ADAMIS PHARMACEUTICALS, INC. 10-Q [admp-10q_093019.htm]

 

Exhibit 10.3 

ADAMIS PHARMACEUTICALS CORPORATION

CASH-SETTLED STOCK APPRECIATION RIGHTS AWARD AGREEMENT

Notice of Stock Appreciation Rights Award

Subject to the terms and conditions of this Notice of Stock Appreciation Rights
Award (this “Notice”) and the attached Adamis Pharmaceuticals Corporation
Cash-Settled Stock Appreciation Rights Award Agreement (together with the
Notice, the “Award Agreement”), Adamis Pharmaceuticals Corporation (the
“Company”) grants you (“Participant” or “you”) cash-settled Stock Appreciation
Rights (the “SARs”) in the Company. Unless otherwise specifically indicated, all
terms used in this Notice shall have the meanings set forth in the Award
Agreement.

Participant Name and Address:              

 

Date of Grant:     Vesting Commencement Date:    [e.g., the grant date]

 

Exercise Price per SAR: $    

 

Total Number of SARs:   (the “Total SARs”)  

 

Expiration Date:    

Vesting Schedule

Subject to Participant’s Continuous Service to the Company as of each applicable
vesting date, Section 2(b) of the Award Agreement, and any other limitations set
forth in the Award Agreement, the SARs shall vest with respect to one-sixth
(1/6) of the Total SARs (rounded down to the nearest whole number) on the
six-month anniversary of the Vesting Commencement Date, and thereafter shall
vest with respect to one thirty-sixth (1/36) of the Total SARs (rounded down to
the nearest whole number) on each monthly anniversary of the Vesting
Commencement Date, with all remaining unvested SARs vesting and becoming
exercisable on the thirty-sixth (36th) monthly anniversary of the Vesting
Commencement Date (the “Vesting Schedule” and the date that is 36 months after
the Vesting Commencement Date referred to as the “Full Vesting Date”).

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Maximum Exercise Period

Following the termination of Participant’s Continuous Service, Participant shall
be entitled to exercise the vested SARs, to the extent vested as of the date of
termination of Continuous Service, commencing on and after the Full Vesting Date
for the following periods of time (subject to any different provisions in the
Award Agreement), and if not timely exercised, the SARs shall terminate and
expire after such date. 

Termination Event Maximum Time to Exercise Following Full Vesting Date
Termination of Continuous Service (except as provided below)

If Continuous Service terminates before the Full Vesting Date, then 12 months
after the Full Vesting Date.

If Participant has provided Continuous Service through the Full Vesting Date and
Continuous Service terminates after the Full Vesting Date, then 12 months days
after the date of termination of Continuous Service.

Termination of Continuous Service for Cause. Immediate termination of SAR.
Termination of Continuous Service due to Disability or death

If Continuous Service terminates before the Full Vesting Date, then 12 months
after the Full Vesting Date.

If Participant has provided Continuous Service through the Full Vesting Date and
Continuous Service terminates after the Full Vesting Date, then 12 months after
the date of termination of Continuous Service.

 

 

[SIGNATURES ON NEXT PAGE]

 

 

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By Participant’s signature and the signature of the Company’s representative
below, Participant and the Company agree that the SARs granted herein are
governed by the terms and conditions of this Notice and the Award Agreement.

  ADAMIS PHARMACEUTICALS CORPORATION

 

  By:     Its:  

 

PARTICIPANT REPRESENTATION

Participant has reviewed this Notice and the Award Agreement in their entirety,
has had an opportunity to consult with Participant’s own legal and tax advisers,
and acknowledges and agrees that Participant is relying solely on such advisors
and not on any statements or representations of the Company or any of its agents
or affiliates. Participant represents to the Company that Participant is
familiar with the terms of this Notice and the Award Agreement, and accepts the
SARs subject to all of its terms. Participant agrees that all questions of
interpretation and administration relating to this Notice and the Award
Agreement shall be solely resolved by the Committee in its good faith
discretion.

  PARTICIPANT:

 

           

 

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ADAMIS PHARMACEUTICALS CORPORATION
CASH-SETTLED
STOCK APPRECIATION RIGHTS AWARD AGREEMENT

Subject to the terms and conditions of the Notice of Stock Appreciation Rights
Award (the “Notice”) and this Adamis Pharmaceuticals Corporation Cash-Settled
Stock Appreciation Rights Award Agreement (together with the Notice, the “Award
Agreement”), Adamis Pharmaceuticals Corporation (the “Company”) has granted to
the individual set forth in the Notice (“Participant” or “you”) stock
appreciation rights (the “SARs”) in the Company, as a matter of separate
agreement and not in lieu of salary or other compensation for services. Unless
otherwise specifically indicated, all terms used in this Award Agreement shall
have the meanings as defined herein or as defined in the Notice.

1.       

Grant. Participant has been awarded the number of SARs as set forth in the
Notice. Subject to the terms and conditions contained in the Notice and this
Award Agreement, each SAR entitles Participant to receive, upon exercise, an
amount with respect to each SAR exercised equal to (a) the excess of (i) the
Fair Market Value of a share of Common Stock on the date of termination of
Continuous Service, over (ii) the Exercise Price per SAR set forth in the
Notice, provided, however, that in no event shall Participant be entitled to
receive upon exercise of an SAR an amount that is in excess of (b)(i) the excess
of the Fair Market Value of a share of Common Stock on the date of exercise,
over (ii) the Exercise Price per SAR set forth in the Notice, and if the amount
determined pursuant to clause “(b)” is lower than the amount determined pursuant
to clause “(a),” then the Participant shall be entitled to receive the amount
determined pursuant to clause “(b)” (the above amounts referred to as the
“Appreciation Value”). The Exercise Price per SAR shall be at least equal to the
Fair Market Value of the Common Stock on the date of grant of the SARs. This SAR
shall terminate and expire on the Expiration Date set forth in the Notice.

2.       

Vesting; Risk of Forfeiture.

(a)       

Vesting. Subject to Participant’s Continuous Service and any other limitations
set forth in the Notice and this Award Agreement, the SARs shall vest in
accordance with the Vesting Schedule described in the Notice.

(b)       

Risk of Forfeiture. The SARs shall be subject to a risk of forfeiture until such
time the risk of forfeiture lapses in accordance with the Vesting Schedule.
Except as otherwise provided in the Notice with respect to the period of time
after termination of Continuous Service during which the SARs may be exercised
or as otherwise agreed in writing between the Company and Participant, all or
any portion of unvested SARs subject to the foregoing risk of forfeiture shall
immediately and automatically be forfeited and terminated upon the termination
of Participant’s Continuous Service to the Company.

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3.       

Exercise of SARs and Payment of SARs.

(a)       

Right to Exercise. Except in connection with a Change in Control event as
described in Section 8 below, in no event may the SARs be exercised before the
Full Vesting Date, including without limitation in the event of Participant’s
termination of Continuous Service before the Full Vesting Date. Except as
otherwise provided in the Notice or this Award Agreement, Participant (or in the
case of exercise after Participant’s death or Disability, Participant’s
executor, administrator, heir or legatee, as the case may be) may exercise
Participant’s vested SARs, in whole or in part, at any time after the Full
Vesting Date. Participant agrees to comply with the Company’s insider trading
policy with respect to trading in securities of the Company, and any other
applicable Company policy, in connection with and with respect to any exercise
or settlement of the SARs, including without limitation any “open trading
window” or similar provisions of such policy to the extent applicable to
Participant. Participant’s right to exercise the SARs shall automatically
expire, and the SARs shall automatically terminate, upon the end of the period
prescribed in the Notice following the termination of Participant’s Continuous
Service (the “Maximum Exercise Period”). However, and notwithstanding the
foregoing or anything in the Notice or this Award Agreement to the contrary, all
SARs shall automatically expire and terminate upon the Expiration Date (as set
forth in the Notice) to the extent not then exercised. Thereafter, no SARs may
be exercised. Notwithstanding the foregoing, if Participant is an officer (as
defined by Section 16(b) of the Securities Exchange Act of 1934, as amended) or
a director of the Company, then this SAR may not be exercised until after six
months from the date of grant unless the Company determines that such exercise
is exempt from the short-swing profit provisions of such Section 16(b).

(b)       

Method of Exercise. To exercise the SARs, Participant (or in the case of
exercise after Participant’s death or Disability, Participant’s executor,
administrator, heir or legatee, as the case may be) must deliver a written
notice to the Company at its principal executive office, directed to the
Corporate Secretary, that sets forth the number of SARs being exercised,
together with any additional documents the Company may require. Each such notice
must satisfy any then-applicable procedures of the Company that apply to the
SARs and must contain such representations as the Company requires. The exercise
notice shall be delivered in person, by certified or regular mail, or by such
other method (including electronic transmission) as determined from time to time
by the Committee. The SARs shall be deemed to be exercised as of the date: (i)
the Company receives (as determined by the Committee in its sole, but
reasonable, discretion) the fully executed exercise notice during normal
business hours, and (ii) all other applicable terms and conditions of this Award
Agreement are satisfied, in the sole discretion of the Committee.

(c)       

Payment. As soon as practicable following the date the SARs are exercised (but
in no event later than fifteen (15) days following such date), the Company shall
make a cash payment to Participant in an amount equal to the Appreciation Value
per vested SAR exercised, less any amounts withheld pursuant to Section 4.

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4.       

Taxes.

(a)       

Tax Liability. Participant is ultimately liable and responsible for all taxes
owed by Participant in connection with Participant’s receipt, exercise or
settlement of the SARs and payments made under this Award Agreement, regardless
of any action the Company takes with respect to any tax withholding obligations
arising hereunder. The Company is not making any representation or undertaking
regarding the treatment of any tax withholding in connection with the grant of
the SARs or payments made pursuant to this Award Agreement. The Company does not
commit and is under no obligation to structure the SARs to reduce or eliminate
Participant’s tax liability. Whenever any portion of this SAR is exercised or
settled, the Company may require Participant to remit to the Company an amount
sufficient to satisfy any applicable U.S. federal, state, local, and
international tax or any other tax or social insurance liability (the
“Tax-Related Items”) legally due from the Participant, and the Company may
withhold from the amount paid to Participant pursuant to any exercise or
settlement of this SAR an amount sufficient to satisfy applicable withholding
obligations for Tax-Related Items.

(b)       

Payment of Withholding Taxes. Participant authorizes the Company to withhold
from the cash payable to Participant upon any payment made pursuant to this
Award Agreement an amount sufficient to satisfy any tax withholding obligation,
whether federal, state, local or non-U.S., including any payroll, employment
tax, or other similar obligations.

(c)       

Section 409A; No Deferral of Compensation. Neither the SARs, the Notice, nor
this Award Agreement is intended to provide for the deferral of compensation
within the meaning of Section 409A of the Code. Notwithstanding any other
provision in the Notice or this Award Agreement to the contrary, the Committee
shall have the right, in its sole discretion, to adopt such amendments to the
Notice or this Award Agreement or take such other actions (including amendments
and actions with retroactive effect) as the Committee determines are necessary
or appropriate to avoid adverse tax consequences to Participant under Section
409A of the Code.

5.       

Transferability of SARs; Death of Participant. The SARs are not transferable or
assignable, in whole or in part, by Participant other than to a designated
beneficiary upon Participant’s death or by will or the laws of descent and
distribution, and are exercisable during Participant’s lifetime only by
Participant. The terms of the Notice and this Award Agreement shall be binding
upon the executors, administrators, heirs, and other legal representatives of
Participant.

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6.       

No Rights as a Stockholder of the Company. Participant’s receipt of the grant of
the SARs pursuant to the Notice and this Award Agreement shall provide and
confer no rights to, or status as, a stockholder or equity holder of the
Company.

7.       

Waiver. Failure to insist upon strict compliance with any of the terms,
covenants, or conditions hereof will not be deemed a waiver of such term,
covenant, or condition, nor will any waiver or relinquishment of, or failure to
insist upon strict compliance with, any right or power hereunder at any one or
more times be deemed a waiver or relinquishment of such right or power at any
other time or times.

8.       

Change in Control.

(a)       

In the event of a Change in Control before Participant’s SARs are fully vested
but that occurs during a time when Participant is providing Continuous Service
to the Company, then all of the unvested SARs subject to this Award shall become
fully vested immediately prior to the effective date of such Change in Control
and may be exercised, regardless of whether Participant’s Continuous Service
will continue following the Change in Control, for a limited period of time on
or before a specified date fixed by the Committee, after which date and time the
unexercised SARs and all rights of Participant hereunder shall terminate. In the
event of a Change in Control that occurs (i) after Participant’s Continuous
Service has terminated, and (ii) before the Full Vesting Date, then Participant
shall be entitled to exercise the vested SARs, but only to the extent vested as
of the date of termination of Continuous Service, for a limited period of time
on or before a specified date fixed by the Committee, after which date and time
the unexercised SARs and all rights of Participant hereunder shall terminate.

(b)       

In the event that the Exercise Price per SAR set forth in the Notice equals or
exceeds the price paid for a share of Common Stock in connection with the Change
in Control (or the consideration receivable by the stockholders of the Company
in connection with the Change in Control), the Committee may cancel the SARs
without the payment of consideration.

9.       

Definitions. As used herein, the following definitions shall apply:

(a)       

“Affiliate” or “affiliate” means at the time of determination, any “parent” or
“subsidiary” of the Company as such terms are defined in Rule 405 of the
Securities Act. The Board will have the authority to determine the time or times
at which “parent” or “subsidiary” status is determined within the foregoing
definition.

(b)       

“Cause” will have the meaning ascribed to such term in any written agreement
between the Participant and the Company defining such term and, in the absence
of such agreement, such term means, with respect to Participant, the occurrence
of any of the following events: (i) Participant’s commission of any felony or
any crime involving fraud, dishonesty or moral turpitude under the laws of the
United States, any state thereof, or any applicable foreign jurisdiction; (ii)
Participant’s attempted commission of, or participation in, a fraud or act of
dishonesty against the Company or any affiliate; (iii) Participant’s
intentional, material violation of any contract or agreement between the
Participant and the Company or any Affiliate, or any policy of the Company or
any Affiliate applicable to Participant or any statutory or fiduciary duty owed
to the Company or any Affiliate; (iv) Participant’s unauthorized use or
disclosure of the Company’s or any Affiliate’s confidential information or trade
secrets; or (v) Participant’s gross misconduct. The determination that a
termination of the Participant’s Continuous Service is either for Cause or
without Cause shall be made by the Committee in its sole discretion. Any
determination by the Committee that the Continuous Service of Participant was
terminated by reason of dismissal without Cause for the purposes of the SARs and
this Award Agreement shall have no effect upon any determination of the rights
or obligations of the Company or Participant for any other purpose.

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(c)       

“Company” means Adamis Pharmaceuticals Corporation, or any successor thereto.

(d)       

“Board” means the Board of Directors of the Company.

(e)       

“Change in Control” means the occurrence of any of the following events, as
determined in the sole and absolute discretion of the Board, and provided in all
cases that such event also constitutes a change in control event described in
paragraph (a)(2)(A)(v) of Section 409A of the Code or any other applicable
provisions of Section 409A regarding change in control events):

(i)       

the date that any “person” (as defined in Section 3(a)(9) of the Exchange Act,
and as modified in Section 13(d) and 14(d) of the Exchange Act) other than
(A) the Company or any of its majority subsidiaries, (B) any employee benefit
plan of the Company or any of its subsidiaries, (C) or any Affiliate (as
determined immediately prior to such event), (D) a company owned, directly or
indirectly, by stockholders of the Company in substantially the same proportions
as their ownership of the Company, or (E) an underwriter temporarily holding
securities pursuant to an offering of such securities, becomes the “beneficial
owner” (as defined in Rule 13d-3 of the Exchange Act), directly or indirectly,
of securities of the Company representing more than fifty percent (50%) of the
shares of voting stock of the Company then outstanding;

(ii)       

the consummation of any merger, reorganization, business combination or
consolidation of the Company with or into any other company, other than a
merger, reorganization, business combination or consolidation which would result
in the holders of the voting securities of the Company outstanding immediately
prior thereto holding securities which represent immediately after such merger,
reorganization, business combination or consolidation fifty percent (50%) or
more of the combined voting power of the voting securities of the Company or the
surviving company or the parent of such surviving company;

(iii)       

a change in the ownership of a substantial portion of the Company’s assets
resulting from the consummation (in one or more transactions during a 12-month
period) of a sale or disposition by the Company of all or substantially all of
the Company’s assets, other than a sale or disposition if the holders of the
voting securities of the Company outstanding immediately prior thereto hold
securities immediately thereafter which represent fifty percent (50%) or more of
the combined voting power of the voting securities of the acquiror, or parent of
the acquiror, of such assets; or

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(iv)       

the stockholders of the Company approve a plan of complete liquidation or
dissolution of the Company.

(f)       

“Code” means the Internal Revenue Code of 1986, as amended, and the Treasury
regulations thereunder.

(g)       

“Committee” means (i) with respect to Participants who are directors or officers
of the Company, the Compensation Committee of the Board, and (ii) otherwise, the
Compensation Committee or the Company.

(h)       

“Common Stock” means the common stock, $0.0001 par value per share of the
Company.

(i)       

“Consultant” means any person (other than an Employee) who is engaged by the
Company to render consulting or advisory services to the Company.

(j)       

“Continuous Service” means a Participant’s provision of services to the Company
or its Affiliates or their successors as a Consultant, member of the Board or
Employee is continuous and uninterrupted. For this purpose Continuous Service
shall be deemed interrupted upon the actual cessation of providing services to
the Company or its Affiliates or their successors, notwithstanding any required
notice period that must be fulfilled before a termination as a Consultant,
member of the Board or Employee can be effective under applicable laws.
Continuous Service shall not be considered interrupted in the case of (x) any
approved leave of absence (including sick leave, military leave, or any other
authorized personal leave); (y) transfers among the Company and its Affiliates,
or any successor thereof; or (z) any change in status as long as Participant
remains in the service of the Company or its Affiliates and their successors as
a Consultant, member of the Board or Employee. Notwithstanding anything in the
foregoing or this Award Agreement to the contrary, a Participant’s change in
status from one category of Consultant, member of the Board or Employee to
another of such category shall not be considered a termination of such
Participant’s Continuous Service.

(k)       

“Disability” means, with respect to a Participant, the inability of such
Participant to engage in any substantial gainful activity by reason of any
medically determinable physical or mental impairment that can be expected to
result in death or that has lasted or can be expected to last for a continuous
period of not less than twelve (12) months as provided in Sections 22(e)(3) and
409A(a)(2)(c)(i) of the Code, and will be determined by the Board on the basis
of such medical evidence as the Committee deems warranted under the
circumstances.

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(l)       

“Employee” means any person, including an officer, who is in the employ of the
Company or their Affiliates, and is subject to the control and direction of the
Company or their Affiliates as to both the work to be performed and the manner
and method of such performance.

(m)       

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

(n)       

“Fair Market Value” means, as of any given date, the closing price per share of
Common Stock on the principal exchange or over-the-counter market on which such
shares are trading, if any, or as reported on any composite index which includes
such principal exchange, or if no trade of the Common Stock shall have been
reported for such date, the closing price quoted on such exchange or market for
the immediately preceding date on which such shares were traded. The term
“closing price” on any given day shall mean the last reported sales price on
such day. If shares of Company Common Stock are not listed or admitted to
trading on any exchange, over-the-counter market or any similar organization on
any given day, the Fair Market Value per share of Common Stock shall be
determined by the Committee in good faith using any fair and reasonable means
selected in its discretion and that complies with Section 409A of the Code.

(o)       

“Stock Appreciation Rights” or “SARs” means, subject to the terms and conditions
of the Notice and this Award Agreement, an unfunded and unsecured promise of the
Company to deliver cash to Participant in the amount set forth in this Award
Agreement. For this purpose, SARs is a record-keeping account established by the
Company in Participant’s name. All amounts attributable to the SARs shall be and
remain the sole property of the Company until such time the SARs are settled or
extinguished pursuant to the terms and conditions of the Notice and this Award
Agreement.

10.       

Reorganization of Company and Subsidiaries. The existence of the SARs shall not
affect in any way the right or power of Company or its stockholders to make or
authorize any or all adjustments, recapitalizations, reorganizations or other
changes in the Company’s capital structure or its business, or any merger or
consolidation of Company or any issue of bonds, debentures, preferred or prior
preference stock ahead of or affecting shares of Common Stock or the rights
thereof, or the dissolution or liquidation of Company, or any sale or transfer
of all or any part of its assets or business, or any other corporate act or
proceeding, whether of a similar character or otherwise.

11.       

Adjustment of Shares. Subject to any required action by the Board, if the number
of shares of Common Stock of the Company is changed by a stock dividend,
recapitalization, stock split, reverse stock split, subdivision, combination,
reclassification or similar change in the capital structure of the Company,
without consideration, then the Total Number of SARs and Exercise Price per SAR
stated in the Notice and subject to this Award Agreement will be appropriately
and proportionately adjusted by the Company from time to time (provided, that
fractions of a share will be aggregated and will be rounded down to the nearest
whole share).

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12.       

Investment Representations. Participant represents and warrants to the Company
as follows:

(a)       

Company Business. Participant is aware of the Company’s business affairs and
financial condition and has acquired sufficient information about the Company to
reach an informed and knowledgeable decision to acquire the SARs. Participant is
acquiring these SARs for investment for Participant’s own account only and not
with a view to, or for resale in connection with, any “distribution” thereof
within the meaning of the Securities Act of 1933, as amended (the “Securities
Act”).

(b)       

Participant’s Qualifications. Participant has a preexisting personal or business
relationship with the Company and/or certain of its officers and/or directors of
a nature and duration sufficient to make Participant aware of the character,
business acumen and general business and financial circumstances of the Company
and/or such officers and directors. By reason of Participant’s business or
financial experience, Participant is capable of evaluating the merits and risks
of this investment, has the ability to protect Participant’s own interests in
this transaction and is financially capable of bearing a total loss of this
investment.

(c)       

No General Solicitation. At no time was Participant presented with or solicited
by any publicly issued or circulated newspaper, mail, radio, television or other
form of general advertising or solicitation in connection with the offer or
grant of the SARs. Participant is acquiring the SARs for Participant’s own
account not with a view to or for sale in connection with any distribution of
the SARs.

(d)       

Compliance with Securities Laws. Participant understands and acknowledges that,
in reliance upon the representations and warranties made by Participant herein,
to the extent that the SARs constitute securities under applicable federal or
state securities laws, the SARs are not being registered under the Securities
Act or being qualified under the California Corporate Securities Law of 1968, as
amended, but instead are being issued awarded an exemption or exemptions from
the registration and qualification requirements of the Securities Act and
applicable state laws.

13.       

General Provisions.

(a)       

Notice. Any notice required by the terms of this Award Agreement shall be given
in writing and shall be deemed effective upon personal delivery or five (5) days
after deposit with a national postal system; if sent via overnight delivery, one
(1) business day after deposit with an established overnight delivery system
such as Federal Express; or one business day after transmission by email or
other electronic transmission.

(b)       

Successors and Assigns. Except as provided herein to the contrary, the Notice
and this Award Agreement shall be binding upon and inure to the benefit of the
parties hereto, and their respective permitted successors and assigns.

(c)       

No Assignment. Except as otherwise provided in this Award Agreement, Participant
shall not assign any of Participant’s rights under the Notice and this Award
Agreement without the prior written consent of the Committee, which consent may
be withheld in its sole discretion. The Committee shall be permitted to assign
its rights or obligations under the Notice and this Award Agreement without the
consent of Participant.

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(d)       

Counterparts. The Notice may be executed simultaneously in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. Any counterpart or other
signature delivered by facsimile shall be deemed for all purposes as being a
good and valid execution and delivery of the Notice by that party.

(e)       

Severability. The validity, legality or enforceability of the remainder of this
Award Agreement shall not be affected even if one or more of the provisions of
this Award Agreement shall be held to be invalid, illegal or unenforceable in
any respect.

(f)       

Amendment, Termination. This Award Agreement may be amended in writing by the
Company and Participant, provided the Company may amend this Agreement
unilaterally (i) if the amendment does not adversely affect the Participant’s
rights hereunder in any material respect, (ii) if the Company determines that an
amendment is necessary to comply with Rule 16b-3 under the Exchange Act or
Section 409A of the Code, or (iii) if the Company determines that an amendment
is necessary to meet the requirements of the Code or to prevent adverse tax
consequences to the Participant.

(g)       

Administration and Interpretation. Any question or dispute regarding the
interpretation of the Notice or this Award Agreement or the receipt of the SARs
hereunder shall be submitted by Participant to the Committee. The resolution of
such a dispute by the Committee shall be final and binding on all parties.

(h)       

Unsecured Status of Claim. The SARs shall be used solely as a device for the
measurement and determination of the amount to be paid to Participants pursuant
to this Award Agreement. The SARs shall not constitute or be treated as property
of any kind. Any amount that may be due and payable under this Award Agreement
shall be paid solely from the general assets of the Company. With respect to any
payment to which Participant may be entitled, nothing in this Award Agreement
shall be construed to create a trust or to establish or evidence any
Participant’s claim of any right other than as a general creditor.

(i)       

Construction. Captions and titles contained herein are for convenience only and
shall not affect the meaning or interpretation of any provision of this Award
Agreement. Except when otherwise indicated by the context, the singular shall
include the plural and the plural shall include the singular. Use of the term
“or” is not intended to be exclusive, unless the context clearly requires
otherwise.

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(j)       

Entire Agreement; Governing Law. The Notice and this Award Agreement constitute
the entire agreement of the parties with respect to the subject matter hereof
and supersedes in its entirety all prior undertakings, representation and
agreements between the Company, on one hand, and Participant on the other hand
(whether oral or written, and whether express or implied) with respect to the
subject matter hereof. The Notice and this Award Agreement are to be construed
in accordance with and governed by the laws of the State of Delaware without
giving effect to any choice of law rule that would cause the application of the
laws of any other jurisdiction.

(k)       

Clawback/Recovery. This SAR and any exercise thereof will be subject to
recoupment in accordance with any clawback policy that the Company adopts or is
required to adopt pursuant to the listing standards of any national securities
exchange or association on which the Company’s securities are listed or as is
otherwise required by the U.S. Dodd-Frank Wall Street Reform and Consumer
Protection Act or other applicable law, and in addition to any other remedies
available under such policy and applicable law, may require the cancellation of
this SAR or other outstanding awards held by Participant and the recoupment of
any gains realized with respect to this SAR or other awards.

(l)       

Not a Contract of Employment or Other Engagement. The terms and conditions of
the Notice and this Award Agreement and the grant of SARs hereunder shall not be
deemed to constitute a contract of employment or of any consulting or agency
relationship between the Company, on one hand, and Participant on the other
hand. Any such employment is hereby acknowledge to be, to the extent applicable,
an “at will” employment relationship that can be terminated at any time for any
reason, or for no reason, with or without cause, and with or without notice,
unless expressly provide in a written employment agreement. Nothing in the
Notice and this Award Agreement shall be deemed to give Participant the right to
be retained in the service of the Company or to interfere with the right of the
Company to discipline or discharge Participant at any time.

(m)       

Consent to Notices by Electronic Transmission. By your execution of this Award
Agreement, and without limiting the manner by which notices otherwise may be
given effectively to you, including without limitation pursuant to the Delaware
General Corporation Law (“DGCL”), any notice to you given by the Company under
any provision of the DGCL, the certificate of incorporation of the Company or
the bylaws of the Company, or pursuant this Award Agreement, or any other
agreement to which the Company and you are parties, shall be effective if given
by a form of electronic transmission, and you hereby consent to delivery of
notices by electronic transmission. Any such consent is revocable by you, by
means of a written notice delivered by you to the Company. In addition, any such
consent shall be deemed revoked if: (i) the Company is unable to deliver by
electronic transmission two consecutive notices given by the Company in
accordance with such consent; and (ii) such inability becomes known to the
secretary or an assistant secretary of the Company or to the Company’s transfer
agent, or other person responsible for the giving of notice. However, the
inadvertent failure to treat such inability as a revocation shall not invalidate
any meeting or other action. Any notice given pursuant to the preceding
paragraph shall be deemed given: (i) if by facsimile telecommunication, when
directed to a number at which you have consented to receive notice; (ii) if by
electronic mail, when directed to an electronic mail address at which you have
consented to receive notice (and you consent to delivery of electronic mail
notices at your Company (or Affiliate of the Company) email address); (iii) if
by a posting on an electronic network together with separate notice to you of
such specific posting, upon the later of (A) such posting and (B) the giving of
such separate notice; and (iv) if by any other form of electronic transmission,
when directed to you. An affidavit of the secretary or an assistant secretary or
of the transfer agent or other agent of the Company that the notice has been
given by a form of electronic transmission shall, in the absence of fraud, be
prima facie evidence of the facts stated therein. An “electronic transmission”
means any form of communication, not directly involving the physical
transmission of paper, that creates a record that may be retained, retrieved,
and reviewed by a recipient thereof, and that may be directly reproduced in
paper form by such a recipient through an automated process.

 

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