Award and the remainder of the Plan and any such Award shall remain in full force and effect.
The Plan is intended to be an unfunded plan. Participants are and shall at all times be general creditors of the Company with respect to their Awards. If the Administrator or the
Company chooses to set aside funds in a trust or otherwise for the payment of Awards under the Plan, such funds shall at all times be subject to the claims of the creditors of the Company in the event of its bankruptcy or insolvency.
All obligations of the Company under the Plan with respect to Awards granted hereunder shall be binding on any successor to the Company, whether the existence of such successor
is the result of a direct or indirect purchase, merger, consolidation, or otherwise, of all or substantially all of the business and/or assets of the Company.
Any Participant and/or any Award, including any shares of Common Stock subject to an Award, shall be subject to any applicable recovery, recoupment, clawback, and/or other
forfeiture policy maintained by the Company from time to time in accordance with the provisions of such policy.
15