Document:

pfsw-ex103_113.htm

 

Exhibit 10.3

AMENDMENT NO. 16

TO

AGREEMENT FOR INVENTORY FINANCING

This Amendment No. 16 ("Amendment") to the Agreement for Inventory Financing is made as of August 3, 2015 by and among IBM Credit LLC, a Delaware limited liability company ("IBM Credit"), Business Supplies Distributors Holdings, LLC, a limited liability company duly organized under the laws of the state of Delaware (“Holdings”), Supplies Distributors, Inc. (formerly known as BSD Acquisition Corp.), a corporation duly organized under the laws of the state of Delaware ("Borrower"), Priority Fulfillment Services, Inc., a corporation duly organized under the laws of the state of Delaware (“PFS”) and PFSweb, Inc., a corporation duly organized under the laws of the state of Delaware (“PFSweb”) (Borrower, Holdings, PFS, PFSweb, and any other entity that executes this Agreement or any Other Document, including without limitation all Guarantors, are each individually referred to as a “Loan Party” and collectively referred to as “Loan Parties”).

RECITALS:

A.   Each Loan Party and IBM Credit have entered into that certain Agreement for Inventory Financing dated as of March 29, 2002 (as amended, modified, restated or supplemented from time to time, the "Agreement"); and

B.   The parties have agreed to modify the Agreement as more specifically set forth below, upon and subject to the terms and conditions set forth herein.

AGREEMENT

NOW THEREFORE, in consideration of the premises and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, Borrower, the other Loan Parties and IBM Credit hereby agree as follows:

Section 1.  Definitions.   All capitalized terms not otherwise defined herein shall have the respective meanings set forth in the Agreement.

Section 2.  Amendment.

A.   Attachment A to the Agreement is hereby amended by deleting such Attachment A in its entirety and substituting, in lieu thereof, the Attachment A attached hereto.  Such new Attachment A shall be effective as of the date specified in the new Attachment A.  The changes contained in the new Attachment A include, without limitation, the following:

	
(i)
	
Section II. Fees, Rates and Repayment Terms, subsection (A), the Credit Line is decreased from Fifteen Million Dollars ($15,000,000.00) to Thirteen Million Dollars ($13,000,000.00);

	
(ii)
	
Section II. Fees, Rates and Repayment Terms, subsection (E), Collateral Insurance Amount: is decreased from Fifteen Million Dollars ($15,000,000.00) to Thirteen Million Dollars ($13,000,000.00);

	
(iii)
	
Section II.  Fees, Rates and Repayment Terms, subsection (J), Other Charges, is amended and restated to read as follows:

	
“J.
	
Other Charges:

	
(i)
	
Monthly Service Fee: $1,000.00

 

	
 
	
Page 1 of  7
	
 

 

 

	
(iv)
	
Section III Financial Covenants, sub-section (B) is amended and restated to read as follows: 

(B)   1.  Borrower will be required to maintain the following financial ratios, percentages and amounts as of the last day of the fiscal period under review (quarterly, annually) by IBM Credit:

 

	
 
	
Covenant
	
Covenant Requirement

	
(i)
	
Revenue on an Annual Basis* (i.e. the current

fiscal year-to-date Revenue annualized)

to Working Capital
	
Greater than Zero and

Equal to or Less than 37.0:1.0

	
 
	
* Annualized Revenue from intercompany sales are excluded from this calculation.
	
 

	
 
	
 
	
 

	
(ii)
	
Net Profit after Tax to Revenue** 
	
Equal to or Greater than 

0.10 percent

	
 
	
**Excluding all income and losses applicable to (a) 100% ownership in Canadian and European subsidiaries and (b) foreign currency adjustments for each period but not excluding such foreign currency adjustments for annual periods that must comply with GAAP and excluding revenue from intercompany sales.
	
 

	
 
	
 
	
 

	
(iii)
	
Total Liabilities to Tangible Net Worth***
	
Greater than Zero and

Equal to or Less than 7.0:1.0

	
 
	
***Accumulated earnings and unrealized foreign currency translation adjustments applicable to Borrower’s Canadian and European subsidiaries are excluded from calculation of Borrower’s Total Assets and Total Net Worth.
	
 

2.   Business Supplies Distributors Holdings, LLC will be required to maintain the following financial ratios, percentages and amounts as of the last day of the fiscal period under review (quarterly, annually) by IBM Credit:

 

	
 
	
Covenant
	
Covenant Requirement

	
(i)
	
Revenue on an Annual Basis (i.e. the current

fiscal year-to-date Revenue annualized)

to Working Capital
	
Greater than Zero and

Equal to or Less than 37.0:1.0

	
 
	
 
	
 

	
(ii)
	
Net Profit after Tax to Revenue*

 

*Excluding all (a) income and losses applicable to foreign currency adjustments for each period but not excluding such foreign currency adjustments for annual periods that must comply with GAAP and (b) revenue from intercompany sales.
	
Equal to or Greater than 

0.10 percent

	
 
	
 
	
 

	
(iii)
	
Total Liabilities to Tangible Net Worth
	
Greater than Zero and

Equal to or Less than 7.0:1.0

 

	
 
	
Page 2 of  7
	
 

 

 

Section 3.  Conditions of Effectiveness of Amendment.  This Amendment shall become effective upon the execution by IBM Credit and each of the Loan Parties, provided that IBM Credit receives a duly authorized and executed counterpart of this Amendment from each of the Loan Parties on or prior to August __, 2015.

Section 4.  Representations and Warranties. Each Loan Party makes to IBM Credit the following representations and warranties all of which are material and are made to induce IBM Credit to enter into this Amendment.

Section 4.1  Accuracy and Completeness of Warranties and Representations. All representations made by the Loan Party in the Agreement were true and accurate and complete in every respect as of the date made, and, as amended by this Amendment, all representations made by the Loan Party in the Agreement are true, accurate and complete in every material respect as of the date hereof, and do not fail to disclose any material fact necessary to make representations not misleading.

Section 4.2  Violation of Other Agreements and Consent. The execution and delivery of this Amendment and the performance and observance of the covenants to be performed and observed hereunder (a) do not violate or cause any Loan Party not to be in compliance with the terms of any agreement to which such Loan Party is a party, and (b) require the consent of any Person.

Section 4.3  Litigation. Except as has been disclosed by the Loan Parties to IBM Credit in writing, there is no litigation, proceeding, investigation or labor dispute pending or threatened against any Loan Party, which, if adversely determined, would materially adversely affect the Loan Party's ability to perform such Loan Party's obligations under the Agreement and the other documents, instruments and agreements executed in connection therewith or pursuant hereto.

Section 4.4  Enforceability of Amendment. This Amendment has been duly authorized, executed and delivered by each Loan Party and is enforceable against each Loan Party in accordance with its terms.

Section 5.   Ratification of Agreement. Except as specifically amended hereby, all of the provisions of the Agreement shall remain unamended and in full force and effect. Each Loan Party hereby ratifies, confirms and agrees that the Agreement, as amended hereby, represents a valid and enforceable obligation of such Loan Party, and is not subject to any claims, offsets or defenses.

Section 6.   Ratification of Guaranty and Notes Payable Subordination Agreement. Each of Holdings, PFSweb and PFS hereby ratify and confirm their respective guaranties in favor of IBM Credit and agree that such guaranties remain in full force and effect and that the term “Liabilities”, as used therein include, without limitation the indebtedness liabilities and obligations of the Borrower under the Agreement as amended hereby.  

Section 7.   Governing Law.  This Amendment shall be governed by and interpreted in accordance with the laws which govern the Agreement.

Section 8.   Counterparts and Electronic Copies.  This Amendment may be executed in any number of counterparts, each of which shall be an original and all of which shall constitute one agreement. Customer acknowledges that IBM Credit may maintain a copy of this Amendment in electronic form and agrees that a copy reproduced from such electronic form or any other reliable means (for example, photocopy, image or facsimile) shall in all respects be considered equivalent to an original. 

 

	
 
	
Page 3 of  7
	
 

 

 

IN WITNESS WHEREOF, each Loan Party has read this entire Amendment, and has caused its authorized representatives to execute this Amendment and has caused its corporate seal, if any, to be affixed hereto as of the date first written above.

 

	
IBM Credit LLC
	
 
	
Supplies Distributors, Inc.

	
 
	
 
	
 
	
 
	
 

	
By:
	
 
	
 
	
By:
	
 

	
Print Name:
	
 
	
 
	
Print Name:
	
 

	
Title:
	
 
	
 
	
Title:
	
 

	
 
	
 
	
 
	
 
	
 

	
Business Supplies Distributors Holdings, LLC
	
 
	
Priority Fulfillment Services, Inc.

	
 
	
 
	
 
	
 
	
 
	
 

	
By: 
	
 
	
as Managing Member
	
 
	
 
	
 

	
By: 
	
 
	
 
	
By:
	
 

	
Print Name:
	
 
	
 
	
Print Name:
	
 

	
Title:
	
 
	
 
	
Title:
	
 

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
PFSweb, Inc.

	
 
	
 
	
 
	
 
	
By:
	
 

	
 
	
 
	
 
	
 
	
Print Name:
	
 

	
 
	
 
	
 
	
 
	
Title:
	
 

 

 

	
 
	
Page 4 of  7
	
 

 

 

Attachment A   (“Attachment A") TO

AGREEMENT FOR INVENTORY FINANCING

DATED MARCH 29, 2002

EFFECTIVE DATE OF THIS ATTACHMENT A: August 3, 2015

SECTION I.    BORROWER/LOAN PARTIES:

 

	
(A)  BORROWER:
	
ORGANIZATION NO. (Assigned by State of Org).

	
 
	
 

	
Supplies Distributors, Inc.
	
3416326

	
 
	
 

	
(B)  ADDITIONAL LOAN PARTIES:
	
 

	
 
	
 

	
Business Supplies Distributors Holdings, LLC
	
3410894

	
Priority Fulfillment Services, Inc.
	
2606094

	
PFSweb, Inc.
	
3062550

SECTION II.   FEES, RATES AND REPAYMENT TERMS:

 

	
 
	
(A)
	
Credit Line:  Thirteen Million Dollars ($13,000,000.00) 

 

In the event that the amount of any Participation is reduced or any Participation Agreement expires or is terminated for any reason, the Credit Line shall be reduced, upon forty-five (45) days written notice by IBM Credit to Borrower, by an amount equal to the amount that is no longer subject to a Participation Agreement as determined by IBM Credit pursuant to Section 2.1 of the Agreement.

	
 
	
 
	
 

	
 
	
(B)
	
Borrowing Base:

	
 
	
 
	
(i)  100% of the Borrower's inventory in the Borrower's possession as of the date of determination as reflected in the Borrower's most recent Collateral Management Report constituting Products (other than service parts) financed through a Product Advance by IBM Credit, so long as (1) IBM Credit has a first priority security interest in such Products and (2) such Products are in new and un-opened boxes;

	
 
	
 
	
 

	
 
	
 
	
(ii)  80% of price protection payments, credits, discounts, incentive payments, rebated and refunds relating to IBM Products (“Accounts”) in the aggregate not to exceed Two Million Five Hundred Thousand Dollars ($2,500,000.00) provided that (i) Borrower obtains (and provides to IBM Credit along with the monthly Collateral Management Report required under Section 7.1 (O)) from IBM written confirmation (a) acknowledging the obligation of IBM to pay such amount or that they have received the billing from the Borrower, (b) stating the date the amount is due to be paid and (c) IBM waiving its right to setoff such amounts owed to Borrower with any amount Borrower may owe to IBM, (ii) such Accounts do not remain unpaid for more than sixty (60) days from the date the obligation of IBM occurred; and (iii) such Accounts are delivered directly to IBM Credit. 

	
 
	
 
	
 

	
 
	
(C)
	
Product Financing Charge: Prime Rate plus 0.50%

	
 
	
(D)
	
Product Financing Period: 90 days

	
 
	
(E)
	
Collateral Insurance Amount: Thirteen Million Dollars ($13,000,000.00) 

	
 
	
(F)
	
PRO Finance Charge:              Prime Rate plus 0.50%

	
 
	
(G)
	
Delinquency Fee Rate:              Prime Rate plus 6.500%

	
 
	
(I)
	
Free Financing Period Exclusion Fee:   Product Advance multiplied by 0.25%

	
 
	
(J)
	
Other Charges:

	
 
	
 
	
(i)  Monthly Service Fee:         $1,000.00

 

 

	
 
	
Page 5 of  7
	
 

 

 

SECTION III.   FINANCIAL COVENANTS:

(A) Definitions:  The following terms shall have the following respective meanings in this Attachment.  All amounts shall be determined in accordance with generally accepted accounting principles (GAAP).

“Consolidated Net Income” shall mean, for any period, the net income (or loss), after taxes, of Borrower on a consolidated basis for such period determined in accordance with GAAP.

“Current” shall mean within the ongoing twelve month period.

“Current Assets” shall mean assets that are cash, restricted cash applicable to cash received into a lockbox from collections of trade accounts receivable or expected to become cash within the ongoing twelve months.

“Current Liabilities” shall mean payment obligations resulting from past or current transactions that require settlement within the ongoing twelve month period.  All indebtedness to IBM Credit and Congress shall be considered a Current Liability for purposes of determining compliance with the Financial Covenants.  All subordinated indebtedness shall not be considered current liabilities.

“EBITDA” shall mean, for any period (determined on a consolidated basis in accordance with GAAP), (a) the Consolidated Net Income of Borrower for such period, plus (b) each of the following to the extent reflected as an expense in the determination of such Consolidated Net Income: (i) the Borrower's provisions for taxes based on income for such period; (ii) Interest Expense for such period; and (iii) depreciation and amortization of tangible and intangible assets of Borrower for such period.

“Fixed Charges” shall mean, for any period, an amount equal to the sum, without duplication, of the amounts for such as determined for the Borrower on a consolidated basis, of (i) scheduled repayments of principal of all Indebtedness (as reduced by repayments thereon previously made), (ii) Interest Expense, (iii) capital expenditures (iv) dividends, (v) leasehold improvement expenditures and (vi) all provisions for U.S. and non U.S. Federal, state and local taxes.

“Fixed Charge Coverage Ratio” shall mean the ratio as of the last day of any fiscal period of (i) EBITDA as of the last day of such fiscal period to (ii) Fixed Charges.

“Interest Expense” shall mean, for any period, the aggregate consolidated interest expense of Borrower during such period in respect of Indebtedness determined on a consolidated basis in accordance with GAAP, including, without limitation, amortization of original issue discount on any Indebtedness and of all fees payable in connection with the incurrence of such Indebtedness (to the extent included in interest expense), the interest portion of any deferred payment obligation and the interest component of any capital lease obligations.

“Long Term” shall mean beyond the ongoing twelve month period.

“Long Term Assets” shall mean assets that take longer than a year to be converted to cash.  They are divided into four categories: tangible assets, investments, intangibles and other.

“Long Term Debt” shall mean payment obligations of indebtedness which mature more than twelve months from the date of determination, or mature within twelve months from such date but are renewable or extendible at the option of the debtor to a date more than twelve months from the date of determination.

“Net Profit after Tax” shall mean Revenue plus all other income, minus all costs, including applicable taxes.

“Revenue” shall mean the monetary expression of the aggregate of products or services transferred by an enterprise to its customers for which said customers have paid or are obligated to pay, plus other income as allowed.

“Subordinated Debt” shall mean Borrower's indebtedness to third parties as evidenced by an executed Notes Payable Subordination Agreement in favor of IBM Credit.

“Tangible Net Worth” shall mean Total Net Worth minus goodwill.

“Total Assets” shall mean the total of Current Assets and Long Term Assets.  For the purpose of  

 

	
 
	
Page 6 of  7
	
 

 

 

calculating Total Assets for Borrower, the accumulated earnings and foreign currency translation adjustments applicable to Borrower’s Canadian and European subsidiaries are excluded.

“Total Liabilities” shall mean the Current Liabilities and Long Term Debt less Subordinated Debt, resulting from past or current transactions, that require settlement in the future.

“Total Net Worth” (the amount of owner's or stockholder's ownership in an enterprise) is equal to Total Assets minus Total Liabilities.  For the purpose of calculating Total Net Worth of Borrower, following shall be excluded (i) accumulated earnings and unrealized foreign currency translation adjustments applicable to Borrower’s Canadian and European subsidiaries and (ii) all income and losses applicable to foreign currency adjustments for each period but not excluding such foreign currency adjustments for annual periods that must comply with GAAP. 

“Working Capital” shall mean Current Assets minus Current Liabilities.

(B) 1.  Borrower will be required to maintain the following financial ratios, percentages and amounts as of the last day of the fiscal period under review (quarterly, annually) by IBM Credit:

 

	
 
	
Covenant
	
Covenant Requirement

	
(i)
	
Revenue on an Annual Basis* (i.e. the current

fiscal year-to-date Revenue annualized)

to Working Capital
	
Greater than Zero and

Equal to or Less than 37.0:1.0

	
 
	
* Annualized Revenue from intercompany sales are excluded from this calculation.
	
 

	
 
	
 
	
 

	
(ii)
	
Net Profit after Tax to Revenue** 
	
Equal to or Greater than 

0.10 percent

	
 
	
**Excluding all income and losses applicable to (a) 100% ownership in Canadian and European subsidiaries and (b) foreign currency adjustments for each period but not excluding such foreign currency adjustments for annual periods that must comply with GAAP and excluding revenue from intercompany sales.
	
 

	
 
	
 
	
 

	
(iii)
	
Total Liabilities to Tangible Net Worth***
	
Greater than Zero and

Equal to or Less than 7.0:1.0

	
 
	
***Accumulated earnings and unrealized foreign currency translation adjustments applicable to Borrower’s Canadian and European subsidiaries are excluded from calculation of Borrower’s Total Assets and Total Net Worth.
	
 

2.    Business Supplies Distributors Holdings, LLC will be required to maintain the following financial ratios, percentages and amounts as of the last day of the fiscal period under review (quarterly, annually) by IBM Credit:

 

	
 
	
Covenant
	
Covenant Requirement

	
(i)
	
Revenue on an Annual Basis (i.e. the current

fiscal year-to-date Revenue annualized)

to Working Capital
	
Greater than Zero and

Equal to or Less than 37.0:1.0

	
 
	
 
	
 

	
(ii)
	
Net Profit after Tax to Revenue*

 

*Excluding all (a) income and losses applicable to foreign currency adjustments for each period but not excluding such foreign currency adjustments for annual periods that must comply with GAAP and (b) revenue from intercompany sales.
	
Equal to or Greater than 

0.10 percent

	
 
	
 
	
 

	
(iii)
	
Total Liabilities to Tangible Net Worth
	
Greater than Zero and

Equal to or Less than 7.0:1.0

 

 

	
 
	
Page 7 of  7Ex 10.1.5 5.31.15

Exhibit 10.1.5

Total Shareholder Return Performance Unit Award Program (the “Program”)
Performance Period July 22, 2015 – July, 2018

I.Purpose of the Program
The purpose of the Program is to align AngioDynamics’ executive compensation program with the interests of shareholders and to reinforce the concept of pay for performance by comparing the relative Total Shareholder Return (“TSR”) of shares of AngioDynamics’ Common Stock (the “Common Stock”) to the TSR of a pre-defined peer group (the “Peer Group”) of companies over a three-year period beginning on July 22, 2015. 

The Program entails the grant of Performance Unit Awards, and the program shall be administered under the AngioDynamics 2004 Stock and Incentive Award Plan, as amended (the “Plan”). Terms not defined in this Program document but defined in the Plan shall have the meaning ascribed to such term in the Plan.  The Program is established under section 5.II of the Plan and is intended to qualify for the performance-based compensation exception under Section 162(m) of the Internal Revenue Code (“Code”). 

II.     Eligible Participants
The Program covers members of the Executive Management Team (“EMT”) on the date that awards are granted under the Program as determined and in the amounts established by the Board of Directors (the “Board”).

The Board may review Program eligibility criteria for Participants in the Program from time to time and may revise such criteria at any time, even within a Program year, with or without notice and within its sole discretion.

		
	III.
	Performance Share Units

Pursuant to the Plan and this Program, the Board may, in its sole discretion, grant Performance Unit Awards to members of the EMT (the “Grant Date”).  Each Performance Unit Award shall specify a target number of shares of Common Stock underlying the Performance Unit Award (the “Target Amount”).  Shares of Common Stock underlying the Performance Unit Award granted under the Program (the “Performance Unit Awards”) shall be issued only upon satisfaction of both the performance vesting criteria described in this Section III and the payment eligibility criteria described in Section VII.  The applicable performance criteria are based on the TSR of AngioDynamics’ Common Stock relative to the TSR of the common stock of the companies in the Peer Group.

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The TSR for AngioDynamics and all other companies in the Peer Group will be measured over a three-year period beginning on July 22, 2015 and ending on the day that is the second trading day following AngioDynamics’ annual earnings announcement for its fiscal year ended May 31, 2018 (the “Performance Period”). 

The number of shares of Common Stock that vest under the Performance Unit Award will be in a range of 0% to 200% of the Target Amount of shares of Common Stock pursuant to the Performance Unit Award granted to the Participant based upon AngioDynamics’ TSR percentile ranking relative to the Peer Group as follows: 

	
		
	TSR Performance
Percentile Rank
	Performance Share Units
as a Percent of Target 

	75th Percentile or above
	200%

	50th Percentile
	100%

	25th Percentile
	50%

	Below 25th Percentile
	0%

If the minimum level of performance set forth above is achieved for the Performance Period, the number of shares of Common Stock vesting under the Performance Unit Award will be calculated linearly between each set of data points. 

Following the end of the Performance Period, the Board shall determine the number of shares of Common Stock, based upon the total number of shares of Common Stock underlying the Target amount of the Performance Unit Award, that shall become vested pursuant to AngioDynamics’ relative TRS percentile rank during the Performance Period pursuant to the table set forth above.

The Board shall issue a number of shares of Common Stock underlying the Performance Unit Award to the Participant in accordance with this Program and the applicable grant agreement equal to the number of shares of Common Stock, if any, that vested in the Performance Period.

The Board’s determination regarding the Company’s performance to the performance criteria with respect to the Performance Period shall be final and binding.  

Shares of Common Stock will be delivered or otherwise made available to the Participant as soon as practicable (and in all events within sixty (60) days) after the end of the Performance Period.  Any shares of Common Stock underlying a Performance Unit Award as to which the performance criteria of this Section III have not been satisfied as of the end of the Performance Period will be forfeited in their entirety.

2

	
		
	IV.
	   Calculation of Total Shareholder Return and Definitions

The TSR for AngioDynamics and each other company in the Peer Group shall include any cash dividends paid during the Performance Period and shall be determined as follows:

Total Shareholder Return for each Performance Cycle = 
(Change in Stock Price + Dividends Paid) / Beginning Stock Price

“Beginning Stock Price” with respect to AngioDynamics means the closing price as quoted on the NASDAQ Global Select Market of one share of the Company’s Common Stock on the beginning date of the Performance Period.  “Beginning Stock Price” with respect to each other company in the Peer Group means the daily average closing price as quoted on the New York Stock Exchange or the NASDAQ Global Select Market, as applicable, of one (1) share of common stock for the two calendar months prior to the beginning of the Performance Period.

“Change in Stock Price” means the difference between the Beginning Stock Price and the Ending Stock Price.

“Dividends Paid” means the total of all cash dividends paid on one (1) share of stock during the Performance Period.

“Ending Stock Price” with respect to AngioDynamics means the closing price as quoted on the NASDAQ Global Select Market of one share of the Company’s Common Stock on the ending date of the Performance Period.  “Ending Stock Price” with respect to each other company in the Peer Group means the daily average closing price as quoted on the New York Stock Exchange or the NASDAQ Global Select Market, as applicable, of one (1) share of common stock for the last two calendar months of the Performance Period.

Example: If the Beginning Stock Price for a company was $25.00 per share, and the company paid $2.50 in dividends over the Performance Period, and the Ending Stock Price was $30.00 per share (thereby making the Change in Stock Price $5.00 ($30.00 minus $25.00)), then the TSR for that company would be thirty percent (30%). The calculation is as follows: 0.30 = ($5.00 + $2.50) / $25.00

3

	
		
	V.
	Calculation of Percentile Performance

Following the calculation of the TSR for the Performance Period for AngioDynamics and each other company in the Peer Group, AngioDynamics and the other companies in the Peer Group will be ranked, in order of maximum to minimum, according to their respective TSR for the Performance Period.

After this ranking, the percentile performance of AngioDynamics as compared to the other companies in the Peer Group shall be determined by the following formula:

“P” represents the percentile performance which will be rounded, if necessary, to the nearest whole percentile by application of standard scientific rounding conventions. 

“N” represents the number of companies in the Peer Group, including AngioDynamics.

“R” represents AngioDynamics’ ranking versus the other companies in the Peer Group. 

Example: If AngioDynamics ranked 10th out of 56 companies, the performance (“P”) therefore will be in the 84th percentile.

This calculation is as follows: 0.837 = 1 - (10 - 1) / (56 - 1)

	
		
	 
	 

	VI.
	Peer Group

The companies in the Peer Group can be found in Appendix A attached hereto. 

If, during the Performance Period, two companies in the Peer Group merge, the surviving company shall remain in the Peer Group. 

If, during the Performance Period, a company in the Peer Group merges with, or is acquired by, a company that is not in the Peer Group, and the company in the Peer Group is the surviving company, then the surviving company shall not be included in the Peer Group. 

If, during the Performance Period, a company in the Peer Group merges with, or is acquired by, a company that is not in the Peer Group, and the company in the Peer Group is not the surviving 

4

company or the surviving company is no longer publicly traded, then the surviving company shall not be included in the Peer Group.

If, during the Performance Period, a company in the Peer Group sells all or substantially all of its assets, such company shall not be included in the Peer Group.

If, during the Performance Period, a company in the Peer Group splits-off or spins-off or consummates any other extraordinary reorganization transaction, and such spin-off, split-off or reorganization comprises more than 20% of the assets of the company prior to such spin-off, split-off or reorganization, such company shall not be included in the Peer Group.

If, during the Performance Period, a company in the Peer Group files for bankruptcy or otherwise ceases to be traded or quoted on any national exchange, such Company shall remain in the Peer Group.  If no public stock price information is available for such company after it files for bankruptcy or otherwise ceases to be traded or quoted on a national securities exchange, the TSR for such company shall equal a total loss of equity (or -100%) during the Performance Period for which no stock price information is available.

The triggering event for determining whether a company shall be excluded from the Peer Group pursuant to this Section VI shall be the first official announcement of an SEC reportable event.

	
		
	 
	 

	VII.
	Payment Eligibility Criteria

Except as set forth below with respect to a Change in Control or termination of employment due to Retirement, death, or Disability, (i) no shares of Common Stock underlying the Performance Unit Award shall issue prior to the end of the Performance Period and (ii) a participant must be employed by the Company (as defined below) through the end of the Performance Period to be eligible to receive shares of Common Stock that have vested under the Performance Unit Award pursuant to Section III of this Program. 

Death. If the Participant’s employment with AngioDynamics or its subsidiaries or affiliates is terminated due to death on or after the Grant Date, but prior to the end of the Performance Period, the Performance Unit Award shall remain eligible to vest following the end date of the Performance Period according to the vesting provisions set forth in Section III of this Program and the Participant shall receive a pro-rated portion of the Common Stock underlying the Performance Unit Award that would otherwise vest based upon the provisions set forth in Section 

5

III of this Program on the end date of the Performance Period, with the pro-rata portion based on the Participant’s whole months of service with the Company during the Performance Period prior to the date of such termination; provided that a partial month of employment will be considered a whole “month of service” for purposes of this Program only if the Participant was employed by AngioDynamics for at least fifteen (15) days during such month.  Any portion of the Performance Unit Award that remains unvested on the end date of the Performance Period (after giving effect to such pro-ration) shall be considered to have terminated on such date.  The Participant may, from time to time, name any beneficiary or beneficiaries (who may be named contingently or successively) to whom any benefit granted to the Participant under this Program is to be paid in case of his or her death before he or she receives any or all such benefit.  Each such designation shall revoke all prior designations by the Participant, shall be in a form prescribed by AngioDynamics, and will be effective only when filed by the Participant in writing with the Secretary of the Company during the Participant’s lifetime.  In the absence of any such designation, benefits remaining unpaid at the Participant’s death shall be paid to the Participant’s estate.

Retirement or Disability. If the Participant’s employment with AngioDynamics or its subsidiaries or affiliates is terminated due to Retirement or Disability on or after the Grant Date, but prior to the end of the Performance Period, the Performance Unit Award shall remain eligible to vest pursuant to Section III of this Program on the end date of the Performance Period and the Participant shall receive a pro-rated portion of the Common Stock underlying the Performance Unit Award that would otherwise vest pursuant to Section III of this Program based on performance during the Performance Period, with the pro-rata portion based on the Participant’s whole months of service with AngioDynamics during the Performance Period prior to the date of such termination; provided that a partial month of employment will be considered a whole “month of service” for purposes of this Agreement only if the Participant was employed by AngioDynamics for at least fifteen (15) days during such month.  Any portion of the Performance Unit Award that remains unvested on the end date of the Performance Period (after giving effect to such pro-ration) shall be considered to have terminated on such date.

Other Termination of Employment -- Eligibility Conditions. If the Participant’s employment with AngioDynamics or any and of its subsidiaries or affiliates is terminated or the Participant separates from AngioDynamics or its affiliates or subsidiaries for any reason other than death, Retirement or Disability, the Performance Unit Award shall terminate and no shares of Common Stock shall be issued.  

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Change in Control of the Company.  Notwithstanding anything to the contrary in this Agreement, in the event of a Change in Control (as defined in this Program) of AngioDynamics on or after the Grant Date, but prior to the end of the Performance Period and prior to the Participant’s termination of employment for any reason, the Participant shall immediately vest in 100% of the Target Amount of shares of Common Stock subject to the Performance Unit Award. Notwithstanding anything to the contrary in this Agreement, in the event the Participant’s employment with AngioDynamics or any of its subsidiaries or affiliates terminates due to one of the reasons expressly covered above (except as described in “Other Termination of Employment” set forth above) and a Change in Control of AngioDynamics occurs subsequent to such a termination of employment (but during the Performance Period), the pro-rata vesting provided for in such sections shall be based on the Target Amount of shares of Common Stock subject to the Performance Unit Award.  Any shares of Common Stock subject to the Performance Unit Award that become vested pursuant to this section of the Program shall be issued to the Participant upon or as soon as practicable (and in all events within thirty (30) days) after the effective date of the Change in Control of AngioDynamics (or, if so provided by the Board, immediately prior to the Change in Control).  In the event a Change in Control of AngioDynamics occurs following the last day of the Performance Period, prior to the Participant’s termination of employment for any reason, and prior to the date all vested shares of Common Stock underlying the Performance Unit Award are issued pursuant to this Program, any shares of Common Stock subject to the Performance Unit Award that became vested pursuant to this paragraph of the Program shall be issued to the Participant upon or as soon as practicable (and in all events within thirty (30) days) after the effective date of the Change in Control of AngioDynamics (or, if so provided by the Board, immediately prior to the Change in Control).

For the purposes of this Program, Change in Control shall mean shall mean that any of the following events has occurred:
(i)     any Person is or becomes the Beneficial Owner, directly or indirectly, of securities of the Company representing more than 50% of the combined voting power of the Company's then outstanding securities, excluding any Person who becomes such a Beneficial Owner in connection with a transaction described in clause (A) of paragraph (iii) below; or 
(ii)     the following individuals cease for any reason to constitute a  majority of the number of directors serving on the Board: individuals who, at the beginning of any period of two consecutive years or less (not including any period prior to the date of this Agreement), constitute the Board and any new director (other than a director whose initial assumption of office is in connection with an actual or threatened election contest, including but not limited to a consent solicitation, relating to the election of directors of the Company) whose appointment or election by the Board or nomination for election by the Company's shareholders was approved or 

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recommended by a vote of at least two-thirds (2/3) of the directors then still in office who either were directors at the beginning of such period or whose appointment, election or nomination for election was previously so approved or recommended; or 
(iii)     there is consummated a merger or consolidation of the Company or any Subsidiary with any other corporation, other than (A) a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior to such merger or consolidation continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity or any parent thereof), in combination with the ownership of any trustee or other fiduciary holding securities under an employee benefit plan of the Company or any Subsidiary, at least 60% of the combined voting power of the securities of the Company or such surviving entity or any parent thereof outstanding immediately after such merger or consolidation, or (B) a merger or consolidation effected to implement a recapitalization of the Company (or similar transaction) in which no Person is or becomes the Beneficial Owner, directly or indirectly, of securities of the Company representing more than 50% of the combined voting power of the Company's then outstanding securities; or 
(iv)     the shareholders of the Company approve a plan of complete liquidation or dissolution of the Company or there is consummated an agreement for the sale or disposition by the Company of all or substantially all of the Company's assets, other than a sale or disposition by the Company of all or substantially all of the Company's assets to an entity, at least 60% of the combined voting power of the voting securities of which are owned by shareholders of the Company in substantially the same proportions as their ownership of the Company immediately prior to such sale.
	
		
	 
	 

	VIII.
	Termination, Suspension or Modification and Interpretation of the Program

The Board has sole authority over administration and interpretation of the Program and retains the right to exercise discretion as it sees fit, except that, the Board shall have no discretion to increase the number of shares of Common Stock in which a Participant may vest above the amount described in Section III.  The Board may terminate, suspend or modify and if suspended, may reinstate with or without modification all or part of the Program at any time, with or without notice to the Participant.  The Board reserves the exclusive right to determine eligibility to participate in this Program and to interpret all applicable terms and conditions, including eligibility criteria.

IX. Other
This document sets forth the terms of the Program and is not intended to be a contract or employment agreement between the Participant and AngioDynamics, its subsidiaries or affiliates.  

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As applicable, it is understood that both the Participant and AngioDynamics have the right to terminate the Participant’s employment with the company at any time, with or without cause and with or without notice, in acknowledgement of the fact that their employment relationship is “at will.” 

To the extent section 409A of the Code (“Section 409A”) applies to any Performance Unit Award under this Program, the Performance Unit Award shall be interpreted in a manner consistent with Section 409A. Where Section 409A applies, in the case of any payment made on termination of employment, a termination of employment shall not be deemed to have occurred unless such termination is also a “separation from service” within the meaning of Section 409A and, for purposes of any such provision, references to a “termination,” “termination of employment,” or like terms shall mean “separation from service.”  Where Section 409A applies, in the case of a payment made upon a Change in Control, a Change in Control shall not be deemed to have occurred unless there is a change in the ownership or effective control of AngioDynamics, or in the ownership of a substantial portion of the assets of AngioDynamics, as defined in Section 409A.  Where required by Section 409A in the case of a specified employee (as determined under Section 409A), payments on termination shall be made on the first business day of the seventh month following termination.

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APPENDIX A

	
		
	Abaxis Inc.
	Lakeland Industries Inc.

	Abiomed Inc.
	Lemaitre Vascular, Inc.

	Accuray Inc.
	 

	AlphaTec Holdings Inc.
	Masimo Corporation

	Articure, Inc.
	Merit Medical Systems, Inc.

	Atrion Corporation
	Mine Safety Appliances Company

	C.R. Bard, Inc.
	Natus Medical Incorporated

	Becton, Dickinson & Company
	NuVasive, Inc.

	Boston Scientific Corporation
	NxStage Medical, Inc.

	Cantel Medical Corp.
	Resmed Inc.

	Conmed Corporation
	 

	CryoLife, Inc.
	RTI Surgical, Inc.

	Cutera, Inc.
	Solta Medical, Inc.

	Cyberonics, Inc.
	Span-America Medical Systems, Inc.

	Cynosure, Inc.
	Spectranetics Corporation

	Dexcom, Inc.
	St. Jude Medical, Inc.

	Digirad Corp
	Steris Corporation

	Edwards Lifesciences Corporation
	Stryker Corporation

	Endologix, Inc.
	 

	Exactech, Inc.
	Synergetics USA, Inc.

	Haemonetics Corporation
	Teleflex Incorporated

	ICU Medical, Inc.
	Thoratec Corporation

	Insulet Corporation
	Varian Medical Systems, Inc.

	Integra Lifesciences Holdings Corporation
	Vascular Solutions, Inc.

	Intricon Corporation
	 

	Intuitive Surgical, Inc.
	Wright Medical Group, Inc.

	Invacare Corporation
	Zimmer Holdings, Inc.

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