Document:

Exhibit 10.1

 

CAI INTERNATIONAL, INC.

2007 EQUITY INCENTIVE PLAN

(As Amended Effective June 5, 2015)

 

SECTION 1.  PURPOSE

 

The purpose of the CAI International, Inc. 2007 Equity Incentive Plan is to attract, retain and motivate employees, officers, directors, consultants, agents, advisors and independent contractors of the Company and its Related Companies by providing them the opportunity to acquire a proprietary interest in the Company and to align their interests and efforts to the long-term interests of the Company's stockholders.

 

SECTION 2.  DEFINITIONS

 

Certain capitalized terms used in the Plan have the meanings set forth in Appendix A.

 

SECTION 3.  ADMINISTRATION

 

3.1              Administration of the Plan

 

The Plan shall be administered by the Board or the Compensation Committee, which shall be composed of two or more directors, each of whom shall qualify as a "non-employee director" within the meaning of Rule 16b-3(b)(3) promulgated under the Exchange Act, or any successor definition adopted by the Securities and Exchange Commission, an "outside director" within the meaning of Section 162(m), and an "independent director" as defined under the New York Stock Exchange listing standards.

 

3.2               Delegation

 

Notwithstanding the foregoing, the Board may delegate responsibility for administering the Plan, including with respect to designated classes of Eligible Persons, to different committees consisting of one or more members of the Board, subject to such limitations as the Board deems appropriate, except with respect to Awards to Participants who are subject to Section 16 of the Exchange Act or Awards to officers who are or may become Covered Employees.  Members of any committee shall serve for such term as the Board may determine, subject to removal by the Board at any time.  To the extent consistent with applicable law, the Board or the Compensation Committee may authorize one or more officers of the Company to grant Awards to designated classes of Eligible Persons, within limits specifically prescribed by the Board or the Compensation Committee; provided, however, that no such officer shall have or obtain authority to grant Awards to himself or herself or to any person subject to Section 16 of the Exchange Act.  All references in the Plan to the "Committee" shall be, as applicable, to the Board, the Compensation Committee or any other committee or any officer to whom the Board or the Compensation Committee has delegated authority to administer the Plan.

 

3.3               Administration and Interpretation by Committee

 

(a)                Except for the terms and conditions explicitly set forth in the Plan and to the extent permitted by applicable law, the Committee shall have full power and exclusive authority, subject to such orders or resolutions not inconsistent with the provisions of the Plan as may from time to time be adopted by the Board or a Committee composed of members of the Board, to (i) select the Eligible Persons to whom Awards may from time to time be granted under the Plan; (ii) determine the type or types of Award to be granted to each Participant under the Plan; (iii) determine the number of shares of Common Stock to be covered by each Award granted under the Plan; (iv) determine the terms and conditions of any Award granted under the Plan; (v) approve the forms of notice or agreement for use under the Plan; (vi) determine whether, to what extent and under what circumstances Awards may be settled in cash, shares of Common Stock or other property or canceled or suspended; (vii) interpret and administer the Plan and any instrument evidencing an Award, notice or agreement executed or entered into under the Plan; (viii) establish such rules and regulations as it shall deem appropriate for the proper administration of the Plan; (ix) delegate ministerial duties to such of the Company's employees as it so determines; and (x) make any other determination and take any other action that the Committee deems necessary or desirable for administration of the Plan.

(b)                In no event, however, shall the Board or the Committee have the right, without stockholder approval, to (i) cancel or amend outstanding Options or SARs for the purpose of repricing, replacing or regranting such Options or SARs with Options or SARs that have a purchase or grant price that is less than the purchase or grant price for the original Options or SARs except in connection with adjustments provided in Section 15, or (ii) issue an Option or amend an outstanding Option to provide for the grant or issuance of a new Option on exercise of the original Option.

 

(c)                The effect on the vesting of an Award of a Company-approved leave of absence or a Participant's reduction in hours of employment or service working less than full-time shall be determined by the Company's chief executive officer, human resources officer or other person performing that function or, with respect to directors or executive officers subject to the reporting requirements of Section 16(a) of the Exchange Act, by the Compensation Committee, whose determination shall be final.

 

(d)                Decisions of the Committee shall be final, conclusive and binding on all persons, including the Company, any Participant, any stockholder and any Eligible Person.  A majority of the members of the Committee may determine its actions.

 

SECTION 4.  SHARES SUBJECT TO THE PLAN

 

4.1               Authorized Number of Shares

 

Subject to adjustment from time to time as provided in Section 15.1, the aggregate maximum number of shares of Common Stock available for issuance under the Plan shall be 1,921,980 shares.

 

Shares issued under the Plan shall be drawn from authorized and unissued shares or shares now held or subsequently acquired by the Company as treasury shares.

 

4.2               Share Usage

 

(a)                Shares of Common Stock covered by an Award shall not be counted as used unless and until they are actually issued and delivered to a Participant.  If any Award lapses, expires, terminates or is canceled prior to the issuance of shares thereunder or if shares of Common Stock are issued under the Plan to a Participant and thereafter are forfeited to or otherwise reacquired by the Company, the shares subject to such Awards and the forfeited or reacquired shares shall again be available for issuance under the Plan.  Any shares of Common Stock (i) tendered by a Participant or retained by the Company as full or partial payment to the Company for the purchase price of an Award or to satisfy tax withholding obligations in connection with an Award, or (ii) covered by an Award that is settled in cash, or in a manner such that some or all of the shares of Common Stock covered by the Award are not issued, shall be available for Awards under the Plan.  The number of shares of Common Stock available for issuance under the Plan shall not be reduced to reflect any dividends or dividend equivalents that are reinvested into additional shares of Common Stock or credited as additional shares of Common Stock subject or paid with respect to an Award.

 

(b)                The Committee shall also, without limitation, have the authority to grant Awards as an alternative to or as the form of payment for grants or rights earned or due under other compensation plans or arrangements of the Company.

 

(c)                Notwithstanding anything in the Plan to the contrary, the Committee may grant Substitute Awards under the Plan.  Substitute Awards shall not reduce the number of shares authorized for issuance under the Plan.  In the event that an Acquired Entity has shares available for awards or grants under one or more preexisting plans not adopted in contemplation of such acquisition or combination, then, to the extent determined by the Committee, the shares available for grant pursuant to the terms of such preexisting plan (as adjusted, to the extent appropriate, using the exchange ratio or other adjustment or valuation ratio or formula used in such acquisition or combination to determine the consideration payable to holders of common stock of the entities that are parties to such acquisition or combination) may be used for Awards under the Plan and shall not reduce the number of shares of Common Stock authorized for issuance under the Plan; provided, however, that Awards using such available shares shall not be made after the date awards or grants could have been made under the terms of such preexisting plans, absent the acquisition or combination, and shall only be made to individuals who were employees of the Acquired Entity prior to such acquisition or combination.  In the event that a written agreement between the Company and an Acquired Entity pursuant to which a merger or consolidation is completed is approved by the Board and that agreement sets forth the terms and conditions of the substitution for or assumption of outstanding awards of the Acquired Entity, those terms and conditions shall be deemed to be the action of the Committee without any further action by the Committee, except as may be required for compliance with Rule 16b-3 under the Exchange Act, and the persons holding such awards shall be deemed to be Participants.

(d)                Notwithstanding the other provisions in this Section 4.2, the maximum number of shares that may be issued upon the exercise of Incentive Stock Options shall equal the aggregate share number stated in Section 4.1, subject to adjustment as provided in Section 15.1.

 

SECTION 5.  ELIGIBILITY

 

An Award may be granted to any employee, officer or director of the Company or a Related Company whom the Committee from time to time selects.  An Award may also be granted to any consultant, agent, advisor or independent contractor for bona fide services rendered to the Company or any Related Company that (a) are not in connection with the offer and sale of the Company's securities in a capital-raising transaction and (b) do not directly or indirectly promote or maintain a market for the Company's securities.  The foregoing are "Eligible Persons."

 

SECTION 6.  AWARDS

 

6.1               Form, Grant and Settlement of Awards

 

The Committee shall have the authority, in its sole discretion, to determine the type or types of Awards to be granted under the Plan.  Such Awards may be granted either alone or in addition to or in tandem with any other type of Award.  Any Award settlement may be subject to such conditions, restrictions and contingencies as the Committee shall determine.

 

6.2               Evidence of Awards

 

Awards granted under the Plan shall be evidenced by a written, including an electronic, instrument that shall contain such terms, conditions, limitations and restrictions as the Committee shall deem advisable and that are not inconsistent with the Plan.

 

6.3               Dividends and Distributions

 

Participants holding Awards may, if the Committee so determines, be credited with dividends paid with respect to the underlying shares or dividend equivalents while the Awards are so held in a manner determined by the Committee in its sole discretion.  The Committee may apply any restrictions to the dividends or dividend equivalents that the Committee deems appropriate.  The Committee, in its sole discretion, may determine the form of payment of dividends or dividend equivalents, including cash, shares of Common Stock, Restricted Stock or Stock Units.  Notwithstanding the foregoing, the right to any dividends or dividend equivalents declared and paid on the number of shares underlying an Option or Stock Appreciation Right may not be contingent, directly or indirectly, on the exercise of the Option or a Stock Appreciation Right, and an Award providing a right to dividends or dividend equivalents declared and paid on the number of shares underlying an Option or a Stock Appreciation Right, the payment of which is not contingent upon, or otherwise payable on, the exercise of the Option or a Stock Appreciation Right, must comply with or qualify for an exemption under Section 409A.

 

SECTION 7.  OPTIONS

 

7.1               Grant of Options

 

The Committee may grant Options designated as Incentive Stock Options or Nonqualified Stock Options.

7.2               Option Exercise Price

 

The exercise price for shares purchased under an Option shall be at least 100% of the Fair Market Value of the Common Stock on the Grant Date, except in the case of Substitute Awards.

 

7.3               Term of Options

 

Subject to earlier termination in accordance with the terms of the Plan and the instrument evidencing the Option, the maximum term of an Option shall be ten years from the Grant Date.

 

7.4               Exercise of Options

 

The Committee shall establish and set forth in each instrument that evidences an Option the time at which, or the installments in which, the Option shall vest and become exercisable, any of which provisions may be waived or modified by the Committee at any time. If not so established in the instrument evidencing the Option, the Option shall vest and become exercisable according to the following schedule, which may be waived or modified by the Committee at any time:

 

	
Period of Participant's Continuous Employment or Service With the Company or Its Related Companies From the Vesting Commencement Date

	
 

	
Portion of Total Option That Is Vested and Exercisable

	
 

	
 

	
 

	
After 1 year

	
 

	
1/4th

	
 

	
 

	
 

	
Each additional one-month period of continuous service completed thereafter

	
 

	
An additional 1/48th

	
 

	
 

	
 

	
After 4 years

	
 

	
100%

 

To the extent an Option has vested and become exercisable, the Option may be exercised in whole or from time to time in part by delivery, as directed by the Company, to the Company or a brokerage firm designated or approved by the Company of a properly executed stock option exercise agreement or notice, in a form and in accordance with procedures established by the Company, setting forth the number of shares with respect to which the Option is being exercised, the restrictions imposed on the shares purchased under such exercise agreement or notice, if any, and such representations and agreements as may be required by the Committee, accompanied by payment in full as described in Sections 7.5 and 13.  An Option may be exercised only for whole shares and may not be exercised for less than a reasonable number of shares at any one time, as determined by the Committee.

 

7.5                Payment of Exercise Price

 

The exercise price for shares purchased under an Option shall be paid in full, as directed by the Company, to the Company or a brokerage firm designated or approved by the Company by delivery of consideration equal to the product of the Option exercise price and the number of shares purchased.  Such consideration must be paid before the Company will issue the shares being purchased and must be in a form or a combination of forms acceptable to the Committee for that purchase, which forms may include:

 

(a)                 cash, check or wire transfer;

 

(b)                having the Company withhold shares of Common Stock that would otherwise be issued on exercise of the Option that have an aggregate Fair Market Value equal to the aggregate exercise price of the shares being purchased under the Option;

(c)                 tendering (either actually or, so long as the Common Stock is registered under Section 12(b) or 12(g) of the Exchange Act, by attestation) shares of Common Stock owned by the Participant that have an aggregate Fair Market Value equal to the aggregate exercise price of the shares being purchased under the Option;

 

(d)                so long as the Common Stock is registered under Section 12(b) or 12(g) of the Exchange Act, and to the extent permitted by law, delivery of a properly executed exercise agreement or notice, together with irrevocable instructions to a brokerage firm designated or approved by the Company to deliver promptly to the Company the aggregate amount of  proceeds to pay the Option exercise price and any withholding tax obligations that may arise in connection with the exercise, all in accordance with the regulations of the Federal Reserve Board; or

 

(e)                such other consideration as the Committee may permit.

 

7.6               Effect of Termination of Service

 

The Committee shall establish and set forth in each instrument that evidences an Option whether the Option shall continue to be exercisable, and the terms and conditions of such exercise, after a Termination of Service, any of which provisions may be waived or modified by the Committee at any time, provided that any such waiver or modification shall satisfy the requirements for exemption under Section 409A.  If not so established in the instrument evidencing the Option, the Option shall be exercisable according to the following terms and conditions, which may be waived or modified by the Committee at any time:

 

(a)             Any portion of an Option that is not vested and exercisable on the date of a Participant's Termination of Service shall expire on such date.

 

(b)            Any portion of an Option that is vested and exercisable on the date of a Participant's Termination of Service shall expire on the earliest to occur of:

 

(i)               if the Participant's Termination of Service occurs for reasons other than Cause, Retirement, Disability or death, the date that is three months after such Termination of Service;

 

(ii)              if the Participant's Termination of Service occurs by reason of Retirement, Disability or death, the one-year anniversary of such Termination of Service; and

 

(iii)            the last day of the maximum term of the Option (the "Option Expiration Date").

 

Notwithstanding the foregoing, if a Participant dies after his or her Termination of Service but while an Option is otherwise exercisable, the portion of the Option that is vested and exercisable on the date of such Termination of Service shall expire upon the earlier to occur of (y) the Option Expiration Date and (z) the one-year anniversary of the date of death, unless the Committee determines otherwise.

 

 Also notwithstanding the foregoing, in case a Participant's Termination of Service occurs for Cause, all Options granted to the Participant shall automatically expire upon first notification to the Participant of such termination, unless the Committee determines otherwise.  If a Participant's employment or service relationship with the Company is suspended pending an investigation of whether the Participant shall be terminated for Cause, all the Participant's rights under any Option shall likewise be suspended during the period of investigation.  If any facts that would constitute termination for Cause are discovered after a Participant's Termination of Service, any Option then held by the Participant may be immediately terminated by the Committee, in its sole discretion.

Also notwithstanding the foregoing, if the exercise of the Option following a Participant's Termination of Service, but while the Option is otherwise exercisable, would be prohibited solely because the issuance of Common Stock would violate either the registration requirements under the Securities Act or the Company's insider trading policy, then the Option shall remain exercisable until the earlier of (a) the Option Expiration Date and (b) the expiration of a period of three months (or such other period of time as determined by the Committee in its sole discretion) after the Participant's Termination of Service during which the exercise of the Option would not be in violation of the Securities Act or the Company's insider trading policy requirements.

SECTION 8.  INCENTIVE STOCK OPTION LIMITATIONS

 

Notwithstanding any other provisions of the Plan, the terms and conditions of any Incentive Stock Options shall in addition comply in all respects with Section 422 of the Code, or any successor provision, and any applicable regulations thereunder, including, to the extent required thereunder, the following:

 

8.1               Dollar Limitation

 

To the extent the aggregate Fair Market Value (determined as of the Grant Date) of Common Stock with respect to which a Participant's Incentive Stock Options become exercisable for the first time during any calendar year (under the Plan and all other stock option plans of the Company and its parent and subsidiary corporations) exceeds $100,000, such portion in excess of $100,000 shall be treated as a Nonqualified Stock Option.  In the event the Participant holds two or more such Options that become exercisable for the first time in the same calendar year, such limitation shall be applied on the basis of the order in which such Options are granted.

 

8.2                Eligible Employees

 

Individuals who are not employees of the Company or one of its parent or subsidiary corporations (as such terms are defined for purposes of Section 422 of the Code) may not be granted Incentive Stock Options.

 

8.3                Exercise Price

 

In the case of an Incentive Stock Option granted to a Participant who owns more than 10% of the total combined voting power of all classes of the stock of the Company or of its parent or subsidiary corporations (a "Ten Percent Stockholder"), shall not be less than 110% of the Fair Market Value of the Common Stock on the Grant Date.  The determination of more than 10% ownership shall be made in accordance with Section 422 of the Code.

 

8.4               Option Term

 

Subject to earlier termination in accordance with the terms of the Plan and the instrument evidencing the Option, the maximum term of an Incentive Stock Option shall not exceed ten years, and in the case of an Incentive Stock Option granted to a Ten Percent Stockholder, shall not exceed five years.

 

8.5                Exercisability

 

An Option designated as an Incentive Stock Option shall cease to qualify for favorable tax treatment as an Incentive Stock Option to the extent it is exercised (if permitted by the terms of the Option) (a) more than three months after the date of a Participant's Termination of Service if termination was for reasons other than death or disability, (b) more than one year after the date of a Participant's Termination of Service if termination was by reason of disability, or (c) after the Participant has been on leave of absence for more than 90 days, unless the Participant's reemployment rights are guaranteed by statute or contract.

 

 8.6             Taxation of Incentive Stock Options

 

In order to obtain certain tax benefits afforded to Incentive Stock Options under Section 422 of the Code, the Participant must hold the shares acquired upon the exercise of an Incentive Stock Option for two years after the Grant Date and one year after the date of exercise.

 

A Participant may be subject to the alternative minimum tax at the time of exercise of an Incentive Stock Option.  The Participant shall give the Company prompt notice of any disposition of shares acquired on the exercise of an Incentive Stock Option prior to the expiration of such holding periods.

8.7               Code Definitions

 

For the purposes of this Section 8 "disability," "parent corporation" and "subsidiary corporation" shall have the meanings attributed to those terms for purposes of Section 422 of the Code.

 

SECTION 9.  STOCK APPRECIATION RIGHTS

 

9.1                Grant of Stock Appreciation Rights

 

The Committee may grant Stock Appreciation Rights to Participants at any time on such terms and conditions as the Committee shall determine in its sole discretion.  An SAR may be granted in tandem with an Option or alone ("freestanding").  The grant price of a tandem SAR shall be equal to the exercise price of the related Option.  The grant price of a freestanding SAR shall be established in accordance with procedures for Options set forth in Section 7.2.  An SAR may be exercised upon such terms and conditions and for the term as the Committee determines in its sole discretion; provided, however, that, subject to earlier termination in accordance with the terms of the Plan and the instrument evidencing the SAR, the maximum term of a freestanding SAR shall be ten years, and in the case of a tandem SAR, (a) the term shall not exceed the term of the related Option and (b) the tandem SAR may be exercised for all or part of the shares subject to the related Option upon the surrender of the right to exercise the equivalent portion of the related Option, except that the tandem SAR may be exercised only with respect to the shares for which its related Option is then exercisable.

 

9.2               Payment of SAR Amount

 

Upon the exercise of an SAR, a Participant shall be entitled to receive payment in an amount determined by multiplying:  (a) the difference between the Fair Market Value of the Common Stock on the date of exercise over the grant price of the SAR by (b) the number of shares with respect to which the SAR is exercised.  At the discretion of the Committee as set forth in the instrument evidencing the Award, the payment upon exercise of an SAR may be in cash, in shares, in some combination thereof or in any other manner approved by the Committee in its sole discretion.

 

9.3               Post-Termination Exercise

 

The Committee shall establish and set forth in each instrument that evidences a freestanding SAR whether the SAR shall continue to be exercisable, and the terms and conditions of such exercise, after a Termination of Service, any of which provisions may be waived or modified by the Committee at any time, provided that any such waiver or modification shall satisfy the requirements under Section 409A.

 

SECTION 10.  STOCK AWARDS, RESTRICTED STOCK AND STOCK UNITS

 

10.1            Grant of Stock Awards, Restricted Stock and Stock Units

 

The Committee may grant Stock Awards, Restricted Stock and Stock Units on such terms and conditions and subject to such repurchase or forfeiture restrictions, if any, which may be based on continuous service with the Company or a Related Company or the achievement of any performance goals, as the Committee shall determine in its sole discretion, which terms, conditions and restrictions shall be set forth in the instrument evidencing the Award.

 

10.2            Vesting of Restricted Stock and Stock Units

 

Upon the satisfaction of any terms, conditions and restrictions prescribed with respect to Restricted Stock or Stock Units, or upon a Participant's release from any terms, conditions and restrictions of Restricted Stock or Stock Units, as determined by the Committee, and subject to the provisions of Section 13, (a) the shares of Restricted Stock covered by each Award of Restricted Stock shall become freely transferable by the Participant, and (b) Stock Units shall be paid in shares of Common Stock or, if set forth in the instrument evidencing the Awards, in cash or a combination of cash and shares of Common Stock.  Any fractional shares subject to such Awards shall be paid to the Participant in cash. 

10.3            Waiver of Restrictions

 

Notwithstanding any other provisions of the Plan, the Committee, in its sole discretion, may waive the repurchase or forfeiture period and any other terms, conditions or restrictions on any Restricted Stock or Stock Unit under such circumstances and subject to such terms and conditions as the Committee shall deem appropriate.

 

SECTION 11.  PERFORMANCE AWARDS

 

11.1            Performance Shares

 

The Committee may grant Awards of Performance Shares, designate the Participants to whom Performance Shares are to be awarded and determine the number of Performance Shares and the terms and conditions of each such Award.  Performance Shares shall consist of a unit valued by reference to a designated number of shares of Common Stock, the value of which may be paid to the Participant by delivery of shares of Common Stock or, if set forth in the instrument evidencing the Award, of such property as the Committee shall determine, including, without limitation, cash, shares of Common Stock, other property, or any combination thereof, upon the attainment of performance goals, as established by the Committee, and other terms and conditions specified by the Committee.  Notwithstanding the foregoing, and Subject to Section 16, the amount to be paid under an Award of Performance Shares may be adjusted on the basis of such further consideration as the Committee shall determine in its sole discretion.

 

11.2            Performance Units

 

The Committee may grant Awards of Performance Units, designate the Participants to whom Performance Units are to be awarded and determine the number of Performance Units and the terms and conditions of each such Award.  Performance Units shall consist of a unit valued by reference to a designated amount of property other than shares of Common Stock, which value may be paid to the Participant by delivery of such property as the Committee shall determine, including, without limitation, cash, shares of Common Stock, other property, or any combination thereof, upon the attainment of performance goals, as established by the Committee, and other terms and conditions specified by the Committee.  Notwithstanding the foregoing, and subject to Section 16, the amount to be paid under an Award of Performance Units may be adjusted on the basis of such further consideration as the Committee shall determine in its sole discretion.

SECTION 12.  OTHER STOCK OR CASH-BASED AWARDS

 

Subject to the terms of the Plan and such other terms and conditions as the Committee deems appropriate, the Committee may grant other incentives payable in cash or in shares of Common Stock under the Plan.

 

SECTION 13.  WITHHOLDING

 

The Company may require the Participant to pay to the Company the amount of (a) any taxes that the Company is required by applicable federal, state, local or foreign law to withhold with respect to the grant, vesting or exercise of an Award ("tax withholding obligations") and (b) any amounts due from the Participant to the Company or to any Related Company ("other obligations") to the extent such amounts are not "deferred compensation" within the meaning of Section 409A.  The Company shall not be required to issue any shares of Common Stock or otherwise settle an Award under the Plan until such tax withholding obligations and other obligations are satisfied.

 

The Committee may permit or require a Participant to satisfy all or part of the Participant's tax withholding obligations and other obligations by (a) paying cash to the Company, (b) having the Company withhold an amount from any cash amounts otherwise due or to become due from the Company to the Participant, (c) having the Company withhold a number of shares of Common Stock that would otherwise be issued to the Participant (or become vested, in the case of Restricted Stock) having a Fair Market Value equal to the tax withholding obligations and other obligations, or (d) surrendering a number of shares of Common Stock the Participant already owns having a value equal to the tax withholding obligations and other obligations.  To the extent required to avoid adverse financial accounting consequences to the Company, the value of the shares so withheld or tendered may not exceed the employer's minimum required tax withholding rate.

SECTION 14.  ASSIGNABILITY

 

No Award or interest in an Award may be sold, assigned, pledged (as collateral for a loan or as security for the performance of an obligation or for any other purpose) or transferred by a Participant or made subject to attachment or similar proceedings otherwise than by will or by the applicable laws of descent and distribution, except to the extent permitted by the Company, the Participant may designate one or more beneficiaries on a Company-approved form who may exercise the Award or receive payment under the Award after the Participant's death.  During a Participant's lifetime, an Award may be exercised only by the Participant.  Notwithstanding the foregoing and to the extent permitted by Section 422 of the Code, the Committee, in its sole discretion, may permit a Participant to assign or transfer an Award subject to such terms and conditions as the Committee shall specify.

 

SECTION 15.  ADJUSTMENTS

 

15.1            Adjustment of Shares

 

In the event, at any time or from time to time, a stock dividend, stock split, spin-off, combination or exchange of shares, recapitalization, merger, consolidation, distribution to stockholders other than a normal cash dividend, or other change in the Company's corporate or capital structure results in (a) the outstanding shares of Common Stock, or any securities exchanged therefor or received in their place, being exchanged for a different number or kind of securities of the Company or (b) new, different or additional securities of the Company or any other company being received by the holders of shares of Common Stock, then the Committee shall make proportional adjustments in (i) the maximum number and kind of securities available for issuance under the Plan; (ii) the maximum number and kind of securities issuable as Incentive Stock Options as set forth in Section 4.2; (iii) the maximum number and kind of securities set forth in Section 16.4; and (iv) the number and kind of securities that are subject to any outstanding Award and the per share price of such securities, without any change in the aggregate price to be paid therefor.  The determination by the Committee, as to the terms of any of the foregoing adjustments shall be conclusive and binding.

 

Notwithstanding the foregoing, the issuance by the Company of shares of stock of any class, or securities convertible into shares of stock of any class, for cash or property, or for labor or services rendered, either upon direct sale or upon the exercise of rights or warrants to subscribe therefor, or upon conversion of shares or obligations of the Company convertible into such shares or other securities, shall not affect, and no adjustment by reason thereof shall be made with respect to, outstanding Awards.  Also notwithstanding the foregoing, a dissolution or liquidation of the Company or a Company Transaction shall not be governed by this Section 15.1 but shall be governed by Sections 15.2 and 15.3, respectively.

 

15.2            Dissolution or Liquidation

 

To the extent not previously exercised or settled, and unless otherwise determined by the Committee in its sole discretion, Awards shall terminate immediately prior to the dissolution or liquidation of the Company.  To the extent a vesting condition, forfeiture provision or repurchase right applicable to an Award has not been waived by the Committee, the Award shall be forfeited immediately prior to the consummation of the dissolution or liquidation.

 

15.3            Company Transaction; Change in Control

 

15.3.1       Effect of a Company Transaction That Is Not a Change in Control or a Related Party Transaction

 

Notwithstanding any other provision of the Plan to the contrary, unless the Committee shall determine otherwise in the instrument evidencing the Award or in a written employment, services or other agreement between the Participant and the Company or a Related Company, in the event of a Company Transaction that is not (a) a Change in Control or (b) a Related Party Transaction:

 

(i)                   All outstanding Awards, other than Performance Shares and Performance Units, shall become fully and immediately vested and exercisable and all applicable restrictions or forfeiture provisions shall lapse immediately prior to the Company Transaction and shall terminate at the effective time of the Company Transaction, if and to the extent such Awards are not converted, assumed or replaced by the Successor Company.

For the purposes of this Section 15.3.1, an Award shall be considered converted, assumed or replaced by the Successor Company if following the Company Transaction the option or right confers the right to purchase or receive, for each share of Common Stock subject to the Award immediately prior to the Company Transaction, the consideration (whether stock, cash or other securities or property) received in the Company Transaction by holders of Common Stock for each share held on the effective date of the transaction (and if holders were offered a choice of consideration, the type of consideration chosen by the holders of a majority of the outstanding shares); provided, however, that if such consideration received in the Company Transaction is not solely common stock of the Successor Company, the Committee may, with the consent of the Successor Company, provide for the consideration to be received upon the exercise of the Option, for each share of Common Stock subject thereto, to be solely common stock of the Successor Company substantially equal in fair market value to the per share consideration received by holders of Common Stock in the Company Transaction.  The determination of such substantial equality of value of consideration shall be made by the Committee, and its determination shall be conclusive and binding.

 

(ii)                 All Performance Shares or Performance Units earned and outstanding as of the date the Company Transaction is determined to have occurred shall be payable in full at the target level in accordance with the payout schedule pursuant to the Award agreement.  Any remaining Performance Shares or Performance Units (including any applicable performance period) for which the payout level has not been determined shall be prorated at the target payout level up to and including the date of such Company Transaction and shall be payable in full at the target level in accordance with the payout schedule pursuant to the Award agreement.  Any other restrictions not waived by the Committee in its sole discretion shall remain in effect.

 

(iii)                Notwithstanding the foregoing, the Committee, in its sole discretion, may instead provide in the event of a Company Transaction that a Participant's outstanding Awards shall terminate upon or immediately prior to such Company Transaction and that such Participant shall receive, in exchange therefor, a cash payment equal to the amount (if any) by which (x) the value of the per share consideration received by holders of Common Stock in the Company Transaction, or, in the event the Company Transaction is one of the transactions listed under subsection (c) in the definition of Company Transaction or otherwise does not result in direct receipt of consideration by holders of Common Stock, the value of the deemed per share consideration received, in each case as determined by the Committee in its sole discretion, multiplied by the number of shares of Common Stock subject to such outstanding Awards (to the extent then vested and exercisable or whether or not then vested and exercisable, as determined by the Committee in its sole discretion) exceeds (y) if applicable, the respective aggregate exercise price or grant price for such Awards.

 

15.3.2       Effect of a Change in Control

 

Notwithstanding any other provision of the Plan to the contrary, unless the Committee shall determine otherwise in the instrument evidencing the Award or in a written employment, services or other agreement between the Participant and the Company or a Related Company, in the event of a Change in Control:

 

(a)                 any Options and Stock Appreciation Rights outstanding as of the date such Change in Control is determined to have occurred, and which are not then exercisable and vested, shall become fully exercisable and vested to the full extent of the original grant;

 

(b)                any restrictions applicable to any Restricted Stock or Stock Units shall lapse, and such Restricted Stock or Stock Units shall become free of all restrictions and limitations and become fully vested and transferable to the full extent of the original grant;

 

(c)                  The target payout opportunities attainable under all outstanding Stock Awards and Stock Units with restrictions based on performance criteria, Performance Shares, and Performance Units shall be deemed to have been fully earned based on targeted performance being attained as of the effective date of the Company Transaction, and such Awards all be paid within 60 days following the effective date of the Company Transaction; and

(d)                any restrictions and deferral limitations and other conditions applicable to any other Awards shall lapse, and such other Awards shall become free of all restrictions, limitations or conditions and become fully vested and transferable to the full extent of the original grant.

 

15.3.3       Change in Control Cash-Out

 

Notwithstanding any other provision of the Plan, during the 60-day period from and after a Change in Control (the "Change in Control Exercise Period"), if the Committee shall so determine at, or at any time after, the time of grant, a Participant holding an Option, SAR, Restricted Stock Unit or Performance Share, shall have the right, whether or not the Award is fully vested and/or exercisable and without regard to any deferral or other restriction and in lieu of the payment of the purchase price for the shares of Common Stock being purchased under an Option, to elect by giving notice to the Company within the Change in Control Exercise Period to surrender all or part of the Award to the Company and to receive cash, within 30 days of such notice:

 

(a)                 for an Option or SAR, in an amount equal to the amount by which the Acquisition Price per share of Common Stock on the date of such election shall exceed the exercise price per share of Common Stock under the Option, or the grant price per share of Common Stock under the SAR; and

 

(b)                for a Restricted Stock Unit or Performance Share, in an amount equal to the Acquisition Price per share of Common Stock under the Restricted Stock or Performance Share, multiplied by the number of shares of Common Stock granted under the Award as to which the right granted under this Section 15.3.3 shall have been exercised.

 

15.4            Further Adjustment of Awards

 

Subject to Sections 15.2 and 15.3, the Committee shall have the discretion, exercisable at any time before a sale, merger, consolidation, reorganization, liquidation, dissolution or change in control of the Company, as defined by the Committee, to take such further action as it determines to be necessary or advisable with respect to Awards.  Such authorized action may include (but shall not be limited to) establishing, amending or waiving the type, terms, conditions or duration of, or restrictions on, Awards so as to provide for earlier, later, extended or additional time for exercise, lifting restrictions and other modifications, and the Committee may take such actions with respect to all Participants, to certain categories of Participants or only to individual Participants.  The Committee may take such action before or after granting Awards to which the action relates and before or after any public announcement with respect to such sale, merger, consolidation, reorganization, liquidation, dissolution or change in control that is the reason for such action.

 

15.5            No Limitations

 

The grant of Awards shall in no way affect the Company's right to adjust, reclassify, reorganize or otherwise change its capital or business structure or to merge, consolidate, dissolve, liquidate or sell or transfer all or any part of its business or assets.

 

15.6            Fractional Shares

 

In the event of any adjustment in the number of shares covered by any Award, each such Award shall cover only the number of full shares resulting from such adjustment.

 

15.7            Section 409A

 

Notwithstanding anything in this Plan to the contrary, (a) any adjustments made pursuant to this Section 15 to Awards that are considered "deferred compensation" within the meaning of Section 409A shall be made in compliance with the requirements of Section 409A; (b) any adjustments made pursuant to Section 15 to Awards that are not considered "deferred compensation" subject to Section 409A shall be made in such a manner as to ensure that after such adjustment the Awards either (i) continue not to be subject to Section 409A or (ii) comply with the requirements of Section 409A; and (c) in any event, the Plan Administrator shall not have the authority to make any adjustments pursuant to Section 15 to the extent the existence of such authority would cause an Award that is not intended to be subject to Section 409A at the time of grant to be subject thereto.

SECTION 16.  SECTION 162(m) PROVISIONS

 

16.1            Terms of Section 162(m) Awards Generally

 

Notwithstanding any other provision of the Plan, the Compensation Committee may, at the time of grant of an Award (other than an Option or Stock Appreciation Right) to a Participant who is then a Covered Employee or is likely to be a Covered Employee as of the end of the tax year in which the Company would claim a tax deduction in connection with such Award, specify that all or any portion of such Award is intended to satisfy the requirements for performance-based compensation under Section 162(m).  With respect to each such Award, the Compensation Committee shall establish, in writing, that the vesting and/or payment pursuant to the Award shall be conditioned on the attainment for the specified Performance Period of specified performance targets related to designated performance goals for such period selected by the Compensation Committee from among the Performance Criteria specified in Section 16.2.  Such performance goals shall be set by the Compensation Committee within the time period prescribed by, and shall otherwise comply with the requirements of, Section 162(m), or any successor provision thereto, and the regulations thereunder.

 

16.2            Performance Criteria

 

If an Award is subject to this Section 16, then the lapsing of restrictions thereon and the distribution of cash, shares of Common Stock or other property pursuant thereto, as applicable, shall be subject to the achievement of one or more objective performance goals established by the Committee, which shall be based on the attainment of specified levels of one of or any combination of the following "performance criteria" for the Company as a whole or any business unit of the Company, as reported or calculated by the Company: net earnings or net income (before or after taxes); earnings per share (basic or fully diluted); net sales growth or bookings growth; revenues; operating profit or income (including or excluding depreciation, amortization, extraordinary items, restructuring charges or other expenses); return measures (including, but not limited to, return on assets, capital, net capital utilized, equity or sales); working capital; cash flow (including, but not limited to, operating cash flow, free cash flow or cash flow return on capital); earnings before or after taxes, interest, depreciation and/or amortization; gross or operating profit; cost control; strategic initiatives; market share; improvements in capital structure; productivity ratios; share price (including, but not limited to, growth measures and total stockholder return); expense targets; margins; operating efficiency or margins; capital efficiency; strategic targets; economic profit; employee or customer satisfaction, services performance, subscriber, cash management or asset management metrics; working capital targets; cash value added ("CVA"); or market or economic value added ("EVA") (together, the “Performance Criteria").

 

Such performance goals also may be based on the achievement of specified levels of Company performance (or performance of an applicable affiliate or business unit of the Company) under one or more of the Performance Criteria described above relative to the performance of other corporations.  The Compensation Committee may provide in any such Award that any evaluation of performance may include or exclude any of the following events that occurs during a Performance Period:  a) asset write-downs, (b) litigation or claim judgments or settlements, (c) the effect of changes in tax laws, accounting principles, or other laws or provisions affecting reported results, (d) any reorganization and restructuring programs, (e) extraordinary nonrecurring items as described in Accounting Principles Board Opinion No. 30 and/or in Management’s Discussion and Analysis of Financial Condition and Results of Operations appearing in the Company’s annual report to stockholders for the applicable year, (f) acquisitions or divestitures, (g) foreign exchange gains and losses, and (h) gains and losses on asset sales.  To the extent such inclusions or exclusions affect Awards to Covered Employees, they shall be prescribed in a form that satisfies the requirements for "performance-based compensation" within the meaning of Section 162(m), or any successor provision thereto.

 

16.3            Compensation Committee Certification and Authority

 

After the completion of each Performance Period, the Compensation Committee shall certify the extent to which any Performance Criteria has been satisfied, and the amount payable as a result thereof, prior to payment, settlement or vesting of any Award subject to this Section 16.  Notwithstanding any provision of the Plan other than Section 15, with respect to any Award that is subject to this Section 16, the Compensation Committee may adjust downward, but not upward, the amount payable pursuant to such Award, and the Compensation Committee may not waive the achievement of the applicable performance goals except in the case of the death or Disability of the Covered Employee.

The Compensation Committee shall have the power to impose such other restrictions on Awards subject to this Section 16 as it may deem necessary or appropriate to ensure that such Awards satisfy all requirements for "performance-based" compensation with the meaning of Section 162(m).

 

16.4            Maximum Awards

 

Subject to adjustment from time to time as provided in Section 15.1, no Covered Employee may be granted Awards other than Performance Units subject to this Section 16 in any one year period with respect to more than 300,000 shares of Common Stock for such Award; except that the Company may make additional onetime grants of such Awards for up to 200,000 shares to newly hired or newly promoted individuals, and the maximum dollar value payable with respect to Performance Units or other awards payable in cash subject to this Section 16 granted to any Covered Employee in any one calendar year is $1,000,000.

 

The Committee shall have the power to impose such other restrictions on Awards subject to this Section 16 as it may deem necessary or appropriate to ensure that such Awards satisfy all requirements for "performance-based compensation" within the meaning of Section 162(m), or any successor provision thereto.

 

SECTION 17.  AMENDMENT AND TERMINATION

 

17.1            Amendment, Suspension or Termination

 

The Board or the Compensation Committee may amend, suspend or terminate the Plan or any portion of the Plan at any time and in such respects as it shall deem advisable; provided, however, that, to the extent required by applicable law, regulation or stock exchange rule, stockholder approval shall be required for any amendment to the Plan; and provided, further, that any amendment that requires stockholder approval may be made only by the Board.  Subject to Section 17.3, the Committee may amend the terms of any outstanding Award, prospectively or retroactively.

 

17.2            Term of the Plan

 

Unless sooner terminated as provided herein, the Plan shall terminate ten years from the Effective Date.  After the Plan is terminated, no future Awards may be granted, but Awards previously granted shall remain outstanding in accordance with their applicable terms and conditions and the Plan's terms and conditions.  Notwithstanding the foregoing, no Incentive Stock Options may be granted more than ten years after the later of (a) the Effective Date and (b) the approval by the stockholders of any amendment to the Plan that constitutes the adoption of a new plan for purposes of Section 422 of the Code.

 

17.3            Consent of Participant

 

The amendment, suspension or termination of the Plan or a portion thereof or the amendment of an outstanding Award shall not, without the Participant's consent, materially adversely affect any rights under any Award theretofore granted to the Participant under the Plan.  Any change or adjustment to an outstanding Incentive Stock Option shall not, without the consent of the Participant, be made in a manner so as to constitute a "modification" that would cause such Incentive Stock Option to fail to continue to qualify as an Incentive Stock Option.  Notwithstanding the foregoing, any adjustments made pursuant to Section 15 shall not be subject to these restrictions.

 

Notwithstanding any provision contained in the Plan to the contrary, the Board shall have broad authority to amend the Plan or any outstanding Award without the consent of a Participant to the extent the Board deems necessary or advisable to (a) comply with, or take into account, changes in applicable tax laws, securities laws, accounting rules and other applicable law, rules and regulations or (b) to ensure that an Award is not subject to additional taxes under Section 409A of the Code.

 

SECTION 18.  GENERAL

 

18.1            No Individual Rights

 

No individual or Participant shall have any claim to be granted any Award under the Plan, and the Company has no obligation for uniformity of treatment of Participants under the Plan.

 

Furthermore, nothing in the Plan or any Award granted under the Plan shall be deemed to constitute an employment contract or confer or be deemed to confer on any Participant any right to continue in the employ of, or to continue any other relationship with, the Company or any Related Company or limit in any way the right of the Company or any Related Company to terminate a Participant's employment or other relationship at any time, with or without cause.

 

18.2            Issuance of Shares

 

Notwithstanding any other provision of the Plan, the Company shall have no obligation to issue or deliver any shares of Common Stock under the Plan or make any other distribution of benefits under the Plan unless, in the opinion of the Company's counsel, such issuance, delivery or distribution would comply with all applicable laws (including, without limitation, the requirements of the Securities Act or the laws of any state or foreign jurisdiction) and the applicable requirements of any securities exchange or similar entity.

 

The Company shall be under no obligation to any Participant to register for offering or resale or to qualify for exemption under the Securities Act, or to register or qualify under the laws of any state or foreign jurisdiction, any shares of Common Stock, security or interest in a security paid or issued under, or created by, the Plan, or to continue in effect any such registrations or qualifications if made.

 

To the extent the Plan or any instrument evidencing an Award provides for issuance of stock certificates to reflect the issuance of shares of Common Stock, the issuance may be effected on a noncertificated basis, to the extent not prohibited by applicable law or the applicable rules of any stock exchange.

 

18.3            Indemnification

 

Each person who is or shall have been a member of the Board, or a committee appointed by the Board, or an officer of the Company to whom authority was delegated in accordance with Section 3, shall be indemnified and held harmless by the Company against and from any loss, cost, liability or expense that may be imposed upon or reasonably incurred by such person in connection with or resulting from any claim, action, suit or proceeding to which such person may be a party or in which such person may be involved by reason of any action taken or failure to act under the Plan and against and from any and all amounts paid by such person in settlement thereof, with the Company's approval, or paid by such person in satisfaction of any judgment in any such claim, action, suit or proceeding against such person; provided, however, that such person shall give the Company an opportunity, at its own expense, to handle and defend the same before such person undertakes to handle and defend it on such person's own behalf, unless such loss, cost, liability or expense is a result of such person's own willful misconduct or except as expressly provided by statute.

 

The foregoing right of indemnification shall not be exclusive of any other rights of indemnification to which such person may be entitled under the Company's certificate of incorporation or bylaws, as a matter of law, or otherwise, or of any power that the Company may have to indemnify or hold harmless.

 

18.4            No Rights as a Stockholder

 

Unless otherwise provided by the Committee or in the instrument evidencing the Award or in a written employment, services or other agreement, no Award, other than a Stock Award, shall entitle the Participant to any cash dividend, voting or other right of a stockholder unless and until the date of issuance under the Plan of the shares that are the subject of such Award.

18.5            Compliance with Laws and Regulations

 

(a)                 In interpreting and applying the provisions of the Plan, any Option granted as an Incentive Stock Option pursuant to the Plan shall, to the extent permitted by law, be construed as an "incentive stock option" within the meaning of Section 422 of the Code.

 

(b)                The Plan and Awards granted under the Plan are intended to be exempt from the requirements of Code Section 409A to the maximum extent possible, whether pursuant to the short-term deferral exception described in Treasury Regulation Section 1.409A-1(b)(4), the involuntary separation pay plan exception described in Treasury Regulation Section 1.409A-1(b)(9)(iii), or otherwise.  To the extent Code Section 409A is applicable to the Plan or any Award granted under the Plan, it is intended that the Plan and any Awards granted under the Plan comply with the deferral, payout and other limitations and restrictions imposed under Code Section 409A.  Notwithstanding any other provision of the Plan or any Award granted under the Plan to the contrary, the Plan and any Award granted under the Plan shall be interpreted, operated and administered in a manner consistent with such intentions.  Without limiting the generality of the foregoing, and notwithstanding any other provision of the Plan or any Award granted under the Plan to the contrary, with respect to any payments and benefits under the Plan or any Award granted under the Plan to which Code Section 409A applies, all references in the Plan or any Award granted under the Plan to the termination of the Participant's employment or service are intended to mean the Participant's "separation from service," within the meaning of Code Section 409A(a)(2)(A)(i).  In addition, if the Participant is a "specified employee," within the meaning of Code Section 409A, then to the extent necessary to avoid subjecting the Participant to the imposition of any additional tax under Code Section 409A, amounts that would otherwise be payable under the Plan or any Award granted under the Plan during the six-month period immediately following the Participant's "separation from service," within the meaning of Code Section 409A(a)(2)(A)(i), shall not be paid to the Participant during such period, but shall instead be accumulated and paid to the Participant (or, in the event of the Participant's death, the Participant's estate) in a lump sum on the first business day after the earlier of the date that is six months following the Participant's separation from service or the Participant's death.  Notwithstanding any other provision in the Plan, the Committee, to the extent it deems necessary or advisable in its sole discretion, reserves the right, but shall not be required, to unilaterally amend or modify the Plan and any Award granted under the Plan so that the Award qualifies for exemption from or complies with Section 409A; provided, however, that the Committee makes no representations that Awards granted under the Plan shall be exempt from or comply with Section 409A and makes no undertaking to preclude Section 409A from applying to Awards granted under the Plan.

 

18.6            Participants in Other Countries or Jurisdictions

 

Without amending the Plan, the Committee may grant Awards to Eligible Persons who are foreign nationals on such terms and conditions different from those specified in this Plan as may, in the judgment of the Committee, be necessary or desirable to foster and promote achievement of the purposes of the Plan and shall have the authority to adopt such modifications, procedures, subplans and the like as may be necessary or desirable to comply with provisions of the laws or regulations of other countries or jurisdictions in which the Company or any Related Company may operate or have employees to ensure the viability of the benefits from Awards granted to Participants employed in such countries or jurisdictions, meet the requirements that permit the Plan to operate in a qualified or tax-efficient manner, comply with applicable foreign laws or regulations and meet the objectives of the Plan.

 

18.7            No Trust or Fund

 

The Plan is intended to constitute an "unfunded" plan.  Nothing contained herein shall require the Company to segregate any monies or other property, or shares of Common Stock, or to create any trusts, or to make any special deposits for any immediate or deferred amounts payable to any Participant, and no Participant shall have any rights that are greater than those of a general unsecured creditor of the Company.

 

18.8            Successors

 

All obligations of the Company under the Plan with respect to Awards shall be binding on any successor to the Company, whether the existence of such successor is the result of a direct or indirect purchase, merger, consolidation, or otherwise, of all or substantially all the business and/or assets of the Company.

18.9            Severability

 

If any provision of the Plan or any Award is determined to be invalid, illegal or unenforceable in any jurisdiction, or as to any person, or would disqualify the Plan or any Award under any law deemed applicable by the Committee, such provision shall be construed or deemed amended to conform to applicable laws, or, if it cannot be so construed or deemed amended without, in the Committee's determination, materially altering the intent of the Plan or the Award, such provision shall be stricken as to such jurisdiction, person or Award, and the remainder of the Plan and any such Award shall remain in full force and effect.

 

18.10         Choice of Law and Venue

 

The Plan, all Awards granted thereunder and all determinations made and actions taken pursuant hereto, to the extent not otherwise governed by the laws of the United States, shall be governed by the laws of the State of California without giving effect to principles of conflicts of law.  Participants irrevocably consent to the nonexclusive jurisdiction and venue of the state and federal courts located in the State of California.

 

18.11         Legal Requirements

 

The granting of Awards and the issuance of shares of Common Stock under the Plan are subject to all applicable laws, rules and regulations and to such approvals by any governmental agencies or national securities exchanges as may be required.

 

SECTION 19.  EFFECTIVE DATE

 

The effective date (the "Effective Date") is the date on which the Plan is adopted by the Board.  If the stockholders of the Company do not approve the Plan within 12 months after the Board's adoption of the Plan, any Incentive Stock Options granted under the Plan will be treated as Nonqualified Stock Options.

APPENDIX A TO 2007 EQUITY INCENTIVE PLAN

 

DEFINITIONS

 

As used in the Plan,

 

"Acquired Entity" means any entity acquired by the Company or a Related Company or with which the Company or a Related Company merges or combines.

 

"Award" means any Option, Stock Appreciation Right, Stock Award, Restricted Stock, Stock Unit, Performance Share, Performance Unit, dividend equivalent, cash-based award or other incentive payable in cash or in shares of Common Stock as may be designated by the Committee from time to time.

 

"Board" means the Board of Directors of the Company.

 

"Cause," unless otherwise defined in the instrument evidencing an Award or in a written employment, services or other agreement between the Participant and the Company or a Related Company, means dishonesty, fraud, serious or willful misconduct, unauthorized use or disclosure of confidential information or trade secrets, or conduct prohibited by law (except minor violations), in each case as determined by the Company's chief human resources officer or other person performing that function or, in the case of directors and executive officers, the Compensation Committee, whose determination shall be conclusive and binding.

 

"Change in Control," unless the Committee determines otherwise in the instrument evidencing the Award or in a written employment, services or other agreement between the Participant and the Company or a Related Company, means the happening of any of the following events:

 

(a)            an acquisition by any Entity of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of more than 50% of either (1) the then outstanding shares of common stock of the Company (the "Outstanding Company Common Stock") or (2) the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors (the "Outstanding Company Voting Securities"), excluding, however, the following:  (i) any acquisition directly from the Company, other than an acquisition by virtue of the exercise of a conversion privilege where the security being so converted was not acquired directly from the Company by the party exercising the conversion privilege, (ii) any acquisition by the Company, (iii) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any Related Company, or (iv) a Related Party Transaction; or

 

(b)            a change in the composition of the Board during any two-year period such that the individuals who, as of the beginning of such two-year period, constitute the Board (the "Incumbent Board") cease for any reason to constitute at least a majority of the Board; provided, however, that for purposes of this definition, any individual who becomes a member of the Board subsequent to the beginning of the two-year period, whose election, or nomination for election by the Company's stockholders, was approved by a vote of at least two-thirds of those individuals who are members of the Board and who were also members of the Incumbent Board (or deemed to be such pursuant to this proviso) shall be considered as though such individual were a member of the Incumbent Board; and provided further, however, that any such individual whose initial assumption of office occurs as a result of or in connection with an actual or threatened solicitation of proxies or consents by or on behalf of an Entity other than the Board shall not be considered a member of the Incumbent Board.

 

"Change in Control Exercise Period" has the meaning set forth in Section 15.3.3.

 

"Code" means the U. S. Internal Revenue Code of 1986, as amended from time to time.

 

"Committee" has the meaning set forth in Section 3.2.

 

"Common Stock" means the common stock, par value $0.0001 per share, of the Company.

 

"Company" means CAI International, Inc., a Delaware corporation.

"Company Transaction," unless otherwise defined in the instrument evidencing the Award or in a written employment, services or other agreement between the Participant and the Company or a Related Company, means consummation of:

 

(a)            a merger or consolidation of the Company with or into any other company or other entity;

 

(b)            a sale in one transaction or a series of transactions undertaken with a common purpose of all of the Company's outstanding voting securities; or

 

(c)            a sale, lease, exchange or other transfer in one transaction or a series of related transactions undertaken with a common purpose of all or substantially all of the Company's assets.

 

Where a series of transactions undertaken with a common purpose is deemed to be a Company Transaction, the date of such Company Transaction shall be the date on which the last of such transactions is consummated.

 

"Compensation Committee" means the Compensation Committee of the Board.

 

"Covered Employee" means a "covered employee" as that term is defined for purposes of Section 162(m)(3) of the Code or any successor provision.

 

"Disability," unless otherwise defined by the Committee or in the instrument evidencing the Award or in a written employment, services or other agreement between the Participant and the Company or a Related Company, means a mental or physical impairment of the Participant that is expected to result in death or that has lasted or is expected to last for a continuous period of 12 months or more and that causes the Participant to be unable to perform his or her material duties for the Company or a Related Company and to be engaged in any substantial gainful activity, in each case as determined by the Company's chief human resources officer or other person performing that function or, in the case of directors and executive officers, the Compensation Committee, whose determination shall be conclusive and binding.

 

"Effective Date" has the meaning set forth in Section 19.

 

"Eligible Person" means any person eligible to receive an Award as set forth in Section 5.

 

"Entity" means any individual, entity or group (within the meaning of Section 13(d)(3) of the Exchange Act).

 

"Exchange Act" means the U.S. Securities Exchange Act of 1934, as amended from time to time.

 

"Fair Market Value" means the closing price for the Common Stock on any given date during regular session trading on the New York Stock Exchange, or if not trading on that date, such price on the last preceding date on which the Common Stock was traded, unless determined otherwise by the Committee using such methods or procedures as it may establish.  In the absence of an established market for the Common Stock, Fair Market Value shall be determined in good faith by the Committee.  Notwithstanding the preceding, for federal, state, and local income tax withholding and reporting purposes and for such other purposes as the Committee deems appropriate, Fair Market Value shall be determined by the Committee in accordance with uniform and nondiscriminatory standards adopted by it from time to time.

 

"Grant Date" means the later of (a) the date on which the Committee completes the corporate action authorizing the grant of an Award or such later date specified by the Committee and (b) the date on which all conditions precedent to an Award have been satisfied, provided that conditions to the exercisability or vesting of Awards shall not defer the Grant Date.

 

"Incentive Stock Option" means an Option granted with the intention that it qualify as an "incentive stock option" as that term is defined for purposes of Section 422 of the Code or any successor provision.

 

"Nonqualified Stock Option" means an Option other than an Incentive Stock Option.

"Option" means a right to purchase Common Stock granted under Section 7.

 

"Option Expiration Date" means the last day of the maximum term of an Option.

 

"Parent Company" means a company or other entity which as a result of a Company Transaction owns the Company or all or substantially all of the Company's assets either directly or through one or more subsidiaries.

 

"Participant" means any Eligible Person to whom an Award is granted.

 

"Performance Award" means an Award of Performance Shares or Performance Units granted under Section 11.

 

"Performance Criteria" has the meaning set forth in Section 16.2.

 

"Performance Period" means the period of time during which the Performance Criteria must be met in order to determine the degree of payout and/or vesting with respect to an Award.  The Compensation Committee may establish different Performance Periods for different Participants, and the Compensation Committee may establish concurrent or overlapping Performance Periods.

 

"Performance Share" means an Award of units denominated in shares of Common Stock granted under Section 11.1.

 

"Performance Unit" means an Award of units denominated in cash or property other than shares of Common Stock granted under Section 11.2.

 

"Plan" means Container Applications International, Inc. 2007 Equity Incentive Plan, as amended from time to time.

 

''Related Company" means any entity that is directly or indirectly controlled by, in control of or under common control with the Company.

 

"Related Party Transaction" means a Company Transaction pursuant to which:

 

(a)            the Entities who are the beneficial owners of the Outstanding Company Common Stock and Outstanding Company Voting Securities immediately prior to such Company Transaction will beneficially own, directly or indirectly, more than 50% of the outstanding shares of common stock, and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors of the Successor Company in substantially the same proportions as their ownership, immediately prior to such Company Transaction, of the Outstanding Company Common Stock and Outstanding Company Voting Securities;

 

(b)            no Entity (other than the Company, any employee benefit plan (or related trust) of the Company or a Related Company, the Successor Company or, if reference was made to equity ownership of any Parent Company for purposes of determining whether clause (a) above is satisfied in connection with the applicable Company Transaction, such Parent Company) will beneficially own, directly or indirectly, more than 50% of, respectively, the outstanding shares of common stock of the Successor Company or the combined voting power of the outstanding voting securities of the Successor Company entitled to vote generally in the election of directors unless such ownership resulted solely from ownership of securities of the Company prior to the Company Transaction; and

 

(c)            individuals who were members of the Incumbent Board will immediately after the consummation of the Company Transaction constitute at least a majority of the members of the board of directors of the Successor Company (or, if reference was made to equity ownership of any Parent Company for purposes of determining whether clause (a) above is satisfied in connection with the applicable Company Transaction, of the Parent Company).

 

"Restricted Stock" means an Award of shares of Common Stock granted under Section 10, the rights of ownership of which are subject to restrictions prescribed by the Committee.

 "Retirement," unless otherwise defined in the instrument evidencing the Award or in a written employment, services or other agreement between the Participant and the Company or a Related Company, means "Retirement" as defined for purposes of the Plan by the Committee or the Company's chief human resources officer or other person performing that function or, if not so defined, means Termination of Service on or after the date the Participant reaches "normal retirement age," as that term is defined in Section 411(a)(8) of the Code.

 

"Section 162(m)" means Section 162(m) of the Code, including any proposed and final regulations and other guidance issued thereunder by the Department of the Treasury and/or the Internal Revenue Service.

 

"Section 409A" means Section 409A of the Code, including any proposed and final regulations and other guidance issued thereunder by the Department of the Treasury and/or the Internal Revenue Service.

 

"Securities Act" means the U.S. Securities Act of 1933, as amended from time to time.

 

"Stock Appreciation Right" or "SAR" means a right granted under Section 9.1 to receive the excess of the Fair Market Value of a specified number of shares of Common Stock over the grant price.

 

"Stock Award" means an Award of shares of Common Stock granted under Section 10, the rights of ownership of which are not subject to restrictions prescribed by the Committee.

 

"Stock Unit" means an Award denominated in units of Common Stock granted under Section 10.

 

"Substitute Awards" means Awards granted or shares of Common Stock issued by the Company in substitution or exchange for awards previously granted by an Acquired Entity.

 

"Successor Company" means the surviving company, the successor company or Parent Company, as applicable, in connection with a Company Transaction.

 

"Termination of Service," unless otherwise defined in the instrument evidencing the Award or in a written employment, services or other agreement between the Participant and the Company or a Related Company means a termination of employment or service relationship with the Company or a Related Company for any reason, whether voluntary or involuntary, including by reason of death, Disability or Retirement.  Any question as to whether and when there has been a Termination of Service for the purposes of an Award and the cause of such Termination of Service shall be determined by the Company's chief human resources officer or other person performing that function or, with respect to directors and executive officers subject to the reporting requirements of Section 16(a) of the Exchange Act, by the Compensation Committee, whose determination shall be conclusive and binding.  Transfer of a Participant's employment or service relationship between the Company and any Related Company shall not be considered a Termination of Service for purposes of an Award.  Unless the Compensation Committee determines otherwise, a Termination of Service shall be deemed to occur if the Participant's employment or service relationship is with an entity that has ceased to be a Related Company.  A Participant's change in status from an employee of the Company or a Related Company to a non-employee director, consultant, advisor, or independent contractor of the Company or a Related Company or a change in status from a non-employee director, consultant, advisor or independent contractor of the Company or a Related Company to an employee of the Company or a Related Company, shall not be considered a Termination of Service.

 

"Vesting Commencement Date" means the Grant Date or such other date selected by the Committee as the date from which an Award begins to vest.Exhibit 10.1

 

Execution Version

 

THIRD LETTER AMENDMENT

TO NOTE PURCHASE AND PRIVATE SHELF AGREEMENT

 

June 3, 2015

 

The Prudential Insurance Company

of America and each other Holder (defined below)

c/o Prudential Capital Group

2200 Ross Avenue, Suite 4300

Dallas, Texas 75201

 

Ladies and Gentlemen:

 

We refer to the Note Purchase and Private Shelf Agreement, dated as of December 28, 2012 (as amended by (i) the Letter Amendment and Waiver to Note Purchase and Private Shelf Agreement, dated as of April 30, 2013, and (ii) the Second Letter Amendment and Waiver to Note Purchase and Private Shelf Agreement, dated as of August 25, 2014, the “Existing Agreement” and, as the same shall be further amended hereby, the “Agreement”), among Primoris Services Corporation, a Delaware corporation (the “Company”), Prudential Investment Management, Inc. and the purchasers party thereto (collectively, together with each other holder from time to time of the Notes (as defined therein), the “Holders”).  Unless otherwise defined herein, the terms defined in the Existing Agreement shall be used herein as therein defined.

 

The Company has requested that certain of the terms and provisions contained in the Existing Agreement be amended to, among other things as set forth herein, (a) increase the aggregate principal amount of Shelf Notes made available to the Company and (b) extend the Issuance Period of the Shelf Notes, and the Company and the Holders have agreed to such amendments, all under the terms and conditions set forth in this Third Letter Amendment to Note Purchase and Private Shelf Agreement (this “Amendment”).

 

Therefore, for good and valuable consideration, it is hereby agreed by you and us as follows:

 

1.                                      Amendments to the Existing Agreement.  Subject to satisfaction of the conditions set forth in Section 2 hereof, the Holders hereby agree with the Company to amend, effective on and as of the date first written above, the Existing Agreement as follows:

 

(a)                                 The Cover Page of the Existing Agreement is hereby amended by deleting and replacing the reference to “$25,000,000” with “$100,000,000”.

 

(b)                                 Section 1.2 of the Existing Agreement is hereby amended by deleting and replacing the reference to “$25,000,000” with “$100,000,000 (such that, after giving effect to the Series B Notes, the amount of Shelf Notes available to be issued by the Company is $75,000,000)”.

 

 

(c)                              Section 2.2(b) of the Existing Agreement is hereby amended by deleting clause (i) appearing therein in its entirety and inserting the following new clause (i) in lieu thereof:

 

“(i)                               the third anniversary of the Third Amendment Effective Date (or if such anniversary date is not a Business Day, the Business Day next preceding such anniversary) and”

 

(d)                                 Schedule B to the Existing Agreement is hereby amended by inserting the following new definitions in their appropriate alphabetical order:

 

“Series B Notes” means the 3.85% Senior Secured Notes, Series B, due July 25, 2023, issued by the Company in the aggregate principal amount of $25,000,000 on July 25, 2013.

 

“Third Amendment” means the Third Letter Amendment to Note Purchase and Private Shelf Agreement dated as of the Third Amendment Effective Date, by and among the Company, the Guarantors and each holder of a Note on the date thereof.

 

“Third Amendment Effective Date” means June 3, 2015.

 

(e)                                  The Schedules to the Existing Agreement (other than Schedule A and Schedule B) are hereby amended and restated in their entirety as set forth in Exhibit A attached to this Amendment.

 

2.                                      Effectiveness.  The amendments to the Existing Agreement set forth in Section 1 hereof shall become effective on and as of the date first written above, subject to the following:

 

(a)                                 receipt by the Holders, in form and substance satisfactory to the Required Holders, of this Amendment, duly executed and delivered by each of the parties hereto;

 

(b)                                 receipt by the Holders, in form and substance satisfactory to the Required Holders, of evidence that the representations and warranties of the Company made in Section 3 of this Amendment are true and correct on and as of the date first written above;

 

(c)                                  receipt by the Holders, in form and substance satisfactory to the Required Holders, of the Amendment No. 1 to Guaranty Agreement dated as of the date hereof (the “Amendment to Guaranty Agreement”), duly executed and delivered by each of the parties thereto; and

 

(e)                                  receipt by Prudential in immediately available funds of a structuring fee of $15,000.

 

3.                                      Representations and Warranties.  In order to induce the Holders to enter into this Amendment, the Company hereby represents and warrants as follows:

 

2

 

(a)                                 In connection with this Amendment and all other documents delivered in connection herewith, each Note Party (i) has the requisite power and authority to make, deliver and perform the same, (ii) has taken all necessary corporate or other action to authorize its execution, delivery and performance of the same, and (iii) has duly executed and delivered the same.

 

(b)                                 After giving effect to this Amendment, the representations and warranties contained in Section 5 of the Agreement and Section 9 of the Guaranty Agreement, as amended by the Amendment to Guaranty Agreement (the “Amended Guaranty Agreement”), are true and correct in all material respects (except for those representations and warranties qualified by “materiality,” “Material Adverse Effect” or a like qualification, which shall be true and correct in all respects) on and as of the date first written above with the same effect as though made on and as of the date first written above, except to the extent that such representations and warranties relate to a specific date (in which case such representations and warranties were true and correct in all material respects (except for those representations and warranties qualified by “materiality,” “Material Adverse Effect” or a like qualification, which were true and correct in all respects) as of such specified date).

 

(c)                                  Except to the extent waived herein, no Default or Event of Default exists under any of the Note Documents (both immediately before and after giving effect to this Amendment) or will result from the making of this Amendment.

 

4.                                      Miscellaneous.

 

(a)                                 Upon and after the date first written above, each reference to the Existing Agreement in the Existing Agreement, each Note and the other Note Documents shall mean and be a reference to the Existing Agreement as amended by this Amendment.

 

(b)                                 Except as specifically amended herein, the Existing Agreement shall remain in full force and effect, and is hereby ratified and confirmed.

 

(c)                                  This Amendment is a Note Document and all of the provisions of the Agreement which apply to Note Documents apply hereto.

 

(d)                                 The Company confirms its agreement, pursuant to Section 15.1 of the Agreement, to pay promptly all reasonable expenses of the Holders related to this Amendment and all matters contemplated hereby, including, without limitation, all reasonable fees and expenses of the Holders’ counsel.

 

(e)                                  Except as expressly provided herein, the execution, delivery and effectiveness of this Amendment shall not operate as a waiver of any right, power or remedy of any Holder, nor constitute a waiver of any provision of the Existing Agreement, any other Note Document or any other document, instrument or agreement executed and delivered in connection with any of the foregoing.

 

3

 

(f)                                   THIS AMENDMENT SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, AND THE RIGHTS OF THE PARTIES SHALL BE GOVERNED BY, THE LAW OF THE STATE OF NEW YORK.

 

(g)                                  This Amendment may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed and delivered shall be deemed an original, but all such counterparts together shall constitute but one and the same instrument.  Each counterpart may consist of a number of copies hereof, each signed by less than all, but together signed by all, the parties hereto.  Delivery of this Amendment may be made by telecopy or electronic transmission of a duly executed counterpart copy hereof; provided that any such delivery by electronic transmission shall be effective only if transmitted in .pdf format, .tif format or other format in which the text is not readily modifiable by any recipient thereof.

 

(h)                                 Each of the Guarantors consents to the execution and delivery of this Amendment by the parties hereto and the $75,000,000 increase in the aggregate principal amount of Shelf Notes available to be issued by the Company after the date hereof.  As a material inducement to the undersigned to enter into this Amendment, each of the Guarantors (i) acknowledges and confirms the continuing existence, validity and effectiveness of the Amended Guaranty Agreement (and the applicability of each Guarantor’s guaranty of the Guaranteed Obligations (as defined in the Amended Guaranty Agreement), such guaranty to include, without limitation, any amounts which may become due under any Shelf Notes issued after the date hereof) and each of the other Note Documents to which it is a party, and (ii) agrees that the execution, delivery and performance of this Amendment and the Amendment to Guaranty Agreement shall not in any way release, diminish, impair, reduce or otherwise affect its obligations thereunder.

 

If you agree to the terms and provisions hereof, please evidence your agreement by executing and returning at least a counterpart of this Amendment to the Company at 2100 McKinney Ave., Suite 1500, Dallas, Texas 75201.

 

[Remainder of Page Intentionally Left Blank]

 

4

 

	
 
    	
Very truly yours,
    
	
 
    	
 
    
	
 
    	
PRIMORIS SERVICES CORPORATION
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ John M. Perisich
    
	
 
    	
Name: John M. Perisich
    
	
 
    	
Title: EVP/General Counsel
    

 

SIGNATURE PAGE TO

THIRD LETTER AMENDMENT TO

NOTE PURCHASE AND PRIVATE SHELF AGREEMENT

 

 

Agreed to and acknowledged by the undersigned solely with respect to Section 4(h) hereof:

 

	
ONQUEST HEATERS, INC.
    	
 
    	
ARB, INC.
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
By:
    	
/s/ John M.   Perisich
    	
 
    	
By:
    	
/s/ John M.   Perisich
    
	
Name:
    	
John M. Perisich
    	
 
    	
Name:
    	
John M. Perisich
    
	
Title:
    	
EVP/General   Counsel
    	
 
    	
Title:
    	
EVP/General   Counsel
    
	
 
    	
 
    	
 
    
	
FORCE SPECIALTY   SERVICES, INC.
    	
 
    	
ARB STRUCTURES, INC.
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
By:
    	
/s/ John M.   Perisich
    	
 
    	
By:
    	
/s/ John M.   Perisich
    
	
Name:
    	
John M. Perisich
    	
 
    	
Name:
    	
John M. Perisich
    
	
Title:
    	
EVP/General   Counsel
    	
 
    	
Title:
    	
EVP/General   Counsel
    
	
 
    	
 
    	
 
    
	
ALASKA CONTINENTAL   PIPELINE, INC.
    	
 
    	
CARDINAL   CONTRACTORS, INC.
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
By:
    	
/s/ John M.   Perisich
    	
 
    	
By:
    	
/s/ John M.   Perisich
    
	
Name:
    	
John M. Perisich
    	
 
    	
Name:
    	
John M. Perisich
    
	
Title:
    	
EVP/General   Counsel
    	
 
    	
Title:
    	
EVP/General   Counsel
    
	
 
    	
 
    	
 
    
	
JUNIPER ROCK CORPORATION
    	
 
    	
BTEX MATERIALS, LLC
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
By:
    	
/s/ John M.   Perisich
    	
 
    	
By:
    	
/s/ John M.   Perisich
    
	
Name:
    	
John M. Perisich
    	
 
    	
Name:
    	
John M. Perisich
    
	
Title:
    	
EVP/General   Counsel
    	
 
    	
Title:
    	
EVP/General   Counsel
    
	
 
    	
 
    	
 
    
	
ONQUEST, INC.
    	
 
    	
MILLER SPRINGS MATERIALS,   L.L.C.
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
By:
    	
/s/ John M.   Perisich
    	
 
    	
By:
    	
/s/ John M.   Perisich
    
	
Name:
    	
John M. Perisich
    	
 
    	
Name:
    	
John M. Perisich
    
	
Title:
    	
EVP/General   Counsel
    	
 
    	
Title:
    	
EVP/General   Counsel
    
	
 
    	
 
    	
 
    
	
STELLARIS LLC
    	
 
    	
GML COATINGS, LLC
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
By:
    	
/s/ John M.   Perisich
    	
 
    	
By:
    	
/s/ John M.   Perisich
    
	
Name:
    	
John M. Perisich
    	
 
    	
Name:
    	
John M. Perisich
    
	
Title:
    	
EVP/General   Counsel
    	
 
    	
Title:
    	
EVP/General   Counsel
    
	
 
    	
 
    	
 
    
	
JAMES CONSTRUCTION GROUP,   L.L.C.
    	
 
    	
SAXON   CONSTRUCTION, INC.
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
By:
    	
/s/ John M.   Perisich
    	
 
    	
By:
    	
/s/ John M.   Perisich
    
	
Name:
    	
John M. Perisich
    	
 
    	
Name:
    	
John M. Perisich
    
	
Title:
    	
EVP/General   Counsel
    	
 
    	
Title:
    	
EVP/General   Counsel
    
	
 
    	
 
    	
 
    
	
ROCKFORD CORPORATION
    	
 
    	
Q3 CONTRACTING, INC.
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
By:
    	
/s/ John M.   Perisich
    	
 
    	
By:
    	
/s/ John M. Perisich
    
	
Name:
    	
John M. Perisich
    	
 
    	
Name:
    	
John M. Perisich
    
	
Title:
    	
EVP/General   Counsel
    	
 
    	
Title:
    	
EVP/General   Counsel
    
	
 
    	
 
    	
 
    
	
PRIMORIS ENERGY SERVICES   CORPORATION
    	
 
    	
VADNAIS TRENCHLESS   SERVICES, INC.
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
By:
    	
/s/ John M.   Perisich
    	
 
    	
By:
    	
/s/ John M.   Perisich
    
	
Name:
    	
John M. Perisich
    	
 
    	
Name:
    	
John M. Perisich
    
	
Title:
    	
EVP/General   Counsel
    	
 
    	
Title:
    	
EVP/General   Counsel
    
	
 
    	
 
    	
 
    
	
PRIMORIS AV, ENERGY AND   ELECTRICAL
    	
 
    	
 
    
	
CONSTRUCTION CORPORATION
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
By:
    	
/s/ John M.   Perisich
    	
 
    	
 
    
	
Name:
    	
John M. Perisich
    	
 
    	
 
    
	
Title:
    	
EVP/General   Counsel
    	
 
    	
 
    

 

SIGNATURE PAGE TO

THIRD LETTER AMENDMENT TO

NOTE PURCHASE AND PRIVATE SHELF AGREEMENT

 

 

Agreed as of the date first written above:

 

 

	
 
    	
PRUDENTIAL INVESTMENT   MANAGEMENT, INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Tim Laczkowski
    
	
 
    	
 
    	
Tim Laczkowski
    
	
 
    	
 
    	
Senior Vice President
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
THE PRUDENTIAL INSURANCE   COMPANY
    
	
 
    	
OF AMERICA
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Tim Laczkowski
    
	
 
    	
 
    	
Tim Laczkowski
    
	
 
    	
 
    	
Senior Vice President
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
PHYSICIANS MUTUAL   INSURANCE COMPANY
    
	
 
    	
 
    
	
 
    	
By:
    	
Prudential Private Placement   Investors,
    
	
 
    	
 
    	
L.P. (as Investment   Advisor)
    
	
 
    	
 
    
	
 
    	
By:
    	
Prudential Private   Placement Investors, Inc.
    
	
 
    	
 
    	
(as its General Partner)
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    	
By:
    	
/s/ Tim Laczkowski
    
	
 
    	
 
    	
Tim Laczkowski
    
	
 
    	
 
    	
Senior Vice President
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
GLOBE LIFE AND ACCIDENT INSURANCE
    
	
 
    	
COMPANY
    
	
 
    	
 
    
	
 
    	
By:
    	
Prudential Private   Placement Investors,
    
	
 
    	
 
    	
L.P. (as Investment   Advisor)
    
	
 
    	
 
    
	
 
    	
By:
    	
Prudential Private   Placement Investors, Inc.
    
	
 
    	
 
    	
(as its General Partner)
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    	
By:
    	
/s/ Tim Laczkowski
    
	
 
    	
 
    	
Tim Laczkowski
    
	
 
    	
 
    	
Senior Vice President
    
						

 

SIGNATURE PAGE TO

THIRD LETTER AMENDMENT TO

NOTE PURCHASE AND PRIVATE SHELF AGREEMENT

 

 

	
 
    	
PRUDENTIAL ANNUITIES   LIFE ASSURANCE
    
	
 
    	
CORPORATION
    
	
 
    	
 
    
	
 
    	
By:
    	
Prudential Investment   Management, Inc.,
    
	
 
    	
 
    	
as investment manager
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    	
By:
    	
/s/ Tim Laczkowski
    
	
 
    	
 
    	
Tim Laczkowski
    
	
 
    	
 
    	
Senior Vice President
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
FARMERS INSURANCE   EXCHANGE
    
	
 
    	
 
    
	
 
    	
By:
    	
Prudential Private   Placement Investors,
    
	
 
    	
 
    	
L.P. (as Investment   Advisor)
    
	
 
    	
 
    
	
 
    	
By:
    	
Prudential Private   Placement Investors, Inc.
    
	
 
    	
 
    	
(as its General Partner)
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    	
By:
    	
/s/ Tim Laczkowski
    
	
 
    	
 
    	
Tim Laczkowski
    
	
 
    	
 
    	
Senior Vice President
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
MID CENTURY INSURANCE   COMPANY
    
	
 
    	
 
    
	
 
    	
By:
    	
Prudential Private   Placement Investors,
    
	
 
    	
 
    	
L.P. (as Investment   Advisor)
    
	
 
    	
 
    
	
 
    	
By:
    	
Prudential Private   Placement Investors, Inc.
    
	
 
    	
 
    	
(as its General Partner)
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    	
By:
    	
/s/ Tim Laczkowski
    
	
 
    	
 
    	
Tim Laczkowski
    
	
 
    	
 
    	
Senior Vice President
    
					

 

SIGNATURE PAGE TO

THIRD LETTER AMENDMENT TO

NOTE PURCHASE AND PRIVATE SHELF AGREEMENT

 

 

EXHIBIT A

 

Schedules to the Agreement

 

INFORMATION SCHEDULE

 

Authorized Officers for Prudential

(see Series A Purchaser Schedules below and the applicable Confirmation of Acceptance for any Shelf Note)

 

Authorized Officers for the Company

 

Pete Moerbeek

 

John Perisich

 

 

AMENDMENT NO. 1 TO GUARANTY AGREEMENT

 

This AMENDMENT NO. 1 TO GUARANTY AGREEMENT (this “Amendment”) is entered into as of June 3, 2015, by and among each of the undersigned listed under the caption “GUARANTORS” on the signature pages hereto (the “Guarantors”) and each of the undersigned Noteholders (as defined below).

 

BACKGROUND

 

WHEREAS, Primoris Services Corporation, a Delaware corporation (the “Company”), has entered into the Note Purchase and Private Shelf Agreement, dated as of December 28, 2012 (as amended by (i) the Letter Amendment and Waiver to Note Purchase and Private Shelf Agreement, dated as of April 30, 2013, and (ii) the Second Letter Amendment and Waiver to Note Purchase and Private Shelf Agreement, dated as of August 25, 2014, the “Existing Agreement”;  capitalized terms used but not defined herein shall be used herein as therein defined), with Prudential Investment Management, Inc. and the purchasers party thereto (collectively, together with each other holder from time to time of the Notes (as defined therein), the “Noteholders”);

 

WHEREAS, the Company and the Noteholders are entering into the Third Letter Amendment to Note Purchase and Private Shelf Agreement, dated as of the date hereof (the “Third Amendment” and, the Existing Agreement, as amended by the Third Amendment and as further amended, restated, supplemented or otherwise modified from time to time, the “Agreement”), pursuant to which the Company and the Noteholders agreed to amend the Existing Agreement to, among other things as set forth therein, (a) increase the aggregate principal amount of Shelf Notes made available to the Company and (b) extend the Issuance Period of the Shelf Notes;

 

WHEREAS, the Guarantors have entered into the Guaranty Agreement, dated as of December 28, 2012 (as amended or supplemented to date, the “Guaranty Agreement”), in favor of the Noteholders, pursuant to which the Guarantors guaranteed certain obligations of the Company under the Agreement;

 

WHEREAS, as a condition precedent to the effectiveness of the Third Amendment, the Guarantors are required to amend the Guaranty Agreement as set forth herein by executing and delivering this Amendment on the terms and conditions set forth herein;

 

WHEREAS, the Noteholders are willing to agree to such amendment, subject to the performance and observance in full of each of the terms and conditions, and in reliance upon all of the representations and warranties of the Guarantors, set forth herein;

 

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

 

1.                                      Amendments to the Guaranty Agreement.  Subject to the terms and conditions set forth herein, and in reliance upon the representations and warranties of the Guarantors contained herein, the Guaranty Agreement is hereby amended, effective as of the date hereof, as follows:

 

 

(a)                                 Amendment to Section I of the Preliminary Statements: Section I of the Preliminary Statements of the Guaranty Agreement is hereby deleted and amended in its entirety to read as follows:

 

“I.                                  PRIMORIS SERVICES CORPORATION, a Delaware corporation (the “Company”), has entered into a Note Purchase and Private Shelf Agreement dated as of the date hereof, as amended by (i) the Letter Amendment and Waiver to Note Purchase and Private Shelf Agreement, dated as of April 30, 2013, (ii) the Second Letter Amendment and Waiver to Note Purchase and Private Shelf Agreement, dated as of August 25, 2014, and (iii) the Third Letter Amendment to Note Purchase and Private Shelf Agreement, dated as of June 3, 2015 (as the same may be further amended, restated, supplemented or otherwise modified from time to time (including, without limitation, any increases in the amount of Shelf Notes that can be issued thereunder), the “Note Agreement”), with Prudential Investment Management, Inc. and the other Persons listed on the signature pages thereto (the “Purchasers”).  Capitalized terms used herein have the meanings specified in the Note Agreement unless otherwise defined herein.”

 

2.                                      Conditions of Effectiveness.  This Amendment shall become effective on the date hereof upon the Noteholders having received duly executed counterparts of this Amendment, duly authorized and delivered by the Guarantors.

 

3.                                      Representations and Warranties.  Each of the Guarantors hereby represents and warrants as follows to each Noteholder, on and as of the date hereof:

 

(a)                                 In connection with this Amendment and all other documents delivered in connection herewith, each Guarantor (i) has the requisite power and authority to make, deliver and perform the same, (ii) has taken all necessary corporate or other action to authorize its execution, delivery and performance of the same, and (iii) has duly executed and delivered the same.

 

(b)                                 This Amendment and the Guaranty Agreement, as amended hereby, constitute legal, valid and binding obligations of each of the Guarantors and are enforceable against each of the Guarantors in accordance with their respective terms, except as such enforceability may be limited by (i) applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws relating to or affecting creditors’ rights generally and (ii) general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law).

 

(c)                                  After giving effect to this Amendment, the representations and warranties contained in Section 9 of the Guaranty Agreement are true and correct in all material respects (except for those representations and warranties qualified by “materiality,” “Material Adverse Effect” or a like qualification, which shall be true and correct in all respects) on and as of the date first written above with the same effect as though made on and as of the date first written above, except to the extent that such representations and warranties relate to a specific date (in

 

2

 

which case such representations and warranties were true and correct in all material respects (except for those representations and warranties qualified by “materiality,” “Material Adverse Effect” or a like qualification, which were true and correct in all respects) as of such specified date).

 

(d)                                 No Default or Event of Default exists under any of the Note Documents (both immediately before and after giving effect to this Amendment) or will result from the making of this Amendment.

 

4.                                      Effect on the Guaranty Agreement.  (a)  Upon the effectiveness of this Amendment, each reference in the Guaranty Agreement to “this Guaranty Agreement”, “hereunder”, “hereof”, “herein” or words of like import shall mean and be a reference to the Guaranty Agreement as amended hereby.

 

(b)                                 Except as specifically amended herein, the Guaranty Agreement and all other documents, instruments and agreements executed and/or delivered in connection therewith, shall remain in full force and effect, and are hereby ratified and confirmed.

 

(c)                                  The execution, delivery and effectiveness of this Amendment shall not operate as a waiver of any right, power or remedy of any Noteholder, nor constitute a waiver of any provision of the Guaranty Agreement except as and to the extent herein provided, or any other documents, instruments or agreements executed and/or delivered under or in connection therewith.

 

5.                                      Governing Law.  This Amendment shall be construed and enforced in accordance with, and the rights of the parties shall be governed by, the law of the State of New York excluding choice-of-law principles of the law of such State that would permit the application of the laws of a jurisdiction other than such State.

 

6.                                      Note Document.  This Amendment is a Note Document and all of the provisions of the Agreement which apply to Note Documents apply hereto.

 

7.                                      Headings.  Section headings in this Amendment are included herein for convenience of reference only and shall not constitute a part of this Amendment for any other purpose.

 

8.                                      Counterparts; Facsimile.  This Amendment may be executed by the parties hereto in one or more counterparts, each of which shall be deemed an original and all of which when taken together shall constitute one and the same agreement.  Any signature delivered by a party by facsimile transmission or electronically (via “.pdf” or similar format) shall be deemed to be an original signature hereto.

 

[Remainder of Page Intentionally Left Blank; Signature Page Follows]

 

3

 

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed and delivered by their proper and duly authorized officers effective as of the date above.

 

GUARANTORS:

 

	
ONQUEST HEATERS, INC.
    	
 
    	
ARB, INC.
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
By:
    	
/s/ John M.   Perisich
    	
 
    	
By:
    	
/s/ John M.   Perisich
    
	
Name:
    	
John M. Perisich
    	
 
    	
Name:
    	
John M. Perisich
    
	
Title:
    	
EVP/General   Counsel
    	
 
    	
Title:
    	
EVP/General   Counsel
    
	
 
    	
 
    	
 
    
	
FORCE SPECIALTY   SERVICES, INC.
    	
 
    	
ARB STRUCTURES, INC.
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
By:
    	
/s/ John M.   Perisich
    	
 
    	
By:
    	
/s/ John M.   Perisich
    
	
Name:
    	
John M. Perisich
    	
 
    	
Name:
    	
John M. Perisich
    
	
Title:
    	
EVP/General   Counsel
    	
 
    	
Title:
    	
EVP/General   Counsel
    
	
 
    	
 
    	
 
    
	
ALASKA CONTINENTAL   PIPELINE, INC.
    	
 
    	
CARDINAL   CONTRACTORS, INC.
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
By:
    	
/s/ John M.   Perisich
    	
 
    	
By:
    	
/s/ John M.   Perisich
    
	
Name:
    	
John M. Perisich
    	
 
    	
Name:
    	
John M. Perisich
    
	
Title:
    	
EVP/General   Counsel
    	
 
    	
Title:
    	
EVP/General   Counsel
    
	
 
    	
 
    	
 
    
	
JUNIPER ROCK CORPORATION
    	
 
    	
BTEX MATERIALS, LLC
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
By:
    	
/s/ John M.   Perisich
    	
 
    	
By:
    	
/s/ John M.   Perisich
    
	
Name:
    	
John M. Perisich
    	
 
    	
Name:
    	
John M. Perisich
    
	
Title:
    	
EVP/General   Counsel
    	
 
    	
Title:
    	
EVP/General   Counsel
    
	
 
    	
 
    	
 
    
	
ONQUEST, INC.
    	
 
    	
MILLER SPRINGS MATERIALS,   L.L.C.
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
By:
    	
/s/ John M.   Perisich
    	
 
    	
By:
    	
/s/ John M.   Perisich
    
	
Name:
    	
John M. Perisich
    	
 
    	
Name:
    	
John M. Perisich
    
	
Title:
    	
EVP/General   Counsel
    	
 
    	
Title:
    	
EVP/General   Counsel
    
	
 
    	
 
    	
 
    
	
STELLARIS LLC
    	
 
    	
GML COATINGS, LLC
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
By:
    	
/s/ John M.   Perisich
    	
 
    	
By:
    	
/s/ John M.   Perisich
    
	
Name:
    	
John M. Perisich
    	
 
    	
Name:
    	
John M. Perisich
    
	
Title:
    	
EVP/General   Counsel
    	
 
    	
Title:
    	
EVP/General   Counsel
    
	
 
    	
 
    	
 
    
	
JAMES CONSTRUCTION GROUP, L.L.C.
    	
 
    	
SAXON   CONSTRUCTION, INC.
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
By:
    	
/s/ John M.   Perisich
    	
 
    	
By:
    	
/s/ John M.   Perisich
    
	
Name:
    	
John M. Perisich
    	
 
    	
Name:
    	
John M. Perisich
    
	
Title:
    	
EVP/General   Counsel
    	
 
    	
Title:
    	
EVP/General   Counsel
    
	
 
    	
 
    	
 
    
	
ROCKFORD CORPORATION
    	
 
    	
Q3 CONTRACTING, INC.
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
By:
    	
/s/ John M.   Perisich
    	
 
    	
By:
    	
/s/ John M.   Perisich
    
	
Name:
    	
John M. Perisich
    	
 
    	
Name:
    	
John M. Perisich
    
	
Title:
    	
EVP/General   Counsel
    	
 
    	
Title:
    	
EVP/General   Counsel
    
	
 
    	
 
    	
 
    
	
PRIMORIS ENERGY SERVICES   CORPORATION
    	
 
    	
VADNAIS TRENCHLESS   SERVICES, INC.
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
By:
    	
/s/ John M. Perisich
    	
 
    	
By:
    	
/s/ John M.   Perisich
    
	
Name:
    	
John M. Perisich
    	
 
    	
Name:
    	
John M. Perisich
    
	
Title:
    	
EVP/General   Counsel
    	
 
    	
Title:
    	
EVP/General   Counsel
    
	
 
    	
 
    	
 
    
	
PRIMORIS AV, ENERGY AND   ELECTRICAL
    	
 
    	
 
    
	
CONSTRUCTION CORPORATION
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
By:
    	
/s/ John M.   Perisich
    	
 
    	
 
    
	
Name:
    	
John M. Perisich
    	
 
    	
 
    
	
Title:
    	
EVP/General   Counsel
    	
 
    	
 
    

 

AMENDMENT NO. 1 TO GUARANTY AGREEMENT

 

 

NOTEHOLDERS:

 

	
PRUDENTIAL INVESTMENT   MANAGEMENT, INC.
    
	
 
    
	
 
    
	
By:
    	
/s/ Tim Laczkowski
    	
 
    
	
 
    	
Tim Laczkowski
    
	
 
    	
Senior Vice President
    
	
 
    
	
 
    
	
THE PRUDENTIAL INSURANCE   COMPANY
    
	
OF AMERICA
    
	
 
    
	
 
    
	
By:
    	
/s/ Tim Laczkowski
    	
 
    
	
 
    	
Tim Laczkowski
    
	
 
    	
Senior Vice President
    
	
 
    
	
 
    
	
PHYSICIANS MUTUAL   INSURANCE COMPANY
    
	
 
    
	
By:
    	
Prudential Private   Placement Investors,
    
	
 
    	
L.P. (as Investment   Advisor)
    
	
 
    
	
By:
    	
Prudential Private   Placement Investors, Inc.
    
	
 
    	
(as its General Partner)
    
	
 
    
	
 
    
	
 
    	
By:
    	
/s/ Tim Laczkowski
    	
 
    
	
 
    	
Tim Laczkowski
    
	
 
    	
Senior Vice President
    
	
 
    
	
 
    
	
GLOBE LIFE AND ACCIDENT   INSURANCE
    
	
COMPANY
    
	
 
    
	
By:
    	
Prudential Private   Placement Investors,
    
	
 
    	
L.P. (as Investment   Advisor)
    
	
 
    
	
By:
    	
Prudential Private   Placement Investors, Inc.
    
	
 
    	
(as its General Partner)
    
	
 
    
	
 
    
	
 
    	
By:
    	
/s/ Tim Laczkowski
    	
 
    
	
 
    	
Tim Laczkowski
    
	
 
    	
Senior Vice President
    
							

 

AMENDMENT NO. 1 TO GUARANTY AGREEMENT

 

 

	
PRUDENTIAL ANNUITIES   LIFE ASSURANCE
    
	
CORPORATION
    
	
 
    
	
By:
    	
Prudential Investment   Management, Inc.,
    
	
 
    	
as investment manager
    
	
 
    
	
 
    
	
 
    	
By:
    	
/s/ Tim Laczkowski
    	
 
    
	
 
    	
Tim Laczkowski
    
	
 
    	
Senior Vice President
    
	
 
    
	
 
    
	
FARMERS INSURANCE   EXCHANGE
    
	
 
    
	
By:
    	
Prudential Private   Placement Investors,
    
	
 
    	
L.P. (as Investment   Advisor)
    
	
 
    
	
By:
    	
Prudential Private   Placement Investors, Inc.
    
	
 
    	
(as its General Partner)
    
	
 
    
	
 
    
	
 
    	
By:
    	
/s/ Tim Laczkowski
    	
 
    
	
 
    	
Tim Laczkowski
    
	
 
    	
Senior Vice President
    
	
 
    
	
 
    
	
MID CENTURY INSURANCE   COMPANY
    
	
 
    
	
By:
    	
Prudential Private   Placement Investors,
    
	
 
    	
L.P. (as Investment   Advisor)
    
	
 
    
	
By:
    	
Prudential Private   Placement Investors, Inc.
    
	
 
    	
(as its General Partner)
    
	
 
    
	
 
    
	
 
    	
By:
    	
/s/ Tim Laczkowski
    	
 
    
	
 
    	
Tim Laczkowski
    
	
 
    	
Senior Vice President
    
					

 

AMENDMENT NO. 1 TO GUARANTY AGREEMENT

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00246-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00246-of-00352.parquet"}]]