Document:

asmb-ex104_83.htm

 

EXHIBIT 10.4

 

ASSEMBLY BIOSCIENCES, INC.

2020 Inducement Award Plan

NOTICE OF STOCK OPTION GRANT

 

 

Grant Number   2020-IAP-###

___________________________

 

___________________________

 

 

You have been granted an option to purchase Common Stock of Assembly Biosciences, Inc. (the “Company”), as follows:

 

	
Date of Grant
	
[________]

	
 
	
 

	
Vesting Commencement Date
	
[_______]

	
 
	
 

	
Exercise Price per Share
	
$_____

	
 
	
 

	
Total Number of Shares Granted
	
______

	
 
	
 

	
Total Exercise Price
	
$_______

	
 
	
 

	
Type of Option:
	
Nonstatutory Stock Option

	
 
	
 

	
Term/Expiration Date:
	
10 years

	
 
	
 

	
Vesting Schedule:
	
[___] to vest on the first anniversary of the vesting commencement date; and thereafter [__] of remaining option shares to vest each month thereafter for [___] months; in each case subject to your Continuous Services through such vesting date and otherwise in accordance with the terms and conditions of the Plan (as defined below) and the Stock Option Agreement attached hereto. Shares to vest on any vesting date shall be rounded down to nearest whole number. Monthly installments shall take into effect prior rounding so that each monthly installment including the last installment is approximately the same. On the [____] anniversary of the vesting commencement date, assuming Continuous Service through each vesting date, the option shall be fully vested. Upon the termination of your employment by the Company for any reason other than for Cause within 6 months following the occurrence of a Corporate Transaction, all unvested options shall immediately vest.

	
 
	
 

	
 
	
[Notwithstanding the foregoing, this option shall be subject to additional provisions relating to the acceleration of vesting of time-based vesting equity awards as set forth in Section [XX] of your Employment Agreement executed on [DATE] and effective [DATE] (your “Employment Agreement”), including the condition that you execute a release in form and substance reasonably satisfactory to the Company in connection with your termination of employment.]1

	
 
	
 

	
	 

	
1 
	
 Add if Participant is an Executive officer.

 

 

	
 
	
[Notwithstanding the foregoing, this option shall be subject to additional provisions relating to acceleration of vesting of time-based vesting equity awards as set forth in the Non-Executive Officers Severance Benefit Plan (“Severance Plan”), if you incur a “Change in Control Termination” (as defined in the Severance Plan) and satisfy the requirements of the Severance Plan. For avoidance of doubt and notwithstanding anything in an employment offer letter to the contrary, this award 

and the Severance Plan reflect the sole agreement governing acceleration of vesting under this award upon a termination of continuous service.]2

	
 
	
 

	
Termination Period:
	
Vested option may be exercised for up to 90 days after termination of Continuous Service.  

	
 
	
 

	
 
	
By your signature or your electronic acceptance of this option and the signature of the Company’s representative below, you and the Company agree that this option is granted under and governed by the terms and conditions of the Assembly Biosciences, Inc. 2020 Inducement Award Plan (the “Plan”) and the Stock Option Agreement, both of which are attached and made a part of this document. Capitalized terms used in this Notice of Stock Option Grant and not otherwise defined herein shall have the meaning assigned to such term in the Plan.

 

 

	
Dated:
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
 

	
OPTIONEE:
	
 
	
ASSEMBLY BIOSCIENCES, INC.

	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
By:
	
 

	
[Name]
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
Name:
	
 

	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
Title:
	
 

 

 

 

 

	
	 

	
2 
	
 Add if Participant is a Non-executive officer (VP,SVP)

 

	
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ASSEMBLY BIOSCIENCES, INC.

 

STOCK OPTION AGREEMENT

 

 

1.Grant of Option.  Assembly Biosciences, Inc. (the “Company”), hereby grants to the Optionee named in the Notice of Stock Option Grant (the “Optionee”) an option (the “Option”) to purchase a total number of shares of Common Stock (the “Shares”) set forth in the Notice of Stock Option Grant, at the exercise price per share set forth in the Notice of Stock Option Grant (the “Exercise Price”) subject to the terms, definitions and provisions of the Assembly Biosciences, Inc. 2020 Inducement Award Plan (the “Plan”) adopted by the Company, which is incorporated herein by reference.  Unless otherwise defined herein, the terms defined in the Plan shall have the same defined meanings in this Option.  

 

2.Exercise of Option.  This Option shall be exercisable during its term in accordance with the Vesting Schedule set out in the Notice of Stock Option Grant and with the provisions of Sections 10 and 11 of the Plan as follows:

 

(a)Right to Exercise.

 

(i)This Option may not be exercised for a fraction of a share.

 

(ii)In no event may this Option be exercised after the date of expiration of the term of this Option as set forth in the Notice of Stock Option Grant.  

 

(b)Method of Exercise.  This Option shall be exercisable by written notice (in the form attached hereto as Exhibit A) which shall state the election to exercise this Option, the number of Shares in respect of which this Option is being exercised, and such other representations and agreements as to the holder's investment intent with respect to such shares of Common Stock as may be required by the Company pursuant to the provisions of the Plan.  Such written notice shall be signed by the Optionee and shall be delivered in person,  by certified mail or electronic transmission (with confirmation of receipt) to the Secretary of the Company.  The written notice shall be accompanied by payment of the Exercise Price.  This Option shall be deemed to be exercised upon receipt by the Company of such written notice accompanied by the Exercise Price. Alternatively, this Option may be exercised through the Company’s online equity platform and in compliance with the procedures set forth therein.

 

Notwithstanding anything to the contrary contained herein, you may not exercise your option unless the shares of Common Stock issuable upon such exercise are then registered under the Securities Act of 1933, as amended (the “Securities Act”), or, if such shares of Common Stock are not then so registered, the Company has determined that such exercise and issuance would be exempt from the registration requirements of the Securities Act. The exercise of your option also must comply with other applicable laws and regulations governing your option, and you may not exercise your option if the Company determines that such exercise would not be in material compliance with such laws and regulations.  No Shares will be issued pursuant to the exercise of this Option unless such issuance and such exercise shall comply with all relevant provisions of law and the requirements of any stock exchange upon which the Shares may then be listed.  Assuming such compliance, for income tax purposes the Shares shall be considered transferred to the Optionee on the date on which the Option is exercised with respect to such Shares.

 

	
 
	
1

 

 

 

3.Method of Payment.  Payment of the Exercise Price shall be by any of the following, or a combination thereof, at the election of the Optionee:  

(i)cash; or

 

(ii)check; or

 

(iii)surrender of other shares of Common Stock of the Company, or attestation of ownership of such shares, as described in Section 7(b)(iv) of the Plan; or 

 

(iv)“net exercise” as described in Section 7(b)(vi) of the Plan; or 

 

(v)a broker-assisted exercise as described in Section 7(b)(v) of the Plan; or

 

(vi)any combination of the foregoing methods of payment.

 

4.Nontransferability of Option.  This Option may not be transferred in any manner other than as set forth in the Plan.  The terms of this Option shall be binding upon the executors, administrators, heirs, successors transferees and assigns of the Optionee as if such persons were the Optionee.

 

5.Termination of Relationship.  In the event of termination of Optionee's Continuous Service with the Company, Optionee may, to the extent otherwise so entitled at the date of such termination (the “Termination Date”), exercise this Option during the Termination Period set out in the Notice of Stock Option Grant.  To the extent that the Optionee was not entitled to exercise this Option at the date of such termination, or if Optionee does not exercise this Option within the time specified herein, this Option shall terminate.

 

6.Term of Option.  This Option may be exercised only within the term set out in the Notice of Stock Option Grant and the Plan, and may be exercised during such term only in accordance with the Plan and the terms of this Option.  

 

7.Disability of Optionee.  Notwithstanding the provisions of Section 5 above, in the event of termination of Optionee’s Continuous Service as a result of Optionee’s Disability, Optionee may, but only within twelve (12) months from the date of termination of Continuous Service (but in no event later than the date of expiration of the term of this Option as set forth in the Notice of Stock Option Grant), exercise this Option to the extent Optionee was entitled to exercise it at the Termination Date.  To the extent that Optionee was not entitled to exercise this Option at the Termination Date, or if Optionee does not exercise such Option (which Optionee was entitled to exercise) within the time specified herein, this Option shall terminate.

 

8.Death of Optionee.    In the event of the death of the Optionee during the Optionee’s Continuous Service or within ninety (90) days of termination of such Continuous Service, this Option may be exercised at any time within twelve (12) months following the Termination Date (but in no event later than the date of expiration of the term of this Option as set forth in the Notice of Stock Option Grant), by Optionee’s estate or by a person who acquired the right to exercise this Option by bequest or inheritance, but only to the extent of the right to exercise that Optionee was entitled to at the date of death.

 

	
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9.Taxation Upon Exercise of Option.  Pursuant to Section 9 of the Plan, the Company may require the Optionee to pay to the Company amounts necessary to satisfy any applicable Company withholding obligations.  The Optionee shall satisfy Optionee’s tax withholding obligation arising upon the exercise of this Option by one or some combination of the following methods: (i) by cash payment, or (ii) out of Optionee's current compensation, or (iii) if permitted by the Board or Committee, in its discretion, by surrendering to the Company already-owned Shares or by directing the Company to withhold shares otherwise to be transferred to the Optionee, in each case in accordance with Section 9(b) of the Plan.  For this purpose, the fair market value of the Shares to be withheld shall be determined on the date that the amount of tax to be withheld is to be determined (the “Tax Date”).  

 

If the Optionee is subject to Section 16 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) (an “Insider”), any surrender of previously owned Shares to satisfy tax withholding obligations arising upon exercise of this Option must comply with the applicable provisions of Rule 16b‐3 promulgated under the Exchange Act (“Rule 16b-3”) and shall be subject to such additional conditions or restrictions as may be required thereunder to qualify for the maximum exemption from Section 16 of the Exchange Act with respect to Plan transactions.

 

All elections by an Optionee to have Shares withheld to satisfy tax-withholding obligations shall be made in writing in a form acceptable to the Committee and shall be subject to the following restrictions:

 

(1)the election must be made on or prior to the applicable Tax Date;

 

(2)once made, the election shall be irrevocable as to the particular Shares of this Option as to which the election is made;

 

(3)all elections shall be subject to the consent or disapproval of the Board or Committee;

 

(4)if the Optionee is an Insider, the election must comply with the applicable provisions of Rule 16b‐3 and shall be subject to such additional conditions or restrictions as may be required thereunder to qualify for the maximum exemption from Section 16 of the Exchange Act with respect to Plan transactions.

 

10.Tax Consequences.  Set forth below is a brief summary as of the date of this Option of some of the federal tax consequences of exercise of this Option and disposition of the Shares.  THIS SUMMARY IS NECESSARILY INCOMPLETE, AND THE TAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE.  OPTIONEE SHOULD CONSULT A TAX ADVISER BEFORE EXERCISING THIS OPTION OR DISPOSING OF THE SHARES.

 

(a)Exercise of Nonstatutory Stock Option.  There may be a regular federal income tax liability and a state income tax liability upon the exercise of this Option.  The Optionee will be treated as having received compensation income (taxable at ordinary income tax rates) equal to the excess, if any, of the fair market value of the Shares on the date of exercise over the Exercise Price and the Company will qualify for a deduction in the same amount, subject to the requirement that the compensation be reasonable.  If Optionee is an employee, the Company will be required to withhold from Optionee’s compensation or collect from Optionee and pay to the applicable taxing authorities an amount equal to a percentage of this compensation income at the time of exercise.

 

	
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(b)Disposition of Shares.  If Shares are held for at least one year, any gain realized on disposition of the Shares will be treated as long-term capital gain for federal income tax purposes.  

 

11.Successors and Assigns.  The Company may assign any of its rights under this Stock Option Agreement (this “Agreement”) to single or multiple assignees, and this Agreement shall inure to the benefit of the successors and assigns of the Company.  Subject to the restrictions on transfer herein set forth, this Agreement shall be binding upon Optionee and his or her heirs, executors, administrators, successors, transferees and assigns.

 

12.Interpretation.  Any dispute regarding the interpretation of this Agreement shall be submitted by Optionee or by the Company forthwith to the Company's Board of Directors or the Committee that administers the Plan, which shall review such dispute at its next regular meeting.  The resolution of such a dispute by the Board or committee shall be final and binding on the Company and on Optionee.

 

13.Governing Law; Severability.  This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware excluding that body of law pertaining to conflicts of law.  Should any provision of this Agreement be determined by a court of law to be illegal or unenforceable, the other provisions shall nevertheless remain effective and shall remain enforceable.

 

14.Notices.  Any notice required or permitted hereunder shall be given in writing and shall be deemed effectively given upon receipt or three (3) days after deposit in the United States mail by certified mail, with postage and fees prepaid, addressed to in the case of the Company at its corporate headquarters and in the case of Optionee at the last address Optionee provided to the Company. Notwithstanding the foregoing, the Company may, in its sole discretion, decide to deliver any documents related to participation in the Plan and this option by electronic means or to request your consent to participate in the Plan by electronic means. You hereby consent to receive such documents by electronic delivery and, if requested, to agree to participate in the Plan through an on-line or electronic system established and maintained by the Company or another third party designated by the Company.

 

15.Option Not a Service Contract.  

 

(a)Your Continuous Service with the Company or a Related Entity is not for any specified term and may be terminated by you or by the Company or a Related Entity at any time, for any reason, with or without cause and with or without notice. Nothing in this Agreement (including, but not limited to, the vesting of your Option pursuant to the schedule set forth in the Notice of Stock Option Grant or the issuance of the shares upon exercise of your option), the Plan or any covenant of good faith and fair dealing that may be found implicit in this Agreement or the Plan shall: (i) confer upon you any right to continue in the employ of, or affiliation with, the Company or a Related Entity; (ii) constitute any promise or commitment by the Company or a Related Entity regarding the fact or nature of future positions, future work assignments, future compensation or any other term or condition of employment or affiliation; (iii) confer any right or benefit under this Agreement or the Plan unless such right or benefit has specifically accrued under the terms of this Agreement or Plan; or (iv) deprive the Company of the right to terminate you at will and without regard to any future vesting opportunity that you may have.

 

	
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(b)By accepting this Option, you acknowledge and agree that, subject to Section 8(b) of your Employment Agreement (as defined in the Notice of Stock Option Grant), the right to continue vesting in this Option pursuant to the schedule set forth in Notice of Stock Option Grant is earned only by Continuous Service (not through the act of being hired, being granted this option or any other award or benefit) and that the Company has the right to reorganize, sell, spin-out or otherwise restructure one or more of its businesses or Related Entity at any time or from time to time, as it deems appropriate (a “reorganization”). You further acknowledge and agree that such a reorganization could result in the termination of your Continuous Service, or the termination of Related Entity status of your employer and the loss of benefits available to you under this Agreement, including but not limited to, the termination of the right to continue vesting in the option (subject to Section 8(b) of your Employment Agreement). You further acknowledge and agree that this Agreement, the Plan, the transactions contemplated hereunder and the vesting schedule set forth herein or any covenant of good faith and fair dealing that may be found implicit in any of them do not constitute an express or implied promise of continued engagement as an employee or consultant for the term of this Agreement, for any period, or at all, and shall not interfere in any way with your right or the Company’s right to terminate your Continuous Service at any time, with or without Cause and with or without notice.

 

16.Further Instruments.  The parties agree to execute such further instruments and to take such further action as may be reasonably necessary to carry out the purposes and intent of this Agreement.

 

17.2020 Inducement Award Plan.  This Option shall be subject to and governed by the terms and conditions of the Plan in all respects, and to the extent of any inconsistency between this Option and the terms of the Plan, the terms of the Plan will control.  Optionee acknowledges receipt of a copy of the Plan and represents that Optionee is familiar with the terms and provisions thereof, and hereby accepts this Option subject to all of the terms and provisions thereof.  Optionee has reviewed the Plan and this Option in their entirety, has had an opportunity to obtain the advice of counsel prior to executing this Option and fully understands all provisions of this Option.  Optionee hereby agrees to accept as binding, conclusive and final all decisions or interpretations of the Board or Committee upon any questions arising under the Plan or this Option.

 

18.Other Documents. You acknowledge receipt of the Company’s insider trading policy and agree to comply with its terms.

 

 

 

 

 

	
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EXHIBIT A

 

ASSEMBLY BIOSCIENCES, INC.

 

EXERCISE NOTICE3

 

 

Assembly Biosciences, Inc.

___________________________

___________________________

Attention:  Secretary

 

1.Exercise of Option.  Effective as of today, the undersigned (“Optionee”) hereby elects to exercise Optionee's option to purchase _____________ shares of the Common Stock (the “Shares”) of Assembly Biosciences, Inc. (the “Company”) under and pursuant to the Company's 2020 Inducement Award Plan (as amended from time to time, the “Plan”) and the Notice of Stock Option Grant dated __________, 20___ with its attached Stock Option Agreement (the “Option Agreement”).  The purchase price for the Shares shall be $__________ as required by this Option Agreement.  Optionee herewith delivers to the Company the full Exercise Price for the Shares.

 

2.Representations of Optionee.  Optionee acknowledges that Optionee has received, read and understood the Plan and this Option Agreement and agrees to abide by and be bound by their terms and conditions.  Optionee represents that Optionee is purchasing the Shares for Optionee's own account for investment and not with a view to, or for sale in connection with, a distribution of any of such Shares.

 

3.Rights as Stockholder.  Until the stock certificate evidencing such Shares is issued (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company), no right to vote or receive dividends or any other rights as a stockholder shall exist with respect to the optioned Shares, notwithstanding the exercise of the Option.  The Company shall issue (or cause to be issued) such stock certificate promptly after the Option is exercised.  

 

4.Tax Consultation.  Optionee understands that Optionee may suffer adverse tax consequences as a result of Optionee's purchase or disposition of the Shares.  Optionee represents that Optionee has consulted with any tax consultants Optionee deems advisable in connection with the purchase or disposition of the Shares and that Optionee is not relying on the Company for any tax advice.

 

5.Entire Agreement.  The Plan and the Option Agreement are incorporated herein by reference.  This Exercise Notice, the Plan and the Option Agreement shall constitute the entire agreement of the parties and supersede in their entirety all prior undertakings and agreements of the Company and Optionee with respect to the subject matter hereof, and is governed by Delaware law except for that body of law pertaining to conflict of laws.

	
	 

	
3 
	
 Exercises may be effected through the Company’s online equity award platform in lieu of this Exercise Notice.

 

 

 

	
Submitted by:
	
 
	
Accepted by:

	
 
	
 
	
 
	
 
	
 

	
OPTIONEE:
	
 
	
Assembly Biosciences, Inc.

	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
By:
	
 

	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
Name:
	
 

	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
Title:
	
 

	
 
	
 
	
 
	
 
	
 

	
Address:
	
 
	
 
	
Address:asmb-ex105_82.htm

 

Exhibit 10.5

ASSEMBLY BIOSCIENCES, INC.

2020 INDUCEMENT AWARD PLAN

RESTRICTED STOCK UNIT AWARD NOTICE

 

	
 
	
 
	
Grant Number

	
 
	
 
	
 

	
 
	
 
	
 

	
 
	
 
	
 

 

You have been granted Restricted Stock Units (“RSUs”) of Assembly Biosciences, Inc. (the “Company”), as follows:

 

	
Effective Date:
	
 
	
[   ]

	
 
	
 
	
 

	
Vesting Commencement Date:
	
 
	
[   ]

	
 
	
 
	
 

	
Total Number of RSUs Granted:
	
 
	
[   ]

 

	
Term/Expiration Date:
	
 
	
The RSUs shall terminate immediately following the settlement date of all vested RSUs in connection with the Payment Date (as defined below).  All unvested RSUs shall terminate immediately following the cessation of Continuous Service. 

	
 
	
 
	
 

 

 

	
Vesting Schedule:
	
 
	
[One-fourth of the granted RSUs to vest on the first anniversary of the Vesting Commencement Date; One-fourth of the granted RSUs to vest on the second anniversary of the Vesting Commencement Date; One-fourth of the granted RSUs to vest on the third anniversary of the Vesting Commencement Date; One-fourth of the granted RSU to vest on the fourth anniversary of the Vesting Commencement Date , in each case subject to your Continuous Service through such vesting date and otherwise in accordance with the terms and conditions of the Plan (as defined below) and the Restricted Stock Unit Award Agreement attached hereto (each such date, a “Vesting Date”)]  [Alt: [performance milestones] [time-vesting] [combination]]. RSUs to vest on any vesting date shall be rounded down to nearest whole number. Each installment shall take into effect prior rounding so that each annual installment including the last installment is approximately the same.  On the [fourth] anniversary of the Vesting Commencement Date, assuming Continuous Service through each Vesting Date, the RSUs shall be 

fully vested.  Upon the termination of your employment by the Company for any reason other than for Cause within 6 months following the occurrence of a Corporate Transaction, all unvested RSUs shall immediately vest.

	
 
	
 
	
 

	
 
	
 
	
[Notwithstanding the foregoing, the RSUs shall be subject to additional provisions relating to the acceleration of vesting of time-based vesting equity awards as set forth in Section [__] of your Employment Agreement executed on [__date__] and effective [__date__] (your “Employment Agreement”), including the condition that you execute a release in form and substance reasonably satisfactory to the Company in connection with your termination of employment.]1

	
 
	
 
	
 

	
 
	
 
	
[Notwithstanding the foregoing, the RSUs shall be subject to additional provisions relating to the acceleration of vesting of time-based vesting equity awards as set forth in the Non-Executive Officers Severance Benefit Plan (“Severance Plan”), if you incur a “Change in Control Termination” (as defined in the Severance Plan) and satisfy the requirements of the Severance Plan. For avoidance of doubt and notwithstanding anything in an employment offer letter to the contrary, this award and the Severance Plan reflect the sole agreement governing acceleration of vesting under this award upon a termination of Continuous Service.]2

	
 
	
 
	
 

	
Payment Date:
	
 
	
The Company shall deliver, to you one Share (as defined in the Plan) in respect of each vested RSU.  Delivery shall be made as soon as practicable following each vesting date and in no event later than 30 days following the applicable vesting date (the date of delivery, the “Payment Date”).

 

	
	 

	
1 
	
 Add if Participant is an Executive officer.

	
2 
	
 Add if Participant is a Non-executive officer

 

 

By your signature or your electronic acceptance of the RSUs and the signature of the Company’s representative below, you and the Company agree that the RSUs are granted under and governed by the terms and conditions of the Assembly Biosciences, Inc. 2020 Inducement Award Plan (the “Plan”) and the Restricted Stock Unit Award Agreement, both of which are attached and made a part of this document.

 

	
Dated:  
	
 
	
 

 

	
GRANTEE:
	
 
	
 
	
ASSEMBLY BIOSCIENCES, INC.

	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
By:
	
 

	
[   ]
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
Name:
	
 

	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
Title:
	
 

 

 

 

ASSEMBLY BIOSCIENCES, INC. 

RESTRICTED STOCK UNIT AWARD AGREEMENT

UNDER THE 2020 INDUCEMENT AWARD PLAN

THIS RESTRICTED STOCK UNIT AWARD AGREEMENT (this “Award Agreement”) is made and entered into by and between Assembly Biosciences, Inc. (the “Company”) and the individual (the “Grantee”) named in the Restricted Stock Unit Award Notice (the “Award Notice”) under the Company’s 2020 Inducement Award Plan (the “Plan”).  The Award Notice also establishes the Effective Date of the Award, the number of Restricted Stock Units awarded, vesting conditions, and the Payment Date of the Award.

WHEREAS, the Grantee is expected to provide valuable services to the Company; 

WHEREAS, the Company considers it desirable and in the best interests of the Company that the Grantee be given an opportunity to acquire a proprietary interest in the Company as an incentive to advance the interests of the Company and to perform future services that will contribute materially to the successful operation of the Company

WHEREAS, the Award granted hereby is a material inducement for the Grantee to enter into employment with the Company and to promote the success of the Company’s business; and

WHEREAS, the Company, acting through the Board of Directors of the Company (the “Board”) or (ii) the Committee appointed by the Board under the Plan (the “Committee”), desires to grant the Grantee a Restricted Stock Unit Award measured in shares of common stock of the Company (the “Common Stock”), in accordance with the Plan.  Capitalized terms used herein which are not otherwise defined herein shall have the meanings ascribed to them under the Plan.

NOW, THEREFORE, in consideration of the premises, it is agreed by and between the parties as follows:

1.Grant of Restricted Stock Unit Award.  The Company awards the Grantee Restricted Stock Units in a number that is specified in the Award Notice provided to the Grantee.  The Award is subject to the vesting, payment and other provisions of this Award Agreement, the Award Notice and the Plan.  Each Restricted Stock Unit represents one (1) Share of Common Stock of the Company.  The Company will account for the Restricted Stock Units in a bookkeeping account on the Grantee’s behalf until they become payable or are forfeited.  The number of Restricted Stock Units shall be adjusted if the Common Stock is split, combined, if stock dividends are paid on Common Stock, or upon a similar event in the same manner that the Common Stock is adjusted.  

2.Dividend Equivalents.  For each Restricted Stock Unit that is granted and credited to the Grantee’s account, the Grantee’s account will also be credited with a Dividend Equivalent Rights in an amount equal to any cash dividends paid by the Company upon one Share of Common Stock after the Effective Date and before the Payment Date (as provided in the Award Notice) for the Restricted Stock Unit, subject to the vesting and other provisions of this Award Agreement and the Award Notice.

 

 

3.Vesting.  The Restricted Stock Units (and Dividend Equivalent Rights associated with the Restricted Stock Units) shall be unvested and shall be subject to the restrictions set forth in this Award Agreement and the Award Notice.  Unless sooner forfeited in accordance with Section 5, the Restricted Stock Units and Dividend Equivalent Rights associated with the Restricted Stock Unit shall vest as set forth in the Grantee’s Award Notice. 

4.Settlement of Vested Restricted Stock Units and Restricted Dividend Equivalents.  If any of the Restricted Stock Units vest on a vesting date, the Company shall settle such Restricted Stock Units (the “Vested Restricted Stock Units”) and Dividend Equivalent Rights attributable to such Vested Restricted Stock Units (“Vested Dividend Equivalents”) on the Payment Date established in the Award Notice (the “Payment Date”) by delivering to the Grantee (a)  shares of Common Stock of the Company and (b) cash, determined as follows:

	
 
	
(a)
	
Number of Shares of Common Stock.  The Company will determine the value as of the Payment Date of the Vested Restricted Stock Units and the Vested Dividend Equivalent Rights (together, the “Total Amount”).  For this purpose, the Vested Dividend Equivalents shall be valued at their original value and shall not be increased or decreased by an interest or earnings factor.  The Total Amount will be reduced by any tax withholding that is not paid by the Grantee under the procedure in Section 6 below (the amount after the reduction is the “Net Amount”).  The Net Amount will be divided by the value of one (1) Common Share of the Company as of the Vesting Date, and the resulting whole number (without remainder) shall be the number of shares of Common Stock that will be delivered to the Grantee, and 

	
 
	
(b)
	
Cash.  The remainder resulting from the division in (a) above to determine the number of shares of Common Stock will be the dollar amount of the cash payable to the Grantee, and such amount shall be paid to the Grantee by check.

The Vested Restricted Stock Units and Vested Dividend Equivalents will be settled by the Company within thirty (30) days of the applicable vesting date.

5.Forfeiture of Restricted Stock Units (and Dividend Equivalent Rights Attributable to Restricted Stock Units).  Except as set forth in Section 8(b) of your Employment Agreement (as defined in the Award Notice) or in the Award Notice, in the event of a termination of the Grantee’s Continuous Service for any reason (including Disability), any Restricted Stock Units and Dividend Equivalent Rights attributable to such Restricted Stock Units that were not already vested on the date of termination shall be forfeited on that date.

6.Certain Tax Matters.  The Grantee acknowledges that the Grantee understands the federal, state and local income, employment and foreign (if applicable) tax consequences of the Restricted Stock Unit Award, and the issuance, vesting and forfeiture provisions relating to the Restricted Stock Unit Award.

The Grantee understands that, at the time that the Grantee realizes any compensation income in respect of the Restricted Stock Unit Award, the Company will be required to withhold federal, state and local income and employment taxes on the full amount of the compensation income realized by the Grantee, and if the Grantee is located outside of the United States, the 

 

 

Company may be required to withhold to meet tax, employment, or other obligations imposed by the tax jurisdiction that may be applicable to the Grantee.  It is understood that all matters with respect to the total amount of taxes to be withheld in respect of such compensation income shall be determined by the Board (or the Committee) in its reasonable discretion. It is understood that although the Company may pay withheld amounts for the taxing jurisdiction that may be credited to the Grantee against taxes due by the Grantee, the Grantee is responsible for payment of all taxes due as a result of compensation arising under this Award Agreement.

The Board (or the Committee) may make such provisions and take such steps as it may deem necessary or appropriate for the withholding of taxes by the Company on compensation income the Grantee realizes.  The Company shall accept payment by the Grantee of an amount in cash for all or part of the withholding obligation of the Company on the compensation income, so that the payment(s) to the Grantee under this Award Agreement are not reduced for tax withholding to the extent of the payment.  Such payment by the Grantee must be made to the Company by the time that the Company is required to pay the withholding to the taxing authority, but in any event not later than thirty (30) days from the Payment Date.  If the Grantee does not make a payment for the full withholding obligation, the Company shall withhold part of the payment due for redemption of the Vested Restricted Stock Units and Vested Dividend Equivalent Rights in the amount needed by the Company to meet its withholding obligations, with the result that the payment amount for the Vested Restricted Stock Units and Vested Dividend Equivalent Rights will be reduced as provided in Section 4(a) above by the amount needed to meet the Company’s withholding obligations.

7.Rights Prior to Vesting.  The Restricted Stock Units and Dividend Equivalent Rights represent a right to payment from the Company if the conditions of this Award Agreement are met and do not give the Grantee ownership of any Common Stock prior to delivery as provided in Section 4.  No assets have been set aside by the Company or otherwise to pay the amounts promised by this Award Agreement, the right to payment is unsecured, and the Grantee is a general creditor of the Company for payment under this Award Agreement.

8.Investment Representation.  The Grantee represents and warrants to the Company that the Grantee has read this Award Agreement carefully, and to the extent believed necessary, has discussed this Award Agreement and its impact and limitations upon the Grantee with counsel.  

9.Transferability.  The right to payment under this Award Agreement may not be sold, exchanged, transferred, pledged, hypothecated, encumbered or otherwise disposed of except as provided in the Plan.  The Company shall have the right to assign to any of its affiliates any of its rights, or to delegate to any of its affiliates any of its obligations under this Award Agreement.

10.Binding Effect.  This Award Agreement shall inure to the benefit of and be binding upon the parties hereto and their respective heirs, executors, administrators, successors and assigns.  

11.Gender and Number.  All terms used in this Award Agreement shall be deemed to refer to the masculine, feminine, neuter, singular or plural as the context may require. 

 

 

12.Terms and Conditions of Plan.  The terms and conditions included in the Plan and the Award Notice are incorporated by reference herein, and to the extent that any conflict may exist between any term or provision of this Award Agreement and any term or provision of the Plan as in effect from time to time, such term or provision of the Plan shall control. 

13.Certain Remedies.  Without intending to limit the remedies available to the Company, the Grantee agrees that damages at law will be an insufficient remedy in the event the Grantee violates the terms of this Award Agreement.  The Grantee agrees that the Company may apply for and have injunctive or other equitable relief in any court of competent jurisdiction to restrain the breach or threatened breach of, or otherwise specifically to enforce, any of the provisions hereof.  

14.Waiver.  The waiver by either party of compliance with any provision of this Award Agreement by the other party shall not operate or be construed as a waiver of any other provision of this Award Agreement, or of any subsequent breach by such party of a provision of this Award Agreement.  

15.No Restriction on Right of Company to Effect Corporate Changes. Neither the Plan nor this Award Agreement shall affect in any way the right or power of the Company or its stockholders to make or authorize any or all adjustments, recapitalizations, reorganizations or other changes in the capital structure or business of the Company, or any merger or consolidation of the Company, or any issue of stock or of options, warrants or rights to purchase stock or of bonds, debentures, preferred or prior preference stocks whose rights are superior to or affect the Common Stock or the rights thereof or which are convertible into or exchangeable for Common Stock, or the dissolution or liquidation of the Company, or any sale or transfer of all or any part of the assets or business of the Company, or any other corporate act or proceeding, whether of a similar character or otherwise.  

16.Entire Agreement.  This Award Agreement (including, for all purposes of this Section 16, the Award Notice, and the Plan which are incorporated herein by reference and all additional riders incorporated herein) sets forth all of the promises, agreements, conditions and understandings between the parties hereto with respect to the Award, and there are no promises, agreements, conditions, understandings, warranties or representations, oral or written, express or implied, between them with respect to the Restricted Stock Unit Award other than as set forth therein or herein. This Award Agreement supersedes and replaces any and all prior agreements between the parties hereto with respect to Restricted Stock Units and Dividend Equivalent Rights.  This Award Agreement is, and is intended by the parties to be, an integration of any and all prior agreements or understandings, oral or written, with respect to the Restricted Stock Units and Dividend Equivalent Rights subject to this Award Agreement.  No modification, amendment or waiver of any of the provisions of this Award Agreement shall be effective unless approved in writing by both parties. 

17.Invalid or Unenforceable Provision.  The invalidity or unenforceability of any particular provision of this Award Agreement shall not affect the other provisions hereof, and this Award Agreement shall be construed in all respects as if such invalid or unenforceable provision was omitted.  

 

 

18.Governing Law.  This Award Agreement shall be construed and enforced in accordance with the laws of Delaware, without giving effect to principles of conflicts of laws.  

19.Miscellaneous.

(a)Neither the granting or vesting of the Restricted Stock Units and Dividend Equivalent Rights nor any other provision of this Award Agreement shall be construed as conferring upon the Grantee any right to continue in the service of the Company, or as interfering with or restricting in any way the right of the Company to terminate such service at any time.  

(b)The Company, the Board (or the Committee) and any employees or agents thereof are relieved from any liability for the non-issuance or non-transfer, or any delay in the issuance or transfer, of any Common Stock which results from the inability of the Company to obtain, or in any delay in obtaining, from each regulatory body having jurisdiction all requisite authority to issue or transfer the Common Stock in satisfaction of this Award Agreement if counsel for the Company deems such authorization necessary for the lawful issuance or transfer of any of the Common Stock.  

(c)No Common Stock shall be sold or otherwise disposed of in violation of any federal or state securities law or regulations.  

(d)All decisions of the Board (or the Committee) with respect to the interpretation, construction and application of the Plan and/or this Award Agreement shall be conclusive and binding upon the Grantee and all other persons.

(e)This Award Agreement has been drafted with the intent that payments (and the right to payments) under it are exempt from or comply with the requirements of Section 409A of the Internal Revenue Code of 1986, as amended, and the regulations thereunder applicable to nonqualified deferred compensation.  This Award Agreement shall be interpreted in a manner consistent with such intent.  The parties agree that this Award Agreement may be amended, as reasonably requested by either party, and as may be necessary to fully comply with Section 409A of the Code and all related rules and regulations in order to preserve the payments and benefits provided hereunder without additional cost to either party.  The Company makes no representation or warranty and shall have no liability to the Grantee or any other person if any provisions of this Award Agreement or the Award Notice are determined to constitute deferred compensation subject to Section 409A of the Code but do not satisfy an exemption from, or the conditions of, such Section.

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