Document:

mpwr20160330_10q.htm

Exhibit 10.1

Monolithic Power Systems, Inc.
Performance Stock Unit Grant Notice
2014 Equity Incentive Plan

 

Monolithic Power Systems, Inc. (the “Company”) hereby awards to Participant the number of Performance Stock Units (“PSUs”) set forth below (the “Award”). The Award is subject to all of the terms and conditions as set forth in this Performance Stock Unit Grant Notice (the “Notice”), the 2014 Equity Incentive Plan (the “Plan”) and the Performance Stock Unit Agreement (the “Award Agreement”), both of which are attached hereto and incorporated in their entirety. Capitalized terms not explicitly defined in this Notice but defined in the Plan or the Award Agreement will have the same definitions as in the Plan or the Award Agreement. In the event of any conflict between the terms of the Award and the Plan, the terms of the Plan will control.

 

Participant:          

Date of Grant:

Vesting Commencement Date:

Purchase Price per Share: 

Number of PSUs:

 

	
Vesting Schedule: 
	
The Award has two vesting components. The performance vesting component is set forth on Exhibit A. The time-based vesting component is as follows: the Award vests as to [fraction] of the PSUs (rounded down to the nearest whole PSU) 12 months after the Vesting Commencement Date, with the balance vesting as to [fraction] of the PSUs (rounded down to the nearest whole PSU) every [# months] thereafter, subject to Participant’s Continuous Service with the Company through each such vesting date. Each installment of PSUs that vests hereunder is a “separate payment” for purposes of Treasury Regulations Section 1.409A-2(b)(2). 

 

	
Issuance Schedule:
	
Subject to any change on a Capitalization Adjustment and Participant’s payment of the Purchase Price per Share within two months following the applicable vesting date, one share of Common Stock will be issued for each PSU that vests at the time set forth in the Award Agreement. If Participant does not pay the Purchase Price per Share for the vested PSU within two months after the vesting date, Participant’s rights to those vested PSUs, and the underlying shares of Common Stock and related Dividend Equivalents, will be forfeited on the two month anniversary of such vesting date. 

 

Additional Terms/Acknowledgements: Participant acknowledges receipt of, and understands and agrees to, this Notice, the Award Agreement, the Plan and the prospectus for the Plan. As of the Date of Grant, this Notice, the Award Agreement and the Plan set forth the entire understanding between Participant and the Company regarding the Award and supersede all prior oral and written agreements on the terms of the Award, with the exception, if applicable, of (i) the written employment agreement or offer letter agreement entered into between the Company and Participant specifying the terms that should govern this specific Award, or, if applicable instead, the severance benefit plan then in effect and applicable to Participant and (ii) any compensation recovery policy that is adopted by the Company or is otherwise required by applicable law. By accepting this Award, Participant consents to receive Plan documents by electronic delivery and to participate in the Plan through an on-line or electronic system established and maintained by the Company or another third party designated by the Company.

 

	
Monolithic Power Systems, Inc.
	
 
	
Participant:

	
 
	
 
	
 
	
 
	
 

	
By:
	
 
	
 
	
 

	
 
	
Signature
	
 
	
 
	
Signature

	
 
	
 
	
 
	
 
	
 

	
Title:
	
 
	
 
	
Date:
	
 

	
 
	
 
	
 
	
 
	
 

	
Date:
	
 
	
 
	
 
	
 

 

	
Also Provided: 
	
Award Agreement, 2014 Equity Incentive Plan, Prospectus

  

 

 

 

 

Monolithic Power Systems, Inc.

2014 Equity Incentive Plan

 

Performance Stock Unit Agreement

 

Monolithic Power Systems, Inc. (the “Company”) has awarded you a Performance Stock Unit Award (the “Award”) that is subject to its 2014 Equity Incentive Plan (the “Plan”), the Performance Stock Unit Grant Notice (the “Grant Notice”) and this Performance Stock Unit Agreement (the “Agreement”), for the number of Performance Stock Units indicated in the Grant Notice. Capitalized terms not explicitly defined in this Agreement or in the Grant Notice but defined in the Plan will have the same definitions as in the Plan. In the event of any conflict between the terms in this Agreement and the Plan, the terms of the Plan will control. 

 

1.     Grant of the Award. The Award represents your right to be issued on a future date one share of Common Stock for each Performance Stock Unit that vests, provided that you pay the Purchase Price per Share for each vested Performance Stock Unit within two months after the applicable vesting date. If you do not pay the Purchase Price per Share for the vested Performance Stock Unit within two months after the applicable vesting date, your rights to that vested Performance Stock Unit, and the underlying share of Common Stock and the compensation payable in respect of the related Dividend Equivalents, will be forfeited on the two month anniversary of the vesting date at no cost to the Company, and you will have no further right to receive the shares of Common Stock or the payments in respect of Dividend Equivalents. 

 

2.     Vesting. Your Performance Stock Units will vest as provided in the Grant Notice. Vesting will cease on the termination of your Continuous Service. Any Performance Stock Units that have not yet vested will be forfeited on the termination of your Continuous Service. 

 

3.     Adjustments to Number of PSUs & Shares of Common Stock. 

 

(a)     The Performance Stock Units subject to your Award will be adjusted for Capitalization Adjustments, as provided in the Plan.

 

(b)     Any additional Performance Stock Units and any shares, cash or other property (including Dividend Equivalents) that become subject to the Award will be subject, in a manner determined by the Board, to the terms of the Award, including the same forfeiture restrictions, restrictions on transferability, and time and manner of delivery as applicable to the other Performance Stock Units and shares covered by your Award.

 

(c)     You have no rights to be issued any fractional share of Common Stock or cash in lieu of such fractional share under this Award. Any fraction of a share will be rounded down to the nearest whole share.

  

 

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(d)     Each Performance Stock Unit has associated with it one Dividend Equivalents. If and when a Performance Stock Unit vests, the cash payable under this Dividend Equivalent award will become vested. Provided you pay the Purchase Price per Share within two months after the applicable vesting date for the Performance Stock Units, payment will be made shortly after vesting, and, in all cases, no later than the date that is the 15th day of the third calendar month of the applicable year following the year in which the Dividend Equivalent is no longer subject to a “substantial risk of forfeiture” within the meaning of Treasury Regulations Section 1.409A-1(d). If necessary to comply with applicable tax laws, the cash payment will be paid no later than December 31 of the calendar year in which the Dividend Equivalent is no longer subject to a “substantial risk of forfeiture” within the meaning of Treasury Regulations Section 1.409A-1(d). If your Performance Stock Units never vest or are otherwise forfeited (including due to failure to timely pay the Purchase Price per Share), your corresponding Dividend Equivalents will immediately expire on the expiration or other forfeiture of the related Performance Stock Units – and you will not be entitled to any payout of regular cash dividends in respect of those forfeited Performance Stock Units. Your Dividend Equivalents will immediately expire on the issuance of the underlying Shares subject to the Performance Stock Units that have vested – that is, no additional regular cash dividends that are declared or paid after that date will accrue for those newly vested shares. Instead, your rights to receive any regular cash dividends will be solely as a Company stockholder. Your rights on the Dividend Equivalents are subject to all of the same terms and conditions as apply to your underlying Performance Stock Units in respect of which these Dividend Equivalents are granted.

 

4.     Method of Payment. In order to be issued the shares of Common Stock and related Dividend Equivalents subject to your vested Performance Stock Units, you must pay the aggregate Purchase Price per Share for your vested Performance Stock Units within two months following the vesting date for such Performance Stock Units. You may pay the Purchase Price per Share through one or more of the following:

 

(a)     Cash, check, bank draft, electronic funds or wire transfer, or money order payable to the Company. 

 

(b)     Offset against the value of cash due to you on the vesting of your Dividend Equivalents. 

 

(c)     Provided that at the vesting date the Common Stock is publicly traded, using a program developed under Regulation T, as provided by the Federal Reserve Board that, prior to the issuance of Common Stock, results in either the receipt of cash (or check) by the Company or the receipt of irrevocable instructions to pay the aggregate Purchase Price per Share to the Company from the sales proceeds. This manner of payment is also known as a “broker-assisted exercise,” “same day sale” or “sell to cover.”

 

(d)     If and only if permitted by the Board at the time the Purchase Price per Share is due and payable, by a net settlement arrangement pursuant to which the Company will reduce the number of shares of Common Stock issuable upon vesting by the largest whole number of shares with a Fair Market Value that does not exceed the aggregate Purchase Price per Share. You must submit an additional payment to the extent of any remaining balance of the aggregate Purchase Price per Share not satisfied by such reduction in the number of whole shares to be issued.

 

 

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5.     Securities Law Compliance. You will not be issued any Common Stock underlying the Performance Stock Units or other shares with respect to your Performance Stock Units (or payments in respect of your Dividend Equivalents) unless either (i) the shares are registered under the Securities Act, or (ii) the Company has determined that such issuance would be exempt from the registration requirements of the Securities Act. Your Award also must comply with other applicable laws and regulations governing the Award, and you will not receive shares underlying your Performance Stock Units (or payments in respect of your Dividend Equivalents) if the Company determines that such receipt would not be in material compliance with such laws and regulations.

 

6.     Transferability. Prior to the time that shares of Common Stock have been delivered to you, you may not transfer, pledge, sell or otherwise dispose of any portion of the Performance Stock Units or the shares in respect of your Performance Stock Units. For example, you may not use shares that may be issued in respect of your Performance Stock Units as security for a loan, nor may you transfer, pledge, sell or otherwise dispose of such shares. This restriction on transfer will lapse on delivery to you of shares in respect of your vested Performance Stock Units. 

 

(a)     Death. Your Performance Stock Units are not transferable other than by will and by the laws of descent and distribution. At your death, your executor or administrator of your estate will be entitled to receive, on behalf of your estate, Common Stock or other consideration under this Award. 

 

(b)     Domestic Relations Orders. If you receive written permission from the Board or its duly authorized designee, and provided that you and the designated transferee enter into transfer and other agreements required by the Company, you may transfer your right to receive the distribution of Common Stock or other consideration under your Performance Stock Units, in accordance with a domestic relations order or official marital settlement agreement that contains the information required by the Company to effectuate the transfer. You are encouraged to discuss with the Company’s General Counsel the proposed terms of any such transfer prior to finalizing the domestic relations order or marital settlement agreement to verify that you may make such transfer, and if so, to help ensure the required information is contained within the domestic relations order or marital settlement agreement. The Company is not obligated to allow you to transfer your Award in connection with your domestic relations order or marital settlement agreement.

 

7.     Date of Issuance. 

 

(a)     The issuance of shares in respect of the Performance Stock Units (and payments in respect of your Dividend Equivalents) is intended to comply with Treasury Regulations Section 1.409A-1(b)(4) and will be construed and administered in such a manner. As a result, subject to your payment of the applicable Purchase Price per Share, the shares (and payments) will be issued no later than the date that is the 15th day of the third calendar month of the applicable year following the year in which the shares of Common Stock under this Award are no longer subject to a “substantial risk of forfeiture” within the meaning of Treasury Regulations Section 1.409A-1(d).

 

 

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(b)     If the Company determines that it is necessary to comply with applicable tax laws, the shares (and payments) will be issued, subject to your payment of the applicable Purchase Price per Share, no later than December 31 of the calendar year in which the shares are no longer subject to a “substantial risk of forfeiture” within the meaning of Treasury Regulations Section 1.409A-1(d). 

 

8.     Dividends. You will receive no benefit or adjustment to your Performance Stock Units with respect to any cash dividend, stock dividend or other distribution except as provided in the Plan with respect to a Capitalization Adjustment. Please see Section 3(d) regarding Dividend Equivalents.

 

9.     Restrictive Legends. The Common Stock issued with respect to your Performance Stock Units will be endorsed with appropriate legends determined by the Company.

 

10.     Award not a Service Contract. Your Continuous Service is not for any specified term and may be terminated by you or by the Company or an Affiliate at any time, for any reason, with or without cause and with or without notice. Nothing in this Agreement (including, but not limited to, the vesting of your Performance Stock Units or the issuance of the shares subject to your Performance Stock Units or payments in respect of your Dividend Equivalents), the Plan or any covenant of good faith and fair dealing that may be found implicit in this Agreement or the Plan shall: (i) confer on you any right to continue in the employ or service of, or affiliation with, the Company or an Affiliate; (ii) constitute any promise or commitment by the Company or an Affiliate regarding the fact or nature of future positions, future work assignments, future compensation or any other term or condition of employment or affiliation; (iii) confer any right or benefit under this Agreement or the Plan unless such right or benefit has specifically accrued under the terms of this Agreement or Plan; or (iv) deprive the Company of the right to terminate you at will and without regard to any future vesting opportunity that you may have.

 

11.     Withholding Obligations.

 

(a)     On each vesting date, and on or before the time you receive a distribution of the shares underlying your Performance Stock Units (or payments in respect of your Dividend Equivalents), and at any other time as reasonably requested by the Company in accordance with applicable tax laws, you agree to make adequate provision for any sums required to satisfy the federal, state, local and foreign tax withholding obligations of the Company or any Affiliate that arise in connection with your Award (the “Withholding Taxes”). Specifically, the Company or an Affiliate may, in its sole discretion, satisfy all or any portion of the Withholding Taxes relating to your Award by any of the following means or by a combination of such means: (i) withholding from any compensation otherwise payable to you by the Company or an Affiliate; (ii) causing you to tender a cash payment (which may be in the form of a check, electronic wire transfer or other method permitted by the Company); (iii) permitting or requiring you to enter into a “same day sale” commitment with a broker-dealer that is a member of the Financial Industry Regulatory Authority (a “FINRA Dealer”) whereby you irrevocably elect to sell a portion of the shares to be delivered in connection with your Performance Stock Units to satisfy the Withholding Taxes and whereby the FINRA Dealer irrevocably commits to forward the proceeds necessary to satisfy the Withholding Taxes directly to the Company and/or its Affiliates; or (iv) subject to the approval of the independent members of the Board, withholding shares of Common Stock from the shares of Common Stock issued or otherwise issuable to you in connection with your Performance Stock Units with a fair market value (measured as of the date shares of Common Stock are issued to you) equal to the amount of such Withholding Taxes; provided, however, that the number of such shares of Common Stock so withheld will not exceed the amount necessary to satisfy the Company’s required tax withholding obligations using the minimum statutory withholding rates for federal, state, local and foreign tax purposes, including payroll taxes, that are applicable to supplemental taxable income. 

 

 

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(b)     Unless the Withholding Taxes of the Company and/or any Affiliate are satisfied, the Company will have no obligation to deliver to you any Common Stock (or payments in respect of your Dividend Equivalents).

 

(c)     If the Company’s obligation to withhold arises prior to the delivery to you of Common Stock or it is determined after the delivery of Common Stock to you that the amount of the Company’s withholding obligation was greater than the amount withheld by the Company, you agree to indemnify and hold the Company harmless from any failure by the Company to withhold the proper amount.

 

12.     Unsecured Obligation. Your Award is unfunded, and as a holder of vested Performance Stock Units (and Dividend Equivalents), you will be considered an unsecured creditor of the Company with respect to the Company’s obligation, if any, to issue shares or other property or compensation pursuant to this Agreement. You will not have voting or any other rights as a stockholder of the Company with respect to the shares to be issued pursuant to this Agreement until such shares are issued to you. On such issuance, you will obtain full voting and other rights as a stockholder of the Company. Nothing contained in this Agreement, and no action taken pursuant to its provisions, will create or be construed to create a trust of any kind or a fiduciary relationship between you and the Company or any other person.

 

13.     Notices. Any notices provided for in this Agreement or the Plan will be given in writing (including electronically) and will be deemed effectively given on receipt or, in the case of notices delivered by the Company to you, five days after deposit in the U.S. mail, postage prepaid, addressed to you at the last address you provided to the Company. The Company may, in its sole discretion, decide to deliver any documents related to participation in the Plan and this Award by electronic means or to request your consent to participate in the Plan by electronic means. By accepting this Award, you consent to receive such documents by electronic delivery and to participate in the Plan through an on-line or electronic system established and maintained by the Company or another third party designated by the Company.

 

14.     Miscellaneous.

 

(a)     The rights and obligations of the Company under your Award will be transferable to any one or more persons or entities, and all covenants and agreements hereunder will inure to the benefit of, and be enforceable by the Company’s successors and assigns. 

 

 

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(b)     You agree on request to execute any further documents or instruments necessary or desirable in the sole determination of the Company to carry out the purposes or intent of your Award.

 

(c)     You acknowledge and agree that you have reviewed your Award in its entirety, have had an opportunity to obtain the advice of counsel prior to executing and accepting your Award, and fully understand all provisions of your Award.

 

(d)     This Agreement will be subject to all applicable laws, rules, and regulations, and to such approvals by any governmental agencies or national securities exchanges as may be required.

 

(e)     All obligations of the Company under the Plan and this Agreement will be binding on any successor to the Company, whether the existence of such successor is the result of a direct or indirect purchase, merger, consolidation, or otherwise, of all or substantially all of the business and/or assets of the Company.

 

15.     Governing Plan Document. Your Award is subject to all the provisions of the Plan, the provisions of which are hereby made a part of your Award, and is further subject to all interpretations, amendments, rules and regulations which may from time to time be promulgated and adopted pursuant to the Plan. Your Award (and any compensation paid or shares issued under your Award) is subject to recoupment in accordance with The Dodd–Frank Wall Street Reform and Consumer Protection Act and any implementing regulations thereunder, any clawback policy adopted by the Company and any compensation recovery policy otherwise required by applicable law. No recovery of compensation under such a clawback policy will be an event giving rise to a right to voluntarily terminate employment on a resignation for “good reason,” or for a “constructive termination” or any similar term under any plan of or agreement with the Company. You hereby acknowledge receipt or the right to receive a document providing the information required by Rule 428(b)(1) promulgated under the Securities Act, which includes the Plan prospectus. In addition, you acknowledge receipt of the Company’s policy permitting officers and directors to sell shares only during certain “window” periods and the Company’s insider trading policy, in effect from time to time.

 

16.     Severability. If all or any part of this Agreement or the Plan is declared by any court or governmental authority to be unlawful or invalid, such unlawfulness or invalidity will not invalidate any portion of this Agreement or the Plan not declared to be unlawful or invalid. Any Section of this Agreement (or part of such a Section) so declared to be unlawful or invalid shall, if possible, be construed in a manner which will give effect to the terms of such Section or part of a Section to the fullest extent possible while remaining lawful and valid.

 

17.     Effect on Other Employee Benefit Plans. The value of the Award subject to this Agreement will not be included as compensation, earnings, salaries, or other similar terms used when calculating the Employee’s benefits under any employee benefit plan sponsored by the Company or any Affiliate, except as such plan otherwise expressly provides. The Company expressly reserves its rights to amend, modify, or terminate any of the Company’s or any Affiliate’s employee benefit plans.

 

 

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18.     Amendment. Any amendment to this Agreement must be in writing, signed by a duly authorized representative of the Company. The Board reserves the right to amend this Agreement in any way it may deem necessary or advisable to carry out the purpose of the grant as a result of any change in applicable laws or regulations or any future law, regulation, interpretation, ruling, or judicial decision. 

 

19.     Compliance with Section 409A of the Code. This Award is intended to comply with the “short-term deferral” rule set forth in Treasury Regulation Section 1.409A-1(b)(4). However, if this Award fails to satisfy the requirements of the short-term deferral rule and is otherwise not exempt from, and therefore deemed to be deferred compensation subject to, Section 409A of the Code, and if you are a “Specified Employee” (within the meaning set forth Section 409A(a)(2)(B)(i) of the Code) as of the date of your separation from service (within the meaning of Treasury Regulation Section 1.409A-1(h)), then the issuance of any shares or other payments that would otherwise be made on the date of the separation from service or within the first six months thereafter will not be made on the originally scheduled dates and will instead be issued in a lump sum on the date that is six months and one day after the date of the separation from service, with the balance of the shares issued and other payments made thereafter in accordance with the original vesting and issuance schedule set forth above, but if and only if such delay in the issuance of the shares and payment of the compensation is necessary to avoid the imposition of taxation on you in respect of the shares under Section 409A of the Code. Each installment of Performance Stock Units (and the related Dividend Equivalents) that vests is a “separate payment” for purposes of Treasury Regulation Section 1.409A-2(b)(2). 

 

20.     No Obligation to Minimize Taxes. The Company has no duty or obligation to minimize the tax consequences to you of this Award and will not be liable to you for any adverse tax consequences to you arising in connection with this Award. You are hereby advised to consult with your own personal tax, financial and/or legal advisors regarding the tax consequences of this Award and by signing the Grant Notice, you have agreed that you have done so or knowingly and voluntarily declined to do so. 

 

 

 

7ex10-1.htm

Exhibit 10.1

 

SEVERANCE AGREEMENT

 

THIS SEVERANCE AGREEMENT (this “Agreement”) is made as of May 6, 2016 (the “Effective Date”) between Higher One Holdings, Inc., a Delaware corporation, or any successor corporation thereto (“Holdings”), and [INSERT NAME], an individual (the “Employee”).

 

RECITALS

 

WHEREAS, Holdings desires to provide certain severance payments to the Employee in the event of a qualifying termination of employment as set forth below on the terms and conditions set forth in this Agreement.

 

NOW THEREFORE, in consideration of the promises and mutual covenants contained in this Agreement, the receipt, adequacy and legal sufficiency of which is hereby acknowledged, and intending to be legally bound, Holdings and the Employee agree as follows:

 

 

	
1.
	
Definitions. 

 

	 	
a.
	
“Bonus Payment” shall mean:

 

	 	
i.
	
in the event the Employee’s employment is terminated as described in Section 2(a) of this Agreement, a prorated portion of the Employee’s annual incentive under the Company’s Annual Incentive Plan (or any replacement plan or program) that would have become payable based on actual performance of the Company against the target(s) set by the Company (subject to any downward discretion exercised by the Company in respect of the annual incentives paid to employees, including the Employee) in respect of the year of termination had the Employee’s employment continued, with such award prorated based on the number of days during the year of termination which preceded the Employee’s termination of employment, payable in a lump sum at such time as annual incentives for performance in the year of termination otherwise become payable to the Company’s executive officers, but in no event later than March 15 of the year following the year in which the Termination Date occurs; and

 

	 	
ii.
	
in the event the Employee’s employment is terminated as described in Section 2(b) or 2(c) of this Agreement, a prorated portion of the Employee’s annual incentive under the Company’s Annual Incentive Plan (or any replacement plan or program) equal to the Employee’s target bonus amount in respect of the year of termination multiplied by a fraction, the numerator of which is the number of days during the year of termination which preceded the Termination Date, and the denominator of which is three hundred sixty-five (365), payable in a lump sum as soon as practicable on or following the later of (x) the Termination Date and (y) with respect to a termination as described in Section 2(b) of this Agreement, the date of the Change in Control, and with respect to a termination as described in Section 2(c) of this Agreement, the date of the dissolution or liquidation of the Company, but in no event later than March 15 of the year following the year in which the Termination Date occurs; provided that, notwithstanding anything to the contrary in this Agreement, if a Bonus Payment for the year of termination has previously been made pursuant to Section 2(a) of this Agreement, no Bonus Payment shall be made pursuant to Section 2(b) of this Agreement.

 

 

 

 

 

	 	
b.
	
“Cause” shall mean (i) the Employee’s material breach of any of his or her obligations under any written agreement with Holdings or any of its subsidiaries, (ii) the Employee’s material violation of any of the Company’s policies, procedures, rules and regulations applicable to employees generally or to employees at his or her grade level, in each case, as they may be amended from time to time in the Company’s sole discretion, (iii) the Employee’s failure to substantially perform his or her duties to Holdings or its subsidiaries (other than as a result of physical or mental illness or injury), (iv) the Employee’s willful misconduct or gross negligence that has caused or is reasonably expected to result in material injury to the business, reputation or prospects of Holdings or any of its subsidiaries, (v) the Employee’s fraud or misappropriation of funds, or (vi) the Employee’s commission of a felony or other serious crime involving moral turpitude.

 

	 	
c.
	
“Change in Control” shall mean any one person, or more than one person acting as a group (as determined under section 1.409A-(i)(5)(v)(B) of the federal tax regulations), acquires ownership of stock of Holdings that, together with stock held by such person or group, constitutes more than 50 percent of the total fair market value or total voting power of the stock of Holdings.

 

	 	
d.
	
“COBRA” shall mean Section 4980B of the Code and Section 601 of the Employee Retirement Income Security Act of 1974, as amended. 

 

	 	
e.
	
“Code” shall mean the Internal Revenue Code of 1986, as amended.

 

	 	
f.
	
“Company” shall mean Holdings and its affiliates.

 

	 	
g.
	
“Disability” shall mean the Employee’s incapacity due to physical or mental illness or injury resulting in the Employee being unable, due to such incapacity or physical or mental illness, to perform the essential duties of his or her employment with reasonable accommodation for a period not less than one hundred eighty (180) days and shall be determined by the Company in its sole discretion.

 

	 	
h.
	
“Good Reason” shall mean the occurrence of any of the following events without the Employee’s written consent: (i) a material reduction in the Employee’s base salary, (ii) a material reduction in all of the Employee’s core responsibilities at the Company, (iii) a relocation of the Employee’s principal place of business to a location more than fifty (50) miles from his or her designated office location, or (iv) a material breach by the Company of any provision of this Agreement; provided that, within ninety (90) days following the occurrence of any of the events described in clauses (i)-(iv) above, the Employee shall have delivered written notice to the Company of his or her intention to terminate employment for Good Reason, which notice shall specify in reasonable detail the circumstances claimed to give rise to his or her right to terminate employment for Good Reason, and the Company shall not have cured such circumstances within thirty (30) days following the Company’s receipt of such notice.

 

 

2

 

 

	 	
i.
	
“Termination Date” shall mean the date of the Employee’s termination of employment with the Company. 

 

	
2.
	
Severance Payments.

 

	 	
a.
	
Subject to Section 3 and Section 5 of this Agreement, other than a termination of employment covered under Section 2(b) or 2(c) of this Agreement, in the event that the Employee’s employment is terminated (i) by the Company without Cause (other than as a result of death or Disability) or (ii) by the Employee for Good Reason, the Company will pay or provide to the Employee: (A) any base salary earned but not yet paid as of the Termination Date, any accrued vacation pay payable pursuant to the Company’s policies, and any documented accrued and unreimbursed business expenses in accordance with the Company’s policies, in each case payable in a lump sum within thirty (30) days following the Termination Date (the amounts and benefits, including payment terms and timing, set forth in this clause (A), the “Accrued Obligations”), (B) the Bonus Payment and (C) (I) an amount equal to one (1) year of then-current base salary, payable in equal monthly installments in accordance with the Company’s customary payroll practices, and (II) subject to the Employee’s and/or the Employee’s eligible dependents’, as applicable, timely election of continuation coverage under COBRA, reimbursement on a monthly basis for the COBRA premiums paid by the Employee each month, through the twelfth (12th) calendar month that commences after the Termination Date, to receive COBRA benefits for the Employee and/or the Employee’s eligible dependents, in accordance with applicable law that the Employee and/or the Employee’s eligible dependents, as applicable, remain eligible for COBRA coverage (the amounts and benefits, including payment terms and timing, set forth in this clause (C), the “Severance Payments”).  The Bonus Payment and Severance Payments payable or provided pursuant to this Section 2(a) are subject to and conditioned upon (x) the Employee’s execution of a valid general release and waiver in a form reasonably acceptable to the Company, waiving all claims the Employee may have against the Company, its successors and assigns and its executives, officers and directors (the “Release”) and such Release becoming effective within thirty (30) days following the Termination Date and (y) the Employee’s continuing compliance with the obligations set forth in Section 6 hereof (the conditions set forth in (x) and (y), the “Release and Covenant Conditions”).

 

 

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b.
	
Subject to Section 3 and Section 5 of this Agreement, in the event that the Employee’s employment is terminated within 75 days prior to or 12 months following a Change in Control (i) by the Company without Cause (other than as a result of death or Disability) or (ii) by the Employee for Good Reason, (A) all of the Employee’s then unvested options to purchase shares of common stock of Holdings (if any), restricted common stock of Holdings (if any) and restricted stock units of Holdings (if any) and/or any awards resulting from adjustment, exchange or substitution pursuant to Section 10 of Holdings’ Amended and Restated 2010 Equity Incentive Plan and Section 11 of Holdings’ 2000 Stock Plan, as amended (each, an “Award”) shall immediately become exercisable or vest, as applicable, as of the later of the Termination Date or the date of the Change in Control and be settled in accordance with the terms of their respective grant agreements, and each stock option held by the Employee shall continue to remain outstanding until the earlier of (x) the twelve (12) month anniversary of the Termination Date and (y) the expiration date set forth in its respective grant agreement (the amounts and benefits, including payment terms and timing, set forth in this clause (A), the “Equity Acceleration”) and (B) the Company will pay or provide to the Employee the Employee’s Accrued Obligations, the Bonus Payment and Severance Payments. The Equity Acceleration, the Bonus Payment and Severance Payments payable or provided pursuant to this Section 2(b) are subject to and conditioned upon the Employee’s compliance with the Release and Covenant Conditions. For purposes of Section 2(b)(A), any Awards that pursuant to their terms would otherwise be forfeited and cancelled upon a termination of employment prior to a Change in Control shall not be forfeited or cancelled at such time but will remain outstanding until the earlier of (x) the Change in Control, at which time the provisions of Section 2(b)(A) will take effect, and (y) the 76th day following the Termination Date, at which time such Awards will be forfeited and cancelled.

 

	 	
c.
	
Subject to Section 3 and Section 5 of this Agreement, in the event that the Employee’s employment is terminated (i) by the Company without Cause (other than as a result of death or Disability) or (ii) by the Employee for Good Reason in connection with the dissolution or liquidation of the Company, the Employee shall receive the Employee’s Accrued Obligations, Equity Acceleration, Bonus Payment and Severance Payments. The Equity Acceleration, Bonus Payment and Severance Payments provided pursuant to this Section 2(c) are subject to and conditioned upon the Employee’s compliance with the Release and Covenant Conditions.

 

	 	
d.
	
Subject to Section 3 and Section 5 of this Agreement, in the event the Employee’s employment with the Company is terminated by reason of death or Disability, by the Employee without Good Reason or by the Company for Cause, the Company will pay or provide to the Employee the Employee’s Accrued Obligations.

 

	 	
e.
	
Except as provided in this Section 2, the Company shall have no additional obligations under this Agreement upon the Employee’s termination of employment with the Company for any reason.

 

 

4

 

 

	
3.
	
Other Plans.

 

Except to the extent that any term of this Agreement confers rights to severance payments and benefits that are more favorable to the Employee than are available under any other employee (including executive) benefit plan or executive compensation plan of the Company in which the Employee participates or under any agreement between the Company and the Employee (“Other Plans”), the Employee’s rights under any such Other Plan(s) shall be determined in accordance with the terms of such Other Plan (as it may be modified or added to by the Company from time to time), except as otherwise provided in Section 5 of this Agreement, and the Employee will have no rights to the corresponding severance payment(s) and/or benefit(s) provided under Section 2 of this Agreement. To the extent that any term of this Agreement confers rights to severance payments and benefits under Section 2 of this Agreement that are more favorable to the Employee than are available under any such Other Plan, the Employee’s rights under this Agreement shall be determined in accordance with this Agreement, and the Employee will have no rights to corresponding severance payment(s) and/or benefit(s) provided under any such Other Plan. Notwithstanding the foregoing, if any Other Plan in effect as of the effective date of this Agreement provides for a timing or schedule of payments that differs from the timing or schedule of payments in this Agreement, any severance payments and benefits provided under Section 2 of this Agreement shall be paid in accordance with the timing and schedule of payments under such Other Plan, to the extent required for compliance with Section 409A (as defined below). 

 

	
4.
	
Employment at Will. Nothing in this Agreement shall be construed as giving the Employee the right to be retained in the employment of the Company, nor shall it affect the right of the Company to dismiss the Employee, with or without Cause, without any liability except as provided in this Agreement. 

 

	
5.
	
Golden Parachute Payments.

 

Notwithstanding any other provision of this Agreement or any other plan, arrangement, or agreement to the contrary, if any of the payments or benefits provided or to be provided by the Company to the Employee or for the Employee’s benefit pursuant to the terms of this Agreement or otherwise (“Covered Payments”) constitute parachute payments (“Parachute Payments”) within the meaning of Section 280G of the Code and would, but for this Section 5, be subject to the excise tax imposed under Section 4999 of the Code (or any successor provision thereto) or any similar tax imposed by state or local law or any interest or penalties with respect to such taxes (collectively, the “Excise Tax”), then the Covered Payments shall be payable either (i) in full or (ii) after reduction to the minimum extent necessary to ensure that no portion of the Covered Payments is subject to the Excise Tax, whichever of the foregoing (i) or (ii) results in the Employee’s receipt on an after-tax basis of the greatest amount of benefits after taking into account the applicable federal, state, local and foreign income, employment and excise taxes (including the Excise Tax). If Covered Payments are reduced, such Covered Payments shall be reduced in a manner that maximizes the Employee’s economic position. In applying this principle, the reduction shall be made in a manner consistent with the requirements of Section 409A, to the extent applicable, and where two or more economically equivalent amounts are subject to reduction but payable at different times, such amounts payable at the later time shall be reduced first but not below zero (0).

 

 

5

 

 

	
6.
	
Restrictive Covenants.

 

	 	
a.
	
Non-Solicitation.  During the Employee’s employment with the Company and for twelve (12) months thereafter, the Employee shall not, directly or indirectly, solicit or assist any other Person (as defined below) in soliciting any employee of the Company to perform services for any entity (other than the Company), attempt to induce any such employee to leave the employ of the Company, or hire or engage on behalf of himself or herself or any other Person any employee of the Company or anyone who was employed by the Company during the six (6) month period preceding such hiring or engagement.

 

  

	 	
b.
	
Confidentiality.  The Employee shall, during the Employee’s employment with the Company and thereafter, hold in strict confidence any proprietary or Confidential Information related to the Company.  For purposes of this Agreement, the term “Confidential Information” shall mean all information of the Company (in whatever form) which is not generally known to the public, including without limitation any inventions, processes, methods of distribution, customer lists or customers’ or trade secrets.  Upon the termination of employment with the Company, the Employee shall not take, without the prior written consent of the Company, any Confidential Information, including without limitation any business plans, contact lists, strategic plans or reports or other document (in whatever form) of the Company, relating to its methods of distribution, or any description of any formulas or secret processes and will return any such information (in whatever form) then in the Employee’s possession.

 

 

	 	
c.
	
Non-Compete.  The Company would likely suffer significant harm from the Employee’s competing with the Company during employment with the Company and for some period of time thereafter.  Accordingly, during employment with the Company and for a period of twelve (12) months following termination of employment for any reason, directly or indirectly, the Employee shall not become employed by, engage in business with, serve as an agent or consultant to, become a partner, member, principal, stockholder or other owner (other than a holder of less than 1% of the outstanding voting shares of any publicly held company) of, or otherwise perform services relating to, the Business (as defined below) for any Person that is engaged in, or otherwise competes or has a reasonable potential for competing with the Business (as defined herein), anywhere in which the Company engage in or intend to engage in the Business or where the Company’s customers are located (whether or not for compensation).  For purposes of this Agreement, the term “Person” shall mean any individual, partnership, corporation, limited liability company, unincorporated organization, trust or joint venture, or a governmental agency or political subdivision thereof.  For purposes of this Agreement, the “Business” shall mean the Company’s current and planned offering and provision of products and services to its higher education institution clients and customers.

 

	 	
d.
	
Non-Disparagement.  During employment with the Company and for three (3) years thereafter, the Employee shall not defame or disparage the Company and its officers, directors, members or executives.  During employment with the Company and for three (3) years thereafter, the Employee shall cooperate with the Company in refuting any defamatory or disparaging remarks by any third party made in respect of the Company’s directors, members, officers or executives.

 

 

6

 

 

	 	
e.
	
Injunctive Relief.  It is impossible to measure in money the damages that will accrue to the Company in the event that the Employee breaches any of the restrictive covenants provided in this Section 6.  The foregoing shall not prejudice the Company’s right to require the Employee to account for and pay over to the Company the compensation, profits, monies, accruals or other benefits derived or received by the Employee as a result of any transaction constituting a breach of any of the restrictive covenants provided in this Section 6.

 

	 	
f.
	
Whistleblower. Notwithstanding anything herein to the contrary, nothing in this Agreement or any other plan, arrangement or agreement of the Company shall (i) prohibit the Employee from making reports of possible violations of federal law or regulation to any governmental agency or entity in accordance with the provisions of and rules promulgated under Section 21F of the Securities Exchange Act of 1934 or Section 806 of the Sarbanes-Oxley Act of 2002, or of any other whistleblower protection provisions of state or federal law or regulation, or (ii) require notification or prior approval by the employer of any reporting described in clause (i); provided, however, that the Employee is not authorized to disclose communications with counsel that were made for the purpose of receiving legal advice or that contain legal advice or that are protected by the attorney work product or similar privilege. 

  

 

	
7.
	
Miscellaneous.

 

 

	 	
a.
	
Amendment.  This Agreement may be amended or terminated only by a written agreement signed by both parties hereto.  

 

	 	
b.
	
Waivers.  No waiver of a breach of any provision of this Agreement shall be construed to be a waiver of any other breach of this Agreement. No waiver of any provision of this Agreement shall be enforceable unless it is in writing and signed by the party against whom it is sought to be enforced.    

 

	 	
c.
	
 Assignment.  Rights and obligations under this Agreement are not assignable by the Employee, except as provided by will or operation of law or any plan, policy, program, arrangement or corporate governance document of, or other agreement with, the Company.  The Company’s rights and obligations under this Agreement are assignable by the Company to any successor to the Company or an acquirer of all or substantially all of the assets of the Company.  

 

	 	
d.
	
Successors; Binding Agreement; Third Party Beneficiaries.  This Agreement will inure to the benefit of and be binding upon any permitted assignees of the parties hereto.  The Company shall require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company to assume this Agreement in the same manner and to the same extent the Company would have been required to perform it if no such succession had taken place.  As used in this Agreement, “the Company” shall mean both the Company as defined above and any such successor that assumes this Agreement, by operation of law or otherwise.

 

 

7

 

 

	 	
e.
	
Severability. If any term of this Agreement is rendered, declared or held to be invalid or unenforceable, the remaining provisions hereof shall remain in full force and effect, shall in no way be affected, impaired or invalidated, and shall be enforced to the full extent permitted by law and equity.

 

	 	
f.
	
Entire Agreement. Except as expressly provided otherwise in this Agreement, this Agreement constitutes the entire agreement between the Company and the Employee regarding the subject matter of this Agreement, and fully supersedes any and all prior agreements, written or oral, between the parties relating to the Employee’s severance rights and eligibility, except to the extent otherwise expressly provided herein.

  

	 	
g.
	
Counterparts. This Agreement may be executed in any number of counterparts and by facsimile, and each such counterpart hereof shall be deemed to be an original instrument, but all such counterparts together shall constitute but one agreement.

 

	 	
h.
	
Notices. Any notice or other communication hereunder shall be in writing and shall be effective upon receipt (or refusal of receipt) if delivered personally, or sent by overnight courier if signature for the receiving party is obtained, or sent by certified or registered mail, postage prepaid, to the other party at the address set forth below:

 

 

 

	 	
If to the Company:
	
Higher One Holdings, Inc.

115 Munson Street

New Haven, CT 06511

Attention: General Counsel

	 	 	 
	 	
If to the Employee:
	
at the address on file with the 

Company

  

 

Either party may change its specified address by giving notice in writing to the other.

  

	 	
i.
	
Interpretation. The headings used herein are for convenience only and do not limit or expand the contents of this Agreement.

 

	 	
j.
	
Survival. Any provisions of this Agreement creating obligations extending beyond the term of this Agreement shall survive the expiration or termination of this Agreement, regardless of the reason for such termination.

 

 

8

 

 

	 	
k.
	
Governing Law.  This Agreement shall be governed by and construed in accordance with the laws of the State of Connecticut without reference to its principals of conflict of law.

 

 

	 	
l.
	
Withholding.  The Company may withhold from any and all amounts payable under this Agreement such Federal, state and local taxes as may be required to be withheld pursuant to any applicable law or regulation.

 

 

	 	
m.
	
Section 409A Compliance.  The intent of the parties is that payments and benefits under this Agreement comply with, or be exempt from, the requirements of Section 409A of the Code and the regulations and guidance promulgated thereunder (collectively “Section 409A”) and, accordingly, to the maximum extent permitted, this Agreement shall be limited, construed and interpreted in accordance with such intent and, notwithstanding any other provision of this Agreement, in accordance with this Section 7(g).  A termination of employment shall not be deemed to have occurred for purposes of any provision of this Agreement providing for the payment of any amounts or benefits subject to Section 409A upon or following a termination of employment unless such termination is also a “separation from service” within the meaning of Section 409A and, for purposes of any such provision of this Agreement, references to a “termination,” “termination of employment” or like terms shall mean “separation from service.”  The determination of whether and when a separation from service has occurred shall be made in a manner consistent with, and based on the presumptions set forth in, US Treasury Regulation Section 1.409A-1(h) or any successor provision thereto.  It is intended that each installment, if any, of the payments and benefits provided hereunder shall be treated as a separate “payment” for purposes of Section 409A.  Neither the Company nor the Employee shall have the right to accelerate or defer the delivery of any such payments or benefits except to the extent specifically permitted or required by Section 409A; and if, as of the date of the “separation from service,” the Employee is a “specified employee” (within the meaning of that term under Section 409A(a)(2)(B) of the Code, or any successor provision thereto), then with regard to any payment or the provision of any benefit that is subject to this section (whether under this Agreement, or pursuant to any other agreement with or plan, program, payroll practice of the Company, including any Other Plan), is not exempt from Section 409A pursuant to Treasury Regulation Sections 1.409A-1(b)(4) and/or 1.409A-1(b)(9) and is due upon or as a result of the Employee’s separation from service, such payment or benefit shall not be made or provided, to the extent making or providing such payment or benefit would result in additional taxes or interest under Section 409A, until the date which is the earlier of  (A) the expiration of the six (6)-month period measured from the date of such “separation from service,” and (B) the date of the Employee’s death (the “Delay Period”) and this Agreement and each such agreement, plan, program, or payroll practice including any Other Plan shall hereby be deemed amended accordingly.  Upon the expiration of the Delay Period, all payments and benefits delayed pursuant to this section (whether they would have otherwise been payable in a single sum or in installments in the absence of such delay) shall be paid or reimbursed to the Employee in a lump sum, and any remaining payments and benefits due under this Agreement or any other agreement with or plan, program, payroll practice of the Company, including any Other Plan, shall be paid or provided in accordance with the normal payment dates specified for them herein or therein.  All reimbursements and in-kind benefits provided under this Agreement or otherwise to the Employee shall be made or provided in accordance with the requirements of Section 409A to the extent that such reimbursements or in-kind benefits are subject to Section 409A.  All expenses or other reimbursements paid pursuant herewith and therewith that are taxable income to the Employee shall in no event be paid later than the end of the calendar year next following the calendar year in which the Employee incurs such expense or pay such related tax.  With regard to any provision herein that provides for reimbursement of costs and expenses or in-kind benefits, except as permitted by Section 409A, the right to reimbursement or in-kind benefits shall not be subject to liquidation or exchange for another benefit, 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 shall not be violated with regard to expenses reimbursed under any arrangement covered by Section 105(b) of the Code solely because such expenses are subject to a limit related to the period the arrangement is in effect and such payments shall be made on or before the last day of the Employee’s taxable year following the taxable year in which the expense occurred.

 

 

9

 

 

	 	
n.
	
No Duty to Mitigate. The Employee shall not be required to mitigate, by seeking employment or otherwise, the amount of any payment that the Company becomes obligated to make under this Agreement and, except as expressly provided in this Agreement, amounts or other benefits to be paid or provided to the Employee pursuant to this Agreement shall not be reduced by reason of the Employee’s obtaining other employment or receiving similar payments or benefits from another employer.

 

 (remainder of page intentionally left blank)

 

 

10

 

 

IN WITNESS WHEREOF, the undersigned have executed this Severance Agreement as of the date first above written.

 

 

 

	
 
	
HIGHER ONE HOLDINGS, INC.: 

	
 
	
 

	
 
	
 

	 	 
	 	By:                                                     
	 	Name:                                                
	 	Title:                                                  
	 	 
	 	 
	 	 
	 	EMPLOYEE
	 	 
	 	
Employee Signature: 

	 	 
	 	                                                            

 

 

11

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