Attached files
file | filename |
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10-K - FORM 10-K - Cardiac Science CORP | v55247e10vk.htm |
EX-31.1 - EX-31.1 - Cardiac Science CORP | v55247exv31w1.htm |
EX-21.1 - EX-21.1 - Cardiac Science CORP | v55247exv21w1.htm |
EX-23.1 - EX-23.1 - Cardiac Science CORP | v55247exv23w1.htm |
EX-32.1 - EX-32.1 - Cardiac Science CORP | v55247exv32w1.htm |
EX-32.2 - EX-32.2 - Cardiac Science CORP | v55247exv32w2.htm |
EX-10.4 - EX-10.4 - Cardiac Science CORP | v55247exv10w4.htm |
EX-31.2 - EX-31.2 - Cardiac Science CORP | v55247exv31w2.htm |
EX-10.20 - EX-10.20 - Cardiac Science CORP | v55247exv10w20.htm |
EX-10.13 - EX-10.13 - Cardiac Science CORP | v55247exv10w13.htm |
EX-10.17 - EX-10.17 - Cardiac Science CORP | v55247exv10w17.htm |
EX-10.22 - EX-10.22 - Cardiac Science CORP | v55247exv10w22.htm |
Exhibit 10.5
CARDIAC SCIENCE CORPORATION
2002 EMPLOYEE STOCK PURCHASE PLAN
SECTION 1. PURPOSE
The purposes of the Cardiac Science Corporation 2002 Employee Stock Purchase Plan (the Plan)
are (a) to assist employees of Cardiac Science Corporation, a Delaware corporation (the Company),
and its designated subsidiaries in acquiring a stock ownership interest in the Company pursuant to
a plan that is intended to qualify as an employee stock purchase plan under Section 423 of the
Internal Revenue Code of 1986, as amended, and (b) to encourage employees to remain in the employ
of the Company and its subsidiaries.
SECTION 2. DEFINITIONS
In the Plan:
Additional Shares has the meaning set forth in Section 6.
Board means the Board of Directors of the Company.
Code means the Internal Revenue Code of 1986, as amended from time to time.
Committee means the Companys Compensation Committee or any other Board committee appointed
by the Board to administer the Plan.
Common Stock means the common stock, par value $0.001 per share, of the Company.
Company means Cardiac Science Corporation, a Delaware corporation.
Company Transaction means consummation of either:
(a) a merger or consolidation of the Company with or into any another company, entity or
person or
(b) a sale, lease, exchange or other transfer in one transaction or a series of related
transactions of all or substantially all the Companys outstanding securities or all or
substantially all the Companys assets;
provided, however, that a Company Transaction shall not include a Related Party Transaction.
Designated Subsidiary means any domestic Subsidiary Corporation or any other Subsidiary
Corporation designated as such by the Board or the Committee.
Eligible Compensation means all W-2 earnings (e.g. wages, tips, overtime pay, bonuses and
commissions, as included on IRS Form W-2) and such amounts of gross earnings as are deferred by an
Eligible Employee (a) under a qualified cash or deferred arrangement described in Section 401(k) of
the Code or (b) to a plan qualified under Section 125 of the Code. Eligible Compensation does not
include taxable fringe benefits, reimbursement or other expense allowances, moving expenses,
welfare benefits, deferred compensation (other than deferred amounts noted above), gain from stock
option exercises or any other special payments.
Eligible Employee means any employee of the Company or a Designated Subsidiary who is in the
employ of the Company or any Designated Subsidiary on one or more Offering Dates and who meets the
following criteria:
(a) the employee does not, immediately after the Option is granted, own stock (as defined by
the Code) possessing 5% or more of the total combined voting power or value of all classes of stock
of the Company or of a Parent or Subsidiary Corporation;
(b) the employees customary employment is for 20 hours or more per week or any lesser number
of hours established by the Plan Administrator for a future Offering Period;
(c) if specified by the Plan Administrator for a future Offering Period, the employee
customarily works a minimum of five months per year or any lesser number of months established by
the Plan Administrator; and
(d) if specified by the Plan Administrator for a future Offering Period, the employee has been
employed for a minimum of one year as of an Offering Period or any lesser or greater minimum
employment period not to exceed two years that is established by the Plan Administrator for a
future Offering Period.
If the Company permits any employee of a Designated Subsidiary to participate in the Plan, then all
employees of that Designated Subsidiary who meet the requirements of this paragraph shall also be
considered Eligible Employees.
Enrollment Period has the meaning set forth in Section 7.1. |
ESPP Broker has the meaning set forth in Section 10.1.
Fair Market Value shall be as established in good faith by the Plan Administrator or (a) if
the Common Stock is listed on the Nasdaq National Market, the closing sales price for the Common
Stock as reported by that market for regular session trading on the Offering Date or the Purchase
Date, as applicable, unless the Plan Administrator determines otherwise for a future Offering
Period or (b) if the Common Stock is listed on the New York Stock Exchange or the American Stock
Exchange, the closing sales price for the Common Stock as such price is officially quoted in the
composite tape of transactions on such exchange for regular session trading on the Offering Date or
the Purchase Date, as applicable, unless the
Plan Administrator determines otherwise for a future Offering Period. If there is no such
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reported price for the Common Stock for the date in question, then such price on the last preceding
date for which such price exists shall be determinative of Fair Market Value.
Offering Period has the meaning set forth in Section 5.1.
Offering Date means the first day of an Offering Period.
Option means an option granted under the Plan to an Eligible Employee to purchase shares of
Common Stock.
Parent Corporation means any corporation, other than the Company, in an unbroken chain of
corporations ending with the Company, if, at the time of the granting of the Option, 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.
Participant means any Eligible Employee who has elected to participate in an Offering Period
in accordance with the procedures set forth in Section 7 and who has not withdrawn from the Plan or
whose participation in the Plan is not otherwise terminated.
Plan means the Cardiac Science Corporation 2002 Employee Stock Purchase Plan, as it may be
amended from time to time.
Plan Administrator has the meaning set forth in Section 3.1.
Purchase Date means the last day of each Purchase Period.
Purchase Period has the meaning set forth in Section 5.2.
Purchase Price has the meaning set forth in Section 6.
Related Party Transaction means (a) a merger or consolidation of the Company in which the
holders of the outstanding voting securities of the Company immediately prior to the merger or
consolidation hold at least a majority of the outstanding voting securities of a successor company
(as defined in Section 20.3) immediately after the merger or consolidation; (b) a sale, lease,
exchange or other transfer of the Companys assets to a majority-owned subsidiary company; (c) a
transaction undertaken for the principal purpose of restructuring the capital of the Company,
including but not limited to, reincorporating the Company in a different jurisdiction or creating a
holding company; or (d) a corporate dissolution or liquidation.
Securities Act means the Securities Act of 1933, as amended.
Subscription has the meaning set forth in Section 7.1.
Subsidiary Corporation means any corporation, other than the Company, in an unbroken chain
of corporations beginning with the Company, if, at the time of the granting of
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the Option, 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.
SECTION 3. ADMINISTRATION
3.1 Plan Administrator
The Plan shall be administered by the Board or the Committee or, if and to the extent the
Board or the Committee designates an executive officer of the Company to administer the Plan, by
such executive officer (each, the Plan Administrator). Any decisions made by the Plan
Administrator shall be applicable equally to all Eligible Employees.
3.2 Administration and Interpretation by the Plan Administrator
Subject to the provisions of the Plan, the Plan Administrator shall have the authority, in its
sole discretion, to determine all matters relating to Options granted under the Plan, including all
terms, conditions, restrictions and limitations of Options; provided, however, that all
Participants granted Options pursuant to the Plan shall have the same rights and privileges within
the meaning of Code Section 423. The Plan Administrator shall also have exclusive authority to
interpret the Plan and may from time to time adopt, and change, rules and regulations of general
application for the Plans administration. The Plan Administrators interpretation of the Plan and
its rules and regulations, and all actions taken and determinations made by the Plan Administrator
pursuant to the Plan, unless reserved to the Board or the Committee, shall be conclusive and
binding on all parties involved or affected. The Plan Administrator may delegate administrative
duties to such of the Companys other officers or employees as the Plan Administrator so
determines.
SECTION 4. STOCK SUBJECT TO PLAN
Subject to adjustment from time to time as provided in Section 20.1, the maximum number of
shares of Common Stock that shall be available for issuance under the Plan shall be:
(a) 175,419 shares, plus
(b) an annual increase to be added as of the first day of the Companys fiscal year equal to
the least of (i) 175,419 shares and (ii) 2% of the outstanding shares of Common Stock of the
Company as of the end of the Companys immediately preceding fiscal year on a fully diluted basis
(assuming exercise of all outstanding options and warrants and conversion of all outstanding
convertible securities) and (iii) a lesser amount determined by the Board; provided, however, that
any shares from any increases in previous years that are not actually issued shall continue to be
added to the aggregate number of shares available for issuance under the Plan.
Shares issued under the Plan shall be drawn from authorized and unissued shares or shares
subsequently acquired by the Company as treasury shares.
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SECTION 5. OFFERING AND PURCHASE PERIODS
5.1 Offering Periods
(a) Except as otherwise set forth below, the Plan shall be implemented pursuant to twelve
month offering periods (an Offering Period). Each Offering Period shall commence on December 1
of each year and shall end on the following November 30.
(b) Notwithstanding the foregoing, the Plan Administrator may establish (i) a different term
for one or more future Offering Periods and (ii) different commencing and ending dates for such
future Offering Periods; provided, however, that an Offering Period may not exceed five years; and
provided, further, that if the Purchase Price may be less than 85% of the Fair Market Value of the
Common Stock on the Purchase Date, the Offering Period may not exceed 27 months.
(c) In the event the first or the last day of an Offering Period is not a regular business
day, then the first day of the Offering Period shall be deemed to be the next regular business day
and the last day of the Offering Period shall be deemed to be the last preceding regular business
day.
5.2 Purchase Periods
(a) Each Offering Period shall consist of four consecutive purchase periods of three months
duration (each, a Purchase Period). The last day of each Purchase Period shall be the Purchase
Date for such Purchase Period. Except as otherwise set forth below, a Purchase Period shall
commence on December 1, March 1, June 1 and September 1 of each year and shall end three months
later on the next February 28, May 31, August 31, and November 30 respectively, occurring
thereafter.
(b) Notwithstanding the foregoing, the Plan Administrator may establish for a future Offering
Period (i) a different term for the initial Purchase Period or for one or more future Purchase
Periods and (ii) different commencing and ending dates for any such Purchase Period.
(c) In the event the first or last day of a Purchase Period is not a regular business day,
then the first day of the Purchase Period shall be deemed to be the next regular business day and
the last day of the Purchase Period shall be deemed to be the last preceding regular business day.
5.3 Governmental Approval; Shareholder Approval
Notwithstanding any other provision of the Plan to the contrary, an Option granted pursuant to
the Plan shall be subject to (a) obtaining all necessary governmental approvals and qualifications
for the Plan and (b) obtaining shareholder approval of the Plan.
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SECTION 6. PURCHASE PRICE
(a) The purchase price (the Purchase Price) at which Common Stock may be acquired in an
Offering Period pursuant to the exercise of all or any portion of an Option shall be 85% of the
lesser of (i) the Fair Market Value of the Common Stock on the Offering Date of such Offering
Period and (ii) the Fair Market Value of the Common Stock on the Purchase Date.
(b) Notwithstanding the foregoing, if an increase in the number of shares authorized for
issuance under the Plan (other than an annual increase pursuant to Section 4) is approved and all
or a portion of such additional shares are to be issued during one or more Offering Periods that
are underway at the time of shareholder approval of such increase (the Additional Shares), then,
if as of the date of such shareholder approval, the Fair Market Value of a share of Common Stock is
higher than the Fair Market Value on the Offering Date for any such Offering Period, the Purchase
Price for the Additional Shares shall be 85% of the lesser of (i) the Common Stocks Fair Market
Value on the date of such shareholder approval and (ii) the Fair Market Value of the Common Stock
on the Purchase Date.
SECTION 7. PARTICIPATION IN THE PLAN
7.1 Initial Participation
An Eligible Employee shall become a Participant on the first Offering Date after satisfying
the eligibility requirements and delivering to the Plan Administrator during the enrollment period
established by the Plan Administrator (the Enrollment Period) a subscription (the
Subscription):
(a) indicating the Eligible Employees election to participate in the Plan;
(b) authorizing payroll deductions and stating the amount to be deducted regularly from the
Participants Eligible Compensation; and
(c) authorizing the purchase of Common Stock for the Participant in each Purchase Period.
An Eligible Employee who does not deliver a Subscription as provided above during the
Enrollment Period shall not participate in the Plan for that Offering Period or for any subsequent
Offering Period unless such Eligible Employee subsequently enrolls in the Plan by filing a
Subscription with the Company during the Enrollment Period for such subsequent Offering Period.
The Company may, from time to time, change the Enrollment Period for a
future Offering Period as deemed advisable by the Plan Administrator, in its sole discretion,
for the proper administration of the Plan.
An employee who becomes eligible to participate in the Plan after an Offering Period has
commenced shall not be eligible to participate in such Offering Period but may participate in any
subsequent Offering Period, provided that such employee is still an
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Eligible Employee as of the
commencement of any such subsequent Offering Period. Eligible Employees may not participate in
more than one Offering Period at a time.
7.2 Continued Participation
A Participant shall automatically participate in the next Offering Period until such time as
such Participant withdraws from the Plan pursuant to Section 11.3 or terminates employment as
provided in Section 13.
SECTION 8. LIMITATIONS ON RIGHT TO PURCHASE SHARES
8.1 Number of Shares Purchased
(a) No Participant shall be entitled to purchase Common Stock under the Plan (or any other
employee stock purchase plan that is intended to meet the requirements of Code Section 423
sponsored by the Company, a Parent Corporation or a Subsidiary Corporation) with a Fair Market
Value exceeding $25,000 (such value determined as of the Offering Date for each Offering Period or
such other limit as may be imposed by the Code) in any calendar year in which a Participant
participates in the Plan (or any other employee stock purchase plan described in this Section 8.1).
(b) No Participant shall be entitled to purchase more than 525 shares of stock (or such other
number as the Plan Administrator shall specify for a future Offering Period) under the Plan in any
Purchase Period.
(c) For a future Offering Period, the Board or the Committee may specify a different maximum
number of shares that may be purchased by any Participant, as well as a maximum aggregate number of
shares that may be purchased by all Participants, pursuant to such Offering Period.
8.2 Pro Rata Allocation
In the event the number of shares of Common Stock that might be purchased by all Participants
exceeds the number of shares of Common Stock available in the Plan, in a Purchase Period or in an
Offering Period, the Plan Administrator shall make a pro rata allocation of the remaining shares of
Common Stock in as uniform a manner as shall be practicable and as the Plan Administrator shall
determine to be equitable. Fractional shares may not be issued under the Plan unless the Plan
Administrator determines otherwise for a future Offering Period.
SECTION 9. PAYMENT OF PURCHASE PRICE
9.1 General Rules
Subject to Section 7.2 and Section 9.11, Common Stock that is acquired pursuant to the
exercise of all or any portion of an Option may be paid for only by means of payroll deductions
from the Participants Eligible Compensation. Except as set forth in this
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Section 9, the amount of
compensation to be withheld from a Participants Eligible Compensation during each pay period shall
be determined by the Participants Subscription.
9.2 Percent Withheld
The amount of payroll withholding for each Participant for purchases pursuant to the Plan
during any pay period shall be at least 1% but shall not exceed 15% of the Participants Eligible
Compensation for such pay period (or such other higher percentage as the Plan Administrator may
establish from time to time for a future Offering Period). Amounts shall be withheld in whole
percentages only.
9.3 Payroll Deductions
Payroll deductions shall commence on the first payday following the Offering Date and shall
continue through the last payday of the Offering Period unless sooner altered or terminated as
provided in the Plan.
9.4 Memorandum Accounts
Individual accounts shall be maintained for each Participant for memorandum purposes only.
All payroll deductions from a Participants compensation shall be credited to such account but
shall be deposited with the general funds of the Company. All payroll deductions received or held
by the Company may be used by the Company for any corporate purpose.
9.5 No Interest
No interest shall be paid on payroll deductions received or held by the Company.
9.6 Acquisition of Common Stock
On each Purchase Date of an Offering Period, each Participant shall automatically acquire,
pursuant to the exercise of the Participants Option, the number of shares of Common Stock arrived
at by dividing the total amount of the Participants accumulated payroll deductions for the
Purchase Period by the Purchase Price; provided, however, that the number of shares of Common Stock
purchased by the Participant shall not exceed the number of whole shares of Common Stock so
determined, unless the Plan Administrator has determined for a future Offering Period that
fractional shares may be issued under the Plan; and provided, further, that the number of shares of
Common Stock purchased by the
Participant shall not exceed the number of shares for which Options have been granted to the
Participant pursuant to Section 8.1.
9.7 Refund of Excess Amounts
Any cash balance remaining in the Participants account at the termination of a Purchase
Period that is not sufficient to purchase a whole share of Common Stock shall be applied to the
purchase of Common Stock in the next Purchase Period, provided the
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Participant participates in the
next Purchase Period and the purchase complies with Section 8.1. All other amounts remaining in a
Participants account after a Purchase Date shall be refunded to the Participant as soon as
practical after the Purchase Date without the payment of any interest.
9.8 Withholding Obligations
At the time the Option is exercised, in whole or in part, or at the time some or all the
Common Stock is disposed of, the Participant shall make adequate provision for local, state,
federal and foreign withholding obligations of the Company, if any, that arise upon exercise of the
Option or upon disposition of the Common Stock. The Company may withhold from the Participants
compensation the amount necessary to meet such withholding obligations.
9.9 Termination of Participation
No Common Stock shall be purchased on behalf of a Participant on a Purchase Date if his or her
participation in a current Offering Period or the Plan has terminated on or before such Purchase
Date or if the Participant has otherwise terminated employment prior to a Purchase Date.
9.10 Procedural Matters
The Company may, from time to time, establish (a) limitations on the frequency and/or number
of any permitted changes in the amount withheld during an Offering Period, as set forth in Section
11.1, (b) an exchange ratio applicable to amounts withheld in a currency other than U.S. dollars,
(c) payroll withholding in excess of the amount designated by a Participant in order to adjust for
delays or mistakes in the Companys processing of properly completed withholding elections, and (d)
such other limitations or procedures as deemed advisable by the Company in the Companys sole
discretion that are consistent with the Plan and in accordance with the requirements of Code
Section 423.
9.11 Leaves of Absence
During unpaid leaves of absence approved by the Company and meeting the requirements of the
applicable treasury regulations promulgated under the Code, a Participant may elect to continue
participation in the Plan by delivering cash payments to the Company on the Participants normal
paydays equal to the amount of his or her payroll deduction under the Plan had the Participant not
taken a leave of absence. Such cash payments will be based
upon the Participants base salary immediately before the leave of absence. Currently, the
treasury regulations provide that a Participant may continue participation in the Plan only during
the first 90 days of a leave of absence unless the Participants reemployment rights are guaranteed
by statute or contract.
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SECTION 10. COMMON STOCK PURCHASED UNDER THE PLAN
10.1 ESPP Broker
If the Plan Administrator designates or approves a stock brokerage or other financial services
firm (the ESPP Broker) to hold shares purchased under the Plan for the accounts of Participants,
the following procedures shall apply. Promptly following each Purchase Date, the number of shares
of Common Stock purchased by each Participant shall be deposited into an account established in the
Participants name with the ESPP Broker. Each Participant shall be the beneficial owner of the
Common Stock purchased under the Plan and shall have all rights of beneficial ownership in such
Common Stock. A Participant shall be free to undertake a disposition of the shares of Common Stock
in his or her account at any time, but, in the absence of such a disposition, the shares of Common
Stock must remain in the Participants account at the ESPP Broker until the holding period set
forth in Code Section 423 has been satisfied. With respect to shares of Common Stock for which the
holding period set forth above has been satisfied, the Participant may move those shares of Common
Stock to another brokerage account of the Participants choosing or request that a stock
certificate be issued and delivered to him or her. Dividends paid in the form of shares of Common
Stock with respect to Common Stock in a Participants account shall be credited to such account. A
Participant who is not subject to payment of U.S. income taxes may move his or her shares of Common
Stock to another brokerage account of his or her choosing or request that a stock certificate be
delivered to him or her at any time, without regard to the Code Section 423 holding period.
10.2 Notice of Disposition
By entering the Plan, each Participant agrees to promptly give the Company notice of any
Common Stock disposed of within the later of one year from the Purchase Date and two years from the
Offering Date for such Common Stock, showing the number of such shares disposed of and the Purchase
Date and Offering Date for such Common Stock. This notice shall not be required if and so long as
the Company has a designated ESPP Broker.
SECTION 11. CHANGES IN WITHHOLDING AMOUNTS AND
VOLUNTARY WITHDRAWAL
VOLUNTARY WITHDRAWAL
11.1 Changes in Withholding Amounts
(a) Unless the Plan Administrator establishes otherwise for a future Offering Period, during a
Purchase Period, a Participant may elect to reduce payroll contributions to 0% by completing and
filing with the Company an amended Subscription authorizing cessation of payroll deductions. The
change in rate shall be effective as of the beginning of
the next payroll period following the date of filing the amended Subscription, provided the
amended Subscription is filed prior to any date required by the Company, and, if not, as of the
beginning of the next succeeding payroll period. All payroll deductions accrued by a Participant
as of a Change Notice Date shall continue to be applied toward the purchase of Common Stock on the
Purchase Date, unless a Participant withdraws from an Offering
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Period or the Plan, pursuant to
Section 11.2 or Section 11.3 below. An amended Subscription shall remain in effect until the
Participant changes such Subscription in accordance with the terms of the Plan.
(b) Unless the Plan Administrator determines otherwise for a future Offering Period, a
Participant may elect to increase or decrease the amount to be withheld from his or her
compensation for future Purchase Periods by filing with the Plan Administrator an amended
Subscription; provided, however, that notice of such election must be delivered to the Plan
Administrator at least ten days prior to such Purchase Period in such form and in accordance with
such terms as the Plan Administrator may establish for an Offering Period. An amended Subscription
shall remain in effect until the Participant changes such Subscription in accordance with the terms
of the Plan.
(c) Notwithstanding the foregoing, to the extent necessary to comply with Code Section 423 and
Section 8.1, a Participants payroll deductions may be decreased to 0% during any Purchase Period
if the aggregate of all payroll deductions accumulated with respect to one or more Purchase Periods
ending within the same calendar year exceeds $25,000 of Fair Market Value of the Common Stock
determined as of the first day of an Offering Period ($21,250 to the extent the Purchase Price may
be 85% of the Fair Market Value of the Common Stock on the Offering Date of the Offering Period).
Payroll deductions shall re-commence at the rate provided in such Participants Subscription at the
beginning of the first Purchase Period that is scheduled to end in the following calendar year,
unless the Participant terminates participation in an Offering Period or the Plan as provided in
Section 11.2 or Section 11.3 or indicates otherwise in an amended Subscription.
(d) Also notwithstanding the foregoing, a Participants payroll deductions may be decreased to
0% at such time that the aggregate of all payroll deductions accumulated with respect to a Purchase
Period exceeds the amount necessary to purchase (i) 525 shares of Common Stock in such Purchase
Period (or such other number as the Plan Administrator shall specify for a future Offering Period)
or (ii) the aggregate number of shares of Common Stock available for purchase by all Participants
in any single Purchase Period or Offering Period as set forth in Section 8.1. Payroll deductions
shall re-commence at the rate provided in such Participants Subscription at the beginning of the
next Purchase Period, provided the Participant continues to participate in the Plan and such
participation complies with Section 8.1.
11.2 Withdrawal From an Offering Period
A Participant may withdraw from an Offering Period by completing and delivering to the Plan
Administrator a written notice of withdrawal on a form provided by the Company for such purpose.
Such notice must be delivered prior to the end of the Purchase Period for
which such withdrawal is to be effective. Unless otherwise indicated by a Participant,
withdrawal from an Offering Period shall not result in a withdrawal from the Plan or any succeeding
Offering Period therein, provided that such Participant is still an Eligible Employee upon
commencement of such succeeding Offering Period. A Participant may not
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resume participation in the
same Offering Period at any time following withdrawal from such Offering Period.
11.3 Withdrawal From the Plan
A Participant may withdraw from the Plan by completing and delivering to the Plan
Administrator a written notice of withdrawal on a form provided by the Plan Administrator for such
purpose. Such notice must be delivered prior to the end of the Purchase Period for which such
withdrawal is to be effective, or by any other date specified by the Plan Administrator for a
future Offering Period.
11.4 Notice of Withdrawal; Effect of Withdrawal on Prior Purchase Periods; Re-enrollment
in the Plan
(a) The Company may, from time to time, impose a requirement that any notice of withdrawal be
on file with the Company for a reasonable period prior to the effectiveness of the Participants
withdrawal.
(b) In the event a Participant voluntarily elects to withdraw from the Plan, the Participant
may participate in any subsequent Offering Periods under the Plan by again satisfying the
definition of Eligible Employee and re-enrolling in the Plan in accordance with Section 7.
11.5 Return of Payroll Deductions
Upon withdrawal from an Offering Period pursuant to Section 11.2 or from the Plan pursuant to
Section 11.3, the withdrawing Participants accumulated payroll deductions that have not been
applied to the purchase of Common Stock shall be returned as soon as practical after the
withdrawal, without the payment of any interest, to the Participant and the Participants interest
in the Offering Period shall terminate. Such accumulated payroll deductions may not be applied to
any other Offering Period under the Plan.
SECTION 12. AUTOMATIC WITHDRAWAL
For any future Offering Periods with multiple Purchase Periods, if the Fair Market Value of
the Common Stock on any Purchase Date of an Offering Period is less than the Fair Market Value of
the Common Stock on the Offering Date for such Offering Period, then every Participant shall
automatically (a) be withdrawn from such Offering Period at the close of such Purchase Date and
after the acquisition of the shares of Common Stock for such Purchase Period and (b) be enrolled in
the Offering Period commencing on the first business date subsequent to such Purchase Period,
provided the Participant is eligible to participate in the Plan and has not elected to terminate
participation in the Plan.
SECTION 13. TERMINATION OF EMPLOYMENT
Termination of a Participants employment with the Company for any reason, including
retirement, death or the failure of a Participant to remain an Eligible Employee,
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shall immediately
terminate the Participants participation in the Plan. The payroll deductions credited to the
Participants account since the last Purchase Date shall, as soon as practical, be returned to the
Participant or, in the case of a Participants death, to the Participants legal representative or
designated beneficiary as provided in Section 14.2, and all the Participants rights under the Plan
shall terminate. Interest shall not be paid on sums returned to a Participant pursuant to this
Section 13.
SECTION 14. RESTRICTIONS ON ASSIGNMENT
14.1 Transferability
An Option granted under the Plan shall not be transferable and such Option shall be
exercisable during the Participants lifetime only by the Participant. The Company will not
recognize, and shall be under no duty to recognize, any assignment or purported assignment by a
Participant of the Participants interest in the Plan, of his or her Option or of any rights under
his or her Option.
14.2 Beneficiary Designation
A Participant may designate on a Company-approved form a beneficiary who is to receive any
shares and cash, if any, from the Participants account under the Plan in the event the Participant
dies after the Purchase Date for an Offering Period but prior to delivery to such Participant of
such shares and cash. In addition, a Participant may designate on a Company-approved form a
beneficiary who is to receive any cash from the Participants account under the Plan in the event
that the Participant dies before the Purchase Date for an Offering Period. Such designation may be
changed by the Participant at any time by written notice to the Plan Administrator or other
individual performing similar functions.
SECTION 15. NO RIGHTS AS SHAREHOLDER UNTIL SHARES
ISSUED
ISSUED
With respect to shares of Common Stock subject to an Option, a Participant shall not be deemed
to be a shareholder of the Company, and he or she shall not have any of the rights or privileges of
a shareholder. A Participant shall have the rights and privileges of a shareholder of the Company
when, but not until, a certificate or its equivalent has been issued to the Participant for the
shares following exercise of the Participants Option.
SECTION 16. LIMITATIONS ON SALE OF COMMON STOCK
PURCHASED UNDER THE PLAN
PURCHASED UNDER THE PLAN
The Plan is intended to provide Common Stock for investment and not for immediate resale. The
Company does not, however, intend to restrict or influence any Participant in the
conduct of his or her own affairs. A Participant, therefore, may sell Common Stock purchased
under the Plan at any time he or she chooses subject to compliance with Company policies and any
applicable federal and state securities laws. A Participant assumes the risk of any market
fluctuations in the price of the Common Stock.
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SECTION 17. AMENDMENT, SUSPENSION OR TERMINATION OF
THE PLAN
THE PLAN
(a) The Board may amend the Plan in such respects as it shall deem advisable; provided,
however, that, to the extent required for compliance with Code Section 423 or any applicable law or
regulation, shareholder approval will be required for any amendment that (i) increases the total
number of shares as to which Options may be granted under the Plan, (ii) modifies the class of
employees eligible to receive Options, or (iii) otherwise requires shareholder approval under any
applicable law or regulation; and provided further, that except as provided in this Section 17, no
amendment to the Plan shall make any change in any Option previously granted which adversely
affects the rights of any Participant.
(b) The Plan shall continue in effect for ten years after the date of its adoption by the
Board. Notwithstanding the foregoing, the Board may at any time and for any reason suspend or
terminate the Plan. During any period of suspension or upon termination of the Plan, no Options
shall be granted.
(c) Except as provided in Section 20, no such termination of the Plan may affect Options
previously granted, provided that the Plan or an Offering Period may be terminated by the Board on
a Purchase Date or by the Boards setting a new Purchase Date with respect to an Offering Period
and a Purchase Period then in progress if the Board determines that termination of the Plan and/or
the Offering Period is in the best interests of the Company and the shareholders or if continuation
of the Plan and/or the Offering Period would cause the Company to incur adverse accounting charges
as a result of a change after the effective date of the Plan in the generally accepted accounting
rules applicable to the Plan.
SECTION 18. NO RIGHTS AS AN EMPLOYEE
Nothing in the Plan shall be construed to give any person (including any Eligible Employee or
Participant) the right to remain in the employ of the Company or a Parent or Subsidiary Corporation
or to affect the right of the Company or a Parent or Subsidiary Corporation to terminate the
employment of any person (including any Eligible Employee or Participant) at any time with or
without cause.
SECTION 19. EFFECT UPON OTHER PLANS
The adoption of the Plan shall not affect any other compensation or incentive plans in effect
for the Company or any Parent or Subsidiary Corporation. Nothing in the Plan shall be construed to
limit the right of the Company, any Parent Corporation or Subsidiary Corporation to (a) establish
any other forms of incentives or compensation for employees of the Company, a Parent Corporation or
Subsidiary Corporation or (b) grant or assume options
otherwise than under the Plan in connection with any proper corporate purpose, including, but
not by way of limitation, the grant or assumption of options in connection with the acquisition, by
purchase, lease, merger, consolidation or otherwise, of the business, stock or assets of any
corporation, firm or association.
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SECTION 20. ADJUSTMENTS
20.1 Adjustment of Shares
In the event that, at any time or from time to time after board approval of the Plan, a stock
dividend, stock split, spin-off, combination or exchange of shares, recapitalization, merger,
consolidation, distribution to shareholders other than a normal cash dividend, or other change in
the Companys corporate or capital structure results in (a) the outstanding shares, or any
securities exchanged therefor or received in their place, being exchanged for a different number or
kind of securities of the Company or of any other corporation or (b) new, different or additional
securities of the Company or of any other corporation being received by the holders of shares of
Common Stock, then (subject to any required action by the Companys shareholders), the Board or the
Committee, in its sole discretion, shall make such equitable adjustments as it shall deem
appropriate in the circumstances in (i) the maximum number and kind of shares of Common Stock
subject to the Plan as set forth in Section 4, (ii) the number and kind of securities that are
subject to any outstanding Option and the per share price of such securities and (iii) the maximum
number of shares of Common Stock that may be purchased by a Participant in a Purchase Period, or by
all Participants in a single Purchase Period. The determination by the Board or the Committee as
to the terms of any of the foregoing adjustments shall be conclusive and binding. Notwithstanding
the foregoing, a dissolution or liquidation of the Company or a Company Transaction shall not be
governed by this Section 20.1 but shall be governed by Sections 20.2 and 20.3, respectively.
20.2 Dissolution or Liquidation of the Company
In the event of the dissolution or liquidation of the Company, the Offering Period then in
progress shall be shortened by setting a new Purchase Date and shall terminate immediately prior to
the consummation of such dissolution or liquidation, unless provided otherwise by the Board. The
new Purchase Date shall be a specified date before the date of the Companys proposed dissolution
or liquidation. The Board shall notify each Participant in writing prior to the new Purchase Date
that the Purchase Date for the Participants Option has been changed to the new Purchase Date and
that the Participants Option shall be exercised automatically on the new Purchase Date, unless
prior to such date the Participant has withdrawn from an Offering Period then in progress or the
Plan as provided in Section 11.
20.3 Company Transaction
In the event of a Company Transaction, each outstanding Option shall be assumed or an
equivalent option substituted by the successor company or parent thereof (the Successor Company).
In the event that the Successor Company refuses to assume or substitute for the
Option, any Offering Period then in progress shall be shortened by setting a new Purchase
Date. The new Purchase Date shall be a specified date before the date of the Company Transaction.
The Board shall notify each Participant in writing, prior to the new Purchase Date, that the
Purchase Date for the Participants Option has been changed to the new Purchase Date and that the
Participants Option shall be exercised automatically on the new
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Purchase Date, unless prior to
such date the Participant has withdrawn from an Offering Period then in progress or the Plan as
provided in Section 11.
20.4 Limitations
The grant of Options shall in no way affect the Companys right to adjust, reclassify,
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.
SECTION 21. REGISTRATION; CERTIFICATES FOR SHARES
Notwithstanding any other provision of the Plan, the Company shall have no obligation to issue
or deliver any shares of Common Stock under the Plan or make any other distribution of benefits
under the Plan unless such issuance, delivery or distribution would comply with all applicable laws
(including, without limitation, the requirements of the Securities Act), and the applicable
requirements of any securities exchange or similar entity.
The Company shall be under no obligation to any Participant to register for offering or resale
or to qualify for exemption under the Securities Act, or to register or qualify under state
securities laws, any shares of Common Stock, security or interest in a security paid or issued
under, or created by, the Plan, or to continue in effect any such registrations or qualifications
if made. The Company may issue certificates for shares with such legends and subject to such
restrictions on transfer and stop-transfer instructions as counsel for the Company deems necessary
or desirable for compliance by the Company with federal and state securities laws.
To the extent that the Plan or any instrument evidencing shares of Common Stock provides for
issuance of stock certificates to reflect the issuance of such shares, the issuance may be effected
on a noncertificated basis, to the extent not prohibited by applicable law or the applicable rules
of any stock exchange.
SECTION 22. EFFECTIVE DATE
The plan was adopted by the Board on February 21, 2002 and approved by the shareholders on
February 21, 2002. The Plan became effective on May 6, 2002.
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PLAN ADOPTION AND AMENDMENTS/ADJUSTMENTS
SUMMARY PAGE
SUMMARY PAGE
Section/Effect of | Date of Shareholder | |||||
Date of Board Action | Action | Amendment | Approval | |||
February 21, 2002
|
Approval of Plan | February 21, 2002 | ||||
November 9, 2005
|
Amendment of Plan | Plan amended to reflect assumption by Cardiac Science Corporation and eliminate inoperative provisions | Not required |
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