Document:

Exhibit 10.12 Form of Indemnification Agreement

Exhibit 10.12

FORM OF INDEMNIFICATION AGREEMENT

THIS INDEMNIFICATION AGREEMENT (this “Agreement”) is made this ____ day of ____, 20__, between Sigma Labs, Inc., a Nevada corporation (the “Company”), and _________, an individual (“Indemnitee”). 

RECITALS

WHEREAS, Indemnitee is either a member of the board of directors (“Board” or “Board of Directors”), an officer, an employee or an agent of the Company, or more than one of such positions, or is serving at the request of the Company as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, and in such capacity or capacities is performing a valuable service for the Company;

WHEREAS, the Company has adopted bylaws (“Bylaws”) providing for the indemnification of the officers, directors, employees and agents of the Company or individuals serving at the request of the Company as directors, officers, employees or agents of another corporation, partnership, joint venture, trust or other enterprise (“Covered Persons”); 

WHEREAS, the Bylaws and Nevada Revised Statute (“NRS”) Sections 78.751 and 78.7502 (the “State Statutes”) specifically provide that they are not exclusive, and thereby contemplate that agreements may be entered into between the Company and a Covered Person with respect to indemnification of such Covered Person; 

WHEREAS, Indemnitee is willing to serve, to continue to serve, and to take on additional service for and on behalf of the Company on the condition that Indemnitee is indemnified as set forth in this Agreement; 

WHEREAS, it is intended that Indemnitee shall be paid promptly by the Company all amounts necessary to effectuate in full the indemnity provided in this Agreement; and  

WHEREAS, to induce Indemnitee to continue to serve as a director, officer, employee or agent, the Company has determined and agreed to enter into this Agreement with Indemnitee.  

NOW, THEREFORE, in consideration of Indemnitee’s continued service as a director or officer of the Company after the date hereof, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Company and Indemnitee hereby agree as follows:

AGREEMENT

1.

Indemnification of Indemnitee.  The Company hereby agrees to hold harmless and indemnify Indemnitee to the fullest extent authorized or permitted by the provisions of the State Statutes, or any successor statute or amendment thereof, or any other statutory provisions authorizing or permitting such indemnification that is adopted after the date of this Agreement.  

2.

Additional Indemnity.  Subject only to the exclusions set forth in Section 3 of this Agreement, the Company hereby further agrees to hold harmless, indemnify and defend Indemnitee:

2.1

Against any and all expenses (including fees for attorneys, accountants, private investigators, court and transcript costs, fees and expenses of witnesses, travel expenses and all other like disbursements or expenses reasonably incurred by or for Indemnitee), judgments, damages, fines, penalties and amounts paid in settlement (including all interest assessments and other charges paid or payable in connection with or in respect of such judgment, fines, penalties, or amounts paid in settlement) actually and reasonably incurred by or for Indemnitee in connection with any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (including an action by or in the right of the Company) (a “Covered Action”) to which Indemnitee is made a party as a result of the fact that at the time of the act or omission which is the subject matter of such Covered Action the Indemnitee was a director, officer, employee or agent of the Company, and

2.2

Otherwise to the fullest extent as may be provided to Indemnitee by the Company under the non-exclusivity provisions of Article VII of the Bylaws of the Company and the State Statutes.  The provisions of this Agreement are in addition to, and not in limitation of, the provisions of such Article VII and the State Statutes.

3.

Limitations on Additional Indemnity.  No indemnity pursuant to Sections 1 and 2 of this Agreement shall be paid by the Company to the extent that:

1

3.1

Payment therefor is actually made to Indemnitee under a valid and collectible insurance policy or policies, except with respect to any excess amount due to Indemnitee beyond the amount of payment to Indemnitee under such insurance policy or policies.  Notwithstanding the availability of such insurance policy or policies, Indemnitee also may claim indemnification from the Company pursuant to this Agreement by assigning to the Company in writing any claims of Indemnitee under such insurance policy or policies to the extent of the amount Indemnitee is paid by the Company; 

3.2

Indemnitee is indemnified by the Company otherwise than pursuant to this Agreement;

3.3

Final judgment is rendered against Indemnitee for the payment of dividends or other distributions to stockholders of the Company in violation of the provisions of Subsection 2 of Nevada Revised Statutes § 78.300, as amended; 

3.4

Final judgment is rendered against Indemnitee for an accounting of profits made from the purchase or sale by Indemnitee of securities of the Company pursuant to the provisions of Section 16(b) of the Securities Exchange Act of 1934, as amended (the “Act”), or other similar provisions of any federal, state or local statutory law;

3.5

Indemnitee’s conduct giving rise to the claim for indemnification is finally adjudged by a court of competent jurisdiction to have been a breach of fiduciary duty which involved intentional misconduct, fraud or a knowing violation of the law; and/or

3.6

Except as otherwise provided in this Agreement, in connection with all or any part of a suit or other proceeding which is initiated or maintained by or on behalf of Indemnitee, or any suit or other proceeding by Indemnitee against the Company or its directors, officers, employees or other agents, unless (a) such indemnification is expressly required by Nevada law; (b) the suit or other proceeding was expressly authorized by an official act of the Board of Directors of the Company or (c) such indemnification is provided by the Company, in its sole discretion, pursuant to the powers vested in the Company under Nevada law.  

4.

Continuation of Indemnity.  All agreements and obligations of the Company contained in this Agreement shall continue during the period Indemnitee is a Covered Person, and shall continue thereafter for so long as Indemnitee shall be subject to any possible claim or threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that Indemnitee was a Covered Person.  

5.

Advancement of Expenses.  In the event Indemnitee incurs costs or expenses in connection with the defense of any such civil, criminal, administrative or investigative action, suit or proceeding (including any costs or expenses incurred for any appeal therefor), the Company agrees to pay such costs or expenses as they are incurred and in advance of the final disposition of the action, suit or proceeding within 30 calendar days of submission of bills or vouchers for such costs or expenses, provided that Indemnitee delivers to Company prior to such payment a written undertaking by or on behalf of Indemnitee to repay the amount paid by the Company if it is ultimately determined by a court of competent jurisdiction that Indemnitee is not entitled to be indemnified by the Company.  By such undertaking, Indemnitee agrees to reimburse the Company for all amounts paid by the Company in defending such civil, criminal, administrative or investigative action, suit or proceeding against Indemnitee, including amounts paid in settlement, in the event and only to the extent that it is ultimately determined by a court of competent jurisdiction that Indemnitee is not entitled to be indemnified by the Company for such expenses under the provisions of the State Statute, Bylaws, this Agreement or otherwise.  However, in the case of an action brought against Indemnitee by the Company pursuant to the provisions of Section 16(b) of the Act, or other similar provisions of any federal, state or local statutory law for an accounting of profits made from the purchase or sale by Indemnitee of securities of the Company, Indemnitee’s costs and expenses will not be advanced unless such advancement is approved by the Board of Directors by a majority vote of a quorum consisting of directors who are not parties to the action, suit or proceeding, or, if such a quorum cannot be obtained, by independent legal counsel in a written opinion that such indemnification is proper in the circumstances. 

6.

Presumptions and Effect on Certain Proceedings.  Upon making a request for indemnification, Indemnitee shall be presumed to be entitled to indemnification under this Agreement.  The termination of any action, suit or proceeding by judgment, order, settlement, arbitration award, conviction or by a plea of nolo contendere or its equivalent shall not affect this presumption except as may be provided in Section 3 of this Agreement.

7.

Notification and Defense of Claim.  Promptly after receipt by Indemnitee of notice of the commencement of any action, suit or proceeding, if a request with respect thereto is to be made against the Company under this Agreement, Indemnitee shall notify the Company of the commencement thereof; but the failure by Indemnitee to notify the Company will not relieve the Company of any liability which it may have to Indemnitee under this Agreement or otherwise.  With respect to any such action, suit or proceeding as to which Indemnitee notifies the Company as required herein:

	
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7.1

The Company shall be entitled to participate therein at its own expense; and

7.2

Except as otherwise provided below, to the extent that it may wish, the Company, jointly with any other indemnifying party similarly notified, shall be entitled to assume the defense of Indemnitee with counsel reasonably satisfactory to Indemnitee.  After notice from the Company to Indemnitee of its election to assume the defense of Indemnitee in the action, suit or proceeding, the Company will not be liable to Indemnitee under this Agreement for any legal or other expenses subsequently incurred by Indemnitee in connection with the defense thereof, other than reasonable costs of investigation or as otherwise provided below.  Indemnitee shall have the right to employ its own counsel in such action, suit or proceeding, but the fees and expenses of such counsel incurred after notice from the Company of its assumption of the defense shall be at the sole expense of Indemnitee unless (a) the employment of counsel by Indemnitee at the Company’s expense has been authorized in writing by the Company; (b) Indemnitee shall have reasonably concluded, upon advice of counsel experienced in such matters, that there may be a conflict of interest between the Company and Indemnitee in the conduct of the defense of such action; or (c) the Company shall not in fact have employed counsel to assume the defense of such action, suit or proceeding.  In each such instance set forth in (a) through (c) of this Section 7.2, the reasonable cost of Indemnitee’s counsel shall be borne by the Company.  Notwithstanding the foregoing, the Company shall not be entitled to assume the defense of any action, suit or proceeding brought against Indemnitee by or on behalf of the Company or as to which Indemnitee shall have reasonably made the conclusion provided in (b) above.  

7.3

The Company shall not be liable to indemnify Indemnitee under this Agreement for any amounts paid in settlement of any action or claim effected without the Company’s prior written consent.  The Company shall not settle any action or claim in any manner that would impose any penalty or limitation on Indemnitee without Indemnitee’s prior written consent.  Neither the Company nor Indemnitee will unreasonably withhold consent to any proposed settlement.  

8.

Enforcement

8.1

The Company expressly confirms and agrees that it has entered into this Agreement and assumed the obligations imposed on the Company hereby in order to induce Indemnitee to continue as a Covered Person, and acknowledges that Indemnitee is relying on this Agreement in continuing in such capacity.

8.2

In the event Indemnitee is required to bring any action to enforce his or her rights or to collect moneys due under this Agreement, the Company shall advance Indemnitee all of Indemnitee’s reasonable fees and expenses in bringing and pursuing such action.  Indemnitee shall be responsible for reimbursement to the Company of such advance in the event that Indemnitee is not successful in such action.

9.

No Employment Rights.  Nothing in this Agreement is intended to confer on Indemnitee any right to continue in the employ of the Company for any period of time or to interfere with or otherwise restrict in any way the rights of the Company or of Indemnitee, which rights are hereby expressly reserved by each, to terminate Indemnitee’s service at any time and for any reason, with or without cause, except as may be provided otherwise in an agreement, if any, between the Company and Indemnitee.  

10.

Severability.  Each of the provisions of this Agreement are separate and distinct and independent of one another, so that if any provision of this Agreement shall be held by a court of competent jurisdiction to be invalid or unenforceable for any reason, such invalidity or unenforceability shall not effect the validity or enforceability of the other provisions of this Agreement.  If any provision of this Agreement is so held to be invalid or unenforceable, the parties agree that the court making such determination shall have the power to amend such provision or to delete specific words or phrases so that such provision shall then be enforceable to the fullest extent permitted by law unless such change is contrary to the intent of the parties hereto. 

11.

Subrogation.  In the event of payment to Indemnitee under this Agreement, the Company shall be subrogated to the extent of the amount of such payment to all rights of recovery of Indemnitee, who shall execute all papers required and shall do everything that may be necessary or reasonable to secure such rights, including, without limitation, the execution of such documents necessary or reasonable to enable the Company to effectively bring suit to enforce such rights.

12.

Governing Law.  This Agreement shall be governed by, and construed in accordance with, the laws of the State of Nevada without resort to conflict of laws principles. 

13.

Binding Effect; Amendment.  This Agreement shall be binding on the parties, their heirs, personal representatives, successors and assigns, and shall inure to the benefit of Indemnitee, his or her heirs, personal representatives and assigns, and to the benefit of the Company, its successors and assigns.  No amendment, modification, termination or cancellation of this Agreement shall be effective unless in a writing signed by both parties.

	
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14.

Notices.  All notices, requests, demands and other communications hereunder shall be in writing and shall be deemed to have been duly given (a) when delivered by hand and receipted for by the party to whom said communication shall have been directed or (b), if mailed by certified or registered mail with postage prepaid, on the third business day after the date on which said communication is so mailed and addressed to the appropriate party at the following address:

		
	If to Indemnitee:

	                                                                        

                                                                        

                                                                        

	If to the Company:

	Sigma Labs, Inc. 

3900 Paseo del Sol

Santa Fe, NM 87507

Attention:  President and Chief Executive Officer

A party may change its address by delivering notice of such change in the manner set forth in this Section 14.

IN WITNESS WHEREOF, the parties hereto have executed this Indemnification Agreement as of the date first above written.

		
	“Indemnitee”

  

	“Company”

By:

Name:

 

Title:

	
	4Exhibit 10.1

 

BANCORP OF NEW JERSEY, INC.
 SEVERANCE POLICY

 

This Severance Policy (“Policy”) is intended to provide separation benefits to certain employees of Bancorp of New Jersey, Inc., a New Jersey corporation (the “Company”) who are separated from service involuntarily and was adopted by the Company effective July 26, 2016 (the “Effective Date”). This Severance Policy supersedes all prior plans, programs or arrangements providing severance or separation benefits to any Eligible Employee, as defined below. This Policy is intended to be a “severance pay plan” within the meaning of the Department of Labor Regulation Section 2510.3-2(b).

 

Definitions

 

The following definitions apply for purposes of this Policy:

 

“Eligible Employee” means any person, who as of his or her Severance Date: (i) is actively employed by the Company, (ii) who has been designated to be an Eligible Employee under this Policy and is named on Exhibit B, and (iii) is not party to any written agreement with the Company or any of its subsidiaries which expressly provides for severance benefits.

 

“Base Salary” means the Eligible Employee’s annual base salary at the rate in effect on the Severance Date regardless of the form of payment of such base salary, including any pre-tax contributions made by the Eligible Employee pursuant to an arrangement maintained by the Company under Sections 125 or 401(k) of the Code but excluding amounts such as incentive bonuses, overtime pay, equity-based compensation or any other compensation.

 

“Cause” has the meaning ascribed to it in the Plan.

 

“Change in Control” has the meaning ascribed to it in the Plan.

 

“Change in Control Period” shall mean the period commencing on the first date a Change in Control occurs and ending three (3) months following such date.

 

“Compensation Committee” means the compensation committee of the Company’s board of directors.

 

“Plan” means the Bancorp of New Jersey, Inc. 2011 Equity Incentive Plan, as it may be amended from time to time.

 

“Separation from Service” means the termination of an Eligible Employee’s service with the Company. A termination of an Eligible Employee’s service with the Company will not be a “Separation from Service” unless such termination also constitutes a “separation from service” pursuant to Treasury Regulation Section 1.409A-1(h).

 

“Severance Date” means the date an Eligible Employee has a Separation from Service.

 

Eligibility for Benefits

 

An Eligible Employee shall be eligible for severance benefits hereunder if he or she has a Separation from Service; provided however that an Eligible Employee will not be eligible for benefits if (i) he or she is separated from service by the Company for Cause or (ii) he or she resigns from service with the Company for any reason. Notwithstanding anything herein to the contrary, an otherwise Eligible Employee will lose

 

 

eligibility for benefits if he or she fails to continue as a satisfactory employee until released by the Company in accordance with its business needs or the Company has sold assets or otherwise transferred operations to another employer, and that employer has offered the Employee a position that provides a rate of compensation substantially similar to that received by the Employee from the Company immediately prior to his or her termination. The Compensation Committee has the sole discretion to determine an Employee’s eligibility hereunder.

 

Amount of Severance Benefits

 

The amount of benefits to which an Eligible Employee may be entitled depends on the applicable class in which the Eligible Employee is employed as identified on Exhibit A (as changed from time to time by the Company), and whether or not the Separation from Service occurs during the Change in Control Period; provided however that no severance benefits will be paid hereunder unless such termination by the Company without Cause would be considered a Separation from Service.

 

Payment of Severance Benefits

 

All cash severance payments made pursuant to Exhibit A to the Policy will be paid in installments over the applicable period pursuant to the Company’s standard payroll practices. All severance payments hereunder will be subject to tax and other required withholding in accordance with the Company’s standard payroll practices. Subject to the following paragraph, severance payments will commence as soon as is administratively feasible after the Company has received the Release, executed by the Eligible Employee and such Release has become irrevocable, the return of Company property described below and the execution of any other forms or agreements required by the Company. Notwithstanding the foregoing, to the extent compliance with the requirements of Treas. Reg. § 1.409A-3(i)(2) (or any successor provision) is necessary to avoid the application of an additional tax under Code Section 409A to payments due to the Eligible Employee upon or following his or her separation from service, then notwithstanding any other provision of this Policy (or any otherwise applicable plan, policy, agreement or arrangement), any such payments that are otherwise due within six months following the Eligible Employee’s separation from service will be deferred (without interest) and paid to the Eligible Employee in a lump sum immediately following that six month period.

 

Execution of Release and Return of Company Property

 

All benefits payable under the Policy are conditioned on: (a) the Eligible Employee’s execution and delivery to the Company and the expiration of all applicable statutory revocation periods, by the 60th day following the effective date of his or her cessation of employment, of a general release of claims against the Company and its affiliates in a form that is acceptable to the Company (the “Release”); and (b) return of all property owned by the Company or any affiliate to the Company. The benefits will be paid or provided as soon as administratively practicable after the Release becomes irrevocable, provided that if the 60 day period described above begins in one taxable year and ends in a second taxable year such payments or benefits shall not commence until the second taxable year.

 

Right to Amend or Terminate

 

The Company reserves the right to amend this Policy, in whole or in part, or discontinue or terminate this Policy at any time; provided, however, that any such amendment, discontinuance or termination shall not affect any right of any Eligible Employee to claim benefits for any Separation from Service occurring prior to the date of such amendment, discontinuance or termination.

 

2

 

Administration; Benefit Claims Procedure

 

This Policy is intended to be a “severance pay arrangement” within the meaning of Section 3(2)(B)(i) of ERISA and is intended to meet the descriptive requirements of a plan constituting a “severance pay plan” within the meaning of regulations published by the Secretary of Labor at Title 29, Code of Federal Regulations § 2510.3-2(b).  The Compensation Committee shall act as the Policy administrator, as defined in Section 3(16)(A) of ERISA.  The administrator shall have the absolute right, discretion and authority to determine eligibility for severance pay benefits and the amount of any severance pay due under this Policy, to interpret the terms and provisions of this Policy, and to review and decide all claims or any other dispute regarding the rights of employees relative to this Policy.  All such determinations and interpretations made by the administrator will be final and binding on all parties and will be entitled to the maximum deference permitted by law.  The Compensation Committee may delegate any of its duties hereunder to such person or persons from time to time as it may designate.  As of Effective Date, the Compensation Committee has delegated its authority to determine eligibility to participate under this Policy, and to revise Exhibit A and Exhibit B accordingly, to the Company’s Chief Executive Officer; provided, however, that the Chief Executive Officer is not authorized to select for participation under this Policy any officer whose compensation must be determined, or recommended to the board of directors for determination, by the Compensation Committee under applicable rules of a national securities exchange.

 

In accordance with Section 503 of ERISA and the regulations of the Secretary of Labor prescribed thereunder:

 

(i)                                     All claims for benefits under the Policy should be directed to the Compensation Committee.  Claims must be made in writing, should be executed and should include enough information to determine their validity.

 

(ii)                                  A decision will be issued no later than 90 days after receiving enough information to process the claim, unless special circumstances require an additional 90 days for processing. If a claim is entirely or partly denied, the employee will receive a written notice that will include the reason for the denial, the portion of the Policy on which the denial is based, and an explanation of the claim review procedure.  If the employee’s claim was incomplete, the notice will say what additional information is needed.  If the employee does not receive a response within 180 days after the Compensation Committee receives his or her claim, the claim is deemed denied.

 

(iii)                               An employee is entitled to appeal a claim that is entirely or partly denied for a full and fair review.  The employee’s appeal for a review must be made in writing and must be sent within 60 days after the employee receives a notice of the denial of his or her claim, or within 60 days after the claim is deemed denied.  The employee will receive a written notice of the decision on his or her appeal within 60 days after the request for review is received, unless special circumstances apply.

 

No legal action for benefits under this Policy may be brought until the claimant (a) has submitted a written application for benefits in accordance with the procedures described above, (b) has been notified by the Compensation Committee that the application is denied (or the application is deemed denied due to the Compensation Committee’s failure to act on it within the established time period), (c) has filed a written request for a review of the application in accordance with the appeal procedure described above and (d) has been notified in writing that the Compensation Committee has denied the appeal (or the appeal is deemed to be denied due to the Compensation Committee’s failure to take any action on the claim within the time prescribed above).

 

3

 

Parachute Payments

 

Notwithstanding anything herein to the contrary, in the event that any payment or benefit received or to be received by an Eligible Employee, whether pursuant to the terms of this Policy or any other  plan, arrangement or agreement with the Company or any of its affiliates (all such payments and benefits, “Total Payments”) would be subject (in whole or part) to any excise tax imposed under Section 4999 of the Code (the “Excise Tax”), then the payment or benefit to be received by the Eligible Employee shall be reduced to the extent necessary so that no portion of the Total Payments is subject to the Excise Tax.  In the case of a reduction in the Total Payments pursuant to this paragraph, the Total Payments will be reduced in the following order: (i) first, any future cash payments (if any) shall be reduced (if necessary, to zero); (ii) second, any current cash payments shall be reduced (if necessary, to zero); and (iii) third, all non-cash payments.

 

Section 409A

 

It is intended that payments and benefits under this Policy not subject Eligible Employees to taxation under Section 409A of the Code and, accordingly, this Policy shall be interpreted and administered to be in compliance therewith.  To the maximum extent permitted under Section 409A of the Code and its corresponding regulations, the cash severance benefits payable under this Agreement are intended to meet the requirements of the short-term deferral exemption under Section 409A of the Code and the “separation pay exception” under Treas. Reg. §1.409A-1(b)(9)(iii).  For purposes of the application of Treas. Reg. § 1.409A-1(b)(4) (or any successor provision), each payment in a series of payments to the Executive will be deemed a separate payment.

 

Affordable Care Act

 

Any health care continuation benefits deliverable under this Policy to an Eligible Employee shall automatically cease in the event that such benefit would violate and result in the imposition of penalties under the Patient Protection and Affordable Care Act of 2010 and related regulations and guidance promulgated thereunder.

 

Governing Law

 

The Policy shall be construed as administered and enforced in accordance with ERISA and, where appropriate, the laws of the State of New Jersey.

 

4

 

EXHIBIT A

 

CLASS A

 

	
Termination by Company Without Cause:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Cash Severance
    	
 
    	
Six (6) months
    
	
 
    	
 
    	
 
    
	
Health Care Continuation
    	
 
    	
Subsidized COBRA coverage equal to the Company-paid   portion for active employees for six (6) months*
    
	
 
    	
 
    	
 
    
	
Equity Vesting Acceleration
    	
 
    	
None pursuant to this Policy; provided however   equity will vest pursuant to other contractual obligations, if any
    

 

* Such subsidized coverage shall cease as of the date that the Eligible Employee and his spouse become eligible for group medical coverage from another employer (whether or not such coverage actually elected) or as of such other date that continuation coverage under COBRA ceases for any reason

 

	
Termination by Company Without Cause within   Change in Control Period**:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Cash Severance
    	
 
    	
Six (6) months
    
	
 
    	
 
    	
 
    
	
Health Care Continuation
    	
 
    	
Subsidized COBRA coverage equal to the Company-paid   portion for active employees for six (6) months ***
    
	
 
    	
 
    	
 
    
	
Equity Vesting Acceleration
    	
 
    	
None pursuant to this Policy; provided however   equity will vest pursuant to other contractual obligations, if any
    

 

** Benefits payable in connection with a termination without Cause within Change in Control Period are in lieu of any other benefits payable under this Policy

 

*** Such subsidized coverage shall cease as of the date that the Eligible Employee and his spouse become eligible for group medical coverage from another employer (whether or not such coverage actually elected) or as of such other date that continuation coverage under COBRA ceases for any reason

 

5

 

CLASS B

 

	
Termination by Company Without Cause:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Cash Severance
    	
 
    	
Twelve (12) months
    
	
 
    	
 
    	
 
    
	
Health Care Continuation
    	
 
    	
Subsidized COBRA coverage equal to the Company-paid   portion for active employees for twelve (12) months*
    
	
 
    	
 
    	
 
    
	
Equity Vesting Acceleration
    	
 
    	
None pursuant to this Policy; provided however   equity will vest pursuant to other contractual obligations, if any
    

 

* Such subsidized coverage shall cease as of the date that the Eligible Employee and his spouse become eligible for group medical coverage from another employer (whether or not such coverage actually elected) or as of such other date that continuation coverage under COBRA ceases for any reason

 

	
Termination by Company Without   Cause within Change in Control Period**:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Cash Severance
    	
 
    	
Twelve (12) months
    
	
 
    	
 
    	
 
    
	
Health Care Continuation
    	
 
    	
Subsidized COBRA coverage equal to the Company-paid   portion for active employees for twelve (12) months ***
    
	
 
    	
 
    	
 
    
	
Equity Vesting Acceleration
    	
 
    	
None pursuant to this Policy; provided however   equity will vest pursuant to other contractual obligations, if any
    

 

** Benefits payable in connection with a termination without Cause within Change in Control Period are in lieu of any other benefits payable under this Policy

 

*** Such subsidized coverage shall cease as of the date that the Eligible Employee and his spouse become eligible for group medical coverage from another employer (whether or not such coverage actually elected) or as of such other date that continuation coverage under COBRA ceases for any reason

 

6

 

EXHIBIT C

 

This Exhibit is provided to enable this document to serve as, and to satisfy the requirements applicable to, a summary plan description.  This addendum sets forth a participant’s rights under ERISA and provides general information regarding the Policy.

 

Rights under ERISA
 (Employee Retirement Income Security Act of 1974, as amended)

 

ERISA gives a participant under the Policy certain rights and protections.  A participant is entitled to:

 

·                                                                                          Review, without charge, at the plan administrator’s office and at other specified locations such as work sites, all Policy documents, and copies of all papers filed by the plan administrator with the U.S. Department of Labor and available at the Public Disclosure Room of the Employee Benefits Security Administration, including the Policy’s latest annual report (Form 5500 Series).

 

·                                                                                          Receive copies of all documents governing the operation of the plan and copies of the latest annual report (Form 5500 Series) and an updated summary plan description.  The Administrator may make a reasonable charge for the copies.

 

·                                                                                          Receive a summary of the Policy’s annual financial report.  ERISA requires the administrator to give each participant a copy of this summary annual report.

 

Prudent Actions by Fiduciaries

 

In addition to creating rights for Policy participants, ERISA imposes duties upon the people who are responsible for the operation of the Policy.  The people who operate the Policy are called “fiduciaries.”  They have a duty to act prudently and in the interest of each participant under the Policy and their beneficiaries.  No one, including the participant’s employer, union, or any other person, may fire the participant or otherwise discriminate against the participant in any way to prevent him or her from obtaining a welfare benefit or exercising his or her rights under ERISA.

 

Enforcing Participants’ Rights

 

If a participant’s claim for a welfare benefit is denied or ignored, in whole or in part, that Participant has a right to know why this was done, to obtain copies of documents relating to the decision without charge, and to appeal any denial, all within certain time schedules.

 

Under ERISA, there are steps a participant can take to enforce his or her rights. For instance, if the participant requests a copy of Policy documents or the latest annual report from the administrator and does not receive them within 30 days, the participant may file suit in a federal court.  In that case, the court may require the administrator to provide the materials and pay the participant up to $110 a day until he or she receives them, unless the materials were not sent because of reasons beyond the administrator’s control.  If a participant has a claim for benefits which is denied or ignored, in whole or in part, the participant may file suit in a state or federal court.  Of course, the Company would suggest that the participant follow the claims procedure provided in the Policy before suing.

 

If it should happen that Policy fiduciaries misuse the Policy’s money, or if a participant is discriminated against for asserting his or her rights, the participant may ask for help from the U.S. Department of Labor or may sue in a federal court. The court will decide who has to pay court costs and legal fees. If the participant wins, the court may order the person the participant sued to pay these costs and fees. If the participant loses, the court may order the participant to pay these costs and fees (for example, if it finds the participant’s claim is frivolous).

 

7

 

Assistance with Questions

 

If any participant has any questions about the Policy, that participant should contact the plan administrator.  If a participant has any questions about this statement or about his or her rights under ERISA, or if he or she needs assistance in obtaining documents from the administrator, the participant should contact the nearest office of the Pension and Welfare Benefits Administration, U.S. Department of Labor, listed in the telephone directory or the Division of Technical Assistance and Inquiries, Employee Benefits Security Administration, U.S. Department of Labor, 200 Constitution Avenue N.W., Washington, D.C. 20210.  The participant may also obtain certain publications about his or her rights and responsibilities under ERISA by calling the publications hotline of the Employee Benefits Security Administration.

 

8

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