Exhibit 10.13

 

Name:

[●]

Number of Restricted Stock Units subject to Award:

[●]

Date of Grant:

[●]

Vesting Commencement Date

[●]

 

 

Cerence Inc.

2019 Equity Incentive Plan

Restricted Stock Unit Award Agreement

This agreement, including any appendix, exhibit and/or addendum hereto
(collectively, this “Agreement”), evidences an award (the “Award”) of restricted
stock units granted by Cerence Inc., a Delaware corporation (the “Company”), to
the individual named above (the “Participant”), pursuant to and subject to the
terms of the Cerence Inc. 2019 Equity Incentive Plan (as from time to time
amended and in effect, the “Plan”).  Except as otherwise defined herein, all
capitalized terms used herein have the same meaning as in the Plan.

1.Grant of Restricted Stock Unit Award.  The Company grants to the Participant
on the date set forth above (the “Date of Grant”) the number of restricted stock
units (the “RSUs”) set forth above giving the Participant the conditional right
to receive, without payment and pursuant to and subject to the terms and
conditions set forth in this Agreement and in the Plan, one share of Stock (a
“Share”) with respect to each RSU forming part of the Award, subject to
adjustment pursuant to Section 7 of the Plan in respect of transactions
occurring after the date hereof.

2.Vesting; Cessation of Employment.  

(a)Vesting.  Unless earlier terminated, forfeited, relinquished or expired, the
RSUs will vest in accordance with the terms of Exhibit A attached hereto.

(b)Cessation of Employment.  Except as described in Exhibit A attached hereto,
automatically and immediately upon the cessation of the Participant’s Employment
any then unvested RSUs and, if such termination is for Cause or occurs in
circumstances that in the determination of the Administrator would have
constituted grounds for the Participant’s Employment to be terminated for Cause
(in each case, without regard to the lapsing of any required notice or cure
periods in connection therewith), any vested RSUs will terminate and be
forfeited for no consideration.

3.Agreement Not to Compete; Non-Solicitation

(a)Participant hereby agrees for a period commencing on the date hereof and
ending one (1) year following the termination of Participant’s employment with
Company, Participant shall not: (i) provide services to a Competitor in any role
or position (as employee, consultant or otherwise) that would involve
Conflicting Business Activities; (ii) knowingly for participate in soliciting or
communication with a Company employee on behalf of a Competitor for the purpose
of persuading or helping the Company employee to end or reduce his or her
relationship with the Company and (iii) knowingly or participate or solicit or
communicating with any established

 

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customer of Company in pursuit of a Competing Line of Business if Participant
had business-related contact with that customer.

(b)Definitions

(i)For purposes of 3(a) and 3(b) the following definitions apply

(ii)“Competitor” means an individual, corporation, other business entity or
separately operated business unit of an entity that engages in a Competing Line
of Business.

(iii)“Competing Line of Business” means a business that involves a product or
service offered or under development by anyone other than Cerence that would
replace or compete with any product or service offered, to be offered, or under
development by Cerence with which I had involvement while employed by Cerence
(unless Cerence is no longer engaged in or planning to engage in that line of
business).  

(iv)“Conflicting Business Activities” means: engaging in Restricted
Activities  as defined below.  For purposes of this clause,  “Restricted
Activities” means engaging in job duties or business-related activities (as an
employee, consultant, or otherwise) for a Competitor that: are the same as, or
substantially similar to, the job duties or business-related activities in which
I participate while employed by Cerence; or otherwise could put Cerence’s
Confidential Business Information at risk.

4.Delivery of Shares.  Subject to Section 4 below, the Company shall, as soon as
practicable upon the vesting of any RSUs subject to this Award (but in no event
later than 30 days following the date on which such RSUs vest), effect delivery
of the Shares with respect to such vested RSUs to the Participant (or, in the
event of the Participant’s death, to the person to whom the Award has passed by
will or the laws of descent and distribution). No Shares will be issued pursuant
to this Award unless and until all legal requirements applicable to the issuance
or transfer of such Shares have been complied with to the satisfaction of the
Administrator.  

5.Forfeiture; Recovery of Compensation.  The Administrator may cancel, rescind,
withhold or otherwise limit or restrict this Award at any time if the
Participant is not in compliance with all applicable provisions of this
Agreement and the Plan.  By accepting, or being deemed to have accepted, this
Award, the Participant expressly acknowledges and agrees that his or her rights,
and those of any permitted transferee of this Award, under this Award, including
the right to any Shares acquired under this Award or proceeds from the
disposition thereof, are subject to Section 6(a)(5) of the Plan (including any
successor provision).  The Participant further agrees to be bound by the terms
of any clawback or recoupment policy of the Company that applies to incentive
compensation that includes Awards such as the RSUs.  Nothing in the preceding
sentence may be construed as limiting the general application of Section 9 of
this Agreement.

6.Dividends; Other Rights.  This Award may not be interpreted to bestow upon the
Participant any equity interest or ownership in the Company or any subsidiary
prior to the date on which the Company delivers Shares to the Participant.  The
Participant is not entitled to vote any Shares by reason of the granting of this
Award or to receive or be credited with any dividends declared and payable on
any Share prior to the date on which any such Share is delivered to the

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Participant hereunder.  The Participant will have the rights of a shareholder
only as to those Shares, if any, that are actually delivered under this Award.

7.Nontransferability.  This Award may not be transferred except as expressly
permitted under Section 6(a)(3) of the Plan.  

8.Taxes.

(a)Responsibility for Taxes. The Participant acknowledges that, regardless of
any action taken by the Company or, if different, the Participant’s employer
(the “Employer”), the ultimate liability for all income tax, social insurance,
payroll tax, fringe benefits tax, payment on account and other tax-related items
and withholdings related to the Participant’s participation in the Plan and any
Award granted thereunder and legally applicable to the Participant as a result
of participation in the Plan (collectively, “Tax-Related Items”) is and remains
the Participant’s responsibility and may exceed the amount (if any) withheld by
the Company or the Employer.  The Participant further acknowledges that Company
and the Employer (i) make no representations or undertakings regarding the
treatment of any Tax-Related Items in connection with any aspect of the RSUs,
including, but not limited to, the grant, vesting or settlement of the RSUs, the
delivery of Shares, the subsequent sale of any Shares acquired in respect of the
RSUs or the receipt of any dividend equivalents or dividends, if applicable; and
(ii) do not commit to and are under no obligation to structure the terms of the
grant or any aspect of the RSUs to reduce or eliminate the Participant’s
liability for Tax-Related Items or achieve any particular tax result.  Further,
if the Participant is subject to Tax-Related Items in more than one
jurisdiction, the Participant acknowledges that the Company and/or the Employer
(or former employer, as applicable) may be required to withhold or account for
Tax-Related Items in more than one jurisdiction.

(b)Withholding.  Prior to the relevant taxable or withholding event, as
applicable, the Participant agrees to make arrangements satisfactory to the
Company to satisfy all Tax-Related Items.  In this regard, for any Participant
who is a U.S. taxpayer, unless otherwise determined by the Administrator, the
Company and/or the Employer’s required U.S. tax withholding obligation with
regard to all Tax-Related Items shall be satisfied in full by an arrangement
whereby (i) the Company issues to a broker designated by the Company and acting
on behalf of the Participant a number of Shares to be issued upon settlement of
the RSUs sufficient to satisfy the withholding amount due along with any
applicable third-party commission with irrevocable instructions to sell such
Shares (“Sale-to-Cover”) and (ii) the proceeds from such Sale-to-Cover will be
remitted to the Company and/or the Employer.  In the event the proceeds from the
Sale-to-Cover are insufficient to fully satisfy the applicable withholding taxes
with regard to all Tax-Related Items, the Participant authorizes withholding
from payroll and any other amounts payable to the Participant, in the same
calendar year, and otherwise agrees to make adequate provision through the
submission of cash, a check or its equivalent for any sums required to satisfy
the remaining applicable withholding taxes.  Given that the Sale-to-Cover is
both mandatory and non-discretionary, it is the intent of the parties that this
Section 8(b) comply with the requirements of Rule 10b5-1(c)(1)(i)(B) under the
Exchange Act, and the Agreement will be interpreted to comply with the
requirements of Rule 10b5-1(c) under the Exchange Act.  Unless the withholding
tax obligations of the Company and/or the Employer are satisfied by the
Participant in accordance with this provision, the Company shall have no
obligation to issue any Shares on the Participant’s behalf pursuant to the
vesting of this Award.  For all Participants who are not U.S. taxpayers, the

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Participant authorizes the Company and/or the Employer, or their respective
agents, at their discretion, to satisfy their withholding obligations with
regard to all Tax-Related Items by one or a combination of the following:  (i)
withholding from the Participant’s wages or other compensation payable to the
Participant by the Company and/or the Employer; (ii) requiring the Participant
to tender a payment in cash in an amount equal to the Tax-Related Items to the
Company and/or the Employer; (iii) withholding from the proceeds from the sale
of Shares acquired upon settlement of the RSUs, either through a voluntary sale
or through a mandatory sale arranged by the Company (on the Participant’s behalf
pursuant to this authorization without further consent); (iv) withholding Shares
to be issued upon settlement of the RSUs; and/or (v) any other method determined
by the Company and permitted under applicable laws.

Depending on the withholding method, the Company may withhold or account for
Tax-Related Items by considering applicable minimum statutory withholding rates
or other applicable withholding rates, including applicable maximum rates in the
Participant’s jurisdiction, in which case the Participant may receive a refund
of any over-withheld amount in cash and will not be entitled to the equivalent
amount in Shares.  If the obligation for Tax-Related Items is satisfied by
withholding Shares, for tax purposes, the Participant will be deemed to have
been issued the full number of Shares subject to the vested RSUs,
notwithstanding that Shares were held back solely for the purpose of satisfying
the Tax-Related Items.  The Company may refuse to deliver the Shares or the
proceeds from the sale of the Shares if the Participant fails to comply with the
Participant’s obligations in connection with the Tax-Related Items as described
in this Section 7(b).

 

(c)Section 409A.  Subject to Section 11(b) of the Plan, this Award is intended
to be exempt from Section 409A as a short-term deferral thereunder and shall be
construed and administered in accordance with that intent.

9.Effect on Employment.  Neither the grant of this Award, nor the issuance of
Shares upon the vesting of this Award, will give the Participant any right to be
retained in the employ or service of the Company or any of its subsidiaries,
affect the right of the Company or any of its subsidiaries to discharge the
Participant at any time, or affect any right of the Participant to terminate his
or her Employment at any time.

10.Provisions of the Plan.  This Agreement is subject in its entirety to the
provisions of the Plan, which are incorporated herein by reference.  A copy of
the Plan as in effect on the Date of Grant has been made available to the
Participant.  By accepting this Award, the Participant agrees to be bound by the
terms of the Plan and this Agreement.  In the event of any conflict between the
terms of this Agreement and the Plan, the terms of the Plan will control.  

11.Non-U.S. and Country-Specific Provisions.  The RSUs and any Shares subject to
the RSUs shall be subject to any special terms and conditions set forth in
Exhibit B attached hereto.  Moreover, if the Participant relocates to one of the
countries included in Exhibit B, the special terms and conditions for such
country will apply to the Participant, to the extent the Company determines that
the application of such terms and conditions is necessary or advisable for legal
or administrative purposes.  Exhibit B constitutes part of this Agreement.

12.Imposition of Other Requirements.  The Company reserves the right to impose
other requirements on the Participant’s participation in the Plan, on the RSUs
and on any Shares subject

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to the RSUs, to the extent the Company determines it is necessary or advisable
for legal or administrative reasons, and to require the Participant to sign any
additional agreements or undertakings that may be necessary to accomplish the
foregoing.

13.Acknowledgements.  The Participant acknowledges and agrees that (i) this
Agreement may be executed in two or more counterparts, each of which will be an
original and all of which together will constitute one and the same instrument;
(ii) this Agreement may be executed and exchanged using facsimile, portable
document format (PDF) or electronic signature, which, in each case, will
constitute an original signature for all purposes hereunder; and (iii) such
signature by the Company will be binding against the Company and will create a
legally binding agreement when this Agreement is countersigned by the
Participant.

 

[Signature page follows.]

 

 

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The Company, by its duly authorized officer, and the Participant have executed
this Agreement as of the date first set forth above.

 

 

 

CERENCE INC.

 

By:

 

 

Name:

 

 

Title:

 

 

Agreed and Accepted:

 

 

 

 

By

 

 

 

[●]

 

 

Signature Page to Restricted Stock Unit Award Agreement

 

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Exhibit A

Vesting Schedule

 

This Exhibit A describes the terms and conditions upon which the RSUs will
become vested.  All capitalized terms used in this Exhibit A, unless separately
defined, have the meanings set forth in the Restricted Stock Unit Award
Agreement to which this Exhibit A is attached.

 

Unless earlier terminated, forfeited, relinquished or expired, the RSUs shall
vest on the following schedule:

 

Number of RSUs

Vesting Date

[●]

[●]

[●]

[●]

[●]

[●]

[●]

[●]

[●]

[●]

[●]

[●]

[●]

[●]

 

subject, in each case, to the Participant remaining in continuous Employment
from the Date of Grant through such vesting date.

 

 

 

 

 

 

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Exhibit B

Non-U.S. and Country-Specific Provisions

Terms and Conditions

This Exhibit B includes special terms and conditions applicable to the
Participant if the Participant resides, is employed or is otherwise subject to
laws outside the U.S. and, as applicable, in one of the countries listed
below.  These terms and conditions supplement or replace (as indicated) the
terms and conditions set forth in the Restricted Stock Unit Award Agreement to
which it is attached.  All capitalized terms used in this Exhibit B, unless
separately defined, have the meanings set forth in the Restricted Stock Unit
Award Agreement to which this Exhibit B is attached.

 

Notifications

 

This Exhibit B also includes information regarding exchange controls and certain
other issues of which the Participant should be aware with respect to his or her
participation in the Plan.  The information is based on the exchange control,
securities and other laws in effect in the respective countries as of June
2019.  Such laws are often complex and change frequently.  In addition, other
laws and regulations generally applicable to the acquisition, holding or
disposal of securities and financial instruments as well as cross-border fund
transfers may apply to the Participant.  As a result, the Participant should not
rely on the information noted herein as the only source of information relating
to the consequences of participation in the Plan because the information may be
out of date at the time the RSUs vest or the Participant receives or sells
Shares.

 

In addition, the information in this Exhibit B is general in nature and may not
apply to the Participant’s particular situation.  The Company is not in a
position to assure the Participant of any particular result.  Accordingly, the
Participant should seek appropriate professional advice as to how the relevant
laws in the relevant country apply to the Participant’s situation.  

 

* * * * *

 

If the Participant is a citizen or resident of a country other than the one in
which the Participant is currently residing and/or working, transfers employment
and/or residency after the date of grant, or is considered a resident of another
country for local law purposes, the terms and conditions and information
contained herein may not be applicable to the Participant.  The Company shall,
in its sole discretion, determine to what extent the terms and conditions herein
shall apply to the Participant in such a case.

 

 

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TERMS AND CONDITIONS FOR ALL PARTICIPANTS OUTSIDE THE U.S.

1.Nature of Grant.  By accepting the grant of RSUs, the Participant
acknowledges, understands and agrees that:

(a) the Plan is established voluntarily by the Company, is discretionary in
nature and may be amended, suspended or terminated by the Company at any time to
the extent permitted in the Plan;

(b)the grant of RSUs is exceptional, voluntary and occasional and does not
create any contractual or other right to receive future grants of restricted
stock units, or benefits in lieu of restricted stock units, even if restricted
stock units have been awarded in the past;

(c)all decisions with respect to future grants of restricted stock units, if
any, will be at the sole discretion of the Company;

(d)the Participant is voluntarily participating in the Plan;

(e)the grant of RSUs and any Shares subject to the RSUs, and the income from and
value of same, are not intended to replace any pension rights or compensation;

(f)unless otherwise agreed with the Company, the RSUs and the Shares subject to
the RSUs, and the income from and value of same, are not granted as
consideration for, or in connection with, any service the Participant may
provide as a director of a subsidiary of the Company;

(g)the future value of the Shares underlying the RSUs is unknown, indeterminable
and cannot be predicted with certainty;

(h)no claim or entitlement to compensation or damages shall arise from
forfeiture of the RSUs resulting from (i) the application of any compensation
recovery or clawback policy adopted by the Company or required by applicable
laws or (ii) termination of the Participant’s Employment (for any reason
whatsoever and whether or not later found to be invalid or in breach of
employment laws in the jurisdiction where the Participant is employed or the
terms of the Participant’s employment agreement, if any);

(i)for purposes of the RSUs, the Participant’s Employment will be considered
terminated as of the date the Participant is no longer actively providing
services to the Company or a subsidiary of the Company (regardless of the reason
for such termination and whether or not later to be found invalid or in breach
of employment laws in the jurisdiction where the Participant is employed or the
terms of the Participant’s employment agreement, if any) and, unless otherwise
expressly provided in the Agreement or determined by the Company, the
Participant’s right to vest in the RSUs under the Plan, if any, will terminate
as of such date and will not be extended by any notice period (e.g., the
Participant’s period of service would not include any contractual notice period
or any period of “garden leave” or similar period mandated under employment laws
in the jurisdiction where the Participant is employed or the terms of the
Participant’s employment agreement, if any); the Administrator shall have the
exclusive discretion to determine when the Participant is no longer actively
providing services for purposes of the RSUs, and

 

 

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(j)neither the Company, the Employer nor any subsidiary of the Company shall be
liable for any exchange rate fluctuation between the Participant’s local
currency and the United States Dollar that may affect the value of the RSUs or
of any amounts due to the Participant pursuant to the vesting and settlement of
the RSUs or the subsequent sale of any Shares acquired upon settlement.

2.Additional Conditions to Issuance of Shares.  If at any time the Company
determines, in its discretion, that the listing, registration or qualification
of the Shares upon any securities exchange or under any law (including any U.S.
or non-U.S. federal, state or local law), or the consent or approval of any
governmental regulatory authority is necessary or desirable as a condition to
the issuance of Shares to the Participant, such issuance will not occur unless
and until such listing, registration, qualification, consent or approval has
been effected or obtained free of any conditions not acceptable to the Company.

3.No Advice Regarding Grant.  The Company is not providing any tax, legal or
financial advice, nor is the Company making any recommendations regarding the
Participant’s participation in the Plan or sale of the Shares acquired upon
vesting and settlement of the RSUs.  The Participant should consult with his or
her own personal tax, legal and financial advisors regarding his or her
participation in the Plan before taking any action related to the Plan.

4.Data Privacy. If the Participant would like to participate in the Plan, the
Participant will need to review the information provided in this Section 4 and,
where applicable, declare the Participant’s consent to the processing and/or
transfer of personal data as described below.

 

(a)

EEA+ Controller and Representative.  If the Participant is based in the European
Union (“EU”), the European Economic Area, Switzerland or, if and when the United
Kingdom leaves the European Union, the United Kingdom (collectively “EEA+”),
Participant should note that the Company, with its registered address at [insert
address], United States of America, is the controller responsible for the
processing of the Participant’s personal data in connection with the Agreement
and the Plan. The Company’s representative in the EU is [insert name, address
and contact details of EU representative designated by the Company according to
Article 27 GDPR]. 

 

 

(b)

Data Collection and Usage.  The Company collects, uses and otherwise processes
certain personal data about the Participant, including, but not limited to, the
Participant’s name, home address and telephone number, email address, date of
birth, social insurance number, passport or other identification number (e.g.,
resident registration number), salary, nationality, job title, any shares of
stock or directorships held in the Company, details of all RSUs or any other
entitlement to shares of stock awarded, canceled, exercised, vested, unvested or
outstanding in the Participant’s favor, which the Company receives from the
Participant, Participant’s Employer or otherwise in connection with this
Agreement or the Plan (“Data”), for the purposes of implementing, administering
and managing the Plan and allocating Shares pursuant to the Plan.  

 

If the Participant is based in the EEA+, the legal basis, where required, for
the processing of Data by the Company is the necessity of the data processing
for the

 

 

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Company to (i) perform its contractual obligations under this Agreement,
(ii) comply with legal obligations established in the EEA+, or (iii) pursue the
legitimate interest of complying with legal obligations established outside of
the EEA+.  

 

If the Participant is based outside of the EEA+, the legal basis, where
required, for the processing of Data by the Company is the Participant’s
consent, as further described below.

 

 

(c)

Stock Plan Administration Service Providers.  The Company transfers Data to
E*TRADE Corporate Financial Services, Inc., and E*TRADE Securities LLC
(collectively, “E*TRADE”), an independent service provider, which is assisting
the Company with the implementation, administration and management of the
Plan.  In the future, the Company may select a different service provider and
share Data with such other provider serving in a similar manner.  E*TRADE will
open an account for the Participant to receive and trade Shares acquired under
the Plan.  The Participant may be asked to agree on separate terms and data
processing practices with E*TRADE, with such agreement being a condition to the
ability to participate in the Plan.  

 

 

(d)

International Data Transfers.  In the event the Participant resides, works or is
otherwise located outside of the U.S., Data will be transferred from the
Participant’s country to the U.S., where the Company and its service providers
are based.  The Participant understands and acknowledges that the U.S. is not
subject to an unlimited adequacy finding by the European Commission and might
not provide a level of protection of personal data equivalent to the level of
protection in the Participant’s country.  As a result, in the absence of a
self‑certification of the data recipient in the U.S. under the EU/U.S. Privacy
Shield Framework and the implementation of appropriate safeguards such as the
Standard Contractual Clauses adopted by the EU Commission, the processing of
personal data might not be subject to substantive data processing principles or
supervision by data protection authorities.  In addition, data subjects might
have no or less enforceable rights regarding the processing of their personal
data.    

 

Neither the Company nor E*TRADE is currently self-certified under the EU/U.S.
Privacy Shield Framework.  If the Participant is based in the EEA+, Data will be
transferred from the EEA+ to the Company based on the EU Standard Contractual
Clauses.  The Participant may request a copy of such appropriate safeguards by
contacting [insert contact details, e.g., Company’s data privacy officer].  The
onward transfer of Data from the Company to E*TRADE or, as the case may be, a
different service provider of the Company is conducted without appropriate
safeguards based solely on the Participant’s consent, as further described
below.

 

If the Participant is based outside of the EEA+, the Company’s legal basis,
where required, for the transfer of Data from the Participant’s country to the
Company and from the Company onward to E*TRADE or, as the case may be, a
different service provider of the Company is the Participant’s consent, as
further described below.

 

 

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(e)

Data Retention.  The Company will hold and use the Data only as long as is
necessary to implement, administer and manage the Participant’s participation in
the Plan, or as required to comply with legal or regulatory obligations,
including under tax and security laws.

 

 

(f)

Data Subject Rights.  The Participant may have a number of rights under data
privacy laws in his or her jurisdiction.  Depending on where the Participant is
based, such rights may include the right to (i) request access or copies of Data
the Company processes, (ii) the rectification or amendment of incorrect or
incomplete Data, (iii) the deletion of Data, (iv) request restrictions on the
processing of Data, (v) object to the processing of Data for legitimate
interests, (vi) the portability of Data, (vi) lodge complaints with competent
authorities in the Participant’s jurisdiction, and/or to (viii) receive a list
with the names and addresses of any potential recipients of Data.  To receive
additional information regarding these rights or to exercise these rights, the
Participant can contact [insert contact details, e.g., Company’s data privacy
officer].

 

 

(g)

Necessary Disclosure of Personal Data. The Participant understands that
providing the Company with Data is necessary for the performance of the
Agreement and that the Participant’s refusal to provide Data would make it
impossible for the Company to perform its contractual obligations and may affect
the Participant’s ability to participate in the Plan.

 

 

(h)

Voluntariness and Consequences of Consent Denial or Withdrawal.  Participation
in the Plan is voluntary and the Participant is providing any consents referred
to herein on a purely voluntary basis. The Participant understands that he or
she may withdraw any such consent at any time with future effect for any or no
reason.  If the Participant does not consent, or if the Participant later seeks
to withdraw the Participant’s consent, the Participant’s salary from or
employment and career with the Employer will not be affected; the only
consequence of refusing or withdrawing the Participant’s consent is that the
Company would not be able to grant the RSUs or other awards to the Participant
or administer or maintain the RSUs.  For more information on the consequences of
refusal to consent or withdrawal of consent, the Participant should contact
[insert contact, e.g., Company’s data privacy officer].

 

 

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Declaration of Consent.  If the Participant is based in the EEA+, by accepting
the RSUs and indicating consent via the Company’s online acceptance procedure,
the Participant explicitly declares his or her consent to the onward transfer of
Data by the Company to E*TRADE or, as the case may be, a different service
provider of the Company in the U.S. as described in Section 4(e) above.  

 

If the Participant is based outside of the EEA+, by accepting the RSUs and
indicating consent via the Company’s online acceptance procedure, the
Participant explicitly declares his or her consent to the entirety of the Data
processing operations described in this Section 4 including, without limitation,
the onward transfer of Data by the Company to E*TRADE or, as the case may be, a
different service provider of the Company in the U.S.

5.Agreement Severable.  In the event that any provision in this Agreement is
held invalid or unenforceable, such provision will be severable from, and such
invalidity or unenforceability will not be construed to have any effect on, the
remaining provisions of this Agreement.

6.Language.  The Participant acknowledges and represents that the Participant is
sufficiently proficient in the English language or has consulted with an advisor
who is sufficiently proficient in English as to allow the Participant to
understand the terms and conditions of this Agreement and any other documents
related to the Plan.  If the Participant has received this Agreement or any
other document related to the Plan translated into a language other than English
and if the meaning of the translated version is different from the English
version, the English version will control.

7.Electronic Delivery and Participation.  The Company may, in its sole
discretion, deliver any documents related to this Agreement or to participation
in the Plan or to future awards that may be granted under the Plan by electronic
means or to request the Participant’s consent to participate in the Plan by
electronic means.  The Participant hereby consents to receive such documents by
electronic delivery and to participate in the Plan through an online or
electronic system established and maintained by the Company or a third party
designated by the Company.

8.Waiver.  The Participant acknowledges that a waiver by the Company of breach
of any provision of this Agreement shall not operate or be construed as a waiver
of any other provision of this Agreement, or of any subsequent breach by the
Participant or any other participant.

9.Insider Trading Restrictions/Market Abuse Laws.  The Participant acknowledges
that he or she may be subject to insider trading restrictions and/or market
abuse laws in applicable jurisdictions including, but not limited to, the United
States and the Participant’s country of residence, which may affect the
Participant’s ability to directly or indirectly acquire, sell or attempt to sell
Shares or rights to Shares (e.g., RSUs) under the Plan during such times as the
Participant is considered to have “insider information” regarding the Company
(as defined by the laws in the applicable jurisdictions).  Any restrictions
under these laws or regulations are separate from and in addition to any
restrictions that may be imposed under any applicable insider trading policy of
the Company.  The Participant is responsible for ensuring compliance with any
applicable restrictions and should consult his or her personal legal advisor on
this matter.

 

 

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10.Foreign Asset/Account, Exchange Control, and Tax Reporting.  Depending on the
Participant’s country, the Participant may be subject to foreign asset/account,
exchange control and/or tax reporting requirements as a result of the vesting
and settlement of the RSUs, the acquisition, holding, and/or transfer of Shares
or cash resulting from participation in the Plan and/or the opening and
maintenance of a brokerage or bank account in connection with the Plan.  The
Participant may be required to report such assets, accounts, account balances
and values and/or related transactions to the applicable authorities in his or
her country and/or repatriate funds received in connection with the Plan to the
Participant’s country within a certain time period and/or according to certain
procedure.  The Participant acknowledges that he or she is responsible for
ensuring compliance with any applicable foreign asset/account, exchange control
and tax reporting requirements and that the Participant should consult with his
or her personal legal advisor to ensure compliance with applicable laws.

BELGIUM

Notifications

Foreign Asset/Account Reporting Information. The Participant is required to
report any securities (e.g., Shares acquired under the Plan) or bank accounts
(including brokerage accounts) held outside of Belgium on the Participant’s
annual tax return.  The Participant will also be required to complete a separate
report providing the National Bank of Belgium with details regarding any such
account (including the account number, the name of the bank in which such
account is held and the country in which such account is located).  This report,
as well as additional information on how to complete it, can be found on the
website of the National Bank of Belgium, www.nbb.be, under
Kredietcentrales/Centrales des crédits caption.

Stock Exchange Tax Alert.  A stock exchange tax may apply to transactions under
the Plan, such as the sale of Shares acquired under the Plan.  The Participant
should consult with his or her personal tax advisor for details regarding the
Participant’s obligations with respect to the stock exchange tax.

Brokerage Account Tax Alert. A brokerage account tax may apply if the average
annual value of the securities the Participant holds (including Shares acquired
under the Plan) in a brokerage or other securities account exceeds certain
thresholds.  The Participant should consult with his or her personal tax advisor
for details regarding the Participant’s obligations with respect to the
brokerage account tax.

CANADA

Terms and Conditions

Delivery of Shares.  This provision supplements Section 3 of the Restricted
Stock Unit Award Agreement:

The discretion to pay cash in lieu of delivering Shares for the RSUs, as
described in the Plan, shall not apply to any RSUs in Canada.  All vested RSUs
in Canada will be settled by the Company issuing Shares to the Participant.

 

 

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Nature of Grant.  This provision replaces Section 1(i) of this Exhibit B:

For purposes of the RSUs, the Participant’s Employment will be considered
terminated as of the date that is the earliest of: (a) the date the
Participant’s Employment with the Employer is terminated, (b) the date the
Participant receives written notice of termination from the Employer, regardless
of any notice period or period of pay in lieu of such notice mandated under the
employment laws in the jurisdiction where the Participant is employed or the
terms of the Participant’s employment contract, if any, or (c) the date the
Participant is no longer actively providing services to the Company or a
subsidiary of the Company (regardless of the reason for such termination and
whether or not later found to be invalid or in breach of employment laws in the
jurisdiction where the Participant is employed or the terms of the Participant’s
employment contract, if any) and, unless otherwise expressly provided in the
Agreement or determined by the Company, the Participant’s right to vest in the
RSUs under the Plan, if any, will terminate as of such date; the Administrator
shall have the exclusive discretion to determine when the Participant is no
longer actively providing services for purposes of the RSUs.

If the Participant is a resident of Quebec, the following provisions also will
apply:

Language Consent. The parties acknowledge that it is their express wish that the
Agreement, including this Exhibit B, as well as all documents, notices, and
legal proceedings entered into, given or instituted pursuant hereto or relating
directly or indirectly hereto, be drawn up in English.

Consentement Relatif à la Langue Utilisée.  Les parties reconnaissent avoir
expressément souhaité que la convention ainsi que cette Exhibit B, ainsi que
tous les documents, avis et procédures judiciares, éxécutés, donnés ou intentés
en vertu de, ou liés directement ou indirectement à la présente convention,
soient rédigés en langue anglaise.

Data Privacy.  This provision supplements Section 4 of this Exhibit B:

The Participant hereby authorizes the Company and the Company’s representatives
to discuss with and obtain all relevant information from all personnel,
professional or not, involved in the administration and operation of the
Plan.  The Participant further authorizes the Company and any subsidiary of the
Company, as well as E*TRADE or such other stock plan service provider as may be
selected by the Company to assist with the Plan, to disclose and discuss the
Plan with their advisors.  The Participant further authorizes the Company and
any subsidiary of the Company to record such information and to keep such
information in the Participant’s employee file.

Notifications

Securities Law Information.  The Participant is permitted to sell Shares
acquired under the Plan through the Company’s designated broker, provided the
resale of such Shares takes place outside of Canada through the facilities of a
stock exchange on which the Shares are listed.  The Shares are currently listed
on the Nasdaq Stock Market.

Foreign Asset/Account Reporting Information.  Foreign specified property held by
a Canadian resident must be reporting annually on a Form T1135 (Foreign Income
Verification Statement) if the total cost of the foreign specified property
exceeds C$100,000 at any time during the year.  Thus, unvested RSUs must be
reported (generally at a nil cost) if the C$100,000 cost threshold is

 

 

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exceeded because of other foreign specified property held by the
Participant.  When Shares are acquired, their cost generally is the adjusted
cost base (“ACB”) of the Shares.  The ACB would ordinarily equal the fair market
value of the Shares at the time of acquisition, but if the Participant owns
other Shares, this ACB may need to be averaged with the ACB of the other
Shares.  The Participant should consult with his or her personal legal advisor
regarding what reporting obligations, if any, will apply to the Participant with
respect to Shares acquired under the Plan.

CHINA

Terms and Conditions

Delivery of Shares.  This provision supplements Section 3 of the Restricted
Stock Unit Award Agreement:

The settlement of the Award upon vesting is conditioned upon the Company
obtaining and maintaining all necessary approvals from the People’s Republic of
China State Administration of Foreign Exchange (“SAFE”) and any other applicable
government entities required to permit the operation of the Plan in China, as
determined by the Company it its sole discretion.  If or to the extent the
Company is unable to obtain or maintain the registration or otherwise comply
with applicable regulatory requirements in China, no Shares shall be issued
under the Plan.  In this case, and notwithstanding Section 3 of the Restricted
Stock Unit Award Agreement, the Company retains the discretion to settle the
Award through local payroll in the form of a cash payment equal to the fair
market value of the Shares subject to the vested RSUs on the vesting date,
subject to any obligation to satisfy Tax-Related Items; and any references in
the Restricted Stock Unit Award Agreement to the issuance of Shares shall not
apply to the Participant.

To facilitate compliance with any applicable laws and regulations in China, the
Participant agrees that the Company (or a brokerage firm instructed by the
Company, if applicable) is entitled to (i) sell all Shares issued to the
Participant at settlement (on the Participant’s behalf and at the Participant’s
direction pursuant to this authorization), either at the time of settlement, at
the time the Participant ceases employment with the Employer, or at such other
time as determined by the Company, and (ii) require that any Shares acquired
under the Plan be held with a designated brokerage firm until such Shares are
sold.

The Participant also agrees to sign any agreements, forms and/or consents that
may be reasonably requested by the Company (or the Company’s designated
brokerage firm) to effectuate the sale of the Shares and acknowledges that
neither the Company nor the designated brokerage firm is under any obligation to
arrange for such sale of Shares at any particular price (it being understood
that the sale will occur at the then-current market price) and that brokerage
fees or commissions may be incurred in any such sale.  In any event, when Shares
acquired under the Plan are sold, the proceeds of the sale of the Shares, less
any Tax-Related Items and brokerage fees or commissions, will be remitted to the
Participant in accordance with applicable exchange control laws and regulations.

Exchange Control Restrictions.  The Participant understands and agrees that he
or she is required to immediately repatriate the proceeds of the sale of Shares,
any cash dividends or dividend equivalents, and any other funds realized under
the Plan to China.  The Participant further

 

 

--------------------------------------------------------------------------------

 

understands that the repatriation of such funds may need to be effected through
a special exchange control account established by the Company or a subsidiary of
the Company and the Participant hereby consents and agrees that such funds may
be transferred to such special account prior to being delivered to the
Participant’s personal account.  

The Participant also understands that the Company will deliver sale proceeds,
any cash dividends or dividend equivalents, and any other funds realized under
the Plan to the Participant as soon as practicable, but that there may be delays
in distributing the funds due to exchange control requirements in China.  Funds
may be paid to the Participant in U.S. dollars or local currency at the
Company’s discretion.  If the funds are paid in U.S. dollars, the Participant
will be required to set up a U.S. dollar bank account in China so that the
proceeds may be deposited into this account.  If the funds are paid in local
currency, the Company is under no obligation to secure any particular currency
conversion rate and the Company may face delays in converting the funds to local
currency.  The Participant agrees to bear any currency fluctuation risk between
the time the Shares are sold and the time (i) the Tax-Related Items are
converted to local currency and remitted to the tax authorities and/or (ii) the
net proceeds are converted to local currency and distributed to the Participant.

The Participant further agrees to comply with any other requirements that may be
imposed by the Company in the future in order to facilitate compliance with
exchange control requirements in China.

GERMANY

Notifications

Exchange Control Information.  The Participant must report any cross-border
payments in excess of €12,500 to the German Federal Bank (Bundesbank).  The
report must be filed electronically and the form of report (Allgemeine
Meldeportal Statistik) can be accessed via the Bundesbank’s website
(www.bundesbank.de).  The Participant is responsible for complying with
applicable reporting obligations and should consult his or her personal legal
advisor on this matter.

HONG KONG

Terms and Conditions

Delivery of Shares.  This provision supplements Section 3 of the Restricted
Stock Unit Award Agreement:  

The discretion to pay cash in lieu of delivering Shares for the RSUs, as
described in the Plan, shall not apply to any RSUs in Hong Kong.  All vested
RSUs in Hong Kong will be settled by the Company issuing Shares to the
Participant.

Notifications

Securities Law Information.  WARNING:  The RSUs and the Shares issued upon
settlement of the RSUs do not constitute a public offering of securities and are
available only to employees of the Company or subsidiaries of the Company.  

 

 

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The Agreement, the Plan and other incidental communication materials are
intended only for the personal use of the Participant and not for distribution
to any other persons.  The Agreement, the Plan and other incidental
communication materials have not been prepared in accordance with and are not
intended to constitute a “prospectus” for a public offering of securities under
the applicable companies and securities legislation in Hong Kong, nor have the
documents been reviewed by any regulatory authority in Hong Kong.  If the
Participant has questions about any of the contents of the Agreement or the
Plan, he or she should contact a legal or other professional advisor.

INDIA

Notifications

Exchange Control Information.  Any funds realized in connection with the Plan
(e.g., proceeds from the sale of Shares and cash dividends paid on Shares) must
be repatriated to India within a specified period of time after receipt as
prescribed under Indian exchange control laws.  It is the Participant’s
responsibility to obtain an inward remittance certificate (“FIRC”) from the bank
where the Participant deposits the foreign currency.  The Participant should
maintain the FIRC as evidence of the repatriation of funds in the event the
Reserve Bank of India or the Employer requests proof of repatriation.  

Foreign Asset/Account Reporting Requirement.  The Participant is required to
declare foreign bank accounts and any foreign financial assets (including Shares
and, possibly, rights to Shares held outside India) in the Participant’s annual
tax return.  The Participant should consult with his or her personal tax advisor
to ensure compliance with applicable reporting obligations.

ITALY

Terms and Conditions

Plan Document Acknowledgment.  By accepting the Agreement, the Participant
further acknowledges that the Participant has received a copy of the Plan, has
reviewed the Plan and the Agreement in their entirety and fully understands and
accepts all provisions of the Plan and the Agreement.  The Participant further
acknowledges that the Participant has read and specifically and expressly
approves, without limitation, the following sections of the Restricted Stock
Unit Award Agreement: Section 2, “Vesting; Cessation of Employment”; Section 3,
“Delivery of Shares”; Section 4, “Forfeiture; Recovery”; Section 7, “Taxes”; and
Section 11, “Imposition of Other Requirements”; and the following sections of
Appendix B: Section 1, “Nature of Grant”; Section 2, “Additional Conditions to
Issuance of Shares”; Section 4, “Data Privacy”; Section 7, “Electronic Delivery
and Participation”; Section 9, “Insider Trading Restrictions/Market Abuse Laws”;
and Section 10, “Foreign Asset/Account, Exchange Control and Tax Reporting”
(including the “Foreign Asset/Account Reporting Information” below for Italy).

Notifications

Foreign Asset/Account Reporting Information.  If the Participant holds
investments abroad or foreign financial assets (e.g., cash, Shares) that may
generate income taxable in Italy, the Participant is required to report them on
his or her annual tax return (UNICO Form, RW Schedule)

 

 

--------------------------------------------------------------------------------

 

or on a special form if no tax return is due.  The same reporting duties apply
if the Participant is the beneficial owner of the investments, even if the
Participant does not directly hold investments abroad or foreign assets.

Foreign Financial Assets Tax Alert.  The value of any Shares (and certain other
foreign assets) held outside of Italy may be subject to a foreign financial
assets tax.  The taxable amount is equal to the fair market value of Shares on
December 31 or on the last day the Shares were held (the tax is levied in
proportion to the number of days Shares were held over the calendar year).  The
value of financial assets held abroad must be reported in the annual tax
return.  The Participant should consult with his or her personal tax advisor for
details regarding the Participant’s obligations with respect to the foreign
financial assets tax.

JAPAN

Notifications

Foreign Asset/Account Reporting Information.  The Participant is required to
report details of any assets (such as Shares) held outside of Japan as of
December 31st to the extent such assets have a total net fair market value
exceeding ¥50,000,000.  Such report is due by March 15th each year.  The
Participant should consult with his or her personal tax advisor as to whether
the reporting obligation extends to any outstanding RSUs held by the Participant
and to ensure compliance with applicable reporting obligations.

KOREA

Notifications

Foreign Asset/Account Reporting Information.  Korean residents must declare all
foreign financial accounts (e.g., brokerage accounts, bank accounts) to the
Korean tax authorities and file a report with respect to such accounts if the
value of such accounts exceeds KRW 500 million (or an equivalent amount in
foreign currency) on any month-end date during the calendar year.  The
Participant should consult with his or her personal tax advisor to ensure
compliance with applicable reporting obligations.

SPAIN

Terms and Conditions

Nature of Grant.  This section supplements Section 1 of this Exhibit B:

By accepting the RSUs, the Participant consents to participate in the Plan and
acknowledges having received a copy of the Plan.

The Participant understands that, as a condition of the grant of the RSUs, the
termination of the Participant’s employment for any reason will automatically
result in the forfeiture of any and all RSUs that have not vested as of the date
of termination.  In particular, the Participant understands and agrees that any
unvested RSUs will be forfeited without entitlement to the underlying Shares or
to any amount as indemnification in the event of a termination of the
Participant’s employment

 

 

--------------------------------------------------------------------------------

 

prior to vesting by reason of, including, but not limited to: death, disability,
resignation, retirement, disciplinary dismissal adjudged to be with cause,
disciplinary dismissal adjudged or recognized to be without cause, individual or
collective layoff on objective grounds, whether adjudged to be with cause or
adjudged or recognized to be without cause, material modification of the terms
of employment under Article 41 of the Workers’ Statute, relocation under Article
40 of the Workers’ Statute, Article 50 of the Workers’ Statute, unilateral
withdrawal by the Employer, and under Article 10.3 of Royal Decree 1382/1985.

Furthermore, the Participant understands that the Company has unilaterally,
gratuitously and discretionally decided to grant the RSUs under the Plan to
individuals who may be employees of the Company or subsidiary of the Company
throughout the world.  The decision is a limited decision that is entered into
upon the express assumption and condition that any grant will not economically
or otherwise bind the Company or any subsidiary of the Company on an ongoing
basis (other than as set forth in this Agreement and the Plan).  Consequently,
the Participant understands that the RSUs are granted on the assumption and
condition that the RSUs and the related Shares shall not become a part of any
employment or contract (either with the Company or any subsidiary of the
Company) and shall not be considered a mandatory benefit, salary for any
purposes (including severance compensation) or any other right whatsoever.  In
addition, the Participant understands that the grant of the RSUs would not be
made to the Participant but for the assumptions and conditions referred to
above; thus, the Participant acknowledges and freely accepts that should any or
all of the assumptions be mistaken or should any of the conditions not be met
for any reason, then the grant of RSUs shall be null and void.

Notifications

Securities Law Information. No “offer of securities to the public,” as defined
under Spanish law, has taken place or will take place in the Spanish territory
in connection with the grant of the RSUs under the Plan. This Agreement and the
Plan have not been nor will they be registered with the Comisión Nacional del
Mercado de Valores, and do not constitute a public offering prospectus.

Exchange Control Information.  The Participant must declare the acquisition,
ownership and disposition of stock in a foreign company (including Shares
acquired under the Plan) to the Spanish Dirección General de Comercio e
Inversiones (the “DGCI”), the Bureau for Commerce and Investments, which is a
department of the Ministry of Economy and Competitiveness, for statistical
purposes.  Generally, the declaration must be filed in January for Shares
acquired or sold during (or owned as of December 31) the prior year; however, if
the value of the Shares acquired under the Plan or the amount of the sale
proceeds exceeds €1,502,530, the declaration must be filed within one month of
the acquisition or sale, as applicable.  

The Participant may be required to declare electronically to the Bank of Spain
any foreign accounts (including brokerage accounts held abroad), any foreign
instruments (including Shares acquired under the Plan), and any transactions
with non-Spanish residents (including any payment of cash or Shares made by the
Company) depending on the value of the transactions during the relevant year or
the balances in such accounts and the value of such instruments as of December
31 of the relevant year.  The Participant should consult with his or her
personal legal advisor regarding the applicable thresholds and corresponding
reporting requirements.

 

 

--------------------------------------------------------------------------------

 

Foreign Asset/ Account Reporting Information.  The Participant is required to
report assets or rights deposited or held outside of Spain (including the Shares
acquired under the Plan or cash proceeds from the sale of the Shares acquired
under the Plan) if the value per type of asset or right exceeds a certain
threshold.  This obligation applies to assets and rights held as of December 31
and requires that information on such assets and rights be included in the
Participant’s tax return filed with the Spanish tax authorities for such year. 
After such assets or rights are initially reported, the reporting obligation
will apply for subsequent years only if the value of any previously reported
asset or right increases by more than a certain threshold or if ownership of
such asset or right is transferred or relinquished during the year.  The
Participant should consult with his or her personal tax advisor regarding the
applicable thresholds and corresponding reporting requirements. 

SWITZERLAND

Notifications

Securities Law Information.  The RSUs are not intended to be publicly offered in
or from Switzerland.  Neither this document nor any other materials relating to
the RSUs (i) constitutes a prospectus as such term is understood pursuant to
article 652a of the Swiss Code of Obligations, or (ii) may be publicly
distributed or otherwise made publicly available in Switzerland.  Further,
neither this document nor any other offering or marketing material relating to
the offering of the RSUs has been or will be filed with or approved or
supervised by any Swiss regulatory authority (in particular, the Swiss Financial
Market Supervisory Authority (FINMA)).

UNITED KINGDOM

Terms and Conditions

Delivery of Shares.  This provision supplements Section 3 of the Restricted
Stock Unit Award Agreement:

RSUs shall be settled only in Shares.  In no event shall the RSUs be paid in
cash, notwithstanding any discretion contained in the Plan to the contrary.  

Taxes.  This provision supplements Section 7 of the Restricted Stock Unit Award
Agreement:

Without limitation to Section 7 of the Restricted Stock Unit Award Agreement,
the Participant hereby agrees that the Participant is liable for all Tax-Related
Items and hereby covenants to pay all such Tax-Related Items, as and when
requested by the Company or if different, the Employer or by Her Majesty’s
Revenue & Customs (“HMRC”) (or any other tax authority or any other relevant
authority).  The Participant also hereby agrees to indemnify and keep
indemnified the Company and, if different, the Employer against any Tax-Related
Items that they are required to pay or withhold or have paid or will pay to HMRC
(or any other tax authority or any other relevant authority) on the
Participant’s behalf.

Notwithstanding the foregoing, if the Participant is a director or executive
officer of the Company (within the meaning of Section 13(k) of the Exchange
Act), the terms of the immediately foregoing provision will not apply.  In the
event that the Participant is a director or executive officer of the Company and
the income tax is not collected from or paid by the Participant within ninety
(90)

 

 

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days of the end of the U.K. tax year in which an event giving rise to the
indemnification described above occurs, the amount of any uncollected income tax
may constitute a benefit to the Participant on which additional income tax and
National Insurance contributions (“NICs”) may be payable.  The Participant will
be responsible for reporting and paying any income tax due on this additional
benefit directly to HMRC under the self-assessment regime and for paying to the
Company and/or the Employer (as appropriate) the amount of any employee NICs due
on this additional benefit.

NIC Joint Election.  As a condition of participation in the Plan, the
Participant agrees to accept liability for any secondary Class 1 National
Insurance contributions that may be payable by the Company and/or the Employer
(or any successor to the Company or the Employer) in connection with the RSUs
and any event giving rise to Tax-Related Items (“Employer NICs”).  

Without prejudice to the foregoing, the Participant agrees to enter into the
following joint election with the Company, the form of such NICs Joint Election
being formally approved by HMRC (the “NIC Joint Election”), and any other
consent or elections required to accomplish the transfer of the Employer NICs to
the Participant.  The Participant further agrees to execute such other elections
as may be required between the Participant and any successor to the Company
and/or the Employer for the purpose of continuing the effectiveness of the
Participant’s NIC Joint Election.  The Participant understands that the NIC
Joint Election applies to any RSUs granted to him or her under the Plan after
the execution of the NIC Joint Election.  The Participant agrees that the
Employer NICs may be collected by the Company or the Employer by any of the
methods set forth in Section 7 of the Restricted Stock Unit Award Agreement.

If the Participant does not enter into the NIC Joint Election, he or she will
not be entitled to vest in the RSUs or receive any benefit in connection with
the RSUs unless and until he or she enters into a NIC Joint Election and no
Shares or other benefit pursuant to the RSUs will be issued to the Participant
under the Plan, without any liability to the Company and/or the Employer.

IMPORTANT NOTE:  By accepting the Agreement (whether by clicking on the
acceptance buttons as part of the Company’s electronic acceptance procedure or
by signing the Agreement in hard copy), the Participant is agreeing to be bound
by the terms of the NIC Joint Election.  The Participant should read the terms
of the NIC Joint Election carefully before accepting the Agreement and the NIC
Joint Election.  However, if requested by the Company, the Participant agrees to
separately execute the NIC Joint Election.

 

 

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ATTACHMENT FOR THE UNITED KINGDOM

 

Important Note on the Joint Election to Transfer

Employer National Insurance Contributions

As a condition of participation in the Cerence Inc. 2019 Equity Incentive Plan,
as amended (the “Plan”) and the restricted stock units (the “RSUs”) that have
been granted to you (the “Participant”) by Cerence Inc., a Delaware corporation
(the “Company”), the Participant is required to enter into a joint election to
transfer to the Participant any liability for employer national insurance
contributions (the “Employer’s Liability”) that may arise in connection with the
grant of the RSUs or in connection with any restricted stock units that may be
granted by the Company to the Participant under the Plan (the “Joint
Election”).  

If the Participant does not agree to enter into the Joint Election, the grant of
the RSUs will be worthless and the Participant will not be able to vest in the
RSUs or receive any benefit in connection with the RSUs.

By entering into the Joint Election:

 

•

the Participant agrees that any Employer’s Liability that may arise in
connection with or pursuant to the vesting of the RSUs (or any restricted stock
units granted to the Participant under the Plan) or the acquisition of Shares or
other taxable events in connection with the RSUs (or any other restricted stock
units granted under the Plan) will be transferred to the Participant;

 

•

the Participant authorises the Company and/or the Participant’s employer to
recover an amount sufficient to cover this liability by any method set forth in
the Restricted Stock Unit Award Agreement and/or the Joint Election; and

 

•

the Participant acknowledges that even if he or she has accepted the Joint
Election via the Company’s online procedure, the Company or the Participant’s
employer may still require the Participant to sign a paper copy of the Joint
Election (or a substantially similar form) if the Company determines such is
necessary to give effect to the Joint Election.

By accepting the RSUs through the Company’s online acceptance procedure (or by
signing the Restricted Stock Unit Award Agreement), the Participant is agreeing
to be bound by the terms of the Joint Election.

Please read the terms of the Joint Election carefully before accepting the
Restricted Stock Unit Award Agreement and the Joint Election.

Please print and keep a copy of the Joint Election for your records.

 

 

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Cerence Inc. 2019 Equity Incentive Plan

(UK Employees)

Election To Transfer the Employer’s National Insurance Liability to the Employee

1.

Parties

This Election is between:

(A)You, the individual who has gained access to this Election (the “Employee”),
who is employed by one of the employing companies listed in the attached
schedule (the “Employer”) and who is eligible to receive restricted stock units
(“RSUs”) granted by Cerence Inc. pursuant to the terms and conditions of the
Cerence Inc. 2019 Equity Incentive Plan, as amended (the “Plan”), and

(B)Cerence Inc. of 15 Wayside Road, Burlington, Massachusetts, United States
(the “Company”), which may grant RSUs under the Plan and is entering into this
Form of Election on behalf of the Employer.

2.Purpose of Election

2.1This Election relates to RSUs granted by the Company to the Employee under
the Plan on or after [date].  

2.2In this Election the following words and phrases have the following meanings:

“Taxable Event” means .any event giving rise to Relevant Employment Income.

“ITEPA” means the Income Tax (Earnings and Pensions) Act 2003.

“Relevant Employment Income” from RSUs on which employer’s National Insurance
Contributions becomes due is defined as:

 

  i.

an amount that counts as employment income of the earner under section 426 ITEPA
(restricted securities: charge on certain post-acquisition events);

 

 ii.

an amount that counts as employment income of the earner under section 438 of
ITEPA (convertible securities: charge on certain post-acquisition events); or

 

iii.

any gain that is treated as remuneration derived from the earner’s employment by
virtue of section 4(4)(a) SSCBA, including without limitation:

(A)the acquisition of securities pursuant to the RSUs (within the meaning of
section 477(3)(a) of ITEPA);

(B)the assignment (if applicable) or release of the RSUs in return for
consideration (within the meaning of section 477(3)(b) of ITEPA);

(C)the receipt of a benefit in connection with the RSUs, other than a benefit
within (i) or (ii) above (within the meaning of section 477(3)(c) of ITEPA).

 

 

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“SSCBA” means the Social Security Contributions and Benefits Act 1992.

2.3This Election relates to the Employer’s secondary Class 1 National Insurance
Contributions (the “Employer’s Liability”) which may arise in respect of the
Relevant Employment Income in respect of RSUs pursuant to section 4(4)(a) and/or
paragraph 3B(1A) of Schedule 1 of the SSCBA.

2.4This Election does not apply in relation to any liability, or any part of any
liability, arising as a result of regulations being given retrospective effect
by virtue of section 4B(2) of either the SSCBA or the Social Security
Contributions and Benefits (Northern Ireland) Act 1992.

2.5This Election does not apply to the extent that it relates to relevant
employment income which is employment income of the earner by virtue of Chapter
3A of Part VII of ITEPA (employment income: securities with artificially
depressed market value).

2.6Any reference to the Company and/or the Employer shall include that entity’s
successors in title and assigns as permitted in accordance with the terms of the
Plan and the Restricted Stock Unit Award Agreement.  This Election will have
effect in respect of the RSUs and any awards which replace or replaced the RSUs
following their grant in circumstances where section 483 of ITEPA applies.

3.Election

The Employee and the Company jointly elect that the entire liability of the
Employer to pay the Employer’s Liability that arises on any Relevant Employment
Income is hereby transferred to the Employee.  The Employee understands that by
accepting the RSUs (whether by clicking on the acceptance buttons as part of the
Company’s electronic acceptance procedure or by signing the Restricted Stock
Unit Award Agreement in hard copy), he or she will become personally liable for
the Employer’s Liability covered by this Election.  This Election is made in
accordance with paragraph 3B(1) of Schedule 1 to SSCBA.

4.Payment of the Employer’s Liability

4.1The Employee hereby authorises the Company and/or the Employer to collect the
Employer’s Liability in respect of any Relevant Employment Income from the
Employee at any time after the Taxable Event:

(i)by deduction from salary or any other payment payable to the Employee at any
time on or after the date of the Taxable Event; and/or

(ii)directly from the Employee by payment in cash or cleared funds; and/or

(iii)by arranging, on behalf of the Employee, for the sale of some of the
securities which the Employee is entitled to receive in respect of the RSUs;
and/or

(iv)by any other means specified in the Restricted Stock Unit Award Agreement.

 

 

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4.2The Company hereby reserves for itself and the Employer the right to withhold
the transfer of any securities in respect of the RSUs to the Employee until full
payment of the Employer’s Liability is received.

4.3The Company agrees to procure the remittance by the Employer of the
Employer’s Liability to HM Revenue and Customs on behalf of the Employee within
14 days after the end of the UK tax month during which the Taxable Event occurs
(or within 17 days after the end of the UK tax month during which the Taxable
Event occurs, if payments are made electronically).

5.Duration of Election

5.1The Employee and the Company agree to be bound by the terms of this Election
regardless of whether the Employee is transferred abroad or is not employed by
the Employer on the date on which the Employer’s Liability becomes due.

5.2This Election will continue in effect until the earliest of the following:

(i)the Employee and the Company agree in writing that it should cease to have
effect;

(ii)on the date the Company serves written notice on the Employee terminating
its effect;

(iii)on the date HM Revenue and Customs withdraws approval of this Election; or

(iv)after due payment of the Employer’s Liability in respect of the entirety of
the RSUs to which this Election relates or could relate, such that the Election
ceases to have effect in accordance with its terms.

Acceptance by the Employee

The Employee acknowledges that by accepting the RSUs (whether by clicking on the
acceptance buttons as part of the Company’s electronic acceptance procedure or
by signing the Restricted Stock Unit Award Agreement in hard copy), the Employee
agrees to be bound by the terms of this Election.

Acceptance by the Company

The Company acknowledges that, by arranging for the scanned signature of an
authorised representative to appear on this Election, the Company agrees to be
bound by the terms of this Election.

Signed for and on behalf of the Company

[insert signature and signatory details]

 

 

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SCHEDULE OF EMPLOYER COMPANIES

 

The following are employer companies to which this Joint Election may apply:

 

Cerence Limited

 

Registered Office:

79 Clerkenwell Rd, Farringdon, London EC1R 5AR, UK

Company Registration Number:

12000685

Corporation Tax Reference:

[insert]

PAYE Reference:

[insert]