Document:

EX-10.1

 Exhibit 10.1 

Execution Copy 

AMENDMENT NO. 1 TO CREDIT AGREEMENT AND WAIVER 

This AMENDMENT NO. 1 TO CREDIT AGREEMENT AND WAIVER (this “Amendment”), dated as of February 3, 2015, is entered into by
and among EBIX, INC., a Delaware corporation (the “Borrower”), certain subsidiaries of the Borrower party hereto as guarantors (the “Guarantors” and collectively with the Borrower, the “Credit
Parties”) under the Credit Agreement (defined below), each Lender under the Credit Agreement that is a party hereto, FIFTH THIRD BANK as a joining lender (the “Joining Lender”) and REGIONS BANK, as administrative agent (in
such capacity, the “Administrative Agent”) and collateral agent. 
 RECITALS 

WHEREAS, the Borrower, certain of the Guarantors, the Lenders and the Administrative Agent are parties to that certain Credit
Agreement, dated as of August 5, 2014 (as amended hereby and as further amended, restated, extended, supplemented or otherwise modified from time to time, the “Credit Agreement”), pursuant to which the Lenders have extended a
revolving credit facility to the Borrower; 
 WHEREAS, the Borrower and/or certain of its Subsidiaries entered into (a) that
certain Share Purchase Agreement pursuant to which Ebix Consulting, Inc., a Delaware corporation and subsidiary of the Borrower, acquired all of the equity of Vertex, Incorporated (the “Vertex Acquisition”), (b) that certain
Business Transfer Agreement pursuant to which Ebix Software India Pvt. Ltd., a subsidiary of the Borrower, acquired certain assets from i3 Pvt. Ltd. (the “Ebix India Acquisition”), (c) that certain Asset Purchase Agreement
pursuant to which the Borrower acquired certain assets from DCM Group Inc. (the “DCM Acquisition”), and (d) that certain Membership Interest Purchase Agreement pursuant to which Ebix Software India Pvt. Ltd. acquired all of the
ownership interests of Oakstone Publishing, LLC (the “Oakstone Acquisition”, and collectively with the Vertex Acquisition, the Ebix India Acquisition and the DCM Acquisition, the “Specified Acquisitions”); 

WHEREAS, the Borrower has requested that the Administrative Agent and the Required Lenders waive certain requirements under the Credit
Agreement with respect to the Specified Acquisitions as more fully described below; 
 WHEREAS, the Borrower has also requested that
(a) the Credit Agreement be amended, as provided herein, to increase the maximum amount by which the Aggregate Revolving Commitments may be increased pursuant to Section 2.1(c)(i) to $90,000,000 and (b) the Aggregate Revolving
Commitments be increased by $40,000,000 by certain Lenders and the Joining Lender (which increase shall constitute usage of the increase to Section 2.1(c)(i) of the Credit Agreement); 

WHEREAS, the Lenders party hereto (including the Joining Lender) have agreed to provide the requested waivers and amendments on the
terms and conditions contained in this Amendment; 
 NOW, THEREFORE, for valuable consideration, the receipt and adequacy of which
are hereby acknowledged, the parties hereto hereby agree as follows: 
 1. Defined Terms. Unless otherwise defined herein,
capitalized terms used herein shall have the meanings, if any, assigned to such terms in the Credit Agreement, as amended by this Amendment. 

 2. Amendments to Credit Agreement. Subject to the terms and conditions hereof and with
effect from and after the Amendment Effective Date (defined below), the Credit Agreement is hereby amended as follows: 
 (a) The definition
of “Change of Control” contained in Section 1.1 of the Credit Agreement is hereby amended by deleting the following parenthetical found in clause (b) of such definition in its entirety: 

“(excluding, in the case of both clause (ii) and clause (iii), any individual whose initial nomination for, or assumption of office
as, a member of that board or equivalent governing body occurs as a result of an actual or threatened solicitation of proxies or consents for the election or removal of one or more directors by any person or group other than a solicitation for the
election of one or more directors by or on behalf of the board of directors)”. 
 (b) Section 2.1(c)(i) of the Credit
Agreement shall be amended by deleting the reference to $50,000,000 contained therein and replacing such amount with $90,000,000. 
 (c)
Appendix A to the Credit Agreement is hereby deleted in its entirety and replaced with a revised Appendix A attached as Annex I hereto, so that the Revolving Commitment of each Lender (including the Joining Lender) shall be as
set forth on such amended Appendix A. 
 For the avoidance of doubt, the increase of the Aggregate Revolving Commitments provided hereunder and set
forth in the revised Appendix A to the Credit Agreement shall constitute usage of the available increase in the Aggregate Revolving Commitments pursuant to Section 2.1(c)(i) of the Credit Agreement, after giving effect to the
amendment set forth in clause (b) above. 
 3. Waiver of Specified Default. In reliance upon the representations, warranties and
covenants of the Borrower and each other Credit Party contained in this Amendment, and subject to the effectiveness and the terms and conditions of this Amendment, including, without limitation, those set forth in Section 7 hereof, as of
the Amendment Effective Date, the undersigned Lenders hereby waive (a) the requirements contained in Section 8.5 of the Credit Agreement and the definition of “Permitted Acquisition” in Section 1.1 of the
Credit Agreement, that the Borrower provide prior notice to the Administrative Agent and the Lenders of each of the Specified Acquisitions and deliver a certificate to the Administrative Agent, signed by an Authorized Officer of the Borrower, not
fewer than two Business Days prior to the consummation of each Specified Acquisition, in the case of clauses (b), (d) and (e) of the definition of Permitted Acquisition, and no later than substantially simultaneously
with the consummation of each Specified Acquisition, in the case of clauses (c), (f) and (g) of the definition of Permitted Acquisition, certifying, in each case, that the requirements in the definition of Permitted
Acquisition had been satisfied with respect to the applicable Specified Acquisition (the “Required Certificates”), and (b) any Default or Event of Default that may have resulted from the failure to provide notice of the
Specified Acquisitions or the Required Certificates within the time periods required under the definition of Permitted Acquisition. 
 4.
Joinder of Joining Lenders. By its execution of this Amendment, the Joining Lender hereby confirms and agrees that, on and after the date this Amendment becomes effective pursuant to Section 7 below (the “Amendment
Effective Date”), it shall be and become a party to the Credit Agreement as a Lender, shall have all of the rights and be obligated to perform all of the obligations of a Lender thereunder and its Revolving Commitments shall be as set forth
on Annex I attached hereto. The Joining Lender further (a) represents and warrants that (i) it has full power and authority, and has taken all action necessary, to execute and deliver this Amendment and to consummate the
transactions contemplated hereby and to become a Lender under the Credit Agreement, (ii) it meets all requirements 

 
of an Eligible Assignee under the Credit Agreement (subject to receipt of such consents as may be required under the Credit Agreement, which such consents shall be deemed provided, to the extent
required, by each Person that executes this Amendment), (iii) from and after the date hereof, it shall be bound by the provisions of the Credit Agreement as a Lender thereunder and shall have the obligations of a Lender thereunder, and
(iv) it has received a copy of the Credit Agreement, together with copies of the most recent financial statements delivered pursuant to Section 7.1 thereof, as applicable, and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into the Credit Agreement on the basis of which it has made such analysis and decision independently and without reliance on the Administrative Agent, any other Lender, agent or
arranger; and (b) agrees that (i) it will, independently and without reliance on the Administrative Agent, or any other Lender, and based on such documents and information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under the Credit Documents, and (ii) it will perform in accordance with their terms all of the obligations which by the terms of the Credit Documents are required to be performed by it as a
Lender. 
 5. Representations and Warranties. Each of the Borrower and each of the other Credit Parties, by its execution of this
Amendment, hereby represents and warrants to the Administrative Agent and the Lenders as follows: 
 (a) the execution, delivery and
performance by each Credit Party of this Amendment have been duly authorized by all necessary corporate or other organizational action and do not and will not (i) violate in any material respect the terms of any of the Credit Parties’
Organizational Documents; (ii) except as could not reasonably be expected to have a Material Adverse Effect, conflict with, result in a breach of or constitute (with due notice or lapse of time or both) a default under any other Contractual
Obligations of any Credit Party, (iii) result in or require the creation of any Lien upon any of the properties or assets of any Credit Party (other than Liens created under any of the Credit Documents in favor of the Collateral Agent for the
benefit of the holders of the Obligations), or (iv) require any approval of stockholders, members or partners or any approval or consent of any Person under any Contractual Obligation of any Credit Party; 

(b) this Amendment has been duly executed and delivered by each Credit Party, and constitutes a legal, valid and binding obligation of each
Credit Party, enforceable against such Credit Party in accordance with its terms, except as may be limited by Debtor Relief Laws or by equitable principles relating to enforceability; 

(c) the representations and warranties of each Credit Party contained in Section 6 of the Credit Agreement and in each other
Credit Document are true and correct in all material respects on and as of the Amendment Effective Date, except to the extent that such representations and warranties specifically relate to an earlier date, in which case they shall be true and
correct in all material respects as of such earlier date, and except that for purposes of this clause (c), the representations and warranties contained in Sections 6.7(a) and (b) of the Credit Agreement shall be deemed to refer to
the most recent statements furnished pursuant to Sections 7.1(b) and (a) of the Credit Agreement, respectively; and 

(d) after the effectiveness of this Amendment (including each of the waivers set forth in Section 3 above) on the Amendment
Effective Date and the increase of the Aggregate Revolving Commitments set forth herein, no Default has occurred and is continuing. 
 6.
Reallocation, Assignments and Payments. Simultaneously with the Amendment Effective Date, the parties hereby agree that (a) the Revolving Commitments shall be as set forth on the revised Appendix A attached hereto as Annex
I, (b) each Lender having a Revolving Commitment immediately prior to the increase provided herein will automatically and without further act be deemed to 

 
have assigned to each Revolving Credit Increase Lender in respect of such increase, and each such Revolving Credit Increase Lender will automatically and without further act be deemed to have
assumed, a portion of such Lender’s participations under the Credit Agreement in outstanding Letters of Credit and Swingline Loans such that, after giving effect to each such deemed assignment and assumption of participations, the percentage of
the aggregate outstanding (i) participations under the Credit Agreement in Letters of Credit and (ii) participations under the Credit Agreement in Swingline Loans, will, in each case, equal each Lender’s Revolving Commitment
Percentage (after giving effect to such increase), all as provided further in Section 2.1(c)(ix) of the Credit Agreement and (c) if, on the Amendment Effective Date there are any Revolving Loans outstanding, the Lenders (including
the Joining Lender) shall make such payments among themselves as the Administrative Agent may reasonably request to the extent necessary to keep the outstanding Revolving Loans ratable with the revised Revolving Commitment Percentages arising from
such increase, and the Borrower shall pay to the applicable Lenders any amounts required to be paid pursuant to Section 3.1(c) of the Credit Agreement in connection with such payments among the Lenders as if such payments were effected
by prepayments of Revolving Loans. 
 7. Effectiveness; Conditions Precedent. The effectiveness of this Amendment and the amendments
to the Credit Agreement herein provided are subject to the satisfaction of the following conditions precedent: 
 (a) the Administrative
Agent shall have received each of the following documents or instruments in form and substance reasonably acceptable to the Administrative Agent: 

(i) counterparts of this Amendment, duly executed by each Credit Party, the Administrative Agent, the Required Lenders (prior
to giving effect to this Amendment) and the Joining Lender; 
 (ii) executed copies of the Required Certificates for each
Specified Acquisition; and 
 (iii) an executed copy of a certificate of the Borrower dated as of the date hereof signed by
an Authorized Officer of the Borrower certifying and attaching the resolutions adopted by the Borrower and each Guarantor approving or consenting to the increase in the Aggregate Revolving Commitments provided by this Amendment; 

(b) (i) each of Ebix Consulting, Inc., and Vertex, Incorporated shall have delivered Guaranty Joinder Agreements, Security Joinder Agreements
and Pledge Joinder Agreements, to the extent applicable, as required by Section 7.11 of the Credit Agreement, (ii) the Borrower shall have delivered a Pledge Agreement Supplement with respect to its interest in Ebix Consulting,
Inc., and (iii) the Administrative Agent shall have received all other documents required pursuant to Section 7.11, to the extent applicable, with respect to the Specified Acquisitions, including, without limitation, all
certificated Equity Interests with accompanying stock powers for any new Subsidiary acquired pursuant to a Specified Acquisition; 
 (c)
after giving effect to this Amendment (and giving effect to any Credit Extension to occur substantially simultaneously with such effectiveness and the increase in the Aggregate Revolving Commitments), as of the Amendment Effective Date, no Default
or Event of Default shall have occurred and be continuing; and 
 (d) after giving effect to this Amendment, the Borrower shall be in
compliance, on a pro forma basis (as provided in Section 1.3 of the Credit Agreement) with the financial covenants set forth in Section 8.7 of the Credit Agreement as of the Amendment Effective Date; 

(e) all fees and expenses payable to the Administrative Agent (including the fees and expenses of counsel to the Administrative Agent to the
extent invoiced prior to the date hereof) shall have been paid in full (without prejudice to final settling of accounts for such fees and expenses). 

 8. Reaffirmation. Each Credit Party (a) acknowledges and consents to all of the terms
and conditions of this Amendment, (b) affirms all of its obligations under the Credit Documents, and (c) agrees that this Amendment and all documents executed in connection herewith do not operate to reduce or discharge any Credit
Party’s obligations under the Credit Documents. 
 9. Miscellaneous. 

(a) Nothing in this Amendment is intended (or shall be construed) to constitute the consent of the Administrative Agent or any Lender to any
other transaction or the waiver by the Administrative Agent or any Lender of any Default or Event of Default, except as expressly provided herein. 

(b) Except as herein expressly amended, all terms, covenants and provisions of the Credit Agreement and each other Credit Document are and
shall remain in full force and effect. All references in any Credit Document to the “Credit Agreement” or “this Agreement” (or similar terms intended to reference the Credit Agreement) shall henceforth refer to the Credit
Agreement as amended by this Amendment. This Amendment shall be deemed incorporated into, and a part of, the Credit Agreement. 
 (c) This
Amendment shall be binding upon and inure to the benefit of the parties hereto, each other Lender and each other Credit Party, and their respective successors and assigns. 

(d) THIS AMENDMENT IS SUBJECT TO THE PROVISIONS OF SECTIONS 11.13 AND 11.14 OF THE CREDIT AGREEMENT RELATING TO GOVERNING LAW,
VENUE AND WAIVER OF RIGHT TO TRIAL BY JURY, THE PROVISIONS OF WHICH ARE BY THIS REFERENCE INCORPORATED HEREIN IN FULL. 
 (e) This Amendment
may be executed in counterparts (and by different parties hereto in different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract. This Amendment and the other Credit
Documents constitute the entire contract among the parties relating to the subject matter hereof and supersede any and all previous agreements and understandings, oral or written, relating to the subject matter hereof. Except as provided in
Section 7, this Amendment shall become effective when it shall have been executed by the Administrative Agent and when the Administrative Agent shall have received counterparts hereof that, when taken together, bear the signatures of
each of the other parties required to be a party hereto. Delivery of an executed counterpart of a signature page of this Amendment by telecopy or other electronic imaging means shall be effective as delivery of a manually executed counterpart of
this Amendment. This Amendment may not be amended except in accordance with the provisions of Section 11.4 of the Credit Agreement. 

(f) If any provision of this Amendment or the other Credit Documents is held to be illegal, invalid or unenforceable, (a) the legality,
validity and enforceability of the remaining provisions of this Amendment and the other Credit Documents shall not be affected or impaired thereby and (b) the parties shall endeavor in good faith negotiations to replace the illegal, invalid or
unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the illegal, invalid or unenforceable provisions. The invalidity of a provision in a particular jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction. 

 (g) The Borrower agrees to pay, in accordance with and subject to the limitations in
Section 11.2 of the Credit Agreement, all reasonable and documented out-of-pocket expenses incurred by the Administrative Agent and its Affiliates in connection with the preparation, execution, delivery, administration of this Amendment
and the other instruments and documents to be delivered hereunder. 
 (h) This Amendment shall constitute a “Credit Document”
under and as defined in the Credit Agreement. 
 [Signature Pages Follow.] 

 IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed as of the
date first above written. 
 BORROWER: 
  

							
		 	EBIX, INC., as the Borrower
			
		 	By:	 	 /s/ Robin Raina

		 	Name:	 	 Robin Raina

		 	Title:	 	 President and CEO

			
	GUARANTORS:	 		 	EBIX.COM, INTERNATIONAL, INC., as a Guarantor
				
		 		 	By:	 	 /s/ Robin Raina

		 		 	Name:	 	 Robin Raina

		 		 	Title:	 	 President and CEO

			
		 		 	EBIX CONSULTING, INC., as a Guarantor
				
		 		 	By:	 	 /s/ Robin Raina

		 		 	Name:	 	 Robin Raina

		 		 	Title:	 	 President and CEO

			
		 		 	VERTEX, INCORPORATED, as a Guarantor
				
		 		 	By:	 	 /s/ Robin Raina

		 		 	Name:	 	 Robin Raina

		 		 	Title:	 	 President and CEO

  
 EBIX, Inc.

 Signature Pages 

Amendment No. 1 to Credit Agreement and Waiver 

							
	ADMINISTRATIVE AGENT	 		 		 	
	AND COLLATERAL AGENT:	 		 	REGIONS BANK, as Administrative Agent and Collateral Agent
				
		 		 	By:	 	 /s/ Steven M. Hamil

		 		 	Name:	 	 Steven M. Hamil

		 		 	Title:	 	 Senior Vice President

  
 EBIX, Inc.

 Signature Pages 

Amendment No. 1 to Credit Agreement and Waiver 

							
	LENDERS:	 		 	 REGIONS BANK,
 as a Lender, the
Issuing Bank and the Swingline Lender

				
		 		 	By:	 	 /s/ Steven M. Hamil

		 		 	Name:	 	 Steven M. Hamil

		 		 	Title:	 	 Senior Vice President

  
 EBIX, Inc.

 Signature Pages 

Amendment No. 1 to Credit Agreement and Waiver 

							
		 		 	 MUFG UNION BANK, N.A.,
 as a
Lender

				
		 		 	By:	 	 /s/ Miho Shindo

		 		 	Name:	 	 Miho Shindo

		 		 	Title:	 	 Associate

  
 EBIX, Inc.

 Signature Pages 

Amendment No. 1 to Credit Agreement and Waiver 

							
		 		 	 SILICON VALLEY BANK,
 as a
Lender

				
		 		 	By:	 	 /s/ Russell Follansbee

		 		 	Name:	 	 Russell Follansbee

		 		 	Title:	 	 Vice President

  
 EBIX, Inc.

 Signature Pages 

Amendment No. 1 to Credit Agreement and Waiver 

							
		 		 	 FIFTH THIRD BANK,
 as the Joining
Lender

				
		 		 	By:	 	 /s/ Holly Sims

		 		 	Name:	 	 Holly Sims

		 		 	Title:	 	 Vice President

  
 EBIX, Inc.

 Signature Pages 

Amendment No. 1 to Credit Agreement and Waiver 

 Annex I 

(to Amendment No. 1 to Credit Agreement and Waiver) 

Appendix A – Lenders, Revolving Commitments and Revolving Commitment Percentages 

 

									
	 Lender
	  	Revolving Commitment	 	  	Revolving Commitment
Percentage	 
	 Regions Bank
	  	$	75,000,000.00	  	  	 	39.473684210	% 
	 MUFG Union Bank, N.A.
	  	$	50,000,000.00	  	  	 	26.315789474	% 
	 Silicon Valley Bank
	  	$	40,000,000.00	  	  	 	21.052631579	% 
	 Fifth Third Bank
	  	$	25,000,000.00	  	  	 	13.157894737	% 
		  	  
	  
	 	  	  
	  
	 
	 Totals
	  	$	190,000,000.00	  	  	 	100.000000000	% 
		  	  
	  
	 	  	  
	  
	 

  
 Annex IExhibit 10.3

 

JDS UNIPHASE CORPORATION

1998 EMPLOYEE STOCK PURCHASE PLAN
 as Amended and Restated on January 16, 2015

 

I.                                        PURPOSE

 

The JDS Uniphase Corporation 1998 EMPLOYEE STOCK PURCHASE PLAN (the “Plan”) is intended to provide eligible employees of the Company and one or more of its Corporate Affiliates with the opportunity to acquire a proprietary interest in the Company through participation in a plan designed to qualify as an employee stock purchase plan under Section 423 of the Internal Revenue Code (the “Code”).  The Plan was originally amended on November 9, 2001 and subsequently amended and restated on July 31, 2002, November 10, 2005, November 16, 2007 and June 24, 2009.  This amendment and restatement of the Plan was made on January 16, 2015 and shall be effective for offerings made under the Plan commencing on or after February 1, 2015.

 

II.                                   DEFINITIONS

 

For purposes of administration of the Plan, the following terms shall have the meanings indicated:

 

Compensation means the (i) regular base salary paid to a Participant by one or more Participating Companies during such individual’s period of participation in the Plan, plus (ii) any amounts contributed by the Corporation or any Corporate Affiliate pursuant to a salary reduction agreement which are not includible in the gross income of the Participant by reason of Code Sections 402(e)(3) or 125, plus (iii) all of the following amounts to the extent paid in cash: overtime payments, bonuses, commissions, profit-sharing distributions and other incentive-type payments.  However, Eligible Earnings shall not include any contributions (other than those excludible from the Participant’s gross income under Code Sections 402(e)(3) or 125) made on the Participant’s behalf by the Corporation or any Corporate Affiliate to any deferred compensation plan or welfare benefit program now or hereafter established.

 

Board means the Board of Directors of the Company.

 

Company means JDS Uniphase Corporation, a Delaware corporation, and any corporate successor to all or substantially all of the assets or voting stock of JDS Uniphase Corporation, which shall by appropriate action adopt the Plan.

 

Corporate Affiliate means any company which is either the parent corporation or a subsidiary corporation of the Company (as determined in accordance with Section 424 of the Code), including any parent or subsidiary corporation which becomes such after the Effective Date.

 

Effective Date means August 1, 1998.  However, should any Corporate Affiliate become a Participating Company in the Plan after such applicable date, then such entity shall have a designated separate Effective Date with respect to its employee-Participants.

 

Employee means any person who is regularly engaged, for a period of more than 20 hours per week and more than 5 months per calendar year, in the rendition of personal services to the Company or any other Participating Company for earnings considered wages under Section 3121(a) of the Code.  For purposes of the Plan, a person’s employment with the Company or a Participating Company terminates and the person ceases to be an Employee on the date on which such person ceases to provide continuous active service to the Company or Participating Company. In jurisdictions requiring notice in advance of an effective termination of an employee’s employment, an employee’s continuous active service shall be deemed terminated upon the actual cessation of the active performance of duties or responsibilities in providing services to the Company or a Participating Company, notwithstanding any required notice period that must be fulfilled or pay in lieu of notice or severance pay that must be provided before a termination as an employee can otherwise become effective under applicable laws, regardless of whether such notice has been fulfilled or pay in lieu of notice or severance pay has been provided. Further, and notwithstanding anything else in the Plan, a person’s employment with the Company or a Participating Company terminates and the person ceases to be an Employee on the date that he or she is notified that his or her employment is terminated for cause or for just cause.  The terms “termination of employment” or “cessation of Employee status” or similar terms have meaning corresponding to this definition of “Employee.”

 

 

Participant means any Employee of a Participating Company who is actively participating in the Plan.

 

Participating Company means the Company and such Corporate Affiliate or Affiliates as may be designated from time to time by the Board.

 

Plan Administrator means either the Board or a Committee of the Board that is responsible for administration of the Plan.

 

Purchase Period means, effective February 1, 2006 and thereafter, each six-month period commencing on (1) any February 1 and ending on the subsequent July 31, or (2) commencing on August 1 and ending on the subsequent January 31; provided, however, that the Plan Administrator may establish prior to the commencement of any Purchase Period, a different duration for such Purchase Period or different commencing or ending dates for such Purchase Period; provided that no Purchase Period may have a duration exceeding six (6) months.  If the first or last day of a Purchase Period is not a day on which the principal stock exchange or quotation system on which the Stock is then listed is open for trading, the Company shall specify the trading day that will be deemed the first or last day, as the case may be, of the Purchase Period.

 

Stock means shares of the common stock of the Company.

 

III.                              ADMINISTRATION

 

(a) The Plan shall be administered by the Plan Administrator which shall have full and exclusive discretionary authority to construe, interpret and apply the terms of the Plan, to determine eligibility and to adjudicate all disputed claims filed under the Plan.  Every finding, decision and determination made by the Plan Administrator shall, to the full extent permitted by applicable law, be final and binding upon all persons.

 

(b) No member of the Committee while serving as such shall be eligible to participate in the Plan.

 

IV.                               PURCHASE PERIODS

 

(a)   Stock shall be offered for purchase under the Plan through a series of Purchase Periods established by the Plan Administrator until such time as (i) the maximum number of shares of Stock available for issuance under the Plan shall have been purchased or (ii) the Plan shall have been sooner terminated, discontinued, or suspended in accordance with Article X or Article XI.

 

(b)   The Participant shall be granted a separate purchase right for each Purchase Period in which he/she participates.  The purchase right shall be granted on the first day of the Purchase Period and shall be automatically exercised on the last day of such Purchase Period provided such purchase right remains outstanding on such date.

 

(c)   The acquisition of Stock through participation in the Plan for any Purchase Period shall neither limit nor require the acquisition of Stock by the Participant in any subsequent Purchase Period, subject to the limitations of Sections V, VII, and VIII hereof.

 

(d)   Under no circumstances shall any purchase rights granted under the Plan be exercised, nor shall any shares of Stock be issued hereunder, until such time as (i) the Plan shall have been approved by the Company’s stockholders and (ii) the Company shall have complied with all applicable requirements of the Securities Act of 1933 (as amended), all applicable listing requirements of any securities exchange on which the Stock is listed and all other applicable requirements established by law or regulation.

 

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V.                                    ELIGIBILITY AND PARTICIPATION

 

(a)   Every Employee of a Participating Company shall be eligible to participate in the Plan on the first day of the first Purchase Period following the Employee’s commencement of service with the Company or any Corporate Affiliate, but in no event shall participation commence prior to the Effective Date.

 

(b)   In order to participate in the Plan for a particular Purchase Period, the Employee must complete the enrollment forms prescribed by the Plan Administrator (including a purchase agreement and a payroll deduction authorization) and file such forms with the Plan Administrator (or its designate) prior to the commencement date of the Purchase Period.

 

(c)   The payroll deduction authorized by a Participant for purposes of acquiring Stock under the Plan may be any multiple of 1% of Compensation paid to the Participant during the relevant Purchase Period, up to a maximum of 10%.  The deduction rate so authorized shall continue in effect for the entire Purchase Period unless the Participant shall, prior to the end of the Purchase Period for which the purchase right is in effect, reduce the rate by filing the appropriate form with the Plan Administrator (or its designate).  The reduced rate shall become effective as soon as practicable following the filing of such form.  Each Participant shall be permitted such a rate reduction only one (1) time in each Purchase Period.  The reduced rate shall continue in effect for the entire Purchase Period and for each subsequent Purchase Period, unless the Participant shall, prior to the commencement of any subsequent Purchase Period, designate a different rate (up to the 10% maximum) by filing the appropriate form with the Plan Administrator (or its designate).  The new rate shall become effective for the first Purchase Period commencing after the filing of such form.  Payroll deductions, however, will automatically cease upon the termination of the Participant’s purchase right in accordance with Section VII(d) or (e) below.

 

(d)   With respect to Participants who are not United States residents, the amount deducted for each such Participant shall be deducted from the Participant’s salary in the currency in which such Participant is compensated and shall be converted to United States dollars by using the United States buying rate as reported by Bloomberg for the purchase of United States dollars with such currency on the day Stock is purchased for the Participant’s account.

 

VI.                               STOCK SUBJECT TO PLAN

 

(a)   The Stock purchasable by Participants under the Plan shall, solely in the Board’s discretion, be made available from either authorized but unissued Stock or from reacquired Stock, including shares of Stock purchased on the open market.  The total number of shares of Stock which may be issued under the Plan shall not exceed Fifty Million (50,000,000) shares (subject to adjustment under Section VI(b)).  With respect to any amendment to increase the total number of shares of Stock under the Plan, the Plan Administrator shall have discretion to disallow the purchase of any increased shares of Stock for the Purchase Period in existence at the time of such increase.  If the Plan Administrator determines that on a given purchase date the number of shares with respect to which purchase rights are to be exercised may exceed the number of shares then available for sale under the Plan, the Plan Administrator may make a pro-rata allocation of the shares remaining available for purchase on such purchase date in as uniform a manner as shall be practicable and as it shall determine to be equitable and continue such Purchase Period.  Any amount remaining in a Participant’s payroll account following such pro-rata allocation shall be promptly refunded to the Participant and shall not be carried over to any future Purchase Period.

 

(b)   In the event any change is made to the Stock purchasable under the Plan by reason of any recapitalization, stock dividend, stock split, combination of shares or other change affecting the outstanding common stock of the Company as a class without receipt of consideration, then appropriate adjustments shall be made by the Plan Administrator to the class and maximum number of shares purchasable under the Plan, the class and maximum number of shares purchasable per Participant under any purchase right outstanding at the time or purchasable per Participant over the term of the Plan, and the class and number of shares and the price per share of the Stock subject to outstanding purchase rights held by Participants under the Plan.

 

VII.                          PURCHASE RIGHTS

 

An Employee who participates in the Plan for a particular Purchase Period shall have the right to purchase Stock on the purchase date for such Purchase Period upon the terms and conditions set forth below and shall execute a purchase agreement embodying such terms and conditions and such other provisions (not inconsistent with the Plan) as the Plan Administrator may deem advisable.

 

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(a)   Purchase Price.  The purchase price per share shall be the lesser of (i) 95% of the fair market value of a share of Stock on the date on which the purchase right is granted or (ii) 95% of the fair market value of a share of Stock on the date the purchase right is exercised.  For purposes of determining such fair market value (and for all other valuation purposes under the Plan), the fair market value per share of Stock on any date shall be the closing selling price per share (or the closing bid, if no sales are reported on such date), as officially quoted on any established stock exchange or a national market system, including without limitation The Nasdaq National Market or The Nasdaq SmallCap Market of The Nasdaq Stock Market, on the date of determination (or, if no closing selling price or closing bid was reported on that date, as applicable, on the last trading date such closing selling price or closing bid was reported), as reported in The Wall Street Journal or such other source as the Plan Administrator deems reliable;

 

(b)   Number of Purchasable Shares.  The number of shares purchasable by a Participant on a purchase date for a Purchase Period shall be the number of whole shares obtained by dividing the amount collected from the Participant through payroll deductions during the Purchase Period, together with any amount carried over from the prior Purchase Period pursuant to the provisions of Section VII(f), by the purchase price in effect for such purchase date.  However, the maximum number of shares purchasable by the Participant pursuant to any one outstanding purchase right shall not exceed 4,000 shares (subject to adjustment under Section VI(b)).

 

Under no circumstances shall purchase rights be granted under the Plan to any Employee if such Employee would, immediately after the grant, own (within the meaning of Section 424(d) of the Code), or hold outstanding options or other rights to purchase, stock possessing 5% or more of the total combined voting power or value of all classes of stock of the Company or any of its Corporate Affiliates.

 

(c)   Payment.  Payment for Stock purchased under the Plan shall be effected by means of the Participant’s authorized payroll deductions.  Such deductions shall begin on the first pay day coincident with or immediately following the commencement date of the relevant Purchase Period and shall terminate with the pay day ending with or immediately prior to the last day of the Purchase Period.  The amounts so collected shall be credited to the Participant’s individual account under the Plan, but no interest shall be paid on the balance from time to time outstanding in the account.  The amounts collected from a Participant may be commingled with the general assets of the Company and may be used for general corporate purposes.

 

(d)   Termination of Purchase Rights.

 

(i)    A Participant may, prior to any purchase date, terminate his/her outstanding purchase right under the Plan by filing the prescribed notification form with the Plan Administrator (or its designate).  The Company will then refund the payroll deductions which the Participant made with respect to the terminated purchase right, and no further amounts will be collected from the Participant with respect to such terminated right.

 

(ii)   The termination shall be irrevocable with respect to the particular Purchase Period to which it pertains and shall also require the Participant to re-enroll in the Plan (by making a timely filing of a new purchase agreement and payroll deduction authorization) if the Participant wishes to resume participation in a subsequent Purchase Period.

 

(e)   Termination of Employment.  If a Participant ceases Employee status during any Purchase Period, then the Participant’s outstanding purchase right under the Plan shall immediately terminate and all sums previously collected from the Participant and not previously applied to the purchase of stock during such Purchase Period shall be promptly refunded.  However, should the Participant die or become permanently disabled while in Employee status, then the Participant or the person or persons to whom the rights of the deceased Participant under the Plan are transferred by will or by the laws of descent and distribution (the “successor”) will have the election, exercisable at any time prior to the purchase date for the Purchase Period in which the Participant dies or becomes permanently disabled, to (i) withdraw all of the funds in the Participant’s payroll account at the time of his/her cessation of Employee status or (ii) have such funds held for purchase of shares of Stock on the purchase date.  If the Plan Administrator (or its designate) does not receive such an election prior to the purchase date for such Purchase Period, the successor will be deemed to have elected to withdraw all of the funds in the Participant’s payroll account at the time of his/her cessation of Employee status and such funds shall be distributed to the successor as soon as administratively practicable.  In no event, however, shall any further payroll deductions be added to the Participant’s account following his/her cessation of Employee status.

 

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For purposes of the Plan, a Participant shall be deemed to be permanently disabled if he/she is unable, by reason of any medically determinable physical or mental impairment expected to result in death or to be of continuous duration of at least twelve (12) months, to engage in any substantial gainful employment.

 

(f)    Stock Purchase.  Outstanding purchase rights shall be automatically exercised as provided in Section IV(b).  The exercise shall be effected by applying the amount credited to the Participant’s account on the last date of the Purchase Period to the purchase of whole shares of Stock (subject to the limitations on the maximum number of purchasable shares set forth in Section VII(b)) at the purchase price in effect for such purchase date.  Any amount remaining in the Participant’s account after such exercise representing a fractional share of Stock shall be held for the purchase of Stock on the next purchase date; provided, however, that any other amount not applied to the purchase of Stock at the end of a Purchase Period shall be refunded promptly after the close of the Purchase Period, including any amount not applied to the purchase of stock by reason by the Section VII(b) or the Section VIII limitations on the maximum number of purchasable shares.

 

(g)   Rights as Stockholder.  A Participant shall have no rights as a stockholder with respect to shares covered by the purchase rights granted to the Participant under the Plan until the shares are actually purchased on the Participant’s behalf in accordance with Section VII(f).  No adjustments shall be made for dividends, distributions or other rights for which the record date is prior to the date of such purchase.

 

(h)   Assignability.  No purchase rights granted under the Plan shall be assignable or transferable by a Participant except by will or by the laws of descent and distribution, and the purchase rights shall, during the lifetime of the Participant, be exercisable only by such Participant.

 

(i)    Merger or Liquidation of Company.  In the event the Company or its stockholders enter into an agreement to dispose of all or substantially all of the assets or outstanding capital stock of the Company by means of a sale, merger or reorganization in which the Company will not be the surviving corporation (other than a reorganization effected primarily to change the State in which the Company is incorporated) or in the event the Company is liquidated, then all outstanding purchase rights under the Plan shall automatically be exercised immediately prior to such sale, merger, reorganization or liquidation by applying all sums previously collected from Participants pursuant to their payroll deductions in effect for such rights to the purchase of whole shares of Stock, subject, however, to the applicable limitations of Section VII(b) and Section VIII.

 

VIII.                     ACCRUAL LIMITATIONS

 

(a)   No Participant shall be entitled to accrue rights to acquire Stock pursuant to any purchase right under this Plan if and to the extent such accrual, when aggregated with (I) Stock rights accrued under other purchase rights outstanding under this Plan and (II) similar rights accrued under other employee stock purchase plans (within the meaning of Section 423 of the Code) of the Company or its Corporate Affiliates, would otherwise permit such Participant to purchase more than $25,000 worth of stock of the Company or any Corporate Affiliate (determined on the basis of the fair market value of such stock on the date or dates such rights are granted to the Participant) for each calendar year such rights are at any time outstanding.

 

(b)   For purposes of applying the accrual limitations of Section VIII(a), the right to acquire Stock pursuant to each purchase right outstanding under the Plan shall accrue as follows:

 

(i)   The right to acquire Stock under each such purchase right shall accrue as and when the purchase right first becomes exercisable during the calendar year as provided in Section IV(b).

 

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(ii)   No right to acquire Stock under any outstanding purchase right shall accrue to the extent the Participant has already accrued in the same calendar year the right to acquire $25,000 worth of Stock (determined on the basis of the fair market value on the date or dates of grant) pursuant to that purchase right or one or more other purchase rights which may have been held by the Participant during such calendar year.

 

(iii)   If by reason of the Section VIII(a) limitations, the Participant’s outstanding purchase right does not accrue for any Purchase Period, then the payroll deductions which the Participant made during that Purchase Period with respect to such purchase right shall be promptly refunded.

 

(c)   In the event there is any conflict between the provisions of this Article VIII and one or more provisions of the Plan or any instrument issued thereunder, the provisions of this Article VIII shall be controlling.

 

IX.                              STATUS OF PLAN UNDER FEDERAL TAX LAWS

 

(a)   The Plan is designed to qualify as an employee stock purchase plan under Section 423 of the Code.  However, after the Effective Date, the Plan Administrator may, at its discretion, cease to administer the Plan as a qualified employee stock purchase plan under Code Section 423.  Accordingly, share purchases effected under the Plan at any time after the Plan ceases to be administered as a qualified employee stock purchase plan under Code Section 423 (whether pursuant to purchase rights granted before or after the Plan ceases to be qualified) shall result in taxable income to each Participant equal to the excess of (i) the fair market value of the purchased shares on the purchase date over (ii) the purchase price paid for such shares.

 

(b)   To the extent required by law, the Company’s obligation to deliver shares to the Participant upon the exercise of any outstanding purchase right shall be subject to the Participant’s satisfaction of all applicable federal, state and local income and employment and similar non-United States tax withholding requirements.

 

X.                                   AMENDMENT AND TERMINATION

 

(a)   The Board may from time to time alter, amend, suspend or discontinue the Plan; provided, however, that no such action shall become effective prior to the exercise of outstanding purchase rights at the end of the Purchase Period in which such action is authorized.  To the extent necessary to comply with Code Section 423, the Company shall obtain stockholder approval in such a manner and to such a degree as required.

 

(b)   The Company shall have the right, exercisable in the sole discretion of the Plan Administrator, to terminate the Plan immediately following the end of a Purchase Period.  Should the Company elect to exercise its right to terminate the Plan, then the Plan shall terminate in its entirety, and no further purchase rights shall thereafter be granted, and no further payroll deductions shall thereafter be collected, under the Plan.

 

XI.                              GENERAL PROVISIONS

 

(a)   The Plan shall terminate upon the earlier of (i) August 1, 2018 or (ii) the date on which all shares available for issuance under the Plan shall have been sold pursuant to purchase rights exercised under the Plan.

 

(b)   All costs and expenses incurred in the administration of the Plan shall be paid by the Company.

 

(c)   Neither the action of the Company in establishing the Plan, nor any action taken under the Plan by the Plan Administrator, nor any provision of the Plan itself shall be construed so as to grant any person the right to remain in the employ of the Company or any of its Corporate Affiliates for any period of specific duration, and such person’s employment may be terminated at any time, with or without cause.  Termination of the Plan, or of a person’s status as an Employee or a Participant under the Plan, shall not constitute a constructive dismissal of the Participant’s employment with the Company or a Participating Company.  Further, no person shall have any rights or entitlement under the Plan after such person has ceased to be an Employee for purposes of the Plan or a Participant in the Plan.

 

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(d)   Governing Law.  The Plan is to be construed in accordance with and governed by the internal laws of the State of California (as permitted by Section 1646.5 of the California Civil Code, or any similar successor provision) without giving effect to any choice of law rule that would cause the application of the laws of any jurisdiction other than the internal laws of the State of California to the rights and duties of the parties, except to the extent the internal laws of the State of California are superseded by the laws of the United States.  Should any provision of the Plan be determined by a court of law to be illegal or unenforceable, the other provisions shall nevertheless remain effective and shall remain enforceable.

 

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