Form S-8 ORACLE CORP
As filed with the Securities and Exchange Commission on December 13, 2019
Registration No.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
ORACLE CORPORATION
(Exact name of registrant as specified in its charter)
| Delaware | 54-2185193 | |
| (State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
500 Oracle Parkway
Redwood City, California 94065
(Address of Principal Executive Offices, Including Zip Code)
CrowdTwist, Inc. 2010 Stock Plan
Amendment to the CrowdTwist, Inc. 2010 Stock Plan
(Full title of the plan)
Dorian Daley
Executive Vice President and General Counsel
Oracle Corporation
500 Oracle Parkway
Redwood City, California 94065
(Name and address of agent for service)
(650) 506-7000
(Telephone number, including area code, of agent for service)
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 the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act
| Large accelerated filer | ☒ | Accelerated filer | ☐ | |||
| Non-accelerated filer | ☐ (Do not check if a smaller reporting company) | Smaller reporting company | ☐ | |||
| Emerging growth company | ☐ | |||||
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. ☐
CALCULATION OF REGISTRATION FEE
|
| ||||||||
| Title of securities to be registered (1) |
Amount to be registered (2) |
Proposed maximum offering price per share (3) |
Proposed maximum aggregate offering price |
Amount of registration fee | ||||
| Common Stock, par value $0.01 per share, issuable in respect of assumed CrowdTwist, Inc. stock options |
52,247 | $14.40 | $752,356.80 | $97.66 | ||||
|
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|
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| (1) | This Registration Statement (the “Registration Statement”) registers the issuance of the common stock of Oracle Corporation (the “Registrant”), par value $0.01 (the “Common Stock”) issuable pursuant to equity awards assumed by the Registrant as a result of the consummation on November 8, 2019, of the transaction contemplated by the Agreement and Plan of Merger, dated as of October 1, 2019, by and among the Registrant, OC Acquisition LLC and Crest Acquisition Corporation, each a subsidiary of the Registrant, CrowdTwist, Inc. and the Holder Representative. |
| (2) | Pursuant to Rule 416 under the Securities Act of 1933, as amended (the “Securities Act”), this Registration Statement also covers an indeterminate number of additional shares that may be offered or issued as a result of stock splits, stock dividends or similar transactions. |
| (3) | Estimated solely for the purpose of calculating the amount of the registration fee pursuant to Rule 457(h) under the Securities Act, on the basis of the weighted average exercise price per share of the outstanding options. |
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
Item 1. Plan Information.
The documents containing the information specified in this Item 1 will be sent or given to participants as specified by Rule 428(b)(1) under the Securities Act. In accordance with the rules and regulations of the U.S. Securities and Exchange Commission (the “Commission”) and the instructions to Form S-8, such documents are not being filed with the Commission either as part of this Registration Statement or as prospectuses or prospectus supplements pursuant to Rule 424 under the Securities Act.
Item 2. Registrant Information and Employee Plan Annual Information.
The documents containing the information specified in this Item 2 will be sent or given to participants as specified by Rule 428(b)(1) under the Securities Act. In accordance with the rules and regulations of the Commission and the instructions to Form S-8, such documents are not being filed with the Commission either as part of this Registration Statement or as prospectuses or prospectus supplements pursuant to Rule 424 under the Securities Act.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The following documents filed with the Commission are incorporated herein by reference:
1. The Registrant’s Annual Report on Form 10-K for the fiscal year ended May 31, 2019 filed with the Commission on June 21, 2019 pursuant to Section 13 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).
2. The Registrant’s Quarterly Report on Form 10-Q for the fiscal quarter ended August 31, 2019 filed with the Commission on September 13, 2019 pursuant to Section 13 of the Exchange Act, and the Registrant’s Quarterly Report on Form 10-Q for the fiscal quarter ended November 30, 2019 filed with the Commission on December 13, 2019 pursuant to Section 13 of the Exchange Act.
3. The Registrant’s Current Reports on Form 8-K filed with the Commission pursuant to Section 13 of the Exchange Act on June 19, 2019, July 10, 2019, September 11, 2019, October 18, 2019, November 22, 2019, December 9, 2019 and December 12, 2019, only to the extent filed and not furnished.
4. The description of the Registrant’s Common Stock included in the Registrant’s registration statement on page 6 of Form S-3 (Reg. No. 333-223826), filed with the Commission on March 21, 2018, including any amendments or reports filed for the purpose of updating such descriptions.
All documents filed by the Registrant pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act after the date of this Registration Statement, and prior to the filing of a post-effective amendment which indicates that all securities offered hereby have been sold or which deregisters all securities then remaining unsold, shall be deemed to be incorporated by reference in this Registration Statement and to be a part hereof from the date of filing of such documents. Any statement contained in a document incorporated or deemed to be incorporated by reference herein shall be deemed to be modified or superseded for purposes of this Registration Statement to the extent that a statement contained in this Registration Statement, or in any other subsequently filed document which also is or is deemed to be incorporated by reference in this Registration Statement, modifies or supersedes such statement. Any such statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this Registration Statement.
Item 4. Description of Securities.
Not applicable.
Item 5. Interests of Named Experts and Counsel.
Brian S. Higgins, who is issuing the opinion of the Registrant’s Legal Department on the legality of the Registrant’s Common Stock offered hereby, is Vice President, Associate General Counsel and Secretary of the Registrant. Mr. Higgins holds restricted stock units granted by the Registrant.
Item 6. Indemnification of Directors and Officers.
As permitted by Section 102(b)(7) of the Delaware General Corporation Law, the Registrant’s Amended and Restated Certificate of Incorporation includes a provision that eliminates the personal liability of each of its directors for monetary damages for breach of such director’s fiduciary duty as a director, except for liability: (a) for any breach of the director’s duty of loyalty to the Registrant or its stockholders; (b) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of the law; (c) under Section 174 of the Delaware General Corporation Law; or (d) for any transaction from which the director derived an improper personal benefit. The directors’ liability will be further limited to the extent permitted by any future amendments to the Delaware General Corporation Law authorizing the further limitation or elimination of the liability of directors. In addition, as permitted by Section 145 of the Delaware General Corporation Law, the Bylaws of the Registrant provide that: (i) the Registrant is required to indemnify its directors and officers to the fullest extent permitted by Delaware law, including those circumstances in which indemnification would otherwise be discretionary; (ii) the Registrant is required to advance expenses, as incurred, to such directors and officers in connection with defending a proceeding (except that it is not required to advance expenses to a person against whom the Registrant brings a claim for breach of the duty of loyalty, failure to act in good faith, intentional misconduct, knowing violation of the law or deriving an improper personal benefit); (iii) the rights conferred in the Bylaws are not exclusive and the Registrant is authorized to enter into indemnification agreements with such directors, officers and employees; (iv) the Registrant is required to maintain director and officer liability insurance to the extent it determines that such insurance is reasonably available; and (v) the Registrant may not retroactively amend the Bylaw provisions in a way that is adverse to such directors and officers.
The Registrant has entered into indemnification agreements with its directors and a number of its officers containing provisions which provide for the indemnification of such directors or officers, as applicable, to the fullest extent permitted by Delaware law.
The indemnification provisions in the Bylaws, and any indemnification agreements entered into between the Registrant and its directors or officers, may be sufficiently broad to permit indemnification of the Registrant’s directors and officers for liabilities arising under the Securities Act.
Item 7. Exemption From Registration Claimed.
Not applicable.
Item 8. Exhibits.
| Exhibit No. |
Description of Exhibit | |
| 5.1 | Opinion of Counsel | |
| 23.1 | Consent of Counsel (included in Exhibit 5.1) | |
| 23.2 | Consent of Independent Registered Public Accounting Firm | |
| 24.1 | Power of Attorney (included on Signature Page) | |
| 99.1 | CrowdTwist, Inc. 2010 Stock Plan | |
| 99.2 | Amendment to the CrowdTwist, Inc. 2010 Stock Plan | |
Item 9. Undertakings.
| a. | The undersigned Registrant hereby undertakes: |
| 1. | To file, during any period in which offers or sales are being made pursuant to this Registration Statement, 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 this 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 this 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 is 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 “Calculation of Registration Fee” table in the effective Registration Statement; |
| (iii) | To include any material information with respect to the plan of distribution not previously disclosed in this Registration Statement or any material change to such information in this Registration Statement; |
provided, however, that paragraphs (i) and (ii) above do not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed with or furnished to the Commission by the Registrant pursuant to Section 13 or 15(d) of the Exchange Act that are incorporated by reference in this 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. |
| 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 this Registration Statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. |
| c. | Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the Registrant pursuant to the provisions described under “Item 6—Indemnification of Directors and Officers”, 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. |
Pursuant to the requirements of the Securities Act of 1933, as amended, 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 Redwood City, State of California, on this 13th day of December 2019.
| ORACLE CORPORATION | ||
| By: | /S/ BRIAN S. HIGGINS | |
|
| ||
| Name: | Brian S. Higgins | |
| Title: | Vice President, Associate General Counsel and Secretary | |
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints Safra A. Catz and Dorian Daley, and each of them, his or her true and lawful attorneys-in-fact and agents with full power of substitution and resubstitution, for him or her and in his or her name, place, and stead, in any and all capacities, to sign any and all amendments (including post-effective amendments) and additions to this Registration Statement, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, and hereby grants to such attorneys-in-fact and agents full power and authority to do and perform each and every act and thing requisite and necessary to be done, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents or their substitute or substitutes may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.
| Signature |
Title |
Date | ||
| /S/ SAFRA A. CATZ Safra A. Catz |
Chief Executive Officer and Director (Principal Executive and Financial Officer) |
December 13, 2019 | ||
| /S/ WILLIAM COREY WEST William Corey West |
Executive Vice President, Corporate Controller and Chief Accounting Officer (Principal Accounting Officer) |
December 13, 2019 | ||
| /S/ LAWRENCE J. ELLISON Lawrence J. Ellison |
Chairman of the Board of Directors and Chief Technology Officer
|
December 13, 2019 | ||
| /S/ JEFFREY O. HENLEY Jeffrey O. Henley |
Vice Chairman of the Board of Directors | December 13, 2019 | ||
| /S/ JEFFREY S. BERG Jeffrey S. Berg |
Director | December 13, 2019 | ||
| /S/ MICHAEL J. BOSKIN Michael J. Boskin |
Director | December 13, 2019 | ||
| /S/ BRUCE R. CHIZEN Bruce R. Chizen |
Director | December 13, 2019 | ||
| /S/ GEORGE H. CONRADES George H. Conrades |
Director | December 13, 2019 | ||
| /S/ RONA A. FAIRHEAD Rona A. Fairhead |
Director | December 13, 2019 | ||
| /S/ RENÉE J. JAMES Renée J. James |
Director | December 13, 2019 | ||
| /S/ CHARLES W. MOORMAN IV Charles W. Moorman IV |
Director | December 13, 2019 | ||
| /S/ LEON E. PANETTA Leon E. Panetta |
Director | December 13, 2019 | ||
| /S/ WILLIAM G. PARRETT William G. Parrett |
Director | December 13, 2019 | ||
| /S/ NAOMI O. SELIGMAN Naomi O. Seligman |
Director | December 13, 2019 | ||
Exhibit 5.1
[ORACLE LETTERHEAD]
December 13, 2019
Oracle Corporation
500 Oracle Parkway
Redwood City, California 94065
Ladies and Gentlemen:
I am Vice President, Associate General Counsel and Secretary of Oracle Corporation (the “Company”), and I offer this opinion in connection with the Registration Statement on Form S-8 (the “Registration Statement”) to be filed with the Securities and Exchange Commission on or about December 13, 2019, in connection with the registration under the Securities Act of 1933, as amended, of 52,247 shares of the Common Stock of the Company, par value $0.01 (the “Shares”), issuable pursuant to equity awards assumed by the Company pursuant to the terms of the Agreement and Plan of Merger, dated as of October 1, 2019 (the “Merger Agreement”), by and among the Company, OC Acquisition LLC and Crest Acquisition Corporation, each a subsidiary of the Company, CrowdTwist, Inc. (“CrowdTwist”) and the Holder Representative. Pursuant to the Merger Agreement, the Company assumed outstanding equity awards of CrowdTwist under the CrowdTwist, Inc. 2010 Stock Plan, as amended (the “CrowdTwist Plan”).
I have examined such documents and such matters of fact and law as I have deemed necessary to examine relating to the issuance of the Shares. It is my opinion that the Shares, when delivered pursuant to the terms of the CrowdTwist Plan, will be validly issued, fully paid and nonassessable.
I consent to the use of this opinion as an exhibit to the Registration Statement and further consent to all references to myself in the Registration Statement and any amendments thereto.
| Sincerely, |
| /s/ BRIAN S. HIGGINS |
| Brian S. Higgins |
| Vice President, Associate General Counsel and Secretary |
Exhibit 23.2
Consent of Independent Registered Public Accounting Firm
We consent to the incorporation by reference in the Registration Statement (Form S-8) pertaining to the:
| • | CrowdTwist, Inc. 2010 Stock Plan |
| • | Amendment to the CrowdTwist, Inc. 2010 Stock Plan |
of our reports dated June 21, 2019, with respect to the consolidated financial statements and schedule of Oracle Corporation and the effectiveness of internal control over financial reporting of Oracle Corporation included in its Annual Report (Form 10-K) for the year ended May 31, 2019, filed with the Securities and Exchange Commission.
/s/ Ernst & Young LLP
San Jose, California
December 13, 2019
Exhibit 99.1
CROWDTWIST, INC.
2010 STOCK PLAN
ADOPTED ON JULY 7, 2010
TABLE OF CONTENTS
| Page | ||||||
| SECTION 1. |
ESTABLISHMENT AND PURPOSE | 1 | ||||
| SECTION 2. |
ADMINISTRATION | 1 | ||||
| (a) |
Committees of the Board of Directors | 1 | ||||
| (b) |
Authority of the Board of Directors | 1 | ||||
| SECTION 3. |
ELIGIBILITY | 1 | ||||
| (a) |
General Rule | 1 | ||||
| (b) |
Ten-Percent Stockholders | 1 | ||||
| SECTION 4. |
STOCK SUBJECT TO PLAN | 2 | ||||
| (a) |
Basic Limitation | 2 | ||||
| (b) |
Additional Shares | 2 | ||||
| SECTION 5. |
TERMS AND CONDITIONS OF AWARDS OR SALES | 2 | ||||
| (a) |
Stock Grant or Purchase Agreement | 2 | ||||
| (b) |
Duration of Offers and Nontransferability of Rights | 2 | ||||
| (c) |
Purchase Price | 2 | ||||
| (d) |
Withholding Taxes | 2 | ||||
| (e) |
Transfer Restrictions and Forfeiture Conditions | 3 | ||||
| SECTION 6. |
TERMS AND CONDITIONS OF OPTIONS | 3 | ||||
| (a) |
Stock Option Agreement | 3 | ||||
| (b) |
Number of Shares | 3 | ||||
| (c) |
Exercise Price | 3 | ||||
| (d) |
Exercisability | 3 | ||||
| (e) |
Basic Term | 3 | ||||
| (f) |
Termination of Service (Except by Death) | 4 | ||||
| (g) |
Leaves of Absence | 4 | ||||
| (h) |
Death of Optionee | 4 | ||||
| (i) |
Post-Exercise Restrictions on Transfer of Shares | 5 | ||||
| (j) |
Pre-Exercise Restrictions on Transfer of Options or Shares | 5 | ||||
| (k) |
Withholding Taxes | 5 | ||||
| (l) |
No Rights as a Stockholder | 5 | ||||
| (m) |
Modification, Extension and Assumption of Options | 5 | ||||
| (n) |
Company’s Right to Cancel Certain Options | 6 | ||||
| SECTION 7. |
PAYMENT FOR SHARES | 6 | ||||
| (a) |
General Rule | 6 | ||||
| (b) |
Services Rendered | 6 | ||||
| (c) |
Promissory Note | 6 | ||||
| (d) |
Surrender of Stock | 6 | ||||
| (e) |
Exercise/Sale | 6 | ||||
| (f) |
Other Forms of Payment | 7 | ||||
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| SECTION 8. |
ADJUSTMENT OF SHARES | 7 | ||||
| (a) |
General | 7 | ||||
| (b) |
Mergers and Consolidations | 7 | ||||
| (c) |
Reservation of Rights | 8 | ||||
| SECTION 9. |
PRE-EXERCISE INFORMATION REQUIREMENT | 8 | ||||
| (a) |
Application of Requirement | 8 | ||||
| (b) |
Scope of Requirement | 8 | ||||
| SECTION 10. |
MISCELLANEOUS PROVISIONS | 8 | ||||
| (a) |
Securities Law Requirements | 8 | ||||
| (b) |
No Retention Rights | 9 | ||||
| (c) |
Treatment as Compensation | 9 | ||||
| (d) |
Governing Law | 9 | ||||
| SECTION 11. |
DURATION AND AMENDMENTS | 9 | ||||
| (a) |
Term of the Plan | 9 | ||||
| (b) |
Right to Amend or Terminate the Plan | 9 | ||||
| (c) |
Effect of Amendment or Termination | 9 | ||||
| SECTION 12. |
DEFINITIONS | 10 | ||||
ii
CROWDTWIST, INC. 2010 STOCK PLAN
SECTION 1. ESTABLISHMENT AND PURPOSE.
The purpose of the Plan is to offer selected persons an opportunity to acquire a proprietary interest in the success of the Company, or to increase such interest, by acquiring Shares of the Company’s Stock. The Plan provides both for the direct award or sale of Shares and for the grant of Options to purchase Shares. Options granted under the Plan may include Nonstatutory Options as well as ISOs intended to qualify under Section 422 of the Code.
Capitalized terms are defined in Section 12.
SECTION 2. ADMINISTRATION.
(a) Committees of the Board of Directors. The Plan may be administered by one or more Committees. Each Committee shall consist of one or more members of the Board of Directors who have been appointed by the Board of Directors. Each Committee shall have such authority and be responsible for such functions as the Board of Directors has assigned to it. If no Committee has been appointed, the entire Board of Directors shall administer the Plan. Any reference to the Board of Directors in the Plan shall be construed as a reference to the Committee (if any) to whom the Board of Directors has assigned a particular function.
(b) Authority of the Board of Directors. Subject to the provisions of the Plan, the Board of Directors shall have full authority and discretion to take any actions it deems necessary or advisable for the administration of the Plan. All decisions, interpretations and other actions of the Board of Directors shall be final and binding on all Purchasers, all Optionees and all persons deriving their rights from a Purchaser or Optionee.
SECTION 3. ELIGIBILITY.
(a) General Rule. Only Employees, Outside Directors and Consultants shall be eligible for the grant of Nonstatutory Options or the direct award or sale of Shares. Only Employees shall be eligible for the grant of ISOs.
(b) Ten-Percent Stockholders. A person who owns more than 10% of the total combined voting power of all classes of outstanding stock of the Company, its Parent or any of its Subsidiaries shall not be eligible for the grant of an ISO unless (i) the Exercise Price is at least 110% of the Fair Market Value of a Share on the Date of Grant and (ii) such ISO by its terms is not exercisable after the expiration of five years from the Date of Grant. For purposes of this Subsection (b), in determining stock ownership, the attribution rules of Section 424(d) of the Code shall be applied.
SECTION 4. STOCK SUBJECT TO PLAN.
(a) Basic Limitation. Not more than 444,444 Shares may be issued under the Plan, subject to Subsection (b) below and Section 8(a).1 All of these Shares may be issued upon the exercise of ISOs. The number of Shares that are subject to Options or other rights outstanding at any time under the Plan shall not exceed the number of Shares that then remain available for issuance under the Plan. The Company, during the term of the Plan, shall at all times reserve and keep available sufficient Shares to satisfy the requirements of the Plan. Shares offered under the Plan may be authorized but unissued Shares or treasury Shares.
(b) Additional Shares. In the event that Shares previously issued under the Plan are reacquired by the Company, such Shares shall be added to the number of Shares then available for issuance under the Plan. In the event that Shares that otherwise would have been issuable under the Plan are withheld by the Company in payment of the Purchase Price, Exercise Price or withholding taxes, such Shares shall remain available for issuance under the Plan. In the event that an outstanding Option or other right for any reason expires or is canceled, the Shares allocable to the unexercised portion of such Option or other right shall be added to the number of Shares then available for issuance under the Plan.
SECTION 5. TERMS AND CONDITIONS OF AWARDS OR SALES.
(a) Stock Grant or Purchase Agreement. Each award of Shares under the Plan shall be evidenced by a Stock Grant Agreement between the Grantee and the Company. Each sale of Shares under the Plan (other than upon exercise of an Option) shall be evidenced by a Stock Purchase Agreement between the Purchaser and the Company. Such award or sale shall be subject to all applicable terms and conditions of the Plan and may be subject to any other terms and conditions which are not inconsistent with the Plan and which the Board of Directors deems appropriate for inclusion in a Stock Grant Agreement or Stock Purchase Agreement. The provisions of the various Stock Grant Agreements and Stock Purchase Agreements entered into under the Plan need not be identical.
(b) Duration of Offers and Nontransferability of Rights. Any right to purchase Shares under the Plan (other than an Option) shall automatically expire if not exercised by the Purchaser within 30 days after the grant of such right was communicated to the Purchaser by the Company. Such right shall not be transferable and shall be exercisable only by the Purchaser to whom such right was granted.
(c) Purchase Price. The Board of Directors shall determine the Purchase Price of Shares to be offered under the Plan at its sole discretion. The Purchase Price shall be payable in a form described in Section 7.
(d) Withholding Taxes. As a condition to the award, purchase, vesting or transfer of Shares, the Grantee or Purchaser shall make such arrangements as the Board of Directors may require for the satisfaction of any federal, state, local or foreign withholding tax obligations that may arise in connection with such event.
| 1 | Please refer to Exhibit A for a schedule of the initial share reserve and any subsequent increases in the reserve. |
2
(e) Transfer Restrictions and Forfeiture Conditions. Any Shares awarded or sold under the Plan shall be subject to such special forfeiture conditions, rights of repurchase, rights of first refusal and other transfer restrictions as the Board of Directors may determine. Such restrictions shall be set forth in the applicable Stock Grant Agreement or Stock Purchase Agreement and shall apply in addition to any restrictions that may apply to holders of Shares generally.
SECTION 6. TERMS AND CONDITIONS OF OPTIONS.
(a) Stock Option Agreement. Each grant of an Option under the Plan shall be evidenced by a Stock Option Agreement between the Optionee and the Company. The Option shall be subject to all applicable terms and conditions of the Plan and may be subject to any other terms and conditions which are not inconsistent with the Plan and which the Board of Directors deems appropriate for inclusion in a Stock Option Agreement. The provisions of the various Stock Option Agreements entered into under the Plan need not be identical.
(b) Number of Shares. Each Stock Option Agreement shall specify the number of Shares that are subject to the Option and shall provide for the adjustment of such number in accordance with Section 8. The Stock Option Agreement shall also specify whether the Option is an ISO or a Nonstatutory Option.
(c) Exercise Price. Each Stock Option Agreement shall specify the Exercise Price. The Exercise Price of an Option shall not be less than 100% of the Fair Market Value of a Share on the Date of Grant, and in the case of an ISO a higher percentage may be required by Section 3(b). Subject to the preceding sentence, the Exercise Price shall be determined by the Board of Directors at its sole discretion. The Exercise Price shall be payable in a form described in Section 7. This Subsection (c) shall not apply to an Option granted pursuant to an assumption of, or substitution for, another option in a manner that complies with Section 424(a) of the Code (whether or not the Option is an ISO).
(d) Exercisability. Each Stock Option Agreement shall specify the date when all or any installment of the Option is to become exercisable. No Option shall be exercisable unless the Optionee (i) has delivered an executed copy of the Stock Option Agreement to the Company or (ii) otherwise agrees to be bound by the terms of the Stock Option Agreement. The Board of Directors shall determine the exercisability provisions of the Stock Option Agreement at its sole discretion.
(e) Basic Term. The Stock Option Agreement shall specify the term of the Option. The term shall not exceed 10 years from the Date of Grant, and in the case of an ISO a shorter term may be required by Section 3(b). Subject to the preceding sentence, the Board of Directors at its sole discretion shall determine when an Option is to expire.
3
(f) Termination of Service (Except by Death). If an Optionee’s Service terminates for any reason other than the Optionee’s death, then the Optionee’s Options shall expire on the earliest of the following dates:
(i) The expiration date determined pursuant to Subsection (e) above;
(ii) The date three months after the termination of the Optionee’s Service for any reason other than Disability, or such earlier or later date as the Board of Directors may determine (but in no event earlier than 30 days after the termination of the Optionee’s Service); or
(iii) The date six months after the termination of the Optionee’s Service by reason of Disability, or such later date as the Board of Directors may determine.
The Optionee may exercise all or part of the Optionee’s Options at any time before the expiration of such Options under the preceding sentence, but only to the extent that such Options had become exercisable before the Optionee’s Service terminated (or became exercisable as a result of the termination) and the underlying Shares had vested before the Optionee’s Service terminated (or vested as a result of the termination). The balance of such Options shall lapse when the Optionee’s Service terminates. In the event that the Optionee dies after the termination of the Optionee’s Service but before the expiration of the Optionee’s Options, all or part of such Options may be exercised (prior to expiration) by the executors or administrators of the Optionee’s estate or by any person who has acquired such Options directly from the Optionee by beneficiary designation, bequest or inheritance, but only to the extent that such Options had become exercisable before the Optionee’s Service terminated (or became exercisable as a result of the termination) and the underlying Shares had vested before the Optionee’s Service terminated (or vested as a result of the termination).
(g) Leaves of Absence. For purposes of Subsection (f) above, Service shall be deemed to continue while the Optionee is on a bona fide leave of absence, if such leave was approved by the Company in writing and if continued crediting of Service for this purpose is expressly required by the terms of such leave or by applicable law (as determined by the Company).
(h) Death of Optionee. If an Optionee dies while the Optionee is in Service, then the Optionee’s Options shall expire on the earlier of the following dates:
(i) The expiration date determined pursuant to Subsection (e) above; or
(ii) The date 12 months after the Optionee’s death, or such earlier or later date as the Board of Directors may determine (but in no event earlier than six months after the Optionee’s death).
All or part of the Optionee’s Options may be exercised at any time before the expiration of such Options under the preceding sentence by the executors or administrators of the Optionee’s estate or by any person who has acquired such Options directly from the Optionee by beneficiary designation, bequest or inheritance, but only to the extent that such Options had become exercisable before the Optionee’s death (or became exercisable as a result of the death) and the underlying Shares had vested before the Optionee’s death (or vested as a result of the Optionee’s death). The balance of such Options shall lapse when the Optionee dies.
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(i) Post-Exercise Restrictions on Transfer of Shares. Any Shares issued upon exercise of an Option shall be subject to such special forfeiture conditions, rights of repurchase, rights of first refusal and other transfer restrictions as the Board of Directors may determine. Such restrictions shall be set forth in the applicable Stock Option Agreement and shall apply in addition to any restrictions that may apply to holders of Shares generally.
(j) Pre-Exercise Restrictions on Transfer of Options or Shares. An Option shall be transferable by the Optionee only by (i) a beneficiary designation, (ii) a will or (iii) the laws of descent and distribution, except as provided in the next sentence. If the applicable Stock Option Agreement so provides, a Nonstatutory Option shall also be transferable by gift or domestic relations order to a Family Member of the Optionee. An ISO may be exercised during the lifetime of the Optionee only by the Optionee or by the Optionee’s guardian or legal representative. In addition, an Option shall comply with all conditions of Rule 12h-1(f)(1) under the Exchange Act until the Company becomes subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act. Such conditions include, without limitation, the transferability restrictions set forth in Rule 12h-1(f)(1)(iv) and (v) under the Exchange Act, which shall apply to an Option and, prior to exercise, to the Shares to be issued upon exercise of such Option during the period commencing on the Date of Grant and ending on the earlier of (i) the date when the Company becomes subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act or (ii) the date when the Company makes a determination that it will cease to rely on the exemption afforded by Rule 12h-1(f)(1) under the Exchange Act. During such period, an Option and, prior to exercise, the Shares to be issued upon exercise of such Option shall be restricted as to any pledge, hypothecation or other transfer by the Optionee, including any short position, any “put equivalent position” (as defined in Rule 16a-1(h) under the Exchange Act) or any “call equivalent position” (as defined in Rule 16a-1(b) under the Exchange Act).
(k) Withholding Taxes. As a condition to the grant or exercise of an Option, the Optionee shall make such arrangements as the Board of Directors may require for the satisfaction of any federal, state, local or foreign withholding tax obligations that may arise in connection with such grant or exercise. The Optionee shall also make such arrangements as the Board of Directors may require for the satisfaction of any federal, state, local or foreign withholding tax obligations that may arise in connection with the vesting or transfer of Shares acquired by exercising an Option or any similar event.
(l) No Rights as a Stockholder. An Optionee, or a transferee of an Optionee, shall have no rights as a stockholder with respect to any Shares covered by the Optionee’s Option until such person becomes entitled to receive such Shares by filing a notice of exercise and paying the Exercise Price pursuant to the terms of such Option.
(m) Modification, Extension and Assumption of Options. Within the limitations of the Plan, the Board of Directors may modify, extend or assume outstanding Options or may accept the cancellation of outstanding Options (whether granted by the Company or another issuer) in return for the grant of new Options for the same or a different number of Shares and at the same or a different Exercise Price. The foregoing notwithstanding, no modification of an Option shall, without the consent of the Optionee, impair the Optionee’s rights or increase the Optionee’s obligations under such Option.
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(n) Company’s Right to Cancel Certain Options. Any other provision of the Plan or a Stock Option Agreement notwithstanding, the Company shall have the right at any time to cancel an Option that was not granted in compliance with Rule 701 under the Securities Act. Prior to canceling such Option, the Company shall give the Optionee not less than 30 days’ notice in writing. If the Company elects to cancel such Option, it shall deliver to the Optionee consideration with an aggregate Fair Market Value equal to the excess of (i) the Fair Market Value of the Shares subject to such Option as of the time of the cancellation over (ii) the Exercise Price of such Option. The consideration may be delivered in the form of cash or cash equivalents, in the form of Shares, or a combination of both. If the consideration would be a negative amount, such Option may be cancelled without the delivery of any consideration.
SECTION 7. PAYMENT FOR SHARES.
(a) General Rule. The entire Purchase Price or Exercise Price of Shares issued under the Plan shall be payable in cash or cash equivalents at the time when such Shares are purchased, except as otherwise provided in this Section 7.
(b) Services Rendered. At the discretion of the Board of Directors, Shares may be awarded under the Plan in consideration of services rendered to the Company, a Parent or a Subsidiary prior to the award.
(c) Promissory Note. At the discretion of the Board of Directors, all or a portion of the Purchase Price or Exercise Price (as the case may be) of Shares issued under the Plan may be paid with a full-recourse promissory note. The Shares shall be pledged as security for payment of the principal amount of the promissory note and interest thereon. The interest rate payable under the terms of the promissory note shall not be less than the minimum rate (if any) required to avoid the imputation of additional interest under the Code. Subject to the foregoing, the Board of Directors (at its sole discretion) shall specify the term, interest rate, amortization requirements (if any) and other provisions of such note.
(d) Surrender of Stock. At the discretion of the Board of Directors, all or any part of the Exercise Price may be paid by surrendering, or attesting to the ownership of, Shares that are already owned by the Optionee. Such Shares shall be surrendered to the Company in good form for transfer and shall be valued at their Fair Market Value as of the date when the Option is exercised.
(e) Exercise/Sale. To the extent that a Stock Option Agreement so provides, and if Stock is publicly traded, all or part of the Exercise Price and any withholding taxes may be paid by the delivery (on a form prescribed by the Company) of an irrevocable direction to a securities broker approved by the Company to sell Shares and to deliver all or part of the sales proceeds to the Company.
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(f) Other Forms of Payment. To the extent that a Stock Purchase Agreement or Stock Option Agreement so provides, the Purchase Price or Exercise Price of Shares issued under the Plan may be paid in any other form permitted by the Delaware General Corporation Law, as amended.
SECTION 8. ADJUSTMENT OF SHARES.
(a) General. In the event of a subdivision of the outstanding Stock, a declaration of a dividend payable in Shares, a combination or consolidation of the outstanding Stock into a lesser number of Shares, a reclassification, or any other increase or decrease in the number of issued shares of Stock effected without receipt of consideration by the Company, proportionate adjustments shall automatically be made in each of (i) the number of Shares available for future grants under Section 4, (ii) the number of Shares covered by each outstanding Option and (iii) the Exercise Price under each outstanding Option. In the event of a declaration of an extraordinary dividend payable in a form other than Shares in an amount that has a material effect on the Fair Market Value of the Stock, a recapitalization, a spin-off, or a similar occurrence, the Board of Directors at its sole discretion may make appropriate adjustments in one or more of (i) the number of Shares available for future grants under Section 4, (ii) the number of Shares covered by each outstanding Option or (iii) the Exercise Price under each outstanding Option; provided, however, that the Board of Directors shall in any event make such adjustments as may be required by Section 25102(o) of the California Corporations Code.
(b) Mergers and Consolidations. In the event that the Company is a party to a merger or consolidation, outstanding Options and Shares acquired under the Plan shall be subject to the agreement of merger or consolidation, which need not treat all outstanding Options in an identical manner. Such agreement, without the Optionees’ consent, may dispose of Options that are not exercisable as of the effective date of such merger or consolidation in any manner permitted by applicable law, including (without limitation) the cancellation of such Options without the payment of any consideration. Such agreement, without the Optionees’ consent, shall provide for one or more of the following with respect to Options that are exercisable as of the effective date of such merger or consolidation:
(i) The continuation of such Options by the Company (if the Company is the surviving corporation).
(ii) The assumption of such Options by the surviving corporation or its parent in a manner that complies with Section 424(a) of the Code (whether or not such Options are ISOs).
(iii) The substitution by the surviving corporation or its parent of new options for such Options in a manner that complies with Section 424(a) of the Code (whether or not such Options are ISOs).
(iv) The cancellation of such Options and a payment to the Optionees equal to the excess of (A) the Fair Market Value of the Shares subject to such Options as of the effective date of such merger or consolidation over (B) their Exercise Price. Such payment shall be made in the form of cash, cash equivalents, or securities of the surviving corporation or its parent with a Fair Market Value equal to the required amount.
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(v) The cancellation of such Options. Any exercise of such Options prior to the closing date of such merger or consolidation may be contingent on the closing of such merger or consolidation.
(c) Reservation of Rights. Except as provided in this Section 8, a Grantee, Purchaser or Optionee shall have no rights by reason of (i) any subdivision or consolidation of shares of stock of any class, (ii) the payment of any dividend or (iii) any other increase or decrease in the number of shares of stock of any class. Any issuance by the Company of shares of stock of any class, or securities convertible into shares of stock of any class, shall not affect, and no adjustment by reason thereof shall be made with respect to, the number or Exercise Price of Shares subject to an Option. The grant of an Option pursuant to the Plan shall not affect in any way the right or power of the Company to make adjustments, reclassifications, reorganizations or changes of its capital or business structure, to merge or consolidate or to dissolve, liquidate, sell or transfer all or any part of its business or assets.
SECTION 9. PRE-EXERCISE INFORMATION REQUIREMENT.
(a) Application of Requirement. This Section 9 shall apply only during a period that (i) commences when the Company begins to rely on the exemption described in Rule 12h-1(f)(1) under the Exchange Act, as determined by the Company in its sole discretion, and (ii) ends on the earlier of (A) the date when the Company ceases to rely on such exemption, as determined by the Company in its sole discretion, or (B) the date when the Company becomes subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act. In addition, this Section 9 shall in no event apply to an Optionee after he or she has fully exercised all of his or her Options.
(b) Scope of Requirement. The Company shall provide to each Optionee the information described in Rule 701(e)(3), (4) and (5) under the Securities Act. Such information shall be provided at six-month intervals, and the financial statements included in such information shall not be more than 180 days old. The foregoing notwithstanding, the Company shall not be required to provide such information unless the Optionee has agreed in writing, on a form prescribed by the Company, to keep such information confidential.
SECTION 10. MISCELLANEOUS PROVISIONS.
(a) Securities Law Requirements. Shares shall not be issued under the Plan unless the issuance and delivery of such Shares comply with (or are exempt from) all applicable requirements of law, including (without limitation) the Securities Act, the rules and regulations promulgated thereunder, state securities laws and regulations, and the regulations of any stock exchange or other securities market on which the Company’s securities may then be traded. The Company shall not be liable for a failure to issue Shares that is attributable to such requirements.
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(b) No Retention Rights. Nothing in the Plan or in any right or Option granted under the Plan shall confer upon the Grantee, Purchaser or Optionee any right to continue in Service for any period of specific duration or interfere with or otherwise restrict in any way the rights of the Company (or any Parent or Subsidiary employing or retaining the Grantee, Purchaser or Optionee) or of the Grantee, Purchaser or Optionee, which rights are hereby expressly reserved by each, to terminate his or her Service at any time and for any reason, with or without cause.
(c) Treatment as Compensation. Any compensation that an individual earns or is deemed to earn under this Plan shall not be considered a part of his or her compensation for purposes of calculating contributions, accruals or benefits under any other plan or program that is maintained or funded by the Company, a Parent or a Subsidiary.
(d) Governing Law. The Plan and all awards, sales and grants under the Plan shall be governed by, and construed in accordance with, the laws of the State of Delaware, as such laws are applied to contracts entered into and performed in such State.
SECTION 11. DURATION AND AMENDMENTS.
(a) Term of the Plan. The Plan, as set forth herein, shall become effective on the date of its adoption by the Board of Directors, subject to the approval of the Company’s stockholders. If the stockholders fail to approve the Plan within 12 months after its adoption by the Board of Directors, then any grants, exercises or sales that have already occurred under the Plan shall be rescinded and no additional grants, exercises or sales shall thereafter be made under the Plan. The Plan shall terminate automatically 10 years after the later of (i) the date when the Board of Directors adopted the Plan or (ii) the date when the Board of Directors approved the most recent increase in the number of Shares reserved under Section 4 that was also approved by the Company’s stockholders. The Plan may be terminated on any earlier date pursuant to Subsection (b) below.
(b) Right to Amend or Terminate the Plan. The Board of Directors may amend, suspend or terminate the Plan at any time and for any reason; provided, however, that any amendment of the Plan shall be subject to the approval of the Company’s stockholders if it (i) increases the number of Shares available for issuance under the Plan (except as provided in Section 8) or (ii) materially changes the class of persons who are eligible for the grant of ISOs. Stockholder approval shall not be required for any other amendment of the Plan. If the stockholders fail to approve an increase in the number of Shares reserved under Section 4 within 12 months after its adoption by the Board of Directors, then any grants, exercises or sales that have already occurred in reliance on such increase shall be rescinded and no additional grants, exercises or sales shall thereafter be made in reliance on such increase.
(c) Effect of Amendment or Termination. No Shares shall be issued or sold under the Plan after the termination thereof, except upon exercise of an Option (or any other right to purchase Shares) granted under the Plan prior to such termination. The termination of the Plan, or any amendment thereof, shall not affect any Share previously issued or any Option previously granted under the Plan.
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SECTION 12. DEFINITIONS.
(a) “Board of Directors” shall mean the Board of Directors of the Company, as constituted from time to time.
(b) “Code” shall mean the Internal Revenue Code of 1986, as amended.
(c) “Committee” shall mean a committee of the Board of Directors, as described in Section 2(a).
(d) “Company” shall mean CrowdTwist, Inc., a Delaware corporation.
(e) “Consultant” shall mean a person who performs bona fide services for the Company, a Parent or a Subsidiary as a consultant or advisor, excluding Employees and Outside Directors.
(f) “Date of Grant” shall mean the date of grant specified in the applicable Stock Option Agreement, which date shall be the later of (i) the date on which the Board of Directors resolved to grant the Option or (ii) the first day of the Optionee’s Service.
(g) “Disability” shall mean that the Optionee is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment.
(h) “Employee” shall mean any individual who is a common-law employee of the Company, a Parent or a Subsidiary.
(i) “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.
(j) “Exercise Price” shall mean the amount for which one Share may be purchased upon exercise of an Option, as specified by the Board of Directors in the applicable Stock Option Agreement.
(k) “Fair Market Value” shall mean the fair market value of a Share, as determined by the Board of Directors in good faith. Such determination shall be conclusive and binding on all persons.
(l) “Family Member” shall mean (i) any child, stepchild, grandchild, parent, stepparent, grandparent, spouse, former spouse, sibling, niece, nephew, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law or sister-in-law, including adoptive relationships, (ii) any person sharing the Optionee’s household (other than a tenant or employee), (iii) a trust in which persons described in Clause (i) or (ii) have more than 50% of the beneficial interest, (iv) a foundation in which persons described in Clause (i) or (ii) or the Optionee control the management of assets and (v) any other entity in which persons described in Clause (i) or (ii) or the Optionee own more than 50% of the voting interests.
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(m) “Grantee” shall mean a person to whom the Board of Directors has awarded Shares under the Plan.
(n) “ISO” shall mean an employee incentive stock option described in Section 422(b) of the Code.
(o) “Nonstatutory Option” shall mean a stock option not described in Sections 422(b) or 423(b) of the Code.
(p) “Option” shall mean an ISO or Nonstatutory Option granted under the Plan and entitling the holder to purchase Shares.
(q) “Optionee” shall mean a person who holds an Option.
(r) “Outside Director” shall mean a member of the Board of Directors who is not an Employee.
(s) “Parent” shall mean any corporation (other than the Company) in an unbroken chain of corporations ending with the Company, if each of the corporations other than the Company owns stock possessing 50% or more of the total combined voting power of all classes of stock in one of the other corporations in such chain. A corporation that attains the status of a Parent on a date after the adoption of the Plan shall be considered a Parent commencing as of such date.
(t) “Plan” shall mean this CrowdTwist, Inc. 2010 Stock Plan.
(u) “Purchase Price” shall mean the consideration for which one Share may be acquired under the Plan (other than upon exercise of an Option), as specified by the Board of Directors.
(v) “Purchaser” shall mean a person to whom the Board of Directors has offered the right to purchase Shares under the Plan (other than upon exercise of an Option).
(w) “Securities Act” shall mean the Securities Act of 1933, as amended.
(x) “Service” shall mean service as an Employee, Outside Director or Consultant.
(y) “Share” shall mean one share of Stock, as adjusted in accordance with Section 8 (if applicable).
(z) “Stock” shall mean the Common Stock of the Company.
(aa) “Stock Grant Agreement” shall mean the agreement between the Company and a Grantee who is awarded Shares under the Plan that contains the terms, conditions and restrictions pertaining to the award of such Shares.
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(bb) “Stock Option Agreement” shall mean the agreement between the Company and an Optionee that contains the terms, conditions and restrictions pertaining to the Optionee’s Option.
(cc) “Stock Purchase Agreement” shall mean the agreement between the Company and a Purchaser who purchases Shares under the Plan that contains the terms, conditions and restrictions pertaining to the purchase of such Shares.
(dd) “Subsidiary” shall mean any corporation (other than the Company) in an unbroken chain of corporations beginning with the Company, if each of the corporations other than the last corporation in the unbroken chain owns stock possessing 50% or more of the total combined voting power of all classes of stock in one of the other corporations in such chain. A corporation that attains the status of a Subsidiary on a date after the adoption of the Plan shall be considered a Subsidiary commencing as of such date.
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EXHIBIT A
SCHEDULE OF SHARES RESERVED FOR ISSUANCE UNDER THE PLAN
| Date of Board |
Date of Stockholder |
Number of |
Cumulative Number | |||
| July 1, 2010 |
July 7, 2010 | Not Applicable | 444,444 | |||
| September 15, 2011 |
September 15, 2011 | 674,159 | 1,118,603 | |||
| December 17, 2013 |
December 17, 2013 | 421,120 | 1,539,723 | |||
| June 12, 2014 |
June 12, 2014 | 188,886 | 1,728,609 | |||
| January 21, 2015 |
February 17, 2015 | 960,000 | 2,688,609 | |||
| December 20, 2017 |
January 19, 2018 | 380,000 | 3,068,609 | |||
| August 22, 2018 |
September 7, 2018 | 353,260 | 3,421,869 | |||
E-1
Exhibit 99.2
AMENDMENT TO THE
CROWDTWIST, INC. 2010 STOCK PLAN
This Amendment (this “Amendment”) to the CrowdTwist, Inc. 2010 Stock Plan (the “Plan”), is effective as of November 8, 2019 (the “Effective Date”).
W I T N E S S E T H:
WHEREAS, CrowdTwist, Inc. (the “Company”) maintains the Plan;
WHEREAS, under Section 11 of the Plan, the Board of Directors of the Company (the “Board”) may amend the Plan at any time and for any reason;
WHEREAS, OC Acquisition LLC, a Delaware limited liability company (“Parent”), Crest Acquisition Corporation, a Delaware corporation and a wholly owned subsidiary of Parent (“Merger Sub”), the Company, and Fortis Advisors LLC, a Delaware limited liability company, as Holder Representative, are entering into an Agreement and Plan of Merger (“Merger Agreement”) pursuant to which Merger Sub will be merged with and into the Company; and
WHEREAS, in accordance with Section 4.14 of the Merger Agreement, the Company desires to amend certain terms of the Plan as set forth in this Amendment.
NOW, THEREFORE, conditioned upon the Closing of the Merger (as each term is defined in the Merger Agreement) and effective as of the Effective Date, the Plan is hereby amended as follows:
1. Section 6 of the Plan is amended to add a new subsection (o) to read in its entirety as follows:
(o) Notwithstanding anything in the Plan to the contrary, except as provided in Section 8, neither the Board of Directors nor any successor board or committee shall have the authority to effect the cancellation of any or all outstanding Options (as may be assumed or continued in full force and effect in connection with an Acquisition) and to grant in substitution thereof new Options covering the same or different number of shares but with an Exercise Price per share based on the Fair Market Value per share on the new Option grant date, or otherwise directly reduce the Exercise Price in effect for such outstanding Options.
2. Section 8 of the Plan is amended and restated in its entirety to read as follows:
8. Adjustment of Shares.
(a) If the Shares shall be subdivided or combined into a greater or smaller number of shares or if the Company shall issue Shares as a stock dividend on its outstanding Shares, the number of Shares deliverable upon the exercise of outstanding Options shall be appropriately increased or decreased proportionately, and appropriate adjustments shall be made to the Exercise Price per share to reflect such subdivision, combination or stock dividend.
(b) In the event of an Acquisition (as defined below), each outstanding Option, as determined by the Board of Directors in its discretion, may be (i) assumed by the successor corporation (or parent thereof), (ii) canceled and substituted with an option or other award granted by the successor corporation (or parent thereof), (iii) otherwise continued in full force and effect pursuant to the terms of the Acquisition, (iv) cancelled and replaced with a cash retention program of the Company or any successor corporation (or parent thereof), and which, for Options, preserves the spread existing on the unvested shares subject to the Option at the time of the Acquisition (the excess of the Fair Market Value of those shares over the aggregate Exercise Price for such shares) and, subject to subsection (d) below, provides for subsequent payout of the cash payment (including the spread) in accordance with the same vesting schedule applicable to the unvested shares subject to the Options, but only if such replacement cash program would not result in the treatment of the Option as an item of deferred compensation subject to Section 409A of the Code, or (v) any combination of the foregoing. Determinations by the Board of Directors under this Section need not be uniform among Optionees. In the event of an Acquisition, the Board of Directors may determine that any outstanding Option that is partially vested and partially unvested at the effective time of the Acquisition shall be treated as two separate Options, consisting of a vested Option, to the extent such Option is vested, and an unvested Option, to the extent such Option is unvested.
(c) To the extent an outstanding Option is not assumed, substituted, continued or replaced in accordance with subsection (b), the Board of Directors in its discretion shall have the authority to provide that to the extent any Option remains unexercised and outstanding on the effective date of the Acquisition, such Option shall be cancelled and terminate and the Optionee shall become entitled to receive, upon consummation of the Acquisition and subject to subsection (d), a lump sum cash payment in an amount equal to the product of (A) the number of Shares subject to the Option and (B) the excess of (x) the Fair Market Value per Share on the date of the Acquisition over (y) the per share Exercise Price in effect for such Option. However, any such Option shall be subject to cancellation and termination, without cash payment or other consideration due the grantee, if the Fair Market Value per Share on the date of such Acquisition is less than the per share Exercise Price or purchase price in effect for such Option.
(d) The Board of Directors shall have the authority to provide that any escrow, holdback, earn-out or similar provisions in the definitive agreement effecting the Acquisition shall apply to any cash payment made pursuant to subsection (b) or subsection (c) to the same extent and in the same manner as such provisions apply to a holder of a Share.
(e) Immediately following the consummation of an Acquisition, (i) all outstanding Options shall terminate and cease to be outstanding, except to the extent assumed by the successor corporation (or parent thereof) or otherwise continued in full force and effect pursuant to the terms of the Acquisition, and (ii) no further Options may be granted under the Plan.
(f) In the event of any Acquisition, the Board of Directors in its discretion may determine that all outstanding repurchase rights (i) are to be assigned to the successor corporation (or parent thereof) or otherwise continued in full force and effect pursuant to the terms of the Acquisition or (ii) are to be terminated and the Shares subject to those terminated rights are to immediately vest in full.
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(g) Each Option that is assumed in connection with an Acquisition or otherwise continued in effect shall be appropriately adjusted, immediately after such Acquisition, to apply to the number and class of securities into which the Shares subject to that Option would have been converted in consummation of such Acquisition had those shares actually been outstanding at that time. Appropriate adjustments shall also be made to (i) the number and class of securities available for issuance under the Plan following the consummation of such Acquisition, (ii) the Exercise Price payable per share under each outstanding Option, provided the aggregate Exercise Price or purchase price payable for such securities shall remain the same, and (iii) the number and/or class of securities subject to the Company’s outstanding repurchase rights under the Plan and the repurchase price payable per share. To the extent the actual holders of the Company’s outstanding Shares receive cash consideration for their Shares in consummation of the Acquisition, the successor corporation (or parent thereof) may, in connection with the assumption or continuation of the outstanding Options and subject to the Board of Directors’ approval, substitute one or more shares of its own common stock with a Fair Market Value equivalent to the cash consideration paid per Share in such Acquisition.
(h) If the vesting of any Option is based, in whole or in part, on performance, and such Option is assumed or otherwise continued in full force and effect in connection with an Acquisition, the Board of Directors shall determine how the unvested portion of the Option shall vest following the Acquisition, including without limitation, whether such Option shall automatically become vested at the target or maximum level of performance, whether such Option shall remain subject to any continuing service requirements, and any appropriate adjustments to the performance measures.
(i) The Board of Directors shall have the discretion, exercisable either at the time an Option is granted or at any time while such Option remains outstanding, to structure such Option so that (i) all or a portion of the shares subject to the Option shall automatically accelerate and vest in full (and any repurchase rights of the Company with respect to the unvested shares subject to that Option shall immediately terminate) upon the occurrence of an Acquisition, whether or not such Option is to be assumed in the Acquisition or otherwise continued in effect or (ii) all or a portion of the shares subject to such Option will automatically vest on an accelerated basis should the Optionee’s employment or other relationship with the Company (or successor corporation) terminate by reason of an involuntary termination within a designated period following the effective date of any Acquisition in which the Option is assumed or otherwise continued in effect and the repurchase rights applicable to those shares do not otherwise terminate.
(j) In the event of the proposed dissolution or liquidation of the Company, each Option will terminate immediately prior to the consummation of such proposed action or at such other time and subject to such other conditions as shall be determined by the Board of Directors.
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(k) Except as expressly provided herein, no issuance by the Company of shares of stock of any class, or securities convertible into shares of stock of any class, shall affect, and no adjustment by reason thereof shall be made with respect to, the number or price of shares subject to an Option. No adjustments shall be made for dividends paid in cash or in property other than Stock.
(l) Unless determined otherwise by the Board of Directors, no fractional shares shall be issued under the Plan.
(m) The portion of any ISO accelerated in connection with an Acquisition shall remain exercisable as an ISO only to the extent the applicable One Hundred Thousand Dollar ($100,000) annual limitation under Section 422(d) of the Code is not exceeded. To the extent such dollar limitation is exceeded, the accelerated portion of such Option shall be deemed a Nonstatutory Option.
(n) The grant of Options under the Plan shall in no way affect the right of the Company to adjust, classify, reorganize or otherwise change its capital or business structure or to merge, consolidate, dissolve, liquidate or sell or transfer all or any part of its business or assets.
(o) As used in the Plan, “Acquisition” means:
(i) a merger or consolidation in which the Company is not the surviving entity, except for a transaction the principal purpose of which is to change the state in which the Company is incorporated;
(ii) the sale, transfer, or other disposition of all or substantially all of the assets of the Company; or
(iii) the acquisition in a single transaction or series of related transactions by any person or related group of persons (other than the Company or by a Company-sponsored employed benefit plan) of beneficial ownership (within the meaning of Rule 13d-3 of the Exchange Act) of securities possessing more than fifty percent (50%) of the total combined voting power of the Company’s outstanding securities; provided, however, that the Board or Committee shall determine under this clause (iii) whether multiple transactions are related, and its determination shall be final, binding and conclusive.
3. Except as modified by this Amendment, all the terms and provisions of the Plan shall continue in full force and effect.
[Remainder of Page Intentionally Left Blank]
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IN WITNESS WHEREOF, the undersigned has caused this Amendment to be executed as of the date set forth below, but effective as of the Effective Date.
| CROWDTWIST, INC. |
| /s/ Scott Matthews |
| By |
| Scott Matthews |
| Print Name |
| Chief Executive Officer |
| Title |
| November 8, 2019 |
| Date |