Document:

Exhibit 10.9

 

VEECO INSTRUMENTS INC.
 2016 EMPLOYEE STOCK PURCHASE PLAN

 

21.                               Purpose.  The purpose of the Plan is to provide Employees of the Company and its Designated Parents or Subsidiaries with an opportunity to purchase Common Stock of the Company through accumulated payroll deductions.  It is the intention of the Company to have the Plan qualify as an “employee stock purchase plan” under Section 423 of the Code and the applicable regulations thereunder.  The provisions of the Plan, will be construed so as to extend and limit participation in a manner consistent with the requirements of that section of the Code.

 

22.                               Definitions.  As used herein, the following definitions apply:

 

“Administrator” means either the Board or a committee of the Board that is responsible for the administration of the Plan as is designated from time to time by resolution of the Board.

 

“Applicable Laws” means the legal requirements relating to the administration of employee stock purchase plans, if any, under applicable provisions of federal securities laws, state corporate and securities laws, the Code and the applicable regulations thereunder, the rules of any applicable stock exchange or national market system, and the rules of any foreign jurisdiction applicable to participation in the Plan by residents therein.

 

“Board” means the Board of Directors of the Company.

 

“Code” means the Internal Revenue Code of 1986, as amended.

 

“Common Stock” means the common stock of the Company.

 

“Company” means Veeco Instruments Inc., a Delaware corporation.

 

“Compensation” means, unless otherwise determined by the Administrator, an Employee’s United States payroll base salary from the Company or one or more Designated Parents or Subsidiaries, including such amounts of base salary as are deferred by the Employee: (i) under a qualified cash or deferred arrangement described in Section 401(k) of the Code; or (ii) to a plan qualified under Section 125 of the Code.  Unless otherwise determined by the Administrator, “Compensation” does not include overtime, bonuses, commissions, annual awards, other incentive payments, reimbursements or other expense allowances, fringe benefits (cash or non-cash), moving expenses, deferred compensation, contributions (other than contributions described in the first sentence) made on the Employee’s behalf by the Company or one or more Designated Parents or Subsidiaries under any employee benefit or welfare plan now or hereafter established, and any other payments not specifically referenced in the first sentence.

 

“Corporate Transaction” means any of the following transactions, provided, however, that the Administrator will determine under parts (iv) and (v) whether multiple transactions are related, and its determination is final, binding and conclusive:

 

(i)                                     a merger or consolidation of the Company in which the Company is not the surviving entity, except for a transaction the principal purpose of which is to change the jurisdiction in which the Company is incorporated;

 

 

(ii)                                  the sale, transfer or other disposition of all or substantially all of the assets of the Company;

 

(iii)                               the complete liquidation or dissolution of the Company;

 

(iv)                              any reverse merger or series of related transactions culminating in a reverse merger (including, but not limited to, a tender offer followed by a reverse merger) in which the Company is the surviving entity but (A) the shares of Common Stock outstanding immediately prior to such merger are converted or exchanged by virtue of the merger into other property, whether in the form of securities, cash or otherwise, or (B) in which securities possessing more than fifty percent (50%) of the total combined voting power of the Company’s outstanding securities are transferred to a person or persons different from those who held such securities immediately prior to such merger or the initial transaction culminating in such merger, but excluding any such transaction or series of related transactions that the Administrator determines is not a Corporate Transaction; or

 

(v)                                 acquisition in a single transaction or series of related transactions by any person or related group of persons (other than the Company or by a Company-sponsored employee benefit plan) of beneficial ownership (within the meaning of Rule 13d-3 of the Exchange Act) of securities possessing more than fifty percent (50%) of the total combined voting power of the Company’s outstanding securities but excluding any such transaction or series of related transactions that the Administrator determines is not a Corporate Transaction.

 

“Designated Parents or Subsidiaries” means the Parents or Subsidiaries, which have been designated by the Administrator from time to time as eligible to participate in the Plan.

 

“Effective Date” means the date of the Plan’s adoption by the Board.

 

“Employee” means any individual, including an officer or director, who is an employee of the Company or a Designated Parent or Subsidiary for purposes of Section 423 of the Code.  For purposes of the Plan, the employment relationship will be treated as continuing intact while the individual is on sick leave or other leave of absence approved by the individual’s employer.  Where the period of leave exceeds three (3) months and the individual’s right to reemployment is not guaranteed either by statute or by contract, the employment relationship will be deemed to have terminated on the day that is three (3) months and one (1) day following the start of such leave, for purposes of determining eligibility to participate in the Plan.

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

 

“Exercise Date” means the last day of each Purchase Period.

 

“Fair Market Value” means, as of any date, the value of Common Stock determined as follows:

 

(i)                                     If the Common Stock is listed on one or more established stock exchanges, including without limitation, the Nasdaq Stock Market, its Fair Market Value will be the closing sales price for such stock (or the closing bid, if no sales were reported) as quoted on the principal exchange or system on which the Common Stock is listed (as determined by the Administrator) on the date of determination (or, if no closing sales price or closing bid was reported on that date, as applicable, on the last trading date such closing sales price or closing bid was reported), as reported in such source as the Administrator deems reliable;

 

(ii)                                  If the Common Stock is regularly quoted on an automated quotation system (including the OTC Bulletin Board) or by a recognized securities dealer, but selling prices are

 

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not reported, its Fair Market Value will be the mean between the high bid and low asked prices for the Common Stock on the date of determination (or, if no such prices were reported on that date, on the last date such prices were reported), as reported in such source as the Administrator deems reliable; or

 

(iii)                               In the absence of an established market for the Common Stock of the type described in (i) and (ii), above, its Fair Market Value thereof will be determined by the Administrator in good faith.

 

“New Exercise Date” has the meaning set forth in Section 18(b).

 

“Offer Period” means an Offer Period established pursuant to Section 24 hereof.

 

“Offering” means an offer under this Plan of an Option that may be exercised during an Offer Period.  For purposes of the Plan, all Employees eligible to participate pursuant to Section 3 will be deemed to participate in the same Offering unless the Administrator otherwise determines that Employees of the Company or one or more Designated Parents or Subsidiaries will be deemed to participate in separate Offerings, in which case the Offerings will be considered separate even if the dates of each such Offering are identical and the provisions of the Plan will separately apply to each Offering.  To the extent permitted by Section 1.423-2(a)(1) of the Treasury regulations issued under Section 423 of the Code, the terms of each Offering need not be identical provided that the terms of the Plan and the Offering together satisfy Sections 1.423-2(a)(2) and (a)(3) of such Treasury regulations.

 

“Offering Date” means the first day of each Offer Period.

 

“Option” means, with respect to each Offer Period, a right to purchase shares of Common Stock on the Exercise Date for such Offer Period in accordance with the terms and conditions of the Plan.

 

“Parent” means a “parent corporation” of the Company, whether now or hereafter existing, as defined in Section 424(e) of the Code.

 

“Participant” means an Employee of the Company or Designated Parent or Subsidiary who has enrolled in the Plan as set forth in Section 5(a).

 

“Plan” means this Veeco Instruments Inc. Employee Stock Purchase Plan.

 

“Purchase Period” means, unless otherwise determined by the Administrator, a period of approximately six months.

 

“Purchase Price” means, unless determined otherwise by the Administrator, an amount equal to eighty-five percent (85%) of the Fair Market Value of a share of Common Stock on the Offering Date or on the Exercise Date, whichever is lower.

 

“Reserves” means, as of any date, the sum of: (1) the number of shares of Common Stock covered by each then outstanding Option under the Plan which has not yet been exercised; and (2) the number of shares of Common Stock which have been authorized for issuance under the Plan but not then subject to an outstanding Option.

 

“Subsidiary” means a “subsidiary corporation” of the Company, whether now or hereafter existing, as defined in Section 424(f) of the Code.

 

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23.                               Eligibility.

 

(a)                                 General.  Subject to the further limitations in Sections 3(b) and 3(c), any individual who is an Employee on a given Offering Date will be eligible to participate in the Plan for the Offer Period commencing with such Offering Date.

 

(b)                                 Limitations on Grant and Accrual.  Notwithstanding any provisions of the Plan to the contrary, no Employee will be granted an Option under the Plan: (i) if, immediately after the grant, such Employee (taking into account stock owned by any other person whose stock would be attributed to such Employee pursuant to Section 424(d) of the Code) would own stock and/or hold outstanding options to purchase stock possessing five percent (5%) or more of the total combined voting power or value of all classes of stock of the Company or of any Parent or Subsidiary; or (ii) which permits the Employee’s rights to purchase stock under all employee stock purchase plans of the Company and its Parents or Subsidiaries to accrue at a rate which exceeds Twenty-Five Thousand Dollars (US$25,000) worth of stock (determined at the Fair Market Value of the shares at the time such Option is granted) for each calendar year in which such Option is outstanding at any time.  The determination of the accrual of the right to purchase stock will be made in accordance with Section 423(b)(8) of the Code and the regulations thereunder.

 

(c)                                  Other Limits on Eligibility.  Notwithstanding Subsection (a), above, unless otherwise determined prior to the applicable Offer Date, the following Employees will not be eligible to participate in the Plan for any relevant Offer Period: (i) Employees whose customary employment is 20 hours or less per week; (ii) Employees whose customary employment is for 5 months or less in any calendar year; (iii) Employees who have not been employed for such continuous period preceding the Offering Date as the Administrator may require, but in no event will the required period of continuous employment be equal to or greater than 2 years; and (iv) Employees who are citizens or residents of a non-U.S. jurisdiction (without regard to whether he or she is also a citizen of the United States or a resident alien (within the meaning of Section 7701(b)(1)(A) of the Code)) if his or her participation is prohibited under the laws of the applicable non-U.S. jurisdiction or if complying with the laws of the applicable non-U.S. jurisdiction would cause the Plan or an Offering to violate Section 423 of the Code.

 

24.                               Offer Periods.

 

The Plan will be implemented through overlapping or consecutive Offer Periods until such time as (i) the maximum number of shares of Common Stock available for issuance under the Plan have been purchased or (ii) the Plan has been sooner terminated in accordance with Section 19 hereof.  The maximum duration of an Offer Period is twenty-seven (27) months. Unless otherwise determined by the Administrator, the Plan will be implemented through successive Offer Periods of six (6) months’ duration beginning on each January 1 and July 1 following the Effective Date.

 

A Participant will be granted a separate Option for each Offer Period in which he or she participates.  The Option will be granted on the Offering Date and will be automatically exercised in successive installments on the Exercise Dates ending within the Offer Period.

 

Except as specifically provided herein, the acquisition of Common Stock through participation in the Plan for any Offer Period will neither limit nor require the acquisition of Common Stock by a Participant in any subsequent Offer Period.

 

25.                               Participation.

 

(a)                                 An eligible Employee may become a Participant in the Plan by submitting an authorization of payroll deduction (using such form or method (including electronic forms) as the

 

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Administrator may designate from time to time) as of a date in advance of the Offering Date for the Offer Period in which such participation will commence, as required by the Administrator for all eligible Employees with respect to a given Offer Period.

 

(b)                                 Payroll deductions for a Participant will apply to Compensation paid via payroll during the Offer Period, unless sooner terminated by the Participant as provided in Section 30.

 

26.                               Payroll Deductions.

 

(a)                                 At the time a Participant enrolls in the Plan, the Participant will elect to have payroll deductions made during the Offer Period in amounts between one percent (1%) and not exceeding fifteen percent (15%) of the Compensation which the Participant receives during the Offer Period.

 

(b)                                 All payroll deductions made for a Participant will be credited to the Participant’s account under the Plan and will be withheld in whole percentages only.  A Participant may not make any additional payments into such account.

 

(c)                                  A Participant may discontinue participation in the Plan as provided in Section 30, or may decrease the rate of payroll deductions during the Offer Period by submitting notice of a change of status (using such form or method (including electronic forms) as the Administrator may designate from time to time) authorizing a decrease in the payroll deduction rate.  Any decrease in the rate of a Participant’s payroll deductions will be effective as soon as administratively practicable following the date of the request.  A Participant’s payroll deduction authorization (as modified by any change of status notice) will remain in effect for successive Offer Periods unless terminated as provided in Section 30.  The Administrator will be authorized to limit the number of payroll deduction rate changes during any Offer Period.

 

(d)                                 Notwithstanding the foregoing, to the extent necessary to comply with Section 423(b)(8) of the Code and Sections 23(b) and 7 herein, a Participant’s payroll deductions may be decreased to zero percent (0%).  Payroll deductions will recommence at the rate provided in such Participant’s payroll deduction authorization, as amended, when permitted under Section 423(b)(8) of the Code and Section 23(b), unless such participation is sooner terminated by the Participant as provided in Section 30.

 

27.                               Grant of Option.  On the Offering Date, each Participant will be granted an Option to purchase (at the applicable Purchase Price) shares of Common Stock; provided: (i) that such Option is subject to the limitations set forth in Sections 23(b), 26 and 32; (ii) until otherwise determined by the Administrator, the maximum number of shares of Common Stock a Participant will be permitted to purchase in any Offer Period is 2,500 shares, subject to adjustment as provided in Section 18; and (iii) that such Option is subject to such other terms and conditions (applied on a uniform and nondiscriminatory basis), as the Administrator determines from time to time.  Exercise of the Option will occur as provided in Section 28, unless the Participant has withdrawn pursuant to Section 30, and the Option, to the extent not exercised, will expire on the last day of the Offer Period with respect to which such Option was granted.  Notwithstanding the foregoing, shares subject to the Option may only be purchased with accumulated payroll deductions credited to a Participant’s account in accordance with Section 26.  In addition, to the extent an Option is not exercised on each Exercise Date, the Option will lapse and thereafter cease to be exercisable.

 

28.                               Exercise of Option.  Unless a Participant withdraws from the Plan as provided in Section 30, the Participant’s Option for the purchase of shares of Common Stock will be exercised automatically on each Exercise Date, by applying the accumulated payroll deductions in the

 

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Participant’s account to purchase the number of shares subject to the Option by dividing such Participant’s payroll deductions accumulated prior to such Exercise Date and retained in the Participant’s account as of the Exercise Date by the applicable Purchase Price.  Any amount remaining in a Participant’s account following the purchase of shares on the Exercise Date due to the application of Section 423(b)(8) of the Code, or Sections 3 or 27, will be returned to the Participant and will not be carried over to the next Offer Period or Purchase Period.  A Participant’s Option to purchase shares hereunder is exercisable only by the Participant.

 

29.                               Delivery.  As soon as practicable after each Exercise Date, the Company shall arrange the delivery to each Participant of the shares acquired by the Participant on such Exercise Date; provided that the Company may deliver such shares to a broker designated by the Company that will hold such shares for the benefit of the Participant.  Shares to be delivered to a Participant under the Plan shall be registered, or held in an account, in the name of the Participant, or, if requested by the Participant, such other name or names as the Company may permit under rules established for the operation and administration of the Plan.

 

30.                               Withdrawal; Termination of Employment.

 

(a)                                 A Participant may, by giving notice to the Company (using such form or method (including electronic forms) as the Administrator may designate from time to time), either: (i) withdraw all but not less than all the payroll deductions credited to the Participant’s account and not yet used to exercise the Participant’s Option under the Plan; or (ii) terminate future payroll deductions, but allow accumulated payroll deductions to be used to exercise the Participant’s Option under the Plan at any time.  If the Participant elects withdrawal alternative (i) described above, all of the Participant’s payroll deductions credited to the Participant’s account will be paid to such Participant as soon as administratively practicable after receipt of notice of withdrawal, such Participant’s Option for the Offer Period will be automatically terminated, and no further payroll deductions for the purchase of shares will be made during the Offer Period.  If the Participant elects withdrawal alternative (ii) described above, no further payroll deductions for the purchase of shares will be made during the Offer Period, all of the Participant’s payroll deductions credited to the Participant’s account will be applied to the exercise of the Participant’s Option on the next Exercise Date (subject to Sections 23(b), 26, 27 and 32), and after such Exercise Date, such Participant’s Option for the Offer Period will be automatically terminated and all remaining accumulated payroll deduction amounts will be returned to the Participant.  If a Participant withdraws from an Offer Period, payroll deductions will not resume at the beginning of the succeeding Offer Period unless the Participant enrolls in such succeeding Offer Period.  The Administrator may, in its discretion and on a uniform and nondiscriminatory basis, specify further procedures for withdrawal.

 

(b)                                 Upon termination of a Participant’s employment relationship (as described in Section 0) prior to the next scheduled Exercise Date, the payroll deductions credited to such Participant’s account during the Offer Period but not yet used to exercise the Option will be returned to such Participant or, in the case of his/her death, to the person or persons entitled thereto under Section 34, and such Participant’s Option will be automatically terminated without exercise of any portion of such Option.

 

31.                               Interest.  No interest will accrue on the payroll deductions credited to a Participant’s account under the Plan.

 

32.                               Stock.

 

(a)                                 Subject to adjustment upon changes in capitalization of the Company as provided in Section 18, the maximum number of shares of Common Stock which will be made available for sale under the Plan is 750,000 shares.  If the Administrator determines that on a given

 

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Exercise Date the number of shares with respect to which Options are to be exercised may exceed: (x) the number of shares then available for sale under the Plan; or (y) the number of shares available for sale under the Plan on the Offering Date(s) of one or more of the Offer Periods in which such Exercise Date is to occur, the Administrator may make a pro rata allocation of the shares remaining available for purchase on such Offering Dates or Exercise Date, as applicable, and will either continue the Offer Period then in effect or terminate any one or more Offer Periods then in effect pursuant to Section 39, below. Such allocation method will be “bottom up,” with the result that all Option exercises for one (1) share will be satisfied first, followed by all exercises for two (2) shares, and so on, until all available shares have been exhausted.  Any amount remaining in a Participant’s payroll account following such allocation will be returned to the Participant and will not be carried over to any future Purchase Period or Offer Period, as determined by the Administrator.

 

(b)                                 A Participant will have no interest or voting right in shares covered by the Participant’s Option until such shares are actually purchased on the Participant’s behalf in accordance with the applicable provisions of the Plan.  No adjustment will be made for dividends, distributions or other rights for which the record date is prior to the date of such purchase.

 

(c)                                  Shares to be delivered to a Participant under the Plan will be registered in the name of the Participant, or as otherwise provided in Section 9.

 

33.                               Administration.  The Plan will be administered by the Administrator, which will have full and exclusive discretionary authority to construe, interpret and apply the terms of the Plan, to determine eligibility, to determine, with respect to each Offer Period, whether the Purchase Price will be determined as of (i) the Exercise Date or (ii) as of the Offering Date or the Exercise Date (whichever is lower), to adjudicate all disputed claims filed under the Plan, and to designate separate Offerings for the eligible Employees of the Company and one or more Designated Parents or Subsidiaries, in which case the Offerings will be considered separate even if the dates of each such Offering are identical and the provisions of the Plan will separately apply to each Offering.  Every finding, decision and determination made by the Administrator will, to the full extent permitted by Applicable Law, be final and binding upon all persons.

 

34.                               Designation of Beneficiary.

 

(a)                                 Each Participant will file a designation (using such form or method (including electronic forms) as the Administrator may designate from time to time) of a beneficiary who is to receive any shares and cash, if any, from the Participant’s account under the Plan in the event of such Participant’s death.  If a Participant is married and the designated beneficiary is not the spouse, spousal consent will be required for such designation to be effective.

 

(b)                                 Such designation of beneficiary may be changed by the Participant (and the Participant’s spouse, if any) at any time by written notice.  In the event of the death of a Participant and in the absence of a beneficiary validly designated under the Plan who is living (or in existence) at the time of such Participant’s death, the Company will deliver such shares and/or cash to the executor or administrator of the estate of the Participant, or if no such executor or administrator has been appointed (to the knowledge of the Administrator), the Administrator will deliver such shares and/or cash to the spouse (or domestic partner, as determined by the Administrator) of the Participant, or if no spouse (or domestic partner) is known to the Administrator, then to the issue of the Participant, such distribution to be made per stirpes (by right of representation), or if no issue are known to the Administrator, then to the heirs at law of the Participant determined in accordance with Section 47.

 

35.                               Transferability.  No payroll deductions credited to a Participant’s account, Options granted hereunder, or any rights with regard to the exercise of an Option or to receive shares under

 

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the Plan may be assigned, transferred, pledged or otherwise disposed of in any way (other than by will, the laws of descent and distribution, or as provided in Section 34) by the Participant.  Any such attempt at assignment, transfer, pledge or other disposition will be without effect, except that the Administrator may, in its sole discretion, treat such act as an election to withdraw funds from an Offer Period in accordance with Section 30.

 

36.                               Use of Funds.  All payroll deductions received or held by the Company under the Plan may be used by the Company for any corporate purpose, and the Company will not be obligated to segregate such payroll deductions or hold them exclusively for the benefit of Participants.  All payroll deductions received or held by the Company may be subject to the claims of the Company’s general creditors. Participants will have the status of general unsecured creditors of the Company.  Any amounts payable to Participants pursuant to the Plan will be unfunded and unsecured obligations for all purposes, including, without limitation, Title I of the Employee Retirement Income Security Act of 1974, as amended.  The Company will retain at all times beneficial ownership of any investments which the Company may make to fulfill its payment obligations hereunder.  Any investments or the creation or maintenance of any trust or any Participant account will not create or constitute a trust or fiduciary relationship between the Administrator, the Company or any Designated Parent or Subsidiary and a Participant, or otherwise create any vested or beneficial interest in any Participant or the Participant’s creditors in any assets of the Company or a Designated Parent or Subsidiary. The Participants will have no claim against the Company or any Designated Parent or Subsidiary for any changes in the value of any assets that may be invested or reinvested by the Company with respect to the Plan.

 

37.                               Reports.  Individual accounts will be maintained for each Participant in the Plan.  Statements of account will be given to Participants at least annually, which statements will set forth the amounts of payroll deductions, the Purchase Price, the number of shares purchased and the remaining cash balance, if any.

 

38.                               Adjustments Upon Changes in Capitalization; Corporate Transactions.

 

(a)                                 Adjustments Upon Changes in Capitalization.  Subject to any required action by the stockholders of the Company, the Administrator, in order to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under the Plan, will, in such manner as it may deem equitable, adjust the Reserves, the Purchase Price, the maximum number of shares that may be purchased in any Offer Period or Purchase Period, as well as any other terms that the Administrator determines require adjustment, for: (i) any increase or decrease in the number of issued shares of Common Stock resulting from a stock split, reverse stock split, stock dividend, combination or reclassification of the Common Stock; (ii) any other increase or decrease in the number of issued shares of Common Stock effected without receipt of consideration by the Company; or (iii) as the Administrator may determine in its discretion, any other transaction with respect to Common Stock, including a corporate merger, consolidation, acquisition of property or stock, separation (including a spin-off or other distribution of stock or property), reorganization, liquidation (whether partial or complete) or any similar transaction; provided, however, that conversion of any convertible securities of the Company will not be deemed to have been “effected without receipt of consideration.”  Such adjustment, if any, will be made by the Administrator and its determination will be final, binding and conclusive.  Except as the Administrator determines, no issuance by the Company of shares of stock of any class, or securities convertible into shares of stock of any class, will affect, and no adjustment by reason hereof will be made with respect to, the Reserves and the Purchase Price.

 

(b)                                 Corporate Transactions.  In the event of a proposed Corporate Transaction, each Option under the Plan will be assumed by such successor corporation or a parent or subsidiary of such successor corporation, unless the Administrator, in the exercise of its sole discretion and in

 

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lieu of such assumption, determines to shorten the Offer Period then in progress by setting a new Exercise Date (the “New Exercise Date”).  If the Administrator shortens the Offer Period then in progress in lieu of assumption in the event of a Corporate Transaction, the Administrator will notify each Participant in writing at least ten (10) business days prior to the New Exercise Date, that the Exercise Date for the Participant’s Option has been changed to the New Exercise Date and that either:

 

(i)                                     the Participant’s Option will be exercised automatically on the New Exercise Date, unless prior to such date the Participant has withdrawn from the Offer Period as provided in Section 30; or

 

(ii)                                  the Company will pay to the Participant on the New Exercise Date an amount in cash, cash equivalents, or property as determined by the Administrator that is equal to the excess, if any, of (x) the Fair Market Value of the shares subject to the Option over (y) the Purchase Price due had the Participant’s Option been exercised automatically under Subsection (b)(i) above.  In addition, all remaining accumulated payroll deduction amounts will be returned to the Participant.

 

(c)                                  For purposes of Section 38(b), an Option granted under the Plan will be deemed to be assumed if, in connection with the Corporate Transaction, the Option is replaced with a comparable Option with respect to shares of capital stock of the successor corporation or Parent thereof.  The determination of Option comparability will be made by the Administrator prior to the Corporate Transaction and its determination will be final, binding and conclusive on all persons.

 

39.                               Amendment or Termination.

 

(a)                                 The Administrator may at any time and for any reason terminate or amend the Plan.  Except as provided in Section 38, no such termination can adversely affect Options previously granted, provided that the Plan or any one or more Offer Periods then in effect may be terminated by the Administrator on any Exercise Date or by the Administrator establishing a new Exercise Date with respect to any Offer Period and/or Purchase Period then in progress if the Administrator determines that the termination of the Plan or one or more Offer Periods is in the best interests of the Company and its stockholders.  Except as provided in Section 38 and this Section 39, no amendment may make any change in any Option theretofore granted which adversely affects the rights of any Participant without the consent of affected Participants.  To the extent necessary to comply with Section 423 of the Code and any regulations thereunder (or any successor rule or provision or any other Applicable Law), the Company will obtain stockholder approval of any amendment in such a manner and to such a degree as required.

 

(b)                                 Without stockholder consent and without regard to whether any Participant rights may be considered to have been “adversely affected,” the Administrator will be entitled to limit the frequency and/or number of changes in the amount withheld during Offer Periods, change the length of Purchase Periods within any Offer Period, determine the length of any future Offer Period, determine whether future Offer Periods will be consecutive or overlapping, establish the exchange ratio applicable to amounts withheld in a currency other than U.S. dollars, establish or change Plan or per Participant limits on share purchases, establish additional terms, conditions, rules or procedures to accommodate the rules or laws of applicable foreign jurisdictions, permit payroll withholding in excess of the amount designated by a Participant in order to adjust for delays or mistakes in the Company’s processing of properly completed withholding elections, establish reasonable waiting and adjustment periods and/or accounting and crediting procedures to ensure that amounts applied toward the purchase of Common Stock for each Participant properly correspond with amounts withheld from the Participant’s Compensation, establish requirements for holding shares purchased pursuant to the Plan and establish such other limitations or procedures as the Administrator determines in its sole discretion advisable and which are consistent with the Plan,

 

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in each case to the extent consistent with the requirements of Code Section 423 and other Applicable Laws.

 

40.                               Notices.  All notices or other communications by a Participant to the Company under or in connection with the Plan will be deemed to have been duly given when received in the form specified by the Administrator at the location, or by the person, designated by the Administrator for the receipt thereof.

 

41.                               Conditions Upon Issuance of Shares.  Shares will not be issued with respect to an Option unless the exercise of such Option and the issuance and delivery of such shares pursuant thereto will comply with all Applicable Laws and will be further subject to the approval of counsel for the Company with respect to such compliance.  As a condition to the exercise of an Option, the Company may require the Participant to represent and warrant at the time of any such exercise that the shares are being purchased only for investment and without any present intention to sell or distribute such shares if, in the opinion of counsel for the Company, such a representation is required by any of the aforementioned Applicable Laws or is otherwise advisable.  In addition, no Options will be exercised or shares issued hereunder before the Plan has been approved by stockholders of the Company as provided in Section 43.

 

42.                               Term of Plan.  The Plan will become effective upon the earlier to occur of its adoption by the Board or its approval by the stockholders of the Company.  It will continue in effect for a term of ten (10) years unless sooner terminated under Section 39.

 

43.                               Stockholder Approval.  Continuance of the Plan will be subject to approval by the stockholders of the Company within twelve (12) months before or after the date the Plan is adopted.  Such stockholder approval will be obtained in the degree and manner required under Applicable Laws.  No shares of Common Stock offered for sale under the Plan may be sold until such stockholder approval is obtained, and notwithstanding any other Plan provision any Offer Period then open shall automatically terminate on the Exercise Date and all accumulated payroll deduction amounts will be returned to the Participants if such stockholder approval has not been obtained.

 

44.                               No Employment Rights.  The Plan does not, directly or indirectly, create any right for the benefit of any employee or class of employees to purchase any shares under the Plan, or create in any employee or class of employees any right with respect to continuation of employment by the Company or a Designated Parent or Subsidiary, and it will not be deemed to interfere in any way with such employer’s right to terminate, or otherwise modify, an employee’s employment at any time.

 

45.                               No Effect on Retirement and Other Benefit Plans.  Except as specifically provided in a retirement or other benefit plan of the Company or a Designated Parent or Subsidiary, participation in the Plan will not be deemed compensation for purposes of computing benefits or contributions under any retirement plan of the Company or a Designated Parent or Subsidiary, and will not affect any benefits under any other benefit plan of any kind or any benefit plan subsequently instituted under which the availability or amount of benefits is related to level of compensation.  The Plan is not a “Retirement Plan” or “Welfare Plan” under the Employee Retirement Income Security Act of 1974, as amended.

 

46.                               Effect of Plan.  The provisions of the Plan will, in accordance with its terms, be binding upon, and inure to the benefit of, all successors of each Participant, including, without limitation, such Participant’s estate and the executors, administrators or trustees thereof, heirs and legatees, and any receiver, trustee in bankruptcy or representative of creditors of such Participant.

 

47.                               Governing Law.  The Plan is to be construed in accordance with and governed by the internal laws of the State of Delaware without giving effect to any choice of law rule that would cause

 

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the application of the laws of any jurisdiction other than the internal laws of the State of Delaware to the rights and duties of the parties, except to the extent the internal laws of the State of Delaware 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 will nevertheless remain effective and will remain enforceable.

 

48.                               Dispute Resolution.  The provisions of this Section 48 will be the exclusive means of resolving disputes arising out of or relating to the Plan.  The Company and the Participant, or their respective successors (the “parties”), will attempt in good faith to resolve any disputes arising out of or relating to the Plan by negotiation between individuals who have authority to settle the controversy.  Negotiations will be commenced by either party by notice of a written statement of the party’s position and the name and title of the individual who will represent the party.  Within thirty (30) days of the written notification, the parties will meet at a mutually acceptable time and place, and thereafter as often as they reasonably deem necessary, to resolve the dispute.  If the dispute has not been resolved by negotiation, the parties agree that any suit, action, or proceeding arising out of or relating to the Plan must be brought in the United States District Court for Delaware (or should such court lack jurisdiction to hear such action, suit or proceeding, in a Delaware state court) and that the parties will submit to the jurisdiction of such court.  The parties irrevocably waive, to the fullest extent permitted by law, any objection the party may have to the laying of venue for any such suit, action or proceeding brought in such court.  THE PARTIES ALSO EXPRESSLY WAIVE ANY RIGHT THEY HAVE OR MAY HAVE TO A JURY TRIAL OF ANY SUCH SUIT, ACTION OR PROCEEDING.  If any one or more provisions of this Section 48 is for any reason held invalid or unenforceable, it is the specific intent of the parties that such provisions be modified to the minimum extent necessary to make it or its application valid and enforceable.

 

11Exhibit 10.1

 

SIXTH AMENDMENT TO LEASE

 

THIS SIXTH AMENDMENT TO LEASE (“Sixth Amendment”) is dated for reference purposes only as of April 29, 2016, by and between GI TC ONE WILSHIRE, LLC, a Delaware limited liability company (“Landlord”), and CORESITE ONE WILSHIRE, L.L.C., a Delaware limited liability company (formerly known as CRG West One Wilshire, L.L.C.) (“Tenant”).

 

R  E  C  I  T  A  L  S:

 

A.                                    Hines REIT One Wilshire L.P., a Delaware limited partnership (“Hines”) and Tenant entered into that certain Lease dated as of August 1, 2007 (the “Original Lease”), as amended by that certain:  (i) First Amendment to Lease dated as of May 1, 2008 (the “First Amendment”) between Hines and Tenant; (ii) Second Amendment to Lease dated as of November 5, 2009 (the “Second Amendment”) between Hines and Tenant; (iii) Third Amendment to Lease dated as of June 15, 2011 (the “Third Amendment”) between Hines and Tenant; (iv) Fourth Amendment to Lease dated as of January 9, 2013 (the “Fourth Amendment”) between Hines and Tenant; and (v) Fifth Amendment to Lease dated as of May 29, 2015 (the “Fifth Amendment”) between Landlord (as successor-in-interest to Hines) and Tenant.

 

B.                                    The Original Lease, the First Amendment, the Second Amendment, the Third Amendment, the Fourth Amendment and the Fifth Amendment are collectively referred to herein as the “Existing Lease.”

 

C.                                    Pursuant to the Existing Lease, Tenant is currently leasing from Landlord certain space referred to in the Fourth Amendment as the “Existing Premises” and consisting of approximately 162,122 rentable square feet within that certain office building located at 624 S. Grand Avenue, Los Angeles, California (the “Building”).

 

D.                                    References to “the Lease” in this Sixth Amendment, and, following the date on which both Landlord and Tenant have executed and delivered this Sixth Amendment (the “Sixth Amendment Date”), references to “this Lease” in the Original Lease and references to “the Lease” in the Existing Lease, shall all mean and refer to the Existing Lease, as amended by this Sixth Amendment.

 

E.                                     Landlord and Tenant now desire to amend the Existing Lease to (i) provide for and memorialize Tenant’s exercise of the RP Extension Option with respect to all of the Remainder Premises (as defined in the Fifth Amendment) that is other than Suite 1717, and (ii) modify various terms and provisions of the Existing Lease, all as hereinafter provided.

 

A  G  R  E  E  M  E  N  T:

 

NOW, THEREFORE, in consideration of the foregoing Recitals and the mutual covenants contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

 

 

1.                                      Capitalized Terms.  Except as otherwise expressly provided herein to the contrary, all capitalized terms used in this Sixth Amendment shall have the meaning given such terms in the Existing Lease.

 

2.                                      Exercise of RP Extension Option.  The parties hereby agree that this Sixth Amendment shall constitute Tenant’s proper and timely exercise of the RP Extension Option with respect to all of the Remainder Premises that is other than Suite 1717 (i.e., Suite 700, Suite 900, Suite 901, Suite 902, Suite 905, and Suite 930, which contains a total of approximately 20,697 rentable square and pursuant to Section 7.2 of the Fourth Amendment shall be referred to herein, collectively, as the “RP Extension Premises”).  As a result of such exercise:

 

2.1                               the Lease Term for the RP Extension Premises is hereby extended through the Extended Term Expiration Date upon all of the terms and conditions of the Existing Lease applicable to the Extension Premises (subject to the modifications set forth below in this Sixth Amendment) and the RP Extension Premises shall be deemed to be, for all purposes under the Lease, part of the Extension Premises;

 

2.2                               the Lease Term for Suite 1717 (which pursuant to Section 7.2 of the Fourth Amendment shall be referred to herein as the “RP Eliminated Space”) shall expire on the Existing Premises Expiration Date and Tenant shall surrender and deliver exclusive possession of the RP Eliminated Space to Landlord on or prior to the Existing Premises Expiration Date in accordance with and subject to Section 7.3.2 of the Fourth Amendment;

 

2.3                               the Base Rent payable by Tenant during the Extended Term for the RP Extension Premises shall be determined in accordance with Section 3 of the Fourth Amendment (except that, effective as of the Extended Term Commencement Date, the annual Base Rent payable for each of Suites 900, 901, 902 and 930 of the RP Extension Premises [each such applicable Suite sometimes referred to herein an “Office Use RP Suite”] shall equal $32.00 per rentable square foot of such applicable Office Use RP Suite, and shall be increased on each annual anniversary of the Extended Term Commencement Date at the rate of 3% per annum on a cumulative and compounded basis; provided, however, if at any time from and after the Extended Term Commencement Date, Tenant uses any portion of an Office Use RP Suite for Colocation or any of the other uses described in the first sentence of Section 7 of the Summary of the Original Lease, and not solely and exclusively for general office and/or storage uses (herein, a “Non-Office Use Event”), then from and after the date such Non-Office Use Event occurs in such applicable Office Use RP Suite, the Base Rent payable by Tenant for such applicable Office Use RP Suite shall be determined in accordance with Section 3 of the Fourth Amendment without regard to this exception; provided further, however, if such Non-Office Use Event occurs in Suite 901, then from and after the date such Non-Office Use Event occurs in Suite 901, the Base Rent payable by Tenant for Suite 901 shall initially equal the product of (i) the Base Rent rate per rentable square foot applicable to Suite 905 of the Extension Premises as of such date, multiplied by (ii) the rentable square feet in Suite 901, and shall thereafter be increased at the same time and at the same Base Rent rate per rentable square foot as and when applicable to Suite 905);

 

2.4                               Tenant’s Share during the Extended Term shall equal 23.82%, calculated as (i) 157,554 rentable square feet of the Extension Premises (reflecting the exclusion of the

 

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Storage Space), divided by (ii) 661,553 rentable square feet of the Building, stated as a percentage rounded to two decimal places, and the Base Year for calculating Tenant’s Share of increases in Direct Expenses shall continue to be as set forth in the Lease (except that effective as of the Extended Term Commencement Date, the Base Year for calculating Tenant’s Share of increases in Direct Expenses with respect to each Office Use RP Suite shall be revised to be calendar year 2017; provided, however, if at any time from and after the Extended Term Commencement Date, a Non-Office Use Event occurs in an Office Use RP Suite, then from and after the date such Non-Office Use Event occurs in such applicable Office Use RP Suite, the Base Year for calculating Tenant’s Share of increases in Direct Expenses with respect to such applicable Office Use RP Suite shall be determined without regard to this exception);

 

2.5                               the number of Parking Spaces that Tenant shall have the right to use under the Lease during the Extended Term shall equal 72 Parking Spaces, calculated as 4.55 x 157,554 rentable square feet of the Extension Premises ÷ 10,000, with (A) 52 of such Parking Spaces as unreserved covered (non-tandem) parking spaces, and (B) 20 of such Parking Spaces as reserved covered (non-tandem) parking spaces; and

 

2.6                               the Maximum Power Building Amount, the Maximum Generator Power Amount, the Riser Allocation Amount, and the Generator Allocation Amount shall, during the Extended Term, remain at the same amounts in place immediately prior to the Extended Term Commencement Date regardless of the expiration of the Lease Term for RP Eliminated Space pursuant to Section 2.2 above.

 

3.                                      4/105 Conduits and 4/1140 Conduits.

 

3.1                               4/105 Conduits.  During the period (the “4/105 Conduit Term”) commencing retroactively as of March 1, 2016, Tenant shall have the right to install, and, after installation, the exclusive right to use, two, four inch (4”) conduits (conduit Id Nos. 3030 and 3031) running from the 4th Floor Space to Suite 105 for the purposes of installing and maintaining therein telecommunications cabling and/or wiring (collectively, the “4/105 Conduits”).  The first sentence of the second paragraph of Section 6.9.10 of the Original Lease shall not apply with respect to the 4/105 Conduits, and during the 4/105 Conduit Term, Tenant shall pay to Landlord rent for the right to use each 4/105 Conduit (regardless of whether the applicable 4/105 Conduit is actually used by Tenant) equal to $500.00 per month for each 4/105 Conduit, which monthly rents shall be (i) increased as of March 1, 2017 and each March 1 thereafter at the rate of 3% per annum on a cumulative, compounded basis, and (ii) payable in advance on or before the first (1st) day of each month during the 4/105 Conduit Term.

 

3.2                               4/1140 Conduits.  During the period (the “4/1140 Conduit Term”) commencing May 1, 2016, Tenant shall have the right to install, and, after installation, the exclusive right to use, four, four inch (4”) conduits (conduit Id Nos. 3032, 3033, 3034 and 3035) running from the 4th Floor Space to Suite 1140 for the purposes of installing and maintaining therein telecommunications cabling and/or wiring (collectively, the “4/1140 Conduits”).  The first sentence of the second paragraph of Section 6.9.10 of the Original Lease shall not apply with respect to the 4/1140 Conduits, and during the 4/1140 Conduit Term, Tenant shall pay to Landlord rent for the right to use each 4/1140 Conduit (regardless of whether the applicable 4/1140 Conduit is actually used by Tenant) equal to $1,750.00 per month for each 4/1140

 

3

 

Conduit, which monthly rents shall be (i) increased as of May 1, 2017 and each May 1 thereafter at the rate of 3% per annum on a cumulative, compounded basis, and (ii) payable in advance on or before the first (1st) day of each month during the 4/1140 Conduit Term.

 

3.3                               General Terms.  The 4/105 Conduits and the 4/1140 Conduits (sometimes referred to herein, collectively, as the “Sixth Amendment Conduits”), and any wiring or cabling installed therein, shall be installed by Tenant at Tenant’s sole cost and expense in accordance with Sections 6.9 and 8.1 of the Original Lease.  The Sixth Amendment Conduits shall be deemed to be part of the Supplemental Equipment and the area of the Building in which the Sixth Amendment Conduits are located shall be deemed to be part of the Supplemental Areas.  Except as provided in this Section 3, all of the TCCs related to the Supplemental Equipment and Supplemental Areas shall apply with respect to the Sixth Amendment Conduits (including, without limitation, the Special Use Conditions set forth in Section 2.1 of the Summary, and Section 6.9 of the Original Lease).  In addition, the Sixth Amendment Conduits shall be deemed Amendment Conduits for all purposes under Section 10.4 of the Fourth Amendment.  Effective as of Sixth Amendment Date, the phrase “and/or the 4/105 Conduit Term and/or the 4/1140 Conduit Term” is added after the phrase “and/or the 4/805 Conduit Term” in Section 10.4.2 of the Fourth Amendment (as added by Section 4.2.4 of the Fifth Amendment).

 

4.                                      Brokers.  Landlord and Tenant each represents and warrants to the other that:  (i) it has had no dealings with any real estate broker or agent in connection with the negotiation and execution of this Sixth Amendment other than (a) Hines Interests Limited Partnership (“Hines Interests”) representing Landlord (whose commissions, if any, shall be paid by Landlord pursuant to a separate agreement between Landlord and Hines Interests) and (b) CoreSite Realty Corporation (“CS Realty”) representing Tenant (whose commissions, if any, shall be paid by Tenant pursuant to a separate agreement between Tenant and CS Realty); and (ii) it knows of no other real estate broker or agent who is entitled to a commission in connection with this Sixth Amendment.  Each party agrees to indemnify and defend the other party against and hold the other party harmless from any and all claims, demands, losses, liabilities, lawsuits, judgments and costs and expenses (including, without limitation, reasonable attorneys’ fees) with respect to any leasing commission or equivalent compensation alleged to be owing on account of the breach by the indemnifying party of any of such indemnifying party’s representations, warranties and/or covenants set forth above in this Section 4.

 

5.                                      No Further Modification.  Except as set forth in this Sixth Amendment, all of the terms and provisions of the Existing Lease shall remain unmodified and in full force and effect.

 

6.                                      Counterparts.  This Sixth Amendment may be executed in multiple counterparts, each of which is to be deemed original for all purposes, but all of which together shall constitute one and the same instrument.

 

SIGNATURE PAGE CONTINUED ON NEXT PAGE

 

4

 

IN WITNESS WHEREOF, this Sixth Amendment has been executed by each of the parties as of the day and year written immediately below their respective signatures.

 

	
“LANDLORD”
    	
GI TC ONE WILSHIRE,   LLC,
    
	
 
    	
a Delaware limited   liability company
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Tony Lin
    
	
 
    	
Name:
    	
Tony Lin
    
	
 
    	
Its:
    	
Authorized Person
    
	
 
    	
 
    	
 
    
	
 
    	
Date:
    	
May 31, 2016
    
	
 
    	
 
    
	
“TENANT”
    	
CORESITE ONE WILSHIRE,   L.L.C.,
    
	
 
    	
a Delaware limited   liability company
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Tom Ray
    
	
 
    	
Name:
    	
Tom Ray
    
	
 
    	
Its:
    	
President
    
	
 
    	
 
    	
 
    
	
 
    	
Date:
    	
May 25, 2016
    

 

5

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