ENDOLOGIX, INC.
OFFER TO EXCHANGE
CERTAIN OUTSTANDING STOCK OPTIONS FOR
NEW STOCK OPTIONS
This
offer will expire at 11:59 p.m., Eastern Time, on September 9, 2019,
unless the Company extends the expiration date.
Endologix, Inc. (the Company, we, us, or our) is offering each Eligible Participant (as
defined below) the opportunity to exchange outstanding Eligible Options (as defined below) for a lesser number of new stock options (New Stock Options) on the terms and subject to the conditions set forth in this Offer to Exchange
Certain Outstanding Stock Options for New Stock Options (the Offer to Exchange) and the other documents to which the Company has referred you.
In this Offer to Exchange, this offering is referred to as the Offer and the exchange of Eligible Options for New Stock Options in
accordance with the terms of the Offer is referred to as the Exchange Program.
This Offer to Exchange provides Eligible
Participants the opportunity to exchange all, some or none of their Eligible Options for cancellation in exchange for the grant of a lesser number of New Stock Options. A New Stock Option is a right to purchase a share of the Companys common
stock, par value $0.001 per share (the common stock), at a set price (also known as the exercise price) for a specified period of time provided that certain vesting criteria are satisfied. The Exchange Program is open to all current
employees (including executive officers) and non-employee directors who have outstanding stock options with a per share exercise price of $20.00 or greater. The Companys Board of Directors (the
Board) previously approved the Exchange Program, and the Companys stockholders approved the Exchange Program at the Companys 2019 annual meeting of stockholders held on August 5, 2019.
If you participate in the Exchange Program, the number of New Stock Options you receive will depend on the number of Eligible Options you
elect to exchange and the exchange ratios applicable to your Eligible Options. The applicable exchange ratios, which will be calculated based on a number of factors, including the exercise price of the Eligible Options, are set forth in the table
below:
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Exercise Price of
Eligible Options
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Eligible Option
Shares Outstanding
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Weighted Average
Remaining Life
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Exchange Ratio
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New Stock Options
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$20.00-$39.99
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55,753
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6.41
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2.00 to 1
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27,877
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$40.00-$79.99
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559,770
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5.05
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3.00 to 1
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186,867
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$80.00-$149.99
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97,731
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3.78
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4.00 to 1
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24,574
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$150.00 and Up
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28,118
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3.45
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5.00 to 1
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5,691
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In exchange for Eligible Options tendered in the Exchange Program, the Company will grant New Stock Options
with an exercise price per share equal to the closing price of the common stock on the NASDAQ Global Market on the cancellation date, which shall be the calendar day immediately following the date on which the Exchange Offer expires. This date is
referred to as the Option grant date. If the expiration date of the Exchange Offer is extended, the Option grant date will similarly be delayed.
The New Stock Options will have a term of seven years from the Option grant date and be subject to a new vesting schedule even if the
exchanged options were fully or partially vested. The vesting of the New Stock Options will be in three equal annual installments over a three-year period from the Option grant date subject to an Eligible Participants continued employment with
or service to the Company. The New Stock Options will be issued as nonstatutory options.
(i)