Document:

Exhibit 10.17

 

ADAMAS PHARMACEUTICALS, INC.

INDEMNITY AGREEMENT

 

THIS AGREEMENT is made and entered into this               , 2014 by and between ADAMAS PHARMACEUTICALS, INC., a Delaware corporation (the “Corporation”), and                                              (“Agent”).

 

RECITALS

 

A.                Agent performs a valuable service to the Corporation in the capacity as a director, officer, employee or agent of the Corporation.

 

B.                The stockholders of the Corporation have adopted bylaws (the “Bylaws”) and the Amended and Restated Certificate of Incorporation of the Corporation (the “Certificate”) providing for the indemnification of the directors, officers, employees and other agents of the Corporation, including persons serving at the request of the Corporation in such capacities with other corporations or enterprises, as authorized by the Delaware General Corporation Law, as amended (the “Code”).

 

C.                The Bylaws, the Certificate and the Code, by their non-exclusive nature, permit contracts between the Corporation and its directors, officers, employees and other agents with respect to indemnification of such persons.

 

D.                The Corporation and Agent intend that this Agreement would replace any existing agreement between the Corporation and Agent with respect to the subject matter of this Agreement.

 

D.                In order to induce Agent to serve or to continue to serve as a director, officer, or employee of the Corporation, the Corporation has determined and agreed to enter into this Agreement with Agent.

 

In consideration of Agent’s continued service as a director, officer, employee or agent of the Corporation, the parties hereto agree as follows:

 

AGREEMENT

 

1.                 DEFINITIONS.

 

(a)           Expenses.  For purposes of this Agreement, the term “Expenses” shall be broadly construed and shall include, without limitation, all direct and indirect costs of any type or nature whatsoever (including, without limitation, all attorneys’, witness, or other professional fees and related disbursements, and other out-of-pocket costs of whatever nature), actually and reasonably incurred by Agent in connection with the investigation, defense or appeal of a Proceeding, participation in a Proceeding as a witness or establishing or enforcing a right to indemnification under this Agreement, the Code or otherwise, and amounts paid in settlement by or on behalf of Agent, but shall not include any judgments, fines or penalties actually levied against Agent for such individual’s violations of law.

 

(b)           Change in Control.  For purposes of this Agreement, a “Change in Control” shall be deemed to have occurred if (i) any “person” (as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934 (the “Act”)), other than a trustee or other fiduciary holding securities

 

 

under an employee benefit plan of the Corporation or a corporation owned directly or indirectly by the stockholders of the Corporation in substantially the same proportions as their ownership of stock of the Corporation, becomes the “beneficial owner” (as defined in Rule 13d-3 under said Act), directly or indirectly, of securities of the Corporation representing more than 20% of the total voting power represented by the Corporation’s then outstanding Voting Securities; or (ii) there is consummated a merger, consolidation or similar transaction involving (directly or indirectly) the Corporation if, immediately after the consummation of such merger, consolidation or similar transaction, the stockholders of the Corporation immediately prior thereto do not own, directly or indirectly, either (A) outstanding Voting Securities representing more than 50% of the combined outstanding voting power of the surviving entity in such merger, consolidation or similar transaction or (B) more than 50% of the combined outstanding voting power of the parent of the surviving entity in such merger, consolidation or similar transaction.

 

(c)           Independent Legal Counsel.  For purposes of this Agreement, “Independent Legal Counsel” shall mean an attorney or firm of attorneys, selected in accordance with the provisions of Section 5 hereof, who shall not have otherwise performed services for the Corporation (or for any entity that as of the time of selection of the attorney or firm of attorneys is controlled by, controlling or under common control with the Corporation) or Agent within the last three years (other than with respect to matters concerning the rights of Agent under this Agreement, or of other indemnitees under similar indemnity agreements).

 

(d)           Proceeding.  For purposes of this Agreement, the term “Proceeding” shall mean and shall include, without limitation, any threatened, pending, or completed action, suit, arbitration, alternate dispute resolution mechanism, investigation, inquiry, administrative hearing, whether brought in the right of or by the Corporation or otherwise and whether of a civil, criminal, administrative or investigative nature, and whether formal or informal in any case, in which Agent was, is or will be involved as a party or otherwise by reason of the fact that:  (i) Agent is or was a director, officer, employee or agent of the Corporation; (ii) Agent took an action while acting as director, officer, employee or agent of the Corporation; or (iii) Agent is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust, employee benefit plan or other enterprise, and in any such case described above, whether or not serving in any such capacity at the time any Expense is incurred for which indemnification, reimbursement, or advancement of Expenses may be provided under this Agreement.  For the avoidance of doubt, an action by Agent to enforce Agent’s rights to indemnification under this Agreement shall be a “Proceeding” for purposes of this Agreement.

 

(e)           Voting Securities.  For purposes of this Agreement, “Voting Securities” shall mean any securities of the Corporation that vote generally in the election of directors.

 

2.                 SERVICES TO THE CORPORATION. Agent will serve, at the will of the Corporation or under separate contract, if any such contract exists, as a director, officer, or employee of the Corporation or as a director, officer or other fiduciary of an affiliate of the Corporation (including, but not limited to, any employee benefit plan of the Corporation) faithfully and to the best of Agent’s ability so long as Agent (a) if an officer or director of the Corporation or an affiliate of the Corporation, is duly elected and qualified in accordance with the provisions of the Bylaws or other applicable charter documents of the Corporation or such affiliate and (b) if an employee of the Corporation or an affiliate of the Corporation, remains employed by the Corporation or such affiliate, as applicable; provided, however, that Agent may at any time and for any reason resign from such position (subject to any contractual

 

2

 

obligation that Agent may be subject to apart from this Agreement) and that the Corporation or any affiliate of the Corporation shall have no obligation under this Agreement to continue Agent in any such position.

 

3.                 INDEMNITY OF AGENT.  The Corporation hereby agrees to hold harmless and indemnify Agent to the fullest extent authorized or permitted by the provisions of the Bylaws, the Certificate and the Code, as the same may be amended from time to time (but, only to the extent that such amendment permits the Corporation to provide broader indemnification rights than the Bylaws, the Certificate or the Code permitted prior to adoption of such amendment).  These obligations and the other obligations of the Corporation in this Agreement apply regardless of whether the conduct giving rise to the obligations occurred before or occur after the date this Agreement is executed.

 

4.                 PARTIAL INDEMNIFICATION.  Agent shall be entitled under this Agreement to indemnification by the Corporation for a portion of the Expenses that Agent becomes legally obligated to pay in connection with any Proceeding even if not entitled hereunder to indemnification for the total amount thereof, and the Corporation shall indemnify Agent for the portion thereof to which Agent is entitled.

 

5.                 CHANGE IN CONTROL.  The Corporation agrees that if there is a Change in Control of the Corporation then, with respect to all matters thereafter arising concerning the rights of Agent to indemnification (including, but not limited to, any right to advancement of Expenses) under this Agreement, any other agreement with the Corporation providing for indemnification, the Certificate, Bylaws and applicable law (collectively, the “Indemnification Provisions”) as now or hereafter in effect, Independent Legal Counsel (as defined in Section 1 hereof) shall be selected by Agent and approved by the Corporation (which approval shall not be unreasonably withheld).  Such Independent Legal Counsel shall render its written opinion to the Corporation and Agent as to whether and to what extent Agent would be permitted to be indemnified under the Indemnification Provisions prior to and after the consummation of such Change in Control and such opinion shall be binding upon Agent and the Corporation.  The Corporation agrees to pay the reasonable fees of the Independent Legal Counsel referred to above and to fully indemnify such counsel against any and all Expenses arising out of or relating to this Agreement or its engagement pursuant hereto.

 

6.                 NOTIFICATION AND DEFENSE OF CLAIM.  Not later than thirty (30) days after receipt by Agent of notice of the commencement of any Proceeding, Agent will, if a claim in respect thereof is to be made against the Corporation under this Agreement, notify the Corporation of the commencement thereof; but the failure so to notify the Corporation will not relieve the Corporation from any liability which it may have to Agent under this Agreement or otherwise. With respect to any such Proceeding as to which Agent notifies the Corporation of the commencement thereof:

 

(a)               the Corporation will be entitled to participate therein at its own expense;

 

(b)               except as otherwise provided below, the Corporation may, at its option and jointly with any other indemnifying party similarly notified and electing to assume such defense, assume the defense thereof, with counsel reasonably satisfactory to Agent. After notice from the Corporation to Agent of its election to assume the defense thereof, the Corporation will not be liable to Agent under this Agreement for any Expenses subsequently incurred by Agent in connection with the defense thereof except for reasonable costs of investigation or otherwise as provided below. Agent shall have the right to employ separate counsel in such Proceeding but the Expenses of such counsel incurred after notice from

 

3

 

the Corporation of its assumption of the defense thereof shall be at the expense of Agent; provided, however, that the Expenses of Agent’s separate counsel shall be borne by the Corporation if (i) the employment of separate counsel by Agent has been authorized by the Corporation and the Corporation has agreed in writing to bear such Expenses, (ii) Agent reasonably shall have concluded that there may be a conflict of interest between the Corporation and Agent in the conduct of the defense of such Proceeding, or (iii) the Corporation in fact shall not have employed counsel to assume the defense of such Proceeding or shall at any time have ceased to actively pursue the defense thereof. The Corporation shall not be entitled to assume the defense of any Proceeding brought by or on behalf of the Corporation or as to which Agent shall have made the conclusion provided for in clause (ii) above; and

 

(c)               the Corporation shall not be liable to indemnify Agent under this Agreement for any amounts paid in settlement of any Proceeding effected without its written consent, which shall not be unreasonably withheld or delayed.  The Corporation shall be permitted to settle any Proceeding except that it shall not settle any Proceeding in any manner that would impose any penalty or limitation on Agent without Agent’s written consent, which may be given or withheld in Agent’s sole discretion.

 

7.                 EXPENSES.  Promptly following request by Agent for the advancement of Expenses, the Corporation shall advance, prior to the final disposition of any Proceeding, all Expenses incurred by Agent in connection with such Proceeding (through the final disposition of any such Proceeding from which all rights of appeal have either been exhausted or have lapsed) upon receipt of an undertaking by or on behalf of Agent to repay such amounts if it shall ultimately be determined by a final judicial decision from which there is no further right of appeal that Agent is not entitled to be indemnified.

 

8.                 ENFORCEMENT.  Any right to indemnification or advances granted by this Agreement to Agent shall be enforceable by or on behalf of Agent in any court of competent jurisdiction if (a) the claim for indemnification or advances is denied, in whole or in part, or (b) no disposition of such claim is made within ninety (90) days of request therefor.  Agent, in such enforcement action, if successful in whole or in part, also shall be entitled to be paid the Expense of prosecuting Agent’s claim. Neither the failure of the Corporation (including its Board of Directors or its stockholders) to have made a determination prior to the commencement of such enforcement action that indemnification of Agent is proper in the circumstances, nor an actual determination by the Corporation (including its Board of Directors or its stockholders) that such indemnification is improper shall be a defense to the action or create a presumption that Agent is not entitled to indemnification under this Agreement or otherwise.

 

9.                 INSURANCE.    [Note to draft: This provision should be removed for non-officer employees]

 

(a)           Unless otherwise approved by the Board of Directors prior to a Change in Control, the Corporation shall obtain and maintain during the term of this Agreement directors’ and officers’ liability insurance (“D&O Insurance”) with respect to which Agent shall be named as an insured.  Notwithstanding any other provision of this Agreement, the Corporation shall not be obligated to indemnify the Agent for Expenses that have been previously paid directly to the Agent by D&O Insurance.  If the Corporation has D&O Insurance in effect at the time the Corporation receives from Agent any notice of the commencement of a Proceeding, the Corporation shall give prompt notice of the commencement of such Proceeding to the insurers in accordance with the procedures set forth in the policy.  The Corporation shall thereafter take all reasonably necessary action to cause such insurers to

 

4

 

pay, on behalf of the Agent, all amounts payable as a result of such Proceeding in accordance with the terms of such policy.

 

(b)           In the event that (i) the D&O Insurance policy is renewed but the renewed policy does not provide for prior act’s coverage, or (ii) the Corporation obtains a new D&O Insurance policy for any period following the termination of the prior D&O Insurance, and such new D&O Insurance policy does not provide for prior act’s coverage, or (iii) the Corporation does not renew the D&O Insurance policy or obtain a new D&O Insurance policy following the termination of a D&O Insurance policy, then unless otherwise determined by the Board of Directors, the Corporation shall add to the D&O Insurance policy or the applicable successor D&O Insurance policy a run-off endorsement (the “Endorsement”) on the existing D&O Insurance policy (and in the case of (iii) above, do so prior to the termination of the existing D&O Insurance policy if necessary) or the applicable successor D&O Insurance policy subject to the same terms and conditions in all material respects.  Unless otherwise approved by the Board of Directors prior to the date on which the Endorsement is obtained, the Endorsement shall be non-cancelable and shall provide for at least a six-year extended coverage period for any and all claims covered under the D&O Insurance policy.  The Corporation shall pay all premiums, commissions and other costs or charges incurred in obtaining the Endorsement and shall promptly deliver to Agent a Certificate of Confirmation of Insurance with respect to such Endorsement.

 

(c)           [For Fund Representatives on the Board only:] [The Corporation hereby acknowledges that Agent has certain rights to indemnification, advancement of expenses and/or insurance provided by [Name of Fund/Sponsor] and certain of its affiliates (collectively, the “Fund Indemnitors”).  The Corporation hereby agrees (i) that it is the indemnitor of first resort (i.e., its obligations to Agent are primary and any obligation of the Fund Indemnitors to advance expenses or to provide indemnification for the same expenses or liabilities incurred by Agent are secondary), (ii) that it shall be required to advance the full amount of expenses incurred by Agent and shall be liable for the full amount of all Expenses, judgments, penalties, fines and amounts paid in settlement to the extent legally permitted and as required by the terms of this Agreement and the Certificate of Incorporation or Bylaws of the Corporation (or any other agreement between the Corporation and Agent), without regard to any rights Agent may have against the Fund Indemnitors, and (iii)  that it irrevocably waives, relinquishes and releases the Fund Indemnitors from any and all claims against the Fund Indemnitors for contribution, subrogation or any other recovery of any kind in respect thereof.  The Corporation further agrees that no advancement or payment by the Fund Indemnitors on behalf of Agent with respect to any claim for which Agent has sought indemnification from the Corporation shall affect the foregoing and the Fund Indemnitors shall have a right of contribution and/or be subrogated to the extent of such advancement or payment to all of the rights of recovery of Agent against the Corporation.  The Corporation and Agent agree that the Fund Indemnitors are express third party beneficiaries of the terms of this Section 9(c).]

 

10.               SUBROGATION.  In the event of payment under this Agreement, the Corporation shall be subrogated to the extent of such payment to all of the rights of recovery of Agent, who shall execute all documents required and shall do all acts that may be reasonably necessary to secure such rights, including the execution of such documents necessary to enable the Corporation effectively to bring suit to enforce such rights.

 

11.               CONTRIBUTION.  To the fullest extent permissible under applicable law, if the indemnification provided for in this Agreement is unavailable to Agent, the Corporation, in lieu of indemnifying Agent, shall contribute to the Agent’s Expenses in connection with any claim relating to any Proceeding, in such proportion as is deemed fair and reasonable in light of all of the circumstances of

 

5

 

such proceeding in order to reflect (a) the relative benefits received by the Corporation and Agent as a result of the events and transactions giving rise to such Proceeding; and (b) the relative fault of Agent and the Corporation (and its other directors, officers, employees and agents) in connection with the circumstances, events or transactions that gave rise to the Proceeding.

 

12.               NON-EXCLUSIVITY AND SURVIVAL OF RIGHTS.

 

(a)               All agreements and obligations of the Corporation contained herein shall continue during the period Agent is a director, officer, employee or other agent of the Corporation (or is or was serving at the request of the Corporation as a director, officer, employee or other agent of another corporation, partnership, joint venture, trust, employee benefit plan or other enterprise) and shall continue thereafter so long as Agent shall be subject to any possible Proceeding.  The benefits hereunder shall inure to the benefit of the heirs, executors and administrators and assigns of Agent. The rights conferred on Agent by this Agreement shall not be exclusive of any other right Agent may have or hereafter acquire under any statute, provision of the Certificate or Bylaws, agreement, vote of stockholders or disinterested directors, or otherwise, both as to action in Agent’s official capacity and as to action in another capacity while holding office.

 

(b)               The obligations and duties of the Corporation to Agent under this Agreement shall be binding on the Corporation and its successors and assigns until terminated in accordance with its terms.  The Corporation shall require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to the Corporation or to all or substantially all of the business or assets of the Corporation, expressly to assume and agree to perform this Agreement in the same manner and to the same extent that the Corporation would be required to perform if no such succession had taken place.

 

(c)               No amendment, alteration or repeal of this Agreement or of any provision hereof shall limit or restrict any right of Agent under this Agreement in respect of any action taken or omitted by such Agent prior to such amendment, alteration or repeal.  To the extent that a change in the Code, whether by statute or judicial decision, permits greater indemnification or advancement of Expenses than would be afforded currently under the Certificate, Bylaws and this Agreement, it is the intent of the parties hereto that Agent shall enjoy by this Agreement the greater benefits so afforded by such change.  No right or remedy herein conferred is intended to be exclusive of any other right or remedy, and every other right and remedy shall be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise.  The assertion or employment of any right or remedy hereunder, or otherwise, by Agent shall not prevent the concurrent assertion or employment of any other right or remedy by Agent.

 

13.               SEVERABILITY. Each of the provisions of this Agreement is a separate and distinct agreement and independent of the others, so that if any provision hereof shall be held to be invalid for any reason, such invalidity contained herein or unenforceability shall not affect the validity or enforceability of the other provisions hereof. Furthermore, if this Agreement shall be invalidated in its entirety on any ground, then the Corporation nevertheless shall indemnify Agent to the fullest extent provided by the Certificate, Bylaws, the Code or any other applicable law.

 

14.               GOVERNING LAW. This Agreement shall be governed exclusively by and construed according to the laws of the State of Delaware, as applied to contracts between Delaware residents entered into and to be performed entirely within Delaware.

 

6

 

15.               AMENDMENT, MODIFICATION, WAIVER AND TERMINATION. No amendment, modification, termination or cancellation of this Agreement shall be effective unless signed in writing by both parties hereto, provided, however, that the Corporation shall have the right to amend, modify, terminate or replace this Agreement if: (i) there is a change in the Code or any other applicable law; or (ii) the Corporation amends, modifies, terminates or replaces its form of Indemnification Agreement for directors, officers, employees and other agents of the Corporation; provided, that such amended or modified agreement or such new agreement does not diminish in any material respect the rights of Agent hereunder.  No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provision hereof (whether or not similar) nor shall such waiver constitute a continuing waiver.

 

16.               ENTIRE AGREEMENT.  This Agreement constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior agreements, understandings and negotiations, written and oral, between the parties with respect to the subject matter of this Agreement; provided, however, that this Agreement is a supplement to and in furtherance of the Certificate, Bylaws, the Code and any other applicable law, and shall not be deemed a substitute therefore, nor to diminish or abrogate any rights of Agent thereunder.

 

17.               INTERPRETATION OF AGREEMENT.  It is understood that the parties hereto intend this Agreement to be interpreted and enforced so as to provide indemnification to Agent to the fullest extent now or hereafter permitted by law.

 

18.               IDENTICAL COUNTERPARTS.  This Agreement may be executed in one or more counterparts, each of which shall be deemed for all purposes to be an original but all of which together shall constitute this Agreement.

 

19.               HEADINGS.  The headings of the sections of this Agreement are inserted for convenience only and shall not be deemed to constitute part of this Agreement or to affect the construction hereof.

 

20.               NOTICES.  All notices, requests, demands and other communications hereunder shall be in writing and shall be deemed to have been duly given (i) upon delivery if delivered by hand to the party to whom such communication was directed or (ii) upon the third business day after the date on which such communication was mailed if mailed by certified or registered mail with postage prepaid:

 

(a)                                             If to Agent, at the address indicated on the signature page hereof.

 

(b)                                             If to the Corporation, to

 

Attn:  Gregory Went, Chief Executive Officer and Chairman

Adamas Pharmaceuticals, Inc.

2200 Powell Street, Suite 220

Emeryville, CA 94608

 

or to such other address as may have been furnished to Agent by the Corporation, or to such other address as Agent may direct in writing the Corporation to use.

 

7

 

The parties hereto have executed this Agreement on and as of the day and year first above written.

 

	
ADAMAS PHARMACEUTICALS, INC.
    	
 
    
	
 
    	
 
    	
 
    
	
By:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Name:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Title:
    	
 
    	
 
    

 

 

	
AGENT
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
(Signature)
    	
 
    
	
 
    	
 
    
	
Print   Name:
    	
 
    
	
 
    	
 
    
	
 
    	
 
    

 

Address for Agent:

c/o Adamas Pharmaceuticals, Inc.

2200 Powell Street, Suite 220

Emeryville, CA 94608

 

8Exhibit 10.18

 

ADAMAS PHARMACEUTICALS, INC. 
 TRANSACTION BONUS PLAN

 

	
Purpose
    	
 
    	
The   purpose of the Adamas Pharmaceuticals, Inc. Transaction Bonus Plan (the   “Plan”) is to induce key   contributors to remain with Adamas Pharmaceuticals, Inc. (the “Company”), and to enhance the   Company’s value, by providing incentive bonuses in the event that the Company   receives certain license payments.
    
	
 
    	
 
    	
 
    
	
Triggering   Event (the “Covered Transaction”)
    	
 
    	
Benefits   under the Plan are payable in connection with certain payments made to the   Company pursuant to that certain License Agreement (the “Agreement”)   by and between Forest Laboratories Holdings Limited and the Company dated as   of November 14, 2012 (the “Covered Transaction”).   
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Non-cash   consideration will be valued in good faith by the Company’s Board of   Directors.
    
	
 
    	
 
    	
 
    
	
Size   of Pool (the “Pool”)
    	
 
    	
The   Pool is an amount equal to 1% of the Specified Transaction Consideration, up   to a maximum aggregate amount of $1,600,000. 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
“Specified Transaction Consideration”   means the Initial License Payment (as defined in the Agreement) and the   Milestone Payments (as defined in the Agreement) payable in connection with   the Covered Transaction, but excluding any royalties and other payments under   Section 6.4 of the Agreement.
    
	
 
    	
 
    	
 
    
	
Selection   of Participants
    	
 
    	
The   Company’s Board of Directors may select the participants in the Plan at any   time (the “Participants”), based upon   the recommendation of the Company’s Chief Executive Officer.
    
	
 
    	
 
    	
 
    
	
Allocation   of Pool
    	
 
    	
The   Company’s Board of Directors will allocate some or all of the Pool among the   Participants at any time. The amount allocated to each Participant (such   Participant’s “Bonus Amount”) shall   represent the maximum aggregate amount to which each he/she may become   entitled hereunder and shall be expressed as either a fixed dollar or   percentage of the total Pool amount.
    

 

 

	
Prerequisites   for Payment
    	
 
    	
A   Participant earns the right to be paid his/her Bonus Amount by continuing to   be employed by the Company through any date pursuant to which payments are   made in connection with the Covered Transaction. Such payments will be paid   to the Participants within the 60th day following the date such payment was   scheduled to be paid in connection with the Covered Transaction. 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
At   the discretion of the Board of Directors, no benefits will be paid to a   Participant unless the Participant executes a general release of all claims   (in a form prescribed by the Company) he or she may have against the Company   or persons affiliated with the Company through the date of the release. The   release must be executed and returned to the Company on or before the date   specified by the Company in the prescribed form, which will in no event be   later than 45 days after a payment is payable in connection with a Covered   Transaction (the “Release Deadline”). If a   Participant has not executed a general release of claims by the Release   Deadline as requested by the Company or revokes such release, the Participant   will not be entitled to the applicable payments or benefits under the Plan. 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
To   the extent that a Participant’s benefit is forfeited because the Participant   failed to satisfy one or more of the prerequisites to payment specified in   this section, the Company shall have no further obligation to the Participant   (or anyone who may claim through the Participant) with respect to such   forfeited amount and the aggregate Pool will be allocated pro rata to the   remaining Participants.
    
	
 
    	
 
    	
 
    
	
Form of   Payment
    	
 
    	
Bonuses   will be paid in cash.
    
	
 
    	
 
    	
 
    
	
Withholding   Taxes
    	
 
    	
All   payments under the Plan will be reduced as necessary to pay withholding and   payroll taxes and other deductions required by law. 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
At   the discretion of the Board of Directors, payments under the Plan may also be   reduced by the amount necessary to pay the employer portion of applicable   taxes (e.g., FICA and Medicare), in which   case the aggregate Pool will be reduced by the amount of such employer taxes.
    

 

2

 

	
Section 409A
    	
 
    	
It   is intended that each installment of the payments provided under this Plan is   a separate “payment” for purposes of Treasury Regulation   Section 1.409A-2(b)(2)(i). 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
It   is intended that payments under the Plan satisfy, to the greatest extent   possible, the exemption from the application of Section 409A of the   Internal Revenue Code (the “Code”)   (and any state law of similar effect) provided under Treasury Regulation   Section 1.409A-1(b)(4) (as a “short-term deferral”). 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Notwithstanding   the foregoing, in no event will the Company or any successor be responsible   for or have any obligation to reimburse a Participant for any taxes that may   be imposed on a Participant under Section 409A of the Code.
    
	
 
    	
 
    	
 
    
	
Source   of Payments
    	
 
    	
The   Company or its successor will make all payments under the Plan from its   general assets. The Company’s obligations under the Plan are unfunded and   unsecured, and Participants have no rights other than those of general   creditors.
    
	
 
    	
 
    	
 
    
	
No   Assignment of Benefits
    	
 
    	
Benefits   under the Plan are not assignable or transferable by Participants before they   are paid. Benefits will be paid only to the Participants who are entitled to   receive them under the Plan.
    

 

3

 

	
Parachute   Tax Penalties and Stockholder Approval
    	
 
    	
·                  The excise tax on excess   parachute payments, determined under Sections 280G and 4999 of the   Code, generally applies if all of a Participant’s parachute payments together   equal or exceed 300% of his/her average annual compensation from the Company   reported on Form W-2 Box 1. It generally does not apply, however, if the   bonus is (a) subject to approval by more than 75% of the Company’s   stockholders (excluding from both the numerator and denominator, individuals   receiving parachute payments subject to stockholder approval), and   (b) is so approved at the time of a Covered Transaction. 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
·                  All benefits payable under   the Plan are subject to approval by more than 75% of the Company’s   disinterested stockholders, if the Company’s Board of Directors reasonably   determines that such approval is or may be required to avoid application of   the excise tax on, and the loss of a Company deduction resulting from, excess   parachute payments. If the Board of Directors reasonably determines that   approval is or may be required and a benefit is not approved by more than 75%   of the stockholders, then that benefit shall not be paid. 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
·                  A Participant’s bonus will   be reduced to the extent that, as a result of the excise tax on excess   parachute payments, the Participant’s after-tax proceeds would be greater   after the reduction than before the reduction.
    
	
 
    	
 
    	
 
    
	
Employment   at Will
    	
 
    	
Employment   with the Company is for no specific period of time. Participation in the Plan   does not confer any right to continued employment, and a Participant’s   employment with the Company is “at will.” Therefore, either the Participant   or the Company may terminate the Participant’s employment at any time and for   any reason, with or without cause.
    
	
 
    	
 
    	
 
    
	
Administration
    	
 
    	
The   Plan will be interpreted and administered by the Company’s Board of Directors   or a duly authorized committee of the Board of Directors. Any reference to   the Board of Directors in this Plan will be construed as a reference to the   committee of the Board of Directors (if any) to whom the Board of Directors has   assigned a particular function. The determinations of the Board of Directors   with regard to the Plan will be final, binding, and conclusive on all   Participants.
    

 

4

 

	
Amendment   and Termination
    	
 
    	
Prior   to the closing of a Covered Transaction, the Plan may be amended or   terminated by the Company’s Board of Directors, including any amendments   deemed advisable by the Board of Directors in order to avoid adverse tax   consequences for one or more Participants imposed by   Section 409A(a)(1) of the Code (or similar taxes imposed by state   law). Thereafter, the Plan may not be amended or terminated without the   consent of each adversely affected Participant.
    

 

5

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00227-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00227-of-00352.parquet"}]]