Document:

Exhibit 10.5 Time Vesting Restricted Stock Agreement

(EXECUTION COPY)

TIME-VESTING RESTRICTED STOCK AGREEMENT
THIS AGREEMENT is made as of April 30, 2012 (the “Grant Date”), between Charter Communications, Inc., a Delaware corporation (the “Company”), and John Bickham (the “Participant”).
Unless otherwise defined herein, terms defined in the Charter Communications, Inc. 2009 Stock Incentive Plan (the “Plan”) shall have the same defined meanings in this Restricted Stock Agreement (the “Agreement”).
The undersigned Participant has been granted the number of shares of Restricted Stock (“Restricted Shares”) set forth below, subject to the terms and conditions of the Plan and this Agreement, as follows:
Vesting Schedule:        As provided in Section 3 of the Agreement
Number of Restricted Shares Granted:        100,000
Charter Communications, Inc.
/s/ Robert E Quicksilver
Robert E. Quicksilver, Executive Vice President and Chief Administrative Officer
I, the undersigned, agree to this grant of Restricted Shares, acknowledge that this grant is subject to the terms and conditions of the Plan and this Agreement, and have read and understand the terms and conditions set forth in Sections 1 through 22 of this Agreement.
/s/ John Bickham
Participant (John Bickham)

1.Incorporation By Reference; Plan Document Receipt.

This Agreement is subject in all respects to the terms and provisions of the Plan (including, without limitation, any amendments thereto permitted by Section 17.1 of the Plan (as of the date hereof) adopted at any time and from time to time unless such amendments are expressly intended not to apply to the Award provided hereunder), all of which terms and provisions are made a part of and incorporated in this Agreement as if they were each expressly set forth herein.  Any capitalized term not defined in this Agreement shall, unless set forth otherwise herein, have the same meaning as is ascribed thereto in the Plan.  The Participant hereby acknowledges receipt of a true copy of the Plan and that the Participant has read the Plan carefully and fully understands its content.  In the event of any conflict between the terms of this Agreement and the terms of the Plan, the terms of the Plan shall, unless set forth otherwise herein, control.

2.Grant of Restricted Shares.

The Company hereby grants to the Participant, as of the Grant Date specified above, the number of Restricted Shares specified above, which Restricted Shares shall be issued in the Participant's name as of the Grant Date provided that the Participant has executed the appropriate blank stock power attached hereto as Exhibit A, an escrow agreement and any other documents required by the Committee as a condition to the issuance of such Restricted Shares.  If the Participant does not execute such documents by the Grant Date, this Award of Restricted Shares shall be null and void.  The Restricted Shares issued hereunder shall be deposited together with the stock powers with the Company as escrow agent.  Upon delivery of the Restricted Shares to the Company as escrow agent, the Participant shall have all of the rights of a stockholder with respect to the Restricted Shares, including the right to vote the Restricted Shares and to receive all dividends or other distributions paid or made with respect to the Restricted Shares according to the terms and conditions of Section 4.  Upon vesting of any of the Restricted Shares, the Committee shall cause a stock certificate to be promptly delivered to the Participant with respect to such vested Restricted Shares, free of the restrictions set forth in Section 3. Notwithstanding the foregoing, the Committee may impose such additional restrictions as it may deem advisable, including, but not limited to, restrictions related to applicable federal securities laws, the requirements of any national securities exchange or system upon which Shares are then listed or traded, or any blue sky or state securities laws.  If any of the Restricted Shares are forfeited in accordance with the terms of this Agreement, such Restricted Shares shall be deemed no longer outstanding and Participant shall forfeit any and all rights thereto.  Except as otherwise provided by the Plan, the Participant agrees and understands that nothing contained in this Agreement provides, or is intended to provide, the Participant with any protection against potential future dilution of the Participant's interest in the Company for any reason, and no adjustments shall be made for dividends in cash or other property, distributions or other rights in respect of the Restricted Shares, except as otherwise specifically provided for in the Plan or this Agreement.
3.Vesting of Restricted Shares.

(a)Normal Vesting.  Unless otherwise provided in this Agreement or the Plan, the Restricted Shares granted hereunder shall, subject to the Participant's continued 

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employment with the Company or its Subsidiaries on each such vesting date (except as provided otherwise in Sections 3(b) and 3(c)), vest as to one-fourth of the total number of Restricted Shares (i.e., 25,000 Restricted Shares, and each such group of Restricted Shares, a “Tranche”) on each of the first four (4) anniversaries of the “Effective Date” as defined in the employment agreement by and between the Participant and the Company, dated and effective as of April 30, 2012(the “Employment Agreement”) (each such anniversary, an “Annual Vesting Date”).

(b)Certain Terminations.  Subject to Section 3(c) but otherwise notwithstanding anything to the contrary set forth in the Employment Agreement, the Plan or this Agreement, upon the termination of employment of the Participant: 

(i)following the Effective Date by the Company for Cause (as defined in the Employment Agreement), by the Participant without Good Reason (as defined in the Employment Agreement) other than as a result of Participant retiring from the Company at any time after the Effective Date (“Retirement”) or as a result of the Participant's death or Disability (as defined in the Employment Agreement), any unvested Restricted Shares shall be forfeited and returned to the Company; provided that, in the case of termination by the Participant without Good Reason other than as a result of Retirement prior to the Release Date (as defined below) and after the first anniversary of the Effective Date, 25,000 Restricted Shares shall remain outstanding and unvested until the Release Date and, in the absence of a Forfeiture Termination (as defined below), shall vest on the Release Date; or 

(ii)following the Effective Date by the Company without Cause, or by the Participant for Good Reason or as a result of Retirement, subject to Section 3(c): 

		
	(A)
	the unvested Tranche, if any, held by Participant that would, absent Participant's termination of employment, vest on the Annual Vesting Date immediately following the Date of Termination (as defined in the Employment Agreement) shall vest upon the Date of Termination in a prorated amount as to a number of Restricted Shares equal to 25,000 multiplied by a fraction, the numerator of which is the number of calendar days following the Annual Vesting Date immediately preceding the Date of Termination (or, in the case of the Tranche that would vest on the first Annual Vesting Date, the Grant Date) through the Date of Termination, and the denominator of which is 365; provided that if Participant's employment is terminated by the Company without Cause or by Participant for Good Reason in either case (x) upon or within thirty (30) calendar days before or twelve (12) months after a Change in Control, or (y) prior to a Change in Control at the request of a prospective purchaser whose proposed purchase would constitute a Change in Control upon its completion, all unvested Restricted Shares shall vest in full upon the Date of Termination; and

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	(B)
	any Restricted Shares that remain unvested after the application of clause (A) and Section 3(c) shall be forfeited and returned to the Company as of the Date of Termination.  

In the absence of affirmative action by the Company or the Participant to terminate the employment of the Participant, the expiration of the term of the Employment Agreement shall not constitute a termination of employment by the Company or by the Participant under this Section 3(b).   For purposes of this Agreement, “Change in Control” shall mean “Change of Control” as defined under the Employment Agreement.
(c)Forfeiture Resignation.  If, following the Effective Date, Participant Voluntarily (as defined in the Employment Agreement) resigns without Good Reason or as a result of Retirement and assumes a role as an employee at or consultant to Comcast, Time Warner Cable, Cablevision, Cox or any of their respective affiliates (or a company that is, at such time, a top-four (4) multi-system operator peer of the Company, and any affiliate of any such company) (each such company, a “Restricted Company”) at any time before the 18-month anniversary of the Effective Date (such resignation, a “Forfeiture Resignation”, and such 18-month anniversary, the “Release Date”), Participant shall forfeit any and all rights to all Restricted Shares, and all of the Restricted Shares  shall immediately be returned to the Company (the “Forfeiture Provision”).  In order to implement the foregoing, notwithstanding anything to the contrary set forth in this Agreement, the Employment Agreement or the Plan, any Restricted Shares which otherwise would have vested pursuant to Section 3(a) prior the Release Date shall become vested on the Release Date (and only if there has not been a Forfeiture Termination); provided that if the Participant's employment is terminated in accordance with Section 3(b)(ii) prior to the Release Date other than as a result of Retirement, any Restricted Shares which would have vested prior to such termination but for this Section 3(c), as well as any Restricted Shares which vest in accordance with Section 3(b)(ii), will become vested on the Termination Date.  The Forfeiture Provision shall expire upon a Change in Control that occurs prior to the Release Date, and any Restricted Shares which otherwise would have vested pursuant to Section 3(a) through the date of such Change in Control shall become vested on such date.

(d)Examples.  By way of example, the Participant is granted the Restricted Shares on April 30, 2012, and assume that the Effective Date is the same date.

(i)Termination or Retirement Example.  If Participant is terminated by the Company without Cause or resigns for Good Reason on October 30, 2013 (the Release Date), Participant will vest on the Date of Termination (i.e., October 30, 2013) in (A) the first Tranche (i.e., as to 25,000 Restricted Shares) which would have vested on April 30, 2013 but for Section 3(c), and (B) 50% of the 25,000 Restricted Shares subject to the second Tranche that were scheduled to vest on April 30, 2014 (i.e., 12,500 Restricted Shares) because Participant was employed for 50% of the vesting year April 30, 2013 - April 30, 2014.  The remaining unvested 50% of the 25,000 Restricted Shares subject to the second Tranche (i.e., 12,500 Restricted Shares) and all Restricted Shares subject to the third and fourth Tranches shall be forfeited and returned to the Company.

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(ii)Change in Control Example.  A Change in Control occurs on June 30, 2013.  If Participant is terminated by the Company without Cause or resigns for Good Reason on September 1, 2013, all Restricted Shares shall vest on the Date of Termination.

(iii)Forfeiture Resignation Example.  Participant Voluntarily resigns on May 1, 2013.  The first Tranche (i.e., as to 25,000 Restricted Shares) would have vested on April 30, 2013 but for Section 3(c), but did not vest because May 1, 2013 is prior to the Release Date (i.e., October 30, 2013).  On May 25, 2013, Participant is hired as the chief operating officer of a Restricted Company.  All of the Restricted Shares, including the first Tranche, are immediately forfeited in their entirety and returned to the Company due to the Forfeiture Provision.  (If, however, a Change in Control occurred on May 24, 2013 or Participant did not become an employee  of a Restricted Company so as to be a Forfeiture Resignation, the Forfeiture Provision would have expired and the first Tranche would have vested on May 24, 2013 in the Change in Control example and on October 30, 2013 in the example of a resignation without later employment with a Restricted Company.)

(e)Committee Discretion to Accelerate Vesting.  Notwithstanding the foregoing, the Committee may, in its sole discretion, provide for accelerated vesting of all or any  Restricted Shares at any time and for any reason.

4.Rights as Stockholder; Dividends and Other Distributions.  Participant shall have the right to vote the Restricted Shares and to receive any dividends declared or dividends or distributions paid on such Restricted Shares in accordance with the terms of this Section 4.  Payment to the Participant of dividends declared or paid by the Company on Restricted Shares shall be (a) deferred until vesting of such Restricted Shares and (b) held by the Company for the account of the Participant until such time.  In the event that dividends are to be deferred, such dividends shall be deposited with the Company and subject to the same restrictions on transferability and forfeitability as the Restricted Shares with respect to which they were paid .  Payment of deferred dividends in respect of Restricted Shares, together with interest accrued thereon, if any, shall be made upon the lapsing of restrictions imposed on the Restricted Shares in respect of which the deferred dividends are paid, and any dividends deferred in respect of any Restricted Shares shall be forfeited upon the forfeiture of such Restricted Shares. 

5.Effect of a Merger, Consolidation or Liquidation.

Subject to the terms of the Plan and this Agreement, in the event of (a) a liquidation or dissolution of the Company or (b) a merger or consolidation of the Company (a “Transaction”) that does not constitute a Change in Control, the Restricted Shares shall continue in effect in accordance with their respective terms, except that the Committee may, in its discretion, do one or more of the following: (i) accelerate the vesting schedule with respect to the Restricted Shares, (ii) arrange to have the surviving or successor entity assume the Restricted Shares or grant replacement Restricted Shares with appropriate adjustments in the number and kind of securities or other property subject to such Restricted Shares or adjustments so that the Restricted Shares or their replacements represent the right to receive the stock, securities or other property (including cash) as may be issuable or payable as a result of such Transaction with respect to or in exchange for the number of such Restricted Shares, or (iii) cancel the Restricted Shares upon the payment to the Participant in cash of an amount that is equal to the amount, if 

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any, of the aggregate Fair Market Value of the Restricted Shares or portion thereof surrendered at the effective time of the Transaction.  The treatment of any Restricted Shares as provided in this Section 5 shall be conclusively presumed to be appropriate for purposes of Section 14 of the Plan.
6.Non-Transferability.

The Participant's Restricted Shares may not be sold, assigned, transferred, encumbered, hypothecated or pledged by the Participant, whether by operation of law or otherwise, other than to the Company as a result of forfeiture of the Restricted Shares as provided herein, nor may the Restricted Shares in respect of which restrictions remain be made subject to execution, attachment or similar process, unless and until such Restricted Shares vest in accordance with the provisions hereof.
7.Governing Law.

All questions concerning the construction, validity and interpretation of this Agreement shall be governed by, and construed in accordance with, the laws of the State of Delaware, without regard to the choice of law principles thereof.
8.Withholding of Tax; Section 83(b) Election. 

8.1    The Company shall have the power and the right to deduct or withhold, or require the Participant to remit to the Company, an amount sufficient to satisfy any federal, state, local and foreign taxes of any kind (including, but not limited to, the Participant's FICA and SDI obligations) which the Company, in its sole discretion, deems necessary to be withheld or remitted to comply with the Code and/or any other applicable law, rule or regulation with respect to the Restricted Shares.  Any statutorily required withholding obligation with regard to the Participant may be satisfied by reducing the amount of cash or Restricted Shares otherwise delivered to the Participant hereunder.

8.2    Under Section 83 of the Code, the difference between the purchase price, if any, paid for the Restricted Shares and their fair market value on the date the restrictions applicable to such Restricted Shares lapse (if greater) will be reportable as ordinary income at that time.  The Participant may elect to be taxed at the time the Restricted Shares are acquired rather than when such Restricted Shares cease to be subject to such restrictions by filing an election under Section 83(b) of the Code with the Internal Revenue Service within thirty (30) days after the Grant Date.  If the Participant makes such an election, (i) the Participant will have to make a tax payment to the extent the purchase price is less than the fair market value of the Restricted Shares on the Grant Date, and (ii) no tax payment will have to be made to the extent the purchase price is at least equal to the fair market value of the Restricted Shares on the Grant Date.  If the Participant chooses not to make this filing within the thirty (30)-day period, the Participant will recognize ordinary income as the Restricted Shares become vested, based on their fair market value at that time.

9.Legend.  All certificates representing the Restricted Shares shall, where applicable, have endorsed thereon the following legends:

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“THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO VESTING CONDITIONS AND CERTAIN RESTRICTIONS ON TRANSFER, SALE AND HYPOTHECATION AND CERTAIN REPURCHASE RIGHTS.  A COMPLETE STATEMENT OF THE TERMS AND CONDITIONS GOVERNING SUCH RESTRICTIONS IS SET FORTH IN THE CHARTER COMMUNICATIONS, INC. 2009 STOCK INCENTIVE PLAN AND IN A RESTRICTED STOCK AWARD AGREEMENT BETWEEN THE COMPANY AND THE REGISTERED HOLDER OR HIS OR HER PREDECESSOR IN INTEREST.  COPIES OF THE PLAN AND AWARD AGREEMENT ARE ON FILE AT THE COMPANY'S PRINCIPAL OFFICE AND WILL BE FURNISHED UPON WRITTEN REQUEST TO THE SECRETARY OF THE COMPANY BY THE HOLDER OF RECORD OF THE SHARES REPRESENTED BY THIS CERTIFICATE.”
10.Securities Representations.

This Agreement is being entered into by the Company in reliance upon the following express representations and warranties of the Participant.  The Participant hereby acknowledges, represents and warrants that:
10.1    The Participant has been advised that the Participant may be an “affiliate” within the meaning of Rule 144 under the Securities Act and in this connection the Company is relying in part on the Participant's representations set forth in this Section 10.

10.2    If the Participant is deemed an affiliate within the meaning of Rule 144 of the Securities Act, the Shares issued hereunder must be held indefinitely unless an exemption from any applicable resale restrictions is available or the Company files an additional registration statement (or a “re-offer prospectus”) with regard to such Shares and the Company is under no obligation to register such Shares (or to file a “re-offer prospectus”).

10.3    If the Participant is deemed an affiliate within the meaning of Rule 144 of the Securities Act, the Participant understands that (i) the exemption from registration under Rule 144 will not be available unless (A) a public trading market then exists for the Shares, (B) adequate information concerning the Company is then available to the public, and (C) other terms and conditions of Rule 144 or any exemption therefrom are complied with, and (ii) any sale of the Shares issuable hereunder may be made only in limited amounts in accordance with the terms and conditions of Rule 144 or any exemption therefrom.

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11.Entire Agreement; Amendment.  This Agreement, together with the Plan, contains the entire agreement between the parties hereto with respect to the subject matter contained herein, and, except as otherwise specifically provided herein, supersedes all prior agreements or prior understandings, whether written or oral, between the parties relating to such subject matter.  For the avoidance of doubt, the Participant acknowledges and agrees that, notwithstanding anything to the contrary set forth in any employment agreement between the Participant and the Company, the vesting of the Restricted Shares, including, without limitation, upon a termination of the Participant's employment and upon a Change in Control, shall be governed by the terms of this Agreement.  This Agreement may be modified, amended, suspended or terminated by the Committee in its discretion at any time, and any terms or conditions may be waived by the Committee in its discretion at any time; provided, however, that all such modifications, amendments, suspensions, terminations or waivers that shall adversely effect an Participant shall only be effective pursuant to a written instrument executed by the parties hereto.

12.Notices.

Any notice hereunder by the Participant shall be given to the Company in writing and such notice shall be deemed duly given only upon receipt thereof by the General Counsel of the Company.  Any notice hereunder by the Company shall be given to the Participant in writing and such notice shall be deemed duly given only upon receipt thereof at such address as the Participant may have on file with the Company.
13.No Right to Employment.

Any questions as to whether and when there has been a termination of employment and the cause of such termination of employment shall be determined in the sole discretion of the Committee.  Nothing in this Agreement shall interfere with or limit in any way the right of the Company, its Subsidiaries or its Affiliates to terminate the Participant's employment or service at any time, for any reason and with or without Cause.
14.Transfer of Personal Data.

The Participant authorizes, agrees and unambiguously consents to the transmission by the Company (or any Subsidiary) of any personal data information related to the Restricted Shares awarded under this Agreement for legitimate business purposes (including, without limitation, the administration of the Plan).  This authorization and consent is freely given by the Participant.
15.Compliance with Laws.

The issuance of Restricted Shares hereunder shall be subject to, and shall comply with, any applicable requirements of any foreign and U.S. federal and state securities laws, rules and regulations (including, without limitation, the provisions of the Securities Act, the Exchange Act and in each case any respective rules and regulations promulgated thereunder) and any other law, rule regulation or exchange requirement applicable thereto.  The Company shall not be obligated to issue the Restricted Shares pursuant to this Agreement if any such issuance would violate any such requirements.  As a condition to the issuance of the Restricted Shares, the 

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Company may require the Participant to satisfy any qualifications that may be necessary or appropriate to evidence compliance with any applicable law or regulation.
16.Binding Agreement; Assignment.

This Agreement shall inure to the benefit of, be binding upon, and be enforceable by the Company and its successors and assigns.  The Participant shall not assign (except in accordance with Section 6 hereof) any part of this Agreement without the prior express written consent of the Company.
17.Headings.

The titles and headings of the various sections of this Agreement have been inserted for convenience of reference only and shall not be deemed to be a part of this Agreement.
18.Counterparts.

This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original, but all of which shall constitute one and the same instrument.
19.Further Assurances.

Each party hereto shall do and perform (or shall cause to be done and performed) all such further acts and shall execute and deliver all such other agreements, certificates, instruments and documents as either party hereto reasonably may request in order to carry out the intent and accomplish the purposes of this Agreement and the Plan and the consummation of the transactions contemplated thereunder.
20.Severability.

The invalidity or unenforceability of any provisions of this Agreement in any jurisdiction shall not affect the validity, legality or enforceability of the remainder of this Agreement in such jurisdiction or the validity, legality or enforceability of any provision of this Agreement in any other jurisdiction, it being intended that all rights and obligations of the parties hereunder shall be enforceable to the fullest extent permitted by law.
21.Acquired Rights.

The Participant acknowledges and agrees that: (a) the Company may terminate or amend the Plan at any time; (b) the Award of Restricted Shares made under this Agreement is completely independent of any other award or grant and is made at the sole discretion of the Company; (c) no past grants or awards (including, without limitation, the Restricted Shares awarded hereunder) give the Participant any right to any grants or awards in the future whatsoever; and (d) any benefits granted under this Agreement are not part of the Participant's ordinary salary, and shall not be considered as part of such salary in the event of severance, redundancy or resignation.

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22.Company Recoupment.

The Participant's right to the Restricted Shares granted hereunder shall in all events be subject to any right or obligation that the Company may have regarding the clawback of “incentive-based compensation” under Section 10D of the Exchange Act and any applicable rules and regulations promulgated thereunder from time to time by the U.S. Securities and Exchange Commission.

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EXHIBIT A
STOCK POWER
For value received, I hereby sell, assign and transfer unto Charter Communications, Inc., a Delaware corporation (the “Company”), 100,000 shares of common stock of the Company standing in my name on the books of said Company represented by Certificate(s) Number(s) ___________________ herewith, and do hereby irrevocably constitute and appoint _________________________ attorney to transfer the said shares of common stock on the books of said Company with full power of substitute in the premises.

Date: _______________________________
Printed Name: ________________________
Signature: ___________________________
Witness Signature: _____________________

11EXHIBIT 10.1

 

EMPLOYMENT AGREEMENT

 

THIS EMPLOYMENT AGREEMENT (this “Agreement”), effective as of April 26, 2012 (the “Effective Date”), is between Array BioPharma Inc., a Delaware corporation (the “Company”), and Ron Squarer (“Employee”).

 

In consideration of the mutual covenants and agreements contained herein, intending to be legally bound, the parties hereto agree as follows:

 

1.           Employment.  The Company hereby employs Employee and Employee hereby agrees to be employed by the Company for the period and upon the terms and conditions hereinafter set forth.

 

2.           Capacity and Duties.  Employee shall be employed by the Company as Chief Executive Officer.  The Company shall appoint Employee to the Board of Directors; continued Board of Directors service shall be subject to shareholder approval.  Employee shall perform the duties and bear the responsibilities commensurate with his position and shall serve the Company faithfully and to the best of his ability, under the direction of the Board of Directors.  Employee shall devote his entire working time, attention and energies to the business of the Company.  Employee shall not engage in any other business activity or activities that conflict with the proper performance of Employee’s duties hereunder.  In general, personal investments in which Employee owns less than 5% of the outstanding capital of a particular enterprise and that do not involve any significant services by Employee shall not be deemed to conflict with the proper performance of Employee’s duties.  Employee shall be permitted to serve on a maximum of three outside boards of directors, subject to the reasonable prior approval of the Company’s Compensation Committee.

 

3.           Compensation.  In consideration for services rendered by Employee, Employee shall be entitled to the payments and benefits contemplated by this Section 3.  Subject to the express provisions contained in this Agreement and the Board’s fiduciary duties, the intent of the parties hereto is that Employee’s annual compensation be consistent with the mean/median of the Company’s peer companies (it being agreed that should there be any conflict between this sentence and the express language contained in this Agreement, the express language in this Agreement shall control).

 

(a)        For all services rendered by Employee the Company shall pay Employee during the term of this Agreement an annual salary as set forth herein, payable semimonthly in arrears.  Employee’s initial annual salary shall be $525,000.  During the term of this Agreement, the amount of Employee’s salary shall be reviewed at periodic intervals and, upon agreement of the parties hereto, appropriate adjustments in such salary may be made on an annual or more frequent basis, as determined by, and at the discretion of the Board of Directors.

 

(b)        Employee shall also be eligible for a performance bonus for each fiscal year beginning in fiscal year 2012, or portion thereof, that Employee is employed by the Company (the “Performance Bonus”).  The Performance Bonus shall be based on Employee’s base salary and the achievement of performance criteria to be established by the Board of Directors under a Management Bonus Plan (the “Management Bonus Plan”), which, in consultation with Employee, the Compensation Committee shall develop and recommend to the Board of Directors of the Company for each fiscal year and which shall apply to Employee and other members of the Company’s senior management. The performance criteria under the Management Bonus Plan shall include such items as performance of the Company compared to its fiscal year plan and budget; new business and customer development by the Company; and operational efficiency of the Company.  It shall be a condition to Employee’s receipt of a Performance Bonus with respect to any given fiscal year that Employee achieves certain minimum performance criteria to be established under the Management Bonus Plan.  It is anticipated that the Performance Bonus for any particular fiscal year will range between 25% and 75%, with a target of 50%, of Employee’s base salary; provided that the minimum performance criteria are achieved.  The 

 

 

Performance Bonus may be paid in cash or in equity, at the discretion of the Board of Directors.  The Performance Bonus shall be payable to Employee upon achievement of the minimum performance criteria and not later than the earlier of 60 days following receipt by the Board of Directors of the Company’s audited financial statements for that fiscal year or March 15 following the end of the applicable fiscal year.

 

(c)        Employee shall receive an award of options to purchase 1,000,000 shares of the Company’s common stock (the “Options”) within 30 days of the Effective Date of this Agreement.  The Options will be incentive stock options under Section 422 of the Internal Revenue Code (the “Code”) to the extent permitted under Section 422(d) of the Code.  The Options shall be governed by an option agreement (the “Option Agreement”) and the Company’s Amended and Restated Stock Option and Incentive Plan (the “Stock Option Plan”).  The Option Agreement shall provide that the Options shall become exercisable upon vesting, and shall vest in tranches of 250,000 shares each at the completion of each year of the term of this Agreement.  The exercise price of the Options shall be the fair market value of the Company’s common stock on the date of grant.  In the event of termination of employment, Employee’s exercise of the Options, and any termination of the Options, shall be governed by the Option Agreement and the Stock Option Plan.

 

(d)        Company shall pay to Employee $100,000 within 45 days after the Effective Date.  If, before the first anniversary of the Effective Date, this Agreement is terminated by Employee pursuant to the first sentence of Section 5(d) or by Company pursuant to Section 5(c), such the amount paid under this Section 3(d) shall be immediately repayable to Company.

 

(e)        In addition to salary payments as provided in Section 3(a), the Company shall provide Employee, during the term of this Agreement, with the benefits of such medical insurance plans, hospitalization plans and other employee fringe benefit plans as shall be generally provided to employees of the Company and for which Employee may be eligible under the terms and conditions thereof.  Nothing herein contained shall require the Company to adopt or maintain any such employee benefit plans.

 

(f)         During the term of this Agreement, except as otherwise provided in Section 5(b), Employee shall be entitled to sick leave and annual vacation consistent with the Company’s customary sick leave and vacation policies; provided, however, that, subject to Employee’s vacation not unreasonably interfering with duties hereunder, Employee’s vacation shall be no less than four weeks per calendar year.

 

(g)        During the term of this Agreement the Company shall reimburse Employee for all reasonable out-of-pocket expenses incurred by Employee in connection with the business of the Company and in the performance of his duties under this Agreement upon presentation to the Company of an itemized accounting of such expenses with reasonable supporting data.  The Company shall reimburse Employee’s and his family’s expenses in moving from Highland Park, Illinois to the Boulder, Colorado metropolitan area (“Boulder”), which expenses shall include, without limiting the last sentence of this Section 3(g) (i) moving costs for Employee’s and Employee’s immediate family’s personal property from Employee’s principal residence in Highland Park to Employee’s new principal residence in Boulder, (ii) closing costs (including, without limitation, realtor fees and commissions, title fees and other transaction fees and expenses) associated with the sale of Employee’s current residence in Highland Park and the purchase of a primary residence in Boulder, and (iii) until Employee’s family is resident in Boulder or September 15, 2012, whichever is earlier, travel costs between Boulder and Illinois for commuting and househunting, and (iv) until Employee establishes a principal residence in Boulder, transportation and temporary housing (for the avoidance of doubt, this item (iv) shall not limit the family temporary housing/relocation benefits contained in the standard relocation policy anticipated to be used after Employee’s family moves to Colorado).  Such expenses shall be paid upon presentation to the Company of an itemized accounting of such expenses with reasonable supporting data.  In addition to the benefits contemplated above in this Section 3(g), Company shall assist with such move in accordance with Company’s standard relocation policy in existence as of the effective date of this Agreement.  The payments contemplated by items (i), (ii) and (iv) of the second sentence of this Section 3(g), on the one 

 

 

hand, and the benefits pursuant to the Company’s standard relocation policy, on the other hand, shall be available to Employee through April 30, 2014.

 

4.           Term.  Unless sooner terminated in accordance with Section 5, the initial term of this Agreement shall be for four years from the Effective Date hereof, and thereafter shall continue for one year terms from year to year unless and until either party shall give notice to the other at least 60 days prior to the end of the initial or then current renewal term of his or its intention to terminate at the end of such term.  The provisions of Sections 5 through and including 18 shall remain in full force and effect notwithstanding the termination of this Agreement.

 

5.           Termination and Severance.

 

(a)           If Employee dies during the term of this Agreement, the Company shall pay his estate the compensation that would otherwise be payable to him for the month in which his death occurs; (ii) this Agreement shall be considered terminated on the last day of such month; and (iii) the Company shall cause any issued but unvested equity awards granted to Employee to immediately vest.

 

(b)           If during the term of this Agreement Employee is prevented from performing his duties, after reasonable accommodation, by reason of illness or incapacity for a continuous period of 120 days, the Company may terminate this Agreement upon 30 days’ prior notice thereof to Employee or his duly appointed legal representative.  For the purposes of this Section 5(b), a period of illness or incapacity shall be deemed “continuous” notwithstanding Employee’s performance of his duties during such period for continuous periods of less than 15 days in duration.  The reference to the term “duties” in the first sentence of this Section 5(b) shall not include immaterial duties that have little impact on the Company; provided, however, that the determination of what is immaterial shall be in the reasonable discretion of the Company.

 

(c)           The Company may terminate this Agreement at any time, upon 10 days’ prior notice, for Employee’s (i) gross negligence in the performance of his duties, upon notice of same from Company and failure to cure within 30 days; (ii) intentional misconduct, including but not limited to, commission of any felony, or of any misdemeanor involving dishonesty or moral turpitude, or violation of any state or federal law in the course of his employment; or theft or intentional misuse of the Company’s property or time (other than immaterial misuse such as use of supplies such as staplers or paper for personal use); or (iii) material breach of any obligation created by this Agreement (including the Noncompete Agreement and Confidentiality and Inventions Agreement incorporated by reference in Sections 6 and 7 below), upon notice of same from Company and failure to cure within 30 days.  The reference to the term “duties” in the first sentence of (c)(i) above shall not include immaterial duties that have little impact on the Company; provided, however, that the determination of what is immaterial shall be in the reasonable discretion of the Company.  In addition, the reference to “misconduct” in item (c)(ii) and “violations” of any state or federal law in (c)(ii) above shall not include immaterial acts and conduct, on the one hand, or immaterial violations, on the other hand (such as traffic violations), that have little impact on the Company; provided, however, that the determination of what is immaterial shall be in the reasonable discretion of the Company.

 

(d)           The Company or Employee may terminate this Agreement at any time for any or no reason upon at least 30 days’ notice to the other.  In the event that any one or more of the following in (i) through (v) occur: (i) Employee is removed from his position as Chief Executive Officer of the Company, or his duties as Chief Executive Officer are materially diminished (including, without limitation, a diminution in Employee’s authority, duties,  responsibilities or CEO title), (ii) Employee is not elected to serve as a member of the Board of Directors during the term of this Agreement, (iii) a material diminution of Employee’s base salary, (iv) a change in the geographic location of Employee’s primary place of employment of greater than fifty (50) miles, (v) the Company materially breaches any of its obligations to Employee pursuant to this Agreement and such breach is not cured within thirty days of notice (including, without limitation, a failure to issue the securities contemplated by Section 3(c) above), Employee may 

 

 

elect to treat any such event, by notice of termination within 30 days of its occurrence, as a termination by the Company pursuant to this Section 5(d).

 

(e)        If this Agreement is terminated by the Company (or deemed to be terminated by the Company) pursuant to Section 5(b) or 5(d), then, on the later of: (1) the date that is sixty (60) days following Employee’s termination; or, if applicable, (2) the first date such amount may be paid to Employee in order to comply with the requirements of Treas. Reg. § 1.409A-3(i)(2) (or any successor provision) issued under Section 409A of the Code (“Section 409A”), the Company shall: (i)  pay as severance to Employee one year’s current base salary (provided that a termination by the Company pursuant to Section 5(d) resulting from a Change of Control defined in Section 5(f) shall cause the severance payment to be increased to two years’ current base salary) in a lump sum  subject to all applicable deductions and withholdings; (ii) pay to Employee an amount equal to the target Performance Bonus for the year of termination (provided that a termination by the Company pursuant to Section 5(d) resulting from a Change of Control defined in Section 5(f) shall cause the payment contemplated by this (ii) to be increased to such target Performance Bonus multiplied by two); and (iii) pay to Employee a lump sum amount, which after the application of all deductions and withholdings, equals the total cost  for continuation of the health insurance benefits for Employee and, if applicable, his eligible dependents under COBRA at substantially the same level of coverage in effect immediately preceding such termination for 12 months following the last day of the month in which the termination occurs.  Employee’s unvested equity scheduled to vest in the year of termination shall be deemed vested in connection with a termination by Company pursuant to Section 5(d); provided, however, that this sentence shall not diminish the 100% vesting contemplated by 5(f) below in connection with a Change of Control.  As a condition to receiving any severance payments under this Section, Employee shall execute a release reasonably acceptable to the Company and Employee, and shall comply with his obligations under the Noncompete Agreement and Confidentiality and Inventions Agreement incorporated by reference in Sections 6 and 7 of this Agreement (it being agreed that the Noncompete Agreement shall not be applicable should Employee waive rights to such severance benefits).  A failure of the Company to renew this Agreement at the end of the initial term or any renewal period shall be treated as a termination by the Company pursuant to Section 5(d) resulting in the above benefits contemplated by this Section 5(e).  For the avoidance of doubt, Employee’s rights to the payments contemplated in this Section 5(e) shall not be diminished solely as a result of Employee taking subsequent employment.

 

(f)         For purposes of this Agreement, the term “Change of Control” shall mean either (i) the occurrence of a consolidation or merger involving the Company in which the Company is not the surviving entity or any transaction in which more than 50% of the Company’s voting power is transferred or more than 50% of either the fair market value or book value of the Company’s assets are sold or (ii) a majority of members of the Board of directors are replaced during any 12-month period by directors whose appointment or election is not endorsed by a majority of the members of the Board before the date of the appointment or election.  Upon the occurrence of Change of Control, the vesting of 100% of outstanding and unvested equity awards granted to Employee as of the date of such event shall be accelerated to occur immediately upon such event.  For purposes of this Agreement (including Sections 5(d) and 5(e)), a termination shall be deemed to be “in relation to” or the “result of” a Change of Control if, without limiting the generality of such phrases, the Company terminates or is deemed to have terminated Employee pursuant to Section 5(d) of this Agreement during the period commencing three months prior to the occurrence (or expected occurrence) of a Change of Control and ending 12 months after the occurrence of a Change of Control.

 

(g)        If Employee gives notice of termination pursuant to Section 5(d), the Company may, at its option, terminate Employee immediately upon payment to Employee of 30 days salary or salary for the remainder of the notice period, whichever is less, subject to all applicable deductions and withholdings.  A termination initiated by Employee pursuant to the first sentence of Section 5(d) (but not the second sentence) shall cause no acceleration of vesting of equity awards, shall cause Employee to forfeit his eligibility for a Performance Bonus for that fiscal year, and shall create no severance obligation under Section 5(e).

 

 

6.           Confidential Information.  This Agreement incorporates by reference all the terms of that certain Confidentiality and Inventions Agreement between Employee and the Company, as if fully set forth herein.

 

7.           Covenants Not to Compete or Interfere.  This Agreement incorporates all the terms of that certain Noncompete Agreement between Employee and the Company, as if fully set forth herein.  The parties hereby acknowledge that any severance payments made under Section 5 of this Agreement shall be consideration for Employee’s covenant not to compete with the Company (which shall be applicable only in connection with a termination of this Agreement by the Company under Sections 5(b) or 5(d) of this Agreement and provided payments are made to Employee pursuant to Section 5(e) of this Agreement).

 

8.           Compliance with Section 409A. It is intended that the provisions of this Agreement comply with Section 409A to the extent that the requirements of Section 409A are applicable thereto, and after application of all available exemptions, including but not limited to, the “short-term deferral rule” and “involuntary separation pay plan exception” and the provisions of this Agreement shall be construed in a manner consistent with that intention.  To the extent Employee would be subject to an additional tax imposed on certain deferred compensation arrangements under Section 409A, as amended, and the regulations thereunder, as a result of any provision of this Agreement, such provision shall be deemed amended to the minimum extent necessary to avoid application of such tax and the parties shall promptly execute any amendment reasonably necessary to implement this Section 8.

 

Notwithstanding anything herein to the contrary, the payment (or commencement of a series of payments) hereunder of any nonqualified deferred compensation (within the meaning of Section 409A) payable in connection with a “termination” shall not commence until Employee has undergone a “separation from service” as defined in Treas. Reg. 1.409A-1(h).

 

With regard to any provision herein that provides for reimbursement of costs and expenses or in-kind benefits, except as permitted by Section 409A, (i) the right to reimbursement or in-kind benefits shall not be subject to liquidation or exchange for another benefit, (ii) the amount of expenses eligible for reimbursement, or in-kind benefits, provided during any taxable year shall not affect the expenses eligible for reimbursement, or in-kind benefits to be provided, in any other taxable year, provided that the foregoing clause (ii) shall not be violated with regard to expenses reimbursed under any arrangement covered by Section 105(b) of the Internal Revenue Code solely because such expenses are subject to a limit related to the period the arrangement is in effect and (iii) such payments shall be made on or before the last day of Employee’s taxable year following the taxable year in which the expense was incurred.

 

For purposes of applying the provisions of Section 409A to this Agreement, each separately identified amount to which Employee is entitled under this Agreement shall be treated as a separate payment within the meaning of Section 409A.

 

9.           Excise Tax Restoration Payment. In the event that it is determined that any payment or distribution of any type to or for the benefit of Employee made by the Company, by any of its affiliates, by any person who acquires ownership or effective control or ownership of a substantial portion of the Company’s assets (within the meaning of Section 280G of the Code) or by any affiliate of such person, whether paid or payable or distributed or distributable pursuant to the terms of an employment agreement or otherwise (the “Total Payments”), would be subject to the excise tax imposed by Section 4999 of the Code or any interest or penalties with respect to such excise tax (such excise tax, together with any such interest or penalties, are collectively referred to as the “Excise Tax”), then the Company shall pay to Employee an additional payment (an “Excise Tax Restoration Payment”) in an amount that shall fund the payment by Employee of any Excise Tax on the Total Payments as well as all income taxes imposed on the Excise Tax Restoration Payment, any Excise Tax imposed on the Excise Tax Restoration Payment and any interest or penalties imposed with respect to taxes on the Excise Tax Restoration or any Excise Tax.  The Excise Tax Restoration Payment will be paid to Employee as soon as practicable following the date that the Employee remits all applicable taxes, interest and penalties associated with the Total 

 

 

Payments and the Excise Tax Restoration Payment to the appropriate taxing authority or authorities, but in no event later than the last day of the year in which such remittance(s) is made.

 

10.         Waiver of Breach.  A waiver by the Company of a breach of any provision of this Agreement by Employee shall not operate or be construed as a waiver of any subsequent breach by Employee.

 

11.         Severability.  It is the desire and intent of the parties that the provisions of this Agreement shall be enforced to the fullest extent permissible under the laws and public policies applied in each jurisdiction in which enforcement is sought.  Accordingly, if any particular provision or portion of this Agreement shall be adjudicated to be invalid or unenforceable, this Agreement shall be deemed amended to delete therefrom the portion thus adjudicated to be invalid or unenforceable, such deletion to apply only with respect to the operation of this Section 11 in the particular jurisdiction in which such adjudication is made.

 

12.         Notices.  All communications, requests, consents and other notices provided for in this Agreement shall be in writing and shall be deemed given if mailed by first class mail, postage prepaid, addressed as follows:  (i) If to the Company: to its principal office at 3200 Walnut Street, Boulder, Colorado 80301;  (ii) If to Employee: to such address as Employee shall designate in writing to the Company; or such other address as either party may hereafter designate by notice as herein provided.  Notwithstanding the foregoing provisions of this Section 12, so long as Employee is employed by the Company any such communication, request, consent or other notice shall be deemed given if delivered as follows:  (x) If to the Company, by hand delivery to any executive officer of the Company other than Employee, and (y) If to Employee, by hand delivery to him.

 

13.         Governing Law.  This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of Colorado without regard to choice of law provisions thereof, and the parties each agree to exclusive jurisdiction in the state and federal courts in Colorado.

 

14.         Assignment.  The Company may assign its rights and obligations under this Agreement to any affiliate of the Company or to any acquirer of substantially all of the business of the Company, and all covenants and agreements hereunder shall inure to the benefit of and be enforceable by or against any such assignee.  Neither this Agreement nor any rights or duties hereunder may be assigned or delegated by Employee.

 

15.         Entire Agreement.  This Agreement sets forth the entire agreement and understanding of the parties and supersedes all prior understandings, agreements or representations by or between the parties, whether written or oral, which relate in any way to the subject matter hereof.

 

16.         Amendments.  No provision of this Agreement shall be altered, amended, revoked or waived except by an instrument in writing signed by the party sought to be charged with such amendment, revocation or waiver.

 

17.         Binding Effect.  Except as otherwise provided herein, this Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective legal representatives, heirs, successors and assigns.

 

***Signature Page Follows***

 

 

IN WITNESS WHEREOF the parties have executed this Agreement this 26th day of April 2012 effective as of the Effective Date hereof.

 

	
 
    	
COMPANY:
    
	
 
    	
 
    	
 
    
	
 
    	
ARRAY BIOPHARMA INC.
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Kyle Lefkoff
    
	
 
    	
Name:
    	
Kyle Lefkoff
    
	
 
    	
Title:
    	
Chairman, Board of Directors
    
	
 
    	
 
    	
 
    
	
 
    	
EMPLOYEE:
    
	
 
    	
 
    	
 
    
	
 
    	
/s/ Ron Squarer
    
	
 
    	
RON SQUARER

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