Document:

EX-10.1

 Exhibit 10.1 

Execution Version 

AMENDMENT NO. 7 TO CREDIT AGREEMENT 

AMENDMENT NO. 7 TO REVOLVING CREDIT AGREEMENT, dated as of November 21, 2017 (this “Agreement”), by and among National
Mentor Holdings, Inc., a Delaware corporation (the “Borrower”), the other Loan Parties party hereto, Barclays Bank PLC, as administrative agent (the “Administrative Agent”), Issuing Lender and Swingline Lender under
the Credit Agreement (as defined below) and the Lenders party hereto (the “Extending Lenders”). 
 RECITALS: 

WHEREAS, reference is hereby made to the Credit Agreement, dated as of January 31, 2014 (as amended, supplemented, amended and
restated or otherwise modified from time to time, the “Credit Agreement”), among the Borrower, NMH Holdings, LLC, the Administrative Agent and each Lender from time to time party thereto, and the other parties thereto (capitalized
terms used but not defined herein having the meaning provided in the Credit Agreement). 
 WHEREAS, the Borrower has delivered to the
Administrative Agent a request to increase the Revolving Commitments by an aggregate principal amount of $40,000,000 (the “Increased Commitments”) on terms identical to those applicable to the existing Revolving Facility (including
as to pricing, tenor, rights of payment and prepayment and right of security) as a Revolving Commitment Increase pursuant to this Agreement (which shall constitute an Incremental Facility Amendment) as provided for in
Section 2.25 of the Credit Agreement (the “Effective Date Commitment Increase”). 

WHEREAS, the Borrower has delivered to the Administrative Agent an Extension Offer to extend the maturity of the Revolving Commitments
to January 31, 2021 as provided for in Section 2.24 of the Credit Agreement (the “Effective Date Extended Revolving Termination Date”). 

WHEREAS, in connection with (x) such Revolving Commitment Increase and pursuant to Section 2.25 of the
Credit Agreement and (y) such Extension Offer and pursuant to Section 2.24 of the Credit Agreement, the Borrower, the Administrative Agent and the Extending Lenders party hereto wish to make certain amendments and the
other modifications to the Credit Agreement set forth herein. 
 NOW, THEREFORE, in consideration of the premises and agreements,
provisions and covenants herein contained, the parties hereto agree as follows: 
  

	1.	Credit Agreement Amendments—Effective Date Commitment Increase. Effective as of the Effective Date (as defined below) but immediately prior to the effectiveness of the amendments set forth in Section 3
below, the Credit Agreement is hereby amended as follows: 

  

	 	(a)	Section 1.1 of the Credit Agreement is amended by inserting the following new definitions in their correct alphabetical order: 

“Amendment No. 7” shall mean Amendment No. 7 to this Agreement, dated as of
November 21, 2017, among the Borrower, the Administrative Agent, the other Loan Parties party thereto and the Lenders party thereto. 

“Amendment No. 7 Effective Date” shall mean the “Effective Date” under and as
defined in Amendment No. 7. 

	 	(b)	The definition of “Revolving Commitment” is amended by adding the following sentence at the end thereof: “As of the Amendment No. 7 Effective Date, the aggregate amount of the Revolving Commitment is
$160,000,000.” 

  

	2.	Lender Reallocations. Effective as of the Effective Date and immediately prior to the effectiveness of the amendments set forth in Section 3 below, the participations held by the Revolving Lenders in the
Revolving L/C Exposure and Swingline Loans immediately prior to the Revolving Commitment Increase effected hereby will be reallocated so as to be held by the Revolving Lenders ratably in accordance with their respective Revolving Percentages after
giving effect to such Revolving Commitment Increase. 

  

	3.	Credit Agreement Amendments - Effective Date Extended Revolving Termination Date. Effective as of the Effective Date (as defined below) but immediately after the effectiveness of the amendments set forth in
Section 1 above, the Credit Agreement is hereby amended as follows: 

  

	 	(a)	Section 1.1 of the Credit Agreement is amended by inserting the following new definitions in their correct alphabetical order 

“Amendment No. 7 Consenting Revolving Lender” means each Revolving Lender that has executed
Amendment No. 7 on or prior to the Amendment No. 7 Effective Date. For the avoidance of doubt, the Amendment No. 7 Consenting Revolving Lenders constitute Extended Revolving Lenders and Revolving Lenders. 

“Amendment No. 7 Extended Revolving Commitments” means, as to each Revolving Lender that is
an Amendment No. 7 Consenting Revolving Lender, the Revolving Commitments of such Amendment No. 7 Consenting Revolving Lender immediately prior to the effectiveness of the amendments set forth in Section 3 of Amendment No. 7. For
the avoidance of doubt (i) the Amendment No. 7 Extended Revolving Commitments constitute Extended Revolving Commitments and Revolving Commitments, (ii) the Initial Revolving Commitments of each Amendment No. 7 Consenting
Revolving Lender shall be deemed automatically reduced on the Amendment No. 7 Effective Date by the Amendment No. 7 Extended Revolving Commitments of such Revolving Lender and (iii) the Amendment No. 7 Extended Revolving
Commitments shall constitute a separate “Class”. References to the “Amendment No. 7 Extended Revolving Commitments” shall mean the Amendment No. 7 Extended Revolving Commitment of each Lender taken together. The initial
aggregate principal amount of the Lenders’ Amendment No. 7 Extended Revolving Commitments on the Amendment No. 7 Effective Date is $90,000,000 and the aggregate principal amount of the Initial Revolving Commitments as of the Amendment
No. 7 Effective Date is $70,000,000. 
 “Amendment No. 7 Extended Revolving Loans”
means the Extended Revolving Loans established pursuant to Amendment No. 7. For the avoidance of doubt, the Amendment No. 7 Extended Revolving Loans (and any Swingline Loans in which any Amendment No. 7 Consenting Revolving Lender
holds a risk participation (funded or unfunded)) constitute Extended Revolving Loans, and the Amendment No. 7 Extended Revolving Loans (other than Swingline Loans) constitute Revolving Loans and any Swingline Loans in which an Amendment
No. 7 Consenting Revolving Lender holds a risk participation (funded or unfunded) shall constitute Swingline Loans. 
  

	 	(b)	Each of the definitions of “Applicable Margin”, “Fee Payment Date”, and “Revolving Termination Date” set forth in Section 1.1 of the Credit Agreement, in each case, is hereby amended
and restated in its entirety as follows: 

  
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 “Applicable Margin”: for each Type of Loan, the rate per annum
set forth under the relevant column heading below: 
  

									
	 	  	ABR Loans	 	 	Eurodollar Loans	 
	 Initial Revolving Loans and Swingline Loans
	  	 	2.25	% 	 	 	3.25	% 
	 Amendment No. 7 Extended Revolving Loans
	  	 	2.25	% 	 	 	3.25	% 
	 Tranche B Term Loans
	  	 	2.00	% 	 	 	3.00	% 

 ; provided, the Applicable Margin for Amendment No. 7 Extended Revolving Loans and
Swingline Loans shall be decreased by 0.25% per annum from the rates set forth above on the earlier of (i) the Revolving Termination Date for the Initial Revolving Commitments and (ii) the date on which the Initial Revolving Commitments
are terminated and there is no remaining Revolving Extension of Credit (in the case of fees payable in respect of the Revolving Facility or any Revolving Extension of Credit) in respect of the Initial Revolving Commitments in accordance with the
terms of this Agreement. 
 “Fee Payment Date”: (a) the last Business Day of each March, June, September and
December and (b) with respect to any Class of Revolving Commitments, the last day of the Revolving Commitment Period applicable to such Class or any earlier date on which such Class of Revolving Commitments are terminated and
there is no remaining Revolving Extension of Credit (in the case of fees payable in respect of the Revolving Facility or any Revolving Extension of Credit) in respect of such Class of Revolving Commitments. 

“Revolving Termination Date” means (i) with respect to the Initial Revolving Commitments,
January 31, 2019 and (ii) with respect to the Amendment No. 7 Extended Revolving Commitments, January 31, 2021. 
  

	 	(c)	Section 2.4 of the Credit Agreement is hereby amended by adding the following to the end of such Section 2.4: “For the avoidance of doubt, prior to the Revolving Termination Date for the Initial Revolving
Commitments, all Borrowings under the Revolving Commitments shall be made on a ratable basis among the Initial Revolving Commitments and the Amendment No. 7 Extended Revolving Commitments.” 

 

	 	(d)	Section 2.6(a) of the Credit Agreement is hereby amended by adding the following to the end of such Section 2.6(a): “For the avoidance of doubt, Swingline Loans shall be participated in on a ratable basis
by Lenders holding Initial Revolving Commitments and Lenders holding Amendment No. 7 Extended Revolving Commitments.” 

  

	 	(e)	Section 2.8 of the Credit Agreement is hereby amended by adding the following to the end of such Section 2.8: “For the avoidance of doubt, prior to the Revolving Termination Date for the Initial Revolving
Commitments, all payments of such commitment fee (other than prepayments of commitment fees in connection with a termination of the Initial Revolving Commitments) shall be made on a ratable basis among the Lenders holding the Initial Revolving
Commitments and the Amendment No. 7 Extended Revolving Commitments.” 

  

	 	(f)	Section 2.9(a) of the Credit Agreement is hereby amended by adding the following to the end of such Section 2.9(a): “For the avoidance of doubt, the Borrower may not terminate or permanently reduce the
Amendment No. 7 Extended Revolving Commitments without also terminating or permanently reducing any then outstanding Initial Revolving Commitments on a pro rata (or greater) basis.” 

  
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	 	(g)	Section 2.10(a) of the Credit Agreement is hereby amended by adding the following to the end of such Section 2.10(a): “For the avoidance of doubt, prior to the Revolving Termination Date for the Initial
Revolving Commitments, all prepayments under this Section 2.10(a) (other than prepayments of Revolving Loans in connection with a termination of the Initial Revolving Commitments) of any Revolving Loans shall be made on a
ratable basis among the Initial Revolving Loans and the Amendment No. 7 Extended Revolving Loans.” 

  

	 	(h)	Section 2.14 of the Credit Agreement is hereby amended by adding the following new clause (e) at the end thereof as follows: 

 

	 	“(e)	For the avoidance of doubt, prior to the Revolving Termination Date for the Initial Revolving Commitments, all payments of interest (other than prepayments of interest in connection with a termination of the Initial
Revolving Commitments) shall be made on a ratable basis among the Lenders holding the Initial Revolving Commitments and the Amendment No. 7 Extended Revolving Commitments.” 

 

	 	(i)	Section 3.1(b) of the Credit Agreement is hereby amended and restated in its entirety as follows: “(b) For the avoidance of doubt, Revolving Letters of Credit shall be participated on a ratable basis by
Lenders holding Initial Revolving Commitments and Lenders holding Amendment No. 7 Extended Revolving Commitments.” 

  

	 	(j)	Schedule 1.1A to the Credit Agreement is hereby amended by replacing the section titled “Revolving Commitments” thereof with the section titled “Revolving Commitments” on the schedule attached
to this Agreement as Exhibit A. 

  

	4.	Issuing Lender Agreement. The Issuing Lender hereby agrees that with respect to any Revolving Letters of Credit the expiration date for which extend beyond the Revolving Termination Date for the Initial Revolving
Commitments, participations in such Revolving Letters of Credit on such Revolving Termination Date shall be reallocated from Lenders holding the Initial Revolving Commitments to Lenders holding Amendment No. 7 Extended Revolving Commitments
immediately after giving effect to such maturity of such Initial Revolving Commitments (provided that such participation interests shall, upon receipt thereof by the relevant Lenders holding Revolving Commitments, be deemed to be
participation interests in respect of such Revolving Commitments and the terms of such participation interests (including, without limitation, the commission applicable thereto) shall be adjusted accordingly). 

 

	5.	Effective Date Conditions. 

  

	 	(a)	This Agreement will become effective on the date (the “Effective Date”) on which each of the following conditions have been satisfied (or waived) in accordance with the terms therein: 

 

	 	(i)	this Agreement shall have been executed and delivered by the Borrower, the other Loan Parties, the Administrative Agent, the Issuing Lender, the Swingline Lender and the Extending Lenders; 

 

	 	(ii)	 the Administrative Agent shall have received a certificate of the Borrower dated as of the Effective Date signed
by a Responsible Officer of the Borrower (i) (A) certifying and attaching the resolutions or similar consents adopted by the Borrower approving or consenting to this Agreement and the Revolving

  
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Commitment Increase, (B) certifying that the certificate or articles of incorporation and by-laws of the Borrower either (x) has not been amended
since the Closing Date or (y) is attached as an exhibit to such certificate, and (C) certifying as to the incumbency and specimen signature of each officer executing this Agreement and any related documents on behalf of the Borrower and
(ii) certifying as to the matters set forth in clauses (v), (vi) and (vii) below; 

  

	 	(iii)	the Administrative Agent shall have received (x) all fees and out-of-pocket expenses for which invoices have been presented prior to
the Effective Date (including the reasonable fees and expenses of legal counsel) required to be paid or reimbursed by the Borrower pursuant to Section 10.5 of the Credit Agreement in connection with this Agreement shall have been paid or
reimbursed and (y) all fees required to be paid by the Borrower on the Effective Date pursuant the engagement and fee letter dated as of November 15, 2017, by and among Barclays Bank PLC and the Borrower; 

 

	 	(iv)	the Administrative Agent shall have received an opinion of Kirkland & Ellis LLP, in form and substance reasonably satisfactory to the Administrative Agent; 

 

	 	(v)	each of the representations and warranties made by each Loan Party contained in the Credit Agreement and in the other Loan Documents shall be true and correct in all material respects on as of the Effective Date as if
made on and as of such date (other than representations and warranties which speak only as of a certain date, which representations and warranties shall be made only on such date); 

 

	 	(vi)	the representations and warranties in Section 6 of this Agreement shall be true and correct in all material respects as of the Effective Date; and 

 

	 	(vii)	no Event of Default shall exist on the Effective Date immediately before and after giving effect to the effectiveness hereof. 

  

	6.	Representations and Warranties. By its execution of this Agreement, the Borrower hereby certifies that the execution, delivery and performance by the Borrower and each other Loan Party of this Agreement, and each
other Loan Document executed or to be executed by it in connection with this Agreement are within such Loan Party’s corporate or other organizational powers and have been duly authorized by all necessary corporate, limited liability company, or
other organizational action on the part of such Loan Party. This Agreement has been duly executed and delivered by each Loan Party and constitutes, and each other Loan Document to which any Loan Party is to be a party, when executed and delivered by
such Loan Party, will constitute, a legal, valid and binding obligation of such Loan Party, enforceable in accordance with its terms and the terms of the Credit Agreement, subject to applicable bankruptcy, insolvency, reorganization, moratorium or
other laws affecting creditors’ rights generally and subject to general principles of equity, regardless of whether considered in a proceeding in equity or at law and an implied covenant of good faith and fair dealing. 

 

	7.	 Reaffirmation of the Loan Parties. Each Loan Party hereby consents to the amendment of the Credit
Agreement effected hereby and confirms and agrees that, notwithstanding the effectiveness of this Agreement, each Loan Document to which such Loan Party is a party is, and the obligations of such Loan Party contained in the Credit Agreement, this
Agreement or in any other Loan Document to which it is a party are, and shall continue to be, in full force and effect and are hereby ratified and confirmed in all respects, in each case as amended by this Agreement. For

  
 5 

	 	
greater certainty and without limiting the foregoing, each Loan Party hereby confirms that the existing security interests granted by such Loan Party in favor of the Administrative Agent for the
benefit of, among others, the Lenders pursuant to the Loan Documents in the Collateral described therein shall continue to secure the obligations of the Loan Parties under the Credit Agreement and the other Loan Documents as and to the extent
provided in the Loan Documents. 

  

	8.	Amendment, Modification and Waiver. This Agreement may not be amended, modified or waived except as permitted by Section 10.1 of the Credit Agreement. 

 

	9.	Entire Agreement. This Agreement, the Credit Agreement and the other Loan Documents constitute the entire agreement among the parties with respect to the subject matter hereof and thereof and supersede all other
prior agreements and understandings, both written and verbal, among the parties or any of them with respect to the subject matter hereof. This Agreement shall not constitute a novation of any amount owing under the Credit Agreement and all amounts
owing in respect of principal, interest, fees and other amounts pursuant to the Credit Agreement and the other Loan Documents shall, to the extent not paid or exchanged on or prior to the Effective Date, shall continue to be owing under the Credit
Agreement or such other Loan Documents until paid in accordance therewith. 

  

	10.	GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO
CONFLICTS OF LAW PRINCIPLES THAT WOULD REQUIRE THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION. SECTIONS 10.12 AND 10.16 OF THE CREDIT AGREEMENT ARE HEREBY INCORPORATED BY REFERENCE INTO THIS AGREEMENT AND SHALL APPLY HERETO. 

 

	11.	Severability. Any term or provision of this Agreement which is invalid or unenforceable in any jurisdiction shall, as to that jurisdiction, be ineffective to the extent of such invalidity or unenforceability
without rendering invalid or unenforceable the remaining terms and provisions of this Agreement or affecting the validity or enforceability of any of the terms or provisions of this Agreement in any other jurisdiction. 

 

	12.	Counterparts. This Agreement may be executed in counterparts (including by facsimile or other electronic transmission), each of which shall be deemed to be an original, but all of which shall constitute one and
the same agreement. 

  

	13.	WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY SUIT, ACTION, PROCEEDING OR COUNTERCLAIM
(WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY) DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. 

 

	14.	Loan Document. On and after the Effective Date, this Agreement shall constitute a “Loan Document” for all purposes of the Credit Agreement and the other Loan Documents (it being understood that for the
avoidance of doubt this Agreement may be amended or waived solely by the parties hereto as set forth in Section 8 above). It is understood and agreed that this Agreement shall constitute an Extension Offer and an Extension Notice (and each
Amendment No. 7 Consenting Revolving Lender waives any prior notice period required by Section 2.24 of the Credit Agreement) with respect to the Amendment No. 7 Extended Revolving Commitments. 

  
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	15.	New Revolving Lender and New Revolving Commitments. The parties hereto agree that Fifth Third Bank shall become a Lender under the Credit Agreement by execution of this Agreement. Fifth Third Bank hereby
acknowledges and agrees that it has a Revolving Commitment in the amount set forth opposite such Lender’s name on Exhibit A hereto. 

[signature pages to follow] 

  
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 IN WITNESS WHEREOF, each of the undersigned has caused its duly authorized officer to
execute and deliver this Agreement as of the date first set forth above. 
  

			
	NATIONAL MENTOR HOLDINGS, INC., as Borrower
		
	By:	 	/s/ Denis M. Holler
	Name:	 	Denis M. Holler
	Title:	 	Chief Financial Officer
	
	NMH HOLDINGS, LLC, as Holdings
		
	By:	 	/s/ Denis M. Holler
	Name:	 	Denis M. Holler
	Title:	 	Chief Financial Officer
	
	SUBSIDIARY GUARANTORS:
	
	ADULT DAY HEALTH, INC.
	CALIFORNIA MENTOR FAMILY HOME AGENCY, LLC
	CAREMERIDIAN, LLC
	CENTER FOR COMPREHENSIVE SERVICES, INC.
	COMMUNITY REINTEGRATION SERVICES, INC.
	CORNERSTONE LIVING SKILLS, INC.
	FAMILY ADVOCACY SERVICES, LLC
	FIRST STEP INDEPENDENT LIVING PROGRAM, INC.
	HABILITATIVE SERVICES, LLC
	HORRIGAN COLE ENTERPRISES, INC.
	ILLINOIS MENTOR, INC.
	ILLINOIS MENTOR COMMUNITY SERVICES, INC.
	INSTITUTE FOR FAMILY CENTERED SERVICES, INC.
	LOYD’S LIBERTY HOMES, INC.
	MASSACHUSETTS MENTOR, LLC
	MENTOR ABI, LLC
	MENTOR MANAGEMENT, INC.
	MENTOR MARYLAND, INC.
	NATIONAL MENTOR HEALTHCARE, LLC
	NATIONAL MENTOR HOLDINGS, LLC
	NATIONAL MENTOR SERVICES HOLDINGS, LLC
	NATIONAL MENTOR SERVICES, LLC
	NATIONAL MENTOR, LLC
	NRMI, LLC
	OHIO MENTOR, INC.
	PREFERRED RESIDENTIAL LIFESTYLE-HCL, INC.
	PROGRESSIVE LIVING UNITS SYSTEMS-NEW JERSEY, INC.

 [Signature Page to Amendment No. 7 to Credit Agreement] 

 
			
	REM ARROWHEAD, INC.
	REM CENTRAL LAKES, INC.
	REM COMMUNITY OPTIONS, LLC
	REM CONNECTICUT COMMUNITY SERVICES, INC.
	REM DEVELOPMENTAL SERVICES, INC.
	REM EAST, LLC
	REM HEARTLAND, INC.
	REM HENNEPIN, INC.
	REM INDIANA COMMUNITY SERVICES, INC.
	REM INDIANA COMMUNITY SERVICES II, INC.
	REM INDIANA, INC.
	REM IOWA COMMUNITY SERVICES, INC.
	REM IOWA, INC.
	REM MINNESOTA COMMUNITY SERVICES, INC.
	REM MINNESOTA, INC.
	REM NEVADA, INC.
	REM NEW JERSEY, INC.
	REM NORTH DAKOTA, INC.
	REM NORTH STAR, INC.
	REM OCCAZIO, INC.
	REM OHIO, INC.
	REM OHIO II, INC.
	REM OHIO WAIVERED SERVICES, INC.
	REM RAMSEY, INC.
	REM RIVER BLUFFS, INC.
	REM SOUTH CENTRAL SERVICES, INC.
	REM SOUTHWEST SERVICES, INC.
	REM WEST VIRGINIA, LLC
	REM WISCONSIN, INC.
	REM WISCONSIN II, INC.
	REM WISCONSIN III, INC.
	REM WOODVALE, INC.
	RESIDENTIAL ADVANTAGES, LLC
	SOUTH CAROLINA MENTOR, INC.
	TRANSITIONAL SERVICES, LLC
	UNLIMITED QUEST, INC.
		
	By:	 	/s/ Denis M. Holler
	Name:	 	Denis M. Holler
	Title:	 	Chief Financial Officer

 
			
	BARCLAYS BANK, PLC, as Administrative Agent, Issuing Lender and Swingline Lender
		
	By:	 	/s/ Chris Walton
		 	Name: Chris Walton
		 	Title:   Director

 [Signature Page to Amendment No. 7 to Credit Agreement] 

 
			
	BARCLAYS BANK PLC, as a Lender
		
	By:	 	/s/ Chris Walton
		 	Name: Chris Walton
		 	 Title:   Director

 [Signature Page to Amendment No. 7 to Credit Agreement] 

 
			
	BANK OF AMERICA, N.A., as a Lender
		
	By:	 	/s/ David H. Strickert
		 	Name: David H. Strickert
		 	 Title:   Managing Director

 [Signature Page to Amendment No. 7 to Credit Agreement] 

 
			
	FIFTH THIRD BANK, as a Lender
		
	By:	 	/s/ Justin Smiley
		 	Name: Justin Smiley
		 	 Title:   Director

 [Signature Page to Amendment No. 7 to Credit Agreement] 

 EXHIBIT A 

Revolving Commitments 
  

					
	 Lender
	  	Initial Revolving
Commitment	 
	 Goldman Sachs Bank USA
	  	$	25,000,000	 
	 Jefferies Finance LLC
	  	$	22,500,000	 
	 UBS AG, Stamford Branch
	  	$	22,500,000	 
		  	  
	  
	 
	 Total
	  	$	70,000,000	 
		  	  
	  
	 
		
	 Lender
	  	Amendment No. 7
Extended Revolving
Commitment	 
	 Barclays Bank PLC
	  	$	30,000,000	 
	 Bank of America, N.A.
	  	$	30,000,000	 
	 Fifth Third Bank
	  	$	30,000,000	 
		  	  
	  
	 
	 Total
	  	$	90,000,000EXHIBIT 4.57

LONG TERM INCENTIVE PLAN

 

	
1.

	
PURPOSE OF THE PLAN

	
1.1

	
The purpose of the long-term incentive plan (the "Plan") for Directors, executive officers, employees and other persons or companies providing ongoing management or consulting services (the "Consultants") to EXFO Inc. (the "Corporation") or to any of the Subsidiaries of the Corporation is to secure for the Corporation and its shareholders the benefit of an incentive to partake in share ownership by Directors, executive officers and employees of the Corporation and its Subsidiaries, as the case may be, and by certain Consultants who provide services on a continuous basis. For the purposes of the Plan, "Subsidiaries" shall mean (i) any legal entity of which the Corporation is the holder or the beneficiary, at the time of the granting of the Option or RSUs, directly or indirectly, otherwise than by way of security only, of securities to which are attached over 50% of the votes enabling it to elect the majority of the Directors of such entity as well as any subsidiary of such legal entity and (ii) any legal entity in which the Corporation or a subsidiary of the Corporation holds at least 50% of the voting rights or in which it has a majority interest and of which the Corporation or a subsidiary of the Corporation manages the operations.

	
2.

	
DEFINITIONS

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

"Award" means the RSUs granted to an Eligible Participant under the Plan on an Award Date, evidenced by an Award Agreement and subject to the terms and conditions of the Plan and the Award Agreement;

"Award Agreement" means an agreement, substantially in the form of the agreement set out in Schedule 2 to this Plan, entered into by an Eligible Participant and the Corporation pursuant to which an Award is granted to the Eligible Participant in accordance with the Plan, and containing such additional terms and conditions not inconsistent with the Plan as the Board shall deem desirable;

"Award Date" means the date on which an Award is granted, which date may be on or, if determined by the Board at the time of grant, after the date that the Board resolves to grant the Award;

"Blackout Period" means any period during which a policy of the Corporation prevents an Optionee from exercising an Option;

"Board" means the board of Directors of the Corporation;

"Change of Control" shall have the meaning as set forth in Section 7;

"Committee" means the Human Resources Committee composed solely of non-employee members or any other committee composed solely of non-employee members constituted from time to time at the Board's discretion to administrate the Plan;

"Continuing Directors" shall have the meaning as set forth in Section 7.2;

"Consultants" means persons or companies providing ongoing management or consulting services to the Corporation;

"Corporation" means EXFO Inc.;

"Director" means any person elected to the Board at any annual meeting of shareholders;

"DSU" means Deferred Share Units that may be granted from time to time to non-employee Directors of the Corporation pursuant to the provisions of a Deferred Share Unit Plan for the Directors;

 

 

1

 

 

"Early Expiry Date" shall have the meaning as set forth in Section 5.3.2;

"Early Vesting Date" shall have the meaning as set forth in Section 6.4;

"Eligible Participant" means any officer, employee, non-employee Director of the Corporation or Consultants designated by the Board as eligible to participate in the Plan;

"Grant Date" means the date on which an Option is granted, which date may be on or, if determined by the Board at the time of grant, after the date that the Board resolves to grant the Option;

"Option" means an option to subscribe Shares granted to an Eligible Participant pursuant to the terms of the Plan;

"Optionee" means the Directors, officers or employees of the Corporation or any of its Subsidiaries, as the case may be, or the Consultants to whom Options are granted;

"Option Period" shall have the meaning as set forth in Section 5.3.1;

"Permanent Disability" means an injury which impairs the physical and/or mental ability of an Eligible Participant to perform his/her normal work for the Corporation supposedly for the remainder of his/her life;

"Plan" means the Long-Term Incentive Plan of the Corporation, as amended;

"Restricted Share Unit" or "RSU" means the right of an Eligible Participant to whom a grant of such unit is made to receive a Share on the Vesting Date (or Early Vesting Date, as the case may be) upon the attainment of specified performance objectives, if any, as determined by the Board in accordance with section 6, unless such unit expires prior to its Vesting Date.;

"RSU Holder" shall have the meaning as set forth in Section 6.2;

"RSU Shares" means the Shares that an RSU Holder may receive pursuant to a particular Award Agreement;

"Shares" means the subordinate voting shares of the Corporation;

"Subscription Form" shall have the meaning as set forth in Section 5.4;

"Subscription Price" shall have the meaning as set forth in Section 5.2;

"Subsidiaries" shall have the meaning as set forth in Section 1;

"Vesting Date" shall have the meaning as set forth in Section 6.3.

	
3.

	
ADMINISTRATION

The Plan shall be administered by the Corporation's Board of non-employee Directors (the "Board") or at the Board's decision by the Human Resources Committee composed solely of non-employee members or any other committee composed solely of non-employee members constituted from time to time (the "Committee"). The Board or the Committee shall have full and complete latitude to interpret the Plan and to establish the rules and regulations applying to it and to make all other determinations it deems necessary or useful for the administration of the Plan, including without limiting the scope of the foregoing and subject to subsection 5.3.3, to change an Early Expiry Date (as defined hereinafter) provided that such interpretations, rules, regulations and determinations shall be consistent with the relevant policy statements of the competent securities authorities and the rules of the stock exchanges on which the securities of the Corporation are listed.

 

 

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4.

	
SHARES SUBJECT TO THE PLAN

The shares subject to the Plan are the subordinate voting shares (the "Shares") of the Corporation. The total number of Shares that may be issued under the Plan and under the Deferred Share Unit Plan for the Directors shall not exceed 11,792,893 Shares of the Corporation, subject to the adjustment under Section 8, and no Eligible Participant shall hold in total Options, RSUs and DSUs representing more than 5% of the number of Shares issued and outstanding from time to time. All of the Shares covered by Options or RSUs that will have expired or have been cancelled shall become reserved Shares for the purposes of Options or RSUs that may be subsequently granted under the terms of the Plan.

For greater clarity, the issuance of Shares under the Plan shall be subject to the following:

	
(a)

	
the number of Shares reserved for issuance pursuant to Options, RSUs and DSUs granted to insiders of the Corporation shall not exceed 10% of the total issued and outstanding Shares;

	
(b)

	
the number of Shares issued to insiders, within a one-year period, pursuant to the exercise, settlement or redemption of Options, RSUs and DSUs shall not exceed 10% of the total issued and outstanding Shares; and

	
(c)

	
the number of Shares issued to any one insider and such insider's associates, within a one-year period, pursuant to the exercise, settlement or redemption Options, RSUs and DSUs shall not exceed 5% of the total issued and outstanding Shares.

	
5.

	
OPTIONS

	
5.1

	
Grant of Options

The Board or the Committee shall from time to time designate the Directors, officers or employees of the Corporation or any of its Subsidiaries, as the case may be, or the Consultants to whom Options shall be granted (an "Optionee") and the number of Shares covered by each of such Option. Any Optionee may hold more than one Option. The granting of each Option shall be evidenced by a letter from the Corporation addressed to the Optionee setting forth the number of Shares covered by such option, the Subscription Price, the terms and conditions of exercise of the Option and the Option Period.

	
5.2

	
Subscription Price

The Subscription Price of the Shares subject to an Option shall be established by the Board of Directors or its designated Committee at the time of the grant, but such price shall not be less than the market price of the Shares at the date of the granting of the Option (the "Grant Date"), calculated as the greater of the closing prices of the Shares on the Toronto Stock Exchange and the NASDAQ Global Select Market on the last trading day preceding the Grant Date or, if the Shares did not trade on such last trading day, the greater of the average, rounded off to the nearest cent, of the bid and ask prices for the Shares on the Toronto Stock Exchange and the NASDAQ Global Select Market at the close of trading on such last trading day preceding the Grant Date (the "Subscription Price").

The closing price of the Shares or, as the case may be, the average of the bid and ask prices of the Shares at the close of trading on the NASDAQ Global Select Market shall be converted into Canadian dollars at the noon buying rate of Federal Reserve Bank of New York on the Grant Date when such conversion is required.

	
5.3

	
Option Period

	
5.3.1

	
Subject to the provisions of subsections 5.3.2 and 5.3.3, each Option shall be exercisable during a period established by the Board or the Committee (the "Option Period"); such period shall commence no earlier than the Grant Date and shall terminate no later than ten years after such date.

 

 

3

 

	
5.3.2

	
Notwithstanding the provisions of subsection 5.3.1, an Option shall not be exercisable by an Optionee from and after each and every one of the following dates (an "Early Expiry Date"), unless the Board or the Committee decides otherwise:

	
(a)

	
in the case where the Optionee is an officer or an employee, the date on which the Optionee resigns and voluntary leaves his employment with the Corporation or one of its Subsidiaries, as the case may be, or the date on which the employment of the Optionee with the Corporation or one of its Subsidiaries is terminated for a good and sufficient cause, as the case may be;

	
(b)

	
in the case where the Optionee is a Director of the Corporation or one of its Subsidiaries, as the case may be, but is not employed by either the Corporation or one of its subsidiaries, 30 days following the date on which such Optionee ceases to be a member of the Board of Directors for any reason other than death or Permanent Disability;

	
(c)

	
(i) in the case where the Optionee is an officer or employee, 6 months following the date on which the Optionee's employment with the Corporation or any of its Subsidiaries, as the case may be, is terminated by reason of death or Permanent Disability or (ii) in the case where the Optionee is a Director of the Corporation or any of its Subsidiaries, as the case may be, but is not employed by either the Corporation or any of its Subsidiaries, 6 months following the date on which such Optionee ceases to be a member of the Board of Directors by reason of death or Permanent Disability. Notwithstanding the foregoing, in case of death or Permanent Disability of the Optionee, the Option Period established by the Board or the Committee shall commence no later than the date of termination by reason of death or Permanent Disability of the Optionee and all Options held by such Optionee shall become exercisable upon such date;

	
(d)

	
in the case where the Optionee is an officer or employee, 30 days following the date on which the Optionee's employment with the Corporation or any of its Subsidiaries, as the case may be, is terminated for any cause or reason other than those mentioned in paragraphs 5.3.2(a) and 5.3.2(c), including, without limiting the scope of the foregoing, disability, illness, retirement or early retirement. Notwithstanding the foregoing, in case of retirement or early retirement of an officer or employee, the Board or the Committee may at its own discretion but subject to Section 3, extend the Early Expiry Date mentioned in this paragraph 5.3.2(d);

	
(e)

	
in the case where the Optionee is a Consultant, 30 days following the date on which his contract as a Consultant is terminated or, as the case may be, 30 days following the receipt by the Consultant of a notice from the Corporation indicating that the Options must be exercised within 30 days from the date of receipt of the notice.

	
5.3.3

	
The rules set forth in paragraph 5.3.2 shall not be interpreted in such a manner as to extend the Option Period beyond 10 years.

	
5.3.4

	
The Option Period shall automatically be extended if the date on which it is scheduled to terminate shall fall during a Blackout Period or within 10 business days after the last day of a Blackout Period. In such cases, the Option Period shall terminate 10 business days after the last day of a Blackout Period.

	
5.3.5

	
All rights conferred by an Option not exercised at the termination of the Option Period or from and after any Early Expiry Date shall be forfeited.

	
5.4

	
Exercise of Options

	
(a)

	
Subject to the provisions of section 5.3, an Option may be exercised in whole, at any time, or in part, from time to time, during the Option Period, but in all cases in accordance with the exercise frequency established by the Board or the Committee and applicable at the time of the grant.

 

 

4

 

	
(b)

	
An Option may be exercised by forwarding a duly executed Subscription Form as attached hereto as Schedule 1 (the "Subscription Form") to the Secretary of the Corporation. Such Subscription Form shall set forth the number of Shares so subscribed and the address to which the share certificate is to be delivered. The Subscription Form shall also be accompanied by a certified cheque made payable to the Corporation in the amount of the Subscription Price. The Corporation shall cause a certificate for the number of Shares specified in the Subscription Form to be issued in the name of the Optionee and delivered to the address specified in the Subscription Form no later than 10 business days following the receipt of such Subscription Form and cheque.

	
5.5

	
No Assignment

No Option or interest therein shall be assignable for purpose of transfer of guarantee or otherwise by the Optionee other than by will or the operation of applicable legal dispositions regarding succession.

	
5.6

	
Not a Shareholder

An Optionee shall have no rights as a shareholder of the Corporation with respect to any Shares covered by his/her Option until he/she shall have become the holder of record of such Shares.

	
6.

	
GRANT OF RSU AWARDS

	
6.1

	
Grant of Awards

The Board shall from time to time designate the Eligible Participants to whom a grant of RSUs shall be made and shall determine the number of RSUs granted under the Award. The Board shall further have discretion to establish at the time of grant, within the restrictions set forth in the Plan, the Award Date, the Vesting Date, the performance objectives which must be attained for the Award to vest, if any, and other particulars applicable to an Award granted hereunder.

	
6.2

	
Award Agreement

Upon the grant of an Award, the Corporation will deliver to the Eligible Participant selected to receive same an Award Agreement dated as of the Award Date, containing the terms of the Award and executed by the Corporation, and upon delivery to the Corporation of the Award Agreement executed by the Eligible Participant in question, the Eligible Participant in question will be an RSU Holder under the Plan and, subject to vesting, have the right to receive the RSU Shares on the terms set out in the Award Agreement and in the Plan.

	
6.3

	
Vesting Date

The Vesting Date of an Award will be determined by the Board at the time of grant, subject however to a minimum term of three years and a maximum term of ten years from the Award Date and will be subject to the provisions of section 6.4 relating to early vesting or expiry.

	
6.4

	
Early Vesting

	
(a)

	
Unless otherwise determined by the Board at or after the time of grant, and subject to the minimum and maximum term referred to at section 6.3 hereof, except for events described in section 6.4(b) and (c) where minimum term is not applicable:

	
(i)

	
Where vesting of an Award is subject to the attainment of performance objectives, such Award, or part thereof, shall expire on the Vesting Date if such performance objectives have not been attained or shall be postpone at a further Vesting Date as determined by the Board from time to time, the whole in accordance with the terms and conditions of the applicable Award Agreement.

 

 

5

 

	
(ii)

	
Any Award, whether or not subject to the attainment of performance objectives, shall expire immediately upon the RSU Holder thereof ceasing to be an Eligible Participant as a result of being dismissed from his office or employment for cause.

	
(iii)

	
Any Award, whether or not subject to the attainment of performance objectives, shall vest before its Vesting Date or expire, as the case may be, in the following events and manner:

	
(1)

	
if an RSU Holder resigns and voluntary leaves his office or employment, the Award held by such RSU Holder shall expire immediately on the date he resigns and leaves his office or employment;

	
(2)

	
if an RSU Holder is dismissed without cause, the Award held by such RSU Holder shall vest immediately on the date of dismissal in accordance with section 6.4(b);

	
(3)

	
if an RSU Holder dies or his employment with the Corporation is terminated due to Permanent Disability, the Award held by such RSU Holder shall vest immediately on the date of the death of the RSU Holder or on the date of termination, as the case may be and notwithstanding anything to the contrary herein provided, the RSU Holder (or, if deceased, his legal representative) of such early vesting Award shall be entitled to receive, on the date of the death of the RSU Holder or the date of termination due to Permanent Disability (each for the purpose of this section 6.4(a)(iii)(3) an "Early Vesting Date"), all of the Shares of the Award Agreement on the terms set out in the Award Agreement and in accordance with the vesting as set forth in section 6.7 below; and

	
(4)

	
if an RSU Holder attains the retirement conditions established by the Corporation from time to time, the Award held by such RSU Holder shall vest immediately on the date of retirement in accordance with section 6.4(c).

	
(b)

	
In the case of the occurrence of an event contemplated in section 6.4(a)(iii)(2), and notwithstanding anything to the contrary herein provided, the RSU Holder of such early vesting Award shall be entitled to receive, on the date of dismissal without cause or the date of the Change of Control, as the case may be (each for the purpose of this section 6.4(b) an "Early Vesting Date"), the number of Shares equal to:

	
The number of RSU Shares

underlying the Award

	
X

	 	
Number of days elapsed between the Award Date and the Early Vesting Date

	 
	
Number of days in the Vesting Period of such Award

unless otherwise determined by the Board at or after the time of the grant. Notwithstanding the foregoing, in case of a RSU Holder employment with the Corporation is terminated following a Change of Control, the Board or the Committee may at its own discretion increase the number of Shares a RSU Holder is entitled to pursuant to this paragraph 6.4(b).

	
(c)

	
In the case of the occurrence of an event contemplated in sections 6.4(a)(iii)(4), and notwithstanding anything to the contrary herein provided, the RSU Holder shall be entitled to the regular vesting as established by the Award Agreement upon the following conditions: (i) attainment of the retirement conditions established by the Corporation and (ii) continued compliance with the confidentiality, non-solicitation and non-competition obligations of the RSU Holder, on the terms set out in the Award Agreement and in accordance with the vesting as set forth in section 6.7 below.

 

 

6

 

	
6.5

	
Non-Assignable

An Award will not be assignable. Notwithstanding the foregoing, in the case where an RSU Holder dies and the vesting of his Award is accelerated in the manner set forth in section 6.4(a)(iii)(3), his legal representative shall have the rights of such RSU Holder under the Plan and the Award Agreement.

	
6.6

	
No Implied Rights

An RSU Holder will only have rights as a shareholder of the Corporation with respect to those of the RSUs Shares, if any, that the RSU Holder has received upon the vesting of an Award in accordance with its terms.

Nothing in this Plan or in any Award Agreement will confer or be construed as conferring on an RSU Holder any right to remain as an officer, key employee or non-employee Director of the Corporation, or an Eligible Participant the right to be granted Options or Awards hereunder.

	
6.7

	
Vesting of the Award

Unless an Award has expired in accordance with sections 6.4(a)(i),(ii), and (iii)(1), the Corporation shall not later than five (5) business days after the Vesting Date (or after the Early Vesting Date, as the case may be):

	
(a)

	
issue from treasury the number of RSU Shares represented by such vested Award (or the number of Shares determined in accordance with section 6.4(b), as the case may be) and direct its transfer agent to issue a certificate in the name of the RSU Holder of such vested Award (or, if deceased, his legal representative) which will be issued as fully paid and non-assessable Shares.

	
7.

	
CHANGE OF CONTROL

	
7.1

	
For the purposes of this section 7, "Change of Control" shall mean:

	
7.1.1

	
the acquisition by any person or entity, or any persons or entities acting jointly or in concert, whether directly or indirectly, of voting securities of the Corporation which together with all other voting securities of the Corporation held by such persons or entities, constitute, in the aggregate, either (a) fifty percent (50%) or more of the votes attached to all outstanding voting securities of the Corporation, or (b) forty percent (40%) or more of the votes attached to all outstanding voting securities of the Corporation and is followed within twenty-four (24) months by changes of the members of the Board resulting in a change of the majority of the Board;

	
7.1.2

	
an amalgamation, arrangement or other form of business combination of the Corporation with another entity which results in the holders of voting securities of that other entity holding, in the aggregate, either (a) fifty percent (50%) or more of the votes attached to all outstanding voting securities of the entity resulting from the business combination, or (b) forty percent (40%) or more of the votes attached to all outstanding voting securities of the entity resulting from the business combination and is followed within twenty-four (24) months by changes of the members of the Board resulting in a change of the majority of the Board;

	
7.1.3

	
any event or series of events (which event or series of events may include, without limitation, a proxy fight or proxy solicitation with respect to the election of Directors of the Corporation made in opposition to the nominees recommended by the Continuing Directors during any period of twenty-four (24) consecutive months) as a result of which a majority of the members of the Board consists of individuals other than Continuing Directors; or

	
7.1.4

	
the sale, lease or exchange of all or substantially all of the property of the Corporation to another person or entity, other than in the ordinary course of business of the Corporation or any of its Subsidiaries.

 

 

7

 

	
7.2

	
For the purposes of this section 7.2, "Continuing Directors" shall mean with respect to any period of twenty-four (24) consecutive months, (a) any members of the Board on the first (1st) day of such period, (b) any members of the Board elected after the first (1st) day of such period at any annual meeting of shareholders who were nominated by the Board or a committee thereof, if a majority of the members of the Board or such committee were Continuing Directors at the time of such nomination, and (c) any members of the Board elected to succeed Continuing Directors by the Board or a committee thereof, if a majority of the members of the Board or such committee were Continuing Directors at the time of such election.

	
7.3

	
Notwithstanding any provisions to the contrary contained in this Plan, the Board or the Committee shall have the power to accelerate the time at which an Option or RSU may first be exercised or the time during which an Option or RSU or any part thereof will become exercisable including, without limitation, prior to or in connection with a Change of Control.

	
8.

	
EFFECTS OF ALTERATION OF SHARE CAPITAL

In the event of any change in the number of outstanding Shares of the Corporation by reason of any stock dividend, stock split, recapitalization, merger, consolidation, combination or exchange of Shares or other similar change, subject to the prior approval of the competent regulatory authorities, an equitable adjustment shall be made by the Board or the Committee in the maximum number or kind of Shares issuable under the Plan or subject to outstanding RSUs or Options and in the Subscription Price of such Shares for purposes of the Options. Such adjustment will be definitive and mandatory for the purposes of the Plan.

	
9.

	
AMENDMENT AND TERMINATION

	
9.1

	
The Board bears full responsibility with regard to the Plan, which includes, but is not limited to, the power and authority to amend, suspend or terminate the Plan, in whole or in part, or amend the terms and conditions of outstanding Options or RSUs, provided that such amendment, suspension or termination shall:

	
9.1.1

	
be subject to obtaining approval of the shareholders of the Corporation, unless not required pursuant to section 9.2 or applicable securities law or stock exchange requirements;

	
9.1.2

	
be subject to obtaining any required approval of any securities regulatory authority or stock exchange; and

	
9.1.3

	
not adversely alter or impair any Option or RSU previously granted (provided that the Board may at its discretion accelerate the vesting of any Option or RSU regardless of any adverse or potentially adverse tax consequences resulting from such acceleration).

	
9.2

	
Subject to section 9.3, shareholder approval is not required with respect to the following actions, provided that they are made in accordance with applicable securities law and stock exchange requirements:

	
9.2.1

	
amendments of a general housekeeping or clerical nature that, among others, clarify, correct or rectify any ambiguity, defective provision, error or omission in the Plan;

	
9.2.2

	
amendments necessary to comply with applicable laws or the requirements of any securities regulatory authority or stock exchange;

	
9.2.3

	
changing the eligibility for, and limitations on, participation in the Plan;

	
9.2.4

	
modifying the terms and conditions, including restrictions, not inconsistent with the terms of the Plan, of any Option or RSU, which terms and conditions may differ among individual Option or RSU grants and Optionees and RSU Holders;

 

 

8

 

	
9.2.5

	
modifying the periods referred to in section 5.3 of the Plan during which vested Options may be exercised, provided that the Option Period is not extended beyond 10 years after the date of the granting of the Option;

	
9.2.6

	
amendments with respect to the vesting period or with respect to circumstances that would accelerate the vesting of Options or RSUs;

	
9.2.7

	
any amendment resulting from or due to the alteration of share capital as more fully set out in section 8 hereof;

	
9.2.8

	
amendments to the provisions relating to the administration of the Plan; and

	
9.2.9

	
suspending or terminating the Plan.

	
9.3

	
Notwithstanding section 9.2, shareholder approval is required for:

	
9.3.1

	
a reduction in the Subscription Price of Options held by an insider;

	
9.3.2

	
an extension of the Option Period of Options held by an insider;

	
9.3.3

	
any amendment to remove or to exceed the limit in sections 4(a) or 4(b);

	
9.3.4

	
an increase to the maximum number of Shares issuable under the Plan; and

	
9.3.5

	
any amendment to the provisions of this Section 9.

	
9.4

	
With regard to shareholder approval as required pursuant to sections 9.3.1, 9.3.2 and 9.3.3, the votes attached to Shares held directly or indirectly by insiders benefiting directly or indirectly from the amendment must be excluded.

	
9.5

	
With regard to shareholder approval as required pursuant to section 9.3.5, where the amendment will disproportionately benefit one or more insiders over other Optionees or RSU Holders, the votes attached to Shares held directly or indirectly by those insiders receiving the disproportionate benefit must be excluded.

	
10.

	
FINAL PROVISIONS

	
10.1

	
The Corporation's obligation to issue Options granted or Shares under the terms of the Plan is subject to all of the applicable laws, regulations or rules of any governmental regulatory agency or other competent authority in respect of the issuance or distribution of securities and to the rules of any stock exchange on which the Shares of the Corporation are listed. Each Optionee shall agree to comply with such laws, regulations and rules and to provide to the Corporation any information or undertaking required to comply with such laws, regulations and rules.

	
10.2

	
The participation in the Plan of a Director, an executive officer or an employee of the Corporation or any of its Subsidiaries, as well as any Consultant, shall be entirely optional and shall not be interpreted as conferring upon a Director, an executive officer or an employee of the Corporation or any of its Subsidiaries, as well as any Consultant, any right or privilege whatsoever, except for the rights and privileges set out expressly in the Plan. Neither the Plan nor any act that is done under the terms of the Plan shall be interpreted as restricting the right of the Corporation or any of its Subsidiaries to terminate the employment of an executive officer or employee at any time, as well as any contractual relationship with any Consultant. Any notice of dismissal given to an executive officer or employee, as well as to any Consultant, at the time his/her employment is terminated, or any payment in the place and stead of such notice, or any combination of the two, shall not have the effect of extending the duration of the employment or the contractual relationship for purposes of the Plan.

 

 

9

 

	
10.3

	
No Director, executive officer or employee of the Corporation or any of its Subsidiaries, as well as any Consultant, shall acquire the automatic right to be granted one or more Options or RSUs under the terms of the Plan by reason of any previous grant of Options or RSUs under the terms of the Plan.

	
10.4

	
The Plan does not provide for any guarantee in respect of any loss or profit that may result from fluctuations in the price of the Shares.

	
10.5

	
The Corporation and its Subsidiaries shall assume no responsibility as regards the tax consequences that participation in the Plan will have for a Director, an executive officer or an employee of the Corporation or any of its Subsidiaries, as well as any Consultant, and such persons are urged to consult their own tax advisors in such regard.

	
(a)

	
A plan participant may be required to pay to the Corporation or any subsidiary and the Corporation or any Subsidiary shall have the right and is hereby authorized to withhold from any Shares or other property deliverable under any Option or RSU or from any compensation or other amounts owing to a plan participant the amount (in cash or Shares) of any required tax withholding and payroll taxes in respect of an Option, its exercise, or any payment or transfer under an Option or in respect of a RSU and to take such other action as may be necessary in the opinion of the Corporation to satisfy all obligations for the payment of such taxes.

	
(b)

	
Without limiting the generality of clause (a) above a Plan participant may satisfy, in whole or in part, the foregoing withholding liability (but no more than the minimum required withholding liability) by delivery of Shares owned by the Plan participant with a fair market value equal to such withholding liability (provided that such Shares are not subject to any pledge or other security interest and have either been held by the Plan participant for 6 months, previously acquired by the Plan participant on the open market or meet such other requirements as the Committee may determine necessary in order to avoid an accounting earnings charge), or by having the Corporation withhold from the number of Shares otherwise issuable pursuant to the exercise or settlement of the Option or RSU award a number of Shares with a fair market value equal to such withholding liability.

	
10.6

	
The Plan and any Option or RSU granted under the terms of the Plan shall be governed and interpreted according to the laws of the province of Quebec and the laws of Canada applicable thereto.

	
10.7

	
The Plan is dated as of May 25, 2000 and amended as of January 9, 2004, January 12, 2005, as of January 6, 2016 and as of January 10, 2018.

10

 

 

SCHEDULE 1

EXFO INC.

STOCK OPTION PLAN

SUBSCRIPTION FORM

____________________________

(Date)

EXFO Inc.

400 Avenue Godin

Quebec, Quebec

G1M 2K2

Attention of the Secretary

 

 

I, the undersigned, _____________________________________, hereby subscribe for _____________ out of the Subordinate Voting Shares of EXFO Inc. (the "Corporation") to which I am entitled to subscribe pursuant to an option granted on ___________________________ in accordance with the terms and conditions mentioned in paragraph 5.3.5(b)of the Corporation's Long Term Incentive Plan. I enclose herewith my certified cheque (or money order) made payable to the order of EXFO Inc., in the amount of $_____________________ in payment of the said subscription.

 

  

 

 

(x)_________________________________________________

(signature)

 

 

  

___________________________________________________

(number) (street)

 

 

___________________________________________________

(city)                                   (province)                        (postal code)

 

 

 

(_____)_____________________________________________

(telephone)

 

 

11

 

SCHEDULE 2

EXFO INC.

LONG TERM INCENTIVE PLAN

FORM OF AWARD AGREEMENT

This Award Agreement is entered into between EXFO Inc. (the "Corporation") and the Restrictive Share Units (RSU) Holder named below pursuant to the Long-Term Incentive Plan of the Corporation (the "Plan"), a copy of which is available on demand, and confirms that:

	1.	
on______________________(the "Award Date");

	2.	
________________________(the "RSU Holder");

	3. 	was granted ____________________ 	non-assignable Restricted Shares Units (RSU) (the "Award");

	4.	
vesting of the Award shall:

☐  not be subject to the attainment of performance objectives; or

☐  be subject to the attainment of the following performance objectives:

 ___________________________________________________

 __________________________________________________:

 

	5.	
the Award shall vest at 5:00 P.M., Eastern Time on the following date(s):

	
·

	
__________________ or, if such date falls into any black out period or any other restrictive period during which the RSU Holder is not entitled to trade EXFO's Subordinate Voting Shares, the RSUs shall: a) vest on the fifth trading day the RSU Holder is entitled to trade after such black out period or restrictive period or b) if the RSU Holder decides,  prior to such vesting date, to pay his/her income tax without using any of the Shares' proceeds, then and only then, the vesting date shall remain [date];

	6.	
The Corporation will issue from treasury, its Subordinate Voting Shares, the number of RSU represented by such vested Award mentioned above.

	7.	
All on the terms and subject to the conditions set out in the Plan.  By signing this agreement, the RSU Holder acknowledges that he or she has read and understands the Plan, and agrees to be bound thereby.

	8.	
This Agreement and all related documents have been drawn up in the English language at the specific request of the parties hereto.  La présente entente, ainsi que tout autre document y afférent, ont été rédigés en langue anglaise à la demande expresse des parties.

 

 

12

 

 

 

In order to accept this Award, we invite you to sign in duplicate this Award Agreement and return one copy as soon as possible to the attention of Legal Department, 400 Godin Avenue, Quebec City, Quebec, G1M 2K2.

 

IN WITNESS WHEREOF the Corporation and the RSU Holder have executed this Award Agreement, in duplicate, as of __________________________

 

	
 RSU Holder

 

 

	 	 EXFO Inc. 
	 	 	 	 
	
Name of RSU Holder

	 	 	 
	
 

 

 

	 	
By:

	 
	
Signature of RSU Holder

	 	 	
[Name], [Title]

13

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