1
Exhibit 10.3
FORM OF WARRANT
WARRANT NO.
INAMED CORPORATION
EXECUTIVE OFFICER WARRANT
THE SECURITIES REPRESENTED BY THIS INSTRUMENT OR DOCUMENT HAVE BEEN ACQUIRED FOR
INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED. WITHOUT SUCH REGISTRATION, SUCH SECURITIES MAY NOT BE SOLD OR OTHERWISE
TRANSFERRED AT ANY TIME WHATSOEVER, EXCEPT UPON DELIVERY TO THE COMPANY OF AN
OPINION OF COUNSEL SATISFACTORY TO THE COMPANY TO THE EFFECT THAT REGISTRATION
IS NOT REQUIRED FOR SUCH TRANSFER OR THAT ANY SUCH TRANSFER WILL NOT BE IN
VIOLATION OF THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE
SECURITIES LAWS OR ANY RULE OR REGULATION PROMULGATED THEREUNDER.
This Warrant ("this Warrant") is made and entered into at New York,
New York, on the date hereinafter set forth by and between INAMED CORPORATION,
a Delaware corporation (hereinafter called the "Company"), and
(hereinafter called the "Holder").
WHEREAS:
A. The Company wishes to grant the Holder the Warrant which gives the
Holder the right, but not the obligation, to purchase stock in the
Company as recognition of the Holder's valuable services as
of the Company, and the Holder will, in consideration of the receipt
of said Warrant, agree to the terms, conditions and provisions set
forth herein.
NOW, THEREFORE, in consideration of the premises, it is agreed as follows:
1. WARRANT. Subject to the conditions set forth herein, the
Company hereby grants to the Holder the right, privilege and option to purchase
( ) shares (the "Warrant Shares") of the Company's Common
Stock, par value $.01 per share (the "Common Stock"), at a price per share (the
"Strike Price") of
Page 1 of 6
2
Dollars ($_____) in the manner hereinafter provided, effective as of , (the
"Grant Date") to be vested as follows:
(a) Fifty percent (50%) on the first anniversary of the
commencement of the Term of Employment (as defined in the Employment
Agreement between the Company and the Holder); and
(b) Fifty percent (50%) on the second anniversary of the
commencement of the Term of Employment;
unless this Warrant has been terminated pursuant to Section 3 hereof and
provided, however, that this Warrant, unless it has expired or been earlier
terminated, shall vest as to all Warrant Shares (notwithstanding the price of
the Common Stock) upon a "change of control" of the Company. For purposes of
this Warrant, a "change of control" of the Company shall be deemed to have
occurred if, at any time following the date of this Warrant:
(i) Any "person" (as such term is used in
Sections 13(d) and 14(d) of the Securities Exchange Act of
1934, as amended (the "Exchange Act") (other than the Company,
any trustee or other fiduciary holding securities under an
employee benefit plan of the Company, or any corporation
owned, directly or indirectly, by the stockholders of the
Company in substantially the same proportions as their
ownership of stock of the Company)), is or becomes the
"beneficial owner" (as defined in Rule 13d-3 under the
Exchange Act), directly or indirectly, of securities of the
Company representing 20% or more (or, in the case of Appaloosa
Management, L.P. and its "affiliates" and "associates," as
such terms are defined in Rule 12b-2 under the Exchange Act,
36% or more) of the combined voting power of the Company's
then outstanding securities;
(ii) During any period of two consecutive years
(not including any period prior to the execution of this
Agreement), individuals who at the beginning of such period
constitute the Board of Directors of the Company (the
"Board"), and any new director (other than a director
designated by a person who has entered into an agreement with
the Company to effect a transaction described in clause (i),
(iii) or (iv) of this Section) whose election by the Board or
nomination for election by the Company's stockholders was
approved by a vote of at least two-thirds (2/3) of the
directors then still in office who either were directors at
the beginning of the period or whose election or nomination
for election was previously so approved, cease for any reason
to constitute at least a majority thereof;
(iii) The stockholders of the Company approve a
merger or consolidation of the Company with any other
corporation, other than (a) a merger or consolidation which
would result in the voting securities of the Company
outstanding immediately prior thereto continuing to represent
Page 2 of 6
3
(either by remaining outstanding or by being converted into
voting securities of the surviving entity) more than 50% of
the combined voting power of the voting securities of the
Company or such surviving entity outstanding immediately after
such merger or consolidation or (b) a merger or consolidation
effected to implement a recapitalization of the Company (or
similar transaction) in which no "person" (as hereinabove
defined) acquires more than 20% of the combined voting power
of the Company's then outstanding securities; or
(iv) The stockholders of the Company approve a
plan of complete liquidation of the Company or an agreement
for the sale or disposition by the Company of all or
substantially all of the Company's assets.
In the event of any split, combination, reclassification, recapitalization,
merger, consolidation or any other extraordinary corporate transaction occurring
after the date of this Warrant which the Compensation Committee of the Board (or
any successor committee, the "Compensation Committee") determines will result in
a change in the Common Stock for which an adjustment pursuant to this paragraph
is appropriate in order to preserve the benefits to the Holder of this Warrant,
the Strike Price, the type of securities or other property subject to this
Warrant and/or the number of Warrant Shares (or other securities or property)
shall be adjusted in a manner which the Compensation Committee determines to be
appropriate under the circumstances. In making any determination pursuant to
this paragraph, the Compensation Committee shall be entitled to rely, and the
members of the Compensation Committee shall incur no liability and shall be
fully protected in respect of any action taken in reliance, on advice of
counsel.
2. METHOD OF EXERCISE. Warrant Shares purchased under this
Warrant shall, at the time of purchase, be paid for in full, either in cash
and/or in shares of Common Stock held by the Holder for at least six months and
having a fair market value (based on the average closing bid price of the Common
Stock for the five trading day period immediately prior to the date of exercise)
which, when added to the portion of the total Strike Price to be paid in cash,
equals the total Strike Price for the portion of this Warrant being exercised.
To the extent that the right to purchase Warrant Shares has accrued hereunder,
this Warrant may be exercised, from time to time, by written notice to the
Company stating the number of Warrant Shares with respect to which this Warrant
is being exercised and the time of delivery thereof, which shall be at least
fifteen (15) days after the giving of such notice, unless an earlier date shall
have been mutually agreed upon. If requested by the Company, the Holder shall
provide the Company with an opinion of counsel satisfactory to the Company that
the exercise of this Warrant and the issuance of the Warrant Shares do not
require registration under, and that any such exercise and issuance will not be
in violation of, the Securities Act of 1933, as amended (the "Act"), or
applicable state securities laws or any rule or regulations promulgated
thereunder.
Page 3 of 6
4
At the time specified in such notice, the Company shall, without
transfer or issue tax to the Holder, deliver to him by certified mail, a
certificate or certificates for such Warrant Shares, against the payment by the
Holder of the Strike Price, in full, for the number of Warrant Shares to be
delivered, by certified or bank cashier's check, or the equivalent thereof
acceptable to the Company, or through the use of Common Stock in accordance with
the preceding paragraph; provided, however, that the time of such delivery may
be postponed by the Company for such period as may be required for it, with
reasonable diligence, to comply with any requirements of any state or federal
agency or any securities exchange. If the Holder fails to accept delivery of and
pay for all or any part of the number of Warrant Shares specified in the notice
given by the Holder, upon tender and delivery of said shares, the Holder's right
to exercise this Warrant with respect to such undelivered shares shall be
terminated.
3. TERMINATION OF WARRANT. Except as herein otherwise stated,
this Warrant, to the extent not theretofore exercised, shall expire at 5:00 p.m.
New York City time on , .
4. REPRESENTATIONS AND WARRANTIES OF THE HOLDER. The Holder
hereby warrants and represents to the Company, as of the date hereof and as of
the date or dates on which any Warrant Shares are purchased hereunder, as
follows:
(a) Holder is an Accredited Investor as defined in
Regulation D promulgated by the Securities and Exchange Commission
under the Act.
(b) Holder is, by reason of Holder's business or
financial experience, capable of evaluating the merits and risks of
this investment and of protecting the Holder's own interests in
connection with this Warrant.
(c) In deciding whether to acquire the Warrant Shares,
the Holder has relied, and will rely, exclusively upon consultations
with his legal, financial and tax advisors with respect to the nature
of this Warrant.
(d) Holder understands that neither the Securities and
Exchange Commission, nor any other federal or state governmental agency
having jurisdiction over the sale and issuance of the Warrant Shares,
will make any finding or determination relating to the appropriateness
for investment of the Warrant Shares and that none of them has or will
recommend or endorse the Warrant Shares.
(e) The Warrant Shares will be purchased for Holder's own
account for investment and will not be purchased with a view to the
sale or distribution thereof, and the Holder has no intention of
distributing or reselling any portion of this Warrant or the Warrant
Shares which Holder is receiving or may purchase. Holder acknowledges
that this Warrant and the Warrant Shares have not been registered under
the Act, and must be held indefinitely unless subsequently registered
under the Act or an exemption for such registration is available. The
Holder also acknowledges that Holder is fully aware of the restrictions
on
Page 4 of 6
5
disposing of the Warrant Shares resulting from the provisions of the
Act and the General Rules and Regulations of the Securities and
Exchange Commission thereunder. Holder further understands that the
Warrant Shares have not been, and will not be, qualified under
applicable state securities laws.
(f) Holder, if requested by the Company's underwriters
from time to time, will execute "lock-up" agreements as requested,
relating to this Warrant and the Warrant Shares.
(g) Holder recognizes that "stop transfer" instructions
will be issued against any stock certificates under this Warrant and
that a restrictive legend that addresses acquisition for investment,
subject to Rule 144 promulgated under the Act, will be placed on the
stock certificates issued for the securities.
5. RESTRICTIONS ON ISSUANCE OF SHARES. The Company shall not be
obligated to sell and issue any shares pursuant to this Warrant unless the
shares with respect to which this Warrant is exercised are, at the time,
effectively registered, or exempt from registration, under the Act. The Company
may require an opinion of counsel acceptable to the Company to the effect of any
exemption.
6. TRANSFERABILITY OF WARRANT; RIGHTS PRIOR TO EXERCISE. During
the Holder's lifetime, this Warrant hereunder shall be exercisable only by the
Holder, or any guardian or legal representative of the Holder in accordance with
the Employment Agreement between the Holder and the Company, except as otherwise
provided in this Warrant. This Warrant is freely transferable at the option of
the Holder to the Holder's spouse, lineal descendants (including those adopted)
or any lineal descendant of the Holder's siblings (collectively, the "Permitted
Transferees") or any trust created solely for the benefit of a Permitted
Transferee, provided that any Permitted Transferee must give the Company written
notice of such transfer within ten (10) days of the transfer and must agree in a
writing satisfactory to the Company to be bound by the terms of this Warrant.
Holder shall have no rights as a shareholder of shares subject
to this Warrant until payment of the Strike Price pursuant to Section 2 and the
delivery of such shares are herein provided.
7. REGISTRATION RIGHTS. The Holder shall have the same
registration rights under Form S-8 or otherwise as may be generally made
available from time to time to officers and employees of the Company.
8. SERVICE NOT AFFECTED. The granting of this Warrant or its
exercise shall not be construed as granting to the Holder any right with respect
to the continuance of the Term of Employment. Except as may otherwise be limited
by a written agreement between the Company and the Holder, the right of the
Company to terminate as defined in the Employment Agreement is specifically
reserved by the Company, as the Company or on behalf of the Company (whichever
the case may be), and acknowledged by the Holder.
Page 5 of 6
6
9. BINDING EFFECT. This Warrant shall be binding upon the heirs,
executors, administrators and successors of the parties hereto.
Page 6 of 6
7
IN WITNESS WHEREOF, the parties have caused this Amended and Restated
Warrant to be executed on this day of , .
"COMPANY" "HOLDER"
INAMED CORPORATION
By:______________________________ ______________________________
Signature
______________________________
Social Security Number
- --------------------------------------------------------------------------------
NUMBER OF WARRANTS: ( ) EXACTLY
- --------------------------------------------------------------------------------
-------------------------------------------------------
STRIKE PRICE: ($ ) PER SHARE
-------------------------------------------------------
Page 7 of 6