Document:

EX-4.4

 EXHIBIT 4.4 

Execution Copy 
 DEPOSIT
AGREEMENT 
 Dated 

November 24, 2015 

ENDURANCE SPECIALTY HOLDINGS LTD. 

AS ISSUER, 
 COMPUTERSHARE INC.
AND COMPUTERSHARE TRUST COMPANY, N.A., 
 AS DEPOSITARY, 

-and- 
 COMPUTERSHARE TRUST
COMPANY, N.A., 
 AS REGISTRAR AND TRANSFER AGENT 

COMPUTERSHARE INC. 
 AS
DIVIDEND DISBURSING AGENT AND REDEMPTION AGENT 
 RELATING TO THE ISSUER’S RECEIPTS, DEPOSITARY SHARES AND RELATED 

6.350% NON-CUMULATIVE PREFERRED SHARES, SERIES C 

 TABLE OF CONTENTS 

 

							
	 	  	 	  	Page	 
	ARTICLE 1 DEFINITIONS	  	 	1	  
		
	ARTICLE 2 FORM OF RECEIPTS, DEPOSIT OF PREFERRED SHARES, EXECUTION AND DELIVERY, TRANSFER, SURRENDER AND REDEMPTION OF RECEIPTS	  	 	3	  
	 SECTION 2.01
	  	Form and Transferability of Receipts	  	 	3	  
	 SECTION 2.02
	  	Deposit of Preferred Shares; Execution and Delivery of Receipts in Respect Thereof	  	 	5	  
	 SECTION 2.03
	  	Optional Redemption of Preferred Shares for Cash	  	 	6	  
	 SECTION 2.04
	  	Registration of Transfers of Receipts	  	 	8	  
	 SECTION 2.05
	  	Combinations and Split-ups of Receipts	  	 	8	  
	 SECTION 2.06
	  	Surrender of Receipts and Withdrawal of Preferred Shares	  	 	9	  
	 SECTION 2.07
	  	Limitations on Execution and Delivery, Transfer, Split-up	  	 	10	  
	 SECTION 2.08
	  	Lost Receipts, etc.	  	 	10	  
	 SECTION 2.09
	  	Cancellation and Destruction of Surrendered Receipts	  	 	10	  
	 SECTION 2.10
	  	No Pre-Release	  	 	10	  
		
	ARTICLE 3 CERTAIN OBLIGATIONS OF HOLDERS OF RECEIPTS AND THE COMPANY	  	 	11	  
	 SECTION 3.01
	  	Filing Proofs, Certificates and Other Information	  	 	11	  
	 SECTION 3.02
	  	Payment of Fees and Expenses	  	 	11	  
	 SECTION 3.03
	  	Representations and Warranties as to Preferred Shares	  	 	11	  
	 SECTION 3.04
	  	Representation and Warranty as to Receipts and Depositary Shares	  	 	11	  
	 SECTION 3.05
	  	Taxes	  	 	11	  
		
	ARTICLE 4 THE PREFERRED SHARES; NOTICES	  	 	12	  
	 SECTION 4.01
	  	Cash Distributions	  	 	12	  
	 SECTION 4.02
	  	Distributions Other Than Cash	  	 	12	  
	 SECTION 4.03
	  	Subscription Rights, Preferences or Privileges	  	 	13	  
	 SECTION 4.04
	  	Notice of Dividends; Fixing of Record Date for Holders of Receipts	  	 	14	  
	 SECTION 4.05
	  	Voting Rights	  	 	14	  
	 SECTION 4.06
	  	Changes Affecting Preferred Shares and Reclassifications, Recapitalizations, Etc.	  	 	15	  
	 SECTION 4.07
	  	Inspection of Reports	  	 	15	  
	 SECTION 4.08
	  	Lists of Receipt Holders	  	 	15	  
	 SECTION 4.09
	  	Withholding	  	 	16	  

  
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	ARTICLE 5 THE DEPOSITARY AND THE COMPANY	  	 	16	  
	 SECTION 5.01
	  	Maintenance of Offices, Agencies and Transfer Books by the Depositary and the Registrar	  	 	16	  
	 SECTION 5.02
	  	Prevention or Delay in Performance by the Depositary, the Depositary’s Agents, the Registrar or the Company	  	 	16	  
	 SECTION 5.03
	  	Obligations of the Depositary, the Depositary’s Agents, the Registrar and the Company	  	 	17	  
	 SECTION 5.04
	  	Resignation and Removal of the Depositary; Appointment of Successor Depositary	  	 	20	  
	 SECTION 5.05
	  	Notices, Reports and Documents	  	 	21	  
	 SECTION 5.06
	  	Indemnification by the Company	  	 	21	  
	 SECTION 5.07
	  	Fees, Charges and Expenses	  	 	22	  
	 SECTION 5.08
	  	Tax Compliance	  	 	22	  
		
	 ARTICLE 6 AMENDMENT AND TERMINATION
	  	 	23	  
	 SECTION 6.01
	  	Amendment	  	 	23	  
	 SECTION 6.02
	  	Termination	  	 	23	  
		
	 ARTICLE 7 MISCELLANEOUS
	  	 	23	  
	 SECTION 7.01
	  	Counterparts	  	 	23	  
	 SECTION 7.02
	  	Exclusive Benefits of Parties	  	 	24	  
	 SECTION 7.03
	  	Invalidity of Provisions	  	 	24	  
	 SECTION 7.04
	  	Notices	  	 	24	  
	 SECTION 7.05
	  	Depositary’s Agents	  	 	25	  
	 SECTION 7.06
	  	Holders of Receipts Are Parties	  	 	25	  
	 SECTION 7.07
	  	Governing Law	  	 	25	  
	 SECTION 7.08
	  	Inspection of Deposit Agreement and Certificate of Designations	  	 	25	  
	 SECTION 7.09
	  	Headings	  	 	25	  
	 SECTION 7.10
	  	Confidentiality	  	 	25	  
	 SECTION 7.11
	  	Further Assurances	  	 	25	  

 Exhibit A – Form of Face of Receipt; Form of Reverse of Receipt 

Exhibit B – Certificate of Designations 

  
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 DEPOSIT AGREEMENT 

DEPOSIT AGREEMENT, dated November 24, 2015 among ENDURANCE SPECIALTY HOLDINGS LTD., a Bermuda exempted company (the
“Company”), COMPUTERSHARE INC., a Delaware corporation (“Computershare”), and its wholly-owned subsidiary, COMPUTERSHARE TRUST COMPANY, N.A., a federally chartered national association (the
“Trust Company”), jointly as Depositary (as hereinafter defined), the Trust Company, as Registrar (as hereinafter defined) and Transfer Agent (as hereinafter defined), and all holders from time to time of Receipts (as hereinafter
defined) issued hereunder. 
 WITNESSETH: 

WHEREAS, it is desired to provide, as hereinafter set forth in this Deposit Agreement, for the deposit of the Company’s Preferred Shares
(as hereinafter defined) with the Depositary for the purposes set forth in this Deposit Agreement and for the issuance hereunder of Depositary Shares representing a fractional interest in the Preferred Shares deposited and for the execution and
delivery of Receipts evidencing Depositary Shares; 
 WHEREAS, the Receipts are to be substantially in the form of Exhibit A annexed
to this Deposit Agreement, with appropriate insertions, modifications and omissions, as hereinafter provided in this Deposit Agreement; 

WHEREAS, the terms and conditions of the Preferred Shares are substantially set forth in the Certificate of Designations attached hereto as
Exhibit B; and 
 NOW, THEREFORE, in consideration of the premises contained herein, it is agreed by and among the parties hereto as
follows: 
 ARTICLE 1 

DEFINITIONS 
 The following
definitions shall apply to the respective terms (in the singular and plural forms of such terms) used in this Deposit Agreement and the Receipts: 

“Bye-laws” shall mean the amended and restated bye-laws of the Company as may be further amended and/or restated from time to
time. 
 “Certificate of Designations” shall mean the certificate of designations, adopted by the Board of Directors of the
Company or a duly authorized committee thereof, establishing and setting forth the rights, preferences and privileges of the Preferred Shares attached hereto as Exhibit B, and as such certificate may be amended or restated from time to time.

 “Deposit Agreement” shall mean this agreement, as the same may be amended, modified or supplemented from time to time.

  
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 “Depositary” shall mean Computershare and the Trust Company, acting jointly, and
any successor as Depositary hereunder. The Depositary, along with its affiliates, shall maintain combined capital and surplus of at least $50,000,000, and so shall any successor depositary hereunder. 

“Depositary Office” shall mean the principal office of the Depositary at which at any particular time its business in respect
of matters governed by this Deposit Agreement shall be administered, which at the date of this Deposit Agreement is located at 250 Royall Street, Canton, Massachusetts 02010. 

“Depositary Share” shall mean the security representing a 1/1,000th
fractional interest in a Preferred Share deposited with the Depositary hereunder and the same proportionate interest in any and all other property received by the Depositary in respect of such Preferred Share and held under this Deposit Agreement,
all as evidenced by the Receipts issued hereunder. Subject to the terms of this Deposit Agreement, each owner of a Depositary Share is entitled, proportionately, to all the rights, preferences and privileges of the Preferred Shares represented by
such Depositary Share (including the dividend, voting, redemption and liquidation rights contained in the Certificate of Designations). 

“Depositary’s Agent” shall mean an agent appointed by the Depositary as provided, and for the purposes specified, in
Section 7.05. 
 “Dividend Disbursing Agent” shall mean Computershare or any bank or trust company appointed to
register ownership and transfers of Receipts and the deposited Preferred Shares, as herein provided. 
 “Dividend Payment
Date” shall have the meaning set forth in the Certificate of Designations. 
 “Dividend Record Date” shall have
the meaning set forth in the Certificate of Designations. 
 “DTC” means The Depository Trust Company. 

“DTC Receipt” has the meaning set forth in Section 2.01. 

“Memorandum of Association” shall mean the memorandum of association of the company together with any amendments thereto,
filed with the Registrar of Companies in Bermuda. 
 “Preferred Shares” shall mean the Company’s 6.350% Non-cumulative
Preferred Shares, Series C (liquidation preference $25,000 per share), $1.00 par value per share, heretofore validly issued, fully paid and nonassessable. 

“Receipt” shall mean a receipt issued hereunder to evidence one or more Depositary Shares, whether in definitive or temporary
form, substantially in the form set forth as Exhibit A hereto. 

  
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 “record date” shall mean the date fixed pursuant to Section 4.04.

 “Record holder” or “holder” as applied to a Receipt shall mean the individual, entity or person in
whose name a Receipt is registered on the books maintained by the Depositary for such purpose. 
 “Redemption Agent” shall
mean Computershare or any bank or trust company appointed to register ownership and transfers of Receipts and the deposited Preferred Shares, as herein provided. 

“redemption date” has the meaning set forth under Section 2.03. 

“redemption price” has the meaning set forth under Section 2.03. 

“Registrar” shall mean the Trust Company or any bank or trust company appointed to register ownership and transfers of
Receipts and the deposited Preferred Shares, as herein provided. 
 “Securities Act” shall mean the Securities Act of 1933,
as amended. 
 “Transfer Agent” shall mean the Trust Company or any bank or trust company appointed to transfer the
Receipts and the deposited Preferred Shares, as herein provided. 
 ARTICLE 2  

FORM OF RECEIPTS, DEPOSIT OF PREFERRED SHARES, EXECUTION AND 

DELIVERY, TRANSFER, SURRENDER AND REDEMPTION OF RECEIPTS 

SECTION 2.01 Form and Transferability of Receipts. Definitive Receipts shall be printed and shall be substantially in the form set
forth in Exhibit A annexed to this Deposit Agreement, in each case with appropriate insertions, modifications and omissions, as hereinafter provided. Pending the preparation of definitive Receipts, the Depositary, upon and pursuant to the
written order of the Company delivered in compliance with Section 2.02, shall be authorized and instructed to, and shall, execute and deliver temporary Receipts which shall be substantially of the tenor of the definitive Receipts in lieu
of which they are issued and in each case with such appropriate insertions, omissions, substitutions and other variations as the persons executing such Receipts may determine (but which do not affect the rights or duties of the Depositary), as
evidenced by their execution of such Receipts. If temporary Receipts are issued, the Company and the Depositary will cause definitive Receipts to be prepared without unreasonable delay. After the preparation of definitive Receipts, the temporary
Receipts shall be exchangeable for definitive Receipts upon surrender of the temporary Receipts at the Depositary Office without charge to the holder. Upon surrender for cancellation of any one or more temporary Receipts, the Depositary is hereby
authorized and instructed to, and shall, execute and deliver in exchange therefor definitive Receipts representing the same number of Depositary Shares as represented by the surrendered temporary Receipt or Receipts. Such exchange shall be made at
the Company’s expense and without any charge therefor. Until so exchanged, the temporary Receipts shall in all respects be entitled to the same benefits under this Deposit Agreement, and with respect to the Preferred Shares deposited, as
definitive Receipts. 

  
 3 

 Receipts shall be executed by the Depositary by the manual or facsimile signature of a duly
authorized signatory of the Depositary; provided, that if a Registrar for the Receipts (other than the Depositary) shall have been appointed then such Receipts shall also be countersigned by manual or facsimile signature of a duly authorized
signatory of the Registrar. No Receipt shall be entitled to any benefits under this Deposit Agreement or be valid or obligatory for any purpose unless it shall have been executed as provided in the preceding sentence. The Depositary shall record on
its books each Receipt executed as provided above and delivered as hereinafter provided. Receipts bearing the manual or facsimile signature of a duly authorized signatory of the Depositary who was at any time a proper signatory of the Depositary
shall bind the Depositary, notwithstanding that such signatory ceased to hold such office prior to the execution and delivery of such Receipts by the Registrar or did not hold such office on the date of issuance of such Receipts. 

Receipts shall be in denominations of any number of whole Depositary Shares. All Receipts shall be dated the date of their issuance. 

Receipts may be endorsed with or have incorporated in the text thereof such legends or recitals or changes not inconsistent with the
provisions of this Deposit Agreement as may be required by the Depositary and approved by the Company, or which the Company has determined are required to comply with any applicable law or regulation or with the rules and regulations of any
securities exchange upon which the Depositary Shares may be listed for trading or to conform with any usage with respect thereto, or to indicate any special limitations or restrictions to which any particular Receipts are subject, in each case as
directed by the Company. 
 Title to any Receipt (and to the Depositary Shares evidenced by such Receipt) that is properly endorsed, or
accompanied by a properly executed instrument of transfer or endorsement, shall be transferable by delivery with the same effect as in the case of a negotiable instrument; provided, however, that until transfer of a Receipt shall be
registered on the books of the Depositary as provided in Section 2.04, the Depositary may, notwithstanding any notice to the contrary, treat the record holder thereof at such time as the absolute owner thereof for the purpose of
determining the person entitled to distributions of dividends or other distributions or payments with respect to the Preferred Shares, to exercise any redemption or voting rights or to receive any notice provided for in this Deposit Agreement and
for all other purposes. 
 Notwithstanding the foregoing, the Depositary and the Company will make application to DTC for acceptance of all
of the Receipts for its book-entry settlement system. In connection with such request, the Company hereby appoints the Depositary acting through any authorized officer thereof as its attorney-in-fact, with full power to delegate, for purposes of
executing any agreements, certifications or other instruments or documents necessary or desirable in order to effect the acceptance of such Receipts for DTC eligibility. So long as the Receipts are eligible for book-entry settlement with DTC, unless
otherwise required by law, all Depositary Shares to be traded on the New York Stock Exchange with book-entry settlement through DTC shall be represented by a single receipt (the “DTC Receipt”), which shall be deposited with DTC (or
its custodian) evidencing all such Depositary Shares and registered in the name of the nominee of DTC (initially expected to be Cede & Co.). The Depositary or such other entity as is agreed to by DTC may hold the DTC Receipt as custodian
for DTC. Ownership of beneficial interests in the DTC Receipt shall be shown on, and the transfer of such ownership shall be effected through, records maintained by (i) DTC or its nominee for such DTC Receipt or (ii) institutions that have
accounts with DTC. 

  
 4 

 If issued, the DTC Receipt shall be exchangeable for definitive Receipts only if (i) DTC
notifies the Company at any time that it is unwilling or unable to continue to make its book-entry settlement system available for the Receipts and a successor to DTC is not appointed by the Company within 90 days of the date the Company is so
informed in writing, (ii) DTC notifies the Company at any time that it has ceased to be a clearing agency registered under applicable law and a successor to DTC is not appointed by the Company within 90 days of the date the Company is so
informed in writing or (iii) the Company executes and delivers to DTC a notice to the effect that such DTC Receipt shall be so exchangeable. If the beneficial owners of interests in Depositary Shares are entitled to exchange such interests for
definitive Receipts as the result of an event described in clause (i), (ii) or (iii) of the preceding sentence, then without unnecessary delay but in any event not later than the earliest date on which such beneficial interests may be so
exchanged, the Depositary is hereby directed to and shall provide written instructions to DTC to deliver to the Depositary for cancellation the DTC Receipt, and the Company shall instruct the Depositary in writing to execute and deliver to the
beneficial owners of the Depositary Shares previously evidenced by the DTC Receipt definitive Receipts in physical form evidencing such Depositary Shares. The DTC Receipt shall be in such form and shall bear such legend or legends as may be
appropriate or required by DTC in order for it to accept the Depositary Shares for its book-entry settlement system. Notwithstanding any other provision herein to the contrary, if the Receipts are at any time eligible for book-entry settlement
through DTC, delivery of Preferred Shares and other property in connection with the withdrawal or redemption of Depositary Shares will be made through DTC and in accordance with its procedures, unless the holder of the relevant Receipt otherwise
requests and such request is reasonably acceptable to the Depositary and the Company. 
 SECTION 2.02 Deposit of Preferred Shares;
Execution and Delivery of Receipts in Respect Thereof. Concurrently with the execution of this Deposit Agreement, the Company is delivering to the Depositary a certificate or certificates, registered in the name of the Depositary and evidencing
8,000 Preferred Shares, properly endorsed or accompanied, if required by the Depositary, by a duly executed instrument of transfer or endorsement, in form satisfactory to the Depositary, together with (i) all such certifications as may be
required by the Depositary in accordance with the provisions of this Deposit Agreement and (ii) a written order of the Company directing the Depositary to execute and deliver to, or upon the written order of, the person or persons stated in
such order a Receipt or Receipts for the Depositary Shares representing such deposited Preferred Shares registered in such names specified in such written order. The Depositary acknowledges receipt of the aforementioned 8,000 Preferred Shares and
related documentation and agrees to hold such deposited Preferred Shares in an account to be established by the Depositary at the Depositary Office or at such other office as the Depositary shall determine. The Company hereby appoints the Trust
Company as the Registrar, Transfer Agent, and Computershare as the Dividend Disbursing Agent and Redemption Agent for the Preferred Shares deposited hereunder and the Trust Company and Computershare respectively hereby accept such appointment and,
as such, will reflect changes in the number of shares (including any fractional shares) of deposited Preferred Shares held by it by notation, book-entry or other appropriate method. 

  
 5 

 If required by the Depositary, Preferred Shares presented for deposit by the Company at any time,
whether or not the register of shareholders of the Company is closed, shall also be accompanied by an agreement or assignment, or other instrument satisfactory to the Depositary, that will provide for the prompt transfer to the Depositary or its
nominee of any dividend or right to subscribe for additional Preferred Shares or to receive other property that any person in whose name the Preferred Shares are or has been registered may thereafter receive upon or in respect of such deposited
Preferred Shares, or in lieu thereof such agreement of indemnity or other agreement as shall be satisfactory to the Depositary. 
 Upon
receipt by the Depositary of a certificate or certificates for Preferred Shares deposited hereunder, together with the other documents specified above, and upon registering such Preferred Shares in the name of the Depositary, the Depositary, subject
to the terms and conditions of this Deposit Agreement, shall execute and deliver to, or upon the order of, the person or persons named in the written order delivered to the Depositary referred to in the first paragraph of this
Section 2.02, a Receipt or Receipts for the number of whole Depositary Shares representing the Preferred Shares so deposited and registered in such name or names as may be requested by such person or persons. The Depositary shall execute
and deliver such Receipt or Receipts at the Depositary Office, except that, at the request, risk and expense of any person requesting such delivery, such delivery may be made at such other place as may be designated by such person. Other than in the
case of splits, combinations or other reclassifications affecting the Preferred Shares, or in the case of dividends or other distributions of Preferred Shares, if any, there shall be deposited hereunder not more than the number of shares
constituting the Preferred Shares as set forth in the Certificate of Designations, as such may be amended. To the extent that the Company issues Preferred Shares in excess of the amount set forth in the Certificate of Designations as of the date
hereof (which shares have been duly authorized by the Company), the Company shall notify the Depositary of such issuance in writing. 
 The
Depositary shall be permitted to rely on applicable opinions of counsel delivered to the underwriters pursuant to each of Sections 3(vi) and 3(vii) of the underwriting agreement dated November 17, 2015 among the Company and the underwriters
named therein relating to the sale of the Depositary Shares to the public. In addition, Skadden, Arps, Slate, Meagher & Flom LLP, U.S. counsel to the Company, shall deliver a letter to the Depositary, subject to the qualifications and
assumptions set forth therein, that (i) the Company’s registration statement on Form S-3ASR (the “Registration Statement”) relating to depositary shares, preferred shares and other securities became effective upon filing
with the Securities and Exchange Commission (the “Commission”) and (ii) no stop order suspending the effectiveness of the Registration Statement has been instituted or is pending or threatened by the Commission. 

The Company shall deliver to the Depositary from time to time such quantities of Receipts as the Depositary may request to enable the
Depositary to perform its obligations under this Deposit Agreement. 
 SECTION 2.03 Optional Redemption of Preferred Shares for
Cash. Whenever the Company shall elect to redeem deposited Preferred Shares for cash in accordance with the provisions of the Certificate of Designations, it shall (unless otherwise agreed in writing with the Depositary) give the Depositary not
less than 30 nor more than 60 days’ prior written notice of the date fixed for redemption of such Preferred Shares (the “redemption date”) and of the 

  
 6 

 
number of such Preferred Shares held by the Depositary to be redeemed and the applicable redemption price (the “redemption price”), as set forth in the Certificate of
Designations. The Depositary shall mail, first-class postage prepaid, notice of the redemption of Preferred Shares and the proposed simultaneous redemption of the Depositary Shares representing the Preferred Shares to be redeemed, not less than 30
and not more than 60 days prior to the redemption date, to the holders of record on the record date fixed for such redemption pursuant to Section 4.04 of the Receipts evidencing the Depositary Shares to be so redeemed, at the addresses
of such holders as the same appear on the records of the Depositary; provided, however, that the failure to mail any such notice to one or more such holders or any defect in any such notice shall not affect the sufficiency of the
proceedings for redemption except as to the holder to whom notice was not given or defective. 
 The Company shall prepare and provide the
Depositary with such notice, and each such notice shall state: (i) the redemption date; (ii) the redemption price; (iii) the number of deposited Preferred Shares and Depositary Shares to be redeemed; (iv) if fewer than all
Depositary Shares held by any holder are to be redeemed, the number of such Depositary Shares held by such holder to be so redeemed; (v) the place or places where the Preferred Shares and the Receipts evidencing Depositary Shares to be redeemed
are to be surrendered for payment of the redemption price; and (vi) that on the redemption date dividends in respect of the Preferred Shares represented by the Depositary Shares to be redeemed will cease to accrue. 

In the event that notice of redemption has been made as described in the immediately preceding paragraphs and the Company shall then have paid
in full to the Depositary the redemption price (determined pursuant to the Certificate of Designations) of the Preferred Shares deposited with the Depositary to be redeemed, the Depositary shall redeem the number of Depositary Shares representing
such Preferred Shares so called for redemption by the Company and on the redemption date (unless the Company shall have failed to pay for the Preferred Shares to be redeemed by it as set forth in the Company’s notice provided for in the
preceding paragraph), all dividends in respect of the Preferred Shares called for redemption shall cease to accrue, the Depositary Shares called for redemption shall be deemed no longer to be outstanding and all rights of the holders of Receipts
evidencing such Depositary Shares (except the right to receive the redemption price) shall, to the extent of such Depositary Shares, cease and terminate. Upon surrender in accordance with said notice of the Receipts evidencing such Depositary Shares
(properly endorsed or assigned for transfer, if the Depositary shall so require), such Depositary Shares shall be redeemed at a cash redemption price per Depositary Share equal to 1/1,000th of the
redemption price per share paid in respect of the Preferred Shares, plus any declared but unpaid dividends thereon from the last Dividend Payment Date to, but excluding, the redemption date. The foregoing shall be further subject to the terms and
conditions of the Certificate of Designations. In the event of any conflict between the provisions of the Deposit Agreement and the provisions of the Certificate of Designations, the provisions of the Certificate of Designations will govern and the
Company will instruct the Depositary, as applicable, in writing accordingly of such governing terms; provided, however, that under no circumstances will the Certificate of Designations be deemed to change or modify any of the rights,
duties or immunities of the Depositary contained herein. 

  
 7 

 If fewer than all of the Depositary Shares evidenced by a Receipt are called for redemption, the
Depositary will deliver to the holder of such Receipt upon its surrender to the Depositary, together with payment of the redemption price for and all other amounts payable in respect of the Depositary Shares called for redemption, a new Receipt
evidencing the Depositary Shares evidenced by such prior Receipt and not called for redemption. 
 If less than all of the Preferred Shares
are redeemed pursuant to the Company’s exercise of its optional redemption right, the Depositary will select the Depositary Shares to be redeemed pursuant to this Section 2.03 on a pro rata basis, by lot or in such other manner as
the Depositary may determine to be fair and equitable. 
 All funds received by Computershare under this Agreement that are to be
distributed or applied by Computershare in the performance of Services (the “Funds”) shall be held by Computershare as agent for the Company and deposited in one or more bank accounts to be maintained by Computershare in its name as agent
for the Company. Until paid pursuant to this Agreement, Computershare may hold or invest the Funds through such accounts in: (i) obligations of, or guaranteed by, the United States of America, (ii) commercial paper obligations rated
A-1 or P-1 or better by Standard & Poor’s Corporation (“S&P”) or Moody’s Investors Service, Inc. (“Moody’s”), respectively, (iii) money market funds that comply with Rule 2a-7 of the Investment
Company Act of 1940, or (iv) demand deposit accounts, short term certificates of deposit, bank repurchase agreements or bankers’ acceptances, of commercial banks with Tier 1 capital exceeding $1 billion or with an average rating above
investment grade by S&P (LT Local Issuer Credit Rating), Moody’s (Long Term Rating) and Fitch Ratings, Inc. (LT Issuer Default Rating) (each as reported by Bloomberg Finance L.P.). Computershare shall have no responsibility or
liability for any diminution of the Funds that may result from any deposit or investment made by Computershare in accordance with this paragraph, including any losses resulting from a default by any bank, financial institution or other
third party. Computershare may from time to time receive interest, dividends or other earnings in connection with such deposits or investments. Computershare shall not be obligated to pay such interest, dividends or earnings to the
Company, any holder or any other party 
 SECTION 2.04 Registration of Transfers of Receipts. The Company hereby appoints the
Trust Company as the Registrar and Transfer Agent for the Receipts and the Trust Company hereby accepts such appointment and, as such, shall register on its books from time to time transfers of Receipts upon any surrender thereof by the holder in
person or by a duly authorized attorney, agent or representative properly endorsed or accompanied by a properly executed instrument of transfer or endorsement and appropriate evidence of authority, which shall include a signature guarantee from an
eligible guarantor institution participating in a signature guarantee program approved by the Securities Transfer Association, and any other reasonable evidence of authority that may be required by the Trust Company, together with evidence of the
payment by the applicable party of any transfer taxes as may be required by law. Upon such surrender, the Trust Company shall execute a new Receipt or Receipts and deliver the same to or upon the order of the person entitled thereto evidencing the
same aggregate number of Depositary Shares evidenced by the Receipt or Receipts surrendered. 
 SECTION 2.05 Combinations and
Split-ups of Receipts. Upon surrender of a Receipt or Receipts at the Depositary Office or such other office as the Depositary may designate for the purpose of effecting a split-up or combination of Receipts, subject to the terms and conditions
of this Deposit Agreement, the Depositary shall execute and deliver a new Receipt or Receipts in the 
 authorized denominations requested evidencing the
same aggregate number of Depositary Shares evidenced by the Receipt or Receipts surrendered. 

  
 8 

 SECTION 2.06 Surrender of Receipts and Withdrawal of Preferred Shares. Any holder of
a Receipt or Receipts may withdraw any number of whole shares of deposited Preferred Shares represented by the Depositary Shares evidenced by such Receipt or Receipts and all money and other property, if any, represented by such Depositary Shares by
surrendering such Receipt or Receipts to the Depositary or at such other office as the Depositary may designate for such withdrawals; provided, that a holder of a Receipt or Receipts may not withdraw such Preferred Shares (or money and other
property, if any, represented thereby) which has previously been called for redemption. Upon such surrender, upon payment of the fee of the Depositary for the surrender of Receipts to the extent provided in Section 5.07 and payment of
all taxes and governmental charges in connection with such surrender and withdrawal of Preferred Shares, and subject to the terms and conditions of this Deposit Agreement, without unreasonable delay, the Depositary shall deliver to such holder, or
to the person or persons designated by such holder as hereinafter provided, the number of whole shares of such Preferred Shares and all such money and other property, if any, represented by the Depositary Shares evidenced by the Receipt or Receipts
so surrendered for withdrawal, but holders of such whole shares of Preferred Shares will not thereafter be entitled to deposit such Preferred Shares hereunder or to receive Depositary Shares therefor. If the Receipt or Receipts delivered by the
holder to the Depositary in connection with such withdrawal shall evidence a number of Depositary Shares in excess of the number of Depositary Shares representing the number of whole shares of deposited Preferred Shares to be withdrawn, the
Depositary shall at the same time, in addition to such number of whole shares of Preferred Shares and such money and other property, if any, to be withdrawn, deliver to such holder, or upon such holder’s order (subject to
Section 2.04), a new Receipt or Receipts evidencing such excess number of Depositary Shares. Delivery of such Preferred Shares and such money and other property being withdrawn may be made by the delivery of such certificates, documents
of title and other instruments as the Depositary may deem appropriate, which, if required by the Depositary, shall be properly endorsed or accompanied by proper instruments of transfer. 

If the deposited Preferred Shares and the money and other property being withdrawn are to be delivered to a person or persons other than the
record holder of the Receipt or Receipts being surrendered for withdrawal of Preferred Shares, such holder shall execute and deliver to the Depositary a written order so directing the Depositary and the Depositary may require that the Receipt or
Receipts surrendered by such holder for withdrawal of such Preferred Shares be properly endorsed in blank or accompanied by a properly executed instrument of transfer or endorsement in blank. 

The Depositary shall deliver the deposited Preferred Shares and the money and other property, if any, represented by the Depositary Shares
evidenced by Receipts surrendered for withdrawal at the Depositary Office, except that, at the request, risk and expense of the holder surrendering such Receipt or Receipts and for the account of the holder thereof, such delivery may be made at such
other place as may be designated by such holder. 

  
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 SECTION 2.07 Limitations on Execution and Delivery, Transfer, Split-up. As a
condition precedent to the execution and delivery, transfer, split-up, combination, surrender or exchange of any Receipt, the Depositary, any of the Depositary’s Agents or the Company may require any or all of the following: (i) payment to
it of a sum sufficient for the payment (or, in the event that the Company shall have made such payment, the reimbursement to it) of any tax or other governmental charge and stock transfer or registration fee with respect thereto (including any such
tax or charge with respect to the Preferred Shares being deposited or withdrawn); (ii) the production of proof satisfactory to it as to the identity and genuineness of any signature (or the authority of any signature) including, as noted in
Section 2.04 above, a signature guarantee from an eligible guarantor institution participating in a signature guarantee program approved by the Securities Transfer Association, and any other reasonable evidence of authority that may be
required by the Depositary; and (iii) compliance with such regulations, if any, as the Depositary or the Company may establish consistent with the provisions of this Deposit Agreement as may be required by any securities exchange on which the
deposited Preferred Shares, the Depositary Shares or the Receipts may be included for quotation or listed. 
 The deposit of Preferred
Shares may be refused, the delivery of Receipts against Preferred Shares may be suspended, the transfer of Receipts may be refused, and the transfer, split-up, combination, surrender, exchange or redemption of outstanding Receipts may be suspended
(i) during any period when the register of shareholders of the Company is closed or (ii) if any such action is deemed reasonably necessary or advisable by the Depositary, any of the Depositary’s Agents or the Company at any time or
from time to time because of any requirement of law or of any government or governmental body or commission, or under any other provision of this Deposit Agreement. 

SECTION 2.08 Lost Receipts, etc. In case any Receipt shall be mutilated and surrendered to the Depositary or destroyed or lost or
stolen, the Depositary shall execute and deliver a Receipt of like form and tenor in exchange and substitution for such mutilated Receipt or in lieu of and in substitution for such destroyed, lost or stolen Receipt; provided, that the holder
thereof shall have (i) filed with the Depositary (a) a request for such execution and delivery before the Depositary has notice that the Receipt has been acquired by a protected purchaser and (b) an open penalty surety bond,
(ii) satisfied any other reasonable requirements imposed by the Depositary and (iii) complied with such other reasonable regulations and paid such other reasonable charges as the Depositary may prescribe and as required by
Section 8-405 of the Uniform Commercial Code as in effect in the State of New York. 
 SECTION 2.09 Cancellation and
Destruction of Surrendered Receipts. All Receipts surrendered to the Depositary or any Depositary’s Agent shall be cancelled by the Depositary. Except as prohibited by applicable law or regulation, the Depositary is authorized, but not
required, to destroy such Receipts so cancelled. 
 SECTION 2.10 No Pre-Release. The Depositary shall not deliver any deposited
Preferred Shares evidenced by Receipts prior to the receipt and cancellation of such Receipts or other similar method used with respect to Receipts held by DTC. The Depositary shall not issue any Receipts prior to the receipt by the Depositary of
the corresponding Preferred Shares evidenced by such Receipts. At no time will any Receipts be outstanding if such Receipts do not represent Preferred Shares deposited with the Depositary. 

  
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 ARTICLE 3 

CERTAIN OBLIGATIONS OF HOLDERS OF RECEIPTS AND THE COMPANY 

SECTION 3.01 Filing Proofs, Certificates and Other Information . Any person presenting Preferred Shares for deposit or any holder
of a Receipt may be required from time to time to file with the Depositary such proof of residence, guarantee of signature or other information and to execute such certificates as the Depositary may reasonably deem necessary or proper or the Company
may reasonably require by written request to the Depositary. The Depositary or the Company may withhold or delay the delivery of any Receipt, the transfer, redemption or exchange of any Receipt, the withdrawal of the deposited Preferred Shares
represented by the Depositary Shares evidenced by any Receipt, the distribution of any dividend or other distribution or the sale of any rights or of the proceeds thereof, until such proof or other information is filed, or such certificates are
executed. 
 SECTION 3.02 Payment of Fees and Expenses. Holders of Receipts shall be obligated to make payments to the
Depositary of certain fees and expenses and taxes or other governmental charges to the extent provided in Section 3.05 and Section 5.07, or provide evidence satisfactory to the Depositary that such fees and expenses and taxes
or other governmental charges have been paid. Until such payment is made, transfer of any Receipt or any withdrawal of the Preferred Shares or money or other property, if any, represented by the Depositary Shares evidenced by such Receipt may be
refused, any dividend or other distribution may be withheld, and any part or all of the Preferred Shares or other property represented by the Depositary Shares evidenced by such Receipt may be sold for the account of the holder thereof (after
attempting by reasonable means to notify such holder a reasonable number of days prior to such sale). Any dividend or other distribution so withheld and the proceeds of any such sale may be applied to any payment of such fees or expenses, the holder
of such Receipt remaining liable for any deficiency. 
 SECTION 3.03 Representations and Warranties as to Preferred Shares. In
the case of the initial deposit of the Preferred Shares hereunder, the Company represents and warrants that such Preferred Shares and each certificate therefor are validly issued, fully paid and nonassessable. Such representations and warranties
shall survive the deposit of the Preferred Shares and the issuance of Receipts. 
 SECTION 3.04 Representation and Warranty as to
Receipts and Depositary Shares. The Company hereby represents and warrants that the Receipts, when issued, will evidence legal and valid interests in the Depositary Shares and each Depositary Share will represent a legal and valid 1/1,000th fractional interest in a deposited Preferred Share represented by such Depositary Share. Such representation and warranty shall survive the deposit of the Preferred Shares and the issuance of
Receipts evidencing the Depositary Shares. 
 SECTION 3.05 Taxes. The Company will pay any and all stock transfer, documentary,
stamp and similar taxes that may be payable in respect of any issuance or delivery of Depositary Shares or Preferred Shares or other securities issued on account of Depositary Shares or certificates representing such shares or securities. The
Company, however, will not be required to pay any such tax that may be payable in respect of any transfer involved in the issuance or delivery of Preferred Shares, Depositary Shares or other securities in a name other than that in

  
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which the Depositary Shares with respect to which such shares or other securities are issued or delivered were registered, or in respect of any payment to any person other than a payment to the
record holder thereof, and will not be required to make any such issuance, delivery or payment unless and until the person otherwise entitled to such issuance, delivery or payment has paid to the Company the amount of any such tax or has
established, to the satisfaction of the Company, that such tax has been paid or is not payable. 
 ARTICLE 4 

THE PREFERRED SHARES; NOTICES 

SECTION 4.01 Cash Distributions. Whenever Computershare shall receive any cash dividend or other cash distribution on the
deposited Preferred Shares, including any cash received upon redemption of any Preferred Shares pursuant to Section 2.03, Computershare shall, subject to Section 3.02, distribute to record holders of Receipts on the record
date fixed pursuant to Section 4.04 such amounts of such sum as are, as nearly as practicable, in proportion to the respective numbers of Depositary Shares evidenced by the Receipts held by such holders; provided, however,
that in case the Company or Computershare shall be required by law to and shall withhold from any cash dividend or other cash distribution in respect of the Preferred Shares represented by the Receipts held by any holder an amount on account of
taxes or as otherwise required by law, regulation or court process, the amount made available for distribution or distributed in respect of Depositary Shares represented by such Receipts subject to such withholding shall be reduced accordingly.
Computershare, however, shall distribute or make available for distribution, as the case may be, only such amount as can be distributed without attributing to any holder of Receipts a fraction of one cent. Any such fractional amounts shall be
rounded down to the nearest whole cent and so distributed to record holders entitled thereto and any balance not so distributable shall be held by Computershare (without liability for interest thereon) and shall be added to and be treated as part of
the next succeeding distribution to record holders of such Receipts. Each holder of a Receipt shall provide the Depositary with a properly completed Form W-8 (i.e., Form W-8BEN, Form W-8BEN-E, Form W-8EXP, Form W-8IMY, Form W-8ECI or another
applicable Form W-8) or Form W-9 (which form shall set forth such holder’s certified taxpayer identification number if requested on such form), as may be applicable. Each holder of a Receipt acknowledges that in the event of non-compliance with
the preceding sentence, the Internal Revenue Code of 1986, as amended, may require withholding by Computershare of a portion of any of the distribution to be made hereunder. 

SECTION 4.02 Distributions Other Than Cash. Whenever the Depositary shall receive any distribution other than cash on the
deposited Preferred Shares, the Depositary shall, subject to Section 3.02, distribute to record holders of Receipts on the record date fixed pursuant to Section 4.04 such amounts of the securities or property received by it
as are, as nearly as practicable, in proportion to the respective numbers of Depositary Shares evidenced by the Receipts held by such holders, in any manner that the Depositary and the Company may deem equitable and practicable for accomplishing
such distribution. If in the opinion of the Depositary such distribution cannot be made proportionately among such record holders, or if for any other reason (including any requirement that the Company or Computershare withhold an amount because of
taxes) the Depositary deems, after consultation with the Company, such distribution not to be feasible, the Depositary may, with the approval of the Company, adopt such method as it deems equitable and practicable for the purpose of effecting such
distribution, including the 

  
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sale of the property thus received, or any part thereof, in a commercially reasonable manner. The net proceeds of any 

such sale shall, subject to Sections 3.01 and 3.02 shall be distributed or made available for distribution, as the case may be, by Computershare to record
holders of receipts as provided by Section 4.01 in the case of a distribution received by cash. The Depositary shall not make any distribution of securities to the holders of Receipts unless the Company shall have provided to the Depositary an
opinion of counsel stating that such securities have been registered under the Securities Act or do not need to be registered. 

SECTION 4.03 Subscription Rights, Preferences or Privileges. If the Company shall at any time offer or cause to be offered to the
persons in whose names deposited Preferred Shares are registered on the books of the Company any rights, preferences or privileges to subscribe for or to purchase any securities or any rights, preferences or privileges of any other nature, such
rights, preferences or privileges shall in each such instance be made available by the Depositary to the record holders of Receipts in such manner as the Company shall instruct (including by the issue to such record holders of warrants representing
such rights, preferences or privileges); provided, however, that (i) if at the time of issue or offer of any such rights, preferences or privileges the Company determines upon advice of its legal counsel that it is not lawful or
feasible to make such rights, preferences or privileges available to the holders of Receipts (by the issue of warrants or otherwise) or (ii) if and to the extent instructed by holders of Receipts who do not desire to exercise such rights,
preferences or privileges, the Depositary shall then, if so directed by the Company and provided with an opinion of counsel that if Depositary undertakes such actions it will not be deemed an “issuer” under the Securities Act or an
“investment company” under the Investment Company Act of 1940, as amended, and if applicable laws or the terms of such rights, preferences or privileges so permit, sell such rights, preferences or privileges of such holders at public or
private sale, at such place or places and upon such terms as it may deem proper. The net proceeds of any such sale shall, subject to Sections 3.01 and 3.02, be distributed by the Depositary to the record holders of Receipts entitled
thereto as provided by Section 4.01 in the case of a distribution received in cash. The Depositary shall not make any distribution of such rights, preferences or privileges, unless the Company shall have provided to the Depositary an
opinion of counsel stating that such rights, preferences or privileges have been registered under the Securities Act or do not need to be registered. 

If registration under the Securities Act of the securities to which any rights, preferences or privileges relate is required in order for
holders of Receipts to be offered or sold the securities to which such rights, preferences or privileges relate, the Company agrees that it will promptly notify the Depositary of such requirement, that it will promptly file a registration statement
pursuant to the Securities Act with respect to such rights, preferences or privileges and securities and use its commercially reasonable efforts and take all steps available to it to cause such registration statement to become effective sufficiently
in advance of the expiration of such rights, preferences or privileges to enable such holders to exercise such rights, preferences or privileges. In no event shall the Depositary make available to the holders of Receipts any right, preference or
privilege to subscribe for or to purchase any securities unless and until such a registration statement shall have become effective or unless the offering and sale of such securities to such holders are exempt from registration under the provisions
of the Securities Act and the Company shall have provided to the Depositary an opinion of counsel to such effect. 

  
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 If any other action under the law of any jurisdiction or any governmental or administrative
authorization, consent or permit is required in order for such rights, preferences or privileges to be made available to holders of Receipts, the Company agrees that it will promptly notify the Depositary of such requirement and to use its
commercially reasonable efforts to take such action or obtain such authorization, consent or permit sufficiently in advance of the expiration of such rights, preferences or privileges to enable such holders to exercise such rights, preferences or
privileges. 
 The Depositary will not be deemed to have any knowledge of any item for which it is supposed to receive notification under
any section of this Deposit Agreement unless and until it has received such notification. 
 SECTION 4.04 Notice of Dividends;
Fixing of Record Date for Holders of Receipts. Whenever any cash dividend or other cash distribution shall become payable, any distribution other than cash shall be made, or any rights, preferences or privileges shall at any time be offered,
with respect to the deposited Preferred Shares, or whenever the Depositary shall receive notice of (i) any meeting at which holders of such Preferred Shares are entitled to vote or of which holders of such Preferred Shares are entitled to
notice or (ii) any election on the part of the Company to redeem any such Preferred Shares, the Depositary shall in each such instance fix a record date (which shall be the same date as the record date fixed by the Company with respect to the
Preferred Shares) (the “record date”) for the determination of the holders of Receipts who shall be entitled to receive such dividend, distribution, rights, preferences or privileges or the net proceeds of the sale thereof, to give
instructions for the exercise of voting rights at any such meeting or to receive notice of such meeting or whose Depositary Shares are to be so redeemed. 

SECTION 4.05 Voting Rights . Upon receipt of notice of any meeting at which the holders of deposited Preferred Shares are entitled
to vote, the Depositary shall, as soon as practicable thereafter, mail to the record holders of Receipts a notice, which shall be provided by the Company and which shall contain (i) such information as is contained in such notice of meeting,
(ii) a statement that the holders of Receipts at the close of business on a specified record date fixed pursuant to Section 4.04 will be entitled, subject to any applicable provision of law, to instruct the Depositary as to the
exercise of the voting rights pertaining to the amount of Preferred Shares represented by their respective Depositary Shares and (iii) a brief statement as to the manner in which such instructions may be given. Upon the written request of a
holder of a Receipt on such record date, the Depositary shall, insofar as practicable, vote or cause to be voted the amount of Preferred Shares represented by the Depositary Shares evidenced by such Receipt in accordance with the instructions set
forth in such request. To the extent any such instructions request the voting of a fractional interest of a deposited Preferred Share, the Depositary shall aggregate such interest with all other fractional interests resulting from requests with the
same voting instructions and shall vote the number of whole votes resulting from such aggregation in accordance with the instructions received in such requests. Each Preferred Share is entitled to one vote and, accordingly, each Depositary Share is
entitled to 1/1,000th of a vote. The Company hereby agrees to take all reasonable action that may be deemed necessary by the Depositary in order to enable the Depositary to vote such Preferred
Shares or cause such Preferred Shares to be voted. In the absence of specific instructions from the holder of a Receipt, the Depositary will refrain from voting any Preferred Shares represented by the Depositary Shares evidenced by such Receipt.

  
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 SECTION 4.06 Changes Affecting Preferred Shares and Reclassifications, Recapitalizations,
Etc. Upon any change in liquidation preference, par or stated value, split-up, combination or any other reclassification of the Preferred Shares, or upon any recapitalization, reorganization, merger, amalgamation or consolidation to which the
Company is a party or sale of all or substantially all of the Company’s assets, the Depositary shall, upon the written instructions of the Company setting forth any of the following adjustments, (i) reflect such adjustments in the
Depositary’s books and records in (a) the fraction of an interest in a Preferred Share represented by one Depositary Share and (b) the ratio of the redemption price per Depositary Share to the redemption price of a Preferred Share, as
may be required by or as is consistent with the provisions of the Certificate of Designations to fully reflect the effects of such change in liquidation preference, par or stated value, split-up, combination or other reclassification of Preferred
Shares, of such recapitalization, reorganization, merger, amalgamation or consolidation or sale and (ii) treat any shares of stock or other securities or property (including cash) that shall be received by the Depositary in exchange for or in
respect of the Preferred Shares as new deposited property under this Deposit Agreement, and Receipts then outstanding shall thenceforth represent the proportionate interests of holders thereof in the new deposited property so received in exchange
for or in respect of such Preferred Shares. In any such case the Depositary may, upon the receipt of written request of the Company, execute and deliver additional Receipts, or may call for the surrender of all outstanding Receipts to be exchanged
for new Receipts specifically describing such new deposited property. 
 Anything to the contrary herein notwithstanding, holders of
Receipts shall have the right from and after the effective date of any such change in liquidation preference, par or stated value, split-up, combination or other reclassification of the Preferred Shares for any such recapitalization, reorganization,
merger, amalgamation or consolidation or sale to the extent that holders of Preferred Shares had the right, prior to or as of the applicable effective date, to convert, exchange or surrender the Preferred Share represented thereby only into or for,
as the case may be, the kind and amount of shares of stock and other securities and property and cash into which such Preferred Shares might have been exchanged or surrendered immediately prior to the effective date of such transaction. 

SECTION 4.07 Inspection of Reports. The Depositary shall make available for inspection by holders of Receipts at the Depositary
Office, and at such other places as it may from time to time deem advisable during normal business hours, any reports and communications received from the Company that are both received by the Depositary as the holder of deposited Preferred Shares
and made generally available to the holders of the Preferred Shares. In addition, the Depositary shall transmit, upon written request by the Company, certain notices and reports to the holders of Receipts as provided in Section 5.05.

 SECTION 4.08 Lists of Receipt Holders. Promptly upon request from time to time by the Company, the Registrar shall furnish to
the Company a list, as of a recent date specified by the Company, of the names, addresses and holdings of Depositary Shares of all persons in whose names Receipts are registered on the books of the Registrar. 

  
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 SECTION 4.09 Withholding. Notwithstanding any other provision of this Deposit
Agreement, in the event that the Depositary determines that any distribution in property is subject to any tax or other governmental charge which the Depositary is obligated by law to withhold, the Depositary may dispose of, by public or private
sale, all or a portion of such property in such amounts and in such manner as the Depositary deems necessary and practicable to pay such taxes, and the Depositary shall distribute the net proceeds of any such sale or the balance of any such property
after deduction of such taxes to the holders of Receipts entitled thereto in proportion to the number of Depositary Shares held by them, respectively; provided, however, that in the event the Depositary determines that such
distribution of property is subject to withholding tax only with respect to some but not all holders of Receipts, the Depositary will use its best efforts (i) to sell only that portion of such property distributable to such holders that is
required to generate sufficient proceeds to pay such withholding tax and (ii) to effect any such sale in such a manner so as to avoid affecting the rights of any other holders of Receipts to receive such distribution in property. 

ARTICLE 5 
 THE
DEPOSITARY AND THE COMPANY 
 SECTION 5.01 Maintenance of Offices, Agencies and Transfer Books by the Depositary and the
Registrar. The Depositary shall maintain at the Depositary Office facilities for the execution and delivery, transfer, surrender and exchange, split-up, combination and redemption of Receipts and deposit and withdrawal of Preferred Shares and at
the offices of the Depositary’s Agents, if any, facilities for the delivery, transfer, surrender and exchange, split-up, combination and redemption of Receipts and deposit and withdrawal of Preferred Shares, all in accordance with the
provisions of this Deposit Agreement. 
 The Registrar shall keep books at the Depositary Office for the registration and transfer of
Receipts, which books at all reasonable times shall be open for inspection by the record holders of Receipts as provided by applicable law. The Company may cause the Registrar to close such books, at any time or from time to time, when deemed
expedient by it in connection with the performance of its duties hereunder. 
 If the Receipts or the Depositary Shares evidenced thereby or
the Preferred Shares represented by such Depositary Shares shall be listed on the New York Stock Exchange or any other stock exchange, the Depositary may, with the written approval of the Company, appoint a registrar (acceptable to the Company) for
registration of such Receipts or Depositary Shares in accordance with the requirements of such exchange. Such registrar (which may be the Registrar if so permitted by the requirements of such exchange) may be removed and a substitute registrar
appointed by the Registrar upon the request or with the written approval of the Company. If the Receipts, such Depositary Shares or such Preferred Shares are listed on one or more other stock exchanges, the Registrar will, at the request and expense
of the Company, arrange such facilities for the delivery, transfer, surrender, redemption and exchange of such Receipts, such Depositary Shares or such Preferred Shares as may be required by law or applicable stock exchange regulations. 

SECTION 5.02 Prevention or Delay in Performance by the Depositary, the Depositary’s Agents, the Registrar or the Company. None
of the Depositary, any Depositary’s Agent, any Registrar, any Transfer Agent, or the Company shall incur any liability to any holder of any Receipt, if by reason of any provision of any present or future law or regulation thereunder of the
United States of America or of any other governmental authority or, in the case 

  
 16 

 
of the Depositary, the Depositary’s Agent or the Registrar or Transfer Agent, by reason of any provision, present or future, of the Certificate of Designations or, in the case of the
Company, the Depositary, the Depositary’s Agent, the Transfer Agent or the Registrar, by reason of any act of God or war or other circumstance beyond the control of the relevant party, the Depositary, any Depositary’s Agent, the Transfer
Agent, the Registrar or the Company shall be prevented or forbidden from doing or performing any act or thing that the terms of this Deposit Agreement provide shall be done or performed; nor shall the Depositary, any Depositary’s Agent, the
Transfer Agent, any Registrar or the Company incur any liability to any holder of a Receipt by reason of any nonperformance or delay, caused as aforesaid, in the performance of any act or thing that the terms of this Deposit Agreement provide shall
or may be done or performed, or by reason of any exercise of, or failure to exercise, any discretion provided for in this Deposit Agreement. 

SECTION 5.03 Obligations of the Depositary, the Depositary’s Agents, the Registrar and the Company. The Company does not
assume any obligation and shall not be subject to any liability under this Deposit Agreement or any Receipt to holders of Receipts other than from acts or omissions arising out of conduct constituting bad faith, gross negligence or willful
misconduct in the performance of such duties as are specifically set forth in this Deposit Agreement (which bad faith, gross negligence or willful misconduct must be determined by a final, non-appealable order, judgment, decree or ruling of a court
of competent jurisdiction). Neither the Depositary nor any Depositary’s Agent nor any Transfer Agent or Registrar assumes any obligation and shall not be subject to any liability under this Deposit Agreement to holders of Receipts, the Company
or any other person or entity other than for its bad faith, gross negligence or willful misconduct (which bad faith, gross negligence or willful misconduct must be determined by a final, non-appealable order, judgment, decree or ruling of a court of
competent jurisdiction). Notwithstanding anything to the contrary contained herein, neither the Depositary, nor any Depositary’s Agent nor any Transfer Agent or Registrar shall be liable for any special, indirect, incidental, consequential,
punitive or exemplary damages, including but not limited to, lost profits, even if such person or entity alleged to be liable has knowledge of the possibility of such damages. Notwithstanding anything contained herein to the contrary, the
Depositary’s aggregate liability during any term of this Agreement with respect to, arising from, or arising in connection with this Agreement, or from all services provided or omitted to be provided under this Agreement, whether in contract,
or in tort, or otherwise, is limited to, and shall not exceed, the amounts paid hereunder by the Company to Depositary as fees and charges, but not including reimbursable expenses. 

None of the Depositary, any Depositary’s Agent, any Registrar or Transfer Agent or the Company shall be under any obligation to appear
in, prosecute or defend any action, suit or other proceeding with respect to the deposited Preferred Shares, Depositary Shares or Receipts that in its opinion may involve it in expense or liability, unless indemnity satisfactory to it against all
expense and liability be furnished as often as may be required. 
 None of the Depositary, any Depositary’s Agent, any Registrar or
Transfer Agent or the Company shall be liable for any action or any failure to act by it in reliance upon the advice of legal counsel or accountants, or information provided by any person presenting Preferred Shares for deposit or any holder of a
Receipt. The Depositary, any Depositary’s Agent, any Registrar or Transfer Agent and the Company may each rely and shall each be protected in acting upon any written notice, request, direction or other document believed by it to be genuine and
to have been signed or presented by the proper party or parties. 

  
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 In the event the Depositary shall receive conflicting claims, requests or instructions from any
holders of Receipts, on the one hand, and the Company, on the other hand, the Depositary shall be entitled to act on such claims, requests or instructions received from the Company, and shall incur no liability and shall be entitled to the full
indemnification set forth in Section 5.06 in connection with any action so taken. 
 The Depositary shall not be responsible for
any failure to carry out any instruction to vote any of the deposited Preferred Shares or for the manner or effect of any such vote made, as long as any such action or non-action does not result from bad faith, gross negligence or willful misconduct
of the Depositary (which bad faith, gross negligence or willful misconduct must be determined by a final, non-appealable order, judgment, decree or ruling of a court of competent jurisdiction). The Depositary undertakes, and any Registrar or
Transfer Agent shall be required to undertake, to perform such duties and only such duties as are specifically set forth in this Deposit Agreement, and no implied covenants or obligations shall be read into this Agreement against the Depositary or
any Registrar or Transfer Agent. 
 The Depositary, its parent, affiliate, or subsidiaries, any Depositary’s Agent, and any Registrar
or Transfer Agent may own, buy, sell or deal in any class of securities of the Company and its affiliates and in Receipts or Depositary Shares or become pecuniarily interested in any transaction in which the Company or its affiliates may be
interested or contract with or lend money to or otherwise act as fully or as freely as if it were not the Depositary or the Depositary’s Agent hereunder. The Depositary may also act as transfer agent or registrar of any of the securities of the
Company and its affiliates or act in any other capacity for the Company or its affiliates. 
 It is intended that neither the Depositary nor
any Depositary’s Agent shall be deemed to be an “issuer” of the securities under the federal securities laws or applicable state securities laws, it being expressly understood and agreed that the Depositary and any Depositary’s
Agent are acting only in a ministerial capacity as Depositary for the deposited Preferred Shares; provided, however, that the Depositary agrees to comply with all information reporting and withholding requirements applicable to it
under law or this Deposit Agreement in its capacity as Depositary. 
 Neither the Depositary (or its officers, directors, employees, agents
or affiliates) nor any Depositary’s Agent makes any representation or has any responsibility as to the validity of the registration statement pursuant to which the Depositary Shares are registered under the Securities Act, the deposited
Preferred Shares, the Depositary Shares, the Receipts (except its countersignature thereon) or any instruments referred to therein or herein, or as to the correctness of any statement made therein or herein; provided, however, that the
Depositary is responsible for its representations in this Deposit Agreement. 
 The Company agrees that it will register the deposited
Preferred Shares and the Depositary Shares in accordance with the applicable securities laws. 

  
 18 

 In the event the Depositary, the Depositary’s Agent or any Registrar or Transfer Agent
believes any ambiguity or uncertainty exists in any notice, instruction, direction, request or other communication, paper or document received by it pursuant to this Deposit Agreement, the Depositary, the Depositary’s Agent, Transfer Agent or
Registrar shall promptly notify the Company of the details of such alleged ambiguity or uncertainty, and may, in its sole discretion, refrain from taking any action, and the Depositary, the Depositary’s Agent, Transfer Agent or Registrar shall
be fully protected and shall incur no liability to any person from refraining from taking such action, absent bad faith, gross negligence or willful misconduct (which bad faith, gross negligence or willful misconduct must be determined by a final,
non-appealable order, judgment, decree or ruling of a court of competent jurisdiction), unless and until (i) the rights of all parties have been fully and finally adjudicated by a court of appropriate jurisdiction or (ii) the Depositary,
the Depositary’s Agent, Transfer Agent or Registrar receives written instructions with respect to such matter signed by the Company that eliminates such ambiguity or uncertainty to the satisfaction of the Depositary, the Depositary’s
Agent, Transfer Agent or Registrar. 
 Whenever in the performance of its duties under this Deposit Agreement, the Depositary, the
Depositary’s Agent, Transfer Agent or Registrar shall deem it necessary or desirable that any fact or matter be proved or established by the Company prior to taking, suffering or omitting to take any action hereunder, such fact or matter
(unless other evidence in respect thereof be herein specifically prescribed) may be deemed to be conclusively provided and established by a certificate signed by any one of the Chief Executive Officer, Chief Financial Officer, General Counsel, Chief
Accounting Officer or Secretary of the Company and delivered to the Depositary, the Depositary’s Agent, Transfer Agent or Registrar; and such certificate shall be full and complete authorization and protection to the Depositary, the
Depositary’s Agent, Transfer Agent or Registrar and the Depositary, the Depositary’s Agent, Transfer Agent or Registrar shall incur no liability for or in respect of any action taken, suffered or omitted by it under the provisions of this
Deposit Agreement in reliance upon such certificate. The Depositary, the Depositary’s Agent, Transfer Agent or Registrar shall not be liable for or by reason of any of the statements of fact or recitals contained in this Deposit Agreement or in
the Receipts (except its countersignature thereof) or be required to verify the same, and all such statements and recitals are and shall be deemed to have been made by the Company only. 

The Depositary, the Depositary’s Agent, Transfer Agent or Registrar will not be under any duty or responsibility to ensure compliance
with any applicable federal or state securities laws in connection with the issuance, transfer or exchange of the Receipts, Preferred Shares or Depositary Shares. 

Notwithstanding anything herein to the contrary, no amendment to the Certificate of Designations shall affect the rights, duties, obligations
or immunities of the Depositary, Transfer Agent, the Depositary’s Agent or Registrar hereunder. 
 The Depositary, any Transfer Agent
and any Registrar hereunder: 
 (i) shall have no duties or obligations other than those specifically set forth herein (and no implied duties
or obligations), or as may subsequently be agreed to in writing by the parties; 

  
 19 

 (ii) shall have no obligation to make payment hereunder unless the Company shall have provided
the necessary federal or other immediately available funds or securities or property, as the case may be, to pay in full amounts due and payable with respect thereto; 

(iii) shall not be obligated to take any legal or other action hereunder; if, however, the Depositary determines to take any legal or other
action hereunder, and, where the taking of such action might in the Depositary’s judgment subject or expose it to any expense or liability, the Depositary shall not be required to act unless it shall have been furnished with an indemnity
satisfactory to it; 
 (iv) may rely on and shall be authorized and protected in acting or failing to act upon any certificate, instrument,
opinion, notice, letter, facsimile transmission or other document or security delivered to the Depositary and believed by the Depositary to be genuine and to have been signed by the proper party or parties, and shall have no responsibility for
determining the accuracy thereof; 
 (v) may rely on and shall be authorized and protected in acting or failing to act upon the written,
telephonic, electronic and oral instructions, with respect to any matter relating to the Depositary’s actions as depositary covered by this Deposit Agreement (or supplementing or qualifying any such actions) of officers of the Company; 

(vi) may consult counsel satisfactory to it, and the advice of such counsel shall be full and complete authorization and protection in respect
of any action taken, suffered or omitted by the Depositary hereunder in accordance with the advice of such counsel; 
 (vii) shall not be
called upon at any time to advise any person with respect to the Depositary Shares or Receipts; 
 (viii) shall not be liable or responsible
for any recital or statement contained in any documents relating hereto or the Depositary Shares or Receipts; and 
 (ix) shall not be liable
in any respect on account of the identity, authority or rights of the parties (other than with respect to the Depositary) executing or delivering or purporting to execute or deliver this Deposit Agreement or any documents or papers deposited or
called for under this Deposit Agreement. 
 The obligations of the Company and the rights of the Depositary set forth in this
Section 5.03 shall survive the replacement, removal or resignation of any Depositary, Registrar, Transfer Agent or Depositary’s Agent or termination of this Deposit Agreement. 

SECTION 5.04 Resignation and Removal of the Depositary; Appointment of Successor Depositary. The Depositary may at any time resign
as Depositary hereunder by notice of its election to do so delivered to the Company, such resignation to take effect upon the appointment of a successor depositary and its acceptance of such appointment as hereinafter provided. 

The Depositary may at any time be removed by the Company by notice of such removal delivered to the Depositary, such removal to take effect
upon the appointment of a successor depositary and its acceptance of such appointment as hereinafter provided. Upon any such removal or appointment, the Company shall send notice thereof by first-class mail, postage prepaid, to the holders of
Receipts. 

  
 20 

 In case at any time the Depositary acting hereunder shall resign or be removed, the Company
shall, within 60 days after the delivery of the notice of resignation or removal, as the case may be, appoint a successor depositary, which shall be an entity having its principal office in the United States of America and having a combined capital
and surplus of at least $50,000,000. If a successor depositary shall not have been appointed and have accepted appointment in 60 days, the resigning Depositary may petition a court of competent jurisdiction to appoint a successor depositary. Every
successor depositary shall execute and deliver to its predecessor and to the Company an instrument in writing accepting its appointment hereunder, and thereupon such successor depositary, without any further act or deed, shall become fully vested
with all the rights, powers, duties and obligations of its predecessor and for all purposes shall be the Depositary under this Deposit Agreement, and such predecessor, upon payment of all sums due it and on the written request of the Company, shall
promptly execute and deliver an instrument transferring to such successor all rights and powers of such predecessor hereunder, shall duly assign, transfer and deliver all rights, title and interest in the deposited Preferred Shares and any moneys or
property held hereunder to such successor and shall deliver to such successor a list of the record holders of all outstanding Receipts. 

Any corporation or other entity into or with which the Depositary may be merged, consolidated or converted, or any corporation or other entity
to which all or a substantial part of the assets of the Depositary may be transferred, shall be the successor of such Depositary without the execution or filing of any document or any further act. Such successor depositary may execute the Receipts
either in the name of the predecessor depositary or in the name of the successor depositary. 
 The provisions of this
Section 5.04 as they apply to the Depositary apply to the Registrar and Transfer Agent, as if specifically enumerated herein. 

SECTION 5.05 Notices, Reports and Documents. The Company agrees that it will deliver to the Depositary, and the Depositary, if
requested in writing by the Company, will promptly after receipt of such notice, transmit to the record holders of Receipts, in each case at the address recorded in the Depositary’s books, copies of all notices and reports generally made
available by the Company to holders of the Preferred Shares and not otherwise made publicly available. Such transmission will be at the Company’s expense and the Company will provide the Depositary with such number of copies of such documents
as the Depositary may reasonably request. In addition, the Depositary will transmit to the record holders of Receipts at the Company’s expense such other documents as may be requested by the Company. 

SECTION 5.06 Indemnification by the Company. The Company shall indemnify the Depositary, any Depositary’s Agent and any
Transfer Agent or Registrar against, and hold each of them harmless from, any loss, liability, damage, cost or expense (including the costs and expenses of defending itself) which may arise out of (i) acts performed or omitted in connection
with this Deposit Agreement and the Receipts (a) by the Depositary, any Transfer Agent or Registrar or any of their respective agents (including any Depositary’s Agent), except for any liability arising out of bad faith, gross negligence
or willful misconduct (which bad faith, gross 

  
 21 

 
negligence or willful misconduct must be determined by a final, non-appealable order, judgment, decree or ruling of a court of competent jurisdiction) on the respective parts of any such person
or persons, or (b) by the Company or any of its agents, or (ii) the offer, sale or registration of the Receipts or Preferred Shares pursuant to the provisions hereof. The obligations of the Company and the rights of the Depositary set
forth in this Section 5.06 shall survive the replacement, removal or resignation of any Depositary, Registrar, Transfer Agent or Depositary’s Agent or termination of this Deposit Agreement. In no event shall the Depositary have any
right of set off or counterclaim against the Depositary Shares or the Preferred Shares. 
 SECTION 5.07 Fees, Charges and
Expenses. No charges and expenses of the Depositary or any Depositary’s Agent hereunder shall be payable by any person, except as provided in this Section 5.07. The Company shall pay all transfer and other taxes, assessments and
governmental charges arising solely from the existence of the depositary arrangements. The Company shall also pay all fees and expenses of the Depositary in connection with the initial deposit of the Preferred Shares and the initial issuance of the
Depositary Shares evidenced by the Receipts, any redemption of the Preferred Shares at the option of the Company and all withdrawals of the Preferred Shares by holders of Receipts. All other fees and expenses of the Depositary and any
Depositary’s Agent hereunder and of any Registrar or Transfer Agent (including, in each case, fees and expenses of counsel) incurred in the preparation, delivery, amendment, administration and execution of this Deposit Agreement and incident to
the performance of their respective obligations hereunder will be paid by the Company as previously agreed between the Depositary and the Company. The Depositary (and if applicable, the Transfer Agent and Registrar) shall present its statement for
fees and expenses to the Company once every three months or at such other intervals as the Company and the Depositary may agree. 

SECTION 5.08 Tax Compliance. 

(a) The Depositary, on its own behalf and on behalf of the Company will comply with all applicable certification, information reporting and
withholding (including “backup” withholding) requirements imposed by applicable tax laws, regulations or administrative practice with respect to (i) any payments made with respect to the Depositary Shares or (ii) the issuance,
delivery, holding, transfer, redemption or exercise of rights under the Receipts or the Depositary Shares. Such compliance shall include, without limitation, the preparation and timely filing of required returns and the timely payment of all amounts
required to be withheld to the appropriate taxing authority or its designated agent. 
 (b) The Depositary shall comply with any direction
received from the Company with respect to the application of such requirements to particular payments or holders or in other particular circumstances, and may for purposes of this Deposit Agreement rely on any such direction in accordance with the
provisions of Section 5.3 hereof 
 (c) The Depositary shall maintain all appropriate records documenting compliance with such
requirements, and shall make such records available on request to the Company or to its authorized representatives. 

  
 22 

 ARTICLE 6 

AMENDMENT AND TERMINATION 

SECTION 6.01 Amendment. The form of the Receipts and any provision of this Deposit Agreement may at any time and from time to time
be amended by agreement between the Company and the Depositary without the consent of holders of Receipts in any respect that the Company and the Depositary may deem necessary or desirable; provided, however, that no such amendment
(other than any change in the fees of any Depositary, Registrar or Transfer Agent that are payable by the Company) that (i) shall materially and adversely alter the rights of the holders of Receipts or (ii) would be materially and
adversely inconsistent with the rights granted to the holders of the Preferred Shares pursuant to the Certificate of Designations shall be effective unless such amendment shall have been approved by the holders of Receipts evidencing at least
three-fourths of the Depositary Shares then outstanding. In no event shall any amendment impair the right, subject to the provisions of Sections 2.06 and 2.07 and Article 3, of any holder of any Receipts evidencing such
Depositary Shares to surrender any Receipt with instructions to the Depositary to deliver to the holder the deposited Preferred Shares and all money and other property, if any, represented thereby, except in order to comply with mandatory provisions
of applicable law. Every holder of an outstanding Receipt at the time any such amendment becomes effective shall be deemed, by continuing to hold such Receipt, to consent and agree to such amendment and to be bound by this Deposit Agreement as
amended thereby. As a condition precedent to the Depositary’s execution of any amendment, the Company shall deliver to the Depositary a certificate from a duly authorized officer of the Company that states that the proposed amendment is in
compliance with the terms of this Section 6.01. 
 SECTION 6.02 Termination. This Deposit Agreement may be
terminated by the Company upon not less than 30 days’ prior written notice to the Depositary if the holders of Receipts evidencing a majority of the Depositary Shares then outstanding consent to such termination, whereupon the Depositary shall
deliver or make available to each holder of a Receipt, upon surrender of the Receipt held by such holder, such number of whole or fractional shares of deposited Preferred Shares as are represented by the Depositary Shares evidenced by such Receipt,
together with any other property held by the Depositary in respect of such Receipt. This Deposit Agreement will automatically terminate if (i) all outstanding Depositary Shares shall have been redeemed in accordance with the provisions hereof
or (ii) there shall have been made a final distribution in respect of the deposited Preferred Shares in connection with any liquidation, dissolution or winding up of the Company and such distribution shall have been distributed to the holders
of Receipts entitled thereto. 
 Upon the termination of this Deposit Agreement, the Company shall be discharged from all obligations under
this Deposit Agreement except for its obligations to the Depositary, any Depositary’s Agent and any Transfer Agent or Registrar under Sections 5.03, 5.06 and 5.07.  

ARTICLE 7 
 MISCELLANEOUS

 SECTION 7.01 Counterparts. This Deposit Agreement may be executed in any number of counterparts, and by each of the
parties hereto on separate counterparts, each of which counterparts, when so executed and delivered, shall be deemed an original, but all such counterparts taken together shall constitute one and the same instrument. Delivery of an executed
counterpart of a signature page to this Deposit Agreement by facsimile, PDF or other secure electronic means shall be effective as delivery of a manually executed counterpart of this Deposit Agreement. 

  
 23 

 SECTION 7.02 Exclusive Benefits of Parties. This Deposit Agreement is for the
exclusive benefit of the parties hereto, and their respective successors hereunder, and shall not be deemed to give any legal or equitable right, remedy or claim to any other person whatsoever. 

SECTION 7.03 Invalidity of Provisions. In case any one or more of the provisions contained in this Deposit Agreement or in the
Receipts should be or become invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein or therein shall in no way be affected, prejudiced or disturbed thereby;
provided, however, that if such provision affects the rights, duties, liabilities or obligations of the Depositary, the Depositary shall be entitled to resign immediately. 

SECTION 7.04 Notices. Any and all notices to be given to the Company hereunder or under the Receipts shall be in writing and shall
be deemed to have been duly given if personally delivered or sent by mail, or by facsimile transmission confirmed by letter, addressed to the Company at: 

Endurance Specialty Holdings Ltd. 

Waterloo House 
 100 Pitts Bay
Road 
 HM 08, Bermuda 
 or at any other
address of which the Company shall have notified the Depositary in writing. 
 Any notices to be given to the Depositary, Transfer Agent or
Registrar hereunder or under the Receipts shall be in writing and shall be deemed to have been duly given if personally delivered or sent by mail, or telecopier confirmed by letter, addressed to the Depositary: 

Computershare Trust Company, N.A. 

c/o Computershare Inc. 
 250
Royall Street 
 Canton, Massachusetts 02021 

Attention: General Counsel 

Facsimile: 781-575-4210 
 Any
notices given to any record holder of a Receipt hereunder or under the Receipts shall be in writing and shall be deemed to have been duly given if transmitted through the facilities of DTC in accordance with DTC’s procedures or personally
delivered or sent by mail, recognized next-day courier service or telecopier confirmed by letter, addressed to such record holder at the address of such record holder as it appears on the books of the Depositary; provided, that any record
holder may direct the Depositary to deliver notices to such record holder at an alternate address or in a specific manner that is reasonably requested by such record holder in a written request timely filed with the Depositary and that is reasonably
acceptable to the Depositary. 

  
 24 

 Delivery of a notice sent by mail shall be deemed to be effected at the time when a duly
addressed letter containing the same (or a confirmation thereof in the case of a facsimile message) is deposited, postage prepaid, in a post office letter box, or in the case of a next-day courier service, when deposited with such courier, courier
fees prepaid. The Depositary or the Company may, however, act upon any facsimile message received by it from the other or from any holder of a Receipt, notwithstanding that such facsimile message shall not subsequently be confirmed by letter as
aforesaid. 
 SECTION 7.05 Depositary’s Agents. The Depositary may from time to time appoint Depositary’s Agents to
act in any respect for the Depositary for the purposes of this Deposit Agreement and may at any time appoint additional Depositary’s Agents and vary or terminate the appointment of such Depositary’s Agents. The Depositary will notify the
Company of any such action. 
 SECTION 7.06 Holders of Receipts Are Parties. The holders of Receipts from time to time shall be
deemed to be parties to this Deposit Agreement and shall be bound by all of the terms and conditions hereof and of the Receipts by acceptance of delivery thereof to the same extent as though such person executed this Deposit Agreement. 

SECTION 7.07 Governing Law. This Deposit Agreement and the Receipts and all rights hereunder and thereunder and provisions hereof
and thereof shall be governed by, and construed in accordance with, the law of the State of New York applicable to agreements made and to be performed in said State, without regard to conflicts of laws principles that would result in the application
of the law of any state other than the State of New York. 
 SECTION 7.08 Inspection of Deposit Agreement and Certificate of
Designations. Copies of this Deposit Agreement and the Certificate of Designations shall be filed with the Depositary and the Depositary’s Agents and shall be open to inspection during business hours at the Depositary Office by any holder
of any Receipt. 
 SECTION 7.09 Headings. The headings of articles and sections in this Deposit Agreement and in the form of the
Receipt set forth in Exhibit A hereto have been inserted for convenience only and are not to be regarded as a part of this Deposit Agreement or to have any bearing upon the meaning or interpretation of any provision contained herein or in the
Receipts. 
 SECTION 7.10 Confidentiality. The Depositary and the Company agree that all books, records, information and data
pertaining to the business of the other party, including, inter alia, personal, non-public holder information, which are exchanged or received pursuant to the negotiation or the carrying out of this Deposit Agreement, shall remain confidential, and
shall not be voluntarily disclosed to any other person, except as may be required by law or legal process. 
 SECTION 7.11 Further
Assurances. From time-to-time and after the date hereof, the Company agrees that it will perform, acknowledge and deliver or cause to be performed, acknowledged and delivered all such further and other acts, documents, instruments and assurances
as may be reasonably required by the Depositary for the carrying out or performing by the Depositary of the provisions of this Agreement. 

  
 25 

 [Signature Page Follows] 

  
 26 

 IN WITNESS WHEREOF, Endurance Specialty Holdings Ltd. and Computershare Inc. and Computershare
Trust Company, N.A. have duly executed this Deposit Agreement as of the day and year first set forth above and all holders of Receipts shall become parties hereto by and upon acceptance by them of delivery of Receipts issued in accordance with the
terms hereof. 
  

			
	ENDURANCE SPECIALTY HOLDINGS LTD.
		
	By:	 	/s/ John V. Del Col
		 	Name: John V. Del Col
		 	Title: General Counsel and Secretary
	
	COMPUTERSHARE TRUST COMPANY, N.A., and COMPUTERSHARE INC., in their collective capacity as Depositary, and in their respective capacities as , Registrar, Transfer Agent, and Dividend Disbursing Agent and Redemption
Agent
		
	 By:
	 	/s/ Dennis V. Moccia
		 	Manager, Contract Administration

 [Signature Page to Deposit Agreement]ex101to8k07319001_1202015.htm

Exhibit 10.1

 

EMPLOYMENT AGREEMENT

 

This EMPLOYMENT AGREEMENT (the “Agreement”) is entered into as of November 23, 2015 (the “Effective Date”), by and between Aerojet Rocketdyne Holdings, Inc. (“Aerojet Rocketdyne” or the “Company), having its principal place of business at 2001 Aerojet Road, Rancho Cordova, California 95742 and Eileen P. Drake (“Executive”, and the Company and Executive collectively referred to as the “Parties”).

 

W I T N E S S E T H:

 

WHEREAS, the Company desires to continue to employ Executive as the Chief Executive Officer and President (“CEO”) of the Company, and the Parties desire to enter into this Agreement embodying the terms of such employment;

 

NOW, THEREFORE, in consideration of the premises and the mutual covenants and promises of the Parties, the Parties, intending to be legally bound, agree as follows:

 

1.             Title and Job Duties.

 

(a)            Subject to the terms and conditions set forth in this Agreement, the Company agrees to continue to employ Executive as CEO.  In this capacity, Executive shall have the duties, authorities and responsibilities commensurate with the duties, authorities and responsibilities of persons in similar capacities in similarly sized companies, and such other duties, authorities and responsibilities as the Board of Directors of the Company (the “Board”) shall designate from time to time that are not inconsistent with Executive’s position as CEO. Executive shall report directly to the Board and the Chairman of the Board.  All employees of the Company shall report directly to Executive or her designee.

 

(b)            Executive accepts such employment and agrees, during the term of her employment, to devote her full business and professional time and energy to the Company.  Executive agrees to carry out and abide by all lawful directions of the Board and the Chairman of the Board that are consistent with her position as Chief Executive Officer.

 

(c)            Without limiting the generality of the foregoing, Executive shall not, without the written approval of the Company, render services of a business or commercial nature on her own behalf or on behalf of any other person, firm, or corporation, whether for compensation or otherwise, during her employment hereunder, provided that the foregoing shall not prevent Executive from (i) serving on the boards of directors of non-profit organizations and, with the prior written approval of the Board, other for-profit companies, (ii) participating in charitable, civic, educational, professional, community or industry affairs, and (iii) managing Executive’s passive personal investments so long as such activities in the aggregate do not materially interfere or conflict with Executive’s duties or create a potential business or fiduciary conflict.

 

(d)            Executive may own passive investments in Competing Businesses, defined below, (including, but not limited to, indirect investments through mutual funds), provided the securities of the Competing Business are publicly traded and Executive does not own or control more than one percent (1%) of the outstanding voting rights or equity of the Competing Business.  “Competing Business” means any corporation, partnership, limited liability company, university, government agency or other entity or person (other than the Company) which is engaged in the development, manufacture, marketing, distribution or sale of, or research directed to aerospace and defense systems and in the Eastern Sacramento area, real estate development.

 

  

  

  

 

2.             Salary and Additional Compensation.

 

(a)            Base Salary.  The Company shall pay to Executive an annual base salary (“Base Salary”) of seven hundred thousand dollars ($700,000), less applicable withholdings and deductions, in accordance with the Company’s normal payroll procedures, with such base salary effective retroactive to June 1, 2015.  The Company will pay to Executive a “catch-up payment” on the first payroll date following the date on which the Base Salary under this Agreement is effective.  The catch-up payment amount will be a lump sum payment equal to the difference between the salary Executive would have received if this Agreement had been in place on June 1, 2015 and the amount of salary she actually received for the period from June 1, 2015 to the catch-up payment date.  The Board may increase Executive’s annual Base Salary from time to time in its sole and absolute discretion.

 

(b)            Promotion Bonus.  The Company shall pay to Executive a one-time bonus (the “Promotion Bonus”) of $200,000, less applicable withholdings and deductions.  The Company will pay the Promotion Bonus to Executive on the first payroll date following the Effective Date.

 

(c)            Bonus.  Executive shall be eligible for an annual bonus based on a target opportunity pursuant to the Company’s Annual Incentive Plan (“Target Bonus”) which shall be adopted annually by the Board with the target as follows:

 

(i)        For fiscal year 2015:

 

	
  

	
(A)            For the period December 1, 2014 – May 31, 2015 (the first six months of fiscal year 2015), a target of up to seventy-five percent (75%) of Executive’s annual Base Salary equaling five hundred thousand dollars ($500,000) (with such target bonus to be pro-rated to reflect the partial performance period), resulting in a pro-rated target incentive of one hundred and eighty-seven thousand dollars ($187,000); and,

 

	
  

	
(B)             for the period June 1, 2015 – November 30, 2015 (the last six months of fiscal year 2015), a target of up to one hundred percent (100%) of Executive’s annual Base Salary equaling seven hundred thousand dollars ($700,000) (with such target bonus to be pro-rated to reflect the partial performance period), resulting in a target incentive of three hundred and fifty thousand dollars ($350,000).

 

  

2

  

 

(ii)       The annual incentive for fiscal year 2015 will be calculated based on the performance metrics previously established for fiscal year 2015 and will be paid at the same time as when normal course annual incentives amounts are paid.

 

(iii)      For the fiscal year 2016 and all future fiscal years thereafter, a target of one  hundred percent (100%) of the annual Base Salary in effect for the then-current fiscal year.  The annual incentive for fiscal year 2016 and all future fiscal years thereafter will be calculated based on the performance metrics for each respective fiscal year, and will be paid at the same time as when normal course annual incentives amounts are paid.  The Board may increase Executive’s Target Bonus for fiscal year 2016 and all future fiscal years thereafter in its sole and absolute discretion.

 

(d)            Restricted Shares.  On the Effective Date, and subject to Board approval, the Company shall grant to Executive 120,000 shares of the Company’s common stock in the form of Performance Shares (the “Performance Shares”), under the 2009 Amended and Restated Equity and Performance Incentive Plan (the “Plan”) pursuant to terms and conditions of the Plan, this Agreement and the Restricted Stock Agreement, attached as Exhibit A with its related schedules (the “Restricted Stock Agreement”), which Performance Shares shall vest according to the following schedule: forty thousand (40,000) of the Performance Shares shall vest according to the metrics set forth in Schedule 1 of the Restricted Stock Agreement  (environmental remediation reimbursement advancement agreements); an additional forty thousand (40,000) of the Performance Shares shall vest according to the metrics set forth in Schedule 2 of the Restricted Stock Agreement (competitive improvement program restructuring execution); and an additional forty thousand (40,000) of the Performance Shares shall vest according to the metrics set forth in Schedule 3 of the Restricted Stock Agreement (AR1 program achievement).  The vesting term will be from FY2015 to FY2018 and the vesting targets stated above may be reached at any point during the vesting term.

 

(e)            Prior Equity Awards.  Executive was previously awarded the following grants under the Plan:

 

(i)        Pursuant to her employment letter agreement dated March 2, 2015 (the “Letter Agreement”) 25,667 time-based restricted shares (with a grant-date fair value of $500,000) which cliff vest three years from date of grant.

 

(ii)       Pursuant to the Letter Agreement 57,873 time-based restricted shares (with a grant-date fair value of $1,127,380) on March 2, 2015 which vest 50% ten (10) months from date of grant (January 3, 2016) and 50% twenty-two (22) months from date of grant (January 3, 2017).  Notwithstanding the foregoing vesting requirements, all unvested restricted shares pursuant to this grant will vest immediately upon Executive’s termination of employment with the Company.

 

  

3

  

 

(iii)      As part of the Company’s normal course 2015 equity award granting, on March 30, 2015, Executive was awarded:

 

  (a)            16,261 performance shares (at target vesting) (with a grant-date fair value of $375,000) that will vest depending on performance on January 31, 2018, and

 

  (b)            17,848 stock options with a strike price of $23.06 per share, (with a total grant-date-fair-value of $125,000) that vest on March 31, 2018.

 

(f)            Future Equity Awards.  Executive shall be eligible to participate in future grants pursuant to the Plan and other Company performance incentive plans extended to senior executives of the Company generally, at levels commensurate with Executive’s position. The target opportunity for grants of such future awards to Executive under the Plan is two hundred percent (200%) of the annual Base Salary in effect for the then-current fiscal year.  The specific terms of any such awards, and the discretion as to whether to grant executive awards, will, in all cases, be determined by the Organization and Compensation Committee of the Board at the time of the award.

 

3.             Expenses.  In accordance with Company policy, the Company shall reimburse Executive for all reasonable business expenses properly and reasonably incurred and paid by Executive in the performance of her duties under this Agreement upon her presentment of detailed receipts in the form required by the Company’s policy.

 

4.             Benefits.

 

(a)            Vacation.  Executive shall be entitled to four weeks’ vacation.

 

(b)            Health Insurance and Other Plans.  Executive shall be eligible to participate in the Company’s medical, dental, short and long-term incentive plans, and other employee benefit programs, if any, that are provided by the Company for its employees generally, at levels commensurate with Executive’s position, in accordance with the provisions of any such plans, as the same may be in effect from time to time.

 

  

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5.             Relocation Assistance.  Executive shall be entitled to relocation assistance benefits under the GenCorp Domestic Relocation Policy (the “Policy”) on the same basis as other similarly-situated employees of the Company.  Notwithstanding the foregoing, Executive shall have twenty-four (24) months from her first day of employment with the Company (March 2, 2015) in order to complete all relocation activities with full entitlement to the normal relocation assistance benefits under the Policy. If the payment of Executive’s relocation assistance benefits by the Company under this Section 5 results in Executive’s liability for federal, state, local or other income taxes, the Company will provide to Executive a tax “gross up” payment in an amount such that Executive receives and retains the same amount that she would have received had no tax been withheld from, or otherwise due as a result of, such relocation assistance benefits. 

 

6.             Term.  The terms set forth in this Agreement will commence on the Effective Date and shall remain in effect for one (1) year except as otherwise provided in this Agreement.  The term of employment shall thereafter be deemed to be automatically extended, upon the same terms and conditions, for successive periods of one year, unless either party, at least 60 days prior to the expiration of the original term or any extended term, shall give written notice to the other of its intention not to renew such employment.  The period during which Executive is employed pursuant to this Agreement, including any extension thereof in accordance with the preceding sentence, shall be referred to as the “Employment Period”.

 

7.             Termination.

 

(a)            Termination at the Company’s Election.

 

(i)        For Cause.  At the election of the Company, Executive’s employment may be terminated for Cause (as defined below) upon written notice to Executive pursuant to Section 12 of this Agreement.  For purposes of this Agreement, “Cause” for termination shall mean that Executive: (A) pleads “guilty” or “no contest” to or is indicted for or convicted of a felony under federal or state law or as a crime under federal or state law which involves Executive’s fraud or dishonesty; (B) in carrying out her duties, engages in conduct that constitutes gross negligence or willful misconduct; (C) fails to reasonably and materially perform the responsibilities of her position; (D) engages in misconduct that causes material harm to the reputation of the Company; or (E) materially breaches any term of this Agreement or written policy of the Company, provided that if the Company provides written notice of Cause pursuant to (C) through (E), Executive shall be given thirty (30) days from the date of such written notice to cure such conduct.

 

(ii)       Upon Disability, Death or Without Cause.  At the election of the Company, Executive’s employment may be terminated without Cause: (A) should Executive become physically or mentally unable to perform her duties for the Company and such incapacity has continued for a total of ninety (90) consecutive days or any one hundred eighty (180) days in a period of three hundred sixty-five (365) consecutive days (a “Disability”); (B) upon Executive’s death (“Death”); or (C) upon thirty (30) days’ written notice for any other reason.

 

  

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(b)            Termination at Executive’s Election.

 

(i)        For Good Reason.  At Executive’s election, Executive’s employment may be terminated for Good Reason (as defined below) by providing notice to the Company pursuant to Section 12 of this Agreement.  For purposes of this Agreement, “Good Reason” shall be deemed to exist if the following actions occur without Executive’s consent: (A) a material diminution in Executive’s Base Salary or Target Bonus (but not including any diminution related to a broader compensation reduction that is not limited to any particular employee or executive), (ii) a requirement that Executive be based anywhere other than within 75 miles of Los Angeles, California, or (iii) a material diminution in Executive’s title, duties, or responsibilities from those in effect on the Effective Date (it being understood that Executive’s obligation to report to the Board and the Board’s exercise of its final authority over Company matters shall not give rise to any such claim of diminution); provided, however, that no event shall constitute Good Reason unless Executive has notified the Company in writing of Executive’s intention to so terminate Executive’s employment, such notice: (i) to state in detail the particular acts or failures to act that constitute the grounds on which the proposed termination for Good Reason is based, (ii)  to be given within sixty (60) days after the first occurrence of such acts or failures to act, and (iii) the Company shall have thirty (30) days following receipt of such notice to cure such acts or failures to act in all material respects.  If the Company has not cured such acts or failures to act within the thirty (30) day cure period, then Executive’s employment shall be immediately terminated for Good Reason.

 

(ii)       Voluntary Resignation.  Notwithstanding anything contained elsewhere in this Agreement to the contrary, Executive may terminate her employment at any time and for any reason whatsoever or for no reason at all in Executive’s sole discretion by giving thirty (30) days written notice pursuant to Section 12 of this Agreement.

 

8.             Payments upon Termination of Employment.

 

(a)            Termination for Cause or Resignation without Good Reason.  If Executive’s employment is terminated by the Company for “Cause” or if Executive resigns from her employment other than for “Good Reason”, Executive shall be entitled to the following amounts only: (A) payment of her Base Salary accrued up to and including the date of termination or resignation, to be paid at termination, (B) payment in lieu of any accrued but unused vacation time, in accordance with the Company’s vacation policy, (C) payment of any unreimbursed expenses in accordance with the Company’s business reimbursement policy, (D) immediate vesting of any unvested time-based restricted shares described in Section 2(e)(ii) of this Agreement; and (E) payments and benefits under any Company benefit plan, program or policy that Executive participated in during employment and paid pursuant to the terms of such plan, program and policy (collectively, the “Accrued Obligations”).  Unless otherwise required by law under the terms of any applicable Company benefit plan, program or policy, the benefits pursuant to Section 4(a) and (b) of this agreement will terminate at the end of the month of termination of employment.   For the avoidance of doubt, (i) Executive will not be entitled to receive any bonus payments other than those fully earned and paid by the date of termination; (ii) other than as specified in D above, all vesting on awards granted to Executive under the Plan or other Company performance or incentive plan will cease; and (iii) any unvested awards granted under the Plan or other Company performance or incentive plan will be forfeited.

 

  

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(b)            Termination due to Death or Disability.  If Executive’s employment is terminated at any time due to her Death or Disability, Executive shall be entitled to receive the Accrued Obligations and severance payments and benefits equal to the following: (i) subject to Section 19, twelve (12) months of Executive’s Base Salary paid in installments; (ii) any bonuses earned and paid by the date of termination; (iii) other than the 120,000 performance shares specified in Section 2(d) which shall not vest, to the extent unvested at the time of Executive’s termination of employment, immediate full vesting of all of Executive’s equity awards under the Plan (at target performance, if applicable.  As of the Effective Date, the target opportunity for equity grants to Executive under the Plan is two hundred percent (200%) of the annual Base Salary in effect for the then-current fiscal year. The Board may change Executive’s target for future equity grants in its sole and absolute discretion); (iv) outplacement services provided by the Company-designated outplacement firm for a period of eighteen (18 ) months starting no later than ninety (90) days from Executive’s date of termination with a maximum value of $25,000; (v) in the case of Death, Executive shall receive life insurance benefits paid in accordance with the terms of the policy and coverage in which Executive was enrolled before the date of Death; (vi) in the case of termination due to Disability, the Company shall pay for the premiums associated with six (6) months of Executive’s continued participation, without any required contributions from Executive (but subject to all other plan and policy terms) in Executive’s Company provided life insurance policy in which Executive is enrolled before the date of termination; and (vii) provided Executive timely elects and is eligible for COBRA coverage, the Company shall pay for the premiums associated with  six (6) months of Executive’s continued participation, without any required contributions from Executive (but subject to all other plan terms, including co-payments and deductibles) in the Aerojet Rocketdyne Medical Plan, Aerojet Rocketdyne Dental Plan, and the Aerojet Rocketdyne Vision Plan (the “Benefit Plans”) in which Executive is enrolled before the date of termination.  Payment of the Base Salary component of Executive’s severance shall be made on regular paydays.

 

(c)            Termination by the Company for Reasons other than Cause or Termination by Executive for Good Reason.  If Executive’s employment is terminated at the Company’s election at any time for reasons other than Cause or by Executive for Good Reason and neither Section 8(b) nor Section 8(d) is applicable at the time of Executive’s termination of employment, Executive shall be entitled to receive the Accrued Obligations and severance payments and benefits equal to the following: (i) subject to Section 19, twelve (12) months of Executive’s Base Salary paid in installments; (ii) other than the 120,000 performance shares specified in Section 2(d) which shall not vest, to the extent unvested at the time of Executive’s termination of employment, immediate full vesting of all of Executive’s equity awards under the Plan (at target performance, if applicable.  As of the Effective Date, the target opportunity for equity grants to Executive under the Plan is two hundred percent (200%) of the annual Base Salary in effect for the then-current fiscal year. The Board may change Executive’s target for future equity grants in its sole and absolute discretion); (iii) Executive will have the opportunity to continue to participate in the Company provided life insurance policy in which Executive is enrolled before the date of termination at an amount of 1x Base Salary for a period of twelve (12) months following the date of termination; (iv) provided Executive timely elects and is eligible for COBRA coverage, the Company shall pay for the premiums associated with  eighteen (18) months of Executive’s continued participation, without any required contributions from Executive (but subject to all other plan terms, including co-payments and deductibles) in the Aerojet Rocketdyne Medical Plan, Aerojet Rocketdyne Dental Plan, and the Aerojet Rocketdyne Vision Plan (the “Benefit Plans”) in which Executive is enrolled prior to the date of termination; and (v) outplacement services provided by the Company-designated outplacement firm for a period of eighteen (18) months starting no later than ninety (90) days from Executive’s date of termination with a maximum value of $25,000.  Payment of the Base Salary component of Executive’s severance shall be made on regular paydays.  Subject to Executive’s execution and delivery of a general release (that is no longer subject to revocation under applicable law) of the Company, its parents, subsidiaries and affiliates and each of its officers, directors, employees, agents, successors and assigns in the form attached as Exhibit B (the “General Release”) all payments and/or grants under this Section 8(c) shall begin on the first payroll period that is sixty (60) days after Executive’s termination of employment with the first payment for severance payments described in Section 8(c)(i) to include payment of any amounts otherwise due as of the date of termination.

 

  

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(d)            Termination in Connection with a Change in Control.  Notwithstanding Section 8(c) above, if Executive’s employment is terminated by the Company without Cause (excluding due to a Death or Disability) or by Executive for Good Reason within eighteen (18) months following a Change in Control (as defined in the Plan) then Executive shall be entitled to the following payments and benefits subject to Section 19: (i) the Accrued Obligations; (ii) annual Target Bonus for the pro-rated portion of the fiscal year prior to the Change in Control paid in a lump sum; (iii)  a severance payment equal to eighteen (18) months of (y) Executive’s Base Salary and (z) annual Target Bonus paid in a lump sum; (iv) other than the 120,000 performance shares specified in Section 2(d) which shall not vest, to the extent unvested at the time of Executive’s termination of employment, immediate full vesting of all of Executive’s equity awards under the Plan (at target performance, if applicable.  As of the Effective Date, the target opportunity for equity grants to Executive under the Plan is two hundred percent (200%) of the annual Base Salary in effect for the then-current fiscal year. The Board may change Executive’s target for future equity grants in its sole and absolute discretion); (v) Executive will have the opportunity to continue to participate in the Company provided life insurance policy in which Executive is enrolled before the date of termination at an amount of 1x Base Salary for a period of twelve (12) months following the date of termination; (vi) provided Executive timely elects and is eligible for COBRA coverage, the Company shall pay for the premiums associated with  eighteen (18) months of Executive’s continued participation, without any required contributions from Executive (but subject to all other plan terms, including co-payments and deductibles) in the Aerojet Rocketdyne Medical Plan, Aerojet Rocketdyne Dental Plan, and the Aerojet Rocketdyne Vision Plan (the “Benefit Plans”) in which Executive is enrolled prior to the date of termination; and (vii) outplacement services provided by the Company-designated outplacement firm for a period of eighteen (18) months starting no later than ninety (90) days from Executive’s date of termination with a maximum value of $25,000.  Subject to Executive’s execution and delivery of the General Release (provided, that such General Release was not previously executed and delivered), all payments and/or grants under this Section 8(d) shall begin on the first payroll period that is (60) days after Executive’s termination of employment or, if applicable, upon the consummation of a Change in Control.

 

(e)            Termination of the Term.  If Executive’s employment terminates pursuant to written notice by the Company of its intention not to renew the term as provided in Section 6, then Executive shall be entitled to the payments set forth in 8(c) above.

 

(f)            No Mitigation; No Set-Off.  The Company’s obligation to pay Executive the amounts provided and to make the arrangements provided shall not be subject to set-off, counterclaim or recoupment of amounts owed by Executive to the Company or its affiliates.  Executive shall not be required to mitigate the amount of any payment provided for pursuant to this Agreement by seeking other employment, and no amounts otherwise earned shall be set-off against the amounts due.

 

9.             Legal Fees. The Company will pay directly to legal counsel of Executive’s choosing an amount not to exceed $15,000 for services rendered to Executive for the review of, and counsel related to, this Agreement.

 

10.           Confidentiality Agreement and Assignment of Intellectual Property.

 

(a)            Executive understands that during the Employment Period, she may have access to unpublished and otherwise confidential information both of a technical and non-technical nature, relating to the business of the Company and any of its parents, subsidiaries, divisions, affiliates (collectively, “Affiliated Entities”), or clients, including without limitation any of their actual or anticipated business, research or development, any of their technology or the implementation or exploitation thereof, including without limitation information Executive and others have collected, obtained or created, information pertaining to clients, accounts, vendors, prices, costs, materials, processes, codes, material results, technology, system designs, system specifications, materials of construction, trade secrets and equipment designs, including information disclosed to the Company by others under agreements to hold such information confidential (collectively, the “Confidential Information”).  Executive agrees to observe all Company policies and procedures concerning such Confidential Information.  Executive further agrees not to disclose or use, either during her employment or at any time thereafter, any Confidential Information for any purpose, including without limitation any competitive purpose, unless authorized to do so by the Company in writing, except that she may disclose and use such information in the good faith performance of her duties for the Company.  Executive’s obligations under this Agreement will continue with respect to Confidential Information, whether or not her employment is terminated, until such information becomes generally available from public sources through no fault of Executive or any representative of Executive.  Notwithstanding the foregoing, however, Executive shall be permitted to disclose Confidential Information as may be required by a subpoena or other governmental order, provided that she first notifies the Company of such subpoena, order or other requirement and such that the Company has the opportunity to obtain a protective order or other appropriate remedy.

 

  

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(b)            During Executive’s employment, upon the Company’s request, or upon the termination of her employment for any reason, Executive will promptly deliver to the Company all documents, records, files, notebooks, manuals, letters, notes, reports, customer and supplier lists, cost and profit data, e-mail, apparatus, computers, blackberries, smartphones, tablets or other PDAs, hardware, software, drawings, blueprints, and any other material of the Company or any of its Affiliated Entities or clients, including all materials pertaining to Confidential Information developed by Executive or others, and all copies of such materials, whether of a technical, business or fiscal nature, whether on the hard drive of a laptop or desktop computer, in hard copy, disk or any other format, which are in her possession, custody or control.  Executive may retain Executive’s rolodex and similar address books, provided, that such items only include contact information.

 

(c)            Executive will promptly disclose to the Company any idea, invention, discovery or improvement, whether patentable or not (“Creations”), conceived or made by her alone or with others at any time during her employment.  Executive agrees that the Company owns any such Creations, conceived or made by Executive alone or with others at any time during her employment, and Executive assigns and agrees to assign to the Company all rights she has or may acquire therein and agrees to execute any and all applications, assignments and other instruments relating thereto which the Company deems necessary or desirable.  These obligations shall continue beyond the termination of her employment with respect to Creations and derivatives of such Creations conceived or made during her employment with the Company.  The Company and Executive understand that the obligation to assign Creations to the Company shall not apply to any Creation which is developed entirely on her own time without using any of the Company’s equipment, supplies, facilities, and/or Confidential Information unless such Creation (a) relates in any way to the business or to the current or anticipated research or development of the Company or any of its Affiliated Entities; or (b) results in any way from her work at the Company.

 

(d)            Executive will not assert any rights to any invention, discovery, idea or improvement relating to the business of the Company or any of its Affiliated Entities or to her duties hereunder as having been made or acquired by Executive before her work for the Company, except for the matters, if any, described in Exhibit C to this Agreement.

 

(e)            During the Employment Period, if Executive incorporates into a product or process of the Company or any of its Affiliated Entities anything listed or described in Exhibit C, the Company is granted and shall have a non-exclusive, royalty-free, irrevocable, perpetual, worldwide license (with the right to grant and authorize sublicenses) to make, have made, modify, use, sell, offer to sell, import, reproduce, distribute, publish, prepare derivative works of, display, perform publicly and by means of digital audio transmission and otherwise exploit as part of or in connection with any product, process or machine.

 

  

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(f)            Executive agrees to cooperate fully with the Company, both during and after her employment with the Company, with respect to the procurement, maintenance and enforcement of copyrights, patents, trademarks and other intellectual property rights (both in the United States and foreign countries) relating to such Creations.  Executive shall sign all papers, including, without limitation, copyright applications, patent applications, declarations, oaths, formal assignments, assignments of priority rights and powers of attorney, which the Company may deem necessary or desirable in order to protect its rights and interests in any Creations.  Executive further agrees that if the Company is unable, after reasonable effort, to secure Executive’s signature on any such papers, any officer of the Company shall be entitled to execute such papers as her agent and attorney-in-fact and Executive irrevocably designates and appoints each officer of the Company as her agent and attorney-in-fact to execute any such papers on her behalf and to take any and all actions as the Company may deem necessary or desirable in order to protect its rights and interests in any Creations, under the conditions described in this paragraph.

 

11.           Representation and Warranty.  Executive represents and warrants to the Company that she is not subject to any agreement restricting her ability to enter into this Agreement and fully carry out her duties and responsibilities.  To the extent that Executive continues to be bound by confidentiality, non-disparagement obligations with regard to her former employer, the Company and Executive agree that neither shall require Executive to disclose any confidential information of any prior employer of Executive or misappropriate any intellectual property belonging to any other person or entity during the Employment Period.

 

12.            Notice.  Any notice or other communication required or permitted to be given to the Parties shall be deemed to have been given if personally delivered, if sent by nationally recognized overnight courier or if mailed by certified or registered mail, return receipt requested, first class postage prepaid, and addressed as follows:

 

(a)            If to Executive, to:

 

the address shown on the records of the Company.

 

(b)            If to the Company, to:

 

Aerojet Rocketdyne Holdings, Inc.

2001 Aerojet Road

Rancho Cordova, California 95742

Attention: Chairman of the Board

 

with a copy to:

 

Aerojet Rocketdyne Holdings, Inc.

2001 Aerojet Road

Rancho Cordova, California 95742

Attention: Vice President, Human Resources

 

  

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13.           Severability.  If any provision of this Agreement is declared void or unenforceable by a court of competent jurisdiction, all other provisions shall nonetheless remain in full force and effect.

 

14.           Governing Law and Arbitration.  This Agreement shall be governed by, and construed and enforced in accordance with, the laws of the State of California, without regard to the conflict of laws provisions thereof.  Any action, suit or other legal proceeding which is commenced to resolve any matter arising under or relating to any provision of this Agreement shall be submitted to final and binding arbitration pursuant to the Employment Arbitration Rules of the American Arbitration Association before a single arbitrator, who is agreed upon by the Parties, and who is a retired state or federal court judge.  The arbitration shall take place in Los Angeles, California.  The arbitrator will have the authority to permit discovery and to follow the procedures that she or she determines to be appropriate, as provided for under California law.  The arbitrator will have no power to award consequential (including lost profits), punitive or exemplary damages.  Such submission to arbitrate shall be the sole and exclusive remedy available to Executive or the Company.  The filing Party shall bear filing fees for the arbitration and each Party shall bear its own legal fees and costs resulting from the arbitration, unless a contract or statute provides for recovery to the prevailing party.  The judgment on the award rendered by the arbitrator shall be binding upon the Parties and may be entered in any court having jurisdiction.  Neither party may seek judicial review of the decision imposed by the arbitrator.

 

15.           Indemnification and Liability Insurance.  The Company shall indemnify, and if applicable, defend Executive and provide Executive with liability insurance pursuant to the terms of the Certificate of Incorporation of Aerojet Rocketdyne Holdings, Inc. and the Aerojet Rocketdyne Holdings, Inc. Bylaws or, if the terms of the Certificate of Incorporation of Aerojet Rocketdyne Holdings, Inc. and the Aerojet Rocketdyne Holdings, Inc. Bylaws are no longer in effect, then pursuant to the terms then in effect for directors and officers of the Company.

 

16.           Waiver.  The waiver by either Party of a breach of any provision of this Agreement shall not be or be construed as a waiver of any subsequent breach.  The failure of a Party to insist upon strict adherence to any provision of this Agreement on one or more occasions shall not be considered a waiver or deprive that Party of the right thereafter to insist upon strict adherence to that provision or any other provision of this Agreement.  Any waiver must be in writing.

 

17.           Assignment.  This Agreement is a personal contract and Executive may not sell, transfer, assign, pledge or hypothecate her rights, interests and obligations hereunder.  Except as otherwise herein expressly provided, this Agreement shall be binding upon and shall inure to the benefit of Executive and her personal representatives and shall inure to the benefit of and be binding upon the Company and its successors and assigns, except that the Company may not assign this Agreement without Executive's prior written consent, except to an acquirer of all or substantially all of the assets of the Company other than the real estate assets and upon written assumption of the obligations of this Agreement.

 

18.           Entire Agreement.  This Agreement (together with the attached Exhibits) embodies all of the representations, warranties, and agreements between the Parties relating to Executive’s employment with the Company.  No other representations, warranties, covenants, understandings, or agreements exist between the Parties relating to Executive’s employment.  This Agreement shall supersede all prior agreements, written or oral, relating to Executive’s employment.  This Agreement may not be amended or modified except by a writing signed by the Parties.

 

  

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19.           Code Section 409A Compliance.

 

(a)            The intent of the parties is that payments and benefits under this Agreement comply with, or be exempt from, Internal Revenue Code (“Code”) Section 409A and the regulations and guidance promulgated thereunder (collectively “Code Section 409A”) and, accordingly, to the maximum extent permitted, this Agreement shall be interpreted to be in compliance therewith.  If Executive notifies the Company (with specificity as to the reason therefore) that Executive believes that as a result of subsequent published guidance issued by the I.R.S. upon which taxpayers generally rely, any provision of this Agreement (or of any award of compensation, including equity compensation or benefits) would cause Executive to incur any additional tax or interest under Code Section 409A and the Company concurs with such belief or the Company independently makes such determination, the Company shall, after consulting with Executive, reform such provision to try to comply with Code Section 409A through good faith modifications to the minimum extent reasonably appropriate to conform with Code Section 409A.  To the extent that any provision hereof is modified in order to comply with Code Section 409A, such modification shall be made in good faith and shall, to the maximum extent reasonably possible, maintain the original intent and economic benefit to Executive and the Company and is tax neutral to the Company of the applicable provision without violating the provisions of Code Section 409A.

 

(b)            A termination of employment shall not be deemed to have occurred for purposes of any provision of this Agreement providing for the payment of any amounts or benefits upon or following a termination of employment that are considered “nonqualified deferred compensation” under Code Section 409A unless such termination is also a “separation from service” within the meaning of Code Section 409A and, for purposes of any such provision of this Agreement, references to a “termination,” “termination of employment” or like terms shall mean “separation from service.”  If Executive is deemed on the date of termination to be a “specified employee” within the meaning of that term under Code Section 409A(a)(2)(B), then with regard to any payment that is considered non-qualified deferred compensation under Code Section 409A payable on account of a “separation from service,” such payment or benefit shall be made or provided at the date which is the earlier of (A) the expiration of the six (6)-month period measured from the date of such “separation from service” of Executive, and (B) thirty (30) days from the date of Executive’s death (the “Delay Period”).  Upon the expiration of the Delay Period, all payments and benefits delayed pursuant to this Section 19 (whether they would have otherwise been payable in a single sum or in installments in the absence of such delay) shall be paid or reimbursed to Executive in a lump sum without interest on the first business day following the Delay Period, and any remaining payments and benefits due under this Agreement shall be paid or provided in accordance with the normal payment dates specified for them herein.

 

(c)            With regard to any provision that provides for reimbursement of costs and expenses or in-kind benefits, except as permitted by Code Section 409A, (i) the right to reimbursement or in-kind benefits shall not be subject to liquidation or exchange for another benefit, (ii) the amount of expenses eligible for reimbursement, or in-kind benefits, provided during any taxable year shall not affect the expenses eligible for reimbursement, or in-kind benefits to be provided, in any other taxable year, provided that the foregoing clause (ii) shall not be violated without regard to expenses reimbursed under any arrangement covered by Internal Revenue Code Section 105(b) solely because such expenses are subject to a limit related to the period the arrangement is in effect and (iii) such payments shall be made on or before the last day of Executive’s taxable year following the taxable year in which the expense occurred.  Any tax gross-up payment as provided for in this Agreement shall be made in any event no later than the end of the calendar year immediately following the calendar year in which Executive remits the related taxes, and any reimbursement of expenses incurred due to a tax audit or litigation shall be made no later than the end of the calendar year immediately following the calendar year in which the taxes that are the subject of the audit or litigation are remitted to the taxing authority, or, if no taxes are to be remitted, the end of the calendar year following the calendar year in which the audit or litigation is completed.

 

  

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(d)            For purposes of Code Section 409A, Executive’s right to receive any installment payments pursuant to this Agreement shall be treated as a right to receive a series of separate and distinct payments.  Whenever a payment under this Agreement specifies a payment period with reference to a number of days (e.g., “within sixty (60) days following the date of termination”), the actual date of payment within the specified period shall be within the sole discretion of the Company.

 

20.           Limitation on Benefits.  Notwithstanding anything to the contrary contained in this Agreement, to the extent that any of the payments and benefits provided for under this Agreement or any other agreement or arrangement between the Company and Executive, or any arrangement or agreement with any person whose actions result in a change of ownership of effective control or a change in ownership of a substantial portion of the assets of the corporation covered by Section 280G(b)(2) (collectively, the "Payments") (i) constitute a "parachute payment" within the meaning of Section 280G of the Code and (ii) but for this Section 20, would be subject to the excise tax imposed by Section 4999 of the Code, then the Payments shall be payable either (i) in full or (ii) as to such lesser amount which would result in no portion of such Payments being subject to excise tax under Section 4999 of the Code; whichever of the foregoing amounts, taking into account the applicable federal, state and local income taxes, payroll taxes and the excise tax imposed by Section 4999, results in Executive's receipt on an after-tax basis, of the greater amount of payment and benefits. Any reduction under clause (ii) of the preceding sentence shall be done first by reducing any cash severance payments with the last payment reduced first; next any equity or equity derivatives that are included at full value rather than accelerated value; next any equity or equity derivatives based on acceleration value shall be reduced with the highest value reduced first.  Notwithstanding the foregoing, to the extent that the Company and Executive agree that it would not violate Code Section 409A or impact the ability of the parties to reduce the amounts receivable, Executive may prescribe a different order of reduction.  Unless Executive and the Company otherwise agree in writing, any determination required under this Section 20 shall be made in writing by the Company's independent public accountants (the "Accountants"), whose determination shall be conclusive and binding upon Executive and the Company for all purposes.  For purposes of making the calculations required by this Section 20, the Accountants may make reasonable assumptions and approximations concerning applicable taxes and may rely in reasonable, good faith interpretations concerning the application of Sections 280G and 4999 of the Code.  The Company and Executive shall furnish to the Accountants such information and documents as the Accountants may reasonably request in order to make a determination under this Section 20.  The Company shall bear all costs the Accountants may reasonably incur in connection with any calculations contemplated by this Section 20.  If the limitation set forth in this Section 20 is applied to reduce an amount payable to Executive, and the Internal Revenue Service successfully asserts that, despite the reduction, Executive has nonetheless received payments which are in excess of the maximum amount that could have been paid to Executive without being subjected to any excise tax, then, unless it would be unlawful for the Company to make such a loan or similar extension of credit to Executive, Executive may repay such excess amount to the Company as though such amount constitutes a loan to Executive made at the date of payment of such excess amount, bearing interest at 120% of the applicable federal rate (as determined under Section 1274(d) of the Code in respect of such loan), provided that if the recalculation of the higher amount was then redone based on the IRS position and Executive would net more if no reduction took place, such reduction shall be  cancelled and the full amount paid to Executive in a lump sum within thirty (30) days of the IRS assessment becoming final, unless this proviso would negate the ability to use the reduction if this was not implemented or caused a violation of Code Section 409A, in which case this proviso shall be null and void.

 

 

[Signature page follows]

 

 

  

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IN WITNESS WHEREOF, the Parties have caused this Agreement to be duly executed and delivered on the date above.

 

	  	
AEROJET ROCKETDYNE HOLDINGS, INC.

	  	  
	  	  
	  	  
	  	
By:

	

/s/ Warren G. Lichtenstein

	  	  	  	
Warren G. Lichtenstein

	  	  	  	
Chairman of the Board

	  	  
	
Agreed to and Accepted:

	  
	  	  
	  	  
	

/s/ Eileen P. Drake

	  
	
Eileen P. Drake

	  

  

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EXHIBIT A

AEROJET ROCKETDYNE HOLDINGS, INC.

AMENDED AND RESTATED

2009 EQUITY AND PERFORMANCE INCENTIVE PLAN

Restricted Stock Agreement - Performance-Based

 

WHEREAS, Eileen P. Drake (the “Grantee”) is an employee of Aerojet Rocketdyne Holdings, Inc. (the “Company”) or a subsidiary of the Company (a “Subsidiary”); and

 

WHEREAS, the grant of restricted stock has been duly authorized by a resolution of the Organization & Compensation Committee (the “Committee”) of the Board of Directors or, if applicable, by the Board of Directors of the Company, effective as of November 18, 2015.

 

NOW, THEREFORE, pursuant to the Company’s Amended and Restated 2009 Equity and Performance Incentive Plan (the “Plan”), the Company hereby grants to the Grantee, as of November 18, 2015 (the “Date of Grant”), one hundred twenty thousand (120,000) shares of the Company’s common stock, par value $0.10 per share (the “Stock”), subject to the terms and conditions of the Plan and pursuant to this Restricted Stock Agreement (the “Agreement”).

 

1.              Issuance of Stock.  The Stock covered by this Agreement shall be fully paid and nonassessable and shall be represented in book-entry in the transfer agent’s Aerojet Rocketdyne Holdings, Inc. Restricted Unvested Shares Nominee Balance Account registered in the name of the Grantee.

 

2.              Restrictions on Transfer of Stock.  The Stock subject to this Agreement may not be transferred, sold, pledged, exchanged, assigned or otherwise encumbered or disposed of by the Grantee, except to the Company, unless and until it has become vested and nonforfeitable in accordance with Section 3 hereof; provided, however, that the Grantee’s interest in the Stock covered by this Agreement may be transferred at any time by will or the laws of descent and distribution.  Any purported transfer, encumbrance or other disposition of the Stock covered by this Agreement that is in violation of this Section 2 will be null and void, and the other party to any such purported transaction shall not obtain any rights to or interest in the Stock covered by this Agreement.  When and as permitted by the Plan, the Company may waive the restrictions set forth in this Section 2 with respect to all or any portion of the Stock covered by this Agreement.

 

3.              Vesting of Stock.

 

                               (a)           Provided that the Grantee has remained in the continuous employment as an employee of the Company or a Subsidiary until the relevant Performance Goals set forth below and described on the attached Schedules are achieved, the Stock covered by this Agreement shall become vested and nonforfeitable upon achievement, when and as determined by the Committee, of any such Performance Goal at any time during the three-year period commencing on the Date of Grant:

 

  

15

  

 

	  	
Restricted Shares

 Eligible for Vesting

 

	
Performance Goal

	
Schedule 1

	
40,000

	
Environmental Remediation Reimbursement Advance Agreement

 

	
Schedule 2

	
40,000

	
Competitive Improvement Plan – Restructuring Execution

 

	
Schedule 3

	
40,000

	
AR1

 

(b)          For the purposes of this Agreement, the continuous employment of the Grantee with the Company or a Subsidiary shall not be deemed to have been interrupted, and the Grantee shall not be deemed to have ceased to be an employee of the Company or a Subsidiary, by reason of (A) the transfer of the Grantee’s employment among the Company and its Subsidiaries or (B) an approved leave of absence.

(c)           Notwithstanding the provisions of Section 3(a) hereof, all of the Stock covered by this Agreement shall become immediately vested and nonforfeitable upon the occurrence of a change in control that shall occur while the Grantee is an employee of the Company.  For the purposes of this Agreement, the term “change in control” will have the meaning given such term under the Plan as in effect on the Date of Grant.

4.              Forfeiture of Stock.

(a)           Any of the Stock covered by this Agreement that has not become vested and nonforfeitable in accordance with Section 3 hereof shall be forfeited unless the Committee determines to provide otherwise.  In the event of a forfeiture, the Stock covered by this Agreement that has not become vested and nonforfeitable in accordance with Section 3 hereof shall be cancelled.

(b)           Notwithstanding the provisions of Section 3 hereof, all of the Stock covered by this Agreement shall be subject to cancellation, forfeiture or recoupment upon the occurrence of any of the following events: (i) termination of the Grantee’s employment for cause; (ii) the Grantee’s violation of material Company or Subsidiary policies or breach of applicable noncompetition or confidentiality covenants; and (iii) conduct by the Grantee that is detrimental to the business or reputation of the Company or its Subsidiary.

5.             Dividend, Voting and Other Rights.  The Grantee shall have all of the rights of a shareholder with respect to the Stock covered by this Agreement that has not been forfeited, including the right to vote such Stock and receive any dividends that may be paid thereon.  Any additional Stock that the Grantee may become entitled to receive pursuant to a share dividend or a merger or reorganization in which the Company is the surviving Company or any other change in the capital structure of the Company shall be subject to the same restrictions as the Stock covered by this Agreement.

 

  

16

  

 

6.             Compliance with Law.  The Company shall make reasonable efforts to comply with all applicable federal and state securities laws; provided, however, that notwithstanding any other provision of this Agreement, the Company shall not be obligated to issue any restricted or unrestricted Stock pursuant to this Agreement if the issuance thereof would result in a violation of any such law.

 

7.             Adjustments.  The Committee may make adjustments, consistent with Section 162(m) of the Internal Revenue Code of 1986 and the Section 409A Rules, in the terms and conditions of, and the criteria included in, this Agreement, in recognition of unusual or nonrecurring events (including, without limitation, the events described in Section 4.4 of the Plan) affecting the Company or the financial statements of the Company or of changes in applicable laws, regulations, or accounting principles, whenever the Committee determines that such adjustments are appropriate in order to prevent unintended dilution or enlargement of the benefits or potential benefits intended to be made available under the Plan. The determination of the Committee as to the foregoing adjustments, if any, shall be conclusive and binding on the Grantee under the Plan.

8.             Withholding Taxes.

 

(a)           Upon the vesting of any portion of the Stock, the Grantee shall be required to pay to the Company any applicable Federal, state, local or foreign withholding tax due, if any, as a result of such vesting. The Company’s obligation to deliver the Stock shall be subject to such payment. The Company and its Subsidiaries shall, to the extent permitted by law, have the right to deduct from any payment of any kind otherwise due to the Grantee the minimum statutory amount to satisfy Federal, state, local or foreign withholding taxes due with respect to such vesting.

 

(b)           Subject to (i) the Committee’s right to disapprove any such election and require the Grantee to pay the required withholding tax, if any, in cash, (ii) any Company policies, and (iii) applicable laws, the Grantee shall have the right to elect to pay the minimum required withholding tax in shares of Stock to be received upon vesting.  Any such election shall be irrevocable, made in writing, and signed by the Grantee. Shares of Stock used to pay any required withholding tax shall be valued at the same time and in the same manner that vested shares of Stock are valued for purposes of determining the required withholding taxes.

 

9.            Employment Rights.  The Plan and this Agreement shall not confer upon the Grantee any right with respect to the continuance of employment or other service with the Company or any Subsidiary and shall not interfere in any way with any right that the Company or any Subsidiary would otherwise have to terminate the employment or other service of the Grantee at any time.

 

  

17

  

 

10.            Relation to Other Benefits.  Any economic or other benefit to the Grantee under this Agreement shall not be taken into account in determining any benefits to which the Grantee may be entitled under any profit-sharing, retirement or other benefit or compensation plan maintained by the Company or a Subsidiary.

 

11.            Notices.  Any notice necessary under this Agreement will be addressed to the Company or the Committee at the principal executive office of the Company and to the Grantee at the address appearing in the personnel records of the Company for such Grantee, or to either party at such other address as either party may designate in writing to the other.  Any such notice will be deemed effective upon receipt thereof by the addressee.

 

12.            Agreement Subject to the Plan.  The Stock granted under this Agreement and all of the terms and conditions hereof are subject to all of the terms and conditions of the Plan.  In the event of any inconsistency between this Agreement and the Plan, the terms of the Plan shall govern.

 

13.            Amendments.  The Committee may amend this Agreement.  Any amendment to the Plan shall be deemed to be an amendment to this Agreement to the extent that the amendment is applicable hereto; provided, however, that no amendment shall adversely affect the rights of the Grantee under this Agreement without the Grantee’s consent, except as required under the tax laws.

 

14.            Severability.  In the event that one or more of the provisions of this Agreement is invalidated for any reason by a court of competent jurisdiction, any provision so invalidated shall be deemed to be separable from the other provisions hereof, and the remaining provisions hereof will continue to be valid and fully enforceable.

 

15.            Governing Law.  This Agreement will be construed and governed in accordance with the laws of the State of Delaware without regard to its conflict of laws principles.

 

16.            Certain Defined Terms.  In addition to the terms defined elsewhere herein, when used in the Agreement, terms with initial capital letters have the meaning given such term under the Plan, as in effect from time to time.

 

This Agreement is effective as of the ____ day of _________ 2015.

 

	
AEROJET ROCKETDYNE HOLDINGS, INC.

	  
	  
	  
	
By:________________________________

	
_________________

	
_____________________________

  

18

  

 

The undersigned Grantee hereby acknowledges receipt of an executed original of this Restricted Stock Agreement and accepts the right to receive the Stock subject to the terms and conditions of the Plan and the terms and conditions set forth in this Agreement.

 

	  	  
	  	  
	  	  
	  	
Eileen P. Drake

Stock Power

 

FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto ___________________________ , ________  shares of Common Stock of Aerojet Rocketdyne Holdings, Inc., a Delaware corporation, issued pursuant to a Restricted Stock Agreement between Aerojet Rocketdyne Holdings, Inc. and the undersigned, dated ________________ and standing in the name of the undersigned on the books of said corporation, represented by book-entry in the transfer agent’s Aerojet Rocketdyne Holdings, Inc. Restricted Unvested Shares Nominee Balance Account in the name of the undersigned, and does hereby irrevocably constitute and appoint Aerojet Rocketdyne Holdings, Inc. as the undersigned’s true and lawful attorney, for it and in its name and stead, to sell, assign and transfer the said stock on the books of said corporation with full power of substitution in the premises.

	  	  
	
Dated:____________

	  
	  	
Eileen P. Drake

  

19

  

 

Exhibit A - Schedule 1

Special Grant #1 Performance Goals

Environmental Remediation Reimbursement Advance Agreement

40,000 Restricted Shares

Environmental Remediation Reserves

The Company is involved in over forty environmental matters under the Comprehensive Environmental Response Compensation and Liability Act, the Resource Conservation Recovery Act, and other federal, state, local and foreign laws relating to soil and groundwater contamination, hazardous waste management activities, and other environmental matters at some of its current and former facilities.  Anticipated costs associated with environmental remediation that are probable and estimable are accrued.

As of August 31, 2015, the aggregate range of these anticipated environmental costs was $236.1 million to $462.2 million and the accrued amount was $236.1 million.  Of these accrued liabilities, approximately 98% related to the Company’s U.S. government contracting business and a portion of this liability is recoverable.

Environmental Remediation Recoveries

On January 12, 1999, Aerojet Rocketdyne and the U.S. government implemented the October 1997 Agreement in Principle (“Global Settlement”) resolving certain prior environmental and facility disagreements, with retroactive effective to December 1, 1998.  Under the Global Settlement, Aerojet Rocketdyne and the U.S. government resolved disagreements about an appropriate cost-sharing ratio with respect to the clean-up costs of the environmental contamination at the Sacramento and the former Azusa sites.  The Global Settlement cost-sharing ratio does not have a defined term over which costs will be recovered.  Under the Global Settlement, prior to the third quarter of fiscal 2010, approximately 12% of environmental costs related to Aerojet Rocketdyne’s Sacramento site and its former Azusa site were charged to the condensed consolidated statements of operations.  Subsequent to the third quarter of fiscal 2010, because the company’s estimated environmental costs reached the reimbursement ceiling under the Northrop Agreement, approximately 37% of such costs will not be reimbursable and are therefore directly charged to the condensed consolidated statements of operations.

Additionally, in conjunction with the sale of the EIS business in 2001, Aerojet Rocketdyne entered into an agreement with Northrop (“the Northrop Agreement”) whereby Aerojet Rocketdyne is reimbursed by Northrop for a portion of environmental expenditures eligible for recovery under the Global Settlement.

The Company’s cost estimates reached the cumulative limitation under the Northrop Agreement during the third quarter of fiscal 2010.  As of August 31, 2015, the Company has expensed $53.6 million of environmental remediation provision adjustments above the cumulative limitation under the Northrop Agreement.  Accordingly, subsequent to the third quarter of fiscal 2010, the Company has incurred a higher percentage of expense related to additions to the Sacramento site and BPOU site environmental reserve until, and if, an arrangement is reached with the U.S. government.

The Company is seeking the following environmental remediation advance agreements:

	
Performance Goals

	
Restricted Shares

 Eligible for Vesting

 

	
Northrop Grumman Allocation percentage adjustment to revise the Advance Agreement with the U.S. government decreasing the amount the Company would allocate to Northrop Grumman due to an increase in the AR mfg base

 

	
0

	
Recovery of allocable Northrop Grumman costs upon reaching the cap – 88%

 

	
20,000

 

	
Full recovery of all Global Settlement Agreement costs – 100%

 

	
20,000

 

  

20

  

 

Exhibit A - Schedule 2

Special Grant #2 Performance Goal

Competitive Improvement Plan – Restructuring Execution

40,000 Restricted Shares

Cost Reduction Plan

During the second quarter of fiscal 2014, the Company initiated a competitive improvement program (the “CIP”) comprised of activities and initiatives aimed at reducing costs in order for the Company to continue to compete successfully.  The CIP is composed of three major components:  (i) facilities optimization and footprint reduction; (ii) product affordability; and (iii) reduced administrative and overhead costs.  Under the CIP, the Company expects an estimated 500 headcount reduction in its total employee population.  The Company currently estimates that it will incur restructuring and related costs over the next four years totaling approximately $110 million.  The costs associated with the CIP will be a component of the Company’s U.S. government forward pricing rates, and therefore, will be recovered through the pricing of the Company’s products and services to the U.S. government.

Cost Reduction Plan Recoveries

The Company’s Annual Operating Plan and Strategic Plan were approved by the Board of Directors in March 2015, assuming that there would be no Advance Agreement.  The approved plans resulted in $45m of CIP costs over the years 2015 thru 2018 that could not be offset with savings in the same period without an adverse effect on the company’s disclosed overhead and G&A burden rates.

However, the Company is seeking an advance agreement with the U.S. government to classify the related CIP costs as internal restructuring costs, capitalizing the costs in excess of those that would increase published FY2015 Forward Pricing Rates.  Estimated implementation costs, recoveries, capitalized amounts and resultant overhead and G&A rates are as follows:

(in millions from Phase 1)

	
Total Cost to implement from detailed time-phased budget

	
$111.8m

	
- Cost incurred and recovered (overhead and G&A) current periods – no agreement

	
$66.9m

	
- Cost to be capitalized and amortized and recovered starting in 2019 via an Advance Agreement

	
$45.0m

	  	  	  
	
Annual Savings

	
$145.2/year

	  
	
(FY2019 and beyond)

	  	  
	
Composite Overhead Rate Benefit

	
From 218% to 203%

	  
	
G&A Rate Benefit

	
From 16.7% to 15.6%

	  

NOTE:  The above does not assume incremental environmental expenditure recoveries.

	
Performance Goal

 

	
Restricted Shares

 Eligible for Vesting

 

	
Execute Advance Agreement on Internal Restructuring with the U.S. government

 

	
40,000

 

  

21

  

Exhibit A - Schedule 3

Special Grant #3 Performance Goals

AR1

40,000 Restricted Shares

Investment in AR1

Research and development efforts are critical in maintaining our leadership position and are vital to our ability to compete for contracts and to enhance our technology base and fuel future revenue growth.  Our research and development effort is supported primarily by customer funding and much of these customer funded research and development expenditures have become key programs in the future.  Recently, the competitive dynamics of the larger Aerospace and Defense sector have impacted the Company.  New entrepreneurs have signaled intent to compete primarily on price and are therefore bringing pressure to bear on existing cost and manufacturing methodologies.  Additionally, overall U.S. government budget has continued to be under pressure.   These pressures, along with other geo-political pressure to move away from dependence on Russian liquid rocket engines, has caused us to invest in new development work to advance a new liquid booster engine, the AR1.

Investment Plan and Schedule

The Company’s Annual Operating Plan and Strategic Plan were approved by the Board of Directors in March 2015, and a $45 million investment in AR1 was approved.  This $45 million investment is documented in the form of an Other Transactions Authority (OTA) and there is no reimbursement from the U.S. government.  It is important that the team manage cost, schedule and performance against key milestones to achieve critical Air Force acquisition milestones.

	
Performance Goals

 

	
Restricted Shares

 Eligible for Vesting

 

	
Achieve successful Preliminary Design Review (PDR) and Verification Testing

 

	
10,000

	
Receive award from the Air Force for > $80.0 million

 

	
20,000

	
Succeed in obtaining language in the National Defense Authorization Act for FY2016 to direct U.S. government investment dollars in propulsion, not a launch vehicle

	
10,000

  

22

  

 

EXHIBIT B

 

AGREEMENT AND RELEASE

 

Agreement and Release (“Agreement”) executed this ___ day of ______, 20__, by and between Eileen P. Drake (“Executive”) with an address at ___________________ and Aerojet Rocketdyne Holdings, Inc., its parents, subsidiaries and affiliates (the “Company”) with an address at 2001 Aerojet Road, Rancho Cordova, California 95742.

 

1.            Executive’s employment shall be terminated effective ________ (“Termination Date”).  As of that date, Executive’s duties, responsibilities, office and title shall cease.  Capitalized terms used without definition in this Agreement shall have the meanings set forth in the Employment Agreement by and between Executive and the Company, dated November 18, 2015 (the “Employment Agreement”).

 

2.            (a)             If Executive’s employment terminates pursuant to Section 7(a)(ii) (Death, Disability or without Cause) or 7(b)(i) (for Good Reason) of the Employment Agreement and Section 8(d) of the Employment Agreement is not applicable as of the Termination Date, then within ten days of the Release Effective Date, defined below, the Company shall begin to pay to Executive the payments and benefits described in Section 8(b) or Section 8(c) as applicable, of the Employment Agreement in accordance with the Company’s standard payroll procedures and on regular paydays.

 

(a)            Notwithstanding Paragraph 2(a) above, if Executive’s employment is terminated by the Company without Cause or by Executive for Good Reason within eighteen (18) months following a Change in Control, then Executive shall be entitled to the payments and benefits described in Section 8(d) of the Employment Agreement.

 

(b)            The Company and Executive agree that in the event that any of the payments in this Paragraph 2 constitute deferred compensation within the meaning of Section 409(A) of the Internal Revenue Code of 1986, as amended (the “Code”), and Executive is at such time a specified employee, such payment or payments that constitute nonqualified deferred compensation within the meaning of the Code shall not be made prior to the date which is the earlier of (A) the expiration of the six (6)-month period measured from the date of such “separation from service” (within the meaning of the Code) of Executive, and (B) thirty (30) days from the date of Executive’s death.

 

3.            Executive agrees and acknowledges that the payments and/or benefits provided in Paragraph 2 above exceed any payments and benefits to which Executive would otherwise be entitled under any policy, plan, and/or procedure of the Company absent her signing this Agreement.  Executive acknowledges that she has been paid for work performed up to and including the Termination Date and for accrued but unused vacation.

 

4.            Executive shall have up to twenty-one (21) days from the date of her receipt of this Agreement to consider the terms and conditions of this Agreement.  Executive may accept this Agreement at any time within the twenty-one (21) day period by executing it before a notary and returning it to the Chairman of the Board of Directors, Aerojet Rocketdyne Holdings, Inc., 2001 Aerojet Road, Rancho Cordova, California 95742, no later than 5:00 p.m. on the twenty-first (21st) day after Executive’s receipt of this Agreement.  Thereafter, Executive will have seven (7) days to revoke this Agreement by stating her desire to do so in writing to the Chairman of the Board of Directors at the address listed above, and delivering it to the Chairman of the Board of Directors no later than 5:00 p.m. on the seventh (7th) day following the date Executive signs this Agreement.  The effective date of this Agreement shall be the eighth (8th) day following Executive’s signing of this Agreement (the “Release Effective Date”), provided Executive does not revoke the Agreement during the revocation period.  In the event Executive does not accept this Agreement as set forth above, or in the event Executive revokes this Agreement during the revocation period, this Agreement, including but not limited to the obligation of the Company and its subsidiaries and affiliates to provide the payment and/or benefits referred to in Paragraph 2 above, shall automatically be deemed null and void.

 

  

23

  

 

5.            (a)             In consideration of the payment and/or benefits referred to in Paragraph 2 above, Executive for herself and for her heirs, executors, and assigns (collectively referred to as the “Releasors”), forever releases and discharges the Company and any and all of its parent corporations, subsidiaries, divisions, affiliated entities, predecessors, successors and assigns, and any and all of its or their employee benefit and/or pension plans or funds, and any of its or their past or present officers, directors, stockholders, agents, trustees, administrators, employees or assigns (whether acting as agents for such entities or in their individual capacities), (collectively referred to as the “Releasees”), from any and all claims, demands, causes of action, fees and liabilities of any kind whatsoever (based upon any legal or equitable theory, whether contractual, common-law, statutory, decisional, federal, state, local or otherwise), whether known or unknown, which Releasors ever had, now have or may have against the Releasees by reason of any actual or alleged act, omission, transaction, practice, conduct, occurrence, or other matter from the beginning of the world up to and including the Release Effective Date, except for the obligations of the Company under this Agreement.

 

(b)            Without limiting the generality of the foregoing subparagraph (a), this Agreement is intended to and shall release the Releasees from any and all claims arising out of Executive’s employment with Releasees and/or the termination of Executive’s employment, including but not limited to any claim(s) under or arising out of (i) Title VII of the Civil Rights Act of 1964, as amended; (ii) the Americans with Disabilities Act, as amended; (iii) the Employee Retirement Income Security Act of 1974, as amended (“ERISA”) (excluding claims for accrued, vested benefits under any employee benefit plan of the Company in accordance with the terms of such plan and applicable law); (iv)  the Age Discrimination in Employment Act, as amended, or the Older Workers Benefit Protection Act; (v) the California Fair Employment Practices and Housing Act; (vi) Section 806 of the Sarbanes Oxley Act of 2002; (vii) alleged discrimination or retaliation in employment (whether based on federal, state or local law, statutory or decisional); (viii) the terms and conditions of Executive’s employment with the Company, the termination of such employment, and/or any of the events relating directly or indirectly to or surrounding that termination; and (ix) any law (statutory or decisional) providing for attorneys’ fees, costs, disbursements and/or the like.

 

(c)            As a further consideration and inducement for this Agreement, to the extent permitted by law, Executive hereby waives and releases any and all rights under Section 1542 of the California Civil Code or any analogous state, local, or federal law, statute, rule, order or regulation that Executive had or may have with respect to the Releasees.  California Civil Code Section 1542 reads as follows:

 

A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR.

 

  

24

  

 

Executive hereby expressly agrees that this Agreement shall extend and apply to all unknown, unsuspected and unanticipated injuries and damages, as well as any that are now disclosed, arising prior to Executive’s execution of this Agreement.  This release does not extend to those rights, which as a matter of law cannot be waived, including but not limited to unwaivable rights Executive may have under the California Labor Code.  Nothing in this Agreement shall limit Executive’s right to file a charge or complaint with any state or federal agency or to participate or cooperate in such a manner.

 

(d)            Notwithstanding the foregoing, nothing in this Agreement shall be construed to prevent Executive from filing a charge with or participating in an investigation conducted by any governmental agency, including, without limitation, the United States Equal Employment Opportunity Commission (“EEOC”) or applicable state or city fair employment practices agency, to the extent required or permitted by law.  Nevertheless, Executive understands and agrees that she is waiving any relief available (including, for example, monetary damages or reinstatement), under any of the claims and/or causes of action waived in Paragraphs 5(a) and (b), including but not limited to financial benefit or monetary recovery from any lawsuit filed or settlement reached by the EEOC or anyone else with respect to any claims released and waived in this Agreement.

 

(e)            Nothing in this Agreement shall release Executive’s rights (i) as a stockholder of the Company; (ii) to any claims that arise following the execution of this Agreement; (ii) to payment of the Accrued Obligations (as defined in the Employment Agreement); (iii) to payment of the severance payments and benefits described in Section 2 of this Agreement; (iv) to indemnification pursuant to the terms set forth in Section 15 of the Employment Agreement and pursuant to any other agreements currently in effect indemnifying Executive ; (v) to any claims for accrued vested benefits or rights under any other employee benefit plan, policy or arrangement (whether tax-qualified or not) maintained by the Company; (vi) to equity awards that are vested or which may vest under any equity, equity-based, profits interest, stock option, or similar plans, agreements, employment agreements and/or notices to the extent set forth in such awards or as otherwise provided for in such documents, which awards shall be subject to all the terms and conditions of such document.

 

6.            (a)             Executive agrees that she has not and will not engage in any conduct that is injurious to the Company’s or the Releasees’ reputation or interest, including but not limited to publicly disparaging (or inducing or encouraging others to publicly disparage) the Company or the Releasees.  The foregoing shall not be violated by truthful testimony, if provided pursuant to the terms of Section 7(b).

 

(b)            Executive acknowledges that she has returned to the Company any and all originals and copies of documents, materials, records, credit cards, keys, building passes, computers, smartphones, tablets, PDAs and other electronic devices or other items in her possession or control belonging to the Company or containing proprietary information relating to the Company pursuant to Section 10(b) of the Employment Agreement.  Executive may retain Executive’s rolodex and similar address books, provided, that such items only include contact information.

 

                               (c)             Executive acknowledges that the terms of Section 10, Confidentiality Agreement and Assignment of Intellectual Property, of the Employment Agreement are incorporated herein by reference, and Executive agrees and acknowledges that she is bound by its terms.

 

7.             (a)            Executive will cooperate with the Company and/or its subsidiaries and affiliates and its/their counsel in connection with any investigation, administrative proceeding or litigation relating to any matter in which Executive was involved or of which Executive has knowledge.

 

(b)            Executive agrees that, in the event she is subpoenaed by any person or entity (including, but not limited to, any government agency) to give testimony (in a deposition, court proceeding or otherwise) that in any way relates to Executive’s employment with the Company, she will give prompt notice of such request to the Chairman of the Board of Directors, Aerojet Rocketdyne Holdings, Inc., and will make no disclosure until the Company has had a reasonable opportunity to contest the right of the requesting person or entity to such disclosure, provided that nothing in this Agreement shall prevent Executive from complying with the requirements of the law.

 

8.            Before public announcement, the terms and conditions of this Agreement are and shall be deemed to be confidential, and shall not be disclosed by Executive to any person or entity without the prior written consent of the Chairman of the Board of Directors, Aerojet Rocketdyne Holdings, Inc., except if required by law, and to Executive’s accountants, attorneys, and spouse, provided that they agree to maintain the confidentiality of this Agreement.  Executive further represents that she has not disclosed the terms and conditions of this Agreement to anyone other than her attorneys, accountants and spouse.

 

9.            The making of this Agreement is not intended, and shall not be construed, as an admission that the Releasees have violated any federal, state or local law (statutory or decisional), ordinance or regulation, breached any contract, or committed any wrong whatsoever against Executive.

 

  

25

  

 

10.            The parties agree that this Agreement may not be used as evidence in a subsequent proceeding except in a proceeding to enforce the terms of this Agreement.

 

11.            Executive acknowledges that: (a) she has carefully read this Agreement in its entirety; (b) she has had an opportunity to consider fully the terms of this Agreement; (c) she has been advised by the Company in writing to consult with an attorney of her choosing in connection with this Agreement; (d) she fully understands the significance of all of the terms and conditions of this Agreement and she has discussed it with her independent legal counsel, or has had a reasonable opportunity to do so; (e) she has had answered to her satisfaction any questions she has asked with regard to the meaning and significance of any of the provisions of this Agreement; and (f) she is signing this Agreement voluntarily and of her own free will and assents to all the terms and conditions contained in this Agreement.

 

12.            This Agreement is binding upon, and shall inure to the benefit of, the parties and their respective heirs, executors, administrators, successors and assigns.

 

13.            If any provision of this Agreement shall be held by a court of competent jurisdiction to be illegal, void, or unenforceable, such provision shall be of no force and effect.  However, the illegality or unenforceability of such provision shall have no effect upon, and shall not impair the enforceability of, any other provision of this Agreement; provided, however, that, upon any finding by a court of competent jurisdiction that the release and covenants provided for by Paragraph 6 above is illegal, void, or unenforceable, Executive agrees to execute a release, waiver and/or covenant that is legal and enforceable.  Finally, any breach of the terms of Paragraphs 6, 7 and/or 8 above shall constitute a material breach of this Agreement as to which the Company may seek appropriate relief pursuant to Paragraph 14 below.

 

14.            This Agreement shall be governed by, and construed and enforced in accordance with, the laws of the State of California, without regard to the conflict of laws provisions thereof.  Any action, suit or other legal proceeding which is commenced to resolve any matter arising under or relating to any provision of this Agreement shall be submitted to final and binding arbitration pursuant to the Employment Arbitration Rules of the American Arbitration Association before a single arbitrator, who is agreed upon by the Parties, and who is a retired state or federal court judge.  The arbitration shall take place in Los Angeles, California.  The arbitrator will have the authority to permit discovery and to follow the procedures that he or she determines to be appropriate, as provided for under California law.  The arbitrator will have no power to award consequential (including lost profits), punitive or exemplary damages.  Such submission to arbitrate shall be the sole and exclusive remedy available to Executive or the Company.  The filing Party shall bear filing fees for the arbitration and each Party shall bear its own legal fees and costs resulting from the arbitration, unless a contract or statute provides for recovery to the prevailing party.  The judgment on the award rendered by the arbitrator shall be binding upon the Parties and may be entered in any court having jurisdiction.  Neither party may seek judicial review of the decision imposed by the arbitrator.

 

15.            This Agreement may be executed in counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument of this Agreement.

 

16.            This Agreement (including any exhibits attached hereto) constitutes the complete understanding between the parties with respect to the termination of Executive’s employment at the Company and supersedes any and all agreements, understandings, and discussions, whether written or oral, between the parties.  No amendment of any provision of this Agreement shall be valid unless the same shall be in writing and signed by each of the parties hereto.

 

[Signature page follows]

 

  

26

  

 

[Signature page to Agreement and Release]

 

	  	  	  
	  	  	  
	
Dated:

	  	  	  
	  	  	
Eileen P. Drake

	
AEROJET ROCKETDYNE HOLDING, INC.

	  	  
	  	  	  
	  	  	  
	
By:

	  	  	
Date:

	  
	  	
Warren G. Lichtenstein

	  	  	  
	  	
Chairman of the Board of Directors

	  	  	  

 

  

27

  

 

Exhibit C

 

Intellectual Property Prior to Employment

 

 

 

 

  

28

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00252-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00252-of-00352.parquet"}]]